Senate
17 June 1926

10^th Parliament · 1^st Session

PAPERS
QUESTION
- NORTHERN TERRITORY
REFERENDUM (CONSTITUTION ALTERATION) BILL
CONSTITUTION ALTERATION (ESSENTIAL SERVICES) BILL
CONSTITUTION ALTERATION (INDUSTRY AND COMMERCE) BILL
- Second Reading
ADJOURNMENT
- Extra Sitting Day

The President (Senator the Hon. T. Givens) took the chair at 3 p.m., and read prayers.

page 3161

PAPERS

The following papers were presented : -

Conference of the Union for the Protection of Industrial Property held at the Hague, October-November, 1925 - Report by LieutenantColonel Chas. V. Watson, D.S.O., Commissioner of Patents, representing the Commonwealth Government.

Northern Territory - Ordinance. No. 14 of 1926 - Police and Police Offences.

page 3161

QUESTION

NORTHERN TERRITORY

Railway Gauge

Senator LYNCH:
WESTERN AUSTRALIA

asked the Leader of the Government in the Senate, upon notice -

Whether, in view of the probable establishment of an air-ship service from Great Britain to Australia, with Darwin as the first point of contact, the Government considers a narrowgauge railway a suitable type of connexion with such a service?
If not, will the Government review its decision adopting the 3-ft. 6-in. gauge in the ease of the extensions about to be made to Daly Waters and Alice Springs?

Senator PEARCE:
Minister of Home and Territories · WESTERN AUSTRALIA · NAT

-If and when the establishment of such an air-ship service is decided upon, consideration will be given to the steps necessary to ensure efficient connexion between the point of arrival in Australia and the other portions of the continent.

page 3161

REFERENDUM (CONSTITUTION ALTERATION) BILL

Bill returned from the House of Representatives, with amendments.

page 3161

CONSTITUTION ALTERATION (ESSENTIAL SERVICES) BILL

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

– I move -

That the bill be now read a second time.

The bill provides for the insertion in section 51 of the Constitution of a new paragraph (v) a. - “Protecting the interests of the public in case of actual or probable interruption of any essential service.” It is a necessary power for the Commonwealth to possess, because neither the Commonwealth Parliament nor the Government has constitutional power to take any action when the economic life of the country is threatened by an actual or probable interruption of essential services. Profiting by the experience of other countries, and realizing that the Commonwealth Government has not the power effectively to intervene, even should the very existence of the people be endangered, it must be admitted that there is necessity for an amendment of the Constitution in this direction. Nationally, the Commonwealth must be empowered to ensure the noninterruption of essential services, and that is the aim of this proposal. Without such power no Government can be deemed to be national. Essential services are services upon which industries are dependent for the continuance of their operations without interruption. There can be no doubt as to the meaning of the term. It is conceivable that, internally, a position might arise as disastrous as external war ; yet the Commonwealth authority has now no power to intervene for the protection of the nation. This bill seeks power to deal with abnormal circumstances. Under the Crimes Act of 1926, the GovernorGeneral is empowered, where he is of opinion that there exists in Australia a serious industrial disturbance threatening interstate trade or commerce, to issue a proclamation to that effect. During the currency of the proclamation, participation in, inciting to or aiding a lockout or strike in relation to employment connected with such trade or commerce, or with the provision of a public service by the Commonwealth, are made offences. These provisions, however, only exercise a deterrent effect in advance of the offences, and only enable the Government to act in relation to the offences by prosecuting and obtaining the infliction of penalties. In the case of an upheaval such as that just ended in England, the Commonwealth would have no power to step in to prevent loss and suffering to the public. If essential services - food supply, transport, fuel, &c. - were interrupted, the Commonwealth could do nothing but prosecute in cases where a law, such as that I have already mentioned, had been broken. It is true that a State could assume general control of its own territory and of all persons in it. The State could commandeer supplies, and arrange for rationing the public, but in the case of an extensive strike affecting, say, coal, it would be quite impossible for South Australia, for instance,, to do anything to assist the position. Thus, some States might suffer most severely owing to the withholding of essential supplies from other. States. The Commonwealth has no general power to preserve good order in the community. Section 119 of the Constitution provides that the Commonwealth shall, upon the request of a State, protect it against domestic violence, but this power depends upon the request of the State. This section is based upon the view that domestic violence is a matter which concerns only the State within whose borders it takes place. That is not a true view. In so far as it is merely violence, it may be a true view, but in so far as it leads to an interruption of essential services to the public of other States, it is unsound in principle. The object of this amendment, therefore, is to confer upon the Commonwealth greater power than that of imposing; penalties for breaches of the law - to enable the Commonwealth to intervene, if necessary, for the protection of the interests of the public. The power to protect the community in the case provided for should exist in an effective form. It does not exist in an effective form at present, and it cannot be made so to exist unless it is conferred upon the Commonwealth ; and unless the people approve of this power being vested in the Commonwealth,, the Constitution will leave the Commonwealth Parliament devoid of a power that should be constitutionally conferred upon it.. This power is necessary to enable it to exercise what is the very essence, the raison d’etre, of every national Government ; that is to say, the power to effectively act or intervene in cases of serious disturbances or crises disrupting interstate trade and commerce or threatening the very economic existence of the whole community.

I now desire to refer to one or two occurrences to show that this is not in any sense panic legislation or a bill for an amendment of the Constitution that is not warranted by facts that are within the recent knowledge of the public- of Australia.. It is assumed by those, who oppose the extension of power that a

Second Reading

Debate resumed from 16th June, vide page 3119), on motion by Senator Pearce -

That the bill be now read a second time.

Senator NEEDHAM:
Western Australia

– I appreciate the importance of this bill, and also of the Constitution Alteration (Essential Services) Bill, the second reading of which the Minister for Home and Territories (Senator Pearce) has just moved. It is to be regretted that measures ofsuch vital import should be dealt with in the hasty manner the Government proposes, thus preventing the Parliament and the people giving them the consideration they deserve. During the three years the Bruce-Page Government has been in office an amendment of the Constitution in the manner proposedhas never before been suggested. Whilst the Minister was speaking on another bill under which it is proposed to amend the Constitution in certain respects an honorable senator opposite interjected that there had just been an appeal toa great jury. I presume the honorable senator was referring to the general election. During the campaign I do not think one honorable senator opposite mentioned the subject of amending the Constitution.

