House of Representatives
23 November 1938

15^th Parliament · 1^st Session

QUESTION
- JEWISH REFUGEES
QUESTION
- TELEPHONE ACCOUNTS
MUNICH PACT
QUESTION
- TRADE COMMISSIONERS IN INDIA AND CEYLON
QUESTION
- POSTAL LINEMEN
PRINTING COMMITTEE
QUESTION
- LONDON FUNDS
QUESTION
- RECRUITING CAMPAIGN
QUESTION
- INTERNATIONAL LABOUR CONFERENCE
THE LATE LORD STANLEY
UNEMPLOYMENT
- Formal Motion for Adjournment
INCOME TAX ASSESSMENT BILL 1938
- Second Reading
BUDGET 1938-39
- In Committee of Supply:
- Thursday, 24 November
A WAR-SCARE SCANDAL
WHEAT INDUSTRY ASSISTANCE BILL 1938
- Second Reading
MINISTERS OF STATE BILL 1938
FLOUR TAX AND WHEAT TAX
- In Committee of Ways and Means:
- Ordered -
FLOUR TAX BILL 1938
FLOUR TAX (STOCKS) BILL 1938
FLOUR TAX (IMPORTS AND EXPORTS) BILL 1938
WHEAT TAX BILL 1938
- Second Reading
BILLS RETURNED FROM SENATE
QUESTION
- BUDGET 1938-39
ADJOURNMENT
- New Guinea: Administrative Capital Site: Proposedroad: Oil Advisory Committee
- Total, £443,000
PAPER
ANSWERS TO QUESTIONS
- Civil Aviation Department: Transfer to Canberra
- Shipbuilding Industry
- Transcontinental Railway: Carriage of Goods
- New Guinea: Judicial System - Defence
- Papua and New Guinea: Australian Assistance for Products
- National Insurance: Distributionof Information - Staff
- Defence: Standardization of Railway Gauges

Mr. Speaker (Hon. G. J. Bell) took the chair at 2.30 p.m., and read prayers.

page 1911

QUESTION

JEWISH REFUGEES

Mr FORDE:
CAPRICORNIA, QUEENSLAND

– Is the Prime Minister yet in a position to make a pronouncement in connexion with the statement made by the British Prime Minister in the House of Commons recently in relation to Jewish refugees!

Mr LYONS:
Prime Minister · WILMOT, TASMANIA · UAP

– No. The matter is awaiting Cabinet consideration. So far, very little attention has been devoted to it, as more pressing subjects have required attention. I hope, however, that a statement will be made on this subject at an early date.

page 1911

QUESTION

TELEPHONE ACCOUNTS

Mr McCALL:
MARTIN, NEW SOUTH WALES

– Yesterday, the PostmasterGeneral, in answering a question that I asked him relative to an overcharge in a telephone account, said -

The case referred to by the honorable member related to a telephone account for the half-year ended June, 1037, and the overregistration occurred during the month of March, 1937. It waa detected during the regular departmental checks instituted at the time. ls the honorable gentleman able to inform me whether the failure was due to the mechanical register or to the human element?

Mr ARCHIE CAMERON:
Postmaster-General · BARKER, SOUTH AUSTRALIA · CP

– I suggest that the honorable member meet me in Sydney next Monday morning. I shall have the responsible officer present and we can thrash the whole matter out in front of him.

page 1912

Mr LYONS:
UAP

– Unfortunately, because of the pressure of other matters, we have not yet been able to consider that suggestion.

page 1913

THE LATE LORD STANLEY

Mr. SPEAKER (Hon. G. J. Bell).I have to inform the House that I have received from Lady Stanley a letter thanking the House for its resolution of sympathy in connexion with the death of her husband, the Right Honorable Lord Stanley.

page 1913

UNEMPLOYMENT

Formal Motion for Adjournment

Mr. SPEAKER (Hon. G. J. Bell).I have received from the Acting Leader of the Opposition (Mr. Forde) an intimation that he desires to move the adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely, “ Unemployment “.

Five honorable members having risen in support of the motion,

Mr FORDE:
Capricornia

.In moving -

That the House do now adjourn,

I desire to direct attention to a definite matter of urgent public importance, namely, “ Unemployment “, and to stress the unhappy condition of many thousands of our workless people throughout Australia. It is a serious commentary on the so-called prosperity of the country that, during a time when there is a superabundance of products from farm and factory, there should be approximately 160,000 people out of work. There can be no contentment Or happinessin the minds of those people, nor can their wives and children look forward with any pleasure to the approach of Christmas. I believe that practically all honorable members of this House, irrespective of party political ties, have the deepest sympathy with these unfortunate persons at this time, but we must put that sympathy into a practical form. That is why I approach this matter without consideration of party, so that we may get something done for the thousandswho are workless and penniless. Many of these people have been on sustenance work for the last six or seven years. Among their number are many youths who have never known any other kind of employment, although it is now eight years since the first onset of the depression. As a matter of fact, many young men in Australia have passed from school through adolescence to manhood, and have assumed the responsibilities of married life, without ever having been in permanent employment. I submit that, after eight years of good seasons and comparatively good prices, the workers should be much better off than they are to-day.

There are several contributing factors that tend to intensify the unemployment problem. Many big retail shops, financial institutions, commercial houses, and manufacturing concerns cheapen the cost of labour by sacking boys as soon as they approach the age at which the award prescribes for them adult wages. They are dismissed, and advertisements are inserted in the newspapers for boys from 15 to 16 years of age to take their places.

Another contributing factor is the mechanization of industry. Time will not permit me to go into all the phases of this, but it is taking place in practically every branch of industry. One instance will suffice to make my point. According to the Year Book, in 1921, 20,933 men were employed in the coal mines, and produced 10,790,000 tons of coal. In 1937, the number of workers had declined to 14,900, but, due to the installation of mechanical appliances, they were able to produce as much coal as had been produced in 1921 by 6,000 more workers. What applies for the coal-mining industry applies equally to other branches of industry.

From experience I imagine that I shall be confronted with statistics by the Prime Minister (Mr. Lyons) or the spokesman of the Government. I submit in all seriousness that it is useless to try to brush aside this important question by citing statistics to show that there has been some improvement, comparing the depths of the depression with to-day. No one denies that fact, but statistics will not provide food, clothing and shelter for those who are out of work. Figures contained in the Commonwealth Statistician’s reports, showing a decrease of the number of unemployed when comparing 1932 with 1938, will not reduce the suffering and privation of those who for years have had no permanent work; nor will they bring hope or inspiration to our Australian youths who have never had an opportunity to enter permanent employment. It has been held by the Commonwealth Government that all of this is a responsibility of the States. Nevertheless, the Commonwealth has at times changed its attitude and I agree with at least one statement made by the Prime Minister on this subject when he said that the Commonwealth must take a larger share of the responsibility.

Mr Lazzarini:

– That was said at election time.

Mr FORDE:

– Yes. It has been said that money expended on defence provides employment. To a certain degree that is true but it does not adequately meet the situation. If we examine the proposed expenditure on defence works, we shall find that the vulnerability of certain points in Australia was rightly taken into consideration in the allocation of defence works. No consideration was given to the spreading of the work on a population basis. It is only reasonable to expect that that should be so. It accounts for the announcement by the Minister for Works (Mr. Thorby V that £1.000,000 must be expended in the Northern Territory as against, say, £76,000 in South Australia, and so on. It is not necessary for me to pursue that further than to say that the subject cannot be dismissed with a wave of the hand and a statement, “Look at what we are expending on defence “. It must be remembered that much of the expenditure on defence is not of an employment-giving nature. It is to be expended with due regard to the vulnerability of certain outposts of Australia. Many country areas have large numbers of unemployed and they will not benefit directly one iota from the employment point of view from the defence project. I sincerely ask the Government, in view of all these factors, and on a non-party basis, to make available to the States and/or by direct Commonwealth works sufficient money to give employment for a month immediately to every unemployed worker in Australia and then to tackle the problem of absorbing many thousands of our unemployed on great national reproductive works that will give employment of a permanent nature. I strongly urge the Commonwealth Government to tackle this problem in a comprehensive way by convening a special meeting of the Premiers of the States. The Commonwealth should invite them to consider a long-range plan formulated and laid down by the Commonwealth and the States to provide for closer settlement, water conservation, irrigation, construction of roads and the provision of water, sewerage and electric light for country towns. All of these are within the scope of definite promises already made by the Commonwealth Government ; but the Government seems to be powerless to carry out any of those promises.

We cannot overlook the fact that, as was said by the honorable member for Deakin (Mr. Hutchinson) last night, there is some justification for the statement that a recession or small depression is already noticeable in Australia. One has only to mingle with the people of the capital cities and the larger country towns to know that marly retail houses are dispensing with hands. Once dismissal of employees starts, it becomes a disease in industry, resulting in a kind of industrial paralysis. Dismissals in one branch of industry cause a dislocation in other industries. The Government should not allow this Parliament to go into recess without grappling with the problem. Unemployment, with its consequential effects on moral, defence, and physical aspects of life, 1 submit, has not been given that consideration by the Commonwealth Government to which it is entitled.

The Commonwealth Government cannot justify its hesitation in this matter by making a survey of the Commonwealth statistics of unemployment. The returns for the March quarter show 8 per cent, of employees in the registered trade unions to have been unemployed. In September the figure was 9.2 per cent. A comparison of those percentages with the unemployment figures furnished by the Commonwealth census in June, 1933, shows that there are to-day more than 160,000 people out of work in Australia who are fit to undertake work of a reasonable nature. The census returns showed that there were approximately four times as many persons out of work as were shown in the returns from, the trade unions. We must take into consideration the increase of population and the fact that more children are leaving school every year and filling the vacancies that occur in industry. If we add to the number of unemployed the number of people on part-time work, relief work, and sustenance we realize that it would not be an over-estimate to say that there are about 200,000 people in Australia to-day who are still without full-time employment. It would be reasonable to say, I think, that throughout Australia there are 40,000 persons who, because of illness and infirmity, would not be able to undertake hard manual employment, but approximately 160,000 would be able to take any jobs that were offered to them. From reports in the press in New South Wales we find that 45,000 persons are drawing food relief. With their dependants that means that more than 100,000 people are suffering misery and want in New South Wales alone. Although conditions are better in Western Australia I find that the Daily News, Perth, of 9th July,- 193S, said -

Paying a visit to the depot of the Fremantle Benevolent Committee yesterday. I found nearly 100 women, many with infants 1l their arms, and others with bright-eyed babies at their sides, waiting in a queue to ask for help.

– Practically the whole of the money is being expended inside the country.

The figures which I have just cited have no relation whatever to expenditure outside of the Commonwealth. For New South Wales alone an expenditure of over £2,405,000 is provided, £1,531,000 of which will be expended in and around Sydney.

Mr Martens:

– What about Queensland?

Mr THORBY:

– The honorable member for Herbert (Mr. Martens) refers to his own particular State. An expenditure of approximately £600,000 has been provided for Queensland, which on a population basis, is a very substantial vote. Over £1,000,000 is being expended on new works in the Northern Territory, and a very large proportion of the men engaged on those works are draw n from Queensland. When they examine these figures honorable members should at least be fair and realize that no matter where the money is being expended it is absorbing labour in the Commonwealth. I repeat again the figures which I cited the other day in relation to expenditure on new works this year in the various States. They are as follows: -

The figures for Tasmania were inadvertently omitted the other day -

In addition general expenditure, not allocated among the various States is to amount to nearly £350,000. The point I wish to emphasize is that it is definitely wrong to view this matter only from the aspect of what is expended in the various States, and to suggest that it is not being expended on an Australian basis. Take, for instance, the money being expended on the provision of a water supply for Darwin. Almost the whole of the material going up to Darwin is being drawn from Brisbane, and the contractor who is carrying out the construction of the pipe line system is manufacturing the whole of the pipes in Brisbane. Therefore, it will be seen that a very large portion of the expenditure of £1,007,000 in the Northern Territory is filtering back into Queensland, New South Wales and even Western Australia.

Mr Mahoney:

– How much is filtering back into Tasmania?

Mr THORBY:

– A fairly substantial portion. A considerable quantity of the timber and several other materials for use on defence works is being drawn from that State for utilization. It is impossible to lay down a system whereby money for public works could be equally distributed so that every State would get the exact proportion to which it might be entitled on a population basis.

The Commonwealth Government is co-operating with the State governments in every way in order to provide the maximum amount of relief work that can be financed out of every pound expended. Additional loan funds have also been allocated for this purpose. The Commonwealth Government is working in the closest cooperation with the works departments in the various States. In preparation for the building construction works set out in the schedule in this years Estimates, I have set out on a survey to ascertain how many jobs can be commenced immediately that would provide employment for unskilled labour. All unskilled work is now being scheduled and steps are being taken to see that every available man is given an opportunity to secure some of that work in one part of the Commonwealth or another. We have had the closest co-operation of the State authorities.I am pleased to be able to say that each State government has given a definite undertaking that it will co-operate with the Commonwealth Government in the carrying out of these works. The State governments have offered to the Commonwealth the services of the officers of their works departments to expedite the preparation of plans and to supervise works undertaken in their respective States.

Mr Frost:

– Have you accepted that offer?

Mr THORBY:

– Yes, including the offer made by the Tasmanian Government. The Minister for Works in Tasmania offered the same facilities as were offered by the other States. By this means work will be expedited, and it may be found possible to expend a greater amount of money on departmental works in the various States, thereby providing employment for a greater number of men at an earlier date than would otherwise be possible. If honorable members consider the new works set out in the schedule to the Works Estimates they will find that they cover practically every trade and occupation, in which men are employed in the Commonwealth. A very large portion of these works is in respect of buildings of one type or another, which will contain a very large quantity of machinery and equipment, a considerable portion of which is being produced inside Australia. As I have said before, no class of work spreads employment more evenly over the whole community than that afforded by the building trade. Honorable members will see that the Government is doing everything possible to provide all the money it can for the relief of unemployment. Honorable members must realize that seasonal conditions have always aggravated the unemployment position. Although sometimes seasonal conditions result in the provision of employment, unfortunately, in several States, they have thrown thousands of men out of their regular occupation this year.

Mr Clark:

– And the Government is doing nothing for them.

Mr THORBY:

– That is not so. Everything possible is being done to keep men in employment and to find work for men who are unemployed. Legislation to be submitted to the House in the near future will provide for the distribution of funds which will make work possible for men indirectly through private sources. The Government is adhering to its policy to have as much defence work as is possible done in Australia, and to have as much local raw material used as is practicable. The policy of the Government has undoubtedly been responsible for the establishment of several entirely new industries in this country, and so has made possible the permanent employment of many men at high rates of pay. No better illustrations of this fact can be obtained, perhaps, than certain industries related to defence projects. I mention specifically the aircraft factory at Fishermen’s Bend. The Defence Department is concentrating upon the placing of orders locally. In several cases this has been instrumental in the establishment of new factories which are to-day absorbing many men. This is the only sound policy that ran be implemented, and it is having the effect of reducing to the minimum the number of unemployed persons in the community. No member of the present Government has ever suggested that unemployment can be absolutely abolished. It is, therefore, partly the responsibility of the State governments and partly the responsibility of the Commonwealth Government to do all that is possible to reduce the incidence of unemployment. But surely it is also everybody’s responsibility, irrespective of party considerations, tq do everything possible to stimulate industry. Nothing is more likely to improve our circumstances in this respect than the establishment of industries which will not only use the raw materials available in this country, but will also draw men back into industries that have, perhaps, been languishing. The Government has increased its expenditure in respect of every department this year, and most of the public works upon which large sums of money will be expended, will require raw materials of Australian origin, or manufactured goods produced in this country. The honorable member for Hunter (Mr. James) made reference by interjection to unemployment in the coal-mining districts. That situation has been brought about partly by circumstances over which governments have no control. We are all well aware that the replacement of coal by oil for fuel has greatly increased the use of oil in Australia, and correspondingly diminished the use of coal. No doubt this has caused a loss of regular employment to many men; but it has not prevented them from seeking employment in other, if less appropriate, avenues. But even on the coal-fields it may be truly said that some of those who have been loudest, in their condemnation of governments, have failed to play their part in seeking to meet the new conditions which now face us. Unfortunately certain individuals have endeavoured to draw men out of even the available employment on the coal-fields. Such individuals are, to a degree, blameworthy for the burdens which have to be carried in those areas.

Mr SPEAKER:

– The honorable member’s time has expired.

Motion (by Mr. Gardner) put -

That the question be now put.

The House divided. (Mr. Speaker - Hon. G. J. Bell.)

AYES: 36

NOES: 26

Majority . . . . 10

AYES

NOES

Question so resolved in the affirmative.

Original question put -

That the House do now adjourn.

The House divided. (Mr. Speaker - Hon. G. J. Bell.)

AYES: 26

NOES: 37

Majority . . 11

AYES

NOES

Question so resolved in the negative.

page 1920

INCOME TAX ASSESSMENT BILL 1938

Second Reading

Debate resumed from the 10th November (vide page 1447), on motion by Mr. Casey -

That the bill be now read a second time.

Mr FORDE:
Capricornia

.-I understand that the Commonwealth Commissioner for Taxation is desirous of having this bill passed as quickly as possible so that assessments may be sent out, and that the Treasurer (Mr. Casey) wishes the bill to be put through this afternoon. However, I can give him no undertaking that it will be put through this afternoon, or even to-night. Probably a number of honorable members desire to speak on it. The amendments proposed are not of a controversial nature, they are mostly technical, and can better be dealt with in committee. Therefore, I do not propose to speak on the bill at any length.

I understand that, as the result of a report of the Royal Commission on Taxation, the Commonwealth and State Governments agreed to pass certain amending legislation adopting, as far as possible, a uniform income tax assessment law. This was eventually accomplished after considerable delay, and much negotiation. With a view to achieving uniformity in the taxation laws of the Commonwealth and the States, it was agreed between the various governments that no amendments would be made to income tax assessment acts without prior consultation. This led to the holding of what are now known as the biennial conferences of taxation commissioners, who try to arrive at uniform conclusions regarding amendments to ‘be submitted to their respective governments. This amending bill, I take it, is the result of the last of those biennial conferences, and I understand that it meets with the approval of the Commonwealth and State Commissioners for Taxation. We have been informed that such amendments as are relevant to the State ‘ acts will be introduced in similar amending bills in the various State parliaments. As the measure is purely a machineryone, and is non-controversial, I do not intend to hold it up.

Mr LAZZARINI:
Werriwa

.- When the Treasurer (Mr. Casey) was making his second-reading speech on thisbill, I asked him what would be the effect of the measure on the revenues of the Commonwealth. I should like to know whether it means that the return from income tax will be reduced, and if so, -by what amount.

Mr NAIRN:
Perth

.- I support the bill. In one respect, however, it needs amendment, namely, in regard to the date upon which it comes into operation. This applies particularly -to clause 5, which deals . with exempt income. At present, if a company receives exempt income, it is entitled to, and does; in practice, declare a dividend on the whole of the income received. The purpose of the bill is to give the company exemption only in respect of the net income, and to prevent it from distributing the whole of the income received from abroad, irrespective of the cost of earning the income. If the bill is passed in its present form, it will have an adverse effect on those companies which have already made a distribution of this class of income for the current year. We must remember that nearly five months of this financial year have already elapsed, and companies are liable to lose, not only the partial exemp- tion to which they would be entitled,- but also the benefit of any exemption.’ I am sure that that was not intended by the Government.

Take, for example, a company which has financed a gold concern in New Guinea, and has shares on which it receives .dividends of £10,000 this year. The outgoing may amount to £5,000 a year. The company has already made a distribution. There was no purpose in bringing the amount into account at the end of the financial year. Those exempt moneys must not be confused with the ordinary moneys of the company. If it mixes its exempt funds with its ordinary funds it will lose the exemption altogether. Under the existing law, a company which distributes the whole of the moneys received from abroad would pay part out of exempt income, and part out of its ordinary funds. A dividend would not, therefore, be paid wholly out of exempt income. In the circumstances, a company would, on the wording of section 44 of the original act, lose altogether its right to exemption. The purpose of this amendment is to ensure that the company shall receive exemption only in respect of the net income, in this instance £5,000, but the company should be guaranteed exemption in respect of that amount. Therefore, I propose to move an amendment standing in my name which will have this effect.

Mr CASEY:
Treasurer · Corio · UAP

– in reply - I have to inform the honorable member for Werriwa (Mr. Lazzarini) that the officers of the Treasury have not been able to make a close estimate regarding the effect of this measure on the revenue, other than to say that they do not believe that, on balance, there will be any appreciable gain or loss. Any losses or gains will be’ too small to be calculable, and will probably cancel each other out.

The honorable member for Perth (Mr.. Nairn) was good enough to approach me in my office regarding the matter he has raised. It is a material point, and I agree with him that the situation should be corrected. Therefore, when he moves his amendment I shall accept it on behalf of the Government.

Question resolved in the affirmative.

Bill read a second time.

– Why the secrecy?

Mr BERNARD CORSER:

– There is no need for secrecy when right is done. There is not the slightest doubt that the Premier of Queensland obtained certain information in regard to the income of a private person, which is supposed to be disclosed in confidence to the Commissioner of Taxation. This information was ventilated in the State Parliament. If such information can be obtained, by whatever means it is obtained, by the Premier of the State, and used in Parliament to the detriment of a political opponent, as was the case, the honorable member for Darling Downs is entitled to express the hope that there will be nothing in our legislation which would allow a Prime Minister, if we had one who would do so, to ventilate such matters, under the cloak of privilege, in the press.

Clause agreed to.

Clause 3 agreed to.

Clause 4 (Ex-Australian profits).

Mr CLARK:
Darling

.- The Commonwealth has been fleeced of taxes by many overseas pastoral companies which have investments in Australia. They sell their wool overseas and leave the revenue there. The profits that they make are not fully disclosed. Every precaution should be takenby the Commonwealth Government to ensure that such companies are not permitted to default in the payment of their due taxes to the Commonwealth.

Mr CASEY:
Treasurer · Corio · UAP

– I should be surprised if individuals or companies were able to “ get away” with the practice which the honorable member for Darling (Mr. Clark) alleges that they follow. Non-disclosure of profits and non-return of profits attract substantial penalties. The Commissioner of Taxation, with his staff throughout Australia, is almost a complete, if not complete, safeguard against that sort of thing. It can be taken, I think, that no reputable company, if it is put at its lowest level, would be likely to risk the penalties involved. If the honorable member has any suspicion that any particular company is following the course which he suggests, I should be glad to have information so that it may be thoroughly investigated.

Mr Ward:

– That is an old “ squareoff.”

Mr CASEY:

– It is true. The effect of this clause is to correct a drafting error in the original act, under which the Commissioner is able to determine in cases where a company carries on business in Australia and in other countries what part of the income of that company is derived in Australia. He is not able to say that the whole of it is derived in Australia; but this amendment gives him power, when ho establishes it to be a fact, to say that the whole of the profits of the company are derived in Australia. Probably there is some evasion of taxation in Australia, but it is a constant effort by the Commissioner of Taxation to discover cases of evasion, and, by amendments of the law such as this, to prevent opportunities for evasion. I give an open invitation to honorable members to make suggestions for improvements.

Clause agreed to.

Clause 5 agreed to.

Clause 6 (Deductions in case of composite incomes).

Mr FADDEN:
Darling Downs

– This is a very important clause. I agree with the principle at which the Treasurer (Mr. Casey) aims, but I strongly object to the suggestion, even though it has been made by implication, that the amendment is prompted by a regard for the interests of the taxpayers. This solicitude for the taxpayers is more fiction than reality, because it is well known that the Commissioner of Taxation lost, before the Board of Review, a case in which he sought to levy a tax of £26 19s. I could quote an extract taken from the Australian Accountant of October, 1938, page 183, which recites the case in which the Commissioner failed. The Commissioner set out, by his method of assessing the tax, to obtain £26 19s. from the taxpayer, but the taxpayer claimed that the assessment should be on thebasis which would not require the payment of tax. The Board of Review upheld his claim. In view of these facts, it is an unescapable conclusion that the case prompted this amendment. The amendment will clarify the position and I therefore agree with it, but I do not accept the suggestion that the amendment is due to solicitude for the taxpayer.

Mr CASEY:
Treasurer · Corio · UAP

– I am reasonably familiar with themainsprings of action which brought about these proposals, but I have never heard what was said by the honorable member for Darlings Downs (Mr. Fadden) before. It is clear, on the face of it, that the intention of the amendment is, as I have suggested, to serve the interests of the taxpayers by making deductions relatable to the proper source. I cannot conceive of a case in which it would not be in the interests of the taxpayer to have the balance of the deductions taken from the portion of the income which attracts the highest rate of tax, namely, income from property.

Mr Fadden:

– The explanatory memorandum makes it appear that solicitude for the taxpayer is the cause for the amendment, whereas, in my opinion, the amendment is due to the case which I have cited.

Mr CASEY:

– I cannot conceive of any case in which this amendment would not work to the interests of the taxpayer.

Mr Fadden:

– That is so.

Clause agreed to.

Clauses 7 to 16 agreed to.

Clause 17 - (1.) The amendments effected by this act, other than the amendment effected by section fourteen, shall apply to all assessments for the financial year beginning on the first day of July, One thousand nine hundred and thirtyeight and all subsequent years.

Mr NAIRN:
Perth

– I move-

That after sub-clause (1.) the following proviso be added: - “ Provided that the Amendments effected by section live of this act, insofar as they require dividends to be paid out of an amount ascertained as specified therein in lieu of out of income as specified in sub-section (2.) of section forty-four of the principal act, shall not apply to dividends paid prior to the commencement of this act.”

Speaking on the second reading of the bill, I explained that,if the measure in passed without this proviso, companies which, during the first five months of the present financial year, have bona fide declared a dividendout of exempt income will be deprived of any exemption.

Mr Jolly:

– Will the proviso complicate the preparation of assessments?

Mr NAIRN:

– Not at all. It only means that, if a company has, since the 1st July, made a distribution of dividends from exempt income, the amount of such distribution shall not be included as income. I have conferred with the officials of the Taxation Department, who have informed me that the position is as I have stated.

Amendment agreed to.

Clause, as amended, agreed to.

Title agreed to.

Bill reported with an amendment. [Quorum formed.]

Report - by leave - adopted.

Bill - by leave - read a third time.

page 1924

BUDGET 1938-39

In Committee of Supply:

Consideration resumed from the 22nd November (vide page 1829), on motion by Mr. Casey -

That the first item in the Estimates under Division I. - The Senate - namely, “Salaries and allowances, £8,210”, be agreed to.

Mr GREEN:
Kalgoorlie

.- At the outset I propose to deal with the subject of defence, and to direct the attention of the Australian people to the fact that this year the Government proposes to expend £16,750,000 on defence works and equipment. That is interesting, particularly as we have just been advised by a representative of the Government that additional funds cannot bc made available to assist the unemployed, especially at this time of the year when useful employment made available to secure a little cash would be of great advantage to many deserving people. In view of all the circumstances, it is the responsibility of every member of this Parliament to see that the huge amount which the Government proposes to use for defence purposes is wisely expended. Up to the present no definite details have been made available to Parliament. On the 12th and 14th November two powerful articles, written by a naval expert, appeared in the Melbourne Argus, in whichthe Government’s defence policy is vigorously challenged, under the title “ Danger that Looms.” I do not know whether the writer is a naval expert, but the Minister for Defence (Mr. Street) should answer these alarming statements. This expert states -

Just exactly what our navy consisted of during the recent crisis seems almost incredible. After feverish preparation, Australia managed to get into commission five old destroyers and two cruisers. This was the force available for the .protection of the whole of our sea-girt country, for the .protection of our capital cities with their vital industries, and the trade routes upon which depends our economic existence.

To appreciate the total inadequacy of this force it must lie remembered that the five destroyers so hastily dug up out of reserves were built more than 20 years ago. Most of them saw service in the late’ war, and, in consequence, their plant and machinery is well worn and anything but efficient by the standards of modern naval construction. The crows have had no experience of manoeuvring at sea, no gunnery or torpedo practice, and, in fact, no hope of functioning, as an efficient naval unit under at least six months’ training.

The charges made are sufficiently important to justify the attendance in the chamber of the Minister for Defence. He goes on to state -

The guns of these destroyers were manufactured many years ago, and it would be extremely hard to ensure any sort of accuracy of fire without complete overhaul and, in most cases, relining of the guns. Handling n fast destroyer in al! sorts of weather, at night iti particular, when no lights are showing, is a very difficult and dangerous task. Our old destroyers, dug up at a few minutes’ notice, would have been quite unable to carry it out efficiently.

I am glad that the Minister is now present, and, although he has only recently been appointed to the position which he now occupies, he should give the committee the benefit of his opinion on the views expressed. This expert continues -

Vor the rest, we had two cruisers which, in the event of a raid by a. powerful enemy, would lie faced with the ghastly alternative of engaging in an Action ‘which could only result in their total and early destruction, or else running away and leaving our shores to the anything but tender mercies of the enemy.

Our harbours are completely unprotected cither by mines, booms, small torpedo craft, or any of the other devices so well known and so widely used by other seafaring countries. It seems very hard to understand just why Australia finds herself in this appalling position, but the reason is not far to seek.

Our whole defence policy has been quite erroneously based on the assumption that, in the hour of need, the British Fleet would come to our aid. For many years it has been patently obvious to close students . of naval affairs that in the event of trouble in Europe the people of Great Britain would never allow the main fleet to go farther east than the Mediterranean..

Actually the British Fleet as it stands to-day is merely a relic of the last war. Of 15 capital ships, 10, i.e., 5 Royal Sovereigns and 5 Queen Elizabeths, were .part of the old Grand Fleet; the battle-cruiser squadron, consisting of the Hood, Repulse, and Renown, are of the same vintage, and the Nelson and the Rodney are the only post-war capital ships in the length and breadth of the British Empire.

If they are the only two post-war vessels, all of the other vessels must have been built just before the war, as the Minister for Defence must know -

It should have been only too obvious to our Defence Department in Australia that such a force could not bc divided between the Atlantic, the Indian Ocean and the Pacific.

In spite of the repeated warnings from the press, no notice was taken by the Government. It evolved several schemes and the writer proceeds to show that there was no co-ordination in the matter of schemes. The Government had the divided duty of keeping its eye on the Mother Country to be ready to send the whole of our troops into the blood bath of a European conflict if necessary - and that very nearly happened during the recent Czechoslovak crisis - and of providing for the adequate defence of Australian shores. The Government saw no virtue in the policy adopted by the Labour party that Australians should stand firmly on Australian shores against all comers, and that they should not take part in foreign wars that did not concern Australia. The expert continues -

The problem has been studied and put into practice for many centuries. From the days when Sir Francis Drake and Lord Mount Edgecombe drove off the Spanish Armada with its infinitely superior ships to the days of 1914, effective defence from invasion has been secured by the weaker naval Power through the use of weapons designed solely for defence. Such security can be given to Australia if a realistic defence policy based on the right lines is formulated forthwith. The most suitable for the defence of Australia are mines, destroyers and torpedo-carrying aircraft-

We have not any of these in Australia -

In addition fast coastal motor-boats carrying 21 -inch torpedoes have been developed in recent years to a fine art, and although relatively inexpensive

And that is what we in Australia are keen about. We should take every possible step to ensure that we get the maximum of defence with the minimum expenditure, otherwise our social services will go to pot and the country will not be worth fighting for. We have already expended, as the Minister knows, over £700,000,000 on war and the expenses which that war entailed - they carry a sting in their tail which can be just as effective in destroying a capital ship as can any one destroyer. Torpedo aircraft-

I do not think we have one. If we have one, I have not heard of it and I presume that the Minister has not heard of itbecause he has never mentioned it -

Torpedo aircraft in large numbers operating from shore bases are completely mobile, and can travel from end to end of the Continent. Each of these planes carries a torpedo capable of inflicting severe damage on a capital ship, andtwo of these planes might easily sink any large ship.

Bombers, on the other hand, are of little use against warships.

Mr Blain:

-We could do with torpedo aircraft in the north.

Mr GREEN:

– I agree with the honorable member that they would be very useful for the defence of the northern coastline. It is true that about ten or fifteen years ago real fear was expressed more by airmen than by naval authorities, as to the efficacy of bombing planes in attacking warships. The Minister knows of the great difficulties that are experienced in attempting to keep the three arms of our defence services at peace with one another. The difficulty was just as great as that which confronted the Prime Minister recently in his endeavour to keep the Cabinet in its pristine integrity -

Bombers are suitable principally for bombing large open towns and the communication of a land army. Concentration on these presupposes that the enemy will effect a safe landing.

Major Mitchell, who, about twenty years ago, was in charge of the whole of the defences of the UnitedStates of America, wrote some very extraordinary articles to show that from his point of view the building of capital ships was a waste of money as they could be put out of action very rapidly by bombers. Many ships were sunk off the American coast by bombers to prove that what he said was true. His views were shared by the German expert Von Schere, and several English experts of his day. But times are continually changing, and modern methods of warfare change probably more rapidly than anything else. To-day there is little fear that bombers can successfully put capital ships out of action. The expert continues -

Our prime object must be to keep the enemy from ever setting foot on our shores, and this can only be effected by attacking the raiding ships, troop, and aircraft carriers. Owing to the restricted space in aircraft carriers, it is not possible for an enemy to send down any very large concentration of aircraft, and it is well within Australia’s capabilities to have an air force comprised of fighters and torpedo carriers, which would rapidly achievecommand of the air and effect the total destruction of enemy aircraft carriers.

However much we might disagree with the writer, nobody could consider him to be without naval knowledge.

Mr Street:

– Did he sign his name to the article?

Mr GREEN:

– He signs himself “ Naval Expert “. A large newspaper like the Melbourne Argus has to accept some responsibility for contributions to its columns. It is obvious that the Argus would not accept anything for publication unless it had some sub-stratum of sound idea behind it. I have no doubt that the Minister for Defence will be able to reply to these criticisms, and it is to set my own mind at rest in regard to them that I bring them under his notice. I heard the honorable member for Warringah (Mr. Spender) say that he believes that in the event of an invasion of this country a large number of enemy troops will actually be landed. I know that the general opinion of the Defence Department is that that must be prevented at any cost. This writer seems to share that opinion -

It must be remembered that the prime weapon of naval defence as opposed to offence is the torpedo-

We have heard nothing of that in the Government’s proposals -

This deadly under-water weapon carriss sufficient high explosives in its nose to blast the propellers and steering gear from any vessel, and the cost is infinitely less than that of building a ship capable of carrying sufficient heavy guns to effect an equal amount of damage-

That is important -

Naturally, light torpedo craft cannot make long voyages overseas, but that is the function of an offensive naval Power, and in entire contradiction of the whole spirit of Australian defence.

Die trouble is that with our mosaic Australian defence we are watching with one eye the necessity for keeping the trade routes open thousands of miles away from Australia, and with the other, the necessity for adequate home defence. This expert says that it is impossible to do both. He goes on to say -

Australia must also acquire a number of vessels suitable for laying mines and a large stock of mines. At present, an enemy, once he hod silenced the batteries at the” harbour entrances, which are anything but large, would have nothing to prevent his steaming straight up our main harbours and mooring alongside the local pier.

As things arc drifting along at present, it would appear that about 1942, if we are lucky, we may have three more almost useless cruisers and a few more equally inadequate bombing planes.

In another article the same writer states -

What Australia has to realize is that a great city is a great peril under modern conditions of warfare. A venomous mixture of incendiary and high explosive bombs, augmented by a deluge of liquid gas, will reduce any undefended town to a screaming, blazing shambles that would make the Ypres eai icnt look like’- a football match -

That is strong language, but it may possibly wake up the Government. If it docs so, it will render a very good service to the community -

An essential for coast defence batteries ca.pable pf firing at .long ranges is aircraft spotting.

The honorable member for Flinders (Mr. Fairbairn) probably knows more about this matter than any other honorable member in the House -

It is quite impossible to spot one’s own fall of shot at ranges of 25,000 yards and over without the aid of aircraft. We must have not only spotting planes, but also fighters to protect them while they arc carrying out their duties. Safety cannot bc secured by hurried improvisations. Punic measures when the enemy is at our gates cannot take the place of planned forethought.

Our cruisers and five defunct destroyers in reserve arc incapable of doing more than scrape the paint off the sides of an invading battle squadron.

Our air force has neither sufficient fighters to secure command of the air nor the torpedo aircraft to threaten the existence of the invading warships. True we have a few bombers, but these are quite useless against modern battle-ships, which is a. vital point apparently entirely overlooked by the Defence Department.

This will be quite obvious when one realizes that a battle-ship is heavily armoured against attack by 10 inch guns, and, for a bomb to achieve the necessary velocity to penetrate the armour of a battle-ship, it would have to be dropped from a height of about 15,000 feet which would give it a very small chance indeed of hitting its object.

When I was a member of the Defence Council, the very estimable gentleman then in charge of the Air Force was one day descanting to some effect on the value of the particular arm of the service in which he was interested in the hope that we would persuade his colleagues who were interested in other arms of the service that more money out of the alltooscanty total vote available should be spent on equipment for the Air Force. He had previously told me a story that he related on that occasion, but the members of .the council who were hearing it for the first time listened with their mouths open. We had explained to us how effectively the bombers helped the troops in Palestine, and the officer concluded by saying “ You should have seen the mess. All the troops had to do was to clean it up.” The late Sir John Monash, who was present, made a remark which I have always remembered. He said “ Yes ; its all right if you can hit them ! “ The honorable member for Flinders may not agree with my outlook on this subject, but I know very well that it is difficult to hit ground objects from an aeroplane, just as it is difficult to hit other aircraft which may be engaged in an action. This report also states -

Even if a hit were secured from this height, which is extremely improbable, the bomb would have to have an armour-piercing nose,” which would mean that it would not be carrying any great weight of explosive. In fact, it has been definitely proved that bombing attacks on battleships are not worth the time and trouble. In spite of this, our Defence Department is placing further large orders for bombing planes, and, as far as can be learnt, none for torpedo aircraft. All our industrial centres need strong anti-aircraft defence iti the shape of high-angle guns.

I understand from the statement made by the Prime Minister (Mr. Lyons) some little time ago that attention is being given to that particular subject. The writer continues -

It is vitally necessary that a system similar to that now being adopted in England should be installed. This system is that each centre should provide its own trained men from its personnel and share the expense of the equipment. Thus, in the event of an air attack, the special men will go straight from their work to their guns, instead of, as at present, having to collect reservists from all over the country, who would arrive in time to find a blazing ruin. A policy on these lines is urgently required, and there can be “no question of the ready co-operation of the employees concerned. Here in Australia, there, is no lack of will to defend our country amongst the young men of to-day.

I believe that if the Government would agree to pay the troops a reasonable amount for their services, no difficulty would be experienced in securing 70,000 volunteers. The members of the old militia were paid £12 a year each 50 years ago if they attended all the night drills and the half-day engagements. Of course, £12 was worth a great deal more 50 years ago than it is to-day. I do not suggest that filthy lucre can adequately recompense the young men who enlist in our army, but at least we can acknowledge in this way that they are doing something for the defence of their country. It would be necessary, of course, to pass legislation to protect those who enlist against the action of unsympathetic employers who might be tempted to dismiss them from their employment because of their absence at drill. Even if 70,000 troops were paid a flat rate of £12 a year for their services - and the amount might well be increased to £18 a year - the expenditure involved would be only £840,000 annually, which is not a very large sum to set against from £12,000,000 to £14,000,000, which would be the cost of a major battleship. The writer also observes- -

To repel such a force, the greatest deterrent would be a division of battleships at Singapore, as this would lie right athwart the enemy’s main lines of communication. One battleship would, in my opinion, in Australian waters, be useless. Under modern conditions of concentrated fire, it would last about twenty minutes against an enemy battle squadron. lt is not a question of one battleship, but five battleships or none, and those based with the British ships at Singapore. . . If Great Britain will provide the battleships, the dominions could supply the rest. Our defence policy must be broad and conceived on the basis, first, of repelling any sea invasion; secondly, of obtaining tho command of the air over any sea-borne aircraft; and, thirdly, of making our capital cities safe against raids by sea and air with a number of both low and high angle batteries strategically placed.

I believe our contribution would have been lauded to the skies by the imperial authorities if it had been adopted by any other dominion. In this connexion, I remind honorable members that Australia is spending far more on defence measures than any other dominion. We have had specific information supplied to us on this subject just recently.

The writer of that article makes it very clear that it would be useless for us to provide only one major battleship. Moreover, any equipment of this kind that we may possess should, in his opinion, be linked with similar equipment at Singapore. At one time it was considered that we .should establish defence bases at different points round the Australian coast and particularly at Fremantle and Sydney. This was a Defence Department secret formerly; but it is not so to-day.

I shall not pursue this subject any further except to say that the newspaper articles which I have quoted at some length appeared to me to be sufficiently striking; to justify attention by ‘ the Minister. I do not say that I agree with all that is said in them, but I am strongly of the opinion th.it it would be wise for us to spend a certain amount of money on motor craft capable of carrying torpedoes. As such vessels could be competently manned by many Australians who are unequalled in the skill of handling yachts in different parts of Australia, they would be an efficient force. At any rate they would be able to render a much more effective service to the Commonwealth than would one large battleship.

I do not suggest that the officers- of the Defence Department are inefficient. I am very well aware that there are almost as many ide..s on defence subjects in Australia as there are people here;, and I know that many curious policies are submitted to the Minister for Defence from time to time in many curious places by people who have strange ideas.

I wish now to deal with what the honorable member for Adelaide (Mr. Stacey) called his “ constructive “ policy in respect of New Guinea. I do not desire to say anything to hurt the honorable gentleman’s feelings, but I cannot agree with some of his submissions. He directed our attention to the deficiencies of lSalama.ua as a new capital for New Guinea. We know very well that Salamaua was selected by tuc Minister for External Affairs (Mr. Hughes), but that right honorable gentleman was in the territory only a very little willie, and it is obvious that his recommendation must have been based upon a recommendation made to him by persons in high positions in New Guinea who were not members of the expert committee. The committee recommended Lac, ..nd no one can read its report without being impressed by the strong case it made out in support of its view. The members of the committee were competent to consider this subject. BrigadierGeneral Griffiths has had long experience of New Guinea, and we should pay considerable attention to what he says. I do not know the other members of the committee personally. The honorable member for Adelaide objected to Salamaua for several reasons. I object to it as a site for the capital because the big swamp adjacent to it would have to be filled in before any effective work, could be done to establish the new capital there. It is estimated that it would cost between £200,000 and £300,000 to fill in the swamp. Of course Salamaua has points in its favour. The captain of the Montoro told me that, apart from Rabaul, Salamaua was easily the best port in the Mandated Territory in close proximity to the mainland. I am authoritatively informed that the harbour there is sheltered all the year round. It would need a breakwater, but that, I understand, is provided for in the scheme. Wherever the new capital may bo situated, Salamaua must be the port for the gold-fields, and for the timber that is about to bc cut from the extensive forests which are in close proximity. I have recently received a letter from a person living at Salamaua in which he sings the praises of that particular location without restraint. But no doubt other honorable members have received similar letters from persons living in other parts of New Guinea. The honorable member for Adelaide allowed himself a great deal of latitude in discussing this subject. He even suggested that he would be prepared to agree to ‘ the new capital being located at Port Moresby. That would be absolutely impracticable under the mandate. The honorable member also referred to the Middle Bitor Road route, which it has been suggested would be a satisfactory road to* the gold-fields. Surveyors have estimated that the construction of this road, which would link Salamaua and Wau, would cost £150,000. This is only one of four suggested routes to the goldfields. The idea is, of course, that Salamaua should be the port for the goldfields. The honorable member finds fault with the proposed route because it would have to rise 5,000 . lent .wad he would not be surprised if the cost proved to be double the amount stated. We know that public works frequently cost a lot more than the original estimate, but even if it did cost double the amount proposed, it certainly appears to be the best route of all those that have been recommended up to date. Of course, another route might be decided upon eventually. I understand that the Director of Works in New Guinea is at present engaged in walking from Salamaua to Wau along the Bitoi route in order to decide its merits for himself. Afterwards, he will traverse the other routes on foot. He is a capable man, and is not afraid of Hard work. I know him well. However, there is nothing impracticable about the Bitoi route. This is shown !by the fact that a road hae been constructed from Wau to Edie Creek, a distance of 12 miles, and it rises 1,800 feet in the first 4 miles. Thus, in 4 miles, it rises the same distance as a road following the Bitoi route would rise in 14 miles, allowing the distance to be 40 miles to the top of the divide.

This route has been spoken of favorably by the surveyor, and, in any case, we must have a road, because freight charges, oven at the reduced level of 2d. per lb., amount to £18 13s. a ton, which renders the industrialization of New Guinea impossible. I could quote figures to show that New Guinea Airways have made enormous sums of money carrying people a distance of 70 miles for £5 a head. Passengers can travel by air from Brisbane to Charters Towers, a distance of 1,000 miles, for £10. Moreover, in New Guinea, the airliners have backloading. Those who travel up country in them must come back in them also: whereas ou the Queensland coast, for instance, a passenger might travel from Brisbane to Cairns by air and return by sea. During the tourist season *in New Guinea, the air-services reap a harvest carrying twenty people at a time at £5 a head.

Mr Jennings:

– They are doing a good job, however.

Mr GREEN:

– I agree that they have made gold-raining possible in New Guinea. They have carried pieces of machinery weighing several tons, a truly remarkable thing. I am merely pointing out that they are very hungry. While they have performed a useful service in opening up one of the biggest gold-fields in the country, it must be remembered that the route was pioneered, not by the present company, but by those who went before it.

Roads similar to the proposed road have been constructed in other parts of the world. I have travelled over a road, which crosses the Andes between Chile and Argentina, at a height of 16,500 feet, and the mountain is crossed in less than 100 miles from the Pacific coastal plain. I agree that it would be impracticable to freight timber from the interior to the coast at a cost of 2d. per lb. A road must be constructed, and the sooner the better.

My idea is that Wau is the ideal site for the capital. It is 3,500 feet above sea level, and the climate is healthy, as is proved by the health of the children living there. In all tropical countries, it is necessary to have hill stations to which women and children may retire during the hottest part of the year. .There are such stations in Java, and in India there is Simla, which is used for this purpose. We must recognize that, for people to live in health in the tropics, it is necessary that they should have access to highlands of the kind with which New Guinea is blessed. Wau has electric power and electric light. It has European and native hospitals, and malaria doss not originate there. All along the coast there is malaria, including occasionally that very bad form of it known as blackwater. It is said that no one ever gets blackwater fever more than twice. Presumably, people do not contract it in heaven. This absence of malaria is a most important point in relation to the health of white’ children. I have seen young white girls doing gymnastic exercises at Wau, and they were a fine advertisement for the place. Along the coast, one rarely sees a child redolent in health who has been there for any length of time. (Leave to continue given.’] At Wau, the nights are always quite cold. The soil is good, and European vegetables may be raised, while dairy cattle can be kept, an important point in regard to the rearing of children. There are swimming baths of standard international size. In short, Wau may be regarded as a sanatorium, and when the gold-fields are exhausted, the timber industry can be exploited to keep the place going. There are agricultural possibilities also, and the finest coffee can be grown successfully. The first essential, however, is to have a road, and I trust that the Minister will give serious consideration to the claims of Wau as the site of the capital.

Mr FADDEN:
Darling Downs

– I regard this debate as very important because, through the budget, the Government should give a lead to the people of Australia in regard to economic and financial matters. I believe that there are abundant grounds for criticizing thy budget. The Government should postpone, if not repeal, the National Health and Pensions Insurance Act, at least until there is some evidence of the recovery of commodity prices, and improved economic conditions. Apart from the financial aspect, the scheme is misunderstood throughout the Commonwealth. This is proved by the fact that most newspapers publish explanations by the Insurance Commission in the form of answers to questions. Any one who studies those answers, and compares them with the speeches delivered in this House during the debate on the insurance bill, will appreciate the numerous inconsistencies, and variations from the- original statements, that have developed in regard to this most important measure. There, are far too many questions to be answered. Then, the question of the remuneration of doctors is as far from being settled as ever, and it is not likely to be satisfactorily settled for some con- siderable time. The measure is admittedly an experimental one, and it is an expensive experiment. It is admittedly defective, and it is anticipated that it will have to he amended in the near future in many important respects. The most cogent objection to it, howover, is the cost. According to the budget, public contributions for the first six months will be £5,500,000, and the charge on the Treasury during the ensuing financial year is stated in the budget speech to be £1,100,000. This estimate, however, has been supplemented by a subsequent explanation given on the introduction of a recent measure, and lias now been fixed at an additional £466,000. This amounts to an annual cost of more than £12,000,000 a year, and the amount will be an increasing one. It is understood that defence expenditure for the year 1939-40 will be about £20,000,000. The vote for the post office is £2,500,000 more than that lor the previous year, and I submit that, at a time like this, such an increase is not justified. “We have enormously increased the cost to the population, and whether the money is to be found by taxation or by loans does not alter the position. It must be provided by the people, and by the same people. Can they afford it? Export returns are declining. There will be.- a smaller wool clip this year ‘than last, while the average price is not likely to be better. Wheat will be exported to depressed markets, and every one is now aware of the disastrous position in which the wheat-growers find themselves. Existing values of butter are not likely to be maintained. The balance of trade is already unfavorable, allowing for shipments of gold and specie. If there is not some concession to the virtues of economy and ordinary prudence, the country may experience, before long, if not an economic crisis, at least a grave financial set back. All the indexes point in that direction. Honorable members should not blind themselves to the warnings before them. It is of no use for us to do the “ ostrich act and hide our heads in the ground. Nothing is gained by disregarding the statistical warnings contained in the publications of the Department of Statistics, which the Commonwealth pays a considerable amount of money to have collected and collated. According to the last issue of the Statistical Bulletin: export values have declined since 1928-29, from an index base of 92.5, to one of 65.9 on the 13th October, 1938. In July of this year it was 71.7. In August, it had declined to 69.7, in September to 66.2, and by the 13th October last, to 65.9. These figures should make honorable members sit up and think, and should make the Treasurer (Mr. Casey) realize how unwise it is to load the people of Australia, and the industry of the country in particular, with the cost of that half-baked scheme known as national insurance.

All of these factors will have repercus-sions. Among them will bc, inescapably, a heavy addition to the costs of all industrial production. This will react unfavorably on the cost of living. That will be followed by demands, more or less legitimate, and perhaps undeniable, for higher wages. If production costs rise, and wages move correspondingly, production will be depressed and unemployment induced. That is not a pessimistic view. It is a practical one, and no government worthy of the name of a national government should ignore the facts which ought to be as plain as the nose on one’s face, allowing for the fact that some noses are plainer than others.

Defence is paramount. Money cannot be refused for the protection of the country and the population against attack by an enemy - and if that had not to be apprehended there would be no need for defence at all. It is invasion that the Government the Parliament, and the people have to guard against. The heavy expenditure required for this purpose calls for all possible reasonable savings in other directions. It demands that other matters be subordinated to the great emergency of security.

The Treasurer (Mr. Casey) said in his budget speech that production in 1937-38 would be about the same as in the previous year. The Statistician puts that figure at £456,200,000. In the last financial year the seven governments spent from revenue alone £208,000,000 - more than 43 per cent, of the gross value of all industrial production. Is that wise? Is it safe? Is it sane? And can the national Government coolly propose to inflict a dozen millions and more of additional expenditure for the operation of its half-baked scheme of social insurance ?

Recently, the Prime Minister (Mr. Lyons), very sensibly endeavoured to secure the co-operation of the States in diverting works programmes so as to dovetail with defence works. There might well be proposed co-operation in reducing the rising costs of administration, and here the Federal Government - and the Parliament - ought to give a lead. The people of Australia simply cannot afford, in their present circumstances and with their doubtful prospects, to support the insurance scheme and the defence programme. Which should come first? There is but one answer. National insurance should be postponed in the national interest. It should wait until the international political horizon and the domestic financial horizon arc less cloudy. To realize the necessity for economic caro wo have only to look at the budget for this year, and to compare the ever-rising expenditure of this Government over the Inst three or four years. The expenditure, of course, has to be provided for out of production, and out of the pockets and purses of the people, and has risen from £75,289,325 in 1934-35 to £93,136,000 for the year under review, which is £7,000,000 more than in the previous year. I concede that the bulk of the increase is due to expenditure on defence, but there is no evidence of any care or consideration being given to the need for economy. I submit that a national stock-taking is long overdue. The Government must take stock of its national and natural resources. It must enlist the cooperation of the States. It is essential that the Government review definitely, minutely, and expertly its financial policy.

I would direct the attention of honorable members to the comparison of aggregates for the September quarter of 1938 with the September quarter of 1937, as revealed in the statistical information and accounts of- the nine trading banks. These figures should form a basis on which honorable members could intelli- 1fr. Fadden. gently survey the position and have some regard for the future. . The following table sets out the position -

The banking position deteriorated considerably during the year. The excellent export season of 1936-37 relieved the tightness which had developed in the money market in 193G, but the position has now been almost entirely reversed. The main reasons for the present unsatisfactory situation - arc to be found in reduced proceeds in the year under review compared with the previous year, a high level of imports stimulated by the increased spending power available in 1937, and the existence of widespread drought conditions ending in May, 1938. These factors have caused heavy demands on the banks for accommodation so that advances increased by £23,000,000 in Australian currency. As the result of these movements the ratio of advances to deposits rose from 86.02 per cent, in the September quarter of 1937 to 92.34 per cent, in the corresponding quarter of 1938. With the exception of the September quarter of 1936, when the ratio stood at 93.67 per cent., the figure for the last quarter is higher than in any corresponding quarter since 1931. Coin, bullion and Australian notes decreased by £4,200,000 in Australian currency, the cash to deposits ratio at 10.51 per cent, being the lowest on record for a September quarter. The equivalent ratio in the September quarter of 1937 was 12.01 per cent. Treasury-bills fell £5,500,000 in Australian currency, the decrease in liquid resources amounting to £9,700,000 in Australian currency. It appears .that London funds have fallen considerably, although they, no doubt, remain at a fairly high level, especially after’ the rise recorded as the result of the 1936-3? season.

To sum up, the banking position is very tight. If the present tendencies of low export prices and high imports continue, as seems likely in the immediate future, the banks will be forced to exercise greater discrimination, and even to contract credit unless the central bank takes action to increase the credit base. The necessity to restrict credit could, however, be avoided by the Commonwealth Hank, as a central bank, taking action which would add to the cash resources of the trading banks, and so offset the present stringency in their liquid resources. To achieve this, the recognized methods of central bank control could be employed. If the Commonwealth Bank, using “ open market operations “, were to purchase government securities, by far the greater amount of the cheques it pays to previous holders of stocks would be deposited with the trading banks. When cheques drawn on the Commonwealth Bank are passed through the clearing exchanges, the trading banks’ balances with the Commonwealth Bank are increased. Another method which the central bank could adopt would be to discount new issues of treasury-bills. The cheques and cash drawn by governments when this increased credit was made available to them at the Commonwealth Bank would eventually bring about increases of both the deposits and cash resources of the trading banks. The important object of central bank action should be to support investment so as to maintain the fullest possible use of productive resources and a high general level of economic activity. It must do this in a way that will neither cause unhealthy inflation nor undermine confidence and the activity of private investors. The courses of action suggested would make this possible by enabling the trading banks to maintain their advances, which ensures that capital will be made available to creditworthy industries.

Theadvantage of an increased issue of treasury-bills, also, is that it involves an increase of government expenditure, and consequently maintains spending power. There are many justifiable claims by governments for expenditure at the present time. This offers added inducement to private investment.

The methods discussed are much more effective than a mere increase of the note issue, because they are more certain to lead to increased investment. There is alwaysthe danger that the effect of any marked issue of notes will be nullified by the recipients hoarding them. Moreover, the movement may be regarded as inflationary, and cause loss of confidence. This would probably cause a reduction of the investment in Australia of funds from abroad.

I do not desire to convey the impression that I am an expert. I am not. I am simply a keen student who endeavours to put forward the result of his careful consideration and deep research. I contend that the time has arrived when the Commonwealth Government must take stock of its financial policy in order to place it more in conformity with the conditions with which we are faced, and in order to enable it to measure up to them more advantageously,

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– Will the honorable member indicate to what extenthe would have the note issue increased ?

Mr.FADDEN.- That is a matter for the experts, who would have regard to the essential relativities. Naturally, there would be a limit beyond which the Commonwealth could not go. Nevertheless, something has to be done to fill in the trough. The longer it is left in existence the deeper it will become. We cannot deny the position. We arc faced with an increasing fall of the export prices, and, consequently, we have to make up the leeway scientifically and wisely, and with regard to all salient features.

In considering the financial statement for the year, a person is somewhat in the dark by reason of the fact that full information for analytical discussion is not available.. Estimates of receipts and expenditure for the year ended the 30th June,”, 19 38, were presented to the House in August, 1937. The Auditor-General’s report for the year 1936-37, containing the Treasurer’s statement of receipts and disbursements, was presented to the House and ordered to be printed on the 27th April, 1938, or eight months after presentation of Estimates for the year 1937-38. The twenty-seventh annual report of the Postmaster-General’s Department, containing details of accounts for the year 1936-37, with which I propose to deal later, was presented by command on the 5th May, 1938, and ordered to be printed on the 22nd June, 1938. It necessarily follows that for discussion on the budget the latest available information, apart from that presented in the form of Estimates by the Treasurer, is contained in -

the report of the Auditor-General on the accounts for the year 1936-37 ;
The report of the PostmasterGeneral’s Department for the year 1936-37, presented on the 5th May, 1938.

In the Consolidated Revenue Fund, the statement of the Treasurer showed a surplus of receipts over expenditure for the year 1936-37 of £1,276,558, but, if proper consideration were given to the figures presented by the PostmasterGeneral’s Department alone, the surplus for the year 1936-37 could have been increased by considerably more than another £2,000,000.

The funds of the Commonwealth Government can readily by divided into three sections -

Consolidated Revenue Fund - which contains working costs - and contains expenditure on a cash basis similar to cost items in an ordinary business;
Loan Fund - which is for the purpose of providing funds for capital or fixed assets. Naturally, as the asset gets depleted by age or wear, an annual charge has to he made on Consolidated Revenue Fund for such wastage, hence, there arc sinking fund charges, &c., on the Consolidated Revenue Fund.
Trust moneys which are collected and expended on special purposes clearly defined, and do not enter largely into the discussion.

Under the heading of Business Undertakings, page 11 of Statement of Receipts and Expenditure, Consolidated Revenue Fund, appear the following receipts and expenditure of the Postmaster-General’s Department for the year 1936-37 : -

That is the contribution of the PostmasterGeneral to the surplus of £1,276,558 on Consolidated Revenue Fund for the year 1936-37 ; but that is by no means all the contribution that the PostmasterGeneral gives, as will be shown later. On page 59 of the budget paper, it is shown that £2,116,88511s. 6d. was expended by the Postmaster-General’s Department for the year 1936-37 on additions, new works, buildings, sites, &c. TheAuditor-General states on page 74. of his report that -

In the year 1936-37, the amount of £2,116,886 was provided from revenuefor new works, buildings and sites. The provision of additional postal facilities will benefit the general public and will no doubt be justified from the financial aspect in augmenting the revenue.

This expenditure of £2,116,886 from revenue forcapital assets is not a new departure, but is now an established practice. The sum of £6,977,274 has been so expended for the three years 1936-38, and £4,000,000 is provided from revenue for 1938-39, making £11,000,000 for the last four years. For 1935-36, 80 per cent. of capital expenditure of the Postmaster-General’s Department came from Consolidated Revenue Fund. The percentage for 1936-37 was 87, while that for 1937-38 was 100 per cent. and 1938-39 is also called upon to provide 100 per cent. from revenue. According to page 79 of the budget papers, the total expenditure on new works, buildings and sites in the Postmaster-General’s Department to 1938-39 is £60,446,845, of which £24,900,249, equalling 41 per cent., has been provided from revenue and £35,546,596, equalling 59 per cent. from loan. Expenditure of a capital nature, for the purpose of augmenting the revenue, is a correct and legitimate charge on Loan Fund, and the charging of such to revenue whilst the asset created thereby exists for from 10 to 50 years, is misleading and incorrect public finance.

