12th Parliament · 1st Session
The PRESIDENT (Senator the Hon. W. Kingsmill) took the chair at 3 p.m., and read prayers.
– I ask the Leader of the Government in the Senate if his attention has been called to a report in the Sydney Sun of a meeting of federal public servants, held in Sydney on Monday last for the purpose of protesting against the salary reduction, at which Mr. C. L. Arter, secretary of the 4th Division Postmasters Union made the following statement : -
He had been informed earlier in the evening bya Federal Minister that the Scullin Government purposed amending the Salaries Act of 1907, so as to debar the State from taxing Commonwealth public servants.
I should like to know if such is the intention of the Government?
– I saw something in the press in regard to the matter, but I can assure the honorable senator that the measures which will bo submitted by the Government postulate that public servants and others will becalled upon to carry their share of Australia’s burden.
– On the 11th June, Senator Thompson asked the following question, upon notice: -
In view of Central Queensland’s possession of vast coal seams of groat variety, including brown coal, bituminous coal, anthracitic coal and semi-anthracitic coal, will he endeavour to ascertain if such coals are suitable, and in what varying degrees, for the extraction of petrol by the hydrogenation process ?
The matter was submitted to the Council for Scientific and Industrial Research, which has advised that it has not available to it the experienced personnel and extensive apparatus required for an investigation to determine the suitability of coals as raw material for the hydrogenation process. Moreover, in addition to the actual behaviour of a coal in the hydrogenating apparatus, many other factors, e.g., proximity to markets, the possibilities from the point of view of by-products, &c., are involved in deciding on whether a particular coal deposit could be commercially exploited by hydrogenation. Suggestions have been made from time to time that some Commonwealth body, such as the Council for Scientific and Industrial Research might carry out asurvey of Australian coal beds to determine their nature, suitability for low temperature carbonization, &c, on a somewhat similar plan to that being followed by theFuel Research Board in Great Britain. No funds are, however, available for such an Australian survey.
Great Britain to Australia
– On the 26th June, Senator Foll, addressed to the Minister representing the PostmasterGeneral the following questions, upon notice : -
I am now in a position to inform the honorable senator as follows: -
– On the 26th June, Senator Foll asked the following question, upon notice -
What would be the annual saving to Australia if the Australian Navy werehanded over to the British Admiralty and a subsidy paid to Great Britain to cover the cost of providing the same amount of naval protection as is provided by our present fleet?
I am now in a position to inform the honorable senator as follows: -
Any savings soeffected would be dependent upon the amount of subsidy that would be required by ‘ the British Admiralty. The Admiraltyhas not been approached on the subject, and no action in that direction is contemplated.
– On the 26th June, Senator Foll asked the Minister representing the Minister for Markets the following questions, upon notice -
I now furnish the following replies. -
PURCHASE of MATERIALS.
– On the 26th June, Senator Cooper asked the Minister representing the Minister for Trade and Customs the following questions, upon notice -
I have consulted the Minister for Markets, who is dealing with this matter, and now furnish the following replies to the honorable senator’s questions : -
asked the Minister representing the Prime Minister, upon notice -
If any new money is required for the new government loan, will the Commonwealth Government communicate with the New South Wales Savings Bank Commissioners with a view to their releasing for subscription to the loan, money held by them?
– The right honorable the Prime Minister has furnished the following reply to the honorable senator’s question: -
It is understood that the funds of the New South Wales Savings Bank are already fully invested, and are, therefore, not available for subscription to a new loan.
Is it a fact that an order has been issued by the Government or by a Minister to suspend the issue of licences under the Transport Workers Act 1928-1929?
Is it a fact that in some cases licences have been renewed, and that in other cases a renewal has been refused?
What is the intention of the Government in respect to these licences?
– The answers to the right honorable senator’s questions are as follow: -
The following paper was presented: -
Public Service Act - Regulations amended - Statutory Rules 1931, No. 75.
Assent to the following bills reported : -
Northern Territory (Administration) Bill (No. 2).
Supply Bill (No. 1) 1931-32.
Seat of Government (Administration) Bill (No. 3).
Guarantee of 3s. per Bushel.
.- I move-
That the Senate is of opinion that the pledge given to the wheat-growers, by means of an act passed by the Commonwealth Parliament, for the payment of 3s. per bushel for all wheat grown in the year 1930-31, should be redeemed.
I wish it to be understood that I do not expect literal effect to be given to this motion. Whatever action that may be taken need not follow on its lines. My purpose is to direct the attention of the Senate to the desperate position in which our wheat-growers find themselves. The story of recent happenings in connexion with the wheat industry in Australia is a disheartening one, but I hope still that the Government and Parliament will do something for the wheat-growers. They have been much talked about, much sympathized with, and much patronized, and lavish promises have been indulged in with respect to them; but up to date nothing has been done on their behalf. They stand where they stood before anything was promised to them, or any reference was made to their condition. In fact, they have obtained nothing from either the Commonwealth Parliament or the Commonwealth Government since the Federation was inaugurated. Perhaps that is rather a sweeping statement to make; but I invite contradiction. Other industries and other sections of the community have had substantial help from successive governments of every political complexion, but the wheat-grower of Australia, as such, has received no attention of a sympathetic nature from any Government or Parliament. He has certainly been paid attention by the Commonwealth tax gatherer, who has never lost sight of his address when it has been a question of raising money; but when it has been a question of compensating him in one form or another, either directly or indirectly, each successive government has forgotten his address.
The benefit o£ this particular individual and class to Australia is well recognized. The number of wheat-growers in Australia is variously estimated at between 60,000 and 70,000 adults; and if we add those who are associated with wheatgrowing interests, it is safe to assume that at least half a million adults in this country depend for their living either directly or indirectly upon the wheatgrowing industry. A comparison with those who are connected with other industries enables us to understand the monumental nature of the neglect that has been meted out to this worthy section of our community, and particularly at a time when it stands so much in need of assistance. It is fresh in our memory that recently, when the depression was descending upon this country and when it was thought that the only way of either warding it off or of easing its effects was to call for greater effort, only the wheatgrowers were appealed to. What form did that message take? It is fresh in everybody’s mind. It was “ Grow more wheat, and still more wheat, because only by so doing will every section and every industry in Australia be able to cope with the difficulty into which the country is steadily but surely drifting”. The Government did not appeal to the manufacturing industries. Why did it leave them out of account? It did not appeal to any form of protected industry. There is no reason why it should not have appealed to, for example, the coalminer, and asked him to hew more coal, so as to recover our export trade in that commodity, which at one time was valued at about £10,000,000 per annum, but which now no longer exists. There was no appeal to the manufacturing industries to produce more steam engines, frying pans, or any other of the various articles that are produced in this country and would help us to recover our last financial balance. The wheat-grower was singled out to save Australia from sinking; and what did he get. in return? Nothing except lavish promises. Had he been able to live on promises he would now be in a more satisfactory position than any other element in the community.
But no individual or industry can live on promises. Had it been left to the wheat-grower, he would gladly have refrained from appealing to this Parliament, because he typifies the sturdy pioneering spirit that has raised Australia to its present level without any special help or consideration. He is an independent man. He does not live on the doorstep of Ministers, as some elements do, asking for this, that and the other favour. He keeps in the background, with his head bent over his plough, his cultivator, or his thresher. He maintains a lonely isolation and seclusion, and scorns government patronage of any kind. But he is now forced to ask for assistance, because desperate circumstances are pressing upon him more heavily than upon any other section of the community. He is being driven off his holding, and living on the forbearance of his creditors. His existence is that of a person whose circumstances are those of the utmost penury. I recognize, of course, that there are other sections of the community whose conditions are probably equally as bad. I do not overlook the fact that many of those who are unemployed are worthy citizens. At the same time, however, there is a large number who have left work so as to live on the dole, and who ought to be compelled to be at work. That is well known. But the case of the wheatgrower is different. He is in the position of either leaving ids home and joining the ranks of the unemployed, or of obtaining some assistance from this Government and this Parliament.
This is the fifth occasion upon which the position of the wheat-grower lias been dealt with by this Parliament by way of either legislation, attempted legislation or resolution, yet nothing has been done to assist him. In the first place, a’ measure known as the Wheat Marketing Bill was passed by another Place, and sent ito this chamber, where it was rejected. I do not propose to enter into ihe why and wherefore of its rejection, further than to say that if the purpose of the Government on that occasion was honestly and genuinely to assist the wheat-grower, the attempt to do so ought not to have been loaded’ with extraneous conditions, which certainly were responsible for the rejection of the measure. A man who felt disposed to help his1 neighbour would do so directly, without attaching to his offer conditions’ that would make it impossible of acceptance. I am sure that, in the light of after events, no one was more thankful to> the Senate- than the Government of the day for its action in rejecting . that piece of legislation. Had it been passed, neither the’ Commonwealth. Government, nor the Governments of the States know where they would have been landed. They could not have raised the differencebetween the realized price of wheat and that which the measure stipulated should be paid to the grower. A small State like Western Australia would have had to find an extra £2,500,000. Had that bill been passed by both branches of the legislature’ it would have been, necessary to raise at least £16,000,000 to give effect to its declared purpose. That measure, which was. rejected in this chamber,, was loaded with certain fantastic conditions by a government, which has not the true interest of the farmers at heart. Later, the Government, in its endeavour to give effect to the sympathy which) it is alleged to have towards the wheat-farmers, introduced a Wheat Advances Bill, which was passed by both. Houses, and. the farmers,, whose hopes were then- raised high, expected to receive 3s. a bushel f.o.b. They all thought that, as the bill had been, passed by Parliament, at least an additional’ 6d. per bushel would be available; but, on making further investigations, the Government found that effect could not be given to the bill, which it had fathered. Although the wheat-farmers had made contracts and entered’ into certain business arrangements in expectation of receiving an- extra 6d. per bushel on the faith of an act of Parliament, such contracts and agreements had to be abandoned, and the wheat-farmers were again left in the lurch.
