13th Parliament · 1st Session
Mr. Speaker (Hon. G. H. Mackay) took the chair at 2.30 p.m., and read prayers.
Motion (by Mr. Lyons) - by leave - agreed to -
That, unless otherwise ordered, this House shall meet for the despatch of businessat 3 o’clock oneach Wednesday afternoon,at half-past 2 o’clock on each Thursday afternoon, and athalf-past 10 o’clock on eachFriday morning.
– Will the Prime Minister afford an opportunity for the House to discuss the matters tobe dealt with at the next Imperial Conference before the representatives of the Commonwealth leave Australia?
– The Government has not yet considered the advisability of having a preliminary discussion in Parliament on the matters to be dealt with by the conference. Trade subjects can of course be dismissed in connexion with the tariff schedule and measures associated with it, I shall, however, consider whether it is possible to accedeto the right honorable gentleman’s request.
– Iask the Prime Minister whether the Government has considered the advisability of causing an investigation to be made into the undue penalties imposed upon land tax payers through the Commissioner’s insistence upon unreasonably high assessments?
– The Government has not yet considered the matter, but will do so.
– Will the AttorneyGeneral state whether it is the intention of the Government to take any action concerning the copyright law, more particularly with regard to the Performing Right Association?
– There is no intention at present to take action with respect to this matter, which has been handled on a basis of agreement between the parties concerned. I understand that they arc now at issue; if it becomes necessary the Government will give the matter its attention.
– As the present system of collecting the sales tax is costly and irritating, will the Government consider an alteration to provide a simple and useful form of collecting the tax?
– As honorable members know, the previous Government made strenuous endeavours to evolve a simpler and less vexatious method of collecting the sales tax, without avail. If this Government can discover a better system it will adopt it.
– In view of the hardship that is inflicted on wage-earners by the application of the sales tax to educational literature and other school requisites, will the Government consider its withdrawal from those items?
– Honorable members are probably aware that recently a very representative deputation from various parts of Australia waited upon me and made a similar request to that now submitted by the honorable member for Hume. Much as I dislike the application of the sales tax to these items, I know that, for the present, the financial circumstances of the Commonwealth prevent any substantial relief being given in the direction suggested.
– Will the Treasurer advise whether there is a time limit governing the application by necessitous bondholders to have their stock or bonds purchased at par by the Commonwealth, Bank?
– I shall ascertain the position.
Disabilities under Federation.
– Has the Common wealth Government received a request for financial aid from the Government of South Australia, to offset the disabilities suffered by that State under federation? If so, what sum is sought, and what action does the Federal Government contemplate ?
– The Premier of South Australia has asked this Government to consider the financial situation of South Australia as a result of disabilities that it has suffered under federation. I am not sure that a request has been made for a specific sum as compensation. At present it is impossible for me to say what attitude this Government will adopt.
– In view of the fact that members of a conference that was recently held in New South Wales enunciated a plan which has for its purpose the overthrow of the present system of government by revolutionary means, will the Federal Government take appropriate steps against those concerned?
– From time totime nowadays a great deal of hot air is produced in Australia. I shall have the matter investigated, and see whether it is of a serious nature.
– As the matter vitally concerns Australia, will the Prime Minister state whether the British Governmenthas indicated its views concerning the present hostilities between China and Japan ; also, if it has consulted the Commonwealth Government concerning any action taken by it in connexion with the League of Nations?
– The matter is occupying the attention of the Minister for External Affairs, who will make a statement upon it.
– by leave - The situation at present is that the regular Chinese troops have been withdrawn from all those parts of Manchuria which lie to the south of the line of the Chinese eastern railway. While hostilities appear to have ceased in that area, a serious situation has developed at Shanghai, where Japanese forces have been landed, and are heavily engaged with the Chinese forces. I think that honorable members will agree that no good purpose could be served, while harm might be done, by any attempt to deal in greater detail with the events, or to try to assign reasons for them. Honorable members are no doubt aware that since the commencement of the crisis the Council of the League of Nations has been endeavouring to find some solution acceptable to both parties, and that a commission appointed by the League is now on its way to China. The Government of the United Kingdom has been associated with all these efforts by the Council, and has, in addition, taken every opportunity of urging on both parties the urgent necessity for, firstly, putting an end to hostilities, and, secondly, arriving at a peaceful settlement of the points at issue. The Commonwealth Government has been kept fully informed of the situation, and of the various efforts that have been made to put an end to the crisis, and is lending and will lend assistance to any useful efforts to effect a pacific settlement.
– In view of the fact that some Australians have expressed a desire to enlist with the object of taking part in the hostilities in the East, will the Government undertake to make it widely known that the Foreign Enlistment Act of Great Britain prevents any British subject from enlisting to fight for any nation which is at war with a nation friendly to Great Britain?
– The Foreign Enlistment Act, to which the honorable member has referred, contains provisions of the nature mentioned by him.
– Have any representations been made to the Government by responsible parties urging that the Zealandia should continue to run between Hobart and Sydney during the winter months? If so, does the Government view those representations favorably or otherwise ?
– I am not aware that any such representations have been made. The governing factor is the financial position of the Commonwealth. Much as I may wish that the services of the Zealandia should be continued during the winter months, I realize that, while it is necessary to reduce postal and other services throughout the Commonwealth, there is very littleprospect of meeting the desire of the honorable member.
– In view of the decreased earnings of a large number of broadcast listeners will the PostmasterGeneral undertake to review the charge for wireless licences with the object of effecting a considerable reduction in the amount? Will he also provide that the licence-fee may be payable in half-yearly instalments if the listener so desires ?
– The Government has been giving careful consideration to wireless broadcasting, and a bill dealing with the whole subject will be introduced shortly.
– In view of the fact that yesterday the Prime Minister placed upon the last Parliament the responsibility for the manifest injustices done to pensioners in connexion with the proportionate sacrifices made by them and other people in accordance with the Premiers’ plan, will he undertake to give Parliament an early opportunity-
– I rise to a point of order. I submit that, in asking his question, the honorable gentleman is not entitled to express an opinion or reflect upon the proceedings of Parliament, as he has done by the use of the phrase “manifest injustices”.
– The form in which the question is foamed is not in order. As a new member, I purposely allowed him some latitude in this respect ; but new members should realize that they may not ask a question with the object of giving information, nor may they, in asking a question, reflect upon the proceedings of Parliament. I ask the honorable member to frame his question in such a way that it will conform with the Standing Orders.
– I ask the Prime Minister whether he will undertake to give the House an early opportunity of reviewing the sacrifices required from invalid and old-age pensioners in accordance with the provisions of the Premiers’ plan?
– All honorable members will have a full opportunity of discussing the financial provisions for the year when the budget is submitted to them. The matter referred to by the honorable member can be dealt with then.
– Two or three days ago I bought a box of matches in Sydney on which was printed the words “Made in theU.S.S.R.” As these matches are made under slave conditions, I ask the Minister for Trade and Customs to see that they are not admitted into Australia.
– I shall give consideration to the honorable member’s request.
– Seeing that the Minister for Trade and Customs delivered some eloquent speeches when he was in Opposition in favour of the removal of the primage duty on books, will he now do what he then wanted me to do?
– I have no recollection ofhaving delivered eloquent speeches on that subject, but I remind the honorable member that the primage duty on books is imposed for revenue purposes, and that therefore this question should be directed to the Treasurer.
– I desire to make a personal explanation. During a speech which I delivered yesterday, I made some reference to the laughter of honorable members sitting on the front Opposition bench. I find that some of the newspapers have taken that to be a reflection on the conduct of the honorable member for Hindmarsh (Mr. Makin).
– I hardly think that the honorable member’s remarks come within the bounds of a personal explanation. If he has been misrepresented he is entitled to make an explanation.
– A mistake has been made, and I wish to apologize to an honorable member who has been unjustly treated in consequence of something that I said.
– I am sure that the honorable member can do so in such a way that his remarks will be in accordance with the Standing Orders.
– I desire to apologize to the honorable member for Hindmarsh, who was sitting directly in front of me when I made the remark to which attention has been drawn. I did not include the honorable member in what I said. He has always been sympathetic towards me, and was so yesterday.
– In view of the fact that the coal-mining industry is in a languishing state, due to the development of power by other means than the combustion of coal, and that Messrs. Lyons Bros. of Wallsend, have proved that they are able to extract oil from coal on a commercial basis, will the Prime Minister follow the example of the New SouthWales Government, and make £10,000 available to Messrs. Lyons Bros. to assist them to place this industry on a sound basis? Messrs. Lyons Bros. could, in such circumstances, guarantee immediate employment to 30 men, and they would undertake to employ another 200 men in the course of six months.
– I can onlyundertake to look into the merits of the proposal of the honorable member.
– Will the Minister administering the War Service Homes Department inform me whether honorable members may expect, at an early date, a declaration of future policy in regard to war service homes?
– The policy of the Government in this connexion has already been publicly announced, and it was stated in the Governor-General’s Speech that a bill dealing with this subject will be introduced.
asked the Prime Minister, upon notice -
– Arrangements for the future control of broadcasting will be the subject of legislation which it is proposed to introduce at an early date. In the meantime, the Government will not be in a position to determine the various matters incidental thereto.
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Prime Minister, upon notice -
Will he make available all correspondence relating to replies by members of the judiciary so far as their voluntary acceptance, or otherwise, of salary reductions are concerned?
– It is not considered that any useful purpose would be served by making the correspondence available at this stage.
asked the Minister in Charge of War Service Homes, upon notice -
– This matter is receiving consideration.
asked the Treasurer, upon notice -
– Bounties paid during the three years ended 30th June, 1931, were -
The following papers were presented : -
Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinance of 1932 - No. 1 - Motor Traffic.
Wheat Bounty Act - Regulations - Statutory Rules 1931, No. 149.
Wine Grapes Charges Acts - Regulations amended - Statutory Rules 1932, No. 5.
Wine Overseas Marketing Act - Regulations amended -
Statutory Rules 1931, No. 148.
Statutory Rules 1932, No. 4.
Mr. JOHN LAWSON, for the committee appointed to prepare an Address- in -Reply to His Excellency the GovernorGeneral’s Speech (vide page 35), brought up the proposed address, which was read by the Clerk.
– I move -
That the following Addresss-in-Reply to His Excellency the Governor-General’s Speech he agreed to: -
May itpleaseyourexcellency :
We, the House of Representatives of the Parliament of the Commonwealth of Australia, in Parliament assembled, bug to express our loyalty to our most Gracious Sovereign, and to thank Your Excellency for the Speech which you have been pleased to address to Parliament.
I desire to express my highappreciation of the honour and distinction conferred upon me by this opportunity to move the adoption of the AddressinReply. I am the parliamentary representative of what is probably the most varied constituency in the Commonwealth. It comprises farming and grazing areas of every description, and has also within it many manufacturing, industrial and purely residential centres. I, therefore, regard this honour and distinction as an earnest of the Government’s genuine concern for the welfare, not of any particular section of the people alone, but of all sections of the people; and of its realization of the magnitude of the problems confronting industry generally and their bearing upon the whole community; and of its determination to face those problems fearlessly in an endeavour to aid their solution by dealing out evenhanded justice to all. The policy of the Government as outlined prior to the general election of the 19th December last received probably the most emphatic endorsement by the people that has ever been recorded in the annals of electioneering in this Commonwealth. This policy is well defined, clear cut, and unequivocal. It is not a policy the potential usefulness of which is warped by the narrowness of sectional thought. It is not a policy foredoomed to failure by the parochialism of its sponsors; it is a policy which is national in its conception and in its aim. It was con ceived by men whose ability is unquestioned, whose outlook is essentially Australian, whose personal integrity is unimpeachable, and whose high motives of unselfishness are beyond doubt. This policy is not aimed at the achievement of cheap popularity by the application of mere palliatives, the effects of which will soon pass; but is an attack upon the basic causes of our country’s ills with a view to the permanent amelioration of the sufferings of the people and the restoration of general prosperity to the whole community. The emphatic endorsement of this policy by the people was immediately followed by a brighter tone in business throughout the Commonwealth, by an improvement in the value of Commonwealth stocks, and by the re-opening of the Government Savings Bank of New South Wales under the aegis of the Commonwealth Bank. We regard these events as a happy augury for the future. The people, generally speaking, have confidence in the present Government, and look to the future with renewed hope. But wo cannot live by faith alone, and the Government realizes that the present economic condition of Australia must be faced fearlessly. It will not be blinded by the optimism which the events of the last few weeks have created. It recognizes that the economic position of Australia is still critical, requiring the most delicate handling, and that any recovery or return of confidence must be gradual, requiring to a high degree courage and fortitude on the part not only’ of our political leaders but also of every section of the people themselves. The Government is prepared to face the position with determination, and a full realization of its -responsibilities. To my mind an interesting and important light is thrown upon the present position of Australia by an examination of our export trade over a period of years. Taking a triennial average, we find that from 1914 to 1929, Australia’s export trade increased in volume by approximately 65 per cent. Over the same period the export trade of Canada increased in volume by approximately 210 per cent., and that of New Zealand by approximately 150 per cent. The official figures for 1930 and 1931, I understand, are not yet available for all these countries, but the evidence is that while their trade suffered seriously during that period, Australia’s trade suffered even more seriously than did that of, either Canada or New Zealand. lt is therefore evident that, during the past fifteen or twenty years, Australia has suffered a very definite trade lag, and that in the field of commerce it has been outstripped in an astonishing manner by sister dominions whose industries closely resemble ours, and whose resources are certainly no richer than ours. It must also be remembered that during the period over which the volume of Australia’s exports increased by approximately 65 per cent., our national debt increased by more than 200 per cent. In view of these facts the Government realizes that the social and economic structure of Australia is badly in need of a complete overhaul, with a view to the stimulation of private enterprise, and the creation of greater national efficiency. Australia has suffered acutely during the last two years as a result -of the drop in the prices of our export products. Unfortunately, there seems to be no immediate prospect of any substantial increase in export prices. The policy of the Government is, therefore, to encourage private enterprise, and particularly, to increase our income from external sources by the stimulation of our export trade. But a3 trade is made up almost entirely of products of the soil, I submit that one of the greatest problems confronting the Government is the rehabilitation of rural industries. A proper understanding of the importance of this problem can be obtained only by a knowledge of the fact that there can be no real recovery in any industry, and no permanent absorption of unemployed, until rural industry is again placed upon a sound basis. Rural industry in the past has been the fount of all our blessings; it is the foundation upon which the whole of our economic and commercial architecture rests. In happier days, it was the bulwark of our prosperity; to-day it may, perhaps, be regarded as our last line of defence against unparalleled disaster. And yet the difficulties confronting rural industry are such that it cannot indefinitely maintain its present position unless relief is speedily forthcoming. I submit that the only sound way of providing relief is by enabling primary producers to reduce their production costs, and so adjust rural industry to the lowered value of its products.
I speak feelingly because, during recent years, I have experienced all the bitterness, and suffered all the uncompromising hardships of life on the land. During that period I have marvelled at the courage and tenacity of the mcn and women out-back, for whom life seems to hold little but drudgery and disappointment, but who yet refuse to admit defeat, oven though the odds are overwhelming and the fight apparently hopeless. In 1’927 my wool clip averaged 19-£d. per rb.. in 1928, it averaged 15id.; in 1929, 10fd., and in 1930, it averaged only 6 1/2d That is an example of the calamities which have overtaken rural industries during recent years. Nor is that an isolated case. It can be accepted as applying generally to rural industries throughout the country, but is not confined to rural industry alone. It has affected almost all other primary products in a similar way, and it gives a vivid idea of the slender thread by which such industries hang at the present time.
Notwithstanding the drop in the value of primary products, the only contribution that has been made during the last two years to the reduction of costs of production has been -made by the employees engaged in rural industry, who have accepted lower wages; but any gain ro the farmers in that respect has been more than counterbalanced by increased taxation. I hold the opinion that the employees engaged in rural industries should not be the only ones required to contribute towards lower production costs, and it is therefore gratifying to learn that the Government will take immediate steps to revise the tariff along lines which will make it more equitable, not only to primary producers, but to the consumers also, and to those outside Australia with whom we wish to trade, who to-day harbour a hot resentment against Australia for the restrictions which the Australian tariff places on legitimate trade. Such a revision of the tariff as has been outlined will also pave the way for greater Empire trade reciprocity. In this sphere I consider that the possi- bilities of Australian trade are unbounded. We need only look at Great Britain’s annual trade in foodstuffs to realize how great is the market which awaits us. Each year she imports foodstuffs to the value of approximately £450,000,000. but Australia’s share of her annual disbursements for food amounts to only 3 or 4 per cent. It is vital to our wellbeing to increase that trade, but the only way in which we can do so is by placing rural industries on a sound basis, and by looking to the efficiency of our production and marketing methods.
