House of Representatives
14 July 1931

12th Parliament · 1st Session



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

page 3799

QUESTION

UNEMPLOYMENT

Mr LATHAM:
KOOYONG, VICTORIA

– Will the Minister for Home Affairs state -when the unemployment statistics for the quarter ended the 30th of June last will he made available to honorable members?

Mr BLAKELEY:
DARLING, NEW SOUTH WALES

– I shall let the honorable member have the information to-morrow.

page 3799

QUESTION

SALES TAX

Mr YATES:
ADELAIDE, SOUTH AUSTRALIA

– I have received urgent telegrams from the United Retailers Council and from the Wholesale Grocers Association of South Australia complaining of the regulation which requires that in future the sales tax shall be stated at the foot of each invoice. This departure from the practice hitherto adopted will necessitate considerable alteration of business methods and reprinting of stationery. Is the Treasurer aware of the trouble the alteration will cause?

Mr White:

– It is an improvement.

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

– The alteration will be proposed in the Sales Tax Assessment Bills. Wholesalers and manufac-. turers will be required to state the amount, of the sales tax at the foot of each invoice. The merits of the proposed change can be discussed when those measures are before the House.

page 3799

QUESTION

DISARMAMENT

Leagueof Nations Twelfth Assembly : Australian Delegation

Mr D CAMERON:
BRISBANE. QLD · NAT

– I ask the Prime Minister whether the United States of America, Russia, and other countries which are not members of the League of Nations, have been invited to attend the proposed conference on disarmament? Has the right honorable gentleman received a copy of the draft convention to be considered at that conference; if so, will ho make it available to honorable members? Will Australia he represented in the Twelfth Assembly of the League of Nations; if so, by whom?

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

– All the leading countries which are not members of the League of Nations, including Russia, have been invited to attend the disarmament conference. The draft convention will be laid on the table of the Library this afternoon or to-morrow. Australia will bo represented in the forthcoming Assembly of the League of Nations by Mr. J. R. Collins, who will beassisted by Major Fuhrman, as secretary; Mr. Olive Evatt, who will be in Europe at that time, will attend as a substitute delegate.

Mr D CAMERON:
BRISBANE. QLD · NAT

– Not the High Commissioner?

Mr SCULLIN:

– No. The newspapers have stated that Australia will not be officially represented in the next Assembly. That is not correct. But no delegates will be sent from Australia.

Mr WHITE:

– It is stated in this morning’s press that the Commonwealth Government will be represented at the Disarmament Conference of the League of Nations next February, and that the Prime Minister stated yesterday that a Minister would be selected to represent Australia. Will the right honorable gentleman confirm those statements, and tell the House which Minister has been chosen ?

Mr SCULLIN:

– When,some weeks ago, I announced to the House that a Minister would not be sent this year to the Assembly of the League of Nations at Geneva, I said that Australia would be represented early next year at what will be the most important conference ever held by the League of Nations, and yesterday I stated that it was quite probable that a Minister would be chosen to represent the Commonwealth of Australia. Beyond that, no decision has been made.

Mr LAZZARINI:
WERRIWA, NEW SOUTH WALES

– Will the Prime Minister consider the expediency of cabling the British Government that the Aus tralian Government is absolutely in favour of disarmament of all kinds, and thus save the expense of sending an Australian delegation to the conference?

Mr SCULLIN:

– I should imagine that the people of Australia and the members of this Parliament generally regard the proposed general disarmament conference as of greater significance than is apparently attached to it by the honorable member for Werriwa.

page 3800

QUESTION

LABOUR CONDITIONS IN QUEENSLAND

Mr BEASLEY:
WEST SYDNEY, NEW SOUTH WALES

– Has the attention of the Prime Minister been drawn to the fact that the Queensland Government is asking the unemployed to work for rations only? Does he think that that policy, . in conjunction with the Melbourne conference plan, will help to restore confidence in this country?

Mr SCULLIN:
ALP

– I am not aware of the circumstances to which the honorable gentleman refers, and in the absence of any definite information, I am not disposed to offer any comment.

page 3800

QUESTION

IMPERIAL PENSIONS

Mr JAMES:
HUNTER, NEW SOUTH WALES

– Last month the Treasurer informed me, in reply to a question, that Imperial pensioners resident in Australia would receive the Australian equivalent of the money payable to them in the United Kingdom. On Sunday, four of my constituents called at my home, and stated that they are not yet receiving the benefit of the exchange. When does the Government intend to carry out the Treasurer’s undertaking, and will the full payment be made retrospective to the date when exchange was unpegged ?

Mr THEODORE:
ALP

– The details of the conditions upon which such payments shall be made were settled at a conference between a representative of the British Ministry of Pensions who is at present in Australia, and the Commonwealth Treasury. Confirmation of the arrangement by the British authorities is now awaited. Advice was received last week that this confirmation would be forwarded in a few days. Immediately it is received, payments on the new basis will commence.

page 3801

QUESTION

GOVERNMENT SAVINGS BANK OFNEW SOUTH WALES

Mr HUGHES:
NORTH SYDNEY, NEW SOUTH WALES

– Is the Prime Minister yet in a position to afford the House any information regarding the reopening of the Government Savings Bank of New South Wales?

Mr SCULLIN:
ALP

– Last week I informed the honorable member that I had asked that the negotiations between the Commonwealth Bank and the Government Savings Bank of New South Wales should be expedited. I have not yet received any official communication on the subject, but have been informed by telephone that the negotiations are now complete. The conditions agreed to at the conference were referred to the Premier of New South Wales yesterday, and if agreed to by his Government will be submitted to the Commonwealth Government for confirmation.

page 3801

QUESTION

JACOB JOHNSON

Mr TULLY:
BARTON, NEW SOUTH WALES

– Has the AttorneyGeneral anything further to communicate to the House in reference to the case of Mr. Jacob Johnson?

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

– Yes. The Govern ment has decided to institute a public inquiry into certain evidence which is said to have come to light since the Jacob Johnson case was finally dealt with on appeal by the court. The inquiry will also be directed to matters arising out of a report on this matter furnished to the Acting Attorney-General during my absence in Europe, a copy of which is in my possession. The personnel of the tribunal and the terms of reference have not yet been settled, but steps will be taken to proceed with the matter forthwith.

Mr LATHAM:

– Will provision be made for the representation of any, and if so, what parties before the proposed investigating tribunal ?

Mr BRENNAN:

– I am not in a position to answer that question immediately.

Mr LATHAM:

– But it will be considered ?

Mr BRENNAN:

– Full opportunity will be given to the honorable member and other honorable members to make representation on the subject.

page 3801

QUESTION

WATERING OF INK

Mr LAZZARINI:

– On arrival at the House this afternoon, I attempted to address an envelope, but the ink which I used left practically no mark whatever. Has the Prime Minister, in the interests of economy, issued instructions to have the ink watered in such a way as to make it non-usable?

Question not answered.

page 3801

QUESTION

WINE INDUSTRY

Mr HAWKER:
WAKEFIELD, SOUTH AUSTRALIA

– Did the Minister for Trade and Customs authorize the issue to the press of a precis of the report of Messrs. Gunn and Gollin on the wine industry before the report was submitted to Parliament? Will the honorable member make available so much of that report to Parliament as may be deemed advisable, without risking the loss of revenue, before the Senate finally deals with certain legislation affecting theprotection at present afforded to the industry?

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

– A precis of the report was published, but not that portion of it dealing with revenue matters. The general principles of the report were dealt with. The full report was not published generally in the press, because of the likelihood of the revenue being affected. The Federal Viticultural Council was desirous of considering the general principles of the report, so as to make certain suggestions to the Government before any definite action was taken. I shall keep the honorable gentleman’s suggestion in mind.

page 3801

QUESTION

PRIMAGE DUTY ON COAL

Mr JAMES:

– In view of the fact that the primage duty that was placed some time ago on coal consumed in Australian waters has not had the desired effect of compelling ships trading to this country to take in bunker coal at Australian ports, will the Minister now consider imposing a prohibitive duty on coal consumed, by such ships in Australian waters?

Mr FORDE:
ALP

– That and other suggestions in regard to the tariff will be given full consideration.

page 3802

QUESTION

ROYAL COMMISSION ON BASIC WAGE

Mr LATHAM:

– How far has the Royal Commission on the Basic Wage, which was appointed in December last by this Government, proceeded with its inquiries ?

Mr SCULLIN:
ALP

– That royal commission, I believe, was proposed during my absence abroad, and the. Commonwealth Statistician, Mr. Wickens, was instructed to make the investigation.

Mr LATHAM:

– With others who were subsequently appointed ?

Mr SCULLIN:

- Mr. Wickens had a sudden illness and nothing further has been done.

page 3802

QUESTION

FINANCIAL POSITION OF AUSTRALIA

Mr MORGAN:
DARLING DOWNS, QUEENSLAND

– There is in this morning’s Canberra Times a paragraph to the effect that the financial writer of the Daily Herald has stated -

Australia has every reason to congratulate herself on the remarkable performance of reducing the London indebtedness, by £21,000,000. The Treasurer (Mr. Theodore) has every reason to take pride in that fact. All the States have now subscribed to the economy programme, which should do much to restore confidence in Europe.

Has the Treasurer anything to add to this rather extraordinary statement?

Mr THEODORE:
ALP

– I have not read the paragraph referred to, but I shall examine it, and if it needs correction or amplification, I shall inform the honorable member of that fact.

page 3802

QUESTION

DEFENCE DEPARTMENT

Dismissals

Mr JAMES:

– I ask the Minister for Defence whether it is now the policy of the Defence Department to dismiss all supervisors of rifle clubs, and to replace them with military staff officers with less service; if so, is it the intention of the department to continue that policy?

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– That is not the policy of the department. Certain adjustments have been necessary in regard to rifle clubs so as to bring them under the control of the Defence Department. I shall obtain a full report, and let the honorable member know what is being done in the matter.

page 3802

QUESTION

HOOVER OFFER

Mr MARR:
PARKES, NEW SOUTH WALES

– Has the Prime Minister any official information to give to the House with respect to the discussion that is now taking place between Germany and France and other nations, in regard to a moratorium, and the report that there has. been’ a partial failure of the negotiations? If these negotiations are unsuccessful, will that affect the position of Australia, as stated by the Prime Minister recently in this House?

Mr SCULLIN:
ALP

– Undoubtedly Australia will be affected if the proposal of President Hoover does not materialize. We are interested, of course, in the success of that proposal, but I have nothing officially to add to the statement that I previously made in this House.

page 3802

QUESTION

WIRELESS BROADCASTING

Mr ELDRIDGE:
MARTIN, NEW SOUTH WALES

asked the PostmasterGeneral, upon notice -

  1. Is it a fact that after the secretary of the Postal Department omitted from the programmes of the Sydney Broadcasting Station 2BL the Boys’ Radio Club session, the Boy Scouts’ session, and the Handyman’s session, and substituted for them talks in foreign languages, these foreign language lectures were continued for a space of two weeks only and were then omitted?
  2. Was the reason that these talks in foreign languages were discontinued because a number of listeners wrote criticizing or complaining of the change; if not, what was the reason?
  3. Is the fact of these talks being taken off after running for a fortnight only consistent with the Minister’s statement that the alteration would be desirable and beneficial ?
  4. In view of the miscalculation of the department as to the public desire for talks in foreign languages, will the Minister direct the secretary of his department to consider the advisability of restoring the Boys’ Radio Club, Boy Scouts’ and Handyman’s sessions to the programme of 2BL?
  5. Is it a fact that the introduction of talks in foreign languages was introduced in accordance with the policy of the secretary of the Postal Department” of copying everything English, apart from the inherent merits of new services?
Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– The answers to the honorable member’s questions are as follow : - 1 and 2. The re-arrangement of the 2BL programme relating to the sessions mentioned was made by the Broadcasting Company, who were of opinion that a change was needed, and the department saw no reason to disagree with that view. The company decided to introduce the talks in foreign languages in the evenings but, after about two weeks’ experience, the conclusion was reached that the majority of those interested preferred the afternoon sessions. The company did not receive any complaints from listeners regarding the matter.

  1. The company endeavours to arrange the programmes so that they may make the greatest appeal to listeners as a whole, and must obviously have latitude in determining the nature and times of their sessions. The view is still held that the displacement of the sessions referred to was desirable.
  2. The company is of opinion that there is no justification for re-introducing the sessions as conducted previously, but is contemplating the inclusion of a combined session weekly covering the activities of the more important organizations and clubs.
  3. The policy of the company and the department is to include items of interest and benefit to listeners generally, independent of whatever other broadcasting organizations may consider to be desirable or otherwise.

page 3803

QUESTION

NOTE ISSUE

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

asked the Treasurer, upon notice -

  1. Is it a fact that the promise to pay printed on the associated banknotes prior to the Commonwealth taking over the issue of notes was to pay in sterling?
  2. Did this promise allow payment to be made in silver as well as gold?
  3. Was the promise to pay in gold inaugurated by the Commonwealth issue of notes ?
  4. Has the promise been honoured during the last few years; if . not, will the Government stop issuing the misleading statement, and make the promise to pay in currency sterling, silver, wheat, or some other commodity that can be delivered?
Mr THEODORE:
ALP

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

  1. Yes.
  2. Payment could be made in silver to the extent that silver was legal tender, namely, 40 shillings.
  3. Yes.
  4. Whilst the right to receive gold in exchange for notes has not been withdrawn, authority has been given under the Commonwealth Bank Act 1929, for the Board of Directors to require persons in possession of gold to exchange the gold for notes. Therefore if a holder of notes demands gold in exchange, the bank may at once require the return of the gold. In view of these facts, no change in the promise on the note is necessary. It is considered that it would be impracticable to adopt the proposal that, payment for notes be made in silver, wheat, or some other commodity.

page 3803

QUESTION

FUNDED DEBT

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

asked the Treasurer, upon notice -

  1. Willhe give detailed information of the items of the amounts that were funded by the Commonwealth Act No. 15 of 1921?
  2. Was interest at 6 per cent, charged in respect of any item for the moneys before or after the funding?
Mr THEODORE:
ALP

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

  1. The detailed examination ‘ of claims and counter-claims between the British and Australian Governments was made in England by representatives of both Governments. The results of the examination are embodied in the agreement which forms the schedule to the act. This shows that the agreed total indebtedness was made up as follows: -

The extraction of further details of each item in the above statement would involve the listing of all expenditure by the British Government on account of Australia and of all payments by Australia on account of Great Britain.

  1. No.

page 3803

QUESTION

SUGAR AGREEMENT

Mr PRICE:
BOOTHBY, SOUTH AUSTRALIA

asked the Prime Minister, upon notice -

Will steps be taken to -amend the sugar agreement, so that the bounty which the sugar industry is enabled by the agreement to take from the pockets of the Australian consumers shall be reduced by the same rate -of 22½ per cent, as those bounties provided from Consolidated Revenue, which are reduced in accordance with the schedule of the Financial Emergency Bill?

Mr SCULLIN:
ALP

– The fullest possible consideration was given to the provisions of the sugar agreement before it was executed on behalf of the Commonwealth

Government, and the Government is satisfied that the present arrangement is the best possible in the interests of Australia generally. It is pointed out that, owing to the fall in the world price of sugar, the net return to the industry when local and export prices are averaged is lower now than it has been for a period of fourteen, years. Moreover, clause 1 k iv of the sugar agreement makes provision for the reduction in certain circumstances of the price charged to manufacturing and domestic consumers, and provision has also been made in the agreement for a 33 per cent, increase in the amount set aside annually by the sugar industry for assistance to the fruit industry.

page 3804

QUESTION

CO-ORDINATION OF TRANSPORT

Mr KEANE:
BENDIGO, VICTORIA

asked the Minister for Transport, upon notice -

Whether any steps are being taken by the Government to convene a conference of Ministers for Transport, State Railway Commissioners, and others, with a view to the co-ordination of transport on a national basis ?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The question of co-ordination of transport was referred to the recent Premiers Conference for consideration, but an opportunity to discuss the matter did not present itself. I am now communicating with the Ministers of Transport in the several States for the purpose of ascertaining their views in regard to the desirability of convening such a conference at an early date.

page 3804

QUESTION

PENSIONS DEPARTMENT

Medical Referees

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

asked the Treasurer, upon notice -

  1. How many medical referees are at present employed throughout Australia in connexion with the Pensions Department?
  2. How many have been recently dispensed with ?
  3. What proportion of the latter are returned soldiers?
  4. Will he furnish a list of the medical referees at present employed throughout Australia ?
Mr THEODORE:
ALP

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

  1. Eight hundred and ninety.
  2. Twenty-six.
  3. Eleven of the 26 are returned soldiers.
  4. The furnishing of this information would necessitate a large amount of work, and, in view of the cost of preparation, it is regretted that the particulars cannot be supplied.

page 3804

QUESTION

ARBITRATION COURT PROCEEDINGS

Mr LATHAM:

asked the AttorneyGeneral, upon notice -

How many -

1 ) industrial disputes,

applications for variation of awards,

applications for suspension or cancellation of awards,

applications for interpretations of awards, are now part heard or pending before the Commonwealth Arbitration Court?

Mr BRENNAN:
ALP

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

  1. Eighty-five.
  2. One hundred and six.
  3. One.
  4. Eleven.

page 3804

IMMIGRATION ACT

Deportationof Mr. T. Barker

Mr WHITE:

asked the Minister for

Home Affairs, upon notice -

  1. Was Thomas Barker deported from Australia in July, 1918, for being a member’ of an unlawful association ?
  2. Did the same Thomas Barker return to Australia on or about 28th November, 1930?
  3. What are the circumstances that enabled this person to overcome section 3(gg) of the Immigration Act 1901-20, which classes as a prohibited immigrant “ any person who has been deported in pursuance of any act”; or of section 3 (gd) which prohibits entry to Australia of “ any person . . . who is a member of or affiliated with any organization which entertains and teaches any of the doctrines and practices specified in this paragraph “ ?
  4. Were any parliamentary representations made to secure Barker’s re-entry to Australia; if so, by whom, and to what Minister was the case referred?
  5. Is the above Thomas Barker now manager or director of Russian Oil Products Limited, Malcolm-lane, Sydney, or any Soviet agency?
  6. Has any timber recently arrived in Australia from Russia consigned to Russian Oil Products Limited or any Soviet agency, or its employees ?
  7. Are the present whereabouts of Thomas Barker known?
  8. Should he have recently left Australia, will he be refused re-admission to Australia, if he again applies?
Mr BLAKELEY:

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

  1. Yes.
  2. Yes.
  3. Action in regard to this man’s deportation was not taken under the Immigration Act, and as the reports from London indicated thai he was advertising manager of the Russian Oil Products Limited, that he had been connected with that firm since 1927, and that he was merely paying a visit to Australia for business purposes, and, having regard, also, to the altered conditions since the time of his deportation, it was decided not to prevent him from paying his proposed visit.
  4. No representations by any member of Parliament were made to my department regarding Mr. Barker’s re-entry.
  5. It is understoood that he is a representative of the Russian Oil Products Limited, and that, as mentioned above,he has been connected with that company for some years past.
  6. Yes.
  7. No; but it is understood that he left Australia a few weeks ago on a visit to New Zealand.
  8. No.

page 3805

QUESTION

SALES TAX

Mr THEODORE:
ALP

– On the 14th May the honorable member for Oxley (Mr. Bayley) asked the following questions, upon notice: -

  1. What was the cost to Australia of the visit of the Canadian sales tax expert, Mr. Jones ?
  2. What additional expense was incurred, either by increases in staff or by increases in salaries, in the various taxation offices between the date of the operation of the act and the 30th April, 1931?
  3. What is the cost to date of stamp duties on the bonds required by the department?
  4. What is the estimate of the premiums paid to insurance companies and others for guaranteeing bonds?
  5. What is the cost to date of office space, furniture, and paper in connexion with the administration of the act?
  6. What was the amount of tax collected to 30th April, 1931 ?

