House of Representatives
27 April 1932

13^th Parliament · 1^st Session

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

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• FINANCIAL AGREEMENTS ENFORCEMENT BILL (NO. 2)
  • Second Reading
  • Third Reading
• ASSENT TO BILLS
• PAPERS
• QUESTION
  • WIRELESS LISTENERS’ LICENCES
• QUESTION
  • NEW GUINEA
• QUESTION
  • BISMUTH
• QUESTION
  • SALES TAX ON SALTED AND UNCOOKED MEATS
• QUESTION
  • CONSTRUCTION OP BROADCASTING STATIONS
• QUESTION
  • SEMI-OFFICIAL POSTMASTERS
• QUESTION
  • DUTY ON MANURES
• QUESTION
  • CENTRAL AUSTRALIAN GOLD PROSPECTING EXPEDITION
• QUESTION
  • UNIVERSITY SCHOLARSHIPS FOR CANBERRA
• MINISTERIAL CHANGES
• IMPERIAL ECONOMIC CONFERENCE AT OTTAWA
• ADJOURNMENT

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The House of Representatives on the 17th March, 1932, adjourned until a day and hour to he fixed by Mr. Speaker, and notified by him to each honorable member. The House met pursuant to such notification.

Mr. Speaker (Hon. G. H. Mackay) took the chair at 3 p.m., and read prayers.

page 10

FINANCIAL AGREEMENTS ENFORCEMENT BILL (NO. 2)

Suspension of Standing Orders.

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

– I move -

That somuch of the Standing Orders be suspended as would prevent a bill for an act to amend the Financial Agreements Enforcement Act from being introduced and passed through all its stages without delay.

A bill hasbeen prepared to carry one stage further the effort to recover from the State of New South Wales the interest which the Commonwealth Government has paid on behalf of that State.

Mr SCULLIN:
Yarra

.- As I see no necessity for the rush methods proposed by the Government, I intend to oppose the motion. Presumably the Government desires to take a further step along the line of enforcement adopted by this Parliamenta few weeks ago.

Mr Blakeley:

– The blundering line.

Mr SCULLIN:

– I am afraid that the proposed further step may prove to be a blunder. The Government is certainly making a number of very serious moves, and the least this Parliament has a right to expect is sufficient time to consider what the Government now proposes to do. Of course the Government is disappointed because it has not been able to do in two or three weeks what it boasted it would do to bring Mr. Lang to account; but as months have passed since the default on the part of New South Wales, a further day will not make much difference. For that reason I oppose the suspension of the Standing Orders, their purpose being to assure to honorable membersanopportunity to do their duty in a deliberate and considered way.

Dr EARLE PAGE:
Cowper

As a resident of New South Wales I am acutely aware of the anarchy prevailing in that State. The present state of affairs should not be allowed to continue for a day longer than can be avoided. Therefore, I shall support the motion for the suspension of the Standing Orders.

Mr JAMES:
Hunter

.- I protest against any suspension of the Standing Orders for the purpose of introducing amending legislation to inflict further suffering upon the people of New South Wales. The Government is affected more by “ Langitis “ than by any desire to promote the welfare of the people of that State. I am well aware of the hardship already suffered by them because of the enforcement legislation enacted by this Parliament. By seizing the revenues of the State, regardless of the suffering entailed, the Commonwealth Government has callously taken from innocentlittle children the necessaries of life.

Mr Lane:

– Little Jack Lang!

Mr JAMES:

– Ministerial supporters may laugh, but innocent children have suffered through the refusal of the banks to honour cheques drawn for motherhood endowment,

Mr SPEAKER:

– Order ! I cannot allow the honorable member to proceed as he is doing. The question before the House is the suspension of the Standing Orders for the purpose of intro- ducing certain amending legislation. That legislation is not yet under consideration, and its merits may not be discussed.

Mr JAMES:

– I am reminding the House that the measures already adopted for the hypothecation of the revenuesof the State of New South Wales have inflicted hardship which will probably be increased by the amending bill which the Government proposes to introduce. That is bound to augment the existing discontent in that State. I ask the Government to consider the interests of the people. If the desire of honorable members opposite is merely to remove Mr. Lang from office, the people have a right to be heard.

Mr Collins:

– Give them the right.

Mr JAMES:

– They are quite contented with Mr. Lang’s administration, which has shown a more humane consideration for the needs of the people than the Commonwealth Government has shown. It is obvious that the amending legislation is designed to facilitate the more ruthless seizure of State revenues, and the partyto which I belong will oppose it toothand nail.

Question - That the Standing Orders be suspended - put. The House divided. (Mr. Speaker-Hon. G. H. Mackay.) Ayes . . . . ..50

AYES: 0

NOES: 12

Majority . . . . 38

AYES

NOES

Motion (by Mr. Lyons) agreed to -

That he have leave to bring in a bill for an act to amend the Financial Agreements Enforcement Act 1932.

Bill brought up, and read a first time.

Second Reading

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

– I move -

That the bill be now read a second time.

The introduction of this measure is the taking of another step towards the recovery by the Commonwealth Government from the Government of New South Wales, of moneys that have been paid bythe Commonwealth on behalf of the State. The amounts due and payable by the State, which have not been paid, have been certified by the Commonwealth Auditor-General in accordance with the provisions of the Financial Agreements Enforcement Act, which was recently passed by this Parliament.

It is proposed to amend that act, and it is appropriate that I should preface my remarks on the bill with some reference to the legal and financial position which has arisen from the default of the Government of the State of New South Wales. Although the act was assented to on the 12th March last, no action to enforce it was taken by the Commonwealth Government until its validity had been upheld by the High Court. Immediately the act was assented to, the Government of New South Wales applied to the High Court for an injunction to prevent its operation, and the resultant proceedings before that tribunal were a test of the validity of our legislation. The High Court, on the 6th

April, held that Part II. of the act was valid. The Government of New South Wales then applied for leave to appeal to the Privy Council, but its application was refused by the High Court. It subsequently took action to prevent the trading banks from complying with section 15 of the act. Again it met with failure. The validity of the act has been exhaustively tested, and the legislation of this Parliament has been upheld by ‘the highest tribunal in the land, notwithstanding the fears expressed by some honorable members of this and another place that it might be held to be unconstitutional.

On the loth March last., the AuditorGeneral furnished a certificate which disclosed that the amount in respect of which the Government, of New South Wales had defaulted at that date was £1,172,427, and that, after allowing for set-offs on account of moneys due by the Commonwealth to the State of New South Wales the not amount of the default of that State was then £924,082.

Mr Scullin:

– Has the court declared that to be the amount in default?

Mr LYONS:

– No ; that is the amount that has been certified to by the AuditorGeneral, and the law has been complied with by the issuing of his certificate.

On the 7th April a proclamation was issued prescribing that income tax, not including unemployment relief tax, which was definitely excluded, should he payable to the Commonwealth Treasurer. On the same date public notices were issued explaining how these payments were to be made. On the 9th April a second certificate was given by the Auditor-General which, taken in conjunction with the first, showed that, after allowing, for all set-offs, the net amount due to the Commonwealth by New South Wales in respect of its default was approximately £2,000,000.

On the 11th April a proclamation was issued prescribing that certain other State taxation should be paid to the Commonwealth Treasurer. This taxation included betting, race-course admission, totalisator and entertainment taxes. Demands were also made on the banks under section 15 of the act to furnish information as to the moneys standing to the credit of the New South Wales

Government, and to pay such moneys to the Commonwealth Bank.

Mr James:

– Motherhood endowment moneys !

Mr LYONS:

– If the money in the bank, was the only money that Mr. Lang had available for motherhood endowment payments, he had not enough to meet those payments for half an hour. A demand was also made upon the trading banks to pay within two months to the Commonwealth Bank any moneys that they might subsequently receive on account of the New South Wales Government.

When the Financial Agreement Enforcement Bill was under consideration in this House the New South Wales Government had defaulted only in respect of external interest payments; but since then it has defaulted also in regard to internal interest payments.

Mr James:

– The Commonwealth Government is forcing it to do so.

Mr LYONS:

– It is not forcing it to do so ; it is merely endeavouring to recover amounts which the Commonwealth has already paid on behalf of New South Wales. The latest default by New South Wales occurred in respect of a payment due on the loth April. At present New South Wales is in default in interest and exchange by £2,730,541. Against this amount is to be set £505,341, a sum made up mainly of contributions towards interest -on the debts of New South Wales due by the Commonwealth under the Financial . Agreement. The net amount of the State’s default is therefore £2,225,200.

Regulations have been made recently to give the Commonwealth Government power to obtain taxation documents relating to Commonwealth and State assessments in New South Wales which had been impounded. The impounding of these documents has made it impossible, for the time being, to issue assessment notices, and this is creating additional difficulties for the Commonwealth. Since “those regulations were drawn up no further action has been taken in pursuance of the regulations.

Although the validity of the Financial Agreements Enforcement Act has been upheld, the Premier of New South Wales and his Government have continued to default, and to resist the efforts of the Commonwealth Government to recover from Stale revenues the amount which the Commonwealth has paid on behalf of New South Wales in respect of its default. If the State continues to default in its internal and external interest payments until the 30th June, the gross amount of its default will be £7,200,000. Against this amount the Commonwealth Government will be able to offset about £1,500,000, being moneys due by the Commonwealth to New South Wales. This will leave the net amount of the default by New South Wales at the 30th June at £5,700,000 which must be recovered under the Financial Agreements Enforcement Act from the State revenues.

The action of the New South Wales Government in continuing to default is a definite menace to the financial stability and solvency, not only of New South Wales, but of every State in the Commonwealth, and is tending unceasingly to damage the reputation and credit not only of the States, but also of the Commonwealth. If the State Government is allowed to continue its present course, very grave difficulties lie ahead of the Commonwealth Government, and of all the State Governments. The actions of Mr. Lang and his Government are also destroying the credit of this country overseas at a time when it is essential that we should maintain our credit. In the immediate future we have to meet a conversion loan of £18,000,000 on account of the New South Wales Government, but its conduct is making an already difficult task infinitely more difficult.

The steps which the Commonwealth Government have taken in this matter have been rendered necessary by the sheer dishonesty of the New South Wales Government. The Commonwealth Government has not sought to recover one penny which does not belong to it, and which it has not already paid on account of New South Wales. Even if the New South Wales Government insists on continuing its dishonest conduct it is essentialthat the Commonwealth Government shall do its best tt> save the reputation of Australia in the eyes of the world. We are not seeking to make a farthing of profit out of these transactions; we are simply seeking to protect the good name of the

Commonwealth. That has been the impelling force behind every move which we have taken.

If the. New South Wales Government is allowed to continue to default up to and beyond the end of June the Commonwealth Government will only be able to meet its indebtedness -with the help of the Commonwealth Bank. But the position is worse than that. If the New South Wales Government continues on its present course, the time is not far distant when all the other State Governments and the Commonwealth Government will also have to default. It is because we are concerned about the position of. the other States and also about the position of the people of New South Wales - because the citizens of New South Wales are also citizens of Australia, and Commonwealth electors and taxpayers - that we are so much concerned about maintaining our good name and reputation in Australia, and in other parts of the world. If, as the honorable member for Hunter (Mr. James) has said, the people of New South Wales are satisfied with the conduct of Mr. Lang and his Government, why are not that gentleman and his followers prepared to face the issue immediately on the platforms of this country?

The Commonwealth Government firmly believes that the people of New South Wales are overwhelmingly behind the action it has taken. If honorable members who support the Lang Government feel that the people of New South Wales are behind its policy, why all this delay in seeking the verdict’ of the electors? Every month that that verdict is delayed will increase the difficulties of the people of New South Wales, aud, indeed, of the people of the whole Commonwealth. It is for that reason that the Commonwealth Government has made these payments on behalf of the Government of New South Wales; but Ministers feel that they owe it to the taxpayers of the Commonwealth to recover those moneys from the State. The Commonwealth Government has become liable to the banks from which it has obtained the money to make these payments; it has accepted that liability in the name of the taxpayers of Australia. In this matter, the Commonwealth Government represents the taxpayers.

A sense of duty to the taxpayers of the Commonwealth has actuated the Government in proceeding to recover for them the money that it has expended on behalf of the taxpayers of one State. Having taken the first step, the Government, in this measure, now proceeds to take another step; and I say, advisedly, after a full consideration of every aspect of the question, that it will see this matter through until finality has been reached. This legislation will make it possible for the Commonwealth Government to do certain things which it has set out to do; it will also remove certain doubts which have arisen regarding the existing legislation.

Under section 8 of the principal act, no action can be commenced by a State against persons who make payments to the Commonwealth in accordance with the terms of that act; but it is possible that the State may impose fines or other penalties upon them. Clause 2, therefore, inserts a provision prohibiting the imposition of any fine, penalty, forfeiture, or other disability upon any person by reason of his having made payments to the Commonwealth of moneys which, but for the Commonwealth legislation, would have been payable t’o -the State, or by reason of the fact that he has not. paid the amount in question to the State.

Clause 3 inserts a1 new section 8a relating to cases in which the amounts payable under a State law for the issue of a licence certificate, or other document are paid to the Commonwealth in accordance with the terms of the Commonwealth act. In such cases, provided that all the other conditions imposed by the State law have been complied with, the State officer or employee whose duty it would he in the ordinary course of business to issue any such document, is required to issue it to the person concerned, upon production of a receipt showing that the correct amount has been paid to the Commonwealth. So far, no attempt’ has been made to collect revenue of this kind, because it has been feared that the State might refuse to issue a licence unless it received the money. The clause further provides that failure on the part of a State officer or employee to comply with the provisions of this section will render him liable to prosecu- tion in terms of section 21 of the principal act.

Section 10 of the principal act provides that moneys which, but for the Commonwealth act, would be payable to the State, must not be paid to any person other than the Treasurer or an authorized person. Some classes of State revenue which are, or may be, subject to attachment under the act, are of such a nature that it may be deemed advisable to allow State officers to continue to collect them and to deal with them as directed by the Treasurer, with the object of such revenues ultimately reaching the Commonwealth.

Clause 4 amends section 10 to provide that the Governor-General may issue a proclamation declaring that a particular class of specified revenue is of such a nature that the payment of any moneys included in that class shall be made to an officer or an employee of the State, and that the officer or employee shall deal with such money as directed by the Treasurer. Upon the issue of such a proclamation, any officer or employee of the State who receives payments of the kind mentioned will be required to deal with them as directed by the Treasurer, and any failure on his part to do so will be a contravention of section 21 of the principal act.

A new section 13a, which will be inserted in the principal act by clause 5, provides that after a resolution has been passed by both Houses of the Parliament, each House may, a’t any time, and from time to time, pass a further resolution specifying additional classes of State revenue to which sections 7 to 13 of the Commonwealth act shall apply. When such further resolution has been passed, the classes of revenue specified therein will be deemed to have been specified in the earlier resolution. At present, it is doubtful whether Parliament could, by resolution, specify any new class of revenue to be attached, even though the certificate of the Auditor-General was for an amount sufficient to cover the additional revenue sought to be attached, unless a further certificate were given by the Auditor-General. The new section will remove that doubt.

The object of clause 6 is twofold ; first, it alters the form of notice to be given to the banks under section 15 of the prin- cipal act; and, secondly, it empowers the Treasurer to release moneys which have keen paid to him under that section but which are, in substance, trust moneys, not moneys the property of the State. Fur.ther information about this can be given in committee.

In conclusion, I repeat that the Commonwealth Government is determined to follow the course which it proposed when introducing the Financial Agreements Enforcement Bii.1. We are not influenced by political or party motives; but are acting in the interests of all sections of the Australian community. We are resolved to uphold the good name of Australia, and its reputation for integrity. This nation has been tried by difficulties and depressions in the past, and it has always held its head high in the severest tests. Only to-day, for the first time in our history, do our people feel tempted to hang their heads in shame, because of the action, not of a State, but of one particular Government ; the action of one man, who has dominated the politics of his State and the government over which he presides. This Commonwealth Government is determined to uphold the reputation of Australia.

Mr James:

– It is a pity that the Prime Minister does not display as much interest in the welfare of the people of the Commonwealth as Mr. Lang has shown in the weill-being of the citizens of New South Wales. The Prime Minister’s interest lies in people overseas.

Mr LYONS:

– If the State of New South Wales - I mean the Government of New South Wales, and I apologize to the people of that State for associating them with its present Government - is permitted to .continue its present dishonest course, , e,von greater -injury will befall the workers - for whom I know the honorable member for Hunter (Mr. James) to be concerned - than has come to them in recent years, and that is saying a great deal. Injury will come, not only to the workers of New South Wales, but also, unfortunately, .to those in remote parts of Australia who assisted in no .degree in the return to power of the present G.Orvernment of New South Wales. No country which loses its reputation for integrity and honesty .can expect to avoid the evils which follow repudiation of the kind for which the New South Wales Government stands. Therefore, my Government is determined to proceed on its present course, in order that it may eventually recover the amount due to” the Commonwealth, and convince the Government of New South Wales that continuance along the path which it has followed up to the present time would inevitably bring destruction upon the people of New South Wales and of the Commonwealth as a whole.

I appeal to honorable members generally to assist the Government. We have passed legislation which the High Court has declared to be valid, and since we are operating under the law of the land, any government that obstructs the efforts df the Commonwealth Government to operate under that legislation is acting in contravention of the law. I urge honorable members to forget party interests, and to act in this matter with a view to promoting the interests of the people of Australia generally, by assisting the Government to carry out the declared policy of this Parliament.

Mr SCULLIN:
Yarra

.- The Government has not given honorable members a reasonable opportunity to appreciate what its next step really means. I have listened attentively to the Prime Minister’s speech, and I have tried to realize the full significance of. the proposed amending legislation ; but I confess that I have been unable to do .that. Probably the Parliament does no.t know the true significance of the whole of these proceedings. I shall not repeat what I said on a former occasion, nor do I consider it necessary to” refer in detail to the record of the Government that I led, a record which shows that we were as anxious as any other Ministry to maintain the credit of this country. But I cannot regard what has taken place in. New South Wales without feelings of grave apprehension. I. again utter the warning that I gave on a previous occasion. I believe that this matter has been badly handled from the beginning. I know that many sneers have been cast at my action as Prime Minister in dealing with the difficult situation that had’ arisen in New South Wales last year. It must *be recognized that a tremendously difficult problem is presented when a

Government with powers practically equal to those of any other government in Australia strikes out on a course of its own, and gets out of step with those other governments. When this took place early in 1931, the Government and the party that I led, with one or two exceptions, opposed the policy then laid down by Mr. Lang, and we have never swerved from the attitude we then took up. My party is in the same position now as it was then.

Mr White:

– Though sadly depleted !

Mr SCULLIN:

– Yes, but not dishonoured. It is not a question of what our views are regarding a certain alleged plan. It is not now a question of our antipathy to a declared policy of repudiation. That is not the issue between the Opposition and the Government. That matter may be raised by another section in this House, but not by my party. The issue is one as to methods, and I still disapprove of the methods adopted by the present Government. The feeling has been created in this country that two governments with great and equal powers, each commanding powers of force, if necessary, are at loggerheads, and there is sound reason for the belief that the feud is actuated on both sides by bitter political hatred. It is a great pity that a clash in administration between two governments should be caused in this way. Both governments have been flamboyant in utterance and precipitate in their actions. I look with apprehension on what is taking place in New South Wales. Money is not everything. That financial obligations should be met and that interest which is due should be paid by the Government of a State is not our sole concern at this moment. I do not excuse that Government for failing to meet its obligations, and passing on its responsibilities to other Australian governments. But over 400,000 men in this community are out of work, and many of them on the verge of starvation. We are living in an age when the governments of practically every country regard it as their first responsibility to refrain from doing anything that may create disturbances and precipitate disaster. We have been, particularly fortunate in Australia in avoiding trouble of this kind, and I pay tribute to Australia’s manhood, aye, and to Aus tralia’s womanhood, for the fact that we have not had iu Australia disturbances such as have occurred in New Zealand, and in other parts of the world.

Mr GREGORY:
SWAN, WESTERN AUSTRALIA

– Matters have been drifting towards trouble for a long time.