I ask honorable members what the position would be if the State governments were able to extract taxation or impose charges that would enable them to debit the whole of their expenditure on railways, the erection of schools, and other public buildings to revenue? What freights would be charged to the primary producers and other sections of the community had the State authorities adopted the system of finance which this Government employs? I ask them to realize the position with which the people of the States would be confronted if the cost of rolling-stock and other capital expenditure, such as must be incurred in the extension and expansion of any railway system, was charged to revenue instead of to loan account. The answer is quite plain. Yet this Government has, by virtue of the charges or taxes which it imposes, been able to extract sufficient from the people to have the colossal sum of nearly £25,000,000, or 41 per cent. of the expenditure of the Postal Department, charged to revenue instead of to loan. As least £20,000,000 could, at present, be treated as aloan of, say, twenty years’ standing, and Consolidated Revenue Fund could be recouped from loan to the extent of £20,000,000, if considered desirable over a period of four years, say, £5,000,000 a year, and this money could be utilized for defence purposes without the imposition of further taxation. The financial returns of the Postal Department at present could stand up to the additional £20,000,000 loan, without any increase of charges. The Australian people should be encouraged to subscribe to such a loan, the cost of which could adequately be carried from the surplus revenue of the Postal Department. If that were done, the taxpayers would be relieved of unnecessary imposts at a time when taxes arc particularly heavy, and when it is not in the best interests of the people to impose unnecessarily extra imposts.

The profit and loss account of the Postal Department for the year 1936-37 shows a profit of £3,340,930 18s.1d. The excess of receipts over expenditure for 1936-37, according to the statement of the Treasurer, is £491,440 4s. 2d. The profit and loss account shows income and expenditure whilst the Treasurer’s state ment is prepared on a purely cash basis, but the following particulars illustrate the large portion of this difference of £2,849,490 13s.11d.:-

The difference is accounted for by the difference in the preparation of the two statements; one is on an income and expenditure basis and the other is on a purely cash basis. It will be seen that additional to the £491,440 4s. 2d. shown in the Treasurer’s statement, the Treasurer has taken the PostmasterGeneral’s fund by means of payment of capital expenditure out of Consolidated Revenue Fund and by means of excessive sinking fund charges to the amount of £2,767,344. For 1939 the Treasurer has budgeted for a deficit of £1,143,000, which is to be met from general revenue on account of Postmaster-General’s Department, but such estimate is after providing £4,000,000 capital expenditure and excessive sinking fund charges from revenue. Such items total £4,750,000 at least, so that the true result on a proper accounting basis should be a surplus of £3,500,000. This would more than pay interest and redemption on a £20,000,000 loan for the Postmaster-General’s Department repayable in twenty years.

On page 5 of the report of the PostmasterGeneral for 1936-37 it is stated that “ the interest charge is allocated by the Treasury Department as is also the exchange on interest payments.” On page 48 of the report the following payments made by the Postmaster-General’s Department are shown: -

Taking the average interest rateat, say, 4 per cent., the interest charge would represent loans of £37,474,175 on which interest is being paid by the PostmasterGeneral’s Department to the Treasury Department. It has already been shown that the total loan expenditure of the Postmaster-General’s Department up to the 30th June, 1937, was £35,546,596, and it is also noted that sinking fund contributions to the National Debt Sinking Fund paid by the PostmasterGeneral’s Department total over £1,000,000 a year. It is apparent, therefore, that no rebate by way of interest charge is being allowed by the Treasury Department for the large sinking fund contributions yearly charged up to the Postmaster-General’s Department. All of the information available points to that conclusion. The exchange charges made on this department by the Commonwealth Treasury for 1936-37 amounted to £370,370.

Mr Jolly:

– The Treasurer stated that the loan indebtedness is £31,000,000.

Mr FADDEN:

– Yes, but he has charged it up at over £37,000,000.

Taking the exchange rate at £25 a £100, this charge represents an interest remittance of £1,481,480. If the average rate of interest on loans is 4 per cent., it would appear that £37,037,000 is the amount of the Postmaster-General’s loan moneys held in London and New York. Seeing that the total loan expenditure to the 30th June, 1937, was £35,547,046 10s. 6d., the utter ridiculousness of this exchange charge is seen. Nearly the whole of the capital expenditure of the Postmaster-General’s Department has been incurred in Australia and not overseas, and if £70,000 in exchange was charged to the department, it would be more than an equitable payment. At least £300,000 has been overcharged to the Postmaster-General’s Department on this account. The sinking fund contributions of £1,023,673 for 1936-37 and £1,130,000 for 1938-39 are equally ridiculous charges. The total loan expenditure of the Postmaster-General’s Department for 1936-37 was £35,547,046. On page 92 of the budget papers, under public debt, it is stated that 30s. per cent.of loan expenditure of the

Postmaster-General’s Department shall be paid to the National Debt Sinking Fund. It should be noted that this is three times the average charge made by most other concerns; the average appears to be 10s. per cent. On the debt I have already indicated the charge at £1 10s. per cent. would be £533,205, and the charge made for 1936-37 was £1,023,673, or an excess of £490,468. The charge of £533,205 even is three times that usually made, 30s. instead of 10s. per £100. It is noted also that the depreciation charge on all assets of the Postmaster-General’s Department for 1936-37 was only £373,214, so that it would appear that a sinking fund contribution of £1 10s. a £100 is considerably more than is necessary. Page 92 shows that the total sinking fund contribution for the year 1936-37 payable out of revenue was £3,434,219, of which the PostmasterGeneral’s Department was called upon to pay £1,023,673. The ridiculousness of this contribution is shown when the PostmasterGeneral’s total loan expenditure of £35,547,046 is contrasted with the total public debt of the Commonwealth shown on page 87 of the budget papers as £386,910,341.

There may be some reason for the adoption of this policy, but some investigation is essential. According to the information available to me, it appears that the sinking fund chargeable to the PostmasterGeneral’s Department is in excess of the statutory requirements. Unfortunately, I have not sufficient time to go fully into this matter, but I consider that there are various reasons why taxes should not havebeen increased. In the first place, there should have been a scaling down of expenditure. If £4,000,000 cannot be provided from loan funds for capital expenditure on postal works, it should not be raised by imposing taxes, particularly when tax restrictions, especially at this juncture, have a disadvantageous repercussion on Australian economy generally. Moreover, this is not an opportune time to inflict a scheme of national insurance, which is an extra levy upon the Australian community. There are ways other than those adopted in which the budget could be balanced if it has to be balanced. In the interests of the Aus- tralian people the Government should have made a fair percentage of loan moneys available for public works and capital expenditure. The Treasurer pointed with pride to the fact that the public debt of the Commonwealth has been reduced by £7,000,000 within the last six and a half years, but that is one of the weakest features of the Government’s financial policy. The Commonwealth, in encouraging and allowing the States to take up available loan moneys, has rendered a. disservice to Australia. State governments in their desire to provide employment have squandered money which the Commonwealth Government could have expended wisely, for instance,” in the Postmaster-General’s Department. The Government cannot point with pride to the fact that the public debt of the Commonwealth has decreased by £7,000,000. and at the same time direct attention to the fact that the indebtedness of the States has increased by £92,500,000. This Government should have gone into the loan market in order to relieve the burden on the taxpayers of Australia and should have utilized loan funds for capital purposes instead of taking and using such revenue for capital expenditure. It is only because the revenue has been buoyant that the Commonwealth Government has been able to continue its policy in this regard. It has been said that only by virtue of the successive progressive reductions of taxation it has made since it has been in power, has the Government been able to assist in no small measure in the rehabilitation and revitalization of Australia. I agree with that contention. I point out that the policy of tax reduction has gone a long way towards making possible the present state of our finances; it has left the money in the pockets of the people, and in the hands of private enterprise, where it is best able to be employed. Therefore, the Government cannot now also point with pride to its policy of increasing taxation which must be of detriment to Australia. If reduced taxation has been beneficial to the country in the past, it cannot now be said that increased taxation will not be disadvantageous. In conclusion, I draw the attention of honorable members to the following words of EdmundBurke in the House of Commons many years ago:-

Our resources may be as unfathomableas they are represented. Indeed they are just whatever the people possess and will submit’ to pay. Taxing is an easy business. Any projector can contrive new impositions; any bungler can add to the old.But is it altogether wise to have no other bounds to your impositions, than the patience of those who arc to bear them ?

I protest strongly against the practice adopted in certain departments of the Commonwealth Public Service of permitting overtime to be’ worked, particularly while many young men find it impossible to obtain, jobs. Some time ago, I asked the Attorney-General to give me details of the amount paid for overtime work to officers of the Patent Department in -the last twelve months. I was astounded to learn that the staff of this department received more than £4,000 in overtime in one year. I then communicated with the Chairman of the Public Service Board to ascertain the salaries of the men in the Patent Department who had received large amounts in overtime. I was amazed to discover that many of them were receiving high salaries. It seems to me that some members of the Commonwealth Public Service to whom overtime is payable are exploiting the position. We know very well that in some other branches of the service no overtime is payable, although much may be worked. The following table gives the salaries of certain officers of the Patent Department who received amounts in excess of £1.00 in overtime last year. The asterisk at the end of the line indicates that the officers so identified also received child endowment. In effect, the list shows that seventeen of the officers concerning whom details are given have received amounts substantially in excess of £100 a year in overtime although some have no families to support: -

It is not fair that mcn receiving such big salaries should bc allowed to work so much overtime, while many young men cannot obtain appointments. We are- all well aware that in these days the parents often sacrifice their own pleasures to a. very great degree in order that their children may sit for the intermediate and leaving certificate examinations, and then pass on to a university. Ti is deplorable that, after attaining such an educational standard many young people should he thrown on the industrial scrap-heap. About 90,000 Australian -boys and girls leave school each year. Of these, about 40,000 are absorbed in industry. The remaining 50,000 find, it extremely difficult to get a job of any kind. When I have complained about the amount of overtime being worked in some branches. of the Public Service, I have been told, “We cannot fill the positions.” Frankly, I do not believe it. I urge the Com mon wealth authorities to consult the education authorities of the various States to- devise ways and means by which young people approaching the school-leaving age may obtain some vocational guidance and special training to fit them to fill serviceable positions in the Public Service of the Commonwealth. I cannot help complaining again about the amount of overtime being worked in the Patent Department. I admit that the Attorney-General (Mr. Menzies) has said to me, “ It- is not good ; it must cease”; but I ask for effective action to be taken without delay. I shall not “ let up “ on this issue. Next year [ shall ask similar questions, but I hope that I shall receive answers much more satisfactory to me. Wc should not permit men without families to earn such large amounts of money by overtime when many bread-winners of families are forced to walk the streets in idleness, with a consequent deterioration of their morale and general outlook. The Government has assured us that it desires to adopt appropriate ways and means to increase the birth rate in this country, but, as things are, it seems to me that the workers, at any rate, are offered very little inducement to rear families.

The attitude of honorable members opposite towards the unemployed was shown very clearly this afternoon when they refused to permit the subject to be discussed at any reasonable length. The Government wanted to. close the mouths of the Opposition so that they would be unable to ventilate the grievances of the unemployed. What is the Government going . to offer the unemployed this Christmas? There will bo no Christmas pudding this year.

Mr Lazzarini:

– Many of them did not get it last year.

Mr MAHONEY:

– Yes, some of them told rae that they did not get even an apple dumpling. Yet, while thousands of men . are out of .work, and their families are unprovided for, the Government has increased the salaries of tho Ministers by £1,600, and they will be able to buy the best for their families. This is the sort of thing that will bring about a class war. Who could blame tho workers if they revolted against such damnable conditions ? At tho present time, thousands of men are walking the streets almost barefooted looking for work. Many of them have been evicted from their homes because they cannot pay their rent. I do not blame the men who own the houses; I blame the Government which fails to ensure that every man with a family has a roof overhis head. Every one who is willing to work should have a home. Conditions in Sydney at the present time are disgraceful, probably the worst in Australia. There one sees hundreds of families living in tents, and no effort is being made to provide them with decent houses in which to rear their children. My purpose is to look after those whom I represent in this House. The Government of Tasmania cannot carry out the various public works which would provide relief for unemployment, because the Commonwealth insists that it shall co-operate in a defence programme. The Commonwealth, in its turn, promised that, Tasmania should have its share of defence work, and the Minister told us the other day that £74,000 was to be expended in Tasmania. I remind him, however, that, of this amount £34,000 was passed last year, yet the works have not yet been commenced. The Government of Tasmania cannot carry the burden of unemployment alone. Upon reading the Commonwealth labour report, I find that the only thing that has been done by the Government is that in 1934 it agreed to the raising of a loan of. £7,000,000, as part of a programme of £15,000,000, for the carrying out of reproductive works. In that year, Sir Frederick Stewart was appointed UnderSecretary in charge of unemployment, but in February, 1936, he resigned, and no wonder. He was unwilling to carry on the position when the Government had nothing to put up to him. All the Commonwealth has done is to lend money to the State governments with which to pay interest on money raised by them through the Loan Council for the relief of unemployment.

We know that in Canberra, the position in regard to housing is disgraceful. Civil servants are being brought to Canberra when there are no houses for them and their families. I am glad that they are refusing to go into the slums at, Molonglo and the Causeway, where it is so hot in the houses in the summer time that the wife does not have to light the fire in order to roast the meat; it can be roasted in the heat from the corrugated iron roof.

There is no hope for the unemployed until the Commonwealth Government agrees to co-operate with the States in a programme for unemployment relief that will enable the youth of the country to participate in industry. The young men of Australia are entitled to share in the good things of life that honorable members are able to enjoy because we get good salaries. If we wish our youth to be a force in production, and to be prepared to defend the country in time of need, they should be put in the way of earning a decent living for themselves. Make no mistake, the burden of the defence of Australia will fall on the young men ; very few over 40 years of age will take any part.

At the present time, in the big cities, employers take on boys of sixteen years of age, work them for four years, and then, when they are approaching 21, and would be entitled to an adult wage, they are dismissed, and must join the ranks of the unemployed. This should not bo permitted. They should be kept in employment, because they are the most important assets the Commonwealth possesses.

In regard to immigration, I claim that, while there is a shortage of work in Australia for our own people, we should be very careful regarding the admission of others from outside. I hope that the Government will not admit a large number of immigrants while men are walking the streets of the cities looking for jobs. A careful watch should be kept on those entering the country to ensure that they are of a type worthy of Australia.

Sitting suspended from 6.15 until 8 p.m.

Mr MAHONEY:

– The Government was returned at the last election with a majority in both Houses on a promise that it would cope with the unemployment problem, but, despite the fact that the Leader of the Opposition (Mr. Curtin) has urged upon the Government a. plan to absorb the unemployed and to prevent the recurrence of a depression, it has done nothing. Indeed, since this Government has been in power, we have had from it nothing but promises, and it seems thatthis is all the future has in store.

Sweden is the only country in the world which has planned for the future. The report of the International Labour Organization contains the following interesting passage : -

It is therefore to some extent reassuring thatthe discussion of measures to maintain the volume of employment in times of depression has continued to attract a great deal of attention. It is significant that, in spite of the high level of prosperity which the country now enjoys, the Government of Sweden has continued its systematic effort to frame plans for meeting the next depression. A committee was set up at the beginning of last year by the Minister for Social Affairs to consider schemes for dealing with unemployment in times of economic crises. The committee undertook a complete survey of all public works, whether government or municipal, which might be put in hand for this purpose. They recommended that a large number of projects should be kept in reserve which could be started as soon as unemployment again threatened to become serious.

It would be well if the Commonwealth Government followed Sweden’s lead. Ministers were not backward last week when they committed the atrocity of the salary grab, but they are loth to do anything which would enable the workers of Australia to have decent houses in which to rear their children, and decent conditions of life which would enable those children to be reared under more reasonable conditions than are provided by the dole system of to-day. There is no excuse for the failure of the Government to grapple with the problem, because it has had enormous resources of revenue at its disposal. It has no public works projects. The war that might have saved its face in this respect was averted, and the Ministry stands condemned in the eyes of the people. ‘The workers are despondent, because this Government, which has squandered thousands and thousands of pounds on things of no economic value to Australia, such as journeys abroad for the Ministers, has left the problem of unemployment to the States. Journeys abroad by Ministers might be justifiable, if they achieved results; but the three Ministers who recentlywere abroad for the purpose of negotiating a trade treaty came hack empty-handed.

TheCHAIRMAN (Mr. Prowse).The honorable member’s time has expired.

Mr HUTCHINSON:
Deakin

.- I intend to confine my remarks to two subjects: first, defence, which gave its name to this budget, and, secondly, a subject, closely allied to defence, but not of such moment - migration. A great deal of the concern that is being expressed to-day by the public and of the criticism that has been directed against the Government in respect of defence is to a certain degree mis-timed ; because defence entered the minds of this Government in the early days of its existence. As soon as money became available as the result of increased earnings by the Treasury from the improved economic conditions,’ the Government immediately began to tackle the defence problem. It can look back with satisfaction on the fact that in the early days of its career it set aside £4,000,000 as a trust fund for the purchase of defence equipment. Honorable members can also call to mind that two or three years ago, when concern was expressed about the inability of Australia to obtain first-class fighting aircraft, the then Minister for Defence, Sir Archdale Parkhill, to whom great credit is due, investigated the possibility of the manufacture of aircraft in Australia, with the result that we have to-day at Fisherman’s Bend a. factory for the supply of aircraft to the Royal Australian Air Force. More to-day than at any other time in our history, except in the “great war, the people of Australia are interested in the subject of defence. They have been called out of the apathy from which they should havebeen called long ago. This concern for adequate defence is typical of the British people throughout the British Empire. The people of this country, in common with the people of Great Britain, desire a more vigorous defence policy, one that will not only guarantee security, but also make the Empire so powerful as to enable it to speak in the councils of the world in such a way as to counteract the policies of certain other powers. In September, there was a crisis of such magnitude that, until the eleventh hour, it appeared that Aus- tralia would, with the rest of the world, be, against its wish, involved in war. It was realized then that we possessed an inadequate navy - in fact some naval vessels were in dock undergoing an overhaul and, consequently, were incapable of putting to sea. It was also alarming to find that the Royal Australian Air Force did not possess one aeroplane which could be described as strictly modern, and that, with the exception of a small permanent force to man our fixed defences, there was no military force to safeguard Australia against an attack by a raiding force. When these facts percolated into the minds of the people there was a sudden awakening among them to the need of the country.

Almost since the signing of the Treaty of Versailles certain countries have adopted a policy which cannot be described as other than armed blackmail. That policy has on every occasion been successful. I’ cite, for example, Vilna, Corfu, Manchuria, Abyssinia, Austria, and Spain. Who will doubt that Germany and Italy have not had more than a finger in the Spanish conflict pie? Undoubtedly they aim at power in the Mediterranean. The culmination took place at Munich where we had what, in some respects, was a. sorry spectacle of three nations meeting to determine what should be done to Czechoslovakia, a small democracy which, since its inception, had been loyal to the spirit of democracy, and had treated its minorities better than minorities are treated by any other country in Europe - undoubtedly better than they are treated in Germany, the country which demanded some reparation for the disabilities which it alleged were suffered by the German minority in Czechoslovakia. Germany is to-day treating a minority within its population in a way which is an affront to God and man. On the debit side two things emerged from the Munich discussions: first, that the small country of Czechoslovakia was to be carved into pieces for the benefit of the larger country of Germany, and secondly, a loss of prestige of democracy throughout Central Europe. On the credit side we have to take into consideration that, for the first time in world polities since the policy of armed blackmail was adopted, the democracies came to the point of discussing terms and prepared, if necessary, to back their demands by force. That aspect possibly marks the turning point in world, affairs in what may be termed the post-war era. We have to remember, however, that on every occasion the policy of power politics lias been attempted it has been successful and the prelude to a further step forward. After the Munich conference the Prime Minister of Great Britain returned with what was thought to be a policy of peace within our time; but recent world events are such that peace is again threatened. Democracies are being played by Germany one against another in a very clever manner. In the matter of colonial possessions that nation is even attempting to play the dominions against one another in order to weaken the British Empire. In the East and in the Mediterranean trouble might easily occur. With these facts before us is it any wonder that the Australian people are demanding an efficient defence policy?

For some time we have been carrying on under the voluntary system, and we pay tribute to those public-spirited youths of the militia forces who render such valuable service to their country. In dealing with the present system, and particularly the period in which trainees are in camp, I shall enumerate some of the faults of the system; because it is only by so doing that we can effect improvement. Under the present voluntary system the training period is only twelve days a year, although it has been suggested that that period is to be increased by six days. In criticizing the present system I am not speaking, of course, from the point of view of a military man; I am endeavouring to discuss the problem in a common sense way. [Quorum formed.] If a -soldier can be trained in fourteen days, or even three weeks, I have no hesitation in saying that it must be a “ mug’s job “, because I know very few avocations in which a person can be brought up to a state of efficiency in such a short period. I would not even suggest that a man could be regarded as competent to milk cows after fourteen days’ experience in the cow-yard. However, I know that a soldier’s task is by no means a simple one. and that ample time must be provided for. training purposes. I remind honorable members that a few d-ys ago Major.General Squires, when referring to a contemplated increase of the militia forces from 35,000 to 70,000, said that to have a militia force of 70,000 men does not means that we shall have 70,000 trained soldiers. That is the first fault that I have to find with the present system; we are not producing trained men. Moreover, only 60 per cent, of the men enrolled in the militia attend camps regularly, and during the half-day camps the personnel varies considerably. What efficiency can be expected under such a system? By increasing the numbers we enlarge the system, but we are not increasing its efficiency. It is a colossal waste of money to embark upon ti more extensive scheme of voluntary training when the basis on which it is built is unsound. We should get down to sound principles and remove some of the faults that exist. It will be useless to induce increased numbers to join the militia unless the men arc properly trained. I should prefer to see a force taken from the 70,000 of 20,000 or even 10,000 men who would sign a definite contract to place themselves under military orders and to attend a camp for at least three months in the first year, three weeks in the second year aud a fortnight, as a refresher course, in the third year. The others could be learning the fundamental work of the military system. If that policy were adopted, wc would then have at least a number of fairly well-trained men. Under the compulsory system trainees were brought to camp and made to fulfil their obligations, but there is nothing under the present voluntary system which places men who do not attend on the days set aside for training under military orders and makes them subject to military control. I can see no reason why this defect cannot be remedied. It would simply mean the signing of a contract that would embody ‘ military discipline by the military trainee. It is only by compelling the full complement to attend regularly for training purposes that any progress can bo made and an efficient service established. If there is to be a changing personnel, and a marked varia- tion in the knowledge possessed by trainees, progress is definintely hampered. One of the best features of the compulsory system is that a record is kept of the names of trainees, their physical condition, their occupations and, should the occasion arise, the centres at which they are to report. Such groundwork must be of inestimable value in the event of a crisis. The system which is known as the national register could be adopted under the present scheme and so achieve as near as possible the same results. Again, a small standing army might be provided. I believe that honorable members on this side of the chamber - although they may “not believe in the present system - would be willing to help the present drive for additional trainees if something of the kind suggested were adopted, because they would have the knowledge that, in doing so, they would be assisting to establish a force that would bc of some value to Australia. By merely strengthening the militia on the present basis, we are merely tinkering with the problem, and preventing the establishment of an effective force. In. (September last, we were faced with a crisis almost overnight, and another similar crisis may como upon us at any time. In these circumstances, Australia should have a military force sufficiently strong to repel an invader. I have always supported the compulsory system, but have believed until recently that, with our limited means, we could not carry out the policy effectively. During recent months it has been suggested that we should adopt a single age unit. It appears now that it is practicable for us to embark upon this system, but, once again, efficiency must be secured. My idea is that we should take youths of 18 years of age, an age when military training would interfere least with their private lives and one at which they would be much more susceptible to the assimilation of military knowledge than any other, and train them in camp for three solid months with a refresher course of three weeks during the next year and a further refresher course of a fortnight in tho following year. That would ensure that we would have a reasonably well-trained army always at the beck and call of Australia for its defence in time of emergency. If that system were adopted, youths could be trained cheaply to a high state of efficiency and would be ready to give a good account of themselves if the need arose. It might still be necessary, of course, to have, as I said earlier, some small standing force. Mr. Liddell Hart, a well-known writer on military tactics, dealing with the professional army that is always available in case of need, and always in constant training, as against the citizen or conscript army which is trained only for a sufficient period to allow of real proficiency being exhibited, writes: -

A professional army may be reckoned as ready for instant action and as tetter trained. The importance of training has increased with the elaboration and mechanization of modern warfare, but, on the other hand, ir is noc so purely military. Thus a civil technician, of many kinds, may have an increased military value and adaptability. This fact benefits thu country with a conscript army according to its industrial development. Again, the latter can expand its strength far more, and far more rapidly. Classes of conscripts who have completed their “active” service within recent years, and are receiving annual refreshers, can take the field efficiently almost at once

In the opinion of that gentleman, it appears a system that provides for adequate training, but which does not necessarily mean a standing army with all the expense involved, may be the best and cheapest system for Australia to adopt. Even though I believe that the compulsory system is the only proper and correct one to adopt, I am prepared to help forward the voluntary system as the second best scheme, but I sincerely hope that when the Government announces shortly the improvement of its present militia system, it will initiate a system which will take us along the road to efficiency, one that we can genuinely support, conscious of the knowledge that we are doing something to satisfy the Australian people on this most important point of policy and settle their fears to some degree by the provision of an efficient force to look after the security of this country.

I pass now to migration, which is a subject, as I said earlier, very closely allied to the subject of defence. One of the most striking points in the secondreading speech of the Treasurer (Mr.

– The honorable member’s time has expired.

Mr LAZZARINI:
Werriwa

I have no desire to follow the honorable member for Deakin (Mr. Hutchinson) through the pages of history, and ideals of the Australian people, and his reference to Australian culture. I am an Australian, but I remind the honorable member for Deakin that one of the countries which he saw fit to traduce to-night was enjoying the advantages of arts, science and culture when his forbears in Britain could have been found running about in a rage because their loin cloths might have been stolen. The jurisprudence and legal structure of this country, after 2,000 years of Christianity, are based on the Justinian code of pagan Rome. Honorable members who presume to discuss matters of public interest, and particularly the culture and civilization of other countries, should at least provide themselves with a reliable historical background.

I wish now to refer briefly to the inconsistent attitude of the Prime Minister (Mr. Lyons) and his Government respecting the export of pig iron and iron ore from Australia. The right honorable gentleman has told us that the embargo upon the export of iron ore was imposed because of the danger that Australia might run short of supplies. Yet the Government is apparently prepared to allow pig iron to be exported. Personally, I can see no difference between the two when the resources of Australia are brought into the question. The plain fact is that a huge monopoly which dictates the policy of the Government is, apparently, tobe allowed to export pig iron and iron ore whenever it wishes to do so, and to wherever it wishes to send it. This particular monopoly is not interested in Yampi Sound. Let me make my own position clear. I am totally opposed to the export of pig iron or iron ore from this country to countries which may use it, to manufacture guns that might later be turned upon our own people, just as guns manufactured by the armament firms of Great Britain and sold to the Turks prior to the last war were afterwards turned upon British and Australian soldiers. The Government’s attitude on this subject is totally inconsistent. In one breath, it declares that iron ore must not be exported because it would deplete our own supplies ; and in the next breath it says that a certain monopoly may export pig iron. I strongly object to a huge commercial enterprise, which has paid tens of thousands of pounds into the party funds of the United Australia party and the Country party, and which at election time provides motor cars for United Australia party and Country party candidates to tour through their electorates, being allowed to recoup itself for expenses so incurred by the sale of pig iron to foreign countries. I believe that it is only because this particular company supports the Government parties financially it has been granted permission to export pig iron.

The budget is, I suppose, really the foundation of the economy of the nation. Before proceeding to state my own views on the provisions of the budget now before us, I wish to refer to some loose phrases used by the honorable member for Warringah (Mr. Spender) in his speech a few days ago. The honorable gentleman punctuated his utterance with such phrases as “scientific balance”, “ scientific financial policy “, “ scientific government “ and the like. He read the committee a very interesting lecture on the necessity for science in government. Let mc ask him a few questions. How does he relate a scientific balance to an individual with an income of £20,000 a year, and another on the dole; or to a citizen living in a palace or a mansion, and another living in the squalor of a tenement? How does he relate scientific government to the sending to market by a market gardener of five truck loads of goods and the subsequent payment by the same individual of £5 or £10 in agent’s fees, although he has not received a penny in return for his goods? What part does science play in the fact that tons of thousands of little children in this country are suffering from malnutrition and rickets because they cannot get sufficient milk and fruit although thousands of gallons of milk are fed to hogs every week, and tons of fruit are allowed to rot under the trees in our orchards? How can the honorable gentleman expect that these unfortunate children will ever grow to be strong and virile citizens of this country, and desirable parents of a future generation? Tens of thousands of children in our industrial areas are thirsting for milk and hungering for fruit, but their fathers cannot earn enough money to provide them with the bare necessaries of life. I. ask the honorable gentleman also how it is that, although science has developed powerful and wonderful machinery for use in industry, which permits a given number of workers to manufacture a thousandfold more goods in a given time than their forbears were able to do 1.00 years ago, tens of thousands of workers in Australia to-day are hungry and cold through unemployment, and live in habitations not fit for animals? If the honorable member had a real desire to apply scientific principles in national affairs, ho would ally himself with the members of the Labour party, and with other organizations throughout this country which are striving for the adoption of scientific methods to control distribution as well as production. The science that has evolved the aeroplane that soars through the sky, the submarine that passes through the depths of the sea, the wireless and a thousand and one other inventions, is capable, if rightly directed, of controlling the means of production and distribution in this country and in others so that no human being need be hungry, or workless, or without shelter. In short, I ask the honorable member for Warringah if he will scientifically balance against the squalor that breeds vice and crime and sickness the wallowing wealth that parades itself before poverty and unemployment, until, suffering from a jaded palate, it indulges in the abominations of which we hear from time to time. The whole crazy system reminds me of the madman who thought he was a grain of corn, .and ran away when he saw a fowl, lest he bo swallowed. The crowning absurdity is that all the evils and tragedies in our national life arise, not because nature is niggardly, not because we cannot produce enough, but because the storehouses are too full, because, in fact, we produce too much. In the native state, when nature is bountiful to the uncivilized savage, he lives in comfort and security. He has a good time, in other words. When nature is bountiful to civilized man, he lives in destitution. For a large section of the community, the more bountiful nature is, the greater is the destitution. . I remind the honorable member that there can be no scientific solution of this chaotic anarchy until we approach the problem in the proper way. Science would equate the resources of the country and the needs of humanity. It would first set out to measure the resources of the country, and to ascertain the requirements of the people. Then it would apply man-power, plus machinery, to the national resources, and produce for the needs of all and the profit of none. Woe to the money changer and the profit-monger when science is applied properly to government ! Science will take no cognizance of profits or individuals. It will measure the resources of the country, and say to those who govern, “ There are the means of production; go to it, and produce plenty for all “. I ask the honorable mem-bet for Warringah, and others who mouth platitudes, if this is what they mean when they speak of science in government. If it is, they should not be supporting the Government. If it is not, their words are meaningless; they arc as sounding brass and tinkling cymbals.

I was amused when the Treasurer (Mr. Casey) said to the Deputy Leader of the Opposition (3tfr. Forde) that he could not make known the requests of the State governments for loan money for public works, because that was the business of the States, and not of this Parliament. I maintain that it is the business of this Parliament, because it is this Government, acting through the Loan Council, that has withheld from the States the loan moneys needed to carry out their works programmes. It is the action of this Government, in co-operation with the conservativelycontrolled Commonwealth Bank, which prevents the States from obtaining money to be used for productive purposes and for public works. The proof of this lies in the fact that, between 1934 and 1937, the council has refused applications for £87,000,000 of loan money. It is the business of this Parliament to tell the Treasurer, and the Government, that the money needed for public works must be found.

When the Deputy Leader of the Opposition was speaking on the budget, he asked what was wrong with Australia. Somebody on the other side of the House, in an asinine way, replied “ Nothing “, and his interjection was greeted by his colleagues over there with the loud laugh that bespeaks the vacant mind. The first thing needed to put Australia right is to find a permanent solution of the unemployment problem - not Christmas buns or puddings, not a dole aft Christmas time - though, however small it might be, it would be welcome. The welfare of Australia, demands that this problem, be solved. The Minister for Works (Mr. Thorby) this afternoon said that there would always be unemployment and, like Pilate, he washed his hands of the affair. He said that we could minimize the evil, but that we must make up our minds that unemployment would be always with us. As a former leader of the honorable gentleman’s party once said, the people must get used to unemployment. “ If this Government remains in office much longer, the people will have become used to unemployment “.

The first thing to do to solve the problem is to reorganize on scientific lines the financial structure of the country, including all the ramifications of public and private finance. We need to have, spread throughout the country, tens of thousands of small, self-contained farms, occupied by men properly established on the land, and not carrying huge mortgages from the associated banks, and getting a dole every now and then from the Government so that they may pay their interest to the banks. We need properly distributed, self-reliant, and self-contained rural industries.

We need to do a great deal more in the way of water conservation. Tens of millions of pounds should be spent on this work. In the early part of this year, I travelled for thousands of miles through drought-stricken country where the sheep were dying like flies. Those that remained alive were too poor to travel a couple of miles to the river for water, and had to be taken there in trucks. Yet the river runs through all this country. I left behind the irrigation areas of Leeton, Yanco and Griffith, and within a few miles came to the stark desert, in which there was hardly a leaf left on the trees, and there was nothing but sand and desolation in all directions. Yet I had just left the place where there was such striking evidence of what irrigation could achieve. The trouble is that thousands of square miles of this country are occupied by the squattocracy, and if one asks them why they did not install an oil engine to pump water from the river and irrigate a few hundred acres on which to grow lucerne to feed their sheep, they would reply “We are squatters, not farmers “. They are too proud to farm the land. Well, if they are too proud to use’ the land, I would put them off it, and I would prosecute them for cruelty to animals if they let their sheep die of starvation when they could be so easily saved by the growing of a little lucerne.

Mr Collins:

– But the authorities are now preventing .the pumping of water.

Mr LAZZARINI:

– The honorable member is one of those of whom I have been speaking, and he is trying to find excuses for them. Restrictions have been placed on the pumping of water because there is just now a shortage of water in the Burrinjuck Dam, but, at the time of which I speak, the river was high everywhere. In every country town along the river the roses are blooming in the gardens, proving that the land will produce if only it has water, and the water is there for the taking. I have been assured that if the land is watered, it is possible to grow lucerne practically by scattering the seed on the surface of tho ground.

Mr Collins:

– I am supporting the honorable member’s case for greater water conservation.

Mr LAZZARINI:

– I am glad to hear that, and I am sorry if I misunderstood the honorable member. We should have national storehouses in which to store enough fodder to feed the stock through adverse seasons. The white man has been in this country long enough to have learned that we must look forward to periodic droughts.

Mr Anthony:

– But can the Commonwealth Government do anything about it?

Mr. LAZZARINI. It could, if we reformed our financial system. Five thousand years ago, the Egyptians taught the world how to conserve produce during the good years in order to tide them over the lean ones. Yet honorable members opposite, who prate about their sympathy for the farmers, do nothing about it. They are always ready, however, to give their assistance to those who live on the farmers, to the agents and middlemen and -financial institutions who bleed the farmers white; to those who buy fodder from the farmers in a good year at £3 a ton, and then in drought times. sell it back to them at four times that price. It is the job of the Government to see that the country is secured against the menace of drought. If storehouses were built, the farmers could put their surplus fodder into them, and be credited with the market price. Then, in a bad season, they could take the fodder out for nothing to feed their stock, on condition that a similar quantity was put back again when a better season came. That would be scientific management, of which the honorable member for Warringah had so much to say.

I come once more to the old question of national security. I am sick and tired of hearing in this House every one talking of defence, defence, defence; of war, blood and slaughter. It ois becoming nauseous. Honorable members opposite talk of creating engines of war, when there is nothing in the country with which to propel them. The Minister for Defence knows that he could not fly his aeroplanes for two days if our oil supplies from overseas were stopped. This is another thing that is wrong with Australia. This country must be made secure and independent of outside oil interests, not only in the interests of defence, but also in the interests of peaceful development.

Hundreds of thousands of additional homes are needed in Australia. We are getting back to the wretched conditions that were such a festering sore in the civilization of the Old World a century ago, when 400 people lived in one tenement house where there was only one lavatory. In the cities to-day, because of high rents and the shortage of houses, two and three families are compelled to live in one house of five or six rooms. It is only this Parliament which has the means to provide the finance needed to abolish the slums.

I was astounded to see in a speciallyprepared map of Sydney that the city’ is threatened at any time with a devastating outbreak of typhoid fever as the result of the fact that a great area of the suburbs is still unsewered. Scientists are unanimous that the only means whereby the menace of typhoid can be removed is by the sewering of cities. I daresay that if large areas of Sydney have yet to be sewered, the same is true of - Melbourne, Brisbane, and other Australian capital cities. It is definitely true of a great many country towns. That is another ill in Australia’s national life which must be remedied.

Despite all of the ills which I have cited, some honorable gentlemen opposite glibly declare that there is nothing wrong with the country. Why, we need hundreds of general hospitals. We need also dental hospitals for those who cannot afford to pay dental practitioners. Above all, we need maternity hospitals. It cannot be said there is nothing wrong with a country in which the facilities to cope with maternity cases are so limited as to require the shifting of mothers, within two days of their having given birth to infants, out of their beds in the wards into tents in order that their places may be taken by women who are approaching the great event. Honorable gentlemen opposite talk with their tongues in their checks about the need to increase the population and to increase the birth rate. It is no wonder that the women of this country refuse to populate it in view of the conditions which operate. If we want Australian women to take the risks of childbirth we must provide for them the best attention and facilities that science can provide.

We need in this country the development of smaller industries and wider distribution of production in order to check the growth of one of the worst aspects of the capitalist system, the limited liability companies. Limited liability companies are brutal manifestations of tho capitalist system; they have no soul and know no words except “ profits and dividends “. In the old clays, when two or three men formed proprietary companies for the manufacture of goods, the employees, if they were not satisfied with conditions, were able to say, “ Let us go to the boss and have this trouble rectified.” But they cannot do that to-day, because there is no boss, merely a manager who must produce profits or lose his job. He can have no personal feelings about the wrongs that are done to the employees under his charge, because he is responsible to a soulless corporation. The speed-up systems which these companies apply are soul-destroying.

Do honorable gentlemen opposite wish to develop this country for the wealth of the minority at the expense of the. health of the majority? I am led to imagine that they do, despite what the honorable member for Forrest (Mr. Prowse) has, on repeated occasions, said about the profits made by one large concern. The other day the Prime Minister (Mr. Lyons) declared that he would not allow any profiteering in the private manufacture of munitions in this country, but when I tried to pin the right honorable gentleman down to a definition of what he considered to be profiteering, whether profiteering represented a profit of 15 per cent, or 500 per cent., he evaded the question. The Government will not stop profiteering because it will not define what profiteering is.

Most honorable members, I think, are fathers, and I ask them, when they talk about the defence of this country and about the need within the next few weeks to increase the militia to 70,000 men, whether they dispute the fact that the Australian home is the unit of Australian civilization. Australia cannot be developed into a healthy nation unless that development takes place through the homes of the people. The humblest citizen is entitled to the sanctity of a home, and anything which threatens home life threatens to drag Australian civilization to the dust. That danger threatens to-day because the home life of the people is threatened by the dreadful conditions under which so many of them are compelled to subsist. In order to see the degradation of the Australian home, honorable members need go only as far as the south coast of New South Wales.

Whenever honorable gentlemen on this side emphasize the need for the Commonwealth Government to take action to remove the evils that I have cited they are told by the Government that nothing can be done because there is no money available. Nothing could be further from the truth. The honorable member for Darling Downs (Mr. Fadden) to-day spoke a lot of rot about the ratio of advances to deposits. The bankers create deposits and advances. When bankers create advances, they create deposits, and when they destroy one they destroy the other. The cash holding of the Australian associated banks to-day amounts to £20,800,000. In Australia there is only about £50,000,000 of money and £30,000,000 is always in the hands’ of the people. Yet, the private banks owe the depositors £137,922,000 oh current accounts, and £236,851,000 on fixed deposit accounts, making a total of £374,733,000, to meet which they have only £20,800,000. In savings bank accounts there is deposited a total of £230,851,000, and last year the associated banks created false, spurious, and fictitious currency to the value of £2,350,000,000 through their clearing house instrumentalities. They arranged credits with the Commonwealth Bank and lent on them at interest, but they drew not one penny of the credits that they had arranged. In doing that they usurped the function of the Commonwealth Government, which, alone is entitled to create money. As the result of all of this, the banks have a liability of £2,955,624,000, all of which has been created on the basis of cash holdings of about £20,000,000. The banks are able to create funds as they like, whereas the Commonwealth Government, which has behind it all of the assets of the nation, fears to apply a somewhat similar policy in the interests of the nation. Since the Bank of England was established in 1694, there has not been one banking institution which would not be made bankrupt if all of its depositors presented themselves for payment. The Commonwealth Government could, with facility, create a few hundreds of millions of pounds, which in a year or two would become tenfold as the result of the benefit that would be done to the people by the creation of this wealth.

Mr Anthony:

– What limit would the honorable member suggest should be placed on the creation of credit by the Government ?

Mr LAZZARINI:

– My limit would be needs. The honorable member is hinting at inflation. Any person who says that it is inflation to create wealth for use in production is two ends of an economic goat. I have said that before. The primary producers to-day labour under a debt burden of £600,000,000. Every primary producer, except those who have inherited wealth as members of the squattocracy, is being pressed to earth by the load of debt which he carries. The Commonwealth Bank could unleash credits for the use of the Commonwealth Government, which has assets of the country to back them, and, on a basis of repayment of 3^ per cent., the debt could be discharged” in 33 years,, or, on a basis of 5 per cent., in twenty years. Under the existing conditions, borrowings are repaid many times over and the principal never becomes less. The national debt of this country has been repaid at least twenty times in interest payments. The capital cost of the railway between Sydney and Melbourne has been paid at least seven times in interest charges, and the principal still remains a liability. The same argument applies to every other public work.

Mr GREGORY:
Swan

.- The honorable member for Werriwa (Mr. Lazzarini), who has just given a lengthy dissertation upon the evil conditions which he says exist in many Australian cities, also endeavoured to show the horrors of what he terms modern civilization. During the whole of his speech, in which he dealt at length with the manner in which credit can be provided, he failed to mention work. I should like to remind the honorable member that it is only by work that wealth can be produced, and that unless we produce wealth

[CO]

there can be no prosperity. His fatuous proposals to obtain something for nothing out of a printing press must end in chaos. He demands unlimited notes and credits, and admits that his limit is the sky. Where would this end? If the financial policy which he advocates so strenuously would be of any use to the Australian community, why was it not introduced some years ago when the party of which he is a supporter had a majority in this chamber ‘( I have in my possession a 5,000,000 mark note which, shortly after it was issued, was not wor th the paper on which it was printed. The honorable member also referred to the associated banks and the manner in which our banking system is conducted, but every one knows that these banks have not within their vaults sufficient money to meet the demands of all the depositors. Banks make their advances on securities and, particularly, government securities. If business were not conducted in that way, it would be utterly impossible for any banking institution to function. The depositors have confidence in the banking institutions with, which they deal, and confidence is the basis of the whole credit system. Destroy that and a collapse is inevitable.

– I am dealing with authority, and not with responsibility. If the people knew the manner in which parliamentary business is conducted in Canberra, they would hesitate to give this Parliament additional powers. Only a fortnight ago, when the Deputy Leader of the Opposition (Mr. Forde), in the absence of the Leader of the Opposition (Mr. Curtin), was speaking on the budget, there was only one Assistant Minister on the ministerial bench and there were only one or two other members on the ministerial side of the chamber. When the Commonwealth Parliament met in Melbourne, the ministerial bench was usually occupied by a number of Ministers who heard the views expressed by the representatives of the people. Then the public eye was upon them, and they did hot dare to flout the Parliament in the way they do here. Their attitude is followed by honorable members, with the result that the chamber is nearly always empty -when important questions are being debated. Honorable members speak in this chamber to bring before Ministers the views -they hold on important topics debated in this chamber, and not solely to have their speeches recorded in Hansard. When the Attorney-General wa3 speaking on the advantage to be gained by granting additional constitutional power to the Commonwealth, I informed him that in the United States of America Mr. Coolidge had pointed out the grave dangers of bureaucratic control and that because something needed to be done it was not necessary that the Commonwealth Parliament should do it. When Parliament is not in session Ministers are seldom in Canberra. It would be deplorable if many of the powers which are now enjoyed by the States were handed over to a bureaucracy. The AttorneyGeneral said that the States do not possess any sovereign powers. I remind him that sovereign powers are in the hands of the people. When the Labour party was in power, it introduced a measure to alter the Constitution in certain respects, and had that bill passed through both branches of the Legislature and been approved by the people by way of a referendum, the Constitution could have been altered whenever the Government desired, without further reference to the people. That preposterous proposal was submitted by a party whose’ slogan is, “ Trust the people “. The framers of the Constitution took particular care to provide that the Constitution could be altered only by the votes of a majority of the electors in a majority of the States. The Labour party also believes in the abolition of the Senate, which was set up to protect the rights of the people, and had their proposals been carried it could have abolished that chamber without any reference to the people. The AttorneyGeneral, who said that the Commonwealth Parliament should have the power to pass legislation to control company law, knows that it has this power, but it has not power to control the industrial work of the companies. He also suggested that this Parliament should control agriculture. “What a sorry mess would follow if this Parliament had any voice in the development of the States. The history of its failures and waste in the Northern Territory is too apparent to think twice of giving it control of agriculture. I was at Coolgardie when gold was first discovered, and I recall the activity displayed by the late Lord Forrest in making provision for the construction of roads, dams, water supplies, bores, telegraph lines, and railways. AH of this work was completed within a couple of years, and was followed shortly afterwards by the great Coolgardie water scheme. “Would such important works have been undertaken under a system of unification, with control at Canberra? I believe that the Commonwealth should have control in some matters such as wireless broadcasting and aviation, which could not be foreseen when the Constitution was framed.

I now propose to deal with the subject of defence. I am surprised to find thai Ministers who have recently visited England and the Continent have not mentioned the horrors of war and the imminent danger which exists in Europe to-day. Only a few days ago a friend in Melbourne sent my wife a letter which she had received from her daughter who lives about 25 miles distant from London. She told of the anxiety and horror, particularly amongst the women and children of England, recently occasioned by the fear that, at any moment, enemy aeroplanes might drop bombs and spread poison gas to create fear and horror among the people. She said that conditions in England were absolutely appalling, that no one knew from one hour to the next when war would break out. Those Ministers who have recently returned to Australia from abroad, with a first-hand knowledge of the anxiety which exists in the minds of all the people of Great Britain at the present time, should do everything in their power to awaken the people *of Australia to the dangers that recently confronted, and to a modified degree still confront them. In a book which he recently published, Professor Berriedale Keith, an international authority in Great Britain, referring to the attitude of Mr. Baldwin during the recent crisis, wrote -

A very important declaration of his conception of the duty of a government by Mr. Baldwin on November 12th, elaborated on November 18th, revealed to a rather astonished world the fact that he had realized two years earlier the deficiency of British defence preparations but had not attempted to remedy them because of the risk of loss of popularity and of seats at the general election. His doctrine, however, seems to have satisfied his followers and to go far to establish the principle that leaders should follow rather than seek to guide public opinion. The plausibility of this theory, if restricted to thu sphere of domestic affairs, disappears when applied to external relations, for it is in the nature of things inevitable that the public has far too little knowledge of foreign relations to be able to form any intelligent judgment as to the needs of defence, and that it is peculiarly incumbent on ministers in all matters falling within that sphere to take the initiative even at the risk of unpopularity.

In my opinion it is the duty of every honorable member in this Parliament, irrespective of the party to which he belongs, to point out in a convincing manner to the people of Australia the danger which lies ahead and the absolute necessity for defence preparedness. [Quorum formed.’] There is no desire on the part of anybody in Australia for war; we want peace all of the time; but can we hope to secure peace if we are not prepared to defend this country? What is surprising to me is the attitude of the pacifists, particularly in the Old Country, who, while they urge that no provision should be made for defence, in their so-called desire for pacificism would plunge Great Britain into a war in Spain or Czechoslovakia. Those who wait to be attacked are already half defeated. We should shudder at the prospect of placing untrained lads in the firing line to confront an enemy consisting of trained men. I have always supported compulsory military training, and to my mind it is dreadful to think that the young men of our volunteer army should ever be ex:pected to stand up against the trained troops of an enemy. Compulsory military training is of great value even in an era of peace. The trainees are subjected to a form of discipline which has a very steadying effect upon them. During the depression from which we have recently emerged, I recommended that, as a means of getting them away from the dangers of idleness in the big cities, our workless young people should be given employment half time on military training and half time on afforestation work. Anything would have been better than to allow our young men to live in idleness week after week, and in some instances, year after year, with no prospect before them of ever being able to secure employment. When a man reaches the age of 25 years without having secured a job he will not want to work for the rest of his life. My -proposal would have ensured work, wages and training with good prospects of “work later under better conditions. We have a great country and it is our duty to do everything to defend it. Bismarck said “ Only fools can talk facts away “. The real fact which we must broadcast to the people of Australia is that their first duty is to populate and develop their country. Nations, like individuals, need a fair share of the earth’s natural resources. Others are aware of the immense area of Australia and of its wonderful possibilities. This country is capable of maintaining under good conditions a population varying from . 23,000,000 to 30,000,000; but owing to the wretched policy we have adopted under which we prohibit the export of our raw materials to countries hungry for them, and impose serious restrictions upon trades and immigrants, we antagonize countries that otherwise would be friendly to us. Australia has an area equal to that of the United States of America, and whilst it could not support such a huge population as the United States of America, it could, in the opinion of every economist who has devoted his attention to the subject, safely carry a population of-from 25,000,000 to 35,000,000. In addition to the disadvantage of our meagre population, we have a declining birth-rate. In 1911, with a population of 4,450,000, the birth-rate was 122,000 ; in 1921, with a population of 5,435,000, the birth-rate had increased to 136,000; in 1931, with a further increase of the population of 1,000,000, the birth-rate declined to 118,000; in 1934, with a population of 6,700,000, the birth-rate dropped still further to 109,000; and in 1936, with a population of 6,800,000, the birth-rate was only 116,000. The birth-rate in Australia was 16 per cent, as against 42 per cent, in Russia, 31 per cent, in Japan, 25 per cent, in Italy, 18 per cent, in Germany, and 15 per cent, in Great Britain. In spite of this declining birth-rate we have adopted a White Australia policy, applied restrictive tariffs, brought in a trade diversion policy and restricted immigration. Manufacturing and Labour groups call for still further restrictions. The question which must arise in the minds of people from other countries is: “ Are Australians doing all they can to people and develop their country ? “ The answer must be “ No “: Therefore these people have a perfect right to assume that if we are not prepared to populate and develop our country we have no right to continue to hold it in face of the need of other countries for possessions to absorb their surplus populations.

I come now to the question of finance. I shall not go into great details in regard to public expenditure, but shall confine myself to -finance in respect of public administration. In my opinion this is no time for large increases of administrative expenditure. In two short years from 1936-38 administrative expenditure increased as follows: -

These figures reveal some rather alarming increases. Heaven only knows what the administrative expenditure on the Department of the Treasury will be next year when the national insurance scheme is brought into operation. I strongly urge that the National Health and Pensions Insurance Act should be suspended for, some years and drastically amended before being put in operation. I do not question the large increase of the vote for the Defence Department because I realize that it is necessary as the result of the new defence policy. In my opinion it is absolutely essential that the economic position should be exhaustively examined so that there will be no prospect of our drifting back to the depression conditions of 1930. [Quorum formed].

Che honorable member for Riverina (Mr. Nock) pointed out yesterday that our receipts from wool this year would be £6,000,000 less than last year, and from wheat £20,000,000 less; and that in consequence of droughts our flocks of sheep would be reduced by 20,000,000. He also told us that commodity costs had increased by 6 per cent., whereas export values had decreased by 20 per cent. 1 reiterate these facts because of the important bearing they have upon our whole financial structure. It is admitted that wool production is unpayable at present prices, and that in consequence of drought and low export values, the wheat industry will be a burden instead of an assistance to the Treasury. With commodity costs increasing in this way ruin seems to be facing our primary producers. I remind honorable members of the old saying : “ Whom the gods arc about to destroy they first make mad”. We seem to be facing destruction, for our whole economic policy is mad.

I fear that the general community does not appreciate the value to the country of our export trade. Iri the four years from 1925-26 to 1928-29 inclusive, our exports were valued, on the average, at £143,000,000 sterling per annum. In the next four years, from 1929-30 to 1932-33, export values declined to £105,000,000 per annum sterling; but from this amount we must deduct £54,000,000, held in gold in the bank vaults, which was sent to England to pay debts there, and not to create credits. To be accurate, therefore, we must put down the export value of our goods during those four years at £92,500,000 per annum, and it will be seen that we suffered a reduction of £202,000,000 in the four years, or an average of over £50,000,000 a year. This meant a definite and an enormous loss of spending power. In the years when our exports were valued at £143,000,000 per annum, it is probable that the spending power of the people, owing to the volume and circulation of that £143,000,000, was between £600,000,000 and £700,000,000 per annum. In the next four years, an extremely serious fall of the purchasing power of the people was caused by our average loss of £50,000,000 per annum in export values. It was this great reduction of export credits that was mainly responsible for the depression and the misery that followed. In the four years’ from 1933-34 to 1936-37, the average value of our export goods was £133,000,000. Export values showed an increase in 1936-37 to £161,500,000. In 1937-3S our exports were valued at £157,000,000. These facts indicate beyond question that the depression was caused by the reduced export values, and relieved by the increase during the last four years ; but I fear that, unless we are extraordinarily careful to keep down administration costs and other governmental charges, we shall find ourselves in the depth of another depression.

I wish now to deal for a few moments with my own fiscal policy. This is well known, although I get very little support for it in this chamber. 1 consider that it is vitally necessary that we shall do our utmost to develop trade with other countries of the world. The greatest menace to world peace is the restriction of world trade. If we could remove these trade restrictions and carry to its consummation the courageous policy now being enunciated by Mr. Cordell Hull of the United States of America, I believe we should pave the way for real peace throughout the world. There is an urgent need for greater freedom of trade than is possible at present. We must be prepared to trade. freely with other peoples, and we must not deny other nationals access, under reasonable conditions, to the raw materials that they need.

Unfortunately, the costs of production in Australia continue to increase. The honorable member for Riverina referred last night to certain extraordinary increases of duties that have resulted in consequence of the policy of this Government. I regret that the duties provided in the last tariff schedule to be tabled in this Parliament have been made effective for another six months, although the items affected have not been the subject of inquiry by the Tariff Board. The action of the Government in connexion with hinges, referred to last night by the honorable member for Riverina, constitutes one of the most deliberate frauds ever imposed on an unsuspecting public, that existing duties were increased without any reason whatsoever being given from 65 per cent, to more than 300 per cent. This emphasizes my contention that the law should be enforced and that the Minister for Trade and Customs should not be permitted to table any increase of duties unless the item has been reported upon by the Tariff Board. In this case, contrary to law, the Minister has had imposed the most extravagant and unjustified duties, apparently at the request of some interested person. It is regrettable that Parliament should have forgotten certain details in the report published by the economists who inquired into the economic effect of the Australian tariff in 1928. I direct the attention of honorable members to page 191 of that report which gives figures relating to specified items, covering salaries and wages paid in the industry, and the excess cost involved if the whole of the duty in respect of these items were added. To these details I have added another column showing the amount of duty in excess of the salaries and wages paid in the industries concerned. The table is as follows : -

It should be remembered that these figures are based on the duties in force in 1926 and 1927. Enormous increases have been made on most if not all of the items affected since that time. I hope that in the near future the Government will realize that primary production is not a huge reservoir from which limitless funds may be drawn by way of either direct or indirect taxation. Unless something is done to protect the interest of the great primary producing industries of Australia, the whole country will face ruin. At the important trade conference held in Rome recently it was unanimously agreed that the prosperity of primary industries was essential to the national welfare of any country. I therefore hope that the Government will show some consideration to this vital fact, and pay closer attention to the well-being of our primary industries than it has hitherto done.

My final words have relation to defence. I hope that the Government will not hesitate to proceed with its full defence programme. I hope, also, that the members of the Cabinet ‘who believe in compulsory military training will stand firm, even though an appeal to the country may be involved. If the people of Australia are brought to realize the urgent necessity to train our men to defend the country - and this does not mean conscription - I believe that they will give the Government a mandate to proceed with its policy. (Quorum form.ed.’]

Mr HOLLOWAY:
Melbourne Ports

– My contribution to this discussion will be brief. I do not intend to deal at all with the defence programme of the Government. I fear we have too many generals and not enough rank and file in this country, and I have no desire to enter into the competition.

I consider that the Prime Minister (Mr. Lyons) is deserving of severe blame in that the budget does not make provision for economic plannings to deal in some real way with our unemployment problem. Experts throughout the world are telling us in no uncertain voice that we are heading for another depression. The information which is coming to hand from Geneva and other centres in Europe where statistics in relation to the economic activities of all countries are collected and tabulated, cannot be interpreted in any other way. If we are heading for depression - and I believe that to be the case - this budget should have made provision for long-range plans to cope with such a situation. We should not be called noon to face another depression without adequate preparation. The honorable member for Swan (Mr. Gregory) said ho “hoped” we were not about to enter another period of depression. Hoping will not prevent us from suffering through a depression.

Mr Hutchinson:

– Economic conditions are improving in the United States of America.

Mr HOLLOWAY:

– In reply to the interjection of the honorable member for Deakin (Mr. Hutchinson), I may say that statistical information from practically every country is such as to warn us that depressed conditions are almost inevitable. The honorable member interjected while the honorable member for Werriwa (Mr. Lazzarini) was speaking, that production figures were increasing. One of the surest signs of an approaching depression is -an increase of production on one hand, and a downward tendency of employment on the other hand. If production is increasing while the wage fund of the people at large is decreasing through unemployment, depression is inescapable. Conditions now are very similar to those which obtained about ten years ago. I remember reading the report of the conference in Brussels in 1921 concerning the first plan made to bring about a period of deflation.

One of the greatest financial experts in the world, Professor August Cassel, was asked by a British delegate to the conference if he would advise the delegates whether they were, on the right track in recommending to the business people a curtailment of their activities, with the object of preventing general inflation, or .what is called inflation. Professor Cassel warned the delegates that if they began a cycle of deflation, they would cause more trouble and danger than they could possibly hope to achieve good. Once they began deflation, it would grow like a snowball. It would be impossible to stop it, and it would bring ruin and desolation to the world. The result we all know. The financiers did begin a period of deflation, and the world went through the depression which we still remember. Once the beam is tipped the wrong way, there is a general restriction of credit and a forced and artificial contraction of consumption. Values fall, and manufacturers and business people generally will buy only what they absolutely must on a falling market. When this Government came into power, with a majority in both Houses, the country was passing through the depths of the depression, but for the last five years it has enjoyed record seasons, prices have been good, and new records have been created in tax collections, including excise and customs duties. We have achieved records in this way never dreamed of twenty years ago. Yet, through all that period of comparative prosperity, the Government has made no plans to meet the possibility of a turn in the economic tide. A new budget has been brought down at a time when every one knows that a depression is beginning without any plan to meet it. The figures of our own ‘Statistician prove that, apart altogether from the reports issued periodically under the authority of Mr. Butler, at Geneva. These reports express, not his own opinions, but the considered opinions of experts sitting continuously in. Geneva throughout the year. The last report pointed out that, though’ production was still on the up grade, unemployment was increasing. The amount of money devoted to the wage fund was shrinking, though the value of the output was increasing. We in Australia are already feeling the effects of this. The Premier oi New South Wa,es. Mr. Stevens, said last week” that he was sure there were 100,000 men unemployed iu Australia. I feel certain that .there are at least 160,000 unemployed. In Victoria alone, there were 10,000 more unemployed in September than in March of this year. The index figure for employment in factories and workshops throughout the Commonwealth was 114 in September last year, but in September of this year it had fallen to 110. In March of this year, unemployment amounted to 8 per cent. In September, it had risen to 9.2, and, according to the latest information I can gather, it is now just about 10 per cent. That represents 10 per cent, of the trade unionists registered in the Federal Arbitration Court. We should remember that there are only 814,000 trade unionists in the whole of Australia. Of these, not half are registered in the Arbitration Court, while those who are registered are mostly skilled tradesmen among whom unemployment is less than among the unskilled workers. Even among this comparatively small group the number of unemployed was 9.2 per cent, in September last. According to the figures collected at the last census there are in Australia 2,200,000 wage earners. What would be the unemployment figures if all of those were registered, and particulars regarding unemployment among them were available? The percentage, would be very much higher if we included unskilled workers “ and miscellaneous workers who are not organized at all. It is impossible to get at the real position from the figures of the Commonwealth Statistician because complete information is not at his disposal. I am sure, however, that the total number is not less than 160,000, and we know that there are 60,000 unemployed in Victoria alone. Despite the fact that £2,000,000 was collected in wage tax in Victoria during the year, and that another £2,000,000 of loan money was expended on unemployment relief, the number of unemployed in that State increased by 10,000 between March and September of this year, and the number is still increasing.