That all is not well here may be gleaned from an examination of our frozen meat trade. In 1914 Australia was exporting considerably more frozen meat per annum than New Zealand. Since then our frozen meat trade has declined year by year until to-day Australia is exporting 45 per cent. less by weight of frozen meat than eighteen years ago. On the other hand, the export of New Zealand meat has expanded, until to-day New Zealand is exporting considerably more than twice as much frozen meat by weight each year than, is Australia. The uniform system of grading which was instituted some years ago in New Zealand has enabled buyers of frozen meat in any part of the world to cable an order for meat of any description, stating the grade and quality required, knowing full well that when the consignment arrives it will conform in every particular to the grade specified. It is in this way that a country’s trade is built’ up. It is largely because the Australian meat trade has never been properly organized that it finds itself in its present deplorable condition. I have had some experience of this matter. I was in the veterinary service of the New Zealand Government when the meat grading system was established, and I assisted in the training of the first batch of graders who went out. Therefore, from my own knowledge and experience, I can vouch for the benefit which has been conferred on the New Zealand meat trade by the introduction of this system. Australia would do well to follow the example of New Zealand in this respect. If Australia could increase her share of Britain’s food imports to 15 per cent., a revolu tion of the right kind would be achieved in this country. It would mean that our rural population could be doubled;, our non-paying railway lines could be placed upon a sound financial basis, our land settlement schemes would cease to be the tragic farce they are to-day, taxationcould be reduced, the output of our factories could be increased, and, as a result, the price of their products reduced, and our unemployed could be absorbed in the exploitation of the untapped natural wealth, such as the shale deposits at Newnes. These are not idle dreams or futile speculations, but are definite possibilities of the near future. Their realization, however, is entirely contingent on a great national effort embracing revised tariffs, lower production costs, and greater efficiency in marketing, coupled with uniform working conditions, a stable exchange rate, rigid governmental economy, and the balancing of budgets.
Recent developments with regard to Britain’s fiscal system, and the approach of the Imperial Economic Conference at Ottawa open up possibilities for Australian trade of an unprecedented character. But we must show Britain and the world that we are deserving of the fruits of those opportunities before we shall be allowed to enjoy them. I rejoice that our representation at Ottawa and Geneva will be entrusted to such capable men as those who have been chosen to labour in our interests there. I applaud the decision of the Ministry to be represented in London for the time being by a cabinet Minister. I feel confident that these gentlemen will serve Australia with honour and distinction, and I am convinced that they will, in the truest sense of the term, be empire builders. It is vital, however, that their efforts be not stultified, or their path made more difficult, by the shadow of default or by the bitterness of party or factional recriminations at home. Shakespeare has reminded us that -
There is a tide in the affairs of men,
Which taken at the flood leads on to fortune.
A feeling is abroad that Australia is about to be presented with the greatest opportunity for trade development in her history. It is the national obligation of every Australian citizen to do all that is possible to help Australia to take the fullest advantage of this opportunity, lt may be that the present will be the most momentous of all Commonwealth parliaments. As a new and young member of this Parliament, as yet untouched by the cynicism which, I understand, parliamentary life has a tendency to foster, I appeal to all honorable members to bear in mind that possibility, to remember the great responsibility it places upon them, and to allow their words and actions to be shaped not so much by party feeling as by national sentiment. In this manner we may all share the very great privilege of doing everything a parliament can do to set Australia’s ship sailing home again ou the flood tide of renewed prosperity.
.- I second the motion that has been so ably submitted by the honorable member for Macquarie (Mr. John Lawson), and I feel particularly pleased to be associated with the honorable member in connexion with this motion, because he and I represent, to some extent, the young brigade which has just recently been returned to this Parliament. I have no doubt that all honorable members welcome the action and example of the young men of Australia who have offered their services in the interests of their country, and are taking a deep interest in its welfare. Their action augurs well for the future of Australia, because the problems that are arising will, I feel sure, demand the attention of men of the younger generations, who may be able to consider national problems from new angles.
The Speech of His Excellency the Governor-General expresses in general terms the action which the Government intends to take, and the legislation which will be introduced into this House in the near future. The programme outlined is, of course, more or less of a general nature; but it is framed on sound lines. When it has been put into effect, it should assist materially in removing some of the distress and difficulty that now confronts us, and it should usher in a somewhat brighter period. Possibly there has never been a time when the people have viewed the issues raised at an election, with such intense interest ae they showed at the recent poll. At the 1929 election, the people voted more or less for one plank of a policy, and failed to look into other and equally vital points of the policies of the opposing parties. In addition to that, they failed to realize the seriousness of the financial and economic position confronting Australia. This, added to the huge array of promises that were made, obscured their vision, and adversely affected their judgment. On this occasion, however, the reverse was the position. The issues raised were of wide interest to the people, and their vote was a sound and intelligent one; in. fact, it may be said that the last election was a triumph for democracy - not an uninformed democracy, or one having a narrow view, but an informed democracy which reflected the better side of the nature of the Australian people.
It will be realized that the main causes of the depression in Australia to-day are international. If the world is to emerge from the present period of depression, it must be as the result of international action. Therefore, I am pleased to note that this Parliament will send representatives abroad to discuss such subjects as disarmament, and also, I hope, reparations. These subjects are closely allied, and the matter of reparations is intimately related to the great problem of currency. It seems absurd that we should have an abundance of production, and yet not have the means of exchange. These problems are of vital importance to Australia and to civilization, and we should bend our energies to bringing about international co-operation for their solution.
The important subject of the financial situation of the Commonwealth, and the unemployment problem, cloud all other issues. They are by far the mo3t serious that the present Government will have to face. I am glad to know that, on the financial issue, the Government intends to follow along the lines laid down under the Premiers’ plan. It proposes to live within its means, and, further than that, I hope that it will reduce the cost of administration as far as possible. We must realize that taxation has now risen to a point at which it is definitely the cause of, and not the cure for unemployment. While the Government must try to live within its income, it must also strive, by economy, to lighten the crushing burden of taxation which now rests on private enterprise. It is said by some persons that, by bringing economy into government, purchasing power will be reduced, and that thi3 will add to unemployment; but I suggest that economy in government will make available additional money for private enterprise and for production, as well as provide increased funds, ultimately, for the employment of the people. The unemployment problem can be solved only by private enterprise. Any measure adopted by governments to that end must be of a purely temporary nature. Therefore, I am glad to notice that the Government intends to apply economy measures, and to live definitely within its income.
I am sure that we all deplore the attitude of the Government of New South Wales in failing to honour the promises given by it to observe the terms of the Premiers’ plan. We regret the stigma that has been placed ou the people of Australia as a whole by reason of the fact that that State has openly announced its intention to default with regard to its overseas interest payments. The attitude of the Government of New South Wales is adding materially to the difficulties of Australia, and it is to be hoped that at an early date the people of that State will have an opportunity again to exercise their judgment, and give evidence at the ballot box of their true character.
I now come to another subject which, after finance and unemployment, is of the utmost importance; I refer to the tariff. This matter must be definitely attacked by this Parliament if we are to place our economic system on a stable basis. This subject, more than any other, must be courageously and intelligently faced by the people. A group of economists, in 1929, reviewed the tariff system, and pointed out that in 1927-28 the excess costs of the exporting industries of the Commonwealth, on account of the tariff, amounted to, roughly, 8 per cent. To-day we know that the value of our main exports, wheat and wool, has fallen to a very great extent, and we are also aware that the tariff has been increased. It is instantly apparent to every honorable member that the devising of means of maintaining and increasing the volume of exportable products of all kinds is vitally important. Therefore, it is essential that we should do everything possible to relieve the burdens now placed upon those industries, if we are to save Australia from default. It was also pointed out by the economists that the 1927-28 tariff could not be raised without seriously interfering with our export industries. I do not intend to discuss that subject further at this juncture; I am content to say that it is apparent that if we are to provide funds in London to enable us to meet our interest payments overseas, we must place our export industries on a sound basis, in order to escape national default and dishonor. There are two ways of bringing about tariff reform. There is the haphazard and hasty method; but I do not recommend that that course should be followed. We must adjust the tariff on a scientific basis. Hasty action would result in a further loss of capital, and would further disorganize industry and increase unemployment. It is essential that we hasten slowly, and pay due regard to the recommendations of the Tariff Board. If we will place the horse before the cart, instead of the cart before the horse - if, in other words, the export industries are given due consideration . in economic policy, we can accomplish a great improvement, and the protective system will be on a sounder basis. Involved in any policy of tariff reform is the development of Empire preference, and I welcome the Government’s decision to be strongly represented at the forthcoming economic conference. One of the most encouraging features of the economic outlook is the desire of the British peoples to establish closer trade relations, and I am confident that, despite the difficulties to be overcome, great good will result from the gathering at Ottawa. The coming together of the British peoples will not only give advantage to the dominions, but will give renewed hope to the world for the advancement of freedom and civilization.
The aim of this Parliament should be to reconstruct down to a basis in keeping with our finances, and to allow the utmost freedom to private enterprise. Industry cannot prosper if it is hampered by constantly changing legislation and governmental interference. We should seek to give stability to private enterprise ; the captains of industry must be assured that they will not be subjected to undue interference by the legislature or the Government, and that they are free to plan ahead to increase production and restore prosperity. The present, more than any other time in the history of Australia, calls for statesmanship; the problems that confront us must be resolutely and courageously faced, and I venture to suggest that in applying themselves to this task, honorable members should not regard themselves as merely representatives of parts of Australia. Although we have been chosen by individual electorates, our duty is to work for Australia as a whole; we should endeavour to take a national view of our problems and deal with them without fear of the consequences to ourselves. If, adopting that attitude, we strive to reconstruct the economic edifice on a sound scientific basis in accordance with the necessities of the times, giving freedom and stability to private enterprise, I am confident that the initiative, resource and public spirit of the Australian people, will increase production and employment and usher in a new era of prosperity.
.- I hope that I shall not be suspected of patronage if I compliment the mover and seconder on their maiden speeches in this National Parliament. Both the arrangement of the matter and the manner of their speeches were excellent, and they have initiated this debate on a high level.
At the recent election, the people declared in favour of a change of government, and it is not for us to challenge their decision. As democrats we accept the verdict of the people; if we think they have made mistakes, our duty is to point them out. In the meantime we must do our duty in a period as critical as any in the history of this Parliament. Upon, the Government and its supporters rests the primary responsibility for administration and legislation. But every honorable member has at this period more than at any other, a grave responsibility; and it is the duty of all of us, regardless of the parties to which’ we belong, to assist in solving the problems of the nation. Criticism will be essential; constructive criticism will be most helpful, but at times destructive criticism may be necessary - indeed, 1 prophesy that it will be required sooner or later in this Parliament - but whether our comment be constructive or destructive, it should be legitimate, fair, and honest. That will be the attitude of myself and my supporters - a small band, it is true, but representing a great cause, that will assert itself again in Australian politics.
I agree with the opening statement in the Governor-General’s Speech that the matters of transcendent importance at this juncture are the establishment of sound finance and employment for the workless. The two- problems thus presented are interwoven; they react on each other, and have a definite bearing on many others. In a general declaration they are placed in the forefront of the Governor-General’s Speech, but apparently we must await the future action of the Government to learn what it proposes to do. The Speech gives us no indication of how these two important subjects are to be approached, but the Prime Minister yesterday stated in reply to a question that unemployment will be discussed at the next Premiers Conference. I agree that it is a problem which affects all the Governments of Australia, all industries, and all sections of the community. For the last two years Commonwealth and State Ministers have been in almost constant conference on finance and unemployment. Seven groups of Ministers, representing Governments of different shades of political opinion, met with their advisers at the conference table, and seriously sought for a solution or partial solution of this most acute and pressing problem. Knowing how difficult it is, and the responsibilities that rest upon the Prime Minister and his colleagues, I am not going to pretend that they can solve the problem overnight, or by merely waving a wand. I know that they cannot do that, although such an impression was created amongst the people during the election campaign. The discussions at successive conferences of Commonwealth and State Ministers revealed that Australia was in an appalling position, and getting deeper and deeper in the mire. Perhaps I shall assist the House to get this matter in proper perspective, and afford some guidance for future action if I review briefly what occurred during the two hectic years in which I was Prime Minister. The mover of the motion rightly said that this National Parliament must tackle the problem of unemployment free of party considerations.
-. - And, therefore, we should not wait for the Premiers Conference.
– We should not wait for anything if immediate action is possible. I agree, however, that representatives from all Australian Governments meeting in conference may be able to do much. I am concerned, not with the slight delay that may take place before such a gathering can assemble, but rather to learn what constructive proposals the Commonwealth Government will place before it. All State Governments have, during the last two years, been doing their utmost to cope with a critical situation, but with the exception of a few relief works they could do no more than provide mere sustenance, and a pitiable sustenance at that. Yet sustenance and the expenditure on relief works are costing State Governments about £12,000,000 annually, and the present outlook is that that amount will be increased. The Commonwealth Government during the two years in which Labour was in office, granted direct to the States for relief works £2,500,000, and, in addition, expended about £250,000 on works in federal territories. Simultaneously, old-age and invalid pensions increased by £2,000,000 a year. People who previously were too independent to apply for a pension, or could be maintained by their families, were compelled to seek this aid because their sons and daughters were out of employment. The consequence is that notwithstanding the reduction in the amount of the pension, the Commonwealth is paying during this financial year £2,000,000 more than was expended on pensions in any previous year. Yet this expenditure on sustenance, relief works and pensions was but as a drop in the ocean when compared with the appalling extent of unemployment. I do not agree with the implication in the Governor-General’s Speech that the restoration of employment is to be effected by private enterprise almost exclusively. It is true that the majority of those who are out of work were formerly in private employment, but we must not overlook the fact that approximately 100,000 of them were in government employment three or four years ago. Approximately £30,000,000 of money borrowed overseas was being spent annually by governments, principally State Governments, on public works which gave employment’ to about 100,000 men. That expenditure’ was reduced first to £15,000,000, and this year to £9,000,000; what it will be next year, who can say? In addition to the discontinuance of public works, factories were closing down or reducing hands because of the volume of imports. The Government amended the tariff to remedy that state of affairs, and the present schedule is only now beginning to yield results, the warehouses having disposed of their accumulated stocks. When, however, the manufacturers were in a position to supply the market with the goods that formerly had been imported, the demand had decreased, because of the diminution of employment. There were unemployed who needed those goods and were willing to buy them; who were willing to work in order that they might do so, but to whom the opportunity was denied. My Government sought a remedy. It approached the manufacturers, the bankers, and every other representative section of the community. The manufacturers and traders indicated that they were willing to put the wheels of industry in motion, but that they wanted customers to whom to sell their goods. They were not prepared to manufacture goods merely on the speculation that if people were placed in work they would become customers.
My colleagues and I arrived at the decision that it was the duty of the Government to give a lead, and the Commonwealth Government urged the State Governments to put in hand public works. It was not proposed to return to the extravagance of the past. I remind honorable members that the rapid recovery that took place after the smash of the ‘nineties was directly attributable to the expenditure of money on useful public works. The Premiers prepared a list of such works, designed to increase future production. Then arose the question, “What about the money?” We approached the private banks and the Commonwealth Bank. The private banks stated that they could not advance any more money, and showed us figures disclosing their advances against deposits. They made out a very good case. They emphasized that if the Government would undertake to curtail State and Commonwealth deficits, money would be made available for private enterprise, hut insisted that neither the Commonwealth nor private banks would longer finance the recurring deficits of the Commonwealth and State Governments. In 1930-31, the’ Governments had a deficit of £20,000,000, and were faced with a deficit of approximately £40,000,000 for the current year. So, arising out of the necessity of the circumstances, the Premiers’ plan was born. Every government in Australia participated in it, and deficits were cut down. I believe that, with the addition of a few million pounds representing reduction of interest, the Commonwealth will probably balance its budget at the end of this year. Some State Governments have done very well; others not so well. There was not the slightest doubt in the minds of every Premier who attended that conference that when the governments asked public servants, pensioners, bondholders, and every other section that received government payments to accept a reduction, there would be a release of credits which would be diverted to useful public works and the relief of unemployment. We took the matter up with the banks, to see what funds they would make available for this purpose, and to start enterprises. The result was unfavorable. We then discussed the problem with the management of the Commonwealth Bank, and the explanation that we received from that source - it was legitimate, and I am not now criticizing it - was that it was tied down by legislation passed by this Parliament, and particularly by an amendment that was made in another place to a bill brought down by my Government’, which insisted that the Commonwealth Bank should not only retain a gold reserve, but that it should revert, in a short period, to a gold reserve of 25 per cent. That tied the hands of the management of the bank, and left it with but a small margin of gold - approximately £15,000,000- to be held against possible demands upon the bank - at a time when banks throughout the world were tottering; when some banks in Australia were closing their doors.
We then approached this Parliament with a proposal that had been carried by a majority at the Premiers Conference - the Fiduciary Notes Issue Bill. In that measure was a provision that the Commonwealth Bank should make advances, and protect itself against any possible run on its resources by having the authority to issue additional notes to the extent of £18,000,000. It was never intended that, those notes should be issued, except under exceptional circumstances. I admit that that was no sovereign remedy, but it was put forward in an endeavour to smooth the way, and to place 40,000 persons in employment. It was estimated that, as a result, employment would be provided for a further 40,000 within twelve months. That project was rejected in another place. The Government then modified its proposals. It had been the intention to allocate £6,000,000 of that £18,000,000 to relieve wheat-farmers, and to expend the remaining £12,000,000 on relief works at the rate of £1,000,000 a month for twelve months. Again the Premiers were consulted, and they were unanimous in urging that the Commonwealth Government should ask the banks to provide £8,000,000 for the purposes that I have outlined. The banks agreed to provide £3,000,000 to ‘the wheat-growers, and to advance some money to carry on loan works in hand to the end of the year, but they refused to provide any money for new works to absorb some of our unemployed. That was the position in which my Government found itself, and that was the action taken and the efforts’ made. I now ask this Government whether it has any alternative to the scheme that my Government proposed to the Premiers Conference. The problem still awaits solution. On the 4th December last the Prime Minister declared -
By a change of Government every nian out of work -will at once bc brought’ nearer to re-employment.
