12th Parliament · 1st Session
Mr. Speaker (Hon. Norman Makin) took the chair at 2.30 p.m., and offered prayers.
Mr. FENTON (Maribyrnong - Acting
Prime Minister.) [2.31]. - by leave - The Government is deeply concerned at the serious position in which wheatgrowers and others dependent upon the wheat industry throughout Australia find themselves owing to the fall in wheat prices in the markets of the world, and Cabinet further considered the matter this morning. Early in the year the Government succeeded in having the Wheat Marketing Bill passed by this House, but it was summarily rejected in another place without Parliament being given an opportunity to reconsider the measure. The Bill provided all the machinery to enable wheat-growers to organize their industry on a national basis, and establish a central marketing board for wheat. Such organization would have been controlled by the wheat-growers, and would not have been subject to government control.
Last week the Acting Minister for Markets, at the urgent request of two State Governments, some members of this Parliament, and numerous farmers’ organizations, convened in Canberra a conference of Ministers of Agriculture and representatives of wheat-growers, cooperative and proprietary wheat distributing organizations, and flour millers, to discuss this great national problem. The conference was representative of every interest associated with wheat throughout Australia. It was hampered from the outset by the fact that there was no legislation on the statute-book which would enable the industry to take action in the present crisis. Three suggestions were made by the conference. One was a sales tax on flour used for Australian consumption, the proceeds of which would be used to pay a bounty on wheat. As we were assured by millers that the tax would be passed on, and would, therefore, increase the price of bread to the consumer, the Government could not adopt the proposal as a direct Government tax, at the present time, particularly in view ofthe large numbers of people out of employment and the reduction of incomes generally. The collection and distribution of the tax would have been very costly, and extremely difficult to administer. Further, the effect of a direct government sales tax on flour, we were assured, would be that the flour exported would be sold at a lower price than the flour used for Australian consumption. This, it was believed, would lead to the imposition of anti-dumping duties on Australian flour in oversea countries, a step ‘which would seriously affect our oversea flour trade, which is very valuable, and give a setback to the flour milling industry, which provides considerable employment.
Another suggestion made by the conference was that the Government should guarantee a price of 3s. a bushel at the railway siding, or, alternatively, fix the price above export parity for wheat for local consumption. This proposal could not be carried out because the Common- wealth Bank, which was approached by the Acting Minister for Markets, was not prepared to make any advance on wheat in excess of80 per cent. of its export value, even if the joint guarantees of the Federal and State Governments were behind it. Of course, had the Wheat Marketing Bill been passed, the Australian Wheat Board and the State Wheat Boards, in consultation, would have been in a position to fix prices for wheat required for local consumption. Under the Constitution, the Commonwealth has no power to fix prices.
The conference also asked that exchange should be allowed to take its natural course in the interests of the export trade. This is a matter under the control of the banks, but the Government is taking all practicable steps to improve the position in this direction, and is doing everything in co-operation with the State Governments and the financial institutions to alleviate the present very difficult position of the wheat-grower. Further, I am cabling to-day to the Prime Minister in London, asking him to arrange immediately for the Minister for Markets to proceed to Canada and America to consult with the respective Governments of those countries as to what united action might be taken with a view to bringing about some stability in regard to the marketing of wheat this year.
In conclusion, I wish to make it. clear that the Government fully realizes the parlous position in which thousands of wheat-growers and country storekeepers find themselves in regard to this year’s crop, and is most anxious to help in any reasonable and practicable manner within its power. To that end steps will be taken immediately to confer further with the Commonwealth Bank and State Governments in regard to finance for this year’s harvesting. One of the most serious aspects of the problem is the insufficiency of finance to carry on planting and harvesting operations during the next year. This situation is now engaging the Government’s attention, and wheat-growers can rest assured that everything possible will be done by the Commonwealth Government in cooperation with the State Governments and the financial institutions to alleviate existing difficulties.
– I ask the Acting Prime Minister what expense has been incurred by the Commonwealth in connexion with the trip abroad of the honorable member forReid (Mr. Coleman)? Was he sent’ to Europe, in the first instance, to represent the Commonwealth at the International Labour Conference, although on all previous occasions the Commonwealth had been represented by officers from Australian House? Did he subsequently attend the Mandates Commission, and later the Assembly of the League of Nations, and was occupation finally found for him at Australia House? What administrative experience had he had in any capacity to qualify him to report on the organization of Australia’s representation in London?
– A question relating to that matter appears on the notice paper.
Mr.R. GEEEN.- The Acting Treasurer (Mr. Lyons), in his financial statement, indicated that economies amounting to £1,230,000 would be effected in Government departments. Will the honorable gentleman inform the House how that estimate is made up?
– At a later stage I hope to be able to give that information, approximately, but obviously it will be impossible for me to state every detail of savings which extend over every department and every branch of the service.
– Has the Acting Prime Minister read a statement by the Commonwealth Statistician (Mr. Wickens) that the Commonwealth Bank could extend the note issue without danger to the Commonwealth?
– I have been in possession of that statement for a considerable time, and with most of its contents I heartily agree.
– Is the Acting Prime Minister aware that the Minister for Health (Mr. Anstey), at a public meeting, quoted a portion of what was, apparently, a confidential Cabinet document, and that the Commonwealth Statistician has since made a statement to the press more fully setting out the contents of his report than the Minister for Health had done? Does the Acting Prime Minister regard it as proper for one of his colleagues to disclose a portion of a Cabinet document at a public meeting? Such disclosure having been made, will he make the whole document available to honorable members?
– The document was not private.
– The Commonwealth Statistician said that it was.
– At my request the Commonwealth Statistician furnished a statement to me. My colleague, the Minister for Health-
-Read it with great interest.
– And was entitled to make use of it. The full contents of the document will be made available to honorable members in due time.
-Referring to the banking reform proposals of the Government, is the Acting Prime Minister aware that, if credits are made available by the Commonwealth Bank, I propose to purchase a controlling interest in the Canberra Times ?
– Order! The object of questions is to elicit, not to supply, information.
– Is the Acting Prime Minister aware that I propose-
– On a point of order, I. submit that questions asked in this House should relate only to matters of public interest.
– The conduct of the press of this country is a matter of the utmost importance to the public.
– A question put to a Minister of the Crown must relate to public affairs, to elicit information. The honorable member will not be in order unless his question complies with that condition.
– Is the Acting Prime Minister prepared to say that the project that I have formulated will enable me to give honorable members on this side of the House an occasional “ write-up “ in the press, and that fulsome eulogy of Opposition members will not be permitted? Will he give this matter earnest consideration ?
– I am afraid that I cannot follow the honorable member into his newspaper speculations, and I am unable to enlighten him on the matter he mentions.
– Has the right honorable member for Cowper (Dr. Page) intimated to the Acting Prime Minister that a complete break has occurred between the Country and Nationalist parties ?
Question not answered.
– Will the Minister for Home Affairs lay on the table copies of the correspondence arid telegrams that have passed relating to the quashing of certain convictions, and the remission of fines, in connexion with recent prosecutions at Port Darwin?
– If the honorable member desires any information regarding that matter, I shall only be too pleased to supply it to him.
– Has the granting of concessions to British firms to enable them to begin manufacturing in Australia been reconsidered, and, if so, with what result?
– I presume that the right honorable member refers to an application byRowntree and Company. I say definitely that the matter was under consideration at the time when the right honorable member moved the adjournment of the House to draw attention to it. On representations made by a deputation that waited on me, comprising the honorable member for Angas (Mr. Gabb), and the honorable member for Wimmera (Mr. Stewart), and other honorable gentlemen on this side of the House, further inquiries are now being carried out, and a decision will be reached as early as possible. The company concerned will receive even-handed justice.
Primage Duties and Sales Tax
– Was this Govern ment aware of the serious position of the wheat-growers when it introduced legislation ‘to impose primage duties and the sales tax on essential agricultural requirements? If not, will the Acting. Prime Minister now reconsider those duties with the object of relieving the wheat-growers of them?
– I do not say that the Government can relieve the primary producers of the primage duties on farm requisites ; but the Government, in conjunction with the Labour party, will do all it possibly can for the farming community.
– Will an opportunity be given to the House to consider the meaning of the statement that the Acting Prime Minister has made regarding wheat, or to consider whether, indeed, the statement has any meaning at all?
– The honorable gentleman knows full well that if he is not satisfied with any statement made during the early stage of a sitting of the House, he may revive the subject on the motion for adjournment.
– Prior to asking a question regarding wire and wire nail prices, I direct the attention of the Acting Minister for Markets and Transport to the following press statement: -
Following upon tlie increases in prices of from £2 7s.6d. to £29s. a ton made by the manufacturers of fencing- wire and other 8 gauge to 14 gauge wire as the result of the recent imposition of the duty of 52s. per ton and the abolition of the bounty, wholesale merchants have increased their prices for fencing-wire by £2 15s. a ton. The revised wholesale distributing price for 8 gauge black fencing-wire is £18 12s.6d. a ton, and for 8 gauge galvanized wire £20 2s.6d.
Wholesale prices of barbed wire and nails have been advanced owing to the higher cost of theraw material, and the price of wire-netting has been increased by1½ per cent. to cover the loss of bounty to the extent occasioned by the increase in the primage duty to 4 per cent.
Will the Minister, in accordance with the promise made, take steps to see whether the firms supplying these commodities are profiteering under the shelter of the increased duty?
– I leave it to the House to say, whether it is possible for me to give the honorable member an immediate reply to a question so full of figures, but Ican tell him that no fewer than 120 complaints have been made about the profiteering of Australian manufacturers, and inquiry has shown that 119 of those complaints were absolutely withoutfoundation. If the honorable member will hand me the paragraph he has quoted, I shall be glad to have the matter further investigated, and will furnish him with a reply.
– Arising out of that reply-
– It is not in order to base a question on a reply to another question.
– I leave it to you, Mr. Speaker, to decide whether the question I desire to ask is improperly based on the reply given to another question. I desire to know what happened to the 120th case to which the Minister referred. What was the name of the firm, and what action did the Government’ take ?
– At the moment I cannot recall the name of the firm, but I remember the action that was taken. The case was referred to the Tariff Board, which, after investigation, concluded that the small increase in price was amply justified.
– Is it a fact that the Labour party has determined in caucus that Parliament shall not rise until the Government has introduced proposals to deal effectively with unemployment? If so, when may we expect these proposals to be submitted to the House?
– I have already informed the Leader of the Opposition that the business with which the Government proposes that Parliament shall deal before it rises will be communicated to him in due course.
– That is very helpful!
– So soon as the Government has decided what business will be submitted to Parliament, it will, out of courtesy to the Leader of the Opposition and his party, acquaint thehonorable gentleman with its proposals. If he will wait, he will receive the information he desires.
– In country districts where the mail services have been curtailed, the natural resentment of the residents has resulted in the DeputyDirector of Posts and Telegraphs for the State being approached, either by a deputation or otherwise.’ To save the time and’ money of the persons affected by the curtailed mail services will the Minister insert in the local press, over either his name or that of the several Deputy-Directors of Posts and Telegraphs, a notice to the effect that where mail services^ have .been curtailed it is useless to take such action?,
– I could npt undertake to do what the honorable member desires, because there may be isolated cases in which a further investigation would show that the curtailment of a mail service was not justified. I made a’ very full statement of the position, from the departmental point of view,” the other evening. Some honorable members have had copies of that statement circulated in their districts. I cannot do more than make it clear that this course has’ been ‘adopted only because of the’ financial’ stringency. The department investigates each case fully before taking action. It would not be possible to make a general sweeping statement, such as that suggested by the honorable member, because of the occasional cases in which further consideration might alter the decision of the department.
– Has..- .the Department of Trade and Customs arrived at any decision in regard to the remission of the duty on petrol . consumed in stationary engines and other engines which do not use the roads?
– The work of the department in this connexion has been somewhat hampered by the action of the present Deputy ‘ Leader of the Opposition (Mr. Gullett) in deleting some words from the tariff schedule last year, on the ground that such an arrangement was unworkable.
– When does the Acting Prime Minister expect to be in a position to make a statement regarding the proposed gold bonus?
– The honorable member’s question deals with a question of policy. It is not usual to make an announcement of policy in answer to a question.
– Will the PostmasterGeneral cause an inquiry to be made in order to ascertain whether the loss of revenue due to numbers of persons having had their telephones disconnected on account of the increased charges will not more than counter-balance the returns from the increased charges on the telephones which remain?
– I shall be glad to make the inquiry asked for by the right honorable member.
– Can the Acting Prime Minister say whether a statement appearing in the press of the 6th November, that steps were being taken to bring the staff of the Repatriation Commission under the control of the Public Service Board, as members of a provisional service, is correct?
– This matter is being considered by the Government; but I am not in a position to make a definite statement in regard to it to-day.
– Is the Acting Minister for Markets and Transport aware that in New Zealand a remission of the duty paid on petrol is made to persons in respect of petrol used by them in engines which do not .travel on the roads, such as farm tractors and stationary engines ? Will he also say whether, when he promised that he would see whether similar remissions could be made in Australia, he was aware that the tariff schedule had been altered? Further, will he say what special difficulty has been encountered in reverting to the original arrangement?
– I can explain the position by quoting the reply given by an honorable gentleman now sitting in Opposition to a similar question asked by me when I sat on the other side of the chamber. The honorable gentleman then said that New Zealand was in an altogether different position from that of Australia, because there are no local refineries in that dominion, whereas in Australia there are the refineries of Commonwealth Oil Refineries Limited and the Shell Company. He said also that it was extremely difficult, if not impossible, for the department to say whether the oil distributed by these two suppliers was refined locally or imported ready for use. I repeat that statement in reply to the question of the honorable member.
– Is it a fact that the Acting Minister, when addressing an election meeting at Rockhampton prior to the last election, promised that, in the event of Labour winning the election, a rebate of the duty paid on petrol would be made in . certain instances ?
– In a speech which I made at Rockhampton, I did say that if the Labour party were elected to office I would go into the whole matter, with a view to arriving at some workable scheme by which a rebate could be made in respect of petrol used in engines which do not use the roads. An honorable gentleman opposite, when a member of the late Government, stated in reply to a similar question by me-
– I rise to a pointof order. I asked the’ Acting Minister a question about a speech made by him at Rockhampton. He has answered that question, and is now endeavouring to quote a statement made in this Houseby some other person. I submit that he can only reply to the question asked of him.
– It certainly would not be in-order for the Acting Minister to make a speech, or to express the views of others, when purporting to answer a question; but I cannot anticipate the answer which a Minister intends to make. I shall not permit the Acting Minister to proceed further if I feel that he is transgressing the Standing Orders.
– The Leader of the Opposition quoted one portion of my speech at Rockhampton, but I quoted the other portion in which his party said it was absolutely unworkable to give the rebate; that it was deleted from the tariff schedule on the ground that it was impossible to put into operation. The Nationalist party said that the matter was closed; but it is not closed, and if any honorable member can put forward any helpful suggestions as to how the rebate can be put into effect, I shall be only too happy to consider it.
– I wish to ask the Acting Minister for Markets and Transport how many more months does he expect will elapse before he has arrived at a workable scheme in this connexion ?
– Not half so long as the right honorable member took, when Treasurer, to try to get his scheme for new States put into operation.
– Does the Acting Minister for Trade and Customs intend to carry out a promise that he made at Rockhampton during the last election in the following words: -
Before the last elections the Bruce-Page Government promised to refund petrol duty charged on petrol used in tractors and farm engines that do not run on roads. They failed to honour that promise, and recently they wiped out the clause in the tariff schedule providing for that refund on the pretext that they found it impracticable to put it into operation. The New Zealand Government on the other hand seem to have no difficulty in making the refund. Why should the farming community have to pay this road tax duty on petrol not used in engines running, on roads?. Nobody can justify the action of the Government in this regard.
Does the Acting Minister propose to carry out the definite promise that he made at the last election?
– I have already said that the subject is not closed, and that the Government is prepared to consider any helpfulsuggestions from honorable members. I explained the position in regard to New Zealand, which was pointed out to me by the then Minister for Trade and Customs. I would remind the honorable member for Warringah (Mr. Parkhill) that he sat behind a Nationalist Government for years, but failed to getit to do what he now advocates.
asked the Acting Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
(a.) To the International Labour Conferenct - Major O. C. W. Fuhrman, O.B.E. and Miss Hann from London.
To the Imperial and Economic ConferenceMr. E. Abbott, Sir B. B. Garran. K.C.M.G., M.A., Mr. M. Threlfall, Mr. W. H. Bale, Mr. L. Cameron, Mr. C. B. Carter.
asked the Acting Treasurer, upon notice -
– The information is not available, but in view of its importance steps are being taken to compile it.
asked the Acting Minister for Trade and Customs, upon notice -
– The answers to the honorable member’s questions are as follow : -
Proposed Sales Tax on Flour.
asked the Acting Minis ter for Markets, upon notice -
Whether he has yet devised any alternative scheme for assisting the wheat industry to replace the proposal for a sales tax on flour, which has, apparently, been rejected by the Cabinet?
– Because of the serious position in which wheat-growers now find themselves, since the defeat of the Wheat Marketing Bill by the Senate, the Government last week called together in conference at Canberra, representatives of all wheat interests to consider the problem. The conference failed to put forward any scheme which, in the opinion of the Government, could be adopted without adversely affecting trade and industry, taking into consideration the refusal of the Commonwealth Bank to advance more than80per cent. of the market value of wheat. The Government is still closely examining the position with the object of doing everything possible to assist wheatgrowers, and if the honorable member has any helpful scheme in mind to deal with the situation the Government will be pleased to consider it. The Acting Prime Minister in his statement to-day showed that the Government realized the seriousness of the position by stating that the Government would immediately confer further with the Commonwealth Bank and State Governments in regard to finance for the harvesting of this year’s crop.
Revenue and Expenditure - Rentals
asked the Minister for Home Affairs, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Home Affairs, upon notice -
– The answers to the honorable member’s questions are as follow : -
Mr. McGRATH (through Mr. Price) asked the Minister for Home Affairs, upon notice -
– The answers to the honorable member’s questions are as follow : -
Mr. McGRATH (through Mr. Price) asked the Minister for Home Affairs, upon notice -
Will he obtain from the Commonwealth Statistician an up-to-date comparison of house rents at Canberra with those of Sydney and Melbourne ?
– The information desired by the honorable member is as follows : -
asked the Acting Treasurer, upon notice -
What are the particulars of the holdings, of inscribed stock and bonds held by various interests, in the Commonwealth loan maturing on 15th December?
– The following table sets out the information asked for.: -
asked the Acting Treasurer, upon notice -
In connexion with old-age and invalid pensions, will he supply the following information: -
The number of pensions in force on 30th September, 1930?
The number of pensions in force on 30th September, 1929?
The approximate liability for the present financial year in respect of pensions in force, including those for inmates of charity institutions, and payments for their maintenance?
The total amount for the previous financial year?
– The answers to the honorable member’s questions are as follow : -
asked the Acting
Treasurer, upon notice -
– The answers to the honorable member’s questions are as follow : -
The following papers were presented : -
National Debt Sinking Fund Act - National Debt Commission - Seventh Annual Report. for year ended 30th June, 1930.
Ordered to be printed.
Shipping Act -
Commonwealth Shipping Board -
Australian Commonwealth Line or Steamers -
Treasury Loan Account as at 30th April, 1930.
Liquidation Account for period1st April, 1929, to 30th April, 1930; together with the Auditor- General’s Report.
Cockatoo Island -
Balance-sheet as at 31st March, 1930; together with the AuditorGeneral’s Report.
Profit and Loss Account for year 1st April, 1929, to 31st March, 1930.
Debate resumed from the 19th November (vide page 496), on motion by Mr. Lyons -
That the paper be printed.
Upon which Mr. Latham had moved, by way of amendment -
That all the words after the word “ That “ be omitted with a view to insert in lieu thereof the words, “ the Government should introduce proposals more closely in accord with the agreement made by the Prime Minister withthe Premiers of the States on the 21st August last at Melbourne.”
.- Ithas been asserted that this debate has been too greatly prolonged. I venture the opinion that the present financial position is the most critical that the Commonwealth has ever experienced, and that, therefore, any discussion upon it must be of very great value, not only to the members of this Parliament, but also to the people of Australia.
At the outset, I wish to state the real reasons for our critical financial position. We have to recognize that the existing distress is an effect, not a cause, and that it arose during the time that the Bruce Page Government occupied the treasury bench. I make that statement because the Leader of the Opposition (Mr. Latham), who within recent months has delivered a number of speeches to national organizations, informed the annual conference of the National Federation on the 23rd September of this year that in. the Commonwealth Parliament Labour members no longer blamed the late Government for the present position. That is contrary to a statement made in Melbourne on Tuesday last by the late Prime Minister, Mr. Bruce, the report of which reads as follows : -
The starting point was for us all to admit that we had made mistakes in the past. He would admit that he had made mistakes, when he was entrusted with high responsibility. (Hear, hear!) Let us all try again with a clean sheet and face this disaster which had come upon. us. (Applause.) Australia, deluded by a prosperity which had come to few countries, not unnaturally lost her head. There had been governmental, municipal, public, and private extravagance - extravagance practised by every individual, rich and poor. We all had made the mistake of thinking the good times would go on for ever. There wasno thought for the future, for the time when depression would come upon us.
Apparently, a warning came to the late Government, but it did not recognize it. Mr. T. R. Ashworth, the president of the Employers Federation, who is not a friend of. the Labour party, addressing the 1930 annual conference of the Australian Women’s National League, made the following statement: -
For the eight years 1920-21 to 1927-28 we havebeen overspending and storing upthe financial troubles from which we are now suffering. Imports of 1 , 160 millions have exceeded exports of 1,097 millions by 0 per cent. for the period. We required an excess of exports of about 24 per cent. to pay overseas interest,&c., so that the average annual deficiency is 30 per cent.