The amount of wages paid per head, and the aggregate wage fund, have been gradually going down. The process has been mure rapid this year because of the effect of deflation. In 1927, the wages per head paid to workers in factories and workshops was £208, while in September of last year it was £179. In 1927, the aggregate value of the output from factories and workshops was £420,000,000. In September of last year, it was £451,000,000, an increase of £32,000,000 ; yet the wage fund declined by £1,000,000, representing a decline from 21 per cent, of the total output to 19 per cent., and the average wage per head fell from £208 to £179. How can we expect the industrial side of the economic structure to maintain itself when the figures are working out in this way? The gap between production and consumption is getting wider and wider.

The figures published in the last report from Geneva show that in the” United States of America during the last seven years the efficiency of the man-power employed has increased by 24 per cent., while in Europe it has increased by 19 per cent. The output for each man has increased, but fewer workers are employed, and the average amount paid to each worker is less.. How then can we expect any .other result than an economic depression ?

This year, the State government asked for £18,000,000 loan money to carry out their programme of public works for the year. The Loan Council refused their request, because the Commonwealth Bank and the Commonwealth Treasurer declared that it could allow them only two-thirds of the amount asked for. Thus the period of restriction and deflation was begun. When the Premiers met recently in Canberra, the conference broke down because the Commonwealth Government told the State representatives that no additions could be made to their ordinary works programme, and that no more money could be made available, and that, instead of carrying out their ordinary public works, whatever money was available to them should be devoted to works which had a definite defence value. The Commonwealth Government should grapple with unemployment, which is becoming worse, by adding to the money for public works instead of reducing it; otherwise, we shall enter upon another period of depression. Once the snowball starts, it will take stopping.

If the Government has it in mind to suggest to the people of Australia that, because of defence needs, or any other needs, they must go through another period of sacrifice, the suggestion will not only be coldly received, hut will also fall on deaf ears. Seven or eight years ago, the people were asked to go through a short period of purgatory and to accept sacrifices to meet the emergency. That short period of purgatory has developed into a period of hell. We have not dispensed with all the emergency measures that were applied. Work for sustenance, relief work and ration work, all of them measures which were taken to meet the emergency, are still with us, in spite of the fact that last- year we were supposed to experience conditions equal to the prosperity that marked the post-war period. Indeed, the position is becoming worse. Nevertheless, when the Deputy Leader of the Opposition (Mr. Forde), at the request of many State leaders, made an appeal to the House this afternoon for the Government to make the solution of the unemployment problem its fundamental task, and to provide the means whereby the unemployed would have constant work until at least the end of the year while planning their needs for next year, the Government callously gagged the discussion. The Minister” for Works (Mr. Thorby) pointed out that this year the Commonwealth Government was providing the States with more money than it provided them with last year and in the previous year. That fact is not challenged ; but it is not the question. The question is whether the money, which is being made available, is sufficient to meet the needs of the unemployed. It is not nearly enough. If it were, there would be no need for sustenance and rationed relief work. The position that we have reached to-day is that, because of increased efficiency, which results in more production with the expenditure of less energy, private enterprise can- no longer provide sufficient work to keep the people in employment. Accordingly, it is time for the governments of Australia, particularly the Commonwealth Government, which holds the purse, strings, to take over the responsibility for keeping the people in WorK. Year after year, at leneva, conventions, such as the convention for a shorter working week, and the planning “of public wonts, are entered into by the nations in conference for the betterment of conditions in industry, but, unfortunately, this country is one of the few countries that never honours its obligations in that regard. The honorable member for Denison (Mr. Mahoney) cited Sweden as a country which has planned for the future in order to avoid unemployment. The same remarks could be made in respect of all Scandinavian countries, but not in respect of Australia.

The right honorable member for North Sydney (Mr. Hughes), who has the habit of making statements aimed at benefiting the country, but is rarely in this chamber to back them up with action, said the other day that, in spite of all the war hysteria, the greatest problem which faced the Government was that of unemployment. No man has more experience of economic problems than the right honorable gentleman and, for once, I agree with him 100 per cent. In view of his statement, it would be difficult to understand why the budget contains no remarks of similar purport were it not for the fact that, when the honorable member for Capricornia (Mr. Forde) to-day endeavoured to initiate a discussion of ways in which the unemployed could be absorbed into industry and public works, the Minister for Works on behalf of the Government, shrugged his shoulders and said that later some of the unemployed might be drafted into defence works. At the recent conference of Commonwealth and State Ministers, the Premier of New South Wales, Mr. Stevens, himself a member of the United Australia party, threw down the gauntlet to the Commonwealth Government and refused to accept any proposal which would mean the mere transfer of the unemployed in his State from one governmental project to one perhaps more related to defence than the other. He demanded more money to undertake more public works. I whole-heartedly agree with his attitude. To transfer men from one job to another does not meet the problem, because it does not result in an increase of the wages bill. Indeed, the wages bill is falling, and with every fall another period of recession becomes closer. When people run to cover and refuse to buy because they expect that prices will’ fall, the num-bers of the unemployed increase, and the natural effect of this is to create still more unemployment. I warn the Government that if it determines to transfer men from works that are now in progress on a relief-work basis to defence works on the same basis, its recruiting campaign will meet with utter failure. A plan for the increase of the strength of the militia based on sweated labour must fall to the ground. I should throw my efforts behind those of the industrial organizations against it. The conditions’ which operate to-day are a disgrace to a country which could afford to give higher standards of living to the people.

Mr Mulcahy:

– The Government does not believe in higher standards of living.

Mr HOLLOWAY:

– I do not think that it does. Everybody knows that a process of deflation must inevitably mean a progressive lowering of the living standards. Every particle of evidence confirms that.

I am in full agreement with the following statement which was made in his book Planned Money, by Sir Basil Blackett, a director of the Bank of England -

In the twentieth century governments are content to use a monetary system which has so conspicuously failed in the past and is admittedly certain to present us again and again with booms and slumps and all the misery and destitution which must result therefrom . . .

This Government is content to continue with the old monetary system, winch, when the banks decide that it is worth their while to curtail expenditure and force down prices and values, as they did in 1931, in order to double the value of their money, means that we shall have another period of unemployment. Sir Basil Blackett in the preface to his book, in order not to involve his colleagues, said -

I, and I alone, am responsible for the statements contained in this book.

He suggested that a local or national currency exists for the purpose of facilitating exchange on goods, and made it quite clear that what he would call the natural currency arrangement by an independent sovereign state, such as Australia, would be a local currency owing its internal purchasing value to a management by or on behalf of the state, and so managed and controlled as to retain approximately the same purchasing power from year to year, external trade being provided for by appropriate machinery which did not disturb internal stability. He meant that a country like Australia which has a Commonwealth Bank, backed by the resources of the nation arid, as was said by the first governor of the Commonwealth Bank Board, as strong as the country, has the basis upon which the currency structure should be erected. The Government, acting in conjunction with the Treasury and those controlling our banking institutions, should regulate the flow of credit and consequently the purchasing power of the community and enable it to remain stable for a period of years. Surely we have reached the stage at which such a system could be effectively developed in the interests of Australia. We should discard the old financial system which experts have told us must result in bringing about financial booms which are always followed by slumps, and have the courage and wisdom to ignore the protests of private bankers and use our own credits to meet human need 3.

The most urgent problem with which the Government is now faced is that of unemployment. It must not close its eyes to the fact that thousands of deserving people find it impossible to get work. Surely the Government will not deny that there is an acute unemployment problem! All the information that we can get is that an extensive defence programme i3 being developed and that the unemployed will be provided with work on defence schemes. History disproves that defence works relieve unemployment. The figures are increasing in every country.

Mr Anthony:

– What is the number of unemployed in Victoria?

Mr HOLLOWAY:

– According to the State Government there were 40,000 unemployed in March, and by September the number had increased to 60,000. We do not wish to decry our own country, but some of the statements made in this chamber to-night cannot be regarded as creditable to Australia. A number of visitors were in the strangers’ gallery when the honorable member for Swan (Mr. Gregory) was saying things that did not place Australia in a very good light. The honorable member for Werriwa (Mr. Lazzarini) also spoke, quite truthfully, about the slums that exist in certain capital cities. Doubtless these visitors would be surprised, but they were hearing only the truth. I hate to have to tell truths which appear to be fouling our own nest, but if we do not put the position plainly before the Government and endeavour to assist these unfortunate people, they will be allowed to starve and rot. The statement made by the Minister for Defence that the unemployed will be able to obtain work under the Government’s defence scheme cannot be substantiated. In the last report dealing with the problem of unemployment in Great Britain, the following paragraph appears -

The course of healthy recovery has been accelerated by the injection of vast sums of public money into the world’s economic system, but this process cannot continue indefinitely. Some day, in a not very distance future, expenditure on armaments must presumably begin to be curtailed. If this should happen at a time when ordinary business is declining, the reduction of government orders, coupled with the stringency of public finances burdened by a huge debt incurred for military purposes might easily give rise to a slump of the first magnitude. It would, therefore, be folly to regard the present high level of employment as a matter for complacency. Such satisfaction as it may legitimately cause must inevitably be tempered by anxiety for the future and should be accompanied by comprehensive planning to avert the dangers with which the present situation is fraught.

Mr Brennan:

– Are we not entitled to say that we are heading towards another depression ?

Mr HUNTER:

– I deny that that is the case. Australia cannot become financially depressed as quickly as some other countries, because of the way in which it obtains its wealth. Although the complaint is often made that conditions in Australia are not so good as they might .be, it cannot be denied that they are considerably better than they were some years ago; they are certainly better than they were three years ago. One of the principal factors militating against the improvement of conditions in Australia is that it derives most of its wealth from its exportable surplus of primary products which has to be disposed of in the overseas markets. If abnormal conditions prevail in the overseas markets Australia is directly affected. Another factor which has retarded improvement in this country is the continuance on a large scale of governmental works which were commenced during the depths of the depression as a means of relieving unemployment. Whilst it is the duty of governments during bad times to start all sorts of works as a means of absorbing the unemployed, even to the employment of men chipping grass from the pave ments, when a state of comparative prosperity exists the provision of such works should correspondingly decrease. But today probably as much government work is going on as was necessary during the bad times, and if Australia is unfortunate enough to have to face another bad period it will not be possible for governments to extend their works beyond what they are now undertaking. Prosperity is reached only when the maximum work is being provided by private enterprise. When a government engages in works, even of a productive character, a big proportion of them are noninterestbearing, or, in other words, are actually losing propositions. It might have been better had governments, during good times, boldly stopped, or tapered off, their works, and, to make up for the employment lost, also boldly decreased taxation to a considerable degree, or granted taxation exemptions to new industries, making for new employment, if necessary, borrowing to make up temporary deficits. Had that been done, in a few years’ time the increased real employment would have meant a greater buoyancy in governmental revenues.

Decentralization of industry can be achieved by various methods. Relief of taxation for new industries, lower charges by local authorities for power and water, and favorable railway freights for raw materials to the factories, and for manufactured materials from the seat of manufacture, if these are away from the coast, to the point of consumption,’ are but a few of the means that might be adopted to bring about this desirable result. Planned industrial development would increase our production and permit it to be sold at a lower price. The provision of £250,000 for the Council for Scientific and Industrial Research for industrial research is to be commended.

In considering the means by which we can foster new industries, it must first be conceded that any really new industry will add to employment and to our wealth. If that industry is not started, then we are short of that gain, though existing industrial enterprises have lost nothing. New industries should be given every facility for successful establishment before invoking the Customs Department to add to their costs and difficulties. Representatives of overseas factories have told me that, had they known the trouble they would be put to in the establishment of Australian branches, they never would have invested their capital here. What happens when a new industry, say, from the United States of America, is established here? The industry may have made money in the United States, and interested people wish to extend their business here. Their plans and specifications for the articles they produce are so exact, and are in many cases protected by patent rights, that, for the sake of their good name, they dare not depart from their exact formulae. Yet, as soon as they start manufacturing in Australia, at once existing local companies try to obtain prohibitions in respect of certain elements being imported which are necessary for the new industry, because they can be manufactured by those local companies. If it is pointed out that they cannot make the goods because they are protected by patent rights, then the plea is made that they can make something that will answer the same purpose. Every endeavour to get certain essential parts admitted under by-law is subjected to delay, because the Customs Department is obliged to see if any objection is raised by local interests. This immediately makes objection sure. Sometimes objections are withdrawn, but a great deal of worry is caused, and much delay is experienced in getting on with production. Hence great losses are suffered during the initial period of these business activities. If an entirely new article is to be manufactured, the company should be asked what it can buy here immediately, and what it will need to import; then permits should be granted forthwith for the factory to import for a limited period, until the factory is firmly established. By this method no existing business would lose anything, because, before the establishment of the new business the existing firms did not have the business. They cannot claim as a loss something which they never had. And it is fairly certain that, in a short time, as soon as possible, the new business itself will try to manufacture locally all essential parts, resulting in greatly increased business all round. [Quorum farmed.] The new company will give new employment which previously had not existed, it should not matter to the country who gives the employment, so long as it is given. But the old established businesses insist that they alone shall give the employment, although they take no part in the initiation of it, and by forcing the new company to take their . product, which cannot be so good as what the new company wants, and, being a new article, cannot be so cheap, they thus add to the costs, and decrease the efficiency of the new enterprise. This, of course, delays the swing of the maximum of employment.

The customs officials must not be blamed for they simply administer the law. They do this as sympathetically to the new industry as they possibly can. But they are always liable to censure if they err on the wise side, and allow importations of essentials. They have to administer government policy. These companies are loud in their praises of the customs officials who try all they can to help them, but are confined by the policy of the Government. The Government, therefore, should adopt a new policy of- giving the utmost encouragement to new industries to get them firmly established before enforcing the law too strictly. Certainly the ‘Government should not . ask tha opinions of other businesses which naturally resent fresh firms coming in, and, perhaps, making money.

Mr Mulcahy:

– The Government is opposed to the establishment of new industries here.

Mr HUNTER:

– That is not so. If industry is to be efficient in Australia, we must allow the newest ideas to be expressed here as freely as possible. Nothing should be done to force our people to continue using the inefficient methods of the past.

I wish now to refer to the Government’s youth employment scheme under which .a grant of £400,000 has been made to the State governments. Closely allied to the necessity for new industries is the need to provide work of the proper kind for young lads as they reach working age. To make the best preparation for them it is essential that new industries shall be established. New government works are not sufficient, for, in the main, they provide only navvying work.

However, one class of young men has never been properly looked after. I refer to the men who, to-day, are approaching the age of 25 or 26 years. During the years of the depression, and after they had left school, they could not get work anywhere. I know men of that age, personally, who have never worked, except at labouring jobs and only temporarily at that. Yet they could all have been absorbed into work long ago - at least to the proportion that they would have been absorbed into work in normal circumstances - provided proper plans had been made, and followed. Of course, a percentage of men always fail in spite of all the encouragement that is given to them.

It is not within the province of the Commonwealth Government to deal with these problems, for all phases of industry come within the scope of State governments. The Commonwealth Government can only help the States by grants of money. The grant of £400,000 to which I have already referred, was made with that object in view. I feel safe in assuming that very few of the young men whom I have in mind will ever receive permanent jobs as the result of that grant, and the main thing is to find them permanent jobs. The Commonwealth has come into the picture of its own accord, and must bear its proportion of blame for not getting these lads started.

SirFrederick Stewart. - The training schools in New SouthWales are doing good work.

Mr HUNTER:

-Whilst it is necessary for the boys to be trained, it is clear that it will be so long before their “ theoretical training” is completed that people will have lost sight of the fact that the boys will need a job. Governments will get full credit for having initiated such a good so-called “plan” to place these young men, but later on, when the actual need to get a job arises, people will have forgotten all about it. As a matter of fact, these unfortunate men will not be placed in industry, and so are to be pitied. The reason for their unemployment will have been lost sight of long before they are qualified to obtain a job. As boys leave school and come on to the employ ment market year in and year out, they will get such jobs as are available at boys’ wages and will gradually become trained, ana grow up fully trained in the business; there will be little incentive, if any, for employers to employ new men at full wages - even if they are supposed to be “ trained theoretically “. If a trained man’s job is available, an apprentice is usually promoted, or a practical and trained man is advertised for who must show that he has had experience. Some incentive, therefore, must be offered to employers to give employment to those unfortunate “ old “ boys. At present, the only reason for ever giving employment to them is pity - and, as every one knows, pity is non-existent in business in these days. No business can afford to let “ pity “ interfere with efficiency. Yet even to-day some business men who are able to provide employment are willing to pay some regard to this “ lost legion “. They would give them jobs at once, and put up for a time with all the faults of rawness, provided that they were relieved of the need to pay full award rates to men, for these boys are now men with no practical experience. Should not the main object of governments be to find permanent jobs ultimately for these men and lads who are in their present position through no fault of their own?

Perhaps it will be claimed that it is against the interests of Labour to employ anybody at less than award rates. That, I contend, is not so. No untrained man is worth award rates for skilled work which he cannot do. In fact, such a man is a definite loss at almost any wage, for a time. Therefore, if the award stands in such cases, such men must remain unskilled for ever, and be condemned, for all their working days, to intermittent and temporary work. Is this desirable from the nation’s point of view? Is it fair to the lads and men themselves ?

Provision could be made to prevent unscrupulous employers from trading on a properly planned method to employ lads and men at less than award wages. Before a person is so employed, permission should be sought from the State Labour Department. Persons desiring such work could be registered, and their conditions of employment laid down, such as a sliding scale of wages, a definite period of employment of, say, two years, or less, at less than award rates. Provision should be made for an adequate training during the apprenticeship period - such men should not be used simply as cheap labourers and it should be a condition that such persons attend a technical college, either during the day in the employer’s time,’ or at night without fees. Finally, to prevent dismissals when the two-year period expired so that fresh lads could be engaged, the employers should guarantee employment after the training is completed - for a short period at any rate, if loss of business made it impossible for an employer to provide work any longer.

Safeguards to the employers should also be made. For instance, they should have the right to dismiss lads within the first three months if it were seen that they were unsuited for the work they were required to do. But no dismissal should be permitted during the apprenticeship period unless the consent of the State Labour Department had first been obtained. Alternatively, the employers could be subsidized to some small extent in the payment of the wages of such apprentices.

I have discussed this matter with both manufacturers and industrialists, and they have offered no objection to such a scheme. The chief fear of the industrialists is that if such a scheme were adopted trained men mighty be dismissed to make way for “ cheap labour “. Therefore, no one should be asked to make a place for the “ extra “ man under the scheme. But such labour is not “ cheap “ from the employer’s point of view. Similar plans, have actually been put into practice in several places to my own knowledge. Before our industrial laws became strict, I know of one man who left his profession at 22 _years of age, and engaged in an entirely new vocation at fi a week after months of unemployment. In less than six months he was in full charge, and was receiving a good salary. All the details of one case of this description are known to me intimately, for the man concerned is a relation. I could in fact mention many actual cases of men who only needed a chance to do something. Hundreds of men have been deprived of their chance through faulty plans, or an entire lack of plans, by Commonwealth and State governments, and public money is actually being wasted although the public has been led to believe that these lads are being given a chance. Honorable members receive letters every week regarding the impossibility of securing work for these “ old “ boys. Some States have adopted the idea of subsidizing employers without conditions. The objection to this is that in some cases, rare perhaps, men are dismissed to make room for the learners. Other States have made no place for actual employment in their plans which are based solely on what they consider to be “ training “. The serious objection to such “ plans “ is . that suitable “ trades and callings “ are limited by the State authorities. Farming is included and admittedly that calling offers no outlet for boys and young men who have no capital to become farmers. They are therefore condemned to remain farm workers all their lives. The trades and callings in which boys are admitted to college are limited, and so, incidentally, is the number of boys so admitted. But. the most serious objection is that in none of the callings for which the boys are presumed to be trained is any guarantee given that work will be provided after the training period has been completed. Yet the Commonwealth is subsidizing the State governments to the amount of £400,000 for this purpose. I consider that this money is being wasted. K”o scheme should be subsidized unless it includes a guarantee to provide work. The conditions governing this grant should be reviewed immediately, and the grant withdrawn unless satisfactory provision is made to ensure the employment of the youths and men who are trained.

I have said that the depression years were responsible for most of the unemployment among young men, but I regret that I must accuse the Postal Department of responsibility for many “ dead-end “ jobs among our young men, particularly in country towns. In small country centres there is usually only a stock and station agent’s office, the railway station and the post office where young men may look for other than hard manual labour. The young men usually vie with each other to secure appointment to the Postal Department, believing that once they pass the requisite examinations they are sure of permanent jobs for life. It is almost the only chance of a decent job open to boys in country towns. They are taken on temporarily as telegraph messengers, and, in some cases, are employed as temporary telephone operators. Sometimes they are kept in temporary employment for years, and if a request is made on their behalf for permanent employment, the authorities invoke the regulations, and reply that appointees to permanent positions must have passed the prescribed examination and be under sixteen years of age. I know of cases of boys who, while temporarily employed, have passed the examination, and then have been kept on as temporary employees until after they have passed the age of sixteen. In the meantime, younger lads have passed the examinations and been appointed to permanent positions. There must have been a vacancy; otherwise, the new boy would not have been employed and neither would the lad referred to have been kept on in a temporary capacity. Eventually, the temporary lad is dismissed, although he has qualified for a permanent position. I have here the record of one temporary employee supplied tome by his father. I have verified the record, and have also inquired from postal officials as to what kind of lad he is. I have been assured that he is in every way suitable for appointment to a permanent position. He passed the examination for telegraph messengers when he was under sixteen years of age, and was given temporary employment. He passed the junior mechanics’ examination, and has been regularly employed for six years by the department as telegraph messenger, telephonist, assistant and postal clerk. Thus his youth has been spent entirely in employment in the Postal Department, and he is now debarred from becoming apprenticed to any other occupation. Finally, when he is passed out, he will be incapable of doing anything but postal work.

Mr Gander:

– Why did he not obtain a permanent appointment when he passed the examination?

Mr HUNTER:

– Because the authorities said there was no “ permanent “ vacancy; but there must have been a vacancy or he would not have been temporarily employed. In such cases, if any representations are made on behalf of the temporary employee he is given the “ sack “ immediately. Here is another case. It is in the far west, in a town where there is no possibility of obtaining any other work. A grazier in this district has reported of the lad that he is very ambitious, of temperate habits, has a good education, and is of gentlemanly behaviour. This lad, in a letter, states that when he was thirteen he was in the top class at school, and when an examination for telegraph messengers was held, he was not eligible to sit: he was too young. Another boy, who was fourteen, and in a lower class, passed the examination, and got an appointment. The lad went to the Toowoomba Grammar School after obtaining a scholarship, and then returned to his own town, where he has been employed temporarily for four years. The answer of the department to complaints of this kind is no answer at all. The new Postmaster-General (Mr. Archie Cameron) should suspend the regulations until he has personally investigated every one of these cases of temporary employment. The matter is urgent, and I hope there will be no more sackings until a thorough investigation has been made. I desire again to congratulate the Government on having another surplus, but I think that those good times have gone.

Mr MULCAHY:
Lang

.- I listened with a great deal of interest to the speech of the honorable member for Maranoa (Mr. Hunter) who condemned the Government for its failure to find employment for youths. Such criticism sounds strange from an ex-Minister, because all the things of which he complained existed during the time he was a member of the Government. I agree with him that the Government did nothing, during the depression or afterwards, to train youths and young men to enable them to find careers for themselves in industry. The Government stands con demned because it made no attempt to solve the unemployment problem in the past, and it is making none now. This is illustrated by the fact that when it brought down the National Health and Pensions Insurance Bill, which was recently passed through Parliament, it contained no provision whatever for unemployment. To-day, the Minister for Works (Mr. Thorby) referred to the large number of persons in employment in Australia, and he made much of the fact that large amounts of money were being expended on public works, particularly defence works. All this may be true, but it is not enough to relieve the poverty and distress created by widespread unemployment in the cities, and in most country towns. I am informed that in the town of Wellington, in New South Wales, there are 400 persons out of work. It is not a very big town, and this is a very large number to be unemployed. It is situated in the electorate of the Minister for Works himself, and perhaps he will be able to explain later why he has done nothing to help these people.

I support what was said by the honorable member for Maranoa about the need to retain in the Postal Department the services of telegraph messengers who have served the department faithfully for two or three years.

The Government has embarked on a campaign to double the strength of the militia in order to strengthen the defences of this country. We should not neglect those who gave wonderful service to the country and the Empire generally in the last war. Many returned soldiers are under a great handicap in trying to prove that their disabilities are due to war service. I feel that the scope of the Repatriation Commission should be widened.

Sitting suspended from 12.0 midnight to 12.30 a.m. (Thursday).

Thursday, 24 November

Mr MULCAHY:

– The Government should widen the scope of the Repatriation Department’s activities, so that it may be able to do justice to those men who find difficulty in proving that their disabilities are due to war effects. In my opinion, the onus of proof should be transferred from the applicant to the commission. I have in mind the statement of Brigadier-General Lloyd, that when the Australians landed at Gallipoli very little medical assistance was available, and, to use his words, “men were lying about like rotten sheep “. When these men approach the commission they are informed that that body has full particulars of their war injuries. In the light of Brigadier-General Lloyd’s statement,I cannot see that that is so. It would be impossible for the military authorities to record all the injuries which men suffered in that campaign, either in Gallipoli or France. A few months ago a returned soldier of my acquaintance died. For sixteen years he had been treated by a medical practitioner who, although an excellent doctor, kept no record of his patients. Consequently, the widow and children of the deceased soldier find it difficult to prove that his death was due to war wounds. If the medical practitioner who treated him were alive, it would be easy to establish their claim.

Mr Scholfield:

– Not necessarily.

Mr MULCAHY:

– I have found the commission most sympathetic in such cases. In another case which came under my notice recently, I got in touch with the medical man who had treated the returned soldier from the time that he returned to Australia, and I had no difficulty in securing a pension for his widow. I have no complaint to make regarding the commission. It is doing a difficult job well, but it is hampered by the limited scope of its operation. Especially at a time like this, when the Government is seeking recruits for the militia forces, it should act generously towards those who rendered good service to the country in the past.

The honorable member for Maranoa referred to the protection of Australian industries. I have in my possession a letter from a constituent of mine who is a manufacturer of curtains. He says in his letter that curtains manufactured in Japan are landed in Australia at about 9d. a yard. The dumping of goods of that description is causing a good deal of unemployment in Australia. I ask the Government to investigate all charges of dumping, so that Australian industries which give employment to our own people , may be protected. Goods of the kind mentioned are manufactured in Japan under conditions which would not be tolerated in Australia. In some instances they are landed in Australia at less than cost price.

Mr White:

– If proof of dumping i3 forthcoming, the practice can be stopped.

Mr MULCAHY:

– I have written to the manufacturer concerned advising him to bring his complaint before the Minister. If the honorable member for Balaclava (Mr. White) were still controlling the Customs Department I have no doubt that he would see that such industries were adequately protected.

I .hope that the Government will make greater efforts than in the past to relieve unemployment. It is not sufficient for the Minister for Works to say that unemployment is less to-day than it was some time ago. Much development work requires to be done in this new country, and money for the purpose should be made available in order to relieve the distress that exists throughout the Commonwealth. During the last twelve months I have not been able to obtain for any unemployed worker even temporary employment through the Sydney office of the Public Works Department. I suggest that, instead of small works being let to contractors, they should be undertaken by the department under day labour conditions, thereby providing work for men who now are only intermittently employed. I appeal to the Government to do all that it can to relieve the distress caused by unemployment.

– At present it is one of the best areas in Australia. If the honorable member visited it, he would be surprised at the crops and stock. However, that does not mean that these settlers have no problems. They are confronted with many difficulties, and are practically fighting a lone battle without any assistance from the Council for Scientific and Industrial Research.

I propose now to deal with certain aspects of the Postal Department’s activities. I heartily support the honorable member for Maronoa (Mr. Hunter) in his criticism of the department’s treatment of its juvenile employees. I know of many sad cases of lads who have been engaged in a temporary capacity. In one particular case a promise was made, by an irresponsible person I am told, thai a lad would be made permanent, but when he reached the age of nineteen years he was put off. I suggest that, if a private concern meted out similar treatment to any of its employees, the matter would be well ventilated in the Parliament. In view of its huge revenue, the department could well afford to be more lenient towards its temporary employees.

As I have done on many occasions, I again advocate the establishment of a uniform closing hour at post offices in small country districts. I know that the department is endeavouring to do this wherever possible, but there still remain many places in which a change could be effected immediately. In most places of this kind people are obliged to wait from 12 p.m. to 2 p.m in order to ring up local business places. Considerable inconvenience would also be avoided if the evening hours were extended. Perhaps it is not generally known that people in country districts are obliged to get out to work long before 9 a.m., which is the hour at which country telephone exchanges usually open. When they return home for the mid-day lunch hour they find that the exchange is closed for that period. After opening for the whole afternoon the exchange closes again at 6 p.m. which is usually earlier than the hour at which people on the land return home in the evening. Certainly they can put through a call on paying an opening fee, but very many subscribers imagine that the charge of ls. 6d. is not the maximum, but the usual charge. This is one aspect in which life could be made much more pleasant for people in rural districts, and as it is our desire to induce as many people as possible to settle on the land, this improvement should be effected immediately. I also suggest that very many more automatic telehone exchanges should be established in country districts. The department would be amply repaid, because an increase of subscribers would mean that its revenue would correspondingly improve.

I urge the Postmaster-General (Mr. Archie Cameron) to push on with the work of establishing automatic telephone exchanges in rural districts. These facilities, I feel sure, would prove a wonderful boon to country subscribers. With the advent of automatic exchanges all of the difficulties and disputes arising in rural districts over uniform closing hours, and the extension of hours, would disappear, because subscribers would thus be enabled to use the telephone at any time. I again congratulate the Treasurer on the budget which he has presented on this occasion. I conclude by expressing the hope that the Government will give very serious attention to the defence of this country.

Mr WARD:
East Sydney

. It is remarkable how the discussion on this budget has centred in the Government’s defence policy, whilst every other question which should receive consideration by this Parliament has been entirely ignored. Some honorable members have attempted to lead the people of this country to believe that we are passing through so critical a period that all available revenue is needed for defence purposes alone, and that no finance at all can be provided for the improvement or main tenance of essential social services. Since this Government assumed office in 1932, we have had a repetition of speeches from honorable members opposite setting out what it claims to have done, and proposes to do, for the relief of unemployment. The attitude of the Government to that problem is most important, particularly at present when the Government is asking for the co-operation of the trade unions and the workers in connexion with its defence programme. My advice to any representative of the workers who may even be inclined to contemplate extending such co-operation is to note the way in which the Government refused to-day to cooperate with the Labour party in considering the problem of unemployment. After only two speeches had been delivered it applied the gag and curtailed discussion.

Just prior to the advent of this Government, certain honorable gentlemen, for various reasons which it is not permissible to mention in this discussion, but of which every honorable member is aware, deserted the Labour party and their life-long political principles, and espoused a cause which was diametrically opposed to that which they had supported throughout the whole of their previous political careers. In attempting to find some excuse for his treachery to his old political party, when visiting Tasmania a few months after he had deserted the Labour party, the Prime Minister (Mr. Lyons) was reported in the Launceston Examiner, of the 9th December, 1931, as follows: -

Mr. Lyons referred with impassioned sincerity to the unemployment situation, and condemned the Labour Government for having failed to do something for the solution of the problem. He said, “ That above anything forced me to leave the Labour party “.

In order to judge whether the right honorable gentleman’s excuse had any foundation in fact, we need only review the record of the Government which he himself has led in the intervening period, and ask ourselves whether the very problem which he declared the Labour party had failed to solve has been solved by his own Government. It might be argued, as the Minister for Works (Mr. Thorby) contended, that this Government has been responsible for the expenditure of considerable sums of money in carrying out works which have provided some employment for those seeking it. One thing which that honorable gentleman failed to indicate, however, was that the two decreases in the percentages of unemployment which have taken place this year, namely, for the quarter ended the 30th June and the quarter ended the 30th September are the only decreases which have been recorded since it was claimed an improvement of the unemployment situation had been effected. Everyone must be aware of the fact that this country is now faced with a situation practically similar to that which confronted it in 1930. It is useless for the Government to attempt to gloss over the facts in an endeavour to lead the people to believe otherwise, because I agree with honorable members who have pointed out that any fall of prices of our primary products overseas has an important bearing on the economic position of this country. We know that when those prices decline our national income decreases accordingly. Yet the Government, knowing the situation, and how the overseas funds had been depleted during the last year because of this fall of the price of primary products, made no attempt to correct the position. As a matter of fact, its actions have had quite the reverse effect.

Instead of attempting to protect Australian products in the markets of the world to whatever degree may have been possible, it tacitly consented to a trade agreement between Great Britain and the United States of America, which was diametrically opposed to the interests of certain sections of the primary producers of this country. The Leader of the Country party (Sir Earle Page), when making a statement recently with respect to the trade agreement between Great Britain and the United States of America, said that the British Government had agreed that wheat from the United States of America should now be allowed duty-free entry to the British market, but that that concession did not mean anything to the Australian wheatgrowers, and it could not be said that the Australian Government, in consenting to the concession, had given anything away.

All I can say is that if the United States of America, in its trade negotiations with Great Britain, was particularly anxious to secure this concession, it must have been of advantage to American producers. Conversely it can reasonably be said that the granting of that concession must have been disadvantageous to the Australian wheat-growers who have been accustomed to ship their wheat to the British market for disposal. The loss of the preference of 2s. a quarter which previously operated under the Ottawa Agreement, places the Australian grower at a considerable disadvantage. We must recognize that the American growers are much closer to the British market than are the Australian growers, and as a consequence their transport costs, are considerably less. Instead of endeavouring to make the people of this country believe that the American growers were on the same basis as Australian growers when the preference of 2s. a quarter granted to Australian growers under the Ottawa Agreement had been removed, the Government should have frankly admitted that it had tacitly agreed to a concession which gave a distinct advantage to the American growers. During the debate on the Ottawa Agreement the Minister for Commerce told us that the duty of 2s. a quarter which was applied to foreign wheat imported into Great Britain would be of considerable advantage to the Australian producers. His remarks on that subject can be perused in Hansard. It is beyond my comprehension to understand how a duty which when it was imposed in 1932 was regarded as conferring a distinct advantage to Australian producers could now, in 1938, when the Government agrees to its removal because of the making of a trade agreement between the United ‘States of America and Great Britain, be considered of no advantage to them. In my opinion the ministerial delegation which went abroad from this country failed utterly to bring back anything worthwhile. Instead they agreed that there should be a variation of an existing agreement which it had claimed previously was of distinct advantage to at least one section of the Australian primary producers. It appears to me that the members of the

Country party in this House have consideration only for the protection of whatever primary products are produced in their own electorates or in “which they are particularly interested. The right honorable member for Cowper (Sir Earle Page) has always done everything possible to protect the interests of the Australian butter producers and of those interested in the export of meat; but when it comes to a consideration of the interests of the wheat-growers, we find that he is prepared to give away almost anything so long as he can retain adequate protection for the primary industry in which he is particularly interested.

It is evident that this Government has not done what it might have done in order to prevent that considerable loss of national income which has been brought about because of the chaotic conditions which have existed in overseas markets in which Australian products have to be disposed. Honorable members opposite who are always praising Great Britain should remember that when the British authorities were recently buying huge stocks of foodstuffs to store as a reserve against an emergency, and a considerable amount of Rumanian wheat was imported into Great Britain, not one of them protested against that action although at that time the Australian wheat-growers were finding .it impossible to market their wheat at any price.

As I pointed out earlier, this Government has, in various ways during recent weeks attempted to create in this country a war hysteria. We were told first of all that the critical period was in September last. Subsequently, we were told that, due to the efforts of Mr. Chamberlain, the critical period had then passed and that Australia could enjoy at least, a breathing space; but there was no relaxing of effort on the part of this Government in expending large sums of public money on the purchase of war equipment. While the Government to-day admits that there is absolutely no limitation of funds for defence purposes, when the problem of unemployment has been raised it has always used the excuse for not attempting to solve if that it could do nothing because of the lack of the necessary funds. The Governor-General’s speech which was delivered in another place on the 23rd October, 1934, contained the following passage: -

My advisers regard with sympathy and concern the heavy unemployment which still persists and propose to give to this grave and pressing problem priority over other matters.

If the wording of that statement meant anything it meant that the Government would not consider making provision for relief in any direction until such time as it had given attention to the problem of unemployment. In endeavouring to make the Parliament and the people believe that it was doing its utmost to tackle the problem of unemployment, it appointed the Minister for Commerce specifically to deal with the matter, and in order that he might be able to devote sufficient time to it he was relieved of a considerable amount of his ministerial work. Shortly after that, a change of policy resulted in the appointment of the honorable member for Parramatta (Sir Frederick Stewart) as Parliamentary UnderSecretary for Employment. He was, however, not even permitted to answer questions in the House relating to the subject with which he was specifically appointed to deal, and so humiliated did he become at the fact that his appointment was really only a pretence, that he resigned his position.

According to the Governor-General’s speech, amongst other works to be undertaken by the new Government, as a means of providing relief for the unemployed, were the standardization of the railway gauges, further water conservation, and housing. Yet in New South Wales we find that only a few months ago a very serious water shortage occurred because of prevailing drought conditions and the inadequacy of water storage facilities. Some time ago, the New South Wales Water and Sewerage Board decided to hurry the construction of the Warragamba Dam, and engaged a large number of men who were worked in shifts extending practically the round of the clock to hasten its completion. -Only a few weeks ago, however, no less than 1,300 men engaged on the Warragamba project were sacked and only a skeleton staff was retained to demolish camps formerly used by the men. The work has not been completed and, judging by the present attitude of the department concerned, it will not be completed for many years as it is contended that no funds can be made available.

This Government has always argued that it should do everything possible to encourage the absorption of the unemployed by private enterprise. Let us look at the record of private enterprise in this respect, because honorable members opposite are always citing statistics in an attempt to show that conditions aTe much better now than they were formerly. In New South Wales to-day, unemployment has rapidly increased, and is still increasing, until it is now in the vicinity of 10 per cent.-, and it is not much consolation to those still numbered in the ranks of the unemployed in that State to say that there has been a small amount of money expended on Commonwealth works and employment provided for a few workers. The Commonwealth Year-Booh of 1937, dealing with manufacturing industries, at page 569, states-

The total value of production computed on the basis of retail prices in 1911 between 1928 and 193fi increased from £93,900,019 to £102,592.707, with less than 1,000 increase in the number of employees engaged. The value of production per employee computed on the same basis increased from £201 in 1928-29 to £228 in 1934-38. Such figures as are available disclose that this increase has been maintained since 1936.

So that, although, according to the figures in the Commonwealth Year-Booh of 1937, there had been a considerably increased value of production in those industries, all that private enterprise was able to do for the workers of this country was to provide 1,000 additional positions. Despite the fact that in 1936 private enterprise was in a much better position to provide employment than was the case in 192S, due to an increase of the value of production of each employee from £208 to £228.

Mr Anthony:

– Does not that value include the cost of production as well as of labour?

Mr WARD:

– I understand that it is the actual value of the production. Let us consider how private enterprise dealt with workers in what we might call the depression years, 1929-31. Between those years, there was a fall in the value of factory production amounting to .£129,000,000; employers were saved fuel, light, power and materials valued at £80,000,000; 111,000 employees were dismissed ; and the average adult wage was reduced from £4 ls. to £3 14s. 7d., resulting in a saving of . an additional £29,000,000. We find also that a compliant Arbitration Court, not satisfied with the sacrifices already forced upon the workers, arbitrarily reduced the then existing basic wage rates by a further 10 per cent, which resulted in a saving to the employers of an additional £6,000,000. In 1931-32, there was a further fall in the value of factory production of £9,000,000; the employers saved expenditure on fuel, light, power and materials amounting to £3,000,000, and wages amounting to £6,000,000 were also saved. But the profits remained on the same level of £56,000,000, which was equivalent to the amount paid out by way of salaries and wages. That meant that the few privileged individuals who owned and operated those manufacturing concerns were actually receiving as much as the 337,000 employees in the industry who had to maintain themselves and their dependants on their incomes. This occurred in a year considered to be the worst during a period of 40 years. Yet the profits did not decrease; only the wages of the workers employed in the industry fell.

The Minister for Commerce (Sir Earle Page), speaking in this House recently, appealed for the co-operation of all sections in connexion with the Government’s defence programme. He said some very nice things, if he and the Government meant them ; but we have been accustomed to hoar speeches of this kind, which are intended for the ears of the electors and do not ring with sincerity. The Minister said -

Here I may say that the Government considers that no policy of defence and development can be effective, or, in fact, worthy of consideration, unless it is based upon the maintenance and improvement of the living standard of an over-increasing population.

We cannot hope to develop and hold Australia without a steadily-increasing population. The policy of the Government is directed towards the creation of conditions that will ensure such a living standard as will check the fall in the birth-rate, encourage natural increase, and attract a steady flow of suitable migrants.

If this Government believes that one of the factors necessary for the adequate defence of Australia is an improvement of the living conditions of’ the’ people, why is it that since 1932, when the parties now in power assumed office, although they have enjoyed recurring surpluses in the national budget - in the aggregate these surpluses have amounted to about £15,500,000 - on no occasion has one penny been expended in improving the living conditions of the people? Those surpluses have been devoted to the reduction of taxation for the benefit of the influential and wealthy section of the people which supports this Government. No expenditure took place to improve the- housing conditions of the people ov to carry out national works.

Mr Gander:

– A great deal of public money was expended on ministerial trips abroad,

Mr WARD:

– Yes, about £74,000 was paid for that purpose, without the people being benefited to any appreciable degree. The Minister for Commerce further stated subsequently -

The provision of necessary public works as a base for a defence plan was of fundamental importance, but difficulties had been experienced in the past in finding sufficient loan money to meet all State requirements for public works.

It seems remarkable that, when the right honorable member for Yarra (Mr. Scullin) recently spoke of the necessity for unification, and for the Commonwealth Parliament to be the dominant governing authority in Australia, his speech met with the approval of some honorable members on the other side of the House. The Attorney-General (Mr. Menzies) said he. supported the proposal of the right honorable member for Yarra for unification because he believed that this Parliament should be the supreme governing authority; yet it is. generally recognized that no ministry can truly govern unless it controls the monetary policy of the country. When this Government talks of the need for the transference to the Commonwealth Parliament of certain powers now exercised by the parliaments of the States, it should be remembered that this Parliament would not exercise supreme power unless a step further was taken, and it was given authority to determine monetary policy. The Labour party is in favour of the granting of such power to the national Parliament, but the present Government is not. This is what the Treasurer (Mr. Casey) has said with regard to the powers exercised by the Commonwealth Bank Board -

Under the Commonwealth laws, monetary policy is not in the hands of the Loan Council, or of any single government, or association of -governments, but exclusively in the hands of the Bank Board.

This Government knows that, although it may be able to secure the consent of the people to the Commonwealth Parliament being made the dominant legislature, it would not actually become the supreme governing authority unless it were able to tackle the major problem of determining monetary policy.

Although honorable gentlemen opposite say that they desire no political interference with the banking institutions, in 1924, when the present Minister for Commerce “was Treasurer, he introduced political control of the Commonwealth Bank. When the board of that bank was established, men were appointed to it who represented the commercial interests, and were concerned not with the development or administration of the bank’s operations, but with the determination of its policy. In my opinion, it is wrong in principle to say that we have in Australia a democratic form of government, when wc delegate the powers of this Parliament to a nominee board which is not answerable to the people for its actions as’ are the honorable members of this Parliament. The Commonwealth Bank Board will always provide financial accommodation for the purchase of warships, aeroplanes, or guns, because the representations of vested interests who comprise the board are anxious for this country to be defended, because they want their wealth and privileges protected. Their privileges include the control and ownership of the means of production, and the power to exploit the workers, so we find that there is no shortage of funds for tho defence of those interests.

The present policy supported by the Government has not met with general approval, even among its erstwhile supporters. The Sydney Sun, on the 27th October last, stated -

Dissatisfaction with the Federal Cabinet is widespread. We find, examining the Cabinet, Ministers who are able to see half the subject, but have not an eye to the whole. For instance, Mr. Casey, answering those critics who suggest that he subordinates policy to the views of the Commonwealth Bank Board replies - by declaring sternly, “ that money has been found for defence, money is being found for defence, and money will be found for defence …. just as much and just a3 fast as it is wanted. Let me state that the Commonwealth Bank Board does not stand in the way of raising money for defence, and would be swept out of the way if it did.” Brave words indeed! They mean, if they mean anything, that Mr. Casey and the Bank Board will find money for guns and aeroplanes, and uniforms, and all the apparatus for defence. Yet when approached by the Premiers recently for money for the development of this country, the same Mr. Casey, and the same Bank Board could not find it, and asked the States to forgo works which were necessary and reproductive for defence works which produce and develop nothing. Mr. Casey, and the Bank Board, finding all the money necessary foi defence or security, a more embracing word - does not depend merely on guns and other warlike machinery. The security of the country depends upon the people behind the guns, and nothing, not even the provision of engines of war, is more important than the prosperity and efficiency of the State, since only a prosperous and efficient people can supply or organize its defences efficiently. A government which can find money for arms, yet with-hold it to the arts of peace, certainly requires a reconstruction operation to restore its vision. One of the needs of the Australian people, if we are to be secure, is an increase in population. Before we ask migrants to come here, however, and help us to develop the country and pay the taxes, it is necessary to provide work for the 100,000 men out of employment. Buying cruisers and big guns will not give that employment. It is a one-eyed policy which finds all the money necessary for these and refuses it for hydroelectric schemes, and railways, and other works, which not only give employment in Australia, but aid those industries upon which, in the main, effective defence must depend.

That shows conclusively that some of the people are beginning to realize that no defence policy will be of any avail unless the Government is prepared to do what is necessary first to provide the workers with social security and decent living conditions. When the Government appeals for the co-operation of the workers, all it talks about is the provision of more attractive drill halls. It is willing to give the workers the most up-to-date military equipment. It will supply them with .pretty uniforms, and it will appeal to their employers where they are in employment to allow them to carry out the necessary training in the employers’ time, but many of the young men who are asked to enlist in the militia forces are without employment, and, in many cases, their fathers have also been out of work for very long periods. Because of the inability of these young men to secure employment, almost entirely owing to the failure of the present Government to carry out reproductive public works, the appeal is directed to people living under slum conditions and buying adulterated foodstuffs, because they have not had sufficient’ money to enable them to purchase pure food. Similarly, they have been compelled to manage with inferior clothing. The Government appeals to their patriotism, but no appeal is made for a sacrifice on the part of the wealthy section which supports the Government. Can any member of this Government give one instance, during the present crisis, of the Government having asked for any sacri-“ fi.ee to be made by the wealthy section in order that the country may be adequately defended?

What has been the Government’s attitude to those people for whose assistance it is now appealing ? It has been responsible for repressive anti-working-class legislation to prevent people from meeting and discussing the problems which affect their industrial welfare. It has been instrumental in providing under the Crimes Act severe penalties for what are considered to be political offences, and in every possible way it- has attempted to encroach upon the liberty of the workers. It introduced the Transport Workers’ Act, which compels some workers to take out a licence before they can accept employment to enable them to obtain a livelihood. Nevertheless, it appeals to these people for co-operation in regard to its present defence programme, and with respect to the treatment meted out to the present members of the defence forces the ex-Minister for Defence (Mr. Thorby), and the Government itself, know full well that, owing to the harsh regulations affecting the naval and military forces, a form of tyranny oper- ii tes which prevents members of the forces from bringing their grievances even before the honorable members elected to represent them in this Parliament. Instant and severe penalties can be imposed on any member of the forces who approaches his elected parliamentary representative for the ventilation of a grievance on the floor of this House. Those are the conditions which exist in this country to-day. Many insanitary dwellings exist in our cities, and totally unsatisfactory housing conditions are the general rule throughout ibc nation. Yet the Government has appealed to the people who are obliged to occupy these houses to assist in its defence programme. When an appeal was made to the’ Commonwealth Government some time ago to provide funds to purchase milk for needy children in city areas, the reply was that no funds were available. In all of the States there is a lack of adequate accommodation in school buildings, and in practically every part of Australia the hospital accommodation is inadequate to’ meet needs or is out of date. Yet when the Government is asked to find money for public works of this character its only reply is, “ We must devote all our energy to providing for the defence of tho country.” in my opinion the Government is starting with its defence programme, not at the beginning, but in the middle. In effect, it is saying to the worker, “We want you to forget all that anti-Labour governments have been responsible for in the past. We ask you to start afresh. You should go into camp foi1 some days every year and attend drills regularly. During the period you are in camp, we shall pay you Ss. a day, and provide you with, meals and a suitable uniform. Of course, when you cease to he a soldier you will lose your 8s. a clay, and if you have not got a job to return to,” you will have to go back on the dole at 7s. 6d. a week”. If 8s. a day with keep is the minimum that should be paid to a soldier under military discipline, we contend that it is the minimum that should be paid to an unemployed soldier of industry. The mere fact that a man is unemployed should not disentitle him to proper food and clothing. We say to the workers of this country that they should refuse to accept the plans of the Government until the Government has made some concessions to them. We say that all repressive legislation on our statute-book in respect of the workers and the workers’ organizations should be repealed. We say, further, that the workers should be provided with decent wages and decent working conditions, and that if work is not provided for all who need it in this country, the Government should pay to those who remain unemployed sufficient to permit them to live as decent citizens. When that is done the Government may expect some response to its appeal for recruits for the army. I have outlined what I consider should be the attitude of the Labour party on this subject. Why should the workers of industry be expected to risk their lives in the defence of a country without demanding in return social justice as a reward for their services? They are not responsible for the unrest in the world to-day, or for the distrust among the nations. The workers, through their organizations, have attempted to live on the most friendly relations possible with the people of other countries. We realize that, in the final analysis, in every international conflict between imperialistic powers the workers pay the piper. That was true of the last war. When the Government required recruits for the army during those days it made all kinds of promises to the workers, but it was careful to say that the promises would be fulfilled only after the war ended. However, many workers accepted the word of the Government. Subsequently when they returned to this country they found that, although certain measures had been placed on the statute-book ostensibly for their benefit, it was impossible for them to secure the benefits alleged to have been provided. Departmental officials and others took advantage of all sorts of technicalities to deny to the returned soldiers the benefits that they expected to receive. Thousands of men who were injured during the “war. and whose health has since failed completely, are to-day in dire need because the Government has disregarded the promises that were made years ago. If honorable gentlemen opposite wish for any further evidence to justify the attitude that I have adopted in respect of this question, I direct their attention to the following paragraph, which appeared in an article published in The Harbour, an anti-Labour journal which deals with ship-building, coal-mining, and other allied interests: -

Nothing but a settled conviction that the existence of the British Empire is to be put at stake in the impending second world war that is visibly drawing near could account for such an amazing development in Great Britain’s defence policy. The statesmen responsible for this decision must be in possession of information not within the knowledge of the Parliament and peoples of the Empire up to the present . . . The ultimate clash emerges into view as a certainty when the “ field “ in this race of armaments approaches the end of the course. For the mass of the population in all the countries participating in this frightful race, poverty, suffering and hardship will be inevitable while the race is on, and the horrors of war will supervene on the horrors of the armed peace. It isa prospect that no civilized man can contemplate with equanimity.

Those sentiments were expressed, not by a Labour newspaper, but by an antiLabour journal, and, in my opinion, they completely justify the view that I have expressed concerning the attitude that the workers should adopt in respect of participation in any future imperialistic conflict. In this connexion I direct attention also to the following paragraph, which appeared in a report published this year by the Foreign Policy Association of the United States of America : -

A survey of the world armament expenditure revealed that in1938 it was £4,395,325,000 as compared with £945,925,000 in 1933, a rise of 305 per cent. . . . Virtually every industrial nation is confronted with the question of how long its national economy can stand such expenditure. For democracies the ultimate cost of unlimited armament competition may be the undermining of democracy itself. Recent history has demonstrated that huge armament expenditure leads almost inevitably to a dictatorship or government intervention.

I believe that this country will find itself in a very dangerous position if the present Government is permitted to continue its present lavish expenditure on what it calls its “defence programme”.

In order to pay for the armaments now being manufactured, the Government will eventually demand further sacrifices from the workers. Of course, it will not require sacrifices from the financial interests of this country, which really control and dictate government policy, but if the expected fall of the national income occurs, there is no doubt tha t ways and means will be devised to oblige the workers to make additional sacrifices in order that dividends may be maintained.

The attitude of the Government towards the workers was clearly expressed at the conference of Commonwealth and State Ministers held at Canberra recently, at which the representatives of the Commonwealth Government requested the State authorities to postpone certain public works which they intended to put in hand, in order to proceed with certain works which the Commonwealth described as “ urgent for defence purposes “. In order that these works might be constructed as cheaply as possible, the Commonwealth Government suggested to the Government of New South Wales, in particular, that it should transfer between 20,000 and 30,000 relief workers from certain State undertakings to defence works, and pay them, not award rates, but relief work rates. To-day, when trade unionists apply for employment on defence undertakings, they are required to resign from their trade union organization before they enter factories engaged in defence work. This condition is, of course, designed to destroy the workers’ organizations and ultimately to reduce our standards of living and dislocate working conditions generally. As I see it, reduced wages must inevitably result from such a policy. In spite of such circumstances I have outlined, this Government has had the effrontery to appeal to the workers for their cooperation in connexion with its defence programme. In my opinion, unless the Labour party and the officials of various labour organizations realize immediately the situation which confronts them, they will find themselves in a critical position. The time for labour organizations to assert themselves is now, for their power, relatively speaking, is greater now than it may be in future years; because we know that the development of armed forces in any country and the creation of a class of professional soldiers inevitably leads to a retraction of civil liberties. That has always been the experience in countries where militarism has raised its head. It is the condition that prevails in Germany to-day, and it was the condition when militarism was in control in that country at the outbreak of the last war.

The CHAIRMAN (Mr. Prowse).The honorable member’s time has expired.

Motion (by Mr. James) put -

That the honorable member have leave to continue his speech.

The committee divided. (Chairman - Mr. Prowse.)

AYES: 14

NOES: 23

Majority . . . . 9

AYES

NOES

Question so resolved in the negative.

Mr WHITE:
Balaclava

.- The hour is very late for comment upon such an important matter as the budget. Becauseit is late, I submit, with respect, that it is appropriate that a protest should be made against the procedure adopted by the Chair of making a roster of speakers. I have been here all the time, and I have seen honorable members, who were not present yesterday, get the call before me. My protest is not against the persons, but against the principle. I suggest that no list be kept, so that honorable members will be induced to remain in the chamber and work be thus expedited.

The CHAIRMAN (Mr. Prowse.)The honorable member’s statement is incorrect. The order of speakers has been strictly observed.

Mr WHITE:

– I cannot discuss the matter further with you now, sir, but later I shall submit to you facts which will support my statement.

The debate on the budget provides an opportunity either for criticizing or praising the Government. For my part, I shall criticize or praise as I consider the occasion warrants, but I hope that my criticism will be helpful. I think that members of all parties in this House were pleased to hear the statement that the Government proposes to give serious consideration to the rectification of constitutional disabilities. All of us applauded the right honorable member for Yarra (Mr. Scullin), who revived the subject in a very eloquent speech. However, the subject is not new. It was discussed at a Premiers Conference in 1933, and again in the following year a conference of Commonwealth and State Ministers was held to discuss constitutional matters. Many recommendations were made. The other day, honorable members were treated to an eloquent discourse by the Attorney-General (Mr. Menzies) who, some time ago, as a State representative, was equally eloquent on the other side. In any case, it is good to know that the matter will receive consideration, even though it be tardy. Reform is due in regard to such matters as company law, aviation, trade and commerce, the jurisdiction of the High Court, censorship of films, and control of wireless and fisheries. In 1929, a royal commission on the Constitution presented majority and minority reports, and there were many recommendations which might have been considered before now.

I suggest that the proper way to deal with this matter is not to hold a special session of Parliament at which there will be longer and brighter speeches. Eather should we have action instead of words. I. have always thought that a convention should be held of the pre-federal type, attended by the State Attorneys-General, the Federal Attorney-General, and by such veteran constitutional authorities as Sir Isaac Isaacs and Sir Robert Garran. In that way we might be able to obtain a report and recommendations in quick time on which to base a referendum. The people are tired of the dodging of responsibility by the various governments; of the State governments saying that a particular matter is a responsibility of the Commonwealth, and of the Commonwealth Government saying that the responsibility belongs to the States. The people are sick of the overlapping of the governmental functions, and of the extra cost involved, when they know that this cost can be reduced to reasonable proportions. A referendum should be held which would, we hope, have the effect of bringing the sovereign powers of the States within due proportions,, and fix the representations of the States at, say, two members for each federal seat. I believe that if a proposal of that kind were put to the people, they would accept it. I hope that there will be no further delay in this regard. I do not lay the blame on this Government in particular. Many governments have hesitated to take action on this- matter, which has now assumed greater importance than ever.

In regard to defence, however, the Government possesses full power, but, because of its indecision, and its yielding to expedients, it has lost prestige and earned much criticism. A month ago we expected to be involved in war.

Mr Brennan:

– I did not.

Mr WHITE:

– I know that the honorable member thinks that we have none but imaginary foes. That has been an obsession of his for years, but the average Australian citizen believes, just as the citizens of Austria, ‘Czechoslovakia, Abyssinia ‘ and China know, that there arc real and potential foes in the world. The development of aviation, and the return to power politics of certain countries that have made greater gains in recent months than they could hope to win by war, have made it obvious that trouble might come our way at any time. Britain and Australia may be involved in a struggle involving life or death to the individual nations and the Empire. A month ago the Government and the people would have gone to any length to avert the danger .that threatened. They would have made any sacrifice, but now that the crisis seems to have passed the attitude of the Government appears to be that we can wait for another crisis before doing anything. It has become lethargic again. Certainly the Government has taken some action, and it is spending large sums of money. I do not blame the new Minister for Defence (Mr. Street) for any of the Government’s sins of omission ob commission. His work is all before him, and I am sure that he will give a good account of himself. It has yet to be shown, however, that tha Government is sincere in its expressed desire to provide adequate defences for Australia.

Have we a full realization of where we stand in this matter? Do we realize our responsibilities, holding as we do a country of 3,000,000 square miles with a population of barely 7,000,000 people? Do we believe that we could maintain the White Australia policy if it were challenged? Do we believe that we shall be able to retain and improve our living standards, merely because all reasonable people believe that living standards should be improved? How do we propose to absorb our unemployed, and how do we propose even to hold this country if our manhood” remains untrained? Australia would be a precious prize to any country that took the risk of trying to seize it. If there were another world war we might have different friends in the line-up of nations. There is a tremendous responsibility on the Government and on the people to provide for the security of the country, and, if we fail, we shall deserve the everlasting condemnation of posterity. The responsibility is ours to-day, and- we must act. We know that mon-ey is being poured out like water. Through the Customs Department alone approximately £44,000,000, or two-thirds of our revenue, is found annually for the maintenance of social services, &c. It is proposed to expend £15,000,000 this year on defence. I would not grudge this, even if it were twice as much, provided it were being expended in such a way as to produce the best results. But what of the Army? We have a paper army of 35,000 men. I call it a paper army because it is known that only 60 per cent. of those on the strength attend camp for training. Those with any experience know that afternoon and evening parades are of infinitely less value than the continuous training which men receive in camp. The Government has embarked on a campaign to raise the militia to a strength of 70,000. We all wish it luck.

Mr Pollard:

– Let the honorable member speak for himself.

Mr Rosevear:

– No doubt a lot of people will fight for their dole tickets.

Mr WHITE:

– The majority of the men of this country will fight for their homes and their families. We may get volunteers when the bands are playing, but the difficulty will be to hold them and to get them into camp. That is the point that I make. If only 60 per cent. of the 35,000 troops now attend camp, it seems probable that only 60 per cent., or 42,000, of the 70,000 troops, if they can be obtained, will attend the camp. Does any one claim that that would be an adequate army for the defence of Australia’s huge area and enormous coastline? The Prime Minister of Great Britain, Mr.Chamberlain, a man of peace, said -

We must maintain the strength of our forces at a level commensurate with our responsibilities, and be prepared to take our part in our country’s protection. “At a level commensurate with our responsibilities ! “ Well, Great Britain, with its immense population and small territory, may be able to continue with its present system, but in Australia, with its immense territory and sparse population, it is folly to expect to continue the system of voluntary enlistment and at the same time have an adequate defence force. I know that some honorable members believe that what I advocate savours of conscription, of some form of repugnant militarism, but it is nothing of the sort. Anybody who has been associated with universal training, either in the ranks or as the holder of a commission, knows that it is a most democratic system. It is based, not on the German, Russian or French systems, but on the Swiss model. The honorable member for East Sydney (Mr. Ward) asked why the rich did not do something for defence. In universal service, the rich and poor alike give service.