He also stated -
Restore confidence, and the money will flow into industry. Men will begin to be employed, and the whole thing will grow like a snowball.
I quote those words in the hope that the Government will devise means to carry out those assurances. If the Prime Minister can solve the problem in the main, and bring to fulfilment his eloquent promises to relieve the distress of the unemployed, I am content that he should remain Prime Minister for life. I pass over the fulsome assurance that re-employment would be found for all “ at once.” That phrase is capable of different interpretation by different people. I urge that this Parliament should be taken into the confidence of the Government, so that the adminstration may have whatever little wisdom there is on this side added to the collective wisdom of those who sit on the Government benches.
The proposals of my Government were denounced as inflation. Technically and actually they were a form of inflation, but inflation becomes serious only when it makes prices soar unreasonably. At all times I have determined that while [ ha ve responsibility I shall never consent to Australia following the lead of some other countries by adopting a policy of inflation that will wreck its financial structure. I realized the consequences. I saw the effects of inflation during the war, which was financed on a policy of inflation. I know that if there is wild inflation there must be a period of deflation. You cannot climb the hills without also going down the valleys. But there is a vast difference between wild inflation and a scheme of sound finance intended to stimulate industry and to prevent our remaining for ever in the valleys. Commonsense is the governing factor. I see greater danger in allowing things to continue in the depths of degradation than in trying to stimulate trade and lift matters to a normal standard, as is now being attempted by other countries.
What are the proposals of the Government, not only with regard to the Premiers Conference, but with regard to the forthcoming conferences overseas? The right honorable member for Flinders (Mr. Bruce) is to be our representative abroad. I wish him all success at Ottawa and hope that he will do the best for Australia. A very important problem is involved. We have to consider a monetary problem which is more international than national. I should like to hear from the right honorable member for Flinders what he is going to do when he appears before those conferences. I am aware that he must keep some matters confidential. But there are others upon which he can enlighten us. The monetary problem is the basis of our trouble. We have no other problem, no problem of production. That which confronts us is of distribution, of finding sufficient means of exchange to buy the goods that this country is capable of purchasing. I should like to know what will be done. My Government had not control of the Federal Parliament. This Government has control of both Houses. A lead has been given. Great Britain has departed from the goldstandard. Everybody cheered. Yet everybody denounced my Government when it put forward a similar proposal. Sterling has fallen considerably, Australia- has benefited thereby, because the departure from the gold standard by Great Britain has raised internal prices, including those that we are receiving for our exports. So we too, cheer. Yet this is inflation. It has not brought ruin to Great Britain, because the inflation is controlled. Great Britain has increased its fiduciary issue of notes recently. A week ago I read that the Government of the United States of America contemplates introducing to Congress a measure for the extension of credit to the amount of £500,000,000, together with a reconstruction scheme involving £400,000,000 designed to help that country out of its financial crisis. Of course, it may be said that America has hoarded gold and can safely take such a step. That might make it apparently easier, but gold is not the great necessity that some people imagine. We in Australia have already parted with a lot. of gold and nobody has missed it. Undoubtedly, gold is an important commodity to hold in reserve when a country is prosperous, in order to adjust its international trade balances when it experiences bad times.
To hold gold while people are going hungry, and not to use it for the purpose for which it is intended, is not a sound practice. It is not essential that gold shall be held against a note issue, for a note issue can be regulated and controlled by statute just as effectively, and, in some instances, more effectively, than by the holding of a fixed gold reserve. It is possible to have the wildest inflation and yet to have a big gol’d reserve. There can be too much restriction of the currency with a gold reserve. We know very well that far-reaching movements are taking place in finance all over the world; but 1 have not time at my disposal at the moment to elaborate this point. I suggest that the Prime Minister and Treasurer should indicate clearly the views of the Government upon the whole subject of government finance, state the definite ways in which it proposes to put its policy into effect, and give the fullest opportunity to the House to discuss the whole subject.
The Leader of the Government, and his supporters, told the people during the election campaign that the policy of my Government was not sound, and the people accepted his view on that subject. Having taken the responsibility of condemning the soundness of the policy advocated by the previous Government, this Government must now also take the responsibility of submitting its alternatives to that policy. So much at least can bo asked and expected of the Government. We should be told definitely how it intends to endeavour to solve, at least partially, this terrible problem of unemployment.
It is true, as the Prime Minister has said, that private employers provided work for the majority of the people who are to-day out of employment; but a lead must be given to them to re-employ these men. A start must be made somewhere. Large public works could be put in hand which would assist future production and provide useful public utilities. It is true that the smash of the ‘nineties was not world-wide as this one is. It is also true that we cannot solve all the problems that face us in this country. But we can at least do something to reduce the misery and alleviate the suffering of the people. Seeing that the Government has control of both Houses of this Parliament, it is not too much to ask of it that, working in conjunction with the State Parliaments, it shall begin a period of definite reconstruction within the nation, pending international reconstruction. I do not, for a moment, suggest that we should return to the policy of borrow, boom and extravagance, which has brought us to our present position, and for> which we are now paying so dearly; but we can do something.
In the “ City Notes,” published in the London Times of the 21st December, 1931, some comments were made on the gold standard. Referring to the world’s economic troubles, the writer of that article said -
Supplies of wealth are ample, actually and prospectively; scarcity only applies to the medium by which they are exchanged or distributed.
The writer went on to say that -
The quantity of money must be increased in order to raise prices sufficiently to lighten the burden of debts.
That can be described as inflation just as fairly as any proposal put forward by the Government which I led for two years. Private enterprise can absorb many of of the people who are to-day out of work. I, therefore, urge the Government most earnestly to live up to the cautious words which appear in the Governor-General’s Speech with respect to the tariff. I ask it to act cautiously, and not to break down the protective wall which has been built round Australian industries. If it removes that protection, private enterprise will not only not be able to absorb any of the people who are at present out of work, but it will be forced to reduce still further the number of persons employed, and throw them on to a cold world. There can be no denying that effective tariff protection is essential to enable private employers to find work for our people.
But there is another thing that we need in addition to tariff protection, and that is peace in industry. The Government should have hesitated before it cancelled the regulations controlling work on the waterfront, which had been formulated by my Government after many months of very careful consideration of the whole situation. Those regulations were devised with the object of preserving peace on the waterfront, and they achieved that purpose. They also made the work on the waterfront much more efficient than it was formerly. The Government should have left things as they were, at least until it had thought of a better solution for the problem than that which we had applied to it. By its action it has caused chaos on the waterfront, and interfered seriously with the efficiency of the service performed there.
I wish now to refer to the announcement of the Prime Minister, that the Assistant Treasurer (Mr. Bruce) is to go to London after he has attended the Ottawa conference, and remain there permanently as a resident Australian Minister. I hope that an opportunity will be given to Parliament to discuss this very important change before the right honorable gentleman leaves our shores. I say, definitely, that I do not agree with the principle of this proposal. I have not time on this occasion to discuss the subject fully, but I ask the Government to allow Parliament to discuss it before the proposed step is taken. I agree that it is wise for us to be represented at the Ottawa conference, and that a member of the Government should visit London, and, possibly, New York, to discuss and deal with the financial business that must be transacted in those centres in the near future. We have a number of loans falling due in both England and America, and it is wise, I think, that the conversion negotiations should have the attention of a member of the Government. But that is a very different thing from appointing a permanent resident minister in London. There is, of course, need for us to give the closest attention to the overseas loans falling due, and to consider the possibility of a general overseas conversion loan. I am emboldened to suggest that a general conversion loan could be floated in London, because we have already shown the practicability of such a thing in Australia. Having secured the approval of our local bondholders to such a proposal, I think that we have every justification for asking our overseas bondholders to follow their example. I am also emboldened to express this view because of a statement made by the Prime Minis ter in a speech he delivered in Adelaide some little time ago. He was reported in the Adelaide press to have stated -
That ho would have no hesitation in saying that he could go to London, and not only clean up the deficit there, but carry through a large conversion loan at a substantially reduced rate of interest.
The honorable gentleman also said -
I can then come back to Australia and appeal to the bondholders on patriotic grounds for a loan at a lower rate of interest.
What the honorable gentleman put second my Government put first. We believed that we should put our own house in order before appealing to the bondholders overseas, and we gave successful effect to that policy. One part of the proposal of the Prime Minister in his Adelaide speech has thus been put into effect. I should like to know whether it ia the intention of the Assistant Treasurer to attempt to put the other part of it into effect when he goes to London.
I wish to emphasize one matter referred to in the Governor-General’s Speech. It was said by His Excellency that if we are to place our finances on a sound footing, it is essential that we adopt a programme which will restore confidence, and put our people back to work. But we must also restore confidence overseas. We were told during the election campaign that it was essential that a change of government should be made if confidence were to bc restored. It was also said that if we had honest government confidence would be restored immediately. We have had a change of government; but I suggest that one of the first administrative acts of the new Government struck a most deadly blow at the confidence which overseas people had in Australia. Shortly after this Government came into office it defaulted; for the first time in the history of the Commonwealth. This default, which was due to an administrative act of a Government which has paraded its honesty, dealt a heavy blow at Australia’s credit. I do not intend or desire to lift from the Government of New South Wales the responsibility for its default. That Government defaulted when my Government was in office, and we paid the interest due on its account on the date upon which it fell due. We did not parade our honesty, or our desire for a restoration of confidence; but we took every care that there should be no default. I can see no reason why this Government should have allowed default to occur. Why was not the money paid when it fell due, seeing that it was available? It has been suggested that the default was permitted in order to teach the Government of New South Wales a lesson. But that Government did not need any lessons on how to default. It had defaulted previously. I understand that we shall have an opportunity to speak further on this subject at a very early date, and I shall not say any more about it at the moment except that the action of this Government in allowing the default to occur was a most regrettable blunder of the first magnitude. I do not suggest that the Government will not pay the money that is due, for I know that it will do so; but if it can pay the money a few weeks after it became due why could it not have done so on the due date and instituted afterwards proceedings against. New South Wales for the recovery of the amount? If it had done that, it would have preserved the national honour of this great country.
During the election campaign high hopes were raised in the breasts of our people. It was placarded all over the country that “ a steady job for all “ would be found. There are 350,000 Australian citizens now waiting for the fulfilment of that promise. Seeing that the Government has control of both Houses of the Parliament, and claims to have the confidence of the financial institutions, I urge it to make an immediate move to carry out its promises. It will receive our support and commendation for every sound action that it takes to relieve unemployment in Australia.
– No leader of a government could possibly find fault with the spirit in which the Leader of the Opposition (Mr. Scullin) has criticized the policy of this Government. However much we may differ in our views of the important questions which will be placed before this Parliament from time to time, it is right that we should approach consideration of them in a genuine public spirit. We are all in duty bound to deal with these subjects in the spirit which the Leader of the Opposition has displayed this afternoon.
Before I proceed to answer such criticism as he has directed to the policy of the Government, I add my congratulations to those which he has offered to the mover and seconder of the adoption of the Address-in-Reply. It is a fine thing that young men are coming into the political life of this country. I believe that there is a more general public interest taken in political matters throughout Australia to-day than ever before in our history. The younger generation of Australians, of whom the mover and seconder of this motion are typical, are bringing to bear upon our problems a fresh thoughtfulness which must beneficially influence the proceedings of the National Parliament. I congratulate both these honorable gentlemen upon the ability with which they have placed their views before us, and prophesy for them a long life of political usefulness.
The Leader of the Opposition offered very little criticism of the Government’s policy, and, indeed, until the details of that policy are made known, no other, kind of criticism was possible. I believe that the party which he leads is just as greatly concerned as the party which I have the honour to lead about the two outstanding questions with which we have to deal, government finance and unemployment. The Government has said, through His Excellency the GovernorGeneral, that one of the first things to which attention will be given is the maintenance of financial stability. The Governments of the Commonwealth and the States are passing through very difficult times, and they realize the necessity for cutting down expenditure and living, so far as possible, within their means. They have, speaking generally, entered into an undertaking that they will adhere to the plan of national rehabilitation which has been adopted. This Government will carry out that policy to the best of its ability. The Leader of the Opposition has said that the Commonwealth will be just about able to balance its budget this year, allowing for the rebate of payments which it will obtain as a result of the Hoover plan. That is scarcely accurate. The
Government will not be able absolutely to balance its budget this year; but it will very nearly do so. But I have said in reply to requests that have been made to me for relief from taxation in certain directions, that, in view of the situation which confronts us, we cannot at present give much relief. There is every indication that in this financial year it will be extremely difficult for the Commonwealth and the States to carry out the undertakings and the plan agreed to at the Premiers Conference. At this stage it is just as well for me to warn honorable members and the country generally that the Commonwealth and the States may, if we are to adhere to the Premiers plan, have to perform further unpopular acts in the direction of reducing expenditure. Unless we are prepared to keep to the word which the Leader of the Opposition (Mr. Scullin) when Prime Minister gave on behalf of the Commonwealth to the Premiers of the States, greater trouble will arise, and financial disaster will follow. We shall have still more unemployment and distress if confidence in the words of governments is destroyed. Therefore, at the Premiers Conference, we made it perfectly clear that we would adhere to the plan agreed to by our predecessors, so far as the actual finances of the Commonwealth were concerned, and that we would, so far as it was within our power, see that the States carried out their undertakings. The Leader of the Opposition has, in respect of unemployment, said that he does not expect us to wave a magic wand and restore employment immediately. He has quoted an appeal that I made in a broadcast speech for increased employment.
– It was an appeal at the. elections.
– What the right honorable member has quoted is perfectly true, and let me say that the figures in respect of the dole in some of the States, at any rate, indicate that there has been an improvement consequent on the appointment of this Government. We shall endeavour to carry out honestly the undertakings that have been given to the States. We are certainly taking steps to lessen unemployment, but I take no responsibility for the action of the New South Wales Government and its effects upon other parts of Australia. So long as that State continues its present policy of breaking its undertakings, there can be no real hope for the rehabilitation of Australia’s finances.
– What undertakings?
– I am referring to the undertaking of New South Wales to give effect to the Premiers’ plan for reducing expenditure and meeting interest payments. The Premier of New South Wales definitely stated that he would accept the liability for the payment of interest so far as that State was concerned. But as that is a matter to be dealt with by legislation, I shall not discuss it now. The effect of the general policy of New South. Wales has been to injure the prospects of Australia generally. The Premiers plan provides that no particular section of the community shall benefit at the expense of another. Yet, to-day, an effort is being made in New South Wales to keep workers in employment at wages far in excess of those paid to the workers in any other part of the Commonwealth. As a result, unemployment and misery are increasing far more rapidly in New South Wales than elsewhere, which is something to be deplored by every individual and any government.
Mr.Rosevear. - Does the Prime Minister (Mr. Lyons) wish to reduce the Australian worker to the standard of the coolie ?
– We have no such intention, and the honorable member knows that perfectly well. We can no longer hope to continue the past practice of employing a large proportion of our workers on government undertakings. Our unhappy financial position is largely due to the attempts of governments to provide employment on works constructed out of borrowed money, the interest of which has to be paid by the taxpayers of this country. Too many millions have in the past been expended on unproductive works, which have robbed existing works of their reproductive capacity by coming into competition with them. Such is the competition of roads with railways, both works having been constructed out of borrowed money. If we follow that policy we shall sink further into the financial mire. The only way to increase employment is to improve conditions in private enterprise, thus enabling our unemployed workers to return to their former vocations. It will also be necessary for private enterprise to provide employment for a substantial proportion of our workers who were previously employed by the Commonwealth and the States on works constructed out of borrowed money.
– What are the conditions referred to?
– I refer to conditions under which private enterprise will be able to operate on a profitable basis in respect of both primary and secondary production. We cannot look to the restoration of employment while the present conditions make it impossible for private enterprise to employ our people, and while the unemployed are dependent upon the dole. The Government will aim at the restoration of prosperity in industry - the prosperity that Australia knew in other days. Until that is accomplished it will be utterly impossible to improve our financial position. The Leader of the Opposition (Mr. Scullin) has indicated what his Government did or tried to do in the direction of providing work for the unemployed. He stated that this Parliament destroyed his proposal for the issue of fiduciary notes to the amount of £18,000,000.
– My proposal was to give the right to the Commonwealth Bank to issue fiduciary notes.
– The object of the proposal was to expend that amount of money, or the bulk of it, upon the construction of public works.
– About £12,000,000.
– The Leader of the Opposition has admitted that his proposal, if adopted, would have brought about inflation. I have always been opposed, not tothe inflation of world’s prices for the purpose of restoring employment, but to anything in the nature of inflation that would increase the cost of production and make the position in Australia infinitely worse than before. If our primary producer is to compete in the markets of the world, his costs must be reduced. I would welcome any improvement in world’s prices, provided that it was not brought about by the issue of fiduciary notes or the releasing of any other kind of credit, the result of which would be to increase production costs in Australia and to add still further to the burden of our producers.
– Are not the proposals to balance the budget a form of inflation ?
– That may be so; but the more we inflate, the worse will become our position. Any money that we borrow must add to the responsibility of the Government. We have to pay interest upon loans, and that adds to the burden of taxation, which is something that we must avoid as far as possible. In saying that, I do not wish it to be understood that I am opposed to the construction of reproductive works out of loan moneys. What I say is that works which we sometimes regard as reproductive are not reproductive in the true sense of the word. Some works that are carried out by municipalities appear to be reproductive because those bodies have power to levy taxes on the community with which to meet interest and sinking fund obligations. Unless a scheme definitely adds new wealth to the community, it cannot properly be called reproductive.
