House of Representatives
23 June 1931

12th Parliament · 1st Session

  1. House of Representatives
  2. 12th Parliament
  3. 1931

Mr. Speaker (Hon. Norman Makin) took the chair at 3 p.m., and offered prayers.

page 2868

QUESTION

INTERNATIONAL DEBTS

Mr LYONS:
WILMOT, TASMANIA

– Has the Prime Minister any information in regard to the proposal of the Government of theUnited States of America to postpone for a period all payments in connexion with intergovernmental debts, reparations, and relief loans? If so, will the right honorable gentleman state whether a general suspension of war debt payments would permit of a further adjustment or postponement of Australia’s debts to the Government of the United Kingdom ?

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

– I hope to be able to make a statement to the House on that subject at a later hour.

Mr CROUCH:
CORANGAMITE, VICTORIA

– The Sydney Morning Herald of to-day states that in official circles at Canberra, Great Britain’s reply to President Hoover’s proposal is being awaited with intense interest. Should not the Prime Minister, instead of awaiting Great Britain’s reply, adopt a positive rather than a passive attitude in regard to the matter?

Mr SCULLIN:
YARRA, VICTORIA · ALP; FLP from 1931; ALP from 1936

– The House will be informed later what attitude the Government is taking.

page 2869

QUESTION

RUSSIAN TIMBER

Mr PATERSON:
GIPPSLAND, VICTORIA

– The Sydney Morning Herald of to-day publishes a translation of an article entitled, “An Enslaved People “, which appeared in the Journal de Geneve on the 14th May last, in the course of which the following statement appears : -

The Socialist Messenger of the 25th April, 1.931, the organ of the Russian section of the Second International, announces that “ 2,000,000 peasants and workers have been arrested by thu O.G.P.U. (Russian secret police) during the hist two years, and that more than 1,000,000 of these are employed at forced labour.” According to the information furnished by a former member of the O.G.P.U., their number will have been increased after a year from May 1, 1930, by GG2.000, of whom 570,000 are men, 74,000 women, and 18,000 young men and women. These last figures do not include Siberia.

The factory worker, more than the land worker, lias fallen to the level of chattels which the Government disposes of at its pleasure, going even to the extent of selling this economic labour to the enterprises which are charged with exploiting the immense forests of Southern Russia.

Last week the Prime Minister scaled that the Government 13 inquiring into the conditions under which Russian timber was brought to Australia by the vessel King [judd. Will the right honorable gentleman extend those inquiries to cover the truth or otherwise of the allegations contained in the article I have quoted, and, unless they can be disproved, will ho prevent the release from bond of the King Ludd’s cargo?

Mr SCULLIN:
ALP

– The Government is investigating this matter as thoroughly as possible. The British Government also has been making similar investigations for some considerable time, but has experienced great difficulty in sifting the truth from the many conflicting statements that are -made. The inquiries at (this end are still being conducted, and the Customs Department is investigating the matter from another aspect, with a view to ensuring that no goods that are produced or loaded under unfair economic conditions shall be sold in Australia.

Mr JONES:
INDI, VICTORIA

– Will the Government be prepared to prevent the release of the Russian timber from bond pending completion of those inquiries?

Mr SCULLIN:

– Obviously, I cannot announce beforehand what action the Government proposes to take. I merely repeat that the Customs Department is investigating the matter very thoroughly.

Mr BERNARD CORSER:
WIDE BAY, QUEENSLAND

– Has the Commonwealth Government made any protest to the British Government against the dumping of Russian butter and wheat in the United Kingdom? If so, how can such a protest be sustained, if the Government does not intend to prevent the sale in Australia of Russian timber loaded by slave labour?

Mr SCULLIN:

– Representations were made to the British Government regarding Russian butter. Of course, the British Government has full control over imports into the United Kingdom, but I am thankful to say that our investigations indicate that Russian butter is not getting an advantage over Australian butter in the British market.

Mr MACKAY:
LILLEY, QUEENSLAND

– I direct the attention of the Minister for Trade and Customs to the following telegram which I have received : -

Timber industry advisory committee representing all sections Queensland timber industry now devising means rehabilitating timber trade, views with alarm recent importation Russian timber. Respectfully -beg you take immediate action prevent admittance further shipment.

Ritchie, Secretary.

Has the Minister read a statement in the press to the effect that a further consignment of Russian timber has left Vladivostock for Australia, and, if so, can he say what action will be taken by the Goment regarding it?

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

– As the Prime Minister has stated, a very full inquiry is being made into the matter. The representations of’ the Timber Merchants Association of Queensland will be taken into consideration.

Mr LAZZARINI:
WERRIWA, NEW SOUTH WALES

– If the Government proposes to inquire into the allegations concerning the conditions under which Russian timber is produced for export, will it also consider the propriety of preventing Russia from purchasing Australian wool, because that would be manufactured in Russia under similar conditions of slavery?

Question not answered.

page 2870

QUESTION

REDUCTION OF PENSIONS

Mr CROUCH:
CORANGAMITE, VICTORIA · ALP

– The Ballarat Courier reports the honorable member for Ballarat (Mr. McGrath) as having stated in that city on Saturday night -

The proposal was to reduce the returned soldiers 20 per cent. The Opposition had proposed that a committee of six or seven soldier representatives should go into the question and suggest where the savings could be made. That suggestion had been accepted.

I ask the Prime Minister if it is not a fact that the proposal was made from the Ministerial side of the House?

Mr SCULLIN:
ALP

– Many suggestions of the nature indicated were made from both sides of the House.

Mr Stewart:

– That course was perfectly obvious to everybody.

Mr SCULLIN:

– It was. The first to speak to me on the subject was the honorable member for Corangamite (Mr. Crouch).

Mr Maxwell:

– What does it matter who first made the suggestion?

Mr SCULLIN:

– A deputation representing one section of returned soldiers made that proposal to the Minister for Repatriation. It was subsequently br ought to my notice by two or three members of the Opposition and some Ministerial members. It was also mentioned in the House by the Leader of the Opposition (Mr. Lyons), when speaking on the Debt Conversion Bill. It is fortunate that apparently there is unanimous approval of the course adopted.

page 2870

QUESTION

SALES TAX

Mr WHITE:
BALACLAVA, VICTORIA

– For the convenience of business firms, will the Treasurer have the rulings by the Commissioner of Taxation in regard to the Sales Tax collated in book form?

Mr THEODORE:
Treasurer · DALLEY, NEW SOUTH WALES · ALP

– I shall inquire as to what labour and cost would be involved in carrying out the honorable member’s suggestion.

page 2870

QUESTION

EMPLOYMENT ON THE WATERFRONT

Mr JAMES:
HUNTER, NEW SOUTH WALES

– The Sydney Morning Herald of to-day reports that the Assistant Minister for Industry has suspended the issue of licences on the waterfront. I ask the Attorney-General whether we are to infer from that action that the policy of the Government in regard to preference to unionists on the waterfront has changed?

Mr BRENNAN:
Attorney-General · BATMAN, VICTORIA · ALP

– I have not had an opportunity to peruse the report to which the honorable member refers, and the Government is not prepared at this moment to announce its policy in regard to this matter.

page 2870

QUESTION

GOLD PROSPECTING

Mr CUSACK:
EDEN-MONARO, NEW SOUTH WALES

– I ask the Minister for

Home Affairs what action has been taken to enable miners to search for gold in the Federal Capital Territory. I understand that the ordinance relating to miners’ rights is not yet ready?

Mr BLAKELEY:
DARLING, NEW SOUTH WALES

– The Seat of Government Mining Ordinance is most comprehensive, and includes all the best features of the various State mining laws. It has taken a long time to compile, but I anticipate that it will be promulgated in the near future.

page 2870

QUESTION

PREMIERS CONFERENCE

Attitude of New South Wales GOVERNMENT.

Mr GREGORY:
SWAN, WESTERN AUSTRALIA

– Is the Prime Minister in a position to make a statement with regard to the attitude of the New South Wales Government towards the rehabilitation scheme agreed to at the recent conference in Melbourne?

Mr SCULLIN:
ALP

– I assume that the honorable gentleman is referring more particularly to the meeting of the subcommittee appointed by the conference. The meeting of that committee at the last week-end was not called to deal specifically with the rehabilitation scheme. Each Government is presenting its own proposals to its Parliament. I understand that the Premier of New South Wales will submit his scheme to the Parliament of that State this week. With reference to the meeting of the subcommittee, I may say that we had a very full discussion for two days, and negotiations to reach agreement are still proceeding.

page 2870

QUESTION

NECESSITOUS FARMERS

Mr NAIRN:
PERTH, WESTERN AUSTRALIA

– Has the right honorable the Prime Minister any communication to make to the House with reference to the proposed loan to assist necessitous farmers and the unemployed? Also, I should like to know if, in view of the intention to reduce bond interest to 4 per cent., it is proposed to offer interest at a higher rate on future borrowings?

Mr SCULLIN:
ALP

– The issue of loans, and the terms upon which they shall be offered, are matters for determination by the Loan Council. The question raised by the honorable member is being considered by that body.

page 2871

QUESTION

PROVINCIAL PRESS

Mr BERNARD CORSER:

– I a«k the Postmaster-General, in view of the alarm occasioned to proprietors of provincial newspapers in Queensland by the reported intention of the Minister to withdraw press rates on telephones, and to restrict the use of trunk lines, can he say when the proposed conference to consider these matters will be held, and what opportunity will be given to proprietors of provincial newspapers to be heard?

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

– Mr. Shakespeare, who, I understand, is President of the Provincial Press Association, has made representations to me about the matter, and I have arranged for a conference at Canberra, on Thursday next, at 2.15 p.m. Mr. Shakespeare has been advised of this, and I assume that he has communicated with the proprietors of provincial newspapers throughout Australia.

page 2871

QUESTION

EXCESS COAL-MINERS

Mr FRANCIS:
MORETON, QUEENSLAND

– On the 16th May of last year, the Prime Minister (Mr. Scullin) announced that the sum of £100,000 was to be made available for the repatriation of excess coal-miners. Subsequently arrangements were made for a portion of that amount to bc expended on the repatriation of excess miners in Queensland. I attended conferences in Sydney arranged by the ex-Minister for Industry (Mr. Beasley) and, later, discussed the matter on many occasions with hi3 successor (Mr. Holloway), who promised to instruct Mr. Gunn, the Director of Development, to make inquiries in Queensland. I understand that Mr. Gunn has not gone to Queensland, and that, up to the present, nothing has been done to repatriate excess miners in that State. Not one miner has yet been repatriated. Can the Prime Minister say what the Government proposes to do, and will he lay on the table of the House the correspondence which has passed between the committee and his department and the Assistant Minister for Industry on this subject?

Mr SCULLIN:
ALP

– An amount of money was set . aside for the repatriation of excess miners, and approval was given for the allocation of a certain portion of it to Queensland. That amount is, I admit, not very considerable, but if the committee which has been appointed makes a recommendation, that money will be available.

Mr Mackay:

– It has been stated that the money is being spent in salaries for members of the committee.

Mr SCULLIN:

– If the honorable member for Lilley (Mr. Mackay) will give me some definite information on that point, I will have the complaint investigated.

Mr FRANCIS:

– Will the Prime Minister lay the papers on the table?

Mr SCULLIN:

– I shall have a look at them, and see if that can be done.

Mr JAMES:

– In view of the fact that the first interim report of the Shale Oil Committee was favorable to the absorbtion of surplus coal-miners, and that the Prime Minister has just said he regarded the amount of money made available to the committee as small, will he consider the advisableness of also making available to it the £50,000 provided in the Estimates for the purpose of assisting the coal-owners to regain their export trade?

Mr SCULLIN:

– I said that the ‘ amount of money made available to Queensland was small; the full amount of £100,000 I regard as substantial, particularly in existing conditions. The £50,000 referred to by the honorable member was voted for another purpose, and cannot be used as he desires.

Mr JAMES:

– No attempt has been made to use it.

Mr SCULLIN:

– The Government is liable to provide money for the purpose for which it was voted, and has, in fact, received one account for expenses incurred on the subject specified.

page 2872

QUESTION

BUFFALO FLY PEST

Mr RIORDAN:
KENNEDY, QUEENSLAND

– Has the Minister for Home Affairs received the report of the scientists who were appointed to investigate and report upon the buffalo fly? If so, can he say what action has been taken to prevent the spread of the pest?

Mr BLAKELEY:

– An interim report only has been received. It indicates clearly that there is no suitable known method for the quarantining of the buffalo fly area. When the final report is to hand the policy of the Government will be announced.

page 2872

QUESTION

LOAN COUNCIL

Position of New South Wales Government

Mr PRICE:
BOOTHBY, SOUTH AUSTRALIA

– Is the Prime Minister in a position to make an announcement with reference to the negotiations that have taken place to induce Mr. Lang, the Premier of New South Wales, to rejoin the Loan Council?

Mr SCULLIN:
ALP

– I think I have already answered that question.

Mr PRICE:

– I regret that I did not hear the reply of the Prime Minister. I should like to know what stage has been reached in the negotiations?

Mr SCULLIN:

– I informed the honorable member for Swan (Mr. Gregory) that the negotiations were still proceeding.

page 2872

QUESTION

PETROL INQUIRY

Mr LACEY:
GREY, SOUTH AUSTRALIA

– Will the Prime Minister inform me what stage has been reached by the Government in considering the request for an inquiry into the profits of the various oil companies in Australia, and also into the activities of the Commonwealth Oil Refineries Limited ?

Mr SCULLIN:
ALP

– The subject was discussed, to some extent, at the Premiers Conference. It was felt that all the Governments were interested in the subject, and that an inquiry which had the approval of all the Governments would not only be more thorough, but also more effective than an. inquiry undertaken by only one government. No finality was reached, however, for the time of the con ference was fully occupied in discussing more urgent financial matters which were before it. We shall go into the subject later.

page 2872

QUESTION

PROPOSED £550,000,000 CONVERSION LOAN

Mr PRICE:

asked the Treasurer, upon notice -

In connexion with the proposed voluntary conversion loan of £550,000,000, is he in a position to state how this amount is arrived at with regard to(a) the Commonwealth; and (b) the various States, showing the Commonwealth and each State separately?

Mr THEODORE:
ALP

– The approximate figures for the various Governments are as follow : -

Of the £336,000,000 representing debts of the States, £155,000,000 has been raised by the Commonwealth for the States and £181,000,000 is covered by State securities.

Mr PRICE:

asked the Treasurer, upon notice -

  1. Is he in a position to state, in connexion with the proposed voluntary conversion loan of £550,000,000 to 4 per cent, per annum, what are the loans concerned, giving the amount, present rate of interest, and the maturity in each case?
  2. What are the computed savings of interest payments, if the proposal is agreed to?
Mr THEODORE:

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

  1. Owing to the amount of detail involved in replying to this question, the honorable member is invited to refer, for Commonwealth figures, to pages 798 and 799 of Commonwealth Gazette, No. 37, published on 14th May, 1931. This gives full particulars of Commonwealth debt up to 31st March, 1931. The figures for the States may be found in the printed statement laid on the table of the library in reply to a previous similar question asked by the honorable member for Warringah (Mr.Parkhill) on6th May.
  2. The total reduction in respect of the whole Australian debt, Commonwealth and State, will be about £6,500,000. This saving will not be wholly reflected in the respective budgets, as part of it will be passed on to local authorities which have borrowed from the various governments.

page 2873

QUESTION

BOOKS AND PERIODICALS

Primage Duty and Sales Tax

Mr GUY:
BASS, TASMANIA

asked the Treasurer, upon notice -

In view of the report of the Tariff Board, dated 26th June, 1930, that the board was emphatically of the opinion that to place a duty upon books or periodicals would be seriously detrimental to the best interests of Australia, will he, when considering the exemptions to be made under the proposed increase in the primage duty and sales tax, give favorable consideration to exempting books and periodicals?

Mr THEODORE:
ALP

– The matter will be considered.

page 2873

QUESTION

BUTTER

Marketing System: Prices

Mr MORGAN:
DARLING DOWNS, QUEENSLAND

asked the Minister for Markets and Transport, upon notice -

Whether, in view of his definite opinion that f.o.b and c.i.f. selling of butter in the United Kingdom should be abolished, and in view of the further fact that that policy is being thwarted by the Dairy Produce Export Board, will he say -

What is the composition of that board;

How are members elected;

Is it truly representative of producers; and

If not, can steps be taken to ensure that the board is reconstituted along lines that will make it more truly representative of producers?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

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

  1. The Dairy Produce Export Board consists of the following: -

    1. One representative of the Commonwealth Government;
    2. Two representatives of each of the States of Queensland, New South Wales and Victoria, and one representative of each of the States of Tasmania, South Australia, and Western Australia, representing cooperative butter and cheese factories in each of those States;
    3. Two representatives of proprietary butter and cheese factories;
    4. One member representing persons engaged as sellers of dairy produce out of the Commonwealth, either as agents or on their own account.
  2. The persons referred to in items (a) and(d) of the reply to question 1 arc appointed by the Governor-General. Those referred to in items (b) and (c) are elected by boards of directors of co-operative butter and cheese factories and proprietary butter and cheese factories respectively.
  3. The members of the board are not directly elected by producers.
  4. Earnest consideration will be given to representations submitted by producers who claim that the board should be reconstituted to ensure direct representation of the producing interests thereon.

On the 18th June the honorable member for Barton (Mr. Tully) asked me the following questions, upon notice : -

  1. What was the wholesale price of Australian butter per cwt. during the last week of May, 1931, at the following places: - Sydney, Melbourne, Brisbane, Adelaide, Perth, Hobart?
  2. What was the wholesale price of a similar class of butter in the United Kingdom for the same period ?
  3. What was the import duty on butter into Australia?
  4. What percentage would the United Kingdom f.o.b. value of Australian butter be in relation to the Australian import duty at the above-mentioned period?

I now desire to furnish the following answer to the honorable member : -

  1. The information desired by the honorable member is not made clear, but I shall be glad to obtain any particulars he desires if he will ask a further question on the subject.

page 2873

QUESTION

DUTY ON WINE AND SPIRITS

Mr FORDE:
ALP

– On the 28th May the honorable member for East Sydney (Mr. Ward) asked the following questions’, upon notice : -

  1. Is it a fact that immediately following the imposition of wine and whisky duties, the employers have made an application for a 10 per cent, reduction in the wages of the employees in the industry?
  2. If so, will he, in view of his statement to the House last week”, seriously consider the removal of the protective customs duty from wine and spirits?

I am now able to furnish the honorable member with the following information : -

  1. A number of firms applied to the Commonwealth Court of Conciliation and Arbitration on the 30th April, 1931, for a 10 per cent, reduction of wages in connexion with the federated liquor trades award re wine and spirit stores. The applicants comprised importers as well as some local wine-makers and distillers, but the application appears to refer to the distribution and sale of imported wines and spirits as well as locally manufactured rather than to their manufacture.
  2. As the majority of the applicants for u 10 per cent, reduction m wages were importers the suggested reduction of the duties would be an additional saving to them and not an impost.

page 2874

QUESTION

PRICE OF FORD MOTOR PARTS

Mr FORDE:
ALP

– On the 28th May, the honorable member for Forrest (Mr. Prowse) asked the following question, upon notice : - ls it a fact that drain plugs for Ford trucks, that were quoted at ls. each in 1927, are now quoted at 5s. 8d. each. If so, will lie cause inquiry to bc made to prevent profiteering of this nature being foisted upon the Australian primary producer behind tariff walls ?

I am now able to furnish the following information : -

Yes, but the price will be reduced to 2s. each on the 1st August, 1931, as these articles are now being made in Australia?

page 2874

QUESTION

DUTY ON NEWSPRINT

Mr FORDE:
ALP

– On the 4th June, the honorable member for Bendigo (Mr. Keane) asked the following questions, upon notice : -

  1. What amount is realized from the duty on newsprint?
  2. What fluctuations in the price of newsprint have occurred since the imposition of the duty?

I am now able to furnish the following information : -

  1. The duty referred to was imposed in July, 1930, and actual figures as to duty collected since that date will not be tabulated for some time. On the basis of actual importations for 1929-30 the duty at present rates would have produced £144,715 for one vear.
  2. Since the 9th July, 1930, the f.o.b. selling price overseas of newsprint on reels has been reduced as follows: - Scandinavian by £2 10s. per ton; Canadian and British by os. per ton. Large importers such as the metropolitan newspapers are usually buying under a contract and, therefore, might not get the immediate advantage of such reductions. Newsprint is principally imported direct by the large newspaper companies and the only local selling prices would be for sales by merchants to country and suburban newspapers. These selling prices are said to have been increased since the 9th July, 1930, to cover customs duty, primage and sales tax. There is no fixed price for newsprint in small lots, and particulars of the fluctuations are not available.

page 2874

QUESTION

SUGAR-GROWING INDUSTRY

Mr FORDE:
ALP

– On the 4th June, the honorable member for Swan (Mr. Gregory) asked the following questions, upon notice: -

  1. Is it a fact that in the area assigned for sugar-growing for the Babinda Mills, North Queensland, 13,796 acres during 1930 produced 31,329 tons of sugar, equal to 2.27 tons per acre, whereas in the assigned area for the Fairymead Mill, Bundaberg district, 12,940 acres produced 13,855 tons of sugar in the same year, equal to 1.07 tons per acre?
  2. Is it a fact that the Queensland Government, through its cane prices legislation, refuses to permit any more of the rich lands of the north to be assigned for sugar-growing?
  3. Is it the policy of the Commonwealth Government to subsidize sugar-growing in comparatively unsuitable lands by reason of its lower fertility, colder winters and droughts, whereas by the throwing open of areas of superior fertility and climate a substantial reduction in price could be made to the consumer and still return a profitable income to the grower?
  4. Can he state why this phase of the industry was not considered by the committee appointed to inquire into the conditions of the industry ?

I am now able to furnish the honorable member with the following information : -

  1. It is not reasonable to compare the production of raw sugar on the basis of the relative areas assigned for cane-growing. The total area of land assigned in any mill district is never all cultivated in any given season ; varying percentages of the land must be fallowed in order to obtain efficient production and low costs. The correct comparison is one based on the area of land harvested. The actual position in regard to the Babinda and Fairymead sugar mill districts for 1930 was as follows: -

The larger percentage harvested in the case of Babinda out of the gross area assigned is understood to be duc to the fact that the Babinda district was opened up as recently as fifteen years ago, whereas sugar-cane has been cultivated in the Fairymead district for about 50 years, and therefore, the land requires more fallowing.