Mr SCULLIN:

– That is true, and I do not wish to utter a word to cause needless alarm or to create or accentuate any feeling of disquiet. I have unbounded faith in the good sense of the Australian people. But I do not like what is happening in New South Wales. The responsibility rests upon all our Australian governments, and particularly upon the members of this Government and of this Parliament to prevent’ precipitate action. I know that Ministers, having taken one step, think that they must take another, and I cannot help feeling that their action iu this matter arises very largely from the wild promises made by candidates supporting the present Government, who said that if returned they would get rid of the Lang Government in a few weeks after the election. Had it not been for such utterances, this matter, I feel confident, would have been approached in a better way, and had the Commonwealth Government iu the early stages adopted a more reasonable attitude, it would probably have obtained more money to meet the obligations which it has incurred on behalf of the States than it is likely to get by proceeding along the lines proposed.

The Prime Minister has told us that his government has not obtained sufficient from the banks in New South Wales to pay child endowment in that State for one hour. .

Mr Lyons:

– Not for half an hour.

Mr SCULLIN:

– I do not know what the Government has received in the form of income taxation; but I suggest that the amount has been small. The Prime Minister will remember that some time ago I warned him that in endeavouring to collect an insignificant amount in the form of State income taxation he might be unable to collect Commonwealth taxation in New South Wales. That position has now arisen. I have not the slightest doubt that, ultimately the State of New South Wales will honour its obligations to the Commonwealth.

Mr Stewart:

– After the next election in New South Wales.

Mr SCULLIN:

– I do riot say when, but ultimately the Government of New South Wales will honour its obligations. I have, however, very grave doubt whether the Commonwealth, will collect revenue from New South Wales as speedily as has been suggested.

A good deal of political capital was made of the fact that five months elapsed between the Lang Government’s first default last year, and the time when it agreed to honour its obligations as other governments were doing. As I pointed out at the time, for two months of that period the representatives of the Commonwealth and the States were sitting in conference, trying to evolve a scheme to rehabilitate Australia’s finances, and during which lime no definite action could be taken. The alleged delay by the previous Government, which covered a period of only three months, does not now seem so big, because the people see that three months have elapsed since the last default occurred, while this Government has been in office, and that the present drastic methods have not proved so expeditious ais we were led to believe they would be, although they certainly have been very provocative. The Commonwealth Government has notified the State Government of New South Wales that on Monday next it will approach the High Court for a ruling that this money is owing. Up to the present, the Commonwealth Government has no declaration from a court of law that the money is owing. The Prime Minister (Mr. Lyons), in reciting the legal position, said that the High Court has upheld the validity of the law, which this measure is to amend. That is true. Yet there is some justification for the attitude of those honorable members who doubted the validity of the legislation in that two eminent judges of the High Court held that the law is invalid.

Mr James:

– Two of the best.

Mr SCULLIN:

– I am not discriminating between the qualifications of the members of the High Court bench. I believe that those who dissented from the majority decision of the High Court possess qualifications equal to the others; but it is not for us to canvass those quali fications. The fact that a unanimous decision was not given supports the contention of those who expressed doubt, and shows that their opinions were not without foundation. With other honorable members on this side of the chamber, I endeavoured, on a previous occasion, to set out the position. I said that before liny action was taken the Government should have had a judgment of the High Court declaring that the money was owing. It is insufficient for any officer to declare that? in his opinion, a certain sum of money is due and payable ; a properly constituted legal tribunal should declare that such a sum is owing. Action has only recently been taken to obtain a judgment of the High Court, and in the meantime attempts have been made to attach the revenue of New South Wales. It is only six weeks ago - about the middle of March - since the Government brought down legislation under which it proposed to attach certain revenues of New South Wales aggregating £G,000,000. To date, New South Wales has defaulted to the extent of something over £2,000,000. Already the Government has found it necessary to submit this amending measure in order to remove certain doubts, and to take further steps, although we were previously told that everything necessary had been done. We have been informed that the legislation previously passed has been held by the High Court to be valid; but before anything practical has been done in the direction of collecting revenues, new legislation is being introduced. The methods of this Government are supposed to be superior to those of the Government of which I was the leader. We were told that under its policy it would recover, in a few weeks, money which the previous Government could not obtain. Three months have elapsed since the New South Wales Government last defaulted, and how much has this Government recovered ? Very little.

Mr Maxwell:

– What does the right honorable member suggest?

Mr SCULLIN:

– I have stated on previous occasions the policy which I think the Government should have adopted. My suggestions met with sneers from honorable members opposite. It was said that I yielded to the arguments of thos, who said that there were people iu New South Wales who would suffer absolute starvation owing to the non-payment of the sustenance, and other forms of relief. Last June, the Loan Council agreed to the payment of £500,000 to New South Wales, but that council did not agree to treasury-bills covering that amount being issued until the Premier of that State agreed to recognize his responsibilities, and to honour his obligations for interest and other commitments in common with other State Governments. When the Premier of New South Wales, as a member of .the Loan Council, agreed with the representatives of the other States to assist in the financial rehabilitation of Australia, we accepted his undertaking as bona fide. We were, however, criticized for treating the proposal with kid gloves, merely because we had some regard for those who were on the verge of starvation. Here is a Government that talks about using the iron hand; yet it was itself forced - and I .am not complaining of its action - notwithstanding the default of New South Wales, and the fact that Commonwealth laws were defied by the Government of that State, to recognize the needs of the unemployed in New South Wales, and to .provide for their sustenance £600,000 out of money which willi shortly be raised. It was easy for honorable members opposite <to sneer at my Government, and to say that we were supporting the Lang plan because we looked beyond the plan, and the framers of the plan, to the needs of the people of New South Wales who were suffering. The present Commonwealth Government has now been forced into the same position as any other government would be iu.. It is necessary to look beyond whatever .government is in power in New South Wales for the moment, and as a Parliament we must seek to do what is best in the interests of the people of Australia as a whole, no matter in what State they happen to live. I believe that the action of the present Federal Government, ‘together with the deplorable stand taken by the New South Wales Government, will inflict grave injury on the credit of the country, and great suffering on the people of New South Wales.

Dr EARLE PAGE:
Cowper

.- I do not intend .to make any excuses for supporting the bill now before tis. The bill contains three main provisions, with all of which I am in agreement. Clause 2 states -

No fine, penalties, forfeiture or other dis ability shall be imposed upon thu person by reason of the payment to the Treasurer or authorized person in accordance with this net or of the non-payment of the amount in question to the Statu.

A further necessary amendment is designed to exempt from attachment trust funds that happen to be in the possession of banks, and standing in the name of the State Government. I am pleased that this amendment is being made without delay, because the act as it stood was occasioning concern to many public servants and others in New South Wales. Everybody will now know that there is nothing to fear in respect of such funds. The third principal amendment provides that the Commonwealth Government shall have power to attach any State funds or revenues which may be required to meet the just claims of the Commonwealth against New South Wales.

The Leader’ of the Opposition (Mr. Scullin) said that on Monday next the Commonwealth would proceed to the High Court for a declaration as to whether this money claimed is really owing by New South Wales. Surely, however, everybody in Australia knows what the position is in regard to this money. They know that the Commonwealth has -already paid the money in satisfaction of debts owed by New South Wales. There is not the slightest doubt as to the verdict which the High Court will give, and that is why Parliament gave the Government permission to go forward on the certificate of the Auditor-General. The Commonwealth is- merely seeking to recover the money which was paid to overseas bondholders on behalf of New South Wales. Mr. Lang himself admitted that New South Wales owed this money when, in February last, he said that he was prepared to pay a portion of it. He did not at that time dispute that the whole amount was owing. If the Commonwealth Government now finds it necessary to attach further revenues in or.der to recoup itself for what it has already paid away, Parliament .should give it that power as soon as possible. Next year New South Wales will be called upon to pay £6,500,000 in Australia, and £8,5:00,000 overseas. If sue defaults in respect to the whole of that amount, and the Commonwealth takes no measures to secure the money from New South Wales, there will be a general default throughout the whole of Australia, because the Commonwealth will not otherwise be able to find £15,000,000 outside of New South Wales revenues. Mr. Lang has said that such a default is inevitable, and he is certainly doing his best to bring it about. He has already befouled the good name of New South Wales, and he is now trying to drag down with it the credit of Australia. The Country party will stand behind the Government in any action it takes to keep the credit of Australia high, and its reputation clean.

It will be remembered that, when the original enforcement hill was before the House, I suggested that the schedule should enumerate all New South Wales revenues, so that there might be no delay in recovering the money due if obstacles should be placed in the way by the Government of New South Wales. An attempt is now being made by the Government of New South Wales to make it appear that all the evils and misfortunes which have fallen upon the people of that State are due to the action of the Commonwealth Government in trying to collect the money due to it. Such a claim is absurd. Most of the misfortunes of New South Wales may be attributed to the fact that the Government of that State will not march in step with the other governments of the Commonwealth, which are endeavouring to honour their just obligations. It is necessary to live in New South Wales to understand the position which has developed there. A condition amounting almost to anarchy obtains. The banking institutions, which were established under State law, cannot now carry on ordinary financial activities for the Government. We find ourselves back under primitive conditions. The State Government is sending out men with leather bags full of money, accompanied by armed escorts, to pay the ordinary services in various parts of the State. Many public servants are not receiving payment at all. Surely there is no reason why the Government should not be able to pay for all ordinary services, including child endowment, when it has defaulted in respect of millions of pounds of overseas interest and is now defaulting in respect of millions of pounds of interest due to Australian investors. The New South Wales Government ought to be able to act most generously in regard to all the activities it ordinarily sustains, seeing that it has ceased to pay interest on the money it owes. It cannot blame the Commonwealth Government for its financial embarrassment; the blame rests entirely on its own head. Not only is the action of the Government of New South Wales bringing about a condition of anarchy - a sort of creeping paralysis of industrial and economic life in that State - but it is delaying the rehabilitation of Australia. Anything which the Commonwealth Government can do to bring to a speedy end the present regime in New South Wales will have the support of the Country party.

Mr. Lang has said that he desires to bring about a reduction of interest, especially on debts owed overseas. What, I ask, is the main obstacle in the way of securing a reduction of overseas interest? It is the repudiation by Mr. Lang himself of his overseas interest obligations, his defiance of the policy of the Loan Council, and his departure from the standards of honesty that have been observed in this country for so many years. How can we place our New York and London stocks on anything like a decent basis that would permit a consolidation or conversion at cheaper rates while one State, which represents two-fifths of the population of the Commonwealth, and owes nearly half of the total State indebtedness, refuses to pay interest on -the money that it has borrowed to build what were described in the loan prospectuses as reproductive works? How can we fund our short-term indebtedness and get rid of that nightmare of the various governments of Australia, if the policy and the actions of Mr. Lang and his government render impossible any improvement of the position of our stocks in the money markets of the world? I am satisfied that Mr. Lang, by his actions, is preventing that restoration of confidence which is absolutely necessary if we are to effect a big consolidation of our overseas debts that carry a high rate of interest. He is making it impossible for us even to initiate negotiations to that end. I am confident that, had there been no talk of repudiation by the Government of New South Wales, had it stood up to its obligations and faced the crisis in a courageous and manly fashion, as other governments did, by now our interest rate would have been reduced by 1 per cent, or li per cent on that portion of our debt which carries a high rate of interest. I was in favour of such a reduction, and advocated it in this House long before Mr. Lang raised the question. He and his party wish to take all the credit for whatever reduction of interest has been brought about within Australia. All that he did was to give effect to -the decision of the Premiers of the States, in conference assembled, last year. Now he says, “It is our policy; we thought of it first.” What he and his party thought of first was a refusal to pay anything. All. other governments in Australia were honestly prepared to deal with the matter on the basis of negotiation, and have done so. By its alliance with them, Mr. Lang’s i Government has benefited from that policy. I am confident that our overseas indebtedness can be handled in a similar way if we can get rid of this cancer in New South Wales which at the present time is sucking the lifeblood of Australia. The policy and the action’s of Mr. Lang are definitely preventing the rehabilitation of Australia, and particularly the absorption of the unemployed. The first essential to that absorption is, not a governmental loan for the carrying out of some temporary work, but the restoration of confidence in the minds of private investors and private industry generally. At the present time there is operating in New South Wales the policy of terrorizing private industry by confiscatory taxation. The threat has been made that there will be a capital levy, a tax of 5s. in the £l for the relief of unemployment, and other measures of a similar character. Already those threats have resulted in the transfer of capital from New South Wales to Victoria to the extent of many’ millions of pounds, and the withdrawal of many more millions from active participation in business and industry because investors dare not use the money for outside enterprises. Any action that may brins’ to an early end this condition of affairs deserves well of Australia, and should receive the support of every member of this Parliament. I feel sure that it will have the support of every rightthinking man and woman in Australia, irrespective of their political opinions.

The question arises, how can we bring this matter to an end ; what means are at our disposal ? For almost a year, in New South Wales, there has been the expectation that Mr. Lang would go so far beyond the bounds of decency and so transgress the law, that the representative of His Majesty in that State would be forced to send him to the country.

Nearly a year ago a petition containing 400,000 signatures made that request. At the present time, the people of .New South. Wales are hoping that he will overstep the mark in such a way that cognizance of his action must be taken by the Governor,, and that they will thus be given an opportunity to bring his regime to an end, and so enable the whole of Australia to get on with its job.

I hope that there will be an early election in New South Wales. I have not the slightest doubt what the result will be. I realize that all sorts of red herrings will be drawn across the trail. The Federal and other governments will be charged with cruelty and many other crimes against this particular State. But what is the use of talking about a lowering of the standard of living by the reduction of wages when hundreds of thousands of our people are receiving no wages at all! Surely our first concern is to restore our people to employment! That can be done if all parties in this country will combine, as they did during the war, and say “ We are willing to suffer a certain degree of hardship for a year or two if we can win to a future that will be worth while. We have had our spree; we have been extravagant; now we must pay the price.” We shall never regain prosperity by resorting to the monetary tricks or the criminal devices that have been suggested; that is generally recognized. If a general election in New South Wales is to be indefinitely postponed, the Commonwealth Government should take every step that is open to it to end the existing regime.

Various country movements have made known their views; they have pointed out that, if eighteen Or 21 months are to elapse before Mr. Lang faces the constituencies, they cannot see how New South “Wales can. continue to exist. This Government has been asked by the country movements to endeavour to bring about a change in the Constitution that will permit the people themselves to have some say immediately in the division of that State; to pull the horse from under the Government if they cannot pull the Government off the horse. 1 am assured by the Government that earnest consideration is being given to the question of endeavouring to have incorporated in the Constitution those provisions to facilitate the division of existing States without reference to the State Parliaments but on the initiative of the people alone, which the Commission on the Constitution, over which Sir John Peden presided, suggested would be supported by every party in Australia. These provisions received the unanimous support of the National party, Country party, and Labour party members of that commission. If that were done, the people of New South Wales would be in a position to deal with the Parliament of that State at the earliest possible moment and end this present regime

Last year, when the question of repudiation was first raised in this House by the action of the Lang Government, it will be remembered that I moved the adjournment of the House. I then urged that, the sooner we removed Mr. Lang from the position of being the only repudiator in Australia, the better it would be for Australia as a whole, and the quicker we would get on with Australia’s, reconstruction. The proposal then put forward received the support of the honorable member for Kooyong (Mr. Latham), that the British Parliament itself should be asked to subdivide the State of New South Wales, and thus place “lie honest portions of the State in a position to stand up to their obligations. If New South Wales still refuses to pull its weight with the other States it will not be possible for Australia to carry on for another eighteen months. The Attorney-General (Mr. Latham), then Deputy Leader of the Opposition, said -

Suppose a particular area of New South Wales, containing a population greater than that of some of the existing States, to be practically unanimous in its desire to form itself into a new State, and suppose that practically unanimous desire to arise from a definite infringement of the law by the Government of the State; and suppose the Parliament representing the whole of Australia to be also practically unanimous in its wish to give effect to the desire of the area concerned, then under those extraordinary aud exceptional circumstances, it would bc certainly proper to consider the advisability of applying to the Imperial Government to exorcise its supreme legislative authority. At the 1930 Imperial Conference it was expressly agreed by the governments of all the dominions and the Government of Britain that Imperial legislation might properly be passed relating to any dominion at the request and with the consent of that dominion. That is a useful reserve power, and should, I believe, continue to exist.

In normal circumstances no one would dream of suggesting the utilization of such a power, and it is only because of the present very exceptional circumstances that I suggest that the Government should at least consider the desirability of taking what I admit to be an extraordinary action to deal with an extraordinary situation. … I suggest that the Government should seriously consider this proposal.

Those remarks have infinitely more weight now, because the position in New South Wales has since become indescribably worse. The Government of that State has not only adopted a defiant attitude, but has also repudiated all its debts. It has no real money, nor facilities for handling money, with, which to ‘finance the ordinary activities of New South Wales, and it is only a matter of time” when the Commonwealth will have to take action to carry out the social, and, possibly, the essential services of that State, otherwise the people will starve because of the failure of the Lang Government to do so. The Lang Government is now trying to prevent any taxation, including State income taxation, from being collected, and, as a result, the prospective deficit of New South Wales is likely to be enormously increased. How is this National Parliament to deal with the position % We have a tremendous responsibility placed upon us. The

Government of New South. Wales is absolutely blocking any attempt to commence at an early date the rehabilitation of Australia. I am prepared to support - and I am speaking for the members of the party in this corner - any action that the Commonwealth Government takes to bring to an end this dreadful position, which no one ever contemplated would exist between the Commonwealth and the State of New South Wales.

Mr JAMES:
Hunter

– I am opposed to this measure, which, I claim, has been introduced by the Government at the behest of the capitalists, regardless altogether of the suffering that will be brought about as a result of its passage. This legislation is not likely to relieve the people of this country. The Prime Minister (Mr. Lyons) has stated that New South Wales will have defaulted by the end of June to the extent of approximately £5,000,000 in respect of its interest obligations to overseas bondholders.

Mr Paterson:

– That amount covers both internal and external obligations.

Mr JAMES:

– I suppose that the amount includes exchange at the rate of approximately 25 per cent., although the Prime Minister did not make that clear in his statement. If the amount owing by New South Wales were recovered tomorrow, no relief would be. afforded this country, because itrepresetns interest on our overseas debt incurred directly and indirectly on account of the war.

Mr Paterson:

– Not one penny of these interest obligations relates to the war.

Mr JAMES:

– We have had no concessions from Great Britain for the services which we rendered to that country when it engaged in a war in the making of which Australia had no voice. During the war this country sent overseas 300,000 men of whom 62,000 paid the supreme sacrifice, and 72,000 were crippled. Our participation in the war cost us £744,000,000. Great Britain gave concessions to Italy andFrance by writing down their debts by approximately 62 per cent., and received concessions from the United States of America in respect of her indebtedness to that country during the war. Great Britain received from the United States of America money at 31/2 per cent., a portion of which was re-loaned to Australia at 5 per cent.

Mr Paterson:

– That is not so. Great Britain charged us in respect of our war loan, a rate of interest lower than that at which money was borrowed from the United States of America. At present we are being charged no interest at all.

Mr JAMES:

– That is as a result of the operation of the Hoover moratorium. In addition, Australia during the war sold its wool and wheat to Great Britain at a price considerably less than the prevailing rate. I believe that wheat which we sold to Great Britain at 4s. 6d. a bushel was resold to allied nations at 9s. a bushel. Australia did not participate in the rake-off.

Mr Holloway:

– We lost millions of pounds.

