Senate
16 November 1938

15th Parliament · 1st Session

  1. Senate
  2. 15th Parliament
  3. 1938

ThePresident (Senator the Hon. J. B. Hayes) took the chair at 3 p.m., and read prayers.

page 1483

LYONS ADMINISTRATION

Resignation - New Ministry

SenatorMcLEAY (South Australia - Vice-President of the Executive Council) [3.0]. - by leave - I desire to inform the Senate that on the 7th November, 1938, the Prime Minister (Mr. Lyons) handed to His Excellency the GovernorGeneral his resignation as Prime Minister of the Commonwealth. His Excellency accepted the resignation and asked Mr. Lyons to undertake the task of forming a new government. Mr. Lyons acceded to this request, and formed a newgovernment constituted as follows : -

Prime Minister - The Right Honorable J. A. Lyons, C.H

Minister for Commerce - The Right Honorable SirEarle Page, G.C.M.G.

Attorney-General and Minister for Industry - The RightHonorable R. G. Menzies, K.C.

Minister for External Affairs- The Right Honorable W. M. Hughes, K.C

Treasurer - The Honorable R. G. Casey, D.S.O., M.C

Minister for Trade and Customs - The Honorable T. W. White, D.F.C., V.D

Minister for Defence - The Honorable G. A. Street, M.C

Minister for the Interior - The Honorable J. McEwen.

Vice-President of the Executive Council - Senator the Honorable G. McLeay.

Minister for Health and Repatriation - Senator the HonorableH. S. Foll.

Postmaster-Oeneral - The Honorable A. G. Cameron

Minister without portfolio assisting the Prime Minister and administering External Territories - The Honorable J. A. Perkins.

Minister without portfolio assisting the Treasurer - Senator the Honorable Allan N. MacDonald.

Minister without portfolio assisting the Minister for Commerce - The Honorable V. C. Thompson.

On the 8th November, Mr. White resigned fromthe office of Minister for Trade and Customs. The Honorable J. A. Perkins was appointed to the vacancy and the Honorable E. J. Harrison was appointed as Minister without portfolio assisting the Prime Minister.

Matters affecting the War Service Homes Commission will continue to be dealt with by the Minister for Repatriation, Senator Foll.

Senator Allan MacDonald will, assist the Treasurer, and will administer the acts relating to invalid and old-age pensions, maternity allowances, pensions and retiring allowances, superannuation and employees’ compensation.

Mr. Thompson will assist the Minister for Commerce and will deal with organizations controlling primary produce and matters which entail government assistance to industries.

Mr. Harrison will assist the Prime Minister by receiving deputations and undertaking other works associated with the Prime Minister’s Department. He will also administer External Territories on behalf of the Prime Minister.

It is proposed to create a new department entitled the Department of Works and Civil Aviation. This will necessitate an amendment of the Ministers of State Act 1935, to provide for an increase of the maximum number of Ministers of State from ten to eleven. The Government proposes to ask Parliament to authorize this amendment of the act, and, on the passing of the bill, to recommend to His Excellency the Governor-General the creation of the new department. Until the act is amended in the direction indicated and the new department is created, the Honorable H. V. C. Thorby “will administer the functions which it is proposed to allot to the now department. When the new department is created, Mr. Thorby will be appointed as its Minister.

MINISTERIAL REPRESENTATION IN THE SENATE.

Senator MCLEAY:
Vice-President of the Executive Council · South Australia · UAP

. - by leave - I desire to inform the Senate that the following arrangements have been made for the representation of Ministers in this chamber : -

The Prime Minister, the AttorneyGeneral, the Ministers for Industry and External Affairs, and the PostmasterGeneral will be represented by myself.

Senator Foll, in addition to acting as Minister for Health and Repatriation, will represent the Ministers for Defence and Trade and Customs, and the proposed Minister for Works and Civil Aviation.

Senator Allan MacDonald will represent the Treasurer and the Ministers for Commerce and the Interior.

ANGLO-ITALIAN AGREEMENT.

Senator McLEAY (South Australia - Vice-President of the Executive Council). - by leave - During the course of the Prime Minister’s remarks in the’ House of Representatives on the 2nd November, he intimated that the United Kingdom Government proposed to take the necessary steps to bring into operation the Ango-Italian Agreement which was signed last April. He also stated that the Commonwealth Government had been in communication with the British Government on this subject, and had expressed the view that the sooner the agreement was implemented the better it -would be for both Great Britain and Italy, and probably for the general ‘ peace of the world. The British Parliament has since carried a motion welcoming the intention of the Chamberlain Ministry to bring the agreement into force, and this Government has now received advice that the British Ambassador at Rome, Lord Perth, will to-day hand to the Italian Minister of Foreign Affairs, Count Ciano, new letters of credence accrediting the Ambassador to the King of Italy, Emperor of Ethiopia. A declaration recording the entry into force of the Anglo-Italian Agreement will also be signed by Lord Perth and Count Ciano this evening. So far as the Commonwealth of Australia is concerned, the British Ambassador has been requested to inform the Italian Government that the Commonwealth Government will accord de jure recognition of the incorporation of Abyssinia into the Royal Italian Empire.

Honorable senators may recall that when the position of Abyssinia was considered by the League Council last May, no formal resolution was passed, but the President of the Council observed that a large majority of the members of the council were clearly in favour of each individual State deciding for itself, in the light of its own situation, the question of the recognition of the Italian annexation of Abyssinia. From the information in the possession of the Government it would appear that except in one area, the Italian Government is now in full control of Abyssinia, and there appears to be no likelihood of that control being seriously challenged in the future. The question of the maintenance of amicable relations between Great Britain and Italy is of considerable importance to the people of Australia, for, as honorable senators willrealize, it is to our interests that a peaceful and friendly situation should be preserved in the Mediterranean. In addition, this Government and the people of Australia generally will welcome any move that is made to lessen international tension and bring about a more cordial relationship between the various countries of the world. Until the last few years, a traditional friendship existed between Great Britain and Italy, and it is our earnest hope that the implementation of the Anglo-Italian Agreement will witness the revival of that friendly relationship.

page 1485

QUESTION

PARLIAMENTARY SESSION

Senator KEANE:
VICTORIA

– Is it a fact that, owing to the disorder existing in ministerial ranks, the Government proposes to run for cover much earlier than was originally intended? “Will the Leader of the Senate state the Government’s intention in this matter?

Senator McLEAY:
UAP

– If the honorable senator is anxious to obtain information as to the probable length of the present session, I suggest that he place his question on the notice-paper.

page 1485

CUSTOMS TARIFF VALIDATION BILL 1938

Assent reported.

page 1485

QUESTION

CIVIL AVIATION

CitizenAirForceUnitinTasmania.

Senator FOLL:
Minister for Health · QUEENSLAND · UAP

– On the 4th November, Senator Aylett asked the Minister representing the Minister for Defence the following questions, upon notice: -

  1. Will the Government reconsider its reply to the Premier of Tasmania to his request for the establishment of a unit of the Citizen Air Force in Tasmania and for the provision of an aeroplane for training purposes in that State?
  2. Can the Minister give any reason why Tasmania is not entitled to any portion of the increase in the defence expenditure for 1938-39?

The Minister for Defence has now supplied the following answers: -

  1. As stated in a reply on the 13th October to a similar question asked by Senator Lamp, no provision has been made in the present defence development programme for the establishment of a Citizen Air Force unit in Tasmaniu, as it has been necessary, with the limited funds available to give priority to other parts of the Commonwealth of greater strategic importance. This matter will receive consideration, however, in the event of any further expansion of the Air Forces. Facilities for civil flying training and practice are available toTasmanian residents through the medium of the Tasmauian Aero Club, which operates at Western Junction (Launceston) and Cambridge (Hobart). 2. (a) The amount allocated to Tasmania for 1938-39 is £176,000 for purposes of authorization of expenditure. As previously stated, however, the actual expenditure in any particular State of the Commonwealth is governed by such factors as location of contracts or suitable sources of supply.

    1. The amount tobe expended in Tasmania or any other State is bound up with the Government’s defence programme, which consists of a balanced scheme for the security of the Commonwealth as a whole and in which the defence of any one State is inseparably linked up with the general scheme.

page 1485

QUESTION

COMMONWEALTH BANK BOARD

Senator ALLAN MacDONALD:
Minister without portfolio, assisting the Treasurer · WESTERN AUSTRALIA · UAP

– On Thursday, the 3rd November, Senator Keane asked the Minister representing the Treasurer the following question, upon notice. : -

What amount has been drawn by way of salary fees, and expenses by each member of the Commonwealth BankBoard during the last six years?

The Treasurer has now supplied the following reply: -

By section 13 (2) of the Commonwealth Bank Act the salary of the chairman of directors is fixed at £1,000 per annum, and that of the other directors (with the exception of the Governor) at £600 per annum. During the period that the Financial Emergency Act was in operation the above-mentioned salaries were reduced in accordance with that act. No fees are payable to directors beyond the salaries mentioned above, but expenses (exclusive of fares) paidin cover out-of-pocket expenses incurred by directors when engaged on the hank’s business within the Commonwealth, but away from their usual place of residence, amounted to £7,135. during the past six years, oran average of £1.189 per annum divided amongst eight directors. In addition, amounts totalling £2.056 were, during the past six years, paid to three directors to cover out-of-pocket expenses whilst abroad on the hank’s business.

page 1486

QUESTION

AUSTRALIAN BANKS

Capital, Profits, Etc

Senator ARTHUR:
NEW SOUTH WALES

asked the Minister representing the Treasurer, upon notice -

  1. What is the amount of the total paid-up capital of all the trading banks in Australia as at the 30th June, 1938, or the latest date for which figures are available?
  2. What is the total amount of reserves held by those banks at the same date? 3. (a) What is the average rate of dividend disclosed on paid-up . capital of such banks a year for the period 30th June, 1915, to 30th June, 1932; and (b) for the period 30th June, 1932, to 30th June, 1938, or the latest date for which figures are available?
  3. What was the cost of establishing the Commonwealth Bank, and the Commonwealth Savings Bank? 5. (a) What is the total profit shown by the Commonwealth Bank (general banking), exclusive of the Rural Credits Department, from its inception up to the 31st December, 1932; and (6) What is the total profit shown from the31st December, 1932, up to the 31st December, 1937? 6. (a) What is the total profit shown by the Rural Credits Department from its inception to the 31st December, 1932; and (b) from the 31st December, 1932, to 31st December, 1937?
  4. What is the total profit of the Commonwealth Savings Bank from the date of its inception as a separate institution in 1928, to the 31st December, 1937? 8. (a) What is the total profit on the Commonwealth note issue since its inception to the 31st December, 1932; and (b) from the 31st December, 1932, to the 31st December, 1937? 9. (a) For what purpose are the profits of the Commonwealth Bank (general banking) being used or allocated; and (6) for what purpose are the profits of the Note Issue Department being used or allocated?

Senator ALLAN MacDONALD.Inquiries are being made, and a reply will be furnished as soon as possible.

page 1486

QUESTION

INSURANCE COMPANIES

Subscriptions to Commonwealth Loans

Senator FRASER:
WESTERN AUSTRALIA

asked the Minister representing the Treasurer, upon notice -

What amount has been subscribed by the insurance companies in Australia to internal loans floated by the Commonwealth Government since 1931, giving the amount in each loan by the specified company, with the rate of interest?

Senator ALLAN MacDONALD:
UAP

– The Treasurer has supplied the following answer : -

It is not considered that it is in the public interest to make public the contribution to Commonwealth loans of individuals or of public, semi-public, or private organizations. During the progress of a loan, subscriptions by individual insurance companies are made public if authorized by them. Such publicity is a matter for the individual institution concerned.

page 1486

QUESTION

PETROL, CRUDE OIL, KEROSENE

Senator AMOUR:
NEW SOUTH WALES

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

  1. What was the quantity, and what was the landed cost of: -(a) petrol, (b) crude oil, (c) kerosene, imported into Australia during 1937-38, showing the countries of origin?
  2. What was the consumption of: - (a) petrol, (b) crude oil, (c) kerosene, in Australia during 1937-38?
  3. What is the estimated quantity of: - (a) petrol, (b) crude oil, (c) kerosene, stored in Australia at any given time?
  4. What is the quantity of: - (a) petrol, (b) crude oil, (c) kerosene, (d) any other power spirit, produced in Australia in 1937-38?
Senator FOLL:
UAP

– The Minister for Trade and Customs has supplied the following answers : -

  1. Quantities imported into Australia dur- ing 1937-38 were as follows: -

The average import values (in Australian currency) exclusive of duty, based on Customs valuations for duty during 1937-38, are as follows : -

  1. Quantities consumed in Australia during 1937-38 are estimated to have been -
  1. It is not considered desirable to make public any governmental estimate of the quantities stored in Australia.
  2. Estimated quantities produced in Australia during 1937-38 are as follows: -

page 1487

QUESTION

KINGSFORD SMITH AERODROME

Senator BROWN:
QUEENSLAND

asked the Minister representing the Minister for Defence, upon notice -

  1. Has any work yet been done toward the erection of the proposed terminal building at the Kingsford Smith aerodrome at Mascot?
  2. If not, when is it proposed to proceed with the erection of this building?
Senator FOLL:
UAP

– The Minister for Defence has supplied the following answers : -

  1. No.
  2. Owing to heavy defence demands in other directions, it has not yet been possible to provide the necessary funds for this building. Under present circumstances, I am unable to indicate when the erection of the building will be commenced. The work will proceed, however, as soon as financial considerations permit.

page 1487

QUESTION

ASSISTANCE TO WHEATGROWERS

Senator E B JOHNSTON:
through Senator Collett

asked the Leader of the Senate, upon notice -

  1. Is it a fact that resolutions have been carried unanimously at public meetings held throughout the north-eastern and eastern wheat districts ofWestern Australia, urging that owing to the drought, assistance given by the Federal Government to the wheat industry this year should be on an acreage basis, with a minimum crop return of£1 an acre to the grower ?
  2. Did the Deputy Premier of Western Australia. (Honorable M. F. Troy, M.L.A.), when in Canberra recently, make special representations to the Government in support of federal assistance to the wheat-growers who have suffered from the drought being granted on an acreage basis?
  3. Will these representations be fully and carefully considered by the Government in connexion with the proposed legislation for the assistance of the wheat industry?
Senator McLEAY:
UAP

– The whole question of assistance to the wheat industry is at present under consideration, and a further conference on the subject is being held to-day. As soon as possible, the honorable senator will be furnished with the particulars of the proposals.

page 1487

STATES GRANTS BILL 1938

Second Reading

Debate resumed from the 4th November (vide page 1279), on motion by Senator Foll -

That the bill be now read a second time.