He went on to say -
Despite the unsound Post Office policy, and the extravagance of the Hughes administration for a short period, the Commonwealth debt in 1922, apart from war debt, amounted to only £5 15s. 3d. per capita,. But the BruceGovernment managed to increase the amount in seven years to £14 3s.5d. per capita - £515s. 3d. for 22 years and £8 8s. 2d. for only seven years - an increase of 156 per cent.
The Deputy Leader of the Opposition (Mr. Gullett) also delivered a number of addresses during the recess. The Melbourne Herald, on the 26th September last, reported him as having said, “ Has not the great Australian Workers Union acquiesced in a reduction of 20 per cent. in the shearing rates “? That is not the case; they accepted the reduction under the strongest protest.
– They worked under it; is not that acquiescence?
– The honorable gentleman went on to say, “Are not the coalminers of New South Wales working cheerfully on a reduction of 12½ per cent.” ? Note the word “ cheerfully “! As a matter of fact, the Melbourne Herald inspires the majority of the speeches that are made by the Deputy Leader of the Opposition. . What it says to-night he repeats to-morrow, and its inspiration is beer and rags, beer in the case of a number of its directors, and rags in the case of the firm of Myers, which controls its advertising columns. The Deputy
Leader of the Opposition asked, “ Has not the position become a little ridiculous”? Evidently it has, when a public man makes statements such as those to which I have referred.
The right honorable member for Cowper (Dr. Page), addressing a large meeting of the Australian Country party in the Melbourne Town Hall on the 23rd September last, spoke at length regarding the activities of that party. This alleged speech was sent to a number of country newspapers, and I have before me at the present time the report that appeared in the Stawell Times of the 24th September. I had the good fortune to meet a person who attended the meeting, and he informed me that he was completely surprised at the wonderful oratory, the flowing periods, and the flamboyancy of the right honorable gentleman, shown by the report in the Stawell Times, but contrasting strongly with, the actual utterances of the right honorable gentleman in the Tow Hall. Apparently the report was written by the Country party publicity director, of whom we. have heard a good deal, -and from whom I shall make a quotation later. The following oratorical jewel is so wonderful in its brilliance that it ought to scintillate in the pages of Hansard. -
To-night we light the torch that will set Australia ablaze with the desire to replace suspicion with trust, ill-will with good-will, -class-consciousness with community spirit, and class-conflict with national unity. Let us burn the old timber that has choked the wheels of industry. We are all Australians. Let us face the world united as Australians ; not as :a race of carping, bitter fighting opponents, striving each for some petty individual aim, but as a great nation in which all are ready to make some sacrifice of their own desires in order that the whole may impress the world with our greatness, progress, and develop.ment.
The report also contains the follow^ ing words, which I am sure were not uttered in the Melbourne Town Hall: -
During the war Australia was startled by the preaching in our midst of anti-British sentiments through the vehicle of the Perth Labour Conference and extremists. To-day in a similar crisis, we have Labour conferences carrying similar anti-British resolutions at the dictation of the same sinister interests, repudiating the honorable agreement entered into by their own Parliamentary leaders, Federal and State, for the rehabilitation of the Commonwealth.
That statement is grossly inaccurate - I would express myself more strongly if I were permitted to do so - and is quite inconsistent with the noble non-party sentiments expressed at the outset. The right honorable member is also reported as having stated -
We need’ enthusiasts who will carry the flaming torch to the dry timber which encumbers the machines of production ; who will storm the breach of outworn theories and settled policies which have settled themselves and many of us.
This flaming torch becomes rather monotonous. I was interested to read in newspapers circulated in my constituency, certain matter supplied by a press liar, who is known as the publicity agent of the Country party. The right honorable member, for Cowper (Dr. Page) has frequently stated that large sums of money were spent on reproductive works while he occupied the position of Treasurer. I have been endeavouring to ascertain the amount which was spent on such works, and shall endeavour to show the House how reproductive they actually were. The publicity agent for the Country party states -
While the various component parts of the Labour party are trying to agree, it is worth while harking back to the days of a government which knew its own mind and carried out its policies in those directions in which it believed the people could best be served. The Government which is referred to is the Bruce-Page. Government in which the Country party co-operated to ensure that rural interests would receive the attention which their proved importance warranted.
From the countryman’s point of view, the existence of that Government has been justified by the manner in which the funds of the Commonwealth were spent, alone; and the condition of the nation at the moment proves that every penny spent on country development was justified in a nation which depended so largely for its prosperity on the state of its primary industries.
An examination of the finances of that Government shows in a striking manner which no criticism can steal away, the interest, real and practical, which was shown in rural affairs. Let us examine the finances for the years 1923-4 to 1928-9 inclusive. This examination will show an expenditure of over £34,000,000 on country works - money spent solely in country development. £1,250,000 was invested in the Murray waters scheme; £3,720,000 on commencing the unification of the railway gauges, ‘by linking Brisbane and Sydney with a standard gauge line and opening up thousands of acres of new country; £810,000 on wire netting for country settlers; £50,000 for health laboratories; £375,000 for the Kalgoorlie-Port Augusta railway; £3.415,000 on the North Australia-Port Augusta railway; £1,070,000 on country buildings for the Postal Department; £11,400,000 for country telephones; £50,000 for country postal sites; £920,000, migration works; £7,750,000 on roads; £80,000 on bridges and bores in Western Australia; £30,000 in South Australia; and £50,000 loan to Papua, and £111,000 on lighthouses which was spent outside the city. In addition, £7.400,000 was spent on fleet construction, £1,500,000 on defence equipment, £4,000,000 on war service homes, and £400,000 subscription to Amalgamated Wireless for equipment, which also benefited the country. There is no answer to that as a record of rural administration.
Apparently the whole of that expenditure was incurred with the intention of assisting rural development. According to information supplied by the Acting Treasurer, the money spent by the late Federal Government on the works mentioned was borrowed at £6 13s. 4d. per cent. In response to a letter which I submitted to the Treasury, I received the following information : -
In response to your letter of the 4th October, 1930, I desire to forward the following information on the question raised by you: -
Expenditure during the years 1922-23 to 1928-29 from loan for works and other purposes was £55,482,867.
An average return of 4.7 per cent. has been received from money borrowed at £6 13s. 4d. per cent. As certain information I required was not supplied in the letter just quoted, I ask the Acting Treasurer (Mr. Lyons) what revenue was obtained in 1927-28 from other works. I find that the return in 1928-29 from the River Murray works, which cost £3,720,000, was only £65,000. There was no return from the roads expenditure, and none from the bridges and wharfs constructed in Western Australia and
South Australia for the Commonwealth Government. Of course no return could be expected from the defence expenditure. As I have said, the total return for these so-called reproductive works was only 4.47 per cent. In the circumstances it was disgraceful for the Country party to claim any credit for this expenditure. I cannot see how a single member or supporter of the Bruce-Page Government could boast about this expenditure. The writer of this bulletin must have a queer sense of humour, or a poor opinion of the intelligence of the people who are expected to read it. His effusions are regarded only as a joke, and appear only as a fill up.
In spite of what Mr. Ashworth and Mr. Bruce have said, honorable members of both the Nationalist party and the Country party still assert that the BrucePage Government was economical, and continue to attack this Government for trying to repair the damage done to the finances of the country by the previous Government. I am amazed that honorable members opposite who were members of the last Parliament should have the temerity to preach economy. But apparently they are now quite willing to out all expenditure, irrespective of the consequences, with a view to rectifying their own mistakes. It is just as reasonable for the members and supporters of the previous Government to preach economy as it would be for a cemetery worm to advocate cremation.
The Bruce-Page Government went on its reckless way in spite of the numerous warnings that were issued during its period of office. Quite recently I had the good fortune to find a pamphlet entitled Australian Finance written in England in 1926, by SidneyRussell Cooke and E. H. Davenport and sent out to me by a friend. The publication was “ dedicated to the Imperial Conference. 1926,” which Mr. Bruce attended. In their introductory remarks, the authors said -
In the whole British Empire there is no more voracious borrower than the Australian Commonwealth. Loan follows loan with disconcerting frequency. It may be a loan to pay off . maturing loans, or a loan to pay the interest on existing loans, or a loan to repay temporary loans from the bankers. The British public, kept in splendid isolation by the financial advisers of the Commonwealth and States, has no means of judging one loan from another. The law of England once again assists the debtor by admitting without question Australian with other colonial loans as trustee securities. There is even an idea current with uninstructed investors that colonial loans are guaranteed by the British Government. The way is thus made dangerously easy for colonial borrowers. Without conceding a line of information, or any measure of protection to the lender, they get the money they want when they, want it. No dominion takes such full advantage of these unique opportunities of raising cash as the Australian Commonwealth. But is the system safe? Are trustees in this country justified in continuing to hand over a large proportion of the nation’s savings to such reticent and pertinacious borrowers? It is, in fact, high time to ask the question - Is Australian finance sound ?
The answer must depend upon the rate at which Australia has been borrowing since the war, the proportion of the national wealth that has now been mortgaged, the present rate of expenditure, and above all the purposes for which the loans are raised, and the steps that are being taken to reduce’ the debt by the provision of adequate sinking funds. These questions answered, it will remain to consider the financial position in relation to the economic development of the Commonwealth.
At a later stage they wrote the following words, which were prophetic : -
The Commonwealth expenditure out of loans also contains some interesting items. For example, there is a subscription to the capital of the Commonwealth Oil Refineries, Limited, amounting to f 31 8,750 for the period 1920 to 1925. This money was apparently subscribed in order to fight the established oil-importing companies. Commonwealth Oil Refineries, Limited, was formed in 1920 to bring into effect an agreement made between the Commonwealth of Aus’tralia and the Anglo-Persian Oil Company for the import and refining of Persian crude oil and the marketing of the refined products. This State trading scheme naturally brought the Commonwealth Govern-i ment into competition with the private commercial interests. In consequence the Statecontrolled company disclosed a loss on its 1925 operations, amounting to £53,000. Mr. Bruce talks of “exploitation”, and charges the oil companies with selling at exorbitant prices. Yet the heavy loss sustained by Commonwealth Oil Refineries, Limited, in 1925, was incurred when selling petrol during the whole of that year at the same prices as those charged by the large oil companies. Mr. Bruce has now committed the Commonwealth Oil Refineries, Limited, to the policy of slightly underselling the private importer, and anticipates another loss for the State oil company in 1926. Is the Federal Government justified at all in raising money in this country to be used in uneconomic competition with legitimate private enterprise in which the British investor is interested? [Quorum formed.]
Although honorable members opposite, who were supporters of the last Government, may disclaim all responsibility for the financial difficulties which are now facing the country, they cannot disclaim responsibility in their capacity as members of this Parliament. They should, in the present circumstances, be doing everything possible to improve the credit of the nation; but they are doing the very opposite. I regret that upon three occasions the Leader of the Opposition (Mr. Latham) has made remarks in this House which have seriously damaged our credit. It has always been the custom, when speeches have been made in the chamber in connexion with the death of members or former members of the Parliament, carefully to exclude from the proceedings of the’ day all party bitterness, and to adjourn immediately after the speeches have been delivered. This is in keeping with the requirements of common decency. But upon one such occasion recently the Leader of the Opposition, on the motion for the adjournment of the House as a mark of sympathy with the relatives of certain deceased exmembers of the House, made a vigorous attack upon the Government, and incidentally seriously injured the credit of the country at the time when the Prime Minister (Mr. Scullin) was trying, overseas to improve our financial position The honorable gentleman could, at least, have waited until the following Tuesday to launch his attack. He was guilty of a breach of respectful precedent that cannot be condemned too strongly. The conduct of the honorable gentleman reminded me- of the actions of those cemetery touts who disturb mourners at the graveside, ‘ endeavouring to obtain orders for in memoriam printing. It. must he remembered that the Leader of the Opposition has behind him a very great sounding board, the Nationalist press. I read the daily edition of the Times, and frequently I find therein cabled reports, of the honorable gentleman’s remarks. They generally affect Australia’s credit adversely.
The other reprehensible action was his questioning of the Acting Prime Minister concerning resolutions alleged to have been carried by the Labour caucus. The honorable gentleman again did his utmost to injure our national credit. It can be safely assumed that no newspaper report of caucus happenings can be trusted, as it emanates from the mouth of a traitor from a polluted source. No decent man would betray his party.
– I read the resolutions in the Labor Daily. Surely that is not a polluted source.
– Sometimes a vile liquid can appear in a crystal vase. “Whatever the source of the information, it is a dirty and indecent one that cannot be trusted. The Leader of the. Opposition occupies an honorable and responsible position, for which he draws additional remuneration, and he-, should be loath to injure the country’s stability, particularly in such grave times as the present. It is not playing the game.
In his speech on. the motion before the House, the Leader of the Opposition urged that there should be greater production and the practice of true economics. When speaking in Geelong tho honorable gentleman was . unpatriotic enough to warn British manufacturers who intended to establish industries iti Australia that there were bolshevik elements in our midst which would prejudice their activities. He is reported in the Industrial Mining Standard, a Nationalist journal, of the 28th August, as having said that the White Australia policy was an interference with economics.
– Why not be fair and admit that the honorable gen tier man .supported the White Australia policy ?
– That statement must either be denied or accepted.
– Why does not the honorable member be fair and quote the rest of the statement?
– I am quoting everything that appears in this paragraph which is taken as the most important part of the speech. If the Leader of the Opposition denies that statement he will have to quarrel with this precious Nationalist organ.
The matter of inflation has been made a prominent issue in this debate. Undoubtedly deflation has proceeded too far. Unfortunately for the people of Australia, the gold standard was re-estab lished before the nation was prepared for it. The immediate, effect was a grant of £330,000 to bondholders as the money was lent at a time when our £1 was worth from 13s. 6d. to 14s. That is well known to any student of economics. When at Colombo, I had the experience of obtaining an Australian £1 note and 7s. in silver for a sovereign that I exchanged. It was recently stated that the honorable member for Reid (Mr. .Coleman) could obtain only 12s. in New York for our Australian £1 note. By its premature re-establishment of the gold standard the Bruce-Page Government increased the actual debt of the Australian people by one-third, and gave that tremendous grant to the bondholders. In addition the rate of interest was increased from 5 to 6 per cent. Apart from the need of gold in the community, we should be justified, as a matter of equity, in paying bondholders the value of their loans to the country. It is unfair that, because of the machinations of some stupid financiers who temporarily, occupied the treasury bench, we should be called upon to pay 20s.” for every 13s. 6d. that was contributed.
– If, as the result of legislative action, there were a depreciation in the value of bonds, would the honorable’ member suggest that the difference in value be- made up to the bondholders ?
– If such a situation arose, I should try to meet it in the most equitable .manner. I am surprised that the business men among honorable members opposite do not realize that our troubles are due mainly to the severe contraction of credit. Many persons in business are hampered in their operations because of the difficulty they experience in securing accommodation. I do not blame the trading banks, because I believe that they have done everything in their power to meet the situation, and that some institutions, having made almost unprecedented advances against deposits, are in a position of extreme peril. It has been reported that the advances made by one of the trading banks represent 116 per cent, of its deposits; an unprecedented and most unsafe position. Nevertheless, it is almost impossible for business men to secure the accommodation which they require to carry on their businesses. I heard of one man, who had the utmost difficulty in obtaining an advance of £400 against security worth, at least, £2,500.
Credit is the life-blood of the community. Practically all businesses are conducted on bank overdrafts. If a business man is unable to obtain finance, his business becomes absolutely disorganized. We are in our present position through causes that are beyond our control. All financial authorities are agreed that the gold supply of the world is not adequate for the requirements of all countries, but if, by a lucky chance, we made an overwhelming gold discovery in Australia, or if a mountain of pure gold’ were reported in the South Polar regions, gold would then be a drug on the market and, possibly, we should have to discharge our obligations by paying 30s. in the £1. Gold is merely a token of value, and since there is a world-wide scarcity of the precious metal, it is obvious that, in our present difficulty, we would be justified in adopting some other expedient to oil the financial machinery of the nation. The shortage of gold in this country is becoming very acute. Recently, our reserves were reduced from £22,000,000 to £15,000,000. In 19.24, when I was in London, there was an extraordinary shortage of copper. To meet the situation certain business firms were allowed to issue tokens of their own as emergency currency until the supply of copper again reached normal dimensions. Within the last week or two, Mr. Wickens, the Commonwealth Statistician, presented a financial report to the Cabinet. The Canberra Times of to-day’s date, referring to the document, states -
The Commonwealth Statistician (Mr. Wickens) considers that the present system of deflation should be checked, and that some form of what might be termed inflation might be adopted.
He said yesterday that the present big fall in prices in Australia was having a disastrous effect on business, and was increasing unemployment. The’ only way to check the alarming fall in prices and values, which seem to be ending nowhere, was to check deflation.
It has been urged that, if there were an inflation of the currency by from £20,000,000 to £50,000,000, the people would fear that this temporary expedient might become a permanent feature of our finance policy. On this point the honorable member for New England (Mr. Thompson) on Tuesday night said that, although injections of morphia might be beneficial to a sick person in great pain, there was the danger that the drug-taking habit might be established. He suggested that, while a certain amount of inflation of the currency might be a good medicine, it would be injurious as a steady diet. I would remind the honorable member that, because morphia is in certain circumstances administered to a patient and is of proved efficacy, it would be extremely foolish to withhold .the remedy merely because of the fear that it might be abused. The same argument might be applied to a policy of currency inflation as a cure for the financial illness of a nation. It is admitted that the present crisis is unprecedented in the history of the Commonwealth. It is also admitted that it is due, in large measure, to the deficiency in the gold resources of the world. It would seem, therefore, that inflation of the currency is necessary. As to the future, I trust that, if I am in a position of responsibility, I shall have enough courage to stand against any attempt to carry the policy beyond a. reasonable margin of safety.
– How would the honorable member determine the degree of inflation to be authorized?
– That would be determined, I suggest, by the volume of reproductive works necessary for the development of the country. If the proposal pf the honorable member for Adelaide (Mr. Yates) had been submitted without attachments or conditions, I believe it would find general acceptance among the majority of Government supporters. Currency does not consist only in bonds, notes or coin ; it includes anything that can be used for barter or exchange. It may, therefore, comprise bonds, banknotes, bills-payable at sight, cheques, or coin ; and if one form of currency is replaced by another, it does not necessarily follow that there is inflation. Bonds, payable to order, are used very often as portion of the purchase money in business transactions, because, being payable to order, they pass from hand to hand. Australian war gratuity bonds were accepted by many life insurance companies in payment of premiums, and in that way they became part of the currency. We require immediately to borrow £28,000,000, and this is an opportunity to inflate credit by withdrawing a certain amount of one form of currency and substituting a more liquid form.’ If I were Treasurer I would ask the Commonwealth Bank to institute credits for that £28,000,000, and the investment would be reproductive because the sinking fund contribution at compound interest - would wipe out the whole of the debt in 13£ years, and the Commonwealth would not have to pay any interest outside Australia or at all. That form of inflation will, I trust, yet be adopted by the Commonwealth Bank, when it takes up a large part of the proposed loan.
– What would the honorable member do when the next loan became due?
– I do not anticipate that the present crisis will last long. With a Labour Government in power in the Commonwealth and our Prime Minister active in the United Kingdom, I believe the crisis will pass within twelve months, if the members of the Opposition do not meanwhile ruin the credit of the Commonwealth. “ Consequently, the proposed inflation would be merely a temporary expedient to meet existing requirements.
– The honorable member has not answered my question.
– One of the greatest financial experts of modern times, Mr. J. M. Keynes, has stated that Australia has deflated too rapidly, and I have quoted the remarks of Mr. Wickens. The honorable member for Fremantle (Mr. Curtin) referred to the opinion expressed by Mr. E. C. Dyason,- President of the Economic Society of Australia. If the honorable member for Angas (Mr. Gabb) will refer to those authorities he will find that they agree that deflation has been carried too far, and, that some inflation is necessary.
The Leader of the Opposition (Mr. Latham) said that the Government’s proposals for reducing the contribution to the sinking funds were unprecedented in British communities, and quite unjustified. I think the course proposed is eminently justified in the present circum stances of the Commonwealth, provided that we continue the contributions to the sinking fund that are stated in the prospectuses upon which the Commonwealth has borrowed. The Leader of the Opposition could not have studied the history of the British national debt, or he would not have stated that the Government’s proposals are unprecedented. I quote from the report of Lord Colwyn’s committee on national debt and taxation, made on the loth November, 1926 -
It was proposed in the budget of 1914-1915 to reduce the fixed debt charge to £23,500,000. On the outbreak of war, however, the payment of the new sinking fund was suspended, with the exception of £1,000,000 applied to the redemption of drawn exchequer bonds. The suspension continued up to the end of 1920, but the new sinking fund was resumed for the two following years. In 1922-1923, as a temporary measure, the new sinking fund, was again suspended, and in the following year the basis was entirely altered.
I ask honorable members to contrast the extreme action taken by the British Government with that now proposed by the Commonwealth Government. Under section 45 of the Finance Act, 1921, the British Treasury must issue from the consolidated fund “ as soon as may be after the close of each half-year during which the average daily price of the loan certified by the Bank of England has been below £90 per cent., a sum equal to not less than one per cent, of the amount of the loan outstanding at the close of that half-year to be applied in the purchase of-conversion loan for cancellation.” The British Government suspended the operation of that provision.
– The British contribution of 1 per cent, to the sinking fund is twice as great as that of the Commonwealth.
– Yes, but the whole contribution was suspended. The Commonwealth is not proposing to suspend its § per cent, contribution to the sinking fund, but merely to divert to the relief of the current budget any German reparation payment received during this year, and half of the profits of the Commonwealth Bank. The new sinking fund now in operation in Great Britain will not pay off the national debt in less than 153 years, while ours will be extinguished in 35 years. One of the recommendations of Lord Colwyn’s committee was- that instead of £50,000,000 that is now applied to the redemption of the national debt, the amount should be increased to £75,000,000 in order to reduce the term in which the debt would be liquidated. Even if the German reparation payments and. the profits of the Commonwealth Bank be deducted, Australia will still be paying more towards the reduction of its sinking fund in accordance with the loan prospectuses than the United Kingdom is paying.
