House of Representatives
18 October 1932

13th Parliament · 1st Session



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

page 1306

UNITED KINGDOM. AND AUSTRALIA TRADE AGREEMENT BILL

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES

– I ask the right honorable the Prime Minister what procedure will he adopted when discussing and voting upon the decisions embodied in the agreement between Great Britain and Australia signed at Ottawa? Will the schedules of the approving bill be discussed and voted upon separately, or will they be taken as part and parcel of the bill as a whole?

Mr LYONS:
Prime Minister · WILMOT, TASMANIA · UAP

– This matter was to be discussed with the Minister for Trade and Customs (Mr. Gullett). His indisposition renders that impracticable at present, but as soon as possible I shall make an announcement as to the procedure to be adopted.

page 1307

QUESTION

TASMANIAN TOURIST TRAFFIC

OverseasSteamers.

Mr HUTCHIN:
DENISON, TASMANIA

– Has the Minister for Commerce seen the report in the Sydney press of Friday last, that the Peninsular and Orient liner Strathaird, was fully booked for her short cruise from Sydney to Norf olk Island at Christmas time - 1,166 berths being taken in a very short time? If so, does not the Minister think that this substantiates the claim of Tasmania that if first-class mail steamers could carry passengers freely on their ordinary runs from the mainland ports to that State in the holiday season, as was done before the coastal provisions of the Navigation Act were in operation, a new and valuable addition to Tasmania’s tourist trade would result? Will the Government give early attention to this important matter, so that Tasmania may reap the fullest benefit from her tourist facilities during the coming season?

Mr STEWART:
Minister for Commerce · PARRAMATTA, NEW SOUTH WALES · UAP

– I have seen the report referred to. There is nothing to prevent overseas ships from securing permits to carry passengers to Hobart during the apple season. Those in control of overseas vessels have hitherto shown a marked disinclination to avail themselves of this concession, but we hope that they will do so in future, and thus meet the wishes of the Tasmanian people in that regard.

page 1307

QUESTION

RESIDENT MINISTER IN LONDON

Mr MAKIN:
HINDMARSH, SOUTH AUSTRALIA

– In view of some remarks of the honorable member for Corio (Mr. Casey) this week which have been construed to foreshadow the possible early return to Australia of the Resident Minister in London, I ask if the right honorable the Prime Minister is in a position to state whether the construction which has been placed upon his statement is true?

Mr LYONS:
UAP

– The anxiety of honorable members opposite for the return to Australia of the Resident Minister in London (Mr. Bruce) amazes me. I know nothing of the statements of any private member in regard to the matter. I am in constant touch with my colleague by cablegram, letter, and telephone, and know exactly what his intentions are. When I feel that I should indicate to the House what his future movements are likely to be, I shall do so.

page 1307

QUESTION

TARIFF SCHEDULE

Mr CAMERON:
BARKER, SOUTH AUSTRALIA

– I ask the right honorable the Prime Minister, if, in accordance with the agreement signed at Ottawa, the Tariff Board has yet entered upon investigations with respect to the items contained in the tariff schedule submitted to the House, and if not, when does it propose to do so?

Mr LYONS:
UAP

– I shall obtain the information for the honorable member from the Minister for Trade and Customs.

page 1307

QUESTION

MATSON LINE OF STEAMERS

Mr BEASLEY:
WEST SYDNEY, NEW SOUTH WALES

– What action, if any, does the Government propose to take with respect to the points I have raised on previous occasions in connexion with the Matson Line? Is it true that the Government has been advised by the British authorities to tread warily in this matter, and, if so, does that mean that nothing is to be done?

Mr LYONS:
UAP

– This matter was discussed by the Ministers who represented Australia at- the Ottawa Conference, but owing to the indisposition of the Minister for Trade and Customs, there has not been an opportunity to confer with him on the matter. So soon as an opportunity is afforded, I intend to do so.

Mr Beasley:

– The Government intends to take some action?

Mr LYONS:

– The Minister for Trade and Customs has not yet had an opportunity to state in detail what transpired at Ottawa.

page 1307

QUESTION

EXPORT OF EGGS

Mr McGRATH:
BALLAARAT, VICTORIA

– Will the Minister for Commerce obtain a report from the graders who rejected the 5,000 cases of eggs about which I have already asked questions, and also from the graders who later accepted a portion for shipment? I wish to obtain the report from the graders, not one from the department.

Mr STEWART:
UAP

– I have already taken steps to secure the reports for which the honorable member asks,

page 1308

QUESTION

RABBIT POISON

Primage Duty

Mr NAIRN:
PERTH, WESTERN AUSTRALIA

– Rabbit poison is admitted free of primage duty; but in Western Australia the supply of molasses for manufacturing it is inadequate and the quality unsuitable. Application was made to the Minister for permission to admit molasses for use for this purpose free of primage duty, and the reply received was that that could not be done without a proclamation or a resolution of Parliament. Will the Government consider the issuing of a proclamation or the introduction of a resolution to meet the circumstances ?

Mr PERKINS:
Minister for the Interior · EDEN-MONARO, NEW SOUTH WALES · UAP

– The request of the honorable member will be brought before Cabinet. Even should Cabinet be inclined to grant the request there are difficulties to be encountered.

Mr BERNARD CORSER:
WIDE BAY, QUEENSLAND

– Before the Acting Minister for Trade and Customs considers the withdrawal of primage duty from molasses, will he give consideration to the fact that quantities of Queensland molasses are available for use in Australia, and that if that product is as nauseating to the rabbits and vermin of Western Australia as the sugar industry of Queensland seems to be to the people of Western Australia, it will kill their vermin without the addition of poison?

Question not answered.

page 1308

QUESTION

STARR-BOWKETT SOCIETIES

Mr WATKINS:
NEWCASTLE, NEW SOUTH WALES · ALP; FLP from 1931

-I ask the Prime Minister if the Government has yet come to a decision with respect to the taxation of certain moneys contributed to StarrBowkett societies?

Mr LYONS:
UAP

– No decision has yet been reached. The matter is still being considered by Ministers and by the Treasury officials. So soon as a decision has been reached, nn announcement will be made.

page 1308

QUESTION

OVER-PRODUCTION OF OATS

Mr CAMERON:

– In view of the possibility of a very heavy overproduction of oats in Australia this year, will the Minister for Commerce, through the Markets Department, endeavour to obtain additional markets for this grain, and make arrangements for it to be properly graded before it leaves Australia?

Mr STEWART:
UAP

– The Government will gladly co-operate in any effort to secure additional markets overseas for our surplus production of oats. The grading of the grain is a function of the State departments, which will he communicated with on the subject.

page 1308

QUESTION

FIJI BANANAS

Mr BERNARD CORSER:

– I ask the right honorable the Prime Minister if the banana industry was inquired into by the Tariff Board before a reduction in duty was decided upon, and, if not, whether the policy adopted was the result of a decision at Ottawa, or of a decision of the Cabinet?

Mr LYONS:
UAP

– The decision was reached between the members of the Government and its delegates at the Ottawa Conference.

Mr BAKER:
OXLEY, QUEENSLAND

– Is the Prime Minister aware that the following motion in regard to the banana industry was carried without a division in the Queensland Parliament on Friday last: -

That the Parliament of Queensland views with great alarm, and strongly protests against, the action of the Federal Government in drastically amending the existing embargo against the importation into the Commonwealth of bananas grown by coloured labour.

That this Parliament is firmly of opinion that such action will result in the sacrifice in Queensland of the banana industry, with resultant loss to many growers, including returned soldiers, to other industries, and concomitant increase in unemployment in this State.

That this Parliament also agrees that such action of the Federal Government is a distinctbreach of faith and repudiation of the arrangements between the Governments of the Commonwealth and this State, when on the imposition in1921 by the Commonwealth of the embargo, this State passed complementary legislation having for its object the copduct of the banana industry on the principles of a White Australia.

That a copy of this resolution be forwarded to the Prime Minister of the Commonwealth for earnest consideration accordingly.

Will the right honorable gentleman advise me whether the Commonwealth Government intends to take any action to prevent the lifting of the existing embargo against the importation of cheap bananas into Australia?

Mr LYONS:

– Replying to the honorable member I cannot do better than read the telegram which I sent to the Speaker of the Queensland Parliament in acknowledgment of his message on this subject. It was as follows: -

Your telegram fourteenth regarding importation bananas. I deplore somewhat extravagant terms in which protest is framed, which suggest misunderstanding of true position.

That remark also applies to the honorable member who has asked this question. The telegram continued -

There isno embargo on the importation of bananas except such as is created by an extremely high duty. By no stretch of imagination can the concession sacrifice Queensland industry, as importation is limited to forty thousand centals per annum. This is comparatively insignificant as compared with an Australian production of about two million three hundred thousand bushels per annum, and amounts to about two point seven per cent. of Australian production, while concession will bring material advantages to Australian trade.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– Was the recent reduction of duty on Fiji bananas recommended by the Tariff Board?

Mr LYONS:

– I have said that the reduction of duty was agreed upon by the delegation at Ottawa and the Government in Australia acting in concert.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– Was the reduction of duty recommended by the Tariff Board ?

Mr LYONS:

– I am inclined to think that this particular reduction of duty was not referred to the Tariff Board, but I shall ascertain the exact information for the benefit of the honorable member.

page 1309

QUESTION

INFORMAL TARIFF DISCUSSION

Mr PROWSE:
FORREST, WESTERN AUSTRALIA

– A report appears in the press this morning to the effect that the Prime Minister and the Leader of the Opposition, during a visit to Sydney, from which they have just returned, debated certain tariff matters in a very friendly manner at the annual dinner of that august body, the Chamber of Manufactures. I should like to know who won the debate?

Question not answered.

page 1309

QUESTION

REDUCTION OF TAXATION

Mr FORDE:
CAPRICORNIA, QUEENSLAND

– I direct the attention of the Prime Minister to the following statement which appeared in the Melbourne Herald on the 13th October: -

Although the Prime Minister officially deprecates anticipation of an early reduction of federal taxation, it is known that recent Cabinet discussions have determined the Government to aim at tax reduction as the next step in its programme.

Is there any truth in that statement? In any case, will the Government take into consideration the restoration of pensions before proposing any reduction of taxation?

Mr LYONS:
UAP

– As was intimated in my budget speech, the desire of the Government is to grant some relief from taxation at the earliest possible moment consistent with the financial position of the country; but I am unable to say when such relief will be granted. So soon as a decision is made on the subject, the Parliament will be informed, because it will have to be asked to approve of what may be proposed.

page 1309

QUESTION

TARIFF OF THE UNITED STATES OF AMERICA

Mr GABB:
ANGAS, SOUTH AUSTRALIA

– Has the Prime Minister noticed a report in this morning’s press to the effect that, in consequence of the heavy tariff in operation in the United States of America, a petition, signed by 180 economists and tariff experts, has been presented to President Hoover, which contains the following statement : -

It is our earnest belief that the farmers, wage-earners, and business men have infinitely more to gain from reductions than increases in tariff rates.

Will the Government, therefore, withdraw the instruction given to the Tariff Board not to take into consideration the protective incidence of primage duties in framing its recommendations?

Mr LYONS:
UAP

– No such definite instruction has been given to the Tariff Board. As the. Minister for Trade and Customs pointed out recently when discussing this subject, it is felt that the Tariff Board will not be justified in taking primage and exchange benefits into consideration in the framing of its recommendations, because these are of a temporary character, and may he removed at any time, regardless of any action that the Tariff Board might take. Primage duties were imposed with the object of raising revenue, not of protecting industry. If protective duties were framed on the basis of the primage and exchange benefits, an untenable and unreliable situation would arise.

page 1310

QUESTION

PENSION REDUCTIONS

Mr JAMES:
HUNTER, NEW SOUTH WALES

– Is the Prime Minister aware that extraordinary hardship has been -caused through the operation of the provisions of the Financial EmergencyAct? Some pensions have been reduced to as little as 3s. a week on the ground that the pensioners own property, no regard being paid to the fact that the property is not revenue-producing. Will the Prime Minister give effect to the promise that he made to the deputation of pensioners which I introduced to him at the Commonwealth Bank, Sydney, in January of this year, that in any amendment of our pensions legislation, attention would be given to the position of pensioners owning property which was not revenue-producing, in order that pensioners should not be called upon to suffer undue hardship ?

Mr LYONS:
UAP

– The matter which the honorable member has .raised, and all other matters relative to pensioners were considered by the Government when its financial proposals were being framed, and also when those proposals were under discussion in this House. The Government’s proposals have now been approved by both Houses of the Parliament, and have become the law of the land. If there is any aspect of the subject which requires further consideration, I am prepared to consider it; in tho meantime, the law, as it stands, must be observed.

page 1310

QUESTION

TOBACCO PLANTERS

Mr McGRATH:

– Will the Prime Minister inform me whether tobacco planting machines fall within the definition of farm implements, a.nd are therefore exempt from sales tax ?

Mr LYONS:
UAP

– I shall obtain the information, and let the honorable member have it as early as possible.

page 1310

QUESTION

EMPIRE TRADE AGREEMENTS

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– Will the Prime Minister inform me whether any arrangement, implied or expressed, was made between the representatives of the Commonwealth Government and the representatives of the British Government as to the time within which the recently made trade agreements at Ottawa must be ratified ?

Mr LYONS:
UAP

– No time was specified for the completion of the consideration of these agreements by the various Parliaments, but there was a definite arrangement that the announcement of the details of the agreements would be made in the Parliaments concerned upon a definite date. That undertaking has been fulfilled.

page 1310

QUESTION

LOAN CONVERSION

Mr MAKIN:

– I direct the attention of the Prime Minister to the following statement which appears in The Stock Exchange Official Record issued on the 12th of October last under the heading “ Loan conversion, and the future of capital “ : -

Even tor Commonwealth loans the eagerness to invest merely proves after all the publicity in London that the rate was fixed too high, and Australia’s financial prestige wo* sadly under-estimated.

In view of that statement, will the Prime Minister secure from the Resident Minister in London (Mr. Bruce) an explanation why the terms of the conversion loan were so unfavorable compared with the terms not only of the loan floated by the British Government, but also of the loan floated by Canada in New York?

Mr LYONS:
UAP

– There is no need to do so. The honorable member knows that the conversion of a loan from 5f per cent, to 3-i per cent, was a wonderful achievement for Australia, and the comparison of the honorable member is entirely unjustified. No other government in the world to-day could obtain such extraordinary terms as those of the loan recently floated by the Government of Great Britain, because no other government enjoys so completely the confidence of the people in financial matters. To suggest that Australia could have obtained terms similar to those of the British Government’s loan, par- ticularly in view of the wild statements that were made by Australian public men advocating repudiation and default, is absurd.

Mr Blakeley:

– I suggest that the Prime Minister be granted an extension of time.

Mr LYONS:

– I thought that the honorable member and his colleagues wanted this information.

Mr BLAKELEY:
DARLING, NEW SOUTH WALES · ALP; FLP from 1931

– Most of the information is misleading.

Mr LYONS:

– I ask, Mr. Speaker, that that remark be withdrawn.

Mr SPEAKER:

– I ask the honorable member for Darling to withdraw the statement of which the Prime Minis ter complains, and I suggest that he cease from interjecting.

Mr Blakeley:

– The statement that I made, and to which objection has been taken, was that the loan of 3½ per cent.-

Mr SPEAKER:

– The honorable member must withdraw his remark without qualification.

Mr Blakeley:

– I withdraw it.

Mr LYONS:

– The honorable member for Hindmarsh (Mr. Makin) has endeavoured to compare the 3½ per cent. loan raised by Australia with the recent loan to the Government of Great Britain, and he has suggested that Canada, in raising a loan in New York, received better terms than Australia did in Great Britain. I am afraid that the honorable member has not investigated the conditions of that loan very closely. The rate was 4 per cent.

Mr Makin:

– The loan was issued at par.

Mr LYONS:

– It is now evident that the honorable member has not investigated the conditions of that loan. It was issued to the public at par, but had been sold to financial institutions at about 96 per cent. and these raked off a profit in the difference between 96 per cent. and 100 per cent., the price at which the loan was issued to the public. There is a vast difference between the methods adopted in raising the Canadian loan in the United States of America, and those adopted in raising the Australian loan in Great Britain. Had the honorable member been sitting on this side of the House and been able to appreciate the benefits that are being derived by the taxpayers of Australia because of this conversion loan, he would feel a proud man indeed.

page 1311

QUESTION

STATEMENTS OF GOVERNMENT POLICY

Mr BEASLEY:

– I ask, for the information of the public, if we are to takenotice of the statements of private members who support the Government regarding important matters of government policy? I refer to the speech which the honorable member for Corio (Mr. Casey) made at the Constitutional Club during the week end.

Mr LYONS:
UAP

– “When a statement is to be made on behalf of the Government, either a Minister or myself will make it.

page 1311

QUESTION

REMISSIONS OF TAXATION

Statement of Prime Minister

Mr MAKIN:

– In view of the serious hardships that are at present being imposed on old-age and invalid pensioners and of the statements that have been made regarding a probable reduction in taxation, will the Prime Minister give consideration to his own utterance of December last dealing with possible remissions of taxation? His speech is reported as follows-

Mr SPEAKER:

– I cannot allow the honorable member to quote the reported remarks of the Prime Minister.

page 1311

PERSONAL EXPLANATION

Mr BAKER:

– I wish to make a personal explanation. In the latest issue of Hansard it is recorded that while the Postmaster-General was speaking in this House last week, he referred to a byelection campaign at which the Leader of the Opposition (Mr. Scullin) was not present. I am reported as having interjected: “We won at that by-election.” I did not make that interjection. I heard it made, and it was made by an honorable member sitting on my left.

Mr Gander:

– I made the interjection.

Mr BAKER:

– The reason why I am raising this matter is obvious. The interjection was evidently intended as a reflection upon the Leader of the Opposition, who is the leader of the party. to which I belong, and I certainly do not wish it to remain under my name in the report of the proceedings.

page 1312

PAPERS

The following papers were presented : -

Audit Act - Regulations amended - Statutory Rules 1932, No. 111.

Defence Act - Regulations amended - Statutory Rules 1932, Nos. 112, 113, 114.

Export Guarantee Act - Return showing assistance granted to 30th September. 1932.

New Guinea Act - Ordinance of 1932 - No. 19- Supply (No. 3) 1932-33.

Northern Territory Acceptance Act and Northern Territory (Administration) Act-

Ordinance of 1932 - No. 19 - Police and Police Offences.

Marine Ordinance - Regulations amended.

Pearling Ordinance - Regulations amended.

Public Service Ordinance - Regulations amended.

Public Service Act - Regulations amended - Statutory Rules 1932, Nos. 109, 110.

page 1312

QUESTION

BUDGET 1932-33

In Committee of Supply: Consideration resumed from the 14th October (vide page 1303), on motion by Mr. Lyons -

That the first item of the Estimates, under Division I. - The Parliament, namely, “The President, £1,300,” be agreed to.

Upon which Mr. Scullin had moved, by way of amendment -

That the amount be reduced by £1.

Mr GEORGE LAWSON:
BRISBANE, QUEENSLAND · FLP; ALP from 1936

– Whenthe House rose on Friday afternoon last, I was referring to old-age and invalid pensions. I said that there was no necessity for the Government to reduce invalid and old-age pensions, because it had finished the financial year with a balanced budget, the credit for which is due, not to this Government, but to the Scullin Government. This Government’s action in reducing pension payments, besides pauperizing and humiliating all recipients of the pension, is a severe blow to those unfortunate people who have to depend upon this income for their living. In the debate on the Financial Emergency Bill, I and a number of otherhonorable members expressed the view mat the Government’s amended proposals with regard to invalid and old-age pensions were not necessary to save the million and a quarter pounds which the Government expect to save on this account, and that the finances could be benefited in other ways. Experience has proved the correctness of our assumption, for it is well known that, since the act has come into force, thousands of persons who formerly drew pensions in all States have returned their cards, preferring to look to other sources for their income rather than risk losing their homes, under the provisions relating to property qualification. I have had personal experience of a number of such cases. So complicated now is the act that a number of officers in the Pensions Department, with whom I have spoken, have admitted that they are somewhat in a quandary with regard to some of its provisions. When the bill was under discussion, its opponents declared that many of its provisions would be unworkable. This opinion is now being borne out by actual experience. In administrative matters, the Government has thrown too much responsibility on pensions officials. It is unfortunate that officers who, hitherto, have always done their duty satisfactorily should now be placed in this position. This Government’s radical interference with the Scullin tariff, which was designed to protect the industries of Australia, has resulted in an increase in customs revenue beyond all expectations. According to the latest figures issued by the Treasury, the surplus for the first three months of the financial year is £2,619,000. If this revenue position can be maintained, and if the overseas trade balance be not unduly disturbed, there will be no justification for a reduction of pensions, maternity allowance or Public Service salaries. It is wrong for this or any other Government to interfere with social services when at the same time it is reducing taxation on other sections of the community.