  1. The Queensland Central Sugar-Cane Prices Board, acting under its statutory powers, has severely limited during recent years the issue of further assignments for growing sugar-cane. This has been done with the concurrence of the whole sugar industry so as to prevent further over-production.
  2. No. This question appears to be based on the fallacy exposed in the answer to questionNo. 1.
  3. This phase of the sugar industry was fully considered by the recent Sugar Inquiry Committee, as will be seen by a perusal of the committee’s report.

page 2875

QUESTION

IMPORTATION OP OREGON

Mr FORDE:
ALP

– On the 17 th June, the honorable member for Corangamite (Mr. Crouch) asked the following questions, upon notice: -

  1. What amount of Oregon timber is now in bond ?
  2. Is a very large amount so held in anticipation of a decreased duty on such timber under the proposed Canadian treaty?
  3. What steps does he propose to take to protect the timber-cutters and employees from the prejudicial effect of the import of this timber under reduced duties?

I am now able to furnish the honorable member with the following information : -

  1. 2,463,908 super, feet.
  2. The quantities of timber at present in bond are said to be largely due to the decided slump which has occurred in the building trade.
  3. The details of the Canadian treaty have not yet been disclosed. The interests of the local timber-cutters were fully considered in dealing with the matter.

page 2875

QUESTION

FEDERAL CAPITAL TERRITORY RENTALS

Mr BLAKELEY:

– On the 11th June, the honorable member for Herbert (Mr. Martens) asked the following questions, upon notice: -

  1. What was the weekly rent paid by the Civic Administrator prior to the recent revaluation?
  2. What is the present weekly rental paid by that officer ?
  3. Is there any case in which a greater reduction in rent has been made as the result of the rent re-valuations; if so, to whom was such reduction given?
  4. What is the average amount of the net weekly rent reduction for all other houses, brick and wood separately, occupied by public servants who were in receipt of the 20 per cent, rental allowance?

I am now in a position to supply the following answers: -

  1. Net rental, £5 2s. 2d. Gross . rental, £6 6s. 5d.
  2. £40s. 6d. This rental has been fixed on exactly the same basis as that of other timber houses as a result of the re-valuation made by the departmental committee, appointed by the Government to investigate the rental question, and consisting of an architect, a property officer, and a representative of the Treasury.
  3. The reduction in this case was greater than in any other as the rental of the house was the highest paid for a government-owned residence in Canberra. Approximately equal percentage reductions were made, however, in the rentals of other timber houses in the same group, the scale of which was also unreasonably high, as indicated by the committee’s review. This is borne out” by the fact that tenants could not be obtained for these houses at the rentals in force prior to the re- valuation, and they have been vacant for about twelve months.

The previous rental of the house occupied by the Civic Administrator, and other timber houses in the same group, was over 20 per cent, higher than that of brick houses of similar accommodation. “ The Federal Capital Commission had promised a review of the matter, but it was allowed to stand over to be dealt with by the special committee appointed to consider rentals generally.

  1. Brick houses, 3.3 per cent. ; timber houses, 13.5 per cent.

page 2875

QUESTION

DEFENCE DEPARTMENT

Proposed Economies

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– On the 17th June the honorable member for Balaclava (Mr. White) asked the following question : -

Is the Minister for Defence aware that certain staff officers, who are officers of the regular army, and for whom provision was made to be absorbed in the Public Service, when rationing was introduced into the Defence Department, are now under notice of discharge ?

I am now in a position to inform the honorable member that in consequence of the change from compulsory to voluntary training introduced by the Government, with the resultant diminution in the quantity of work in connection with the administration and training of the peace strength of the Australian military forces, a number of officers of the Australian staff corps became surplus to requirements. Approval was given by the Government for the year 1930-31 to be considered a year of “ retrenchment “ in the terms of the Superannuation Act 1922- 30, sections 25, 39, and 40, and for action to be taken gradually to reduce the number of staff corps officers either by voluntary resignations, appointments to the

British Army, appointments to the Indian Army, transfers to the Commonwealth Public Service of those eligible, or by retrenchment of those considered to be less efficient in their duties than the normal efficiency required during a period of stress. In accordance with this decision, and following negotiations with the Commonwealth Public Service Board, and an addition to the Commonwealth Public Service Act - section 37a - twelve officers of the Australian staff corps, who were selected for retrenchment, were afforded an opportunity in July, 1930, of applying for appointment to the Commonwealth Public Service, and they were informed that, in the event of their not electing to so apply, they would either be “ retrenched “ or “ discharged “, according to circumstances, and their services in the permanent military forces terminated on the 30th June, 1931. As a result, seven of them applied for appointment to the Commonwealth Public Service. Of these one was appointed to the Public Service in October, 1930, and three others are no longer applicants therefor as they have been, or are being, appointed to the British Army or Royal Air Force. It has been evident from correspondence with the Commonwealth Public Service Board that, in view of the reduced activities in the various departments, due to re-organization and the general financial position, and the number of permanent civilian officers in excess of requirements who have to be absorbed before further appointments to the Public Service could be considered, it would be very doubtful whether any of the three remaining officers would receive an appointment to the Commonwealth Public Service before the 30th June, 1931. The question of the retrenchment of the officers concerned was reviewed in April, 1931, in the light of existing circumstances, and it was decided on the recommendation of the Military Board that, failing their appointment to the Commonwealth Public Service by the 30th June, 1931, they would either be “ retrenched “ or “ discharged “ from the permanent military forces not later than that date, as being surplus to military requirements. The three officers concerned were informed accordingly.

page 2876

QUESTION

INVALID PENSIONS

Mr THEODORE:
ALP

– On the 19th June the honorable member for Melbourne (Dr. Maloney) asked the following questions, upon notice -

  1. How many invalid pension cases have been sent to the Commonwealth Health Department, Melbourne (a) on review; (b) 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”?

The answers are as follows : - .

  1. (a)658; (b) 25.

page 2876

COMMONWEALTH BANK BILL

(No. 3).

Assent reported.

page 2876

NORTHERN TERRITORY (ADMINISTRATION) BILL (No. 2.)

Bill returned from the Senate with an amendment.

In committee (Consideration of Senate’s amendment).

Senate’s amendment - After clause 4 insert the following new clause: -

Mr BLAKELEY:
Minister for Home Affairs · Darling

– I move -

That the amendment be agreed to.

Section 18 of the Northern Territory (Administration) Act 1910-31, provides that all Supreme Courts of Central and North Australia shall be abolished, and that the Supreme Court for both centres shall be re-established at Port Darwin. These amendments are inserted to elucidate certain matters that were not quite clear.

Mr Riordan:

– Will the alteration make the administration of the act more costly?

Mr BLAKELEY:

– No. As a matter of fact the Supreme Court functioned only once at Alice Springs. For the reason that we are reverting to conditions in the Territory as they existed in precommission days, and before the origination of the boundary between North and Central Australia, the Supreme Court of the Northern Territory is being reestablished.

Motion agreed to.

Resolution reported; report adopted.

page 2877

PAPERS

The following papers were presented : -

Conciliation and Arbitration Act - Rules of Court amended - Statutory Rules1931, No. 71.

Lands Acquisition Act - Regulations amended - Statutory Rules 1931, No. 62.

Northern Australia Act -

Central Australia - Ordinance of 1931 - No. 5 - Income Tax.

Northern Australia - Ordinance of 1931 - No. 8 - Income Tax.

Northern Territory Acceptance Act and Northern Territory (Administration) Act - Ordinances of 1931 -

No. 1 - Encouragement of Primary Production.

No. 2 - Crown Lands.

No. 3 - Interpretation.

Post and Telegraph Act - Regulations amended - Statutory Rules 1931, Nos. 61, 70.

Sales Tax Assessment Acts (Nos. 1 to 9) -

Regulations amended - Statutory Rules 1931, No.63.

page 2877

DEBT CONVERSION AGREEMENT BILL

Second Reading

Debate resumed from the 19th June (vide page 2861), on motion by Mr. Scullin -

That the bill be now read a second time.

Mr BRENNAN:
Attorn eyGeneral · Batman · ALP

– To refresh the minds of honorable members, I remind them that the important clause in this agreement is No. 2, which reads -

  1. The Commonwealth is authorized to arrange and effect a conversion, on the basis of a twenty-two and a half 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.

When speaking on this bill on Friday I was at some little pains to point out that the subject-matter of the agreement was embodied in a series of resolutions drawn up by statesmen, rather than by lawyers. I also pointed out, in reply to the Deputy Leader of the Opposition (Mr. Latham.) that those resolutions being the basis or foundation of this agreement, are themselves not subject to alterations; that they are really recited more as a preamble to the material matter of this agreement, than as embodying such details as would be agreed upon by experts charged with the task of draftsmanship. The Deputy Leader of the Opposition, for example, refers to the phrase in clause 2, which reads -

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.

The comparatively wide powers recited there as being given to the Loan Council are not at all unprecedented, as the honorable gentleman will find by reference to the financial agreement and relative matters. Really, the whole thing rests upon the final clause that -

The Commonwealth will take the necessary action to submit to the Federal Parliament any legislation necessary to carry out or give effect to this agreement.

When that legislation comes down, it will be subject to discussion, and close scrutiny. The proposals will be embodied in bills drawn by experts, and these will have to stand the test of examination. There will be determined, among other things, the measure of power that will be exercised by the Loan Council or the Chairman of the Loan Council, or by any other person or body to whom authority is delegated. It is in this regard that I thought that the observation of the honorable member for Corangamite (Mr. Crouch), when he spoke of the loose or imperfect draftsmanship of the agreement was a little ill-considered. The honorable member spoke as a lawyer, and his remarks inferentially reflect upon the officers responsible for the drafting of measures coming into this chamber. Actually officials of the Crown Law Department had but little to do with the drafting of this agreement.

Inasmuch as it is the general desire - certainly it is, so far as the Government is concerned - to proceed with all expedition with the passage of the measures necessary to give effect to this historic agreement, I do not propose, for reasons that I have mentioned, to go further into detail with regard to a number of matters discussed with great acumen by the Deputy Leader of the Opposition, which are more fit for the attention of lawyers than of politicians. Further, they will have to be reconsidered by the bankers, financiers, and bondholders who are immediately concerned in that particular part of the Government’s plan, just as in due course we have arranged that other details of the plan, such as soldiers’ pensions, wages conditions, old-age pensions and other related matters, will be considered further by those primarily concerned. The wisdom of this course has been demonstrated by the fact that since this agreement was arrived at representations have poured in on us from all sides. Naturally enough, many of these representations take the form of declarations of protest, which have come impartially from all sources. All classes of the community are vitally affected by this far-reaching plan, and, as all arcentitled to make their representations, it is inevitable that all of them will do so. The Deputy Leader of the Opposition (Mr. Latham) suggested that in regard to particular technical matters in which he is especially interested, we should call in aid equity lawyers of standing to co-operate with the officers of the Crown Law Department. That suggestion appeals to my department. In cases of this kind we have never neglected to consider the advice of those who may be, in a certain sense, regarded as specialists in their own class of work. The same practice will be followed in this instance.

I Strongly urge that, in the consideration of this scheme, honorable members should afford the Government their wholehearted assistance in an endeavour to get the best that can be got out of it. We are entitled to hope, not that every honorable member will agree to the proposal, even in broad outline, much less in detail, but that every honorable member who disagrees in principle with the proposals will endeavour honestly to show what alternatives can be submitted in their stead.

I heard only a very small part of the speech delivered by the honorable member for Werriwa (Mr. Lazzarini), but during the week-end I took the trouble to read the whole of his speech. I was surprised, and I admit, not a little pained, to find that an honorable member who brings to bear a considerable amount of knowledge on questions of finance, should, at this moment of intense crisis in the history of Australia, have delivered a speech, over an hour in duration, which consisted of nothing but sustained abusiveness.

Mr Lazzarini:

– That is not true.

Mr Hughes:

– Unrestrained abusiveness.

Mr BRENNAN:

– I might have said unrestrained. Not even a scintilla of a suggestion could be drawn from the honorable member’s speech. It is true that on other occasions the honorable member for Werriwa has ‘ delivered addresses in this chamber which have afforded evidence of considerable reading and research. The conclusions to which he came were not always so evident to me as apparently they were to him, and many of the views he expressed have, in the rapid movement of history, become more or less out of date. But the fact remains that, in regard to these proposals, concerning which we are entitled to look to the honorable member for a little helpful criticism, he gave us no help whatever. He showed no evidence of having a constructive opinion of his own, but thought it right, apparently, that he should devote himself to what I have described as unrestrained abuse of the party which he was elected to serve, and which, in the exercise of his discretion, he saw fit to leave. The honorable member said of me that I had countered certain of the opinions expressed by the present Treasurer (Mr. Theodore), and that I now followed the Treasurer; and, further, that I had expressed sympathy with the views of the honorable member for Werriwa himself, and had now recanted them. The truth is that I am glad to follow any one who is able to shed light upon a subject, and has knowledge of it greater than I pretend to possess myself. If the honorable member forWerriwa bad been Treasurer in a Labour government, instead of a disgruntled member of the defection is t wing of the party supporting the Government, it is quite possible that I should have been glad and proud to follow him. There are represented in this Parliament at least two schools of thought on matters of finance.

Mr Stewart:

– I wish there were only two !

Mr BRENNAN:

– -There are two main schools: the one led by the Leader of the Opposition (Mr. Lyons), who declares that he knows nothing about finance; and the other, the school led by the honorable member for Werriwa, who declares that he knows everything about finance. I am in an. intermediate position. I know only a little about finance, and am not too proud to follow those who, I feel, know more about the subject than I do myself.

One thing should be borne in mind by every supporter of the Australian Labour Party, namely, that that this agreement - this plan - does not represent by any means, at least in all its details, the policy of the Labour party. It represents many things with which Labour most wholeheartedly disagrees. It proposes to give effect to a policy which is repugnant to the present Government, and, therefore, affords a strong reason why every member of the Labour party, who is charged with defending the principles which are cherished by the party, should join with the Government in seeing how far, and in what way, the encroachment upon wages, conditions of employment, and pensions can be resisted. It is in that direction that we ask for help, and if possible, inspiration, which up to the present we have not received from those from whom we have the right to look for help. In speaking upon this subject at Geelong, I said that the proposed reductions in invalid and old-age and war pensions must be deplored by every supporter of the Labour party, and somebody interjected, “ Disgraceful “. I added, and I say here, that from a certain point of view it is disgraceful to the country as a whole, and constitutes a discreditable reflection upon the government of this country over the last ten years, that we should now find ourselves in circumstances which leave us with no ascertainable alternative between sanctioning certain reductions in the earnings of those whom we are pledged to support, and imposing conditions which would be infinitely worse than those involved in this agreement.

As I believe that no honorable member wishes, as a matter of policy, for pensions to be reduced, I appeal to all sections of the House to support a policy under which the blow will be most lightly felt. I appeal especially to my friends in the corner to join with us in defending wages, conditions of labour; and the payment of pensions, and to realize that, after all, the applause of the uninformed is a kind of reward. To play up to those who are made to believe that’ this Government is departing in some way from its cherished principles, is a poor way to score off men whom they were returned to support in this Parliament.

Mr Yates:

– Who is playing up to that kind of thing? The AttorneyGeneral has never listened to an alternative scheme.

Mr BRENNAN:

– The honorable member for Werriwa (Mr. Lazzarini) has not submitted a single constructive idea, but has assailed every member of this Government, whom he has charged with being recreant to his trust, and unworthy of his position. I am not addressing my remarks to the honorable member for Adelaide, or to any other member of the Labour party, who, in these deliberations, accepts responsibility for its decision. But I say that those who for the moment think otherwise, should try to realize that while the Labour Government is in power, it is incumbent upon them not to advocate that we should pull down the flag or desert the standard; while we are here we should endeavour to protect the interests of those whom we represent. I do not desire to say anything to ruffle the feelings of my honorable friends, who have been so critical of the Government, but it seems desirable that a few home truths should be uttered to those who find themselves out of step with the majority of the members of the Labour party, and seek to justify their action by violent attacks upon their ex-colleagues. A more appropriate time to deal in detail with the proposals will be when the measures covering them are submitted for our consideration. I trust that this bill will be accepted by the House, and that it will be readily passed through all stages in order that we may get to grips with the measures which will be prepared at the earliest possible date, to enable the Government to give effect to what I have described as a monumental agreement, and a great achievement in most difficult circumstances on the part of the present Government, and especially of the Prime Minister (Mr. Scullin), and the Treasurer (Mr. Theodore).

Mr STEWART:
Wimmera

.- I regret that at the conference of Commonwealth and State Ministers, recently held in Melbourne, where the proposals which we are now discussing were framed, the Country party did not receive an invitation similar to that issued to other parties in opposition. That conference was attended by the Leader of the Opposition (Mr. Lyons), the Deputy Leader of the Opposition (Mr. Latham), and the Leader of the Opposition in another place (Senator Pearce).. I do not suggest for a moment that the members of the Country party are the sole representatives in this chamber of the primary producers; but. they represent a very large section of the primary producers, and every member of that party represents a rural constituency. The Country party is recognized in this chamber as a separate party, and meets in a separate room. Seeing that these proposals were framed on a nonparty basis, and that invitations were allegedly issued in a non-party spirit, it would have been, if not a gracious, at least a sensible, act on the part of the right honorable the Prime Minister to extend an invitation to a representative of the Country party to attend the conference.

This is the first opportunity that I, as a member of that party, have had to express my views on the decisions reached at that gathering. The Attorney-General (Mr. Brennan) referred to the monumental and far-reaching nature of these proposals. None will debate that contention; its soundness is recognized by all. One might go further and say that they are almost desperate in their far-reaching character. This is really a venture into uncharted seas, and the result of the legislative proposals which are now to be submitted is, to say the least, obscure. It is not my intention lightly to make use of strong terms; but this is a time when we should at least speak what is in our minds. The proposal to convert the whole of the public debt cf , Australia on the basis provided for in this agreement, in. my opinion and put plainly, is repudiation of the financial commitments of the nation, allegedly under the stress of national necessity. As an illustration of what I mean, I refer to the circumstances attending the flotation of the last loan, known as the £28,000,000 conversion loan, to which the people of Australia were asked to subscribe, and to which they did subscribe to the extent of no less a sum than £30,000,000. The circumstances under which that appeal was made six months ago must still be fresh in the minds of every honorable member, and certainly in the minds of the people of Australia, particularly those who subscribed to the loan. The basis of the appeal was, not that it was a business proposition, not that attractive rates of interest were offered, but that pure patriotism should be the guiding motive in order that Australia might preserve her honour by discharging her obligations. This agreement completely alters the basis of that arrangement entered into so recently.

Mr Brennan:

– But the recency of the arrangement does not affect the matter; the same argument would apply in the case of every other proposed alteration of interest rates.

Mr STEWART:

– That is true. The reason I refer to that loan is that the circumstances and the atmosphere in which it was launched were somewhat different from those of other loans that have been floated. The question that we have to ask ourselves is, if the Government issues a prospectus for a loan, appeals to the people on the ground of patriotism to subscribe to it, enters into a solemn obligation, and within six months proposes deliberately to alter the terms of the agreement entered into, what is to be the effect upon all future loans, and what will be the value of any prospectus that may be issued ?

Mr Theodore:

– The honorable member should not overlook the fact that all these points were considered by the Premiers Conference.

Mr STEWART:

– I am aware of that. I followed with very deep interest the deliberations of that conference. But that does not debar me from expressing in this chamber the views that I hold upon thu matter. We are told that what is needed above all things is a restoration of public confidence. What more deadly blow to confidence could wo strike than this virtual repudiation of obligations that have been solemnly entered into?

Mr Beasley:

– It is not called repudiation now !

Mr STEWART:

– It is allegedly justified by stern necessity. We as a nation are not alone in our financial difficulties. The cables of the last few days show that the real reason why we are not able to meet our obligations is the fall that has taken place in world prices generally, but particularly with respect to our two great staple commodities, wool and wheat. Had the recent wheat crop been disposed of at 4s. instead of 2s. a bushel, had our wool clip brought ls .instead of 8d. per lb., the effect upon our public revenues would have been such that we should not be discussing the proposals that we have before us to-day. The difficulties with which we are confronted are not due to any inherent viciousness in our people. It is true that we have had, in a comparatively minor degree, extravagance, over-spending and the like, but not to any greater extent than has been the case in the majority of other countries. The point that I wish to make is, that the fall which has taken place in world prices has affected our revenues and those of every other country in the world to such an extent that it is generally recognized - and the conviction is growing stronger every day - that there must be a return to normal and stable prices throughout the world.

Mr Coleman:

– That connotes reduced interest rates.

Mr STEWART:

– Undoubtedly ; but not compulsorily reduced interest rates. Those rates will, I think, automatically come down.

Mr Theodore:

– The honorable member must not forget that some of these loans still have 30 years to run.

Mr STEWART:

– I recognize that; but others have much less than 30 years to run, and the average term of the whole of them is not by any means 30 years. I am not arguing against the desirability or the necessity of reducing interest rates. I realize that one of the greatest burdens upon primary industry to-day is the heavy interest bill. But this is a plan that covers a period of 25 or 30 years. Is it wise for us to attempt to lay down a plan or to steer a course over such a lengthy period, simply because of what may prove to be, and what I hope will be, merely a temporary slump in world prices. Obviously, we cannot discharge either our overseas or our local indebtedness under present conditions. The cables of the last day or two indicate quite clearly that the financial stability of the whole world has been severely shaken. It is, I suggest, a case in which it would be better for us to say to our creditors, and to those from whom we have borrowed money, “ We cannot pay at the moment ; but we call, .and we will, pay in the future “. Default would be preferable to repudiation. We could go to our creditors with our heads up and say, “ We are not responsible for the economic circumstances which have placed us in this position. We are not blaming anybody, or any nation, but we do say that we are the victims of world-wide conditions. We will pay, but we want time “. It would bc far better for the people of Australia to be reduced to loin cloth and rice, and still pay their way, than to accept this plan that is a camouflaged repudiation proposal. Call it what we like, it amounts to repudiation and nothing else.

The decisions of the Melbourne conference savour of panic, yet this is an occasion when we should keep our heads. The Prime Minister plainly said that this was a complete plan ; but, in my opinion, there are very important omissions. All sections, allegedly, are called on to make sacrifices - ex-soldiers, old-age pensioners, workers - but what about the manufacturers who, under the tariff, are protected a gainst overseas competition? What sacrifices are they making under this plan ? With the prices of our primary products, such as wool, wheat and coal, failing; with wages and pensions down; with rationing everywhere and with interest reduced, the tariff is going up. What does the Prime Minister intend to do regarding the manufacturers? Since incomes arc to be ruthlessly reduced under the measure before the House, it is necessary that the prices of commodities should be similarly reduced, otherwise, the advantages will be more apparent than real.

How does the Prime Minister propose to deal with those secondary industries which refuse to reduce their prices? Will he appeal to the patriotism of the manufacturers?

Mr Gabb:

– The primage duty is to be increased.

