House of Representatives
26 February 1932

13^th Parliament · 1^st Session

1. House of Representatives
2. 13^th Parliament
3. 1932

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• QUESTION
  • DAYS OF MEETING
• QUESTION
  • HUMERESERVOIR
• QUESTION
  • IMPERIAL ECONOMIC CONFERENCE
• QUESTION
  • OVERSEAS PAYMENTS
• QUESTION
  • TRAVELLING UNEMPLOYED IN CANBERRA
• QUESTION
  • COMMONWEALTH DEPARTMENTS
• QUESTION
  • SHALE OIL
• QUESTION
  • UNEMPLOYMENT RELIEF
• QUESTION
  • JAPAN AND CHINA
• QUESTION
  • AUSTRALIAN COMMONWEALTH LINE OF STEAMERS
• QUESTION
  • SALES TAX
• QUESTION
  • NEWSPAPERS BANNED BY POST OFFICE
• QUESTION
  • TOBACCO INDUSTRY
• QUESTION
  • WAR SERVICE HOMES
• QUESTION
  • UNEMPLOYMENT
• QUESTION
  • ROYAL MILITARY COLLEGE
• QUESTION
  • REPLIES TO QUESTIONS
• QUESTION
  • IMPORTS AND EXPORTS
• QUESTION
  • AUSTRALIAN TRADE WITH SOUTH AFRICA
• QUESTION
  • AUSTRALIAN TRADE WITH NEW ZEALAND
• QUESTION
  • NEW ZEALAND TRADE
• QUESTION
  • WIRELESS BROADCASTING
• QUESTION
  • FINANCING OF DOLE ORDERS
• QUESTION
  • AUSTRALASIAN PERFORMING RIGHT ASSOCIATION
• QUESTION
  • WING-COMMANDER COLE
• NORTHERN TERRITORY
  • Tobacco Culture
• WAR SERVICE HOMES BILL
• FINANCIAL AGREEMENT ENFORCEMENT BILL
  • Second Reading
• PAPERS
• ADJOURNMENT

---

Mr. Speaker (Hon. G. H. Mackay) took the chair at 10.30 a.m., and read prayers.

page 411

QUESTION

DAYS OF MEETING

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

– by leave - The Government proposes to ask the House to meet, after next week, on Tuesdays, until Easter, and to adjourn on Friday the 18th March, over the holidays.

Mr.R. Green. -What will bo the duration of the adjournment?

Mr LYONS:

– Three weeks at least; possibly four weeks.

page 411

QUESTION

HUMERESERVOIR

Mr GIBSON:
CORANGAMITE, VICTORIA

– Will the Minister for Works make available to the House the report of the royal commission appointed by the Bruce-Page Government to investigate the reasons for the increased cost of the Hume reservoir?

Mr MARR:
Minister for Health · PARKES, NEW SOUTH WALES · UAP

– I shall inquire whether the report can be made available.

page 411

QUESTION

IMPERIAL ECONOMIC CONFERENCE

Mr FORDE:
CAPRICORNIA, QUEENSLAND

– When does the Minister for Trade and Customs expect to depart from Australia to attend the Imperial Economic Conference at Ottawa? Will the tariff schedule which he presented to the House yesterday be dealt with before his departure?

Mr GULLETT:
Minister for Trade and Customs · HENTY, VICTORIA · UAP

– I cannot state on what date the delegation will leave Australia for Ottawa, hut I assume that opportunity will be afforded before my departure for a full discussion of the tariff schedule.

page 411

QUESTION

OVERSEAS PAYMENTS

Mr WATSON:
FREMANTLE, WESTERN AUSTRALIA

– Will the Assistant Treasurer explain whether payments from State governments to overseas creditors are made direct by them, or through the Commonwealth Government?

Mr BRUCE:
FLINDERS, VICTORIA · NAT; UAP from 1931

– The procedure varies.

Generallythemoneysaremadeavailable by being paid to the Commonwealth Government in Australia, and it effects the transfer to London, where the Commonwealth agents make the money available, either to the bank which is the authority for paying the interest, or for transfer to New York if the payment is due there.

page 412

QUESTION

TRAVELLING UNEMPLOYED IN CANBERRA

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

-Will the Minister for Home Affairs allow unemployed persons now in camp in Canberra to remain there if they are able to secure food relief elsewhere?

Mr ARCHDALE PARKHILL:
Minister for Home Affairs · WARRINGAH, NEW SOUTH WALES · UAP

– The Government does not intend to provide in Canberra a permanent camp for travelling unemployed; but the honorable member’s suggestion will be considered.

page 412

QUESTION

COMMONWEALTH DEPARTMENTS

Accommodationatciviccentre,canberraamaloamation.

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

– I ask the Minister for Works whether the report in the Canberra Times of to-day is correct - that he and the Assistant Treasurer (Mr, Bruce) have recommended that the Government should vacate the space at present leased from private owners at Civic Centre, but for the present no decision will be made by the Cabinet? Are the premises at one time occupied by the Defence Department at Civic Centre, but vacated some months ago, still empty? Does the Government propose to renew the lease of these premises in August next?

Mr MARR:
UAP

– The report is without foundation. The Assistant Treasurer and I were not appointed a sub-committee by the Cabinet to deal with this matter, whichhas not been considered by the Government at all. I assume that the renewal or discontinuance of existing leases will bedealt with by the Government before they expire.

Mr FORDE:

– Will the Prime Minister state whether there is any truth in the newspaper statement that the Government proposes to amalgamate the Departments of Health. Works and Home

Affairs? If so, will such amalgamation necessitate a re-arrangement of portfolios?

Mr LYONS:
UAP

– The Government has resolved to effect economies wherever possible, and when the possibility of amalgamation has been thoroughly investigated a decision will be reached. At present I can give no definite information to the House.

page 412

QUESTION

SHALE OIL

Mr JAMES:
HUNTER, NEW SOUTH WALES

– The Canberra Times has publisheda cablegram from London stating that tests made of Nownes shale oil have yielded better results than were anticipated. I ask the Minister representing the Minister for Industry whether the Government will consider the granting of further assistance to the Shale Oil Committee to enable it to continue its research ?

Mr BRUCE:
FLINDERS, VICTORIA · NAT; UAP from 1931

– In the present financial circumstances of the Commonwealth, money can be made available for research only when we are assured that immediate and valuable practicable results will be obtained. Until I am in possession of fuller information regarding the tests in London I cannot give a more definite reply to the honorable member’s question.

page 412

QUESTION

UNEMPLOYMENT RELIEF

Mr GANDER:
REID, NEW SOUTH WALES

– Having regard to the definite statement made by the United Australia party candidates during the general election campaign that if they were placed on the treasury benches thousands of men who were seeking employment would be able to obtain it, will the Prime Minister inform the House how many have been found work since he assumed office, when the next batch of unemployed will be engaged, and how many it will consist of ?

Mr LYONS:
UAP

– The honorable member prefaced his question with a statement for which there is no foundation. The policy of the United Australia party was declared in the speech with which I opened the election campaign, and no undertaking such as the honorable member alleges was given by me.

Mr ROSEVEAR:
DALLEY, NEW SOUTH WALES

– I ask the Prime Minister whether the Commonwealth grant for the relief of unemployment has been exhausted : if so, is the Government prepared to make a further and more substantial contribution to assist the State Governments in the relief of unemployment?

Mr LYONS:

– I am not sure whether the whole grant has been exhausted, hut I shall let the honorable member have that information. What the Commonwealth may do for the relief of unemployment will be governed by the financial position, and I have previously stated that the whole matter will be discussedwith representatives of the States at the next meeting of the Loan Council.

page 413

QUESTION

JAPAN AND CHINA

Dr MALONEY:
MELBOURNE, VICTORIA

– During the World War Japan endeavoured to impose on China 21 conditions, of which nineteen were eliminated at the Washington Conference. Will the Assistant Minister for Defence inform the House whether the other two points are still in operation, and if so, what are they?

Mr FRANCIS:
Minister in charge of War Service Homes · MORETON, QUEENSLAND · UAP

– I shall be glad to get the information for the honorable member.

Mr BEASLEY:
WEST SYDNEY, NEW SOUTH WALES

– Is the Minister representing the Minister for External Affairs prepared to make any further statement on the situation that is developing in the Far East? Newspapers report the possibility that the United States of America will side with China and Great Britain with Japan. As the League of Nations has failed to deal with the trouble, what is the position of the Commonwealth ?

Mr BRUCE:
FLINDERS, VICTORIA · NAT; UAP from 1931

– I read in the Canberra Times this morning an allegation regarding the attitude of the United States of America, but I saw nothing to justify the honorable member’s statement that Great Britain proposes to side with Japan. Whatever the honorable member may have read in the newspapers, there is no foundation for the suggestion that the British Empire is taking sides in the dispute. . In regard to the general situation I have nothing to add to what was said by the Minister for External Affairs a few days ago.

page 413

QUESTION

AUSTRALIAN COMMONWEALTH LINE OF STEAMERS

Mr RILEY:
COOK, NEW SOUTH WALES

– I ask the Prime Minister to state, in view of the sale of the Commonwealth Shipping Line four or five years ago, and the diminution of the activities of the Cockatoo Island Dockyard, how long it is proposed to keep in operation the Commonwealth Shipping Act, and to maintain the Shipping Board appointed under that act?

Mr LYONS:
UAP

– That matter has already been under consideration by the Government, but no definite decision has been arrived at. We are investigating the whole subject in order to see whether, by an amendment of the act, it would be possible to effect some economy.

page 413

QUESTION

SALES TAX

Coarse Salt and Rock Salt

Mr THOMPSON:
NEW ENGLAND, NEW SOUTH WALES

– Will the Minister for Trade and Customs confer with the Federal Commissioner of Taxation in regard to the sales tax on coarse salt and rock salt as it affects the position of country storekeepers? By way of explanation, let me state that, during the last six. months, country storekeepers, particularly in New South Wales, have been bombarding the Commissioner with requests that he should define the position in regard to salt. At present the storekeepers cannot make a declaration that the salt is to be used only for the feeding of stock, and that cuts them out of the business of supplying salt to country stock-owners. The Commissioner, apparently, has not yet been able to come to any solution of the difficulty, and I ask the Minister whether he will take steps to hasten a decision?

Mr BRUCE:
FLINDERS, VICTORIA · NAT; UAP from 1931

– This is really a Treasury matter, and I shall discuss it with the Commissioner for Taxation; indeed, it is under consideration at the moment.

page 413

QUESTION

NEWSPAPERS BANNED BY POST OFFICE

Mr MARTENS:
HERBERT, QUEENSLAND

– Will the PostmasterGeneral state why four publications, The Workers’ Weekly, The Working Woman, TheRed Leader, and The Pan-Pacific Worker, have been banned for transmission through the post office as newspapers?

Mr FENTON:
Postmaster-General · MARIBYRNONG, VICTORIA · UAP

– Issues of the papers mentioned were examined, and it was found that they were promulgating theories which were considered dangerous. For that reason they were banned.

page 414

QUESTION

TOBACCO INDUSTRY

Mr THOMPSON:

– Will the Minister for Trade and Customs state when he proposes to lay on the table of the House the report of the Tariff Board on the tobacco industry?

Mr GULLETT:
UAP

– The report will be tabled one day early next week. .

page 414

QUESTION

WAR SERVICE HOMES

Mr HOLLOWAY:
MELBOURNE, VICTORIA

– I ask the Minister in charge of war service homes whether he or the Government has revoked the order of the previous Government which instructed officers controlling the department not to eject the purchasers of war service homes because of arrears in their payments ?

Mr FRANCIS:
UAP

– Already this question has been answered by a full statement published in the press, but, for the information of the honorable member, I may state that there is a small minority of occupants of war service homes who are in a position to meet their payments, and “have not been doing so. These in future will be required to pay. Those who are not in receipt of an income equalling the basic wage, will be required to make pro rata payments according to their earnings.

page 414

QUESTION

UNEMPLOYMENT

Surplus Military Clothing

Mr FRANCIS:
UAP

– Yesterday the honorable member for Hunter (Mr. James) asked the following question, without notice : -

In view of the fact that it is the declared policy of the Minister for Defence that, in the further distribution of surplus military clothing, the Government will allocate it to charitable institutions in the Sydney metropolitan area, thereby debarring charitable organizations in the country from securing such clothing, will the Minister consider reviewing this policy, and see that surplus stocks of this clothing are made available to the unemployed during the coming winter?

I am now in a position to inform the honorable member that it is impracticable for the Defence Department to undertake the distribution throughout the State of New South Wales of such surplus or part-worn military clothing as may become available from time to time. In the State of New South Wales where the State Government will not undertake the distribution, it has been decided that all unserviceable articles available for free issue in New South Wales are to be handed over to recognized charitable institutions selected by the Base Commandant in collaboration with the State Chief Secretary’s Department. The Commonwealth Government does not desire to restrict the issue to charitable institutions in the metropolitan area. Inquiries will be made as to whether any surplus military clothing beyond that already allocated is likely to be available for issue.

page 414

QUESTION

ROYAL MILITARY COLLEGE

Cigarette Smoking

Mr FRANCIS:
UAP

– Yesterday the honorable member for Kalgoorlie (Mr. A. Green) asked the following question, without notice: -

What is the reason for amending regulation 58 of the Royal Military College with regard to lifting the prohibition of cigarette smoking by cadets?

I am now in a position to inform the honorable member that on the 22nd November, 1931, the Military Board reported as under, concerning the Royal Military College -

When the college regulations were drawn up twenty years ago, cigarettes were not allowed to be smoked in the British Army when on parade or in uniform, but this has now been altered. The college regulations still provide that cigarettes are at all hours prohibited, yet it is obviously difficult to ensure that when the cadet is outside the college he does not smoke cigarettes. In our opinion, this restriction should be removed on the understanding that if any cadet over-indulges in cigarette smoking he could be prevented from smoking at least when in the college or grounds. Regulation 58 for the Royal Military College would require amendment. In anticipation, authority has been given for cigarettes to be smoked.

The Military Board accordingly recommended the amendment of regulation 58, which was approved by the then Minister for Defence in November last.

page 415

QUESTION

REPLIES TO QUESTIONS

Mr SCULLIN:
YARRA, VICTORIA

– During the last Parliament, Standing Orders were amended to enable Ministers to hand in to the clerks replies to questions on notice, instead of reading them. I understood that the same practice applied to deferred questions. The idea was to save time, and I ask you, Mr. Speaker, whether that practice is to be followed now ?

Mr SPEAKER (Hon G H Mackay:
LILLEY, QUEENSLAND

-I understood the Assistant Minister for Offence (Mr. Francis) to say that he was answering questions asked yesterday without notice. It is for the Minister to decide whetherhe will hand in the reply to the clerk which, I think, would meet the position, or whether he will read it.