Early this year a proposal was submitted for the payment of a bounty of 6d. per bushel on wheat, and on that occasion I believe the’ Government was honestly endeavouring to help the farmers. That proposal, which was also saddled with a fantastic proposal of providing help by the issue of fiduciary notes, has been abandoned by the Government. The wheat-farmer has always been the pawn in the game. Although the- Government has professed to be sympathetically disposed towards the wheat-grower, most of the proposals submitted to- this Parliament have- been! . . loaded* in such a way that their acceptance has- been impossible. Some time later the Senate unanimously passed a resolution, reading - “ That the Senate is of the opinion that substantial assistance should be given to the wheat-farmer’s of Australia.”’ On that occasion the Government, in its liberality, wisdom, and an appreciation of the. need’s of the wheat-growers, supported, the motion. Although that proposal met with the general approval of the Senate, nothing has yet been done.
– There is insufficient money. .
– I remind Senator Ogden that the last conversion loan of £28,000,000 was successfully floated, andweprided ourselves upon the fact that the people of this country were determined to maintain the financial status, independence ^a-nd solvency of the country. It is true that a large percentage of that loan consisted of conversions, but £14,000,000’ was1 provided with the object of assisting the Government in its difficulties. In those circumstances, surely it would not have been’ impossible to raise £3,000,000 or £4,000,000, which is all that would have been involved, to provide some relief to the wheat-growers. I do. not admit that the resources of thiscountry have been strained’ to such a point that it is impracticable to raise sufficient money to afford- some relief to this worthy section of the community. I sincerely trust that some proposal will be submitted at an early date, because, as I shall show presently, if prompt action is not taken. the1 wheat-growing industry of Australia will be reduced to a state too depressing to contemplate.
I have before’ me a list of Australian industries which have been assisted, by successive parliaments: I do not propose to read it because it is rather long, and as it has already been placed on record. Practically every industry in Australia has been helped with the exception of the one on whose behalf I am now submitting a plea. Until recently the gold-mining industry had also been neglected, but lately it has received some attention, the benefit of which will not be realized for some time.
– Does not the plan adopted at the recent conference of Commonwealth and State Ministers provide for a loan to assist the wheat-growers?
– It is proposed to make £2,500,000 available to assist the wheat-growers, and £6,000,000 for the benefit of the unemployed. For the information of Senator Kneebone and other honorable senators. I may state that, if the amount proposed to be spent in relieving unemployment were used in stimulating industries such as the one I am treating upon, more employment would be provided than under the system which the Government has in view. It was suggested by Senator Barnes quite recently that, if the Fiduciary Notes Bill were passed, the Government might spend a fairly large sum in extending the sewerage system in the metropolitan areas of Sydney. What direct or indirect benefit could possibly follow the expenditure of money upon such work? If the same amount were spent in a foundation industry, trade activities would increase, and the whole community would benefit. Support should be applied at the base rather than at the top. Money should be spent to assist industries such as the wheat-growing industry rather than upon an unproductive undertaking such as that mentioned by Senator Barnes which, if carried out, would only further convenience citizens who are already well provided for. The city dwellers do not want any more coddling, but the outback yeomanry are in need of practical sympathy, in order that they may keep solvent. If we assist them to prosperity then the prosperity of the city dwellers will follow as a matter of course. That argument has been used so often that it is superfluous to bring it forward again. Whatever assistance we give must be given wisely, so that the greatest good will result from it. No good to the community as a whole will be accomplished by a sewerage system or other like undertaking.
I shall forbear to give the long list of industries which have been assisted in one way or another, but shall endeavour to point out the great value of the wheatgrowing industry to Australia. Honorable senators know well the anxiety shown by city merchants and others regarding conditions in the country when Australia is visited by one of its periodical droughts. When railway earnings are low, the railways commissioners in the four wheatproducing States turn with interest to the wheatgrowing areas to ascertain whether the harvest is likely to be good or bad. If the seasonal prospects are favorable, and a good harvest is expected, they feel that there is a chance of the railways receipts equalling the expenditure. Similarly almost the first question asked by intelligent people of a person returning to the city from the country, or of a country dweller visiting the city is, “How are the crops”? Merchants in the four wheat-producing States- know that if the seasonal conditions in the country are good there is a prospect of good business being done by them, because conditions in the country are soon reflected in the city.
Queensland is not a big producer of wheat, but that State has its sugar industry. I only wish that wheat were treated as sugar is dealt with.
– The honorable senator says that without envy?
– There is no envy in my nature. Honorable senators who are acquainted with my 25 years’ record in this Parliament will know I wish the sugar industry well. Nevertheless, I feel that that industry has been treated rather too generously of late; but it is not in my nature to cut that industry to the bare bone. I realize that men who have gone into the jungle land of Queensland to reclaim it for the benefit of Australia are more entitled to paternal treatment by the Government than are those persons who live in the pleasant places of Australia, and by living as it were on the doormats of Ministers get all that they want.
The condition of the wheat-growing industry to-day can be gauged fairly accurately from a study of the quantity of superphosphate distributed. Unfortunately, wheat-growing in Australia cannot be carried on successfully without the use of superphosphate. In that respect our competitors in Canada, the United States of America, and particularly in Russia, that home of King Demos, do not know the need for superphosphate. Assuming that the quantity of superphosphate distributed is a fairly reliable indication of the area under wheat, and also that the average dressing per acre has been applied this year, it would appear that about only one-half of the area sown last year will be planted this year in New South Wales. It may be that a somewhat lighter dressing of superphosphate has been applied this year, and that, therefore, the area is a little more than I have stated.
– In many cases the merchants who supplied the superphosphate have not been paid.
– I have no complaint to make against the merchants. The manufacturers of superphosphate, like other manufacturers, live by selling their products. Both they and their agents have had to take certain risks.
– They have given liberal credit to the farmers.
– I am aware of that. I am not complaining of their treatment of the farmers. I have merely used the quantity of superphosphate issued as the prospective basis of calculation to show the acreage under wheat. The position in Victoria is much the same as in New South Wales. Last year 4,600,000 acres were sown with wheat in that State, whereas it would appear that this year that area will be reduced by 1,300,000 acres. The issue of superphosphate in Victoria this year is only 56 per cent, of that of last year. I shall not give the figures for Queensland, because that State obtains cheap wheat from the southern States, and I do not desire to raise a hornet’s nest by referring to the industries of Queensland. South Australia had under crop last year over 4,000,000 acres, but this year a reduction of that area by .420,000 acres is likely. The quantity of superphosphate distributed this year in South Australia is only 65 per cent, of last year’s distribution. Western Australia is in much the same position. It would appear that this year the area under wheat will be 956,000 acres less than the 3,900,000 acres sown last year. Only 67 per cent, of the quantity of superphosphate distributed in that State last year has been sent out this year. It may be that the recent rains will alter conditions somewhat in certain localities in the wheat-growing States. When the estimates which I have given were prepared on the 31st of May, one month of the planting season still remained in many districts. The heavy rains in the eastern States may have necessitated the postponement of the sowing of certain areas ; but in Western Australia I anticipate that the complete programme will be carried through. On the assumption that the dressing of superphosphate has been the same as in previous years, it would appear that only little more than half the area sown last year has been placed under crop this year.
– Is the basis of the superphosphate distributed a fair one, having regard to the season?
– There are other considerations which, perhaps, ought to be taken into account, but I have not considered them in my calculations. I think that I have made it clear that, on the basis of the superphosphate supplied, the area under wheat in the Commonwealth this year will be very seriously reduced.
It is about time we asked ourselves what is going to happen when all talk is finished, and the well of sympathy has run dry. At any rate, it is the last occasion on which I propose to ask the Senate to record an emphatic declaration, even at the eleventh hour and the fifty-ninth minute, in support of my proposal which should have a beneficial result on every section of the community. The money would be spent in the country-side, and not on the sea-coast. Within the last four months, during my journeying from Canberra to my home in Western Australia, I have witnessed the spectacle of seaweed being gathered up and sea-walls constructed by unemployed to make the seashore a bit more pleasing to the eye. The men would have been far better enengaged on reproductive work such as scrub-cutting and road repair work in rural areas.
