House of Representatives
24 June 1931

12th Parliament · 1st Session



Mr. Speaker (Hon. Norman Makin) took the chair at 2.30 p.m., and offered prayers.

page 2924

QUESTION

WHEAT POOL

Mr THOMPSON:
NEW ENGLAND, NEW SOUTH WALES

– Has the Minister for Markets made any representations to the Minister for Agriculture in New South Wales regarding the possible effect of the State wheat pool upon the projected Commonwealth wheat pool? If so, will he state the result of such representations, and whether he suggested to the State Minister that the growers should he consulted on the two proposals simultaneously ?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– I have advised the Minister for Agriculture for NewSouth Wales that the Government proposes to re-introduce the Wheat Marketing Bill. That notice will allow him to take such steps as he may think necessary in connexion with the ballot of the growers.

Mr Thompson:

– Has the Minister received a reply?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– Sufficient time has not elapsed for a reply to arrive.

page 2924

QUESTION

MELBOURNE MAIL

Mr CROUCH:
CORANGAMITE, VICTORIA

– Although the Melbourne newspapers reached Canberra at 9 o’clock this morning, the mails from Victoria have not yet arrived. Cannot the Postmaster-General arrange that when the ordinary mail service is likely to bo interrupted by floods, as at present, the mails should bo delivered by train with the newspapers instead of being held up at Yass?

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

– Owing to exceptional rains - the heaviest for nine years - many of the water-courses between Canberraand Yass, whence the mails are usually brought by motor car, are flooded ; consequently, the mails have had to be sent by train through Goulburn. In this comparatively dry district floods are of infrequent occurrence, and when they do occur interruption of the mail services could be prevented only by the construction of bridges, for which there is no money available at the present time.

page 2925

WAR PENSIONS

Personal Explanation

Mr D CAMERON:
BRISBANE. QLD · NAT

– I rise to a personal explanation, for the first time since I was elected a member of this House nearly twelve years ago. My attention has been drawn to a paragraph published in the Melbourne Herald on Saturday last which has since appeared in several newspapers in Queensland. The concluding paragraph of an announcement setting out the Government’s intention in regard to the reduction of war pensions, reads -

When the bill reaches the final committee stage Colonel Cameron (Nationalist, Brisbane), has announced that he is ready to move that the reduction in war pensions should be at the same rate as old-age and invalid pensions - 12½ per cent.

That statement is incorrect and without foundation. I hold definite views on the subject of soldier pensions, and hope to have an opportunity to express them upon the floor of the House; but, the Prime Minister having agreed to the appointment of a committee representative of soldier organizations to make suggestions to the Government as to how essential reductions in our annual war pensions liability could be made with the least hardship to those most vitally concerned, it would be improper, and certainly not helpful, for me or any other honorable member to indicate at this stage amendments to the legislation dealing with war pensions which later we shall be asked to consider.

page 2925

INTERNATIONAL DEBTS

President Hoover’s Plan

Mr JAMES:
HUNTER, NEW SOUTH WALES

– In view of the Prime

Minister’s statement last night that under President Hoover’s plan to postpone the repayment of international debts Australia may be relieved to the extent of £3,920,000, will the right honorable gentleman suspend the proposed operation of the Nationalist policy of cutting pensions and wages which he, in conjunction with those avowed enemies of Labour sitting in opposition, has adopted?

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

– President Hoover’s plan has not yet taken shape, and I have no information as to when it will.

page 2925

QUESTION

GOVERNMENT SAVINGS BANK OF NEW SOUTH WALES

Mr ARCHDALE PARKHILL:
WARRINGAH, NEW SOUTH WALES · NAT; UAP from 1931

– Having regard to the anxiety of all people who have deposited their money in the Government Savings Bank of New South Wales, and the reduction of their purchasing power through the suspension of payments by that institution, will the Prime Minister make a statement as to what relief depositors may expect within the next two months?

Mr SCULLIN:
ALP

– Negotiations are proceeding between the Commonwealth Bank Board and the Commissioners of the Government Savings Bank of New South Wales. I can give no indication of the progress of those negotiations.

page 2925

QUESTION

ALL FOR AUSTRALIA LEAGUE

Mr BEASLEY:
WEST SYDNEY, NEW SOUTH WALES

– Has the Prime Minister read the speech delivered by the Leader of the Opposition in the New South Wales Parliament (Mr. Bavin) at a Nationalist conference in Sydney yesterday, in the course of which he violently attacked the All for Australia League, which is practically the United party now forming the Opposition in this House? Does he not think that that attack may shake confidence in Aus-

Mr SCULLIN:
ALP

– I have not read the report.

page 2925

QUESTION

UNEMPLOYMENT RELIEF

Distribution of Surplus Military Clothing

Mr THOMPSON:

– Will the Minister for Defence say whether it is possible to make a further distribution of surplus military clothing to the unemployed?

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– All the surplus military clothing has been made available, and I am endeavouring now to ascertain whether it is possible for the naval section of the Defence Department to make available any surplus clothing suitable for cutting up for children’s garments; but at the moment I cannot say whether there is any available.

Mr BEASLEY:

– Will the Minister favorably consider making available military materials, particularly blankets, whether surplus or not, on account of the severity of the winter, the large number of unemployed, and the general circumstances of a big section of the people to-day?

Mr.CHIFLEY. - It is necessary that the department shall retain sufficient materials for its own requirements.

Mr Beasley:

– Why?

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– While we have a defence policy and a defence force it is necessary, particularly as finance is very limited now, that the needed materials of the department should not be given away, with the probability of having to purchase replacements at a later date. Regard being paid to the absolute needs of the Defence Department, all available material will be distributed. The Defence Department has been extremely generous, and has distributed throughout Australia, through various relief societies, not only clothing, but numerous tents, and a great quantity of cooking material.

Mr THOMPSON:

– As the winter is half over, will the Minister expedite negotiations with the Naval Board with a view to having any further allotment of clothing made before the end of this month?

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– I shall endeavour to finalize the matter within the next week.

page 2926

QUESTION

BROADCASTING OF POLITICAL SPEECHES

Mr HAWKER:
WAKEFIELD, SOUTH AUSTRALIA

– Have instructions been issued by the Inspector of Wireless, in Melbourne, forbidding criticism of the Premiers plan being broadcast from second class stations? If so, is the Inspector of Wireless acting under the direction of the Minister? Will the Minister take steps to see that such censorship is not exercised in the future?

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

– I am not aware of any such instruction having been issued. The department has the right of censorship in respect of any highly controversial matters, but exercises that right with wise discrimination. For instance, if the right honorable member for North Sydney (Mr. Hughes) wished to broadcast a speech from a B class station, his application would have to be considered by the department. I promise the hon orable member for Wakefield (Mr. Hawker) that no difficulty will arise out of the censorship of ordinary controversial speeches broadcast from B class stations; but the department will, if necessary, exercise its rights of censorship.

Mr CURTIN:
FREMANTLE, WESTERN AUSTRALIA

– Will the PostmasterGeneral undertake that opponents of the Premiers Conference agreement will be permitted to use “ B “ class broadcasting stations for the purpose of making known their views regarding the agreement?

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

– Permission to use “ B “ class broadcasting stations for the purpose mentioned will be granted, but not indiscriminately.

page 2926

QUESTION

CANBERRA ABATTOIRS

Mr D CAMERON:
BRISBANE. QLD · NAT

– Has the attention of the Minister been drawn to a reported statement by the Director of the Division, of Veterinary Hygiene of the Department of Health, Dr. W. A. N. Robertson, that meat was frequently fly blown and rat eaten at the Canberra abattoirs, and that the premises are generally unhygienic? Is that report correct, and if so, what action has been taken to overcome those menacing conditions?

Mr McNEILL:
Minister for Health · WANNON, VICTORIA · ALP

– I saw the report in yesterday’s press, and, in consequence, paid a visit to the abattoirs this morning. The press report, in my opinion, was exaggerated. It is true that rats have been discovered at the abattoirs, but whenever a carcase has been nibbled at by rats it has been condemned and destroyed; such meat is not sold to the public. The abattoirs did not come under the control of the Health Department until about eighteen months ago, and the department, I am informed, has already effected a number of improvements there. The layout of the abattoirs is not all that could be desired. There is not sufficient room in the slaughter yards, and the yards in which the cattle and sheep are confined are uncovered and unpaved. The slaughtering yard cannot be kept clean while the outside yards remain unconcreted or unpaved. No doubt the inner yards should be covered, but that cannot be done at the present time.

page 2927

QUESTION

WIRELESS ON AERIAL SERVICES

Mr WHITE:
BALACLAVA, VICTORIA

– What steps have been taken in respect of the installation of directional wireless on aerial services, as recommended by the Air Accidents Investigation Committee?

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– That matter has been under consideration from time to time, and conferences have been held between the officers of my department and private firms interested in the installation of wireless; but, at present, the financial position does not permit of effect being given to the recommendation of the Air Board or to the proposals that were submitted by private firms in connexion with the installation of directional wire-

page 2927

QUESTION

SHALE OIL DEPOSITS

Mr LYONS:
WILMOT, TASMANIA

– Has the Prime Minister received any report from the committee which was appointed in January last, to investigate the possibility of developing and exploiting the shale oil deposits of Tasmania?

Mr SCULLIN:
ALP

– Advice has been revived from the chairman of that committee, the Honorable Claud James, Minister for Mines in Tasmania, that a report on the subject will shortly be submitted to the Commonwealth Government.

page 2927

QUESTION

WHEAT GUARANTEE

Mr PROWSE:
FORREST, WESTERN AUSTRALIA

– What is the present intention of the Government regarding the legislation that was passed by both Houses of Parliament to grant 3s. a bushel to the wheat farmers? If the Government does not intend to proclaim that legislation, in what way does it intend to carry out its promise to help the wheat-growers?

Mr SCULLIN:
ALP

– That question has been answered half a dozen times in the course of the debates in this House.

page 2927

QUESTION

SALES TAX

Mr HAWKER:

– Can the Treasurer give any indication when the increased sales tax will operate?

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

– The Sales Tax Amendment Bill will be introduced immediately after the present emergency legislation has been disposed of, and no doubt willcome into operation before the end of July.

page 2927

QUESTION

TAXATION OF BONDS

Mr NAIRN:
PERTH, WESTERN AUSTRALIA

asked the Treasurer, upon notice -

Assuming that in the proposed conversion of Commonwealth bonds the special income tax of1s.6d. in the£1 is merged as regards such bonds, to what taxation will the interest on bonds thereafter be subject, and will he supply particulars showing (a) the rates that will become applicable, and (6) the acts (Federal or State) which will govern the future taxation of such interest?

Mr THEODORE:
ALP

– The position in regard to the taxation of the new securities will be dealt with fully in the Conversion Loan Bill which will shortly be introduced.

page 2927

QUESTION

IMPORTATION OF FORCED LABOUR PRODUCTS

Mr CROUCH:

asked the Minister for Trade and Customs, upon notice -

  1. Is it a fact that prisoners in French prisons are employed in making buttons, shoes, nets, ropes, bicycles and other articles, and that these are not permitted to be used in France, but are exported to Australia and other countries?
  2. In his inquiries as to the export to Australia of Russian forced labour products, will he extend his inquiries to imports of this nature from France?
  3. Will he prohibit the import of all such French articles until he is satisfied that they are not prison made?
Mr FORDE:
Minister for Trade and Customs · CAPRICORNIA, QUEENSLAND · ALP

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

  1. There is no reason to think that prisonmade goods are exported from France to Australia. All such goods are prohibited imports into Australia.
  2. Such inquiries are not considered necessary.
  3. Few goods of the kinds mentioned are imported from France. A prohibition on all French goods for the reason mentioned appears quite unnecessary.

page 2927

QUESTION

CUSTOMS DUTIES

Mr GREGORY:
SWAN, WESTERN AUSTRALIA

asked the Minister for

Trade and Customs, upon notice -

What was the percentage of the gross amount of the customs dues collected on the value of all imported merchandise in the years 1921, 1929, and for the eleven months ended 31st May, 1931?

Mr FORDE:
ALP

– The figures are riot available according to calendar years, but the percentages for the nearest financial years to the years mentioned by the honorable member are: -

page 2928

QUESTION

AUSTRALIAN COMMONWEALTH LINE OF STEAMERS

Mr CURTIN:

asked the Prime Minister, upon notice -

  1. What were the amounts of payments, if any, made to each person in connexion with the sale of the Commonwealth Shipping Line?
  2. What are the names of such persons?
Mr SCULLIN:
ALP

– The information is being obtained and will be made available as soon as possible.

page 2928

QUESTION

PRIMAGE DUTY ON FERTILIZERS

Mr GREGORY:

asked the Minister for Trade and Customs, upon notice -

In view of the recognized need for sulphate of ammonia and nitrate fertilizers, and their value in increasing production and closer settlement, will he favorably consider the exemption from primage dues of all fertilizers ?

Mr FORDE:
ALP

– The matter is receiving consideration.

page 2928

QUESTION

TOBACCO FOR HOSPITALS

Mr CROUCH:

asked the Minister for Trade and Customs, upon notice -

  1. Has it been the practice to burn all forfeited, overdue, and abandoned tobacco in the Customs Department?
  2. In order to avoid waste, was such tobacco recently handed by the Queensland customs authorities to aged destitute persons at Dunwich?
  3. Will he see that in future, instead of destroying all forfeited tobacco, itwill be distributed amongst hospitals and benevolent asylums ?
Mr FORDE:
ALP

– Inquiries are being made.

page 2928

QUESTION

RUSSIA : REPRESENTATION IN AUSTRALIA

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

asked the Prime Minister, upon notice -

  1. Has a representative of the United Soviet States of Russia been appointed to Australia?
  2. If so, has he arrived in Australia and presented his credentials?
  3. If he has not arrived, when is he expected ?
  4. Has the Government taken notice of the motion by the right honorable member for Cowper (Dr. Earle Page) regarding this appointment of a representative from Russia?
  5. If so, what action has been taken?
  6. If such representative has arrived in Australia, will the Government investigate his activities, if any, concerning the recent shipment of timber per King Lud?
Mr SCULLIN:
ALP

– The Government is not in possession of information with regard to any such appointment.

page 2928

QUESTION

PREMIERS CONFERENCE

Recommendations of Experts

Mr PRICE:
BOOTHBY, SOUTH AUSTRALIA

asked the Prime Minister, upon notice -

  1. Is he in a position to state whether one of the recommendations of the experts’ plan for financial rehabilitation was that all embargoes should be removed, that imports should be no longer rationed, and that there should bo a reduction in the high tariff by a revision on scientific lines?
  2. Is it a fact that Queenslaud sugar was costing the State of South Australia £3,000,000 per annum, while the Paterson butter scheme was costing that State £4,000,000 per annum?
Mr SCULLIN:
ALP

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

  1. Certain recommendations on these matters were made by the sub-committe of UnderTreasurers and economists, but, as will be found on reference to page 181 of the Report of the Proceedings of the Conference of Commonwealth and State Ministers, these recommendations were bound up with recommendations of the sub-committee regarding increased primage duty and the valuation of imports in Australian currency.
  2. No.

page 2928

QUESTION

IMPORTATION OF CRUDE PETROLEUM

Mr YATES:
through Mr. Lacey

asked the Minister for Trade and Customs, upon notice -

What quantity of natural crude petroleum with an asphaltic base has been imported into Australia during the last three years?

Mr FORDE:
ALP

– The importations of all crude petroleum have been as follows: -

The import statistics do not indicate whether the base is paraffin or asphaltic.

page 2929

QUESTION

TRADE TREATY WITH FRANCE

Mr FRANCIS:
MORETON, QUEENSLAND

asked the Prime Minister, upon notice -

  1. Has his attention been drawn to a recent press cablegram to the effect that the French Chamber of Deputies has ratified, without debate, the customs super tax on Australian butter and wheat, imposed in retaliation against Australia’s heavy customs duties on luxury goods, and that no reply had been received from the Prime Minister of the Commonwealth regarding the French proposals to him last year for a mutually preferential trade treaty to end the present “ cut-throat “ competition ?
  2. Did the French Government make proposals to the Commonwealth for a reciprocal treaty; if so, what is the nature of such proposals ?
  3. In view of the urgent necessity for increased overseas trade, what is the cause of the delay in arriving at an agreement :m such a beneficial proposal?
Mr SCULLIN:
ALP

– My attention has been drawn to the press cablegram mentioned by the honorable member. Prior to the departure of the Australian delegation to the Imperial Conference in August Inst year, requests had been made by continental countries to negotiate reciprocal agreements. Replies to these countries intimated that, until the results of the Imperial Conference were known, Australia was not in a position to negotiate with foreign countries. At the Imperial Conference the British Government agreed to maintain for a period of three years the margin of preferences given to the dominions pending the proposed Ottawa conference, and the dominions agreed in the meantime not to lessen any of the preferences now granted to Britain. Until the Ottawa conference has been held, therefore, it is difficult to enter into agreements with foreign countries. This has delayed negotiations with France.

page 2929

QUESTION

IMPORTATION OF RUSSIAN GOODS

Mr GARDNER:
ROBERTSON, NEW SOUTH WALES

asked the Minister for Trade and Customs, upon notice-r-

What was the value of Russian goods coming to Australia in 1029-30, and up to the present date in this financial year?

Mr FORDE:
ALP

– The value of goods imported from Russia during the financial year 1929-30 was £149,556. Figures for the current year are not available. poo]

page 2929

QUESTION

DEFICITS OF STATES

Mr KEANE:
BENDIGO, VICTORIA

asked the Treasurer, upon notice -

  1. What were the amounts of the deficits of each of the States for each of the past five years ?
  2. What proportion of these deficits each year was attributable to railway deficits?
Mr THEODORE:
ALP

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

page 2929

QUESTION

EXPORT COAL TRADE

Mr SCULLIN:
ALP

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

  1. Has any of the £50,000 placed on the Estimates for 1930-31, to assist in co-operation with the States towards recovery of the export coal trade, yet been expended?
  2. If not, has any suggestion been made by the Government or the coal-owners as to the best means of expending the money to gain fresh trade overseas?
  3. If there are no prospects of securing new coal contracts overseas, will the Government give consideration to a proposal for the establishment of an experimental plant for the extraction of oil from coal, thereby endeavouring to build up the coal trade in this manner ?

A reply was furnished in regard to parts 1 and 2, and consideration was promised of the suggestion contained in part 3. I am now in a position to furnish the following reply in regard to that part of the question : -

  1. The Government is closely watching the progress of experimental work throughout the world on the extraction of oil from coal. Being able to obtain the advantage of knowledge gained . elsewhere, it is not prepared at the present time to expend the large sums that would be required to establish an independent experimental plant in Australia, though it is at all times ready to give close attention to any practical and economically sound proposals which may be put before it.

page 2929

DEFENCE DEPARTMENT ECONOMIES

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– On the 17th June the honorable member for Cook (Mr. C. Riley) asked if I would state the names and positions of the members of a committee appointed to investigate proposed retrenchments and economies in the

Defence Department. I am now in a position to inform the honorable member as follows: -

Following the decisions of the Premiers Conference for reduction of. expenditure, the question of the Defence share of the saving was referred to the Defence Committee, which is the standingadvisory body on policy. The membership of this committee is as follows:-

Vice-Admiral W. Munro Kerr, C.B., C. B.E., Chief of the Naval Staff.

Major-General W. A. Coxen, C.B., C.M.G., D. S.O., Chief of the General Staff.

Air Commodore R. Williams, C.B.E., D.S.O., Chief of the Air Staff. .

Colonel T. J. Thomas, O.B.E., Finance Secretary

The following were also co-opted forconsultation on the Munitions Supply and Civil Aviation votes, respectively: -

Mr. A. E. Leighton, Controller General of Munitions

Lieutenant-Colonel H. C. Brinsmead, O.B.E., M.C., Controller of Civil Aviation

The question of economies’ in the Defence Department has been continuously before the boards which administer the various branches of the department. The only bodies constituted which approached a committee in form was a conference between representatives of the Public Service Board, Auditor-General, and the Defence Department to investigate the better co-ordination of naval store accounting. In addition, the Public Service inspectors have been reviewing departmental staffs and methods ill co-operation with departmental officers in order to effect any economies possible.

page 2930

LEAVE OF ABSENCE

Motion (by Mr. Paterson) - by leave - agreed to -

That leave of absence for One month be given to the right honorable member for Cowper (Dr. Earle Page) on the ground of ill health.

page 2930

PAPER

The following paper was presented: -

Australian Soldiers’ Repatriation Act - Regulations Amended - Statutory Rules 1031, Nos. 59, 67, 68

page 2930

SUPPLY BILL (No. 1) 1931-32

Message recommending appropriation reported.

In Committee of Supply: (Consideration of Governor-General’s message).

Mr THEODORE:
Treasurer · Dalley · ALP

.- I move-

That there be granted to His Majesty for or towards defraying the services of the year 1931-32 a sum not exceeding ?2,409,780.

The proposal now submitted is for the granting of supply for the month of July, 1931. The amount which Parliament is asked to appropriate includes the following sums for ordinary services : -

Departments and services, other than business undertakings and territories of the Commonwealth, ?679,510.

Business undertakings - post offices and railways, ?835,010.

Territories of the Commonwealth, ?45,260.

The items making up the sums mentioned are based on the appropriations of Parliament for the present financial year, and represent approximately one-twelfth of this year’s appropriation. The remainder of the amount to be appropriated is in respect of refunds of revenue, ?100,000, and ?750,000 as an advance to the Treasurer. The latter item is required mainly to cover the exchange on a large remittance of interest to London in July, exchange not having been otherwise provided for in the bill. A proportion of the amount will be required to carry on uncompleted works and services in progress at the 30th June, 1931. The bill provides for carrying on only those services which have already been approved by Parliament in previous appropriations. As the Estimates for the next financial year are not yet in their final form, it has been impossible to give effect in this bill to the economy proposals of the Government.

As indicated last week, when the main proposals of the rehabilitation plan have been dealt with, the budget will be brought down, and the Estimates, embodying the economies decided upon by Parliament, will be submitted. It is hoped that the budget and the Estimates will have been disposed of by the end of J uly. As the general financial position was placed before Parliament last week by the Prime Minister and myself in outlining the proposals of the Premiers Conference,and as the budget speech will be delivered, I hope, in the course of two or three weeks, it is unnecessary to say more on the subject now. If there are matters connected with this bill about which honorable members desire information, I shall be glad to furnish it.

Mr LYONS:
Wilmot

.- The Treasurer (Mr. Theodore) has pointed out that Supply is asked for only for the short period of a month, during which time it is hoped, the budget proposals and the Estimates will be dealt with. It is unnecessary, therefore, to discuss the details of the bill, nor need we spend much time on it, since many urgent matters require our attention.

Mr Lazzarini:

– The Leader of the Opposition is most accommodating.

Mr LYONS:

– Every opportunity to discuss the financial position will be afforded later. Therefore, I have no objection to the immediate passage of this bill granting Supply for essential services.

I take this opportunity, however, to raise a point in relation to the proposed campaign for the conversion of existing government loans. No stone should be left unturned to make the appeal to the people a success, and it seems to me that already steps should have been taken to draw up a plan of campaign. At the conference of Federal and State Ministers, held recently in Melbourne, a national appeal committee was appointed, representing the Government, the Opposition, and the banking interests, through Sir Robert Gibson, Chairman of the Commonwealth Bank Board, to control and carry out that campaign. I suggest to the Government that, having regard to the progress made with the Debt Conversion Agreement Bill, it is time that the committee was called together. Once the measure has been parsed, there will be little time for the organization of a plan of action, so that it is essential that the necessary machinery should be got ready at once. There is much to be done, but things cannot be done in proper order until the appeal committee has been summoned. As a member of the committee, I have yet had no invitation to discuss the situation on behalf of the Opposition, which is anxious to co-operate with the Government to help the country.