Mr LYONS:
UAP

– In future, replies to questions will be handed in.

page 415

QUESTION

IMPORTS AND EXPORTS

Mr PRICE:
BOOTHBY, SOUTH AUSTRALIA

asked the Minister for Trade and Customs, upon notice -

What was the total value of(a) imports, and (b) exports, for each State of the Common wealth for each of the years 1928-20, 1920-30, and 1930-31?

Mr GULLETT:
UAP

– The figures are contained in the following table : -

page 415

QUESTION

AUSTRALIAN TRADE WITH SOUTH AFRICA

Mr PRICE:

asked the Minister for Trade and Customs, upon notice -

What was the value of trade, giving imports and exports separately, between Australia and South Africa, for the years 1928-29, 1929-30, and 1930-31?

Mr GULLETT:
UAP

– The information desired is as follows: -

page 415

QUESTION

AUSTRALIAN TRADE WITH NEW ZEALAND

Mr PRICE:

asked the Minister for Trade and Customs, upon notice -

What was the value of trade, giving imports and exports separately, between Australia andNew Zealand for theyears 1928-20,1929-30, and 1930-31?

Mr GULLETT:
UAP

– The information desired is as follows: -

page 415

QUESTION

NEW ZEALAND TRADE

Mr GULLETT:
UAP

– The honorable member for Forrest (Mr. Prowse) has asked a number of questions regarding New Zealand trade, tariff duties, and costs of production. I shall look into the honorable member’s questions, and furnish him with a reply as soon as possible.

page 415

QUESTION

WIRELESS BROADCASTING

Licence Fees - Payment to Performing Right Association

Mr GUY:
BASS, TASMANIA

asked the PostmasterGeneral, upon notice -

1. Will he state the number of wireless listeners’ licences issued by his department in each State of the Commonwealth?
2. Willhe give full particulars of the allocation of the money derived from licence fees?
3. What royalty does the Australasian Performing Right Association demand from the broadcasting companies for broadcasting copyright music?

Mr FENTON:
UAP

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

1. Wireless receiving licences in force at the 31st January,1932, were: - New South Wales, 127,734; Victoria, 134,523; Queensland, 26,775; South Australia, 32,560; Western Australia, 11,046; Tasmania, 8,756 - total for Commonwealth, 341,394.
2. The allocation of the money derived from licence foes for the year ended the 30th June, 1931, was: Australian Broadcasting Company, £186,949; Amalgamated Wireless Limited, £49,365: Commonwealth, £146,673 - total, £382,987.
3. The Australian Broadcasting Company pays on the following basis: - On the first 250,000 licences, 2s. per licence; on the next 50,000 licences,1s.6d. per licence; and on all licences over 300,000,1s. per licence. The royalty payable by licensed broadcasting stations is at present under negotiation between the parties concerned.

page 416

QUESTION

FINANCING OF DOLE ORDERS

Mr.WATSON asked the Treasurer, upon notice -

Is it a fact that a portion of the credits advanced by the Loan Council is expended by the various State Governments in providing dole orders?

Is the Loan Council in possession of the figures concerning the value of dole orders issued and not redeemed by the various governments?

Is this floating liability taken into consideration when calculating the amount of the shortage on temporary accommodation to the various governments ?

Mr LYONS:
UAP

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

1. Yes, the advances provided for revenue purposes cover the excess of expenditure (including expenditure on unemployment relief) over revenue.
2. No.
3. No.

page 416

QUESTION

AUSTRALASIAN PERFORMING RIGHT ASSOCIATION

Mr GUY:

asked the Minister representing the Attorney-General, upon notice -

1. Has the Government made any inquiries as to whether the charges of the Australasian

Performing Bight Association Limited are fair and reasonable; if not, will such an investigation be made?

2. In view of the reduced business done and the sacrifices towards rehabilitation made by hall-owners, lessees and others, has this company reduced its” fees’ where hardship is imposed?

3. Can he supply the following information regarding this company for the past year: -

   1. What remuneration was received by each director?
   2. What were the profits or the excess of receipts over disbursements, who participated in thedistribution, and what amount was received by each?
   3. How many members are there in Australia, and how much did each receive ?
   4. What is the average fee per performance in Australia?

Mr BRUCE:
FLINDERS, VICTORIA · NAT; UAP from 1931

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

1. The matter is being investigated at the present time.
2. I do not know whether the company has, in fact, reduced its fees, but I have no reason to think that in case of genuine hardship the company would not favorably consider a reduction of fees.
3. The information is not available in the department. The only manner in which this information could be obtained would be from the company itself.

page 416

QUESTION

WING-COMMANDER COLE

Mr FRANCIS:
UAP

– The honorable member for Melbourne (Dr. Maloney) has asked a number of questions regarding Wing-Commander Cole. Inquiries will be made and a reply will be furnished to the honorable member as early as possible.

page 416

NORTHERN TERRITORY

Tobacco Culture

Mr ARCHDALE PARKHILL:
UAP

– On the 25th February, the honorable member for the Northern Territory (Mr. Nelson) asked me, without notice, whether it was intended to honour the promise made by my predecessor to send a tobacco expert to the Northern Territory, to give instruction to the agriculturalists there. I am how in a position to advise the honorable member that the position is as outlined in the letter of the 18th November, 1931, sent to him by my predecessor. A request was received from the Administrator of the Northern Territory for an expert on tobacco culture to be sent to the Northern Territory. This request was brought to the notice of the Executive Committee of the Australian Tobacco Investigation. The committee considered this request towards the end of last year and decided that an officer could not be made available for the proposed visit during the present season. The committee further decided that consideration would be given to the request when circumstances were more favorable. I shall take the matter up again with the committee.

page 417

WAR SERVICE HOMES BILL

Motion (by Mr. Francis) agreed to -

That ho have leave to bring in a hill for an act to amend sections 31,36 and 43 of the War Service Homes Act, 1918-1929.

Bill brought up by Mr. Francis, and read a first time.

page 417

FINANCIAL AGREEMENT ENFORCEMENT BILL

Second Reading

Debate resumed from the 25th Febru ary (vide page 385), on motion by Mr. Lyons. -

That the bill be now read a second time.

Mr HOLMAN:
Martin

.- Rising at this late stage of the debate, I feel that I must preface my remarks by an appeal to the indulgence of honorable members. The case for the bill has been put, not only by the Prime Minister (Mr. Lyons), but by two of his colleagues, in speeches which all honorable members will agree were admirable, and many will consider convincing. It may seem superfluous, therefore, that another member should attempt to add illumination where already so much light has been given. I can only say in defence that, there are still points which require further discussion, especially those raised by the Leader of the Opposition (Mr. Scullin).

The right honorable member for Flinders (Mr. Bruce), speaking for the Cabinet, invited those of us who had suggestions to make not be to backward in stating them. I assure honorable members that I shall shorten my remarks all round, and particularly to the extent that I shall not occupy time in discussing the need for some such measure as that before us. I take the need of it for granted. There has been no serious opposition to the view that some such measure is needed, except from the honorable members who more or less represent in this House the present Government in New South Wales. They have put their opinions very forcibly, and I have listened to them with deep attention and some benefit. I was among those who were thanked by the honorable member for East Sydney (Mr. Ward) for the courteous and attentive hearing accorded to him. I gave those honorable gentlemen such a hearing, and benefited by their remarks; but I am bound to say that I did not hear from the honorable member for West Sydney (Mr. Beasley), or from any of his followers, . anything which sways my conviction that the introduction of this measure is absolutely justified at the moment.

References which were made yesterday by the honorable member for Hunter (Mr. James) to the Gospels, stand, perhaps, on a somewhat different footing. I remind him of a passage which may have escaped his notice. It is there laid down as a Christian duty to “ render to Caesar the things that are Caesar’s.” I suggest that the honorable member, in his unaccustomed theological studies, might devote some attention to the passage I have quoted, because it bears a close relation to the matter now under discussion. In fact, it constitutes Scriptural authority for the action we propose to take.

I desire to confine my remarks to the bill, the wholebill and nothing but the bill, and so far as possible to refrain from commenting on the present state of affairs in New South Wales, or the division of opinion which arises when honorable members who represent New South Wales discuss this measure across the chamber.

It is nowa commonplace that the bill aims at the achievement of two entirely different objects. The first part of the measure - by which I do not mean technically Part I. of the bill, which contains merely preliminary matter, but the first portion of the bill taken as a whole - does absolutely create new rights. It imposes new liabilities, and brings those liabilities to bear upon new parties. That is of the first importance, and this portion of thebill must be distinguished from the remaining portion, which deals with rights that are already in existence. The liabilities there dealt with have been created by the existing law, and the parties which are made subject to the provisions of the measure, are already in existence, and are already in contractual relation to each other as a result of past loan operations. The second portion of the bill provides for an alteration of procedure, and for nothing else. It does not change substantive rights; it makes no man liable, even to the extent of Id., who was not liable before; it merely replaces the existing method of procedure for the establishment of rights and the recovery of debts by a better method. That is not to say that the second portion of the bill is not an enormously important piece of legislation. Honorable members will forgive me for taking a parallel drawn from the history of the English law. The Habeas Corpus Act is recognized by all constitutional historians as one of the turning points in the history of English liberty. But that Act, when passed in the reign of Charles II., was merely a law governing procedure. The right itself had existed from time immemorial. 3fet the procedure for its enforcement enacted some years after the Restoration is regarded by all students of legal history as marking a great advance in English freedom, because it substituted for an illusory and fallacious remedy one that is practical and can be easily applied. Similarly there is a remedy available to the Commonwealth to-day for the recovery of debts from the States; but the Attorney-General (Mr. Latham), whose personal opinion is based upon his knowledge of the papers which accumulated during the effort - no doubt, a perfectly sincere and energetic effort - on the part of the Leader of the Opposition (Mr. Scullin) when in office last year, has come to the conclusion that that procedure is unsatisfactory, and to some extent illusory. Therefore he proposes other remedies, remedies which he believes - and I share that belief - will be swifter, more certain, and more satisfactory. I regret to have taken up time in pointing out this distinction between the two portions of the bill, which has been mentioned by the honorable member for Darting Downs’ (Sir Littleton Groom) and other speakers. But I feel that the importance of distinguishing between the two objects aimed at has not been borne in mind by all honorable members, and as I propose to review briefly the objections which have been made to both portions, it is essential that it should be made clear that one portion aims at one result, and the other at another.

The Leader of the Opposition, in his most weighty volume of criticism against the first portion of the bill - criticism to which I listened with the utmost attention, and have given full consideration - said this: “Is it necessary or advisable that the Commonwealth should at this stage assume liability for State debts abroad ; and secondly, i3 it permissible to do so under the grant of power added to the Constitution by section 105a, which was carried by the people some two or three years ago.” Then passing to the second portion of the bill, the provisions for obtaining redress, the Leader of the Opposition put two questions of the utmost importance: (1) Are those provisions actually unjust in any way - a most important consideration, and (2) can those provisions be made to appear unjust by interested parties. The Leader of the Opposition says-and I am entirely with him - that both of those possibilities are to be avoided with most scrupulous care. We must avoid, not only what is actually unjust, but also anything likely to instil into the minds of a State the fear or doubt that this Parliament is legislating to injure its rights. On that the majority of honorable members will be at one with the Leader of the Opposition. By way of illustrating his points, he asked, “Are we not making ourselves accuser and judge in our own cause?”, and he strongly deprecated that that should be done or should appear to be done. We are all in agreement with him there. He doubts whether the new scheme will provide a better remedy than we have to-day under the ordinary procedure of the High Court. The right honorable member for Cowper (Dr. Earle Page) followed that line of criticism with observations which must have struck every honorable member as being most important. Let me briefly review his criticism. He said that the bill attacks the indivi- dual citizen in this country, and puts him in a position of great discomfort, and, possibly, loss, because of the misconduct of a person who happens for the moment to be the Premier of New South Wales, whom that individual may have taken no hand in putting into the position he occupies. The right honorable member says that there is the possibility of a ‘period of chaos. He thinks, too, that we should - ultimately at all events - apply also to the Commonwealth the precautions that we are applying here regarding a State headed by a dishonest Government, or one unscrupulous in respect of its obligations, because of the possibility of the Commonwealth being similarly governed in years to come. That is an extremely profound suggestion, yet if it were acted upon, it might lead to delays and difficulties in legislation which would defeat the object which the honorable member equally with members on this side of the House desires to attain. Finally, taking these important objections in their order, the honorable member for Darling Downs pointed out yesterday that the notice to be given to a State before the new remedy can be enforced may be absurdly insufficient, and he mentioned the possibility of the Government of Western Australia being summoned to defend itself on three days’ notice. With each of those objections, in turn, I propose now to deal briefly.

The Leader of the Opposition asked, “ Is it wise or desirable to accept liability for the States in regard to foreign bondholders? On that point I am in some difficulty. When the right honorable member found himself confronted by a similar problem some six or seven months ago he obtained, as he has told us, the advice of counsel of standing, both in Melbourne and Sydney. As a legal man, I am at considerable disadvantage in not having seen the opinion given in respect of the points that were submitted, otherwise I should not have thought that there was any real doubt whether foreign bondholders had any remedy against the Commonwealth on a State bond. I understand that the advice that the right honorable member obtained was to the effect that there was a remedy against the Commonwealth.

Mr Scullin:

– The strength of the information given to me was that the Commonwealth was liable to the States - not to the defaulting State - to meet the liability of a defaulting State.

Mr HOLMAN:

– I am indebted to the right honorable member. I was under a misunderstanding, which arose in the course of the debate. I am entirely at one with the counsel whom the right honorable member consulted. The language of the agreement is not always perfectly clear. It is a lengthy and complex document. The bulk of it is perfectly lucid and intelligible, but certain passages in it are ambiguous. I do not commend that which I am about to read as one of the best drawn in the agreement, but, notwithstanding, it has, I submit, a clear meaning. This is portion of Part III. of the agreement. It appears on page 104 of Sir Edward Mitchell’s book, and reads -

Subject to the provisions of this part of this agreement the Commonwealth will take over on the 1st July, 1929 -

the balance then unpaid of the gross public debt of each State existing on the 30th June, 1927; and

all other debts of each State existing on the 1st July, 1929, for moneys borrowed by that State which by this agreement are deemed to be moneys . borrowed by the Commonwealth for and on behalf of that State-

Then appear these words - and will in respect of the debts so taken over, assume as between the Commonwealth and the States the liabilities of the States to bondholders.

What that precisely means is a little difficult for a lawyer or layman to answer at the first reading, but the phrase “ as between the Commonwealth and the States “ was not inserted for nothing. Let me read the passage without that phrase - and will in respect of the debts so taken over assume the liabilities of the States to bondholders.