Senator Duncan:

– We all did.

Senator McLachlan:

– I did.

Senator Drake-Brockman:

– So did I.

Senator NEEDHAM:

– It was not in issue at the elections.

Senatorcox. - It was.

Senator Findley:

– There was no issue; it was all tissue.

Senator NEEDHAM:

– The amendment of the Constitution was not in issue at the recent general election. The deportation of two Australian citizens was the principal topic discussed on all the political platforms in Australia. That was the cry of all those who are now supporting the Government. During the 1922 elections reference was made by re sponsible leaders to an amendment of the Constitution. The then Prime Minister, in his policy speech, stated -

Time has shown that in certain respects it (the Constitution) is unsuited to the everexpanding needs of this young but rapidly progressing country. . . . The need for amendment of the Constitution has long been recognized. . . The Government being of the opinion that some amendments of the Constitution are necessary, and that those recommended by a convention are much more likely to be approved by the people than any put before them by Parliament, will during the first session of the new Parliament legislate for the election of a constitutional convention.

That statement was made by the right honorable member for North Sydney (Mr. Hughes) when, as Prime Minister, he appealed to the electors for a renewal of their confidence in his Government. He made a definite promise then that in the first session of the succeeding Parliament legislation would be introduced to appoint a Federal convention to consider these matters.

Senator Drake-Brockman:

– But he was not returned with a majority.

Senator NEEDHAM:

– Theproposal of the right honorable gentleman was to appoint a convention to review the Constitution with a view to determining what defects, if any, existed, so far as the powers of the Federal Parliament were concerned. Three years have elapsed, yet that promise has not been fulfilled. It is true that a bill was introduced, but, despite the assurance given, nothing more was done in the direction indicated. The present Treasurer (Dr. Earle Page), who is the leader of one wing of the composite Government which is to-day controlling the destinies of Australia, in his policy speech in 1922. said: -

The party offers a definite plan of constitutional reform. Its plan of constitutional reform will obtain economy and efficiency in administration. To bring this about we advocate the early holding of a Federal convention to consider the revising of the Constitution.

Dr. Page’s definite plan has, however, not yet materialized. Senator DrakeBrockman interjected just now that Mr. Hughes, after having made the promise to which I referred, was not returned with a majority. That may be so; but Dr. Page is still a member of a Government which has had a majority in both Houses since 1922. While I admit the necessity for an amendment of the

Constitution in the direction suggested by this bill. I contend that this legislation is being rushed through too hurriedly. I repeat that sufficient time to consider the effect of the Government’s proposals is not given to members of this Parliament; and, what is more important, the people of Australia, who will have to decide the matter, will not have sufficient time to understand them.

Senator McLachlan:

If … ‘t is done, then ‘t were well

It were done quickly.

That, I think, is a reply to the remarks about haste that were made by Senator Needham. These proposals have been before the public for a great many years, and I do not think it is desirable to delay any longer their submission to the electors. They should be put fairly and squarely before them, and thepeople should be invited now to give their ultimatum, “ Yes “ or “No.” I was hoping that other questions would be remitted to the people at the same time. It is well known that I am an advocate of the creation of new States when the time is ripe and opportunity offers, and I had hoped that that matter would be included among the proposals upon which the people would be asked to vote. However, I am looking forward to the constitutional session at Canberra next year, when that subject and others of importance will, I trust, be considered. No doubt, proper attention will then be given to the whole question of the amendment of the Constitution, and it will be necessary to hold another referendum. I believe that the framers of the Constitution expected that frequent alterations would be necessary, and so they inserted the necessary machinery for that purpose. I admit, with Senator Needham, that it is difficult to get the people to consent to these constitutional amendments, but still I think it is our duty to submit them to the electors. It has been suggested that the members of this chamber, being the custodians of State rights, should be careful how they vote on the bill. To me it does not seem that anything is being taken away from the States by these proposed amendments, which seek only an extension or amplification of powers already vested in the Commonwealth. The bill does not propose to interfere with the sovereignty of the States. Therefore, I shall have no hesitation in supporting it. It has been urged, also, that these proposals are in the direction of unification. Being myself a “ new-stater,” unification is anathema to me. I should be the last to support the measure if I thought its acceptance by the people would have any tendency in the direction of unification, which embodies all the dangers of centralization, and certainly would not be counselled by me for a moment. Coming to the bill itself, clause 2 provides for the creation, regulation, control, and dissolution of corporations. As a business mau I welcome this, because it will make a uniform company law possible. I am sure that the framers of the Constitution intended that the Commonwealth should legislate in respect of companies, bankruptcy, and banking : but Parliament, according to the High Court, has not the power under the Constitution to pass a companies law. I interjected the other day when the Minister (Senator Pearce) was moving the second reading of the bill, that certain of the decisions of the High Court were difficult to follow, and that if some of the cases were submitted to the High Court as at present constituted, possibly entirely different decisions might be given. However, I believe that the Government is acting wisely, in putting the matter beyond dispute by asking the people for full power to legislate with respect to certain matters, including a uniform companies law. Some time ago it was suggested by a mimber of the business people that, in order to get the benefit of a uniform companies law, the States should surrender their existing rights. I was one of a deputation that, waited, on the Prime Minister (Mr. Brace) last year to ask him if he would approach the States in this matter. The right honorable gentleman gave the deputation a sympathetic hearing, but he very properly pointed out how difficult it would be to get the six State Governments to surrender their rights in respect of company law, or to agree to a uniform law being passed by each Parliament, for that is really what would have to be done.

Senator McLachlan:

– A draft bill was prepared, but no two States would agree to it.