In December last, when we appealed for contributions to the £2S,000,000 loan, a special effort was put forward. We called upon all sections of the community to assist to the fullest possible extent. The Department of the Treasury, of course, rendered excellent service, and, apart from the Ministry, and members of the Commonwealth Parliament, substantial assistance was received from members of State Parliaments, with some exceptions, and from influential committees in various parts of Australia, who threw themselves wholeheartedly into the advocacy of the loan. There was no more valuable work than that of the Melbourne committee, which set an example to the whole Commonwealth. The services of the broadcasting companies and of the national broadcasting scheme were availed of to the fullest extent, and remarkable results were achieved. A most successful press campaign was carried out. The honorable member for Henty (Mr. Gullett) and I have already suggested to the Prime Minister that even a more notable effort will be needed on the occasion of the conversion loan now proposed, because of the vast sum involved, which will make the success of this loan more difficult to achieve. We have suggested that the services of some of the most able journalists in Australia should be co-opted, in order that we may establish a press propaganda committee that would give the best possible service, and secure the best results obtainable.

With the Deputy Leader of the Opposition (Mr. Latham) and the Leader of the Opposition in the Senate (Senator Pearce), I attended the recent conference in Melbourne, at which the great object was to ensure the voluntary conversion of the existing loans. The conference adopted the suggestion made by its members and ourselves, and determined that the present loans should be converted voluntarily. I am sure that every honorable member, particularly on this side of the House, is anxious for the success of the voluntary conversion. If the substantially greater part of the huge sum now held in various stocks is voluntarily applied by the Australian holders to the new stock, it will be the finest advertisement that Australia could get. It will be an intimation to the world that we have absolute confidence in ourselves and in our country, and there will then be no doubt that we shall come safely through all our difficulties. That would be more than a gesture; it would be a definite action that would inspire confidence in Australia throughout the world.

I hope that the Government is not taking it for granted that the result can he attained without effort; and that there will not be any threat behind the proposal. We should appeal to the people on patriotic grounds to come to the assistance of Australia. To make the appeal effective we must at once set up the machinery required for the necessary propaganda. Therefore, I suggest to the Treasurer, in the temporary absence of the Prime Minister, that immediate steps should be taken, first of all, to call the appeal committee together. I take this course, not because I wish personally to be associated with the movement, but because I desire every political section to bo represented. When the committee has been summoned, the first step will have been taken, and then . we should push straight on with the programme until success is realized.

Mr Theodore:

– The necessary steps will be taken immediately.

Mr BEASLEY:
West Sydney

– I take advantage of this opportunity to bring under the notice of the Government, and particularly the Treasurer (Mr. Theodore), the circumstances connected with Cockatoo Island Dockyard and the necessity for placing on the Estimates an amount that will tide it over the present difficult period. As every honorable member is aware, the dockyard belongs to the Commonwealth, and a very large sum of money has been spent in providing it with the most up-to-date machinery and equipment for the purpose of docking and building, not only merchant vessels, but also warships. During the last two years, particularly, the dockyardhas had an exceedingly lean time, and but for the fact that this Parliament agreed to the construction of a lighthouse steamer there, its operations would have been totally suspended. The dockyard authorities have been able to carry on in a very small way, but have not had sufficient money to keep the machinery and plant in proper order. As a matter of fact, the buildings are falling to pieces, and as a result of the action of the salt air on the galvanized iron, the roofs are in a very leaky state. The machinery being thus exposed to the weather, is seriously affected. From my knowledge of electrical machinery, I can say that if exposed to the weather it quickly becomes valueless. While this institution was in my ministerial charge, it was thought that a number of trades or workers on the island might be assisted by the provision on the Estimates of an amount of about £50,000 or £60,000 for the carrying out of necessary repairs. I have not previously had an opportunity of raising the matter in this House, but I know that the Treasurer is acquainted with the representations that have been made with respect to it. As a matter of fact, when I was a member of the Government I discussed the matter with him on a number of occasions.

Mr Lazzarini:

– Is the island in his electorate ?

Mr BEASLEY:

– It is in my electorate. But, it does not matter in whose electorate it is. In the first place, owing to this industry being Government owned, it is the duty of the Government to provide employment if that be possible; and in the second place, it is bad policy from a business stand-point to allow government property to go to rack and ruin - and that is what is occurring on Cockatoo Island at the present time. If a small amount were placed at the disposal of the dockyard authorities, they could keep the machinery there in decent order, and fit for use when the conditions improve. I particularly urge the Treasurer to give this matter serious consideration ; and when the Estimates are presented at the end of this month, I trust that the Government will make available at least £50,000 to enable the dockyard authorities to tide over the present period of depression. It is regrettable that other Ministers are absent from the chamber, because we now have an opportunity that will be denied to us within the next few weeks to touch upon a number of matters.

Mr Theodore:

– Detailed estimates will be before honorable members within the next three or four weeks.

Mr BEASLEY:

– There are one or two small matters that might be considered by Ministers, and that I should like them to take up immediately. Three weeks is a long time to wait. The first matter that I wish to raise concerns the firm of H. B. Dickie Proprietary Limited, of Yarraville, Victoria, towel manufacturers. The honorable member for Corangamite (Mr. Crouch) had previously handled this matter, and carried it to a stage at which partial satisfaction was given to the firm concerned; but the members of the organization associated with this industry have requested me to bring under the notice of the Minister for Trade and Customs (Mr. Forde) the necessity for granting this firm’s request in regard to the importation of what is called sized ball warp, which is used in the manufacture of towels. It is known to the Department of Trade and Customs that the firm proposes to install a plant for the manufacture of this commodity locally. It has not yet had sufficient time to complete that installation. Whilethe plant is being installed it is necessary for this firm to make purchases overseas to keep the factory going and its hands employed, and, as honorable members will agree, a certain length of time must elapse before the machinery can be landed and installed. The Customs Department granted a concession of three months, but Mr. Dickie considers that that is not sufficient, and that the period ought to be extended to six months, to enable him to have the new plant installed. A paragraph from a letter that I have received from the Melbourne division of the Australian Textile Workers Union reads -

The concession asked for was for six months, whilst he has granted only three months, which will not give the firm sufficient time to have its new plant installed. I may say that trade inquiries already have indicated in no uncertain way that suitable Australian yarn in certain qualities is not available, and in all qualities used by the firm, I repeat that the combined capacity of the cotton spinners is at present unable to supply requirements, which are not abnormal as stated by the Minister.

When this organization requested me to take the matter up with the Minister, I made investigations to ascertain the attitude of the firm concerned towards its employees, in order that I might not do anything which would be inconsistent with the attitude that I had adopted towards other tariff items affecting the textile industry. I found that the circumstances in this respect are all that could be desired. The award conditions are being observed in the fullest sense, and every step has been taken to ensure the proper protection of the employees.

Mr Forde:

– The honorable member can rest assured that the Government will do everything within reason to meet the wishes of this manufacturer. It is anxious to help him, because he gives employment to a large number of people.

Mr BEASLEY:

– I am very pleased to have that assurance from the Minister.

Another matter in connexion with which great difficulty has been experienced in obtaining any degree of satisfaction from the Repatriation Department or the Treasury, concerns a returned soldier named Herbert Barry Farrell, of 21 Bucknell-street, Newtown. He is suffering from framboesia, septic intoxication, chronic malaria, and failing heart.

Mr Nairn:

– Why not write to the department?

Mr BEASLEY:

– This matter has already been brought under the notice of the department. Honorable members have the right to ventilate such matters in this chamber when opportunity offers. I appreciate the desire of the honorable member, and those who are associated with him, to assist the Government to dispose of another task to which, of course, I am bitterly opposed; but I am anxious to have this and similar complaints investigated. Farrell claimed, a pension, on account of framboesia, but was turned down by the Entitlement Board, although statements covering his pre-war life were submitted by a reliable witness. His claim was not entertained, despite the fact that his overseas papers could not be produced to the entitlement tribunal. As a matter of fact, those papers are not available; consequently, the board had not a proper basis upon which to come to a decision, because the necessary information was not at its disposal. According to information that has been supplied to me, there is an extraordinary circumstance surrounding the case of this unfortunate man. Having been refused assistance by the Entitlement Board he approached the Invalid Pensions Department, and endeavoured to secure relief in that quarter. The repatriation authorities contend that his ill health is not attributable to war service. The Invalid Pensions Department regard him as being entitled to consideration; they contend that the complaint from which he is suffering was contracted in Australia, and therefore the act precludes him from any assistance. He asserts that it is due to war service, and that a pension should be granted by the Repatriation Department.

Mr Theodore:

– “Was he an Australian soldier?

Mr BEASLEY:

– Yes. The case has been brought under my notice, not by the individual concerned, but through the Randwick Diggers’ Welfare Club, an organization associated with the Randwick hospital, which gives close attention to cases of this kind. I have briefly stated the facts, and if any further information is desired by the Pensions Department or the Repatriation Department, I shall be pleased to supply it. I urge the Treasurer to have further inquiries made on behalf of this unfortunate man, who has been unable to get any assistance from the Pensions Department or the Repatriation Department.

Mr FRANCIS:
Moreton

– I. desire to bring under the notice of the Treasurer (Mr. Theodore) the difficulties of those engaged in the arrowroot industry. Owing to the extraordinary ruling of Commissioner of Taxation the sales tax is imposed on arrowroot flour made from the arrowroot bulb. Although wheaten flour is exempt from the sales tax, flour made from arrowroot is subject to that tax. Wheaten flour is a most important article of food, as also is arrowroot flour, but owing to the unfair discrimination shown in this respect the manufacturers of arrowroot flour find it extremely difficult to carry on their operations. The decision of the Commissioner of Taxation is absolutely indefensible, and if this industry is to carry on successfullythis anomaly must be removed. There has been lengthy correspondence between the Arrowroot Pool Board, myself, and the Treasurer,who has assured those interested that the matter will be given serious consideration when amending sales tax legislation is before Parliament. As the Treasurer indicated to-day that amending legislation is to be introduced at an early date, I trust that the implied promise of the Minister as contained in the correspondence will not be overlooked, and that flour made from the arrowroot bulb will be exempt from the sales tax as is flour made from wheat.

Mr BELL:
Darwin

.- I wish to bring under the notice of the Treasurer (Mr. Theodore) a matter which concerns the department under his control, and although it may appear comparatively unimportant, it is of great concern to those directly interested. Since 1922 I have been pressing various governments to provide sufficient money to instal a light on the oast coast of King Island.

Mr Theodore:

– Since 1922 ! Have all those prosperous years intervened?

Mr BELL:

– Notwithstanding the state of the finances, which at times have been satisfactory, governments in the past have not made funds available. Last year the Minister for Trade and Customs (Mr. Forde) informed me that the work has not been proceeded with because the necessary money was not available. For years past Ministers have said the same thing, although the lighthouse authorities consider the work to be urgent.

Mr Theodore:

– Is a lightship or a lighthouse required ?

Mr BELL:

– A lighthouse. There is no light of any kind on the east coast of King Island, which extends for a distance of about 40 miles. The shipping between King Island and Melbourne, and King Island and Tasmania, is considerable. The steamers of the Holyman line call at Eraser, which is the port of the east coast of King Island, twice a week, and vessels trading between the north-west coast of Tasmania and Victoria, and between Tasmania and Adelaide, also pass close to that coast. Only those closely associated with shipping realize the grave risk incurred at night, and during stormy weather, owing to the absence of a lighthouse. In travelling between Melbourne, King Island and Tasmania, I have realized the difficulty and dangers which exist at any time of the year. Vessels near the coast at night are compelled to wait until daylight before approaching the port. There are no beacons to guide them in the daytime, and at night, owing to the absence of a light, the risk is tremendous. Obviously vessels must approach within reasonable distance of the land before daylight if they wish to make the port at a reasonably early hour. There is more risk in approaching the east coast of King Island at night than in approaching any similar coastline in the southern seas. Owing to the absence of beacons the masters of vessels making the port in daylight have to depend upon the trees on the hillsides to guide them. They have said that it would be a calamity if the trees, which are their only guide, were removed. I realize that in the present circumstances every suggested item of expenditure must be closely scrutinized, but as hundreds of thousands of pounds will still be spent on other public works, I trust that funds will be made available to provide a light on this coast in order to protect shipping and human life. Even if other proposed public works are abandoned, this work should be proceeded with. The cost is comparatively small, and the need is great. I trust that the necessary funds will be provided in the Estimates for the next financial year.

Mr.LAZZARINI (Werriwa) [3.29].- I wish to support the request made by the honorable member for West Sydney (Mr. Beasley) with respect to Cockatoo Island Dockyard. This is an institution of which the nation has reason to be proud. Even in this time of depression it would be false economy to allow it to depreciate to such an extent as to become useless, especially as we do not know when we may need to use it. I hope that the Treasurer (Mr. Theodore) will favorably consider the suggestion that the dock should be kept in repair.

I also protest to the Postmaster-General (Mr. A. Green) and the Treasurer - who, I suppose, is responsible, since it is he who furnishes the funds - against the action of the Post and Telegraph Department in closing down unofficial post offices in country districts. In my electorate post offices of this kind which, have been open forthe last 30 years are now being closed. Surely the population of the districts concerned has increased since the offices were opened, and if there was need for them 30 years ago, there must be need for them now. Only the other day I learned that a small office outside Goulburn was to be closed, yet the population of the district about Goulburn must have trebled since that office was first opened 30 years ago.

Mr Theodore:

– What is the name of the place?

Mr.LAZZARINI.- I cannot remember the names of all the places, but I shall furnish the Treasurer with a complete list of the offices which have been closed. The name of the office near Goulburn that has been closed is Middle Arm. We are constantly being told that the drift of population from the country to the cities should be checked. Indeed, this drift is a problem calling out for solution the whole world over, and yet the Postmaster-General is acting in a manner calculated to make life in the country even less attractive than it is now. If country dwellers are to be denied the advantages of postal facilities they might as well be living in a desert.

I understand that a further saving of £250,000 is to be made in the administration of the Defence Department. I am not greatly concerned about that, because I believe that the Defence Department is the least necessary of governmental activities at this time, though even Defence Department economies necessarily involve throwing people out of work. But whatever happens to the department, I believe that its stores of clothing and blankets should be made available for the use of those who are in want. I am not blaming the Minister for lack of sympathy in this regard. He has done what he could with the surplus stores available, but the matter should be carried further. While there is a tent or blanket lying on the shelves of the defence stores there should not be a man, woman, or child allowed to go cold or unsheltered. If it is necessary to buy supplies at some future time to replace those now held we shall have to make provision for that when the need arises. It has been stated that the care of the unemployed is a State responsibility. In my opinion, there is no problem more worthy of the attention of a National Parliament than this. If unemployment is not to occupy the attention of the National Parliament, then that Parliament has very little claim on the respect of the public. I trust that these and the other matters I have mentioned will receive the favorable consideration of the Government. It is particularly undesirable at this time that the policy of closing post offices should be continued. Such action by the department must have a psychological effect upon the public, and still further increase the general depression. v

Mr GULLETT:
Henty

– I remind the Prime Minister (Mr. Scullin) and the Treasurer (Mr. Theodore) that on a number of occasions, in response to representations by myself and other honorable members, they have informed the House that the Government has been considering whether financial relief can be given to the owners of war service homes. Owing to unemployment, rationing of employment, and general, wage reductions, the present scale of payments on war service homes has become, in many instances, beyond the capacity of the occupiers of such homes, and the position is serious. I am aware that any relief granted would involve a very large sum of money, but I believe that something must be done if the men are not to lose what they have paid on their homes over a period of years. I should be obliged, therefore, if the Treasurer will inform the committee what steps the Government has taken to deal with the matter.

Mr JAMES:
Hunter

.- I call the attention of the PostmasterGeneral (Mr. A. Green) to the fact that for the last week or so I have not received notice to the effect that any post office has been closed in my district. It has occurred to me that perhaps the departmental heads are failing in their duty, which seems to have been to close up all the post offices in the Hunter electorate. Joking apart, however, I protest against the policy of the department, which has denied to some towns of quite large populations anything like reasonable postal facilities. The population of Cardiff, a town in my district, is approximately 3,000, and yet, to serve the needs of all those people, there is only an unofficial post office run in conjunction with a little shop. I am not airing a grievance without having first consulted the department concerned. On several occasions I brought the matter before the Deputy Director for Posts and Telegraphs, and was told that no money was available to provide an official post office in that area. There are, also, 38 telephone subscribers at Cardiff, but the local people cannot persuade the department to install an exchange. If a person seeks to find the name of an individual subscriber living at Cardiff he has to look through three telephone subscribers lists - those of Newcastle network, Boolaroo, and Wallsend. Now that Newcastle has become so highly industrialized, people are transferring their place of residence to suburban districts such as Cardiff.

Mr Theodore:

– How far is Cardiff from Newcastle?

Mr JAMES:

– Between 3 and 4 miles. The telephone facilities of that centre are quite inadequate. Subscribers cannot even persuade the Government to print the name of Cardiff in the telephone directory. If that centre were better catered for there would be more telephone subscribers, and a greater amount of post office business would be done there. At present many persons transact their post office business in Newcastle. The matter is one that warrants the serious consideration of the Government. Whenever a protest is made through the local postal people, a reply is received that the “ prescribed authorities are opposed to an extension of existing services.” If I were the Minister, I should want to know who in the world those “ prescribed authorities “ are.

Here is another case that needs attention. At Birmingham Gardens, outside Wallsend, there is a postal delivery along one side of the street, but none on the other, as it is outside the 1-mile radius. Approximately 251 residents live in that area, including many union leaders and business people, and they have to walk to the Wallsend post office for their letters. Those persons have approached me, urging that the letter delivery should be extended to a radius of 1-J miles from Wallsend.

Bellbird, which has a population of 2,000, is similarly situated to Cardiff. It has an unofficial post office that is incapable of coping with local requirements. In cases of mine accidents or sickness among the community at Pelton, the mine manager’s telephone has to be used to ring for medical assistance. The department will not install a public telephone there.

I wish to bring under the notice of the Minister for Repatriation (Mr. McNeill) a case I have had under my notice for some time that has, in my opinion, been unjustly dealt with by this department. The man concerned is receiving a 20 per cent. pension, although five or six years ago he was enjoying one of 40 per cent. Dr. Coppleson and Dr. Birchfield, both eminent Macquariestreet specialists, certify that his condition to-day is worse than it was six years ago, and the department does not deny that it is attributable to war service. He was gassed when on active service, and as a result is now suffering from neurasthenia, bronchitis, nasal pharyngitis, bladder and kidney trouble.

Mr Theodore:

– There is no appeal, once the matter has been dealt with by the Entitlement’ Tribunal. Surely the honorable member is not suggesting that the Minister should override the decision of that body!

Mr JAMES:

– That is entirely wrong, as I know that “William Crichton, formerly a private in the 35th Battalion, registered number 751, and now residing at Stanford-street, Kurri Kurri, was granted a pension by the Entitlement Tribunal after his application had been rejected by other boards. The Repatriation Commission appealed against the decision of that tribunal, and had the pension stopped. If the application of a returned soldier is rejected by the Entitlement Tribunal, he has to wait six months before he can appeal, and then he can do so only in the light of any fresh evidence that is adduced. Where is the fairness in that? The commission was able to appeal at once in Crichton’s case, with the result that although the exsoldier obtained a favorable verdict, he was unable to draw a single penny of additional pension, and has not yet been able to do so.

The first case to which I referred was that of R. M. Storey, No. 1794, a stretcher bearer, attached to the 8thField Ambulance Corps. This man was reduced to a 20 per cent. pension, although five years ago he was receiving a 40 per cent. pension. Dr. Coppleson and Dr. Birchfield have both certified that the man is worse now than when he was getting a 40 per cent. pension.

Mr Maxwell:

– Was that expert evidence produced before the Entitlements Board ?

Mr JAMES:

– I am not sure of that. It is wrong, in my opinion, that an exsoldier appellant should have to wait for six months before he can have his case reviewed, whereas the Repatriation Commission can obtain a re-hearing immediately. At least the commission should be on the same footing as the ex-soldiers. This anomaly should be rectified.

I am glad that the honorable member for Werriwa (Mr. Lazzarini) directed attention to the necessity for a further distribution of military clothing among the unemployed. There has been more distress in the Hunter electorate in the last three years than in any other electorate in Australia. Although 12,000 of my constituents are unemployed, I was allocated only 2,000 articles to distribute among them. I appreciate what the Government has done in this regard, but I consider that a good deal more should be done. I had a very difficult task to distribute the articles allotted to me. If this clothing is being left in military stores to be destroyed by moths, rats, and other pests, it is a shame, because it is badly needed by the unfortunate unemployed people who are to-day suffering severely on account of the cold winter. I was allotted thirteen blankets and thirteen pairs of boots, and honorable members can imagine the scramble there was for the possession of them.

The CHAIRMAN (Mr. McGrath).The honorable member’s time has expired.

Mr NAIRN:
Perth

.- I have no doubt that the majority of honorable members are prepared to give this bill a speedy passage, and so are not taking the opportunity that is afforded them of bringing forward many matters of particular interest in their own districts. No doubt every honorable member would like £50,000 to be spent in his constituency, but we all know that money is not available for this purpose.

Reference has been made to the Cockatoo Island Dockyard. It has been said that the plant is falling into disrepair. I am surprised to hear this, because I understood that a sufficient staff had been retained to maintain it in good order.

Mr Beasley:

– If a . staff is there, material should be provided for them to work with.

Mr NAIRN:

– The matters mentioned in this debate should have been referred to the Ministers in charge of the different departments; they are not of sufficient importance to justify the spending of the time of Parliament in discussing them, in view of the fact that other urgent matters are waiting attention. We all know very well that our financial position is such that only the most urgent expenditure can be incurred in connexion with our public utilities. I trust that honorable members who desire to obtain information in regard to minor matters of this kind will seek it in a more appropriate way, by personal representations to me Minister.

Mr WATKINS:
Newcastle

.- I wish to refer briefly to the policy adopted by the Government of closing small post offices. I received a letter through the post this morning which informed me that a small post office, which had been open for half a century, had just been closed. This means that some one will have to take the responsibility of accepting custody of a mail bag and distributing its contents. A post office at Shortburn, on the boundary of my electorate, has recently been closed. One mail bag will now have to serve the residents along three miles of road, and I fail to see how that can be done satisfactorily.

Cardiff, to which the honorable member for Hunter (Mr. James) referred, was formerly in my electorate. I tried for many years to get an official post office established there. I am not sure what is its present permanent population, but it is of sufficient ‘importance (<> justify the establishment of an official post office. Therefore I am . supporting sue request of the honorable member for Hunter (Mr. James). It is a disgrace that an official post office was not established at that centre many years ago.

Mr WHITE:
Balaclava

.- Some honorable members -who have preceded me have directed attention to what are, after all, matters of comparatively minor importance. The subject to which I wish to address myself is, on the contrary, one of vital moment to the nation; I refer to the contemplated further reduction of £250,000 in defence expenditure. While I recognize the need for economy in administration, I sincerely hope that the Government will not jeopardize the safety of Australia by a too drastic cut in defence. Already the strength of our navy has shrunk to two cruisers - the Australia and the Canberra - a seaplane carrier, which is to be laid up shortly, and one torpedo boat. The Government has laid aside the light, cruisers Adelaide and Brisbane, four sloops, five destroyers, and two fleet, auxiliary vessels, and has sent back to Great Britain the two submarines Otway and Oxley. The two Australian cruisers in commission, the Australia and Canberra, are two of the 50 cruisers which, it has been decided, shall comprise the British navy strength in cruisers until 1936. As a result of many conferences in recent years, the strength of the British fleet has been whittled down until its personnel is 20,000 less than that of the fleet of the United States of America, and actually is only about equal to that of Japan. Since in the last analysis Australia must depend for its safety on the strength of the British fleet, our position, at the moment, is not at all reassuring. The many cuts that have been made in defence expenditure lately suggest the thought that the Government attacks this particular department because it is the one in which economies can be more easily effected in the same way that insurance or police may be considered unnecessary in quiet times. I submit that, if economies have to be made in this department, more consideration should be given to costs on the administrative side. During the war, when we had no fewer than 24 vessels in commission, the administrative staff was not larger than it is now, when we have only four vessels on the active list. The strength of our Navy is becoming dangerously inadequate. If the Government persists with these further economies, with its rationing scheme as applied to the permanent forces and the abolition of compulsory training, and .further whittles down the strength of the Navy, our defence force will become little better than a defence farce.

If economies were effected in other departments there would be no reason for these drastic cuts in defence.

In, the Melbourne Age of yesterday’s date, Mr. J. P. Jones, the Labour Minister for Public Works in Victoria, pointed out, in an address to members of the Constitutional Club, that if the Federal Health Department confined its activities to the quarantine services, costing about £25,000 a year, a large portion of the expenditure of £150,000 or £160,000 a year on that department, could be saved.