That might be taken as an assumption of liabilities to the bondholders. Reading the passage as it appears in the agreement greatly strengthens the view that there is a liability on our part to the States, and a liability on their part to us ; but the contract is wholly between the

States and the Commonwealth, and it is an elementary proposition in law that a stranger to a contract cannot sue on it. Even though a contract is made wholly for the benefit of a third person, that person cannot enforce it. If I wish to send some books to a man in the country, and pay money to a bookseller who fails to send them, the man in the country cannot sue the bookseller, although the contract was made entirely for his benefit. The only person who can sue in that case is myself. Therefore, an agreement between the Commonwealth and the States would not, according to the ordinary principles of law, allow a third person, a bondholder in Great Britain or Europe to sue upon it, even though everybody- knows that the agreement was really made for his advantage. I confess that because of my misunderstanding of the right honorable gentleman’s observation, I thought his mind was not clear on that pont. But there being no real doubt in his mind regarding it. it is clear that the Commonwealth of Australia could take no better step with the object of restoring confidence in the eyes of the world, which has been shaken by recent unfortunate happenings, than to pass this law and announce widely in London, New York, Paris, and other financial centres, that whatever may be the actual language of the agreement the Commonwealth is now, by act of the Parliament, accepting full liability to the bondholders of Australia. That’ is what this Government is doing. In these circumstances the main difficulty raised by the Leader of the Opposition in this connexion disappears.

It may be asked whether the first portion of the bill is a valid exercise of the legislative powers of this Parliament. I submit with great respect that it must be. The Commonwealth Government, if it so chooses, could take liability for any matter, for it has full control of the finances of the country. “We are meeting here as the representatives of the people, and we shall not spend the people’s money without good cause. The power to make arrangements with foreign countries carries with it the power to accept any liabilities which, in the opinion of the Government of the day, and of this Par- liament, it is considered desirable to take in order to improve or complete our friendly relations with other countries.

Mr Scullin:

– Could we pass legislation reducing our liability under- the agreement ?

Mr HOLMAN:

– That interjection raises a difficulty which was referred to by the Attorney-General. It would probably be held in the courts that contracts made by our agent3 in London are subject to English law. I think the Australian courts would hold that that principle of international law would apply as the basis of the contract. In my opinion, there is no real doubt that we can accept responsibility for any financial obligation which Parliament thinks it proper to accept. I have already dealt with the wisdom of doing this, and have suggested that such action would go far to restore confidence in Australia which has been shaken. I have no doubt about either our power to do this, or the wisdom of our doing it. I consider that the passing of this bill would be an eminently desirable step forward, and that it is well within the power of this Parliament to pass it. With these observations, I dismiss all the questions relating to the first portion of the measure.

I turn now to what honorable members clearly recognize as a much more disputable question, the fitness and the legal possibilities of the second portion ©f the bill, that is the provisions from Part III. to the end of the bill. The general legislative power of this Parliament is defined by section 51 of the Constitution, but very special power defined by section 105a was recently granted to the Commonwealth by referendum. The justification for the introduction of this measure, I frankly admit, must be found in section 105a or nowhere. There is no other provision in the Constitution which would justify the introduction of a bill of this kind. I submit to honorable members that so far as one can be certain about the true meaning of a grant of power to Parliament by the people, we may be certain that that grant at least covers this bill. It covers very much more than this bill, of course, for this measure is only a minimum exercise of the power granted by that section. Honorable members will be perfectly safe, in my opinion, in casting out of their minds any idea that we would exceed our power if we passed this bill. But after all, every new grant of power has to be brought to the test sooner or later. There is the highest British judicial authority for the proposition that when new power is given to a government it is the duty of the Government to exert it and, if necessary, to obtain from the courts a Judicial interpretation of the extent of it. I do not wish to mislead honorable members by suggesting that our case is quite analogous with that of Great Britain, because Great Britain has no written constitution. The declaration to which I have referred was made in the House of Lords in a very important case, and had application to an executive government acting for the first time under the authority of a new act of parliament. In such circumstances, it was declared to be the duty of the executive government to use the power and to test it. If the Government exceeded its power the court would say so, and determine the true limits of the power. In our case, it is the Parliament which first finds itself in that position. It is the duty of the Executive to bring a bill to Parliament. After the bill has been passed the measure may be brought before the court for consideration. The decision of the court in our case would determine either of two things. It might be to the effect that the act of parliament itself was not warranted by the grant of power, or that the action taken by the Executive under the act of parliament was not warranted by the act. Only one of those situations could arise in Great Britain owing to its different constitution. If it is the duty of the Executive of Great Britain to act - and we have the highest warrant for that statement - it is doubly the duty of the Australian Executive to act, because if the grant of power is not sufficient to do what is sought to be done, the people may always be approached by way of referendum for an extension of power. In my opinion, it is the duty of the Executive to introduce legislation to enable it to exert its power. When such measures become operative, any person or authority which conceives that he has been injured may approach the High Court. In that way we obtain full and exact knowledge of the law.

The clauses of this bill which set out this power have been repeatedly read by honorable members. I shall, therefore, merely refer to one or two points that have been raised. I think it was the Leader of the Opposition who said that although there was no doubt power to make laws for the carrying out of the Financial Agreement, there was doubt whether the Auditor-General could be brought into the matter. The right honorable gentleman observed that the Financial Agreement made no reference to the Auditor-General. That objection is, at first sight, a little staggering; but it will be seen on consideration that the position is met by sub-section xxxix of section 51 of the Constitution which provides that -

Parliament shall, subject to this Constitution, have power to make laws foi’ the peace, order, and good government of the Commonwealth with respect to:

Matters incidental tn the execution of any power vested in this Constitution in the Parliament or in either House thereof or in the government of the Commonwealth . . .

We may assume, therefore, for the purposes of this argument, that there is no doubt that power is vested in Parliament not only to deal with the matters contained in the agreement which has been ratified by the States - this is covered by paragraph xxxviii - but also under paragraph xxxix, with any matters incidental to the execution of the power given in paragraph xxxviii. Let me illustrate the matter in this way. If I enter into a contract to buy 10 yards of cloth from a man, I am not introducing a new element into the contract if I take with me a tape measure or a yard stick to measure the cloth before I accept delivery of it. The measuring of the cloth is a matter incidental to the contract. If I employ a man to work eight hours for me, I am not introducing a new element into the contract if I install a Bundy clock, and require him to punch it. In either case I am merely taking steps to assure myself of the actual performance of the contract. I submit, therefore, that we are entitled, under the provisions to which I have referred, to make laws for the carrying out of the Financial Agreement, and also to make laws covering matters incidental thereto. In this case we need to know the extent of the default, aud for that purpose we are entitled to call upon the AuditorGeneral and his staff to act as a kind of measuring stick.

Mr Scullin:

– I did not raise the point to which the honorable member is referring. My objection was that the declaration of the Auditor-General was to be accepted as prima facie evidence.

Mr HOLMAN:

– I shall come to that point later. I am now dealing with the validity of this provision. My submission is that the Financial Agreement is one which this Parliament was entitled to validate, and that the Parliament is also empowered under the provisions of the Constitution to make laws for the carrying out of the agreement, and any matters incidental thereto. It is, therefore, competent for the Government to call upon the Auditor-General, or any other authority, to assist it to determine, by a convenient and reasonable method, the exact position of the parties. This power is expressly given in sub-section xxxix of section 51. Portia’s pronouncement in The Merchant of Venice, that Shylock, though entitled to his pound of flesh, could take no blood, was not, and never has been, good law. The creditor entitled to a pound of flesh is entitled to that which makes up or is incidental to the forfeit. The contention put forward in The Merchant of Venice was merely a specious argument intended to mislead an ignorant court. Whenever power is given to make laws power is also given to do things incidental thereto.

I now refer honorable members to the paragraphs c and e of this comprehensive but cumbersome agreement. These read as follows: -

1. Each State shall in each year during the same period of 08 years pay to the Commonwealth the excess over the amounts to be provided by the Commonwealth under the last preceding sub-clause necessary to make up as they fall due the interest charges falling due in that year on the public debt of that State taken over by the Commonwealth as aforesaid and then unpaid, and on any moneys borrowed by the Commonwealth on behalf of that State and then unpaid, and after the expiration of the said period each State shall in each year pay to the Commonwealth, as they fall due, the whole of the interest charges on any debt then unpaid and included in the public debt of that State taken over by the Commonwealth as aforesaid, and on any moneys borrowed by the Commonwealth on behalf of that State and then unpaid.
2. The rate of interest payable under subclause (c) of this clause in respect of moneys borrowed by the Commonwealth on behalf of a State shall be the full rate of interest payable by the Commonwealth in respect of the loan by which such moneys were borrowed or such other rate of interest as may bc payable by the State to the Commonwealth under any agreement made or to be made between the Commonwealth and that State in respect of such moneys and such interest shall bc payable by the State for the full term of that loan.

The two duties cast on the States by the terms of the agreement are mandatory; the States shall pay the principal and the interest. I call particular attention to that language. That agreement is now made law, and under the grant of power to which I have already referred every such agreement, after validation - and this agreement has been validated by an act - and any variation thereof, variations being only possible with the consent of all the seven parties unanimously -

Shall be binding ‘upon the Commonwealth aud the States parties thereto, notwithstanding anything contained in this Constitution or the Constitution of the several States, or in any law of thu Parliament of the Commonwealth or of any State.

The agreement once validated is binding upon us, notwithstanding anything that we may find in the Commonwealth Constitution or in any Commonwealth law. We need not trouble about State constitutions aud State laws. That principle has been adopted by the people, and i3 now embodied in section 105a of the Constitution. I submit that the agreement is unalterable; it compels the States to pay, as provided in the two paragraphs that I have read. A law passed by -this House facilitating the obtaining of payment where a State is reluctant to pay, must be within the terms of that grant of power.

Mr Scullin:

– And within the terms of the agreement.

Mr HOLMAN:

– -If it is within the terms of the agreement it is within the grant of power. Until the High Court has decided the question, mere practitioners’ can only express their opinion on it; but it appears to me that that portion of the grant of power which makes an agreement binding upon this Parliament, notwithstanding anything to the contrary in the Constitution, or in any Commonwealth law, lifts the agreement to the level of the Constitution. We cannot, legislate to alter it; it can. be altered only by the seven States acting in unanimity. Whatever legislation we pass must be legislation in accordance with the agreement. If this bill is in accordance with the agreement, and facilitates the recovery of moneys which are lawfully due under the agreement from one party to another, it is, on that ground, a law within the power of this Parliament to pass.

The grant of power contains several sub-sections only, one of which has frequently been referred to in the course of the debate. I am far from suggesting that I have interpreted everything the other one means. In my judgment, it gives the same right to pass this legislation, and is as authoritative as the more frequently quoted subsection of the grant of power. My right honorable friend had other hesitations. He thought that in this case there might be some actual invasion of State rights, or some appearance of invasion which he was anxious to avoid. The point is that this power has been given by the people of the States, and it has been given in these extraordinary terms. Nothing could be more sweeping than the passage that I have just read. All laws made in pursuance of that grant are valid laws of the Commonwealth. Honorable members will recall that under section 5 of the covering act all laws made by the Parliament of the Commonwealth are binding on the courts, judges and people of every State. Turning to section 10’) we find that when a law of a State is inconsistent with a law of the’ Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid. That of course relates to a valid law, and I submit to honorable members the present bill is such a law.

Now let me take in brief detail the plan of procedure provided for. The certificate of the Commonwealth AuditorGeneral is made prima, facie evidence of the existence of a State’s liability. I beg honorable members who are not lawyers not to imagine that this certificate will be conclusive evidence ; it will be open to any State that disputes its contents to bring any evidence it likes to the contrary.

Mr Scullin:

– But the onus of disproof is put on the defendant.

Mr HOLMAN:

– To a certain extent, yes. That is a frequent incidence of Commonwealth legislation, the Customs Acts for example. “ Suppose we furnish the High Court with the certificate of our Auditor-General to the effect that New South Wales is in default to the extent of, say, £1,000,000. It is then perfectly open to the Premier or Treasurer of New South Wales to say, “We owe nothing of the kind. The Commonwealth owes us money. We have counter claims, and the balance is in our favour “.

Mr Maxwell:

– And the material facts are in the possession of the State Government.

Mr HOLMAN:

– Yes. That is why the onus is put upon it. If the State Treasurer is not given sufficient notice - this point was raised by the honorable member for Darling Downs (Sir Littleton Groom) - injustice will be done; but the High Court would not let the case proceed, supported only by prima facie evidence, in the absence of the defendant because of insufficient notice. The right honorable member fears an attack on the validity of the act on the part of the defence; so do I. But he has an exaggerated idea of the length of time for which proceedings testing the validity of a statute can be drawn out. Such proceedings are usually brief. There would be no appeal to the Privy Council, without the certificate of the High Court that an appeal was desirable, and I do not think that the High Court would dream of granting such a certificate in a case of this kind.

Mr Beasley:

– Why does the honorable member say that?

Mr HOLMAN:

– I speak as a lawyer, on a subject concerning my own profession. The High Court does not usually give such certificates in these cases, though I admit that it is conceivable that it might. I do not think there is any doubt that this is one of those cases which comes within section 74, under which there is no appeal to the Privy Council unless the certificate of the High Court is given. [Leave to continue given.] I am grateful to honorable members for their courtesy, and will not abuse it. I realize that these matters have carried me a little further than I anticipated, hut I have almost completed what I wish to say. I pass over the question of possible delays in the litigation. Having obtained the declaration from the High Court, I imagine that the Government would, in most cases, when fortified and guided by the resolutions of this House and the Senate, specify some plentiful fund, such as the income tax, as a fund for attachment. The income tax, so far as one can forecast the results of an experiment of this character, which is unprecedented in its nature, would afford a peculiarly convenient field. State income tax is collected-by the same officers as collect the Commonwealth income tax, and all that would be necessary would be to ask them to place to the credit of the Commonwealth what was received on account of the State. The individual citizen would not even have to change his habits. He would send his tax to the same office as before, and the money would be received by the same officers; but it would be diverted to another and more wholesome destination.

Mr Scullin:

– It sounds very simple.

Mr HOLMAN:

– The right honorable gentleman and I have both had experience of collecting income tax; it is one of the simplest things ^^statesmanship.

In my judgment, clause 6 should be deleted from the bill. When the honorable the Attorney-General was addressing us, he spoke of the necessity of proceeding by an appeal to the judicial power of the Commonwealth. He also said that, although he had prepared two alternative methods of procedure, they both involved an appeal to the judicial power. Yet when we read the provisions pf clause 6 we find that, owing apparently to some misunderstanding between the AttorneyGeneral and the draftsman, what he spoke of in his explanatory opening speech has not been done. In regard to the alternative procedure, which goes forward on a resolution of the two Houses without any approach to the High Court in the first instance, sub-clause 3 of clause 6 says -

Nothing contained in or done in pursuance of this section shall prevent or affect the making of an application under the last preceding section.

On referring to the last preceding section, we find that it provides for an application by the Attorney-General on behalf of the Commonwealth. There is apparently no provision in the bill for the defendant State to make an application to the High Court. I have no doubt that that is an inadvertence, due to failure on the part of the draftsman to give effect to the principles which the Attorney-General explained to us with great clearness and candour. We now no longer have the benefit of his counsels. It is difficult, merely by reading the bill, to suggest emendations which would restore its provisions to what the Attorney-General originally proposed, and I would urge upon the Government at this stage that the alternative procedure originally suggested might be eliminated from the bill altogether.

