House of Representatives
3 April 1930

12th Parliament · 1st Session

  1. House of Representatives
  2. 12th Parliament
  3. 1930

Mr. Speaker (Hon. Norman Makin) took the chair at 2.30 p.m., and offered prayers.

page 814

QUESTION

DECENNIAL CENSUS

Mr LATHAM:
KOOYONG, VICTORIA

– I ask the Prime Minister whether there is any foundation for the report that the Government proposes not to take the ordinary decennial census in 1931? If so, has consideration been given to the probable effect of the consequent disturbance of the basis of statistical comparisons as between different periods in Australia’s history and as between Australia and other countries?

Mr SCULLIN:
Minister for External Affairs · YARRA, VICTORIA · ALP

– In view of the financial position, the Government is considering whether the taking of the census, at an estimated cost of about £350,000 should be postponed. No decision has yet been reached. The probable effects of a postponement are being considered. If the Government is satisfied that no serious effects will follow, the taking of the census may be postponed for two years.

page 814

EXCISE TARIFF

Fortified Wines

Mr M CAMERON:

– The Canberra Times of this morning reports that a deputation of wine-makers waited upon the Prime Minister yesterday. It goes on to say -

The members of the deputation made a special request to be allowed to remove the fortified wine now in bond at the old rate of duty. In reply to this request Mr. Scullin pointed out to those present that, although they were large manufacturers of wine, the; did not export any wine, and that, therefore, they were not compelled to pay the price for grapes fixed by the department. Upon their undertaking to pay to the growers during the coming season the fixed price for grapes, Mr. Scullin intimated that the Government would agree that they could remove the wine at present in bond at the old rate of duty.

I ask the Prime Minister- whether the members of the deputation agreed to take all the grapes which the growers may offer?

Mr SCULLIN:
ALP

– The report which the honorable member has quoted is correct. Messrs. F. Penfold Hyland, C. Seppelt, and H. Cramp waited upon me yesterday to discuss the increase of excise duty on fortifying spirit. I informed them that the Government proposes to adhere to the increase of excise duty in order that a higher bounty may be paid to exporters of fortified wine. The members of the deputation then asked if fortified wine in bond might be removed without payment of the inoreased duty. They explained that prior to the new duty being imposed sales of wine had been effected although no contracts had been signed, and that if the wine-makers had to pay the increase of duty in respect of wine so sold, they would suffer undue hardship. In reply, I pointed out that although the members of the deputation represented the largest wine-makers in Australia, they were not exporters, and., therefore, were not bound to pay to the growers a fixed price for their grapes; unless they were prepared to do that, the Government could not grant them the relief for which they asked. After some discussion, they gave an undertaking that for this season they would pay for grapes the price fixedby the department if they were permitted to remove, at the old rate of duty, all fortified wine that was in bond on the 13th March. I then asked what quantity of grapes they would take from the growers at the fixed prices. They assured me that they would take the normal quantity, or at any rate, not less than they took last year. As this undertaking gives more security to the growers, I accepted it, and agreed that the old rate of duty should apply to fortified wine in bond on the 13th March.

page 814

QUESTION

ANGLO-EGYPTIAN TREATY

Mr D CAMERON:

– In connexion with the meetings at present being held in London to consider a proposed AngloEgyptian Treaty, will the Prime Minister assure the House that ample steps are being taken to safeguard Australia’s interests!

Mr SCULLIN:
ALP

– The Commonwealth Government is being kept closely informed of the negotiations, in regard to which I hope to be able to make a statement later.

page 815

TIMBER DUTIES

Mr. ARCHDALE PARKHILL.Yesterday, the Acting Minister for Trade and Customs stated that representatives of the various timber interests were conferring with a view to submitting to the Government a scheme for the increase of timber duties. Will the Minister explain why Sydney firms, representing the largest Australian interests in timber, are not represented at the conference?

Mr FORDE:
Assistant Minister assisting the Minister for Customs · CAPRICORNIA, QUEENSLAND · ALP

– The conference was not convened by me. The secretary of the Hardwood Sawmillers Association of New South Wales, the secretary of the Hardwood Sawmillers Association of Victoria, representing the sawmillers of that State and Tasmania, representatives of timber merchants and importing companies from Melbourne, and the secretary of the Timber Workers Union of New South Wales are conferring in Sydney in regard to the future of the timber industry. They have already had an interview with me. If any other timber interests care to be represented, they will receive the same sympathetic hearing as is being given to the gentlemen I have mentioned.

page 815

QUESTION

CINEMATOGRAPH FILMS

Customs Duty. - Censorship

Mr MARKS:
WENTWORTH, NEW SOUTH WALES

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

What was the amount of customs duty on cinematograph films received under (a) intermediate tariff) and (6) general tariff, for -

The year 1926-27, and the period 1st July, 1927, to 24th April, 1928, when the respective duties were Id. and lid. per lineal foot?

The period 25th April, 1928, to 14th June, 1928, when the respective duties were Id. and 2d. per lineal foot?

The period 15th June, 1928, to 21st November, 1929, when the respective duties were Id. and lid. per lineal foot; and

The period 22nd November, 1929, to the latest date, when the respective duties were 2£d. and 3d. per lineal foot?

Mr FORDE:
ALP

– The information is being obtained.

Mr LATHAM:

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

  1. How many films were rejected by the Film Censorship Board during the twelve months ended 31st December last?
  2. How many films so rejected have been approved by the Appeal Board for exhibition ?
Mr FORDE:

– The answers to the honorable member’3 questions are: -

  1. One hundred.
  2. Twenty-three. An additional eight films were passed after re-construction.

page 815

QUESTION

AUSTRALIAN-CANADIAN TRADE

Mr PRICE:
BOOTHBY, SOUTH AUSTRALIA

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

  1. Is he in a position to state whether there has been any appreciable increase in Empire trade between Canada and Australia since the Government subsidized steamship freight service between parts of British Columbia and Australia ?
  2. If so, what has been the increase in imports and exports respectively?
Mr FORDE:
ALP

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

  1. According to press reports, the amount of the subsidy is approximately £18,500 per annum, payable in respect of a steamship freight service between British Columbia and Australia. Inquiries have been made as to whether the subsidy would result in reduced freights on timber imported from British Columbia to the detriment of the Australian timber industry. It was found that such result was quite unlikely. From the information available it appears that the payment of a subsidy of the amount mentioned is not likely to cause an immediate appreciable increase in the Australian-Canadian trade.
  2. See reply to 1.

page 815

QUESTION

BANK DEPOSITS AND ADVANCES

Mr GREGORY:
SWAN, WESTERN AUSTRALIA

asked the Treasurer, upon notice -

  1. What was the amount of deposits in the associated banks in Western Australia on the 31st December, 1929?
  2. What was the amount of the advances made by these banks in Western Australia as at the 31st December, 1929?
  3. What was the amount of deposits in the Commonwealth Bank in Western Australia, including deposits in the Commonwealth Savings bank in that State on the 31st December, 1929 ?
  4. What was the amount of advances made by the Commonwealth Bank at the same date?
Mr THEODORE:
Treasurer · DALLEY, NEW SOUTH WALES · ALP

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

  1. £10,483,500.
  2. £20,832,999.
  3. £5,202,452.
  4. £5,608,228.

The answers to questions 1 and 2 have been obtained from the published quarterly averages of the trading banks, while the answers to questions 3 and4 have been furnished by the Commonwealth Bank.

page 816

QUESTION

OLIVE OIL IMPORTS

Mr PRICE:

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

  1. What was thequantityand value of olive oil imported into the Commonwealth for each of the yearsended 30th June, 1928, and 30th June, 1929?
  2. From what countries was olive oil imported during those years?

Mr.FORDE.- The answers to the honorable member’s questions are as follow : -

  1. 1927-28 - 191,243 gallons - value £77.555: 1928-29 - 196,622 gallons - value £66,948. The ahove figures refer to the imports of olive oil inbulk; separate records of the imports of olive oil in small containers are not available.
  2. 1927-28 - United Kingdom, Canada, China, Egypt, France. Greece, Italy. Spain, Syria and the United States of America: 1928-29 - United Kingdom, Egypt, France, Greece, Italy, Spain, Syria and the United States of America..

page 816

QUESTION

COTTON YARNS

Mr CROUCH:
CORANGAMITE, VICTORIA

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

  1. Is it a fact that, when the customs duty on cotton yarns was recently raised, a promise was made by the Australian firms representing yarns that they would not raise their prices to the spinners?
  2. Are there only two firms manufacturing these yarns in Australia; if so, what are their names ? 3.Are these manufacturing firms able to supply the Australian demand of the spinners in quantity and at the price existing before the increase in customs duty?

  3. Is the Austral Silk and Cotton Mills one of these firms, and does it work its own spinning branch, in addition to supplying other spinners?

    1. Has evidence been produced to the Minister that this company is taking advantage of the tariff to charge higher prices to the spinners?
  4. Is it a fact that this company is asking 2s.10d. a lb. for one month’s worsted count, when the previous charge was 2s.1d. ?
  5. Is it a fact that this increased charge will, instead of increasing employment, closedown the spinning mills; if so, what remedy does he propose?
Mr FORDE:
ALP

– The information is being obtained.

page 816

QUESTION

EXPROPRIATED PROPERTIES

Mr LEWIS:
CORIO, VICTORIA

asked the Prime Minister, upon notice -

In view of the scathing comments of the Auditor-General in his report dealing with the release of German property in New Guinea (paragraph 45, page 32), disclosing the fact that only £10,121 8s. 5d. out of £22,000 passed into the hands of the lawful recipients, and which he later refers to as blackmail, will the Prime Minister order an investigation into the circumstances surrounding the release of the properties of the ex-planters Schwarz and Schmidt, to report on -

To whom the sum of £22,000 was paid ;

To whom power of attorneywas granted to negotiate for the release of this property, and to receive payment;

Whether one or more of these persons were previously in the employ of the Government;

Why the property was not released on the occasion of the first application ;

Why it was released on the occasion of the second application, when other than the former owners were interested in the granting of the application and the sharing of the proceeds ;

Whether the officers who rejected the first application were identical with the officers who heard and granted the second application ?

Mr SCULLIN:
ALP

– The whole matter is now being investigated.

page 816

QUESTION

IMPORTATION OF COAL

Mr LAZZARINI:
WERRIWA, NEW SOUTH WALES

asked the Prime Minister, upon notice -

  1. Whether it is a. fact that the Metropolitan Gas Company of Melbourne has imported £750,000 worth of coal from England, representing a loss to the company of £250,000?
  2. If so, will he, in view of Australia’s grave financial position occasioned by adverse trade balances, impose an immediate embargo on the importation of coal into Australia?
Mr SCULLIN:
ALP

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

  1. I have seen a report attributing toa responsible official of the company a statement to the effect quoted by the honorable member.
  2. In dealing with the existing financial situation, the Government will take into consideration the position of the coal industry in common with that of other industries in Australia.

page 816

QUESTION

BRITISH PREFERENTIAL TARIFF

Mr LEWIS:

asked the Prime Minister, upon notice -

  1. Will he cause inquiries to be made into the truth of the allegation made in the Natal

Mercury, that certain towns in England had refused to display Empire marketing posters, urging the buying of Empire products, as a measure of retaliation against Australia because of the recent increase in customs duties upon goods imported from abroad, including importations from Great Britain?

  1. What is the value of imports from Great Britain to Australia?
  2. What is the value of exports from Australia to Great Britain?
  3. To what extent does Australia grant a preference to imports of British origin?
  4. To what extent is preference given by Great Britain to Australian products?
  5. What is the monetary value of the preference given by Australia to imports of British origin?
  6. What is the value of Australian products exported to Great Britain?
  7. Is the protection of the British Navy contingent upon throwing our market open to unrestricted exploitation by British manufacturers?
  8. Is it an interference with the selfgoverning rights of the Commonwealth to suggest that we cannot protect and encourage industries in this country without rendering ourselves subject to the withdrawal of the protection of the British Navy? 10.Is our present tariff as advantageous and beneficial to Great Britain as it is to Australia?
Mr SCULLIN:
ALP

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

  1. Yes. 2 to 7. The information is being obtained.
  2. No.
  3. See answer to No. 8. It is not considered that any question of interference with the selfgoverning rights of the Commonwealth has arisen.
  4. The tariff legislation of the Government has been designed primarily in the interests of Australia, with due regard, at the same time, for the interests of other portions of the Empire.

page 817

QUESTION

PRIVY COUNCIL JUDGMENT

Mr CROUCH:

asked the AttorneyGeneral, upon notice -

  1. Has his attention been called to a debate in the House of Lords.Hansard, volume 70, page 810, in which it was admitted by two justices, Lord Haldane and Lord Dunedin, that they had signed a judgment of Lord Cave, the only other justice, without reading same, and that this judgment became a decision of the Privy Council?
  2. Was it admitted by these two justices that the judgment referred to was erroneous, and should not be permitted to stand?
  3. Has this judgment seriously affected the constitutional rights of a dominion, and reversed a decision of its final court?
  4. Will he give early consideration to the repeal, under . section 74 of the Constitution, of the existing powers of appeal to the Privy Council ?
Mr BRENNAN:
Attorney-General · BATMAN, VICTORIA · ALP

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

  1. I have, since the honorable member drew my attention to it, perused the debate arising out of the decision of the Privy Council in the case of Wigg v. Attorney-General of Irish Free State (1927 A.C.674). I have been unable tofind in the debate any admission by the justices concerned that they signed a judgment of the Privy Council without reading it.
  2. It was admitted by the two justices named that the judgment contained an erroneous statement of fact which would probably affect the correctness of the amount awarded.
  3. The judgment reversed the decision of the Supreme. Court of the Irish Free State,but I am not aware that it has affected the constitutional rights of any dominion.
  4. The circumstances referred to do not appear to call for the action suggested.

page 817

QUESTION

CRUDE OILS AND PETROL

Mr LEWIS:

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

With a view to providing employment in Australia for a number of workless people, will consideration be given to the following: -

The refining of crude oils in Australia for use in internal combustion engines, suchas those which use petrol and benzine?

An increased duty upon refined motor spirit imported into the Commonwealth?

The admission, free of duty, of crude petroleum, or the granting of a rebate of duty on all motor spirit refined in Australia ?

Mr FORDE:
ALP

– The answers to the honorable member’s questionsare as follow : -

  1. The refining of crude petroleum is already being carried out in Australia by two companies.
  2. No request has been made for an increase in duty.
  3. Crude petroleum is already free of duty.

page 817

QUESTION

RETRENCHMENT IN DEFENCE FORCES

Mr LONG:
LANG, NEW SOUTH WALES

asked the Minister for Defence, upon notice -

  1. Is it a fact that there is to be a retrenchment in the Defence Forces?
  2. If so, what will be the method of reduction; will it be voluntary with compensation, or will a certain number be selected for discharge?
  3. Will there be any compensation; if so on what basis?
  4. If there is to be a reduction, when is it likely to take place?
  5. How many soldiers and civilians, respectively, are to be discharged?
Mr A GREEN:
through Mr. Beasley

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

  1. Yes.
  2. to 5. Investigations to determine what reductions will be necessary and the manner in which they can be best effected is in progress, but is not sufficiently advanced to enablea reply to bo given to this part of the honorable member’s question.

page 818

QUESTION

WHISKY IMPORTS

Mr LEWIS:

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

  1. Whether the quantity of whisky imported to Australia for the financial year 1928-29 was equivalent to9,000,000 bottles; if not, what was the actual amount imported?
  2. In view of the suggestion contained in the Auditor-General’s report regarding the necessity for reducing expenditure on luxuries, and of reducing our adverse overseas trade balance, will consideration be given to a proposal to prohibit the importation ofspirits, wines, ale, and beer?
Mr FORDE:
ALP

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

  1. The quantity of whisky imported during 1928-29 was 1,024,807 proof gallons.
  2. The matter will receive consideration.

page 818

QUESTION

TARIFF TREATY WITH CANADA

Mr FORDE:
ALP

– On the 2nd April, the honorable member for Kennedy (Mr. Riordan) asked the following questions, upon notice -

  1. When was the existing tariff treaty with Canada signed?
  2. What are the principal items affected?
  3. What are the annual imports from and exports to Canada?
  4. What is the value of the tariff preference given by Canada to Australia, and the value of the preference given by Australia to Canada ?
  5. Is it a fact that Canada recently imposed a higher duty on Australian butter, and, if so, what steps have boon taken by the Government to remove this anomaly, in view of the generous measure of preference given by Australia to Canadian production?

I am now able to furnish the honorable member with the following information : -

  1. The arrangement with Canada was brought into effect by independent action by the Parliament of each country, and was not actually a tariff treaty. It has been operative as from 1st October, 1925.
  2. Canadian goods entering Australia. - Newsprint, motor chassis, vehicle parts, preserved fish, gloves, tubes, pipes, &c. Australian goods entering Canada. - Currants and raisins, preserved meats, sugar, preserved fruits, butter.
  3. Imports from Canada for 1928-29, £4,871,643. Exports to Canada for 1928-29, £813,992.
  4. The value of the rebates of duty resulting from these mutual tariff preferences in 1928-29 was - To Canada, £340,530; to Australia, £139,831.
  5. No. Soon after the preference arrangements were completed the Canadian Government imposed a dumping duty on Australian butter, but such dumping duty has not been operative for a considerable time past - the full preferential margin of 3 cents per lb. being still granted by Canada.

page 818

QUESTION

ROYAL AUSTRALIAN NAVY

Week-end Leave.

Mr A GREEN:
through Mr. Beasley

– On the 21st March the honorable member for Wentworth (Mr. Marks) asked the following questions, upon notice : -

  1. Is it a fact that the privilege of week-end leave in the Royal Australian Navy is restricted to Sydney?
  2. Will consideration be given to the question of granting to ratings the privilege of week-end leave irrespective of whether they are natives of a particular place or not?
  3. Whether arrangements could be made whereby Saturday night leave at Melbourne could, at least, be extended as a general routine, to permit ratings returning by the first train from Flinders-street, in view of there being no tram service on Sunday mornings ?

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

  1. No. Week-end leave in large cities other than Sydney is granted to natives of the city..
  2. Yes.
  3. This will be arranged.

page 818

PAPERS

The f ollowing papers were presented : -

Norfolk Island - Report for year ended 30th June, 1929.

Meteorology Act -Regulations Amended - Statutory Rules 1930, No. 21.

Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinance of 1930 - No. 3 - Recovery of Lands.

page 818

LAND TAX ASSESSMENT BILL

Bill brought up by Mr. Theodore and read a first time.

page 819

CUSTOMS TARIFF (No. 2.)

In Committee of Ways and Means:

Mr FORDE:
Acting Minister for Trade and Customs · Capricornia · ALP

– I move -

That, in addition to the Duties of Customs collected in accordance with the Schedule to the *Customs Tariff* 1921-1928, as proposed to be amended by the Tariff Proposals, and as amended by the *Customs Tariff* 1930, there be imposed, on and after the fourth day of April One thousand nine hundred and thirty, at nine o'clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, a special duty of Customs, at the rate of fifty per centum of the amount of duty calculated in accordance with the duties imposed by the *Customs Tariff* 1921-1928 as proposed to be amended by the Tariff Proposals and as amended by the *Customs Tariff* 1930 on such of the goods included in the items specified in the first column of the Schedule hereto as are specified in the second column of that Schedule and are entered for home consumption after the third day of April One thousand nine hundred and thirty and were exported from the country of export after the said third day of April : That in this resolution " Tariff Proposals " shall mean the Tariff Proposals introducedinto the House of Representatives on the twenty-first day of November and the eleventh day of December One thousand nine hundred and twenty-nine, and shall include any amendment of those proposals : and That, excepting by mutual agreement or until after six months' notice has been given to the Government of the Dominion of New Zealand, nothing in this resolution shall affect any goods the produce or manufacture of the Dominion of New Zealand entering the Commonwealth of Australia from the Dominion of New Zealand.

As this schedule has been introducedas a national emergency measure, and has nothing whatever to do with the ordinary fiscal policy of the Government, I shall not at this stage discuss it, but the Prime Minister will make an important statement in respect to it.

Mr SCULLIN:
Prime Minister · Yarra · ALP

– It is usual for the Minister for Customs to take charge of tariff matters in this chamber; but this is not an ordinary tariff schedule. The Government, is now taking extraordinary action as an emergency measure. The items in this schedule have been very carefully selected by the Government, after con sultation with the officers of the Trade and Customs Department, and the chairman of the Tariff Board. Consultations have also taken place between a subcommittee of the Cabinet and the whole of the members of the Tariff Board. The schedule is only part of the proposals which the Government intends to present to Parliament to deal with the situation which is facing the country. To-morrow morning a proclamation will appear in a special issue of the Government Gazette, which willpace a prohibition, or an embargo, upon the importation of certain goods into Australia. Included in that list will be some items which may be admitted with the special permission of the Minister on a ration basis. Other items will be totally prohibited except under special conditions. 1 wish to place before honorable members some of the reasons which have caused the Government to introduce this schedule, and I invite them to discuss these frankly and fully. The subject is one which should bc faced by us as Australians, and not as members of differing political parties. This Government has been five months in office. It has not allowed the finances to drift, nor has it rushed headlong into the application of remedies for the serious position which confronts the nation. On assuming office, Ministers were faced with a deficit of £5,000,000; a loan of £10,000,000 had to be converted in March; and on the financial horizon was a £60,000,000 loan maturing in December of this year. Moreover, the situation on the London money market was most difficult.

We first faced the Australian position. The Treasurer and the Loan Council, after a long discussion, decided upon a method of meeting the conversion loan, and I am happy to say that the £10,000,000 required has been over subscribed. Moreover, the conversion of the December loan has. been so far advanced that, allowing for sinking fund purchases and conversion applications in sight, only about £20,000,000 of it will remain to be converted. The Australian position has therefore, considerably eased.

The overseas position is still very difficult. I think not one honorable member will disagree with me when I say that the first consideration of this Parliament should be the placing of Australia’s credit on the London market on a sound basis. There must be no possibility of suggesting that Ave are entering into obligations which we cannot meet. Australia has maintained throughout her history a reputation for honoring her obligations, and we must see to it that her house is put in order, no matter what sacrifice that may require. Honorable members will surely agree with that statement, though they may not agree with the method we propose to adopt to rectify our position. I assure the committee that the Government has given long consideration to the various methods that might be adopted to achieve the end in view. We have consulted with those who are in a position to speak with some authority on economic and financial questions. The result of our consideration and consultation is in part the step that we are now taking.

The difficult position in London has not arisen suddenly; it is a growth of many years. It is true that a sudden drop in the value and volume of our exports has precipitated the crisis, but it has not created it. A long series of adverse trade balances made inevitable the position in which we now find ourselves. Since assuming office, the Government has watched very closely the movements of the money market in the hope that the position might improve. Although I have always been strongly opposed to the policy of going upon the London, or any other overseas money market for largo loans, I realize that when that lias been, done during a long while, it is impossible suddenly to stop doing it without some serious consequences. The position that wo have to face is the sudden cutting off of our opportunities for borrowing in London.

The suggestion has been made, which should not have been made, that something which has happened in Australia in recent months has caused this slump. Whatever we may say in regard to our own internal management of Australian affairs, we should not say anything that is likely to interfere with the credit of Australia overseas. When a change of government occurred last year, it was suggested that that affected our credit; in fact, one honorable member of this House has already publicly said that everything was going well until the Labour Government came into office.

Mr White:

– There is a good deal in that.

Mr SCULLIN:

– I suggest that that is not the spirit in which we should approach this subject. Such statements have not the slightest foundation in fact, and put us in an absolutely false position. As a matter of fact, Australia’s credit on the London market, has been rapidly restored because of the assurances that this Government has given and the action that it has taken. The result of our efforts to meet the situation has been such as to show that there is still confidence in the Government of Australia.

By comparison with South Africa and New Zealand, Australia has for very many years been in a bad position in relation to the value of stocks. The stocks of South Africa and New Zealand have commanded better prices for a long time than Australian stocks. In the last four years there has been a steady decline in the value of Australian stocks compared with those df the other dominions that I have mentioned. In 1926 Australian stocks were from 20s. to £3 below the price of South African and New Zealand stocks; in 1927 they were from 20s. to £4 below; in 192S, 30s. to £5 below; and in 1929, £3 to £8 below. This year they dropped to as much as £12 below the value of South African and New Zealand stocks. At present they are £8 below, which is a little over £4 per £100 better than a month ago. Still the position is not satisfactory. I recall circulars that were issued by a well-known firm of stockbrokers in London in 1926 in which the whole System of Australian credit was challenged, and I remember that the then Prime Minister (Mr. Bruce) had to go to considerable pains to explain the financial position of the Commonwealth so as to counteract the effect of that criticism. To some extent the right honorable gentleman furnished an effective answer to the charges then made. We cannot, however, ignore the fact that this criticism is being indulged in, and although most pf it is wholly unjustified, it has had an effect upon the financial status of the Commonwealth in Great Britain.

