12th Parliament · 1st Session
The President (Senator the Hon. W. Kingsmill) too the chair at 3 p.m., and read prayers.
– Is the Government still considering the payment of a bounty on the production of paper pulp, or is this to be added-
– Order !
– To the already long list of unfulfilled platform pledges?
– The honorable senator may add it to any list.
– Iask the Leader of the Government in the Senate (Senator Daly) not to take notice of a remark for which I have called an honorable senator to order.
– The position of the paper pulp industry is receiving the very serious consideration of the Government. Conferences have been held between Mr. Gepp and the interests concerned, and I am extremely hopeful that before this session ends some tangible scheme will evolve from the conferences, and that Parliament will be given an opportunity to discuss it.
The following papers were presented : -
Tariff Board - Reports and Recommendations -
Bolts,nuts, rivets, and metal washers. n.e.i., raildogs or brobs, and fishbolts -Request for increasedduties. “ Corsets “ -Request for deletion ofthe word from Item 420 ofthe Customs Tariff 1921-28.
Electrically controlled clocks and movements.
Feather or down quilts.
Fruit and vegetables, n.e.i. (Preserved in liquid or partlypreserved or pulped) .
Gears, wheels,pinions, andother parts for replacementpurposes in motor cars - Request for increased duties.
Gold and silver wristlet watches - Request forincreased duties.
Meats, poultry, game, and soupRequest for increased duties.
Pickles, sauces, chutney, olives, and papers - Request for increasedduty.
Prunes - Requestfor increased duty.
Pumps and pumping units of the type used for vending petrol.
Rubber garden hose -Request for in creased duties.
Defence Act - Regulations amended - Statutory Rules . 1930, No. 120- No. 130.
Naval Defence Act - Regulations amended - Statutory Rules 1930, No.124- No. 125.
– Will the Leader of the Government inthe Senate be kind enough toagree to a suspension ofthe Standing Orders after the dinner adjournment to allow me to call attention to the serious position of the wheat farmers of Australia ?
– The honorablesenator was goodenough to conferwith me on this matter, and I can give him the assurance that, when Senator R. D. Elliott’s motion has been disposed of, I shall offer no objectiontothe suspensionof the Standing Orders for the purpose indicated. I feel thatany discussion on the subject mentioned bythe honorable senator will be extremelyhelpfulto the Acting Minister for Markets and Transport(Mr. Forde) in considering matters arising out of conferences held in Canberra within the last few days.
Latrobe Shale Oil
asked the Minister representing the Minister for Defence. upon notice -
– The information is beingobtained, and a replywill be furnished to the honorable senator asearly as possible.
Consideration by Senate.
asked the Leader of the Government in the Senate, upon notice -
With reference to the statement made by the Leader of the Government in the Senate on the 30th May last, in reply to a question, on notice, thathe was in a position to indicate that the tariff schedules and increases imposed by the present Labour Government since November, 1929, would be submitted to the Senate before the Prime Minister’s departure for England - is the Minister in a position to state when these tariff items and the numerous subsequent increases will be submitted to Parliament for detailed consideration?
– I regret that I am not at present in a position to indicate when it will be possible to take this business.
Reportof Select Committee: postponement.
Motion (by Senator Sir William Glasgow) proposed -
That the time for bringing up the report of the Select Committee on the Central Reserve Bank Bill be extended until Thursday, 27th November.
– I must oppose this motion, because I feel that the select committee has had ample time to bring up a report. Honorable senators will realize that the fate of the Central Reserve Bank Bill is a matter of extreme importance to the present Government. I advise them to study the document issued by the League of Nations, under the title of Gold Delegations, because it draws attention to the very serious nature of any proposal to establish a central reserve bank, and to the importance of such an institution in the life of any nation. The Government regards the proposal to further extend the time for bringing up the report of the select committee as harassing, to the extent that it cannot proceed with its banking legislation. Australia must have a central reserve bank if it is to emerge from its present financial difficulty. Surely the select committee has had ample time to give the Senate the benefit of its deliberations. Every financial writer deplores the lack ofa central reserve bank in Australia. Only the other day one of our most learned professors of economics commended the present Government for its Central Reserve Bank Bill, speaking of it as the first honest attempt on the part of a Commonwealth Government to put banking in Australia on an even keel. I protest against these continual postponements, and I sincerely hope that the Senate will not permit of this particular adjournment.
– Vain hope!
– From our stand-point very big constitutional issues are raised by the attitude of the Senate. The Government knows that it cannot insist on certain legislation being passed or on consulting our peers until such time as this chamber “ fails to pass “ that particular legislation. But if these adjournments are to continue we shall have to consider the legal position, to see whether they do not amount to a “ failure to pass “ within the meaning of the Constitution. I should prefer the Senate, if it is against the Government’s policy in regard to a central reserve bank, to reject the bill so that we could then decide what action should be taken. One of the greatest difficulties with which the Government is at present confronted is that mentioned yesterday by Senator Chapman, the problem of exchange. What control has this national Government over the banking of the country?
– Does the honorable senator think that the Government should have control over banking?
– I think that the Government is entitled to have more control over the credit of the country than it has had in. the past.
The PRESIDENT (Senator the Hon.
– I bow to your ruling, sir. Whether this Government is right or wrong it regards its. banking legislation as one of the most vital sections of its policy.
– It has never put this proposal before the people.
– Exactly. The Go vernment desires to know what stand the Senate proposes to take with regard to its banking legislation. It. is most unsatisfactory to have a vital measure sent up to this chamber for the opinion of the Senate and to have it first of all referred to a select committee, and then the report of that committee postponed time and time again. I protest against any further postponement in the matter, and ask the Senate to stand up to its job and insist upon the committee submitting its report immediately. There is no necessity for a further delay of a fortnight.
Senator Sir HAL COLEBATCH (Western Australia) [3.12]. - I have no doubt that when the chairman of the Select Committee on the Central Reserve Bank Bill moved than an extension of time be granted to the committee to enable it to present its report, he expected that the extension would be granted as a matter of course; that the Senate would give the committee credit for having exercised reasonable expedition in the preparation of its report. Since the Leader of the Senate has not seen fit to take up that attitude, it is necessary that the members of the select committee should place certain facts before honorable senators. They will indicate that the delay is entirely due to the action of the Government, and in no way to inaction on the part of the committee.
At the outset I remind honorable senators that when the Senate rose during the second week of last August there was a general belief that it would not reassemble until 1931, and that the select committee would not be required to submit its report before then. Clearly on that ground alone the committee might be excused for not having its report ready now. But it is not on that count that it bases its request for an extension of time. If honorable senators will turn to the progress report from the select committee, they will find two things very clearly set out. . One is that, with a single exception, the whole of the evidence placed before the committee by eminent representatives of the financial, commercial and industrial community was unanimously of the opinion that there was no need for the establishment of a central reserve bank in Australia at this juncture; that infinite harm might result from precipitate action, or the formation of such a bank other than on thoroughly sound lines, after the proposal had been exhaustively considered. That danger is much greater now than in times of ordinary financial stability. The select committee submitted a very definite recommendation to the Senate. Paragraph 9 of its report reads -
Your committee would most strongly recommend that the Government take advantage of the presence in Australia of Sir Otto Niemeyer and Professor Gregory to seek from theman opinion as to the lines on which the proposed hank should be established. It is felt that their exact knowledge of the operations of the Bank of England and of Central Reserve Banking generally, combined with the sound appreciation of Australian conditions which will result from the investigations on which they arenow engaged, will give to their advice unrivalled value and authority, assuring that complete confidence of the banking, financial, commercial and industrial communities which is essential to the helpful functioning of a Central Reserve Bank, and which alone could secure its successful establishment in a period of unusual difficulty.
In moving that its report be adopted. Senator Lawson, one of the members of the committee, made it clear that, by accepting the recommendation of the committee the Senate would make it its own recommendation. Without discussion or dissent from any honorable senator the Senate adopted the report and made it a recommendation of the Senate; no longer merely a recommendation of the select committee.
We have just listened to an appeal from Senator Daly that honorable senators should stand up to their jobs. I have no doubt that they will. After waiting for three weeks for some result from the committee’s recommendation, the chairman sent a telegram to the Acting Prime Minister (Mr. Fenton) asking what was being done by the Government in the matter. On the following day he received an , acknowledgment from the secretary to the Acting Prime Minister stating that the telegram would be brought under the notice of that gentleman that day. If I remember rightly, the date was the 17 th of September. The committee had already waited for more than a month without taking action, but from that day to this no further reply of any kind has been received from the Government. The report was adopted by the Senate and, whether the recommendation was a. sound fine or not, I have no hesitation in saying that the failure of the Government to reply to the telegram from the chairman of the committee was an act of gross discourtesy not only to the committee-, but, to the Senate itself. After waiting, T think it was’ until the 17th October, and receiving no response from the Government, the chairman of the select committee took the responsibility of communicating direct with Sir Otto Niemeyer. In the meantime Professor Gregory had gone to New Zealand. The result was that, while these two gentlemen were quite prepared to assist the committee with the knowledge at their disposal, it was not until the 27th October that the committee was placed in possession of their views. That meant that it had no opportunity to meet and. give consideration to its report until the Senate was” called together a. few days ago. In the meantime, as honorable senators are aware, members of the select committee were in their respective States, widely separated. In the circumstances it was impracticable for them to meet at a moment’s notice, and I have no hesitation in asserting that whatever delay has taken place is the fault of the Government alone. I take it that it is not permissible at this stage to discuss the merits of the Central Reserve Rank Bill?
– It is not.
Senator SIR HAL COLEBATCH.I shall content myself with giving these as the reasons, why the committee has been compelled, not of its own desire, to ask for an extension of time in presenting its report.
– Does that mean that the committee cannot proceed until H examines Sir Otto Niemeyer?
Senator SIR HAL COLEBATCH.No. We have now the recommendation and report of Sir Otto Niemeyer and Professor Gregory. It means that the committee is not prepared to make a recommendation to this Senate on so vital a matter until it has had adequate opportunity of considering the whole of the evidence including those- two reports which, had the Government acted on the recommendation of the Senate, might have been in our hands two- months ago..
Sir Otto Niemeyer left with the committee the information that it sought from, him, together with. a. valuable and interesting statement, from Professor Gregory. This information, will be made available to the Senate in due course, together with the evidence of other witnesses. I repeat than, because of the action of the Government in flouting the recommendation of the Senate, those documents, instead of being in the possession of the committee at the end of August, as they might have been, were not made available to it until a fortnight ago.
– Twelve weeks- ago> when -the work of this committee was under discussion, it was pointed out that the committee would take evidence, first in Sydney and then in- Melbourne, returning to- Canberra; as the Government appealed to it to do, before the adjournment in the second week of August. . In accordance with that arrangement the committee visited both Sydney and Melbourne:, but instead of presenting its report before Parliament rose in August, it secured a postponement, with the result that another ten weeks have elapsed, making twelve in all, without a report having been presented. Senator Sir Hal Colebatch says that he did. not expect that Parliamen would meet until early next year. Perhaps the articles from his pen dealing with financial questions, which appeared in the Sydney Evening News, influenced the Government to call Parliament, together for a short financial session. Although the Prime Minister (Mr. Scullin) was desirous of obtaining the committee’s report before he left Australia, we are now told by Senator Sir Hal Colebatch that the committee did not accede to his request because it was waiting for a report from Sir Otto Niemeyer and Professor Gregory - two eminent and distinguished visitors from the Old Country.
– Does not the honorable senator think that they have some knowledge of financial matters?
– I do not say that they have no knowledge of finance : but 1 remind the honorable senator that the Government, not Sir Otto Niemeyer or Professor Gregory, is in charge of the finances of this country. If, as Senator Cole batch says, these gentlemen have left behind a report, why is it not placed on the table of the Senate?
– The committee cannot place their memorandum on the table until it furnishes its report.
– What is the reason for asking for this further postponement ? Is it that the members of the committee have heard rumours of a split in the Labour party and wish to harass the Government ?
– The honorable senator need not be afraid that I shall oppose him in the event of there being a double dissolution.
– I should like the honorable senator to oppose me, for I know that, instead of returning to this chamber after the election, he would probably be writing further articles for the Sydney Evening News.
– I ask the honorable senator to confine his remarks to the subject before the Chair.
– Personally, I am not concerned with the nature of the report which will be presented by the committee, because I know that it will be based on the evidence of witnesses who are politically opposed to the Labour party. Notwithstanding the composition of the committee, the Government afforded it every facility for pursuing its inquiries with the exception that it required the members of the committee to pay their own expenses. Probably that is why the committee is now endeavouring to harass the Government.
– Is that why the honorable senator declined to act on the committee?
– I thanked Senator Glasgow for nominating me as a member of the committee, but said I was not prepared to act on it.
– Especially without pay!
– The remarks of the honorable senator have nothing whatever to do with the subject before the
– I appeal to honorable senators opposite not to press for this further postponement. I do not know what is in the mind of the Vice-President of the Executive Council (Senator Daly), but, personally, I should like a division to be called for. Should the motion be proceeded with, I hope that it will be defeated.
. - Notwithstanding the many reasons advanced by Senator Colebatch for a postponement of the time for presenting the committee’s report, it is clear to any one who has perused the progress report of the committee that there was no intention on the part of its members to seek evidence from persons who were nor well known to be hostile to the Government.
– That is absolutely wrong.
– I make that statement and am prepared to stand by it.
– Every organization was invited to send witnesses.
– I am certain that honorable senators opposite, who supported the appointment of this committee, had their minds made up to do everything possible to prevent the establishment of a central reserve bank even before the committee was appointed.
– Who told the honorable senator that?
– That could be gathered from their speeches. I do not recollect the names of all of those who spoke, but I can say without hesitation that those honorable senators opposite who contributed to the debate showed such bitter and unrelenting opposition to the proposal that there was not the slightest chance of the committee presenting a favorable report.
– I ask the honorable senator to connect his remarks with the motion before the Senate.
– I submit that I am showing that no reasonable plea can be advanced for granting an extension of time for the presentation of the committee’s report on the ground that it has not had sufficient opportunities to obtain evidence. All the evidence that honorable senators opposite desire to obtain is in support of their contention, and in my opinion the only evidence sought was to strengthen their opposition to the measure. .If honorable senators are honest, and wish to have a fight, they should reject the bill and engage in a more important conflict before the people.
Senator DUNCAN (New South Wales) 3.33]. - It is most unfortunate that the report of the Select Committee on the Central Reserve Bank Bill has not been t> resented for our consideration to-day. It seems that it will be impracticable for the Senate to consider that measure before the present sittings of Parliament terminate, and it will therefore be impossible 1.0 consider the committee’s report until Parliament meets next year. I am not blaming the committee for tha position that has arisen, although it is unfortunate that it has been unable to finalize its report. It is unreasonable to discuss, at this juncture, the motive of the committee or to impute motives. The committee is unable to present its report today; whether the motion is agreed to or not the report cannot be presented at this stage. According to the statement by the chairman of the committee, it will not be possible for the Senate to consider the report for some time.
– If the report were submitted we could proceed with the discussion of the bill.
– We have reached the stage where we should consider the report; but I think that sheer force of circumstances will compel the Senate to agree to the postponement of its presentation. I understand that certain honorable senators came prepared to-day to discuss the report and. then to proceed to debate the bill. We ought to have from the committee some assurance that the report will bc ready for the consideration of the Senate on the date mentioned in the motion. There should not be any further postponement, and provided an undertaking such as f have mentioned is given I shall be compelled, reluctantly, to agree to the request of the committee that the date for the presentation of the report be postponed until the 27th November.
Senator Sir GEORGE PEARCE (West ern Australia [3.37]. - I am surprised that the Vice-President of the Executive
Council (Senator Daly) should oppose this motion. The Minister should be well aware of the nature of the communications between the committee and the Government, and, iu the light of what Senator Colebatch has said, was either speaking with his tongue in his cheek 01 with an utter disregard of the fact that the delay has been caused largely by the Government itself. I suggest that this is not a matter of ordinary importance, but one which involves a radical change in the whole of our banking system. The Government’s proposal should not be proceeded with until the fullest investigation has been made. The interim report presented by the committee ‘ shows that there was ample justification for the course then suggested. The Commonwealth had a unique opportunity to obtain evidence from two men intimately associated with the working of a central reserve bank. The average banker in Australia has not had anything to do with the working of a central reserve bank, and as there were iu Australia two gentlemen, one of whom was actively associated with such a bank, one would have thought the Government, if it wanted to get at the truth, would not need spurring by a select committee of the Senate to obtain information from these two gentlemen. It does not necessarily follow that the Government must accept their opinion, but one would have thought it would desire to buttress its opinion with the best evidence obtainable. Surely if the Government’s proposals are sound they can stand the criticism or adverse opinions of any one. Does the Government want a sound system of central reserve banking? If it does, what on earth has it to fear from the opinion of Sir -Otto Niemeyer or any. one else? If it wanted to be assured that it was acting on sound lines, it should have assisted the committee to obtain the opinion of Sir Otto Niemeyer. I feel sure that that gentleman would have given valuable information. Even if the Government could not accept it, it should have had sufficient belief in its proposal to at least let him say what he wished concerning it. The Government’s action reminds me of an incident that happened to me when a member of the Federal Labour party in the years when it was a Labour party anil before it became :i party representing monopolists and capitalists. One day I was reading a book against socialism, written by Mallock, when a member of the Labour party happened to se” what I was reading. He said, “Who is the author?” I replied, “ Mallock. He is writing against socialism.” He looked at me as if I were falling from grace, and said, Do you read such books”? I replied that I did, and he informed me that I should read Kautsky, a leading writer in support of socialism, who, he said, was the man to deal with the capitalists. It seems to me that is the attitude the Government is adopting in regard to this matter. Sir Otto Niemeyer is intimately associated with the working of a central reserve bank, but, apparently, the Government wishes to disregard his advice. When the committee mildly suggested that his opinion might be sought, the Government cast the communication into the waste paper basket. No effort was made to reply to the committee’s communication. I was particularly struck by the statement of the Minister that a central reserve bank “is of great importance to the Government.” Is that the only importance it has? Is it only because of its political importance?
– The right honorable senator knows that I was speaking in a figurative sense.
Senator Sir GEORGE PEARCE.The words used by the Minister were that it was “ of great importance to the Government “. What we are here to do is to frame a bill of great importance to the people. Honorable senators on this side wish the central reserve bank to be established on such lines as to permit it to protect the interests of the people. To this end the committee desired to obtain the fullest possible information, and the presence in Australia of one of the greatest experts in central reserve banking offered a splendid opportunity to obtain the highest expert opinion on this involved subject. I also remind Senator Rue that I saw a notification in the press inviting those who wished to give evidence to forward their names to the secretary of the committee. If persons did not avail themselves of the invitation, certainly it is not the fault of the committee.
– I did not see the notification.
Senator Sir GEORGE PEARCE.J. support the motion because I consider the request a reasonable one. The committee should bc in a position to consider the views of the twovisiting experts on central reserve banking. One of these gentlemen is a high official in the Bank of England, which is regarded as the greatest reserve bank in the world. If the committee presented its report without having secured the views of these two gentlemen it would be failing in its duty. If the request for an extension of time is granted, the committee will be able to consider this additional evidence, and, when the report is presented to this chamber, honorable senators will have the satisfaction of knowing that no effort has been spared to obtain the most complete information.
– I reluctantly oppose the request of the select committee for an extension of time. The Central Reserve Bank Bill should have been dealt with by the Senate some months ago. If this chamber had rejected the Government’s proposals there could have been an appeal to a higher tribunal. The Government considers this measure vital.
– So do honorable senators on this side.
– I am aware of that. Nevertheless I consider that the committee has had ample time to secure all the necessary evidence. Central reserve banks have been, established in practically every civilized country so Australia has the advantage of experience of central reserve banking elsewhere to draw upon.
– It. is the object of the select committee to obtain expert evidence concerning the working of central banking in other countries.
– I ask honorable senators not to discuss by way of interjection or in their speeches the merits of the Central Reserve Bank Bill.
– I object to an extension of time because the select committee has had ten weeks or twelve weeks within which to secure all the evidence necessary for the presentation of its report. Wo have no guarantee that, if this request is granted, the commi ttee will not. at the expiration of the date fixed, make a request for further extension, so its report might not be presented to this Parliament untilsome time next year. When the committee was appointed I and other honorable senators supporting theGovernment believed that the inquiry would be expedited so that its report could be presented at an early date. The alternative to the granting of the requestisto proceed with the consideration of thebill, and in view of the urgent need for the establishment of a central reserve bank on the lines indicated in thebill the Senateshould adopt this course.
Senator Sir WILLIAM GLASGOW (Queensland) [3.48]. - I am surprised that the Government is objecting to the motion. This is, I believe, the first time in the Senate that a request by a select committee for an extension of time has been opposed by the Government, and I thought that the Government would have been courteous enough on this occasion to agree to the request. One select committee of this chamber obtained seven extensions of time.
– Does this select committee intend ever to present its final report ?