– Australia borrows externally, but Great Britain does not.
– The honorable member overlooks the fact that although the United Kingdom is not borrowing externally now, its debt to the United States of America is very considerable. I remind the Leader of the Opposition also that the British sinking fund was suspended by different Chancellors of the Exchequer - Gladstone, “Winston Churchill, and Lloyd George. Mr. Gladstone stated that in times of financial stress arid crisis the suspension of the sinking fund payments was completely justified. Australia is passing through critical times, and critical times require desperate remedies. Our country must not default, but other remedies having failed, those responsible for the Commonwealth’s safety and progress must see that old shibboleths do not hinder courageous and necessary action.
.- I was very pleased to hear the honorable member for Corangamite (Mr. Crouch) disapprove of any scheme of government borrowing for the purpose of .competing with private enterprise, and I hope that nothing of that kind will be attempted by the present Ministry. I was sorry, however, that he declared that the interesting statements published in the Labor Daily, regarding the doings in caucus, came from a polluted source.
– So they did.
– The Labor Daily?
– I did not imagine that a journal which is supposed to express the opinions of honorable members opposite would be guilty of publishing tainted information. I suppose the honorable member means that somebody “ blew the gaff.” But is it not fortunate that the people should be able to know, even from a polluted source, that after the leader of the Labour party had announced in Parliament the policy of the Government, some of his supporters are prepared to stab him in the back ? Undeniably, Australia is in a very bad financial position, and there is no doubt as to where the responsibility lies. For eight years . I reiterated in this House the warning that we were living in a fool’s paradise, and that it was imperative that we should conserve our resources, put our house in order, and endeavour to live within our means,, instead of being dependent upon- borrowed money. The trouble has now become so acute that it is the bounden duty of every one of us -to face the facts courageously, and take the public into our confidence. It is useless to withhold the facts; let us realize the seriousness of our position and consider how we all can work together to restore our country to its old position of solvency. Had the Government tried earnestly to carry out the policy enunciated by the Prime Minister before he left for Europe, and still advocated by the Acting Treasurer (Mr. Lyons) ; had it shown a clear determination to reduce expenditure and make the Commonwealth live within its means, it might not have succeeded in balancing the budget this year, but it would have gone a long way towards doing so. No such effort was made, but that should have been the endeavour of every section of the community. When hundreds of thousands of our people are unemployed and suffering misery and starvation, it behoves all of us to cooperate in winning back prosperity for the nation. An ailing man, if he is wise, does not consult the newspaper advertisements for quack medicines; he seeks the best medical advice. When a country is financially ill it should act on the advice of financial experts, and not rely on the nostrums prescribed by raw students, mere neophytes in economics. I say that without desiring to be offensive to the honorable member for Adelaide (Mr. Yates), whose sincerity I do not doubt. He has been carried away by his reading of certain financial theories. I, too, have endeavoured, by reading, to learn something of the intricacies of finance; but I confess that I know very little about the subject. At the head of our financial concerns, however, are men whose whole life has been devoted to the study of finance and economics, and by their advice we should be guided. Unless drastic steps are taken to put the finances in order, honorable members may find, in addition to the proposed reduction of 10 per cent, in their salaries, that no cheques are available for them at the end of the month. It will be necessary, also, to make a big reduction of the salaries of all members of the Public Service. The present is the time for decisive action. Imagine giving the maternity allowance to families with incomes of £l,i>00 or £2,000 a year.’ Such a measure should not be permitted to remain on the statute-book unamended. I have always opposed it. If this payment is to continue the allowance should be limited to those in receipt of not more than £300 per annum. In that way a considerable saving could be made. Many of the regulations relating to the Public Service, such as the rule under which an official stationed, say, in Melbourne, and travelling to Canberra, receives overtime rates, should . be amended, with the object of effecting economy.
– .For over six years the party opposite was in office, and the honorable member never troubled to advocate such economies.
– For a considerable number of years, in common with many other honorable members on this side, I have pointed out the dangers of the course that we have been pursuing. I do not say that the present Administration is more responsible than any other government; but everybody recognizes the critical position into which Australia has drifted, and extravagance in government expenditure must be stopped. Had all possible reductions been made a couple of months ago, we should not have had the slightest difficulty in funding the £37,000,000 of Commonwealth debt in London, which is proving a great incubus ; and the financial problems of Australia would have been much less difficult to solve than they are now.
I was criticized rather bitterly some time ago because I contended that the Prime Minister should not have left Australia at the present time. We know that he was deserving of a holiday; but the position of this country is so critical that nothing was to be gained by his leaving these shores.
– Since he has gone, why bemoan the fact?
– He has done very little good through going abroad. A considerable amount of bartering has taken place between the dominions and Great Britain; but when the maintenance of the Imperial connexion depends upon bartering of the kind that has been witnessed lately, we shall have reached the parting of the ways. We value our kinship wi th the people of Great Britain, and we desire to continue to be part of our great Empire; but if Australia, Canada, and New Zealand rely on the granting of trade concessions for the maintenance of the bonds of Empire they are looking for trouble. What right has Australia to interfere with the policy of Great Britain? In framing our tariff we willingly made certain concessions to Great Britain, and as the result of private representations, concessions were granted by Britain in return. We have the Canadian Prime Minister asking Great Britain for duties on foodstuffs, and offering certain preferences. If the recent elections in Canada had resulted differently, or if the Imperial Conference had been held six months earlier, we should have had the spectacle of the Prime Minister of Canada advocating absolute freetrade between Canada and Britain. Now we see the Labour Prime Minister of Australia joining forces with the Conservative Prime Minister of Canada in an effort to induce the Labour Prime Minister of Great Britain to grant preferences to the dominions, which would increase the cost of living and of the raw materials required for manufacture. This, Great Britain could not afford; her position to-day is more than difficult.
In the course of the budget speech delivered in July last, the Prime Minister (Mr. Scullin) said : -
Parliament must recognize, however, that no further drift in Commonwealth finances can be permitted, and that the balancing of the budget is an essential step for the restoration of the credit of Australia. The Government proposes to watch the financial position closely throughout the year, and without waiting until the end of the financial year will not hesitate to take immediate steps if such action appears to be necessary in order to prevent any serious disturbance in the budgetary position.
If the Prime Minister had been in Australia, would he have waited until after the New SouthWales election before adopting measures to balance the budget ? Would he have allowed this drift to continue, or would he have called Parliament together, and pointed out that the revenue from customs and excise would probably be from £8,000,000 to £10,000,000 or £11,000,000 short of the estimates ? He would not have played for a party gain in New South Wales. There was no excuse for the delay for which this Government is responsible. Months have been allowed to elapse, and, in four months, deficits have accrued to the extent of £16,000,000. Was not the object of the Government to await the decision in the New South Wales election?
– Was not the defeat of Mr. Bavin a good object? It was worth waiting for.
– Surely this shows to what depths the party would descend no matter what the cost to the country. At the conference with the State Premiers, the several governments there represented, the Commonwealth and the State Governments, declared their fixed determination to balance their budgets this year, and maintain similarly balanced budgets in future years. The only way to do that is by reducing expenditure. I admitted in July that increased taxation was necessary. I do not approve, as a rule, of placing heavier burdens on the people, because they are called upon to meet too much taxation at the present time; but, in the circumstances, there is no option in the matter. Here was a definite promise that the various Federal and State budgets would be balanced, and yet no attempt to square its finances has been made by the Commonwealth Ministry, except by a slight reduction of expenditure in the Defence Department, and a small saving in connexion with members’ salaries, and the remuneration of the higher paid officers of the Public Service. Thefollowingfigures show the tremendous drift that has taken place in
Australian finance in the last four months: -
– Markets must be found for our products.
– They will be found, if the party opposite does not make the cost of production too high. I am not one of those who contend that wages should be reduced. In some countries far higher wages than are paid in Australia are received by the workers; but the total cost of production in those countries is considerably less than in Australia.
When it was apparent to the Acting Treasurer that the deficit amounting to over £16,000,000 had been experienced in four months of the financial year, and when this information was held back until after the New South Wales election, the people of Australia were gravely deceived. Parliament should have been immediately summoned to deal with the situation. I repeat that the Prime Minister should not have left Australia. Then the Premier of New South Wales would not have threatened that, if he could not get money from the Loan Council, he would obtain it from outside sources. Mr. Lang would not have had members of the Scullin Ministry on his election platform advocating policies contrary to that enunciated by the Prime Minister.
– How can the honorable member say that?
– The honorable member does not know what loyalty to his country is, although he may know something of loyalty to his union. The Prime Minister (Mr. Scullin) approved of certain decisions arrived at by the Loan Council ; yet some of his Ministers, from the public platform, repudiated the agreement entered into by the Commonwealth and State Governments.
– The Lang Ministry did not agree with it.
– The resolution states -
The several governments represented at tills conference declare their fixed determination to balance their respective budgets.
– That does not necessarily comprise every member of the Ministry.
– Surely an announcement by the Prime Minister on a matter of policy binds every Minister of his Cabinet ?
In his financial statement the Acting Treasurer - whose courage we all admire - gives the prices of various securities, and. makes a comparison of the values of New Zealand, South African, and Australian stocks. The statement reveals that -
The prices of Commonwealth stocks since the 7th July have fluctuated greatly. Immediately after the Melbourne conference prices rose to £91 17s. 6d. The latest quotation for Commonwealth stock is £75 5s., whilst on the same date New Zealand securities stood at £102 10s., and South African at £100 15s.
The depreciation of Commonwealth stocks is one of the results of the delay that has taken place - a delay due entirely to a desire to keep the true posi tion from the people of Australia until after the New South Wales election. Australian 5 per cent. stocks, due in 1955, stand at £76 or £77 in New York, while Canadian stocks bearing the same rate of interest and payable about the same time, stand at £105. The reason for that difference is, not that Canada is a better country than Australia is, for Canada cannot be compared with Australia in natural resources; the relative values of Australian and Canadian securities are due to other and deeper causes.
– The late Government was largely to blame for our present position.
– I blame that Government for having depended too much on borrowed money, and for not having abandoned the Commonwealth Arbitration Court and left the control of industry to the States. I feel sure that, were the Commonwealth to vacate the field of industrial legislation, good results would follow. The position to-day is that we are drifting towards repudiation or default. One would have expected that in a crisis of such magnitude the members of the Cabinet would show a solid front; but, according to press reports, members of the Cabinet - I refer to the Minister for Health (Mr. Anstey), the Assistant Minister for Industry (Mr. Beasley), and theVice-President of the Executive Council (Senator Daly) - played the part of Judas to their own leader. The Minister for Health is reported to have moved the following motion at a meeting of the caucus: -
That legislation be passed immediately compelling bondholders in the £27,000,000 loan maturing inDecember, to hold their bonds for a further period of twelve months, interest to be paid as usual, with a proviso that persons in necessitous circumstances may receive immediate payment of small amounts by cashing their bonds at the Commonwealth Bank, same to be held as non-interest-bearing security, the onus of proving that circumstances justify the payment” to fall on bondholders.
Is that not repudiation?
– Was that motion agreed to?
– The press report says that it was.
– Does any honorable member opposite denythat that motion was agreed to?
Ministerial Members. - Yes.
– The denial comes too late.
– The newspaper reports even give the names of those who voted for and against the motion. That such a motion was agreed to is equivalent to repudiation, or at least to a desire to repudiate. What effect will the carrying of that motion have on investors abroad?
– What is the honorable member’s solution of the difficulty? »
– Some further taxation is necessary, although the burden of taxation is already almost intolerable. Last year Commonwealth and State Parliaments, through taxation and all sources extracted £193,000,000 from a little over 6,000,000 people; and even then we were £6,000,000 to the bad. This year it will be necessary to impose still heavier taxation. It must not be forgotten that when the people are taxed in this manner, money is diverted from avenues of production, and that, without further production, we must expect an even worse time. A determined effort must be made to reduce governmental expenditure in order to leave more money with the people to be used in the production of wealth. The position of a nation is not ‘ different from that of an individual. An individual who spends more than he earns inevitably meets with trouble. If we continue to extract from the people huge sums of money each year for governmental purposes, there will be less money available for investment in primary and secondary industries. No person will willingly continue in production unless he sees a possibility of a margin of profit.
– Although the honorable member states that he does not believe in reducing wages, he urges a cheapening of the cost of production. How does he propose to lower the cost of production without reducing wages?
– According to the Commonwealth Tear-Booh, production in Australia, on the basis of 1911 values, has decreased per head of the population.
– I quoted from the same publication last night figures which show that production has increased since 1911.
– The honorable member’s deductions were based on fictitious values. On the basis of values in 1911 production in Australia has decreased per head of the population. That is not because machinery has not been available to assist the primary producers; it is due to the existence of legislation which engenders antagonism between employer and employee. Canadian statistics show that, generally, wages are from 25 to 50 per cent, more than they are in Australia.
– Is their purchasing power as great?
– I think so. In Australia a reaper and binder costs £86; in Canada a reaper and binder can be bought for £44. Canadianwages range from 5 to 1 dollars for a day of eight hours.
– Is the Canadian price quoted by the honorable member for the same reaper and binder as that sold in Australia at a higher price?
– A reaper and binder made in Canada is sold there for £44; an Australian machine costs £86 in Australia. The Canadian machine would be about £90 in Australia.
– The trouble is that there are too many middle men.
– The reason is the refusal of the trade unions to allow men to be paid according to the value of their output. The worker should realize that his interests and those of his employer are identical; that co-operation between employer and employee is essential to the success of both. Unfortunately, the present trouble in the meat industry is evidence that that co-operation does not exist. It is indeed strange that in a country noted for its industrial legislation, there is so much industrial chaos. I have here some statistics relating to the railways of the United States of America, which show that railway workers there employed on an hourly basis, averaged 2s. 91/2d. an hour for a day of eight hours, and that the average wage last year of men paid daily rates increased from 34s. 6d. to 35s.1d. a day. The figures also show that freights are considerably less than they are in Australia for all goods, with the exception of wheat.
– Does the honorable member refer to land freights or shipping freights?
– I refer to land freights. I wrote to Mr. Herbert Brookes, the late Australian Trade Commissioner in the United States of America, for information, and the figures I have quoted were supplied by him. I admit” that the greater volume of traffic in the United States of America makes possible lower freights than in Australia. There must be something wrong with our social system in view of the difficulties that we are experiencing, particularly in respect of building up Australian industries.
– America has 5,000,000 unemployed.
– Had the honorable member for Fremantle (Mr. Curtin) quoted the full report of Sir Henry Strakosch he would have shown that to a great extent the trouble in the world to-day is due to the sterilization of gold. America has some £S02,000,000 of gold in its vaults. France has, in the last four years, increased its holdings of gold from £165,000,000 to £330,000,000. The Argentine has £97,000,000 of gold. That is far more than is needed by those countries. It was the desire of the economic council of the League of Nations to get rid of the present position by- establishing something in the nature of an international central bank, whose function would be to arrange credits. But that position should not affect Australia. “Wo cannot help the depression so far as the low prices ruling for our primary products are concerned. We have had some wonderful years since 1920, and good prices have ruled for our products. But large sums of borrowed money have been brought into this country, and that has mostly been responsible for the financial difficulty in which we find ourselves today. We have to proceed carefully in our legislation, particularly in regard to the tariff, to avoid killing our two great basic industries - wool and wheat - which are of such enormous value to Australia. The gold-mining industry has been killed because of the high cost of mining. We have, in Australia, large bodies of ore - -I am not speaking of base metals, the world’s prices of which are low - which, if, in any other country, would have been profitably developed. We are doing a dangerous thing in raising the cost of production so high as to make it impossible for- our basic industries to carry on.- If we destroy those industries the cities will collapse like houses made of cards. There are in the large cities enormous agencies and business houses. But is there one thing manufactured in them that could not be done without by the primary producer? I admit that cities are essential. I like to see a beautiful city. But it is wrong to shelter the city people to such an extent- that the balance that should exist between city and country interests is destroyed.
We had recently a visit from Sir Otto Niemeyer, and I regret that the Acting Prime Minister (Mr. Fenton) left it so late to make a public explanation as to how that gentleman came to visit Australia. The vicious attacks made on Sir Otto Niemeyer by the right honorable member for North Sydney (Mr. Hughes), and also by the Premier of New South Wales, in the presence of some of the Prime Minister’s own colleagues, are a lasting disgrace and discredit to the Government. Its delay in making a public explanation is a gross scandal. There is not the slightest doubt that this gentleman was invited here. He made his report in private. It was not bis wish that it should be made public. It could not have been made public except with the consent and authority of the Prime Minister of Australia. [Quorum formed.) I certainly expected something better from the right honorable member for North Sydney. For many years, he held a responsible position, and he should therefore know the obligations’ that we owe to a visitor to this country. Sir Otto Niemeyer, in his statement to the Loan Council, said -
There is no sign that Australian production is responding in any way to what is now a well-marked international phenomenon, namely, an increase of productivity per head.
He went on to deal with the question of productivity, and I need not refer to that. The most important thing that he said was this -
Australia must reassure the world as to the direction in which she is going, financially and economically, and no one else can do that for her.
Had we endeavoured to do that, our debts in London would have been funded by this time. It is the duty of the Government to reassure the world that Australia is determined to endeavour, to live within its means. If we do that, I am sure that there will be no difficulty in overcoming our present troubles. I trust that, once we are out of the financial mire, there will be no recurrence of this dreadful borrowing of nearly £40,000,000 a year. I have with me a letter written by Sir Daniel Levy and published in the Herald on the 15th of November. In it he says -
Mr. Lang had much to say about the “ Bavin- Niemeyer conspiracy “. In his policy speech, delivered on the 22nd November, he said, inter alia -
The sole justification that the (Bavin) Government advances in support of its policy is a speech delivered in Melbourne by a London banker, Sir Otto Niemeyer. Immediately following this gentleman’s arrival in Australia, there occurred one of the most humiliating experiences to which a self-governing community was ever submitted. Sir Otto summoned the heads of all the Australian Governments to appear before him in conference.
– That is untrue,
– It is absolutely and wholly untrue.While Mr. Lang was making these remarks the colleagues of the Prime Minister were present; yet no denial was made by them.
– They did such good work that they swept the poll.
– Does the honorable member class this deliberate and contemptible lie as good work? I am sure that he knows better than that. Mr. Lang went on to say -
With an arrogance not usually associated with the character of a British envoy, he lectured and castigated our Premiers as though they were so many ‘ school boys. To emphasize the contempt in which he held the Australian people and their governments, Sir Otto told the Ministers that he did not represent the British people, the British Government, or the British investors. He came to them only in his capacity as a member of the board of the Bank of England, an institution to which Australia did not owe so much as a bent sixpence.
– What is the moral?
– The whole thing is damned immoral ! I have read the motion that was submitted by the Minister for Health (Mr. Anstey) to caucus and approved by it, and a further motion by the honorable member for Fremantle (Mr. Curtin), that a demand be made on the Commonwealth Bank Board to underwrite a loan of £27,000,000,. .,and that in the event of it failing to doso, Mr. Anstey’s motion be given effect. When the honorable member for Fremantle spoke subsequently in this House he said that the Commonwealth Bank might he persuaded, directed, or encouraged to underwrite the loan. I feel exceedingly pleased that when the Commonwealth Bank Act was being amended in 1925,I noticed that the original act, under section 60p, gave power to the Commonwealth Treasurer, if he thought fit, to supersede the Note Issue Board. I drew attention to it, and finally had it repealed. Had that section not been repealed, the Acting Treasurer would now have been able to’- supersede that board. The honorable member for Fremantle in his speech recommended three things - the unpegging of exchange, the balancing ofthe budget over a period of years, and the issuing of notes to the extent of £27,000,000. Respecting the unpegging of exchange, I understand that that is being done by the banks to enable them to carry out their promise to the Government to provide £3,000,000 monthly to meet Commonwealth debts. We must assist the primary producers, and there is no doubt that they should get the full value of the exchange. Then respecting the balancing of budgets over a period of years, let me say that we cannot balance the budget this year. That is an impossibility.
– Then why talk about it ?
– We must talk about it. We cannot allow any fooling. We are taking too much money from the people, and waste is becoming intolerable. This House should do all in its power to prevent an increase in taxation until the Government makes some attempt to economize. The honorable member for Fremantle and the honorable member for Adelaide (Mr. Yates) pointed out that during the war the Government increased the note issue. But there is a great deal of difference between war conditions and the conditions existing to-day. The war demanded emergency action.
– Is not emergency action demanded to-day?
– During the war we sought the destruction of the life and the trade and commerce of the enemy. Life and property had to be sacrificed in order to hold our freedom. In doing that we incurred an enormous debt, which will be a burden upon our people for generations to come. We did that willingly in the cause of liberty. Our one object was to defeat the enemy. Surely honorable members opposite must realize how entirely different are the present circumstances; yet they wish to plunge again into the same species of inflation. Their desire should be to increase production and add to, instead of destroy, the national wealth. Our one great object should be to find employment for our people!, and bring prosperity to our country, and that cannot be done by inflation. One of the best articles on the subject that I have read was written recently by Sir William Harrison Moore. In it he said -
Different emergencies call for quite different measures. Australia is facing, not, a war, but an economic and financial emergency. The exhaustive and destructive measures of war are precisely those that would be fatal to economic restoration; the inflation of the war is a warning of what to avoid, not an example to be followed. There arc also some special considerations which make inflation now peculiarly dangerous. In the war, the inflating countries all started from sound economic conditions - their credit was good, their currency was stable. Their debts were comparatively light; their people had large accumulated savings; there was little or no demand for money, except for war purposes - industry, except for the war needs, was to a great extent suspended, and the people were compelled to do without ordinary consumers’ goods. All this helped inflation to work, gave it a longer lease of life before it exhausted itself. Our conditions in Australia are wholly different. Our credit is strained, our currency is depreciated; wo are already in a state of inflation. Our debts are heavy, and there are none of the war-time restraints on demand. All these things diminish immensely the power of a community to resist the perils of inflation; they bring its evils more swiftly, as is shown by the fact that it was after the war, rather than during it, that currency depreciation became catastrophic in France, Italy, Germany and Austria, the most inflated countries. Add to this two other factors: First, during the war and for some time afterwards, inflation was almost world-wide and prices were rising everywhere; to-day, the world process is reversed, and a country which inflates is complicating its international trade and ruining its foreign credit: as its currency depreciates in terms of foreign currencies, it becomes increasingly difficult for its government to meet payments abroad. The second factor is this : The value of “ credit “ depends on general confidence in it. Now the recent experience of several countries has opened our eyes, and the eyes of all the world, to the inevitable tendencies and disastrous results of inflation. The necessary “psychology” for its success is absent; its perils are so notorious that the fear of it is exercising already a pernicious effect in our business and in our foreign credit. The descent is immeasurably steeper for us than it was for our forerunners.