Mr JAMES:

– As the honorable member for Melbourne Ports (Mr. Holloway) has said, we lost millions of pounds in respect of the sale of our wheat during the war. To-day, although we are staggering under a colossal debt, GreatBritain will not assist us to the extent to which it assisted some of its allies, and to the extent to which it was assisted by the United States of America. We havehad no concessions whatever from the Motherland. To-day there are in this country many people who are demanding that the Commonwealth Government stand up for Australia by putting its case clearly and forcibly before the overseas bondholders. The claim by the right honorable member for Cowper (Dr. Earle Page) that he was one of the first to advocate negotiation with the bondholders overseas for a reduction of the interest rate, is most humorous. It is Mr. Lang who has that distinction. Undoubtedly many people have been converted to his view, and I am pleased that the Leader of the Country party (Dr. Earle Page) is now supporting at least a portion of the Langplan. The right honorable member declared also that a state of anarchy exists in New South Wales. Such a condition does not exist yet, but apparently the Commonwealth Government desires to create it. The warning against the danger of anarchy and revolution comes strangely from the right honorable member for Cowper. He is an advocate of economy by the subdivision of New South Wales into smaller States, and the creation of additional parliaments, and I recollect that when speaking at a New States convention in Maitland last year, he said that the rural people were determined to secure the right of selfdetermination, and he hoped that the Commonwealth Government had not forgotten the lesson taught by the American War of Independence. Behind those remarks was a veiled threat of revolution if the Commonwealth Government did not pay heed to the demands of the new-staters.

The Prime Minister (Mr. Lyons) characterized Mr. Lang as a dictator. He is not a dictator. He is merely expressing the will of the people of New South Wales, and, indeed, of Australia, and conserving their interests, when he declares that those who through no fault of their own are unemployed and in need of the necessaries of life should be fed before interest is paid to overseas bondholders. That humane policy has wrongly been called repudiation. Mr. Lang does not desire to repudiate; on the contrary, he instructed Mr. Willis, the Agent-General for New South Wales, to negotiate in London for the suspension of interest payments. Mr. Bavin, formerly Leader of the Opposition in the New South Wales Legislative Assembly, said that Mr. Lang had no right to propose a negotiation for a reduction of the overseas interest debt”, because nothing would absolve him from that liability but a direct resolution of the Loan Council.

We have to take a sane view of this matter. The people of Australia are honest, and desire to pay their way; so does Mr. Lang. But our first obligation is to those who cannot get work or the wherewithal to buy the necessaries of life for their women and children. The Commonwealth Government, however, has determined to seize the revenues of the State, and send them overseas for the benefit of wealthy bondholders. The interest of the money lenders - the modern representatives of the usurers whom the lowly Nazarene banished from the temple - must be paid though the poor starve! This is nothing more nor less than the worship of Mammon; it is not Christianity. The Commonwealth Government is prepared cal lously to take from little children and from women in delicate health - prospective mothers of Australian citizens - the wherewithal to buy food and clothing. Yet some honorable members who support that policy have the audacity to attend church services, and pretend to be Christians. There is no Christianity in giving to the wealthy at the expense of the poor.

With much that was said by the Leader of the Opposition (Mr. Scullin) against this bill, I agree. He referred to Mr. Lang as being out of step with the other Australian Governments. That may be true, hut Mr. Lang is not out of harmony with the policy of the Australian Labour party, nor with the desires .of those who are in need of sustenance, because they are denied the right to work. The present Commonwealth Government was elected on a promise to find employment. I have referred on previous occasions to the election placards, “Vote for the “United Australia party and secure for yourself a job at decent wages “.

Mr Marr:

– The jobs will be forthcoming in time.

Mr JAMES:

– The only job that has been provided by this Government so far, is a post in London for the right honorable member for Flinders (Mr. Bruce) at £5,000 a year. The Government was elected in December, but if has not brought forward one measure for the relief of the unemployed. Its whole policy is to destroy the Lang Government, incidentally hurting innocent people. Our first duty is to give consideration to our own people. Except the few who have inherited wealth, there is probably not one member of this House who has not been at some time in financial difficulties. I have been in debt, although I owe not a penny to-day. If I owed £10 to the honorable member for Parkes (Mr. Marr), and had in my possession only £10 to save my wife and children from starvation, I would frankly tell him that I could not pay.

Mr Marr:

– I would not ask for the money in those, circumstances.

Mr JAMES:

– Payment by me would be a crime, and acceptance by the honorable member would he equally criminal. As legislators, our relation to the people is that of a father to his family. We have a responsibility to those who are hungry, and we cannot humanely pay interest to wealthy bondholders overseas if thereby we condemn some of our people to starvation. I invite the honorable member for Parkes to tell the bondholders abroad that they have no right to claim their interest until Australia has recovered, and its people are in a position to pay.

This amending bill is designed to tighten up the law and give assurances to those who are reluctant to pay State income tax into the Commonwealth Treasury. Clause 2, which amends section 8 of the principal act, provides that -

No fine penalty forfeiture or other disability shall be imposed upon the person by reason of the payment to the Treasurer or authorized person, in accordance with this act, or of the non-payment of the amount in question to the State.

Apparently, under the principal act, a State could take action against any person paying his State dues to the Federal Government, and, indeed, certain newspapers declared that such action would be taken. This clause is a counter move in the game of chess now in progress between the New South Wales Government and the Federal Government backed by all the other State governments, and, in all probability, it will bc followed by another move by New South Wales. The position is humorous, although so tragic to the people of the State. Despite the laughter which is evoked on the Government benches whenever the people of that State are said to be content with the leadership of Mr. Lang, I can say that I have never seen a more remarkable demonstration of appreciation to any State Premier or Federal Prime Minister, or overseas visitor, including members of the royal family, than was shown to Mr. Lang on Thursday night last.

Mr Stewart:

– Under penalties or fines.

Mr JAMES:

– Nonsense ! A vast concourse blocked the whole of the traffic from Bathurst-street practically to Park-street, and down the side streets. It was a remarkable scene. Undoubtedly it put the wind up the New Guard. There was no “De Goat” attempt to intimidate that vast concourse. I fully believe that, if the effort to force Mr. Lang to the country is successful, his Government will secure a majority of the seats in the metropolis and in industrial country centres. If that happens, what further step of intimidation will the Commonwealth Government propose to take in order to attach State revenues ?

It is regrettable that, in this period of depression, the country is not united. Many of us are anxious to have one government for the whole of the people of Australia ; but we are all proud of the fact that Australians have one outlook in life, one destiny - the building up of a mighty nation. This legislation, however, may prevent the carrying out of that ideal. It may bring about internal dissension, possibly conflict between the various States. No one is anxious for that. So far Australia has been free of anything of the nature of a revolt or a rebellion. I should like it to be a country capable of saying, hundreds of years hence, that not one single drop of blood has ever been spilt in civil war in Australia.

Mr Scholfield:

– We shall have to get rid of Mr. Lang first.

Mr JAMES:

– The honorable member does not realize the danger of this legislation, and the possibilities attaching to it.

Mr Stewart:

– The best thing to do is to put the Lang Ministry in the grave.

Mr JAMES:

– Believe me, Mr. Lang does not desire anything like a revolution. There is nothing in the platform of the Australian Labour Party that verges on revolt or the exercise of force. Indeed, the party is to-day bitterly opposed by/ a section in this country which does advocate revolution.

Mr Thorby:

– What section?

Mr JAMES:

– I can remind the honorable member that the leader of his party (Dr. Earle Page) has talked of revolution to bring about new States, but I was particularly referring to the Communists who openly advocate revolution.

In addition to the concessions given by Great Britain to France and Italy, the Mother Country in 1907, in conjunction with France, advanced £150,000,000 to the Czar of Russia. At that time the Czarist regime of Russia was practically bankrupt. There was not even enough money in the coffers to pay the Cossacks, the troops employed by the Czar to suppress ruthlessly any sort of agitation. That is the principal debt which the Soviet Government of Russia has repudiated.

Mr Thorby:

– No, it has repudiated £1,000,000,000.

Mr JAMES:

– At any rate, it is a portion of it. Yet we find Great Britain buying Russian wheat in preference to Australian. Although Australia has done so much in the interests of the Empire, and has received so little in return, the people of Great Britain prefer to buy their wheat from a nation which has not. even asked for an extension of time for the repayment of its debt, but has absolutely refused to pay, and has not paid.. I want these facts to enter into the minds of all when there is mention of repudiation. I can say, without hesitation, that a considerable section of the people of Australia is of opinion that some one should be sent to Great Britain to demand for Australia concessions similar to those given by the Mother Country to other peoples. In the war we sacrificed the flower of our manhood in the interests of the Empire, yet we are receiving nothing in the shape of concessions, not even those which have been given to a communistic country. Great Britain would rather trade with Communists than with the fathers of the soldiers who went overseas to fight on its behalf.

I shall oppose this measure at every stage. I realize that it is useless to anneal to honorable members opposite. The whip has cracked, and they must vote in support; of the bill introduced by the Prime Minister, but conceived by the honorable member for Flinders-lane, so that when he goes back to London he can strut about, saying what a wonderful people the Australians are. As a matter of fact, he does not care a tinker’s curse for them. He is more concerned with his, financial interests and these are not all in Australia; some are overseas. To help his big business Ministers have had the audacity to create the position of resident Minister in London, and so that the honorable member can well and truly look after the job they propose to pay him £5,000 a year.

Mr PATERSON:
Gippsland

,- I cannot allow some of the extraordinary, inaccurate and misleading statements of the honorable member for Hunter (Mr. James) to go unchallenged. The honorable member tried to depict New South Wales as struggling under a burden of interest occasioned largely by the war.

Mr JAMES:
HUNTER, NEW SOUTH WALES · ALP; LANG LAB from 1931; ALP from 1936

– I said that the debts of this country- were occasioned by the war.

Mr PATERSON:

– The honorable member also referred to the debt which Australia is carrying on account of the war. I want to remind him of something of which he should not need to be reminded. Owing to the arrangement initiated by President Hoover, which has resulted in a sort of financial holiday so far as inter-governmental war debts are concerned, Australia is not at present paying one penny in interest overseas in connexion with the war.

Mr Gander:

– How long is that to last?

Mr PATERSON:

– I hope that it will continue until the different countries of the world regain stability. New South Wales, the one Australian State that has repudiated its obligations, does not owe one penny on account of war debt. At the present, time the overseas interest debt of the Commonwealth and States amounts to approximately £36,000,000 per annum, of which about £5,000,000 may be attributed to’ war debt. A portion of that amount represents interest, and also embraces payments to a sinking fund to wipe out Australia’s war indebtedness to Great Britain. Fortunately for this country, most ofits war debt is owing to its own citizens. Of the balance that is owing overseas, not one penny has to be paid while the moratorium initiated by President Hoover exists. Great Britain lent that money to Australia at the rate of £4 18s. 4d. per cent, interest, phis £11s. 8d. per cent, sinking fund contributions, making a total of 6 per cent. That is slightly less than the rate which Great Britain has to pay for money that she has borrowed. So that we in Australia cannot hold up the Mother Country as being usurious, or even ungenerous in her financial transactions with us.

Now let me deal with the way in which the State of New South “Wales has incurred its debts. Only recently the magnificent Sydney Harbour Bridge was completed. It cost approximately £10,000,000. On the underground and suburban railways and their electrification, New South Wales has expended no less a sum than £33,000,000, making a total of £43,000,000 for those three items alone. The pretentious building which housed the State Government Savings Bank of New South Wales cost over £1,000,000. Unfortunately, that institution was compelled to close its doors during the regime of Mr. Lang, of whom the honorable member for Hunter (Mr. James) appears to be so ardent an admirer. Various governments of New South Wales have expended money in many directions, in some instances prodigally, in others on railways, water conservation, and like schemes which tend to increase the possibilities of production in the State. Money has been borrowed from the people in the Motherland in order that the State might be enriched. Now the representative Government of New South Wales refuses to pay its interest commitments in respect of that money.

The honorable member for Hunter described the overseas people from whom New South Wales has borrowed as wealthy foreign money lenders - rich Jews. I remind honorable members that, because for so long Australia has preserved its financial integrity by meeting its obligations, the British Government conferred upon this country the incomparable advantage of having its bonds placed upon the trustee stocks list. Because of that, trustee companies, friendly societies, and other similar organizations, which will not put moneys entrusted to their care into an ordinary investment, have been encouraged to invest in Australian securities, regarding them as gilt-edged. An investigation reveals that the average amount of interest that has been paid to the average bondholder in Great Britain from Australian securities is less than £50 per annum. Will any one suggest that such persons are wealthy individuals, whose income from this source could be written off without harm to them?

Mr Gander:

– Is the honorable member in favour of reducing the rate of interest paid to those people?

Mr PATERSON:

– I hope that it may be possible, as the result of action which may be taken iu Great Britain, to bring about at a lower rate of interest a consolidation of our overseas debts on lines similar to that of our internal debt. At the same time I point out that it is not within the competence of this or any other Parliament in ‘ Australia to pass legislation reducing the rate of interestto be paid on’ overseas commitments; the consent of the investors concerned must be obtained for any alteration of the conditions of the loans. The borrowing of the money was not a transaction between the Government of this country and the Government of Great Britain. In the main our overseas commitments are to individual bondholders, many of whom are minor investors who supplement their small earnings by this average income of £50 per annum from Australian bonds. Further, a number of them are aged, with no other income than that received from this source. It is the commitments due to such people that the Government of New South Wales desires to repudiate. That State has also defaulted in respect of its internal bondholders, notwithstanding the fact, that within the past twelve mouths, the Commonwealth Parliament has enacted legislation which reduced the rate of interest on internal bonds by over 22£ per cent., to an average of approximately 4 per cent.

Mr Holloway:

– By compulsion.

Mr PATERSON:

– Whatever the method, that was the result. Many Australian bondholders are of mature years, with incomes amounting to less than £.100 per annum, sometimes below that enjoyed by a man and his wife who draw the old-age pension. Those are some of the people whom the Commonwealth Government is stepping in to protect, as it is in honour bound to do, and on whose . behalf it has met the commitments of the Government of New South Wales.

The honorable member for Hunter (Mr. James) referred to unemployment. Our best chance of industrial recovery lies iu encouraging overseas investors to put their money into enterprises in Australia. By that I do not mean that we should necessarily endeavour to obtain government loans from overseas. We should attempt to lift our credit to a point which will re-establish our financial integrity, and thus encourage overseas investors to put their money into private enterprises m the Commonwealth. A young country like Australia can develop only by additions to its capital, and the best additions are those which go into private enterprises. I should like to ask the honorable member for Hunter and his colleagues what prospects there are of encouraging the flow of money from overseas to develop this young country if we refuse to pay investors abroad the interest that is their duel If the Commonwealth Government did not step in and meet the commitments which the Premier of New South Wales refuses to meet, we could not expect one additional halfpenny to our national capital from overseas. Instead, we could be certain of the total destruction of our credit, with the result that our unemployment problem would be infinitely greater than it now is, Dur financial rehabilitation would be alarmingly delayed, and the future generally would indeed he black. If we desire to place the reputation of Australia on a higher plane, we must pay our debts. That is why the Commonwealth Government is accepting the responsibility of paying on behalf of the Government of New South Wales what that Administration is in honour bound to pay. However, this Government cannot continue doing so indefinitely. This afternoon the Prime Minister (Mr. lyons) reminded us that while the default of the Government of New South Wales was a little over £900,000 in February of this year, it will be approximately £5,700,000 by the 30th June next, the end of the financial year; that is after deducting the sum of £250,000 a month, which the Commonwealth Government has to pay the Government of New South Wales under the terms of the Financial Agreement. One can visualize what would be the result in another twelve or eighteen months if the default were allowed to continue, while we waited for the ordinary processes of the law to take their course.

Mr Gander:

– What does the honorable member mean by the “ ordinary processes of the law “ ?

Mr PATERSON:

– The suing of the Government of New South Wales in the ordinary way, as distinct from applying the provisions of the Financial Agreements Enforcement Act.

Mr Gander:

– How much has the Commonwealth collected by enforcing the act?

Mr PATERSON:

– I am not quite sure, but I hope that by means of this amending legislation it will collect a good deal more, and with much greater rapidity than has been the case in the past. This is not merely a fight between the Commonwealth Government and the Government of New South Wales, it is an attempt to obtain justice on behalf of the Governments of the Commonwealth and the other five States, against the defaulting State of New South Wales, which is endeavouring to drag everybody into the abyss into which it has deliberately slipped. I shall support this legislation, and I hope that it will have the effect which the Government desires.

Mr BLAKELEY:
Darling

.-1 propose to vote against the second reading of this bill, and also against the other stages of the measure. I shall do so because I consider that the position as between the Commonwealth Government and the Government of New South Wales has degenerated into a political dogfight. Ever since the assumption of office by the present Commonwealth Government this business has been permeated with the taint of politics. There could be no misconception, in the minds of the people of New South Wales, or of the members of this Parliament, concerning the intention of the Scullin Government. Its proposals to deal with the situation as it then existed were definite and well understood, but because they were not sufficiently bloodthirsty or spectacular, they were condemned, not only by members supporting the present Government, but also by every anti-labour newspaper, and by every nationalist and country party organization throughout the Commonwealth. These people and these organizations made it quite clear that they wOuld not be satisfied until they had the head of the

Premier of New South Wales served up on a charger. With them the paramount consideration was not so much the payment of its debts by the State as the extinction of the Lang Government. Now, in pursuance of that intention, we have this political ramp in the form of the bill under consideration. I believe that the measure is essentially political; that the Prime Minister (Mr. Lyons) and his followers have not the slightest compunction as to its consequences, or whom it may hurt so long as they “get” the Premier of New South Wales. To this end they Have been working since before the last federal election with Mr. Stevens, the present Leader of the Opposition in the New South Wales Parliament, and earlier with Mr. Ravin and the Nationalist and Country parties throughout New South Wales. Several members who contested seats on behalf of the Nationalist and Country parties in New South Wales made definite promises that, if they were elected, they would see that Lang and his Government were “ out “ in two weeks.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The honorable member is probably referring to another promise made by one of his colleagues to the coal-miners.

Mr BLAKELEY:

– I do not know if the honorable member was one of “those who said to the electors, “ For God’s sake vote for me; if you. do, I shall see that Lang and his Government are thrown on the political scrap heap within a fortnight “. Probably he was. All these pre-election promises clearly indicate what was in the minds of members supporting the Government, and since his return to power the Prime Minister has become quite hysterical in his attempts to bring about the downfall of the Lang Government. His voice almost shakes with emotion on every occasion when he tells –the people that it is his intention, to pursue, to the bitter end, the course which has been mapped out for him in this matter. Apparently, the honorable gentleman does not care to what lengths he may be obliged to go. Certainly he does not visualize what may be ahead of him. Blinded as he is by political prejudice, and obsessed with the thought that he must “ get “ Mr. Lang, he has resolved to go ahead with this legislative proposal, be the consequences what they may.

Under earlier legislation, the Government attached several sources of New South Wales revenue, but up to the present time comparatively little money has been obtained. That legislation was passed in such a haphazard manner that almost before the ink was dry, further amendments were found to be necessary. Yet, as I have said, notwithstanding all these excursions and alarms nothing much has yet resulted.

Equally hysterical in this matter is the right honorable member for Cowper (.Dr. Earle Page) who has been inciting those people of New South Wales whose views are in accord with his own to take certain action. After venting his political spleen on a certain section of the people in that State, the right honorable gentleman introduces his King Charles’s head, in the shape of the subdivision of the State of New South Wales, and offers that as a cure for the present difficulty. If the right honorable gentleman had his way, he would take out his portion of the State,’ and allow the rest of New South Wales to “ carry the baby.” But that would not solve our problems. Nor can it be said that his contribution to the debate in this, the most serious crisis that has occurred in the history of the Commonwealth, has helped us very much.

As I have stated, very little money has been diverted into the coffers of the- Commonwealth following the attachment of certain revenues of New South Wales, and it would seem that the next move by this vindictive Commonwealth Government is to take charge of New South Wales, regardless of the consequences of that action. Actually this was suggested by the right honorable * member for Cowper (Dr. Earle Page), who said that it might be necessary, in the, near future, for the Commonwealth Government to carry out essential services within the State of New South Wales. I do not know whether the right honorable gentleman meant all that is implied in that statement. Certainly it was definite enough to be well understood by all who heard him, but I cannot understand how one who has been a responsible member of this Parliament for some years, and occupied a -high ministerial position in a former govern- ment, could fail to visualize what would happen if the Commonwealth took charge of New South Wales. It would mean the introduction of the military machine. If the right honorable gentleman was really expressing the views of the Government, and let the “cat out of the bag” after conversations with members of the Cabinet, I think that honorable members and the people generally, are entitled to know just how far this Ministry is prepared to go in its political dog-fight with the Premier of New South Wales.