Mr STEWART:

– Yes. Under the present proposal, the manufacturers will receive even further protection. Some of them are deliberately rigging prices and exploiting the people. To give a specific case, I may mention the manufacturers of galvanized iron. After careful inquiry into the conditions in this industry the Tariff Board declared that galvanized iron should be sold in Australia at £25 per ton, less the usual trade discount; yet the present price of the commodity is in round figures, £30 per ton. There is to be sacrifice on the part of everybody except the manufacturers. Through the whole gamut of Australian industries - from the huge iron and steel works to the individual who makes Bates’ salve in an Adelaide back yard - all the manufacturers are to be exempt from sacrifice under this proposal, and yet it is put forward as a complete plan !

To-day, the primary producers are bearing the burden of helping to reduce our overseas indebtedness. The Prime Minister said that they were receiving the benefit of the high exchange rate, as though they were getting some advantage for which they ought to be devoutly thankful. Why do not the manufacturers of matches in the Prime Minister’s constituency export their goods to the markets of the world, and compete against all comers, as the Australian wheat and wool-growers have to do? Those manufacturers could then get the benefit of the exchange.

Mr Bell:

– They are not satisfied even with their present protection.

Mr STEWART:

– Of course not. 1 think that I have shown one of the great weaknesses of this measure. I am accepting the Government’s invitation to those who criticize the plan to suggest alternatives. The proposals before the House merely dally with the position. Even if the estimated revenue were realized by the Federal and State Governments - I claim that they are unduly optimistic unless there is to be a sudden revival in world’s prices of primary produce - there would still be a shortage next year of between £14,000,000 and £15,000,000.

No attempt has been made under this plan to reduce the huge overhead cost of government in Australia. We have been reminded ad nauseam of the spectacle of this country, with a population of a little over 6,000,000, having seven Parliaments, and, with one exception, doublechambered legislatures. There are halfadozen State Governors, with all the pomp and paraphernalia attaching to those positions. There is also the tremendous over-lapping of the Federal and State judiciaries. The duplication of the activities of various Government departments with the corollary of a huge army of public servants, is too well known to make it necessary for me to refer to it in detail. There is nothing in this plan to remedy that weakness.

Mr Prowse:

– Do away with federation !

Mr Stewart:

– I suggest for the consideration of the House and the Government that the life of this Parliament be extended for three years.

Mr Coleman:

– The Constitution limits it to three years.

Mr STEWART:

– It. is true that that could not be done under the Constitution ; but it is possible to urge the British Parliament to declare a state of national emergency, and extend the life of this Parliament for a further three years. That appeal might be determined upon by a decision of both Houses of this Parliament, supported, possibly, by each of the State legislatures.

Mr Bell:

– That would not help.

Mr Mackay:

– Does the honorable member suggest that the life of the several State Parliaments should also be extended ?

Mr STEWART:

– I have not considered doing that. My proposal is that the life of the Federal Parliament should be extended for a further three years.

Mr Gregory:

– It would be better to wipe out the Federal Parliament.

Mr STEWART:

– The ideas of the honorable member for Swan (Mr. Gregory) do not come within the bounds of practical politics.

Mr Coleman:

– What does the honorable gentleman mean by a state of national emergency?

Mr STEWART:

– We cannot pay our debts, and therefore we cannot continue as we are going. We must make a reconstruction. To that end I suggest, first, that the life of this Parliament should be extended for a period of three years; secondly, that we elect a non-party executive, representative of all sections of Parliament, to carry out a three-year plan; and, thirdly, that we call a federal convention to consider what amendments of the Constitution are necessary to carry out such plan.

Mr Morgan:

– That was recommended by the Royal Commission on the Constitution.

Mr STEWART:

– In support of my proposals, I point out that the Premiers Conference has accepted t’he principle of the abandonment of party politics in this time of national stress. Nevertheless, we have on the front ministerial bench an executive which is the creation of a party. I submit that that executive is not a fit body to carry out a non-party plan. The natural corollary of the Government’s abandonment of its party platform, is its resignation, with a view to making way for the appointment of a non-party executive to carry out the nonparty programme which is to be submitted to Parliament.

Mr Gabb:

– There is no chance of effect being given to the honorable member’s proposal.

Mr STEWART:

– It is the only way to restore the confidence of the people. The Prime Minister (Mr. Scullin) has stated publicly that the proposals of the

Premiers Conference were stoutly resisted by the Executive. For over a year, like Horatius of old, the Executive resisted these suggestions, but at last it has been forced to accept them.

Mr Lewis:

– Not all of them.

Mr STEWART:

– Although the Prime Minister intended his impassioned declaration, that the Government had stoutly resisted these proposals, to havea certain effect in trade union circles, it is likely to have a vastly different effect in other quarters. Before long Parliament will rise, and the administration of whatever measures are passed by Parliament will be in the hands of the Executive. It is hardly conducive to public confidence that that Executive has stoutly resisted the proposals which it will hecalled upon to put into operation.

I admit that my proposals present difficulties; but they are not insurmountable. On the assumption that there will be an election for members of this chamber at the same time that there is an election for members of another place, we may expect that there will be an appeal to the people within a year. Upon what basis will that appeal be made? I am aware that the proposals which have emanated from the Premiers Conference have their opponents among members on both sides of the Chamber ; but, generally, they have been accepted with more or less enthusiasm by both sides of the House. Those proposals now form the policy of the Government. But what policy will it place before the electors when the next appeal to them is made ? Will the Government ask the people to support the plan of the Premiers Conference, or will it appeal to them to rescue it from the thraldom of that plan, and from decisions which have been forced on it by the stress of circumstances, and the votes of the State Premiers?

Mr Curtin:

– The Government will seek a mandate to reverse the plan byasking to be returned with a majority in both Houses.

Mr STEWART:

– It is difficult to say what the Government will do, particularly when we reflect that the Prime Minister said emphatically that he would not do the things that he is now doing.

Mr Gabb:

– The honorable member can rest assured that the Government will appeal to the people on a fiduciary note issue.

Mr STEWART:

– And what policy will the Opposition place before the electors? Will it condemn the Government for having put into effect what the Opposition claims to be its own policy; or will it extol the Government for having accepted such proposals. In such circumstances what kind of a decision can we expect the people to give? The present economic depression will not have passed before the election takes place. The legislative proposals of the Government, which are aimed at restoring confidence and rehabilitating trade and industry, will not accomplish their purpose. Will it tend immediately to improve trade to make drastic cuts in the salaries of public servants, to reduce’ expenditure by many millions of pounds in. other directions, to sack thousands of persons in the Public Service, and in public and semi-public bodies?

Mr Nairn:

– That is what the honorable member himself suggested.

Mr STEWART:

– The statement of the honorable member for Perth (Mr. Nairn) is not in accordance with fact. The honorable member smiles in a superior sort of way as though intellectuality exuded from him. If - he would rise in his place and make some constructive remarks - something that he has not yet done in this chamber - the House would welcome the change. I repeat that a policy of all-round reduction of government expenditure is not likely to improve trade conditions. We are at the mercy of world’s prices. Honorable members talk about easy money, and of the necessity for the banks to release credits; but what would be the use of releasing credits, so far as the wheatgrowing industry is concerned, when it is costing £150 to grow £100 worth of wheat? If a banker offered to lend me £1,000 free of interest to be expended upon wheat-growing, I would not be prepared to accept the money. What is the use of honorable members talking about easy money and a revival of trade and industry ? In what industry is the money to be invested? If the banks released £20,000,000, that would perhaps be of use in meeting some of our debts, but it is idle for us to talk of releasing money to invest in wheat or wool-growing; or in secondary industries, when our warehouses are choked with goods which the people cannot afford to buy. The rehabilitation of industry can never take place under this plan. An appeal to the people under present circumstances would be a mistake. If an appeal were made either now or within three or six months, the people would not be in a position to give an intelligent decision on the issues of the day. To plunge this country into political turmoil at this stage would be to commit a crime against the people. For that reason I suggest that honorable members on both sides of the House should get together and examine the position. I have suggested the abandonment of party strife, the election of a nonparty executive, and, the extension, if such be possible, by an appeal to the Imperial Government, of the life of this Parliament, including another place, for a period of three years. I put those suggestions forward for the earnest consideration of this House and the country generally.

Mr CUSACK:
Monaro · Eden

– The proposals of the Government are of immense importance, and the honorable member for Wimmera (Mr. Stewart) has appealed to honorable members to deal with them in a non-party spirit. I imagine, from my knowledge of the political history of Australia, that the debate now taking place in this House has assumed a non-party complexion without precedent in this chamber. I know of no other instance in which the Government has conferred with State Premiers holding various political views, with the Leaders of the Opposition in this House and the Senate, in order to formulate a plan by which Australia may solve its financial problems. It speaks well for the future of this country when its public men are able to sink their party differences and to confer together in an effort to meet a financial crisis. The time is not far distant when nearly all parties in this House will have forgotten the hatred and rancour that they have previously shown to one another. At a time of national crisis all. parties have combined in an effort to place Australia once more on the road to prosperity.

Mr White:

– The lion of Wilmot and the merino of Eden-Monaro are once more lying down together.

Mr CUSACK:

– And with them are the “ spare parts “ of this House, of which I believe the honorable member for Angas (Mr. Gabb) is one. ‘ I am not bothering myself about his opinion of the Government’s proposals. He is opposed to everything. When he was a member of the Labour party, he could not see eye to eye with any other member. He is a lone wolf, and I do not expect him to support the ulan which the Government has submitted to the House. I was surprised at the remarks of the honorable member for Melbourne (Dr. Maloney). He has suggested the scrapping of Canberra. He looks upon the Federal Capital as a running ulcer, or an excrescence that should be removed from the body politic. I have no doubt that he would like to graft Canberra on to the electorate of Melbourne. I am not in agreement with the honorable member for Melbourne. If this Parliament sat in Melbourne there would be too much opportunity for party strife. In a quiet atmosphere, such as that of Canberra, honorable members are more inclined to sink party differences and to rise to heights of statesmanship. The honorable member for Wimmera (Mr. Stewart) suggested an extension of the life of this Parliament, but that would be no remedy for the ills that we are now suffering. Something has to be done, and quickly too, if Australia is not to become bankrupt, and the plan that has been submitted to the House, marks another milestone passed on the road to recovery. It will be a stupendous achievement if the proposal to convert over £550,000,000 worth of bonds at 4 per cent, becomes an accomplished fact. At the same time, we must realize that the purchasing power of the people has been seriously curtailed. In many instances, the holders of government bonds are poor persons, including widows, who depend for their livelihood upon the £100 or £150 that they receive annually by way of interest. When the rate of interest is reduced, the purchasing power of those persons will be considerably reduced, an- that will be a bad thing for the country. I am strongly in favour of maintaining a high standard of living. I look upon that as essential. Low wages do I101 benefit a country, particularly one like Australia. If low wages are of advantage, why are not the Chinese a great nation? The greatest countries are those in which high wages are paid, and they would be paid in Australia if effect could be given to the policy of the Labour party. We must realize, however, that it cannot be put into operation under existing conditions. The fact that an obsolete branch of this legislature, reflecting public opinion of five or six years ago, is able to interfere with the policy of a Government recently elected by the people shows that our Constitution is seriously defective. [Quorum formed.]

In supporting the Government’s plan for financial adjustment, I regret that it necessitates interference with the pension of those heroes who fought for the safety and independence of Australia. At the same time, I recognize that the system of war pensions presents anomalies. Pensions are based on the injury suffered by the individual rather than on his financial position. I heard of one soldier who applied for a pension, and, after a big fight, was granted it; he accepted £1 of the first payment and framed it as a souvenir to be handed down to his posterity, but thereafter refused to draw the pension. Thereby he showed his patriotism. There are others in good financial circumstances who could afford to forgo their pensions. I know of a wealthy landholder in my constituency who never went to the front, and because he contracted a cold in camp, draws a pension of thirty shillings a week. Plenty of other soldiers, in poorer circumstances and with families to maintain, are not drawing so much from the Repatriation Department, although possibly their deserts are much greater. Anomalies of this sort should be removed. The pensions paid to those who have been maimed or whose health has suffered should be regarded as sacrosanct, and so far as I know, the plan which the Government has adopted does not propose to take from them anything to which they are now entitled.

Some speakers have laid stress on the burden of Australia’s overseas debt, and I am in agreement with those honorable members who have said that we should not go again upon the foreign money market if we can avoid it. By borrowing from our own people we, have greater control of our indebtedness; in the hour of crisis we can ask the lenders to share with their fellow citizens the burden of sacrifice. The patriotism of those bondholders who are converting their stocks at the request of the Government reveals the spirit of the true Australian. We probably shall be unable to get a reduction of the interest on the overseas portion of the national debt. The nation must meet its obligations. There is, however, a ripple on the financial ocean, indicating a wind that may blow good to Australia. President Hoover has made certain suggestions for the postponement of international debt payments, and there is a possibility that some relief may be afforded to Australia. We must remember, however, that our debt to the United Kingdom is on a basis different from that of the debts of European countries to the United States of America. A great flutter in the political dovecote was caused by the Lang plan for a compulsory reduction of the interest due on our overseas debt. Mr. Lang claimed that Australia’s overseas debt should be funded in the same way as the debt of the United Kingdom to the United States of America. There is, however, no analogy between the two. During the war America supplied the United Kingdom with munitions and commodities at prices 200 and 300 per cent, above normal. When negotiating the funding of the debt Great Britain’s serious adverse trade balance with the United States of America was taken into account. If America had consented to cancel the whole of the debt, it would not have been acting with undue generosity, because the debts were incurred by methods of exploitation and used for the defence of civilization and the liberty of nations. When Australia contracted its debt it went on the market in the ordinary way, and borrowed on prospectuses which promised to the subscriber a definite rate of interest. Australia accepted a contractual obligation, any variation of which can legitimately be obtained only by the consent of the bondholders. Failing such an arrangement, our bounden duty is to pay what we owe.

I have been disappointed with some of the speeches made on this bill. Members of the Beasley breakaway branch of the Labour party have indulged in captious criticism of the Government which has shocked me. First they declared that the scheme now before the House is the Lang plan; next they said it is Mr. Lyons’s plan. I am concerned only with the merits of the proposals and not. with the authorship of it. To my mind it offers to the Commonwealth a via media in its present difficulties.

Mr Lacey:

– Like the curate’s egg, it is good in parts.

Mr CUSACK:

– We have certain difficulties to solve in a very short time, and the plan now before us represents a very fair compromise. The conversion of £500,000,000 of internal debt at a maximum rate of interest of 4 per cent, will be a great relief to the taxpayer, and the proposal of the banks to make credits available-

Mr Lacey:

– We have no assurance of that.

Mr CUSACK:

– Unless that is done this Parliament will have been misled. If the banks do not play their part, no legislative chamber will have the courage further to block the proposals of the Government for the issue of a fiduciary currency, and the use of the gold reserves for the relief of our debts overseas. The acceptance by this Parliament of the Government’s proposal to remit £5,000,000 worth of gold to London is the thin end of the wedge, and I am convinced that if the exigencies of a nation demand further shipments of gold, those who have opposed that policy in the past will do so no longer. Some day the opponents of the Labour party will awaken to the fact that gold is of no benefit to a nation. About 15,000 tons of gold, probably half the total in the world, is in the possession of the United States of America to-day, and yet that country is- experiencing acute industrial and economic distress. If all that gold were in Australia, and we had not sound government and an equitable distribution of wealth, the distress of our people would be no less than it is to-day. Our main aim should be to make available to industry the money that is in Australia. Why is business stagnant and public undertakings at a stand-still? A little time ago farmers were building bornes for themselves, country towns were being extended, and all businesses were active. That was due, not to the circulation of gold, but to a sufficiency of currency and credits. In my own town of Yass there is not an empty house, though probably quite a lot of the tenants are not paying any rent, but there is plenty of room for more building. The people who are living in tents, and those who are travelling the roads, should have houses. The system which was in operation many years ago, when Denison Miller was Governor of the Commonwealth Bank, was a good one. Under his regime the Labour policy was carried out, and money was lent to men to enable them to build their own homes, [f a man had £100 he could get an advance to build a £900 house, and in the construction of it he could employ seven or eight men. The money that built those bornes is still here, and the men are still here, but no credit is obtainable.

This plan is not in accordance with Labour’s policy, but I realize that it is of no use attempting to carry out our policy, because we are blocked by another place. Speaking on this subject the other night, the honorable member for Werriwa (Mr. Lazzarini) proved himself to be a great stickler for upholding Labour’s policy. We should fight for that policy, he said, and so far I agree with him; but if there is no hope of carrying that policy into effect there is no use in butting our heads against a locked door, like an imbecile ostrich that imagines itself to be a goat. The door has been firmly closed against us by another place, and we must now choose between the two evils which confront us. If the honorable member for Werriwa were asked to choose whether he would be a giraffe with a sore neck or a centipede with chilblains, he would, I have no doubt, choose the lesser evil.

Mr Lacey:

– What would his choice be?

Mr CUSACK:

– He would be a centipede. We have definite obligations to meet at the end of this month, and if we do not meet them something very serious will happen. The class whose interests we specially represent, and for whose welfare we profess to be so solicitous, would be especially endangered. As one who has studied politics, I believe that the situation is such that we must compromise. I am prepared to support the Government, because I realize that this plan represents an honest attempt to do what it believes must be done. I am not one of those who believe that politicians belonging to parties other than our own are not prepared to do anything for the benefit of Australia ; men are not thinking of party interests all the time. I believe that all honorable members who support- this plan are actuated by a desire to serve their country, and if certain proposals are agreed to, they will do their best to carry them out. Moreover, I think that even the most reactionary of them are beginning to realize that the policy they have so consistently advocated has, in its operation, proved harmful to their own class. Some of them, perhaps, are even a little sorry that the Labour Government was not allowed to put into operation more of the policy upon which it was elected in October, 1929. The class which they represent is suffering as the workers are suffering. Many who were wealthy men only a little while ago are now in a very serious plight. They are gradually coming round, and displaying a disposition to adopt the Labour policy. They have agreed to our proposals for shipping gold overseas to meet out liabilities, and to our plan for reducing interest. They have been compelled to accept those two instalments of our policy, because they realize that Australia demands that even they must support those necessary measures.

Mr Riordan:

– We are adopting a bit of their policy, too.

Mr CUSACK:

– We are, I am sorry to say. If, as a result of the operation of this plan, we are able to have £2,000,000 or £3,000,000 more spent in wages, it will compensate, to some extent, for the abandonment of part of our policy. It appears unavoidable that we must compromise. The Labour Government has been in office for over eighteen months, but so far it has not been able to carry out its policy. Are we to be so blind as not to realize that in the present circumstances that policy cannot be carried out? I believe this plan will, if put into operation, revive industry and improve our financial position, it will effect an allround lowering of costs and prices.

Mr Riordan:

– The honorable member is very optimistic.

Mr CUSACK:

– I am optimistic, because I recognize that in the plan there are, at least, two instalments of the Labour party’s policy. This scheme will educate the public to recognize the desirability of going the whole hog later on.

The public has had placed before it what has become known as the Lang plan. The members of the Beasley breakaway branch of the Labour party have put forward that plan as a substitute for the one we have now before us. The plan appeals to many persons who are out of work when it is put forward as a panacea for their troubles, but I do not believe that it will do them any good. The main thing about it, however, is that it has a strong appeal for people in that situation, and it is used as a means of snaring votes in easy Labour electorates.

Mr Lacey:

– That is why they are after the honorable member’s.

Mr CUSACK:

– They are not after mine. I will resign my seat for Mr. Lang and he can contest it on the merits of his plan. I make the same offer to the honorable member for Werriwa. Let him try, if he can, to win Eden-Monaro. He was very free in his criticism of the Ministry and its supporters the other night and he twitted them for drawing their allowances, but his chief aim appears to be to make himself doubly secure in an electorate in which any one could win, so that he will not jeopardize his parliamentary pay. There does not seem to be much fight in him when he is challenged to contest a more difficult seat. So long as he can draw his parliamentary allowance, he will not run the risk of contesting the Eden-Monaro electorate. The Lang plan is supposed to be so successful that New South Wales has been put on her feet again. The supporters of the plan are peregrinating beyond the borders of New South Wales, and visiting other States, presumably implying that they are looking for other financially embarrassed1 worlds to conquer.

Mr Crouch:

– And to smash otherbanks.

Mr CUSACK:

– Yes, and to smash other banks. They have complained, because they have been denied the right of free speech in other States - because they have not been allowed to speak in public halls. There seems to me, however, to be very little free speech associated with, the Lang policy. The Prime Minister himself was not allowed to speak on the Labour platform in Sydney in support of the Federal Labour policy. What happened on Good Friday, of 1931? I wastold that when Lang and Jock Garden were in Brisbane, addressing meetings there, the people were able to identify those two celebrities-

Mr Lacey:

– Has not Lang adopted this plan which we are now discussing?

Mr CUSACK:

– I believe he has, but I am now speaking of the alternative to the present scheme.

Mr Lacey:

– What becomes of the Lang plan now that he has adopted this one?

Mr CUSACK:

– That is the strange part of it ; I do not know. As I was saying, the two celebrities from Sydney could be identified in Brisbane, because they were wearing the same trousers as they wore on Good Friday - trousers which were stained with the blood of the fifteen political martyrs who were decapitated on that day.

Lang always had no end of plans. The other day he came forward with one to make £500 the maximum salary in the Public Service, and now he has appointed a public servant at a salary of £1,500 a year. Not many years ago, when he was Premier on a former occasion, his

Cabinet refused to vote more than £1,000 a year as salary for a friend and henchman of his, but he insisted that the man should receive treble the £500 - just three times what he now says is sufficient for any one. He is always twisting ; one does not know where he stands. [Quorum formed.~ While Mr. Lang proposes not to payinterest on the money raised overseas, I have not yet heard of his remitting the interest payable by municipalities, and other bodies, on the money which was lent to them for public works, such as water supply undertakings, sewerage schemes, &c. While they are required to pay their interest in full, Mr. Lang refuses to pay any at all. That is not only repudiation, but misappropriation. His policy has placed Australia in a very awkward position, and his disciples are trying to use that policy as a means of breaking up the federal Labour party.

Mr Maxwell:

– Why waste so much valuable time on Lang?

Mr CUSACK:

– His plan has been put forward as a substitute for that before the House. I expect that other plans will also be put forward. The honorable member for Wimmera (Mr. Stewart) has a scheme of his own for extending the life of Parliament for three years. I do not know what position Australia will be in if no satisfactory plan is formulated before then. When the Premier of New South Wales decided to pay interest on the money borrowed in New York, he was copying Mr. Theodore when that gentleman was Premier of Queensland. Wh enthe Treasurer, as Premier of Queensland, could not raise money in Great Britain he went to America and got it. But it is not likely that the New York moneylenders will lend money toa Premier vhose avowed intention is to repudiate his obligations to another money lender. I ask leave to have a resume of the Lang plan incorporated in Hansard.