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

  1. £873.
  2. £26,374 15s.1d. The major portion of this sum represents salaries paid to officers transferred to the Taxation Department from other departments. The balance was paid to taxation officers who were withdrawn from other taxation work. The introduction of the sales tax has not involved any increase in the staff of the Commonwealth Public Service.
  3. The laws of certain of the States exempt such bonds from stamp duty. It is estimated that, in the other States, stamp duties totalling £2,103 have been paid by persons required to register under the Sales Tax Assessment Acts.
  4. £15,636.
  5. £5,895 14s. 4d. Approximately one-half of this sum was expended in the purchase of accounting machines and cash registers, the use of which will result in staff economics.
  6. £2,782,386.

page 3805

PAPER

The following paper was presented: -

Customs Act and Commerce (Trade Descriptions) Act - Regulations amended - Statutory Rules 1931, No. 82.

page 3805

CUSTOMS TARIFF (CANADIAN PREFERENCE)

In Committee of Ways and Means:

Mr PARKER MOLONEY:
Minister for Markets · HUME, NEW SOUTH WALES · ALP

.- I move-

  1. That notwithstanding anything contained in the Customs Tariff 1921-1930, as proposed to be amended by Tariff proposals, from and after a time and date to be fixed by Proclamation, there be imposed on the importation into Australia of the goods specified in the Schedule hereto (being the produce ormanufacture of the Dominion of Canada), when -

    1. ) those goods have been shipped from that Dominion to Australia and have not been transhipped, or
    2. those goods, having been so shipped have been transhipped, and it is proved to the satisfaction of the Collector of Customs that the intended destination of the goods when originally shipped was Australia,

Duties of Customs as follows : -

  1. On all goods specified in the Schedule hereto in the Column headed “Tariff Item” - the duties proscribed in the column headed ‘’ Tariff on Goods the Produce or Manufacture of Canada “ ; and
  2. On all goods other than those provided for in the last preceding sub-paragraph - the rates of duty in force under the British Preferential Tariff on the dates on which the goods are respectively entered for home consumption.

    1. That the duties imposed by this resolution on the goods specified therein shall be in lieu of the duties payable upon those goods as set forth in the resolution passed by each House of the Parl iament on the second day of SeptemberOne thousand nine hundred and twenty-five, and under the Customs Tariff 1921-1930 as proposed to be amended by Tariff proposals, except in relation to goods in respect of which increased duties are provided, and which -
  3. are in transit from the Dominion of Canada to Australia on the date fixed by the Proclamation referred to in thel ast preceding paragraph ; and

    1. That the rates of duties imposed by this resolution shall be charged, collected and paid to the King for the purpose of the Commonwealth on all goods subject to those rates which are imported into Australia after the time and date fixed by the Proclamation referred to in paragraph 1. of this resolution, or which, -having been imported into Australia before that time, are not entered for home consumption until after that time.
    2. That, from and after the time and date to be fixed by the Proclamation referred to in paragraph 1. of this resolution, the provisions of the Customs Tariff (Industries Preservation) Act 1921-1922 shall not apply to goods the produce or manufacture of the Dominion of Canada to which sub-paragraphs (i) and (ii) of paragraph 1. of this resolution apply.
    3. That if at any time -
  4. His Majesty’s Government in the Commonwealth gives notice in writing to His Majesty’s Government in the Dominion of Canada that in consequence of the importation into Australia of goods, of a kind specified in the notice, being the produce or manufacture of the Dominion of Canada, the sale of similar goods produced in Australia is being prejudicially or injuriously affected, and
  5. measures, sufficient, in the opinion of His Majesty’s Government in the Commonwealth,. are not put into effect by His Majesty’s Government in the Dominion of Canada, within three months after the date of the notice, then, from a time and date to be fixed by Proclamation, goods of the kind specified in the notice shall, when imported from the Dominion of Canada, be subject to the rates of duty set out in the General Tariff.

    1. That, upon the withdrawal of any notice given in pursuance of the last preceding paragraph, goods of the kind specified in the notice shall, when imported from the Dominion of Canada after a time and date to be fixed by Proclamation, again become subject to the Tariff which would have been applicable to them ifthe notice had not been given.
    2. That for the purposes of this resolution - “ Proclamation “ means a Proclamation by the Governor-General, acting with the advice of the Federal Executive Council, published in the Gazelle ; and “ Tariff proposals “ means the proposed Duties of Customs introduced into the House of Representatives on the twenty-sixth day of March One thousand nine hundred and thirty-one, and includes any amendment of those proposals.

I have much pleasure in submitting this motion.- “We have now reached the stage at which this House is called upon to ratify what I think may be described as the first comprehensive trade agreement between the sister dominions of Canada and Australia. This agreement marks a distinct advance in inter-dominion reciprocal trade relations, and constitutes an important onward move towards the goal of economic unity within the British Commonwealth of Nations. The task of arriving at a trade agreement between the two dominions was by no means easy. Honorable members have asked from time to time that a copy of the agreement be placed before the House, but the apparent delay in submitting it was unavoidable. Although some of the details had been agreed upon, certain interests in Australia, and in Canada, had to be consulted, and this necessarily took a considerable time. A number of cablegrams had to be exchanged between the two countries, and it was not regarded by either dominion as advisable that we should proceed to ratify the agreement merely upon cabled information. It was’ necessary to have official copies of the agreement before either Parliament could be asked to ratify it. The agreement is being submitted to the Canadian House to-day simultaneously with its presentation in this chamber.

As honorable members know, a trade treaty has been in operation between Canada and Australia since 1925. Under that treaty the principal goods imported from Canada are unassembled chassis, printing paper, and canned salmon. Canada admits 23 lines of Australian goods at various rates. The preferences extended in the past to Australian produce have been of benefit to certain industries, particularly those exporting fresh beef, mutton, lamb, and dried fruits. Prior to the . 1925 treaty Australia exported to Canada 216,121 lb. of mutton and lamb, valued at £6,503; while, in 1929-30, the quantity exported amounted to 3,995,267 lb., valued at £106,999. In that year, the value of dried fruits exported to Canada, increased from £10,920 to £139,513. Prior to the 1925 treaty no butter was sent from Australia to Canada, but in 1925-26, butter to the value of £171,844 was exported. Owing, however, to the application by Canada of her dumping laws, this trade was not maintained, and the action of the Canadian authorities enabled New Zealand to capture the Canadian market. To show that this trade is very important, I need only point out that for the twelve months ended March, 1930, butter to the value of £2,894,337 was imported into Canada, of which New Zealand supplied £2,724,035 worth, and Australia only £71,578 worth. There is every reason to believe that, under the new agreement, Australia . will capture the whole of Canada’s import trade in butter.

There has not been a material increase in the total amount of trade done with Canada, the exports to’ that country in 1924’-25 being £716,953, as against £743,742 in 1929-30, while, for the latter year, Australia imported Canadian goods amounting in value to £3,502,421. In the case of a limited number of Australian primary products, such as beef, mutton, and dried fruits, the past treaty has been of considerable advantage, Owing, however, to the fact that the difference between the rates on Australian goods, and the rates under the general tariff in the Canadian customs schedule were not, generally speaking, sufficient to enable Australian products to enter Canada, and successfully compete against foreign goods, especially those of the United States of America, that treaty has not been as fruitful as was expected. For some time past, therefore, suggestions have been made on behalf of both countries for a more comprehensive agreement. Hence, it was that, while in London at the Imperial Conference, the Australian delegation took the opportunity to discuss the making of a new agreement with the responsible Canadian Ministers. Certain fundamental principles were agreed upon in London, it being tentatively arranged that there should be an. exchange of British preferences with a special schedule superimposed. It was then decided that I, as Minister for Markets, should visit Canada on my way back from the Imperial Conference, to discuss the proposal in detail. In company with the Deputy Comptroller-General of Customs, Mr. Abbott, I visited Canada, engaged in negotiations with the authorities there, and the present agreement is the result of our efforts’. An examination of the Canadian customs tariff indicated that the difference between the British preferential and the general tariff rates did not afford sufficient preference to certain Australian goods to enable them to enter the Canadian market, and successfully compete against the produce of certain foreign countries. It was believed that, to be of any benefit to Australia, rates lower than the British preferential tariff would have to be conceded by Canada on. certain goods. To demonstrate the highly beneficial nature of the agreement ultimately arrived at, it need only be mentioned that in ho case under the new agreement will the rates imposed on Australian products entering Canada exceed the British preferential tariff, while in many cases they will be substantially lower.

Mr Hughes:

– Does this apply to all Austraiian goods?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– Goods not specified in the schedule will come under the British preferential tariff. As a matter of fact, they are the only goods in which we are interested. There were certain lines on which Australia could not concede to Canada any preference whatever, especially on agricultural implements, with which Canada is the greatest competitor with Australian manufacturers in the Australian market. It was scarcely expected by Canadian manufacturers of agricultural implements that Australia could grant preference on their manufactures, especially as the largest manufacturers of these goods in Canada and Australia have now amalgamated in Australia.

At the Imperial Conference it was agreed by representatives of the Government and of the United Kingdom, and the representatives of the various units of the Empire, that each country should consider its own manufacturers and producers first, and that where the interests of two or more units conflicted, each individual unit was at liberty to take the necessary step to protect its own industries. Therefore, in these negotiations, Canada and Australia conceded each other the right to maintain such duties as would adequately protect their own domestic industries, while it was agreed that the trade between the two countries should be facilitated in regard to goods which the domestic industries could not supply. That is to say, Canada promises to buy from Australia such a proportion of primary products as she is not able to produce for herself. Canada is a large producer of butter, but does not produce sufficient for her- requirements all the year round. It was therefore agreed, after consultation with the Dairy Export Control Board in Australia, that Australia would not do anything to undersell the Canadian producer on his own market, but would endeavour to supply to Canada the butter which she needed over and above what her own producers were able to furnish.

Mr Maxwell:

– What did New Zealand say when she learned that she was to be cut out of her butter trade with Canada worth £2,000,000 a year?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– That is a matter for New Zealand to look after. I was regarding the matter from the Australian point of view, and New Zealand will no doubt regard it from hers. This was an agreement between Australia and Canada, and we could not be expected to think of others.

Mr Morgan:

– Did the Minister obtain an assurance that Canada would buy her butter from Australia?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The terms of this agreement ensure that. It might be argued that in making a reciprocal agreement there should be an equal balance of trade between the two parties, but this cannot be expected until our producers take full advantage of this agreement. Canada has certain very large lines to sell Australia, particularly lumber and motor cars, not to mention such goods as canned salmon, and print” ing paper, which aremost important items of her export trade, and of which Australia is a large purchaser. The value of these goods exceeds the the value of any goods which Australia could supply to Canada. Australia exports to Canada mainly primary products, and Canada herself produces a number of similar primary products, so that Australia can hope to supply only that proportion of Canada’s requirements which she herself cannot produce, and must necessarily import. If, however, Australia can capture that part of the Canadian market, it will be of immense benefit to Australian primary producers. The fundamental idea underlying these, negotiations is to keep trade between the two dominions concerned. The. diversion of Empire trade to foreign countries was widely discussed at the Imperial Conference. It was admitted by all concerned that the development of inter-Empire trade was vital to the well-being of the British Commonwealth of Nations. If this agreement between the two dominions enables our traders to capture business that is at present being done with foreign countries, it will be of immense benefit to our primary producers, and should have a wonderful psychological effect within the British Commonwealth of Nations.

Before dealing with the items in the schedule, I desire to refer briefly to certain of the articles in the agreement, of which numbers 3 and 4 are of the greatest importance. First let me take article 4. Under section 154 of the Australian Customs Act the cost of inland freight from the point of despatch to the port of export in tie country of export is includible in the value for duty of goods subject to ad valorem rates. Honorable members are aware that early in federation, when the “ AH Bed “ route was established between England and Australia through Canada, the Government of the day decided that only an amount equal to the cost of conveying the goods to the nearest point on the border of the United States of America should be. included in the value for duty of goods consigned from the East of Canada for shipment at Vancouver, instead of the whole of the rail freight from the east to the west coast. This concession was made to encourage the carriage of goods on British-owned railways and Britishowned steamers, and was continued until the 1st January, 1929. In 1928, certain pressure was brought to bear by representatives of the United States of America and private individuals, to have the concession granted to Canada rescinded. Unfortunately, the action taken by Australian Governments during a period of over twenty years was not strictly in accordance with the law. It was, therefore, decided to terminate this, concession and reconsider it when fresh negotiations were entered into for a revision of the existing treaty.

Canada has urged the inclusion of this provision in the new agreement, putting forward the plea that this would be a set off against the subsidy paid to the Canadian-Australian Steamship Company Limited, to which Australia does not contribute. After full ‘ consideration, the Government proposes by law to reestablish the position which existed so long, so that in future Canada and Australia will reap- the benefit, instead of the United States of America.

It will be observed from article 5 that both dominions agree not to apply the dumping provisions of their laws. This is especially welcome to Australia, inasmuch as it has been held in Canada that our primary products such as butter, dried fruits and wines, are sold for export at prices lower than those ruling in the domestic market. The application of the Canadian dumping laws to Australian butter has in the past prevented that expansion of trade which promised so well at the beginning of the 1925 agreement. Then it looked as if that agreement would be of considerable benefit to Australia, but when Canada applied the dumping laws to butter our product was shut out and that of New Zealand allowed in. Article 5 should be of great advantage to Australia as the dumping law will no longer apply to any Australian product, whereas it will apply to those from New Zealand. .

Mr Gullett:

– Can, it be said that New Zealand dumps?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– In any case, the dumping law is in operation against that country. It will be observed that the proposed rates on Australian goods in no case exceed the British preferential tariff. On all of these items Canada has agreed to, maintain the difference which will exist, when the agreement comes into force, between the rates on the Australian products, and -those on similar products from other countries. It will also be noted that it is proposed to increase the duties on certain products imported into Canada from all countries.

These proposed increases are at present being discussed by the Canadian Parliament. The existing duties are considered by the Canadian Government to be insufficient adequately to protect the Canadian industries concerned. As compensation for any increases against Australian products, Canada is extending the preference to Australia against all other countries.

The first article in the agreement refers to fresh meat, upon which the rate is at present half a cent per pound. At the time the previous treaty was made the general tariff in Canada was 3£ cents, which gave the Australian product a preference of 3 cents per pound. In recent years, the Canadian meat industry has made marked progress, and it is contended by those in it that the industry requires protection against all countries. The duty now imposed on the Australian product will be 3 cents per lb., with a British preferential tariff of 4 cents, and a general tariff of S cents, thus increasing Australia’s advantage to 5 cents over the general tariff. In the twelve months ended Maron, 1930, Australia supplied Canada with beef, mutton, and lamb to the value of £140,795, out of a total value of £222,857 imported by that country. It will therefore be seen that Australia obtained a substantial hold on the Canadian trade in these products under a preference of 3 cents, and now, with an increased preference amounting to 5 cents in our favour, this country should obtain the balance of Canada’s meat trade.

Canned meats will be admitted into Canada at 15 per cent, ad valorem as formerly, but we shall now have a preference against foreign countries of 20 per cent, instead of 12^ per cent., as hitherto. For the twelve months ended March, 1930, Canada’s imports of canned meats were valued at £186,498, of which the Argentine supplied £143,220. There is, obviously, a fairly extensive market which Australian canners should now be able to capture. Frozen rabbits for fox-feeding will be admitted free of duty instead of at 20 per cent, ad valorem. Tallow, which is now subject to a duty of 10 per cent., will be free. Imports in this commodity fluctuate, but Australia has in the past done business amounting to as much as £25,000 in one year. Eggs in the shell will be free during the months of January and February, and during the balance of the year will pay the British preferential rate of 2 cents. The general rate is 10 cents. It is chiefly during those months that Australia is interested in the Canadian egg market. Egg yolk and egg albumen will come under the British preferential rate of 5 cents per lb., instead of 10 cents less 10 per cent.

Prior to September, 1930, Australian and New Zealand butter was admitted to Canada on payment of a duty of 1 cent per lb., but a dumping duty was imposed on Australian butter, thus enabling New Zealand to completely capture the Canadian market. The Canadian dairyfarmers considered that the duties were not sufficient to protect their industry, and for some time have been pressing for increased duties against all butterexporting countries. As a result the duties were increased to 8 cents, 12 cents, and 14 cents under the British preferential, intermediate, and general tariffs respectively. New Zealand butter was thus brought under the increased duty of 8 cents, and was also subjected to the dumping duty; consequently, that dominion can do very little business with Canada. Moreover, the action recently taken by New Zealand to bring Canadian goods under its general tariff will probably result in butter from New Zealand being made liable to the Canadian general tariff of 14 cents. But for this agreement Australian butter would no doubt be subject to a duty of 8 cents. Now it will be admitted at 5 cents, with the additional advantage of being free of dumping duty. This advantage of 3 cents over the British preferential rate will, in the opinion of exporters doing an important trade with Canada, be ample to give them command of the market.

Mr Hughes:

– Is the advantage we shall enjoy equivalent to 14 cents?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– It gives us an advantage of 14s. per cwt. over the British preferential tariff, in addition to the immunity from dumping duty.

Mr Morgan:

– Is there anything to prevent New Zealand from making’ reciprocal treaty with Canada?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– Such a development does not seem likely at present; but, if it does eventuate, we can meet tlie position as it arises. Cheese will pay 1 cent per lb., while the preference against other countries, except Great Britain, ‘has been increased from 3 cents to 6 cents per lb. Imports of cheese into Canada for the twelve months ended March, 1930, totalled 2,063,898 lb., valued at £125,421. This trade is at present divided between the United States of America, the United Kingdom, and European countries.

The arrangement made in regard to hops will be very satisfactory to the growers in Tasmania. At the present time Australian hops are liable to a duty of 12 cents per lb., less 10 per cent. Under the new proposals they will pay 6 cents per lb., as against the British preferential, intermediate, and general rates of 8 cents, 16 cents, and 16 cents, respectively. The imports of hops to Canada during the year ended March, 1930, amounted to 2,802,861 lb., valued at £116,032, the exporting countries being the United Kingdom, the United States of America, Czechoslovakia, and Germany. A trial shipment which I arranged to be sent to Canada from Australia has been favorably reported upon, and good business should result; in fact, Canadian breweries have offered orders for bulk shipments of certain types of hops, and this should help us considerably to dispose of Australia’s surplus production.

In regard to rice, Australia is not able yet to supply more than its own requirements, but provision is made in the agreement for the issue of an order in council when Australia reaches the exporting stage, and can give some indication of being able to supply Canadian requirements. Upon the issue of that order rice from countries other than Australia will become liable to a duty of 25 per cent, ad valorem, whilst our rice will remain free of duty. This concession should prove a substantial inducement to the settlers on the Murrumbidgee irrigation areas.

I come now to fresh fruit. Apricots, pears, quinces, and nectarines from Australia at present pay 25 cents per 100 lb. It is proposed that our fruits shall bc admitted free of duty, whilst similar fruits from foreign countries shall pay 20 per cent, ad valorem. The total quantity of apricots, quinces, and nec tarines imported into Canada during the twelve mouths ended March, 1930, was 2,922,419 lb., valued at £30,884; and of pears, 19,199,747 lb., to the value of £208,029. All these fruits came from the United States of America. The concession we are now getting should enable our growers to build up a very lucrative trade with Canada. Fresh grapes, which are now liable to 2 cents per lb., will be free of duty. The imports into Canada during the twelve months ended March, 1930, were 26,572,605 lb., valued at £278,825, and practically all came from the United States of America. Passion fruit, which is now liable to 20 per cent, ad valorem, will be free. This fruit is practically unknown in Canada., and if transport difficulties can be overcome, good business should result.