The causes of our troubles have for long been recognized by many students of finance in this country, but unfortunately the circumstances were not faced as they should have been when our difficulties began. I do not wish to strike a personal note and say that I foresaw what was happening, because I was not alone.’ Warnings were issued by many people, and they should have been heeded by governments and financial institutions. Unfortunately, those warnings passed unheeded to a certain extent. In 1927, as Acting Leader of the Opposition,

I drew an analogy between the circumstances then existing and the position of Australia just before the banking crisis in the early nineties. I emphasized that what was occurring in 1927 had its analogy in the progress of events leading up to the bank crisis of 1892. I instanced that from 1882 to 1891 the imports into Australia exceeded exports in the proportion of £100 to £79, and that during the period mentioned the public debt had more than doubled. That was known as the boom period. Then came the crash which was the cause of so much privation throughout Australia. Other members of this House in 1927 endorsed my warning, and urged that no country could year after year import more than it was exporting and remain solvent, unless that country was a creditor nation. Those who joined issue with us argued that Great Britain had for many years been importing largely in excess of her exports, and was still in a sound position. They omitted to mention that Great Britain was a creditor nation, and that her excess of imports included large earnings by way of interest upon capital invested abroad. Australia, as I pointed out then, was in an entirely different position. To meet interest charges .on Commonwealth and State debts we had to export commodities to the value from £25,000,000 to £27,000,000 in excess of imports. Every debtor nation, to be solvent, should show an excess of exports over imports. Those of us who took a serious view of the position of the Commonwealth predicted that a crisis would be upon us when there was a fall in the value and volume of our exportable surplus. Unhappily that has happened. It is of no use to mince matters.

Australia will meet her obligations no matter what the cost to her people. We -have come to the conclusion that in order to do this we must go short of many imported commodities. For the last six years and seven months the imports into Australia have exceeded exports by £63,500,000. This calculation, I should add, includes exports of specie and bullion. If we exclude the value of specie and bullion exported, and take count only of merchandise imported and commodities exported, our adverse trade balance for the period mentioned was £91,900,000. This is an appalling figure. If to this £63,500,000 by which our imports exceeded exports, we add interest and cost of services abroad for the same period, £213,300,000, we have a total of £276,800,000 to meet. How did we attempt to meet it? Our net borrowings for that period - I wish it to be clearly understood that I am speaking of the increase of Commonwealth and State indebtedness - were £162,700,000, and our dividends from Bawra amounted to £9,200,000, making a total of £171,900,000, which leaves a shortage of £104,900,000.

Mr Latham:

– The borrowings referred to by the Prime Minister means borrowings by the Commonwealth and the States.

Mr SCULLIN:

– That is so. I do not wish to misrepresent the position in any particular. There is, as I have said, a shortage in our national accounts of £104,900,000 for the period mentioned. It is true that there may have been some invisible imports and exports, but even if we could examine them accurately T doubt that Ave could get much comfort from them. The shortage of £104,900,000 has been partly met by credits that had accumulated overseas, because prior to the period to which I have directed attention, we had favorable trade balances in certain years. In 1919-20 our exports exceeded imports by £50,000,000, and in another year our favorable trade balance was £25,000,000, so that considerable credits had been established in London prior to the six year period. These credits helped the Commonwealth along its down- ward path. At the present time Ave have to face a very serious shortage. During the years mentioned Ave endeavoured to correct our adverse trade balance by overseas borrowing, but the only effect of this policy was to bolster up an unsound and unsafe financial position. When neophytes in political economy talk about the adverse influence of the Labour Government on the financial position of the Commonwealth they are talking about something which they do not understand, or wilfully misrepresent. For years the average borrowings of the Commonwealth and the States overseas has ‘totalled £30,000,000, not one penny of which is available to-day, and this year there has been a decline of approximately £40,000,000 in the value of our exportable surplus. This seriously affected our ability to meet our obligations abroad. No one can suggest that any government is responsible for the decline in the value and volume of our exports. And certainly the present Government is not responsible for the fact that the people overseas have grown tired of lending £30,000,000 a war to the people of Australia. I have made that brief historical review because it is necessary to know how Ave have got into the position in which we now find ourselves. A disease must be diagnosed before an attempt can be made to apply a remedy. I have given my diagnosis of the trouble for which we have to find a remedy; it does not require much expert knowledge to understand the cause of it.

Mr Prowse:

– What the honorable gentleman has stated is the effect, not the cause.

Mr SCULLIN:

– I have stated the cause, and I shall be grateful for any suggestion from the honorable member regarding a remedy; I say that in ali earnestness. At the earliest moment a full opportunity will be given to honorable members to discuss this problem. When, in 1927, 1 was Acting Leader of the Opposition, I invited the Government of the day to call Parliament together early in 1928, with the table sWept clear of all business of theirs, or ours, that we might meet as an economic convention, and seek to stop the drift that was then taking place. Now, as Prime Minister of the country, I extend the same invitation to honorable members.

The banks have been attempting to rectify the financial position. If they had begun, three or four years ago, to do even in a small degree what they are doing now, there would not have been the same sorry story to tell. -They cannot be blamed altogether, however. They are private institutions whose duty it is to carry on their business at a profit, and they cannot be expected to do the nation’s work as the Government should do it. They are attacking the problem now because they are seised of the seriousness of the position, and realize that the maintenance of our national credit is of first importance to them as well as to the nation. They are attempting to rectify the position by a drastic restriction of credit; but they have confessed that they cannot control credit altogether, and they have advised the Government that it should take action to restrict imports. The Government has already taken what action it can to encourage exports. My colleague will come forward to-morrow with a bill which we hope will encourage the producers of Australia to increase exports overseas. This problem has to be attacked from two angles: Exports must be increased, and imports must be restricted. The quickest remedy to apply is the restriction of imports, and the banks are doing much in that direction by restricting credits abroad. They are doing this, first, because they do not. possess sufficient credits overseas to meet, the demands on them, and, secondly, because they wish ‘ to conserve their credits abroad for the purchase of the things most needed here. But the banking institutions cannot be expected, nor have they the right to go item by item through the list of imports and say, “You may get credit for this, and you shall not get credit for that “. They can restrict credits only in a general way, not in a specific and scientific manner. If any one can apply restrictions in such a. way, surely it is our own government departments, which have skilled and trained men to guide them. The banks not only cannot deal in this detailed way with credit restriction, but are not in a position effectively to control credits as fully as is desired. They have been circumvented in many ways by those who can command large suras of money in Australia. When persons or firms with surplus cash in Australia are refused facilities by the banks for importing goods, they find other avenues, and they are displaying remarkable ingenuity in doing so. The course ordinarily adopted is to purchase exportable goods in Australia, ship them overseas, sell them abroad, and use the credits thus obtained to pay for such goods as they wish to import. They buy up parcels of wool and wheat in Australia, and by selling them abroad provide themselves with credits in spite of anything the banks may attempt to do. Only the Government can prevent that sort of thing. Other importers are going even further than that. It came to my notice recently that a company has floated on the New York market a loan of £1,000,000 for the purpose of providing credit in New York on mortgaged Australian property. Those with mortgages on Australian properties are paying off the mortgages, shipping the deeds overseas’, and getting mortgages in New York, and in some cases in London, to finance imports into this country. The banks cannot control that, and it cannot be controlled by anything short of Government action.

How can the Government control imports? We propose to do it in four ways. First, we propose the absolute prohibition of a selected list of import items ; that list will bc available to honorable members in the morning. The second proposal is to impose a partial prohibition, that is, a prohibition order with power to ration. Under this heading it is proposed to ration up to 50 per cent, of last year’s imports. The third proposal has to do with goods that do not lend themselves to rationing, because of administrative difficulties.. ‘ On goods included in that list we shall impose heavy surcharge duties. That list was tabled in the House to-day.

Dr EARLE Page:

– Is there any discrimination in that list between goods from various countries? .

Mr SCULLIN:

– There is a 50 per cent, surcharge on existing duties.

Dr EARLE Page:

– But there is no other discrimination?

Mr SCULLIN:

– No, there is no other discrimination ; whatever preference Britain enjoys she will continue to enjoy in the same proportion. Our purpose is to restrict- imports, and Britain will retain the same or gain a larger relative preference than she now has. For example, if there is a 40 per cent, duty on a foreign article, and 20 per cent, on a similar article imported from Britain, a 50 per cent, surcharge will make the duty on the foreign article 60 per cent., and that, on the British article 30 per cent.

Mr Gullett:

– Nevertheless, it will amount to a prohibitive duty on British goods. I am not objecting to that; I am merely pointing it out.

Mr SCULLIN:

– In many cases it will” not ; but we do expect it to have the effect of severely restricting imports of certain items from any country. The Government stands for preference to Britain under our tariff, but the British people cannot have it both ways. They cannot on the one hand tell Australia to put its house in order by getting back to the sound economic system of paying for imports with exports, and refusing us loan money because we are not doing it, and then, when we set out to do this, find fault with us for doing it. The fourth proposal of the Government for the restriction of imports is a combination of rationing, plus a surcharge duty.

Dr Earle Page:

– “What does the right honorable member mean by that, exactly?

Mr SCULLIN:

– We propose to restrict importation of articles on this list to 50 per cent, of last year’s imports, and, in addition, to impose a surcharge of 50 per cent, on such articles as are imported.

Dr Earle Page:

– Under the Government’s second proposal such goods as are permitted to enter will come in under the old duty?

Mr SCULLIN:

– Yes. Only 50 per cent, of last year’s imports will be admitted, but they will come in at the old rate of duty. Some goods will be prohibited altogether, and others will be allowed, in under special circumstances. Under the fourth proposal a list of articles has been selected which we can do without to a large extent. If importers insist upon bringing in goods upon which heavier duties are to be imposed, they will be contributing to the revenue of the country. When honorable members refer to the list they will see that the items have been specially selected and carefully arranged. Although the Government does, not claim that the list is perfect, considerable industry has been applied in its preparation. If it can be shown that it involves injustice or hardship, or that our proposals in connexion with any items are unsound, we shall be quite willing to listen to representations, and will, if practicable, modify or amplify the proposals embodied in the schedule that has been tabled or in the proclamation to be issued to-morrow. Goods included in the prohibited list are those which can be made in Australia in sufficient quantities to meet our requirements or those which there is no need to import.

The partially prohibited or rationed articles include those which the Government considers should be reduced in quantity by one-half. The articles on which a surcharge is to be made include those which the Government considers it would be difficult to ration beciau.se of administration, difficulties.

Mr Bayley:

– Is a surcharge to be levied on all rationed articles?

Mr SCULLIN:

– On some of the rationed articles there will be a surcharge, others will be rationed without a surcharge, and the importation of others will be totally prohibited. There are certain goods the importation of whic’h can be prohibited, and others, the importation of which can be most satisfactorily regulated by Customs duties. Based on previous importations the value of the goods to be totally prohibited will be £4,250,000 and of those to be excluded by rationing, £1,500,000, making a total of £5,750,000. The value of the goods upon which a surcharge will be be made is estimated at - £13,500,000, so that the total value of the goods affected will, therefore, be £19,250,000. The Government does not anticipate that the imposition of a surcharge will prevent the importation of all goods which are now dutiable, but it is estimated that these proposals will have the immediate effect of restricting per annum the shipment to Australia of goods valued at from £10,000,000 to £13,000,000.

Mr Archdale Parkhill:

– How will these proposals affect goods already on the water?

Mr SCULLIN:

– They will not apply to goods at present in bond or on the water. It would be obviously unfair to place an embargo of this description upon goods which have already reached Australia or are in transit. The Acting Minister for Trade and Customs (Mr. Forde) will, by regulation or proclamation, exempt such goods on production of the necessary evidence. These proposals will apply only to goods shipped on or after the fourth day of April.

Mr Hughes:

– I suppose “ on the water “ means, actually cleared at the port of lading.

Mr SCULLIN:

– Not necessarily.I suggest, however, that we need not go into details at this juncture. The Government will deal absolutely fairly with exporters who have goods in transit, and every case will be treated on its merits.

Mr Gullett:

– What will be the position of those who have entered into contracts ?

Mr SCULLIN:

– We cannot recognize contracts; they can perhaps be cancelled on the other side. Goods shipped at the time of the issue of the proclamation will not be affected.

Mr E Riley:

– Contracts will not be recognized.

Mr SCULLIN:

– Contracts already entered into could be suspended. These proposals will not affect importation from New Zealand, Papua, or New Guinea, nor, as I have already said, goods in transit to the port of shipment, on the water, or in bond.

Dr Earle Page:

– Does the 50 per cent. increase apply to goods on the water ?

Mr SCULLIN:

– The surcharge will not apply to goods shipped or in bond. These proposals are submitted in an attempt to restrict the importation of goods and are not intended to increase revenue. They are deliberately designed with the purpose of restricting shipment of goods from overseas, with the exception of the countries I have mentioned, and in the hope of rectifying our present adverse trade balance. These proposals are not in any way associated with the Government’s protective policy, although in selecting the items it recognizes that its policy will have a beneficial effect on Australian industries which are manufacturing the commodities concerned. If Australian production is to develop, the overhead charges of Australian manufacturers must decrease. The Government proposes to ask a number of manufacturers whether in consequence of the assistance they will be receiving, they cannot reduce their costs. I am taking the House entirely into the confidence of the Government in this matter. As certain items included in the list are manufactured in Australia, there should be no need to import them. I refer in the first place to certain classes of agricultural machinery of which several hundreds of thousands of pounds’ worth are imported despite the fact that similar machinery manufactured in Australia is equal to the world’s best. When confronted with the necessity of reducing imports of this class of machinery, the Government gave the matter its closest attention; but before agreeing to its inclusion in the prohibited list, I personally took up the matter with four leading Australian manufacturers.

Mr E Riley:

– Will the Prime Minister give their names?

Mr SCULLIN:

– I shall do so in a moment. I did not give any indication of what was in the mind of the Government. I approached Hugh V. McKay, David Shearer & Sons, Mitchell & Co., and Robinson & Co., Limited, who manufacture at least 80 per cent., if not more, of Australia’s requirements of agricultural implements. I asked them what they would be prepared to do if the Australian market were reserved for Australian manufacturers, and they immediately said that they would guarantee that there would be no increase in price. J replied that I wanted more than that, and I have since received a written statement guaranteeing that they will supply all of Australia’s requirements at a reduction of 5 per cent. on their list prices. We have, therefore, included in the list of prohibitions certain articles which we are satisfied can be, and are, being made in Australia.

Mr Gregory:

– Will the manufacturers give an undertaking to supply all the States at the same price ?

Mr SCULLIN:

– The Government has not lost sight of the needsof the distant State of Western Australia, and if it is satisfied that the Australian manufacturers cannot live up to what is expected of them, and that they are not giving the farmers at least as good a deal as they were able to get from other sources of supply, the Minister has power to lift the prohibition and admit imports to any one place.

Mr Gregory:

– To any one State ?

Mr SCULLIN:

– The Minister can permit the importation of any one article to meet the situation in any one State. I understand that one or two firms only are importing implements required by farmers.

Mr Gregory:

– It is the freight from Eastern Australia that hurts us in Western Australia.

Mr SCULLIN:

– I am going further into that aspect of the question, because it is remarkable that the Western Australian farmer is paying per machine more than the Victorian farmer pays for imported reapers and binders. That is a matter which needs investigation, and which will be investigated by the Government. But we are determined that machinery shall be no dearer than it is to-day, and that the guaranteed 5 per cent, reduction contained in the written statement of the manufacturers shall be carried out.

Dr Earle Page:

– When will that reduction apply?

Mr SCULLIN:

– Immediately this proposal is in operation, although the manufacturers claim that the effect of prohibition would not be felt until all material in bond, or on the water in transit to Australia, is cleared. Because of this they could not give a greater reduction. The o per cent., however, is an immediate reduction. I am hopeful of getting a further reduction if the prohibition continues, although I hope the necessity for prolonging this emergency measure may not continue, though some of its benefits may. One matter that I have taken up with these manufacturers is the cost of distribution. It is one of the largest items of overhead in the manufacture of machinery, and is brought about mainly, so I found, by the intense competition of the importer. If we remove that intense competition, I think we can legitimately ask the Australian manufacturer to organize his selling arrangements on better lines, and thereby permanently reduce the cost of the machinery he sells. That, however, is a matter for the future ; we have to deal with the present. The Government has been more than anxious to do nothing that is likely to interfere with its policy of increased production. If anything now proposed to be done should interfere with that, it would cancel any benefit likely to be derived. That was my justification for approaching the manufacturers of agricultural implements beforehand, so that I could secure their guarantee before including agricultural implements in the list of prohibited imports. Although, a 5 per cent, reduction may not seem very large, it represents a big cut to start with in the manufacturers’ returns and a very substantial gain to the farmers who buy machinery.

Mr Maxwell:

– Is it not evidence that the manufacturers have been asking too much for their machinery, if they can give this reduction immediately?

Mr SCULLIN:

– No. They will be put in a better position to organize their selling arrangements. The group of Australian manufacturers is small, but it suffers from intense competition by the importers. The imported article, in many cases, has been beaten out of the Australian market, but intense competition exists still, making it necessary for the Australian manufacturer “to maintain an army of sellers. Their number could be considerably reduced by proper organization, and particularly by shutting the importer completely out of the Australian market. Furthermore, the output of the Australian manufacturer could be increased with very little additional increase in overhead costs. These are the factors that will enable the local manufacturers to make this reduction, and this very valuable contribution to the Government’s policy of increased production as well as decreased imports.

Mr West:

– The right honorable gentleman is a good friend to the farmer.

Mr SCULLIN:

– I hope so, because the farmers are a most useful body of men. They were the first to whom this Government appealed for help in rectifying the adverse trade balance of Australia : The Government makes no apology for going to the farmers first, because they are the people who are producing the exportable surplus products of the country; but our appeal to the farmers is extended to all sections of the community. The Government wants all sections of the community to help it to restore the trade balance by increasing production, and reducing the buying of overseas goods. It wants a little more of the Australian spirit in buying goods made in Australia. If people had displayed a little more of that spirit in the past, this country would not be facing the criticism that it is now suffering in the press of the outside world. I recognize, and the Government recognizes, that the step now being taken will seriously affect the revenue.

Mr M Cameron:

– It will ruin quite a number of people.

Mr SCULLIN:

– I hope that it will not ruin any one. But our first consideration must be to prevent the ruin of the nation. It is the credit of the nation that has to be maintained if we are to meet our interest obligations in London, which are piling up month after month. If people want to buyun necessary articles, or import goods that can be made in Australia, despite the fact that by doing so they are reducing in London or New York the credit that Australia needs to enable it to meet its obligations, the Government must step in and prevent them from doing sol It must prevent them from ruining the name of Australia.

The Government will be prepared to give fair and most sympathetic consideration to any case in which it can be shown that unnecessary hardship has been inflicted by these proposals. In any case the step we are taking will seriously affect our customs revenue. I was saying that our revenue will be affected if we have not sufficient exports to meet imports. In such circumstances our importations will diminish unless there are further borrowings overseas for the purpose of importing goods, a course which I hope will not be continued.

Mr Prowse:

– That is a natural course to take to right matters.

Mr SCULLIN:

– Let us see how natural it is. It is the crux of the whole question. Should we have allowed the position to drift ; should we have allowed what the honorable member calls the natural course to be taken - that is to say, should we have depended on the banks to do the restricting? We find that the banks have been circumvented. Should we have depended on a drop in exports to bring about a drop in imports ? The import figures for January and February do not show that that is yet happening. The Government did not rush into this scheme. It waited to see what was happening. It waited from October to the end of the year, and noted the effect of its tariff. The effect proved to be very beneficial, but was not enough. It watched from January to February the action the banks were taking. But that did not prove sufficient. The banks were being circumvented,by methods I have already indicated. It may be said that, although the banks may be circumvented, there is still a limit to the credit one can get ; it is not entirely limited by the amount of our exports. As I have pointed out, the transfer of mortgages and of property deeds from Australia can create credits - unreal credits, to a large extent - to the detriment of Australian trade, so our system of finance to-day cannot be called natural. We have to deal with the position in the most effective way we can. In reply to the honorable member for Forrest (Mr. Prowse), I would point out that if we brought all our imports down as low as possible, in order to correct the trade balance, there would be restrictions on the things we require to the same extent as on those we do notneed. whereas, under the proposed method, prohibition can be applied to selected articles, such as those things that can be manufactured in Australia, or which we can do without. Those persons who have so much money to spend that they are prepared to buy imported biscuits or tinned meats from England or America, would not be stopped from buying them by any duty; but a prohibition order would prevent them from buying them. While we shall show a drop in revenue whether we take this action or not, at least we shall have the satisfaction of knowing that, although losing revenue by it, we are building up our own industries, instead of sending our raw materials abroad for manufacture.

Mr Prowse:

– Will not. that increase our deficit?

Mr SCULLIN:

– It will seriously affect Australia’s revenue. But consider the position when we had surpluses. How did we obtain them? We borrowed abroad, annually, £30,000;000, which gave us credit that enabled us to import £30,000,000 worth of goods, on which we collected, in customs duty, £6,000,000. We obtained that revenue from debts incurred abroad, and spent the money as revenue. It would be sounder business to borrow money in Australia, and to spend it as revenue, than to spend as revenue money obtained because of debts incurred abroad. Where have we landed ourselves to-day? We are spoken of in respectable London journals as a nation that cannot meet its obligations.We shall tell the people in other parts of the world that we will meet our obligations, whatever the sacrifice, and whatever deficit we have to face in Australia. Whether we have to spread the deficit over many years or not, we will put our house in order.

If honorable members can show the Government a better way of meeting the situation, it will gladly accept their suggestions; but it will not retreat from the position, although it does mean sacrifice for Australia. As a nation, we are in the position of a man who is the head of a family and has allowed his household finances to drift, causing debts to accumulate with storekeepers and warehouses. Eventually, owing to the pile of debts that has accumulated, his credit is cut off. If that man has any sense be tells himself and his family that they must do with less in order to live within their means; that they must work or produce to earn sufficient wages on which to live and have a little over to meet their debts.

Mr Gregory:

– Cannot the Government appeal to somebody other than the farmer?

Mr SCULLIN:

– The farmer will not be bled. The honorable member has an obsession regarding the primary producers. I went to some pains to protect the producers on the land. The suggestion might be made - and, in fact, has been made - that this problem should be left to the banks, and they should be allowed to control the situation. I have pointed out that they can control it only to an extent. This action of the Government will absolutely cut out imports amounting to from £10,000,000 to £13,000,000; but that is not all that is eliminated. The restriction of credit and the consequent falling off in exports will cut out more. I expect our imports to decrease in value by £40,000,000; they must come down to that extent to balance our trade. Graduallywe can then build up our exports. We are dealing with a position to-day that is, I think, almost unparalleled in the history of this country. Certainly, similar conditions have not obtained since the ‘nineties; but there is no reason why the present depression should continue so long as it did at that period. I believe that with one or two good seasons-

Mr Prowse:

– Why does the Prime Minister think that? We produced more gold then.

Mr SCULLIN:

– Yes; butwe have somethingnow that is more lasting than gold. Our country is better developed than it wasat that time. Our lands are more thickly settled. We have factories throughout Australia to-day.

Mr Nairn:

– But they cannot sell tinything abroad.

Mr SCULLIN:

– We have greater means of recuperation.

Mr Nairn:

– We are exporting only about 2 per cent. of the goodswe manufacture.

Mr SCULLIN:

– That is not an effective argument. Why decry our own country so unnecessarily? We Lave resourceswhich few other countries enjoy. Iwant to inspire hope for the future, and we have this hope that few nations have. We import goods to the value of £140,000,000, and their volume increases as the population grows: but £100,000,000worth of those goods could be produced and marketed in this country. We have no need to talk about manufacturing for export until we have supplied our own requirements, and stopped the flow of imports to a large extent.

Mr Nairn:

– The Prime Minister said that we should equalize matters by our exports.