What is meant by inflation? I say at once that notes may be issued by the banks, but only on the creation of wealth. If large quantities of notes are used merely to provide labour that will not give any return, the lowest level to which inflation can bring a nation must inevitably be reached. Last night the honorable member for Darling Downs (Mr. ‘ Morgan) pointed out how dangerous a policy of inflation would be to- friendly societies, life assurance companies, savings banks and other institutions which have the custody of the savings of thrifty members of our community. We cannot afford to take that risk. We must ask ourselves where we are likely to end if we depart from sound financial methods. Sir Harrison Moore goes on to say -
It is to government we must look, because the mischief is in government and its measures. The essential for prevention of inflation, as the essential for escape from the wreck that it makes, is the balancing of expenditure by revenue. One of the earliest publications of the League of Nations contains a memorial, presented in 1919 to the Governments of seven European countries and of the United States, by groups representing all political parties and all economic interests (signed in Great Britain by Mr. Asquith and Mr. McLean, among Liberals, Lord Robert Cecil, among the Conservatives, and Mr. Clynes and Mr. Thomas, of the Labour party). It says : “ There can be no social or economic future for any country which adopts a permanent policy of meeting its current expenditure by a ‘continuous inflation of its circulation and by increasing its interest-bearing debts without a corresponding increase of its tangible assets.
– Who suggests that it should be done permanently?
– Once you start, where are you going to end? If you inflate merely to provide wages you embark upon the most vicious form of inflation it is possible to adopt. It was a deputation of German trade unionists which asked the Dawes Reparation Conference to give them a stable currency.
There are means by which governments may alleviate the position that now exists. We are dependent almost Wholly on our two big industries, wheat and wool ; but there are* also the metal industries and the oil industry. The other day I received from a company that proposes to explore for oil, a letter stating that it had been compelled to pay £7,000 in duty on machinery that it had imported for boring operations. That is not the way in which to help development in this country.
– The Government is subsidizing them.
– “Why impose a duty and then hand it back in that way? Surely that is an improper procedure! You may give a subsidy to one and not to another. I am not in favour of the practice of continually asking the Government for concessions. These great boring plants, which must be capable of boring to a depth of 7,000 feet if necessary, cannot be made in Australia, and should be allowed in duty free.
The wheat industry is in a deplorable condition. A little while ago this Government was prepared to take action that would have increased the price of bread by 7d. a 4 lb. loaf, yet now it objects to increasing it by1d. or 2d. It is opposed to anything in the nature of a sales tax on flour, so that those in sheltered industries may give some little assistance to the poor farmers who are battling against harsh conditions and opening up new markets.
The Government should do everything possible to open up additional avenues of production, and thus increase the opportunities of finding employment for our people. [Quorum formed.] The effect of the employment of large numbers of persons in either mining or agriculture, is remarkable. My experience has taught me that for every man employed in those industries, at least six or seven are found employment in other industries. Therefore, every effort should be made by the Government to promote the expansion of primary production in Australia. Unfortunately, the low price of metals to-day makes it almost impossible to carry on mining operations at a profit. Only yesterday I was shown reports regarding discoveries of silver, copper and lead in Central Australia. The properties in question would appear to have the most wonderful potential wealth, which could be made available if the cost of production were not so great in the interior of Australia.
I impress upon the Government the necessity for making every effort to reduce the cost of the Public Service. Last year we took from the people £193,000,000 and still were £6,000,000 to the bad. If the cost of administration continues to soar it will not be possible for industry to flourish. We must prove to people in other countries that we are determined to live within our means. -Only in that way shall we be able to keep our name good. I hope that, before this session ends, the Acting Prime Minister will take his courage in both hands and bring forward resolutions providing for reductions throughout the Public Service. An effort should be made to ration instead of to dismiss officers. Every one should be compelled to bear his share of the sacrifice that must be made. The sooner that is done, the better it will be, not only for those who are immediately concerned, but also for the people of Australia as a whole.
.- I desire to say a few words on this important question. The Government has had levelled at it unfair criticism by some honorable members opposite as well as by outside persons who have quite overlooked the fact that we came into power in one of the worst periods in the history of Australia. I venture to say that no Government, either State or Federal, has ever faced a more difficult position than that with which this Government has had to contend. We came into power when the Treasury was empty and when the country was recovering from the effects of a drought. There had been a big drop in the prices of wool and wheat, and there was a tremendous army of unemployed throughout Australia. It has been alleged against us . that we have not attempted to do the right thing by those who are out of work, that we have made no effort to balance the budget, and that we have not practised economy to the extent that some people desire. The Government has used the pruning knife very severely, and is attempting to provide employment so far as the finances will permit. I agree with the statement of the Deputy Leader of the Opposition (Mr. Gullett), who, in a very fine speech, said that the sudden reduction of loan expenditure from £40,000,000 to £14,000,000 was altogether too drastic. The decision of the Loan Council, to make such a reduction, rendered it impossible for many departments to carry out the important work which should be undertaken. If a gradual reduction in our loan expenditure had been agreed upon, the consequences would not have been so serious. Although Australia has a national debt of approximately £1,100,000,000, surely no one will argue that that is the value of our assets. I venture to say, that if this country is worth £1, it is worth £6,000,000,000, which is a conservative estimate. Australia is the finest country on God’s earth and the Australian people will meet their obligations.
Despite what may bo said by the calamity howlers, who cable certain information overseas, to the effect that this country is down and out, and that because a Labour Government is in power there is a possibility of Australia not meeting her obligations, the Commonwealth Government arid the Australian people will not shirk their responsibilities. It is unfortunate that, following a marked decrease in the price of our wool and wheat, we should have to raise £27,000,000 in one year. That makes the task of financing the country infinitely greater than it would otherwise have been. I am optimistic enough to believe that within twelve months or less we shall see a new Australia; that better times will come, and. that the people of this country will be in a better position than they are to-day. When the £27,000,000 loan falling due in December has been successfully converted, money from overseas should be available at cheaper rates, and, if, in addition, we are able to fund our war debt, our financial position will be much better than it is to-day. Although the situation in Australia is unsatisfactory, we have to remember that in the United States of America, with its undeveloped wealth of forest, oil and other resources, no fewer than 52 banks have closed their doors within the last few weeks. The United States of America holds £800,000,000 in gold, hut it is of no value in providing work for its- people, and there is a greater army of unemployed there than in any other country.
Irrespective of party, honorable members cannot escape their responsibility to assist in straightening out the affairs of this country. Wo shall not solve our difficulties by quarelling and saying nasty things about each other. It is our bounden duty to tackle the problems confronting us with courage and determination as quickly as possible. Even if the conversion loan is oversubscribed we shall have other problems to face. We must provide work for our great army of unemployed, and find ways and means of financing the wheat-growers and other primary producers. To-day I received a letter from a representative of the fruit-growers in the Horsham district, who informed me that information had been received to the effect that jam manufacturers would not be purchasing the fruit crops this .year direct from the growers, as has been the practice in previous years, but intended to buy in the open market. In these circumstances the unfortunate fruit-growers will be forced to send their fruit to Melbourne, where there is a ring, and purchasers will get the fruit at their own price. It is difficult to purchase any product in or out of the city other than through a ring. When primary producers, particularly our wheat-growers, are faced with such a position the Government should do something to assist them. If the State Governments and the wheat-growers were agreeable - I believe they would be - the Commonwealth should provide sufficient money to take over all the Australian wheat crop at a guaranteed price of 3s. a bushel, although I do not think a return of 3s., 4s. or 5s. would enable the wheatgrowers to overcome all their difficulties. Producers who were encouraged to undertake the production of wheat because of the high prices prevailing and who paid fabulous prices for the land are now faced with ruination. They cannot possibly make any recovery unless the Commonwealth or the States render them temporary financial assistance. I am afraid that if the Government cannot help them this year many of them will be so financially embarrassed and broken in spirit after years of struggling that they will abandon their holdings. In view of the price of wheat now prevailing, I believe that only two-thirds of the area under wheat will be cropped next year. Many of those now engaged in wheatgrowing will have to devote their attention to some other form of production, such as Jamb or pig-raising, in conjunction with dairying. I am sure that only a comparatively small area in Victoria will be placed under wheat next year.
Many suggestions have been made for overcoming the problems of unemployment. In this matter I think the State Governments will have to adopt the policy of the Victorian Government, which is acting on right lines. In Victoria it is proposed to subdivide large areas of comparatively cheap land, which if properly treated can become productive, and to allot it to married men with families so that they may become producers instead of members of the army of unemployed. There is a tract of country from Dartmoor to Portland, and also in the Heytesbury Forest and in Gippsland on which many families could be settled, lt is cheap land. Suitable land is also available in Queensland on which cotton and tobacco-growing as well as dairying could be profitably undertaken. There arc also suitable areas in New South Wales. To provide men with intermittent work - and sustenance is only begging the question. No man would look for sustenance if he could obtain work. Every man desires a home for himself and his family, and in this great country, where we have large areas of suitable land and a virile manhood,” there should be no difficulty in placing 100,000 of our unemployed on the land where they could- become producers.
The opportunities which the Commonwealth Government has of providing employment are very limited. It is true that it might be able to absorb a. few thousand men in work for the PostmasterGeneral’s Department, such as the laying of underground telephone lines; but the States control the land of the country, and Iso its water and forests, and they only can effectively deal with the unemployment problem. But. in spite of this, the Government has been abused by the press, and criticized by honorable members opposite, for not providing work for our unemployed. When we can get sufficient money we will, of course, gladly assist the State Governments to put work of a reproductive character in hand. We should be glad, for instance, to see the shale oil industry of New South Wales and Tasmania developed. I believe that this industry can be put upon a sound footing. We should be glad, also, to see all the cotton country of Queensland under cultivation, it is capable of carrying many thousands of people. The tobacco industry is also one that merits development. There arc many ways in which employment could be provided in permanent developmental undertakings if the money were available. The provision of millions of money for the making of roads, the putting up of sign-posts, and so on, while perhaps desirable, is not essential at the moment. Work of this kind is not reproductive, and at present it is highly desirable that, all available government money should be well and wisely spent on industries which will add to the wealth of the country.
– But the average was only 8d.
– The wool sold earlier in the season came principally from the drought-stricken areas outback. It was dirty, sandy and in some cases burred, and naturally did not bring high prices.
– It did not include stained pieces and locks.
– At all events, the hardening of prices last week was highly- encouraging. I believe that the hardening of our wool, wh6at, and butter prices will enable Australia to recover her position very quickly. No country in the world recovers as quickly as Australia. If every honorable member of this Parliament, and all the people who hold responsible positions in industry, would put their shoulders to the wheel and do their utmost for the country, we should soon bring Australia safely through the present crisis. We are on the way to prosperity. The ship of State is now riding on a more even keel. If all honorable members will assist the Government to balance its accounts it will be seen that we intend to face the world determined, as honest men, to do the right, tiling for our People and nation.
.- Mr. Speaker-[Quorumformed.]– I do not propose to speak at any great length in reiteration of the views . put forward by honorable members ‘on this side of the chamber, with practically all of which I am in . agreement; nordo I propose to ‘talk merely to keep the House in session as a sortof clubfor the interludes of caucus, ‘where the real ‘decisions in regard to the ‘future ‘of this country will he made sometime before next March. But theeffect upon our . most important primary industries of the times through which we are passing, and of this supplementary budget -cannot be too frequently stated by honorable members who represent the districts in which these industries are dominant. Although there is no lack of sympathy by city people with the country people, there seems to he “an almost total obliquity, not ignorance but sheer obliquity, as to real conditions which prevail in the country and the effect which those conditions are having on the people in the city as well as the people in ‘the country who hear the first shock which they cause.
We have had the spectacleduring the last twelve . months of the depression deepening, of private business getting intoworse, and still worse, troubles, and of farmers and many business people getting closer and closer to ruin. The largenumber of bankruptcies which have occurred have had a serious effect upon- the revenue of both the Commonwealth and the States and have caused a very quick and indeed tragic increase in the number of unemployed people in our midst. I agree with everything that has been said by honorable members opposite as well as by honorable members on this side of the chamber as to the seriousness and poignancy of this very terrible unemployment problem. I propose to analyse, very briefly, the probable influence of this supplementary budget upon that problem.
As the Leader of the Opposition (Mr. Latham) pointed out . the other day, there are two parts to this budget. One part is thoroughly sound, but the second part, does not seem to fit in with the first. I do not think . that there is, a single sentence in the general statement of our position with which any honorable -member -of the House who is aware ‘of the existing conditions in thiscountry would quarrel. Butfollowing upon that statement ‘are proposals whichare futile as ‘a means ‘of getting us out ‘of our troubles. The ‘depressionof to-day is caused by two things. There has been analmost complete failure of what were. untilrecently,ourprincipalsourcesof income. Our flow -of loan moneys,the spendingof which untilthis year, has been ‘our biggest industry, with the single exception of the wool industry, has almost entirely failed, and this failure has been accompanied by a tremendous drop in our real income due to the fall in world prices of our principal exportable commodities. The problems which we have to face are, first, how to transfer our people fromthe industries and businesses which were dependent upon the spending of loan moneys to some other productive and selfsupporting occupation’; and, secondly, howto find occupation ‘for the people who are but of “work as the result of the reduced spending power of those engaged in our main exporting industries. These are two problems of major magnitude. The largest shrinkage in our spending power has been due to the fall in the prices of ‘our commodities, but enormous as that fall has ‘been, it has not entirely dwarfed the shrinkage caused by the cutting ‘off ofour loan funds. Our problems, therefor e, are how to keep our primary industries . going and how to find occupationnot only for the people engaged in primary industries, but also for those engaged in businesses which were maintained by the spending power created by our primary industries.
If there were any indication that we were passing through a temporary depression, or that the slump would end within the next few months, or even within a year or two, our problems would not be nearly so serious. They might even be dealt with by an extension of Government expenditure. In such circumstances it might have been possible for the Government to maintain its rate of loan expenditure with the object of reducing the seriousness of the general problems caused by the failure of our income from our primary industries ; but unfortunately, conditions are ‘going still further to the bad in some of our chief industries. It is true that the honorable member for Wannon (Mr. McNeill) struck a hopeful note when he referred to the hardening tendency apparent in the recent wool sales. The position of wool to-day is probably sounder than that of almost any other crude product in the world. This is largely due to the fact that at no time either during the recent booms or recent slumps, with their fluctuations in prices, has there been any effort to hold wool back from the market. Even in the time of B.A.W.R.A., when the large stocks of wool which had accumulated during the war were marketed under special conditions, those in control of our stocks never held wool back if there was a demand for it. So that, although the price of wool is at present very seriously affected by the prevailing world slump, its prospects .are not so adversely influenced as are the prices for most minerals, rubber and wheat. The reason is that there are big accumulations of those commodities for which the world has no immediate demand. Because of that the honorable member has some justification for his optimism when he says that there may be a recovery in the price of wool. But it is unlikely that any such recovery will relieve the industry from undergoing the most drastic re-organization, a process that must necessarily reduce its employing power and adversely affect our secondary industries. While I believe that reorganization cannot be avoided, I agree with the honorable member for Wannon (Mr. McNeill) that the wool industry is rather closer to a recovery than are the other industries that I have enumerated.
The prices of wheat, rubber and certain metals are affected, not only by the shrinkage in the world’s purchasing power but by a further problem of an accumulative character. Governments, pools and individuals have made finance available and -large stocks of these commodities were withheld in times of depression. As a result, the world now lias approximately a 20 months’ supply of wheat available, and only a twelve months’ demand for it. Failing some catastrophe in one of the wheat-growing countries of the world, the struggle, rin that industry for markets promises to bc
Ifr. Hawker. a long one. Australia is engaging in that struggle against competitors in other parts of the world who are, probably, better equipped than are its wheatgrowers. Our growers are also saddled with a number of artificial handicaps, most of which are the result of legislative action on the part of the Commonwealth Governments during the last fifteen to 25 years. Of our competitors, Soviet Russia is dumping its wheat on the markets of the world at well below the cost of production. Its grain is produced under what are practically slave labour conditions. Our farmers are facing ruin because of the competition of thai: slarc-grown wheat. If their ruin is accomplished, a number of our secondary industries will also be involved in the catastrophe. Another competitor, the United States of America, the richest country in the world, and with a comparatively small exportable trade, is dumping its grain on tile Italian “market, with the aid of its State financed Farm Belief Wheat Board. Some alarm is felt iii Australia as to whether that competition will exhaust one of the outlets for our wheat. Our wheat farmers have to compete against European countries, which are in a position to impose tariffs to protect their own farmers. We have also to meet the competition of Argentine, where the standard of living is very low, and that cf Canada, which has done far less than Australia to impose handicaps on its wheat-growers.
And what applies to our wheat-growers applies, although perhaps to a less acute degree, to our mining and wool-growing industries. Those three activities, not simply because they are primary industries, but because of their magnitude, are involving the country in financial trouble, and in a very serious unemployment problem.
It is upon the effect of this supplementary budget on these problems I propose to make a few observations. Although our great staple industries are struggling for their existence, there are not very many things that a government can do to assist them. It might, if it were able, subsidize them to a reasonable extent. Only this afternoon, the Acting Prime Minister (Mr. Fenton) read a statement which indicated the absolute helplessness of the Government in the matter. Last session it proposed a guarantee to the wheat-farmers, under conditions which were odious to them.
– No; conditions that were objectionable to the wheat merchants.
– And to a considerable section of the farmers. If our wheatfarmers thought that they could, at this juncture, obtain 4s. a bushel for their product, they would put up with practically any conditions, no matter how odious they were. However, no saneminded section of the community would admit the ability of the Government to raise the special tax which would have been needed to make good the guaranteed price v,o the wheat-farmers. That applies particularly with relation to State Govenments, whose financial difficulties are greater, if anything, than those of the Federal Governments.
There is another method by which the Government can assist the farmers - by reducing his costs. The average farmer does not employ a great amount of labour, but he has to buy superphosphate, also fuel, if he has a tractor. He may also buy additional implements, although most primary producers are, at the moment, over-equipped in that direction. In any case, he has to buy spare parts for his machinery. In nearly every case where this Government has taken action in connexion with those commodities, it has made them more expensive to the farmer, lc has placed a primage duty on the raw materials imported for the manufacture of fertilizers) and it has imposed a very high duty on the spare parts that the( farmer needs. It has actually placed an embargo on the importation of machinery. Although that embargo might not bring about an increase in the price of farm implements, it has prevented the farmer from obtaining the benefit of a fall in prices which his competitors abroad are receiving. Then there is the sales tax. The argument has been advanced by the Government that it would be impracticable to exempt the farmer from the general drag-net conditions of that tax; that it would not know where those exemptions were to stop; that the revenue would be depleted.
But the Government has gone even further in the matter of imposing burdens on our primary producers. In this supplementary budget, it has gone out of its way, through cold-blooded choice, to tax the fuel that is necessary for the farmers’ tractors - kerosene. Generally speaking, kerosene is used in Australia as fuel for stationary engines, tractors - none of which arc used on our roads - or the engines in fishing boats, or it is employed for lighting purposes by the poor, or by country people who have not the advantages of electric light, gas, and other city conveniences. It is - no argument to claim that the tax will not be passed ou, because the oil companies are already making an excessive profit. For some time past, farmers’ co-operative societies have been importing kerosene and passing on to the farmers who use it the saving of the extra profit that the oil companies make. The cooperative concerns were increasing their sales, and their competition had begun to make itself felt with the oil companies. Now, if the co-operative companies are compelled to increase their prices by Id. because of this tax, the value of their competition with the oil concerns will be stultified. Possibly they will be forced out of the business altogether. In the circumstances, what chance have the farmers and country people of escaping the imposition of the extra Id. tax?
I strongly support the argument advanced by previous speakers on this side of the chamber that, instead of introducing additional income tax and impos-ing taxes on the raw material that is essential to the primary producer, the’ Government should have effected greater economies in administrative expenses^ I shall not deal with that phase in detail as it lias already been fully traversed by”1-…. other speakers. But. there is another very big cost which a great many farmers and mining companies, and even the Government itself, is incurring to-day - the cost of interest. Due not so much to the action pf the Government, . but to that of the party which supports it, everything has been done to make it more difficult for Australia to obtain the benefit of the falling rates of interest which are enjoyed by other countries in the world. If an investor can obtain 6 per cent, from a government, it is extremely unlikely hat h he will lend his money to’ primary producers for an additional 1 per cant. Despite all the talk about repudia tion, the bonds of this or any other government are a better risk than are the assets of a private individual. The funds of our big insurance companies represent the savings of many people who are making provision for their old age. Would those companies be doing their duty to their policy-holders if they loaned their money to private individuals, with their inferior security, for approximately the same interest as may be obtained from a government? The interest which a government has to pay depends to a great extent upon the standing of that government; upon the risk that the investor feels may be incurred with regard to the return of his money on the due date. Credit makes possible the maintenance of the standards set up by our highly complex modern civilization, with its specialized divisions of labour. To use the words of the honorable member for Fremantle (Mr. Curtin), credit in its primary sense is faith - believing that the creditor will pay when its debt falls due. The credit of a country is the belief, not that it is willing to pay, but that it can pay, when the debt falls due. On this point the following resolution, passed by the Federal Parliamentary Labour party recently, is interesting and significant: - That legislation be passed immediately compelling bondholders in the £27,000,000* loan, maturing in December, to hold their bonds for a further period of twelve months, interest to be paid as usual, with the proviso that persons in necessitous circumstances may receive immediate payments of small amounts by cashing their bonds at the Common wealth Bank, the same to be held as noninterestbearing securities, the onus of proving that the circumstances justify payment, to fall on (lie bondholders.