Senator THOMPSON:

– I could easily imagine that would happen, and for that reason I welcome this bill, which will make it possible for the Commonwealth to legislate in the direction indicated. I agree, also, with its other provisions to increase the powers of the Commonwealth in conciliation and arbitration matters. In recent years there has been much overlapping, so action in this direction is absolutely essential. Many years ago, in Queensland, we were working under a carters’ award made by the Federal Arbitration Court in Melbourne. It was obtained at very great expense to us, because we had to send our delegates all the way from Queensland. After it had been in operation for some time, an award more favorable to the men was made by the Queensland court, with the result that they at once took advantage of it. “We all know also that Queensland shearers, under the State award-, are in a much better position than are shearers in the other States under the Federal award. Naturally, the shearers in Queensland took advantage of the State award. I think the framers of the Constitution intended that the Federal Arbitration Court should deal only with the shipping industry. It has been suggested that they had in mind the shearing industry also, but shearing is really a State industry, in much the same position as other industrial occupations, whereas shipping unquestionably is interstate in character. However, to-day practically every industry may appear before the Commonwealth court, and if they are all brought under Federal jurisdiction it should be possible- to do away with much overlapping in awards. Since our experience of the wages board system in Queensland was not at all satisfactory, I was surprised to learn that it was functioning so well in Victoria. We had three representatives each of the employers and employees on a board, but our trouble was to get. a satisfactory chairman. We endeavoured to secure an impartial .man, but invariably he was regarded as partial by the side which he did not favour. The system proved so unsatisfactory that we welcomed the establishment by the Liberal party of the industrial court. Its first president, under a. subsequent Labour Government, was Judge McCawley. At the outset, his decisions were not satisfactory to employers, but they were viewed with favour by employees1. Later, I am glad to say, his decisions were acceptable to both parties, but unfortunately he died, and we lost a very promising industrial judge. At present we have a tribunal known as the Board of Trade which, from the employers’ standpoint, is unsatisfactory, because it is composed entirely of nominees of the Labour party. The president was SolicitorGeneral in a Labour Government

– When the Minister (Senator Pearce) replies, I should like him to clear up that point, which is an important one. At present I am somewhat in doubt as to the practicability of giving effect to it. It is right that the Government should have power to control trusts and combines which are not carrying on their undertakings in a proper manner. If it is found that they are exploiting the public - that is the term so frequently used - they must, in common with others, expect their operations to come under review. During the many years I have been a member of merchants’ associations and employers’ federations, I have never known nor supported any action detrimental to the public interest.

The operations of trade unions, which were frequently referred to during the election campaign, should also be under supervision. I do not suggest that they should be under the control of the Government; they will be controlled, as at present, from within by their own members. The Government is seeking power to exercise only healthy supervision over their rules and funds, which, I think, will be in the interests of the trade unionists themselves. Employers’ associations must also expect to be under supervision, but so long as they are not acting to the detriment of the public, both will, of course, be allowed to carry on as at present. It is only a matter of supervision, such as has been most beneficial in connexion with friendly societies, and which in the direction proposed should have a similarly good effect. I trust the bill will pass the Senate, and that when the proposals are submitted to the- electors they will give an unmistakeable vote in their favour.

Senator LYNCH:
Western Australia

Sena tor LYNCH. - I was referring to the necessity for arbitration awards being regulated by other considerations than State boundaries. It would be wrong to make the same award for persons engaged in the business of slaughtering animals in Wyndham, in Western Australia, and Kensington, in Victoria. I have referred to the danger of further delay. There is too much at stake. Arbitration as a means of settling disputes has come up for judgment. If, as a system, it fails to receive the support of public opinion, as it is in danger of doing today, it must be sacrificed, and we must fall back upon the old expedient to which I have referred. It is interesting to note that the great bulk of employers are supporting these proposals. I have received a communication from the Chamber of Manufacturers, in Perth, in support of them. I have here, also, a publication entitled Liberty and Progress, which contains the following : -

To make the Commonwealth Parliament the ultimate source of industrial power, and at the same time to provide that the exercise of the power shall be intrusted to an independent non-political tribunal as embodied in the Commerce and Industry Referendum, is the shrewdest and most practicable proposal that has yet been made for the cure of our industrial ills.

– There is a minority in trade unionism which, to-day, is opposed to arbitration, and, if my remarks on this occasion will bring them back to a saner mind and a realization of the valuable work done in the past by the leaders of Labour, good will be done. If I refer to actions of the past, I do so in order that good may come of it. Some time ago the local correspondent of the London Times sent the following to his newspaper : - :

There is much discontent with the arbitration system, which official Labour roundly declares to be a failure.

Mr. Grayndler, secretary of the Australian Workers’ “Union, was asked for his opinion on this statement, and he said -

The statement is quite contrary to facts. There has not been such a declaration from official Labour. By far the majority of unions in Australia favour arbitration; but a strong minority is against it. If the defects in the act were removed, or the powers of the court enlarged, arbitration would prove a great gain to the nation as a whole.

I cite Mr. Grayndler’s statement for the edification of those men who, although in the same political camp, are, apparently, rushing to the conclusion that it would be wrong to accept the Government’s present proposals. I am pleased to be in possession of that opinion given by a leading member of the Labour party, and the active mouthpiece of a body of workers numbering 150,000. To their everlasting credit be it said that the members of the Australian Workers Union have been a buttress and pillar to the work of arbitration in this country for many years. I contrast Mr. Grayndler’s attitude with that of others who have done their level best to bring arbitration into ridicule, because it shows that we have in this country a solid backing of public opinion in favour of sustaining arbitration amid opposing shades of public opinion. This leads me to the further remark that, unless a change is made and arbitration is taken out of the sea of turmoil in which it is at pre sent, that body of public opinion will be subject to erosion, and may. dwindle until arbitration reaches that state of contempt when the people will not have it, and will strike our arbitration laws off the statute-book. It is, therefore, to the interests of the workers of this country to see that the proposed amendment of the Constitution is accepted by a very substantial majority. Notwithstanding the efforts of some of those false friends to whom I have referred, to destroy it, arbitration has done a mighty lot of good in many directions. One can enumerate the good it has done in a negative way to show its public beneficence. A great deal lies to its credit in the work it has actually done to prevent strikes, but we cannot enumerate those occasions. They remain like the unlisted legion. We do not know actually what they are, but we do know that because of the existence of the Arbitration Court men have been prevented from coming into unpleasant conflict. Mr. Justice Higgins has placed on record the fact that from 1914 to 1917 there were 1,647 strikes in Australia, but there were only three of these that could possibly be entertained by the Commonwealth Arbitration Court, over which he presided. The fact that 1,647 strikes occurred in Australia within three years is not a very good commentary on the State industrial tribunals as compared with the Federal court, and the figures are all in favour of the application of the Federal system limited, harassed, and hamstrung as it was during those years.