Mr SPEAKER:

– Is leave granted?

Mr Lazzarini:

– No.

Mr SPEAKER:

– The honorable member must read the resume if he desires it to be included in his speech.

Mr CUSACK:

– The resume reads as follows : -

page 2889

QUESTION

THE LANG PLAN

The first weakness in the Lang Plan appears to he that it pre-supposes the State Treasurer can, with impunity, when the United States of America and British bondholders ask for payment, pay the former and throw the latter into the waste paper basket and, Micawberlike. say they are settled”.

To summarize the plan it was -

  1. Propitiated years ago by Lang’s paper, the Labar Daily, which sought on its ipse dixit to create a psychology, the purpose of which was to glorify Lang and delude the people into the belief that Lang personified Abraham Lincoln and the “ Samian Sage “ together.
  2. Fortuitous circumstances for Lang have gained him ascendancy and this political giant, like the ancient Sampson, proceeds to pull the political temple down around the ears of his compeers, and, at the same time, makes the enemy’s temple an impregnable citadel.
  3. When Mr. Jock Garden got a resolution passed by his confreres by which he would fasten on to the State Labour Party the policy of repudiation before the election, Mr. Lang was strong enough to squelch Garden and proclaim against repudiation.
  4. After the election, when Lang was high and dry, he “butts” into a Federal election contest - ignores a State election carried on at the same time - was not invited by those who had the best right to invite, and assumed leadership without being elected leader by those who have the right to elect a leader, and despite being in conflict with every other Labour party in Australia, seeks to fasten repudiation on the federal movement and threatens to politically murder any one who does not follow him.
  5. Two federal by-elections were held this year, in both of which the Labour vote slipped badly. Lang “planites “ credit Lang with a great victory in one election and blame Scullin for the debacle in the other. Principal factors in losing Parkes were (a.) the executive selected the campaign secretary’s brother over the heads of the local leagues. (b) Lang’s wage tax of1s in the f just then imposed, (c) The papers’ power to scare the people over inflation. Scullin could not be held responsible for one of the damaging factors that helped to defeat Labour at Parkes.
  6. Lang develops political homicidal tendencies and dons the role of “ Big Chief of the Goulburn-street political cannibal head hunters “, fifteen . bodies in one resolution to appease the litigious Lang and his cohorts. They are enabled to cavort around fifteen flesh* pots thus celebrating 1931 Good Friday with the second largest “ head hunting” catch in Australian history.
Mr SPEAKER:

– I have allowed a good deal of latitude in this debate. Many references have been made to what is known as the “ Lang plan “. But the honorable member is not reading in a way which enables me to determine whether what he is reading is relevant or not. I ask him to read more distinctly.

Mr CUSACK:

– I shall endeavour to do so. The resume continues as follows : -

  1. Last of the “ Seven stages of Lang “ delude the workers into the belief that he alone can save Australia, and to do that he has to resort to fratricidal aforethought and destroy the present Labour party. He will then fill the gaps with followers who will be mere marionettes who will have to ring up Goulburnstreet to know which way to vote. Some one there not elected to Parliament will have as many votes to guide Australia’s destinies as there are Lang adherents - a travesty on representational constitutional government.

Lang was not courageous enough to adopt his plan at the State election. He now puts the Labour movement into reverse gear and it and his plan has slipped down-hill just as it is topping the hill.

The Scullin Government is liable to be crushed between the anvil of Niemeyernian Gabb-Guyes and the sledge hammer of LangShang Cuckoo Birds.

Australia is suffering to-day largely because of the action of the Premier of New South “Wales. This gentleman has been the subject of such fulsome adulation by a certain newspaper that I am surprised that he does not regard himself as an even greater man that he thinks he is. The newspaper to which I refer is the Labor Daily. We have been told that Mr. Lang aims at becoming Prime Minister of the Commonwealth. If his .plan is so wonderful, I suggest that he should seek a means of applying it to the financial problems of Great Britain. Why waste time trying to apply it to a comparatively small national debt like ours, when the British national debt is more than £7,000,000,000? If the honorable gentleman could save Great Britain £7,000,000 a week it would be a great achievement. I suggest that he should aim at becoming Prime Minister of Great Britain, for if he succeeded in reaching such a goal he might be able, by means of his plan, to rejuvenate the world.

Mr SPEAKER:

– The honorable member’s time has expired.

Mr MACKAY:
Lilley

.- The Attorney-General (Mr. Brennan), in concluding his speech this afternoon, appealed to all honorable members of the House to support the plan evolved by the Premiers Conference. He said that if this were done it would undoubtedly be for the good of Australia. Honorable members may be quite ready to give general support to the plan though they may feel that they cannot approve of the details of it.

The conference of State and Commonwealth Ministers in Melbourne has been engaged in a most difficult and delicate task, and every honorable member will appreciate the tact, determination, and industry of the various gentlemen who contributed to the discussion even, though they might differ in their opinions on the merits of the proposals. The scheme provides that, in order to prevent default by the Commonwealth in the immediate future, and to avoid a general failure by the various State governments to meet payments due by them, all public expenditure, including interest on government securities, and payments for salaries and wages, pensions and social services, must be substantially reduced.

The proposals for the restoration of public finance are necessarily drastic, and they may be expected to be most unpopular with those who are being called upon to make great sacrifices. I have no doubt whatever that a great deal of resentment will be felt by pensioners, bondholders, and public servants, because the Government continued a policy which if persisted in, must have involved default before very long. In the days following the last general election the Labour Government appeared to display great concern at the alleged extravagance of the preceding Government. The Prime Minister constantly declared his determination to balance the budget and honour the obligations of the Commonwealth. He said that the mission of the Scullin Government was “ to straighten out the finances of Australia.” Yet he allowed days, weeks, and months to pass, until he is now compelled to admit that default is facing Australia. It is not surprising that even the Labour press is disgusted. In a recent editorial the Brisbane Daily Standard, a Labour organ, said -

The Government has been vacillating and dilatory where there was need for firm and timely action to meet the unprecedented difficulties confronting the country.

That statement represents the opinion that is generally held, that the Scullin Government has failed in a national emergency.

Before the Prime Minister left Australia for the United Kingdom he declared with great enthusiasm that the agreement of the August Melbourne conference of Commonwealth and State Ministers would be carried into effect.

The principal resolution, which was carried unanimously at that conference, was as follows: -

That the several governments represented at this conference declare their fixed intention to balance their respective budgets for the financial year 1930-31, and to maintain a similar balanced budget in future years.

Added to this commendable decision was this following important paragraph: -

This budget equinbrium will be maintained on such a basis as is consistent with the repayment of conversion in Australia of existing internal debt maturing in the next few years.

It is possible to fail in honest intention, but this Government failed because it refused to face a national duty. Many months of valuable time have been lost in tinkering with quack monetary schemes, and now that the crisis has arrived, the Government is forced to adopt severe measures of retrenchment and interference with financial contracts that might have been avoided if the position had been faced with courage and determination many months ago.

The Government has received advice from many quarters. There have been various committees of experts at work, and in August of last year the Government was informed that a percentage reduction of 10 per cent, would be sufficient to enable it to balance its budget. Yet the Government then did nothing. As late as February last the estimate was 13 per cent. Still the Government did nothing. Now the experts declare that a reduction of 20 per cent, is necessary, and the Government is forced to bring down proposals that will impose a severe strain on the thrifty section of the people.

Mr.Riordan. - South Australia made the biggest reduction, and it has the greatest deficit of all the Australian States.

Mr MACKAY:

– The honorable member knows quite well that South Australia is in. a position different from that of any other State. I suggest that he should refer to the State of Queensland, which has effected an even greater retrenchment scheme, and now stands as a pattern for the rest of the Commonwealth to follow. It is unfair to suggest that South Australia is in a bad position because it has introduced methods of economy.

The Commonwealth Government has hitherto shown weakness, and incapacity to deal with national problems, and has dismally failed to stand up to the promises so lavishly scattered about the electorates at the last general election. Many offers of co-operation have been made by the Opposition, but they have been treated with derision and contempt. It has always been admitted that the causes of world-wide depression are not within the control of any Government, but it is a fact that bankers and economists have issued warnings that a crisis was sure to take place. Many suggestions have been made to the Government which, if acted upon, would have reduced the necessity for the present drastic action. The Government is to blame for ignoring those warnings. It is some satisfaction to realize that it has at last recognized the necessity for the retrenchment of public expenditure.

Every member will regret that even pensions and social services are not to be excluded from the scheme of economies.

Those matters will be discussed under separate bills. I express my appreciation of the fact that the Government has agreed to allow a committee representing returned soldiers’ organizations and economic experts to make investigations with a view to determining how best a 20 per cent, reduction can be effected in that particular sphere. It is a matter for regret that the pensions to be paid to tubercular, blind and limbless soldiers are to be reduced under this scheme.

I approve of the resolution carried at a meeting of the Coraki branch of the Returned Sailors and Soldiers Imperial League. An extract from the Sydney Morning Herald of the 13th inst., reports it as follows : -

page 2891

WAR PENSIONS

Soldiers’ Favour Review

Coraki, Friday

The Coraki sub-branch of the Returned Sailors and Soldiers’ Imperial Leagueon Wednesdaynight dealt with a letter from the R.S.S.I.L. headquarters, stating that it had been decided to resist any interference with war pensions, and asking for helpful suggestions.

The chairman expressed the view that too many Diggers were drawing pensions in good positions. This was, he said, a time when sacrifice was essential, and men with health and strength and in comfortable circumstances should be cut out, but not disabled men or strugglers.

Another member cited the case of a Digger owning a business with a turnover of £1,000 a month, who was drawing a pension.

Other members urged that the pension list should bc drastically reviewed, in order to deal with such cases. Ultimately, a motion was earned unanimously that “ the sub-branch vigorously protests against a reduction of pensions of totally incapacitated men, but believes that a review is necessary in the case of those in good circumstances.” lt would appear that that branch of the Returned Sailors and Soldiers’ Imperial League is viewing the matter sanely. I agree that there are many anomalies in connexion with war pensions that should bc corrected.

While the Government contends that the fall in the cost of living will offset any reduction made in invalid “and old-age pensions, those affected will naturally feel little satisfaction in the matter. As with war pensions, there are cases of abuse that should be remedied. I have previously stated my opinions on these and have quoted instances where huge savings were possible.

It is claimed that Australia cannot return to financial stability by government economy alone; that it is necessary that financial contracts should be interfered with, and that interest rates on internal loans should be reduced. As with invalid and old-age pensions, and war pensions, considerable hardship is bound to occur.

In December last, there was very effective propaganda for the- £28,000,000 loan, and the Prime Minister contributed this message -

The outstanding feature of an investment in the Commonwealth Government loan is its unimpeachable security. The whole of the national resources of Australia are pledged to the prompt and regular payment of interest and to the redemption of the loans at maturity. There is an absence of worry, risk, or trouble in an investment in a government loan. ft was in the faith and honesty of such solemn assurances that the people of Australia invested their savings. What confidence can governments expect in future representations? This act of repudiation of contract is to obtain £3,000,000 in a State and Commonwealth budget of £210,000,000. The restoration of confidence would bring about a favorable exchange that would save the amount three times over. It was Gladstone who said that “ nothing that is morally wrong, can be politically right “.

The sanctity of contracts is a basic principle which may not be departed from without incurring severe penalty. It is proposed to invite a voluntary conversion under the shadow of compulsion, regardless of the consequences. With returning prosperity it is certain that wages and pensions will be restored, but the bondholder is asked to make sacrifices for all time. I submit that a more equitable method would be to impose taxation on the bonds and inscribed stock, so long as is necessary, and when prosperity returns these people should have their values restored. I believe that it is necessary for the bondholders to accept a lower rate of payment both in their own. interest and for the welfare of the Commonwealth, but I disagree with the method proposed. Many foolish statements have been made in reference to bondholders. There are tens of thousands of worthy citizens who have invested all their savings in government securities in the belief that no government would dare interfere with the rate of interest or the promise of repayment of the principal on the due date, and that their investment would be subject only to ordinary or general taxation. Thousands of these honest people are actually drawing less from their investments than the payments made to old-age pensioners. The man who invests anything from £100 to £500 in bonds has not time to rush round the stock exchange with the object of buying and selling bonds. He only sells his bonds when compelled by absolute necessity. .It is principally the big companies and speculators who make a profit on the purchase of government bonds on the Stock Exchange. I am firmly of the opinion that a comparatively small percentage of our bonds is bought and sold on the market by small holders. It is unfair to suggest that bondholders generally make a profit of 8 per cent., 10 per cent., or 12 per cent, on their holdings, for very few sell unless dire necessity compels them to do so.

Mr MACKAY:

– That may be so. I am sure that every honorable member will sympathize with the bondholder who is compelled, at a time like this, to sell bis bonds at such a heavy loss. Some arrangement should be made which would oblige a man who bought bonds under such conditions’ to pay a penalty. I feel inclined to say that government stocks should 110 t be negotiable on the market for speculative purposes. It is humiliating to think that £100 bonds backed by the security of the nation are only worth £80 on the market. Considering all the circumstances, I do not think that interest rates arc abnormally high. Everybody knows that when money is scarce it is dear. Interest rates are lower in other parts of the world because conditions are stable. When confidence is restored in Australia, interest rates will undoubtedly fall.

I direct attention to the fact that according to the figures made available some time ago by the honorable member for Maribyrnong (Mr. Fenton), when he was Acting Prime Minister, there are between 800,000 and 900,000 bondholders in Australia. The honorable gentleman showed that the savings banks, with 5,000,000 depositors, h.id £141,000,000 invested in government stocks, the life assurance companies, with 2,400,000 policy holders, had £65,000,000 invested, the Commonwealth Bank had £33,000,000 invested, and the friendly societies, with 600,000 members, had £13,000,000; the total investments under these headings being £250,000,000. In such circumstances, I cannot understand how the honorable member for Werriwa (Mr. Lazzarini) can. say that the majority of our bonds are held by big companies.

Mr Lazzarini:

– Every one knows that r.hat is the case.

Mr MACKAY:

– The figures which I have quoted show that it is not the case, but that the reverse is true. The figures I have quoted conclusively prove than nearly one-half of the amount of our internal loans is held by members of co-operative institutions and friendly societies and that 900,000 of our citizens will be adversely affected by the proposed conversion.

The Government does not propose to give any consideration to the holders of government securities which mature at different periods. A return was published recently by one of the financial institutions which showed the periods at which different holdings mature. Does the Treasurer think it reasonable that these people should he expected to convert their bonds into securities for periods beyond their lifetime. I understand that the Loan Council or the Treasurer will determine the maturity dates of the new securities, and as large numbers of people hold bonds to the value of £500 or £1,000, naturally they would prefer the seven-year period. If the maturity dates are to be determined without reference to their wishes in the matter, they may find themselves in possession of securities redeemable only in periods over 30 years. Some consideration should certainly be shown to all small bondholders.

Mr Gabb:

– The intention is to spread the redemption liability over a series of maturity dates.

Mr MACKAY:

– That would be unjust to the small bondholders, the majority of whom would, I feel sure, prefer securities maturing at the end of the first seven-year period.

Mr Theodore:

– The conditions of the agreement provide that small investors shall have their holdings consolidated into securities maturing in seven or ten years.

Mr MACKAY:

– Can the Treasurer say what would bc regarded as a small holding in Commonwealth bonds?

Mr Theodore:

– The class of bondholders to whom the honorable member is referring would certainly be in that category.

Mr MACKAY:

– There must be a considerable number of stockholders whose investments range from £500 to £2,000, and difficulty will be experienced in including tens of thousands of small holders in the seven-year period. I am sorry to have to say that this proposed voluntary conversion is really an arrangement to convert under the shadow of compulsion. A special tax of 22£ per cent, on the interest would be a fairer way of obtaining that assistance which the Commonwealth so urgently needs. This would enable future governments to restore to bondholders, from time to time, the value of their investments.

Mr Gabb:

– The agreement has been drawn so as to provide against payments to bondholders within the next few years.

Mr MACKAY:

– Under this bill there will be no need to redeem securities until a period for seven years has elapsed, and conversions will then occur in periods of three years until 1961. Under existing conditions it is necessary for the Government to approach the market with conversion loans every year, thereby keeping faith with the condition under which the money was obtained.

The Prime Minister and the Treasurer have invited criticism of the agreement, and I am strongly of the opinion that it would be fairer to the bondholders, whom, I submit, have some rights in this matter, to be allowed to make their sacrifice in the form of taxation rather than of reduction in the interest rate over a lengthy period, without any redress whatever. With a return to prosperity, there will be an immediate agitation for the restoration of salaries and wages. For that reason there should be some provision in the bill to permit of bondholders being treated in a similar manner. They have a legal and a moral right to have their values restored to them when the finances of the Commonwealth improve. Tens of thousands of our most worthy citizens have invested the whole of their life savings in government securities, in the belief that no government would interfere with the rates of interest, and that the principal would be met when it became due. Many thousands of these small investors are actually drawing less from their investments than the amount which the Government is paying to other citizens by way of invalid and old-age pensions. The -average bondholder would not require the urge of compulsion, which is behind these proposals, if he felt certain that his sacrifice would not be in vain. In the past governments, when in difficulties, made all sorts of promises to reform, but immediately the trouble was surmounted they pursued their former policy of extravagance in administration. After this conversion operation has been carried out, other loan money will be raised and, possibly, higher rates of interest will be offered, thus depreciating the value of the existing securities. This Government, in August last, gave a solemn promise, in Melbourne, to reduce expenditure and live within its income. That promise was not kept. Consequently, the people have lost confidence in it, and there can be no doubt that, upon a return to prosperity, the sacrifices of the present bondholders will be forgotten in an orgy of further extravagance in borrowed money.

The public debt of Australia was borrowed for the construction of railways and tramways, to provide telegraphic and telephonic services, water supply and sewerage schemes, public buildings, harbour and river works, and for land settlement. The people wanted all these public works, and the governments of the day, in appealing to the thrifty section of our people, boasted that the security of the Commonwealth was behind all their promises to keep their contract to pay interest and principal on the due date. That various Governments squandered loan moneys is not the fault of those who invested their savings in Commonwealth loans. It is the money spenders and not the money lenders who deserve condemnation.

From speeches which have been delivered in this debate by honorable members opposite, there would appear to be little hope of redress for bondholders who, undoubtedly, are in a helpless position. I can only hope that, at some future date, the Government will try to remedy some of the wrong which, I believe, is being done to Australian bondholders under this agreement. I am well aware that drastic action is necessary to restore the finances of Australia, and I feel strongly that a very deserving section of our people is being unjustly treated under this agreement, but under all the circumstances, I am not prepared to allow that consideration to prevent my support of these emergency measures. In the committee stage I shall endeavour to secure some amendment. I consider that I have done my duty in making these representations on behalf of bondholders, the great majority of whom lent their money to the Government from patriotic motives and, I think, are now deserving of more consideration from this Parliament.

Mr CROUCH:
Corangamite

.- I am influenced to support the bill by three considerations. The first and principal reason is that the agreement provides for a reduction of the interest charge on the internal indebtedness of the Commonwealth, thus affording -a substantial measure of relief to all primary producers. The second is that, failing an agreement for the conversion of our internal debts, the Government will be forced to default. We have been told by the right honorable the Prime Minister (Mr. Scullin) and the Treasurer (Mr. Theodore) that default will take place about the middle of July should these emergency measures not pass. Therefore, with me, it is a case of “ needs must when the devil drives “. In the third place, I am forced to support the hill by the action of the Opposition in this chamber, reenforced as it is by the Nationalist majority in another place, which has, over and over again, demonstrated its determination to defeat the Labour plans to rehabilitate the finances and impose its financial policy upon the Government, and to this end has consistently rejected Government measures designed to overcome the difficulties that confront the Commonwealth. The alternative to this proposal is the accession to office of a Nationalist government with a policy which, in my opinion, would be inimical to the best interests of the people. Thus, from necessity, I am forced to support the bill.

The purpose of the agreement is to reduce the interest charge on our internal debts. But I put it to honorable members that it is of no use to enter into an agreement unless the document in question is, in fact, an agreement which may be enforced. The bill itself is all right. This cannot be said of the schedule, which contains a number of proposals representing, as the Deputy Leader of the Opposition (Mr. Latham) observed the other day, what might be regarded as a draft agreement or preliminary notes, indicating the lines upon which the Prime Minister, the Treasurer, and the State Premiers reached agreement. In its present form this cannot be regarded as an. agreement. Before the Deputy Leader of the Opposition addressed the House last week on this point, I had read the measure carefully, and had come to the conclusion that about the only point upon which there was general concurrence was the preamble to the agreement itself - “ Now this agreement witnesseth “. I understand that the document was prepared by Mr. Davy, the Attorney-General of Western Australia. I do not know what is his standing as a lawyer, hut I do know that when a person consults his solicitor about an agreement it is the custom of the latter to make preliminary notes of the conditions to be embodied in the document. That is about all that can be said of the conditions set out in the agreement attached as a schedule to this bill. Paragraph 15 of it reads -

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

The condition as to the banks being consulted makes this an indefinite and unenforceable contract. When a person agrees to purchase a block of land, he gives instructions to have included in the contract certain safeguards against possible contingencies, such as faults or other objections to the title, and it is subject to consultation with or approval by his solicitor. And sometimes, as we all know, contracts of the nature described are voided because one or other of the solicitors to the parties concerned doe3 not agree to the arrangements made, and advises his client accordingly. This reduction of interest, I remind the House, is to be settled by the Loan Council in consultation with the banks. If the representatives of the banking institution concerned do not agree to the arrangement, the entire scheme must fail, because there can be no agreement. There are also, in the general conditions, other clauses to which no person who has had experience of the drafting of agreements could agree. I assume, on the authority of the Deputy Leader of the Opposition, that an agreement is necessary under section 105a of the Constitution. I have not considered that aspect of the problem, but I accept his assurance that, to make legal this arrangement to reduce bond interest, an agreement is necessary. Clause 2 of the agreement states -

The Commonwealth is authorized to arrange and effect a conversion, on the basis of a twenty-two and a half 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-

I think it is extremely possible we might amend that by striking it out- 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 do not know what the Attorney-General (Mr. Brennan) had to say on this point, because I was not present when he addressed the House. But I recall the remarks of the honorable member for Kooyong (Mr. Latham) who the other day said that reference to outside authorities cannot be permitted in the terms of the agreement. The honorable member for Fawkner (Mr. Maxwell) knows that in the framing of many partnership agreements the decision of an arbitrator is binding, while in others the decision of a majority of the partners is accepted. Such an agreement would be complete in itself; but a binding decision resting with an arbitrator, the parties or a referee would have to be given before it would be regarded as a legal agreement. The agreement embodied in the bill provides for an incomplete set of circumstances, and in effect is not an agreement at all. It is void for uncertainty. I think that the schedule to this measure, which is termed an agreement, will result in our legislation being futile. It is a pity that a measure in such an incomplete form should have been placed before the House for consideration. The schedule must be amended before the bill is passed by Parliament. Section 2 of the schedule must be drafted more definitely before the agreement can be regarded as a legal document. I trust that the measure will not be proceeded with in its present form. Unless we can have a proper legal agreement with respect to interest, I feel sure that the whole scheme will fail.