– The honorable member should be glad that the Labour party does meet in caucus. It gives him something to talk about.
– I understand that the honorable member for East Sydney Mr. E. Riley) supported the resolution, am not impugning his intention ultimately to support payment of this country’s obligations, if this is possible; lii.it the mere fact that the honorable member had some doubt about the matter - that he was concerned enough to consider whether the loan could or should be met - is sufficient to cause lenders some anxiety. In every instance when government bonds decline in the market, purchasers of them secure a fraction more interest. This means that persons with money to lend, either to governments or private individuals, expect to obtain better terms.
To-day in most countries interest rates are falling rapidly. In the United States of America, which perhaps is an extreme case, the re-discount rate of the Federal Reserve Bank is 2 per cent., and to make money even more plentiful, as well as to hold up the values on government issues, the bank is purchasing government stocks in the open market. In this way interest charges in the United States of America are kept at the lowest point, and substantial assistance is given to industry. Every country which gives evidence of a real determination to put its industrial and financial house in order, benefits from the easing in interest charges, and this advantage is passed on to industry.
The Government’s revised financial proposals are framed, not for the purpose of enabling the Commonwealth to meet its commitments during the current financial year, but to prevent the present position from becoming worse. If the Government succeeds in stemming the tide, it will have accomplished something. Interest charges are a considerable hurden. Another problem that is causing much concern is the cost of remitting money to London, without penalizing the primary producers, in order to meet our interest charges overseas.
It has been suggested that industry should be temporarily assisted by a certain measure of inflation. Those who .favour this course argue that it is necessary because of the difficulty experienced by government and private individuals in raising money. They contend that the nation’s assets are ample security against any increase in currency. But they lose sight of the fact that the thing that matters is hot the selling-up value, but the paying-back value of assets. The honorable member for Fremantle, I understand, takes this view and used almost the same phraseology. He pointed out that the individual borrower must have sufficient wealth-producing capacity to satisfy the requirements of the bank before he can secure the required accommodation. If by wealth-producing capacity, the honorable member means wealth-earning capacity, I am in agreement with him, because hanking and, indeed, all healthy business concerns, depend upon the belief or knowledge that money advanced will be repaid at the due date. It is. I think, generally acknowledged that our main primary industries and, indeed, most businesses in Australia have, for the moment, lost their wealth-earning capacity, which, of course, impairs their capacity to pay back advances made, so that an extension of facilities to borrow would only get them deeper into the financial bog. Unless .DdS are lowered, they cannot carry on permanently, nor can we expect the country, as a whole, to recover permanently from the present depression. An inflation of the note issue by the printing of additional notes might, and probably would, result in a temporary flutter, but in the end it would only increase the difficulties of the nation. The advocates of an extension of credit tell us that it would be only a little inflation; only a little printing of additional paper money; only a little manufacture of credit. In this way lies danger. All the really devastating inflationary policies have had their beginnings in a little measure of inflation. Always the excuse has been that, to meet temporary financial difficulties, an extension of credit was necessary to stimulate Trade, in much the same way that an injection of strychnine to a patient suffering from heart trouble provides the necessary stimulus to carry him over a crisis. A small measure of inflation certainly does stimulate trade temporarily; but, before long, further and larger doses are required to continue the process.
– What suggestion has the honorable member to make, to meet the present situation?
– I believe that, if we could reduce our costs of production, our primary industries would be able to carry on. Once we show our determination to make this possible there should then be no difficulty about obtaining financial assistance at rates which would not be unduly burdensome. Developmental works constructed with money borrowed at 4 per cent, have a much bettor chance of returning interest and providing for sinking fund contribu tions than when the interest rate is 6 per cent. If the Government can borrow money at 4 per cent., private individuals may expect to obtain it at 5 per cent, or oi per cent., instead of, as at present, from 7-i per cent, to 8£ per cent. If finance were available to business concerns at 2 per cent, below existing rates, trade would be stimulated and the unemployment problem relieved. The honorable member for Darling Downs (Mr. Morgan) last, night dealt very ably with the injurious effect of inflation upon the savings of thrifty people in the community. I do not propose to traverse ground which he covered last night. But I should like to remind the House that the Government’s taxation proposals, under which a certain section will be used for the benefit of other sections, will react upon the wage-earner through rising prices for commodities.
The honorable member for Herbert (Mr. Martens) last night invited honorable members to consider the prosperous position of France which, he said, was due mainly to currency inflation. The Labor Daily also has been commenting upon the prosperity in that country. There is no doubt that France to-day is prosperous. But we should not lose sight of the fact that, by its inflation policy, the French Government repudiated about. 80 per cent, of its obligations to its own people.
– Will the honorable member deny that our policy of deflation also has ruined many people?
– Inflation in France brought down real wages. This is one explanation for the prosperity of that country to-day. I have no doubt that the’ Minister for Markets and Transport (Mr. Parker Moloney), in his recent visit to Bradford, heard many complaints from textile manufacturers about the cost of raw materials and wages. Under existing conditions, I believe that English textile manufacturers could not compete with the French mills, even if Australian wool were given to them, provided French manufacturers were on the same footing for their raw material, because, as the direct result of inflation in France, real wages costs are now so- ‘.much below English levels. Some interesting figures on thi.s subject have been issued by the International Labour Bureau at Geneva. These show that in 1913, when the franc was approximately 25 to the English £1, the index number for real wages was 100. In October, 1920, immediately after the war, the franc had receded to 49.39, and real wages had fallen to 90. In 1921, the franc fluctuated between 45 and 61, and the wages index was S3. In the following year the franc was to some extent stabilized, the minimum being 45 and the maximum 61. In 1922 it fluctuated between 47 and 72, and in that year real wages recovered to about the 1913-14 level.
Sitting suspended from 6.15 to8 p.m.
– In 1923 the franc was still fairly stable, and real wages actually rose above the 1913-14 value, reaching an index number of 105. In 1924 the value of the franc fell from 80 to 120 to the £1. In that year the index number was reduced to 99. In 1925 the franc did not fall very much, only from 120 to 135 to the £1, and wages recovered a little, so that the index number stood at 101. In 1926, the year in which the big collapse took place, and the franc came as low as 238 to the £1, the wage index figure fell to 86. In 1927, the franc was stabilized at about 124 to the £1, and from that time the wage index figure has gradually improved until it now stands at 106 as compared with 100 in 1913-14. Inflation is a means of reducing wages, and it is just as well that that fact should be realized. That is one of the reasons why France, which has practised inflation,has very little unemployment. The French figures regarding wage values as indicated by the cost of food were not recorded before 1924. In that year the index figure for Paris, which is the largest industrial town in France, and also the biggest centre of population, stood at 73 as compared with London. In 1925, when the franc had fallen a little, the wage index figure came down to 68. In . 1926, which was the year when the franc, took its big tumble, the index figure came down to 66, and for part of 1927, it was as low as 56. After the franc was stabilized in 1927, and wage rates became more or less constant, the index figure was 61 for 1928, and 59 for 1929.
– And in 1930 their people are all working, while hundreds of thousands of ours are out of employment.
– A great many exaggerated statements are made in Australia to-day on the subject of deflation, which may be defined as the contracting of the basis of credit. According to figures published in to-day’s press, the value of bank notes in circulation in Australia at the present time is £45,153,000 as compared with £42,878,000 on the 17th November, 1929. That shows an increase of between 4 and 5 per cent: in the value of the note issue. It must be clear, therefore, that our difficulties are due, not to any contraction of credit or deflation of the currency, so much as to a loss of real income resulting from lower world prices for our staple products, and the sudden cessation of borrowing.
– The 5 per cent, increase in the note issue, . to which the honorable member has referred, did not have the effect of decreasing the purchasing power of money.
– The present increased purchasing power of money is due to the fall in world prices. This craving to manipulate the currency when times are bad is no new thing. After the Napoleonic wars much the same difficulty occurred as we are confronting now, and the suggestion was made that the British currency should be de-valued for the benefit of the aristocracy, who had been living rather high. During a debate in the House of Lords in 1823. Lord Stauhope said -
Ifwe contemplate the effects which the change of currency has produced upon taxation, we find that the public annuitants now receive twice as much in the produce of the earth as they did in 1819, and nearly twice as much as they then did in other commodities. Is not this to be considered as a most nefarious fraud practised on the nation, and as an act of public robbery?
One might also imagine that it was “ Lord Adelaide “ speaking in this way. To-day, it is merely a different section of the community which has a vested interest in bringing about a regime of easy money, and it is using the same arguments as were used then. The Marquis of Tichfield, who would probably correspond more or less to our “Marquis of Werriwa,” in the course of the same debate, demanded “ justice - simple justice - for the ‘ aristocracy of the country, who would inevitably be ruined, torn from their paternal estates, and reduced to spend a miserable existence in a foreign land - and all because, when money was abundant and prices high, they borrowed fearlessly.” Fortunately, the British Government did not at that time inflate the currency. The nation put its shoulder to the wheel and by hard work surmounted its difficulties. Because Britain faced her obligations at that time and made it possible for Australia to develop as she has done until our country has attained the best living standard in the world.
I wish to deal with this matter of repudiation by inflation, or watering down the value- of money. I do not believe that there are half a dozen honorable members on the other side of the House who would, if they could avoid it, countenance the failure of the country to meet all its commitments on due date; but I believe that some of them have foggy ideas as to what really constitutes meeting those commitments. The Premier of New South Wales has fervently denied that be advocated repudiation or countenanced it; but in one of his electioneering statements he made an implied, if not an actual promise, to the farmers of New South Wales, and has since repudiated it. Speaking at Parkes on the 6th October, 1930, he said-
Return Labour and restore the State to the prosperity of 1925 and 1927. We promised and we paid 7s. 6d. a bushel for wheat. What we did then we can do now.
– The honorable member is manipulating words so as to convey an untruth.
– The statement I have quoted is to be found in the advertisement issued by the Labour party, and appears under the photograph of Mr. Lang and the facsimile of his signature. Honorable members may entertain some foggy idea to the effect that the publication of such a statement was a justifiable electioneering trick, but it was certainly intended that the farmers should take it as a promise.
Quack remedies, such as have been suggested, if followed, would only lead us into greater difficulty. Inflation would only postpone the difficulty, and we should have to face it after losing our good name. The w’ay out of the trouble is not solely through governments and budgets. The present budget does practically nothing’ to help us out of our difficulties. As a matter of fact, it makes the recovery of our main industries more difficult. If we are to get out of our troubles we must sooner or later reduce costs. This Parliament cannot reduce industrial costs. All it can do is to remove obstructions to industry, particularly by avoiding the imposition of any form of taxation which falls heavily on production. The present Government has imposed a duty on kerosene, probably for the purpose of preventing a reduction of the salaries of public servants with incomes up to £725, which is vastly more than any farmer has been able to earn in Australia within the last two or three years. Taxing people living outside the cities in order to make things softer for a favoured section of the community will not help us out of our difficulties. It will only serve to bring us into greater difficulties.
What the country needs is that all sections should make a sacrifice. We shall get nowhere if certain sections try to put the whole of the burden on the wage-earner; or if other sections try to put it all on the primary producer or any special section of the community. All must share the sacrifice, and as a matter of fact, that is exactly what is taking place at the present time. Is not the biggest sacrifice of all, useless though it may be, that which is being made by the unemployed, tragically and hopelessly looking for some chance to get back to work? Before the unemployed can get that opportunity we must restore obi industries to a position in which they can pay their way. The capitalist must suffer big losses of his capital, and the land-owner cannot avoid a big writing down of what he believes to be the value of his land. He cannot pass on the burden to any other section of the community.
– What about a reduction of interest?
– Interest is always the last to come down, just as it is the last to go up. The interest rate has come down in every other country, and will come down in Australia as soon as the country makes an effort to pay its way. In the meantime, income from property will have to stand, and is standing, a very big share of the burden of taxation and the cost of running the country. But we cannot get through without labour also bearing its share of the sacrifice.
– It is doing so now.
– Yes, through unemployment, which is a rotten way of doing it.
– Also through rationing.
– Rationing is better than unemployment, but better than either is that men should be working all the time at a slightly lower wage than they have been receiving.
When all sections of the community are ready to make some sacrifice for their country we shall, not only begin to recover, but also get back to the state of prosperity we have enjoyed in the past. If we square up to the position properly in that way we shall get back our good name and still be proud of our country. I support the amendment. I believe it could go further than it proposes. Nevertheless, if it is carried it will be a step in the right direction; it will do something towards helping the country out of its troubles.
.- As one of two honorable members not attached to any particular party I am in the enviable position of being free to say exactly what I want to say without any fear of consequences. In that regard I noticed in the press of 11th November, a report of an address delivered by Mr. H. W. Gepp, Chairman of the Commonwealth Consultative Committee for Science and Development, upon the need for non-party cooperation. I do not propose to read all that Mr. Gepp said, but in the course of his remarks he stated -
I believe there is a growing feeling that the best is. not obtainable from our present political representatives of all shades of opinion whilst party interests predominate, and that the moderation or elimination of the party system is worthy of all consideration.
To-day’s Canberra Times, quoting a London cable, under the heading of. “Banish Party,” publishes the following:
The National Council of Industry and Commerce urges the Government and the Opposition to discharge party politics in favour of sound economies. “At present the country’s prosperity is the politicians’ plaything,”’ it states. “ The Council observes apprehensively the Government’s immediate programme and regards with dismay the economic failure of the Economic Conference, which was inevitable because the Government subordinated economics to politics. The solution of unemployment evades discovery and the former will soon become unmanageable. Britain should not wait for a general election, but should force their views on the sitting members demanding some sound non-party action.”
I pass from those opinions to the debate which is taking place in this chamber. I have listened with great attention to speakers on both sides, and I am more than delighted at the tone of the debate. With one or two exceptions the speeches delivered have been on a lofty plane and on non-party lines. The Government has called us together in the greatest crisis that has ever faced Australia, and we, the people’s representatives, are all honestly endeavouring to give of our beat to our country. There is, perhaps, not one honorable member, not even the right honorable member for Cowper (Dr. Earle Page), who has been trained in the higher fields of finance, yet being the elected representatives of the people it is for us to declare our opinions on this momentous question. I thought that the speech delivered yesterday by the Deputy Leader of the Opposition (Mr. Gullett) was one of the best I have heard him deliver in this chamber, and I congratulate him. I also congratulate the Leader of the Opposition (Mr. Latham) upon his speech. Another speech worth listening to was that delivered by the honorable member for Fremantle (Mr. Curtin). But I still think we are as far away as ever from a solution of the great problem facing us. I want to trace exactly the position and how we are facing it, and, in order to do so I shall mention various points which have been made.
The honorable member for Fremantle claims that the Opposition is blaming the present Government. Sir Otto Niemeyer blamed the Treasurers of the past, including, of course, Mr. Bruce. who was Treasurer iu the Hughes Government, and the right honorable memtier for Cowper, who was Treasurer in the Bruce-Page Government. At the Premiers’ conference in Melbourne in August last Sir Otto Niemeyer said -
Tim characteristics of the budget position aru that the Commonwealth and nearly all thi; States have had budget deficits for at least three years. These have resulted in an accumulated’ deficit, largely unprovided for, except by temporary methods of finance.
Next we have Mr. Bruce, in the Melbourne Town Hall a few clays ago, saying, like the good sportsman he is -
Let us forget, the past; vu are all to blame.
Then we come to the “ Big Four “ brought out by Mr. Bruce. In paragraph 24 of their report they gave all the Treasurers of Australia a very nasty dig. I think most of us have not noticed this very cryptic utterance of theirs -
A further general observutio.il suggests itself. Loan moneys raised overseas can only come to Australia in the form of goods. These goods are subject to the customs duties provided for under the Commonwealth tariff on importation into Australia, and arc in this way taxed to an extent estimated at from 15 ‘to 20 per cent, of their value. The result is that this proportion of moneys borrowed abroad foi’ capital purposes comes to the Commonwealth as revenue and is spent accordingly. This diversion of capital funds is, obviously, had finance.
Although I have handled some big trusteeships, I do not claim to be an expert financier, and I have sought the best advice so that I might have the figures taken out for me. They are rather staggering. For the nine years ended the 30th June, 1929, Australia borrowed £324,000,000, 15 per cent, of which amounts to £48,000,000, and 20 per cent, to £64,000,000. That is to say, for the whole period of niue years either £48,000,000 or £64,000,000 has been paid into the current account of the Commonwealth from moneys borrowed abroad. The average has been £5,500,000 per annum on a 15 per cent, basis, or £7,000,000 per annum on a 20 per cent, basis. It is astounding to think that we were getting wealth from money we borrowed and using it as i income in a way described by the “ Big Four” as “obviously, bad finance.” However, we did it; we drifted along; but, as Mr. Bruce says, “ Let us forget the past; let us face the future.”
The next body to give us a rather extraordinary prophecy was the Tariff Board, whose reports we do not have many opportunities to debate. In 1925-26, foreseeing what was likely to happen in 1930, and which actually has happened, the Tariff Board declared -
We ari; strongly of the opinion that the industrial unions of the Commonwealth should be induced to realize the critical position into which the Commonwealth is drifting and the absolute necessity for preventing the wages gap from becoming still wider between the United Kingdom, the Continent of Europe and the Commonwealth, otherwise, the Tariff Board, placed as it is in the position to take a comprehensive and intimate view of all Australian industry, can see nothing but economic disaster ahead, and that at no very distant date.
So there were some among us who, in a time of unbounded prosperity, when everything was going well, were game enough to publish that ominous prophecy which has come true.
The position as we find it, and it’s causes, need not be discussed by me at great length. What is the use of traversing the whole subject again? We all know that there is a drop of £80,000,000 per annum in the national income. Rents in our capital cities and suburbs ure down over 50 per cent. Incomes, owing to the financial crisis and the crushing burden of taxation, have dropped 80 per cent. There is a reduced demand in the world’s markets for our exports, the prices of which have seriously declined. Then there is the frightful problem of unemployment. And what of the money borrowed !
How much money does Australia owe? Commonwealth and State loans maturing in December, 1931, amount to over £76,500,000, all of which, fortunately, are internal loans. In addition to that huge sum, we have £7,000.000. of internal treasury-bills, and. £10,000,000 of treasurybills in London. Local loans amount to £83,693,807, which with the £10,000,000 falling due in London make a total of £93,693,S07. This burden of loan indebtedness is distributed among the Commonwealth and States as follows: -
We cannot escape from this position, so let us examine it. For the next four years, Australian loans to the following amounts will fall due: -
That is a prospect which almost makes one tremble. It is an appalling position into which we have drifted. Industry lias not caused it; the Parliaments of Australia are responsible for it. We politicians have brought this about by our actions down through the years. For the last nine years, after the awful war, we have spent money in millions instead of thousands. We have drifted into wilful extravagance. We must now boldly face the facts, and, as Australians, we are not frightened to do so. That great financial expert, Sir Otto Niemeyer, to whom I shall refer later at some length, stated in his address at the Premiers’ Conference in Melbourne -
In short, Australia is off budget equilibrium, off exchange equilibrium, and faced by considerable unfunded maturing debts, both internal and external, in. addition to which she has on her hands a very large programme of loan works for which no financial provision has been made.
That is the observation of a. man trained for 25 years in the highest realms of finance. How is the Government in power dealing with this situation? The members of the Cabinet are the only persons who have to come into the open and say what they are going to do, because they are in power at the present time.
It may be as well to have one speech, at least, in Hansard which will show exactly what has been said and what has been done in connexion with the present crisis. Honorable gentlemen will note how often the words “ balance the budget “ crop up. On the 9th July, the Prime Minister (Mr. Scullin), in presenting his budget, said -
The. Commonwealth is temporarily unable to secure command of funds in London, and external exchange will be pooled in London in order that the Government may have first call upon it. No further drift in Commonwealth ti minces can be permitted. The balancing nf thu budget is an essential step in the restoration of credit. The Government will take immediate steps, if necessary, in order to prevent” disturbance of the budgetary position.
Now 1 come to the 20th August, when a cabinet meeting was held, apparently, in Mr. Scullin’s private sick room. It was said that, after four hours of deliberation in Cabinet, the Acting Prime Minister (Mr. Fenton) returned to the Premiers Conference, mid according to the official report, announced as follows : -
The .Federal Cabinet has agreed that tinbudget shall be balanced this year, and that steps will be taken at the earliest moment necessary to adjust the position, firstly, by a reduction in expenditure, and secondly, by any adjustment of taxation required to be made so us not to encroach on the State Held of taxation.
On ibo 23rd August, the Acting Prime Minister stated, on behalf of the Cabinet, that the Commonwealth would honour the Melbourne agreement, which it had made with the States. He promptly declared that the Government would not repudiate that agreement, or the resolutions in which it had concurred. On the Sth September he appealed to every section of the community to help the country, and to play its part, declaring that’ private enterprise was the field to which they must look for a revival of employment. One might observe here that, owing to the appalling taxation of private enterprise, the appeal of the Acting Prime Minister is somewhat stultified. On the 16th September, the Acting Prime Minister, Mr. Fenton, announced -
Economies have formed the greater part of the investigations by the Cabinet subcommittee. Even with all our reductions there must be further taxation. We are not going to impose more than vc can help. We are not going to put any further burden on industry. Wo want industry to expand so that employmen may bo found.
After that announcement, something apparently happened. A change came over the scene. On the 3rd October, the Acting Prime Minister, in an official statement, declared -
Proposals to balance the budget were approved at the Melbourne conference. It was agreed that expenditure must be reduced at the rate of approximately £4,000,000 a year. The recent decline in’ market prices of Government stocks shows that nervous holders are selling securities through fears that are quite unwarranted, and the Government fully recognizes that these fears must be reduced at once.