The honorable member for Denison (Mr. Hutchin), when speaking on Thursday evening last, expressed the view that the Labour Premier of Queensland (Mr. Forgan Smith), had supported the Premiers plan in globo. I think he offered this opinion in reply to a statement made by the honorable member for West Sydney (Mr. Beasley) who, after quoting from a debate in the Queensland Parliament, asked for an authoritative statement from the Prime Minister as to the attitude of the Queensland Government towards the plan. Being closely associated with the Queensland Government, I can say definitely that the Premier of that State does not wholeheartedly support the Premiers plan. What he has done and is doing is to carry out his election promises. During his campaign, he made it clear that, if returned, his Government would review the Premiers plan. That has been done. Following his election, he attended the conference of Commonwealth and State Ministers at Canberra and Sydney, and declared that he would not be a party to the adoption of the Premiers plan as he knew it. He agreed to honour certain obligations imposed by the plan on Queensland, but stated that he would not approve of any action to reduce the purchasing power of the people. The honorable member for Denison endeavoured to make the House and the people of Queensland believe that the Premier of that State was wholeheartedly behind this Government in enforcing the principles of the Premiers plan. That is not in accordance with the facts. The policy of this Government during the last few months has been directed against the best interests of Queensland. Many honorable members and a great many people outside this House regret the slashing attack which it has made against the most important of the Queensland industries.

The honorable member for Denison also attempted to lecture members on the system of arbitration. Let me remind him that he has not a monopoly of the information with regard to the history of industrial legislation. I claim to have had as much experience as he has had. It was somewhat amusing . to hear from the honorable member for Denison (Mr. Hutchin) and the honorable member for Adelaide (Mr. Stacey) what wonderfully good employers they are, and how well they get on with their employees.Round-table conferences may be all right in certain circumstances, but in my 25 years’ experience of industrial affairs, extending from 1908, when I was appointed to the first wages board created in Queensland, until 1931, I have found that employers generally take everything they can get and give as little as possible. Round-table conferences between employers and employees have proved valueless in ninety-nine cases out of a hundred, whereas conferences presided over by judges of the Arbitration Court have generally had good results.

Mr Dennis:

– Round-table conferences would not be failures if men like the honorable member for Melbourne Ports (Mr. Holloway) represented the workers.

Mr GEORGE LAWSON:
BRISBANE, QUEENSLAND · FLP; ALP from 1936

– The remarks of the honorable members for Denison and Adelaide are inconsistent with their action in assisting to deprive the public servants of this country of an award obtained as the result of a roundtable conference.

In not dealing with the problem of unemployment, the Government is neglecting its duty. In Queensland, many reproductive works could be undertaken to the advantage of the country generally, as well as of those who would be given employment on them. I hope that before Parliament adjourns the Government will tackle this question seriously, in order that those who are now faced with starvation may at least look forward hopefully to the Christmas festive season. I shall vote for the amendment moved by the Leader of the Opposition.

Mr GREGORY:
Swan

.- While I do not agree entirely with the Government’s policy, I compliment the Government on having restored confidence, and on having made a success of the recent conversion loan.

Mr Makin:

– The Stock Exchange of Melbourne does not think so.

Mr GREGORY:

– The success of that loan encourages us to believe that we shall be able to secure satisfactory terms for the conversion of other loans which will mature next year. The restoration of confidence will assist Australia to the extent of many millions of pounds each year.

Mr Makin:

– We shall need to get better terms than were obtained recently.

Mr GREGORY:

– If the honorable member for Hindmarsh (Mr. Makin) will compare the terms of the most recent conversion loan with those offered when Mr. Lang, the then Premier of New South Wales, was giving evidence of his ability to destroy the confidence of investors in Australian securities, he will see that there has been a marked change in the attitude of investors as a result of the dismissal of the Scullin Government.

Mr Makin:

– “World conditions were entirely different when that Government was in power.

Mr GREGORY:

– There was no confidence in Australia during the regime >of the Scullin Government. One has only to study the fluctuations in Australian bonds during the past two or three years to realize the effect of a lack of confidence on the part of investors. Since the recent change of government, investors have felt a sense of security, whereas previously they felt insecure. The changed conditions existing to-day are not due to any increase of prosperity in Australia, or to the pronouncement of any policy which is likely to ensure increased employment for our people. Their cause is psychological. The change of Government has put into circulation money which otherwise would be withheld from circulation, with the result that trade has been stimulated and our credit improved. “While we have reason to rejoice at the terms of the recent conversion loan, and the consequent reduction in our interest bill, the fact remains that, at the end of this year, our unfunded debt will amount to about £100,000,000.

Some honorable members appear to think that the existing unemployment is the result of our inability to borrow money overseas. Even in our worst spending days we did not spend more than £33,000,000 per annum, yet in less than three years Australia has expended £100,000,000. For thirty years Australia has indulged in a policy of excessive borrowing, with the result that her public debt to-day is approximately £1,200,000,000, more than half of which is owed, overseas. That is a crushing burden of debt for about six and a half million people. In. some quarters it is claimed that Australia has assets to show for all the money borrowed, and our railways are mentioned in this connexion. Instead of the railways of Australia being a valuable asset, they ore a clog on the wheels of industry, and a heavy burden on the taxpayers of this country. A couple of days ago the Prime Minister (Mr. Lyons), stated in the press that during the last twelve years, the railway deficits had totalled £68,467,000. If he had gone back to an earlier period, he would have found the total deficits still greater, because they began in 1914. The Prime Minister also said -

In the last ten years the deficits totalled £56.51(i,000, an average of over £5,000,000 annually, and the combined deficit for 1931-32 was £9,404,000. . . . The average cost of haulage in Australia was from two to three times greater than in the United States of America, and from two and a half to four times greater than in Canada.

Yet, despite the excessive freight charges on Australian railways, the people of this country are compelled to tax themselves to the extent of £9,400,000 per annum to make good railway deficits alone. “When Mr. Herbert Brookes was Commissioner for Australia in the United States of America, 1 wrote to him for particulars regarding the railway system of that country, and the information with which he supplied me related to the position in 1929. [Quorum formed.”] A comparison of the freight charges showed that they were not so much lower in the United States of America, as stated by the Prime Minister than in Australia. There, the railway companies pay a royalty for their charter, and they also have to pay income tax to both the State and Federal authorities. Over a long series of years the dividends of the companies have averaged 4.98 per cent., and the average daily wage paid in 1929 was 35s. 3d., or over £10 10s. per week. According to figures supplied to rae last year, wages in Canada are higher than those in Australia. Ought we not to inquire what is wrong with this country? Is it not because of the political control of industry that the Prime Minister has had to draw attention to the- fact that last year the combined Commonwealth and State railway deficits totalled over £9,000,000? The railways of Australia pay neither State nor Federal income tax, and yet the people have to tax themselves for the purpose of making good the losses sustained. The freights are so high that it is almost impossible to meet the charges levied to carry our exportable products from the country to ‘ the seaboard. The political action taken by the trade unions through the Federal Arbitration Court is contrary to the spirit of the Commonwealth Constitution, because it results in a Commonwealth court determining the wages to be paid to State railways employees. Not only are our railways under political control, but the costs for rolling-stock and plant are about 100 per cent, higher than in any other part of the world. This, according to the Prime Minister, involves not only an average annual cost of £23 per head to every income taxpayer, but also an immense burden to every primary producer. Yet the Prime Minister, by the policy of his own Government, is accentuating this disability. The Commonwealth Commissioner of Railways urges that all the railways of Australia should be brought under one control, while at the same time he operates the 6 miles of railway from Queanbeyan to Canberra as a separate concern. The Commonwealth Government should ask the New South Wales authorities to manage the few miles of railway between Canberra and Queanbeyan ; but the Commonwealth Government insists on a separate way-bill for goods carried between those two places, although they are only half a dozen miles apart, adding greatly to costs here. This sort of thing means unnecessarily high operating costs. The excessive tariff rates imposed by the Commonwealth force the State authorities to pay exorbitant prices for the railway material which it is necessary for them to import; and those authorities are also required to abide by federal industrial awards. The losses on the railways of Australia are not to be met by maintaining high freights, or by forcing the motor truck off the road, but by managing the railways on business, principles, without political interference. The Government states that -

Until the transport problem has been solved, it is doubtful whether the States can ever regain financial equilibrium, or whether the taxpayers can hope for relief.

Relief could he afforded to the State authorities by permitting them to bring in their railway materials duty free, and by complying with the spirit of the Federal Constitution by removing State railway employees from the control of the Federal Arbitration Court. The State Governments, in their turn, could assist by placing their railways under business management, and freeing them from political influence. During the period of six years when I had ministerial control of the railways in Western Australia, I saw to it that the management was free from political influence, and remarkably good results were obtained.. If the railways of Australia, whetherunder Commonwealth or State control,, are again to become an asset to thiscountry, it will be necessary to place them, under the charge of business men.

Mr Makin:

– When the honorahle member was in control of the railways of Western Australia, were they not under political control?

Mr GREGORY:

– No. I left the control entirely to the Commissioner, and the employees responded admirably to this mark of confidence in themselves. They were able to make their own industrial arrangements with the Commissioner, free from political interference. During that period of six years, the railway service was entirely contented, and surprisingly good financial results were obtained. I have no desire to boast because of the part that I played in that matter, but I may mention that superphosphate was carried by rail at £d. per ton per mile, and that had never previously been done in any other part of Australia. In tha last four years, without raising our freight charges, we increased wages about ls. per day. We reduced freight charges by over £150,000 per annum, paid off all the State debts that had accrued since federation, and for the first time showed a substantial surplus. In two years the whole of the good work that had been accomplished was nullified. The mistake that I made was that I did not have the Railways Act so amended as to render it impossible for political control to be exercised in the Service. If we enter into commercial undertakings we must keep them as free as possible from anything in the nature of political interference.

The cost of government in Australia must be reduced. At the present time that cost - State and Federal - amounts to nearly £200,000,000. It must be clearly understood that every penny expended on governmental services’ is withdrawn from productive enterprises. If wealth he not produced our people cannot enjoy good conditions. There has been a marked ar-‘J consistent growth in the salaries of public servants, who also enjoy many concessions that ought not to be tolerated. “Why should a special allowance be paid to those public servants who have to live in Canberra ? Why should not the Public Service Board have unfettered control, and fix the salaries according to the value of the position held ? I am not in favour of low salaries or wages, but I do object to the giving of concessions. Men who are employed outside the Service are not paid child endowment; why, then, should that payment be made to public servants? I know, of course, that the contention is that they defray the cost. The greatest blunder ever made was in the appointment of a Public Service Arbitrator over the Public Service Board. In the Estimates one finds a long list of officials who are required by the board to discharge its functions at immense cost; yet the Public Service Arbitrator has the power to reverse many of its decisions. That is preposterous and absurd. I hope that the Government will realize that too much is being taken from the people, and that it is essential to reduce the cost of government. The best means to that end is to amend some of our legislation, and to refrain from interfering with what is entirely the concern of the States. It should also be the policy of the Government to reduce the cost of living. Nothing is more important to a future worthy of this country than an increase in its productive wealth. Knowing the high prices that I have to pay for all the articles that I purchase, I wonder how the worker on low wages manages to carry on.

Mr Holloway:

– Yet the honorable member always votes for proposals to reduce wages.

Mr GREGORY:

– I know that the workers have had to suffer reductions. Unfortunately, in the past we have had experience of the operation of slowingdown tactics. If the honorable member compares the labour cost of a house to-day with what it was some years ago, he will find that there have been faults on more than one side in industry. It is dishonesty to practise the art of slowing down and to refuse to give value for the wages received.

Mr Makin:

– Has the honorable member ever stood for higher wages ?

Mr GREGORY:

– I favour payment according to value received; I do not believe in paying the duffer as much as the man who gives good service. One of the principal results of arbitration has been the destruction of that spirit of service which is essential to the building up of industries. For years I have argued that the Commonwealth should retire from the field of arbitration. I believe that it causes enmity between employers and employees. There are faults on both sides, for we seldom see in company balance-sheets provision for an employees’ superannuation fund, as is found in other countries. On the institution of the system, both sides in industry felt that it would be a good thing to have the issues between them decided by a judge, but when they got into court they found that they were engaged in a fight. I do not suppose that in any country in the world there is the degree of industrial enmity that exists in Australia, notwithstanding our arbitration courts and other industrial tribunals. This is not so pronounced at the present time, because there is so much unemployment. The employers approach the court for reduced wages and increased hours, while the empl’oyees seek higher wages and fewer hour3. At the conclusion of a case the men leave the court with the impression that they owe nothing to their employers, and decide to do as little as possible for them. Let us adopt the Canadian system. In that dominion there is no question of the enforcement of conditions by law. In the event of a dispute appearing probable, the Minister for Labour may appoint a commission to inquire into the merits of the case.

That .body endeavours to bring the parties together. If an agreement is reached, it may be registered and have the force of law, so far as the parties interested are concerned, but failing agreement, the commission is bound to publish its findings, and the public is thus able to judge between the parties. The terrible fights that occur between employers and employees in Australia are rarely experienced in Canada. The statesman believes in plenty, and in according a full measure of liberty to the people. The politician believes in scarcity, and in the enforcement of every sort of restriction against trade and industry; and, unfortunately, those restrictions are imposed in the interests of a favoured few. I can understand honorable members opposite, in their desire to help a few big combines, reacting to such a suggestion, but there is not the slightest doubt that such a policy has been followed. I hope that the public will realize that one cannot take out of a pot more than is put into it, and that only the production of wealth will ensure good conditions to our people. The usuallysuggested methods of providing relief against the dread menace of unemployment are to borrow and to inflate the currency. Probably, at a time like the present, with distress so prevalent, a small dose of such medicine is necessary. But the Government must set its face against the continuance of cither method. By the end of this year, wo shall hav<-i inflated to the extent of £100,000,000, and the fact that our public debt now approximates £1,200,000,000, and that we have but few tangible assets to show for that huge sum, should make us realize the failure that has attended the policy pursued by Australian governments of entering into commercial and industrial pursuits.

I do not propose to deal now with the tariff or the Ottawa agreement, as the opportunity will be presented later to debate these matters. But one must notice the demands that have been made by the right honorable the Leader of the Opposition (Mr. Scullin) for a continuation of the embargoes, surtaxes, and exorbitant duties, for whose existence he is primarily responsible. Time after time, lie has boasted of the alleged success of such devices in changing our adverse trade balance into a favorable one, and, in the interests of a few monopolies, and those engaged in sheltered industry, the right honorable gentleman urges a continuation of that policy. He is careless of the consequent high cost of living imposed upon the workers, and of the effect of that policy on our great primary industries, which are the very life-blood of the nation’s commercial activities. I copied the following extract from a report which appears in to-day’s press. It refers to a petition signed by 180 leading economists and tariff experts of the United States of America, and presented to President Hoover, and reads -

Many duties written into the Smoot-Hawley Act arc intended to raise prohibitive tariff walls against international trade defy all sound principles of economies. They spread the blight of unemployment, and strangle commerce. They impoverish the working people of all nations, while deluding them with a false promise of improvement of their conditions. It is our earnest belief that fanners, wage-earners, and business mon have infinitely more to gain from a reduction than an increase in tariff rates. The contentions of the Leader of the Opposition are absolutely absurd. Employment depends on the purchasing power of the people, which, in turn, depends upon the value of the wealth produced. In contradiction to what the right honorable gentleman says, our imports suffered a decline because we had no money to pay for them. We could not borrow from abroad. The value of our exports fell from £131,000,000 in 1930, to £88,000,000 in 1931, and £84,000,000 in 1932. Unemployment increased enormously, so reducing the spending power of the people. How then could importations continue on a large scale? Does the right honorable gentleman imagine that exporters would force their goods on to us, and seek no payment?

Our imports declined for two reasons, chiefly because we had no credits abroad to pay for them, and, to a far lesser degree, because of the restrictions imposed by this Government and its predecessor in office in accordance with an agreement made for political purposes, and not in the interests of the Australian people.

An examination of statistics over a long period of years quickly explodes the contention that imports create unemployment. I have here a list showing the value of imports, and the number of employees engaged in factories, and with the leave of the committee I shall have it inserted in Hansard -

From the year 1907, when the Commonwealth Statistical Department was established, the figures are for Australia generally. They demonstrate conclusively that as imports increase, employment in factories also increases; and that as imports decrease, employment decreases. “We must get down to hard facts, and recognize that only by wealth production can we restore prosperity, and remember that wealth comes from the soil.

I should like to know what action the Government proposes to take this year to assist the wheat-growers. I admit that the financial difficulties with which the Government has to contend are great, but it is imperative that it should give serious consideration to the catastrophe that must inevitably follow if our wheatgrowlers are unable to continue operations next year. The result would be disastrous not only to the farmers, but to our manufacturers, to labour, and to trade generally. My advices are that the opening sales of wheat this season will be about 2s. 4d. to 2s. 5d a bushel at sidings. Under any conditions that would be unpayable. In Australia, where the costs of production are the highest in the world, and following two disastrous seasons, it is useless to expect a continuation of production unless assistance is given to the growers.

I wish again to impress on the Government the advisability of considering the great value that Australia would derive from a subsidy on the manufacture’ and sale of fertilizers. I suggest that it should take effect, not this season, but from January next. The reports of experts indicate that our soils are deficient in phosphate contents, and it has been demonstrated that, by the use of superphosphate, huge areas may be developed into wheat fields and improved pastures. Obviously the resultant increased values would benefit the community even more than the individual. This is what Professor A. J. Perkins has to say on the subjects -

With the assistance of heavier phosphatic dressings to harvested crops, pasture top dressings, &c, it should eventually be possible for a Mallee farm to carry a sheep to the acre on the laud available for grazing without any reduction in the area normally allotted to wheat.

Professor A. E. V. Richardson, Director of the Waite Agricultural Institute, also emphasizes the need for heavier dressings of superphosphate in order to produce maximum crops. The following quotation from his writings is typical of his views on the subject : -

One striking peculiarity in Australian soils, as compared with those of Europe, is the uniformly low phosphatic content.

There is abundance of evidence to show that heavier dressings of phosphates than are how customary could be used to advantage, and that the wheat crop and the grazing value of grass would be materially improved by such liberal dressings.

Experiments conducted by the Department of Agriculture (Victorian) at the State farm show conclusively that heavier- dressings than are now generally applied would greatly increase production.

As the application of soluble phosphates encourage deep-root development, they are beneficial wherever drought conditions are likely to prevail.

In New Zealand a bonus was paid by the Government to the manufacturers of fertilizers, with the result that the use of manures was very greatly increased, and this in turn led to an increase in productivity from the land. This Government also should take steps to increase the yield from the land by encouraging the use of fertilizers. It has been demonstrated that, by the use of sulphate of ammonia as- a top-dressing on pasture’s, the carrying capacity of land in parts of Australia has been increased from one sheep to three sheep to the acre.

Mr Lane:

-Would it not pay the farmers to use fertilizers even if no bountywere paid?

Mr GREGORY:

– No doubt it would, but if we could cheapen fertilizers, more of them would be used. We should endeavour to encourage increased production, rather than place obstacles in the way as is being done at the present time by high tariff duties.

The primary producers have clone their share during the last two years to increase the wealth of the country. The quantity of butter, wool, wheat and fruit exported has been greatly increased, though the lower prices realized have nullified the effort of the producers. I have here a copy of the September report issued by the Bank of New South Wales, setting forth the exports of primary products oyer recent years. Compared with the period 1927 to1929 - when,owing to abnormally high prices one would have expected a large production for export - practically all primary products show a very marked increase for 1931-32. The quantity of butter exported increased by 118 per cent., flour by 23 per cent., wheat by 82 per cent., greasy wool by 7 per cent., scoured wool by 11 per cent., mutton and lamb by 20 per cent., beef by 34 per cent., dried fruits by 23 per cent., and fresh fruit’s by 78 per cent. The one big reduction was in hides and sheep skins, probably due to the action of the Labour Government in placing an embargo on the export of sheep skins. The figures show the great efforts made by the producers to play their part in rehabilitating Australia. The volume of our exports could be still further increased by a more widespread use of fertilizers, as has been amply demonstrated even in this country. During the Western Australian centenary celebrations, pressmen who visited the State from all parts of Australia, were astonished to observe the remarkable yields obtained as aresult of top dressing on one farm at York. On that farm the carrying capacity has been increased threefold. It would be better for Australia if we could induce settlement on smaller areas, each with a high level of productivity. I insist that something must be done to help the wheat-growers this year, and a renewal of the wheat bounty is necessary. I realize, of course, the difficulties of the Government, but it would be a bad thing for the manufacturers and the cities if the wheatgrowing industry were allowed to collapse.

I believe I am expressing the opinion of many United Australia Party members when I say that the Government, in its recent negotiations with the Country party regarding the formation of a coalition government, went out of its way to widen, rather than- to heal, the breach between the two parties. If its object had been to make effective co-operation between the parties absolutely impossible it could not have chosen a better way. By its gross impertinence in sending a letter to the Leader of the Country party (Dr. Earle Page) stating that if certain members of that party could be induced to agree to a coalition on the promise of receiving portfolios - -

The CHAIRMAN (Mr Bell:
DARWIN, TASMANIA

– I hope the honorable member is not referring to any’ individual member of the Government”

Mr GREGORY:

– I am not; I am speaking of the Government itself. The Government proposed that the Country party should join the United Australia Party unconditionally, having no say as to policy, but content to go like driven sheep in whatever direction the Government chose.