Mr Maxwell:

– Does that difficulty arise from the fact that the conversion is to be absolutely voluntary?

Mr CROUCH:

– I shall deal with that aspect of the question later. Seeing that interest rates should be reduced, I object to one principle of the proposals. Section 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 new security, subject to other conditions similar to the main conversion.

The Leader of the Opposition (Mr. Lyons) has taken a great deal of credit for the success of the £2S,000,000 conversion loan, which was successfully floated last year. But an analysis of the terms and conditions under which that money was raised showed that in floating that loan the Government was only postponing the evil day for two years. As I pointed out at the time, a very large amount was raised at an interest rate of 6 per cent, for a period of two years, while a small portion was obtained for a longer period at 5f per cent., and the remainder for a much longer period at 5-£ per cent. I believe that of the amount of £28,000,000 no less than £25,000,000 or £26,000,000 was in the form of short-dated securities, carrying interest at the rate mentioned. When I perused the conditions of issue I saw at once that a very large sum of the total amount was invested by the representatives of American interests in this country, such as those importing motor cars and motor fuels and oils, who wished to avoid paying the high exchange rates demanded for the remission of money to their principals overseas. These people, who were able to take advantage of the high interest offering, will be able to collect their money at the expiration of two years. When that time arrives we shall have again to face the difficulties with which we were recently confronted. I submit that that was very bad finance. In reply to the interjection of the honorable member for Fawkner, I may say that no less than £26,000,000 of that amount was raised by absolute compulsion. Business men who went to their bankers to obtain an ordinary overdraft were informed that unless they invested some money in the new conversion loan, they could not receive an overdraft. I know of a case in Parkville in Melbourne in which a man who was buying a house, on approaching his bankers for an advance of £1,500, was informed that he would be granted an overdraft of £2,000 on the condition that he invested £500 in the loan. He was not prepared to do that. Eventually they compromised, and the borrower, virtually under compulsion, contributed £100 to the loan. At that time the banks were anxious to do all they could to force their customers to contribute to the loan, with the result, in the instance I have mentioned, of a man being compelled, to contribute £100 to the loan. If these proposals are not adopted, we shall next year be faced with the same position as that with which we were confronted last year. Instead of that conversion loan being the success that some claimed, it was only a means of postponing our obligations for a further two years.

Mr Maxwell:

– What was the alternative had that loan not been raised?

Mr CROUCH:

– He could have got the Commonwealth Bank to issue notes for the loan, and the compound interest would have retired it in eleven years. Had that loan not been raised we should have had to face last year the position which we are now facing, and, which, in the absence of this plan, would arise next year. Why should there be any special circumstances under which contributors to the loan may receive repayment as is provided in section 11 of the agreement? Is there to be a repetition of the beating of drums, the circulation of literature, and further appeals to the patriotism of the people, when these people, who, in order to avoid the payment of a high rate of exchange, invested in the loan with the intention of withdrawing their money as soon as possible.

Mr Theodore:

– That was not the only consideration. Under the rationing scheme they could not get all they wanted.

Mr CROUCH:

– They were influenced tremendously by the high exchange rates prevailing at the time. By the adoption of these proposals, and the issue of shortterm securities, we shall be bringing about a condition of affairs such as now exists. Those who invested in the last conversion loan to avoid the payment of high exchange rates will get the benefit of the short-term securities and other special conditions. The honorable member for

Eawkner (Mr. Maxwell) asked if difficulties will arise because the proposed conversion is to be on a voluntary basis-

Mr Maxwell:

– I should like to know if the difficulties which the honorable member says will arise are due to the fact that the loan is to be voluntary, and not compulsory.

Mr CROUCH:

– This loan should be compulsory, and it is going to be compulsory. That is the position we have to face.

Mr Jones:

– The honorable member stands for repudiation then?

Mr CROUCH:

– We have reached a stage in regard to our loans when there will have to be repudiation of the original terms. I do not like to confess it, and regret very much that it should be so. It is unquestionable that we cannot pay our own people this year or next year; therefore, we must adopt some form of compulsory conversion if we are to meet the position that confronts us. Even the Deputy Leader of the Opposition (Mr. Latham) has hinted and implied that there must be compulsion. In the first place, the Government proposes to ask the people of Australia to convert voluntarily, and to offer them an interest rate of 4 per cent, per annum. That, in itself, is repudiation. What other term can be used, when a man who expected to receive 6 per cent, for a number of years is offered instead 4 per cent.? If he does not convert on those terms, but prefers to have his capital returned to him, every attempt will be made to reduce his income in other ways. Should he continue to draw interest, it will be taxed at the rate of 22i per cent., with the result that he will find it more profitable to convert.

The Deputy Leader of the Opposition published recently over his signature in a. number of country newspapers an article headed “Voluntary Conversion Loan “, ; “ Why We Opposed Compulsion”; “Upholding Australia’s Credit “. At the outset the honorable gentleman said -

It is appropriate that I should explain the reasons that led the members of the Opposition to urge a voluntary appeal, rather than the plan previously favored by the conference. The earlier proposal was that the people should bc asked to convert voluntarily and be told at the same time that if they refused to come into the voluntary conversion there would be a tax of 25 per cent, imposed on the interest on their existing holdings.

He went on to say -

It may be urged that this is all very well, but what will happen if the voluntary proposal fails, and, in proportion as it does fail, what are we going to do. I suggest that it is a mistake always to work out every contingency to its logical conclusion in matters of this kind. Let mo give a homely illustration. A father, when he asks his child to do what is right, makes a very grave mistake if he always associates with the request or direction a threat of what will happen if the child does not do as he is told. Grown-up people are very much the same in this respect.

We must deal with the position as it stands to-day. If the conversion proposal fails, and, to the extent that it fails, a new position will arise, with which we can deal at the appropriate time.

Thus, should voluntary conversion fail, compulsion will become absolutely unavoidable. The Opposition has committed itself to that extent.

Another reason why I object to the conversion being on a voluntary basis is that only the decent people will convert. As the honorable member for Kooyong says, “ If the voluntary conversion fails, we can deal with the new position.” The only way to deal with the failure of voluntarism is compulsion.’ Why is it necessary to apply compulsion to-day in regard to, for example, the closing of shops and. factories at certain hours. When a lad, I passed at Ballarat an examination entitling me to enter the Crown Law Department. While waiting appointment, as I did not wish to be idle, I accepted the position of cash boy in a draper’s shop. I had to work from 7.30 in the morning until 7 at night, and on Saturday nights until 11 o’clock. What was the reason for that brutal treatment not only of me, but also of all the other employees? I suppose that, of 75 drapers in Ballarat, 70 desired to treat their employees decently; they would have closed their premises at 6 in the evening and at 1 p.m. on Fridays. But simply because five proprietors would not consent to such a proposal, I, and other employees, were compelled to work unconscionable hours. It was only by applying compulsion to selfish men that the desirable reform of early closing was brought about. It was a similar cause that led to a factory legislation being enacted. There are members of this House who deliver addresses at the pleasant Sunday afternoon services of the Wesley Church in Melbourne. They are always urging the cultivation of kindly relations and of the co-operative spirit between employers and employees, and deploring the existence of arbitration courts and wages boards, which, they argue, cause division and dissension, and drive the two classes into opposite camps. I admit that if all employers and employees were unselfish and Christian men there would be no need for arbitration courts. It is the selfish and unchristian employer and employee who has forced these tribunals upon us. It is necessary to enact special legislation compulsorily to deal with the employers and employees who do not act fairly. Compulsion is not needed in the case of the decent employers and employees, who comprise the big majority of our community. What will be the effect if compulsion is not applied in connexion with this loan conversion? The man who is not patriotic, who is not unselfish, who does not wish to help Australia, will decline to convert.

Sitting suspended from 6.15 to 8 p.m.

Mr CROUCH:

– Unless compulsion ie applied, many persons will display selfish’ ness instead of patriotism, and the effect of non-conversion would be prejudicial to both the selfish and the patriotic classes. [Quorum formed.] Even those who would otherwise convert will decline to allow the non-converter to get his selfish advantage. A number of anomalies will be created under this measure. The difficulties that will arise from the reduction of interest on private mortgages will be so great that the scheme will probably fall to the ground. As a solicitor, I am personally aware of two cases in which loans fall due in July and August next, the interest rate being 7 per cent., but because of the threat that this rate is to be reduced 22½ per cent., the mortgagees are now holding back and will renew the loans only at a rate which will enable them to obtain 7 per cent. net. I have not overlooked the fact that, under pending State legislation, the interest rates on existing mortgages will be reduced, but where mortgages expire a few months hence, the lenders will insist upon a not 7 per cent, before they renew. The money lender who charges 60 per cent, on loans on demand will raise his rates finally to produce that sum from our most necessitous borrowers. Thus it is obvious that this scheme will tend to defeat its own object. “While it will » help those whose mortgages do not mature for two or three years, the difficulties of those who find it necessary to renew mortgages immediately will be accentuated by the State legislation proposed to be passed concurrently with the bill now under consideration.

Mr Stewart:

– There is also the difficulty of those who will require loans in the future.

Mr CROUCH:

– Yes; lenders will demand a certain rate of interest. Just as laud tax has been passed on so will this be passed on to the borrower, always to the latter’s disadvantage. The brunt of the reduction of interest rates will have to be borne by those compelled to raise private loans. The most distressed class of debtors are those who have to borrow from private money lenders, who, immediately the concurrent State legislation is passed, will demand repayment, and renew only on terms that will give them the old rates of interest plus the tax they have to pay themselves.

Those who have had experience of building societies know that the interest is included in the repayments made by the members. In the early stages most of the money paid off represents interest, but towards the end of the loan period the payments are almost entirely of principal. Consequently, the State legislation, which is to be passed concurrently with that now proposed, will cause all kinds of anomalies.

Mr White:

– The difficulties are not insurmountable.

Mr CROUCH:

– I am speaking of difficulties that have already arisen in my own knowledge. I am a co-trustee with respect fo Certain money bequeathed to a girl in England, who now receives £45 per annum for her musical education. That money is being kept back for her, and invested in Government bonds. Next year she was to have begun her musical education in Germany, hut I think that I may say that if the proposed reduction of interest is agreed to it will be impossible for the trustees to continue to make payments to her in accordance with the will of the testatrix. Special funds are set aside for widows, and invested in bonds in order to provide them with annuities, but the Government’s proposal will cause such persons a. great deal of trouble. As the corpus has now been distributed, I do not know what will happen to these unfortunate widows.

That money always goes where it can earn the greatest profit, is axiomatic. Instances of this are provided when there is a considerable variation in the exchange rates between, say, New York and London. Recently, in consequence of action taken deliberately by the Reserve Bank of the United States of America, in sending money to London, the Bank of England reduced its discount rate with the result that money immediately flowed to the London money market. If we limit the interest on investments in Australia to 4 per cent., then, in spite of the high exchange rates,

Capital will be transferred from Australia elsewhere. Money is now being transferred to other countries without the payment of exchange; it is being sent out of the Country in the form of goods such as dried fruits, wool, and rabbit skins, in which cases the benefit of the high exchange rate is obtained. This shows the impossibility of controlling money, if the persons to whom it belongs are unwilling to have it controlled. Therefore, we are face to face with many economic and financial difficulties in trying to operate this scheme.

One proposal for reducing expenditure is that ex-soldiers should suffer a reduction of their pensions. I may say that, in this connexion, pressure is being put upon me. Telegrams have been sent from Melbourne to branches of the Labour organization in my constituency requesting that I be required to do certain things, but I resent this action, and I do not intend to be influenced against my better judgment. A time comes when a man must stand against the pressure of his constituency, if he thinks that he is serving the best interests of the electors, “t do not favour some public servants being let off with a wages reduction of 18 per cent., while ex-soldiers’ pensions are to be reduced by 20 per cent. That is an anomaly that we should rectify at once. I am glad that a conference of returned soldiers is now forcing the position.

I regret that the Leader of the Opposition (Mr. Lyons) is not in the chamber. I thought that he would be prepared to face this position, but how is the party opposite trying to escape it, and secure some small party advantage? The Melbourne Herald of the 15th June - that newspaper is the special advocate of the honorable member for “Wilmot - reported him as having said -

The reductions in wages and pensions now suggested by the Commonwealth Government arc just as drastic as anything the members of the Opposition have ever proposed.

I am glad that that statement was omitted from the report published the next day in the Age and the Argus. The plan under consideration is supposed to be a non-party and national effort, and I regret to notice that there seems to be an attempt on the part of the Opposition to throw off all responsibility in the matter, and place it upon the shoulders of the supporters of the Government. The Country party seems to be pursuing similar tactics. The Ararat Advertiser of the 9th June, published the following paragraph from the weekly bulletin of the Country party: -

The Government has leapt lightly from its election promises that it would not reduce either pensions or wages; from an anti to a pro-inflation policy; from its decision to jettison returned soldier preference to the previous Bruce-Page order of direct preference.

At a time when conscientious and courageous action is demanded of all sections, it seems most unfortunate that the leaders of the parties in opposition should endeavour to make political capital out of the present crisis. Disaster must overtake the Commonwealth if the position is not faced with determination. If I wished to follow the easy course which would gain votes, and ensure my re-election to this House, which I naturally desire, I would oppose the Government on this bill. It is unfortunate that the Country party and the Leader of the Opposition should be endeavouring to curry favour in the constituencies by making statements of the kind to which I have referred.

Mr Fenton:

– Why does not the honorable member lecture his own side?

Mr CROUCH:

– The Labour party does not willingly submit this legislation. But for the pressure brought to bear by the Nationalist party in another place, which insisted on a heavy reduction of the expenditure on social services and pensions, the Government would have carried its original financial proposals, which, I believe would have meant the salvation of the business and farming communities by the expansion of credit. I have no desire to make charges in this connexion, but the first proposal for the reduction of expenditure in connexion with pensions and social services came from the Deputy Leader of the Country party (Mr. Paterson), who recommended reductions of from 4s. to 6s. in the £1 two or three months ago. It is not the desire of the Labour party to make these reductions; but the Opposition, with its solid majority in another place, has used pressure upon the Ministry, which has been forced into its present position in order to avoid default. When we, on this side, were told that it was a case either of accepting this plan or defaulting, we had to accept it.

Mr GuLLETT:

– Why not appeal to the people, and take the Senate to the country also?

Mr CROUCH:

– That will come in good time. I intend to support the bill. I shall support the present proposals; but when I get back to my constituents I shall tell them that I did so only because the Nationalist and Country parties would not accept the original financial proposals of the Government, which would have spread the burden over all classes of the community without taxation of special classes. It would have imposed an invisible tax on every one. I shall make it clear to them that the proposals now before the House were forced upon us by the banks and the moneyed interests which direct the Nationalist and Country parties in all their operations, and that they were accepted by me only in order to save the country from default.

Mr STEWART:

– The Country party is not directed by the moneyed interests.

Mr CROUCH:

– Those interests control another place and there the Country party is solid with the moneyed interests. I shall tell my constituents that rather than see Australia default, I accepted proposals which were not to be compared with the original financial proposals of the Government.

Mr Stewart:

– Apparently the honorable member will have to do a lot of apologizing.

Mr CROUCH:

– I am not apologizing; I am merely excusing myself for having to adopt an attitude that I hate. The policy of taxing the pensions of soldiers, invalids, and aged persons, and of reducing the maternity bonus, is repugnant to me. Only as an alternative to default on the 15th of July am I prepared to accept these proposals. I shall tell these things to my constituents, and shall urge them to return, both to this House, and to another place, a majority of members who will say that the proposals which have been forced upon us shall no longer operate, and that the policy of the Government to expand credit shall be put into operation. The present proposals will not reduce unemployment, excepting to the extent that a reduction of interest will do so. These reductions will not extend our resources. I want to see an expansion of credit to the extent of £50,000,000, for only by such means can wo meet the situation that confronts us.

The cutting down of expenditure will mean further unemployment; only the expansion of currency will cure the unemployment evil. The original proposals of the Government contained the only remedy for unemployment. When we have the opportunity to place those proposals before the people I feel sure that we shall be able to persuade them to return to both Houses a majority of members who will be responsive to their wishes, as they did at the last election, despite the circulation of Nationalist propaganda.. [Leave to continue granted.] I thank honorable members for their courtesy in allowing me an extension of time. In this matter I am a free lance, at liberty to express my own views, and unrestricted by party ties. Some of my remarks might not be acceptable to the Government, while others might not find favour with the Opposition. I am, however, saying what I think is best for Australia, when I repeat that unless we can obtain an expansion of credit, we shall not be able to reduce unemployment. I agree with the honorable member for Flinders (Mr. Holloway) that we shall not return to prosperity by reducing old-age pensions by 2s. 6d. a week. As it cannot be said that these pensions are hoarded up by their recipients, it is obvious that any reduction of the amount merely means that so much less money will circulate, and that shopkeepers and other traders will suffer in consequence. The same thing is true generally of the pensions of soldiers. Instead of decreasing the spending power of the community we should increase it. As a general rule, public servants spend all their income, so that any reduction in their salaries will only aggravate an already unsatisfactory position. We should aim at increasing the purchasing power of the community; and that can be done only by an expansion of credit. The Government endeavoured to meet the Situation by expanding the currency, but it was thwarted by another place. I, therefore, find myself in (he position of having to agree to legislation which is obnoxious to me in order to prevent the banks from forcing the country to default on the loth July, or to pay only 1 2s. in the £1.

Mr Gullett:

– Why not go to the country?

Mr CROUCH:

– Unlike the honorable member for Henty (Mr. Gullett), I am not in favour of reducing pensions. That has been the honorable member’s remedy for everything. So long as another place is constituted as it is now, the honorable member for Henty and the financial interests represented by him will win. In that ease he ought to be generous instead of making attacks upon me. The honorable member wants to see pensions reduced; I do 11Ot. He has succeeded ; but he should not rub it in. It has been stated that, in order to effect a saving, the Australian Navy is to be transferred to the Royal Navy. The Melbourne Age, which was largely responsible for the establishment of the Australian Navy about eighteen years ago, and the Australian Natives Association, have started an agitation against the transfer. Any one who has studied the matter will know that we have never had an Australian navy. When the country has been at war our Navy has been attached to, and under the complete non-Australian control of, the British Navy ; in times of peace its officers have, almost without exception, been pensioners from the Royal Navy. In reply to a request by me, there was tabled recently a return showing the number of naval officers at Westernport. The return showed that officers, warrant and petty officers constituted more than 50 per cent, of the personnel, and that less than 40 per cent, of such officers had received their training in Australia. I point out that that was the position when our so-called Australian Navy had been in existence for about eighteen years. Under Royal Navy direction, it has been unable to have even Australian petty officers. The only part that we in Australia have had in the control of the Navy has been that we have paid for it.

In respect of their attitude towards this bill, I divide honorable members into three classes. In the first class I include those honorable members who, like the honorable member for Henty, ineffectively say a lot about it. I describe them as the party of the jawbone. There are then those honorable members who wax sentimental and say that, while they know the measure is necessary and wish it well, they are afraid that some one will be hurt by it. I include them in the party of the wishbone. The third class comprises those honorable members who, seeing their duty plainly before them, arc prepared, in the interests of their country, to do things which are otherwise repugnant to them. They are the party of the backbone. With them I stand.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

.- I could not but admire the candor of the honorable member for Corangamite (Mr. Crouch) in stating that, although he would support the bill in this chamber, he would condemn it outside; but I am afraid that his legal mind works along different lines from mine. I regret that an otherwise excellent and constructive contribution to the debate at times degenerated into a partisan speech. I confess that I have sometimes displayed party bias in this chamber; but when matters of such importance are before us, we should endeavour to rise above party considerations.

I commend to the consideration of the Government the able criticism of the bill by the Deputy Leader of the Opposition (Mr. Latham). I was glad to see that the Attorney-General (Mr. Brennan) listened attentively to the honorable gentleman’s remarks, and I hope that when the bill reaches the committee stage he will avail himself of the aid so freely offered by the eminent King’s counsel who represents Kooyong in this House. In approaching the consideration of this bill, I have in mind your ruling, Mr. Speaker, that the other measures associated with it may be discussed. I do not, however, propose to go into the details of the proposals which they will contain, but shall content myself with dealing with the principles involved in them. Notwithstanding that I may be accused of adopting a party political attitude, I desire to make it clear that the Country party was not consulted in any way about the proposals to be introduced to give effect to the decisions of the Premiers Conference. In that respect the Country party was not accorded the same consideration that was given to the Labour caucus and the official Opposition in this chamber. Representative members of the Country party were not called in, and, as a party, we are not committed to the plan now before the House. The official Opposition is committed, as the leaders agreed to the plan. Had the Country party been consulted and had it been represented at the Melbourne conference, I am sure that its representatives would have done their utmost to make the plan as complete as the Prime Minister (Mr. Scullin) claimed it to be when presenting it to this House. We of the Country party do not believe that the plan as it now stands is complete, because there are many avenues of economy which have been left unexplored. I propose to show later that the proposed reductions will not be shared equally by the general community. Some sections are going to be hit harder than others, while other sections will be in a better position than they are at present. That, I am sure, is not the desire of any honorable member. Our desire is that the burden of sacrifice shall be spread as evenly as possible. The plan contains many proposals for reductions of expenditure, as in wages and pensions, and for increased revenue by means of direct taxation such as increased income taxation, and by means of indirect taxation such as an increase in the primage duty. To my mind the most important feature of the plan is the proposed conversion loan of some £550,000,000, under which there will be a general reduction of 22£ per cent, in respect of interest payments. The magnitude of this proposal will be evident when I explain that if a similar conversion took place in the United States of America it would - on a population basis- involve £11,000,000,000, and in the case of the United Kingdom £4,000,000,000. The United States of America, although its people boast of it as a wonderful country in which everything is done in a big way, has never contemplated a conversion loan on such a vast scale as that now contemplated in Australia. The general desire is that the rate of interest should be reduced, and the Government has acted wisely in making this a voluntary conversion loan. I regret that the Premier of New South Wales (Mr. Lang) only accepted the recent agreement arrived at in Melbourne subject to certain conditions. That gentleman gave the conversion loan his blessing but stated that if it were not a success he would not give effect to certain proposals under the general plan. His action may, of course, have the beneficial effect of bringing about the conversion of bonds, which would otherwise have remained unconverted. If that happens, no one will be more pleased than myself. The reductions in governmental expenditure should apply in every State, and if the major State of the Commonwealth stands out of the scheme, the efforts of the other States to bring about budget equilibrium will be nullified. I am sure that every honorable member, irrespective of his party views, is wholeheartedly behind the Government’s attempt to make the conversion loan a success. These economy proposals affect only government finance. The Commonwealth and States this year are faced with a deficit of £31,000,000, and it is expected that at the end of the next financial year, if expenditure is not considerably curtailed, the deficit will be between £39,000,000 and £40,000,000. Something has to be done to reduce this enormous deficit. The present plan is to reduce governmental expenditure as distinct from general expenditure throughout the community. Many of the Government’s proposals will, if given effect, do a great deal of harm, by delaying the rehabilitation of industry, without which this country cannot progress. Our biggest problem is unemployment, and unless we do something to employ many of those who are now out of work, any plan that we institute for the rehabilitation of Australia is doomed to failure. The proposals that are before us do not to any extent provide for increased employment. The main object is to reduce governmental expenditure, and we have to look to outside industry for the employment of at least 80 per cent, of those who are now out of work. Therefore, the Government’s plan does not go far enough. Although it is acceptable from the point of view of reducing expenditure and balancing the budgets of the various governments, it is not a complete plan for the rehabilitation of Australia. It is alleged to spread the burden of sacrifice evenly among the people, but, unfortunately, it does nothing of the sort.