In regard to dried fruits, prunes, which are now liable to 10 per cent, ad valorem, will be free, with a preference of 1 cent per lb. against foreign countries. The imports into Canada during the twelve months ended March. 1930, were 15,270,972 lb., valued at £265,946; all came from the United States of America. The concession duty should provide an avenue for the disposal of our surplus production, and help the returned soldiers engaged in the industry. Dried apricots, nectarines, pears, and peaches, which now pay 10 per cent., will be free, with a preference of 25 per cent, ad valorem against foreign countries. Raisins and dried currants are goods to which the preference granted in the past has been of most benefit to Australia, and the proposed further extension of it from 3 cents to 4 cents per lb., which is equivalent to £18 13s. 4d. per ton, will be of immense benefit to the dried fruits industry, and should enable our growers to capture practically the whole of the Canadian market for these fruits. Before I left Australia, I conferred with the various export control boards, and I am happy to be able to say that, in respect of dried fruits, raisins, currants, canned fruits and wines, I was able to get at least what those boards thought were necessary; in some instances, I got more than they asked for. The extent of the market that Canada offers may be gathered from the fact that in 1929-30 it imported 38,308,700 lb. of raisins, valued at £486,629, of which Australia supplied £143,508 worth, and the United States of America £314,468 worth. Of the total of £98,099 worth of currants imported into Canada in the year ended March, 1930, Australia supplied £90,992 worth. It is clear, therefore, that we have already a very firm foothold in that market. Oranges in the past have been admitted to Canada free from all countries, but a duty of 35 cents per cubic foot is now being imposed in the intermediate and general tariffs, while Australian oranges will be admitted free of duty.We shall, therefore, have a very material preference. “We are building up this trade with Canada, and the people there have a great liking for “our oranges. In the year ended March, 1930, Canada imported 2,911,551 boxes to the value of £1,873,616, mainly from the United States of America. Sample shipments of Australian oranges were sent to Canada during last year, and were favorably received. An opportunity for large business is now being given to us.

Mr Stewart:

– That concession will be of special benefit this season, in view of the glut of oranges.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– That is so. Fruit pulp, other than grape pulp, not sweetened, has been admitted free for jam and preserve making, and at½ cent, per lb. for other purposes. It will now be admitted free for all purposes. This should assist the Tasmanian berry fruit, and the Queensland crushed pineapple industries. . The imports into Canada for the year ended March, 1930, were valued at £6,867, of which Australia received £5,413.

I come now to canned fruits, regarding which an important concession has been made. At the present time Australian canned fruits pay½ cent per lb., with a preference of 2½ cents against foreign countries. On canned fruits, other than pineapples, the proposed rate is 1 cent per lb., while the British preferential, intermediate, and general tariff rates will be 2 cents, 4 cents, and 5 cents respectively. California is our greatest competitor, and this concession should now secure the Canadian market for Australia. This concession is in accordance with the wishes of the Canned Fruits

Board. The imports of canned fruits into Canada are of considerable magnitude,, and for the twelve months ended March, 1930, the following quantities were imported: -

Canned pineapple from Australia will also be admitted at 1 cent per lb., while the British preferential, intermediate, and general tariff rates will be 3 cents, 4 cents, and 5 cents respectively. This should enable Queensland to place a great part . of her surplus in the Canadian market. Canned pineapple from- the Malay States is admitted under the British preferential tariff, which will be increased from½ cent to 3 cents per lb.

Mr Hughes:

– What is the tariff on pineapples from Honolulu ?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– It would be the” general rate of 5 cents. The “ imports of canned pineapple into Canada for the twelve months ended March, 1930, were 20,520,478 lb., valued at £254,109. During that period Australia supplied no pineapples to Canada. Canada imports canned fruits of a value approximating £700,000, and, therefore, offers an extensive market for the products of this country.. A contract for- 150,000 cases of pineapples has been signed conditionally upon the ratification of this agreement.

Mr Morgan:

– We are, therefore, well to windward of America?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– Yes. That country should not now be able to compete with us in respect of dried fruits.

The next item is peanuts, and the agreement will be of advantage to us when this industry reaches the export stage.

Mr Morgan:

– Is any preference given on sugar?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– At present Australia receives preference on sugar by virtue of the Canadian and British West Indies Agreement. Canada imports 120,000 tons of sugar annually from non-British. sources, and the concession now offered by Canada to Australia will provide an additional market in which to dispose of our surplus sugar. The rate of 31.64 cents per 100 lb. reduces the duty on sugar over 98 degrees and not exceeding 99 degrees polarization. This should be of value to the Australian industry.

The next item is fruit juice. Orange, lemon, and passion fruit juices will be admitted free instead of at 22£ per1 cent, ad valorem as at present.

The duty on brandy is being reduced from $10 per proof gallon, less 10 per cent, to $8 per proof gallon.

The next article relates to wine, and this is one of the most important concessions secured from Canada. Still wines exceeding 26 per cent, proof spirit, pay 55 cents per gallon and for .each degree in excess of 26 per cent., 3 cents extra. The disposal of heavy sweet wine is one of the principal problems of the wine industry in Australia. As these wines contain 34 per cent, of spirit, the present duty thereon totals 79 cents per gallon. Under the agreement Canada offers to admit these wines at 25 cents per gallon, which is less than one-third of the present, duty.

Mr Hawker:

– That is less than our own excise.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– It. is a big concession, even greater than the Wine Board expected, and it behoves the wine industry to take every advantage of it. At present, still wines are a drug on the Australian market, there being 2,000,000 gallons available for export.

Champagne, now admissible at $9.30 per dozen bottles, will be admitted at $7.44 per dozen bottles, and smaller sizes accordingly. The rates offered by Canada are one-fifth lower than the rates charged on French wines. This is a valuable concession.

Veneers, which are now admitted at 15 per cent, will be free of duty.

Under the 1925 agreement, Australian edible gelatine pays 12£ per cent, ad valorem duty when imported into Canada. Owing, however, to changes in the Canadian tariff, Australia also is enjoying a preference of only 12 per cent., but before the agreement is put into operation, the preference will be extended to 15 per cent., which is the margin of preference desired by the Australian manufacturer. A trade with Canada of £25,000 annually has been built up in gelatine by one Australian company alone, and that company now hopes to capture the Canadian market.

Eucalyptus oil will be free of. duty, with a preference of 7% per cent.

I come now to secondary industries. With the advantage now secured of admission to Canada under the British preferential tariff, it is considered that some of our secondary industries have a. good opportunity to extend their business to that country, especially those industries utilizing our own raw products. Inquiries regarding Australian woollen piece-goods have already been made, and it is understood that certain of our weavers are prosecuting inquiries in Canada, and will undertake busin’ess there if the conditions are favorable for trade. A large section of the woollen industry has expressed the opinion that, if woollen piece-goods could secure admis-sion to Canada under the British preferential tariff there would be a great opportunity to open up an extensive trade with the country in Australian woollen manufactures. The opportunity is now at hand for our manufacturers of woollen goods. Although our secondary industries will benefit under this agreement, the main advantages which will accrue to Australia -upon the completion of this agreement will be derived by our primary producers, by the man on the land, including a large section of soldier settlers.

As the agreement was designed to be of mutual advantage to both dominions, I shall now refer briefly to that portion of it under which concessions are granted to Canada by Australia.

Canned salmon is admitted under the British preferential tariff, and it is proposed to continue this Concession, but the general tariff rate has ‘been increased from 2£d. to 4d., giving Canada a greater scope against the United States of America. Assurances have been received from the Canadian packers that there will be uo increase in price because of the increased preference, which will be used only against their foreign competitors to obtain the Australian market.

The next important item is timber. As honorable members know, lumber is one of the most important of the Canadian industries. Generally speaking, it is proposed to give Canada a preference of 2s. per hundred super, feet, except in regard to sub-item I. 1, item 291 of the customs tariff. This should be of immense benefit to Canada, and result in a transfer of considerable business from the United States of America to our sister dominion. Sub-items 291 (1), (2), and (j) of the Customs Tariff cover box shooks, and in these lines Canada is the largest competitor with Australian timber. It is not proposed to reduce the duty against Canadian timber, but to increase the duty against her foreign competitors. Newsprinting paper will be admitted under the British preferential tariff. It. will have the benefit of the reduction in duty indicated by the Minister for Trade and Customs (Mr. Forde) on Friday last, and it will be liable only to primage duty of 4 per cent.’ ad valorem. The other important item is motor chassis. The difference between the intermediate and general tariff rates on unassembled chassis has been increased from 5 per cent, to 17^ per cent. Owing to the extent of the market and other causes, the cost of production in Canada is higher than in the United States of America, and the margin of 5 per cent, was insufficient to compensate for the difference in the cost of production in the two countries, and in order that Canadian manufacturers should be in a position successfully to compete against the United States of America, the duties on chassis have been adjusted to afford that measure of protection which will, it is hoped, result in increased trade with Australia. Canadian industries will also benefit under the agreement by reason of the extension of the British preferential tariff, to many of her manufacturers. Although the items to which the agreement refers are not numerous, they involve a great deal of trade. While Canada is giving us most valuable concessions, it will be seen that the agreement is reciprocal. We are not lowering any duties; we are simply increasing the duties against foreign countries, and Canada is giving us the same preferences as those which it extends to Great Britain and in many cases better preferences.

I wish to acknowledge the great courtesy and kindness extended to me and other members of the Australian delegation by the Government and people of Canada, among whom the greatest possible goodwill exists towards Australia. I appreciate the helpful cooperation of the Prime Minister of Canada (Mr. Bennett) and the Minister of Commerce (Mr. Stevens) in overcoming the difficulties that we encountered in endeavouring to arrive at a mutually satisfactory agreement. I must also express my appreciation of the greatassistance rendered to me by Mr. E. Abbott, the Deputy Comptroller-General of Customs, and Mr. L. R. Macgregor, the Australian Trade Commissioner in Canada, both of whom worked assiduously for long hours during the negotiations. I commend the motion to the House, and I am sure that I express the general desire in hoping that the consummation of this agreement will prove to the mutual advantage of both dominions.

Progress reported.

page 3816

QUESTION

BUDGET 1931-32

In Committee of Supply: Consideration resumed from the 10th July (vide page 3746), on motion by Mr. Theodore -

That the first item in the Estimates for Additions, New Works, Buildings, &c., under Division 1 - the Department of Defence - namely, “ Naval establishments - Machinery and plant, £3,000 be agreed to.

Mr LYONS:
Wilmot

.- The budget proposals of the Government include the policy that was adopted at the conference of Commonwealth and State Ministers in Melbourne. Since tha i policy has been fully debated, I need not now discuss it at length. We, on this side, have consistently advocated the measures recommended by the conference as a first essential step towards the rehabilitation of Commonwealth finances. It has not been contended by any member on this side, nor, I hope, by any member of the committee, that this policy is all that is required to place Australia on the road to prosperity.

The proposals contained in the budget do not make pleasant reading, but they are inevitable. The people themselves must bear the burdens “which they involve, and I ask them to accept them as cheerfully as possible, and to co-operate as members of the Opposition are now doing, in an effort to make the scheme effective. What members on this side complain of is the long delay that occurred prior to its adoption. Neither the Government nor the Opposition has lacked sufficient warnings as to the seriousness of Australia’s financial position. From the Board of Directors of the Commonwealth Bank, Sir Otto Niemeyer, the economists, the financial experts, private citizens, and, particularly, journalists, we have had one warning after another, for many, months past, regarding the position into which the country is drifting. Surely the Government realized long ago the serious financial position of the Commonwealth,and if there were any doubt on that point, it has been removed by the criticism levelled at the Ministry by members of its own party. The honorable member for Bourke (Mr. Anstey) and others have pointed out that the chief argument put forward by the Government to-day in favour of its proposals is that they are inevitable. These members declare that the Government knew months ago that they were necessary. They say - “ The Government had warnings from the banks and others, and the arguments advanced in favour of them could well have been used long ago when it was decided to adopt an entirely different policy “.

Following what is known as the Melbourne Conference, held in August last, it was necessary for the Government to investigate the financial position and after consideration of the results of the first four months of the financial year, _it was apparent that the proposals would have to be revised, if the budget was to be balanced. I, as Acting Treasurer, made recommendations to the Government, and to the Labour party, under which reductions of expenditure would have been made, amounting to £3,400,000, for the financial year that has just closed. Those proposals were not adopted, but measures quite inadequate to meet the situation were accepted in their stead. At an earlier stage the then Leader of the Opposition, the honorable member for Kooyong (Mr. Latham), proposed in this chamber that the Commonwealth expenditure should be reduced by £4,000,000-. The Government, through the Prime Minister, refused to consider the proposal, because, he said, it would involve a reduction of Public Service salaries by 10 per cent., or 2s. in the £1, and this would constitute a class tax.

Mr Lewis:

– The honorable member was at that time a member of the Ministry.

Mr LYONS:

– I was, and I accepted the policy of the Government; but the honorable member knows that I did everything possible to induce cabinet and the party to institute economies.

Mr Lewis:

– The honorable member may have done so later, but not at that time.

Mr LYONS:

– I had not the same responsibility then that I had later. While the Government was not prepared to face the economies suggested at that time - and I shall accept my share of responsibility if honorable members like - we are now compelled to accept some thing much more drastic.

Mr Theodore:

– Was the country at that time ready to accept a reduction of interest rates?

Mr LYONS:

– I think it was. I maintain now, as I have always done, that had Australia shown a disposition to put her house in order, had she demonstrated to the bondholders, both here and overseas, that she was prepared to meet all her obligations, the bondholders would have been ready to meet us then, as I hope they are now. However, the proposals I submitted were rejected. I asked that the expenditure from that date to the end of the financial ‘year bo reduced by £3,400,000. This was to be done by making cuts varying from 5 per cent, to 15 per cent, in Public Service salaries, leaving unaltered the basic wage payable to married men. The average reduction was to be 8 per cent., exclusive of the cost of living allowance, and 11 per cent, including that allowance. The allowance of members of Parliament were to be reduced by 10 per cent., and the total savings on salaries would have been £800,000. The Government had previously turned down a recommendation of mine which never came before the party at all, but was submitted to Cabinet. I recommended that pensions should be dealt with in the same way as I proposed to deal with salaries. The reductions now proposed by the Government are much heavier than those I proposed at that time, which the Government refused to accept. According to the Government’s present plan, salaries are to be cut by 30 per cent., war pensions by amounts up to 20 per cent., and old-age pensions by 12½ per cent.

Mr Lazzarini:

– And the cuts will be heavier later on.

Mr LYONS:

– I hope not.

Mr Lewis:

– Even under the honorable member’s proposals there was still to be a deficit of £10,000,000.

Mr LYONS:

– It is true that we expected a deficit, but it would not have been so large as that.

Mr Lewis:

– The anticipated deficit was between £8,000.000 and £10,000,000.

Mr LYONS:

– No. At that time we expected that the deficit would be between £12,000,000 and £15,000,000, but if we were able to effect economies and obtain additional revenue to the extent of £8,000,000, the deficit would be reduced by so much. Although I asked for a saving of £4,000,000, the Government now proposes to effect a saving of £8,500,000, and still there is to be a deficit. It is evident that had my proposals been accepted the country would have been in a very much better position than it will be under the Government’s plan.

Mr Lewis:

– The honorable member is very good at blowing his own trumpet.

Mr LYONS:

– No, I am not. I recognized the seriousness of the situation, and I tried to meet it. The Government adopted a policy with which I did not agree. When I hear members of the Government ask members of the corner party opposite what alternative they have to offer when they criticize the Government’s proposals, I am reminded that they asked me precisely the same question when I opposed the Government’s policy of inflation. At that time inflation was regarded by the Government as the only possible policy; now, apparently, it should not be mentioned.

The national income has been reduced from £650,000,000 to £450,000,000, and this reduction is reflected in the budget. The estimates of revenue have not been reached, in many instances, because of the reduced national income. It was estimated that the sales tax would yield £5,000,000, but that sum has not been reached by £1,500,000. The customs revenue has also fallen far short of the estimate. On the other hand, one extraordinary thing is revealed in the budget, namely, that the return from direct taxation has exceeded the estimate by approximately £3,500,000. The Treasurer says that this is due to an unexpectedly large yield from income taxation. Honorable members would like to know something more of this matter. When I submitted the revised budget in October of last year, we expected to increase the yield from direct taxation by £1,700,000, but there was nothing to indicate that the actual return would be so great as it has been.

Mr Killen:

– This year will tell a different tale.

Mr LYONS:

– Yes. Of course.

Mr Beasley:

– Last year was a better year than this.

Mr LYONS:

– That is so. Not only are the income taxpayers earning less to-day than last year, but the tremendous effort required from them to pay. the taxation which has just been collected must have reduced their capacity to pay taxes in the future. Therefore, 1 do not like the Treasurer’s prospect of realizing his estimate of direct taxation for the coming year. I hope ho will, obtain what he has budgeted for, but I have serious doubt about it. We have always based our estimates of revenue on the data supplied to us by the experts of the department, and no better information is to be had. With the exception of this year’s return from direct taxation, our estimates have recently been far too optimistic.

Mr Beasley:

– Because the times are abnormal.

Mr LYONS:

– Because the national income has been so greatly reduced, and because there has been a steady downward trend in industry and employment.

I agree with the proposal of the Government that the exemption for income tax purposes should be reduced from £300 to £250, in respect of personal exertion. I regret that it should be necessary, but it must be done. The Auditor-General recently reminded us that, while there are 3,500,000 electors in Australia, only 264,766 persons pay federal income tax. If the burden is to be spread more equitably over the whole community, it seems essential that we should increase the number of those who pay income tax. On that ground I am prepared to support the Government’s proposal.

I am also pleased to observe that the Treasurer proposes to increase the number of exemptions under the sales tax and primage duty provisions. For a long time past an agitation has been carried on in favour of the granting of certain - exemptions, and, while I am pleased that the Government has been able to grant relief in this direction, I regret that it is necessary to increase the rate of sales tax and primage duty. The increase is necessary, because revenue must be obtained, but it is unfortunate that it has to be obtained in this way. I have never felt happy about the sales tax, and, during the brief time that I was associated with the Treasury, so many anomalies and seeming injustices were brought before me, that I hoped that it would be possible at an early stage to revise the whole incidence of this taxation. Time after time I was asked by honorable members on this side of the House whether any revision was proposed, but it was not possible to do anything, because we had to wait until the Prime Minister returned from abroad. I hope, however, that, even at this stage, the representations which have been made will be taken into consideration bythe Government, and something done to make the sales tax less irksome to industry. We are accentuating the difficulties by increasing the rate, and I am afraid that, however necessary it may be to obtain more revenue, there may be a reaction from this tax in the form of increased unemployment, which will more than outweigh any benefit which the Treasury may derive. I particularly urge the Government to review the application of these impositions with respect to books. The book trade is in a very serious position as a result of the sales tax and primage duties, and representations have been made to the Opposition in the matter, from all parts of Australia. I have here a letter from a well-known Melbourne bookseller, which reads - “ I assure you that saturation point has been reached regarding the price at which books can be sold.Recollect that in addition to primage: and sales tax, the book trade has also to carry the bank rate of exchange of a little over 30 per cent., which is a killing thing, because 05 “ per cent, of every bookseller’s stock must be imported owing to the fact that books cannot be produced economically in Australia. That is, it is very rarely indeed that sufficient copies arc sold in Australia of any one book to make it a paying proposition to print them here.”