Mr Theodore:

– It is remarkable how effective State Ministers are in their criticism of Commonwealth activities.

Mr WHITE:

– The same may be said of Federal Ministers in their criticism of State Ministers. No one can deny that there is much duplication and overlapping of Federal and State administrative services. In my opinion, the portfolio of Health and Repatriation is absolutely superfluous, because repatriation is purely a Treasury matter, consisting, for the most part, of the payment of pensions, which comes under the Treasury. The Minister in charge of that department could also be Assistant Minister for Defence. I do not for a moment wish to criticize the present Minister for Defence (Mr. Chifley), because I believe that he is sincerely and honestly endeavouring to do his best for the department in a very difficult position. But if this spare Minister for Health and Repatriation could assist the Minister for Defence, aviation, which is the most progressive side of defence, and also the civil aviation services, could receive proper attention.

Mr Theodore:

– The honorable member will bc better able to criticize economies in defence when the budget is under consideration.

Mr WHITE:

– I am aware of that, but invariably, when the budget is being discussed, honorable members are expected to sit for long hours and, after a time, the guillotine is applied. Consequently, the ordinary member has little chance to present his views to the House, because discussion is stifled.

Mr Theodore:

– The honorable member surely does not consider himself an ordinary member of this Houfe?

Mr WHITE:

– I cannot claim to be so distinguished as the Treasurer; but, as an ordinary member, I endeavour at all times to direct attention to matters of national importance. We are now considering a bill for the appropriation of a considerable sum of money od. departmental services, and I am directing’ criticism at certain contemplated econO’mies in the Defence Department whichin my opinion, may jeopardize the safety of the Commonwealth. This department has been very severely handled by thisGovernment. Already a considerablenumber of permanent officers with a long; record of service have been retrenched1. It is significant that other departments have not had quite the same treatment. One man who has been retrenched was a Duntroon student, who was sufficiently efficient to be sent to India for further training. Yet he was one of six Staff Corps officers who, when the Government applied its economy scheme to the Defence Department, were advised that they were eligible for appointment to the Public Service. This man applied for appointment to the Public Service, only to be informed later that a position was not available for him, with the result that he was ignominiously dismissed from the Service. I say that he was dismissed ignominiously because, while there was apparently nothing against him, the inference was that he was less efficient than certain other officers who were retained. This economy policy, I repeat, does not operate to the same extent in the higher branches of other departments of the Public Service.

Another matter relating to defence is one to which I have drawn attention previously, namely, the advisableness of offering a reward to encourage a further search for the lo3t Southern Cloud air liner. Quite recently a civil aviation machine was lost in the northern districts of Victoria, and although the search was well organized in both the air and on the ground, some time elapsed before the machine was located, accidentally, by a rabbit trapper. The Air Accidents Investigation Committee, which inquired into the loss of the Southern Cloud, was unable to suggest where the air liner was lost, but it made certain recommendations. Although the search was prolonged, the fate of the air liner remains a mystery to this day. Some of the relatives of the passengers who have interviewed me about the matter have urged that the department should offer a reward to encourage a further search for the SouthernCloud, but the Government isnot sympathetic to the proposal. These people have gone to a great deal of expense to continue the search, and have engaged men in one of the unemployment camps in the locality where the civil aviation department machine was lost more recently, to make a further search there. The belief is held that if the Southern Cloud was notlost in the sea, it might have come down in some part of that difficult country where the other machine was lost a week or two ago. There are hundreds of men in these unemployment camps in the mountainous parts of Victoria, and a small reward would be an incentive to them to continue the search in an endeavour to clear up the mystery surrounding the loss of the Southern Cloud.

To-day I asked the Minister to say what steps had been taken to havewireless fitted to aeroplanes operating on aerial services within the Commonwealth, as recommended by the Air Accidents Investigation Committee. His reply was that many conferences had been held, but that as yet nothing had been done to carry out the committee’s recommendation. It is plain that something should be done very speedily; otherwise more lives will be endangered. The recommendation of the committee was as follows : -

That as soon . as practicable the carrying of two-way wireless and a qualified operator be made compulsory in aircraft engaged in regular scheduled passenger services. Action should bo taken to give immediate effect to this on the Sydney -Molbounie-Launceston service, where bad weather conditions often occur, and cloud flying is frequently necessary.

Reverting to the case of the staff corps officer who was one of six who were led to believe that they would be employed in the Public Service of the Commonwealth, only to find that there was no appointment available, and they had to leave the Service, I ask the Minister to review the matter. It is said that this officer was one of several who were less efficient than others. Who is in a position to pass such a judgment? Surely an officer who has qualified for military advancement by passing all the examinations of a military academy is as deserving of consideration and fair treatment as is an officer of, say, the Postal Department.

I hope that before drastic economies are effected in defence expenditure the Government will explore other avenues in which savings can be made. In addition to the savings in the Health Department already suggested, nearly half a million is spent annually on the Public Service in extraneous payments, holiday pay, waiting time, and so on, the cutting out or curtailment of which would entail no hardship. These and other matters should be taken into consideration when dealing with the defence vote.

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

.- I am in agreement with the honorable member for Balaclava. (Mr. White) that greater economy should be effected on the administrative side of the Defence Department. The bill provides for an expenditure of £309,830 on defence during the first month of the ensuing financial year. Last year the total expenditure on defence was a little over £3,000,000.

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– The expenditure provided for is 38 per cent. lower than the actual’ expenditure in 1926-27.

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

– If it were 48 per cent. lower it would be too much for this young country to spend on defence. From now on I intend to oppose such a huge expenditure on the defence of the country. No department provides greater scope for waste and extravagance on the part of highly salaried officials than does the Defence Department. The press has given us an indication that next year’s defence vote will be reduced by approximately £250,000. I am sorry that the reduction will not be greater. In previous years the defence estimates have been presented to Parliament in such a form that it has been difficult to trace the evidence of waste and extravagance. I hope that when the next Estimates are presented honorable members will be enabled to scrutinize closely all the items of expenditure on defence.

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– That will be done.

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

– I am pleased to hear the Minister’s assurance. I have on many occasions asked that steps should be taken to present the Defence Estimates in a form that would enable honorable members to identify items which might be regarded as wasteful or extravagant. Two items of expenditure incurred by the Defence Department this year could well have been avoided. One related to the purchase of torpedoes for the cruisers Canberra and Australia. These torpedoes, which have not yet arrived in Australia,cost about £250,000. The other item related to the purchase at a cost of £100,000, of a spare gun turret for these two cruisers, whereas five vessels of the British Navy of the same class in Chinese waters have not been provided with a spare turret. Such items of expenditure could well be avoided at a time like this. The Estimates should be submitted in such a way that honorable members can readily ascertain what proportions of the defence expenditure are required for material, salaries and contingencies. I shall offer the strongest objection to expenditure on material for our Navy which is not made in Australia. I trust that as a result of the careful examination of the Departmental Estimates the Minister and the Treasurer will be able to effect further reductions of the defence vote than have previously been attempted.

The honorable member for Balaclava (Mr. White) has spoken of the two submarines which have been sent back to Great Britain. Australia has certainly been rid of the very costly expenditure involved in maintaining those submarines, which cost us £962,000; but I suggest that instead of handing them over to theRoyal Navy we should have sold them to the British Government. We are not financially well enough off to give them to the British Government. If we had invited tenders from other countries for their purchase, we might have received quite a substantial sum for them. At any rate, in the state of our finances, I think we should have been perfectly justified in asking the British Government to buy them from us.

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– The cost of keeping them would have been £108,000 a year.

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

– That is why I am glad we have been able to get rid of them.

The 10,000 ton cruisers Canberra and Australia are quite unsuitable for

Australian requirements. They are far too costly to maintain, and according to naval authorities, men of high rank in the Royal Navy have to be employed to take command of them. If we are to pursue a policy of naval construction, our aim should be to build lighter craft, and thus provide an opening for Australian youths trained in theAustralian Naval College.

With regard to the economy suggested by the honorable member for Balaclava, I do not know what is contemplated, but I feel that at a time like the present there is no justification for having three separate boards. The Air Board, the Naval Board and the Military Board should be amalgamated.

Mr White:

– We want a Civil Aviation Board.

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

– I am opposed to the creation of an additional board, because that would mean extra expenditure, and the appointment of an under-secretary, and a large staff.

The honorable members for West Sydney (Mr. Beasley) and Werriwa (Mr. Lazzarini) referred to the lack of work at Cockatoo Island. I regret very much the state of affairs there, but I suggest to those honorable members that the mere provision of £30,000 or £50,000 for repairing and painting the iron roofs and guttering of the workshops would not solve the problem. What is required is a programme of work that will give employment to the skilled artisans, many of whom were induced to come to Australia at the time when war vessels were being constructed at Cockatoo Island. So far as I can see there is no prospect of finding such employment. The Government is not in a position to provide money for the construction of vessels for the Tasmanian service and for other needed works. In those circumstances, the sooner the establishment is transferred to the control of people who can operate it and provide employment for our people, the better I shall be pleased. It is most regrettable that the activities of the dockyard under Commonwealth control should be restricted by the judgment of the High Court in the Bunnerong case. To continue to retain control of the establishment when we are unable to utilize it to its fullest capacity, because of constitutional limitations and the inability of the Government to provide funds for the construction of vessels, would be a short-sighted policy. Any proposal that will enable the plant to be fully utilized, and provide employment for our workless people will have my most cordial support.

From time to time I have drawn the attention of successive treasurers to the folly of the present system of setting out trifling amounts on the departmental estimates. I refer to separate items, often of small amounts, for postage, office requisites, stationery, &c. Each of these items involves the keeping of separate ledger accounts, and necessitates unnecessary labour and expense. Although I have referred to this matter in the House on several occasions, this avenue of economy continues to be neglected.

Mr Yates:

– Let the Accounts Committee take up the matter.

Mr.C. RILEY. - I want the Government to take it up, for it offers undoubted scope for a substantial saving.

Eighteen months ago, I urged the centralization of Government accounts in the Federal Capital Territory. I do not desire to displace labour or relieve Government officers of their duties, but it is ridiculous that each department in the territory should have a separate accounts branch with its accountant, subaccountant, and accountancy staff. That state of affairs would not be allowed to continue in any private business. If the Government is anxious to eliminate waste, it should first turn its attention to the Federal Capital Territory. I mention these matters now in the hope that when the Estimates are before us satisfactory assurances will be forthcoming from the Ministers responsible.

Mr FRANCIS:
Moreton

.- I take this opportunity to bring to the notice of the Minister in charge of war service homes the distressful conditions of many returned soldier occupants.

Mr Theodore:

– This matter was raised by the honorable member for Henty (Mr. Gullett), and I intend to reply to his statement.

Mr FRANCIS:

– I am following up the matter in the hope that the Treasurer (Mr. Theodore) will make a general statement of the Government’s policy in regard to the occupants of war service homes. I remind the Government that so far the returned soldiers have honoured their obligations. The recent report of the War Service Homes Commissioner showed that the arrears represent only one per cent. At the present time, many returned soldiers are out of work, others are on rationed work, some are employed part time, and others get merely intermittent employment. All are anxious to pay their way, as the records show, but they are uncertain as to what is before them. I urge the Government to review the whole subject with a view to extending to the soldiers such consideration as their incomes during this period of depression necessitate. Many of them are afraid of losing their homes and the large sums they have paid towards the reduction of the principal owing to the Government, and they are particularly anxious to know how they are to carry on if the Commissioner insists upon the performance of the letter of their contracts. Following requests that have reached me, I have communicated with the War Service Commissioner on many occasions, and am pleased to acknowledge that as a rule he has been most considerate, but I desire from the Government a statement which will relieve the anxiety of all returned soldiers who are feeling the stress of present circumstances. If the Government will state its general policy towards the occupants of war service homes, they will know what relief they can expect, and will be able to arrange their domestic budgets accordingly.

Mr JAMES:
Hunter

.- I again emphasize the need for making available to the unemployed in the district I represent more of the surplus defence stores. We are told by some people that the care of the unemployed is the responsibility of the State, but in my opinion, the resources of the Commonwealth, as well as of the State, should be employed to ease the sufferings of those unfortunate persons, who, through no fault of their own, are to-day in a state of semi-starvation. This Supply Bill provides an amount of £309,830 for the Defence Department, being the estimated expenditure for one month. That sum should be employed co relieve the sufferings of the workers instead of being expended uselessly in drilling men in the noble art of killing others.

Mr White:

– Nonsense!

Mr JAMES:

– No doubt such training appeals to people of the type of the honorable member. I agree with Commander Kenworthy, of the House of Commons, that if r,he revenues of a country were utilized to feed the people and provide work for them, and only loan moneys were expended on armaments, wars would cease, because countries would not lend money to each other if they knew that it would bo expended on armaments which possibly would be used later against the lender. The clothing and blankets remaining in the defence stores should bc made available to the State Governments, which are carrying the whole burden of unemployment. The Minister for Home Affairs (Mr. Blakeley) has boasted of the treatment of the unemployed in the Federal Capital Territory as compared with the treatment given in the States. As workless men entering the Territory receive only one ration on arrival and another on departure, the Minister has little of which to boast. I hope that my appeal for extra clothing for the unemployed will not fall on deaf ears.

The occupants of war service homes in my electorate have suffered very much during the last few years. The BrucePage Government expelled many of them from their homes, and I appealed in vain to the then Minister in charge of war service homes (Mr. Paterson) to show consideration to those who, through unemployment, were unable to meet their dues. At one time the soldiers were lauded as the saviours of Australia. It is to the credit of the present Government and the Minister in charge of war service homes (Mr. Parker Moloney) that he reinstated those soldiers who had been -evicted from their houses, but, so far as T know, the Government has not yet proposed a reduction of the purchase price, in accordance with the general policy approved at the recent conference in Melbourne. For sixteen months the miners in my electorate were locked out by the owners, and the Mayor of Cessnock, Alderman Shakespeare, suggested that that period be added to the usual term of repayment. I hope that the Minister will give favorable consideration to that suggestion. Homes from which soldiers have been evicted are being let at higher rents titan .are charged by private owners. Mr. Beatty, of Swansea, an old-age pensioner, whose two sons served in the war, ©ne being killed and. the other crippled, complains that he is being charged £1 a week for a war service home, while the rent of privately-owned houses of similar dimensions is only about 15s. Recently I asked the Prime Minister a question regarding the installation of an experimental plant for the extraction of oil from coal. I myself have seen such a plant at Latrobe, in Tasmania, extracting oil from, shale, and the owner is satisfied that it can be put to economic use for the extraction of oil from coal. The report of Dr. Rivett, who recently returned from Europe and America, is entirely opposed to any action on the part of the Government in respect of the extraction of oil from coal. We realize that the oil interests, who are importing into this country .petrol and oils valued at £15,000,000 per annum, are not anxious that Australia should produce its own petrol requirements, and they are, therefore, prepared to go to any length to influence experts to report adversely against any scheme to extract oil from coal in Australia. In my electorate two brothers, named Lyons, are successfully working a plant in conjunction with the local gas works. It would be far better for the Government to assist men like that to carry out a work which will be of ultimate benefit to this nation than to cut down old-age pensions as is now proposed under the general economy plan.

There is an item appearing tinder the vote for the Prime Minister’s Department of £440 - monthly travelling expenses for Ministers of the Commonwealth. I have at present on the noticepaper a question relating to the ministerial grabstakes, which has not yet been answered. The sum of £440 seems to be excessive for monthly travelling expenses for Ministers. Over a period of twelve months the amount would be £5,2S0 and on the eighteen months’ life of the present Government would be £7,970 in addition to the salaries paid.

Mr Archdale Parkhill:

– Has the honorable member obtained an answer to his question?

Mr JAMES:

– Not yet. It is an absolute disgrace that on top of a salary of £36 or £40 a month, a sum of £440 should be provided for travelling expenses of Ministers, particularly at a time when the Government is telling the poor unfortunate old-age pensioner that he can live on 17s. 6d. a week.

Mr THEODORE:
Treasurer · Dalley · ALP

– The honorable member for West Sydney (Mr. Beasley), and the honorable member for Cook (Mr. C. Riley) have referred to Cockatoo Island. We know that there is very little work offering for Cockatoo Island, where a wellequipped dockyard and highly efficient plant are, unfortunately, lying idle. What is still worse, the highly-trained staff of artisans, technicians, and engineers which was employed there has been largely dispersed. Anything that the Government can do to improve matters, by giving essential work to Cockatoo Island to provide employment there, will be done. The honorable member for West Sydney suggested that a sum might be put on the Estimates for next year in order to provide for certain urgent repairs to the existing buildings in order to preserve the plant which they house. I have already had that matter brought before me. It would, of course, be false economy to allow the roofing of the buildings to fall into disrepair to the damage of the plant housed therein, and I shall, therefore, undertake to consider that suggestion.

The honorable member for Darwin (Mr. Bell) asked for better lighting of the east coast of King Island. That matter has not previously been brought under my notice, but I shall pass the honorable member’s suggestion on to the Minister concerned, though I do not know whether favorable consideration can be given to it, in the present difficult financial circumstances.

The honorable member for Werriwa (Mr. Lazzarini), the honorable member for Hunter (Mr. James), and others spoke of the drastic application of the administrative ruling relating to the closing of post offices, part-time post offices, and mail services, the natural out come of the stringent financial position and the falling away of postal business.

Mr James:

– The department is losing revenue by its action.

Mr THEODORE:

– It would certainly be bad business to close profitable services, and as it is possible that such a thing may happen as the consequence of an oversight or blunder, the matter will be carefully considered by thedepart- ment. I undertake to have consideration given to the specific cases mentioned by the honorable member for Hunter, and to ascertain whether reasonable or better facilities should be given to the places to which he has referred. The honorable member for Henty (Mr. Gullett), the honorable member for Hunter, and other honorable members referred to war service homes, and inquired what relief would be given to the occupiers of war service homes under the rehabilitation plan. I do not know whether an official statement has been made on this subject, but I think that the Prime Minister has stated that the occupiers of war service homes, and other debtors such as soldier settlers, will certainly benefit under the proposed plan. It would not be right for the Government to obtain relief to the extent of 22½ per cent. in respect of interest due by it to its creditors, if it were not prepared to give commensurate relief to its debtors. I cannot say at present to what extent the present interest rates payable by the occupiers of war service homes and by soldier settlers will be reduced, but they will certainly receive some benefit. It must be remembered that the loans chargeable to war service homes and soldier land settlement bear interest at 5 per cent., which is lower than the rate applying to comparable loans chargeable to the rest of the community. If the full amount of the reduction of 1 per cent. were passed on, it would cost the Government nearly £500,000 a year, and it is, therefore, scarcely likely that the Government will give the occupiers of war service homes and soldier settlers that full reduction.

The honorable members for Hunter (Mr. James), Werriwa (Mr. Lazzarini), and Cook (Mr. C. Riley), asked for a greater distribution of military stores and clothing. The Minister for Defence has made a liberal distribution of this material. He has liberated for distribution among distressed persons in the community, a large quantity of military stores and clothing. He has acted very sympathetically in this matter, because he understands the difficulties and need of the unemployed. Honorable members will, 1 think, find that the Government is sympathetic in this matter, and if practicable, a further distribution of materials, including blankets which are not likely to be needed by the department in the immediate future, will be made.

The honorable member for Balaclava (Mr. White) raised a number of questions which I ask him to allow to stand over until the Estimates, which will be before the House within three or four weeks, are under discussion.

The honorable member for Cook referred to the preparation of the estimates of the Defence Department, and the necessity for showing separate votes, so that honorable members may better understand the purpose for which the money is to bc used. Consideration has already been given to that matter. The other suggestion of the honorable member with respect to the keeping of individual accounts in too great particularity, thus adding to the cost of bookkeeping, will also be considered.

Mr HUNTER:
Maranoa

.- I wish to draw the attention of the Treasurer to an anomaly that has arisen in connexion with the sales tax. I understand that the Government intends to introduce a sales tax bill, in which will be incorporated certain amendments which have been found necessary during the last six or nine months’ operation of the act. What I wish to refer to is the imposition of the sales tax on certain technical sales, which are not sales in reality. That may happen in the case of a private individual who incorporates his business into a company, although no new assets or new money is being brought into the company. If I had £5,000 and formed myself into a company, that action would be treated as a sale from me to the company, and the sales tax would apply. That is altogether wrong, and could be rectified by a proper definition of what constitutes a sale, or, con versely, what does not constitute a sale. The application of the sales tax as at present prevents the incorporation of companies at a time when that is most needed. New companies, of course, are in a different category. I can quite understand that the action of a new company in buying fresh assets constitutes a genuine sale. But, in the case of an established business which has been operating perhaps for years in the hands of private persons, it is altogether wrong to charge a sales tax immediately that business is formed into a company, because, although it is a technical sale, it is not a real sale. It is not a sale according to equity, and particularly in the eyes of the person who has to pay the tax. I should like the Treasurer to give consideration to this and other anomalies which have been brought under his notice.

Mr THEODORE:
Treasurer · Dalley · ALP

– I shall take notice of the honorable member’s remarks, and endeavour to give effect to his suggestions. We have had only one year’s experience of the sales tax, and in that time a number of the earlier rulings have been amended and new rulings given. There will be still further amendments. In order to clarify the position we have tried to get all the rulings and amendments brought together in a concise form, so that those who are liable to pay the tax may know where they stand.

Mr MORGAN:
Darling Downs

– Although I listened with interest to the replies of the Treasurer to the various questions raised during this debate, I have not heard any reply to the very important question raised by the Leader of the Opposition (Mr. Lyons), who asked what steps, if any, would be taken to cause the Loan Appeal Committee to function.

Mr Theodore:

– I passed a reply to the Leader of the Opposition across the table. The committee will be called together at an early date.

Mr MORGAN:

– I think that the Treasurer might have taken the whole House into his confidence, because other honorable members than the Leader of the Opposition are interested in this matter.

Mr BEASLEY:
West Sydney

– I take this opportunity of bringing under the notice of the Treasurer the system that is operating in the Pensions Department in relation to invalid pensions. During the last six months the department has been following a course which I am sure many honorable members will agree is different from that followed previously. The Deputy Commissioner of Pensions has denied that he received directions from the Minister, or the Government, to carry out a different policy; but some explanation of the changed methods adopted recently should be forthcoming. Not only are new applicants for invalid pensions treated in the manner which I shall outline, but some persons who have been in receipt of invalid pensions for many years have had their pensions taken away. I shall quote one instance. A girl who had been in receipt of an invalid pension for twenty years, as a result of infantile paralysis, has had her pension taken from her within the last three weeks. On the adjournment of the House about six weeks ago, the honorable member for East Sydney (Mr. Ward) and I directed the attention of the Prime Minister to the changed policy now being followed by the department. The right honorable gentleman said that the Government had issued no instructions to the department to treat applicants for pensions less leniently than before. He added that if any cases of unfair treatment of applicants for pensions were placed before him he would have them investigated. I submitted about twelve cases, and the honorable member for East Sydney about fifteen cases; but so far we have had no reply to our representations, although it is about six weeks since the cases were submitted to the Prime Minister. As some of the applicants on whose behalf we made representations have no other source of income than their pensions, honorable members can well imagine their plight while investigations are taking place.

An ordinary layman has little chance of making a successful application for a pension if the department is not disposed to grant it, because the Deputy Commissioner, or the special magistrate, has the power to decide whether or not an applicant is totally or permanently incapacitated. It is useless for an applicant to produce one or more doctors’ certificates in support of his application, because the department takes no notice of any medical certificate other than that of its own medical officer. Surely, the family doctor of an applicant or the hospital doctor, who knows hi3 case so well, is the best judge, or at least as good a judge, of the degree of his incapacitation. It would appear that word is passed on to the departmental medical officer to say. that an applicant is not totally or permamently incapacitated. Carried to its logical conclusion, the policy adopted by the department means almost that an applicant must be lying on the broad of his back, scarcely able to move, before he is entitled to an invalid pension. Applicants are sometimes told that, although not in robust health, they are capable of performing light duties. I ask what chance is there of such persons receiving light employment in these days? The young lady whose case I have mentioned is scarcely able to walk along the street.. What work could she do? When the department is asked to say what employment an applicant could undertake, ii replies that that is not a matter for the department, to determine. The way in which applicants have been treated by the department during the last six months can only be described as callous. It is true that I have not been a member of this Parliament very long, and that consequently my experience in dealing with the department is not so great as that of some other honorable members. Nevertheless, I have noticed a distinct, change in the department’s attitude to applicants for pensions at the time of my election and during the last six months. Previously, I had little difficulty in convincing the department of the eligibility for pensions of those persons on whose behalf I made representations, but now it is almost impossible to obtain a pension. The Treasurer (Mr. Theodore) should give some consideration to the opinions of medical men other than those who are consulted by the department. As in the case of lawyers, so in the case of medical men, there is often a difference of opinion. Courts of various jurisdiction have been set up to decide differences of opinion between legal men, and it seems to me that some such tribunal should be established in the medical realm in regard to these pension claims.

