House of Representatives
21 July 1931

12th Parliament · 1st Session



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

page 4123

NEW SOUTHWALES FINANCE

Mr SCULLIN:
Prime Minister · Yarra · ALP

by leave - After an interview with the Premier of New South Wales yesterday regarding the financial necessities of his State, I sent the following telegram to all members of the Loan Council:

Following is summary of letter dated 15th July, received by Commonwealth Treasurer from Premier and Treasurer of New South Wales: -

During recent conference of Premiers it was generally understood that, providing governments reduced deficits from £40,000,000 to £15,000,000, banks would carry respective governments during current financial year. Assuming deficits are reduced to £15,000,000, leeway will be greater during first half of year, and, consequently, greater accommodation than £15,000,000 will be required between July and December, but accommodation so provided will be lessened during second half of year. I am enclosing estimate of receipts and expenditure of New South Wales for period 1st July to 30th September, from which it will be seen that, apart from non-payment of London exchange and interest and the amounts withheld by the Commonwealth from this State, we will require approximately £500,000 during July, further £2,000,000 during August, and further £1,000,000 during September. Amount for August includes local interest amounting to over £750,000 due on 10th August. In order to meet this it will be necessary to obtain substantial proportion of August requirements early during that month. Present position of this State is that unless £500,000 is provided immediately we will be unable to pay salaries and wages next week. Salary pay day falls 23rd July, but wages have to be paid practically every day. I have approached general managers of Bank of New South Wales and Commercial Banking Company of Sydney, but they point out that arrangement is that accommodation required by any government must be dealt with through Commonwealth Bank by issue of Commonwealth treasury-bills. In view of foregoing I shall be glad if you could assist this State by arranging, if possible, for issue of treasury-billsto the extent of £500,000 within next few days, and further amount of £2,000,000 in August, of which £1,000,000 will he required before 10th of that month. In regard to debt conversion, over £4,000,000 matures in this State on 10th August. I am inclined to think many holders will seek repayment, and this is a question which will require your earnest consideration as it is impossible for the State to pay off any portion of the loan.

To-day, at consultation with Mr. Lang, I informed him Commonwealth itself has no moneys available for loan to any State, but is itself borrowing from its bankers. I also pointed out that, as set out in resolutions of Loan Council meeting of 26th February last, provision of funds for advances to any State is a matter for Loan Council and not for Commonwealth Government; also that Loan Council had declared it could not arrange further borrowing on behalf of New South Wales until it is clear the State is prepared to honour its interest obligations. I undertook to submit present request of New South Wales for funds to Loan Council, together with any information likely to assist members of Loan Council in coming to decision. In regard to plan adopted by Premiers Conference, Premier of New South Wales states he proposes introducing this week legislation covering conversion agreement, trustees and private interest, and at earliest possible moment, legislation providing for economies in expenditure. This latter would be on lines indicated’ at Premiers Conference, namely, reduction to £500 of all Public Service salaries above that amount and such further economies as are necessary to secure total economies of 20 per cent. Premier also advised he would submit to his Cabinet and party, question of New South Wales rejoining Loan Council, and question of New South Wales assuming responsibility for payment of interest oversea. I consider it essential that meeting of Loan Council be held at early date to consider questions arising out of Premier’s letter and my conference with him; but, pending that meeting, early decision is desired whether Loan Council will approve issue of treasury-bills for £500,000 to cover immediate requirements of New South Wales. If Loan Council so approved, Commonwealth Bank would be approached with view to seeing whether, in conjunction with other banks, it would arrange sale of treasury-bills for £500,000 for Government of New South Wales. Immediately I receive advice from Premier of -New South Wales regarding the two questions on which he is consulting Cabinet and party, I will again communicate with you. This telegram has been seen by Mr. Lang.

SCULLIN,

for Chairman, Loan Council.

I am now awaiting further advice from Mr. Lang.

Mr LAZZARINI:
WERRIWA, NEW SOUTH WALES

– In view of the repeated statement that the Premier of New South Wales is asking for assistance from the Commonwealth Government, will the Prime Minister say whether it is not a fact that Mr. Lang is merely asking the Commonwealth to discount treasurybills issued by the Government of New South Wales for which that Government will be responsible?

Mr.SCULLIN- That, to some extent, describes the situation, but the treasurybills must be issued in the name of the Commonwealth Government, which will be legally responsible for their payment. The Commonwealth Government will be in exactly the same position in relation to such bills as it is to the consolidated State debts ; it will be responsible for the return of the principal and the payment of interest. This Government is not prepared to assume any further responsibility in regard to New South Wales, until Mr. Lang indicates his readiness to accept responsibility for past as well as for future loans.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– Will the Prime Minister assure the House that, as a representative of the Commonwealth on the Loan Council he will not agree to any moneys being made available to New South Wales until certain specific legis lation has been actually introduced into the Parliament of that State.

Mr SCULLIN:

– I received an assurance from the Premier of New South Wales yesterday that that legislation would be commenced to-day, and 1 am now waiting to hear what legislation is to be introduced. I have sent to the other Premiers a telegram to-day, pointing out that the successful launching of the Conversion Loan will be greatly prejudiced if the legislation for the plan is not proceeded with, and carried immediately. I urged that it was most important that all bills in all State Parliaments should be passed through all stages this week.

page 4124

WHEAT MARKETING BILL

Mr CROUCH:
CORANGAMITE, VICTORIA

– I ask the Minister for Markets whether the rejection by the farmers of New South Wales of the proposed State wheat pool will affect the Government’s intentions regarding the Wheat Marketing Bill?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– No ; the Wheat Marketing Bill only requires the consent of three States to the establishment of a Commonwealth wheat pool.

Mr KILLEN:
RIVERINA, NEW SOUTH WALES

– Will the result of the wheat pool ballot in New South Wales be taken by this Government as an expression of the opinion of the farmers of that State in respect to the Commonwealth pool, without a further vote being taken?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The honorable member’s question shall receive my close consideration.

page 4124

QUESTION

MINISTERIAL TRAVELLING

Use of Government Motor Cars

Mr GABB:
ANGAS, SOUTH AUSTRALIA

– I ask the Minister for Home Affairs if, on the 27th May last, a government motor car from Canberra was waiting at the Blayney railway station to receive the Minister on his return from a visit to the Broken Hill portion of his electorate? Did the Minister, because heavy rain had fallen that day, continue the journey by train, reaching Canberra via Sydney? Is it the practice of the Minister to use motor cars on journeys of this character, involving between 300 and 400 miles of travel, when trains are available?

Mr BLAKELEY:
DARLING, NEW SOUTH WALES

– The incident to which the honorable member refers occurred while the House was in session. For several reasons I was desirous of arriving in Canberra on the night of the day mentioned, and, therefore, arranged for a motor car to meet me at Blayney; but the rain made it impossible to travel to Canberra by road. It is not the custom to use cars for long journeys, except on special occasions such as that.

page 4125

QUESTION

EMERGENCY ECONOMY LEGISLATION

Attitude of the Opposition.

Mr KEANE:
BENDIGO, VICTORIA

– The following statement appeared in the Melbourne Argus on Friday last: - “ During the passing of the economy measures in the Federal Parliament,” said Mr. Lyons, “ The Opposition had been forced to keep on deck, and act as watchdogs to ensure the presence of a quorum.”

I ask the Prime Minister whether that statement is correct, and how often the Leader of the Opposition has been in this chamber since he usurped his position?

Mr SCULLIN:
ALP

– I am not certain whether, as Prime Minister, I should answer that question. I have not seen the paragraph referred to. The Leader of the Opposition, like the leaders of all political parties, no doubt is claiming as much credit as he can for his own party for the passage of legislation. 1 must acknowledge that the Opposition assisted the Government in passing the emergency legislation quite as ably as did the members of my own party.

page 4125

QUESTION

SALES TAX

Canned Fish : Government Purchases

Mr LATHAM:
KOOYONG, VICTORIA

-Will the Government give consideration to the serious disability imposed under the Sales Tax Assessment Acts, upon houses that are both wholesale and retail - particularly in South Australia and Western Australia - which has been brought about by treating the proprietors of such houses as wholesalers only, where the greater proportion of the trade is wholesale in character? The Prime Minister is aware, doubtless, that in certain cases, severe hardship will follow the imposition of the sales tax at increased rates.

Mr SCULLIN:
ALP

– I shall give consideration to the matter. We shall be able to discuss such details when the bill is at the committee stage.

Mr BAYLEY:
OXLEY, QUEENSLAND

– Has the Prime Minister yet given consideration to the request of the Fishermen’s Co-operative Association, South Brisbane, that canned fish should be exempt from the provisions of the sales tax? On the 28th May last the association wrote asking that consideration be given to this matter.

Mr SCULLIN:

– Yes ; consideration has been given to this, among 500 other requests which have been dealt with. When one item of canned food is proposed to be exempted, we receive requests for the exemption of many other kinds of canned products.

Mr WHITE:
BALACLAVA, VICTORIA

– Since exemption is granted under the bill to goods purchased by the Government of the Commonwealth or a government of a State, will the Government consider extending the exemption to purchases by municipal councils? I understand that the Victorian Municipal Association has already written to the Treasurer on this matter.

Mr SCULLIN:

– All these points will be considered when the hill is before the chamber. A considerable number of exemptions have been granted to both State governments and municipal authorities, and the result has been that we have had to increase the rate of tax by 1 per cent, in order to obtain the required revenue. The greater the exemption we give, the higher must be the rate of tax; or, alternatively, the greater the increase in the income tax.

page 4125

QUESTION

WATERSIDE WORKERS

Licences

Mr MARTENS:
HERBERT, QUEENSLAND

– Will the Prime Minister have compiled, if it has not already been done, a list showing the number of licences issued since the 30th June last?

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

– I think that particulars have been compiled almost to date, showing the licences issued, and the different classes entitled to them, under the new preferential system. I shall make a copy of the particulars available to the honorable member.

page 4126

SOVIET FRUIT DUMPING

Mr WHITE:

– The following statement appeared in the Melbourne Herald yesterday : -

page 4126

SOVIET DUMPING

Eliminating Australian Competition

Encouraged by the success of Australian fruits in the English market, the Soviet, says the Moscow correspondent of the Daily Mail, is preparing to attack with extensive dumping of fresh fruit and dried fruits from Central Asia. Orders have been issued to the effect, “ that costs and home requirements must be disregarded. Fruit means foreign currency - Russia’s most vital need.” The Russians hope that dumping will remove the competition, at least of Australian dried fruits from the market next season.

If the Minister has seen that statement, does he intend to ask Cabinet to petition the British Government to place an embargo on such dumping, so that the market for Australian fruits may be safeguarded ?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The paragraph just read by the honorable member is being considered by my department.

page 4126

QUESTION

PARLIAMENTARY ADJOURNMENT

Mr PROWSE:
FORREST, WESTERN AUSTRALIA

– In the interests of members living in distant States will the Prime Minister state when this Government is likely to get through its business and when the House will rise for a recess adjournment? Railway bookings in certain States can be made only twice weekly.

Mr SCULLIN:
ALP

– It is difficult to make a forecast. When Ave get through the essential emergency legislation, we can, I think, adjourn for four weeks. During most of that time the conversion of the Commonwealth loans will be taking place, and subsequently there will have to be meetings of the Loan Council and a Premiers Conference to consider the result of the conversion, and other matters arising out of it. That will occupy the period for which the House will be adjourned. If we bend our energies to this end, .the House should be able to rise some time towards the end of next week, and it might be possible for honorable members, hy throwing greater energy into their work, to so expedite business as to enable it to rise at the end of this week. I do not propose, however, that the work shall be scamped, or that undue pressure shall be put on honorable members by a series of all-night sittings, because the legislation that we are passing is important. One all-night sitting is, as a rule, quite enough.

Mr Archdale Parkhill:

– What about the tariff?

Mr SCULLIN:

– My suggestion is to rise for four weeks, and then to resume to clear up matters arising out of the loan conversion, and afterwards to deal with the tariff. I have received requests from a number of honorable members of every party to make an opportunity for them to visit their homes for at least two or three weeks.

Mr Thompson:

– We should adjourn for two or three months.

Mr SCULLIN:

– We shall probably do that later. The session has been long drawn-out, but we are living in abnormal times. The Debt Conversion Bill has to be proclaimed. It cannot be proclaimed until we get the Debt Conversion Agreement, which I hope to bring down to-day. We are waiting to hear from the Premier of Western Australia before we can go ahead. There are various bills arising out of the budget, the sales tax and income tax legislation particularly, to be passed. There is also a small amendment of the Gold Bounty Act; the bill providing for it will be introduced in a few moments. The Attorney-General has a small amendment to the Conciliation and Arbitration Act to introduce, and we have also to pass the Wheat Marketing Bill.

Mr Latham:

– Is the Government going on with that?

Mr SCULLIN:

– Yes.

Mr Latham:

– Why?

Mr SCULLIN:

– -The Minister for Markets will explain why. The resolution dealing with dominion legislation must be passed. I gave notice to-day of a small amendment to the Public Service Act, but that should go through in a few minutes. Then we have the Estimates to consider. When we have disposed of all those pieces of legislation, we shall be able to rise for four weeks.

page 4127

QUESTION

IMPORTATION OP RUSSIAN TIMBER

Mr JONES:
INDI, VICTORIA · ALP

– I am still receiving protests from my constituents against the importation of Russian timber into Australia, and, as the Minister for Trade and Customs has promised to make a full inquiry into the matter, will he state what stage this inquiry has reached?

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

– The invoices showing the value of timber imported from Russia have not yet arrived. The timber is not being offered for sale, and security to the amount of 10s. per 100 superficial feet has been demanded by the department. Instructions have been issued that delivery of the timber is not to be given until I have been consulted; so that the industry has no reason to be apprehensive. The Government will see that the Australian timber industry is adequately protected.

page 4127

QUESTION

REDUCTIONS OF SALARIES, PENSIONS, ETC

Mr D CAMERON:
BRISBANE. QLD · NAT

– In order to remove some uncertainty at present existing, will the Prime Minister, seeing that the Financial Emergency Act has been proclaimed on a date- between two pay days, state whether the reduction of salaries, pensions, &c, will apply for the whole of the period covered by the pay, or whether the reduction will be on a pro rata basis from the date of proclamation?

Mr SCULLIN:
ALP

– The budget was prepared on the assumption that the reduction would be made on the pay day following the proclamation of the act. It is obvious that some of the provisions of the act could not be brought into operation later than others, and a delay of a fortnight would involve a loss of revenue amounting to £200,000. Therefore, the reductions will apply to Public Service salaries, pensions, &c., on the first pay day after the proclamation of the act. In. the case of salaries, the next pay day is Friday, and the reductions will apply to the whole period covered by that pay.

page 4127

QUESTION

PERMANENT TARIFF COMMISSION

Mr GREGORY:
SWAN, WESTERN AUSTRALIA

– Has the Minister for Customs noticed a report in the press of a speech by Mr. Baldwin at Hull, in which he said that -

He had made up his mind that he would not be head of a government which was “ going to make Great Britain a profiteer’s paradise or parliament a crooks’ corner,.” “We must make the tariff ‘ knave-proof ‘ as far as possible,” he said. “ Therefore, it is essential that the scientific adjustment and adaption of the tariff should be taken from the hands of politicians by the establishment of a permanent non-political tariff commission, the members of which ought to be lifted as far above party politics as His Majesty’s judges.”

In view of this statement will the Minister favorably consider the appointment of a permanent commission, free of party bias? If not, does he consider that Mr. Baldwin has been unduly optimistic in suggesting the possibility of removing tariff questions from political influence.

Mr FORDE:
ALP

– I have not read the paragraph quoted by the honorable member; but I have read other newspaper paragraphs purporting to contain the remarks of eminent statesmen of Great Britain - remarks that were to the effect that in their opinion the time had arrived when a little protection would be a good thing for industry in that country. As for the appointment of a tariff commission, I may inform the honorable member that I was so sickened by the multitude of commissions, committees, and boards, numbering 58 in all, which were appointed by the last Government at a cost of £600,000 that I would not consider the appointment of any others.

page 4127

QUESTION

COMMONWEALTH FINANCE

Deficits

Mr CURTIN:
FREMANTLE, WESTERN AUSTRALIA

– Is it, in the opinion of the Prime Minister, an essential feature of the rehabilitation plan that the banks shall meet the Government deficits during the current financial year ? If so, does the scheme involve all the banks, the Commonwealth Bank acting in conjunction with them and on their behalf, and is there any limit to the amount of the deficits which the banks will carry?

Mr SCULLIN:
ALP

– There is an agreement that the Commonwealth Bank, working in conjunction with the other banks, shall carry the Government deficits for this year; but there is, decidedly, a limit to the amount. We were warned, in the first place, that the limit would be reached by the end of June, when the amount would be £25,000,000. At that time the Commonwealth Bank was carrying our deficit - a thing which no other bank was prepared to do, except through the Commonwealth Bank, which traded a portion of the Commonwealth bills to the other institutions, though it carried the bulk of them itself. By the end of June we had reached the limit. During the Premiers Conference in Melbourne the banks agreed that they would continue to carry government deficits if we did not exceed the limit set at that time, which included the £30,000,000 accumulated deficit for last year, which was to be carried until it could be funded as a long-dated loan, and the sum of £14,000,000 or £15,000,000, the estimated deficit for all Australian governments for this financial year. Other conditions were laid down by the banks with regard to the issue of treasury-bills, and there are conditions also to be observed under the Financial Agreement, which is supervised by the Loan Council.

page 4128

CASE OF JACOB JOHNSON

Mr LATHAM:

– I direct the attention of the Attorney-General to the newspaper report of a meeting of the Trades Hall Council in Melbourne, at which the Jacob Johnson case was considered, which passed the following resolution : -

That the Argus be informed that its subleader of yesterday is false in substance, and apparently designedly prejudicial, inasmuch as there was documentary evidence in the Crown Law Department that Mr. Latham, then Federal Attorney-General, withheld very important material facts from Parliament at that time.

Is there any evidence at all, or any foundation whatever, for the statement that I, as Attorney-General withheld important material facts, or any material facts, from Parliament at any stage.

Mr BRENNAN:
ALP

– If the honorable member withheld or suppressed material facts, he must have done it very successfully, because I have no information on the subject, and I have no reason to believe that there is the slightest foundation for the allegation said to have been made by Mr. Clarke, of the Seamen’s Union. May I add that the same gentleman has made, and promulgated a series of quite unfounded, wild, and irresponsible statements about myself so that honours are equal between the present AttorneyGeneral and his predecessor in that high office. Relative to the honorable member’s question is a statement by the Argus, that the inquiry proposed to be held is likely to be entirely vexatious and useless, or words to that effect. The Argus is not in a position to know what the matters are about which inquiry is to take place, and its judgment in that regard is ill-informed and premature.

page 4128

QUESTION

THE ESTIMATES

Mr LAZZARINI:

– When will the Estimates be printed? Time could be saved if honorable members had an opportunity of perusing them some time before they are considered in committee.

Mr SCULLIN:
ALP

– It is hoped that the Estimates will be ready for distribution on Wednesday, and that we shall proceed to consider them on- Thursday. It has not been possible to have them printed earlier than Wednesday; but as soon as they are to hand, they will be distributed.

page 4128

QUESTION

BROADCASTING OF POLITICAL SPEECHES

Mr LYONS:
WILMOT, TASMANIA

– In the absence of the Postmaster-General (Mr. A. Green), I ask the Prime Minister whether he is aware that the Postmaster-General’s Department has refused permission to station 5 AD, Adelaide, to broadcast speeches to be delivered at a meeting to be held in Adelaide to-night under the auspices of the Citizens’ League? What are the reasons for this refusal, in view of the fact that permission was given for the broadcasting of speeches made in Adelaide recently by the Premier of New South Wales, or his representative, and by the Treasurer, myself, and others, discussing political topics? Why has this permission been refused to the Citizens’ League to broadcast through a “ B “ class station, and is it possible, even at this stage, to give authority for the broadcasting of it?

Mr SCULLIN:
ALP

– I am not acquainted with the facts of the case. I understand that in these matters the Director of Posts and Telegraphs, Mr. H. P. Brown, exercises his discretion; but I shall inquire into the question raised by the honorable gentleman.

page 4128

QUESTION

BUFFALO FLY

Mr MACKAY:
LILLEY, QUEENSLAND

– Is it a fact that the Government has decided against the proclamation of a buffer area in Queens- laud for checking the spread of the buffalo fly? Will the Minister for Home Affairs make available to honorable members the reports of the Queensland Minister for Agriculture, Mr. Walker, and of Dr. Mackerras?

Mr BLAKELEY:

– The Government has decided, in view of all the circumstances, that the proposed buffer area would not be effective in checking the spread of the buffalo fly; but it has determined to continue, so far as possible, the present biological control, and it is continuing the campaign on those lines. Any honorable member desiring to see the reports referred to may do so on giving notice.

Mr MARTENS:

– I had the good fortune to peruse the reports, and I would like to know if the department has considered the advisability of resorting to the spraying suggested by the experts ?

Mr BLAKELEY:

– The Government has considered the whole of the recommendations. It was decided that spraying was the responsibility of the State; but the Commonwealth has offered to the Queeusland Government the services of the Council of Scientific and Industrial Research, with the view to the preparation of a suitable spray. The advice of the scientists is available to the Queenslaud Government at any time.

page 4129

QUESTION

PARLIAMENT HOUSE LIFT

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I bring under your notice, Mr. Speaker, the fact that a lift in the Opposition corridor has been out of commission for three or four, weeks. Since this is causing great inconvenience to many members who desire to use it, will you take steps to have it put in order as soon as possible?

Mr SPEAKER (Hon Norman Makin:
HINDMARSH, SOUTH AUSTRALIA

– I am not aware that one of the lifts is out of order; but if it is, I shall have it put in order immediately.

page 4129

QUESTION

DUPLICATION OF MEDICAL SERVICES

Mr McGRATH:
BALLAARAT, VICTORIA

asked the Prime Minister, upon notice -

In view of the apparent duplication in the medical services of the Commonwealth with those of the States, and the recent enormous growth of the Commonwealth Department of Health, will lie consider the submission of the question of duplication and overstaffing of medical services to the Public Accounts Committee for full investigation and report, so that honorable members may bc in a position to consider such report when the estimates of the Health Department for the present financial year are under review?