The Government, therefore, takes this opportunity of notifying the public that the proposals will include reductions and economies in expenditure at the rate of £4,000,000 a year.
Those reductions have not been made. My last quotation has an apt bearing upon the point made by the Deputy Leader of the Opposition (Mr. Gullett) last evening when he addressed the House at some length on the “fear” factor. Who would lend money to a country that would not face its responsibilities? A trustee in England, having large sums to invest, and seeing what is going on in Australia, would not look to this country as a safe field for the employment of his capital. . 1! agree with the Acting Prime Minister and the Deputy Leader of the Opposition that that fear must be removed ; otherwise we shall sink further into the terrible morass in which wo find ourselves. But what happened?
– The “left wing” got busy.
-I do not know anything about thatbut something has happened. There has been trouble in the Labour caucus. The news has got out. We had a similar experience when I was a member of the Nationalist party. Nothing could take place in the party room without it being known outside within on hour. Every honorable member knows that, and that is why credence must be attached to statements published by the press of Australia in regard to proceedings in caucus. Prom time to time we have noticed in the press that nothing has come of all the undertakings given by the Acting Prime Minister and the Acting Treasurer, and now we come to the financial statement regarding the position with which Parliament has been summoned to deal.
Not one honorable member, not even the honorable member for Dalley (Mr. Theodore), whose knowledge of finance I greatly admire - whether I agree with some things that, he has done, past and present, I need not say - can assist us much at this time. The only persons who can help us are the type of men who were invited to Australia in connexion with this crisis, and, also, our own banking experts. How well I remember the Prime Minister coming to the table in this chamber, and quietly announcing to the House that the Bank of England was sending out to Australia one of its leading representatives. He came out. The story of his coming was given by the Acting Prime Minister himself, whose version is almost word for word with Sir Otto Niemeyer’s own statement as to the circumstances leading to his visit. It also agrees very closely with what was said during the State election in New South Wales. I may mention that I think the ex-Premier, Mr. Bavin, made a great mistake in castigating the Acting Prime Minister and the Acting Treasurer for not having said something about Sir Otto Niemeyer’s arrival during the election. I remember distinctly what the Acting Treasurer said. Speaking, I think, from Melbourne, he remarked -
The ex-Treasurer, Mr. Theodore, finding himself in financial difficulties, had communicated with the British Government. The British Government had communicated with the Bank of England, through the Chancellor of the Exchequer, Mr. Snowden, when Sir Otto Niemeyer’s name was mentioned for submission to the Commonwealth Government. The Commonwealth Government then accepted the name of Sir Otto Niemeyer, and promised hima welcome to Australia.
Thoseare almost the exact words that I read in the press at the time, so that the Acting Treasurer (Mr. Lyons) did make a clear statement of the pros and cons of Sir Otto Niemeyer’s arrival.
– It was very belated.
Mr.Bayley. - What about the statements of the Assistant Minister for Industry (Mr. Beasley) and the Minister for Health (Mr. Anstey) ?
– I am coming to them. The difference between the statement of the Acting Prime Minister (Mr. Penton) and that of Sir Otto Niemeyer is very slight. The Acting Prime Minister said that Sir Granville Ryrie - who represents the Commonwealth - went to the British Treasury, which in turn consulted the Bank of England. That institution then submitted the name of one who for 25 years has been in the highest school of finance. For ten yearshe was attached to the British Treasury, and for the balance of time has been with the Bank of England. He has been throughout, a member of the Finance Committee of the League of Nations, and was for a period chairman thereof. He is the man who adjusted the finances of Roumania, Bulgaria. Greece, and other countries after the terrible fall following ‘ the Armistice. He’ worked to such good purpose that those- countriesto-day borrowing money uponthemownsecurities.Thatman came out here. His statement to theMelbourne conference’ was published’, not by himself, butwiththe unanimous’ consent of the Prime Minister and the Premiers. At that conference the following resolution of thanks’ was unanimously passed by the Prime Minister and the State Premiers’ to Sir Otto Nie- meyer: -
RegardingtheworkofSirOttoNiemeyer andhiscolleagues,thePrimeMinisterof Australia andthePreamiersjoininexpressions ofappreciation,notonlyofhisveryskilful ad vice, but also of his willingness to meet a conference of Commonwealth and State representatives.
That offer of thanks was made, by the Prime Minister on behalf of this National Parliament; yet he received gross insults from member’s of the Federal Cabinet. I. come how to, the reported statement of the Minister for Health and the Assistant Minister for Industry at Quean beyan. I hope that the report was wrong; but according to it, Sir Otto Niemeyer and those associated with him were, called vultures, arid toldtogetout of the country, because’ they were not wanted. Is itnot a fact that only by the help of those’ men are’ we likelyto get out of our present difficulties?
During the last.State elections some of my many Labour Supporters in Wentworth came to me and said, “ What about this chap Niemeyer?” I said; “ Iwent to Randwick last Monday and met the celebrated trainer Billy Kolso.” Myfriends interjected, “ Never mindabout that; what about Sir Otto?” I replied! “Wait a minute arid I shall tell you. I met Billy Kelsoand said, ‘ Nice day, Bill ‘. He said ‘Yes’. We indulged in quite a lot
Of inconsequential small talk, although I was dying toaskhim what I had in my mind.SoverysoonIsaidtohim, What about thenext race?’ He said,
– At what price did he start?
– The honorable member will be able to make his speech later.
I come now to the financial statement for the consideration of which theHouse has beencalled together and to the amendment moved by the Leader of the Opposition. This is naturally a most important document, well considered by the Cabinet, otherwise we should hot have been called together to discuss it, and it would hot have been tabled. The first thing one notices about it is the frequent repetitionof those dear did words’; “ balance the budget.” It is firstmentioned in connexion with the Australian Loan Council meeting held on the 10th June, 1930. At that meeting the Honorable E. G. Theodore, then Treasurer, represented the Commonwealth and a joint statement was issued as follows:-*
The members of the Loan Council appreciate that the consideration of the financial position of the Commonwealth and each State involves a review of financial policy of each government, and that it is not the function of the Loan Council to determine, or even suggest, the form which that policy should assume. The Treasurers feel, however, in view of the difficult outlook generally, that it is proper and advisable for them to urge Upon ali governments the heed for the utmost economy in regard to expenditures, and also that it is essential that the budgets of the Commonwealth and the States be balanced for the forthcoming financial year. This is necessary, not only because of the Australian position, but also because of the serious effect which the continued deficits in the accounts of the Commonwealth and States have undoubtedly had upon the credit of Australia abroad.
This phrase was again mentioned in July by the Prime Minister (Mr.- Scullin) in his reference to the deficits of the preceding three years. He said-
Parliament must recognize, however, that no further drift in Commonwealth finances can be permitted, and that the balancing of the budget is an essential step for the restoration of the credit of Australia.
Thirdly > the words “ balance the budget “ appear in the following paragraph: -
At a further meeting of the Loan Council on the oth-6th August, when the Prime Minister represented the Commonwealth, the following resolution was unanimously adopted :-
That as the loan policy Of the Commonwealth and States is wrapped tip with the balancing df the budgets, representa ti.ves of the Commonwealth and State Governments Should meet in Melbourne on Monday, 18th August, with the object of balancing the budgets.
Fourthly, this phrase appears in the following : -
A Premiers’ Conference was accordingly convened, and, after full consideration of the whole position, the following resolution relating; to the budgets was unanimously passed :-
That the several Governments represented at this conference declare their fixed determination to balance their respective budgets for the financial year 1930-31, and to maintain a similar balanced budget itf future years. . . . Further, i:f during any financial year, there are indications of a failure of revenue to meet expenditure, immediate further steps will be taken during the year to ensure that the budgets sholl balance.
This financial statement has been prepared by the Government, and on practically every page of it appear the words “balance the budget.” The final quotation appears on page S of the statement, in which the” Acting Treasurer states -
The first need in present circumstances is that the Government should také steps for the balancing of the budget.
That is the case for the Government. The question is: Has the budget been balanced ? Has the saving of £4,000,000, as set out in the statement, been effected? It has not, notwithstanding the promises and utterances of Cabinet Ministers. What has happened?
The press has from time to time published accounts of the ructions in the caucus, and the names and division lists of those who were against the Acting Prime Minister and the Acting Treasurer, mostly on the point raised by several honorable members in respect of inflation of the note issue and deflation of our money. In that regard, it is not strange that the honorable member for Dalley (Mr. Theodore) voted with the Acting Treasurer. He rightly did so, although it was previously stated that he was against the Government or the moderates in the Cabinet. On this occasion he acted rightly, especially in view of bis statement as reported in the Herald of the 14th November, 1923, when he was Premier of Queensland. - It reads -
The Premier (Mr. Theodore) said to-day: The world has had many salutary lessons m recent years of the confusion caused by unstable money. Trade was paralyzed, commodity prices soared sky-high, wage standards were lost, and national bankruptcy ensued. With the exercise of ordinary prudence we may avoid the difficulties that have beset many European countries. Gold should be permitted to circulate freely, and to this end the embargoon the export pf gold should be withdrawn. Merely to pay higher wages in paper money achieved only disappointment, as the purchasing power of paper money will be less than the purchasing amount (power) of gold. By inflating currency we get into a vicious circle, and none suffers more than the workers, because their wages are paid on the assumption that commodity prices are in gold and not inflated paper prices. Wages1 are always less than they should be in countries that practise inflation.
That is the statement of the ex-Treasurer when lie was Premier of Queensland. The circumstances to-day are the circumstances of that time, so I say that he rightly voted with the Acting Prime
Minister and the Acting Treasurer in caucus. But I notice that he has wavered a little since, because, as reported in the Sydney Morning Herald of 30th October, he says -
By u judicious extension of credit increased purchasing power within Australia will be created which will result in a revival of internal trade, and give the secondary industries a chance to take advantage of the recent tariff protection, and will in that way and in other ways lead to increased employment. . . The measures necessary to balance the budget would require to be so drastic as to cause a greater evil than the one which is being remedied.
I am inclined to agree with the honorable member for Dalley in certain respects, and also with the honorable member for Fremantle (Mr. Curtin), who stated in his excellent speech the other night that it has taken us practically nine years to drift into the appalling position in which we are in to-day, and we cannot get out of it in three or four .months. There, is a great deal of truth in that. I do not think that any member of this Parliament believes that it is possible to absolutely balance the budget within the next few months. What, in my humble opinion, should be done, is to again seek, the best advice - whether it will be available after the treatment accorded to Sir Otto Niemeyer I cannot say - from men who, for the whole of their lives, have been devoted to high finance, with a view to coming to some arrangement that will ease the appalling burden represented by the tremendous debts that we have to meet in the next five or ten years. The Deputy Leader of the Opposition (Mr. Gullett) suggested the raising of a loan of from £20,000,000 to £25,000,000 for reproductive works, in which could be absorbed a large number of our unemployed. If we do not immediately face the position, the problem will become much worse than it is at the present time. As Australians, we are not afraid to tackle difficulties and surmount them. I strongly urge the Government to endeavour to arrive at some arrangement that will operate over a period of years.
The next point that I wish to make relates to taxation. Honorable members must have noticed in the press what the super tax upon property amounts to; it is nothing less than confiscation, and will bring about the destruction of industry.
I can illustrate the position to the Acting Treasurer by citing my own case. Estates in which I am either trustee or beneficiary have always been able to invest their surplus funds in Commonwealth loans, but, in the coming taxation year, it will be difficult to find sufficient to pay the taxes that are to be raised. We shall have left to us only 6s. 3d. in the pound on the returns from our property. This taxation, as the Leader of the Opposition (Mr. Latham) has stated, amounts to between 60 per cent, and 70 per cent. One property, in the heart of the City of Sydney, dropped £6,000 per annum in rents in four weeks. All other property owners are in a similar position. Rents have tumbled like a pack of cards, and many tenants of shops and offices cannot pay anything. In my own case, I had to call the whole of my staff together and place the position before them. I have always admitted that I have received far too much in dividends from watered stock, and that there should be a better distribution of wealth. I still hold those beliefs. I said to my staff, “ Looking at the wages sheet, I find that your average wage is £4 lis. 6d. a week - the award rate. How you keep a wife and family on that, 1 do not know. I cannot afford to pay you that amount now. I am not going to sack one of you, because that would be a tragedy. What are you prepared to do?” They realized the position; they knew how many shops and offices were vacant. They said, “ We will agree to be rationed at the rate of one week in six.” I believe that they are prepared to stand down three weeks in six rather than suffer dismissal. I have always held strongly the view that wages ought not to be lowered, nor the purchasing power of the community lessened. What is the use of producing goods if they cannot be consumed? As the right honorable member for North Sydney (Mr. Hughes) said, we have to face economic facts. But if you have not the money to pay wages, what are you to do? The only alternative to dismissal is to get round a table and talk the matter over. These are times when we must all help one another. The dismissal from government departments within the last few weeks of over 1,600 returned soldiers out of a total of 3,000, many of them minus, a leg or an arm, is tragic. Why could not a rationing scheme have been adopted to help these poor chaps over the stile ? They ought to have a little to take home every week to feed themselves and their families. Therefore, I say to the Government that, if possible, it should make less burdensome the proposed tax on property. What has been the effect already? Every honorable member has received a circular from the Real Estate’ institute of New South Wales, protesting against the proposed additional tax. It should be seriously considered, because no less than about £20,000,000 has been invested in city properties and factory sites in Australia by English investors.
– During what period?
– The amount has accumulated gradually over the last three or four years. Two years ago, while abroad, I found that conditions in France were fairly bad. I said to some of my French friends who had money, “ Why not invest your money in Australia? “ I was given instruction to find investments for some of it, and I invested it in city properties and factory sites. This proposed tax, plus the exchange, will exhaust all that is received for some of it from those properties so that there is practically nothing to remit to the investors. We should do everything that we can do to encourage people in other countries to invest in Australia, and thus give employment to our people. The way to do that is not to impose a super tax of 71/2 per cent., plus 15 per cent., upon receipts from property, leaving merely 6s. 3d. in the pound. What can a man do with that? Employees in industrial enterprises and domestic service will have to be discharged, and gradually the whole fabric will tumble to the ground. Every pound levied in taxation means a pound taken out of industry and consequent unemployment.
– How then are we going to balance the budget?
– We cannot balance in three or four months the accumulation of nine years. We must seek the best advice, and come to some arrangement that will enable us eventually to right the position. The circular to which I have referred contains thefollowing statements : -
There are thousands of property-owners, both small and large, whose incomes to-day have been reduced in some cases almost to the point of extinction, through the existing depression, which is responsible for a large number of houses becoming vacant. In addition to this, which is a direct source of loss of revenue and income, returns from their property have been materially affected for the following reasons: -
The inability of tenants to pay rent.
A large number of tenants leaving without paying, involving heavyloss to the owners.
The necessity, from a humanitarian point of view, of letting tenants who are out of employment, and consequently unable to pay any rent, remain in possession at possiblya nominal rental,, or no rent at all.
‘The excessive cost of repairs generally, which, it might be stated, has not been reduced in any -way.
The continuing high municipal and water and sewerage rates.
In addition to the above, property is already bearing a special tax on income as distinct from income derived from personal exertion.
Every word of that is true; I can vouch for its accuracy from my own experience. I have always been rather proud of the fact that my brothers, sisters, cousins, and aunts have never accepted their full allowance; but, on the contrary, have saved up and invested in industrial concerns to the tune of thousands of pounds. As the honorable member for South Sydney (Mr. E. Riley) knows, portion of our estate invested £60,000 in a factory in Sydney, and, in addition, we have purchased government bonds. We cannot continue to ‘do that, because practically all that we now get is taken from us in taxation.
I appeal to the Government to consider the seriousness of this question, and to ease up on those people, both at home and abroad, who have invested in city and suburban property. If it does not, its action “will be nothing short of confiscation, and the affairs of this country will totter, because funds will not be available to provide employment. At the present time many employees are being rationed ; but how long that will last I do not know.
I realize fully the extremely difficult position in which the Government finds itself in regard to finance and unemployment. Every week the ranks of the unemployed are being swelled. Honorable members know that I am not one who boasts ot blows his own trumpet, but that I always like to give this House the benefit of what I learn in my travels. Within the last three years I have asked the Prime Ministers of Japan, England, Canada, Prance, Germany, and Belgium, “ What is the cure for your unemployment 1” and the reply has always been, “ There is no statesman living who can furnish the answer to that difficult question.” The government of every country to-day is faced with this problem. The United States of America, which, with France, holds practically all the gold in the world, has an army of 5,000,000 men unemployed. One would naturally think that where there was wealth there would be no unemployment, because money would be available to ‘provide work; but that is not the case. Therefore^* there is no solution of the problem in that direction.
The question I stress is, what are we going to do to increase the chances of our people Obtaining employment? I shall indicate a few directions in which employment may be provided ; but money will be needed to pay wages. If the Government is trusted by overseas financiers, it will get all the money it needs. Tobacco-growing would absorb a small number of men. Then there is the production of oil from shale. At Newnes, t understand, the quantity available is sufficient for a maximum output over a period of 100 years. Another avenue is oil from coal. Ali officer has been sent from Australia to Germany to learn all about the process; and I was told to-day, by a departmental official, that in his last report this gentleman stated that he is more than satisfied with the knowledge that he is gaining. Thousands of men who are now unemployed could oe absorbed in the production of oil from coal. Another avenue is that of oildrilling on the most scientific lines, similar to the operations of the Oil Research Syndicate, of which I am a member. But the occupation which appeals most to me, as a Sailor, is that of deep-sea fishing. There we have an avenue that has not been touched, and is approached by none other in the world. In the Sydney Morning Herald about eight weeks ago, just prior to the State elections. Mr. Stead, the great fishery expert, published tlie statement that deep-sea. fishing in Australian
Waters would bring into Sydney and Melbourne at least £2,000,000 a Vear. At present, when the great cry of the multitude is “ employment it seems that we might direct our attention to the energetic development of our undeveloped fisheries resources. The only tangible effort made by the Commonwealth to conduct fisheries research was by the old S.S. Endeavour, from 1909 to 1914. Unfortunately, that Vessel foundered, with all her records, so that most of the fruits of her work were lost. Australia is a fish-hungry nation.. The per ‘capita consumption of fish in Australia is 14 lb., compared with 25 lb. for New Zealand and Canada, and 40 lb. for Great Britain. I know that men frequently comment upon the fact that their wives complain because they, have to pay ls: 6d. for a piece of whiting 6 inches long; It may interest honorable members to know that Australia annually imports about £1,500,000 worth of fish, and that our domestic production is valued at £1,200,000, so that £2,700,000 is spent annually in Australia on fish. The fishing industry in Australia shows distinct signs of languishing, because no active fisheries research work has been undertaken. If the Australian people consumed fish to the same extent as the English people-there is no reasonwhy they should not- the fishing industry would be worth nearly £8,000,000 annually to the Commonwealth. Think of what that would mean in the matter of employment. Do honorable members realize as I do, after an extensive tour of China and Japan, the market that exists in the East for dried fish alone? The fish obtained in Japanese water’s are not nearly sufficient to meet the requirements of those countries. In journeying through China and J apan, I noticed that wherever they were travelling they’ carried a small wooden box consisting of two compartments one containing rice and the other dried fish. As the consumption of dried fish in China alOne is exceptionally large, a wonderful market exists which could be profitably exploited by Australia. On the basis of the average annual earnings of those engaged in the Australian fish industry being £200, a production valued nt £8,000,000 annually would iti nin tain 40,-000 bread-winners. The industry would also provide indirect employment for many thousands more, especially if the valuable by-products of fish- meal and fish oil, for which there is a world demand1, were added. Mr. Stead lias said that cnr waters are teeming with fish ; but the harvest of the sea cannot he gathered unless capital is attracted into- the enterprise. The initiative iri this regard rests with the Government. Although the industry is well established in Great Britain the Ramsay MacDonald Government has at present in contemplation the purchase of a research’ vessel at a capita?: cost, including scientific equipment. Of £80,000, and has guaranteed to spend £34,000 annually for a period of five years on running expenses.- The British Government realizes that the fishing industry provides employment for a vast number of men and women’. Last year the Canadian Government spent £300,000 on -the development of her fisheries, While the expenditure in Australia was nil. The South African Government is at present building a new research vessel at a. cost, of £24,000. It is interesting to note that in 1928 the cray-fishing industry in South-west Africa was worth not less than £200,000. If honorable members visualize our vast potentialities in this regard, they will see that Australia is missing a golden opportunity; Last year Canada marketed 90,000,000’ lb. of fish from her Atlantic fisheries, quite apart from those on the Pacific coast. In British Columbia where the industry has made rapid strides, the quantity of pilchard landed for this purpose increased from 2,750,000 lb. in 1924 to 101,000,000 lb. in 1926. In California, where the pilchard is used for canning as well as for fish by-product manufacture, the quantity landed increased from 15.000800 lb. in 1916 to 315,000j000 lb.- in 1925- truly a phenomenal development. I understand that fish meal is becoming increasingly popular for cattle, pigs and poultry, as it is rich in those elements which are deficient in our natural- postures. While other countries are moving forward in this direction, Australia is not doing anything. I compliment the Government upon making tin attempt to do something iii this direction, as I notice that £50,000 is set down iii the Estimates for the current year to cover the cost of constructing a trawler to undertake research work. This expenditure was strongly recommended by Mr. Stead and others who realize the extensive possibilities of the fishing industry. I appeal to the Government to provide this £50,000 - I know it is difficult - for the construction of a research vessel, particularly as a good deal ofBritish money would be invested’ in the industry if it were established ki Australia. I learn, however, from newspaper reports, that this work is not yet being proceeded with. To me that is calamitous1. It is easy to talk of depression and restricted finance; but unless we endeavour to extricate ourselves we shall sink further and further into the abyss. This subject should also be studied from another aspect.- Admiral Jellicoe is taking a great interest in the fishing industry, because he knows the value of the naval services rendered by men trained in the British fishing fleets. At the outbreak of the war I was sent by the Admiralty to Wick in the northern mists to gather in- and train thousands of men engaged in the fishing industry. It was the men who had been engaged1 in the British fishing fleets who did the patrol work, and who materially assisted in checking the submarine menace during the first three years of the war. As one of their commanders I know how keenly Admiral Jellicoe supports the deep sea fishing industry, which, if established in Australia, would provide thousands of naval reservists. We should proceed with ;i bold policy of reproductive development. We pay bounties amounting to hundreds of thousands of pounds to industries which will, probably, never become self-supporting. For the products of the fishing industry we have a big home market, and an ever-increasing market in the East. Surely, such a project merits an initial capital outlay of £50,000, which would produce a valuable asset, while the work accomplished by a. research vessel would be of lasting benefit to Australia. If our governments
Will but seek and follow the best expert financial advice, and our people will pull together in adversity, realizing the visible and potential wealth of the country, and the inherent strength of its citizens, the dark clouds that now overshadow us will surely roll away.