I was surprised to hear the Prime Minister, on Friday afternoon last, state that no attempt would be made to reduce the tariff, hut that, on the contrary, primage duty is to be increased from 4 per cent, to 10 per cent, in respect of all articles imported into Australia. This increase in duty will give an additional protection to the Australian manufacturers. Some of the protective duties were imposed a considerable time ago. It is well known to honorable members that most of the Australian manufacturers take advantage of the tariff protection afforded to them by increasing the price of their products to the general community. Their prices follow the tariff.

They are now to be given a further opportunity to increase their prices, and so derive larger profits at a time when the rest of the community is suffering reductions in income. The principle of equality of sacrifice, which is supposed to underlie the Government’s proposals, is not to apply to the manufacturers of Australia, and I, for one, fail to understand why that class, above all others, should be immune from the general economy plan. If the proposed general 20 per cent, reduction applied not only to wages, pensions and interest, but also to tariff and other duties, it would be a wonderful thing for Australia generally. I do not believe in leaving out any special class. The honorable member for Corangamite (Mr. Crouch) has referred to money lenders, some of whom demand usurious rates of interest from those who, through stress of circumstances, are obliged to apply to them for temporary financial accommodation. The rates of interest charged for temporary accommodation are usually higher than those which are ordinarily charged, and great difficulty would be experienced in bringing into effect n 22$ per cent. reduction in the case of money lenders. Such a reduction would, undoubtedly, be of great advantage to the borrowers, but it would not go very far towards bringing about that equality of sacrifice which is so eminently desirable. The matter, however, is one for State action.

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

– The honorable member, nevertheless, will vote for the plan.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I shall vote for part of it. At the present moment I am dealing only with the principles. I am very much in the position of one who is obliged to accept a quarter loaf rather than have no bread at all. To my mind, although the plan does not go far enough in many respects, it is a step in the right direction towards achieving budgetary equilibrium, more particularly by the Commonwealth, which is our chief concern.

The increased taxation proposed is to be an increase of the income tax and an addition to the .primage duty. I have no objection to an increase of the primage duty, provided it is accompanied by a reduction in the general customs duties, so that the sacrifice of manufacturers will be commensurate with that of all other Sections of the community. “With regard to the income tax, however, honorable members who have read the three reports of the Public Accounts Committee presented within the last twelve months, relating to the inquiries made by the committee into the finances of South Australia and Tasmania, must have been struck with the tremendous burden of taxation the people of Australia have to bear. Senior departmental officers in South Australia and Tasmania gave evidence before the committee that the peak in income taxation has already been reached. There is a point beyond which taxation defeats its own purpose, and I believe that that point has been reached in Australia so far as income taxation is concerned. We must look to private enterprise, particularly in rural districts, to provide the greatest amount of employment, and it should be our aim to relieve industry of all irksome burdens that can be legitimately removed, so that the wheels of industry may again revolve. High rates of income tax especially in the taxation of companies are a drag upon enterprise rather than an aid and incentive to its expansion, and I, therefore, regret the need for increasing the rates. I hope that, in the near future, it will be possible to reduce them, more particularly in rural districts and upon companies so that enterprises may be in a position, to extend their operations and give a bigger amount of employment than they are able to do under the oppressive burden of taxation they have to bear at the present time.

I have already expressed my hope that the conversion loan will be a distinct success, so that we may be helped by a reduction of the interest payable to our bondholders, and the country as a whole will also be materially benefited if the States carry out their plans for a general reduction of interest rates as between individual and individual. In this connexion it may not be out of place to make reference to the proposal of Mr. Hoover, the President of the United States of America, to grant a moratorium for one year in respect of the indebtedness of other countries to the Government of the United States of America. I cannot see how Australia can benefit. We have already made definite arrangements with the British Government for the only amount of war debt we owe overseas, which is only about £S0,000,000 out of the enormous number of millions Australia owes abroad. The British Government has granted Australia a moratorium for two years in respect of the sinking fund payments in liquidation of that indebtedness; but President Hoover’s offer means that Australian will lose between £800,000 and £900,000 - its share of the annual reparation payments by Germany. The Hoover plan will, therefore, be a detriment rather than an advantage to Australia. However, as the Prime Minister has promised to make a statement on the subject, it is, perhaps, advisable to withhold further comment upon it.

The States will deal with the matter of interest on mortgages; but the Commonwealth Government has announced that it will reduce the salaries of Commonwealth public servants. The Prime Minister says that he has resisted these reductions for twelve months. I regret it, just as I regretted that the last reduction was confined to officers receiving over £725 per annum. The bill affected only 1 per cent, of the Public Service. These reductions are long overdue; but they will materially benefit, not only the general taxpayer, but also the Government. It has long been looked upon as an axiom in Australia that the pocket of the Government has no end ; that one can always dip into it and get something out of it. The stark realization that the Government pocket definitely has an end has brought the Government up with a round turn, and has compelled Ministers to acknowledge the need for a reduction of salaries. I arn sure that the reduction proposed will inflict hardship on no one. Already, by our tariff, we have set up our manufacturers as a sheltered class, but there is no need for us to continue having our public servants as a second sheltered class. I am, therefore, pleased that this particular nettle has been grasped firmly by those who have been responsible for the plan now before us.

Other reductions proposed are in regard to invalid and old-age pensions. The pension of £1 a week every one will admit is not a particularly magnificent one. To the individual it is a small amount, but in the aggregate an enormous sum of money is involved. When I first entered this House the pension was 15s. a week, but because of an increase in the cost of living it was raised, first of all to 17s. 6d., and in 1925 to £1. The main argument used by the then Treasurer (Dr. Earle Page) was that the cost of living had materially increased, and that the actual basis of the purchasing power of the pension, as increased, would remain the same. We know, from the cost of living figures, that the £1 has now a greater purchasing power than it had in 1925.

Mr Keane:

– Who has told the honorable member that that is so?

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– We have it from the official records.

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

– The prices of such commodities as butter, sugar, and tea remainthe same.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– Tea is certainly dearer now that the duty has been put on. But over a series of years the Statistician takes into consideration the same classes of commodities. If the index figure based on those commodities is wrong now it must have been wrong in 1925, and again in 1920; but a reduction in the price of these commodities is reflected in the index figures relating to the cost of living, and those figures are generally accepted as being reasonably correct.

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

– The honorable member’s remarks will also apply to soldiers’ pensions?

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– No; I shall deal with soldiers’ pensions in a moment or two. In regard to the invalid pensions, the Royal Commission on National Insurance received evidence that in all other countries but Australia such pensions are on a contributory basis. As that pension also increased from 15s. to 17s. 6d., and later to £1 in accordance with the rise in the cost of living, I see no objection to the reduction of it now when the cost of living has fallen, much though I regret the necessity for such a step.

The honorable member for South Sydney (Mr. E. Riley) interjected th.it the lower cost of living applies to war pensions as much as to invalid and oldage pensions. I have been, ever since 1919, an executive officer of the Limbless Soldiers Association or the Returned Sailors and Soldiers League, New South Wales branch, and, therefore, I have an intimate knowledge of the history of the pensions scheme. In 1919, I was one of a deputation which waited on the then Prime Minister (Mr. Hughes), to urge the adoption of certain principles In connexion with the granting of pensions. Some of those principles which we then enunciated were accepted by Parliament, and they still hold good. One was that disability shall be the only basis of a pension, and I am. glad to say that the present Government has accepted that principle. The Treasurer (Mr. Theodore) last week, when outlining the details of the Government’s plans for the reconstruction of the finances, said that the Government had proposed to deal with soldiers’ pensions in another way, but had found that the principle to which I have referred was accepted by all the belligerent nations. The pension is compensation for injury received. The soldier took certain risks and made sacrifices for the country and his pension is a compensation for service given, and has no relation to either his earning capacity or any other extraneous factor

Mr Lewis:

– It is a recompense as wages are a recompense for labour done.

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

– Invalid and old-age pensions also are a recompense for services rendered.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– Certain service was rendered by the soldier, and in the assessment of his pension, his disability is the only factor to be taken into consideration. A second principle for which we fought successfully was that length or quality of service did not count. Whether a man lost his sight in the first three minutes of active service or after three years, his disability was just as great when he returned to civil life.

Mr Riordan:

– His pension is assessed on the same principle as operates in connexion with workers’ compensation.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– The 1920 act contains schedules which set out definitely the pensions to which soldiers are entitled for various disabilities. The basis of them was laid down at conferences in 1 i) 1 0 and early in 1920, and I remember tiwi :ii the time we impressed upon the Government that these payments were unaffected by the basic wage or cost of living.

Mr Maxwell:

– Surely the honorable member does not say that compensation can be dissociated completely from the cost of living? In estimating compensation, one must have regard to that factor.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– We did dissociate the two. We were asked to suggest a reasonable payment, and we proposed that a full pension should be £2 2s. a week.

Mr White:

– And the amount has not been increased since 1920.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– That is so, but a compassionate allowance was made to certain amputees, blind soldiers, and other special cases. The fifth schedule was amended to provide that certain classes of disability for which a three-quarter pension of £1 lis. 6d. was payable, could be supplemented by a compassionate allowance of 8s. 6d. Would any honorable member consent to go to the Canberra hospital and have his right arm amputated above the elbow on the promise of a pension of £2 a week ? Of course not.

Mr Maxwell:

– On what principle was the full pension assessed at £2 2s.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– If, at 40 years of age, a man who had been a manual labourer all his working life, lost his right arm, it would be practically impossible to train him for any vocation. Ye’t the maximum pension to which he is entitled is £2 a week, although he is no longer able to earn a livelihood. We decided that a definite pension should be payable for specified disabilities, regardless of whether the soldier was a millionaire or a pauper, educated or illiterate, and regardless, also, of his social position and intellectual capacity. That principle has been in operation up to the present time.

Mr Curtin:

– Apparently the honorable member would object to the State Parliaments revising the payments for disabilities under the Workers Compensation Acts?

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I cannot express an opinion on them because I am not aware of the principles upon which workmen’s compensation is based. I am speaking of what I know, and am emphasizing the fact, that the principles governing the payment of soldiers’ pensions were never disputed until the present plan was proposed.

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

– I shall vote against all proposals to reduce pensions.

Mr.R. GREEN.- Invalid and old-age pensions are in a different category from war pensions. There is no responsibility on this Parliament to pay the former. Such moral responsibility as we have to the aged and infirm is not comparable with the responsibility to the soldiers. The war pension is compensation for a disability suffered in the service of the nation ; old-age and invalid pensions are merely ex gratia payments in accordance with the policy adopted by Parliament, and approved by the people, and are subject to variation from time to time. I am not objecting to the principle of an old-age and invalid pension, but I am reminding the House that the war pension is a fixed obligation, and has to be paid.

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

– So have the others.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– No. A definite obligation was accepted by the Crown in respect of the soldiers and that is stated in the act of 1920. Further, honorable members are aware of official letters written to soldiers, stating that during their lifetime their pensions would be secure. A reduction of the pensions would be a definite act of repudiation. If the bondholders are to be afforded an opportunity voluntarily to accept a lower rate of interest than the Commonwealth had contracted to pay, why should not the same choice be allowed to the soldier pensioner ? “We are told that there must be no repudiation of the interest due on bonds, but there may be repudiation of the contract made by the Crown with the soldiers.

Mr Keane:

– And other pensioners.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– In order not to trespass unduly upon the generosity of honorable members in extending my time, I shall defer further discussion of soldier pensions until the detailed proposals are before us.

I propose to indicate, briefly, certain directions in which further savings may be effected and additional revenue attained. The Commonwealth Commissioner of Railways (Mr. Gahan), in the course of his excellent report, has made some highly constructive suggestions, which are worthy of the consideration of honorable members. In it will be found many suggestions for cutting out duplication and overlapping in connexion with our railway systems. As is generally known, one of the chief reasons for the growing deficits has been the continually decreasing earning power of the railways, and the excellent report of our chief commissioner contains much valuable matter bearing upon this and other phasesof railway administration. Overlapping occurs in regard to other governmental activities also. For instance, it still obtains in our electoral offices, in which considerable savings could be made. Besides that, we have both State and Commonwealth land valuators operating throughout the Commonwealth. Surely it would not be difficult to arrive at an arrangement whereby one officer in a particular district could make valuations for both Commonwealth and State purposes. There still remains some duplication in connexion with the Commonwealth and State Taxation Departments, and I have no doubt that departmental officers could make valuable suggestions to a committee appointed for the purpose of receiving them as to the best means of eliminating this waste. In the control of our ports and harbours a certain amount of overlapping and duplication also obtains. This sort of thing is one of the worst features of our present system of government. For many years I have fought for the new state movement in New South Wales, being particularly identified withthe New England movement, and in that connexion I have always advocated that there should be a clear line of demarcation between the functions of Commonwealth and State governments. The Constitution does not recognize the existence of provinces, but only that of States. Our idea is that new self-governing areas should be set up possessing certain limited and defined powers, leaving all other powers to this Parliament. In that way overlapping would be done away with, and government would be more efficient and less costly. These matters are, of course, too big to go into fully now, but I put the suggestions forward as worthy of serious consideration. An amendment of the Constitution would be necessary to put them into effect, but they should be kept in view so that appropriate action might be taken when the opportunity occurs to place them before the people by way of referendum for acceptance or rejection.

I suggest, further, to the Treasurer that he might consider the advisability of raising revenue by means of government monopolies. Certain European countries have been able to derive large revenues from a match monopoly. I am convinced that if the output of the Australian match factories were taken over by the Government, and. a small additional impost placed on the product, one which the average match user would never feel, the Treasurer would reap a large amount of revenue. In France and Italy this method of revenue raising has been found to be particularly effective. As a general principle I am against government control of business. The Government, I believe, should make the rules of the game, but not play in it itself. There are, however, a few particular lines of business which lend themselves to government monopoly, and which would prove a source of steady income.

Mr Lewis:

– Is not the same thing being done through the sales tax?

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– No; that is a totally different thing.

This plan which we are considering does not go nearly far enough. It deals with only one phase, namely, government finance, and nothing verymuch can be achieved until something is done to solve the problem of unemployment. We cannot hope for the rehabilitation of our finances until we get our population at work again. Although the plan does not go so far as it could, I intend to vote for it, except that part which deals with soldiers’ pensions. I trust that the committee, which is to deal with that subject, will be able to bring in recommendations which will meet my objections. Ever since the war I have fought for certain principles in regard to pensions, and I stand foursquare for no reduction of the pensions to which disabled soldiers are entitled. I do not intend now to go back on the principles which I have consistently advocated. With this reservation, I propose to vote for the plan, inadequate though it may be. I hope that, at a later stage, a complete plan for the rehabilitation of our finances will be submitted to us.

Mr MARTENS:
Herbert

.- The honorable member who has just concluded his speech said that old-age pensions were in a different category from soldiers’ pensions, and that the country was under no obligation, except a. ]]101’a one, to pay them. I agree that this Parliament has a right to reduce or increase old-age pensions, but it is laid down in an act of Parliament that a pension shall be paid under certain conditions to all persons who have arrived at a specified age, or who are so invalided as to be unable to work. To that extent there is an obligation on the Commonwealth of a mandatory character. A previous speaker declared that any one who opposed this plan was seeking to follow the easy way. I have never been concerned about seeking the easy way, and I do not see that it is easy to oppose this plan, as I intend to oppose it, lock, stock, and barrel. I oppose the loan conversion proposal because it is intended to have the bonds converted for a definite term of years at a definite rate of interest. That, I believe, is wrong in principle. I do not regard myself as a repudiationist, but I have never agreed that one generation has the right to bind a succeeding generation. It is not right that we should allow these bonds to be converted for a definite period of 30 years at a fixed rate. There is no one in this House who can say that we have yet reached the limit in the process of deflation. The time may come when it will be just as difficult to pay bondholders 4 per cent, as it is now to pay them 5£ per cent, or 6 per cent. I do not object to the reduction of interest, but under this scheme the people will have a right to say whether or not they will accept the terms of conversion. Who are these bondholders who, we were told, have telegraphed their willingness to convert their bonds and accept, a reduced rate of interest? This afternoon the honorable member for Lilley (Mr. Mackay) made an attack upon the honorable member for Werriwa (Mr. Lazzarini) for the attitude he had taken up, and said that it would be the small bondholders who would be affected by reduced interest, and not the wealthy investors. As a matter of fact, the majority of the governmental bonds are held by wealthy people, not only in this country, but in every country. Most of the interest paid is drawn by them.

Mr Mackay:

– Tens of thousands of small investors have put their money into Commonwealth bonds.

Mr MARTENS:

– I know, but I propose to deal with this subject in my own way. At the Premiers Conference in Melbourne the Premier of New South Wales read a list of the holders of tax-free bonds in New South Wales. These are the persons whose interests are so stoutly defended by honorable members in this House, and by certain sections outside it. I do not blame them for that; they are only doing their job. A list of these poor, unfortunate bondholders was, as I have said, placed before the conference by the Premier of New South Wales. Among those who agreed to convert were Anthony Hordern and Sons Limited; who held bonds to the value of ?300,000, and the Performing Rights Association, the directors of which had consented to convert the association’s holding of ?10,000 in bonds, from 51/4 per cent, to 4 per cent. I suggest that these parties would not lose very much by the conversion. They would lose a fair amount of money, it is true, but the loss would not involve them in the sacrifice of any of their worldly comforts. The press report of the conference proceedings states -

Approving of the offer of Horderns Mr. Lang said what Horderns were prepared to do, others should be prepared to do. “ We have Sir Alexander MacCormick, with his ?176,500,” said Mr. Lang. “Is he a poor person whom we should help? Then there is Thomas Buckland with ?141,000, and Sir Norman Kater, with ?42,000. These are the people to whom it is proposed to give concessions. “ Then there are the Cohens and the Levys with their ?42.000; Ormond Charles Smith, with his ?109.000; Jessie Love, with ?17.000; Bennett, with ?67,000.”

Mr White:

– How much do the trade unions hold?

Mr MARTENS:

– The honorable member can go into that. That will be his job. Mr. Lang went on to say - “ There are the Nialls and the Halls, with their ?180,000; Ralph Lester Smith, with ?129,000; F. C. Futter, with ?52,000; W. S. Futter. with ?45,000; David Edward Lewis, with ?198,000; G. B. Vickery, with ?169,000; Amy Vickcrv, with ?53.000; Austin Howard Smith, with” ?20,000.

I do not know where Mr. Lang got these figures from, but he says they are correct. Mr. Lang continued - “ So I could go on through the list. There are the McIl wraiths, with ?58,000; Sir J. Bonython, with ?332,285; the Hayes family, with ?115,000, and Conniber, with ?64,900: Fairbanks, with ?28,900; and the Frasers and Stephens, and Knoxs, with ?340,631 - all poor people in New South Wales!

According to the press reports there was a great argument at the conference on this point, and objection was taken by certain sections to the proposed conversion on the ground that the subscribers to these loans had put in their money on the solemn promise that the income they received from the loans would be taxfree. They regard it as an awful crime that any reduction should be made in the interest received. Mr. Lang’s statement proceeded - “Further on in the list there is Rebecca Smith Hill, who has ?39,000. There is also Laura Marie Hill, who is fairly poor, having ?43.326. There is Saunders, with ?100,000; McPhillamy, with ?50,000. “Dryhurst and Darker have ?55,000. We also have a nice young man, named Watt, who has only ?91,991; Mr. Brown has ?63,000; Falkiners, ?60,000; Rymill, ?54,000; T. H. Payne, ?48,000, and another Payne, ?50,000. “ These are the people it is proposed to let go free.

Mr Theodore:

– Are all those tax-free investments?

Mr. Lang Yes?

The New South Wales Premier mentioned that in New South Wales the lowest amount of money in tax-free loans held by persons, was in a group of 1.300 people, who had among them ?6,250,000.

Mr. Lang. Yes!

The highest income in the list is more than ?12,000 a year, and the lowest ?685, while the average income of the 1,300 subscribers is, approximately, ?4,171 10s. We have been told that the plan provides for equality of sacrifice. Is there any person whose name appears in the list

I have read who is making an equal sacrifice with the old-age pensioner who is to lose 2s. 6d. a week? The honorable member who has just resumed his seat said that the cost of living had fallen, but the old-age pensioners have never been able to live decently, even on a pound a week. I have lived among them, and know the conditions under which they exist. In the district from which I come some of these pensioners are living on the beaches in little, comfortless cubbies because they cannot afford to pay for anything else. There is not much grandeur about that. I know of others who are living in rooms of a kind for which they pay 3s. or 4s. a week. Will not the 2s. 6d. per week mean a great deal more to these people than the £685 per annum to Miss Jessie Love? I realize that this lady will lose £200 per annum of her income; but she will still be a great deal better off than the old-age pensioners. I am very doubtful if she has performed any more useful function in this country than our old-age pensioners. Doubtless, they have all served according to their ability. No more solemn obligation rests upon the Commonwealth Government than to provide for the care of the old-age and invalid pensioners.

It is suggested that there should be equality of sacrifice, an.d that the reduction in the allowances of honorable, members will involve them in am equality of sacrifice. That is not so. The honorable member for Brisbane (Mr. D. Cameron) and some other honorable members who represent metropolitan constituencies are in a far better position than honorable members who, like myself, represent large areas in remote parts of the Commonwealth. There is no equality of sacrifice in this connexion. It is stupid to say that all honorable members should be on the same allowance. The Moore Government, in Queensland, was the first in Australia to attempt to remedy this anomaly. It reduced the allowance to members of the State Parliament to a flat rate of £500, and then tried to secure equality of sacrifice by arranging zone allowances for various electorates up to approximately £200 a year. The honorable member for Kennedy (Mr. Riordan) knows what happened in this connexion. It would be wise, in my opinion, to make an allowance in accordance with the nature of an honorable member’s constituency. In any “case, these reductions will not make any material difference in the position of the country.