Senator Sir Henry Barwell:

– Those figures cannot be correct, because the Federal Arbitration Court covers the whole sphere.

Senator Drake-Brockman:

– During the whole existence of the Federal Arbitration Court there have been only seven interstate strikes.

Senator LYNCH:

– Mr. Justice Higgins also tells us that in five years, from 1914 to 1919, there were only three disputes which fell within the jurisdiction of the Federal court, and were unaccompanied by strikes.

Senator McLachlan:

– There was a much larger field for the State courts to cover.

Senator LYNCH:

– But even giving that in, there is a wide disparity between three disputes and 1,644.

Senator Drake-Brockman:

– There were 350,000 unionists registered under the Federal court, and 500,000 registered under State courts.

Senator LYNCH:

– I come now to point out how the Arbitration Court has suffered rather than gained from interference by governments and parliaments. Without that interference, it would not have experienced so much trouble. On occasions the Federal Government, with the cognizance of the Federal Parliament, has stepped out of its recognized sphere to take part in another field of activity not properly belonging to it. In my opinion, the Government has a recognized ambit in which to move, and if it moves out of it into a judicial sphere it certainly abandons a traditional rule, and is guilty of an act that public opinion will never endorse. I recognize that it was very sorely pressed to do so on one occasion to which I refer, but I shall quote one example of the harm done by Government interference with the functions of the court. It brought about many strikes that would not have occurred but for that interference. In 1919, when the war was over, and there was no excuse on the ground of the exigencies of war to prompt the Government for what it did, it interfered during the progress of a seamen’s strike, and a Minister assumed the role of arbitrator. I protested against it at the time, but was unsuccessful in getting sufficient backing in my protest against the action of the Government. The seamen, who were working under an award of the Arbitration Court, violated that award by going on strike and holding up shipping. Faced with the necessity of getting them back to work, the Government set up a special tribunal to settle the dispute, and that tribunal was a Minister who fixed such rates and conditions as upset the whole scheme of rates and conditions throughout the maritime trade, and created no end of trouble and disruption in that trade. For example, firemen’s wages were raised to £16 a month, while the engineers working alongside, who have to go through a special training in order to follow their avocation, were only earning £15 10s. a month. The natural result was that, although the seamen’s strike was settled, the action of the Government of the day led to unrest and dissatisfaction in other branches of the maritime trade.

First of all, the engineers went out on strike, and the ships were once more held up. The engineers rightly discerning that the seamen had gained by their unlawful action, followed their example. It is said that if you take one foolish action, you must follow it up by a second. The moral is not to take the first foolish step. It was the first foolish step the Government took that produced the inequality between the two branches of the maritime trade. Of course, a second tribunal had then to be created to raise the wages of the engineers to £19 10s. a month, and when that was done, as the result of the Government’s unwarranted interference in the maritime trade, it is easy to imagine what effect it had among the multifarious trades throughout the country. Others immediately said that they must be treated in a corresponding way, and the result was that the Arbitration Court was brought into disfavour.

– A very wise suggestion, too.

SenatorFINDLEY. - As a member of the Labour party, and as one who was associated with the Labour administration which a few years ago submitted to a referendum of the people certain amendments of the Constitution, I, with others, expressed a similar view. “We expressed the hope that the proposals then submitted to the people would be treated on nonparty lines. Although there were members of the then Opposition who agreed that the Labour proposals were necessary for the peace, order and good government of Australia, some of them were afterwards found to be among our strongest opponents. They said that they would not trust a Labour government with such powers, although an absolute guarantee had been given by the Labour Government in the pamphlet issued for and against the proposed amendments. What was the guarantee? In that pamphlet the Labour party said, ‘ ‘ An amendment of the Constitution is a great national question. To whom will this amendment give power ? To the people. How will these new powers be exercised? . As the people decide. We then went on to say, ‘ It may be asked what guarantee have we that the Labour party will not use their powers for purely party purposes.” Our answer was, “ They have the best guarantee in the world. The Labour party before using any new power will pass an initiative and referendum bill which gives the electors power to. veto any measure of which they do not approve. That is the complete answer to criticisms.” We added-

The amendments will give the people more power to protect themselves, and the Initiative and Referendum Bill willplace the control of these new powers - and all others - absolutely in their hands. They will thus beable to say, “ Thus far and no farther “ whenever they think fit.

– Whatever opinions Senator Drake-Brockman might express on this subject I feel sure that I could find other lawyers who would be absolutely at variance with them. These proposals of this Government are altogether different from those which the Labour party put forward a few years ago. We proposed to delete these words from section 51 of the Constitution -

Conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State.

In substitution we proposed to insert-

Industrial matters, including - (a) labour; (b) employment and unemployment; (c) the terms andconditions of labour and employment in any trade,industry, occupation, or calling; (d) the rights and obligations of employers and employees; (e) strikes and lock-outs; (f) the maintenance of industrial peace; and

the settlement of industrial disputes.

– Let us deal with this question apart from individuals. The assumption is that the funds of the organizations are not put to legitimate purposes, and the Government proposes to have a Government audit of them. Senator Pearce was associated with trade unionism for many years. I ask him if there was any doubt about the fitness or qualification of the men appointed by the organization with which he was associated to audit its funds.