Mr Pollard:

– Only a small percentage of the returned soldiers belong to that organization.

– I should not suggest a capital levy, but a super tax on companies which make enormous profits. I shall support any legislation of an equitable nature for a super tax on excessive profits. But a direct levy on capital might injure many deserving people who would not he able to afford the sacrifice.

In view of the increased striking power and mobility of mechanized forces, I believe that a small standing army should also be created. The conception of a standing army in Australia is not to-day so repugnant as it was for many years.

Mr James:

– How many soldiers would the honorable member suggest should form a standing army?

Mr WHITE:

– I should say that a mixed brigade of four battalions, with the necessary artillery and auxiliaries, to be divided between two or three of the capital cities, would be necessary.

Mr James:

– Take 200,000 men. That would solve the unemployment problem.

Mr WHITE:

– As a matter of fact, the honorable member for East Sydney stated that some unemployed men entered the militia for the sake of the pay that they receive, and the creation of a standing army would do something to reduce further the number of unemployed. Moreover, training in the army would fit many men for employment in other “walks of life at the expiry of their term of military service. The standing army would be purely a voluntary body, but it would be a mobile force to take the first shock of landings on the coast. The citizen forces, because they would be scattered about the Commonwealth, would be less mobile. Briefly my proposal for military defence is that superimposed on the voluntary militia force, and those called into camp for special training there should be a small standing army.

Those who advocate non-co-operation by Australia” in the defence of the Empire advocate a policy of national suicide, because Britain is not looking to us for assistance, whereas we may require the utmost assistance of Britain. If non-co-operation were reciprocal we should look very foolish in the event of an attack upon us. We might occupy a position similar to that of Abyssinia and China, whose cries for help were as those of people crying in the wilderness. Australia is fortunate that it is part of a great and powerful empire. Imperial unity is merely collective security. In that regard, the problem of capital ships should be settled. There are different schools of thought on the subject of naval defence. Some people suggest that cruisers . are sufficient for Australia’s needs. As one of the three Ministers who were abroad recently, I had the opportunity to discuss defence matters with service chiefs in Great Britain. As the result of those discussions, I was convinced that high naval authorities there believe that Australia should be more self-reliant in the matter of defence, particularly on the naval side. In 1914, our possession of a capital ship was sufficient to keep enemy vessels from our shores. The problem of whether we should have a capital ship in Australian waters or rely on one situated at Singapore should be settled now. If the potential enemy, which is so often referred to but never named, did contemplate a descent upon our coast, and we had in Australian waters a battleship, it would have to send here two battleships, or 25 per cent, of its capital ships to have any chance of success at sea.

The Air Force provides the most mobile and most economic striking power possible, because aeroplanes are cheap relative to the power they wield, and the damage that they can do. I believe that the Government should be more generous’ in the matter of instruction in flying, and I suggest to the new Minister for Defence (Mr. Street) that there should be closer co-operation between the Royal Australian Air Force and civil aviation. Under the Civil Air Guards scheme in Great Britain it costs only 2s. 6d. an hour for young men to learn to fly, and it is high time that the Commonwealth Government gave consideration to cheapening the costs of learning to fly in Australia. There are in Australia thousands of young men of an excellent type, who cannot afford the money to learn to fly. They cannot even afford to join assisted aero clubs. The Government, therefore, should be more generous in assisting aero clubs and the like, including gliding clubs, which exist on the miserable pittance of some £300 a year from the Commonwealth Government. I have heard the honora’ble member for Wannon (Mr. Scholfield) on several occasions ask that assistance be given to the gliding club in the western district of Victoria. Gliding is an adjunct to aviation, and is very useful training. When I was in Germany recently, I learned that air force pilots must have experience in the flying of gliders. It is considered that glider pilots make better power pilots. Anything that is calculated to assist young men to learn to fly aircraft should be taken into consideration by the Government as part of its defence programme.

I commend to the Minister for Civil Aviation (Mr. Thorby) the need to improve Australian airports. I found on my flights in Europe that the airports in the smallest towns are better equipped than those which we have in our capital cities. I consider that the airports at Mascot and Essendon are unfitted to be the airports for cities which have more than 1,000,000 inhabitants. Airports at intermediate centres, as the honorable member for Flinders (Mr. Fairbairn and other honorable gentlemen who use air transport know, do not need the same facilities and amenities as are provided at the major airports. I found in Holland and Germany that the airports were cleared of all obstructions, had great concrete runways, and were equipped with every wireless aid to flying. At Essendon there is a reservoir in the middle of the aerodrome ! It is time that the proposal to establish an aerodrome at Fisherman’s Bend, which has been the subject of dispute between the Governments of the Commonwealth and Victoria for some years, was proceeded with. Vision is needed in aviation matters. Developments in aiT transport have proceeded more rapidly than in any other kind of .transport. Before long the air services of Australia will be flying at night. Every night honorable members may see the beacon revolving on Mount Ainslie, but at present there are no aircraft to be guided by it. Shortly, however, the beacon will be of practical use to night flyers. The greatest risk of accident is at night, and the dangers at Essendon with its reservoir may increase. The Government, therefore, should seriously consider setting aside a large sum of money to provide adequate airports equipped with every facility for safe flying in the principal cities and towns of Australia.

I wish now to refer to the Council of Defence, that mysterious body of which Parliament never hears, and which Cabinet seldom sees.

Mr Rosevear:

– Is it connected with the “ inner group “ ?

Mr WHITE:

– The Council of Defence contains a number of distinguished citizens who, however, are not responsible to the- people. From time to time the council may see the Minister for Defence, the Treasurer, the Prime Minister or the Minister for External Affairs, and discuss matters appertaining to the forces. Reports are occasionally made to Cabinet, but there is no liaison between the council and the Cabinet. In my opinion, the council should frequently meet Cabinet so that questions may be asked and answered. Just before I went to England with the recent delegation Ministers discussed a number of matters with the Council of Defence, but that was my only experience, and that on request, during nearly six years as a Minister. From time to time we hear reports of what the council or the Military Board thinks regarding certain matters. It has been said publicly that the Military Board and certain other prominent defence officers believe in universal military service. As long as the Government baulks this question and adopts expedients the people will not have faith in it. There is a growing belief that Australia should be placed on a proper defence footing and its manpower trained. Within two days’ flight of Australia a nation of 400,000,000 inhabitants is being beaten to its knees by another nation with only one-fifth of its man-power. China has man-power, but not trained. The man-power of Australia needs training. We obtained this country easily, and despite the unemployment that exists, it is a paradise in comparison with most other countries.

Mr James:

– Men with empty bellies cannot be trained.

Mr WHITE:

– The honorable member should travel through continental countries to see hunger and starvation. Such conditions cannot be seen in Australia. Some honorable members believe that the recent pact signed at Munich opens up a new era of peace for the world.

Mr Pollard:

– Why not?

Mr WHITE:

– I repeat, “ Why not?” Wo all hope that the nations will learn to settle their differences amicably, as differences in the civil and industrial field are settled. As a result of the Treaty of Versailles, the League of Nations was established. After the framework was constructed the league received some severe blows from various nations which either defied it or left it. The principal nation which sponsored the league did not join it. To-day, it is a broken reed and the totalitarian governments seem to be having a good deal of their own way. The time will come, however, when the nations will return to reason. In the meantime, we must look to our defences; we must be realists, and recognize that in the present state of the world we must have properly balanced naval, military and air forces for the defence of this country. Unless we attend to these things we shall be recreant to our trust, and unworthy of our heritage.

Industry is closely related to defence; the closer the collaboration between them, and the more we build up our economic strength; the better will it be for our nation. We must be more nationally self-reliant. There has been some small criticism of the tariff. For instance, the honorable member for Riverina (Mr. Nock) criticizes the duties on galvanized iron. I point out that the last six years have witnessed the greatest expansion of secondary industries” in the history of the Commonwealth. In that period the number of factories has increased by 4,611, showing progress in every State, and indicating definitely that there is confidence on the part of investors and employers. The value of production has increased in that period from £110,000,000 to £188,000,000, whilst wages have increased from £56,000,000 to £96,000,000, thereby increasing the spending power of the Australian people, and undoubtedly benefiting the community. Perhaps the most gratifying feature of this development is that the number of employees in factories has grown from 336,000 to 545,000- the highest level in the industrial history of the Commonwealth. It could be higher, because our industrialization is still only about one-third of that of the United Kingdom. Unfortunately, there are still many unemployed to be absorbed. I believe - and my opinion is reinforced by my recent investigations in England in shipyards, work- shops and factories - that Australia is at the beginning of a new phase of industrial development. That development must not be checked. On the contrary, it should be encouraged, because our national existence depends largely on our self-reliance. Australia must be economically strong as well as militarily strong.

Mr Pollard:

– -That is the proper note to sound.

Mr WHITE:

– The two matters are related; if we neglect one of them, we may lose both. Honorable members should not be one-sided in their outlook. Defence and industry must go handinhand. In this new era of manufacture I visualize development into broader fields, such as the’ manufacture of motor cars. On this subject the public has had some doubt as to the sincerity of the Government. I earnestly believe that there is scarcely anything that Australia cannot do in the way of manufacture. Certainly, the manufacture of motor cars could begin to-morrow if we were really in earnest. In this connexion I draw attention to a report in the Australasian Manufacturer as to the uncertainty that exists in the minds of manufacturers regarding the intention of the Government. I hope that the position will be clarified at an early date.

Mr Pollard:

– It is only the Country party that stands in the way.

Mr WHITE:

– We shall see. The Australasian Manufacturer contained the following: -

In tabling the board’s report in the House of Representatives during the past week, the Minister for Customs, Mr. White, said- “The Government adheres to the policy of encouraging the establishment of an industry for the manufacture, of engines and chassis in Australia. The Government invites prospective manufacturers of engines and chassis, or parts thereof to submit their proposals, with details of the assistance required, not later than 31st March, 1939. Consideration will be given to any proposal for complete manufacture.”

That is the right spirit, and seems to indicate that the Government will not bo swerved from its purpose by the vague and inept report of the Tariff Board. This bold and courageous statement by Mr. White - who, no doubt, when he was recently abroad, inquired into the subject - appears to suggest that he has returned to the Commonwealth more convinced than ever of the wisdom of Australia’s determination to make her own motor cars in her own motor factories.

Hero it may be said that, following Mr. White’s statement, it was very disconcerting io find the Federal Treasurer, Mr. Casey, stating - in reply to a question in tho Federal Parliament - that the Government was considering the removal of the special duty of 7d. per lb. on motor chassis. Here, in other words, is a direct threat to take away the only nure means by which tlie motor car industry could be established in thi3 country. We have here, in fact, the farcical position of the Tariff Board saying one thing, Mr. White Baying another, and Mr. Casey yet another. How, in these circumstances, can manufacturers be expected to accept Mr. White’s invitation to submit definite proposals? If the Government wants definite proposals, it must itself adhere to a definite policy. if the Government departs from the principles which have led to Australia making considerable progress during recent years, it will be deserving of censure, and I shall vote against it.

Before concluding 1 desire to refer to a personal matter. Some honorable members have asked why I did not resign from the Ministry when the “inner group “ of Cabinet was first announced. I know nothing of its constitution before I was sworn in as Minister for Trade and Customs. When I was told that I was to be a member of the group I said that the principle was wrong; but I thought that as a member of the group I could protect secondary industries. I realize the importance of secondary industries in providing employment for our people and revenue for the Government. Two-thirds of the revenue of the Commonwealth is derived from customs.

Mr Gander:

– Did not the honorable member say that he resigned because the Treasurer (Mr. Casey) was placed above him.

Mr WHITE:

– No. I would not be so petty as to let such a small thing stand in the way of my duty to the nation. Although I objected to the inner Cabinet being set up at all, I was “of the opinion that if the fiscal policy was to be discussed by an inner group of which I was a member, I could look after that important phase of the national economy. But when, later, the Prime Minister told me that the Minister for Trade and Customs was not to be a member of the inner group, I was not content to pretend that I was in charge of the department, when the policy would be determined by Ministers, some of whom are opposed to principles which I believe to be fundamental. I would not agree to become merely a rubber stamp while having to accept responsibility for v/hat others -decided. I make this explanation at the request of a number of my friends.

I believe that this budget debate can do much good. Every government has to run the gauntlet of criticism and can profit by it. I exhort the Government to evolve a sound defence policy ; to return to the motives that actuated it in the past; to deal with the constitutional changes that are necessary; to develop the Northern Territory, as the very live Minister for the Interior (Mr. McEwen) wants to do; to give the aboriginal a better deal than he has had in the past by establishing a Native Affairs Branch of the department; to develop and defend the territories which are our outposts; to attend to the many progressive measures necessary to our natural advancement; and not to be unduly anxious to reach recess. It should also stimulate the development of the Commonwealth and attract to our shores desirable migrants, thus providing that increase of man-power which we so much desire.

Mr ANTHONY:
Richmond

– At this early hour of the morning, it is a pleasure and an inspiration to address such an attentive, awakened, intelligent, and, shall I say, distinguished audience. The budget papers cannot arouse a great deal of enthusiasm in the minds of members of the committee, not because of any fault of the Government or of the Treasurer (Mr. Casey), but because of the conditions under which the budget has .been framed. The actions of the Government and of “the Treasurer are regulated not by their own desires, but by overseas influences and international events which make it obligatory upon them to expend money not necessarily to benefit the community directly, but, nevertheless, for the security of the community. The problems that confront the nation are not the creation of a day, but have been developing gradually over a period, and particularly during the last vear or two, when the international situation has changed from comparative quietude to a condition in -which it has been demonstrated that if we are to preserve our security we must do as other nations are doing. I was a member of a party which visited the Small- Arms Factory at Lithgow this week, and an incident related to me by the foreman left an impression upon my mind that is worth relating. “We were inspecting a very expensive instrument used in the manufacture of machine guns, and the foreman told me that it cost £5,000. It was manufactured in Switzerland, and factory officials looked* upon it with great pride as it is the only one of its kind in the Commonwealth. When the crate in which it was packed was opened, there was a note stating that 60 of these instruments had been purchased by Japan at the same time.. This incident shows that other nations are at least as advanced as Ave are in matters of this kind. During the debate several subjects have been raised by honorable members, including defence, unemployment, banking, population, military training, and alterations of the Constitution. Many other matters have been discussed, but those I have mentioned have been the most important and are more or less co-related. I shall endeavour to show that there is close relationship between the defence and finance policies of the Commonwealth. The Government is rightly, and with the approbation of the majority of the members of this Parliament and of the people of the Commonwealth, expending a large sum of rooney to provide guns, aeroplanes, uniforms, rifles, and ammunition, to improve our naval equipment and aerodromes, and also to meet many other requirements of effective defence. The essential of defence over a long period of years is man-power. We may build aeroplanes and manufacture guns and rifles, but the problem of defence is not one of to-day alone, but of 10, 15 or even 50 years hence, and if we take a longrange view, we must concentrate our attention not only upon the defence needs of to-day but also upon the means of defending this country many years hence. Taking a long-range view, we cannot look forward to the future without some alarm.

Population and birth rate are matters not so much of numbers as of the relative distribution of these numbers. Each year we have more older people in the community and fewer younger persons to meet our defence requirements. We have to examine the demographic figures supplied by the Commonwealth Statistician to realize that we have arrived at a stage of our development when population has ceased to extend. Dr. Enid Charles, an economist, in her book entitled The Changed Structure of the Family, states that fertility in Australia has been falling since 1912, and that the population has not been reproducing itself since 1931. It is unnecessary to refer to statistics to obtain that information; it is confirmed nevertheless, by the figures supplied by the economists and statisticians. It appears quite evident, without elaborating the point, that there is little that can be done by this Government to encourage and improve the natural increase. We may as Italy did, resort to such expedients as taxing bachelors, giving preference of employment in the Public Service to married men, exempting families from taxes, and so on. In Italy, Germany, and other countries where attempts have been made to remedy the position by such means, success has - not been achieved. It would appear that we have to accept the situation as have other countries when there is a1 definite decline which cannot be arrested by natural increase. The only alternative, therefore, is migration. If we study the migration figures for many years, we find that the economic conditions in this country are reflected in the migration statistics. I have the figures from 1860, which are rather illuminating in that they show that during periods of depression there has been a falling off of migration. For instance, in 1892 and 1893, -during the bank crashes after the land boom, there was a decided decline of migration to Australia. In 1891, 26,000 migrants came to Australia, whereas in 1892 the excess of departures over arrivals .was 3,122. In 1893, the departures exceeded the arrivals by 7,300; but for eight years after the flow of migration, was into Australia. In 1902 and 1903, during the big drought, the flow was from Australia. In 1928 and for a year or two prior to the depression, there was some improvement. In 1928 the excess of arrivals was 30,000 and in 1929, 11,000. In 1930 and 1931, the excesses of departures over arrivals were 8,000 and 10,000 respectively, but within the last two or three years the flow again came this way. If we are to accept people from other parts of the world, which many consider imperative both for purposes of defence and social and economic security, migration and economic prosperity must be regarded as co-related. In that connexion I come now to the question of finance and banking practice. I believe that the attitude adopted by the State Premiers at the recent conference of Commonwealth and State Ministers is more in accord with the policy which should ‘be adopted by the Commonwealth Government. One has only to study the unemployment figures in New South Wales, the only State that publishes detailed particulars, to find that the Commonwealth Government, through the instrumentality of the Commonwealth Bank, must exert some greater influence in order to provide the necessary finance to take up the slack of unemployment which has occurred owing to a fall of the prices of our export commodities. In New South Wales, unemployment increased from 4.9 per cent, in June to 5.8 per cent. in August. The increase was not very large, but it was an indication of the trend of affairs. Much has been said in this debate concerning Australia’s contribution to the new Anglo-American trade agreement. It has been suggested that that agreement might operate in many respects to the detriment of this country. I believe, however, that the greatest security for Australia, from both economic and defence standpoints, lies in co-operation between the English-speaking peoples.

Groundless alarm is often expressed in respect of the loan responsibilities of the Commonwealth and the States. It is often imagined that, as the debt per capita increases, our difficulties increase accordingly, but a good deal depends upon the manner in which the loan funds have been expended. The budget papers re veal that of £121,000,000 of Commonwealth indebtedness, £95,000,000 is represented by solid assets. For example, £7,000,000 has been invested in war service homes,_£333,000 in Commonwealth Oil Refineries Limited, and £7,000,000 in Canberra. All of that expenditure, like that on the construction of the Grafton to Brisbane railway, is interest-earning and is not, therefore, a liability. In regard to such expenditure, this Government has no more reason to feel alarmed than has a person who incurs a debt in purchasing a home. As to the possibility of unemployment increasing - I do not care to use the terms “depression” and “ recession “, because they seriously disturb the public mind - I do not . believe that we are likely to experience difficulties similar to those which confronted this country from 1929 to 1931, because, should such a crisis return, our economists and financial experts, as the result of the experience gained in the last depression, will be better fitted to deal with it. The improved position in relation to our London funds will also help us to avoid suCh a possibility. Provided that the major portion of the expenditure is incurred in the production of assets which will be interest-earning the Government will be justified in undertaking projects with the object of absorbing the slack of employment. Such a policy is not only commendable but also absolutely necessary for our economic and social welfare.

The Government has decided to give the system of voluntary military training a further trial, and has already launched a campaign with the object of raising the present strength of our militia to 70,000. Whilst I admit that much can be said in support of the voluntary system, I am one of those who believe that some form of compulsory service would be more equitable, because it requires everyone, able to do so, to bear a fair share of responsibility in the defence of this country. Nevertheless, the Government’s scheme should receive the support of honorable members generally, particularly of those who do not favour the compulsory system. If we are to have adequate defence, we must get the required number by either one system or the other. We cannot afford to leave ourselves naked to attack, as we should have found ourselves on the 30th September last had the international crisis then existing resulted in the outbreak of hostilities. Those who do not believe in compulsory military training should do their utmost to ensure the success of the voluntary system. No doubt, as a rule, the voluntary trainee is more satisfactory than one compulsorily enlisted. However, we must look some years ahead, and should obviate the possibility of two or three years hence, of representatives of the Government having to go round the country again beating the drums and parading the streets in order to enlist more recruits. At this late hour I do not propose to detain honorable members any longer. I shall conclude by expressing the hope that the Treasurer (Mr. Casey), despite the difficult tasks with which he will be confronted during the forthcoming year, will, nevertheless, be able to carry on without finding it necessary to impose additional taxes. [Quorum formed.]

Mr FAIRBAIRN:
Flinders

– Just in case any one looking around this chamber during the last half hour might fail to realize the fact, I point out that honorable members are now dealing with the most important debate of the year. The consideration of the budget, on this occasion, is more important than usual, because of the present unsettled international situation which, members of all parties agree, renders it necessary for Australia to put its defences in order as quickly as possible. Although during recent weeks we have often been called to Canberra to sit from 3 p.m. until about 9.30 p.m., when the House has been considering unimportant measures, the business of Parliament has been so arranged that this, the most important debate of the year, involving proposals which might, perhaps, mean life or death to Australia, is being held at 4 a.m., and will be probably continued until 7 a.m. with honorable members generally somnolent. I do not blame honorable members individually, because I do not think the average human being can go on listening to speeches hour after hour right on through the night. Ever since I have been a member of this Parliament it has appeared to me that the business of Parliament has been arranged in an entirely unbusinesslike and haphazard manner. For many weeks past we have assembled here for three days a week sitting from 3. p.m. up to 9.30 p.m. and it would seem that the main idea has been to give the impression that Parliament sits so many days in the year. When minor bills are listed for consideration we sit for about four or five hours daily, yet the most important debate of the year must be carried on all through the night, ending eventually through the sheer exhaustion of honorable members. I wonder whether the councillors of countries which we have reason to fear discuss their war preparations in a similar atmosphere of lethargy, or hilarity. I suggest that they do not. Furthermore, if every other democratic country is handling its war preparations as, it would appear, from the circumstances in which this debate is taking place, we do, the death knell of democracy has been rung. I do not criticize honorable members individually. As I said before, I do not think it is humanly possible to remain alert hour after hour right through the night when the business of the Committee is conducted in this fashion. I suggest that Parliament should work the normal hours, say from 10.30 a.m. to 10.30 p.m. The objection is that that would prevent Ministers from attending to their administrative work. I have seldom seen more than one Minister at a time in this chamber during important debates, but tonight, owing to the need to keep a quorum, we have the unusual spectacle of several Ministers in the chamber.

Dealing with this budget, in which defence preparation is predominant, I offer my heartiest congratulations to the newly appointed Minister for Defence (Mr. Street). I extend to him my very best wishes in the tremendous responsibility which he is undertaking. I have no doubt he comes to this task with the advantage of greater experience in military affairs than any of his predecessors, with the exception of Sir William Glasgow.

The Minister for Defence went through the syllabus laid down for compulsory military training before the war, and during his distinguished war service was called upon to carry out most responsible duties. Since then, like many others, he has set himself, at great selfsacrifice, the task of trying to make our militia into something adequate. The great and unfair load that his predecessor was asked to carry, has been slightly reduced; nevertheless, I am still inclined to think that it is too great for any single individual to be expected to shoulder. We can, however, hope that, fortified by his extensive experience in defence matters, the load will rest more lightly on his shoulders than it would on those of another individual. My only regret about the appointment of the honorable gentleman as Minister for Defence - and his appointment is something for which I have hoped for many years - is that he is given what I consider the impossible task of making our militia into something adequate for the defence of Australia. Of that I shall say more later. I suggest to the honorable gentleman that, as soon as possible - we realize that ho cannot do it immediately - he should rectify what has been a serious omission from our defence efforts during the last couple of years, and that is, the failure of the Government to take the people of Australia into its confidence by telling them in what way an enemy, should we be at war, would seek to attack us, and in what way our defences are designed to meet the predicaments in which we might find ourselves in time of war. I feel that, if the people of Australia be told what are our dangers and how the efforts of the Government are designed to meet them, they will approve of a great deal of what is being done, but they will demand that the steps we are taking shall be complete and adequate. I take it that the Government only visualizes danger to Australia arising from raids. The Government’s theory is based on the fact that so long as Singapore is in being, and so long as Great Britain can spare a few capital ships to be based on Singapore, invasion of Australia is impossible. I agree that, granted Singapore is in being and British capital ships are stationed there, the theory of raids is a sound one; but first we must prepare for these raids and, secondly, we must see that our basis for considering raids our only problem is not swept away. The limiting of our danger from raids depends on Singapore. Therefore, we have to ask ourselves carefully whether Great Britain could, in the event of a European war, send capital ships to Singapore and the necessary troops to reinforce the garrison there: I think - and I have it on reliable authority - that it is supposed that if the United Kingdom were at war in Europe, even against a very strong combination, its naval strength is at present so great that three or four battleships could be spared for (Singapore. Granted that that is so, actual invasion of Australia might well be discounted, and raids might be our only problem; but seeing what can be done by invading and landing troops, can we convince ourselves that the United Kingdom, in time of war in Europe, would be able to reinforce the garrison at Singapore so strongly that a great Asiatic power might not be able to capture or bottle it up? That is uncertain. Therefore, I feel that one of the great preparations we must make is tobe prepared to reinforce the garrison at Singapore ourselves. That would be a contribution towards the defence of the Empire that Australia could well make. Though it would be primarily looking to its own interests, nevertheless it would be a contribution of great help to the rest of the Empire. But in modern wars, as in wars of all times, fortifications thought to be impregnable do not always prove to be so. We have to visualize the possibility of Singapore falling, and of the United Kingdom being engaged in a fight for its very existence in Europe, with the result that Australia would be thrown back on its own resources. The Minister for Defence said the other day that he could not visualize a position in which the United Kingdom could not come to our aid. I think that had the question been pressed, he would have admitted that those words did not express his considered opinion. Possibly he meant that he could not visualize the time when the United Kingdom might not be willing to come to our aid, even if able to do so. I certainly can visualize the possibility of Singapore falling, as I can also visualize the possibility of the United Kingdom not being able, for a considerable time, to come to our assistance. First, we must provide for our defence against raids; secondly, we must try to see what we can do to be ready to help in the defence of Singapore if necessary ; thirdly, we must, in the last resort, be capable of defending ourselves, when control of the sea is temporarily lost, on the shores of Australia itself. That is something which I certainly do not want to see. I have seen war in other countries and I do not want to see a war fought on the shores of Australia. Therefore, we should make every effort, in co-operation with the rest of the Empire, to make it impossible for a war to come to our shores, even if one should break out in the Pacific.

First, let us examine the Government’s proposal, in the light of the possibility of raids. The average man in the street who does not pretend to be a defence authority, but who is very much concerned about the need for defence says “What is the use of the five cruisers that we will shortly have in commission, when a potential enemy, the warlike and aggressive nation of Japan, has eight or nine capital ships and many cruisers ? “ Accepting the raid theory, and assuming Singapore in being, the answer is that no power would risk battleships so far away from their base with opposing battleships based across their lines of communication at Singapore. That, I think, with Singapore in being, is a sound premise. What we would have to provide against is the necessity for convoying our overseas trade, and of protecting our coastal shipping; because, as many people do not know, eighteen times more of our interstate trade is carried by coastal shipping than is carried by railways. Therefore, if coastal shipping should ‘be paralysed, the industrial life and the whole economy of Australia would also be paralysed. To protect our overseas trade and coastal shipping against raids our five cruisers would be invaluable. Without cruisers there would be no way by which we could protect shipping. Therefore I believe that the money which the Government is expending in this direction is being well expended. As far as the naval side is concerned, the only point in respect of which I see particular inadequacy is that, although a battle squadron might not be sent to our waters with Singapore in being, nevertheless a potential enemy might well send to these waters a couple of ships of such calibre that our cruisers would be, if not bottled up, almost completely immobilized. Of course, it might be possible for our cruisers to scatter and operate from different parts of the coastline, but their value would be reduced tremendously if ships of greater tonnage arrived in these waters. Therefore, I feel that the ideal at which we should aim, if we can possibly afford it, is the provision of two capital ships. I say two capital ships, for the simple reason that we could have two for only about 50 per cent, more than we would have to pay for one, because we would be forced to expend money not only in the purchase of the capital ship itself, but also for the purchase of ships necessary to protect it, and docks necessary to accommodate it. The provision of the money necessary for the purchase of two capital ships may be well beyond our capabilities, but what is not beyond our capacity is the provision of docking facilities for a capital ship, so that if British capital ships from Singapore, or possibly American ships, were sent to these waters we could accommodate them.

It is possible for us to have an adequate air force more easily than any other force, because the duties of the Royal Australian Air Force in time of war would not be so great as many people seem to visualize. Some people think that hecause Royal Air Force bombers have recently flown from Egypt to Darwin in little more than a day, Australia could be bombed, say, from a base situated in Japan. That idea is nonsense. Even Brisbane could not be effectively bombed by an enemy operating from a base in New Guinea. The distance at which bombing raids could be effectively carried out is very greatly exaggerated. People talk of bombing raids carried out 400 miles inside enemy country. I suggest that aviation has a considerable way to

KO before bombing raids can be success fully carried out at anything like that distance. Our Royal Australian Air Force has primarily to be designed for cooperation with our fleet in spotting raiding cruisers along our coast and to give full co-operation to our military forces in the event of a raid on our coast by an armed force. As an independent unit, its major _ duty would be to intercept such aircraft as could be despatched from enemy raiding cruisers which, after all, could only be small in number and in striking power. It should be quite easy for us to provide adequate air defences to meet that contingency. Many people’ believe that Australia must have an air force which could meet in a pitched battle one of the great air forces of the world. That is not so, because no great air force could reach these shores until Australia had been practically defeated. The despatch to Australian waters of aircraft carriers is a possibility but not a probability, because one of the most vulnerable vessels afloat is the aircraft carrier. To launch an attack on a strategical objective in Australia, an aircraft carrier would have to come within about 200 miles of its objective, and, at that distance, the Royal Australian Air Force, even in its present state, which is far from what is aimed at by the Government, would be able to destroy the aircraft carrier. Therefore our air force should aim at having adequate squadrons to co-operate with the navy and back up our military forces. It should be able to protect our capital cities and other strategical points against attack by sporadic aircraft sent here from raiding cruisers or armed merchantmen. It is impossible, however, for me to say whether I think that our present air force is approaching adequacy for this purpose, because seldom a month goes by without the public hearing some entirely different story from that already published as to what will be the number of our aircraft, or as to what strength it is possible for us to build. A few months ago we were informed that our air force was being increased to the maximum to which it was possible to increase it within the couple of years of the supplementary programme, but within about three months there was a big public outcry against the condition of the air force. We were told that the air force was to be expanded by several squadrons more than what we had been told was possible. Therefore, it is almost impossible for an individual like myself, who is in the same position as the great majority of the citizens of Australia who are not taken into the confidence of our defence leaders, and have no opportunity of knowing what is happening in regard to air defence preparations, to form an opinion.

I should- like to make a very strong protest, however, against the extraordinary conduct of the Government, fo? which the present Minister for Defence (Mr. Street) cannot be blamed, with regard to the report of Sir Edward Ellington, of whose invitation to visit Australia I entirely approve. In these matters we cannot have too good advice. To me it was staggering to learn that, our own Air Board was not aware of the invitation issued to Sir Edward Ellington until we read of it in the newspapers. This was disgracefully unfair to the Air Board, as it gave the suggestion that Sir Edward Ellington had been brought out to Australia as a sort of plain-clothes man to see whether the members of the board had been good boys. The duty set him by the Government rather seemed to bear that out. I felt that the greatest benefit resulting from his visit would not lie in any report which he might present, but in the fact that every member of the air force would have opportunities to discuss at length with him their particular departmental problems. I imagined that all the senior officers of the force would have an opportunity to discuss their work with him, and to ask whether they were going on right lines, with a view to seeing whether he could make suggestions to them in the light of experience in the United Kingdom. But I have reason to suspect that Sir Edward Ellington had no conference with the Royal Australian Air Force when he was out here, and never discussed its problems with any senior member of the force. Apparently he waa put into a room with this instruction: “There is the evidence, and upon that evidence you are to report to the Prime Minister “. He was apparently given no opportunity to be helpful in any way except by reporting to the Prime Minister, and one realizes how well fitted the Prime Minister and the ex-Minister for Defence (Mr. Thorby) are to take action on a report from a great air expert!

Almost as soon as Sir Edward Ellington had left these shores, a report was handed out to the public, and, on the strength of it, the press came out with very severe criticisms of the Chief of our Air Staff and our Air Board. It is impossible for me to say whether any pf this criticism was justified, because, interested as I am in air force matters, ho Minister for Defence has given me an opportunity to discuss them. What seems monstrously unfair is that this report, containing certain criticisms of the air force, was made public without any opportunity being given the Air Board to defend itself publicly. That happened more than two months ago, yet our Air Board has not been allowed to give to the public any comment on that adverse report. It is quite possible that a report by Sir Edward Ellington might not need to be treated confidentially, but that a report critical of the Royal Australian Air Force should be made available to the public, and that neither the Minister nor the Air Board should be given an opportunity to reply to the criticism, is unfair to the board and the public. In my opinion, this is one of the most staggering of the many signs of ineptitude in regard to national leadership in Australia at the present time. Moreover, I have reason to suspect that some inner report must have been given to the press over and above that given for publication, because I have read Sir Edward Ellington’s published report over and over again, and I cannot see in it anything on which to base the criticism made by several newspapers of the Chief of our Air Staff. If try any chance, the A.Ustralian metropolitan press was given further information behind the backs of the Australian public, it is quite a deplorable thing. Possibly some further information was not given. Perhaps the press drew on its imagination, and suggested that this further criticism was made; but the published report of Sir

Edward Ellington did contain criticism to which the Air Board should have been given the right to reply. I think that the Minister himself should have taken it upon himself to give an explanation to the public.

There was one criticism by Sir Edward Ellington which, with all due respect for his great reputation, was damnably unfair. I refer to his statement that Australian Air Force accidents over a couple of years had exceeded, in proportion to the time flown, the accidents in the Royal Air Force. That was true, but why was the Australian Air Board not given an opportunity to make known to the public that for the last six years those were the only two years in which Australia’s record was not a very great deal better in the matter of accidents than that of the Royal Air Force? In fairness to the Australian Air Board, the personnel of our air force, and the parents of the members of the air force, who may be under the impression that service in it is more dangerous than in any other air forces, which is untrue, why was that fact not made known to the public ? The number of accidents in proportion to the distance flown is supposed to be secret - that is the custom in all air forces - but although I have not been taken into the confidence of any Minister or of the Government, I have taken sufficient interest in .the matter to put two and two together, and I challenge the Minister to deny my computation that only in two of the last six years has the Royal Air Force been better in the matter of safety than the Royal Australian Air Force. I challenge him to prove that the Royal Australian Air Force over the last six years has not had a much better record in that regard than the Royal Air Force. If the Minister was not prepared to do that in fairness to the board, the board itself should have been allowed to publish a reply to the Ellington report.

The report further stated that the flying discipline in the Royal Australian Air Force leaves much to be desired. Discipline is a matter which we have to watch very closely in our services. .Unfortunately, the press declared that the Australian army was noted, not for its discipline, but for its lack of it. In the first place that is a libel on members of the

Australian Imperial Force whose discipline generally was equal to that of any troops in the line in the Great War. On the only occasion when a lack of discipline was displayed, it was due to inexperience, and so much was learnt by the Australian troops on that occasion that their discipline was never faulty again. The myth that the Australian soldier is able to fight without discipline tends to make in any -young Australians adopt a nonchalant air in carrying out naval and military duties. But what is this flaw in flying discipline reported by Sir Edward Ellington? He suggested that out of twelve accidents, three were attributable to failure in flying discipline. I could only find two which suggest any ground for that criticism. One was a case in which an officer, who was operating with infantry, and trying to give an impression of what an aircraft attack would be like in war and to provide the infantry with an opportunity to train its machine guns on him continued his dive until . he reached a point lower than that to which he was ordered to go, dived into the ground and lost his life. Possibly he was carried, away by excessive zeal, because on numerous occasions he had dived too close to the ground, but, at worst, this was only an ‘instance of excessive zeal. The next case was that of an officer who was taking part in a fly past. Each aeroplane was ordered to execute a roll at a certain point and this officer began his dive prior to the roll too early. If he had rolled at the right height, he would have executed the roll long before he reached the point at which he was ordered to do so. Therefore he continued the dive to the point at which he was ordered to do it; but by then he was loo low, and crashed into the ground. Therefore, in this case, the accident was actually due to an error of judgment rather than to lack of flying discipline. The pilot had to choose whether to roll at the height at which he had been told to do so, or at the point where he had been told to roll. Obviously, every one who wishes to be fair in his judgment in respect of this accident must put it clown to an error of judgment in deciding which of two orders should be obeyed. Both could not be obeyed. To allow the suggestion to go abroad that tho accidents were due to lack of discipline is unfair to the parents of the dead officers, in that it suggests that their lives could have been saved if proper disciplinary measures had been observed, whereas the fact is that the accidents might have happened through errors of judgment by pilots who had thousands of flying-hours of experience to their credit.

I cannot discuss the position of our air force in detail because of the mystery that surrounds it and the confused information that has been issued in respect of it. It is, in fact, impossible for any one to form a reliable estimate of whether our air force is adequate or not adequate. I simply assert that we can make it adequate more easily than we can make any other arm of the service adequate.

In regard to our military forces, 1 cannot express an opinion as optimistic even as that which I have expressed concerning our air force. I realize that a great deal has been done to provide coast defences. The public should be informed of the value of these coast defences. When people are told that so many 9.2-inch guns have been placed at certain points, they naturally ask, “What is the use of putting in 9.2-in. guns to meet attacks by ships with 12-in. guns?” I have asked the same question. But I ‘ have been assured that guns of lower calibre on land are capable of engaging successfully guns of higher calibre at sea. We may therefore assume that our coastal defences are of some use. But I do not think that our militia can be considered to be adequate in any respect, notwithstanding the self-sacrificing efforts of militia officers and trainees to become efficient. Even after the Minister for External Affairs (Mr. Hughes) has marched through our capital cities to the beating of drums and secured an enrolment of 70,000 men, and the men have been trained to the point of 100 per centefficiency, if that should be possible, the militia will still be inadequate to meet even raids, and it seems that raids are the only kind of assault that the Government can visualize. A militia of 70,000 men could not possibly meet some situations that may arise, for they would be too scattered for effective service. For instance, in perhaps half-a-dozen centres in my electorate groups of fifteen or twenty young men who deserve every encouragement are trying to train for military service. But they have no drill hall that they can use. The Treasurer told us recently that money for defence purposes would be found as quickly and in as large amounts as may be necessary. Yet when I have asked for funds to be made available to erect drill halls in my electorate so that the trainees may be efficiently organised, I have been told that the provision of money for that purpose is quite low in the list of priority. Seeing that we have many unemployed persons in the country and that drill halls are urgently needed, I can see no reason why works of this description should not be put in hand. One of the fundamental reasons why the militia, as at present visualized, must be inefficient is that men have to be trained in such small groups. Under a system of universal military training this would not be the case, for larger units would be available in every locality. I shall not go into greater detail on this subject at the moment, exceptto say that we must effect a tremendous improvement of the conditions of militia training before we can even hope for efficiency. Money must be found to provide training facilities. I fear that it will never be possible for a force of 70,000 militia men, even trained to 100 per cent. efficiency, to resist raids effectively. Obviously an enemy about to raid Australia would aim at Newcastle. If the Newcastle steel works were destroyed Australia would be almost helpless to carry on a war. I have made a rough mental calculation, and I estimate that Newcastle’s proportion of militia, under the 70,000 scheme, would be about 4,600 men. Recent experience has shown us that the Japanese have been easily able to land forces of from 30,000 to 50,000 men on the coast of China for raiding purposes. About 2,000 oriental troops may be carried on an ordinary troopship. If an enemy wished to raid Newcastle there is little doubt that it would equip a force of between 5,000 and 10,000 troops for the purpose. Newcastle’s quota of militiamen of 4,600 would be practically useless if an attack of that description were launched.

Mr Street:

– I remind the honorable member that the 70,000 men are to be only the nucleus of a first-line component of 120,000 men.

Mr FAIRBAIRN:

– I ask the Minister for Defence (Mr. Street) whether he expects his force of 70,000 to grow or to dwindle. In my opinion it will dwindle. I question whether, unless we had compulsory military training, we should be able to maintain an effective force. Numbers of men would be continually passing into reserves under compulsory training. I have inspected a militia regiment in Gippsland in my electorate recently and I suggest to honorable gentlemen, who may think that our militia is a laughable force, that they also should take an opportunity to inspect this Gippsland regiment. If they do so they will find the men equal in physique and personnel to any regiment of the Australian Imperial Force. These men are also displaying a remarkable enthusiasm. Many ex-Australian Imperial Force men are included in the personnel, but these units have no reserves. If we reverted to compulsory military training we should be able to maintain an effective force and also have in reserve, after the lapse of some years, a large number of men in every part of Australia capable of rushing to the defence of the country at short notice if they were needed. I suggest that the Government’s scheme for a militia of 70,000 would not provide a force capable of repelling attacks at vital and strategic points in this country.

I thank honorable members for the forbearance they have displayed in listening to my remarks at this early hour of the morning. I wish now to make a few observations, in conclusion, concerning Singapore. Will the Government tell us what it proposes to do to organize a proper volunteer force to reinforce Singapore if that course should ever be necessary?

The TEMPORARY CHAIRMAN (Mr Rosevear:
DALLEY, NEW SOUTH WALES

– The honorable member’s time has expired.

Mr RIORDAN:
Kennedy

– I support the protest of the honorable member for Flinders (Mr. Fairbairn) at the action of the Government in prolonging this sitting right through the night. It is unreasonable to expect honorable members who have been present since 2.30 o’clock yesterday afternoon to take a really intelligent part in this discussion at 4 o’clock this morning. This period of the session has now lasted for eight weeks, but during that time the House has sat for only three days a week - on Wednesday, Thursday and Friday of one week, and on Tuesday, Wednesday and Thursday of the following week, and so on. Yet the Government is now seeking to force the most important business that can engage our attention through the committee in a most cavalier way. It is, in effect, striving to stifle the criticism of the Opposition. This is legislation by a process of exhaustion, and the circumstances do not in any sense warrant it. I emphatically protest against the tactics of the Government. Honorable members are sent here to voice the views of people in their electorates. It is my responsibility to voice the views of the people in the north and western parts of Queeusland, but it is almost impossible for any honorable member properly to discharge his duties all through the afternoon and night, and then to be expected to discuss all the important aspects of the budget.

We are now considering the largest budget that any Treasurer has brought down in the history of the Commonwealth. In May of this year we passed a loan bill which purported to provide aU the funds needed to implement the defence programme of the Government for this financial year; yet we are now asked to make substantial additional funds available for defence purposes. In discussing the Loan Bill last May I said that money for defence purposes could be obtained in three ways - by taxation, which is the policy the Government” is now implementing; by loan moneys, which is the policy that was applied last May; or by using Australia’s great national financial institution - the Commonwealth Bank - to- provide funds. The Government is now engaged in loan conversion operations involving £70,000,000, so it tells us that it cannot, at this stage, raise further funds from the loan market for defence purposes. We all know very well that it would be abhorrent to members of the Cabinet to call upon the Commonwealth Bank to raise funds for this purpose. Yet the Labour party contends that the Commonwealth Bank is capable of providing the money we need if it were permitted to function as its founders intended it to function. A similar financial institution, modelled on our Commonwealth Bank, is functioning effectively in Sweden, and Sweden, we well know, is one of the most prosperous countries of the world. Moreover, it felt* the last depression less than did any other country for the reason that its national bank was permitted to operate in the interests of the nation. It was not called upon to make profits for private shareholders. This Government could well follow the lead of Sweden with beneficial results. The course I suggest requires only an amendment of the existing Commonwealth Bank Act so that the Commonwealth Bank could be used, as was done during the Great War, and as it was employed by Sir Denison Miller when the transcontinental railway was constructed. This, however, the Government refuses to do; it prefers to tax the people, especially the workers. Not long ago, it passed a measure which raised a howl throughout the length and breadth of this country. That was the National Health and Pensions Insurance Act, which imposed a. class tax of the worst kind. Now it is the intention of the Government to increase, not only sales tax and income tax, but practically all other taxes. We know that when it comes to a final analysis, the. workers of the community will be the hardest hit, because those persons who support this Government always pass taxes on to the working class. In anticipation of the passing of this measure, there has been an ‘ increase of the test of living, and employers have already adopted a method to offset the effects of the proposed taxation by dismissing numbers of their employees, and requiring those remaining in their employ to perform additional duties. If taxation is the method which must be adopted to finance this budget, it should he based on ability to pay and imposed upon those who have the largest incomes. The outcome of the imposition of taxation, such as that proposed, will be to lower the living standards in which we take a great deal of pride.

As many honorable members have already stated, this measure may be termed a defence budget, because much of the money to be collected is to be used to finance Australia’s defence programme. During the federal elections held a little more than twelve months ago, members of the Labour party were .branded by Government supporters as isolationists, and only a little while ago a senior member of the Cabinet ranted against the Labour party on that ground. The charge was very forcibly and capably answered, however, both inside and outside this chamber, and “I now make the charge that the Government itself is composed of isolationists of the wor3t kind, for it has isolated, not only north Queensland, but also the town and port of Darwin. Darwin is the open gateway from the East into Australia, yet it is separated from the rest of the country, and those people who are prepared to go north into the tropics of Queensland receive no encouragement or protection from this Government. Most Government members seem to think that Brisbane is in northern Queensland. Recently, I asked the former Minister for Defence (Mr. Thorby) what steps had been taken to provide defence for the undefended north. In reply, the Minister referred to defence measures that had been taken in Sydney and Melbourne. Apparently the Minister could not answer the question, or be was not sufficiently conversant with the geography of his own country to know where northern Queensland is situated. It appears to me that the defence programme of ihe Government is designed to protect Sydney and Melbourne - that is, if it has a programme at all. The Government has totally disregarded the need to expend money in the areas north of Brisbane, with which I am particularly concerned. Residents of the big cities, with their factories and palatial homes, have received greater consideration than those persons who have gone into the ‘tropics and have left behind the conveniences and comforts of the southern cities and towns, in order to carry on the work of developing this continent. They receive no consideration from the Government in regard to defence or anything else. Residents of northern and western Queensland will be required to pay their fair share of the taxes to be imposed, and they ask that they should be afforded some measure of protection. Members of the Government, and its supporters, display a lamentable lack of knowledge of conditions in northern Queensland. I doubt whether any members of the Government, with the exception of the Prime Minister (Mr. Lyons), the Minister for Health (Senator Poll) and the former Minister for Trade and Customs (Mr. White), have been in northern Queensland in recent years. They should make themselves conversant with conditions in those areas in whose interests they should be legislating. They prefer to go abroad and, wear fancy clothes rather than travel about their own country investigating the needs of the Australian people. There is a great difference between the defence requirements of northern and western Queensland and those of the southern parts of Australia, because population and industries are centralized in New South Wales and Victoria, whereas the reverse is the case in Queensland. In that State, railways penetrate 500 or 600 miles into the west from deepwater ports, and every railway passes through thriving towns, and assists in the maintenance of the great pastoral, fishing, mining and other industries. Nevertheless, primary-producing districts in that State receive no consideration from the Commonwealth Government, as is demonstrated when requests are made for the establishment of post offices or telephone services. Then the first question asked is : What will be the revenue ?

From my examination of the action taken by the Government since it promised the people in October of last year to give them a defence policy, it appears that only Sydney and Melbourne have been seriously considered. This Government has not fulfilled the promises made on the hustings, but it apparently has awakened at last to a realization of the fact that Australia is passing into an economic condition similar to that which prevailed in 1931, and is on the verge or another depression. As it has been phrased, we are passing into a period of business recession. The prices of wool, wheat and base metals have fallen, and the economic repercussions are such that unemployment and wide-spread dissatisfaction must result as they did in 1929. The Government is talking about its defence programme, and is extracting from the pockets of the workers, and others who can ill-afford to pay, the greater part of the revenue required to finance the defence scheme. It is known that certain members of the present Cabinet have exhibited profascist tendencies, and at functions in Sydney have praised what has taken place in Germany; at least, so we are told in the press. The dictators learned a lesson from the last depression. .They saw a vast army of unemployed walking the streets, representing a potential, danger to themselves. The fear of revolution drove them to find employment for this great army, and the only avenue open to them was the manufacture of armaments.

In consequence, Hitler and Mussolini embarked on a rearmament programme to create instruments of war, and, at the same time to provide employment. The prices of our primary products and base metals rose. Hitler and Mussolini were able by this method to stave off the threatening revolution, but, now that their vast military machines have been created, their creation has become a menace to world peace. If the actions of the Commonwealth Government are not designed to stave off a threatened depression why have north Queensland and the west coast of Western Australia been neglected? That question remains unanswered. The former Minister for Defence refused to answer it. Those areas, for some unknown reason, have been penalized by this Government in the allocation of expenditure on defence. No steps have been taken to defend those areas. On the contrary, the fortifications on Thursday Island were abandoned. Acid was poured down the barrels of the guns so that they could not be used by I do not know whom. The garrison was removed to Darwin and the Government said, “We shall make Darwin a great fort to support the base at Singapore “. The result is that between Darwin and Brisbane there is no coastal defence whatsoever. Until 1922, there were at Cairns, Thursday Island and Townsville naval depots, but they were closed in that year, and, despite the fact that on the hustings the Government proclaimed that the only form of defence was naval defence, no steps have been taken to reopen them. The only step that has been taken by the Commonwealth towards the strengthening of the Australian Navy has been the purchase of two second-hand cruisers from Great Britain. Great Britain used the money paid for those vessels towards the cost of two modern vessels to replace them.

During election campaigns the policy of the Labour party of air defence was ridiculed by members of the Government, who said, “ We must have a navy ; air defence is hopeless “. Despite that assertion, many naval vessels were towed off the coasts and sunk, whilst others were sold to ship-breakers. The honorable member for Kalgoorlie (Mr. Green) informed honorable members of the opinions of a naval expert to the effect that many of the vessels that have recently been put into commission in the Australian Navy would be practically useless in the event of hostilities.

Despite its assertion that air defence was not adequate for Australia, this Government has recently placed orders in the United States of America for several military aircraft, I am sorry to state, however, that the number ordered is inadequate to meet our needs, but if the Labour party was wrong in October, 1936, how is it that the Government has now urgently decided to purchase an air fleet from the United States of America? The opinion of experts is that what we need for the adequate defence of Australia is a fleet of first-class fighting machines and bombers, not AvroAnsons and other obsolete aeroplanes of the types that are now being used. The squadron leader of the Vickers- Wellesley squadron which recently made an epic flight to Australia says that the AvroAnson bombers are out of date.

Mr Street:

– Nevertheless, they are still being manufactured for the Royal Air Force.

Mr RIORDAN:

– They may be all right for training purposes, but they would be useless in war.

I shall now refer to tests that have been carried out between the navy and aeroplanes in the United States of America. Brigadier-GeneralWilliam Mitchell, who was the founder of the United States of America Air Force, was responsible for those tests. He had agitated for them for a considerable time and had stated that it was his firm belief that, if any enemy naval fleet approached to within 100 miles of the United States of America, destroyers and light cruisers, because they cannot be armoured against bombs and aerial torpedoes, would be sunk by aerial bombardment. A vessel which had belonged to Germany, but was handed to the United States of America at the end of the war, was sunk by the attacking planes during a demonstration, which proved that an adequate air fleet could soon cripple an approaching hostile navy.

Mr Street:

– Was that the 1925 test?

Mr RIORDAN:

– Yes. At the present time we have a “ great “ air fleet. We have a few Hawker Demons, a couple of Bulldogs, and a few AvroAnsons. An order has now been placed for the supply of Lockheeds. When they will be received is problematical, because the United States of America, as well as Great Britain, is expanding its force. Great Britain also has gone to the United States of America with orders for aircraft. The aircraft factory at Fisherman’s Bend is only turning out training machines. The Commonwealth Government should encourage the manufacturers of aeroplanes in Great Britain to establish plants in this country to manufacture aircraft. Most of the raw materials needed are available, and I consider that it would be only necessary to secure the co-operation of the manufacturers concerned to have a substantial aeroplane manufacturing industry developed in Australia. I feel that the manufacturers in England, who realize the danger which beset their factories because of the proximity of Great

Britain to the Continent, where there are vast air fleets, would be prepared to establish factories here. Because this country is most suitable for flying, there would be a market not only for military aircraft, but also for aircraft for civil purposes.

We should have, as was advocated by the Labour party at the last election, an air fleet equal in strength to the strength of the sea-borne air fleet of a neighbouring power. If we had such an air arm, the wish of the people of northern Queensland for the establishment of at least one air force squadron there could be gratified. The lack of defence in north Queensland is an open invitation to the power that I have in mind to attack this country. The arguments that the people in the north of Queensland use are that heed should be taken of what has happened in Spain, where aerial attacks are made on the civilian population for the purpose of destroying the morale of the people and of the army. An air squadron in the north of Queensland would be able to warn the civil population to leave the towns in the event of an attack by an enemy before they were bombarded. I think it will be agreed generally that the foreign power to which I have referred would come to Australia, not by way of Singapore, but by a route to the north-east of New Guinea. The officers and ratings on the sampans which periodically visit Australian waters know the coast better than the persons who are responsible for the admiralty charts. They know every nook and cranny of our coast and most of the navigable channels. That power first conquered Manchuria, and then, from the newly-established Manchukuo, set about the task of subjugating China. The same thing could happen in the north of Australia, which might become another Manchuria. In the districts inland from Cairns and Cooktown an invading force would find all the metals it needed, and on the coastal strip prolific crops of almost every type of agricultural product could be grown. The north of Queensland would provide a base from which an invader could set about conquering, within a short space of time, the whole of the rest of Australia. The adequate defence of Australia means more than the defence of Sydney and Melbourne. Action should be taken to defend the people who live in the remote parts of Australia to which I have referred.

Reference has been made to the nonstop flight from Egypt to Australia of three Vickers-Wellesley bombers. That flight has proved that the most successful way to repel a hostile attack is to have an air force at least as strong as that of the attacking nation. The speed of these machines was amply demonstrated in the flight from Darwin to Cloncurry. Although Avro-Anson bombers belonging to the Royal Australian Air Force which went to Darwin to welcome the VickersWellesley squadron left Darwin before the Vickers-Wellesley machines, the latter reached Cloncurry first. I plead with the Government to establish at least one air squadron in northern Queensland.

Some supporters of the Government have urged that Australia should purchase a battleship at an estimated cost of £15,000,000. The chief argument in favour of that proposal is the psychological effect on a possible enemy. That might be a good argument, but for £15,000,000 Australia could purchase 1,000 Vickers-Wellesley machines which have proved that they are equal to any other machine produced in the world. If we are to expend £15,000,000, let us get for our money the latest aircraft.

The only defence establishment in Queensland north of Brisbane was at Thursday Island. The fortifications there were removed about three years ago, and the garrison was sent to Darwin. It has been suggested that Thursday Island, and the adjoining islands need not be fortified, because, in the event of an attack on Australia, the northern passages and the openings in the Great Barrier Reef could be mined. That suggestion loses its force when we reflect that the nearest minelaying station is at Swan Island, in Victoria, 3,000 or 4,000 miles away. If the defence authorities think that it would be wise to mine the passages in the Great Barrier Reef, a mine-laying base should be established in north Queensland.

At a recent conference of Commonwealth and State Ministers, the Premier of Queensland, Mr. Forgan Smith, urged that a railway should be constructed to connect Darwin with the southern portion of the continent. Should Australia be attacked in the vicinity of Darwin, it would be impossible to send reinforcements there, because there is no railway or road connecting Darwin with the other capital cities of Australia. Those honorable members who accompanied the Minister for the Interior (Mr. McEwen) on his recent visit to the Northern Territory know the class of country which they had to traverse, and are aware that the so-called roads are only bush tracks. On behalf of hi3 State the Premier of Queensland offered to construct a railway from Dajarra to Camooweal if the Commonwealth Government would construct a railway from Darwin to Camooweal. In 1912 Sir John Forrest advocated that Darwin should be connected by rail with north-western Queensland. At that time, the Commonwealth Government offered to build a railway in Queensland at no cost to that State, but a reactionary government in Queensland rejected the proposal.

Mr Blain:

– What is the attitude of Mr. Forgan Smith to the proposal of the Commonwealth Government?

Mr RIORDAN:

– As I have said, the Queensland Government is prepared to construct a railway from Dajarra to Camooweal if the Commonwealth Government will extend the railway from Darwin to Camooweal. Cairns is connected with Brisbane by rail, but in the event of an attack on Australia, that railway line, which is 1,000 miles long, might soon be destroyed. It would require only one well-directed bomb to demolish a bridge and convert the line in the vicinity into twisted steel. In such an event, all portions of the State north of the damaged portion of the railway would be isolated from the southern portion of the continent. The railway from Townsville to Dajarra would, after passing Charters Towers, be practically safe from attack from the air. It has been suggested that the Commonwealth Government should take steps to bring Darwin into closer touch with the southern portions of the continent, and that an inland military road should be constructed by this Government between Charters

Towers and Brisbane. The honorable member for Northern Territory (Mr. Blain) knows that twenty points of rain would make the roads in the black soilcountry of Queensland impassable ; even the mechanised units of which the Defence Department is so proud, would not be able to make any progress along them. The only practicable thing to do is to link Darwin and Camooweal by rail, and to construct a military road from Brisbane to Charters Towers.

The CHAIRMAN:

– The honorable member’s time has expired.

Mr SHEEHAN:
Cook

.In his budget speech the Treasurer (Mr. Casey) said that the past year had been one of appreciable economic advance in Australia, but I have yet to be convinced that the great mass of the people of Australia made any progress during that period. I listened with profound interest and pleasure to the speech made on Friday last by the right honorable member for Yarra (Mr. Scullin) when he drew attention to anomalies in the Constitution and tbe handicaps under which the various governments of Australia are attempting to work. I also listened with interest and pleasure to the speech of the Attorney-General (Mr. Menzies) yesterday. I am indeed pleased that the Government intends to take some steps towards unification. The Constitution of Australia is divided into three main parts namely the parliament, the executive and the judiciary. Constitutional powers are vested in the parliament; executive powers are vested in the GovernorGeneral, acting with the advice of the Executive Council; whilst the judiciary powers are vested in the High Court and such State courts as are given delegated powers by the Parliament. A complete review under these headings is necessary. I do not claim to have any great knowledge of constitutional matters, but I know that, since federation, the Commonwealth has been labouring under great disability. The budget is admittedly a defence budget ; £16,000,000 is to be set aside for defence. The Government has been at great pains to defend its policy. It claims that there is a growing demand to organize Australia’s man-power, yet not long ago it considered that there was no urgent need to do so, as it then was of opinion that the man-power necessary for the defence of Australia was only about one-half of what is thought necessary to-day. Unfortunately, Australia’s economic position has not been planned to make provision for the economic security of Australian men, women and children. Provision should be made for child endowment on a nationwide basis so that Australian parents may rear families in some degree of comfort and security. The Government has paid little or no attention to the health of the people. There has not been a conference of Ministers of Health since 1926. The Government has shown a lack of understanding of the great danger which confronts the nation by placing annexes to the buildings of private firms in which armaments are to be manufactured. The installation of this machinery will involve heavy financial expenditure in buildings, machinery, &c., and there will be a general clamour for a guarantee of continuity of orders.

Mr Street:

– That is not so.

Mr SHEEHAN:

– The pressure which these armament firms are able to bring to bear on governments through members of Parliament and through ex-members of the Public Service in the employment of these firms, has largely determined government policy in other countries. Naval scares are raised by the intriguesand conspiracies of interested capitalists. The manufacture of armaments, the building of battleships and the making of guns should be done by the Government. Private firms should be eliminated and all such work should be carried out in the Government’s own workshops and factories.