It is proposed, also, to make a reduction in soldier pensions. I will not stand for that. These men are not getting any more than they deserve. Some of them are not getting anything like what they were promised by the party opposite and their supporters outside of Parliament. The men of Australia were told that, if they enlisted, they would be given everything on God’s earth; and they have been given everything except the right to live as men. They were promised that they would be given jobs; but thousands of them are out of work to-day.

Mr MARTENS:

– Unfortunately, it is true ; but if the party to which the honorable member belongs had been in power those men, and more, would have been sacked twelve months earlier. All that honorable members opposite are waiting for is an opportunity to put a government of their own members on thetreasury benches. If such a government came into office every returned soldier who could be regarded as a surplus officer in the Public- Service would be dismissed.

Think for a moment of the plight of the limbless ex-soldiers. The honorable member for Richmond (Mr. R. Green) asked whether any honorable member would be prepared to sacrifice a leg or an arm for a pension of £2 a week. He knew very well that only accident or misfortune could possibly reconcile a person to such a loss. No person either in this House or outside of it would take an unnecessary risk of losing a limb, yet the limbless ex-soldiers are to lose 20 per cent, of their pensions, and to receive no recompense in return. Can it be suggested that the sacrifice of these persons should be even compared with the sacrifice made by a person who holds £320,000 worth of tax-free bonds, from which is derived an income of a miserable £12,000 per annum? Crippled and limbless soldiers are to suffer this reduction in order that budgets may be balanced ; but we should. not talk about equality of sacrifice when we refer to them. I shall not stand for this kind of thing.

Another section of people which will be called upon to suffer is the tubercular soldiers. These men have had many years taken off their expectation of life. Their days will be shortened materially because of the fact that they contracted tuberculosis through their war service. Can it be suggested, in these circumstances, that there is an equality in sacrifice in reducing their pensions? In my opinion, it is the cruellest thing imaginable to reduce their income in this way. No doubt the financial position is bad, but it will not be materially improved by reducing these pensions.

We are told that the only alternative to this plan is default about the middle of next month. One would think that this is the only country in the world which is in financial difficulty. Unfortunately, this is not the case. Many other countries are in the same plight a3 Australia, because of the actions of people who advocated war but refused ‘ to take an active part in it. It is proposed that the old-age and invalid pension of £1 a week should be reduced by 12^ per cent. The honorable member for Gippsland(Mr. Paterson) said that he would reduce it by 30 per cent, or 40 per cent, if necessary. There are many aged men and women in homes in different parts of Australia who are paid an allowance of 5s. 6d. a week out of their pension in order that they may obtain little perquisites, in addition to what is provided for them in the homes where they live. Is that allowance also to be reduced by 20 per cent.? I will not stand for that. I shall vote against the whole proposal to reduce pensions.

I shall also vote against the proposed conversion loan for the reason that the people who have invested their money should, not be allowed to do with it what * they like. These people would have had neither principal nor interest if the central powers had won the war. They would not be able, to-day, to draw an income from their investments in Commonwealth bonds, or from property if the central powers had gained control of the allied countries. Their position would have been very different in every respect had the war resulted differently.

It is suggested that a reduction of Public Service salaries and wages is long overdue. That may be so, but I for one will not stand for Parliament either reducing or increasing wages, because I do not think that it is the function of Parliament to interfere with wage standards. It is true that this Parliament has retained the power to control the wages of a certain number of public servants over whom it has authority, but, in a general way, the fixation of wages should be done by the authorities which Parliament has set up for that purpose. Our arbitration courts are far better fitted than this Parliament to deal with matters of that kind, for they can investigate, dispassionately, all claims that are made. In a court facts can be adduced, and consideration given to evidence which could not possibly be placed before Parliament. In my opinion, there is no justification for this proposal.

Some honorable members appear to have overlooked the fact that if wages, salaries and old-age, invalid and soldier pensions are reduced, there must necessarily be much less money in circulation than there is now. Can. this possibly make for progress or for the stabilization of conditions in the Commonwealth ? We all know that work has been rationed in many shops in the cities. Why has that been necessary? It is due to the fact that the workers, who have been responsible for keeping full staffs in employment, and for providing a market for primary production, are in the unfortunate position of having less income than formerly, and so a reduced spending power. The result of this has been that many shop assistants have been rationed and many more dismissed. The same thing is true in regard to our railway services in Australia. The fact that there has been a reduced demand for primary products and, in some cases, a reduced production, has meant that there has been a smaller quantity of freight to handle on the railways and at the waterside, and elsewhere. And so the vicious circle is continued to the detriment of everybody. If less money is available for circulation, there must necessarily be less employment. That will mean a continuation and an extension of the existing depression. It is the same in every country on God’s earth.

Even during this debate the experiences of a number of other countries has been quoted. Not very ]ong ago honorable members opposite told us that we should follow the example of New Zealand which we were assured was a most prosperous country. But what is the position of that country to-day? Within the last few hours almost we have read in our newspapers that the government of New Zealand floated a loan which was so poorly supported that 6S per cent, of it was left in the hands of the underwriters. Why was that? We know that to-day there is an enormous aggregation of gold in America. Yet there are 10,000,000 unemployed persons in that country, and Congress, as well as the governments of -the various States, does not know what to do in order to meet the position. It can not be expected, nor is it expected by these governments, that the people will remain quiescent to the point of starvation.

The honorable member for Richmond (Mr. R. Green) told us just now that on account of certain international financial re-arrangements that are in contemplation, we may lose a considerable amount of reparations money due from Germany. It is well known that Germany has had to pay huge sums in reparations. In my opinion, it would have been a good thing had there been no provision for reparation payments, for they have only meant the exportation of manufactured goods from Germany. Large quantities of these goods have been sent to every part of the world. Some have been sent to England where they have been labelled, “ Made in England “, and then sent out to Australia and elsewhere as British manufactures. These goods have been made by a kind of forced labour to which Germany has had to resort in order to meet the international obligations imposed upon her after the war. There was a suggestion that Germany might repudiate her obligations. It has been said, quite seriously in the last day or two by the very nation which, with the great allied powers, was responsible for putting Germany into her present position, that she would not be able to carry on unless relief was granted to her.

In the last two or three days, we read in the press of the action of the Bank of England in coming to the aid of Austria, one of the countries which was ranged against the Allies in the Great War. The Austrians murdered with bayonets, rifles, and guns every soldier of the Allies who came within their range, yet the Austrians have been helped by the Bank of England to the extent of over £4,000,000. It was said that this was necessary to stabilize the finances of Austria. No trouble was experienced by Austria in getting this money. But when we seek help from the “ money bugs “ of Great Britain who hold us in bondage, we are told that we must balance our budget and show a genuine desire to be honest. These people are willing to trust the Austrians who are now regarded as good folk, although a few years ago they were so damnably bad that their name could scarcely be mentioned. But the financial position of Austria became so bad that unless an alteration had been effected the industry of the nation must have collapsed. The Britishers who had invested millions of money in Austria, from which they had drawn huge dividends, were not prepared to stand by and risk the smashing up of the whole economic fabric of the nation, so they made more money available to prevent a smash. I believe that if we had come to the same point in Australia these people would have felt that they had too much at stake to allow a collapse in this country. But in our case they said that we must reduce our expenditure on pensions and on the Public Service, and lower our wage standards generally before they would help us.

Queensland provides us with a good illustration of what is happening to-day. A few years ago, when Labour was in power in that State, the average rate of wages was the highest, and the average working hours the shortest in Australia, and the cost of wealth production, taking £100 as the unit, was also the lowest. To-day wages in Queensland are the second lowest in the Commonwealth, being only about 4d. per day higher than in Tasmania. Soup kitchens have been opened in certain parts of my constituency - a thing unheard of before in our history. This has been necessary, because of the deflation policy pursued by the Moore Government in that State, in its efforts to balance its budgets. The wages of the railway men in some towns in my electorate have been reduced seriously. This is particularly the case in Townsville and Cairns whore some men are working only two or two and a half days per week. Notwithstanding the reductions that have been effected, railways are being constructed in Queensland under a relief scheme and at relief rates. It is argued that this is necessary in order to provide work for the unemployed. During the last Queensland election campaign the present Premier promised that £2,000,000 would be made available and 10,000 jobs found for the workers. That promise was not fulfilled. There is to-day more unemployment in Queensland than there has been at this period of the year for the last twenty years.

We are being told that if we show a real desire to mend our ways everything will be all right and money will be released by the banks. I refuse to believe that any money will be released unless the banks are allowed to dictate how it shall be spent, and the rates of wages which will be paid to the workers. In my opinion the banks have dictated the most obnoxious features of this plan. The Prime Minister (Mr. Scullin) and the Treasurer (Mr. Theodore) worked hard and faithfully in Melbourne for three weeks to hammer into the heads of some of the bankers certain ideas that are included in this plan. I do not believe, as some honorable members on this side., have said, that the members of the Government have joined the Opposition. In my opinion, they regard the Opposition as they have always regarded it. They realize that it is diametrically opposed to everything that is put forward in the interests of the workers. I refer, of course, to the majority of the members of the present Opposition. I do not count those who have recently joined it. The Opposition is just as diametrically opposed to the worker to-day as it has ever been. In my opinion, the Prime Minister and Treasurer adopted this plan only because they believed that the alternative was default about the middle of next month. They considered that this was the best thing that they could do. No one will ever make me believe that the Prime Minister and Treasurer have lost their regard for the workers and for our old-age and invalid pensioners. That, to my way of thinking, is a foolish suggestion. I fail to understand how any one who has followed the careers of these two honorable gentlemen could possibly think for a moment that they have thrown overboard, without even a struggle, the things for which they have fought for a lifetime. We all know what the Prime Minister has done for the workers. The present Treasurer was, for a number of years, Premier of the State from which I come, and he did a great deal for the workers up there. He would do the same for the workers of Australia if he had the opportunity to do so.

It has been suggested by honorable members opposite that we should go to the country. Personally, I am quite ready to do so. I do not think that honorable members opposite would get as much out of such an appeal as they think they would get. Three months after I entered this Parliament I said that I was prepared to go to the people and accept their verdict, and I am still willing to do so. If the people of Australia declared their approval of this plan, the Government would be entitled to carry it into operation. However, I do not believe that they would.

Honorable members on this side are often twitted about their views upon the use of machinery in industry. It is said that we want to go back to “ the good old days,” when the use of machinery was practically unknown. I contend that most of the industrial hardship and trouble of the present day is attributable to the use of modern machinery. It now takes a comparatively small number of people to produce an output which, years ago, occupied the labour of a great number. Those interested in the sugar industry will be watching very carefully the test in Lousiana of a sugarcane harvesting machine, invented by a man named Falkiner, a Victorian, who has been endeavouring to perfect his invention for about 28 years. It proved very successful in recent tests, cutting 20 tons of cane an hour, which is equivalent to 160 tons of cane in a day of eight hours. As it takes Jive good men to cut 20 tons of sugar-cane in an hour, it will he seen ‘that the use of such a machine for eight hours represents the full working power of 40 men. It takes only three men to operate the harvester. It is unquestioned that the introduction of uptodate and efficient machinery in our sugar mills has displaced a great number of men, and that in the aggregate, the use of machinery throughout the world has dispossessed millions of the right to work. Every person who is displaced from industry becomes an expense on the community.

If carried into effect this economy plan will necessitate the payment of additional money to our unemployed in the form of doles. I object to that practice. I believe that human beings should not be subjected to the indignity of receiving doles. The custom has a demoralizing effect, particularly on the young. I. know of nothing more degrading than men and women having to go to an official, police or otherwise, and accept their portion of the charity that is being distributed. Does the prospective increase in the dole to unemployed suggest an improvement in employment conditions in Australia? It means the very opposite. There are worse years ahead of us, and there will be much greater unemployment than there is at present. Yet the bondholders, whose wealth is represented by the great aggregation of money that is to be converted, will collect their 4 per cent, interest, irrespective of howdesperate things become in the future. They are also to be relieved of any possible fresh taxation. That, again, I object to. I contend that this Parliament has no right to tie the hands of future legislators, and cause them to say, “ This is a solemn contract entered into by our predecessors, and it cannot be violated.” I have always stood strongly against that principle. I walked 24 miles to vote against the enabling bill to bring about federation. That was not because I was against federation. I was anxious for a unification that would bring about the abolition of State Parliaments, and make unnecessary the thousands of costly duplications that existed, and that have not been abolished. I took that stand because I objected to the inauguration of that reprehensible thing known as the Constitution. The statute lav.-3 of the country should suffice for a constitution. Generations yet unborn should have the right to determine the form of constitution under which they will live. The present system makes that almost impossible, for it is out of the question to secure unanimity in this House as to the manner in which our Constitution should be altered.

It is most amusing to me to hear the honorable member for “Wimmera (Mr. Stewart) and others suggest the establishment of a non-party government. In every aggregation of human beings, whether inside this House or out of it, there will be factions. The moment that the ideas of men conflict, friendships are forgotten, and parties are established. That always has been, and aways will be, a peculiarity of mankind. The idea of a non-party government is impracticable, and it cannot cope with the present situation.

I have here an interesting book called The Stock Market Crash . and After. It is written by Irving Fisher, Professor of Economics at Yale University. Dealing with the subject that is engaging our attention, Professor Fisher writes -

It was but natural to expect that so stupendous a crash, with a reduction in listed values of 26,000,000,000 of dollars, would deal a tremendous blow to business. But businesswas more seared than hurt. By convocation of the President, and under the auspices of the United States Chamber of Commerce, 400 leading business men set up in Washington, 5th December, 1029, a committee of 72 “’ key “ men called the National Business Advisory Council. This committee set about devising means for a continuing organization to stabilize business. At its meeting President Hoover defined three possible lines of emergency action. The first step. Mr. Hoover said, was to recover business confidence by the powerful aid of the federal reserve system and the strong position of the banks. These were working steadily to diminish interest rates. Money released by the deflation of securities would thus be returned into business. The President noted the effect of this action in making money more abundant in all parts of the country and in strengthening the bond market, id which public issues that had been postponed were beginning to appear. The second step va3 taken by the President himself. Through personal interviews and public conferences with leading employers he sought to set standards whereby, so far as they were concerned, there would be no movement to reduce wages. Corresponding assurance was obtained from the leaders of organized labour that they would help allay conflicts in full co-operation with employers avoiding all issues that involved wage increases. By this cooperation between capital and labour, continuity in consumer’s purchasing power was assured, with the removal of fear of general unemployment. This would not, of course, increase consumers’ purchasing power, except to some extent through possible changes in distribution of products among workers, managers, enterprises and capitalists. The point was that purchasing power would be kept from decreasing through any serious stoppage of the wheels of industry.

I have heard President Hoover quoted by honorable members opposite as a great authority. He is the gentleman who says that a reduction of wages could not occur under worse circumstances than those which now confront us. Yet a reduction of wages is the very step that honorable members opposite advocate as a cure-all for our economic ills.

Reverting to the subject of industrial machinery, I find the following interesting paragraph at page 131 of the same work : -

A whole group of companies are exploiting inventions for the supremely important purpose of. increasing power and effecting mergeas on the basis of economies achieved through these inventions. Martin J. Insull, the Chicago power magnate,, states that as a consequence of the added power which invention has contributed to industry, the 45,500,000 workers in the United” States have achieved an output equivalent to fj-om- 000,000,000 to 900,000,000 workers before the power era.

Because of the advent of machinery in industry, there has been an enormous increase in output. I believe that there will have to be a complete re-organization in industry, involving a reduction of the working hours of our industrialists, and. the giving ‘to- them of a greater amount of the- world’s goods for the fewer hours worked. It is a stupid theory to reduce wages in the hope of establishing better conditions in industry.

By way of interjection this afternoon, the honorable member for Angas (Mr. Gabb) said that this Government’s cure for the present trouble was the introduction of a fiduciary currencyissue, and he asked whether. I would champion that plan on the hustings. He need not worry- on that score. I have advocated that proposition both in. this chamber and outside, including my electorate, and I have not lost any friends by doing so. I have not sponsored the theory because of political reasons, but because I believe that it is the best method to overcome our difficulties. If I had the time available, I could quote many eminent economic authorities who support the theory; highly qualified men from our universities and elsewhere. The Parliamentary Library contains a fund of information on the subject which is worthy of reference. These- people are not politicians seeking the suffrage of the people, hut men who are endeavouring to find a way out of the economic tangle in which we find ourselves.

There is another way out, but it cannot be given immediate effect to. ‘In 1919 I delivered what is termed a “ pleasant Sunday afternoon address “ at Wallaville, in my electorate, in which I stated that, if we were to effect economic stabilization, there would, sooner orlater, have to be a huge writing-down of international debt. Now everything ispointing to that coming about. Two orthree days ago there appeared in the press a statement made by a Bank of England co-director of Sir Otto. Niemeyer, in which he said that it was. apparently inevitable that at least partial repudiation would take place unless, by agreement, the nations came to some understanding to write off a proportion of existing international debts. In Coghlin’s Seven Colonies, published in 1891, the author pointed out that Australia had then- repaid in interest more than it had originally borrowed, and we are still paying increased’ interest rates on some if not all of that money. The position is far worse to-day. Yet immediately a person suggests that there should: be a reduction in the rate of interest he is stigmatized as a repudiationist. Time has created responsibilities, and governments have to accept them. There was no difficulty in obtaining money to carry on the war, even though rates of interest were high. I venture to say that if the Prime Minister or the honorable member for Wilmot (Mr-. Lyons) were Prime Minister and another waa; broke out in. which Australia was involved, millions of money would be forthcoming to prosecute it and destroy life. We hear much talk about “our country”. The average Australian does not possess a stake in “ our country “. It wa3 leased and sold to the British bondholders long before most of us were born. When the present Federal Treasurer (Mr. Theodore) was Treasurer of Queensland he was taxed with introducing a “repudiation” measure, and eventually had to back down because of the pressure exerted by the “ moneybugs “ of Great Britain. The policy of our States and the Commonwealth is dictated, not by the people of Australia, but by the moneyed interests of the Old Country, who had, long before I was born, acquired great pastoral leases in Australia, not in person, but by sending representatives to negotiate with our governments for huge tracts of country for pastoral purposes. They have drawn large revenues from it continuously without spending 2s. in it. It is time that they were asked to disgorge. This economy plan of the Government makes no reference to reducing the rates of interest of overseas investors, who have holdings in Australia. It is claimed that our Governments have entered into a solemn compact with them which cannot be violated; that their revenue and interest must be paid in Great Britain. If I had my way it would be paid here. We are told that we must meet those obligations. Unfortunately, there has been a catastrophic fall overseas in prices for our surplus primary products, so for the immediate present we must depend, to some extent at least, upon the export of gold bullion, and if the productive capacity of our export industries is impaired over a series of years we shall be quite unable to meet our commitments iu Great Britain’ and elsewhere.

I shall not occupy the time of the House further. I state emphatically that I am unable to cast my vote for any of these emergency measures. I consider it wrong to reduce arbitrarily the interest rate on Government loans to a level of 4 per cent, and, for a period of 30 years, to provide that such securities shall not be subject to further taxation. It is wrong to tie the hands of future generations, who might be in the unfortunate position that we find ourselves to-day, and be obliged to vary the contract, as is being done under this agreement. I deny that an arrangement such as that is repudiation. In every walk of life, if a man is unable to pay his debts he calls a meeting of his creditors to make the best terms possible. That is not repudiation. If he cannot obtain ‘ relief in this way he is obliged to declare himself bankrupt. If that is the alternative to the proposals before the House, I consider it the lesser of two evils.

Mr FENTON:
Maribyrnong

.- At this late hour it is not my intention to occupy the attention of the House for any length of time. I purpose confining my remarks strictly to the measure before the House, reserving to myself the right to criticize freely other bills which, we are informed, will be considered later. If any credit is to be given to the authors of the scheme that is embodied in the bill, it is due to the sub-committee of the conference, comprising Mr. J. P. Jones, the Victorian Minister for Works, Mr. Hill, the Premier of South Australia, and Sir James Mitchell, the Premier of Western Australia, in association with the committee of Treasury officials and experts which submitted a report to the conference. This sub-committee was appointed on the motion of Mr. J. P. Jones at the meeting of the Loan Council in April. The recommendations of the committee, of which Mr. Jones was chairman, forms the basis of the present scheme, and, instead of appearing as an appendix to the report, should appear as a preface, because it is the genesis of the present plan for the financial and economic rehabilitation of the Commonwealth.

With other honorable members, I regret very much that the financial situation is such as to necessitate the formulation of a general plan which, in its operation, must necessarily press heavily upon a considerable number of people. The honorable member for Herbert (Mr. Martens), who has just resumed his seat, made a number of uncomplimentary references to subscribers to Commonwealth loans from time to time. I do not hold a brief for the wealthier sections of our people, because they are well able to defend themselves. If, as has been alleged, any of them aro escaping taxation, the sooner that the tax-gatherer is put upon thentracks and the money owing is collected from them, the better. But I do consider it necessary to say something in defence of the small investors who, as the records show, have subscribed heavily to all Commonwealth loans. When the former Acting Treasurer (Mr. Lyons), in December last, made an appeal to the people for a conversion loan, there was a magnificent response, the loan being over-subscribed. I wish to place on record certain information showing how Commonwealth securities are held in Australia. For this purpose I extract the following from the Treasury statement which accompanied the appeal to the people, made by me in December, in connexion with the last loan : -

It waa highly desirable that the people of Australia should realize that the huge amount of Commonwealth and State loans was not held by a few people, but represented, in the main, the savings of the working classes. Trade unions and the rank and file of the workers, have invested largely in Commonwealth loans. The outstanding securities in Australia of the Governments and the municipal authorities totalled £080,000,000. Of this amount £144,000,000 belonged to the savings banks. These institutions held the savings of over 5,000.000 depositors, and of those savings £144,000,000 was in Government and municipal securities. There were over 2,400,000 life insurance policies in force in Australia, and the companies responsible for the payment of these policies when they matured had invested £71,000,000 of the moneys of the policy-holders in Government and municipal securities. The Commonwealth Bank held over £33.000,000 of these securities. The friendly societies of Australia had nearly 000,000 members and funds totalling £13,000,000. The great bulk of this money was also invested in Government and municipal securities.

Taking only these four sets of institutions, it was found that over £250,000,000 of our loans was held by institutions whose funds had been provided over a long period of years, as tho result of the saving and thrift of the working people of Australia. In addition to this £250,000,000 held in trust for the people by these institutions, it was estimated that small subscribers were the direct owners of between £150,000,000 and £200,000,000 of Government securities. The success of loan operations in Australia had always depended on the support of the small subscribers. In war time over 833,000 people contributed to war loans, and many tens of thousands of subscriptions were for sums as low as £10.