Senator DARCEY:
Tasmania

– I commend Senator Wilson for his very able exposition of the constitutional aspect of grants in aid to the States. For many years the smaller States have been endeavouring to secure more just treatment from the Commonwealth Government, according to their economic circumstances. At one stage Western Australia went so far as to threaten to secede from the Commonwealth unless justice was done to it, but found such a severance constitutionally impossible. On that occasion, when pointing out to the people of Western Australia what they would lose through secession, the Prime Minister (Mr. Lyons) said, “ Your greatest loss will be the loss of the Commonwealth Bank. If it had not been for the Commonwealth Bank, with the national credit behind it, the private banks would have had to close their doors in this crisis.” That statement may have frightened the people of Western Australia, and influenced them to desist from their agitation for secession. A greater measure of justice has been meted out to the smaller States since the appointment of the Commonwealth Grants Commission. Speaking in the Hobart Town Hall during the last election campaign, the AttorneyGeneral (Mr. Menzies) said that the grant to Tasmania was due entirely to the fact that a Tasmanian was Prime Minister of the Commonwealth. From the body of the hall I informed him that the grant in aid to Tasmania was not due to the fact that a Tasmanian was the Prime Minister, but was the result of the findings of the Commonwealth Grants Commission. The justice of the claims of the smaller States for grants in aid is now fully recognized and I hope that these grants will be continued in order to help the necessitous States to meet their special economic difficulties.

Senator CLOTHIER:
Western Australia

– I draw particular attention to the variation of the amounts granted to the various States over the last six or seven years. For Western Australia the figures have been : 1935-36, £800,000; 1936-37, £500,000;1937-38, £575,000; whilst for this year a grant of £570,000 is proposed. I suggest that the time has arrived when these grants should be made for periods of from three to five years ahead. Under the present system the smaller States cannot plan any long-range works programme because they are unable to forecast what amounts will be forthcoming from the Commonwealth from year to year. This difficulty apparently 13 also being felt in South Australia. Dealing with the subject recently the Advertiser, Adelaide, stated -

The smaller States, which means by far the greater part of Australia, are kept on an economic footing by the annual Commonwealth grants, ‘Without which they would find it impossible to balance their budgets and at the same time maintain the essential social services for which they are responsible. These grants are tlie clearest possible illustration of the extremely lopsided nature of the Commonwealth’s development. It is a sound principle that the two States which together contain about three-quarters of the total population, and which produce about the same proportion of the national wealth, should contribute, through the Federal Government, to the upkeep of the smaller States. The question is: Is that principle being applied in the wisest manner? To put it in another way: Is the Commonwealth getting the best value possible for the millions which it is paying out to the small States?

It is not intended here to make any definite suggestions whereby the Commonwealth Government could take the initiative in laying down a policy of decentralization designed to assist the smaller States. Obviously, it ls a subject which demands the closest consideration, and the most expert handling.

I point out that over the last four years the grant to “Western Australia has decreased by nearly £300,000. Had the government of Western Australia known that the grant was to be decreased in this way, it would have been enabled to adjust its budget accordingly.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

, - During the last five or six years the subject of grants to the smaller States has been discussed annually in this chamber. On each occasion I have directed criticism against the method by which the Commonwealth Grants Commission arrives at its conclusions. The more one goes into the matter, the more it appears to become an actuarial problem worked out on figures which the layman has very little chance of following. Section 96 of the Constitution provides for the making of grants to the different States and sets out that the Commonwealth Government may make those grants on any basis which it deems fit. The first grant to a State was that made to Western Australia in 1910. The first grant to Tasmania was made in 1912, and South Australia received its first grant in 1929. Up till 1933 the grants were allocated by Parliament itself. In that year the Commonwealth Grants Commission was appointed to assess the grants which should be made to the claimant States. Every honorable senator will agree that the first basis on which the commission computed grants in aid to the smaller States was the disabilities which the smaller States suffered as the result of federation. That basis, however, was gradually changed until the grants were assessed by the commission on the basis of the financial needs of the claimant States. Some formula is necessary for the assessment of these grants. When federation was planned the framers of the Constitution recognized that the States should be compensated for the losses which they sustained as the result of being deprived of certain taxation machinery, and originally the Commonwealth had to return to the States a certain percentage of the customs and excise revenue. That system bf payment to the States was changed in favour of the system of per capita payments, and later that system was abandoned in favour of an arrangement whereby the Commonwealth contributed towards the interest and sinking fund obligations of the States. I suggest that when, later, it was found necessary to change that system, the basis of special assistance to the States should have been that of disability as the result of Federal policy.

Senator Leckie:

– In that case the States would not have received anything.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– They would have become entitled to more than they are receiving now. The present Commonwealth Grants Commission takes the three non-claimant States as a standard in assessing its grants to the three claimant States. I suggest that before it adopted that basis the commission should have exhaustively examined the finances of the three non-claimant States, paying particular attention to their general taxation activities. Apparently the commission takes the view that the three non-claimant States are all that they should be. Those

States are allowed absolute freedom in making provision fortheir social services, but all of the expenditure incurred by the three claimant States on social services is fully inquired into. Furthermore, the commission makes no check upon the taxation activities of the nonclaimant States, and inflicts no penalty on them if they do not practise frugal government. The claimant States however, are paid a bonus if they keep their expenditure on social services 10 per cent. below that of the non-claimant States. Furthermore, the severity or otherwise of the taxes levied by the claimant States is judged according to a standard set by the three non-claimant States. In its last report the commission penalized South Australia to the amount of £14,000 because that State had not given more careful consideration to its loan expenditure. I realize that the commission must have some basis on which to assess grants to the smaller States, but before accepting any standard, it should thoroughly examine it. Parliament appointed the Commonwealth Grants Commission to deal with these matters and it is only right that we should accept the recommendations of that body. It is not sporting to question a decision of an umpire, but I do claim the right to criticize the circumstances under which a particular ruling has been given. The terms of reference applying to the Commonwealth Grants Commission are not wide enough to cover the whole field of States disabilities. Take the position of South Australia as an illustration. Under this bill that State has been allocated a total of £1,040,000, which amount includes £1,000,000 for the purpose of reducing the per capita deficit to the average level of the standard States; £20,000 for what is termed economic administration and £135,000 for expenditure on social services. Those amounts aggregate £1,155,000, but because taxation in South Australia is not high enough, by comparison with the standard States, we arc penalized to the extent of £101,000.

SenatorWilson. - The severity of taxation in South Australia is above the average for the Commonwealth.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– It is 10 per cent. above the average. We are, as I have stated, penalized to the amount of £101,000 on this account, leaving a net total of £1,054,000. Then there is also this anomaly: South Australia was allocated £20,000 for economic administration, but before the computation was completed the State was penalized to the amount of £14,000 because, in the opinion of the commission, insufficient attention has been given to loan expenditure. If South Australia was entitled to £20,000 for economic administration it should not have been penalized in the way indicated. My concern is not so much in regard to the allocation for South Australia as in regard to the probable trend of financial policy due to the formula adopted by the grants commission in assessing grants. Has this Parliament the right to set up a body having the right to criticize the finances of States and recommend punitive measures? I say that such an appointment is wrong. By adopting the general and social services of eastern States as the standard, in the consideration of claims by the smaller States, the commission is simply making the rich richer and the poor poorer. The stronger States are fattening on the poorer States which are being given grants that might almost be regardedas conscience money to keep them going so that the larger States may continue to exploit them. We have been told that “ Finance is government and government is finance”. The formula adopted by the Commonwealth Grants Commission improperly takes into consideration the finances of the claimant States in fixing the allocations to them.

Senator Allan MacDonald:

– There is nothing wrong with the allocation to South Australia this year.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– I hope that sufficient will be provided, but every year during which the present system of allocation continues will be a year closer to unification. Commonwealth revenue is collected in all the States of Australia and it should be distributed equally amongst the people of Australia. The claimant States suffer, by comparison with standard States such as New

South Wales and Victoria, which virtually have a monopoly of secondary industries and draw much of their wealth from other parts of the Commonwealth. Their sound economic position should enable them to provide assistance to States less fortunately placed. For that reason I think that the grant to South Australia should be greater than the amount recommended.

Senator Dein:

– The commission thinks it is sufficient.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– The industries situated in the larger States are continually being expanded and there seems little prospect of new enterprises being established in the smaller States, because money draws money. Take, for instance, the money to be expended on defence. Of the £16,000,000 set aside for this purpose, only £291,000 will be spent in South Australia.

Senator Gibson:

– The money is being spent where it is most needed.

Senator JAMES McLACHLAN.In my opinion more expenditure is necessary in South Australia. Some people have argued that as South Australia is not a vulnerable State, defence expenditure there would not be justified. I hold the opposite view. I contend that if South Australia is not vulnerable that surely is the soundest reason for the establishment of munition factories in that State. The Commonwealth Grants Commission in its last report, took the State of Tasmania severely to task because of the condition of its railways. It stated that financial losses in connexion with railway services were largely reflected in the States budgetary position. The view takenby the commission in this respect is most disturbing, and may have a wider application in future. A more equitable basis of allocation should be adopted, and greater attention paid to disabilities. Transport plays a very big part in the economic life of all the States. Competition by the railway systems of New South Wales and Victoria operate unfairly against South Australia. Although the distance by rail from Sydney to Broken Hill is 700 miles, the charge for the carriage of a bag of flour is the same as from Adelaide to Broken Hill, which is approximately one half the distance. The Railways Department of New South Wales is undoubtedly losing money but it is taking trade away from South Australia. The position of South Australia with regard to Victoria is even worse. For years all the wool which came down the Darling River from New South Wales was sold in Adelaide, but since special inducements have been offered to transfer that wool to rail transport at Mildura, it is carried 370 miles to Melbourne at a price not greater than that charged for cartage from Morgan to Adelaide, a distance of only 100 miles. All these things should be taken into consideration in assessing the disabilities suffered by the weaker States.

Senator McBride:

– The honorable senator would like the Inter-State Commission to be revived?

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– Yes, and I should like to see wider powers given to it. If the Inter-State Commission is not to he re-constituted, the powers of the Commonwealth Grants Commission should be extended.

Senator Allan MacDonald:

– The Opposition would not favour the reconstitution of the Interstate Commission.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– I believe that. For several years we have been told that the Commonwealth Grants Commission would soon be superseded by a new Inter-State Commission with much wider terms of reference.

Senator McBride:

– That was in the policy speech.

Senator Keane:

– So was the relief of unemployment.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– I hope that in the not distant future we shall have an Inter-State Commission functioning.

Senator Cameron:

-Can the honorable senator tell us how that body would help the smaller States?

Senator Foll:

– It could help only by recommending larger grants.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– The claimant States are fully entitled to a greater measure of financial assistance.

But we believe that the Inter-State Commission could help the smaller States through the exercise of its trade and commerce powers and the consequent decentralization of industries. Unless some such change be brought about we shall, I fear, gradually move toward unification in government through the absorption- of weaker States by the stronger. Transport plays an important part in the development of industries. I am aware of the limitation of Commonwealth power in this matter, and we all remember the result of the last referendum; but I feel sure that so long as that section of the Constitution remains unaltered, we shall have the spectacle of rich States becoming richer and poor States poorer. I sincerely hope that future allocations will be determined by an Inter-State Commission vested with wider powers than those exercised by the Commonwealth Grants Commission. On behalf of South Australia I am thankful for the grant made this year, though I wish it were larger. But I am not complaining; I believe that members of the commission gave earnest consideration to the claims made by the weaker States, and recommended an amount which they believed was fair in the circumstances. My chief complaint is that the standard adopted was not quite what it should have been in the interests of the claimant States.

Senator CAMERON:
Victoria · CP

– I agree with the familiar aphorism, quoted by Senator James McLachlan, that finance is government and government is finance, but the honorable senator did not elaborate that statement by saying that financiers govern this Government, which is subservient to private banking institutions and money lenders. The actual position is, that the allegedly governed govern the Government, or, in other words, that the private banks and financiers, who are supposed to be subordinate to a national government, are really its superiors and lay down the conditions under which money shall be provided for national requirements. The Loan Council is then in the position of having to allocate money, not in accordance with the nation’s requirements, but in accordance with the conditions laid down by private banking institutions and financiers. For obvious reasons, this Government will not give effect to a policy under which it could control finance. So long as that state of affairs prevails, the position of which Senator James McLachlan complains will continue and ultimately will become worse. The honorable senator views with considerable apprehension the probability of a system of unification becoming established in Australia, but I remind him that that is precisely what the private banking institutions and the financiers desire.

Senator McBride:

– Is not unification included in the Labour party’s policy?

Senator CAMERON:

– It is, but under different conditions. The Labour party would control the banks. Our friends opposite are afraid of unification under a system enabling the banks to continue to control governments as they do to-day.

Senator McBride:

– The honorable senator is only assuming that.

Senator CAMERON:

– I am entitled to do so, seeing that Senator James McLachlan did not elaborate the position sufficiently to make his meaning clearer. The only construction that one can place upon his remarks is that he fears unification under a system, such as we have to-day, By which the private banking institutions and private money lenders control the Government and direct its policy. A system of unification under the Labour party’s policy would be quite the reverse. A Labour government would control the banks, and there would be no limit as to the amount of money which would be made available to the States provided that wealth was created on the principle of value for value. A State which desired to improve or extend, say, its railway or social services, or do anything that would add to the national wealth, should have money made available to it and there would be no risk. “We would be a great deal better off than we are to-day, and the problem of unemployment could be solved to a far greater degree than it can be solved under existing conditions by which governments are obliged to go cap in hand to private banking institutions and financiers in order to finance the country. Honorable senators opposite and supporters of the Government in the House of Representatives give their views as to the manner in which this country should be financed, but all that they do is to advance the interests of the private owners of wealth. I am pleased to learn that it is being realized to a far greater extent than ever before, that the Labour party’s financial policy is the only policy that is workable and in every way satisfactory.

Senator McBride:

– The people have not yet been convinced of that.