I cite the testimony of Mr. Lloyd George as to the advantages of national factories for the manufacture of war materials. Speaking in the House of Commons on the 18th August, 1919, he said -

National factories were set up which checked the prices, and a shell for which the War Office, at the time the Ministry was formed, was paying 22s.6d. was reduced to 12s., and when you had 85,000,000 of shells that saved £35,000,000. There was a reduction in the price of all other shells, and there was a reduction in the Lewisguns. When we took them in hand they cost £165, and reduced them to £35 each. There was a saving of £14,000,000 there, and through the costing. system, and the checking of the national factories we set up . . before the end of the war there waa a saving of £440,000,000. The Ministry of Shipping, by its reduction of rates, saved hundreds of millions to this country.

This Government, I am sure, has a full knowledge of all those circumstances. I direct the attention of the Minister for Defence to the following newspaper paragraph :-

page 2005

A WAR-SCARE SCANDAL

Whenever a nation is facing a grave emergency, there will always be found a gang of profiteering buccaneers, loudly proclaiming their patriotism, and at the same time “going their hardest” in the dastardly game of plundering the people.

These flagwaving pirates operated true to form in Britain a few weeks ago when that country was feverishly preparing for a war that looked like becoming a grim reality at any moment. And not a word of protest came from the Chamberlain Government, much less any action to check their shameless looting operations.

When materials were needed for the protection of the people against air raids, these despicable and conscienceless profiteers were willing to make supplies available - at profits ranging up to 500 per cent.!

Pickaxes and trench tools, selling at a couple of shillings before the crisis, suddenly jumped to as high as 10s. each. Spades and shovels, needed for digging trenches, rose from 2s. 6d. to 7s. 0d., and even higher. The price of galvanized iron, needed for covering shelter trenches, jumped up hundreds per cent., and tho price kept increasing almost every hour.

There were no shortages of supplies of any of those materials before the war preparations were got under way. But when Britain’s workers began trench digging and making preparations to protect the masses from the threatening menace from the air, supplies of the needed tools and materials could be had only at prices dictated by the profiteers.

A scandalous example of ghoulish profiteering was that of sandbag supplies. Sold ordinarily a.t Id. to l£d. each, the price was increased up to as high as lOd. each in a few hours. Millions of them., needed for the protection of civilians and buildings, were sold to councils and local government” authorities at this price. The soulless profiteers did not hesitate to “sandbag” the community right and left for fat profits.

These individuals, posing as patriots, yet ready to take advantage of a perilous situation to engage in shameless profiteering, are to be found in every capitalist country in the world. They know no loyalty powerful enough to restrain them from plundering their fellowcountrymen. The only flag they acknowledge is the black emblem of the buccaneers.

We had them here in Australia during the last world war, over twenty years ago. And they would again be well to front, ready to bleed the country and its people white for profits, were Australia to become involved in another struggle for the defence of the nation.

And while they plundered right aud left they would noisily proclaim themselves as patriots of the highest order!

In submitting the Labour party’s policy on international affairs to Parliament, the Leader of the Opposition (Mr. Curtin) made two points. One was that, whatever else Australia might do as a member of the British Commonwealth of Nations, no Australian troops should be sent to take part in overseas wars. The other was that all efforts should be directed towards making Australia completely self-reliant in defence. Striking confirmation of the force of this policy was given in the Senate on the 7th October by Senator Brand, of Victoria, who is a brigadier-general. He said - “ It was unnecessary for Mr. Curtin to broadcast to thu world that no Australian soldier would be sent to fight overseas,” said General Brand. “ The world situation to-day. as far as Australia is concerned, is quite different from that in 1014. There is no likelihood of the formation of another Australian Imperial Force. All our industrial, economic and service defence preparations have one objective - home defence.”

The justification for defence and all that it involves lies in the fact that there is more at stake than the defence of territory. It is our principles of justice, liberty, and democracy and our standards of life that we are striving to defend, and the threat to them is great. We have lived to see the liberties of the private citizen suppressed in many countries, which, despite brilliant cultural histories, seem to be reverting to a conception of the individual’s relation to the state intolerable to Australians, with a parallel deterioration of international morality. Liberty and justice are principles worth much material loss, but Australians have for years made really great sacrifices for far less worthy ideals. For instance, the loss to Australia consequent on the Ottawa Agreement would equal the cost of building several battleships, and there are many who believe that Ottawa has bred more disappointment and dissatisfaction than genuine Empire welfare.

A more practical justification for substantial expenditures on defence is that much of the construction work and training of labour involved will, in any event, be undertaken in due course, and will add considerably to the national income. Papua and New Guinea offer an outstanding example of the need for development of latent resources. Potentially one of the richest territories in the Pacific, New Guinea has resources which, with the exception of gold, are relatively undeveloped. Its potential mineral wealth includes copper, zinc, silver, osmiridium and possibly petroleum, while its agricultural possibilities are also great. Once the initial difficulties of transport and capital have been overcome, plantations of coffee, sugar cane, rubber and tea could easily be supported. Papua is in the same position. Its mining and agricultural resources are extensive, but the lack of capital for the construction of roads and for other purposes and the inadequate shipping facilities have retarded progress. As a result, the area under cultivation has not increased. Development of these territories is essential if they are to play the part in our defences that their geographical position dictates. Otherwise Australia will not only decline to take advantage of a natural outer ring of defences, but will also leave a tremendous gap in its strategic position almost inviting attack. Forward bases to the north, of Australia will form an integral part of any defence programme, and for this reason the future of New Guinea may be very important. The range of operations of the Singapore base will be inadequate to keep all the waters surrounding the north of Australia clear of invaders. The solution is to supplement this main base by establishing forward bases, probably in New Guinea. The provision of forward bases entails the establishment of facilities rather than actual garrisons. It is not necessary that troops, planes and destroyers should be stationed at the bases, but only that sites should be prepared in such a way that they can be used at any time. Landing grounds in these tropical areas will require constant clearing and careful charting. Also, an exact knowledge of the waters to the north of Australia will be necessary. At present such knowledge is inadequate. In peace times the navy could be employed profitably in carrying out survey work, such as charting the intricate waters around New Guinea, little of which has so far been undertaken.

Trade routes provide another good reason for concentrating attention upon the north, for about one fourth of Australian trade traverses the Pacific. Moreover, one of our most important trading connections to the north-west is the Netherlands East Indies, our chief supplier of oils. In 1936-37 about 60 per cent, of Australian petrol imports came from the Netherlands East Indies, the next largest suppliers being the United States of America and British Borneo, with less than 20 per cent. each. The Netherlands East Indies and Australia could gain much from co-operative defence of trade routes, because, apart from the trade between them they both have a very lively interest in trade with Europe, and over a large part of the journey their routes coincide.

Australian dependence upon oil from overseas raises the whole question of storage of essential imports, and of the limits to which it is advisable to become independent of imported goods. Generally speaking, it is wiser to strive to keep open channels of trade giving access to products more cheaply than they can be produced at home. But in war-time, a com-* promise is probably the better plan. Storage is one solution. While Great Britain is storing principally foodstuffs, Australia’s stored goods would be mainly of a different kind. The need for oil we have in common, but for machinery and machine parts, including motorvehicles and aeroplane engines, Australia is almost entirely dependent upon supplies from England and the United States of America. The problem is more than one of keeping trade routes open, because these countries may not be able to supply such commodities in an emergency. This makes it necessary to prepare at once factories for the construction of motor vehicles and aeroplanes. Work has already been begun in that direction, and it was recently announced that in five years about 25 per cent, of Australia’s petrol consumption will come from Newnes. These are important contributions, and it is imperative that their urgency should not be overlooked. It seems necessary, too, that apart from a greater use and development of Cockatoo Dockyard, some encouragement should be given to shipbuilding in Australia.

Industrial development, however, involves more than factories; it necessitates greatly improved communications in order to keep connected all the vital links in the Australian economy. Germany has led the way in showing the need for excellent roads and bridges as an integral part of its defence programme. They are equally important here. For example, in New South “Wales there is only one bridge crossing the Hawkesbury River, which is the only link between Sydney and the coal, iron and steel resources of the Newcastle district. The roads across the Blue Mountains are also inadequate for communication between east and west. Numerous railway lines require duplication, and some important districts are not yet adequately served by rail and road. But before going too far in extending railways, the relative merits of road and rail transport should be calculated, since it may be that railway lines are more vulnerable to attack than are motor routes.

The number of aerodromes has been increased of late as also has provision for night flying, but there is still much to be done in that direction, which, in view of the vital importance of aviation in modern warfare, Australia cannot afford to neglect. Great Britain has been improving harbour facilities, and it seems that Australia should also examine the adequacy of this aspect of its defences. Some part of the various defence preparations will be carried out in each State, and the whole undertaking will be a vast one, the control of which might best be vested in some central authority after a thorough Australia-wide survey.

Air raid precautions would also como under the direction of this authority. The scope of modern warfare has made it necessary to prepare the civil population as well as the armed forces, and though Australia may not have to go to the lengths of European countries to guard against air raids, the larger, coastal towns may be liable to attacks of this nature. It must be obvious to any observant person that the grim spectre of unemployment is still with us, despite the fact that the amount of factory employment has been gradually extended, for which this Government takes the credit, although it knows that the improvement in the main has been due largely to other circumstances. The man in the street knows that the improvement is, in large measure, due to natural causes, over which the Government has had no control. It is an acknowledged fact that the higher prices for primary products, metals, etc., based on war and threats of war, had reduced temporarily the unemployment figures, but, unfortunately, without producing any real remedy for the miserable conditions still existing for a large section of our fellow citizens, who are still unemployed, or of offering any outlook or security for the future of that section of the population which provides the skilled and unskilled labour still necessary for our productive requirements. The practice of citing figures compiled by the Statistician from returns submitted by trade unions to prove that unemployment has been reduced by specific percentages takes no account of the fact that many of our youths and young adults have never had an opportunity to join a trade union, and ignores the other fact that part time employment is now a much more important factor in industry than was the case prior to the depression. The trade union figures, therefore, do not provide a sound basis for comparison, nor do they truly reflect the existing position. Unemployment in Australia is still very severe, and is one of our greatest problems. Figures culled from reliable sources testify to this fact. It is reliably estimated that at least 200,000 of our fellow citizens cannot obtain regular employment, to say nothing of the annual addition to that huge total from amongst the ranks of young people of both sexes, who, on leaving school, are unable to enter industry through lack of a properly planned economy on the part of this Government, which has repeatedly promised economic security to all. This state of affairs cannot be allowed to continue indefinitely. Those who are still unemployed cannot be expected to remain quiescent for ever. Sooner or later, a day of reckoning arrives for a Government which breads its promises. For the jobless breadwinners and their hapless dependants, the problem is a very real one. The Labour party realizes that it is still acute, and is likely to be aggravated in the near future, the possibility of another slump having already been forecast. For these reasons it has put forward a constructive policy to deal with the problem. One way in which unemployment could be relieved is by undertaking essential public works, in which Australian material, as well as labour, would be utilized. The standardization of our railway gauges, I suggest, would admirably fill the bill, because all of the materials which would be required, such as steel rails and fastenings, could be manufactured in Australia, whilst the sleepers could be hewn in our forests. Furthermore, the conversion of the permanent way to the 4-ft. S-J-in. gauge, and also the alteration of the rolling-stock, would involve practically all labour. Such a project offers a golden opportunity to this Government to give employment to at least 50,000 people, whose families and dependants, totalling 150,000 persons, would be enabled to live on a much higher standard than they can afford to-day. Furthermore, this work would be of immense value from a defence standpoint. It can, therefore, be said to be a work which would be in the interests of the nation as a whole. The advantages of A standardized railway gauge are as great as the disadvantages resulting from the lack of it.

During the debate which took” place on the subject last week, I was very pleased to hear the Minister for the Interior (Mr. McEwen) announce that he proposed to call a conference of Ministers for Railways for the purpose of co-ordinating transport services throughout the Commonwealth. As an ex-railway employee I fully realize the importance of the problem of transport in this country. However, if it is not immediately tackled by the various governments it will soon become insurmountable. I suggest that the Government should appoint a traffic committee to advise and assist the State transport departments on all matters connected with both intra-

State and interstate traffic. Such a committee could also give a lead in the preparation of a plan for the co-ordination of air, road, rail and water transport services. It would seem that each improvement in transport increases the desire for still better facilities. Faster and more frequent passenger services are being demanded, whilst the more rapid delivery of goods is being insisted upon by traders who have adopted a policy of ordering in smaller lots. Such demands have in many cases increased operating and financial problems. Rapid, cheap and efficient transport confers great benefits on the community as a whole, whilst, on the other hand, inadequate, costly and inefficient services adversely affect every individual. The transport industries can only be enabled to render the best services possible ito the community by being placed on. a sound financial and economic basis. At present it is generally recognized that the transport situation is in many respects unsatisfactory, and that the beat use is not being made of the facilities already available. Passenger transport in many of the larger cities is in a state of chaos, with the result that an additional problem of serious magnitude has been created. Furthermore, the relationship of the new air services to road and railway transport is vital. Tremendous benefits may be gained from the co-ordination of not only road and rail transport, but also other services. The rapid development of commercial aviation has brought into prominence the problem of co-ordinating aerial services with other forms of transport. Since collections and deliveries at terminal aerodromes can be effected only by road vehicles or railways, some degree of co-ordination with air services is essential. I point out that most aerodromes are situated some distance outside the cities which they serve, and, therefore, some co-ordinated system of road and rail delivery is essential in order to minimize delays. Over long distances, also, great possibilities are presented in connexion with the co-ordination of rail and steamer services, and already such co-ordination has been introduced in other countries with advantage. The electrification of the Sydney metropolitan railway system should be advanced as rapidly as possible in order to enable the withdrawal qf road vehicles from the inner suburbs. Furthermore, new suburbs could be developed by providing feeder services to the railways. In this way congestion would be overcome, and the Defence Department would be materially assisted in its plans.

I am disappointed that the Government has seen fit to increase the rate of sales tax from 4 per cent, to 5 per cent., which is really an increase of 25 per cent., in order to enable it to finance its annual contribution of £2,000,000 towards the national health and pensions insurance scheme. It is estimated that the extra sales tax will return as much as £1,900,000. I remind the Government that when the national health and pensions insurance legislation was introduced a promise was given that no extra tax would be placed upon any commodity in general demand by the workers on the basic wage. However, the Government has broken that promise. I have abundant evidence that the sales tax has been increased on many articles, such as soap and the cheaper kinds of biscuits, which are essential requirements of basic wage-earners. Thus, the workers are being doubly penalized. They are obliged to contribute directly towards their own insurance, and, at the same time, through increased sales tax, to provide the Government’s annual contribution under the scheme.

The Australian Broadcasting Commission Act has been on the statute-book for more than six years. The Leader of the Opposition (Mr. Curtin) recently contended that the rapid developments in broadcasting in Australia rendered it essential that broadcasting should be the subject of legislative review by Parliament. Events have shown that a change of policy is required. It appears that in many respects the administration of the commission is very wasteful. Appointments have been made, and programmes prepared, which leave a grave doubt as to the qualifications of many members of the staff. It is the practice of the commission to give rather lavish entertainments to mark the arrival of distinguished celebrity artists, and the question may well be asked as to whether these receptions are justified. I suggest that A and B class stations should be regarded as co-related agencies in the Australian broadcasting service. [Quorum formed.]. The utmost dissatisfaction exists with the manner in which certain commercial stations have been given increased power, and the replies offered by the Postmaster-General on this point are contradictory. Parliament has not had a reasonable opportunity for many years to deal with broadcasting as such, let alone the work of the commission. The whole subject is due for review, and a measure for the complete amendment of existing legislation relating to broadcasting should be submitted to Parliament.

My only comment with respect to the constitution of an inner group of the Cabinet is that it is the first step in a move by a small clique of fascist-minded Ministers to usurp the democratic functions of the National Government. Apparently, this Government is not concerned about the fact that it has no authority under the Constitution for establishing an inner group within the Cabinet. Chapter II. of the Constitution provides that the whole of the Cabinet must go into consultation on all matters. The proposal to constitute an inner group, therefore, violates the Constitution. The Government is well aware of that fact. Because of the lateness of the hour, however, I shall leave the matter there.

In view of persistent rumours that the Government proposes to bring this session abruptly to an end about the 2nd or 3rd December, I draw its attention to a promise in the budget that, during this session, it will introduce legislation relating to reciprocity between the Commonwealth and New Zealand in the matter of invalid and old-age pensions. At present residence in New Zealand is not accepted as residence in Australia for pension purposes, and vice versa. I sincerely hope that, before this period of the session is concluded, appropriate legislation will be introduced to give effect to this desirable amendment of the Invalid and Old-age Pensions Act.

Mr BLAIN:
Northern Territory

– After listening to the scathing remarks of the honorable member for Flinders (Mr. Fairbairn) in regard to the manner in which this debate has been conducted, I feel that he has done a service in presenting a surface on which the shame of the Government might be reflected. An old Greek philosopher, Aristophanes, described shame in another way when he said that it was actually the “ apprehension of a vision reflected from the surface of the opinion of the public”. It appears to me that all honorable members have a fellow feeling with the honorable member for Flinders in this regard. I rose, however, to make a brief protest against the continual use of two words that seem to have emanated from the remarks of the Attorney-General (Mr. Menzies). Those words are “ uniformity “ and “ unification “. I do not believe in either one or the other.

Mr Menzies:

– Those words did not emerge from my speech.

Mr BLAIN:

– It may seem paradoxical for me to say that I do not believe in unification, although I am in favour of tho abolition of State parliaments. I do not think that the speech of the Attorney-General, presented with no lack of logic, will convince the people of Australia of the need for clothing the Commonwealth Parliament with additional powers. The present system is so essentially top heavy that it will break its props. Nothing is any stronger than the props on which it stands. Therefore, it will take much more than the brilliant speech of the honorable gentleman to persuade the people of Australia to give to the Commonwealth Parliament willynilly such wide powers as have been suggested by him, and so eagerly seized upon by the Opposition. What I am surprised at is that ministerial members should seize on the speech of the right honorable member for Yarra (Mr Scullin) as indicating that he favours unification, because as is well-known he does not. In a speech made in this House last year - and he of all honorable members in this House knows the precise meaning of words - he advocated not unification:, but the establishment of provinces to take the place of the existing. States.

Mr Ward:

– He wanted complete legislative powers for this Parliament.

Mr BLAIN:

– As the AttorneyGeneral said yesterday, after the Constitution convention had concluded in 1900, a bargain was struck, and only by the striking of a more modern bargain with the people of Australia can the Con stitution be altered to any great degree. What will this Parliament do in regard to it? The Commonwealth is to-day more and more a grasping bureaucracy in the guise of a democracy. Before any appeal to the people for. an alteration of the Constitution can attain any measure of success, the Commonwealth Government will have to come out into the open and tell the people of Australia candidly not what extended powers should be granted to the Commonwealth but what powers the Commonwealth is prepared to cede to districts or economic regions. Unless the ‘ Government has the guts to do that, I shall stump the country in opposition to any enlargement of federal authority. Anxious as I may be to increase the powers of the Commonwealth Parliament, I would be willing to support any request for additional powers only if the request were accompanied by an attempt by a body composed of technical persons to sectionalize the continent and re-draw the map of Australia in the name of sanity and science.

Mr Menzies:

– What the honorable member wants is a sort of geological survey.

Mr BLAIN:

– The Attorney-General gave us what I might term a trigonometrical speech in which he strided the whole of the Commonwealth as though by doing so he could convince the people of Australia that they should give to this Parliament more internal power. I believe in a survey from the centre. After first having taken the people into our confidence, let us start at the centre and go outwards by adding our regions together in order to make a complete whole. When that proposition is put to the people it will have my wholehearted support. We have heard constant reiteration of the terms “ planning “ and “ scientific procedure “. They are used every day by honorable members on both sides of the House, mostly by those who do not know the meaning of either. Last week both the honorable member for Warringah (Mr. Spender), an eminent lawyer, and the newly appointed Assistant Minister (Mr. Harrison) referred to the need for “planning “. The honorable member for Warringah also referred to the “lamentable lack of leadership “. He urged the appointment of experts to carry out the “ planning “ which he suggested, but he was not willing to give those experts any status or authority. I would not give experts administrative authority but purely advisory authority. Real truth in itself is compelling logic, and they would establish their real authority by telling the truth. This Parliament is crying out for a more highly trained personnel. We have not sufficient technical men in this Parliament to convince the people of Australia of the full facts of many matters with which they should be made familiar, and the people can “smell possum “. Therefore a national planning authority must be set up, the representation on which will be a true cross section of the people. The members of that authority must also be given appropriate status, though in my opinion they will very largely win that status for themselves because, as I have said, compelling logic will portray the truth to this Parliament. I believe that a national planning authority would be eminently able to assess the assets of this country for the Parliament. It must be a fact-finding body, and naturally it must have, as one of its members, a civil engineer. Perhaps I may claim the indulgence of honorable members while I read a portion of the report of an address delivered by the chairman of the Institute of Engineers of Australia, Mr. A. E. Axon, M.E., M.I.E., Aust., before the Brisbane Division of the institution in 1937. Mr. Axon said -

I cannot help feeling that engineers as a trained body have not been called upon to the extent that education and training would appear to have justified in dealing with the dislocations in the social order which have been experienced during the last decade and this may be due, in part, to the fact that their particular training and experience have rendered them less fit to administer than to give practical effect to broad matters of policy. Although this is not so much an aspect of service to members, the effect of the employment of engineers to take their proper part in securing the readjustment of social values, which the impact of science upon society has rendered necessary, would develop that recognition of the engineer’s services to mankind which is so desirable at the present time.

If that paragraph could be printed in gold the expense would bejustified, particularly at a time when honorable mem bers of this Parliament are constantly referring to the need for “planning” and “ scientific methods “. Mr. Axon continued -

I do not see how we can be satisfied to read in the advertising columns of our metropolitan press, advertisements calling for applications from scientifically trained men at salaries less than those required to be paid under industrial awards to artisans and mechanics ….

This has an important bearing now because I think that a lot of the trouble which confronts us can be attributed to the fact that we offer but paltry salaries to technical officers of the Civil Aviation Department and the Defence Department, compared with those paid to officers occupying similar positions in other countries. The result of this has been that we have lost many of our expert technical men who, have gone to New Guinea, the United States of America, and other countries which are prepared to pay them salaries more commensurate with the value of the work they are called upon to perform. If these Commonwealth departments are to receive recognition throughout the civilized world the Government must attract the most highly competent officials by offering more appropriate salaries. Mr. Axon, in referring to an advertisement by the Civil Aviation Department, continued -

A practical knowledge of civil engineering as regards earth works and drainage, and also of surveying and draftsmanship, to say nothing of an unspecified “ etcetera”, is required and it is stated that “ a university degree in engineering would be an advantage”. For these qualifications the munificent salary ot £222 - £306 is offered, these emoluments being reduced to £192 - under cost of living adjustment.

While an optimistic outlook on the part of a Government department is generally commendable it should surely be possible to display such without, at the same time, offering a gratuitous insult to the civil engineering profession.

These men should not , be offered such paltry salaries for their services. In the discussions that will take place in this Parliament next year, we shall require the assistance of scientific men. The people are supposed to have the benefit of democratic government, but it is disgraceful that honorable members of this House are kept in ignorance of the actions of the Ministry. The sooner the present Government is supplanted by one that does not adopt bureaucratic methods the better it will be for Australia. I shall not discuss the defence plans, because the Government is dying, and knows it.

In the light of recent happenings at the United Australia party convention in Sydney, I feel somewhat diffident about what I now intend to say. However, I amin such an advantageous position, as the independent member for the Northern Territory, that I regard it as safe for me to do so. Although I have not the good fortune to be a member of the Wentworth family, I can do some things which the illustrious scions of that noble house may not do in the matter of criticising the Government’s policy, a practice which, I believe, has become the subject of police intervention. I am unlikely to be bundled out of this chamber by a constable. As the only independent left in this House, the others having been absorbed by various organizations, nobody could discipline me but my constituents, and they are not likely to do that. I had intended, during this debate, to discuss certain matters relating to the Northern Territory, but in the present circumstances it is hardly worth while. Even if the Government were to agree to be influenced by anything which I might have to say, there would probably be no result of a practical kind. The Minister for the Interior (Mr. McEwen) has visited the Northern Territory, but he has presented no report to the House. Probably he is waiting until the last few moments of the session, so that no honorable member will have an opportunity to reply to his statements. He did not visit the Lands Department in Darwin, so I am wondering how he expects to be able to devise a useful policy for the development of the territory. I intend to reserve my further remarks until there is more stability and more democracy about this place.

Mr SCULLY:
Gwydir

.It is unreasonable to ask the House to continue the budget debate, one of the most important debates of the year, at this hour of the morning, considering that the House has been in session continuously since 2.30 p.m. , yesterday. I am not surprised that one of the most prominent members on the Government side has made an emphatic protest against the Government’s administration of the Air Force. It was indeed a revelation to hear the exposure by the honorable member forFlinders (Mr. Fairbairn) of the mal-administration of the Government. We must take more than passing notice of the remarks of that honorable member regarding air defence, seeing that he is a first-class pilot of world-wide experience. He has shown that the Government has bungled badly in its administration, and his speech will make the people consider seriously whether the affairs of the nation can safely be left in the hands of the present Ministry. A notable contribution to the debate was the informative speech by the honorable member for Darling Downs (Mr. Fadden), who showed the slip-shod way in which the financial affairs of Australia are conducted. A costly trade delegation recently returned from Great Britain. Three of the leading members of the Cabinet had a trip overseas, which occupied over six months, and cost the Commonwealth approximately £20,000. Honorable members followed the accounts of the movements and actions of the delegation as far as possible from newspaper reports, and waited with interest for information as to the outcome of the tour.

In the. Gwydir electorate, at the last election, the man placed in charge of the campaign on behalf of the Government during the concludingthree or four weeks, was the Leader of the Country party in New South Wales, and the Deputy Premier, Mr. Bruxner, who made a definite attack on the Labour party, and expressed the opinion that the electors of Gwydir would be wise if they did not return the Labour candidate because, if they did, the benefits enjoyed by the primary producers under the Ottawa Agreement would go by the board. He particularly mentioned the duty of 2s. a quarter imposed by Britain on foreign wheat, but we find that the Leader of the Country party in this Parliament (Sir Earle Page) . absolutely betrayed the wheatgrowers of Australia on the occasion of his visit overseas. On no occasion, during the discussions abroad, did he put up a fight on their behalf. The protection that they have hitherto enjoyed has been lost. The action of the Government has already had an alarming effect on wheat prices in Australia. If ever protection were needed by the wheat farmers, they require it now when the price of wheat is lower than it had been for many years. The preference of 2s. a quarter or about 3d. a bushel meant rauch to the Australian wheat-growers. On the day following the announcement of the AngloAmerican Agreement the price of wheat in country districts fell from 2d. to 3d. a bushel, and in my electorate many wheat buyers were recalled by their respective firms, because they viewed the position with alarm. In its weekly report dealing with the international and local wheat positions, the large and well-known New South Wales firm of Lindley Walker Wheat Company Limited, reported. -

International wheat has been friendless for many days, and world conditions, as disclosed in their cables to-day, may leave buyers doubting but hoping - and doubting because others are doubting, particularly by those that want supplies - that they may “buy them cheaper by waiting. Big surpluses in all exporting countries coupled with a doubtful outlook owing to new made treaties involving as they do considerable diminution in Imperial preference, and the complex financial difficulties throughout the world, are weak factors in international wheat.

At this stage, at least, everything humanly possible should be done to protect the interests of the wheat-growers. Various speakers in this House have said from time to time that another period of recession is approaching ; but we should realize that the other great wheatproducing centres of the world are alive to their responsibilities to the growers. This year the United States of America, which has guaranteed the price of 2s. 6d. a bushel for wheat delivered at railway depots, has undertaken to subsidize wheat exports up to 30 cents a bushel. This has caused alarm amongst Australian wheatgrowers.

The wheat exporting countries of the world expect to have 950,000,000 bushels of wheat available for export this year, but the importing countries require only 550,000,000 bushels, so that a surplus of approximately 400,000,000 bushels will have to be handled. For this reason the Government should do everything within its power to assist our wheat industry. It is deplorable that wheat-growers’ orga nizations throughout the Commonwealth should find it necessary at a time like this to make emphatic and united protests against the disgraceful manner in which the Country party representatives with our overseas delegation earlier this year betrayed the wheat industry by surrendering, apparently without a fight, the wheat preference that we enjoyed under the Ottawa Agreement.

We are hearing a great deal in these days about the Government’s voluntary enlistment campaign. It is well, therefore, that honorable members should bo reminded that for several years past the Government has actually discouraged voluntary enlistment. Repeated applications have been made from various parts of my electorate for permission to form companies, but all have been rejected. Similarly, numerous applications have been made for permission to form rifle clubs, but these have met the same fate. In my opinion, the possibilities of voluntary enlistment have not been by any means exhausted. If the Government had adopted any kind of a reasonable policy, instead of the bungling methods that it has pursued, 70,000 recruits could have been enlisted long before this.

It is absolutely essential to the safety of this country that a vigorous policy of closer settlement bc adopted. The parlous condition of the wheat industry in many of our dry areas shows that it is unreasonable to expect men to grow wheat successfully in such country. But as a great deal of first-class wheat land in more reliable districts is to-day held out of wheat production, men with limited capital were forced to try their luck in unsuitable country. The Government should resume the more favoured areas and make the land available to qualified wheat-growers under reasonable conditions. If it did so the industry would soon be on a much better footing. Of course, finance is a serious obstacle, but arrangements could surely bc made for money to be obtained through the Commonwealth Bank at a low rate of interest. Effective co-operation between the Commonwealth and State Governments would completely change the complexion of this problem. A little activity has been observed in New South Wales in respect of closer settlement during the last twelve months, but, unfortunately, land has been resumed at from £1 to £1 10s. an acre in excess of its productive value. This is extremely unfortunate, for it means that farmers who settle on such land will have to carry too much overhead cost. Nevertheless, the greatest disability is not cash, but the lack of opportunity for practically-reared sons of farmers and men engaged in rural industry to approach land ballots. Ninety per cent, of the most successful farmers of Australia began on’ the bottom rung of the agricultural ladder. We have many qualified men in this country who would be glad of the opportunity to take up wheat land under reasonable conditions. Men of good character and practical knowledge should be given financial assistance to engage in this industry. Such a policy would lead to decentralization, and that, in itself, would be a worth-while achievement”. I urge the Government to consult with the State governments on this subject in order to stabilize this important industry. Foi effective defence we need a stabilized agricultural community.

I trust that the Government will introduce without delay its promised longrange mortgage bill. The Labour party would have preferred the opportunity to discuss in the broadest possible way the recommendations of the Royal Commission on Banking and Monetary Systems, but the Government has, so far, thwarted every endeavour to have that report fully discussed. After chopping and changing many times in respect of its” financial policy, it has now promised to introduce a long-range mortgage bill. I trust that this promise will not suffer the fate of many others that have been made in recent years on its behalf.

It is greatly to be regretted that in connexion with our defence expenditure the money raising facilities of the Commonwealth Bank have not been fully utilized. Without doubt the Commonwealth Bank could make money available to the Government for this purpose at a very low rate of interest. In this connexion I direct attention to paragraph 504, on page’ 196, of the report of the Royal Commission on Banking and Monetary Sys-. terns : -

Because of this power the Commonwealth Bank is able to increase the cash of the trad er. Sculley ing banks in the ways we have pointed out above. Because of this power, too, the Commonwealth Bank can increase the cash reserves of the trading” hanks. For example, it can buy securities or other- property; it can lend to the governments or to others in a variety of ways; and it can even make money available to governments or to others free of any charge.

In these circumstances we are justified in calling upon the Government to finance its defence programme through the Commonwealth Bank. Instead of .adopting that policy the Government has seen fit to revert once more to the old, bad, practice of overseas borrowing. This procedure brought Australia to the verge of bankruptcy during the regime of the BrucePage Government. I cannot understand therefore why the present Government should revert to that policy.

Undoubtedly the Government has fallen down on. its job. Leading newspapers throughout the Commonwealth are condemning it for its ineptitude. Even during this debate prominent Government supporters and erstwhile Ministers have made vitriolic attacks upon the Ministry for its maladministration. I cannot understand why the Government does not resign at once and give the people of Australia an opportunity to restore order out of the chaos in which the country is now floundering.

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

– Even at this early hour of the morning I feel it incumbent upon me to offer some criticism of the budget now under consideration. I listened carefully to the remarks of the honorable member for Flinders (Mr. Fairbairn), who made a valuable contribution to the debate. Like him, I protest against the action of the Government in keeping the House sitting until this hour when the debate should have taken place weeks ago. I also listened with interest to the speech of the honorable member for Darling Downs (Mr. Fadden), and I congratulate him upon it, particularly those parts in which he stressed the bungling of the Government in regard to national insurance. I desire to congratulate the Minister for Defence (Mr. Street) upon his appointment. I have no doubt that he will prove to be ari acquisition to the Cabinet, and that he will carry out his duties in such a way that Australia will benefit. ‘ ‘

This is the most barren budget that has been . presented to Parliament since I have been a member of it. It contains nothing for the benefit of the workers or the people generally. There is not one redeeming feature in it, and I am convinced that it has displeased as many honorable members on the Government side as on this side of the House. It was interesting, however, to hear the praise given to the Government by some honorable members for the way in which it has managed the affairs of the country during the last twelve months. It has been truly said that this is a government of spare parts. It is not the same government which appealed to the people, and was returned to power at the last election. Until a few weeks ago, it was the Lyons-Page Government; now it should really be termed the Page-Lyons Government, because the Country party has forced the hand of the Prime Minister, and has got everything it wants. There is no doubt that the Leader of the Country party (Sir Earle Page) has a predominant influence in the Cabinet.

I remember well the many and varied promises made by the Prime Minister, and by Sir Earle Page, during the election campaigns of 1934 and 1937. It was on those promises that the Government was elected, but not one of them has been honoured. In his policy speech, the Prime Minister said that if he were returned with a majority - as he was, unfortunately for the people - he would engage upon a number of major works for the relief of unemployment, such as the standardization of railway gauges, sewerage construction for large country towns, the extraction of oil from coal, and other employment schemes, having particular reference to the needs of youths, which would take precedence over all other Commonwealth activities. Lastly, he promised to appoint a Minister, with definite responsibilities in regard to unemployment.

Let us see how the Government has endeavoured to honour those promises. It had conveniently forgotten all about the standardization of railway gauges until the matter was brought before the House a few days ago by the honorable member for Maribyrnong (Mr. Drakeford). I was pleased to hear so many honorable members take part in the discussion on that occasion, because it showed that they realize the importance of this undertaking for defence purposes and also as a means of providing work for the unemployed.

The Prime Minister’s second promise was to make money available for sewerage works. In his speech to-day, the honorable member for Werriwa (Mr. Lazzarini) pointed out that many of the suburbs in Sydney are still unsewered, and he painted an alarming picture of what would happen if a bad epidemic should break out. This is a matter of great importance in Queensland. Unfortunately, many part3 of Brisbane are unsewered, and unless the Commonwealth Government will make money available to the local authorities, the work cannot be done for many years to come. I desire to give credit to those in charge of this work in Brisbane for having, within the last five or six years, completed many miles of sewers, and for having reticulated the various areas through which they pass. Now, however, because money has not been made available, the local authorities have had to close down on this work. If the money were forthcoming many thousands of the unemployed in Queensland could be put to profitable and productive work in constructing sewers in Brisbane and various towns.

The Prime Minister also promised to encourage the establishment of industries for the extraction of oil from coal and shale. Admittedly a beginning has been made at Newnes, but a great deal more must be done. Both the Leader of the Opposition (Mr. Curtin), and the honorable member for Hunter (Mr. James), have repeatedly pointed out how necessary it is that Australia should be made independent of outside supplies of oil and petrol. Almost every week the honorable member for Hunter has urged the Government to make provision for the extraction of oil from coal. He is a practical coal miner, and knows what can be done in this direction. He also realizes how beneficial it would be for the people of Australia if we were able to produce our own supplies of oil and petrol. The Government has been lacking in its duty in failing to redeem its promise to encourage the extraction of oil from coal, an industry which, if established, would not only assist directly in the defence of the country but would also provide employment for thousands of coal-miners.

The amount of money which the Government has expended for the purpose of assisting the youths of Australia to find employment has been negligible. It promised a solution of the problem, but has contented itself merely with subsidizing to a small degree the State governments upon which it has thrust the responsibility. There will be drastic repercussions if the Commonwealth Government does not shoulder its obligation in this direction, because every year the ranks of the unemployed are swollen by the thousands of youths who leave school and are unable to find employment.

The appointment of a full time Minister for unemployment was promised, and a great deal of faith was inspired among the unemployed that their troubles would be ended by the pronouncement of the Prime Minister that this Minister would bend the whole of his energies towards the solution of the problem. That promise also was broken, because, although the honorable member for Parramatta (Sir Frederick Stewart) was appointed as Parliamentary UnderSecretary for Unemployment, he was unable to persuade the Govern”ment to accept his proposals, which I sincerely believe would, had they been adopted, have been of great benefit. The honorable gentleman resigned in despair and was never replaced.

The Government has at all times attempted to evade responsibility for unemployment by laying it on the States, but it is not a State matter because the Commonwealth Government holds the purse strings. The Minister for “Works (Mr. Thorby) declared that the unemployment position is better to-day than it was last year and certainly better than it was in 1931-32. Nevertheless, according to the returns supplied by the trade unions, more than 170,000 persons are unemployed. Those returns by no means cover the whole field of unemployment, and, accordingly, the number of the workless in Australia must be vast. The fallacy of accepting the Commonwealth Statistician’s estimate of the number of unemployed was emphasized by the honorable member for Melbourne Ports (Mr. Holloway). I endorse everything that he said. Thousands of children who leave school each year must be added to the unemployed, because even those who obtain work must push other persons, perhaps their fathers, out of work. I have said previously in this chamber and at meetings of the unemployed in my electorate that the ability of the State governments to find work for the unemployed is dependent on the moneys that they have available, that those moneys are dependent, to a large degree, on the whim of the Loan Council of which the Commonwealth Treasurer is chairman. The Government, and shire and municipal councils in Queensland are employing to-day more men than they have ever previously employed. Most of them are engaged on relief work although some of them work full time. Nevertheless, thousands are unable to obtain employment. Where were the men now out of work employed before the depression? Certainly they were not employed .by governments or municipal councils, and consequently they must have been employed by private enterprise. It is the duty of the Commonwealth Government to make money available so that these men may be re-engaged by their former employers. That can be done by money being made available to the States. I regret the necessity to increase taxes, particularly the sales tax, because it falls chiefly on the worker, but, apparently, the Government is of the opinion that in no other way can it meet its commitments for this financial year. I do not object to the proposed expenditure on defence, for it is the duty of whatever government is in power to defend the country. Every honorable member on this side of the chamber believes in adequate defence. There are, however, ways by which the Commonwealth could raise money to finance necessary works without resorting to increased taxes. All the money required for defence and the relief of unemployment could be made available through the Commonwealth Bank. Thousands of men, women and children are still on the verge of starvation. [Leave to continue given.] The Commonwealth Bank financed Australia’s war operation* which cost £257,000,000. After the war, the late Sir Denison Miller was asked whether he could raise a similar amount to relieve unemployment. He replied that he could raise as much ‘for a peace programme as for war. The present Government h, s ignored his advice. The whole of the war loans raised were floated in Australia at a flotation cost of £705,000, or 5s. 7d. per cent., as compared with £3 pel’ cent, for loans previously floated in London. What was done to prosecute the war should now be done in this time of the nation’s need. The monetary policy of the Labour party is in accordance with the recommendations of the royal commission on banking which, apparently, the Government has ignored. If effect were given to the recommendations of that body there would be no need to pay exorbitant rates of interest. I shall conclude by quoting paragraphs 503 and 504 of the commission’s report -

The central bank in the Australian system is the Commonwealth Bank of Australia. This bank is a public institution engaged in the discharge of a public trust. As the central bank, its special function is to regulate the volume of credit in the national interest, and its distinctive attribute is its control of the note issue. Within the limits prescribed by law,, it has the power to print and issue notes ns legal tender money, and every obligation undertaken by the Commonwealth Bank is backed by this power of creating the money with which to discharge it.

Because of this power, the Commonwealth Bank is able to increase the cash of the trading banks in the ways we have pointed out above. Because of this power, too, the Common wealth Bank, can increase the cash reserves of the trading banks; for example, it can buy securities or other property, it can lend to the governments or to others in a variety of ways,- and it can even make money available to governments or to others free of any charge.

– Darwin is heavily fortified.

Mr FROST:

– It may be in the opinion of the Minister, but he will not deny that the guns installed at Darwin are obsolete. I do not object to the expenditure on defence provided that the money is expended wisely, but up to the present no details have been submitted to Parliament. The expenditure on defence during recent years has been : -

This year it is proposed to expend be between £17,000,000 and £18,000,000. It would be interesting to know what the Government has to show for such a huge expenditure. It is also proposed to establish a flying squadron at Darwin but the site of the aerodrome has not yet been cleared. Several contracts have been let but as the rates have been unremunerative they have all been thrown up and it will be a very long time before planes will be able to land on the site which the department has acquired. Young men are being sent to Darwin where the climatic conditions are unsuitable for white men. When I visited Darwin some time ago I found that the men in the garrison were living under deplorable conditions. The supply of water for drinking and bathing purposes was insufficient and the latrines are adjacent to the mess room. There is no sewerage system and generally the accommodation provided is of a most primitive character. I understand that a further 200 or 300 men are to be despatched to Darwin at an early date, but before they are sent adequate sanitary arrangements should be provided. Should an epidemic occur at the garrison it would probably affect all the men because in some respects the conditions there are worse than they would be in the trenches during war time. We have also been informed that the Government proposes to increase the strength of the militia from 35,000 to 70,000, but that will be a waste of money. Even if the number be increased to 70,000 no advantage would be gained, because the organization is such that they could not be calledup at a moment’s notice. The militia system has been a failure for years.

I again object to the spending of the bulk of this money in Melbourne and Sydney. A substantial portion of it could very well be expended in the smaller States. The availability of hydro-electric power offers exceptional opportunities in that direction in Tasmania which, furthermore, possesses everything needed for the manufacture of munitions, guns, and planes. Its inland waters provide excellent harbourage for flying-boats, which also could very easily be constructed there. The Government should not place all its eggs in the one basket. I point out that Tasmania’s harbours are the easiest to defend. Furthermore, climatic conditions in Tasmania are far more* suitable for factory workers and the storing of munitions. 1 again appeal to the Government to give greater assistance to rifle clubs. Many of these clubs in my electorate have difficulty in securing ammunition, and they pay a fairly high price for what they are able to procure. As members of these clubs sacrifice their leisure in order to practise on the ranges, they are entitled to more generous assistance than they are receiving. Many of them are of middle age, and would be able to give valuable assistance in the event of an emergency. It is well known that half-a-dozen good rifle shots would be far more effective than a machine gun. Increased encouragement should be given to our rifle clubs.

Getting away from the smell of powder and shot, I propose now to refer to something far more palatable - the fruit industry. I am sorry that the Minister for Commerce (Sir Earle Page) is not present at the moment. I made an appeal for assistance on behalf of the raspberry growers in my electorate, who constitute 93 per cent, of the raspberry growers in the Commonwealth. Last year the factories, which are controlled by the processing firms, did not inform the growers until the eleventh hour that they could not purchase a large proportion of the crop, and I appealed to the Postmaster-General (Mr. Archie Cameron), as Acting Minister for Commerce, to make an advance on the crop of about £20,000 which, it was estimated, would meet the cost of processing the crop of 1,000 tons. Some growers lost from 20 tons to 30 tons of raspberries; because the factories did not want it, much of the fruit was allowed to remain on the bushes until it dropped to the ground. In response to my request for assistance the Minister for Commerce sent a departmental officer to Tasmania to investigate the position. I met that officer in Hobart, and immediately detailed the situation to him. Conversing with him one afternoon in one of the factories, he informed me that he would despatch his report to the Minister that night. The next day, however, I received a letter from the Minister turning down my request for assistance to the growers. From the date appearing on the envelope I ascertained that that letter had been posted before the Minister could possibly have received the report of the departmental officer whom he had despatched to Tasmania to investigate the situation. Three months later, the fruit crop in Great Britain, and the northern part of Europe, failed, with the result that overseas buyers were left short of fruit pulp. One of the factories which had taken 200 tons more than it had accepted in the previous year was able to dispose of the bulk of its output before June last. We have received orders far in excess of supplies, and we were able to sell the whole of the pulp for £40 a ton which, with exchange added, was equivalent to a return of £50 a ton. Had the Government advanced the necessary money to the growers, they would have been in a position to pay it back within three months, and it would have put into the pockets of the growers an additional £30,000. We are constantly hearing of the need for an increased population and for establishing men on the land. In my opinion, no class of people deserves assistance more than the small growers working in the closely-settled fruit-growing districts of Tasmania, many of whom have large families consisting of seven or eight children, who also assist in the picking of the fruit. These are the very people who, according to the Government’s announced policy, are entitled to receive every consideration at its hands. In my opinion, these people are rendering a fine service to the community. The PostmasterGeneral who, in his capacity as Assistant Minister for Commerce, visited Tasmania last year and accompanied me through the fruitgrowing districts, can bear out all that I have said in this regard. I appeal to the Government to make adequate provision for the assistance of these very deserving people.

I come now to a consideration of the forestry resources of Tasmania. That State, in my opinion, and in the opinion of others perhaps more competent to judge, is best situated climatically for the development of forests. In what is known as the moist centre of the western districts of Tasmania are to be found large areas of very thickly timbered coun- try. Tlie forests, which have, in. the past, yielded many hundred of millions of feet of timber, require little or no attention because they re-afforest naturally. The ‘ only work necessary to be undertaken in that area is the construction of firebreaks. All the timber experts in the world predict a shortage of timber in a few years, even in those places where it was formerly thought that timber resources were inexhaustible. When I was in the United States of America I was informed that, so great has become the necessity for the preservation of existing forests, that forestry officers actually are spraying the treetops to eradicate pests which, it is said, destroy more timber than is being cut. The Russian forests were thought to be inexhaustible, and after the revolution large gangs of men were employed in felling trees, but it was soon apparent that if the denudation of the forests continued at such a rapid rate, a diminution of the supply of timber for future years would result. The” gangs were put off and a halt was called. Other countries have had a similar experience. That is, perhaps, the reason why it is proposed to establish the newsprinting paper manufacturing industry in Australia. I understand that it is intended to establish two factories in Tasmania, one in Victoria, and probably others in other States. The necessity for the establishment of that industry in Australia has become all the more imperative because of the difficulty experienced by large users of newsprint paper in securing contracts for future supplies, except at a very high price. It is obvious to everybody connected with the industry that timber prices will advance considerably in the near future, and that there will be a corresponding increase of the price of paper. We should, therefore, do everything possible to preserve our national forests. After hearing evidence as to disabilities of the claimant States, the Commonwealth Grants Commission recommended that provision of funds be made by the Commonwealth for the development of the Tasmanian forests, and that the Tasmanian Government should consider the advisability of enlarging its forestry schemes. I regret to say that, although its expenditure in Tasmania would have been beneficial not only to Tasmania but also to the whole of the Commonwealth, no money has yet been provided for this purpose. All of the forest areas of Tasmania are replanted naturally, and the new growth reaches maturity every 25 years. I know of no other area in Australia in which that happens. After the veneer woods have been cut out and cleaned up in the Queensland forests, a long time must elapse before the new growth is ready for exploitation. That is also the experience in the Victorian forests’.

Sitting suspended from 7.22 a.m. (‘Thursday) to 12 noon.

Mr BAKER:
Griffith

.Resultant from the accession of this Government to office, the budget debate has been postponed until a considerable portion of the financial year has elapsed. This course is to be deprecated and is in marked contrast with British procedure. In Great Britain the day upon which the Chancellor of the Exchequer brings down his first, budget is regarded as the greatest in his political career, unless possibly he later attains to the office of Prime Minister. But even if the Chancellor of the Exchequer in Great Britain holds office for some years, the presentation of the budget is always a notable event in his public life, and is of considerable interest to the people generally. The Lyons Government is becoming more and more lackadaisical in regard to the introduction of the budget. Its record in this respect compares very unfavorably with that of the Scullin Government. Despite the fact that Mr. Scullin’s Labour administration was in office during one of the most serious crises in the history of the Commonwealth its first budget was introduced on the 9th July, 1930, only nine days after the conclusion of the previous financial year, and it was passed through Parliament by the 4th August, a little more than one month after the close of the previous financial year. In the following year the budget was introduced on the 10th July, and the Estimates had passed through the House of Representatives by the 30th July; this, too, despite the fact that the Treasurer had been called upon suddenly to resign and Mr. Scullin who was also Minister for External Affairs, had to assume the office of Treasurer at 48 hours’ notice. I invite honorable members to compare his splendid record with the sorry plight of the Lyons Government. Apparently it is the deliberate intention of the present Treasurer, as obviously it was the intention of earlier Treasurers in the Lyons Government, to delay the introduction of the budget and postpone as late as possible, the discussion by Parliament of the Government’s financial policy. Whereas the Scullin Government was able to bring down its budgets promptly and pass them through this chamber after full discussion within a month of the close of the previous financial year, this Government prevents discussion by Parliament until, as now, nearly one half of the financial year has expired. But for the fact that Supply will be exhausted at the end of this month, it is probable that the Government would have delayed consideration of the Budget and Estimates until even later in the year. In principle, Parliament is the keeper of the purse. This is the foundation of our system of parliamentary government and of the democracy of which we speak so glibly. Parliament in principle authorizes the levying of taxes required to carry out the business of the nation. In order that effect may be given to this principle it is essential that Parliament be given an opportunity at the beginning of each financial year, to discuss the Government’s financial proposals. The attitude of the Government in this matter is in keeping with its attitude when it poses as a supporter of democracy and at the same time appoints an inner cabinet of seven, three of whom will have complete control of policy. While claiming to be a democratic government, the Lyons Administration is endeavouring to break down this system. It is quite obvious that Ministers do not care what happens to the legislation which they bring before Parliament so long as they are permitted to remain in office. The Government introduced a bill to reconstitute the InterState Commission, and has allowed it to lapse. A promise was given that the recommendations of the Royal Commission on Monetary and Banking Systems would be given effect by the introduction of a measure to provide for the establishment of a mortgage and investment bank, but we have not yet seen that bill, even although it was stated to be merely a preliminary to the general implementing of the recommendations. For the last seven years the Ministry have been promising the consolidation of various Commonwealth legislation, but nothing has been done, although in some cases bills have been introduced. All that the Government is able to give the people is promises.

The introduction of measures dealing with monetary and banking reform is essential, because closely correlated with this problem, are such important subjects as defence, unemployment, and many others. For this reason honorable members on this side have continually urged that radical alterations should be made in the monetary system of the Commonwealth. It now seems that our policy has attracted converts from the ranks of Government supporters, led by Mr. Stevens, the Premier of New South Wales. Mr. Stevens has made suggestions with regard to the expansion of credit very similar to proposals advocated for many years by the Labour party. Mr. Stevens who, it is suggested, may shortly enter the Commonwealth Parliament, was for some years permanent head of the Treasury in New South Wales. Therefore we may assume that he has a thorough knowledge of public finance.

Another interesting matter which apparently is not now considered of sufficient, importance to warrant more than a few lines in the press is the fact that the Commonwealth Bank, a few weeks ago, agreed to underwrite the present conversion loan of £70,000,000, which includes £4,000,000 for defence. In the past in conservative circles there was considerable doubt as to the propriety of the Commonwealth Bank accepting this responsibility, but apparently they have been resolved and the proposal is now regarded as so orthodox as to call for only brief mention in the press. Had one no knowledge of the rapid changes that have taken place in the political opinions and ideas held by Government supporters, the present attitude of the Commonwealth Bank might appear paradoxical, because only seven years ago when members of the Labour party suggested that a conversion loan of only £27,000,000 should be underwritten by the bank, the idea was ridiculed. The present Prime Minister (Mr. Lyons), who was PostmasterGeneral in the Labour Government, held, in opposition to the majority of members of the party, that it would be impossible for the Commonwealth Bank to underwrite the whole of that loan, yet to-day the bank is able to underwrite the present conversion loan of £70,000,000 and only the briefest mention of it is made in the press. In the past suggestions of Labour members for monetary reform have been sneered at by honorable members supporting the Government. Now, apparently, they are coming round to our way of thinking.

The greatest tragedy with which the world is faced to-day is unemployment. If the world as a whole, or if any individual country, dealt intelligently with this problem, unemployment would be regarded not as a tragedy but as a boon, because for 2,000 years mankind has been looking forward to the time when machines would reach such a standard of efficiency as to perform at least the arduous labour now done by hand. There is not, however, within the ambit of our present economic system, the answer to the problem of supplying to those who do not perform some work the wherewithal to purchase food and clothing and other necessaries of life. Suggestions have been made for the reduction of the working week to 40 hours or less. In my opinion the time is not far distant when the hours of labour in industry will be reduced not merely to 40 weekly, but to a figure much less than most people imagine is possible. Because adequate supplies of foodstuffs and other necessaries of life can be obtained only by those in employment, it is essential that employment be provided for every person in the community able and willing to work. The Labour party contends that that could be done by the adoption of a comprehensive programme of public works. Such a policy has been advocated consistently prior to and since the last depression; but when first put forward by Labour members, not only in this country, but also in Great Britain and in other parts of the world, it was condemned in the usual manner as a fantastic dream. In many parts of the world, however, those who most bitterly opposed the suggestion are now its most ardent supporters. In the last report of the International Labour Organization, published some months ago, and largely reproduced in Current Notes on International Affairs, which is under the auspices of this Government, it is admitted that reform of our monetary system, and the provision of public works by means of credit expansion are the only means by which unemployment can be substantially and permanently reduced. I wish to read at some length from an article written by Mr. E.R. Walker, a well-known leading orthodox economist, and published in theEconomic Record for December, 1935. Mr. Walker puts the position as well as it can be put. He states in his article -

Advocates of public works as a measure to combat general unemployment have fought a long, and, in several countries, a winning battle against a whole series of arguments designed to show the futility or danger of such a policy. In this article the rebuttal of some of these arguments will be briefly restated, and the conditions which are necessary if public works are to make their greatest possible contribution to recovery will be dealt with in more detail.

The first obstructive argument of any importance was that known in Great Britain as “ the Treasury view “ namely, that public works, instead of adding to the volume of employment, merely divert resources from private employment to public employment. Whenenunciated, in 1920, by the Conservative Government of the day, it was faithfully dealt with by some of the Cambridge economists; and its irrelevance to a period of general depression has become patent to all who have grasped, with Mr. Keynes, the possibility of investment varying independently of voluntary saving.

In this Parliament yesterday, an honorable member who supports the Government, and is probably the most qualified member of the House to deal with this subject - Irefer to the honorable member for Darling Downs (Mr. Fadden) - submitted an argument which could almost as well have come from the Opposition benches. His views are in strong contradistinction to those of the Government, and are supported by E. R. Walker,

M. Keynes, Pigou and other wellknown conservative, orthodox economists. Mr. Walker goes on to say -

The destruction of this argument drove opponents of public works back to the protest that even though public works may reduce unemployment, they are too costly.

He shows that that is an incorrect contention, because it could be conservatively estimated that, for every person given employment by means of public works, at least one other person would receive outside employment. Of course, this would tend to increase the revenue resulting from taxation, and, therefore, the argument against the scheme on the ground of its cost is not sound. Mr. Walker continues -

On the other hand, to estimate the cost of public works in terms of monetary expenditure, or in terms of interest charges on future budgets, is incomplete and misleading. For the community as a whole, public works cost only the other goods and services which would have been produced with the same resources if they had not been devoted to the works in question. When resources are already fully employed, an expansion of public works can only be obtained by withdrawing resources from other avenues of production, and the production forgone may or may not be as valuable as the public works acquired. At such a time public works programmes require careful scrutiny if waste of resources is to be avoided. But during a depression, there arc unemployed resources available, and provided that the public works can he completed and the secondary demand for goods satisfied solely by using resources which would otherwise be idle, the public works cost nothing at all in terms of forgone production. In practice it may be difficult to ensure that works will be costless in this sense; this problem will be considered below.

Yet there will be a financial cost involved, even if no production is foregone. The simplest way of dealing with this financial cost is, of course, to “ finance “ the public works out of interest-free loans from the central banking system, but the more usual method is to raise loans in the ordinary way, on the best terms which the Government can get from the market.

He points out that interest charges and, possibly, sinking fund commitments would then have to be met by means of taxation. This is the more usual method. Assuming that there was a large number of unemployed, as there is in Australia to-day, the money required to put them back into employment could be obtained from the central bank, either interest free or at a very low rate of interest. The author also states that the more usual custom, which is adopted for no other reason than that it has come into being with the present banking system, is to raise the required money by means of loans followed by the imposition of taxes to cover interest charges, and perhaps, to establish a sinking fund for the repayment of the principal. All political students know that .governments, throughout the world, except in a few countries, are controlled by the wealthy interests. It is only necessary to read the lists of directors of the banks and other large financial institutions to see that they have financial interests in common. The names of members of governments in Australia are found on the directorates of financial institutions, and in Great Britain are the names of many Ministers of the Crown who resigned from directorates only when appointed to the Ministry. These interests are also linked up with newspaper combines. That is the sole reason why this Government always follows the so-called usual method of borrowing money from private institutions and individual’s.

I concur, to a great degree, in the suggestions put forward yesterday by the honorable member for Darling Downs. There are three methods by which the necessary funds, could be raised. In the first place, where the unemployed are numerous, the problem should be approached by the extension of bank credit until the unemployed have been put back into reproductive work In the second place, works which are not reproductive, such as the great defence works now contemplated in the Commonwealth, should be financed by means of taxation. Thirdly, as suggested by the honorable member, when dealing with an instrumentality that is capable of showing a considerable profit, and rapidly -repaying the money, borrowed for its establishment, in a time of emergency it might be advisable to borrow the required money and pay interest upon it. But the second and third methods indicated do not afford a solution of the problem presented by the fact that approximately 200,000 persons in Australia aTe unemployed to-day. Proof of dissatisfaction with the present banking system is furnished by the fact that, in recent years, Canada, New Zealand, Tasmania and the Commonwealth of Australia have caused inquiries to ‘be made into the advisability of monetary reform. A few years ago, Great Britain also had a similar inquiry, and, not long before that, a further investigation was made as to the monopoly developing among the banking interests which are now included in the London group known as “ The Big Five “, which controls by far the greater part of the banking activities of Great Britain.

It will be remembered that the Government promised to implement the recommendations of the Royal Commission on Banking and Monetary System. At least one of those promises was made by the Treasurer (Mr. Casey), before he knew what the commission’s recommendations would be. He thought that he was on safe ground, because at least five of the six commissioners appointed by the Government were the chosen of the chosen - the most orthodox that orthodoxy could produce. The Government was well satisfied that these men of its own monetary faith would bring in a report in favour of the present system. It was a tremendous blow to the Government and to the banking interests when that commission submitted a report almost wholly in criticism of the present system. At the conclusion of the report it would appear that the commissioners, having definitely expressed their real opinions, had then realized that they had gone somewhat too far to suit the Government that had appointed them. The adoption of their ideas woud inevitably result in the nationalization of banking, and, at the last moment, realizing this, but aiming to reassure the Government and private banking institutions, they drew back, and all except one of the commissioners said, “We are opposed to the nationalization of banking”. Because of the inevitable result of the adoption of the recommendations, the Government, despite public opinion, now ignores the report.

It is amusing to find that, when the report was first issued, some of the leaders in the banking world saw only that the nationalization of the present system wa3 not favoured by the commission, and they rushed into print in support of its finding. The Sydney Morning Herald was foremost among those who praised the report. Apparently, the understudies who had been told to make a summary of the report selected only one or two points, and did not- realize the full significance of the recommendations. The Treasurer evidently does not consider that the report is favorable to the present banking system, because he called into conference the representatives of the various banks to decide whether anything should be done to clip their own wings! In this country, where we are seriously concerned with the problem of defence, if we had reason to believe that a nation which wa» supposedly friendly was likely to attack us, we might cause an inquiry to be made, say, by the secret service of Great Britain, or Australia. The reply might be, “ You are right in 99 per cent, of your suspicions. The power to which you refer is the greatest enemy you have “. What would any authority with disciplinary capacity do in such a case? It would .immediately approach the Government and inform it that 99 per cent. of such interests were opposed to the national well-being. Any government worth its place would, in that event, act swiftly. That such a Gilbertian situation should be allowed to continue is inconceivable.