Mr BRUCE:
FLINDERS, VICTORIA · NAT; UAP from 1931

– In my speech I stated that the Government was prepared to make it mandatory for the Commonwealth to apply for a declaration within a reasonable period.

Mr Scullin:

– But the vital question is whether the Commonwealth is to seize the revenues of the State before it ap:proaches the High Court.

Mr HOLMAN:

– I am afraid that it proposes to do that. The amendment indicated by the right honorable member for Flinders would certainly make the clause valid ; at present it is not valid, because section 71 of the Constitution clearly lodges the judicial power in the High Court and certain other courts. In its present form clause 6 is taking the judicial power into the hands of this Parliament. A judicial power is difficult to define, but honorable members will agree that any person or authority who says that A shall give to B something to which B is entitled is exercising judicial power. That is in effect what clause 6 proposes, and, therefore, it would not be a valid enactment of this Parliament. Although the amendment which the Assistant Treasurer now suggests would remove the invalidity, the clause might still be unwise. The fuller consideration we have been able to give to the bill since the AttorneyGeneral explained it must have convinced many of us that clause 6 will be widely misunderstood and even more widely misrepresented. Even if there is to be an ultimate appeal to the High Court, I cannot conceive of conditions of emergency arising which would justify thi3 Parliament iu apparently departing from the general fairness of the scheme contained in the bill. The time lost in the action before the High Court would be brief; perhaps a fortnight would be occupied in argument, and the court might take a further week to consider its judgment, but almost certainly a judicial interpretation of the measure would be given within a month. As drafted, clause 6 is a danger, and should be eliminated. If amended as the Assistant Treasurer has suggested it would not, perhaps, be a danger to the validity of the bill, but it would give rise to much difference of opinion and opposition, and would thwart the desire of supporters of the bill to show to the world that it is backed by a large body of public opinion as can possibly be obtained. Clause 6 is not perfect. It is not what was intended by the author of the measure, and it is difficult of amendment in the manner he would have chosen if he were present. It permits direct parliamentary action against the revenues of another government - for some days at any rate. On that ground it will be criticized ; its purpose and meaning will be distorted; and thus a weapon will be given to those who are concerned to show that this Parliament has acted with unfairness and tyranny in dealing with States that are in financial difficulties.

Clause 14 also should be eliminated, and my criticism of it, as of clause 6, is based on two grounds. First, I strongly fear that iu its present form it is invalid secondly, even if it be valid, I urge the Government not to insist upon it. It reads -

Without prejudice to, the foregoing provisions of this net, if ut ti ti y time during the currency of any proclamation relating to any State, any moneys come into the possession or control of the Commonwealth in pursuance or by virture of the Financial Agreements, or of any decision of the Loan Council, for aud on behalf of that State, or for the purpose of payment to that State, or to which that State lias any claim under those agreements, those moneys shall be charged with the due performance by that State of its obligations under those agreements, and may be applied in discharge of any liabilities of that State which have accrued under those agreements.

I have already spoken of the extraordinary sanctity to which this agreement is raised by section 105a of the Constitution. Part l, clause 3 n of the agreement, reads -

A decision of the Loan Council in respect of a matter which the Loan Council is by this agreement empowered to decide shall be final and binding on all parties to this agreement.

The parties to it include the Commonwealth. When we examine the matters which the Loan Council is empowered to decide, we find that where an amount borrowed in any given year is not sufficient to meet the programmes presented by the Australian Governments, the Loan Council may allocate the amount available to the Commonwealth and States. Having allocated portion of a loan to a given State, that allocation is binding on all parties to the agreement. For the reasons I have already submitted to the House, that portion of the agreement cannot be altered by our legislation. If this bill conflicts with that provision it is to that extent invalid. Clause 14 purports to do that. Moneys have been raised and allocated by the Loan Council, but clause 14 purports to say that although the council has allocated, say, £1,000,000, to a defaulting State, which allocation is final and binding on all parties, this Parliament may impound that amount. Clearly, in those circumstances, this legislation would conflict with the decision of the Loan Council, and I believe that the High Court would hold that this Parliament would have to give way. By this dangerous provision the prestige of the Government and this Parliament may be hopelessly damaged. Again, I urge on the Government that this clause might, without loss of full power to handle the situation, be eliminated. Further, I feel that by taking from the people of a State loan moneys duly allocated to them, we shall be doing one of those injuries which the Assistant Treasurer (Mr. Bruce) has declared himself anxious to avoid. To date, the Government of New South Wales has invested about £9,000,000 in the North Shore Bridge. That capital is dead; it can earn no revenue until the work has been completed. The State borrows, say, a further £1,000,000 to complete the structure and convert the dead capital into live capital. That £1,000,000 should not be subject to arrest on its way into the hands of the New South Wales Government. The right honorable member for Flinders (Mr. Bruce) declared that the citizens of the State should not be penalized because of errors and default on the part of politicians in power for the time being, and in consonance with that sentiment I urge him not to retain this clause 14. It is not necessary. The bill without it confers ample power upon the Commonwealth. The proper source to which to apply for payment of State debts is the State revenue, not its loan funds. Interest debts are not paid out of loan. In private life we do not rob Peter to pay Paul.

Mr Beasley:

– Interest debts have been paid out of loan.

Mr HOLMAN:

– That practice should he discouraged, and not elevated into a principle by this bill.

Mr SPEAKER:

– The extension of time granted to the honorable member has expired.

Mr HOLMAN:

– For the reasons I have stated 1” shall support the bill, and I hope that the Government will agree to the alterations I’ have suggested.

Mr THOMPSON:
New England

– Amongst the issues that have emerged during this interesting debate, the sovereign rights of the Commonwealth and States respectively stand out like the Rock of Gibraltar. The Leader of the Opposition (Mr. Scullin) stated definitely that the bill was an attack upon the sovereign rights of the States. If it. does no more than bring the vexed problem of sovereignty nearer solution it will have fully justified itself, and will eventually bring about a new state of affairs in Australian politics. For some years the extent, of the sovereignty of the Commonwealth and the States respectively has been an issue of ever-increasing importance. The first attempt to give constitutional sanction to the extending grip of the Commonwealth tentacles on the finances of the State was made by the right honorable member for Cowper (Dr. Earle Page) when he was instrumental iu submitting to the people by referendum in 1928 a proposal to give lo the Commonwealth power to make agreements with the States. The referendum was carried by a majority of the people in all the States, and this Parlia ment was enabled to express in legislation the status of the Commonwealth in regard to the finances of the States. A subsequent result was the passage of the Financial Agreement Act, which has given rise to the existing trouble between the Commonwealth and New South Wales and to rumours of trouble between the Commonwealth and other States. We thought, that the carrying of the referendum and the incorporation of clause 105 a in the Constitution, which purported to give the Commonwealth power to enforce any agreement with the States, closed the last loophole; we had a comfortable feeling that this Parliament would be able to cope with any financial situation that might develop. But at our first attempt to exercise the constitutional power to enforce the Financial Agreement between the Commonwealth and the States, hosts of new problems spring from the ground like the fabled harvest from the dragon’s teeth, and we are at once in a maze of constitutional doubt. The Leader of the Opposition placed his finger on the vital point, when he said that this legislation will determine whether the sovereignty of the Commonwealth Parliament in regard to financial affairs is greater than that of the State Parliaments.. This bill is the first attempt which has been made to act under the constitutional authority embodied in section 105a. It is the first attempt, to determine whether we have the power which we believe was conferred upon us by the people in 192S. Whatever legal arguments may be put forward - and very useful ones have been advanced by the honorable member for Martin (Mr. Holman) and others - they do not vitally affect the issue to be decided as the result of this legislation, namely, whether the’ Commonwealth Parliament, having secured constitutional authority from the people in general terms, is legally able to carry out what were undoubtedly the wishes of the people; whether such power is lacking because sufficiently definite language was not used in the constitutional amendment to which the people agreed. The Government has introduced a bill which sets up certain machinery under the general provisions of section 105a of the Constitution. We have been told that only the High Court can determine whether or not we really have the power which is claimed in this bill. If that is so, it is clear that the paramountcy of Commonwealth control in Australia is not yet settled, and we have still a great constitutional battle impending. This bill, we are told, will involve enormous legal complications. The matter will have to be determined by the High Court, and this proves that the people, through their elected representatives, really do not govern the country, but that, in the last analysis, power rests with the High Court, which is but. a creature of the Constitution. Let us put the matter to the test, then, and I believe that the best way of doing so is to proceed as the Government is doing: Bring down a bill which definitely accepts the challenge of the Government of New South Wales on this issue of Commonwealth versus State sovereignty. Commonwealth sovereignty has been definitely attacked by the default of one State which was a party to the Financial Agreement. [Quorum formed.’] We thought that, under the Financial Agreement Act, we had power to deal with any defaulting State. We find now, however, that we have not. By its default, the Government of New South Wales has thrown upon the Commonwealth Parliament the onus of finding certain sums of money, and we have to determine whether or not it has power to recover that money from the defaulting State. I commend the Commonwealth Government for getting about the job without undue delay.

There is another aspect of the matter to be considered. If it is proved that we have power to deal with a defaulting State in any way we consider suitable to ourselves, what becomes of the position of the other States, which may, at some time in the future, decide to default, either willingly or unwillingly? If we have power to deal with New South Wales, which has defaulted as a challenge to the Commonwealth authority, we must possess the same power in respect to the other States. If we have power to garnishee the revenue of New South Wales, to seize the child endowment fund, unemployment relief and income tax, we possess the same power in regard to the other States. There can be no doubt, then, that the sovereign powers of the

States from now on have definitely disappeared, and such power rests only with the Commonwealth.

Mr Paterson:

– We shall have power to take something which is owing to us-

Mr THOMPSON:

– That is not the point. If we really are to possess the” power to seize the revenues of States: which default, the question is settled onceand for all which is supreme, the Commonwealth or the States. We are frequently told that finance is government, and government is finance. That, in a large measure, is true, so that if we are to possess the power assumed in this bill the Commonwealth Parliament becomes the only sovereign governing authority, and the State Parliaments become merely minor, subsidiary and non-sovereign authorities.

This is an issue of such tremendous importance, not only to the present generation, but to future generations of Australians, that we should not treat it lightly. We should not allow ourselves to be side-tracked by the petty-fogging issues raised by members of the Lang group, and should not be unduly impressed by some of the points raised by the lawyers. We are dealing with a measure which may have a most profound effect on the governments of Australia for all time. A great responsibility is thrown on honorable members, and they should try to divest themselves, as far as possible, of party prejudices. They should not allow their passions to bc aroused by catch cries to the effect that this measure is the culmination of a vendetta against the Government of New South Wales; that it is a conspiracy to take the bread out of the mouths of the women and children of that State; or that it is a piece of petty, political spite indulged in by the right honorable member for Flinders (Mr. Bruce) against the Premier of New South Wales. Charges of that sort may be entertaining enough for a Sydney mob, but they should not be allowed to influence the judgment of the elected representatives of the people. The statement of the honorable member for East Sydney (Mr. Ward) that the Commonwealth Government is pursuing a vendetta against the people of New South Wales is utter nonsense. Even if it were true, it would not affect the matter one way or the other, but it is not true. I do not for a moment believe that the Government has any idea of persecuting New South “Wales, or the members of its Government. It has to determine, once and for all, whether the constitutional power claimed by this Parliament as resting in it through the 1928 amendment of the Constitution, really belongs to it or not. The Government has to determine whether this Parliament has power to establish some form of equity between the Commonwealth and the various States in regard to our public indebtedness. New South Wales has made a policy of default. Instead of giving any logical or rational explanation of its action, the Government of New South Wales seeks to fog the issue by raising a number of catch cries which members of the Lang group have brought into this Parliament. They say that they will not pay the money lenders, or the “Shylocks”, as they call them, until they have fed the people. In the end, of course, this merely means that they do not want to pay the people from whom they borrowed money, people at whose expense the workers of New South Wales have, for over a generation, been having a glorious time. For many years, thousands of workers were able to obtain high wages and live well at the expense of the “ Shylocks “ from whom the Government borrowed money. The very first time that an economic situation arose which made it difficult for the so-called statesmanship of New South Wales to evolve schemes to meet the situation, and still find food or work for the people, the members of that Government revealed that they had not sufficient brains to make even a serious attempt. They simply rushed down the first lane they saw, and, as the easiest thing to do, decided to “scale” those who had lent the Government money.

The Commonwealth has now become involved in the matter, and has to assume responsibility for the debts which New South Wales refuses to pay. People, both at home and abroad, look to the Commonwealth to meet this obligation, in regard to both principal and interest. The Government of New South Wales has defaulted again and again. It no longer seeks to excuse itself for its action, but has exalted default to be a matter of policy. That is the Lang plan. It does not even say that the default is temporary. So long as it is difficult or inconvenient for the Government of New South Wales to carry on its ordinary administrative functions - for this cry about feeding women and children is so much nonsense - it will not make any attempt to meet its liabilities to those from whom it borrowed money. The Commonwealth Government cannot go on finding money indefinitely for a defaulting State. The time has come when we must take measures to reimburse ourselves. An attempt is being made under the provisions of the Constitution to put into plain language a proposal to force this recalcitrant State to meet its obligations. Then we find that certain representatives of that State, inside and outside of this House, are threatening the Commonwealth. They say that they regard the introduction of this legislation as political tactics. They do not consider the constitutional issue at all. They threaten that if we attempt to pass this legislation they will assert their rights, and forcibly resist us. There is no doubt that that threat has been contained in the speeches of honorable members who represent the Lang Group in this chamber. They state that if the Commonwealth Parliament dares to stand up for its own rights in accordance with the wishes of the people of Australia, then New South Wales will set an example to the rest of the States for all time, by using its powers to resist the Commonwealth - powers embodied in the police force, or the power of their political supporters, otherwise the mob. If it is good enough for one State to defy the Commonwealth on a serious constitutional issue, it will be good enough for other States to do so. Such an action must affect the responsibility of the Commonwealth for the credit of Australia. It is a form of coercion designed to prevent the Commonwealth from exercising its legitimate constitutional powers. This issue is so important that the sooner it is determined in this House the better. I assure the Government that the majority of the members of the Country party are solidly behind it.

Mr MARTENS:

– That party always is behind the Government.

Mr THOMPSON:

– I regret that the honorable member for Herbert (Mr.