Mr SCULLIN:

– That is precisely what we have not done, and that is the fault thatwearenow trying to rectify. I realize that there are two sides to trade ; there is the trade that flows out and the trade that flows in. I am not foolish enough to believe thatwe shall reach the day when there will be no trade flowing in. I believe that the trade both in and out, will increase as our country is developed and becomes more populous; but we should determine now that our exports shall balance our imports, and leave a surplus to enable us to meet our obligations abroad. Then,when nextwe are facedwith a depression, because of low prices for our wool and wheat,we shall not be in the intolerable position of having our credit stopped, or even challenged. I deplore our excessive borrowing overseas tor a number of years. No nation can borrow £30,000,000 a year and then entirely cease borrowing as suddenly as a carrot is snapped. Four years ago an attempt should have been made to reduce our borrowing gradually to the extent of several million pounds a year. If that had been done then we should not be in our present position. It is particularly unfortunate that we are called upon to cease borrowing in a year when the price received for our exportable goods is low. Australia to-day is feeling the pinch; but if our experience awakens in us a realization of the manner in which we have been drifting, it will, perhaps, not prove an unmixed evil.

It has been suggested that this is a matter for the banks. Even if they could deal with it, they could not do it so well as the Government can do it. But the banks cannot put matters straight. I ask those who advocate leaving this matter to the banks whether this Parliament or the banking institutions of Australia are governing this country?

Mr Yates:

– Australia is governed by the banking institutions.

Mr SCULLIN:

– This Parliament, not the banking institutions, rules this country; and while the Government is prepared to assert that fact it will rule the country better. This is an emergency measure; it proposes emergency action.

Honorable members will be given an opportunity to discuss this matter immediately to some extent. I do not say that1 we shall be able to discuss the schedule, item by item, now; but immediately after we re-assemble following the Easter vacation - that is in about three weeks’ time - the schedule will be discussed item by item, irrespective of any other tariff schedule.

Mr Gregory:

– Will there be an opportunity for a general discussion straight away ?

Mr SCULLIN:

– Yes ; but not a pro: longed discussion.

Dr Earle Page:

– Will the discussion of this schedule take precedence over the discussion of the general tariff?

Mr SCULLIN:

– The general and itemized discussion of this schedule will take precedence over the discussion of any tariff schedule already laid on the table.

This schedule has been introduced to meet an emergency, and it will, therefore, be given first consideration. It is impossible to dogmatize as to its effect. We shall have to watch very closely the effect of this action, and remedy, as they arrive, any evils which may result. The only test which can be applied to a measure of this kind is that of experience. The Government will be guided by experience. It will welcome suggestions and representations, and will give them every consideration. The list that will be proclaimed to-morrow, as well as the list tabled today, can possibly be amplified as the result of experience, or it may be found desirable to modify it. I invite honorable members to approach the discussion of this matter with serious minds. The Government’s action is drastic; it is unprecedented. It is true that during the war period something of a similar nature was done, but not to anything like the same extent. Moreover, at that time, special circumstances enabled the government of that day to meet its obligations. But to-day we have to face the hard solid facts of business methods and exchange. We have to provide goods for goods. If we have not sufficient goods of our own to pay for those we buy, then we must buy less from other countries. It is a simple proposition to state; but the remedy is not so easy. The Government has spent many months in considering this matter. The Comptroller-General of Customs and other experts have brought their minds to bear on the . subject; men with individual knowledge of the industries of Australia and the articles which can be made here have assisted the Government; heads of departments, as well as the chairman and members of the Tariff Board, have been consulted. Their views have been considered by a sub-committee of the Cabinet, and, later, by the whole Cabinet. The matter has been gone into earnestly and seriously.

Mr Prowse:

– Did the Government seek advice from economic experts?

Mr SCULLIN:

– On the Tariff Board are men who were specially appointed because of their knowledge of certain branches of economics. Their wisdom has been brought to bear upon the matter. I do not say that they take any responsibility for the Government’s policy as such - the Government accepts full responsibility for its action - but I do say that they took no exception to any item in the schedule. Probably that will not be the case with honorable members. Win lever the views of honorable members, they can rest assured that those views will be carefully considered by the Government, which is earnestly desirous of taking the proper action to meet an emergency.

Mr GULLETT:
Henty

.- The proposals which have been placed before the committee may fairly be described as staggering. They represent the boldest and bravest experiment in economics and finance ever seen in this country, or, perhaps, in any country. Before I proceed to discuss them, I desire very cordially to compliment the Prime Minister (Mr. Scullin) on the absence of party - bias from his speech. The right honorable gentleman set an admirable standard for the discussion of this extremely important question. While I am not in complete agreement with the Prime Minister, I trust that, in dealing with the Government’s proposals, I, and indeed, all honorable members on this side, may endeavour to follow his example. I hope also that during the debate honorable members opposite may extend to speakers on this side of the chamber the like consideration which members of the Opposition have shown to the Prime Minister.

The Opposition recognizes that the Government is faced with a problem of great magnitude and extraordinary difficulty. Australia’s position, if not critical, could scarcely be more serious than it is. In dealing with such a situation, we must be prepared for the Government to take strong, possibly unprecedented action. I trust that the committee will bear with me while I attempt briefly to set out the causes which have led up to our present difficult position. Australia is beset with economic and financial difficulties to-day because for some years we have been living well beyond our means. We have enjoyed good seasons and good prices; yet we have spent far more than our income, for, in addition, we have borrowed heavily. No particular government or political party is entirely responsible for the present state of affairs. All parties, governments,’ both Federal and State, municipalities, the great spending authorities, and, indeed, most of our private citizens, have, during recent years, been living beyond their incomes. The disposition, to do so h*as been very strong among us. As was pointed out by the Prime Minister, that fact is very clearly revealed by our trade figures. For some years our export values have not been equal to our import values. There has been a progressive deficit. In addition, there has yearly been a deficit, amounting to ‘a great sum, in regard to our overseas interest. On top of that there has been a grave slump in wool prices, the partial failure of our wheat crop, and the drying up, temporarily or permanently, of the overseas loan market. We also have, either matured or rapidly maturing, an immediate loan liability of considerable magnitude . on the other side of the world. The first problem of the Government is how to meet that immediate liability; how to honour our obligations so that our credit may not be fatally impaired, as it would be if anything in the nature of a default occurred. But that is only the beginning of the Government’s task. Having squared the ledger for the moment, its duty is to reduce the value of our imports so that in future not only will our export values balance our import values, but there will’ be a sufficient surplus to meet our interest obligations in the United Kingdom arid,so far as they exist, in the United States’ of America. I am in the most complete”’ sympathy with that objective. If it ‘is attained, Australia’s position will be a happy and wholly satisfactory one. While I deeply regret that I cannot be as enthusiastic about the means to be employed as about the end to be achieved. I wish the project of the Government well. I entertain the most earnest hope that the Government may succeed rapidly and decisively in its remarkable endeavour.

Briefly, the Government seeks, drastically and substantially, to reduce the value of our imports, and substantially, and if possible immediately, to increase the volume and value of our exports. I regret having to confess to considerable misgivings as to what will come out of the Government’s novel proposals. Nothing is easier than to take steps to put an end to, or partially to arrest the importations of a country.For instance, the Acting Minister for Trade and Customs (Mr. Forde) is not obliged even to seek the sanction of Parliament to proclaim a prohibition against the importation of any number of articles; it is merely necessary for him, with the consent of the House, to lay his schedule on the table and the imposition of increased duties begins. This is the simplest procedure, and its effect is beyond question. There is no challenging it. Unfortunately, however, the consequences are not easily foreseen. Some are fairly obvious, but others are not at till clear. It is with regard to these indirect consequences that I entertain considerable apprehension.

Whathas been the great factor in bringing Australia to its present state of depression? This afternoon the Prime Minister claimed to set out the causes. With all respect to the right honorable gentleman, I do not think that he touched upon the true causes of the position.I believe that the greatest economic and industrial factor in bringing about the existing situation is, and has been for several years, the abnormal cost of producing anything and everything in this country. It is all due to costs, costs, and nothing but costs. In a relative sense, both the primary and secondary costs of Australia are higher than those of almost any other country in the world. Certainly they are substantially higher than the costs of any of the countries with which our exports come into competition. That is clearly shown by the extraordinary frailty of Australian industry in recent years. It is no exaggeration to say that, with the single exception of sheep and wool, there has been no progress in any but our sheltered industries for seven or eight years. All our tropical and sub-tropical rural industries are in need, or in receipt, of some form of bounty or protection. The same may be said of our irrigation areas, and of our primary industries even where favoured with a good rainfall andan excellent climate. I instance the butter and wine industries. Nothing but the cost of production has dried up Australian industry and prevented the development of the export of our primary products. That, and that alone, is responsible for bringing Australia to its present position.

Although the Prime Minister did not say a great deal about unemployment this afternoon, it is obvious that its relief is one of the great objectives of this new scheme. We all share in the right honorable gentleman’s desire to put back into work those Australians who are now idle, both to relieve their distress and for the genera! good of the country. As excessive costs are responsible for the present economic and financial position of Australia, so arc they largely responsible for unemployment. There is plenty of work to be done, and scores of thousands of men are out of work only because it is not profitable to employ them in producing at an uneconomic cost. But unemployment is not new in Australia. It did not start with the slump in the price of wool, or the partial failure of last year’s wheat crop, or the shortage of loan money. In normal years the ratio of unemployment is 5 per cent.; in the years 1924 and 1925 it was 9 per cent.; in 1928, 10.8 per cent., and in 1929, 11.1 per cent. This increase during the last six years is attributable almost entirely to the cost of production. I emphasize that because I am lending up to what I consider the danger of the Prime Minister’s proposals. If they can be made effective, and costs of production can be brought down, they will achieve a conspicuous success, but if they lead to an increase in the cost, of production nothing but calamity will follow the imposition of extreme duties and the prohibition of imports. These proposals are not introduced primarily in the interests of Australian industries; their main purpose is to assist to adjust the balance of trade. But, unquestionably, their effect will be to give a monopoly to Australian firms over a wide range of manufactures. This schedule and the proclamation to be issued to-morrow mean the prohibition of the importation of certain manufactured goods. I do not say that that is necessarily bad ; presumably the proclamation will apply in the main to what are conventionally known as luxuries - commodities with which we can dispense for a time, at any rate?

Mr Scullin:

– Or goods which Australian industries can wholly supply.

Mr GULLETT:

– I am interested to know that they, too, are to be included. On other goods a surcharge of 50 per cent, is to be imposed, and that additional protection will hand over the home market to the Australian manufacturer; he will no longer be subjected to competition from overseas. What will be the effect of this policy? Will prices remain stationary, or increase, or decrease? Frankly, I expect that in a limited number of cases the reservation of the home market to Australian manufacturers, making possible a larger output, will cheapen production and lead to a reduction in prices. I shall be disappointed if that does not happen. In other cases thi; increased duties will promote competition amongst local firms. The November duties have already tended to have that effect in connexion with hosiery which for a time, at any rate, should be cheaper. Whether, as competition becomes keener, some of the manufacturers will drop out and others merge their interests remains to bo seen. For the present, I am not concerned with that. But our experience and study warn us, that for every reduction of price that results from the granting of a monopoly we must expect three or four increases. In saying this I am not condemning the Government’s action. There is room for honest difference of opinion on this subject. The Prime Minister has stated on other occasions that the Government will endeavour to police the manufacturers’ prices, and that if they exploit the- tariff the duties may be removed or reduced. I remind the right honorable gentleman that the manufacturer is not the only agent to be controlled. A group of manufacturers may, even when given a monopoly, play the game; we are told that the manufacturers of agricultural machinery have agreed to an immediate reduction of prices. The manufacturer, however, is only one of several big factors. Another is labour, and these proposals open up an extraordinary vista to the average unionist. I say that in no partisan spirit. The worker is not to be blamed for wanting the best he can get. Industry would not be industry if those employed in it had not scores of grievances, and I can imagine a trade union leader looking at the schedule of increased duties and saying, “ The em ployers have always pleaded that their industries would not bear improved conditions, but with this additional protection there is nothing to prevent them from increasing their prices so that their employees may enjoy better wages and hours.” Another factor is the distributor. The Prime Minister has stated that the costs of distribution are largely responsible for high prices. I can conceive of no machinery that will control wholesalers and retail distributors when there is nothing to limit the prices they can charge,’ except the drying up of the market, which in connexion with the sale of a necessary, does not soon occur. 1 hope that the Government will employ every possible safeguard, and appeal to all interests to play the game in this new province of monopoly that is being created.

I come now to the possible effect of these proposals upon taxation, and indirectly upon industry and the cost of production. From what the Prime Minister said, I assume that he desires imports to bc curtailed by about £40,000,000. To-day the customs revenue amounts to approximately £30,000,000. If the Prime Minister’s desire is realized, customs revenue will shrink to the extent of £S,000,000, and that amount will have to be made good by direct taxation. Owing to the diminished national income, particularly from primary production, next year’s income tax returns will show a decline, and it may be . necessary to increase this impost and other direct taxation to maintain receipts at even their present level. What increase will be necessary during the present industrial debility to make good the five, six, eight, or ten million pounds, that the Treasury will be short through the falling off of customs revenue? And what will be the effect of withdrawing another £8,000,000 from industry? I fear that the effect will be very grave. Industry is already so overburdened that it cannot profitably employ more than S7 per cent, of the workers of this country. The additional impost will be passed on and be reflected in increased costs, further enfeebling industry and augmenting unemployment. Thus the very object that the Government has in view will be defeated. I emphasize costs, because the Government is seeking not only to reduce imports, but also to stimulate exports, but if the costs of primary production are increased the result will be the reverse of what the Government desires. If through an increase in costs the primary producers are crippled, the export trade, instead of increasing, will diminish. The Prime Minister, in setting out to increase the export trade has undertaken a tremendous task, for the value of the wool clip has been reduced by half. Before we can return to the normal export position of recent years we must increase the export of wheat and butter and other primary products sufficiently to make up the decrease in export values brought about by the reduction in wool prices. I have the gravest doubt whether this prohibitive tariff can be imposed without increasing costs, and if we increase costs we shall diminish not only the value of our exports but also the present ratio of exports.

I urge the Government to use every endeavour to avoid another positive danger which I see looming, the danger of provoking a number of our good customers overseas into tariff retaliation. We should make it abundantly clear to the world that we are taking this drastic step, not to keep out foreign goods in the interests of Australian manufacturers, but to end our present financial crisis. If we can get that idea into the foreign mind, and obtain a certain amount of sympathy from the foreigner, he may not retaliate against us. The other day I asked the Prime Minister whether he had considered the possibility of foreign countries retaliating by placing an embargo on Australian wool. I asked that question in no provocative spirit, but out of sincere concern for the wool industry. There is a general assumption in this House that all Australian wool is indispensable to every woollen manufacturing country in the world. That is entirely wrong. Those countries must buy a small portion of our finest wool, but crossbred, comeback, and the stronger merino wool can be obtained elsewhere. Unless we proceed with caution there is a real danger of some European countries retaliating by placing prohibitive duties on certain classes of Australian wools. There are such duties imposed in some countries on our wheat and butter, but it would be a more serious matter for us if similar action were taken in respect of wool. If two or three of the important buyers at the Australian wool sales refused to bid, the wool industry would indeed be in a pitiful plight.

Let me explain by example to the Prime Minister what I mean by saying that we should exercise caution at this critical time. I understand that the Acting Minister for Trade and Customs (Mr. Forde) has recently promised to the peanut growers of Queensland the protection of an embargo in perpetuity against imports from China. That may seem a small thing, but the folly of it is evident. While we are placing prohibitive duties on one of China’s most important exports, while we are banging the doors against its trade, we are sending a trade representative to Shanghai to encourage and develop the sale of our goods in China. In addition we are proposing to expend money in establishing woollen mills in that country so as to teach the Chinese to wear Australian woollens. Surely at. a time like this we should avoid taking any action that might affront a nation with which we desire to trade.

Mr C Riley:

– The honorable member placed an embargo on peanuts two years ago.

Mr GULLETT:

– I placed a temporary embargo on peanuts for a few months on the definite written undertaking from the Queensland Peanut Board that its renewal would not be asked for. This policy is likely to cause an immediate dislocation of business. Some honorable members supporting the Government speak of importers as though they are enemies of this country; but the great majority of them are good Australians. Their fathers were importers, and they themselves have grown up in the business. They are good Australians doing their job, according to their lights, just as well as any other Australian. These embargoes and prohibitive duties will immediately bring in their train financial ruin to hundreds of persons engaged in the importing business, and definite unemployment to many thousands of their employees. This policy is not all plain sailing. Its indirect consequences are many and serious.

Mr Lewis:

– We are encouraging our local manufacturers. *

Mr GULLETT:

– I am a protectionist. I believe in the progressive development of manufacturing in Australia ; but I do not like the violence of the present policy, because it imposes all sorts of hardships on the people. I shall not speculate as to what to-morrow’s proclamation contains. I take it that the prohibition will be confined to luxuries and other things that we can do without. I trust that there will be uo prohibition in favour of articles that can be manufactured in this country. That is not necessary, and indeed such a step would be exceedingly provocative and dangerous in our tariff dealings with other countries. We should be content with a high tariff, and not enforce prohibition if it can be avoided. I urge the Government to keep separate the two tariff lists - the list of tariff items imposed in favour of Australian industry, and the new list of tariff items imposed to bring about the adjustment of the trade balance. The two things should not be mixed up. We should let the policy of protection of Australian industries stand on its own, because it is well able to do so. If we use these embargoes which have been imposed to rectify the trade balance to bolster up protection we shall inflict a great deal of harm on a number of our people. I also urge the Government to place a time limit on all these surcharges and embargoes against imports, so that, when necessary, they may be withdrawn. By continuing them in perpetuity we should be playing into the hands of vested interests in this country which might be built up only as a result of these emergency measures. We should not aim to build up excessively sheltered industries in Australia by means of this emergency tariff. Australia is in an exceedingly grave financial position, and I recognize the inevitability of some strong and even remarkable action. I recognize, too, the sincerity of the Government in taking this step. It is certainly a wonderful display of courage. I commend to the Prime Minister the suggestions that I have made.

Dr EARLE PAGE:
Cowper

.- I congratulate the Government on facing our critical position and bringing down its remedy for our financial ills. I also congratulate the Prime Minister on his speech, even though I disagree with his policy. The remedy that he proposes is likely to precipitate a panic in Australia and bring about a vast amount of unemployment. It would have been wiser for him to follow the advice that he gave to the Bruce-Page Government in 1927, that before bringing down financial proposals, the Government should consult with, the leaders of the other parties in the House, with a view to adopting some mutually satisfactory scheme which would have no ill effects upon the community. The Government has evidently overlooked the fact that there are actually two crises affecting Australia at the present time. We are faced with an immediate crisis in Great Britain; because the Australian Governments are finding extreme difficulty in meeting the interest payments on certain of their loans and repaying other loans that are falling due. There is also a long drawn, out economic and industrial crisis in Australia. Both of these have to be faced, and one is partly responsible for the severity of the other. Despite our critical situation, I believe that Australia is, at bottom, absolutely sound. There is no need for despair, because there is no possibility of the Australian Government defaulting. It will stand, as every other British community has stood throughout English history, as a nation which will carry out all its obligations, no matter how painful the process may be. After the war Australia was the first nation to make arrangements to meet its war commitments, and I venture to say that on this occasion Australia will not hesitate to meet its financial commitments. Governmental action is more or less responsible for both of the crises we are facing at the present time. Neither would have occurred had the loan money which has been borrowed in the past by various Australian governments been wisely and completely spent on reproductive work. Had we used it entirely for machinery and plant here that would have enabled us to develop the country, we should have been able to pay the principal and interest on the loans as it became due. But the methods of spending loan money and the manner of work done have not been beyond reproach. Ultimately therefore, governments have very great responsibility for the position which exists.

The Bruce-Page Government, recognized that Australia was gradually drifting into a difficult position. It was responsible in 1923 for the formation of a Loan Council which co-ordinated the actions of the various governmental borrowing authorities in Australia. One of the reasons why Australia will be able to surmount the present crises is that as a result of our action continuous collaboration between the Commonwealth and State Treasurers in borrowing and in conducting the finances of the Commonwealth on non-competitive lines has been assured. No one State will go out and borrow money to the disadvantage of the Others, nor will the Commonwealth take advantage of the States in that way. It has been glibly said that we are in our present position because the previous Government borrowed £50,000,000 a year overseas in. the last, six or seven years. The fact is that an almost similar amount was raised in Australia for the States. This was because there was a definite understanding between the Commonwealth and the States that, the local money market should be left to the States and the overseas market to the Common-‘ wealth. It was recognized that Australia during these seven years had to meet huge conversion war loans, to the extent of about £300,000,000, to redeem her war debt, and for this reason the agreement was made that the Commonwealth Government should not be hampered by State competition in going upon the Australian market for that purpose, but that any new money should be paid to the States. During the last seven years the proportion of Commonwealth borrowing to the total borrowing of the States has been roughly as £50,000,000 is to £275,000,000. The Commonwealth borrowing for that period at, say, 6 per cent., could only add about £3,000,000 a year to our interest bill, or, say, £1,500,000 due at each half-yearly period. It is idle to say therefore, that the borrowing of the previous Government has caused the present crisis. Moreover, the money borrowed by the previous Government was wisely spent on reproductive work. We spen t £27,000,000 on telephone services, and £13,000,000 on war service homes, and we made large contributions to sinking funds, which last year equalled the Commonwealth borrowing. No money borrowed from overseas was spent by the previOUS Government upon work in Canberra. The Government insisted, when dealing with the States, that Canberra was an Australian undertaking and therefore the money spent here must be raised in/ Australia. It is unfair to say that the situation which faces Australia is due to the nefarious conduct or lack of care of the last Government.

The adverse balance of trade has been used as a bogey to explain all our difficulties. A developing country importing capital for new machinery or opening up the country must in its early years often have an adverse balance of trade. But in the last complete financial year that the Bruce-Page Government was in office the balance of trade was- favorable to Australia. Our imports were then valued at £142,000,000 and our exports at £144,000,000, giving us a favorable balance of some £2,000,000. The general trend of trade when the previous administration went out of office was upwards. The main reason why the upward trend did not continue was that the price of our wool declined and a small wheat crop was harvested. It is generally recognized that we must face a permanent decline in the value of wool. Our present position is similar to that which was encountered in the early ‘nineties of the last century. Before that period of our history everything had been going as merry as a marriage bell for some years. But it was recognized in the early ‘nineties that the price of wool which in the late ‘seventies and early ‘eighties had averaged about 16d. per lb. for some time, had declined permanently to about 7d. per lb. The decline of exports that has been occurring in Australia in the last’ three years has been due to a fall in the value of our products. We have, consequently, at last been forced to face economic facts. Had we used the whole of our borrowed money to better advantage the position would not have been nearly so serious: for we should have created the means of producing more employment and therefore more wealth, which would have put us in a better position to meet sinking fund and redemption requirements.

The policy which the Government is now adopting cannot, give us permanent relief. We must, sooner or later - mid the sooner the better - reduce the cost of production in Australia. The prohibition of imports is a palliative and nothing more. It is a negative policy which cannot possibly do the country any permanent good. The application of this policy to a limited extent might give some temporary relief, but the essential need of Australia is an increase in production at a competitive price. The Prime Minister has appealed to the wheat-growers to put 1,000,000 additional acres under , wheat, so that we may greatly increase our exportable surplus. I appeal to everybody in Australia - to those engaged in secondary industries as well as to those engaged in primary production - to apply their efforts so that we may bc able to supply, not merely Australia’s requirements, but to some extent also the markets of the world.

If our history is examined year by year for the last 30 years, it will be found that proportionately Australia is exporting a smaller quantity of secondary manufactures now than in the first years of federation, although the volume of our exports of primary products has almost doubled. We must so regulate our internal affairs -that we shall be able to export both our primary and secondary manufactures on a profitable basis. We must adopt mass production methods as the basis of our secondary as well as of our primary industries. It is along that road that we shall march to our economic salvation. We can reach prosperity faster by that method than by the one suggested by the Government of prohibiting imports and increasing duties which must increase production costs.