The CHAIRMAN:

– I must ask the honorable member not tocontinue discussing a subject which is not before the committee.

Mr GREGORY:

– I claim that I am entitled to discuss it as a question of policy. For my own part, I should be pleased to see something like a combination between the Country party and the United Australia Party, based on mutual agreement between the two parties on matters of policy.

The CHAIRMAN:

– The honorable member’s time has expired.

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

.- The Treasurer’s budget speech included a characteristic passage -

The restoration of complete confidence must be the first duty of any Government which truly serves the people. . . . . All that is necessary now to enable us to reach the haven of complete recovery isan increase inworld commodity prices.

The need for higher prices for our commodities is no now discovery; it has been shouted from the housetops throughout the existing depression. Indeed, complete recovery without an increase in commodity prices is as impossible as Hamlet without the Prince. The right honorable gentleman would have the people believe that his Government has a monopoly of patriotism, and even the honorable member for Swan (Mr. Gregory) said that but for the advent of the Lyons Ministry, there would have been no chance of the restoration of confidence. As a matter of fact, the task of restoration was well in hand before the Labour Ministry was defeated in circumstances which I need not recapitulate. What has the present Prime Minister contributed towards a restoration of confidence? About twelve months ago, the United Australia Party was formed. The antiLabour forces have, in common with persons who are well known to the police, a remarkable propensity for frequent changes of name; as soon as one name is in disgrace, they masquerade before the public under another title. Thus we have the United Australia Party, alias the Nationalist party, alias the Liberal party. But the party to which I belong has always been, and always will be, the Labour party.

Another peculiarity of the anti-Labour forces in the public life of Australia is their claim to have the support, not only of the Empire, but of everythingthat is good in the world; they almost claim the endorsement of Holy Writ itself.

From some of the statements made by the honorable member for Swan (Mr. Gregory), I dissent. We all recognize that railway finances are in a sorry state; and all primary producers will declare that freights are too high. Nevertheless, in Western Australia, and I believe in other States, super-phosphate for the farmers is carried at a½d. a ton per mile, which is about one-third of the actual cost. That fact must be counted to the credit of public ownership. Even those who are opposed to the Labour party’s policy will agree that there are some public utilities which we cannot afford to hand over to private enterprise. That is true of the railways; no private organization with continent-wide ramifications should have, as the American railway companies have had, the power to exact in freights as much as the traffic will bear. The unprofitableness of the railway systems is not a feature peculiar to Australia; the same difficulty is to be observed in other countries. In support of that statement,I quote the following paragraph from the Melbourne Herald of the 12th October: -

Ottawa, 1 1th October.

The report of theRoyal Commission on Transportation tabled in Parliament to-day contains several important recommendations in addition to those announced in the summary recently issued.

The commission recommends that the capital of the Canadian National Railwavs, which totals£2,669,926,370 (£533,985,274at par), should be very heavily written down, but that the time for this operation is not now opportune.

There must be a cessation at once of the aggressive and uncontrolled competition between the Canadian National and the Canadian Pacific systems.

It has been found that money has been wasted by the railways in construction, and in carrying on hotel business.

It was ascertained that the private automobile was chiefly responsible for the diversion of traffic from the railway to the highways. Motor coach traffic is not yet, however, ofvery large dimensions.

We also know that receivers have taken charge of the affairs of some of the railway companies in the United States of America, and that the capital of other concernshas been written down extensively. In some of the more closely settled Australian States, particularly Victoria, trafficreceipts have been very adversely affected by the competition of motor traffic, and this is a problem which will have to receive attention.

The honorable member for Swan referred also to the slowing down in industries. I submit that it is impossible for slowing down to take place in the present circumstances of industry. About 400,000 men are out of work, and any man who goes slow on the job is speedily dismissed. The honorable member for Denison (Mr. Hutchin), in an excellently worded speech, sought to show that the Arbitration Court was blasting the prospects of industry, but the fact remains that in all callings, men are working below award rates; with unemployment so widespread, it is impossible for the trade unions to prevent that evil. To-day the employers are getting men to work on their own terms. In many instances work, particularly in the building trade, in which I was engaged for years, is being done by contract. 1 advise honorable members to read a book . entitled, TheRagged Trousered Philanthropist, written by a carpenter, to enable them to understand the unfortunate position in which men, at that time, were placed owing to the rotten piecework system. Tinder that system the competition in the building and other trades is so keen that the employees are unable to earn a living wage. Practically the whole of my boyhood was spent in Melbourne, where, in conjunction with my father and brothers I was employed, under this wretched system, at about 8s. a day, although the work which I performed was worth very much more. Under this system men have to work at great pressure, and consequently are unable to do their best.What is the record of this Government? It undertook to balance the budget; but expenditure had been reduced and taxation increased by the Scullin Government before it went out of office. In order to reduce expenditure, it had to discard long-cherished principles, and sever long political associations. The Government considered it necessary to balance the budget, and although members of the industrial section did not agree with its policy, they thought that the workers would he thrown to the wolves if we did not remain in office to protect the interests of the workers. In order to reduce the deficit to £20,000,000, the Scullin Government was compelled to reduce invalid and old-age pensions from 20s. to 17s. 6d. per week. On the other baud, this Government, which has to meet a deficit of only £1,400,000, has not only reduced the salaries of public servants, but has made a further cut in invalid and old-age pensions and the maternity allowance. The matter of a further reduction in soldier pensions was discussed in caucus or Cabinet.

Mr McBride:

– No.

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

– I submit that it was. The action of this Government in reducing invalid and old-age pensions by £1,100,000 can be characterized as cowardly. The Scullin Government reduced expenditure by £8,600,000, and increased taxation by £7,500,000, but this Government, while reducing invalid and old-age pensions, also proposes to reduce taxation paid by those who can well afford to contribute to the revenue of the country. It proposes to lower the status of those who receive less of the good things of life, and to improve the position of those who possess more than a fair share of this world’s goods. This Government is controlled by some of the leading newspapers of Australia, which are continually bringing before the public the necessity to reduce the cost of social services and taxation. That policy is strongly enunciated by the press, and, unfortunately, this Government is subservient to its influence. The Postmaster-General (Mr. Parkhill) referred to the restoration of confidence, the reduction in unemployment and the fact that the budget would be balanced. But has one additional man been put to work since this Administration has been in power?

Mr Lane:

– Thirty thousand additional men have been put to work.

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

– For the information of the honorable member, I propose to quote from the Quarterly Summary of Statistics, No. 128, to June, 1932, which deals with unemployment in Australia. The returns furnished by union secretaries show that, for the second quarter of 1931, the percentage of unemployment was 27.6; for the third quarter, 28.3; and for the fourth quarter 28, or a difference between the third and fourth quarter of only . 3 per cent. To show the extent to which confidence was restored when the Lyons Government assumed office, I may say that, for the first quarter of 1932, the percentage was increased from 28 to 28.3, forthe second quarter it was 30 per cent., and for the third quarter 29.6 per cent. In the aggregate, unemployment has increased since the Labour government was in power. In these circumstances, the right honorable the Leader of the Opposition (Mr. Scullin) was justified in directing the attention of the Government to the serious problem of unemployment. Not one shilling has been provided in the Estimates to assist the 400,000 men who are out of work. Prior to the last general election, posters bearing the words “ Help

Jack and his pals to get work”, and “ Put Lyons in power and get a job were displayed throughout the country. Many honorable’ members opposite are here today because the people believed that this Government would provide men with Work. Hundreds of thousands of people paid their hard-earned shillings to join the United Australia Party, believing that it would function in the interests of the people. We were told by one gentleman who accompanied the Prime Minister (Mr. Lyons) on his South Australian tour that his meeting’s resembled a Methodist revival service, and that his influence was sweeping over the country like a whirlwind. Yet, although it was said that this Government would restore confidence and put men back to work, there are a hundred thousand homes in Australia to-day in which the children are without the full necessaries of life. This Government has not provided one penny to meet their needs. With an estimated deficit of only £1,400,000, it is taking £1,100,000 from invalid and oldage pensioners. When reports appear in the press concerning its action in connexion with pensions or wages, the Prime Minister states that they are not true. We are asked to trust the Government. This Government, with its “ shilly-shally “ policy, reminds me of the lines -

You can and you can’t,

You will and you won’t;

You’ll be damn’d if you do,

You’ll be damn’d if you don’t.

During the period we were in office we asked for Supply for a certain period. But the then Leader of the Opposition (Mr. Lyons), who obtained that position by one of the greatest feats of political acrobatics even seen in this country, was not prepared to grant supply for the period desired by the Government, on the ground that the condition of the country required that Parliament should be constantly in session. Yet during the life of this Government of which he is the leader, Parliament has sat an incredibly small number of days! The Scullin Government, I am informed, sat on more days during its short life than the BrucePage Government sat during the long period it was in office. If there was a need that Parliament under the Scullin Government should remain in session, it might have been expected that this Government. Would have kept the attention of honorable members concentrated on the Business of the country. The leader of my party has rightly said that Australia is passing through most critical days, yet Parliament was allowed to remain in recess from the 19th December last, when the Lyons Government assumed office, until the 17th February-a 59 days’ holiday ! It then sat from the 17th February to the 17th March- 28 days. It was in recess from the 18th March to the 26th April - 40 days. It then sat from the 27th April to the 24th May- 27 days. From the 25th May to the 31st August there was a 60 days’ recess. It will be seen, therefore, that since this Government came into office, Parliament has been in recess twice as long as it has been in session. This is surely unique, particularly as the Government has asserted time and time again that the affairs of the country needed mostcareful watching.

It is a wonderful thing to me that, although the Country party made continuous appeals to the Scullin Government to assist the primary producers, it has scarcely mentioned the subject to this Government, which it is supporting. The Scullin Government, directly it came into office, called the primary producers’ representatives into conference and, during its comparatively short life, made four or five efforts to assist the wheat-growers, and finally granted them a bounty of 4½d. a bushel. But this Government has done nothing of that nature.

If the Country party desires to obtain assistance for the farmers, it will need to maintain a constant agitation. Otherwise the farming community will be left helpless and hopeless.

In the days immediately after the accession to office of the Scullin Government, the position of the primary producers was so bad that we tried to give themassistance but the bill was defeated in the Senate, and many people were forced off the land. But is the position any better to-day? It cannot be said that the lowness of the present price of wheat is reassuring. The following message from Winnepeg appeared in the Melbourne Herald on the 12th October - only a few days ago : -

The price of the Winnepeg market fell to-day below 48 cents (2s.) a bushel.

The next day the following paragraph appeared in the Sydney Morning Herald : -

The lifeless tone which has pervaded the city wheat market for the past couple of weeks showed no signs of lifting yesterday. A small sale was reported at 3s. lid. with sellers willing to continue, but buyers were reserved and their best offer was 3s. Id. No further business was transacted.

No one can truthfully deny that the prospects of the wheat-growers of Australia are very much worse than they were a few months ago. There is nothing to indicate that the price of wheat will be even a Id. a bushel better this year than it was last year. The continuance of the bounty of 4$d. a bushel is therefore essential.

The fallen fortunes of this Government caused it a few days ago to seek the co-operation of the Country party. The phrase “AH for Australia “ was revived for the occasion. But the Country party, being composed of men of business acumen, realized that it would be folly to join forces with the Government, for disaster was clearly showing ahead. Yet some attempt must be made to assist the farmers. I know it will be said that this Government should be given credit for having granted relief to the primary industries by lifting sales taxation and primage duties to the extent of £400,000 per annum; but this will mean very little to the wheat-growers of Australia. On the other hand, in the opinion of many people, the lifting of these imposts has been highly detrimental to our secondary industries. How does the present position of the primary producers compare with their position last year under the Scullin Government? In 1930-31 the wheat bounty was worth £3,378,835 to the wheatgrowers. I presume the payments have now reached £3,500,000, but no bounty has been provided this year. This year up to the end of September the gold bounty was worth £100,000 to certain primary producers, but it has been suspended this year. An amount of £44,000 is being taken from another section of the primary producers in consequence of the revision of the conditions governing the wine export bounty. It will thus he seen that the Lyons Government has withdrawn from various sections of primary producers no less a sum than £3,522,835. Against this it is alleged to have given them, by the remission of sales taxation and primage duties, an amount of £400,000. The net loss which primary production has sustained under the Lyons Government is therefore £3,122,835.

Honorable members who support the Government may claim that it should be given kudos for making certain grants to Western Australia, South Australia and Tasmania. In the case of South Australia, the grant is the same as it was last year. But this year South Australia is losing £863,000 in wheat bounty and £44,000 in wine bounty. Even if it receives an advantage of £100,000 through the remission of primage duties and sales taxation, it will still be £S07,000 worse off than it was last year.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– That is pure conjecture.

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

– It is nothing of the kind. My calculations are based on figures the accuracy of which cannot be disputed. What is the position of Western Australia? The grant to that State has been increased by £200,000, but it is losing £707,252 in wheat bounty and at least £120,000 in gold bounty, making £827,252 in all. Even if the Western Australian primary producers receive an advantage of £80,000 through the remission of primage duties and sales taxation they will still lose £747,000 this year through the advent to power of this Government.

In the light of these facts it must surely be apparent to honorable members that the primary producers of Australia as a whole has been very badly “let down “ by this administration. If the Country party desires to do anything to assist the section of the community which it claims to represent, it will need to fight hard. The financial position of the country has improved very greatly in the last year, and there is no reason whatever, from that point of view, why the assistance provided for the primary producers by the Scullin Government, and particularly the bounty of 4Jd. a bushel on wheat for export, should not be continued. Neither South Australia nor Western Australia can afford to suffer the losses to which I have referred. The people of Victoria are in a somewhat better position than those of the other States I have mentioned, because they have certain manufacturing industries upon which they may rely to some extent.

But Victoria received £802,000 in wheat bounty last year, so that even if she is given credit for £102,000 in consequence of the remission of sales tax and primage duty, she will still show a heavy loss. It must be remembered that the remissions of duty on implements of one .kind and another mean little to many farmers, because they cannot afford to buy these implements at present.

I will not now deal with the Ottawa agreement, but will reserve my remarks on that subject until the general debate. In passing, however, I should like to make brief reference to the very fine report on our trade with the East which was presented to the Government by Mr. H. W. Gepp. I hope that the excellent recommendations made therein for the rehabilitation of our trade with eastern countries will receive the wide publication that they deserve.

The subject of finance has been dealt with largely by the Leader of the Opposition (Mr. Scullin). It is the most important problem confronting Australia to-day, and the Government that fails to tackle it - whether it represents the Nationalist, Labour or Country party - is entirely failing in its duty. The Commonwealth Bank was originally intended to be the people’s bank. I have no wild ideas about finance, and I do ‘not pretend to understand fully the abstruse views of experts, which, unfortunately, vary to a considerable extent. Our experience during the recent depression, however, has shown that we cannot afford to depend upon the private banks to. help us out of our difficulties. We know very well that those institutions have to show a profit for their shareholders. The financial problem is confronting not only Australia but the rest of the world, and this country, at any rate, should take one step towards solving its financial problems by placing the control of our finance in the hands of the Commonwealth Bank. I do not say that we should confiscate the funds of the private banks, or compulsorily suspend their operations. There’ are sixteen private banks in Australia, each with separate offices, each showing a profit for its shareholders, and each placing large sums of money to reserve funds every year. We cannot afford to let that waste continue as a charge on primary industry. We must come to some arrangement with the private banks, perhaps in conference with them, with a view to buying them out, or persuading thom to cease operations within a certain period. That is a matter for negotiation and fair dealing. Time has shown that we must, during our critical periods, depend upon the Commonwealth Bank for the releasing of credits, in order to encourage private enterprise and industry throughout Australia. Tho following is a summary of the financial position of the seven leading banks in Australia, together with details of amount of capital, profit, dividends and reserve funds: -

From the point of view of the producers, the manufacturers and the people generally, it is essential that the Commonwealth Bank should bc the national bank that should stand behind the nation in time of depression.

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

– I was pleased to hear the remarks of the honorable member for Kalgoorlie (Mr. A. Green) respecting our trade with the East. “In reviewing the budget I was particularly struck with the increases of our trade in the Eastern markets. It is gratifying, particularly when we take into consideration the low prices that have been operating for some time past in the markets of the world, to know that we have increased the value of our sales there from £14,060,000 in 1929-30 to £21,500,000 in 1931-32. That fact shows beyond doubt that our volume of trade overseas is increasing, notwithstanding the depressed state of the market. Still it is obvious that our sales could have been still more increased had we understood better the Eastern conditions and requirements, and had better knowledge and a spirit of sane understanding regarding the requirements of the markets there. The following is a comparative statement of our sales to certain Eastern nations in the years 1928-29, 1929-30, and 1930-31:-

From that statement it appears that our trade with these countries has decreased since 1928-29, but, despite the fact that prices were considerably lower in 1930-31 than in 1928-29, our trade in these markets is now gradually increasing, when compared with the year 1929-30. I have no doubt that honorable members will be surprised that we are doing such a volume of trade with the Eastern . countries, although it is to be deplored that we have not maintained the value of our exports. Lower prices have certainly played some part in that. There is a stage in the life, not only of every nation, but also of every business, at which natural trade expansion ceases, and I feel it is necessary for Australia, if she is to take her place among the nations of the world, to seek expansion of trade overseas. Now that conditions are improving, and reverting to something like those of 1928-29, we should establish ourselves in these rising markets, particularly as they may become of considerable importance to us. The figures that I have quoted show irrefutably that the Eastern markets are worth exploiting. At present we are touching only the fringe of those markets, taking into consideration the immense populations of the Eastern countries. China has a population of 500,000,000; Japan of 90,000,000, and the Dutch East Indies of 53,000,000. There is, therefore, in those countries an immense opportunity for the sale of the products of this continent, notwithstanding the concessions that we have granted to the British Empire as a result of the Ottawa Conference. The British Empire must be our first consideration, but we should not be blinded by the decisions of the Ottawa Conference. I think Australia would have derived a greater advantage had we lowered the British duties instead of increasing foreign duties. The time may come when the British markets may not be assured to us. “We must have a greater expansion of trade. We must 3eek markets elsewhere to ensure that, if the time does come when the British markets are lost to us, we shall not have a lopsided development in our commerce. It, therefore, behoves us to watch the Eastern markets carefully. It may be that our proximity to the East, or our neglect to take advantage of the conditions operating in the Eastern countries, or even our White Australia policy, has prevented ns from exploiting their markets as we should. It may be that we have naturally built up jealousies and prejudices which other countries have avoided. Those countries, by intensive organization and by entering into trade treaties, are improving their position in the Eastern markets. Figures that I have quoted show the effect that this intensive drive has had against us. When one considers the efforts of the Australian governments and our producers as a whole, one wonders whether the advantages to be derived from the Eastern markets are fully understood. Australia has much plant which is idle and rusting because of the internal trade depression. If we use that idle plant, and put our men in employment, it will be necessary for us, if Australia is to take its place among the nations of the world,, to dispose of our surplus products overseas. We must carry out an aggressive campaign in the East, but not necessarily against the trades and industries of the Eastern countries. Their peoples would certainly object to any aggressive policy on our part which was likely to interfere with their local trades and industries, which are of considerable economic value to them. But we are entitled to sell to those countries commodities which we can produce possibly a little better and more profitably than any other country. Some nations in the East have no natural resources. Japan, in particular, is peculiarly enough without natural resources. Other Eastern countries which may have natural resources are not properly exploiting or developing them. Therefore, they must, for some considerable time to come, import raw and semi-manufactured materials. China, with its internal jealousies, riots, and continuous wars, and other Eastern countries in which there is a total absence of primary education, has little or no opportunity to exploit fully the natural wealth of the soil. Since the government of China is not consolidated, it is likely that, for many years to come, the Western nations will find a ready market for their products in that country. Doubtless the time will come when China will concern herself with the development of her own natural resources; until then it behoves us to take advantage of the very profitable market available to usthat lies within a few days’ steam from our shores. The internal disturbances in China may tend to restrict our trade in that growing market, but I can assure honorable members that our rivals arelosing no time in strengthening their position. Many of them have appointed trade representatives and commissioners,, and are spending immense sums of money in. extending their trade relationswith the East. In 1900, China imported from other countries, in round figures,. 211,000,000 taels worth of goods - the tael being equivalent to 2s. Id. in English sterling - and in 1929 her imports had increased in value to 12,657,821,000 taels - a truly remarkable development.

Mr RIORDAN:
KENNEDY, QUEENSLAND

– What is this Government doing to secure a portion of that trade ?