– Is it not true that if we increase the number of workers wo must increase production in order to meet their requirements?
– I admit that there would be a demand for increased production as a result of increased employment on public works, but if the contention of the Leader of the Opposition were correct, we should need only to borrow millions of pounds on a much greater scale than before to employ our people and bring about an increased demand for production in order to supply their needs. That contention is untenable. The Leader of the Opposition has generously offered to co-operate with the Government in evolving a scheme of unemployment relief. I accept his offer, and shall have no hesitation in conferring with him and putting before Parliament proposals designed to increase employment. Unemployment directly affects the States, and that is why we have asked their representatives to meet us in conference. In view of the misery that will be suffered by the people during the coming winter as a result of unemployment, we must do all in our power to give them some relief. But let me repeat that, however determined we may be to keep to the undertaking given by our predecessors and the State representatives to live within our means, we cannot attempt to balance the budget while so many of our people are out of employment and living on the dole.. The two things have to be taken together; neither can stand alone. If unemployment such as exists to-day is to continue in the future, we had better give up all hope of balancing the national budget, or the budgets of the various States.
The Leader of the Opposition is concerned about the possibility of our interfering with the protection that has been afforded to various secondary industries in Australia. The policy that was outlined before the people of this country by the party on this side of the House, was that adequate protection would be given to Australian industries, and I repeat that assurance here to-day. What we do in regard to those industries we shall do, only after the closest investigation, and after consultation with and reference to the Tariff Board. We have said that we believe that tariff building has been too rapid recently, and that protection has reached too high with regard to certain industries. We have said that the whole matter calls for reconsideration, but we have made it quite clear that we do not believe that political action, nor anything which can be done by a particular Minister, should take the place of full and careful consideration of all the circumstances surrounding the industries to be protected. Although it is impossible to be more explicit at this stage, honorable members will later be afforded an opportunity of learning what the Government proposes to do in regard to the tariff, and of discussing in detail the Government’s proposals.
The Leader of the Opposition stated that he disagreed with the action of the Commonwealth Government in not immediately paying the interest in regard to which the New South Wales Government had defaulted. He suggested that we have done some damage to the credit of Australia. But the credit of Australia is higher now than it ever was during the term that the present Leader of the Opposition was in charge of the Government; and it will remain so because, by our actions, Ave shall show that we are determined to maintain the reputation of Australia so far as our own responsibilities are concerned, and that we shall insist upon other Australian governments doing the same. I commended at the time what the Leader of the Opposition did when he was Prime Minister in regard to meeting the obligations of a defaulting State. He did the right thing. I point out, however, that he had a number of days in which to make up his mind, and to consider the situation before New South Wales defaulted. We, on the other hand, had not more than a day to consider what should be done when, at the last moment, the Premier of New South Wales intimated that his government would not meet its liabilities.
– We had ten days; the present Government has had several weeks.
– Before the default actually occurred we had only one day, whereas the previous Government had ten days.
– Several weeks have passed since the New South Wales Government defaulted, and the money has not been paid yet.
– We believe that, by our action, wo vindicated the honesty and integrity of the Australian people, and, at the same time, emphasized the default of New South Wales.
– By allowing the Commonwealth to default also.
– No ; not by allowing the Commonwealth to default. We had to make certain investigations, and obtain certain information from the Premier of New South Wales, and now that the information is to hand, we are in a position to act in the best interests of the people of Australia. Moreover, when we have submitted to Parliament the proposals we have in mind for the enforcement of the financial agreement it will be seen that we intend to insist that in future all States shall honour their obligations as the Commonwealth has to do.
– Does the Government propose to afford honorable members an opportunity of discussing the appointment of a permanent Minister in London ?
– It is not proposed to depart permanently from the established practice. We propose to take the step of sending a Minister to London, because we realize, as does the Leader of the Opposition, that there are difficult financial problems to be solved in Great Britain. We feel, therefore, that, instead of selecting another High Commissioner, we shall do better by sending to London a responsible Minister who is in close touch with the policy of the Government. The saving which will be effected also weighed with the Government.
– Are we to have an opportunity of discussing the change?
– There is no need to discuss it, because it is not a permanent departure from the established practice. It is an emergency step to tide us over a few critical months, and no one who realizes the gravity of the position will cavil at sending abroad a responsible Minister associated with the Treasury, to carry on financial negotiations on the part, of the Government.
– We shall be governed from the London end.
– That is not so. The honorable member has read that in the Labor Daily, and repeats it parrot fashion. We shall continue to be governed from here, but the Minister whom we send to London will be in close touch with the Commonwealth Government in regard to financial matters.
The Leader of the Opposition (Mr. Scullin) asked what was the Government’s policy in regard to our overseas commitments. Were we, he asked, proposing to negotiate a conversion loan in Britain? He asked me for an assurance that the claim I made in Adelaide some time ago would be backed up by some action in London. I remind him, however, that when I made that statement there was every prospect of carrying the proposal into effect. The Leader of the Opposition knows very well that, even when he was in London, he thought that something definite could be done in the way of obtaining financial relief, but there were happenings in Australia which destroyed all possibility of carrying his proposals into effect. The failure of the previous Government to take the necessary action during those two precious months following the Premiers Conference of August, 1930, lost it a golden opportunity, because, in the meantime, the financial position of Britain herself was becoming so much worse from day to day that our chance of obtaining relief became slender, indeed. No one can suggest that the financial situation in London is as favorable now as before Britain herself came up against financial difficulties. In spite of that, I believe that we should have asked the overseas bondholders to make a sacrifice in the first place, and then have come back to the Australian bondholders. The Leader of the Opposition pointed out that we reversed that procedure. Well, I have no fault to find with that, but everything the Government’ can possibly do to obtain some relief in regard to our overseas obligations ought to be done.
– Does not the Prime Minister think that there would be a better chance of obtaining relief overseas if we could show that we had put our own house in order?
– The honorable member should have insisted on that when he was a member of the Government. We are sending the right honorable member for Flinders (Mr. Bruce) to London to explore every possible avenue in an endeavour to obtain relief for the Australian taxpayers. Honorable members know that as a result of the conduct’ of New South Wales, the credit of Australia overseas is always in danger of being damaged. In November of this year, £13,000,000 will fall due in London, and that is a New South Wales loan. The Commonwealth must negotiate for its redemption or renewal, and it is desirable that we should be directly represented in London so as to secure the best possible terms.
– We agree with that, but why appoint a permanent Minister?
– It is not proposed that the Minister shall remain in London for a fixed term. When his duties are discharged he will return to Australia, and whether it is advisable to keep a permanent Minister in London instead of appointing a High Commissioner is a question yet to be discussed. Before any action is taken, honorable members will be given every opportunity of discussing the proposal. I hope that the matter will not be discussed in a party spirit, but that honorable members will deal with it as the Leader of the Opposition to-day has done.
The Government will follow the policy outlined to the people during the last election campaign. We did not tie ourselves down to specific details; we outlined general principles, and asked the people to trust us to meet changing circumstances as they arose. The people have given us that mandate. They have given us the opportunity to face the problems of the day, and to apply such remedies as we think proper, rather than obey the behests of some tribunal behind the Government. We are free to accept the co-operation offered by the Leader of the Opposition to-day. We do accept it, and we believe that the position will improve as time goes on, so that when the Government comes to the end of its term it will be able to” tell the electors that it has kept the undertakings which it gave.
– I congratulate the mover and seconder of the Address-in-Reply on their maiden speeches. Both have distinguished themselves by the manner in which they have presented their cases to this House, and I trust that on many future occasions they will assist with their eloquence the deliberations of this assembly.
I must express my disappointment in regard to the Governor-General’s Speech, not so much for what it contains, as for what is omitted. I trust that before many months have passed, the Speech will be supplemented by a statement of government policy which will enable the Country party to give further assistance to the Government along the lines I shall indicate.
I congratulate the Government on its proposal to bring down immediately an Insurance Bill. Such a measure is long overdue. In 1929, the Bruce-Page Government brought down a measure dealing with the whole question of life assurance, and, during the last Parliament, Senator McLachlan and myself endeavoured to have passed insurance legislation that would enable the Commonwealth law to override that of the States, and provide a uniform law throughout Australia. I hope that that problem will be faced in the immediate future. Everybody recognizes that there is a definite threat of confiscation of much of the assets of the insurance companies - which are part of the bulwarks of Australian social life - in the proposal made in New South Wales that excessive deposits in cash should be demanded. I trust that the bill to be brought down will contain provisions regarding not only life insurance, but also fire and marine insurance.
I congratulate the Government on its proposal to deal, by means of a commission, with the subject of national broadcasting. During the election campaign I pointed out that the Country party was firmly of the opinion that any of the features which militated against the private contractors must go, and that the system adopted by the British Broadcasting Corporation should be installed in Australia in its entirety. I added that if broadcasting was to be removed from the exigencies pf politics, it must be controlled by a board operating upon a charter which gave it full responsibility over both the programme matter a.nd the technical administration, without interference directly from the Government of the day, or indirectly through the interference of the civil service which, in turn, could be nothing more than the mouthpiece of the Government. I am glad to see that action along these lines is to be taken.
I am also pleased to notice an indication in the Governor-General’s Speech that initial steps have been taken to coordinate the transport systems of Aus”tralia. The first steps in this direction were taken at the Premiers Conference in May, 1929, by proposals for the formation of a federal transport council, which was actually established at that time, and sat under the presidency of the honorable member for Gippsland (Mr. Paterson), who was then Minister for Markets and Transport. Although that council has been allowed to lapse for the last two years, I consider it essential that the transport costs of Australia should be brought down, and that the railway systems whose deficits are largely responsible for the deficits of the various governments of Australia, should he placed upon an economic and commercial footing by a real co-ordination of management and activity.
I note with- pleasure the statement in the Speech that legislation is to be brought down to permit of more active proceedings than have been instituted in the past against communists and persons introducing alien propaganda into Australia, so that they may be dealt with effectively. I say definitely that if it is found that’ the particular legislation proposed to be passed is insufficient to produce the desired effect, and if it is necessary to amend the Constitution to enable the Commonwealth Parliament to be master in its own house in this matter, I can vouch for the co-operation of the Country party, not merely in this chamber, but also in the country, in regard to the taking of the necessary constitutional referendum.
With regard to the other parts of the speech of His Excellency, I must confess to a certain amount of disappointment, because, despite the opening statement that the financial and unemployment positions are of the gravest importance to Australia, one finds no specific proposals to be placed before the Parliament actively to deal with them. I am glad, however, to know that steps are being taken in this direction; I understand today that a measure will be brought to this chamber to deal in a practical way with the default of the Government of New South Wales. I regret that there should have been delay in the payment of the interest due by that State on the 1st February. I think that an error of judgment was made in that connexion. It was of paramount importance that the credit of the Commonwealth should be maintained at the highest possible pitch. The right method was to pay the money owing by New South Wales, and subsequently adopt such proceedings as might be necessary for its recovery. I venture to say that the failure to pay the interest due at that time will, undoubtedly, make more difficult the task of the Assistant Treasurer (Mr. Bruce), who I am pleased to see again in this chamber, and despite the statement of the Leader of the Opposition (Mr. Scullin) concerning his going
Or. Earle rage. to London as resident Minister, I am glad to know that he will represent Australia in London as a resident Minister. -This will make it more difficult than it would otherwise have been for him to clean up the financial position overseas, and consolidate the whole of the Australian debts in London in such a manner as materially to reduce our interest rates. That desirable object can be achieved only by an improvement of the credit position of Australia as a whole. What is necessary is a definite attack on the root cause of the instability and unemployment in this country, and the lack of confidence overseas. If this course is pursued, we shall find, before the end of the present year, that we shall be able to convert the whole of ‘our overseas loans on as favorable terms as we converted those within Australia last” year with the same goodwill.
I am satisfied, however, that a permanent cure of the country’s financial ills can be effected only by the application of the policy that was laid down at the joint conference, prior to the last election, between representatives of the Nationalist party, the All for Australia League and the Country party. What disturbs me, in regard to the Speech of the GovernorGeneral, is the fact that no mention is made of immediate action to do what was regarded by those responsible for the joint policy as urgently necessary. The leaders o(f these three parties suggested definite means of reducing production costs, abolishing excessive taxation, reducing and revising the high tariffs that are strangling production in Australia, and removing the burden on industry of industrial conflict. This joint policy was agreed upon in Sydney after various conferences during a period extending over many months, and it was directed towards the restoration of Australian industry.
– Did it indicate how that object was to be achieved?
– That was indicated clearly. The action taken was set out fully in various public statements in a draft agreement, and in various newspaper articles. It was the basis of the policy-speeches made by the Prime Minister as Leader of the United Australia party, and by myself as Leader of the Country party. The four main points in connexion with the policy were that there should be a revision of the tariff in the direction of securing a reduction of the cost of production and distribution in both primary and secondary industries; constitutional reform for the purpose, especially, of allowing New South Wales to be subdivided, without reference to the State Parliament, thus securing a cheapening of the cost of government; a limitation of the menace to Australian credit due to the operations of the Premier of New South Wales (Mr. Lang) ; the removal of the overlapping of Federal and State activities; a constitutional change to permit of uniformity determined in the basic wage, and standard hours of work being adopted throughout Australia, through the operation of a federal tribunal ; and, finally, the removal of the overlapping and duplication in connexion with the transport and electrical power systems of Australia. That, in short, was the basis of this policy.
– Does the right honorable gentleman say that the Prime Minister has gone back on all those undertakings?
– No; there is abundance of time for him to bring down measures dealing with those matters. I urge him to introduce, at the earliest possible moment, legislation relating to the matters that are of first importance, so that we may discuss it and put it into effect. That is what the people of Australia demand.
I should like to place on record the exact text of the draft policy that formed the basis of the policy-speeches of the Prime Minister and myself at the election. Honorable members, I think, will see that the proposals referred to fundamental matters. Take, for instance, the huge wave of unemployment which is now passing over New South Wales. That, I venture to say, is due to the fact that the New South W ales industrial system is out of step with the industrial system and regulations of the rest of Australia.
– Low wages!
– Despite interjections from honorable members on my right, I adhere to that assertion. Scores of thousands of men are out of work in New South Wales simply because there is no uniform system of determining the basic wage for the whole of the Commonwealth. That is not merely my opinion. In a few- moments I shall quote the words of the Premier of New South Wales, Mr. Lang, who states that the reform which I am advocating should be one of the first matters to be discussed in this Parliament. On the 30th January last - less than three weeks ago - Mr. Lang, speaking at the Premiers Conference, said -
That brings us back to the point that the Commonwealth is striving for the principle of uniformity of the wage paid, real and nominal, and the hours of the working week. That is a reform that all Australia wants, and which only the Commonwealth can bring about. I hope that before the conference ends we will have a definite statement from the Prime Minister that his government has taken’ steps to obtain immediately the necessary powers to bring about uniform industrial conditions so far as the basic wage and working hours is concerned. Mr. Lyons has placed his finger on the weakest spot in our national armour, and as his government sees this problem so clearly, I feel that it will not require any pressure from this conference to induce the Federal Parliament to take steps necessary to carry it.
So it will be seen that Mr. Lang supports the view, which I have ‘just expressed, that this is one of the fundamental problems to be dealt with in Australia. I am certain that it is directly responsible for the fact that scores of thousands of men are out of employment in New South Wales to-day.
Let me now deal with the policy which was agreed to by the various organizations concerned, and formed the basis of the policy speeches made by the Prime Minister and myself at the last election. It embraces, inter alia, the following: -
Examination and adoption of the following policy, which shall be the common basis and keynote for the united effort for the rehabilitation of Australia.
Mr. Lyons dealt with that subject in his election address, and pointed out that in quite a number of fields, such as aviation, wireless, and navigation, and double taxation by States, constitutional alteration should place the’ position on a -satisfactory and national basis. It has already been’ unanimously agreed by the members of the Royal Commission on the Constitution, on which the various parties were represented, that an alteration of the present position is imperative.
Tariff and Arbitration.
The scientific revision of the tariff for the economic rehabilitation of Australia with a view to -
Amendment of the Constitution to provide for the basic wage and standard hours being fixed by federal authority in accordance with federal legislation. Margins for skill, overtime and other industrial matters to be dealt with by State bodies representing employers and employees, and based upon the principle of conciliation.
Transport and Power. 3. (a) The creation of an Australian transport council to co-ordinate transport activities, thereby reducing costs, and to secure -
Reduction of border disabilities to a minimum.
Those were the main headings of the joint policy, and I am anxious to hear from the Government when and how effect will he given to them. I do not complain of the Governor-General’s Speech; I have already stated that it contains several matters which are in accordance with the general view of the Country party. Transport reform is a subject which is specifically mentioned in the joint policy. But the other matters which will necessitate altera tions of the Constitution, especially Federal control of the basic wage throughout the Commonwealth, are vital to the well-being of Australia, and should be dealt with at once. I have mentioned Mr. Lang’s view on the basic wage, and I trust that when the members of the Country party press the Government for an indication of its attitude on this subject, we shall have the support of all other honorable members, because what we are urging is in accordance with the generally expressed desire of all parties.
– What basic wage would the right honorable member suggest?
– That would be determined by a properly constituted tribunal in accordance with evidence. The basic wage affects the welfare of every being in the community, and should be decided by a body independent of this Parliament and able to function without fear of political consequences; the basic wage should not be a political pawn, or a bait to lure the workers at election time. The present financial position in New South Wales cannot be corrected until the existing industrial anomalies are rectified. 1 suppose that80 per cent. of the costs of the iron and steel industry at Newcastle, Port Kembla and Lithgow, are determined by the State industrial laws, because the basic wage in that State is higher than in other parts of the Commonwealth, and that State is the seat of our basic industries. Is it just that every industry throughout Australia which draws its raw material from New South Wales, should be penalized by the industrial conditions in that State?