Dr Earle Page:

– Why does the honorable member put words into my mouth? I never said that. What I said was that essential services were gradually ceasing in New South Wales, because of the failure of the State Government to do its job properly.

Mr BLAKELEY:

– The right honorable gentleman said very definitely that it might be necessary for the Commonwealth Government to carry on essential services in New South Wales.

Dr Earle Page:

– They are ceasing, because the New South Wales Government is failing to do its duty.

Mr BLAKELEY:

– If the New South Wales Government is failing in its duty it must go to the country.

Dr Earle Page:

– Mr. Lang will not. do that.

Mr BLAKELEY:

– But that is not what the right honorable gentleman meant. He said, without any qualification, that it maybe necessary for the Commonwealth Government to take over the- essential services of New South Wales. If that statement were made in all seriousness, it implies drastic action by the Commonwealth. It means that the Commonwealth Government will have to take over the control of the railways, the treasury, the hospitals, family endowment, unemployed relief, the police force, and other State services; and, obviously, in view of the strained relations between the Commonwelath and the State of New South Wales, any such action ‘ would only be possible with the assistance of the military forces. Just how this could be done, I do not know, but I remind the House that the Constitution stipulates that, before the military machine can be put into operation in a State, there must be an application by a State government for assistance. If this Government contemplates taking control of New South Wales, the people of Australia should be fully informed; but if all this talk and political activity are merely so much shadow-sparring, perhaps not much damage will be done.

Recent events indicate what is in the mind of this Government. The Premiers Conference a week or two ago discussed proposals to give political preference to one government and impose penalties on another. Ostensibly the purpose was to compel the Premier of New South Wales to fall into line with the Commonwealth’s proposals, but really the intention was to bring about the defeat of the State Government, with a view to securing control by political parties supporting the present Commonwealth Government. Honorable members will recall that the scheme submitted by a special committee of experts to deal with unemployment was hurriedly adopted, and as hurriedly shelved for a period of six months or thereabouts. There was a good reason for this changed attitude. Two State elections arc pending - one in Queensland and one in Victoria - and it was feared that the experts’ plan to deal with unemployment might jeopardize the return of candidates of the Nationalist, Liberal or Liberty “ parties - whatever term may be applied to them.. Accordingly, that cranky scheme was shelved in order to enhance the chances of the return of the Moore Government in Queensland, and of the Nationalist party candidates in Victoria. I am opposed to the bill for reasons given when I opposed the original measure, and I warn the Government that, in this matter, it is playing with fire.

Mr ROSEVEAR:
Dalley

.-I am opposed to the bill. I do not anticipate that my vote will frustrate the Government’s desire to. embarrass the State of New South Wales, but I intend to voice my protest against a proposal which, in my view, will cause more distress to the people of that State than would have been caused if the Government had endeavoured to adjust its differences with the State. It is only a month since the Financial Agreements Enforcement Act was passed by this

Parliament. At that time it was heralded as an effective measure to deal with the New South Wales Government, notwithstanding that the warning had been issued by honorable members who sit on this side of the chamber that no self-respecting State Government would stand aside and allow its revenues to be raided by the Commonwealth Government, or permit its functions to be usurped by another authority. The New South Wales Government has, in the interests of people of that State, successfully resisted by every possible manoeuvre, and every force at its command, all the efforts of the Commonwealth Government to raid the State treasury. So successful has it been in this direction that the Commonwealth Government has now found it necessary to introduce this amending bill to tighten up the provisions of the original act.

We were told when the original bill was introduced that time was of the essence of the contract, and that the ordinary legal procedure in this country for the recovery of debts was too slow for this Government; but the efforts which it has made to speed up the process of recovery have entirely failed. When the original enforcement bill was before us the extent of the default by the New South Wales Government was £900,000, but so ineffective have been the measures adopted by the Commonwealth Government to recover this amount that the default has now grown to £2,000,000. The Prime Minister has failed in his duty to this House in not divulging the amount which the Commonwealth has recovered from the revenues of New South Wales.

Dr Earle Page:

– What is the amount ?

Mr ROSEVEAR:

– I do not know; neither does the right honorable member, although such knowledge is necessary to enable us to take an intelligent part in this debate. We should have been told of the exact financial result of the efforts which the Government has already made to seize State revenues. The Prime Minister should have taken ns fully into his confidence in this respect. The plain fact is that all the efforts which this Government has made to seize State revenue have been frustrated by the New South Wales Government, and, in sheer despera tion, the Commonwealth Government has, in my opinion illegally, seized Government deposits lying in certain banks in New South Wales. We know very well that much of the money that has been so seized was obtained from revenues not prescribed in any proclamation at the time of its seizure. The Commonwealth Government has, therefore, exceeded its legal rights in this respect. It has been forced into such a desperate position that it has indiscriminately seized State moneys wherever and whenever it has been able to do so.

We have to face the fact, even though it may be unpalatable for some honorable members opposite, that this country, like other countries in the world, must review its financial position. We know very well that Australia, like many other countries, has been placed in an unfortunate and utterly impossible financial position. I contend that this country is entitled to the same consideration from Great Britain as foreign countries have received from her in the adjustment of debts. The honorable member for Gippsland (Mr. Paterson) made a plea for the holders of Australian stocks who reside in Great Britain, but he had to admit that we were still paying 6 per cent, for money which we had borrowed from Britain for war purposes.

Mr Cameron:

– He admitted nothing of the kind.

Mr ROSEVEAR:

– The honorable gentleman must know very well that the money which we are paying to Great Britain under a 6 per cent, contract is being paid to. America on a 3 per cent, contract, and that Britain is, therefore, making a 3 per cent. “ rake off “ from Australia. Yet, if a man dares to stand up in public and assert that Australia is entitled to the same consideration from Great Britain as she gives to foreign countries, he is howled down as a repudiator.

The right honorable member for Cowper (Dr. Earle Page) told us that he has always been in favour of a reduction in interest rates on overseas debts, but his statement to that effect this afternoon was the first of the kind that I or any member of any other political party had ever heard from him. The right honorable member was one of the first to denounce the Premier of New South Wales fifteen months ago when he first enunciated what is now known as the Lang plan. Those opposed to Mr. Lang at the Premiers Conference at that time adopted an alternative scheme, which they said would correct our ills. The Commonwealth and State Governments, apart from the New South Wales Government, have been experimenting with that alternative, which is known as the Premiers plan, for fifteen months, and only last week, at the Premiers Conference, they had to” admit that, as it stood, it had been a failure. They said then that the only hope for recovery for Australia was for her people to make additional sacrifices of the kind which have already been demanded, principally from the people least able to make them. It is true that the Premiers plan has effected certain economies in regard to our internal national debt. That being so, the logical action for the Government to take would be to call upon overseas bondholders to make a sacrifice similar to that which has been made by the Australian bondholders; but any one who dares to make such a suggestion is called a repudiationist. If a certain sacrifice can be required from our local bondholders, I can see no reason why a similar sacrifice cannot be required from those who hold Australian stocks to the value of £560,000,000 on the other side of the world. The right honorable member for Cowper (Dr. Earle Page) said that the Commonwealth Government could not call upon overseas bondholders to make such a sacrifice, because of the action taken by the New South Wales Government. He also observed that the New South Wales Government had made it impassible for the Commonwealth Government to negotiate with overseas bondholders. I challenge the Commonwealth Government to refute my statement that it has never been in favour of asking foreign bondholders to make a sacrifice similar to that made by local bondholders. It has always shelved this issue, and endeavoured to throw the blame back on to Mr. Lang. Yet if the Lang Government were removed from office tomorrow, the position would remain as it is. If this Commonwealth Government had had its way, the recent

Premiers Conference would have agreed to a further attempt towards the solution of our present difficulties, which would have made the position infinitely worse than it is to-day, for the Premiers were invited by the Commonwealth Government to agree to the enforcement in Australia of conditions which would have reduced our workers to the level of coolies, and this would have been done solely to satisfy the demands of foreign bondholders.

The honorable member for Gippsland (Mr. Paterson) is, I admit, good at figures; figures, it is said, do not lie; but sometimes the compilers of figures are not as careful in their work as they might be. The honorable gentleman, for instance, said that the average amount received by British holders of Australian stock was only £50 per annum. No doubt in arriving at that figure the honorable gentleman massed in one total all the individual shareholders in life assurance companies which hold bonds, all the members of friendly societies who hold bonds, and all the individual bondholders. By this process, he was able to get such a huge number of- stock holders that the calculation showed that the average income of each from Australian sources was only £50. But such juggling with figures will not get us anywhere. The honorable member ought to have told us the exact means by which he arrived at his finding.

While all this furore is going on, we are told that the credit of Australia and of all the States is being damaged. It has been said that as long as New South Wales fails to meet her interest commitments, we shall be unable to borrow money. One honorable gentleman asked how we could hope to borrow money abroad if we did not pay our debts. Let me remind the House that the capitalists of Great Britain and France are squabbling greedily among themselves for the right to invest their money in Russia, although Russia has repudiated her debts to the extent of £960,000,000, and owes to Great Britain alone on moneys borrowed from her both before and during the war no less a sum than £260,000,000. In spite of this fact, the British Government did not seize the Russian wheat which was shipped to Great Britain and sold there for1s. per bushel, while the wheat of the Australian farmers was left rotting at our railway sidings. We know very well that machinery manufacturers of Great Britain were quite prepared to send their products to Russia in order to enable that country to adhere to her 5-year plan, notwithstanding that the avowed object of that plan was to wreck the social system of every other country of the world. It cannot be denied that whether a country has repudiated its debts or not, the investors of other countries are quite ready to lend it their money or trade with it if lucrative rates of interest are offered. What becomes of the argument, therefore, that because the New South Wales Government has repudiated its obligations to bondholders it is impossible to borrow money? The fact that because New South Wales has taken this action, the other States and the Commonwealth are not able to borrow, and the financial position of the country has become chaotic, is only additional evidence that the other States and the Commonwealth have been carried on the back of New South Wales for many years past.

It has been said that unless the New South Wales Government is prepared to join the Commonwealth Government and the other State Governments in their financial rehabilitation plan, the financial structure of Australia will collapse; but that argument cannot be substantiated. This was shown by the happenings at the recent Premiers Conference. It was trumpeted forth from that conference that if all the States would accept a new Premiers plan, or a second instalment of the original plan, the Commonwealth Government would be prepared to raise a loan of £10,000,000 for the relief of unemployment. When the Premier of New South Wales left the conference, having stated that he was not prepared to commit his Government to such an undertaking, the promise of £10,000,000 was reduced to £3,000,000, thereby indicating clearly that £7,000,000 of the amount originally proposed to bc borrowed was to be raised on the assets of New South Wales. Honorable members opposite laugh, but they will find it difficult to give a different explanation. To say the least, it is significant that the amount proposed to be raised fell con- siderably. as soon as Mr. Lang left the conference. Later, when the Victorian Government also refused to accept the proposal of the Commonwealth Government, it became doubtful whether even £3,000,000 could be obtained. The happenings at the Premiers Conference make it clear that the o’ther States, even in these times of depressed finances, are living on the credit and assets of New South Wales.

The right honorable member for Cowper (Dr. Earle Page) said this afternoon that Australia cannot emerge from its financial difficulties so long as the assets of New South Wales arc severed from those of the rest of the Commonwealth. Of what value arc the assets of New South Wales if that State, as has been alleged, has no credit? It is. clear that .this legislation is being directed against the Lang Government because it has proposed for the whole of Australia a policy of–

Mr Abbott:

– Dishonesty.

Mr ROSEVEAR:

– Is the honorable member for Gwydir (Mr. Abbott) prepared to use the same term regarding the actions of the Governments of France, Italy; and Belgium? I remind him that those countries had their international debts adjusted only when they said “ Thai is all we are prepared to pay; not a penny more “. It has been said that neither here nor in Great Britain can Ave legislate to reduce the interest on our overseas debts. All that we can do in that connexion is to negotiate with the bondholders in other countries. If they are not prepared to negotiate, the only thing left for us to do is to follow the example of France, Italy and Belgium, in which case Ave shall find that, regardless of constitutional difficulties, they will.be prepared to adopt a. reasonable attitude.

Mr Holman:

– Those countries delivered their ultimatum to other governments, not to bondholders.

Mr ROSEVEAR:

– Should the time arrive when Australia will refuse to pay more than the country can afford to pay,

Ave shall probably find that those who, for the last fifteen months have been loudest in denouncing the Lang Government for adopting a policy of alleged repudiation, will, like the right honorable member for

Cowper, be the first to claim to be the originators iti Australia of the proposal to reduce international interest rates.

Even the Prime Minister himself has admitted that the legislation which this bill seeks to amend has failed. The honorable gentleman said that, even were the Commonwealth to receive all the revenue that is covered by the various regulations which have been gazetted, the position would be that by the end of June next New South Wales would have repudiated to the extent of £5,000,000 more than that amount. The right honorable member for Cowper- also said that he was not in favour of financial juggling. It is well known that he was not a success as a juggler of finances. Even a fellowMinister in the Bruce-Page Government once described him as “Australia’s mo3t tragic Treasurer “. Although the right honorable gentleman does not favour juggling with the finances, he is not averse from increasing the exchange rate against Australia. It is strange that during this debate the exchange rate has not previously been mentioned, although of the sura of about £920,000 originally claimed by the Commonwealth from New South Wales, £240,000 represented exchange. The right honorable gentleman would further increase the exchange rate against Australia, and, as a consequence, the burden of debt as a means of enabling us to meet our obligations! Honorable members opposite say that the policy of the Lang Government, if persisted in, is likely to bring about, the downfall of Australia, and they urge that an appeal to the electors of New South Wales should be made. In my opinion, an election in that State would not alter the existing position, notwithstanding that the opponents of Mr. Lang claim that his removal from office would put everything right. But what would be the position if the Lang Government were returned with a majority? The silence on the Government side is most noticeable.

Mr Lane:

– We are prepared to chance that.

Mr ROSEVEAR:

– Does the honorable member for Barton (Mr. Lane) agree that the endorsement by the people of New South Wales of the Lang policy by a return of the Lang Government should automatically bring about the resignation of the present Federal Government?

Mr Maxwell:

– The return of the Lang Government would brand the electors of New South Wales with the same mark of dishonesty that is now associated with the Government of that State.

Mr ROSEVEAR:

– We are faced with a problem which neither an election in New South Wales, nor legislation of thi”! character can solve; and, therefore, it. seems logical that the Federal Government, instead of fighting the Government of New South Wales, should be prepared to meet that Government at least half way in an attempt to effect a settlement of the difficulties which now divide them.

Mr Lane:

– Is that a firm offer?

Mr ROSEVEAR:

– It is a suggestion. No good whatever can come of this legislation. Almost before the ink on this amending bill is dry, the Government of New South Wales will evolve some means of defeating the Federal Government. That will probably mean the introduction of further legislation to overcome those difficulties; and so the fight will continue ad infinitum. Undoubtedly, New South Wales failed to meet its interest commitments abroad.

Mr Gibson:

– And at home, too.

Mr ROSEVEAR:

– The Government of New South Wales has, it is true, been charged with repudiating its liabilities in Australia; but we’ must remember that that Government faithfully carried out its obligations to the local bondholders until the Commonwealth Government so harassed it that that was no longer possible. The Federal Government and its supporters must accept their share of the responsibility for New South Wales not meeting its obligations to the local bondholders. Notwithstanding the present attempt to tighten- up the existing legislation directed against New South Wales, the Government of that State will find some loophole in it. lt. is strange that honorable members opposite appear to have little or no knowledge of the amount of revenue which the coercive legislation of the Commonwealth has diverted from the Treasury of New South Wales to that of the Commonwealth. Only by knowing the effect of that legislation can wo form an opinion regarding the effectiveness or otherwise of the measures taken to meet the situation which has arisen. Members supporting the Government, particularly those representing NewSouth Wales constituencies, should satisfy themselves as to the effect of the legislation already passed before assisting to place on the statute-book further measures to injure their State.

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

– As the Prime Minister (Mr. Lyons) has told the House, this is a bill to amend the Financial Agreements Enforcement Act. Its object is, first, to protect those persons in New South Wales who comply with the Commonwealth law, and, secondly, to increase the powers of the Commonwealth, so that it may act more effectively for the recovery from the Government of New South Wales of the moneys paid on behalf of that State by the Commonwealth.

In considering the measure we have to decide whether or not it is necessary that the Commonwealth should recover from New South Wales the money paid by it on behalf of that State. Before proceeding to discuss that question, I desire to say a word or two in reply to statements made during this debate. The right honorable the Leader of the Opposition (Mr. Scullin) and the honorable member for Darling (Mr. Blakeley), speaking with one voice, made it clear that the attitude of the Opposition to this measure had been carefully considered. They were non-committal, and contributed nothing of value to the debate. The course agreed upon between those honorable” gentlemen, and, no doubt, by the whole of their party, is to endeavour to make this matter appear to be, to use the words of the honorable member for Darling (Mr. Blakeley), “ a political dogfight.” I suggest that this is unworthy of the official Opposition, having regard to the fact that we are now dealing with one of the gravest problems with which this Parliament has ever been confronted. I shall leave their remarks at that.

The leader of the Country party (Dr. Earle Page), and the honorable member for Gippsland (Mr. Paterson) both treated this subject with the seriousness which it demands, and stated that they and their party are prepared to support the Government in its present action.

The honorable member for Hunter (Mr. James) made a bitter attack on me, attributing utter impropriety to all my actions and motives, but the only comment I have now to make on his speech, and on that of the- honorable member for Dalley (Mr. Rosevear), is that the opinions expressed by those honorable members on the issue before the House are tragically wrong, and their adoption by the people’ of Australia would inevitably result in disaster to this country. The honorable member for Hunter defended the dishonorable and disgraceful actions of theGovernment of New South Wales. He tried to extenuate them by saying that they have been taken’ to benefit widows and orphans, and to relieve the poor and suffering in the State of New South Wales. Yet, if the facts are examined, it must be seen that the Government of New South Wales is bringing more and more trouble upon the very persons whom, I have no doubt, the honorable member sincerely desires to help and protect.

The honorable member is gravely misinformed on many points. He and the honorable member for Dalley reiterated the opinion that, if Australia defaulted, it would be doing merely what has been done already by other countries; that, indeed, it would be almost a courageous act for Australia to follow their lead. No doubt they draw their inspiration from the speeches of Mr. Lang, who, notwithstanding the constant repetition of his statements, knows perfectly well that what he is saying is absolutely untrue, and is deliberately attempting to deceive the people. The other day he told the public of Australia that the attitude of the New South Wales Government was analogous to that of Great Britain, and he said that, if he was to be condemned, so should Mr. Ramsay MacDonald. That statement was absolutely false. Australia is in exactly the same position as Great Britain with regard to what relief from interest payments is now being experienced. That relief applies only to war debts, regarding which there have been arrangements made between different countries. An absolute moratorium has been declared, during which there is a cessation of all interest payments on war debts. By that, Great

Britain has certainly benefited, and so has Australia. At the present time this country is not paying one penny of interest on the amount of its war debt due to the British Government.

Let us consider the class of debts that are now being repudiated by the Lang Government. The arrangements for the suspension of interest payments and for the reduction of indebtedness to which I have referred have been made between governments; they apply to debts owed by one government to another. But in no case has Great Britain refused to meet her obligations to her own bondholders, to whom she is paying interest in full on the thousands of milli.ons of pounds borrowed for war purposes. Not one farthing of the indebtedness due to her own people has been repudiated by Britain, nor has she taken any dishonorable action with regard to it. The New South Wales Government, on the other hand, has refused, to pay interest on money advanced for the purpose of carrying on public works in that State. That money is not owing to rich capitalists or persons of great means, but to the very class which the honorable member for Hunter desires to protect. Does the honorable member realize that the number of bondholders in Great Britain who hold Australian securities is about 500,000, and that the amount of interest drawn by them averages about £50 per annum? Yet those are the persons who are described by honorable members opposite as “ bloodsucking Shylocks “ to whom we should refuse to pay interest!