Senator CAMERON:

– The people are being convinced and representatives of the Labour party are being returned to this Parliament in increasing numbers. Senator McBride, who is a protagonist of orthodox systems, should realize that old customs die hard. I now wish to direct attention to the loan moneys received by Victoria and New South Wales.

I am not blaming New South Wales for having more influence with the Loan Council than Victoria, but I believe that the dominant idea underlying what I am about to disclose is to keep a Lang Government out of power in New South Wales, and to defeat the Dunstan Government in Victoria. In the Age newspaper of the 30th of May, 1935, the following statement appeared -

Emphasizing his claim for a larger portion of the loan programme, Mr. Dunstan produced statistics to the Loan Council showing that of £27,274,000 borrowed on the local market last year, Victoria contributed £11,594,000. and “New South Wales £10,270,000, or £1,324.000 less. Despite this, New South Wales’ share of the money raised was £12,400,000, and Victoria’s only £2,040,000. New South Wales contributed 37 per cent, of the loan, against Victoria’s 42$ per cent., but received £2,130,000 more than she subscribed.

The following table shows subscriptions to loans by the various States and the allocations by the Loan Council : -

The same basis exists throughout; Victoria contributes more than is contributed by New South Wales, but receives less than is paid to that State. And because Victoria receives less than is required, that State is unable to give effect to the policy of the Dunstan Government to provide full-time work at award rates for every man able and willing to work. Unfortunately, the State Government has not the power to raise the necessary money, and because it is subject to the will of the Loan Council, which, in turn, is subject to other persons not responsible to the people, work is not provided for the unemployed. The position, which is practically the same in all the States, is growing worse all the time.

Senator McBride:

– Is the honorable senator suggesting a grant to Victoria?

Senator CAMERON:

– I suggest that that State should be treated according to its needs. I do not deny the same right to the other States. The following table shows the amount of loan moneys applied for by New South Wales and Victoria since June, 1932 : -

The amounts granted to the two States by the Loan Council during the same period have been : -

I direct attention to those figures in order to show that, in addition to the fundamental injustice of the policy followed by the Loan Council in allocating money to the States, Victoria, although contributing more money towards the loans than is contributed by New South Wales, receives less than its requirements.

Senator Dein:

– Does not every State receive less than its requirements?

Senator CAMERON:

– I do not suggest that New South Wales receives all that it requires; I was referring to Senator James McLachlan’s remark that we should accept the umpire’s decision without question. I have no desire to be offensive, but I suggest that, where umpires are subservient to the will of people outside Parliament, they are not above suspicion. Numerous deputations which have waited on the Premier of Victoria have urged the undertaking of public works which would add to the wealth of the State, and, therefore, of the nation. On each occasion Mr. Dunstan has agreed with the deputationists but has added that, until his State receives fair treatment from the Loan Council in the allocation of moneys, little or nothing can be done to assist the 40,000 unemployed workers in that State.

SenatorDein. - Every Premier says the same thing.

Senator CAMERON:

– Possibly, all the Premiers have good reasons for their statement, but the fact that they all say the same thing supports my argument. The position cannot be dealt with effectively until the Commonwealth Government takes its courage in its hands.

SenatorMcBride. - Has this subject been referred to the Commonwealth Grants Commission?

Senator CAMERON:

– Instead of delegating its powers to other bodies, the Government should have the courage to act on its own initiative. Unless it does so, the position will grow worse. If honorable senators opposite can show that the difficulties which confront Australiacan be overcome by a continuance of the policy which has been followed in the past, I shall be only too glad to listen to them, but I point out that experience is against them.

Senator McBride:

– Does the honorable senator say that things have become worse since 1931?

Senator CAMERON:

– If the position be examined from the point of view of the nation as a whole, it will be found to have grown worse. I conclude by saying that unless the Parliaments of the Commonwealth can show better results than have attended their actions in the past, they deserve to be discredited.

Senator HERBERT HAYS:
Tasmania

– Whatever views honorable senators may hold regarding the making of grants to necessitous States, every honorable senator will agree that the method now being followed is far in advance of any which obtained in the past. Speaking in general terms, it can be said that the weaker States have received from the Commonwealth Grants Commission a substantial measure of justice which was long overdue. The making of grants to needy States has always been a vexed question. In this connexion Tasmania seems to have been singled out for specially unjust criticism by various royal commissions and other bodies. Some honorable senators who have spoken on this bill would almost lead one to believe that the prosperity of Victoria and New South Wales, and to a less extent, Queensland, is due to the almost superhuman capacity of those in authority in those States. I shall not admit that the apparent prosperity of Victoria and New South Wales, for instance, is due to better management, or greater enterprise, on the part of the governments of those States, as compared with the efforts of the governments in the smaller States. Senator

James McLachlan’s proposal for the adjustment of these grants involves the whole constitutional principle that Commonwealth law must apply equally to each of the States. I might mention in passing Commonwealth fiscal policy. Our customs policy, which is now accepted as one of high protection, must naturally benefit some of the States to a much greater extent than others. However, no honorable senator would say that benefits accruing as the result of this policy to Victoria and New South Wales are attributable to superior management on the part of the governments of those States. It cannot be said that the more prosperous States have shown greater enterprise, whilst the governments in the smaller States have lacked initiative. Every commission which has been appointed to inquire into grants in aid to the smaller States has been directed to investigate the financial position of those States with the object of finding out to what extent their disabilities have been due to Commonwealth policy. I suggest that it is impossible to estimate such disabilities in terms of pounds, shillings and pence. In any case, I suggest that that consideration has no bearing on this measure. We must remember that all of the States aTe grouped in a federation. If the smaller States are not progressive, and fail, for instance, to provide adequate social services or to make effective provision for public works, the drift of population from those States to the more prosperous States becomes more pronounced. Every investigation which has been made to date has shown quite clearly that there is a definite drift of population from the smaller States to the larger States, the majority of the migrants being persons between 20 and 30 years of age. Much expenditure has been incurred on the elementary and technical education of these people who have been lost by the smaller States. Thus, the larger States are reaping a great advantage in this respect. I submit, however, that we cannot make the smaller States more prosperous simply’ by making the larger States poorer. When the bulk of certain expenditure - on defence, for instance - is necessarily incurred in two or three States, some compensation by way of financial assistance should be made to those States which do not, and cannot, share in that disbursement. Representatives of the larger States should not regard these annual grants in aid as a a dole to the less progressive smaller States. We must remember that a citizen in any of the States is a citizen of the Commonwealth, and it should be the ambition of every honorable senator to see that the benefits arising from the resources of this great country are evenly distributed amongst our people.

The problem of making financial assistance to necessitous States is very difficult and has been repeatedly thrashed out in this Parliament. I do not think that the difficulty will be overcome, as some honorable senators have suggested, by adopting a system of permanent grants. I admit that there is something in the suggestion that if State Treasurers were given some indication of the amounts which they could expect from the Commonwealth for some years ahead, they would be better able to balance their budgets. However, when comparing the economic conditions of the States, we must not lose sight of the fact that a State which is in a necessitous position this year might, through some industrial revival, such as a mining discovery, be enabled in the following year to improve its position to such an extent that it will be able not only to manage without assistance from the Commonwealth, but also to assist financially other States. Through the Commonwealth Grants Commission, the problem is being handled much more satisfactorily than it was hitherto. In the main, the formula by which the commission assesses the grants is equitable. There is abundant evidence that the more prosperous State3 have been favoured by federal policy as the result of their greater representation numerically in the House of Representatives. After all, it is the votes which count, and the larger States have a preponderance of the votes in deciding what the general policy of this country should be. For instance, our fiscal policy works out to the disadvantage of the smaller States, which are exporters and possess a comparatively small home market. Our customs tariff is of far greater advantage to Victoria and New South Wales, where rural and metropolitan industries are more evenly ‘balanced and a much larger home market is available. The smaller States are also necessarily at a great disadvantage as compared with the larger States in respect of railways. Every State must have its railway system. I suggest that the solution of the problem of railway finance in Tasmania would mean the solution of the whole financial difficulty of that State. Tasmania also finds itself in a very disadvantageous position in respect of its great hydroelectric undertaking. That is probably one of the most ambitious schemes ever undertaken by so small a community. Nearly £6,000,000 has been expended on that scheme. In undertaking it, the people of Tasmania cannot be said to have acted extravagantly; indeed, they took a long view. That State’s water power could not be developed in piecemeal fashion, and steps were taken to provide power at a low rate. However, Tasmania is at a far greater disadvantage iri undertaking such a scheme than would be Victoria or New South Wales, where the power could be sold at a price which would return a huge profit. Tasmania does not possess nearly so many requiring power as are possessed by New South Wales and Victoria. As the result, the Tasmanian hydro-electric undertaking, cannot work at anything like the rate of profit which would be available to a similar undertaking on the mainland. Tt is essential that Tasmania should develop its natural, resources. The commission expresses the opinion that loan expenditure in Tasmania has been too heavy. As the result of such “ extravagances “, the commission recommended a reduction of the grant to Tasmania this year. We commended the Government for having appointed the commission and we also commended the Prime Minister for his undertaking that, the commission’s i ecommendations would be honoured. Therefore, wc should not and we do not quarrel with the recommendations made. Our immediate concern is the commission’s assessment of the amount payable for disabilities at a minimum, and the adoption of financial needs as the basis of its recommendations. That touches the much wider subject of general policy, with which the commission has no power to deal.

Senator LECKIE:
Victoria

.- Many of the speeches made this afternoon suggest that the honorable senators making them are in the habit of looking a gift horse in the mouth. Whilst commending the work of the Commonwealth Grants Commission, the speakers also said that the disabilities and disadvantages suffered by the smaller States were such that the grants should have been much bigger. I contend that the making of annual grants is the wrong way in which to cater for the needs of the claimant States. I do not indicate what is the right way, but it seems to me to be most “unsatisfactory that each year the Commonwealth should be required to grant to the claimant States sums of money in accordance with their financial disabilities as assessed annually by the commission. The practice has a bad effect on this Parliament, because in pressing the claims of their respective States for increased grants, honorable gentlemen in this chamber and members of the House of Representatives continually depreciate the States which they represent. An endeavour iB made to convince the Parliament that povertystricken conditions obtain in those States. I refer particularly to statements made in regard to Western Australia. I have lately returned from a visit to that State, where I spent about a week, and I was very much impressed with the atmosphere of general prosperity. Western Australia is, with the exception of some wheat-growing areas, enjoying a glorious season. Grazing land appeared to me to be in much better condition than it is in Victoria at the present time. During the last few years representatives of Western Australia in this Parliament have consistently painted most unattractive word pictures of conditions in that State, in order apparently to force the payment of a higher grant from the Common wealth. The States of the Commonwealth are divided roughly into two classes- the “Eather Christmas” States, and the “ gimme “ States. The “ gimme “ States are always looking for assistance from the “ Father Christmas “ States.

Senator McBride:

– Does the honorable senator forget that the eastern States are subsidized by Commonwealth fiscal policy?

Senator Wilson:

– What does theCommonwealth Grants Commission say about the effect of fiscal policy?

Senator LECKIE:

– I shall come to that. For the moment, I shall confine my attention to social standards. The commission states that, in reaching its decisions, it took into consideration the desirability of making possible for people in the small States the same standard of social services as are provided in the three larger States.

Senator Wilson:

– Less 10 per cent.

Senator LECKIE:

– The report states -

The standard taken by the commission is based on the experience of the three most prosperous States and thus there is a tendency to give the claimant States a standard to which they might not be able to attain if they were not in the federation.

Later, the report continues -

If South Australia’s claims were conceded, the standard of social expenditure allowed to the claimant States would be greater than that of Queensland, and considerably greater than that of Victoria. As it is, the standard allowed the claimant States is about 10s. per head greater than the actual expenditure of Victoria.

Therefore, when we talk about social standards in the claimant States, we should remember the liberal views taken by the commission. It has allowed for an expenditure of at least 10s. a head higher than that of Victoria alone. It. is true that originally claims were considered on the ground of disabilities suffered, rather than on needs. The commission investigated the position most carefully and has reached the conclusion that disabilities were more than compensated for by the advantages conferred by federation. Take, for instance, the Postal Department. Last year it showed a profit of £3,000,000, 75 per cent. of which was earned in the eastern States, yet expenditure is equally distributed so that all States are given the same facilities and conveniences. A similar position exists with regard to taxation revenue. Between 70 per cent. and 80 per cent. of Commonwealth taxes are derived from New South Wales, Victoria, and, to a lesser extent, Queensland. The bulk of the sales tax is collected in the eastern States, yet Commonwealth expenditure is allocated according to the needs of various States. On the subject of disabilities the commission states : -

In view of this claim it is desirable to repeat our views on this issue. The original commission was of opinion that no grants should be made on the ground of disabilities due to Federal policy. Insofar as Federal policy accentuated the adverse financial position of a claimant State, it would be reflected in a grant on the ground of needs. This decision was made on general grounds which are fully explained in the third report, and it is not necessary to repeat them here except to say that if grants were given on the ground of the adverse effects of Federal policy, it might result in a State which is more prosperous than the average, getting a grant . . . Moreover, the main effects of Federal policy such as the tariff, are felt by individuals and not merely by States, and the individuals affected reside in all the States.

If it is true, and I do not think it is true to the extent generally believed, that the man on the land is adversely affected by the tariff, farmers in Victoria and New South Wales are just as much entitled to assistance as are farmers in South Australia or Western Australia.

Senator McBride:

– Farmers in Western Australia and South Australia do not get grants.

Senator LECKIE:

– Not individually, but the States do. I repeat that if any particular section of the community is adversely affected by the tariff, farmers in Victoria or New South Wales are entitled to recompense for disabilities which the smaller States claim as their particular right. The report states further -

To compensate a claimant State because some of its citizens suffered, and not to compensate other States or individuals affected in a similar way would be absurd … It will be seen, therefore, that a claim for a grant to these States on the ground of disabilities could not be sustained.

It is significant that all the criticism has come from the claimant States. Another reason for the reduction of the grants is given on page 59 of the commission’s report, which states -

The commission has drawn attention of the claimant States to the fact that some proportion of their loan expenditure during recent years has not been productive and that the interest is not recovered. . . It is clear that a considerable proportion of the expenditure by Western Australia is not productive and that the debt charges involved will not be recovered. If the interest were collected in full, the budget receipts would benefit, but failure to collect interest will have the reverse effect, . . .