Mr Theodore:

– I think it is an exaggeration to say that books cannot be printed in Australia ; a great many novels and other works produced overseas are reprinted in this, country.

Mr LYONS:

– Generally speaking, it must be admitted that the sales in Australia do not justify the printing of books in this country. Here is another letter on the same subject, from the Northern Tasmanian Booksellers and Newsagents Association. After referring to the report of the Tariff Board on the position of the booksellers, the letter states -

We simply cannot carry on if the cost of books is increased. Since the Tariff Board’s report exchange rates have risen to 30½ per cent., and books are now costing no less than 55 to 00 per cent, to land. Prices have certainly increased by 20 per cent., but owing to the increased prices and the depression generally sales have fallen off nearly 50 per cent. Any further increase in cost will mean a further decrease in sales, . and will undoubtedly result in the dismissal of a numher of employees.

As the majority of books imported into Tasmania are for educational purposes, any increase in price will be a further penalty on the parents, a great number of whom even at the present time find great difficulty in providing the necessary books for their children.

In New Zealand, where the exchange is only 10 per cent, the Government has recently exempted books from primage duties.

I quote those communications merely as an illustration of the effect of these impositions upon the book trade. Unfortunately, many other trades are also adversely affected by these taxes.

Mr Eldridge:

– Many works of fiction can be reprinted in Australia.

Mr LYONS:

– The scope is very limited. I suggest that the Government should treat all books in a manner similar to that iu which it proposes to deal with books supplied to public libraries, and subject them to a tax of 4 per cent.

The economies associated with the loan conversion and taxation proposals will impose heavy burdens of sacrifice on various sections of the community. However, the people must accept the position in an endeavour to improve the finances of the Commonwealth, so that still further steps may be taken to place Australia on the road to complete rehabilitation.

Unfortunately, too great a .time elapsed after it had become evident to all that some action had to be taken until ‘ the Government finally accepted the position, and agreed to adopt a policy aiming at a re-adjustment. Honorable members on .this side have accepted the position for a long time, and have always been prepared to assist the Government to carry out a policy that would help to reconstruct Australia. It was with that desire, and not in a spirit of .obstruction as some have suggested, that the Deputy Leader of the Opposition (Mr. Latham), Senator Pearce, and I attended the Melbourne conference. Surely the Opposition has given full proof of its bona fides in this regard during the past few days by the substantial help that it has given to the Government. Unfortunately the Government did not receive very much assistance from its own supporters. The Opposition even had to prevent the House lapsing for want of a quorum. Yet I want it to be understood clearly that, although honorable members on this side are prepared to help the Government in a policy with which, on general principles, they agree, our attitude must not be taken as demonstrating that we have any real confidence in the Government or in the party opposite. The Government has indulged in so many changes of policy that it is impossible for honorable members on this side to have confidence in it. For the same reason, the administration lacks the confidence of members of its own party. It lost the confidence of the workers of the country who do not belong to the Labour party when it adopted a policy of inflation, and now, because it has cast that policy overboard, it has lost the confidence of the more extreme section of the workers. So that to-day, no section of the community has any faith in tha Government.

Mr Lazzarini:

– Why does not the honorable member move a vote of confidence in the Government?

Mr LYONS:

– To-day our concern- is to set in operation a policy that will help Australia into a position of greater prosperity than it ha3 enjoyed for a long time. I think that that is also the desire of honorable members opposite. Honorable members of the Opposition would like to know whether it can depend upon the continuance of the present attitude of the Government. In his budget speech the Treasurer (Mr. Theodore) made no reference to any policy of inflation, nor did he condemn another place for its obstruction, as it was termed recently, of the Government, when it recently endeavoured to pursue that policy. There is a statement that at present the proposed rehabilitation plan is the most effective policy that could be pursued. The Government should make the issue clear so that in future we may know where we stand.

I wish it to be understood that, while honorable members on this side support the policy of attempting to balance budgets and paying our way, they have never contended that that is the only step that should be taken. No sane person would claim for a moment that that was an adequate policy for the development of the country and its industries.

Mr Lewis:

– The honorable gentleman stated a little while ago that it was.

Mr LYONS:

– The honorable member knows perfectly well that I made no such statement; it would be too silly.

Mr Lewis:

– Then the Deputy Leader of the Opposition said so.

Mr LYONS:

– The honorable gentleman would not be so foolish as to make such a statement. While we regard it as an essential step and the first to be taken, we would not be so stupid as to contend that it would get the Government out of all its difficulties. The policy that has been put forward by the Government, driven by the force of circumstances, and the necessities of the Treasury, involves increased taxation, which will not make matters better in Australia, particularly in so far as the relief of unemployment is concerned. It must he followed by another step, which will take advantage of the improvement effected, and utilize the resources of the nation so that its industries may be developed, and the problem of unemployment tackled in real earnest.

Mr Beasley:

– What does the honorable gentleman suggest?

Mr LYONS:

– That will be dealt with at the proper time. I am now dealing with the plan submitted by the Government, which has the support of myself and other honorable members of the Opposition. Australia is- in a very serious position. The budget makes one fact very evident. The Treasurer indicates that during the past financial year the debt of the Commonwealth has increasedto the extent of nearly £15,000,000, while that of the States and Commonwealth has increased by £53,000,000, of which £51,000,000 represents our short-term indebtedness, due either overseas or in Australia. That debt was incurred largely because of the accumulated deficits of the Commonwealth and the States in recent years. The Treasurer points out that for the year ended the 30th June, 1930, the Commonwealth overdraft amounted to, roughly, £30,000,000. To that amount must be added the losses incurred by the Commonwealth and the States during the intervening period. Therefore, practically the whole of that increase in the public debt is due to deficits and losses. One cause of our present financial trouble is that in the past we expended loan money too freely on works, many of which were not reproductive.

Mr Lewis:

– Is the present Government responsible for that?

Mr LYONS:

– All governments have been responsible.

Mr Lewis:

– Including the party which the honorable member is now leading.

Mr LYONS:

– No blame on that account can be laid against the Tasnianian. Government of which I was bead, because when, as Premier and Treasurer of that State, I attended the Loan Council, I was the only Treasurer to propose a reduction of loan expenditure. If I had not reduced it below the level set by my predecessor, Tasmania would not now be in its compara tively fortunate position. But I am not speaking of individual governments; all governments and all parties have been responsible for reckless expenditure, and I mention the matter only in the hope that the present experience will warn us against repeating the errors of the past, and that when we appeal to the people we shall not endeavour to bribe them with promises of expenditure of loan money which somebody else will have to repay. We must tell the people the truth, educate them to the seriousness of the position, and not attempt to take the responsibility of maintaining employment by the governmental expenditure of borrowed money. We must recognize that we cannot cure unemployment by merely borrowing money for expenditure by governments; permanent and profitable employment can be provided only in industry, and to that end we should encourage private enterprise.

Mr Beasley:

– Does the honorable member think that the expenditure of £1,000,000 on a warship is reproductive?

Mr LYONS:

– I could mention scores of instances in which money borrowed by the Commonwealth and the States has been wasted. We cannot retrieve the errors of the past, but we can resolve not to repeat them. If we were unwise in expending money on unreproductive railways, roads, and other works, how much more serious is the position when the public debt is increased by £53,000,000, almost entirely for the purpose of meeting losses incurred by the Commonwealth and the States! The seriousness of this fact should make us resolve not again to resort to the extravagant expenditure of loan money, and to recognize that farreaching though the Government’s economy proposals are, much more must be done to restore the national finances to a sound basis. In. one direction particularly there is room for further economy; I refer to the elimination of duplication in respect of rendered Commonwealth and State services. The Governments represented at the Melbourne conference set up a capable committee to investigate this matter, and I hope that when their report is presented, all governments will have the courage to tackle the problem thoroughly. There is duplication in respect of many minor matters, but the competition of Commonwealth and States in the savings bank business is a serious anomaly that calls for immediate attention. In many places we see elaborate Commonwealth and State savings bank premises almost facing each other. Both are doing the same character of business, and, although owned hy the same people, they are in active competition. When the problem of duplication is being tackled, the savings banks should receive the serious consideration of governments. However difficult the problem may be, the competition of government banks in the same field must be eliminated.

Mr Lewis:

– What government made all the appointments in connexion with the Commonwealth Bank?

Mr LYONS:

– We are concerned now not with the responsibility for such appointments, but with the correction of the errors of the past. The honorable member for Corio appears to be upset. Surely he does not find fault with members of the Opposition who are helping the Government to solve its problems, at least, as much as he is.

I was greatly pleased to hear the Government’s proposal for the amendment of theroads agreement between the Commonwealth and the States. Under the existing arrangement, instead of the States being encouraged to limit their expenditure, inducements have been offered to them to spend faster than was necessary. There was practically a premium on roads expenditure. The Treasurer has stated clearly that that must cease, that the conditions now imposed upon the States will be removed, and that they will be free agents in respect of the expenditure of the money at their disposal for road purposes. I welcome that proposal, and I hope that one result of the new arrangement will foe that the States will keep such expenditure down to the minimum.

It is very pleasing to know that the Commonwealth may hope for some relief from the Hoover plan, but I trust that the Government will not, on that account, be encouraged to relax in respect of the proposals for coping with the problems that lie immediately ahead of us.1 Any relief that comes from the Hoover plan will be only for a year, at the end of which our problems will still await solution. The Treasurer’s budget speech gave a re-assuring indication that the Government intends to proceed with the rehabilitation plan, as if President Hoover’s proposal had never been made. I commend that attitude.

I have indicated that the Opposition will assist the Government to discharge the difficult task that lies ‘ before it. Indeed, we have already proved that by our actions. The Government and the Opposition, have to co-operate to get the country out of its difficulties, for” the sake of the Australian people. That ia the keynote of the Opposition’s attitude. The budget speech contains no hint of the Government’s old inflation policy, and the concluding paragraphs of it commend themselves to us -

The Government recognizes that Australia cannot afford to let her finances drift into greater chaos while we helplessly await, during an indefinite period, for a change in world monetary policy and an increase in commodity values.

That was the policy of the Government until a few weeks ago; happily, it is so no longer -

The Government has, therefore, undertaken” a policy of internal financial rehabilitation, which, though drastic in its incidence, is, at any rate, equitable in its effects’ upon the various sections of the community. The Government is convinced that, in the existing circumstances, it is adopting the most effective policy to restore the country to economic health-

I hope that the honorable members in the ministerial corner will ponder on that- and confidently appeals to the community in general to assist patriotically the successful accomplishment of the complete plan.

I trust sincerely that that is the fixed policy of the Government - that the Government, having adopted the course indicated, will adhere to it. I cheerfully join with the Treasurer in appealing to the people to co-operate with the Government and the Opposition to make the rehabilitation plan completely successful. I repeat, however, that the steps indicated by the Treasurer represent only the first stage; other measures must be taken to provide employment for our people, revive industry, and restore general prosperity.

Mr LAZZARINI:
Werriwa

– I hope that the budget debate will not be concluded before the detailed estimates are before the committee.

Mr Theodore:

– They will be presented next week.

Mr LAZZARINI:

– One could not help but sympathize with the Leader of the Opposition, having regard to the fact that the Government has stolen his thunder. That accounts for the hesitancy of his speech; the role he has to play Ls not so easy as it otherwise would have been. I suppose that the Treasurer, the Attorney-General and other members of the Government will make whimpering complaints of personal abuse; but I intend to offer to the present budget the same uncompromising ‘ opposition that 1 have shown to past anti-Labour budgets. The only difference I see between this budget and its predecessors is that from a Labour point of view it is infinitely the worst. Many of the proposals incidental to it have been already debated, so my speech will be confined to a brief statement of the reasons for my opposition.

Those members on the ministerial aide who have subscribed to the Government’s surrender policy have told us that they put their country first - that, regardless of the political fate that may await them, they are doing what they believe to be right. So said Mr. Bruce in regard to the Arbitration Act. So said other men who supported his policy and the reduction of the basic wage. All put their country first. Even Brutus, after burying his knife in Caesar, excused himself by saying, “ Not that I loved Caesar less, but that I loved Rome more “. When one sees this hypocrisy repeated through the ages, I well understand why Dr. Johnston defined patriotism as “ the last refuge of a scoundrel “.

Mr Archdale Parkhill:

– What did he mean? I could never understand that.

Mr LAZZARINI:

– No; because the honorable member is one of the class to which he refers. In this budget, as in others, the Government surrenders every principle for which Labour stands. The policy of this Government is being applauded, not only by the Nationalist party in Australia, but also by the Conservative party and the financial press of Great Britain and Australia. I re mind the Treasurer (Mr. Theodore) of his own doctrine, to the effect that a government is slipping badly when the

Opposition applauds. A few months ago the press throughout this country were publishing particulars of his political career and criticizing his actions. Now lie is being taken into the arms of the editors, as was the Leader of the Opposition (Mr, Lyons) and other honorable members when they deserted from the Labour party. The Treasurer is now supporting an anti-Labour policy. There is in the budget no vestige of a proposal to solve the great problem of unemployment. The Prime Minister (Mr. Scullin) has repeatedly said that unemployment is a matter, not for the Commonwealth, but for the States. As past civilizations have been destroyed because of the failure to solve this all-important problem, so will this civilization, if it delays any longer the approach to the solution of this problem, come to an end. To contend that it is not the duty of the National Parliament to attempt to solve the problem of unemployment, and thus prevent our national destruction, is to confess that it is incompetent, and that this Parliament should go out of existence, and allow the State parliaments to go ahead with proposals for the rehabilitation of Australia. If the Government’s proposals are given effect, tens of thousands of our workers will join the already _ overcrowded ranks of the unemployed. The proposed reduction in the grant to the States under the Federal Aid Roads agreement will curtail work on the construction of roads, although recently the conditions of that agreement were made more liberal to enable municipalities and shires to provide additional employment. The inevitable result of these proposals will be increased unemployment. There is also to be an increase in income taxation. If the money so collected were to be used for national development, and the relief of the unemployed, thereby taking money from one section of the community to assist another, there would be little objection, but in this instance the revenue from this increased taxation will be used for the redemption of debts. Millions of pounds will be taken out of industry, thus increasing unemployment and bringing about further economic retrogression. There is to be an increase in the sales tax and in primage duties. These will, in their turu, add to the depression. The Treasurer has made a forecast of the revenue that he expects to obtain from these sources, but surely he is intelligent enough to know that this increased taxation will, apart altogether from unemployment, bring about a decreased purchasing power in the community, and a consequent lessening of consumption. These high duties will practically prohibit the purchase of certain goods, and for that reason the Treasurer’s estimates cannot bc realized. . The budget statement shows that, during the short period of Labour rule, the national debt has increased. That debt will continue to increase under these proposals, which are part and parcel of the surrender policy now pursued by this Government - a policy which Labour, since its inception, has fought strenuously. This cowardly policy will do nothing to rehabilitate this country. Rather it wi.ll increase our national indebtedness and throw additional burdens on the people of this country. The Government’s proposals, instead of adding to, will deplete our revenue, and thus increase the existing economic depression. The budget states that the results of the first quarter of the year 1930-31 showed clearly that the Estimates would not be realized. When the previous budget was brought down by the Prime Minister, we said that the Estimates would not be realized. We were told that we had no knowledge of finance. The press, in fact, said that we were stupid. But our contention of that time has been proved to be right. We now say that the present Estimates will not be realized, and that in two or three months’ time the Treasurer will introduce supplementary Estimates, because of the failure of the policy of the Government, as disclosed in this budget.

Mr Theodore:

– The honorable member is pessimistic.

Mr LAZZARINI:

– We were said to be pessimistic in the caucus room eighteen months ago, but every warning note that we then sounded has come true; every statement that we made has since been verified by the facts. It is not our polley that is now being tried; it is the policy of retrogression adopted by this Government, a policy of cowardly retreat from point to point, until the final abject surrender of the Government in swallowing its opponents’ policy, lock, stock and barrel, or as the honorable member for Adelaide (Mr. Yates) has said, hook, line and sinker. The budget states on page 3 -

During the period of rehabilitation of the finances it is not proposed to make any special provision to repay the loans raised to meet revenue deficits, but the statutory sinking fund contribution of 10s. per cunt, per annum will bc- paid. When we have returned to budgetary equilibrium it will bc decided whether the loans covering deficits will be repaid from future surpluses, or whether the annual sinking fund contribution will be substantially increased so as to extinguish the debt within a period of, say, nine or ten years.

The Treasurer, in making the budget speech started off largely with suppositions, and then attempted to build facts upon them. He has decided that at the end of a certain period, because of the operation of the Government’s policy the rehabilitation of Australia will come about. I contend, on the contrary, that at the end of this period we shall be faced with a more serious economic depression. Every proposal in this budget makes for that position. The budget states, in conclusion -

Australia and many other countries ure passing through critical times. The outstanding causes of the trouble have been beyond the control of the Government.

I deny absolutely that the outstanding causes of the depression have been beyond the control of this” Government. The budget continues -

The Government is convinced that in the existing circumstances, it is adopting the most effective policy to restore the country to economic health? and confidently appeal s to Parliament, and to the community in general, to assist patriotically the successful accomplishment of the complete plan.

This is but the whimpering plea of incompetents. It has attempted to camouflage its policy of cowardly surrender. It has appealed to the. community to assist patriotically the successful accomplishment of its plan. I hope that every patriotic person in Australia will, at the first opportunity, fight that plan and this Government to the last ditch. This policy of wholesale curtailments and retrenchments will have- a serious effect upon the community. It will bring back the conditions of the ‘nineties, and even before then. At this stage it will not be out of place for me to quote from a book entitled From out the Past glimpsed the Future, by J. H. Scullin, M.P.

Mr Archdale Parkhill:

– When did he write it?

Mr LAZZARINI:

– In 1927. It contains a reference to the wages paid in 1901, and to certain evidence given before tribunals to the effect that industry could not be carried on without the sweating of the employees. The following passages indicate the nature of the publication : -

Thu president of the Shopkeepers Association of Melbourne, in the course of his evidence before the Royal Commission on the 17th April, 1901, made this monstrous statement - “ A great deal of sweating goes on, but though it is unfortunate to the individual, I fancy it is beneficial to the nation. You cannot get the extreme benefit out of nman without, breaking some up. You cannot win a battle without killing a lot of men.”

The secretary of the Milkmens Union stated in evidence- r “ I discovered the following cases of low wages : Two men at Moonee Ponds 4s. and 5s. a week respectively; a man at Collingwood 10s. a week; a man at Abbotsford, 12s.; two men at Ascot Vale, Ss. and 9s.,- a man in Malvern, 12s. 6d. ; and so on.”

Heroes of past industrial and political battles speak to us from out the pages of history. Their sacrifices are our inspiration. Their deeds arc landmarks guiding the workers ever onward in the great march towards political, social, and economic freedom.

The Minister for Markets (Mr. Parker Moloney) read extracts from this booklet when he was engaged in the last election campaign. The present budget is the answer of a Labour government to these “ heroes- of the past “. It involves a reduction of wages and pensions. The Government is doing everything that the anti-Labour forces direct it to do, at the dictates of the financial institutions and wealthy corporations. The Government tells us that its proposals, although unpalatable, are essential to the rehabilitation of the finances. Industrially, we are to return to the wage slavery of the ‘nineties. In effect, we are told that when a man has recovered from a deadly disease, he must be inoculated with the virus of the same disease, and be sent back to the portals of death, in order to retain health. “ Hands off wages “ has always been the philosophy of Labour; but now we are assured that the antiLabour section has been in the right all the time.