Mr SCULLIN:
ALP

– The functions of the Health Departments of the Commonwealth and States are at present the subject of consideration by the committee arranged by the conference of Commonwealth and State Ministers to inquire into the question of overlapping in Commonwealth and State departments.

page 4129

QUESTION

NATIONAL FLAG

Mr CROUCH:

asked the Prime Minister, upon notice -

  1. Whether the Canadian Governor-General has adopted a special flag, which includes the Canadian emblem?
  2. Whether the Governor-General of the Commonwealth uses on Government House, and generally, the English flag, which already appears as part of the Australian flag?
  3. Is the Australian flag recognized as the national emblem by the King?
  4. Is the English flag more the King’s flag than the Australian flag?
  5. Is there any reason why the Australian flag, which shows its British connexion by the partial use of the English flag, should not bc adopted for Government House use?
Mr SCULLIN:
ALP

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

  1. His Majesty the King lias been pleased to approve that the Governor-General of Canada shall in future fly his own personal flag. The design of the flag consists of the Royal Crest in gold upon a blue ground with the word “ Canada “ underneath.
  2. It is customary for the Governor-General of the Commonwealth to fly the Union flag on Government House. Except on Government House, the Governor-General uses a personal flag, which includes an Australian emblem in the form of a seven-pointed star.
  3. Yes.
  4. The Union flag is the flag in general use in the British Commonwealth of Nations. The Australian flag is significant of the fact that this country is an autonomous nation within, the Commonwealth of Nations.
  5. The question . as to what flag should be flown on Government House will receive consideration.

page 4130

QUESTION

FEDERAL CAPITAL

Reduction of Rents - Rent of Electric Meters

Mr McGRATH:

asked the Minister for Home Affairs, upon notice -

  1. In view of the recent large reduction in the salaries of public servants, does the Government intend to extend to officers renting government-owned houses at Canberra the benefit of the reduction of interest rates, by decreasing house rents in respect of houses for which the Government is now paying less interest on the capital cost?
  2. If so, what will be the approximate percentage reduction in rent, and will it operate from the date of the salary reduction ?
  3. Will a reduction in interest be also made in respect of houses in Melbourne purchased by the Government from officers transferred to Canberra, and sold on terms to other persons ?
Mr BLAKELEY:

– These matters are receiving consideration.

Mr BLAKELEY:

– On the 17 th July, the honorable member for Eden-Monaro (Mr. Cusack) asked me the following questions, upon notice : -

  1. Has he seen the report of the chairman of the Electric Light and Power Supply Corporation Limited, Sydney, reported in the Sydney Horning Herald of the 24th ultimo, wherein it is stated that the directors of that company had decided to dispense with the charge of meter rents, and that the first light and power meter was supplied free to consumers? .
  2. What was the contract price for the supply to the Federal Capital Commission of the household type of electric light and power meter now in use in Canberra?
  3. What is the estimated life of these meters ?
  4. What are the charges made to thehouseholder in Canberra for hire of light and power meters ?
  5. What proportion of this charge represents capital charge, and what proportion represents annual interest charge?
  6. What rate of interest is being charged for the hire of these meters after deduction of capital charge?
  7. In view of the decision of the Sydney Electric Light and Power Supply Corporation Limited, and the general reduction in interest charges, will the Minister be prepared to reconsider the existing high charges made in Canberra for meters?

I am now in a position to advise him as follows : -

  1. The report has since been brought to my notice.
  2. £1 13s.6d. at Canberra.
  3. About seven years. , 4.6d. per month.
  4. Interest,1s. 9d. ; obsolescence, 4s.; ad justments, 3d. per annum.
  5. No additional charges are made over and above those shown in answer to question 6 which are necessary to provide for interest and renewal of the meters at the end of their useful life.
  6. In view of answers given to Nos. 5 and 0, the charge for meter rent is not considered high, and it is not proposed to make any reduction at present.

page 4130

QUESTION

TOWNSVILLE STOCK EXPERIMENTAL STATION

Mr MACKAY:

asked the Prime Minister, upon notice -

  1. Whether it is a fact that the Commonwealth Government has decided to take control of the Queensland Government Stock Experimental Station at Townsville, Queensland, for the purpose of scientific investigation of problems affecting cattle production?
  2. If so, will he give particularsof the arrangement entered into with the Queensland Government ?
Mr SCULLIN:
ALP

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

  1. The Commonwealth Government has arranged with the Queensland Government for the Council for Scientific and Industrial Research to take over the Stock Experimental Station at Townsville, Queensland, for the purpose of scientific investigation of problems affecting cattle production. This arrangement is conditional upon the Queensland Government providing a sum of £1.000 per annum and private interests, including the Pastoralists Association, meat companies, &c, contributing up to £4,000 per annum. The Empire Marketing Board will contribute for a period of five years up to £5,000 per annum on a £1 for £1 basis to match the money contributed by the Queensland Government and the private interests.
  2. See reply to No. 1.

page 4131

QUESTION

RELIEF OF UNEMPLOYED

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

– On the 8th July, the honorable member for Melbourne (Dr. Maloney) asked me the following question, upon notice: -

Will the Prime Minister obtain the following information for the House: -

The allowances made to the unemployed single and married men and women, in the various States, and the allowances made for children.

Are there any obstacles raised or objections made to claims for unemployed allowances being paid to men and women who have no permanent address through inability to pay rent?

Replies have now been received from the State Premiers setting out the position in their respective States, and a summarized statement has been placed on the table of the Library for the information of the honorable member.

page 4131

FINANCIAL EMERGENCY BILL

Assent reported.

page 4131

GOLD BOUNTY BILL (No. 2)

Second Reading

Mr FORDE:
Minister for Trade and Customs · Capricornia · ALP

.- I move -

That the bill be now read a second time.

Towards the close of last year an act was passed for the purpose of providing a bounty to encourage the extension and development of the gold-mining industry in Australia. Shortly afterwards Senator Daly, who was then responsible for its administration, called a conference in Melbourne of the Ministers of Mines of the various States, and representatives of the gold-mining industry. Certain members of the conference were appointed to a gold council to consider the welfare of the industry and advise the Government. The conference made a number of suggestions for the amendment of the act and the regulations made pursuant to it. These suggestions subsequently received the careful consideration of the Government, which accepted some of them and rejected others. This bill gives effect to all the suggestions which received the approval of the Government.

As honorable members are aware, provision has already been made in the Financial Emergency Act to reduce the gold bounty by 50 per cent. It is only right, however, that in this connexion I should remind honorable members of the following observations which I made last year in moving the second reading of the Gold Bounty Bill:-

The contention has been raised that if the exchange rate increases the rate of bounty should be reduced. The representatives of the industry hold the view that, because of the resultant increase in the cost of living, wages, and other charges, an advance in the exchange rate would not improve their position appreciably, but the Government reserves the right to reconsider the matter in the event of an abnormal rise in the exchange rate.

An abnormal increase in the exchange rate did occur, and this was one of the reasons why in these abnormal, times a reduction of the bounty was justified. The reduction was considered by the representatives of the gold-mining industry, who conferred with the Treasurer on the subject at Canberra. I believe that those gentlemen went away completely satisfied that the fair thing had been done. As honorable members know, the bounty is payable only on the excess over the average production over the last three years. Bounty will he paid for the first six months of 1931 at the rate of £1 per oz., Australian currency, on the excess production over the average production for the years 1928, 1929, and 1930, and for the second six months of the year, and thereafter at the rate of 10s. per oz. Australian currency. But provision has been made that the rate of bounty shall increase at the rate of 1s. per oz. in respect of every decrease of 3 per cent, in the average rate of exchange per cent, below 30 per cent., but shall not in any case exceed £1 per oz. These conditions are provided in the Financial Emergency Act.

One of the proposals made at the conference presided over by Senator Daly was that an Australian gold council should be established for the purpose of advising the Minister responsible for the administration of the Gold Bounty Act. It was suggested that the membership and functions of this council should he as follow : -

  1. To consist of sixteen members - The Minister, a member of the Executive Council, the Minister of Mines for each State, the member for the Northern Territory, and seven representatives of the gold-mining industry.
  2. To advise the Minister on all questions relating to the industry.
  3. To inspect, at request of the Minister, accounts, books and documents of any registered producer.
  4. Council to appoint agents for such purposes and in such places as it saw fit.
  5. Council to appoint such officers as necessary to assist the council.
  6. Council to recommend claims for bounty and claims not recommended not to be paid.
  7. Any dispute between the Minister and a gold-producer, as to compliance with his undertaking, to be referred to the council for a recommendation.
  8. Council to receive up to 5 per cent, of bounty to cover expenses and for other purposes.
  9. Council members to be paid fee for attendance at meeting or when engaged on other bounty business.
  10. Council to receivetravelling allowances.
  11. An executive committee of the council to be formed from the “ industry “ members with such powers and functions as the council decides.

Although some honorable members who arc enthusiastic advocates of the encouragement of the gold-mining industry sincerely believe that such a council should be established, and can, no doubt, advance good reasons in support of their belief, the Government felt that under existing conditions it would not be justified in incurring the heavy expense that would be involved in the setting up of such a body. The Trade and Customs Department, which is responsible for the administration of our bounty legislation, will bo able todo all the necessary work in connexion with the payment of the gold bounty and the checking of claims without setting up an outside body to be financed out of the Treasury payments for bounty. The Government has been promised the active co-operation of the Mines Departments of the various States. In these circumstances, it will not be necessary to engage any additional staff to administer this legislation. If a gold council were established and were authorized to retain 5 per cent, of the gold bounty, it would have an income of £10,000 per annum, assuming that if the payment of gold bounty at the rate of £1 per ounce, involved an expenditure of £200,000, and of £5,000 if it involved an expenditure of £100,000 at the rate of 10s. per ounce. Such a body would doubtless need to call for the assistance of the mining inspectors of the various State Governments. The Government has been promised all the assistance that the State Mines Departments can give it in connexion with the administration of this legislation, and the State mining inspectors will be available to inspect mines and report upon them, and to do anything else that might bo necessary in this direction. The Minister for Trade and Customs, and the Comptroller-General of Customs, will both be able to arrange with the State Governments for the assistance of the State mining officers. [Quorum formed.]

It has been found that several amendments of the act are desirable. The amendments now proposed do not affect the essential substance of the act, but involve matters concerning its practical application. In the first place, it is urgently necessary that the definition of “ licensed gold buyer “ should be extended. The present definition reads “ licensed gold buyer means a person authorized under the law of a State or territory to buy gold “. The effect of this is that in a State where there is no law authorizing persons to buy gold there are no licensed gold buyers for the purposes of this act. The only States which, up to the present, have such a law are Victoria and Western Australia, so that in the other States, until the definition is amplified, there can be no licensed gold buyers to whom producers can sell their gold and obtain therefor the certificates required to enable bounty to be claimed. This disability could be overcome by the Parliaments of New South Wales and Queensland passing legislation to provide for the licensing of gold buyers, similar to the acts . in Western Australia and Victoria, but as they have not taken that action it is deemed advisable that this Parliament should make the necessary provision. The amendment proposed will overcome this difficulty, as banks and others operat- ing in States to which the present definition does not extend can be specified by the Minister as licensed gold buyers for the purposes of the act. It is because of the urgency for action in this direction that the bill is now brought forward. The words proposed to be added to the definition are : - and includes any branch in Australia of His Majesty’s Royal Mint and any authority of a State specified by the Minister by notice published in thu Gazette, or any person so specified.

This will enable a storekeeper or State official if needed to be appointed n gold buyer in a centre where there is no branch of a bank. This matter was brought to my notice by several members, notably the honorable member for Kennedy (Mr. Riordan), who pointed out that many places in hi3 electorate have no banks, but gold could be sold there if local storekeepers or other reliable persons were appointed licensed gold buyers under the Gold Bounty Act. As to the reference to the branches of the Royal Mint, I may say that specific mention of these in the definition is necessary. There is a branch in Melbourne and one in Perth. They do not, however, come under the present definition, as they are not authorized by the law of the State to buy gold, but operate under British law. It is of course necessary that they should be “ licensed gold buyers “ for bounty purposes.

The second amendment is the addition of a definition of a “ tributer “. Later amendments make reference to tributers, and it is therefore desirable that tributers should be defined. The definition reads - “ Tributer “ means a person who works a mine or portion of a mine under an agreement with the lessee or owner of the mine to pay to, or receive from, the lessee or. owner, a portion or percentage of the product taken from the mine, or of the proceeds of the sale of that product. ,

The third amendment is to paragraph c of sub-section 3 of section 3. This section how provides that gold contained in material shipped abroad for treatment shall be deemed to have been produced in tho year in which it was so shipped. Before such gold can be considered for bounty it is, of course, necessary that sat isfactory evidence be furnished as to the actual quantity of gold recoverable from the material. Such evidence may not, however, be available in the same year in which the material was shipped ; in any such case, it is desirable that there should be authority for the gold to be brought into the accounts of the year in which the evidence is furnished. Otherwise the settlement of the bounty claims promptly after the close of any year might be seriously delayed. To provide for this the addition of the following words to the section is proposed: - or, where a shipper has not, in the year in_ which shipment is effected, furnished evidence to the satisfaction of the Minister as to the quantity of the gold commercially recoverable from such matte, concentrates, or other material, as the case may be, the gold shall, if the Minister so directs, be deemed to have been shipped in the year in which such evidence is produced.

The next amendment - that to section 7 of the act - is associated with that just mentioned. The proviso to section 7 requires the production of an assay certificate of the value and content of the gold in material shipped abroad for treatment. The quantity of gold in such material is not, however, necessarily the quantity of gold which is commercially recoverable from the material, and bounty should not, of course, be payable on a quantity in excess of that recoverable. The amendment to this section, therefore, is to require an assay certificate as to the gold content of the material, and, in addition, evidence as to the quantity of gold commercially recoverable.

The next amendment is to section 8, and is to make clear that bounty will be paid only in respect of gold for which claims for bounty have been lodged, and, so far as gold in material shipped abroad is concerned, in respect of gold commercially recoverable, which may be less than the gold actually contained in the material.

A new section-is proposed to be inserted after section 9 for the purpose of ensuring that tributers participate equally with the owners of the mine in any bounty on gold resulting from their labours. According to the nature of the agreement between the tributer and the owner or lessee of the mine the tributer may be entitled to the gold he obtains - in which case he would pay a share to the mineowner or lessee- or, on the other hand, the gold obtained may go to the owner or lessee, who would pay a proportion to the tributer. In the latter case the tributer should receive from the mineowner or lessee a. share of any bounty paid in respect of the gold concerned, and it is to make this clear that the section is added to the act.. The new section provides that where a gold mine or portion of a gold mine is worked by ,a tributer, the owner of the treatment plant at which gold from the ore produced by the tributer is recovered, shall pay to the tributer 50 per cent, of any bounty, received in respect of the gold obtained from such ore. This provision is urged by the Tributers Association of Western Australia. The views of the Chamber of Mines, Kalgoorlie, were sought. The chamber, in the first place, raised no objection, but within the last few weeks has advised that the matter has been reconsidered, and that it now opposes legislation on the lines suggested. The chamber states that this decision is in accordance with the cabled views of the London Board of Directors of Western Australian gold-mining companies. Mr. de Bern ales, who has been most actively interested in the bounty, has all along strongly opposed this amendment to protect the interests of the tributers. The Australian Workers Union of Boulder, Western Australia, which has also been consulted in the matter, agrees with the suggested provision.

Mr NAIRN:
PERTH, WESTERN AUSTRALIA

– Does that apply irrespective of the proportion the tributers are to receive under agreement?

Mr FORDE:

– The agreements will be drawn up independently of this bounty. Some persons have said that, because of this new provision, the mine-owner will drive a harder bargain when letting tributes, but that is not a matter within the purview of this bill. The tributers in Western Australia are responsible for the production of over 100,000 oz. of gold annually, and their interests in the matter are, therefore, considerable. The PostmasterGeneral (Mr. A. Green) knows the circumstances of the tributers in the

Kalgoorlie district very well, and he has represented to me their views. Moreover, the State Mining Act provides that 50 per cent, of any premium on gold is to be paid to tributers, and it is considered equally desirable that their rights in respect of the bounty should be similarly ensured. Minor amendments are made to sections 11 and 18 to cover work done by tributers, and at the end of section 18 an additional sub-section is inserted.

Sub-section 6 of section 18 authorizes the Minister to appoint in certain circumstances an authority for determining conditions of labour and rates of wages. It is desirable that the nature of this authority should be defined, to ensure particularly that such authority i3 representative of both employers and employees. The proposed new sub-section is in the same terms as sub-sections in recent bounty acts, notably those relating to cotton, flax, and linseed, and reads - (7.) An authority appointed by the Minister under the last preceding sub-section shall consist of a representative of employers engaged in the production of gold, a representative of employees engaged in such production, and a person, who shall act as chairman, and who shall be appointed by the Minister on the joint nomination of the representatives of employers and employees:

Provided that if the representatives of employers and employees fail to make a joint nomination of a chairman within twenty days of being called upon by the Minister to do so, the Governor-General may appoint a person to act as chairman.

The last amendment is to the schedule to the act, prescribing the form of application for registration as a gold producer. In the application, certain undertakings are given by the applicant, which bind him for ten years - the full term of the operation of the act. It is possible, however, that a producer may at any time desire to withdraw from the operation of the act and participation in bounty, and to be free from compliance with the undertakings he had given as to allowing inspection of the mine, &c. It is reasonable that this contingency should be provided for, and the suggested amendment of the form of application is for this purpose.

Debate (on motion by Mr. Archdale Parkhill) adjourned.

page 4135

INCOME TAX BILL 1931

In Committee of Ways and Means:

Motion (by Mr. Scullin) agreed to -

That a tax be imposed on Income at the following rates : -

Division C. -Rates of Tax inrespect of Taxable Income Derived Partly From Personal Exertion and Partly From Property.

Division D. - Tax Payable Where Amount Would Otherwise be Less Than Ten Shillings.

Notwithstanding anything contained in the preceding divisions, where a person would, apart from this division, . be liable to pay income tax of an amount less than ten shillings, the tax payable by that person shall be ten shillings.

Division E. - Rate of Tax Payable by a Trustee.

For every pound of the taxable income in respect of which a trustee is liable to be separately assessed and to pay tax, the rate of tax shall be the rate which would be payable under Division A, B, or C, as the case requires, if one individual were liable to be separately assessed and to pay tax on that taxable income.

Division F. -Rate of Tax Payable by a Company.

Division G. -Rate of Tax Payable by an Individually Owned Private Company.

For every pound of the taxable income of an individually owned private company, the rate of tax shall be determined as follows: -

Division H. - Rate of Tax Payable by a Severally Owned Private Company.

For every pound of the taxable income of a severally owned private company, the rate of tax shall be determined as follows : -

Division I. - Rateof Tax by an Individually Owned Partnership.

Individually owned partnerships other than Trusts whicli are partnerships.

For every pound of the taxable income of an individually owned partnership, the rate of tax shall be determined as follows: -

Trusts Which are Individually Owned Partnerships.

For every pound of the taxable income of a trust which is an individually owned partnership, the rate of tax shall be determined as follows: -

Division j. - Rate of Tax Payable by a Severally Owned Partnership.

For every pound of the taxable income of a severally owned partnership, the rate of tax shall be determined as follows: -

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

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

Bill brought up by Mr. Soullin; and read a first time.

Second Beading.

Mr SCULLIN:
Prime Minister · Yarra · ALP

– I move-

That the bill bc now read a second time.

The bill provides for these new rates of income tax to be applied in assessments for the present financial year, and will give effect to the Government’s proposals -

  1. to increase the normal rates (i.e. the rates exclusive of the special tax on property incomes) of tax payable by companies and individuals by 5 per cent, all round; and
  2. to increase the special tax on taxable incomes from property from 7i per cent, to 10 per cent, of the amount of that income.

As already announced in the budget speech, the estimated yield of additional tax from the increase of 5 per cent, is £380,000, and that from the increase of the special tax on property incomes is £830,000. The balance of £290,000 necessary to make up the estimated total additional revenue of £1,500,000 is expected to be obtained from the reduction of the general exemption of personal exertion incomes from £300, diminishing by £1 for every £3 of the excess over £300 and vanishing at £1,200, to £250, diminishing by £1 for every £2 of the excess over £250, and vanishing at £750.

The reduction in the general exemption of personal exertion incomes will be provided for in the Income Tax Assessment Bill which is to be introduced. A special feature of the Income Tax Bill will be the consolidation of the original schedule rates of 1915 and all the existing super-taxes and additional and further taxes, except the special tax on property incomes, into one rate expressed in a simple formula for personal exertion and property incomes, respectively, and ascertainable in respect of any given amount of taxable income by a simple arithmetical calculation. The confusion resulting from the existing super-taxes and additional and further taxes, and the complexities of the curves of the second and third degrees caused by the existing formulae, has been a source of continual annoyance and trouble to the vast majority of taxpayers, and has, in its practical result, made them completely dependent upon the Taxation Department’s ready reckoners for the ascertainment of the extent of their liability for tax.

The Government, in its desire to eliminate, where practicable, any complexities in a system of taxation which is inevitably complex in its very nature, instituted inquiries into the possibility of obtaining a more simple rate without materially altering the result obtained under the existing system in the amount of tax assessable in any particular case. For that purpose, the Government obtained the expert advice of Professor Giblin who, on looking into the matter, expressed the opinion that the desired result could be obtained. The new consolidated rates are fully explained in Professor Giblin’s notes, which have been circulated among honorable members. It should be noted that the consolidated rates have been designed to incorporate all existing rates and super-taxes, &c, plus the proposed increase of 5 per cent. They do not, however, incorporate the proposed special tax of 10 per cent, on property incomes. The rate of tax on income from personal exertion is contained in the first schedule; and that on income from property is contained in the second schedule. To calculate in any particular case the amount to be added for the special tax on property incomes, it is merely necessary to add to the tax calculated under the second schedule 10 per cent, of the amount of the taxable income from property.

Honorable members will find attached to the circulated notes of Professor Giblin, two statements - Table “ A “ and Table “ B “ - which give a comparison, at stated amounts of taxable income, between the rate which would apply and the tax which would be paid if the old method of calculation were applied to the taxes proposed for the present financial year, and the rates which will apply and the tax which will be paid under the new method. The tables also compare, at stated amounts of taxable income, the taxes which will be paid, for the present financial year, 1931-32, with the taxes which were payable for the last financial year. 1930-31. The tax under the new method, as shown in the tables, has not been worked out to the last decimal point bence the actual tax payable under the proposed rates may, in some cases, differ to the- extent of a few pence from the -tax so shown. It will be observed that the rates under the old and new methods, respectively, differ in most cases only by small fractions of a penny, although here and there they approximate to, and even exceed, Id. for example, at taxable incomes from property of £500, £3,001, £5,000, £10,000 and £20,000. The differences are sometimes against the taxpayer, for example, at £500 and £3,000 taxable income from either source, and sometimes in favour of the taxpayer, that is at £3,001, £10,000 and £20,000 taxable income from either source. In the case of incomes from personal exertion the rates under the new method are, in general, slightly less than the rates under the old method. [Quorum formed.]

The effect of the . proposed rates is illustrated by two graphs which have been drawn up by Professor Giblin for the purpose of comparing, up to a taxable income of about £600 from each source, the graduation of rate under the old and new methods respectively. These graphs are also circulated for the information of honorable members. Two further statements have been circulated, one of which shows the effect of the reduced general exemption of personal exertion -incomes, and also compares at given amounts of net and taxable incomes from personal exertion, the tax payable at existing rates for 1930-31, and the tax payable under the rates proposed for 1931-32; and the other similarly compares the -tax payable on property incomes - including the special tax of 10 per cent. - under the existing and proposed rates, respectively. Apart from the excision of the provisions for super-taxes, &c, the new first and second schedules and the other aspects dealt with, the hill will be practically identical in form and contents with the Income Tax Acts 1930. It is merely necessary to point out that clause 5 of the bill replaces section 7a of the 1930 act, and that sub-section 3 of that section is omitted from clause 5 for the reason that it relates specifically ‘to income which was actually derived during the year 1929-30, and, therefore, has no function in any act which applies to income subsequently derived.