Yet, impossible as it may seem, our Gilbertian banking policy is being allowed to continue. Had a report of this kind been furnished under a dictatorship an alteration would have been made at once. But democracy in Australia finds itself in the unfortunate position to-day of having a government in office, which is concerned mainly about place, and pelf and power. Certainly, it devotes very little consideration to the good of the mass of the people. This commission brought forward the most damning report ever presented by such a body, yet the Government which appointed it, and gave what amounted to an assurance that it would implement its recommendations, simply sits back with folded hands and continues to enjoy the sweets of office. The commission condemned our private financial institutions in the plainest possible terms, but because the Government looks to them for financial and political support, it will not take any action. I hope that before long a government will assume office which will act in conformity with the commission’s recommendations, and perhaps go even further.

Let me summarize the commission’s findings concerning the private banks in this way: First, the banks did not foresee the depression. In support of this contention I cite paragraph 113 of the report. Secondly, the banks made the depression more severe by their determination to keep Australian exchange at par with sterling. That is evident from paragraphs 115 and 351 of the report. Thirdly, the banks were wrong in preserving the illusion of the gold standard after Australia had departed from it. Paragraph 553 of the report makes that abundantly clear. Fourthly, the banks acted in their own interests and were the first to show signs of recovery. That view is supported by paragraph 196 of the report. Fifthly, the banks must bear some responsibility for the extent of the depression. My justification for this observation is paragraph 565 of the report.

Was there ever a more damaging indictment of a great instrumentality than this report is, particularly when it is realized that finance controls our whole social mechanism and economic system? The financial current is to our commercial system what the blood current is to the human body. If one should be cut off the other must perish. Yet the happygolucky Government that is in office has so far declined to take any action whatever in connexion with this report. It has simply left it to the private banking institutions to expand, or diminish, or completely cut off credit, as they think fit. We talk about the potential enemies of this country overseas, but in fact we are harbouring worse enemies within our own borders. Any government worth its salt would have stood up against these private financial institutions long ago and brought them to heel.

What had the commission to say concerning the Commonwealth Bank, which should be a good government institution, but is in fact the reverse? Definitely; the Commonwealth Bank is not the institution that it was intended to be when it was established by the Labour party. It could be a great instrumentality for the benefit of the whole nation, but at present it is merely a bulwark for the private banking institutions. I summarize the fundings of the commission in respect to the Commonwealth Bank as follows* - First, this bank was slow to assume its responsibilities, and slow to act, for the reason that it was operating practically under the instruction of the private banking institutions. I cite paragraph 540 of the report in support of this contention. Secondly, the Commonwealth Bank in the early years of the depression acted in exactly the opposite way to what might have been expected to produce the best results. We might reasonably have anticipated that the bank would warn the people in general of the approaching crisis, in which case the development of boom conditions could have been checked and the severity of the depression reduced. Monetary measures alone did not produce recovery, but undoubtedly their effects would have been greater had they been taken earlier. It was not until 1932, apparently, that the Commonwealth Bank did anything in regard to the depression. It then “ permitted “ the Loan Council, which, of course, means the Commonwealth Government, to consider the policy of limiting its loan programme for public works. According to paragraph 157 of the report the trading activities of the Commonwealth Bank *’ showed no trace of expansion during the early years of depression and no trace of contraction during the latter part, but rather point in the opposite direction.” This seems to me to be an appalling indictment. Thirdly, the bank showed a reluctance to take the initiative in any direction except that of giving directions to the Government. Has such effrontery ever before been heard of in any civilized community concerning the relations of a Government bank with the Government that should control it? To put it in another way, the Commonwealth Bank showed no initiative or daring except when it found a foeman weak enough to be attacked. The weakling was the “ allpowerful “ Commonwealth Government. The Government could have resisted the attack, for the plea of constitutional limitations could not possibly be offered in this instance. Put a little more bluntly, the policy of the Commonwealth Bank at this period was one of voluntary cooperation with the private banks, but one of compulsion in its dealings with governments. Fourthly, according to para- graphs 548 and 549 of the report, the bank, by its cautious attitude, respecting treasury-bill finance and its insistence on funding short term loans by converting them into long term loans, may actually have retarded recovery. Fifthly, as a matter of actual fact, the Commonwealth Bank permitted the private banks to dictate its policy. Sixthly, the Commonwealth Bank was, in general, responsible for the policy of deflation. In other words, it deserves blame for most of the suffering of the people during the depression. Those are not my words; they are the words of a politically-biased anti-labour commission, which, at the request of this Government, made an expensive investigation a year or so ago into our whole banking and monetary system. Seventhly, the Commonwealth Bank, according to paragraph 558 of the commission’s report, is entitled to very little credit in the recovery.

I should like to have dealt with other aspects of the commission’s report, but as my time is short I shall now devote some attention to defence matters and, if possible, certain constitutional issues.

– I am afraid that lack of time will prevent me from developing my ideas on this subject, but I suggest that compulsory military training will never be successful, and that, therefore, we should concentrate our efforts on the development of a permanent, mechanized, mobile force. At present the total strength of our permanent army, including officers, cadets and other ranks, is only 2,609. If we wish to see an adequate defence force in existence in this country, we must take every possible step to provide equality of opportunity therein for all classes of citizens and make the living conditions here so attractive that our young men will feel that it is worth while to prepare to fight any possible enemy so that they may preserve their country inviolate.

Sitting suspended from 12.45 to 1.30 p.m.

Mr SPENDER:
Warringah

.- I am giad to have this opportunity to express my views in short compass upon the proposition made by the right honorable member for Yarra (Mr. Scullin). I desire to inform him that he has my unqualified support. I believe that a convention to discuss the imperfections of the Constitution is long overdue. As the right honorable gentleman pointed out, the deficiencies of the Constitution have been known for a considerable time. The subject-matter of some of the points dealt with by him and the AttorneyGeneral (Mr. Menzies) were discussed, and dealt with in part, at the conference between the Commonwealth and States in 1934. It is significant that the suggestion for a special constitution session should have come from the right honorable member for Yarra, and I congratulate him upon what he has done. He has rendered a service, not only to this Parliament, but also to the nation at large. As the result of his representations there will be such a session of this Parliament at which, I trust, unity will be achieved regarding proposals to extend the powers of Parliament, so that a consolidated case may be placed before the people.

It has always struck me, as a lawyer, particularly when I have been concerned with constitutional cases before the courts, how totally inadequate is our Constitution. It is an anomaly that a so-called sovereign Parliament should be denied power to deal with such important national matters as health, industrial and working conditions - which are so closely associated with tariff reform - and unemployment. The framers of the Constitution regarded it merely as a tentative and evolutionary step in the formation of a nation, as is evident from their speeches. That being so, it is strange that, throughout the whole period of federation, so little effort has been made to deal radically with the problem. It is my desire to see this Parliament vested with complete and plenary powers, exactly the same as are enjoyed by the Parliaments of New

Zealand and Great Britain. When I am told that that would mean the abolition of the States,I do not shudder at the prospect. Indeed, I hope that the time is not far distant when the States will completely disappear. That need not, and does not, mean that we shall have only one centralized Government. I believe that there should be vested in this Parliament complete sovereign power, but that would not prevent the setting up of federal units - not the same as the States - to which this Parliament would delegate powers in regard to local functions and be able, if it so desired, to control the exercise of them. Australia must develop along those lines to achieve full maturity.

There is no rational reason why the States should be maintained. Their development was fortuitous. The boundaries of the States were marked out without any regard to economic or topographical consideration. In 1788, when Phillip was given jurisdiction, it extended over Queensland, New South Wales, Victoria, half of South Australia, and onethird of what is now known as Central Australia and the Northern Territory. That arrangement, one realizes, was due to expediency. It was done because of the nature of the first settlement. Then, when Darley was appointed Governor in 1825, the boundaries of his jurisdiction were exended to the129th meridian. This again was a matter of expediency, to include Melville Island. In 1829, Fremantle took possession of the western half of Australia, and there were two jurisdictions in the continent. In 1834, the province of South Australia was established ; in 1851 Victoria, as the result of Batman’s settlement at Port Phillip, was made a separate State, and in 1859, Queensland was established. Thus, an historical survey reveals that no consideration was given, in the formation of these units, to economic factors, or to any other factors which would necessarily govern the formation of similar units at the present time.

There is no reason, therefore, why State boundaries should persist, and I hope that the people, with the cooperation of their representatives in this Parliament, will be persuaded to vest in the Commonwealth Parliament complete sovereign powers, because, without them, we can never develop to the full stature of nationhood. It is clear from the speeches of Sir Henry Parkes and Sir Samuel Griffith that it was the objective of these framers of the Constitution that there should be one parliament clothed with absolute power, capable of dealing in an absolute manner, legislatively and executively, with all the affairs of the country. Moreover, at the time the Constitution was framed, we had not acquired the status as a nation which we now possess. We were then, as we still are legally, delegates exercising power remitted to us by the Imperial Parliament, but our condition has changed tremendously in the meantime. Thirty-eight years of federation has resulted in a progress which was not envisaged by the framers of the Constitution, so rapid has it been. Population has doubled in that time, and the tempo of modern affairs, the changes in international relations, and the industrial and scientific development that has taken place, make it all the more anomalous that this Parliament should lack power to deal with so many matters of importance to the country. Since I have been a member of this Parliament I have had impressed upon me repeatedly how parliament is inhibited by the strings of the Constitution.

It appears to me that, since federation, the State barriers, rather than having been broken down, have been consolidated. Looking at these matters as a lawyer, and being able to gauge what is behind many of the acts passed by State parliaments, I have become convinced that barriers of customs were small matters in. the division between the States compared with the barriers created by certain State legislation such as, for example, transport acts.

I had the privilege of appearing in what I think was the leading transport case, known asVizzard’s case, at which this Government was represented, when an interpretation was sought of section 92 in relation to transport between the States. Although the point was fully argued, I regret that no very illuminating light was thrown on the interpretation of that section. Recently the Privy Council has given us a general lead as to what it does mean, but there still remains doubt regarding its application to specific facts. I do not challenge - and indeed it would be impertinent for me to do so - the decision of the High Court in Vizzard’s case, but, as a citizen, I much regret it. It appears to vest in the States remarkable powers which I doubt very much that the framers of the Constitution ever meant them to possess. It gives them power to mark out State boundaries in a more definite manner, and to preserve State entities more rigidly, than was contemplated even before the Constitution was framed. I felt that the act which was designed, so far as its title indicated, to co-ordinate transport, had as one of its definite purposes. the prevention, as much as possible, of transport by road between New South Wales and Victoria. As a New South Wales man, I see no merit in the geographical boundary at the Murray, which makes the area on one side of it New South Wales, and that on the other side Victoria. I see no reason why people in the Riverina, citizens of Australia, should not be able to transport their goods to Victoria if it is cheaper and more advantageous to do so than to transport them to Sydney. Yet the relevant Transport Act gave power to prevent - not in specific words, but indirectly - any one from transporting goods from within the State to a point outside. It seems clear to me that, in this respect, we are departing from the essential principles of federation. When the States sought to introduce quarantine regulations under their residual powers, it was suspected that they were trying to overcome the provisions of section 92 of the Constitution. Despite the recent decision of the Privy Council, I suspect that there is more than one State in the Commonwealth at the present time trying to overcome this section in regard to the regulation of trade and commerce. The section provides that “trade and commerce between the States shall be absolutely free. Yet some States seem to be resorting to a subterfuge to defeat that provision, though they cannot be challenged because the necessary evidence is not forthcoming. Let me give an example of what I mean. When the Commonwealth marketing legislation was declared to be invalid by reason of section 92 of the Constitution, there were introduced several price equalization schemes, and because they are not legislative or administrative acts of any parliament, and, in addition, are allegedly voluntary in character, they are outside the terms of section 92. There are, however, acts such as for instance, State dairy produce acts, which require that before a person may produce or manufacture butter or cheese he must first possess a licence, and power is given to a Minister or a statutory authority to refuse a licence without assigning any reason whatever. In cases that have come before me I have no doubt whatever that licences have been refused, without any reason being stated, because the person seeking the licence declined to participate in an equalization scheme. The result is that they can obtain licences only on the condition, unexpressed, that they join in the equalization scheme. That results in practice in compulsory pooling, pooling, in point of fact, almost the same as that which was declared invalid by the Privy Council.

These matters indicate how vital in respect of constitutional matters it is that there shall be no further creation of rigid State barriers. I believe that we, as a nation, must break down those barriers. There is too much State law and State outlook. We must have a national outlook rising completely above State considerations.

Some of the matters referred to by the right honorable member for Yarra (Mr. Scullin) and the Attorney-General (Mr. Menzies) show precisely the quagmire of doubt and difficulty in which the Constitution has involved us. There are two ways in which to approach the matter. One is to clarify, if one can, the actual powers distributed between the States and the Commonwealth. That, at least, would be a worthwhile job. The other is to increase the powers of the Commonwealth, even to the degree, I hope, of giving it total plenary powers, decentralization being effected bv a delegation of specific powers to federal units. That is, I think, the correct and only logical way in which the nation should develop. It would not mean unification as generally understood. No one would suggest that from Canberra we could direct every activity throughout Australia, but what we do require is the vesting of plenary powers in this Parliament, so that it could, at least in respect of certain public matters affecting local administration, delegate powers to new federal units, which would not require parliaments. Without expressing, at this stage, any qualifications, I applaud the scheme outlined by the right honorable member for Yarra. The views he expressed coincide generally with the views that I hold.

In our approach to the problem of constitutional revision, our first problem may well be: Is it sufficient to clarify the powers that are given to the States and the Commonwealth, or is it better, as I believe it is and hope for, to go farther and increase the powers of the Commonwealth? In respect of that there are two considerations. One i3 whether, if we maintain the States system, we should alter the State boundaries. If we do maintain the States system, the boundaries should, I think, be altered. Alteration of the State boundaries, of course, is the subject of an inhibition of the Constitution which requires the consent of the people of the States. The second is the question of the redistribution of powers between the States , all(1’ the Commonwealth. I, who have some little experience of the difficulties which have arisen in the interpretation of the Commonwealth Constitution, am wholly opposed to concurrent powers existing between the States and the Commonwealth. Every lawyer knows how difficult it is when there are Commonwealth and State acts dealing with the same subjectmatter to apply the rule of inconsistency as laid down by the High Court. I should prefer that specific powers be given to the States and that the Commonwealth should have the residual powers. I believe that that would prove to be much more effective than the present system under which the Commonwealth has some exclusive powers, and holds other powers concurrently with the States) whilst the States have the residual powers. When the Constitution was created, we had the delegation of certain sovereign powers to the Commonwealth and the States. The States within their domains are sovereign and the Commonwealth within its domain is sovereign, and yet the Commonwealth Parliament is totally unable to deal with urgent prob lems, such as health and unemployment, because of constitutional limitations. . That to me is lamentable, and I do hope that out of the suggestion made by the right honorable member for Yarra there will arise a powerful national spirit which will seek, without consideration of party or States, to advance the common cause of the nation, so as to give to this Parliament powers to deal with matters of paramount importance.

The Attorney-General referred to fisheries. As the right honorable gentleman pointed out, the Commonwealth has no power to legislate except in respect of fisheries, beyond the territorial limits of the States. For my part, I do not know yet what are the territorial limits of the States. A year or so ago I had to argue a matter which arose out of the Fisheries Act of New South Wales. It was at that time borne on me how difficult it was to determine very definitely in respect of the States, which were created as colonies before the creation of the Commonwealth, whether the territorial limits extended beyond the low water mark, to the narrow seas, or to the 3-mile limit, or beyond. I do not think that anybody can say with certainty at what point the State jurisdiction ends. If that be so Low can we determine where the jurisdiction of the Commonwealth begins? In that we are completely befogged. I cannot conceive of anything more hopeless than to continue under an outworn constitution, one that was never intended by its founders to last unaltered for all time, but was so framed and moulded that changes might be made to meet the growing needs of the nation. Yet after 38 years nothing substantial has been done to alter the same. I believe that the people of this country desire that this Parliament, which represents the nation, should be given additional powers. It is no doubt debatable as to what extent they should be expanded, but I hope that they will become wholly plenary and that the Commonwealth Parliament will have the right to delegate powers to federal units.

I am satisfied that the people are sick and tired of the no man’s land which exists between State and Commonwealth jurisdiction, and that area which neither the Commonwealth nor the States seek to claim, one saying to the other, “ This is yours and the reply being “ No, it is yours “. What is colloquially known as “ passing the buck “ has occurred too often in the history of Commonwealth relations with the States, Further, I do not believe that any sound system can be expected to arise from conferences seeking co-ordination between the Commonwealth and the States. Necessarily there are varying views. One does not blame State Premiers who bring to conferences at Canberra State problems which they see only in State perspective. That is understandable because they are answerable to the people of the States, and in the same position I should feel tempted to base my opinions on State consideration rather than on Commonwealth considerations. The States are often represented by Min- isters of divergent and opposite political views, and, in addition, the Parliaments of the States have to answer to their electors at different times. When men subject to those limitations come together it is impossible, no matter what goodwill they may have towards each other, to obtain more than a compromise. We have had too much compromise, and too little direct action to resolve the problems of the country. That failure is due to a large degree to the limitations of the Constitution.

In regard to another matter referred to by the right honorable member for Yarra and the Attorney-General, namely, the working conditions in this country, I should have thought that the necessity for this Parliament having complete control was obvious, and beyond argument. There is, for example, overlapping in respect of industrial conditions in industries. The employees are frequently uncertain where their rights are determined, or what they are, because there are different awards to govern people employed in the same occupations by reason of their belonging to different organizations. I can conceive of nothing more inimical to progress than that.

It is absolutely essential for the proper manipulation of a tariff policy that control of the working conditions of the people - which play an important part in the cost of the manufacture of articles - shall be vested in this Parliament: and I hone that that result will be achieved following on the forthcoming convention which has been foreshadowed by the AtttorneyGeneral.

Wim few exceptions proposals for con stitutional reform which have been referred to the people in past years have been rejected by them, but 1 believe that there has developed in recent years a more definite national spirit. To a great degree the rejection of the proposals to give additional powers to the Commonwealth has resulted from a number of considerations that can be obliterated. One is the advancement of State interests. 1 hope that every honorable member of . this Parliament rises above that, and I believe that in discussion on non-party lines we can achieve some measure of unanimity, under which we, as members of this Parliament, irrespective of party convictions, can place the case for reform before the people. If that be done I believe that the people will be ready to accept our proposals. Secondly, I am convinced that too often in these matters the people have not had the proposal placed before them at the appropriate time. Instead- of the submission of a general scheme for constitutional revision, proposed amendments have been directly associated with specific legislation to which the people took objection. I instance the referendum on marketing powers which was recently rejected by the people because they objected, not to the increase of the powers of the Commonwealth, but to the marketing legislation. Had the aviation referendum been submitted to the people as a separate issue I believe that it would have been carried.

Any approach to this matter of constitutional reform requires unanimity on the part qf honorable members. It is our duty to ourselves and the nation to achieve unanimity because unless we are able to combine in an appeal for additional powers, then no matter what our individual view, we can never persuade the people to consent to what we ask. We should stand for the powers of this Parliament, and ‘in standing for them I have no doubt we can advance a case, which, if it be placed properly before the people, will prove accept* hie to them.

I do not desire to elaborate in detail the views that I hold on certain matters of reform. In general they have been outlined by the right honorable member for Yarra and the AttorneyGeneral, but I feel that, apart from the people accepting by way of referendum any proposal to add to the powers of the Commonwealth Parliament, there are still open to us two other means by which we can increase our powers. I am one who believes that it may well be found in the end, if we cannot achieve unanimity amongst ourselves and between the Commonwealth and the States, that the fiscal powers of this Parliament will be found to be the key to enlargement of Commonwealth powers.

Mr Blain:

– Blackmail.

Mr SPENDER:

– In my view it is not blackmail. That is an ugly word, and there is no virtue in using it in this chamber. I believe that the fiscal power was given to us to use in the best interests of the Commonwealth.

Mr Gregory:

– Oh!

Mr SPENDER:

– And when I speak of the Commonwealth I speak not of an aggregation of States, but of an aggregation of people, irrespective of State boundaries. The fiscal power was given to us to exercise in the best way we can in the interests of all, giving proper consideration to those who have special difficulties in certain areas, such as Western Australia. Such matters can all be dealt with by proper exercise of our fiscal powers. It is my belief that, whether we ask the people for additional powers or not, we should have the definite power to decide where and how money derived by the exercise ofour fiscal powers should be expended. The fiscal powers should be used for the benefit of the nation at large. Another direction in which power may be given to the Commonwealth - although it is open to debate - is worthy of consideration, namely, the use of our external affairs power to make conventions overseas. These conventions may attract to the Commonwealth powers which have not been specifically given to it. That is a matter which is worthy of the consideration of this Parliament.

I believe that the suggestion made by the right honorable member for Yarra will prove to be historic. I trust that each of us, irrespective of personal views or State interest, will do his utmost in the interests of the nation.

Mr COLLINS:
Hume

.- The contributions to this debate have been many and varied ; they have touched on almost every phase of scientific, economic, and social life. A splendid address on the subject of constitutional reform was delivered by the right honorable member for Yarra (Mr. Scullin). Other addresses on the same subject by the Attorney-General (Mr. Menzies), and the honorable member for Warringah (Mr. Spender) followed. The subjects of unemployment, population, immigration, water conservation, and aviation also were referred to. I was sorry that the Government saw fit to apply the “ gag “ to the motion for the adjournment of the House, moved by the Deputy Leader of the Opposition (Mr. Forde), to discuss unemployment. I had pleasure in voting against the application of the “ gag “. Even though little constructive criticism was offered, and no solution was found, I am convinced that all members, irrespective of party, are striving to solve this problem, and consequently debate on the subject should not have been stifled. Figures were cited to show the volume of unemployment in the Commonwealth. I shall now give other figures setting out the present position: -

When we see figures of that magnitude, we cannot but regret that the Government saw fit to restrict the discussion. Governments, both Federal and State, are doing a great deal to solve the problem, but, in my opinion, it was wrong to apply the “ gag “ when only two speakers had expressed their views. I hope that such a thing will not occur again.

I regret also both the proposals to guillotine the budget debate, and the alternative adopted - a sitting which lasted from 2.30 o’clock yesterday afternoon until nearly 7.30 this morning, with only a short suspension before resumption of the debate at noon to-day. The best results cannot be obtained from men who are too tired to enter into the discussion intelligently. I shall never support the curtailment of debate in this way, unless I am convinced that obstructive tactics are being resorted to. I agree that stone-walling should not be tolerated when measures affecting the welfare of the nation are awaiting decision.

The discussion on constitutional reform introduced by the right honorable member for Yarra was most interesting. The right honorable gentleman gave the lead for which the people of Australia have been looking ever since the commencement of federation. When the Constitution was framed, the electors were promised that as soon as the new machinery was working smoothly, the State parliaments would be abolished. However, a person only requires to travel throughout the Commonwealth to realize how far some of the electors are from the seat of Government at Canberra. It might happen that a referendum would disclose that in New South Wales and Victoria a majority of the electors favour the abolition of State parliaments, but as it is necessary to have, in addition to a majority of the people, a majority of the States in favour of alteration, changes are not easily made. Particularly in the more sparsely populated States, the people do not seem to desire any change from the system of control by State parliaments. Nevertheless, I believe that the vesting of greater powers in the Commonwealth Parliament would be in the best interests of Australia. With greater powers delegated to local governing bodies, I am. convinced that better and more uniform results would be obtained than under existing conditions.

Australia needs population, not only for its development, but also for its defence, and, consequently, the greatest measure of encouragement possible should be given to those responsible for the administration of the Defence Department in order that this country may be saved for Australians and the white Australia policy preserved. I am convinced that little difficulty will be experienced in increasing the militia forces to 70,000. When the recruiting campaign, which has already been initiated by the Minister for External. Affairs (Mr. ‘Hughes), is in full swing, I am confident that the sons of Australia will rally to the cause, particularly when they know that they will be supplied with uniforms and will be paid for their services. I trust that the objective of the Minister will be achieved by voluntary enlistment. I hope that Australia will never be attacked by an aggressor, and also that we shall never again see an Australian army being transported overseas to war.

I listened with interest to comments on the reconstruction of the Cabinet, and was sorry that the honorable member for Balaclava (Mr. White), after six years’ association with it, should condemn the Ministry in this House. I am afraid that he will have a job to reconcile his actions.

Mr White:

– In what way?

Mr COLLINS:

– After six years’ association with the Cabinet, the honorable gentleman said that the affairs of Cabinet should be run on the lines followed by private enterprise. As the honorable member was a member of the Government for six years, he should have tried to introduce that system years ago. Only when he found that certain arrangements were not to his liking did he find fault with the system. He then criticized on the floor of the House the conduct of members of the Cabinet. In my opinion, that was most unfair.

Mr White:

– I put forward the suggestion many times in Cabinet, but only after I again became a private member could I speak of it publicly.

Mr COLLINS:

– I viewed with some apprehension the proposal to create an- other full portfolio, but when I heard of the multiplicity of the duties which fall to the lot of the Parliamentary Secretary to the Treasurer (Mr. John Lawson), I was prompted to interject that he should be made an assistant Minister immediately. I am now convinced that there is sufficient work to-justify the creation of an additional portfolio. Never in the 150 years of Australia’s history has the time of Ministers been more fully occupied. It has been said that some Ministers do too much work, and others too little. That is true both of human beings and dumb animals the world over ; the willing horse does most of the work. Consequently the able and willing man is always expected to undertake the major share of the work. The honorable member for Balaclava supported the creation of an inner group of the Cabinet, while he believed that he would be in that group, but when he was informed that he had been excluded he disagreed with his colleagues. These internal squabbles should not have been disclosed in this chamber by the Prime Minister, the honorable member for Balaclava, or the Deputy Leader of the Opposition. I am not blaming the Deputy Leader of the Opposition for the action he took in the matter. He reminded me of a hostile neighbour offering advice while a family brawl was in progress on the other side of the fence. Possibly he was anxious to secure some benefit from the ultimate clean up.

Mr Forde:

– I wanted to make a few friendly observations.

Mr COLLINS:

– The matter should never have been discussed in this chamber.

Mr Lane:

Mr. Lane interjecting.

The CHAIRMAN (Mr. Prowse.)There is too much disorder. The Chair insists that the Standing Orders be observed.

That progress be reported.

Mr Forde:

– In view of the application of the “ gag “ when the Opposition sought to debate the urgent problem of unemployment, we protest against the procedure now being adopted.

Question put. The committee divided. (Chairman - Mr. Prowse.)

AYES: 35

NOES: 26

Majority . . 9

AYES

NOES

Question so resolved in the affirmative.

Progress reported.

page 2037

WHEAT INDUSTRY ASSISTANCE BILL 1938

Message recommending appropriation reported.

Motion (by Sir Earle Page) proposed -

That the foregoing message be taken into consideration in committee of the whole House, forthwith.

Mr CURTIN:
Fremantle

.-I move -

That the word “ forthwith “ be omitted with a view to insert in lieu thereof the words “ at the conclusion of the consideration of the Estimates of Expenditure “.

I do so in order to enter an emphatic protest against the interruption of the budget debate, which it is now proposed to do in order to consider a message which will lead to a bill which ought not to be considered until we have concluded discussion on the financial position of the Commonwealth and have laid down the basis of the provisions which this Parliamentshould make for ordinary departmental services in respect of the current year. I know that legislation which will arise out of the consideration of this message in committee will involve not only the provision of assistance to the States, but also the adoption of a further taxing message; but, before we contemplate consideration of taxes in this piecemeal fashion we should first dispose of the budget in principle. I have said this before, but I have a suspicion that the reason why the right honorable gentleman has caused the interruption of the budget debate at this hour this afternoon is not merely to facilitate the examination of this message by honorable members, but in order that a copy of his secondreading speech may be reproduced in the afternoon press. He could have waited until the conclusion of the budget debate, and if that were decided to-day, as could conceivably be the case, he could then have moved whatever resolutions were necessary in order to bring down this measure. The Opposition is not opposed to assistance being given to the wheat industry. We believe such a step to be imperative, but we object to the humbugging and muddling which marks the consideration by this Parliament of government business. Thebudget debate has been repeatedly interrupted, yet, I suggest, the most important matters which can engage the consideration of Parliament in any session are the budget, the principles arising out of it and legislation which must emerge from it. As I believe that in principle the general financial policy of the Government should be approved by the Parliament before consequential legislation is dealt with, I move my amendment.

Sir EARLE PAGE:
Minister for Commerce · Cowper · CP

– I am rather surprised, first at the action of the Leader of the Opposition (Mr. Curtin) in objecting to this procedure, and secondly, at the reasons he has given, because no honorable member in this Parliament can fail to be aware of the need for the early passing of this legislation. A bill is to be brought down in conformity with a promise made to the Premiers of the various States that, as soon as possible after they had passed legislation dealing with the establishment of a homeconsumption price for wheat, the Commonwealth Parliament would immediately proceed to pass its complementary legislation. The position is, as I have already informed honorable members, that four States had already passed their legislation when the conference of Premiers was held some ten days ago. The Premier of Tasmania wired the Government that a bill would be passed by the Tasmanian Parliament on Tuesday last. This is the first opportunity that has arisen for this Parliament to deal with this matter.

Mr Curtin:

– Has Victoria passed its legislation?

Sir EARLE PAGE:

– The bill has passed the lower House and is now under consideration in the upper House.

Mr Curtin:

– That is one of the points which moved me to make this protest.

Sir EARLE PAGE:

– I am glad to know that that is the honorable gentleman’s reason for objecting to the interruption of the budget debate, but he did not say so a few minutes ago. It is rather interesting that he should have so quickly to change his ground. The position is that the wheat season has already started and it is imperative that, at the earliest possible moment, the Stat’e governments, the millers, the wheat-growers, and in fact, every one associated with the indus try should know exactly where they stand. To-day I received wires from the State Premiers asking me, if possible, to forward them, confidentially, the text of the Government’s proposals in this connexion, but the Government thought that it owed an obligation to the Parliament to make the first pronouncement in regard to them in the House as soon as possible and before their text was transmitted to the States. Mr. Forgan Smith, the Premier of Queensland, has wired the Government that, unless he is informed by to-morrow of the Government’s proposals in regard to. this matter, millers will have to cease accepting wheat for delivery. That also is the position in the other States. There is therefore every reason for urgency. The Leader of the Opposition submitted, as another reason why the consideration of this legislation should be postponed, that the Parliament should deal with the general taxation policy of the Government before the budget debate is interrupted.

Mr Curtin:

– I did not say that.

Sir EARLE PAGE:

Mr HOLLOWAY:

– The Deputy Leader of the Opposition brought forward his motion . for the adjournment of the House yesterday because he felt that, as the sittings of the House are so shortly to conclude, no other opportunity would be available to him. I remember that the Opposition was subjected to a good deal of criticism last year because it asked the Government in the dying hours of the sittings on the eve of Christmas to provide work for the unemployed. By the time the matter was disposed of, there was no time for the unemployed to get even a fortnight’s work before the festive season “started.

A second reason why I join in’ this protest is because, in my opinion, it is foolish and ridiculous to ask honorable members to hurry this legislation through. The necessity for haste in this matter is an indictment of the Government itself which should not continue to occupy the treasury bench. The Minister for Commerce said that this legislation must be rushed through because the State governments, the millers, growers, bankers and everybody associated with the wheat industry, in fact, everybody who gets a rake-off and farms the real wheat-farmer, are so vitally concerned in it, and the wheat-growers will not be able to get the assistance they require. Surely, if that is the real position, all this talk that has “taken place in the last three or four years about the Government re-establishing confidence in public opinion is so much nonsense. I cannot accept that as a real reason for the urgency of this bill. The Minister for Commerce frequently gives us lectures about the necessity for the adoption of scientific methods in Government affairs. He has also suggested that the Cabinet should consider itself as a kind of board of directors, and make long-range plans to give effect to Government policy. Yet the honorable gentleman is now seeking to interfere in the most casual way with the orderly progress of business. I strongly protest against his action.

Mr JAMES:
Hunter

.- I also protest against this proposed interruption of the budget debate. The plight of the wheat-growers is not nearly so serious as that of tens of thousands of unemployed industrialists in this country. The wheat-growers have never had to come cap in hand to governments for a dole, but industrialists who lose their employment are forced to accept the dole. I protest against the postponement of the budget debate also because it is a further expression of the policy of intimidation and dictatorship that the Country party is implementing in respect of the United Australia party. The Country party loses no opportunity to imperil the progress of our secondary industries. It invariably asserts that the wheat industry should receive paramount consideration. We are quite prepared to treat the wheatgrowers justly and even generously, but we are strongly against the re-imposition of the bread tax, which will place an almost intolerable burden upon the working people of this country.

Mr SPEAKER:

– The honorable member will not be in order in discussing any subject except the time at which consideration shall be given to the message of the Governor-General.

Mr JAMES:

– Many of us sat here all last night, but very few members of the Country party did so.

Mr Fadden:

– Thirteen out of sixteen of us were here.

Mr JAMES:

– The Minister for Commerce was not one of them. I regret that the Country party assisted the United Australia party yesterday to apply the gag to the discussion of the important problem of unemployment. The Minister for Works (Mr. Thorby) was the only honorable gentleman in the

Ministry who thought the subject of sufficient importance to discuss it. We all know that the bill which the Government is now seeking to introduce will receive the strong support of the Country party, for some of its wheat-growing members in this Parliament will receive bounties if it should be passed. I have no desire to be personal on this subject, but it is well-known that some honorable members who support the Government have been paid bounties in respect of their wheat production in years gone by.

Mr SPEAKER:

-I must again ask the honorable member to confine his remarks to the subject before the Chair. It will not be in order for him to discuss bounties at this stage.

Mr JAMES:

– I lodge an emphatic protest against any interference with the normal order of business, and particularly against any further postponement of the budget debate. We are all well aware that if the bill which the Minister for Commerce now wishes to introduce is passed bounties will be paid to many individuals in this country who are at present in receipt of a taxable income.

Mr SPEAKER:

– The honorable member must obey the ruling of the Chair.

Mr JAMES:

– I protest against any interruption of the budget debate.

Mr WILSON:
Wimmera

.- I appeal to honorable members of the Opposition to allow the bill foreshadowed by the Minister for Commerce (Sir Earle Page) to be introduced without delay. I sympathize with their resentment at the “gagging” of the discussion of the unemployment problem yesterday, but I assure them that, from many points of view, some of which are of a technical character, the measure which the Minister for Commerce wishes honorable members to consider is urgent. I am well acquainted with the circumstances of many wheat-growers in this country, and I know that deplorable conditions exist in many wheat-growing areas. For this reason, I appeal to the Leader of the Opposition (Mr. Curtin) to withdraw his amendment.

Mr BAKER:
Griffith

.- The Opposition is strongly antagonistic to the proposal of the Government to interfere, at this stage, with the budget debate.

The sole reason of any importance advanced by the Minister for Commerce (Sir Earle Page) for the action he has taken was that he had received a telegram from the Premier of Queensland, Mr. Forgan Smith, asking that the passage of this bill should be expedited. No doubt the honorable gentleman has had experience of the brittleness of the promises made by this Government, and he is anxious that the measure should be passed without delay. The Minister for Commerce does not seem to realize that honorable members were required by the Government to proceed with public business throughout the whole of last night, and the majority of us have not had any sleep at nil during the last 36 hours. The urgency of the need to proceed with the debate on the budget is partly to be found in the fact that almost half of the financial year has now elapsed. The Lyons Government has never treated the budget debate as anything but a farce. In 1930, when the Scullin Government was in office during a more critical period than any other Commonwealth Government had had to face, the budget was brought down on the 9 th July, and the Estimates were passed on the 4th August, very little more than a month after the closing of the financial year. In 1931 the budget was introduced on the 10th July, and the Estimates were passed on the 30th July, within a month after the closing of the financial year. In 1930 the then Prime Minister (Mr. Scullin), who also held the portfolio of External Affairs, was called upon suddenly to assume the Treasurer’s portfolio on account of the sudden resignation of the Treasurer. Yet the right honorable gentleman prepared his budget in 48 hours. It is in accordance with the practice of the mother of parliaments - the British Parliament - the traditions of which this Parliament is supposed to observe, for the budget to be considered as early as possible in the financial year, yet this Government has delayed the consideration for so long that two supply bills have had to be passed. Unless the budget and Estimates arc finally dealt with by the end of this month the introduction of another supply bill will be necessary. In these circumstances, the Opposition is thoroughly justified in its protest against the proposal of the Government to interfere at this stage with the budget debate. What makes it all the more remarkable is that the right honorable gentleman in charge of the House (Sir Earle Page), who made us “ sit up all last night, is himself a medical man. I have always understood that the Minister for Commerce was opposed to all-night sittings, not only because of the inconvenience caused to honorable members, but also because they were definitely harmful to health, and because he regarded them as one of the major reasons for the shortening of the lives of many honorable members of this Parliament. I should not be surprised if the Government decided to keep Parliament sitting all night to-night, so that it may force honorable members, when they are unable to think clearly, to pass legislation which should have been passed four months ago, and which would have been passed then had the procedure advocated by the Labour party been adopted. There is no indication that this bill will be passed to-day, in any case. One reason for its introduction at this stage is that the Minister has already given information regarding it to the press. The Premier of Queensland, Mr. Forgan Smith, and others who have the interests of the wheat-growers at heart, want to know whether the Government proposes on this occasion to stand up to its responsibility, or whether this proposal will be treated as were the promises of the Government in regard to the mortgage bank, the patents bill, the housing scheme, and numerous other matters. The Government, in its endeavour to hold office, does not seem to worry whether its bills are passed or not. It is quite satisfied to bring them down, and if they are criticized by its supporters, they are simply dropped. Members of the Opposition have every sympathy with the wheat-growers; and the action of the Government which we are now criticizing docs not affect our intention to help the growers in every way possible.

Mr BEASLEY:
West Sydney

– The protest of the Leader of the Opposition (Mr. Curtin) against the action of the Government in interrupting the debate on the budget has drawn the attention of all honorable members to the undesirable methods of the Government when introducing legislation. The Government has been criticized from all sides of the House this session because honorable members have not had an opportunity to concentrate on the work of Parliament. If the business were brought down in an orderly “way, honorable members would be able to study the various measures, and follow them intelligently through all stages. The budget contains reference to certain legislation necessary to implement the decisions announced in the budget itself, but we have been called upon to deal with the legislation before the budget is finally disposed of. I trust that this protest will have the effect of compelling the Government to follow more orderly methods in the future.

I have been in this Parliament for eleven years, and every year the problem of assisting the wheat-growers has arisen. It is unfortunate that that should be so, but it has, at any rate, established the fact that no party can claim a monopoly of sympathy for the growers. The methods adopted in the past for assisting the growers have not been fair to the industry itself. Ill-digested legislation has been rushed through at the end of a session, and the problem has never been considered in all its phases. I sympathize with the honorable member for Wimmera (Mr. Wilson), who reminds us that the harvest is beginning, and that something must be done to let the growers know where they stand. My complaint is that the Government has delayed so long. Many things are involved in this matter of assisting the wheat industry. Fol instance, it cannot be doubted that the recent trade agreement between Great Britain and the United States of America will seriously affect the wheat industry in Australia.

Mr SPEAKER:

– The honorable member is digressing.

Mr Curtin:

– The amendment contemplates that, during the discussion on the budget, the honorable member would be able to discuss tho effect of the AngloAmerican trade agreement on the wheat industry before this bill is dealt with.

Mr BEASLEY:

– It is impossible to over-emphasize the importance of the wheat industry to Australia, and it should be dealt with by the Government in a more businesslike way. No doubt the Government has the numbers to carry its point on this occasion, but I hope that our protest will result in pressure being brought to bear upon it in the party room to alter its methods. We want to do the best thing by the growers, but the Government’s methods will have the tendency to harm, rather than assist, them.

Mr DRAKEFORD:
Maribyrnong

.- The protest of the Leader of the Opposition (Mr. Curtin) in regard to the Government’s proposal merely anticipates the protest that would have been made in any case from this side of the House against the procedure followed on this occasion and on many others during the debate on the budget. The reasons advanced by the Minister for Commerce (Sir Earle Page) for interrupting the budget debate at this stage do not carry any weight. We have had so many interruptions that it would appear that the Government regards the budget as a bone to be thrown to a hungry dog to gnaw at until something else is ready to be put before it. When the criticism of any measure from this side of the House, and from its own supporters, becomes too strong to be comfortable, the Government withdraws it, and substitutes something else. Had the debate on the budget been allowed to go on without interruption, it seems clear that criticism from both sides of the House would have been so strong that the Government would have been compelled to change its policy. At the present time, honorable members are being treated with contempt, and. this sort of thing lowers the whole tone of Parliament. The people are beginning to sneer at us, because it is evident that there is a party behind the Government which can compel it to do anything it likes.

All on this side of the House sympathizes with the wheat-growers, just as they sympathize with the unemployed. I sympathize with the honorable member for Wimmera (Mr. Wilson) in his anxiety to have this bill proceeded with without delay. Were it not for that, I should protest more strongly against this interruption. I trust that, as the result of this protest, the Government will treat Parliament more courteously in future.

Mr WARD:
East Sydney

.- Every member of the Opposition appreciates the point of view of the honorable member for Wimmera (Mr. Wilson), and sympathizes with his desire to do something to assist the wheat industry. I think that he, alone among Country party members, has been consistent in his efforts to assist the growers. I am compelled to point out, however, that while the Opposition realizes the difficulties of some of the wheat-growers, it also realizes the difficulties of other sections of the community. Moreover, it believes that if any delay occurs in providing assistance, the responsibility must rest on the Government itself. This Parliament cannot be considered to have been so busily engaged in the last few weeks that time could not have been found to consider legislation to give assistance to the wheat industry. As the honorable member for Wimmera points out, the crop is already being harvested, but, until to-day, no effort has been made to give the wheat-growers assistance. At the close of sessions when the Government is legislating by the process of exhausting honorable members, it always finds it convenient, in order to shorten discussion, to say to the Opposition, “ You must not discuss this bill and delay its passage, because the assistance is needed urgently “. Any delay in assisting the wheat industry must be attributable, not to the Opposition, but to the Government itself, because legislation should have been introduced long ago.

I was not impressed with the argument advanced by the Minister for Commerce (Sir Earle Page), that thebill is urgent for the reason that, unless it is passed, unemployment may be increased, because supporters of the Government showed their lack of concern for the welfare of the unemployed yesterday when they “ gagged “ a discussion of their plight. The budget is the most important subject which Parliament can discuss, but it has always been the practice of this Government to use it merely as a stop-gap when it either has no other business to bring before Parliament, or cannot make up its mind on other matters. Since the introduction of the budget, the discussion has been interrupted to permit of the passage of bills relating to land tax, income tax, sales tax, therapeutic substances, the apple and pear industry, and the appointment of an additional Minister.

I assure the honorable member for Wimmera that members of the Labour party are anxious to assist those in the wheat industry who are deserving of assistance, but we must be mindful of the fact that many persons engaged in wheat production, by no stretch of the imagination, could be considered to be in the deserving class.

Mr SPEAKER:

– Order ! The honorable member must confine his remarks to the subject before the Chair.

Mr WARD:

– I am endeavouring, Mr. Speaker, fo point out that the urgency of this measure emphasized by the right honorable member for Cowper (Sir Earle Page) is not applicable to the whole of the wheat industry. The Opposition is prepared to give assistance to those who are in need, but many persons engaged in the production of wheat are more fortunately circumstanced than others, and there is not the urgency in respect of giving them assistance as there was for this Parliament yesterday to give consideration to the unemployed, who have no income.

Mr Holloway:

– Any legislation to assist the wheat industry could be made retrospective.

Mr WARD:

– Yes. I add my protest at the delay which has occurred in the discussion of the budget. I believe that the Leader of the Opposition hit the nail on the head when he said that the only urgency in this bill was the urgency for the right honorable member for Cowper to obtain some cheap publicity at the wheat-growers’ expense.

Amendment negatived.

Question resolved in the affirmative ; motion agreed to.

In committee: Consideration of Governor-General’s message.

Motion (by Sir Earle Page) agreed to-

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to provide for financial assistance to the States in the provision of assistance to the wheat industry, and for other purposes.

Resolution reported.

Standing Orders suspended ; resolution adopted.

Ordered -

That Sir Earle Page and Mr. Thompson do prepare and bring in a bill to carry out the foregoing resolution.

Bill brought up by Sir Earle Page, and read a first time.

Second Reading

Sir EARLE PAGE:
Minister for Commerce · Cowper · CP

– I move -

That the bill be now read a second time.

The object of the Government in presenting this bill is to bring into operation a plan whereunder wheatgrowers shall secure a stabilized price in regard to the proportion of their crop which is used for human consumption in Australia. Every one knows the importance of the wheat industry. It is second only in importance to the great wool industry. It engages the activities of over 70,000 farmers throughout Australia, and it provides the second most important item in Australia’s export values. From the point of view of direct employment, it is the most important single industry in Australia.

The welfare of this great industry is of very great importance to Australia. That welfare has received serious shocks in the last seven or eight years, and the future, to say the best, is uncertain. Since the onset of the depression in 1930, there have been considerable fluctuations in the prices of Australian commodities. The prices of export products declined to a far greater degree than the wholesale and retail price levels. All price levels relative to the 1928-29 level recovered quite substantially in the financial years 1936-37 and 1937-38. More recently, however, export prices have declined very seriously, although wholesale and retail prices have maintained their advance, which has been continuous since 1933-34. At the. present time, compared with the average for 1928-29, the export price of wheat stands at 57 per cent. General export prices are 68 per cent. of their 1928-29 level; wholesale prices are 93 per cent., and retail prices are 89 per cent.It is evident, therefore, that the wheat industry, as in the years from 1930-31 to 1934-35, is suffering adversity in far greater measure than other export industries and the Australian community as a whole.

During the years of adversity, wheat prices, on the whole, have not only been low, but have also fluctuated seriously from time to time. For example, in January, 1930, the export price at Williamstown was 5s. 2d. a bushel, whereas in December, 1930, it was 2s. 5d. a bushel. In January, 1936, the price was 3s. 8d. a bushel, and in December, 1936, it was 5s. 3d. a bushel. By December, 1937, it had declined to 4s. 4d. a bushel at Williamstown, and to-day it is about 2s. 7d. a bushel.

Short-term violent fluctuations of the price of wheat aggravate the adversity of the industry. These fluctuations are also bad for the Australian community, as a whole, because a fall of the price of wheat must mean an appreciable diminution of employment. For instance, to show the general relationship of the wheat industry to general employment, it is said in Victoria that reduced crop will reduce railway returns by £800,000 or £900,000 this year. That will make a big difference to employment in Victoria. The urgency to do something to prevent a repercussion from the fall of wheat prices ou general employment answers the objections that were raised against proceeding with this legislation. For one thing, fluctuations of the purchasing power of the wheatgrowers cause fluctuations of the general level of business activity. For another thing, wheat being such an important constituent in the regimen of the cost of living, violent fluctuations of the domestic price result in quite important fluctuations of the cost of living index, and, therefore, of the basic wage.

On all counts, it would be an excellent thing for the Australian community if the domestic price of wheat could be stabilized at a reasonable level, and attempts to ensure this domestic stability have received the attention of governments for several years past. The problem, however, has proved a baffling and elusive one. It is not so easy to organize the wheat industry from a domestic stabilization point of view. It embraces so many thousands of individual farmers, and the product is marketed both domestically and overseas in the form of both grain and flour. In this it differs from the butter and dried fruits industries, whose products are entirely treated in factories or packing sheds, thus rendering them capable of being dealt with at a small number of concentrated points. By reason of this form of domestic organization, the dairying and dried fruits industries are particularly well suited to adopt measures on a co-operative basis for obtaining a homeconsumption price. The wheat industry is not at all well adapted for this treatment and therefore, if home-consumption price methods have to be adopted, it must rely more upon governmental action. The dairying and dried fruits industries have enjoyed home-consumption prices for a considerable time, but all efforts hitherto to secure a home-consumption price for wheat, coupled with the domestic and export organization of the industry, have failed. An attempt to secure a homeconsumption price for wheat is only likely to be permanently successful if there is an interlinking of Commonwealth and State legislation, because, if one can once get seven different parliaments to carry complementary laws to deal with this matter, it is not very likely that they will be upset. Much greater stability can thus be achieved than by any method which depends entirely on the act of one parliament. I thought that I had succeeded in this direction in 1935, when under the Constitution as it was interpreted the States agreed to pass legislation which, with Commonwealth legislation, would have covered the whole field of wheat marketing. The Commonwealth Parliament passed its legislation - the Wheat and Wheat Products Act - and certain States also passed their, but unfortunately the decision of the Privy Council and the failure to. get the Constitution altered at the referendum prevented the operation of that legislation, so that the attempt to bring about the organization of the wheat industry had to lapse. Then by reason of the droughts in the Northern Hemisphere, an appreciable rise occurred in world prices in 1936 and 1937, but since July, 1937, the price has declined and from

March of this ;year the decline has been very rapid and has now reached an unprofitable level. The prospects have become so alarming that the present plan, which is based on the price-fixing powers of the State, combined with a Commonwealth levy, has been devised.

It is appropriate that I should trace briefly the recent history of price movements and world stocks of wheat. Pollowing upon three or four years of low prices resulting from the accumulation of world stocks, an appreciable rise occurred in world wheat prices in 1936 and 1937. These prices reached their peak in April and July, 1937, when as much as 5s. 8d. and 5s. 9d. a bushel at seaboard was paid. The average of daily quotations on trucks Williamstown during these months

Avas 5s. 5d. a bushel, and the monthly average for the calendar year 1937, was approximately 5s. 0½d. a bushel. Since that time, prices have declined, and from March of this year the decline has been very rapid and has now reached an unprofitable level. The lowest price in the past four years was that of 2s. 6£d. on trucks Williamstown on the 9th September. A slight rise occurred during October, the average for the month being about 3s. a bushel, but this was of a temporary nature only. The present prices for old season’s wheat at Williamstown are between 2s. 7d. and 2s. 8d. a bushel.

The price decline which has been so marked since mid-May of this year has been brought about chiefly through the greatly increased stocks which it was then anticipated would be available this season to meet world requirements. Unfortunately, from the point of view of prices and of our growers, this anticipation has proved to have been fully justified. Increased production this year as compared with past years has been the order in almost all wheat-producing countries. It has been particularly the case in the United States df America and Canada, where 240,000,000 bushels in excess of the crop harvested last season has been realized. In both importing and exporting countries in Europe the harvest has been very large. The latest reports indicate that the total European harvest will exceed that of last year by over 205,000,000 bushels. The European importing countries alone have garnered about 115,000,000 bushels more than last year, whilst the European exporting countries excess over last year is 90,000,000 bushels. If we exclude Russia, China., Turkey, Iran and Iraq, from which countries reliable figures are not yet available, the world production this year totals 4,165,000,000 bushels. This compares with 3,669,000,000 bushels last year and 3,362,000,000 bushels in the previous year, and this represents a total rise of 500,000,000 bushels as compared with last year, and over 800,000,000 bushels as compared with the previous year. The harvesting of the large excesses in importing countries is naturally having its effect upon the import requirements of those countries. Because of these large increases and because also of a rather rigid control exercised over imports in certain countries - hitherto large importers - the import requirements are likely to show a decline this year even when compared with the low figures realized during the last few years. “World authorities anticipate that the needs of importing countries will not exceed 550,000,000 bushels. Parallel with this situation, is the fact that the chief world exporters have also harvested huge crops. To cater for the requirements of importing countries there is available in exporting countries surpluses totalling over 1,000,000,000 bushels, practically sufficient to meet two years’ requirements at the present rate of absorption. The present situation throughout the world in regard to stocks is comparable to that which obtained in the years from 1931 to 1934. In those years, owing to accumulations of stocks, due principally to large harvests in 1928- 29- of 3.910,000,000 bushels- 1932-33 and 1933-34, world end-of-season’s stocks reached twice their previous dimensions. Prior to these years, it was considered that an end-of -season carry over of less than 600,000,000 bushels was a safe margin. In the years mentioned, the accumulations had reached over 1,000,000,000 bushels. These large stocks were reduced to normal proportions only because of the failure of harvests in exporting countries during the three years from 1934-35 to 1936-37. Actually, in these three years, world disappearance was greater than the production, and this resulted in carry-over stocks being re duced by August, 1937, to about 530,000,000 bushels.

During the years 1931-34, when the world stocks were so high, the average of monthly prices on rails Williamstown were as follows: -

Viewed in its most favorable light, the present outlook offers little hope for any appreciable rise of prices during this and the next season.

During this period of very low prices, successive Commonwealth governments granted financial assistance to the wheat industry. The amounts granted in the several years were : -

Having regard to the unpromising outlook for the wheat industry, due to the position of the international wheat market, the Premiers of the various States met in Sydney on the 26th August, 1938, with a view to propounding some method to assist the growers. The conference had before it several plans for effecting some degree of stabilization of the industry, and, after having explored the various means available for this purpose, agreed to the following resolutions: -

That this conference affirms the necessity of action being taken to ensure to wheatgrowers a payable price for their product.
That, as a first stop of urgent national importance, the governments of the Commonwealth and States should take such immediate joint action in their respective jurisdictions as is necessary to implement a. home-consumption price plan in the season 1938-39, and following seasons; such plan to be based on an equalization levy on wheat or flour (used for homeconsumption) collected under tho excise power of the Commonwealth.
That such proposal should also ensure a stable home-consumption price of flour a.nd bread in the various States at a level fair to both producer and consumer based on a homeconsumption price of 4s. 8d. a bushel at country sidings for wheat, or its equivalent; special arrangements to be made, as on former occasions, to meet the special circumstances of Tasmania.
That it is of vital importance that such proposal be of a long-range character, and placed on a sound legal, financial and commercial basis from the outset, and not left vulnerable to legal challenge or dependent on voluntary co-operation.
That conference is unanimously of opinion that it is impossible to devise any practicable plan based on voluntary cooperation of growers, millers and merchants.
This conference has received several proposals from farmers’ organizations for the institution of a permanent price equalization fund built up by contributions from the Commonwealth and wheat-growers. The conference is of opinion that they are worthy of detailed examination and, as they involve federal finance this conference submits them to the federal government for consideration.

– The important point about this matter is that the wheat industry itself is providing the rehabilitation for the men situated in marginal areas. It is a principle well worth adopting and working out. Here we have a concerted attempt being made by all the Governments of Australia to tackle this problem on an Australia-wide basis.

The State parliaments, with the exception of Victoria, have already passed their legislation for the fixation of a home-consumption price for wheat, and it is now for the Federal Parliament to pass this complementary legislation in order to bring the whole scheme into operation with the least possible delay. This is a non-party matter, because three of the State governments are Labour governments, and the other three are nonLabour governments. Actually, it is a co-operative plan designed to provide much-needed assistance to the wheat industry, and the mere fact that the Commonwealth legislation has to be introduced by the Government now in office is no reason why it should be opposed.

Mr Fadden:

– Will the price of flour be subject to fluctuation?

Sir EARLE PAGE:

– The honorable member’s question leads me to another aspect of this legislation which is of great importance. Provision is made in an accompanying bill to be introduced for the imposition of special tax on wheat when world parity rises above 5s. 2d. f.o.r. Williamstown. The tax will be of such amount as to prevent the price of wheat used for domestic consumption in Australia costing the miller more than the equivalent of 5s. 2d. a bushel at Williamstown, or 4s. 8d. at home railway sidings. If the proportion is, say, three of export at 6s. to one of homeconsumption at 5s. 2d., the export tax will be applied in such a way as to enable millers to be paid an amount which would enable them to keep bread at the price previously ruling. This is a very important aspect of this matter, and one I think which will com mend itself to all parties as an honest attempt by the Parliament to call upon the wheat-grower to give back in good times the benefits he receives in bad times. This is the first time that legislation of that sort has been placed before Parliament, but it will help to ensure that the proposal will receive something like sympathetic consideration from the people of Australia generally.

Mr Beasley:

– All over a certain amount will go as tax?

Sir EARLE PAGE:

page 2053

FLOUR TAX AND WHEAT TAX

In Committee of Ways and Means:

Mr CASEY:
Treasurer · Corio · UAP

.- I move- 1. (a) That a tax shall be imposed upon all flourmanufactured in Australia by any person and, on or after the fifth day of December, One thousand nine hundred and thirty-eight, sold by him or used by him in the manufacture of goods other than flour.

That the rate of tax, not in any case exceeding Seven pounds ten shillings per ton of flour, shall be such rate per ton of flour as the Minister, from time to time, and in accordance with a recommendation by the Wheat Stabilization Advisory Committee, constituted under the Wheat Industry Assistance Act 1938, declares, by notice published in the Gazette, to be the amount by which the price per ton of flour based upon the price of wheat per bushel free on rails at Williamstown in the State of Victoria, at the time of the recommendation by the committee, is less than what, in the opinion of the committee, the price of flour would be if the price of wheat per bushel free on rails at Williamstown were Five shillings and twopence. 2. (a) That a tax shall be imposed upon all flour in excess of One thousand pounds in weight held in stock on the fifth day of December, One thousand nine hundred and thirtyeight, by any person, not being the manufacturer of that flour.
That the Tate of tax, not in any case exceeding Seven pounds ten shillings per ton of flour, shall be such rate per ton of flour as the Minister, in accordance with a recommendation by the Wheat Stabilization Advisory Committee constituted under the Wheat Industry Assistance Act 1938, declares, by notice published in the Gazette, to be the amount by which the price per ton of flour based upon theprice of wheat per bushel free on rails at Williamstown in the State of Victoria, at the time of the recommendation by the committee, is less than what, in the opinion of the committee, the price of flour would be if the price of wheat per bushel free on rails at Williamstown were Five shillings and twopence. 3. (a) That a tax shall be imposed upon all flour, biscuits, buckwheat flour, cakes, cremalt, macaroni, molestella, Passover bread, spaghetti, and vermicelli, imported into Australia and, on or after the tilth day of December, One thousand nine hundred and thirty-eight, entered for home consumption under the law relating to customs.
That the rate of tax in respect of flour so imported or used in the manufacture of the other goods specified in the last preceding paragraph, not in any case exceeding Seven pounds ten shillings per ton offlour, shall be such rate per ton of flour as the Minister, from time to time, and in accordance with a recommendation by the Wheat Stabilization Advisory Committee constituted under the Wheat Industry Assistance Act 1938, declares, by notice published in the Gazette, to be the amount by which the price per ton of flour based upon the price of wheat per bushel free on rails at Williamstown in the State of Victoria, at the time of the recommendation by the committee, is less than what, in the opinion of the committee, the price of flour would be if the price of wheat per bushel free on rails at Williamstown were Five shillings and twopence. 4. (a) That a tax shall be imposed upon all wheat exported from Australia on or after a date to be fixed by proclamation, not being wheat upon which tax is imposed in accordance with the fifth resolution of these resolutions.
That the rate of tax, not in any case exceeding One shilling per bushel of wheat, shall be such rate per bushel of wheat as the Minister from time to time, and in accordance with a recommendation by the Wheat Stabilization Advisory Committee constituted under the Wheat Industry Assistance Act 1938, declares, by notice published in the Gazette, to be the amount which bears the same proportion to the excess of the price of a bushel of wheat free on rails at Williamstown in the State of Victoria, at the time of the recommendation by the committee, over Five shillings and twopence as the quantity of wheat which, in the opinion of the committee, will be consumed in Australia (whether as wheat- or as products derived from wheat) during the twelve months following the preceding first day of October bears to the total crop which, in the opinion of the committee, will be harvested during that period. 5. (a) That a tax shall be imposed upon wheat grown in Australia and, on or after a day to be proclaimed, sold to a wheat merchant.
That the rate of tax, not in any case exceeding One shilling per bushel of wheat, shall be such rate per bushel of wheat as the Minister from time totime, and in accordance with a recommendation by the Wheat Stabilization Advisory Committee constituted under the Wheat Industry Assistance Act1938, declares, by notice published in the Gazette, to be the amount which bears the same proportion to the excess of theprice of a bushel of wheat free on rails at Williamstown in the State of Victoria, at the time of the recommendation by the committee, over Five shillings and twopence as the quantity of wheat which, in the opinion of the committee, will be consumed in Australia (whether as wheat or as products derived from wheat) during the twelve months following the preceding first day of October bears to the total crop which, in the opinion of the committee, will be harvested during that period.

The place of these taxing bills in the wheat price stabilization scheme has already been largely explained by the Minister for Commerce (Sir Earle Page) in his second-reading speech on the Wheat Industry Assistance Bill. It remains fdr me to explain the present motion and supporting bills merely as part of the legislative machinery for the collection of revenue by means of a flour tax.

The subject-matter and the scope of the legislation is much the same as in the case of the flour tax legislation, which I introduced in 1933, and again in 1934. While the price of wheat, f.o.r., Williamstown, is less than 5s. 2d. a bushel, the effect will simply be to authorize the collection of a tax on flour consumed in Australia.