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

– I suggest that action should have been taken by the party to which the honorable member belongs when it was in power to appoint trade commissioners and make trade agreements with China and Japan and other countries in the Far East. The sister dominions of New Zealand, South Africa, and Canada have done this. They recognize the immense advantages to be gained by thus increasing their trade. Canada has been particularly active in this matter. She has trade representatives at Kobe and Tokio, in Japan, and also in Manchuria and in North, Central, and Southern China. Successive Australian govern- merits have failed to follow up our trade advantages in these markets, and, so far, we have made no trade agreements with these far-Eastern countries. Of all the important nations doing business with China, Australia is the only country without a commercial representative in the East. Consequently, we have been unable to take advantage of the resultant lower rates of duty. Canada is spending approximately £40,000 a year in developing her overseas markets, in the interests of her primary and secondary industries. It is important to remember, also, that the Eastern nations are becoming westernized, so that in fabrics there is an increasing demand for wool in preference to cotton, and their foodstuffs are being changed to conform to those in use by Western nations. The market, being a naturally cheap one, price is necessarily an important factor insuccessful competition for trade. Hitherto our high costs of production have limited our remunerative exports to wool and wheat, for which there is a good demand. Since it is not likely that we can cut production costs below a certain level, we should endeavour to establish a reputation for quality that will enable us to secure and retain a foothold in that market. South Africa is now a competitor with us in wool, and as production costs are lower in that country than in. Australia, it will be a formidable trade rival to us in the near future. Our position with regard to wheat exports should be rather better, because of the mechanization of the industry. Furthermore, the excellent milling quali ty of our hard wheat gives us a distinct advantage over Canada in Eastern markets. If we do not hold our export business in wool and wheat, our trade with the East will be ruined.

Mr Gabb:

– We have held our own in that trade for years.

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

– Yes ; but we have not made the progress we should have made.China has bought only a certain amount of Australian wheat, and I suggest that combined action be taken to keep down costs in all directions, including interest or inflated land values so that we may extend our sales in the East very materially. As with our wheat and wool, so with our minerals. We have immense mineral deposits, but owing to high costs of production, we are able to develop only the richest of our resources. Mineral propositions which would be profitably developed in the United States of America and Canada are neglected in this country on account of the high cost of production.

I consider it essential, if we are to hold our trade with China and Japan, to have a more diversified exportation to those countries. To achieve this end, it is necessary for this Government to tackle the high cost of production and distribution. We are exporting a fairly wide range of products, but our business is not increasing rapidly enough. Take for example our trade with China in 1930. Of a total import trade of, in round figures 1,500,000,000 taels, Australia and New Zealand supplied only about 7,000,000 taels. This seems to be a ridiculously low figure in view of our proximity to that market, and our other natural advantages. According to the Chinese Maritime Customs report for 1929, the figures-excluding those for Hong. Kong because the re-exportation there would confuse the position- show that during the years 1920 to 1929, Japan increased her trade with China by 94,000,000 taels; the United States of America increased hers by 57,000,000 taels, whereas British trade declined by 12,000,000 taels, and the trade from Australia, although it increased by 4,000,000 taels in the period 1922 to1929, decreased in the 1924-1929 period by 1,000,000 taels. These figures indicate clearly that, in comparison with other countries, our trade position with China is not satisfactory. It would appear that, in their trading, British people lack initiative, because, as I have shown, Britain’s trade with China declined by 12,000,000 taels between 1920 and 1929, and Australian trade slipped to the extent of1,000,000 taels between 1924 and 1929. I think it is clear that we can only expect to increase our hold on that market, by close co-operation between the Government and producers. A strong government should realize that international trade cannot operate in one direction only; there must be reciprocity. The purchasing power of the people in all countries having declined very materially during the last few years, there is a disposition to deal only with those whoare to be trusted, and sinco we claim that virtue, we should immediately seek to improve our position in the East by appointing to those countries trade representatives with full status, because experience has shown that only representatives with authority to negotiate commercial agreements with politically friendly countries are likely to be successful.

Mr E Riley:

– Would those trade representatives be drawn from the Commonwealth Public Service?

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

– Trade representatives such as I have in mind would be persons possessing an intimate knowledge of the conditions of this country, and persons in whom the people repose the utmost confidence. I doubt that the necessary business knowledge and experience is to be found in the ranks of the Public Service. As with individuals, so with governments. To win confidence is the first consideration. The governments of the countries to which our trade representatives may be appointed must have complete confidence in them and in us if our business relations are to be developed along satisfactory lines. There is definite need for trade agreements between Australia and these far-Eastern countries if we are to hold the markets which we already possess. Statistics show that the balance of trade between Australia and China, and between Australia and Japan, is largely in favour of Australia. In regard to Japan, Australia ranks fourth as regards imports, and twelfth as regards exports. In my opinion, this state of affairs will not continue long, for already Japan is complaining of the goods imported from Australia. For the ten years ended 1931, Japan exported to Australia goods valued at 391,932,938 yen, and imported from Australia goods to the value of 1,170,631,740 yen. Japan resents that her unfavorable balance of trade with this country amounted to £77,869,870 for those ten years, and is now endeavouring to foster trade with South Africa by way of retaliation.

Similar conditions exist in connexion with our trade with China. During a period of eight years, China exported to Australia goods valued at 7,754,959 taels, and imported from Australia goods to the value of only 35,259,975 taels; an unfavorable balance of trade, viewed from the Chinese stand-point, of 3,438,127 taels, or approximately £515,719 per annum. That is a serious state of affairs. These Eastern nations, to which we look to buy our goods, are in turn seeking markets for their goods, but instead of encouraging reciprocal trade with them, we raise a high tariff wall against their goods, and place other restrictions on trade with them. We will not send trade representatives to their countries, or enter into trade agreements with them.

Mr Hutchin:

– How can we do what the honorable member suggests and at the same time grant a preference to British goods?

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

– Our resources are sufficient for us to develop markets both in the East and in European countries if only we reduce the cost of production and handle things properly.

Mr Forde:

– Preference within the Empire will give offence to Eastern nations no less than will preference to A ust ral i a n manuf acturers.

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

– Not necessarily. If our goods are right, and our prices reasonable, and if, in addition, we are represented in these countries by the right men, we shall have the preference which our geographical position gives us. Let us see how South Africa treats Japan. During 1931, Japanese goods valued at 19,282,605 yen were disposed of in South Africa, and in return, Japan bought from the sister dominion goods to the value of 1,332,952 yen. Japan regards South Africa as a good customer, and now claims that South African wool is not only better than ours, but that it is also better graded.

Mr McBride:

– Nonsense !

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

– I refer the honorable member to the Gepp and Melbourne reports. In the past, Australian wool was well graded, excellently sorted, and well baled, but now Japanese buyers accuse us of bad grading and sorting, and false baling.

Mr McBride:

– Those are only excuses.

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

– It may be that these rumblings of discontent have their origin in the unfavorable trade balance with Australia, and that some excuse is being sought for changing their market, but, in any case, it is our duty to remove the causes of Japan’s discontent.

The Government should establish a bureau of commerce in overseas countries, with a view to acquiring knowledge and tabulating information for the benefit of Australian exporters. Much of the time which is now wasted in obtaining information, and in seeking markets that do not exist, would be avoided by this means. Other countries, among them some of the British dominions, have bureaux of commerce in Eastern lands, and, as a result, their industries benefit. It would be well if we had a bureau to issue monthly reports amongst exporters in Australia in order that they might be kept in touch with Eastern affairs, and thus be able to compete with other nations in the trade of the East.

It would be wise also to send a special delegation, representative of business and financial interests, to the East in order to survey the prospects of finding there a successful market for our goods. A study of Eastern business methods, and of the psychology of Eastern peoples, should be undertaken. One member of the delegation should be a financial expert whose duty it would be to investigate banking practice overseas. Eastern banking practice differs from that of Australia and most European countries, with the result that Australian and Eastern traders are suspicious of one another. Eastern banks will not issue letters of credit in Australian currency, probably because of their fear of the policy of repudiation advocated by the Lang Government of New South Wales. At one time every’ Australian in the East was regarded as a Britisher, whose word was his bond, but to-day that is not so. [Quorum formed.] When a merchant applies for a letter of credit in the East, he must arrange to redeem it on a certain day, perhaps 60 or DO days ahead. But there is also a provision that, immediately on the disposal of the goods, even if only seven days have elapsed, he must meet the letter of credit and pay interest for the balance of the term. No rebate is allowed. That custom reacts to the disadvantage of Chinese merchants. These and other

Eastern practices should be investigated in the interests of Australian traders.

Not only should we send a special delegation to Eastern countries to study their business methods, but we should also encourage them to send their trade representatives here. In this respect the United States of America has set us an example. It accepted a. number of Chinese students to learn engineering, later sending them back to their own country fully qualified men. Thereafter whenever machinery was required in China, these trained men prepared the specifications in such a way that the firms or companies with which they received their training gained an advantage> over their English competitors. It would be to the advantage of Australia to accept from these Eastern countries students to study our methods of business.

Mr Gander:

– Would the honorable member advocate admitting Chinese students for that purpose?

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

– A reciprocal arrangement should bc entered into.

Mr Gabb:

– Chinese nationals can come here now as students.

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

– Yes, and we should encourage them .to do so.

Japan complains that because of there being no bulk handling of wheat in Australia, our wheat does not compare favorably with that of some other countries, particularly Canada and the United States of America. It is said also that Australian wheat carries too great a proportion of black ear, stalks, dust, and bad grain, and that the bags containing the wheat are not of uniform size or quality. Japanese merchants also complain that Australian wool is spoiled by the tar used in branding, and that the blue dye used to label the bales affects the wool and makes it unsuitable for manufacture into the better class of goods.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– That has been eliminated.

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

– They are now asking that the tar be eliminated also. It may be possible to find some dye which will be soluble in the ordinary wool scour. It is also said that the commodities which we export to the East are wrongly labelled; that there is inferior casing of our goods; and that the tins in which they are packed sometimes burst. It is pointed out that the manner in which the contents of the tins is indicated on the labels is entirely misleading to the oriental mind. Complaint is also made that representations of birds that are regarded in the East as sacred are used for commercial brands. It is necessary thoroughly to study the requirements of Eastern markets. In the past we have not regulated the quantity of our exports of various commodities, but it is definitely necessary to establish quotas. Our practice has been merely to exploit the markets when we have had surplus production, whereas we should build up a steady trade. The following table shows the value of our exports to China during the period from 1922 to 1929 : -

Those figures show that our exports to the East cannot he said to have been stabilized. We have exploited the markets only when the seasonal conditions in Australia have made it easy to do so. I maintain that our need for Eastern markets is so great that we should do everything possible to conserve and develop them.

Has the Australian producer sufficient initiative and courage to do his part, if the Government will assist in the matter ? Will he see that the goods are properly graded, packed, and labelled? We should’ endeavour to effect exchanges of representatives between firms in Australia and in the East for the purpose of bringing about a better mutual understanding of marketing conditions. We should look to organizations such as the Chambers of Commerce and the Chambers of Manufactures to imbue exporters with the necessary courage to exploit those markets. They should even go to the extent of appointing select committees of their members to watch the overseas markets so that the utmost interest might be aroused. Have we not learnt the lesson of the recent depression ? We have been profligate in times of prosperity, sulky and despondent in times of adver sity. Cannot we now create a sinking fund of steady markets in the East, so that when the pendulum of adversity again swings against us, we shall be prepared, by reason of careful trade organization, to meet a period of depression. It is the duty of the Government to cooperate with the producers to see that these markets are exploited to the full. It should appoint trade commissioners for the East, establish bureaux of commerce, and send special representatives abroad to investigate trade conditions in these countries.

Dr EARLE PAGE:
Cowper

.- About six weeks ago, the budget speech was delivered, and since then a series of supplementary budget speeches have been made by the Prime Minister (Mr. Lyons) and other members of the Government. So conflicting have some of the speeches been, that it is difficult to know whether to discuss the original announcement or those which have been made since. Formerly the Treasurer’s budget speech was taken to indicate the final and considered financial policy of the Government for the year. The speech was framed, as a rule, after careful deliberation on the part of the Government; but it seems to me that, in many respects, the present Government has set a new standard of vacillation, and has practically said that if its supporters do not like some of the most important proposals in the budget, these will be replaced by others that may suit. We were given to understand, in the first place, that the payment to be made to the invalid and old-age pensioners had been carefully considered by the Government before its financial proposals were brought down, yet before Parliament had had an opportunity of discussing them, the pensions payment was altered. In my opinion, the alteration made the position worse; of the two the Government’s original proposal was less obnoxious. But itwas extraordinary that the Government should have changed its policy in this regard before the matter had been discussed in Parliament.

One of the most important features of the budget was the announcement that a considerable number of tariff reductions had been provided for. This proposal was very acceptable, indeed, to the party which I have the honour to lead; but we have been rather dismayed by the fact that within six weeks of the announcement of the remission of duties, the Government has tabled a schedule which involves 429 increases of duty. My party was particularly pleased some six weeks ago to know that the primage duty on galvanized iron had been removed. “We regarded that as a definite gain to country people throughout Australia. But a few days ago, the disturbing announcement was made that the Government had reconsidered the position, and had decided to reimpose that duty. Under the agreement made with the British Government at the Economic Conference at Ottawa, protection is to be afforded only to industries that have definite commercial possibilities, and yet provision is made, in the new tariff schedule, for a. 10 per cent, increase in the duty on clothes wringers. Many members on the Government side recently voted against the former increase in duty, and I believe that two members of the Cabinet actually refrained from voting on it. A few weeks ago, before the Resident Minister in London (Mr. Bruce) . left the United States of America, he made a speech which was broadcast from Washington, and in it he said that the forthcoming world conference could not be successful unless tariffs the world over were reduced. He declared that there had to be a settlement of the war debts problem, and also a reduction of tariffs. Yet, despite that announcement, this Government proposes to raise the Australian duties against other nations in 429 instances! It is most difficult to reconcile within a short space of time such conflicting statements of policy as those recently made. Personally, I should like to know exactly, what may be considered to be the definite policy of the Government in regard to tariffs.

When we come to the budget figures themselves, we notice that this year the Government is budgeting for a deficit. It is true that the deficit is said to be covered by the surplus of last year; but we find that the accumulated deficit has increased from £4,900,000, the figure at which it stood when I left the Treasury, to £17,216,000 this year, despite the fact that during the last two years, £2,900,000 per annum less than when I was Treasurer has been paid into the sinking fund. The present budget vindicates my Treasury record. The figures that apply to my term of office stand out in sharp contrast against those of the Treasurers who have succeeded me.

Since the delivery pf the budget speech, the Prime Minister (Mr. Lyons) has referred to the possibility of the reduction of taxation. I trust that the revenue will be found sufficient to enable that to be done. If the Government is of the opinion that the customs receipts this year will he largely in excess of the estimate, and that there is the possibility of a remission of taxation on that account, it should take Parliament and the country frankly into its confidence.

The budget debate affords honorable members an opportunity of examining, not only governmental finance, but also the national position., with a view to discovering remedies for our ills. The Leader of the Opposition (Mr. Scullin) has suggested that the problem of unemployment, which is by far the most serious of the problems with which we are confronted at the moment, should be met by the inauguration of a vigorous works policy, the financing of which should be by the nationalization of banking and the release of public credits. I consider that it is not advisable to proceed with public works to any great extent, which, in the past, have proved unproductive rather than productive. If we are to get the people back to work, we must make every effort to remove the shackles that at present are hampering industry. By a lowering of taxation and of tariffs - which I consider would lead to a greater amount of revenue being received - we must make it possible for private enterprise to employ a larger number of persons. An examination of the figures relating to employment will reveal that private enterprise is responsible for 90 per cent., and governments for only i0 per cent, of it. Thus it is to private enterprise that we must look for the solution of the problem of unemployment.

I am pleased to be able to congratulate the Government upon the fact that, since the budget was presented, the conversion of the New South Wales loan has been effected on such exceptionally favorable terms. I endorse the claim that was made this afternoon by the Prime Minister regarding the merit of that operation. The position in regard’ to long-term loans differs considerably in Australia and Great Britain. I hope that in the future we shall be able to obtain even better terms, and judging by our experience in the ‘nineties, I believe that we shall. At that time, even though Australia had passed through a period of very serious depression, we were able to borrow at as low a rate as2½ per cent. The Sydney Bulletin, which as honorable members know is not a very strong supporter of mine, points out that the recent conversion on such favorable terms was made possible by an act that I, as Federal Treasurer, was responsible for having placed among the laws of the nation. The creation of the Loan Council, and the incorporation of the principle underlying it in the Financial Agreement that was ultimately adopted by the whole of Australia, led to every State having the advantage of t he credit of the nation. It is worth while remembering that when that fight was being waged in this Parliament, the Labour party fought and voted against the validation of the Financial Agreement, and stated definitely that it would compass its destruction at the first opportunity.

Mr Rosevear:

– We have only the right honorable gentleman’s word for that.

Dr EARLE PAGE:

Hansard will prove the truth of my statement.

Mr Rosevear:

– The right honorable gentleman is taking the whole of the credit.

Dr EARLE PAGE:

– I am merely placing before honorable members the opinion of the Bulletin. Under the heading “ State Loans and the Commonwealth “ that journal in its last issue says -

Earle Page may at least be given full credit for the creation of the Loan Council. At the beginning - in 1923 - it was little more than a consultative body, consisting of the treasurers of the Commonwealth and the States, the object being to prevent cut-throat competition due to clashing in the raising of loans. From the outset it did its job in a businesslike way.

Dealing with the Financial Agreement, it says -

From this date (1st July, 1929), it assumed “ As between the Commonwealth and the States the liabilities of the States to the bondholders.” It is due to Earle Page to say that he is entitled to the full credit for that measure also - including the sinking fund.

An examination of the budget figures discloses three striking features. First, they vindicate my treasury record, and completely give the lie to every criticism, in this chamber and outside it, of my administration. The charge of extravagance that has been levelled against me is shown to be a myth. If I were extravagant in good times, when the national income was £650,000,000, how much more extravagant were Mr. Theodore and the present Treasurer in the succeeding years when the national income had shrunk!

Mr Forde:

– The right honorable gentleman was in office in very prosperous times.

Dr EARLE PAGE:

– Despite that fact, I spent less than the government with which the honorable gentleman was associated. On page 4 of the budget papers will be found set out the total expenditure under Part 1 for the past five years. In 1928-29, the last year that I was in office, the expenditure under that part was £51,899,077. The national income in that year, which was one of great prosperity, was £650,000,000. In 1929-30, when prosperity had commenced to decline, Mr. Theodore, as Treasurer in the Scullin Labour Government, spent under the same head £52,304,000; and in the succeeding year, the expenditure was £52,249,000, although the national income had dwindled to something like £450,000,000. Last year, the present Government expended £43,865,000. But to make a proper comparison, several items must be added to that amount. The first is the sum of £4,100,000, representing interest due to the British Government, which was paid by the two previous governments, but suspended during last year. Then, too, the payment by this Government into the sinking fund was £2,900,000 less than was the case three years ago, and an amount of £4,000,000 in interest has been saved under the com- pulsory conversion scheme relatingto the internal public debt of the Commonwealth.

Sitting suspended from 6.15 to8 p.m.

Dr EARLE PAGE:

– In 1928-29 we spent on defence £1,600,000 more than was spent last year. These various amounts, without the interest reduction of £4,000,000 total £8,600,000 which, if added to the £43,865,000 spent last year, make a grand total of £52,465,000, or £400,000 more than the amount expended during my last year of office. That is a complete vindication of my regime as Treasurer, and an adequate answer to my critics. If we also take into consideration the £4,000,000 - which was really a tax on the bondholders under the compulsory conversion scheme, a sum that was neither collected in revenue nor paid out in expenditure during last year - it will be seen that, during the last three years, there has not been in what might be termed the essential governmental expenditure of the Commonwealth, a decrease anything like commensurate with the decline in our national income.

I am not indulging in carping criticism, but am proving that if there is anything in the comparison I have made between my administration and that of my successors in office, the criticism levelled against me, that I was an extravagant Treasurer, could more aptly be applied to the critics themselves.

Possibly the best method of assessing the real control that was exercised by myself as Treasurer is by examining the departmental expenditure of the Treasury. When I first took control of that department at the beginning of 1923, the total departmental expenditure for the year was £1,019,000, whereas for the last year in which I was Treasurer it was only £656,000, a reduction of approximately £350,000. In the following year, a term in which the national income had appreciably fallen, and when my great critic, Mr. Theodore, was in office, the expenditure for the Department of the Treasury was £670,000, or £14,000 more. In the following year, with the Treasury still under the control of Mr. Theodore, the expenditure was £714,000, and last year, under the control of the present Government, it was £668,000, while this year the estimated cost of the Treasury is £666,000, or £10,000 more than the cost incurred in 1928-29, when I was Treasurer. Thus, to prove beyond dispute that the charges of extravagance that have been levelled against me are groundless, I need do nothing more than quote the official figures of the budget. Let me take the ordinary departmental votes, a reasonable basis of comparison. In 1928-29, a period of great prosperity, as the Deputy Leader of the O pposition has said, the total departmental votes amounted to £2,987,000, and they approximated the same figure during the two succeeding years. This year, when the Premiers plan is in operation, and a reduction of 20 per cent. has been made in Public Service salaries, the departmental votes total £2,361,000. Apparently all that the Government can do to improve the position is to make that prcentage cut. At any rate, despite the pressure of tho economic crisis, it has proved itself incapable of controlling the departments any more rigidly than I controlled them three years ago. The comparison is so obvious that it is unnecessary for me to labour it further; if I was an extravagant Treasurer, those who have followed me have been infinitely more extravagant. Although I was in office during a time of booming prosperity, I exercised such strict supervision that I reduced the cost of administration in my own department by £350,000. I brought it down to a figure that cannot be improved upon even in these times when the public so insistently demands economy on the part of the Government.