Senator Pearce:

Senator Reid:

– Nevertheless, it was a most important factor in the abolition of sweating.

Senator Sir HENRY BARWELL.I do not think it was, because whilst sweating certainly has disappeared in Australia, it has disappeared also from other parts of the world. If the honorable senator will read the history of the subject, he will find that sweating disappeared simultaneously in many countries, and for the same reason that it. disappeared in Australia. That is admitted by all writers on the subject, and I did not expect to have it challenged in this chamber. Let us now examine the second purpose for which compulsory arbitration was adopted, namely, the abolition of strikes. We were told, prior to the introduction of the system, that the right to strike was the natural weapon of the employee; that he could secure an improvement of his conditions of labour by no other course. Accordingly machinery was advised for the settlement of industrial disputes, and for the improvement of the relationships between employer and employee. Australia and New Zealand decided to provide that machinery, and the hope was expressed that a new industrial era was about to dawn. But what has been the experience? Most honorable senators know that Australia has earned for herself the unenviable reputation of being the home of strikes.

Senator McHugh:

– Nonsense!

Senator Sir HENRY BARWELL:

– The honorable senator must know that per head of population there are more strikes in Australia than in any other part of the world, and that, as a fact, Australia is referred to as the home of strikes.

SenatorDrake-Brockman. - No.

– Prior to the introduction of compulsory arbitration, numerous unsuccessful attempts were made to convene round-table conferences.

Senator Sir HENRY BARWELL.Conditions were totally different in those days. The unions were not as strongly organized as they are to-day. They now have tremendous power, and can demand round-table conferences. That was practically impossible in the days of which the honorable senator is speaking. How do they manage in Canada, where they do not have anything approaching the number of industrial disputes that we have here? The Canadian system has been in operation since 1907, with the most satisfactory results. Prominent Canadian citizens, including some who have held ministerial positions in that great dominion, have told me that the system iu operation in Canada is most successful. It cannot be denied that strikes in Australia are numerous, and it cannot successfully be contended that the number in Australia is not greater iu proportion to the population than in other countries which have not an arbitration system. Prior to the introduction of arbitration the number of industrial disputes was comparatively small. We are never free from industrial upheavals” in Australia, although under both Commonwealth and State legislation it is illegal to strike, and heavy penalties are provided for those who break the law. I have said sufficient, I think, to show that the system of compulsory arbitration has not accomplished the second purpose for which it was brought into existence. Every one will admit that it has not. What was the third purpose? The promotion of a satisfactory industrial relationship between employer and employee. Has that been established? Instead of improving the industrial relationship between employer and employee, it has, as honorable senators know, undoubtedly engendered’ the utmost enmity, distrust and bitterness between these two sections of the community, whose co-operation, good-will, and unity of purpose are so essential to the true industrial progress of the Commonwealth. We are not making the progress we should, largely because development is retarded by industrial strife in a country which has all this machinery at its disposal for the alleged prevention of industrial strife. Something must be done. Every one admits that an attempt must be made to improve the position so that industry and commerce may proceed smoothly. I believe the Government have made an honest effort to do what it considers right in achieving this highly desirable objective. In my opinion, however, success will never be achieved by endeavouring to improve our compulsory arbitration system. The Arbitration Court has utterly failed to accomplish any of the three purposes for which it was established. The position is infinitely worse than that. It has not only failed to accomplish the purposes for which it was established, but has done positive harm. To my personal knowledge it has been responsible for preventing outside capital being invested in Australia. That information I have obtained first hand. I was in Great Britain in 1922, and one of the functions arranged for my benefit was attended by many prominent business men who either had or had been anxious to have interests in Australia. When my health was proposed, the chairman explained to me that there were many present who were anxious to know something concerning Australia, and suggested that instead of replying to the toast of my health in the ordinary way I should answer .questions. I thought it was a splendid idea, and said that even if I occupied an hour or so in replying in the customary way, it was quite possible that I should not touch upon any of the subjects upon which those present desired information. Those men, all of whom whom had large business interests, were anxious to know the position in regard to the control of industry, and particularly in reference to our compulsory arbitration system. I explained the system to them. They showered questions upon me for over two hours. I gathered that there were many men in Great

Britain who would launch out in productive enterprises in Australia by establishing branches of their businesses, or by opening new businesses, if they could only be assured of being able to conduct the undertakings on what they considered sound, economic lines. - From what they had heard and read of the position in Australia, however, they had gathered that if they entered into business here, control would be practically taken out of their hands. Some of them had sent representatives to Australia to make inquiries, and they, refrained from opening up businesses here because of the restrictions which are incidential to our compulsory arbitration system. When speaking in the South Australian Parliament on an arbitration bill in 1922, I gave the names of some of these firms; they can be obtained from the South Australian Hansard.

Senator McHugh:

– If they will not invest capital in the Commonwealth, why do they send so many migrants to Australia ?

Senator Sir HENRY BARWELL:

– I shall deal with that phase of the question later, and show its connexion with our arbitration system.

Senator Duncan:

Senator Sir HENRY BARWELL:

– It is not, as I shall show from reports that have been made by commissioners appointed by the British Government to inquire into this question. They have reported along exactly the same lines as I have been speaking.

Senator McHugh:

Senator Sir HENRY BARWELL.Yes; but they would not. Under the present system they could not be forced to do so.

Senator Drake-Brockman:

– They pay it in America, under a voluntary system.

Senator Sir HENRY BARWELL:

– In what part of America?

Senator Elliott:

– If we pass this bill, we can compel them to do so.