Martens) is adopting a petty and parochial attitude. I am satisfied from his interjection that it will not he long before the gap between him and the members of the Lang Group will be bridged. There is a big majority in this Parliament in favour of having this issue determined, but it will not be determined merely by the passing of this legislation. In the first place, the issue has to be determined by the High Court, and then by the people of the States. The people of New South Wales, particularly, will soon enlighten us as to their views if any attempt is made by the Commonwealth to garnishee the revenues of that State, or to put a receiver in the State offices. We are told that the men in charge of the Government of New South Wales are so confident of their position that they ave prepared, if the necessity arises, to use force against the Commonwealth Government. The people of New South Wales who elected the members of my party to this House, are totally opposed to the Lang plan and the policy of default that is being pursued by the Government of that State. Therefore, they are likely to oppose any step that may be taken by that State to resist any attempt by the Common wealth to exert its constitutional authority. Unlike the members of the Lang Group in this chamber, I cannot speak for all the people of New South Wales. The honorable member for East Sydney (Mr. Ward) was returned to this House with a majority of 170 votes, yet he has the audacity to stand up and say that he is speaking for the people of New South Wales. If 70 or SO of his supporters had voted differently, he would not be here to speak on behalf of anybody. The honorable member for West Sydney (Mr. Beasley) also claims to speak for New South Wales, and I have no doubt that the rest of the members of the party take the same stand. I say, emphatically, that the vast majority of the people of New South Wales are not behind the Government of New South Wales. If the supporters of Mr. Lang are so confident of their position as to threaten resistance to any attempt on the part of the Commonwealth to exercise its constitutional powers, they should be prepared to put their case to the people. All they have to do is to say “We are being attacked; the Commonwealth Government is prepared to garnishee our revenues, and if it does we shall have to levy heavier taxation; it is out to take the food from the mouths of the starving women and children of New South Wales “. Surely they could thus create the feeling of mob psychology which has determined so many previous elections. I suggest that if the members of the Lang Government appeal to the country they will go out of office with a noise that will resound throughout the length and breadth of the world, and that will be the end of the Lang plan in Australia for all time. The Premier of New South Wales has betrayed the people of that State. He has .done everything that he said he would not do, and many things that he did not say he would do. He has carried out none of his promises to the Premiers in conference, -and has, therefore, deceived and tricked the people of New South Wales. They are waiting for him and will get him sooner or later. His day must end. The people are not behind Mr. Lang in his policy of default, and in dragging the name of New South Wales into the gutter. No other politician has done so much harm to an Australian State. He has reduced the credit and the prestige of New South Wales even lower than that of a third-rate South American Republic. It will be years before an honest government in New South Wales - which must take office sooner or later - will be able to live down this stigma on our reputation as a British community. That is what the great Lang plan has done for New South Wales and for Australia. The vast majority of the people of New South Wales are not behind the Lang plan. They have already had several opportunities to make known their attitude. The first opportunity arose at the local government elections, when practically all the Lang candidates, even in the industrial areas, were at the bottom of the poll. In some instances they received fewer votes than the Communists.

Mr Gander:

– That is due to the franchise.

Mr THOMPSON:

– In the rural areas of New South Wales the principle of “one man one vote” applies. The record of the -Lang candidates at that election was truly appalling. On the figures of the recent Federal election 26 members of the State legislature of New South Wales would have lost their seats, reducing the number of the present party in power to about 20.

Mr Maxwell:

– What will the members of the Lang group in this chamber do when there is no Lang Government in power ?

Mr THOMPSON:

– The Lang supporters in this House say that in common humanity the first duty of the Government is to feed its people, and they contend that the Commonwealth Government is proposing to take the bread out of the mouths of starving women and .children. I have lived in New South Wales all my life, and never to my knowledge have people starved there. It has always been one of the first obligations of a State government to feed the .people, and as a matter of fact in New South Wales the commitments and taxation for social relief, such as the provision of food and endowment, and for charitable works of every description, are higher than in any other State, higher perhaps than in any other part of the world. The people of New South Wales have always been heavily taxed to provide for the poor and destitute, and I challenge the members of the Lang group to show one instance in which a person in that State has starved to death. The honorable member for East Sydney (Mr. Ward) has said that the Lang Government is sheltering the people. It is doing nothing of the kind. Many of the unemployed and destitute in New South Wales are living in the Domain, and have done so for many years. It is the obligation of a government to provide, not shelter, but food, and that obligation has been met by every government in Australia. The Lang Government has done no more for the poor and homeless than has any other government. As a matter of fact, that issue is small compared with the issues involved in this bill. In New South Wales there are only about 100,000 people unemployed out of a population of 2,500,000 employable people. The hardship among those who are receiving the dole and endowments in New South Wales is not nearly so great as it is among farmers, business people on the edge of bankruptcy, and many professional and other classes of workers who have to pay an unemployment tax of ls. in the £1, and are threatened with an additional tax of ls. The taxpayers generally are so poor that in many instances they have to beg the State Government almost on their, hand and knees for time in which to pay a few paltry pounds. The position of the people on the dole is comparatively easy compared with that of hundreds of small storekeepers and rural settlers, and thousands of harassed taxpayers in New South Wales, who are on the verge of bankruptcy. Their position is never considered by the honorable gentlemen who advocate the adoption of the Lang plan. They are more concerned with throwing a smoke-screen over everything that they do not want us to see. They talk about taking bread out of the mouths of starving women and children, but forget that Australia has always recognized that her first obligation is to feed her people, and she has stood up to that obligation. The trouble with the New South Wales Government is that it has entirely failed in its duty to provide some constructive scheme for the development of the State and the employment of the people. It has muddled about with tin hares and State lotteries, and has converted the State into a glorified Monte Carlo. It has besmirched the good name of New South Wales with mud, and has entirely destroyed the credit of the State. This is having the effect of reducing wages in every direction. There is no confidence in the State, and more and more work is going away from it. The people have no time for the type of government to which they are now being subjected.-

The honorable member for Fawkner (Mr. Maxwell) asked me to outline my solution of the difficulties which face us. I would not be so presumptuous as to attempt to contend against the lawyers who are members of this Parliament when involved constitutional questions are under consideration; but I suggest that the first thing we must do is to find out where we stand. We must test our powers in the courts, if necessary. The Government is doing the right thing in pushing on with this bill, even though the measure may not be drawn according to the wishes of the Leader of the Opposition. What does it matter, after all, if certain old-established but moth-eaten principles of law are thrown aside in order that we may face the tremendous issue which is before us ?

Mr Gander:

– So long as Lang is hit, everything will be all right.

Mr THOMPSON:

-Lang is a minor consideration. He will be forgotten before long. What we have to do is to discover which is the sovereign power in the Commonwealth. The question is whether this Parliament has any power to compel defaulting States to observe clean, honest, decent practices. The Government should go to the limit in ascertaining its powers. It should act boldly even if it, has to strike hard. I am not suggesting that force should be used ; but this is no time for bluff. Those who are pursuing dishonest political practices should be brought to book. If the Commonwealth has no power to garnishee the taxpayers of a State, or ifit. cannotput a receiver into a State Treasury, it should ascertain without delay what it can do. If a receiver is put into the New South Wales Treasury and the State police force throws him out, some other steps will have to be taken to determine the issue which faces us.

Mr Gander:

– The honorable member scorns to want civil war.

Mr THOMPSON:

– That is an infamous suggestion. What we have to do is toascertain whether thereis power in this country to prevent civil war, and, if so, how far such power is vested in this Parliament. If a State repudiates its liabilities, there should be power to deal with it. If obstructionist tactics are adopted by a State, this Parliament either shouldhave power to cope with the position, or it should seek such power from the people. I am sure that the rightthinking citizens of New South Wales will look at this subject in a reasonable way. It has been asserted that the New South Wales Government will resist every effort that is made to give effect to the provisions of this measure. The issue is therefore crystal clear. The Commonwealth Government must test its power. I believe that if it deals with the Lang Government firmly, the majority of the people of Australia, and of New South Wales, will stand behind it. There certainly should be power in theCommonwealth Parliament to compel defaulting

State governments to honour their obligations, not only to their creditors but to theother States of Australia. If such power is not at present conferred upon the Commonwealth Parliament by the Constitution, steps should be taken to remodel theConstitution with the object of setting up a National Parliament with sovereign rights. Australia should, in such circumstances, be subdivided into a larger number of new States or self-governing units, but without sovereign power. Honorable members of the Beasley group are laughing. I remind them that the loud laugh bespeaks the vacant mind. They are apparently amused because I have used the phrase “new States.” I am not wedded to that particular term, or toany other. My contention is that the present States should be subdivided into a larger number of provinces or selfgoverning units, the authority of which should be determined by a National Parliament with sovereign powers. These local governing units should be given sufficient power to put into effect local developmental projects, and they should have authority over all local matters. Eventually Australia will have to face this great issue. It is the issue which is emerging above all others, from the discussion of this bill, and before very long the people will have to face it.

Sitting suspended from 12.38 to 2.15 p.m. [Quorum formed.]

Mr.ROSEVEAR (Dalley) [2.15].- In approaching the consideration of this bill, it seems to me that the matters which should be placed in the forefront of the programme of any government are the problems of unemployment and international debts, which are so closely related, and so vitally affect the well-being of the people of all countries, that one would have imagined that the ministerial party, which claimed at the recent election that ithad the cure for unemployment, would have directed its first efforts to the solution of this problem in Australia. If this country is to emerge successfully,andwith credit to itself, from rhe present world crisis, this will not be done by governments acting in open antagonism to one another. If the Commonwealth Government is not prepared to endeavour to solve the problem of unemployment, instead of bringing in measures which, at the best, will have the effect of placing one government at the throat of another, it should stand aside and allow the States to deal with unemployment in their respective spheres. This Parliament cannot legislate in that matter as fully as can the various State Parliaments. The problems of all governments are obviously not the same. Some are committed to heavy expenditure, because considerable amounts have been spent on public works which, though they may eventually be productive, will be nonproductive for many years. The process of developing has been carried further in some States than in others, and the fact that a State’s interest bill is heavy does not justify a charge of extravagance against the Government now in control in that State. Much of the State debts is due to the administration of previous Governments, but that fact does not absolve a State Ministry from dealing with the situation that confronts it. Each State is better able to legislate to meet local conditions than is the Commonwealth Government.

The point has been raised whether this bill is constitutional, and the legal members of the House, apparently, are at sixes and sevens on the matter. Members of the legal profession usually agree to differ, and because of that fact, they are provided with a means of livelihood. It has been said by some honorable members that chaos ‘ may result from the operation of this bill. If chaos is brought about in . New South Wales, this Commonwealth Government, no doubt, will have achieved one of its main objects, because although it has boasted of the power it is presumed to have under the Constitution, I have heard sufficient from the legal lights on the Government side to indicate a considerable difference of opinion among honorable members opposite as to the Government’s constitutional powers. This Government will be satisfied if it can embarrass the Government of New South Wales; I do not believe it is much concerned whether the bill is constitutional or not.

The honorable member for Martin (Mr. Holman) desired to know the other day what portion of the war debts was Mr. Lang’s war debt. The answer is that no portion of that debt is attributable to the Lang Government; but let me remind the honorable member that two-fifths of the population of Australia live in New South Wales; and the citizens of that State are responsible for meeting twofifths of the war liability of this country. Two-fifths of the taxation that has to be levied to pay the interest on that enormous debt must be found by the people of my State, and the field of taxation is restricted by the fact that the people of New South Wales are responsible for a greater proportion of the interest on that debt than are those of any other State. I maintain that a State Government should have freedom to exercise its own economies without outside interference.

If this measure gives any power at all, it confers on the Loan Council a dictatorship. It has been said by the Prime Minister that the Loan Council was originally formed for the purpose of preventing competition in the loan market which was having the effect of forcing up interest rates. Other members have said that Mr. Lang is opposed to the Loan Council; but every right-thinking man in New South Wales has been opposed to its operations from its inception. The capacity of any State, prior to the inauguration of the Loan Council, to borrow money depended on the assets of that State. If it could show sound assets, it was able to .borrow to better advantage than States that were less fortunate. When we examine the Commonwealth Treasury returns for this year, and the special grants that have been made to some of the States in order to enable them to meet their liabilities even in normal times, it seems that New South Wales, at least, has always been able to stand on its own financial legs, without a prop being supplied by the Commonwealth Government. Compare the position of New South Wales with that of States dependent on the charity of the Commonwealth. Since 1913-14, Western Australia has drawn from the federal coffers, in the way of special grants, the sum of £3,935,905, and Tasmania, £2,465,656. Can anybody say that the borrowing capacity of New South Wales has been in any way enhanced through such federal assistance to the poorer States? During the critical period from 1925 up to the present financial year, Western Australia has been assisted with special grants amounting to £2,255,905; Tasmania has received £1,544,000, and South Australia, £1,530,000. Can it be truthfully said that Mr. Lang was not justified in refusing to hamper New South Wales in its borrowing operations because of the assistance rendered to those States? The borrowing powers of New South Wales have never been enhanced by the fact that it has had to borrow in company with the other States.

The present interpretation of the powers of the Loan Council gives it a dictatorship. Who anticipated that the time would come when that body would dictate to the States as to their internal administration? It was initiated for the purpose of regulating borrowing and interest rates. To-day it usurps the powers of both the Federal and State Governments, and interferes with the internal administration of the States. Then there is still a higher authority, which, in the final analysis, decides whether or not the money required by a State shall be forthcoming. On the recommendation of the Loan Council, the banks can give accommodation or refuse it. They are the real rulers of Australia to-day. I have always understood that the constitutional powers of the Commonwealth are limited to those powers handed over to it at the time of federation, supplemented by a few further powers granted as the result of amending provisions passed since. It was never anticipated that an institution known as the Loan Council would have the right to dictate the internal policy of the States, nor that any one government would at any time be able to constitute itself a bailiff to act against the interests of any State that might be temporarily embarrassed financially. The power sought to be usurped by this Parliament in order to seize taxes collected by a State is nothing less than an attack on the sovereign rights of the States, and I venture to say that the people of New South Wales will resist it at all costs. All the argument that has been adduced by the legal members on the other side of the House does not show that the Loan Council has the right to deny New South Wales financial accommodation when it desires it. In fact, the honorable member for Martin (Mr. Holman) appeared to indicate that, according to his knowledge and reading of the law, the Loan Council and the Commonwealth Government have gen beyond their powers already in refusing to give New South Wales the loan moneys allotted to it. How are the commitments of the various governments being met to-day? By the issue of treasury-bills and I.O.U’s. What is the backing provided by the Commonwealth and the States for those credits? The assets of the whole Commonwealth including those of the richest State, New South Wales! That State can hack its own bills; if it cannot, its credit is certainly not bettered by the constitutional shackles which bind it to other States that are more or less bankrupt. Yet, on the recommendation of the Loan Council, credits are extended to those States and denied to New South Wales. This bill is panic legislation; above all, it is antiLabour propaganda. The personality of the Premier of New South Wales has overshadowed all other considerations in this debate, just as he overshadowed at the Loan Council table the alleged statesmen and leaders of governments from other States. The measure was welcomed in the first place as a bold stroke of statesmanship, but upon more mature consideration even its leading promoters have become luke-warm, and are now beginning to doubt its wisdom, efficacy and even legality. But the Government, like all its tory predecessors, is prepared to act first, and to ascertain its legal rights afterwards. The Prime Minister described the bill as a master stroke* which would enable the Commonwealth to deal with the Government of New South Wales. He postulates the disciplining by force of defaulting States. But the devising of means to compel a State to pay appears to be beyond the. ingenuity of the supporters of this legislation. The Prime Minister reminds me of a little boy to whom has been presented a pea-rifle. He is enthusiastic over its usefulness, and does not realize its dangers. The AttorneyGeneral was a little more cautious, because, as a lawyer, he realizes the shortcomings, dangers and difficulties incidental to this legislation. He explained the processes of its administration step by step, but he omitted to tell the House what the last step will be. Presumably it will be when the Government of the Commonwealth comes face to face with the Government of New South Wales. I prophesy that the Commonwealth Governmentwill then bump against a stone-wall, as it didon a former occasion, because Mr. Lang stated in the Legislative Assembly this week thathis Government will fight the operation of this measure by any and every means.