It is imperative that the cost of taxation and administration should be reduced. As the honorable member for Gippsland (Mr. Paterson) recently pointed out, if existing rates of taxation continue, it will be impossible to decrease interest on mortgages, that is, on private enterprise, the life-blood of the country. Every avenue must be explored in the endeavour to bring down that interest and effect an expansion of industry. I shall try to show how it can be done, but, first, I wish to draw attention to some features of the budget which need considerable discussion and clarification. First of all, I ask what is going to happen to the unfunded debt of the Commonwealth and States which the Prime Minister says now amounts to about £82,670,000? That means that, during the past three years, there has been what might be termed camouflaged borrowing to that extent; actually, it means that the annual . average rate of borrowing has been roughly £27,000,000, which does not materially differ from the rate of borrowing prior to the depression. The position in that respect is therefore unchanged, and the Government, apparently, is making no endeavour to face it.

Mr Paterson:

– The only difference is that formerly money was borrowed to finance public works, whereas recently it has been borrowed to finance deficits.

Dr EARLE PAGE:

– About £33,000,000 has been spent upon works, but the remainder has been used to make good deficits. In any case, many of the works upon which the money secured by these means has been spent are not reproductive, and it is certainly difficult to justify the adding of a great proportion of it to the national debt. Take, for instance, the £3,000,000 -unemployment winter loan for the year just ended. I have sought diligently, but can find no provision for the amortization of that amount for which there is no tangible asset in the community. Surely, something should be set aside for its redemption! Provision has been made for the amortization, over a period of 15 years, of £3,400,000, which is being paid out of our overdraft on account of wheat bounty; and I think that £325,000 is to be set aside this year as the first instalment. Had the policy advocated by the Country party for the last two years been adopted, the wheat-growers would have been assisted by means of a sales tax on flour, and their position would have been on a much sounder financial basis; and this year, with the wheat-growers in just as desperate straits as last year, the problem could have been dealt with satisfactorily, and without the Government’s hesitation and the general difficulties that assuredly must arise in the payment of a bounty - because the last bounty has not been paid for. The position of the wool industry is still most doubtful. It is common knowledge that the industry carried on last year at a loss of some £7,400,000. If, as the result of the findings of the committee of inquiry which has been appointed to investigate that great industry, the real backbone of Australia, it is found that it needs assistance, that assistance must be forthcoming during this temporary period of stress, no matter what the’ cost may be. But it is essential that we should put our finances on an absolutely sound basis, so that we may be able to help the stabilization of these important industries.

An investigation of the Government’s overdrafts, and an examination of- thcbank balances, impress upon the observer the fact that during the last three years there has been a change in the character of the advances made by banks. Three years ago, the amount of those bank advances was practically the same as it is today, but an analysis of them shows thai this year £30,000,000 more has been advanced to governments, and £30,000,000 less to private enterprise. It is obvious that we must look to private enterprise for that rehabilitation of the country which is desired by all, and we must, therefore, do something to ensure that private enterprise and not governments receives the revivifying blood supply of our finance.

I am satisfied that we shall not escape from this depression until we courageously face the facts. When we suffered a depression in 1890, the taxation in this country was roughly £3 par capita. To-day, Federal and State taxation aggregate approximately £14 per capita. That is a terrific additional burden which makes it imperative that every endeavour should be made, during the next couple of years, to cut down costs of government, Federal, State, or local government, and concentrate upon finding a way out of our difficulties: otherwise we shall never win through.

This budget, which should express the Government’s policy for the year, makes no mention of any constitutional reform which will enable the cost of government to be systematically reduced. There is a growing insistence for a complete examination of the whole position of Federal and State duplication, to see whether it is not possible to cut out overlapping and unnecessary costs, not only in government, but also those that impose unnecessary costs on private activities. I trustthat the matterwillbe dealt with atthe next PremiersConference; also, that thatgatheringwill examine the many unnecessary taxes and other impostslevied upon the community, and arrange for the abolition of those which cost more than they are worth. Ishall mention a couple. Take the guarantee bonds that various merchants and manufacturers must find in connexion with the sales tax. It costs them at least £100,000 a year tofind the bonds - probably more - while it costs the department £3,000 or £4,000 a year to administer this requirement of the act. Surely if the other taxes, such as land and income tax, can be collected without this provision, thesales tax can be collected without it. Economies can and should be effected in connexion with State matters as well as federal. I venture to say that in most States it costs 3s. or 4s. to collect a 2s. 6d. dog tax, while I am sure that the costof collecting motordrivers’ licence-fees exceeds the amount collected. All these things should be overhauled. Unnecessary duplication and overlapping should be eliminated, and the taxes wiped out. Taken together, these small items amount to a large sum for each individual. They lead to excessive charges on the public, and an unnecessary inflation of the cost of government. As I have mentioned before, duplication might also be eliminated in connexion with the State railway and Commonwealth telegraph services. Much more could be done in the way of effecting co-ordination of Commonwealth and. State social services. Many honorable members will recall that in 1928 I brought down a bill to deal with the whole subject of national insurance. If that scheme were implementing now, we should have been able to save from £200,000 to £300,000 a. year on invalid pensions, because they would be on a contributory basis instead of being, as at present, solely a charge upon the revenues of the Commonwealth, and this year’s budget might have been lightened by from £500,000 to £800,000. We should have then been able to incorporate, under the one administration, the various workmen’s compensation schemes, widows’ pensions., and the findingof money for hospitaland charitable aid departments, so that hospital lotterieswould be unnecessary. All these schemes of social ameliorationcould be placed on acontributory basis,to thegreat relief ofthe publicpurse and to the benefit ofthe individual citizen. It is not toomuch to say that£3,000,000or £4,000,000 a year could be saved if all such forms of duplication in social services were eliminated Thetimes will demand that these mattersmust be taken inhand withinthenext two or three years. I do notagreewith honorable members ofthe Opposition who say that Australia has turned the corner. We must keep down thecostof administration. During the nextfew years we will be forced to examine ourexpenditure most carefully, and effectall economiespossible.

However,evenafter these economies are effected, it will not bepossible to raise sufficientrevenue to carry on Federal, State and local governmental activities in a satisfactory manner unless something is done to raise, and then stabilize, Australian price levels, especially for our exportable products. The experts who were called in to advise governments on these matters have told us that in this way only lies safety. They have declared that we must first reduce the cost of government, and then so raise price levels as to reduce the existing gap between the prices of farm products, and those of industrial products. The Prime Minister (Mr. Lyons), in his budget speech, as shown on page 9 of that document, quoted the recommendations of the economists, as follows : -

That equilibrium between costs and prices be sought as a basis for the restoration of employment.

That Parliament authorize the Commonwealth Bank to manage the exchange rate to this end, taking into account economic conditions.

Those recommendations are on all-fours with the declaration of the Currency Committee at Ottawa, that we must, by some means or other, raiseprice levels. It is now generally recognized that world recovery must begin from the point of raising price levels in such a way as to reduce the gap between the price of farm produce and that of manufactured goods.

No general world recovery will take place unless steps are taken in a local and special manner to bring about this result. If this process can be begun in Australia we shall so restore prosperity and confidence, not only to our governments, but throughout the whole range of industry, that money will once more become available for investment. It is of little value to Australia that government bonds are at present selling at a premium. It merely indicates that people are afraid to put their money into industry, because they have no confidence and fear ultimate loss. We need to bring about a condition of affairs which will restore to the farmer, who owes money on his property, some equity in that property; to the workman who has borrowed money to build a house, some equity in his home; and to debtors generally some prospect of repaying what they owe in somewhat the same terms of currency as those in which they incurred their indebtedness. And if, at the same time, we can bring into closer relation with each other the prices of farm products and manufactured goods, we shall be beginning to stimulate employment, and make progress.

How is this to be done? The economists have said that Parliament should authorize the Commonwealth Bank to manage the exchange rate to this end, taking into account economic conditions. Let us examine what it is that determines the exchange rate under normal conditions; that is, when we are on a gold basis. We have now been off the gold standard for three years. It was in December, 1929, that an act was passed through this Parliament definitely removing us from the gold standard, and it will probably be five years at least, if not longer, before we get back to that standard. It is imperative that, at the earliest possible moment, we should fix upon some scientifically exact basis to determine the proper rate of exchange which shall govern the trading transactions between Australia and foreign countries. If we can so fix upon some means of managing the exchange rate in the interests of the people of Australia as a whole as to maintain the price of farm products, and at the same time reduce costs of production, we shall have not only taken an important step towards solving our local problems, but also have made a big contribution towards solving the problems of the world.

Let us examine what determines the rate of exchange, disregarding all embroidery such as tariffs, &c.

If, when we were on the gold standard, £100 would buy in Great Britain as much as £125 would buy in Australia, the effect would be to stimulate every English exporter to send as much goods to Australia as possible. He would sell for £125 in Australia £100 worth of English goods, and receive payment in England of, say, £123 10s. The effect would be that every British exporter would want to send goods to Australia, and soon there would be in England a big demand for Australian money, which would tend to raise the rate of exchange. As more and more British exporters endeavoured’ to reap the benefit of the Australian market, the competition both among themselves and with Australian manufacturers would so tend to reduce the price of goods in Australia, that our market would cease to be attractive, as price levels would fall and the rate of exchange rise and the volume of imports from England would fall off. Thus, with the exchange rate rising and our price levels declining by reason of increased competition, English traders would limit their exports, and the balance of trade between Australia and Britain would tend to adjust itself. Professors Gregory and Cassel, as well as other economists, have stated that the fundamental principle which governs the volume of trade crossing international frontiers in normal times is the fact that the volume of trade is, in the final analysis, governed by the difference in price levels in the trading countries.

But Australia is now off the gold standard and the rate of exchange is no longer automatically regulated by the ability to take payment in gold. We have gone on to a managed exchange rate, and it will be many years before we get back to the gold standard. Therefore, it is necessary that, at the earliest possible moment, we should establish contact on a real standard with something stable - either sterling or gold. We should-, know what exactly is the difference between the purchasing power of our money, and the purchasing power of sterling in London, or gold in New York. The Country party suggests, as did the honorable member for Corio (Mr. Casey), that there should be set up an economic committee of experts to determine the actual facts of the case, and to advise the Government upon the real difference between the purchasing power of Australian and English money. When that is done, there could be evolved some formula whereby we could use the known relationship between English and Australian money as one of the factors in determining the rate of overseas exchange. At present nobody knows where we are. This is clearly demonstrated by two recent experiences. During 1930, the exchange rate had been kept for most of the year at 6 per cent., and then it slipped up to 9 or 10 per cent.; when the Bank of New South Wales broke away from the exchange pool it immediately rose to 30 per cent., showing that previously it had been kept at an unnaturally low level. Again, in August, .1931, we were 30 points off sterling when sterling was on the gold standard. Then, one day, Britain went off the gold standard, and sterling immediately went 30 points off gold, but we, instead of then being on a par with sterling, were still 30 points off sterling, and 60 points off gold. There had been no variation in Australian price levels to account for this sudden and violent fluctuation in the exchange rate.

What I have suggested in the way of setting up an expert committee to get the facts and to provide machinery to keep exchange stable at a rate that suits the exporting industries is exactly what Great Britain has clone. The Government there has informed the Bank of England that it is prepared to put up £150,000,000 as an exchange adjustment account, so that the bank, without loss to itself, will bc able to keep sterling at such a level as to make exportation profitable, and, at the same time, if possible, stabilize internal trade by maintaining price levels within the country. Happenings during the last six or seven weeks have proved the value of this plan. World commodity prices have been falling steadily since the beginning of September. In the United Kingdom the price level of

[-14.1

primary products has dropped from 120 to 115 in sterling, and that of gold from 93 to 85. On the Sth August, wheat was quoted in Winnipeg at 61£ cents a bushel ; by the 15th October it had fallen to 48£ cents, representing a drop of 13$ cents, at the present rate of exchange or over Sd. a bushel. [Leave to continue given.’]

In Liverpool, on the Sth August, the price of wheat was 66$d. per cental, while on the 15th October it was still 63-kl. per cental, a drop of only 3d. per cental. Thus in England where exchange is being managed by the Bank of England in accordance with the plan I have suggested should be adopted in Australia, the fall in the price of wheat was only 3d. per cental, whereas in Canada, where no such system of control operates, the fall was as much as 8d. a bushel. Simultaneously, the fall in Australia was from 3s. 6d. to 3s. 2d. f.o.b., or about half that which occurred in the uncontrolled markets of the world. The only justification for not stabilizing the exchange would be the certainty that world prices will rise; but although there has been a mild boom in the United States of America, largely due to the reflationary effort to pump credit into the system, that phase has passed, and during the last month we have seen a gradual recession of prices the world over. The condition on which Australia gets the preference of 3d. a bushel on wheat under the Ottawa agreement is that it must be able to offer its wheat in the United Kingdom at world prices; therefore, we must make certain that we get the full advantage of the exchange rate, so that the primary producer may receive a fair return.

Mr Casey:

– What is the world’s price for wheat?

Dr EARLE PAGE:

– That must be defined bv those who drafted the Ottawa agreement; I have searched that document in vain for any definition, but I hope for enlightenment later. Whether world-prices for primary produce continue to fall or not, I am convinced, after an exhaustive examination of the subject, that the exchange rate must rise in Australia during the present year. We know- fairly accurately what our exports will be; although the wheat crop will be fairly large, the wool clip will be slightly less than it was last year, whilst the returns from butter will be nearly 20 per cent. down. We shall be lucky if we receive within 5 per cent, of the £78,000,000 we received last year for our exports; a considerable rise in world prices would have to occur before we could get much more. On the other hand, a large increase of imports is assured. During the last eighteen months imports have been so restricted that stocks of many indispensable materials not made in Australia have become depleted. In August of this year the sales of goods had increased by 10£ per cent, over those for the corresponding period of last year, yet there was 10 per cent, less goods on the shelves of 40 of the big firms than there was at the beginning of that month twelve months earlier. With a bigger demand and depleted stocks of goods, many of which are not produced in Australia, business cannot be carried on unless we import. I am convinced that these goods will be imported. Moreover, the importers have learned to buy and sell futures in exchange. They have become more or less accustomed to exchange as a factor in their dealings, and it is not the deterrent to business that it was eighteen months ago. But unless something is done to stabilize exchange and avoid the wide fluctuations and big lurches which dislocate business, the position will become such before long that the Commonwealth Bank will lose control, as it did in January of last year. In comparison with the amounts at our disposal four years ago the funds at present available in London are still alarmingly inadequate. In August, 1928, those of the Commonwealth Bank amounted to nearly £24,000,000. In Australia the note issue was backed by £22,000,000 worth of gold, and there was a further £23,000,000 worth in the vaults of the private banks. That £45,000,000 of gold in Australia was liquid money, which could, if necessary, he transferred to London for the adjustment of international balances. In other words, we had available at that time £69,000,000 worth of liquid money, as compared with about £24,000,000 to-day. The Commonwealth Bank funds are roughly £14,000,000, and our gold reserve about £10,000,000, yet at the present time it is more necesssary to have money available in London, because, whilst in 1928 we could have raised loans to ease our position, I doubt if we shall be able to float new loans for new money abroad for many years. Indeed, we should not attempt to do so. I hope that we shall be able to convert our maturing loans on good terms, but we must endeavour to avoid new borrowing abroad. It is essential for us to build up in London the largest practicable fund, not only to meet the interest bill and pay for essential imports, including tea, rubber, and the raw- material of our local industries, hut also, if necessary, to pay off a proportion of any loan that may be maturing. With substantial funds available in London we can negotiate much more favorable terms in connexion with any proposed conversion. Therefore, before we attempt to bring the rate of exchange below its present level we should resolve to build up an insurance fund in London against any vicissitudes that may occur. I am not afraid of the consequences of building up big funds in London under the control of the Commonwealth Bank. Such a proceeding need not necessarily mean scarcity of money in Australia, because by the amending act of this year it is possible for the bank to issue notes in Australia against sterling assets in London. Such assets can be held there to meet any emergency, whilst money can be made available by the bank in Australia to meet seasonal and commercial requirements.

Machinery for the stabilization of exchange similar to that adopted in the United Kingdom should be introduced in Australia. The British system cannot be truly said to be governmental interference with the Bank of England, nor would political interference with the Commonwealth Bank be involved in the creation of an exchange adjustment fund to protect the bank against losses resulting from its efforts to stabilize the exchange rate. ‘ To carry out such a scheme the Commonwealth Bank must be prepared to buy all exchange offered by the associated banks and private commercial houses ; otherwise, it cannot effectively stabilize exchange ; but the country as a whole must be prepared to provide the money to enable these operations to be carried on without risk to the bank. If the bank were directed to regulate exchange according to a formula drawn up by experts which had regard to the purchasing power of our money, as compared with that of other countries, we could have the same stability in exchange as when the country was on the gold standard. Exchange should not be stabilized at an absolutely fixed figure. There should be a possibility of slight variation, according to the disposition of our funds in London. The adoption of this proposal would, however, obviate the big variations that otherwise will assuredly occur, causing dislocation of business, and preventing the development of that confidence in industry which is so essential to general re-employment. But associated with this system must be provision whereby the customs duties shall be brought into direct relation to the rate of exchange when above normal. I shall not attempt to dogmatize as to what that relationship should be, but I suggest that the Commonwealth Bank Board and the Tariff Board should be asked to confer with a view to evolving a formula which would operate automatically whether Parliament was in session or not. I was astounded when, a few days ago, the Minister for Trade and Customs (Mr. Gullett) stated that in future the Tariff Board would not take info account exchange and primage when determining customs duties. Not even the most reckless optimist can expect that, until many years have elapsed, the Australian currency will be on a par with English currency. The adverse exchange having some degree of permanency, the resultant difference in the purchasing power of our money should be taken into consideration in determining the effect of customs duties. When this Parliament imposes duties, it fixes a rate which it regards as sufficient to protect the Australian manufacturer if exchange were normal. We in this Parliament do not calculate that he will also have the additional protection of 25 or 30 per cent, exchange and 10 per cent, primage. If this triple protection be continued, many industries that are economically unsound will come into being, so that when normal conditions are restored, we shall be con’ fronted with demands for increased duties because vested, interests have been established by the aid of exchange and primage. The relationship of tariff protection to the exchange rate should be determined by a conference between the Commonwealth Bank Board and the Tariff Board, and we should also amend the Customs Act to enable the adjustment to take place automatically, as the rate of exchange moves up or down. If we do that, both importers and manufacturers Will know, at all times, how they stand, and our exporters will get the full advantage of the exchange, the equivalent of a bounty on what they sell overseas, whilst their production costs will not rise as they would without such a safeguard.

The CHAIRMAN:

– The extra time allowed to the right honorable member has expired.

Dr EARLE PAGE:

– If we adopt this proposal we shall be doing much to stabilize Australia’s position and create confidence, which will encourage people to withdraw money from government stocks and fixed deposits for investment in industry, thus providing increased employment.

Mr FORDE:
Capricornia

.- The more one studies the latest Treasury figures the more one is convinced that the recent reduction in wages, invalid and old-age pensions, and the maternity allowance, imposed by the Government are not only unnecessary, but also absolutely unjust. The figures already disclosed by the Treasurer (Mr. Lyons), show a surplus of approximately £2,600,000 for that portion of the financial year already passed. In these circumstances, the amendment moved by the Leader of the Opposition (Mr. Scullin) should appeal to honorable members, particularly as it relates to the subject of unemployment. If there is one feature of the budget that is more outstanding than’ another, it is that this Government ha3 not put forward any practical scheme to deal with thatimportant problem. The amendment, if carried, will be an instruction to the Government, not merely to go on talking of unemployment, but also to do something practical. The PostmasterGeneral (Mr. Parkhill) said that the Government is watching the position very closely - that sounds all right, but it does not get us anywhere - and that what is needed is more work and less talk. I have listened to talk for the last twelve months, and am convinced that what is needed is more work on the part of the Government.

I listened with a good deal of interest to the speech of the right honorable member for Cowper (Dr. Earle Page), who was Treasurer in a Commonwealth administration for over six years, and I venture to say that, had those communications which have been passing between the right honorable gentleman and the Prime Minister (Mr. Lyons) culminated in the Country party getting what it wanted, he would now be heard upholding the Government for everything it has done. Before the last general election 1 remember the right honorable member for Cowper and the honorable member for Gippsland (Mr. Paterson), the Deputy Leader of the Country party, saying that we ought to forget party; that it was time for every one to subordinate his own personal views, and put those of the country first.

Mr Paterson:

– Tho honorable member for Capricornia is incapable of doing that.