I understand from the Prime Minister that we must almost immediately meet in London certain interest payments and loans that are falling due; but I cannot see that we shall do anything very effective in the way of overcoming the economic crisis in Australia itself by this method. If the Government persists in carrying out this policy it will cut off, in one act, almost half the total imports into Australia. Such a proceeding must have a serious effect upon employment. Our import business provides for at least one-fifth to one-tenth of the total employment of Australia. The handling and distribution of our imports may even be responsible for as much as a quarter of the employment here. . The total production of Australia was £440,000,000 last year, and imports . £140,000,000. A drastic interference with the import business, such as is now proposed, must therefore throw a very large number of men out of employment within a week or two. The adoption of this ruthless and rigid method is, I submit, very inadvisable. Instead of trying to meet the situation by the introduction of four tariff schedules, such as we have had before us to-day, I suggest that the Government should endeavour to discriminate between the countries in which our imported goods originate. We should discriminate not only between goods but between countries. We should treat countries which take a considerable quantity of our imports better than we treat countries which take practically none of our goods. Those which help us by accepting our products should be put in a more favorable position than those which merely take money out of the country for the goods that they send here.

There are two obvious measures that we could take to meet our heavy commitments in London. By restricting imports from overseas we should gradually accumulate credits in London that would enable us to meet the position to some extent. By this means we should use revenue or loans raised in Australia to pav for money borrowed in London from the banks to help Australia. The other day the Treasurer told us that almost immediately after the present conversion loan closed, a new loan would have to be floated for public works in Australia. Under these circumstances we shall pay the banks for the money advanced to us in London to a great extent by loans raised in Australia.

Another way of helping the position in London is to raise a loan there. It is true that the present is not a favorable time to take such an action, but the disadvantages of raising a 6 per cent, or 6£ per cent, loan for a very short term would be insignificant compared with those that must follow the adoption of the policy which the Government has now put before us. By raising a loan in London we should be able to lessen, if not entirely remove, the exchange troubles which we are now facing, and pay our commitments. We might then be able to cut down the number of items in these tariff schedules by half, or at least by a quarter. That would be infinitely wiser than persistence in the present “wholehog” policy.

After all, what would be the position if we were to raise the money in London instead of in Australia ? There would be a difference in the location of the lenders. In one case the lenders would be in Australia, and in the other case they would be in England. If the terms of the loan in Australia were exceptionally good it is quite likely that foreign money might be sent here for investment, so that even an Australian loan may have foreign subscribers. That must have occurred in connexion with the conversion loan just closed. The Government must consider whether it is better to disturb the whole industrial life of Australia by its present policy than to raise a loan in England, even though the terms may not be all that we would wish. The Prime Minister has stated that he has been told definitely, though he did not say by whom, that Australia must put her house in order, and get down to economic facts, before she can expect to get any more money on favorable terms from overseas. I have no doubt a clear indication by the Government that it is facing the industrial position would make the London loan position very much better. On the 4th February last he said that the two main factors that were responsible for our present position were the industrial troubles in Australia and the drop in the price of wool. The lowness of the price of wool we cannot help - let us put a stop to industrial troubles and get down to an economic basis in industry.

The Prime Minister admits that the action which the Government has taken is unprecedented in the history of Australia. I venture to say that it will cause a greater disturbance in the industrial and commercial life of Australia than the action of any previous administration. If, instead of bringing down this proposal, the Ministry had had the courage to tell the people of Australia - not the primary producers only - that the time had come to increase production in order to maintain our existing standard of living, the London money market would be immediately available to us on favorable terms.

Mr Lewis:

– How can we increase production ?

Dr EARLE PAGE:

– I have, on other occasions, indicated how the industrial, efficiency of this country may be improved, by pointing to the disastrouseffects of high revenue and protective duties on machinery and capital plant not made in Australia. This operates as a capital levy with permanent burdens on the producing industry as a result. In the electrical goods industry, for example, the customs duties collected each year totalled £1,250,000,, while the capital invested in that industry in Australia is only a little more than £400,000. As a result every industry that depends on electrical machinery for the carrying on of its business and assisting production is unfairly loaded with the added initial costs of the machinery which it uses. This huge capital levy is hampering industry in every direction. The effect of these duties is seen in the condition of many Australian industrial concerns and in the lowered effective purchasing power of wages and the high prices of goods. At the present time for every employee in our factories there is only 1.6 horse-power of electrical energy employed, whereas in the United States of America industrial concerns have 4 horse-power. If, as has been agreed, the output of 1 horse-power of mechanical energy is roughly equal to the output of ten men, we have only sixteen invisible electrical men who draw wages for their mechanical energy to assist production, whereas in the United States of America manufacturers have 40 effective electrical men harnessed to industry to help every human employee who draws wages.

Mr Lewis:

– Tasmania has been utilizing electrical power for some years in its industrial establishments.

Dr EARLE PAGE:

– And Tasmania, for the reason mentioned by the honorable member, is able to export certain of its products all over the world. Does any one suggest that the electrolytic zinc industry would have been established in Tasmania but for the fact that cheap electric power was made available?

Mr Lewis:

– But Tasmania is not the more prosperous on that account.

Dr E ARLE PAGE:
COWPER, NEW SOUTH WALES

– It is much more prosperous than it would have been without cheap electric power for industry. I invite the honorable member to ask the Postmaster-General (Mr. Lyons), or the honorable member for Denison (Mr. Culley) what they think about Tasmania’s position since the more general use of electric power in that State. No one can doubt that it has very greatly improved in recent years.

The more general use of electric power in industry will enable us to cut production costs. If, as the Prime Minister has said, we must tell the world that for the future we must buy only those things which we can afford, then I suggest that the time has come when all the people of this country and not merely some of the people must work a little more so as to increase production and maintain our present standard of living. If we do this, our position will quickly improve, and those who control the money markets of the world will adopt a very different attitude towards us.

Crises such as this are not of indefinite duration. We have had previous experience of them. This is notthe first time we have had difficulty in raising money overseas. Only six or seven years ago we were in a similar position as regards London borrowing. Within two or three months the price of money on the London market rose from 5½ per cent to 6½ per cent. Money was practically unprocurable, and even after we had negotiated a loan we were unable, for a time, to transfer the credit to Australia. After the lapse of eight or nine months, that crisis passed and rates came down to 4¾ per cent. We may reasonably expect that history will repeat itself, and that the present crisis . will, in time, pass, though I admit that much will depend upon the measures taken to improve the economic situation in Australia. For this reason we should not be stampeded into panic legislation, for this is what the Government’s proposal amounts to. Crises, I repeat, are usually short in duration. For the most part, they are precipitated by a sudden loss of confidence, due possibly to action taken by people in high places. As soon as a crisis develops, credit facilities which previously were available are, for the time being, withheld. Let me give an illustration of what I mean. In June, 1921, the market rate for money in London was £5 10s. per cent. Then it rose in October to £6 9s. 5d., and even at that price it was unprocurable. By March, 1922, it was down again to £5 6s. 2d. per cent., and in June 1923, to £4 15s. 7d. per cent. In 1925-26, when we approached the London market for the ordinary purposes of the Loan Council, we were able to get only one-third of the amount required in that year. For nine or twelve months it was practically impossible to obtain any money from the London market. It is true we did not then have the present combination of adverse circumstances to make our position the more difficult. There had not been a sudden drop in the price of our principal exportable commodity.

It is obvious that we must take steps without delay to put our house in order. The only way in which we can meet the situation caused by a drop in the price of wool is to increase the value or volume of our other exportable products. Mr. Bavin, the Premier of New South Wales, is seeking to apply this remedy. He is setting an example by taking a little less and asking the people of New South Wales to work more and longer hours for the time being. The increased purchasing power of wages, due to the adoption of this policy, would make it possible for us to retain the present standard of living. The Treasurer (Mr. Theodore) Could tell honorable members of his experience in Queensland. In the depression of 1922 there was a reduction in the nominal wages paid in that State, but within eighteen months the purchasing power of the wages paid had so greatly increased that the benefits were felt, not only in Queensland, but throughout the Commonwealth.

What is likely to result from the Government’s action? As soon as stocks now in our warehouses aredepleted there must follow an increase in unemployment. We cannot expect local manufacturers to be able immediately to supply the requirements of the local market. Any proposal to practically prohibit the importation of goods should be made only after a most careful examination of its probable effect in the industrial field. This embargo must increase the cost of living and production in Australia. It is idle to argue otherwise. The Prime Minister has told us that the Government proposes to increase, by 50 per cent., the duties on items in the third schedule.

Mr Forde:

– On some of those items.

Dr EARLE PAGE:

– Those items relate to commodities which must be imported because they are necessary commodities. Consequently, people will be obliged to pay more for them, and I have yet to learn that the cost of living may be reduced by paying more for necessary commodities. Any one who can prove that contention must have the ability to square the circle.

If these proposals are accepted by the House it will be increasingly difficult for us to export our surplus products on a competitive basis, or to carry on industry in Australia efficiently and economically. The Prime Minister has assured us that certain manufacturers have guaranteed that the prices for their commodities will not be increased. On that point all I can say is that we have had guarantees on other occasions, and they have been valueless, because factors unforeseen at the time, have had to be reckoned with. If. for instance, an industrial tribunal made an award involving increased wages in a particular industry, it would then be unreasonable to expect the manufacturer to market his commodities at the former price level. Not many years ago the Commonwealth entered into an agreement with the Governments of New South Wales and Queensland to construct a railway on the 4-ft. 8-J-in. gauge from Kyogle to South Brisbane, at an estimated cost of £3,500,000. That agreement contained a proviso with regard to wages and industrial conditions, and because of certain awards by an industrial tribunal, the construction cost was increased to £4,400,000, about £900,000 above the original estimate. Guarantees are of very little value. Even if no untoward circumstances arise it will be difficult for the Government to retrace its steps, because vested interests which will have been created by an unscientific tariff will have accommodated themselves to the position. Naturally, everybody does this. Every living organism accommodates itself to its new conditions. It follows, therefore, that the future remedy to correct the fault which the Government is now committing, would bc as unjust to manufacturers as the present action of the Government is to importers.

Mr Holloway:

– This action is taken to meet a situation created by the Government of which the right honorable gentleman was a member.

Dr EARLE PAGE:

– That is not so. The previous administration borrowed overseas in seven years altogether £50,000,000 to keep the local money market clear for the States. At the same time it paid off over £40,000,000 of war debt. This was in accordance with an undertaking that the States would not embarrass the Commonwealth in its conversion operations. On one occasion we were short £10,000,000 in a conversion in Australia, and on another occasion we were short £6,000,000 of the required amount. This clearly indicated that additional local money was not available for governmental purposes. If the honorable member cares to search the records he will find that in 1924 I submitted to the Loan Council a proposal that the borrowings in Australia should be limited to £20,000,000 a year: but as the Loan Council was then constituted, that proposal was not accepted. When I endeavoured to bring pressure to bear on members of the Loan Council, Mr. Lang, the then Premier of New South Wales, withdrew from the Council because New South Wales, he said, intended to borrow as much as it wanted on the local market, and Mr. Stevens, the Under-T’reasurer, declared that New South Wales would not tolerate outside pressure from the Commonwealth as regards its loan operations in Australia. My proposal was that there should not be any combined borrowing in Australia which would increase the debt per head in ‘ the Commonwealth. The adoption of this proposal would have cut our borrowing in half during the last six years.

I come now to the question of what can be done immediately. I urge that we should attempt to get over our portion of difficulties by a temporary loan overseas to ease the position. It would be better to pay a substantial rate of interest for a. short time than to dislocate the country’s industries by the Government’s drastic proposal. If we made it clear that we intended to face the position, to cut down costs of production, so as to get industry on a sound footing, and even, I might mention in passing, gave an assurance that we did not propose to scrap the Constitution at this difficult period - we should probably improve our credit overseas immediately and make it easier to obtain accommodation. Instead of pursuing this drastic proposal, which is inflexible and difficult to work, and the administration of which is practically at, the mercy ofthe Minister for Trade and Customs, if the position is as desperate as the Government says, it would be wiser that the Government should take steps to assume control of external exchanges. It could then ration exchange as the British Government did during the war. That would tend to reduce the exchange rate, and priority could be given to the settlement of Government obligations. There should be possibility of discrimination between various typos of imports, and between various countries which export goods to Australia. Such discrimination could be more readily made by the Government acting through the Commonwealth Bank than by the Minister for Trade and Customs acting alone. He could come in as one of a council dealing with the matter. If the Government, acting in combination with its financial advisers, were to assume control of all external exchange, and ration it in such a way as to discriminate between different kinds of imports and different countries we would have a more flexible method in solving our difficulties. I asked the Prime Minister when he was speaking whether, under the Government’s proposals, there would be any discrimination in favour of Great Britain. He said that there would be a continuation of existing preferences, but that will be of no value at all. Last year Great Britain imported approximately £55,000,000 worth of our goods, while we bought about £63,000,000 worth of goods from her. Compare that with our dealings with the United States of

America. Last year we sold to the United States of America about £8,000,000 worth of goods, and bought from her about £40,000,000 worth. In view of those facts, we should make it possible to discriminate in favour of Great Britain to a greater degree than we shall be able to do under the proposals of the Government. Great Britain has been our provider of loan money. Great Britain is our market, and we need to get closer to Great Britain at the present time, rather than farther away. Take the position in regard to the canned fruit industry, for instance. The canned fruit produced in the Shepparton area cannot be sold in England now because the American surplus, amounting to about 5 or 6 per cent. of its output, is being dumped on the English market at glut prices. The Americans are able to make contracts, not for the present only, but for the whole of next year, while 400,000 cases of Shepparton canned fruits are unable to find a market in Great Britain. We should deal with this matter in such a way that Great Britain, to whom we owe between £400,000,000 and £500,000,000, who has assisted our development in the past, and to whom we must look in the future for our market, shall receive from us a substantial measure of preference and favorable discrimination. I regret that the Government, before bringing down such revolutionary proposals, did not see fit to consult the Opposition. I urge the Government to give consideration to my suggestion for taking control of the exchanges, because that would enable it to exercise discrimination in a way it will not beable to do under these proposals.

Mr THEODOR:
Treasurer · Dalley

– The right honorable gentleman who has just resumed his seat expressed regret that the Government did not confer with the members of the Opposition before bringing down these proposals. Surely he realizes that the statement of the Prime Minister this afternoon was an invitation to honorable members of the Opposition and. indeed, to all honorable members, to give their earnest consideration to the matter before the House. These are not hard and fast proposals. The Prime Minister made that clear.

Mr Prowse:

– The Prime Minister said that the Government would go on with the proposals in any case.

Mr THEODORE:
ALP

-He pointed out the necessity for action, but he invited honorable members to scrutinize the proposals closely, and to offer suggestions upon which the Government could act. Nothing can be fairer than that. TEe Government must accept responsibility for its own proposals, and it could not evade that responsibility by holding a prior consultation with members of the Opposition. It does, however, invite suggestions from members of the Opposition. The schedule has been placed on the table, so that honorable members may discuss it, and the Prime Minister has promised that any suggestions made will be considered. The right honorable member for Cowper (Dr. Earle Page) found fault with almost every particular of what has been proposed by the Government, and he advanced a number of alternatives. His first suggestion, if I understand him correctly, was that, in lieu of what the Government now proposes, we should reduce cost’s of production in industry.

Dr Earle Page:

– I said that the general crisis could only be overcome in that way ; I was not then referring to the immediate crisis.

Mr THEODORE:

– I understood that the right honorable member was putting forward that suggestion as an alternative to the Government’s proposals.

Dr Earle Page:

– No ; I advanced that only as a remedy for the general economic depression.

Mr THEODORE:

– If it is possible to reduce production costs to the lasting benefit of Australian industry, it is the duty of all those who can do anything in that direction, whether employees or employers, to do what they can. Another of the right honorable member’s suggestions was that we should endeavour to borrow in London to meet our immediate exchange difficulties. Surely, he realizes that we are not able to obtain that temporary solution of our difficulties, because it is impossible to approach the London market at the present time, and has been impossible for months past. He must know that for several months before the Government of which he was a member went out of office there had been a desire on the part of the Loan Council to place loans in London. The last appearance of an Australian Government in London for a long-dated loan was in January, 1929. Prom April, 1929, the Loan Council was awaiting a favorable opportunity to get on the market again. It failed to find such an opportunity, and conditions have grown rapidly worse so far as Australian borrowing is concerned. The right honorable member for Cowper (Dr. Earle Page) made another suggestion as an alternative to the -Government’s proposals. He suggested that, rather than incur the liability of creating a great commercial disturbance, and endangering our economic life by such drastic action as the Government proposes, we should take control of all external exchanges. Surely the right honorable member realizes that action of that kind would be far more drastic, and far more disturbing, than what the Government proposes to do.

Dr Earle Page:

– It would be only temporary.

Mr THEODORE:

– If. the right honorable member can obtain any support from his side of the House for his suggestion, and apparently it is favoured by many honorable members of the Opposition, I am very glad that it has been put forward. As a final resort, we may have to adopt something like that, but I know that if I had brought down such a proposal it would be regarded as almost Bolshevistic. Such action would involve, not merely the taking over from the Australian banks whatever funds they might have in London, and whatever funds were accruing to their credit - which we have not at present power to do - but would also involve taking over as government property, temporarily at any rate, all exportable goods intended to be shipped out of Australia. How else could what he proposes be done ? It is suggested in a light and airy fashion that the Government should take control of external exchanges. The only way in which we could do that would be by taking possession at the point of shipment of exportable goods, and prohibiting their export except under licence from the Government, and on an understanding that the money received for them would be placed to the Government’s account in London. The only other way would be to commandeer the goods here, sell them abroad, and with the proceeds discharge our national obligations in London, handing the balance to the banks to meet any other obligations that might exist. Such a course would be infinitely more drastic than that now proposed. The possibility of taking control of external exchanges was not ignored by the Government. Consideration was given to a whole series of expedients which might be adopted as a last desperate resource. The present proposal was thought to be the least disturbing way in which we could apply a corrective to bring about the result we hope to achieve. The right honorable member for Cowper (Dr. Earle Page) attempted to create the impression that the Government’s proposal reeks of party prejudice, and that it will result in a great economic calamity to Australia.

Mr Archdale Parkhill:

– He said the latter, not the former.

Mr THEODORE:

– I am not trying to misrepresent the right honorable gentleman. I am not suggesting that he was unfair ; but I think that his attitude was that he felt the whole proposal to be wrong; that the Government was acting foolishly as a result of party bias, or something like that. I am not trying to put words into his mouth, but I am drawing what I think are fair inferences from his remarks.

Mr Archdale Parkhill:

– The Minister is misconstruing what the right honorable gentleman said.

Mr THEODORE:

– The right honorable member for Cowper made a full survey of the Government’s proposals, and suggested how they might be modified. He pointed out certain difficulties which might arise from the application of the prohibitive provisions in the schedule. At any rate, he acknowledged the immediate necessity for taking some action ; but he would not allow that the action which the Government proposes to take was necessary.

Dr Earle Page:

– I rise to a point of order. The Treasurer’s statement is absolutely incorrect and is offensive to me. He has attributed statements to me which I did not make.

The CHAIRMAN (Mr D C McGrath:
BALLAARAT, VICTORIA

– I ask the Treasurer to withdraw the remarks complained of.

Mr THEODORE:

– If I have said anything which misrepresents the right honorable member, I withdraw it. There should not be wrangling on this issue, and I certainly do not want to begin it This matter was considered first by a sub-committee of the Cabinet specially appointed to deal with it, and finally by the whole Cabinet. The Government was impelled to take action as a result of representations by the Loan Council, and finally, at a conference of bankers held in Canberra, it was urged that some steps should be taken, in addition to what was being done by the banks, to correct the exchange position. That is the history of the thing. The Loan Council first came up against the financial difficulty after an examination of the over-draft position in London in which all Australian Governments, State and Commonwealth were concerned. The examination of commitments up to next June, and also for the latter part of the calendar year, together with other commitments which obliged Australia to have funds in London, revealed such a condition of affairs that the Loan Council, taking into account the sources from which funds could be obtained in London, became alarmed as to what might happen. We knew that we could not approach the London market for money unless we were prepared to pay calamitous rates of interest. The council was informed by its advisers in Great Britain that we could not expect to obtain money on the London market on reasonable terms for many months to come. In the meantime enormous claims were being made upon government funds in London. There was a large deficiency at the beginning of the financial year, and heavy overdrafts in London in connexion with governmental and private accounts.

Money was also necessary to meet the interest on governmental accommodation in London, and the position generally was critical. The banks were the first to recognize the impending difficulty, and their representatives discussed with the Government the course which should be adopted to correct it. An examination which was made from month to month in connexion with Australia’s trade disclosed that the position was becoming worse. In the first month of the financial year the excess of imports over exports was profound. If we take the figures for the eight months up to the end of February last, we find that the imports of merchandise, exclusive of specie and bullion, were valued at £96,447,000, and the exports at £64.577,000. On merchandise alone the deficiency was £31,870,000.

Mr Gullett:

– The reduced price of wool was a factor.

Mr THEODORE:

– The position was not improving, but was gradually becoming worse. The banks were alarmed. They had to meet the demands which were being made in London on behalf of clients in Australia, and, in addition, were endeavouring to provide the Governments with money to meet their commitments in that market. As the result of a discussion between the Loan Council and representatives of the banks, and subsequently between the representatives of the Government and the banks, the banks decided to restrict exchanges as far as practicable, and in that way endeavour to restrict importations into Australia. But the representatives of the banks in conference acknowledged that’ they could not provide a complete corrective, and suggested that the Government should take action to restrict imports.

Mr Archdale Parkhill:

– As drastic as this?