Senator Sir HENRY BARWELL:

– As things are now, the awards of the court cannot be enforced; and I doubt whether it is possible to devise a means of enforcing them. The rest of the world is undoubtedly benefiting by our experience. No other country is prepared to adopt our system. The most powerful capitalistic organizations, as well as the strongest labour unions in Europe and America have strenuously opposed compulsory arbitration. This system has been inquired into in both Great Britain and the United States of America. Let me quote from the report of the committee on the relations between employers and employees to the British Ministry of Reconstruction in 1918 -

We are opposed to any system of compulsory arbitration; thereis no reason to believe that such a system is generally desired by employers and employed, and, in the absence of such general acceptance, it is obvious that its imposition would lead to unrest. The experience of compulsory arbitration during the war has shown that it is not a successful method ofavoiding strikes, andin normal times it would undoubtedly prove even less successful. Disputes can only be avoided by agreement between employers and workers, and by giving to the latter the greater measure of interest in the industry advocated in our former reports; but agreement may naturally include the decision of both parties to refer any specifiedmatter or matters to arbitration, whether this decision is reached before or after a dispute arises.

Of course that is voluntary and not compulsory arbitration. Thus we see that the opinion I have put forward is backed up by opinions in other parts of the world, and particularly by the committee appointed by the British Government to consider the relations between employers and employees after the war. Commissions which inquired into industrial troubles in America reported on exactly the same lines. Mr. W. J. Bryan said -

Compulsory arbitration is as impossible as it is undesirable.

On the anthracite coal dispute, another commission reported as follows: -

There are some who have urged the commission to recommend the adoption of compulsory arbitration. But we cannot see our way to recommend any such drastic measure. We do not believe that in the United States sucha system would meet with general approval or with success.

I have quite a number of reports here on the same lines. They are to be seen in a very excellent work called Compulsory Arbitration of Industrial Disputes, by Beman. They show that wherever inquiries were made in Great Britain or in the United States of America with a view to advising the respective Governments of the advisability of adopting compulsory arbitration, the advice invariably given was against it. And the reasons given for coining to that conclusion are based on causes which are identical with those that I have said are responsible for its want of success here. Senator Pearce really believes that the system of compulsory arbitration can be made a success, but I do not agree with him, and I say so after a good deal of experience. I know that some of the greatest leaders in the industrial world of Australia agree with me. I have made many speeches on the subject in South Australia, and have received many communications from captains of industry, masters of the biggest concerns in Australia, informing me that they were in entire agreement with them. I. do not suppose that any political leader in Australia-, except perhaps Mr. Hughes, has done more than I have to try to make the system of compulsory arbitration work effectively.

Senator Reid:

– The honorable senator i3 very pessimistic in regard to the result of his work.

Senator Sir HENRY BARWELL:

– I admit it. When 1 was Premier and AttorneyGeneral in South Australia in- 1920, I framed an industrial code which was acclaimed in Australia and America as the most complete ever framed here; but it is not a success, and I am compelled to admit that, in my opinion, the system is .attended, with difficulties that are insuperable.

Senator Andrew:

– Now give us the remedy.

Senator Sir HENRY BARWELL:

– I have already suggested round-table conferences, but my time is limited and J. cannot enlarge on that subject at the present time. It is perfectly true, as stated by the Minister yesterday, that many of our troubles are caused by the overlapping of Federal and State arbitration courts in the same sphere. But that does not account for more than a fraction of the trouble that exists. The real obstacles arise from the inherent and fundamental weakness of the system itself. Others agree with me on that score.

Senator Lynch:

– But we cannot abolish arbitration. It is the ultimate resort in most big upheavals and disputes.

Senator Sir HENRY BARWELL:

– In those instances, the arbitration resorted to is generally voluntary, and not compulsory. Attached to our compulsory arbitration system is a method of ‘ fixing wages. A basic - wage is fixed on a basis which is uneconomic, and needs bolstering up, with the result that an artificial cost of living is created. The honorable senator was out of the chamber when I referred to that, incidentally, only a moment ago. I claim that we can never make a success of a system which will work one way only, and by which one side is prepared to abide only so long as it suits its purpose!. Labour unions have no use for this system except as a machine for the raising of wages and the granting of con cessions. As soon as Labour is satisfied that it can get nothing else out of arbitration it is prepared to throw it aside like a sucked orange, and we are absolutely helpless to prevent it. Labour has said so over and over again.

Senator Foll:

– It is but a comparatively small section of unionists that does not abide by arbitration awards.

Senator Sir HENRY BARWELL.Does the honorable senator think that the great section of labour unionists would be prepared to abide by a decision of the court if an application to it resulted in their getting nothing, or if an application by employers resulted in a reduction of wages owing to adverse industrial conditions? Would they not strike?

Senator Foll:

– The unionists prepare a fresh plaint in those circumstances.

Senator Sir HENRY BARWELL.Yes, but that is not the point I am putting for the moment. I am suggesting what would be likely to happen if the courts granted a decrease instead of granting, as they have been granting in the past, increases and further increases, or giving concessions and further concessions which industries have been able to meet because of economic forces working in their favour. That is all right; in such circumstances the employees are quite satisfied with the system, and they think they are getting their increases as the result of that system, whereas they would get them in any case, just as the workers in America have got them, but only to a greater degree than here. But let that same system result in awards providing for . decreases in wages and lengthened hours of work. Does the honorable senator think that the unionists would agree to it then ? Would not they strike immediately ?

Senator Lynch:

– I am afraid the honorable senator is right.

Senator Reid:

– It is the one point against arbitration that the honorable senator has made in his speech.

Senator Sir HENRY BARWELL.Could there be a stronger point? The very advocates of compulsory arbitration in this chamber admit that the weak point of the system is that it will work only one way - only so long as it gives the unionists increases - and that when it goes the other way it will fail.

Senator Guthrie:

– That is the reason for the partial failure of the system.

Senator Sir HENRY BARWELL:

– It is the reason which makes me think that it is a blunder to persist in what has proved to be a failure.

Senator Elliott:

– Would not the same argument apply with equal force to conciliation boards?

Senator Sir HENRY BARWELL.In a moment or two I shall make observations in regard to that.

Senator Guthrie:

– Is it not the object of this bill to attempt to cure the very evil which the honorable senator is stressing to-night?

Senator Sir HENRY BARWELL.No. If this bill is passed, and this power is given to the Federal Parliament, will that cure a system which is fundamentally unsound, and which its own advocates admit will work only one way ?