Professor Giblin has supplied these notes on the amended income tax scale -

The original scale of the federal- income tax of 1915 was carefully graduated, so that there were no abrupt differences of tax for incomes differing by a small amount. Successive amendments to the Income Tax Act have broken into the original graduation, and introduced marked irregularities. For example, the ta,x on £201 is 10 per cent, greater than the tax on £200. Again, the tax on £500 is £12 ls. 4d., but an additional £1 of income would increase the tax by £1 17s. New formula for the tax have been designed which will smooth out these irregularities, but preserve the variations in principle which have been introduced by amendments of the act. For example, the graduation from £200 on & made steeper than in the original scale, us provided by section 6 of the act of 1929 (No 30), and from £500 on steeper again, as provided by section 7 of the act of 1930 (No. 51.) ; and so on for other variations that have been enacted by Parliament. But the variation is introduced gradually so as to avoid sudden jumps. These formula? consolidate the successive additions to the original scale, namely -

Additional tax;

Super-tax;

Further tax on higher incomes;

Proposed further tax on all incomes; but do not cover the further special tax - on incomes from property, an emergency measure, which it is desirable to keep distinct from normal taxation.

The new consolidated scales make a new starting point for ordinary taxation, which in future years, can be decreased or increased by 5, 10 or 20 per cent., as the situation demands. The new scale for personal exertion is on the same principle as the original personal exertion scale. The rate begins at 3d., and increases l/160th of a penny for each additional £ of taxable income, so that the rate on £160 is 4d., and on £320, is 5d., and ou £1,600 is 13d. A smooth scale of this kind has now been adopted for income tax by all the States, except Victoria, where the taxa-tion scale still retains serious irregularities and anomalies. The principle of the original scale from property was to increase the steepness of graduation between £500 and £000, and case it ofl’ gradually for higher incomes as the limits of taxation were approached. This principle (together with the successive amending principles) ,is preserved in the new scale, bill is effected by a simpler method, which avoids the mathematical complexities of curves of the 2nd and 3rd degree. The calculation of the tax then becomes a matter of simple arithmetic. For three different ranges of income, formula! are used similar to that for personal exertion, in which the rate of tax increases by a fraction of a penny for each additional £ of income. The fractions are different for each range of income. The effect is to distribute the severity of taxation between groups of income substantially the same as under present legislation, and to give substantially the same revenue; but to do it in a simpler way and to avoid the sudden jumps which are given by the scale as it now stands.