Mr THEODORE:

– The principle of the scheme was discussed with the banks, but not the details. We asked the representatives of the banks if they had any suggestion to make, particularly with respect to a complete prohibition of certain imports, or whether they could submit any other proposal for the consideration of the Government. They said that so far as possible it would be wise to avoid placing a complete embargo upon any imports, and suggested that the Government should confer with the members of the Tariff Board. The banks contended that it was preferable to confer with the Tariff Board than with any section of commercial men, who might be directly or indirectly concerned with certain imports or particular industries, and thus biased in any advice they might give. That is what has been done. The Government has had the advice of the Tariff Board, not only in connexion with its general proposals, but in relation to every item included in the various schedules. For the information of honorable members, I produce the following table showing the imports into Australia and the exports of merchandise and bullion : -

*L* also submit a- table, which may be useful in connexion with the subsequent discussion, giving the balance of trade from the 1st July, 1914, to the 30th June, 1928. It is as follows :- The table takes into account imports and exports of merchandise, specie and bullion, the figures in relation to the payment of interest overseas, the credits placed to Australia as a result of overseas borrowing, the result of B.A.W.R.A. dividends and other factors. These tables show that up to the end of the last financial year the accumulated deficiency in London was £49,400,000. The right honorable member for Cowper **(Dr.** Earle Page) stressed the possibility of the action which the Government is taking resulting in higher prices being charged for commodities, and a consequent increase in the cost of living. {: .speaker-C7E} ##### Dr Earle Page: -- And an increase in the cost of production. {: .speaker-KVS} ##### Mr THEODORE: -- That and other aspects of the matter can be debated later, and if it, can be shown that the Government's proposals will have the effect of adding to the cost of production, or seriously affecting the cost of living, action can be taken to eliminate any item the retention of which would have that effect. Generally the schedules comprise luxuries or non-essential articles or commodities which are already being manufactured in Australia in the quantities required. If the articles included in the schedules are nonessential the cost of production or the cost of living will not be in any way affected. When the Government's proposals are considered in detail we can see if there is anything in the contention of the. right honorable member for Cowper. If there are any indispensable commodities which in consequence of the adoption of these schedules will be obtainable only at higher prices they can be eliminated. Personally, I do not think that there are any. Most of the items are non-essential to Australian life and Australian industry. I do not wish to encroach upon the time of other honorable members, who, at this juncture, will not be able- to discuss the subject at great length, but I wished particularly to refer to our financial position in London, and the difficulty under present circumstances of approaching the overseas money market, which may not improve for perhaps many months. It is absolutely essential that drastic action should be taken to improve the financial situation, and the proposal which the Government has made is one which has the approval of the Tariff Board and the banks. {: #subdebate-20-0-s8 .speaker-KZO} ##### Mr LATHAM:
Kooyong .- The action proposed to be taken by the Government is of profound significance and of far-reaching importance. The object which the Government has in view is one which we must seek to attain. While the position to which the Treasurer **(Mr. Theodore)** has just referred, with respect to the difficulties of meeting payments in London as a result of our adverse trade balance, is acute; and must be faced, I feel much anxiety and concern as to the proposed method of dealing with it. Although these proposals are in the nature of a temporary expedient, as was made clear by the Prime Minister **(Mr. Scullin),** I feel that there is a very real danger that strong vested interests may develop, and that the embargo and increased duties which are being imposed may be difficult to remove. It is very difficult to suggest a method of meeting the. situation, unless it is by imposing a time limit. The Government could definitely announce that it is not proposed to continue the operation of this scheme beyond the necessities of the situation, and that for the present it is to remain in operation for a term of, say, six or twelve months. That would leave it open to Parliament and the Government to consider later whether the difficulties which now confront us still existed. If that course were taken, it would be known that these proposals are of a temporary nature, and would prevent the creation of any vested rights. There is another aspect of the matter to which only passing reference has been made. The Prime Minister has said that he hopes and, indeed, anticipates that, as a result of these tariff proposals, and of those which have previously been submitted, the Government will be able to reduce importations by the value of £40,000,000. According to the figures published on page 688 of the *Overseas Trade Bulletin,* No. 26, which has been made available to-day, the importations for the year 1929 were valued at £143,647,881, of which £40,000,000 is more than one-quarter. The customs revenue for 1928-29, according to the same publication, was £29,422,200. Therefore, the drop in revenue would apparently be in the region of £8,000,000. In this connexion it is interesting to note that the income taxation of the Commonwealth, with a super tax varying from 10 per cent. to 20 per cent. is estimated by the Treasurer to produce this year £10,585,000, but if it should be necessary to obtain by way of direct taxation the amount which might reasonably be anticipated to be lost in the customs revenue, as a result of the complete tariff proposals of the Government, there would have to be an increase of 80 per cent. in the present income tax. I ask honorable members to . consider the effect of that upon employment in Australia. If honorable members examine the incidence of Commonwealth and State death duties in Australia, they will find that they are already about the highest in the world. {: .speaker-F4Q} ##### Mr Scullin: -- The honorable member is basing his argument on the possibility of. this measure affecting imports to the value of £40,000,000. What I said was that the total value of imports likely to be affected by it would be £19,000,000, and that it was estimated that from £10,000,000 to £12,000,000 worth would be excluded. I then went on to say that the effect of this legislation in conjunction with the bank restrictions, and a drop in exports would bring about a total reduction of £40,000,000. {: .speaker-KZO} ##### Mr LATHAM: -- That is what I understood. The point I make is that the reduction of imports will cause a diminution in revenue of about £8,000,000. {: .speaker-F4Q} ##### Mr Scullin: -- That is so. {: .speaker-KZO} ##### Mr LATHAM: -- If that loss of revenue has to be made up by an increase in the income tax, that increase will amount to 80 per cent., and I do not think honorable members would contemplate that with any degree of satisfaction. It would certainly aggravate unemployment in a most alarming manner. It is the aim of the Government to reduce imports and increase exports, and its present proposal will certainly lead to a reduction of imports, but I am sure it will be quite impossible to increase exports unless, as the Deputy Leader of the Opposition **(Mr. Gullett)** has said, there is that reduction in the costs of production which is the fundamental need of Australia to-day. In 1928-29 the value of Australian exports was £141,758,233 made up chiefly of the following: - We are all aware that the price now realized for wool is below the cost of production. **Senator Guthrie,** well known as a leading expert in regard to the wool industry, was dealing with this subject on Tuesday. I quote the following -from the Melbourne press of yesterday : - >Interesting figures were quoted by **Senator Guthrie** in advocating a campaign for the more extensive use of wool. He said that for the year ended 30th June last Australia produced one-third of the wool of the world, and more than half the fine wool. For the last *five* years sheep had been responsible for over r>0 per cent, of the total exports of Australia. The average price of wool in Australia last year was 16£d., against lOd. this year. The slump in price and the poor yield meant a loss in one year of £35,000,000. The cost of production had increased enormously. The price of wheat is also in many cases below the cost of production, and when I say " in- many cases," I am referring to the fact that the cost of production varies according to the district in which the wheat is grown and because of other considerations. If the cost of the production of wheat and wool is greater than the market price for those commodities, surely it is plain that no restriction of imports in itself can deal with the situation, and that it is an inescapable necessity to bring about a reduction of costs. Yesterday, in Sydney, I heard **Mr. Bavin,** the Premier of New South Wales, comparing the cost of articles, and the recent progress made in Australia, with the cost of articles and the progress made in other more or less comparable countries, and I propose to quote what he said, though I have not had an opportunity of verifying his figures. He said - >Look, for a moment, at the comparative prices of those commodities which enter mostly into the maintenance of our industries. Coal, which is the basis pf them all, was in 1013, 7s. 3d. at the pit-head- I admit that I thought that the price was about lis. 4d. at that time- to-day, it is 17s. Cd., as against the corresponding price of 12s. lOd. in Great Britain, and 8s. 7d. in the United States. In the United States the pit-head cost of coal has increased by 63 per cent, since 1913; in Now South Wales it has increased by 138 per cent. The freight on coal is equally excessive; it costs nearly three times as much to carry coal from Newcastle to Melbourne as it does to carry it similar distances in Great Britain and in the United States. Pig iron is 59 per cent, higher in Australia than in Great Britain, and 52 per cent, higher than in the United States. Steel rails are 39 per cent, higher in Australia than in Great Britain, and 32 per cent, higher than in the United States. I interpose at this point to say that as an Australian, I am prepared to pay more for some of these articles because there are certain advantages which make it worth while for Australians to do so. But I am sure honorable members will find this list most impressive. **Mr. Bavin's** speech continues - >Steel joists and angles are over 50 per cent, higher than in Great Britain, and nearly 40 per cent, higher than in the United States. Nails are 108 per cent, higher than in Great Britain and 83 per 'cent, higher than in the United States. Galvanized iron is 105 per cent, higher than the British price, and 05 per cent, higher than the United States price when the bounty is added. Cement is 74 per cent, higher than in Great Britain, and 36 per cent, higher than in the United States. A recently published memorandum by the Imperial Economic Committee shows clearly that we are rapidly falling back in the race. Whereas Canada has increased her export trade since 1913 by more than 100 per cent., and New Zealand by 45 per cent., Australia's increase is only 10 per cent., and this is mainly attributable to the high prices for wool which we have had during the last few years, but which we have no longer. The last sentence conveys a warning to all, because if Canada has increased its trade since 1913 by more than 100 per cent., and New1 Zealand its trade by 45 per cent., whereas Australia's increase has not exceeded 10 per cent., it is clear that we must re-examine the economic position of Australian industries. **Mr. Bavin** then proceeded to speak about the effect which the dual arbitration system has had in bringing about this result, but I do not propose to touch upon that subject at the moment. I have called attention to the figures given by **Mr. Bavin** for the purpose of making onepoint only. Of course, there are many other aspects of this matter upon which I should like to speak, but I understand that other honorable members would also like an opportunity to speak. It appears to me that it is absolutely essential that the costs of production in Australia should be reduced. If we can bring about that we shall all gain. {: .speaker-JPV} ##### Mr Blakeley: -- How does the honorable member suggest that it can be brought about? {: .speaker-KZO} ##### Mr LATHAM: -- In my speech on the ministerial statement I made some definite suggestions in that direction, to which I refer the honorable member. We cannot go on without a reduction in the costs of production, unless by a miracle there is a rise in the price of wool and wheat.I agree that we must do without some luxuries, and I have no criticism to offer in regard to some restriction on the importation of luxuries, although I regret the suffering and distress which even that must bring about to a considerable extent in Australia. A restriction of imports, however, will not solve the real problem. It may increase costs of production. It may possibly be a contribution towards its solution, but nothing more. Later on, we shall be dealing with the details of the Government's proposals, and I reserve my observations upon the particular proposals made; but in the meantime I conclude by saying that, unless there is a reduction in the costs of production, the measure the Government is taking will be of no avail. {: #subdebate-20-0-s9 .speaker-KE4} ##### Mr KEANE:
Bendigo -- I congratulate the Prime Minister upon the magnificent speech he made in introducing this measure. It is quite clear that we are facing a crisis, and that something has to be done immediately and effectively to rectify our financial position in England and in Australia. I am gratified to hear the expressions of opinion from our friends opposite, indicating that they are viewing the position in a broad light, though perhaps a somewhat different one from ours. While a discus sion in this chamber on our financial difficulties is extremely interesting and relevant, I think the problem ought to be considered from the angle from which hundreds of thousands of people outside will view it. I am, therefore, pleased to think that the Government's proposals will not impose the hardships predicted by honorable members opposite. An importer ordinarily employs a small staff. Those who are engaged in the distribution of the goods he handles will be readily absorbed by other employers. Australia has been importing articles that could be made here, and if they are made here the employment afforded will more than counterbalance any unemployment that may be brought about by this legislation. I believe that the Government's selection of the items to which the prohibition should apply could be well defended in any part of Australia. The importation of unnecessary luxuries has been one of the most prolific causes of the unemployment that is rampant throughout the Commonwealth. If the action of the Government docs not provide the results hoped for, we shall have the satisfaction of knowing that the Ministry did all that was in its power to avert the most serious consequences of the present crisis. I believe that the proposal will be approved by the people generally. The Government has had the courage to do something of a practical nature. I deprecate the repetition by the Opposition of the platitude that the costs of production must be reduced. The only burdens that should be increased, apparently, are those of the workers. Why should there not be less rent charged and less profit made by the employers? {: .speaker-KXT} ##### Mr Paterson: -- Nobody suggested that this sacrifice should be confined to one class. {: .speaker-KE4} ##### Mr KEANE: -- I am afraid that only one class would gain by a reduction in the costs of production. In 1914 a great crisis was brought about by the outbreak of war. On that occasion Australia had no difficulty in raising within its own boundaries the sum of £343,000,000; it did not have to go to the United States of America or Great Britain for that money. The resources of the whole nation were marshalled to provide funds for war purposes. Individuals came forward with their wealth to the extent of hundreds of thousands of pounds for the provision of relief funds ; but, on the present occasion, when we are faced with a truly national crisis that affects the whole community, there is no such suggestion of assistance from the wealthy classes. The Government is taking one step towards rectifying a position in Australia that, after all, more seriously affects our unemployed workers than any other section, whether they be public servants, primary producers or employers. The slogan of every good Australian should be : " Work or sustenance for every decent man who is willing to work." I am delighted that the Government has displayed its courage on this occasion. The number of men who will be displaced from employment in importing establishments will be infinitesimal compared with those who will receive employment in this country in the manufacture, of goods previously purchased abroad. Articles such as ale, wine, felts, metal goods, machinery, glassware, jugs, jewellery and leather goods can be made in Australia by men as skilled in their work as those to be found in any part of the world ; but, at the moment, owing to the foolish policy adopted in the past, they are out of employment, and the position of this country is daily becoming worse. A reduction ;n the imports of luxuries would inflict no hardship on anybody. The Government has handled this situation in a. businesslike way. First of all it conferred with the leaders of the banking institutions at the seat of government in Canberra. It was realized that on the financial position hinges the well-being of the people. Something had to be done, and it was something that the banks could not do. It was properly recognized that on the Government fell the responsibility of dealing with the situation. There was a consultation with the experienced officers of the Customs Department, the matter was discussed in Cabinet, and a frank proposal is now submitted to this chamber. If the Government continues to conduct the affairs of the Commonwealth in that businesslike way, I have no doubt that, at a very early date, the present position will be relieved to some extent. {: #subdebate-20-0-s10 .speaker-F4U} ##### Mr FORDE:
Acting Minister for Trade and Customs · Capricornia · ALP -- The Government will be glad to hear suggestions from honorable members opposite if they are not in agreement with, the action that is being taken. *No* honorable member need fear that his views will be disregarded, because the Government looks upon the problem as one of transcendent importance to Australia- and one on which there should be no party political feeling whatever. The Government realizes the gravity of the course it is pursuing. It did not hastily come to its decision. It did not, as one honorable member suggested, take this step because it looked upon certain importers ms enemies of the country. No such thought entered the minds of Ministers. They recognize that importers "have a right, to fair consideration; but the Government should not hesitate to take this action simply because it may interfere with the profits of certain individuals engaged in importing. As a medical nian, the right honorable member for Cowper **(Dr. Earle Page)** knows that, sometimes he has to prescribe medicine which is unpalatable to his patients. In this case, the Government *has* prescribed a diet, which is far from pleasant. It has been forced to take steps which, in other circumstances, would be drastic: The advice of bankers, the experts of the Customs department, the members of the Tariff Board, and others made it evident that the rationing of credits overseas by the banks' was not sufficient, and that more stringent action was necessary. The duration of the prohibition or of the rationing of imports is a matter for the Government to determine as a result of experience. While it will listen to any representations by honorable members opposite as to when the prohibition or increased duties should be taken off, the Government must be the judge of these matters, and accept the responsibility for its action. {: .speaker-JOG} ##### Mr Bayley: -- Judging by the way in which the Minister has imposed these duties it is evident that he will be loath to take them off. {: .speaker-F4U} ##### Mr FORDE: -- Should the honorable member for Oxley **(Mr. Bayley)** have any representations to make to the Government, he can be assured of a sympathetic hearing. In July, 1929, Australia had to make arrangements for meeting indebtedness in London to the extent of £40,000,000. Since that time its commitments have increased . to between £60,000,000 and £70,000,000. Bankers and other financial authorities realize the necessity for doing something. The Leader of the Opposition **(Mr. Latham)** suggested that the Government's proposals will affect goods to the value of approximately £40,000,000 per annum. That is not so. The value of articles which will be totally prohibited is estimated at £4,183,659 per annum, representing a duty of £1,556,489. Partially prohibited goods represent a further £1,507,041, the duty on which would be £1,728,852. The two lastmentioned amounts are based on one-half of the imports for 1928-29. Furthermore the increased duties amounting to 50 per cent. on existing ratesaffect goods to the value of £13,597,728, on which an amount of £5,432,631 would be paid if they came into the country, but it is estimated that there will be a falling off in revenue on these goods amounting to £1,300,000 making the total falling off in duties as a result of this action of approximately £4,100,000. The imposition of these higher duties will probably keep out of Australia, goods valued at £10,000,000 per annum. That, in itself, would not balance the ledger, seeing that for the last eight months of the current financial year the excess of imports over exports was nearly £32,000,000. It is hoped that the action of the Government in restricting imports, together with the rationing of credits in London by the banks, and an expansion of our exports will tend to solve the problem confronting Australia to-day. Some honorable members have expressed the fear that the higher duties now imposed will affect all the items in the tariff schedule submitted to Parliament in November last. I point out that that tariff schedule contained approximately 420 items. The schedule before us affects only 52 of them. In addition, the importation of goods under 77 items will be prohibited, excepting with the permission of the Minister, and eleven other items will be affected by the partial prohibition. Five of those eleven items will also be subject to the 50 per cent. surcharge under this schedule. Only 145 of the 420 items in the previous tariff schedule are affected by these proposals. The step taken by the Government is, therefore, not so drastic as has been suggested. The action of the Government in this instance is not without precedent, for, on the 30th August, 1917, the Hughes Government caused a proclamation to be issued prohibiting the importation of ale and other beer, porter, cider, and spirituous perry, in bulk or in bottle; potable spirits; perfumed spirits and bay rum; biscuits; confectionery; eggs, in shell or otherwise; fur apparel; perfumery; jewellery, imitation jewellery, and imitation precious stones; and bodies for motor vehicles, whether imported separately or forming part of a complete vehicle. That prohibition continued for nearly three years. Other countries have in times of financial stress adopted measures to restrict imports. Since the Great War France has imposed a number of such restrictions, and still has in operation a super-tax on luxury items. Even the United Kingdom completely prohibited the importation of certain articles for two or three years. The fall in the price of wool and wheat means that Australia's income for those sources this year will be about £31,000,000 less than last year. If to that amount is added the £20,000,000 by which loan money will be reduced, it will be seen that the money in circulation in Australia this year will be approximately £51,000,000 less than in normal times. The desperate nature of the situation rendered imperative some restriction on imports. During the last ten years our total adverse trade balances amounted to about £90,000,000. The Government has acted courageously in bringing forward these proposals. Had it endeavoured to throw the responsibility on others it would have acted the part of a coward. I feel sure that the people of Australia will applaud its action. Progress reported. *Sitting suspended from 6.15 to8 p.m.* {: .page-start } page 850 {:#debate-21} ### CONSTITUTION ALTERATION (POWER OF AMENDMENT) BILL {:#subdebate-21-0} #### Second Reading Debate resumed from 2nd April(vide page 813) on motion by **Mr. Scullin** - >That the bill be now read a second time. {: #subdebate-21-0-s0 .speaker-KFS} ##### Mr GULLETT:
Henty .-I approach with very much interest and concern these two bills to amend the Constitution. If the Government is really in earnest about these amendments then, to me, the coupling of the two measures is a piece of almost unbelievable political folly. If it is not in earnest, which I venture strongly to suspect, these measures are deserving of a much harsher description. ' Before dealing with the bills themselves, I should like to refer to the extraordinary circumstances attending their presentation to this House. The Government claims a general mandate from the people at the last election. It claims that it is here with a mandate for the whole of its programme. One might assume, therefore, that it claims a mandate for those sections of its programme upon which it was particularly insistent both before and during the last election campaign. What were the subjects most persistently laboured by honorable members opposite in the last Parliament and during the last election? As I remember them they were, work for the unemployed, the necessity for rigid economy, and the necessity for an immediately improved industrial relationship between employer and employee. During the many years when honorable members opposite were seated in Opposition in this chamber they abused the Bruce-Page Government for its alleged sins and omissions with regard to those three matters. Who does, not remember their fierce condemnation of the alleged callousness of honorable members sitting in Opposition to-day, towards the unemployed of this country? Who does not remember the persistent statement, always vigorously hammered home, that the Bruce-Page Government , could, if it wished, find money in abundance for the relief of the unemployed of Australia? We were charged again and again with being indifferent on the subject. It was the same with regard to the alleged Government extravagance of that time, and the imperfections of Australia's industrial machinery. Now the whole situation is changed. The Bruce-Page Government has gone. Labour is in power. Its majority is great. Its opportunity is boundless. The hour has struck. The promises of the Labour party on these three great subjects are about to be made good ! We are now to have work for all the workless, strict economy in all things and industrial machinery that will bring sweet harmony to the disordered industrial world! Australia awaits almost breathlessly for this great fulfilment. And now the Government comes to light with miracle-working legislative and administrative proposals which are to do so much. What are these wonderful proposals now that we have them ? What is this great working men's Government going to do for the unemployed of Australia? What is it going to do in the interests of economy? How does it propose to improve our industrial machinery? Where is the fulfilment of all these loud promises ? What at long last comes out of all this complaint and labour? A proposal to amend the Constitution! This old hack which has been tried again and again over the political course, and has invariably fallen by the way, is once more trotted out of the stable. It is brought out as the one hope for the Government, the one hope for the workers; for those who believe in economy, and for those who want an improved industrial system. In brief, the Prime Minister comes along and says, "We would, if we could; but we cannot. The Constitution as it stands will not permit us to do so ". For once in a while, the new broom does not sweep cleanly. On the contrary, this marvellous new workman begins by quarelling with his tools. Let me take the position as it has developed since this Government came into power. There are far more unemployed in Australia now than there were when it assumed office. I do not say that the Government is responsible for that, but I do say that it has absolutely failed to relieve the distressful position. All that it can produce is this impotent legal constitutional palliative. "Amend the Constitution," it says, " amend it in some way, some how, and at some time, and there may be another job for some poor, unfortunate, unemployed individual ". After all his talk about economy, the new Treasurer immediately increased taxation to the extent of some £2,000,000, and is even now heading fast towards a deficit which promises to be substantially greater than £2,000,000. Despite the honorable gentleman's gallant promises during the election that the cool-mines would be opened in two weeks, we still have, seven months after Labour's accession to office, a continuance of that deplorable strike, which is partially blighting all Australian industries. The one grand remedy advanced is an amendment of the Constitution ! The proposed amendment will not be carried, but if it were, would this precious thing bring in a year a job to a single man in Australia? After having expounded, its great objectives to the people, after its plausible plea that it represented progress, the Labour Government has nothing better to offer than this impotent measure, which has occupied the time of Parliament almost since it met this year, and will continue to do so until Easter and after. This wonderful panacea will not give one job to one Australian worker in a year - for the simple reason that it. cannot. Instead of effecting economy, it will devour £100,000 of the taxpayers' money. That, up to dato, is the Government's greatest contribution to economy. There is no money in the Treasury to-day for the unemployed, for housing, or for any other social needs, despite the long list of promises made by the Labour party over a number of years. Yet £100,000 can be found for a referendum on this and its associate bill. There may be a third bill, which will make the position even more hopeless. Honorable members know full well that these measures have not the ghost of a chance of success, yet the Government insists upon wasting this £100,000 in submitting them to a referendum. I should like to say a word upon the extraordinary manner in which the bills were presented to the House by the Prime Minister. I put it to honorable members - and I am confident that if they could dissociate themselves from party politics they would agree with me - that the first bill, which proposes to give this Parliament the power to amend the Constitution, and so to make it the plaything of party politics, has not a ghost of a chance of being endorsed by the people. Perhaps had the second bill been brought forward alone it might have had a sporting chance of success. Despite those facts, the right honorable the Prime Minister devoted one hour of his speech to the forlorn hope - the first measure - while to the second measure, which ostensibly has some chance, he gave but one minute; a sentence, containing 34 words, and promised that he would j speak on it again in committee. {: .speaker-JSC} ##### Mr Brennan: -- The right honorable gentleman said- {: .speaker-KFS} ##### Mr GULLETT: -- The honorable member for Batman **(Mr. Brennan)** has had his hour, and I ask that he will give me my opportunity. The Prime Minister's remarkable discrimination in the matter of attention and time to these bills makes the whole business, to me, strongly suspect. I shall not say that the Government is not sincere because I know that if I did, you, **Mr. Speaker,** would not tolerate the statement, but I will say that an honorable member would be fully justified if he came to the conclusion that the Government does not want these measures to be carried. If the Government had really desired an extension of the industrial powers of the Commonwealth, or to improve the Commonwealth Arbitration Court, it would have brought down by itself the measure relating to that subject and not have associated it with the other forlorn hope. It is perfectly obvious te me that the second measure will be judged by the company that it keeps, and rejected by