Senator Kingsmill:

– This bill is the only way to cure it.

Senator Sir HENRY BARWELL.It cannot be cured. A thing which is’ fundamentally unsound cannot be made sound. Its own advocates admit that it will work only one way. The employees will only adhere to it while it gives them everything they want, and the court cannot enforce its awards. The unsoundness of the present position is recognized by the Government. Ministers say that it cannot continue, and that some remedy must be applied. The question is: what remedy should be applied ? My complaint is that the Government is attempting to improve a system which is fundamentally unsound and rotten to the core. I believe that the bill is an honest, but misguided, effort. The Government says that greater powers must be given to the Commonwealth. The amendment of the Constitution contemplated by this bill is exceedingly important; its consequences may be very far-reaching, and it is certainly fraught with tremendous possibilities to the people of Australia. I agree with honorable senators opposite that a matter of such far-reaching importance ought not to be lightly or hurriedly undertaken, and that full time should be given for the discussion of it, not only by members of Parliament, but also by the public. I agree with them, also, that it should be dealt with by the special constitutional session or - infinitely better still - by a convention similar to that which framed the original Constitution.

Senator Duncan:

– No convention could be more representative than this Parliament.

Senator Sir HENRY BARWELL:

– A convention could be more representative than this Parliament, because there could be appointed to it some of the greatest intellects and some of the men with the greatest experience in Australia, who would be self-sacrificing enough to give up their time in the interests of their country to the work of remodelling the Constitution in those respects in which it needs to be remodelled. We had such men in the original convention. There should certainly be a proportion of members of Parliament on a convention; but we should also include captains of industry and leaders of labour unions. How many members of Parliament are in personal touch with these matters ? They do not know what is likely to be the effect of an amendment of the Constitution. Who are more likely to know what the effect would be than men whose every-day work it is to oversee, things in the industrial world? Employers of labour and captains of industry would be helpful to the deliberations of such a convention. They could tell us of the likely consequences of any alteration proposed. Members of Parliament are not so well qualified to express such an opinion, because few of them have had practical experience.

Senator Foll:

– The honorable senator has expressed some very strong opinions of a destructive character.

Senator Sir HENRY BARWELL.Yes. But it is not much good to put forward constructive suggestions when we are merely asked to pass this bill. In any case, they could not be acted on at the present moment. All we have now before us is the question whether we agree to or disagree with the bill. If we disagree with the bill, it is for us to state our grounds for so doing.

Senator Elliott:

– Will it not pave the way for constructive effort?

Senator Sir HENRY BARWELL.No, not if we proceeded along the lines suggested by the Minister. But there are other objections to the measure. The Minister said that it did not make for unification. I contend, however, that it strikes at the very root of the federal principle, and will carry us a long way towards unification. I am satisfied that the framers of the Constitution were wise in adopting the federal system, and I am prepared to resist any attempt to bring about unification. We have a Government that professes to be against it, and yet time after time it takes steps that tend towards it. The Minister’s statement is entirely erroneous. First look at the industrial provisions of the bill. It is proposed to give to the Federal Parliament power over the whole industrial field. The Minister said, “ But there is to be concurrent jurisdiction of Federal and State tribunals. We shall set up a Commonwealth authority, but the State authority will still exist, and exercise a concurrent jurisdiction.” I point out that that jurisdiction can be exercised only so long as the Federal Parliament permits it. If the proposed power were granted, this Parliament could take away at any moment the whole of the present powers of the States. What would be the position if Labour obtained power ? Labour men are unificationists.

Senator Duncan:

– That has not been their attitude on this bill.

Senator Sir HENRY BARWELL.No; but they will soon begin to realize what tremendous power this bill gives. I want honorable sena tors who are opposed to unification to realize that the measure undoubtedly gives the Parliament power to legislate over the whole industrial field. It is all very well for the Minister to say, “ We shall still allow the State authorities to operate in their own particular sphere “ ; but if Labour comes into power it will take from the State Parliaments the last vestige of authority that they now exercise.

Senator Elliott:

Senator Drake-Brockman:

– I thought the honorable senator was basing his argument on a fear of abuse of the powers.

Senator Sir HENRY BARWELL.No. I base it entirely on the principle of the maintenance of federation rather than taking a big step towards unification. I agree entirely with those honorable senators who have said that the Government has been unduly hasty in regard to this very important matter. Whether the Minister admits it or not, the bill provides for an instalment of unification. In the industrial sphere it provides for the continuance of a system that, at any rate, many of the ablest minds in the community believe to have been a failure. It is proposed to reconstruct the Arbitration Court, appoint the judges for life, and confer on them powers of a nature and magnitude never known before in the history of mankind. I do not know whether honorable senators realize that it is proposed to give the judges, not only judicial powers, but also power to legislate in regard to all industry. The Minister stated the other day that the same power is held by judges, such as the judge of a supreme court; but I point out that they have no legislative power. Of course, the decisions of judges make case law, but that is not legislation.

Senator Drake-Brockman:

– If not, I do not know what it is. All common law is based on an old theory.

Senator Sir HENRY BARWELL.It is not legislation at all. The decisions of the civil courts are based largely upon legislation, such as Real Property Acts, Companies Acts, &c, passed by Parliament.

Senator Drake-Brockman:

-Where do we find common law? Not in legislation.

Senator Sir HENRY BARWELL:

– No. What I am contending is that, as regards the civil courts, practically all the decisions are on the construction of legislation passed for the guidance of the industrial, commercial, and business life of the community; and that the functions of courts are not legislative, but judicial. This proposal is to give to an industrial judge a degree of power that has never been given to a judge in any country.

Senator Elliott:

– Have not the State courts that power now ?

Senator Sir HENRY BARWELL:

– It is true that the State arbitration courts have power within their ambit.