It will be seen that the commission made a thorough investigation of this problem. One matter that has not been taken into account, however, is the effect of the petrol tax, of which 3d. a gallon is returned to the States for expenditure on roads, etc. The total amount remitted is more than £4,000,000, and it is allocated according to population and area.

Of the £1,299,000 collected in Victoria by means of the petrol tax only £726,000 was expended on roads in that State. Victoria has actually contributed £573,000 towards the construction of roads in other States. It is barefaced robbery. The Commonwealth Grants Commission has apparently overlooked the fact that Victoria actually contributes £483,000 towards the construction of roads in Australia. From the same fund New South Wales has been deprived of £294,000, whereas Queensland received an additional £238,000, South Australia £43,000, and Tasmania, £110,000. The commission’ has not taken that factor into consideration, nor has it realized that Western Australia received its share of the £4S3,000 contributed by the petrol users in Victoria.

Senator Wilson:

– It did not take into consideration the fact that £5,000,000 is being expended on defence in Victoria.

Senator LECKIE:

– Quite recently I heard some one speak of the necessity to study this subject in a national way, but now Senator Wilson complains because more money is being spent in States with a larger population than in more remote States. I do not intend to oppose the bill, but the representatives of those States which are to benefit should not “look a gift horse in the mouth “. The present system of ladling out money cannot continue indefinitely, and the continual cry for additional assistance must cease. The Government should devise a better means than that at present in operation, because it has a tendency to depreciate the importance of the States which have to seek assistance.

Senator CUNNINGHAM:
Western Australia

– I agree with Senator Leckie that this is not the best way m which to aid the less populous States, and that the Government should devise a better basis on which to render assis tance. In debating this subject it is necessary to study the position which existed prior to federation and to compare it with the conditions since. I would remind Senator Leckie that within ten years of having been granted responsible government Western Australia entered the federation. Western Australia is the youngest State in the Commonwealth, and therefore secondary production is not organized to the same degree there as in the eastern States. The framers of the Constitution, doubtless realizing the disadvantageous position in which Western Australia would be placed on entering a federal system., provided for a tribunal to review the disabilities of the younger and less populous States. Although Western Australia is referred to to-day as one of the smaller States, it should be remembered that in area it is the largest. Being the largest and also the youngest State within the union it has tremendous financial responsibilities, and for that reason its representatives have from time to time to bring its disabilities before the Commonwealth Parliament. About 40 years ago, Western Australia proved to be of great help to the eastern States, and particularly to Victoria. The discovery of gold in Western Australia was a godsend to struggling manufacturers in Victoria, who, being wise men, took advantage of the opportunity afforded them and built up their secondary industries, thereby making employment available to the people. Not only was Western Australia a market for goods manufactured in Victoria, but it was also a source of direct revenue to the latter State, inasmuch as the earnings of tens of thousands of Victorians who had migrated to the west were remitted to Victoria for the support of their families. In these circumstances, Victorians should look rather kindly upon the people of Western Australia, which as a young State is finding itself at a great disadvantage as a result of federation. Senator Leckie said that the commission has taken into consideration not only the disabilities of the less populous States, but also some of the disadvantages accruing to them since entering the federal system. Western Australia has gained very few advantages. An outstanding advantage is the transcontinental railway. Perth has a new General Post Office, but we also have that monument of Commonwealth inefficiency, the Henderson naval base, where money was squandered wantonly by the Commonwealth authorities. The commission has reminded the Government of “Western Australia that, as a result of injudicious expenditure on non-productive works, the State is to be penalized. We are not moaning on that account. We are thankful to have our just claims recognized, hut we do not want the richer States, such as Victoria, which we have helped to build up, to hand us out assistance in the form of a dole. I fail to see that by continuing a system of granting sums of money annually to the smaller States we are going to assist materially to build up secondary and other industries in those States. We must evolve a better system of industrialplanning with a view to developing latent wealth, thus enabling us to support an increased population. Until that is done we must continue to call uponthe Commonwealth Government to make good some of our losses, because we have to consider that apart from its disabilities particularly owing to an absence of secondary industries Western Australia is a State of vast distances and has huge areas of wheatproducing lands, some of which are experiencing drought. Although £44,000 was made available last year to assist drought-stricken farmers, that amount is being deducted from the 1938-39 grant. We are now in the throes of another drought in the same portion of the State. In these circumstances the representatives of the Western Australian Government will have to seek additional financial assistance fromthe Commonwealth, and that subject is being discussed to-day at a meeting of Commonwealth and State Ministers in Canberra.

SenatorMcBride. - There is a severe drought in Victoria also.

Senator CUNNINGHAM:

– I am not disputing that. I am merely saying that in addition to our ordinary disabilities the wheat-growers in Western Australia are again victims of drought. What has been accomplished in Western Australia by a comparatively small population in 100 years is probably unequalled in history. That should demonstrate that the Western Australians are progressive people. The more populous States receive substantial assistance from the Commonwealth. Even during this session Parliament has passed bills in which provision is made for the expenditure of enormous sums of money in New South Wales and Victoria. Such expenditure means the erection of factories, the manufacture and installation of machinery, and consequently additional employment. 1 do not think that the people of the eastern States have any cause for complaint.

SenatorDein. - They do not complain.

Senator CUNNINGHAM:

-Some of them do. For instance, some of Senator Leckie’s references to Western Australia were far from being flattering. Senator Cameron set out to attack the whole financial structure.

Senator Gibson:

– He did not deal with the bill at all.

Senator CUNNINGHAM:

– In paragraph 194 of its fifth report the Commonwealth Grants ‘Commission said -

Special grants are necessary because -

inequalities arise from the impossibility of relating finance to function in the distribution of constitutional powers;

the development of one economic unit in Australia has led to concentration and specialization in certain parts at the expense of others; and

from time to time, with economic depression, certain weaker States will become an embarrassment to the Commonwealth if not assisted.

I direct special attention to paragraph 195-

Grants paid so far have not imposed any serious burden on the Commonwealth, and have, in effect, involved a beneficial redistribution of the total financial resources of the Federal system.

The work of the Commonwealth Grants Commission has been of benefit to not only the States but also the Commonwealth. It is true that Western Australia disagrees with some of the commission’s conclusions as well as the premises on which they are based. For instance, the commission has charged the Government of that State with having expended loan moneys on nonreproductive works. But could not a similar charge be levelled against every government ? In this connexion it is well to remember that what to-day appears to be a nonproductive work may be of great value 25 years hence. It is not wise to judge everything on the result accomplished up to date; the long view must be taken. If, in arriving at our judgments, we visualize possible developments in the future, we may see that beneficial results will accrue from expenditure which now appears to be non-productive. I support the second reading.

Senator COLLETT (Western Australia) 1.5.17]. - The subject-matter of this bill has been debated annually for several years, so that little remains to be said as to the merits or demerits of grants to certain States. Senator Leckie painted a vivid picture, but in my opinion, he placed most of his colour in the wrong places on the canvas. Senator Cunningham spoke of the youthfulness of Western Australia as a State, and gave that as a reason for its economic condition to-day. Perhaps when Western Australia entered the federation it could not afford to do so. I think that view was held by Sir John Forrest, who waa Premier of the -State in 1S99 and 1900. but he was persuaded, partly by people in the eastern States, partly, I think, by the Colonial Office, to waive his objection, on the condition, which later was incorporated in the Constitution, that any assistance deemed necessary would be afforded the young State. Speaking by and large, Western Australia has benefited from federation, but it has reached that stage in its development at which other than financial considerations must be taken into account. That is why I submit that the position should be reviewed more in the light of the disabilities of a State rather than of the amount required to balance its budget. As State documents, the reports of the Commonwealth Grants Commission probably have no equal in the records of this Parliament. Nor can much fault be found with the reasoning and the logic of Mr. Eggleston and his colleagues. But the basis of the commission’s reports is at fault. In my opinion, it is wrong to take into account the things which would seem to make certain States a drag upon their more prosperous neighbours.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– That the commission recognizes that will be seen from a study of page S5 of its report.

Senator COLLETT:
WESTERN AUSTRALIA

– The idea of an Interestate Commission appeals more to the people of the needy States than does the Commonwealth Grants Commission. This Senate, which is a States’ house and represents the States separately as well as jointly, has on two occasions passed a bill for the establishment of an InterState Commission. It is for the Government as well as the Opposition to justify its attitude to the smaller States. In my opinion, the present commission cannot continue in its present form much longer without graver issues than are now facing us being raised. In the meantime, I shall support the bill as it stands.

Senator COOPER (Queensland) [5.23 j. I speak for every Queensland senator when I say that we are always willing to vote for the annual bill providing for grants to the weaker States. As I listened to the speeches of honorable senators opposite, I was amazed that there was not more appreciation of what the Commonwealth has done for those States. Both Western Australia and South Australia contain large areas of what cannot be described as first-class pastoral or farming, land. Tasmania is a more balanced State, in that it has both primary and secondary industries well established. I was particularly struck by the lack of appreciation shown by some Tasmanian senators of what has been done for their State. In the limited time at my disposal, I have tried to ascertain what assistance has been rendered to Tasmania during the last six years, and as a result of my investigations, I claim that in respect of grants and subsidies that State has been treated better during the last six years than at any time previously. In 1934-35, a telephone cable to connect Tasmania with the mainland was provided at a cost of £208,000, yet there are many large inland towns on the mainland which have no telephone service at all.

Senator Aylett:

– Towns are not States.

Senator COOPER:
QUEENSLAND

– Moreover, there is no telephone link between the

Northern Territory and any of the Australian capital cities. I point out, further, that on the 1st October, 1934, a daily aerial service was inaugurated between Melbourne, Launceston, and Hobart, D.H. S6 aeroplanes operating daily in each direction. The annual subsidy paid for that service is £12,600. Although some senators from Tasmania claim that their State is being unfairly treated, evidence could be produced to show that Tasmania has probably lias been given more than it is entitled to. Later, on the 13th July, 1936, the air connexion between the mainland and Tasmania was further improved by a direct daily service in each direction between Melbourne and Launceston, using Douglas aircraft, whilst the daily connexion between Launceston and Hobart was still maintained, and the additional service between Melbourne and Launceston, via King Island, was continued on a thrice-weekly schedule, linking at Launceston with the daily service to Flinders Island. In order to ensure the rapid transit of mails between Tasmania and the mainland, the Commonwealth Government decided that, as from the 19th October, 1937, first-class mails between the mainland and Tasmania would be carried by air without additional charge to the sender.

Senator AYLETT:

– That is as much a benefit to the mainland as to Tasmania.

Senator COOPER:

– I wish that the Commonwealth Government would treat every capital city in Australia similarly, and more particularly the town of Darwin. That centre’s only link with the rest of the Commonwealth is a telegraph line, but, nevertheless, the air mail rate of 5d. operates in respect of it, whereas Tasmania gets its mail services at ordinary rates. I am merely endeavouring to show what has been done by this Government for Tasmania. During the last seven years it has expended approximately £51,000 in preparing and improving aerodromes and emergency landing grounds in that State. This includes an expenditure of approximately £21,000 on the aerodrome at Western Junction, £16,000 at Cambridge, £4,000 at Currie, King Island, £3,500 at George Town, and £3,000 at Wynyard. Air radio facilities and full lighting equipment for night flying have also been provided at the Western Junction and Cambridge aerodromes. The cost of these air services from their inauguration to the 30th June, 193S was: Subsidy, including payment for carriage of firstclass mail, £60,681 ; aerodromes, £51,000 ; and provision of radio aids to air navigation by arranging the installation of communication stations and radio beacons at Western Junction and Cambridge aerodromes, £32,000. In addition, during the last six financial years, an amount of £4,740 has been paid to the Tasmanian Aero Club as subsidy for flying instruction, and in respect of the issue and renewal of pilots licences.

Senator Keane:

– How has Tasmania managed to get all of this assistance?

Senator COOPER:

– It may be because the Prime Minister is a Tasmanian. But whatever may be the reason, I am merely giving these details in answer to Labour senators from Tasmania who say that this Government has never done anything for Tasmania. From the figures which I have just quoted, however, it would appear that it has been keeping Tasmania going for most of the time.

Senator Aylett:

– I said that this Government had done nothing for Tasmania to which that State was not justly entitled.

Senator COOPER:

– Tasmania has received much more from this Government. Under the Federal Aid Roads Agreement that State has received the following amounts during the last six years:- 1931-32, £90,607; 1932-33, £96,102; 1933-34, £110,384; 1934-35, £123,299 ; 1935-36, £138,945; and 1936-37, £151,977; total £711,314. Honorable senators will now have some idea of the source of the money which honorable senators opposite inform us the Premier of Tasmania, Mr. Ogilvie, is able to spend on new roads. However, I have never heard any honorable senator opposite, or Mr. Ogilvie, admit that this Government has made such large grants to Tasmania during the last six years

This Government has also treated Tasmania generously in respect of its shipping services. Probably before it was last amended the Navigation Act operated somewhat unfavorably against Tasmania’s tourist traffic. Subsequently, however, section 7 of that act was amended to permit British ships of not less than 10,000 tons gross, and a speed of not less than 14 knots, to carry passengers between ports in Australia not connected by rail, without being deemed to be engaged in the coasting trade. The act came into operation on the 1st October, 1935. The purpose of the amendment was torestore to Tasmania the services of the larger overseas lines by which a large tourist traffic had been built up before the coasting provisions took effect. The particular service which it was desired to restore was once known as the “ apple “ trip from Sydney toHobart, thence to Melbourne, during the apple export season. This service had, in fact, been in operation for some seasons prior to 1935, but it was dependent on exemptions being granted each year under section 286 of the Navigation Act. The amendment gave a measure of permanency to what had previously been a government concession, and a feeling of assurance to Tasmanians as to the future of their important tourist industry. In order to compare the passenger traffic to Tasmania in 1933 and 1934, the two years preceding the amendment of this legislation, with the traffic in 1936 and 1937, the two years subsequent to the amendment, I cite the following figures showing the number of passengers carried : - 1933, 39,096; 1934, 38,403; 1935, 42,063; 1936, 46,574; and 1937, 48,988. Further assistance given by this Government to Tasmania includes the following subsidies: - £6,000 in respect of a continuous passenger steamship service between Sydney and Hobart during the winter months; £2,000 per annum in respect of a weekly shipping service between Melbourne and King Island ; and a subsidy of £50,000 per annum, compared with £30,000 under the previous contract, in respect of the service provided by the Taroona between Tasmania and the mainland. I point out that all of this assistance was given to Tasmania by the present Commonwealth Government. Despite these facts, however, Opposition senators from Tasmania have made no acknowledgment of what this Government has done for their State. This information reveals, I believe, a readiness on the part of the Commonwealth Go vernment to do something for those States which suffer disabilities as the result of federal policy, and in the light of the figures which I have detailed honorable senators opposite will probably be more disposed to admit that fact. I was rather surprised, as I said in my opening remarks, to hear them say that this Government had failed to do fairly by Tasmania. Perhaps they were not aware of what it has done for that State during the last six years. In view of the stream of money which has flown into that State during the last six years, there can be no doubt that Tasmania should be happy and prosperous, and should be able to afford expenditure on such needs as roads and playing fields.