Mr FORDE:

– That is a matter of opinion.. The members of the Country party think more of securing a favorable position in the Cabinet than of putting country first. A good deal of the criticism that we have heard from them is sheer political hypocrisy, because, when they had the opportunity, they did not do those things which t.hey now say should be done. In that respect they are as blameworthy as are the members of the present Administration. They were responsible for the election that put the Lyons Government into office, because they intrigued with the different factions” to defeat the Scullin Government. The Prime Minister, after the then Deputy Leader of the Opposition (Mr. Latham) and the Deputy Leader of the’ Country party (Mr. Paterson) had pledged the support of their parties to the principles of policy enunciated by himself, said -

Our supreme need is for a truly Commonwealth government that will he free from the crippling fetters of the party system, and that will confess special allegiance to no suction of the community.

Speaking at Kyabram, in Victoria, he further said -

The need for parties, party labels, party machines and party flags should not exist.

Those statements were made before the last general election. “What happened when the election was over? We found that these gentlemen could not agree as to who should get? the plums of office. There were only thirteen portfolios to be allotted, and they were all after them.

The CHAIRMAN (Mr. Bell).Order! I do not think that the remarks of the Deputy Leader of the Opposition have any bearing upon the budget.

Mr FORDE:

– Listening to the remarks of the right honorable member for Cowper, I could not help recollecting that he was a member of a composite government for over six years, and that, during that time, he did not attempt to dispense with duplication in railway management and motor and other forms of taxation to which he now objects. Although these matters came under his purview as Acting Prime Minister of Australia, he did not attempt to eliminate them. He came into this Parliament pledged to bring about the formation of new States, but nothing has eventuated. All that the right honorable member did was to help Australia to go headlong towards national bankruptcy. The present Minister for Trade and Customs (Mr. Gullett), who was then a private member, said that the right honorable member for Cowper w-as the most tragic Treasurer Australia had ever known. We have heard a good deal to-night as to how the right honorable member would save Australia from its present difficulties. The right honorable gentleman was no better and no worse than the right honorable member for Flinders (Mr. Bruce) and other members of that Ministry. Now that the right honorable member for Cowper is in the cold shades of opposition, he is able to say what should he done, but what he advocates was not attempted by the Government of which he was a member. When he took office as Commonwealth Treasurer in a composite ministry in 1922-23, he found, not an empty Treasury, but an accumulated surplus of £7,400,000; and when he handed over to the Scullin Administration, he left an empty Treasury, an accumulated deficit of over £5,000,000, and an adverse trade balance amounting to £70,000,000. The Government of which he was a member held office during a period when the revenues were buoyant, and when phenomenal prices were being obtained for our exportable products. Tinder these conditions almost any political fool could have been a good Treasurer, but the right honorable gentleman was an abject failure. During the period lie was in office he received £44,000,000 more in revenue than he would have received had the revenue remained the same as it was in the year prior to his assuming office. I point out that during the same period the overseas Commonwealth debt, excluding State debts, increased by £47,000,000, and the overseas interest bill by £2,319,000. The right honorable member took a good deal of credit for presiding over the meetings of the Loan Council, and using a restraining hand upon the extravagance of the States. During that period, the Commonwealth and State debts increased “by £152,000,000, and Australia’s interest bill by £8,400,000. The right honorable member and others will probably say that a new government is now in office. Thi3 Government may appear to bc new, and it represents a party with a new name, but the difference is only in name, its members belong to the same old political school that led Australia right up to the verge of national bankruptcy. When the right honorable member for Cowper joined the right honorable member for Flinders, he said that the new government bore very little resemblance to the old and discredited Hughes Administration, and he has become a good apologist for the misdeeds of the Bruce-Page Administration, but his statements are not taken seriously by those who know the position. I say to the farmers, a good many of whom I represent, that they may take as so much political eye-wash all this sham fighting that is now going on between the Country party and the Government; because, in reality, the members of both parties belong to the same political school.

It is a matter of fighting for political plums-

The CHAIRMAN:

– I again ask the honorable member to deal with the financial statement.

Mr FORDE:

– The right honorable member for Cowper referred to an increased expenditure from revenue of about £4,000,000 during the financial year 1930-31, when the Scullin Government was in office, a3 compared with 1928-29. The first item of this increased expenditure, which was inescapable, was £1,224,000 in interest, sinking fund payments and exchange. If the right honorable member had his way the exchange rate would soar sky high, and there would be a greatly increased annual payment in respect of exchange on moneys sent overseas to meet interest and other charges; In the next breath the right honorable member contends that he does not believe in inflation. He is as inconsistent in this respect as he is in connexion with fiscal matters. He advocates high duties on a few commodities produced in primary industries, and freetrade in connexion with the products of secondary industries. Unless the Scullin Government repudiated its obligations to the overseas bondholders, the payment of £1,224,000 in interest and sinking fund, and exchange, was inescapable. The next increase was an amount of £1,275,000 in connexion with invalid and old-age pensions. Owing to the financial depression which came upon Australia there was a greatly increased demand on the Pensions Fund. With their sous and daughters out of work, a larger number of the aged aud infirm were forced to become a charge upon that fund, thereby increasing payments from that source by £1,275,000. That was another payment which was inescapable, as the right honorable member knows. The Scullin Administration was not as extravagant as the government of which the right honorable gentleman was a member. During the year concerning which he so adversely criticized the Scullin Administration, there was an increase of expenditure on war pensions of £201,000, and on repatriation services of £147,000. The former was due to some extent to the appointment by the

Bruce-Page Government of a War Pensions Entitlement Appeal Board. It was said that the administration of the department concerned was somewhat harsh, and the Government of the day -appointed a hoard before which decisions of the chairman of the Repatriation Commission could be reviewed. The greater proportion of the appeals were allowed, with the result that the annual cost of war pensions during the first year the Scullin Government was in office increased by £201,000. The cost of conducting the Postal Department and meeting interest and sinking fund payments increased by £504,000. Payments to and for the States, including a special grant of £320,000 to South Australia, increased by £508,000. The total increase of inescapable expenditure was £4,145,000. Moreover, a special grant of £1,000,000 was made available to relieve unemployment. With the limited financial resources at the disposal of the Scullin Government and a hostile majority in the Senate, it was impossible to solve the unemployment problem. We decided to earmark £1,000,000 from revenue to provide relief for the unemployed, and £150,000 for the repatriation of surplus coal-miners. Inescapable expenditure was thus increased by a little over £5,000,000, of which £1,224,000 represented interest and exchange, and £1,275,000 invalid and old-age pensions, notwithstanding that during the first year of office, we reduced the cost of government by £1,000,000. To-day, the right honorable member for Cowper offers advice ; when he was Treasurer to the Commonwealth, he spent money freely. The Government of which he was Treasurer created 58 boards,- commissions, and committees at a cost of £600,000 to the taxpayers of Australia. For the financial drift, he and the Government of which he was a member must accept the responsibility. During the right honorable gentleman’s term of office, the revenue of the Commonwealth, not including interest on loans raised for the States, increased from £63,800,000 in 1922-23 to £65,000,000 in the following year, to £67,700,000 in 1924-25, to £70,200,000 in 1925-26, and to £75,500,000 in the following year. In 1927-28 it was £73,800,000, and in 1928-29, £74,900,000. In other words, comparing the year 1922-23 with 1928-29, the revenue of the Commonwealth increased by £11,000,000 as the result of good seasons, and high prices for our exportable products. The right honorable gentleman, during his six years of office, enjoyed a revenue of £44,000,000 more than he would have received had the receipts remained on the 1922-23 level. In addition, the Bruce-Page Government inherited an accumulated surplus of £7,428,000 ; but it left office with a deficit of over £5,000,000. The expenditure under the right honorable gentleman’s administration, not including the interest on loans for the States, or public debt redemption payments, was £62,800,000 in 1922-23, and £65,000,000 in 1923-24, rising to £79,250,000 in 1927-28 ; in 1929-30 it was £77,250,000. For the la3t six years of his term of office, the expenditure amounted to £431,500,000, compared with a revenue of £427,000,000- a deficit of about £4,500,000. No provision was made for the lean years to follow.

Although the right honorable gentleman had a good deal to say about the high customs duties imposed by the Scullin Government, no one stood for higher revenue” duties than he did when in office. The’ right honorable gentleman apparently believes in imposing duties for revenue purposes. He would have them low enough to allow goods to enter this country in increasing quantities, resulting in abounding revenues, but acting detrimentally on Australian industries, and stifling development. In 1922-23. when the right honorable gentleman became Treasurer of the Commonwealth, the customs and excise revenue was £32,872,000. It increased to £41,000,000 in 1928-29. Never in the history of the Commonwealth has there been a Treasurer who heaped up excise and customs duties in order to obtain revenue, to the extent that the right honorable gentleman did. During the term of office of the Bruce-Page Government, the revenue per head of the population increased from £11 6s. to £11 16s., and the expenditure from £11 3s. to £12 3s. per head, a per capita increase of 10s. and 20s. respectively. I should not have placed these facts on record had it not been for the unjust criticism of the Scullin Administration by the right honorable gentleman. [Quorum formed.]

The right honorable gentleman criticized the Scullin Government for its administration of the finances of the country, but he was not generous enough to admit that that Government came into office at a time of acute financial difficulty. So badly had the Bruce-Page Government bungled the affairs of the country that the Scullin Government was faced with an accumulated adverse trade balance of £76,000,000. Our interest bill overseas for the same period was £174,000,000, while the balance against Australia was the enormous sum of £232,000,000. Instead of creating an excess of exports over imports in order to enable us to meet our interest payments, the Bruce-Page Government borrowed money to pay interest on money previously borrowed. Overseas interest rose from 10 per cent. of the value of our exports in 1913 to 19 per cent. in 1928-29, and to 34 per cent. in 1931-32, basing the exports for the last-mentioned year on British currency value. As a result of the Scullin Government’s efforts to adjust the trade balance, there was in 1931-32 a favorable trade balance of £30,000,000.

I regret that the Government has not done anything to solve the problem of unemployment. It is useless to expect a return to prosperity until our people are again at work. The banks, which should be prepared to finance such public works as would assist more generously in the development of industry in this country, are pursuing a policy of deflation, thereby creating further turmoil and increasing the numbers of the unemployed. Having a majority in both Houses of this Parliament, the present Government cannot excuse its inaction by saying that it cannot get its legislation through Parliament. The rectification of the trade balance and the other achievements for which the Treasurer took credit in his budget speech, are the result of the administration of the Scullin Government, which adopted the sane policy of prohibiting the importation of certain luxuries, rationing others, and generally protecting Australian industry. It was no mean achievement for that Government to convert an unfavorable trade balance of £33,000,000 in 1929-30 to a favorable trade balance of £30,000,000 in. 1931-32. If the Scullin Government had had a majority in both Houses of Parliament, it would have been free to place on the statute-book legislation to deal with the monetary problem. Unfortunately, its proposals, although accepted by this chamber, were rejected by another place. Because another place toyed with the Scullin Government’s legislation to establish a central reserve bank and to make available a fiduciary note issue, hundreds of thousands of workers were unable to find employment. The banks turned a deaf ear to every request to make money available for reproductive works. When the farmers of this country were in distress, and thousands of them were being forced off the land, the Scullin Government introduced a measure to provide for a fiduciary note issue of £18,000,000, of which £1,000,000 a month for twelve months was to be devoted to the relief of unemployment, and £6,000,000 to assist the wheat-growers of Australia. That measure was defeated; but since then many supporters of the present Government as well as large numbers outside Parliament have come round to the view of the Federal Labour party. To-night, the right honorable member for Cowper urged that price levels in Australia, and abroad, as well as the exchange rate, should be increased. This would mean a measure of inflation. The right honorable gentleman quoted Professor Cassel of the Stockholm University in support of his views. Addressing the Institute of Bankers in London, in May, 1931, Professor Cassel said -

It is time that the leading central banks agreed to end the depression by declaring their intention in future to supply the world abundantly, with the means of payment that a further fall in prices would be impossible. As long as the central banks refuse responsibility for the purchasing power of their money, humanity will be in the same situation as the passengers on a liner, of which the captain has lost control … If the present scarcity of gold is not counteracted, unlimited depression of commodity prices will result. . . The only possible remedy is systematic reduction of the central banks requirements of gold reserves.

I could cite a number of other authorities all of whom favour an increase in price levels throughout the world. To-day, many gentlemen to whom the word “ inflation “ was at one time anathema are advocating a modified form of inflation to infuse some lifeblood into the veins of industry. The policy of deflation which has brought the world to the verge of starvation must cease to operate. The farms and factories of the world can produce as much as, or even more than, what was produced five or six years ago. The demands of the people have increased accordingly, but we still have over-production and underconsumption. Millions of people are on the verge of starvation. It is evident to. every one that the monetary system of the world has broken down. Professor Copland in Australia and Professor Keynes, Sir Robert Home, Mr. McKenna, in Great Britain, all contend that unorthodox methods must be adopted if the world is to be lifted from the financial slough of despond in which it finds itself. Price levels have been reduced to such an extent that the leading economists of the world are now advocating the doctrine that was preached by the Federal Labour party two years ago, and which was then spurned by every one outside the ranks of Labour. To-day, it is being accepted as probably the only method of overcoming our financial difficulties. But the present Government has no policy of monetary reform. It simply has its ear to the ground to hear what is being said by the private trading banks, whose main consideration, as the Leader of the Opposition (Mr. Scullin) rightly pointed out, is the making of profits for their shareholders. They are not likely to adopt any monetary reform that will militate against their profit-earning propensities. The Country party, which speaks in one breath against inflation, is now in another breath urging inflation by means of an increase of the exchange rate. It is a typical instance of its inconsistency. The contention of the honorable member for Swan (Mr. Gregory) that the policy of protection has failed to provide employment has been refuted by the official figures, which show that since the war secondary industries have absorbed 100,000 additional workers, whereas, despite the expenditure of £35,000,000 on settling returned soldiers on the land, there are to-day 50,000 fewer people employed in primary industries, and 9,000,000 more acres of land under cultivation producing 2,000,000 more pounds of wool per annum than in 1911. If 50,000 fewer people in primary production can produce sufficient for Australia’s requirements and for export, how are we to absorb the 200,000 workmen who for years were engaged on construction works paid for out of the moneys borrowed, chiefly abroad, at the rate of £30,000,000 per annum during the period when the right honorable member for Cowper proudly presided over the Loan Council? It is certain that they cannot all be absorbed in primary industries. It is disheartening to hear, day after day, the utter nonsense talked by the supporters of the Government to the detriment of the secondary industries established under the protectionist policy as , accepted by the majority of the people of Australia. There are nearly 500,000 people engaged in these industries. Had a truly protectionist policy been put into operation at the time when we had the huge national income of £650,000,000 per annum, when phenomenal prices were ruling for wool, wheat, butter, meat and other exports, there would have been a tremendous development of secondary industries in this country. Unfortunately, when the Scullin Government took office, and I was able to play a humble part in putting into operation the protectionist policy of the Federal Parliamentary Labour party, we found ourselves in the throes of a depression, and the national income had. fallen by £200,000,000 per annum. The primary producers were obtaining so little for their products that they had no money for investment in industry. After all, factories are established by thrifty persons who , are prepared to invest, their money for the purpose of providing employment in the production of goods which would otherwise be- imported. Had it not been for the protectionist policy of the Scullin Government, many more thousands of our citizens would to-day be walking the streets or the country seeking work. This Government has sadly overlooked the problem of unemployment. At the elections, the United Australia Party made all kinds of specious promises. On the hoardings and throughout all the tory newspapers of Australia, all kinds of propaganda was indulged in by that party. Every person out of work was to be given a job. This Government has done nothing to give effect to its election promises. Since it has been in office, unemployment, according to the Statistician’s figures, has increased. When the Labour party lost office the number of members of unions reporting as unemployed was 118,732, or 28 per cent. At the end of the first quarter of the year when this Government was in office the number reporting as unemployed increased to 120,366, or 28 per cent.; and for the second quarter of the year the number increased to 124,068, or 30 per cent.

Mr Lane:

– What relation did Mr. Lang have to that increase of unemployment?

Mr FORDE:

– When Mr. Lang was in office the Nationalist party blamed him for all sorts of things, but since he has been out of office unemployment has increased, and the Nationalist party must accept the responsibility for that. We find from the census of 1921 that the number of people out of employment was four ‘times the number of unionists reporting as unemployed. That means that to-day there are approximately 495,000 people out of work in Australia, under the regime of the so-called United Australia Party Government. The United Australia Party said that if it were elected to office there would be a restoration of confidence, a steady flow of credit, and jobs for the workless. It is poor consolation to the 495,000 people who are out of work today to find that this Government has done nothing at all for them. During the election, the United Australia Party displayed placards on every hoarding to the effect that work would be provided for the unemployed. The present PostmasterGeneral, with crocodile tears running down his cheeks, loudly expressed his sympathywith theworkless and homeless. The right honorable member for Flinders (Mr. Bruce), speaking at that time, said that if confidence were restored there would be an immediate stimulus to commerce and industry, and the re-absorption of theunemployed would start immediately. We are waiting for a start to be made in the absorption of the unemployed. As the Postmaster-General has said, we have had sufficient talk. Now we want the work to be provided. There are 495,000 people out of employment within Australia, and there is nothing in the budget to indicate that anything practical is to be done for t hem.

Much has been said on the subject of the Ottawa conference, and we shall later have every opportunity to discuss the details of an agreement, which, in my view, is really just another bunch of carrots dangled before the people of Australia. The Prime Minister said that it was difficult to forecast with certainty what would be the net effect on the revenue us the result of the tariff alterations made in pursuance of the agreement, but that we could be reasonably certain that the tariff alterations would bring about a reduction of revenue with consequent relief to the taxpayers. Under the protective policy of the Scullin Government imports were largely restricted, but the reduction of duties now instituted by this Government will permit of additional imports and result in increased customs revenue. During the last three months therevenue from customs and excise has been £1,500,000 in excess of the estimate, indicating clearly that during the present financial year, there willbe a much greater revenue from customs and excise than was at first anticipated. The Ottawa agreement reveals every advantage that Australia is likely to reap under it, but it wraps in obscure phrases the actual price that this country is paying and may be called upon to pay for the concessions that it has won from Great Britain. As sure as night follows day, there will be a substantial increase of unemployment in this country as the result of the bargaining that took place at Ottawa. Our secondary industries have been placed in jeopardy for some uncertain and problematical advantage to a section of Australian primary industries. Article 12 of the agreement takes from Parliament all real authority in tariff-making, and places Australian industries entirely at the mercy of an outside body. That part of the agreement, when in operation, will lead to further unemployment. It will place in jeopardy the existence of many of our secondary industries despite the promises of the Government that nothing would be done to injure Australian factories or the workmen employed therein.

The CHAIRMAN:

– The honorable member’s time has expired.

Mr DENNIS:
Batman

.- On this, the first occasion upon which I have been privileged to address the House, I congratulate the Government upon its budget proposals to restore confidence and bring the country into a condition of prosperity again. As honorable members will recall, the keynote of the policyspeech delivered by the right honorable the Prime Minister (Mr. Lyons) and of the utterances of his supporters during the election campaign last year, was the honouring of obligations entered into by the Commonwealth, and the enactment of legislation to rehabilitate the country’s finances, and widen the area of employment. That was the policy upon which I was elected to this Parliament.

Mr Riordan:

– Then the honorable member will soon have to resign.

Mr DENNIS:

– By no means, because the people generally admit that the Government is giving full effect to that promise. Evidence of restored confidence is seen in the remarkable success achieved by the Resident Minister in London (Mr. Bruce), in connexion with the conversion at 3½ per cent. of the £13,000,000 loan on behalf of New South Wales.

Mr Makin:

– See what the unemployed in Batman have to say about that.

Mr DENNIS:

– I am well able to look after the unemployed in my district. During the week-end I am usually in my electorate, and make a practice of meeting as many of my constituents as possible. But I am able to keep in touch with my electors and know exactly what they think about these matters. Before I resume my seat, I hope tosatisfy all reasonable members of this chamber that, so far as my district is concerned, at all events, the problem of un employment is not now quite so serious as it was last year.

Mr Forde:

– That is due to increased employment in factories as a result of the Scullin Government’s tariff policy.

Mr DENNIS:

– The honorable member for Capricornia (Mr. Forde) has an exaggerated idea of his own knowledge of industrial and tariff matters. I speak from actual experience among the people whom I represent. I say definitely that the workers of this country, having become dissatisfied with the Scullin Government, because of its failure to deal with the unemployment problem, played their part in dismissing it from office in December of last year. As the result of that appeal to the people, there are many new members on this side of the House, and a large number of former members of the Labour party have gone forever from this chamber.

Mr Gander:

– History will repeat itself.

Mr DENNIS:

– If we do not do our job properly, it will; not otherwise. I predict that, following the next appeal to the electors, the Lang party in this chamber will be eliminated, and the Federal Labour party will still be in opposition, but possibly somewhat stronger than it is to-day, because of the seats it will win from the Lang party.

Mr Gander:

– Oh ! I thought the honorable member was a friend of ours.

Mr DENNIS:

– So I am. I am simply telling the honorable member a few home truths.