Senator Drake-Brockman:

Senator Sir HENRY BARWELL:

– But they have never been submitted in this form. As honorable senators know, members of another place were in a quandary when these proposals were submitted to them. The same may be said of practically the whole of the newspapers. The right honorable the Minister complained yesterday that the newspapers, had totally misrepresented the, position. Does the Minister suggest that this has been done deliberately? Is it not rather that the editors and trade writers themselves do not understand the position? If the editors of our important metropolitan newspapers, men who are daily dealing , with political matters, and if members of this Parliament do not understand them - Senator Findley admitted during this debate that he did not- what possible chance is there of the man in the street being able to give an intelligent vote upon them at short notice? Honorable senators should not feel obliged to vote for them simply because they sit behind the Government. The Senate is supposed to be a house of second thought, and also a house for the preservation of State rights. For that purpose the several States have equal representation in it. Is it likely that this principle would have been adopted if it had been thought that the Senate would be merely a replica of another place ? I am anxious to be in line with the Government ; to keep in step with Ministers ; but I refuse to do that at the sacrifice of conscience. I consider it my duty to the people whom I represent to refuse to vote for a measure which I believe would be detrimental to the best interests of the country.

Senator MCLACHLAN:
South Australia

– Does not my honorable friend desire to hear the truth ? Does he propose to live in a world of hypocrisy all his life f Is heliving under the belief that everything is all right when it is not all right? What is the use of shutting our eyes to the facts ? One man told mc of £3.000,000 which was diverted from Australia - the greater portion of it went to the Argentine, and some of it to New Zealand - because the investors were afraid of the industrial unrest here. . That is what is going on. A lot of us shivered over the future of England a few weeks ago, but there was no cause for it. When you get among the people of England you realize that their good sense would speedily lead them to drive into the English. Channel the rabble we feared. Likewise, I have no fear for the future of Australia, but it is essential that’ the National Parliament of Australia should show to the world that it intends to take seriously in hand the reform of its industrial arbitration system, and that it is able to manage, that system which it has been at so much pains and so much trouble to set up.

Debate (on motion by Senator Drakebrockman) adjourned.

page 3205

ADJOURNMENT

Extra Sitting Day

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

– I move-

That the Senate do now adjourn.

The Government is anxious to get these bills through, and to that end I shall ask honorable senators to sit on Tuesday next.

Senator FOLL:
Queensland

– I do not think that honorable senators will raise any objection to an extra sitting day, but I suggest that when the Senate ia sitting four days a week it might meet at 11 o’clock in the morning on Thursday as well as Friday. Those who live in other States have to “Mci their heels” about the city of Melbourne until the Senate meets in the afternoon. Of course, I realize that Ministers must have time to attend to their departments, but if my suggestion were adopted’ I think it. would expedite, business, especially when we are dealing with important legislation like this, which needs, not only careful consideration, but also a speedy passage. Other honorable senators who do not reside in Melbourne agree with me in ‘this regard.

Senator PEARCE:
Minister for Home and Territories · Western Australa · NAT

– The suggestion made by Senator Foll is a good one, and if the progress of business during the next week indicates that its adoption would enable us to get through in proper time, we shall try to give effect to it.

Question resolved in the affirmative.

Senate adjourned at 10.23 p.m..

Cite as: Australia, Senate, Debates, 17 June 1926, viewed 22 October 2017, <http://historichansard.net/senate/1926/19260617_senate_10_113/>.

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Senate17 June 1926

PAPERS

QUESTION

NORTHERN TERRITORY

Senator LYNCH:WESTERN AUSTRALIA

Senator PEARCE:Minister of Home and Territories · WESTERN AUSTRALIA · NAT

REFERENDUM (CONSTITUTION ALTERATION) BILL

CONSTITUTION ALTERATION (ESSENTIAL SERVICES) BILL

Senator PEARCE:Minister for Home and Territories · Western Australia · NAT

Senator Needham:

Senator PEARCE:

Senator Barnes:

Senator PEARCE:

Senator Foll:

Senator PEARCE:

Senator Findley:

Senator PEARCE:

Senator Findley:

Senator PEARCE:

Senator McHugh:

Senator PEARCE:

Senator McHugh:

Senator PEARCE:

Senator Findley:

Senator PEARCE:

Senator Findley:

Senator PEARCE:

Senator Findley:

Senator PEARCE:

Senator Findley:

Senator Lynch:

Senator PEARCE:

Senator Findley:

Senator PEARCE:

Senator H Hays:

Senator PEARCE:

Senator Payne:

Senator PEARCE:

CONSTITUTION ALTERATION (INDUSTRY AND COMMERCE) BILL

Second Reading

Senator NEEDHAM:Western Australia

Senator Duncan:

Senator McLachlan:

Senator Drake-Brockman:

Senator NEEDHAM:

Senator Findley:

Senator NEEDHAM:

Senator Drake-Brockman:

Senator NEEDHAM:

Senator McLachlan:

Senator NEEDHAM:

Senator McLachlan:

Senator NEEDHAM:

Senator Thompson:

Senator NEEDHAM:

Senator Pearce:

Senator NEEDHAM:

Senator THOMPSON:Queensland

Senator McLachlan:

Senator THOMPSON:

Senator Drake-Brockman:

Senator THOMPSON:

Senator THOMAS:NEW SOUTH WALES · NAT

Senator THOMPSON:

Senator Foll:

Senator THOMPSON:

Senator Drake-Brockman:

Senator THOMPSON:

Senator Foll:

Senator THOMPSON:

Senator Drake-Brockman:

Senator THOMPSON:

Senator Reid:

Senator THOMPSON:

Senator LYNCH:Western Australia

Senator McHugh:

Senator LYNCH:

Senator McLachlan:

Senator LYNCH:

Senator Payne:

Senate
17 June 1926

Senator LYNCH:
WESTERN AUSTRALIA

Senator PEARCE:
Minister of Home and Territories · WESTERN AUSTRALIA · NAT

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

Senator NEEDHAM:
Western Australia

Senator THOMPSON:
Queensland

Senator THOMAS:
NEW SOUTH WALES · NAT

Senator LYNCH:
Western Australia

Senator FINDLEY:
Victoria

Senator Sir HENRY BARWELL:
SOUTH AUSTRALIA · NAT