The three features of this scheme which distinguish it from previous flour tax legislation are -

The variable rate of the tax.
The more orless permanent character of the tax, that is, a tax designed to stabilize the price of wheat for home consumption for an indefinite period of time.
The provision for a tax on wheatgrowers when wheat prices rise above the point - 5s. 2d. a bushel f.o.r. Williamstown - at which the tax on flour consumed in Australia will become unnecessary and will disappear.

The significance of these three variations of the earlier flour taxes will appear upon an examination of the speech which the Minister for Commerce has just delivered when introducing the Wheat Industry Assistance Bill. Perhaps I should add a few explanatory remarks about the variable rate of tax, and the provision for a tax on wheat-growers in times of high wheat prices.

For an indefinite period of time the taxwill be confined to flour consumed in Australia, supplemented by a com pensating tax on the more or less negligible imports of flour, and of goods manufactured from flour. The rate of tax in this field will be designed to provide a fund sufficient to return to wheatgrowers as a whole - and, in the main, on the basis of wheat individually produced - the equivalent of what they, as a whole, would receive if wheat for home consumption were sold at 5s. 2d. a bushel, f.o.r Williamstown.

The rate of tax will vary according to the fluctuations of the price of wheat. It will increase when wheat prices fall, and will decrease when wheat prices rise. The tax on flour for home consumption will disappear when wheat is 5s. 2d. a bushel f.o.r. Williamstown. The variations of the rate, and the period for which any particular rate will be operative, will depend upon the recommendations of the Wheat Stabilization Advisory Committee as to the amount by which, and the time when, flour prices ought to be increased or decreased in consequence of rises and falls of wheat prices during the period in which the price of wheat does not exceed 5s. 2d. a bushel f.o.r. Williamstown.

It should not be assumed that the operation of the tax is at the discretion of the Wheat Stabilization Advisory Committee. The terms of the imposition make it quite clear that the tax is imposed by Parliament, and the control exercised by Parliament over the rate of the tax is evinced by the provision of a maximum rate of £7 10s. a ton of flour, and by the provision of a rigid formula for the variation of the rate within the limit set by the maximum. The only real discretion delegated by Parliament to the committee is the selection, with due regard to fluctuations of wheat prices, of the appropriate times for variations of the rate of tax. The maximum rate of £7 10s. a ton is conceived as the rate which would be appropriate if wheat prices fall to the lowest point - about 2s. a bushel f.o.r Williamstown - to which they could reasonably be expected to fall.

The legislation provides that, in the event of wheat prices rising above 5s. 2d. a bushel, f.o.r. Williamstown, a portion of the excess shall be levied as a tax on the first purchase of wheat from the wheat-growers in Australia, and upon the export of wheat which has not, prior to export, been the subject of a sale to a person in Australia.

This is the farmers’ contribution to the stabilization scheme, and is an essential feature of the longrange scheme visualized and recommended by the State Premiers. Its effect will be that, whereas consumers of certain wheat products, for example, bread and macaroni, will, in the interests of wheat-growers, bear the burden of the tax in times of unprofitable wheat prices, wheat-growers, in times of high wheat prices, will provide a fund designed to prevent increases of the prices of those products when wheat prices are high and, of course, profitable.

Normally, this wheat tax will not amount to more than from one-fifth to one-fourth of the excess over 5s. 2d. of wheat price a bushel, f.o.r Williamstown. As in the case of the flour tax, the rate of tax depends, subject to the specified maximum of1s. a bushel, upon the recommendation of the Wheat Stabilization Advisory Committee.

Parliamentary authority for the rate will be preserved by limiting the recommendations of the committee to a rate equal to such part of the excess of Williamstown wheat prices over 5s. 2d. a bushel as is proportionate to that part of the total Australian production of wheat, during the harvest year commencing on the preceding first day of October, which is used for home consumption.

The supporting machinery for the collection of tax imposed by the four separate taxing measures will be contained in the Flour Tax (Wheat Industry Assistance) Assessment Bill which will be introduced shortly. The four taxing measures are as follows: -

The Flour Tax Bill, which im poses the tax on all flour sold by millers or used by them in the manufacture of goods other than flour: for example, bread, selfraising flour.
The Flour Tax (Stocks) Bill, which imposes the tax on all flour held by persons other than millers, such as bakers and storekeepers, &c., at the commencement of the tax. This bill is necessary, not only to ensure that the tax is imposed on all flour for home consumption after the commencement of the tax, but also to obviate dislocation of the flour market by forward buying of flour in anticipation of the tax.
The Flour Tax (Imports and Exports) Bill: This provides, in the first place, for a tax on imported flour, and on the flour content of imported goods manufactured from flour. Such imports are at present almost negligible, but they would, no doubt, reach considerable proportions, and would also impose a serious competitive disability on. local flour, if they were not made subject to the tax. The same bill provides, in the second place, for the taxation of imported wheat. This part of the bill is complementary to the tax imposed by the Wheat Tax Bill on sales of wheat in Australia. The operation of the export tax, which, like the imports tax, is a duty of customs, and is, therefore, associated with that tax in the one measure, is a matter for the uncertain and, according to appearances, the fairly distant future when wheat prices rise above 5s. 2d. a bushel f.o.r. Williamstown.
The Wheat Tax Bill, which will impose a tax on the first sales of wheat to persons in Australia, and which, like the export tax, will only operate when, if ever, wheat prices rise above 5s. 2d. a bushel f.o.r. Williamstown.

The machinery for the collection of the taxes covered by the Assessment Bill, except for the export tax, which will be automatically collected by the Customs Department at the point of export, is practically the same as that provided by the earlier flour taxes, and is substantially borrowed from the sales tax law.

The scope and subject-matter of the tax for the present, and until the time when wheat prices, if ever, rise above os. 2d. a bushel f.o.r. Williamstown, will also be practically the same as the scope and subject-matter of the earlier flour taxes.

Broadly, the exemptions from the flour tax to millers and to holders of flour at the commencement of the tax, are -

Flour for use as or in the manufacture of certain foodstuffs for human consumption, viz.,

Breakfast foods.

Foods for infants and invalids, if exempt from sales tax.

Foods for the use of public hospitals, public benevolent institutions, religious organizations and organizations for the relief of the unemployed.

Flour for use as or in the manufacture of foods for animals and birds.

Flour for use in the manufacture of goods other than foodstuffs.

Flour for export or for use in the Northern Territory.

Bran and pollard.

The general scheme of the exemptions is to remove the burden of the tax from flour when it is used to produce goods directly competitive with goods which are not produced from flour; that is, breakfast foods produced from other cereals. Nearly the whole of the tax will fall on flour which is used in the production of bread, and the remaining field of the tax will be principally represented by flour for use in the manufacture of biscuits, macaroni, spaghetti and vermicelli. It is considered that the goods within the field of the tax are not in anydirect or appreciable sense competitive with other goods.

Millers, as formerly, will be required to furnish returns and to pay tax within 21 days after the close of the month in which they have sold the flour or used it in the manufacture of other goods. Persons - for example, bakers and storekeepers - holding flour in stock in excess of 1,000 lb. at the commencement of the tax, will be required to furnish a return and pay the tax, if it does not exceed £5, on or before the Sth December, 1938. If the tax exceeds £5, they will be permitted to pay £5 or 20 per cent. of the tax, whichever is the greater, on or before the 8th December, 1938, and the balance by equal monthly instalments of 20 per cent. of the tax or £5, whichever is the greater, except where, in any month, the unpaid balance is less than £5, in which case the instalment shall be the amount of the balance.

Flour in transit to any person on the 5th December, 1938, shall be deemed to be held in stock by him on that date.

Tax is payable on flour produced by millers from wheat supplied by wheatgrowers for gristing, and will also be payable by wheat-growers, if wheat prices should exceed 5s. 2d. a bushel f.o.r. Williamstown, on wheat supplied by them to millers for gristing.

Flour will be deemed to be sold by a miller at the time when he parts with possession of the flour.

With the exception of certain cases in which the property in wheat is transferred without a contract for the sale of the wheat, wheat will be deemed to be sold at the time when the contract for the sale of wheat is entered into, and the rate of tax applicable to the sale will be the rate in force at that time.

Severe penalties are provided for the evasion of tax by failure to furnish returns or by furnishing false returns. The legislation provides for reference to the Income Tax Board of Review as a means of settlement of disputes between taxpayers and the Commissioner of Taxation. The legislation contains secrecy clauses similar to those contained in the sales tax law.

Mr Green:

– Has the Treasurer received any communication from the master bakers in respect of the 30 lb. of flour in a ton, for which they pay, but do not receive?

Mr CASEY:

– I saw the master bakers yesterday and they explained their position. With all respect, I think that the difficulty can be smoothed over.

Mr Scully:

– Will this legislation apply only to the wheat harvest for 1938?

Mr CASEY:

– At the moment that is the intention.

Mr Scully:

– Millions of tons of wheat were carried over in New South Wales from last season.

Mr CASEY:

– I shall be in a better position in the committee stages to answer questions.

Mr Beasley:

– It is an important point.

Motion agreed to.

Resolutions reported.

Standing Orders suspended; resolutions adopted.

Ordered -

That Mr. Casey and Mr. Archie Cameron do. prepare and bring in bills to carry out the foregoing resolutions.

Motion (by Mr. Casey) - by leave - agreed to -

That so much of the Standing Orders be suspended as would prevent the questions in regard to the first and second readings, committee’s report stage, and third readings being put in one motion covering several or all of the bills, and the consideration of several or all of the bills together in a committee of the whole.

page 2057

FLOUR TAX BILL 1938

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

Motion (by Mr. Casey) proposed -

That the bill be now read a second time.

Debate (on motion by Mr. Green) adjourned.

page 2057

FLOUR TAX (STOCKS) BILL 1938

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

Motion (by Mr. Casey) proposed -

That the bill be now read a second time.

Debate (on motion by Mr. Green.) adjourned.

page 2057

FLOUR TAX (IMPORTS AND EXPORTS) BILL 1938

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

Motion (by Mr. Casey) proposed -

That the bill be now read a second time.

Debate (on motion by Mr. Green) adjourned.

page 2057

WHEAT TAX BILL 1938

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

Second Reading

Motion (by Mr. Casey) proposed -

That the bill be now read a second time.

Debate (on motion by Mr. Green) adjourned.

page 2058

BILLS RETURNED FROM SENATE

The following bills were returned from the Senate without amendment or requests : -

Land Tax Bill 1938.

Income Tax Assessment Bill 1938.

page 2058

QUESTION

BUDGET 1938-39

In Committee of Supply (Considera tion resumed from page 2037) :

Sir HENRY GULLETT:
Henty

– I warmly associate myself with the congratulations extended to the right honorable member for Yarra (Mr. Scullin) on the constructive speech that he made in this chamber a week ago upon constitution alteration. The right honorable gentleman must indeed be gratified at the general acclaim with which his speech has been hailed. Rarely in the history of this Parliament has a speech been received with such unanimous approval and, indeed, with so much promise of being translated into action. At the same time, we should be careful at this stage to realize that sweeping alterations of the Constitution such as were contemplated by the right honorable gentleman, no matter how strong might be the unanimity among honorable members of this Parliament, must meet with controversy and opposition. I have been interested in the proposal of the Government that next year a special Constitution session of this Parliament should be held. I think that that is an excellent proposal. I venture to suggest, however, that it is desirable before such a session is held, to draft constitution alterations, a committee of the whole House should be set up by the Government to do the initial drafting. I think that the proposals that are put to the people should be representative of as much unanimity as is attainable, and that they should be the subject of as little criticism, opposition and division in Parliament as is possible, if they are to have their full influence on the people. Furthermore the submission of the proposals to the people should not follow too swiftly upon their passage through this House. In the past some referendum proposals have failed to meet with the approval of the people because of the brief period in which they have been before the electors. Some would, I believe, have met with approval had the electors had a longer time in which to study them. During a brief campaign of six or seven weeks the case of those who favour alterations is subjected to every kind of misrepresentation and exaggeration which cannot be answered convincingly in such a short period. Therefore, I trust that if the House agrees to certain proposed alterations of the Constitution, which may be of a farreaching character, the referendum will not be taken until the following year. That would enable those who subscribed to the proposed alterations to use their best endeavours to set up a great organization throughout the Commonwealth with district committees to engage in an. effective affirmative campaign.

– I have no technical knowledge of this subject; I merely endeavour to take a commonsense view of it. I would like, however, to express on behalf of a number of those enaged in oil research, who as far as I know, are completely reputable people - I do not know them personally - a protest at the almost interminable delays which have taken place in respect of matters which have cropped up between them and the Oil Research Committee. They also complain of the lack of courtesy on the part of the members of the committee. These arc serious charges which I would not express unless I thought they had some basis of fact behind them. I trust that the PostmasterGeneral (Mr. Archie Cameron), who is now in charge of the committee, will at least do- me the honour of listening to my remarks. I take it that the Minister in charge of the debate sometimes’ does pay some attention, and sometimes even makes a note dr two’, when honorable members take the trouble to prepare speeches and deliver them.

Mr Archie Cameron:

– I could repeat every statement which the honorable member has made.

Sir HENRY GULLETT:

– The PostmasterGeneral has paid no attention to what I have been saying.

Mr Archie Cameron:

– That is incorrect.

Sir HENRY GULLETT:

– Every time honorable members are foolish enough to trespass upon his time, he is engaged in reading a book.

Mr Archie Cameron:

– I could even repeat the sentences which the honorable member has used.

Mr WILSON:
Wimmera

.- Apart from the huge amounts provided for interest payments, the most important item in the budget is the provision for defence. No one who has studied the recent trend of events can deny the need for defence* I do not wish to criticize too severely what the Government has done to provide fortifications, and land, sea and air services of one kind and another. I shall merely observe that its whole ‘ programme and procedure could bc improved. Our defence policy require? careful re-examination. I hope that the Government will be fortunate in its advisers in this connexion, and that the steps which it has taken so far, and which it may take in the future, will not be misinterpreted by other powers. Our only desire - and this should be emphasized - is to defend ourselves^ maintain our free institutions, and govern ourselves as we desire. I hate the very thought of war; but I am forced to the conclusion that, though we may strain every nerve to ensure world appeasement and disarmament, we must,, at the same time, do our best to remove the economic and other anomalies and injustices that exist among the nations. Only by adopting that policy shall Wé be able to assist in the achievement of world appeasement and peace. I doubt whether it will ever be possible for us, with our limited manpower, to develop military and other defence forces sufficient to ensure absolute safety. For that reason, among others, I strongly advocate a policy of negotiation with other countries to draft treaties for the adjustment of economic injustices and other complaints. It is encumbent upon us to do everything, in our power to maintain and protect our free industries, and to develop our great inheritance imperfect though it may he at present. We should strive our utmost to develop the great resources of this country which have been explored and revealed by our pioneers. I ant convinced that many of our hardships could be alleviated if our problems were faced courageously. Many of our developmental difficulties could assuredly be overcome.

In regard to defence, I shall offer several suggestions which appeal to my commonsense, as a layman, and which, 1 believe will receive the endorsement of many other honorable members. It has been suggested in the press that the Government should expend a vast sum of money, even as much as £15,000,000, in the purchase of a battleship. Whilst I agree that our defence equipment should be as up to date as possible, I do not think that we can afford to purchase a battleship at that price. The expenditure of £15,000,000 on aircraft would be much more effective, having in mind our vast distances and our long coastline. I can see ho reason why we should not build, in Australia, all the aircraft that we need here. This, in my opinion, would develop a most valuable industry. It would also be wise to spend money on the provision of submarines and fast-moving ocean-going craft, a policy which is being adopted to a greater degree than ever before in connexion with the British Navy. Such vessels could also be built in Australia. We ought, in my opinion, to build our own merchantmen. It is deplorable that the ship-building industry which, before the war, and also during the war, was established in a reasonably efficient way in this country, has been allowed to languish. We have built one cruiser, some destroyers, and several ocean-going freight ships in Australia. At one time we had a flourishing shipbuilding industry with a skilled personnel doing good work in the national interests. We should be ashamed of ourselves, particularly in view of our claim to be self-dependent, that practically the whole of our export trade is carried by ships not on the Australian register. It is to the everlasting discredit of this Government and previous governments, that no effective steps have been taken to revive our ship-building industry. - 1 suppose that our people pay not less than £10,000,000 a year in freight charges to shipping firms whose vessels are not registered in this country.

In my opinion, the greatest failure of the Government lies in the fact that it has failed to awaken a great national spirit among our people. In years gone by Australians had a deep love for their country and were prepared to make great sacrifices for it. That spirit has been dissipated, I believe, because our governments are not actuated to-day by altruistic ideals, and do not make any real appeal to the democracy. They are concerned too much with commercial activities. The needs of the great masses of the people have not been met. Vested interests have been allowed to develop, and unsound policy in many other directions has caused the stagnation of development. This is serious in a young country like Australia. I have heard many other honorable members refer to this subject, and also to the need for increasing our birth rate, which unhappily, has declined to an unsatisfactory figure. This state of affairs must be altered. We should, in this Parliament, make a careful search for the reasons for this stagnation and endeavour to remedy them. Broadly speaking, the cause of our troubles is the lack of a sense of economic security by the great mass of the people, and the loss of markets for our exportable primary products. We have sacrificed some of these markets, and have, I am afraid, permanently lost them. Although T represent an electorate which is principally concerned in primary production, I say deliberately that we must direct attention to the development of sound secondary industries in Australia in order to provide careers for our rising generation. The Government has fallen down on its job in this connexion. There should be no need for large numbers of our people to be unemployed. The attention of the Government should be devoted to the development of a sense of economic security among our people as a whole. I believe that there is a simple solution of our troubles if the Government had the courage to adopt it. Undoubtedly, many of our younger people are to-day indifferent to their responsibilities as citizens in consequence of their sense of social insecurity. Defence measures are not likely to be regarded with great enthusiasm by people who feel economically insecure, and who are not guaranteed a reasonable standard of living. The solution of our problems is much simpler than some honorable gentlemen who support the Government would have us believe. We must not allow ourselves to be guided absolutely by history. Rather should we clear away the cobwebs that cloud our outlook. Then we should see the way to progress. We must tackle our problems in a more progressive way than wb have done hitherto. This country is capable of producing more food than our people need, and we could provide here probably a higher standard of living than that enjoyed by the people of any other nation. I accuse the Government of lack of courage in its approach to these great national problems. It is culpable to the extent that, possessed as it has been of almost unlimited knowledge secured from the reports of many committees of inquiry and royal commissions, it has almost invariably displayed weakness and timidity in putting into effect the recommendations of these costly bodies of inquiry. These committees and commissions have, in the main, dealt in a practical manner with the problems which they have investigated. One has only to point to a few of their findings to expose the vacillating attitude of the Government. The Development and Migration Commission was appointed some years ago. Had its recommendations been followed, much loss in regard to settlement would have been avoided. Then the Wheat Commission pointed the way towards a solution of the problems affecting the wheat industry; but here again the Government would go only part of the way indicated, and as the result, the industry is still labouring under serious disabilities. Another royal commission was appointed to inquire into monetary and banking systems. Contrary to . expectations, as has been pointed out by a number of honorable members, that commission made recommendations which have received the general approval of the people of Australia. It was believed that, if put into effect, those recommendations would have been instrumental in giving the country a better system of finance, but the Government is showing weakness in this connexion also. Although the commission’s report has been available for more than a year, nothing has yet been done to introduce legislation to implement its recommendations. Patronisingly, yet fearfully, the Government has consulted the private banks, apparently not being satisfied with the work of the commission which it appointed. It appears to me that the reason for this is that the recommendations of the commission are a definite challenge to the privileges of these powerful concerns. The Government has subverted a great national need to expediency, and it now stands hesitating between the devil and the deep sea, apparently placing the trading interests of the banks before the welfare of the people. It has, however, promised that a mortgage bank bill will be brought down to provide for long-term mortgages, and I hope that we shall see the consummation of that promise before the House goes into recess. Such a measure would be of great assistance to industry generally and to primary industry in particular, because primary industries must have long-term credit at a low rate of interest if they are to function satisfactorily.

According to cable messages published in the press recently, a trade agreement has been concluded between the Dominion of Canada and the United States of America. The principal concessions granted to the United States of America by Canada, to the detriment of Australian producers, are on lemons, dried fruits, and canned fruits. This is a vital matter to Australian fruitgrowers. The Canadian market for Australian dried fruit is second in importance only to the British market. It would appear, therefore, that the Government has not been alive to this threat to Australia’s valuable trade with a sister dominion. If should have been more active in the interests of the fruitgrowing industry, which is highly developed in the electorate I represent. I shall be very pleased to learn if the Government has taken any steps for its protection. Other cable messages referring to an Anglo-American Trade Treaty, indicate that that agreement involves concessions on the British market amounting to £169,000,000 in favour of the United States of America. This is a great inroad on the Australian fruit exporting trade, and I am very disappointed at the bad results which followed the visit of the Australian Trade Delegation to the United Kingdom. The figure which I have quoted is based on the 1938 trade figures. Of that large amount, £50,000,000 applies to farm products. Obviously, that will be a grave disadvantage to Australian farm products on the United Kingdom market. It calls for very firm action on the part of the Commonwealth Government, which has not been so well represented at trade conferences as it should have been. I am supported in my view by figures which were published in the Melbourne SunPictorial some months ago. That newspaper published the following article : -

Australia ranks third in the countries of the world as an importer of British goods and second as an exporter of her own products to United Kingdom markets.

Official returns for 1937 issued to-night by the Commonwealth Statistician (Dr. Wilson) showed that during the year Australia took British goods worth £37.530.725 sterling, compared with £41.432,399 taken by South Africa and £39.103.728 by British India.

The United States of America was Britain’s best foreign customer with purchases valued at £31,424,519, .but this by no means’ balanced United States exports to Britain, worth £114,248.943. This huge total placed America first in the list of exporters to Great Britain.

Australia was third in the world and second in the Empire with £71,805.371, being exceeded by Canada with £88,380,294.

significant feature in view of the coming trade discussions was that the Argentine and Denmark, which arc particular rivals of Australia in meat and dairy produce respectively, supplied between them £90,000,000 worth of goods for British markets. On the other hand, Australia bought more from Great Britain than these two rival countries combined.

If Great Britain, to which Australia has given many advantages on its own markets, is not prepared to reciprocate in. a reasonable manner, Australia should investigate prospects in other countries for the marketing of its exportable products. After all, these are matters of business, and sentiment should not be taken too much into consideration. Unless legislative action is taken, merchants iti Great Britain will buy on any market where they can obtain the best deal.

We have been told by the Minister for Commerce (Sir Earle Page) that the wheat preference, which wo have lost as the result of the negotiations to which I have referred, was not of very much value. That is a complete denial of the statement which was made to this Parliament and to the Australian people when that favorable concession was obtained.

At that time, the right honorable gentleman stated emphatically that it represented a great victory, and would be cf distinct advantage to Australia. Now le says that it was not worth worrying about. A proper opportunity has not been afforded to honorable members to give expression to their opinions on trade questions until it has been too late and valuable preferences have been lost. They need not have been lost if a firm attitude had been t-ken up by the Government. In a typically ambiguous statement on the Anglo-American trade treaty, in which loss of preferences had to be admitted, the Minister for Commerce recently tried to gloss over that admission, but his explanation will not be very satisfactory to the primary producers of Australia.

– I have no sympathy with them, but they form a very small percentage of the population. We must provide for the honest people, who are willing to play their part as members of the community.

The Commonwealth Government should make funds available for developmental works. The time is opportune to do so, particularly in the rural areas which have suffered so severely from drought. Much has been said about the need to standardize railway gauges. Standardization of the gauges is a work that is well worth undertaking. Apart from that, we have insufficient railways. There should be built cross-country lines to connect existing lines. This work, if undertaken, would be of benefit, not only for defence, but also to the rural populations, because it would facilitate the transfer of stock from drought-stricken areas to fresh pastures. Some years ago, there was a project for the construction of a railway line from Ouyen, in my electorate, to connect with the many lines which go in a northerly direction from Melbourne. If that line had been built, the journey from Adelaide to Sydney would have been shortened by 200 miles.

It is not too late now to undertake that work. Another public work that should exercise the minds of Ministers and of honorable members is the construction of better and additional roads. There is also a great need for water conservation and irrigation projects. This country is subject to frequent drought visitations, even in areas in which great rivers flow. If steps were taken to conserve the water supply in those rivers, the country would be able to support many more thousands of people. I do not consider that much could be done in the hinterland to make it fit to carry considerable population, but in the more settled areas considerable progress could be achieved by the application of a policy for the conservation of our rivers. I commend all of these matters to the earnest consideration of the Commonwealth Government.

There is to-day a great tightening of credit and it would appear that, unless something is done to arrest the deflationary tendency, the country will soon be in a depression of greater depth than, that from which we emerged a few years ago. It is incumbent upon this Government to use that great facility which it has at its command, the Commonwealth Bank, to prevent this deflationary period, for which there is no need. I am reminded of what happened in the last depression when production, both primary and secondary, was greater than we had ever previously experienced. The warehouses were jammed with the foodstuffs and clothing, but, because of the false situation created by the banks, there were hungry and ill-clad persons- standing alongside of plenty. There is something wrong with an economy which allows such a condition of affairs, and any government which stands idly by without taking steps to prevent its return is not worthy of the confidence and support of the people. If this Government does that, the people will know how to deal with it. They will not put up with the humbug that they suffered on the last occasion.-

I am concerned with the thousands of young people in Australia who have no prospects for the future, unless the Government takes action. I commend the Government for having provided money for the training of youths and I hope that it will ensure that the States wisely expend it, but more money should be made available. It is the responsibility of the Commonwealth to make this money available, because the powers of the States to tax and borrow are limited. I hope that the Commonwealth Government will give encouragement to the establishment of more and more industries in Australia in order to absorb into industry, not only youths, but also all other unemployed persons. I have in mind particularly . the establishment of the shipbuilding industry to which I have already referred, and the establishment of an Australian motor car manufacturing industry.

Immigration is a difficult problem and I sympathize with the Government in its efforts to solve it. I, personally, should not shut the door on any one who wanted to come to Australia provided he did not come into conflict with the White Australia policy.But we have a responsibility to our own people and I hope that due regard will be paid to them in the consideration of the resumption of immigration.

The former chancellor of the University of Melbourne, Dr. R. E. Priestly, said in an article -

I am convinced that Australia to-day is the safest country in the world tolive in, and I am glad that my daughter is remaining here. I dp not believe that Japan is the immediate menace some people think she is; and the dangers of Europe are very far away. But, just because of her enviable situation, however, Australia ought to be putting herself in a position to exercise leadership in world affairs.

That is the burden of my remarks. I do wish to see Australia take a leading part in world affairs and I do not want it to be, as it were, simply saying “Yes” to everything that the Motherland does. I want Australia to realize its nationhood and to have a say in shaping the policy of the British Commonwealth of Nations. I hope that the Government will take cognizance of what I have said and that it will launch out on a vigorous policy of advancement for this grand country of ours.

– I like the mild and subtle way in which the honorable member for Melbourne Ports (Mr. Holloway) approaches the discussion of industrial and social problems. I am as anxious as he is to bring about social reforms in this country, in order to improve the living standards of the people; but I have never yet endeavoured to delude my constituents into the belief that the socialization plank of the Labour party’s platform and the practice of trade unionism are one and the same thing. Those of us who have any knowledge of the trade union movement know that they are not. Trade unions will always strongly oppose any attempt to deprive their members of the right to strike. [Quorum formed.] The younger men in the Labour movement should be told of this line of demarcation between the socialization of industry, and trade unionism. No one knows better than the honorable member for Hunter (Mr. James) that reconciliation cannot be effected in industrial disputes because of the insistence, by trade unionists, of the right to strike. He can tell us that in disputes on the coal-fields organized Labour will always make it plain that if it cannot get what it wants the men will strike. Then, in order to deceive the people, there will be an outcry that the employers have caused a lock-out. In some cases a trifling dispute such as the dismissal of one man for some offence may lead to a strike by hundreds, if not thousands, of his fellow workmen.

I do not agree with the unemployment figures that have been given in this debate. No fewer than 250,000 men have been placed in employment during the last six years as the direct result of this Government’s encouragement of industries. I challenge any honorable member opposite to prove otherwise. Notwithstanding all that this Government has done to relieve unemployment during recent years, we had the spectacle yesterday of honorable members opposite making an appeal on behalf of the unemployed during the approaching Christmas season. They even went so far as to say that supporters of the Government attempted, to stifle the discussion. Why cannot they be honest and fair about this matter? . We on this side did not carry on the debate yesterday because we were convinced of the insincerity of honorable members opposite in connexion with this problem of unemployment. I have not lived in an industrial area of Sydney for 39 years without acquiring a first-hand knowledge of the troubles of the workers, and I can say, without fear of contradiction, that I have always done what I could to redress their grievances. I am convinced that conciliation boards or wages boards would do more to bring about peace in industry than appeals to the Arbitration Court.

Honorable members who have had dealings with the Repatriation Department may have had experiences similar to mine. On many occasions I have submitted to the various tribunals cases which were unsuccessfully brought before those bodies by the Returned Sailors and Soldiers Imperial League of Australia, and I have at times been successful, t am happy to say that one case for which an honorable member in the Lang group had failed to secure redress, has, through my instrumentality, been successful. The man in question has had his pension restored. Ever since then I have had numerous requests to bring other cases before these tribunals. To these tribunals should be appointed men with practical business knowledge, men with sympathy for and understanding of the disabilities of ex-soldiers who have been crippled for life.

The CHAIRMAN (Mr. Prowse.)The honorable member’s time has expired.

Mr BRENNAN:
Batman

.- The honorable member to whom we have just had the pleasure of listening seems to be under the mistaken impression that the policy of the Australian Labour party is a secret document or a secret policy about which this party entertains some sense of shame or compunction, and that the party promulgates its doctrines in secret while publicly announcing as its policy something entirely different. As a- matter of fact the policy of the Australian Labour party has been frequently published, and ia re-published from time to time; it is available for anybody and everybody who may desire to enlarge their education by becoming familiar with its terms. I do not propose to read it to-night. I can promise the honorable member, however, that, for his enlightenment, I would be prepared to make a copy of the document available for his study with the confident expectation that after, in the course of years, he had learned dimly to comprehend it, he would pass naturally to that side of the House on which, by that time, the Labour party was carrying on the government of this country. Suffice it to say that in the very foreground of Labour’s policy appears Labour’s objective - and it is printed in bold letters and in plain English - “ Socialization of industry, production, distribution and exchange “. Then follow the principles of action, and after that, methods. Then follow further the details of Labour’s platform and policy. I suppose there is hardly any one who has had the honour to stand for Parliament as a standardbearer for the Labour party who has failed, not only to enunciate, but also to expound, the fundamental changes involved in Labour’s policy. The honorable gentleman does not seem to have heard of them; at least it is very evident that he has failed to understand them. I suggest that it would be better for him to devote some little time to the study of the fundamentals of Labour’s policy before he accepts the responsibility of criticizing us about matters which he certainly does not understand.

The general discussion on the budget affords a very excellent illustration of the unhappy decadence of the parliamentary institution as operated under governments of the character df that which now controls our destinies in the federal sphere. I suggest that the national Parliament is, or at least ought to be, a democratic instrument of government which is worth preserving, the liberties and privileges of which demand jealously guarding; but I am sorry to have to admit that, at the hands of those very persons who claim to be the champions of democratic institutions, Parliament has, from day to day, deteriorated in efficiency. I am not referring to the personnel of the Parliament, because I do not join with those who rant occasionally about the “good old days”, and the “giant parliamentarians” who controlled our destinies in other times. I believe that every generation throws up, in equal measure, a fair average number of capable men willing to carry on the government of the country in accordance with the best tradition. Unfortunately, to-day the tendency is to create and maintain a bureaucracy to filch the rights of members, and to limit the rights of the electorate, and of what the Attorney-General yesterday described in another connexion as “ a sovereign people “. We are supposed to have, for example, almost unlimited powers of discussion over an unlimited area on this very question which is now before the Chair. What happens? What happens to-day happens almost every year when the budget is under consideration. The time for consideration of the question is limited unreasonably, unnatural hours of labour are imposed upon honorable members and, eventually, when we come to the consideration of the Edi mates, millions of pounds of money are voted by forced marches within a measure of time ridiculously inadequate for the purpose that we have in view. Instead of ample opportunity being provided for discussion of a wide range of subjects, very little opportunity is afforded to those at least who feel that their strength and powers of endurance are not equal to all-night sittings, and sittings which extend over night and day continuously. It is a violation of the principles of parliamentary government that honorable members should be worn down and discouraged from speaking by reason of the fact that if they wish to speak they must be deprived of their natural rest, and must submit themselves to an endurance test that should never be imposed upon them. Take the discussion, for example, upon Supply. It is a very well-settled principle that grievances must be redressed before Supply is granted. My friends of the Government would have the country believe that honorable members may talk as much as they like on that subject; but the fact is that they cannot do so. The time for discussion is arbitrarilv limited, and almost invariably the Government informs us that a supply bill must bepassed before a certain hour, very often before one-quarter of the members of the chamber can have had an opportunity to ventilate their grievances. It follows that grievances not stated cannot be redressed. Again, it is open to any honorable member, supposing he can’ get the support of, say, five members of the House, to move the adjournment of the House to discuss a matter of urgent public importance; but only yesterday we had an excellent illustration of what occurs in that regard. When the leader of the Labour party for the time being (Mr. Forde) moved the adjournment ofthe House for the purpose of discussing a matter which is of vital interest, and of tremendous importance to the people outside and, consequently, of tremendous interest to those inside this Parliament, after one speech had been delivered by the mover of the motion, the Government, taking very good care to have the last word, and the only other word, had the debate clotured, and further discussion prevented. I have taken leave to say before, and I take leave to say now, that those gentlemen who, with tongue in cheek, pretend to condemn Fascism in other countries, should set their own house in order and learn to show greater respect towards a democratic Parliament before they begin to teach their grandmothers overseas how they should conduct the business of the countries over which they have control and charge. I very often think that when we assemble here as a new Parliament we do not sufficiently realize the historic background of the institution of which we are privileged to be members. We should revise our knowledge of the tribulations, the blood and tears, out of which the parliamentary institution grew, and of how the men of the brave days of old faced terror and death in order to assert the rights of a free parliament. To-day, the tendency is not only to limit the rights of members by arbitrarily declaring that the subject in hand must be disposed of by military methods and all-night sittings, but also to set up officers, such as the Speaker and the Chairman of Committees, who, instead of being the servants of the House, become the masters of the House. That is an inversion of the proper order of control. It is true that we should have standing orders; it is equally true that honorable members should jealously guard their rights; but I think that the Standing Orders have gone much too far in limiting the rights of honorable members. When the rights enjoyed by members are interpreted with undue rigidity by the officers of the Parliament there is grave danger that the servants of the Parliament become its masters, or become so to regard themselves. And so against development along those lines I make this stern protest as an individual and on behalf of the Australian Parliament claimed to be a democratic instrument, which is to me the lineal successor of those parliaments established, as I indicated a moment ago, by the courageously endured hardships of those who suffered to set up a democratic institution. Wearied by the long vigil of last night and the labours of to-day, I am not disposed to make a studious examination of this subject, nor am I fitted, in a physical sense, to make such an examination of any public question worth considering. I shall content myself with some general observations on matters of outstanding interest, hoping to direct attention to their importance rather than to examine them in detail.

The honorable member for Barton (Mr. Lane) made reference to the National Health and Pensions Insurance Act which became law a few months ago. We must accept and respect the law of the land, whatever it may be; but certain developments have arisen with regard to this legislation which are, as far as I am aware, unprecedented in the history of Australian parliaments. I have never known an act passed by the Commonwealth Parliament - and my memory goes back to the birth of the Constitution - which has excited so much public resentment and open indignation as has this measure. I cannot help thinking that the Government, and especially the Treasurer (Mr. Casey), must be well aware of public feeling which has resulted from the passage of this act. By every mail, I have received, not the protests of obscure organizations or societies, but the individual protests of electors to the number of many thousands; and other honorable members have been the recipients of similar protests to an equal number of thousands. I should like to know whether this Government, like most governments, has its ear to the ground, and whether it is impressed by the signs of the times. Will it take action before it is too late? I can quite see that vested interests may be created, and that rights may arise, if the act remains in operation. If the Government is honest with itself and the people and is intelligently reading the signs of the times, it will make no further concession to its own obstinacy, but will make a concession to the rising tide of resentment in the electorates, and deal with it effectively before it is too late. Repeal or at least radical amendment is required. The grounds on which ray criticism rests are those which members on this side of the chamber have ventilated in full in this Parliament. Those who care to read them may do so by referring to the records in the journals of the House. But I take the opportunity to warn the Government against this rising tide of opposition. My only reason for doing so is not that I should count it an irreparableloss if we lost the present Government, but that I should count it almost an irreparable disaster if the national health and pensions insurance scheme, through obstinacy on the part of the Government, were persevered with until rights were created of a kind which would make it exceedingly difficult, if not impossible, to pull out by the roots a plant that should have been nipped in the bud.

This afternoon, we had an interesting speech by the honorable member for Warringah (Mr. Spender) on the subject of the amendment of the Constitution, and I may add that it followed an interesting address by the AttorneyGeneral (Mr. Menzies) upon the same matter. These gentlemen are doubtless both well qualified to deal with it. I take some pride in the fact that the right honorable member for Yarra (Mr. Scullin), a layman, and not in robust health, was himself the inspiration, in his fine address, for the discussion which followed. Although these speeches have been interesting, to most honorable members they have not been peculiarly informative, for the reason that most honorable members - certainly most on this side of the chamber - have over and over again, in the years that have rolled by, addressed similar arguments to the committee and to the electors, here and elsewhere. I may be permitted to take a little pardonable pride in the reflection that I, as a member of a government, introduced in this chamber thelast measure for the enfranchisement of the people by providing them with an instrument of government adaptable to their needs and responsive to their wishes. I should like to make this further observation on the subject of the amendment of the Constitution : The anomalies mentioned by the AttorneyGeneral have all been discussed, elaborated and promulgated over and over again, and the same comment applies entirely to the speech by the honorable member for Warringah. I do not claim that I have been, in my public utterances in this chamber, entirely free always from party bias. Sometimes, I think, I may be ever so little prejudiced in favour of my own party.

Mr Street:

– It is scarcely noticeable.

Mr BRENNAN:

– The honorable gentleman acknowledges the truth of my statement, and I accuse myself of possibly being sometimes a little prejudiced in that direction. I promise this committee, and I think - that I can back myself to give effect to the promise, that, if by a joint sitting, a convention, or any kind of collaboration, we can do something to rid ourselves of these shackles and manacles which we have forged about ourselves, I shall approach that subject without one word of recrimination as to the past, inspired only by the hope that at long last the people of Australia have come to realize the tremendous importance, whatever our views may be on public questions, of being able to give effect to them in the people’s Parliament.

I heard the Attorney-General say yesterday - and here it may be suggested that this is an immediate departure from the principle that I have just laid down, but it is more apparent than real - that when the question of the control of aviation was submitted to the people, he could not but think that the vote, especially in New South “Wales, was influenced by party political considerations. When he made that statement, I ventured to say privately, in the ear of one of my colleagues, that it recalled the fact that years ago, when we were appealing for an instrument of government responsive to the .people’s will, an eminent statesman who is still living, one who is a typical Constitutionalist, United Australia party man or Nationalist, whichever he should be called, asked: “ Are we to give these powers to be exercised by a Labour government ? “ So I suggest that the recollection of that question by that eminent’ statesman who is now out of politics and in poor health - that is the reason why I do not introduce his name - may well be set off against the possibility that the vote in New South Wales was ever so little influenced by party considerations on the question of the control of aviation. But this brings me, between these two suggested conflicting views, to the point that we can never hope to do anything effective or useful regarding the amendment of the Constitution unless Ave rid ourselves entirely of the consideration of the point of view as to what class of government is to exercise these powers. The point is that the government of the day is the elect of the people, and all we ask is that, however much we may suffer from their apparent aberrations in electing such a government as we have . at present, we have nevertheless to bear it. All we say is that, whatever government is to exercise these powers, that government is the choice of the people. The point is not what the government may do or desire to do, but solely what the sovereign people may do or desire to do. There I leave the matter of the amendment of the Constitution.

Some time yesterday the honorable member for Adelaide (Mr. Stacey) paid a very high tribute to his honorable leader. Now, Mr. Chairman, I give you notice that I have left the arena of abstract non-party politics to return to that familiar field in which I feel I may possibly be more at home. The honorable member, as I have said, paid a glowing tribute to his leader. It was more than a tribute; it was a panegyric. I should be tempted to say something similar about the Prime Minister but for ;the fact that I do not think it proper that two poets should compete in the same field. If I were disposed to compete with the honorable member, who, as everybody knows, has all the qualities of the perfect poet I should be inclined to recall those beautiful words which the Prime Minister himself used on one occasion when speaking of an honorable gentleman who had been a member of the Labour party but no longer belonged to it. His desertion was entirely disapproved by the Prime Minister, whose exact words, I regret to say, escape me at the moment. But they were to this effect : “ He comes into his native city, and there is no one to bid him welcome; he leaves the city, and there is no one to bid him Godspeed “. That is truly descriptive of the dreadful fate that is likely to overtake, in fact, inevitably does overtake, sooner or later, all men who forsake their political principles for considerations which I am not permitted to mention in detail. So the Prime Minister in these days of tribulation, with his distraught Cabinet changing chameleon-like from day to day, suiting its colour and shape to its necessities may be praying and hoping that these component parts may yet not realize the highest ambitions of each. As he walks into the Cabinet room he ‘finds there none to bid him welcome; and as he goes out again he must see numbers of potential successors straining at the leash, like the competitors in an old Greek marathon race, to fill the chair that he has just vacated. Some of them would wound, yet are afraid to strike. However, the future will reveal itself. As out of the mouths of babes and sucklings praise is perfected, so it may be that the latest arrival in the Cabinet room, the Minister for Defence (Mr. Street), who is perhaps the most distinguished member of the Ministry, may succeed to the high place of Prime Minister just as he has so unexpectedly reached, recently, the high office of Minister for Defence. Who knows but when the Prime Minister’s back is turned some day, or when the other members of the Cabinet are interlocked in the kind of grip that we often hear described at the stadium, he will slip into the vacant chair to the great disgruntlement of his colleague, the PostmasterGeneral (Mr. Archie Cameron).

I published some blank verse quite recently about the Assistant Minister for Commerce.

Mr Archie Cameron:

– The verse would be blank all right!

An Honorable Member. - What about the Assistant Minister!

Mr BRENNAN:

– I do not see why the master poets of our time should waste their sonnets on obscure representatives of the Government when two such distinguished members of the’ principal department of the Parliament are sitting at the table. Yesterday, or the day before - or was it to-morrow? - we heard a speech by the honorable member for Moreton (Mr. Francis). He also is a representative of the military class who frequently comes into the chamber at the quick march, and sometimes at the double, clicks his heels, and then commences to pour out words of wisdom relative to the defence of the country. On this occasion, the honorable gentleman made his conventional contribution to the gospel of terror which is being supported so ably by this Government. He offered many suggestions concerning universal service. All, said he, must do their part. He indicated that service was required, not only from men, but also from ladies. Women, he said, would be willing to associate themselves with universal service, as a cog in the wheel so to speak, in this purely imaginary crisis or against this entirely imaginary foe.

Mr Blain:

– What, again!

Mr BRENNAN:

– Yes; I intend to immortalize that classic, unless war occurs. I mention the honorable member for Moreton as a pivot on which to turn a few entirely philosophic observations on normal life in times of. peace. I point out that the tendency today is to regard the normal atmosphere of life as an atmosphere of war and terror ; that war, not peace, is the normal state. In a properly-ordered community such as we should be, being at peace, as happily we are, and not being threatened, and being many thousands of miles from any centre of disturbance, I suggest that our workmen should be employed peaceably at attractive operations on work of a useful and uplifting character, as far as possible, and that their wives and families, who are the centre of our social structure, should be in the full enjoyment of the blessings of peace, devoting their leisure to improvement of their mental and physical attributes, so that all may enjoy and be uplifted by the knowledge of the arts and crafts, and to have time and opportunity to enjoy music and legitimate entertainment and the joys of literature. Surely this is not too much to expect from citizens living in a rich and peaceful country such as Australia. We should be setting an example to the world as to how a wellordered society should comport itself under the benign Overlordship of the All Wise. Unfortunately, the tendency of honorable members opposite is to insist that we must live constantly in a state of terror, in anticipation of war, and that we must inculcate into the lives not only of men, but also of women, the mothers of the future generation, and into the lives of the children who, one would have thought, were entitled to an inheritance of reasonable peace, the notion that we live on sufferance, and are threatened from day to day by dreadful neighbours of our own kind, only very much worse, arid with all the horrible punishments that can be executed by aD enemy at war, and- -which, by the prostitution of science, are likely to come upon us as a dreadful scourge. Surely, we should not be encouraged to continue in this purely artificial state of mind and be induced by politicians stimulated by newspaper propagandists to foresee nothing but evil ! I f this is to be regarded as the normal state of mind, it may very well be asked whether the country is worth defending, or life is worth living. I should doubt it.

– That is not true.

Mr ARCHIE CAMERON:

– Nothing has been put forward to show that the Opposition has any ideas, objectives, plans, methods, or policy on any of these important matters. It is true that one important matter was mentioned by the Opposition. I refer to the speech of the right honorable member for Yarra (Mr. Scullin) on the subject of the constitutional relations of the ‘Commonwealth and the States. I do not agree with every point made by the right honorable gentleman, but I do agree with him that there is need foi- an overhaul of the relations of the Commonwealth and the States. The sooner that review takes place the better it will be for the community as a whole. The situation to-day is that we arc labouring under a division of power. Both the Commonwealth and the States have certain legislative powers; somepowers are reserved exclusively to the States, and others exclusively to the Commonwealth. There is also what might be described as a legal “ no man’s land “, in which members of the profession to which the honorable member for Batman and some other honorable members belong, do battle from .time to time in order to decide the rights and wrongs of the different individuals and interests in the community.

During the last twelve months I have had some experience of meetings of various bodies which help to govern this country. I refer to one meeting of the Loan Council, two or three Premiers conferences, and several gatherings of the Australian Agricultural Council. I do not wish to detract one iota from the worth of any of those bodies or from the work that they are doing, but the one thing which has struck me about such gatherings is the number of occasions on which those present have come to the unanimous decision that it is necessary for the six States and the Commonwealth to pass uniform legislation on the same subject. Consequently, although I come from one of the smaller States, and, because of my political upbringing, am inclined to dislike the idea, I am forced to admit that if we have to have uniform legislation on any subject ‘ the only common-sense method is for that legislation to be passed by one Parliament, instead of seven. Whilst uniformity of legislation is desirable, we must not overlook the necessity for the local administration of the laws that are passed.

Mr Brennan:

– Does not the Minister think that with a unified sovereign Parliament and delegated powers, the smaller States would be better off?

Mr ARCHIE CAMERON:

– I shall give my opinion of sovereign parliaments. This Commonwealth Parliament is only a half-sovereign Parliament. There are six half-sovereign State parliaments in competition with it.

Mr Brennan:

– I agree with the Minister.

Mr Holloway:

– No two of the halfsovereign parliaments make a full sovereign.

Mr ARCHIE CAMERON:

– That is so. On account of the Privy Council decision in respect of section 92 of the Constitution, the whole of them together do not make a full sovereign. There is a. gap in the power between Commonwealth and State Parliaments which has not been bridged. Incidentally, I recognize the very great difficulties with which this Parliament and also the State parliaments would be confronted if we were to seek an effective amendment of the Constitution. Democracy is supposed to be a progressive type of government. People who are called democrats are supposed to be enlightened, but I have noticed in my reading of history that one of the outstanding characteristics of a democracy is its conservatism. I do not mean political conservatism in a party sense, but the natural disinclination of the average man to change the methods to which- he is accustomed by reason of his upbringing. I shall refer to some of the advantages which I believe could be secured if there were a greater measure of uniformity in respect of legislation in this country. There is need for more uniformity not only in regard to our methods of taxation, but also in respect of the incidence of taxation as between States. The burdens which the States have to carry, due to the degree to which they depend on primary or secondary industries, or on mining, &c, vary greatly as between one State and another, and make the uniform development of the Commonwealth almost impossible. There is a tendency for development to be concentrated more and more in those areas which already enjoy an undue share of wealth and population, and which did, in fact, enjoy that advantage at the time of federation. I refer to New South Wales and Victoria, where development of this kind has been assisted by certain acts of the Commonwealth Parliament. There is also need for clarification in regard to the provision of transport facilities, both by road and rail, and particularly for the removal of the anomaly of border rates on telegrams’. It still costs 4d. more to send a telegram over a State border, just as it did in prefederation days.

There has been a rather amusing sequel to the last referendum appeal to the people, when the Commonwealth sought control over aviation. The people declared .in the referendum that the Commonwealth Government was not fit to be trusted with such power, but, no sooner had that decision been made, than the six State governments decided that the people’s opinion did not count for anything. They approached the Commonwealth Government, and said, “For heaven’s sake take over from us this power which we do not want, and which the people say you should not have”. State legislation was passed through all parliaments to transfer the power to the Commonwealth, and the people were not even consulted about it.

Then there is the question of distribution of power resources for industrial purposes. As one who comes from one of the smaller States, I say that if there is to be a better distribution of secondary industries, we must evolve a method by which there will be a uniform charge for power throughout all the’ potential manufacturing areas in the Commonwealth. It is not right that power should be cheap in certain areas, and dear in others. I believe that there are great possibilities for the development of manufactures of defence value along the Gulf in South Australia, yet South Australia is the one State in the Commonwealth which has neither oil, water, nor coal with which to make power. The capacity to develop secondary industries in that State is limited by this natural disability, and it starts off under a big handicap in the competition for industries. These are some of the matters which should be attended to at a constitutional session next year. I hope that from it will emerge proposals that will make for cheaper government, and government that will be in closer touch with the people. In this way it should be possible to achieve certain necessary social reforms which are very much needed, but which cannot be effectively brought about while the present division of power between the Commonwealth and the States continues.

I have noticed that, as civilization develops, certain social tendencies invariably develop also. I am prompted to remark on this by the statement of the honorable member for Wimmera (Mr. Wilson) in regard to the declining birth rate. One of the first things that impresses the student of history is that always, as the standard of living of a nation increases, so does the birth rate decline. It was so in the civilizations of Greece, Rome, and Egypt, and it is so in our civilization of the present day.

As social services are increased in a community, so also must we increase that proportion of the total production of the people which goes to the Government in the form of revenue. There is a tendency on the part of democracy, first to ask for social reforms, and then to do a lot of unjustifiable squealing when the bill for those reforms come in. If a clear conception of these points were presented to the people by members of Parliament, it would make for a better understanding. I do not suggest that they should be explained to the people in a party spirit. I dislike party* politics. I am one of those who are by nature ill-fitted to hold their own in party contests with honorable members on the other side. I am always more disposed to view such matters in the light of how they will affect the whole community, rather than of how they will affect the fate of this or that party.

Mr RANKIN:
Bendigo

.- I recognize that the Government has been hampered in its works policy because of the need to prosecute an energetic defence policy. Though the honorable member for Batman (Mr. Brennan) tells us that we are being scared by threats of an imaginary foe, I am sure that he is too intelligent to believe it. Every one recognizes that Australia may be threatened with grave danger if we are not strong enough to defend it.

The Commonwealth will have to face the question of water conservation, in which lies the only hope of increasing our rural population. The need for this is emphasized by the drought which prevails at the present time over a great part of the continent. That water conservation is vital to our existence has been proved by the fact that the only rural areas in which population has increased in the last generation are those in which water conservation schemes are in operation.

I believe that immigration should he encouraged because, if we are to hold Australia, wo must occupy it. Recently, I travelled through the Northern Territory in company with the Minister for the Interior (Mr. McEwen). In that part of Australia there are huge areas that could be developed by means of irrigation and which, properly developed, could support as many people as we now have in the whole of Australia. Northern Australia is at present our weakest point. We must occupy that territory, or it will be taken from us by some other nation that is prepared to occupy and develop it.

I wish now to discuss the report of Air-Marshal Sir Edward Ellington on the Australian Air Force. This man, after a month’s investigation, made a report which, I think, was most unjust to our magnificent Air Force. I believe that we have the best flying material in the world. We have young men who, for some reason, seem to be at home in the air, and it was proved during the war that they were equal, if not superior, to the airmen of any other country. Let us consider the record of this man who came out here, and damned our Air Force with faint praise. He was Chief of the Air Staff in Great Britain in 1937. He came here, and declared that our air discipline is not good, though he was Chief of the British Air Staff, on the blackest day of the Royal Air Force, when they lost nine lives during the 1937 Empire Day air pageant, and when eight machines had to be completely written off. No fewer than twenty men were injured, and the only group that did not have an accident was commanded by an Australian, Group-Captain Goble, who was training in England at the time. He did an air-marshal’s job for two years in England with great credit to himself and to the force to which he belonged, yet Ellington says that the flying discipline of our men is not what it should be. He does not state that for two years before he made that report Air- Vice-Marshal Nicholls, who is now in charge of the Eastern Air Command in Egypt, was responsible for the flying discipline of the Australian Air Force. While here Air- Vice-Marshal Nicholls received a salary of £2,780 a year, though Air-Vice-Marshal Williams, his senior, was receiving only £1,750 a year. This man Ellington was Chief of the Air Staff during the recent crisis in Great Britain, when the only excuse that Britain had for betraying the Czech oslovakian nation was that its air force was not up to standard, and that the air defences of London were so poor that the city was practically open to attack by any foreign power.

Mr Pollard:

– Is that why peace was made?

– I think that that is very likely. Our lack of equipment is the one great weakness of the Royal Australian Air Force. It has no weakness of personnel. The Royal Australian Air Force has in its service many able senior officers. Air Vice-Marshal Williams was in Palestine during the war, and I saw a good deal of the work done by his famous squadron, which was second in deeds and valour to none. The men who formed this squadron, all of whom were trained by Air Vice-Marshal Williams, won laurels for their flying feats. Some of them were absorbed into the Royal Australian Air Force, where they gained high positions. Their world flights and their work in Australia prove that they were a magnificent body of men. Air Vice-Marshal Williams, although he was junior to the commanders of two British squadrons, was appointed to the command in Palestine when the CommanderinChief of the E.E.F. Air Force, which was composed of three British squadrons and one Australian squadron, was sent to the command in India in 1918. No one would deny that for an Australian to achieve a command over the heads of senior men in the Royal Air Force, he needs to be of outstanding ability. To-day, in the Royal Australian Air Force, we have men like Goble, Anderson, De La Rue and Lukis, all of them group commanders, in addition, of course, to Air ViceMarshal Williams. Any one of them would be far superior to any man whom we could obtain from Great Britain to command our Air Force. There has been talk of an exchange of Royal Australian Air Force officers for Royal Air Force officers. We know also that with the expansion of the Royal Australian Air Force, there will be created in Australia . the position of Air Marshal. On the 14th September,- the Sydney Bulletin said -

To the disgust of Australian airmen, Royal Australian Air Force and Civil Aviation lads alike, Canberra is getting more Avro-Anson bombers from Great Britain. Some of them are “ used “ machines. The appointment of a British officer to command the Royal Australian Air Force, as the Royal Australian Navy and the Commonwealth Military Forces are commanded by British officers, is expected at any moment. Perhaps he, too, will be a “ used machine.”

I should say that, if we did obtain a man from the- Royal Air Force to take charge of our Air Force, he would not be one of the top-notchers, because Great Britain to-day faces such a threat from Europe that it would not dare to send one of its best men to Australia. The Royal Air Force is very willing to take our “best nien, but I fear that it would be inclined to send one of its “ duds “ here. I think that Sir Edward Ellington came to Aus tralia with the intention to make a job for some senior man in the Royal Air Force. We know that many men climbed to undeserved eminence during the war on the backs of the Australian Imperial Forces, and I hope that the Government will not entertain the idea of bringing a man from Great Britain to Australia to take command of our Air Force. I advise it to take no heed of Sir Edward Ellington’s report. It must not allow itself to be stampeded into doing anything that will destroy the morale and discipline of the Royal Australian Air Force, which is a magnificent force and one of which Australia should be proud.

The TEMPORARY CHAIRMAN (Mr Nairn:
PERTH, WESTERN AUSTRALIA

– The honorable member for Maribyrnong-

Mr James:

– On a point of order, I ask whether the Chair is justified in preparing a list of speakers? Why is it that some honorable gentlemen who remained in the chamber throughout an allnight sitting and constantly rose in their places to try to catch the eye of the Chairman are not called, whereas other honorable gentlemen, who were in bed all night, are given prioritv by the Chair?

The TEMPORARY CHAIRMAN:

– That is a point which should be taken before the Chairman of Committees (Mr. Prowse). I am following his list.

Mr James:

– While we await the arrival of the Chairman of Committees, injustice is being done to honorable members.

The TEMPORARY CHAIRMAN:

– There is no point of order. The honorable member for Maribyrnong (Mr. Drakeford) has the call.

Mr James:

– If you are not capable of giving a ruling as Temporary Chairman of Committees, von have no right to accept the position. I move -

That the ruling be dissented from.

The TEMPORARY CHAIRMAN.The point is covered by Standing Order No. 255-

When two or more members rise together to speak, the Speaker shall call upon the member who, inhis opinion, first rose in his place; …

The TEMPORARY CHAIRMAN:

– I gave the call to the honorable member for Maribyrnong (Mr. Drakeford), and the honorable member for Hunter has moved that my ruling be dissented from. I have accepted his motion.

Mr Holt:

– As the honorable member for Hunter was at the table talking to you when the honorable member for Maribyrnong rose in his place, it cannot be contended that he rose first on this particular occasion. Consequently, your action in giving the call to the honorable member for Maribyrnong was perfectly in order. However, it appears to be distinctly unfair that honorable members whose names appear on the list, but who have been absent, for instance, during an all-night sitting, should on returning to the chamber be given preference over those who have been present throughout a long sitting. When a debate is likely to extend over a lengthy period during one clay it is convenient for honorable members to have a list showing the order in which they are to speak. Honorable members have various duties to perform, and cannot be in the chamber all the time. When a debate continues throughout the night or over a period of days, the practice of keeping a list should not extend beyond the day on which the list is prepared.

Mr Curtin:

– Where the Standing Orders specify what shall be done in certain circumstances there is no occasion for Mr. Speaker or the Chairman of Committees, as the case may be, to substitute what is regarded as the practice. The Chairman of Committees knows those who have risen and have not been called. Whether the Chairman does or does not adhere to the list is apparently left to his discretion. A list is productive of unfairness. Standing Order 255 is specific and there appears to be no justification for the use of a list. That standing order reads -

When two or more members rise together to speak, the Speaker shall call upon the member who, in his opinion first rose in his place.

It is left to the discretion of Mr. Speaker, or the Chairman of Committees in this case to decide who rose first. The standing order further provides -

But it shall be in order to move, that any member who has risen “ bo now heard “, or “ do now speak “.

The standing order, therefore, negatives the necessity for a list. It also pre-, serves the rights of the committee as a deliberative chamber because should a substantive motion be moved by some honorable member, the Chairman’s decision can he varied. In this case the call was given to the honorable member for Maribyrnong (Mr. Drakeford), and it is open to any honorable member to move that the honorable member for Hunter (Mr. James) “be now heard” or “ do now speak “.

Mr Menzies:

– That would be the correct procedure.

Mr Curtin:

– Yes. I suggest that the honorable member for Hunter withdraw his motion of dissent. If he feels that be should have priority over the honorable member for Maribyrnong or any one else, the proper course is for him to move in accordance with the standing order which I have just cited. The Temporary Chairman has called upon the honorable member for Maribyrnong, but the honorable member for Hunter may, if he so desires, move that he, the honorable member for Hunter, “ be now heard “.

Mr Archie Cameron:

– I do not think he could move that himself.

Mr Curtin:

– I think that he could. I am not advocating the claims of any particular honorable member. Standing Order No. 255 prescribes the procedure which safeguards the committee and enables it to vary the decision of the Chairman. In view of that standing order, there does not appear to bc any justification for keeping a list of those members who propose to speak. I am quite sure that that list has been productive of as much inconvenience as convenience. It destroys, to some extent, the deliberative competence of the committee. When an honorable member finds that bis name is low down on the list, he may absent himself from the chamber, in which case he does not hear the speeches of other honorable members, “and consequently is not in a position to debate the subjects raised. He is enabled to recite a prepared speech which he desires to circulate amongst his constituents. This committee should be a debating committee. When the second reading of a bill is under consideration, prepared speeches may be justified, but in committee consideration should be given to the points raised. A committee of the whole House is vastly - different from other committees. It should be a committee in which points raised are not only discussed by members of the committee, but are also heard by members.