We have heard a great deal lately about President Hoover. Why not take a leaf out of Hoover’s book, in making our plans for financial rehabilitation ? He has been acclaimed by the Leader of the Opposition (Mr. Lyons), because of his attitude to international affairs. Owing to his country’s strong financial position, he was the only responsible man who could have taken a lead in the present world crisis. When America was threatened, Hoover cried, “ Not a penny off wages. We must increase them, and keep our people working “. All the prerogatives of the office of the president of the United States of America were used to prevent wages from being slashed. I am not an apologist for Henry Ford - I regard him as one of the most scientific speeders-up that the world has ever produced - but he has never advocated low wages. Filene, the American magnate, in his book, The Way Out, asserts that everincreasing rates of pay, and shorter hours of labour, are required to enable a community with capitalism in existence to consume the products of labour. It is a mad policy to advocate contraction rather than expansion. There must be an expansion of credit and employment.

Mr Morgan:

– What is most required is a reduction of the costs of production.

Mr LAZZARINI:

– Those costs have been reduced so low in Germany that its people can hardly live, and that country is to-day on the brink of perhaps the greatest financial collapse in history. Surely the workers have been reduced to sufficiently ‘ low standards in Central Europe, and even in Great Britain. If the theories of the honorable member for Darling Downs (Mr. Morgan) are correct, Great Britain was more prosperous several centuries ago, when a sheep could be purchased for 6d., than it is to-day. According to the honorable member’s doctrine, when the people could buy commodities for next to nothing, they were better off than they are to-day. If a lowering of the costs of production is the solution of our present troubles, then Australia should reduce its costs below those of all other countries. But do honorable members wish to see industrial conditions in this country brought down to the level of those in India or Japan? Eactory employees in the latter country are housed in barracks. They are recruited largely from the rural areas. Children of tender years are required to work twelve hours a day in the factories. Relays of employees pass twice in every 24 hours from the barracks to the factories, and the beds are never cold. When the last great mining trouble occurred in Great Britain, the men were told that it was necessary to lower the costs of production, because their brother miners in Europe were working for wages which enabled their employers to . capture British trade. After a determined struggle, the British miners were forced to accept reduced rates of pay, and, immediately, the mineowners in other countries compelled their employees to submit to still further reductions of wages, so thatthe trade won from Great Britain might be retained.

Mr Morgan:

– Queensland is relatively the most prosperous State in the Commonwealth.

Mr LAZZARINI:

– No doubt the honorable member means from his point of view. If he could have the workers living on bread and fat, and dressed in a loin cloth, he would think that the country was even more prosperous. I have a newspaper cutting which shows just how prosperous Queensland is. It states -

Tweed Heads, Monday.

The arrival of ten families at Coolangatta, on the Queensland border, from Brisbane during the week-end marks the inauguration of the intermittent relief scheme in Queensland. These families were receiving rations in Brisbane, but under the scheme will work for a number of days, equal to the amount received in rations. The party included 31 children, who will be educated at the local State school. Lue party was accompanied by the UnderSecretary of the Department of Labour and Industry (Mr. W. H. Austin), and was met at Coolangatta by the Mayor and representatives of the council. The families are being accommodated in furnished houses, pending the construction of shacks, which they will build themselves with material supplied by the council.Each shack will contain three compartments. The council has reserved three acres of land at Kira Beach for shacks. Each worker will be allotted a piece of land for cultivation. When the shacks are built the men will recondition the main street of the town.

They want to re-condition the streets with the labour of men on the dole.

Mr Archdale Parkhill:

– Let them do a bit of work for what they get.

Mr LAZZARINI:

– That is what honorable members opppsite mean when they say they want to lower costs of production. If they could get men to work for rations, their capitalistic hearts would rejoice.

Until the Government realizes that it must obtain complete control of the finances of the Commonwealth, and issues credits against the future productivity of the nation, there can be no hope of development or prosperity. We must f ree the country from the dictation of the bankers and financial institutions, who are trading on the credit of the people. /The Government will then have in its hands an instrument by which it can assist the development of the country without having to shoulder the intolerabfe burden of interest. The policy which this Government is now espousing was not evolved by itself, nor even at the Premiers Conference; it was dictated by the associated banks. This is the same policy which was submitted by the banking institutions during the last twelve or fifteen months in the form of an ultimatum, and endorsed by the chairman of the Commonwealth Bank Board, Sir Robert Gibson. It was not put forward as a suggestion for national rehabilitation, but as an ultimatum which the Government must accept. This has been a bitter lesson, but perhaps a necessary one, to’ the Labour movement in Australia. We ‘ have learned that it is useless for Labour to organize industrially and politically, and to elect members to . Parliament, unless we are prepared to go to the root, of the matter, and compel the banking institutions to surrender to the nation, instead of the nation surrendering to them. That can be done by simple legislation passed through this Parliament.

I supported this Government as long as I could conscientiously do so. I refuse to allow this budget to go through without recording my protest. I oppose it because it is anti-Labour, and because, from the first page to the last, there is in it not a syllable of Labour policy. Time will prove that this policy will drive the country into further economic depression ; it will be the cause of more misery and more want; and instead of drying the tears of those now suffering, it will increase their sufferings a hundredfold.

Mr PATERSON:
Gippsland

.- In November last, when the Acting Treasurer, the present Leader of the Opposition, brought down bis emergency budget, which revised the budget submitted by the Prime Minister in the previous July, he estimated that, if we continued to spend on the basis of the July budget, if revenue came in as it was then coming, and if there were a revival of trade and employment increased, we might finish up with a deficit of from £8,000,000 to £10,000,000. If, however, the depression continued, and unemployment became worse, the’ deficit would possibly be from £12,000,000 to £15,000,000. The revised budget was brought down in the hope of effecting reductions in expenditure here and there, and of obtaining extra revenue by increased taxation. It was proposed to reduce expenditure by cutting £500,000 off post office expenditure, by taking £2,000,000 from the amount which had been previously provided annually for the sinking fund, and by making a 10 per cent, reduction in the allowance of members of Parliament and the salaries of the highest paid members of the Public Service. By means of these reductions and the imposition of additional taxation, it was hoped to bridge the expected gap to the extent of nearly £7,000,000. In spite of that, we have finished the year with a deficit of about £10,750,000, not including nearly £4,000,000 which the Government of New South Wales owes to the Commonwealth, and for which we as a Parliament are in no way responsible. It is certain that had the Government taken the advice tendered to it last November, this deficit of £10,750,000 would have been substantially reduced. The Government has at last done, to a considerable extent, what was recommended by honorable members of the official Opposition and of this party, eight months ago. It is unfortunate that so much time has been allowed to slip by, and that the deficit has been allowed to grow to its present alarming dimensions. The deficit of £10,750,000 is more than accounted for by a reduction of £11,400,000 in customs and excise revenue. While I recognize the impracticability of correctly forecasting receipts from customs and excise at any time, and more particularly in. a time of unparalleled depression such as that through which we are passing, I remind the Treasurer of his very caustic criticism of his predecessor, the right honorable member for Cowper (Dr. Earle Page), when the present Treasurer introduced his first budget in November, 1929. He blamed the right honorable member for Cowper for being grossly out in his estimates, both of receipts and expenditure. He accused the right honorable member of overestimating probable revenue, and of underestimating probable expenditure, to an extent which would have resulted in a deficit of £1,200,000, instead of a surplus of £300,000. When we contrast that amount, with the tremendous deficit by which we are faced with this year, we realize how little justified was the attack of the Treasurer on the right honorable member for Cowper. It is true that at that time we were not right down in the pit as wo are to-day, but we were heading for it, and were sufficiently far in to account for a drop of £1.500.000, just as easily as we can account to-day for a much larger drop. On this point, let me quote what the Treasurer had to say of the right honorable member for Cowper. Here are his exact words -

It was the duty, however, of the new Government to examine the Estimates, and revise and amend them, so far” as was necessary to disclose the true position of the Commonwealth finances. This examination revealed that in some important instances the late Government had greatly understated the expenditure requirements and over-estimated the probable revenue. The late Treasurer has grossly miscalculated both the cost of the definite commitments of the departments and services for the year, and also the probable revenue.

It is now apparent that if the actual requirements of the year had been provided for in connexion with war pensions, repatriation, other war services, old-age pensions, iron and steel products bounty, prospecting for oil and sundry other items, for all of which definite commitments had been entered into, the estimates of- expenditure should have been increased by approximately £500,000.

It is’ also apparent that the customs and excise revenues, land tax and income tax, and other receipts, would have fallen short of the estimate by at least £1,050,000. The late Treasurer would, therefore, have finished the year with % a deficit of about £1,200,000, instead of a surplus of £360,000, as promised by bini in his budget speech.

Mr Lewis:

– Hear, hear !

Mr PATERSON:

– For the edification of the honorable member for Corio (Mr. Lewis) I remind him that that statement was made by the Treasurer on the 21st November, nearly five mouths after the beginning of the financial year. Surely it must be easier, after the lapse of four or five months of a financial year, to form an accurate estimate of probable revenue and expenditure than when the budget is prepared during the first mouth of the financial year.

Mr Lewis:

– He deliberately ignored facts.

Mr PATERSON:

– I shall road a little more of that speech, for the information of the honorable member who so persistently interjects. The present Treasurer (Mr. Theodore) continued -

In addition to the inescapable commitments for which inadequate provision had been made in the budget, the late Government proposed to effect a saving of £00,000 at the expense of the maternity allowances by amending the act and altering the basis of qualification, and £140,000 at the expense of officers of the Public Service. The saving in the latter case was to be accomplished by abolishing the Public Service Arbitrator and amending the Public Service Regulations to provide for reduced allowances in respect of overtime, Sunday pay, higher duties, travelling, and other services.

He went on to show that he did not approve of anything of that kind being done, although it was proposed to effect the economies in a perfectly legitimate fashion, by means of legislation brought down in this House. Now, doubtless due to the necessities of the times, the Treasurer has gone very much further than the right honorable member for Cowper (Dr. Earle Page) proposed to go. Instead of being satisfied with a reduction of some £60,000 in the maternity allowance, the honorable gentleman has budgeted for a drop of some £250,000, and instead of a reduction of £140,000 at the expense of the public servants, which he then opposed, he has introduced legislation, which was passed through this chamber last week, which will subject Public Service officers to a reduction amounting to twelve times as much as that proposed by the right honorable member for Cowper. I bring up this matter to show how unfair was the criticism, by the Treasurer, of his predecessor. The present Treasurer went on to say -

There were also certain arbitrary reductions made in respect of the ordinary votes of departments, the anticipated savings in connexion with which would not have been realized during the year.

The honorable gentleman was not satisfied with the estimates of his predecessors with respect to departments, because they would have given the departments concerned considerable difficulty in keeping within the defined limits for that year. That is, no doubt, exactly what the then Treasurer intended. He desired to make it as close a thing as possible for the departments by keeping down their expenditure to the lowest possible point. That such a thing can be done by departments when stress of circumstances demand it is proved by the budget papers just presented by the Treasurer. Every department, with the exception of the Treasury, which exceeded its estimate by £46,000, and the Department of Markets, which exceeded its estimate by a small amount, spent substantially less than was estimated - no doubt under instructions that every economy should be exercised. I submit that if that can be done to-day, it could have been done equally well in 1929-30.. Had we begun to effect these economies earlier, Australia would not be in its present position. The right honorable member for Cowper was amply justified in cutting down the estimates of the departments wherever possible. s The item of revenue in the budget papers which surprises me most is the amount collected from income taxation, amounting to £13,604,374, which is approximately £3,500,000 above the estimate. In view of the fact that in respect of the year ended the 30th June, 1930, when the depression was beginning to make itself felt, such a considerable sum was collected above the estimate, one can remind the Treasurer of the fallibility of Treasurers’ estimates. I admit that legislation was brought down which increased the rates of taxation. That would account for some, but not all, of the increase. How ill-merited was the criticism that the present Treasurer directed against his predecessor in 1929”! As to what will be the amount of income tax collected for the year just closed, on present indications we may assume that it will be at most two-thirds of that collected for the previous year.

If the estimates of the Treasurer for the present year are borne out by results, we shall, with the help of a successful arrangement in connexion with an international war debts moratorium, get within £2,000,000 of balancing our budget for the period. That would give some cause for satisfaction, particularly in view of the statements that have been made as to the impossibility of achieving budget equilibrium within a considerable period of years. I hope that the anticipations of the honorable gentleman will be realized.

Sitting suspended from 6.12 to 8 p.m.

Mr PATERSON:

– The budget papers discloso that the Commonwealth public debt is still £59 per head of population, as it was in 1927, 1928 and 1929, and £6 lower than it was in the years 1920, 1921, 1922. But, unfortunately, the public debts of the States have increased steadily for the last twenty years, and at a rate out of proportion to the growth of population. The result is that whilst the Commonwealth owes £6 per head less than it did a decade ago, the States owe £26 a head more than they did then. Setting one against the other we find a net increase in the national debt of £20 a head in the last ten years.

The Treasurer estimates that during the present financial year the revenue from customs will be greater than it was last year, and the excise revenue will be unchanged. I do not believe that his expectations will be realized. The Government’s extreme tariff policy, the proposed increase of primage from 4 per cent, to 10 per cent., and the very high exchange rate of £30 10s. per cent, must, in their cumulative effect, be almost as prohibitive as an actual embargo. There is a point beyond which the Government cannot carry tariff protection and continue to obtain revenue, and I believe we have already passed that point. The imposition of additional primage will probably bo detrimental to the revenue, and I do not think that trhe Treasurer’s estimate of £28,600,000 from customs and excise during the current financial year will be realized.

From a revenue point of view greater benefits would result from a decrease than from an increase of duties. The Treasurer could very easily obtain an additional £40,000 by reverting to the old excise duty of 2s. 8d. per lb. on locallymade cigars. The Government has sacrificed that amount of money by reducing the excise to 3d. per lb. There is no need for that reduction, because the imported cigar is dutiable at the rate of 20s. per lb., whilst the total taxation upon the locally-made cigar including the 2s. 6d. duty on the leaf and the excise of 3d. per lb. on the manufactured article, is only 2s. 9d. If the old excise duty were reverted to, the total taxation on the local cigar would be 5s. 2d. per lb., as against 20s. for the imported article. Surely a margin of nearly 15s. per lb. is sufficient to enable the Australian industry to carry on. The £40,000 of revenue that is now being lost could be recovered without, injury to anybody.

Mr Forde:

– The honorable member is assuming that there would be no slump in the cigar-making industry.

Mr PATERSON:

– The Minister must realize the extraordinary disparity between the duty of 20s. upon imported - cigars and a total taxation of 2s. 9d. on locally-made cigars.

Mr Forde:

– My investigations show that £40,000 would not be gained to the revenue byreverting to the old excise.

Mr Gregory:

– £40,000 is being lost, and the Minister knows that.

Mr PATERSON:

– The estimate of £40,000 is authoritative, and no doubt the honorable member for Swan (Mr. Gregory) will be prepared to deal further with the matter when the excise tariff is before us.

In 1927-28, the total receipts of the Commonwealth Railways were £603,000, whilst the expenditure was £887,000. Those figures relate to the ordinary trading operations of the East-West, North and Central Australia, and Federal Capital Territory railways, and do not include new construction. For the current financial year the receipts are estimated to be £334,000 and the expenditure £956,000. I do not suggest that, railway expenses can be expected to fall in proportion to the decline of revenue, because obviously certain overhead expenses will continue regardless of the actual earnings of the enterprise. But some explanation is due from the Treasurer of the extraordinary discrepancy between an estimated decline of revenue by nearly 50 per cent, as compared with 1927-28, and an estimated increase of working expenses by £70,000.

In regard to the proposed increase of the sales tax, and the primage duty, the Treasury officials and other experts. submitted to- the Melbourne conference a report recommending that the sales tax should be increased to 6 per cent, and the primage duty to 10 per cent., Messrs. Pitt and Strutt dissented on the ground that such imposts would increase costs at a time when a reduction of costs was imperative. I agree with that view; nevertheless, because of the need of extra revenue, I have endeavoured to examine these proposals with an open mind. The two taxes have certain things in common ; both add to the cost of production, both increase prices, both provide a certain amount of revenue. There the similarity ends. The collection of a sales tax is more complicated than the collection of primage duty, but we have to face that difficulty now, and the complication would be no greater in the collection of a large amount than in the collection of a small amount. We have to ask ourselves which of the two taxes will provide the maximum amount of revenue with the minimum penalty in the form of increased prices. The sales tax is imposed upon the last wholesale transaction. After allowing for the retailer’s profit on the tax paid, it is safe to say that 70 per cent, of the added cost to the public goes into revenue. The other 30 per cent, is put into the retailer’s pocket in the form of profit on the tax paid. Therefore., the 26s. a head which the Treasurer expects to get from this tax will probably cost the public about 35s. or 36s. a head. The primage tax is imposed, not on the last wholesale transaction, but when the goods are landed. There is probably an indenter’s profit. If the duty is paid on the raw material of manufacture, it adds to the manufacturer’s cost immediately, and no doubt that increase is multiplied considerably before the finished goods are sold to the public. The wholesaler would get his profit on the additional cost, and so- would the retailer when the goods passed through his hands. It is no exaggeration to say that in respect of many commodities the primage duty will be doubled by the time the goods reach the consumer. Another factor which should not escape attention is that primage duty is imposed on the imported article only, and gives to the locally produced goods an additional protection of 10 per cent. If the manufacturer takes advantage of that, not one penny of the increased price will go into the revenue. Therefore, in respect of primage duty the increased cost to the public on imported goods would probably be twice, and even three times, as great as the revenue received, and an increase in the price of locally manufactured goods would be made possible without any benefit to the revenue. Judged by the gain to the revenue and the cost to the public, the primage duty is much worse than the sales tax.

Mr Stewart:

– Unfortunately,- the Government proposes that we shall have both.

Mr PATERSON:

– I am endeavouring to decide which is the less of the two evils, and I have come to the conclusion that the primage tax is the worse of the two, because of the facility it offers for increasing the cost to the consumers out of proportion to the gain in revenue. For that reason I shall oppose any increase in the primage duty.

I stress the need for reducing the costs of manufactured goods rather than increasing them, as would happen if the Government’s policy were adopted. Such a reduction could best be effected by revising the tariff downwards instead of ever and steadily upwards. Some time ago I quoted in the House figures showing the extent to which the prices of manufactured goods had increased since 1911, as compared with the very small increases in the prices of primary products, and at the risk of being charged with repetition, I shall repeat some of them. Taking farm products and manufactured goods at the index number of 100 in 1911, we find that in the quinquennial period, from 1925 to 1929 inclusive, the figures for these two kinds of goods ran almost neck and neck. The index numbers, as provided by the Commonwealth Statistician, are as follow: -

tt will be noticed that there are slight variations in those figures, the maximum variation being from 173 to 180. In 1930 the figure for farm products fell to 141, and that for finished products increased to 184. Taking the latest figures - those for April of this year - we find that the index number for farm products has fallen to 119, while that for manufactured goods has actually’ increased to 193. We know that the prices of some manufactured goods have fallen, and if the figures of the Statistician are correct - and we cannot doubt them - the prices of some of our secondary products must have increased enormously. Why should thi index figure increase from 174 in 1925, 192C and 1927, to 193 in April of this year, when, in every other part of the world, there has been a tremendous fall in the prices of manufactured goods? There is only one explanation. Thar, startling inequality in respect of the 1-rice of primary and manufactured goods could not exist but for the tremendous height to which the Australian tariff wall has been raised, particularly in the last eighteen months. Honorable members opposite will have difficulty in explaining in any other way the great disparity between these figures. The primary producer to-day has to part with 1.6 times as much of his goods in exchange for manufactured goods as he did in 1911, or in the five years from 1925 to 1929, inclusive, when the two sets of figures showed little variation.