A cardinal feature of the joint policy is the subdivision of New South Wales, and I emphasize the effect which such a policy would have on the future credit of Australia. The results of the recent federal election prove that if a general election were held in New South Wales at the present time, the Lang Government would be overwhelmingly defeated. The votes cast for the Senate candidates show that the majority of electors are opposed to Mr. Lang in the proportion of approximately seven to four. If they had the opportunity to express their views they would declare emphati- cally that he should be deposed because of the policy of default which he initiated last year”. Although subsequently he repented and went on bauds and knees to the Loan Council, he now, being again, temporarily embarrassed, repudiates his debts, and casts disgrace not only on Now South Wales, but on Australia generally. His policy is repugnant to the country people especially, and they desire the earliest possible opportunity to express their will regarding it.
– About two years hence.
- -Mr. .Lang has a majority in. the Legislative Assembly, and probably in normal circumstances the people of New South Wales will have to wait, two years before they can put out of office a man whom they no longer trust. During that period Australia will remain in the shadow of his shame, and New South Wales, which has two-fifths of the population of Australia, yields a similar proportion of federal taxation, and is the most developed State in the Commonwealth, will suffer dishonour and degradation, and drift steadily to insolvency and default. That is a prospect which nobody with any patriotic pride can regard with equanimity. The country people of New South Wales have made up their- minds not only to get rid of Mr. Lang, but to prevent the possibility that he or anybody with a similar standard of public morality may again bring shame upon them. If, as was recommended unanimously by the Constitution Commission, the Constitution were amended to provide that, instead of the State Parliament having the right to declare for or against a subdivision of the State the people in any portion of it could petition the Commonwealth Parliament to take a referendum of all the electors of that State or of the area affected on the issue, feeling is so high that the people of Riverina, New England and Western New South Wales, would declare for immediate separation. Such a decision would enable Mr. Lang to be brought before his masters at a much earlier date than in ordinary * circumstances will be possible. If only in order to get rid immediately of this menace to Australian credit this Parliament should take steps at once to initiate this constitutional reform. The Lang regime from 1925 to 1927 is well remembered by members in this House; although he was returned with a handsome majority, he disintegrated his own party, dismissed twelve of his Ministers, and remained in office for only two years. Yet, so short is the memory of the people generally that he was again returned to power three years later. If investors in Australia and abroad knew that in future Mr. Lang could control only a much smaller portion of Australia than he does at the present time, and that the Constitution provided machinery by which those who desire to remain honorable and meet their obligations could gain control of their own affairs, as the people of Riverina and New England desire to do, the credit of Australia generally would be much higher than it is to-day. The bondholder would realize that there was no likelihood of a recurrence of the present default on the same scale. The evil effect of default in the eyes of investors is very much greater when ‘ committed by a rich and populous State than it would be if committed by Tasmania, which has less population, revenue, and resources. Constitutional reform along the lines I have indicated should be introduced at the earliest moment, and I urge the Attorney-General, before he leaves for Europe, to draft the necessary amendments so that they may be dealt with in his absence. The Disarmament Conference has already started, and a further delay of three or four weeks will not greatly disadvantage the Commonwealth; therefore, if necessary, the Attorney-General should delay his departure so that the amendments of the Constitution may be submitted to Parliament at the earliest practicable moment.
– Why did not the right honorable member keep the Government of which he was a member up to scratch?
– That Government appointed a royal commission to investigate thoroughly the operation of the Constitution. It proposed that all political parties should be represented on the commission, but so petty were the members of the Labour party in this Parliament that they refused to appoint a representative. Fortunately the outside Labour organizations took a broader view, and appointed Messrs. MacNamara and Puffy to represent the Labour party. The amendment of the Constitution should be above party considerations.
The revision of the tariff would have an. immediate effect on production costs. Such a revision was part of the joint policy, and having regard to the speeches of the present Minister for Trade and Customs (Mr. Gullett) during the last two years, and his careful analysis of the schedules introduced by the previous Government, we should be able to introduce immediately drastic amendments to carry out the policy which he and other members supporting _ the Government enunciated at great length. I have previously suggested that we might start by giving a substantial preference to Great Britain in respect of machinery imports; that would be an appropriate response to the magnanimous gesture which the Mother Country has already made towards the Commonwealth.. It will be remembered that Great Britain has abolished the duties on dominion dairy produce, fruits, and wines,, while imposing them on ali foreign importations, and is prepared to give the dominions certain quotas for wheat and other commodities. If we responded with a similar generous gesture we should place the proceedings at Ottawa on the highest possible plane. We do not desire the Ottawa Conference to develop into an auction sale of preferences between one part of the Empire and another, but we desire the framing of a comprehensive scheme of mutual assistance within the Empire,, so that we may develop trade among the various units of the Empire, increase markets, cheapen costs of production, and provide additional work for our people, with the result that eventually the Empire as a whole and its individual units will be enabled to attack foreign markets with better chances of success than before. That should be done immediately. So f ar as Australia is concerned, the Ottawa. Conference is probably the most momentous Imperial convention that will take place within the next half century. 1” urge the Commonwealth to appoint an Australian economic committee, consisting not only of parliamentarians representing all parties, but also of represen- tatives of our different industries. That committee would prepare a case for presentation to the Ottawa Conference. It is impossible to estimate the importance of such a body, particularly in connexion with our primary industries. I have always held that our outlook regarding Imperial trade should be above party. We may lose heavily by adverse decisions against us at Ottawa if we fail to take that wise action. The appointment of such a committee would enable us to achieve results of far-reaching significance to Australia, to the Empire, and possibly to ‘the destiny of the world, particularly its future peace. I trust that at the earliest possible moment the Government will proceed with what it was elected to do. If it does, I promise it the wholehearted support of the Country party.
– I followed very closely the proposals of the Government as they are foreshadowed in the Speech of the GovernorGeneral. Like the policy speech that was delivered by the Prime Minister (Mr. Lyons) in the Sydney Town Hall during the general election campaign, the Speech which is now under discussion is quite indefinite; indeed, for indefiniteness it is without parallel in the series of similar speeches which have been made during the history of Australian Parliaments. In the policy speech of the Leader of the United Australia party, the only thing upon which one could fasten with certainty was the phrase, “Restoration of confidence “, which was reiterated and varied again and again. The honorable: gentleman pointed out that if his party were successful at the polls confidence would be restored at home and abroad, and that every day thereafter would be a better day for the Commonwealth of Australia. He declared that prosperity would come again, and at once, in every avenue, of public activity.
First let us consider to what extent confidence has been restored abroad. A week after the result of the election wa» announced, -it became necessary to convert bills to the value of approximately £5,000,000 falling due in London. Afterthe statements of the Prime Minister and’ his followers, the least that could” have been- expected was that those billa would be renewed at a lower rate of interest, and for a longer period than would have been possible under the regime of the previous (Scullin) Administration. But the information now at our disposal discloses that they were converted at per cent, higher than the tuen existing bank rate in London, and that the holders would not grant an extension for a longer period than three months. That explodes the myth of the restoration of confidence abroad.
Now as to the promise that there would be a restoration of confidence in Australia. I have closely analysed the figures and other information which is available as to the state of our industries, and in no case can I find that there has been any improvement since the advent of this Government. . On the contrary, a state of panic now exists among our unemployed. Undoubtedly, many were misled at the general election by the specious promises of the Leader of the Government. They gave their support to the United Australia party because of those promises; support that otherwise would have gone to opposing parties. Those who were unemployed were led to believe that if the United Australia party were returned to power the banks would release credits which would not be available to any other government returned to power.
To-day the Leader of the Opposition (Mr. Scullin) showed that the adherence by his and other Governments to the Premiers plan involved ‘‘the jettisoning of the principles on which the Labour movement was established. It was on those terms that a kind of guarantee was given by the banking institutions that credits would be made available to assist the thousands of unemployed. It appears to me that, after the late Government had been jockeyed into a position that meant the sacrifice of all that Labour stood for, it was left, to quote a statement made by Sir Otto Niemeyer just after his departure from Australia in referring to our people generally, “ to stew in its own juice”. All praise and honour must now be given to those in the Labour movement who have fought against attempts to break down the conditions of the people of this country, and thus to destroy the political movement that gave them birth. There has been no restoration of confidence in Australia. Instead, the position is steadily growing worse. We are now told that something may be done for the unemployed at the Premiers Conference that is to be held in May of this year.
– Is it not to be held before May?
– No. We have asked what is to be done in the meantime, but have received no reply. There have been numerous conferences with the Premiers, and meetings of the Loan Council, during the past two years. I and others eagerly awaited their decisions. The importance of those conferences was magnified by the press, so that the people of Australia stood tip toe, to see what beneficial result would accrue. But, as from empty vessels, much sound but nothing else came from those conferences. Yet, now, all that this Government has to offer to the people is the promise “of another conference^ - with the same inevitably abortive results. There is no need for conferences of Premiers to outline the work that is to be done. Such conferences, indeed, can give no solution. Whatever they may decide, their decisions may be over-ridden by a higher authority which determines everything. When speaking at Drummoyne during the general election the Attorney-General (Mr. Latham) declared that he could sit down and in half-an-hour evolve a scheme which would give “ employment to hundreds of thousands. But that, in itself, would give no work. Yet it is all that a Premiers Conference could do. The deliberations of a conference must be futile when dominated by the banking institutions which provide the money. The solution should be provided by this Government, which is the central authority; it should determine what is to be done. It is vitally necessary that the Government should indicate definitely to the people of Australia - the farmers and business men as well as the workers - that it has some concrete proposal for the rehabilitation of the country. It is unnecessary to convene a Premiers Conference for the purpose. This central authority should come to a determination, make it known to the Premiers and the people of Australia, and provide the necessary credits to give employment to those who need it. In the
State of New South Wales alone this year over £6,000,000 is being distributed to provide food relief - and it is scanty at that.
During the general elections the’ people were not enlightened as to what would be the Government’s policy. It is true that the Prime Minister admitted to-day that he had asked the electors to give his party an open mandate. In point of fact, we obtained an indication of the Government’s policy only after the return of the right honorable member for Flinders (Mr. Bruce) from abroad. It is strange that after the Cabinet had been sworn in, and enlightened as to the financial problems that confront Australia, the Prime Minister had to inform the press that no action could be taken until the return of Mr. Bruce from overseas. It is obvious that while the Prime Minister declared to the people during the general election that his party had a policy which would solve the problem of unemployment and the restoration of prosperity, he actually had to wait until the return of the right honorable member for Flinders before the subject could even be discussed. It is also passing strange that, in 1929, the same honorable gentleman was returned to this Parliament on a policy that was absolutely opposed to that of this same Mr. Bruce. He criticized the actions of that gentleman when Prime Minister, and those of his Treasurer (Dr. Earle Page), and declared that most of our troubles were due to the policy which they had followed when at the head of an administration. Now he intends to send the honorable member for Flinders to London to represent this country. Probably that gentleman will be more at home in that city than he is in Australia, for he certainly has not an Australian outlook or sentiment. He showed that clearly during the seven years he was Prime Minister of Australia. In the circumstances, it may help this country if he spends all his time abroad. I say, definitely, that many of the problems and troubles which we are facing to-day were caused by the actions of Mr. Bruce and his followers, and the Country party with which they were allied. Although the present Prime Minister opposed the policy of the Bruce-Page Administration on every platform in the Wilmot electorate, he said, after his election on the 19 th December, that he must await the return of Mr. Bruce to Australia before he could indicate the policy of his Government.
Since he has given us an indication of his policy, the people of East Sydney have had an opportunity of expressing their opinion upon it. In fact they are the only electors who have had an opportunity to do so. Surely it is significant that at a by-election which occurred almost immediately after the announcement of the policy of the Lyons Government, the people expressed their disapproval of that policy by reversing their decision at the general election. _
This is the first time that the policy of a government has been condemned in this fashion. After the return of the Scullin Government to power in 1929, a by-election occurred, following upon the death of Mr. Mcwilliams, and the policy of the Scullin Government was approved, for the Labour party then won a seat which it had never previously held. It is surely suggestive that an important electorate like East Sydney condemned the policy of the Lyons Administration at the very beginning of its career. The honorable member for Barton (Mr. Lane) is interjecting. He may, if he chooses, denounce the State of New South Wales, but he must know that the time will come, and perhaps earlier than he thinks, when the electors of his constituency will rise in their might and remove him from his position for his support of a policy of low wages and long hours.
The policy of the Lyons Government was announced, first of all, at a Millions Club luncheon - a very appropriate place. There is no doubt that the Prime Minister selected a suitable place to state his policy. He went to his masters. It was the first time that he had addressed the Millions Club. He was not accustomed to such company. But he felt at home’, for he outlined his policy clearly and definitely to those who were present. I do not know very much about the Millions Club, but I understand that the members of it” eat well and abundantly - certainly much better than those who have to exist on the dole can eat. The atmosphere of that august assembly was very suitable for the announcement of the Prime Minister. Those who live on the dole and who have barely enough to exist upon would not have cheered the honorable gentleman to the echo as the members of the Millions Club did when, after pointing out that whereas the basic wage was in New SouthWales £4 2s. 6d. per week, in South Australia it was only £3 3s., and that whereas the working week in New South Wales was 44 hours, in South Australia it was 48 hours, he said that those conditions could not be expected to continue.
– Many of the people in New South Wales have no work at all.
– Does the honorable member for Barton (Mr. Lane) advocate a reduction of the basic wage to £3 3s., and a lengthening of hours to 48 weekly? That” is a fair question for him to answer. I shall he glad if the honorable member for Barton will answer my question when he has a favorable opportunity to do so. The people of his electorate, or many of them at any rate, will be very interested in his reply. I am sure that the electors of Barton did not think for a moment that the honorable gentleman would support a policy which involved the reduction of the basic wage in New South Wales to £3 3s., and a lengthening of hours to 48 a. week. I do not think that a single United Australia party candidate advocated such a policy during the election campaign. But, of course, there was nothing wrong in making such an announcement at the Millions Club ! It was the place for such a declaration. The electors of East Sydney have been called upon to express an opinion upon this policy, and they have done so very definitely. I am anxious to hear honorable members opposite give us their opinion upon the speech delivered by the Prime Minister at the Millions Club. I believe that if they support that policy the Government to which they now owe allegiance will have a short life. Governments with very large majorities have come and gone in the past, and will do so again. No government can remain in power for very long if it fails to deal effectively with the unemployment problem.
We had an elaboration of the government policy at the recent Loan Council meeting. A speech was made by a responsible member of this Government which was in conformity with that delivered by the Prime Minister at the Millions Club.
– There must be something in it then !
– I have no doubt that there is something in it which will suit the purposes of those who stand behind the Prime Minister (Mr. Lyons) and the Assistant Treasurer (Mr. Bruce) ; but it will not suit the purposes of the majority of the people of Australia. It was a good thing for the people of Australia, and particularly for the people of New South Wales, that some one at the Loan Council meeting was prepared to stand up for the best interests of the majority of the people of the Commonwealth and of New South Wales. It was also a good thing that some one at the conference was able to tell the people what was likely to happen. Otherwise, they might have known nothing at all about the prospects for the future. The Assistant Treasurer informed the Loan Council that after the end of June there would be no money available for public works. He made it clear that those who were at present employed on public works would, after the end of June, need to find employment elsewhere. It has been said to-day from this side of the chamber, that it is impossible, even in prosperous times, for all the people of Australia to find employment in private enterprise. We have been told that even in good times as many as 200,000 persons have been employed on public works. If all public works are to cease at the end of June it must be apparent that many more people will be thrown upon the unemployment market. The Assistant Treasurer told the States that they must prepare for the cessation of public works before the end of June, otherwise there would be a very heavy increase in unemployment at that time. He suggested that the States should begin at once to taper off employment upon public works. He advised that the tapering system should be put into operation so that it would affect as many as 1,000 men per month. He said that if thisweredone the people would “ getused to unemployment”. Those are his own words. It is, therefore, the policy of thisGovernment, apparently, to administer the affairs of the country so that people will “ get used to unemployment It would not have been politic to state that policy in clear terms in the GovernorGeneral’s Speech, but there can be no doubt that this is, in effect the real policy of the Government. It was a good thing therefore that the Premier of New South Wales attended the Loan Council meetings and obtained information about the policy of the Government before the time came for the policy to be put into full effect. In these circumstances it is necessary for us to watch very closely all the activities of the Government.
Therecan be no doubt at all that unemployment is the most important problem with which we have to deal. We have been informed that the Government intends to send delegates to the Disarmament Conference. In view of the professed need for economy, we are entitled to ask how much is likely to be spent on this delegation. We should also be told how much it is likely to cost to maintain a resident Minister in London. We know very well that people who undertake such duties as thesedo not live cheaply. Seeing that there is a prospect of still greater unemployment, the public will be interested to know how much money is to be spent in the directions that I have mentioned.