Senator Keane:

– What about sugar?

Senator COOPER:

– Whenever any honorable senator from Queensland refers to benefits given to other States he is bound to be met with that query. Queenslanders are proud of their sugar industry. However, although that State supplies the sugar requirements of the rest of Australia, it has an adverse trade balance with each of the other States.

SenatorMcBride. - That is not peculiar to Queensland.

Senator COOPER:

– That is beside the point. In its trade with each State, Queensland imports goods exceeding in value those it sells. Figures published in the QueenslandY ear-Book, 1937, show that in 1931-32, Queensland’s interstate export trade was valued at £11,331,751, whilst its import trade from other States was valued at £13,443,630.

SenatorMcBride. - Can the honorable senator give us the figures for the individual States?

SenatorCOOPER. - At the moment I can give the figures for only Western Australia and Victoria, but I have been in touch with the Queensland Statistician, who has informed me that although those figures were not published in the Queensland Year Book, he has them available. I shall supply them to the honorable senator when I receive them. In 1936-37 Queensland purchased from the other States goods valued at £20,541,000, but sold to the other States goods to the value of only £13,629,000. I might mention that sugar, beef and fruit, principally bananas, are the main products exported by Queensland; of course, sugar is the principal item included in the figures which I have given. In 1932, Queensland bought from Tasmania goods to tlie value of £422,000, whilst Tasmania bought from it only £29,000 worth of goods.

Senator MCBRIDE:

– Does the honorable senator say that Tasmania purchased goods to the value of only £29,000 from Queensland ?

Senator COOPER:

– That is right. In 1931-32, according to figures supplied to me ‘by the Queensland Government Statistician, Queensland bought goods from Tasmania to the value of £422,000.

Senator MCBRIDE:

– Obviously, the figures are wrong.

Senator Wilson:

– Are re-exports taken into account ?

Senator COOPER:

– I cannot say. However, if honorable senators are not satisfied with the detailed figures which [ have given, I shall withdraw them until J have had them checked; hut I shall stand by the total figures, which show that, in 1936-37, Queensland bought from the other States goods to the value of £20,541,000, and sold to those States goods to the value of £13,629,000. I shall supply the other figures in detail at a later stage. Most of the wages paid in the sugar industry are spent on goods manufactured in the southern States, so it is opportune to impress on honorable senators that, apart from straight-out grants from the Commonwealth to claimant States, the southern States derive substantial benefits from federation through various other channels. If honorable senators representing claimant States can advance sound arguments why they should have larger allocations, I am confident that their claims will receive careful consideration. They must remember, however, that many factors have to be taken into consideration. I have pleasure in supporting the bill.

Senator SHEEHAN:
Victoria

– I listened with interest to the speeches made this afternoon, and I am forced to the conclusion that the subject is not being discussed in the right spirit; there has been too much evidence of a desire to concentrate on State rights. I understand that the Commonwealth Grants

Commission was set up to investigate the claims of those States which believed that, owing to federation, their economic and financial conditions were not up to the standard enjoyed by more fortunate States. The convention debates disclosed early recognition of the difficult position that was likely to develop in the more sparsely-populated States, due to the fact that some of the States enjoying natural advantages had developed more rapidly, and to a greater degree, than others. In area, Western Australia is the largest State of the federation, but it is sparsely populated. Its difficulties in development should be recognized. Tasmania, on the other hand, is small in area, and much of it is not suitable for intense cultivation.

To some extent, the latter remark is applicable to South Austraia. The large eastern States have certain natural advantages. They have a better rainfall, and, generally speaking, superior country and more natural resources. Therefore, it ill behoves those who represent the more fortunate States to deny to the weaker States participation in the disbursement of Commonwealth revenues. This afternoon, one honorable senator spoke of the buoyant revenue of the Postal Department, and of other government instrumentalities. Surely we are not so parochial in outlook as to think that, because Commonwealth revenue is earned in the eastern States, the expenditure of it should be confined to those States, to the detriment of less fortunate States. If Australia is to become a great nation, assistance must be given to the weaker States. From time to time, various suggestions have been made to this end. Many people will recall the controversy over the “ Braddon blot “, under which three-fourths .of the net Commonwealth customs revenue was returned to the States. To-day we hear a claim for the reconstitution of the Inter-State Commission. In my opinion, the excellent report of the Commonwealth Grants Commission is a very definite answer to those who seek the revival of the Inter-State Commission. If any criticism can b© offered with regard to the work of the Commonwealth Grants Commission, it is on the ground that the assessing of State disabilities should not be a yearly affair. A thorough investigation should he made, and the procedure for future allocations clearly defined once and for all, so that claimant States would know what they are likely to receive and would be able to adjust their finances accordingly. Under the present system of providing for a yearly investigation of disabilities, claimant States are at a definite disadvantage. I hope that, as a result of the debate in this chamber and in the. House of Representatives, a permanent basis for the allocation of grants to States will be laid down in the very near future.

Senator FRASER:
Western Australia

– I agree with much that has been said by Senator Sheehan. Possibly the Commonwealth. Grants Commission, in making its recommendation, has not departed from its former practice, owing to the fact that its tenure is not secure; its term of office has been extended for brief periods from time to time, thus offering no inducement to investigate more deeply the subject of State disabilities. Had the commission been appointed for a definite term of years, I believe it would have undertaken more comprehensive investigations, and probably the report before us to-day would have been of a different character. I have not a parochial outlook, but I wish to correct misunderstandings which appear to have arisen in the minds of several honorable senators. Taxation is an important factor in the economic life of the people. I consider that Western Australia has played its part, both in regard to State and Commonwealth taxes. The commission gives its reasons for having recommended reductions of allocations to the claimant States. Tasmania is charged with having paid for unreproductive works out of loan funds. I agree that relief workers in all States are, in sonic cases, employed on work that is not productive; but we must remember that taxes must have relation to the ability of the people to pay. For the year 1936-37 Western Australia increased its taxes by 13s. 2d. a head, compared with an average increase for other States of 12s. 4d. a head.

Queensland is the lowest, as in that State the increase was only 6s. 5d.

Senator Allan MacDonald:

– Queensland taxes are higher than in any other State.

Senator FRASER:

– I am speaking of the increases of taxes in 1936-37. In Western Australia, the increase was 13s. 2d., other States 12s. 4d., and Queensland 6s. 5d. From 1933-34 to 1936-37 the wheat yield of Western Australia was : - 1933-34, 37,000,000 bushels; 1934- 35, 27,000,000 bushels; 1935-36 23,000,000 bushels; and’ 1936-37, 21,000,000 bushels. Between 1934-35 and 1936-37 the yield was reduced by 6,000,000 bushels, whereas the aggregate increase for the whole of Australia was 18,000,000 bushels. Although, as mentioned by Senator Cunningham, an additional amount of £44,000 was made available by the Commonwealth last year to assist drought-stricken farmers, the grant for this year is to be reduced by that amount. A few days ago, Senator Arthur, when speaking on another bill, referred to the difficulties under which Australian manufacturers operate, in that they have to compete with British manufacturers who are able to undertake mass production, and who also have an enormous home market. In the matter of secondary production, Western Australia is at a great disadvantage, in being compelled to import about £10,000,000 worth of goods annually from the eastern States, whilst its exports to thom are very small. The grants recommended by the commission should not be regarded as doles to the less populous States, and, as suggested by Senator Sheehan, a fixed amount should be provided over a number of years. Although Western Australia is a large and only partially developed State, tho postal revenue per capita compares favorably with that of the other States. The figures are:- New South Wales, £2.38; Victoria, £2.4.1; Queensland. £2.34; South Australia, £2.226; Western Australia, £2.34; and Tasmania, £1.S7. Some of the money derived in Western Australia from this source is being used for defence purposes in the eastern States Having regard to its area and population, Western Australia has done more than its share in the matter of postal revenue. Moreover, we have no semigovernmental instrumentalities, such as the boards of works in the eastern States, which are empowered to raise money without the authority of others, and in that way provide additional employment. I reiterate that unfortunately a good deal of dumping is still being practised by manufacturers in the eastern States, and while it continues it will be almost impossible to establish additional secondary industries inWestern Australia. The Government, having placed an embargo on the export of iron ore, should, apart from the grant recommended by the commission, make some concession to Western Australia, because, in protecting Australian iron ore resources, it has dealt a severe blow to that State.

Senator FOLL:
Minister for Repatriation · QUEENSLAND · NAT; UAP from 1931

– in reply - The discussion on this hill has given the representatives of the various States an opportunity to air their grievances. When I introduced the measure, I felt, as Senator Leckie suggested, like a Father Christmas bringing a bagful of toys for distribution; but after hearing the criticism directed against the Government, I realized that I had not brought the pleasure which I anticipated. I remind honorable senators that the people of Queensland, who are heavily taxed, and are making great sacrifices in order to carry on important developmental works with white labour under tropical conditions, never complain or ask for financial assistance. Several honorable senators have stressed the need for an alteration of the system under which these grants are made. Whilst the Government realizes that there would he a good deal of merit in establishing a system of fixed grants over a period of years, it also sees that there would be disadvantages associated with such a scheme. If permanent grants were made on the recommendation of the Commonwealth Grants Commission, or of an Inter-State Commission, the Government would not be aware of the immediate requirements of the claimant States, and they might not receive the assistance to which they were entitled. In these circum stances I do not think it desirable to discontinue the present system.

Senator COLLINGS:
QUEENSLAND · FLP; ALP from 1937

– Not permanent grants, but a permanent basis on which disabilities should be assessed.

Senator FOLL:
UAP

– Such a system is in operation at present. There is a permanent basis on which inquiries are made, but the grants vary.

Senator Wilson:

– They vary from year to year.

Senator FOLL:

– There has been little variation in the method of allocation. I know that Senator Wilson thinks that South Australia is penalized. After listening to his growling and grumbling I believe that had South Australia received twice the amount proposed to be paid this year he would still grumble.

Senator Wilson:

– That is unfair and personal.

Senator FOLL:

– It has been suggested, for instance, that sufficient expenditure on defence has not been incurred in South Australia. Senator Wilson said that the basis of defence expenditure is unfair.

Senator Wilson:

– I gave the Government’s published figures.

Senator FOLL:

– The honorable senator, who cited the difference between the expenditure on defence in South Australia and the expenditure in New South Wales, should remember that the head-quarters of the Department of the Navy are at Garden Island, in Sydney, and that most of the expenditure on the upkeep of the Navy is credited to New South Wales. If a new cruiser is purchased New South Wales is debited with the cost.

Sitting suspended from 6.15 to 8 p.m.

Senator FOLL:

– Senator Lamp drew attention to what he described as anomalies in the figures incorporated in the report of the Commonwealth Grants Commission. He compared certain figures in that report relating to population changes in Tasmania during the last seven years with figures contained in the report of the Commonwealth Statistician. The figures cited by the honorable senator are not comparable. The statistician’s figures relate to the changes which have taken place in the population of Tasmania as a whole, whilst those in the report of the Commonwealth Grants Commission refer only to net migration, and do not purport to snow the total increase or decrease of the population of that State.

The honorable senator also said that the commission had stated that the taxable capacity of Tasmania is higher than that of Queensland; in that connexion he quoted a statement by the Premier of Queensland, Mr. Forgan Smith. Obviously, the honorable senator has misread the commission’s report. If he will refer to page 75 of its fifth report, he will see that the index of the taxable capacity of Tasmania is 78, compared with 95 for Queensland. For the purpose of these comparisons the taxable capacity of all States is taken to be 100.

The honorable senator said that the commission regards as unnecessary expenditure the payment of decent wages and conditions to workers. He is entirely wrong in his interpretation of the commission’s remarks. Clearly, that body intended to indicate that, even allowing for the various factors which contributed largely to Tasmania’s increased expenditure, such as restoration of salaries and increased services, the increase of the personnel and of the total expenditure on salaries and wages are higher in Tasmania than in the other States. That, I think, effectively disposes of the honorable senator’s criticism.

Senator Wilson criticized strongly the practice of the commission in requiring what he termed a standard of effort on the part of the claimant States. He referred particularly to its effect on South Australia. The standard of effort is expressed by the commission in terms of a percentage of expenditure on social services solely as a matter of convenience. The honorable senator’s criticism arises from a lack of appreciation of the basic principles underlying the commission’s recommendation. The financial inferiority of the claimant States is the ground for Commonwealth grants. I emphasize that these grants are provided by the taxpayers of the other States, a fact which is sometimes overlooked by the claimant States. When we consider this factor it must be obvious that the States which receive the grants should do something to retrieve their financial position by their own efforts, and should not rely wholly on grants from the Commonwealth.

Senator McBride:

– Does the Minister suggest that their present position is due to their own lack of effort?

Senator FOLL:

– In many instances deficits are due to the manner in which the affairs of the States have been conducted. I say that without hesitation. If the honorable senator desires an illustration, I remind him that one of the reasons which led South Australia to seek aid from the Commonwealth Government was the lavish expenditure incurred by an imported railways commissioner in the reconstruction of the Adelaide railway station years before it was necessary.

Senator McBride:

– That is merely the Minister’s opinion.

Senator FOLL:

– There was also unnecessarily high expenditure on the State railways, which led to difficulties in succeeding years. I say, unhesitatingly, that some of the disabilities of the States are the result of the way in which their affairs have been conducted. Why should Victoria be required to bring South Australia’s social services to a standard higher than its own?

Senator Wilson:

– Does not the Minister believe in equality of opportunity?