Senator Sir WILLIAM GLASGOW.I do not wish to repeat what Senator Sir Hal Colebatch has said in support of the motion. But I want to say that the Government has deliberately harassed this committee. It has attempted in every possible way to block it from making its inquiry. SenatorRae was quite wrong in saying that the committee has taken evidence from one side only. It advertised in Sydney and Melbourne inviting people from all branches of industry to give evidence, and, as a matter of fact, Mr, Duffy, the secretary of the Melbourne Trades Hall, tendered very useful evidence to the committee. Recognizing the important bearing the Central Reserve Bank Bill will have on the financial structure of Australia, the committee has endeavoured to secure the opinion of persons experienced in banking and with knowledge of the various systems of central banking throughout the world. It was most important that it should obtain the advice of men like Sir Otto Niemeyer and Professor Gregory, who were Specially qualified to give evidence on such a subject.
– What would the committee have done if those gentlemen had not been in Australia?
Senator Sir WILLIAM GLASGOW. The committee would have been obliged to get evidence from other people. I may point out that the Central Reserve Batik in South Africa was set up largely on the advice of Sir Henry Strakosch, one of the greatestauthorities onbanking in the world,but within two years it was necessary for South Africa to obtain the services of two experts from other countries to enable the bank tobe reconstructedon another basis altogether. If there has been any delay on the part of the committee it hasbeen due to the action of the Government. But I can assure honorable senators that there will be no further delay other than is necessary to secure thebestadvice possible in regard to central reserve banking.
Question - That themotion beagreed to-put. The Senate divided. (The President - Senator the Hon. W. Kingsmill.)
Majority . . 16
Question so resolved in the affirmative.
Debate resumed from 12th November (vide page 167) on motion by Senator Daly -
That the paper be printed.
Senator Sir GEORGE PEARCE (Western Australia) [4.0].- The financial statement is an extraordinary document dealing with an extraordinary state of affairs. In order to put it in its proper perspective,. I propose briefly to give the history of the events that have led up to its presentation ; because only by doing, so can we see its real significance. The statement itself constitutes such u review. It brings out what may be regarded as a starting point, the meet ing of the representatives of the Commonwealth and State Governments in Melbourne in August last, and the very important resolutions carried at that con.ference. There was a preliminary resolution carried by the Loan Council m follows : -
The members of the Loan Council appreciate that the consideration of the financial position of the. Commonwealth and each State involves » review of financial policy of each government, and that it is not the function of the Loan Council to determine, or even suggest, the form which that policy should assume. The Treasurers feel, however, in view of the difficult outlook generally that it is proper and advisable for them to urge upon all governments the need for the utmost economy in regard to expenditures, and also that it is essential that the budgets of the Commonwealth and the States be balanced for the forthcoming financial year. This is necessary not only because of the Australian position, but also because of the serious effect which the continued deficits in the accounts of the COmmonwealth and States have undoubtedly bad upon the credit of Australia abroad.
The Premiers’ conference carried the following resolution : -
That the several governments represented at i.li is conference declare their fixed determination to balance their respective budgets for dic financial year 1030-31, and to maintain a similar balanced budget in future years. This budget equilibrium will be maintained on such a basis as is consistent with the repayment or conversion in Australia of existing internal debt maturing iri the next few years.
Further, if during any financial year there are indications of a failure of revenue to meet expenditure, immediate further steps will be taken during the year to ensure that the budgets shall balance.
Then, there was a series of what might be called machinery resolutions to operate that decision, and next we had a commencement of a series of cabinet meetings to give effect to that signed undertaking of the Commonwealth and State Governments. The following is a report, dated Canberra, 2nd October: -
After a meeting, which lasted two days the federal Cabinet to-day decided that the special economy session of Parliament necessary to enable the Ministry to balance its budget for the’ current financial year should begin on Thursday, 30th October. A meeting of the Parliamentary Labour party is to be held on Monday, the 27th October, to consider the recommendations- of Cabinet. The decision whether these will be’ submitted to Parliament will be left to the caucus.
The decision to delay the session until after the New South Wales election’ is regarded as- » victory for that section’ of the Cabinet, headed by the Acting Attorney-General (Senator Daly)-, which has strenuously opposed an early economy session as likely to prejudice Mr. Lang’s chances on the 25th October.
Cabinet will recommend for the consideration <>f the’ Labour caucus- -
Reduction of Commonwealth expenditure at the rate of approximately £4,000,000’ a. year during the remainder of the financial “year.
plan for the promotion of approved new works, with, the assistance of the Commonwealth Bank, for the absorption of unemployed.
Reduction of Ministers’ salaries by 15 per cent.
Reduction of private members’ .salaries by 10 per cent.
Reduction of federal public servants’ salaries on a graduated scale, ranging from 2$ per cent, to 15 per cent.
Increased taxation of income derived from property. There will be no special taxation of interest as such.
Arising out of that two things happened. There had been a substantial fall in the market price of all Australian securities, both at home and abroad, as a result of the publication of the Government’s intention to tax interest. The Government’s announcement of the 2nd October that there was to be no special taxation on interest immediately had. the necessary effect of reducing the interest rate on Australian securities, both at home and abroad.
At the same time, this announcement appeared -
Figures placed before his fellow Ministers by the Acting Treasurer (Mr. Lyons) showed that the balancing of the budget would be impossible unless salary reductions were decided upon.
That indicated that, at that juncture, the Federal Government waa loyally honouring the promise that Mr. Scullin had given when he signed the agreement with the State Governments to balance the Commonwealth budget, they in turn agreeing to balance theirs. Another significant incident occurred about this time which merits passing reference. There was published in the press a report of the statement made by Sir Otto Niemeyer to the Melbourne conference, also an intimation that the conference had expressed its thanks and appreciation to Sir Otto for his address and the advice that he had tendered. I mention that because later attempts were made by Ministers and others to delude the people into believing that Sir Otto Niemeyer had given that advice to the people of Australia of his own volition.
After that conference Mr. Scullin took his departure for the Imperial Conference, and ho had scarcely left Fremantle when Labour organizations in Sydney carried resolutions advocating repudiation. One of the Prime Minister’s first tasks on arrival in the United Kingdom was to combat that insidious and contemptible propaganda. The honorable gentleman had to prove, not only that those statements did not represent the views of the people, but that they were not those of the Commonwealth Government.
The next act in the tragedy was the concerted attack made upon the Commonwealth Bank and r,h<- associated Banks by. the originators of those insidious proposals, in an endeavour to justify their statements. Among the leaders in that attack was the exTreasurer, Mr. Theodore. Those people are persisting in their endeavour to make it appear that the banks are responsible for the present serious position of the Commonwealth finances and of our industries generally. The following quotation is taken from the financial columns of the Sydney Morning Herald of the 31st October, 1930:-
In the statement of Mr. Theodore published yesterday are these words : “ On the other hand I have seen the growing menace of the opposite policy at present being operated by the banks - namely, deflation brought about by drastic) restrictions of credit.” Mr. Theodore summarized what less able politicians have uttered more diffusely. Yet his statement is not borne out by facts.
We published on Wednesday, the day Mr. Theodore made his statement, the aggregate figures compiled from the sworn declarations of the trading banks for the quarter ended September 30, and we compared those figures with the corresponding figures of a year previously. The banks’ aggregates, which do not include the figures of the Commonwealth Bank, or of the Savings Bank, showed that from September 30, 1.929, to September 30.. 1930, the- depositors of the banks had withdrawn £16,900,000 more than they had paid in. Although this large sum was withdrawn from the banks these institutions did not reduce their lendings to Governments and people by anything like £16,900,000. The lendings to Governments shown in the sworn returns as Government securities were £2,100,000 lower on September 30, 1930, than on September 30, 1929, and between the two dates advances to the people (shown as “ all other assets”) were reduced by £3,200,000. In other words, in the course of the year there was withdrawn from the banks £10,900,000; the banks withdrew from their customers £5,300,000.
Wherein in these figures is the “ deflation brought about by the rigid restrictions of credit ?”
If further destructive criticism of Mr. Theodore’s arguments is required, I direct honorable senators to the Financial Statement of the Acting Treasurer (Mr. Lyons) which we are now proposing to print. At page 5 honorable senators will find the following reference to the banking position in Australia : -
The figures, at 30th June last, showed a decline in deposits for twelve months of £20,000,000, and an increase in advances for the same period of £10.000,000, or a total adverse movement of £35,000,000.
At 30th June last, the deposits totalled £293,923.000, whilst the advances amounted to £279,272,000.
The proportion of total advances to total deposits on 30th June lust was 95 per cent., as com pared, with 84 per cent, in 1929 and 80 per cent, ‘in 1928.
At 30th September, 1930, the deposits had declined to £287,587,000. and the advances to £27.1,239,000.
Comparing September, 1.929, with September, 1930, we find that deposits declined by £20,000,000, and advances by £7,000,000.
There, out of the mouth of the Acting Treasurer, is a repudiation of the allegations of the ex-Treasurer, Ministers of the Crown and other members of Parliament who have been going about the country talking about a restriction of credit. Those figures indicate that the banks have been extending credit to the absolute limit of safety.
Next, we were treated to an exhibition of pitiable vacillation on the part of the Government such as no other country ha3 witnessed. A number of Labour Ministers and members of the Commonwealth Parliament rushed about the country, some in Melbourne and others in Canberra, warning the people of the serious state of affairs and telling them that the Government could be depended upon to do everything that was necessary to balance the budget, and maintain the financial equilibrium of the country. Simultaneously, other Ministers rushed around New South Wales supporting Mr. Lung, whose chief plank was the dishonouring of the Melbourne financial agreement ; the tearing tip of that “ scrap of paper “ to which the Prime Minister (Mr. Scullin) had set his signature. Another important feature was the denunciation and vilification of Sir Otto Niemeyer for the advice that he had tendered to the Commonwealth and State Governments, and for which he had received their thanks. Foremost among those taking part in that campaign of traducement were the Leader of the Government in the Senate (Senator Daly), Mr. Beasley, Mr. Blakeley - both Ministers - and a number of other prominent members of the Labour party.
Notwithstanding the fact that the outlook was so serious, and that Ministers recommended that Parliament should be summoned to deal with many urgent matters, that necessary procedure was postponed. That was done purely for political reasons; because an election of the State Parliament of New South Wales was in progress. It was feared that if the Commonwealth Parliament were called together, and the people of Australia told the truth, Mr. Lang, with his bag full of false promises, would assuredly be defeated. So this Government, which claims to represent the people, said, “We will keep the people of Australia in the dark until the finalization of the New South Wales election. We will not let them know the truth until Mr. Lang is returned to power.” And the meeting of this Parliament was deliberately postponed until the New South Wales elections had taken place. That is the most infamous chapter of political gerrymandering with a matter of the most vital concern, the Government finances, that has ever been heard of in the history of this or any other country.
We were then treated to a further spectacle of government ineptitude and cowardice. After the Melbourne conference had disclosed the seriousness of the position, and it had been decided that economy was necessary to save the country financially, the Commonwealth Government said, “ Yes , economy is necessary; we must save this £4,000,000. But first of all we must ask the leaders of the Public Service organizations if they will allow us to take that action”. Then we had the sorry action of Ministers of the Commonwealth calling into conference three gentlemen, whose names were published in the press, and of whom the general public of Australia had not heretofore heard, and asking them, “Will you give us your permission to review the salaries of the public servants of Australia?” The elected representatives of the people of Australia, the Government which is supposed to legislate and administer in the name of Australia, asked the permission of those three obscure gentlemen to do what had already been decided upon as necessary. After some little consideration those gentlemen said, “No, we will not allow you to do it”, and the Ministers responded, “ Very well, we will do as you direct “. Responsible government becomes a mockery and a farce when such tactics are adopted. Singularly enough, the Public Service Associations were not consulted or given a chance to say whether they would be patriotic enough to take their share in the reduction. Only three gentlemen were referred to, and upon their opinion the fate of Australia’s financial position was determined.
Next in order is this most infamous page in the history of this despicable proceeding.
– Certainly not, when applied to persons; but I understand that the right honorable the Leader of the Opposition (Senator Pearce) was referring to an impersonal body. I remind the Leader of the Senate (Senator Daly) that he will have an opportunity to reply to the statement of the Leader of the Opposition.
– But I shall probably not be allowed to reply in similar language.
– As a result of His parliamentary experience the Leader of the Opposition must know that such language is not parliamentary, and I ask him to withdraw the words complained of.
Senator Guthrie interjecting-
– Order! The honorable senator must not speak while I lim giving a ruling. If the Leader of the Opposition has any desire for peaceful discussion he will avoid the use of su’ch terms ais he has been using, seeing that they are objectionable to the Leader ot’ the Senate.
– I withdraw the word “ despicable “ and substitute “ ridiculous.”
It is only. just to Sir Otto Niemeyer that I should incorporate in Hansard a statement he ma’de about the Melbourne conference, because his positron has been misrepresented and he himself vilified. In the Melbourne Argus of the 2$th October last appeared the following: -
SYDNEY, Monday. ‘
An important statement was made to-day by Sir Otto Niemeyer. He said-“ While the election hung in the balance it did not seem .proper for me to make any comment which might be taken to have a bearing on domestic political issues, with which I neither have nor desire to have any concern, but now that those issues have been decided I should Tike to state ca’tegorically the following facts:-
I came to Australia at the invitation of tile Federal ‘Government, arising out of that Government’s having asked the Bank of England for advice in dealing with its maturities. There has never been any question of the Bank of England taking over Australia’s overdrafts in London. It will be obvious that the problem is how to deal with those overdrafts and short debts by issues iii the market. Mr. S. M. Bruce had nothing whatever to do with my coining, of which he no doubt heard foi’ the ‘first time on the day when it was announced by the Australian Prime Minister.
That was one of the fables circulated throughout New South Wales. The statement continues -
Such advice as I have given was given at their request to the members of the Loan Council at Canberra early in August and to the Premiers of the six States and the Commonwealth Prime Minister later iri August at Melbourne. Xt was for these gentlemen to decide whether or hot to accept that advice, and it was they, and not I, who published the statement which I had made io them. The Melbourne agreement was not an agreement with me, but an agreement between the seven Premiers on what they considered to be the best policy to follow in the interests of Australia.
I do not represent either oversea bondholders or British manufacturers, and .1 have never in Austral’i’a discussed the position df either of those bodies of persons. The only institution which I represent is the Bank of England, which has no interest in Australian finance other than a desire to serve the public interest by averting serious financial difficulties. The advice which I have given was based solely on the Consideration of what is in the best interests of all parties and classes iu Australia so far as 25 years of practical experience of public finance enables me to form a ay conclusions on this matter.
I have neither said nor implied that Aus* tralia must be u hewer of wood and a drawer of water for other countries. What I have said is that for a considerable period of years Australian manufactured goods are not likely to play any effective part in her export trade. Australia has a number of serious problems tn face. My reason for writing this statement is the undesirability of time and energy being wasted on a number of irrelevant matters based on incorrect information.
That statement disproves the allegations that were being bandied about New South Wales regarding the agreement which has been described as the Niemeyer agreement.
The next step in this history is the meeting of the Labour party caucus in Canberra after Parliament had been summoned. The caucus rejected holus bolus the economy, (proposals of the Melbourne conference. It -decided that there should be no economies, and that any deficits should be made up by additional taxation. When we analyse the Government’s proposals for economy, we find that a paltry £65,000 is to be saved. In this year of Australia’s .greatest adversity, the expenditure is to be a record!
Now let us see how the States hav* carried ‘Out the Melbourne ‘conference agreement. In the West Australian o’f the S-lst October ‘there is an epitome -of actiontaken by the various States to carry out the resolution of the Melbourne conference. I quote from that report -
New South Wales took the lead before Sir Otto Niemeyer had visited the Commonwealth and before it was realized as generally as it is now that the Australian financial situation was acute. It was in May that the Bavin Government secured the passage of a measure entitled the Public Service Salaries Reduction Bill, the object of which was to reduce by onetwelfth (81/3 per cent.) the salaries of all officers of the Public Service except judges, police, hospital andgaol employees, those engaged in the dredging and navigation services, and married employees receiving £300 a year or less. The measure was to be effective for one year from July 1,and the resultant saving was estimated to be£2,067,000.
All that the Commonwealth proposedwas a reduction of £1,000,000 in expenditure ; but here is one State which saved £2,000,000 on the salaries of its employees. The statement in the West Australian continues -
Before the end of June other emergency legislation had been passed involving a 15 per cent. reduction of the salaries of members of Parliament, a general reversion to the 48-hour week, anda tax of 3d. in the £1 on writings and incomes to provide an unemployment relief fund of £3,000,000.
In Queensland, the Moore Ministry applied to the Arbitration Court for a 10 per cent. reduction in the salaries of certain officers in the Public Service at the turn of the financial year. This application (the effect of which would have been to. save. £561,024 per annum) was refused, and in September a bill was brought down which would have substantially the same effect (a saving, according to Mr. Moore, of £560,000), and this passed. When delivering his budget speech on October 2, the Treasurer (Mr. Barnes) said that reductions in wages and salaries and economies generally would result in a sawing of £966,000.
The population of Queensland is about one-sixth of that of the Commonwealth; yet that State proposes to save almost as much as the Federal Cabinet originally proposed.
SenatorGuthrie. - Sofar the Commonwealth has saved nothing.
SenatorDaly. - There has been a tremendous increase in old-age and invalid pensions.
Victoria a Labour Government is in office. Referring to its efforts to reduce expenditure, the article to which I have referred states -
TheHlogan Government, in Victoria, after having effected departmental economies esti mated tosave £496,000, brought down a budget on 24th September which provided for new taxation to the extent of £552,600. This provided for per centage reduction in public service salaries, beginning at 5 per cent. for salaries below £260 and rising to 20 per cent. for salaries of £1,750 and over. Under these proposals, the Premier’s salary would also lie reduced by18 per cent., other Ministers’ salaries by 14½ per cent., those of members of the Legislative Assembly by 7½ per cent., and those of members of the Legislative Council by 5 per cent. For a full year, the total deductions would amount to £291,267. Those civil servants receiving less than the basic wage were exempt from the operations of the proposed legislation.
In South Australia also there is a Labour Government in power. Its efforts to effect an adjustment are set out in the West Australian in the following terms -
The South Australian budget, delivered by the Treasurer (Mr. Hill, Lab.) on 25th September, proposes drastic measures of economy and increased taxation. Civil servants not covered by industrial awards will have their salaries reduced 10 per cent. by reclassification, and all loan workswill cease at the end of October. The salaries of Ministers will be reduced 15 per cent., and those of members of Parliament 5 per cent., while the Speaker and the President of the Legislative Council will each sacrifice £100 a year. The. salary of the Railways Commissioner is to be reduced from £2,500 to £1,500 a year.
On17th October an award was made by consent, by the Industrial Court of South Australia reducing the salaries of all school teachers by 10 per cent., and deleting the provision for cost of living allowances.
In Tasmania, the McPhee Government has introduced measures providing for a per centage reduction of public service, salaries ranging from 2½ per cent. (married officers receiving less than £260 per annum) to 7½ per cent., and to impose a stamp tax on wages and salaries, of 3d. in the £1.
It will be seen that all the State Parliaments, irrespective of the party in office, have taken action to carry out. the agreement arrived at in Melbourne.
– But not one of them has squared its budget.
– In any action of this kind, the Federal Government should have given a lead to the Governments of the States. If this is indeed the national. Parliament of Australia, the members of the Federal Cabinet should set a lead instead of following behind and “ blacklegging “ and “ scabbing “ on its colleagues in the States. Why have the State Governments all taken steps tocarry out the Melbourne agreement while the Commonwealth Government has failed to do so? Surely, the Commonwealth Government cannot realize the serious condition of Australia’s finances. If it had any sense of its responsibilities, it would not allow the position to drift; nor would it allow three men to dictate to the Government of the Commonwealth
In accordance with a resolution agreed to at the conference in Melbourne, quarterly financial returns, in a form which the public can understand, are being issued. These official returns may be seen at the Commonwealth Treasury. I give the figures as published in the West Australian of the 23rd October. I shall not give details of the revenue and expenditure, but shall content myself with quoting the deficits for the quarter ended September. 1930. They are as under:-
The deficit for the Commonwealth, which should have been the first to attempt to set its house in order, was £6,747,000 for the quarter. The total deficit for the seven governmen ts, Common wealth and State, amounted to £15)90o,W6 for the first quarter of the current financial year. With those figures in its possession, the Commonwealth Government - allegedly a responsible government - allowed caucus to cut down its programme providing for a saving of £4,000,000. and met Parliament without having any proposals for economy to offer ! Then, because it met with some difficulty in caucus, the Senate adjourned for over a week without having done anything.
T now come to what is probably the most tragic note in this tragic history. The Age newspaper of the 7th November, 1030, contained a motion moved by the Minister for Health and Repatriation (Mr. Anstey), at the caucus meeting of the Labour party, which read -
That legislation be passed immediately compelling bondholders in the £27,000,000 loan maturing in December to hold their bonds for a further period of twelve months, interest to be paid as usual, with a proviso that persons in necessitous circumstances may receive immediate payment of small amounts by cash- ing their bonds at the Commonwealth Bank, same to he held as non-interest bearing security, the onus of proving that circumstances justify payment to fall on bondholders.