The right honorable member for Cowper (Dr. Earle Page) agreed with the principle of the bill, but, true to the traditions of his profession, he thought a little amputation would be good. The bill would be better, he suggested, if the head and legs were lopped off, and the trunk were turned inside out. The right honorable gentleman declared that the fight to-day is between honest and dishonest governments. That is true. The fight is between governments that are honest enough to tell the people of the failure throughout the world of the present financial system, and the dishonest governments which are trying to buttress a collapsing edifice. I quote from a newspaper report the opinion of a man who can speak with some authority, and is not a member of the Australian Labour party-

Another outspoken speech was made to-day bythe Deputy-Chairman of the Peninsular and Oriental Steam Navigation Company (the Hon. Alexander Shaw)., at the annual meeting of the Chamber of Shipping of the United Kingdom. Mr. Shaw, who is a director of the Bank of England, delivered a noteworthy speech at a luncheon on the new Peninsular and Oriental steamer Strathaird, on January 9, when he urged thatthe only practical economic policywas, “ Forgive us our debts as we forgive our debtors.” In moving at the meeting of the Chamber of Shipping to-day, a motion supporting Britain’s proposal to cancel war debts and reparations … He recalled that in previous wars Britain had given free subsidies to her Continental friends, and had not sought repayment. In the Great War repayable loans had been substituted.

We are assured by Mr. Shaw that in years gone by Great Britain was prepared to financeher allies in European troubles; yet it is not prepared even to lighten the debts due to it by a part of the British Empire which made great sacrifices during theworldwar. Mr. Shaw continued -

It might be convenient for statesmen play ing for delay, to ask financial and economic experts to clear away the mess, when the experts realize that the debts cannot be paid, and that prolongation of the attempt to exact them -would in turn prolong the world’s suffering on the rackof poverty, animosity, and fear.

Mr. Lang has never alleged that the debts of his State will not be paid, but he has pointed out that some States are temporarily embarrassed, and should be allowed an extension of time in which to meet their obligations. Yet the Commonwealth Government, which has readily taken advantage of the Hoover Moratorium to get a respite of twelve months in respect of a war debt of £4,000,000, condemns the Government of New South Wales because it asks to be allowed more time in which to meet its debts. Mr. Shaw advocates the complete cancellation of war debts and reparations. He said -

Britainhas given a clear, bold lead in the declaration by the Chancellor of the Exchequer, Mr. Neville Chamberlain, early in the month, that a permanent settlement can best be achieved by a general cancellation of reparation and war debts.

The right honorable member for Cowper (Dr. Earle Page) urged that definite safeguards be provided against the possible abuse of the powers conferred by this bill. His speech is characteristic of the fear that overtakes people when they realize that they are going too far. The right honorable gentleman knows that the anti-Labourparties will not always be governing the Commonwealth, and that what is sauce for them is sauce for their political opponents. If this legislation is used to grind down the workers of New South Wales, a future parliament will retaliate when Labour regains thetreasury bench. The Leader of the Country party urged that the Commonwealth should seize the railway revenueof New South Wales. Doeshe imagine that the State Government will be so obliging as to operate the railways of New South Wales for the benefit ofthe Commonwealth Treasury? As a means of solving theproblems of New South Wales he urged the creation of new States;he declares that ifthe existing State is subdividedinto allotments, the citizens of themwill always be able to paytheir way. Ihope that they will be able to do better thanthey are doing at tlie present time, for to the amount of over £2,000,000 the people in the areas which it is proposed shall be separated by the creation of new States have failed to meet their obligations to the Government of New South Wales. Mr. Lang could have met many of its obligations if he had chosen to put the screw on the settlers alleged to be represented by the right honorable member for Cowper. I cannot believe that even if (hey were working under separate constitutions they would be able to pay their debts. That they are much indebted to the Lang Government is proved by the following facts contained in a report issued by the Lands Department of New South Wales this week: -

From the figures quoted, it will he seen that the total amount of arrears of payments and penal interest waived entirely by the New South Wales Government approximates £190,588.

It is evident that these people have much for which they are indebted to Mr. Lang’s administration, and they must improve considerably their present achievements if they are to enjoy in new States that prosperity which the Leader of the Country party has predicted for them.

The Premiers plan has come up for discussion during the course of this debate. We are entitled to ask ourselves how it has operated in the various States. Has it increased prosperity or reduced unemployment in those States which are deemed to have faithfully carried out the plan? The official figures seem to indicate that in some of the States which claim to have carried out the plan, unemployment is actually worse now than it was before. According to an analysis which appears in Commonwealth Labour and Industrial Statistics there has been an increase of unemployment in New South Wales from the first to the last quarter of last year of 2.3 per cent. In Victoria the increase has been 1.1 per cent., and in Queensland, where the Premiers plan i3 supposed to have been faithfully carried out, the increase has been 3.4 per cent., while in South Australia the increase has been 3.1 per cent. Western Australia is another State which claims to have adhered to the plan, and there the increase in unemployment is 3.1 per cent. In Tasmania the increase is 2 per cent. Therefore, in three of the States, unemployment has grown even faster than in New South Wales, although in those States the plan was supposed to be operating. , The Premiers plan was made binding on all the States, but at least this concession was made : The Government of each State was to have the right to determine in what way its economies were to be carried out. Had the Upper House in New South Wales, composed largely of persons belonging to the same political party as honorable members opposite, been prepared to carry out the wishes of the New South Wales Government, it would have been possible to meet all commitments. Since the New South Wales Government was allowed by the Loan Council the right to carry out economies in its own way, surely the Upper House, if it really desired to effectuate the Premiers plan, would have agreed to the Government’s proposals. That, however, was not the desire of the anti-labour forces in Australia. Their determination was to smash labour conditions, to reduce wages and increase working hours. Only in that way, they claimed, could the economic problem be solved. Any one who gives a moment’s consideration to the matter must realize that, with the constant advances in scientific means of production, including the improvement of machinery, the human element is gradually being displaced in industry, and any government which seeks to enforce certain fixed hours of labour year after year is doomed to have a permanent and growing army of unemployed on its hands. The only solution of the unemployment problem, in so far as it is affected by hours of labour, is a gradual reduction of working hours in order to keep pace with the increased productivity of machinery.

As for the suggestion that wages should be reduced, honorable members should recollect that the workers in any community are the best spending force. In the nature of things they are not hoarders of wealth. Even in the best of times they must spend all they earn in order to exist. That vast sum of money which goes out of the coffers of industry every Friday night in the shape of wages is immediately put into circulation, and returns to the sources of employment. Any attack on the wage standards affects the purchasing power of the community, and results in increased unemployment. Not one of the States in which wages have been reduced and hours of labour increased can show that it has gained anything over New South “Wales as a result. Members of the Country party claim to represent the primary producers, and, that being so, they should be the last to advocate a reduction in the spending power of the people. The fall in commodity prices abroad, and the keen competition of other countries, are making it difficult for the primary producers to carry on. It is their duty, therefore, to encourage the establishment of a strong, local market to take the place of the one they are losing overseas. That can be done only by increasing the spending power of the workers, not by decreasing it.

We have been told by the opponents of the Lang plan that, as a result of the administration of the Lang Government, misery and starvation are rampant in New South Wales. Yet one honorable member opposite .stated this morning that the unemployed in New South Wales were better off than many of the taxpayers.

Lord Rothermere, who ought to know something of his subject, writing in the Sunday Express, of Srd January, 1932, said -

Do not reduce salaries and wages. We cannot starve ourselves into prosperity.

The Government might take that advice to heart.

A very plausible story was put up by some honorable members opposite regarding our solemn obligations to the bondholders. They professed to be greatly concerned about them. The Assistant Treasurer (Mr. Bruce), I think it was, stressed the fact that some of the bondholders in Great Britain are trustees acting for orphans. He said that if interest rates were reduced these little orphans might suffer hardship. Apparently this Government is not concerned about the sufferings of the Orphans in Great Britain and the United States of America who may be affectedby the Hoover moratorium, under which £4,000,000 of interest remains unpaid. The Prime Minister said that we must honour our solemn obligations to the bondholders. How long has he been an advocate of this policy? Only six months ago he voted for a reduction of interest to the Australian bondholders. On that occasion the right honorable member for North Sydney (Mr. Hughes) said that, on its face, the proposal bore the proof that it was indubitably a breach of contract, a repudiation of obligations going to the very root of the contract. It is wrong for Mr. Lang to advocate a breach of contract, but it is a sure sign of statesmanship when the Prime Minister (Mr. Lyons) advocates the same thing! The Prime Minister said that the surest way to feed the people was to meet our obligations. I do not object to meeting our obligations if we can, but I say that if our obligations are to be met at the expense of the people who need food, clothing and shelter, then our obligations to the bondholders must come second in our consideration. No government has a more honorable obligation than that which it owes to it’s own people to protect and feed them. In that respect I stand for Australia first.

The burning question now is whether the New South Wales Government will fight. One honorable member opposite said that the Premier of New South Wales threatened to use the forces of the State to prevent the bailiff from coming in to seize the revenues of the State. The honorable member was worried about who would protect the interests of the Commonwealth. Among Government supporters is one gentleman who was responsible for the creation of the federal police force because some one struck him with an egg at an election meeting. If being struck with a questionable egg is sufficient excuse for the creation of a federal police force, surely the resistance by a State to the enforcement of Commonwealth lav/ would be considered excuse enough for the raising of any force which the Commonwealth Government might deem necessary. The honorable member for Parramatta (Mr. Stewart) is buoyed up with the hope that the present New South Wales Government will not last long. However, I do not regard him as the best judge of such matters. A little while ago he sent 200 members of the New Guard in some of his unemployed buses to fight a bushfire. The strange thing was that the members of the New Guard left Sydney two days after the fires were reported to be out. If the honorable member is not a better judge of the life of a government than he is of the life of a bushfire, we cannot place much reliance in what he says.

The honorable member for Calare (Mr. Thorby) seemed to be upset about what he regarded as the heavy expenditure of the Government of New South Wales. He accused that government of spending money on works which were not reproductive. He complained about prolific expenditure on the North Shore Bridge. Like most persons endowed with a rural mentality, he objects to any expenditure which is not for the benefit of the farmers. T remind him that the Government of New South Wales could meet many more of its obligations if it closed down the non-paying railway lines which run to various points in the State. Does the honorable member advocate the closing of such lines? He knows well that it would impose a tremendous hardship on many rural districts if those non-reproductive lines were closed. [Leave to continue niven.] The honorable member for Calare has stated that the supporters of the Lang Government are cowardly sheltering behind the unemployed. Let me say that the New South Wales Government is to-day spending at the rate of £7,000,000 per annum in providing work and sustenance for the unemployed. If that is a cowardly action, we are prepared to accept the charge of the honorable member. He states that he is. disgusted with New South Wales. We have, in this Parliament, some members who were previously members of anti-Labour governments in New South Wales, including the honorable member for Calare (Mr. Thorby) and the honorable member for Martin (Mr. Holman), and on occasions the people of that State showed unmistakably that they had been thoroughly disgusted with those honorable members. This legislation must result in antagonizing Australian governments, in creating a degree of uncertainty in the minds of the taxpayers, and in hampering the Government of New South Wales in its efforts to solve the unemployment problem. There is no doubt that had the electors of New South Wales, who now have a full knowledge of the intentions of this Government, another opportunity to elect representatives in. this House, they would show unmistakably that they are disgusted with some of their recently-elected representatives. It has been said that, because this Government was returned with a majority at the recent federal election, the Government of New South Wales will lose seats at the next State election; but if this is the best legislation that the Commonwealth Government can bring forward to deal with the difficulties confronting Australia, the result of the recent federal election cannot be any criterion of the result of the next State elections. The Government of New South Wales, despite all the criticism levelled at it, has shown at least that it stands for the interests of the people in preference to those of the bondholders abroad. The members of the Labour party have always shown a determination to fight for the betterment of -the conditions of the Australian workers, and for the provision of sustenance for the people in the shape of work, food, clothing, and shelter. If the term “ repudiator “ can be applied to the members of a political party that is prepared to put the interests of the community before those of bondholders abroad we shall be glad to be so branded.

Mr JENNINGS:
South Sydney

. -It is a matter of deep regret to me that in my first speech in this House I have to refer to circumstances which adversely affect New South Wales. In view of the national importance of this measure, and of the fact that the framers of the Constitution did not contemplate default on the part of a State, I shall endeavour to approach this subject free from party spirit and as dispassionately as possible. It is a sad reflection on the public life of Australia that this Commonwealth Parliament should have to pass a measure like this. I believe that it is the desire of the majority of the people that the Federal Parliament should rise above party and seek in some national way a solution of the present crisis and unemployed problem. It is obvious that no matter what measures are brought down to the House to overcome these difficulties, they will meet with destructive criticism from certain honorable members opposite. I suppose that, as a young member of the House, I may be rather optimistic in expecting somewhat Utopian conditions to exist in political matters. But we must approach this issue as it presents itself to us. Financial undertakings in private, commercial, and public spheres of action are based on confidence and sanctity of contract. The people look to the Government to set an example in the honouring of contracts, financial and others, and unless all governments honour their obligations we cannot expect private people to honour theirs. In all British governing dominions it is the unwritten law that a financial undertaking once given must be honoured. The undertaking between the Commonwealth and the States was based on confidence. This Government is now legislating to restore confidence and stability in the financial market, and that, in turn, will stimulate industry and promote employment. An outstanding feature of the recent election was that the public of Australia had confidence in the honesty and sincerity of the Prime Minister (Mr. Lyons) and of the Attorney-General (Mr. Latham), the sponsors of this measure. It is difficult to reconcile the attitude of the Government of New South Wales to-day with it’s attitude prior to the last State elections. When making his policy speech on behalf of the Labour party in that State, on the 23rd September, 1930, Mr. Lang stated -

The Australian Labour movement would not permit for one moment any of its leaders to be associated with a policy of repudiation. The pledge to the people from a Labour man is as binding as his pledge to a bondholder. The Labour party sets its face against all repudiation.