Senator FOLL:

– I do, but I do not think that a claimant State should ask a non-claimant State to provide money which will bring the standard of social services in the claimant State above that of the State which will provide the money.

Senator Wilson:

– We do not ask for that.

Senator FOLL:

– The standard of social services allowed by the commission to South Australia was only a little below the average expenditure of all the States, New South Wales excepted.

Senator McBride:

– Why should it be below that of the other States?

Senator FOLL:

– The standard for South Australia is only slightly below the average of the standard States when family endowment is excluded from the New South Wales figures. Moreover, the standard allowed to South Australia is about 8s. a head higher than the actual expenditure in Victoria. It will thus be seen that no great hardship is inflicted on South Australia by the commission’s method.

Referring particularly to the percentage reduction of social services cited by the honorable senator, I point out that whilst the commission has laid down the principle that a claimant State should make an effort above the average to retrieve its financial position, it has not said that that effort should be restricted to savings on social services.

Senator Wilson:

– That is the inevitable result.

Senator FOLL:

– The report does not mean that a claimant State shall necessarily bring its social services to that level, but that its savings,’ in comparison with the normal standard of revenue and expenditure in all respects, should be equal to 10 per cent. of normal social services expenditure.

SenatorMcBride. - Why 10 per cent.? Obviously the Minister does not believe in equality.

Senator FOLL:

– It is open to the State to make the additional effort in any way that it pleases. The principle laid down by the commission was deliberately drawn in the broadest possible terms, so that the claimant States could explore the whole field of revenue and expenditure.

Senator Wilson further complained about the penalty imposed on South Australia in terms of taxation. I am sure that honorable senators do not desire me to explain at length the general principles adopted by the commission. Those principles are adequately set out in the reports of the commission, which I commend to the careful consideration of all honorable senators.

SenatorWilson. - . The commission says that South Australia must impose higher taxes.

Senator FOLL:

– The commission has drawn attention to the fact that the unfortunate financial position of at least two of the States is due to unwise expenditure of loan moneys in the past.

Senator McBride:

– Has the commission taken into consideration the expenditure of all the States?

Senator FOLL:

– It is true that all the States have erred in this connexion, but the commission, after careful investigation, has come to the conclusion that the degree of recklessness in connexion with capital expenditure is appreciably above the average in South Australia and Western Australia.

Senator Wilson:

– The commission did not examine Queensland.

Senator FOLL:

– Queensland is one of the States which pay these grants. The attitude of the commission is that a State whose errors in relation to loan expenditure are appreciably above the average of the other States may reasonably be required to submit to a heavier burden of taxation than would otherwise be expected of it, or, conversely, to curtail its expenditure on social services, or make equivalent economies in other directions.

Senator Wilson:

– South Australia did not go to the United States of America for money.

Senator FOLL:

– No ; it might not have got any money had it done so. The principle which I have just enunciated cannot be gainsaid. A State whose financial position is largely due to following an unwise policy in the past surely cannot be expected to pass on to other States the financial penalties directly attributable to such policy.

Senator Wilson:

– That is different from the outlook of the framers of the Constitution.

Senator FOLL:

– I desire to refer to the interesting calculation submitted by Senator Wilson, namely, that in order to enable South Australia to reduce its taxation to the average of Victoria and to maintain its social services at the same level as those of Victoria, it would be necessary for the Commonwealth to pay to South Australia £2,232,000 per annum.

Senator Wilson:

– Does not the Minister believe in equality of opportunity?

Senator FOLL:

– Generally speaking, South Australia has had equality of opportunity.

SenatorMcBride. - What does the Minister mean by “generally speaking”?

Senator FOLL:

– If Senator Wilson cared to do so, I imagine he could criticize severely past governments of South Australia for their misdeeds.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– South Australia was the first State to balance its budget.

Senator FOLL:

– That is so; the State is entitled to praise for that accomplishment. I give credit to the Hill Labour Government for implementing the Premiers plan, and thereby balancing its budget. Credit is due, also, to Mr. Butler, who, I hope, will soon he elected to the House of Representatives, where he will prove a valuable member of the Commonwealth Parliament. The commission has accepted the average of the three non-claimant States as the standard. That is the most equitable and, I suggest, the only satisfactory standard to adopt. The comparison made by Senator Wilson is not entirely fair. Surely it is not logical for a claimant .State to select only such items as are favorable to it! There must be relativity if justice is to be done all round.

Senator Wilson:

– Yes; but not relatively less 10 per cent. !

Senator FOLL:

– As the grants paid to the claimant States are contributed by the taxpayers of all the other States, it would be quite unfair to New South Wales and Queensland if, in assessing the grant to be made to South Australia, the commission were to adopt Victoria as the standard. I claim to have given a complete answer to the honorable senator’s criticism in this connexion.

Senator Wilson also objected to the statement in the commission’s report relating to the allocation to the various States of Commonwealth revenue and expenditure. He suggested that Treasury officers placed facts before the commission with a view to influencing that body to recommend lower grants to the claimant States. That was an entirely unfair conclusion. Apparently, the honorable senator is not aware that the statement to which he refers was not taken into account at all in the assessment of the amount of the grants recommended for the three claimant States. The basis of the commission’s recommendation is that grants shall be assessed on the financial needs of the claimant States as revealed by their budgets, in comparison with those of the non-claimant States, As the commission has decided to take into consideration the budgetary position of the States, the three claimant States would not gain any advantage by having grants made on a permanently fixed basis.

Senator McBride:

– We want a fixed principle.

Senator FOLL:

– Victoria, for instance, is suffering from one of the worst droughts it has experienced for many years; that distress must inevitably affect adversely the finances of that State for the current financial year. We know that a severe drought in the western portions of Queensland invariably affects the whole’ of the State’s finances, decreasing railway ‘ receipts, and revenue from direct taxes, whilst, in addition, relief has to be given to pastoralists in respect of land tax. Therefore, it is far better for the commission to assess the grants on the budgetary position of the States rather than on any other basis. Senator McBride suggested by interjection that Victoria is seeking assistance from the Commonwealth Government on account of losses arising from the present drought in that State. I remind him. however, that on a number of occasions similar claims for relief have been made by representatives of Queensland, not only in this chamber, but also in the House of Representatives, but have never been granted. Furthermore, Queensland pastoralists have not participated in any of the relief granted under our rural rehabilitation legislation, with the result that the government of that State has been obliged to carry those people through their difficulties without any assistance from the Commonwealth. As honorable senators are aware the basis of the commission’s recommendations is that the grants are assessed on the financial needs of the claimant States, as revealed in their budgets, in comparison with those of the non-claimant States. Allowances were made by the commission for quite a number of factors which affected the comparison, some of which have already been referred to. The statement of the allocation of Commonwealth revenue and expenditure over the States was, however, not taken into consideration, and no allowance was made in the assessment of the grants by reason of that allocation. During the course of the commission’s inquiry a great deal was said in relation to the vexed subject of disabilities suffered by the States as the result of federation, or the operation of federal policy. The commission has always pointed out that even if it were possible to measure accurately the disabilities, it would also be necessary to take into account the benefits which have been derived by the States fromthe effects of Commonwealth, finance, as indicated by the allocation of Commonwealth revenue and expenditure among the States, and the operation of federal policy generally. Senators Leckie and Cooper pointed out this afternoon that grants in respect of main roads are made on a basis of area and population, and not of population alone, with the result that the larger but less populous States receive an equitable share of this money. The allocation statement referred to by Senator Wilson was put forward not as a scientific calculation, but as a rough indication of the benefits derived by some of the States in particular, from Commonwealth expenditure, which would need to be considered if disabilities were taken into account. Senator Wilson referred to the distribution of defence expenditure. Although this expenditure may not be distributed evenly amongst all of the States, obviously all of the States actually benefit from the protection which is afforded to them by the operations of the Commonwealth’s defence policy. I mention this matter merely because reference has been made to it, hut the honorable senator’s criticism is really pointless because of the fact that the allocation statement has had no effect on the grants recommended.

SenatorMcBride. - That is beside the point.

Senator FOLL:

– Take the case of expenditure at the munitions factory at Maribyrnong.

SenatorMcBride. - Does not Victoria gain an advantage from that expenditure?

Senator FOLL:

– Yes, but the output of that factory will be used for the protection of Tasmania or South Australia just as much as for the protection of Victoria. Similarly, expenditure incurred in respect of the Navy is credited to New South Wales, but that expenditure is being incurred as much for the defence of the other States as for the defence of New South Wales.

Senator McBride:

– As it gives employment to workmen in New South Wales, is it not of special advantage to that State?

Senator FOLL:

– No; because ratings and officers are enlisted in the Navy from all of the States, and most of the money paid to those people is remitted to their families in every part of the Commonwealth. That expenditure, therefore, does not benefit New South Wales solely.

Senator Johnston spoke at some length on the disabilities suffered by the claimant States as the result of federation. I have already referred to this matter, and explained that if it had been possible to take into account the effect of disabilities, it would also be necessary to take into account the advantages which the claimant States have derived from federation. As I have already said, the commission has maintained that it is not possible accurately to measure the effect of these disabilities, but, at the same time, it has made an honest effort to ascertain whether there was anything in the claims of the States for a grant on the basis of net disabilities. During the course of its investigations consideration was given to certain figures supplied by an expert committee appointed by the Government of Western Australia as to the adverse effects of Commonwealth policy, and in considering those figures the commission made many liberal assumptions in favour of Western Australia. For example, it was assumed that the excess cost to the community in respect of the tariff would be the measure of the loss to the budget. The conclusions arrived at by the commission were -

  1. The major cause of the relatively inferior financial position of the claimant States is not to be found in federation or federal policy.
  2. At the present time grants based on needs adequately recognize the differential effects of federal policy and a good deal more besides.

The commission is satisfied that the present grants, based on financial needs, are considerably greater than they could possibly be if based on the grant of net disabilities alone. Senator Johnston also referred to advances of £44,000 and £136,000 to Western Australia as additions to the normal grants recommended for the years 1936-37 and 1937-38 respectively. The advance of £44,000 is adjusted in the grant recommended by the commission for the current financial year. The honorable senator objected to this special advance being charged up in this way, and maintained that Western Australia is the only State which is being dealt with in this manner. I suggest that he does not fully appreciate the reason for those advances because he entirely loses sight of the fact that they were not grants for those years, but were merely advances on account of the grants to bo made in subsequent years.

Senator Fraser:

– They were not grants at all.

Senator FOLL:

– They were advances made by the Commonwealth Treasurer on account of grants to be made in subsequent years, and they were accepted by the Government of Western Australia in the full knowledge that, although they were special advances in respect of drought relief, they would be debited against subsequent grants to Western Australia. In view of the fact that the Commonwealth Government made those advances at the request of the Government of Western” Australia, in order to tide it over a difficult period, it ill-becomes au honorable senator from that State, in possession of all of the facts, to say that the Commonwealth should not recoup itself of those advances.

The PRESIDENT (Senator the Hon. J. B. Hayes). - The honorable senator has exhausted his time.

Question resolved in the affirmative.

Bill read a second time and reported from committee without amendment or debate; report adopted.

page 1509

SEAMEN’S COMPENSATION BILL 193S

Second Reading

Debate resumed from the 20th October (vide page 970), on motion by Senator Allan MacDonald -

That the bill be now read a second time.

Senator COLLINGS:
Queensland

– It is a pleasure to be called upon to consider a measure in which I believe there will be general agreement. Certainly it is a change to get away from the earlier proceedings of to-day, during which the unhappy state of affairs existing in the Government and reflected in the attitude of Government supporters in this chamber one towards another. We of the Opposition welcome the measure. We believe, however, that it could be made a better bill. Having this end in view we have circulated amendments which will be dealt with in the committee stage. The bill is essentially one for committee.

We on this side are a little surprised that this Government, which we know so well, should have brought down a measure to liberalize conditions under which a large section of the community has to work. Indeed, I was so puzzled that I looked for an explanation. As I read the bill I discovered it. I found that the benefits to be derived will not be paid for by the Government but by the employers involved. This is the explanation for the unusual spectacle of a bill proposing to give a measure of justice to a section of workers, being brought clown by this Government. The Opposition will hasten the passage of the measure and hopes that the amendments circulated will be received by Government supporters in the same spirit as that in which the bill itself was conceived.

Debate (on motion by Senator Dein) adjourned.

page 1509

ESTIMATES AND BUDGET PAPERS 1938-39

Debate resumed from the 12th October (vide page 621), on motion by Senator A. J. McLachlan -

That the papers be printed.

Question resolved in the affirmative.

page 1509

INTERNATIONAL RELATIONS

Paper

Debate resumed from the 31st May, 1938 (vide page 1542), on motion by Senator A. J. McLachlan -

That the paper be printed.

Senator LECKIE:
Victoria

.- This subject has been on the notice-paper for months, and owing to the changes that have occurred in overseas affairs in the meantime no good purpose would be served by my continuing the discussion.

Question resolved in the affirmative.

page 1510

QUESTION

INTERNATIONAL LABOUR ORGANIZATION

t wen ty-third conferen ce- reports of Australian Delegation.

Debate resumed from the 7th December, 1937 (vide page 243), on motion by Senator A. J.McLachlan -

That the paper be printed.

Senator COLLINGS:
Queensland

– I hope I shall not be considered out of order or impertinent if I take this opportunity to object very definitely to the way in which business has been conducted in the Senate to-day. I understand the difficulties under which the newly-appointed Leader of the Senate is working, but they are not sufficient excuse for the fact that the Government apparently has no business to present, and in order to conceal that state of affairs from an interested publu - particularly interested just now - it has offered for discussion items that have been on the Senate business-paper for months. Apparently, Senate Ministers expect the Opposition to be able to continue the discussion of any business at a moment’s notice.

SenatorMcLeay. - The honorable senator may ask leave to continue his remarks to-morrow if he wishes the debate to be adjourned.

Senator COLLINGS:

– No ; I am prepared to continue the debate on this motion, but I object to the Opposition being made the victim of government indecision in the House of Representatives.