A further motion moved by the honorable member for Fremantle (Mr. Curtin) read -
That a demand bc made on the Commonwealth Bank Board to underwrite the £27,000,000 loan, failing which, Mr. Anstey’s motion bc put into effect.
Why did the honorable member for Fremantle include Mr. Anstey’s name in the motion?
– That is not the resolution that Mr. Curtin moved.
– The voting in caucus on the motion moved by the Minister for Health and Repatriation waa as follows: -
Ayes: Messrs. McGrath, Anstey, Beasley - a Minister - -Riley, junior and senior, Cusack, Lewis, Nelson–
It is interesting to note that the honorable member for the Northern Territory (Mr. Nelson), who has not a vote in Parliament, can exercise a vote in caucus that may determine the fate of the Commonwealth.
– The honorable member for the Northern Territory represents a very important part, of the Commonwealth.
Senator Sir GEORGE PEARCE Yes, and in. caucus he has a vote which is of equal value to that of the honorable senator, who has a vote in the Senate and who represents an important State. The following also voted with the “ Ayes “ : - Messrs. Long, Rowe, Eldridge, Watkins, Curtin, Holloway, Tully, Culley, Yates, Lazzarini, Lacey, Gibbons, Dooley, and Makin. A total of 22. Those who voted with the “ Noes “ were Messrs. Lyons, Forde, Green, Blakeley, Crouch, Maloney, McTiernan, Chifley, Frost, Price, McNeill, Theodore, Martens, Jones, and Gabb. The absentees were Messrs. Guy, Mathews, Riordan, Keane, Cunningham, Brennan, Scullin, Coleman, Moloney, West, James, Dunn, Rae, Daly, Barnes, Hoare, and O’Halloran.
I now wish to place on record something which was brought out in evidence by the Select Committee on the Central
Reserve Bank Bill, and which is contained in the committee’s interim report. The paragraph reads -
Amongst a very large number of illustrations of the devastating results of a similar set of circumstances in other countries, your committee was referred to the following extract from Kisch and 351kin, page 22, 1030 edition.
The committee was dealing with the question of political control and of note inflation. The paragraph continues -
There can be no question that the power of the Government to force increased loans from ibc Bank of France intensified the depreciation of the franc and contributed to the financial crisis that culminated in 1020. Such extreme abuses of government power are, of course, only possible when a country has ceased to bc on a gold basis. As long as convertibility is maintained the worst evils resulting from government intervention in banking and currency control are avoided. Doubtless the governments which have laboriously dragged themselves out of the morass of intiation will not readily slip back; nevertheless, if the control of the operations of the Central Reserve Banklies directly or indirectly with the Government, it becomes fatally easy for the Government to li nance itself for thi; time by means of book entries, a course which is thu first step towards currency inflation and inconvertibility.
That is exactly what that motion meant. It was an attempt to compel the Commonwealth Bank to do the very thing mentioned in the paragraph which T have just read. All the pious resolutions that may subsequently be passed by caucus will be of no effect. To say that that resolution did not mean what the people and the press of this country said it meant, is all humbug. That is what was meant, and what would have been the inevitable result if the proposal in the resolution of caucus having been conveyed to the Commonwealth Bank, as it was, had been agreed to by the bank. Effect was not given to it, not because of the strength of the Government, but because the Commonwealth Bank would not do what the Government wished. I do not give the Government any .credit for standing up to the caucus in this matter, because it has not done so. Effect has not been given to the motion because such a proposal cannot bc carried out without an amendment of the Commonwealth Bank Act. If action had been taken in the direction referred to by several writers, and the Government could have compelled the Commonwealth Bank
Board to act as suggested, it would immediately have resulted in an inflation of the currency and brought about a deflation of the value of the pound sterling.
Another exhibition of the ineptitude of the Government has been in connexion with the flotation of the conversion loan, which probably is the most important conversion loan that Australia has ever placed. Other conversions have been simple. There has been no difficulty in the matter of floating them; it was only a matter of announcing the terms and the money was made available. This loan is to be converted at a time when the confidence of investors is shaken, when credit has been extended to the limit of safety, and when the amount of money available for almost any investment is small. Yet we have tlie spectacle of the members of the Government trifling with the position, taking part in State elections, wandering all over the country, communicating with the Prime Minister (Mr. Scullin) in Great Britain by wireless telephone, meeting here and there, and not making the necessary arrangements until six weeks before the conversion must take place. This is a most important financial transaction, and, if the conversion is a failure, which I sincerely trust it will not be, the blame must be placed upon the Government. One would think, by the course that has been followed, that it did not wish the loan to be a success. It has displayed ineptitude, it. has been dillydallying and fooling with the position, and has entirely mishandled the most difficult of all conversion loans.
Whilst the Government has refused to adopt any measures for economy, it has introduced taxation proposals which are the cruellest, most inequitable, unfair, and vicious that have ever been presented to Parliament. Lot me give a few figures so that honorable senators will realize the effect of this crushing taxation on income derived from, property, not of the capitalist, not of the wealthy man, but of that deserving section of the community who, through long years, have been saving so that they would not have to ask for an old-age pension in their declining years. This is how this Labour .Government - a democratic government - treats them. The taxation of incomes derived from personal exertion may be studied in the light of the Government’s determination not to reduce the salaries of the federal public servants receiving less than £725 per annum. They are not. to be taxed as these people are to be taxed. A public servant receiving £600 a year will pay only the ordinary income tax, hut a person who by his thrift has made provision for old-age and who is receiving an income of £200 per annum from property and who paid no taxation last, year will, as a result of his investments, this year, pay £21 14s. A person receiving an income of £300 a year, who under the personal exertion rate now pays £6 8s., and who, if he held property, paid £4 4s. last year, will this year have to pay a property rate of £38 18s. On an income of £400 the personal exertion rate this year is £13 2s. ; on property last year it was £10 10s., but the property tax this year is to be £56 6s. These amounts are for federal taxation alone.
– I do not think the honorable senator is intentionally making an inaccurate statement, but the figures which he is quoting are not correct.
Senator Sir GEORGE PEARCE.I shall take them as accurate until the Minister disproves them. On an income of £500 a year the personal exertion rate this year is £20 5s. ; the property rate last year was £18 8s., but this year it is to be £74 5s. That is, of course, in addition to State taxation. These proposals can be regarded only as class taxation to hit that section which, it is thought, does not vote Labour, and to protect those who do support the Labour party.It is a purely political move which will have a boomerang effect. While these proposals will seriously affect that section which the Government wishes to reach they will also seriously hit another class - the wage-earners. The effect will be to increase unemployment in this country to a tremendous degree. They will kill investments, and preventpeople from investing money in industry. Unemployment, which has increased from 12 per cent. to 20 per cent. during the twelve months this Government has been in office, will still further increase.
It is said that wars have been responsible for some of the greatest of national poetry and music. A poem which appeared in the Melbourne Herald puts into poetic language a thought that should be in the mind of every true Australian to-day. It places the nation before party, and the interests of one’s country before political interests. It is based on a statement by the Acting Treasurer (Mr. Lyons) who said: -
I will not put such a proposition to the country, even if I have to retire from political life. It is simply repudiation. If Mr. Scull in wants such a thing it is up to him to got some one else.I will not do it.
The poem reads -
(By C. J. Dennis). “Haul down the country’s flag!” they said,
Haul down our flag, and, in its stead,
Break this, the banner of our shame,
That to the world Australia’s name
Be e’er disgraced.
We are too weak to hold the right;
We are too weary of the fight,
The heat, the burden of the day;
Then ! Let us tread the coward’ s way
Honour debased. “ What tho’ this starry flag has flown
Proud o’er this land we call our own;
Flown o’er grim fields where men have bled,
The winding sheet of glorious dead?
Now let it drag
Thro’ mire because we fear the cost,
Because we count the battle lost -
We who would take the craven way
To win brief respite for a day.
Haul down the flag!”
So have they spoken; who would stand
To represent a stricken land
And strive to lead the people’s voice
To utter such a shameful choice,
And be the scorn
Of nations thro’ the coming years . . .
Yet are we, too, so filled with fears
That even now dishonour seems
Fit price to pay for shattered dreams
Of Hope’s bright morn.
Surely we’ve hope in leaders yet;
Surely this land shall not forget
All that this flag of ours stood for
Thro’ days of peace, thro’ days of war.
Tobe our pride.
And when the people, put to test,
Win freedom, surely they shall wrest
The staff from out these weakling hands
And show the world Australia stands
On Honour’s side.
– I cannot allow the motion to pass without astrong protest against the action of the Government in regard to a number of important matters. The Leader of the Opposition (Senator Pearce), has referred to the many negotiations between the Government and its supporters relating to the present crisis, andhas emphasized the vacillation of the Labour party in regard to its financial policy and its promises. Apparently, its policy is changed from day to day. Not so long ago, the ex-Treasurer (Mr. Theodore) promised that if Labour were returned to power the coal mines in Now South Wales, which were then closed down, would be re-opened within a fortnight. Supporters of this Government declared that it would solve the unemployment problem; but these, like many other promises made by the Labour party, have not been fulfilled. Instead of doing anything of a practical nature to bring about relief, the measures which it has introduced have had the effect of enormously increasing unemployment throughout the Commonwealth. The following paragraph, which appeared in the Industrial Australian and Mining Standard of the 2nd October, 1930, sets out the position clearly : -
The following figures, taken from the Quarterly Summary of Australian Statistics, issued by the Commonwealth Statistician, show the increase in unemployment amongst members of trade unions during the year 1929 and the first two quarters of 1930. The figures do not include persons out of work through strikes or lockouts, nor do they include persons who are working part time: -
Since that date unemployment has become even more serious.
– The percentage of unemployed has now risen to 20.5 per cent.
– That is right; unemployment is increasing.
– During the last election campaign supporters of the Labour party urged that the adoption of Labour’s policy would mean an increase in employment throughout Australia. Recent happenings do not support that statement. The new taxation now being imposed upon all business undertakings will undoubtedly lead to an extension of unemployment. Employees are being discharged on every hand, because employers are unable to meet the tremendous charges laid upon them by this Government. The steady decline in the prices received for our exportable primary products is another factor. This Government has done nothing to relieve industry. During the last session of this Parliament the parties in opposition in another House submitted definite suggestions for reduction in governmental expenditure, but they were summarily rejected. This Government’s proposals are set out on page 11 of the financial statement which is now before the Senate. Summarized, they are as follows: -
This new taxation must have an injurious effect upon business generally. The Government carefully refrained from asking sacrifices of its supporters, but, apparently, it singled out industry to bear the greatest portion of the new burden. In this respect, its proposals are absolutely class taxation, but, unfortunately, they will react upon the workers, who will suffer severely in the end. The Treasurer states further -
As previously stated, it is not possible to estimate with any degree of reliability what the deficit on the existing budget would be if the position were allowed to drift. With the restoration of confidence-
What prospect is there of any restoration of confidence in. the business community in the face of this crushing taxation? - and revival of trade, it is quite likely that the deficit would be somewhere in the neighbourhood of £8,000,000 or £10,000,000. The” proposals now submitted provide for an annual benefit to the budget of £8,000,000, of which £6,880,000 should be actually reflected in the accounts of this year.
Let us examine the position of some of the companies, whose difficulties were serious enough before this new taxation was adopted by the Government. The Adelaide Advertiser of the 19th September, 1930. publishes the following information relating to the position of seventeen well-known companies doing business in that city: -
£10,000,000 in Seventeen Companies.
How Wealth has Melted. adelaideshareholdersmakesacrifice.
Few people have any conception of the losses already sustained by what is loosely called capital as a result of the present depression. Union spokesmen have asserted passionately that workers will not consent to be singled out for sacrifice. In the article below they will discover that enormous sacrifices have already been made by others.
Investors in seventeen of the most popular companies listed on the Adelaide Stock Exchange have lost more than £10,000,000 in the last two years.
In one case, a man who retired at65 with investments, the result of thrift, which returned him £650 a year, now draws an income in dividends of only £120.
In order to ascertain the extent of the sacrifice that investors have made, a representative of the Advertiser compared present Stock Exchange prices of shares with those ruling in 1928. The 1930 figures in the accompanying table are taken from actual sales in the lust two months or are at buyers’ quotations. Those for 1928 are the official Stock Exchange quotations between July and October -
That is what so-called capital has had to sacrifice. Yet, according to a telegram received from Darwin, the unemployed there, who were asked to clean gutters as relief work, would not do it under the rate of 23s. odd a day, and there are still men working on the go-slow policy, and workers who take up the attitude that they are the only persons who are sharing in the general depression. I do not think that the people of Australiaproperly realize what they are up against. There has been a drop of about £90,000,000 a year in our national income. Our exports in wheat and wool are valued at about £150,000,000, and there has been a drop in the price of wheat of a little over one-half, and in the value of wool of considerably over one-half. There is also loan money from overseas to the tune of £22,000,000 a year which we shall not receive in future. I estimate the drop in the national income at £90,000,000; others estimate it at £100,000,000. It means £90,000,000 less for the people of Australia to live on. For a population of 6,000,000, it means an annual loss of £15 per head, or £75 for a family of five.
I have been asked what is the way out. Some of our friends opposite think that a little inflation will not do us any harm. I am strongly and bitterly opposed to any policy of inflation by which the cost of goods would rise even higher than it is to-day. But if wages were halved and the cost of goods were halved, the working man to-day would be no worse off. The effective wage would be just about the same. I am not advocating a reduced standard of living; in fact, I do not think that at the present stage it is, or will be, necessary, so long as the working man and others give a decent output for the money they receive. But if the cost of goods were halved, the position of the man on the land, on whom Australia is dependent, would be altogether different. Years ago, with wheat at 3s. 6d. a bushel or less, and with wool about 9d. or10d. per lb., ho made his farm pay. He cannot do so to-day at those prices, because the cost of production is almost double what it was when those prices ruled. Already in South Australia a large number of men on the land have gone insolvent, and if costs of production remain as they are, and the prices for produce still remain low, a great many more of them will go insolvent. What will that mean? Already the storekeepers have financed these men up to the hilt, and if a few farmers fail - it will not take very many of them to do it - the local storekeepers will go down. I may be called a Jonah, but I see catastrophe ahead. Knowing the position of the man on the land to-day, I should be failing in my duty if I did not speak plainly. If the local storekeepers go insolvent, many wholesale houses in Adelaide will fail.
– Does the honorable senator blame the Government because local storekeepers go insolvent?
– I blame the Government for increasing the burden of the farmer by imposing exorbitant tariffs and embargoes. Although the nominal wage to-day is practically double what it was years ago, the effective wage is practically no higher. Since the visit of Sir Otto Niemeyer, statistics have been published showing that, allowing for the unemployed, the worker to-day is actually getting less in effective wage than he was years ago, when the nominal wage was very low. But owing to high wages and high costs, the farmers and graziers cannot carry on. Nor can many men in business. They are sacking their employees, and more and more men are being thrown out of work. The remedy is not inflation, but a decrease in wages with which, of course, there must be a corresponding reduction in costs. The trouble is that the cost of goods cannot fall while we have prohibitive tariffs and embargoes.
– Would not the honorable senator like this country to be selfcontained?
– Yes, and if the cost of production is brought down, Australia will be able to export manufactured goods, which it cannot do at the present time. Its export of manufactured goods does nor now exceed £4,000,000. I know that I shall be expected to indicate what would happen to the exchange position if tariff embargoes and prohibitive duties were removed. When a country finds that its imports are greater than its exports, its batiks raise the rate of exchange. The effect of this is to make the cost of imported goods a little higher, and that in turn means that just a little less goods are being imported by the people of that country. It also means that exports are stimulated by a premium and a little more exportation goes on with the result that the adverse trade balance is rectified in an economical and proper way. That course is followed in every country in the world, except Australia, at the present time. Every week the exchange rates are published in London newspapers. If Australia’s exchange rate had been raised at the proper time, our adverse trade position would not have been so bad as it is. But what happened in Australia? I understand that the present Government has approached the banks and asked them to peg the rate of exchange, instead of allowing it to operate in anormal manner. But first of all it rushed in with tariff embargoes and prohibitions, using artificial means where ordinary means should have been adopted.
– Why did not the previous Government, which the honorable senator supported, do what he advocates ?
– The ordinary law of exchange was in full operation when the previous Government was in office.
– I understand that the bank rate has not been pegged until recently. What has been the effect of the prohibitive tariff and embargoes? Manufacturers have had as big an opportunity to profiteer as they had during war time. I quote the following from Smith’s Weekly of the 9th August last: -
Home Buyer is Penalized by New Extortion of Higher Prices.
After Glass Distributors Limited began to operate in New South Wales in April, 1929, the trade prices of plate, sheet, and leadlight glass were raised in varying degree, from 12½ to 40 percent.
This year an almost prohibitive tariff of 2d. per lb. has been placed on imported sheet glass by the Scullin schedule. The reply of Glass Distributors Limited, has been to raise prices again, by1d. to 4d. per square foot, at which increased rates the trade will dispose of abnormally large stocks which are now held. Manufacture of Australian glass is simultaneously delayed.
– I do not know the exact rate, but a prohibitive tariff was imposed. This combine brought glass to. Australia and had large stocks on hand when the prohibitive duty was imposed. It has not made one sheet in Australia, but it has raised the price of glass by 4d. per square foot, and has bled the people of Australia for hundreds of thousands of pounds. The Labour party hasplayed into the hands of profiteers, combines and monopolies; yet it goes to the’ working man and says, “ We are looking after you, “I was fortunate enough to listen to an address given by Professor Gregory at the Adelaide University, and have here a copy of the Adelaide Advertiser, of the 12th September last, which contains a report of the lecture. The introduction reads-
The suggestion that a little inflation may not be a bad thing for Australia is dealt with in this the fourth section of Professor Gregory’s lecture. The three other sections have already been published.
Professor Gregory is reported as having said -
Ihope I may say one thing perfectly frankly to an Australian audience. Since I have been in this country, which is not so very long, I have noticed a distinct tendency to argue that a little amount of local inflation would not do Australia very much harm. I hope I may be permitted to say at least this about Australian problems, that local inflation in Australia will not help Australia in the very least.
The professor then pictured what happened in Germany and other countries which had indulged in inflation.
SenatorO’Halloran. - He also said that grave danger attached to deflation.
– I do not remember that. I know that with inflation somebody in Australia is going to be hurt. Unless costs of production are considerably decreased, we shall be precipitated into a financial catastrophe, which will bear most heavily upon our farmers. It will be admitted that I know what. I am talking about when I refer to their position. The country storekeepers and the people of Australia, generally, will behurt a good deal more by inflation than by deflation.
– In what way does the honorable senator propose to reduce the costs of production?
– As a beginning. I suggest that our prohibitive tariffs and embargoes be removed.
– And the monopolies, too.
– Yes. The Bruce-Page Government instigated an economic inquiry into the Australian tariff, by Messrs. Brigden, Copland, Dyason, Giblin, and Wickens, and those gentlemen found that the increased cost of goods to which we were subjected by reason of our excessive tariff protection amounted to £36,000,000 per annum, the proportion due to the extra cost on goods manufactured in Australia amounting to no less than £26,000,000. In my opinion, that is a conservative estimate.
– Those gentlemen also pointed out a corresponding benefit to primary industry as a result of that policy.
– They pointed out that the major portion of the load was passed on to the primary industries.
SenatorO’Halloran. - The honorable senator is wrong there.
– I ask Senator O’Halloran to cease interjecting. He will have an opportunity to reply later.
– In my opinion i nflation is undesirable. The salvation of Australia lies in the reduction of costs. Unless that is effected our farmers and storekeepers will be penalized, and in turn the inhabitants of the cities will be hurt. Every business man who goes bankrupt will have to sack his employees, and eventually the working man will be the worst sufferer. I may be called a pessimist; but I plead the urgency of the necessity to decrease costs as an excuse for my earnestness.
– Before dealing in detail with the contents of thefinancial statement, I direct attention to the contents of its first paragraph. In view of the persistent attacks upon the Bruce-Page Government for its alleged financial maladministration, that, paragraph is extraordinary. It reads -
In the course of his budget speech in July last, the Prime Minister referred to the deficits of the preceding three years, which at 30th June, 1930, had accumulated to £6,438,723.
Included in that sum must be the proportionate deficit that has accumulated during the regime of the Scullin Administration, from October, 1929, to June, 1930, probably amounting to £.1,000,000.I next refer honorable senators to the following paragraph, which appears at page 9: -
In the seven years since the establishment of the National Debt Sinking Fund, a total of £43,727,921 has been provided for the redemption of Commonwealth debt. This sum is £14,000,000 in excess of the amount required in that period under a sinking fund scheme designed to pay off post office debt in 30 years and other debt in 50 years.