Medical men, who claim to be, and are, judges of the extent to which applicants are incapacitated, have told me that they have been unable to understand why applications for pensions which they have supported with certificates have been rejected by the department. My experience during the last six months leads me to the conclusion that the department has been instructed to reduce the number of new pensions as well as to take away some of the pensions already in existence. Whatever the financial difficulties confronting the country, I do not think that any honorable member would subscribe to a policy of imposing further burdens on the sick and infirm members of the community.

Mr Theodore:

– I should be glad if the honorable member would let me have particulars of the cases he has mentioned.

Mr BEASLEY:

– I shall do so. I feel sure that the Treasurer does not agree with applicants for pensions being treated in this way.

Mr Theodore:

– No directions have been given by the Government to the department to vary the usual procedure.

Mr BEASLEY:

– I am pleased to have that assurance.

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

– My experience of late has been similar to that of the honorable member for West Sydney (Mr. Beasley).

Mr Archdale Parkhill:

– I have always found the department very reasonable.

Mr BEASLEY:

– Until recently I had no occasion to complain regarding the department’s treatment of applicants for pensions, but during the last six months the change of policy adopted by the department has been noticeable. I realize that some applicants are not entitled to pensions, and also that the circumstances of the people in regard to pension matters in different electorates differ considerably. The district represented by the honorable member for Warringah (Mr. Parkhill) might not contain so many persons who apply for pensions as does the district represented by the honorable member for South Sydney (Mr. E. Riley) or the honorable member for Cook (Mr. C. Riley), or that which I represent.

Mr Archdale Parkhill:

– My electorate contains a good many invalid pensioners.

Mr BEASLEY:

– The greatest call for invalid pensions is likely to come from industrial districts. Honorable members representing such electorates are more likely to know of any change of policy on the part of the department than are honorable members representing rural or residential constituencies. I appeal to the Treasurer (Mr. Theodore) to do what he can to help those who cannot help themselves.

Mr MAXWELL:
Fawkner

.- I gather that it is the intention of the Government to introduce amendments to the sales tax legislation in the near future. That being so, I ask the Treasurer to bear in mind a decision of the Commissioner which has recently been brought under my notice. By that decision, stone quarried by a municipality from its own quarry, for use on the roads within its own territory, has been subjected to a sales tax. Surely it was never intended that such an imposition should be made. I ask the Treasurer, when framing his amendments, to exempt such cases from the tax.

Mr Theodore:

– I shall see that the matter raised by the honorable member is given careful consideration.

Mr JONES:
Indi

.- I rise to support the representations made by the honorable member for West Sydney (Mr. Beasley) with respect to invalid pensions. Recently, there was brought under my notice the case of a labourer with a large family who lives in a country district. His family medical officer has certified that he will not again have the use of his right arm, and that in all probability the limb will have to be amputated at the shoulder. If the man lived in the city he might be able to obtain light work, but he has no chance of obtaining employment in the country. His claim for a pension was rejected by the Melbourne office of the department. I have since submitted his case to the Assistant Commissioner, in Canberra (Mr. Metford). Would it not be possible to stretch a point to meet this and similar cases?

Mr Theodore:

– It would require an amendment of the act.

Mr JONES:

– In that case the act should be amended. I remind the Treasurer that returned soldiers similarly afflicted receive a specified pension. If necessary, the act should be amended to meet such deserving cases.

Mr Theodore:

– Did the man lose the use of his arm as the result of an accident in industry?

Mr JONES:

– I am not acquainted with the details of his case. All I know is that his own medical officer has certified that he will not again have the use of his arm, and that in all probability it will have to be amputated. The pensions department has refused his claim for an invalid pension. I asked a question in the House some time ago with a view to having firewood exempted from the provisions of the Sales Tax, or, failing that, that coal and gas be brought within the ambit of the act. An anomalous position is created by collecting the sales tax on firewood, which is the poor man’s fuel, when coal and gas are exempt.

Mr WHITE:
Balaclava

.- I again draw attention to the fact that it is impossible to obtain a complete list of the findings of the Taxation Commissioner regarding the operation of the Sales Tax Act. I directed the attention of the Minister to this matter recently by means of a question that I placed on the noticepaper. Almost weekly we read of new decisions by the commissioner, and the result is that the commercial community is obliged to refer to findings published previously in the press. I also draw the attention of the Minister to the desirability of making it compulsory to show the amount of the sales tax on invoices. Certain associations have agreed to follow this practice, but if an amendment requiring this to be done were inserted in the act, a good deal of confusion would be avoided.

Mr Theodore:

– I will consider that suggestion.

Mr PATERSON:
Gippsland

.- In view of the fact that the Treasurer has informed the House that consideration will shortly be given to a bill to amend the Sales Tax Acts, I desire to place certain information before the Minister. Unprocessed primary products are exempted from the sales tax, but, for the purposes of the act, chaff is not regarded as an unprocessed primary product, owing to the fact that it has been changed in form to some extent by the process of cutting. However, there is a line in the schedule which states that foods for live-stock shall be exempt, and chaff for that reason is exempted. There is a provision that bags, which are containers of unprocessed primary products, shall be exempt; but, as chaff is not accepted in that category, the bags containing it are not exempted. Again, the fact that bags, like most jute goods, are imported, is a second reason why they are exempt. It is rather extraordinary that the container of a commodity, which Parliament has decided to exempt, is subjected to this tax. It is generally admitted to be a wise policy of the Government to exempt food for live-stock from the sales tax. I take it that the object is to prevent undue increase in the cost of this food, and surely it is rational to expect that the containers of goods specially exempted for that reason should themselves be exempt. I bring this matter under the notice of the Treasurer so he may give consideration to it before he brings down the amending bill.

Mr MORGAN:
Darling Downs

– A few minutes ago I asked the Treasurer to state what was his answer to the Leader of the Opposition regarding the calling together of the special committee appointed to carry out the negotiations for the launching of the conversion loan.

Mr Theodore:

– I said at the time that I had already intimated to the Leader of the Opposition (Mr. Lyons) that the committee would be summoned at an early date.

Question resolved in the affirmative.

Resolution reported.

Standing Orders suspended; resolution adopted.

Resolution of Ways and Means founded on resolution of Supply reported and adopted.

Ordered -

That Mr. Theodore and Mr. Scullin do prepare and bring in a bill to carry out the foregoing resolution.

Bill brought up by Mr. Theodore, and passed through all stages without amendment or debate.

page 2949

DEBT CONVERSION AGREEMENT BILL

Second Reading

Debate resumed from the 23rd June (vide page 2919), on motion by Mr. Theodore -

That the bill be now read a second time.

Mr CURTIN:
Fremantle

.- This is the first of a series of measures which represent tlie plan by which this Parliament is to do its part in implementing what is known as the Premiers Agreement. As I understand the position, to reject any part of the plan is to reject the whole. By this agreement the Premiers of the States and their respective Governments propose, not only to meet their present financial difficulties, but also to promote industrial and general prosperity. Regarding the three measures proposed to be submitted to the Parliament as a homogeneous proposal, I consider the plan to be entirely at variance with what the Commonwealth Government has hitherto declared to be the proper means of coping with the national crisis. It contradicts, in principle, the policy which the Government has promulgated in the country which has been opposed by other parties in this House. The proposals involve a recantation on the part of the Government with respect to its previous attitude towards the problem of financing governmental commitments, and also the question of the national capacity to meet other obligations. It has been declared, time and again, that the various governments will be incapable of adjusting their budgets until such time as a considerable diminution occurs in the large number of persons who to-day are incapable of contributing to the national income.

I find that these proposals, in essence, reverse the previous conception of the Government that national rehabilitation was to be pivoted upon industrial restoration, in that it; now declares that the process of such restoration is to be the balancing of governmental budgets. I shall not weary the House with an extended reference to the views previously put forward by the Government. I accept the statement of the Prime Minister (Mr. Scullin) that, in submitting this plan, he made no effort to justify what he has previously said regarding the present crisis. My objection to the plan is that it seeks to isolate Australia’s problems from the world situation. It entirely overlooks the fact that the difficulty is essentially a monetary one. OU the 22nd June the Sydney Morning Herald published the views on the world economic crisis of Lord D’Abernon, Britain’s celebrated war ambassador to Berlin, and head of the British Trade Mission which thoroughly investigated the South American market problem last year. I place his views in the forefront of my observations concerning this plan, because they seem to go to the heart of the problem, whereas the plan does not. Lord D’Abernon said -

Every month evidence accumulates showing that the main cause for the trouble is of a monetary nature, and that the remedy can only be found in measures of monetary reform.

This plan abandons the Labour policy of monetary reform. It assumes that the difficulties of this country are to be met by measures other than those which involve the reformation of our monetary system. In that essential aspect of the case the plan cannot but be condemned, unless one is to confess that the attitude which the Government has exhibited towards the problem for nearly nine months is also to be condemned. The essential difference between the Government’s policy as previously advocated, and the policy now proclaimed, is that the previous policy declared that one of the fundamental conditions of recovery was, not only the attainment of price stabilization, but also the improvement of the internal price level. Regarding unemployment, I have said before, and I say again, that there can be no very effective reduction in the numbers of the workless in Australia, nor any clearance of the accumulated stocks in Australia’s warehouses, except as the result of an impetus given to recovery by an improvement in the price level. All over the world, in every period of crisis, the process of recovery, nationally and economically, has coincided with an improvement in price levels.

Mr Theodore:

– That will be one of the results of this plan.

Mr CURTIN:

– It is extraordinary that the Treasurer should expect prices to recover in Australia, while he declares to the great mass of the consumers of Australia, who are either workers for wages or recipients of old-age, invalid or soldiers’ pensions, that their capacity to buy in the market is to be lessened instead of increased. There seems to be an essential contradiction in a policy that expects an improvement in the price level to coincide with an aggravation of the deflation process. I need not tell the Treasurer, because he has himself declared it again and again, that the national income to be expected under the operation of this plan is to be less than that for the year 1931. The Prime Minister stated that our national income had fallen substantially in comparison with that of the year before last, that it was still falling, and that under this plan might be expected to fall still more. If I may enlarge further upon the interpolation of the Treasurer, who seems to expect that the Government’s plan will result in the absorption of the unemployed, let me point out that the report of the experts directs attention to the fact that it will be necessary under the plan to provide £3,000,000 more during the coming year for the relief of unemployment than was provided last year. In this respect, the report of the experts seems to be destructive of any expectations which the supporters of the plan may entertain.

The Labour Executive’s declaration of hostility to parts of this plan seems to me to be decisive.

Mr Guy:

– The Executive had a bit to say on both sides.

Mr CURTIN:

– Nevertheless, its declaration was decisive, because the rejection of any of the conditions of the plan necessarily involves the rejection of the plan itself. This plan, not only as stated to the country by the Prime Minister, but as formulated by those associated with its proposal, is contingent on the reduction of wages, pensions and social services. Unless those reductions are effected, the whole plan falls to the ground. Therefore, when the Federal Labour executive declared its definite opposition to a particular part of the plan, it must have intended to signify its rejection of the whole plan, because it was previously acquainted with the essential conditions of the scheme.

Mr Guy:

– Then why did the Executive allow members a free hand?

Mr CURTIN:

– In order to make it clear that, in spite of the decision of the majority of the Parliamentary Labour party which, in ordinary circumstances, would have been binding on all members of the party, members who felt disposed to oppose the plan were to be free to do so.

Mr Gullett:

– A most unusual indulgence !

Mr CURTIN:

– This plan has been put forward within a month of what we are told will be certain Government default unless the plan is adopted. The reasons for this certainty of default, we are told, are to be found set out in the memorandum which Sir Robert Gibson forwarded to the Loan Council, and to the Treasurers of the States, under date of the 2nd April. I remind honorable members opposite, and some on this side also, that a month after the receipt of that letter in which Sir Robert Gibson intimated the extent to which the banks would come to the assistance of governments in meeting their current liability, a motion of want of confidence was moved in this House by the Leader of the Opposition. That gentleman contended that unless drastic reductions in governmental expenditure were effected - and he enumerated the particular heads of expenditure to be reduced - it would be impossible for Australia to meet her obligations. The items of reduction which he enumerated now form the basis of the economies set forth in the plan we are considering. The case put forward by the Leader of the Opposition was answered by the Prime Minister who, on the 8th May, rejected all the implications contained in Sir Robert Gibson’s letter of the 2nd April.

Mr Beasley:

– Then why the surrender now?

Mr CURTIN:

– I do not know. I am compelled to remark - and I do so with all respect- - that if on the 8th May the Prime Minister and the Government, in their capacity as leaders of this country and of this party, did not realize the full significance of what was contained in Sir Robert Gibson’s communication, it is a reflection on their statesmanship. If they did realize it, I find myself incapable of understanding why the Labour party at that time presented to the country a policy it knew it could not carry out, with the certain knowledge that drift was inevitable, and default the inevitable consequence of drift. Thus, not only does the plan involve the violation of everything the Government put forward as its basic policy, but, worse than that, it involves leaving the Labour movement, and those pledged to its principles and policy, in the position of having iu one month defended before the country that which was impossible of attainment, and of having in the next month to explain evasively that they did not know the difficulties confronting the country, or, knowing them, were engaged in stating an entirely false presentation of the case. [ know that these are hard words. I am using language that I regret it is necessary to use, but all of us have our responsibility, not only to the parties we support, but also to the constituencies we represent. As public men we are bound to stand by the declarations we have made to the public, and if it comes about that we are compelled to acknowledge that we have been wrong, those of us who have been misled, should place the responsibility on the right shoulders.

This plan is, in its essence, the plan of the party opposite. The Deputy Leader of the Opposition (Mr. Latham), addressing the Nationalist Convention in Sydney yesterday, claimed that, in substantial measure at least, the Government’s plan represented the policy of the party opposite. I do not admit that simply because he said it, but I recognize many identities between this plan and the one which honorable members of the Opposition have advocated for months past, and which I, as a loyal member of the Labour party, have felt it my duty to oppose.

Mr Theodore:

– Does the honorable member say that the Leader of the Opposition or his supporters ever advocated the arbitary reduction of interest?

Mr CURTIN:

– I shall not shirk that pertinent question. I believe that the public generally, and certainly all honorable members of this House, will recognize that the claim of the Opposition was that once Government budgets were being put in such shape as to show even at some definite, distant time, a probability of attaining equilibrium, confidence in Aus tralia would be restored, and it would then be practicable for proper steps to be taken to reduce interest rates. I hope that I have never misunderstood the Opposition policy, and I believe that I have stated it fairly. I understood what they advocated clearly enough, but I never believed that they would be able successfully to carry it out. I shall show later that this proposed reduction of interest rates, even though it be arbitrarily effected, will not - having regard to the particular nature of Australia’s difficulties - provide that measure of relief which its sponsors expect.

I wish now to refer briefly to the Government’s proposals for the reduction of interest rates. If a comparison is made of the average pre-war rate of interest payable by Australian Governments, and the basic wage paid in Australia before the war, with the average rate of interest that will result from the adoption of this plan, and its effect on wages, it will be found that the proposed reduction in interest increases the return to Australian bondholders by 10 per cent., and reduces wages by 10 per cent. That is one fact which I present as unmistakable evidence of the unfairness of the plan.

Mr Archdale Parkhill:

– The honorable member has to prove that statement.

Mr CURTIN:

– As my time is limited, I invite the honorable member for “Warringah (Mr. Parkhill) to disprove what I have said when he speaks to the bill. There are also numerous statisticians and financial experts in the employ of the Australian newspapers which are supporting this plan who may challenge the correctness of my comparison, if they are capable of doing so. Under this plan it is proposed that the Commonwealth Government shall pay to Australian bondholders £2,400,000 less, and to other recipients of Commonwealth money, £6,141,000 less than they are now getting. But that is not all. The plan not only reduces the payments to those receiving money, other than interest, from the Government, by £6,141,000, but also contemplates a drastic reduction in State governmental expenditure. This will affect the purchasing power of the Australian people, but will not alter, by one iota, the internal national economy. except by an all-round deflation of values. And while it does that, it contradicts its own premises by adding £6,400,000 to the indirect taxation of the consumers. In effect, it provides that the wageearners, whether employed by governments or by private employers, shall receive less, because the Government’s policy will be reflected in the life of the community as a whole. Inevitably that must be so. It has been declared that the influence of the drastic reduction in interest rates affecting governmental transactions will be reflected in interest rates generally. It is proposed to effect the rehabilitation of Australia by reducing the payments which the Government makes to the people, and by increasing the obligations of the people who make payments to the Government. The more one examines this plan the more evident that becomes. A reduction of £1,000,000 is to be made in “miscellaneous services”, which will further affect the consuming, and consequently the spending, capacity of the people. Under this plan earnings are to be reduced by £8,500,000 and the cost of living is to be increased by £7,500,000. Relief to the extent of £16,000,000 is to be obtained by reducing the payments which the Government will make to the people by £8,500,000. and by demanding £7,500,000 from them. This is to be done at a time when it is admitted that the national income has been enormously reduced, and when we are certain that the capacity of the people to pay taxation in 1932 will be considerably less than during the present financial year. The essential fallacy of this plan is manifested by the effect it will have upon interest rates. In 1929, according to official estimates, our national income was £645,000,000, while the interest payments in that year were roughly £55,000,000. That is to say, in that year nearly one-eleventh of the national income was required to meet governmental interest charges. The national income for 1932 is estimated at £450,000,000; but in that year, after allowing for the relief which the Government expects by virtue of the proposed reduction of interest rates, £53,500,000, or practically one-eighth of the national income, will be required to meet governmental interest charges underthis plan of national rehabilitation.

Mr Lewis:

– Including exchange?

Mr CURTIN:

– Exclusive of exchange. If we add £10,000,000 to cover exchange on governmental interest obligationsoverseas, approximately one-seventh of the national income will thus be absorbed. It is the proportion of payments toresources which determines whether the strain is reasonable or excessive. Having regard to our capacity to pay under this proposal, there will be an enormous increase in expenditure next year as compared with 1929. The saving in interest is £6,500,000, but exchange will cost £10,000,000. “When the whole plan is in operation, and everything expected of it by its authors is realized, the Governmental’ deficits will be £14,000,000, of which £10,000,000 will be represented by exchange payments.

That brings me to the point that the whole plan, irrespective of its origin, and regardless of its sponsors, discloses the fact that it has been submitted in. order to avoid any possibility of failure to meet our obligations to our overseas bondholders. It is on that that the plan is pivoted. Regardless of the sacrifices demanded in Australia, and the necessary readjustments of our economic life, the motive is, not to secure national rehabilitation and the balancing of governmental budgets, but to prevent our position becoming such that we cannot meet in full our overseas obligations. I do not say whether that is or is not a proper motive; but I believe the country should know that that is the Government’s object in submitting the plan.

Mr Gullett:

– The honorable member must have a very poor case if that is all he can submit in objecting to the scheme.

Mr CURTIN:

– Is it not so?

Mr Gullett:

– No.

Mr CURTIN:

– This plan envisages, it is said, complete national rehabilitation and, we are told, contemplates absolute equality of sacrifice. Yet, if we search the plan from beginning to end, and closely examine every measure which is to be submitted to this Parliament to implement it, we shall find that, although sacrifices are to be demanded from practically every citizen of this country, there as no suggestion that those persons outside Australia to whom the people of this country pays enormous toll will be expected, let alone asked, to make any contribution towards Australia’s relief in its time of crisis. The honorable member for “Wimmera (Mr. Stewart) dealt with what he considered omissions from the plan. I direct attention to a cardinal omission. Although one-half of the public debt is domiciled, and, consequently, one-half of the interest obligations of this country are payable, outside Australia, these overseas bondholders are not to be asked to contribute in any way to the restoration of national equilibrium.

Mr Archdale Parkhill:

– What does the honorable member suggest should be done?

Mr CURTIN:

– One of its purposes is to fix an interest rate of 4 per cent, for all government stock, and the State Parliaments arc to be asked to pass legislation fixing an average rate of 5 per cent., or thereabouts, for private mortgages; but how can those rates be maintained? How can we be certain that for 30 years, or any other period, the money market will remain in such a condition that 4 per cent, will be a fair return in interest. There can be no assured declaration that such a rate is a fair return on government securities. There is to be no variation in the price of money under this plan, although all other factors are variable. What will happen if the whole of our internal indebtedness is converted into Commonwealth bonds? This Parliament is undertaking the definite obligations of unification without enjoying any of its benefits. There is no suggestion of a reconstruction of the constitutional relationships between the Commonwealth and the States, although, under the plan, it is proposed to convert all existing securities into Commonwealth securities. In reply to a question, the Treasurer (Mr. Theodore) dealt with the whole question of Commonwealth securities. What will be the position, if they go to £S0 or £90, or if they fall from par at all? It will be impossible for the States, under their legislation, to enforce a fixed rate of 5 per cent, for ordinary accommodation, such as is required for the development of farms, factories or workshops. How are we to maintain the rate of interest at 4 per cent.? It can be done only by the banks agreeing to support the market. I do not know whether or not the banks have undertaken to do that. If they have - and this plan is not enforceable unless they have - it means that they have agreed to do what they have systematically and definitely refused to do in connexion with any previous underwriting of Australian loans. The discussion - to use a mild term - which the honorable member for Wilmot (Mr. Lyons) had with his colleagues when he sat upon this side of the House concerning the £28,000,000 conversion loan, arose out of the desire that the banks should support the market in connexion with it. The honorable member for Wilmot said that they would not do it; and they did not do it. This plan will not work unless the banks agree to do now what they refused to do then. It is pertinent to ask why the banks have agreed to make this remarkable change. A further point is that the banks cannot go to the support of the market under these circumstances unless they resort to the creation of bank credits. Furthermore, they have undertaken to meet next year, Government deficits that are now estimated at £14,000,000; and at the same time they will have to come to the rescue of Government bonds in order to keep them at an interest rate of 4 per cent. It is not certain that the deficits will be only £14,000,000. If the income expectation next year is not borne out any more faithfully than the income estimate for the year which is now closing, those deficits will be very much greater than £14,000,000. Therefore, implicit in this plan is the willingness of the banks to resort to bank credit inflation. I agree that they can do that without an inflation of the note issue. Under the measure that recently passed this Parliament, it is within the competency of the Commonwealth Bank to have a note issue of approximately £90,000,000 for a period of three years, which is the period envisaged by this plan. Taking the plan in conjunction with that legislation, it is quite obvious that any price recovery such as that which the Treasurer a few moments ago interpolated that he expected to see, would be the result of an inflation of credit and not the effect of the operation of this plan in the direction of an improvement of the industrial structure.

Mr Theodore:

– “Well, then, what is it that the honorable member is opposed to?

Mr CURTIN:

– I am opposed to the plan in its entirety, because the variatious of interest rates are contingent upon my acquiescence in the reduction of payments to old-age, invalid, and war pensioners, and because implicit in the plan is an abandonment of the whole conception of the Labour movement in regard to the reconstruction of society. Although the plan professes to be a complete plan, it leaves untouched the top-heavy political system of this country ; it takes no cognizance of the enormous opportunities for economy that have been presented to statesmen for nearly a generation ; and in effect it says to me, “Go out and justify the taking of 2s. 6d. a week from the income of an old-age pensioner, while at the same time it is proposed that we shall continue to maintain the panoply of six sovereign States, with six agents-general, six governors, and all the pomp and ceremony of thirteen chambers connected with the political mechanism of this country.