Mr Lewis:

– The primary producer cannot make his industry pay.

Mr PATERSON:

– He cannot. Worl1 prices regulate the value of our primary goods, but surely we can do something to reduce the unreasonable height to which the price of manufactured goods has risen to-day. No honorable membercan justify the fact that the average price for manufactured goods is to-day 193, as compared with 174 in 192.5, 1926 and 1927. The manufactured goods in question include, I understand, a rather comprehensive list of commodities, about 80 or 90 in number; No rehabilitation of industry is possible while the present gap between the prices of these two classes of goods remains. These index figures will haveto be brought much closer together before we can hope to bring about reemployment and enable our secondary industries, at any rate, to work at full time. Before we can stimulate primary production that gap must, to a large extent, be bridged. Instead of doing something to close that gap, the Government appears deliberately to be doing all it can to keep the prices of secondary industry products as high as possible by the imposition of extraordinarily high tariffs. The Government imposed these high tariffs not only on the finished goods, but ‘also on .the machinery of production required for the factory and the farm. Surely if anything should be cheap, it is the machinery with which production is obtained. Let me give the committee one illustration to show that the Government has actually prevented the establishment of a new industry by the imposition of enormous duties on machinery of production. Recently it was proposed to establish the fishmeal industry in Australia. These are sonic of the conditions that face a new industry which it is proposed to establish, say, in one of the capital cities. The price of cement for the floors is higher than in any other part of the world. That remark also applies to the glass in the windows and the iron on the roof.

Mr Watkins:

– It does not.

Mr PATERSON:

– .Iron is being sold in Great Britain at £15 a ton f.o.b., while the price of the same commodity in Australia is £30 a ton. The man who is starting a new industry in Australia has to buy machinery. Probably, the machinery which best suits his purpose is obtainable in Great Britain or America; but because some one in this country has said that he can make a machine such as is needed, although he has never made one before, a tremendous duty is imposed on that type of machine.

The CHAIRMAN (Mr. McGrath).I remind the honorable member that the tariff does not enter into this discussion, although I shall permit him to make an incidental reference to it.

Mr PATERSON:

– The fishmeal industry, if established in Australia, would do something to solve our unemployment problem. Germany discovered the value of fishmeal as a stock food some years ago, because it contains from 60 per cent, to 70 per cent, of albuminoids. Although that country is producing a good deal of this material, it has to import some 100,000 tons of it per annum. Certain interests in New South Wales, Victoria, and South Australia wanted to share in this lucrative trade. They applied to be permitted to import free of duty certain plant, which, by the way, has never been made in Australia, but they were refused permission, on the ground that some of the plant could be made here. The engineering firm in question said that, unless it could . obtain the exact specifications, it would be unable to make the machinery. The interests that I have mentioned were unable to supply those specifications. They wanted a plant capable of producing 25 tons of fish meal a day. They knew that such a plant could be obtained in Great Britain; but, because certain manufacturers said that the plant could be made in Australia, permission was refused by the Trade and” Customs Department to import the machinery free of duty. These manufacturers have failed to make good their claim. The cost to that industry in respect of duties would have amounted to £2,2S1. The price of the machinery f.o.b. at a British port is £3,150; freight and insurance, £588; duty, 55 per cent., ad valorem, £1,906; primage duty of 10 per cent., £345; duty of 20 per cent, on cost of packing, £30; landing and delivery charges, £75; exchange, £30.10 per cent, on c.i.f. cost, £1,140; and sales tax of 6 per cent., £434. Therefore, a plant valued at £3,150 f.o.’b. would cost to land in Australia £7,668. That is the kind of encouragement which is given by this Government to a new industry which might have meant a good deal to our fishermen. I move -

That the item be reduced by £1.

I move this amendment to draw attention to the necessity for the removal of customs sur-taxes and the lowering of customs duties generally, with the object of reducing the cost of living and of production.

Mr BEASLEY:
West Sydney

– I criticize the budget first on the ground that the Government has made no attempt to provide in it any assistance for the unemployed. The budget which was introduced by the Prime Minister (Mr. Scullin) on the 9th July last year stated -

The Government lias undertaken to distribute among the States a grant of £1,000,000 to be used for the purpose of the’ immediate relief of unemployment. This is in addition to the amount of £1,000,000 provided from Commonwealth revenue for road construction purposes some mouths ago.

It also stated -

Additional funds were provided for the Postmaster-General’s Department, enabling employees who would otherwise have been dismissed to be retained, to the number of 1,720.

The Government did, in the last budget, make some provision for assisting the unfortunate unemployed; but on this occasion it has not seen fit to make any reference at all in the relief of these unfortunate people, although it is a wellestablished Labour principle that the provision of relief for those who are unemployed is an obligation of the Governments In addition, this budget contains no provision for making moneys available for road purposes as did the previous one. The Government is making no attempt to assist those who, unfortunately, need assistance, even more so now than they did twelve months ago. No one will deny that there is necessity for taking practical steps at once to relieve the unemployed. It has been argued by some members of the Government that the solution of the problem of unemployment is a matter for the State Governments; but these governments are at present unable to cope with it. All that the States are able to do,, and that in a modified form, is to provide some assistance per medium of the dole.

Mr Stewart:

– I thought that unemployment was a matter for the Minister for Trade ‘and Customs?

Mr BEASLEY:

– It is true that the Minister for Trade and Cus’toms (Mr. Forde) has, when laying various tariff schedules on the table, stated that the assistance thus being given to secondary industries would provide employment for many of our workless people. But we all know that this has not resulted, and that, instead, the position regarding unemployment has grown steadily worse almost week by week, and, without doubt, how to relieve and provide work for those who now are workless, is the big question that Australia must face to-day; in fact, it is the great world problem. “We may talk of affording relief in various ways; we may bend our energies to the bolstering p of the present banking institutions; but it must be obvious to all that, if the unemployment trouble is allowed to continue, we shall soon reach a stage at which our present form of society will be threatened, and men and women will be forced to do something on their own initiative to secure the necessaries of life.

Mr Morgan:

– What are they doing in New South Wales?

Mr BEASLEY:

– The Queensland Government, which the honorable member supports, is forcing men to work merely for the dole. That must be regarded as an indictment of our present system. I do not stand for that state of affairs, and no other member who believes in social emancipation can possibly approve of it. Any means that we can take to prevent such a practice should be used. The States have reached a point at which they are unable to cope with the present unemployment problem. So far as the control of the finances of this country is concerned, the States are but glorified municipal councils. They have no real power over the means by which employment can be provided. Therefore, I feel that the responsibility for action in the present crisis rests upon this Parliament. We should now, even at this very moment, provide means by which the situation may be relieved. In a previous budget, the Prime Minister made provision, in a small way, for the relief of the unemployed, and that action indicated that this Parliament had not lost all sympathy for the unfortunate members of the community who, through no fault of their own, have been left without work. The grant then made to the States was appreciated by all those who participated in it. It is regrettable that under the present budget, though it -is presented by a Labour Government, no. provision is made to assist this deserving section of the community.

I listened attentively to the remarks of the Deputy Leader of the Country party (Mr. Paterson). I desire to make my protest against the increased primage duty, and I say, quite frankly, that I regard the increase, from the point of view, particularly, of those whom I represent in this Parliament. My constituency is a waterfront electorate, and I believe that the waterside workers have been hit harder by the Government’s policy than any other section of workers throughout the Commonwealth.

Mr Archdale Parkhill:

– The hon.orable member has taken a long while to find that out.

Mr BEASLEY:

– I said that during the discussion on the textile duties, and. when we deal with the duties on petrol in containers, I will take further steps to demonstrate my opposition to further inroads on their employment at the present time.

Mr Archdale Parkhill:

– The honorable member was a member of the Cabinet that imposed the embargoes that have stopped imports.

Mr BEASLEY:

– I admit that, as a member of the Government, I was a party to the imposition of duties designed to build up our secondary industries, and while I realized that these duties might, in the first instance, be detrimental, in a measure, to the workers whom I particularly represent, I considered thatadditional employment would be provided in the industries that were being protected under the tariff. I believed at the time that those who lost their employment in one industrial sphere would be employed in other directions; but my expectations in that regard have not been realized. The amount of work available for the men on the waterfront to-day is very limited, and I strongly resent any action that will further penalize this unfortunate section. The increase of the primage duty will cause almost «a total cessation of imports.

The sales tax necessarily affects the masses of the people, rather than the welltodo sections. The argument used in an attempt to justify the reduction of the invalid and old-age pension was that there had been a fall in the cost of living, but the logic of that argument is destroyed by this proposal. No doubt the increased tax will be passed on to the consumers, including the old-age pensioners and those affected by the cuts in the wages of public servants. This section will be called upon to carry an additional burden. I and the members associated with me were hoping that this imposition would be lightened to some extent, and, from a Labour point of view, we were most anxious that the tax on tea should be entirely removed. But, according to the budget brought down last year by the Prime Minister, that introduced in November by the then Acting Treasurer (Mr. Lyons), and the present budget, the idea seems to be to impose further burdens upon the community, instead of easing the position, particularly to those whose incomes have been reduced by the present policy. “We must eventually reach a stage at which this policy can be no longer pursued. As the honorable member for Werriwa (Mr. Lazzarini) pointed out, if we continue to drain a pool, without putting anything into it, it must eventually become dry. We must follow some new path. A few months ago the Government agreed to pursue a new policy of monetary reform, believing that it was necessary to take a new .track. It based its opinion, no doubt, on the results of the budget of last July. Ministers considered that it had not provided the amount of revenue anticipated from the sales tax and from customs and excise duties and other impositions. Consequently, I believe, the Government decided that a new monetary policy would have to be introduced. Those who are honest in their opinions should adhere to them, whatever the consequences may be. The Government, before arriving at this opinion, had at its command all the necessary agencies for examining .the whole economic position, not only in Australia, but abroad. Therefore, when a definite decision has been reached, it is expected by the House and the country that it will be carried out. Strange to say, however, the policy determined upon by the Government of which I speak, has been seriously departed from. The position to-day, as pointed out by the Leader of the Opposition (Mr. Lyons), is that the policy which the Government bitterly opposed a few months ago has been entirely accepted by Ministers, even in a more vicious form than that in which it was proposed in October last by the Opposition.

Mr Latham:

– Those were not the words that he used.

Mr BEASLEY:

– The honorable member was not present when the reference was made, but if they were not his exact words, that is the inference to be drawn from them. I tried to get in an interjection when the honorable member was speaking. I wished to know, when the Leader of the Opposition (Mr. Lyons) presented his proposals in October, what support he had, apart from those who were present at the time when they were discussed. I think that the honorable member could tell an interesting story in regard to that matter.

Mr Lyons:

– The honorable member was there all the time;

Mr BEASLEY:

– Yes, but I was not aware of all that occurred between those who were there and those who were not. There were then many means of contact between Australia and the other side of the world, and I would like to know what ‘ was the attitude of the Ministers then in London. I know the views of those who were present, and they were entitled to their opinions, but I would like to know more about the views of those who were absent. Several honorable members of the Government fought the Leader of the Opposition, who was then Acting Treasurer, as strenuously as possible, and I make no apology for doing my best to frustrate the policy advanced by him at that time.

When the Government came into power it established a publicity branch. It considered that it was necessary, from time to time, to let its supporters, and the country generally, know what its views were regarding important matters then under discussion. It issued a number of statements, some of which trounced the present Deputy Leader of the Opposition and his policy. A number of these statements may well be placed on record. The views of the Government at that time were that the banking institutions were wholly to blame for the present financial position. Here is a statement that was made by the Treasurer -

The increased difficulty in balancing their accounts which is being experienced by the State and Commonwealth Governments is the outcome of the serious diminution of public revenues combined with an inability at the present time to raise loans on the local or overseas markets. Both these difficulties arise from circumstances over which the present Commonwealth Government has had no control. Customs revenue suffered a severe setback owing to the tremendous decline in imports. Direct taxation diminished owing to the lesser volume of internal trade, and the decreased earning power of industry due to lower prices and values. Depressed prices and diminished trade have wrought havoc with the national finances of this and many other countries. Those who are responsible for general monetary policy, especially for the disastrous contraction of credit, are answerable for the present unhappy state of tilings.

The document goes on to deal with the failure of the monetary system -

The productive capacity of the country has not been impaired. In Australia nature has not failed, but is as generous and bountiful as ever. What we are suffering from is a complete breakdown of the man-controlled mechanism of exchange. Catastrophe has come upon us from a failure of the monetary system to meet the credit and exchange needs of the community. The Australian banks, more particularly the Commonwealth Bank, cannot escape their share of responsibility in this matter so far as it affects Australia, for they blindly followed the overseas banks in pursuing a policy which forced Australian prices down in consonance with the slumped prices in overseas countries.

The rapid deflation of credit which lias taken place in Australia during the last eighteen months has brought in its train a collapse of trade, loss of commercial profits, thousands of business bankruptcies, and the creation of unemployment on a scale wholly unprecedented in the history of the country.

These calamities could have been mitigated, if not wholly avoided, if the Commonwealth Bank, with the co-operation of the private banks,, had adopted a more liberal policy. If, instead of starving the community of credit during this period of crisis, they had pursued a policy of sustaining industry until it could adjust itself gradually to the altered economic conditions, Australia could easily have weathered the storm. That this was within the power of the banks cannot seri ously be denied. The banks themselves have given a clear indication of their ability in this respect in their communications to the Commonwealth Government. In a communication from the Commonwealth Bank Board in February, the undertaking was given that, conditional upon wages, salaries, pensions, and social services being adequately reduced, the banks would provide funds to sustain industry and restore employment.

Mr Latham:

– What is the date of that bulletin?

Mr BEASLEY:

– The documents bear no dates, but this is Bulletin No. 20. The last paragraph which I have quoted is important in view of the Government’s changed policy. Dealing with wages, the bulletin states -

The Government is earnestly endeavouring to do its part in bringing about the necessary adjustments, but declines to lend itself to proposals which place the burden almost wholly upon the shoulders of the wageearners and certain sections of the primary producers. In this respect it is worthy of note that during the last twelve months the wages of the workers of Australia have been reduced through the variation or abolition of arbitration awards by an amount which exceeds £ 40,000,000 per annum.

The Government at that time sought to justify its action in refusing at all costs to accept what it believed to be an antiworkingclass policy. Here is another interesting item -

In their attempts to force upon the Government a policy of wage and pension reductions the banks have allied themselves with a party political agitation which was calculated to engender controversial bitterness, and not create an atmosphere of general public confidence.

The Government accused the banks of pursuing a policy dictated by party political considerations, and declared that it would not tolerate such a policy. Now the great surrender has taken place. At the time this bulletin was issued, the Government was obviously convinced that the policy proposed by the banks had nothing in common with Labour’s policy.

Mr Maxwell:

– Is the honorable member quoting these statements in consecutive order? x

Mr BEASLEY:

– I am trying to do so. The bulletin continues -

The banks’ frequent declarations on the subject of reductions have become the chief weapon of a certain class of critic who’ believes economic troubles can be cured only by attacking the standard of living of the workers, and by reducing old-age and war pensions.

Mr James:

– Whose statement is that?

Mr BEASLEY:

– The Treasurer’s. No doubt these opinions were influenced by the failure of the Government to balance its budget according to the estimate formed in July. It had had experience of failure to meet commitments, because of the reduced purchasing power of the people, and the increased volume of unemployment. The Government expressed its conviction that it was impossible to restore economic stability by reducing the workers’ standard of living, and by cutting down old-age and war pensions. It has now abandoned those opinions. The statement goes on -

Since the war years, the hanks themselves have drained vast sums of money from the Australian public, and from industry, by the high charge for their services. The increased charges have enabled the banks to double their declared annual profits in recent years and, in addition, to build up colossal inner reserves at the expense of the community. From these gains the banks have expended millions of pounds in building palatial premises in every large city. In the principal streets in one city alone certain of the banks have, during the last three years, erected five magnificent and costly structures.

It is not on record that the Government Bank ever passed strictures upon the Nationalist Government for its reckless finance, or threatened arbitrarily to stop that Government’s credit unless it agreed to a financial policy approved by the bank.

This proves that the Government was at that time convinced that the opposition with which it was meeting from the banks was politically inspired ; that the struggle was one between organized capital, backed up by the banks, and the great mass of the people whose opinions Labour is supposed to express in. this House. The Government was straining every nerve to defeat the banking institutions, and to bring about a change in the monetary system. Now its policy has undergone an extraordinary change; so extraordinary, indeed, that it can never be justified in the eyes of Labour. Referring to the trading banks, the bulletin stated -

Although the Commonwealth Bank Board appears in its recent actions to adopt a firm and resolute attitude in its dealings with the Governments, it has signally failed to distinguish itself by a display of similar attributes when dealing with the private trading banks. It has lately become painfully obvious that the leadership in banking policy has been indisputably assumed by the private banks.

Further proof that the Government believed that some change was necessary is contained in bulletin No. 40, which states -

Until the monetary policy is changed, and credit is made easy for those who need it to keep industry going, it is impossible for the country to balance its budgets, just as it is impossible for Australia to recover from the collapse of trade, loss of commercial profits, thousands of business bankruptcies and the creation of unemployment on a scale wholly unprecedented in the history of the country. All these calamities arise from the stringent monetary policy pursued by the banks.

No stronger language could be used to express the opinion of the Government at that time. The Treasurer sought to demonstrate that the policy proposed had been endorsed by various financial and economic experts, such as Gustav Cassell, of the Stockholm University. It would now bo possible to quote the opinion of many anti-Labour economists to the effect that the present monetary system must undergo a very drastic change. The statement goes on -

No further time should be wasted in listening to false prophets, whose resistance to efforts to gain control of the monetary system have helped to cause, intensify and prolong this most disastrous economic catastrophe.

It is time that the leading central banks agreed to end the depression by declaring their intention in future to supply the world so abundantly with the means of payment that a further fall in prices will be impossible. As long as the central banks refuse responsibility for the purchasing power of their moneyhumanity will be in the same situation as the passengers on a liner of which the captain has lost control.

Having agreed upon that policy, the Government naturally criticized the policy of its opponents, the very policy, by the way, which it has now espoused. A further bulletin outlines, and then condemns, the proposals of Mr. Lyons.

Mr Archdale Parkhill:

– Let the honorable member give some of his own opinions.

Mr BEASLEY:

– During the debate on the bills associated with the Government’s plan, honorable members had an opportunity of expressing their own opinions, but it is proper that we should now compare the Government’s attitude of a few months ago with its attitude to-day.

Mr Price:

– How many bulletins has the Government issued?

Mr BEASLEY:

– A good many; as many as 52, up to the present time. They will certainly provide very interesting arguments in the debates that are yet to come in regard to the position of the Labour movement in Australia. In this bulletin the Treasurer states -

Mr. Lyons und his followers urge that budgets should be balanced by reducing pensions and wages. The Federal Government will not agree to any cut in war, invalid and old-age pensions, which now total £20,000,000 * year, nor will it sanction any reduction in wages. It is easy to escape the heavy burden of governmental expenditure by striking a blow at old-age und returned soldier pensinners.

Now the same gentleman and his followers designate as cowards those who defend the policy then enunciated by the Government which sought to defend rights that had been acquired by the Labour movement after many years of struggle and sacrifice. The honorable’ gentleman continued -

No one deserves more from their country and, because of that, the Government is determined not to interfere with those citizens who have done so much for their country. In any case, the mere objective of balancing budgets would not be achieved by a reduction in pensions . . . Since this Government took office pensions have increased by £2,000,000 a year, due to the growth of unemployment. What a deplorable plight would be that of the pensioners if they were without the’ assistance which the Government now grants them. That assistance would undoubtedly be endangered once the Opposition attained power.