This Government proposes to withdraw from the National Debt Sinking Fund the amount which, it claims, was paid in excess of that necessary to meet the ordinary requirements of the position. It admits that the Bruce-Page Government paid into the fund £14,000,000 in excess of what it need have done. Bear in mind that the total accumulated Commonwealth deficit to the 30th June last was £6,458,723, of which £5,000,000 may be attributable to the Bruce-Page
Government. Surely the action of that Government was commendable. It endeavoured to reduce our enormous debt as far as possible, and thereby relieved the people of Australia of a considerable amount of annual interest which otherwise must have been found by additional taxation.
SenatorRae. - The honorable senator knows that the Bruce-Page Government borrowed more than it repaid.
– The admission in this financial statement exonerates the Bruce-Page Government for all time from any charge of extravagant administration. It indicates that, though it accumulated a deficit of £5,000,000, it placed into our National Debt Sinking Fund an unnecessary amount of £14,000,000. Had it followed the procedure of this Government it would have left a surplus of £9,000,000, instead of a deficit.
– Actually it had a deficit of over £12,000,000, as there was a surplus of £7,000,000 when it assumed office.
– Even if I granted that, it would still leave the Bruce-Page Government with a surplus of £2,000,000.
– But that Government increased its debt abroad by a very considerable sum.
– I have never heard any member of this chamber or another place object to the borrowing of money in order to carry out public utilities. Would any honorable senator opposite have the audacity to level a charge of extravagance against the Bruce-Page Government for concentrating upon the post office, telephone, telegraph, and similar public utilities? No. Rather, that Government should be commended for its enterprise.
I have exposed the hollowness of the case advanced by the members of this Government. The. facts are apparent to all who are prepared to read.
Everybody recognizes that a. review of the financial position of Australia . is necessary. One can only regret that the country has come to its present state - financially, commercially, and industrially. I hoped that, when the Government had attended to the 101 minor details that required its attention after assuming office, it would get down to the Larger and more important matters, and submit, to Parliament sane and wise proposals to meet the contingencies that have arisen. One has to remember that prior to the general election of last year, the supporters of the Labour party promised that if the people, in their wisdom, would only return them to power, they would in a very short period do many wonderful things. First of all, they would partially, if not wholly, solve the great problem of unemployment. Secondly, with the imposition of additional customs duties, industry would so revive that prosperity would soon return. Even, their political opponents felt that there might be something to justify those promises; but experience has proved definitely that the only object in making them was to secure votes at any price. Recently, in New South. Wales, there has been a repetition of these tactics, As has been already pointed out by the Leader of the Opposition (Senator Pearce), the Commonwealth Government subordinated the best interests of Australia to the gaining of a party advantage in Sow South Wales. The Labour party made promises which it knew could not be fulfilled; but it was prepared to make almost any promise in order to secure the reins of Government. It told the electors that the return of a Labour Government would reduce unemployment. That promise has not been realized, for since October, 1929, when the present Government assumed office, the percentage of unemployed unionists has risen from 8.2 per cent, to 20.5 per cent.
– Does the honorable senator feel very indignant about these things?
– I feel indignant that so large a proportion of our politicians should be intent on gaining a party advantage at the expense of Australia. Never previously in the history of Australia have the interests of the people been so subordinated to the interests of a party. Desperate diseases require desperate remedies; but the Government has made no attempt to find an effective remedy for our serious economic position. Indeed, since the present Government assumed office, the position has gradually become worse.
– Will the honorable senator tell us what desperate remedies he proposes?
– I shall mention some of the remedies proposed by the Government. One of. them can only be likened to a. patent medicine of the worst, type - I refer to the tariff policy of the present Government.
– That is not medicine; it is poison.
– The fiscal policy of the Government has made the position far worse than it was.
– The Government’s tariff proposals were in the nature of an emetic - to make the people pay up.
– The effect has been to make almost every house in Australia vomit hundreds of employees.
– Do the honorable senator’s remarks apply to the tariff on Tasmanian timber?
– They apply to Australia generally; I am dealing with tills matter from a national point of view. I know whereof I speak, because I have made it my business to mix with employers of labour both large and small. They all tell me the same thing - that they have reduced their staffs because of the effect of the tariff. One patent medicine on the market is said to be of such a nature that if I were to take it I should feel like a youth of 21 years of age. But the reaction would be terrible. The effect of the tariff on hosiery has been like a dose of that patent medicine. When the higher duties were imposed, thousands of small investors in Australia invested their savings in companies formed for the purpose of manufacturing hosiery. New factories sprang up like mushrooms. But after the first dose or two, a reaction set in. Factory after factory closed its doors, with the result that hundreds of operatives were thrown out of employment. In. one district alone 300 employees were dismissed wilh in a short period. One large factory in Sydney went into liquidation, and its product, the mill price of which was 48s. a dozen, was sold in Melbourne for 2s. a pair retail. The output of those new factories was sufficient for a population of 20,000,000 people. Unfortunately, the cost of production was so high that their goods could not compete in the markets of the world. It was urged that British manufacturers still had the advantage of a preferential tariff; but, in fact, the duties imposed by the Government amounted to a prohibition.
– What would happen to this country if there were no tariff at all?
– When a fitting opportunity occurs I shall be prepared to debate that subject with the honorable senator.
Referring to the iniquitous tax on imported window glass, Senator Chapman said that the Government had become the tool of a wealthy corporation. Previously, there was a deferred duty on window glass, which was not to operate until Australian manufacturers were able to produce a reasonable proportion of Australia’s glass requirements. Although the Government knew that Australian merchants had in stock supplies of window glass sufficient for twelve months, and possibly two years, it issued a proclamation which made the deferred duty immediately operative. Since that time no window glass has been imported. As a. result of that action, growers of tomatoes who required glass for raising tomatoes early in the season had to pay £1 a case more for the glass they required.
– The Government encourages monopolies.
– That is so; it injures the very people whose interest it professes to serve. It would appear that the Government lends its ear willingly to every specious plea made by certain Australian manufacturers. Before the deferred duty became operative, the chairman of the Australian glass manufacturing company stated that there was sufficient glass in Australia for many months ahead, and that there was no possibility of his company manufacturing glass for a year. The Government must have known that that was so.
– Is any window glass manufactured in Australia to-day?
– Then the duty was obtained under false pretences.
– I desire to read the following newspaper report ofa state ment by Mr. Ralph as to the effect of the tariff:-
Local Overproduction. “ Government Protection Mad.” “’ There has never been a, time in the history of the wholesale warehouse trade of Australia when it has been so necessary, as it is at present, to have some organization to bring the warehouses together for their own protection, and particularly does this relate to the softgoods warehouses,” said Mr. A. W. Ralph, the chairman of the softgoods (wholesale) section of the Chamber of Commerce at the annual meeting yesterday.
Ever since federation, said Mr. Ralph, there had been no sense of security or stability in the trade, and from time to time there had been such interruption by successive changes and increases in the tariff that any continuity of policy had been practically impossible. Today the Government seemed to have gone protection mad, and duties were being levied to prohibit the importation of many goods, thus necessitating the closing down of many departments, and adding to general unemployment. The Government stated that one of its” intentions was to encourage local industries; but was it not clear that that was being overdone, bringing about overproduction, and at the same time injuring primary industries? Before and shortly after federation several woollen mills wore opened, and fora time they produced blankets and flannels on a profitable basis. Gradually, however, encouraged by higher customs duties, their number increased. To-day there was such overproduction in blankets and flannels that practically all of the mills were working short time. Probably any five of the existing mills working at full pressure could make all the blankets and flannels required in Australia. Exactly the same thing had happened with tweeds. “ Not one piece of tweed could be exported, and the mills were closing down or working short time. That also applied to the, boot and shoe industry. Duties on hosiery goods had recently been increased to a prohibitive extent, and already hosiery mills were being established onall sides, some of them on an immense scale. It was not possible to export one pair of socks or stockingsat a profit, and many of these mills would close down and go out of business. These mills wore drawing thousands of young girls from the country to the cities, and men on ships, wharves, and in the shipping offices and warehouses were being thrown out of work.
Before dealing in detail with some of the financial proposals of the Government, I should like to read the following paragraph which appeared in the Sydney Morning Herald: -
Mr. Fenton’s own statements are explicit. On 20th September, the press of Australia published his statement, after a mouth’s reconsideration of the budget proposals - “With all our reductions, there must be further taxation. We are not going to put any further burden on industry. We want industry to expand, so that employment may be found.” On 26th September he declared - “ We must have regard to the position of the States. We are taxing the same sets of people, and, naturally, State budgets must be considered. This is becoming more necessary than ever before.” Next day the press were allowed to state that there would be a reduction of 10 per cent. in Public Service salaries, and that Mr. Scullin, “ in almost constant communication “ with Cabinet, had approved. On 3rd October, Mr. Fenton stated officially that the new budget proposals had been approved by Cabinet, and “ it was agreed that expenditure must be reduced at the rate of £ 4,000,000 a year. The recent decline in market prices of government stocks shows fears that are quite unwarranted, and the Government fully recognizes that these fears must be removed at once. The Government, therefore, takes this opportunity of notifying the public that the proposals will include reductions and economics in expenditure at the rate of £4,000,000 a year.” Mr. Scullin, it was again announced, had approved. It was this endeavour to fulfil the explicit pledge given at the Melbourne conference which caucus at the end of October overthrew. Mr. Fenton yielded. He has broken that pledge, and he has outrageously abandoned his con fi rmatory statements in reassurance of the public. Is it any wonder that the Government’s credit is paralysed? It is to be hoped thatParl iament will reject the overwhelming taxation proposals substituted weakly for that thrice-affirmed undertaking that expenditure would first bo drastically reduced.
That puts the position in a nutshell.
I should now like toquote the following paragraph appearing atthe commencement of the financial statement presented to Parliament by the Acting Treasurer (Mr. Lyons) : -
In the course of his budget speech in July last, the Prime Minister referred to the deficits of the preceding three years, which at the 30th June, 1930, had accumulated to £6,458,723. He budgeted to balance the accounts of the present year, but said that, in view of depleted revenues, no additional taxation wouldbe raised tins year to reduce the deficit.
The Prime Minister (Mr. Scullin) recognizing the depleted revenues definitely stated that no additional taxation would be imposed by the Government. Apparently he was t hen of the opinion that the position would have to be met by considerably reducing expenditure. Beading that statement in conjunction with the rest of the financial document, we are now considering, one begins to wonder how often in the course ofa year the leopard will change its spots.
It will be admitted by a majority of the Australian people that the taxation proposals of the Government are the most cruel and iniquitous that have ever been submitted to any Australian Parliament. According to the Acting Treasurer(Mr. Lyons)there are approximately 33,000 publicservants. TheGovernment coolly proposes to impose, in addition to the already heavy income tax now paid plus an increase of 15 per cent. this year, a special tax which will be so burdensome that it cannot be regarded as other than iniquitous. According to the information supplied, there are 312 public servants receiving from £725 to £1,000 a year from whom the tax proposed to be extorted will amount to £21,580. Those in receipt of incomes ranging from £1,001 to £1,500 number only 98, from whom £14,223 will be collected, while from those in receipt of over £1,500 a year, numbering only 31, it is proposed to collect £9,632. From the 441 public servants who will nave to pay this extra tax, as well as the additional tax I have already mentioned, no less than £45,435, or an average of £103 each, will be collected. The number of public servants on whom this special tax is to be imposed represents only 1.33 per cent.of the Public Service, while 98.67 per cent. will not be touched. Notwithstanding the statement of the Acting Prime Minister (Mr.Fenton), that there would be an all-round reduction in salaries of public servants-
– The press was so informed.
– By whom? The information may have come from the Leader of the Opposition.
– Does the Minister say that the press was not informed that in the Government’s proposals there would be no inequalities in the matter of wage reduction ?
– I say quite definitely that the Government did not make any such statement concerning public servants’ salaries.
– Did the Government come to a decision?
– The point I wish to make is that it is iniquitous for any government to impose a special tax of £45,000 upon 1.33 per cent, of the Public Service, and allow the remaining 98.67 per cent, to be free from any such impost.
The Leader of the Opposition stated that certain representatives of the Public Service met the Acting Prime Minister and Acting Treasurer, who asked them if they would consent to any reduction. They replied, “ Certainly not.” Consequently no reduction in their salaries or wages was made. It is clear that the best interests of Australia have again been subordinated to an endeavour to gain party advantage. Prior to the general election last year public servants were requested by public advertisement, inserted by representatives of the Public Service organizations, to vote for the Labour party. Possibly the fact that such a course may be followed at the next election has had some effect upon the Government in amending its proposals concerning a reduction in public service salaries. The public has to provide the salaries of public officers. A section of the people .is heavily taxed so that the present rate of pay and a high standard of living for public servants, except one small section, may be maintained, while thousands of people in Australia have no standard of living at all. I have already quoted from, the Prime Minister’s budget statement, in which he ‘refers to equality of sacrifice, and I have before me a similar statement by the Acting Prime Minister. ‘Do the proposals of the Government embody anything that can be regarded as equality of sacrifices?
I now wish to read a printed circular which confirms what I have said with respect to political pressure brought to bear upon this Government, and which shows that certain advantages are expected by a section of the community. It is headed “ The Non-official Postal Employees Union of Australia,” and states that this form of application is sent to the person to whom it is directed, so that, he may become a member of a union. It is signed by the secretary, whose name I shall give shortly. A portion of this circular reads -
I .hold a pledge from the Federal Labour party that they will give favorable and sympathetic consideration to any matter placed before them by this union. The Federal Government has expressed their intention qf granting preference to unionists, therefore they are giving loyal supporters every chance to como together and express their views as a well united organization should . . .
– What has that to do with the present position?
– It indicates why only one section of the Public Service is called upon to bear most of the burdens of the Government’s economy proposals.
– To what organization is the honorable senator referring ?
– 1 am quoting from a circular issued by the Non-Official Postal Employees Union of Australia, and the secretary’s name is John T. Callaghan.
This afternoon certain figures were given to illustrate the extent to which the Government proposes to tax persons with small incomes from investments in companies. These people, in my opinion, are deserving of every consideration at the hands of any government. They are really the backbone of Australia. We may be sure that they all gave of their best to their employers during their working lifetime, and, being thrifty, they invested their savings in trading companies or other enterprises so as to provide for their old age. And yet they are to be crucified under the Government’s newtaxation scheme. This enormously in- . creased taxation upon their thrift would not have been necessary if the Government had honoured the pledge given by the Prime Minister (Mr. Scullin) at the Melbourne conference that substantial reductions would be made in governmental expenditure. The great majority of the shareholders in the various trading companies throughout Australia are people of comparatively small means. Recently, the chairman of the Electrolytic Zinc Company, in Tasmania, in an analysis of the list of 9,560 shareholders in that company, showed that the average holding was 230 shares. Of the total number of shareholders, 2,892, or 30 per cent, held 50 shares or less; 5,195, or 54 per cent., held 10,0 shar.es or less; 6,984, or 73 .per cent, held 200 shares or less, and only 292 persons, or 3 per cent;., held over 1,000 shares. I am’ convinced that a similar analysis of the share lists of practically all the trading companies and! large commercial enterprises throughout Australia will show the shareholders to be in much the same proportion. I feel sure that honorable senators supporting the Government have an entirely wrong conception of the composition of these trading companies, otherwise’ they would be reluctant to impose such heavy additional taxation upon hundreds of thousands of small investors, , and threaten them with insolvency.
– The Government is not anxious to tax any one.
– As a result of its careful administration of the finances, the Bruce-Page Government found it possible, from year to year, to raise the exemption in the income tax, until to-day no person with a taxable income of less than £300 is called upon to pay federal taxation on income. Honorable senators who are now supporting this Ministry secretly applauded the Bruce-Page Government for its action in this respect, but refrained from giving utterance to any words of commendation because they were unwilling to give any credit to the political party then in power.
– We are paying for it to-day.
– If the Minister had been a member of this chamber during the regime of the Bruce-Page Government he, like other members of the Labour party, would have supported any attempt to increase the income tax exemption. The federal income tax, as we all know, was imposed originally for the purpose of meeting our obligations in connexion with war. That burden has been particularly heavy. Up to the end of June last the cost of the war to Australia had reached the enormous sum of £744,662,409. The Government and its supporters conveniently forget that the Nationalist Government paid £371,200,85S out of revenue towards war expenditure. This was an astonishing record for a population of only 6,000,000, and it proved conclusively that the affairs of this country were managed wisely during that critical period. If the Labour party had been in power, and if it had subscribed to the doctrine which now seems to find favour with its supporters, instead of meeting any portion of war expenditure out of revenue, it would have passed it on to posterity.
– The Nationalist Government also paid £45,000,000 off the war debt since the war.
– I have quoted these figures to disprove the statements of Labour supporters concerning the finance administration of the Bruce-Page Government. Actually, those allegations are entirely without foundation.- Figures contained in the financial statement just presented by Mr. Lyons show that the Nationalist Government served Australia well by contributing more than the amount legally necessary for the liquidation of the national debt within the period fixed originally. If this had not been done; if instead of making additional contributions to the sinking fund the revenue had been devoted to administrative expenditure, instead of disclosing a deficit during the last two years of its administration, the Bruce-Page Government would have been able to show a surplus of several millions of pounds.
Sitting suspended from 6.15 to 8 p.m.
Private business taking precedence after S p.m.,
Debate resumed from 3rd July (vide page 3624), on motion by Senator Carroll - r
That the Senate strongly advocates the encouragement of increased intra-empire trade and the development of the ideal of empire economic unity, and considers that the most effective means which can immediately be employed towards that end is the adoption of a comprehensive system of reciprocal preference calculated to preserve and expand the particular and essential industries of each section of the Empire, upon which the prosperity of all depends.
– Almost immediately after placing this motion on the notice-paper, Senator R. D. Elliott had to proceed to the other side of the world, and he left it in my hands to deal with in his absence. Being somewhat tender-hearted, on several occasions I yielded to requests that government business and other private business should be given precedence, and so the motion is in the position in which we find it to-day. It has been moved by me, but I have not spoken to it. As
Senator R. D. Elliott lias now returned from the heart of the Empire, where he has been closely associated with others in the consideration of this question, I do not intend to say very much in recommending the motion to the Senate. I shall leave the matter in the hands of the honorable senator who first gave notice of it.
If ever there was a time in the history of the Empire when reciprocal trade within the Empire should be fostered, in the interest of both the Homeland and the dominions, it is now. I am satisfied that if the Senate carries this motion to-night, and the news is cabled to the Old Country, it will have a very good effect on the negotiations in which our Prime Minister (Mr. Scullin) is now engaged, and do him and Australia an immense amount of good. We cannot shut our eyes to the fact that Australia must live on its exportable products, and we are painfully aware that one market after another in the outside world is being effectively closed against Australian products. This, in my opinion, is a result of our tariff treatment of other nations. It is absolutely essential to our national life that we should find markets for our products, and it is our bounden duty to make every effort to foster an increase of trade within the Empire.
There has been a good deal of talk of the preference we give to Great Britain, but, unfortunately, it is given in such a way that it is not of as much value to the manufacturers and traders of that country as it might otherwise be. We put up a tariff wall of an extreme height against the whole world, and then we leave a tiny little gap perhaps four or five inches lower and mark it “ the British preferential gap “.
– Did the honorable senator hear Senator Greene’s speech on the subject of preference?
– I did not have the pleasure of hearing Senator Greene’s speech on that subject, but with all due regard to the honorable senator, who, I know,, is a great authority .on tariff matters, he and I do not see eye to eye on those matters. His views and . mine are very wide apart. Undoubtedly, there is a, preference to Great Britain, but the figures of our groundwork are so high before preference starts that it is not nearly so good to our kith and kin in the Old Country as it ought to be.
– Does the honorable senator know how many articles are absolutely free so far as Great Britain is concerned ?
– There are quite a number ; but it is no great credit to us that we keep free those articles which we are absolutely incapable of making ourselves, and a duty on which would only be a tremendous burden on our own people.
– But we shut out the foreign producers.
– -To a small extent; perhaps to an average of about 10 per cent. If the Senate wishes to do a great service to Australia and the Empire at the present moment, and to be of immense assistance to Mr. Scullin in Great Britain, it will pass this motion.
.- I thank Senator Carroll for having taken charge of this motion during the last six months, and I am indeed glad to learn, even from his own mouth, that he is tender-hearted. I agree with him that, if the Senate passes this motion to-night, it will do a great deal to dissipate the thought that prevails throughout the United Kingdom to-day that Australia will have nothing to do with preferential trade. The argument, I know, has very little foundation; but there are many enemies to the unity of the British Empire, and the use of it is one way in which they are trying to prevent the people of Great Britain from adopting the principle of closer Empire economic unity. We have only to look back upon the proceedings of the Imperial Conferences to find that this principle has long been advocated. Mr. Alfred Deakin advocated it enthusiastically. His example was followed by other Prime Ministers, including Mr. Hughes, and Mr. Bruce, and during the last two months Mr. Scullin has been an advocate of Imperial preference, particularly at the Imperial Conference now just about to conclude.