At that time the official organ of the Labour party of New South Wales considered that statement so important that it published it throughout the State under the heading - “Lang Repudiates Repudiation.” The people of New South Wales accepted that statement, and returned Mr. Lang to office with a substantial majority. Mr. Lang must have known that if he included any suggestion of repudiation in his policy speech his party would not have been returned to power. In view of the fact that the Government of New South Wales has now violated almost every pledge that it made to the electors, its duty is to take the simple and obvious course of resigning immediately and appealing to the people. If that were done I feel certain that the verdict of the people would be such as to make this legislation unnecessary. The right maxim in government, private, and business undertakings is not that “ Honesty is the best policy “, but that honesty is the only policy. The future of Australia is wrapped up with this legislation. If we repudiate our obligations, God help Australia when we have to approach the loan market for further assistance. Great damage has been done to our prestige abroad because of this talk of repudiation. I have with me a letter from a Sydney business house which throws a side light on the situation. This firm is the representative of a British manufacturing concern, and sells a line of goods which, incidentally, cannot be made in Australia. Under the terms of trade, thousands of pounds worth of goods were sent to Australia on consignment, and on the sale of those goods remittances were, in due course, forwarded to London. As a result of the talk of repudiation, the supply of goods to this firm was stopped.

Cablegrams and letters passed between the two houses, and on the 5th December, 1931, the following reply was received from the British manufacturing company : -

We are sorry that you should feel in any way aggrieved at the delays, but we can only say that the conditions of your country were alone responsible. We could not execute orders without cash in advance, or arrangements made in London to pay cash. We are sorry that we do not see our way to alter our attitude until conditions in your country make it possible for us to reconsider our decision. We arc ‘only too anxious to increase our business with your country, but if you put yourself in our place at the time we wrote you, you will realize that conditions at that time looked somewhat hopeless, and we were, therefore, obliged to make our decision on the conditions as they appeared to us. We need hardly add how very much wo appreciate the efforts you arc making to increase business iu our mutual interest, and wc sincerely hope, that is, from what we read in the news from your country, that your financial position is improving, lt is our earnest hope that we shall not have to hang up any of your orders in future, but we are quite sure that you now clearly understand, and until conditions do get on a sound commercial basis, we must ask you to accompany your orders with cash.

In order, then, to get these goods to Australia, the Sydney firm had to send thousands of pounds to London in advance for goods that might or might not be sold in Australia. That firm had to dismiss certain of its hands because of the absolute stagnation of its trade, brought about as a result of the talk of repudiation. That position obtains in respect of many other firms which trade with London. In past years Australia has put in hand public works involving the employment of some 1.00,000 workmen. “ In a young coun try like this, public works must bc constructed, and for that purpose public money is needed. The best way to drive capital from Australia is to practise repudiation.

This legislation will not be used as an unfair instrument against the States. When the present position has been righted the necessity for it will disappear. I am certain that when the people of New South Wales reflect upon the situation they will see the necessity for this bill. By its passage Australia will declare to the world that it intends to honour its obligations. If wc do that, Ave shall ensure sufficient money in the future for the employment of our people on public works and in the industries of Australia, and, in our march along the road of prosperity, we shall gradually cleanse the stain of default and repudiation from our national escutcheon.

Mr COLLINS:
Hume

.- I do not propose to dwell at any. length upon the legal aspects of this measure; they will no doubt occupy the attention of members of the legal profession in our law courts in due time. I believe that the Government has introduced the measure with great reluctance; but it realized that the bill .was necessary. In regard to the payment of liabilities, I cannot differentiate between a government and a private individual. I do not think that the Commonwealth Government can be applauded for having failed to meet the obligations of New South Wales on the due date. I shall not say that its action amounted to repudiation or default; but I do say that it allowed unnecessary delay to occur in meeting these commitments. A private individual who signs a bill for the payment of a curtain amount, and gets the bill endorsed by a man of greater financial stability, if he subsequently finds himself unable to meet his obligation, falls back upon, the person who endorsed his bill. In such a case the guarantor cannot be excused for failing to meet the obligation on the ground that he must first recover the amount from the original debtor. In the same way, a government which accepts liability for the obligations of another government, cannot be excused for any delay that may occur in meeting those obligations while it takes action to recover the money. This Government should first have met the obligations of New South Wales, and then have taken steps to recover the amount due to it.

I have listened with great interest to the speeches delivered on this measure by various honorable members, and I do not propose to repeat any of the facts or figures which have been used. I must, however, express my deep resentment, as the representative of a New South Wales constituency, at the action of the State Premier in repudiating the obligations of the State. I listened with interest, but also with indignation, to the statements of the honorable member for West

Sydney (Mr. Beasley) respecting Mr. Charles Hardy. The honorable gentleman said that Mr. Hardy’s firm had failed to meet its obligations and that its creditors had had to accept 6s. Sd. in the £1. Mr. Charles Hardy and his firm have been brought to their present position through the foolish legislation fathered by the Lang Government. It was impossible to maintain profitable operations with a 44-hour working week, when the working week was 4S hours in other States, and in districts adjacent to that in which Mr. Hardy’s firm was operating. An incalculable amount of business has been lost to New South “Wales since 1920, when the 44-hour working week became operative. In that year about 360,000 unionists were earning in the neighbourhood of £5 per week iu New South Wales. The total wages bill that year amounted to about £90,000,000. When the 44-hour week came into operation about one-twelfth of that sum was lost to industry. If that £7,500,000 had gone into the pockets of the workers, or if anybody in particular had benefited by it, something could be sa id in favour of the 44-hour week; but that did not happen. The money was completely lost to industry ; men were driven out of employment in New South Wales and forced to seek work elsewhere; and the whole economic structure of the community was damaged. It was under these circumstances that Mr. Hardy, in the most patriotic way, decided to devote himself to the service of the public. He realized that industry could not flourish while legislation of the kind introduced by the Lang Government remained on the statute-book. Surely legislation, as a matter of fact, strangles industry. Mr. Hardy, therefore, in the interests of the workers of Australia, set out on his great campaign to awaken the people of the country districts to the need for cooperation and self help. He has since been advocating, far and wide, the setting up of new States or provincial councils which would control their own affairs and would operate a policy designed to relieve unemployment, stimulate industry, and enable the nation to meet all its obligations. It was for these reasons that Mr. Hardy, who was born on the banks of the Murrumbidgee, and has lived in the country practically all his life, gave his support to the Riverina movement and others with kindred objects. He has. been urging the people to rise up and resist the indecencies perpetrated by political gangs. The people of the country have rallied to his standard because they recognize the wisdom of his policy. Mr. Hardy is not working for any self interest, but is endeavouring to get the people to resist the forces which are seeking to undermine our national well-being. The firm with which this gentleman is connected, was forced into bankruptcy by the foolish legislation placed on the statute-book of New South Wales, and now Mr. Hardy is doing his best to arouse the people to demand a review of. our whole governmental system.

It is most regrettable that an element should have been introduced into the industrial life of this community which is> breeding serious dissatisfaction in our Labour organizations, and is gradually assuming control of the workers’ organizations of Australia. The men at thecentre of this movement are usually of foreign extraction, and they are causing our trades hall organizations to become a menace to the whole community. I appreciate the good work that has been done in the past through trade unionism, and I believe in men doing their best to improve their standards of living; but itwill be wise for the industrialists of Australia to remove this foreign element from their ranks, and to make impossible the preaching of their godless doctrines to the people of this country. Australia can never enjoy real prosperity while the positions of authority in our various trades and labour councils are held by men of the type to which I have referred. These men should ba removed from the positions which they now occupy, and forced to return to their own countries. Their places should be filled by Australians with Australian sentiments and ideals. When that is done, and only then,, we may expect a return to real happiness and prosperity in this country.

I listened with some interest to the quotations made by the honorable member for Hunter (Mr. James) from the Sermon on the Mount. Personally I am cautious about quoting scripture, and 3 am careful of my associations with people who quote scripture to suit their own ends, for I remember a saying that was current when I was a boy, “If your neighbour quotes scripture, brand your calves early”. I have listened also with mixed feelings to the statements of the honorable members who sit on my right about the great fight which the Premier of New South Wales is making in the interests of Christianity. Christianity will never be helped by the preaching of godless doctrines by agitators who have come here from overseas. We know very well that the nations of the world have been lifted from degradation ; that civilization has been placed upon its present footing; and that our Empire has become a great and mighty force because of adherence to the great principles of Christianity. The practice of the principles of Christianity by the peoples who comprise the British Empire has had a vast influence for good upon the world. Human activities have prospered wherever these principles have become operative. Christianity is one of the wonders of the world; and in my opinion there will be neither a happy future nor permanent prosperity for this great Empire unless it continues to develop on Christian lines. Christianity has embellished the life and institutions of our people, and it has been left to this enlightened age to determine whether the conditions which have been won shall survive or whether they shall be covered with a funeral pall and wrapped in eternal gloom.

A good deal has been said about the widows and orphans of Australia; but there is not a single man or woman in this country with any Australian sentiment who would not, in accordance with the best British traditions, express the deepest sympathy with people who are in misery. In the great outback areas of Australia, employers and producers alike are suffering severe privations, but there is scarcely one of them who would not gladly share his last loaf of bread with a needy neighbour. A good deal has been said about what Mr. Lang has done for the suffering widows and children of New South Wales, but I believe that the people of this great country -would far rather follow in the footsteps of their forefathers, make great sacrifices, and even die if necessary, than owe their comforts to degradation and dishonour.

I stand for the principles of this bill, and I believe that the people who sent me here will applaud me for doing so, because we all desire to uphold our reputation in the eyes of the world. Our good name may not have been very greatly injured by the delay which has occurred in meeting the payments which fell due on the 1st February ; but I am certain we should have stood higher in the eyes of the world had we paid the money on the due date.

In reply to the quotations of the honorable member for Hunter from the Sermon on the Mount, let me direct his attention to the following passage of scripture : -

The Lord said unto Abram; Get thee out of thy country, and from thy kindred, and from thy father’s house, unto a land that I will shew thee. And I will make of thee a great nation, and I will bless thee, and make thy name great, and thou shalt be a blessing.

One of the best ways to solve our unemployment problem is to put our people in a position to live on the land. If our great cities could be relieved of their surplus population and the people settled on the soil, w,e should develop the resources of this country, eliminate waste, and bring our efficiency to the maximum standard. Unless the unexpected happens, the world prices of the commodities which Ave produce will remain about where they are. It it improbable that they will reach anything like the high figures which prevailed a few years ago. But notwithstanding this, I believe that if our people were put on the land they would be able to maintain themselves and live in comfort on the fruits of their own labours, instead of being forced like the aborigines to apply at the police stations for rations.

I am not a believer in low wages. I believe that wages should be high enough to enable a man to maintain his wife and children in comfort. While there is breath in my body I shall do all -I can to build up such a standard of living. Every man should be allowed to earn as much as his brain and brawn enables him to earn. I am entirely opposed to bringing the workers down to the standard of the slackers. If a man is capable of earning £10, £15, £20 or even £50 a week, he should have the right to receive that sum. But unless there was a profit on his labour, a workman would not be able to obtain those wages. “We should not destroy the great competitive spirit that is essential to the building up of industry, and to the progress of nations. I shall never under-estimate the value to a community of the buying power of the wage-earner, which is a great factor in the prosperity of any town or city. The greater the amount of money spent in towns and cities the greater the prosperity that follows. The release of credits has been responsible to a great measure for the indiscriminate borrowing and reckless expenditure that has resulted in so much financial waste in Australian cities. Millions have been extravagantly expended in Sydney on the harbour bridge and the underground railway system. Certainly those works have provided temporary i employment, but if the money expended had been used to place on the land men capable of producing from the soil, much better results would have been obtained than from the white elephants to which I have referred. Such men might even be granted free land, a home and a certain balance, in order that they might develop the resources of this country. Destroy the cities, as Abraham Lincoln remarked, and the country will be able to build them up ; but destroy the country, and the grass will grow in the streets of the cities. Since 97 per cent, of om- export wealth comes from the soil, we can never enjoy the real prosperity to which we are entitled unless we develop our resources in the land.

The people are ready to make sacrifices, provided the honour of the nation is upheld. It is character, and not comfort, that gives fibre to a nation; the integrity of her people, and their loyal allegiance to the demands of honour, justice and truth give her the right to endure. We must live up to the traditions of the British race, and show respect for the memory of those who, by great sacrifices, blazed the trail in the early days, and laid the foundations for the farming and pastoral industries of this great country, suffering many privations in order that future generations might enjoy a rich heritage. We must remember, also, the sacrifices of the immortal Anzacs, who fought for the freedom and peace which we enjoy to-day. Some members ask, “ What had the war to do with us ?” ; but what would have been the position of this country if that worthy ex-Prime Minister of Australia (Mr. Andrew Fisher had not promised “ the last man and. the last shilling.” Should Australians have been left in undisturbed enjoyment of the sunshine and luxury of this country, while their fellow creatures in the land from which our forefathers came fought our battles? Are we not sons and daughters of those who came here from England, Ireland, Scotland and Wales, to develop this new land, and so build up the great Empire to which we have the honour to belong? Had the Allies failed in the late war, and had the Triple Alliance been successful, Australia would have been helpless, and would have been subjected to the domination of Germany.

I desire to refer to a statement by our Communist friends, who ask us to accept as brothers the members of Asiatic races. Would that be compatible ‘with the principles of a White Australia, a policy fostered by Labour governments in the past? That policy should be sacred to every nian, woman and child in Australia to-day. These persons ask our workers to go into competition with coloured labour, and submit to the atrocities, racial feuds and contamination that have been experienced by those countries, in which black and white meet. I speak with the greatest respect for the people of other races. I have no desire to make disparaging references to the Japanese, or to any other people. As creatures of the earth, they have the same rights as the inhabitants of the other parts of the world. Wo desire to live in peace with them, to buy their goods, and to sell them ours in return; but it would be impossible for us to live together. When persons in certain quarters persist in asking what the last war meant to us, I tell them that the very existence of our nation depended on the success of that war. I have every respect for the coloured nations; but, as Kipling says -

East is East anil West is West, and never the twain shall meet.

If they do meet, mark my words, the white races will be promptly outnumbered and outvoted. With foreign nations building up their defences in every possible way, and with the far-flung shores of Australia as unprotected as they are to-day, we have to consider the position of this great country of ours. We cannot disregard the coloured nations ; hut their conception of life differs fundamentally from ours. Their traditions and standards of living are as far from ours as the sun is from the earth, and consequently, we and they can never come together as one people. I urge honorable members to consider these facts, and to refrain from petty party bickerings, when there is much to do in the cause of Australia, and of suffering humanity. As honest Australians, there is plenty for us to take our coats off over, and fight in the cause of our fellow men, instead of indulging in trivial party squabbles, which are of far too frequent occurrence.