I say, too, that one of the cardinal omissions is that the plan leaves entirely unaffected the whole of the liabilities of policy-holders in insurance companies in Australia, of whom there are thousands. The honorable member for Maribyrnong (Mr. Fen ton) last night referred to the contributions that insurance companies had made to Australian loans, and emphasized the contention that those companies were, for the most part, the repository of the savings and the securities of the poor, the thrifty, and the moderately well-to-do. What is to happen to the man who, in the last eight or ten years, undertook to pay £25, £30, or even £40 by way of premium to an insurance company in order to make some provision for his old age, or for his dependants in the event of his death? The incomes of these men are to be deflated. This plan represents a complete surrender to deflation. It is an abandonment of every effort to prop up the internal economy of Australia on the basis of the average of prices from 1925 to 1929; yet it leaves hundreds of men and women with the obligation to discharge next year, on greatly reduced incomes, the liabilities that they have incurred in order that they might make provision for their old age. There is a fundamental difference between a policy-holder in an insurance company and a depositor in a savings bank. If the policy-holder does not continue his payments he loses the whole of his savings; whereas if a man cannot continue adding to his savings bank account, he does not lose anything.

Summarizing, I say that this plan involves a falling price-level, aggravating the unemployment problem-

Mr Theodore:

– No!

Mr CURTIN:

– How, then, can the honorable gentleman account for the additional £3,000,000 which the experts say that governments will have to provide for sustenance next year? The plan further involves a restricted demand, making business conditions more difficult than ever. These difficulties will not be offset by any advantage to the wageearner; owing to wages falling with the cost of living, the wage-earner will be able to reap no advantage. A further consideration is that, ultimately, bondholders and receivers of interest will make no real sacrifice, because the adjustment of the price-level will make the purchasing power of their 4 per cent. as great as was that of the interest which they previously received. That is the case which has been put up to them.

Mr Theodore:

– How can that be so if prices increase?

Mr CURTIN:

– I say that prices will fall. The reason that I have given for my attack upon the plan is that it constitutes an abandonment of the policy that this Government previously put forward, which had for its purpose the restoration of the price level to the 1924-29 average. I say that one of the effects of this programme will be a fall in prices. If they do not fall, how in the name of conscience can this Parliament justify 20 per cent. cuts in wages, pensions, and all other governmental expenditure? Therefore, I say that wage-earners will get no benefit from the plan, because falling wages will keep at par with prices on the new deflated basis; whereas the bondholders will gain, because with every fall in prices the purchasing power of their 4 per cent. will become greater. I say, further, that, with the exception of importers and certain exporting firms, the trading businesses will probably share heavily in the sacrifices that are to be made. I do not represent the trading businesses of this country, but one must endeavour to visualize the plan as a whole, and to calculate its consequences. This declaration of mine will probably be borne out. Wage-earners, the majority of salaryearners, and primary producers will be the hardest hit, because, if this plan has realization ahead of it, exchange will have to drop. One of the purposes, surely, should be to abolish the exceptional charges on account of exchange that are now imposed upon Australian Governments. The deduction of over £3,000,000 from pensions is an exaction from the poor relatively greater than the £6,500,000 which is to be taken from the bondholders. I place that in the forefront of my opposition to the plan. [Leave to continue given.]

I thank the House for its courtesy, and shall not trespass upon its generosity. It is a matter of certainty - I speak now to the country rather than to the Parliament - that the plan will provide the basis upon which the banks will enable the Government to avoid default for the months that are immediately ahead. Thereupon it will be found that certain parts of the plan, particularly those relating to finance - governmental and private mortgage rates, and bank rates generally - are not workable or enforceable. There will be discovered constitutional or other impediments, leading to a radical recasting of these sections. The only permanent sections are those relating to the contraction of governmental expenditure. On that aspect I need do no more at this stage than direct attention to the very notable speech delivered by the Deputy Leader of the Opposition (Mr. Latham) in relation to the constitutional weaknesses of the plan.

The Labour movement is faced, in connexion with this plan, with what I recognize as a great crisis in its history and its structure. I believe that, even if every honorable member who sits upon this side supported the plan, the organizations of Labour, and the men and women who are units in the movement, would leave the movement rather than support it. That is my confident expectation. I believe, too, that they can have no respect for a party, certainly not their own party, if, in a time of great national crisis, it can see no alternative but to carry out and apply the policy of its opponents. Surely, if the programme of the Premiers Conference is a right programme for a Labour government to put forward, it carries upon its face the admission that the static policy of the Government either is useless or cannot be put into practice; and any policy that, in a period of national difficulty, cannot be put into practice, is one that a party might as well not possess.

What was required in this crisis was positive action. I think that I am entitled to remind the House that some three or four months ago, long before the 30th of June was in sight, and when time permitted for one or the other of two plans to be put in operation, I suggested to the Government, and to the party to which I belong, that it had to face up to the issue; that it had either to find ways and means of putting its own programme into operation, or else permit its opponents to give effect to their programme. I said that matters could not be allowed to stand where they were; that we were between two opposing principles; that the time was past for the negation by the Government of the Opposition’s plan, and by the Opposition of the Government’s plan, and that the country was in too dangerous a state for this warring of factions to remain in an indecisive state. I did not object to the disputation between the two policies Or the two parties, but I asked for a decisive ending of the struggle. I declared that either this Government should go to the country and put its fortunes to the te3t, or permit the Opposition to form a government and put its policy into operation if it could do so. I have been told that that was merely a gospel of perfection, that it suggested a cowardly running away from the obligations of government. I do not consider that it did. There is no cowardice in giving due recognition to the realities of a situation.

Mr Archdale Parkhill:

– Is not the Government doing that now?

Mr CURTIN:

– It is, upon the basis of the policy endorsed by the honorable member’s party. The right people to carry out that policy are those who have been sponsoring it for the past year. Those who do not believe in it are confident that it will fail, that it will produce all sorts of reactions; and they should at least be free, when the time comes, to declare that they are in no way responsible for it.

Mr Theodore:

– There are many who would wash their hands of all responsibility.

Mr CURTIN:

– I am not one who would do so. I refuse to be guilty of what is worse than the surrender of a political faith. When a person surrenders, he gives up his sword, and ceases to be a combatant. But this Government has not surrendered its sword; it is continuing to use it and to use it against the interests of the very people in whose interests Ministers were put into power. I would not complain, even if pierced to the heart, if it were done in clean and open combat with the political sword of honorable members opposite; but I more than object to an assassin burying his dagger in my back, and a poisoned dagger at that. That was an action of which even Brutus was incapable.

Mr Theodore:

– The honorable member is becoming drunk with his own rhetoric.

Mr CURTIN:

– As the honorable gentleman challenges me, let me say that 1 voted for his reinstatement in office because he fought the process of deflation and the even then drastic economies which some were endeavouring to force upon the Labour party. Furthermore, the honorable gentleman was associated with the formulation of the policy which this party advocated all through the Parkes by-election, a definite and positive programme which was capable of application had the Government and the party proceeded to carry it through to the last of their resources. The programme then enunciated by the honorable gentleman won my vote for his reinstatement to the treasurership. I said to myself, “At last, this Government will fight for something “. The honorable member for Maribyrnong (Mr. Fenton) knows that that is so. The personal or private transactions of any honorable member do not influence me in the least. I believed that this country had to choose between two policies that were opposed in their aims. Perhaps I was wrong. It may be that that programme would have failed. But, at least, I was prepared to fight for it, and, if necessary, go to my political destruction, in supporting the faith that was in me.

Mr Archdale Parkhill:

– That is what is happening.

Mr CURTIN:

– We have now gone down on that policy, and the worst feature is that we have done so, not by the votes of the Opposition, but by the passive acquiescence of this Government. Now the honorable the Treasurer will stake his political existence to carry into effect the policy that was formulated by the Melbourne Premiers Conference, and will even cause the resignation from cabinet rank of tried, loyal, Labour supporters in doing so. But he mil not do that in respect to the idea which he put forward, and which led to his reinclusion in the Government. E tell those who oppose this plan, and who will do so when they go before their constituents, that they will at least live as supporters of the Labour movement.

Mr Archdale Parkhill:

– By running away.

Mr CURTIN:

– I have never run away from any thing in my life.

Mr Archdale Parkhill:

– The honorable member is doing so now. His criticism lacks one constructive thought.

Mr SPEAKER:

– Order !

Mr CURTIN:

– If I thought that the interests of the country would be served by this plan I would support it, but I believe it will do Australia disservice. It will bring about the demoralization of the Labour movement, and render a service to its enemies which will give them an era of political mastership that will continue for many years. It will make the Labour movement something of which those who believe in it will despair, and cause them to refrain from putting their trust in it in future. Previously, whether the Labour movement was in power or not, it was at least noted for its consistent adherence to its principles; it was recognized as the party that preferred to be defeated at the polls on a straight-out issue, rather than mislead the people. I believe that the faith that it has built up in the minds of its supporters will be destroyed. Were I a young man whose ideals had not been clouded by the confusion of political experience, I should almost despair of the Labour movement for having in this crisis robbed its supporters of that splendid tradition of readiness to do or die, of acceptance of victory or defeat, that has hitherto won the respect even of its opponents.

I oppose this plan in its entirety, because 1 believe that its ultimate consequences will prove of no service to Australia. I am confident that it will make the existing situation worse for the masses of the people, and more particularly during the next six months. I am of the opinion that those who have foisted the plan upon the Australian people will have to reconcile what they now do with its consequences, and as to the result will find it impossible to satisfy a disillusioned community.

Sitting suspended from 6.15 to 8 p.m.

Mr GULLETT:
Henty

.- The vote which 1 shall give in favour of this bill, and of the other measures involved in the Government’s plan for the financial rehabilitation of Australia, will carry with it more complete confidence than any vote that I have given since I became a member of this Parliament. I believe that this plan will save Australia in a financial sense, and that no other will do so. It has been said that it represents the policy of the Opposition. I deny that that is so. It is true that the Opposition has favoured a plan of this kind, and that it has steadily advocated the adoption of an old-fashioned way of getting out of our difficulties, namely, that this and all other Australian Governments should live within their income at any given time, irrespective of what that income may be. To that extent the Opposition has always favoured a plan of this kind. But where did this plan originate? It is, in fact, the plan that was embraced in the August agreement - an agreement of which every member and supporter of this Government approved, and to which the Leader of the Government deliberately placed his signature in Melbourne, apparently, with the concurrence of every one of his followers.

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

– That is not so.

Mr Martens:

– Of course it is not.

Mr GULLETT:

– The plan which we are now considering is in principle and substance the plan involved in the August agreement, and that agreement had the unanimous support of all the members of the Government, and all the members of the party opposite, as well as of some members of it who are now sitting on this side of the chamber. That plan, which was evolved by the representatives of the Commonwealth Government and all the State Governments, including two Labour Governments, had the full concurrence of the honorable member for West Sydney (Mr. Beasley), who was then a member of the Government, and of the honorable member for Fremantle (Mr. Curtin), who so vigorously denounced this plan in this chamber this afternoon. I regret that the honorable member for West Sydney is not in the chamber at the moment. If he did not subscribe to the details of the August agreement, why did he remain a member of the Government for many months af terw ards ? If any other honorable member opposite did not subscribe to that plan, why did he not make his protest at the time, and, if necessary, resign from the party? The truth is that, had it not been for the breakaway by Mr. Lang from the Melbourne agreement, and for the result of the New South Wales election, the August agreement, and the economies foreshadowed in it, would have been in operation nine months ago. Those economies were, perhaps, not the same in degree as these now proposed, but they were certainly the same in principle and substance; and they would have been in operation with the full support of every honorable gentleman opposite.

Mr Martens:

– That is not so.

Mr Lazzarini:

– I never supported the August agreement.

Mr GULLETT:

– The honorable member did not make much of a protest against it.

Mr Lazzarini:

– I did, everywhere.

Mr Brennan:

– I assure honorable members that what the honorable member for Werriwa (Mr. Lazzarini) has said is true; he has persistently protested against everything that has been proposed or done for the last five years.

Mr GULLETT:

– The honorable member continued to attend the caucus meet-

Lugs of his party for months afterwards. That is also true of a number of honorable members who are now showing hostility to these proposals. The honorable member for Werriwa (Mr. Lazzarini) did not make any serious or public protest against the proposals of the August agreement until after the New South Wales election. There is something strongly suspect of political expediency in the opposition to this plan which is now coming from certain honorable members opposite.

I favour this plan because I cannot see any alternative to it. It cannot be said that the various alternatives that have been proposed by certain honorable members opposite have not been given a full and fair trial before the public opinion of Australia. We have had the Anstey plan, the Yates plan, the Gibbons plan, and Theodore plans too numerous to remember, and they have all, in turn, been condemned by the electors of Australia in representative electorates. It has been said by some honorable members opposite that this plan has been brought forward because of the opposition of the Senate to the inflation proposals of the Government, or because of pressure from the bankers. The honorable member for Corangamite (Mr. Crouch) said last night that the antagonism and obstruction of honorable members of the Senate had forced him into accepting it. But I point out that the Government and its supporters have had it in their power for months past to remove the obstruction of the Senate. They could have brought about a single dissolution at any time, and to-day they could easily bring about a double dissolution. Why have they not done so? If they have a firm faith in the efficacy of the various paper money schemes which they have proposed for getting the country out of its difficulties, why have they not gone ahead with them? We have had a perfect flood of paper money schemes. The actions of the Government have shown clearly that it has no real faith in any of those schemes. I do not speak in. a critical sense when I say that, in my opinion, the Government has advanced this scheme because it believes that none of its other schemes would be approved by the majority of the people of this country at a general election. That is the only reason why this project is now before us.

The people expressed their opinion of the Gibbons plan, which was afterwards advanced by the Treasurer under the name of the fiduciary note issue scheme. That policy was submitted to a very great and representative electorate. I refer to the Parkes electorate. The fiduciary notes scheme was the only issue at that election. A war was waged for and against the proposed fiduciary note issue, and the people repudiated it in the most convincing manner. Afterwards a different constituency was appealed to - I refer to Tasmania, which includes five federal electorates. The Treasurer, we know, visited Tasmania during the election campaign there. We all know the force and talent of that honorable gentleman as a campaigner. The verdict given by the people of that State must have been humiliating to the author of the fiduciary note scheme. In view of these circumstances, and even at this late hour, I appeal to honorable members opposite who have opposed the plan now before us to withdraw their opposition to it. This plan has been formulated, not because of the objection offered to other plans by the Opposition in this chamber, nor because of the obstruction offered to various government measures by the members of the Senate, but because it has been recognized at last that it is desirable to swing back to the old, homely, Anglo-Saxon policy of paying our way and living within our income, no matter what the income may be.

I appeal particularly to honorable members opposite who are against the plan to review their position. I admit that the honorable member for Fremantle (Mr. Curtin), the honorable member for Werriwa (Mr. Lazzarini), and other honorable members opposite who are opposed to this plan, are just as sympathetic with the hundreds of thousands of unemployed people in Australia, and just as deeply anxious about the distress of the people as I am myself. It is for that very reason, that I appeal to them to withdraw their opposition to this scheme. I could understand the opposition of those honorable gentlemen a little better if they had proposed any alternative; but they have not offered any alternatives except those which the people of Australia have already refused to accept as a solution of our difficulties. I listened with the deepest interest to the speech delivered this afternoon by the honorable member for Fremantle - I always listen with interest to the honorable gentleman’s utterances - but I listened in vain for any proposal for getting us out of the mess in which we find ourselves. There was not a single constructive proposal in the honorable member’s speech. It is true that he said that the Government had abandoned its previous proposals, but he did not urge that those proposals should be re-introduced.

Mr Curtin:

– I said that if we could not carry out our policy we should go to the people.

Mr GULLETT:

-I do not agree with that suggestion. There is a great deal to be said in commendation of the attitude adopted by the Government. It realizes that the country is facing an early default and all the wretchedness and dishonour inevitably associated with bankruptcy, and I commend it for taking the course that it has taken. I listened with sympathy to the speech made on this subject a few days ago by the Prime Minister. That right honorable gentleman could not possibly have been more candid with the House. He said that he had been forced into this position because he believed that there was no other way than the one now proposed to get out of our difficulties. I could, as I have said, understand the opposition of certain honorable members opposite if they had anything else to offer which would be acceptable to the Australian people. I again appeal to the honorable members who are opposed to this plan to withdraw their opposition, for I feel that they are showing by their disagreement that they are entirely out of step with the people outside Parliament. There has been an extraordinary acquiescence by the people generally in the proposals now before us. I challenge any honorable member opposite to direct attention to any really strong and organized protest by the people against these proposals. There has been throughout the country a very general recognition that these proposals, with the severe economies that they entail, are necessary at present. The strong intelligence of the Australian people recognizes to-day that we have not the capacity to continue to pay pensions to ex-soldiers, and to the aged and infirm, and wages and salaries to the Public Service, and interest to bondholders at the rates which now prevail. Because of their strong common sense and their patriotism for this country they are to-day, by an overwhelming majority, prepared to acquiesce -in this measure.

I take this opportunity to pay my tribute to the splendid spirit of fortitude which is being displayed by our people at this critical stage in our history, and especially the hundreds of thousands who are unemployed, and our primary producers who are living practically on the dole and are literally fighting for their existence. Their fortitude in these trying circumstances is worthy of the best traditions of the Anglo-Saxon race in times of adversity. They are suffering in silence, but they are looking to us in this Parliament to do something to lift them out of the unhappy situation in which they find themselves.

I do not wish to discuss the plan in detail. My earnest hope is that the passage of the bill will be rapid. I believe that a large measure of our present trouble is a credit trouble.

Mr Stewart:

– And low price levels.

Mr GULLETT:

– Of course. But I believe that, in a large part, it is a credit trouble, brought about to some extent, by the fear factor and a lack of confidence in government finance within Australia. To the extent that it is due to this lack of confidence it can be speedily removed. I am convinced that, if this Parliament and all the State Parliaments which are responsible for the maintenance of national credit take the necessary steps to restore confidence in government finance, we shall be surprised at the rapidity of the uptake within Australia. I believe that much of our financial difficulty is susceptible to substantial and immediate improvement, and that we shall notice this improvement when people in Australia, and our friends without, are convinced that governments are resolved to live within their income.

I turn now to the consideration of what I may term the optimistic features of the present situation. Once we restore credit-

Mr Yates:

– And confidence.

Mr GULLETT:

– Credit or confidence, name it what you will - I am afraid that the term means nothing to the honorable member for Adelaide - everything will favour us. Any one who takes the trouble to study the economic history of the last half century must be convinced that once confidence is restored we shall, at a relatively early date, find ourselves in the enjoyment of substantial improvement. As I understand the position, it cannot become worse provided governments in Australia stand up to their obligations. On the contrary, I believe that, if we take these necessary steps, every succeeding day will be a better day for all sections of our people. Price levels should improve. Moreover, we should remember that when our finances improve our exchange difliculties will gradually disappear. At the present time the adverse exchange is costing Australia about £10,000,000 a year. If we deal with the immediate problems confronting us in a business-like way, credit will be restored and at a relatively early date we shall relieve ourselves first of a portion of the exchange burden, and, eventually, of the whole of it. As the Prime Minister has already pointed out, our unemployment problem is costing us about £9,000,000 a year. With the improvement in our financial position we may look to save a considerable portion of that amount.

Mr Prowse:

– What about the customs revenue?

Mr GULLETT:

– I am not dealing with that matter at the moment. If we embarked upon a discussion of the tariff in connexion with these proposals, we should occupy the time of the House for many months to come. I think the honorable member for Forrest (Mr. Prowse) recognizes this as fully as I do.

Mr Curtin:

– The honorable member expects, with the recovery in our finances, to be relieved of a certain expenditure for sustenance. How does he reconcile that view with the report of the experts, that an additional £3,000,000 must be provided in the next fiscal year?

Mr GULLETT:

– I have already said that during the coming year we shall have to provide about £9,000,000 for unemployment, and that our exchange difficulty is of a transitory nature. How long it will be with us will depend largely on how well we do the job now before us. If the Governments, Federal and State, take those steps which are within their power to straighten out their finances, the future, I think, is set fair for us. There has never been, in the history of the world, a country which has treated its people as generously as this young land of ours, since its occupation a little less than 150 years ago. There is nothing wrong with Australia. It was never so fruitful as to-day, and never has it been more generous in its response to intelligent treatment. But, in common with the people of other countries, we are, to some extent, the victims of circumstances as well as the victims of our own folly. So long as we persevere down a course of hopeless government finance, so long as we endeavour to live on overdrafts and chase will-o’-the-wisps, such as the development of paper-money schemes, so long shall we be false to the highest ideals of our race. In conclusion I commend the bill most warmly, and hope that it will have a speedy passage.

Mr RIORDAN:
Kennedy

.- Unlike the honorable member for Henty (Mr. Gullett) and other honorable members opposite who have spoken in this debate, I am opposing the bill, but I do so without prejudice, and I hope that, in the course of my remarks, I shall not say anything that may be regarded as abusive or offensive to those who intend to vote for it. I am opposing the measure because I believe its passage will mean a reduction in the standard of living for our people, and a reduction in invalid, old-age and soldier pensions, as well as a curtailment of social services. Twenty months ago I was returned to this House on a definite policy, to which I still adhere. I am not prepared to abandon my pledges for all the hosannas of the Nationalist press or organizations in this country. We have been asked what is the alternative to the adoption of the plan. The alternative is the Labour party’s platform, which, up to date, when it has been put into operation, has stood this party and the country in good stead. Queensland had fifteen years of Labour rule. During that period every plank in the party’s platform was put upon the statute-book, with the result that to-day Queensland is the most prosperous State in the Commonwealth. When the Labour Government was defeated at the last State election, the Nationalist Government found in the Treasury a surplus of £5,000,000, a portion of which was subsequently loaned to bankrupt States governed by the Nationalist party. The bulk of the money went to South Australia.

Mr Bernard Corser:

– It was all loan money.

Mr.RIORDAN.- That does not matter. It was Queensland’s quota and represented a wise provision made by a Labour Ministry against the trying times through which we are now passing. The record of Labour rule in Queensland was in marked contrast to wasteful administration by Nationalist governments in the other States. The fact that the honorable member for Henty, and his colleagues in the Nationalist party, as well as the Nationalist press, and that party’s organizations, are supporting the Government’s proposal, convinces me that there must be something very much wrong with the plan. I do not forget that the Labour movement was a direct result of the mal-administration of tyrannical Tory governments, and I cannot now support a policy that is so warmly endorsed by the Nationalist organizations. Despite the view which the Government might take of my action, my vote will never be given against the interests of those who sent me to this Parliament. The capitalistic press which, hitherto, has been putting the “ boot “ into this Government, is now supporting its financial and economic proposals. Unfortunately, the Labour party in this Parliament has been weakened owing to the treachery from within its ranks. Former members of this party, who are now in opposition, are never tired of declaiming against repudiation in any form. The honorable member for Wilmot (Mr. Lyons), the honorable member for Maribyrnong (Mr. Fenton), and other former members of the Labour party, who have gone into opposition in this House, betrayed the trust which their supporters reposed in them, so it is all so much cant and humbug on their part now to charge us with repudiation. Could any person be guilty of a greater act of repudiation than those who have disowned the class that created them, and the pledge given to support the platform of the Labour party?

The plan to be found in the schedule to this bill has the endorsement of the Opposition, the members of which, in another place, have repeatedly rejected measures submitted by this Government to give effect to its industrial and economic policy, and have done all in their power to smash the standards of the worker. For many years the Nationalist Government encouraged the importation into this country of foreigners in order to bring about a reduction in the standard of living. The President of the Employers Federation has declared that this agreement is not a complete plan; that there is a further step to be taken, and that is the abolition of Arbitration Court awards and our wage-fixing system. Then we have the unguarded statement made by Mr. McPhee, the Premier of Tasmania -

I should like to see all bonds removed from industry. When I think of a great enterprise like Sir Henry Jones’s, in Tasmania, and [ recall the old days when one of his men would come along to the old man and mention that he had a few pounds he would like to go towards a home. He wondered if Sir Henry would help him buy a home. Then the union took charge of the men, and they were informed that the union secretary would look after them.

In that connexion I recall a speech delivered by the honorable member for Bass (Mr. Guy) on the Conciliation and Arbitration Bill. The honorable member quoted evidence given before a royal commission relative to the slave conditions operating in Tasmania in those “ old days “ which Mr. McPhee is so anxious to have brought back again.