We have heard a good deal for a number of years about the need to reduce the cost of production. This, and similar phrases, are frequently used by honorable members opposite. But they will never define what they mean by a reduction in the cost of production. In the recent by-election in East Sydney the United Australia party candidate had a great deal to say about the removal of the shackles from industry so that costs could be lowered. But neither he nor any other member of his party has ever said definitely what shackles he has in mind or how they are to be removed. It is true that the honorable member for Macquarie (Mr. John Lawson), in his speech this afternoon, referred to the sacrifices that had been made by the workers. He is the first member ofhis party, to my knowledge, who has admitted thatthe workers have sacrificed all that can be expected of them. The honorable gentleman said that other means of effecting economy would have to be explored. I am sorry that he did not proceed to outline what avenues of exploration he had in mind. Perhaps he will explain himself later on that point.
Certain views have been expressed this afternoon on the interest problem. Honorable members of the previous Parliament will remember that the group to which I belong said, so far back as last February, that interest rates would have to be reduced, and that they were the main factor in keeping up the cost of production. It was suggested that arbitrary methods should be adopted to reduce interest rates. But that was called repudiation, and we were bitterly condemned for having even suggested such a thing. It will be remembered that the statement was made at a time when interest charges cost nearly as much as wages in some public undertakings. We pointed out that the wages bill for the New South Wales Railway Department was about £9,000,000 per annum, while the interest bill was about £7,000,000 per annum. We know now that although the wages bill has been reduced greatly, the interest bill has not been touched. Those who have followed the political history of this country since last February will remember that the Premier of New South Wales enunciated a definite policy for the reduction of both internal and external interest rates, and the abandonment of the gold standard. For doing so he was strongly criticized by some members of the Labour party at that time, as well as by those who held other political views. Mr. Lang not only said definitely that an arbitrary cut would have to be made in interest rates, but he took steps in the New South Wales Parliament to give effect to that policy. Unfortunately, the majority against him in the Legislative Council was too great to permit him to give effect to his policy. Since that time this Parliament has itself arbitrarily reduced interest rates, and fixed both minimum and maximum terms for the repayment of loans. The minimum term was fixed at seven years, and the maximum at 30 years. In view of all that has happened, I cannot help saying that there is a great deal of- hypocrisy in the utterances of public men in Australia throughout these days. We all know very well that many business mon realize in their heart that action of this kind was necessary. When they can be got to talk in their quiet moments, away from the hurry and bustle of their affairs, they admit that no other course could have been taken than that followed by the Government of New South Wales.
I think we are entitled to ask the membars and supporters of the Government to make a clear statement of their arbitration policy. It was said during the election campaign that the United Australia party would not ‘interfere with out arbitration system if it were returned to power. Yet at a meeting ‘of the Loan Council Mr. Bruce said -
It was all right for Mr. Lang to say thai wages must be dealt with by the court, but, in times -of -emergency, long cherished principles must be laid aside.
We know where Mr. Bruce stands, and we are anxious to know where his supporters stand, because, after all, this is an important question, on which the people gave a definite decision at the elections of 1929.
Reference has been made to the position of New South Wales in relation to interest payments overseas. The law relating to the control of overseas debts is administered solely by the Commonwealth whose powers are definite. Therefore, it is utterly impossible to shift the responsibility for interest payments to a State. Obviously the Commonwealth Government has made a huge blunder otherwise there would have been no need for a sudden change of front after the Loan Council had definitely decided that the Commonwealth should not meet the interest obligations of New South Wales. This Government realized its mistake when it was too late. It was suffering from “Langitis”, as the honorable member for East Sydney (Mr. Ward) has stated. The members of the Ministry have an obsession about Mr. Lang. They in common with many others can think of no one but him. I hope that they may continue to have that obsession, and to organize bodies like the New Guard with its press-stunts about bush fires and other things.
– What happened to the Lang supporters at the recent election?
– I left this House with five members, and I returned with a similar number. That cannot be said of every party in this House. I did not use the electioneering tactics adopted in the Martin electorate, where posters were exhibited asking the people to vote for W. A. Holman, and so isner in prosperity. There are to-day thousands of workers in the Martin electorate waiting for the waving of the magic wand to bring about the era of prosperity that has been promised to them. I wish now to quote a few figures in respect of the overseas interest debt of New South. Wales. The sum of £958,764 is involved, and of that, £294,048 represents exchange. The old-age pensioners and those in receipt of the dole, food or other relief have to make sacrifices so as to swell the profits of oversea money-lenders. Approximately £300,000 of the interest debt of New South Wales can be regarded as. money for nothing. As Mr. Bruce said when speaking on this subject, we can take this money from the workers - the railway and tramway workers of New South Wales - so as to meet our commitments overseas. The Westminster Bank is to receive £466,150, and New York £207,817. I was interested to learn from the anti-labour pres6 that on the 7th of January, five of the leading banks of Great Britain paid an average dividend of 18 per cent, to their shareholders. It was stated that in spite of a bad year in Great Britain, the directors were pleased to be able to report that the five leading banks, including Lloyd’s, the Westminster Bank, the National Provincial Bank, and the Midland Bank all paid an average of 18 per cent. Yet in Great Britain the dole has been reduced by 10 per cent.; the wages in the army and “navy have been slashed ; and social services have been considerably reduced. It is true that there is an obligation on all governments to meet their financial commitments, but the Australian governments have a greater obligation to the people. In this crisis our obligation is to provide food, clothing and shelter for the unemployed. While I remain in the public life of this country, I shall advocate the maintenance of the services provided by the Labour party for the relief of the sick and needy, the old and the infirm, and the unfortunate unemployed. I shall fight with all the means at my disposal, in and out of this Parliament, to ensure food relief to our unfortunate people. That, I contend, is our first obligation. My attitude is that of the Premier of New South Wales (Mr. Lang), and is supported by the electors of East Sydney. During the election campaign we clearly indicated our views in respect of overseas commitments. That issue was decided by the electors of East Sydney, and I should like to have an opportunity to test it in many other electorates of New South Wales.
– The honorable member had his opportunity.
– The honorable member had an exceedingly close shave at the 1929 elections, and did not poll too well in the recent election. The leader of his party, who is now the Prime Minister, had to leave Adelaide immediately for Sydney in order to assist the honorable member in his campaign, and to save time had to make use of a speed boat in which to rush across the Sydney Harbour. The honorable member for Warringah was closely pressed by an exsenator, but now that he is back in this chamber I say good luck to him. But there is nothing for him to “crow” about.
Reference has been made to the proposed appointment of a resident Minister in London.
– The honorable member’s time has expired. I understand that it is the desire of honorable members to adjourn the House a little earlier than usual, and therefore, with their concurrence, I shall suspend the sitting until 8.15 p.m.
Sitting suspended from 5.52 to 8.15 p.m.
.- As a representative of a rural electorate, I have to admit frankly that I am not satisfied with the address which was delivered by the Governor-General, which outlined the Government’s policy for the session. Many things were mentioned in the address, but it appeared to me that it was not as definite as it might have been regarding the policy which the Government proposes to put into operation. I agree with the honorable member for Indi (Mr. Hutchinson) who said that the prosperity of the country depends upon the primary industries. Though it was stated in the Governor-General’s Speech that the Government proposed to reduce administration expenses in order to secure budgetary equilibrium, honorable members must recognize that the mere balancing of the budget will not put Australia on the road to recovery. We may economize, dismiss our public servants, and increase taxation, and thus strike a balance for a time, but we shall not thus put Australia on the road to recovery. Until industry is made profitable there can be no real recovery. The fundamental principle of all successful industry is that returns shall exceed costs. It was also stated in the Governor-General’s Address that we must not be too sanguine about receiving increased prices for our products. I agree with that, and there seems to me to be only one method by which we can make industry profitable; it is essential that costs of production be reduced.
Before the election campaign began, an agreement was reached between the leaders of this party and of the Government regarding a united policy. It is true that candidates’ went before theelectors and asked that they should be trusted to do what they believed to be right, but now that the Government has been returned with such a large majority it is only proper, I think, that it should give the people a more definite indication of the policy it proposes to pursue. In regard to many matters the Government proposes to defer action for a time, and in regard to others it suggests that it would be wise to proceed with extreme caution. Though I am willing and, indeed, anxious to support the Government in carrying out the policy which it placed before the electors, that policy, as it appears in the Governor-General’s Address, has been so watered dow.n that we of this party feel that it is our duty to be cautious, too, and require of the Government something more definite than it has given us to date. The successful business man is he who recognizes what is needed, and then adopts a policy of “Do it now!” It might be well if the Government also adopted that for its motto. It is futile to talk about maintaining 100 per cent. living standard, when only 70 per cent. of the people are at work. For 100 per cent. living standard we must have 100 per cent. of our workers employed. I do not care what the wage rate is; I am concerned with the living standard. In order to get the people to work, we must restore the prosperity of our export industries, our mining, wheat-growing, dairying, dried fruits, and wool-growing industries. If there are at present burdens which are hampering those industries, and preventing them from expanding and developing, the Government should act quickly to remove those burdens. This is not a time to defer action. The policy which was agreed upon when we faced the electors included the reform of the tariff, the revision of our arbitration legislation so’ as to remove anomalies and harassing restrictions, and constitutional reform.
I come from the Riverina, where the movement which spread like wildfire throughout the country districts ofNew South Wales originated. The people were made to realize that it was time they took a greater interest in their own affairs; that it was not only Mr. Lang who had menaced the welfare of the country districts, but their interests had been menaced for years by the domination of the commercial interests of the cities. They came to recognize that, until they controlled their own destinies, things were not likely to be put right. The people were profoundly stirred, and an undertaking was given that if the present Government were placed in office, provision would be made for a referendum of the people so that they might determine whether they were to have control of their own affairs and obtain adequate representation in the Senate. I had hoped that this matter might have been dealt with at greater length in the Governor-General’s Speech, but it was merely touched upon casually in a single sentence. What wewant is action.
The right honorable member for Cowper (Dr. Earle Page) made the position of the Country party quite clear in regard to arbitration. We propose to leave control of the minimum basic wage and maximum working hours to one federal tribunal, while adjustment of margins should be left to State tribunals, or boards representative of employers and employees. At the present time increasing quantities of Victorian manufactured goods are being sold in New South Wales, because they can be produced more cheaply in Victoria. We cannot expect people to pay more for goods simply because they have to be made in their own State. If the restrictions placed upon industry by arbitration legislation in New South Wales were removed,we should be able to get our own people back to work, and New South Wales, instead of being burdened with a higher percentage of unemployment than any of the other States, would revert to normal.
The primary producers have been misrepresented regarding tariff matters. I have frequently heard the assertion that we are free traders. I contradict that statement absolutely. We are not free traders. We say, however, that when the tariff is being framed, each item should bo dealt with on its merits. Each application for protection should be carefully weighed, and if the amount of extra employment to be provided is commensurate with the added burden to be imposed on the community, then that industry is deserving of protection. Infant industries which require to be propped up until they reach the stage of mass production, should be protected, and given a chance to meet fair competition, but there are many industries in Australia to-day which have received such high protection that they have been rendered unnatural. When protection becomes a menace to some major industry, it is time that it was removed. We should put first things first. For these reasons we request the Government to reconsider its tariff policy, and, instead of deferring action until the Tariff Board has considered the matter, it should do something immediately. The Government has ample justification. There are numerous Tariff Board reportswhich have been disregarded by past governments, and action with regard to them should be taken without further delay. There is, for instance, a Tariff Board report which sets out the position with regard to galvanized iron, and which makes it clear that the public are as much in need of protection as the industry concerned. The last report of the Tariff Board gave instances of industries applying for protection although they were making profits of 100 per cent, on the capital invested. With examples of that kind before it, there is no excuse for the Government deferring action. Other firms whose annual turnover aggregated £1,000,000 or more, have sought protection, although the annual profit on their capital ranged from 12-£ per cent, to 37£ per cent. The primary industries, of Australia produce 93 per cent of our exports, and they deserve to be protected against the unfair incidence of the tariff. Farmers in this country are hampered in their efforts to improve the productive capacity of the land, because of the high price of material. Our primary producers have to pay much more for fencing wire, galvanized iron, iron posts, &c, than have the farmers of South Africa, with whom we have to compete in the markets of the world. In this respect Australia is at a disadvantage. It is all very well to say that iron is a key industry, but so are our primary industries, which produce such a large proportion of our wealth. If our present policy of protection is placing too great a burden on the primary producers, the Government should take immediate action to relieve them of that burden. There is a further justification for immediate action by the Government in regard to the tariff. In normal times certain tariff rates were laid down. Today, however, in addition to those ordinary rates, importers have to pay 25 per cent, exchange, and 10 per cent, primage duty, an additional 35 per cent, protection, besides the normal protection of transport and shipping charges. To this extra 36 per cent, protection industry is not really entitled, and it would not be out of place if the Government were to reduce the general tariff to the extent of the exchange and primage duties as they may exist from time to time. Such a course would not be “unfair to local manufacturers, and would protect the public. We know that when an industry obtains a monopoly, so that those controlling it are able to fix prices, the public suffers and, at the present time, the public are as much entitled to protection as are the manufacturers. At the present time, interest charges have been reduced by 22£ per cent.; manufacturers who rent premises have had their rent reduced; wages have come down, but nothing has been done to ensure that the public who buy manufactured goods shall receive the benefit of those reductions. If the manufacturers are enjoying the benefits of reduced costs, it is the duty of the Government to take such action as is necessary to ensure that this reduction is passed on to the public. As I said before, I am anxious to support the Government in carrying out the policy on which it was elected. I appeal to the Government to act quickly that our recovery may not be delayed, and that the affairs of Australia be speedily put upon a better footing.
.- There are two matters in the Governor-General’s Speech to which I desire to refer. The first is’ the tariff, which has been touched upon by the honorable member who has just resumed his seat. I confess that I am somewhat disappointed at the references to the tariff in the speech. The tariff of this country was raised progressively until 19£S, and at that time it was believed, at any rate by the party to which I belong, that the high-water mark had been reached. The Assistant Treasurer (Mr. Bruce), who was then Prime Minister, indicated clearly, I think, in 1929, that he believed that a reconsideration of the tariff should take place with a view to lowering rather than raising it. Then the Labour party came into office, and imposed duties which made the Australian tariff unique. The high tariff policy of that party was strenuously opposed in this House during the last Parliament by the party with which I am associated, and no member of the House was more vigorous in his condemnation of it than was the present Minister for Trade and Customs (Mr. Gullett). I confess that I find difficulty in reconciling the statements made in the last Parliament, in opposition to the present tariff, with the proposals of the present Government, te indicated in the Governor-General’s Speech, in which one finds these words -
My Ministers recognize the special importance of the tariff at the present time, and its intimate relation to the welfare of both primary and secondary industries.
I have looked in. vain in the Speech for anything suggesting an intention to give relief to the primary industries. If the Ministry’s tariff proposals do not go further than is indicated in the Speech, I shall be unable to support the Government in respect to the tariff. I believe that what one advocates in opposition, one should be prepared to put into practice on a assuming ministerial responsibility.
The speech further states -
It is considered that, with industry in its present depressed condition, changes in duties should be made with caution and only after full inquiry and consideration.
I take that as an indication that the Government intends not to interfere with the excessive imposts which were imposed by the Labour party during the last Parliament. Members of my party gave many instances of excessive tariffs, and motions were submitted for reductions of specific duties. I ask for leave to continue my remarks at a later stage.
– I move -
That the debate be now adjourned.
– What is the reason for this interruption of the debate?
– It is my intention to introduce and move the first and second readings of the bill for the enforcement of the financial agreement, and, immediately afterwards, the debate on the motion for the adoption of the AddressinReply will be resumed.
– We object to the adjournment of the debate without notice and a satisfactory reason being given.
Question put. The House divided. (Mr. Speaker - Hon. G. H. Mackay.)
Majority . . . . 54
Question so resolved in the affirmative.
That the resumption of the debate be made an order of the day for a later hour this day.
Motion (by Mr. Lyons) proposed -
That so much of the Standing Orders be suspended as would prevent the Financial Agreement Enforcement Bill from being passed through all its stages before the Address-in- Reply is agreed to, and the second reading being moved at this sitting.
– I object to the suspension of the Standing Orders. The Prime Minister should, as a matter of courtesy, inform the leaders of each party of the proposed introduction of a measure so important as that which he has indicated. If the procedure adopted to-night is allowed to pass unchallenged .we shall have the Government continually interrupting discussions in order to bring on new business, practically without notice. I propose to use the forms of the House to register the protest of the section I represent against this infringement of the rights of honorable members.
.- I concur in the motion on the understanding that before honorable members are asked to address themselves to the bill they will have before them not only the explanation of it by the Prime Minister, but also a statement by the AttorneyGeneral on the legal and constitutional aspects of it.
– My failure to notify the honorable member for West Sydney (Mr. Beasley) of my intention to introduce this measure to-night was an oversight for which I apologize. Of course, the Government cannot notify all members of variations in the order of business, but I recognize that the honorable member for West Sydney is the leader of a group of members, and I assure him that in future the same courtesy will be extended to him as to other leaders. The explanation which I shall give when moving the second reading of the bill, will, I hope, be sufficient. A clear statement on the legal and constitutional aspects of the measure will be issued, and later the AttorneyGeneral will endeavour to clarify any points upon which honorable members are still in doubt.
Question resolved in the affirmative.
– I certify that the motion has been carried by an absolute majority of the members of the House, as required by Standing Order 407.
Motion (by Mr. Lyons) “agreed to -
That he have leave to bring in a bill for an Act to provide for the carrying out of the financial agreements between the Commonwealth and the States by the parties thereto, and for other purposes.
Bil] brought up by Mr. Lyons, and read a first time.
– I move -
That the bill be now read a second time.