– The honorable member’s time has expired.
said that the taxation proposals of the Government did not appear to have many friends in this House, and judging from the speeches which have since been delivered, I do not think that they have made any new friends. There will be no friendliness expressed towards them in my speech; but. I have to consider my responsibilities when the country is facing a crisis. My leader stated on a. number of occasions that the Government would do its best to meet the crisis and to balance the budget. I shall support the Government’s taxation proposals, because I consider it my duty to assist the Prime Minister in honoring the pledge he gave. 1’ do not wish to be identified with, shall I say, the wild statements made by some honorable members on this side of the chamber in regard to inflation. I do not know whether honorable members realize it, but this subject will be the issue placed before the people at an early date. T recognize some of the dangers of undue inflation, and I wish to make my protest against any move in the direction of excessive inflation as suggested by some honorable members on this side of the House.
– What does the honorable member mean by excessive inflation ?
– I used that expression deliberately. The honorable member for Warringah (Mr. Archdale Parkhill) does not expect me to say that I am opposed to inflation of any kind, because he knows that inflation and deflation is continuously going on in connexion with currency and credit arrangements. If the honorable member desires me to elaborate my statement I can do so in a few words. I am opposed to any inflation which will carry us in the direction of an excessive or even a marked increase in price levels, and would probably cause a corresponding reduction in the real value of the wages of the working people of this country. I have no desire to avoid explaining what I mean by “ excessive “. . I am not afraid to declare plainly where I stand in regard to inflation. I believe that inflation would not be to the advantage of the mass of our people. It was claimed to-day, by certain honorable members who favour the inflation policy, that Mr. Wickens, the Commonwealth Statistician, was on their side. I have read the statement made by Mr. Wickens, and I understand it to mean that only such inflation should occur as the banking companies, as a whole, or the Commonwealth Bank, favour. Mr. Wickens was speaking of the Commonwealth Bank as it is at present constituted. Tlie honorable member for Adelaide (Mr. Yates), and the honorable member for Werriwa (Mr. Lazzarini) are totally unjustified in “ laying the flattering unction to their souls “ that Mr. Wickens is in favour of the kind of inflation that they advocate. I shall specially oppose the kind of inflation which will result in an increase of credit by, as the honorable member for Werriwa puts it, writing something on one side of the ledger of the Commonwealth Bank, or the issuing of additional Commonwealth notes for the purpose of redeeming loans as they fall due. If the £28,000,000 loan now on the market had been dealt with in this way it would undoubtedly have liberated credit to the extent of £2S,000,000 in this country, and this would have had a good effect temporarily, and tended to the acceleration of business. But do honorable members who advocate that policy suggest that thi? next loan that falls due should be dealt, with in the same way, and that we should continue along those lines? I tried unsuccessfully to-day to get an honorable member on this side of the chamber, who advocated redeeming the present loan by that means, to deal with this point.
In my opinion it wouldbe disastrous to Australia if we adoptedthat policy.
In the course of his speech on. this subject, the honorable member for Adelaide said that no one had been forced to put his money into government loans; but if honorable members will take their thoughts back to 1916, or 1917, they will remember that the people were then told, as clearly as they could be told, that if they did not voluntarily invest in the Commonwealth war loans, they would be compelled to do so. It was at that time that I had my first personal experience of Commonwealth loans.
– Did the honorable member put some of his money into one?
– I did ; not that I had very much to put in. The statement has been made that bondholders gain by investing in these loans, because the value of the bond increases. But that was not the case in connexion with the first loan in which I invested. Let us say that I put £100 into that loan. It represented the savings of a number of years, during which the purchasing power of the £1 was £1. Unless the £100 that I receive when that loan is repaid has the purchasing power of £100, I shall be the loser and not the gainer in purchasing power. Let us assume that 1 put another £100 into a. loan during 1921 or 1922. Compared with the war period, the purchasing power of £1 at that time was only about 11s. 6d. It is probable that on account of the deflation that will-have occurred by 1935, when that loan becomes repayable, the purchasing power of the £1 will be between 14s. and 16s. In that case, I should be the gainer and not the loser, because I saved that money during an inflation period. But I do not favour that kind of thing. Of course, if events turn that way, I shall take my money just as others will take theirs; but I would far rather see a system of stabilization instituted which would ensure that investors would get out of government loans money with the same purchasing power as the money they originally put in. If we could devise such a scheme it would be an excellent thing, but I know there are tremendous difficulties in the way. It is regrettable that our human systems are so frail in these matters.
My main purpose in participating in this debate is to road a few quotations from a book entitled Commercial . Crises of the 19th Century, written by H. M. Hyndman. I could have obtained higher and more widely known authorities, but I have chosen Mr. Hyndman in the hope that certain honorable members on this side of the chamber will give some consideration to his views. This man was a socialist, and could not be accused of favoring the existing capitalistic system. He did not set out, in this book, with the purpose of dealing with inflation and deflation, but in the discussion of the financial crises of the last century reference to that subject was inevitable. Mr. Hyndman takes the stand that production should be for use andnot for profit, and in that connexion most, on this side of the chamber, agree with. him. [Quorum formed.] This book was written in 1892, and Mr. Hyndman dealt with events right up to 1889.
– The war has taken place since then, and has changed the whole aspect of finance.
– I do not agree with the honorable member for South Sydney. I admit, of course, that financial systems have been evolving and developing since that time, and that considerable changes have occurred. The crises and bank failures that more or less commonly occurred at that time forced the banking companies to get together and take steps to protect and assist* each other in times of difficulty; but the facts with which I shall deal, and the quotations which I shall make, have just as much application to the conditions of to-day as they had to those of 1824. My reading of history forces me to the conclusion that undue inflation has always had the same effect. The first quotation that I shall make is from page 29 of the book. It reads as follows: -
The following passage might almost be read as referring, not to 1824, but to 1889: - “In the spring of 1824, when heavy payments had to be made on account of the South American loans and mining companies, so large an amount of gold and silver bullion was exported to South America, that a sensible deficiency was caused in the available currency of Great Britain, and during the whole of the year 1824. and the first three months of 1825, ‘the Bank of England materially increased its note circulation”. At the same time the provincial banks, under a mischievous act of parliament, passed in 1882, swamped the whole country with paper money, which found a ready outlet in that time of rising prices and universal speculation. In 1825 there were nearly thrice as many such notes out as there were in 1822; while between June, 1824, and October, 1825, from £10,000,000 to £12,000,000 of coined money was issued from the mint. Every step was thus taken to encourage speculation to the point of actual danger to the State, and to inflate the existing inflation beyond all precedent.
So long as money could be obtained at a low rate of interest, and interest was maintained at a low rate by the enormous issue of small bank notes, the speculation went on; and, as has been said, all classes and both sexes took an active part in the scramble for wealth. in six weeks no fewer than 70 provincial banks failed. In London and in the country, commercial houses fell one on the top of the other like a house of cards whose support is removed. Credit was almost at a standstill”. It was impossible to say what constituted wealth for the purpose of carrying on business or meeting liabilities. The distrust was as profound as the confidence had but now been overweening. Whoever had loans out called them in ; whoever had money in hand refused to part with it on any terms. From one end of Great Britain to the other people looked blankly in one another’s faces, not knowing whence had arisen this sudden tornado of financial despair. Little else was discussed in the exchange or on the market place. While some said that the whole thing was purely imaginary, tlie result of foolish fears and scandalous rumours, others maintained with equal vigour that the crisis was but the beginning of the end, and that the downfall of our whole industrial and financial system was close at hand.
Over-inflation is likely to bring about crises such as those to which I have referred. I know that I shall be told in some quarters that the trouble is due to a shortage of currency, and in others that it is the result of over-production. I support the latter theory. A temporary burst of prosperity comes along, and under its influence we. enjoy good returns, which engender great confidence in the community. Eventually that confidence becomes over-weening and leads to blind speculation. There follows a further burst of fictitious prosperity. Then comes the first whisper that things are not what, they ought to be. A panic follows, with the result that we all know only too well, whether from experience or from our reading. Take the redemption of a big national loan by inflation. When the transaction is completed the money becomes available to the general public of the country in notes or by book entries. The resultant credit is used in various directions, and brings about improved times. To obtain anticipated profits our manufacturers work their plants overtime. Shelves and bins are again stocked to capacity. Later, things once more begin to slip back. And on each occasion the same old process will be demanded and repeated. Speculation becomes wilder and wilder, until, in the words of the scriptures, ‘ the last state is worse than the first “. My next extract refers to the period 1836, and is taken from page 43. It reads - “In the year 183(5, speculation had again reached such a pitch that 42 new banks of issue were established which, with their branches, gave a total of fully 200, and taking into consideration other credit establishments and their branch banks, there were no fewer than 070 such institutions on foot with about 37,000 shareholders: and of these three-fourths issued their own notes.” During these years, both the Bank of England and thu other banks had issued paper largely in excess of the amounts previously in circulation. But now, in the spring of 1830, the Bank of England, as in 1825, began to reduce its note issue, and was forced, in view of the drain for gold which had set in, to America to raise its rate of discount. Thereupon, the banks of issue, instead of following the Bank of England’s lead, issued 50 per cent, more notes than’ before, thus rendering tlie directors’ action to protect their gold reserve from depiction, almost nugatory.
Hence ti rose fin expansion of credit which speedily gave rise to a glut. tt is useless for anybody to exclaim that that took place under a system which allowed private banks to issue their own paper money. I am aware of that. The point that I am trying to deal with is the inflation which results from the overissue of paper money. In that particular instance the consequences were as follow : -
A great bank iti .Ireland suddenly failed, and a run commenced on the .provincial banks <>f the South of England, which threatened to end as disastrously as the similar run in 1825, seeing that the banks of issue held at this time but a sixth part of their note circulation in specie. This time, however, the Bank of England came to the rescue of one of the great northern banks, and a crash was staved off.
And this is how the American position during 1825-1839 is described-
During the interval between 1.S25 and 1830, the United States had entered upon a career of false banking, based, to a large extent, upon fictitious land sales, and backed up by loans incurred in Great Britain. From 1832 onwards, a period of wild speculation had commenced, which the banks as usual had helped to extend and intensify by an excessive issue of paper money, amounting in the year 1837 to £90,000,000 for a population of about 18,000,000: an inflation which individual capitalists carried yet further by raising loans on their private property and businesses in England. In spite of the warnings of President Jackson, this dangerous system was pushed to the extreme. In vain was the extravagance, corruption, and swindling denounced by those who saw whither all this must lead. Paper money in excess seemed an easy way for all to make fortunes at once, and none would listen to reason so long as the universal prosperity seemed unshaken. In short, the old story of all such periods was retold on the other side of the Atlantic. The price of lond and commodities, the rents of houses and the wages, of labour, all rose together, and endless new enterprises were undertaken, numberless now houses were built. Any difficulty in high places was met by still further loans at high rates of interest in London and Amsterdam. There seemed, literally, no limit to the length to which things might be pushed, as there was assuredly no restriction put upon the action of the banks. No one seems to have imagined that the upset of all this extravagance and folly could come from England, which had been helping by her loans to breed this exaggerated confidence. No telegraphs then existed to keep the more wary on the alert as to the coming change. But the rise in the rate of discount which followed opened their eyes, and the crash which ensued was on a scale of truly new world magnitude. When credit first gave way the whole of the American hanks suspended specie payments, and eventually, in 1837, 618 banks, and In 1839, no fewer than 595 banks failed. Notes became worthless, loans remained unpaid, advances were not to be had, bankruptcy’ seemed to become the rule in trade rather than the exception. The records of the period showed that the Americans themselves felt, for a time, almost hopeless of any speedy recovery. The advocates of “ soft money “ had had for the moment their fill of it.
– That is happening to-day in the United States of America, notwithstanding its vast accumulations of gold.
– That may be so, but the honorable member will surely not seriously argue that inflation is impossible where there are large supplies of gold? If I had the time I could refer him to what occurred during the Crimean War. Great quantities of gold then went to Great Britain from Australia and California, and despite the tremendous war expenditure, there was inflation of the currency in the Old Country.
– It is no use living in the past. We have to deal with the present.
– I am not living in the past. [Quorum formed.] I have learned that it is unwise to allow the immediate present to obscure our vision of probable future events. My experience is that, history has a habit of repeating itself; that if certain things happened then, they are likely to happen again at some future date. But if my honorable friend objects to my attempting to draw a lesson from the happenings in certain of the American States, I shall come nearer home for my illustration. I remind the House of the trend of events in Australia between 1887 and 1893. During that period, British capital was flowing into Australia in such volume that in Victoria, at all events, it could not be employed profitably. The crisis came in 1893, in which year banks failed almost daily.
– The same position has arisen in the United States of American to-day.
– I am not closely in touch with the present position in that country, but I have noticed, from press reports, that a considerable number of smaller banks there have failed lately. I am stating my views on this subject in all sincerity. I feel convinced - other honorable members may hold the contrary opinion with equal sincerity - that any move in the direction of undue inflation will result in disaster. If supporters of this policy believe that its adoption will right the wrongs of the present time; that this country will then emerge from its state of financial and industrial depression into a brighter atmosphere, they are doomed to disappointment. On this subject mine may be a voice crying in the wilderness, so far as the members of my party are concerned, but I hold my belief in all sincerity, and I am prepared to stand up to it. I am convinced that undue inflation is a dangerous weapon to use, and that its effect upon the working class of this country will be disastrous in the extreme.
– If the Government really intends to offer proposals to solve our present difficulties, the sooner this House gets down to the job the better it will be for the people of this country. I listened with interest to the speech of the honorable member for Angas (Mr. Gabb), who is opposed to what he terms undue”inflation. I suggest that his arguments might be addressed with advantage to members of his party in the caucus, and thus save the time of this Parliament.
– I am not silent at the caucus meetings.
– I am glad to have the honorable member’s assurance to that effect, and I hope that he will obtain increasing support for his views among his colleagues. It is extraordinary that, at this juncture in our national affairs, it should be necessary for us to argue whether or not inflation is desirable. For some months the finances of the Commonwealth have been allowed to drift to the bad at the rate of £30,000 per day. Recently we were summoned, as a Parliament, to consider proposals which, we were given to understand, would balance the budget. We know now that the Ministry does not contemplate balancing the national ledger this year. The Acting Treasurer’s proposals provide for a deficit of £2,000,000. Several months ago, the Prime Minister (Mr. Scullin). in conference with State Premiers, and the then Treasurer (Mr. Theodore) in conference with State Treasurers decided that both Commonwealth and State budgets should balance. This decision followed a consultation with high financial authorities representing the Bank of England who were invited to Australia by the Federal Government. Since the matter was settled so long ago, it should not have taken this Parliament more than five minutes to endorse the decision and proceed to the consideration of proposals to solve our difficulties. All business concerns, large and small, and even the workers themselves, should be assisted to balance their budgets. We all deplore the plight of so many thousands of the working classes, and we sympathize deeply with those who return nightly to their homes saddened by the knowledge that, through their inability to secure employment, their little ones must suffer deprivation of the necessaries of life and of comforts which, in ordinary circumstances, would be theirs to enjoy. Surely all honorable members realize that time is of the essence of the contract in this matter, and that we should bestir ourselves. Unfortunately, thousands of young men in all parts of Australia are reaching manhood without any prospect of employment. Their present condition will be a serious- handicap upon them for the rest of their lives. In July last the Prime Minister declared that the balancing of the Commonwealth budget was an essential step to the restoration of the credit of Australia. Subsequently, at a meeting of the Loan Council, the issue of the following statement was authorized : -
It is essential that the budgets of the Commonwealth and the States be balanced for the forthcoming financial year.
After conferring with the Premiers of the States, the right honorable gentleman authorized the publication, on the 18th August last, of the following resolution : -
That the several Governments represented at the conference declare their fixed determination to balance their respective budgets for the financial year.
– How many of them have done it?
– They are now engaged in the attempt; but the honorable member and those who direct his policy in this House have been doing their best to prevent our budget from being balanced. I wonder whether the honorable member has seen a statement recently made by Mr. Jock Garden.
– Jock Garden has balanced his budget every year. He is a wealthy man.
– Perhaps he is; but has he, while acquiring that wealth, given the attention he should have given to the real interests of the workers who have not acquired wealth or work, and whom he is supposed to represent? This is his statement -
That to free the credit resources of tlie country the Federal Government should provide £20,000,000; that the decisions of the Premiers’ Conference should be repudiated by the Federal and State Labour Governments; and that the Loan Council should bc dissolved.
On the 27 th October, 1930, there was published in the press a message from the Prime Minister in these terms -
The Commonwealth ‘.Parliament will meet on Thursday to pass legislation necessary to” balance the budget for the financial year, in order to restore Australia’s credit. The Commonwealth and State Governments unanimously agreed to take measures to reduce expenditure and increase revenue.
In a further statement he said -
The Commonwealth Government’s undertaking to meet our obligations will be honored, and J. inn confident all State Governments will do the same. The necessary remedies are unpleasant, and thu task difficult; but we are determined to face and, as far as possible, solve our problems. With cooperation and the exercise of patience, Australia will pull through.
Contrast that with the attitude of the Australasian Council of Trade Unions, which called on members of the Federal Labour party to resist the balancing of tlie budget, and to support the abolition of the Loan Council. We may well ask ourselves who is to guide the destinies of Australia - the Australasian Council of Trade Unions or the Premiers and Parliament of the country.
It is to be regretted that the Government did not take- the Opposition into its confidence long ago, when a budget might have been passed through the House in five minutes. If we are to achieve anything, we must abandon this bickering, party warfare, which, like a malignant cancer, has been destroying the body politic. Persons of all shades of political opinion must unite in a common effort to carry out a policy having for its object the restoration of national credit, stabilization of industry, increased production on a competitive basis, and the provision of work for our unemployed. Unfortunately, the Labour party in Australia is to-day controlled by a section which is determined to use the present depression to further its own purpose, namely, the destruction of the social system under which we live. This section is particularly strong in New South Wales, and the New South Wales members of the Federal Labour party are largely under its dominance, although some of the Labour members from other States are, I. am glad to see, prepared to stand up against them. The party controlled by this section passed a resolution that £2(5,000,000 must be found immediately by the Commonwealth Bank, and that demand has been voiced by honorable members in this House. They do not know how the £20,000,000 is to be found, nor does the Australasian Council of Trade Unions ; but they make the demand none the less. It has been avowed by the leaders of the Australasian Council of Trade Unions that the social system under which we live must crumble. Their object is the destruction of that system, the total destruction of the capitalistic system upon which society is organized to-day. On the 3rd March, 1923, the .late M. Lenin advised the Australian supporters of his doctrine as follows : -
The Australian communistic party must now concentrate all its energies on winning a decisive majority in trades unionism.
It is obvious that they have succeeded in that object. He continued -
They have clone that, too, and the minority now controls the great body of trade unionists. The Australasian Council of Trade Unions, in the course of it,3 recommendations, as published in September. 1930, advocated the following :-
It has been declared that there is to be no peace until the workers own and control the fields, factories, and workshops. For what purpose . is the Federal Government to establish control of the whole of the resources of the Commonwealth, such as wheat, wool, dairy products, and mineral products, unless it be to realize the communistic idea of the abolition of private control, reducing the producers of Australia to the level of the serfs of Russia to-day? According to Mr. Jock Garden, all commodities are to be grown for the State. In the Glebe Town Hall on the 10th October last, after declaring that Mr. Lang had stood the acid test, Mr. Jock Garden was reported to have said -
As long as there was production for profit and not for use, there would always be an unemployment army. He com mended the Soviet Government in Russia.
Our primary producers are to be expected to suffer isolation, and deprive themselves of the comforts that civilization has provided for city dwellers, simply to work their farms for use, and not for profit. The resolutions of the Australasian Council of Trade Unions’ Conference continue -
The delegates here of those who passed this resolution have during the course of this debate advocated it adoption. The suggestion has not arisen in their own minds, but has been pressed upon them by an organzation which controls them. [ Quorum formed.] The resolutions of the Australasian Council of Trade Unions’ Conference continue -
That is this organization’s direction to a government which ought to be giving its time to finding means for providing work forunfortunate men ‘ who are unemployed, or to improving industrial conditions so that it may be possible for factories to continue operating. The next resolution of the conference is -
What a request to make when hundreds of thousands are not. receiving any wage ! Labour Ministers claim that Sir Otto Niemeyer attempted to interfere with- the standard of living in Australia. What is that standard ? We do not see much of it in country districts. What may be said to be the standard of living of the man who is not in employment? Our efforts should be concentrated on an endeavour to provide employment for our citizens, and particularly openings for young lads, instead of seeking to improve the position of those who are already in good jobs. City industrialists may boast of a good standard of living; but the figures show that, there are to-day at least. 20 per cent, of them whose standard is poverty. There is not one recommendation from the Australasian Council . of Trade Unions to the Commonwealth Government urging it to do something to improve the position of those who are in want. Its attention is solely directed to the improvement of the position of those who are on top, those who have the big voting power. The voting strength of Labour may be increased in this chamber, but the ultimate aim of the extreme Australasian Council of Trade Unions heads is’ revolution by widespread poverty, and ultimately chaos and destruction, an unfortunate condition of affairs we have no desire -to see in Australia,. I have here another little gem from the recommendations of this conference. It was also decided -
That in the event of the Federal Government failing to recognize a crisis - not among the unfortunate people who have not a 40-hour week or the basic wage, but among those who have them - and to take the necessary action on the lines suggested by this conference, representing organized workers of Australia, the emergency committee shall be empowered to call togetherall unions to take action to demonstate that a crisis exists.