At considerable trouble, aided, of course, by most reliable authorities, I have compiled figures to show the almost desperate condition of the wheat-growers based on the realized price of their product to-day compared with what it was in previous years. The average f.o.b. price at any port in Australia during the five years before the war was 3s. 8£d. a bushel. During the post-war boom from 1920 to 1925, the price rose to 6s. 2d. In the succeeding five years, it dropped to 5s. 2d. It is now 23. Id., practically half what it was in the five years before the war.
The wool-grower has my sympathy; he is in a very bad way at present: but his position is not as bad as that of the wheat-grower. In the pre-war period from 1912 to 1914 inclusive, the average gross price of wool in Australia was 9.5d. per lb. In 1920-21, the price was 12.1 5d. and during the boom years from 1922 to 1929, it rose to 19. 5d. Last year, it dropped to 10.2d., and now it is back again to the pre-war level of 9.5d. The last-mentioned figure, of necessity, includes the exchange advantage. If the exchange rate were deducted, the wool-growers of Australia would be in a very bad way, but the present price of wool is, at any rate, what it was in pre-war years, whereas the price of wheat is barely a little over half what it was in that period.
– What is the exchange advantage to the wheat-grower?
– It is about 6d. or 7d. a bushel. These figures show that the position of Australian wheat-growers and wool-growers is anything but rosy.
Varying estimates have been made of the cost of growing wheat. It is affected by many circumstances such as location, district conditions, quality of land, personal attributes, and so forth ; but Professor Perkins, of Adelaide, who is very cautious in his estimate, gave evidence before the Public Accounts Committee as to the cost of producing wheat under present circumstances. He based his estimate on the following interest items: -
Compare 5s. Id. with the ls. lid. which I have received for my wheat this season. According to Professor Perkins’ calculation there is a loss of over 3s. on every bushel of wheat grown.
The farmers’ position is clearly most unenviable. I have figures setting out that bankruptcies, assignments and other arrangements with creditors amongst farmers show an alarming increase of up to 50 per cent, in some States on the 1928-29 figures. Mr. Johnston, in South Australia, secured reports from 80 farms in various parts of the State, and summarized the material thus collected as follows : -
These reports show clearly that farmers generally are not in a position, even if they desire to do so, to engage labour on any liberal basis, owing to low prices and hitherto poor crops. The supply of labour has greatly exceeded the demand. Many farmers are working their holdings with their own families, and helping each other. Even those farmers with large properties are employing as little assistance as possible. A large number of hands,- mostly single young men, have been working for their keep, with or without a few shillings for wages or a small share of the crop. This accounts for the lowness of the averages.
The average weakly wages paid are shown to be -
This downward trend of wages in South Australia, as shown by Mr. Johnston’s figures, is most deplorable. I should like to see every farm labourer of to-day become the farmer of to-morrow, so that we may have in this country a sturdy yeomanry insuring, not only our financial success, but also our national stability. But when we find that the farmers are not able to give employment, or can give it on only the most meagre basis, it is quite clear that wheat-farming in South Australia, as well as in every other State, is in a, most helpless position to-day.
At Bathurst, in New South Wales, a little while ago, a conference was held. It was convened by the State Government; and the wheat-growing interests and all intermediary interests were represented. The conference came to the conclusion, after going into the matter very exhaustively, that the cost of producing a bushel of wheat to-day is 4s. Old. a bushel. Compare that figure with the average price realized in Australia of ls. lOd. Clearly, the wheat-farmer is suffering a loss on every bushel of wheat he produces. The question naturally arises: why does he continue? He does so because he has nothing else to do, and because of the prospect that prices may take a better turn in the future. He is living on hope and credit. Messrs. H. K Nock, W. W. Watson, C. Luckett, and E. Field investigated the industry. To arrive at the cost of producing wheat, they took the value of land at £6 10s. an acre, which is not an out of the way figure, and valued at £750 the working stock and plant required to work a farm of 700 acres, the actual area under cultivation being 400 acres. They allowed £40 for casual labour. Any one who has had practical experience of farming knows that, with adequate machinery and horse power, one man can farm about 300 acres without much help. Of course, he would not have very much time for other work. These gentlemen took into account such items as bags, twine, fire and hail insurance, workers’ compensation costs, shire rates and taxes, the value of 400 bushels of pickled and graded wheat and superphosphates. They allowed 40 lb. of superphosphates to the acre, a quantity which I consider far too low. But had they raised the quantity to the 90 lb. always recommended by the Agricultural Departments iu the different States, their final cost would have been increased beyond 4s. 0½d. They found that the total income waa £983 14a. 4d., from which is deducted £90 as income from 200 ewes, a very necessary accompaniment to wise husbandry. They estimated the net return at £1,187, which, based on a twelve-bushel average, represented a bushel cost of 5s. 6d.
These estimates, I remind the Senate, were supplied by experienced wheatgrowers in South Australia and New South Wales. I have not any figures relating to the cost of wheat production in Victoria, but I understand that it approximates very closely to costs in the two States mentioned, and I know from experience in Western Australia, that the cost of wheat production in that country averages about 4s. a bushel. Since the price realised on the farm is in the neighbourhood of 2s. a bushel, it is obvious that our growers are producing at a loss and must be living either on their capital or on the credit of those who are optimistic enough to supply them with the wherewithal to carry on.
In view of these facts, I am hoping this Parliament’ will, some day, do something for our primary producers. Up to the present their interests have been shamefully neglected. A few years ago the Bruce-Page Government appointed a committee of four experts to inquire into and report upon the effect of the fiscal policy of the Commonwealth upon the industrial, financial and economic position of Australia. After a careful examination of all relevant material, the experts mentioned reported that the protection policy had added 20 per cent, to the value of the output of the protected industries, which was estimated to be in the neighbourhood of £150,000,000 per annum. Singularly enough the output of the unprotected industries, comprising for the moat part our primary industries, was also estimated at £150,000,000, but while protection increased the value of the output of secondary industries by £29,000,000, the unsheltered primary industries received no benefit whatever from the operation of that fiscal policy. There was a time when all protagonists of a protectionist policy believed that the meru imposition of a tariff would result in abounding prosperity. But times have changed. The majority of the high protectionist disciples have recanted in recent years. They have seen the system in operation, and have come to realize that the primary producer, that patient beast of burden who has carried this country on his back for so long, can be prodded no longer. Even such one-eyed advocates of protection as the Sydney Bulletin, and the Melbourne Age must now acknowledge that for many years they have been preaching a false doctrine.
– Does the honorable senator suggest that freetrade is the best policy for the Commonwealth?
– No. I have never preached freetrade, and I never will until the standard of living in other countries is as good as our own. So long as there are inequalities in the social standards of people of different nations it is essential, if we are to safeguard the interests of our own people, to maintain a reasonable measure of protection for our industries. This is one reason why I have given support to proposals for the protection of the sugar industry in Queensland and incidentally have drawn down upon myself a considerable amount of criticism in Western Australia in consequence. But we must be prepared for this treatment at all times. This is why I am now stating the case for our wheat-growers in the hope that it will receive sympathetic consideration at the hands of honorable senators representing the non-wheat-growing States. We have a good case for those engaged in an industry which, up to the present time, has been cold shouldered by the Federal Parliament, while secondary industries have had more than their fair share of government patronage and favouritism.
Let us examine the wheat position and see what an addition of 20 per cent, to the value of the output would mean to our primary producers, assuming that the protection conferred- on secondary industries were extended to it. The wheat yield for last season was about 200,000,000 bushels. In normal years, we require about 50,000,000 bushels for seed, feed, and other domestic uses, so that we should have an exportable surplus of about 160,000,000 bushels. At an average price of 2s. a bushel, the gross return would be approximately £16,000,000. We know, from personal experiences, that the actual return must be lower than that figure. If the gross return was increased by 20 per cent. - the benefit which we are told has accrued to our secondary industries through the operation of our fiscal policy - the wheat-growers of this country would receive an additional amount of about £4,000,000. But this increased return would be for one year only, whereas the secondary , industries are benefited, and have benefited during successive years by the protective duties sanctioned by this Parliament. The experts whose opinions I have quoted merely repeated what other students of economics had been emphasizing for years, namely, that our fiscal policy was designed primarily for the benefit of secondary industries, and the price of that benefit has been always paid mostly by the primary producers. The same may be said of .the advice tendered to Australian governments last year by Sir Otto Niemeyer who was invited by this Ministry to visit Australia and examine its financial position. That distinguished economist merely repeated - I say this with all humility - what many of us had been saying for a considerable time, namely, that governments must live within their incomes, and that our economic policy was quite wrong. But coming from such a high financial authority, the advice was listened to in hushed silence, and deserved respect, if subsequently it was unheeded in some quarters.
– Sir Otto Niemeyer’s views were good confirmation of previous warnings.