The financial proposals upon which the present Government was returned to power have always met with the greatest hostility from honorable members opposite who are now supporting a policy which strikes a deadly blow at Labour and the people of this country. Within twelve months, according to the report of the experts brought into consultation by the Premiers Conference, if this policy is brought into effect the condition of the people will be worse than it is to-day.

Mr Thompson:

– What is the honorable member’s scheme?

Mr RIORDAN:

– It is the Labour party’s platform of nationalization of banking and expansion of credit. There is nothing much wrong with such a policy. The trend of thought throughout the world is towards its adoption. The honorable member for New England (Mr. Thompson) may laugh. Prior to the French revolution the ruling class laughed while the masses were starving, but the masses took the laugh off their faces. The masses of the people of this country will make some members of this Parliament think.

That the Labour party’s policy of expansion of credit is supported by financial experts is shown by the following, which I quote from the Canberra Times of the 19th June : -

The lobby correspondent of the Daily Herald says that the report of the McMillan committee on finance and commerce, appointed in November, 192!), will be presented this week.

Forecasts are that there will be a majority report criticizing the policy of the Bank of England during the trade depression and suggesting that the bank should assist trade by making credits more easily available and placing a greater amount of money in circulation.

This policy should be carried out in cooperation with the Central .Reserve Bank, the Bank of France, and other great national banks.

There is nothing wrong with Labour’s attempt to create credit in this country. Every cog in the national machine is operating except the financial one, and that has refused to function only since the present Government came into office. In this connexion I should like to quote the opinion of Professor Gustav Cassel. Addressing the Institute of Bankers, that great economist said -

The monetary policy of the United States of America is chiefly responsible for the crisis. The fall of American prices is reacting on ali countries on the gold standard.

If the present scarcity of gold is not counteracted, unlimited depression of commodity prices will result.

If France and America, instead of disproportionately attracting gold, had cooperated in rational price stabilization, conditions in other countries would be more favorable to capital investment.

The only possible remedy is a systematic reduction of the central banks’ requirements of gold reserves.

The struggle of the workers of Australia to build up the standard they are now enjoying has been long and hard.

Mr Bernard Corser:

– What is the standard of the unemployed?

Mr RIORDAN:

– It is practically nil, but if this plan is put into effect the experts say that within twelve months the unemployment position will be £4,000,000 worse than it is now. The plan itself is only a palliative. It offers a reduction of interest which will bring into the coffers of the Government £3,000,000 under the experts’ proposals, and £6,000,000 under the Government’s proposals. The estimated saving in expenditure, including a reduction of the basic wage and a reduction of invalid and oldage pensions and war pensions, is £13,000,000, which is also the estimated cost of unemployment for next year. The responsibility for providing for unemployment in this country is thus to be placed on the basic wage earner and the pensioner. A reduction in th«interest rate from 4 per cent, to 3£ per cent, would obviate the need for a reduction of the invalid and old-age pensions, and a further reduction to 3 per cent, would save the soldiers’ pensions and the maternity allowance. Who made greater sacrifices than the men who went overseas to fight for their country? Where to-day are those who advocated enlistment and conscription ?

Mr Archdale Parkhill:

– A new friend of the soldiers !

Mr RIORDAN:

– I was not one to urge any person to enlist. Indeed, I did my best to prevent conscription. In those days soldiers were told that no pecuniary sacrifice would be too great on the part of those who remained at home. I well remember the “jingos” at street corners asking people to go overseas and fight. Why? To protect their property. And now what is to be the contribution of those people towards the carrying out of this plan ? The soldiers and the invalid and old-age pensioners’ contribution is to be compulsory, but those who have put their money into war loans are to be asked, “ Will you subscribe to this plan ?”

There is much talk of repudiation. When the honorable member for Wilmot (Mr. Lyons), as Acting Treasurer, came into the party room with the Niemeyer agreement, it was booted into the waste paper basket by the majority in caucus, and when subsequently he brought forward the £28,000,000 conversion loan and a motion was moved at the party meeting, that those who held the stock to be converted should be called together and informed of the position of the Commonwealth Government, it was termed repudiation. The experts say that the banks and insurance companies should underwrite the present conversion loan, so that those who are unwilling to convert voluntarily may be repaid. What has become of the anti-inflation attitude of honorable members opposite? If half of the £560,000,000 conversion loan is not voluntarily converted will not the banks be obliged to provide over £280,000,000 ?

Mr Archdale Parkhill:

– No.

Mr RIORDAN:

– Yes ; according to the report of such experts as Professor Copland and Professor Shann. The very gentlemen who said that Labour’s proposals amounted to inflation are now putting forward a plan which means greater inflation.

Mr Archdale Parkhill:

– The honorable member is aware that the banks have said that it could not be done.

Mr RIORDAN:

– The experts say that it should be done and Professor Shann is the economic adviser to the Bank of New South Wales. What has followed the adoption of the advice of experts in Austria and Brazil? In those countries Sir Otto Niemeyer’s plan has been put into operation, yet according to Sunday’s papers, Austria has been obliged to get an advance of £4,400,000 from the Bank of England, to tide it over its troubles. To-day we are talking of cutting down pensions. The cripples, the blind, the halt, and the children of widows are to make the sacrifice.

What has been the result of Nationalism? In Queensland, where children receiving 10s. and Ss. a week suffered a reduction of 10 per cent., the deficit is estimated to be £1,700,000. Approximately 300,000 of our people are out of employment and non-productive. With production exceeding consumption and no means of disposing of the surplus, chaos and unemployment are inevitable. We are told by the experts that the sustenance of the unemployed next year will cost £13,000,000. And what good will that expenditure do? It will merely continue the misery and semi-starvation prevailing amongst the men who to-day are camped on the banks of the creeks, and at Vaucluse, Long Bay and La Perouse. Hundreds of unemployed are occupying the huts at Long Bay deserted by the blacks, who are being accommodated in up-to-date cottages by a housing committee. I suppose many > of the unemployed are sorry that Captain Cook ever landed on the Australian coast. This Federal Parliament, which in 1910 cost the taxpayers £635,000, is now costing £1,300,000. There are thirteen legislative chambers, and an effort is being made in Queensland to revive the Legislative Council there; whilst an appeal is being made to the Privy Council against the proposal of Mr. Lang to abolish the Legislative Council in New South Wales. Throughout Australia 700 politicians have to be fed at the expense of women and children who are unable to provide for themselves, at the expense of the aged and infirm, and by the sacrifice of our hard- won standards of living. ‘

Tlie experts tell us that the plan which emanated from the Premiers Conference will create employment and that industry will revive. How can industry revive if the facts that have been placed before us are correct? The sum of £9,000,000 was provided for the relief of the unemployed last year. The expenditure provided for in the Treasury forecasts for 1931-32 is about £10,500,000; but, in the opinion of the experts, more than £13,000,000 may be required. They will not make any prediction for the following year, but they say that, possibly, further reductions of wages, salaries and pensions may be requisite. Those gentlemen do not offer much hope of the revival of industry and the creation of employment. Australia is top-heavy, and for this the abuse of the commission system is partly responsible. Even at the present time Commonwealth commissions are costing the taxpayer £20,000 a year. Of what use are the Migration and Land Settlement Commissions? No works are in progress, and let no one tell me that the reduction of expenditure by £100,000,000 will create more work. The plain fact is that that amount of money will go out of circulation. The experts say that the banks will extend credits, and that the interest on private mortgages will be reduced. The private mortgagor, however, will have to appeal to a court for any variation of his contract, but the bill now before us does not mention that. The experts say that the governmental expenditure is mostly in respect of wages and salaries, and they continue -

In addition to savings in the rate of wages and salaries and in the price of material, there will be the ordinary economy of stricter and more efficient administration. There will .also bc a reduction of expenditure on account of the smaller volume of business. This particularly affects (he railways and the post office. On balance, the possible saving in the departments enumerated, can be safely reckoned at 20 per cent, on the expenditure for 1920-30, assuming a reduction of 20 per cent, in the rates of wages and salaries. For railways, on account of the great reduction of traffic, the possible savings on this basis should be substantially more than 20 per cent, on total expenditure.

A rough check may be made of the further reductions in expenditure possible, on the basis of a 20 per cent, cut in salaries and wages below the 1929-30 level. The total of salaries and wages in the Government Service was about £(;5,000,000 in 1929-30. An all-round cut of 20 per cent, would give £13,000.000, apart from reduction of staff, which naturally follows the decrease in business of the railways mid post office. The data for reduction in rates of pay provided for in the 1931-32 forecast are not complete, but it is certain that the average fall is less than 10 per cent., making £0,500,000 out of the possible £13,000,000. There is, therefore, a further reduction of £0.500,000 to be obtained simply by the cut in wage and salary rates, apart from general economies, the smaller staff, and the reductions due to smaller quantities of material used and the lower price paid for it. It is clear that the total reduction of expenditure would be at least the £8,900,000 set down in paragraph 11.

We are told that, in addition, the pensions of soldiers and the aged and infirm must be reduced. The reductions to be effected in respect of administration and business undertakings and pensions, are estimated at £13,100,000. The experts propose to increase the sales tax from 24 per cent. to 6 per cent.; the adopted plan modified the rate to 0 per cent., and from this tax £5,600,000 is expected. The increase in primage duties is estimated to yield £2,400,000. Who will pay this £8,000,000 increase in the cost of living? The basic foods we are told will be exempt. What are basic foods? Do they include tea, sugar, and flour? In some States, the tax on tea is producing £750,000 a year. The users of sugar contribute practically £7,000,000 to maintain the industry in Northern Australia. There is also a tax on flour. These burdens will be passed on to the consumer, as indeed the experts intend, because they say that additional taxation should be based on consumption and not on industry. Thus while the incomes of people are being reduced the cost of living is being increased. If this plan is adopted, the trouble which some people fear will assuredly confront us next year. At the wool sales in Brisbane this week, 12,000 bales were offered, and the prices realized showed a fall of from 7 per cent, to 15 per cent. If we are to pay our overseas debts we must increase consumption and production, and not throw people out of work. There are vast tracts of idle country which could be made available to families, and many of our mines are idle. Yet next year we may be paying £13,000,000 for the relief of the unemployed without getting any return. The experts and the politicians are not game to tackle this problem as it should be tackled. If they adopted the proper course the result would not be a reduction of pensions and social services, but the abolition of 600 politicians. As soon as this incubus is lifted from the backs of the people the country will be on the road to recovery.

Mr Gullett:

– The honorable member is one of the heavyweights.

Mr RIORDAN:

– If I were sacrificed I should not squeal. The loss of a seat in this Parliament should not be considered if it would put half a dozen men in work. I would willingly make the sacrifice.

The honorable member for Henty (Mr. Gullett) made a humbugging appeal to the workers. I do not forget that ho made a violent attack upon the proposal of the Government to impose at the source a tax of 4s. 6d. in the £1 on income from bonds. To-night, he declared that in this national crisis the reduction of wages and pensions is essential for the salvation of the country. Are we to bc governed by the law of the jungle that the strong shall prey on the weak? Let us acknowledge the fact that the plan now before us is merely a temporary expedient, a palliative. It will not relieve unemployment. We are told by the experts that the price of wheat will not increase, but the price of wool may; yet there is positive evidence of a 10 per cent, average fall in the price of wool, which means practically a 10 per cent, reduction of the amount available overseas to meet our external debt. Australia must pay its way, but in doing so it need not starve its people. A private mortgagor who is unable to meet his contract is given an extension of time. Honorable members opposite speak of the need to reduce the interest charged to the primary producer. Last year, when I was in Queensland, the Premier, Mr. Moore, said that if the banks would reduce the interest charged to the landowners by 1 per cent, the Government would extend the leases and reduce railway freights. The proposal was discussed for some time, and in the interim, although the properties had depreciated as a result of the drought, the interest was increased by 1 per cent, or lj per cent. Leases were extended and freights were reduced, but the leaseholders were at the mercy of the banks and pastoral companies. Although the Government intended the concessions it granted to be a relief to the holder, he did not benefit. Married people with families are starving in a country of plenty - a country that imports commodities that it can grow, such as tobacco. Recently, at Mareeba, 100 farms were taken up on leasehold * at a rental of 2s. 6d. an acre. Would it not be better to apply the amounts expended on unemployment doles to subsidizing industries, placing families on the land, and encouraging them to build up an asset for themselves? Australia is importing cotton and cotton goods. We have plenty of land suitable for the cultivation of cotton which our factories could convert into manufactures. The experts who advised the Melbourne conference said that their function was to suggest, not means of creating more employment, but means of providing money for sustenance. They said that the schemes should be formulated and financed. But there is no desire on the part of any political party within this Parliament, not even the Government, to introduce schemes such as land settlement, which may ultimately fail and bring about its defeat at the next elections. Nevertheless, if we place people on the land they will at least be given an opportunity to provide for themselves, and encouraged to obtain a home for themselves. The continual expenditure annually of £13,000,000 to assist the unemployed will get us nowhere.

The experts who were in attendance at the Premiers Conference proposed a reduction in interest rates amounting to £3,000,000, but this was increased by the conference itself to £6,500,000. Honorable members opposite have put up a plea for the banks. The banks, they say, have no money. Let me remind honorable members that the banks have for the last 50 years been paying dividends of from 15 per cent, to 36 per cent., and recently one bank added to its reserves over £500,000. In one bad year - last year - the dividend paid by one bank was 11 per cent. Later a standard dividend was fixed at from 10 per cent, to 11 per cent. The banks of Australia have huge capital and reserves. In the bad years their interest rates averaged 10 r>er cent, or 11 per cent. For years there has been a general tendency on the part of the banks to put profits to reserves, or else to write down the value of bank premises. Large sums of from £80,000 to £100,000 were regularly written off the value of bank premises. For instance, the value of the premises of the Bank of Australasia in 1925 was shown in the balance-sheet as £47,000, whereas their actual value was £1,000,000. That has been the general policy of the Australian banks since 1S93. This, we are told, is a policy of safety, and it accounts in part for the fall in the level of Australian dividends. The honorable member for West Sydney (Mr. Beasley) was taken to task by the honorable member for Corangamite (Mr. Crouch), who «i:d that it was unfair to pick out an extract from a statement of Sir Robert Gibson without quoting the whole of it. Referring to competition with the private banks, Sir Robert Gibson, the Chairman of the Board of the Commonwealth Bank, said at Perth on the 29th March, 1928 -

The present Board of the Commonwealth Bank desire to make it “ the Bank of England “ of Australia. Parliament, in its wisdom, has decided that the Commonwealth Bank should trade, a power which the board proposes to exercise with discrimination, but not aggressively, against the banks which have individually and collectively clone so much for the benefit, prosperity and stability of Australia.

In doing so much for Australia, the banks have done pretty well for themselves. Those institutions cannot complain about the treatment that they have received at the hands of Australia, although they have brought very little money to this country.

Mr Archdale Parkhill:

– -From what authority is the honorable member quoting?

Mr RIORDAN:

– I am quoting from the Australian Banking and Credit System, by Mackay, a financial expert, and incidentally, a supporter of the Nationalist party. The capital in the possession of the Australian banks in 1929 was £45,249,207, and their bank reserves £35,411,969. These institutions are supposed to be bankrupt to-day, and yet they have had the temerity to instruct this Government as to what it should do. The banks of Australia crashed in the nineties. They could not meet the demands of their creditors, and the governments of this country had to come to their aid. There has been an increase of population in Australia during the last six or seven years, yet there has been no increase in our currency for the reason that the banks prefer the cheque system to the note issue. The banks can inflate or deflate currency at will.

The Government’s economy plan, to be successful, must include some scheme for the provision of employment. The Prime Minister said that he hoped that as a result of the operation, of these proposals, more capital would be available for industry; but no one believes that story. We have been told that Australia is becoming bankrupt, and is likely to default. Ever since I have been in Parliament, the members of my party have been told that if they do not do this or that Australia will have to default, and that that will lead to greater chaos. Now the pensioner is being told that, in the absence of such a plan as this, if we meet our internal debts, he will receive 12s. 6d. in the £1, and that if we also meet our overseas debts he will receive only 9s. in the £1. That story has been in circulation for the last nine months. The honorable member for Wilmot (Mr. Lyons) on one occasion in the party room threatened that if we did not accept his proposals, we would receive no pay the next month.

Mr Archdale Parkhill:

– No doubt that brought the honorable member up with a turn.

Mr RIORDAN:

– It brought the honorable member for Wilmot up with a turn. He did not have the courage to face the issue on the floor of this House. He wanted to protect the class to which he sold out. He wanted to serve the crowd who previously kicked him, and to bring to the dust those who served him and his family during the whole of his political career.

Mr Maxwell:

– Did not the honorable member say that he did not intend to indulge in abuse?

Mr RIORDAN:

– I have given the true details of what happened within the party. Governmental expenditure is now to be reduced by £8,900,000, and, of course, that sum is to be taken from the basic wage workers. The members of the Ministry say that we have to return, to the level of 1910, but let me remind them that in 1910, there were only seven Ministers on the Treasury bench, whereas to-day there are thirteen. In 1910, there were only seven governmental departments. Now there are over twice that number. The wages paid in the Federal Public Service Tn 1910 amounted to £2,000,000, and to-day they amount to £10,000,000. In 1910 high-salaried officers were few and far between. Some of the departmental heads have failed to improve the undertakings under their control, and yet their salaries would give employment to at least sixteen men.

Mr SPEAKER (Hon Norman Makin:
HINDMARSH, SOUTH AUSTRALIA

– The honorable member’s time has expired.

Mr Lazzarini:

– I wish to make a personal explanation. The honorable member for Henty (Mr. Gullett), when speaking to-day, grossly misrepresented me.

Mr Gullett:

– I rise to a point of order. I take it that there is a later aud proper stage at which the honorable member for Werriwa may speak on this question.

Mr SPEAKER:

– If the honorable member for Werriwa has been personally misrepresented, he is entitled to make a personal explanation. He may make a statement of fact, but may not offer any argument.

Mr Lazzarini:

– I do not wish the statement that I did a certain thing, of which I am not guilty, to appear in Hansard uncontradicted. The honorable member for Henty said that I supported the Niemeyer proposals-

Mr Gullett:

– I did not mention the Niemeyer proposals. ‘

Mr Lazzarini:

– The honorable member mentioned the August agreement, and he said that I supported it.

Mr Gullett:

– I said that the honorable member did not resign from his party.

Mr Lazzarini:

– The honorable member said that I supported that agreement, and to that statement I object. I never supported the Niemeyer proposals, and I spoke against them even before Sir Otto Niemeyer visited Australia. So soon as I knew of his mission, I wrote to the official organization of the Labour movement, condemning the mission as an attempt on the part of British financiers to put something over Australia. I was absolutely opposed, not only to the agreement, but also to his visit to Australia.

Mr BLAKELEY:
Minister for Home Affairs · Darling

– I have listened to much of the debate on the bill, and find that there seems to be a consistent refusal on the part of those who are opposing it to recognize the position of Australia, and the facts in figures that have been placed before them. In view of the great decrease in the national income, we must concede that unless some drastic action, such as that proposed under the Government’s economy plan, is taken, this country cannot continue to pay 20s. in the £1, whether it be in respect of wages, pensions, interest or redemption of bonds. In 1927-28 our national income was £650,000,000, and our total government expenditure, including loams, £187,400,000. In that year our total interest, sinking fund, exchange, and unemployment expenditure amounted to £57,800,000. As the years progressed, so our national income decreased until this year it is estimated to be £450,000,000. ‘ Our total governmental expenditure, including loan expenditure, has increased from £187,400,000 in 1927-2S to £198,000,000, and the total interest, sinking fund, exchange and unemployment expenditure has increased from £58,800,000 in 1927-28 to £84,900,000 as estimated this year. That is the position of the nation. It will require a miracle to enable us to carry on and pay our way.

Mr Yates:

– Or a magic wand.

Mr BLAKELEY:

– The honorable member has been waving magic wands for fourteen years, but up to date, has not produced even a white rabbit from the hat. The position of a nation is no different from that of an ordinary citizen.

Mr Yates:

– Or of the swaggie.

Mr BLAKELEY:

– Even the honorable member for Adelaide (Mr. Yates) has had to revise his budget because of his reduced salary. If his salary continues to fall he will make further revisions to meet his altered circumstances. If a mau has an income of £6 a week and his expenditure is £7 a week one or more of three things is taking place - ho is living on his accumulated savings; he is borrowing money; or he is not paying his tradesmen. All these things have happened to Australia. We have borrowed until we can borrow no more; we have endeavoured by taxation to balance our budget, but the greater the taxation we have imposed the greater the difficulties we have encountered. The present Government inherited from its predecessors a deficit of £5,000,000, which at the 30th June, 1930, was reduced to £1,500,000. The deficit for the current financial year is approximately £13,400,000, and it is estimated that next year, provided we could borrow the money to carry on, the deficit would he as much as £20,000,000, unless we faced our financial position courageously. Serious though it is, the Commonwealth position is not so bad as is that of the States, for the aggregate deficit of the States .for 1929-30 amounted to £9,630,000, and this year are estimated at £17,750.000. If the States do not conform to ordinary household accountancy methods their deficits at the end of the next financial year will be over £20,000,000. Unless the proposals now before us are adopted, or we create a fiduciary currency, the deficits for the Commonwealth and the States at the 30th June, 1932, will be £41,000,000.

During the last twenty months the Government has brought before caucus, and, later, before Parliament, plan after plan, for the relief of unemployment and the rehabilitation of the country. The honorable member for Adelaide (Mr. Yates) laughs, as does also the honorable member for” Werriwa (Mr. Lazzarini). Those honorable gentlemen have been talking for a great number of years, and they will probably continue to do so for many years to come; but the net result of their talking will be a negation because there is not one constructive suggestion in the whole of their speeches.

Mr James:

– Why did the honorable gentleman support the Gibbons plan?

Mr BLAKELEY:

– I make no apology for having supported that plan, or for favouring the issue of a fiduciary currency.

Mr James:

– Then why throw them overboard now?

Mr BLAKELEY:

– Nor do I apologize for my present attitude. The Government has introduced legislation along certain lines, but it has been thwarted by the Opposition majority in another place. We have now reached the position - and it is just as well that honorable members should know it - that the policy which the Labour party has advocated cannot be put into operation.

Mr James:

– What a surrender !

Mr BLAKELEY:

– Apparently the honorable member for Hunter (Mr. James) refuses to realize that another place has refused to agree to legislation which has passed through this chamber. The position now is that we cannot borrow money and we cannot have a fiduciary currency. Moreover, the banks have issued an ultimatum in which they state that they cannot carry governments beyond the end of this month. Unless something is done promptly to meet the position, the Commonwealth in July will be able to pay only 12s. in the £1. Whether we like it or not that is the position which faces us. An already unfortunate position was aggravated by the adoption by the Bruce-Page Government of a fiscal policy which resulted in our imports exceeding our exports by £92,000,000 in 6-J years.

Mr Yates:

– The Minister’s pals on the opposite side of the chamber did that.

Mr BLAKELEY:

– That remark is offensive to me, and I ask that it be withdrawn.

Mr Yates:

– If honorable members opposite are not the Minister’s pals, and the Minister regards the remark as offensive, I withdraw it.

Mr BLAKELEY:

– During the term of office of the Bruce-Page Government, Australia not only had an excess of imports over exports, but it also borrowed from overseas to the extent of £40,000,000 per annum. In addition, the country pursued an immigration policy which resulted in 256,414 persons coining to Australia from overseas. Of that number, 210,033 were British, 30,920 Southern Europeans, and 15,461 other Europeans. It is estimated that there are between 250,000 and 300,000 persons unemployed in Australia to-day. Had no policy of assisted migration been followed during the last eight or nine years our population to-day would be 200,000 less than it is. To add further to our difficulties, governments, in the years of plenty - and none is free from this charge - developed the habit of creating new departments and of spending money lavishly. Now we realize that there is considerable duplication as between the States and the Commonwealth. The present Government has eliminated some of that duplication, and is carefully watching the position with a view to reducing it still further. The duplication in the

Taxation Departments is gradually being dealt with, and step3 to avoid duplication in other departments will be forced upon us by the present economic depression. With only four States having joint electoral rolls, the Commonwealth saves £11,500 on every reprint of the rolls for those States, while it is estimated that the four States concerned save not less than £30,000. Notwithstanding that representations have been made from time to time to the Governments of Queensland and Western Australia, they have, so far, refused to have joint electoral rolls. I am hopeful that before long those governments also will fall into line in this matter.