Senator Carroll has referred to the difficulties through which we are passing. I think we are all conscious that we arc in difficult times; but my feeling is that the difficulties are no greater than we deserve.For a long time we have been disregarding the fact that we are part of the world, and I think we are now beginning to realize that Australians are not the super men we thought we were, and that we have to adapt ourselves to the economic conditions of the world of which we are part. I feel that we are our own worst enemies. A visit to Great Britain will convince any one that that is so. If you take up the morning newspapers you find the news that is sent from Australia to the other side of the world is largely of a damaging character. The gentleman who floats the Australian loans in London told me that he was never comfortable until he had opened the morning newspapers and seen what damaging news we Australians had sent to the Old Country regarding ourselves. Australians who happen to be on the other side of the world are able to interpret the news; but the people overseas are not, and they are very apt to judge us by the extreme views that appear in the daily press of the Old Country.
– There should be a censorship of cabled news.
SenatorR. D. ELLIOTT.- Be that as it may, I hold that we are our own worst enemies. As the Australian returning to Australia approaches Fremantle, the first news he receives is probably a wireless account of the discussion on the repudiation of debts. Australians on board ship try to take no notice, but they cannot help feeling very self conscious alongside visitors to our shores. As the vessel gets close to Fremantle a notice is posted at the ship barber’s shop, the source of all requirements on board ship, to the following effect -
Australian Customs Tariff. On arrival at Fremantle and during the stay on the Australian coast, the prices of all articles sold in the barber’s shop, other than of Australian origin will be increased by 100 per cent. Goods of Australian origin will be increased by 5 per cent.
Australian goods are therefore cheaper outside the three-mile limit, but the notice itself emphasises the fool’s paradise or hothouse in which Australians are living. Those who do not go outside Australia are not conscious of the conditions under which they are living. Things are all right as long as they remain in the glasshouses, but as soon as ‘they get outside the three-mile limit they begin to shiver in the colder winds of the world outside. All that is by the way.
We ought not to get the idea in Australia that the use of a bellows is the only way to stir up a fire. In other words, our governments have to remember that the resources of this great country are not to be developed by imposing taxation on the people who should be using their ability to create opportunities for employment and to develop those resources. During the last fifteen or twenty years, Australian legislation has been directed, not towards the development of our vast resources, but towards the killing of the initiative of the individual. It brings home to us the fact that democracy’s greatest danger is aimlessness, which has the effect of killing the initiative of the individual wherein lies the incentive to individual effort and national progress.
The world is moving rapidly to-day, and we have to move with it. It is extremely difficult to pick up the threads of the position in Australia. I wonder whether our position can be summarized in the following: -
From the insubstantial pageant of a dream the word of yesterday has drifted to the wonderful reality of the present. Already the landmarks by which men set their course melt and grow misty before their eyes.
Our few visits to Canberra must remind us that it is extremely difficult for us to get a landmark by which to steer our course. To seek one, I understand, is the object of this extraordinary session of Parliament. We are to look for a lead that will enable us to get out of the difficulties in which we find ourselves. We cannot remove difficulties without facing them. A time of difficulty is the time of great opportunity, and the great opportunity that I see arising out of our present difficulties is that of Empire trade. Constructive thought is the basic element of progress. I feel that the lead now being given by certain public spirited men in Great Britain will enable us in Australia and the people of Great Britain, Canada and other sections of the Empire to capitalize our present difficulties, and, by proceeding to develop the economic resources that are ours, rear the Empire structure to even greater heights. These men are bringing home to us a realization of .the great economic resources of the Empire. These resources, I may say, are fully appreciated by foreign people, but unfortunately, for the time being, arc a little out of focus to those who should be mOSt concerned - the people of the British Empire. Thanks to -the .activities of the men to whom I have referred, the British perspective has improved, and I think it is beginning to dawn, upon us here, .as it >is in the ‘Old Country, that we have within our own control assets and opportunities that are tremendous in extent.
One impression I formed on my visit to the Old Country was that there is a great awakening of thought on this question. A wave of public opinion is now surging over the United Kingdom the like of which has not been known in the annals of English history. During the past nine months that wave of opinion has gone all over Great Britain, and affected every section of the community, from the ranks of working men to those of bankers, business men .and artists. Regardless of where and to whom you speak, within a very few minutes of contact you will find that the conversation veers around to this great subject, “ Empire trade,” and the development of the resources of the Empire for the benefit of the Empire. With this is associated the conviction that such a. development will also be for the benefit of the world at large. It may he urged that the attitude of the present British Government, and the result of the Empire Conference, indicate that there is no foundation for such opinion. 1. do not agree with that view. I hold that the attitude of the MacDonald Government is the second best thing that could happen. If it had attempted in half measures to deal with preferential trade, it would have interfered with the policy that is rapidly being forced upon the Old Country by its people. I think that we are fast approaching the time when we shall have opportunities to develop the resources of Australia through the medium of Groat Britain adopting a policy of preferential trade within the Empire.
The big issue that is at present before the people of Great Britain, and one that is making headway, is that of protecting the industry of the nation. Great Britain is passing through a difficult time, so difficult that when I arrived there in May last it was anticipated thai the number of unemployed would reach 2,000,000 by the end of the year. Actually it is now 2,250,000, the 2,000,000 being exceeded two months ago. And the number of unemployed is still increasing. The people of Great Britain are beginning to ask why is this happening;? Why the great quantities of exports from other parts of the world? Why the difficulty im obtaining British products in the shops of the Old Country.? Existing conditions have been forced upon the industrialists of Great Britain by the other industrial countries of the world using as a dumping .ground the market afforded by the population of 45,000,000 in the United Kingdom as a dumping ground. They send their surplus products to the Old Country regardless of profit: very often totally indifferent as to cost. As a result the foreign industrialist is able to sell his .goods on the doorstep of Great Britain cheaper than that nation is able to produce even the raw material. That is not ‘because of greater manufacturing ability on the part of foreign countries, but because they have already made a profit from their turnover on their own secure markets. They have proved the necessity of developing and preserving a safe home market, thus enabling their industrialists to develop mass production.
It may be said that, by protecting British industry in that way, we shall handicap the Old Country in providing an opportunity to develop trade in the dominions and on foreign markets. 1 disagree with that argument in anticipation. I hold that the Britisher, as an industrialist, possesses the genius and will, and that, given the opportunity and a safe home market, he wil’ develop mass production, and so increasethe chance of doing trade with foreign countries and with’ the dominions.
There is a movement in Great Britain known as the “ Crusaders,” which particularly affects Australia. It is nonparty in its principles, and is regarded as such in the Old Country. Even here it is felt that the issue is too big to be classed, as one of party. If the present Government were to endorse that policy, in an endeavour to develop trade, I should support it to the hilt. It is one meriting the support of all sections, and that is how it is regarded onthe other side. The term that we hear so much of here, “Empire free-trade,” exposes any who use it abroad to misinterpretation and criticism. It is a term that is attractive to certain interests in Great Britain. If you seek a justification for it, it may be found in the policy of taxing foreign food, and admitting dominion products free into Great Britain. If we in Australia can do anything to discount the statement so prevalent in the Old Country, that we will have nothing to do with preferential trade, we shall help Groat Britain to make up its mind on this great issue. Let us regard the matter, if not from an Empire, then from an Australian point of view, and we shall find that it has in it the prospect of prosperity to this country the like of which we have never previously experienced.
– We have already given Great Britain considerable preference.
– Certainly, Australia has been working towards that end for the last 23 years, but, notwithstanding that activity on our part, and the preferential provisions that we have granted, the enemies of the cause - mostly foreign countries - have been successful in establishing in the minds of the people of Great Britain the belief that Australia will have nothing to do with preferential trade. I think Senator Barnes knows how difficult it is to eradicate a rooted idea from the minds of a democratic community. We can help in that direction by passing this resolution, and so assist our Prime Minister to disabuse the British mind of that conviction.
I shall now touch upon one or two items which affect Australia, dealing first with the point referred to by Senator Carroll, that the gates of the world’s markets are closing against Australia.
– Our gates have been pretty well closed against the world.
SenatorR. D. ELLIOTT.- They have. If Great Britain will adopt this principle of Empire trade, the advantages to Australia will be so great that no government, be it Labour, Nationalist, or Country party, will be able to resist the policy for more than a few weeks. Take wheat, of which we have heard a great deal lately. We know how dependent we in Australia are on the price we receive for our wheat. A review of the world’s markets to-day discloses that within the past few weeks Germany has imposed a duty of £90s. 6d. per ton on imported wheat, and is at the same time subsidizing the export of grain produced in Germany, and exporting this subsidized surplus to our natural market, Great Britain. Next, turn toFrance. That country has imposed a high duty on wheat, and during the past six months has also placed a special duty on Australian wheat, amounting to an extra 5s. a bushel. France, too, is subsidizing the export of wheat, and its subsidized surplus goes again to our great natural market, the United Kingdom. Go from there to Russia, which is at present dumping its wheat into Great Britain. Russia is commandeering its wheat from an already starving community, and dumping it into the Old Country at any price that can be obtained for it. As a result, Russian wheat was sold in the United Kingdom last month at from 25s. to 30s. a quarter, which resulted in a loss to the Empire wheat producer of from 30s. to 35s. a quarter. Russia realizes the need of credit abroad, and. is adopting that drastic method of effecting its purpose. It is that country’s surplus against which our producers have to compete in the markets of the world. Turn now to Italy, which, in the past three years, has reduced its external requirements of wheat by nine-tenths. Now turn to the United States of America, which has a Federal Farm Stabilization Board, with a great capital of £100,000,000. Go into the wheat market of Chicago, and you will find that board purchasing twenty, thirty, or forty million pounds worth of wheat, to be sold, if possible, within the borders of the United States of America or its colonies; if that is impossible, an outlet must be found elsewhere, irrespective of competition. So the surplus is shipped to the United Kingdom, and sold at as high a price as can be obtained, but one that is below that asked for Empire wheat that is offering in the Old Country. The loss means nothing to the farmers of the United States of America, as it is carried by the taxpayer of that country.
Go a little further still, to the Argentine Republic. Honorable senators know the position there with regard to costs of production and labouring conditions. In September last, that country shipped 320,000 tons of wheat to Great Britain, andi n the following month, 340,000 tons ; ten times as much as that exported during the corresponding period of the previous year. The people of Great Britain are reaching this stage - and I make this statement deliberately, notwithstanding the attitude of the present MacDonald Government, and of the failure of the Imperial Conference - they are beginning to realize that it is preferable to develop the resources of the British Empire. I believe that in a very short time there will be a tax on foreign food imported into Great Britain, and the free admission into that country of dominion products. I leave honorable senators to visualize for themselves the advantages that would accrue to Australia from such a policy.
Now I turn to meat. I think that on a previous occasion I outlined the position of the Argentine meat industry with relation to Great Britain, but it will bear repeating. Ninety per cent of the beef that goes into the United Kingdom comes from the Argentine Republic. The trade is controlled by five foreign firms, one of which has 5,000 butchers’ shops in the United Kingdom. Last year, those five firms made a profit of £7,000,000.
– What does the honorable senator mean by “ foreign “ firms ?
– Firms that are not British. Vesteys Limited is not a British firm. It is registered in the Argentine, and profitsgo out of Great Britain to that republic. I am aware that certain of its shareholders are resident in the United Kingdom. The firms controlling the meat industry are foreign, including the Vestey interests. I shall illustrate the manner in which these Argentine people have their tentacles in every conceivable corner of the United Kingdom, and the cleverness of their methods. There is noneed for the Argentine Republic to ship any frozen beef into the United Kingdom. We know that they have great advantages in this trade, because of the fact that their beef is chilled and not, frozen. Notwithstanding that, they deliberately ship a percentage of . frozen beef to Great Britain, and exhibit that product prominently in all their shops. It is plainly marked “ frozen beef “, and therefore, second grade beef, and consequently cheaper than the chilled product. That is instilled into the minds of the British housewives, and if you, as an Australian beef exporter, attempt to argue with those housewives that Australian frozen beef is just as good as the Argentine chilled product, they will say, “No. we cannot believe that. These Argentine people admit that their frozen beef is second grade. Australian beef must, therefore, be a poorer quality than the Argentine product”. That is one of the methods by which they poison the mind of the customer in the Old Country against Australian meat interests. Honorable senators will remember how they captured the trade in the first instance. The Australian Prime Minister of the day shipped quantities of our beef to France, instead of to Great Britain. Hundreds of thousands of tons were stored for a few years, and then released onthe British market. The meat was poor by the time it, reached the market and the Argentine meat interests made it known throughout the country that it was of Australian origin.
The men working for this cause hold that the only way to change the existing state of affairs is by fiscal means, thus forcing the trade to the dominions for their requirements. It may be said that that would increase the price of meat to the British consumer, but the sponsors of this movement claim that that need not be so. They say that the British retailers could pay an extra £7,000,000 a year for their beef without costing the consumer in England1d. more, and that in addition to keeping this sum within the Empire, there would be the development of the resources of Britain herself by encouraging her own pastoral interests. The foreign meat interests are apprehensive of British Empire unity and will not hesitate to poison the minds of the electors of England in an effort to make such a thing impossible. When this movement began to make headway in the Old Country, an economic European unity was proposed.
The republics of South America also attempted to bring about a similar unity. All this was done in order to scare the people of Britain.
Figures are generally uninteresting, but I shall place some before honorable senators with a view to exciting their interest in this matter. I have here the trade figures for England for 1929. I have excluded revenue from such services as interests, dividends, on investments, insurance premiums, freights, &c. ; the figures apply only to commodities -
The Argentine Republic is the country that will be used as the spear-head of opposition to this movement because of the British capital invested there. That country and Denmark are, perhaps, our greatest competitors, seeing that their products are similar to those of Australia. The working people of England - particularly the housewives - are beginning to ask themselves how much of the money spent on imported goods represents wages paid to foreign workers instead of to the workers of England.
– It is about time that they realized the position.
– I am glad that the Assistant Minister is ready to help the Motherland and to bring about a closer economic unity throughout the British Empire.
Let us consider the position as it affects Australia. Last year we imported from the United States of America merchandise to the value of approximately £29,500,000, and we exported to that country goods worth £5,500,000, leaving a debit balance against Australia of £24,000,000. During the seven years 1923-30 our adverse trade balance with the United States of America amounted to the huge sum of £201,000,000.
– Is that not due chiefly to our importations of motor cars and petrol ?
– It includes all kinds of merchandise. Last year our adverse trade balance with the United States of America. amounted to £29,500,000.
I shall now endeavour to show how Australia could take advantage of Britain’s food requirements if only our people were willing to take off their coats, roll up their sleeves, and get rid of some of their uneconomic economics. Every minute England imports foodstuffs to the value of £1,000. The figures for 1928- the latest I have been able to obtain - show that from foreign countries England imported foodstuffs valued as under: -
There is nothing in the policy which is being advocated on the other side of the world to interfere with the right of the dominions to develop their own secondary industries. There is no need to view this question in the light of the recent emergency tariff schedules; if we take the tariff of two years ago it will be seen that it is possible to give effective preference to the Mother Country in trade to the extent of between £45,000,000 and £55,000,000 a year - trade which now goes to foreign countries. It is our duty to do all that we can to develop the resources of the Old Country. In time of trouble assistance will come to us from the Mother Country, not from foreign countries. We have only to reflect for a moment to realize that the prosperity of England is as essential to us as to our own prosperity.
– Is not the prosperity of foreign countries just as essential?
– I agree with the Prime Minister (Mr. Scullin), who said recently at the Imperial Conference, that charity should begin at home.
– Does not the honorable senator think that the prosperity of foreign countries is also essential to our prosperity?
– Their prosperity is not as ‘essential to us as is the prosperity of the various parts of the British Empire. The people of foreign countries realize that ‘economic unity throughout the British Empire would injure them, and are doing their best to prevent it.
– The enmity which would be created by Empire unity might easily lead to another war.
– Our first duty is to our Motherland and the Empire. I repeat that charity should begin at home.
– It generally ends there.
– Foreign countries are taking full advantage of the open market in the United Kingdom. They carry none of the responsibility for the government of its 4^,000,000 people, and at the same time are erecting barriers against Empire products entering their markets.
– They are dumping their goods into Britain.
– That is so. The American objective is to sell cutlery in Sheffield, and to put American bath tubs in the homes of the working men of England. Notwithstanding his skill, the English industrialist is unable to compete at his own door against this dumped surplus, of foreign countries. This constructive policy which I advocate will give Australian brains enterprise and the working people a secure market as a foundation upon which to build opportunity and employment against the studied dumping by foreigners. Under it the industrial genius, vast experience and finance of England would gravitate to the opportunities of Australia as naturally as water finds its own level and would join up with the youth and vigour of Australia in a prosperity and development warranted by the great latent resources of our people and country.
I desire now to refer to the advantages of Empire trade. The colonies of the United States of America give to their motherland 80 per cent, of their overseas trade. The French colonies do 55 per cent, of their overseas trade with Trance, while in the case of the J apanese colonies, the proportion of trade is 65 pei1 cent. In the case of the British colonies and dominions the trade with the Motherland represents only 25 per cent, of their ‘total ‘ -overseas trade. We have an illustration in the colonies of Jamaica and Porto Rica, the populations, areas and natural resources of which are about the same. The advantage, if any, is in favour of Jamaica, because of the blue mountain coffee which she is able to produce. Yet, because of the secure market which Porto Rica has, she did trade last year with her mother country to the extent of £16,500,000, whereas Jamaica traded with her mother country to the extent of only £1,500,000. Porto Rica, with her secure markets, was able to develop her natura) resources, while Jamaica had to compete with the dumped surpluses of other countries. The total trade of Jamaica was valued at £5,500,000, and that of Porto Rica at £20,000,000. Another illustration is to be found in the case of Fiji, as compared with the trading conditions of the islands in the Hawaiian group. I have not the figures before me; but 3 think that, if honorable senators were to study them, they would find an illustration similar to that which I have just quoted in connexion with Jamaica and Porto Rica. They show the terrific advantages of possessing something iD the nature of a secure market.
The French people have realized the great advantage of developing their colonies. In 1913 the importations into France from her colonies were valued at £2,859,000. France then began to wake up, as Great Britain is doing to-day, to the advantages of a reciprocal arrangement and a general development of natural resources. Last year’s importations into France from the French colonies were valued at £5S,000,000, while the exports to those colonies - honorable senators are aware that the French colonies are not what might be termed wealthy, or particularly fertile - in 1913 amounted to £3,233,000, and last year to £78,653,000.
– Without the imposition of a duty.
– In some cases a revenue duty is imposed. That is a simple illustration of the result of a recognition of and a determined effort to develop the resources of their empire.
I feel that the possibilities are even greater here.
– What is the position with respect to the Belgian colonies?
– I have not the figures before me. I have given those with respect to the four empire colonies.
– Has the honorable senator any figures to show in which direction there was rapid development in the French colonies?
SenatorR. D. ELLIOTT. - One way is by a common currency. They have great advantages in the matter of an interchange of products.
– Does Italy assist her people in the matter of preferential trade ?
– Italy is likewise actively developing her colonial resources, although she has not a particularly wealthy colonial empire.
I should like to give a few figures with respect to Australian trade. I have mentioned the colonial trade with the Mother Country, which amounts to only 25 per cent. The Australian trade is higher than that, and averages about 39.70 per cent. But we are a debtor trader with Sweden, Switzerland, East Indies, Norway, Holland, Denmark, America, Morocco, Mexico, Austria, Spain and the Argentine Republic. Last year we sent the Argentine Republic a remittance of £79,000; is there anything that that republic can produce that we cannot?
– The honorable senator has mentioned the countries with which we have an adverse trade balance. Are there any countries where the position is the reverse?
– I am dealing with commodities only, yet there are a few countries in which the position is the reverse.
It will be said by some honorable senators that Great Britain will not have anything to do with this policy, because of the increase in the cost of the breakfast table. The people of Great Britain are now waking up, and are able to combat that argument. In the late Joseph Chamberlain’s time the colonies were not able to produce the food requirements of England. To-day not only can they produce all requirements but there is a surplus. In Chamberlain’s time the scheme provided for a tax on all food with a provision for arrangements with the colonies. The scheme which is now being advocated in Great Britain is for a tax upon foreign foodstuffs and the free admission of dominion produce. We have too many dangerous competitors to be able to play the fool with our affairs. There are, of course, difficulties in the way of bringing this policy to fruition; but, thank goodness, there are difficulties. If there were not there would be nothing in the cause. If this policy which I am advocating could be brought about it would give Australia such opportunities that we would hardly realize that we were living. I believe that it is the only constructive issue on the horizon, and, regardless of party, we should do our utmost to help Britain to make up its mind on this great issue. That alone will not get us out of all our difficulties.
– Do we, in Australia, have to wake up to help Britain, or should Britain wake up and help Australia?
– It is for us to show some activity, and to tell the people of Great Britain that it is not true that we will not have anything to do with preferential trade. If honorable senators will analyse the position, they will find that the average Australian working man and employer is probably 50 per cent. inefficient. A few weeks ago, certain Australians were asked to analyse their own efficiency, and they decided in a few minutes that they were not more than 25 per cent. inefficient.