– That is true. But let me get back to my subject. I repeat that our fiscal policy, as has been shown, permits one section of the people, those engaged in secondary industries, to live upon the other section, comprising, for the most part, our primary producers. It is, however, true to say that the latter to some extent depend upon the home market provided by an increase in the number of consumers in our principal cities. Nevertheless, it is a fact that employees in our secondary industries are getting more than their fair share of the benefits handed out by successive governments in the form of ever increased protection. For many years they have been enjoying better working conditions, shorter hours, and many other advantages to which rural workers are strangers. I have no objection to good wages in industry, if the wages paid allow of some margin of profit. Unless there is this margin, the sheltered industries cannot provide good wages’ and improved conditions of employment, and carry on without leaning heavily upon the unsheltered industries. Those engaged in our primary industries have to work long hours and work hard for a return that is wholly inadequate. Clocks and watches mean nothing to them. They resume their daily toil as soon as their bodily fatigue has worn off. They feel the urge and they know the need to start again at the earliest possible moment. When I landed in this country as a youth of eighteen, I did not, like some latter-day democrats, regard with suspicion the employer who paid me 8s. a day and expected me to give in return a reasonable day’s work. In those days we had the most kindly feelings for our employers who, in these times are, as often as not, regarded as enemies of the workers because, forsooth, they belong to the capitalist class whose chief purpose, so these latter-day false prophets would have us believe, is to accomplish the destruction of all the workers! The inculcation of this false doctrine has been responsible for the creation and maintenance of opposing and warring forces in the industrial field. These spurious democrats who are responsible for this ill feeling between employers and employees live upon the gullibility of the workers. The time has come, surely, when all of us should be made to realize, that if we are to reap any real profit, we must work together honestly, fairly, and tolerantly. [Extension of time granted.-] If the nation is to progress, all sections must pull together. We must inculcate the spirit of co-operation so as to be able to make the maximum effort to restore the financial and economic stability of the Commonwealth and for our mutual advantage. One industry should not be unduly burdened. That, unfortunately, is what is happening in this country. Not so long ago, for example, I was obliged to pay £300 for a 10-foot harvesterIt was only by the grace of the mortgagee that I was able to purchase it. But imagine a machine such as that costing £300 in this country! Is it contended that the men who were responsible for the building of that machine are employed under the same conditions, or put forth the same effort as the man who works it? Of course they do not. It i3 the man on the land who works early and late who makes it possible for these lazy drones to be kept in employment, making machines for which I and other dupes «re charged £300. So it is right down the list of those articles that are required by the wheat-farmer. But he has now come to the end of his tether, and will refuse to be any longer a beast of burden, with his womenfolk living in a lean-to shanty under conditions that are not fit for a blackfellow, while his so-called fellow Australians in the cities enjoy attractive conditions, and send him bogus messages of sympathy. The time has come when he is determined to leave the burning sun and come into the shade. So shall we obtain equality; but at what expense? Industry will be brought to a standstill!, independence and self-reliance will be sterilized for a time, but an equality will he reached.
Wherein is there equality or natural justice in the spectacle of one set of Australians enjoying all the advantages, while another set suffers all the hardships; one set living cosily and without trouble or worry, while the other poor devils patiently bear the burden of every form of imposition ? Can it seriously be argued that that is an equitable state of affairs? Is it just or equitable? It has its reflection in the figures that I have quoted, and that reflection will become intensified in the future. The country-side will become deserted. The eyes of the nation will be opened when it is too late. In the words of the Farm Board of the United States of America, we cannot hope to compete with Russia, which is the granary of the world, and where the land costs and labour costs are so low and so serflike. According to the Year Book of the Russian Soviet Republic, the unemployed in that country are working on the roads for 3s. a day. If the unemployed in this country were asked to accept what their proletariat somrades in Russia are receiving, what would be their reply? There would be uproar and confusion in this “ capitalist “ country.
– Three shillings in Russia has a lower purchasing power than it has in Australia.
– That is true. A 4-lb. loaf made in Glasgow out of Russian flour can be sold for 8d., whereas the same loaf in Russia costs 2s. Therefore, 3s. in Russia, on the basis of the purchasing power in Australia, is worth not much more than ls. or ls. 6d.
These are considerations that ought to awaken our sleeping instinct for fair play and justice. After all, what do we stand for if not for fair play? What is our duty to our country? We do not want to see the best of our countrymen ground down under the conditions that I have revealed, while other sections can successfully complain about the hardness of their lot, and be given such favorable conditions that they result in costs being piled up to such an extent that the farmers are leaving the country-side in large numbers, while those who remain can afford to purchase only half the superphosphate that they used last year. Democracy is all the time being reminded of its rights. There has never been a right without a corresponding responsibility. My right to travel from one point to another on the trams in Melbourne is bound up with my responsibility to make payment for that transport. When democracy is told that it has rights, and is not reminded of its responsibilities, it is being grossly deluded. The true friend of democracy is the person who reminds it of its responsibilities and its duties as well as of its rights; whereas its woTSt friend is the demagogue who continually reminds it of its rights, while keeping well in the background all mention of its responsibilities and duties. As Aristotle said 2,000 years ago, the ohe enemy of democracy are the demagogues. Democracy in this country is in danger to-day unless wise counsels prevail.
I appeal to the Senate to help me to place this section of our Australian people on a better footing than they occupy to-day. Assistance is sought for only one year, and if it be afforded it will give fresh heart to those who now have no heart, and will be a strong inducement and encouragement to them to keep a firm grip on their homesteads, instead of allowing themselves to become the victims of a worse social state in the crowded cities of the Commonwealth. I have every confidence that the Senate will rise to the occasion, as it has done in the past, recognizing that, as the wheatgrowers have been appealed to to pull the nation out of its difficulties, it is our responsibility and our duty to help them in the manner proposed by the motion.
Debate (on motion by Senator Carroll) adjourned.
– by leave - I move
That the’ paper - laid on the table of the Senate on the 17th of June, 1931 - viz., “Conference, Commonwealth and State Ministers, held at Melbourne, 25th ‘May to11th June, 1931, proceedings and decisions of conference, together with appendices “ - be printed.
Honorable senators are well aware of what is happening as a result of that conference. Apparently, notable action is to be taken by this Parliament to give effect to the decisions of the conference, and for that purpose several bills - I understand there are four or five - will come before both Houses of this Parliament for their sanction. I desire that’ a general discussion shall take place, on the motion that I have moved, so that honorable senators may be enabled to deal expeditiously with the bills that are to give effect to the decisions of the conference, when they are sent from another place. The report of the conference contains the following- paragraph: -
The governments of Australia have met in conference to consider what measures are possible to restore solvency and avoid default. The national income was £650,000,000 in 1927-28; it fell to £564,000,000 in 1929-30. and a further fall to £450,000,000 in 1931-32 is estimated. This has reacted on government finance.
The Senate will be asked to consider the recommendations of the conference which are of far-reaching importance, and in all probability will be resented in most places for the reason that their effect will be to impose very grievous burdens on all sections of the community. Several measures to carry out these recommendations will come before honorable senators. Many of the proposals are distasteful to me personally, and I am sure to other honorable senators; but as a good Australian I am willing to do what I consider essential in the interests of this wonderful country of ours. The necessity for such legislation is set out in the report of the conference. The serious position with which we are now confronted is agitating the minds of all sections of the community. There is only one way to face the difficulty, and to quote Gordon, I say to the people, “ Pick your panel and take it “.
– And do not change your mind when once you have picked you-r panel.
– Australia has now picked its panel, and, I think, is prepared to take it. There will be some heart-burnings and dissatisfaction; but, in the circumstances, we should not apologize for the policy which we have to adopt. A nation, like an individual, has to shoulder its responsibilites, and I am sure that this nation has no intention of dishonouring its obligations. I am submitting this motion to enable honorable senators to fully debate the proposals embodied in the legislation to be submitted later. Honorable senators who have been attending to their public duties for some considerable time, and, particularly those representing distant States, are anxious to return to their homes, and they will, I trust, embrace this opportunity to facilitate the passing of the measures to be introduced later, thus enabling the Senate to adjourn for a reasonable period.
Senator Sir GEORGE PEARCE (Western Australia) [4.43]. - I do not propose to ask for an adjournment of the debate on this motion, because I am familiar with the subjects discussed at the conference of Commonwealth and State Ministers recently held in Melbourne, and with the decisions recorded.
But I cannot allow this opportunity to pas3 without making a few general comments upon the proceedings at the conference, and what has led up to the policy embodied in the bills shortly tobe introduced. It is not my intention to debate at length the measures to be submitted later for our consideration, and if honorable senators avail themselves of this opportunity to discuss the financial proposals of the Government, the time devoted to the consideration of the bills may thus be shortened.
It is in no spirit of recrimination that I propose to trace the history leading up to the recent conference, but there are certain characteristics of that gathering which I think a democracy should note. I venture to say that one of the most striking statements ever made at a conference of Commonwealth and State Ministers was that made by the Prime Minister (Mr. Scullin) at the last gathering. On that occasion he informed the delegates that the alternative to the adoption of the proposals then submitted was that the Commonwealth and State Governments would have to default in their payments to the public servants in the month of July. The conference met in May and June, and the Leader of the Commonwealth Government said that default was inevitable within one month unless definite action was then taken. That was the culminating point of a policy of drifting to disaster - a policy of drift pursued, as I shall show later, irrespective and in absolute defiance of repeated warnings by responsible persons. There is in this catastrophic happening a lesson for a democracy which I am inclined to think the present generation of electors will not forget, and I hope future generations will read history sufficiently to apprise them of the facts. So far back as May, 1929, Australia was warned by the then Prime Minister (Mr. Bruce) of the crisis which was then approaching.