Our credit is exhausted; we can borrow no more money from the banks; the Opposition majority in another place has rejected the Government’s legislative proposals. Consequently, we are forced to seek alternatives. The first alternative is to accept the plan which was agreed to at the recent Premiers Conference. That plan necessitates such a reduction in governmental expenditure that the estimated deficit next year, instead of being £20,000,000, will be only £4,380,000. The Government could refuse to carry out the plan, and allow the Commonwealth Bank to act in accordance with its ultimatum, which would mean that we should be without cash in the treasury on the first pay-day in July. In that event, everybody in the Commonwealth Public Service, and pensioners, civic and war, would be adversely affected. As a second alternative, the Ministry could either resign, or continue in office until such time as the Senate refused to grant supply, when the Government would be forced to the country. [Quorum formed.]

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The honorable member for Angas (Mr. Gabb) was “ put up “ to call for a quorum.

Mr Yates:

– I wish to make a personal explanation. I take exception to the remark made by the Minister for Markets and Transport (Mr. Parker Moloney). It appeared to reflect on me.

Mr Theodore:

– I rise to a point of order. Can an honorable member interrupt the speech of another honorable member in order to make a personal explanation ?

Mr DEPUTY SPEAKER (Mr McGrath:
BALLAARAT, VICTORIA

– No.

Mr Yates:

– Then I take a point of order. I ask for the withdrawal of the remark of the Minister when he suggested that the honorable member for Angas had been “ put up “ to call for a quorum. I was sitting next to that honorable member, and he drew my attention to the state of the House, but I asked him not to call for a quorum.

Mr DEPUTY SPEAKER:

– No point of order is involved.

Mr BLAKELEY:

– The Government could abjectly hand over the administration of the affairs of this country to the Opposition, and proclaim itself incapable of carrying on at this time of national stress. A number have openly advocated that the Ministry should take that course; but I would consider myself recreant to the trust reposed in me by the workers in my electorate if I agreed to that.

Mr Lazzarini:

– And the old-age pensioners.

Mr BLAKELEY:

– Yes; I believe that the Government can best protect the old-age pensioners and the workers by carrying out this plan, and remaining in office until we get an opportunity to take the Senate to the country with us. If I did not believe that, I would resign my portfolio. That is why I advocate the adoption of this plan. There is another alternative to the Government throwing up the sponge, and handing over the workers, arbitration and pensions to the tender mercies of the Opposition, although I can conceive that some members would prefer that we did that, in order that they should have no responsibility whatever in this matter. Thatfurther alternative is to increase taxation. During the period this Government has been in office, it has imposed very heavy taxation, and it will be compelled to place even heavier burdens upon the people in this time of trouble. The primage duty will probably have to be increased to 10 per cent., and the sales tax from 2J per cent, to 5 per cent. While the revenue from direct taxation in 1929 was £11,100,000 and in 1930- 31, because of increased taxation, £11,500,000, it is estimated that the revenue from this source in 1931- 32 will be only £8,500,000. Drastic measures must inevitably be taken, and to no member of the House are they more unpalatable than they are to me.

The honorable member for Werriwa (Mr. Lazzarini) has mentioned the oldage pensioners, and it is only right that the people should know the precise responsibility of this and other governments in regard to the expenditure that these pensions involve. In 1910, Australia paid £1,433,585 in old-age and invalid pensions, but in 1931, with a decrease of £200,000,000 in the national income, the cost was £11,700,000. The cost in 1932 is expected to be £12,100,000. The following table shows the enormous increase in the number of pensions granted, and in the expenditure involved : -

lt is absolutely impossible for the Government to continue the payment of pensions to the invalid and aged, and to ex-soldiers except iu accordance with the plan before the House, and even then there will be a deficit of £4,000,000 in the coining year. The old-age pension, even when reduced to 17s. 6d. per week, will have a higher purchasing power, to the extent of ls. 2d. per week, than when it was increased to 20s. lt lias been said by the opponents of the plan that there is no difference between the policy brought down by the present Government and that advocated by the Nationalist and Country parties.

Mr Martens:

– That, has been said by some of the opponents of the plan.

Mr BLAKELEY:

– That is so. I am glad to have that interjection. There is a fundamental difference between the policy of the Opposition and that now presented to the House and the people by the party that stands for the maintenance of the present wages and conditions of the workers. Only by force of circumstances, and, I hope, temporarily, is the Government compelled to take the steps that this plan involves. Fundamentally, the Labour party stands for the protection of theunder-dog. That, I hope, has been proved to the satisfaction of all those on this side of the House, even though some of them are opposed to this plan. It must be evident that “we have protected the workers from the loss of all their rights under Arbitration Court awards, because, were this Government not in power, there would not be a single Federal Arbitration Court award in operation in Australia to-day.

Mr Archdale Parkhill:

– Nonsense!

Mr BLAKELEY:

– The honorable member for Warringah (Mr. Archdale Parkhill) was one of those who, in company with the Right Honorable S. M. Bruce, sought from the public at the last election power to abolish the Federal Arbitration Court. Not only were honorable members opposite prepared to take from the workers all their rights under Arbitration Court awards, but they would also, I am convinced, have effected wholesale dismissals had they come back with a mandate from the people. I know quite well the interests which honorable members opposite represent, and those interests have nothing in common with the workers of Australia. This Government has protected old-age, invalid and military pensioners from a reduction during the 21 months it has been in office, just as it has protected every Commonwealth civil servant and Commonwealth employee. We have done that while prices and wages generally were falling, so that Commonwealth employees were in a better position than the employees of the States or of private persons. Now we are compelled, for the time being, to retreat, but, even so, we have not retreated so far as have outside employers. Even after these savings have been effected, the pensions payable will still have the same purchasing power as had the higher pensions of a few years ago, while Commonwealth employees will be better off than those in private employment. Rather than hand over 5,000 civil servants for retrenchment, and the workers of this country generally to the tender mercies of honorable members opposite. who would be only too glad to abolish Arbitration Court awards altogether, I am prepared to go on with the Government’s plan. I am convinced that, were the party opposite to get into power, there would be an orgy of wage-slashing, retrenchment and suspension of Arbitration Court awards, for which reason I advocate and intend to vote for the Government plan.

Mr NAIRN:
Perth

.- I am prepared to accept the Government’s plan in its general application.

Mr James:

– We do not expect the honorable member to do anything else.

Mr NAIRN:

– After listening to the concluding remarks of the Minister for Home Affairs (Mr. Blakeley), I am disposed to remind him again, as I did by interjection while he was speaking, that he will probably be indebted to the Opposition for putting this plan into operation. The opponents of the plan have one and all failed to face up to the position which was stated by the Prime Minister, and re-stated by the Minister for Home Affairs ; namely, that unless drastic economies are effected, Australia will not be able to meet her commitments next month. Honorable members opposite who have been blaming the Government, and enjoying themselves generally at the expense of Ministers, have done so in the comfortable knowledge that they will not be held responsible for the attitude they have adopted. They are aware that nothing they say or do is likely to have any effect, and they feel at liberty, therefore, to express themselves freely, satisfied that there is no fear of bringing about a crash which would place them in danger of not receiving their salaries next month.

Mr Lewis:

– Then why does the honorable member not play a tactical game, and help to defeat the Government?

Mr NAIRN:

– I am not concerned with tactics.

Mr Lewis:

– Oh, no, the honorable member is too high-minded.

Mr NAIRN:

– It is not highmindedness - merely common sense. I know that there would be no advantage in defeating the Government if the result was that the country would fail to meet its commitments in July. That could only result in disaster. Nothing is gained by harking back to the theory that we could cure our ills by issuing paper money. Our notes would not be acceptable abroad, and I arn not prepared to consider any scheme involving plain dishonesty in our dealings with those who have lent us their money. There is another class of critic represented by honorable members who for months past have clamoured for reduced expenditure, but who, when a bona fide scheme for economy is, for the first time, placed before the House, reject it, and endeavour to win cheap popularity by pandering to those who will suffer through the operation of this plan. The honorable member for Wimmera (Mr. Stewart) is one such offender. He told the House that he had a personal grievance in that lie and his party had not been consulted before the plan was adopted. The only alternative to the Government’s plan which the honorable member could suggest was that we should extend the life of parliament for a further three years, and in the meantime set up a non-party government. I should like to know what the present Parliament has done which would justify the extension of its life for a further three years.

Mr Lewis:

– The honorable member is himself a member of this Parliament.

Mr NAIRN:

– I am, and candidly, I am ashamed of the manner in which it has for months refused to do its obvious duty. It was pointed out months ago by honorable members on this side of the House, and in the press - as was, indeed, obvious to every intelligent observer - that Australia, was drifting into the situation with which she is now immediately confronted, and that certain definite action was necessary if she would avoid default. Parliament refused to face the position, and allowed things to drift until national bankruptcy has become imminent. Yet we are asked to prolong its life. The shortcomings of this Parliament have been such that its principal function has actually been taken out of its hands and transferred to an unofficial body, largely self-appointed, described as the Premiers Conference. The decision regarding the present radical change of national policy should have been made by this Parliament, but because Parliament, and particularly the Government, refused to do its duty, a new authority has been called into existence to do the job. Let not any honorable member think that this Parliament stands high in the public esteem. So far as I can see, the majority of the people would not tolerate any extension of the life of Parliament, but would rather welcome the first opportunity to give it its quietus and elect a new one. The honorable member for Wimmera (Mr. Stewart) complained that there was no reference in the Government’s plan to the tariff, and I sympathize with him in his complaint; but it should be obvious to him that so long as the present Parliament exists, there is not likely to be any change in tariff policy. If, therefore, he were to extend the life of Parliament for another three years, he would be merely prolonging the present tariff policy for a corresponding period.

I have no doubt that the Government’s plan is capable of improvement in some respects, and I reserve my right of criticism, but I do not approve of the action of those honorable members who have been trying to play up to certain sections of the community. We should understand that drastic economies are needed, that they have to be made, and made quickly. For that reason I do not place so much store, as apparently do my leaders, on the principle of the voluntary conversion of Australian bonds. I cannot persuade myself that this will really be a voluntary conversion. If it were, we should give the bondholders an opportunity to declare whether or not they would voluntarily convert their holdings at a lower rate of interest, but we are not giving them that opportunity. We are assuming that unless they refuse to convert within a certain time, they will be deemed to have consented. They are not to be given a full and free choice as to what they will do. There is a veiled threat associated with the plan, and I doubt whether many bondholders will have the hardihood to refuse to convert when, by so doing, their identity will be revealed, their names and addresses, perhaps, published in the press, and themselves exposed to the charge of being Shylocks. Not many will take that risk, and it is not likely, therefore, that we shall be able to deceive either the bondholders or the public generally into the belief that there is anything of a voluntary character associated with this conversion. In any case, what does the Government propose to do with those bondholders who do refuse to convert? I cannot imagine that Parliament will permit those unpatriotic persons to reap the advantage of the higher rates of interest, while the more patriotic bondholders suffer a reduction. It would be much better if all were treated alike, and all required to convert their holdings at a lower rate of interest. Two mouths ago I was the only member on this side of the House who declared that the interest bill of Australia was more than she could pay, and that Parliament would have to face the question of obtaining a reduction. I was accused of being something of a repudiationist then, but I deny that, in the circumstances, there is anything in the. nature of repudiation in requiring bondholders to accept a lower rate of interest, although it is undoubtedly a breach of contract. Repudiation implies, not only that we refuse to fulfil our contract, but that we have the capacity to fulfil it. At the present time, the Commonwealth of Austraia is not in a position to pay in full the interest owing to the bondholders, and that is the only reason we have for bringing about a reduction. There is nothing creditable about it; it is simply the compulsion of circumstances. The arguments which have been adduced in support of a reduction in the interest paid to Australian bondholders could also be used with equal force with respect to the interest paid to overseas bondholders. That is the most incomplete feature of the scheme. The Commonwealth will be unable to continue to pay interest in full, plus the high rate of exchange which now prevails. According to the figures supplied to the conference of Commonwealth and State Ministers by the committee of experts, the interest, sinking fund, and exchange costs for the financial year commencing on the 1st July next are estimated nt £74,000,000, while the revenue to be derived from taxation imposed by the Commonwealth and the States is estimated at £79,000,000. It will be seen from those figures that practically the whole of the revenue derived from this source will be absorbed in meeting interest payments. The interest paid to Australian bondholders is about £30,000,000; but the interest and exchange to be paid to overseas bondholders will amount to £45,000,000 quite apart from £35,000,000 which we have to ‘find to meet our short-term commitments. I do not see how it can be done. I do not wish the Government to come to Parliament in September, when further bills are falling due in London, seeking authority to ship a further £5,000,000 worth of gold, or for the Government to go on the London or any other market to borrow money merely to pay interest on existing debts. It appears that our only object in endeavouring to pay our creditors in full is to maintain our credit so as to enable us to raise further loans. There is no virtue in reverting to the bad old policy of borrowing either in Australia or abroad; the question will immediately arise as to the rate of interest to be paid. If we reduced the rate paid to Australian bondholders to 4 per cent., and endeavoured to borrow new money abroad at 5£ or 6 per cent., it would obviously be a fraud on those with whom we now propose to break our contract. We should be more honest in our dealings with overseas lenders if we placed them in the same category as the Australian bondholders by offering them a flat rate of 4 per cent. The value of an asset is not governed by the interest which, for the moment it earns, but by its capital value as disclosed in the stock exchange quotations. At present, an ordinary £100 Commonwealth bond is worth only £65 or £70. Most of these bonds are held by trustees, whose assets in that form have now diminished to the extent of 30 per cent, to 35 per cent. If interest on these securities were fixed at 4 per cent., which is a fair rate, and we displayed an honest determination not to quibble, I believe that there would be a substantial appreciation in the value of bonds now held overseas. Instead of doing an injustice to those bondholders by adopting such a course we would be rendering them a good .service. I support the general policy embodied in this plan, and commend the Government for now having the- courage to do, although very late in the day and under compulsion, what it should have done twelve months ago. As regards bondholders generally, I should prefer to see a resolution similar to that adopted at the conference paraphrased to read that “ Recognizing our national inability to meet existing government charges we are obliged to make a composition with all our creditors in respect of interest by paying them at a rate not exceeding 4 per cent.”

Mr LONG:
Lang

.- I have listened to this debate with as much interest as it was possible for me to create in my mind; but the longer the debate has continued the more have I become convinced that this so-called complete plan is very incomplete. At the outset, I wish to say that I shall have no hesitation in protesting and voting against that portion of the scheme which provides for a reduction in invalid and old-age and war pensions, and the maternity allowance. In opposing these reductions I have been guided by expenditure during the present financial year as disclosed in the Estimates. It will be noted that there has been a considerable amount of cheeseparing during the last eighteen months in an endeavour to bring about financial stability to create a better feeling among the people, and to provide a solution, up to a certain point, of the unemployment problem. After studying the reductions made during the past twelve or fifteen months, I am convinced that the position is now as serious as when the first reductions were made with the object, as stated by those who support the plan, of making certain sums of money available to industry, and thereby absorbing some of the unemployed. If that object had been achieved, I should be supporting the plan instead of opposing it. We have no guarantee nor has anything been advanced by the supporters of the scheme to show that its acceptance will mean that more men will be absorbed in the industries of this country. I ask those supporting this proposal in what industries money will be invested, and in what way is it proposed to provide work for those who are now unemployed if this plan is adopted? It is practically common knowledge among honorable members that to-day the position of Australia is much the same as that of a business without buyers. We have an over-abundance of commodities of all descriptions, but our people are unable to purchase sufficient of them. If this plan is accepted it will mean a further reduction of their purchasing power. How is that to rectify the evil?

The proposal to reduce the pensions of the aged and infirm savours to me of cowardice, not on the part of the Government, but on the part of those who control finance. These people gave unselfishly of their best to the country while they possessed health and strength ; they brought children into the world and helped to make Australia what it is. Now, in the winter of their lives they are called upon to make this sacrifice, and each of the 239,000 persons who are receiving invalid and old-age pensions is to be compelled to contribute 2s. 6d. a week, representing 22^ per cent, of their pension, or an aggregate sum of £1,825,000 per annum, in order to assist the Government to balance its budget. Surely other fields could have been exploited before resorting to such an inhuman action. I do not lay the blame on the Government. The present situation simply affords an excellent illustration of the impotency of governments under the existing system of monetary control, distribution and exchange.

We hear a great deal of talk about “ equality of sacrifice “. I fail to see where that is to operate under the plan. The plan proposes to reduce the pensions paid to our returned boys, who in all good faith answered the appeal of honorable members opposite and their kind at a time when the country was said to be in danger. They shouldered rifles and donned khaki to make Australia safe for those who now seek to despoil them. At that time they were informed that the greatest sacrifice that Australia could make on their behalf was not too much for them. Now, the pensions of the maimed and the broken in health are to be reduced by 20 per cent., which will account for an aggregate saving of £1,291,000 in the expenditure of the nation. I am not a returned soldier, but I know that nothing in t]]e world can compensate anybody for the loss of sight, of a limb, or of health.

Next, a saving of £0,500,000 is to be effected by a 22^ per cent, cut in interest rates on Australia’s internal loan. How is it that people who hold this country in a relentless financial grip are to be asked to contribute voluntarily towards balancing the budget, while the recipients of old-age and soldiers pensions are to be deprived ruthlessly of portion of their small annuities? Again, where is th, equality of sacrifice when old-age and invalid pensioners are to undergo a 12-£ per cent, reduction, and incapacitated returned soldiers one of 20 per cent., while highly-paid officers in the Commonwealth service are still to receive very substantial emoluments for their labours? I instance the case of an official now in receipt of £4,000 a year*, who, after these economies are effected, will still receive £3,000 a year.

Mr Crouch:

– A 25 per cent, reduction.

Mr LONG:

– It does not matter how much the percentage deduction amounts to. The fact that concerns me is that he is still to receive a very high salary, while pensioners are to have their small incomes reduced.

Much has been said about credit and credit expansion for the purpose of helping industry in Australia. I offer the suggestion that it would be better to maintain the spending capacity of the people than to pull down their wealth circulation as it is intended to do by this plan. I shall quote one or two extracts from the Queensland Producer of the 12th November last, which is certainly not a Labour journal. The concluding paragraph of the editorial of that date reads -

If another war occurred’ thu self-same magnates and financiers would miraculously find tiny amount of money to prosecute it. The question whether they were repaid- the- money advanced would not enter into consideration If they thought their wealth or precious skins were in dangar, they would pour out money like water. Do they ever reflect that they owe u debt to the present generation in every part of the Empire? Their refusal’ to “lighten the financial burdens of the dominions ia. therefore, strongly suggestive of repudiation of a debt of honour. As we said before, (here is more than one form of repudiation, and this is an example.

Mr Archdale Parkhill:

– What does it say about the sugar agreement?

Mr LONG:

– While that subject may be occupying the thoughts of the honorable member for Warringah (Mr. Parkhill) at this juncture, my attention is focussed on the position of the old-age, invalid, and returned soldier pensioners. The first part of that article reads -

The claims of allied and enemy countries for a re-adjustment of war debts were alike considered by creditor nations on the basis of the ability of tlie particular country to pay. Although great Britain unquestionably got tlie thin end of the deal from France, and some of the other Allies, there was no talk of repudiation when she approached America for tlie funding of the war debt owing to that country. Notwithstanding that thu terms of settlement were finally fixed between the two countries, much to the advantage of America, nothing derogatory is said of the recent pourparlers suggesting a re-opening of the matter.

As a fact, a large aud influential section of American opinion supports Britain in her claim for more favorable treatment. Yet when the suggestion is mooted that Australia is entitled to receive sympathetic consideration from Britain in respect to her war indebtedness, certain of our politicians and financiers raise their eyes to heaven and protest in horror that it would be rank repudiation to do so.

Mr Archdale Parkhill:

– I take it that the honorable member agrees with the sentiments that he has read.

Mr LONG:

– I simply quote them.

As further evidence of the fact that there will be inequalities of sacrifice if this plan is agreed to in its present form, I direct the attention of honorable members to certain details of expenditure from revenue given in the 1930-31 budget papers. Provision is made therein for sixteen persons to receive salaries aggregating £42,750 per annum. I do not make this statement with any disrespect whatever to the officers concerned. The following salaries, among others, artprovided for : -

A reduction of 25 per cent, in these salaries cannot be regarded as anything. like as severe to tlie persons concerned as a reduction of 2s. 6d. in the £1 will be to our old-age and invalid pensioners.

A gross injustice will also be done to certain members of the Public Service, unless we are careful. I wish to make it quite clear that I have the greatest admiration for every officer of the Public Service. I believe that, generally speaking, our public servants perform their work efficiently and loyally. But there will be inequalities in the sacrifices’ they will be forced to make if the plan is adhered to in its entirety. For instance, many clerks in New South Wales are already paying a wage tax of ls. in the £1. There is no proportionate reduction in respect of salaries under £250. I sincerely hope that, in making the 20 per cent, cut in such salaries, the authorities will take into account the 5 per cent, wage tax already in operation in New South Wales. If this is not done public servants in that State will be at a serious disadvantage. Representations have been made to the Government in this connexion, and a case has been submitted which merits the earnest consideration of the Government.

In conclusion, I emphasize that I am unalterably opposed to any interference with our old-age, invalid and soldier pensions. The men who enlisted for active service and went overseas to fight for Australia during the Great War are entitled to every consideration, for they did what they believed to be best in the interests of their country. I hope that some other method of adjusting soldier pensions will be adopted than that which has been proposed. I am given to understand that many ex-soldiers in the Commonwealth Public Service, who returned from the war without any disability whatever, are to-day drawing reasonably good salaries from the Government in addition to a full war pension. Such cases should be reviewed before a general onslaught is made on soldier pensions.

Mr Maxwell:

– That is being done.

Mr LONG:

– I am pleased to hear it, for there is a wide field for investigation in this direction. I hope that every avenue which suggests a possible saving will be explored before our old-age, invalid and soldier pensions are interfered with.

Mr WHITE:
Balaclava

.- Any one who has any regard for the solvency of Australia must support the principles of the plan for the financial rehabilitation of the nation, which was approved by the recent Premiers Conference. There is no necessity to dilate upon the urgency for putting this plan into operation, for that must be apparent to everybody. In the details of the plan there is unquestionably room for adjustment and negotiation. The plan provides, among other things, for the reduction of government expenditure, which the Opposition has been advocating for more than twelve months. Because of the vacillation of the Government, the economies that must be made now are much more drastic than would have been necessary had the terms of the agreement made in Melbourne last August been adhered to, or had the Prime Minister taken steps on his return from abroad to bring about economic stability. The right honorable gentleman had the goodwill of the whole nation at that time, and he could have done a great deal to help the country out of its troubles.

I have no doubt that the voluntary conversion loan, the greatest conversion project ever contemplated in Australia, will be successful. The people will respond to this appeal in almost the same patriotism as they showed in subscribing to the £28,000,000 loan last year. Undoubtedly the conversion of present holdings will cause a good deal of hardship to many small bondholders, and even to large companies like life assurance offices which work on a small margin and have long contracts to consider.

In making its reductions in expenditure I hope that the Government will not deal too harshly with the Defence Department. I had something to say on this subject this afternoon, so I shall content myself on this occasion with urging that the principal reductions be made on the administrative and not on the training side. Our Defence Department has become overburdened on the administrative side, with the result that the training branch has not been given that consideration which it deserves.

It is proposed to effect a saving of £225,000 per annum in the expenditure on maternity allowances by reducing the payments from £5 to £4, and making them only to persons in receipt of a salary of not more than £250 per annum. In my opinion a very much better result would be obtained from the expenditure of this money if the Government would make the payments direct to institutions which provide for maternity case3. By spending the money in this way the Government could be assured that the purpose which the expenditure was intended to achieve would be attained, and that the mortality would be reduced to the lowest possible proportion. This proposal could not apply, of course, to outback cases where bush nurses and country doctors would be the recipients. I am quite sure that the various institutions, which at present are experiencing great difficulty in financing their activities, would welcome such a proposal. It would be more easily administered, and I am convinced that it would have infinitely better results.