Mr Holt:

– Does the Leader of the Opposition suggest that speakers should not be selected alternately from each side of the chamber?

Mr.Curtin. - No. I am merely showing that the Standing Orders specify the way in which the Chairman of Committees shall decide who has the call. The Chairman, having decided who ought to be heard, it is still open for any member of the committee to move that some other honorable member be heard.

Mr Prowse:

– I rise in consequence of the remarks of the honorable member for Werriwa (Mr. Lazzarini), which are quite unworthy of the honorable member. The Leader of the Opposition (Mr. Curtin) has stated the position correctly. The practice of keeping a list of speakers was not introduced by me. The system was in operation before I was appointed Chairman of Committees, but I have used it to enable me to carry out my duties impartially. Although a list is prepared for my own use, it has been made available to honorable members, and that has created difficulties. Honorable members are expected to speak extemporaneously. Some do, but many use notes. When the budget debate commenced I think that over 50 per cent. of honorable members on both side rose for the call. I called the first speaker who caught my eye, then for my own information and to ensure complete impartiality prepared a list. If honorable gentlemen will examine it they will see that the calls given have been very fair. I did not deliberately exclude the honorable member for Hunter, but last night it, did not appear that he was anxious for a call.

Mr James:

– What?

Mr Prowse:

– At all events, I did not see the honorable gentleman rise. I think he knew that I had a list, so he could have suggested earlier that his name be placed on it. The Chair is quite impartial. It has no knowledge of the member who goes to bed or the member who remains in the committee throughout the sitting. But it does try to identify honorable members rising for the call and endeavours to deal fairly with all honorable members. However, I can tell them that in future they will not see the list. I shall keep it for my own guidance.

Mr James:

– I ask leave to withdraw my motion.

Mr Drakeford:

– I have noticed that on the occasions when matters of importance were under discussion, although I might have risen simultaneously with other honorable members, I was unfortunate enough to be the last to get the call. I say this quite frankly and without feeling, because I know that this apparent discrimination has not been personal. It appears to arise from the practice which has grown up. It is, however, annoying to rise and fail to get the call even if no one rises onthe ministerial bench. On many occasions, members who have come in afterwards have received the call ahead of me although I may have been sitting in my place for hours waiting for the opportunity to speak. To-night I rose before the honorable member for Hunter, and I claim that I was entitled to the call. I do not dispute that the honorable gentleman remained in the chamber until four o’clock this morning in anticipation of being able to participate in this debate. For the first time in the four years since I have been a member of this Parliament, I left shortly after midnight. I did so only after I had ascertained that on the Chairman’s list there were 21 members ahead of me. and as each was entitled to speak for three-quarters of an hour, I knew that Ihad no chance of getting the call before eight o’clock or nine o’clock this morning. For many years it has been the practice of the Chair to prepare a list of intending speakers, and it so happens that I have become the victim in a controversy that has arisen in connexion with it. I understand the awkward predicament in which the committee is placed, and I concede that it is necessary to have some order in the calls from the Chair. I have never sought toinfringe the rights of any other honorable member, and I hope to be able to relieve the existing situation. I assure the honorable member for Hunter that I have no desire to deprive him of the opportunity to speak to-night, or to be given any precedence over him in this debate; but the committee should decide whether it will adhere to the procedure laid clown under Standing Order 255, which directs the Chairman to call upon the member who first rises in his place. If this is to be the procedure, I claim the right to the call because I rose before the honorable member for Hunter. The honorable gentleman may have remained in the chamber until a late hour this morning, and he may feel that he is entitled to speak ahead of me, but I have been here since the morning sitting opened, and have been waiting for the call. Those who remain in the chamber to listen to the debate, and rise repeatedly when an honorable member has finished his speech, should have preference over others who may wander in and out but expect to catch the Speaker’s eye when first they rise. However, as a decision on that matter may prevent the honorable member for Hunter from speaking to-night, I desire to withdraw in his favour.

Mr Blackburn:

– Before the motion of dissent is withdrawn the committee should have an oportunity to determine whether or not it approves of the Temporary Chairman’s ruling. The only member who rose to get the call was the honorable member for Maribyrnong (Mr. Drakeford). As the honorable member for Hunter did not rise in competition with him, I submit that the Temporary Chairman was right in giving the call to the only honorable member who rose.

Mr James:

– How could the Temporary Chairman see the honorable member for Maribyrnong? I was in front of him. But as the matter has been ventilated, I am quite satisfied, and I desire to withdraw my motion. I hope that in the future the list will be dispensed with.

Motion - by have - withdrawn.

Mr DRAKEFORD:
Maribyrnong

– Either by accident or design the budget debate has developed along the lines of the Government’s favorite topic - defence. Ministers should be well versed in that subject; they have been on the defensive for .years. Not long ago one honorable member- he

Inter joined the Government, and at this moment he is the only Minister in the chamber - came prominently before the public as the result of his vigorous attacks on the Ministry. Honorable members will remember that while sitting in the cross benches the honorable gentleman frequently condemned other honorable members and measures introduced by the Government. I did not blame him for that. There were so many things wrong with the Government, in the opinion of the honorable gentleman, that apparently the only thing to do, to keep him quiet, was to include him in the Cabinet.

Mr Archie Cameron:

– And in the opinion of the honorable member, the Cabinet has become worse?

Mr DRAKEFORD:

– Yes. The honorable gentleman has, no doubt, done his best to prop up a. Government that is tottering to its doom. It was a difficult task, but like the latest kaleidoscopic change in the Ministry, it has been successfully carried out, so. that a new collection of ministerial stray pieces is now presented to the public gaze. The PostmasterGeneral (Mr. Archie Cameron) is a vigorous and capable fighter, and no doubt his strength in that direction will bc useful in propping up the Government.

What is the exact reason for the increased defence vote? Until a few months ago it was considered that an expenditure of £43,000,000 spread over a period of three “years would be sufficient to provide for the defence of this country. To that figure should have been, added £1,000,000 per annum, for civil aviation, making a total of £46,000,000 for t,he three years. Now we are expected to vote for still further expenditure.

A month or two ago a grave crisis occurred in European affairs, but after much anxiety it was peacefully settled by negotiations initiated by the British Prime Minister. Since then there has been a deluge of propaganda, in favour pf a considerable increase of defence expenditure. The spending of this money on unproductive war material greatly impairs our capacity to carry out real social reforms. It also prevents this country from being made as attractive” as it should be, and as it used to be, to people from overseas, except those unfortunates who are seeking refuge from war-scarred fascist-ridden countries. It does not now attract, as it did a quarter of a century ago, and as New Zealand is doing to-day, people from other countries because of better social and industrial conditions. On the contrary, the position has been reversed ; we are now losing that section of the population. That is a reflection upon the Commonwealth Government. This enormous expenditure on defence is a colossal burden for a young country to carry. I complain that honorable members of this Parliament have not been furnished with sufficient lata on which to judge, the need for the impending of approximately £46,000,000 for defence purposes in three years and the further indefinite increase of that amount now proposed. Much of this expenditure is based on fears and propaganda which, for all we know, are mere distortions of the truth. We arc to have a statement from the newly appointed Minister for .Defence (Mr. .Street) on the position, and I am quite sure that if any one can make a case to justify the expenditure he will be able to do so, but I doubt if any one oan. 1 do not think that any member of the Cabinet before its reformation could have done so; that was, perhaps, one of the principal reasons far the Cabinet reconstruction. Recently, I addressed the Minister for Defence, upon vol irc, the following question relating to the amount of money being expended overseas on the purchase of war material : -

Will lie furnish tin? House with the total value of i in pints of arms and munitions and nil materials associated with -the defence of Australia, excluding cruisers, for the years 103 1 -32 to 1037-38. showing each veur separately?

To-day I received the following reply: -

I urn now in a position to inform the honorable member ,-is follows: -

This information shows how unready, after seven years, are combination governments of the kind now entrusted with the task of governing Australia to meet emergencies without resorting to importations from overseas. The money now being expended on defence might very well bc used for tha employment of our own people. Heaven only knows the extent to which the country has been committed for 193S-39. It will be seen from the figures supplied in answer to my question, that, whereas only £84,000 was expended on purchases of war material abroad in 1931-32, more than £1,500,000 was so expended in 1037-3S. I venture to suggest that when figures are made available for 1938-39, they will disclose that our overseas expenditure on defence requirements has been increased enormously. During the regime of the Labour Government the Labour party held the view that if the need arose Australia could rely on the British Commonwealth of Nations to. provide adequate defence for Australia. The composite government, which occupied the treasury bench for seven successive years, combated that view. It opposed the contention of the Labour party that the defence arm which needed development and special attention was the air force. Yesterday, the honorable member for Kalgoorlie (Mr. Green) read from an article appearing in one of the metropolitan newspapers, written by a person who termed himself a naval expert, in which the writer claimed that expenditure on battleships and cruisers was entirely unnecessary. That . view is shared by many people who think that the money could have been better expended in other directions of a purely defensive character. I was greatly interested in that gentleman’s views. I do not think that any one in this House claims to bc an expert, but we are all expected to formulate some views from the information placed before us, as to what is appropriate for the adequate defence of this country. Labour’s defence policy, which was opposed by the Government, is now being given effect. The Postmaster-General to-night said that there are widely divergent opinions among the members of the Labour party as to what should be done for the adequate defence of Australia. I venture to suggest that the honorable gentleman knows quite well that Labour’s policy is in the terms enunciated by the Leader of the Opposition, published in the press, and broadcast throughout Australia on the 19 th October last. The terms of that policy were printed in the Canberra Times as well as in many other newspapers throughout the Commonwealth, so that Labour’s attitude towards defenceis very well known. What the press of Australia thinks about the Government’s position in relation to the defence of Australia is exemplified in a few quotations which I now propose to make. According to the Country party Bulletin of the 6th October last year, the then Minister for Defence (Mr. Thorby) said that he had the satisfaction of being able to assure Cabinet, from his own personal investigations, that Australia’s military organization was complete for any emergency. The Melbourne Herald, of the 14th October, stated -

The weakest link in Australia’s defence at the present moment is the Federal Cabinet …

It was seen that Australia depended for its security on -

A navy that could do nothing else but run for safety away from Australia if a hos ti le battleship entered our waters.
A land army of 35,000 ill-trained citizens, of whom it is estimated about 11,000 are efficient enough to take the field.
An air force that does not possess an efficient modern bombing plane, and that, on the present provisions for replacement, might, with very good luck, last three weeks under war conditions.

In a later issue, published on the 22nd October, the same journal stated -

There is uncertainty as to the defence deficiencies and doubt asto what are the exact intentions of the Federal Government.

That statement accurately reflects the state of mind of the people of Australia. In the Sydney Morning Herald of the 27th October, the following paragraph appeared : -

Despite the statements by the Minister for Defence (Mr. Thorby) on the precautions taken in the recent crisis, the fact remains that the emergency demonstrated that Australia was unready to meet attack. Some of the deficiencies that were revealed were: at the end of September the naval squadron was weaker even than it was during the starved years of the depression.

If anybody was responsible for that, it was certainly this Government. Now, however, it is making a bold rush to overtake the deficiencies, and is calling upon the people to shoulder a heavy burden of increased taxation to meet expenditure which, had the Government acted wisely, wouldnever have been necessary. Another paragraph from the same issue reads -

The Air Force had no genuinely-modern machines. In fact, no machines whose performances approach those of passenger planes that have been operating in Australia for the last year or so.

That is another indictment of the Government for its incapacity. I place the opinions of this journal on record because I believe that they are characteristic of the views expressed by other journals throughout Australia. The Melbourne Herald, of the 31st October, stated -

The September crisis showed us with great clarity just what our own defences amounted to. It showed us that they were hopelessly inadequate even for protection against raids.

If that is the position of those who support the Government,I think the people have little cause for gratification in respect of what the Government claims to have been doing.

The Government is not approaching the subject of defence in the right way. It proposes that the people shall be taxed heavily to provide the funds necessary for defence. Whilst that may be in accordance with the policy of the Labour party, if the information to which honorable members are entitled were given, it might show that the proposed heavy expenditure is entirely unnecessary. Until the Government furnishes definite proof that it is now necessary to incur this enormous cost, I do not propose to rest satisfied with its efforts. The Treasurer (Mr. Casey), for instance, has been emphatic in stating that money practically without limit can be made available for defence purposes. If the Government really believed that Australia faces a crisis, and if it were not indulging largely in propaganda prompted by a desire to justify itself, in the event of a similar crisis arising in the near future, it could find money for defence other than by placing on the people heavy burdens which they are not well able to carry. It could provide ample finance for defence by increasing the capacity of the people to defend this country. By following the example of New Zealand, it could make credits available for public works by which the unemployed could be put into employment. This would attract to this country additional population which could be utilized for defence purposes. The first essential in defence operations is capacity to concentrate forces strong enough to resist an attack, but the Government has entirely failed to make the necessary provision for that.

Until recently, the Government appeared to believe that so long as it took steps to resist a possible raid, on the ports or shores of Australia, or to raise a quota of soldiers to send overseas, and to provide protection for the ships which conveyed them to distant parts, it was doing all that was expected of it. While the Government dallies with the project, the States are putting forward various other claims. The Government has not done things which would be of real value to the community by employing the people on useful works. [Quorum formed.]

I have from time to time referred to the difficulties experienced by honorable members in getting complete information as to what this Government is doing. One can readily understand difficulties arising because it seems absolutely necessary for Ministers to devise ways and means of propping up the Government. Its meetings for this purpose are frequently interrupted by the ringing of the bells for a quorum. Occasionally, Ministers return to the chamber with a broad smile, or to make ponderous speeches, but, as soon as the bells have ceased to ring, they quickly disappear. The fact that the need for a quorum was plainly seen a few moments ago, even by supporters of the Government, shows that very little interest is taken by its own followers in the proceedings in this chamber. The method adopted in the administration of the affairs of the Commonwealth is depriving members of this Parliament of an opportunity to keep themselves fully informed as to governmental activities. Such methods will help to lower the people’s opinion of the capacity of this Parliament as a democratic institution to safeguard their interests. Honorable members are afforded no opportunity to examine in detail what the Government is advised by its experts to do. My four years’ experience in this chamber has shown me that budgets are merely brought down for the purpose of giving honorable members an opportunity to talk, but not to enable them to make a complete and consecutive analysis of the governmental programme. We have had the spectacle to-day of the budget debate being interrupted in order to make way for what the Government considers to be important legislation. Instead of the budget proposals being continuously debated, so that members on both sides of the chamber may criticize them, these proposals are put under the table temporarily in order to make way for other measures. This prevents members from properly discharging their duties.

The practice of the present Government - one cannot call it a policy - is to keep the Parliament in recess as long as possible, and to exercise control by cabinet administration. During the whole of 1937, this Parliament met on only 30 days, and this year it has sat on only slightly over 30 daysup to the present time. Even when Parliament was in session the Government used the “ gag “ and the “ guillotine “ to bludgeon its legislation through. The impression which has existed since the last elections that all was not harmonious within the Cabinet, and that the same conditions still prevail, seems to have complete justification. It appears that the Government feels that the longer it can keep away from Parliament and its corollary of party meetings the safer it is from the dangers of further reconstruction from within, and from well-justified criticism from without its ranks.

Instead of using the interregnum between the periodic sittings of Parliament for the purpose of giving consideration to the problems which Australia has to face, and of preparing legislation to meet them, it calls Parliament together only to obtain money to enable it to carry on, and presents a lean programme framed, as far as possible, to avoid conflict between the parties of which it is composed. That is the kind of government Australia is suffering from to-day. Three main groups of political thought are prominent in Australia. -The most important of these is that which supports the policy of the Labour party. Its numbers account for approximately half the total number of electors. The second group is that which supports the United Australia party, which nowadays has insufficient support to enable it to govern by its own strength. The third group is the Country party, which claims to represent those who live mainly outside the metropolitan districts, but allies itself to the United Australia party and obtains, in return, certain considerations, and, some representation in the Cabinet, which destroys its power to render full assistance to the farming community. The interests represented by the United Australia party, find it to their interest to placate the members of the Country party, so that they may continue the process of the exploitation of the workers, including the farmers. The representatives of the country area3 agree readily to accept the plums of office, and then go on their way maintaining their own importance and letting the country down.

There can be no real affinity between the exploiting interests of Australia and the farmer - I mean the farmer who farms, not the owner of the land which the farmer tills, which is very often a trustee company or a wealthy banking corporation. Gradually the truth of that is being realized by farmers and other country residents. When this realization is complete, or nearly so, as it is in New Zealand, the composite Government, as a factor in politics, will disappear, to the great advantage of Australia.

Is it any wonder that under conditions such as I have described there is evidence of disintegration within the composite Government. The awakening interest of the farmers is indicated by the return to Parliament at the last election of men like the honorable member for Ballarat (Mr. Pollard), fifteen Labour senators, and an independent representative of the farmers the honorable member for Wimmera (Mr. Wilson). This election result has compelled the representatives of the Country party within the Cabinet to ask for things which the United Australia party section is reluctant to give, and so is bringing the Government to the brink of political disaster. The Government cannot lead, nor can it be led, in the direction of progress. To maintain its hold on office it must offer the exploiting interests an increasing share of profits, and, as farmers are now being ‘squeezed harder than ever, they are becoming increasingly difficult to placate. They are now being told by the Government and by newspapers which support the Government that, in order that they may remain on farms which they do not own, and which might be taken by an undesignated enemy, many millions of money, in addition to the amount originally announced, must be expended to protect them and other citizens from the unknown. Out of this expenditure the friends of the United Australia party will reap increased profits, while the general taxpayers will have their burden increased. The present Government combination is incapable of evolving conditions in Australia which will serve to attract the kind of immigrants needed here. The Government is, in effect, under the control of the powerful financial groups which are the real government of the Commonwealth. These interests must be satisfied, and all of the Government’s energies are concentrated on the achievement of this objective. The Government’s channels of propaganda are flooded with statements calculated to keep our population in a stage of excitement, in, which it will readily submit to schemes that ordinarily would not be acceptable.

Markets for the products of our farming community could be extended in Australia if the community were given greater purchasing power, by decreasing the hours of labour, and by undertaking a programme of essential public works, which would increase the avenues of employment and raise the standard of living. The better housing of the people, the provision of water conservation works, the carrying out of wisely-planned’ forestry schemes designed to increase our timber resources and arrest the wastage of valuable land by soil erosion, the development of our oil resources, and the installation of plants to provide power for our industries, are all matters of major importance to which this Parliament could give attention if the Government did not prevent it from so doing. This Government and its immediate predecessors have used every conceivable means to retain office and power, but because of lack of capacity to initiate constructive, nation-wide work, very few, if any, important public works have been put in hand.

The Government has not only failed to keep its promises, but it has also brought Parliament into disfavour and even disrepute with a fairly strong and rapidly-growing section of the community, which feels that Parliament is not oven trying to deal with our important problems.

I propose now to revert for a few moments to the subject of parliamentary procedure in order to rebut certain remarks made by an honorable gentleman opposite during our recent discussion of the need to standardize our railway gauges. It is deplorable that our forms of procedure should permit honorable gentlemen who occupy high ministerial office to indulge in misrepresentation of a most unfair and unjustifiable description. I accuse the Minister for Commerce (Sir Earle Page) of such tactics, and I shall give an example of the kind of conduct to which I object. The right honorable gentleman attacked the Labour party for what he alleged to be its opposition to the proposal to proceed with the Brisbane-Kyogle section of the 4-ft. 81/2-in. gauge. I challenge that statement as being, not only inaccurate, but also sheer misrepresentation, for which it is hard to find any excuse whatsoever. The facts are that a bill was introduced by the then Prime Minister, Mr. Bruce, on the 18th September, 1924, to authorize the construction of the Brisbane-Kyogle line. The then honorable member for South Sydney, Mr.Riley, resumed the debate on the 25th September on behalf of the Labour party. Ho supported the bill without any qualification. As might be expected from the leader of the debate for the Labour party, he expressed the hope that the proposed new line would be only the first instalment of the complete plan to standardize our railway gauges, and concluded with these words - “ The bill should be supported by all honorable members who regard themselves as true Australians”. After a discussion which lasted one and a half hours, the debate was adjourned on the motion of the then honorable member for Kooyong, Mr. Latham, who resumed the debate on the 1st October and moved an amendment to the effect that the bill be withdrawn and referred to the Public Works Committee. The subsequent debate ranged largely around the amendment, and lasted from 4.57 p.m. to 1.30 a.m. Most of the time was occupied by Government supporters. On that date the debate lasted a little over seven hours, of which Government supporters occupied four hours and the Opposition three hours. The vote of the honorable member for Kooyong was not on party lines, for the majority - nine out of sixteen - of those who supported the amendment were Government supporters. Their names were -

Mr. M. Cameron.

Mr. R. W. Foster.

Mr. H. Gregory.

Mr. Duncan Hughes.

Mr. G. Hurry.

Mr. J. G. Latham.

Mr. J. H. Lister.

Mr. E. S. Mann.

Mr. S. C. Seabrook.

The other five who voted for the amendment were Labour members, who believed that the proposal should be referred to the Public Works Committee, so that the relationship to the Brisbane-Kyogle section of the whole scheme of standardization could be examined to ensure it would be part of the general scheme, and that other States should not have to pay for a section of railway in New South Wales and Queensland and not get their portion of the work done. That their fears were justified has been shown by the regrettablelack of leadership and action since that time. The committee stage occupied only a brief time. The bill was put through without amendment in. an hour and a quarter of which time Opposition members occupied only ten minutes. These details are given only because of the grossly unfair attempt of the Minister for Commerce to make it appear that the Labour party attempted to block the Government’s efforts to proceed with the first portion of the scheme for standardizing the gauges. If any attempt at delay took place - and I submit that there is not a tittle of evidence to support the charge - it originated among Government supporters, and the reflections on Labour made by the right honorable gentleman are without foundation. I emphasize this matter because something better is expected from a gentleman occupying the high office that he holds. Such misrepresentation causes a contempt for the parliamentary institution. I regret to have to say these things, but that is only one example of many that could be cited.

Greater activity should be displayed in the search for oil. Honorable members can visualize the position in which this country would be placed in the event of war, for it would be without the means of carrying on essential transport services. The Government has not placed before us any evidence that it is in earnest in this matter. When honorable members ask for information on the subject, they are told that the reports which the Government has received are secret. Some time ago I asked for information about the Railways War Council, and on repeating the question, the Minister wrote a brief note to the effect that the council had met on the 13th July, but that he regretted that he could not give any information because the official reports were secret. On one occasion, the information was vouchsafed that the council had met once in ten years. Subsequently, some of its members were replaced by others, but what they did we do not know. What has taken place in connexion with the Railways War Council has taken place also in connexion with the storage of the oil necessary for defence; the representatives of the people are not given any information, except that a vast sum of money is to bo expended in the defence of the country. We are not told whether, from the moneys voted foi* defence purposes, a sum will be set aside to enable the search for oil’ to be prosecuted more vigorously. It would appear that no strenuous efforts in that direction are being made.

Australia has not a dock large enough to accommodate a battleship, yet the Government does nothing to stimulate the shipbuilding industry in this country. Any one who studies the position must realize that the Government has fallen down on its job. I shall take a later opportunity to say more on the subject of shipbuilding. I hope that as the result of this debate something of value will be done.

As the honorable member for Melbourne Ports (Mr. Holloway) pointed out, the share of the wealth of this country which the workers receive is gradually declining. No nation can be successful in such circumstances, especially ‘when, at the same time, rents and profits are increasing. That state of affairs may explain why people from other countries are not attracted to Australia. The reason for the Government’s inaction is obvious. It is a capitalist Government which is controlled by anti-social interests. I do. not say that the men who form the Government are without humane feelings, but the social system under which the Government operates makes it difficult for them to do what they, as individuals, would like to do. There is evidence that the standard of living in Australia is gradually declining, and therefore I hope that even at this late stage the Government will awaken to the seriousness pf the position, and do something to improve conditions. Notwithstanding that a great deal of the time of the Government is taken up in patching up internal disagreements, I hope that it will be strong enough to seize the opportunity to put Australia on a sound basis, so that Australia, like New Zealand, may attract desirable people from other lands, and proceed to a brighter future.

Mr JAMES:
Hunter

.- I have listened to many budget debates, but I think that the present discussion is of a higher standard than usual, due mainly to the good example set by the right honorable member for Yarra (Mr. Scullin) in his speech on the constitutional relations of the Commonwealth and the States. His lead .was followed by the Attorney-General (Mr. Menzies). It is to be hoped that the constitution session which the Prime Minister (Mr. Lyons) promised will he held soon. Although a definite pledge was given to the people that if they agreed to the federation the State parliaments would ultimately be abolished, they have never yet had submitted to them in a simple form a refe- rendum to decide this issue. I believe that if they were asked to say whether or not they are in favour of the abolition of State parliaments, the answer would be in the affirmative. In 1925, the electors’ were asked to agree to an amendment of the Constitution to give greater powers to the Commonwealth in regard to industrial matters, marketing, and trade and commerce. The referendum was fought more on party political lines than with any idea of benefiting the nation as a whole. Until we can reach agreement among ourselves, and go to the country as one party seeking these powers, I do not believe that we shall ever achieve any material alteration of the Constitution. In 1925, some sort of an understanding was reached by the then Leader of the Opposition (Mr. Charlton) and the Prime Minister (Mr. Bruce) regarding two of the three questions submitted, but when it came to the taking of the referendum, the political parties in the States found themselves at variance on the issue, though one party was no more to blame for this than the other.

The Commonwealth Parliament cannot govern in the interests of the nation unless greater powers are ceded to it. I stand for complete unification; for the abolition of State parliaments. I know that any step in that direction will be opposed by certain vested State interests. When I took an active part in industrial matters, I advocated one union for the whole of the coal-mining industry, but 1 encountered much opposition from the officials of craft unions, who recognized that my suggestions threatened their jobs. I am convinced that a similar fear actuates many State members of parliament in their opposition to unification. They believe that if greater powers are ceded to the Federal Parliament, they will lose their jobs. I do not believe for a moment that, if the State parliaments were abolished, the existing representation in the Federal Parliament would be sufficient to enable the work of governing Australia to be, carried on efficiently. The present membership of this Parliament would need to be doubled, at least. Most of the duties now performed by the State parliaments could be more effectively and economically performed by this Parliament simply by increasing its membership. At the present time, each federal electorate returns an average of three and one-half members of parliament, State and Federal. My own electorate returns five, while some others return four. If the present federal constituencies were split in such a way that each of them would return three members to this Parliament, I believe that much of the existing opposition to unification would disappear. On one occasion, when I was addressing my constituents on this subject, a member of the State Parliament said to me, “ It is all very well for you to advocate the abolition of State parliaments; you have a job, but what about us?” That is typical of much’ of the opposition to unification.

The conflict and turmoil that are so widespread at the present time will continue as- long as responsibility is divided between State and Commonwealth Parliaments. Much of the existing industrial unrest is due to the existence of awards which are not uniform throughout the Commonwealth. Before the Federal Arbitration Court can function, there must be an interstate dispute. Before I entered this Parliament, I had a good deal of experience in regard to industrial disputes in the mining industry. Upon occasions, it was necessary to create an industrial dispute in order to bring the matter before the Federal Coal Tribunal. The recent coalmining dispute was definitely interstate in character, but even then the Commonwealth Government refused to intervene. Its excuse was that the constitutional validity of the Industrial Peace Act was doubtful, but if increased constitutional powers were ceded to the Commonwealth, those doubts could be removed, and an important step would be taken towards achieving industrial harmony.

Another anomaly is that, while the Commonwealth Arbitration Court can prescribe wages and conditions of labour, the Commonwealth has no control over commodity prices. Sometimes, when awards are made by the Arbitration Court, manufacturers increase their prices by as much as 50 per cent, more than is necessary to meet the increased cost, but the Commonwealth Government can do nothing about it. In the same way, Parliament may grant tariff protection to a manufacturer, even to the extent of totally prohibiting the importation of competitive goods. In the same way under the cloak of the tariff protection given by the Commonwealth Government some avaricious manufacturers, because they have no competition, are able to increase the prices of their commodities above what would give them a reasonable profit. All that the Commonwealth Government can do to check them is to remove the tariff protection. These things are wrong. I could continue to relate anomalies, but what I have said should be sufficient to direct attention to them.

There is need for uniformity of the basic wage. When Mr. Lang was in power in New South Wales, the basic wage was maintained at £4 2s. 6d., whereas in other States it was forced down to about £3 a week. The result wa3 that Victoria was able to flood New South Wales with goods. The Constitution prevented New South Wales from doing anything to prevent it. All that Mr. Lang could do was to send men around the stores to ask them to indicate on their goods the State of origin. It is grossly unfair that a manufacturer in New South Wales should have to pay higher wages than a similar manufacturer in Victoria. Not for one moment will I allow it to be thought that I am advocating a uniform basic-wage rate on anything but the highest level. I say not that New South Wales should come down to the level of the other States, but that the other States should rise to the level of New South Wales.

This Government was returned to office on the catch-cry, “Follow Great Britain “. It has done nothing in the coal industry that would indicate that that is its policy. In order to make itself independent of foreign oil and petrol supplies, Great Britain has developed the extraction of oil from coal and shale to a great degree, but this Government, despite constant urging by me and other interested persons, has refused to take similar action. It is of no use for the Minister for Defence (Mr. Street) to boast about the way in which the Australian defence forces are being mechanized, because without fuel a mechanized army is immobile. I understand that in Australia there is in reserve sufficient petrol for about twelve weeks. The average weekly use of petrol in Australia is 5,500,000 gallons, and the capacity of the storage tanks is only 60,000,000 gallons. We recently were scared by events in Europe, and if they had developed into war and our supplies of petrol and oil from overseas had been cut off, not only our mechanized defence forces - Army, Navy, and Air Force - but also our civil transport would have been immobilized. The new Minister for Defence, who has taken on his task with a will and a determination to give of his .best in the interests of this country, would wish to see Australia made independent of foreign oil supplies, and I urge that he investigate what has been done in Great Britain. On previous occasions I have advocated hydrogenation and a low-temperature process for the extraction of oil from coal and shale in Australia by methods similar to those employed in Great Britain. I have cited sufficient statistics and adduced sufficient other evidence, including a statement in th’e House of Commons by the Minister for Mines, Mr. Cruickshank, to prove that it would not be an experiment. Great Britain has undertaken this work as a commercial proposition. The product, I admit, is certainly dearer than well oil would be if discovered in this country, but when we realize that to the purchase prices of imported oil must be added the high cost of the dole now being paid to unemployed coal-miners, we must agree that it would be more economical to produce oil from the minerals which I have mentioned, at the same time relieving the States of the burden of the dole, than to import our oil requirements.

Mr Fadden:

– The oil companies would charge us whatever they liked.

Mr JAMES:

– Yes, in the event of war the combine would be able to charge us any old price they liked. Furthermore, difficulty’ would be experienced in wartime in keeping up our supplies from abroad, because of the risks the oil-tankers would have to run in waters infested by enemy craft. I point out that in the Abyssinian crisis the companies which supplied Italy’s requirements were chary of running the gauntlet in any region where their tankers might be attacked. Yet, in that conflict the source of supplies was comparatively close to the port of destination. Furthermore, Italy was obliged to pay extraordinarily high prices for its oil supplies, and I can well imagine that we should’ be similarly penalized in the event of international conflict. We need to develop sources of supply of our own in order to meet the requirements of our transport services even in peace time.

Intimately associated with the problem of the defence preparation is that of relieving unemployment. A sum of £16,000,000 has been appropriated for defence purposes. How is that money to be expended? Will any of the unemployed be absorbed? The urgency for defending Newcastle, which i3 the centre of our great iron and steel industry, cannot be disregarded for much longer. It is an alarming state of affairs when we find that, owing to the lack of a suitable road, guns cannot be transported to Port Stephens from any point 8 or 10 miles inland. Port Stephens was once considered as a likely naval base, but it still remains unfortified. Combined military, naval, and air force manoeuvres were recently .carried out in this region, and I met a high military officer returning from those manoeuvres who agreed with me that it would be impossible to transport guns over the present road to Port Stephens. In such circumstances a hostile fleet would find it easy to enter that port, and destroy the important steelworks at Newcastle as well as practically all of the principal coal-mines in the vicinity. I sincerely hope that the new Minister for Defence will seriously consider these matters.

I condemn the Government for applying the gag in order to curtail the debate on the problem of unemployment, on the motion moved yesterday by the Deputy Leader of the Opposition (Mr. Forde). I am convinced that it has no sympathy with the unemployed. Yet honorable members opposite, particularly the honorable member for Barton (Mr. Lane), have the audacity to say that Labour members have no interest in the, unemployed. The Minister for Works (Mr. Thorby) said in that debate, that unemployment was not so serious on the coalfields as we had stated it to be. Unemployment figures based on returns supplied by the Registrar of Trade Unions are unreliable. A census which was recently taken of the unemployed in the northern district of New South Wales recently showed that in that district there were 10,000 youths, from 14 to 26 years of age, who had never done a day’s work. When I became a member of this Parliament the membership of the Northern Miners’ Federation was 14,000, whereas to-day it has decreased to 7,500, due entirely to unemployment. Some of the money which will be expended for defence purposes should be utilized in relieving unemployment on the coal-fields. These men have every right to be re-employed. Their position is tragic. Having worked beside them, I know them well, and can well understand their plight, which has been brought about through no fault of their own. I repeat that conditions on the coal-fields are appalling, many towns being stricken with destitution. Is it any wonder, therefore, that hundreds of these men harbour mutiny in their hearts? Is it any wonder that many of these men are opposed to the present order of society which condones want, destitution, misery, and despair? Prior to the 1934 elections, the Prime Minister and “ the then Postmaster-General (Senator A. J. McLachlan), who was Minister in charge of Development, visited the Newcastle district and definitely stated that something would be done to assist the unfortunate unemployed miners. The Prime Minister definitely promised in his policy speech in 1934 that the Government would proceed with the extraction of oil from coal. Instead of redeeming that promise he arranged for Lord McGowan, the chairman of directors of the AngloIran Oil Company, to report upon the whole project. Is it likely that that gentleman would report favorably upon an Australian project which, if success’ fully developed, would compete with th« company with which he is so closely associated? It was merely a means of shelving the whole subject ; the Prime Minister had no intention to give effect to his promise. Surely the Government does not expect single men to continue receiving a dole of 8s. a week and display the necessary patriotism in joining with the Government’s proposals of enlisting in the defence forces. I invite those honorable members who have said that there is no unemployment problem, to visit the coal-fields district where they will see for themselves the distressing conditions under which many persons are compelled to exist. During the whole time I have been a member of this House I have always stated the truth, and have never attempted to mislead any one. Contrast the position of the unfortunate coalminers with that of the wheatgrowers whom the members of the Country party represent. Whenever the wheat-growers are in difficulties the Government introduces legislation to provide a bounty on wheat or a tax on flour. Measures are frequently brought before this House to assist fruitgrowers and other producers. Only to-day several” bills were introduced to assist wheat-growers who, owing to drought conditions, are in difficulties. Have we ever heard of a wheat-grower who has lost his home or has been compelled to go on the dole? Miners have been compelled to live in tents in the bush, but it is seldom that farmers have to contend with such conditions. The Government should rehabilitate the coalmining industry, by producing oil from coal in the interests of defence. When the flour tax was imposed the unfortunate men receiving a dole of 8s. had to contribute an additional amount of tax. As they consume more bread than anything else the tax fell more heavily upon them than upon any other section. The poorer people must have a sufficiency of vitamins, which they get chiefly from bread. Other more fortunate sections, including members of this Parliament, having higher incomes, can get all the vitamins they require from more expensive foodstuffs. The percentage expended on bread by the parliamentary refreshment rooms is trifling in comparison with the percentage expended on bread in the average worker’s home, or ever the home of a man who is on the dle. Bread should be made available to workers on the basic wage at a more reasonable price. The poorer people, being large consumers of bread, make a far greater contribution than other sections to the incomes of wheat-farmers through the imposition of a flour tax, which is most unfair. I have mentioned this matter on other occasions in this House, but it is of no use to appeal to the Government for concessions on behalf of the poor, because it- takes no notice. The provision of Christmas cheer was urged a day or two ago by honorable members on this side, but the appeal brought no response from the Government. In fairness to the Treasurer (Mr. Casey) I must say that two years ago he made available to the Defence Department for clothing the sum of £3,000 for the distribution of surplus military clothing to the poor in my district. But what happened ? The Defence Department sent a lot of useless junk, which was immediately condemned by the health inspectors, and it should have been thrown into the incinerators. I do not know whether the Treasury was reimbursed the amount, but it certainly should have been returned, because the Defence Department did not give value for the money voted. I regret that we have never had an opportunity to discuss this important matter in an impartial way, and without becoming heated. If honorable members supporting the Government would accompany me to my home at the week-end - I travel approximately 700 miles each week in order to be at my home every Sunday - they would find in my yard a queue of workless people waiting to interview me and find out if I can do something for ‘ them. These people are not hoboes. They are decent living folk. During the last war the miners responded more generously than any other section of the community to the call to fight in the defence of their country. They sent two battalions of infantry and three battalions of sappers overseas. No one can question the loyalty of the miners, who to-day have to go cap in hand begging for the dole and left-off clothing. All that this Government can give them is worn-out military uniforms and boots. I have seen this stuff, so I speak from personal knowledge. The soles of some of the boots offered were worthless. The mayor of the town requested me to inspect this clothing, and asked me if I could expect the men to wear it. I said “ Certainly not.” I remember the occasion very well, because on returning to my home I had the misfortune to crash into a telegraph pole, and, as the result, had to spend five weeks in hospital. These men have a just claim to the consideration of the Government. If the Government wishes to display generosity towards one section of the community, let it be towards that section the members of which take their lives into their hands in the bowels of the earth in order to extract the coal supplies necessary to produce power for transport and industry. I have worked side by side with these men. I have witnessed many disasters, and have seen many of my mates slain. To-day they are subjected to want and poverty. They do not want the dole; they want work. But, because they represent only a small section of the community, and because their parliamentary representatives in th is chamber do not sit on the treasury bench, nothing is done for them. The treatment of these deserving people is vastly different from that meted out to another small section of the community represented by the Country party in this House which, because it holds the balance of power, is able to satisfy its most exorbitant demands.

Progress reported.

page 2097

ADJOURNMENT

New Guinea: Administrative Capital Site: Proposedroad: Oil Advisory Committee

Motion (by Mr. Menzies) proposed -

That the House do now adjourn.

Mr HARRISON:
Assistant Minister · Wentworth · UAP

– I crave the indulgence of the House to make a statement which, I think, will be of interest to honorable members generally. It has to do with the decision of the Government concerning the establishment of a new administrative capital site in New Guinea. As honorable members are aware, the Government has had this matter under consideration for a considerable time. It will be recollected that, following the disastrous volcanic eruption which occurred at Rabaul, the capital of the territory, in May, 1937, investigations were made by scientists as to the safety of the area with a view to determining whether it wouldbe wise to retain Rabaul as the chief administrative centre of New Guinea. The scientists reported, after visiting the area, that on account of the possibility of volcanic eruptions near Rabaul, reasonably early evacuation of the site as the main administrative centre must be seriously considered, and they expressed the opinion that the risks involved in the maintenance and extension of the town were incomparably greater than the immediate loss inescapable from early abandonment. Acting upon that advice, the Government decided, in November, 1937, that the administrative head-quarters should be removed from Rabaul to a site in the territory to be selected, and a committee was appointed to visit the territory and to advise as to the location to which the head-quarters should be transferred. The committee, after investigation, submitted a report in which the following recommendations were made : -

Lae (on the coast in the Morobe district on the mainland of New Guinea) be the site of the administrative head-quarters.
Salamaua (also on the coast about 20 miles in a direct line from Lae) be the port for the administrative head-quarters, and to bedeveloped as the chief port of the territory.
A roadway (estimated length, 45 miles) to be constructed to connect Lae and Salamaua.

The estimated expenditure involved in the committee’s proposals was as follows : -

Transfer of administrative head-quarters from Rabaul to Lae, including houses and other buildings at Lae, £248,000.

Lac-Salamaua road, £150,000.

Rabaul district services - provision for district staff to be in a safe place near Rabaul - £45,000.

Total, £443,000

The committee also mentioned the need for the following works in New Guinea, but as they are not directly concerned with the removal from Rabaul they were not taken into account by the committee in estimating the cost of the transfer of the administrative head-quarters: -

The development of Salamaua as the port of the administrative head-quarters and as the chief port of the territory (no estimate of cost given).
Road from the coast to the gold-fields (thecost of this work has since been estimated at £150,000).

The Government found these recommendations unacceptable, and, after a visit to the territory by the then Minister in charge of Territories (Mr. Hughes) it was decided that Salamaua should be both the chief port and the capital of the territory, and that a road should be constructed from Salamaua- to Wau. It was arranged that a loan of £150,000 should be raised by the Administrator of the territory and that the interest on the loan and the redemption thereof should be met by a toll to be levied on users of the road.

The Commonwealth Government agreed to guarantee the loan and the New Guinea Loan Guarantee Act 1938 was passed by Parliament in July last for the purpose. Since then, surveys of possible routes have been made and at present the engineers of the New Guinea Administration are checking the survey of a direct route of an estimated length of 47f miles between the two places.

Detailed examination of the Salamaua area by the Administrator and his technical officers raised doubts as to whether sufficient- land for the whole of the administrative head-quarters could be obtained there without very extensive works. The Government, therefore, decided to review the whole matter and, in the meantime, to give effect to the recommendation by the vulcanologist Dr. Stehn, for a system of warnings to be established at Rabaul in the form of a well-organized and equipped vulcanological observatory.

Mr HARRISON:
UAP

– In close proximity to the scene of the recent disturbance, near Rabaul proper.

Mr Curtin:

– I suppose that, it will be located on a site reasonably immune from subsequent disturbances.

Mr HARRISON:

– The site was selected after the most careful examination of the situation. As a matter of fact, investigations are now being made at regular intervals within the crater itself with such instruments as are available in order that precautionary measures may be taken by residents at the earliest possible moment.

Mr Curtin:

– I have no doubt that care will be taken to ensure that the observatory will not need to be reconstructed at a later date, and that it will be sufficiently far away for safety, yet sufficiently close to enable effective work to be done.

Mr HARRISON:

- Dr. Stehn expressed the opinion that the observatory should be capable of providing warnings of impending volcanic activity sufficiently in advance of an outbreak to enable the population to remove to places of safety. Steps are now being taken to establish such an observatory as soon as the scientific instruments and specialized staff can be obtained. Other safety measures recommended by the vulcanologist, such as roads of exit from the town, the establishment of a camp in a safe area, and a periodical inspection of the volcanic areas, have been in operation for some time.

Investigations that have been made clearly demonstrate that the chief administrative centre of the mandated territory of New Guinea should be located on the mainland of the island of New Guinea. The examinations which have so far been made have not disclosed a site that possesses all the desirable attributes of a location for the chief administrative centre. The possible sites are Salamaua, Wau, Lae, and an area near Madang, but none of these, according to the information at present available, is outstanding as a suitable site.

The question of a unified control for both Papua and the Mandated Territory of New Guinea was considered before civil administration was established for New Guinea in 1921, and on several occasions since then the possibility of establishing a combined administration has been investigated. Although the plan has many advantages, “there are also many difficulties associated with it, and until now it has not been found possible to formulate a workable scheme. The Government considers that the time has arrived for the matter to be further investigated, and, therefore, it proposes to make a thorough survey of the possibilities of bringing about an amalgamation of the administration of the two territories with one administrative centre for both. Pending completion of such investigation, it is not proposed that a separate site shall be selected for the administrative headquarters of New Guinea; but realizing that such a site must be on the mainland of New Guinea, either in the Territory of Papua or in the Territory of New Guinea, it is proposed that certain functions of government which must inevitably remain at a seaport shall he removed from Rabaul to the- mainland at the earliest possible date. It has, therefore, been decided that arrangements shall be made without delay to transfer from Rabaul to Salamaua the central- staffs of the Departments of Trade and Customs, Public Works and other activities of a like nature. The staffs of the other departments of the administration will remain at Rabaul until investigations have been made as to the possibility of a unified administration for both territories.

Taking advantage of the provisions of the territorial ordinance for the establishment of an oil advisory committee in each territory, I have appointed Dr. Arthur Wade and Dr. L. Keith Ward aa members of the Oil Advisory Committee constituted under the ordinances relating to prospecting and mining for petroleum in the Territories of Papua and New Guinea.

Mr CURTIN:
Fremantle

.- I should like the Assistant Minister (Mr. Harrison) to inform me later, whether any steps have been taken by the authorities to proceed with the construction of the road from Salamaua to Wau, or whether the work will be held up pending the result of an inquiry as to the most economical route.

I should also like to know whether any steps have been taken by the Assistant Minister or his department to carry out the suggestion of the honorable member for Kalgoorlie (Mr. Green) in regard to the calling of tenders for the leasing of a considerable area of forest country in New Guinea. The honorable member for Kalgoorlie suggested that the area should be subdivided so as to prevent the establishment of a monopoly.

Question resolved in the affirmative.

page 2099

PAPER

The following paper was presented : -

Northern Australia Survey Act - Aerial, Geological and Geophysical Survey of Northern Australia - Report of Committee, fur period ended 31st December, 1037.

Ordered to be printed.

House adjourned at 11.57 p.m.

page 2099

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Civil Aviation Department: Transfer to Canberra

Mr Hutchinson:

n asked the Minister for Civil Aviation, upon notice -

What will be the cost of transferring the Civil Aviation Department to Canberra t
How many officials will bc affected by the transfer?
What accommodation will have to be provided at Canberra, and at what cost?

Mr Thorby:

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

The exact cost is not yet available.
Approximately 80.
About 50 cottages for married members of the staff, and accommodation for about 30 single members of the staff. Office accommodation will cost about £15,000.

Shipbuilding Industry

Mr Watkins:
NEWCASTLE, NEW SOUTH WALES

s asked the Prime Minister, upon notice -

Has he seen the statement in the press that the United States of America proposes to build 50 merchant ships, and that the Government will make large contributions towards their construction cost?
In view of the importance of shipbuilding to Australia, will the Commonwealth Government give similar assistance to shipbuilding in this country?

Mr Lyons:
UAP

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

Yes.
The matter of assistance to the shipbuilding industry in Australia is at present receiving the consideration of the Government, and it is hoped that a decision thereon will shortly be reached.

Transcontinental Railway: Carriage of Goods

Mr Prowse:

e asked the Minister for the Interior, upon notice -

Are perishable goods being carried on the transcontinental railway from Port Pirie to Kalgoorlie on passenger trains at goods freight rates?
Is this practice continuing despite the provision of express goods trains additional to ordinary goods trains?
Is it a fact that the Commonwealth railway authorities have considered that the accelerated transcontinental passenger service cannot suitably cater for the carriage of goods traffic on passenger trains?
If the answer to paragraph 1 is in the affirmative, in the light of the effect of this action upon the Western Australian Government Railways and Western Australian producers, is it an unreasonable discrimination between States?
Will he ensure that goods traffic carries the rates of freight appropriate to passenger train transit when so conveyed?

Mr McEwen:
Minister for the Interior · INDI, VICTORIA · CP

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

The Commonwealth Railways Commissioner accepts a restricted quantity of perishable goods for conveyance on passenger trains at goods rates, and this practice has been in operation for a number of years.
The quantity of goodsso conveyed has been curtailed very considerably since the introduction of the fast passenger service, and the transport at present is confined practically to perishable fruit traffic.
Yes.
Perishables are given the fastest possible transit in the interests and at the request of Western Australian consumers. The question of unreasonable discrimination between the States does not arise as if desired it would apply in the transit of such consignments from Western Australia. The fruit-growers and the greengrocersof Kalgoorlie have recently expressed to the Commissioner their sincere appreciation of the facilities provided, and only this month the Kalgoorlie Municipal Council carried a resolution urging the Commissioner to accept an increased quantity of fruit for conveyance by passenger train.
The matter is one of management under the Commonwealth Railways Act 1917-1936, and the practice is consistent with the provisions of that act.

Wireless Broadcasting: Sessions in Foreign Languages.

Mr Forde:

e asked the PostmasterGeneral, upon notice -

Will he ascertain whether any broadcasting stations are giving daily sessions in foreign languages ?
If such sessions are given over the air, will he take steps to have them stopped?

Mr Archie Cameron:
CP

– The answerto the honorable member’s questions is as follows : - 1 and 2. When this matter was investigated recently it was ascertained that no such sessions were being held. If there had been any they would have been immediately stopped. Further inquiries will be made.

Defence : Anti-submarine Exercises - Imports of Materials.

Mr McCall:

l asked the Minister for Defence, uponnotice - 1.Is it the intention of the Government to ask the British Navy to lend Australia a modern submarine next year, when the antisubmarine school is established in Sydney?

If so, will the submarine become a permanent addition to the Royal Australian Navy?
Is it proposed to seek the co-operation of yachtsmen in all States in forming antisubmarine schools, or is such co-operation to be limited to Sydney?

Mr Street:
UAP

– The answers to the honorable members questions are as follows: -

It is hoped to arrange for a submarine to visit Australia next year, when the opportunity will be taken to carry out antisubmarine exercises with units of the Royal Australian Navy.
No.
The anti-submarine school is being established at Sydney and it is intended to raise the necessary force there.

Mr Street:
UAP

t. - On the 22nd November, the honorable member for Maribyrnong (Mr. Drakeford) asked the Minister for Defence the following question, upon notice : -

Will he furnish the House with the total value of imports of arms and munitions and all materials associated with the defence of Australia, excluding cruisers, for the years 1931-32 to 1937-38, showing each year separately?

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

Manufacture of Aeroplanes in Australia.

Mr Forde:

asked the Minister for Civil Aviation, upon notice -

Has the Government yet come to a decision on the proposal put forward by Mr. Stuart Doyle on behalf of an English company regarding the manufacture of aeroplanes in Australia?

Mr Thorby:

y. - No. The position is still as set out in the replies furnished to the honorable member on the 19th October and the 4th November.

New Guinea: Judicial System - Defence

Mr Green:

n asked the Minister administering External Territories, upon notice -

Is it a fact that for a considerable period of time there has been a general request from the white population of the Territory of New Guinea for an alteration of the Judiciary Ordinance to institute trial by jury?
Will he favorably consider the question of the introduction of trial by jury to the judicial system for the white population of the Territory, andso apply one of the cherished historical institutions generally applicable to British communities?

Mr Harrison:
UAP

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

Representations have been made at various times for the institution of a system of trial by jury in the Territory of New Guinea.
The matter will be further examined in the light of existing circumstances and requirements of the Territory.

Mr Green:

n asked the Minister administering External Territories, upon notice -

In view of the fact that the Territory of New Guineais held by the Commonwealth under mandate from the League of Nations, is it the duty of the Commonwealth Government to provide finance for a system of defence for the Territory to the extent that such is considered practicable and necessary?

Mr Harrison:
UAP

-The mandate under which the Territory is administered by the Commonwealth Government prohibits the military training of the natives otherwise than for purposes of internal police and local defence of the Territory and provides further that no military or naval bases shall be. established or fortifications erected in the Territory. The provision of finance to meet the cost of any measures for local defence of the Terri tory to the extent permitted by the mandate is a matter for arrangement between the mandatory power and the local administration.

Papua and New Guinea: Australian Assistance for Products

Mr Green:

n asked the Minister administering External Territories, upon notice -

What New Guinea products were admitted into Australia free of duty, and what wus the total quantity and value of each product admitted, for the last year for which figures are available?
What is the ordinary duty imposed on these products from abroad, in each case, and what is the total value of the. benefit received from this source by’ the planters of the New Guinea Territory, from the 1st January, 1927, to the 30th December last, and for each financial year in that period?
Willhe furnish similar information, for the same periods, in regard to Papua?

Mr Harrison:
UAP

– The information is being obtained.

National Insurance: Distributionof Information - Staff

Mr Badman:

n asked the Treasurer, upon notice -

Will he have the manuscript used by Mr. Brigden, Chairman of the National Insurance Commission, in his talks over the Australian Broadcasting Commission’s network on difficult points of national insurance, printed and published in booklet form for the use of members of Parliament and approved societies?

Mr Casey:
UAP

– In reply I wish to inform the honorable gentleman that all the points on questions of insurability, discussed by the Chairman of the National Insurance Commission in his talks over the broadcasting network, are contained in an additional part now about to be printed, of a booklet entitled A Guide to Insurability, the second edition of which, including the part on Special Classes of Employment, referred to, will be issued by the commission at an early date. Supplies of this booklet will be made available to approved societies, and I shall take steps to see that each member of Parliament obtains a copy also.

On Wednesday, the 23rd November, the honorable member for Maribyrnong (Mr. Drakeford) said that a fortnight previously, he had asked me for information regarding the number of appointments to the staff of the National Insurance Commission and the departments from which the appointees had been drawn.

In answer to a question asked by the honorable member for Hindmarsh (Mr. Makin) on the 16th November, I furnished information as to the number of persons engaged at that date with the National Insurance Branch and the departments from which they had been transferred. That information appears at page 1576 of Hansard.

Manufacture of Munitions: Housing for Employees.

Mr Street:
UAP

t. - On the 18th November the honorable member for Parramatta (Sir Frederick Stewart) asked the following question, without notice -

When plans are being formulated for the housing of plant and equipment at the Lithgow Small Arms Factory and other munitions factories will consideration also be given to the need to provide housing accommodation for the employees?

I am now in a position to inform the honorable member that during the war it was decided to build 100 houses at Lithgow for employees of the Small Arms Factory, but ever since then there has been great difficulty in getting purchasers and tenants. Since Hoskins iron works were removed to Port Kembla and some of the coal mines were closed, much residential property at Lithgow has been unsaleable. It is not considered necessary for the Commonwealth to provide further housing at Lithgow, nor is it considered necessary to make provision at other centres.

Defence: Standardization of Railway Gauges

Mr Drakeford:

d asked the Minister for Defence, upon notice -

In view of the fact that the Premiers’ Conference held in Adelaide in August. 1936, decided that a. further inquiry into the defence aspects of a uniform railway gauge should be made by a competent body, will hesay whether this inquiry or any departmental investigation has been made since that date?
If so, when was it held?
Did the inquiry disclose that concentration of troops for resisting invasion could be accomplished much more rapidly under uniform gauge conditions?
If the inquiry has not been made, when is it intended to make it?

Mr Street:
UAP

– A reply will be furnished to the honorable member as early as possible.

Manufacture of Munitions.

Mr Street:
UAP

t. - On the18th November, the honorable member for Dalley (Mr. Rosevear) asked the following question, without notice: -

Is it a fact that machinery similar to machinery that islyingidle at Lithgow has been installed in the annexes to private establishments for the manufacture of munitions? Is the Minister for Defence prepared to give on undertaking that in future no machinery will be installed in those annexes in duplication of idle machinery in the Government’s own munitions works, and that no orders for munitions will be given to private companies until the whole of the machinery at the Government’s factories is in use?

I am now in a position to inform the honorable member that some machines of the type installed at the Small Arms Factory are also being installed at armament annexes, but for different manufacturing purposes. A certain number are idle at present at the Small Arms Factory, but they are required as a reserve for rifle and machine gun manufacture in time of war.

A similar position exists in Victoria where machines with suitable tools and gaugesare installed at the Government ammunition and ordnance factories, and the. same class of machines is being installed at armament annexes. Each group has its particular function in the munitions production programme, and the programme could not be fulfilled if the machines in one locality were diverted to purposes outside those for which the accompanying tools and gauges have been designed.

Cite as: Australia, House of Representatives, Debates, 23 November 1938, viewed 22 October 2017, <http://historichansard.net/hofreps/1938/19381123_reps_15_158/>.

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House of Representatives23 November 1938

QUESTION

JEWISH REFUGEES

Mr FORDE:CAPRICORNIA, QUEENSLAND

Mr LYONS:Prime Minister · WILMOT, TASMANIA · UAP

QUESTION

TELEPHONE ACCOUNTS

Mr McCALL:MARTIN, NEW SOUTH WALES

Mr ARCHIE CAMERON:Postmaster-General · BARKER, SOUTH AUSTRALIA · CP

MUNICH PACT

Mr LYONS:Prime Minister · Wilmot · UAP

QUESTION

TRADE COMMISSIONERS IN INDIA AND CEYLON

Mr FAIRBAIRN:FLINDERS, VICTORIA

Sir EARLE PAGE:Minister for Commerce · COWPER, NEW SOUTH WALES · CP

QUESTION

POSTAL LINEMEN

Mr HOLLOWAY:MELBOURNE, VICTORIA

Mr ARCHIE CAMERON:CP

PRINTING COMMITTEE

QUESTION

LONDON FUNDS

Mr CLARK:DARLING, NEW SOUTH WALES

Mr CASEY:Treasurer · CORIO, VICTORIA · UAP

QUESTION

RECRUITING CAMPAIGN

Sir HENRY GULLETT:HENTY, VICTORIA

Mr STREET:Minister for Defence · CORANGAMITE, VICTORIA · UAP

QUESTION

INTERNATIONAL LABOUR CONFERENCE

Sir FREDERICK STEWART:PARRAMATTA, NEW SOUTH WALES

Mr LYONS:UAP

THE LATE LORD STANLEY

UNEMPLOYMENT

Formal Motion for Adjournment

Mr FORDE:Capricornia

Mr Lazzarini:

Mr FORDE:

Mr Holt:

Mr FORDE:

Mr SPEAKER:

Mr THORBY:Minister for Works · Calare

Mr Mahoney:

Mr THORBY:

Mr Ward:

Mr THORBY:

Mr Holt:

Mr THORBY:

Mr Forde:

Mr THORBY:

Mr Forde:

Mr THORBY:

Mr THORBY:

Mr Ward:

Mr SPEAKER:

Mr THORBY:

Mr Frost:

Mr THORBY:

Mr Rosevear:

Mr THORBY:

Mr Martens:

Mr THORBY:

Mr Mahoney:

Mr THORBY:

Mr Frost:

Mr THORBY:

Mr Clark:

Mr THORBY:

Mr SPEAKER:

INCOME TAX ASSESSMENT BILL 1938

Second Reading

Mr FORDE:Capricornia

Mr LAZZARINI:Werriwa

Mr NAIRN:Perth

Mr CASEY:Treasurer · Corio · UAP

Mr FADDEN:Darling Downs

Mr CASEY:Treasurer · Corio · UAP

Mr Fadden:

Mr CASEY:

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

House of Representatives
23 November 1938

Mr FORDE:
CAPRICORNIA, QUEENSLAND

Mr LYONS:
Prime Minister · WILMOT, TASMANIA · UAP

Mr McCALL:
MARTIN, NEW SOUTH WALES

Mr ARCHIE CAMERON:
Postmaster-General · BARKER, SOUTH AUSTRALIA · CP

Mr LYONS:
Prime Minister · Wilmot · UAP

Mr FAIRBAIRN:
FLINDERS, VICTORIA

Sir EARLE PAGE:
Minister for Commerce · COWPER, NEW SOUTH WALES · CP

Mr HOLLOWAY:
MELBOURNE, VICTORIA

Mr ARCHIE CAMERON:
CP

Mr CLARK:
DARLING, NEW SOUTH WALES

Mr CASEY:
Treasurer · CORIO, VICTORIA · UAP

Sir HENRY GULLETT:
HENTY, VICTORIA

Mr STREET:
Minister for Defence · CORANGAMITE, VICTORIA · UAP

Sir FREDERICK STEWART:
PARRAMATTA, NEW SOUTH WALES

Mr LYONS:
UAP

Mr FORDE:
Capricornia

Mr THORBY:
Minister for Works · Calare

Mr FORDE:
Capricornia

Mr LAZZARINI:
Werriwa

Mr NAIRN:
Perth

Mr CASEY:
Treasurer · Corio · UAP

Mr FADDEN:
Darling Downs

Mr CASEY:
Treasurer · Corio · UAP

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

Mr FORDE:
Capricornia

Mr BERNARD CORSER:
Wide Bay

Mr CLARK:
Darling

Mr CASEY:
Treasurer · Corio · UAP

Mr FADDEN:
Darling Downs

Mr CASEY:
Treasurer · Corio · UAP

Mr NAIRN:
Perth

Mr GREEN:
Kalgoorlie

Mr FADDEN:
Darling Downs

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

Mr MAHONEY:
Denison

Mr HUTCHINSON:
Deakin

Mr LAZZARINI:
Werriwa

Mr GREGORY:
Swan