Taking more recent figures, it was found that, in the loans floated during the present year, there were 90,500 subscribers. Of these 70,000 persons made investments ranging between £10 and £500, and, in addition, £7,500,000 were subscribed out of the savings of the people, held by life-insurance societies and other institutions. Of the total number of subscribers in the present year, 34,000, or more than one-third, were depositors in savings banks. Altogether the 5,000,000 savings-bank depositors had accumulated savings in these institutions of £210,000,000, whilst in the life insurance and industrial assurance societies the total value of the policies was £340,000,000. These figures conclusively proved that the maintenance of the national credit of Australia was a matter of vital and direct concern to every member of the community. Nearly all the great institutions mentioned were constituted under act of Parliament. Federal and State.

As the figures, which I have just quoted, were supplied by the Treasury officials, they are authentic. I have also ascertained from the same source that of the £580,000,000 of governmental and municipal securities held in Australia, the joint stock banks hold only £24,000,000 worth, leaving approximately £460,000,000, which was contributed by institutions holding money on behalf of the rank and file of the community. The average of each bondholder is about £1,000.

Mr Lazzarini:

– - That is a joke.

Mr FENTON:

– I challenge the honorable member for Werriwa (Mr. Lazzarini) to show where these figures, which have been obtained from an official source, are inaccurate.

Mr Yates:

– The honorable member should quote the figures submitted at the recent conference by Mr. Lang.

Mr FENTON:

– -I have already said that I hold no brief for the wealthy of this country, and that if they are evading their just dues in the matter of taxation the sooner they are compelled to contribute their share, the better for the community.

Mr Morgan:

– The honorable member quoted the same figures when he was on the other side of the House.

Mr FENTON:

– Yes, I supplied similar information to the press during the flotation of the last conversion loan.

Mr Curtin:

– Does the honorable member mean that the poor of this country are the real patriots?

Mr FENTON:

– I think that the poor people of any country are more patriotic than the rich. It was originally intended that the last conversion loan would be for £27,000,000, but as the Premier of New South Wales (Mr. Lang), who attended the meeting, of the Loan Council, said that the State which he represents required £1,000,000, the total amount of the loan was increased to £28,000,000 in response to Mr. Lang’s request,, and in four weeks over £30,000,000 was subscribed by 120,000 different subscribers, which averages about £250 each. One life assurance company, the- National Mutual- Life, contributed £1,500,000. When such a large subscription is made by one company, and other large subscriptions are also reckoned, it is easy to realize the extent to which the money of the workers of this: community have assisted the country.

Mr Riordan:

– What is the honorable member endeavouring to prove?

Mr FENTON:

– The honorable member for Herbert (Mr. Martens) said that the wealthy bondholders are- escaping taxation,, and that they hold the bulk of loan money,, and I am showing that the greater part of the last loan was contributed by institutions and people representing the poorer’ section of the community. Apart from granting annual bonuses to policy-holders-, no less than. £34,.000,000 of the funds of insurance companies have been used for land settlement purposes, and in making advances to policy-holders to tide them over temporary financial difficulties, or to assist them in business. At Heyfield, in the electorate represented by the honorable member for Gippsland (Mr. Paterson), the money required for carrying out a splendid and profitable subdivision was provided principally by the National Mutual Life Insurance Company, and’ it resulted in considerable settlement, which largely maintains the town of Heyfield. When the Treasurer was considering taxing interest to the extent of 3s. 6d. in the £1, the representatives of the friendly societies in Australia informed him that if they were taxed to that extent it would be impossible to assist a number of the old people, who were members of lodges. In view of the representations then made the Treasurer. felt, it necessary to reconsider the proposals he had in view. The amounts contributed to governmental loans by different authorities are as follow: -

In my judgment those figures furnish conclusive proof of the fact that the bulk of those who- have invested in Commonwealth loans in Australia belong to institutions that fairly represent the workers of this country. The other day I met the general manger of a firm which has £500,000 invested in Commonwealth, stock. He said to me, “ We are prepared to convert immediately to a 4 per cent, loan.” The Prime- Minister only the other’ day read a letter that he had: received from the Theatrical Employees Union, expressing its intention to convert its holding of between £300 and £400: An. illustration ©f what many unions affiedoing to-day towards the relief of unemployment is furnished by my union, which, during the last fifteen months, has; made available £15,00.0 for this purpose:. I presume that the New South Wales branch of the union has paid out a similar sum making- a total of £30,00.0.. The Victorian branch of the Printers Union has practically always held1 government stock. In the old days,., when I was on the Board of Management, all. its spare cash was invested in- Victorian bonds. That was prior to federation. Last year, unfortunately, that union had to dispose of £2,000 worth of bonds so as to obtain funds with which to- provide assistance for those of- its members who were- out of work. I believe that it still holds some Commonwealth stock ; but it is not unlikely that that also will have to be turned into ready cash so as to provide for those who are out of work. It will, therefore, be seen that some good is done to the working class, even by the lending and borrowing of’ money.

Mr Yates:

– Is the honorable memberin favour of the plan ?

Mr FENTON:

– I say now, and I shall not hesitate to say it from the platforms of this country, that for the most part I am favorable to the plan. It has been said that the Government would accept nothing but a complete plan. I know that members of the Government accepted a plan, that was not quite complete, but which contained quite a number of the propositions that are features of this plan. Had it been put into operation the reduction involved would have been not 20 per cent, as in this plan, but 10 per cent, as was then proposed. I honestly believe that had we grasped the nettle eight months ago, apart altogether from the Niemeyer proposition, we would have turned the corner by to-day, and a greater number of men would have been in employment. It can truthfully be said of that plan that “Brennan and Moloney concurred”. Publicly and privately I shall use all the influence that I possess in the direction of making this debt conversion proposal a success. I believe that the lower interest rate, once established, will ramify throughout the community, and that the propositions of which the honorable member for Corangamite (Mr. Crouch) spoke will come within its compass. I am eager to see a reduction of interest. The honorable member for Wilmot (Mr. Lyons) and I fought strenuously for it at every conference. This reduction of interest will affect us in a budgetary sense; but I also look to it to influence the rates charged by bankers and private lenders. A reduction of 1 per cent, with respect to overdrafts and advances throughout Australia would make available millions of pounds that could be utilized by industry in giving employment to our people. I intend to support this conversion plan with all the power at my command, because I believe it will have a good influence upon the community generally. [ reserve to. myself the right to criticize the other measures when they come up for consideration.

Mr Yates:

– You dare not vote against them, because if yon did so you would bc fired.

Mr FENTON:

– Politically, I now have a freer hand than I have had since I entered politics, and I propose to do what I consider is right for the country.

I am glad that honorable members opposite also have a free hand to vote as they think fit upon these’ proposals, without fear of expulsion. That has been given to them by the federal executive of the Australian Labour Party. Their Government may have to look to honorable members who sit on this side to pull it through. The attitude adopted by the federal executive on this occasion is different from that adopted towards other honorable members a few months ago, who were influenced in their votes and actions by a far bigger principle than that now at stake. More will be heard of that in the near future.

I conclude by repeating that I shall support heartily this conversion scheme, reserving to myself the right to criticize and to vote as I think fit upon the measures that are to follow.

Debate (on motion by Mr. Curtin) adjourned.

page 2919

ADJOURNMENT

Supply Bill - Inter-Governmental Debts, Reparations, and Relief Debts

Mr SCULLIN:
Prime Minister · Yarra · ALP

– I move-

That the House do now adjourn.

It is the intention of the Government to bring down to-morrow a supply bill.

Honorable members will have learned from the press of the proposal of President Hoover for the postponement during one year of all payments on account of inter-governmental debts, reparations and relief debts. This proposal is of such far-reaching and vital importance to Australia that it is fitting that I should make a short statement upon it to the House at this juncture. So far, the Commonwealth Government has received only a short cable from the British Government. This cable does not contain the text of President Hoover’s statement, but it indicates briefly the attitude of the British Government towards the proposal. That Government welcomes the striking declaration of President Hoover, supports wholeheartedly the principle of the proposal, and is prepared to co-operate in the elaboration of details with a view to giving practical effect to the proposal without delay.

According to the cables published in the press, President Hoover’s proposal was as follows: -

The American Government proposes the postponement during one year of all payments of inter-governmental debts, reparations, and relief debts, both principal and interest, not including obligations of governments held by private parties.

President Hoover is also reported to have said -

The purpose of this action is to give the forthcoming year to the economic recovery of the world, and help free the recuperative forces already in motion in the United States of America from retarding influences abroad. Congress does not meet until December, but none of the war payments are due until the loth December.

He also expressed the hope -

That by her expression of a desire to assist, America will have contributed to the success of the forthcoming Disarmament Conference, lie added, “ The burden of comprehensive armaments has contributed to bring about this depression.”

As Prime Minister of Australia, I cordially join with the British Government in welcoming these proposals of President Hoover. They are primarily directed to relieving debtor nations, and, in my opinion, represent the first big step towards a solution of the present worldwide economic depression.

Australia is a debtor nation in respect of war indebtedness, its obligations being to the British Government. On the other hand, Australia is entitled to a share of the British Empire reparation receipts from Germany. Australia’s war indebtedness to the Government of the United Kingdom now amounts to £79,700,000. On this debt, Australia has contracted to pay £5,549,000 per annum, of which £3,920,000 represents interest and £1,629,000 is applied in repayment of principal. The British Government recently agreed to suspend for a period of two years the repayment of principal moneys in respect of Australia’s war indebtedness. The repayments are merely suspended; they are not cancelled. This relief was granted before the Hoover proposals were made, and was intended to assist Australia in her present difficulties. With regard to reparations, Australia is entitled this year to approximately £830,000.

As the Hoover plan involves the principle of postponement of intergovernmental debts for the relief of debtornations, Australia is much interested in the details of the proposal, because her obligations in respect of intergovernmental war debts, after allowing for the temporary relief already granted by Great Britain, exceed by £3,090,000 her reparation receipts. The Hoover plan is put forward primarily to assist the economic recovery of the world. It is a plan for relief by creditor nations to debtor nations. Under the plan, Great Britain would be relieved of all her payments to the United States of America during the present year, the total of which is approximately £33,000,000. At the same time, Great Britain would be expected to afford relief to her creditors in respect of all payments due to her on account of inter-governmental war debts and reparations.

Australia, being a debtor to Great Britain in respect of inter-governmental war debts, would thus be entitled for one year to further relief amounting to £3,920,000, but, at the same time, would be required to forgo her share of reparations amounting to £830,000. The net gain to Australia under the plan would be £3,090.000, in addition to the relief already granted. The Commonwealth Government is asking the British Government to furnish full particulars of the Hoover plan at the earliest possible date.

Mr BEASLEY:
West Sydney

– The statement by the Prime Minister (Mr. Scullin) is interesting, particularly in view of the fact that a section of the Labour movement has been demanding some relief with respect to, not only war debts, but also interest payments. While the statement refers to the intentions of Mr. Hoover, who suggests a moratorium for twelve months, it does not convey the real reason behind this war debt moratorium. I suppose this House cannot expect to be told the underlying cause of this action. Although many requests have been made for relief from the burden of interest on the Australian war debt, the people have received little consideration; but when Germany makes such a demand, the matter is viewed in an entirely different light. When German Ministers visited Great

Britain recently, to discuss with the British Prime Minister matters connected with the German war debt, a very critical stage had been reached, because Germany was heading for either a fascist or communist dictatorship. To ease the internal situation of that country, it seems that Great Britain, the United States of America, and other countries are forced to relieve it of its reparation payments.

If Germany is to be compelled to meet the payments arising out of the late war, there will undoubtedly be a serious eruption in that country, and that will see the end of capitalism in that country. I visited Germany in 1926, when the conditions were, apparently, similar to those obtaining at the present time, and E can visualize what is happening there now. The point I wish to make is that the public never have an opportunity of getting behind the scenes, and knowing exactly what causes sudden moves such as that now referred to by the Prime Minister. But it appears that Britain and the United States of America have heeded the rising tide of public opinion in Germany, although the same notice is not taken of it in Australia. European capitalists are prepared to allow the people of Australia to sink to the “ sackcloth and rice “ standards referred to recently by the honorable member for Hunter (Mr. James) before they will render any assistance. But their attitude towards Germany is different. “When the German Ministers were visiting Great Britain, we also heard of representatives of the United States of America being in London. The latter had not returned to their own country more than about 48 hours when this move was made by Mr. Hoover, because delay would have meant the collapse of the present German Government. Of course, this had to come from the United States of America because of the unique position of that country on account of the large sums advanced by it to other countries for the prosecution of the late war. In other words, she is a creditor nation.

The decision of the United States of America in this matter is not due to any love for Great Britain or any other country so far as the workers are concerned. A serious problem has also arisen in the United States of America. There are 6,000,000 unemployed, and much loss of trade has occurred. No doubt, America finds it necessary to do something in order to prevent internal revolt, and a move to establish trade will stem the tide. This can be done only by easing their demands on debtor nations. I do not think that the average member of the public will be hoodwinked over this matter. He will realize that the countries concerned are forced to take this stand, recognizing that unless something is done the whole structure of society will have to undergo a radical change, because the people will refuse to carry the present burden of debt and allow themselves to be reduced to the wretched conditions which some are trying to impose upon them.

Only a couple of weeks ago, we read in the press of an extraordinary plan for the economic reconstruction of Germany. The reports indicate that if the plan is applied fully it will probably cause serious difficulties, and, in fact, revolution in that country. From information that I have received from sources with which I have had contact since my visit to Europe, it seems to me that the countries concerned have been forced into the present decision. Let the men carrying responsibility to-day in the Commonwealth stand up for Australia, as the leaders overseas are advancing the claims of other countries, and let them ask, not for a twelve months’ suspension of interest payments, but for the total cancellation of our war debt. The world can no longer carry these liabilities.

Mr GULLETT:
Henty

.- I listened with interest to the speech of the Prime Minister (Mr. Scullin), but with one of his statements I disagree. The right honorable gentleman said that this demonstration by President Hoover to relieve debtor countries of their intergovernmental debts was the first of its kind that had been made. I am sure that, on reflection, he will recall that the first demonstration of this nature was made by Great Britain, when that country offered to suspend for two years interest payments due by Australia.

Mr Scullin:

– I did not say that it was the first demonstration of its kind, but that it was the first important step toward the lifting of the depression.

Mr GULLETT:

– I am sorry if I misunderstood the right honorable gentleman. I desire to sound one note of warning in relation to the important declaration by the President of the United States of America. Unhappily, there must be unanimity among the creditor nations before effect can be given to his proposal. The press reports indicate that that unanimity is by no means yet assured. “We in Australia should bear that in mind before we count on the relief that would come to us if all these intergovernmental debt’s were postponed for one year. There is, unfortunately, a substantial doubt whether one great creditor nation will fall in with the plan.

I have no wish to enter into a controversy with the honorable member for West Sydney (Mr. Beasley). We differ so fundamentally that I fear that little good would come from any effort I might make to reply to his extraordinary statements. I do say, however, that it is regrettable that, when an announcement of such international importance is made, a prominent member of this Parliament should express the opinion that we are being hoodwinked, and that the United States of America has been forced to adopt the attitude her President has taken up. We should accept this demonstration by President Hoover as an expression of his country’s generosity. Nothing but prejudice against the scheme can come from such a speech as the honorable gentleman has made.

Mr YATES:
Adelaide

– I also listened with great interest to the Prime Minister’s statement. I shall notdeal with the reasons which led to President Hoover making this proposal. That proposal affects Australia so little that wo can do no more than express an opinion as to what it really means to the world. We ought to be able to conduct our affairs in such a manner that it should not be necessary for the Prime Minister to make a statement like that which he has made to-night. Less than twelve months’ ago a suggestion similar to that now made by President Hoover was made in this House, not by a private member, but by a responsible Minister. It wasthen suggested that, in order to get the country out of a difficulty, Australian bondholders should grant a twelve months’ respite in respect of a debt then falling due. That suggestion was made in the belief that the people within the nation should treat their own country as well as nations treat one another. Action taken earlier in the year in regard to loans amounting to £40,000,000 surely was a sufficient guarantee that Australia was able to do what it undertook to do when the bonds were placed on the market. Instead of receiving commendation, those who supported the suggestion then were branded as repudiationists. The Prime Minister fell out with the present Leader of the Opposition (Mr. Lyons) on the question of whether the proposal meant default or repudiation. Whatever word was applied to the proposal, it was regarded by some as an attempt to evade our obligations and to do something dishonorable. When that proposal was made honorable members on this side, myself in particular, were paraded before the electors as repudiationists.

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– There is a considerable difference between a debtor and a creditor.

Mr YATES:

– There is always a difference when an awkward position has to be faced. I claim that the circumstances of the two cases are the same. The suggestion made twelve months ago was not that default should be made in the payment of interest, but that we should not have to convert the loan then falling due. The only difference between that proposal and that now made by President Hoover is that one was internal and the other international.

Mr Gibbons:

– There is this difference

Mr YATES:

– The honorable member who received the greatest publicity in connexion with the plan then proposed is now trying to get out of the difficult position in which he finds himself. I submit that the proposal now made by President Hoover is not different from that made in this House twelve months ago.

Mr GABB:
Angas

– I rise to refute a statement made a few days ago by the Treasurer (Mr. Theodore) when speaking on the Commonwealth Bank Bill (No. 2). I quote from Hansard of the 17th June, page 2735-

Mr STEWART:

– Is Canada drawing upon its gold reserves and altering its currency laws in order to pay its debts overseas?

Mr Theodore:

– Yes.

Mr STEWART:

– Will the Treasurer give the House Borne information on that subject?

Mr THEODORE:
DALLEY, NEW SOUTH WALES · ALP

– I could.

Unfortunately, the Treasurer has a habit of trying, with brazen effrontery, to “ put it over us “.

Mr SPEAKER (Hon Norman Makin:
HINDMARSH, SOUTH AUSTRALIA

– Order! I cannot permit the honorable member to express himself in those terms.

Mr GABB:

– Then let me say that the Treasurer sometimes attempts to bluff honorable members. I take this opportunity to place on record in Hansard a statement which appeared in the Canberra Times of Saturday last, so that the readers of Hansard may have proof that the Treasurer at times makes most inaccurate statements in an attempt to fool the members of this House. The statement reads -

Ottawa, Thursday.

The budget was passed in the House of Commons by a majority of 30 votes. The division was - Ayes 102, Noes 72. TheUnited Farmers sub-amendment advocating the suspension of the provision for the redemption of notes in gold was defeated by a majority of 150 votes.

Out of a voting strength of 174 in the Canadian Parliament, 150 members were opposed to the suspension of the provision for the redemption of notes in gold.

Mr Theodore:

– The only difficulty that arises in connexion with my interjection to the speech of the honorable member for Wimmera (Mr. Stewart) is the honorable member’s stupidity in understanding to what I was referring.

Mr GABB:

– The Treasurer may try to get away with the position in any way that he likes, but his statements are to be found on page 2735 of Hansard. Any one who likes to compare the two statements will find that the Treasurer has now given another instance of his bluff. I could bore holes over and over again into the statements of the Treasurer in regard to the currency of France. Ho then misrepresented the position, and only the gag prevented me from exposing the inaccuracy of his statement. The fact remains that the Treasurer tried to “ put it over “ this House, and failed miserably. On every future occasion that he attempts to bluff this House by making inaccurate statements, I intend to call his bluff.

Mr JAMES:
Hunter

– I wish to draw the attention of the Prime Minister (Mr. Scullin) to the tyrannical treatment which has been meted out to country newspapers by the Postal Department because of the withdrawal of a certain concession which was previously granted to them. The following statement is taken from the Maitland Daily Mercury of the 17 th. June, under the headings, “ Tyrannical ! Postal Department. Breach of Faith “ : -

Give a government department a monopoly, and it becomes a tyrant. The Postal Department is a glaring example.

In the past year or two scores of country newspapers have installed, at great expense, instruments for the recording of telephone messages. These were then transcribed, and used in the ordinary course of news presentation. There was a considerable saving in time and probably a saving in expense, also.

The department gave the scheme its blessing, and made its mechanical staff available to assist with the installation.

Now comes a bombshell in the shape of a letter from the Postmaster-General to the effect that at the end of June this service must cease.

The letter states that the loss in revenue in the telegraphic branch has not been balanced by the increase in the telephone department, and because of this all newspapers must discard the installation made at a cost of nearly £200 each, and revert to the slow, unsatisfactory system of having all their messages telegraphed.

Apart from, the stupidity of such a ruling there is the definite breach of faith with those newspapers which installed recording devices with the full knowledge and approval of the department.

If, as is stated, the Postal Department not only consented to the use of these recording devices, but also made the services of their mechanics available for the installation of the machines, it has committed a breach of faith with the country newspapers. The Postmaster-General (Mr. A. Green) has a one-sided opinion in regard to revenue. He considers that the cessation of the dictaphone service will lead to more revenue, but actually it will lead to less revenue, because many of those who have installed these recording devices will, as a result of the decision of the department, bo forced out of business altogether. Apparently, the department is not worrying about such small matters as breaches of faith. Wholesale repudiation appears to be more in its line. It gives no consideration to the fact that the country press is suffering a considerable handicap compared with the city press. The country press is now to suffer the further disadvantage of having all its messages telegraphed. I appeal to the Government to give some consideration to this matter, so that no undue hardship will be placed upon country newspapers.

Mr LAZZARINI:
Werriwa

– In case I did an injustice to Mr. Mutch in an interjection which I made while the honorable member for Parkes (Mr. Marr), was speaking on Thursday night, I wish to make the position quite clear. The honorable member said that some one had stated in the Domain that the Australian soldier was a “ sixbobaday murderer.” I interjected, as reported in Hansard, “ That was Tom Mutch.” I am inclined to think that my interjection, as it appears in Hansard, gives the impression that I said the statement in question was made by Mr. Tom Mutch. I meant to infer by my interjection that Mr. Mutch had been accused by theNationalist organization, which is anti-Labour, of saying in the Domain that the soldiers were, six-bob-a-day murderers. A statement to that effect was placarded for political purposes all over the State of New South Wales by the members of the Nationalist party, with which Mr. Mutch is now associated. He is standing as a Nationalist candidate at the next federal elections. What I wish to make clear is that it was not I, but the members of the Nationalist party, who stated that Mr. Mutch had said that the soldiers were six-bob-a-day murderers.

Question resolved in the affirmative.

House adjourned at 11 p.m.

Cite as: Australia, House of Representatives, Debates, 23 June 1931, viewed 22 October 2017, <http://historichansard.net/hofreps/1931/19310623_reps_12_130/>.

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