Mr Lazzarini:

– It has done so.

Mr BEASLEY:

– There is no question about that. The Opposition is master of the situation. It has beaten the Government to its knees, and forced it to accept the policy of the Opposition, holus bolus. Now honorable members opposite may sit back and smile, for they have achieved their purpose without having to bear any responsibility for it.

At the time to which I refer, the Government was very definite in its language. Is it any wonder that there are still a few on this side who are men enough to honour the promises that were made but a few months ago? They are fully justified in their attitude, for their action is based upon the very policy that was expounded by the Government. These bulletins are very numerous, and add to the weight of the arguments advanced by my colleagues and myself, but I do not intend to weary the committee by quoting further from them. I have read sufficient to prove that the Government has completely somersaulted from the position that it then took up.

I listened carefully to the speech of the Leader of the Opposition (Mr. Lyons). The honorable gentleman traversed the history of previous budgets, and dealt very fully with his own of November last. No doubt he bases his views upon subsequent happenings, following the position which existed at that time. He stated that the position has become worse and worse, and admitted that he was not satisfied that this programme was going to meet it. He proceeded to point out that this policy is not sufficient, and went so far as to say that it was essential that something else should be done. When I asked what his next step would be, the. honorable gentleman’s answer was that this was not an opportune time to discuss the matter. That is rather a strange attitude for the honorable gentleman to adopt, particularly as many people outside are looking towards this Parliament, and no doubt to ‘ the honorable member, to enunciate some policy that will straighten out matters in the future. It must be remembered that the policy now adopted by the Government is that of the honorable gentleman, and the responsibility is on him to take the next step, and instruct how the unfortunate circumstances which now face the country are to be met, because the Government is apparently relying on its opponents for a policy.

Much has been said about the proposals that President Hoover has put before the countries that were the principal belligerents in the Great War. It is possible that if those proposals are accepted, Australia will benefit by a postponement of the payment of certain overseas debt. Now, it is perfectly obvious that other nations regard the unemployed problem more seriously than does the Government of Australia. This alleged gesture on the part of the President of the United States of America towards Germany is undoubtedly designed to prevent an internal rising in Germany itself. That country is on the verge of a collapse. As I have previously stated, it is strange that the Bank of England, the Central Bank of Kev York, and the Bank of France should come to the aid of the Central Bank of Germany to the extent of £20,000,000- to pay the- police and the soldiers of that country. This is merely a repetition of the history of European countries. So long as the members of those forces are kept well fed, clothed, and satisfied, the administration of that country will be in a position to prevent the workers, who have been goaded to desperation, from effectively resisting oppression. The circumstances in Australia are admittedly different from those which obtain in continental countries. However, it is most unfair and improper that because our people accept the code of law under which we live, our Parliament should practically .force the unemployed of this country to desperate action. The responsibility is upon our parliamentary institutions to help these people by providing them with the means of subsistence. In his budget speech the Treasurer admits that nature has been most bountiful to Australia, by helping it in many ways. There is no doubt that we have abundance on the one hand, and on the other actual starvation. I regret extremely the fact that this budget does not contain one line making provision for immediate relief for those who, unfortunately, are unable to help themselves. Perhaps the Government may have an answer to my criticism. If so, let us hear it. I cast my memory back to previous budgets, and to the discussions that took place in the party room when I was a member of this Government. Then ever present in the minds of members of the Labour party was a regard for those who are so unfortunately placed. They impressed upon the Government the need to do something for these people. I think that the honorable member for Maribyrnong (Mr. Fenton) will remember that, when pressure was applied, in the absence of the Prime Minister and some of his Ministers overseas, the Government in November last agreed to make a grant of £500,000 to relieve unemployment.

Mr Fenton:

– It was not necessary to apply very much pressure.

Mr BEASLEY:

– Well, at the time the honorable member and his colleagues felt it was necessary to do something immediately to help the unemployed.

Mr Fenton:

– The honorable member is correct.

Mr BEASLEY:

– It was finally decided that, in spite of the financial stress, the claims of the unemployed warranted the special attention of the Government, and the sum that I have mentioned was made available. This budget makes no such provision. If we base our experience upon the past we may conclude that its proposals will not solve the problem; that extra taxation will merely add to the number already unemployed.

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

Mr SCULLIN:
Prime Minister · Yarra · ALP

– I propose to confine my remarks to the amendment that has been moved by the Acting Leader of the Country party (Mr. Paterson). Unquestionably, such an amendment is a censure motion. The Government accepts it as such, and proposes that no other business shall intervene until it has been disposed of. This budget has been framed to give effect to the rehabilitation plan. It would, therefore, be rather mean to attempt at this stage to defeat the Government. The plan is either good or bad. Either it has the support of the honorable member, or it has not.

Mr Paterson:

– From the outset I told the Prime Minister that I would support the plan in everything except an increase in duties.

Mr SCULLIN:

– There was no need for the honorable member to move an amendment to the budget in order to express his views upon the tariff. There will be an opportunity for that on the tariff itself. No government can accept, except as a censure motion, an amendment to reduce its budget. The Government will, therefore, continue with this amendment until it is disposed of, and it is made clear where the Government stands.

Mr Fenton:

– The right honorable gentleman surely does not propose to embark upon an all-night sitting?

Mr SCULLIN:

– It is necessary to have this matter determined, as the Government wants to proceed with the plan. This amendment, being a motion of censure, prevents the Government from proceeding with its business in either chamber. I do not know what are the intentions of the mover of the amendment. Being an ex-Minister, the honorable member must know its effect. The Government has sent to the Senate the main measures to give effect to the rehabilitation plan, and is now about to give effect to financial proposals. I suggest that this is not the time to challenge the Government. The right time to have challenged it was when the first measure of its rehabilitation plan was introduced. Of course, the honorable member has the right to please himself when he will take an action of this kind; but, if he merely desires to give expression of his opinion of our high tariff, he could have done so during the general tariff debate, and he could do so on any one of the items of the tariff schedule which yet remain to be discussed.

Mr Paterson:

– The Prime Minister will admit that I may now express an opinion on only one specific item.

Mr SCULLIN:

– The honorable member could move a motion on one item with the view of expressing his opinion on the whole schedule. The only effect of the carrying of this amendment would be to defeat the Government. The real object of the amendment is to defeat the Government by an expression of an opinion on the tariff. No government would tamely submit to having its financial proposals reduced in this way. However, we shall accept the challenge, and the debate will be continued until the amendment is disposed of.

Mr ARCHDALE PARKHILL:
Warringah

– I intend to address myself to the budget proposals, and not to the amendment of the honorable member for Gippsland (Mr. Paterson). I do not take an unfriendly view of the budget, for the simple reason that no honorable member, from the corner party opposite or elsewhere, has- so far been able to suggest any alternative to the policy which the Government has now adopted. I am not prepared to oppose proposals of this kind unless I. can make what I regard as more effective proposals, or unless some other honorable member can make them. No effective alternative to the policy of the Government has so far been proposed.

Every honorable member must admit that the steps which the Government is proposing to take are drastic and far-reaching; but when a country is facing a reduction of £200,000,000 in its national income, drastic proposals are inevitable. Unless we adopt the policy of the Government we shall be forced into the position of accepting at the end of this month, not a 20 per cent, reduction in our social services, salaries, and so on, but a payment of from 9s. to 12s. in the £1. As a matter of fact, honorable members of the corner party opposite are actually advocating a policy which will have more disastrous effects financially, and in every other way, than that which they are now opposing. It has been demonstrated, not only by honorable members of this Parliament, but by qualified persons outside, that the various Governments will be able to pay only 9s. or 12s. in the £1 at the end of this month unless these rehabilitation proposals are put into immediate effect. The Prime Minister has pointed out in several speeches, which he has delivered recently in support of this plan, that we have been living artificial lives. He has said quite truly, “though the way of sacrifice is no primrose path, it is the only path that we can take “. We are being forced to take it. He has summed up the position accurately. The Treasurer has also said “ there is no practicable alternative to the Government’s proposals for meeting the present situation “.

My main object in speaking at this moment is not so much to criticize the Government adversely, but to justify the attitude that has been adopted by the Opposition. ‘ At present, politicians are being subjected to a considerable amount of public criticism. I understand that during the Gallipoli campaign a Turkish commander interrupted his shelling of the Australian forces for the purpose of heliographing the following message : - “ God bless the soldiers, and to hell with the politicians “. The latter sentiment is being expressed at present by a considerable section of the press, and by some members of the general public. The Government may deserve this criticism, but it cannot be justly said that the Opposition deserve it. A sentiment of that kind may only fairly be expressed with discrimination. While the Opposition was being led by the honerable member for Kooyong (Mr. Latham), and since it has been led by the honorable member for Wilmot (Mr. Lyons), it has consistently criticized the Government and its policy, but always constructively. I have no desire to be captious or hypercritical in my remarks, but I am entitled to point out that the attitude which the Opposition is adopting now is in conformity with the attitude that it has adopted for many months past. After the Treasurer had brought down the last budget, the honorable member for Kooyong expressed grave doubts as to whether the estimates of revenue would be realized, and gave his opinion concerning the amounts which would be received in different directions. The Treasurer was somewhat resentful of this criticism. But I remind the honorable gentleman that he severely criticized his predecessor, Dr. Earle Page, in November, 1929, when he said that that right honorable gentleman had grossly miscalculated both thecost of maintaining our various public departments and their services, and also the probable revenue. It is true that the right honorable member for Cowper miscalculated to the extent of £1,500,000; but the present Treasurer miscalculated to the extent of £14,000,000 in his first budget, and of £10,000,000 in his second budget. If his criticism of his predecessor was justified in those circumstances, how much more justified is our criticism of him ?

The Opposition suggested in July of last year, through the honorable member for Kooyong, that a reduction of £1,000,000 should be made in the cost of our public services. If time permitted, I could quote certain remarks made by the Prime Minister in reply to that’ suggestion, but I shall content myself with observing that this Government is now proposing to make a reduction of £1,800,000 in these services. Last year the Opposition suggested that the maternity allowance should be reduced by £200,000 ; this Government is now proposing to reduce it by £230,000. Last year the Opposition suggested that the amount proposed to be made available for the payment of bounties should be reduced by £146,000 ; this Government is now proposing to reduce it by £230,000. Last year the Opposition proposed that the roads grant should be reduced by £1,500,000.; this Government is now proposing to reduce it by £600,000. Last year the Opposition urged that an amount of £1,000,000, proposed to be made available for unemployment relief should not be voted for that purpose, as it was the duty of the States to handle that problem; but the Government resisted the suggestion strenuously. Yet later in the financial year it paid over practically the whole of the £1,000,000 to South Australia to assist it to balance its budget. Last year the Government made available £150,000 for the assistance of the coalmining industry. If it had not such a tender regard for the feelings of the honorable member for Hunter (Mr. James) and the coal-miners in the Hunter district, it would remove this amount from the Estimates, for it must know that it is never likely to be expended for the purpose for which it was voted.

The honorable member for Calare (Mr. Gibbons) and some other honorable members have “said during this debate, by interjection and otherwise, that the Opposition has never suggested that there should be a reduction of interest rates. I deny that statement. In practically every speech that the honorable member for Wilmot has made since he became Leader of the Opposition he has urged that there* should be a reduction of interest. He also advocated the floating of a conversion loan on practically the same basis as that now adopted by the Government long before it was agreed to by the Government. It cannot be denied, however, that the honorable member for Wilmot, as leader of the United party, advocated the reduction of interest by a plan similar to that proposed in the Debt Conversion Bill. Since last year the Government has proposed to reduce old-age and invalid pensions by £1,825,000; war pensions by £1,300,000; and interest payments by £2,470,000; to increase income taxation by £1,500,000; the sales tax by £4,000,000, and the primage duty by another. £4,000,000.

Much criticism has been directed against Parliament and public men. in connexion with our present difficulties. We have heard murmurs throughout the land that public men should have warned the citizens that the perils we are now facing were imminent, and should have taken precautions against them. Warnings were given repeatedly, but the public would not heed them, and they were given more often by men in political life than by the leaders of industry and commerce. Indeed, commercial and business men have not shown any greater foresight in regard to their own affairs than parliamentarians have shown in the management of the public finances.

Mr Curtin:

– That applies to the banks also.

Mr ARCHDALE PARKHILL:

– I do not agree with the honorable member. The bankers did warn the community of the imminent dangers resulting from the profligate borrowing and spending by all governments, and to-day the banking section is on a sounder basis than any other branch of business or finance. No very helpful suggestions have come from people outside Parliament as to what should be done for the financial rehabilitation of the Commonwealth. The plan that is now before us emanated from parliamentary leaders, who were assisted by Treasury officials and economists; it is purely a parliamentary conception. Trade union leaders met in conference, but, as usual, merely squabbled over the possible political gains and losses. Leaders of industry have been silent; certainly no constructive suggestions have come from them. In face of a deluge of destructive criticism, Parliament itself has evolved a scheme which I believe will, if harmoniously and effectively implemented, be the turning point in the fortunes of the country, and usher in a new era of prosperity. As an instance of the destructive criticism which public men have had to endure, I mention a circular recently issued by J. B. Were & Sons, of Melbourne. It is an example of destructive criticism in . excelsis. The statements in it are misleading, the writers offer no practical alternative to what the Government is proposing, and their utterances are unpatriotic, and calculated, if heeded, to do great harm to their clients and to Australia generally.

Mr Scullin:

– It is a pernicious document.

Mr ARCHDALE PARKHILL:

– It is. Some members of that firm are said to take an interest in politics, and I can only hope that they are capable of some more constructive assistance than they have indicated in this circular.

Mr Curtin:

– The honorable member has not analysed and disposed of it.

Mr ARCHDALE PARKHILL:

– My time is limited, but as the criticism contained in the circular is purely destructive, I have given to it all the notice that it merits.

The economies which the Government has made so far are not adequate; considerable savings can still be effected in the various departments. The Estimates include an instalment of expenditure of £S7,000 for a ship to be constructed for the lighthouse branch at a total cost of £137,000. I protested on a former occasion against this expenditure. The Kyogle is still capable of at least two years of service. The Government intends to sell it for what it will realize in the market; either the vessel is still seaworthy or the Government has no objection to the lives of. others than its own employees being risked in the vessel. On this totally unnecessary lightship the Government is expending £137,000 to provide work at Cockatoo Dock for some of the Treasurer’s constituents, although a similar vessel could have been built in England and brought to Australia at a total cost of only £72,000. In these lean days, when we are obliged to reduce even pensions, we cannot afford the luxury of building a vessel locally at nearly twice the cost at which a vessel could be imported. In the Estimates are to be found many items that are equally unjustified, and I am convinced that a close scrutiny of them would disclose the possibility of saving at least another £1,000,000.

In regard to the proposed increase of taxation, drastic as it is, it seems fair and just in existing circumstances, and I can suggest no better source from which money can be raised. I know that some of the impositions will be harsh, but although regrettable, they seem to be unavoidable. I am afraid, however, that the increase in the property rates of income tax, and the rates applicable to companies will delay the economic reconstruction of the country, and I would prefer that these two increases should not be proceeded with. These taxes will transfer from industry to the Government money that would otherwise be used to employ the men who to-day are workless. The honorable member for West Sydney (Mr. Beasley) complained that the budget makes no provision for the relief of the unemployed. This is primarily a matter for the States, and the honorable member would be better engaged in protesting against the policy of his leader and mentor, the Premier of New South Wales, and in asking him to expend for the benefit of the unemployed the full amount of the tax which he is collecting from those in employment. He is collecting for unemployment relief ls. in the £1 from all in receipt of wages and salaries, but the whole of that amount is not being utilized for the purpose for which it is levied.

Mr James:

– He is providing food for the workers with the bulk of it.

Mr ARCHDALE PARKHILL:

– The amount being distributed in doles is not equal to the receipts from the unemployment relief tax. I invite the honorable member to ascertain .what Mr. Lang is doing with the balance. Meanwhile, the honorable member for West Sydney abuses the Government for not finding work for the unemployed. Apparently, the fact has escaped the notice of the honorable members in the ministerial corner that the Governments of the Commonwealth and States never, even in the peak years of prosperity, found employment for more than 15 per cent, of the workers; the other 85 per cent, had to rely upon private enterprise. The only sound and effective way of rehabilitating Australia and restoring to employment the thousands who are to-day out of work is to make private enterprise profitable. It will then absorb back into the building trades and the various industries those men whose manhood, independence, and stamina, are being undermined by the pernicious dole system.

I do not object to the reduction of the income tax exemption from £300 to £250. In the peak years of prosperity £300 was a fair limit to the exemption, but when the Government is obliged to collect additional revenue a reduction to £250 is reasonable. Wealth is more equally divided in Australia than in any other country, and it is only from the large aggregate of incomes of £500 and upwards that any large amount of revenue can be obtained. High incomes are comparatively few, and the taxation of them would produce very little revenue. I have always said that the middle classes are the backbone of the country, and now, as always, they will have to bear the main burden of sacrifice.

I have never been in favour of the sales tax. It is the most iniquitous means ever invented for extracting from the pockets of the workers their hard-earned savings. The sales tax, so far as the workers are concerned, is an invention of the devil. But still it is an accomplished fact, and we have to accept it. When one hears the honorable member for West Sydney (Mr. Beasley) objecting to this tax, one is tempted to remind him that he was a full member of the Government, drawing full Minister’s salary, when this pernicious principle of taxation was introduced, and clapped upon the backs of the workers, no doubt for all time. My objections to any increase in the customs and primage duties are just as great as those of the Country party.

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

– Nobody likes them.

Mr ARCHDALE PARKHILL:

– I agree with the honorable member. I am more in favour of lowering duties than is the Country party. That party is in favour of lowering duties on machinery and other farming requisites, but it has no compunction whatever about asking the great mass of the people to pay excessive duties on butter, maize, and almost every other necessary of life. I am opposed to the high duties on farming requisites, but I am also opposed to the Country party levying toll upon the workers of this country in respect of everything that they consume, and in that way increasing the cost of living. I have never favoured the Government’s tariff policy, and a prohibitive tariff is an obstacle to the. Government obtaining revenue. I am, therefore, not inclined to oppose the primage duty, which does not discriminate against any section of the community, and is clearly a revenueproducing tax. I am opposed to the embargoes which have been placed on certain commodities, because their only result has been the establishment of monopolies to make the wealthy more wealthy, and the poor poorer. This issue has yet to be fought. In these times, when it is essential to obtain revenue, I am not prepared to embarrass the Government in order to obtain a party advantage. Those honorable members whovoted in their own particular interests for heavy protection, should not at this stage take the opportunity for political purposes to attack the Government on the score of increased duties.

I wish now to refer to the action of the Government of New South Wales in withholding interest payments, amounting to £4,941,000, due to the Commonwealth Government. There has never been a more disgraceful administrative and legislative act than . that of the Premier of New South Wales. He has stained and tainted the annals of Australian political history. His unparalleled act of maladministration in respect of the State Savings Bank has not only caused acute misery to his own supporters, but has also increased unemployment in industry. This gigantic bluffer has no intention of carrying out the absurd and fantastic proposals that he has introduced. He invariably carries them to a point apparently to satisfy his personal vanity, which amounts almost to megalomania. He stops short of a general election, knowing that his party will be torn to shreds if it faces the electors on any of the proposals which he is advocating at present. If ever a blow was struck at the nationalization of banking it was done by this alleged champion of Labour in regard to the State Savings Bank of New South Wales.

Mr James:

– The Deputy Leader of the Opposition (Mr. Latham) broke that bank.