The charge was. made by the honorable member for Hunter that the brutal tyranny exercised by the Commonwealth Government in getting this legislation passed through this Parliament is forcing Mr. Lang to cease from doing those things on which he has sci much at heart ; that we have made it impossible for Mr. Lang- to continue the payments to widows and orphans and to maintain all the other social services that have been provided in the past in New South Wales. No doubt the honorable member truly believes that the action of the Commonwealth Government has caused the present situation in New South Wales, but that is contrary to the facts. Mr. Lang ought to be in a better position to meet the cost of those social services than he would have been in in ordinary circumstances, because the figures quoted by the Prime Minister (Mr. Lyons) show that, since the end of January, when the default began, Mr. Lang has failed to meet obligations totalling £2,730,000. As a set-off the Commonwealth Government has retained £505,000; therefore, Mr. Lang is £2,225,000 better off than he would have been had he paid his debts, and should be in a position to meet those obligations which, he says, we ‘ are preventing him from paying. The fact is gradually being disclosed that he has been deceiving the people. He has been talking of building up a fund to pay child endowment in New South Wales, but it is now proved that that fund is bankrupt and rotten to the core. This is due, not to any action of the Commonwealth Government, but to the position into which Mr. Lang has brought New South Wales. His difficulty in meeting his obligations with respect to social services is attributable solely to the condition into which New South Wales has drifted since he assumed office.

The question to which we must address our minds is whether it is possible to obtain the reduction, of our overseas interest by negotiation. Many people seem to be unaware that the difficulty of bringing this about by negotiation is insuperable. It is suggested that we should, by negotiation, induce those persons overseas, who hold Australian securities, to agree to the reduction of interest in the same manner as the bondholders in Australia voluntarily, and with amazing patriotism, agreed to convert our internal debt to a lower rate of interest. I would remind the House that to enable effect to be given to the desire of those Australian bondholders who wished to ‘help their country in its hour of need, it was necessary to pass through every State Parliament an act empowering trustees to convert such stock as they held, and it is, of course, impossible for us to pass such legislation with respect to the holders of bonds contracted for overseas. It is almost certain that the great majority of the stocks held overseas is trustee stock, held on behalf of beneficiaries, and the trustees of such stock have no power to agree to any alteration of the contracts concerning it. As for attempting to negotiate with overseas bondholders, I would say that there is nobody who represents them, or could speak for them. There is a committee of foreign bondholders, but it represents only the interests of stockholders as a whole, in cases of default, when it does its best to recover something for those whom it represents; there is no organization with whom negotiations could be carried on regarding the rate of interest on Australian overseas debts. Therefore, we would have to negotiate with the bondholders individually. We should then find that half of them are trustees, who could not, even if they wished to do so, make any concession. And all the time, Australia’s credit would be getting lower and lower. In the last-few days, Australian stocks have slumped badly in London owing to Mr. Lang’s declaration at the recent Premiers Conference. Since the 21.st March, our leading stocks have fallen more than 10 per cent. Australian 5 per cents, have fallen from over £90 to about £80. The drop would be much greater if we tried to negotiate in London under impossible circumstances to bring about a reduction of our interest there. The idea is impracticable, and the public should know it.

I turn now to the question how a reduction of our interest may be possible,. Everybody realizes that a reduction is desirable. Our war debts are in a class apart. We hope that the present moratorium will be continued, and that if we do not have a final settlement at the Conference on Reparations and War Debts, which is to be held in June, at least the present arrangement will be continued. As to our ordinary debts, every thinking person realizes that the burden of debtor countries has become almost intolerable, owing to the terrific fall in commodity -world prices. Fortunately, in many respects, Australia is not the only debtor country. The debtor countries are in the majority, and, owing to the world position, it is now a matter of concern to the creditor countries that something should be done to ease the position of the debtor countries and to assist them to prosperity. A satisfactory conclusion can be reached only by a great international movement for the proper handling of war debts, and for putting the world’s finances on an improved basis.

Sitting suspended from 6.15 to 8 p.m.

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

– If the burden at present pressing upon debtor countries - a burden made heavier by the prevailing low level of commodity prices - could be eased by the general reduction of interest rates, it would benefit, not only the debtor countries, but the creditor countries as well. There are, however, difficulties in the. way of this. It has been suggested that a period of low interest rates might be brought about by international agreement. That would enable huge conversions of the debts owed by various coun-tries to be made on the basis of reduced interest rates. It is evident that the benefit which could be derived by each debtor country from any such action would depend upon the level at which its credit stood in the eyes of the world. Australia’s object to-day should be the improvement of her credit by every possible means; so that when a suitable opportunity occurs, our credits being good, we shall be able to convert some of our debts at a lower rate of interest.

I use the word “ some “ advisedly, because there is considerable misunderstanding in many quarters about the rates of interest charged on Australia’s indebtedness. Those who glibly discuss this matter talk as if Australia’s chief aim should be to get the interest rate on all her debts reduced, whereas Australia has in the past borrowed a great deal of money at cheap rates, that is to say, at rates lower than any at which we could reasonably hope to convert. It is the higher interest-bearing securities that we require to convert. Our total external indebtedness is just short of £600,000,000. Of that we have borrowed £97,000,000 at rates less than 4 per cent.; £166,000,000 at 4 per cent., or under 5 per cent.; £237,000,000 at 5 per cent.; and £98,000,000 at over 5 per cent. It is only in respect of those securities bearing the higher rates of interest that we could expect to negotiate profitable conversions. Even Mr. Lang, that apostle Of the policy of reducing interest rates - when in his more respectable moods, and not declaring straightout repudiation - has never suggested that interest rates should be reduced below 3 per cent. Well, at present nearly £100,000,000 of our indebtedness carries an interest rate of approximately 3 per cent. On £30,000,000 we pay 3 per cent; on £5,000,000 we pay £3 2s. per cent.; on £53,000,000 we pay 3£ per cent. ; on £3,700,000 we pay 3-) per cent.; and on. £50,000,000 we pay 4 per cent. Practically all our bonds bearing interest at more than 5 pei: cent, may, under the terms of the contract, bc redeemed by us at any time.

That part of our war debt which we owe to Britain is included in the sum: I have mentioned. I understand that today the honorable member for Dalley (Mr. Rosevear) said that Australia was paying to Britain 6 per cent, interest on money for which Britain herself was paying only 3 per cent. That statement has been made quite freely by various gentlemen who subscribe to what is known as the Lang plan, though it is not true. Under the Hoover moratorium, we arc not now paying interest, nor contributing to the sinking fund in respect to the overseas war debt; but the rate of interest we were paying was £4 18s. 4d. - not 6 - per cent., and the balance went towards liquidating the debt by creating a sinking fund. The average rate of interest which Britain herself is paying on the money she lent to us is approximately the same as we have been paying to her.

As I have said, the measure of relief which we may expect from any interest reduction schemes will depend upon the state of our credit with creditor countries. The condition of our credit, in turn, will depend upon the success of our efforts to overcome our difficulties; whether, in fact, we have convinced the world that we are an honest, honorable, and upright people, determined to meet our obligations, a people whose word can be taken, and whose securities it is safe to buy.

Mr Gregory:

– If we are unable to do this, what will happen in respect of the sum of £13,000,000 which is due for repayment in November next?

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

– A little while ago there was every prospect of our being able to handle that loan satisfactorily. The impression caused by Australia’s adoption of the Premiers plan, and her obvious and determined effort to overcome her difficul ties, had greatly enhanced her credit abroad. As the result, within a period of six weeks towards the latter part of last year, Australian securities advanced, on an average, by approximately twenty points. Had the position been maintained, there was every prospect that we should be able to work our stocks up to a point at which there would have been no difficulty in converting the securities falling due in November. This debt represents money borrowed by .New South Wales. However, the action of Mr. Lang, when for the second time he repudiated his obligations, went back on his undertakings, broke his pledged word, and departed from the Premiers plan after swearing to carry it out, so damaged Australia’s credit that Australian stocks immediately began to fall, and the chances of carrying out a successful conversion were greatly diminished. Mr. Lang’s most recent actions have still further aggravated the difficulty. Since the middle of March there has been a slump in Australian securities of approximately ten points, this loan of £13.000,000 being one of those affected. Previously, the securities representing this loan had risen as high as 95 per cent., but they have now fallen, back to 91. This slump has made successful conversion nearly impossible.

It is only with high credit that we can get low interest rates. Had the improvement in ‘our credit been maintained, it is almost certain that, at the end of this year, we should have been able to convert at a lower rate of interest the securities then falling due. To-day there is grave danger that we may not be able to convert those securities at all, and, unless a change takes place in the meantime, if we are able to convert, them, it will be on the basis, not of ‘lower, but of higher interest rates, thus perpetuating the evil we wish to mitigate. The £13,000,000 loan which falls due in November next represents only a small portion of the vast sum, amounting to hundreds of millions of pounds, that must be converted or paid off within the next few years. Unless we go forward in a determined manner to reestablish our credit abroad, we shall find, when the time comes to convert other securities, that our interest burden, far from being lightened, will become even heavier than it is to-day. Therefore; the

Government intends to press forward with its action under the Financial Agreements Enforcement Act. We are now asking Parliament to amend the act so as to increase the power of the Government. The Prime Minister has said that he will take all requisite steps to make the State of New South Wales honour its obligations.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The Government of New South Wales.

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

– I should have said the Government of New South Wales. If we examine the situation, we shall see that it is absolutely necessary that New South Wales shall pay the interest owing on its own debts, and honour its obligations, unless Australia as a whole is to fail to meet her obligations, and defaults on her interest payments. If New South Wales, the biggest and richest of the States, containing two-fifths of the population of the whole Commonwealth, persists in the attitude that she will not pay interest on her indebtedness-

Mr James:

– She does not say that she will not, but that she cannot.

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

– I remind the honorable member that, when his leader first defaulted, his declaration was “ I won’t.” Only recently has he changed his cry to “ I can’t.” If this powerful State of New South Wales will not bear its own burden, the rest of Australia must do so for her, or allow Australia to default. Victoria, Queensland, South Australia, Western Australia, and Tasmania will all have to carry heavier burdens because the biggest and richest of the States chooses not to pay what she has contracted to pay. Over any long period this burden would become too great for the rest of Australia to bear, and the Commonwealth would have no alternative ‘but to default.

Some persons talk lightly of default, but have they ever considered what that would mean to Australia? To-day, the supporters of the Lang plan say that they intend to keep every social service at the existing level; but they have forgotten that les3 than twelve months ago Mr. Lang himself attended a conference in Melbourne, and subscribed to the Premiers plan, because he agreed with the other Australian. Premiers, and the Prime Minister of the Commonwealth, that unless some such plan were given effect Aus tralia could not pay more than 12s. in the fi in respect of any of its commitments, including old-age pensions, child endowment, sustenance for the unemployed, and every other social activity in the community. Less than twelve months have passed since Mr. Lang, who is blindly supported by the advocates of the Lang plan, admitted that Australia had come to such a pass that unless drastic action were taken the inevitable result would be government payments on the basis of 12s. in the £1. Yet, to-day, these people are saying that we ought to default, and that we are at liberty to disregard our financial obligations altogether so long as the people of New South Wales are allowed to enjoy their present social benefits, such as child endowment, widows pensions, and sustenance for the unemployed. In such circumstances, it is certain that within a limited period we would reach a pass when it would be a question of the payment of not 12s. in the £1, but a mere pittance to those who to-day are benefiting by the social services of this country. What would it mean to Australia if we were to default? There would be, in the first instance, an immediate flight of capital from this country. Those persons who could realize on their assets would send their money elsewhere to prevent a worse catastrophe befalling them. The supply of London funds of sterling to buy the Australian £1 would be dried up, and the immediate effect would be a tremendous raising of the exchange. The value of the Australian £1 would drop against sterling, and that would bring about the very result which has been objected to this afternoon, when it was pointed out that the raising of the exchange increases the burden on budgets. The exchange would be increased, not by 5 per cent, or 10 per cent., but by 30 per cent., 40 per cent., 50 per cent., and even more, and the burden on budgets would become absolutely unbearable, so that we could not raise revenues to meet it. There would than he no funds from which to pay social services. Our obligations would, have increased, and our revenues would have dropped because of diminished production. The position would become worse and worse, until we had in this country a state of chaos which to-day we cannot realize, notwithstanding the trials and tribulations through which we are passing. That is inevitably what must happen if the Lang plan is given effect in Australia.

It is time, therefore, that the Australian people rose up in their wrath, and destroyed the advocates of the Lang plan, which if followed must force Australia along the path to dishonour and disaster. It is tragic that we should have in Australia persons who advocate such a plan, persons who are misleading the people into thinking that they would be benefited by its operation.. Australia is probably the only country in the world which has an actual chance of returning to prosperity within a reasonable period of time. If, by means of an international effort, the general price levels of commodities were raised, and we in Australia had kept our currency upon a proper basis, holding the position as at present, no one could calculate the immediate benefit to Australia ; the reaction would be probably the most marvellous experienced by any country in the world. We must remember that Australia to-day is better equipped than it has been at any other time in its history to take advantage of a revival in world prices. T’hese hard times, if they have done nothing else, have caused us to be better equipped to take advantage of any benefit that may come in our direction. That opportunity will not long be postponed. The Prime Minister (Mr. Lyons) said this afternoon that if we can only hold this nation steady for another year or two there is not the slightest doubt that we shall emerge triumphantly from our difficulties. Surely it is worth the while of the people of Australia to make every conceivable effort to reach that goal - a goal which is not very far ahead. During the war, we showed that we were a people who when faced with adversity would stand fast and firm. At that time we had troubles to face similar to those which are operating to-day. As the war dragged on, and the pressure became greater, those of little heart in the community contended that we should refuse to send more troops, and should negotiate forthwith for peace; they were prepared to end the war at any price. But the more courageous stood fast. We saw the war through, and Australia emerged from it with its name, its prestige, and its reputation enhanced. Today, in a time of peace, we are experiencing a similar period of trial and tribulation, and’ again there are among us timorous souls who advocate that we a? a nation should follow the dishonorable course, so that some immediate relief may be given to the community generally. I believe that the people of this nation will again stand fast and firm, and will refuse to accept the opinions and doctrines of these counsellors of cowardice which would lead us to destruction. There is an obligation upon us all to do everything possible to hold the nation firm. For that reason, whatever it may mean, we must take action against the Government of New South Wales and the Premier of that State, to compel them to stand to their obligations, and to prevent them from bringing on. Australia ruin and chaos, which is what would inevitably be tho effect of the adoption of the Lang plan.

Mr THORBY:
Calare

.- As a member, representing an electorate of New South Wales, I support this bill to amend the Financial Agreements Enforcement Act. I propose not to traverse the ground covered by previous speakers, but to refer to one or two matters of more than passing interest and importance. Certain accusations have been made in this chamber against various governments of New South Wales, and certain claims have been made on behalf of those governments, particularly the present Government. When discussing the difficulties associated with the collection of revenues to meet the obligations of New South Wales, various speakers, including the honorable* member for Dalley (Mr. Rosevear) and the honorable member for Hunter (Mr. James), have repeatedly stated that the present Premier of New South Wales was the originator of a scheme to bring about a reduction in interest rates to enable that State to meet its commitments. I say definitely that from the day Mr. Lang took office in New South Wales it became more and more difficult for him to arrange for financial accommodation; but, fortunately for his Government, the previous State Government had completed financial arrangements which enabled Mr. Lang to carry on the government of that ‘State for a period of five months.

Mr Rosevear:

– When the Lang Government took office there -was a deficit of £4,000,000.

Mr THORBY:

-s- I was a member of the Ministry that gave place to the Lang Ministry, and I know that the fact is on record in the Treasury of New South Wales that prior to the Lang Government taking office the previous government had arranged in London for financial accommodation at the rate of £3 2s. 6d. per cent. - the lowest rate of interest ruling probably for thirty years. That statement, which cannot be contradicted, supports the contention of the Assistant Treasurer (Mr. Bruce) that the credit and integrity of a government should be its’ first consideration, particularly when it contemplates approaching the oversea money lenders. If a government cannot produce reasonable credentials it is useless for it to seek cheap money. When the Lang Government took office it could make no satisfactory financial arrangements with oversea money lenders.

Mr James:

– That was it matter for the Loan Council.

Mr THORBY:

– It was not. The previous State government was able to arrange for financial accommodation, yet so soon as the Lang Government took office no money was to be had at any price. It may be necessary for the people of New South Wales to make some small sacrifice to enable the Government of that State to meet its financial obligations. The people would raise no objection to that, knowing that by making a small sacrifice at this stage they will avoid a’ greater sacrifice later. Some honorable members have made a special plea on behalf of the starving children, the widows and the sick, the destitute, and the unemployed; but while there is in New South Wales a large number of unemployed whose requirements have to be met, at the same time there is in that State a government which is encouraging imposition upon charity. I know of one person who was in receipt of a salary of £5 a week and expenses, but left his wife and children to depend on food relief from the Government. When the relief was discontinued, the police were definitely instructed to restore it. That happened in Cobar, and full details of the case can be had from the Mayor of the town. While I was addressing a public meeting at Wongarbon on Saturday night last, I referred to the abuse of food relief, and a member of the audience repeated almost verbatim the statement made to-day by the honorable member for Dalley (Mr. Rosevear), that the farmers of New South Wales were asking that men should work for them without wages, or at starvation rates of pay. This person Braithwaite had been in the employ of a local farmer, Mr. S. Morris, at 8s. a day and keep, and he left his job to return to the dole. His wife is still drawing 30s. a week for family endowment.

Mr Rosevear:

– Was he mentally unsound ?

Mr THORBY:

– I am delighted to hear that interjection from a member of the Lang group. While the State Government allows abuses of that character to continue the fact that its food relief bill is disproportionately greater than that of any other State in the Commonwealth is not surprising.

Mr Rosevear:

– Was this case reported to the Government?

Mr THORBY:

– I cannot say, but I know that, in other cases, the police knew of the abuse that was occurring, but dared not interfere.

Mr Riordan:

– The same statement wasmade in Queensland twelve years ago.

Mr THORBY:

– I take exception to that reflection upon my veracity. I have mentioned the names of employer and employee, and the town in which the incident occurred. It is but an illustration of what is happening in New South Wales under the present regime. Unless the State Government realizes its responsibility, both to its people and its creditors, and demands of the citizens of New South Wales whatever sacrifice may be necessary to enable them to meet their obligations, the people will be led into a fool’s paradise, for it is certain that, in the near future, they will be forced to make even greater sacrifices, and even be involved in disaster of a character which no honorable member cares to contemplate. Not only is the Lang policy destroying the credit of New South Wales and the Commonwealth generally, but the neglect of that State to honour its obligations is throwing increased burdens on the people of other States.

The honorable member for Dalley said that a large proportion of the New South Wales interest bill in respect of which the State Government has defaulted represents exchange. The position of New South Wales is not different from that of other States which have met their obligations; New South Wales alone has defaulted, notwithstanding that it derives from the high exchange rate a greater advantage than any other State. We must not forget that, whilst the high exchange rate applies adversely in respect of the payment of interest oversens, it operates beneficially in respect of exports from the Commonwealth. Although the adverse exchange may increase the interest bill by £7,000,000 per annum, it has increased the receipts from exports by approximately £30,000,000, leaving Australia over £20,000,000 in credit.

Mr Rosevear:

– The Australian public pays in respect of both interest remittances and the increased prices from the sale of products overseas.

Mr THORBY:

– What private business man would hesitate to expend £7,000,000 in order to get a return of £30,000,000? But for the exchange conditions, the primary industries of Australia would be in a hopeless position. To-day, wheat is worth approximately 2s. 6d. per bushel at country stations in New South Wales; if the exchange rate were normal, wheat would be selling at less than 2s. Under ‘the most favorable circumstances, the average price for the Australian wool clip will not average more than Sd. per lb.; without the advantage conferred by the exchange rate, the price would be a little over 5d. per lb. Calm consideration of these facts shows the fallacy of the statement of the honorable member for Hunter (Mr. James), that the present exchange rate is responsible for the difficulties of the New South Wales Government. I am certain that the people of that State do not support the views of Mr. Lang, notwithstanding the huge demonstration in his favour which took place in Sydney recently.

Mr Gander:

– The biggest ever held in Sydney.