This bill provides means to enforce the carrying out of the provisions of the Financial Agreement Validation Act of 1929. The circumstances which have necessitated its introduction will, I am sure, be regretted by every member of the House.
When the Financial Agreement Bill was under consideration in this chamber, no one contemplated that the need for legislation of this kind would ever arise. The financial agreement, I remind honorable members, provided, among other things, that the Commonwealth should take over, on 1st July, 1929, the unpaid balance of the gross public debts of each State existing on the 30th June, 1927. The Commonwealth was to contribute 2s. 6d. per cent., and the States 5s. per cent, per annum into a sinking fund to extinguish existing debts in 58 years. Loans raised after 1st July, 1927, were to be extinguished in 53 years from their respective dates of issue by the establishment of a sinking fund, to which Commonwealth and States would each contribute 5s. per cent, per annum. The Commonwealth was to provide, towards interest, a sum equal to the per capita payments previously made to the States, and the States were themselves to provide the balance of the interest. There were other provisions to which it is unnecessary that reference should now be made. The point that I emphasize now is that all the provisions of the agreement were based on an assumption of honour and good faith on the part of the Governments which were parties to it. Each Government assumed certain obligations, and when the agreement was made no one imagined for a moment that the time would come when one of the parties to it would refuse to honour its undertakings. Unfortunately, on two occasions within the last twelve months, the Government of New South Wales has defaulted in its public obligations. In order that honorable members may have all the relevant facts before them, I propose to traverse, briefly, the circumstances of those defaults, the first in the early part of last year, the second within recent weeks.
At a conference of Commonwealth and State Ministers in Canberra on the 9th February, 1931, the Premier of New South Wales, Mr. Lang, announced that it was the policy of his Government to pay no further interest to British bondholders until Britain had dealt with the Aus-‘ tralian overseas debt in the same manner as Britain had settled her own debt to America. He also declared his intention to reduce interest on all Government borrowings in Australia to 3 per cent. On the 26th February, 1931, the Loan Council decided that, in view of the policy of the Premier of New South Wales in regard to interest payments, no further approach should be made to the Commonwealth Bank -for accommodation for that State. On the 24th March, the Premier of New South Wales advised the then Prime Minister that his Government did not intend to meet interest payable to the Westminster Bank on the 1st April, but had appointed Mr. A. C. Willis, Agent-General, to make arrangements with British bondholders. The then Commonwealth Government sought legal advice regarding the responsibility of the Commonwealth, and, on receipt of it, the Prime Minister of the day (Mr. Scullin) sent the following telegram to the High Commissioner in London: -
Commonwealth Government has taken counsel’s opinion regarding its position under Financial Agreement in relation to New South Wale3 interest falling duo in London on 1st April, which State has declared it will not pay. Advice received shows that Commonwealth is under legal obligation to States which are parties to Financial Agreement to pay the interest, and also that Commonwealth has legal right to pay. Commonwealth Government accordingly will make provision to pay the interest falling due in London which New South Wales has declined to pay.
The funds necessary to meet the interest due on the 1st April were made available in London on the 31st March. Subsequently, New South Wales defaulted in respect of interest due in New York and interest due to the Commonwealth on loans raised by it in Australia for that State. The default continued throughout March, April, May, June and July. The gross amount of the interest in default, plus exchange, was nearly £6,000,000. After allowing for certain sums set off against this interest, the State owed the Commonwealth a net amount of £4,559,000. This was ultimately settled by the Government of New South Wales accepting responsibility for treasury-bills to that amount.
In May and June of last year, a conference of Commonwealth and State Ministers, at Melbourne, evolved a plan for the balancing of budgets over a period. New South Wales was a party to that plan and undertook to make the adjustments necessary to reduce the State’s deficit to an amount agreed upon at the conference. On the 15th July, the Premier of New South Wales advised the Commonwealth Treasurer that, unless accommodation to the extent of £500,000 was provided immediately, the State would be unable to pay salaries and wages in the following week. After consultation with the Loan Council, the then Prime Minister, on the 28th July, informed Mr. Lang that, on receipt of his undertaking to accept responsibility for payment of interest on the New South Wales debt and to join the Loan Council, and on his Government passing and putting into operation the Premier’s plan, . including a 20 per cent, reduction in adjustable expenditure, the Loan Council would approve the issue of treasury-bills for the July requirements of that State. On the same day Mr. Lang replied by telegram, undertaking on behalf of the New South Wales Government, to observe the conditions stipulated. As the result of these undertakings, New South Wales was granted advances from July, 1931, to January, 1932. These advances were covered by treasury-bills and were sufficient to meet the State’s requirements month by month under the Premier’s plan. These were the circumstances of the first default by New South Wales.
I come now to the second default. On the evening of the 28th January last, Mr. Lang verbally informed me that the State could not provide the whole amount necessary to meet interest payments falling due on the following day. Approximately £950,000 would fall due and the State, he said, desired the Commonwealth to obtain an advance of £500,000 towards meeting these payments; which, otherwise, could not be made. On the following day I asked Mr. Lang to inform the
Loan Council of the position. This he did. The Loan Council, on the same day, refused to approve the request of New South Wales that arrangements he made to secure from the Commonwealth Bank an advance to New South Wales of £500,000 to enable that State to meet oversea interest falling due between the 1st and 4th February. Before the meeting closed on that day the Council unanimously approved the issue of a statement to the press, setting out that the interest falling due amounted to £958,763; that Mr. Lang had stated that his Government was in a position to find £458,763, which was being paid to the Commonwealth Bank, and that the Loan Council was not prepared to sanction Mr. Lang’s application for an advance of £500,000 to New South Wales.
On Saturday, the 30th January, I announced to the Loan Council the attitude of the Commonwealth Government. I said with regard to the request of Mr. Lang for the advance of £500,000, that the Commonwealth Government, for reasons fully given, had come to the definite conclusion that, in the interests of Australian credit, and of the bondholders of New South Wales, the position should be faced now,, and the request of Mr. Lang refused. I stated also that the Commonwealth Government was not prepared to support in the Loan Council any proposal for the rendering of further financial assistance to New South Wales.
On the 1st and 2nd February, the Loan Council discussed the loan requirements of the States for the balance of the current financial year. After consideration of the position, the Commonwealth Government undertook to approach the Commonwealth Bank Board for the amount involved, the total being £2,120,000. Of that sum, £1,170,000 was for New South Wales. As chairman, I told the Loan Council that, in view of the default of New South Wales in respect of interest, the Commonwealth Government, if it succeeded in raising loan moneys on behalf of that State, would not pay them over. On the 4th February, the Commonwealth Bank Board advised that it was prepared to make available loan moneys, totalling - £2,120,000, on the security of Commonwealth Treasury Bills. No request has yet been made to the Commonwealth Bank by the Com* monwealth Government for payment of that sum.
The total amount of the default of New South Wales in respect of interest due between the 1st and 4th February of this year is £1,169,735 16s. Id. This includes exchange on the necessary remittances, and covers the whole of the oversea interest due by the State since the 1st February.
In addition to my statement to the Loan Council regarding the attitude of the Commonwealth Government, I issued, on the 2nd February, a public statement in which I dealt with the responsibility of the Commonwealth and of the State in regard to the interest payments.
– Has Mr. Lang indicated whether he will pay any further interest commitment?
– No. He stated clearly that he would pay a portion of this amount. What will happen when his State’s next commitment matures remains to be seen. On the 9th February the Commonwealth Government announced that as a result of its investigation, it was satisfied that effective action could be taken to secure the amount necessary to meet the interest defaults of the Government of New South Wales. At the same time, the Government declared that, in the interests of Australian credit, it had decided to pay, on behalf of New South Wales, the amount due to bondholders, and that the Commonwealth would utilize every available method to compel the State Government to pay the full amount. On the 10th February a telegram was sent to the Premier of New South Wales setting out full particulars of the amount of interest which the Commonwealth understood was due by the State to that date, and not then paid. Mr. Lang was asked to confirm these amounts, and advise what contribution the State could make towards them. Mr. Lang replied that counsel had advised that it was necessary that the Commonwealth should undertake that it would not, without the consent of the State, use, or suffer to be used, in evidence against the State in any pending or future action, any reply to the telegram of the 10th February.
– Why did the Commonwealth Government doubt the accuracy of its own figures?
– My Government desired to make quite sure that the figureswere absolutely accurate before proceeding. It was considered that as the Commonwealth proposed to meet the payment on behalf of New South Wales, that State should be only too willing to check the accuracy of the figures. The undertaking desired by the Government of New South Wales was immediately given. At the same time I expressed the astonishment of the Commonwealth Government that the New South Wales Government should ask for such an undertaking. I explained that this Government desired to ascertain the facts in order that payment of the overdue interest might be expedited, and the existing unsatisfactory position cleared up. The Premier of New South Wales has not yet furnished the desired information. Does he fear that his figures may prove to be inaccurate, and lead him and his colleagues into trouble? He has since sent a telegram stating that he will pay the £450,000 as a contribution towards the total amount.
– Why does not the honorable gentleman read the telegram correctly ?
– I am sorry if I am irritating the “tin hare” party, but I am stating facts. On Wednesday, the 17th February, the Commonwealth Government took all the steps necessary to enable the overdue New South Wales interest to be paid in London, and in New York on that day. Briefly, those are the facts surrounding the two failures of the Government of New South Wales to meet its public obligations.
The Leader of the Opposition criticized the Commonwealth Government for not meeting this payment immediately. I suggest that he will take a different view when he knows the whole circumstances, for this Government did that which was best, in the interests of the bondholders, and to maintain the reputation of Australia. On Mr. Lang’s first default the Commonwealth Government of the day paid the amount immediately, and continued to meet New South Wales commitments overseas for four months.
– The honorable gentleman approved of that action.
– Yes, the Government did what it considered to be right and what it said it would do, after having taken counsel’s opinion as to its liability. No criticism was offered to that procedure, but I suggest that more resolute action should have been taken to make the State of New South Wales stand up to its obligations. All that was done was to take proceedings in the High Court. It was obvious that those proceedings must be long drawn out and that the very remoteness of the issue would make it unsatisfactory. The position was then relieved by an apparent change of heart on the part of the Government of New South Wales, which gave undertakings to assume responsibility for the interest payments that had been made by the Commonwealth, to meet its future interest commitments, to adhere to the Premiers’ plan, and to effect reductions of controllable expenditure to the extent of 20 per cent. However, its second default, which occurred within six months of Mr. Lang’s solemn undertaking to do as I have described, was even worse than the first. Only 24 hours’ notice was given, as against seven days’ previously. The Commonwealth Government immediately investigated the position and found that its liability was not as free from doubt as the previous Prime Minister appeared to think. It recognized that the position must be defined, and that its action against the State of New South Wales would have to be of a more determined character than that which had been taken by the Scullin Government. It also considered that it was essential that the responsibility for the default should be brought home to Mr. Lang’s Government. We had carefully to consider the steps to be taken in order to ensure that New South Wales would, in future, meet all its obligations to the Commonwealth, and pay its interest regularly. We could not remain inactive while Mr. Lang cheerfully allowed his obligations to fall due without making any provision whatever to meet them. On previous occasions, when the Commonwealth Government paid the amounts due by New South Wales immediately, the full effect of the default by New
South Wales was not realized either in Australia or abroad. So long as the Commonwealth was prepared to step in and shoulder the burden no one worried. All the debts were paid, and no trouble was caused, so no one cared. But for the sake of Australia’s future credit, and to protect the holders of New South Wales bonds, the position had to be faced definitely, and final action taken to obviate similar happenings in the future.
Accordingly, the Commonwealth Government came to the conclusion that it would be a mistake to meet the interest obligation immediately. It was clear that a delay for the moment, followed by definite action that would clear the position for the future and provide a method of compelling Mr. Lang to honour his obligations was in the best interests of the credit’ of Australia and of the bondholders. This bill is designed to ensure the carrying out of the obligations of the Government of New South Wales, and to prevent future default and repudiation.
– How are the provisions of the bill to be enforced?
– I do not propose to deal at’ length with the legal and constitutional questions involved in the measure. A full explanation of these aspects of the subject will be given by the Attorney-General (Mr. Latham).
– During the course of the debate, and before the right honorable gentleman will have t’o record his vote on the motion for the second reading of the bill. I propose at’ this stage merely to give a broad outline of the provisions of the bill. First, it recites the doubt’s that have arisen as to the Commonwealth’s obligation in respect of the debts of the States, and definitely puts beyond all question for the future that the Commonwealth i3 responsible for such debts and gives to the bondholders direct rights against the Commonwealth. Until this doubt is removed, Australia’s credit must suffer. Further, whatever legal doubts may exist, the original intention of the financial agreement was that the credit of the Commonwealth and the States was to be consolidated. That was the definite understanding of all parties to the agreement’. That that intention had been carried out was generally believed, and in that faith hundreds of thousands or millions of pounds of Australian bonds have changed hands. The whole of the internal debt of Australia has now been converted into Commonwealth bonds, and, progressively, as they mature, the whole of the existing State bonds will be converted. From every point of view it is essential that the Commonwealth’s responsibility shall be put beyond question ; that the bill does, and the assurance it gives to bondholders will go a long way to establish the credit of Australia on a firm basis.
The broad scheme of the bill is that the Commonwealth should exercise its powers of legislation embodied in the Constitution to enforce the carrying out of the financial agreement. Section 105a, sub-section 3, provides that the Parliament may make laws for the carrying out by the parties thereto of any such agreement. This bill has been introduced pursuant to that . provision. The financial agreement requires that the States shall pay to the Commonwealth the amount necessary in addition to the per capita payments to meet their respective interest obligations. This bill enacts that where a State fails to make such payment action may be taken to obtain the amount from the State revenue. The method provided is that the AuditorGeneral shall give a certificate setting out any amount unpaid by a State to the Commonwealth in respect of the amounts to be provided to meet that State’s interest obligations. This certificate by the Auditor-General is made prima facie evidence that the amount set out is due and owing. An application is then made to the High Court for a declaration that the amount set forth in the certificate is due and payable by the State to the Commonwealth. At any time after the making, by the High Court, of a declaration that any amount is payable by the State to the Commonwealth, a motion would be submitted to the two Houses of this Parliament providing that any specified revenue of the State shall be paid to the Treasurer of the Commonwealth. Upon the making of such a resolution by the two Houses of this Parliament a proclamation would be issued for the payment to the Commonwealth of the revenues of the State com- prised in the resolution, and payment would then have to be made by the taxpayer in the State to the Commonwealth and not to the State. Provision is made that the receipt by the Commonwealth would free the taxpayer from any obligation to the State; on the other hand, payment to the State would be an offence, and, in addition, would not free the taxpayer from his obligations to the Commonwealth.
– Even though the taxpayer had paid in ignorance?
– Payment in ignorance could not be regarded as an excuse in law. In other words, the measure empowers the Commonwealth Parliament to legislate to require revenues of the State to be paid to the Commonwealth instead of to the State in order to meet the unfulfilled obligations of the State to the Commonwealth for interest payments due under the financial agreement. There is also a further provision to enable the enforcement of prompt payment to the Commonwealth of selected State revenue. Under this provision action can be taken without awaiting the declaration by the High Court. Provision is, however, made that a subsequent application must be made to the High Court to obtain a declaration that the amount is due and owing by the State to the Commonwealth.
– What will become of the money pending the decision of the High Court. Will it be held in trust?
– It will be applied in payment of the liabilities of the State.
– The bill also contains a provision to enable the Commonwealth to retain loan moneys borrowed for a defaulting State and to attach moneys held by banks on behalf of such States.
– Is there no other way of getting the money from the States?
– Such other ways as there are would take so long that the Government would not be justified in adopting them. I urge the necessity for the action which the bill proposes. It is new, and of a nature not contemplated when the agreement was made, because of the belief that all governments could be relied on to honour their obligations. The whole basis of the financial structure erected by the financial agreement will be undermined if it is possible for a State to refuse to meet obligations into which it has solemnly entered. When the financial agreement became law the liability was placed upon the States to pay their portion of the interest, and on the Commonwealth to pass on such amounts to the bondholders. No one dreamed that there would arise in Australia a State Premier and Treasurer who would repudiate his obligation. It is vital in the interests of the Commonwealth and the States that a repetition of Mr. Lang’s action shall be made impossible; otherwise a dishonorable government may, at any time, bring disaster and disgrace upon a State, and, through it, upon the Commonwealth. It is the duty of this National Parliament to see that that danger is obviated. The financial agreement having been ratified by every Parliament in Australia and approved by the people, should be honoured by all the parties to it, and that is the purpose of this measure. It deals with several novel and difficult legal and constitutional problems, but it is essential that by this or some other means it shall be put beyond any possibility of doubt that every government in Australia will live up to its obligations. The creation of such assurance will be of the greatest benefit, not only to Australian credit, but also to every section of the community.
Debate (on motion by Mr. Scullin) adjourned.
– I have received from His Excellency the Governor-General a commission authorizing me to administer the oath, or affirmation, of allegiance to members of the House. I now lay the commission on the table.
Debate resumed (vide page 109).
.- The tariff policy of the Labour Government was intended primarily to improve the industries of this country, but unfortunately for Australia that policy has completely failed. As a result of the excessive tariff we have to-day fewer factories, fewer people employed in them, and a reduced production from them. The reason is not that there is any decreased demand for goods. Indeed, because of the exclusion of goods from abroad, there is a greater demand in Australia for the goods that our factories can produce, but their cost is so excessive as to be beyond the reduced purchasing power of the community. The tariff lias produced a number of small unhealthy industries such as always spring up as u result of an excessive tariff. As I read the proposals of the Government, it is intended to maintain those industries, although it has been recognized by our party almost unanimously that they constitute one of our greatest evils.