Mr ARCHDALE PARKHILL:

– I leave honorable members and the public generally to decide that when I have placed the facts before them. The Lang Government defaulted to the State Savings Bank to the extent of £2,206,000, that amount being made up as follows : -

Not one penny of those amounts has been repaid. In addition the State Government holds more than £7,000,000 of the bank’s deposit moneys, yet, the bank was allowed by the State Government to close its doors. Despite these facts there are, strangely enough, men in this chamber prepared to defend a repudiator like Mr. Lang. I have with me a copy of the Labor Daily of the 23rd February, and across the front page is this drivel: “ Lang repudiates repudiation : Labour abhors repudiation “. These words follow : -

The Australian labour movement would not permit for one moment, any of its leaders to be associated with a policy of repudiation. The pledge to the people from a labour man is as binding as his pledge to a bondholder.

Was there ever a greater repudiator than this bluffer, who is bestriding the political stage of New South Wales, and “ whose antics before high heaven make the angels weep “ ? No man has been more recreant to his trust, no man has brought more misery to the class that he is supposed to represent, than has the Premier of New South Wales. Yet he has put his name to these rehabilitation proposals; he has agreed to reduction in oldage pensions, reductions in the salaries of members of this Parliament, and of the public servants, reductions in soldiers’ pensions, and in the maternity allowance. He has said, for what his word is worth, that he agrees with these proposals, and it now remains for him to repudiate his word in the same way as he has repudiated every other statement that he has made during his political life. How any member in this chamber can support a person of that kind passes my comprehension.

The honorable member for West Sydney (Mr. Beasley) referred not only to unemployment, but also to the primage duty, and the way in which our heavy duties have denuded the waterfront of ships. At one time Sydney prided itself upon the number of ships entering its port, and on the fact that it ranked among the great ports of the world. Today the conditions on the waterfront have altered materially. It is only within the last two or three weeks that the honorable member has protested against the primage duty, but let me tell him that this duty is not responsible for the condition of the port of Sydney. What is responsible for that is the action taken by the Government at a time when the honorable member was a responsible Minister, in placing embargoes upon various products, arid imposing duties in many instances up to 1,000 per cent. These impositions resulted in the destruction of the maritime supremacy of the port of Sydney which the honorable member represents. He is now shedding crocodile tears only because of the misery of his constituents who are suffering so severely because of his political action. Great as are the miseries of the people, regrettable as is the taxation which is being imposed, yet in the absence of practical alternatives, I find myself in the position of having to support the Government’s proposals. We cannot overcome our difficulties by procrastination. They have to be faced manfully and honestly. By supporting the Government’s plan, we shall show the people that we are in earnest in trying to bring about the rehabilitation of Australia and the restoration of confidence in this country, both here and abroad.

Mr PROWSE:
Forrest

.- The amendment submitted by the honorable member for Gippsland (Mr. Paterson) is not intended to show opposition to the budget. The Country party is pleased that, at this late hour, the Government has recognized that Australia’s revenue is not sufficient to permit of expenditure on the same lavish scale as has been followed in past years. [Quorum formed. J The advice given to the Government in the past four or five years has shown clearly that the secondary industries are receiving greater consideration than they deserve, when their value to the community is computed, and that this has inflicted a burden upon the primary industries. When the five Australian economists reported upon the effect of the Australian tariff they pointed out that the support given to the secondary industries involved a handicap of 9 per cent, on the export industries, and, no doubt, owing to the surcharges and increased tariffs levied since that time, the burden has now increased to 12 per cent. Prom the Prime Minister (Mr. Scullin) downwards, everybody agrees that equality of sacri fice is required, and, if the sacrifice is to be general, the secondary industries cannot be spoonfed indefinitely. Since wages are being reduced, the prices of commodities must be cheapened. The policy embodied in the reasonable amendment submitted by the Country party is essential to a complete scheme for the rehabilitation of Australian finances. Why should manufacturers be sheltered with tariff surcharges which free them from all competition, while every other section of the community is suffering a reduction of income and the severest competition ?

I am not sure that the Prime Minister has acquitted himself creditably in his attitude to the amendment. He might, at least, have had the courtesy to say that the Government recognized that the revenue had been depleted by reason of the tariff, and that, therefore, the shortage of £11,000,000 in customs revenue had to be made up by the taxpayers. He might well have admitted that the manufacturers were taking advantage of the tariff to keep up the prices of their goods. He certainly should have said that the proposal embodied in the amendment was worthy of consideration. The honorable member for West Sydney (Mr. Beasley) pointed out that the tariff had not worked out as was promised by the Government. That honorable member was assured that the waterside workers who lost their employment as the result of the falling off of imports would be employed in the numerous new industries that would be built up under the tariff. Thousands of men were to be employed here, there, and everywhere, and operations in existing industries were to be greatly extended, according to the Minister for Trade and Customs (Mr. Forde) ; but unemployment has more than quadrupled since this Government came into office. Men are idle, not only on the waterfront, but throughout the country.

Even if embargoes are imposed against goods that we do not desire to import, we should at least reduce the tariff rates generally, so that there may be competition in our secondary, as well as in our primary industries. Our imports, will be determined largely by our ability to buy goods, and the exchange, in itself, affords a great deal of protection. The shortage of customs revenue is to be made up by bleeding the people white by taxation ; but the Prime Minister does not take the amendment tabled by the Country party with seriousness.

Mr Scullin:

– How seriously should I take it?

Mr PROWSE:

– For the time being, he has a majority, which enables him to brow-beat the Country party, which has assisted him in passing other legislation.

Mr Scullin:

– Has the honorable member ever known a government to cheerfully accept an amendment of its budget.

Mr PROWSE:

– The Prime Minister might have undertaken to do something to bring about equality- of sacrifice in the direction indicated by the amendment. The economists have advised that the tariff is not building up our industries to the advantage of the country. There was a time when our factories were able to sell their products abroad ; but, under present conditions, it is impossible for them to dispose of any of their goods overseas. We should concentrate on a few manufactures, such as those of our great iron and steel and woollen industries. This would employ many of our people to advantage, and enable us to sell manufactured goods abroad. The Country party believes that no plan of rehabilitation will be complete unless due consideration is given to the effects of the present fiscal policy. Although the farmers made a wonderful response to the Prime Minister’s appeal to grow more wheat, the wheat-growers are stranded while our secondary industries, which do not add ls. to the country’s revenue, are being bolstered up. I should like to know what the Prime Minister intends to do to fulfil the promises made to the effect that secondary industries should be compelled to stand on their own base, particularly in view of the fact that the farmers, who are struggling under the most adverse conditions, are providing most of the country’s revenue. I support the amendment.

Mr D CAMERON:
BRISBANE. QLD · NAT

– The main features of the budget, as they appear to me, embody the economies which this House has already agreed to, and the proposals for increased” taxation which, under ordinary circumstances, could be fully discussed when the measures providing for such increases are introduced. The Prime Minister, having accepted the amendment moved by the Deputy Leader of the Country party (Mr. Paterson), as a definite motion of want of confidence in the Government, and having intimated that the debate must continue until it is disposed of, honorable members must, of course, take this opportunity to refer to the proposed increases in primage duties and sales tax embodied in the budget.

I regret that the Minister for Defence (Mr. Chifley) is temporarily absent from the chamber as I should like to make the remarks I intend to make on our defence system in his presence. Since the present Government assumed office I have viewed with increasing concern its attitude towards the defence of this country, although I fully appreciate the difficulties with which it is confronted. With the inception of federation the national Government undertook no more important responsibility than that of the defence of the Commonwealth, the provision of means, in accordance with our man power and ability to pay, to defend this country, should the occasion ever arise. Apart from the protest which I made some time ago concerning the discontinuance of the system of compulsory training I have remained silent concerning Australia’s defence policy, because I have realized the financial difficulties which the Government had to face. But, in view of the latest drastic reduction of the defence vote, I cannot longer remain silent. I do not wish my remarks in this connexion to be taken as reflection upon the present Minister for Defence. We all recognize his ability, and personally I have held him in the highest regard ever since I have known him. The outstanding need for economy is shown by the attitude adopted by, this House towards the legislation which has been passed during the last few weeks. So far as defence is concerned, we cannot have all that we consider necessary or that which we wish; that fundamental consideration must be kept in mind in directing criticism against the Government. Defence, however, should hear only a proper and considered proportion of the inevitable cut in costs. There are many other ways in which expenditure can he more wisely curtailed ‘ or dispensed with, and to that point the National Parliament is surely expected to give its best consideration. Australia should possess a naval, military, and air force. I am glad to see that the Prime Minister has definitely stated that the Government will not entertain the suggestion of reverting to the previous method of subsidizing the British Government to secure naval protection, because, after all, for political and psychological reasons a reversion to a system of contributing to the Royal Navy is unsound. I believe that fully 90 per cent, of the Australian people are opposed to the idea. Moreover, it might place the old country in a position of great difficulty. Suppose that Great Britain were to accept a contribution of, say, £1,000,000 or £2,000,000 annually, what would she have to give in return? At her present naval strength she simply cannot assume the protection of Australia. It would not be fair to ask her to do so. Politically, I should say, that the idea of a return to the policy of subsidizing Great Britain is impracticable. From the naval point of view it has some definite disadvantages. As our first line of protection is the sea we must develop a sea spirit; but we shall never do that by subscribing to some mythical sea unit maintained elsewhere. Moreover, a navy requires bases and certain shore establishments, which will never be developed in Australia unless their growth is forced by the existence of a navy in some form. The question of divided control in time of war or of any risk that a local navy might encourage the idea of cutting the painter, whereas a subsidy might help to tar it, may be dismissed as idle discussion in view of the precedents already established. I would strongly urge the maintenance of an Australian navy; but it should be on a carefully considered basis. Such a basis, I make bold to say, we have never yet had - ours has always been variable. Small establishments for essential services should be maintained, and when economy is necessary, horizontal, and not vertical, cuts should be made, so that there may be always a cadre or permanent expandable establishment to build upon. It would. I think, be wise, if the personnel of the Australian Navy received greater encouragement. If the senior Australian officers are not considered fit to fill some of the positions now held by officers of the Royal Navy, they should never have been allowed to reach senior positions.

In regard to military defence our staffs and the cadres of all our units are, I contend, the essentials. Our permanent staff should not be depleted more than is necessary, and in this connexion I ask the Minister, when reductions are necessary, to take advantage of a section in the Defence Act which enables him to retain the services of members of the permanent staff at one-half their salaries for at least twelve months. In that way we may. possibly, avoid losing some of the members of our permanent staff. A permanent staff when once depleted cannot readily be reorganized. Small cadres of all our units - as small as you can properly make them, if you will and. must - should be maintained. In these days of financial stringency I hold the view that it would be wise to concentrate the bulk of our permanent forces - instructional staff - in, say, two of the States, and temporarily constitute them as training regiments, to which cadres of units could be brought for careful training in such numbers and for such time as funds would permit. Periodically, the members of ‘ the permanent staff might visit the unit cadres and give brief staff ride instruction. The abolition of camp training is regrettable, and has been adopted as a last resort; but the suggestion I have made in the form of training regiments may get over that particular difficulty. It would certainly ensure the careful training of a permanent staff. It would be unwise to interfere with the divisional organization. “While it may be depressing to thi? officers in- command of the various units to have such small numbers under them, it is a much sounder policy to have unit skeletons than to try to raise fresh units in the event of war. Then, again, I should like to know exactly how the stocks of ammunition stand ‘ to-day. I ask the Minister to what extent the reduction in the vote for defence has affected our ammunition stocks during the last two years. This is a most important matter, ‘because no force can be of any use without adequate equipment.

The Air Force is in much the same position as the Navy. A more fixed and clearer-sighted policy is surely desirable. While we must keep abreast of the times, we should not entertain too large ideas regarding our Air Force. There is something to be said for the proposal - although it might not be accepted in some quarters - that the Air Board should be amalgamated with the Military Board, thus doing away with duplication, and consequent added expenditure. Civil aviation should be encouraged as much as possible. I do not think that there is any finer record to be found in the annals of civil aviation throughout the world than that enjoyed by Qantas. .1 remember well the occasion, over ten years ago, when T introduced to the then Minister for Defence the two young men who started this service. One of them was the present managing director, Mr. Hudson Fysh, and the other, Mr. McGuinness, has since left the service. For years this service has been carried on with efficiency and safety. It has served a wonderful purpose in instilling faith in the people in aviation as a means of transit, and will stand as a lasting monument to the work of Mr. Hudson Fysh, the air pilots, and all engaged in the activities of Qantas. The more of such undertakings established the better, and the value of civil aviation to any country in time of war cannot be over estimated.

The defence vote for 1931-32 will be slightly more than £3,000,000. The estimate for 1929-30 was £5,146,356, and for 1930-31 £4,342,003. There was a further reduction of £30,000 in November of last year. The further reduction now proposed, amounting to £811,000, will mean a cut of over £2,000,000 in defence in the last two years.

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– The £811,000 includes the reductions which are to be made under the rehabilitation scheme.

Mr D CAMERON:
BRISBANE. QLD · NAT

– Yes, I am aware that about £400,000 of the reduction is attributable to the general rehabilitation scheme, but the Minister will agree that if we make one or two more cuts on the same scale, our whole scheme of defence will be a farce and a sham, and the people should know it. While we as a people, living a community life under more or less civilized conditions, find it necessary to protect ourselves from certain of our fellow citizens by the maintenance of a police force, the use of locks and keys, safes and strong rooms, the upkeep of our gaols, and even the lighting of our streets, surely there exists the definite obligation to make provision for our defence as a nation against the aggression of a possible enemy outside our gates.

We have read of a great meeting held in London last Saturday, under the auspices of the British League of Nations Union. The Prime Minister, Mr. Ramsay MacDonald, Mr. Baldwin, and Mr. Lloyd George were the principal speakers at this meeting, which favoured the international reduction of armaments, and the rousing of world public opinion to secure the success of the Disarmament Conference to be held in February next. Mr. Ramsay MacDonald pointed out that disarmament was essentially an international question. He declared “Alone, one nation could’ pioneer - but alone one nation could not ‘ attain.” Mr. Baldwin pointed out that Britain had already made great contributions to disarmament - a fact which many people did not realize. He also pointed out that the hope of Europe was in the League of Nations, but the league was hampered while the United States of America and other important nations remained outside. Almost simultaneously with the holding of this meeting, the President of France presided over a Cabinet meeting which reached decisions stressing the necessity for France maintaining the strongest army, navy, and air force in Europe, with the object of guaranteeing her own security, as well as forming the principal force for guaranteeing the peace of Europe.

Mr Coleman:

– France is the most bellicose nation in Europe to-day.

Mr D CAMERON:
BRISBANE. QLD · NAT

– I remember that when previous disarmament proposals were put forward, it was thought that Great Britain should take a leading part in policing the world. Apparently, however, Great Britain has already made such reductions in her armaments that France has come to the conclusion that she herself will be better fitted to undertake this work. “We in Australia have always supported the League of Nations, and we have faith in its ultimate attainment of its great objective - peace on earth and goodwill among the nations.. We sincerely trust that the February conference will prove successful. In the meantime, and until those countries of the Old World, which have not enjoyed real peace for centuries, learn to trust one another, the obligation remains on this National Parliament to be prepared to defend our island continent to the best of its ability should occasion arise. I appeal to the Minister to see to it that Defence is not called upon to shoulder more than a fair share of the economies which our position demands. There is always a tendency with governments to explore the line of least resistance when effecting reductions in expenditure. A cut in the defence vote is, for obvious reasons, generally favoured.

There are, no doubt, strong objections to the proposals to increase the sales tax, and primage duty. Such increases must result in increased costs of living and production, and, to some extent, in delaying the recovery of the nation. Are not these proposals, however, part and parcel of the agreement reached at the Premiers Conference in Melbourne? I have for a long time held the opinion that one of the most feasible and businesslike ways of bridging the gulf between receipts and expenditure after the agreed upon economies have been made, would be by lifting what virtually amounts to an embargo on the importation of certain articles. This should be done at the earliest possible moment. By its prohibition policy the Government has suffered a loss of many millions of pounds in revenue. A re-adjustment of the tariff which would bring in considerable revenue could fairly be made without putting one man out of employment, or inflicting hardship on one manufacturer. The men on the land have suffered most from the higher duties. All over Australia they are crying out for relief, and as an incentive to employment these increased duties have been a tragic failure. They have not succeeded in their ostensible purpose, and have not tended to overcome the great problem of unemployment.

Mr LATHAM:
Kooyong

.- The United party which sits on this side of the chamber became aware of the amendment of the Deputy Leader of the Country party (Mr. Paterson) only when that honorable gentleman made his speech. The Government has accepted the amendment as a motion of want of confidence.

In considering an amendment of this character it is necessary to pay attention not only to the actual words used, but also to the practical effect of its being carried by the committee. In the present case, the effect would be to put the Government out of office. The Opposition is willing and anxious, on many grounds that I do not intend now either to state or examine, to put the Government out of office; but the present is an exceptional period in the history of our nation, and this Parliament is engaged in the consideration of a plan to meet a national emergency. Those members of the Opposition for whom I speak are substantially pledged to assist the Government in putting into effect, at as early a date as possible, the substance of the plan that was agreed upon at the Premiers Conference in Melbourne.

Mr Stewart:

– What will happen to the Government when the plan is in operation ?

Mr LATHAM:

– I hope that the Government will then be put out. The plan- as I have already said on behalf of the Opposition, and as the Leader of the Opposition (Mr. Lyons) said this afternoon - we regard as constituting only a first step. Other steps must be taken separately. The plan depends upon prompt action for any chance of success. I emphasize the necessity for promptitude of action by both the Commonwealth and the States. It may be a Bad fact, but we feel that we must recognize it, that the result of destroying the Government now would be to wreck the plan as a whole, with what we believe would be disastrous results to the people of Australia generally. To support what would have that effect, even though many of us might be . prepared to accept, in a considerable measure, the actual words of the amendment, would be to run the risk of national chaos and confusion, and would be taking what I regard as a rather unfair advantage of the difficult position in which the Government finds itself at the present time.

The tariff can be dealt with separately, as can also the proposal to increase the primage duty. The Opposition . regards those as separate subjects, and is not prepared to lend its support to an amendment that would have the results which I have indicated. It would be possible for the Opposition to abstain from voting on this amendment for fear that its action may be misrepresented. We consider, however, that were we to adopt that course, we should be acting weakly. We are prepared to accept the responsibility of voting against the amendment, not because we approve of the Government, nor desire that it shall remain in office indefinitely, but because we consider that this is not the proper occasion on which to take the action that inevitably would be involved in the event of the amendment being agreed to. If the Deputy Leader of the Country party feels disposed to press the matter to a division, I suggest that the vote be taken immediately, so that a decision may be arrived at promptly. In the event of its being agreed to, there will be a certain result. In the other event, we shall be able to proceed with the ordinary budget debate, reserving for another occasion whatever remarks we may wish to make on the tariff.

Mr GREGORY:
Swan

.- Mr. Chairman-

Motion (by Mr. Scullin) put -

That the question be now put.

The committee divided. (Chairman - Mr. McGrath.)

AYES: 35

NOES: 7

Majority . . . . 28

AYES

NOES

Question so resolved in the affirmative.

Question - That the first item be reduced by £1 (Mr. Paterson’s amendment) - put. The committee divided. (Chairman - Mr. McGrath.)

AYES: 7

NOES: 0

Majority . . . . 31

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Progress reported.

House adjourned at 10.45 p.m.

Cite as: Australia, House of Representatives, Debates, 14 July 1931, viewed 6 July 2017, <http://historichansard.net/hofreps/1931/19310714_reps_12_130/>.