The motion for the printing of this paper was last before the Senate on the 7th December, 1937. I am glad to have an opportunity to deal with it, because since this report was presented there has been a further meeting at Geneva, and certain gentlemen returning to Australia from that conference have endeavoured to discount the value of the International Labour Organization. That Organization is about the only thing of any value left of the League of Nations. It would be a pity if we failed to continue our support of that body, and if we discontinued sending delegates to the annual conference, because it brings our people - both government delegates and repre sentatives of the workers - into contact with the delegates from other nations represented in the International Labour Organization. Also it gives them an opportunity to extend their knowledge of the operation of the organization and leads to the adoption of a much wider outlook than otherwise would be possible. Honorable senators who have read the report will admit that there is a very great deal of value in it. Mr. Scholfield, a member of the House of Representatives was the Government delegate. His report is certainly informative, but, naturally, I am more interested in the report of Mr. J. E. Pullan, the Australian workers delegate, because he refers to a number of things which appeal more to the Opposition than do items dealt with in the report of the Government delegate. Mr. Pullan makes some general observations which, I think, are worth emphasizing. He states -

The main impression which stands out in my mind as a result of my experience at Geneva is the development of the world movement for social progress, of which the International Labour Office is the centre. It seems to me that Australia is not pulling her full weight in this movement.

The Opposition also is of that opinion. Australia has been contributing very handsomely and justifiably to the upkeep of the League of Nations. This country has been a party to all that has been done by the League of Nations, and by the International Labour Organization. I submit that Australia is entitled to a greater measure of representation at the meetings of the International Labour Organization, and that the Government should exhibit some willingness to ratify the conventions of that body. I shall have more to say on this subject later in this session. Mr. Pullan is right when he says that Australia is not pulling its weight in connexion with the work of this organization. On page 14 of his report, he states -

As is said in the constitution of the International Labour Organization - “ The failure of any nation to adopt humane conditions of labour is an obstacle in the way of other nations which desire to improve conditions in their own countries”. All Australians should be able to agree with this statement of the difficulties caused in international competition by the existence of inferior labour standards.

That is something which we should take to heart. I appeal particularly to the supporters of the Government to do so because I know that it is quite unnecessary to make such an appeal tohonorable senators on this side of the chamber. We can see the disadvantage to Australia because if other countries’ standards are inferior to ours, the task of further raising our standards becomes more difficult. There was a time when we could truthfully boast that Australian standards were in advance of those in any part of the world, but I say, with deep regret, that that day has long since passed. Our standards to-day arc not the best in the world, but in some instances, are definitely inferior to those in other countries.

Senator MCBRIDE:

– Iu which countries?

Senator COLLINGS:

– I know that Senator McBride would like to make my speech, as he attempted to make the speech of the Minister for Repatriation (“Senator Foll), when replying to the debate on the States Grants Bill. Although a newcomer to this chamber, he is not new to this Parliament, and should know the rules of debate. He should realize by now that he is not entitled to make my speech. Mr. Pullan continued -

A part of the constitution of the International Labour Office is this:

I particularly direct the attention of honorable senators to the words which follow : -

Universal nonce eni l«- established only if it is based on social justice.

Although the Commonwealth is expending £50,000,000 next year or the following year to provide guns, forts and defence equipment in various parts of Australia, if our social order be not based upon social justice there can be no peace. He goes on -

The extremist doctrines of all kinds which exist tn-day-

I direct the attention of Senator McBride particularly to those words, because in his opinion most of us who sit opposite to him are dangerous extremists - have their origins in the popular distress existing in the countries which develop them.

Wherever there are rebels, dangerous extremists, or an Opposition such as this, concerning which the Government is fearful, there is likely to be a change. This Government is wondering where it stands, and what support it can receive from the slender majority under which it is conducting the business of this chamber. As I study the faces of the honorable senators opposite, I am reminded of a change that has recently taken place in this chamber. I was hoping that in advocating measures of social reform we would be able to claim the support of Senator Dein. We believed that in such circumstances he would cross the floor, and give to us his support, but as Government Whip he now occupies a seat on the front treasury bench, and I am afraid that we cannot now expect his support on even the most harmless measure of social reform. The point I wish to stress in this report continues - lt is useless to expect leal ponce us long as there, are millions throughout the world suffering from unemployment, under-nourishment, etc.

I do not know what is meant by “ etc.”, but had t the right I could amplify it very forcefully. On the subject of nourishment I am very much amused. Nutrition councils have been set up in the various States. The Government, we are informed, is now engaged upon a national fitness campaign. Some have said that too many children are being born under conditions which can mean only ill health and no possibility of their ever reaching a decent physical standard. What has been the results of the investigations made in Australia? What recommendations have been submitted ? If honor a bie senators will obtain the reports of the investigating authorities they will find that it is stated that malnutrition is due to improper feeding, the misunderstanding of food values, and the work of incompetent cooks. I do not agree with such contentions. Malnutrition is due to economic poverty; to the anxiety of mothers before a child is born, and to the worries of fathers who do not know where their next job will be. Malnutrition is also due to children being reared in slums and hovels, and to insufficient feeding which brings them to the verge of starvation. All the sophistry in the reports we receive will get us nowhere. Until we study the basic cause we cannot expect to progress. The people are awakening to the actual position, with the result that the strength of the Opposition, at least in this chamber, is increasing. It will eventually increase to such an extent that the Government will be overthrown, largely because it is prepared to perpetuate the social injustices to which I have referred. The report of our delegate to the International Labour Organization states that while these injustices prevail, universal peace is impossible. The report continues -

The individual who is haunted by the fear of personal insecurity is an easy prey for warmongers, and, after all, the population of any country is made up of individuals, Discontented individuals make discontented nations, and the existence of discontented nations is a menace to the peace of the world.

I think that I can hear some honorable senators opposite laughing, but Icannot envy the complacency of any honorable senator who can laugh while I am quoting remarks which to me at any Tate are serious. The report continues -

Modern statesmanship, like charity, must begin at home.

We have heard of Canute, who, standing on the seashore commanded the waves to go back, but the vanity of Canute was not greater than the optimism of those Government supporters who expect the Lyons Ministry to rise to the heights of modern statesmanship. The report continues -

The individual citizen, in his own home life, must be given a sense of personal security, he must be rid of the nagging fear of uncertainty of the future for himself and his family, he must feel sure that in a society sufficiently equipped with goods and services to guarantee him a decent existence, he will not find himself suddenly reduced to penury.

I do not suppose that honorable senators opposite have studied the report of the Australian workers’ delegate. I can imagine them reading the remarks of the Government’s representative and in a self-complacent way saying: “That’s that.” I do not believe that they have studied intelligently the report from which I am quoting. It continues -

This is the idea expressed in what is called “social security,” and it is because I believe it to be a matter of both national and international importance that I have dealt with it at some length in this report. I hope I have made it clear that when Ispeak of security, I mean security for every one, security for the employer through the maintenance of his best market which is the mass of the people, security for the worker through the maintenance of his employment and of his social standards, and security for the professional classes of all kinds, since they can only prosper if prosperity be general in the community. I, therefore, commend this social aspect of national security to the Government and the people of Australia as a matter of national policy and a basis for national prosperity. At the same time 1 also realize that, for the reasons which I have given in my report, social progress in Australia needs to be backed up by similar progress in other countries, and Australia must therefore enter wholeheartedly into the international campaign for social progress.

I regard the ideal of social justice as being well fitted to guide the policy of Australia both nationally and internationally. If we can only succeed in removing that spectre of fear of the future which to-day haunts the lives of millions of people in this and other countries, who can foretell the beneficial effects on the industrial relations between employer and employed, and on the general relations between individuals and between countries.

Mr. Pullan, like any intelligent member of the Opposition, does not merely criticize existing conditions; he concludes with constructive recommendations. They are submitted in this report in the hope that the Government will take some notice of them. I admit that he was an optimist. Nevertheless I emphasize his comments and particularly his recommendations. He said -

I summarize hereunder the recommendations arising out of my report: -

That Government representation at the conference consists of two delegates instead of one.

That all delegates be appointed in time to permit of adequate preparation for the conference.

That advisers be appointed to assist delegates.

That travelling expenses be the subject of a “ pooling “ arrangement, reducing the cost of representation for distant countries such as Australia.

That a permanent Australian office be established in Geneva.

That draft conventions and recommendations be submitted to Parliament for discussion and decision.

That never happens. We pay our contributions amounting to tens of thousands of pounds annually, but no action is taken in respect of the conventions adopted at Geneva. The position will be altered in the future because the Opposition does not intend to allow things to continue as in the past. Mr. Pullan’s recommendations continue -

  1. That Australia seek representation on the governing body of the International Labour Organization.
  2. That, in general, the International Labour Organization’s ideal of social progress be actively pursued by Australia as a national and as an international policy.

In commending those recommendations to the Minister in charge of the debate, I ask him to be good enough to bring before the Government my remarks as well.

I desire to call attention to some of the appendices to the report, particularly appendix F on page 28. Under the heading Part I.- “Timing of Public Works “ the following recommendations are made: -

There should be established a national coordinating body the duties of which should be, more particularly -

to centralize information relating to the various kinds of public works;

to ensure or encourage the preparation of works in advance;

to give instructions or advice as to when works should be held in reserve and when works held in reserve should be undertaken, account being taken of fluctuations in the volume of unemployment, changes in the index of wholesale prices, changes in the rate of interest and any changes in other idices which indicate an alteration in the economic situation.

That is not Mr. Pullan’s language; it is the decision arrived at by the International Labour Organization. For years the Labour party has been asking for this. A study of the market and financial reports in any Australian newspaper of repute will confirm what I said in this chamber months ago. The depression which I foretold has already come upon us, but when I predicted it, I was decried as an apostle of gloom. Now that the Government and its supporters are alive to the fact that another depression is upon us they have dropped the word “depression” from their vocabulary and substituted “recession “. For years the Opposition has urged the Government to exercise a little common sense and to devise a planned economy. The Government has not a plan for anything - not even for the business of the Senate, as events this evening have shown. I plead with the Government to decide on a plan so that we may know where we are.

Senator McBride:

– Not a Lang plan?

Senator COLLINGS:

– Australia will not have “Langs” unless there is cause for them. If people are starved and forced to live in slums ; if they are without security; if their children are suffering from malnutrition; extremists will arise. We may dodge them for a while, but I say in all earnestness that unless the programme be altered, something worse than the Lang plan will have to be faced. We are living in a fool’s paradise if we think that we can go on for ever without a plan. Every succeeding depression will inevitably bc worse than its predecessor. We shall not emerge from the depression into which we are now entering as easily as from the last depression. There is only one way to avoid further troubles, and that is to adopt the recommendations of the International Labour Organization. We must plan public works now, so that when seasonal occupations, which provide employment for the great bulk of the people of Australia, cease, there will be a volume of public works to take their place; and when private enterprise can no longer employ all the people who are employable, the Government will be able to fill the gap for six months until the workers can resume their old occupations. Unless that be done, national disaster more serious in its effects than the disaster from which we recently escaped, perhaps only temporarily, will come upon us. The recommendations continue -

Among the financial measures necessitated by the policy embodied in the present recommendation the following should receive special consideration : -

The placing to reserve in periods of prosperity of the resources necessary for carrying out works prepared for periods of depression;

the carrying forward of unexpended balances from one year to another.

In a country where, in a period of alleged prosperity there are,on the authority of Government supporters, 100,000 ablebodied men unable to obtain work, it is a disgrace to have an unexpended balance at the end of the financial year. When we get a sane system of finance - I am not now attempting to incite Senator Darcey - we shall realize that no cost is too great a price to pay for social security. Even the people who to-day oppose the financial policy of the Labour party, and sneer when we on this side predict a depression, will wake up to the fact that all that is worth while in life is in serious jeopardy because of the unstable nature of the social services of this country. For months the present Government has “ monkeyed “ about with a scheme of social service known as the national health and pensions insurance scheme. The Government is in such a muddle, because of the absence of a definite plan, that probably the next legislation to be dealt with in the Senate will be a bill to postpone the operations of that legislation. Knowing nothing of the basic causes of social injustice in this and other countries, the Government has no plan : it does not know the difference between effects and causes. Some day, because of the absence of a plan, we may experience difficulty in averting a revolution. Appendix F proceeds -

  1. Restricted borrowing by public authorities in periods of prosperity and accelerated repayment of loans previously contracted.

I think that every honorable senator knows that that is not the policy of the Labour party. The Opposition agrees with the Prime Minister of New Zealand, Mr. Savage, who said recently that his Government was not afraid of the productive capacity of New Zealand because there was practically no limit to its possibilities. He went on to say that the job of his Government was to secure to the people of New Zealand a more equitable distribution of the value of their production. We find the International Labour Organization laying down, practically in every branch of its operations, the same basic principles as this Opposition has been advocating ever since its advent to this chamber. Part III. of Appendix F of the report states -

Employment of certain classes of workers. - In applying the policy of timing provided for in this recommendation, consideration should be given to the possibility of including works which will give employment to special classes of workers such as young workers, women and non-manual workers.

I am proud to be able to say that Queensland has a smaller percentage of juveniles and women engaged in industry than has any of the other States. But we have emphasized over and over again that the lack of opportunity for youth is the outstanding tragedy of the last depression, and, unfortunately, still persists. There are still tens of thousands of hoys and girls leaving schools, colleges and universities every year for whom no work is available, and for whom there never will be the possibility of securing work until the National Government adopts a planned economy based on an industrial and economic survey.

Senator MCBRIDE:

– The honorable senator admits that this is the only Government that is likely to solve the problem.

Senator COLLINGS:

– I do not say anything of the sort. This Government cannot even get out of the muddle of its own creation. The appendix from which I am now quoting reads almost like a passage from the policy of the Labour party; but, whatever its source, I com mend it to the attention of this Government. It continues -

The rates of wages of workers on public works should not be less favorable than those commonly recognized by workers’ organizations and employers for work of the same character in the district where the work is carried out.

The Labour party believes in that principle. I do not know whether the Leader of the Senate had any idea of the contents of this report when he so hurriedly suggested that I should tackle this subject. I do not think he realized that it was “ loaded “ from cover to cover, and I can imagine that after I and my colleagues have finished debating this matter he will go away and put on sackcloth and ashes for having given us such an opportunity. We have been imploring this Government year after year to adopt the principles laid down in this report. Just before leaving Brisbane some months ago to attend this session, I took up the case of eight men who had been employed by the Commonwealth Works Branch on aerodrome work. There was no award to cover these men, and the departmental officers paid no regard whatever to the fact that the ruling rate of wages in the district for similar work should be observed. When these men started on the job, the departmental officers asked them a few rude questions as to wages and hours, and said to them, “ There is no award to cover you; but you can go on under the local authorities award. We will tell the ganger that you are working under that award for the time being.”