Mr THORBY:

– I do not question the size of the crowd, but it included a large number of sight-seers, and I am certain that it did not represent the opinion of the majority of the people of New South Wales. If it did, why docs Mr. Lang hesitate to face the people, and have his cause judged before the court of public opinion? I affirm, positively, that if a secret ballot of the New South Wales Legislative Assembly were taken, Mr. Lang’s attitude would not be endorsed by his so-called followers.

Mr Gander:

– Mention the name of one man who is against his policy.

Mr THORBY:

– Doubtless the honorable member would be gratified if I were so indiscreet as to mention the names of Labour members who are opposed to Mr. Lang; but time will disclose that my statements ave well-founded. A crisis in New South Wales may not be far distant, and if anything happens which we shall have cause to regret, Mr. Lang will have to accept full responsibility for it, because he i3 doing everything in his power to break the laws of the Commonwealth, and even of his own State, and to prevent the people of New South Wales from exercising their undoubted right to declare their will at a general election. I cordially support the hill, believing that it will strengthen the existing legislation, the one purpose of which is to safeguard Australia’s financial position, compel each State to honour its obligations, and thereby maintain the credit of Australia in the eyes of the world.

Mr RIORDAN:
Kennedy

.- The honorable member for Calare (Mr. Thorby) libelled a big section of the community when he referred to abuses of the food relief distributed by the Government of New South Wales. The statement that one man left a job of Ss. a day and keep, to live on a dole of 5s. a week, is too ridiculous to receive credence by even the most infantile mind. The story about government interference with the police is very old. When the Unemployment Insurance Act was first operated in Queensland, similar allegations were made, but upon investigation were proved to be without foundation. The honorable member would condemn the whole working community because in

New South Wales one man who had secured employment, left it, possibly finding it distasteful to him. This Government has been in office for four months, and the revenue which it declared it would obtain from New South Wales has not yet been collected. The honorable member for Parkes (Mr. Marr) said that he would eat his hat if Mr. Lang was not out of power within a fortnight.

Mr Stacey:

– That is an old story.

Mr RIORDAN:

– It may be, but it still stands good. The Premiers were to meet and frame legislation to enable money to be collected from New South Wales. How successful all these efforts have been is shown by the fact that neither the Prime Minister (Mr. Lyons) nor the Assistant Treasurer (Mr. Bruce) will make any statement as to the amount of revenue that has been collected in New South Wales up to date. When the enforcement legislation was before this chamber, I asked the Prime Minister how he intended to collect revenue from the people of New South Wales. He said that if I would read the bill, I would see in it a provision which obliged the banks to pay to the Commonwealth any money held by them for the Government of New South Wales. If a man knows that a garnishee is to be placed on his wages on Saturday morning, he will hang on to his job until Friday night, draw his money and get away. Mr. Lang withdrew his money and got away before any garnishee order could be placed on the money to the credit of the State in the banks.

This Parliament has spent all its time dealing with New South Wales. No effort has been made to find employment for the people of Australia - almost 30 per cent. - who arc in a state of semistarvation. Is confidence likely to be restored in this country by a change of government in New South Wales? The Prime Minister and the Assistant Treasurer say “Yes.” We were assured that when the present Prime Minister took charge of the Commonwealth Treasury, confidence would be restored. Yet the unemployment figures are, still growing. Promises have been made that sums of money will be made available to private enterprise. Will those sums of money enable the farmer to grow more wheat when what he is now producing is unsaleable, or enable the grazier to grow one pound more wool on the sheep’s back? A reduction of their interest rates or their taxation would enable those people to turn their land to greater use, or to bring into use some of the idle land lying alongside existing railways. That would afford greater employment. And if goods capable pf production in Australia could be forced into use, it would enable people to get back to work. In this connexion the present Government has destroyed the work of the previous Government. This “ honest “ Administration, which told us that when it was returned to power it would do something to relieve the unemployment position-

Mr SPEAKER (Hon G H Mackay:
LILLEY, QUEENSLAND

– Order! The honorable member must connect his remarks with the bill.

Mr RIORDAN:

– I am simply replying to remarks made by others who have preceded me. This Government, which is introducing legislation to deal with the Lang plan, allied itself with the supporters of that plan to bring about the destruction of the Scullin Government. The man who led honorable members opposite on the last appeal to the electors was returned to this Parliament to give allegiance to a platform to which he had appended his signature. Within twelve months he dishonoured his pledge. Does such conduct tend to bring about confidence in the country? This afternoon, when the Prime Minister (Mr. Lyons) was telling us how we came through the war, he made no reference to the aftermath - our huge war debt - or to the men whose pensions have been reduced, or to the dependants of those who went overseas, who to-day are being deprived of their sustenance and of the pensions which were promised to them on recruiting platforms.

Mr SPEAKER:

– I have already asked the honorable member to connect his remarks with the bill. I shall not do so again.

Mr James:

– The right honorable member for Cowper (Dr. Earle Page) talked of new States.

Mr SPEAKER:

– I ask the honorable member for Hunter (Mr. James) to withdraw the reflection on the Chair which is contained in that interjection.

Mr James:

– I withdraw it.

Mr RIORDAN:

– When the Assistant Treasurer (Mr. Bruce) was speaking, he said that, during the period of the world war, certain people tried to prevent the troops from going overseas. Am I not justified in . replying to arguments advanced by other speakers?

Mr SPEAKER:

– The Assistant Treasurer simply made the remark to illustrate a point he was making. That is quite different from replying at length without reference to the bill under debate.

Mr RIORDAN:

– How are the amendments contained in this bill to be enforced? Will they serve any useful purpose? Will they secure revenue from New South Wales? As a matter of fact, is it not simply a case of sparring for time until the 21st June? By then, two or three States will have got over their elections. Are these amendments to be made use of if certain State governments are not returned with majorities? The foundation of this legislation is the Financial Agreement, into which I feel confident no State would have entered if it had realized that by so doing it gave the Commonwealth power to step in and collect State revenue. The Financial Agreement not only gives the bondholder a mortgage over the revenue of every State, but also makes the Commonwealth the collector of that revenueon his behalf.

We have reached a stage when the interest bill is too great, having regard to our decreased production. In New South Wales over 30 per cent, of the people are out of production. Throughout Australia an enormous proportion of the people are earning nothing to help to meet the interest on the debt of Australia.

Mr Stacey:

– What is the honorable member’s alternative?

Mr RIORDAN:

- Mr. Speaker would not permit meto mention at this stage the alternative I have to put forward; but I can assure the honorable member that it is not on the lines of the policy put forward by the Prime Minister. When I have an opportunity to tell the House what it is, the honorable member for Adelaide (Mr. Stacey) will be found supporting me, because it will mean getting people back into work and production, and creating real confidence.

I object to the amendments proposed in this bill. To-day, they are directed against the State of New South Wales. In a month or two they may be directed against the States of Queensland and Victoria should those States find themselves in a difficult position, out of which they cannot extricate themselves by direct negotiation. They must act through the Loan Council, and must also ‘ secure the consent of the very people who, along with the Assistant Treasurer, have been responsible for getting Australia into the chaotic condition in which it finds itself to-day. I refer to the bankers. Listening to the remarks of the Assistant Treasurer (Mr. Bruce) to-night, one would imagine that somebody other than he was responsible for the present deplorable condition of affairs. Actually the right honorable gentleman and the right honorable member for Cowper (Dr. Earle Page) are the two who are mainly responsible for the existing position.

Mr Thompson:

– How can the honorable member make that assertion?

Mr RIORDAN:

– Because those two gentlemen were in office during the most prosperous years ofAustralia, and they indulged in a mad orgy of borrowing, sinking millions of pounds into nonproductive works. They wasted fortunes in producing futile legislation such as that which is now before us. I suggest to the honorable member for Calare (Mr. Thorby) that he should not fall so easily for these chestnuts about the dole. I guarantee that if he endeavours for a few months to keep himself and his family on the dole, he will never again make such ridiculous statements on the subject.

Mr GANDER:
Reid

.- I desire to enter my protest against this bill, and also to reply to some of the remarks that were made by the Assistant Treasurer (Mr. Bruce), who alleged that the present Premier of New South Wales had not made any endeavour to adhere to the conditions of the Premiers plan. Actually, the reverse is the case. Mr. Lang attended the Premiers Conference which formulated the well-known plan, and upon . his return to New South Wales he immediately called together and consulted the members of his party, and instructed the parliamentary draftsman to draft a measure that was designed to reduce the salaries of the Premier, Ministers of the Crown, the parliamentarians and public servants of that State to £500. The measure was passed by the Legislative Assembly, but rejected by the Legislative Council, the friends of the honorable member for Warringah (Mr. Parkhill) throwing it out after scant consideration. That is .one of the reasons why Mr. Lang has been unable to adhere to the letter of the Premiers plan. That gentleman made a solemn pledge to the people of his State that he would not reduce the basic wage, family endowment, widows’ pensions, or interfere- with benefits granted under the Workmen’s Compensation Act, and I assure this Government that he will honour that promise while he remains in office, which will be for another eighteen months at least.

The honorable member for Calare (Mr. Thorby) alleged that if a secret vote were taken among the 55 members of the Labour party in the New South Wales Assembly, Mr. Lang would be deposed as leader. I do not know on what the honorable member bases his assumption, but I and others are aware that certain influences have offered every inducement to various members of the New South Wales Labour Parliament to break away from the party. It is almost unnecessary to add that those underhand efforts proved fruitless. I assure honorable members that the Labour party of New South Wales was never more solidly behind its leader than it is to-day.

I was surprised to note that, after the Leader of the Opposition (Mr. Scullin) had intimated that he had received no’ advice from the Government that it intended to introduce this bill, the Leader of the Country party (Dr. Earle Page) rose and read his speech from a typewritten statement, proving conclusively that he must have been in close consultation with the Government on this subject. The right honorable gentleman declared that the time is not far distant when the Federal Government will have to consider taking over the whole of the social services of New South Wales. I am aware that that is one of the desires of this Government, and that fact, associated with the prepared statement from which the right honorable gentleman read

Ifr. Gander. his speech, confirms the opinion that he has collaborated with the Government, with regard to this bill. Probably this Government will endeavour to take ‘over the tramways, the railways, the hospitals, schools, police, and other services of New South Wales. But I should like to know whether it will pay the officers engaged in those services the wages they are now receiving, or whether it proposes to pay them the rate approved at the recent Premiers Conference, £2 Ils. 6d. a week?

Despite what certain individuals in other States may say, the majority of the people of New South Wales are solidly behind J. T. Lang.

Mr Stewart:

– Nonsense !

Mr GANDER:

– -lt is all very well for the honorable member for Parramatta (Mr. Stewart) to laugh, and to say “ Nonsense “. Let the honorable member speak at the Parramatta Town Hall any night next week, proclaiming his intention to deal with this measure, and then a few nights later let my leader, the honorable member for West Sydney (Mr. Beasley), or Mr. Lang speak on the same subject, and I guarantee that the streets and the hall will be filled with three times as many people as assemble to hear the honorable member for Parramatta. Last night I attended a meeting at Granville, at which the honorable member for West. Sydney (Mr. Beasley) spoke. I attended many meetings during the last general election, a time when the people were at fever heat, but never have I witnessed in that district such a tremendous and enthusiastic meeting as that which gathered last night to hear my leader; and I have lived in that area for 25 years. This Government is making a tragic mistake if it believes that it can ride roughshod over the people of New South Wales. We who belong to the Labour movement of that State say that Mr. Lang is right, and know that the bulk of the people of New South Wales would do anything for him. If this Government attempts to put the bill into operation and sends bailiffs into the different State departments, it will find that its efforts will bc opposed by a large section of the people of New South Wales, who will endeavour to prevent it from tramping on .their rights. I warn the Government not to go too far. The Leader of the Opposition (Mr. Scullin) very properly struck a warning’ note, and reminded the Government that there are 400,000 unemployed in Australia. Honorable members know what happened recently in Auckland. I urge the Government not to goad the people of New South Wales into taking action that will bring disaster upon the nation. I agree with the honorable member for Dalley (Mr. Rosevear) that this measure should be thrown into the waste-paper basket, and I trust that the Government will take his advice. Let the Prime Minister and his colleagues immediately get into touch with the Premier of New South Wales and endeavour to bring about a reconciliation, which will avoid the suffering that must inevitably result if this bill becomes law.

Mr THOMPSON:
New England

– The honorable member for Reid (Mr. Gander) made a great noise about the alleged indignation of the people of New South Wales over the action that this Government is taking to compel the Lang Government to stand up to its obligations to the Commonwealth and the people of that State. He had the sublime audacity to warn this Government in the name of the people of New South Wales, not to go too fa:; ! I represent the people of that State just as much as he does. The honorable member represents one of the industrial electorates of Sydney, which contains n very large proportion of the population that is supporting the Lang Government, a section that was no doubt largely represented at the packed meeting that was hold in the Sydney Town Hall last week, and hailed by the Labour organizations as representative of the people of the Mother State. If the honorable member, the representative of an industrial centre, is so confident that ho can speak here for the people of New South Wales generally, I am equally confident as the representative of a country electorate of that State when I warn the Government of New South Wales not to go to the country. If it docs, as surely as the sun will rise tomorrow it will sound its own deathknell. The honorable member, Mr. Lang, and all bis satellites know very well that if they go to -the country they will simply be brushed aside as though they did not count - as they really do not in the estima tion of the people of New South Wales. If those gentlemen are so confident about the support of the people of that State why do they not take their courage in their hands and go to the country?

Mr James:

– Why did the honorable member not have more courage on the tobacco issue? He “squibbed” it.

Mr THOMPSON:

– I have never “squibbed “ anything. The tobacco issue has nothing to do with the default of New South Wales. I am prepared to submit the tobacco question to the people of the State. Are the honorable member and his supporters prepared to take like action in connexion with the attitude of the Lang Government?

Mr Gander:

– Supposing that the Lang Government submitted the issue to the people and won ; would the “honorable member guarantee that this Government would then resign? “

Mr THOMPSON:

– It would then be proved that the people of New South Wales supported the policy of default, and the issue would be whether the rest of the people of Australia stood behind a State that represented a policy of dishonesty, of national default, of everything that is rotten and iniquitous in politics.

Mr Gander:

– And they would all throw New South Wales out?

Mr THOMPSON:

– Yes.

Mr Gander:

– What would happen to the Commonwealth?

Mr SPEAKER (Hon G H Mackay:

-Order !

Mr THOMPSON:

– I know that such a condition of affairs would be impossible, but if they were so foolish as to stand behind the Lang Government I should oppose them and assist the Commonwealth Government’ in every action that it proposed to take to uphold constitutional government.

Mr James:

– Would you resign your seat?

Mr THOMPSON:

– Yes, because I would be ashamed to represent such people. The longer the -Government delays in bringing to a head this crisis which has been developing in New South Wales,- the more will the judgment of the people of that State be clouded. I regret very much that members of the Federal Labour party, who, originally, were behind the Government and its supporters in opposition to this policy of default by the Government of New South Wales, have changed their colours. When they were in power they gained a good deal of kudos from the action of the Scullin Government against Mr. Lang. The then Prime Minister (Mr. Scullin), who is now the Leader of the Opposition, made a number of impassioned speeches in which he assured the House that his Government would take every step necessary to uphold the rights of the Commonwealth.

Mr Gander:

– The honorable member himself has made a number of impassioned speeches in defence of the tobacco industry.

Mr THOMPSON:

– And I may make many more, when I get an opportunity to do so. The Leader of the Opposition, when in office, assured all parties in this House that the Labour party would never stand . for a policy of national default, and that whatever steps might be necessary to compel Mr. Lang and his Government to honour their obligations, would be taken by his Government. Now what do we find? Obviously, the federal Labour members have run away from the issue. Judging by the speeches delivered this afternoon by the Leader of the Opposition and other members of the Labour party, especially the honorable member for Kennedy (Mr. Riordan), to all intents and purposes they are now supporting the policy of Langism. In Victoria we see the Acting Premier, as the leader .of the Labour party in that State, facing the electors definitely in opposition to certain proposals contained in the Premiers plan. This means that he and his supporters are virtually endorsing the policy of the Premier of New South Wales. It should also be remembered that the Leader of the Opposition in this House was on the platform with the Acting Premier of Victoria when he opened his election campaign in Melbourne last week, and gave absolute support to the policy which he put before the electors of that State. From all this we are quite justified in assuming that, however good were the intentions of Labour members last year, and however loyal they may have declared themselves to be towards these definite issues of honesty and political straight-going in Australia, they have since changed their opinions and are now marching steadily, and perhaps much more rapidly than they realize, right into the camp of the Langites - the very people who, a short time ago, they were denouncing! from every platform in Australia.

It is much to be regretted that recent events have revealed that the honest elements in the politics of Australia can no longer depend ou the Federal Labour party to back them in this fight. It was generally understood that, in this Parliament at all events, the conflict as between the Commonwealth and the Government of New South Wales was of a non-party character. Now it appears to be definitely a party fight. Members representing the United Australia and Country parties have to support the Commonwealth Government unaided, no matter where the issue may lead them. I know the country people in New South Wales pretty well. During the recess I was in close touch with them, and I can safely say that the great majority of them are totally opposed to the Lang Government. Therefore- I consider that country members in this House are perfectly justified in standing behind the Government on this issue, and in urging it to take whatever steps it thinks are necessary to settle this matter once and for all. It must be settled very soon. Things cannot be allowed to drift as they have been drifting during the last few weeks. However much we may differ from the Ministry upon tariff and other questions, the Country party to a man in this House is behind the Government in this matter. We regard this issue as paramount in the politics of Australia, and our earnest desire is- to see all necessary action taken to vindicate the honour of this country in the eyes of the world. We desire confidence to be restored and to banish, for all time, any suggestion of that rottenness which has been in evidence lately. Upon this issue the Country party will support the Government in any action which it may take.

This measure authorizes the Commonwealth to take further steps to compel the Government of New South Wales to relax its opposition to federal pressure to honour its obligations. Up to the present, the opposition of the Lang Government has been more passive than active, but it is open to question whether the State Government has not definitely violated the Federal Constitution, because the High Court has ruled that all steps taken by the Commonwealth Government have been strictly constitutional. Since it is now arguable that the Government of New South Wales, by its defiance of Commonwealth authority, has violated the Constitution, the National Parliament may be authorized to take extreme steps, even of an extra-constitutional nature, to vindicate its undoubted powers, and to save the Commonwealth from being wrecked. The attitude of the New South Wales Government and of its representatives in this House, suggests that a very provocative and, in fact, rebellious spirit is gradually being engendered in New South Wales against the Commonwealth, and I fear that if this Government allows the position to drift too far, Mr. Lang, in his fanatic assumption that the people of his State ure behind him, may commit some overt or revolutionary act; that he may, in fact, attempt forcibly to resist the authority of the Commonwealth. I sincerely hope that such a stage will not be reached, but, from the nature of the speeches delivered this afternoon by the supporters in this House of the Lang Government, I am afraid we shall not have very long to wait before grave developments occur. For this reason, I repeat that the sooner the Commonwealth joins issue with the State Government the better for all concerned, because the people in New South Wales are tired of waiting. The majority of them have faith in the Com.mon wealth Government.

My only concern, at the moment, is that the honour of Australia shall be vindicated. Everything else is subsidiary. I fear that if this Government does not promptly take drastic measures to assert its authority, the hot-heads in New South Wales who control the1 government of nhat- State may take the bit in their teeth and precipitate a crisis which the Commonwealth may be unable to handle adequately and in a constitutional manner. As honorable members are aware. our constitutional powers are limited. The Commonwealth has not the right to take coercive steps against any State without first obtaining the authority of the High Court, and in the present circumstances it is doubtful that it would have a free hand in adopting coercive measures against the Government of NewSouth Wales. It has taken certain steps. It has affirmed its intention to compel any government which defaults to meet its obligations. The honorable member for Kennedy (Mr. Riordan) mentioned this afternoon that possibly other States also would default in their interest payments, and asked if similar measures would be taken against them. I say without hesitation that if any State defaults in the same way that New South Wales has defaulted, the Commonwealth will be obliged to adopt the same measures against it.

Mr Riordan:

– I did not say that other States might default. I said that other States might have to declare their inability to pay.