The CHAIRMAN:

– Order ! It is usual for a new member to be allowed to make his first speech in silence.

Mr DENNIS:

– I was about to remark that, when Mr. Lang, as Premier of New South Wales, refused to observe the conditions laid down in the Premiers plan, the Commonwealth Government took the necessary legislative action to force his resignation, with the result that we now have in New South Wales a Premier who is whole-heartedly co-operating with the Commonwealth Government in carrying out those conditions.

Mr Gander:

Mr. Lang was not forced to resign; he was expelled by the Governor.

Mr DENNIS:

– Well, the result was the same. As regards Victoria, I am glad to be able to say that the then Premier of that State (Mr. Hogan) loyally adhered to the plan.

Mr Gander:

– And was expelled from the Labour party in Victoria.

Mr DENNIS:

– If Mr. Hogan was expelled from his party by the Victorian Labour Conference, then the honorable member and others in his group in this House cannot claim to be members of the Labour party. The facts are that Mr. Hogan’s health necessitated a sea voyage, and during his absence Mr. Tunnecliffe, who became acting leader of the Labour party, declined to accept certain conditions laid down by the Premiers in conference, with the result as we know, that the Hogan Governmentwas forced to the country and was defeated by an overwhelming majority.

Mr Riordan:

– Shame!

Mr DENNIS:

– It was a shame that the acting leader of the Labour party turned down his leader during the latter’s absence. Mr. Hogan had rendered splendid service to the people of Victoria. I am convinced that if his health had continued to he good, and he had been in Victoria at the time, he would have stood loyally by bis promises and, in all probability, would still be Premier of Victoria. But Mr. Tunnecliffe was made of different stuff. He ran away from his “boss,” and when an appeal was made to the people, he and his followers were given their walking ticket. To-day, they are in opposition. All State Governments, including the Labour Government of Queensland, are standing behind the Premiers plan and, as a consequence, the financial situation is improving from day. to day. Several speakers on the Opposition side have alleged, during this debate, that the unemployment situation is not improving. I take the contrary view, and believe that our Resident Minister in London will shortly be able to record further successes in his loan conversion negotiations in the best interests of the Commonwealth.

I repeat that effect has been given to the first plank in the Government’s platform - the restoration of confidence - and that the problem of unemployment is being tackled in a business-like way.For the last two years, I have been a member of the local unemployment central relief committee in my district, and I am thus able to speak with some authority as to the position there. I happen also to be a member of the Northcote City Council, which is vitally interested in this problem, and I have obtained reliable information from Mr. Zwar, M.L.A., who is closely identified with relief in the adjoining suburb of Preston, where thereis a population of over 30,000. He informed me that the number of unemployed in the district of Preston had been reduced by 500. The following letter which I received from Mr. J. A. Thomson, the Town Clerk of Northcote, will indicate clearly how the position is improving in my district : -

Town Clerk’s Office, Northcote, 17th October, 1932.

Councillor S. Dennis, M.H.R.

Dear Sir. - The following are the figures required by you relative to persons on sustenance: -

The above figures are in relation to persons receiving sustenance, and include women. At the present time there are also registered for work 500 men; some of these will be single men living with parents who are on sustenance.

We have big brickworks in Northcote - one of our most important industries - and I asked the Town Clerk also to inquire when the works, which have been closed down, would be re-opened. His information on that point is as follows: -

Re Northcote brickworks. This compauy commenced operating to-day. One hundred and forty men are employed on half time, 70 each alternate week. Twenty-two lorry drivers are engaged, some of whom have been carting from stock since the last closing of the works. The period of operation is indefinite, but it is considered that sufficient orders are in hand to warrant works continuing on half-time basis for six months.

It is reasonable to suppose that at least 90 of those 140 men are local residents. If that number is deducted from the 997 it will be seen that only 900 men are on sustenance at present. If every constituency in the Commonwealth could show equally satisfactory figures the number of unemployed would be materially reduced. It is the duty not only of the Government, but of every member of this

Parliament also to take an active interest in the solution of this great problem. In my opinion it is desirable, in the best interests of the community, that a committee of, say, ten or twelve members representative of every party in the House should be appointed to co-operate with the Government in devising ways and means of reducing unemployment. The Ministers of the Crown have their hands full with their ordinary administrative work, and for this reason I believe that a committee such as I have suggested would be able to make valuable suggestions to the Government on this subject. I believe that members of every party would be glad of the opportunity to serve on it. I make this proposal in all seriousness.

There are many ways of relieving unemployment. Recently the honorable member for Calare (Mr. Thorby) made a good suggestion in regard to the employment of men on farms. The Government should give earnest consideration to that proposal. The ‘ honorable member for Kennedy (Mr. Riordan) has recently, both in a speech and in interjections, advocated that sewerage systems should be provided in suitable country towns. That also is a suggestion which justifies close consideration. I know that certain honorable members who support the Government think that the time is inopportune for the expenditure of money on such undertakings, but now that we can obtain money at reasonable rates of interest, such as that secured a few days ago by the Resident Minister in London (Mr. Bruce), I believe that we should float a loan for the purpose of instituting reproductive public works of the character that I have mentioned. As a member of the Melbourne and Metropolitan Board of Works I am aware that a number of undertakings which that board desires to put in hand have been held in abeyance because of the high interest rates that have prevailed in recent years. Most honorable members of this chamber know the industrial town of Sunshine; but they may not realize that it is still without a sewerage service the lack of which, in my opinion, is a menace to the health of the whole of Melbourne. Probably 50 per cent, of the persons employed in Sunshine reside in various suburbs of Melbourne. If an epidemic of disease were to break out as the result of the inadequate sewerage facilities there would be a very great, risk of some of these people carrying the germs of the disease from Sunshine into other localities. It is estimated that the establishment of a sewerage system for Sunshine under the usual conditions of the Metropolitan Board of Works, including supervision charges, would cost £140,000. It would provide sewerage facilities for 1,173 tenements, and give employment to 500 men for twelve months in reticulation and other subsidiary works. When those works were completed the task of connecting dwelling houses with the system would provide employment for 120 men for another twelve months. Although the return from this undertaking would be a little under 3 per cent., I consider that the indirect benefit that would result from the improved health of the community, would justify the Government in providing money for the work, even free of interest for the first year.

I am in deadly earnest in making these suggestions. I play second fiddle to no man in my desire to find work for the unemployed. I know of men who have been connected with my firm for 40 or 45 years, and many other honest, hardworking men who are greatly depressed at present because they cannot . earn sufficient money to provide for the needs of their families. If a committee, such as I have suggested, were set up, I believe that it would very soon be able to submit concrete proposals to the Government for the wise expenditure of money on necessary public works. I am not a pessimist. Now that we have turned the corner, and can obtain money at a lower rate of interest than in recent years, we should do well to take advantage of it. I referred a little while ago to the recent New South Wales conversion loan. It is not long since New South Wales had to pay 5f per cent, for the money that it required. Such a high rate of interest, deterred many public and semi-public bodies from putting works in liana, but now that we have returned to more normal interest rates, this reluctance to spend money in the directions I have indicated should be overcome. The Melbourne and Metropolitan Board of Works was established in the ‘nineties during a period of depression, and for a number of years it did invaluable work for the community. I believe that it and similar bodies could do a good deal of useful work of the same kind at present.

I hope the Government will seriously consider my proposal for the appointment of a committee representative of the various parties in the House to investigate this whole subject. The unemployed who are suffering so acutely at present should not be the pawns of party politics. I do not blame the Government for the present situation, nor do I blame the Opposition for criticizing the Government. But, in view of the fact that, within a few days, the Prime Minister will be attending a Premiers conference as the representative of the Commonwealth, I sincerely trust that he will take steps to provide money for the assistance of the farmers, and the community generally. I referred a few moments ago to the Northcote brick works. I nowdirect the attention of honorable members to the activities of the Pelaco shirt factory situated in the constituency of the Leader of the Opposition (Mr. Scullin). A representative of that firm advised me a few days ago that, during September, 9,200 dozen shirts had been manufactured at the factory, and that employment had been provided for 800 girls, which is in excess of the number usually employed. “We want to see all our factories at work again. It is not only the primary industries, but also the secondary industries that need stimulation. I sympathize with the honorable members of the Country party. I am not a farmer, but I have securities in the country. I know that many farmers are unable to pay interest on the money they have borrowed. This naturally makes one sympathetic with country interests. I know also, that it probably takes 2 J bags of wheat to pay a debt that one bag of wheat would have satisfied some little time ago. But in spite of all our troubles, I am perfectly sure that if we were to pull together, we could provide work for our unemployed, and so get out of our troubles.

Mr BAKER:
Oxley

.- Australia, in common with other countries in the world, is at present passing through a period of unprecedented industrial de pression. It was little enough to expect, therefore, that a Government, elected largely as the result of its nation-wide assertion that it, and it alone, could solve the unemployment problem, would have made definite proposals in its budget to deal with this subject, and the closely related problem of monetary reform. But an examination of the budget fails to show that there is any unemployment problem whatever in Australia. I propose later to deal at some length with certain aspects of this problem, but first, even at the risk of reiteration, I shall stress one or two outstanding aspects of the Government’s proposals for, the balancing of the budget. Taxation has been remitted, and in order to permit of this, sections of the community least able to bear additional burdens have been called upon to suffer. The reduction in taxation is estimated at £1,200,000. Assuming for a moment that the Government’s estimates of revenue are reliable, it is budgeting for a deficit, including these taxation remissions, of £1,479,000. It will be seen, therefore, that had there been no remissions of taxation, the deficit, even if the revenue figures had not been under-estimated, would he only £279,000. In order to save less than £1,500,000, the Government has decided to take £1,100,000 from that section of the community which is in receipt, of the munificent income of 17s. 6d. per week. The Government may contend that it has now altered its proposal for the reduction of the invalid and old-age pensions, but the fact remains that the Estimates provide for that reduction being made. The maternity allowance has been reduced, and the Government expects, by this means, to save £60,000, while a further saving of £220,000 is contemplated as a result of a further reduction of the salaries of public servants. Obviously the budget has been prepared by the Government in a characteristically casual fashion. In his budget speech the Prime Minister (Mr. Lyons) pointed out that the Government expected to save £240,000 by the reduction of public servants’ salaries, and thus get a surplus for the year of £12,000. But instead of the reduction amounting to £8 per head, it has been applied on the. graduated scale of £8, £5 and £4, the last-mentioned figure having relation to female workers, and the Government will now save by this means £20,000 less than was originally estimated, which means that it is budgeting for a deficit of £8,000. The difference may be small, hut the Government has not yet made any reference to it in its Estimates. The Labour party contends that there is no need for the reduction of the invalid and old-age pensions, and that, but for the remission of nearly £1,250,000 in taxation, the pensions could have been restored to the old level. The Prime Minister has recently admitted that at the earliest opportunity there will be further remissions in taxation. [Quorum formed.’] Apart from the large amount of taxation to be remitted by the Government, the Estimates provide merely for a deficit on paper. The Prime Minister has followed the example set by an ex-Premier of Victoria, who, on receiving from the departments the annual Estimates, added £5,000 here and £10,000 there to the expenditure side in order to show that special economies would be needed to balance the budget, and naturally at the end of the financial year, always had a fine surplus. Some persons regarded him as a great financier, but a large surplus indicates as great a lack of financial ability as does a large deficit. The Minister for Trade and Customs (Mr. Gullett), referring on one occasion to the leader of the Country -party (Dr. Earle Page), said that he was the most tragic treasurer Australia had ever had; but I contend that the present Prime Minister has submitted the most pathetic budget that has ever been placed before this Parliament. The most charitable construction that can be placed upon it. in order not to accuse the Government of deliberately inflicting unnecessary suffering upon the people, is to say that the right honorable gentleman did not exaggerate his own lack of financial capacity when, shortly after leaving the Labour party, he said that he had no knowledge of finance.

Mr Paterson:

– That statement was merely due to his innate modesty.

Mr BAKER:

– Since reading the budget speech I do not think that anybody can regard it as a modest statement.

The revenue for the first three months of this financial year shows a surplus of £2,619,000, when compared with that of the first quarter of last year. I realize that during the first three months of the last financial year, the Labour Government’s economies had not shown their effect ; but the present Government’s economies do not take effect until this month, so that it is reasonable to assume that the estimates of revenue will be exceeded to a still greater extent in the ensuring months. The la3t Government had to make reductions of expenditure. Paced with a deficit of £20,000,000, and in order to bring about a favorable trade balance, it had to reduce imports to such an extent that the customs revenue was reduced by £14,000,000, which accounted for the greater part of the anticipated deficit of £20,000,000. The position today is very different. The last Government’s action in sacrificing customs revenue was successful in producing a substantial trading surplus last financial year. Our exports exceeded in value that of our imports and our interest charges on overseas loans and still left a margin of £8,000,000. During the first two months of the present financial year, the trade balance showed, instead of a surplus of exports to the value £2,500,000, a surplus of imports to a similar amount, so that the country is really £5,000,000 worse off than at this time last year. No doubt, this is Only what may be expected of a freetrade government. At the last election, the ministerial party denied that any of its members were in favour of freetrade, but the results of the Ottawa conference having been placed before us, such a denial would now be useless. Honorable members opposite have deliberately avoided facts, and have asked why the Labour party did not do certain things when it was in power. I point out that Labour, although in office, did not have a majority in another place, and its legislative proposals were usually vetoed in the other branch of the legislature. Only on one occasion since the inception of federation has the Labour party had a majority in both chambers for a long enough period to give partial effect to its policy.

It then brought into existence the Commonwealth Bank, and placed on the statute-book the Australian Notes Act. To-day, our opponents say that sane finance has prevailed because the measures proposed by the Labour party have not been adopted. Had a majority of the Senate been opposed to the Labour Government of that day, and brought about the defeat of the Commonwealth Bank Act, and the Australian Notes Act, the same claim would be made. .The last Labour Government, unfortunately, was in office but not in power. A few weeks after its election to office, it succeeded in passing an amendment of the Commonwealth Bank Act providing that the gold reserves of Australia should be mobilized so that they might be exported overseas for the purpose of discharging our liabilities there. Later, it again endeavoured to amend the act in the direction of providing for the reduction of the 25 per cent, statutory limit of gold to bank notes, so that £5,000,000 of our gold reserves might be exported ; but that measure was defeated, in the other branch of the legislature. A few months later, however, by reason of the stress of economic circumstances, that chamber was forced to agree to a measure designed to reduce the statutory limit so that liabilities amounting to. £5,000,000’ which fell due on the 30th June, 1931, might be met. That bill was considerably modified, and as enacted, provided that the percentage of gold to bank notes must be 15- per cent, for the twelve months ending the 30th June, 1933, not less than 18 per cent, for the twelve months ending the 30th June, 1934, not less than 21$ per cent, for the twelve months ending the 30th June, 1935, and not less than 25 per cent, subsequently. We would have been working on a 15 per cent, basis of gold at the present time, but that recently the present Government was obliged to adopt certain more drastic measures. The Scullin Government introduced the Bank Interest Bill, the purpose of which was to reduce the payments upon fixed deposits in the hanks, and also the interest payable to those institutions upon overdrafts. That measure failed to become law because the Government did not have in both chambers the power to impose its will. It brought forward the Central Reserve Bank Bill and the Fiduciary Notes Bill, which also were defeated in another place.

Mr Stacey:

– Hear, hear !

Mr BAKER:

– The latter was designed to enable £6,000,000 to be distributed among the wheat-farmers, and £12,000,000 to be expended at the rate of £1,000,000 a month in the provision of unemployment relief. It also contained a proviso that, in the event of the Commonwealth Bank advancing credits to the Government, the amount of the fiduciary notes issued should be reduced to that extent. An honorable member opposite said “hear, hear!” when. I mentioned the defeat of this measure. Apparently, he is not aware that in England there is a fiduciary note issue of £260,000,000. At the outbreak of the war, the amount of notes which could be issued in England was less than £20,000,000. It may be information to those honorable members who complain so bitterly of political interference, that at the outset the English Treasury took control of the note issue apart from that particular fiduciary issue of £20,000,000, and issued notes to the extent of several hundred million pounds for the purpose of prosecuting the war, no check being imposed on it by statute. At that’ time there was no talk of inflation nor of fiduciary notes being of no value as currency. For ten years ; after the termination of the- war the English Treasury retained control over the note issue, and issued notes of the denomination of £1 and 10s., the Bank of England ‘being confined to the statutory limit of £20,000,000. As the result of various conferences it was decided that this note issue should be handed over to the Bank of England, and that for that purpose a definite limit must be placed on the amount that could be issued. A limit was fixed in accordance with a recommendation that in no particular year should’ the fiduciary note issue exceed that for the preceding year. For several years the note issue had diminished until, in 1928’, it was handed over to the Bank of England and a limit fixed at £260,000,000, with the proviso that should additional funds be required additional notes could be issued with the consent of the Treasury upon application by the Governor of the Bank. As a matter of fact the issue at the present time exceeds the limit by £15,000,000, one extension having been made only a few days ago. The present Commonwealth Government, notwithstanding the former opposition of its members to financial reform, and their contention that no backing for a note issue other than gold could be entertained, shortly after its election introduced a measure which provided that a proportion of the basis for our note issue ‘might be held in English currency. Had the Labour party advanced such a proposal, it would have been told that action along those lines was impossible.

The Leader of the Opposition (Mr. Scullin), in a carefully reasoned speech, some days ago, suggested constructive methods which the party to which I belong believes would considerably relieve this country of the existing industrial depression. We realize that to a certain extent the depression is international, and that Australia alone cannot do all that is needed to overcome it. We consider, however, that much may be done to alleviate the suffering and to reduce the amount of unemployment that prevail. In reply to the right honorable gentleman, the present PostmasterGeneral (Mr. Parkhill), who was then Minister for the Interior, and who spoke on behalf of the Government, made a typical electioneering speech. He did not attempt to answer logic with logic, but uttered the usual bogies and catch cries with which the last federal elections were won by his party. The Labour party contends that the depression through which we are passing can be remedied only if we plan out exactly what has to be done. On page 5 of the report of the Macmillan Committee, a document that was prepared by thirteen of the leading economists of England under appointment by the Government, the following statement appears : -

The lesson of all this for our present purpose is that in the case of our financial as in the case of our political and social, institutions we may well have reached the stage when an era of conscious and deliberate management must succeed the era of undirected natural evolution. There are. as we shall see, already signs that the necessity for such a change of outlook is coming to be realized. The foundations of our financial system are being re-examined. Dogmas hitherto regarded as canonical are being questioned. The feeling is growing that our former easy-going ways will no longer ensure our prosperity in a crowded and increasingly competitive world. Wo are, indeed, at the parting of the ways and our future depends on whether wo choose the right way. Hence the need for a careful study of the economic map. We must now choose our path deliberately and consciously.

That is what the Labour party is contending - that it is necessary for thisParliament, the highest authority in the land, to formulate a plan to deal with the problems which concern our people. Whenever my party advances a plan, it is met, not with reasoned answers to its contentious, but with the cry, “ Inflation.” So matter what amount of sophistry is indulged in by honorable members opposite, they must admit that there are certain premises upon which every argument concerning unemployment and finance must be conditioned. It cannot be denied that the world is passing through a period of greater plenty than ever before, and that, simultaneously, there is more suffering and unemployment than the world has ever known. [Quorum formed.] Such a stale of affairs offends our sense of reason.

Another premise which cannot, be denied is that the whole of our present financial system arises from the system of barter, which was originated for the sole purpose of exchanging one kind of goods for another. A system of barter was difficult many years ago, and it is infinitely more so to-day, when the world is so much more closely connected economically. If the economics of the prevailing system of finance are such that we cannot provide food for our people, when the world has more food than ever before, it is time that governments set to work to alter that system. There are now some 40,000,000 to 50,000,000 persons unemployed in the world, while in Australia the figures are stated as varying from 400,000 to 500,000. Personally, I believe the latter figure more closely represents the position. When speaking the other night, the Postmaster-General said that he did ‘ not believe that there were anything like 400,000 persons out of work in Australia; that allegedly the figure had remained stationary at that number for a good many months, and that nobody knew the basis upon which the estimate was arrived at. I draw the honorable gentleman’s attention to the fact that, according to the 1921 census, the number of salary and wage earners then in Australia was given as 1,679,992. ft is logical to assume that, since our population has increased considerably in the past, eleven years, the number of salary and wage earners - usually regarded as the working population of the community - has also increased appreciably. If we take the 1921 figure and compare it with the present percentage decrease of employment, as given by the Com mon wealth Statistician - upon which our figures are based, although the PostmasterGeneral does not appear to know it - wo find that in the first year that this Government came into power, 27.4 per cent, of the population of Australia was unemployed, while at. the end of June last the figure had reached 30 per cent. There are no official figures since that date, but I have elicited from a reliable source that the present percentage is 29.6. The reduction of unemployment about which this Government is so highly jubilant amounts therefore to only .4 per cent, for the last three months, while during its period of office unemployment has increased from 27.4 to 29.6 per cent. I believe that the reduction that has occurred recently is largely due to the return of a Labour government in Queensland. During this debate we have heard many remarks concerning Mr. Forgan Smith, the Premier of that State. It is but fair to read extracts from some of the speeches made by that gentleman at the Premiers Conference held last June. But first of all, I desire to compare that conference with a similar gathering held . in April. The Prime Minister admitted at the April conference, and also in his budget speech, that the experts’ report, which was presented to the gathering of Premiers, was practically an ultimatum by the Federal Government to the April Premiers Conference that, before further loan moneys would be released, there must be a reduction of 10 per cent, on the 1928 basic wage figure. That reduction would have brought the basic wage far below the “ Harvester “ wage fixed in 1907, which Mr. Justice Higgins said was designed “ for the normal needs of the average employee regarded as a human being living in a civilized community.” That figure was not fixed upon any definite statistics or as the result of specific inquiry, but merely upon the average wage payable in Melbourne in 1907. As an example of the reactionary practice of this Goverment of always looking backwards, and of learning to go forward by observing what governments did many years ago, it is instructive to notice that it was even willing to jettison the principle of the basic wage - which was first laid down in Australia in 1890 in a Queensland Parliament, and. formulated by Sir Samuel Griffith in an act of that Parliament wherein it was stated -

The natural and proper measure of wages in such a sum as is fair immediate recompense for thu labour for which they are paid, having regard to its character and duration; but it can never bc taken at a less sum than such as is sufficient to maintain the labourer and his family in a state of health and reasonable comfort.