the people of Australia. The Government appears to me very suspect as to whether or not it is merely fulfiling an unfortunate pledge. Something had to be done. It is asking therefore for these extended industrial powers, and hoping with a deep prayer in its heart that nothing so difficult, so troublesome and embarrassing as these powers, will be granted to it by the people. And yet it proposes to expend £100,000 upon the venture ! Practically everything that could be said against the unification proposal has already been said by honorable members on this side of the House. If the Government intends to bring about unification - and various speaker's on the Government side, including the honorable member for Reid **(Mr. Coleman)** and the Treasurer **(Mr. Theodore)** left no doubt in our minds that unification is its ultimate object; - I wish that it had been a little more candid, a little more courageous, and had asked straight out for it. I am sorry that it. has attempted to gull the people by putting forward this measure. True it is not asking for full powers; it is not asking that the people should sanction the change of this federated constitution to one based on the principle of unification, but it is asking that the people should give it an option over all of the powers of the States. I believe that the people are not being squarely dealt with. Ministerial members know quite well that if they asked for all these powers they would not get them. Therefore, they are seeking in an underhand, sneaking way, approaching the subject in the shadows and along the byways, to obtain an option over these powers, to be exercised as required to suit party interest and advantage. The Constitution provides that any, or all, of the powers reserved to the States may be transferred to the Commonwealth, but - and this is all-important - each transfer must be specifically sanctioned by the people. They can sanction the transfer of a lot of powers at the same time. but each one must be clearly defined. The Constitution does not intend that this Parliament should take an option, holus bolus, over all the powers, such option to be exercised at the will of a particular party. The supporters of the Government adopt towards the framers of the Constitution a superior and condescending attitude. In their speeches in this House and on the public platform they represent them as benighted, short-sighted, and fossilized old gentlemen of the early colonial days, who embarked on the business of Constitution-making with very little knowledge of their jobs and no thought of the future. By inference, the Prime Minister **(Mr. Scullin),** the Attorney-General **(Mr. Brennan)** and the right honorable member for North Sydney **(Mr. Hughes)** depict them as inferior to themselves in vision, enlightenment, constitutional lore and knowledge of Australian conditions and requirements. From that view I dissent. The framers of the Constitution were a highly capable body of men - the one generation of Australian parliamentarians who deserve the name of statesmen. All of them were well experienced in colonial government, they had vision, and they built, not merely for the generation in which they lived, but for a long time ahead, and, in my opinion, built very wisely. The Constitution, the resultof many conventions and the study of constitutions "of all parts of the world, was endorsed by the people of the Commonwealth, and is not therefore, as honorable members opposite suggest, merely the creation of a few colonial politicians. The supporters of the Government say, " That is all very well, but that endorsement was given 30 years ago by people most of whom have since passed away." Honorable members overlook the fact that, although the Constitution was written 30 years ago, it has since been endorsed again and again by the people. It was endorsed only four years ago, when the people were approached with questions similar in many respects to those which the Government .is now proposing, to grant to this Parliament increased powers in relation to industry, trade, and commerce. Therefore, honorable members opposite are quarrelling not with a Constitution endorsed 30 years ago by Australians who are now dead and gone, but with an instrument endorsed again and again in recent years by an overwhelming majority of the same electors who will vote at the next referendum. Thus, it is futile for members who favour this bill to sneer at the founders of the Constitution, and declare that the work of 30 years ago is obsolete, and for that reason alone is due for an overhaul. I propose to show what could, and very likely would, happen, even in the life of this Parliament, if the people granted to it the right to amend the Constitution at will. The Treasurer, yesterday, defended this proposal in a very clever speech ; I have never heard a better case made out for a thoroughly rotten proposal. He did with his case all that could be done with it, but even then left it in a fairly hopeless condition. The honorable gentleman said, again and again, that the power of amendment would not be used promiscuously by any party in this Parliament, and declared that no power would be taken over by the Commonwealth from the States, unless sanctioned by the people at a general election. What is that assurance worth? If no action can be taken without a mandate from the people, the whole proposal must fail, because in those circumstances this Parliament will not have been given any authority by the people to amend the Constitution. If a mandate of the people is to continue to be necessary before the Constitution can be tampered with, we need not submit the Power of Amendment Bill to the people, because Parliament can seek a mandate at any time by means of the referendum. That statement was characteristic of the backing and filling of the Treasurer **(Mr. Theodore)** during his speech yesterday. I join issue with the honorable gentleman on that statement, and I ask him, by way of illustration, whether, if this Parliament were given power to amend the Constitution, the present Government would not be subjected to strong pressure to take over from the States the whole system of public instruction. I believe that, with the present Government in power, education would probably be taken over from the States during the life of the present Parliament. {: .speaker-KVS} ##### Mr Theodore: -- There is no warrant for that. {: .speaker-KFS} ##### Mr GULLETT: -- There is the strongest warrant. Again, what would be the attitude of the Government towards the police? During the notorious timber strike in New South Wales last year the police were employed by the State Government to protect from the "basher gangs " timber-workers who continued at their jobs under the award of the court. The Treasurer attended a meeting at the Sydney Town Hall to protest against the action of the police, and in the course of his speech -on that occasion urged the workers to get busy and return a Labour Government, so that the police could be controlled in disputes of. that kind. I recall this instance, not in any spirit of personal antagonism to the Treasurer, but in order to ask the House whether if, at that time, this Parliament had had power to take over the police from the States, the Treasurer would not have been urged by the trade unionists to do so, and ensure that they proved more amenable in future. Pressure would come from a thousand quarters at different times to serve particular interests; again and again it would be successful, and the Constitution would be amended at the dictates of unscrupulous politicians and all sorts of unworthy interests. I cite another illustration. Will any honorable member say that during the recent troubles in connexion with the Rothbury coal-mine, this i Government would not have been urged to take over the police from the States if the Commonwealth had the power to do so? It would have been almost compelled to take them over, and discipline them according to the desires of militant trade unionists. The coal-mining industry suggests another example of what use could be made by the party in office of the power to amend the" Constitution. When the Treasurer **(Mr. Theodore)** is intent on winning an election he does not boggle at a promise or two. The promises that he made during the last election are proof of that. Had he been asked whether the Labour party, if successful, would nationalize the coal-mines in order to re-open them, he would have plumped for nationalization every time, and committed his party to the necessary amendment of the Constitution. {: .speaker-JZK} ##### Mr Coleman: -- If the people had endorsed it, what would be wrong in taking that course? {: .speaker-KFS} ##### Mr GULLETT: -- I am glad that the honorable member has raised that point. The Labour party would not have won the election on a mere incidental promise by its deputy leader. Other honorable members supporting the Government may not have been associated with that undertaking. I do not think many of them subscribed to the Treasurer's pledge to re-open the mines in a fortnight. The honorable member for Reid **(Mr. Coleman)** has sufficient knowledge of the Constitution to dissent from the election statement of the Treasurer that this Parliament has sufficient powers to compel the mines to be re-opened. But had the honorable gentleman given a promise to nationalize the mines, pressure would have been, brought to bear on the Government to honour the pledge, and this Parliament would have been committed to that course. Let us discuss this question on broader grounds. Assume that a party comes into power in this Parliament elected on a particular cry. The majority of elections are not won on a general platform. The Treasurer knows that. They are won on some particular burning special issue of the moment, something that inflames and carries the people. It may be the sin, real or alleged, of the Government, or some particularly popular action of the Opposition or the Government. A party comes into power on an election cry, and invariably claims a general mandate, even in regard to constitutional amendments. When a party wins an election on a particular issue, it should not try to deprive the States of this or that function merely because somewhere in its platform there is a declaration in favour of taking a particular power from the States. That is particularly true of the party opposite, because it does not even frame its own programme. The members of the Labour party are obliged to try to amend the Constitution in accordance with a particular plank in their platform, which has been drafted for them by .an irresponsible body outside. The whole proposal is fantastic and outrageous, and one for which the people of this country will never stand. I If these proposals were carried, [i what would be the effect on this Parliament? Honorable members supporting the Government have made a great deal of capital out of the boards and commissions appointed by the BrucePage Government, but had this Parliament power to take over State functions at will, it would grow at such a rate that within ten years we should have twenty boards and commissions where there is now one. As an alternative to the mulitiplication of boards and commissions, which are so odious to honorable i members opposite, we should at least need to multiply by four times the strength of this House. There would need to be a larger ministry. Capable as are the members occupying the treasury bench at the present time, I cannot imagine them carrying on half or threequarters of the functions of the State. We should need at least twenty or 24 ministers, and the members of this House would require to be some 200 or 300 strong. We would have established in Canberra within a few years an enlarged swollen and ignorant bureaucracy, dabbling in all sorts of little local affairs of which it had no intimate knowledge. We should have established in Canberra a cumbersome institution, for which the people of this country would not stand, and they will express their views in no uncertain way when these proposals go before the country, if ever they do. They are so extraordinary and suspect that I should not be surprised if the Government finally abandons the proposals altogether. I shall now deal briefly with the second bill, which aims to extend the industrial powers of the Commonwealth. The Leader of the Opposition **(Mr. Latham),** in opposing this measure, has been charged with discussing it on narrow party lines. Honorable members behind the Government have asserted and repeated in this Parliament that the present proposal for increased industrial powers is practically four square with the proposals put to the country by the Bruce-Page Government in 1926. I do not think that honorable members opposite really expect the people to believe that. These two proposals have two essential differences - differences so pronounced and fundamental that any one who believed in the 1926 proposals must automatically be opposed to those now before us. There is first the fact beyond question that the intention of the 1926 proposals was to abolish the cumbersome, expensive, blighting, dual system of industrial control. We were to take what amounted to exclusive powers. It is true that we were not to close up State tribunals; but they were to operate as one set of tribunals in reality, federal tribunals. I do not know whether the present Government believes in having one set of industrial tribunals, or whether it would like to do away with the dual system; but it is notorious that honorable members opposite have not the courage to propose to do away with the dual system. I give the Treasurer full credit for the fact that he did not attempt to evade this question as some of his colleagues have done. Yesterday he frankly attempted to justify the dual system. It was a fairly audacious endeavour, but the Treasurer is somewhat noted for his audacity. He ridiculed the idea that it would be possible for a federal tribunal - he did not say why - to go delving and digging into ali the little local concerns of Australian industries, yet he must know that in so far as a federal tribunal deals with any industry, it must get down to the details of that industry. The Treasurer did not contend that the State tribunals should deal with the minor details and the federal court with the major questions; but he endeavoured, somewhat astutely in rather vague language, to- indicate that the State tribunals were necessary to deal with minor industrial affairs. I say frankly to honorable members behind the Government that if they did advocate the abolition of dual control, and attempted to do away with that cumbersome and expensive system in order to substitute for it a simplified single federal control, not one of them would win the pre-selection ballot prior to the next election. The proposal of the Government is to add to the present confusion. The federal court, is to be made larger and wider, hut every little tinpot State tribunal and activity at present in operation is to be continued. Therefore, we are faced with a proposal for an enlarged and more expensive federal court and concurrently, the continuance of every State industrial activity now operating. I say, without any apology for the ^Nationalist party, that we would oppose the bill on that ground alone, but ;it is only one of the two fundamental grounds of difference between the 1926 proposals and those now before us. The other ground is that under the 1926 proposals it was intended that, as far as practicable, this Parliament should keep clear of industrial affairs, and hand over completely to independent tribunals the control of the settlement of industrial disputes. These tribunals were to be independent except that the Commonwealth Parliament would still have been able to lay down conditions as to maximum hours and minimum wages for Australian industry as a whole; but it would not have been able to dabble in the conditions of a particular industry. Under the present proposals this Parliament is to have power to legislate upon the wages, hours, overtime and every little detail of any and every industry in the Commonwealth. I; at least, cannot be charged with inconsistency in not supporting them - particu- Ifr. *Gullett* larly that providing for enlarged industrial powers. It may be remembered by some honorable members of this House that I opposed the 1926 proposals. It is true that I voted for the second reading of the bill, but I broke with the Government and voted, and during the campaign worked, against those proposals when I discovered that Parliament would if the referendum were carried still retain even power to lay down conditions as to maximum hours and minimum wages. Without a change in the Constitution that cannot be done, because of the limited federal powers in industrial affairs. I have observed the working of this Parliament ' as long as any other honorable member has, with the exception of the right honorable member for North Sydney **(Mr. Hughes).** Right down the years, if there has been one futile, heart-breaking subject on which this Parliament has wasted not hours, days and weeks, but years of its best thought and endeavour, it has been the subject of industrial affairs, and as I see it, it has achieved nothing. Australian industry would have been incomparably richer if the settlement of industrial disputes had never been mentioned within the four walls of this Parliament. I opposed the 1926 proposals because I would not be a party to giving to this House an opportunity to extend in any way its power over the industrial life of Australia. That being so, it is fairly easy for me to oppose wholeheartedly a bill which proposes, not only that this Parliament shall alone have power to lay down maximum hours and minimum wages for industry as a whole in Australia, but that it shall have power also to legislate on every detail of every industry in the Commonwealth. I cannot imagine anything more dograding than that cash appeals should be made to the workers of Australia during a federal election campaign. I cannot imagine anything that would prostitute our national life more than for an unscrupulous leader of either political party to go to the workers of Australia and say to them, "Vote for our party and we will give you a 44-hour or a 36-hour week." I cannot imagine anything more dreadful that could happen to our public life than for a particular party to go to the electors and offer them a £5 or £6 minimum wage. That form of corruption must inevitably degrade the public life of this country, and the record of the national Parliament. For thatreason alone I shall use every effort possible to oppose this measure. I should be exceedingly depressed at this moment if I believed that there wasthe slightest possibility of the people approving of this proposal. But as I do not give it even a sporting chance, I look upon these proceedings with a good deal of equanimity. {: #subdebate-21-0-s1 .speaker-JT7} ##### Mr McNEILL:
Wannon .- The important subject with which we are dealing must inevitably affect the wellbeing of every man, woman and child in Australia, and the welfare of the country at large. I join with other honorable members in paying my tribute of respect to those who framed the Australian Constitution. They were big men in the life of this country, and they did the work well with the material at their hand. At that time intercolonial jealousy was very rife, and many conflicting elements had to be overcome. Feeling ran high at the time between the different colonies.With the limited material at their hand the framers of the Constitution could give us only a limited Constitution. At different times after the advent of federation, nearly all the gentlemen who had a hand in the framing of the Constitution expressed the opinion that it should be broadened. We well remember statements to this effect by the late Hon. Alfred Deakin and the late **Mr. Justice** Higgins. Among others who have at different times stressed the necessity for widening our constitutional powers are the right honorable member for North Sydney **(Mr. Hughes),** the Leader of the Opposition **(Mr. Latham),** the Deputy Leader of the Opposition **(Mr. Gullett),** and the ex-Prime Minister of Australia **(Mr. Bruce).** These, and a host of other prominent men in the political life of Australia, have said, in unmistakable language, that our Constitution is narrow and hidebound, and that it should be widened. On each occasion when Constitution alteration proposals have been submitted to this Parliament and to the people, arguments similar to those which we have heard during this debate have been used. We had three very big fights on this subject, in 1911, 1913, and 1926. On each occasion the proposals have been defeated, but in 1926 New South Wales and Queensland, two of the larger States, returned a handsome majority in favour of them. I am, therefore, optimistic enough to believe that on this occasion we shall secure the requisite majority throughout the Commonwealth in favour of both proposals. The framers of the Constitution made it difficult for us to alter their work, for they laid it down that before an alteration may be made it must secure the approval of a majority of the electors in a majority of the States. That requires a very big percentage in favour of an alteration. It would have been much better in my opinion had the Constitution provided that an alteration must be approved by a majority of the voters of the Commonwealth in three States. We should then have had a reasonable opportunity of carrying the proposals of 1911. Had they been approved Australia would be a different country to-day. It is extraordinary that the Leader of the Opposition **(Mr. Latham)** should oppose these proposals, for we well remember that in 1926 he was a wholehearted advocate of increased powers for this Parliament. When **Sir Arthur** Robinson and **Mr. Menzies,** an eminent Victorian barrister, criticized the proposals of the Government of that day, the Leader of the Opposition participated in a vigorous press and platform controversy, and supported the proposals of the Government with some very fine arguments. Now we find him and all the honorable members who sit on the other side of the chamber who have participated in the debate, with the single exception of the right honorable member for North Sydney, opposing both the proposals of this Government. The right honorable member for North Sydney has declared that he is prepared to vote for the industrial powers proposal. I cannot understand how honorable gentlemen, who have taken a leading part in federal politics and who know the limitations of the Constitution, under which we are working, can refuse to support this bill. Where do they intend to lead the people? I do not know of any Constitution in the world which is as limited as ours. This opinion has also been expressed by eminent men who framed the Constitution, andby others who have followed them through the years. They have all agreed that the Constitution is altogether too limited. It is now proposed to ask the people to give this National Parliament more power to deal with all the matters that affect the welfare of Australia. The Deputy Leader of the Opposition **(Mr. Gullett)** made some sweeping statements this evening. He went so far as to say that if the referendum were carried this Government would within a few weeks, or certainly within the life of this Parliament, assume control of the Education Departments of the various States. I cannot think that the honorable member was sincere in making that statement. If he were, I can only bow to the stupendous depth of his innocence. He must know very well that it could not be done. The honorable member also said that if this proposal were carried the Government would be subjected to the dictation of outside parties, and would have to do as it was told. Let me remind the honorable member that the Labour party has been a factor in the political life of Australia for many years. During the régime of the Fisher Government, from 1910 to 1913, some of the best legislation that the world has seen was placed upon the statute-book of this country. That Government refused to accept dictation from any one inside or outside of Parliament. {: .speaker-KZA} ##### Mr West: -- Those acts are monuments to its capacity. {: .speaker-JT7} ##### Mr McNEILL: -- That is so. This Government is just as worthy of confidence as was the Fisher Government. I am sorry that the Deputy Leader of the Opposition is not in the chamber for I desire to place on record some remarks made in respect to him by the ex-Prime Minister **(Mr. Bruce).** I quote the following from *Hansard* of the 22nd November, 1927, page 1681- >The honorable member for Henty **(Mr. Gullett)** gave some very sound advice on the need for curbing our extravagant tendencies. He posed as the apostle of practically no expenditure beyond the most limited amounts. Surely the honorable member has forgotten some of his outbursts of the past! {: .speaker-KFS} ##### Mr Gullett: -i have repented. I have seen the folly of them. {: #subdebate-21-0-s2 .speaker-F4B} ##### Mr BRUCE:
FLINDERS, VICTORIA -- The honorable member must have a grim recollection of what I am about to refer to, because he is already on the stool of repentance - beforeI have uttered a word. Most of us remember a series of articles that the distinguished member wrote and a few of the slogans which he coined. The advice he tendered to Australia was to spend £50,000,000 bravely. When he criticized the budget of 1922, he said that we would never solve the problems of Australia by a cheese-paring system of economy. He outlined a scheme for having 10,000 farms per annum, and in one of his brighter moments said that we would probably do the whole job over a few years for £100,000,000. {: .speaker-KFS} ##### Mr Gullett: -- At that time I thought it would pay. I know now that it would not. {: .speaker-F4B} ##### Mr BRUCE: -- We cannot be expected to take too serious a view of the very spirited criticism uttered by an honorable member who changes his opinions so rapidly. The honorable gentleman reminds me, in his criticism of this bill, of globe-trotters who go from and come to Australia. Many of those who leave here to visit other parts of the world seem unable to find words condemnatory enough of the country which gave them their livelihood. They seem to think it is fashionable to say the most derogatory things respecting Australia that they can think of. The average globe-trotter who comes to Australia, rides from Sydney to Melbourne in a first-class carriage and thinks that he has swept through the whole continent in those few hours and seen everything that there is to see, has the presumption to attempt to tell us, through newspaper interviews and otherwise, how we should run our affairs. We want no advice from these gentlemen, nor from those who go overseas to become the detractorsand calumniators of their own country. These are the men who are continually maligning the manufacturers and working classes of Australia. They never lose an opportunity to say the worst that can be said about them, and because of the harm they do to the prestige of the nation, they should be brought to book. The right honorable member for Cowper **(Dr. Earle Page)** said last evening that he would not support the first proposal, but wouldvote for the second if its adoption meant exclusive and effective control by the Federal Arbitration Court of the trade union movement in Australia. The right honorable gentleman, who was an ardent supporter of the 1926 referendums, said he would consider favorably the first proposal if the Government had come down with a cut and dried scheme for the creation of new States. As all honorable members know, he has been a strong advocate of this policy for many years, and he must be aware of the impossibility of presenting any workable scheme for new States during the few months that this Government has been in office. Because of the many conflicting elements that have to be considered and provided for, I challenge the right honorable member, or anybody else, to formulate a scheme for the creation of new States within a period of two years. I cannot help thinking, therefore, that when he charged this Government with indifference concerning the creation of new States, he was talking with his tongue in his cheek. I agree that an increase in the number of States is desirable, if we are to give effect to the policy of decentralization. New South Wales might, with advantage, be sub-divided into a number of new States, and Queensland, with its long coast line, is admirably adapted for sub-division. Even the little State, which I assist to represent in this chamber, might very well be divided into three States. I know practically every inch of it. If I were asked to define the boundaries of three new States in Victoria, I should run a direct line from Mildura, through Colac, to Port Campbell. All the country west of that line would be the new western State, with ports at Warrnambool, Port Fairy and Portland. Then I should run a line from Mildura to Wodonga and thence to Melbourne. All the country between these two lines would be the central State, with Melbourne, Geelong and Williamstown as their ports. The eastern State would comprise Gippsland, with ports at Westernport, Welshpool, and Melbourne. This sub-division would provide three excellent States, all of which, I believe, could be administered much more cheaply than Victoria is administered to-day. {: #subdebate-21-0-s3 .speaker-JSC} ##### Mr BRENNAN:
ALP -- I presume the honorable member would not advocate the appointments of governors and parliaments for those States? {: .speaker-JT7} ##### Mr McNEILL: -- No. When the people voted for federation fully 75 per cent, of them imagined that the State Parliaments with their costly Upper Houses and State Governments would eventually disappear. Unfortunately they have not. The Deputy Leader of the Opposition **(Mr. Gullett)** has declared that there is no chance of these questions being approved by the' people. I believe that the people are marching forward and that they are looking for a change. I believe they will carry the referendums. According to the honorable member for Warringah **(Mr. Archdale Parkhill)** the adoption of these proposals will be equivalent *vo* a notice to State Parliaments to quit. The honorable member knows that the abolition of State Parliaments will be a gradual process. {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- I do not. {: .speaker-JT7} ##### Mr McNEILL: -- State Parliaments will not disappear until the people are ready for the change. Opponents of the proposals have also urged that, if they are carried, the Constitution will, in time, be torn to shreds and destroyed. If th( people entrust the Parliament with power to alter the Constitution, and if alterations are inimical to the welfare of the nation, the people, who are the masters of the Parliament, will apply the remedy at the first opportunity. But no political party in Australia would be so foolish as to adopt that line of action. {: .speaker-L1C} ##### Mr Lewis: -- Except, perhaps, the Nationalist party. {: .speaker-JT7} ##### Mr McNEILL: -- Evidently the leaders of the Nationalist party were bad judges of pace. Every honorable member, and indeed, all thinking people, realize that there is urgent need for an. alteration of the Constitution, and that whatever may be done, must be done with the approval of the people. Turning, now, to the second proposal, it is claimed by some that if this grant of industrial power is given to the Parliament, the Commonwealth will drift on to the rocks. The people of Australia have declared in no uncertain voice for federal arbitration for the settlement, of industrial disputes. We are asking for increased industrial powers because we have learned from bitter experience that, as constituted, the Arbitration Court cannot function effectively, since its jurisdiction is limited. Constitutional entanglements and rulings of the High Court have interfered with the operation of that tribunal. Some people affect to believe that Australia is a land of strikes, and that industrial disturbances are matters of weekly occurrence. I deny that absolutely. The pastoral industry, one of the largest in Australia, has been carried on under awards of the Arbitration Court for 22 years. During that period there have been only two strikes by members of the Australian "Workers Union, which also is the biggest industrial organization in this country. One of those strikes occurred in Queensland, where a State award operated, and the other strike took place in New South Wales and Victoria. Surely a court that can give to the people of this country 22 years of peaceable conditions in its biggest industry is worth preserving . {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- The Australian Workers Union did not get its awards from the Arbitration Court; they were the result of conferences. {: .speaker-JT7} ##### Mr McNEILL: -- The honorable member has need to refresh his memory. The first award in that industry was given by the late **Mr. Justice** O'Connor in Sydney in 1907 ; the second award was given by the late **Mr. Justice** Higgins in 1911 ; the third award was by **Mr. Justice** Powers in 1922, and the last award was by Chief Judge Dethridge in 1926. {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- They were merely agreements arising out of conferences, and were registered in the court. {: .speaker-JT7} ##### Mr McNEILL: -- I know what I am talking about. The honorable member for Warringah **(Mr. Parkhill)** does not. They were not the outcome of agreements entered into between the parties and registered in the court. They were all awards of the Arbitration Court. If necessary, I can produce them. {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- **Senator Barnes,** the president of the Australian Workers Union, said they were. {: .speaker-JT7} ##### Mr McNEILL: -- The president said nothing of the kind. {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- He made the statement at the Hobart conference. {: .speaker-JT7} ##### Mr McNEILL: -- The honorable member is wrong. The president of the Australian Workers Union may have referred to sectional agreements. Neither President Barnes nor any one else stated that the members of the Australian Workers Union had made any such agreements. I repeat that a court which has been instrumental in stabilizing employment for a quarter of a century in the most important industry in the Commonwealth is worth preserving. The Labour party desires the court to be maintained and its functions extended, so that it may be able to deal with any industrial position that may arise from time to time. Take, for instance, the recent lockout in the coal-mining industry in New South Wales. Were the Constitution, of a wider nature this Parliament, and the last Parliament, could have stepped in to settle that dispute. It could have taken steps to secure an award of the court. What did the mine-owners do in connexion with this trouble? These gentlemen who are always prating about peace in industry,' and who so frequently condemn the workers, were operating their mines under an award delivered by **Mr. Hibble.** If they were not satisfied with that award, they should have done the decent thing by the men : They should have notified their employees that they intended to approach the Hibble tribunal for a variation of the award. They did not do that. They simply said to the miners, "Those are our terms; we care not a snap of the fingers for the Hibble tribunal. If you do not accept our terms we will close down the mines." And that was exactly what they did. Later on Judge Beeby made an interim award. What did the mine-owners do then? They appealed against the award to the High Court, which ruled in their favour. Judge Beeby, who was anxious, as we all were, to settle the dispute, made another interim award. The mine-owners then appealed to the High Court, and again the High Court upheld their appeal, with the result that the miners are still locked out. That is the attitude towards constituted authority of the mine-owners, who have been reaping wealth by the sweat of unfortunate men who go down into the bowels of the earth to toil for a few shillings a day, so that others may pile up millions. That sort of thing will have to change. This Parliament must be given power to create tribunals which will be able to deal with disputes of this kind. I appeal to honorable members on the opposite side to support these two bills, and the third bill when it is brought down. In this way they can help to make Australia a nation in name and in reality, so that future generations will be born into a free country, and will grow up free men and women fit to mould its destinies. {: #subdebate-21-0-s4 .speaker-KNP} ##### Mr MAXWELL:
Fawkner .- I have patiently sat through this debate, and have listened with great interest to the speeches that have* been, delivered in regard to the two bills now under consideration. {: .speaker-JSC} ##### Mr Brennan: -- I hope with some pleasure, also. {: .speaker-KNP} ##### Mr MAXWELL: -- Yes, with a considerable amount of pleasure. I think you, **Mr. Speaker,** must have had considerable difficulty sometimes in coming to a conclusion as to whether the speeches were quite relevant to the points before the Chair. I can scarcely imagine a. more difficult position than you occupy in having to determine the relevancy or otherwise of speeches on two such bills as these. I wish to state my position as simply as I can, and I think that any position is capable of simple statement. The Prime Minister has invited honorable members to regard these measures from a non-party point of view, and I believe everybody will agree that it is not desirable that a party discussion should be entered upon. Personally, I find little difficulty in accepting the invitation of the Prime Minister because, as honorable members know, I was recently thrust out from the party to which I had belonged ever since I came into this House in 1917. I had always, I think, been a loyal adherent of that party, and had always tried to be true to its principles; but owing to the action of the Parliamentary Nationalist party, to which I belonged, I am no longer a member of that party. The party to which I hope to belong in the future has not yet determined upon its policy, so that the claims of party lie very lightly upon me at present. Consequently, it is quite easy for me to discuss this matter from a- lionparty point of view. It has been said that there is not the slightest chance of these proposals being accepted by the people. It seems to me that it does not matter one scrap whether the people are going to accept the proposals or not. The duty of honorable members of this House is to consider them on their merits and to say whether or not, in their opinion, these bills ought to pass. What the people hereafter may do in regard to them is quite beside the question so far as I am concerned. I am not influenced in the slightest degree, I hope, by what the people are likely to do. I am concerned only with what I ought to do myself. All I have to inquire into is whether the passage of these bills will be in the best interests of the people of Australia. If I think they will, I shall vote for them ; if not, I shall oppose them. Again, it, has been said that members of the Opposition are opposing the bills simply because they emanated from the Labour party. I do not think that is so. I have come from that side of the House and am acquainted, from inside knowledge, with the views of honorable members of the Opposition in regard to. these matters. J believe that they are absolutely sincere in their opposition to these bills. They oppose them on principle, and not because they emanate from the Labour party. The fact that the bills emanate from the Labour party will not influence me in any way; those who know me in this House can readily believe that. On the declaration of the poll after the October elections, when it was evident that a Labour Government would be in power very shortly, I told the electors of Fawkner that I would discuss all measures brought down by the Labour Government on their merits, and vote on them accordingly. If they commended themselves to my judgment ns being in the best interests of Australia I would support them. If they did not commend themselves to me they would receive my uncompromising opposition. That is my position in regard to these measures. I regard these proposals as being of the very first importance. No more' important measures than these, especially the first, has been before the House since I have been a member of it. Let us consider the first proposal. We have heard a great deal about the intentions of the framers of the Constitution. What their intentions were does not influence me in considering whether or not this power asked for by the Government should be granted. It does not matter to me what was the original intention of the framers of the Constitution. Either this bill ought to be assented to or it should not. It has been said that the Constitution is undemocratic in as much as it practically puts it in the power of a minority of the electors of Australia to block an amendment of the Constitution, and thereby prevent progress. Again I say it does not matter whether the Constitution is democratic or undemocratic. If it is undemocratic to-day, it was undemocratic on the day on which it was assented to in 1901. The first thing I look to in considering this matter is, what was the nature of the contract entered into by the federating States? It was a simple contract, whether democratic or undemocratic. Its nature was known and appreciated. I look at the preamble of the Constitution, and I find that the contract was entered into very solemnly, and very deliberately. The States said that, " relying on the blessing of Almighty God," they agreed to enter one indissoluble union ; " to unite in one indissoluble Federal Commonwealth." It was recognized then, as it ought to be recognized now, that the contract thus deliberately entered into was a federal compact. The smaller States considered long and a.nxiously before they entered into this union, and knowing that the union into which they were entering was indissoluble, they were induced to enter into it by the safeguards which were embodied in the Constitution. It was an indissoluble contract under the British Crown, and, mark you, under the Constitution. There, in black and white, these smaller States were guaranteed, in section 128, that in regard to certain matters affecting them, no change could be made without their individual consent. {: .speaker-K7U} ##### Mr Crouch: -- That was put in by **Mr. Reid** afterwards. {: .speaker-KNP} ##### Mr MAXWELL: -- It does not matter by whom it was put in. It was in the Constitution as assented to by the States, and I do not think that there can be the slightest doubt that it was the presence of these safeguards that induced the smaller States to agree to federate. That being so, if this bill is passed, and this Parliament is given power to alter the Constitution at will, the contract under which the several States agreed to federate is broken. It will be .noted that the bill says that, notwithstanding anything contained in section 128, the Constitution may be altered. That includes the alteration of the Constitution in regard to those matters concerning which the smaller States were safeguarded under section 128. From my viewpoint the Government's proposal in this instance is a distinct breach of faith with the smaller States. I pass over the question of the validity of the bill, because I am not sufficiently equipped at the moment to discuss it; suffice it to say that very eminent constitutional authorities differ as to its validity. To say the least of it, its validity is doubtful. As I have said, this measure, if carried, will be a distinct breach of faith with the smaller States. {: .speaker-JPV} ##### Mr Blakeley: -- But the people would decide. {: .speaker-KNP} ##### Mr MAXWELL: -- -What does that mean? The people have no moral right to decide because, when they assented to the safeguards embodied in section 128, they gave up their right to determine a matter of this kind. It seems to me that the question is unarguable. It is no answer to say our Constitution is un-> democratic and that we should not allow the smaller States to stand in the way of its amendment. If it is undemocratic to-day, it was when the Commonwealth assented to that condition of the contract. {: .speaker-L1C} ##### Mr Lewis: -- Why should the dead hand of the past stand in the way of progress ? {: .speaker-KNP} ##### Mr MAXWELL: -- What has the dead hand of the past to do with the question of whether a solemn compact entered into should be broken? From my point of view, it is a simple moral question. Having agreed that the rights of these States should be safeguarded is it now right to say that the contract was undemocratic, and, therefore,, we are going to repudiate it? {: .speaker-JSC} ##### Mr Brennan: -- Will not the honorable member grant that one term of the Constitution is as sacrosanct as any other term, and, therefore, if we have the constitutional power to do this, that is part of the compact to which we are entitled to give effect? {: .speaker-KNP} ##### Mr MAXWELL: -- " If we have the constitutional power." Those words will assist in clinching my argument, because, to say the least of it, it is doubtful whether we have the constiutitional power. {: .speaker-JSC} ##### Mr Brennan: -- But for the sake of argument the honorable member was assuming thatwe had the power. {: .speaker-KNP} ##### Mr MAXWELL: -- Yes ; but it was never suggested that the Commonwealth had the power to do away with these safeguards. If the Commonwealth had the power the safeguards would be useless. {: .speaker-KVS} ##### Mr Theodore: -How canwe presume to know whatwas thought at that time? {: .speaker-KNP} ##### Mr MAXWELL: -- We remember the discussions that took place, and the inducement held out to the smaller States to come into the federationwas that the provision in regard to the representation of the States in both houses of the Parliament and their boundaries could not be altered without their consent. {: .speaker-K8G} ##### Mr Cusack: -- We are asking for their consent. {: .speaker-KNP} ##### Mr MAXWELL: -- Nothing of the kind. I think I am right in saying that if the six States consented to this power being handed over to the Federal Parliament it would be all right, because they would be voluntarily giving up the right originally given to them under the Constitution; but that is a very different matter. {: .speaker-L1C} ##### Mr Lewis: -- The Commonwealth is the people. {: .speaker-KNP} ##### Mr MAXWELL: -- What is the meani ng of that interjection " The Commonwealth is the people"? The Commonwealth is made up of the six individual federated States. These sovereign States knew that by coming into this indissoluble union theywere giving up certain of their sovereign powers, but at the same time were having reserved to them the rights provided in section 128. I repeat that I believe that itwas on the strength of those representations that they consented to come into the federation. {: .speaker-L1C} ##### Mr Lewis: -- The States could not do anythingwithout the consent of the people. {: .speaker-KNP} ##### Mr MAXWELL: -- The States came in *qua* States and itwas the rights of those States that were preserved under section 128. Itwould be an absolute breach of faith to do anything in theway of breaking away from that compact without the consent of the States concerned. I should like to say aword ortwo on a phase of this subjectwhich was mentioned by the Treasurer **(Mr. Theodore)** andwhich has already been dealt with by the Deputy Leader of the Opposition **(Mr. Gullett).** The Treasurer asked how the Commonwealth Parliament would use this power if it were granted. It has been said that if the Commonwealth Parliament were given the power it would at any time be able to effect an alteration of the Constitution, and that the Constitutionwould simply be the plaything of political parties. It has been said that one political party coming into power today might desire to do somethingwhich, under the Constitution, it had no power to do. In such circumstances it would simply amend the Constitution to give it the power to pass the legislation desired. But another party coming into power shortly afterwards could undo that, so that there would be nothing like stability under the Constitution. The Treasurer, however, stressed the point that no party would dream of effecting any change unless it had a mandate from the people. But the very object of the proposed amendment is that Parliament, having no mandate, should be givenpower to dealwith circumstances as they arise. Circumstances might arise shortly after an election necessitating the passing of certain legislation to deal with the then existing circumstances, and under this measure the Government could amend the Constitution and immediately give effect to its purpose. What then becomes of the Treasurer's suggestion that its proposals would be put before the people at an election, and that they would make a pronouncement upon them before any alterationwas made? If that is so this measure is absolutely nugatory, as Parliament now has that power. If the Government requires a mandate from the people before effecting any change, it has only towait for an election and put the question straight to the people by. way of a referendum. As the Treasurer would have it now, however, it would not go before the people at an election by way of a distinct and specific referendum question ; there would be no differentiation between that question and other issues. It would become one of many issues, and it would . be impossible to draw the inference from the fact that the party was returned to power that the people had made any pronouncement whatever in regard to that particular issue. At present, if the Government desires additional power it can go before the people and explain why such powers are required to deal with specific circumstances. The people can then say whether, having regard to all the circumstances, it is advisable to give that additional power. From the way in which the Treasurer stated his case yesterday, however, the endorsement of the bill would be of no effect because, although it is to give to the Parliament power to make any alteration desired, the hands of Parliament would be tied until it had an opportunity of placing a specific question before the electors at an election. That seems to me to reduce the position almost to an absurdity. Put in a nutshell, my objections to the Constitution Alteration Power of Amendment Bill are - assuming its validity - that it would be a distinct breach of faith with the smaller States, and would make our Constitution a- {: .speaker-KYI} ##### Mr Prowse: -- A political plaything. {: .speaker-KNP} ##### Mr MAXWELL: -- Exactly. The Constitution would be something for political parties to play with. It has been said that the difficulty of amending the Constitution is a serious weakness, and that on that account, it is one of the weakest Constitutions in the world. That very difficulty of amendment, I contend, is one of the sources of its strength. It is exceedingly important that the Constitution, affecting as it does the fortunes of so many people, not only as individuals, but also as federated States, should not be capable of being easily amended. It is rather a tribute to the people of Australia that they have resisted past attempts to alter the Constitution. It is extraordinary, but there is in the Australian people a very strong conservative element. Even my friends on the Labour side of the House are intensively conservative in some things. Thomas Carlyle, who was a radical of the radicals, who blazed up with indignation at the very idea of the existence of the abuses which were so rampant in his time, and withered and scorched them with his indignation, said - >The English legislature, like the English People, is of slow growth, essentially conservative. In our wildest periods of reform, in the Long Parliament itself, you notice always the invincible instinct to hold fast by the old. to admit the minimum of new, to expand > >Rome old habit or method already found fruitful into new growth for the new need. lt is an instinct worthy of nil honour, akin to nil strength, and all nobleness. The future is hereby not dissevered from the past, but is based continuously on it, grows with all the vitalities of the past and is rooted deep down into the beginnings of us. That is the strength of the English Legislature as it is of the English people, and we in Australia seem to have inherited in a large measure the inherent conservatism that induces a man or a nation to hold fast to what has proved good, and to refuse to give it up until he or the nation sees something better to " expand some old method or habit already found fruitful into new growth for the new need." {: .speaker-L1C} ##### Mr Lewis: -- The British Constitution is all-embracing. It is not limited like ours. {: .speaker-KNP} ##### Mr MAXWELL: -- We have had our Constitution compared with the Constitutions of the United States of America, Canada, South Africa, New Zealand, and Great Britain, but there is no advantage tt be gained in making the comparison, because we must come back to the fact that originally it was a simple, definite and understandable contract. If we were discussing the advisability of asking the people to change the character of the contract from a federal to a unitary system, it might be cogent to point to the experience of other countries, but during the course of the debate a passage from Quick and Garran's *Annotated Constitution* has been read, indicating that the disability of a federal legislature to alter its constitution is an organic feature and one of the prominent characteristics of every federal system. That disability is embedded, in our Constitution. What. we ure now expected to do is to nsk the majority of the States and of the, electors in the States to alter that organic feature of our federal system into which all the States solemnly- entered on the strength of the safeguards provided in section 128. Again I say that is not fair, and in considering whether we ought to pass this bill it does not help us, at least it does not help me, to learn that our Constitution compares unfavorably with that of any other country. {: .speaker-KVS} ##### Mr Theodore: -- If it were proposed to progress towards unification, how does the honorable member suggest the question could be submitted to the people for their consideration? {: .speaker-KNP} ##### Mr MAXWELL: -- As has already been said - by going to the people and telling them, "Your Parliament is of opinion that the federal system has outlived its usefulness and ought to be changed, and we want it to be changed by your giving us, the Parliament elected by you, the power to say when and under what circumstances, and to what extent the Constitution is to be amended." Undoubtedly that would be asking the people to give up what is an essential feature of the federal system. {: .speaker-K7U} ##### Mr Crouch: -- And that is what this bill is asking the people to do. {: .speaker-KNP} ##### Mr MAXWELL: -- So long as section 128 remains, the Constitution cannot be altered without the consent of the States {: .speaker-K7U} ##### Mr Crouch: -- We may get that. {: .speaker-KNP} ##### Mr MAXWELL: -- If the consent of the States is obtained, well and good; because then Parliament can consider what, is best to do. I have already said that I hare listened with a great deal of interest , to the speeches that have been delivered, but. I listened wilh special interest to the speech of the honorable member for New England **(Mr. Thompson)** and marvelled at his psychology, as I did on another interesting occasion when the fate of the Bruce-Page Government was trembling in the balance. On that occasion, the honorable member gave what seemed to me to be one of the ablest, if not the ablest, speeches condemnatory of the Government's proposals, yet in his last sentence said, "1. shall support the Government ". On this occasion, he said that, the Government's proposal was something in the nature of stealing a march upon the people, that the people would not understand its real implication; that by voting for it they would be giving away something unwittingly; and that the Government should have come out boldly and said in plain and unmistakable language, that it was out for unification. And as he did on the previous occasion, he concluded with the words, " I shall support the bill ". If the measure can, in any respect, be considered misleading, if the people will have any difficulty in understanding exactly what is implied in the power they are asked to hand over to the Federal Parliament, we, as a parliament, should protect them; and, so far as I am concerned, the bill will not pass. If it docs pass, or if in the event of its rejection on the second occasion, by the Senate, the Government chooses to exercise its right to send it to the people, I propose to fight it at length and in detail on the platform. {: .speaker-K7U} ##### Mr Crouch: -- The honorable member would not give the smaller States a chance to say whether they want to alter the Constitution. {: .speaker-KNP} ##### Mr MAXWELL: -- When the late **Mr. Justice** Higgins was a member of this Parliament,- he submitted a resolution to the effect that the Federal Parliament should accept additional powers from the States. Acceptance, I think, involves an offer; but I am not aware that any State has ever approached the Federal Government with the request that it should accept additional powers. It is the Federal Parliament itself that is seeking additional powers. The parties to the federal contract, relying on the safeguards contained in section 12S, have been living in a sense of security until now, and if I should take it upon myself to prophesy, I should certainly agree with those who say that the people of the various States are not at all. likely to hand over to the Federal Parliament unlimited power to make any alterations of the Constitution it chooses at any time mid in any circumstances. Comparing the industrial powers now asked for with those asked for by the Bruce-Page Government in 1926, there are fundamental differences. In 1926, my attitude was that matters affecting the fixing of the maximum hours of labour or the basic wage did not lend themselves for determination by a parliament, and that they should be deter; mined by a tribunal specially appointed for the purposes, and with special knowledge, and only after the most careful investigation. The danger I foresaw, if Parliament was given the power to deal directly with such matters, was that the determination come to by Parliament would very often, although not always, bc the result of political pressure, and. not economic necessity. Those were my views in 1926, and I have since seen no reason to change them. I do not believe that a parliament should be entrusted with the plenary power to directly regulate and control all industry. Candidates would be asked all kinds of questions on the hustings as to what they proposed to do, or not to do, in regard to so and so if returned. And there would be such an extension of that bidding for votes by the parties that already is such a deplorable feature of our political life that a new terror would be added to the position of members of Parliament. We are all agreed that what we are seeking to attain is industrial- peace, and the proper adjustment of the relations of employer and employee. While listening to the debates on these bills it has struck me that we are attaching too much importance to legislation in regard to those matters; we are looking for too much as the result of this legislation, whereas, after all, very little can be done by legislation to adjust the relations between employer and employee unless we. have, on the part of both, a. will to industrial peace. One man may take a horse to water, but ten men cannot make him drink. We can bring the employer and employee together in a formal way, but unless they have the will to peace, our efforts will be absolutely in vain, john Morley said, in one of his essays, " The British people have a touching faith in the efficacy of acts of Parliament"; and here in Australia we have the same inherent measure of faith and trust in the efficacy of Parliament. We are too prone in Australia whenever we meet a difficulty' to rush to Parliament and ask it to pass an act instead of relying on our own efforts. Industrial peace lies in the hands of the people themselves. They have it in their power to bring it about without legislation, and because they have been relying almost altogether on legislation te achieve that end they have been slow to fall back on the resources that they have in themselves. I remarked at the conclusion of my speech on the Maritime Industries Bill, in the dying hour 3 of the last Parliament, when the fate of the Bruce-Page Government was hanging in the balance, that I had intended to say a word or two about the moral and spiritual aspect of the industrial problem, because, in my opinion, there can be no satisfactory solution of it if that aspect is left out of account. That is one of my profoundest convictions. Emerson has said that the appearance of character, makes the State unnecessary. That means that the more character there is in our people, the less need there is for conventional law and the less character in the people the more necessity for legislative restrictions of all kinds. I think that the people arc beginning to realize that there is more in the industrial problem than the mere legal adjustment of the relations between employers and employees. The people must be animated, as the late Prime Minister used to he fond of saying, by a new spirit. "What we need," he said, " is a change of heart." That is an acknowledgment that the source of all our hopes for the solution of our industrial difficulties is a moral and spiritual one. As honorable members know, we have often heard in this House of the terrible industrial conditions that prevailed in England about the middle of last century. Moving pictures have been drawn to illustrate the social and economic conditions that obtained in England at that time. Our great trade union leaders did splendid work in organizing the masses of the people, and helping to find a solution of the industrial problems; but alongside that, there was another movement by such men as Frederick Denison Maurice and Charles Kingsley, who raised their voices in indignant protest, and did their utmost to awaken the conscience of the people of England against conditions to which the Christian community seemed to be utterly indifferent. At that time they seemed to be as voices crying in the wilderness; but what a change has come over the scene since then ! The Christian conscience of the community was aroused, and undoubtedly they did a groat deal to help forward the industrial movement. {: .speaker-K7U} ##### Mr Crouch: -- Parliament was used for the purpose. {: .speaker-KNP} ##### Mr MAXWELL: -- That is quite true. Parliament alone is absolutely powerless; but, working in conjunction with Christian conscience, it is a strength irresistible. The two forces must be linked in a common effort to raise the level of the community. Our bishops are now flocking from Australia to the Lambeth Conference, and I, for one, look for some fine pronouncements from that, assemblage in regard to industrial difficulties, so that light will be thrown on the problem quite apart from any assistance than come from legislation. There will be, I hope, that moral and spiritual help that, the bishops are calculated to render. I should like to place on record a few sentences from the splendid report of the Lambeth Conference of 1920. In dealing with the industrial problems of the day, that report said : - >An outstanding and pressing duty of the Church is to convince itsmembers of the necessity of nothing less than a fundamental change in the spirit and working of our economic life. {: .speaker-JPV} ##### Mr Blakeley: -- Most people interpret that as a reduction in wages. {: .speaker-KNP} ##### Mr MAXWELL: -- That may be true of some people. I have quoted from thatreport merely to show the view of earnest men whose motives cannot be questioned. They go on to point out that that fundamental change can be brought about only by acceptance, as the basis of our economic and industrial life, of the principle of cooperation in service for the common good, in place of unrestricted competition for private and sectional gain. An incident of tremendous significance in the industrial life and uplift of the community was the formation in England, about eight years ago, of a greatorganization known as the Industrial Christian Fellowship. It was founded by men of all shades of political and religious opinion, who came together with the objectof finding a common ground on which they might begin a new era of industrial life. Once every year they celebrate "Industrial Sunday." It is generally held in April, and an invitation is sent out by representatives of employers and employees to their respective followings to rally round the movement and help to make it a great success. That Sunday is specially set apart to urge the application of Christian principles to economic and social conditions. I desire to place on record a few points from the manifestoes of both employers and employees in relation to Industrial Sunday, 1926. Let me quote first from the manifesto of the employers - a manifesto, not of a recognized religious organization, but, of a number of big employers of labour. In their manifesto they say - >The day is passing when any one dares to say openly that Christian principles have no place in business life; > >The law of Christ is the ultimate authority that must govern every department of human life. The manifesto issued by the leaders of Labour, includingMr.RamsayMacdonald, **Mr. Philip** Snowden, Mr.Ben Tillett, **Mr. Thomas, Mr. Henderson, Mr. Clynes, Mr. Ben** Turner, and a host of other wellknown stalwarts of the Labour movement, contains the following five points: - {: type="1" start="1"} 0. They appealed to all classes and interests to unite in applying Christian principles to economic and industrial life; 1. They proclaimed their belief in the gospel of Christ as the final truth concerning the relationships of men onewith another; 2. They recognized spiritual regeneration as a condition of progress; 3. They acknowledged the Christian conscience as paramount to political allegiance and class loyalties of every kind. 4. They appealed to all to apply the test of the Christian spirit to all industrial policies and political programmes whatsoever. {: .speaker-L1C} ##### Mr Lewis: -- Then came the general strike. {: .speaker-KNP} ##### Mr MAXWELL: -- Quite true. That manifesto contained the profound convictions of those leaders of Labour - men inspired by the faith they expressed in the points that I have taken from their manifesto. I endorse what they have said. {: .speaker-K7U} ##### Mr Crouch: -- Would the honorable member accept, an arbitration act as a document inspired by Christianity? {: .speaker-KNP} ##### Mr MAXWELL: -- Certainly ; every act ought to be amenable to that test. To the extent that any legislation violates any tenet of Christianity, it is wrong. Let me quote now one or two points from the manifesto of 1929, which I received recently from the Secretary of the Industrial Christian Fellowship. The latest manifesto of the employers contains 140 signatures, and that of the employees 252 signatures. Again, the employers' manifesto bears the signatures of **Mr. Ramsay** Macdonald, **Mr. Philip** Snowden, and SO other members of the present British House of Commons. In their manifesto they say - >If wo could only put into practice the gentleness, the kindness, the purity of motive to be found in the Sermon on the Mount, the Lord's Prayer, and the 13th Chapter of the 1st. Corinthians, what a glorious world this would lie! in calling on their followers to support Industrial Sunday, they say - > >Industrial Sunday comes to strengthen our faith, consolidate our hopes, and put fresh vigour into our minds and hearts, and so enable us to pledge anew our determination to build the city of God in our day and generation. That is the inspiration of the Labour movement in Great Britain to-day, the explanation of its magnificent strength, which enables it to perform such splendid wort. {: .speaker-L1C} ##### Mr Lewis: -- Yet they are called Bolsheviks. {: .speaker-KNP} ##### Mr MAXWELL: -- Only when legislators recognize that they are practically powerless to help the industrial movement so long as it is divorced from Christian principles and realize the moral and spiritual significance of their work, shall they accomplish anything worth while. I regret that I am unable to support either of the two referendum proposals. I am sure that the Government will believe me when I say that my intention to vote against them is not due to their having been introduced by a Labour Government. That aspect of the matter does not influence me in the slightest. But for the reasons I have given, and because I believe that they would not advance the hest interests of the people of Australia. I propose to vote against them, {: #subdebate-21-0-s5 .speaker-L1T} ##### Mr YATES:
Adelaide .- The honorable member for Fawkner **(Mr. Maxwell)** has delivered a very interesting speech. Ho could not understand the psychology of the honorable member for New. England **(Mr. Thompson)** who, after expressing certain definite views, declared his intention to vote against his expressed convictions. The honorable member for Fawkner has given a fine dissertation upon the ideals that should permeate the industrial life of the community. Yet he says that he will vote against both the bills. Epitomized, his speech was to the effect that, while it is good to trust in God, it is wise to keep our powder dry. Some of us who have had a lot of experience of knee drill know the value of keeping our powder dry. I have watched the trend and growth of industrialism in Australia as closely as any man of my generation has watched it. There was a time when every workman touched his cap when the boss appeared; when employers were treated with respect because of their desire to do unto others as they would have others do to them; but to-day, notwithstanding Industrial Sunday and all that it signifies, the boss devotes most of his time to considering his profits. {: #subdebate-21-0-s6 .speaker-K0A} ##### Mr GABB:
ANGAS, SOUTH AUSTRALIA -- The system mentioned by the honorable member for Fawkner has never been tried by either side. {: .speaker-L1T} ##### Mr YATES: -- The working class has never had a chance. They have lived in humility all their lives, but their struggles and trials have gradually brought about our present stage of development. The honorable member referred to the industrial conditions that obtained in Great Britain. ] remind him that they were almost similar in Australia. He played his part in the initial effort to break away from those conditions, and because of his broadmindedness was appointed chairman of a wages board. The honorable member will recollect the conditions that necessitated the introduction of that board, and must appreciate Australia's subsequent industrial development. Surely he will concede that the existing machinery i'; again obsolete, and needs amendment. I think that there is just as much Christianity in the working nian as there is in the employer. The working man realizes thoroughly that if he is not a profit-earning unit, his services are not required. I am confident that if the honorable member for Fawkner **(Mr. Maxwell)** continues along the lines which have been expounded by him,he will become socialistic, and endorse the slogan, " Produce for use, and not for profit." From the time that Christ went into the Temple at Jerusalem and turned over the tables of the money changers, there has been a gradual improvement in the condition of mankind. I suggest that if the Nazarene returned to earth he would kick over the tables of themoney changers . of this country, and so assist this Government in its endeavour to improve existing conditions. However, I shall not labour that point. I merely wished to indicate that the honorable member did not deal with the real problem before the House. The problem before the Government and this Parliament is to find a better way in which to guide the destinies of Australia. It. istime that honorable members ceased to beshroud their views. Let them be candid. The honorable member for New England **(Mr. Thompson)** was referred to by the honorable member forFawkner as having made a sound address on this bill. He stated that it took 30 years in which to educate the people of Australia to accept federation. The whole thing is merely a matter of evolution. The States were existing as separate entities, involved in an internecine struggle for existence on one broad continent. The system was an anachronism, and the position incongruous. The legislators of Australia realized that the country was not progressing as it should, but 30 years passed before there was unanimity on the subject of federation. I suggest that it is not the inherent conservatism of the people that inclines them to reject progress, but the conflict that takes place in the legislative chambers and on the hustings when these proposals are submitted to tho people. {: .speaker-KNP} ##### Mr Maxwell: -- The honorable member is assuming that the proposals represent progress. {: .speaker-L1T} ##### Mr YATES: -- I am. The Prime Minister supplied statistics covering previous re fe rendums, and they are worthy ofnotice. South Australia, Queensland and Western Australia voted in favour of the proposals submitted In 1913, and only the bigger States rejected' them. A similar state of affairs occurred in 1919, but the " No " majority was a greatly reduced one. Undoubtedly the present proposals represent progress. From time to time there is a considerable outcry as to the amount involved in holding these referendum. We do not properly appreciate what is in the minds of the people in these matters. Let me illustrate the case of South Australia, to show how much Parliament can be out of touch with the people on an important issue. The South Australian Premier of the day, **Mr. A.** H. Peake, decided that it was necessary to hold a referendum with regard to closingthe hotels at 6 o'clock. In order to give the people every opportunity to state exactly what they desired, the voting tickets permitted of their registering a vote in favour of the hotels remaining open until 11, 10 and so down to 6 o'clock. The result of that referendum is history. There was an. overwhelming majority in favour of 6 o'clock closing, an hour that was later adopted almost universally throughout the Commonwealth. Undoubtedly, we have simply muddled along under our present Constitution. Some people claim that it has been a splendid instrument., but I have my doubts on the matter The Constitution has had a decidedly hampering influence. Had we adopted a more sane constitution at the beginuing of federation, we should have beena much more progressive country, and would not have been in the critical financial position that we arc in to-day. Honorable members opposite are not cognizant of the psychology of the Australian people. They do not know that there is a widespread desire among the community for an alteration of the Constitution along the. lines thatI have suggested. The Government has brought down proposals to clothe this Parliament with the power to alter the Constitution as it thinks fit. I would prefer an outright declaration for unification. The honorable member for Fawkner **(Mr. Maxwell)** and other honorable members have said that there is deception and a breach of faith involved in these proposals. If we do not make the issue clear to the people, and the ' proposals are defeated, it will be said that there is no desire on the part of the community to alter the Constitution. The people have never yet, at any referendum, been given a clear issue. They have never known, what would be the effect of adopting, any of the proposals submitted to them. Take, for example, the speech that was made by the honorable member for Fawkner this evening. It was a very fins rhetorical effort; but the conclusion that the average person listening to it would come to is that the honorable member certainly knew more about the subject than, he did. There would certainly be no clear idea gained by him as to what would be the outcome of carrying the referendum. The honorable member for Fawkner said that these . proposals involved a breach of faith with the smaller States. I disagree with him. Australia is a democratic country. The Constitution was accepted by the popular vote of the people. They thought they knew what it meant until the High Court decided that certain sections of the Constitution did not actually mean what they purported to mean. The honorable member for Fawkner said that these proposals, if given effect, would make the Constitution a political plaything. I fail to understand how he arrived at that conclusion. The Treasurer **(Mr. Theodore)** explained the responsibilities that rested upon Parliament. After . all, Parliament is elected for only three years, and surely that would be an adequate check upon any desire on the part of a government to make the Constitution a political plaything ! My idea of unification is that the laws of the Commonwealth should be the Constitution of this country. The British people are ruled by Parliament, and yet Great Britain has no written Constitution. There is nothing to hamper the legislative activity of the British Parliament. The area of Great Britain may be considerably smaller than that of Australia, but its responsibilities are very much greater. We are part of .its responsibilities in so far as we are a British dominion. Legisla- tively this Parliament is very small potatoes compared with the Parliament of Great Britain. Since federation the progress that we have made both in legislation and in the development of this country compares more than favorably with that of any other part of the world. It is because we are progressing a little faster than' other countries that efforts are made to put the brake on the activities of the Labour movement. We have lived for the day when we could handle the reins of government, and have an opportunity to give effect to our proposals. Labour governments in both the Federal and State arenas have made few mistakes in. their legislation. It is true that we have crossed, at times, the accepted traditions and customs, and although we have not always reached our goal, Ave have made good strides towards it to the benefit of the general community. We are now taking another stride in that direction by submitting these proposals to the country. Like other legislation which the Labour party has introduced, these proposals, although now condemned by certain sections of the community, will, if given effect, be blessed by posterity. I regret that Ave are not placing before the people a straight-out proposal for unification. It would be" nothing new or staggering. Every development in this country is a step towards unification. The honorable member for Hunter **(Mr. James)** dealt fully with the cost of parliaments, governments, ministries, elections, AgentsGeneral and the High Commissioner overseas., The duplication of so many offices must make our present system of government appear ludicrous to any sane and intelligent person. I have been a unificationist for very many years ; in fact, bef *ore* federation was achieved. I do not say that I am wiser than other people, but in my early years I took a keen interest in politics - possibly as keen an interest as any one in the colony. I used regularly to read the reports of the speeches made at the various Federal Conventions. I well remember hearing a speech made on the hustings by **Sir Josiah** Symon, one of the greatest constitutional lawyers of South Australia, and a. member of the Senate in the early days of the Commonwealth Parliament. He delivered his address under three headings, namely, federation, confederation, and unification. I was so carried away by his arguments in favour of unification that I did not vote for federation on either of the two occasions when it was submitted to the people. Whoever may be responsible for federation, I am not. My unification ideas are not of new birth. Unification is the natural corollary to the experiment of federation. It is not a, new thing, for it was advocated years before the Australian colonies federated. While the Constitution was in the melting pot a complete unification scheme was proposed by **Sir George** Dibbs. It is astonishing how that statesman foresaw what would happen if federation were agreed upon. I have not read the report of the speech delivered by **Sir Josiah** Symon to which I have referred, but my recollection is that the scheme was along the lines proposed by **Sir George** Dibbs. This scheme is outlined in Quick and Garran's *Annotated Constitution of the Australian Commonwealth.* I quote the following from page 155 : - > *Dibbs' Unification Scheme.* - At this stage an interlude occurred in the shape of analternative scheme of union, drawn up by **Sir George** Dibbs, the Premier of New South Wales. He had always been a severe critic of the Commonwealth bill ; and on 22nd May, 1894, in a speech to his constituents, at Tamworth,he propounded a scheme of complete unification. This scheme was immediately condemned by **Sir Henry** Partes and **Mr. Barton** and by the federalist pressas being impracticable; but **Sir George** Dibbs shortly afterwards formulated it in a letter dated 12th June to **Sir James** Patterson, Premier of Victoria, in which he announced that the consideration he had given to the federal question since the convention of 1891, but "more especially since the fiasco of the banking crisis found us so injuriously divided", had led him to the conclusion " that it would be easier first to completely unify the interests of the two great colonies of Victoria and Now South Wales, and then to attack neighbouring colonies within the sphere of our extended influence." He set out his objections to the Commonwealth bill; it leant too much to American ideas, too little to Canadian; it involved tho expense of State and Federal establishments; itsfinancial provisions were unfair and unworkable; equal representation in the Senate was absurd. On the other hand, it secured no federal control over public debts, railways, or land revenues, and would tend to perpetuate existing rivalries. "How far more beneficial in every way; how far more likely to extend our revenue and minimize our expenditure; how far more impressive to the outside world and to our creditors in England, would be a complete pooling of our debts, our railways, and our national establishments generally. We arc none of us so badly off that we cannot be permitted to meet each other on equal terms. In such a partnership New South Wales would not be disposed to say to her neighbours, ' Your debts are more burdensome, your railways and lands less productive than ours.' We would give to the united government that prestige and supreme control which is almost entirely denied under the Commonwealth scheme, wherein the federal legislature would be numerically and structurally wholly overshadowed by the provincial governments; and without haggling over the items we would be prepared to hand over our customs houses, post offices and other necessary establishments for the commongood, provided others did the same." That there must be local governments in the provinces he admitted; but he would confine these local governments, "as in Canada," within subordinate limits and to strictly local purposes. He practically admitted thatthe other colonies could not be induced to join such a union at the outset; but he submitted the following draft outline of a scheme for the consideration of the people of the two colonies of New South Wales and Victoria : - > >Unification of Newsouth Wales and Victoria as a Preliminary to Complete Australian Union. > >Union for all national purposes to be completed as under: - > >1 ) One Viceroy, or Governor. > >One Parliament of two chambers. > >One customs tariff. > >One scale of excise duties. > >One joint debt. > >One railway management. > >One land revenue and one land law. Until the laws are consolidated, existing regulations to hold good. > >One defence administration. > >One postal and telegraph administration. > >Provincial government with wide local powers. > >Surplus revenue of the supreme government to be apportioned to the provinces - partly on a population basis, partly on an occupied mileage area basis. > >Certain departments of the Public Service removed from political influence may have their headquarters in Melbourne, others in Sydney. > >One High Commissioner's establishment in London representing the whole. > >One Supreme Court. > >Title: " The United Colonies," afterwards when South Australia and Queensland come in, the title to be the " Dominion of Australia." Quick mid Garran go on to say what **Sir James** Paterson, the Premier of Victoria at that time, thought of this scheme. Some honorable members who have participated in this debate have said - " Give us a complete scheme of unification." **Sir George** Dibbs formulated a complete scheme in 1S94. There is no need for us to go into the details of it at the moment, but it epitomises my idea of what is necessary to provide for the effective future government of Australia. Take our land laws, for instance. Why cannot the whole of our lands be assessed by one body? Why cannot the land revenues of the Commonwealth be apportioned on a uniform basis. Surely this is a commonsense proposal. I have long since ceased to think of any of the States as States, because, upon all matters affecting the Commonwealth, I have accustomed myself to think federally. When we joined up with comrades to take part in the Great War we did not ask mcn from which State they came. We regarded them all as. good Australians. This was the natural corollary of the federal pact. Recently, as a member of the Public Accounts Committee, I spent a considerable time in Tasmania, inquiring into its disabilities under federation, and while in that State I think I made my position clear. I declared that, however high the amount might be, if it could be shown that Tasmania had suffered disabilities because it had entered the federation, and that Commonwealth grants were needed to assist its development, I should support any recommendation to make the requisite money available. All Commonwealth revenue should be collected on a uniform basis and apportioned according to the needs of individual States. It should not be handed out to one State, as one would hand out a dole to a poor relation. It is undignified to haggle about the amount which Western Australia, or any of the numerically smaller States, should receive. The State which I assist to represent has legitimate claims upon the Commonwealth because of the limitations imposed upon its development owing to its geographical situation. New South Wales and Victoria, which were well equipped industrially at the inauguration of federation, were 'able to greatly extend their trade relations. Under federation they have become more opulent, and there is every reason to believe that the smaller States have been neglected. We are one people, and should be governed in the manner suggested by **Sir George** Dibbs in his unification scheme, to which I have just, referred. The merits of the referendum proposals have not received consideration at the hands of honorable members opposite. Their main purpose appears to have been to indulge in taradiddles to misrepresent the Government's real intentions. As I have stated, the late **Sir George** Dibbs, in 1894, suggested that one High Commissioner should be able to represent all the Australian colonies in London. I also put that suggestion to the Prime Minister prior to the Christmas adjournment, and I think it has borne fruit. In 1925, when the Government of South Australia was considering the appointment of an Agent-General, I had the temerity to suggest to the Premier of that State that, instead of appointing a successor to the retiring Agent-General, he should confer with the Prime Minister to see if it were not possible to arrange for the High Commissioner to represent the State. However, my proposal was not accepted, and the Government appointed **Mr. Price,** now the honorable member for Boothby, who ably represented South Australia in London for some years. On the morning following my interview with the Premier, the Adelaide *Register,* a conservative journal, published a leading article, which stated, *inter alia -* >It may be assumed, of course, that the Government does not share the extraordinary view of thu Agent-Generalship indicated in the proposal of a federal legislator, that the functions of the State's representative should be handed over to the Commonwealth. If the Ministry held with **Mr. Yates** that the duties of the Agent-General are of small importance, it might be tempted to study party convenience rather than public welfare in filling the present vacancy. But, the member who urged iris unificationist opinion upon the Labour Part)' Council last night is out of touch with leaders of his own party upon this subject. {: .speaker-KMU} ##### Mr Marks: -- The High Commissioner could very well represent all the States. {: .speaker-L1T} ##### Mr YATES: -- Of course he _ could. Apparently I was out of touch with my party at that time, but it does not follow that. I was wrong. I am to-day out of touch with members of my party in this Parliament on another subject, but I am nol wrong. I shall live to see the day when my proposal to use the credit of the country, instead of paying some one for the privilege of supplying credit, is accepted as the right policy. That is what we are up against to-day. The House has before it one of the most drastic proposals ever made, namely, to put an embargo on the importation of commodities 30 as to correct our adverse trade balance. But this will not solve our difficulties, because every year we have to pay £26,000,000 by way of interest on our overseas liabilities. This interest burden is oppressive. 1 am, as I know, out of touch with my party on this matter, just a3 1 was out of touch with it a few years ago concerning the appointment of agentsgeneral. But I was not wrong then, and I am not wrong now. Apparently the Prime Minister and **Mr. Hogan** have come to an agreement for the amalgamation of the office of the Victorian AgentGeneral in London, and, probably, as the outcome of this arrangement with the Premier of Victoria, the duties of the Agent-General for that State will, in future, be discharged by the High Commissioner for Australia. I favour the amalgamation of the offices, because I believe that the Agent-General for a State is simply a major domo for peregrinating visitors from Australia. . His principal duty appears to be to provide them with tickets for Ascot, and introductions to my namesake in the person of His Majesty the King. The Melbourne *Herald* also published a leading article on the 24th February last, concerning the arrangement between the Prime Minister and **Mr. Hogan,** the Premier of Victoria. This is 'what that newspaper had to say about it: - >Victoria's share of the federal expense is from £30,000 to £35,000 a year. In addition to that, its own Agent-General's office accounts for another £10,000. The State's London office is an official relic rich in political memories. *For* decades before federation it was a safe and strong retreat in which the beaten hero of electoral or parliamentary conflict could nurse his wounds in a peaceful environment, ft was also a kind of political St. Helena, with compensations, to which a too-aspiring ambition might be consigned with the shrewd belief that separation and new interests would have the necessary soporific influence. Some body who has nothing better to do may yet extract the stories of the most distinguished holders of the office, of the real reasons for their goings and comings, and of the influences that operated in their own minds as well as the minds of those who banished them. Those are tales full of human interest, but they belong to the days that are dead. There is no warrant for further spending thousands a year upon an abode of political ghosts. The business abilities now in the service of the agenciesgeneral can be applied to much better purpose That is what the Melbourne *Herald* said on the very same subject regarding which *The Register* caned me in 1925. It only shows, to use the aphorism of one of your predecessors, **Mr. Speaker,** that when things are different they are not the same. Those are my views in regard to the bills before the House. I only wish thai the Government was seeking outright unification, but however small the step towards progress, I am prepared to take it. being quite certain that before long a greater step must be taken. *~No* one can prevent it. The people are tired of this multiplicity of parliamentary institutions We know that the present State parliamentary system is a sham democracy, and that there is no chance of getting rid of State Parliaments unless we tear them down. Metaphorically speaking, the Legislative Councils of the State Parliaments must be abolished over the dead bodies of some State politicians. At any rate, the. provincial councils which would be set up under a unitary system could not be worse than what we have now. State Parliaments to-day are worn-out, useless and expensive anachronisms. Two or three years ago a by-election was held in South Australia, and of the five candidates, one went before the electors with only one slogan : " The abolition of State Parliaments." He represented no party, and had no influence behind him. He was not a wonderful platform man, but lie had a lot of tenacity. Although he had only this one plank to his platform, he came second on the poll, and *The Register* again published a leading article pointing 0U the significance of the figures as showing the large body of opinion in favour of the abolition of State Parliaments. If this Parliament does not advance proposals for unification of its own accord, it will be forced to do so by the pressure of public opinion. The honorable member for Lilley **(Mr. Mackay)** said that he recognized that there was a growing feeling in Australia to-day in favour of unification. The honorable member for Fawkner **(Mr. Maxwell),** who spoke immediately before me, is a member of the new Australian party which is going to the country under the unification banner, according to a recent speech of its leader. *No* fault can be found with the proposal for unification unless one admits the argument that it would be breaking faith with the States. It has been said that the Constitution is a solemn contract entered into by the States which should not be broken, but that argument is untenable because the States themselves will agree to the alteration. I maintain that the original contract was that we were to be one people and have one destiny. " One people! One flag! One destiny!" was the cry. As for the one flag, that does not matter so much. "We might eventually have a red flag, and some people, I am afraid, would then drop dead. lt is generally recognized that the Commonwealth must possess power to control trade and industry. I hope that it will not be necessary for us to count the votes cast on the second proposal. Let us go " bald-headed " for the first, and make it unnecessary for us to ask for powers in respect of the second proposal. The honorable member for Fawkner appealed for the exercise of a Christian spirit in regard to industry. I do not ridicule his appeal; I applaud it. When you, **Mr. Speaker,** repeat the prayer each day, " Thy will be done on earth as it is in Heaven ", I listen with all reverence, but I believe, nevertheless, that if God tried to walk through the door into this House, there would be many who would wish to push Him out. There are many persons who do not wish the will of God to be done on earth. I do not include the honorable member for Fawkner. I know that he is absolutely sincere. It is necessary that the Commonwealth should have increased power to regulate industry today, because the problem of production has become so complicated with the advent of labour-saving machinery that things cannot be allowed to go on in the old, haphazard fashion. The country cannot go on breeding navvies when there are no more roads or railways for them to build. Practically all the railways have beelaid, and a first-class bitumen road will last for 30 years. Writing to me recently a man said, " If society does not provide work for a man, he owes no responsibility to the State, and naturally becomes a rebel against society ". Governments must find means of livelihood for the people. If they fall down on this job, and some one else treads on theinecks, they will darned well deserve it. Debate (on motion by **Mr. Marks'?** adjourned. {: .page-start } page 874 {:#debate-22} ### PAPERS The following papers were presented : - Norfolk Island Act - Ordinance of 1929 - No. 9 - Birds Protection. Ordinance of 1930 - No. 1 - Dog. {: .page-start } page 874 {:#debate-23} ### ADJOURNMENT {:#subdebate-23-0} #### Flight of Smith and Shiers - Purchase of Steamers for Tasmanian Service Motion (by **Mr. Scullin)** proposed - >That the House do now adjourn. {: #subdebate-23-0-s0 .speaker-KMU} ##### Mr MARKS:
Wentworth .- I direct the attention of the right honorable the Prime Minister **(Mr. Scullin)** to an important question which arises in connexion with the recent flight and providential rescue of Smith and Shiers. It will be remembered . that after FlightCommander Kingsford Smith and his companions in the Southern Cross were lost in the north-west portion of Australia, a committee, including Captain Geoffrey Hughes, held an inquiry in order to ascertain what spare parts, food, and water were carried on that occasion. 3 should like to know what has become of the recommendations made by that committee. Is there anything to prevent the Commonwealth Aviation Board making a regulation to ensure the safety of oversea airmen in this respect? If there is, will the Prime Minister get into communication with the State authorities, as it is desired that the Commonwealth should be able to make regulations to prevent a recurrence of what has happened on two occasions. If these men had not been discovered within three days they would have perished. In a recent communication which I received from certain shipping interests in Great Britain, it is stated that it is being rumoured in London - I do not place too much reliance on rumours - that the Commonwealth Government is making inquiries with a view to the purchase, for the Tasmanian service, of certain steamers which are tenyears old and which are now laid up, but which were once running between Ireland and Wales or England. If there is no justification for this rumour it should be denied. If the Government is making inquiries in this direction, it should consider the suitability of some excellent vessels now running between England and Ireland, and which would meet the requirements for a service between the mainland and Tasmania. {: #subdebate-23-0-s1 .speaker-F4Q} ##### Mr SCULLIN:
Prime Minister · Yarra · ALP -- The first matter raised by the honorable member for Wentworth **(Mr. Marks)** is more complicated than appears on the surface. It is receiving the attention of the Government. In regard to the second question, I may say that the Government does not propose to take notice of every rumour, because one which it failed to deny might be regarded as the truth. If the Government were making any investigation in the direction indicated, it would do so secretly, and the circulation of a rumour such as that mentioned by the honorable member would not be possible. Question resolved in the affirmative. House adjourned at 11.12 p.m.

Cite as: Australia, House of Representatives, Debates, 3 April 1930, viewed 22 October 2017, <http://historichansard.net/hofreps/1930/19300403_reps_12_123/>.

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