Mr THOMPSON:

– It amounts to the same thing. The honorable member has merely used a more euphemistic term. Mr. Lang has declared that he is not in a position to pay; we say that his is a case of straight out default. Therefore, if any other State defaults in the same circumstances the Commonwealth will have to take similar action against them, otherwise its authority will disappear completely.

This issue involves the whole future of the Commonwealth as well as of the States. If the Commonwealth is” beaten in this fight with New South Wales, if it is unable to vindicate its legal right to collect money due to it through the default of a State, it will not be long before its financial strength will be destroyed, and this Parliament might as well cease to function. Then the States will revert to the condition that obtained in pre-federation days. I say in all seriousness that this bill definitely involves the whole future of the Commonwealth arid the States. The onus is now Upon us to vindicate our authority. This is the first occasion upon which the Commonwealth has sought to impress its superior sovereignty upon sovereign States, and it is immediately challenged by one of them. If the New South Government wins in this fight it will be clear proof that the Commonwealth’s sovereignty is inferior to that of the States; and that will mean the end of the Commonwealth, because. Commonwealth sovereignty being inferior, the States will then assert their power over the central government, and will gradually strangle the whole future development of Australia as a nation.

The present position cannot be allowed to drift. The Commonwealth is entitled to seize further State revenues to reimburse itself in respect of payments made on behalf of the defaulting State. It does not matter what further revenues arc attached so long as the necessary sum is obtained. That is the whole issue. All this talk about child endowment and State lotteries, and winning bets tickets is beside the point - so much “ sob-stuff “ introduced as good material in the event of an appeal to the people. I repeat that the sooner this crisis is brought to a head the better, because the nerves of the people in New South Wales arc on edge. For some months now they have been living in a condition of nightmare, fearful of what may happen from day to day. This unhappy state of affairs is destroying the confidence of the people. They do not know what is going to happen next. . The taxpayers are in a condition of nervous prostration. They fear that if the Commonwealth Government is defeated in its fight with the State Government, Mr. Lang will come down with smashing confiscatory taxes, amounting to a levy upon wealth, which will destroy business and industry in New South Wales. If the Commonwealth Government is beaten in this fight it will be quite possible for the State Government to crucify the unfortunate taxpayers of the State who have paid their taxes to the Commonwealth, and who will be helpless. For simply obeying the law and paying their taxation to the Commonwealth they may be heavily burdened with additional taxation, amounting practically to confiscation. The Lang Government could take this action as an act of revenge. If the Commonwealth Government does not bring matters to a head very soon a big sect ion of the people of New South Wales will take steps to do so.

Mr Gander:

– The New Guard.

Mr SPEAKER:

– Order!

Mr THOMPSON:

– I am not interested in the New Guard, and know nothing about it. But the country people of New South Wales, whom I know best and whom I represent, are in such a mood that if the Commonwealth Government is beaten in this fight and the State Government subsequently carries out it.” vindictive and vengeful threats they will be prepared to take action to precipitate a crisis by seeking the intervention of the British Parliament. The Commonwealth Government cannot allow itself to be defied. If it has no constitutional power to use force against a State which is carrying out a policy like that which the New South Wales Government is now pursuing, it should force the issue. In my opinion the Commonwealth Government has no authority to use military power against a State. This is a great pity, for while I do not think that the Commonwealth Government would have to use force against the people of a State, it should certainly have power to use it against a government which misuses its power, and . prevents the Commonwealth Government from carrying out its legal obligations. Has the Commonwealth Parliament no power at all? Can a State, governed by an administration with the bush ranging instincts of the present New South Wales Government, smash the Commonwealth, and boast about its power to do so? Is the power of the Commonwealth limited to the obtaining of a High Court judgment which cannot be enforced ? It appears that under the Commonwealth Constitution as it stands, the Commonwealth Government has no redress whatever against a State which deliberately sets out with the object of smashing federation, and which has indicated that it will use physical force to do so.

Mr Rosevear:

– We have not said that.

Mr THOMPSON:

– The people - of Australia should be asked to grant additional power to the Commonwealth. This Government should be given absolute and unrestricted power to preserve the federation. I believe that the framers of the Constitution intended that it should have power to use physical force for such a purpose. At a lime when the Commonwealth is being threatened and defied by one section of the people it should surely bc iu a position to defend itself. If it has not that power and cannot obtain it, it cannot live. There should be power in the Constitution to preserve the federation, and to authorize the Commonwealth 10 use adequate physical force for that purpose.

Mr Baker:

– The honorable member is enthusiastic about the use of physical force.

Mr THOMPSON:

– That is not so; but in a position like that which now confronts us, we are forced to face the facts. It appears that there are many people in at least one State who are deliberately supporting a policy which is definitely aimed at destroying the Commonwealth. It we cannot do anything to preserve the federation it will undoubtedly disappear. I contend that the Commonwealth Government should have power to protect itself.

We are facing the first real crisis in i he history of the federation, and the Commonwealth Government should test iis power to the absolute limit. If it finds that a State can defy it, and intends io do so on a vital matter like that with which we are now dealing, it should take steps to correct the position. It should put a question to the people which would ma bic them to give it complete power to defend the Commonwealth.

Mr Gander:

– And shoot down the people of New South Wales.

Mr THOMPSON:

– Not at all, for if a referendum were held the people of Nev South Wales would have just as much right as the people of other States to express their opinion. A provision should be inserted in the Constitution to give this Parliament supreme power to take whatever steps it deems necessary to maintain the Commonwealth.

If the Government thinks that the taking of a. referendum would be too troublesome or too lengthy a process, there is one other step it could take. But, in my opinion, a referendum could be held in a fortnight. I, and the members of the party which I represent, are prepared to support the Government if it submits a proposal to the people to provide for an alteration of the Constitution which would settle the issue of Langism for all time. If the Government thinks that a campaign for that purpose would be too much trouble or involve too great an expense, there is one other thing which it can do. If it finds that the State Government is too strongly entrenched behind. the State Constitution - and it. appears to me that the State Constitution is, in many respects, a more powerful instrument of government than the Commonwealth Constitution - it could approach the British Parliament. It may happen that it is not possible for this Government to implement a policy which will enable it to force the State of NewSouth Wales to meet its obligations. So far, the New South Wales Government has been able to thwart every effort which the Commonwealth has made to assert its authority. It appears to me that our constitutional limitations may be our undoing. The Constitution of New South Wales, which is similar to the constitutions of the other States, may prove to be a more potent instrument of government than the Commonwealth Constitution. Apparently only one man can bring this issue to a head/and that is the Governor of New South Wales. If he cannot, .or will not. take action a week or two after this measure has been put into operation, we may find ourselves at a dead end. If that happens, arc we to acknowledge defeat?

Honorable members interjecting ,

Mr SPEAKER:

– I have called the honorable member for Reid (Mr. Gander) to order several times during the last halfhour. I now warn him that, if he again offends by interjecting, I shall name him. I shall take similar action, in regard to one or two other honorable members on my left if they do not cease interjecting.

Mr THOMPSON:

– If, after the passage of this bill, the Commonwealth Government finds itself at a dead end, the onus will be upon it to take one of two possible steps. It can approach the people _ immediately by referendum, and ask for* additional constitutional power which will enable it to override the State Constitution and implement a policy -which will force the State to fulfil its obligations, or it can go to the final court of appeal - the British Parliament. We shall do well to remember that we get all our power from the British Parliament. Some honorable members who are sitting on my right may scoff at that statement; but the fact remains that our power of government is derived from the Imperial Parliament, which was the; originator of the Australian Commonwealth, and which can settle this issue for us if we cannot settle it for ourselves. If the” Commonwealth Government thinks that the taking of a referendum is too lengthy and too uncertain a process, it can request the Imperial Parliament to act, for the default of New South Wales is a matter of grave importance to Great Britain. Unless something is done speedily to put an end to the present policy of the New South Wales Government, it is quite possible that our whole federation will break down. There may be civil war, or some other form of violence, and the Commonwealth Government will’ be powerless to enforce the laws which this Parliament has passed, and the validity of which has been upheld by the High Court. It may happen that it will be possible for a lawless government, supported by an undisciplined mob which has been goaded and educated by the Premier of New South Wales, to forcibly resist the legislation of the Commonwealth. In these circumstances we should approach the Imperial Parliament, for, if the honour of one British dominion is besmirched, the honour of the whole Empire is involved. If this measure proves to be ineffective, we should ask the British Government to instruct the Governor of New South Wales, who is a servant of the British Crown, to bring about an election- in that State. If the Governor is too frightened to act, or if he thinks that there are constitutional obstacles to his doing so, the Imperial Parliament should take the initiative.

Mr Paterson:

– If he is not “game.”

Mr THOMPSON:

– I have no desire to make a pun on the Governor’s name, but if he; is not game to act on his own initiative, he should be instructed to act by the British Parliament. If this legislation proves to be abortive, the Commonwealth Government should, without delay, either seek complete power from- the people of Australia by way of referendum, or request the British Government to remove from office the present Govern ment of New South Wales. If the present State Parliament were dissolved, and Mr. Lang sent to the people, they could decide whether the charge of default was or was not to be fastened upon them.

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

– As the Government desires that this bill shall he passed this evening, and as I do not think there is any need for me to add anything to what I have said, and what the Assistant Treasurer (Mr. Bruce) said earlier this afternoon, I shall not detain honorable members by replying to the debate.

Question - That the bill be now read a second time - put. The House divided. (Mr.- Speaker - Hon. G. H. Mackay.)

AYES: 49

NOES: 14

Majority . . . . 35

In committee:

Clause 1 agreed to.

Clause 2 (Effect of payment in accordance with direction of Treasurer).

AYES

NOES

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

– This clause provides that a person who pays to the Commonwealth, under the provisions of the Financial Agreements Enforcement Act, moneys, which,but for that act, would have been payable to the State, shall not suffer by way of fine or other penalty imposed by the State. The clause merely provides that a person who has complied with the law of the country shall not be punished for so doing.

Mr Holloway:

– Is not the federal law supreme ?

Mr LYONS:

– Yes; but as there is a possibility of penalties being imposed by the State it has been thought advisable to make the position perfectly clear.

Mr JAMES:
Hunter

.- This clause is the outcome of press propaganda based on an alleged threat by Mr. Lang, the Premier of New South Wales, to take action against persons who pay taxes to the Federal Treasurer in accordance with the principal act. I do not know that Mr. Lang made any such threat; but probably some taxpayers have been led to fear that they will be penalized and forced to pay double taxation. Although the purpose of the clause may be merely to dispel their fears, I am so strongly opposed to the measure that I shall not allow any clause to pass without opposition, even if that opposition has no other effect than to retard the progress of the bill.

Mr SCULLIN:
Yarra

.- I have made it clear that the Opposition is opposed to the whole of this legislation; nevertheless, I cannot place myself in the position of doing something with which I disagree merely to retard the passing of a bill. The principal act provides that if, in. certain circumstances, money is paid to the Commonwealth the State cannot sue for its recovery. This bill carries that principle a little further; it provides that the State cannot fine such a person. The principal act is now law, and its provisions are enforceable against the taxpayers of New South Wales. It is not a question of whether the law be good or bad.

Mr Holloway:

– In that case this bill is superfluous.

Mr SCULLIN:

– The clause seeks to protect the taxpayers of New South Wales against the imposition of penalties for complying with the law. Is the honorable member for Hunter (Mr. James), merely because he himself does not agree with the law, prepared to support the imposition of a penalty on a taxpayer who has been guilty of no other offence than that of obeying the law? That, in my opinion, is a strange attitude to adopt.

Mr James:

– This clause merely ensures that they will pay their taxes; I do not want them to have to do that.

Mr SCULLIN:

– The honorable member has misinterpreted the position. The object of this clause is to prevent a person from being penalized for complying with the law.

Mr James:

– If the right honorable gentleman were a resident . of New South Wales, he would understand the position.

Mr SCULLIN:

– It may be that I, not being a resident of that State, have a clearer conception of the meaning of this clause than has the honorable gentleman. I shall not, however’, attempt to convert him. Although I do not agree with the law, I do not hold that any one should be penalized for obeying it.

Mr.ROSEVEAR (Dalley) [9.58].- I oppose the clause. We were told to-day by the Prime Minister (Mr. Lyons) that the High Court of Australia held the Financial Agreement’s Enforcement Act to be valid. In that case, the Common1 wealth law is supreme, and therefore I see no need for this further legislation. Should the Premier of New South Wales say to those persons -who appear to be anxious to pay their money to the Commonwealth that he proposes to double the amount payable by them, would that be regarded as imposing a penalty on them, or would it be deemed to prove only that the taxpayer has sufficient money to meet the demands of both the Commonwealth and the State? It is not clear whether the object of this, clause is to induce those taxpayers who, in the confusion caused by the struggle between the Commonwealth and New South Wales Governments, have evaded payment of their taxes to pay them, or whether the Commonwealth Government fears that the High Court will not adhere to its decision that the principal act is constitutional. Since the High Court has placed it beyond doubt that a law of the Commonwealth overrides a law of a State, this amending legislation seems to be superfluous.

Question - That the clause be agreed to - put. The committee divided. (Chairman - Mr. Bell.)

AYES: 0

NOES: 3

Majority . . 51 .

AYES

NOES

Question so resolved in the affirmative.

Clause agreed to.

Clauses 3 and 4 agreed to.

Clause 5 (Resolution specifying further classes of revenue).

Mr.ROSEVEAR (Dalley) [10.11].- This clause requires, I think, a little explanation. Paragraph 2 states -

Upon such a resolution being passed by both Houses of the Parliament, the class or classes of revenue so specified or described shall be deemed to have been specified or described in the prior resolution.

The first resolution carried expressly exempted from attachment funds designed for the relief of unemployment. Would paragraph 2 of the clause have the effect of bringing such revenues within the category of revenues liable to attachment?

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

– It would not have such effect. This amendment merely provides that a second resolution may be passed by both Houses of Parliament specifying additional revenues that may be attached, and if this be clone, they shall be treated as if they were part of the first resolution. Provision is not made in this clause for the attachment of any particular class of revenue. If it were desired to include any particular funds, it would be necessary to pass through both Houses of Parliament a special resolution for that purpose. Such funds would then be treated as if they had been specified in the original resolution, and the prescribed course would ‘ be followed in respect to them. The present amending clause ‘does not interfere with the previous resolution, nor add anything to the list of revenues to be attached.

Clause agreed to.

Clause 6 agreed to.

Amendment (by Mr. Lyons) agreed to -

That the following new clause be inserted: - “ 1a. - Section 4 of the principal act is amended by inserting in sub-section 2 after the word “ (inclusive),”, the word and letter “thirteen A,”.”

Title agreed to.

Bill reported with an amendment; report adopted.

Third Reading

Motion (by Mr. Lyons) - put -

That the bill be now read a third time.

The House divided. (Mr. Speaker - Hon. G. H. Mackay.)

AYES: 42

NOES: 14

Majority … ‘ . . 28

AYES

NOES

Question so resolved in the affirmative.

Bill read a third time.

page 53

ASSENT TO BILLS

Assent to the following bills reported : -

Lands Acquisition Bill. War Service Homes Bill.

page 53

PAPERS

The following papers were presented : -

Commonwealth Bank Act - Balance-sheets of Commonwealth Bank and Commonwealth Savings Bank, and Statement of the Liabilities and Assets of the Note Issue Departmentat 31st December, 1931 ; together with the Auditor-General’s Reports thereon.

Elections and Referendums - Statistical Returns in relation to the Senate Elections, 1931; the General Elections for the House of Representatives, 1931 ; together with Summaries of Elections and Referendums, 1903-1931.

Elections. 1931 -

Statistical Returns showing the voting within each Subdivision in relation to the Senate Elections and the General

Elections for the House of Representatives, 1931, viz.: -

New South Wales.

Queensland.

South Australia.

Tasmania.

Victoria.

Western Australia.

Statistical Returns showing the voting within each Subdivision in relation to the General Election for the House of Representatives, 1931, for the Northern

Territory. ‘

Arbitration (Public Service) Act - Determinations by the Arbitrator, &c. -

No. 4 of 1932 - Australian Postal Electricians Union.

No.5of1932 - Common Rule re Sick Leave.

Contract Immigrants Act - Return for 1931.

Defence Act - Regulations amended - Statutory Rules 1932, No. 37.

Immigration Act - Return for 1931.

Naval Defence Act - Regulations amended - Statutory Rules 1932, Nos. 32, 33.

Navigation Act - Regulations - Statutory Rules 1932, No. 26.

Public Service Act - Regulations amended (Parliamentary Officers) - Statutory Rules 1932, No. 31.

Railways Act - By-laws Nos. 57, 58.

Scat of Government Acceptance Act and Seat of Government (Administration) Act-

Ordinances of 1932 -

No. 9 - Liquor.

No. 10- Trustee.

No. 11 - Weights and Measures.

Meat Ordinance - Regulations amended. Public Health Ordinance - Regulations amended.

Wheat Bounty Act - Regulations amended - Statutory Rules 1932, Nos. 25, 38.

Wine Overseas Marketing Act - Regulations amended - Statutory Rules 1932, No. 39.

The following answers to questions on notice were circulated: -

page 53

QUESTION

WIRELESS LISTENERS’ LICENCES

Mr GUY:
BASS, TASMANIA

asked the PostmasterGeneral, upon notice -

Will he state the number of wireless listeners’ licences issued by his department in each State of the Commonwealth as at the 30th March last?

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

– The number of wireless licences in force as at 30th March, 1932, in each State is as follows: -

page 54

QUESTION

NEW GUINEA

Police Uniforms - Murder and Assault of Whites - Court of Criminal Appeal - Judges and Magistrates - Position of Mr. J ohn Walstab.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

asked the Prime Minister, upon notice -

1. Have new uniforms recently been adopted for and issued to the native police in the Mandated Territory of New Guinea?
2. If so, who recommended the change?
3. Of what did the old uniform consist?
4. Of what does the new uniform consist?
5. What is the additional cost per annum involved in the change?
6. When did the change take place?
7. Are other male natives allowed to cover the top parts of the body?
8. If not, is this because of medical opinion?
9. Was medical opinion obtained before the change of uniform was made; if so, did such medical opinion favour the change?

Mr LYONS:
UAP

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

1. The Police Force Regulations made by the Acting Administrator on 18th December, 1931, prescribe that the uniforms, badges, and buttons to be worn by native members of the constabulary shall be as set out in the Third Schedule thereto: provided that the uniforms set out in the Second Schedule to the Police Force Regulations 1923 may be worn until such time as the Administrator directs that their use shall be discontinued.
2. Inquiry is being made of the Administrator. 3 and 4. The particulars asked for, which are somewhat lengthy, will be supplied to the honorable member.
3. Inquiry is being made of the Administrator.
4. See answer to No. 1.
5. Regulation 110 of the Native Administration Regulations forbids male natives, except those specially exempted by a district officer, to wear clothes on the upper part of the body. For the purposes of this regulation “ clothes “ does not include clothing made of native material. Luluais and tultuls, as men of some responsibility, are permitted to wear shirts, subject to such clothing being kept clean. Male natives attending divine service are, at the request of the missions, permitted to wear shirts or singlets, and in this direction the Administration trusts to the co-operation of the missions in ensuring that no such natives wear dirty clothing. Natives engaged in mining and carrying are, pursuant to the law, supplied with jerseys. This is necessary on the Morobe gold-field on account of climatic conditions. District officers issue permits to native motor drivers and crews of vessels to wear clothing on the upper part of the body when exposed to inclement weather. 8 and 9. Inquiry is being made of the Administrator.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

asked the Prime Minister, upon notice -

1. Was a plantation manager named Scott murdered near Buka Passage, in New Guinea; if so, when?
2. Was the murderer convicted; if so, what sentence was imposed?
3. Has the murderer returned to his village; if not, where is he employed?

Mr LYONS:

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

1. The plantation manager was killed by one of his native employees on the 24th February, 1925.
2. The native was charged with having wilfully murdered Mr. Scott. He was convicted of manslaughter and sentenced to imprisonment for five years.
3. The native referred to was, after careful consideration subsequently to his discharge from prison, returned to his own village. He is required to remain in that village, and his general conduct is reported upon by the police quarterly.