But it is in connexion with the incursion, by the Government, into the payment of war pensions that I intend to speak to-night, and since time is limited, I shall be as brief as possible, so thatother honorable members may have an opportunity to address the House. In my opinion, the Government’s economy scheme, as outlined by the Prime Minister, if applied to returned soldiers will be altogether too drastic. It seems to me that there has been judgment given without a full knowledge of the circumstances. Therefore, I welcome the invitation to representatives of the various returned soldiers organizations, which are nowmeeting in conference to suggest variations of the proposal which, while giving effect to the Government’s proposal, may be more acceptable to the returned soldiers themselves. To suggest that it will be possible to save £1,291,000 from total soldier pension payments of £7,762,508 implies a policy of economy which is altogether too harsh. Personally, I should like war pensions to be untouched, because I consider that these payments are an obligation on the Government quite as binding as any contract made between the Government and bondholders or as any treaty. But the Prime Minister has told us that unless something is done to reduce, among other items of expenditure, payments in respect of war pensions, the Commonwealth is faced with default. Honorable members have received from the different organizations representing returned soldiers, letters and telegrams protesting against the Government’s intention to cut war pensions. I do not intend to read any of the telegrams or letters which I have received. They put the case of the returned soldiers very fairly, but I intend to stand by what I say myself on this subject. Payment of war pensions is compensation for personal war disabilities. It is not in the nature of a charitable grant. It differs altogether from the payment of old-age pensions, and, unlike invalid and old-age pensions and wages in industry, has not been increased from time to time in sympathy with the increase in the cost of living. It is regrettable that the financial situation of the Commonwealth impels the Government to make a cut in old-age and invalid pensions, because these pensioners, in common with other sections of the community, are suffering other disabilities due to the existing depression, and their numbers have increased on that account. But it is a fact that these pensions were increased from 15s. to 17s. 6d. per week in 1923, and again from 17s. 6d. to 20s. per week in 1925, whereas soldiers’ pensions have not varied with any alteration in the cost of living. The first war pension payments were provided for in 1914; before any actual fighting took place. It was then enacted that every totally disabled soldier should receive 20s. per week. But in 1916, when the casualty figures began to mount up, the payments for totally disabled soldiers were increased to 30s. per week. Even in those days disabled soldiers did not complain, because they considered themselves lucky to be alive. It was not until 1920, when we were able to get, in its true perspective, all that the war cost and meant to us, that the present rate of pension for totally disabled soldiers, namely, 42s. per week, was decided upon.

There has been a good deal of vague generalization in the speeches of honorable members with regard to the number of war pensioners and the amount actually paid under this head. The Treasurer (Mr. Theodore) stated that there were, at present, approximately 280,000 war pensions in Australia. These figures include all dependants. Actually only 74,57S ex-soldiers, out of a total enlistment of 330,000, are drawing pensions for war disabilities. As there were no fewer than 90.3S9 pensioners in 1920 it is obvious that nearly 20,000 have died since that year. Many honorable members and also the general public, appear to have a totally mistaken idea as to the amount actually paid by the Government. It may, therefore, interest them to learn that of the total number of war pensioners one-third receive up to the quarter-pension rate which is 10s. 6d. per fortnight or 5s. 3d. per week; another onethird receive up to one-half the fullpension rate, 21s. per fortnight, or 10s. 6d. weekly. The other one-third receive up to the full-pension rate of £4 4s. per fortnight, in some cases with allowances. A further 3,000, including men with double amputations and others who are cot case3 and will be in hospital for the remainder of their lives, as well as tubercular cases and blinded soldiers, receive the special pension of £4 weekly, plus allowances for attendants and recreation in many cases.

The Prime Minister claims that the Government’s plan aims at equality of sacrifice. How can it be seriously contended that there is equality of sacrifice if returned soldiers suffering from war disabilities of the nature described are to be subject to a reduction of 20 per cent.? I. would point out that, returned soldiers as citizens of the Commonwealth, are doing a little more than their share in the rehabilitation of the nation. There are to be found in the ranks of our unemployed considerable numbers of returned soldiers who, through going to the war suffered broken apprenticeships, and upon their return, to Australia were obliged, to seek work among the unskilled. Those whose living was in the professional or commercial world suffered similar handicaps through valuable years lost;, and in the Postal and Public Works Departments, as we know, of the 2,000 odd dismissed between June and December of last year, over 1,500 were returned soldiers. The majority of ex-soldiers are now middle-aged men and, because of the handicaps to which I have referred, they are carrying more than their fair share of the burden in the present distress. In the various departments of the Public Service they have, in common with other employees in all industries, suffered reductions due to the basic wage adjustment, by the rationing of work and in other ways. The Repatriation Department acting as trustee for mental soldiers and dependants of deceased soldiers, has also invested approximately £500,000 in Government bonds, the interest upon which will, under this bill, be reduced by 22£ per cent.

Let us now examine the position, -under the Government’s scheme, of those exsoldiers drawing special pensions. I refer particularly to those who suffered double amputations, the blinded and the tubercular. In addition te a cut of 20 per cent. in pension payments there will be a reduction in the allowance for attendants, and also in transport and recreation allowances. If honorable members care to examine the figures, they will find that, in the case of blinded soldiers drawing these special pensions, the sacrifice demanded of them works out at about 40 per cent. On top of this blinded soldiers in Victoria are to be deprived of free railway and tramway passes, so that, the States will also effect reductions. The partially blinded soldier, the man who receives 21s. per week, has a special allowance of 7s. 6d. per week. God knows he deserves it, because the partially blinded man who may have only one eye and has suffered other facial disfigurements, finds it extremely difficult to hold his place in competition with men who have suffered no disability, whenever be meets them in competition for positions such as shop assistants, where employment depends to some extent upon personal appearances. The Government suggests a cut of 20 per cent, in this class of pensioners and proposes also to withdraw tlie special allowance of 7s. 6d. per week’. This means a reduction to 16s. 8d. per week, or 42 per cent.. Where is the equality of sacrifice in the case of those pensioners as compared with bondholders or others who suffer a cut of 22-J per cent, in interest?

Mr Lewis:

– Would the honorable member agree to reduce the interest of bondholders by 40 per cent. ?

Mr WHITE:

– That is another matter. A blinded man may have a very small chance of securing work. The Committee of the Institute for the Blind in Victoria is reported to have said that, unless there is a surplus of work for its inmates, it cannot take in returned soldiers. In the circumstances a blinded or partially blinded soldier who may require a personal attendant has very little to live on.

Mr Long:

– Or exist.

Mr WHITE:

– That is so. The amount of £1,291,000 has been hastily arrived at. I do not contend that there are no anomalies capable of being removed. For instance, I am not in favour of ante-dating pensions. When a man applies for a pension and the Entitlement Board upholds his application, the pension may be paid from the date of his first application. The AuditorGeneral has drawn attention to some of these cases, and many of them cover men who did not reach the firing line. If these anomalies were explored there would be an immense saving.

Mr Archdale Parkhill:

– Will not the committee go into them?

Mr WHITE:

– According to the terms of reference it will not- do so. In any event there are 74,000 cases to be dealt with, and the time available will be totally inadequate for a review of the whole of them. If the war pensioner is to be mulcted, I think that voluntary committees should be set up in each State. At the present time there are soldier welfare organizations controlling enormous disbursements from the McCaughey fund and from other sources. The services of these bodies might be co-opted to work in with persons nominated by the Government. They could be pledged to secrecy, and after investigation of different cases could make recommendations to help the committee referred to by the honorable member for Warringah (Mr. Parkhill). That committee is very well chosen, representative as it is of the returned soldier leagues and kindred soldiers organizations. To my mind the sum that this committee will find can be saved will be about half the amount mentioned by the Government.

It is easy enough to say, as some honorable members have said, that an honorable member who champions this or that cause is looking for glory and plaudits from a particular section of the community, but often the abuse to which he has to submit is often greater than any praise he gets. I speak on this occasion because I feel that the cause of these men needs to be championed. At a certain period in our history there was nothing too good for them. The nation entered into a bond with them to pay them pensions, and their pensions have not risen with the increase in the cost of living as invalid and old-age pensions and the basic wage have done. Merely to look at the figures in the Repatriation Commissioner’s report, and to say “ We shall cut the amount down by 20 per cent.”, as the Government is doing, is unfair. The Government has also suggested that £181,000 would be saved by a discontinuance of. the payment of pensions to widows who re-marry, and several other savings, evidently suggested by the Repatriation Department, are contemplated. But I shall not be surprised if the committee returns the plan for the saving of £1,291,000 to the Government, saying that that amount cannot, be saved. In any case, our soldiers were not conscripted. They went to the front of their own accord; and since we are allowing our bondholders an opportunity to make a voluntary conversion, it would not be out of place if we afforded the soldier an opportunity to say what his contribution should be in this time of national crisis. Is it just that the contribution of the old-age pensioners should be only 12£ per cent., while that of the soldier is to be 20 per cent, and as much as 40 per cent. ? A war pension is not charity : it is compensation for a war injury. Some ill-informed persons are under the impression that many soldiers are getting from £2 to £4 a week for nothing. The only soldiers who receive pensions of £4 a week are double amputation cases or blinded or tubercular men; and three times £4 a week does not recompense men who have suffered such fearful disabilities. I am told that, in a certain State capital, a civilian who was fond of saying that the soldiers were getting pensions quite out of proportion to their injuries, was waited upon by a deputation of limbless men - a man who has had a leg removed below the knee gets a pension of 35s. a week - and was told that they had clubbed together and had decided to make him an offer. The offer was that if he would have his leg removed below the knee they would pay for the operation and he would be paid 35s. a week for life. No further remarks about soldiers’ pensions have since been heard from that gentleman, nor has he accepted the offer of the limbless men.

I trust that the Government will give this matter the fullest consideration and that it will not come to a hasty decision. Unfortunately, the committee has only until the 2nd July to submit its scheme; otherwise, the Government will go ahead with its plan. By dealing with various anomalies, there is, in my opinion, a possibility of saving about half the amount mentioned by. the Government, but the war pension reduction, in the case of men who have suffered most, will amount under this plan to about 40 per cent.

Mr Crouch:

-Would the honorable member fix a salary limit for those who receive pensions?

Mr WHITE:

– Many alternatives could be suggested. The soldiers might be asked the question we are asking the bondholders : whether they will surrender their pensions, provided they retain the right to secure them again if they should subsequently become destitute. Subject to that condition, many soldiers, I am sure, would voluntarily surrender 5 per cent. or 10 per cent. of the pensions they are drawing.

Mr Long:

– Provided they are suffering from no disability.

Mr WHITE:

– They must be suffering from a disability. If a man who has been awarded, say, a quarter pension, is found by the Medical Board to be getting fit and not to be losing time in his employment, his pension is reduced.

Mr D CAMERON:
BRISBANE. QLD · NAT

– No one gets a pension simply because he has been a soldier.

Mr WHITE:

– No; he must have a distinct disability. He is examined by a medical board and the examination is very strict. The pension is fixed according to the disability which the board considers he is suffering. I think that if the Government takes full cognizance of all the facts and makes a thorough exploration of the various ways in which savings may be effected, it will not try to avoid the definite and binding obligation of Australia to every incapacitated soldier, and to the dependants of every deceased soldier. These are obligations which must not be lost sight of and cannot, in any circumstances, be repudiated.

Mr D CAMERON:
BRISBANE. QLD · NAT

– The Commonwealth is like a great ship which set out eighteen months ago upon a long voyage under a new captain and with a new crew. The captain in charge, upon the ship’s return from her previous voyage, had advised the owners that there was every indication of a period of bad weather ahead, and suggested that certain precautions should be taken to ensure safe navigation. The owners paid no attention to this advice ; in fact, they dispensed with the old captain’s services. When the ship set out eighteen months ago she almost immediately ran into bad weather, which has been practically continuous. The steering gear was damaged, the engines became defective, the ship sprang a leak, and there was a serious shortage of coal. Early in the voyage fighting developed amongst members of the crew; that was more or less continuous and ended in active mutiny. Two of the ship’s officers, who realized the seriousness of the position and urged that something must be done, were thrown overboard. The weather conditions became worse, and disagreement amongst members of the crew continued. The ship meanwhile drifted into dangerous and uncharted waters. There were men on board with a wide knowledge of navigation. They called the commander’s attention to the position, and offered to give every possible assistance to avoid disaster. Their offers were scorned. It was only when the total loss of the vessel seemed imminent and inevitable that the commander appeared to realize the danger and appealed to all on board to assist in manning the pumps and repairing, if possible, the engines and steering gear. It is the bounden duty of all on board to do everything in their power to help to save the ship, if it is possible to do so at this late hour.

To-day Australia’s position iS_ that all seven governments are closing this financial year with an aggregate deficit of £30,000,000. Bad as that is, the position we are heading for next year is worse, much worse. The aggregate deficit then, if we go on as now, will be £40,000,000.

As a fact it will not be possible, even if we so desire, to carry on next year at the present rate of expenditure. Money will not be forthcoming to meet the expenditure, and further borrowings, either from banks or private people, will be impossible. No one can be expected to lend to those who are seen to be getting further and further into debt. We must reduce expenditure to something like receipts, or the result will be, not a £40,000,000 deficit at the end of next financial year, but an all-round default before the year is nearly out.

The restoration plan that the advisers of the Loan Council have put forward, and which has been accepted by the representatives of the Federal and State Governments, is designed to meet the position of unprecedented national emergency.

Its two main features are the reduction of interest and the reduction of general expenditure. Interest is costing the seven governments of Australia £60,000,000 a year, and departmental expenses, mostly wages, cost another £98,000,000 in the year 1929-30. Then there are old-age, invalid, and war pensions, costing, with the maternity bonus, another £21,200,000. Under these three main heads - interest, departments, and pensions - Australia is spending £1S0,000,000 a year, which is approximately nine-tenths of the total expenditure. It is madness to suppose that the current rate of expenditure, or anything like it, can go on. It was barely possible in boom times; it is quite impossible now when the whole national income has fallen from £650,000,000 in 192Y-28 to an estimated £450,000,000 for the coming financial year. That is to say, there has been a drop in national income, in five years, of £200,000,000, while the expenditure is actually more than it was at the height of the boom period.

We are asked to approve of suggestions for reductions in expenditure. Any one who looks facts in the face will agree that there is no other road to recovery. Bondholders will nOt make voluntary sacrifices, as they are being asked to do, if government payments, other than interest payments, are to continue as usual. Neither will wage-earners, and people on moderate incomes, sit down under wholesale reduction if receivers of interest are to go on enjoying all they get now. The proposed 20 per cent, cut in general departmental expenditure, if carried out in its entirety, would mean a saving of roughly £20,000,000. South Australia and West Australia show economies for 1931-32 amounting to 20 per cent, of their departmental expenditure. Further reductions by the Governments of the Commonwealth and the four other States to achieve the 20 per cent, scale of economy, would save £8,900,000. Such reductions would, at one stroke, wipe out approximately half of the aggregate deficit for all Governments for 1931-32, and would carry us half-way on the road to recovery. So far as the Commonwealth is concerned - and of course we can deal only with it - a 20 per cent, cut in administrative and business undertakings would mean a saving of £2,800,000 - £1,800,000 representing the 20 per cent, reduction in wages and salaries exclusive of the £500,000 reduction already brought about by the fall in the cost of living, and £1,000,000 to be saved in other ways. This saving could be made without undue hardship. In most cases it would not mean a 20 per cent, reduction on present, wages and salaries, because an Si per cent, reduction is already in force. Even allowing for that, it would still be possible, over the whole field of departmental expenditure, to effect a saving of not less than £3,000,000. The apportioning of the cut would be a matter of adjustment. The point is that, with such reductions, there would be security of tenure as against insecurity - or worse than insecurity if things are allowed to go on.

The plan provides for the conversion of the internal debts of the Australian Governments on the basis of a 22-J per cent, reduction of interest. The internal debts of Commonwealth and States amount to about £556,000,000, and the annual interest liability is approximately £29,000,000. The conversion scheme now proposed would mean a saving for all Governments of about £6,500,000 and for the Commonwealth alone a saving of £2,470,000. The bondholders are asked to make, by voluntary conversion, a very definite contribution to the inescapable and unprecedented demand for general reduction in governmental expenditure. If this loan is successful, as we all must hope that it will he, it will do more to re-establish our national credit than anything else could possibly do. I am definitely opposed to any compulsory amendment of the contracts entered into with our internal bondholders. Any such proposal would result in untold damage to our national credit. What is the greatest asset of our race? It is the fact that we can be trusted, and that our word is accepted all the world over as our bond. When we cannot be trusted as a people that will be the beginning of the end of our Empire, and will result, as has been the experience of other empires, in our absolute destruction. The payment of interest on government bonds is the most definite contract that can be entered into by any nation. I may be wrong, but that is my view. When irresponsible persons suggest that the right way to get out of our financial difficulties is for Australia to repudiate her contracts with her bondholders, either in whole or in part, responsible people with commendable promptitude condemn such a suggestion. Public sentiment is, I believe, behind such condemnation.

When a government issues a loan it offers to investors the greatest of all securities - the national credit and the national assets. When inviting subscriptions it announces terms on which it will receive money. In the name of the nation it binds itself to pay certain interest rates for money which the nation wants. Every subscriber knows that his interest will - save, of course, in tax-free issues - be taxed when he receives it as part of his general income from property; but no subscriber expects or has any reason to expect, that it will be reduced in any other way. The subscriber of £1,000 becomes the nation’s creditor to the extent of £1,000 actually received by the nation, and to the further extent of a fixed annual rate of interest. Because the debtor happens to be the Government is the obligation to pay the debt in full any the less imperative? We are told, and I heartily agree, that in to-day’s financial emergency the sacrifice must be distributed. But what would a tradesman say, if, on presenting his account, I informed him that, in the interests of all-round sacrifice, I had decided to reduce his account by 10 per cent.? He would say, no doubt, “For future transactions I am prepared to discuss a lower price for I know that money is scarce - under the special circumstances I am prepared to look over the account and reduce it if I possibly can, but you have eaten my goods, and in decency should, if possible, stand by the price agreed upon “.. Honesty in public undertakings is not only the best principle, but also the best policy. National honour and national credit would be involved in any compulsory conversion proposal, also the element of “ simple justice “.

In normal times of prosperity government loans show an interest return substantially below that obtainable from general interest investments. Bondholders always accepted this difference as the price that they were prepared topay for absolute security, and their attitude has meant that the nation has in the past been able to secure its loan moneys’ - its working capital - at a rate below that paid by industry generally. It is our duty to use every effort to make this voluntary conversion loan, unprecedentedin its magnitude and importance, a complete success.

I come now to pensions. It is estimated that we are now paying £21,200,000 in pensions. The Government proposes a reduction to £17,000,000, which will be a saving over the whole pension field of £4,200,000. No honorable member wants’ to touch either soldiers’ pensions or oldage or invalid pensions.

I will deal in the first place with war pensions. I hold the definite belief that there should be no general reductions in war pensions, as a means towards reaching budget equilibrium, unless and until’ all other avenues of economy have been explored and exhausted. War pensioners have special claim upon our sense of justice - I would not say generosity. The payment of war pensions is comparable, as far as the national obligation is concerned, with the payment of interest on governmentbonds. There are those who maintain that the country’s bond with the ex-soldier is to pay the pensions provided for in the act of 1914, and nothing more. The undertakings in the acts of 1916 and 1920 were just as binding. While to-day in the nation’s great dilemma, sacrifice is demanded from all - and we are all agreed that there should be equality of sacrifice - I maintain that the dependants of those members of the Australian Imperial Force who passed out of the sight of their fellow men by the road of duty and sacrifice, and the tens of thousands of our ex-soldiers who are today broken in health, maimed in body, and clouded in mind, as a result of their war service, have, as far as personal sacrifice is concerned, moved far along the course before the great majority of us have made a start. The following table shows the position in respect of war pensions : -

Total paid since inception of pensions to 31st May, 1931- £96,262,983.

Soldier pensioners between 1924-25 and 1929-30 died at the rate of about two per day.

Of the total amount paid in war pensions for the year ending 30th June,1930 - £7,762,508 -

The following table shows the rates of pensions provided in the acts of 1914, 1916, and 1920:-

I consider that a reduction in war pensions expenditure can be made with the least hardship to those most vitally concerned by leaving untouched the pensions payable to ex-soldiers and to the dependants of the deceased. Considerable reduction could be made by the removal of anomalies. These are known to all honorable members. If further reductions should be found necessary, I firmly believe that an appeal could be made successfully to those who are in receipt of pensions and could at present carry on without them, to voluntarily relinquish all, or portion of such pensions on the definite understanding that their pension rights would not be affected, and that they would at any time, should their war disabilities increase or earning powers decrease, be eligible to again receive a pension. War pensioners are rapidly growing old. Men who were on active service during 1914-1918 are prematurely aged, and reductions in the pensions of exsoldiers who are dependent upon such payments, are, in my opinion, quite unjustifiable at the moment. I repeat that I am convinced the appeal on the lines I have suggested would meet with success if launched with the same keenness and faith which will characterize the national call to the internal bondholders to convert their holdings. . If the appeal proved a failure, then I would pass into the limbo of obscurity, disappointed and dejected. Such an appeal, I feel, could not fail. There would be a general realization that the resulting temporary reduction in our annual liability for war pensions would ensure that pensions would continue to be paid to those who are dependent upon them for their livelihood. I am told that it is now too late for this to be done. Some weeks ago, when I saw what was coming, I urged the Minister for Repatriation to endeavour to persuade his colleagues to make such an appeal. He said that he would submit the matter to Cabinet, but so far as I am aware nothing has been decided.

There are other matters connected with this plan to which I should like to refer; but I do not wish to take up the time of the House unduly. I desire, however, to make a brief reference to the proposal to raise a further £7,900,000 by means of increased taxation. It is proposed to obtain an amount of £4,000,000 by means of an increased sales tax, £2,400,000 from a higher primage duty on imports, and £1,500,000 by further income taxation. I have no doubt that there will be strong objection to the proposals to increase the sales tax and primage duties which two of the Under-Treasurers who reported to the Loan Council condemned on the ground that their effect would be to increase the cost of living, and also the cost of production, thereby delaying national recovery. They expressed the belief that the deficit should be reduced by other means. It is estimated that our national income for the coming financial year will be reduced to £450,000,000. During that year we propose to raise, by means of taxation, a sum of £175,000,000 - approximately £27 per head of the population. Great Britain, which since the war has been cited as the most heavily taxed country in the world, raised last year for governmental purposes £775,000,000, or less than £18 per head of the population. It will, therefore, be seen that the people of Australia are paying for the expenses of the Government £8 or £9 per head more than the people of Great Britain are called upon to pay, notwithstanding that country’s huge war commitments. There is no doubt that the present industrial and business depression is in no small measure due to the tremendous burden of taxation.

So far as I am aware, no alternative proposals to those suggested by the Premiers Conference have been made to overcome our difficulties. Even the honorable member for Fremantle (Mr. Curtin) with all his eloquence did not make one suggestion as to how Australia should meet her difficulties. I do not wish to misjudge the honorable member, but great as was his oration it failed in that respect. The only alternative to an all round reduction of expenditure, which has been suggested, is a policy of currency inflation, or, as its advocates prefer to call it, an expansion of credit. By whatever name it is called, that policy is a repudiation of existing obligations. Any proposal to pay our debts in a debased currency is repudiation of the worst kind. It is worse than straightout repudiation, because it involves every person in the community who is in receipt of fixed wages in the inevitable debacle. Referring to the proposal to issue additional currency, or to create fresh bank credits, the advisers of the Loan Council stated -

There can bo little doubt that under present conditions such a policy would destroy confidence in the currency. . . . The increase in interest rates would bo damaging to conversion operations and again impose an additional strain upon the budget. The net effect would be to increase the deficit and to require an increasing amount of new credit and currency to bc created for balancing the budgets in successive years. Under these circumstances an inflation policy would soon get out of hand and bring about a collapse of the currency.

In other words, any attempt to meet Australia’s position by tinkering with the currency is the straight road to ruin. If with united purpose we put into operation the methods agreed upon by the Premiers at the recent conference which, on the whole, are sound, we shall make a return to certain prosperity at no distant date, while the sacrifices entailed will be mucin less than Australians have in recent times readily and successfully made.

Debate (on motion by Mr. Coleman) adjourned.

House adjourned at 11.15 p.m.

Cite as: Australia, House of Representatives, Debates, 24 June 1931, viewed 6 July 2017, <http://historichansard.net/hofreps/1931/19310624_reps_12_130/>.