– I think it was earlier than that.
– In May, 1929, a conference of Commonwealth and State Ministers convened by the then Federal Government was held. in Canberra. In opening the proceedings Mr. Bruce said -
Onan occasion such as the present, when the representatives of the Governments of Australia, both Commonwealth and State, are gathered together, it is - desirable that we should fully review the whole financial, industrial, and commercial position of Australia. In essaying this task, there is, to my mind, an obligation on the shoulders of every one of us to state our views with the utmost frankness, forgetful of all political considerations, and mindful only of the duty we owe to thepeople of Australia, who have, for the time being, entrusted us with the responsibilities of leadership. The situation that confronts us to-day cannot fail to cause anxiety to every thinking citizen. Australia has in the past experienced periods of temporary depression, which have been due in the main to adverse seasonal influences. Generally speaking, we have been fortunate in that they have been of short duration, and that the disabilities which they have occasioned, such us unemployment and stringency in public finance, have rapidly disappeared with the return of normal seasons. Our present position is, however, due. I suggest, to causes that are more deeply seated, and good seasons alone will not restore prosperity.
After referring to the great drop in our staple products, he said -
Expenditure can and must he reduced by the elimination of waste, and by the exclusion of unnecessary expenditure. The maximum reductions, however, which could possiblybe effected by the most stringent economy would not he sufficient to balance the lodger, unless we are prepared to repudiate solemn obligations into which we have entered, such as the payment of soldiers’ pensions - which is unthinkable - or to withdraw services or social benefits which have been provided by governments in the past. Such a withdrawal would be a retrograde step, such as should be taken only in the face of dire necessity, and when no other remedy is available.
Further on, in dealing with the cost of production, and after quoting the index numbers with respect to production prices for 1921, as compared with 1927, he said -
Unfortunately, however, production has not been on an economic basis, and one of the greatest problems we have to face arises from the fact that the prices we are receiving in the markets of the world for our surplus products are not equivalent to the costs of production. A critical examination of our present position leads inevitably to the conclusion that the basic cause of all the economic troubles of Australia to-day is the high cost of production, the reduction of which is the first step that we must take to bring about a solution of our problems.- A nation-wide reduction in our costs of production would effect such a transformation in our industrial and financial posi tion as would enable us not only to absorb our unemployed in useful occupations, but also to pave the way for a progressive increase in our population.
After showing the way in which the tariff had repeatedly been raised without any adequate return to the people in increased production, he said -
These facts speak for themselves. The lesson they teach is clear and unmistakable. It is that we must take up immediately the task of setting our house in order by reducing costs of production to an economic level.
Later, he pointed out -
If we can reduce our costs of production so as to sell with profit on a competitive basis in the markets of the world, an unrivalled opportunity will present itself.
Dealing with loan expenditure, Mr. Bruce said -
Another serious factor which has to be faced is that, unless we can sell our products at a profit, our present rate of loan expenditure cannot be continued. The prosperity which we have enjoyed in recent years in Australia has been due in some measure to the expenditure of loan moneys. If that expenditure is now seriously curtailed unemployment will increase, and the difficulties we are encountering will be intensified. But there is no reason why expenditure should be seriously curtailed. . . Two alternatives face Australia to-day. Either we can resolutely attack this problem of reducing our costs of production, and by so doing reduce our costs of living, expand our avenues of employment, maintain and augment our standards of living, and increase our national wealth; or we can refuse to recognize the needs of the position, and allow our national wealth to diminish, and unemployment to increase until, faced with a national crisis, we are forced to lower our standards of living and re-orientate the whole of our national life. Between these two alternatives can there be any hesitation?
Those words were prophetic. At a later stage the right honorable gentleman said -
At a conference of this character the individual expenditures of governments cannot he dealt with; that question is one for the individual parliaments, Commonwealth and State, to consider and determine. In the next financial statement which my Government will present to the Commonwealth Parliament, we propose to make it clear that we recognize our obligations in this direction, and we shall endeavour to give a lead to the people.
In both those directions the Nationalist Government led by Mr. Bruce did give a lead to the people. During its term of office the national indebtedness of the Commonwealth increased by only £13,000,000, and that because of payments made to the sinking fund, whereas the national indebtedness of the States increased by £207,000,000 during the same period. Mr. Bruce certainly practised what he preached in the sense of exercising economy in borrowing. The great increase of borrowing which took place during the period that the Bruce-Page Government was in office was not due to the action of the Commonwealth Government, but to State governments, many of which were Labour governments.
When the Bruce-Page Government endeavoured to give a lead to the people in tho direction of a reduction of expenditure, its proposals were challenged by the then Opposition. When an appeal was made to the electors the Public Service block vote resulted in the Bruce-Page Government being defeated. It cannot be denied that the reduction of Public Service expenditure was one of the principal issues at that election. Further on in the report from which I have already quoted, Mr. Bruce, dealing with the reduction in the cost of production, said -
I come now to what is probably the most important question that we have to consider in relation to the economic position in Australia, namely, the system of industrial legislation, and the relations of the Commonwealth and the States in this sphere. In Australia both the Commonwealth and the States have adopted the principle of wage regulation, based upon a standard of living which we have set up for ourselves. . . .
The Commonwealth Government has arrived at the definite conclusion that the present duplication of powers’ in the Commonwealth and the States is not only unsatisfactory in principle, but that in practice it is responsible for serious economic waste and for irritation of personal relations between employers and employees.
At a later stage he spoke in the following terms : -
I now invite the Premiers to state definitely whether they are prepared to recommend to their Parliaments the reference of full industrial powers to the Commonwealth. In the absence of such concerted action on the part of the States, the Commonwealth Government feels that it will be its duty - because of its deep conviction that the present dual system of industrial regulation is retarding our national progress and preventing industrial peace - to propose to the Commonwealth Parliament .the repeal of the existing federal arbitration legislation, subject to transitional provisions, which will preserve existing awards and agreements for a period sufficient to enable the States to assume complete control. In the case of shipping and waterside industries, the Commonwealth Parliament already has sufficiently complete powers to make it desirable for the Commonwealth to retain control of these industries.
The right honorable gentleman concluded his speech with these remarks -
I apologize for having spoken at such length, but I think we all recognize that the present position in Australia is so grave that we cannot afford to allow it to drift. There rests upon every one of us the obligation to try to give a lead to the nation in facing the difficulties with which the Australian people are confronted, since only by facing them can we hope to overcome and remove them.
It was following upon that statement, and the defeat of the Government’s proposals in another place, that Mr. Bruce faced the electors. His Government was defeated by those who told the electors that the sacrifices which Mr. Bruce outlined were not necessary, and that a Labour government would continue the then existing state of affairs. They said that there would be no need for such selfsacrifice; that, on the contrary, employment would be found for every one. The electors believed that story, and returned a Labour government to power. From that time the drift has become greater as the months have passed, as the result of the incapacity of the Government to grapple with any of the problems with which the country was confronted. So bad did the position become that, when in 1930 the Treasurer (Mr. Theodore) presented his budget, the Opposition did what an opposition seldom does in any British Parliament - it took upon itself the responsibility of making a definite proposal as to the nature of the reduction in government expenditure that was necessary to arrest that drift. Mr. Latham, the then Leader of the Opposition in the House of Representatives, proposed a definite reduction of government expenditure to the extent of £4,000,000, and he indicated ‘where it could be made. His proposal was treated with contempt. The supporters of the Government said that they would never be a party to reducing Commonwealth Public Service salaries, pensions, or social Services. Although Mr. Latham pointed out that the exigencies of the situation - the fall in the national income, and the drop in the price of our primary products - made these things imperative, his warning was ignored. Had his advice been taken at the time, the cut in government expenditure would have been less drastic than is now necessary, and the position of the Commonwealth less desperate than it now is.
The Opposition made another unique proposal when it offered to join with the Government in forming a joint council to decide on the retrenchments and the reductions necessary. I emphasize that that offer was made on the understanding that all parties would share in the opprobrium of doing things which, though unpleasant, were necessary, and that the Government would remain in office, and in control of the administration of departments. The Opposition offered to give up the most advantageous position that an Opposition can occupy. It was prepared to relinquish its position of critic to share with the Government the unpopularity of doing unpleasant things. We are told that that offer was discussed by the Labour party in caucus, and there rejected.
– Notwithstanding that the Prime Minister invited Parliament to form itself into an economic conference.