These nien worked on that job under those conditions, and when they finished they asked the departmental officer about holidays, claiming that they were entitled to pay in Heu of holidays under the local authorities award. The departmental officer concerned replied, “ What, holidays ! Not on your life.” The men pointed out that the award provided for payment in lieu of holidays at so much for every month of service, whereupon the departmental officer replied, “We were only working under that’ award as a general guide, but not for holidays.” I took the matter up with the Director of Works in Brisbane, and he also stated that holiday provisions did not apply - that the department was not working under that part of the award. I said, “ Surely you cannot pick and choose ! You tell the men that they are working under this award, but you pick out only that part of it which suits you “ ; he undertook to refer the matter to Canberra, and after some time, during which I can imagine how annoyed the officers at head office must have become, I had a win, the department deciding to pay these men in lieu of the holidays to which they were entitled. I shall repeat what this report says on this aspect of employment -

The rates of wages to workers on public works should not be less favorable than those commonly recognized by workers’ organizations and employers for work of the same character in the district where the work is carried out. 1 have given an instance in which officers of this Government, paid no regard whatever to that principle.

The International Labour Organization also recommended safety provisions in the building industry, embodying a model code of safety regulations adopted by the conference on the 23rd June of last year. Among other things, it said - finch member of the International Labour Organization should give the fullest effect possible, and desirable, under national conditions to the provisions of, or provisions equivalent to the provisions of. the annexed model code.

I suggest that honorable senators should study for themselves those other matters contained in this report to which I have not referred. It is a splendid report, mid I commend it to the consideration of every honorable senator. I ask the Leader of the Senate (Senator McLeay) to see that the suggestions which I have made, together with the suggestions contained in the appendices, and those of the International Labour Organization itself, are favorably considered by the Government. Particularly should the Government pay attention to the passage regarding the impossibility of avoiding war, and establishing universal peace until a new order is adopted which will guarantee to the people social justice.

Senator DARCEY:
Tasmania

– I was pleased to hear my leader make such a strong defence of the International Labour Organization. I have not read this particular report, but, as president of the League of Nations Union in Hobart for many years, I am familiar with the work of the International Labour Organization. It realizes that peace can be established only through improved social conditions. I recall that the International Labour Organization published a very complete report of the findings of the great McMillan Commission in London on unemployment. Most of the committee’s reports dealt with labour and employment, but it also investigated the problem of unemployment. It was the first commission to find that unemployment was not due to overproduction but to under-consumption, and it declared that more money would have to be found from some source without necessitating any increase of taxation, in order to provide work for the people and enable them to buy more of the products of industry. There is only one way to provide more purchasing power without increasing taxes, and that is by the payment of a dividend. That, I suggest, can be done. This report shows that the whole of the trouble in the world to-day is due to the unfair economic conditions under which millions of people are forced to live. History tells us that these unfair conditions are responsible for extremists. I recall that, when addressing a large meeting in Hobart. composed mostly of ministers of religion, I stated that 90 per cent, of the work of ministers of all religious denominations was wasted because of economic evils which could and should be rectified. I am glad to note that this report contains so many excellent recommendations, and I hope that tho Government will take notice of it and will endeavour to rectify existing social injustices, which are the main cause of all wars. Communism is born and bred in the slums as the result of the dreadful economic conditions which the present monetary system imposes on the people. Monetary reform is the most urgent matter confronting the world to-day. I sincerely trust that the Government will study this report carefully, and endeavour to implement its recommendations.

Senator KEANE:
Victoria

– I join with my leader in protesting against the Government’s action in springing this matter upon honorable senators. “We have had no opportunity to study the report, and I trust that in the future more time will be afforded honorable senators to prepare to debate matters of such great importance. I have been impressed by the suggestion that a committee of the Senate should be appointed to deal with external affairs. This report provides an excellent illustration of how useful such a committee would be. After all, the whole of the work of the Labour party is based on the working class doctrines expressed by the International Labour Organization, and all of the matters discussed in this report are of the greatest importance to Australia. “With Senator Darcey, I subscribe wholeheartedly to the ideals of this organization. I believe that it can give a lead to the workers of the world. The fact that this Government subscribes £60,000 a year towards the International Labour Organization should induce it to honour the conventions of the organization. The details of this report have been covered very fully by my leader, who emphasized the importance of the nations of the world meeting to discuss such matters as reduction of working hours, living standards, safety measures in industry, and the employment, of youths. All of these subjects are carefully provided for in the platform of the Labour movement in this country. This report should prove helpful to every honorable senator, and I hope that the Government will afford us an early opportunity to discuss matters arising out of it. If this subject were allowed to remain on the notice-paper for some months, honorable senators would have an opportunity to study the report. 1 believe that the most bitter anti-Labour man is often converted by reading a document of this kind, which expresses the considered views of world representatives of employers aud employees. In this report, their judgment is set out in simple English, and their recommendations, I suggest, should be carefully weighed in the interests of the people for whom we ure legislating. The Opposition hopes to take steps at an early date to convince this Government that a shorter working week is imperative. Eight or nine leading nations have been operating under a 40-hour week for many years. Any reduction of unemployment which has been brought about throughout the world is a direct result of a reduction of working hours in industry. That, however will be a matter for fuller discussion at an early date. I commend the Government for having presented this report. Despite the fact that conventions on certain subjects have not been honoured in Australia, I am still hopeful that economic pressure will convince even the strongest opponents of Labour’s platform that, our continued support of the International Labour Organization and the ratification of the convention regarding the shorter working week will be to the interest of the people generally.

Senator AMOUR (New South “Wales) [9.31J. - The report now before the Senate is a valuable document, but I am afraid that, like most reports of the International Labour Organization, after it has been discussed, it will be shelved and forgotten. I cannot hope that the recommendations will be given effect by the present Government. Mr. T. H. Scholfield, the Commonwealth Government delegate, states that the 40-hour working week for the textile industries was adopted by the conference. This is also mentioned by Mr. N. Temperly, the employers’ delegate, and by Mr. J. E. Pullan, the workers’ delegate. The Government should not send its delegate to the International Labour Organization with instructions to support a convention for a shorter working week and then, when he returns and reports accordingly, push him out of the Ministry.

This we know was done with a member of the House of Representatives who is now sitting on the back benches because he had the temerity to recommend the adoption of a convention for a shorter working week, which he had been instructed to support at Geneva. If we continue our contributions to the upkeep of the International Labour Organization, the reports made by our delegates should be adopted. I trust that the Government will use whatever influence it possesses to see that a 40-hour week is extended to our textile industries. Mr. Pull an also points to the difficulties under which Australian delegates work at these conferences owing to the absence of advisers. This is strikingly emphasized in the following table showing the representation of various countries : -

Mr. Pullan recommends that advisers should be appointed to assist Australian delegates to future conferences, also that the Government should send two delegates. I trust that the Ministry will take cognizance of the report by its delegate, Mr. Scholfield, also the report by the workers’ representative, Mr. Pullan. and the employers’ representative, Mr. Norman Temperly. If this be done, it will be a step in the right direction - the introduction of a 40-hour week in industry. A shorter working week is of vital importance, and must be adopted sooner or later. Evolution is inevitable and with it will come a reduction of working hours. Already in many industries a 40-hour week is in operation. “Whilst the Commonwealth Government is prattling of a 40-hour week there will, no doubt, be a further reduction in other countries and when 40 hours is generally adopted in Australia, industries in some other countries may be working only 20 hours. Mr. Pull an stresses that, if Australia is to have economic security and peace, the health of the people must be ensured, and malnutrition, which is so evident throughout the Commonwealth to-day, must be eliminated. The workers must be guaranteed continuity of employment so that they may have a sufficiency of good food, clothing and shelter for themselves and their families*. Furthermore, they must be relieved of the ever-present fear of eviction from their homes. To-day, thousands of children are suffering from malnutrition, the effects of which they will carry with them throughout their lives. As a matter of fact, malnutrition is merely another word for starvation.

Senator McBride:

– That is not so.

Senator AMOUR:

– The honorable senator treated this matter lightly when the Leader of the Opposition’ (Senator Collings) was discussing it earlier this evening. I am certain he would not care to change places with some of the unemployed in this country. I know the conditions under which they are living. Medical officers of the Department of Health in New South “Wales ignored certificates given by doctors to people suffering from malnutrition in order that they might obtain special food under the relief scheme in operation in that State. These unfortunates were to be given a sufficiency of milk, eggs and vegetables; but the certificates were rejected by officers of the Health Department, who said that some doctors would be prepared to give the unemployed anything. Later, the system was changed, and a number of women were appointed as inspectors in the Health Department. Although these appointments were political, it is gratifying to know that persons suffering from malnutrition are now receiving the special foodstuffs prescribed for them. But no amount of good feeding can completely eliminate the effects of serious malnutrition during childhood. In the press to-day, we are told of the number of recruits who were rejected from naval services On the ground of physical unfitness. It is a saddening thought that young men who are prepared to offer their services in the defence of this country should be rejected because earlier governments of the same political complexion as the present Ministry, did nothing to allevate unemployment. I well remember the . Australian High Commissioner, Mr. Bruce, then Prime Minister, saying that the unemployed would have to get used to unemployment, and that they could take up their belts a couple of notches. As we have seen, one result is that hundreds of applicants are now being rejected for naval and military service because of their poor physical condition, brought about by malnutrition.

A few years ago, there was an outcry against the Lang plan, the adoption of which would have greatly facilitated the introduction of a shorter” working week. Unfortunately, the people of New South Wales were gulled into the belief that the plan was a sinister scheme which would destroy them. The Lang plan involved a reduction of the interest payable to overseas bondholders, until such time as the finances of the nation improved. Mr. Lang also urged that Australia should go off the gold standard. Instead of adopting that course the Government urged the people to tune in to Great Britain and keep on the gold standard. Then came an election in England. During the campaign, Mr. Baldwin, the Prime Minister, told the people that departure from the gold standard would mean ruin; but eighteen days later, the British Government, still led by Mr. Baldwin, went off gold. There has been a reduction of interest payments to bondholders overseas. Although the supporters of the Government in this Parliament could not see the advantages of the financial plan advocated by Mr. Lang, a. similar plan was adopted in the United States of America and in other countries.

Senator Abbott:

– Mr. Lang was responsible for the Government Savings Bank in New South Wales, in which £60,000,000 of the people’s money had been placed, closing its doors.

Senator AMOUR:

– That statement is typical of the honorable senator. If he studied the position more closely he would realize that his statement is inaccurate. That bank was closed, not because of the policy of Mr. Lang, hut as a result of propaganda such as would close, not only that bank, but every other bank in the Commonwealth.

The PRESIDENT:

– Order! The honorable senator must confine his remarks to the motion before the Senate.

Senator AMOUR:

– The recommendations of the Australian delegates to the International Labour Conference have an important bearing on the financial policy adopted by this Government, which is largely responsible for the unfortunate economic position in which thousands of Australians are placed. The action of those whose propaganda closed the Government Saving Bank of New South Wales forced many people to sacrifice their deposits to money lenders and others for amounts much below their actual value.

Senator Dein:

– Why did not the State Government prevent that?

Senator AMOUR:

– It has been authoritatively stated that Mr. O’Malley Wood, the manager of the Government Savings Bank of New South Wales, wrote to a person named Holmes, who was a candidate for a south coast seat in the State Parliament, asking him to desist from propaganda against the hank, and Holmes replied that he had been instructed by Mr. Stevens to say that the bank would close. The late Sir Robert Gibson broadcast an appeal to the depositors to stop the run on the bank, because it would not be closed. A royal commission appointed to investigate the matter reported that the closing of the bank was due to statements by irresponsible politicians.

Senator Cameron:

– Which politicians?

Senator AMOUR:

– Bavin, Stevens, Dein and others. Mr. Lang, who was Premier of New South Wales in 1931. will go down in history as the greatest statesman in Australia, if not in the world. Had the Premiers plan, sponsored by Sir Otto Niemeyer, not been adopted, the economic position of Australia would be infinitely better than it is to-day, and there would be no need for Australia’s representatives at the International Labour Conference to speak of malnutrition amongst the Australian people. Every newspaper in Australia is suggesting that there should be a change of government, but the position will not be improved until something isdone to alleviate the disgraceful conditions under which many of the people are compelled to live. If the Treasurer was correctly reported when he said that in matters of defence the Government can “write its own ticket “, a progressive works policy should be undertaken, and work providedfor many who are now unemployed. 1 trust that when the Australian delegates to the International Labour Conference report next year they will be able to say that the Australian Government has at last adopted a policy under which unemployment, malnutrition and poverty will be reduced to a minimum.

Debate (on motion by Senator Cameron) adjourned.

page 1519

PAPERS

The following papers were presented : -

Arbitration (Public Service) Act - Determination by the Arbitrator, &c. - No. 23 of 1938 - Professional Officers’ Association, Commonwealth Public Service.

Commonwealth Public Service Act - Appointments - Department of -

Commerce - W. B. Dwyer.

Treasury - J. F. Nimmo.

Regulations amended - Statutory Rules 1938, No. 105.

Judiciary Act - Rule of Court- (Dated27th October, 1938.

Post and Telegraph Act - Regulations amended - Statutory Rules 1938, No. 100.

Sugar Agreement - Seventh Annual Report of the Fruit Industry Sugar Concession Committee, year ended 31st August, 1938.

Tariff Board - Reports and Recommendations -

Blades for Hand Hack Saws.

Brasswork, Bronzework and Gunmetal Work.

Toilet Paper.

Naval Defence Act - Regulations amended -

Statutory Rules 1938, No. 107.

Australian Wool Board - Second Annual Report for year 1937-38.

Dried Fruits Export Control Act - Fourteenth Annual Report, for year 1937-38. together with Statement by the Minister for Commerce regarding the operation of the Act.

Lands Acquisition Act - Land acquired at Hobart, Tasmania - For Health purposes.

Wine Overseas Marketing Act - Regulations amended - Statutory Rules 1938, No. 106.

Nationality Act - Regulations amendedStatutory Rules 1938, No. 103.

Senate adjourned at 9.54 p.m.

Cite as: Australia, Senate, Debates, 16 November 1938, viewed 22 October 2017, <http://historichansard.net/senate/1938/19381116_senate_15_157/>.

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