– As against whom?
– As against their own capabilities, and I think that the low efficiency of Australians is one of the most damning influences with which we have to contend. It applies not apply only to working men, but equally to employers.
– Is the honorable senator claiming that the Australian is only 12½ per cent. efficient as compared with the people of other countries?
– I did not mention 12½ per cent., but am contending that the efficiency of all sections is well below par. I said that a few weeks ago certain Australians were asked to analyse their efficiency, and they admitted that they were under 25 per cent. efficient. If we analyse our own efficiency we will, I am afraid, have to admit that it is well below 50 per cent.
– An increase in our efficiency would help us out of our present difficulty.
SenatorR. D. ELLIOTT.- I admit that; that again will increasethe advantages of preferential trade if we can get it.
– Does not the honorable senator think that preferential trade will prevent an increase of efficiency?
SenatorR. D. ELLIOTT.- I trust not. I do not know the honorable senator’s opinion of the character and capabilities of Australians, but he infers that if we can get any advantage by preferential trade our efficiency will still further decrease. I trust that the difficulties which we are now only approaching will bring us to our senses, and that we shall not decrease, but rather increase, our efficiency. We should not rest on our oars because of the advantages that may come to us. We shall have to take off our coats, roll up our sleeves, and meet the position which is disclosed by a review of the trading conditions of other countries.
Let us look, for a moment, at our trade with New Zealand and Fiji. We have lost altogether our trade with Fiji. We are losing our trade with New Zealand at the rate of, I think, £500,000 per annum. We are going down-hill in almost every market we care to study. In almost any market with which we meet New Zealand in competition, that dominion is eclipsing us. I shall refer to two commodities that require comparatively little effort on the part of the Australian producer, that of cheese and honey. For the half year ended the 30th June, 1930, the United Kingdom imported 1,510,000 cwt. of cheese, and of that quantity New Zealand provided 1,200,000 cwt. Surely cheese is a commodity which Australia is capable of producingin large quantities. Yet for the half year ended the 30th June last, Australia exported only 20,000 cwt., or 22,000 cwt. less than in the corresponding period of the previous year.
– Is that not clue to the preference given to the cheese-makers ?
– I believe it is due, to a great extent, to the operations of that element which has a limited outlook, which is prepared to rest on its oars, to a low state of efficiency, and to the belief that any difficulties confronting us, can be overcome by an appeal to the Government. Unfortunately, there are some who always feel that the Government, will get them out of their difficulties as is the case with the manufacture of galvanized iron. Last year, New Zealand exported to the United Kingdom £82,000 worth of honey, and for the year 1928-29 Australia exported to Great Britain £2,856 worth, compared with £6,912 worth in 1927-28. Whenever a comparison is made between the New Zealand and Australian figures, we find that we are eclipsed by New Zealand. Instead of learning a lesson from the depression, we are failing to realize the seriousness of the position. We are inclined to rely upon the Government, feeling that it will get us out of our difficulty in some artificial way. We are developing into a kind of hothouse plant. We are growing up without any stamina or strength. We are neglecting those great natural and latent resources which we possess. The depression through which we are now passing will probably prove to be a godsend, since it will bring us to our senses. We shall, as surely as day follows night, overcome our difficulties, and we shall be better for the gruelling that we are now getting.
SenatorRae. - Yes, if we can get three meals a day.
– That is not the lead which the Senate should give to Australia. We arc occupying a country well endowed with natural resources, and appear to be doing all we can to destroy them. Surely there is an obligation upon us. It is the responsibility of the members of this chamber to give a lead ; but not in the direction indicated by the honorable senator who interjected a few moments ago. One would infer from his interjection that, in his opinion, prosperity is something that is created by primary producers or business men, so that politicians can claim the credit. I take the view that the most business-like attitude for any government to adopt is to keep out of business.
– I intended to convey to the honorable senator by my interjection that the philosophy which he is preaching is an easy one for a man with a full stomach.
– It. is deplorable that, in a country like Australia, with such abundant resources, any section of the people should be suffering
I he pangs of hunger. This state of affairs, [ suggest, is due to the fact that hitherto we have been attempting to develop economic laws without regard to conditions existing iti other countries. If we had less legislation and more sound administration, we should be in a much better position, because that section of the people whose business it is to develop the resources of the Commonwealth would feel encouraged to carry on. Under present conditions there is little encouragement for any person to take on added business responsibilities. Straws, it is said, indicate the direction of the wind. Within the last few clays the Bank of New Zealand has intimated that it must refuse to accept further deposits from people in Australia who, apparently, are uneasy about, the trend of events in this country. The frequent interference by governments with the initiative of the individual is destroying that incentive which is so essential to the true development’ of the nation. I do not wish to detain honorable senators further. I think I have said enough to persuade them that the policy I have outlined is the right one for Australia to adopt. A few weeks ago Mr. Scullin made a similar appeal on this issue in the Mother Country, and I feel certain that if, tonight, the Senate adopts this motion it will materially strengthen the hands of the Prime Minister of Australia even at this late, hour at the Imperial Conference proceedings in London. I repeat that Australia is a land of great resources and opportunities, and if the obligation of these opportunities is not the obligation of honour, then there is no honour. Let us weave strands of experience, knowledge, British character, also Labour, Nationalist, and Country party common- sense, in the web of Empire progress, development, and prosperity.
– I have no fault to find with the spirit or objective of the motion submitted by Senator Carroll. I agree, also, in the main with what Senator R. D. Elliott has just said in support of it, although I disagree with some of his arguments. The genesis of the motion lies in the desire, on the part of the mover and its supporters, to increase the volume of inter-Empire trade. In discussing this subject we should consider what steps we can take to improve our own position by fostering trade within the Empire along the lines suggested. To this end we should ascertain what our present production is and to what extent it, is likely to be developed by the adoption of this scheme. In my judgment, the policy most likely to benefit the people of Australia is that which considers first the requirements of the home market. Although Senator R. D. Elliott did not make a direct charge he appeared to indicate that Commonwealth legislation to maintain and improve the standard of the workers of this country was not in the best interests of the nation. I have some knowledge of primary production and of the difficulties encountered by farmers in the marketing of their products, and my experience has taught me that the secret of success lies in aiming at variety in production. If we turn to New Zealand we find that the rapid progress of the dominion in recent years has been due to the greater attention paid by her primary producers to the development of what I may term small farm production.
– The climatic conditions in New Zealand help the farmer? there tremendously.
– That is so: but even in those parts of Australia where the soil and climate lend themselves to small farm production we do not find the same enthusiasm for this class of farming as in New Zealand. Most honorable senators will agree that South Australia should produce sufficient dairy products to supply the home market, but it does not. In the peak period of the season we export a small quantity of butter or cheese, but for the other eight or nine months of the year we have to depend on importations from the other States to provide those commodities for our own people, our total imports, in round figures, amounting to about £400,000 in excess of exports. We also import from 12,000 to 14,000 cattle and roughly 40,000 sheep to meet the needs of the local market.
Our present difficulty is, I think, due to our failure to develop a type of peasantry distinctly inclined to earn its living from the land. In past years, heavy expenditure of loan moneys on railways, water schemes and other public works have enhanced the value of land over and above the natural increase in value due to the work of settlers who occupy their holdings. For several years more money has been made from the sale of land than has been received from the actual production of the soil. But conditions are changing and, I am glad to say, for the better. Following the example of the people of New Zealand there now appears to be a desire on the part of our farmers to engage in the production of a greater variety of small farm products, for which the home market is undoubtedly the best market. Before the development of our arbitration system our farmers had to accept very low prices indeed for all farm by-products. If the standard of the Australian worker is reduced our primary producers will suffer owing to the diminished purchasing power of the Australian consumer, and because of the low prices ruling for wheat and wool, primary producers will, in future, have to depend more and more upon the sale of their byproducts in the Australian market. This is a phase of the problem that should receive earnest consideration at the hands of all those who claim to have at heart the welfare of the man on the land. Our object should be to increase the absorptive capacity of the local market by maintaining the standard of the Australian worker. Anything which this Parliament can do along these lines should have the support of all honorable senators. If we cannot keep our money in Australia, wc should try to keep it in the family.
I look upon the British Commonwealth of Nations as a family. The figures relating to our overseas trade indicate that it is capable of development along the lines suggested in the motion. In 1928-29, the last year for which I have been aide to obtain the figures, Australian imports totalled approximately £120,000,000, and exports were valued at £123,000,000. Our imports from the United Kingdom are valued at £57,000,000, and the value of our export trade to the United Kingdom is £55,000,000. . From the United States of America we import goods valued at £35,000,000. but our export trade to’ that country does not exceed £5,750,000. It is interesting to see how the £35,000,000 is made up and the opportunity there is for improving intra-Empire trade. I see no reason why we should not harvest sufficient fish from our own waters; but. up to date, we have not done so, and in the meantime why should not Australia’s requirements in fish be supplied from the United Kingdom? It is well able to furnish us with all the fish we require. Why in the name of commonsense we have to import from America preserved and dried fruits to the value of £200,000 I do hot know. Wc import from the United States of America, boots and shoes to the value of £124,000, socks and stockings to the value of £478,000, and yarns to the value of £348,000. Surely we could get these goods from Great Britain ! But the biggest items of our import trade from the United States of America are motor cars, bodies, &c, £7,132,000, and machinery £5,449,000. There is no reason why practically the whole of these motor cars and machinery could not be supplied from the Old Country. If Great Britain were supplying Australia with all the articles I have mentioned, it would lead to a tremendous increase in the employing capacity of the industries of that country, and also to an increased market for Australian primary products which the American people do not buy from us. In view of a suggestion which has been made, I ask leave to continue my remarks.
Leave granted; debate adjourned.
– by leave - I move -
That in view of the grave situation confronting the wheat-growers of the Commonwealth through the unprecedented fall in the price of wheat, the Senate is of opinion that the Government should take into immediate and sympathetic consideration the position of the wheat-growers, and grant them such relief as will tide them over the present stressful period and enable them, above everything else, to keep afirm grip on their homesteads.
I propose this motion because of an extraordinary set of circumstances, over which the wheat-growers of this country have no control, and which has placed them in a very awkward plight. From the point of view of employing labour and upholding our economic and financial structure, wheat-growing is the leading industry of the Commonwealth. It is true that the wool industry contributes more towards the upkeep of our financial system, butit is equally true that wheat-growing employs far more labour in a ramified system of subsidiary industries throughout the Commonwealth. No other industry standing by itself can compare in importance with it. There are 18,000,000 acres of the surface of our country devoted to wheat at the present time, and there are 60,000 wheat-growers engaged in the industry. But suddenly, as it were, like a bolt from the blue or a thief in the night, this vast body of country dwellers have had their position so threatened that they really do not know where they stand to-day. To show the plight into which they have been plunged, I may mention that recently I attended a meeting in the city of Perth at which 10,000 wheat-growers of Western Australia were fully represented, and Mr. Latham, a State Minister, said that ho expected that no less than 8,000 of them would avail themselves of the protection to be afforded by legislation now before the State Parliament. In South Australia this is the third year in which seed wheat has been given free to the farmers.
– It is not free. The farmers have to pay for it some day.
– They have not paid for it up to date. I was in South Australia when the news came through from the Premier of the State that seed wheat would again be made available this year, and that, if the crops once more proved a failure, the Government would not look for payment. So far as South Australia is concerned, it has experienced three successive failures over a considerable part of the wheat-growing area, and special rates were fixed by the Railway Department of that State to enable the farmers during those stricken years to send firewood to Adelaide to keep the pot boiling. In Victoria, particularly in the dryer regions embraced in the same region as South Australia, the farmers have had the same unfortunate experience for three years, and in New South Wales news came recently from the rich and fertile area of Riverina to the effect that business people had come together and announced to the world that they had on their books as much as £1,250,000 owing by wheatgrowers. On top of this bad condition of affairs in the four wheat-producing States we have the price of wheat almost cut in half. According to the Liverpool daily papers, wheat to-day is 24s. and a. few pence a quarter. If provision is made for commission and transport charges that price allows about 2s.1d. a bushel for the growers at railway sidings in Australia to-day. That warrants my saying thatthe prevailing low price, reached so suddenly, is practically unprecedented in the history of wheat-growing in Australia. It is necessary to remind those who claim that the wheat-grower has received much assistance in the past of what Ministers for Railways think of the industry. They admit that whenever there is a bumper wheat harvest they have a chance to place the systems which they control in a solvent position. If the crop fails they must inevitably show a loss. That demonstrates the importance of the wheat industry and the wheat industry alone as the principal feeder to our important national transport services. This outstanding fact of the wheat industry being the mainstay of our railway systems is too often forgotten.
About 60,000 of our wheat-growers are confronted with the uninviting spectacle of being placed in an extremely desperate plight. The value of their product is less than half what it was last year, and so their debts are automatically doubled. Is it any wonder that yesterday, at a gathering in this building, representing every section of the community, including growers, millers, shippers, consumers, &c., the dominant note sounded was the desperate position of the wheat-growers, and the necessity for the Commonwealth Government to provide some measure of relief? I know that the Government has the matter in hand. That is why I invite the Senate to discuss it to-night, even though it he briefly. The future holds no promise. Although it is almost impossible to conceive a worse state of affairs than the present, there is no prospect that next year will be any better than this for our wheat-growers. Canada and the United States of America have carried over huge stocks of grain, and Russia has become a formidable competitor in the world’s markets.
The outlook is indeed gloomy for our wheat-producers. I have culled from the Glasgow Weekly Herald of the 27th September, 1930, the following extract: -
The Soviet emergence as a formidable ship per of wheat from the Black Sea ports to the British market appears inconsistent alongside the stories of Northern Russia being short of bread. But the inconsistency exists at the Black Sea itself. Members of the crew of the vessel that recently discharged 2,000 tons of Soviet wheat in Glasgow relate how they had to pay1s. per 2-lb. for very indifferent bread in Russian ports. Yet, Russia is selling us wheat at prices that make a British 4-lb. loaf costing 7½d. in Edinburgh and 8d. in Glasgow. What will Soviet subjects say to that?
Russia is selling wheat in Great Britain at a third of the price that it is charging its own consumers. If the British Government tolerates the dumping of Russian wheat at the expense of penalizing, aye, pauperising its fellow Britishers throughout the world it is deserving of severe censure. I also have an extract from the New Zealand press indicating that last week wheat in Auckland was selling at 6s. a bushel for the Tuscan, and 6s. 2d. for the Hunter variety, while the price of flour in the dominion was £16 15s. per ton. The price of flour in Australia, according to the daily press, is £9 a ton, and as our wheat is bringing one-third as much as that sold in New Zealand, we can divide the price of flour by three-
– The cost of milling is the same in each country, so that you cannot adopt that method.
– There is a sufficient margin still in the price of wheat in the two countries to justify our expect ing cheaper flour in Australia. I propose as a remedy for the existing position that the Commonwealth Government should take the matter in hand forthwith. It is not a matter for the States.
– It is a pity the honorable senator did not think of that a few months ago.
– Senator Rae should thank the Opposition for voting against the Wheat Marketing Bill. By our action we saved the Government from an extraordinarily embarrassing financial position. Australia anticipates a wheat harvest of 160,000,000 bushels this year. At 2s. a bushel that means about £16,000,000. Had the Government entered into that guarantee of 4s. a bushel, it, in conjunction with the State Governments, would have had to find something like £8,000,000. Where would the money have come from? The Government is at its wits end to make ends meet as it is, apart from this additional £8,000,000.
– Where does the honorable senator suggest that the present relief should come from?
– I shall indicate that. Already the Treasurer is at his wits end about the budget. The adoption of the Wheat Marketing Bill would have plunged the country into the depths of financial despair. The present difficulty can be met by raising money to supply the deficiency between the prevailing price, and the cost of production.
There are various estimates as to what it costs to produce a bushel of wheat. Some years ago the Lang Government convened a conference at Bathurst to decide the point, and it estimated the cost at 5s. 6d. a bushel. I believe that to be an excessive figure. At the same time, the prevailing figure at 2s.1d. is hopelessly out of the question.
We must find some method of meeting a had situation, otherwise we shall swell the already inflated ranks of our unemployed. No well-desiring citizen wishes that. I suggest that this Government should, by a communal effort, raise sufficient money to fill the gap between the present low price of wheat and the cost of production. What the figure should be can be left to individual opinion, but the proposal that appears to bn thu soundest yet put forward is that of Professor Perkins »f South Australia. Hie proposes a higher price. for the portion of our wheat that, goes into home consumption - about £7: 4s-. for every ton of flour consumed in Australia. By that means, he hopes to raise a fund of £4,800,000, which, spread over the marketable production, would represent about 7d. a bushel. He then proposes to add that 7d.. a bushel to the present price of wheat. making an all-round price of 2s. 7d. a bushel for all the wheat, marketed, either at home or abroad. The proposal would mean raising the cost to the- consumer; but Professor Perkins says that as the result of spreading the £4,S00,000 over the 60,000 wheat-growers of Australia, and assuming wheat parity to be 2s. 7*d. a bushed, a tax of £7 4s. a ton on flour would raise the price of wheat for home consumption to 5s. 7d. a bushel, making bread lid. a 4-lb. loaf in Australia. Even at the present low price of wheat - of which, the consumers have had no advantage - ls. a loaf has been charged for bread throughout the Commonwealth. I remind Senator Colebatch that the price of a 4-lb. loaf of bread in New Zealand is only lid., notwithstanding that the price of flour there is £15 or £16 a ton. If we did. what they are doing in New Zealand, there would be no difficulty in bridging the gap between the low price of wheat and providing the farmer with a living wage; and at the same time the price of bread would remain at a reasonable figure.
Some honorable senators feel strongly on this subject, because they know how serious is the position confronting the wheat-growers of Australia to-day. In submitting this motion, I feel that I am a” sealing to a sympathetic Senate. The Government has exhibited a generous spirit in allowing a discussion of this motion before the government business on the notice-paper has been disposed of. Its action bespeaks a desire to find a solution of the problem confronting the wheat industry. I do not know when a question of such gravity has previously had to be considered by the people of this country. It is true that in the early ‘nineties we had our troubles; prices dropped, and public credit was dissipated. But there was mot then so gloomy an outlook as that which mow ov>ens. up before us.. The cost of produce tion is much higher to-day than it was then. Wheat land at £8 an acre means that ordinary bank interest represents about. 12s. an acre> which, on the basis of 2s. a bushel, means that merely to pay interest on the value of the land, a &bushel crop must be reaped. In Western Australia, the average wheat lands are not so productive as is the case generally in the Eastern States, becau.se we have pushed far out into lighter and dryer areas. We have cheaper land there, but we have a larger proportion of inexperienced farmers than is generally the case in the rest of Australia. We must maintain, this yeomanry on the soil of Australia. If we do not treat them sympathetically, I tremble to think of the consequences. I believe that the Government, having made a good start, will find a means of enabling these men to retain their holdings at all cost instead of being forced to drift to the- cities to increase- the already overcrowded ranks of the unemployed, there.
– I second the motion. Although Senator Lynch has covered, the ground well,, there are one or two points in connexion with this subject to which I desire to. refer. The honorable senator said that unless something is done, many wheat-growers will be forced off their holdings. Each State is at present contemplating the introduction of legislation to postpone the debts of farmers so that they may be able to retain their holdings; but notwithstanding those good intentions, it is. still open to any creditor, who is not agreeable to the course suggested, to take advantage of the Commonwealth Bankruptcy Act, and this circumvent the State Governments.
– We had a satisfactory statement on that point yesterday from the Acting Crown Solicitor.
– I am glad to hear that, for it is a matter which has given me some concern. It might be said that the proposal of Senator Lynch is sectional and, therefore, unfair. I realize that the honorable senator has brought it forward only as a last resort.
Nevertheless, it is only on a footing with other acts of this Government, and is in accordance with the settled policy of Australia, which imposes a higher charge upon the citizens of Australia for their requirements than is imposed on outsiders. 1 remind Senator Rae, who interjected that, had the Senate acted differently when the Wheat Marketing Bill was before it recently, this motion would not have been necessary, that several honorable Senators, including myself, urged, at the time, that the wheat-growing industry should be assisted, although we did not agree with the means proposed by the Government in the bill then before us. Those honorable senators who voted against that measure did not object to assistance being given to the wheat industry, they objected to the extraordinary means proposed by the Government to give that assistance. The matter now before us is, however, too serious to be decided by what took place some weeks ago, or even by what happened yesterday. Assistance to the wheat-growing industry is an urgent necessity. Apparently the Government realizes the seriousness of the position and, therefore, I leave the matter to its sympathetic .consideration, believing that it will act in the interests, not only of the farmers of Australia, but of the people generally.