– I come now to the next warning - a letter from the Commonwealth Bank Board to the Treasurer, which is given in full in the report of the Premiers Conference held in February, 1931. Heaven knows that if conferences would save Australia the country should not now be in its present position, because of conferences we surely have had sufficient. There have been, so many conferences that it is difficult to keep track of them. At the Premiers Conference, held in February, 1931, a letter was read from the Commonwealth Bank Board, in which that body pointed out that the bank was straining its resources to the utmost to provide overdrafts for governments. That letter, which wasdated 12th February, 1931, and addressed to the Treasurer was as follows : -
Dear Mr. Theodore. - With reference to your discussions with the Directors of the Bank Board on the subject of the rehabilitation of the financial and industrial position of Australia, when it was agreed that some concerted effort must be made to cope with the situation, and so avoid, if possible, the ultimate disaster which will otherwise eventually face the country,
Could graver words than those have been placed before the . conference, particularly as they came from the Chairman of the Board of Directors of the Commonwealth Bank? The letter continued-
I am requested by my board to convey to you a resolution of the board as set forth hereunder
Subject to adequate and equitable reductions in all wages, salaries and allowances, pensions, social benefits of all kinds, interest and other factors which affect the cost of living, the Commonwealth Bank Board will actively co-operate with the trading banks, and the Governments of Australia, in sustaining industry and restoring employment.
My board realizes that this resolution in itself can be taken as only a comprehensive objective which it is desirable to aim for, and necessitates practical co-operation and effort in its attainment. This necessitates some definite movement and the creation of constructive plans for accomplishment. I am requested to state that my board desires me, as Chairman, to co-operate with you in every way possible to this end, and join with you in calling together a conference of the trading banks, when general measures might be adopted for the purpose of giving effect to the terms of the resolution, and -the creation of a sub-committee to be . approved, representing the Government, the Commonwealth Bank and the trading banks, to watch developments, and advise upon methods to be adopted which will further help the attainment of the return to prosperity of the country.
That grave warning was issued in. February last. A little later that letter was followed by another, written after the Commonwealth Bank Board had consulted with the trading banks. On the 24th February Mr. Tranter, writing on behalf of the trading banks, said–
The Honorable the Treasurer,
Commonwealth of Australia,
Dear Sir, - The banks have given full consideration to the proposals placed before them by the Prime Minister and the Treasurer. They are prepared to support the objects set out, viz.
Re-absorption in industry of workers at present unemployed.
Maintenance of national solvency,
Restoration of budget equilibrium,
An equitable spread of the loss of national income over all sections of the community.
The banks regret, however, that they can.not agree with all the methods suggested by the Treasurer, as, in their opinion, these are not an sound banking or economic lines. The carryingout of the ideas therein would, in the opinion of the banks, not alleviate the position, but would rather increase the difficulties by which the country is. beset..
The banks are quite willing to co-operate with the Government provided that what is done is on lines that will be of lasting benefit to Australia.
The first essential is restoration of confidence, and this can only commence by the Governments placing their finances in order by a definite and determined effort to balance their budgets over a given period. The incomes of the Governments cannot be increased sufficiently to meet the present expenditure, which, therefore, must be reduced.
The banks consider that the suggestions by the committee of experts are on the proper lines, and should be generally followed.
With regard to the proposals for the threeyear plan, the conference agrees that the Governments, the Commonwealth Bank and the trading banks must co-operate to rehabilitate industry, provided the required finance is on sound lines, and so long as the present monetary system is not impaired. If the steps suggested above are taken, the banks believe that some action might be possible by the Government, the Commonwealth Bank, trading banks, and savings banks, to effect, some reduction in the rates of interest.
The overseas floating debts of the various Governments must ultimately be funded, but this cannot be accomplished before there is an effective effort towards budget stability.
The banks draw attention to the effect of the proposal for a special tax on government securities, which would undoubtedly add to the difficulty of Governments in converting maturing loans or in funding floating debts, or raising of any new loans required.
Interest on the Governments’ overseas obligation will be continued to be provided through the exchange pool as long as it is within the power of the banks to do so.
Yours faithfully, (Sgd.) C. H. Tranter.
On behalf of representatives of the trading hanks attending the conference with the Prime Minister and the Treasurer on 21st February, 1931.
Trading banks represented at the conference:
Could anything in the nature of a warning be more direct or more serious? Could any persons be more competent to issue a warning than those who are in control of the private banking institutions of the Commonwealth, who have their fingers on the pulse of commerce, know exactly how credit is being affected by governmental finance or business depression or prosperity, and know exactly, also, the liabilities of governments and private trade and commerce? These people in a most solemn manner, and in the clearest language warned the Premiers of the disasters that were approaching.
Senator Sir GEORGE PEARCE.Some of the Premiers may have done so, but even if the conference as a whole had approved of the fiduciary issue, the position would not have been affected. A fiduciary issue would not have reduced the expenditure of governments or brought the nation to live within its income.
During the election campaign, when I was walking along Forrest-place in Perth, I saw a gathering on a block of land adjacent to the General Post Office. Being a politician I was naturally attracted, and I listened, to what was going on. I found that it was a gathering of Commonwealth public servants, and I heard ex-Senator Needham and
Mr, Curtin, who is now member for Fremantle, denouncing me up hill and down dale - holding me up as a political monster, because, on behalf of the Government, I had introduced a bill for the reduction of expenditure on the Public Service by £500,000 a year The sentiment expressed by them was most popular with the audience, being cheered to the echo. Last week, however, I read in the West Australian, a report of another meeting of public servants in Perth at which resolutions were carried of a most condemnatory character, not upon myself, but upon the present occupants of the treasury bench, and the tenor of the speeches indicated that the public servants of Western Australia considered they had been sold by the supporters of the Labour party at the last election. One gentleman is reported as having said that they bad been sold like bullocks at Smithfield.
I have overlooked another warning. When the conference of Premiers was held in Melbourne in August, of last year, we had in Australia at that time Sir Otto Niemeyer, representing the Bank of England, and he attended the conference on the invitation of the Commonwealth Government and the Governments of the States. He did not volunteer any advice, but was asked by those present to give it. He was asked to say what he thought was necessary, and he did so. In very plain terms he told the various Governments of Australia that unless they took steps to live within their incomes nothing but disaster would follow.
SenatorO’Halloran. - The figure we inherited from the right honorable senator’s government was about the same.
Senator Sir GEORGE PEARCE.The honorable senator is wrong. The floating debt when the Bruce-Page Government went out of office was not a Commonwealth floating debt, but consisted of treasury-bills owed by various States.
Senator Sir GEORGE PEARCE.For which, under that agreement, the Commonwealth had assumed responsibility, although it had nothing to do with the placing of the bills. The advice given by Sir Otto Niemeyer was that if certain steps were taken, they would have a double effect. He said that a reduction of government expenditure would lead to a restoration of confidence both here and abroad, and that if that were done, in his opinion, there would be no difficulty in funding the floating debt overseas. The Commonwealth Government knew, therefore, that if this advice was acted upon it would have a friend associated with that powerful financial institution overseas, the Bank of England, who would look with a sympathetic eye upon the difficult position of the Commonwealth and would undoubtedly be prepared to assist in giving effect to what he indicated would be the position if his advice were followed. But what wasthe reception given to his advice ? Before that conference adjourned, Mr. Scullinsigned an agreement, which was alsosigned by the heads of all the Governments of the States, the purpose of which was to give effect to the resolutions of theconference necessitating, at that time, areduction of salaries, pensions, and social services. But no sooner were the report of the conference and the advice of Sir Otto Niemeyer made public than Sir Otto Niemeyer was abused and insulted, especially in New South Wales, by supporters of the Labour party. Nothing was too base to say about him.
Senator Sir GEORGE PEARCE.For quite a considerable time not one Minister opened his mouth to defend him. It was allowed to be inferred that he had come to Australia, not at the invitation of the Commonwealth Government, but as the representative of bondholders in Great Britain, to act as a sort of receiver in their interests. Ministers kept silent for quite a while until they were practically forced to tell the truth to the people of Australia, and reveal what should have been revealed at the outset, that Sir Otto Niemeyer had come to Australia at the invitation of the Commonwealth Government.
Senator Sir GEORGE PEARCE.That is so. So much for the August conference.
Before I conclude I want to say a few words about the plan. It is drastic and as I have pointed out is much more drastic than would have been necessary if steps had been taken in time to check the drift. On page 6 of the report of the experts appointed by the Melbourne conference in 1931 appears the following table : -
The increase in expenditure is partiallyexplained by the increase in the total of interest, sinking fund, exchange and unemployment charges, particulars of which are set out in the table which I have just read.
Senator SIR GEORGE PEARCE.That is so. The story told by our unemployment figures is a terribly tragic one. I have not the details by me, but speaking from memory, I think unemployment has increased from 12 per cent, in 192S-29 to over 25 per cent, at the present time. These figures demonstrate conclusively that we are facing a most difficult financial position to remedy which the most drastic cuts in governmental expenditure are essential. It is not that we may consider that these cuts are right or equitable. They are the only alternative to default. Faced, as we are, with that alternative, the majority of us, I am sure, will not hesitate about the course to be taken.