Mr.R. GREEN asked the Prime Minister, upon notice -

1. Was a prospector named H. Baum murdered in the Mandated Territory of New Guinea?
2. If so, by whom, and what was the date of the murder ?
3. Were the murderers apprehended; if so, when ?
4. Have they been tried yet; if not, why not?
5. If they have been tried, what sentences were imposed?

Mr LYONS:

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

1. Yes.
2. He was attacked and killed in his camp near the border of New Guinea and Papua on the 23rd April, 1931, by a party of natives?
3. No. The efforts of the Administration to apprehend the natives concerned have so far been unsuccessful. 4 and 5. See answer to No. 3.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

asked the Prime Minister, upon notice -

1. During the last ten years how many whites have been murdered by natives in the Mandated Territory of New Guinea?
2. Were the murderers convicted; if so. what sentences were imposed?
3. How many of those murdered were officials of the Administration?
4. During the same, period, how many whites were convicted of murder or manslaughter ?
5. What sentences were imposed ?

Mr LYONS:

– The information is being obtained, and will be supplied to the honorable member as early as practicable.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

asked the Prime Minister, upon notice -

1. How many natives during the past five years have been convicted of assaulting whites in the Mandated Territory of New Guinea?

   2. What was the nature of such assaults?
   3. What sentences were imposed?
   4. After being convicted and having served sentences of twelve months or more, are the natives returned to their own villages?

Mr LYONS:

– The information is being obtained, and will be supplied to the honorable member as early as practicable.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

asked the Prime Minister, upon notice -

1. Is there a court of criminal appeal in the Mandated Territory of New Guinea?
2. If not, is there any appeal allowed against conviction and/or severity of sentence; if so, to what court?
3. In all cases of murder, manslaughter, or other serious criminal offences charged against a white, is a jury empanelled; if not, why not?
4. How many whites have been convicted of assault during the pastfive years?
5. What is the nature of these assaults?
6. What sentences were imposed?
7. How many appeals have been lodged, and with what result?

Mr LYONS:

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

1. Appeals from a District Court may bo made to the Central Court.
2. See answer to No. 1. The Full Court of the High Court of Australia, consisting of at least two judges, may grant leave to appeal to the High Court of Australia from any conviction, sentence, judgment, decree or order of the Central Court.
3. No. There is no provision in the law of the Territory for trial lay jury. It is not considered that the time has arrived when the jury system could appropriately be introduced into the territory. Provision exists in the Central Court Assessors Ordinance 1925 for the appointment by the Central Court or by a judge of that Court, or in any cause in which natives are interested by the Administrator, of not more than two assessors, who when required by the court, shall give their opinion on any matters of fact, custom or usage, or any other matters arising out of the evidence given at the trial. Assessors shall not, however, adjudicate in any case before the court. 4 to 7. The information is being obtained, and will be- supplied to thehonorable member as early as practicable.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

asked the Prime Minister, upon notice -

1. How many judges are there in the Mandated Territory of New Guinea?
2. What are their names, salaries, dates and terms of appointment, and their present respective ages?
3. What is their status?
4. Can their appointments be terminated; if so, how?

Mr LYONS:

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

1. Two.
2. David Sydney Wanliss (Chief Judge) - Salary, £1,200 per annum; date appointed, 18th April, 192 1; age,68 years. Frederick Beaumont Phillips (Judge) - Salary, £1,100 per annum; date appointed, 29th February, 1928; age, 42 years. Each of these judges holds office during the pleasure of the GovernorGeneral.
3. A judge of theCentral Court has the powers and authority of a judge of the Supreme Court of Queensland in the administration of justice within the territory.
4. See answer to No. 2.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

asked the Prime Minister, upon notice -

1. Are there any stipendiary, police, or acting magistrates in the Mandated Territory of New Guinea?
2. If so, what are their names, salaries, dates and terms of appointment ?
3. What legal qualifications have these persons for the positions held?”

Mr LYONS:

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

1. No. 2 and 3. See answer to No. 1.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

asked the Prime Minister, upon notice-

1. Is Mr. John Walstab employed by the Administration in the Mandated Territory of New Guinea?
2. If so, in what capacity; what are his qualifications for the office he holds ; what are his duties; how long has he held the position, and what is his salary?

Mr LYONS:

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

1. Yes.
2. District Inspector and Superintendent of Police. Four years’ experience as District Officer in the territory, preceded by five years’ active military service as a commissioned officer. His duties are to inspect the work of the administrative staffs in the several districts and to assist generally in the administration of the district services. As Superintendent of Police, Mr. Walstab is in control of the New Guinea Police Force (European and native constabulary ) constituted under the Police Force Ordinance. He was promoted to be District Inspector from 1st May, 1925, and was appointed to be also Superintendent of Police as from 3rd December, 1927. Salary, £852 per annum.

page 56

QUESTION

BISMUTH

Mr GREGORY:

asked the Minister for

Trade and Customs, upon notice -

1. What was the customs tariff duty on bismuth in 1928?
2. What is the present duty?
3. What was the average wholesale price of bismuth in 1928?
4. What is the present wholesale price?
5. Is it a. fact that the Australian production has almost wholly failed to supply the market ?
6. If not, what proportion are Australian makers supplying?

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

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

1. It is assumed that the honorable member refers to bismuth salts. In 1928 the duty on these goods was -

   1. When not packed for retail sale, ad val. - British preferential tariff, free; intermediate tariff, 10 per cent.; general tariff, 15 per cent.
   2. When packed for retail sale, ad val. - British preferential tariff, 15 per cent.; intermediate tariff, 20 per cent.; general tariff, 25 per cent.
2. Per lb, 3s. (British preferential tariff), 4s.6d. (intermediate tariff), and 4s.6d. (general tariff). Primage duty at the rate of 10 per cent, is also chargeable.
3. Particulars regarding average wholesale price in 1928 are not readily available, but the f.o.b. value in 1928 in the United “Kingdom of bismuth carbonate - . the principal bismuth salt in use - varied from 9s. 9d. to11s. 4d. per lb.
4. The present wholesale price of Australian bismuth carbonate is11s. per lb.
5. No.
6. The quantity of bismutli salts produced in Australia last year was approximately 23,000 lb., but it is anticipated that this quantity will be increased. It is difficult to ascertain what proportion of Australian requirements is being supplied by the local producer, but the quantities of bismuth salts imported for the four years ended 30th June, 1931, were - 1927-28, 18,053 lb.; 1928-29, 17,262 lb.; 1929-30, 30.924 lb.; 1930-31, 13,220 lb.

page 56

QUESTION

SALES TAX ON SALTED AND UNCOOKED MEATS

Mr GUY:

asked the Treasurer, upon notice -

Is it a fact that salted and uncooked meats are exempted from the tax under the provisions of the Sales Tax Act; if so, why are mutton birds, which are salted and uncooked, deemed a taxable commodity?

Mr LYONS:
UAP

– Yes; salted and uncooked meats are expressly exempted- from the sales tax. Mutton birds are not meat, nor are they expressly or generally exempted from the tax.

page 56

QUESTION

CONSTRUCTION OP BROADCASTING STATIONS

Mr GUY:

asked the PostmasterGeneral, upon notice -

1. What was the programme of construction of broadcasting stations prepared by the Postal Department about three years ago?
2. What portions of that programme have been or are being carried out, and what portions have been postponed?

Mr FENTON:
UAP

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

1. The programme in 1929 provided for the establishment of- sixteen to eighteen additional broadcasting stations in the various States of the Commonwealth.
2. Four stations have been installed and are now working. A fifth new station to replace 6WF Perth is under construction. It is intended that the remaining stations will be installed as the financial situation permits.

page 56

QUESTION

SEMI-OFFICIAL POSTMASTERS

Mr BLAKELEY:

asked the PostmasterGeneral, upon notice -

1. Under what commission are semi-official postmasters paid their salaries?
2. How does the department arrive at the commissions paid?
3. Will the department show the difference between the profits made from semi-official post offices and those made from official post offices ?

Mr FENTON:
UAP

– The answers to the honorable member’s questions arc as follow : - 1 and 2. Payments to semi-official postmasters are not made on a commission basis. They are paid a fixed annual amount for their personal services and, in addition, special allowances for the provision of subordinate staff, accommodation, maintenance and other miscellaneous services.

3. The information is not available. The commercial accounts of the department show the working results under postal, telegraph, telephone and wireless branches. It is not practicable to assess the working results of the different classes of post offices.

page 56

QUESTION

DUTY ON MANURES

Mr GREGORY:

asked the Minister for Trade and Customs, upon notice -

1. Does the . tariff schedule provide that manures, n.e.i. are to be admitted duty free?
2. Have duties been demanded and enforced on imports of nitrate and other highgrade manures, notwithstanding that Parliament has authorized such manures to be admitted duty free?
3. if so, on what grounds, and for what reason were such duties imposed?
4. is it a fact that manures were classified as chemicals?
5. If so, was such a classification approved by the Tariff Board’.’
6. Is it a fact that a consignment of such manures has been admitted into Victoria duty free, or that any concession was made in relation thereto?
7. If so, will the Minister table all papers relating to any such concession?

Mr GULLETT:
UAP

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

1. Manures not elsewhere included in the tariff are free of duty.

2. Duties are collected on -

   1. Nitrate ofsoda and synthetic nitrate of soda of a purity exceeding 99 per cent.
   2. Synthetic fertilizers having a com bined nitrogenous and phosphatic base, or a combined nitrogenous phosphatic and potassic base.
3. Nitrate of soda of a purity exceeding 99 per cent, being a chemical is dutiable under Tariff Item 281 (L) and synthetic fertilizers mentioned in 2b above have in pursuance of the powers conferred on the Minister by section 139 of the Customs Act 1901-30, been gazetted as substitutes for sulphate of ammonia which is specifically dutiable under Tariff Item 271.
4. See reply to question 3.
5. No, nor was such an approval necessary.
6. Yes. One shipment of synthetic nitrate of soda was admitted into Victoria in 1928 for the reason that it was in transit when the tariff classification was altered.
7. The papers will be placed on the table of the Library.

page 57

QUESTION

CENTRAL AUSTRALIAN GOLD PROSPECTING EXPEDITION

Mr FORDE:
CAPRICORNIA, QUEENSLAND

asked the Minister for the Interior, upon notice - 1.Is it a fact that an English goldprospecting expedition is to be led by Dr. Basedow into Central Australia in the near future?

2. If so, who are the members of the expedition, and have they started out?
3. Where will the base camp be, and is it to he on an aboriginal reserve?
4. What steps has the Minister taken to safeguard the rights of the aboriginals?

Mr ARCHDALE PARKHILL:
Minister for the Interior · WARRINGAH, NEW SOUTH WALES · UAP

– I have no knowledge of any such proposed expedition.

page 57

QUESTION

UNIVERSITY SCHOLARSHIPS FOR CANBERRA

Mr LYONS:
UAP

– On the 17th March the honorable member for Barton (Mr. Lane) asked me a question, without notice, regarding the grant of scholarships by the Council of the Canberra University College.

The matter was brought to the notice of the Council and the following statement has been furnished by the chairman (Sir Robert’ Garran) : -

Whilst the council is aware that there are certain differences in the conditions under which candidates may sit for the- respective Leaving Certificate Examinations of the Universities of Sydney and Melbourne, it is not aware of any disability suffered by Canberra students (who are . applicants for the Council Scholarships) by reason of any difference of standard between those Universities. It is, of course, possible that the council may, in some particular instance, have difficulty in assessing the relative merits of students who have passed different examinations; but such difficulties arc incidental to all selections of candidates upon scholastic qualifications.

The council does not feel that it is under any obligation to grant in each year scholarships to the maximum number available, irrespective of the standard reached.

In administering the funds provided by the Government for scholarships the council has adopted the view that the standard for the award of scholarships should be sufficiently high-

to satisfy the requirements of the State Universities; and

to ensure that the scholars should be able to make good use of their opportunities, and to justify the expenditure of public money upon their education.

It therefore recommends the award of a scholarship only in cases in which it considers that the standard reached by the applicant is sufficient to justify the award.

page 57

MINISTERIAL CHANGES

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

– by leave - I desire to inform the House that, consequent upon the re-organization and amalgamation of the activities of certain Commonwealth departments, the following ministerial changes have taken place: - .

Hon. R. A. Parkhill, M.P., formerly Minister of State for Home Affairs and Minister of State for Transport, to be Minister of State for the Interior.

Hon. C. A. S. Hawker, M.P., formerly Minister of State for Markets and Minister of State for

Repatriation, to be Minister of State for Commerce.

Hon. C. W. C. Marr, D.S.O., M.C., V.D., M.P., Minister of State for Health, . and formerly Minister of State for “Works and Railways, to be also Minister of State for Repatriation.

Copies of Commonwealth Gazette No. 35, of the 14th April, 1932, embodying the revised administrative arrangements of the Commonwealth approved by His Excellency the Governor-General in Council have been placed in the Library for the information of honorable members.

page 58

IMPERIAL ECONOMIC CONFERENCE AT OTTAWA

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

– by, leave - As announced on the l7th February the Australian Delegation to the forthcoming Imperial Economic Conference at Ottawa will consist of the Right Honorable S. M. Bruce, C.H., P.C., M.C., M.P., Assistant Treasurer, and the Honorable H. S. Gullett, M.P., Minister for Trade and Customs. I have now to intimate that they will be accompanied by the following officers: - Dr. A. E. V. Richardson, M.A., D.Sc, Director of the Waite Agricultural Institute; E. Abbott, Deputy Comptroller-General of Customs; J. F. Murphy, Chief Investigating Officer of the Development Branch ; A. C. Moore, Department of Trade and Customs; L. E. Stevens, Department of Commerce; C. B. Carter, Department of Commerce; Mrs. F. M. Grant, Private Secretary to the Minister for Trade and Customs; Mr. Murphy will act as secretary to the Delegation.

Invitations were extended to representatives of industry and commerce to act as consultants to the Delegation, and those invitations have been accepted by Messrs. R. W. Knox, a former president of the Melbourne Chamber of Commerce ; S. McKay, of McKay, Massey Harris Proprietary Limited; H. W. Osborne, Western District Co-operative Produce Insurance Company Limited; and F. H. Tout, of the Graziers Association.

An invitation was also extended to, and accepted by Mr. M. B. Duffy, who has had a lifelong association with the

Labour movement in Australia, and who is a member of the Commonwealth Bank Board.

page 58

ADJOURNMENT

Death of Sir Adrian Knox - Fire at Greta Colliery - Cheap Fuel for Tractors.

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

– In moving -

That the House do.now adjourn,

I desire to intimate to honorable members that the Government has just received the sad news that Sir Adrian Knox has passed away. I should like to place on record the regret of the Government that so great a figure has disappeared from the public life of Australia. The late Sir Adrian Knox had a notable career at the bar and a very distinguished and honorable career as Chief Justice of the High Court of Australia, and his name will always be associated with the constitutional and legal history of this country in such a way as to be a source of pride to his family. We regret very much that so distinguished, so able, so fine a citizen should have passed away at what is a comparatively early age. The Government extends to his relatives in their bereavement, and to the people of Australia as a whole, its profound regret at the death of so eminent a citizen.

Mr SCULLIN:
Yarra

.- I join with the Prime Minister (Mr. Lyons) and other honorable members in expressing regret at the unexpected death of Sir Adrian Knox, who occupied a very important public position in Australia. He had a very thorough grasp of constitutional law and had built up for himself a reputation in that sphere that will always be remembered by those who have followed the constitutional history of this country. I join with the Prime Minister and other honorable members in expressing to his relatives our sincere sympathy.

Mr JAMES:
Hunter

.- I take this opportunity of directing the attention of the Government to the fact that a valuable asset to this nation - the Greta coal measure - situated in my electorate is at present on fire. This seam, which is one of the most valuable in the world, as the result of a subsidence in the old workings, is now on fire. An application has been made to the State Government of New South Wales by the Mayor of Greta aud the Miners Federation to safeguard the collieries adjacent to the old mine which has been closed for 30 years owing to an explosion, as the result of which the bodies of some of the men who lost their lives were never recovered. This fire is in close proximity to the interstate railway, and is endangering transport between New South Wales and Queensland.. If it is not extinguished by filling in the cavity, and so Smothering the flames, New South Wales and Australia will suffer a severe loss. There is in close proximity to this coal-mine another mine which has been burning for the past 40 years, and if something is not done to extinguish the fire at the Greta mine, it may continue for a number of years, and one of our greatest national assets may be destroyed. Although coal fuel has to some extent been superseded by oil fuel, the oil-fields will not last for all time and if this coal seam is saved from destruction. it may be of great value to Australia in years to come. I appeal to the Prime Minister to make available to the municipality of Greta the sum of £2,000 to enable it to carry out the work of filling in ,the cavity and thus preserve this coal seam in’ the interests of the nation.

Mr WATKINS:
Newcastle

.- I support the remarks of the honorable member for Hunter (Mr. James). The fire at the Greta coal mine can be extinguished by two methods ; one by preventing the air from fanning it, and the other by flooding the mine. It would be difficult to flood the mine in view of the scarcity of water- at the mine. This is a highly bituminous seam. The Maitland coal-field throughout contains a high percentage of pyrites, and when a subsidence occurs, there is always the danger of an outbreak of fire. Steps should be taken to check the fire and to prevent it from spreading to Rothbury and adjacent mines.

Mr NOCK:
Riverina

.- I wish to bring before the House a matter which is of serious concern to the farmers generally, and which is very much akin to restraint of trade. Many of our producers depend upon tractors for the sowing of their crops. There has recently been placed upon the market a certain fuel which is available to the owners of a certain type of tractor at a price approximately 6d. per gallon below the price of ordinary engine fuel. The firm which has been selling the fuel has . refused absolutely to sell it to the owners of other types of tractor on the ground that it is unsuitable. But the fact is that this fuel has been obtained indirectly by owners of other tractors and found to be quite satisfactory. I have received a complaint in this respect from the Wagga “ district, and I know that the farmers in my own district and the western parts of New South Wales are also affected. I suggest that the Minister for Trade and Customs (Mr. Gullett) should try to come to some arrangement with the oil companies to make available to farmers who use tractors fuel at a reasonable price, so that they can produce their wheat economically, and dispose of it profitably on the world’s market. .Cheap fuel is absolutely necessary for the farmer in view of the low price that he receives for his product. It is impossible for the producers who use tractors to change over to horses. Horses are not obtainable and even if they were, the farmers could not afford to purchase them. It has been suggested to me that the distributors of tractors have had something to do with the arrangement to restrict the sale of this fuel. I have used the fuel in my own tractor which is not supposed to be suitable for it. My son after taking down the tractor has found the valves and other internal parts to he in quite as good order as when a higher grado and more expensive fuel was being used. This is a matter of great importance to the producers, and I ask the Minister to take some action in their interests.

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

.- I shall bring under the notice of the Minister for Trade and Customs the matter raised by the honorable member for Riverina (Mr. Nock). I do not know whether anything can be done to help the producers in the direction indicated by him ; hut I am sure that the Minister will use his best efforts in their interests.

The Government recognizes the seriousness of the fire at the Greta coal mine, which has been referred to by the honorable member for Hunter (Mr. James) and the honorable member for Newcastle (Mr. Watkins). I am afraid that I cannot hold out much hope that the Commonwealth Government will intervene, because it is a matter solely for the State Government concerned. Similar events have occurred in the other States, and it has never before been suggested that the Commonwealth Government should intervene.

Mr James:

– On one occasion Tasmania received £5,000 from the Commonwealth.

Mr LYONS:

– That was a proposition quite different from this, and, in any case, I was not responsible for the action of the Federal Government, because at that time I was not a member of the Federal Parliament. If this mine is of such importance, and is likely to he of value to New South Wales, surely it should receive the attention of the State Government. In the circumstances, and in view of the amounts that we are paying on behalf of the Government of New South Wales to-day, wo can hardly be called upon to take up additional burdens on its behalf.

Question resolved in the affirmative.

House adjourned at 10.38 p.m.

Cite as: Australia, House of Representatives, Debates, 27 April 1932, viewed 22 October 2017, <http://historichansard.net/hofreps/1932/19320427_reps_13_134/>.