– Every industry must make a beginning.
– I am not an advocate of freetrade. 1 recognize that there are many industries in Australia which are well worthy of protection, and I am with the Government in giving fair and adequate protection to industries which have a reasonable prospect of success. But it has been recognized by our party, hitherto at any rate, that the tariff of 192S represented a reasonable measure of protection for industry. The duties imposed by the Labour Government represent an average increase ‘of 15 per cent. Primage at 10 per cent, is added, and for a long time there has, in respect of exchange, been a further protection of 25 per cent. In those circumstances’ the tariff is well due for a substantial writing down, especially in respect of rates which are adverse to primary industry.
I should have liked to hear some mention in the Governor-General’s Speech of the sugar monopoly within Australia. The Prime Minister has acknowledged both inside and outside of Parliament, that the sugar monopoly is not justified, but the reason that he has given this House for not bringing down legislation to deal with it, is that an agreement has been made, and that one government should honour an agreement even if made by another government.
– Does the honorable member think that that agreement should be broken?
– I remember the honorable member advocating the breaking of an agreement relating to the payment of interest ou borrowed money. The sugar agreement is not an agreement in the true sense of the word. It Ls an agreement only because of the form in which it is framed. A true agreement implies bargaining between the parties to it. What consideration did the sugar interests give for the extraordinarily valuable monopoly established by successive governments of this country? There is in principle no difference between this so-called agreement and the terms under which the Government has agreed to grant a bounty on the production of gold, iron, or any other commodity. The Government fixes the bounty and there is no bargaining between the parties concerned.
– Would the honorable member be prepared to wipe out the gold bounty?
– I am prepared to agree to the wiping out of all bounties. We are justified in breaking certain agreements. There are what are known as unconscionable agreements. It is absolutely unconscionable that the sugar interests of Queensland should retain the position of extradordinary preferment which it enjoyed in time of prosperity. It is unconscionable that it should be able to retain that advantage while every other section of the community has had to make a sacrifice. Not long ago certain agreements were under the consideration of this House. They were agreements to repay loan moneys -at the end of a stipulated period, and in the meantime to pay interest at certain rates. We went behind those agreements, not because of any moral justification, but because necessity compelled us to take that action. The sugar interests are in an exceedingly favorable position, and one company has been able to continue to make a profit of something like a million pounds a year. Because of the monopoly given to the sugar interests, the values of the cane lands are considerably in excess of their natural values. Further, all the farmers and workmen engaged in the industry are receiving a high rate of remuneration which is not enjoyed by any other section of the community. This so-called agreement has never been approved by Parliament.
– Does the honorable member know that the price that the growers are receiving for their cane is the same as it was in 1914?
– I know that everybody connected with the industry is on a good wicket. The sugar interests, if asked to agree to a reduction in the price of sugar would be able to show a plausible cause for not doing so. For that reason I do not attach much value to the suggestion that we should leave it to the good conscience of those engaged in the industry of Queensland to bring about a reduction in price. We did not leave it to the good conscience of the public servants, the pensioners, or the bondholders, to consent to a reduction.
– We did in respect of the bondholders.
– Those who did not consent were forced to submit to a reduction in interest rates. That action I supported, because I thought that it was necessary. There is a much stronger reason for taking similar action in connexion with the sugar industry. The Government has apparently decided to try to bring about a reduction in the price of sugar by way of negotiation with those engaged in the industry, and if an adequate reduction can be obtained by that means there will be no need to talk of breaking the agreement. I hope that the Government will treat the sugar interests as’ it treated the bondholders. If the sugar interests will not agree to a proper and adequate reduction in price, it should be brought about by legislation.
Question resolved in the affirmative.
– I shall ascertain when it will be convenient for His Excellency to receive the Address-in-Reply, and honorable members will be informed accordingly .
New South Wales Interest Payments - Payment of Bounties - AddressinReply Debate - Extraction of Oil From Coal.
Mr. LYONS (Wilmot- Prime Minis
That the House do now adjourn.
The right honorable member for Cowper (Dr. Earle Page) asked me yesterday whether I would lay on the table of the library the papers dealing with the default of the New South Wales Government regarding interest payments. I have looked into the matter, and have directed that copies of statements issued by the Commonwealth Government, and copies of telegrams which passed between the two Governments, shall be laid on the table. These documents contain all the information necessary to enable honorable members to understand the position.
.- I desire to learn from the Government what is its policy in regard to bonuses and bounties. The sugar crop in Queensland is ready for harvesting, and the growers are anxious to know where they stand, and what will be the attitude of the Government failing a voluntary agreement being reached between the Government and the growers. In the interests of the mining industry I should also like to learn from the Government what is its attitude in regard to the gold bounty. The Government has said that it desires to create confidence, so that private enterprise will be encouraged to provide extra employment.. The present uncertainty regarding the Government’s policy is certainly not tending to create that confidence. Many Australian industries are partly dependent on bounties. There are, for instance, the cotton industry, the peanut industry, the wine industry, and the gold-mining industry. One speaker representing a Western Australian constituency declared to-night that he favoured the abolition of bounties. Well, the Government he supports has a majority, and if he has any influence with his leader, he can bring about the abolition of bounties, and let the people who are producing gold, sugar and other assisted commodities know where they stand. Those honorable members representingsugargrowing districts have received many telegrams regarding the industry. No sugar is grown in my electorate, but gold is produced there.
– I understand that the honorable member has been traversing the remarks made by the honorable member for Perth (Mr. Nairn) during a debate which has concluded.
– I just mentioned the matter in passing.
.- I desire to enter an emphatic protest against what happened in this House a few minutes ago.
– The honorable member is not justified in reflecting on the proceedings of the House. Every opportunity was given to honorable members to speak to the motion which has just been disposed of. It is the practice that, when nobody rises, the question shall be put to the House. The question was put deliberately.
– I desire to, make a personal explanation. I was advised by the Government Whip that an honorable member of the Opposition intended to speak next on the motion for the adoption of the Address-in-Reply. A member of this party had spoken, followed by a member of the Government party, so that, in the ordinary course of events, we had a right to expect that the call would go to the Opposition side of the House. I was informed that an exMinister would be the next speaker, and I anticipated that, as such, he would receive the call. I sat down in order to allow him to he called.
– Was not the honorable member himself a Minister once?
– Not in this Parliament. I believe that I was misled, and I shall take an opportunity at a later stage of making the remarks I intended to make during the Address-in-Reply debate.
.- I desire to draw the attention of the Prime Minister to the position of the coal industry in Australia. This industry is languishing because coal is not being used to the same extent as it was five or ten years ago. One of the chief reasons for this is the adoption of- other means of power. There is now only one hope for the coal industry, namely, the extraction of oil from coal. I have read many reports on this subject. I was instrumental in inducing the last Government to send Dr. Rivett overseas to investigate the various pro cesses of oil extraction from coal. His report held out no hope whatever, because, he said, the extraction of oil from coal was not a commercial proposition. One of the main objections was the accumulation of the coke residue, and no commercial use could be found for the coke produced. Even in England, a highlyindustrialized country, no market could be found for the residue, of which there was from 12 to 14 cwt. left from each ton of coal treated. He stated that low temperature distillation and hydrogenation of coal did not offer attractive economic possibilities, though there were other reasons which might justify the extraction of oil from coal. A conference was held in November of last year in Pittsburg, in the United States of America, to consider this matter, and I asked the Government to send a representative, but it refused. A paper was submitted by Professor Wheeler to that conference, which showed that there were great possibilities in a new process which had been invented by an Italian named Piero Salemi. The paper stated -
Professor Wheeler revealed that the newfound system devised by Commendatore Piero Salemi is a variation of a low temperature carbonization process with which the Department of Fuel Technology, Sheffield University, has been experimenting during the last four years, as being that which presented the highest thermal efficiency and yielded true primary oils of the best quality and semicoke (if the highest density obtained by any process. Without impairing the thermal efficiency, Professor Wheeler goes on, or the character of the products yielded by the original system, Salemi has succeeded in increasing the density of the semi-coke so materially (by 25 to 30 per cent.) that it can be accepted as a satisfactory substitute for bituminous coal for general purposes. The calorific value of the coke is also increased, while the process incidentally removes the causes of trouble hitherto experienced in the refining of lowtemperature oils. Mechanical difficulties of plant have also been overcome.
In my electorate, there are two young engineers who have invented a process for low temperature carbonization of coal, and they have proved before the exMinister for Science and Industry (Senator Daly), who visited the district, that they can extract oil from coal on a commercial basis. They have solved the problem of using the coke residue by obtaining from it gas capable of driving motor vehicles. For the last six months, they have had running about Newcastle a five-ton motor lorry propelled by this gas. This morning, during question time, I asked the Prime Minister whether he could afford any assistance to these engineers, and he gave me a discouraging reply. It may be that they have discovered a means of rehabilitating the coal industry in Australia, and, at the same time, of making this country independent of the United States of America and other oversea countries for our supplies of motor fuel. The Government of New South Wales has set aside £10,000 to assist this work, on condition that an equal sum is provided by the Commonwealth. These engineers have stated that if the necessary assistance were obtained, they would employ 30 men immediately in the extraction of oil from coal, and in twelve months’ time they would be employing 200 men. The Government should set aside this money, and should make further sums available from time to time for carrying out research work into this important phase of the coal industry. Money has been spent in assisting those engaged in boring for oil, and it is now proved beyond doubt that oil can be successfully extracted from coal. A report recently submitted shows that, by the hydrogenation process, oil can be extracted from coal, and sold at 7d. per gallon, the cost of the coal .used being only 2d. I heard the right honorable member for Flinders (Mr. Bruce), when he was leader of a government, state definitely that if the coal-miners accepted a reduction of 12-J per cent, in their wages, they would ultimately receive more money, and more work would be made available, because the coal trade would boom. That statement has been proved to be incorrect, because, since the resumption of the coal industry after the lockout in the northern district of New South Wales, we find that only 7,000 men arc now employed, compared with 14,000 previously, and they are engaged, on the average, only seven days a fortnight. I hope that serious consideration will be given to the proposal to make funds available to assist in the rehabilitation of the industry.
– The honorable member for Hunter (Mr. James) has often spoken in the House on subjects connected with the coal industry, and we all appreciate his interest in that industry. His interest is natural, having regard to the constituency which the honorable member represents. This evening he has spoken of the scientific developments in the utilization of coal for the production of oil. The subject is so important that I make no apology for addressing a few observations to the House on the matter that the honorable member has raised. He suggested that attention should be paid to certain modern scientific developments. I suggest that there are other considerations to which the honorable member might devote his personal attention. Coal is, to a large extent, the basis of industry in Australia, because it is a source of power. But the price of coal has become so high that the people of Australia have not been able to buy coal, and as a result we find that they are actually importing oil for the purpose of producing power, although, in the constituency of the honorable member are some of the finest coal deposits in the world. We are unable to use them as we should because the people cannot afford to buy coal at the price at which it is available to them. Australia at one time had a fine export trade in coal worth £2,000,000 or more a year, but that has practically disappeared, because prices were too high.
The Government of the State of Victoria has spent about £10,000,000 in developing its own coal-fields by opening up lignite deposits which should not have been used for millions of years. The people of Victoria ought to be burning coal from Newcastle and Maitland. Why was this enormous expenditure of £10,000,000 incurred for Yallourn? It was because Newcastle and Maitland coal was so expensive that the people of Victoria could not afford to buy it, and, further, because supplies were so irregular, and stoppages of one kind and another were so frequent, that the people made up their minds that they would no longer be dependent on the vagaries of the coalminers of Newcastle and Maitland. This development at Yallourn has been necessary, but it is uneconomic for Australian interests as a whole. Victoria was forced into it because of the uncertainty of the supplies from the coal-mines of New South Wales. Everybody knows that the coal industry in that State is burdened with too much capital expenditure, and it is impossible to earn reasonable interest on the money expended in the industry. The report of the Royal Commission on the Coal Industry has shown what ought to be done in that respect.
The coal-miners whom the honorable member represents were accustomed, in their palmy days, to work only three to four days a week, and it was considered outrageous to ask them to work for a longer period than that. They earned a full living, and more, by working only three or four days a week. No industry in Australia can afford to provide conditions of that nature. At the present time, coal-miners in the honorable member’s constituency are earning from 35s. to 40s. per shift.
– That statement is incorrect.
– Is it possible for an industry to be successful under such conditions? The industrial conditions enforced to-day in the coal industry in New South Wales make it possible for a man working a machine to earn from £5 to £6 a day.
– That is not so.
– The honorable member will find those facts set out in the report of the Royal Commission on the Coal Industry. Those conditions must be reviewed, in the interests of the industry itself, because it is cutting its own throat, and placing a burden on other industries. The price of coal in Australia is so high that the people cannot afford to buy it for ordinary industrial uses.
The honorable member would do a great service to his country if hewere to invite those with whom he is particularly associated to reconsider all the conditions in the industry. I have already referred to the over-capitalization of the industry, and I also point out that the wages and industrial conditions require reconsideration in the interests of the industry itself, as well as in theinterests of other industries.
– Those who were working in the mines are accepting the dole.
– The honorable member fails to perceive that these conditions have nearly brought about the death of the coal industry, and that is why so many miners are on the dole. About three tons of coal are required to produce a ton of steel, and, if we could introduce reasonable conditions in the coal industry in Australia, instead of attempting to maintain conditions which suit a few men, and which, for some entirely unintelligible reason, the miners have been forced to support up to the present time, a real contribution would be made to the welfare of the miners themselves, as well as to the well-being of other Australian industries.
– The miners are living on the dole now.
– Because the product of the mines cannot be sold.
– The honorable member for Hunter (Mr. James) has had a full opportunity to put his case to the House, and he must listen to the Attorney-General in silence.
– I am appealing to the honorable member to use his influence with those concerned in the industry whom he knows well, and to ask them to reconsider the conditions in the industry in their own interests. The honorable member will find the facts to which I have referred in the report of the royal commission that inquired into conditions in the industry-
– People who give evidence on royal commissions can tell as many lies as you are telling here.
– I ask the honorable member to withdraw that remark.
– I withdraw it.
– If the honorable member persists in interjecting, I may have to name him.
– The Attorney-General (Mr. Latham) would not suggest that he has quoted a typical case indicative of the wages of coal miners.
– I do not suggest that for a moment; but I say that the conditions in the industry are not in the interests of the miners or of the industry itself. I have made that statement in the town halls of Newcastle and Maitland, and I believe the miners themselves are beginning to realize that a mistake has been made in attempting to maintain unreal conditions, because they are injuring themselves and every other industry in Australia. I sincerely appeal to the honorable member for Hunter to consider thesematters, as well as the points to which ho has referred, in order that there may be an increased consumption of coal, and that miners may be taken off the dole and put back to work.
– I support the request made by the honorable member for Hunter (Mr. James). It is reasonable to suggest that (he Government should consider the advisability of assisting the Government of New South Wales to develop some new phases of theindustry, in order to repatriate some of the miners who cannot be absorbed at the present time. The Attorney-General knows well that some of the statements that he has made to-night are considerably out of date. He has referred to exceptional instances which might have been pointed out when the coal-mining industry was in a much more flourishing position than it is to-day.
– I refer to 1928 and 1929. The conditions were bad then.
-The conditions that operated at that time are not experienced to-day. The Attorney-General was not justified in quoting exceptional cases that have come under notice, since the honorable member for Hunter is appealing for assistance to an industry that is now almost out of business. The Attorney-General knows, perhaps, better than any other member, that the latest international statistics show that the greatest coal-fields in the world, where the most efficient methods are adopted, and where the lowest wages are paid, cannot keep their plants going at full capacity. All coal-fields are experiencing the same difficulty as that through which the New South Wales industry is passing,and a general attempt is being made to repatriate some of the excess miners by absorbing them into other branches of industry. That is why the present appeal is being made to the Government.
I remember the report of another commission, which was brought into being by the Bruce-Page Government. An extensive inquiry was made by the Development and Migration Commission three or four years ago. Messrs. Gepp, Gunn and others recommended that we should bring several thousand Welsh miners to Australia, because of the impossibility of British mining companies employing all the miners in Great Britain. Twelve months afterwards, another review of the industry took place, and the same officials then recommended that the Government should try to absorb several thousand coal miners in the Newcastle district in other industries. The Attorney-General appears to have forgotten those recommendations.
The further statement of the honorable gentleman that £10,000,000 has been expended at Yallourn to develop brown coal in competition with black coal was equally reckless and unfounded. The largest part of that expenditure was for the erection of a modern plant for the generation of electrical power, heat and light, and their distribution throughout Victoria.
– Because of the high price of coal from New South Wales.
– That is not so. Sir John Monash recommended that electrical power should be developed at the point of coal production rather than that coal should be brought from other States to the generating plant. The Yallourn scheme was not a waste of money, it was a necessary development of the State’s resources, all experts being agreed that the only way to obtain cheap electrical power is to develop it at the source of coal supply.
– In regard to the remarks of the honorable member for Kennedy (Mr.Riordan) I have to say only that government policy is not announced on the motion for the adjournment of the House. The proposals of the Government regarding bounties will be made known in due course.
Question resolved in the affirmative.
House adjourned at10.19p.m.
Cite as: Australia, House of Representatives, Debates, 18 February 1932, viewed 22 October 2017, <http://historichansard.net/hofreps/1932/19320218_reps_13_133/>.