Before I conclude I intend to read two passages from the report of the experts to whom I have alluded, because there is a general impression that, if we adopt these proposals, we shall be treating a certain section of the people unfairly. No one even likes to cut salaries, but if there is one thing that is even more distasteful, it is the urgent necessity that exists to cut old-age, invalid and war pensions. Members of all parties in this Parliament, are, I believe, agreed upon this point. But it would be as well to bear in mind that, in the treatment of her people, Australia has not been unmindful of their needs. The allowances authorized for all classes of pensioners are higher than elsewhere. Even when these proposed cuts have been made our scale of pensions will still exceed that of other countries with a like standard of living and civilization. On page 5 of the report of the experts, honorable senators will find set out the expenditure per head of population on invalid and old-age pensions and war pensions in Australia, Canada and New Zealand. The figures are as follow : -
Compared with the other dominions of the Empire, Australia not only sent a larger proportion of her population to the war, hut also suffered heavier casualties. This is explained by the fact that. for the greater part of the time that our divisions were in the field, because of the falling off in reinforcements due to our depending on voluntary enlistment instead of conscription, our men when wounded were patched up in hospital and sent back into the firing line time after time, whereas New Zealand and Canada, which adopted the system of conscription, were able to keep up a supply of reinforcements and frequently their men, if seriously wounded, were returned to their country. It was not possible “to do that in the case of Australian soldiers. Nevertheless, the proportion of casualties in New Zealand forces was as high as ours, when compared with the total number serving; yet our war pensions, even with the proposed 20 per cent, cut, represent an expenditure of 19s. 9d. per head of population as against 16s. 3d. for New Zealand.. 1” emphasize these points because, in common with other honorable senators, I have received a postcard which depicts a soldier pierced with a bayonet lying at the threshold of a building, which I assume is Parliament House, with this legend printed on it - “Your King and country need you - no longer “. The suggestion conveyed is a horrible one. It implies that Australia is brutally regardless of the welfare of war pensioners, and is not honouring its obligation to care for men who were maimed in the war. I strongly resent such an unworthy suggestion, and again emphasize that, even with a 20 per cent, out in pensions, Australia’s record in the treatment of her returned soldiers, as well as of her aged and infirm citizens, compares more than favorably with that of any other country.
If we could continue the scale of payments hitherto made, we would gladly do so, because I am sure that we all realize that no monetary payment can compensate adequately men who have sacrificed so much for their country. What they did for Australia cannot be measured in pounds, shillings and pence. It is only the fear - a fear based on facts which we cannot ignore - that unless these economies, disagreeable as they are, are sanctioned, this country will default in its payments altogether. And that, I suggest, would be the greatest disaster that could befall our returned soldiers. The debacle which would ensue would be appalling in its consequences to all sections of the community, and particularly to soldiers suffering from war disabilities.
The action which: we are now taking is, I believe, essential if we are to save the nation. Although these projected economies will involve further sacrifices by men who have already done so much for their country, we must realize that they cannot be avoided if we are to save the nation, and safeguard the interests of those to whom we are under such an obligation. I know these men. Although I did not myself serve overseas, I have come in contact with greater numbers of ex-soldiers than perhaps any other honorable senator. I know their point of view. I believe that they served in the war from a high sense of duty and with the full knowledge of what they owed to this country. I am convinced that those who were responsible for the issue of this objectionable postcard do not represent the views of the great majority of our returned soldiers. I believe that they still have the same high sense of duty in the present financial difficulties of the nation and are willing to make sacrifices just as during the war they were prepared to offer their lives in defence of this country.
I hope that all sections, including politicians of all parties, have learned a lesson from the trend of recent events. I sincerely trust that there will be an end to the practice of offering political bribes during election campaigns. I hope that the candidates of all parties will not make promises impossible of fulfilment) and will not hesitate to tell the people the truth. The party opposite is to-day paying a terrible price for some . of the things which it told the people during the last election, and for some of the things which its candidates promised. May it be a lesson to them. Had they told the electors the truth the task they have now to f ace - the measures necessary to place Australia again on the high road to prosperity - would not have been half so difficult or disagreeable as are those we are now considering. I suggest that the Government and its supporters may learn from this that victory at the polls can be too dearly bought.
SenatorO’Halloran. - Like the victory at the 1919 election, when £28,000,000 was promised in war gratui- ties.
In closing, I remind the Senate that these proposals relate only to financial reconstruction. They do not touch the other phase of the problem that confronts us - the economic reconstruction of the Commonwealth. Unless financial reconstruction is followed by proposals for economic reconstruction, Australia will not be on a sound basis. That is going to be just as distasteful to this Government as financial reconstruction - probably more distasteful; and, just as it failed to take the necessary steps to bring about financial reconstruction, I fear that it will not have the courage to take those that are necessary to ensure economic reconstruction. That is why I am afraid that Australia cannot recover completely until this Government has been removed from office. That is . absolutely essential if Australia is to be saved, and put on a sound basis. This carries us only a certain distance, and no further. It remains to be seen whether, having learned its lesson, the Government will take other steps in regard to economic reconstruction.
Debate (on motion by Senator Kneebone) adjourned.
Changes in Ministry. - Australia’s Export Trade.
.- I move-
That the Senate do now adjourn.
I have to announce that Senator John Joseph Daly and Mr. Lucien Lawrence Cunningham have been appointed Assistant Ministers, in the place of Mr. Charles Ernest Culley and Mr. Edward James Holloway. As honorable senators are aware, Senator Daly is not in Canberra at the present time. Upon his return, Senator Dooley and I will consult with him as to the departments that he will represent in this chamber. When that matter has been arranged, I shall announce the result to the Senate.
SenatorFOLL (Queensland) [5.38].- This afternoon, in reply to a question respecting our export trade with France, I was supplied with figures which showed that, for the year ended the 30th June, 1930, the value of that trade was over £5,000,000 less than for the year 1928-29. I anticipate that when the figures are made available for the year 1930-31 it will be found that, partly on account of the. fall that took place in the price of our primary products, but more particularly as a result of the attitude that has been adopted by various overseas countries under what may be termed retaliatory legislation because of the embargoes that have been placed on many of their products, the decrease has been so considerable that we shall be compelled to take notice of it, and to urge the Minister for Markets to use every piece of machinery in his department in an endeavour to obtain trade treaties with those countries, and also to consider whether a modification of some of our legislation is not necessary with a view to finding an outlet for our primary products.
SenatorR. D. Elliott. - One reason for the falling off in our trade with France is that that country has developed Empire economic unity.
– It is my intention to refer to Empire economic unity, of which Senator Elliott - in common, I believe, with every other honorable senator - is a staunch champion. The honorable senator must be very disappointed at the small amount of progress that has been made in that direction by the different parts of the Empire during the last few years. Everyone, irrespective of his political beliefs, hoped that something of a really practical nature would result from the conference that was held in London last year. The gathering together of the Prime Ministers of all the dominions and of Great Britain led one to imagine that some real benefit to the Empire would eventuate; but on account of the attitude adopted by the British Government there have been practically no beneficial results. I remember very well the statement of Mr. Bennett, the Prime Minister of Canada, that he was sorely disappointed at his time having been wasted in visiting Great Britain. A similar view was expressed by General Hertzog, Prime Minister of South Africa, who said that he was compelled to go home and that be begrudged the time thus spent. So bitterly disappointed was the Prime Minister of Canada, that he took steps to set in motion machinery for the calling together of a great Empire economic conference, that was to be held in Ottawa some time during this year; but it has been postponed to some indefinite date, probably, for the reasons that led to the failure of the conferencein Great Britain.
I am one of those who would like to see the different parts of the Empire set themselves up as a great economic unit; because, if properly organized, they could direct their trade into Empire channels and render themselves independent of the rest of the world. But, in quarters where one would naturally expect the greatest encouragement to be given to a movement for economic unity, the dominions are not receiving the assistance that they are entitled to expect. Therefore, in the interests of our primary producers, wo must make a search for markets in overseas countries.
We have set up an organization in the United States of America, at the head of which is a trade commissioner who has almost the status of an ambassador. But with what result? That country has practically set its face against purchasing any of our products, and by means of its fiscal policy, has placed every obstacle in the way of our products obtaining an entry there.
– She slammed the door in our face.
– Undoubtedly ; despite the fact that we are one of her best customers.
– We sent her £200,000,000 in ten years.
– That is so. Prior to the last few years we bad a favorable trade balance of something like £30,000,000 with four countries in Europe.
– Only with wool-importing countries.