Yet this Parliament has, by its disallowance of determinations of the Public Service Arbitrator, declared that it does not now recognize the principle of a basic living wage. The Government’s endeavour to obtain inspiration from bygone ages is again demonstrated in the pension reduction principle, concerning which the Brisbane Courier, the leading conservative organ in Queensland, said in the course of an article intended to bestow great praise upon the Commonwealth Government - .

In effect the principle upon which the Federal Government proposes to act in regard to pensions is not new to English law. The Tour Belief Act 1601 provided that every person should he bound to provide necessary maintenance for his father and mother.

One reason why the Labour party has always refused invitations to join national non-party governments is that members of the anti-Labour parties always approach industrial problems in the light of what occurred ten, twenty, or one hundred years ago, or, as in the instance I have just quoted, 331 years ago. At any rate, they expect socalled non-party governments to act in accordance with those beliefs. The Labour party, on the other hand, believes that ideas should advance with the times> that outofdate, principles should be discarded, and that the old industrial system must give way to the new. That attitude is not extreme or radical. Even in the middle ages there were men, more far-seeing than their fellows, who recognized that the feudal system would not last indefinitely. Society is always in a state of transition, and it is the duty of members of Parliament to see that every change is for the betterment of the masses of the people. In a world’ of plenty no man should want, and during the present crisis a greater responsibility is cast upon those directing the destinies of the nation than has existed in any previous period of our history. Though the ministerial press may, in chorus, abuse politicians, those who serve in the parliaments of the country have a more, important duty to do today than ever before, and if they are not doing their duty they have no claim to represent the people.’

Mr. Forgan Smith said, at the Premiers Conference -

The policy pursued in Queensland during the last three years, based on the principles em bodied, in the Premiers plan, has not had the desired effect. . . . Despite the exercise of severe economies and the reduction of wages, there has been a definite increase in Our budgetary deficits each year. It should be regarded as a cardinal principle that national budgets cannot be balanced while the budget of the individual is unbalanced because Of wage reductions, rationing, and unemployment.

In support of that contention, he quoted the opinions of well known authorities. For instance, he referred to a speech made by Sir Robert Home on the Finance Bill in the British House of Commons m May last, when he said -

The raising of the sterling prices of goods was vitally important, as it would enable us to realize the budget estimate, lt was going to be a very close thing between the survival and decline of civilization.

Yet some honorable member’s opposite would have us believe that everything is all right, and that we need not worry ! Mr. Forgan Smith also quoted Mr. J. M. Keynes, the famous economist, as having said in an article published in the Sydney Morning Herald, of the 27th June, 1932-

It is a serious mistake for any country, in my judgment, to attempt to. complete adjustments to the price level of wholesale prices, whether measured by gold or sterling. . . Every country in the world has. the same problem as Australia in some shape or form. If each attempted to solve it by competitive wage reductions and competitive currency depreciations, nobody would be better off. There is no. exit along that route. Indeed, the tendency of wage reductions must necessarily be to rivet more securely the existing level of prices, for, in the long run, it is the wage level which mainly determines the price level, especially with countries not rigidly linked with gold.

The Commonwealth Government is flying in the face of opinions expressed by worldfamous economists. Mr. Forgan Smith continued -

The point that I wish to emphasize is thai every effort should be made so to control our internal economy as to raise price levels within Australia, restore confidence to industry, and provide employment for our own people. That is,. I consider, our most urgent duty at the present time.

To the declaration of critics that the Labour Government of Queensland is following the lead of the anti-Labour governments, including’ the most antiLabour Government of South Australia, the answer is that Mr. Forgan Smith’s Ministry is the only one in Australia in the last two years that has submitted a budget that does not propose further reductions of wages and social services.

Reference has been made by the Postmaster-General to the “mystic price levels of 1929.” The economists of the world are almost unanimous in declaring that prices must be restored to the levels of that year. The policy of the Labour party is to increase the power of the Commonwealth Bank with a view to nationalizing all banking. A writer in a weekly journal published on the 23rd April points out that in Australia SO men have control of ?200,000,000 - not their own money, but the savings and investments of the people which they can place or divert as they will. Three combinations control the greater amount of Australian capital. There is the Burns. Philp group closely allied with the Colonial Sugar Refining Company ; the Broken Hill Proprietary Company with its associated companies; and there is also an overseas group. It is interesting to note that the Minister for Commerce (Mr. Stewart) is a director of two companies controlling a capital of almost ?4,000,000.

We are not complaining of that, hut of the fact that these hundreds of millions of pounds of capital are controlled by a few men who have absolute power over the nation.

Mr Hutchin:

– The directors of such companies are responsible to their shareholders.

Mr BAKER:

– I am willing to grant that, but their duty to their shareholders is to provide a maximum of profit regardless of whether that is, or is not, of benefit to the nation as a whole. The directors of Burns, Philp and Company and the Colonial Sugar Refining Company control the Bank of New South Wales as well as several other banks, also the Sydney Bulletin, which publishes numerous articles on finance, and several other newspapers. By controlling the credit of the Commonwealth, these people have a tremendous influence over Australia and its people. As members of boards of numerous banks, insurance, trustee and mortgage companies, they can direct the policy of the country regardless of what the Government says or does. The Government should extend the powers of the Commonwealth Bank so that there will be one banking institution controlling the issue of credit to the nation. We know that the banks have power to create credits. There are two methods, apart from coin clipping which is now out of date, under which there can be inflation. One is by an inflation of the note issue, and the other is by an inflation of credit. The banks have absolute power to decide the amount of credit to be issued. Concerning the word “ inflation which has been used so extensively in recent times, Mr. Arthur Kitson, a well-known British economist states-

This word (inflation) which has been made a shibboleth by the supporters of the dear.scarcemoney policy,, is immediately mentioned the moment any proposal is made for expanding the currency.

Prior to the war, “ inflation “ was only employed to define any attempt to increase the currency supplies beyond the needs of trade and industry, and which, therefore.could only tend to raise the level of commodity prices without increasing the volume of goods. But to-day the term “ intiation “ is wrongfully used to characterize any attempt to expand the currency, even though such expansion is obviously essential, as it is to-day, to save our industries and trade from utter collapse. It would not be too in udi to saythat the world to-day is threatened with ruin owing to the fear which this word inspires! [Leave to continue given.]

We have followed a policy of deflation so long that we must retrace our steps. The term “ inflation “ has become such a political bogy that it is now termed “ reflation “ which is only another name for inflation. It has been said that no nation having once inflated its currency has ever been able to deflate it. Obviously, that is wrong, because, with the exception of . America, practically every civilized nation which fought the war on an inflated currency has since deflated much further than was necessary. Mr. Kitson goes on to say -

The examples of currency inflation experiments of Germany and Russia are usually mentioned to warn the public of the dangers of employing the chief remedy which at present would be effective in restoring prosperity. Those who cite these examples are careful not to mention the real objects of the inflationary policies of those two nations.

When Lenin commissioned his government printing presses to pour out paper roubles in unlimited quantities, his object was to destroy entirely the value of the rouble for the express purpose of ruining private traders; and he succeeded !

Similarly, when the German banks issued billions of paper marks during the 1022-23 period, the Government’s object was to rid Germany of her internal debts! This also proved successful.

It is not inflation to get back to the 1929 price levels, as is suggested to-day by a great majority of leading economists. In this connexion, it is only fair to give credit to the ex-Treasurer (Mr. Theodore) who was the first to put forward the suggestion of adopting the 1929 price levels. He made that suggestion at the Premiers Conference in February, 1931, and his arguments were so logical that the then Treasurer of Queensland, Mr. Barnes, a most conservative man, supported the resolution submitted, but on the conditions that the hanks were agreeable. The proposal, however, did not suit the private interests and the private banks, but had a Labour Government been in control in another branch of the legislature effect would have been given to it, and fully 75 per cent, of the trouble which we have experienced would have been avoided. The. honorable member for Bendigo (Mr. E. E. Harrison) speaking last week gave some interesting information with respect to our unpreparedness for war, but he did not say how a future war could be fought, in view of the fact that it is impossible at present to provide sufficient funds to find work for the unemployed. There is not one honorable member who has the slightest doubt that, if, in the interests of the nation, money was required for the purposes of war, funds would be quickly, made available. We would fight another war as the last was fought, by providing sufficient currency to meet our expenditure and the requirements of trade.

Mr Cameron:

– That is what is responsible for our position to-day.

Mr BAKER:

– No; our present position has been brought about by following a policy of deflation to the extent we have. Had we stopped in 1929 when the price levels had dropped, and we were getting back to normal, we should have avoided many of our present troubles. The Commonwealth Government is not carrying out the policy decided upon at the last Premiers Conference, which was first to provide for unemployment, and then to balance the budget. At present it is trying to balance the budget first, whereas the first essential in any constructive move for rehabilitation is to get our people back to work. This is what the Premier of Queensland is trying to do. If that is done, there will be very little difficulty in balancing the budget. Unlike the April conference there was no suggestion at the June-July conference that a 10 per cent, reduction should be sought in the value of real wages. On the other hand, it was discovered, after consultation, that such a reduction would be unnecessary if the banks would find £7,000,000 to provide employment. If the banks. had done that when the Labour party was in power, there would have been no need to issue that amount of fiduciary notes. But when the Labour Government suggested such a thing, it was said to he impossible.

The Labour party’s attitude is that the Commonwealth Government, which is the most powerful legislative instrument in the Commonwealth, should obtain credits through the private banks, but that the objective should be the nationalization of the banking system of Australia. It feels that the banking power is too great to remain in the hands of private institutions. It would be just as logical to assume that private banking companies would act disinterestedly in the interests of the whole community as it would be to assume the Inchcape shipping line would take our produce overseas at a cheaper rate than that normally charged, or that the pastoralists and wool-growers would agree to sell their meat and wool at lower than the ruling prices, simply from a sense of public duty. The fact is, of course, that private commercial institutions owe a duty to their shareholders. We believe that the interests of the nation should be paramount. In the book The Crisis of Australian Finance 1929-1931, edited by Professors Shann and Copland, certain comment is made on the award of the Commonwealth Arbitration Court in June, 1930. It is mentioned that Mr. R. P. Irvine, for many years professor of economics at the Sydney University, stated in his argument -

That it is practically a question of life and death to stop deflation and initiate a movement in the other direction, that is, to retrace our steps by way of a carefully guarded intiation. Such a policy is forced upon us by the facts.

The court subsequently stated in its findings that -

There was almost unanimity in the opinions of the witnesses that in some form banking policy should be changed and that there should be a limited note issue.

Professor Copland, Mr. P. F. A. Russell, K.C., one time lecturer in economics at Sydney University, Mr. Portus, of the Sydney University, Mr. Dyason and many others are in agreement - that if the risks of indiscriminate inflation can be avoided the position can be substantially assisted by a change in banking policy for the purpose of facilitating some stabilization of price levels.

Mr Hutchin:

– The honorable member for Hindmarsh (Mr. Makin) said that the opinions of those gentlemen were not worth having.

Mr BAKER:

– That is not so. He said that Professor Copland was one of the most conservative economists in Australia. That being so, his statement that there must be some kind of inflation is surely proof positive that it is badly needed. Iti all the circumstances it must be abundantly clear that in the interests of the nation as a whole, it is necessary that the Government should take some drastic steps to alter the financial policy of the country to ensure that it shall be of greater service to the community than it has been in the past.

Progress reported.

House adjourned at 10.56 p.m.

page 1357

ANSWERS TO QUESTIONS

The following answers to questions ware circulated: -

Deportations.

Mr.Rosevear asked the Minister for the Interior, upon notice -

How many persons of the 34 who have been deported during the present Government’s term of office, because of criminal offences or criminal records, have been so deported because of their communist or other political activities ?

Wire Netting

Mr Prowse:

e asked the Minister for Commerce, upon notice -

Has his attention been drawn to the unprecedented ravages by rabbits in various parts of Australia; if so, will he take steps to make available wire netting at a cost commensurate with the limited means’ of the man on the land?

Mr Stewart:
UAP

– I am aware of the depredations caused by rabbits, and will have inquiries made regarding the prospects of wire netting being made available to the man on the land more advantageously than under the existing Wire and Wire Netting Act.

Fiji Bananas

Mr Holloway:

y asked the Minister for Industry, upon notice -

Will he inform the House whether the work associated with the growing and exportation of Fiji bananas is still carried out by indenturedand/or contract labour?

Mr Latham:
Attorney-General · KOOYONG, VICTORIA · UAP

– From the information immediately available, it appears that indentured or contract labour in Fiji entirely ceased some years ago.

Exports of Meat - Value of Preferences

Mr Price:
BOOTHBY, SOUTH AUSTRALIA

e asked the Minister for Trade and Customs, upon notice -

  1. What was the quantity and value of exports to the United Kingdom for our “peak” year, and the years 1931 and 1932, of (a) frozen mutton; (b) frozen lamb; (c) frozen beef; (d) chilled beef; and (e) pig meat?
  2. What is the preference on each of these items agreed upon at Ottawa?
  3. Is the Minister in a position to give an estimate of the value of preferences to Australia of theabovementioned items?
Mr Guy:
Assistant Minister for Trade and Customs · BASS, TASMANIA · UAP

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

  1. Exports of meats, preserved by cold process, to the United Kingdom -

The figures quoted for the year 1931-32 are advance, and subject to revision.

  1. The United Kingdom delegation to the Ottawa Conference did not make any agreement with the dominions’ delegations for the granting of tariff preferences on meat. An arrangement was made for the regulation of imports Of foreign meat supplies into the United Kingdom. Full details of the final settlement made are set out on page 12 of the Minister’s speech and in Schedule H of the Trade Agreement between the United Kingdom and Australia, copies of which have been supplied to honorable members.
  2. It is not possible to assess the value of the benefits which will accrue to our meat producers as a result of the arrangement made with the United Kingdom delegation. The object in seeking these quantitative restrictions was to bring about as speedily as possible an increased price level for all meat supplied to the United Kingdom market and place our export trade on a profitable basis. The arrangement will, moreover, provide an assured market for Australian meat.

Exchangerate

Mr Price:

e asked the Treasurer, upon notice -

  1. What is thepresent rate of exchange between Australia and London for telegraphic transfersin(a) buying premiums and (b) selling premiums?
  2. What was the rate of exchange for corresponding dates for each of the years 1928 to 1932 inclusive?
Mr Lyons:
UAP

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

  1. The present rate of exchange Australia on London for telegraphic transfer is -

    1. Buying, £25 per cent. premium.
    2. Selling, £25 10s. per cent. premium.

Control of Oil Prices

Mr Lyons:
UAP

s. - On the 29th September, the honorable member for Boothby (Mr. Price) asked me the following questions upon notice: -

  1. Is there a pact, called the “White Products Policy “, between the major oil companies, which precludes price competition amongst themselves ? 2.Does the control, if any, by tacit agreement also virtually preclude the sale in Australia of cheaper gasolines?
  2. Are agreed prices, if any, still based on American gold standard costs, including freights ?
  3. Is the pact impregnated by redundant capital expenditures and “tied” equipment agreements, and price penalties for stocking brands other than those of pact signatories?
  4. Does the Australian Industries Preservation Act need tightening to safeguard local enterprise against dumping and restraint of trade ?
  5. Does Commonwealth Oil Refineries Limited subscribe to the price penalty clauses of the pact?
  6. Does Commonwealth Oil Refineries Limited, as a semi-government instrumentality, receive any preference in government business ?
  7. Is Commonwealth Oil Refineries Limited being used as a “stalking horse”?

The Commonwealth Oil Refineries Limited has furnished the following replies in regard to questions 1 to 6 : -

  1. So far as this company is concerned, it subscribes to no pact which precludescompetition in prices between it and its com petitors. This company has, on more than one occasion, marketed its products at prices lower than those of the other major oil companies, with the result in each instance that the othershave reduced their prices to the same level as those of this company.
  2. We know of no arrangement for price control which in any way precludes the sale in Australia of cheaper gasolines.
  3. This company’s supplies are paid for in sterling, and its prices are based on the cost of such supplies.
  4. This company is in no way handicapped by redundant capital expenditure. As the kerbside pumps which it installs at garages are itsown property, it naturally stipulates that only its own brands of petrol shall be sold through them.
  5. This company, whose refinery at Laverton constitutes a local enterprise, does not consider than any further steps are at present necessary to safeguard it against dumping or restraint of trade. ‘Should it in the future consider any such steps desirable, it will make suitable representations to the Commonwealth Government.
  6. As the terms and conditions of selling prices vary, not only from State to State, but also in some cases in different areas of the same State, it is not understood to which particular clause reference is made. In general, however, it is the policy of this company not to bind itself to the enforcement of any penalty clauses.

The answers to questions 7 and 8 are as follow: -

  1. No general policy of preference has been laid down, but it is understood that the Commonwealth Stores Supply and Tender Board deals with the tenders on their merits.
  2. It is not considered that such is the case.

Invalid and Old-age Pensions.

Mr Lyons:
UAP

– On the 14th October, the honorable member for Melbourne Ports (Mr. Holloway) asked me a question, without notice, regarding amounts provided by sons and daughters of invalid and old-age pensioners for keeping the homes of their parents in repair. As promised, I have looked into the representations of the honorable member. The position is that payments of the nature indicated by him will not in themselves disentitle a person to receive a pension of 15s, per week. Payments by children to pensioners by way of gift or allowance must, however, be taken into account in determining whether a pensioner is entitled to a pension in excess of 15s. per week. The intention of the law is to permit a pensioner to receive a pension in excess of 15s. per week where his income and pension do not exceed 17s. 6d. per week and he is entirely dependent upon such income and pension. The act specifically provides that, in calculating the pension in excess of 15s. per week, the payments by children by way of gift or allowance shall be deemed to be income.

AircraftandAircraftParts.

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

s. - On the 14th October, the honorable member for Balaclava (Mr. White) askedme the following questions, upon notice: -

  1. What is the value of aircraft and aircraft parts supplied to the Defence Department for the years ended 30th June, 1931, and 30th June, 1932?
  2. What amount in that period was spent on parts -

    1. im por ted from overseas ;
    2. supplied by government establishments; and
    3. purchased by tender from Australian manufactures?

I am now in a position to inform the honorable member as follows : -

  1. The value of aircraft and aircraft parts supplied to theRoyal Australian Air Force for the years ended the 30th June, 1931, and 30th June, 1932, was approximately £47,240 and £12,300 respectively, totalling £59,540. No aircraft was purchased for the Civil Aviation Branch during the periods referred to. The value of aircraft parts supplied to the Civil Aviation Branch during the years ended the 30th June, 1931, and 30th June, 1932, was £178and £108 respectively.
  2. The amounts spent by the Royal Australian Air Force were as follow: - (a)Imported from overseas - 1930-31 - £25,880, approximately. The majority of this sum was financed from 1929-30 votes, but deliveries were not made until 1930-31. It includes the supply of seven Wapiti airframes complete. 193 1-32-£3,850, approximately,

    1. Supplied by Government Departments - 1930- 31- £6,250, approximately. 1931-32- £7.640, approximately. These amounts include £6,501, 1930-31, and £5,200, 1931-32, for the reconditioning of Seagulls and Seagull components by the Cockatoo Island Dockyard.
    2. Purchases by tender (including period contracts) from Australian manufacturers - 1930- 31 - £15,110, approximately. This includes approximately £14,490 for the supply of 31 Moth airframes, plus extras, under contract by the LarkinAircraft Company. 1931- 32 - £810, approximately.

All aircraft parts obtained for the Civil Aviation Branch were purchased from local firms, and it is not possible to state the country of manufacture of such equipment.

Cite as: Australia, House of Representatives, Debates, 18 October 1932, viewed 22 October 2017, <http://historichansard.net/hofreps/1932/19321018_reps_13_136/>.