The following are the schedules and tables to which I have already referred- Debate (on motion by **Mr. Lyons)** adjourned. {: .page-start } page 4141 {:#debate-26} ### CONCILIATION AND ARBITRATION BILL (No. 3) {:#subdebate-26-0} #### Second Reading Debate resumed from the 29th May *(vide* page 2427), on motion by **Mr. Brennan** - >That the bill be now read a second time. {: #subdebate-26-0-s0 .speaker-KZO} ##### Mr LATHAM:
Kooyong .- Once again this House is invited to con-, sider the unfortunate subject of federal industrial conciliation and arbitration. This is the fifteenth bill on this subject that has been introduced in this Parliament since 1904. Many of these bills have been introduced with high hopes and confident anticipations of benefits to follow for the community as a whole, and again and again those hopes and anticipations have been disappointed until many people are wondering whether the power of this Parliament, as expressed in the Constitution, to legislate in respect of arbitration and conciliation has not, in practice, had a result exactly opposite to that was expected by those who were responsible for the early legislation on this subject. The last amending act was passed as recently as August last, and now we have a further amendment before us. The legislation as finally passed by both Houses last year was in terms which represented a compromise between conflicting views. A conference was held between representatives of this House and another place, and, as a result, legislation was passed in the form in which it now stands on the statute-book. This bill deals with what was represented by the Commonwealth to be one of the principal features of its industrial policy - the extension of opportunity for conciliation as distinct from arbitration. The Government stated that the last amending bill was introduced with a bona fide desire on its part to provide a further means of conciliation as distinct from arbitration. In fact, as was pointed out at the time, there was alreadyin the act ample provision for conciliation. Every opportunity that could be or had ever been suggested for applying what might be called the conciliation jurisdiction of the court was available under then existing legislation. The registrar, the judges, the conciliation commissioners and committees were all available to perform the function of conciliation. When the last legislation was passing through Parliament, it was suspected by some honorable members on this side of the House that the real object of the Government was not to extend the,conciliation powers of the court, but to provide a means of preventing the court from functioning whenever the Government desired. The suggestion, however, was repudiated by the Government, and the legislation was passed, so far as this part of it was concerned, in a form that was considered satisfactory by the Government. Section 33 of the act, as amended by the last legislation, provided that whenever a conciliation committee was appointed by the Government of the day, the Arbitration Court should cease to function in relation to that matter during the period in respect of which the conciliation committee was appointed. Therefore, it was possible under the act as passed last year for the Government to prevent the Arbitration Court from functioning in relation to some of its most important duties. The bill was accepted as a compromise, and it passed this House. As soon, as it was through there arose an agitation among certain of the trade unions for the appointment of conciliation committees. The Government was urged to appoint such committees in order to prevent the Arbitration Court from dealing with applications for the reduction of wages. Of course, one can readily understand any man, or any body pf men, adopting that attitude. In Australia to-day we have to recognize that we are passing through a period of economic adjustment, and I think one might not unfairly say that every section of the community is interested in one way or another, and every section is, to some extent at least, resisting the re-adjustment insofar as it affects their private interests. That is quite natural. We, however, in this Parliament represent all the people, and we ought to consider legislation, not from the point of view of this section or of that, but of the community as a whole. We should not accept legislation which is designed to enable one party to industry, whether employers or employees, to hold up the operations of the Arbitration Court whenever it suits them. That, unfortunately, was the effect, and the intended effect, of the last arbitration legislation. After the last amending bill was passed through Parliament, it was not disguised that the hope and expectation of the unions was that the Government of the day, being amenable to their influence, would appoint conciliation committees so as to prevent the Arbitration Court from bringing about a readjustment of wages under federal awards. {: .speaker-JSC} ##### Mr Brennan: -- The honorable member must admit that the Government made a fairly effective resistance to the demand for the appointment of commissioners. {: .speaker-KZO} ##### Mr LATHAM: -- - I am speaking now of conciliation committees, of which no fewer than seventeen were appointed. There was no real pretence that any dispute existed between employers and employees in the industries affected, except this matter of economic re-adjustment. Nevertheless, the conciliation committees were appointed, and it cannot be seriously denied, I think, that the object of their appointment was to prevent the Arbitration Court from functioning. When applications were made by the railway commissioners of various States - including States in which Labour governments were finding it impossible to balance their budgets, because of railways rendered unprofitable largely by arbitration awards - the industrial unions raised the point that, owing to the appointment of conciliation committees, the Arbitration Court was unable to function. The matter went to the High Court, and the point at issue was whether the appointment of so-called conciliation committees prevented the Arbitration Court from functioning in, respect to applications for a reduction of the basic wage. The High Court found, in the railways case, that the provision relating to conciliation committees was invalid for the reason that the act purported to confer on them arbitral powers, but did not effectively provide for arbitration, for the hearing of parties and for such procedure as would bind all parties to a dispute. It was held, therefore, that the provision in section 34 being invalid, the other provision in section 33 preventing the Arbitration Court from dealing with matters during the period of office of conciliation committees, was itself ineffective. Therefore, the bar to the action of the Arbitration Court was removed, and the court had jurisdiction to hear applications in respect of the basic wage. The result is that, although the conciliation committees appointed under the existing act are able to perform all their functions of conciliation, the Arbitration Court cannot be prevented from hearing applications. The bill now before us is intended to remedy that result of the act, and represents another attempt by the Government to maim the Arbitration Court, and prevent it from functioning whenever the Government is of opinion that, for any reason, it should not function. If this bill is passed,, it will be possible for the Government to remove any matter from the Arbitration Court - with some negligible exceptions to which I shall refer later - whenever it suits the Government, or those behind the Government, to follow that course.. Until section 34 was inserted in the act last year, there was no. power in any government to affect the proceedings of the Arbitration Court The conciliation committees, provided for under the legislation passed in 1928, were appointed by the Chief Judge, not by the Government, and the whole of the proceeding was under the control of the court, subject to the conciliation committees discharging their functions of conciliation in their own way. There was no possibility of interference with the court by the Government. The last amending act provided for this interference, in the sense of preventing the court, at the will of the Government, from discharging its functions in cases in which it was possible to appoint conciliation committees, which means in practically all cases. {: .speaker-A48} ##### Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP -- Were not the conciliation committees to deal with a matter at the wish of one of the parties? {: .speaker-KZO} ##### Mr LATHAM: -- In part, the Minister is right; but, in fact, conciliation committees can be appointed without any application by either party. Moreover, whenever either party wanted to prevent the court from acting, it would apply for the appointment of a conciliation committee, and its application would be granted if the Government so desired. In any event, it depended on the will of the Government. The undesirable feature of the arrangement is that powers of arbitration are conferred on these conciliation committees, and it is the Government which determines the industry in relation to which they are appointed, the period they are appointed for, and their personnel. Those concerned in the dispute may make a recommendation regarding the personnel, but there is no provision that such recommendation shall be taken into consideration. {: .speaker-KHL} ##### Mr Holloway: -- The industry itself appoints its representatives. {: .speaker-KZO} ##### Mr LATHAM: -- That is not so, as the honorable member will see if he reads the act. It is laid down in the act that the Governor-General shall appoint the committees, of which one-half shall consist of the representatives of the employers, and one-half of representatives of organizations of employees. {: .speaker-KHL} ##### Mr Holloway: -- But that is merely the formal wording of the act. {: .speaker-KZO} ##### Mr LATHAM: -- I am quoting from sub-section 6 of section 34, which states that, before appointing representatives of the employers and the organizations of employees, the Governor-General may take into consideration any recommendation made by, or on behalf of the employers or organizations of employees. The Government, however, is not bound to take that into consideration, and the Governor-General has a free hand. {: .speaker-009FQ} ##### Mr Curtin: -- That same provision was inserted in the Maritime Industries Bill. {: .speaker-KZO} ##### Mr LATHAM: -- No. If the honorable member looks it up, he will see that in that bill . it was provided that the Governor-General " shall " take into consideration any recommendation made. The object of the present measure, is to enable the Government to select anyarbitral tribunal it likes, and prevent the judges of the Arbitration Court from operating whenever the Government desires. Therefore, I oppose the bill. It appears to me to be radically unsound. {: .speaker-JSC} ##### Mr Brennan: -- This is precisely the bill to which the honorable member agreed. I thought that he was hungry for it. {: .speaker-KZO} ##### Mr LATHAM: -- I have already explained that, when the existing legislation was before the House, the Government - disclaimed any intention to use it for the purpose of ham-stringing the Arbitration Court. It stated that the provisions of the bill were to be used in a bona fide manner for the benefit of industry. We have had experience of its operations since then, and have seen that, as soon as the bill was passed, certain sections outside the House did not even attempt to disguise its real object, namely, to enable the Government to carry out the desire of certain organizations that their cases should not be heard by judges of the Arbitration Court, who have independent tenure of office, but by bodies selected by the Government itself. {: .speaker-JSC} ##### Mr Brennan: -- The wishes of the Government have nothing to do with it. The movers in the matter were the representatives of the organizations. The honorable member is merely repeating what he said before. {: .speaker-KZO} ##### Mr LATHAM: -- Since then, I have had my suspicions abundantly confirmed. {: .speaker-JSC} ##### Mr Brennan: -- But the honorable gentleman was sure before. {: .speaker-KZO} ##### Mr LATHAM: -- No; experience has shown that the object of the Government, under this proposal, is not to bring about further conciliation, but merely to prevent the Arbitration Court judges from acting. {: .speaker-L07} ##### Mr Lazzarini: -- Can the Government do that? {: .speaker-KZO} ##### Mr LATHAM: -- If the bill is passed, yes. The fourth clause contains a set of provisions with respect to the appointment of conciliation committees, and constitutes an endeavour to get over the decision of the High Court in the Railways Union case. {: .speaker-KYV} ##### Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP -- The High Court wants us to do that now. {: .speaker-KZO} ##### Mr LATHAM: -- Parliament makes up its mind, independent of the High Court. If the court had made any such intimation, it would have been highly improper. I do not think that the Attorney-General would suggest for a moment that the court had intimated any desire as to the legislation that should be passed, except in non-contentious matters of procedure. {: .speaker-KYV} ##### Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP -- This bill is non-con- tentious. {: .speaker-JSC} ##### Mr Brennan: -- Both sides agreed to it. {: .speaker-KZO} ##### Mr LATHAM: -- We have now had experience of this legislation. This clause has been drawn up to get rid of the decision in the Railways Union case, and is designed to confer every conceivable power upon the so-called conciliation committes, which are really arbitration committees. The only exception is to be found in proposed new sub-section 11, which provides: - >For the purposes of this section, a conciliation committee shall have all the powers which arc conferred by this act upon the court or a judge thereof, other than - > >judicial powers: and > >powers which, by reason of the pro visions of section eighteen a or section eighteen aa, are" not exercisable by a single judge. That is to say, a conciliation committee is to have all powers, except judicial powers, which can be conferred only upon judges appointed for life, and, secondly, powers with respect to the modification of the basic wage and the standard hours. Existing judicial powers fall under two headings - the imposition of fines and penalties, and the granting of injunctions in certain cases, and the interpretation of awards. From a practical point of view, there are now practically no fines and penalties provided for under the Arbitration Act. The penalties in regard to lock-outs and strikes have been repealed, and there will be few, if any, cases in which the court, or anybody else will be asked to exercise judicial powers. The power to grant injunctions against, say, a State industrial authority, still exists. The interpretation of power is not very important, at present, because there is full power to vary awards, and matters of interpretation can readily, in effect, be determined by applying for a variation in order to express an award in terms in which it is desired to be interpreted by the parties. Consequently, these bodies, under this bill, will have the power of making awards by a majority, of suspending, cancelling and varying awards, and, indeed, all the normal powers of a court. {: .speaker-JSC} ##### Mr Brennan: -- All the powers which the honorable member thought that they had when he agreed to this legislation before. {: .speaker-KZO} ##### Mr LATHAM: -- I point out to the Minister that, when the previous bill was going through, I strongly objected to the conferring of arbitral powers on these committees. {: #subdebate-26-0-s1 .speaker-JSC} ##### Mr BRENNAN:
ALP -- I was not here when the honorable member actually agreed to the passage of the bill and when the Opposition managers from both Houses agreed to it precisely as it is now proposed to be passed into law. {: .speaker-KZO} ##### Mr LATHAM: -- The Minister is going a little beyond the facts, since this is a new bill to which nobody has ever agreed. I have already stated the facts. I have said that the last measure was agreed to as a compromise between the two sides of the House, and between the two branches of the legislature. I reminded members of that at the beginning of my remarks. I then pointed out that certain provisions had been held to be invalid, and that this measure is designed to cure that invalidity. {: .speaker-JSC} ##### Mr Brennan: -- Since the honorable member for Wilmot **(Mr. Lyons)** and others have gone over to the Opposition, (lie honorable gentleman is becoming less compromising. {: .speaker-KZO} ##### Mr LATHAM: -- The Minister is now introducing politics. There should be no political observations, because honorable members opposite are all non-party men. {: .speaker-009FQ} ##### Mr Curtin: -- Will the honorable member help to cure the invalidity? {: .speaker-KZO} ##### Mr LATHAM: -- I am not concerned about helping in that direction, after the experience I have had of the manner in which the Government has used this legislation, or attempted to use it, in the past, and in view of certain other provisions to which I intend to refer. {: .speaker-JSC} ##### Mr Brennan: -- The Arbitration Act lias been used only for cutting wages 10 per cent.; the working classes have not got sixpence out of it. {: .speaker-KZO} ##### Mr LATHAM: -- Clause 3 provides that wherever a conciliation committee is appointed - and that depends on the will of the Government under clause 4 - the court shall have no jurisdiction to act in relation to the industry, or the dispute in respect of which the committee is appointed, during the period for which it has been appointed. Therefore, power is sought, under the present bill, to prevent the Arbitration Court from acting at all. When the last measure was before us, we were assured that that was not the intention of the Government. I repeat that experience has satisfied me that it was the intention of the Government at the time, or that the Government has changed its intentions since those representations were made in this House. I point, out, also, that now it is proposed to confer on the conciliation committees power to suspend or vary awards, and every other power that the court has or can have. These are not to be conciliation committees in substance; they are to bo new arbitration tribunals. The last clause of the bill must be read in conjunction with the previous clauses. It is a most remarkable provision. I am sure that it must have occasioned the Attorney-General and his officers great mental contortion to produce it. The honorable gentleman states that he drafted it without any trouble. I congratulate him. I do not know whether he thought it was so unintelligible that nobody would venture to ask what it meant, that somehow it would be accepted by this House, and that it might bc interpreted in a particular way. The clause reads - >Every conciliation committee purporting to have been appointed before the commencement of this act shall be deemed to have been to all intents and purposes as validly .and effectually appointed as if this act had been in force at the date of the appointment. What is the object of that clause? {: .speaker-JSC} ##### Mr Brennan: -- It is so simple and consequential that it should not require elaboration. {: .speaker-KZO} ##### Mr LATHAM: -- I propose to elaborate it. The attempt to prevent the Arbitration Court from reconsidering wages failed because the seventeen or more conciliation committees had not been validly appointed, and the Arbitration Court made certain reductions in the basic wage. The Arbitration Court heard the basic wage case, arid reduced the wage by 10 per cent. That was neither a pleasant nor a popular thing to do. It was held by the High Court that the Arbitration Court had jurisdiction to hear the case only because the conciliation committees had not been validly appointed. It is now proposed to validate the appointment of those particular conciliation committees, and, doubtless, it is intended thereby to invalidate the decision of the Arbitration Court. {: .speaker-JSC} ##### Mr Brennan: -- Nonsense; I do not think the honorable member is serious. {: .speaker-KZO} ##### Mr LATHAM: -- Clause 7 provides that- >Every conciliation committee purporting to have been appointed before the commencement of this act shall bc deemed to have been to all intents and purposes as validly and effectually appointed as if this act had been in force at the date of the appointment. By this means an effort is being made to remove the foundation of the decision of the High Court that, as the conciliation committees were not validly appointed, the Arbitration Court had jurisdiction to hear the basic wage case. If the intention of the Government is not to render invalid the decision of the Arbitration Court in the basic wage case, let it say so clearly. We shall then know exactly where we stand. If the intention of the clause is merely to remove a certain amount of inconvenience, I suggest that that could be done by an issue of the *Government Gazette.* We must face the fact that the sooner there is an economic re-adjustment in this country the better it will be for everybody. The Government has informed us that the national income has fallen from £650,000,000 three years ago to approximately £450,000,000, a reduction of 30 per cent. In a speech which the Treasurer broadcast a few nights ago he said that any one who thought that old wage rates could continue in present circumstances, was living in a world of illusion. It is unpleasant to have one's income reduced, but no service, will be done to the workers of this country by allowing them to think that wages can be maintained at the old rates. Some honorable members opposite appear to think that honorable members on this side of the chamber like reducing wages. That is pure nonsense. But from considerations of common sense, as well as of humanity and patriotism, it is wise that the people should be told clearly that a [though it is desirable to maintain wages at the highest possible point, they cannot be maintained at the old rates. To pass legislation to provide that the wages of every person in the community should be £500 per annum would he -just as foolish, and would be fraught with at least as much danger to the community, as to pass legislation to provide that no wages should exceed a rate of £500 per annum. In our wage-fixing legislation we must have regard for economic realities. Wages come from the proceeds of industry, and from nowhere else. The Government is foolish if it hopes that by the enactment of this provision it will render inoperative the 10 per cent, reduction which the Arbitration Court has ordered in the basic wage. Ifthis clause is passed there may be a disastrous and devastating increase in unemployment. We are considering this bill at a time when the Government has, at the eleventh hour, recognized that unless real weight is given to economic considerations Australia will be ruined. Yet this provision will prevent the Arbitration Court, and other federal industrial authorities, from having regard to economic considerations. Section 38 d of the principal act provides - {: type="1" start="1"} 0. 1 ) If it appears to the court on the appli cation of any organization or person interested or of the Registrar - {: type="a" start="a"} 0. that an organization entitled to the benefit of an order or award has conimitted any other breach or nonobservance of the act or of an order or award; 1. that any number of members of an organization, sufficiently large . to form a substantial part of the organization, refuses to accept employment either at all or in accordance with existing orders or awards; or 2. that for any other reason an orderor award ought to be suspended or cancelled in whole or in part, the court may, by order, subject to such conditions as it thinks fit, suspend or cancel for such period as it thinks fit, all or any of the terms of any order or award in force so far as the order or award applies to, or is in favour of, the organization or its members. The effect of clause 6 is to strike out from paragraph c the words " from reason and so prevent the Arbitration Court from having regard to the circumstances of an industry or the economic condition of the community. Honorable members who pay close attention to industrial matters will remember that the employees' representatives who appeared in the recent basic wage case argued that the court should not pay any regard whatever to the economic condition of the community. That, of course, would amount to economic and social lunacy. {: .speaker-JSC} ##### Mr Brennan: -- I do not think that any honorable member of this party,or of this Government, has adopted that attitude. {: .speaker-KZO} ##### Mr LATHAM: -- I remind the Attorney-General that the Labour members of the last Parliament strenuously resisted the Bruce-Page Government's proposal to amend the existing arbitration legislation to provide specifically that the Arbitration Court should pay attention to the economic effects of its proposed awards. A bitter controversy raged round that very point. {: .speaker-L07} ##### Mr Lazzarini: -- Every member of the Labour party, including the present Attorney-General **(Mr. Bronnan)** resisted that proposal. {: .speaker-KZO} ##### Mr LATHAM: -- That is true. Under section 38 d as it now stands, the Arbitration Court may" suspend or can cel for such period as it thinks fit, all or any of the terms of any order or award in force " for any " reason ". If, for example, it is shown that an industry cannot continue to pay the wages provided in any award or order the court may suspend or cancel any such award or order. By the removal of the word " reason " the court would be deprived of the power to take into consideration the economic condition of the industry, or of the community as a whole. It is also proposed to add two paragraphs to the section, namely - {: type="a" start="d"} 0. that all the parties bound by the order or award have consented to its suspension, cancellation or setting aside inwhole or in part; or 1. that it is desirable, by the reason of the making of a further order or award binding on all or any of those parties, that the order or award should be cancelled. In effect, paragraph *d* provides that the court may act by consent, which it can do at present; and paragraph *e* provides that it may cancel an award or order only in the event of a new order or award being made. Honorable members may think that that provision adequately meets the situation. {: .speaker-009FQ} ##### Mr Curtin: -- Hear, hear! {: .speaker-KZO} ##### Mr LATHAM: -- The honorable member for Fremantle **(Mr. Curtin)** knows better than his interjection suggests. {: .speaker-009FQ} ##### Mr Curtin: -- I think it is far preferable for the court to vary an order or award than for it to wipe it out altogether. {: .speaker-KZO} ##### Mr LATHAM: -- The court may only make a new award in the case of a new dispute. We are working under one of the most remarkable systems of industrial legislation in the world. Many years ago it was enacted in section 24 of the Arbitration Act that in the event of an industrial dispute occurring and the parties being unable to reach an agreement, the court or a conciliation committee could, by an order, " determine the dispute ". That was all right as far as it went ; but, unfortunately, it was subsequently held by the High Court that during the currency of the original term of an award there could he no dispute upon any matter which was at issue prior to the making of the award. Consequently, men might be at one another's throats, and there might be widespread lockouts and strikes, but there could be no dispute if the matter at issue between the parties was one which the Arbitration Court had dealt with in the making of the award in question. That, of course, is a consequence of the queer industrial power of this Parliament. All the matters dealt with in an award, made in pursuance of the provisions of section 34 of the act, were presumed to have been settled in a friendly manner; yet the country might actually be torn asunder because some of these matters had not actually been settled. If honorable members desire further light on this subject I refer them to the gas-workers' case. {: .speaker-KHL} ##### Mr HOLLOWAY:
FLINDERS, VICTORIA · ALP -- The honorable member himself was responsible for the setting up of conciliation committees. {: .speaker-KZO} ##### Mr LATHAM: -- That is true. As conciliation committees they are all right, but as arbitration authorities they are seriously defective. {: .speaker-JSC} ##### Mr Brennan: -- What are the defects? {: .speaker-KZO} ##### Mr LATHAM: -- There are so many that it would take me a long time to state them. But I repeat that the object is to prevent the Arbitration Court, or the so-calledcanciliation committees, from taking into account the general economic condition of the community - in this instance, in relation to the suspension or cancellation of awards. We hear much talk about the maintenance of standards. I repeat, that I believe in the highest economic standards that we can maintain, but honorable members are aware of what is happening all over the Commonwealth. Even where awards apply they are being evaded wholesale, and no action is being taken by the organizations that are aware of these unfortunate facts. Work cannot possibly he given in the terms of some awards, and, if we have any common sense or reason, we shall realize that there must - be a reconsideration of wages in many industries, and of labour conditions in nearly all, and the sooner the better for the unemployed. Too often employers and employees are ready to agree in the court to any new condition if the burden can be passed on to the community. It might be worth while to allow counsel for the unemployed to appear in every case. It is useless to pass legislation to maintain standards which are necessarily related to the economic position of the community while prohibiting the tribunals concerned from taking into account existing economic circumstances. {: .speaker-JSC} ##### Mr Brennan: -- Why should the honorable gentleman repeat the statement that we are prohibiting them from doing that; surely he knows that that is not so? {: .speaker-KZO} ##### Mr LATHAM: -- At the present time the court, or a conciliation committee, can suspend or cancel an award for any reason which seems sufficient to it, but that provision is to be struck out, and another provision substituted to authorize the suspension or cancellation of an award by consent or in the event of a new award being made. "By consent" means nothing, and I have pointed out that a new award cannot be made, during the currency of an existing award, in relation to any matter within the ambit of the original award. For many years we have been living- in a very unreal world in regard to industrial affairs. We have been able to maintain our outlook only because of the extraordinary prosperity we have enjoyed owing to the high prices of wool and wheat, and to the expenditure of a large amount of borrowed money. It will, be to the advantage of every worthy element in the community to bring about, as quickly as possible, that economic re-adjustment which the reduction of the national income makes inevitable, and not to set up any artificial obstacles such as this bill proposes to create. In all the circumstances I cannot support the measure. {: #subdebate-26-0-s2 .speaker-L07} ##### Mr LAZZARINI:
Werriwa .- The speech of the Deputy Leader of the Opposition **(Mr. Latham)** was much ado about nothing. Apparently, when agreeing to the existing provisions relating to the conciliation committees, the honorable gentleman anticipated that the High Court would declare them invalid. He supported the appointment of committees then, and he opposes the system now. I opposed those provisions then, and I oppose them now, because the defects in them will not be improved one iota by the bill. All the talk about conciliation committees is futile. The act does not do what it was intended to do, and the bill does not repeal the appeal section, in respect of which the Govern ment made such a cowardly surrender to the Senate. Nobody can question that the Labour party had a mandate from the people to go right ahead with, its industrial policy, but the Government surrendered at the first onslaught by the Senate. The provisions in the act relating to conciliation committees is mere camouflage and humbug. They purported to give to the committees arbitral powers, so that they could rectify or prevent unfair decisions by other bodies. The Senate provided for a right of appeal from the decisions of the committee to the Arbitration Court, and thereby rendered nugatory the Government's policy. {: .speaker-JSC} ##### Mr Brennan: -- Hear, hear! {: .speaker-L07} ##### Mr LAZZARINI: -- Apparently, the Attorney-General wanted those provisions to be rendered nugatory, because the present bill does not repeal them. Was all the talk in which we indulged when we were in opposition and on the hustings, simply eyewash ? Were we simply tickling the ears of the electors with the object of getting into power and staying there at any sacrifice of them and our. principles? The Deputy Leader of the Opposition said that the Arbitration Court should take into consideration the probable economic effect of a proposed award. To that the Attorney-General said, " Hear, hear !" When we were in opposition we fought with all our might against that provision, and the AttorneyGeneral was one of the strongest opponents of it. {: .speaker-JSC} ##### Mr Brennan: -- What I said was that that special duty should not be enjoined on a judge; his discretion should not be hampered. I contend that that provision should not have been inserted, and I stand by that. {: .speaker-L07} ##### Mr LAZZARINI: -- But the bill does not propose to remove it. {: .speaker-KMW} ##### Mr Marr: -- Does the honorable member agree that the judge should consider economic circumstances ? {: .speaker-L07} ##### Mr LAZZARINI: -- I do not, and the Labour party was definitely against such a provision. ' The industrial and political branches of the Labour movement have stood foursquare for the principle enunciated by **Mr. Justice** Higgins in his Harvester judgment, when he declared, unambiguously, that an industry which could not pay a living wage should be allowed to die. That was the attitude which the Labour party declared on the public platform, and to which it claimed lt would have the courage to give legislative effect if it was returned to power. {: .speaker-JOS} ##### Mr Bell: -- Does the honorable member propose to allow all industries to die ? {: .speaker-L07} ##### Mr LAZZARINI: -- An industry that cannot pay a living wage to its employees fs better dead. Is that plain enough for the honorable member ? {: .speaker-JOS} ##### Mr Bell: -- The honorable member's policy would kill all industries. {: .speaker-L07} ##### Mr LAZZARINI: -- If an industry can be carried on only by paying what one party to it says it can afford to pay, there is no end to the economic degradation that will be imposed upon the workers. They will be reduced to a bare subsistence and to the economic slavery that exists in the sweating hells of Europe, and in India, Japan, and other eastern countries. "Women still work in the coal-mines of British India under British government. If the argument of honorable members opposite were carried to its logical conclusion, female labour should be allowed in the coal-mines of Australia. When little children worked in the coalmines of Britain and never saw daylight the doctrine of the employers was that which honorable members opposite preach to-day; they pleaded the economic necessities of industry, and said that if children were taken from the factories and women from the coal-pits, industry would die. Those honorable gentlemen who talk so much and so loudly about the economic effect on industry of workers'wages say nothing about the economic effect of the profiteering charges of the employers. They do not clamour for an inquiry as to why prices are too high to enable our products to be sold in other countries, or as to obsolete machinery, watered capital, and excessive overhead costs including directors' fees that cannot be justified. Not a word is said about the effect of profiteering prices on the purchasing power of the community. The avarice of Australian manufacturers ' is one of the reasons why some of our industries are still languishing. I propose to state to the House the " dinky die " policy of the Labour party in regard to arbitration. {: .speaker-JSC} ##### Mr Brennan: -- Can the honorable member tell us how to get it passed into law? That is a practical question. {: .speaker-L07} ##### Mr LAZZARINI: -- -It could have been put on the statute-book long ago if the present Government had had the courage to challenge the Senate as its supporters wanted it to do, but Ministers wanted their trips overseas, their joyrides about the universe, while industry was languishing and the country was developing economic dry rot. {: .speaker-KMW} ##### Mr Marr: -- The honorable member and his colleagues have helped to keep the Government in office for two years. {: .speaker-L07} ##### Mr LAZZARINI: -- We had no option. We were between the devil and the deep sea. If we had put the Government out. we would have placed the Opposition in power and we were not prepared to do that. {: .speaker-KMW} ##### Mr Marr: -- But why not put the Government out of office? {: .speaker-L07} ##### Mr LAZZARINI: -- Members of the Opposition had at least 50, opportunities last week "to put the Government out of office, but they would not do that while Ministers were tamely placing the antiLabour policy on the statute-book. The votes of the Opposition repeatedly saved the Government, and the honorable member for Parkes knows that he would not win his pre-selection if he voted against the Government while it is enacting a policy that suits the moneyed interests. The members of the so-called Opposition spend their time throwing bouquets at the Government. If the arbitration law is to be effective we must discontinue the eye-wash about conciliation committees. The court must have power to inquire exhaustively into industry. It is not sufficient that the court shall crossexamine the wives and daughters of the workers regarding what they pay for the most intimate articles of their apparel, sometimes to the' accompaniment of gibes by learned counsel. The court must have power to do more than that. It must have power to inquire into the conditions and ramifications of industry. As there is a basic wage, so there should be a basic profit. Any company that approaches the court, and pleads poverty, declaring that it cannot afford to pay the wage fixed in the industry in which it is engaged, should have the onus placed upon it of proving its statements. The court should have power to make searching investigations in regard to the capital and assets of -a company and the extent to which it has watered its capital or issued bonus shares. ' {: .speaker-KVU} ##### Mr Thompson: -- "What does the honorable member mean by basic profits? {: .speaker-L07} ##### Mr LAZZARINI: -- The honorable member is not capable of understanding what that means. The court should have power to make an exhaustive inquiry into the conditions of labour. It should be able to ascertain the extent to which industry suffers because of the numerous hangers-on of capitalism - the boards of directors, who draw high fees though perhaps sitting no more than once a month. Some companies have been divided into two or three sections. That has happened at Port Kembla, in my electorate, and the company concerned is always howling for higher protection and pleading poverty. The court should have power to inquire into the methods of industry - whether they are up to date or obsolete. These things should be adjusted on a proper economic basis before any attempt is made to reduce the wages of the workers. An arbitration court which has no power to investigate the conditions of industry is of no use to the worker. Why have the awards of the court been rendered nugatory? What was the spectacle that we had during the war ? {: .speaker-KFE} ##### Mr Gregory: -- Strike after strike. {: .speaker-L07} ##### Mr LAZZARINI: -- The honorable member does not know what he is talking about. . M r. Archdale Parkhill. - That is the only reply of which the honorable member is capable. {: .speaker-L07} ##### Mr LAZZARINI: -- The honorable member has frequently referred to strikes on the coal-fields. He has quoted statistics from the *Year-Booh* showing the number of working days and the amount of wages lost because of strikes. Let me tell him that in one coal-pit in my electorate there was no strike for two years, yet. the men, because of their intermittent employment, did not work on more than an average of three days a fortnight during that period. Had the strikes on the coal-fields not occurred, the mines would have closed down because of there being no demand for coal. The statistics in the *Yew- Book* relating to the coal industry are absolutely misleading. I commend to the honorable member for Warringah this old saying, "Figures do not lie, but liars figure". It is well known that figures can be turned and twisted to prove anything. {: .speaker-KFE} ##### Mr Gregory: -- Why has New South Wales lost its coal trade? {: .speaker-L07} ##### Mr LAZZARINI: -- Every child in the community knows that we lost our coal trade because of the operation of the War Precautions Act, which prevented the export of coal from Australia during the war. In addition, the increasing use of oil fuel and hydro-electric power has led to a considerable decrease in the consumption of coal. No arbitration award has ever been effective in this country. Immediately an award is made in favour of the employee, the employer nullifies it by increasing his prices to the consumer. The court, when fixing wages should have the power to fix prices in the industry concerned. Unless the court can assure to the worker the continuation of the conditions existing at the time of its award being made, arbitration is useless to the worker. The Deputy Leader of the Opposition **(Mr. Latham)** harped all the time on the necessity for economic reconstruction. By economic reconstruction he means further wage reductions. He cannot think of economic reconstruction without associating it with the reduction of wages. He has an open mind in regard to wages, but it is closed like a clam when there is any suggestion to force companies to de-water their capital or to divulge their profits. Honorable members opposite desire this country to revert to the conditions of the nineties, to the conditions of the rural industry when the boss of the shearing board raddled the sheep, and claimed it was not sufficiently shorn, the shearer concerned receiving no pay. Honorable members opposite want to return to the vicious conditions which at one time applied to the white-workers, in regard to whom the honorable member for Fawkner **(Mr. Maxwell)** once said that a wage of 12s. a week was sufficient; when the big departmental stores employed girls for a six-months' probationary period at no pay, allegedly to teach them the trade, and at the end of that period dismissed them in order to employ other probationers. Then, an employee in those stores worked for a miserable wage from 7 a.m. till 10 p.m., from Monday to Friday inclusive, and from 7 a.m. to midnight on Saturdays. Under those conditions Grace Brothers, Anthony Hordern, and other big departmental stores built up their trade. The directors of those firms are now living in palatial suburban dwellings, which have been built put of the sweat, tears, misery and slavery of their employees. The honorable member for South Sydney **(Mr. E. Riley)** can supply illuminating information on that subject, because at one time, when a member of the Arbitration Court, he was instrumental in proving that the representatives of these big establishments had perjured themselves in court. In my electorate, before I was its member, the representatives of the coal-owners had their perjured experts at Wollongong Swearing that there was no gas in the Mount Kembla mine. While their evidence was being given an explosion took place, while the miners were at work, actually caused by the gas in that mine. These facts are on record, and cannot be gainsaid by honorable members opposite. The Arbitration Court was established to get rid of conditions such as those, and for that reason the Labour movement, the industrial organizations, and the workers accepted the principle of arbitration. When **Mr. Justice** Higgins, in the Harvester case, laid down the famous principle that industry, in order to live, must pay a progressive living wage, the Labour movement, on the industrial and political sides, accepted the principle of arbitration, knowing that when they were able to show, by means of data supplied to the court, exactly what the cost of living was, the court could not fix the basic wage at anything less than that. On that understanding only did the Labour movement accept arbitration, and on that basis, the super-structure of arbitration awards was to be built up. There was to be an extra margin for skill, technical knowledge, danger of the occupation, &c.Now, according to the Deputy Leader of the Opposition, the Arbitration Court, when fixing the basic wage, is to consider, not the cost of living, but what industry can afford to pay. If that policy be followed to its logical conclusion, the Arbitration Court can he used to re-institute all the evils of the sweating system which it was created to destroy. This bill will not give to the workers anything for which they are asking. It will not prevent the Arbitration Court from reducing wages by 10 per cent, or 20 per cent, if it likes. I desire to place on record my opinion that the arbitration system as now administered is utterly futile. It is lop-sided, and results in the victimization of the workers. When an application is being heard before the court, the business secrets of the employers must be scrupulously respected, even though the country itself is crumbling to decay. In this very Arbitration Act there is a provision that if an industrial representative discloses any business secrets which he may hear in court he may be fined £500. In my opinion, the fact that the employers are so jealous of these business secrets is the very reason why they should be dragged out into the light of day. It is time thishumbug was ended. The court does not hesitate to make the most searching inquiry into the lives of citizens if they happen to be workers. They are made to disclose how much beer they drink, how much tobacco they smoke, how much rent they pay, and what clothes they wear. Even the women are dragged into court, and made to give evidence as to the cost of their most intimate articles of clothing. {: .speaker-KMW} ##### Mr Marr: -- They volunteer that information. {: .speaker-L07} ##### Mr LAZZARINI: -- They do not. If these inquisitorial methods can be applied to the wives and daughters of workers, they should be applied also to the wives and daughters of the employers. If the worker is made to disclose his income and all the details of his expenditure, then the employer should be made to disclose his profits, and other relevant details of his business. So long as arbitration - is being employed, as it now is, to drive the workers back to the old sweating conditions, it is only a delusion and a snare, and the sooner it is thrown overboard the better. {: #subdebate-26-0-s3 .speaker-JVR} ##### Mr NAIRN:
Perth -- I opposed the Government's amending bill last year, and, in view of subsequent events, I have much pleasure in opposing this bill as well. I find pleasure also in the prospect of receiving the co-operation of the honorable member for Werriwa **(Mr. Lazzarini),** and if at a later stage there should be an opportunity of moving for the suspension of Arbitration Court awards, at any rate during the present period of distress, I hope that the honorable member for Werriwa will support me. I understood him to say that the arbitration system was of no use to the workers, and of no use to him. There are many other people also who believe that the system is of no use to the country at this time, and that its suspension is desirable. When the Labour party came into power in 1929 it had before it one important task - the amendment of the Arbitration Act. For twenty years or more arbitration courts had been consistently raising wages, and the workers as a whole were eminently satisfied with the system. The Labour party came into power with a mandate, as it was called, to improve the arbitration law so that the process of pushing wages ever upwards might be continued. ' {: .speaker-JSC} ##### Mr Brennan: -- We came in with a mandate, but did not have the machinery. {: .speaker-JVR} ##### Mr NAIRN: -- The Government found that already the process of raising wages had gone too far. The arbitration courts, which in the past had yielded to the pressure of the unions, had called a halt, and were inclined to bring about some reductions. The Government thereupon changed its tactics, and by means of the amending bill introduced last year, so altered the arbitration system as to make it possible, it believed, to peg wages at their existing level. The scheme was astute in its conception, and simple in design. It set out to substitute for the Arbitration Court a series of conciliation committees, so-called, though their powers went far beyond conciliation. It was intended to paralyse the Arbitration Court by giving power to either party to a dispute to make application for the appointment of a conciliation committee. During the operation of this committee, the Arbitration Court was to be powerless to vary the existing award. That was a very good scheme from the Government's point of view if it had worked, but it proved to be ineffective. The High Court has held that the whole provision is invalid. Now the Attorney-General comes before Parliament and asks us to remedy the mistakes he made in drafting the last bill, and, in addition, to grant further powers to the conciliation committees. For my part, I refuse, not only to help in remedying the mistakes, but to grant any further powers. Indeed, if 1 had the opportunity, I would go further, and take action to suspend the operation of the Arbitration Court for at least three years, or until the country had made sufficient progress towards recovery. I have not the slightest doubt that the arbitration courts have been a most important factor in hampering industry in Australia. When the amending bill was brought down last year, there was' much talk about the industrial disputes which these conciliation committees were to settle. We see now that, although the committees have been utterly inoperative, there has been an almost entire cessation of strikes. The reason, of course, is the general shortage of money. It is the absence of prosperity that is responsible for the absence of strikes, and I have no doubt that, if we ever get back to the old prosperous' conditions again, strikes will be just as numerous as ever, whether we have an arbitration court or conciliation committees. I believe that the arbitration courts, coupled with the operation of the tariff, have been, to a large extent, responsible for the lamentable position in which Australia finds itself to-day. The honorable member for Werriwa **(Mr. Lazzarini)** advanced one of the soundest reasons for the abolition of the arbitration system. He, and other honorable members opposite, have shown that the effect of the arbitration system is to produce a steady upward movement in the cost of living, and that wages are for ever chasing this increase. Therefore, even though the courts grant increased wages, the workers do not derive any real benefit. There was a time when things were flush with us - when we were living beyond our means, on borrowed money - when we could afford to keep pushing wages steadily upwards; but that time has gone, and I believe that the majority of honorable members opposite recognize that. For that reason, it would be better, I think, if the Government refrained from introducing controversial measures of this kind, and devoted itself to the more important financial measures for the rehabilitation of the country. Whatever the arbitration system has done for Australia in the past, we have nothing to hope for it in the future. Measures such as this and the Wheat Marketing Bill serve only to create a maelstrom of contention. Parliament has already devoted too much of its time to the consideration of the arbitration legislation. {: .speaker-JSC} ##### Mr BRENNAN: -- We could not proceed any quicker with the finance bills. {: .speaker-JVR} ##### Mr NAIRN: -- I do not believe that the Government is serious in bringing in this bill ; it is merely making a gesture to its supporters. I cannot believe that it has any reasonable expectation of seeing the bill passed, and I have a good deal of satisfaction in opposing it. {: #subdebate-26-0-s4 .speaker-KE4} ##### Mr KEANE:
Bendigo -- I am glad that there are some honorable members' on the opposite benches who candidly, and even brutally, declare that their object is the destruction of the arbitration system. I do not know whether the honorable member for Perth **(Mr. Nairn),** and the honorable member for Riverina **(Mr. Killen),** have expressed the views of their own party. The wages of 771,000 men registered under federal arbitration awards have been wrongfully cut by the judges of the Arbitration Court. That tribunal, in the Railways Union case, said that it was necessary, in the interests of employment in Australia, to decrease the cost of production by reducing wages. Members of the Opposition declare that that was a sound pronouncement, but I suggest that there has been a marked increase in unemployment since that cut was made. In the industrial history of Australia, no man has proved a greater curse to the working people than the Deputy Leader of the Opposition **(Mr. Latham).** When AttorneyGeneral he introduced a bill that made the industrial conditions of the workers hopeless. {: .speaker-KZO} ##### Mr Latham: -- The provisions to which the honorable member refers had beer included in our arbitration laws since 1904. {: .speaker-KE4} ##### Mr KEANE: -- They resulted in the wrecking of the Government with which the honorable member was associated, and in the return to this chamber of a considerable number of new Labour members, including myself. The Deputy Leader of the Opposition said that he would abolish arbitration, except for one section of industry. {: .speaker-KZO} ##### Mr Latham: -- That is not so. {: .speaker-KE4} ##### Mr KEANE: -- Despite the fact that, in practising his profession, he obtained a lot of money by way of legal fees from trade unions, I admit that, as an industrial lawyer, he was the best man available, but he was not the right person to regulate industrial conditions with which he was unfamiliar. The Deputy Leader of the Opposition also had a tilt at the Transport Workers Act, another abomination, which has caused more trouble than any other measure passed by this Parliament. It put 11,000 men out of work for three years, and included among them were 8,000 returned soldiers. {: .speaker-KZO} ##### Mr latham: -s-The honorable member has no foundation for that statement. {: .speaker-KE4} ##### Mr KEANE: -- The honorable member has shown his interest of late in those who pay the income tax and sales tax, but he has done nothing for the benefit of the toilers. Every honorable member knows that the abolition of arbitration awards, or wage reductions, would bring about a reduction of .the cost of production, but what honorable members opposite really want is that the employers should not be policed by any arbitration laws. The amendment sought under this bill is desired on behalf of the whole of th, Federated Unions of Australia, including the Australian Workers Union. I have no delusions about arbitration. From practical experience of it, I claim that it still has some advantages, though not many. Although it admittedly ensures a minimum wage and a maximum number of hours, when a depression occurs, or when there has been some muddling of industry, the employers can induce the court to cancel or vary an award. *[Quorum formed.~* The employers of Australia, and the Opposition in this chamber, contend that the cost of production must be reduced, and I think that they would admit that all they have in mind is the reduction of wages. There is never a suggestion for an improvement in the organization of industry. {: .speaker-KZO} ##### Mr Latham: -- I have denied that again and again, and yet the honorable member has the effrontery to make that unjust charge. {: .speaker-KE4} ##### Mr KEANE: -- The federal arbitration laws at least guarantee to the workers some protection. Honorable members know that, when he was AttorneyGeneral, he " put the boot into " every union whenever he got a chance, whether he was dealing with coal-miners, seamen, waterside workers, or any others. Following upon every action taken by the organizations to protect their own interests, he brought down a new bill to crush them by imposing imprisonment or heavy fines for breaches of the law. {: .speaker-KZO} ##### Mr Latham: -- That is a deliberate untruth. {: .speaker-KE4} ##### Mr KEANE: -- I have said that the honorable member is the best industrial lawyer I have known; but, as a maker of industrial laws, he is a colossal failure. Arbitration has not inflicted on the employers of Australia the hardships that it is .alleged to have caused. A perusal of the awards will disclose that they have provided a basic wage, at the most, of about £4 6s. a week for a worker in any industry that may be mentioned. {: .speaker-KZR} ##### Mr White: -- Of course, there is a margin for skill. {: .speaker-KE4} ##### Mr KEANE: -- That basic wage is subject to quarterly adjustments in accordance with variations in certain commodity prices, but those figures are not a real index to the cost of living. Although allowance is made for food, clothing, housing, and a few other items of' expenditure, there is no provision for the expenditure that is incurred in every home, such as medical fees, subscriptions to societies, legal fees, school fees, union fees, insurance premiums, tram and bus fares, and cost of school books, amusements, firewood, gas, coal, and electric light. The basic wage, whether Federal or State, has proved insufficient to cover all the ordinary expenses of the worker. The highest margin allowed for skill is 4s. a day, or 24s. a week, and only one worker in about every 90 .employed under federal awards receives a marginal rate. No award makes provision for sick, holiday, or accident pay. Therefore, this much discussed arbitration has not been the great boon to the workers that the employers continually claim. The present members of the Arbitration Court, who were appointed by the late Government, may have excellent legal qualifications, but they are not fitted to arbitrate on industrial matters. The present Government has decided that the court should be freed from legal entanglements, and, to that end, conciliation committees, which were provided for under the last amending bill, are to be authorized in an improved form under the present measure. They are to be composed of representatives of both employers and employees, who, after all, are the only persons who are familiar with the industrial conditions that will be investigated. .They will he qualified to decide what wage an industry can afford. {: .speaker-KMW} ##### Mr MARR:
PARKES, NEW SOUTH WALES · NAT; UAP from 1931 -- Does the honorable member agree that the power of an industry to pay should be considered by the court? {: .speaker-KE4} ##### Mr KEANE: -- Whether I do or not, that matter has always been taken into consideration, and always will be. It has been claimed by both employers and employees that only by the appointment of conciliation committees can. peace in industry be secured. I admit that the trade union movement has not yet taken advantage of the provision of the appointment of conciliation committees under the last amending bill; but, if the present measure is passed, I believe that it will result in good progress in dealing with the industrial problems of this country. I have always recognized the right of employers to fair consideration. Nevertheless, in this age of improved arbitration, we should adopt new methods, and, if possible, appoint new. men as arbitrators. I say, frankly, that I have no confidence in members of the legal profession. {: .speaker-KZO} ##### Mr Latham: -- I think that if the honorable member consulted me he would trust me. {: .speaker-KE4} ##### Mr KEANE: -- As a legal adviser, yes ; but, if I wished to settle an industrial dispute, the honorable member is about the last man from whom I would seek advice. If I did so, the honorable gentleman would at once say that the men engaged in the dispute were in the wrong, and that something must be done to get them back to work. He would then pro- ceed to do something in accordance with the views of the organizations which assisted to secure his return to this Parliament. Those organizations expect something from him, just as the organizations which sent me here expect something from me. I shall support this bill because I believe that the trade unions favour it, and that it provides for the handling of industrial problems in a practical way by practical men. It appears to me that-the views of the Deputy Leader of the Opposition **(Mr. Latham)** have changed since the previous Arbitration Bill was before us.. On the former occasion he said that there was nothing wrong with the legality of conciliation committees; but he has now changed his opinion. {: .speaker-KZO} ##### Mr Latham: -- I did not discuss the legality of the committees. {: .speaker-KE4} ##### Mr KEANE: -- In my opinion, the honorable member has reversed -his opinion on many aspects of this subject. We should do our best to protect the interests of the workers. It was stated in this House last month that in consequence of variations and cancellations of arbitration awards, the workers of Australia had already lost £24,000,000. I believe that they have lost six times that amount in consequence of the prevailing unemployment. The workers rightly expect this Government to do something to protect their interests, and they are giving the Government every opportunity in this regard. It was indicated in an official statement in the House recently that in the last twelve months there had not been a strike or a hold-up in a single- Australian industry. I believe that if conciliation committees are constituted for all our major industries industrial peace will continue, for legal complications, which do a great deal to foment industrial strife, are not likely to arise. When I need meat I go to a butcher; when I need a haircut I go to a hairdresser. I go to the practical man every time. So, when I want to ensure the smooth working of our industrial machinery, I go to those who should control it, namely, the employers and the employees. Our union lenders have, in most cases, been engaged in this highly specialized work for many years, and are well acquainted with the practical problems of industry. There is no reason why legal gentlemen should interfere in this matter. I do not suggest that it is the ordinary thing for absurd awards to be made; but I assert, without hesitation, that the machinery of courts is clumsy and cumbersome. If disputes could be referred without delay to thoroughly competent representatives of employers and employees, they could, in most cases, be promptly settled. We ought to do everything that we possibly can do to stop the landslide in wage reductions. If a conservative institution like the Bank of England believes that a policy of drastic wage reduction would be calamitous to Australia, surely Labour members of this Parliament are entitled to express the same opinion. I regret that although wages have already been reduced there is no sign of interest on bank overdrafts and advances being reduced, although we have been told that this is a vital part of the rehabilitation plan. Everything was to be reduced, but, as usual, wages have been reduced first. The trade unionists of Australia have every right to expect this Government to take all possible steps to see that wages are not reduced except by constitutional means. Already the arbitration awards governing 36 different groups of workers in the Victorian Railway Department have been cancelled. This is a most serious thing for the workers, who were not given any opportunity to show how overhead and other expenses in the operation of the railways could have been reduced. There was no need for the ruthless sweeping aside of all our wage standards by persons who do not know the "ABO" of railway management. {: .speaker-JSC} ##### Mr Brennan: -- It is only fair to say that the court has not been exercising arbitration powers, but has been imposing compulsory sacrifice. {: .speaker-KMW} ##### Mr Marr: -- That is a nice statement for the Commonwealth Attorney-General to make. {: .speaker-JSC} ##### Mr Brennan: -- It is a fact. {: .speaker-KE4} ##### Mr KEANE: -- It is also a fact that 21,000 persons have been dismissed from the Railway Department of Victoria, although we were told that by reducing wages it would be possible to provide more employment. That argument is just as irrational, to my mind, as the argument that by increasing the hours of work it would be possible to increase employment. The remedy in each case simply aggravates the trouble. How on earth is it possible to provide more work by making the weekly working hours 48 instead of 44? If that can be done, black is not black. *Sitting suspended from 6.15 to 8 p.m.* {: .speaker-KE4} ##### Mr KEANE: -- The use of conciliation committees in lieu of legal arbitrators, is essential, because legal men, having no knowledge of industry, cannot be expected to bc able to settle disputes between employers and employees. I have shown that the Opposition complaint that arbitration has been a burden to industry is not justified. The general result of arbitration has been an inadequate basic wage with some slight margins. Awards have not provided for sickness, injury, or holiday pay. To-day we read that the private banks, which have made a profit of £13,000,000 in nine years, have joined in the wage slash. A court of legal judges has granted their application despite the fact that they have not reduced interest on advances and overdrafts as this House was led to believe they would. A job is done well only when it is handled by men who understand it. An inquiry into the sugar industry should be conducted by sugar experts. Similarly, industrial disputes should be settled by experts - by the representatives of employers and. employees. The object of this bill is to validate sections 33 and 34 which this Parliament believed to be sound when it enacted them, but which the High Court ruled otherwise. The necessity for arbitration policing is greater now than at any time during the last eight or ten years, because men are being driven by economic necessity to work for any rates the employers choose to offer. That is a condition of affairs to which those who are opposed to this bill would like Australia to revert. They 'consider that the suspension of arbitration awards is a corollary of the financial rehabilitation plan. I have no great faith in the arbitration law, but at' least it provides for reasonable rate3 of 'pay and working hours. If the restraint which it 'exercises were removed many employers would revert to the conditions so graphically described by the honorable member for Werriwa **(Mr. Lazzarini)** this afternoon. I too recollect those dark days that preceded the judicial regulation, of industry. The employers are still making large profits. The legal gentlemen on the arbitration bench, before all of whom I have appeared, introduced, in connexion with the recent basic wage case, three considerations entirely new to the procedure of the court. I am not prepared to allow the court to exercise its powers without restraint. The conciliation committees will do a great deal of good; they will eliminate legal jargon and prevent lawyers from meddling in things they do not understand, stringing out/Cases in order to collect big fees, and too often making a shocking mess of the business they have in hand. Lawyers are necessary for the drawing up of wills, but that is about the only purpose for which I would employ them. The Deputy Leader of the Opposition **(Mr. Latham)** and his followers are always stressing the need to reduce the cost of production. This bill is a measure to help the people who supported the Labour party at the polls. Nationalists do not vote for me; I Avas elected by Labour votes, and I intend to state the views of the Labour movement. Although the Arbitration Act has not achieved the success that we hoped of it, it is the only policeman that can to-day protect the workers. Wage slashing is in progress, and the proper functioning of conciliation committees will give to those men in jobs at least the satisfaction of knowing that if a reduction does take place it will be only after an exhaustive hearing by a tribunal on which they, as well as the employers, are represented. I find no fault with the act. When the amending bill was agreed to some months ago, members of the Opposition were agreed that conciliation committees were necessary. The bill is not loaded; it represents the desires of many thousands of registered trade unionists. Moreover, it is in accord with the oft expressed desires of the employers. They have urged that employers and employees should meet at the conference table and discuss their grievances without the doubtful aid of shorthand writers and lawyers. This bill will enable the parties to come together as experts in their ownindustry and settle their differences. The measure should have the support of every member of the Opposition, especially having regard to the audacious attitude of the Senate towards the previous arbitration bill introduced by this Government. 1 am just awakening to the fact that, instead of accepting the Senate's dictation in this matter, we should have referred the issue to a general election. The senators were guilty of political bushranging. A few old gentlemen who had not been before the people for three years had the audacity to reject the legislation of this House, which represented the recent choice of the electors. {: #subdebate-26-0-s5 .speaker-10000} ##### Mr SPEAKER: -- Order! The honorable member is not in order in reflecting on members of the other branch of the legislature. {: .speaker-KE4} ##### Mr KEANE: -- I bow to your ruling, **Mr. Speaker.** The honorable member for Kooyong **(Mr. Latham),** when Leader of the Opposition, agreed that sections 33 and 34 were sound. The honorable member possesses one of the best industrial legal minds in the Commonwealth, and, if his views were right last year, he must, to bo consistent, support the bill. The measure will have my support for the paramount reason that it is wanted by the trade union movement. It is equitable, and will make for amicable relations between employers and employees. {: #subdebate-26-0-s6 .speaker-KFE} ##### Mr GREGORY:
Swan .- If the honorable member for Bendigo **(Mr. Keane)** is so much in favour of conciliation committees as he professes to be, why does he want to retain the Arbitration Court with all its panoply and expense? Why not agree at once to the abolition of the court and allow industrial conditions to bc settled by conciliation committees representative of employers and employees? The natural deduction to be drawn from his attitude is that he desires to get "rid of the Arbitration Court; so do I. After a long observation of its operations, I am convinced that nothing has done more injury to Australia,, created more antagonism between the parties- to industry, and rendered worse service to the community. When the arbitration system was first introduced, people were delighted with the knowledge that in future industrial strife and ill-feeling would be obviated by recourse to a tribunal presided over by a judge, which would decide between the parties. For a time employers and employees alike went confidently before the courts, loyally accepted their decisions, and were well satisfied; but, in the course of time, it became apparent that the party which swore hardest scored most. It was obvious also that a legal president, no matter how learned in the law, might know very little about industrial conditions. Then the tug-o'-war started. Both employers and employees formed organizations, and prepared for the next appeal to the court. Antagonism between the parties increased, and honorable members will recollect that the Scottish commissioners who visited Australia reported that in no country in the world had they seen evidence of such bitterness between employers and employees as existed in Australia. {: .speaker-L07} ##### Mr Lazzarini: -- Who said that? {: .speaker-KFE} ##### Mr GREGORY: -- The honorable, member and his colleagues have done their best to promote class antagonism. One can sec evidence of that every day in the trade union movement. To-day the honorable member declared that the Arbitration Court should take no cognizance of economic conditions. If the value of products decreases, how can the employees get the same share of the proceeds df industry as when prices were high? The worker should get a fair share of. what he produces. But nobody connected with the trade union movement would admit that men should be paid according to the value of their work. All men mu." be brought to the same low level ; no man must rise above his fellows ! That policy cannot possibly be good for a country; indeed, it is resulting disastrously in Australia. Industry is burdened by the high costs of appeals to the Arbitration Court. I say nothing against the State arbitration courts; the States must conduct their affairs as they see fit, but it is ridiculous to maintain a federal system of arbitration by which a judge sitting in Melbourne or Sydney may fix the conditions of industry from Darwin to Hobart, and from Melbourne to Broome. {: .speaker-KWN} ##### Mr Tully: -- The arbitration judges visit Western Australia. {: .speaker-KFE} ##### Mr GREGORY: -- Is it desirable that the Arbitration Court, with all its paraphernalia, should travel all over Australia ? Greater liberty should be allowed in connexion with industry. We cannot ignore the effects of the federal arbitration system, particularly as revealed in connexion with the coal-mining industry. Many years ago the coal-miners had recourse to the Arbitration Court of New South Wales. Later the Federal Arbitration Court was established; so that the coal-miners were able to approach the State Court first and the Commonwealth Court afterwards. That position did not bring peace in industry. When the right honorable .member for North Sydney **(Mr. Hughes)** was Prime Minister, he introduced the Industrial Peace Act, and under its provisions a special board was established to deal with the coal-mining industry. The result was that the employers and the employees put their heads together and the price of coal was increased from lis. -a ton in 1913 to 25s. 6d. a . ton in 1925. There was no peace in industry. A little while ago the manager of a nickel mine in New Caledonia, in an interview, pointed out that at one time, his company used to purchase coal from Australia, but because of the increase in price, and the difficulty of getting supplies owing to strikes, it obtained its coal, and other requirements, from Europe, with the result that Australia lost a trade valued at £500,000 a year. There would have not been such a huge expenditure in connexion with the electricity scheme at Yallourn, Victoria, had it not been for the continual increase in the price of coal. At one time a Premier of South Australia stated that he could save over £100,000 by importing coal from Great Britain for use on the State railways. We have had shipping troubles in the past, but to-day there is little trouble, because of the depression. When times were prosperous shipping strikes were numerous. In 1914 we had a shipping service that we were proud of, but to-day most of our ships are laid up because of high freights and consequent lack of trade. We hear of complaints about the non use of Australian timbers, but it costs three times as much to send timber from Launceston to Adelaide as from Norway to Adelaide. The arbitra tion system has conferred no benefits upon the workers. Increase of wages has brought in its train an increase in the cost of living. Enormous sums have been wrung from the workers by their various union organizations, and I venture to say that they have gained nothing whatever from the arbitration system. This amending bill provides for the establishment of conciliation committees, but that term is misleading because these committees are to be given full power to make an award which will have the force of law. In Canada if there is, or is likely to be, a dispute in industry, the Minister of Labour may appoint three persons as a committee. The duty of that committee is to bring the parties together in an effort to effect some agreement, and any agreement which is arrived at and signed is binding only on the parties concerned. {: .speaker-JSC} ##### Mr Brennan: -- Would the honorable member be satisfied if this Government appointed three persons as a conciliation committee ? {: .speaker-KFE} ##### Mr GREGORY: -- In Canada the committee has no power to make an award, so that the position there is totally different from what it is here. It is deliberately misleading to describe the committee to be established under this legislation as a conciliation committee. For the last fifteen or sixteen years I have watched the working of the arbitration system in Australia, and I consider that it has done more than anything else to injure our industries; it is an expensive piece of legal machinery which has brought about nothing but animosity between employer and employee, and the sooner we get rid of the Arbitration Act the better it will be for Australia as a whole. When speaking on this subject the other night I compared the rate of wages paid on the Australian railways with that paid on the railways of the United States of America. I pointed out that 1,600,000 railway employees in the United States of America were paid an average wage of just over 35s. a day. There, is no arbitration there ; it is all a question of service. Our arbitration system has destroyed any good feeling that previously existed between the employer and the employee, because although the Arbitration Court may increase wages aud improve conditions of labour, the employee, although he receives those benefits, feels that he owes nothing to his employer. Consequently, no good feeling exists between them. While the arbitration system remains we shall never build up the industries of this country. {: #subdebate-26-0-s7 .speaker-009FQ} ##### Mr CURTIN:
Fremantle .- I could understand the opposition to this amending bill were it not for the fact that in substance it seeks to make legal, provisions which this Parliament incorporated in the Arbitration Act less than a year ago. Although in the early stages of the debate last year the Opposition members opposed the form which these conciliation committees were to take, and had serious doubts as to the wisdom of giving them certain powers, the measure finally left this Parliament, not only with the approval of honorable members opposite, but also with an eloquent benediction pronounced upon it by the then Leader of the Opposition. This afternoon that honorable member led us to believe that since last November he had come to the conclusion that these conciliation committees were unnecessary, and that, in effect, their purpose was not only to interfere with the proper functioning of the court, but also to make it possible for the decisions of the court to be evaded. There is a history to this bill. It is most extraordinary that almost every amendment to the Arbitration Act has been made necessary by interpretations placed upon the powers of this Parliament by the High Court. Were it not for the decisions of the High Court made in connexion with the railway case, in which the competency of this Parliament to provide for the establishment of conciliation committees was questioned, there would have been no occasion for this amending bill. I do not propose to argue the merits of arbitration as against non-arbitration. The bill does not seek to destroy the principle of arbitration. It does not impair the capacity of the court to deal with the basic wage or standard hours. Those powers are preserved for the court in the terms of the principal act, and this amending bill in no way infringes upon the important work which the full Arbitration Court is at present discharging. Anybody who imagines that these conciliation committees can be used as a sort of a buffer to protect the workers against further slashes in the basic wage, entirely misapprehends the purpose of the bill. This measure merely attempts - and I am not certain whether it will be successful - a realization of what must now be accepted as the will of this Parliament instead of the will of the Arbitration Court. It is desired to appoint conciliation committees' to deal only with matters in dispute other than the basic wage and standard hours. The honorable member for Swan **(Mr. Gregory)** has suggested that much of the irritation and conflict in connexion with the relations between employers and employees has been caused by the Arbitration Court, and to the extent that that is true, this amending bill provides a means whereby vexatious litigation can at least be minimized. The parties will be brought together. They will be directly representative of the employers and employees and, despite the provision of the bill to which the Deputy Leader of the Opposition referred this afternoon, under which the Governor-General has the power to appoint, the fact remains that the representatives of both sides will necessarily have to participate in the work of the committee, if it is to function reasonably and satisfactorily. No government, and certainly no responsible Minister, would attempt to impose upon the employers in a particular industry, a group of representatives who were entirely alien to their interests, and with no connexion whatever with the industry concerned. It is a travesty upon common sense to assume that any such representation would be tolerated. Both sides to industry will, be brought together, but not in an open court, with legal disputants present ; they will assemble in an ordinary room, as men directly conversant with the industry in which they are engaged. There will 'be no need for witnesses to be summoned by subpoena, or for crossexamination by learned or unlearned counsel. 'All that will be required will be that the representatives themselves must be sufficiently familiar with the circumstances of the industry concerned, and of the dispute, to be able to thresh the matter *ov4* as between one set of bargainers and another. {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- How oau the honorable member say that, when the bill provides for inquiry and investigation in connexion with disputes? This is to be a full inquiry. {: .speaker-009FQ} ##### Mr CURTIN: -- There will be no need to call evidence from all over Australia. It may be that both sides may determine the necessity for calling in some competent authority to advise them. The power is wisely taken to make it possible for the committee to insist upon all avenues of information being opened to them. These committees will function almost identically with the wages boards which have operated in Victoria for many years. It is astonishing to me to see honorable members opposite, who represent Victorian constituencies, failing to recognize the close resemblance between the system contemplated in this amending bill and -the system of the wages boards operating in Victoria. My own experience suggests that there is infinitely more good accomplished of a permanent character, and much more rapid decisions obtained by conciliation committees of this kind, than in the atmosphere of formalism which prevails in a court. The decision of the High Court seems not only to trench on the settled decision of this Parliament, but has the effect of malting the system of arbitration itself unworkable. For years past, during what we may call the prosperous years enjoyed by Australia, honorable members opposite were steadfast upholders of the arbitration system. When economic conditions were favorable, and the competition for labour was so keen that the workers, by direct action, would have been able to win standards of living superior to those granted by the court, honorable members on the other side insisted, time after time, upon the strict observance of the law, and the preservation of tho arbitration system. During the decade between 1919 and 1929, they always insisted that the trade unions should respect the court, and that there should be no attempt to regulate industrial conditions other than through the court. All through those years the Arbitration Court functioned on the old " Harvester " formula. The capacity of industry to pay high wages was a factor never taken into account by the presiding judge. In no instance was any other factor taken into account than the cost of living, and on that niggardly basis, during all those years of prosperity, the workers' standard of living was fixed. {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- Then why did the basic wage vary so much? {: .speaker-009FQ} ##### Mr CURTIN: -- It did not vary; the only variation was in the margin for skill, and the seeming variations in the basic wage were due to fixing varying periods of computation. In some cases, the adjustments were made on a quarterly basis, and in others on an annual basis. All the time, however, the Arbitration Court sought to fix the basic wage on the 1907 basis of 7s. a day, with such adjustments as were required by variations in the cost of living. All the dissatisfaction among trade unionists was due to the fact that, while every other section of the community was enjoying unprecedented prosperity, while palatial buildings were being erected in every city, while the dividends of industrial corporations and of banks were each year becoming higher, they themselves and their families could look forward to nothing more than a. basic wage fixed in accordance with the 1907 standards. If they gained anything at all over and above that standard it was because they were able to establish margins in respect of skill and other considerations. It would be possible to quote numerous authorities to show that when honorable members opposite were upholding the Arbitration Court, and insisting upon the observance of 'its awards, the employers refused to confer with the unions, telling them,, when they applied for improved conditions, to go to the Arbitration Court. The workers were tied to the Arbitration Court, and honorable members opposite fought the 1925 election on the principle of arbitration, and the inviolability of its awards. They attempted to establish the principle that no improvement of working conditions could be obtained except through the court. Now, when conditions are reversed, and when the court might be used as a check upon the downward drift of the workers' standard of living, honorable members speak of it as a restriction on the free operation of industry. They say that it is imperative that industry should have the shackles removed. {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- Hear, bear ! . {: .speaker-009FQ} ##### Mr CURTIN: -- The honorable member is at least consistent in this: he has been always opposed to arbitration. The logical thing, however, for honorable members who think as he does, is to advocate that the Arbitration Act be repealed altogether. So long as it is on the statute-book, it is only reasonable that we should try to make it an efficient and serviceable instrument for the equitable adjustment of relations between employers and employees. {: .speaker-KXT} ##### Mr Paterson: -- Will the honorable member help to repeal the act? {: .speaker-009FQ} ##### Mr CURTIN: -- No. I would certainly not help honorable members opposite to repeal the act, and throw the workers to the "wolves by introducing an era of merciless competition. {: .speaker-KZO} ##### Mr Latham: -- The honorable member is talking nonsense. The only effect would be that the States would handle the work, instead of the Commonwealth. {: .speaker-009FQ} ##### Mr CURTIN: -- The honorable member and his party tried less than two years ago, to convince the country of that, and the country refused to accept their reading of the situation. {: .speaker-KZO} ##### Mr Latham: -- Because of misrepresentation of the honorable member and others opposite.' {: .speaker-009FQ} ##### Mr CURTIN: -- Not at all. The truth is, of course, that honorable members opposite were eager that this 'economic depression, which was then obviously approaching, should be used by the employers as an excuse for reducing rates of pay, and varying' industrial conditions, without any restraint whatever. {: .speaker-KZO} ##### Mr Latham: -- That is absolute nonsense. There is no foundation for that statement, and the honorable member knows it. {: .speaker-009FQ} ##### Mr CURTIN: -- There is foundation for it. In Queensland, already, we have seen put into operation on a small scale what would have happened all over Australia had members opposite had their way in 1929. {: .speaker-KZO} ##### Mr Latham: -- Men are getting work in Queensland. {: .speaker-009FQ} ##### Mr CURTIN: -- Yes, because there is an unemployment insurance scheme in operation there. There is more work available in Queensland than in the other States because, for the best part of ten years, Queensland^ was being prepared for the present economic depression, while the Governments of the other States were pursuing their wild career without any statesmanlike guidance. whatever. The conciliation committees provided in the amending bill of last year were empowered to adopt any one of three courses when dealing with industrial disputes. First, the parties might register an agreement which, upon being certified and filed in the court, bound the parties to it, and had the force of an award of the court. Under this arrangement, the two parties to the dispute met without any oversight by any one possessing judicial authority. Representatives of the industry, who were conversant with its needs, met in conference, and arrived at an agreement which, upon being registered, had the effect of an award of the court. Secondly, the committee, or a majority thereof, might recommend to the court the terms of a proposed award. That is to say, at any stage it would be within the power of a conciliation committee to recommend to the court the terms in which the court might make an . award. The third power vested in the committees was that they might refer a dispute back to the court without a recommendation. This could be done in all cases in which there was a failure to get a majority decision because of the members of the committee voting on class lines. In those provisions we have a replica of the system under which the Victorian wages boards operate. Honorable members opposite object to what I describe as the consultative rights of the representatives of the unions to participate with the representatives of the employers in an attempt to fix for their own industry, or a part of it, the conditions under which the industry shall be conducted. {: .speaker-KZR} ##### Mr White: -- But that is done daily through the Chamber of Manufactures. {: .speaker-009FQ} ##### Mr CURTIN: -- If the honorable member is satisfied that the practice is followed daily, how comes it that he is against the proposal to incorporate in the Arbitration Act a provision which would enable an agreement so reached to be certified and registered, to give it the force of law? {: .speaker-KZR} ##### Mr White: -- Because that would be duplication. {: .speaker-009FQ} ##### Mr CURTIN: -- It would not. The agreements which the honorable member has in mind are binding only so long as both sides respect .them, and they may be broken the day after they are made. There is no way of enforcing such agreements. {: .speaker-KZR} ##### Mr White: -- They can .be registered. {: .speaker-009FQ} ##### Mr CURTIN: -- Not unless a provision to that effect is inserted in the act. {: .speaker-KZO} ##### Mr Latham: -- Of course they can. If the honorable member will read section 24 of the original act, he will see that such power exists. {: .speaker-009FQ} ##### Mr CURTIN: -- That section was never invoked while the party opposite was in power. The honorable member for Kooyong **(Mr. Latham)** was Attorney-General for a number of years, and never once did he appoint a conciliation committee which could enter into agreements such as the honorable member for Balaclava **(Mr. White)** has referred to. {: .speaker-KZO} ##### Mr Latham: -- That was because I required that there should be an application made before a committee was appointed, and trade union representatives were, for political purposes, entirely opposed to the provision. They told me so themselves. {: .speaker-009FQ} ##### Mr CURTIN: -- The honorable member must know very well that if the powers conferred in the previous act were adequate, no request would have been made to this Government to bring down proposals such as those now set forth in the bill. {: .speaker-KZO} ##### Mr Latham: -- I do not know that at all. {: .speaker-009FQ} ##### Mr CURTIN: -- These proposals were approved by the Deputy Leader of the Opposition himself, when last year's bill was passed .through this House. Were it not for the fact that the High Court declared section 33, and the greater part of section 44, to be invalid, the Government would have no need to bring this amending bill before the House now. Are we to permit the High Court, by majority decision, to defeat the wishes of Parliament, especially when we bear in mind that the majority decisions of the. High Court are not always right? {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- The decision was reached by a four-to'-on© majority. {: .speaker-009FQ} ##### Mr CURTIN: -- That does not matter. At least one member of the High Court bench - the most competent body to advise the Government- declared that the sections were valid ; and the fact that four other judges declared them to be invalid, affects the law, it" is true, but those four judges may reverse their decision before twelve months have elapsed. It would not be the first time that the court had done so. There is no finality regarding High Court decisions on industrial matters defined in our Constitution. I ask the House to. pass the second reading of this amending bill. It is true that, during this period of difficulty, the probability is that the Arbitration Court will continue to reduce wages. It will do so because it has been attracted to the philosophy .that the way to meet a period of adversity is to give the workers- less. As one writer has put it, during a time of adversity any crime can be committed against the poor, and the test of its effectiveness is the extent to which they may be bluffed into accepting it. In this period of economic difficulty, if we are to avoid the experiences of the 'nineties, we must provide machinery that will at least put some check upon those who would take advantage of the fact that the workers are subjected to particularly severe competition. With 300,000 persons out of work, it will be impossible for the trade unionists, through their organizations, or as individuals, to effectively resist the attack upon their standards of living. If honorable members opposite believe that cheapness is the remedy for the present industrial problem, and that the lower the wages fall the more unemployed will be given work, let "them consider what has happened in Australia during the last year. In proportion as wages have fallen, the number of unemployed has increased, and that has been the experience . of every country. Only by increasing the demand for goods is it possible for all workers to be absorbed in industry. I am astonished that this Parliament which, as late as last November, accepted the principles and also the form of this amending hill, should hesitate now to confirm what it did on that occasion. I refuse to allow the High Court to determine whether or not this Parliament shall give Australia a form of arbitration which the Parliament believes to be wise. Having our powers to some extent disturbed by the judicial authority of the High Court, we are entitled to seek to overcome what is regarded as an illegality. {: #subdebate-26-0-s8 .speaker-KXQ} ##### Mr ARCHDALE PARKHILL:
Warringah -- Before dealing with the clauses of the bill, I propose to make some observations regarding utterances by the members of the Labour party who have already spoken on this measure. It will be remembered that the matter raised by this bill was a subject of supreme importance at the last election; in fact it was the main issue on which the election was fought. The Labour party did not seek a detailed mandate;' it asked for and obtained permission to remove from arbitration the legal entanglements with which it was said to be surrounded. .But that did not give the party opposite the right to take from the judges of the courts' the powers that they now exercise, and to surround the conciliation committees with all the legal entanglements that it, presumably, desires to remove. It admitted, when the bill came back from the conference of managers held last year, that the principle of arbitration, for which it had a mandate, was definitely established in the measure, which it then accepted. Now, because the Arbitration Court has given a certain decision, the Government, at this most inopportune time, asks for authority to take from the court all the powers which it now possesses, and to give them to the conciliation committees. I do not intend to refer to the speech delivered by the honorable member for Werriwa **(Mr. Lazzarini)** except to say that it was a tirade of abuse against capitalism and employers. The honorable member dug up the age-worn and motheaten slogans with which Labour agitators and soap-box orators have tickled the ears of electors for the last quarter of a century, and which have not the slightest application to present day conditions. He went on to refer to perjurers giving evidence before the court. It is easy for him, in his coward's castle, to refer to decent citizens as perjurers; but his statements do not do him credit. The most impressive aspect of the speech of the honorable member for Bendigo **(Mr. Keane)** was its clumsiness, and the reckless way in which he handled what he claimed to be the facts of the situation. He' said that the Transport Workers Act had put out of employment some 11,000 unionists, most of whom were returned soldiers. That statement is entirely inaccurate. The honorable member does not seem to realize that such maritime industries as have not been destroyed under the tariff policy of the present Government are still being carried on. If, as the honorable member claimed, 21,000 men have been dismissed from the State railways owing to the operation of industrial laws, it clearly shows that they were superfluous. As every one knows, the railway systems of this country are being conducted as usual. There has been no appreciable reduction of the services rendered, yet the honorable member has the temerity to say that they are being conducted with 21,000 fewer men than were recently employed. Was there ever such an indictment of our railway systems than to say that before the Labour party came into power, and put the present Arbitration Act into operation, the railway systems of Australia had superimposed on them 21,000 men whose services to:day are not required, although a full service is being provided? Either it is not true that so many railway men have lost their employment, or employment had been given to 21,000 more men than were needed for the economic conduct of the railways. Similarly illogical reasoning was apparent in all the arguments advanced by the honorable member. If there was any justification for the advocacy of this bill by the honorable member for Fremantle **(Mr. Curtin),** it was his statement that the conciliation committees would not be encumbered by barristers and others who he alleges delay the proceedings of the court, because the committees would be composed of practical men who would deal with industrial matters without the "entangling legalisms" - to use a phrase coined by the Labour party - that have for so long handicapped our arbitration system. Under the act passed at the instance of the Attorney-General **(Mr. Brennan),** the duties and powers of the conciliation committees are clearly set out, but we are told that the committees have been unable to operate, because there is no provision for inquiring into and investigating a dispute. Section 23 provides that the court "shall, in such manner as it thinks fit, carefully and expeditiously hear, inquire into, and investigate every industrial dispute" and that proposal was supported by the honorable member for Fremantle. So the court had all the familiar legal paraphernalia. It had the power to call witnesses, and was surrounded by all the legal entanglements so objectionable to the Government. But, on examining the bill before the House, and the powers with which it i3 now proposed to clothe the conciliation committees, I find that they are " to hear, inquire into, and investigate the industrial dispute ". Those are the identical words employed in the present act. What is the use of the honorable member for Fremantle saying that the proceedings before the conciliation committees will be simple, and that they will be free from the customary paraphernalia of a court? {: .speaker-JSC} ##### Mr Brennan: -- We had to invest them with these powers, in order to enable them to act as conciliation commissioners. {: .speaker-KXQ} ##### Mr ARCHDALE PARKHILL: -- Of course I realize that. My whole argument is that the Government is seeking to give to the conciliation committees the same powers which our arbitration courts at present exercise. It is for this very reason that the arguments of the honorable member for Fremantle are misleading. The passage of this bill is not likely to remove the legal paraphernalia from our arbitration system. Why is the Government seeking to take this power from the judges of the courts? It cannot be because the judges are overworked. On the 15th July -the Deputy Leader of the Opposition **(Mr. Latham)** asked the Attorney-General **(Mr. Brennan)** the " following question : - >On how many days since 1st February last have (a) the Full Court of the Commonwealth Arbitration Court, and (6) single judges of that court, sat for the hearing of matters? The reply was as follows: - >Since 1st February last , the sittings of the Commonwealth Court of Conciliation and Arbitration are as follow: - Full Court, 44 days; court constituted by a single judge, 47 days. During those 44 days the Full Court wasengaged on the basic wage inquiry, which it was asked to make by this Government. Had it not been for that case the judges would have been out of work for the whole 22 weeks except for the 47 days on which courts constituted of one judge were sitting. If the powers now proposed to be invested in conciliation committees are taken away from the judges of the court, they will have still less to do. These gentlemen have been appointed for life at the request of the trade unions of this country. If the Government were honest it would say, " The object of this bill is. to take away from the judges of the Arbitration Court all the power they now possess, and leave them free for the rest of their natural lives." That would be the real effect of the measure if it were passed. Some honorable members opposite havestated that I am opposed to industrial arbitration, but that is not true. I realize that the workers of this country are just as entitled to combine for their own protection as the employers are entitled to» combine for their protection. I have always considered that some form of arbitration was necessary to protect fairminded employers from their more rapacious brethren. There are rapacious people in every walk of life. I also believe that a simple form of arbitration should be provided for the settlement of industrial problems as between employers and employees. But I am entirely opposed to the vesting of all our arbitration power in conciliation committees. Judicial power should be exercised by judicial bodies. It would be pernicious for us to accept the proposals of the Government in this connexion. A lot of nonsense has been recently talked by some honorable members opposite, who have alleged that our arbitration machinery is being used to destroy the basic wage and the wage standards generally of this country. Such statements are ridiculous. We are simply facing facts. The position to-day is that the business of this country is not paying, and it is necessary for us to take steps to make it pay. If the honorable member for Fremantle **(Mr. Curtin)** had a business which was not paying, he would not set to work to increase his outgoings, but would do his best to limit them. That is true also of other honorable members opposite. Yet these gentlemen are making a big noise because an effort is being made to reduce the outgoings of the Government because its expenditure is altogether out of proportion to its revenue. Honorable members opposite are not prepared to go to their constituents and tell them that an effort is being made to-day to create an aristocracy of Labour. The AttorneyGeneral is laughing; but he knows perfectly well that very high wages are being provided for a limited number of workers in sheltered industries in Australia at the expense of 300,000 other workers who are unable to obtain employment at any wage and are being forced to live on the dole. Is this a fair thing? I cannot understand why the Government should have introduced this bill at this stage. The country is in great financial difficulty and there is no possibility of maintaining our present highwage standards. I can only assume that the bill has been brought down because pressure from outside has been brought to bear upon the Government. I really believe that the Ministry is acting against its better judgment. Another objection I have to the measure is that it is proposed in clause 6 to amend section 38 n of the principal act with the object of preventing the court from cancelling or setting aside an award except through default or breach of it by an organization or a substantial number of its members. {: .speaker-KE4} ##### Mr Keane: -- "What is wrong with that provision ? **Mr. ARCHDALE** PARKHILL.Many things. In the first place if it is agreed to it will prevent the court from paying any consideration to the economic condition of the country or of different industries. I have no doubt that the main object of this provision is to preclude the court from again acting as it did in connexion with the railway awards. If the clause becomes law the court will have no power to cancel or set aside an award except when such action is justified by some overt act or default on the part of an organization or its members. It would not be able to act even if the country were suffering from the most severe economic difficulties. I object to the measure mainly because it reeks with politics, hut also because it has been introduced at a most inopportune time. Our industries are to-day in a disorganized state, and the Government would be far better occupied in introducing other measures for the rehabilitation of our finances than in throwing another bone of contention into the public arena. If this bill became law various sections of the workers and employers would again be engaged in greatly increased industrial strife. {: #subdebate-26-0-s9 .speaker-KVU} ##### Mr THOMPSON:
New England -- As the honorable member for -Warringah **(Mr. Parkhill)** has just said, the Government has again chosen a most inopportune time to dabble in arbitration amendment bills. With many economic problems pressing heavily upon us, with unemployment .growing throughout the country, and with our general political unrest extending, I think that the whole of our time should be devoted to the consideration of more urgent matters. I admit, however, that if there is one subject in respect to which this Government has the right to introduce legislation it is arbitration. We on this side of the House know that the last election campaign was fought on the issue of the maintenance and the improvement of our system of industrial arbitration. The policy speech of the leader of the Labour party in that campaign made it very clear that if the Labour party were returned to power it would introduce measures to strengthen the conciliation branch of our arbitration legislation, with the object of freeing it from the so-called entangling legalisms - I think that was his phrase - which surround it. On that policy the Labour party won a sweeping victory. Its opponents were not only defeated, but routed. The Labour party came back pledged to maintain the federal arbitration system, and with a mandate to carry out the policy for improving the system, which had been placed before the country by the Prime Minister, as Leader of the Labour party. "When the amending Arbitration Bill was brought before the House members of the Opposition unanimously recognized that mandate. It was the one feature of the Government's policy which we could not conscientiously repudiate or ignore, and the second reading was agreed to without a division. Certain objections to details were taken in committee, but the principal features of the measure were approved by all parties. I agree with the honorable member for Warringah that the present is not an opportune time for introducing the vexed question of arbitration into the politics of the country. But the Government is within its rights in introducing this measure if it thinks fit. We are entitled to examine the merits of the bill, but not to oppose it merely because it is an arbitration measure introduced by the Government. What are the merits of the bill? According to the honorable member for Warringah they are very few. But he is in an anomalous position in having to vote in support of his own views, when he is for the moment a political bedfellow of the honorable member for Werriwa **(Mr. Lazzarini).** I do not know whether the honorable member for Werriwa will consistently stand up to the speech he delivered this afternoon, but any man with a spark of political decency in him, who denounced the bill and the Government as he did, should have the honesty to vote against the measure. The objections stated by the honorable member for Warringah are worthy of examination. That which appealed to me most was that if these conciliation committees are vested with the full powers at present possessed by the Arbitration Court there will be no work for the federal industrial judges. {: .speaker-KMU} ##### Mr Marks: -- That is the main point. {: .speaker-KVU} ##### Mr THOMPSON: -- It is the only one made by the honorable member for Warringah that impressed me. At a time when the Government is economizing right and left, to give the Arbitration Court a light job doing practically nothing would be indefensible. {: .speaker-JSC} ##### Mr Brennan: -- That is not contemplated. {: .speaker-KVU} ##### Mr THOMPSON: -- I do not think for a moment that it is. The Government must recognize that in the present temper of the country such a state of affairs would not be tolerated; if I thought that the effect of this measure would be to give three or four industrial judges a lifelong holiday I would have no alternative but to vote against it. But I think there will be plenty of work for the judges to do in their industrial and other jurisdictions. Therefore, I put that criticism aside. Another objection by the honorable member for Warringah was that the conciliation committees would have all the trappings and appurtenances of a proper legal court. I understand from the speech of the Attorney-General, and the general attitude of the ministerial party, that that is not intended. The Government's idea is to make the conciliation committees as free as possible of legal trappings, and in view of the mandate which the Government has, we must accept that assurance rather than take the risk, of opposing the Government's main policy, which is to place federal arbitration on an improved and more efficient basis. The honorable member for Warringah stated -as a fatal objection to the bill. that it is in an attempt to go behind the judges of the Federal Arbitration Court. That objection is not valid, because, after all, the judges are not the masters of the country. The Federal Parliament is the final authority. The Arbitration Court is not the High Court ; it has no power to interpret the Constitution. The functions of arbitration judges are wholly and solely industrial, and any determinations they make in regard to industrial problems are surely subject to the consideration of this Parliament. If it determines that it will experiment in a direction opposite to the judgment or wishes of those gentlemen, it has every right to do so. Conciliation is essentially part of the policy on which the Government won to power at the. last general election, and for tactical reasons, if for no others, members of the Opposition, are bound to afford to the Government every chance to translate its policy into action. If that policy proves a failure, we shall have the right to point that out to the people at the next election, and if we are given a mandate we shall be able easily to abolish the conciliation committees or improve them in any direction we see fit. After all, this Parliament is supreme, and has the final word. If the Government is making the mistake of vesting in these committees too much power and taking too much from the judges, that error can operate for only a short time, because within the next twelve months we shall have an opportunity to state our views' to the people, and if they think we have proved our case, all the the Government is now doing can be undone. I very much approve of the principle of conciliation as opposed to legal arbitration. I assume that the committees which the Government proposes to set up, will be free of that legal atmosphere of which the honorable member for Warringah is so much afraid. It would be a great pity if the lawyers got a stranglehold on them. I know the value of conciliation in .some industries, particularly printing. That industry has never been governed by an award of the Arbitration Court. It has always been governed by agreements arrived at by conciliation and subsequently registered by the court. {: .speaker-KZR} ##### Mr White: -- Under section 24; therefore there is no need for the proposed conciliation committees. {: .speaker-KVU} ##### Mr THOMPSON: -- For years that system of conciliation agreements has been in operation, and the printing industry desires it to continue. Whether these conciliation committees will introduce new elements totally different from those to which the printing industry is accustomed, experience alone will prove, but I take it for granted that the Government's desire is to make the committees a genuine instrument of arbitration on the basis of round table conferences between employers and employees. The great merit I see in this proposal, as opposed to the submission of sectional disputes to the Arbitration Court, is that the industry concerned can be dealt with by men who are experts in it, or who are closely associated with it. That is the fundamental merit of conciliation as opposed to the ordinary legal industrial arbitration. What does a judge know of the printing industry, or railway work, or butchering? He can only form a judgment on the evidence before him, and the opinions of experts, but in a conciliation system the elect of the industry gather about a conference table. The workers are represented by men in whom they have confidence, who have had long association with the industry. Employers may choose representatives noted for their reliability and knowledge of the industry. Under the Government's proposals, if the representatives of the parties fail to agree, the chairman, who is to be an independent person appointed by the Government, will have the right to give an award. The margin of disagreement between the parties may be very, small, but there must be finality in arbitration as in everything else. If we do not pro' vide machinery for ending a deadlock, we shall get nowhere. To what extent would Parliament be able to function if it lacked machinery for the ending of deadlocks? It is quite possible that two parties to a hearing before a conciliation committee would be unable to agree on some vital issue. If all the time and money expended at the conference were to be wasted' by referring the matter to the Arbitration Court, what would be the use of the conciliation machinery? The case might as well have gone to the court in the first instance. One of the fatal defects of the original conciliation schemes in New South Wales, and other States, was the absence of machinery for final determinations. Lacking that, the people considered that the best thing to do was to brush aside the intervening conciliation tribunals and have straight-out judicial arbitration. We are now getting back to conciliation. In normal times the arbitration court is overloaded. One of the cries at the last federal election was due to the fact that the Federal . Arbitration Court could not handle the work that was crowding upon it. That position does not exist to-day, but it may come about later. In this bill we overcome that difficulty. We bring the machinery for arbitration closer to the employers and employees. If we are to give them any machinery at all, it must be effective. Unless we appoint a chairman who has the power to make an award in the event of no agreement being come to between the parties to a particular dispute, these conciliation committees will effect no good purpose; there must be some court of appeal. I understand - although it is not stated in the hill - that in the Principal Act there is the right of appeal to the Federal Arbitration Court. {: .speaker-JZK} ##### Mr Coleman: -- There are ample safeguards. {: .speaker-KVU} ##### Mr THOMPSON: -- That is so. It is not likely that the chairman would, in the majority of cases, need to exercise his power to make an award. For the last fifteen years no award has been made in the printing industry. It will be only in exceptional cases that the chairman will need to go over the heads of the other members of the committee and make an award. In the event of a "further dispute, appeal will be made to the Federal Arbitration Court. This system of conciliation is well worth trying. A judgment of the High Court undoubtedly destroyed the value of the Government's proposals and, as it did get a mandate at the last election to establish some form of conciliation, and to try to improve the arbitration system, I consider 'that it is justified in introducing this bill to validate the previous measure, and to carry out what is a new experiment so far as Australia is concerned, in the hope that we may approach somewhere near the ideal system of bringing the employer and employee amicably together - a system, about which we have heard so much during the last ten or fifteen years. It is unnecessary for me at this stage to speak of the general subject of arbitration. I am sorry that certain members on this side of the House, and particularly in this corner, have intimated that they are opposed to compulsory arbitration. I do not think that we can institute any other system of arbitration. {: .speaker-KEQ} ##### Mr Killen: -- -How do other countries, with the exception of New Zealand, get on without such a system? {: .speaker-KVU} ##### Mr THOMPSON: -- The honorable member has given his personal view, but he is not speaking for the Country party as a whole. That party has not, since the last federal election, determined its attitude for or against arbitration. {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- The honorable members for Richmond **(Mr. R. Green),** Forrest **(Mr. Prowse),** and Swan **(Mr. Gregory)** have expressed views similar to that of the honorable member for Riverina **(Mr. Killen).** {: .speaker-KVU} ##### Mr THOMPSON: -- They have given their own personal views. Even the honorable member for Warringah **(Mr. Parkhill)** has said that he in favour of arbitration, and I presume that he was speaking for himself and not for his party. The arbitration policy of the Country party has not been altered since the last federal election. This measure should receive the support of honorable members on this side of the House. We cannot say at this stage what effect it will have upon industry. The system must ^ be thoroughly tried before we can condemn it. I urge honorable members on this side of the House who supported the Government last year when the previous measure was introduced, not to go back on their tracks by opposing this measure. {: #subdebate-26-0-s10 .speaker-KJQ} ##### Mr JAMES:
Hunter -- I am unable to support this measure, because last year when I sat behind the Government I crossed the floor of the House and voted against the previous measure, because I considered that if certain amendments proposed by another place were accepted by the Government, the bill would be spoilt altogether.. However, the Government was prepared to accept them, and -they were incorporated in the bill without consulting the wishes of caucus and against the wishes of five honorable members, myself included. While this amending bill is a slight improvement upon that measure, still it does not come up to the expectations of the workers, whom the Government is supposed to represent. I have listened with interest to the arguments of honorable members on both sides of the House, particularly those of the Attorney-General **(Mr. Brennan).** It was particularly interesting to hear the views of honorable members who recently helped this Government to reduce the wages of public servants, the old-age and invalid pensions, and the maternity allowance,' in. that process totally disregarding the principle of arbitration. At the last election we on this side attacked the Bruce-Page Government for endeavouring to retreat from the field of federal arbitration. At that time **Mr. Bruce,** the then Prime Minister, was prepared to substitute for arbitration, round-table conferences, and although we were not opposed to round- table conferences, yet we considered that the interests of the workers should be safeguarded in the event of. such conferences failing, by haying arbitration to fall back on. Yet the recent reduction in wages and pensions was brought about without even **Mr. Bruce's** idea of negotiation, and was supported by ' all honorable members with the exception of those in this corner and a few of the members of the Government, who were prepared to give effect loyally to their pledge to the people that at all costs they would stand for the maintenance of a decent standard of living for the Australian! working people. The honorable member for Warringah **(Mr. Parkhill),** who spoke in defence of the wharf labourers of Dee Why and the proletarians of Palm Beach, is one of those political pole-cats which go about emitting obnoxious political odours. {: #subdebate-26-0-s11 .speaker-KLL} ##### Mr SPEAKER (Hon Norman Makin: -- The honorable member for Hunter is not in order in referring to another honorable member in those terms. {: .speaker-KJQ} ##### Mr JAMES: -- Thehonorable member for Warringah objects to the bill because of the proposal to transfer the functions of the Arbitration Court judges to conciliation committees. But that proposal, I consider, has much to commend it. Why should that power not be given to conciliation committees, whose members have had actual experience in the industry in which a particular dispute has arisen?, The Arbitration Court judges who were appointed by the Bruce-Page Government - Judge Lukin, an old-age pensioner from Queensland, and Judge Drake-Brockman- know nothing of the conditions of the working classes. I do not suppose that they ever realized which was the business end of the shovel, let alone picked up one. I assume that they would almost rather pick up a death adder than a tool of trade. This amending bill does not come up to the expectations of the workers. While it may be an improvement on the previous measure, yet I cannot support it unless the Government is prepared to amend section 31a of the original act, which in its present form would permit the employers to appeal from any decision of the concilia tion committee to an Arbitration Court judge. That section reads - {: type="1" start="1"} 0. An appeal shall lie to the court constituted by the Chief Judge and not less than two other Judges against any provision in any award or order of a conciliation commissioner or a conciliation committee affecting - {: type="a" start="a"} 0. wages; 1. hours; 2. any condition of employment which in the opinion of the court is likely to affect the public interest. 1. Any such appeal shall be made in. the manner and within the time prescribed by the rules made in accordance with section fortythree of this act. 2. On the hearing of an appeal under this section the court may - {: type="a" start="a"} 0. take fresh evidence; 1. confirm, quash or vary the award or order or part thereof which is under appeal; 2. refer the award or order, or any part thereof, back to the conciliation commissioner or conciliation committee, as the ease may be, for reconsideration, and with or without such directions or suggestions as the court thinks fit.; or 3. make an award or order dealing with the matters under appeal. Provided that no such award or order shall' include any provision which would be outside the powers of the conciliation commissioner or conciliation committee, as the case may be.. {: type="1" start="4"} 0. An award or order of a conciliation commissioner or a conciliation committee shall not, except by consent of all the parties, have effect after the expiration of twenty-one days from the making thereof. {: .speaker-K0A} ##### Mr Gabb: -- What is wrong with that? {: .speaker-KJQ} ##### Mr JAMES: -- It provides that fresh evidence may be taken on appeal, so that if an employer is dissatisfied with the decision of a conciliation commissioner, or if it does not accord with his idea of fairness, he may appeal to the court and get it quashed and a fresh award substituted. While that section remains in the act the amendments now proposed will not he worth "tuppence." If the Attorney-General is prepared to bring up a fresh measure eliminating that section, I shall give it my support. {: .speaker-KZR} ##### Mr WHITE:
BALACLAVA, VICTORIA · NAT; UAP from 1931; LP from 1944 -- The question which we have to decide is whether this bill is a serious attempt to make the Arbitration Act more workable, or whether it is merely a gesture to organized labour by the Attorney-General on behalf of the Labour party. If this much patched and unworkable act is to be still further amended; if this thing of shreds and tatters is to be further amended or altered, it certainly will be unrecognized by those who designed the garment. Originally the Arbitration Court was intended to deal with only major interstate issues; but gradually it was drawn into the settlement of pettifogging industrial disputes, in which various sections of the trade union movement were concerned, with the result that this idealistic measure for the control of industry has become the football of party politics and the plaything of organized trade unions. When the previous bill was under discussion, I strenuously opposed those provisions relating to the appointment of conciliation commissioners, and honorable members will remember the compromise that was accepted. The Government agreed to delete the provision relating to preference to unionists, and honorable members on this side agreed to the appointment of conciliation commissioners. The only opponents were the honorable member for Fawkner **(Mr. Maxwell)** and myself, in addition to the group to which the honorable member for Hunter **(Mr. James)** belongs. Their reasons for opposition, I should add, were not ours. {: .speaker-L07} ##### Mr Lazzarini: -- The honorable member for Adelaide **(Mr. Yates)** also opposed it. {: #subdebate-26-0-s12 .speaker-KZR} ##### Mr WHITE: -- That is so, but I always look upon that honorable member as belonging to the corner group. We believed that the amending legislation would be unworkable, because the idea underlying the appointment of conciliation committees, was to push Arbitration Court judges aside; that in effect the commissioners should function as' Arbitration Court judges. That proposal proving ineffective as the result of the High Court decision, the AttorneyGeneral now wishes to give these committees more power. The honorable member for Bendigo **(Mr. Keane)** repeating his well known statement, that if you want to get meat you go to a butcher, suggests to us that if we want to get efficient tribunals for the settlement of industrial disputes we must adopt this Government's proposal, and in reply to my interjection, he said that the people he had in mind were the employers and employees. I invite the honorable member to read the latest issue of the Victorian Chamber of Manufactures *Gazette,* which publishes the opinion of members of that chamber who have always taken a temperate view of industrial matters. The article is headed - {: .page-start } page 4170 {:#debate-27} ### ARBITRATION BILL Superseding the Judges. *Government's Further Attempt.* Another endeavour has been made by the Labour party to have the judges of the Commonwealth Arbitration Court supplanted to a large extent by lay arbitrators. . . . When the amending Commonwealth Conciliation and Arbitration Bill was under consideration by the Federal Parliament last August, it contained provisions which aimed at ousting the jurisdiction of the court in respect of all matters except the fixing of a basic wage and standard hours, as well as the interpretation of awards, and determination of penalties. The making of awards outside the basic wage, and standard hours, was to be placed in the hands of conciliation committees with conciliation commissioners. Employers all over the Commonwealth strongly opposed the proposal to transfer the work of making awards from independent and learned judges to conciliation commissioners who might be biassed, and incompetent Labour officials. In a spirit of compromise, the Nationalist party accepted the principle of conciliation committees and commissioners being authorized to make awards on securing the right of dissidence against an award to appeal to the judges of the court in regard to any section of it. . . . In due course one commissioner was appointed and several conciliation committees were formed at the instance of the acting Attorney-General of the time **(Senator Daly),** and not because employers wanted them. As a matter of fact, none of the committees actually functioned, as although committees appointed in the railways and pastoralist industries held meetings, their operations were cut short because of a majority judgment of the High Court declaring that certain powers assumed to have been conferred on them were invalid. The committees, it was held, could not settle disputes in the manner prescribed by the act, and the complete authority of the Arbitration Court as to the making or varying of awards remained, as in the previous act, with the judges. Last year 36 delegates representing Labour organizations throughout the Commonwealth assembled in Canberra, and at a meeting at the Hotel Canberra, where the attendance of the Attorney-General was demanded, agreed to certain proposals. These were submitted to the Government, and, in the following week, were presented in the form of an amending conciliation and arbitration bill, containing a number of iniquitous clauses, which, fortunately, the Senate rejected with some few exceptions. The article continues - >Tlie Ministry is not to be trusted. It has to dance to the tunc set by the Trades Hall Council and the caucus. If these dictators demand the appointment of extremists as conciliation commissioners, it will have to be done. It is just as well to keep in mind what has happened in New South Wales recently. In that State, **Mr. E.** C. McGrath, secretary of the Printing Industry Employees Union, has been appointed Deputy Industrial Commissioner. . . . Vacancies on industrial committees had been tilled by the appointment of two of the " red " section, **Mr. J.** Hooke, president of the Sydney Labour Council, and **Mr. S.** Bird, formerly general secretary of the State Labour party. It is apparent from these comments that the employers do not approve of the appointment of conciliation committees. They know only too well to what extent industry has been hampered ever since the establishment of the Arbitration Court which has been used so often for the creation of .disputes. {: #debate-27-s0 .speaker-KZR} ##### Mr WHITE: -- In prosperous years industry was able to pay the high rate of wages ordered by the Arbitration Court, although, in many instances, the awards were unsatisfactory from the employers' point of view. Industrial organizations were always ready to accept favorable awards, but whenever the decision of the court went against them, they defied it and went on strike. We all recall the serious industrial trouble which resulted from the finding of Judge Beeby in even such a comparatively minor matter as the waterside workers' case. The men were induced to strike and, for a time, there were scenes of violence on the wharfs and several instances of bombing of the homes of the volunteer workers. The outcome of that industrial upheaval was the introduction, by the then Attorney-General **(Mr. Latham),** of the Transport Workers Act, which the honorable member for Bendigo **(Mr. Keane)** has alleged, quite unfairly, was responsible for the unemployment of a large body of waterside workers, including a number of returned soldiers. The honorable member for Bendigo went on to say that the former Attorney-General was the real enemy of the workers. So far from that being true, I have no hesita tion in declaring that the Transport Workers Act is one of the most beneficial pieces of legislation ever placed on our statute-book. It brought peace to the waterfront and ensured continuity in employment to a large number of willing workers. {: .speaker-KDW} ##### Mr Jones: -- What did it cost for police protection ? {: .speaker-KZR} ##### Mr WHITE: -- The honorable member can get that information for himself. But it is safe to say that .the cost incurred for police protection was infinitesimal when compared with the losses due to idle ships and seamen out of employment, due to industrial unrest for some years prior to the passing of that, act. The Premier of Victoria **(Mr-. Hogan)** pointed out in the press and in. the Victorian Parliament that on thatoccasion. the men were misled by unionleaders who wished to aggrandize their own position in their organization, and that, in fact, their views were entirely opposed to those of the majority of the men concerned. The only offence of the volunteers was that they wished to have the right to work, and that they refused to bow the knee to any industrial dictator. {: .speaker-KX7} ##### Mr Ward: -- Don't call them men. {: .speaker-KZR} ##### Mr WHITE: -- I know what foul communistic term the honorable member for East Sydney **(Mr. Ward),** and those associated with him in the corner, would call those men whose only offence was a desire to work under an award of the" Arbitration Court. The honorable member for Bendigo also said that a considerable number of returned soldiers wore being displaced on the waterfront. On that point I remind him that I was informed, in reply to a question which I put to the Government, that 25 per cent, of the volunteer labourers were returned soldiers, excluding those of foreign birth, some of whom may also have been returned soldiers. So much for the Transport Workers Act. The honorable member ' for Bendigo also endeavoured to persuade the House that the arbitration policy of the previous Government was unfair to the workers. In the light of what has happened during the last two years, I feel sure that if an appeal were now made to the people on the industrial policy of this Government, there would be no doubt as to the verdict. No one can deny that during the last election campaign the industrial policy of the Bruce-Page Government was grossly misrepresented. The honorable member for Fremantle **(Mr. Curtin),** whose eloquence so often cloaks his real meaning, was assistant director of publicity on that occasion. I do not propose to detail the many promises that were made to the electors, and the other extraneous issues that were raised, with the object of mis-i leading the people; but it is not wide of the truth to say that soon after the campaign opened the arbitration policy of the Bruce-Page Government became a matter of secondary importance. The intention then was to leave the settlement of disputes in " the smaller industries to the States. That this is necessary was impressed upon me only this week in connexion with the indenturing of apprentices. The Victorian Government has decided that the intention of the original act shall be adhered to, so that we shall have an apprentice working 48 hours a week, while a journeyman engineer or blacksmith to whom he may be apprenticed will, under a recent award, work only 44 hours. It is that sort of ridiculous overlapping and interference with employers in the conduct of their business that has brought industry to its present sorry plight. We all know that there are world-wide economic difficulties at the present time, and problems of production and consumption to be overcome, but one of the most serious handicaps to business to-day is the operation of our idealistic arbitration system. Aristotle said in B.C. 384^- >The insolence of demagogues is generally the cause of the ruin of democracies. i That is perfectly true to-day. If it were not for the hundreds of federal union secretaries who are holding industry by the throat, business would have freer play, and the number of unemployed would be less. We should not then have the spectacle of scores of unemployed men sitting in the public galleries of this House every night, and the thousands of unemployed in the cities, and those walking the roads of the country, could be provided with profitable occupation. Some honorable members opposite seem to regard arbi- tration as something sacrosanct; something which no one should dare to criticize. The honorable member for Fremantle **(Mr. Curtin)** said that he believed in conciliation, that it was right that the representatives of both sides in industry should meet in conference to settle their disputes. The Deputy Leader of the Opposition **(Mr. Latham)** reminded him that such action is provided for in the existing Arbitration Act. The honorable member denied that assertion, which shows that, in spite of all his eloquence, he knows very little about the subject he has been discussing. Section 24 of the Arbitration Act makes full provision for conciliation proceedings, and honorable members opposite who have been union secretaries or organizers, must know that accommodation is provided in the offices of the Chamber of Manufactures in all the cities for the meeting of conciliation committees in regard to any dispute in an industry. Upon numerous occasions arrangements have been come to, agreeable to both sides, and these agreements have been registered in the Arbitration Court, and have thus become law. The act lays . down certain limitations in respect of such agreements, but, broadly speaking, provision exists for the settlement of practically all disputes by conciliation. I was surprised that the honorable member for New England **(Mr. Thompson),** with all his experience, should support the Government's proposal for setting up conciliation committees, on the ground that a satisfactory agreement had been arrived at in the printing trade by means of conciliation. If agreements can be arrived at by means of round-table conferences, and as he suggested, without expense to the Commonwealth, why should it be necessary to set up conciliation committees under the act, and commit the Government to paying their travelling allowances and other expenses ? Although the Government will achieve something under its rehabilitation plan by reducing abnormal governmental expenditure, nothing which has as yet been put before us will result in providing work for even one man. Expenditure is being reduced, but employment is not being provided, and when the present bills for implementing the Government's plan are passed, I should like to ' see another Premiers Conference held with a view to arriving at some real solution of the unemployment problem. I have no desire that anything should be done to hamper industry still more, or to further shackle and harass employers who are, in most instances, already carrying on at a loss; but it should be possible for a. conference attended by representatives of employers and delegates of the workers to evolve some satisfactory plan. The workers need not :necessarily be represented by union demagogues who, by virtue of their oratory, have secured, for themselves a following, but should send to the conference representatives directly associated with the trades concerned. When we remember that wool and wheat are now selling at approximately 1911 prices, and that wages are twice what they were in 1911, it must be evident that, the country is drifting to insolvency. Our greatest enemy at the present time is drift. We cannot hope that prosperity will return if we merely ait with folded arms, and content ourselves with making a few cuts in expenditure. The seriousness of the position is evident when we realize that the Premier of New South Wales, with his policy ofrepudiation, is supported by representatives in- this House, and that even the Government is so closely associated with communists - who form a nucleus in every trade union, which was the boast of the New South. Wales Premier's adviser, **Mr. Garden,** when in Moscow - that it will not openly denounce these supporters. The Government must take action to provide work for the unemployed. The Attorney.General **(Mr. Brennan)** will be wise to abandon this proposal for setting up conciliation committees, which have had little enough to do in the past. The Arbi.tration Court judges can do all that is necessary. I oppose this measure, because it would, if passed, prove quite ineffective, and would still further harass industry. I intend to vote against the bill. {: #debate-27-s1 .speaker-KXT} ##### Mr PATERSON:
Gippsland .- I should not have spoken on this bill, but for the re-appearance in the chamber of the honorable member for Bendigo **(Mr. Keane).** It is to answer the remarks he made earlier that I have now risen to speak. Many unexpected things have happened in the party on the other side of the House during the last few weeks, and we on this side have almost lost our capacity for astonishment; but not the least surprising ' thing is to hear from the honorable member 'for Bendigo **(Mr. Keane)** and the honorable member for Fremantle. **(Mr. Curtin)** a justification of the policy of the Bruce-Page Government in 1929. Both honorable members criticized the former Attorney-General and the BrucePage Government, and yet both of them substantially supported the policy on which that Government went to the country. They both referred to the desirability of getting rid of legal disputation, and to the time-wasting methods of which the arbitration system is full. They also agreed that we should avoid the expense attached to the working of the arbitration system. The honorable member for Bendigo said that the conciliation committees would be representative of employers and employees, and would be the means of bringing them into close touch with one another; that they would deal with each other, instead of going to a third party - the Arbitration Court. In that way, it was urged, time would be saved, and common-sense determination would be arrived at by men who understood the technicalities of the industry instead of by judicial men who might, or might not, know very much about the actual working of the business concerned. The honorable member for Bendigo **(Mr. Keane)** said that quick decisions would be given, based on first-hand knowledge. The honorable member's remarks were almost identical with words which I used in 1929 when supporting the policy of the Bruce-Page Government. . It would appear that the honorable member for Bendigo had been reading my speech before he spoke. When the Bruce-Page Government went to the. country in 1929, its supporters told the electors that they desired to get rid of legal disputations, imposing tremendous expense on both employer and employee, and to dispense with the atmosphere of litigation as well as duplication, and overlapping. We urged that the 'best way to accomplish those ends was by abolishing the system which had worked so badly for a number of years, and by extending the scope of the State wages hoard system in its stead. **Mr. Bruce** told a conference of Premiers in May, 1929, that in the event of the Premiers being unwilling to hand over to the Commonwealth complete powers with respect to arbitration, and full jurisdiction in industrial affairs, the Commonwealth Government would be prepared to cease to use those powers, and to leave the whole matter to the States, whereupon the Premiers indicated their willingness to extend the scope of the wages board system to embrace the whole field. I cannot help feeling that both the honorable member for Bendigo and the honorable member for Fremantle **(Mr. Curtin)** have, perhaps unwittingly, fully justified the attitude which we on this side then took up. I feel gratified that they are now showing a wisdom which, had it been shown earlier, and properly directed, might have resulted in a different decision being reached at the 1929 election. The honorable member for Fremantle said that these conciliation committees would act more or less informally. He gave that as one of his reasons for supporting them. Yet it was because the act of 1930 provided that these conciliation committees would exercise their powers more or less informally that sections of that act were declared to be invalid. Indeed, that is one of the reasons why the act is being amended. If the honorable member will turn to section 23 of the act of 1930, he will read - >The court or a conciliation commissioner shall, in such manner as it or he thinks fit, carefully and expeditiously hear inquire into and investigate "every industrial dispute of which the court has cognizance and all matters affecting the merits of the dispute and the right' settlement thereof. Section 34 (10) of the act of 1930, as amended by clause 4 of this bill, embodies the same phraseology. If the one is formal, the other is formal; if ohe is informal, the other is informal. They are both. alike. It is idle to draw a distinction between them, as the honorable member for Fremantle endeavoured to do. If we want to simplify matters, and avoid time wasting, let us take the wages board system in exchange for the arbitra- tion system. Let there be a complete change over, in order to avoid unnecessary duplication. I desire now to refer to clause 3 which amends section 33 of the principal act to make it read - >Notwithstanding anything contained in this act, an industrial dispute or - an application to vary, set aside, suspend or cancel an award or any term of an award shall not be dealt with by the court or a judge thereof, in pursuance of any power conferred upon the court or judge by this act, during the period for which a conciliation committee has been appointed . . . the next succeeding section . . . Clause 7 reads- >Every conciliation committee purporting to have been appointed before the commencement of this act shall be deemed to have been to all intents and purposes as validly and effectually appointed as if this act had been in force at the date of the appointment. In considering this clause, a mere layman might be thought to work in a sort of dim and glimmering twilight, compared with the bright light which surrounds legal gentlemen. But even a dim or glimmering twilight of intelligence should be sufficient to grasp the meaning of clause 7 when read in conjunction with the other provisions I have quoted. It means that these committees which have been appointed, and which were declared to be illegal, will now be legalised and regarded as valid committees; that the mere fact of their haying been appointed before the reductions were made will mean that those reductions are invalid. {: .speaker-JSC} ##### Mr Brennan: -- The purpose of the clause is to meet the case of a number of committees which, although appointed have never functioned. If there is any doubt regarding its meaning, an amendment will be brought forward. {: .speaker-KXT} ##### Mr PATERSON: -- Is the purpose of the clause to invalidate any reductions made by the court? **Mr-** Brennan. - Nothing of the kind is intended. That will be made clear in the bill. {: .speaker-KXT} ##### Mr PATERSON: -- I am glad to have that assurance, because it appeared to me that the Government was endeavouring to ii validate reductions made by the court, despite the fact that it has itself, by recent legislation, made reductions much greater than those made by the court. In so doing, the Government really gave a testimonial to the court and amply justi- fed the court's decision. In view of the Government's own action in this connexion I find it difficult to believe that it is really serious in bringing this measure forward at this juncture. Knowing the Attorney-General's **(Mr. Bren- nan)** turn for humour, I am inclined to believe that he must be proceeding with this bill in humorous vein. {: #debate-27-s2 .speaker-KMU} ##### Mr MARKS:
Wentworth .- I am not so dense as not to realize that , at this hour the House will scarcely tolerate a lengthy speech. I shall not attempt to make one now. I rise merely to inform my many friends who read *Hansard* that I agree with the views put forward by the honorable member for New England **(Mr. Thompson),** and that I propose to vote for the second reading. We must all admit that the last federal election was won by the present Government on the issue of the retention of the federal arbitration system. I then stood for the retention of the court, and the act by which it was created; I was opposed to handing over arbitration matters to the States. I submit that, in view of the mandate it received, the Government has a perfect right to bring before Parliament amending arbitration legislation. I agree with the honorable member for New England that we should, at least, allow the bill to pass into committee where, if necessary, amendments can be made. For the reason which I have given, I intend to vote for the second reading. Question - That the bill be now read a second time - put. - The House divided. (Mr. Speaker - Hon. Norman Makin.) AYES: 31 NOES: 17 Majority . . 14 AYES NOES Question so resolved in the affirmative. Bill read a second time and committed *pro forma.* {: .page-start } page 4175 {:#debate-28} ### CUSTOMS TARIFF (CANADIAN PREFERENCE) Bill returned from the Senate with a request. {: .page-start } page 4175 {:#debate-29} ### SALES TAX ASSESSMENT BILLS, 1931 Motions (by **Mr. Scullin)** - *by leave -* agreed to - >That so much of the Standing Orders be suspended as would prevent the questions in regard to the introduction, first and second readings, and committee's report stage being put in one motion covering several or all of the bills dealing with the sales tax and the sales tax assessment, and also several or all of such bills being considered together in a committee of the whole. > >That the Standing Orders be suspended to enable all bills dealing with the sales tax and the sales tax assessment to be passed through all stages without delay. > >That he have leave to bring in bills for acts to amend Sales Tax Assessment Acts (Nos. 1 to 9) 1930. {: .page-start } page 4175 {:#debate-30} ### SALES TAX ASSESSMENT BILLS (Nos. 1 and 5) 1931. Bills brought up by **Mr. Scullin,** and read a first time. {: .page-start } page 4175 {:#debate-31} ### DEBT CONVERSION AGREEMENT BILL *In Committee:* Consideration resumed from the 1st July *(vide* page 3226). Schedule. {: #debate-31-s0 .speaker-F4Q} ##### Mr SCULLIN:
Prime Minister · Yarra · ALP -- During the consideration of this bill, the Deputy Leader of the Opposition **(Mr. Latham),** the honorable member for Corangamite **(Mr. Crouch),** and others, offered certain criticism of a technical character. Some of that criticism was justified, and, as the result of a conference with the Government's legal advisers, I now move - >That the schedule be omitted, and that the following new schedule be inserted in lieu thereof: - > >"DEBT CONVERSION AGREEMENT. > >Agreement made the 21st day of July One thousand nine hundred and thirty-one between the Commonwealth of Australia (in this Agreement called the Commonwealth) of the first part, the State of New South Wales of the second part, the State of Victoria of the third part, the State of Queensland of the fourth part, the State of South Australia of the fifth part, the State of Western Australia of the sixth part, and the State of Tasmania of the seventh part (each of the parties of the second, third, fourth, fifth, sixth and seventh parts being in this Agreement referred to as a State, and the expression " the States " in this Agreement meaning where the context so permits or requires all of such parties) : > >Whereas by section 105a of the Constitution it is provided that the Commonwealth may make agreements with the States with respect to the public' debts of the States, including (inter *alia)* the consolidation, renewal, conversion, and redemption of such debts: > >And whereas at a Conference between Ministers of the Commonwealth and Ministers of the States convened in Melbourne on the twenty-fifth day of May, 1931, it was resolved, as part of a plan for establishing the financial stability of the Commonwealth and of the States, that a conversion should be arranged of the internal public debts of the Commonwealth and of the States and the following conditions were provisionally agreed upon as recommendations by the Conference to the Australian Loan Council, namely: - *General Conditions.* {: type="1" start="1"} 0. Holders of all existing securities to be invited to convert their holdings into new stock - conversion to apply to all securities the holders of which do not dissent as prescribed by Commonwealth law. 1. On conversion all existing securities to be subject to a general reduction of 22½ percent, in the interest yield provided that holders of 3, 3½, and 3¾ per cent, stocks who acquired such securities prior to 4th August, 1914, shall not have their interest reduced below 3 per cent. 2. Now securities to be restricted to three flat rates of interest, viz., 4, 37/8, and 3 per cent., and to be spread over ten (10) fixed maturity dates as follows, subject to the Go vernment having the right to redeem in whole or in part at any time after 31st December, {: type="1" start="4"} 0. The new securities to be Commonwealth securities, and to be in the form of bearerbonds, debentures, or inscribed stock, &c, as at present. 1. The equivalent amount of new stock to be determined by actuarial valuation after taking into account the interest rate and date of maturity of each existing security, and after allowing for the general reduction of 22½ per cent, in the interest yield. 2. Existing securities (£450,000,000) now bearing interest at 5¼ per cent, and over to be converted into 4 per cent, at a premium. As a general rule each holding to be spread equally over the ten maturity dates, but special arrangements to be made to consolidate small holdings on conversion. 3. Existing securities (£45,000,000) now bearing interest at 5 per cent, to be converted, at option of holder, into 37/8 per cent, stock at par, maturing in sixteen years, or 4 per cent, stock (at a discount). 4. Existing securities (£61, 000,000) now bearing interest at less than 5 per cent, to be converted, at option of holder, into 3 per cent, stock maturing in seven years and thirteen years (at a premium), or into 4 per cent, stock (at a discount). 5. To facilitate the issue of new securities, all fractions below £10 to be paid off in cash, subject to holders being entitled to contribute cash to make up the next higher £10. 6. The interest on the new securities to be free from the present Commonwealth supertax of 7) per cent., and from any further taxation which may be imposed by the Commonwealth or by any State, but to be subject to other existing Commonwealth and State taxes. 7. Where overseas trade money has been temporarily invested in short-term securities, because of exchange difficulties, the holders to be given the right to convert into a shortterm new security, subject to other conditions similar to the main conversion. *Special Conditions Applicable to Tax-Free Securities.* {: type="1" start="12"} 0. Tax-free securities with definite dates of maturity - {: type="a" start="i"} 0. Holders to be invited to convert intonew securities subject to the general reduction of 22) per cent, in theinterest yield, with the proviso set out in clause 2 above. {: type="i" start="ii"} 0. Holders of tax-free securities whoso convert to be given new securities at the reduced rates, such securities to be tax-free only until the existing date of maturity. 1. The new securities issued to replace the tax free securities maturing in 1932, 1933, and 1934 to be reconverted on maturity dates into 4 per cent, securities maturing in 1941. on the same basis as other conversions into the new 4 per cent, issue. 2. The new securities to replace all other tax-free securities to retain their present maturity dates. 1. Tax-free securities which are "Interminable," " Redeemable at option of Government," &c. - Holders to be invited to convert into new securities, subject to the general reduction of 22½ per cent, in the interest yield, with the proviso set out in clause 2 above, the general conditions attaching to the new securities to be the same as those attaching to the original securities. *Government Securities Held by State Savings Hanks.* {: type="1" start="14"} 0. Dates of maturities of securities held by the State Savings Banks to stand, if so desired by the Treasurer of the State concerned, on same conditions as conversion issue. *Treasury Bills.* {: type="1" start="15"} 0. The rate of interest on Treasury Bills taken up by the banks in Australia to be reduced to 4 per cent., and all other questions in relation to the Bills to be settled by the Loan Council in consultation with the banks. *Loan Council.* {: type="1" start="16"} 0. The terms herein set out to be regarded as recommendations by the Conference to the Loan Council, which it is to be understood is at liberty to modify any details of the plan, and to settle all details not included above: And whereas the said conditions with certain modifications have been embodied in a Bill for an Act to be known as the Commonwealth Debt Conversion Act 1931 which has been passed by both Houses of the Federal Parliament and is ready for presentation to the Governor-General for the Royal assent and is hereinafter referred to as the said Act: And whereas there have been incorporated in the said Act additional provisions deemed to be convenient for carrying out the said conditions as so modified as aforesaid: Now this Agreement witnesseth: {: type="1" start="1"} 0. This Agreement shall have full force and effect, and shall be binding on all the parties, when it is approved by the Parliaments of the Commonwealth and of the States. 1. The Commonwealth is authorized to arrange and effect a conversion, on the basis of a twenty-two and a half per centum reduction of interest, in accordance with the terms and conditions of sections three, eight, and ten to twenty-two inclusive, of the said Act, of all public debts of the States the liability for which has been assumed by the Commonwealth under the Financial Agreement hereinafter mentioned and the interest and- principal of which are payable in Australia, and of all public debts of the Commonwealth (including; borrowings by the Commonwealth for or on behalf of a State under the said Financial Agreement) the interest and principal of which are payable in Australia. The said sections of the said Act shall be binding upon the parties hereto as part of this agreement. 2. The Commonwealth will take the necessary action to submit to the Federal Parliament any legislation necessary to carry out or give effect to this Agreement. 3. So far as the provisions of this Agreement may not be in accordance with any provisions of the Financial Agreement between the parties hereto, dated the 12th day of December, 1927, the provisions of this Agreement shall prevail. 4. Subject to the last preceding clause, the provisions of the said Financial Agreement, and the undertakings and obligations of the Commonwealth and of the States therein contained, shall apply to the public debts after conversion in the same manner as they applied before conversion. The original agreement authorized the Commonwealth to arrange a conversion upon the basis of a 22^ per cent, reduction of interest, in accordance with the general conditions laid down by the Premiers Conference, and any modifications approved by the Loan Council. The new agreement authorizes conversion on the basis of a 22£ per cent, reduction of interest, but in accordance with the principle clauses of the bill, which is now awaiting the royal assent. The provision which referred to the approval of the Loan Council has been dispensed with. {: .speaker-L07} ##### Mr Lazzarini: -- The Loan Council is not brought into the matter. {: #debate-31-s1 .speaker-F4Q} ##### Mr SCULLIN:
ALP -- This agreement is governed by the Debt Conversion Act. {: .speaker-L07} ##### Mr Lazzarini: -- Is that the only alteration ? {: .speaker-F4Q} ##### Mr SCULLIN: -- That is the only substantial alteration. There are a few others of a purely legal character. For example, the most important amendment provides that if this agreement, which is made in accordance with the financial agreement entered into between the Commonwealth and the States on the 12th December, 1927, conflicts in any way with this agreement, this agreement shall prevail. The other amendments are merely of a technical character. As the Debt Conversion Bill, in which all the principles of this proposal are embodied, has been fully debated, there is no need to discuss the schedule at length. The alterations in the present schedule have been made after consultation with the Loan Council, and the Commonwealth and State law officers. The agreement has been signed by me, as Prime Minister, and by the Premiers of the States, and the Debt Conversion Agreement Bill will be proclaimed when similar measures have been passed by the State Parliaments. The Debt Conversion Bill will also be proclaimed at the same time. {: #debate-31-s2 .speaker-K7U} ##### Mr CROUCH:
Corangamite -- The schedule consists of what is termed an agreement, which, in my opinion, is not an agreement, and is not in accordance with the provisions of-. Act No. 1 of 1928, entitled, " The Constitution Alteration - State Debts Act 1928 ". Nor does it meet the require ments of section 105a of the Constitution. There is not the slightest doubt that the Financial Emergency Bill ha» already been enacted. When that bill, under which the salaries of public servants, the pensions of the invalid, the aged and the destitute and the returned soldiers have been reduced, was under discussion, we were informed that the bondholders would also be required to bear their share of the burden, but as this schedule is worded, they may not be compelled to do so. I contend that this is not a legal agreement, and that under section 105a of the Constitution it will be declared invalid by the High Court. In any circumstances, we should study it closely, to determine whether it is, or is not, actually an agreement. If it is not an agreement, a person holding a £1,000 bond falling due on the 15th December, 1931, who has not taken the trouble to dissent under the Debt Conversion Bill, may claim that he is entitled to his money because the agreement entered into between the Commonwealth and the States was not in fact an agreement, and consequently does not bind him. I understand that the Deputy Leader of the Opposition **(Mr. Latham),** in endeavouring to assist the Government, has diecussed this matter with the legal advisers of the Government. I merely wish to place on record my protest against the adoption of what, in my opinion, is not an agreement, and, if passed in its present form, will prove ineffective. . A person whose bond is due for redemption on the 15th December, 1931, who has not dissented, will have the right to claim his money because the terms of the Constitution have not been complied with. In the agreement the words " et cetera " are used. They were objected to by the Deputy Leader of the Opposition, but they still remain in clauses 4 and 13. They may, or may not, cover treasurybills, deposit receipts, debentures, or inscribed stock. The same expression is also' used in the recital to the agreement which may ako be very dangerous. In clause 6 of the schedule we find these words - "As a general rule each holding to be spread equally over the ten maturity dates . . " In my opinion the words " As a general rule " are ineffective ewing to their uncertainty and indefiniteness. Clause 15 reads - >The rate of interest on treasury-bills taken up by the banks in Australia to be reduced to 4 per cent., and all other questions in relation to the bill to be settled by the Loan Council in consultation with the banks. That means that with the exception of the 4 per cent, all others are in the air. The banks may not agree. The governments are importing into these recitals a party which is not a party to the agreement. Under the heading of " Loan Council" the following appears: - >And whereas the said conditions with certain modifications have been embodied in a Bill for an Act to be known as the Commonwealth Debt Conversion Act 1931 which has been passed by both Houses of the Federal Parliament and is ready for presentation to the GovernorGeneral for the Royal assent find is hereinafter referred to as the said Act. Clause 3 of the agreement provides - >The Commonwealth will take the necessary action to submit to the-Federal Parliament any legislation necessary to carry out or give effect to this Agreement. It is provided in a previous clause that the legislation has been passed with certain modifications and is ready for presentation to the Governor-General. Yet we find in clause 3 that the Commonwealth Government " will take the necessary action to submit to the Federal Parliament any legislation necessary to carry out or give effect to this agreement". -A further paragraph reads- - >And whereas there have been incorporated in the said Act additional provisions deemed to be convenient for carrying out the said con-, ditions as so modified as aforesaid. - In the operative clauses the terms and conditions of 24 clauses are agreed to, the other parts of the act, which all imply terms and conditions, are left in the air. If I were asked to, advise a client I would tell him he was not' bound by the terms of this agreement. I do not think that the Commonwealth or the States are bound by it. I do not think that the. agreement meets the requirements of section 105a of the Constitution. The consideration of this matter has been held up for a fortnight with the object of putting the agreement into better form than that in which it was submitted to the Premiers for signature. There has been time for a thorough revision of it, and for the removal of all indefiniteness from it. I do not think that that indefiniteness has been removed, and I wash my hands of it. {: .speaker-L07} ##### Mr Lazzarini: -- Does the honorable member suggest that the agreement is invalid as to construction, or as to principle ? {: .speaker-K7U} ##### Mr CROUCH: -- I consider that its construction is bad. It will not be binding upon the parties, because of its indefiniteness. One amendment of an important nature has been made, although the Prime Minister stated that there had been no serious alteration in it. In its original form the bill contained no provision such is required by Act No. 1 of 1929 for the indemnification of the Commonwealth by the States in respect of debts taken over by the Commonwealth. That point is now covered by paragraph 5 of the operative words. I shall not delay the committee further than to repeat that if a client came to me on the 16th December next for advice as to the obligation of the Government to redeem his securities, I would advise him that he would have good grounds for suing the Commonwealth for his money. {: #debate-31-s3 .speaker-KZO} ##### Mr LATHAM:
Kooyong .- When this measure was previously before the committee I criticized various passages in the agreement, which I said was so vague, indefinite, and uncertain as not to amount to an agreement. I gave several reasons for holding that opinion. Those reasons have disappeared, because of the amendments that have been made to the agreement. If honorable members will look at the bill in its original form they will see that there was a reference in it to the conversion of certain debts " on the following conditions, namely ". Those conditions were then set out in the draft - the rough draft, as I pointed out - submitted to the Premiers Conference. Following upon the recital, there came the recital that an agreement for authorizing the conversion of the debts in accordance with those conditions, which were indefinite and uncertain. They included, for instance, the use of the words, " et cetera," at least twice. They also provided for the settlement of certain matters in consultation with the banks, and for the determination of certain other matters by the Loan Council. Accordingly, the agreement for the conversion was uncertain. I also pointed out that in the form in which it was originally submitted the agreement provided that the conditions might be modified in any manner Approved by the Loan Council or the chairman of the Loan Council acting on the authority of the Loan Council. But the provisions of the agreement which I regarded as uncertain and vague have been amended, and it is now possible to identify the terms upon which the conversion is to take place. I have had something to do with the drafting of these amendments in conjunction with the legal advisers of the Government. That is not a normal procedure, but it seemed to me that this matter was so important that if I were able from my experience to offer any assistance it was my duty to offer it, and I did so gladly. I point out in reference to the remarks of the honorable member for Coranga- mite **(Mr. Crouch)** that the agreement has been altered at the end of the second recital to read as follows: - that a conversion should be arranged of the internal public debts of the Commonwealth and of the States and the following conditions were provisionally agreed upon as recommendations by the conference to the Australian Loan Council, namely - It is in the section of the agreement which follows, that the words " et cetera " are used. There is still uncertainty and indefiniteness in the statement of those general conditions in the recital, but they were actually the conditions agreed to by the conference. The operative clauses of *the* agreement follow, and they now completely identify the terms of the conversion. The language of the agreement in that connexion is as follows : - >And whereas the said conditions with certain modifications have been embodied in a bill for an act to be known as the Commonwealth Debt Conversion Act 1931 whichhas been passed by both Houses of the Federal Parliament and is ready for presentation to the Governor-General for the Royal assent and is hereinafter referred to as the said act: The actual terms of the conversion are stated in the Commonwealth Debt Conversion Act. The recital goes on to say, in this connexion - >And whereas there have been incorporated in the said act additional provisions deemed to be convenient for carrying out the said conditions as so modified as aforesaid. Those conditions are, in brief, that the Commonwealth is authorized to arrange and effect a conversion of the public debts in accordance with the terms and conditions of "sections 3, 8 and 10 to 22 inclusive of the said act of all public debts of the States ". It will be realized, therefore, that the precise terms of the conversion are now specified in the agreement. {: .speaker-L07} ##### Mr Lazzarini: -- Is the honorable gentleman now of the opinion that the agreement meets all constitutional requirements ? {: .speaker-KZO} ##### Mr LATHAM: -- I consider that all the points that I raised, or that I have heard raised, have been covered. I point out, also, that an additional provision has been inserted with the object of ensuring that the liability of the States for their own debts has been retained. It is provided in this regard that - the provisions of the said financial agreement, and the undertakings and obligations of the Commonwealth and of the States therein contained, shall apply to the public debts after the conversion in the same manner as they applied before the conversion. I think that all the points raised in criticism of the original agreement have been met; but I do not profess to give an absolute guarantee of validity. The agreement is as sound as I can see that we can make it. That is surely all that I can. reasonably be expected to say. Amendment agreed to. Schedule, as amended, agreed to. Preamble and title agreed to. Bill reported with an amendment; report - *by leave* - adopted. Bill - *by leave* - read a third time. SALES TAX BILLS (NOS. 1 to 9) 1931. *In Committee of Ways and Means:* Consideration resumed from the 10th July *(vide* page 3747) and from the 15th *July (vide* page 3908) on motions by **Mr. Theodore** *(vide* pages 3746 and 3899). Questions resolved in the affirmative. Resolutions reported and adopted. Ordered - >That **Mr. Scullin** and **Mr. Blakeley** do prepare and bring in bills to carry out the foregoing resolutions. Bills brought up by **Mr. Scullin,** and read a first time. {: .page-start } page 4181 {:#debate-32} ### CUSTOMS TARIFF (CANADIAN PREFERENCE) *InCommiitee:* (Consideration of Senate's request.) {: #debate-32-s0 .speaker-L4X} ##### Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP .- The Senate has requested this committee to make what is merely a minor drafting amendment, so that it will be clear that the proclamation referred to in clause 5 of the bill is identical with that mentioned in clause 4. I move - >That the requested amendment be made. {: #debate-32-s1 .speaker-KZO} ##### Mr LATHAM:
Kooyong .- I can warrant the amendment harmless to the Labour party, the corner party, the Country party and the party with which I am associated. {: #debate-32-s2 .speaker-K7U} ##### Mr CROUCH:
Corangamite -- The debates that took place on this matter in the Canadian Parliament, which' I have had an opportunity of reading, show that contemporaneously with the completion of the treaty with Australia, other treaties were entered into with South Africa and New Zealand, which, apparently give to those countries rights similar to those that have been accorded to us. It would appear, therefore, that the advantage accruing to Australia under this treaty disappears by reason of its very generality. {: .speaker-L4X} ##### Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP -Where did the honorable member learn this ? {: .speaker-K7U} ##### Mr CROUCH: -- I have learnt it from the reports of the debates in the Canadian Parliament. The Canadian Minister said that, in connexion with South Africa and New Zealand, the treaties could be arranged by proclamation, but that in the case of the Australian treaty it was necessary for legislation to bo passed, and that the reason for the delay that had taken place was financial embarrassment in Australia. If that be so, we are really only getting from Canada rights that are being given to other countries. {: .speaker-L4X} ##### Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP -- I can assure the honorable member that thatis not so. {: #debate-32-s3 .speaker-L07} ##### Mr LAZZARINI:
Werriwa -- I want to place it on record that I am not prepared to accept the warrant of the Deputy Leader of the Opposition **(Mr. Latham)** that anything is safe so far as any party other than his own is concerned. When amendments, either made or requested by the Senate, are to be considered in this chamber, and it is desired to put them through quickly, other honorable members as well as the Deputy Leader of the Opposition should be told what is happening. If it is a requirement of courtesy for information to be conveyed to the Loader or the Deputy Leader of the Opposition, similar treatment should be meted out to other honorable members also as an act of courtesy. This is not a threat, but a plain statement of fact. {: #debate-32-s4 .speaker-KYZ} ##### Mr RIORDAN:
Kennedy .- As a member of the Government party I appreciate the assurance of the Deputy Leader of the Opposition that this amendment is all right. I suppose that we shall have to accept his word, as we have not heard anything concerning the matter from our own Cabinet. {: .speaker-F4Q} ##### Mr Scullin: -- The assurance was given by the Minister in the first place. Motion agreed to. Resolution reported ; report adopted. House adjourned at 10.59 p.m.

Cite as: Australia, House of Representatives, Debates, 21 July 1931, viewed 6 July 2017, <http://historichansard.net/hofreps/1931/19310721_reps_12_131/>.