– That is not an altogether fair interjection. I cannot point to any of our exports that arc of greater importance than our wool. Had we not exported our wool, I do not know where we should have been during the last few years. The expenditure necessary to maintain this extravagant organization in the United States of America could be saved, because we get no value from it. We do not want to continue a representation that cannot secure business for us, and the duties of which consist of attendance at jazz parties and socials. Close at hand, in the near East, are millions of people who daily are becoming more accustomed to consuming theproducts of this country. It was mentioned to me only a few days ago that an enterprising company operating in New South Wales, had recently experimented by opening a branch of its business in Java, intending later to extend its operations to the Federated Malay States. From the outset it was surprised at the number of orders it received, and regretted that it had not sooner realized the existence of a market at its door, which could have been developed in days gone by, and to which it had turned its attention only because of the slackness of trade in Australia. Over ten year, ago, while this Parliament was domiciled in Melbourne, J moved for the appointment of trade commissioners in the East. A trade commissioner was appointed in China, but the man chosen was not suited to the position, and what was more or less of a fiasco, was the result. Unquestionably, there is a tremendous market for many of our products in the near East. The United States of America has practically ousted Australia from the Federated Malay States and Java, in regard to many of the products that we should be supplying to those places. Surely, the time has arrived for the Department of Markets to send a representative there to develop our trade with them. Millions of pounds worth of railway material was imported into the Malay States within recent years, most of it probably from the United States of America, and some of it from European countries; but not one pennyworth of it went from the workshops of Australia.
– Does the honorable senator believe that we can compete with the United States of America?
– If we cannot, there is something wrong with our industries;, because the United States of America, which has supplied the bulk of this material, pays as high a rate of wage3 as is paid in Australia, and has greater freights to meet on account of the longer distance that the material has to be sent. Some honorable senators may raise objections to the proposal I am submitting, but I am sufficiently old-fashioned to believe that if a country is to extend and develop it must devote attention to its export trade.
That our fiscal policy is entirely wrong was forcibly impressed upon me when I was visiting Europe some months ago. I then found that new factories, engineering plants or undertakings of that nature were giving greater attention to extending the export trade than to developing the home market. -In European countries factories are built and extended with a view to exporting, whereas Australian factories are meeting only the demand in the home market, which is limited owing to the sparseness of our population. In view of these circumstances, I trust that no effort will be spared in developing our trade with the East. A few days ago a large exporter of wheat said that owing to the lower prices prevailing for that commodity, Burns, Philp and Company had a large number of ships under charter for the carriage of wheat to the near East, where undoubtedly there is now a huge market.
– That should be one of our regular markets.
– Undoubtedly; we cannot depend upon European markets to the same extent as in the past. I have mentioned the experience of a firm handling motor-car tyres, which in turning its attention to eastern markets has been astounded with the results. If a valuable market exists for one commodity there must be ample opportunities for the disposal of many other Australian products.
– We export only one-sixtieth of the total importations of the Malay States.
– Yes. That is a country to which we should look for trade expansion.
– But we will not accept anything from the Malay States.
– Attention must be more closely directed to further trade with the eastern countries, and to the whole question of inter-Empire trade, which Senator R. D. Elliott has championed so strenuously. If we do not do this we must enter into trade treaties with other countries in order to find a market for the products of our primary and secondary industries. I trust the Minister will bring my request under the notice of the Minister for Markets.
– I am delighted to find that Senator Foll has at last realized the necessity of advocating more extensive trade between Australia and the East. There is no doubt that Australia, and particularly Western Australia, would trade more extensively with Java, for instance, if that State were not burdened with the disabilities imposed under the federal system. Western Australia is closer to J ava than any other State in the federation, and at one time the trade between that State and Java was extensive. Enterprising business people in Western Australia did their utmost to develop that trade. Bananas produced in Java could once be obtained right along the northwestern coast at a reasonable rate. The vessels from Singapore brought large consignments, which were sold at a reasonable price, and were eagerly sought by people on the north-west coast who, during the greater part of the year, are practically unable to obtain fresh fruit of any kind.. The price at present charged for Queensland bananas is practically double that which was charged for the Java product, which is also of a superior quality. The Queensland bananas, which are picked green, by the time they reach Western Australia do not compare favorably with the Java bananas, which, owing to the restrictions placed upon importations, are now seldom to be found on the tables of the Western Australian people, although they are as much entitled to consume fruit of the highest quality as are any other residents of the Commonwealth. The Western Australian people are practically debarred from purchasing Java bananas unless they pay the exorbitant prices which have followed as a result of federal action. When representations have been made by Western Australia exporters with respect to increased trade with Java, they have been informed that the people of Java will take larger quantities of Australian products if we will take more of theirs. The Western Australian people have been told that Java sugar could be retailed at about one-fourth of the price paid for the Queensland product. The Java sugar refineries are prepared to sell Western Australian consumers sugar of an excellent quality although, perhaps, not refined to the same extent, at £9 a ton, whereas we are compelled to pay £37 6s. 8d. a ton for .the Queensland product. As a young man, I can remember sugar coming from Mauritius and Java which was not quite so highly refined but was just as sweet as the Queensland sugar, and which we could now procure at onefourth of the price which we now have to pay. I am delighted to notice a change of heart in some members of this chamber, and I hope they will continue to realize that trade with Java and the eastern countries generally could be developed if we would take their products in exchange for ours. Western Australia is right at the door of a huge eastern market, and there is a regular steamer service from Singapore and Java to Fremantle. Most of the ships now in this trade return comparatively empty, because of the artificial and wretched restrictions imposed by the Commonwealth. If the Government adopts the suggestion of Senator Foll and endeavours to develop trade with Java I am sure that the people in that country will be willing and anxious to trade with us. I regret exceedingly that the present federal policy, which is causing the utmost dissatisfaction to the people of Western Australia, has resulted in the consumers of that State paying excessive prices for sugar, bananas, and many other products of the East. If we purchase the products of Java and other eastern countries, I am sure the people of Java will be willing to import large quantities of flour, meat, butter, canned and fresh fruit, and other products for which we are anxious to find a market.
– I regret that Senator E. B. Johnston’s remarks should have been confined practically to an attack upon two of Queensland’s most important industries. The protective duty of Id. per lb. at present afforded the Queensland banana industry is the same as that given to those engaged in the citrus fruitgrowing industry in the other States. The trade of the other States with the banana-growers of Queensland is greater than it has ever been with the bananagrowers of Java, or that of any other country in which coloured labour is employed. Senator E. B. Johnston should know that Australia’s trade with Java is at present very much in favour of Java, as for every £1 worth of Australian goods purchased in Java Australia purchases from £3 to £4 worth from that country. It is not generally known that we purchase nearly £2,000,000 worth of tea annually from Java, which is sold as China or Indian tea. The Western Australian people should endeavour to develop the sugar industry and the banana industry within the borders of their own State, where the climate is similar to that in Queensland. If the rainfall is not sufficient, probably water could be obtained from subterranean sources, and irrigation could be employed as in other countries. I know that a majority of the Western Australian people are so strongly iu favour of freetrade that they will not even purchase the products of their own State. According to a paragraph which appeared in a newspaper published in Perth, the Western Australian people will not buy suiting material manufactured at the Albany Woollen Mills. Although an abundance of jam, canned fruit and pickles is manufactured in Western Australia, the residents in that State prefer to purchase the products of the eastern States. To a great extent, Western Australia can work out its own salvation by developing its internal trade, instead of endeavouring to work up trade with eastern countries. It may be possible to increase our trade with the East, but I very much doubt if it can be done rapidly or to any great extent, because the people of the East are too poor to purchase the commodities we produce. Java has a population of between 40,000,000 and 50,000,000 persons, whose average rate of wages is only 4d. to10d. a day and, consequently, they have not the money to purchase the products of other countries.
– The trade figures show that some one in Java is buying the products of other nations.
– Yes ; but, considering the population, its importations are not great. There cannot be heavy importations, say, of canned fruits, which in a country where the standard of living is not high are a luxury.
– Only onesixtieth of the importations of the federated Malay States come from Australia.
– There may be some market for our goods among the European population; but we cannot purchase extensively from British Malay when the principal products of chat country are rubber and tin.
– We sent them only three rolls of woollen goods in three years.
– How many of the people in that country wear woollen clothes? If we were living in the Malay States we should not wear clothes such as we wear in Australia. I am not so greatly concerned with that aspect of the subject as with the contention that we can develop a greatly increased trade with those countries by admitting their products duty-free. If we permit their goods to enter Australia free of duty, we shall destroy industries which are being carried on more or less successfully in this country. I am strongly of the opinion that for some years to come we shall have to depend on our internal trade rather than on any increase in our external trade. Some honorable senators nnder-value our internal trade, and seem to think that we should throw down our customs barriers and make Australia the dumping ground of the world.
– I can assure Senator Foll that the Government is using every endeavour to secure in other countries markets for Australian products. Wherever there is a chauce df developing trade, the Government has its emissaries. I shall, however, bring his remarks under the notice of the Minister for Markets.
I do not know why Senator Johnston should continually complain of the position of Western Australia under federation.
– Why should not the people of Western Australia be able to obtain their bananas from any country they desire?
– It apears to me that, climatically, Western Australia is as favorably situated as is Queensland for the growing of bananas. That the banana-growing industry has not developed in Western Australia may be because the people of that State are not so enterprising as are those of Queensland. I am sorry that the honorable senator should advocate obtaining bananas and sugar from J ava and other countries where black labour is employed.
Question resolved in the affirmative.
Senate adjourned at6.8 p.m.
Cite as: Australia, Senate, Debates, 1 July 1931, viewed 22 October 2017, <http://historichansard.net/senate/1931/19310701_senate_12_130/>.