Debate (on motion by Mr. E. J. Harrison) adjourned.

page 443

PAPERS

The following papers were presented : -

Dried Fruits Export Charges Act - Regulations amended-Statutory Rules 1932, No.” 17.

Wine Overseas Marketing Act - Regulations amended - Statutory Rules 1932, No. 18.

page 443

ADJOURNMENT

Financial Agreement Enforcement Bill - Tariff Debate - Unemployment - Representation at International Labour Conference at Geneva - Cattle Tick Pest.

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

.- - I move -

That the House do now adjourn. t desire to intimate, particularly for the benefit of those honorable members who have not yet spoken on the second reading of the Financial Agreement Enforcement Bill, that the Government has given consideration to questions that have already been raised during the debate by honorable members who have felt that, perhaps, the States have not been given a full opportunity to express their views regarding the bill. Therefore, the Government has decided that, in committee, it will seek to limit the operation of the measure to a term of two years. The object is merely to assure the States that no injustice will be done to them without giving them full opportunity to consider the provisions of the bill. The intention is merely to limit the operation of the bill to two years, and at the first meeting of the Loan Council, the matter will be brought under the notice of the representatives of the States, so that they may make any suggestions which, in their opinion, would improve the bill in the direction of safeguarding their own interests. There is no necessity to wait two years before making such amendments as the Government may be able to submit to this Parliament.

Mr SCULLIN:
Yarra

.- Will the Prime Minister (Mr. Lyons) indicate when the debate on the tariff proposals of the Government is likely to be resumed? Will it be before the Easter adjournment, or after it, and if the latter, how soon afterwards? Will the honorable gentleman also state next week, if possible, when the problem of unemployment will be dealt with? In reply to questions asked in the House, he indicated that the problem would be fully considered and discussed at the Premiers Conference. This problem is closely linked up with the whole financial position of the Commonwealth and the States, and I have heard it mentioned that this conference will not take place until May. That would mean a long delay that is not warranted, and I would impress upon the Government the importance of holding that conference at an earlier date. If the unemployment problem and the financial position are not to be considered until the conference meets, we shall be on the verge of winter before methods of relief can even he discussed.

Mr HOLLOWAY:
Melbourne Ports

– I draw attention to the decision of the Government to refrain this year from sending a delegate to the International Labour Conference, which is held annually at Geneva. On all previous occasions, if I remember rightly, the Commonwealth Government has allowed a Labour representative to attend; in fact, the Government, the employers, and the employees have been represented at most of the previous conferences. This year, I understand, on the score of expense, no delegation is to be sent from Australia. Although no intimation of this decision was given to the industrial workers of this country, who total something like 500,000, the laborious process of selecting a delegate to represent the whole of Australia was gone through at considerable cost. The expense of sending a delegate to Geneva would be but trifling; I believe that the whole cost of the delegation would not exceed £500. The Government has made a great mis take, in my opinion, in coming to this decision. All delegates to previous conferences in the last few years have emphasized the fact that no great progress can be made on an international economic basis without international conferences, and the International Labour Office at Geneva provides the only international machinery in operation in the world for the discussion of economic, monetary and sociological problems. Most, if not all, international experts recognize that the most important report ever submitted to the conference was that dealing with unemployment, its causes, effects, and prevention. Expert committees had studied the subject for two years, luring which data concerning all phases of the unemployment problem throughout the world had been collected and tabulated, and on that information the director’s report to the International Labour Conference last year was based. Because of the world-wide interest in the problem, the director went so deeply into if that some conservative governments criticized him for having given to it too much time, whilst other more progressive governments said that he should have pursued the subject further. The report was not fully digested last year, and although it is not on the agenda for the forthcoming conference it is bound to receive attention. If there is one problem more urgent than another to Australia and other countries it is unemployment; it overshadows all Hie other issues with which the world is confronted at the present time. But in addition to it, other matters in which Australia has a deep interest will be dealt with. There is no subject associated willi the economic problem that does not vitally concern us. The attitude of the Commonwealth Government is that Home proposals for industrial legislation are behind the stage which Australian legislation has already reached, and, therefore, we are not concerned in them. But one purpose of international co-operation at the Labour Conference is the elimination of the intense economic competition between nations. The immense gap between the highest standards and the lower standards must be narrowed. The mission of the International Labour Office is to raise the lower standards of living, and so make competition between the nations less keen. I had the privilege of attending the conference in Geneva when the right honorable member for Flinders (Mr. Bruce) was Prime Minister, and I heard Australia criticized by the representatives of other nations because it did not take a sufficiently keen interest in international labour problems. I answered, as the Commonwealth Government is answering to-day, that many of the proposals before the conference were transcended by the actual legislative achievements of Australia. They replied, “ That is a selfish attitude. We desire the more advanced countries to help to lift the backward countries to their level “. The higher we raise the level of the backward countries the more easily shall we be able to maintain our own standards. Our duty is to attend these conferences regularly, and I hope it is not too late for the Government to re-consider its decision not to send a delegate this year. An interstate ballot for the appointment of a delegate has been taken by the Labour organizations, and a member of the Amalgamated Society of Engineers, an old and powerful organization, has been chosen. He has made all arrangements to meet the necessary expenditure - not an easy matter for a poor man. The Prime Minister (Mr. Lyons) and others have rightly stated that the Australian monetary system cannot be substantially altered except in conformity with an international plan, and that we cannot maintain our economic and industrial standards unless other countries are raised nearer to them. We should therefore be represented at the Labour Conference, and by helping to raise the standards of backward countries, facilitate the maintenance and improvement of our own. I appeal to the Government to allow Australia to be represented atGeneva. Australia’s first participation in this conference was arranged by the Bruce-Page Government, and I have heard no complaints by delegates from other nations that our delegates did not hold their own there. We have associated ourselves with certain problems, and we are represented on committees; I was appointed to the International Executive Committee, and have maintained correspondence with it ever since. The farreaching problems with which the gathering deals cannot be disposed of in one year. Our interest in this work should be continuous. It is wrong to create a gap in the investigations and discussions for the sake of a mere £600. Surely the Commonwealth is not so unfinancial as to be unable to allow an Australian delegate to advance a further stage the work commenced in previous years!

Apart from the paramount subject of unemployment, the next conference will consider, amongst other things, the abolition of fee-charging employment agencies. I do not suggest that everybody associated with this business in Australia is immoral, but one of the “worst features associated with the supply of labour is the operation of private registry offices. Employers and employees alike are exploited and cheated by immoral practices of various kinds. That is a vital problem, in which we are interested, but it is not as big or as fundamental as that of unemployment. A great deal of misery and trouble occurs in Australia, especially during periods of depression, because of the immoral practices of private-employing agencies. Next there is the matter of invalidity, old-age, and widows and orphans insurance. Some years ago this Government instituted a far-reaching investigation into this subject, and elaborate reports on it may be seen in the Library. No doubt they are also pigeon-holed in our departments. The recommendations were not given effect. The investigation was costly, and many witnesses were examined. Surely, the subject, which is of international significance, should be further explored.

The age of admission of children to employment in non-industrial occupations is also a subject which deserves attention. We have suffered in the realm of international competition by reason of the employment of child labour. Surely our labour representatives should be at the conference to help to protect the workers of this country by urging the representatives of other countries to increase the age at which child labour could be employed. I have heard representatives of the Country party on numerous occasions allude to the difficulties that are experienced by those engaged in our primary industries through having to compete against countries which employ child and other cheap labour. The very reason why this organization was brought into existence was to raise international standards of labour, and make it possible for countries like ours to compete with some of the older countries.

The matters to which I have referred vitally concern Australia, and I hope that, as a result of my representations, further consideration will be given to them, and that a labour delegate will be sent to the next session of the International Labour Conference. The cost would be small. I hope that the condition of our finances will improve, so that there will be no further break in our representation at these conferences.

Dr EARLE PAGE:
Cowper

.- I desire to address a question to the Leader of the Government (Mr. Lyons) with regard to ticks. This matter affects the whole of Australia because, although up to the present tick infestation has been more or less confined to Queensland and the northern part of New South Wales, the pest has spread steadily in a southerly direction during the last mouth, over an area of about 200 miles. It is, therefore, possible that if effective means are not taken immediately to hold the tick in check, South Australia and Victoriawill be subject to the infestation. Some years ago a plan was inaugurated whereby the Commonwealth Government subsidized the Governments of Queensland and New South Wales to enable them to combat the encroachment of the tick. The amount paid to New South Wales was £55,000, which was used largely to build public dips to treat affected cattle. If the advance of the pest is to be checked, it is absolutely necessary that many more dips should be built in that State. I should like to know whether, in view of the peculiar circumstances in which New South Wales finds itself, the subsidy is to be withdrawn from that State, which, of course, would cause delay and prove fatal to the cattle industry of Australia. I urge that effective steps shall be taken at the earliest opportunity to check the further encroachment of tick.

Mr BRUCE:
Assistant Treasurer · FLINDERS, VICTORIA · NAT; UAP from 1931

– The honorable member for Melbourne Ports (Mr. Holloway) has raised the matter of the representation of Australia at the next session of the International Labour Conference. I regret that, consequent on the change of government, so late a decision was given in this regard, but as it was made known on the 5th February, it must be admitted that Ministers acted with considerable promptitude.

In these times the greatest care has to be taken to ensure that any proposal for expenditure is warranted. The honorable member has stated that the cost of the representation of the Commonwealth at the next International Labour Conference would be about £500; but the information in my possession indicates that it would more nearly approach £1,300.

Mr Holloway:

– For one delegate?

Mr BRUCE:
FLINDERS, VICTORIA · NAT; UAP from 1931

– No. If any delegate were sent, it would be necessary to provide for the full delegation, as in the past. In the circumstances, the Government feels that the expense is not warranted.

The honorable member referred to the subjects that will be dealt with at the next conference, the first being the abolition of fee-charging employment agencies. At this conference that subject will be discussed for the first time, and no finality will be reached until the second discussion at the next conference, when the matter is completed. The same remarks apply to the subject of invalidity, old-age, and widows and orphans insurance. The age of admission of children to employment in non-industrial occupations will be discussed for the second time, and the subject is of importance; but as it concerns the States, the Commonwealth Government has communicated with them about it, so that their views may be obtained and forwarded to the International Labour Office. The fourth item for discussion is the revision in part of the convention concerning the protection against accidents of workers employed in loading or unloading ships. The views of the Commonwealth Government on this matter have been communicated to the International Labour Office and will come before the conference. As two of the three main items of the agenda will be the subject of preliminary discussion only, the Government does not consider that it would be warranted in sending a delegation, at considerable expense, in the hope that Australia would be able to contribute any valuable assistance to the deliberations.

We are faced with the further fact that the delegates of both the employers and the employees to the last session of the International Labour Conference have reported that the International Labour Office is not carrying out the work hoped for, and that it is not desirable that Australia should continue to send delegates. A joint telegram from Mr. Eady and Mr. Taylor, despatched to the Government on the 17 th June, 1931, reads -

We have watched closely working conference, examined carefully results of past ten years’ work, and, closely scrutinized finance of this organization. We are of opinion that, particularly in view of foregoing and Australia’s financial position, the Government should take steps to bring about -

1 ) reduction of Australia’s contribution to International Labour Office; and

an immediate curtailment of general expenditure of this organization.

These delegates go on to deal with the achievements of the past, and their conclusion is that very little has been done, and that the number of conventions that have been subscribed to cannot be accepted as a measure of accomplishment by the International Labour Office. The report says -

An examination of the ratifications referred to, however, indicates that these mere figures are not indicative of any general change in world legislation. As an instance, I would point out that a number of Maritime Conventions which have been brought into effect have gained considerable support in being ratified by countries without a seaboard.

It is obvious that such ratification means nothing at all. The employers’ repre sentative gives his considered opinion in these terms: -

My considered opinion is that our country has little, ifanything, to gain from continued membership of the International Labour Office, or participation in the work of its annual conferences.

The employees’ representative, after dealing fully with the facts, states that unless we send a very large delegation, with substantially the same personnel each year, there is very little hope, with the existing organization of the International Labour Office, of achieving anything. He says that the whole business has got into the hands of certain groups in Europe.

It is dominated by them, and he was told by one representative that there was very little hope of the Australian Labour delegates taking a prominent part in the work of the conference unless they joined up with the Amsterdam group. His statement is as follows: -

In conclusion,I would say that I was extremely disappointed by the attitude of those in authority and by the whole procedure of the conference. The workers have nothing to give;the employers are determined not to give anything; and the Government delegates, in most cases, are merely the mouthpiece of whatever party may be in office in their respective country. The cost to the country of the Australian Delegation is very heavy, and since, in my opinion, we do not derive any benefit from the conference, as it is at present constituted, I would recommend that representation by Australia be stopped. This matter is for the Government to decide, and whatever decision they arrive at I am sure will be in the best interest of the people, but I feel that I would not he doing my duty to those who sent me to Geneva if I did not express plainly my thoughts on the matter.I think that before the International Labour Office will Accomplish anything beneficial to the workers, it will require complete re-organizntion along different lines.

In view of the report by the representatives, both of employers and employees, and of the great cost involved, the Government has quite definitely come to the conclusion that, in the circumstances, it would not be justified in sending a delegation. I can hold out little hope that that decision will be altered.

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

.- The Leader of the Opposition (Mr. Scullin) asked when the House would be given an opportunity of debat ing the tariff schedule. I am unable to state exactly when we shall he able to begin the discussion. The time will depend upon the progress we make with the legislation now before us, and upon when that legislation is returned to us from the Senate. It could not be next week, but wo hope to make a beginning before the Easter recess. We cannot guarantee that; but we undertake to give to the House an opportunity of debating the schedule as early as possible after Easter, if not before it.

Regarding the representations of the States on the subject of unemployment, there is no need for that matter to be delayed until May. The report of the special Transport Committee recently set up by the Premiers Conference will, I understand, be available next week, and the representatives of the States will desire to discuss the recommendations in that report much earlier than May. I anticipate that there will be a meeting of State Government representatives in the near future, when the subject of unemployment will he brought before them.

The right honorable member for Cowper (Dr. Earle Page) asked the Government to hasten its decision regarding the continued payment of a subsidy towards the cost of combating the spread of the cattle tick pest in New South Wales. This matter is giving the Government very serious concern, both as to the amount of money involved, and the effectiveness and efficiency of the methods employed. The admission by the right honorable -member regarding the continued spread of the pest indicates that there is at least some doubt as to the efficiency of the methods taken to check it.

Mr Martens:

– Are not the farmers in the affected areas antagonistic to the methods employed?

Mr LYONS:

– I cannot say ; the honorable member may know that. We are keeping the subject in mind, and I promise the honorable member that an early decision will he reached.

Question resolved in the affirmative.

House adjourned at 4.10 p.m.

Cite as: Australia, House of Representatives, Debates, 26 February 1932, viewed 22 October 2017, <http://historichansard.net/hofreps/1932/19320226_reps_13_133/>.