– I support the motion, and agree with most of the statements made by Senator Lynch in- his forceful and illuminating speech. But, while admitting the great importance of the wheat industry to Australia, and the necessity for assisting it. I point out that that industry is not, as the honorable senator stated, the most important in Australia; nor does it employ the greatest amount - of labour. Australia’s most important industry is the sheep and wool industry. There are 60,000 wheat-growers in Australia, but there are 80,000 wool-growers, only 3,000 of whom have flocks of more than 5,000 sheep. The sheep and wool industry is sometimes said to be in the hands of a few wealthy men, whereas the fact is that the average size of the flocks of Australia is only 1,300 head of sheep. In. effect, these two great primary industries are carrying Australia upon their backs by producing the bulk of our exportable wealth. Unfortunately, owing to the economic position with which the world is now confronted, there has been an enormous shrinkage in the purchasing power of the people, .and, consequently, a very serious decline in the value of these two products. While we must exhort our primary producers to grow more wheat and to produce more wool - that is the only way in which we can create wealth to any great extent - it is to he regretted that the prices offering for these commodities are not more remunerative than they are to-day. The wheat and wool growing industries are at present in a very parlous condition. The average price of wool sold in Australia from the 1st July, up to the present, has been only 8d. per lb. gross, ex-seaboard warehouses, which is equal to 7d. per lb. at the nearest railway station. That figure does not, however, give a true indication of the very low prices to which wool has fallen because producers have been withholding from the market the major portion of their lower class wools which at present are unsaleable or which, if sold, would not provide sufficient to PaY rail freights and brokerage charges. Had the whole of the Australian clip been marketed this year as it came to hand, as is done under normal conditions, the net price to the wool producer delivered at country railway sidings would have been 6d. per lb., or less than one-half the estimated cost of production.
The DEPUTY PRESIDENT (Senator Plain). - I ask the honorable senator to confine his remarks to the subjectmatter of the motion which relates to the wheat-growing industry.
– I intend to connect my remarks by showing how those engaged in wheat and wool production make up an exportable surplus of at least £45,000,000 for the Commonwealth even in this year of distressingly low prices. The wool clip is valued at approximately £25,000,000, and thanks to Providence and the efficiency of the Australian wheat-growers, the exportable surplus of wheat should be valued at £20,000,000. Senator R. D. Elliott rer f erred to inefficiency in Australian production; but on that issue I cross swords with the honorable senator because I contend that the wool and wheat industries of Australia are more efficiently conducted than in any other country. It is estimated that the wheat crop this year will exceed 200,000,000 bushels, which is easily a record for Ausralia. This large production is due to the increased area placed under crop, improved methods of cultivation, the more general use of fertilizers and the unusually good season. With wheat at 2s. a bushel at country- railway stations the return from this product should be £20,000,000 and therefore, these two great industries should earn for the Commonwealth approximately £45,000,000 this year. Unfortunately, both of these industries arc now being carried on at a loss to the persons concerned. There is a great difference of opinion as to the actual cost of producing wheat. At the Bathurst conference, for instance, the cost was given at 5s. 6d. per bushel, whereas the Waite Agricultural Institute in South Australia, I think, fixed the rate at 4s. lOd. and the Warracknabeal Tractor Owners Association, which consists of 1,000 members and which obtained a great deal of reliable evidence concerning the cost of wheat production in the Wimmera district in Victoria, which has the highest yield in Australia, fixed the figures at, I think, 3s. lOd. per bushel. In these circumstances it would be fair to estimate the cost at 4s. a bushel. I have never seen an estimate for any district under 3s. 6d. The cost of producing wool is estimated at ls. Id. Both the wool and wheat industry - are being carried on very efficiently. Australians have worked wonders in the matter of wheat production, duc largely to the assistance given by the various State Governments through their Agricultural Departments and the efforts of scientific officers associated with such departments. It is not many years since the average production of wheat per acre in Australia was less than 7 bushels; but this year it will be over 16 bushels. The average over a period of years has been between 12 and 13 bushels. This has been brought about despite the fact that there has been an insufficiency of suitable land made available in the more favoured districts, and that some of our primary producers have been forced- on to dry areas in the far north-west Mallee district in Victoria and the eastern portion of Western Australia, where it is doubtful if, owing to climatic conditions, wheat can be economically grown.
The efficiency of the Australian wheat-grower’s is most marked when compared with that of the wheat farmers in Canada, United States, the Argentine, or any other country. I should like to pay tribute to the various State governmental departments and to the scientific men from whom the wheat-growers have had much assistance, particularly as regards the tilling of the soil, the pickling, selection, and breeding of wheat suitable to varying climatic conditions. In Australia we produce more wheat per inch of rainfall per acre than any other country. In wool we produce twice the value per fleece of the world’s average. It will be seen from the information I have given -that our primary producers are highly efficient. In writing to me recently, the president of the Liverpool Corn Exchange said that the Australian wheat is superior to any other produced, and that Australian wheat-growers could always rely upon getting on an average 2s. a quarter more than any other producers. That should be sufficient to disprove the statement Of Senator R. D. Elliott, that there is inefficiency in our industries.
Reference was also made to the fact that New Zealand is showing better results than we are. The average wheat yield per acre in that dominion is 32 bushels, which is, I think, the highest in the world; but the area under crop is insufficient to supply local requirements. Wheat is 6s. Id. to 6s. 3d. per bushel at the nearest railway station in New Zealand, but that is due to the fact that a high duty has been imposed by the New Zealand Government upon importations from other countries. New Zealand farmers also possess the advantage of a more assured rainfall - that is why the individual areas under crop are smaller, but the per acre yield higher than ours. Moreover, New Zealand legislation has always been more in favour of the man on the land than that in operation in Australia.’ Superphosphates in New Zealand are cheaper, and are used to a greater extent per acre than in Australia. There is no duty on superphosphate, and little or no duty upon agricultural machinery. There is not the slightest doubt that the productivity per acre in New Zealand is higher than in any other country with the exception, perhaps, of Denmark. In the matter of wheat, oats, butter, wool, meat, and lamb production the producers in that dominion have not been crippled by the imposition of high customs duties, increasing production costs, as have those in the Commonwealth.
Reference has been made to the cost of bread in Australia. In my opinion, it is criminally high, particularly when the price of the best wheat is taken into consideration. The price which I have been paying for bread in three localities - New South Wales, the far-west of Victoria, and central Victoria - has been ls. a 4-lb. loaf. At one place it has recently been reduced to lid. a 4-lb. loaf. All that is offered to farmers for wheat ex trucks ,in Melbourne is 2s. 8d. a bushel. Yet when wheat was 7s. 6d. per bushel bread was lid. to ls. a 4-lb. loaf. This is very unjust, and clearly discloses that the farmers are not getting a fair deal. Millers can buy wheat in Melbourne or Sydney at 3s. a bushel. Flour is quoted at £9 a ton, and bran and pollard at £5 10s. a ton. Forty-five bushels of wheat at 3s. represents £6 15s., less 880 lb. of offal at £2 10s. 7d.; the farmer receives £4 13s. 5d. for 2,000 lb. of flour. With wheat at 3s. a bushel the farmer actually receives 1.65d. per ls. loaf. The wheat-growers have to pay for their land, machinery, superphosphates, corn sacks, and take all the risks. Under the fallowing system it takes eighteen months before a bushel of wheat can be produced. He has also to pay interest on the money with which he has purchased his land, and meet the cost of depreciation in the value of his machinery, which is exceptionally high in price owing to the high tariff imposts. He has also to pay a high price for superphosphates, railway freights, and. other charges, and after the expenditure of a large amount of capital and giving all his labour he receives only 1.65d. per ls. loaf of bread. On the other hand, a miller who does not hold the flour very long, and has only a rela-
tively small amount of capital employed, receives 1.80d. a ls. loaf. The baker’s share on 2,000 lb. of flour is 680 4-lb loaves, equivalent to £34, less the cost of flour, £9 15s. As a matter of fact, it is now only £9 a ton, which leaves the baker £24, or 8.55d. per ls. loaf. This is a ridiculous and lop-sided arrangement. In New Zealand, as Senator Lynch pointed out, the farmers receive 6s. Id. to 6s. 2d. a bushel, sacks extra., according to the variety of wheat, at country stations. The Australian price is 2s. 2d. at country stations, including sacks which cost from 3d. to 4d. a bushel. In New Zealand the farmer is paid 3d. a bushel extra for sacks, so the actual price received by the farmers there is 6s. 4d. to 6s. 5d., as against 2s. 2d. in Australia. Notwithstanding this, the price of bread in New Zealand is exactly the same as it is in Australia. The position is most unfair. There is urgent need for investigation concerning the exorbitant prices that are being charged consumers for bread in some parts of Australia, and there is almost as great a need to bring down the price of bread to the consumers as there is to ensure stability to those 60,000 wheat-growers who are carrying on against such tremendous odds. As has been stated so often in this chamber, our primary producers are obliged to pay excessively high prices for all their tools of production; also higher prices than ru;le in any other country for superphosphate and wheat sacks, and they have to pay as much, if not more, than farmers in any other country for labour. I am fortunate in that I have on my properties a magnificent body of sharefarmers who are working earnestly and scientifically. I know the wheat-growers of Australia pretty well. I have an intimate knowledge of the extraordinary difficulties which they have had to surmount in order to establish homes for themselves and families in the far north-west of the State of Victoria, the drier areas of South Australia and the eastern portion of Western Australia, and I can say without hesitation that the Commonwealth has , no better citizens. But the odds against them are tremendous. They have to pay high prices for their machinery; high freight? on the transport of their produce to the seaboard, and, because of our high customs barriers, ship charters have to be arranged at higher rates’ than would have been charged if vessels coming into Australia to lift the wheat, wool, &c, were nOt obliged to carry ballast instead of cargoes.
We must do everything that lies in our power to induce our primary producers to remain on the land. One of our greatest curses is that of centralization. In Victoria 57 per cent, of the population is concentrated within twenty miles of the Melbourne Post Office. Let us do something to remedy this state of affairs. Our wheat-growers are facing an extraordinarily difficult situation owing to the dumping, on the British market, of large quantities of cheap Russian wheat and the heavy imports from Canada, the Argentine, and elsewhere. There is an over supply of wheat in the world’s markets, but I feel sure that the overseas price has been forced down unduly by recent huge exports from Russia of wheat stolen from the peasants by the Soviet Government. I am growing wheat in one of the most favoured districts in Australia. I anticipate an average yield of 88 bushels per acre and yet I cannot produce at less than 3s. per bushel. How then can wheat-growers in less favoured districts meet their obligations with wheat at 2s. 2d. or 2s. 3d. a bushel?
Nobody wishes to see the cost of living increased. I believe that, if this proposal is carried, it will not increase the price of bread to the people of Australia by one farthing a loaf because, as I have shown, while wheat is selling at 6s. per bushel in New Zealand the price of bread to the people of the dominion is the same as in Australia.
– Present prices for bread in Australia should be substantially reduced. 1
– I believe that, in some localities, the people are being exploited, because, in certain suburbs of Sydney and possibly other cities in the Commonwealth, bread is being sold at rates much below those usually charged, and recently a contract was entered into at Shepparton, Victoria, for the sale of > 4-lb. loaf of bread at 5¾d. If that is possible in isolated instances, the people of Australia ought to be able to get a 4-lb. loaf for 6d.
– They can buy it at that price in certain parts of Sydney.
– I know they can. That is why I contend that in places where higher prices are ruling, the people are being robbed. If this motion is carried, the wheat-growers of Australia, will receive some encouragement. They deserve every ounce of assistance which we can give them even if it means an increase of the price of flour to the bakers, and an increase in the price of fi 4-lb.’loaf by U.
Early in the present year, the Prime Minister (Mr. Scullin), and the Premier of Victoria (Mr. Hogan). by means of wireless messages, were daily urging the people of Australia to grow more wheat. This urgent plea became somewhat monotonous to my ears because 1 knew that I was putting a vast area under cultivation with little, if any. prospect of a profitable return. On my property of 4,800 acres, I have 4,500 acres under wheat, and. the balance under oats, and I know that although my yield will bc heavy, I shall have to accept a price lower than the actual cost of production. I realize, however, that during this critical time, there is an obligation on all land-owners to bring their holdings up to the highest point of productivity. For the most part, our farmers are highly efficient, and scientific in their methods. In this respect, the Australian pastoralist easily leads the world, and tlie same may bc said of the Australian wheatgrower. He produces a. greater quantity of more valuable wheat on a. limited rainfall than does the wheat farmer in any other country, despite the ruinous tarin’ inflictions. I hope that this Government is sincere in its desire to help our wheat-growers, and I trust that even now some action will be taken to ensure to them a return higher than the ruinously low current market rates would indicate they are likely to get for this, one of our greatest staple products.
SenatorE. B. JOHNSTON (Western Australia) [10.23]. - I support the motion. Most honorable senators will agree that our present financial and economic difficulties are due largely to the decline in the world’s markets for our principal exportable products. Our wheat-growers are now looking to the Federal Government for assistance, because their present position is largely due to the appeal made early in the year by the Prime Minister (Mr. Scullin) to all farmers to grow more wheat. I have no doubt that the success of the “grow more wheat “ campaign was due, in part, to favorable seasonable conditions which have been experienced throughout the Commonwealth, and I hope that wherever assistance is given to our wheat-growers, i t will be on a purely federal basis. The failure of the Wheat Marketing Bill was largely due to the fact that the States were to be called upon to bear one-half of any loss that might be incurred from the operations of the proposed wheat pool. Such an arrangement as that would have been most unfair to States like Western Australia and South Australia,which have small populations and are large producers of wheat. At yesterday’s conference of representatives of the wheatgrowing States convened by the Acting Minister forMarkets (Mr. Forde), the representatives from Western Australiasubmitted the outline of a scheme for the payment of a premium of 6d.a bushel on a marketable harvest in the various States. The figures presented to the conference showed that in Western Australia the marketable harvest this year would be about 45,000,000 bushels, and the quantity required for local consumption as flour, 2,113,000 bushels. In South Australia, the marketable harvest was estimated at 28,000,000 bushels, and the quantity consumed locally as flour, 2,926,000 bushels. In Victoria, the marketable harvest was placed at 51,000,000 bushels, and the quantity consumed locally as flour, 8,993,000 bushels. In New South Wales, the marketable harvest was stated to be 66,000,000 bushels, and the quantity consumed locally as flour, 12,523,000 bushels. The marketable harvest for all Australia was estimated at 194,000,000. and the quantityconsumed locally as flour, including the requirements for Queensland, Tasmania, Federal Commonwealth Territory, and Northern Territory, 32,426,000 bushels. On these figures an increase of 3s. per bushel in wheat used as flour for home consumption would enable a bonus of 6d. per bushel to be paid on all wheat produced in the Commonwealth. The representatives from South Australia suggested the payment of a sales tax of £7 4s. per ton on flour locally consumed so as to provide a bounty of 7d. per bushel to our wheat-growers. The conference adopted this recommendation. Consumers need have little fear that its application will mean an increase in the price of bread. With flour at £10 per ton, the price of a 2-lb. loaf of bread in Perth is 5d. and rises to 6d. in most country towns. There is a camp for the unemployed at Blackboy Park, about 12 miles from Perth. Recently the Government called tenders for the supply of bread for the men living there and the contract price for bread for consumption at Blackboy Park, 12 miles from Perth, is 2 9-16d. for the 2-lb. loaf, while in Perth in most shops the price is5d. to 5½d. Without any increase in the price of bread to the consumer, there is, therefore, room for this assistance to be given to the farmers in the shape of a bounty of 7d. per bushel on their wheat. The most the consumer would stand would be a little less decrease in the price of bread than he might otherwise expect. The position of the wheat-grower is rendered very difficult and he has to ask the Federal Governmen t for this assistance in the shape of a bounty, largely because the influence of federal legislation spread over a number of years past has increased the cost of production in every direction. Tariff embargoes, sales taxes, and primage duties have largely increased the burden on the back of the wheat-grower, and during the last few weekswe have had the Tariff Board engaged in the wasteful task of travelling all round the country inquiring whether it should recommend a further burden for the farmers in the form of a duty on jute goods. I do not for one moment think that such a duty would be approved by any government today, and it is a waste of time and money for the Tariff Board to be travelling about inquiring into this matter at a time when it is the plain duty of the Government to say that it will not put any duty on jute goods.
Ever since . the Wheat Marketing Bill was defeated in June the farmers have been waiting to see what steps, if any, the Federal Government would take, and I take it as a sign of the Government’s sincerity and desire to help the wheatgrowers that this conference of wheatgrowers and their organizations was called yesterday. In view of their successful appeal to the farmers to grow more wheat, it is certainly the responsibility of Federal Ministers to -see that a bounty is paid on the production of wheat to the men who responded so well to that appeal. We must also remember that tlie payment of bounties on production is the accepted policy of Australia. “ Since the appeal to the farmers was made proposals for the payment of bounties on many articles have been brought forward and most of them have been approved by this chamber. I recall the fresh bounties on cotton, linseed and flax, and I am aware that after the defeat of the WheatMarketing Bill the Government actually brought forward a proposal to pay a bounty on sewing machines, from paying which Australia was happily saved by the action of the Senate in rejecting the bill. It is the policy of the present Government to pay bounties on production and it has been the accepted policy of Australia ever since Federation to assist any industry by an all-Australian bounty payable by iiic Commonwealth only, and not by giving a guarantee which the States are asked to share to the extent of onehalf on a very unequal basis as was proposed in the Wheat Marketing Bill.
During the last six or seven years successive governments in Western Australia have carried out a- very vigorous land-settlement policy. Of the 10,000 wheat-growers of the State a large number are new settlers, some of whom have spread into the outlying districts a adjacent to areas proposed for future settlement and known as the 3,500 farms scheme. Over 600 miles of country from the north of Geraldton down to Albany these 10,000 wheatgrowers are to be found. It is a very fortunate thing for Australia that Ave have good crops this year. I think that the crops iti Western Australia are the best Ave have ever had. During the recess I travelled over several hundred miles of wheat belt, and wherever I went I saw crops that will range from six to as high as ten bags to the acre. Perhaps one of the most gratifying features is that the best crops are around Southern Cross and in the far-eastern area of Western Australia, in country that was originally opened up for goldfields, and which a few years ago was regarded as altogether outside the line of profitable wheat production.
In spite of the fact that this year Ave have such very good wheat crops in Western Australia, about 8,000 farmers are unable to meet their liabilities. There has been great anxiety in the State as to their position. It is the desire of the State Government to protect them and keep them on the land or, as Senator Lynch has expressed it in his motion, to enable them to retain their present grip on their homesteads; bat there is doubt as to whether this can be carried out without ‘infringing the Commonwealth Bankruptcy Act. The Government of Western Australia has before the State Parliament a bill entitled the Farmers Debts Adjustment Bill. It is based to a great extent on existing South Australian legislation and is designed to protect those worthy settlers., who, because of the low price of wheat, are to-day not able to meet their existing liabilities. I Avas very pleased yesterday when the Acting AttorneyGeneral (Senator Daly) Avas good ‘enough to lay on the table of the Senate the opinion of the Acting Crown Solicitor, that the legislation current in South Australia and desired in Western Australia, more particularly for the protection of the wheat-farmers in this time of stress, is valid. There is no doubt that the 8,000 wheat-farmers in Western Australia, as well as many farmers in other States of the Commonwealth, need assistance of a practical nature. In Western Australia the cupboard is absolutely empty, and under the provisions of the financial agreement entered into two or three years ago it is impossible for the State Government to give the farmers the assistance it otherwise would have been able to give thom. The credit of Western Australia has always stood higher than that of most of the other States and certainly higher than that of the Commonwealth, but the terms of the financial agreement prevent the State Government from obtaining the means by which assistance can be given to the settlers. Consequently, we are obliged to turn for that assistance to the Federal Government, which urged the farmers of Western Australia to grow more wheat. I hope that that assistance will be given by the payment of a bounty of at least 7d. a bushel, on the lines set out in the resolution adopted by the conference yesterday. If the Government faced its clear duty, and if finances were more plentiful than they are, it should be possible to carry out the request made by the organized farmers that the bounty should bo ls. u bushel; but a very definite and practical scheme for the payment of a bonus of 7d. has been put forward by the conference, and I hope that at. least, it will be carried into effect.
The position of the settlers is absolutely desperate. Previous speakers have pointed out how much higher the costs of production are to-day than they were when wheat prices were higher, and in those circumstances I hope that the Government will agree to Senator Lynch’s motion and accede to the request that has been submitted. Under natural conditions Western Australia, with its cheap land an’d good rainfall, could produce wl i eat cheaper than any other part of the Commonwealth if only the cost of production wore permitted by the Federal Government to bc decreased. The real point is that, Western Australia desires economic freedom. We desire to have a tariff of our own and control of our own affairs. It. is because of the burdens that have been placed upon us by the Federal Government that we submit the appeal made in Senator Lynch’s motion.
– I do not think that any honorable senator is likely to oppose this motion ; I certainly shall not do so. While I arn glad that Senator E. B. Johnston has testified to the sincerity of the Government, I am not able to reciprocate the compliment. I cannot admit that very much sincerity has been displayed by honorable senators opposite rejecting the Wheat Marketing Bill three or four months ago, and at this . eleventh hour, politically crawling back to the Government they previously flouted, seeking mercy for the constituents, whom, by their action, they virtually betrayed. That measure was designed to secure to the wheat-farmers, a considerable amount of assistance. It appears to me that these honorable senators who talk about unity in the interests of the country and the sinking of differences, displayed the very quintessence of partisanship in the attitude which they adopted towards the Wheat Marketing Bill. Senator E. B. Johnston has reiterated the weak excuses formerly advanced by him and his colleagues. They wanted to preserve economic freedom ; they objected to the terms of the guarantee suggested by the Government, because it was unfair to require the Governments of the less densely-populated States to bear their share of the guaranteed price ! lt must be remembered that, when the Government presented the measure to honorable senators, it offered to consider any reasonable amendment, no matter from whom it emanated. The objection that was most strongly urged by honorable senators opposite was the alleged encroachment upon individual freedom that would be caused by the formation of a compulsory wheat pool. I notice that our friends, the wheat-growers of Canada, have also been bucking for some years against the idea of compulsory pools; but circumstances have forced them into a recognition of its advisability. They are now dropping the term “ compulsion,” and are calling the project “majority rule.” At the same time they have adopted the plan.
In what I arn about to say I do not blame those honorable senators opposite who voted for the Wheat Marketing Bill. The others might well come to the Senate at this late hour and seek to redeem their crime by supporting this motion. If they refrained from taking some such action they would probably find themselves, at the next election, figuratively flogged from end to end of the country with the Wheat Marketing Bill. And they would thoroughly deserve that treatment. Here is the division list on the second-reading of that bill-
Question - That the bill be now read a second time - put. The Senate divided.
Question so resolved in the negative.
Those who were most violently opposed to the bill are now most earnestly advocating that some measure of support should be granted to the wheat-farmers. I am desirous of that assistance being given. I realize that the request by the
Government that farmers should grow more wheat places it under an obligation to assist them in the circumstances’. But I venture the opinion that it would have been much simpler to arrange assistance when it was proposed by the Government than it is to do so now, when the crop is practically upon the market. Honorable senators who arc making what is virtually a death-bed repentance cannot free themselves from blame in the matter.
I contend that the very essence of the contract offered by the Government under the Wheat Marketing Bill, under which the farmers were guaranteed 4s.a bushel, necessitated some measure of control on the part of the Government. It insisted on a compulsory pool to insure that the guaranteed price would go to the wheatgrowers and not to the speculators and wheat-dealers. Surely that was not an unreasonable condition. I believe in the utmost possible measure of individual freedom. If the wheat-growers had not approached the Government for a guarantee, and sought no State assistance, I should have been the last to seek to impose on them conditions which affected the marketing of their product. But the Government was prepared to take an enormous risk. It is futile for honorable senators to say that it could not have found the money. The fact remains that an agreement had actually been entered into with the Commonwealth Bank, which undertook to fulfil that liability.
If the Wheat Marketing Bill had been passed the Commonwealth Government would have paid whatever it guaranteed. The Commonwealth Bank Board has now stated that, after re-considering the whole position, it cannot commit itself to guarantees.
That is because the circumstances have changed. Three months ago I might have promised to lend an honorable senator a £5 note, becauseI happened to have one at the time. I could not make that promise now, nor could I be expected to redeem my earlier promise. Surely honorable senators realize that to spring a request upon a bank or a government when the money is wanted cash down, and the grain is actually being harvested, is a very different proposition from asking the institution to accommodate the producers after having had three or four months’ notice.
The PRESIDENT (Senator the Hon.
– I ask the honorable senator to confine his remarks to the subject before the Chair.
– No such proposal was ever made by me.
– Senator Guthrie referred to the efficiency of those engaged in the wheat-growing industry. I have been a wheat-grower myself, and I know something of the conditions of the industry. I remember that the price of wheat went down year after year until it reached 2s. a bushel. Indeed, some growers sold for ls. lOd. a bushel. I remind Senator Guthrie that efficiency is not confined to the owners of the land, whether pastoralists or wheat-growers; it applies also to the wage workers employed in those industries. It should be realized by the farmers and wool-growers who are asking for assistance that, although their employees have been suffering for some time, there is a movement to reduce their wages still further. Should assistance be granted to the farmers and wool-growers there must not be the slave conditions of labour which many who are now squealing because prices have dropped are advocating. Many of them were not overgenerous in their treatment of their employees when wheat and wool prices were high.
The comparisons which have been made between Australia and New Zealand are not such that we can base arguments on them, either for or against this claim for assistance. The position of New Zealand is so vitally different from that of Australia that tlie two countries are not comparable. It is not merely that New Zealand does not grow sufficient wheat for her own requirements, whereas Australia has a large exportable surplus. At one time New Zealand exported considerable quantities of wheat, but its people found lamb-raising to be more profitable than wheat-growing, and consequently they reduced the area under wheat. Moreover, the number of good harbours in New Zealand made wheat-growing in that country more profitable than it is in Aus-“ tralia, where good harbours are few and generally at long distances from the farms.
Nearly all the estimates of the cost of wheat production are in excess of the true figures, because they take into account land at inflated prices. The legislation which would be necessary to give effect to the State proposals, mentioned during this debate, to aid farmers who are in debt, would be similar to that suggested in a motion with which the name of the Minister for Health (Mr. Anstey) has been associated. Honorable senators opposite, however, describe the one as a proposal for a moratorium and the other as repudiation. They like to describe such proposals as repudiation when they emanate from members of the Labour party, but not when they themselves propose them. I shall not delay the passage of this motion by saying more, but I maintain that the difficulties now confronting the farmers are largely due to the action of honorable senators opposite who now ask the Government to do what they contemptuously refused to allow it to do not many weeks ago.
Senator Sir GEORGE PEARCE (Western Australia) [11.6].- The purpose of the last speaker is obvious; the honorable senator attempted to get his poisonous spray into the pages of Hansard for political use hereafter. His remarks were a reflection on those who support this motion - a reflection entirely undeserved. Those honorable senators who . voted against the Wheat Marketing Bill, and have been impugned by ‘the honorable senator, did. the greatest service to the wheat-farmers of this country that was possible for them to do. I should not be in order if I referred to that measure as I should like to do; I merely say that its nature was disclosed by one of its clauses. When the bill was before the Senate, Senator Colebatch pointed out that, in regard to the payment of u guaranteed price for wheat, the measure was almost certainly unconstitutional. The Government, therefore, inserted a clause providing that if any portion of the bill was found to be unconstitutional the remainder of the bill would not become invalid. There is no doubt that the proposal to pay 4s. a bushel would have been found to be unconstitutional, in which case the farmers, while not getting the guaranteed price, would have lost the control of their wheat.
– The right honorable senator is not in order in proceeding along those lines.
Senator Sir GEORGE PEARCE.You, sir, allowed Senator Rae to challenge the integrity of honorable senators on this side, and to say-
– I allowed Senator Rae to stray a very much shorter distance from the motion before the Chair than the right honorable gentleman has done. I ask him to confine his remarks to the motion under discussion.
– I submit that aspersions have been cast on those who voted against the Wheat Marketing Bill. That indeed was the whole purpose of the speech of Senator Rue. During the twenty minutes that he spoke he did not once refer to the motion before the Chair. I regard the honorable senator’s speech as an aspersion on myself, because I voted against the bill. I did so in the interests of the farmers of Australia. Surely, I am entitled to defend myself against the insinuation of the honorable senator that my vote was against the interests of the farmers! There is another point. Any one who knows the financial position of the Commonwealth to-day must, realize that it would be absolutely impossible for the Government, the Commonwealth Bank, or any other body to find the £15,000,000 which would be required to pay an extra 2s. a bushel on the present price of wheat to make up the guaranteed price of 4s. a bushel. I shall not go into details of the queer transaction to which Senate? Rae referred, nor shall I refer to the way in which the name of the Commonwealth Bank was used, excepting to say that a public inquiry into that matter would be justified. Should such an inquiry ever take place, it ‘ would reveal a different state of affairs from that suggested by Senator Rae. I rose simply to combat the statements deliberately put into Hansard by Senator Rae for the purpose of spreading political poison at a later date. I refute the statement that honorable senators who voted against the Wheat Marketing Bill and who vote for this motion will act inconsistently. As a matter of fact their action will be consistent with their desire to save the farmers from the fraud and deception which the Government endeavoured to practise upon them by means of the Wheat Marketing Bill.
– I take strong exception to the concluding remark of the right honorable senator and ask that it be withdrawn.
– The remarks should not have been made and must be withdrawn.
– I withdraw the word “ fraud.”
– The word “deception “ is equally objectionable.
– 1 withdraw that word and substitute “illusion.”
.- I regret that the Leader of the Opposition (Senator Pearce) has departed from the even tenor of the discourse on the subject raised by Senator Lynch. The debate was proceeding along peaceful lines prior to the right honorable senator’s speech.
– The Leader of the Opposition made his speech by way of personal explanation, because he felt that he had been accused of certain things by Senator Rae. The honorable senator who now has the floor has not been accused of anything, and I ask him to confine his remarks to the motion.
– I was deliberately setting out to do so. I am pleased indeed that at least one proposal of the Government has won wellmerited encomiums from honorable senators opposite. The motion moved by Senator Lynch, with which I heartily agree, and which I hope will he carried unanimously, is a tribute to the Government which, despite the set-back it received through the defeat of the Wheat Marketing Bill in this chamber some time ago, is persevering with its endeavours to do something that will benefit the wheat-growers of Australia.
I support what Senator Lynch and other honorable senators have said to-night about the difficulties which our 60,000 farmers are experiencing. These difficulties have not been exaggerated in any respect. We have formerly had our periods of depression, drought and low prices, but there has never before been such a combination of oppressive circumstances facing our agriculturalists. The difficulties of our farmers are hanging over them to-day like an impenetrable cloud. The boom period of a few years ago has really accentuated the present depression. In those days the price of land rose very high and farms changed hands under conditions which caused the original holders to accept substantial mortgages from the purchasers. With the drop in the price of land and the low price for wheat which now prevails, a good many farmers who purchased land 5n the boom period are finding the utmost difficulty in meeting their commitments. “The position became so difficult in South Australia that, as Senator Johnston has pointed out, the State Government passed legislation, applicable particularly to farmers, which granted something in the nature of a partial moratorium. The measure is known as the Debt Adjustment Act. I believe that the “Western Australian Government intends placing a similar measure on the statute-book. An officer of that Government was in South Australia some time ago making inquiries into the whole matter.
– The bill was passed by the Legislative Assembly yesterday.
– It is amazing to me to find such marked differences of opinion among honorable ‘ senators opposite on this subject. Senator Pearce referred this afternoon to an allegation that one of the members of the Labour party had advocated the passing of a kind of national Debt Adjustment Act containing similar conditions. On the other hand, Senator Johnston commended the South Australian Government for what it had done to enable the farmers to evade their liabilities for the time being, for that is what the act does in the final analysis. Under the terms of that act a farmer who is in debt may apply to the court for an order which, if granted, will relieve him of the obligation to pay his debts for the time being. Under the South Australian act the farmer is placed in the same position in which the Leader of the Opposition (Senator Pearce) says the nation would be placed if effect were given to the alleged proposal of a member of this party.
South Australia has been hit harder, proportionately, than any other State through the present depression. Some districts in that State have just emerged from a most severe drought. Two hundred or 300 farmers who were settled in one district five or six years ago have not reaped a crop for three years. Some of the settlers, as a matter of fact, have not reaped a crop since taking up their holdings. They have obtained super phosphates and seed wheat from the Government each year under the conditions of the Drought Relief Act, but have had no return whatever. It is particularly unfortunate, therefore, that in this year, when they will obtain a comparatively good return from that class of country, the price of wheat should be so low as to prevent them restoring their fortunes at least to some extent. The district in. which I live had suffered from four years’ drought, which broke only this year. I purchased my seed wheat this year for 4s. 9d. a bushel, and it looks as though I shall receive only about 2s. a bushel for my crop. I can, therefore, assure honorable senators that Senator Lynch has not described too vividly the sufferings of the wheatfarmers.
I disagree with the suggestion that if the Wheat Marketing Bill bac! been passed the difficulties of the farmers would have been increased, and also with the statement that the bill was unconstitutional. Had the measure been passed it’ would not have involved the nation in the huge loss which its opponents allege would have occurred. If the farmers of South Australia., for instance, had been paid the guaranteed price of
It is idle for them, at this stage, to make any pretences. They definitely rejected the measure in principle. If they had allowed the bill to go into committee, and had moved amendments for its improvements, or to remove its alleged disadvantages, we could have understood their a ttitude.
– An attempt was made to do that in another place.
– An attempt could have been made in this chamber where honorable senators opposite are in a majority. Will they deny that an effort could have been made?
– I ask the honorable senator to discuss the motion before the Chair.
– I am afraid that the immediate prospects of the wheat market are not very bright; but I am not at all despondent as to what will ultimately happen. I believe that there is a good deal of doubt as to whether the huge quantity of wheat supposed to be available in Russia actually exists. The published reports on this subject are inconsistent. For instance, a few months ago, we were informed that there were 100,000,000 bushels of wheat on the way to Great Britain, whereas, on the 15th October, information was received from an authentic source - a Minister of the present British Government - that for July, August, and September, the shipments totalled only 5,000,000 bushels. A few days later, we were informed by Mr. W. R. Blair, a director of the Co-operative Wholesale Wheat Proprietary Limited, through the newspapers of the 20th October, that practically the whole of this small quantity was inferior wheat that could be used only for poultry food, and that very little of it was of a sufficiently good character to enter into competition with English wheat for gristing purposes.. Senator Lynch referred to the reported sale of Russian wheat in America. I understand that the American tariff on wheat is 42 cents., or, roughly,1s. 9d. a bushel. The price at which Russia can sell wheat in America is about 3s.5d. a. bushel, and how the Russian producers can dispose of their product in that country with a duty of1s. 9d. a bushel at aprice of 3s. 5d. is difficult to under stand. I do not know how they would meet the ordinary transport charges irrespective of, at least, some payment to the Russian producers.
There is a good deal of uncertainty concerning some of the wheat reports that are coming to hand. I believe that speculators are purchasing wheat to provide the requirements of the couutries they represent, and are taking advantage of the Russian scare to stampede the farmers into selling at a ridiculously low price. That is an additional reason why the Senate should carry this motion and give its whole-hearted support to whatever action the Government may take to assist the primary producers. I am confident that there will be an improvement in these prices in a couple of years. I base that contention upon a study of wheat prices over a long period. I have before me a table, which I quoted on a previous occasion, prepared by the South Australian. Statistician, showing the average price of wheat over a 67-year period was 4s. 9¾d. It is interesting to note that during the whole of this time there were only five seasons when the average price fell below 3s. per bushel, and there was only one instance in which it was as low as it is to-day. There were never more than two seasons in succession in which the average price remained consistently low. I believe that the present world surplus of wheat is due to a combination of circumstances, which will disappear this, or next, year. The principal factor is abnormal harvests in the northern hemisphere, and in a portion of the southern hemisphere. For the past four years, the wheat-producing countries in the northern hemisphere have broken all records. Just as these countries have had cycles of good seasons, so they will have cycles of poor seasons which should result in improved prices. Possibly, the comparatively low price prevailing to-day will discourage, to some extent, the production of wheat, because it is obvious that in Australia, at least, wheat cannot be profitably produced at world’s parity. As mentioned by Senator Guthrie, the most efficient methods are employed in Australia; and, generally speaking, they are superior to those of any other country. Further, it has been reported that the crops in Canada have been seriously affected by , heavy falls of snow. The statement is apparently authentic that J 00.000,000 bushels :of wheat are at present under snow in Canada. That means that the wheat will not be harvested in gristable condition, because it will be months before it is available for threshing. These facts ought to be impressed upon the farming community of Australia so as to give them some hope for the future. 1 believe that the farmers, despite their difficulties, will continue to fallow and grow wheat, and will eventually be rewarded for their perseverance and energy. In the meantime this Parliament and the State Parliaments in co-operation, are in duty bound to give the farmers the maximum assistance to carry them over the difficult period through which they are now passing. I feel confident that the Government will hearken to the pleading of Senator Lynch and other senators, and do all that it. possibly can to assist the agriculturalists of Australia.
– I regret very much the heat that was shown by the right honorable the Leader of the Opposition, when replying to the arguments adduced by my colleague, Senator Rae. The damage has been done and there is no need for us to go into the wheat belts of New South Wales or of the other States to explain the exact position to the people there. There is no doubt that the position of the wheat-farmers, not only of Western Australia, but also of South Australia and New South Wales, warrants the careful consideration of the Government. Senator Lynch, speaking on this subject a few days ago, said, jocularly, that I was a trades hall wheat-farmer, hut I would remind him that I have spent many weary hours working in the wheat belts of New South Wales and New Zealand, and that I know the conditions of farming as well as he does. A few weeks ago there was a meeting, of 32 store-keepers at a place called Barellan in the Riverina. At that meeting it was learned that their liabilities for goods supplied to the farmers of the Riverina amounted to the huge sum of £1,090,000, and not £1,250,000, as stated by Senator Lynch. Those store-keepers ‘ gave credit to the farmers because of the promise of a guarantee of 4s. a bushel for wheat as sent over the wireless by the Scullin Government. Many wheatfarmers in South Australia and Western Australia are in a plight similar to that, of thu farmers of New South Wales. Senator Lynch referred to Russian wheat. I have before me an example of the Country party’s propaganda against the Labour party at the last elections. It is a double column advertisement taken from the Wagga Advertiser, and is to the effect that the Labour party is out to ruin Australian farmers and is the friend of the Soviet. This pernicious propaganda was signed by Colonel Munro, General Secretary of the Country party of New, South Wales. I am indignant to think that British investors in wheat have purchased Russian wheat, in view of the fact that Russia repudiated its debts to Great Britain to the extent of £940^00,000.
– Great Britain owes Russia ju3t as much.’
– I am not concerned about that. I am concerned about the repudiation of £940,000,000, and the fact that British investors have sent over 500 British vessels, to the Black Sea ports to lift surplus Russian wheat grown under the rule of the Soviet Government. That has been done, notwithstanding the fact that Australia made terrific sacrifices during the Avar and that, because of the low price ruling for wheat. our farmers are practically destitute. This Government endeavoured to do the right thing by the farmers but was prevented from doing so by honorable senators opposite. The Leader of the Opposition (Senator Pearce) rose a moment ago to vent his wrath on my colleague, Senator Rae, but surely he is entitled to air his opinions so long as he does not transgress the Standing Orders. This Government has every sympathy with the farmers, and in this regard let me quote a few remarks from an article appearing in the Sydney Morning Herald of to-day’s date. It reads -
Opening the conference, Mr. Forde said that he had convened it at the request of two State Governments, a large number of members of the House of Representatives on both sides, and a great number of farmers’ organizations .throughout Australia. It had been convened to make a survey of the wholewheat industry, to arrive at a scheme to help wheatgrowers out of their parlous condition. “ Believing that it is impossible for the growers to produce wheat at present prices,” said Mr. Forde, “ I made up my mind before coming to this conference to interview the Commonwealth Bank Board to ascertain whether it would be possible to induce the bank to pay a larger first advance than 80 per cent. of the market value of the wheat.I suggested a first payment of 2s., but the bank definitely stated that after considering the present market value and the future prospects, together with the finances of the country, it was not prepared to give a higher advance than 80 per cent The board pointed out that all available resources were required for the financing of ordinary governmental activities. That is the presentposition, andI though it would be best to put it before you frankly.”
All honorable senators will agree that the wheat-growers of Australia are in a bad way, and all, Iam sure, are anxious to do what is possible to help them. The Government has done its part in the past and it will continue to do so in future.
Question resolved in the affirmative.
– I move -
That the Senate do now adjourn.
Yesterday, on the motion for the adjournment, the right honorable Leader of the Opposition (Senator Pearce) asked me when I would be able to make a statement relating to the December conversion loan. I now direct the attention of honorable senators to the fact that the Government is issuing immediately a conversion and redemption loan, the main purpose of which is to provide for the conversion of the 6 per cent. Commonwealth loan which falls due on 15th December. At the same time, cash subscriptions are being invited to pay off those holders in the maturing loan who are unable to convert, and also to provide for shortages that have occurred in the conversion of certain State securities. The loan has been sanctioned by the Australian Loan Council, and the terms which have been approved are in accordance with recommendations that have been made by the CommonwealthBank. Investors are being given the option of three currencies, namely: - A two years’ currency carrying interest at 6 per cent. per annum, a ten years’ currency at 5¾ per cent., and a twenty years’ currency at 5½ per cent. These terms will apply both to conversions and cash subscriptions, and have been designed to meet the convenience of all investors.
Question resolved in the affirmative.
Senate adjourned at 11.43 p.m.
Cite as: Australia, Senate, Debates, 13 November 1930, viewed 22 October 2017, <http://historichansard.net/senate/1930/19301113_senate_12_127/>.