There is the suggestion of a hope of revolution, when they will march in a body to convince the Federal Government that a state of crisis exists. Those in control of the unions, are in the minority, and do not represent the true spirit of the Australian workers; but they dictate to the Federal Government. Honorable members opposite have introduced into this debate principles that are foreign to Australian ideals. The Acting
Prime Minister (Mr. Penton) was asked, among other things, whether the Government proposed to remove any of the Arbitration Court judges, one in particular. Of course, the Minister could not answer that. The next question was, “Why has not the Government raised £20,000,000 as decided on by Federal Labour Conference?” Again, the Acting Prime Minister said that lie could not answer the question. He could only say that the Government has clone its best. Another question submitted was, “Will the Government continue its policy of balancing the budget at the expense of the workers?” To that the Deputy Leader of the Government” replied, “ The Government cannot control State Governments regarding their budgets. Divided control of State budgets has to continue “. I point out that that was hardly an answer to the question. I have been quoting from the Sydney Evening News, of the 19th September last.
Now let me turn to Queensland. The Brisbane Trades and Labour Council recently held a conference, and my authority for the resolutions that I am about to quote is the Labour journal in Brisbane. I invite honorable members to contrast the views of Labour men in Queensland with those of the foreign ambassadors who control the destinies of the party in New South Wales. The first resolution to which I invite the attention of honorable members was as follows : -
That this council is of the opinion that the measures adopted by the Commonwealth Government to meet Australia’s present financial situation are not in the best interests of Australia. The very high import tariffs mid the sales tux will tend to increase thi- cost of living and harass business generally.
Another resolution, was this -
Wages should be maintained at :i high level until interest on the public debt is substantially reduced, and to effect this steps should bc immediately taken to establish one arbitration authority for all Australia.
It was on that issue that the Bruce-Page Government was defeated at the last federal election. Another proposal was that we should have a million migrants per annum from Great Britain.
– What newspaper is the honorable member now quoting from?
– The Brisbane Daily Mail, of the 20th September, containing a reprint of the report of the official Labour organ.
One unfortunate action of the present Government was the imposition of duties that are having the effect of driving valuable business away from Australia. Belgium formerly took 6.45 per cent, of our total exports, while only .6 per cent, of our imports came from that country. Belgium has retaliated by taking action to reduce its consumption of Australian products. -France, which was taking 10-J per cent, of our total exports, with 2.6 per cent, “of our imports coming from France, has similarly retaliated, because of the effect of the Australian tariff on French trade. The Netherlands Government has decided to take similar action. No less than 98 per cent, of the flour shipped to Java formerly came from Australia, and 100 per cent, of the butter used in Java was sent from this country; but that trade is now threatened. It is most unfortunate that the Government did not fully consider the probable effect of the new duties on primary exports before imposing them. My first suggestion is that we should grapple with, and then improve, the unfortunate position of Australia, apart altogether from party politics. Our financial difficulties should be discussed either by the whole of the members sitting in conference, or by a representative section. We should out-vote the delegates of the Australasian Council of Trade Unions, and those who want to bring about the destruction of Australia simply because they do not like the capitalistic system. If we are satisfied with that system, the majority of members in this Parliament should do the right thing in the interests of Australia, its people, and its industry. We should develop our industries, and do something for the primary producers who have to export. But before we can do that, we must brush aside the influences that are seeking to drag the Government from the path to prosperity so as to bring about revolution and appalling conditions throughout Australia.
My second suggestion is to enter into commercial agreements with countries that are prepared to trade with us in any particular commodity. There is 1:10 need to enter into any general commercial agreement, or to send our trade commissioners to other countries seeking better markets. We should endeavour to sell our wheat to countries that are producing something that we require. For instance, we could sell our sugar to Canada, and obtain motor cars in exchange. We could send our butter, meat, and wool to countries that requirethem, and take other products in exchange. By entering into business agreements, apart altogether from political influences and glaring propaganda in newspapers, we would be able to relieve ourselves of our exportable surplus, to the ultimate benefit of the producer, industry, and employment generally. That could be done at once, without wasting time attending imperial conferences from which no good can result. What did we seek at the Imperial Conference? At one time the Baldwin Government was about to give preference to the dominions, but the first Ramsay MacDonald Government took office and vetoed the arrangements. When Mr. Baldwin again returned to office, preference was given to the dominions, but when the Labour Government once more took office it threatened to abolish dominions preference. Eventually, it decided to continue the existing preference, a concession that we could have obtained by cable. The Imperial Conference has been a waste of time; our delegates could have been in other parts of the world making agreements, and selling our surplus products in exchange for goods that we require. Instead of that, we are continuing an adverse trade with America. During the last ten years, we have sent to that country £230,000,000 in gold as an. offset to the few products that.we send there. We have not harassed America . in the slightest degree. We have harassed Great Britain, and, unfortunately, there are some people in this country who would further harass that country, although it and the colonies are taking more than half of our exports. The British trade unions have passed a most significant resolution. It is an ‘indication of the trend that has taken place in Great Britain towards empire trade. Two great organizations,the Trade Unions Congress and the Federation of British
Industries - representing both labour and capital - sent a joint memorandum to the British Prime Minister, strongly urging that the most important task of the Imperial Conference, which was shortly to be held, should be the formulation of a constructive trade policy for the British Commonwealth of Nations. But the Labour Government of Great Britain has fallen down on its job. It has ignored the claims, not only of its supporters, but also of the dominions. On the other hand we find that Russia is actually flooding Great Britain with wheat. The British Labour Government is actually allowing wheat grown by the slaves of the Soviet to be dumped into the country. There is no standard of living in Russia. The peasants are compelled to grow wheat, and to contribute their quota for export. In many cases the imposition of that quota has caused rioting, and the death of producers who opposed the Soviet, and endeavoured to keep their wheat for their own use.
– That is what the Australian wheat-grower is up against.
– Yes, the market should be ours. The British Labour Government, under agreement with Russia, is buying wheat grown by slave labour, from a country that has repudiated its debt to Great Britain, while we have to sell our products to make it possible for us to pay our debts abroad. We, as Australians, are determined to honour our obligations, but our position is- made very difficult when we have not even the support and sympathy of the British Government, our greatest creditor. That, Government is assisting the Soviet to the detriment of Australian and Canadian growers, who are producing wheat under white men’s conditions in a civilized and Christian community. The action of the British Labour Government is scandalous, and I urge honorable members to disregard party considerations, so that we may take action to enter into commercial agreements with- countries who are willing to buy our surplus products. Why waste time after preparing a budget, submitting, it to caucus, amending and reprinting it, and communicating it to the Prime Minister abroad, in debating as to whether we should balance budgets or adopt a policy of inflation ?
– -That is finished.
– I sincerely hope so; but if not, I trust that honorable members who advocate inflation will themselves bc finished ere long. We should concern ourselves with entering into treaties or arrangements with countries that are prepared to trade with us. I find that the primary producers of Australia are responsible for 95.71 per cent, of our total exports. On the other hand, the industrialists in the large cities, who nave a high standard of living, and for whom the Australasian Council of Trade Unions is now seeking a 40-hour week and a 25 per cent, increase in the basic wage, are responsible for only 4.29 per cent, of our total exports. The figures are as follows : -
in view of those figures it is only right r h:, t we should consider the interests of the primary producers, because it. is on the export of our surplus products that our future depends. This export, can best be controlled by organized producers themselves. We have had to depend on them in the past. In the present state of emergency the Government should act, not upon the resolutions I have read, but in the interests of those, who are. the backbone of this community, and who are being called upon by Mr. Jock Garden and his associates to produce, not for profit, but for use. It is time that we realized that certain foreign elements are pushing their policy down the throats of the representatives of the people. Honorable members on this side are looking, not for Cabinet positions, but for government to the best advantage of the people. We are prepared to support a reasonable policy, and when the Government brings down such a policy it will have our backing to a man.
A great deal has been said with regard to standards of living. What do many of our people care about considerations of that sort? Not so long ago there was a most disgraceful coal. strike in Newcastle. Were the miners fighting to maintain the standard of living when they refused to forgo ls. a ton out of a total reduction of 5s. a ton, to make possible the export of that commodity? Let us consider the conditions that they permitted to exist in their desire to obtain a better standard of living. A circular entitled, “ Australian coal-miners’ lockout,” issued from the South Maitland fields to all unionists, contains the following appeal : -
Financial assistance urgently needed. Women and children on verge of starvation. Thousands destitute of clothing.
That is the’ condition to which they brought their women and children in a desperate endeavour to give effect to the revolutionary idea that the coal industry must be killed.- The circular goes on to say -
Many children unable to attend school owing to their parents’ inability to provide sufficient clothes to cover their nakedness. Malnutrition rampant, and, as a natural sequence, sickness intensifying.
There are other statements that I shall not read in a mixed gathering, because of the sadness and hopelessness of the position that they describe. The miners preferred these conditions to a return to work on the only terms that Australia could offer them. Although those responsible for it may claim to have won the strike, the mines are not working to-day.
– The miners are starving, and yet the late John Brown left an estate worth more than £1,000,000.
– We were told that if the Labour party Were returned to power it would prosecute the late Mr. John Brown; but that prosecution was never launched.
Another demand of the Australasian Council of Trade Unions is that -the Loan Council be abolished. The act under which that council was constituted is the finest piece of legislation that has been passed since the-, inauguration of federation. It is admitted by every country, as well as by every reasonable section of our own community, that it was a good thing to stabilize our loan position and to establish a sinking fund- that would wipe out our indebtedness in 58 years.
To-day, we Iia ve an illustration of the value of the Loan Council : the sum of £2,000,000 that it has saved is being made available to wipe off forever interest on the maturing loan that is being advertised at the present time. We axe, under the agreement, building up at the rate of £10,000,000 a year, financial resources that will enable us to discharge our indebtedness from time to time. Every country agrees that that is a sound and a sane policy. It was agreed upon by every State Parliament in Australia, including those controlled by Labour governments in Queensland, Victoria and Western Australia, and was ratified by the whole of the people of Australia at a referendum. Mr. Lang knows that he has no more chance of escaping from his obligations under it than has Western Australia of seceding from the federation.
– How would the honorable member balance the budget?
– I would call in some person who was not dictated to by outside influences that desired anything but a balancing of the budget. I would find work by dispensing with the party wrangling that now goes on, and by disregarding the directions of the Australasian Council of Trade Unions, which is talcing advantage of the present opportunity to attempt to wreck Australia. Its idea is to discharge the employees of the Commonwealth Bank, and to engage workmen to run note-printing machines, so that they and their pals may have a good time. It is a wonderful proposition from their point of view, but the man who has a home, or the primary producer who has a farm, would quickly find that his security was considerably depreciated. The idea, of course, is that inflation would go some way towards giving effect to their policy that “ There shall be no peace until the worker holds and controls fields, factories and workshops.” This is one of the methods by which they propose to destroy capitalism and create the barbarous system which they wish us to live under.
– Does the honorable member suggest that, :his speech is free from party spirit?
– The utterances I have made are on a subject which is above party.
This afternoon the honorable member for Corangamite (Mr. Crouch) referred to the expenditure incurred by the previous Administration on public works, many of which, he said, were of an unproductive character. I do not think the honorable member intentionally misrepresented the position; but the information which he supplied to the House was inaccurate. The honorable member said that”’ from 1923-4 to 1928-9, it was claimed that a sum of £31,000,000 hod been spent on country works which he enumerated, but, be added that, to make up the amount, naval and similar expenditure had to be included. That is not correct. The amount included an expenditure of £1,250,000 on the Murray waters scheme and £3,720,000 for commencing the unification of the railway gauges of Australia by the construction of a line from Kyogle to Brisbane. It should be unnecessary for me to mention that that railway was only recently opened for through traffic, and, although the work could not be immediately productive, the whole amount spent has been showing a return of 4 per cent, on capital outlay, and the line will eventually show a higher return. A sum of £810,000 spent on wire-netting was borrowed by the Commonwealth at 5 per cent. ; but a rebate of 2 per cent, was allowed to the purchaser, so that it was actually secured by producers at . 3 per cent. In connexion with health laboratories, on which £50,000 was expended, valuable work was conducted in various country districts with respect to the hookworm disease. On the Kalgoorlie to Port Augusta railway £375,000 was spent, and on country buildings for the Postal Department £1,070,000. During the seven years the Bruce-Page Government was in office £11,400,000 was expended on country telephones, which amount was larger than had been spent on similar work since the inception of federation. On migration works £920,000 was expended, and on roads £7,750,000. The share of this money which went to New South Wales was spent principally on coastal roads. In Queensland, the country roads are not cement, concrete, or bitumen, but of good gravel. and have been constructed to enable the primary producers to get their produce to market. Thus they are reproductive.
– Where did the honorable member obtain that information?
– From the newspapers which published our claim. The information supplied by the honorable member for Corangamite was inaccurate. Further, a sum of £80,000 was spent on bridges and bores, £30,000 in Northern Australia and £50,000 as a loan to Papua. A sum of £111,000 was also spent on lighthouses at points distant from the capital cities. In. addition, and not included in the claim £7,400,000 was spent on fleet construction, £1,500,000 on defence equipment, £4,000,000 on war service homes, and £400,000 subscription to Amalgamated Wireless, which also benefited the country. Although the lastmentioned amounts are not included in the £31,000,000 which it is claimed was spent to benefit, country districts, the honorable member for Corangamite included them as though they made up the total.
I sincerely trust that action will -be taken before Parliament adjourns, or immediately the Prime Minister returns, to carry out the business for which Parliament was elected. We should let the people of Australia, see that we realize the seriousness of the position, and are prepared to do our best to improve the existing trade conditions, and to provide em ploy ment for those who are unfortunately out of work. An effort should be made to provide profitable employment for those workless young men who are now approaching ma.nhood. It is the responsibility of this Government to see that the men, women, and- children of Australia are not deprived of their rights by those in control of the Australasian Council of Trade Unions, whose policy can only bring the people to such a state of poverty and destitution that the revolution which they so much desire will be brought about.
– At. the conclusion of a very long debate, I regret having to inflict my views upon honorable members; but the issues are so important that, in common with other honorable members who have spoken, I do not wish to record a silent vote. The state of our finances, the parlous position of commerce, and of the primary producers, and the tragedy of unemployment are, in themselves, of sufficient importance to justify a debate of firstclass importance. The honorable member for Wide Bay (Mr. Corser) said that the issues involved were above party, and I think that honorable members opposite were justified in asking if his speech was being delivered in that spirit. Still, the honorable member will have my cordial support in his plea for a consideration of this subject in the manner he suggested. Undoubtedly, the condition of business generally, and the position of the primary producers particularly, to which, the honorable member so eloquently referred, is so serious that it is the responsibility of every honorable member to consider the subject in a nonparty spirit. Australia has been, caught in a vortex of world-wide depression. The roots of the problems which we are discussing go down very deeply. It is essential to discuss these issues in the manner suggested ; because this depression has not beencaused by any party in this House. No party couldhave avoided the troubles which are now facing Australia, for they are the result of world-wide causes and effects. In analysing the position with a view to finding a way out of our difficulties, we should try to discover the real cause of the present world-wide depression. The right honorable member for North Sydney (Mr. Hughes), in an eloquent speech, referred to the paradox of a world over-supplied with goods and its population suffering tragically from unemployment and under-consumption. There is undoubtedly room for an investigation into the cause of this anomaly. Honorable members have advanced many reasons why we are in our present situation. It has been said that our troubles are due to the debts created through the war, and suggestions have been made for the cancellation of all war debts. It has also been said frequently in this debate that our troubles are due largely to what virtually amounts to a cornering of the world’s gold supply by certain nations, notably the United States of America and France, and to a lesser degree, the Argentine. This cornering of the gold supply, it has been argued, has caused a contraction in the currency of those nations which have adopted the gold standard. I hold entirely different views. I believe that our difficulties have been caused by the accumulation of wealth in the form of goods - the oversupply of wheat, wool, meat, butter, rubber, cotton, and other requirements of mankind. Our inability to sell our own goods is largely due to the world-wide policy of trade restriction and the building up of tariffs. This policy has spread like a disease from one nation to another. The building up of these tariff barriers has rendered it impossible for the different countries to exchange their commodities on a reasonable basis. This, in my opinion, is one of the main causes of our troubles.
The League of Nations Journal, published in 1927, contains a fine report of the proceedings of the Economic Committee of the League, which includes the following resolution: -
This conference declares that the time has come to put ari end to the increase in tariffs and to move in the opposite direction.
Unfortunately, since the passing of that motion, the making of tariffs and the imposing of embargoes, as between nation and nation and country and country, has gone on to a greater extent than ever before in the world’s history. Commerce, par excellence, is a matter of international concern. Ever since I have been a member of this Parliament, I have consistently pointed out, from my place in this chamber, the foolishness of our fiscal policy, by which we have endeavoured to create a Utopia here, and to persuade ourselves that we can dissociate ourselves almost entirely from world commerce and policy. It seems to me, as one who has travelled in other parts of the world, and lived for a time, at least, in other countries, that our geographical position has given us an isolated outlook. We are a white nation living in an out-of-the-way corner of the world, with no other white nation as our neighbour, except New Zealand. We cannot rub shoulders with the citizens of other countries. As a member of the crew of ft British sailing shy D, as I went up the Scheldt river years ago, I was told that the country on one bank was Holland, and that on the other Belgium. These two countries have different ideals, a different currency and a different language; yet it is possible to row across the river from one country to the other in a very little while. In these days of air transport, it is possible to leave the Croydon aerodrome in Great Britain and visit any one of three or four different countries within an hour or two. This enables a resident of Great Britain easily to get the point of view of the other fellow, and it gives the people a more cosmopolitan and balanced outlook on world questions generally. In Australia, we have no one to wrangle with but ourselves’, and have proceeded with great enthusiasm to do so. Our isolation has caused the development of a spurious form of patriotism, and we have, unfortunately, a warped and selfcentred national outlook, which is exemplified particularly in our tariff policy. Put into plain English, we have adopted a trade policy which means, in effect, that while our buying of goods from the other fellow is condemned, his buying of goods from us is applauded.
– Australia is not the only country that has adopted that policy.
– That is unfortunately too true. It is this spurious patriotism which has caused most countries to attempt to confine their trade and commerce within their own borders. Trade is not the flowing of commodities in one direction only, and sooner or later we, in common with other countries of the world, will be forced to recognize this economic fact. We, in Australia, do not consider it desirable to buy either the raw materials or the manufactured goods of other countries, though we set out with the greatest . of enthusiasm to get other countries to buy our goods from us. We do not want to take their goods, but we reach out with both hands to take their money. We have borrowed all that we could, and have set up a standard of living which is higher than that obtaining in the countries from which we have borrowed money. Can the debtor maintain a higher rate of living than his creditor?
– It frequently happens among individuals.
– Exactly, but it does not last very long. And it has not lasted very long with us as a nation. The end was bound to come. Some of the most ardent advocates of borrowing have readied the stage when they declare that therules of the game are all wrong.Now that they can borrow no more, and it becomes necessary to repay our debts and interest, they set to work with a microscope to find flaws in the system. Various suggestions have been made to cope with the problem. It is a very humiliating position for Australia to be in. From time to time I have raised my voice against our borrowing policy overseas, and foretold that its inevitable conclusion was’ disaster. However, I do not wish to quote past speeches, or to say, “ I told you so.”
The collapse of world prices is largely due to the collapse of world trade, because countries have erected tariff barriers one against the other. The honorable member, forWide Bay (Mr. Corser) referred to the position of ourprimary producers as a result of that policy. He intimated that 95.71 per cent, of our trade in Australia originates from our primary industries. Notwithstanding the importance of those industries to the nation, the Government has pursued a tariff policy which adversely affects the production costs of the primary producer, and makes it difficult for him to compete in the markets of the world. That policy has brought about trade reprisals, in the form- of dumping duties and embargoes, which have militated against the marketing of our primary products. Italy has raised its customs duties against Australian products, and the press recently stated that that country purchased . 50,000,000 bushels from the United States of America on long terms. France has issued suggestions to her colonies which., virtually, mean the boycotting of Australian goods. All that is the result of our tariff policy. It is our primary, and not our secondary, industries that suffer. We are practically shut out from the various markets of the world, and compelled to force our exportable products into Great Britain. I, and others, have claimed that our tariff policy has assisted greatly to bring about the existing depression. Thecounter argument is that that is not so, as the depression has affected all countries alike, be they f reetrade or protected.
Other nations have taken advantage of Great Britain’s freetrade policy to dump their goods there, and destroyed our market overseas. That is where our miscalled policy of preference has landed us. Ostensibly, we give preference to British products; actually we have raised a high tariff wall against the Mother Country, stuck on a few more bricks against the other nations, and called that giving preference to Great Britain. Even while our Prime Minister (Mr. Scullin) is overseas seeking the favour of that country in the form of a preferential treatment to our primary products, the right honorable gentleman’s Government is introducing tariff schedules and embargoes that are adversely affecting British trade with the Commonwealth. It is clear to me, as I feel sure it must - be clear to any student of the subject, that the policy of trade restriction has really destroyed Great Britain’s overseas, market, and diminished her purchasing power. Being one of the few free markets of the world, she has been subjected to the dumping of the accumulated surpluses of other nations. ThereRussia has dumped her wheat, Argentine her meat, and Denmark her butter, at slump prices. Because of her 2,500,000 unemployed and her reduced purchasing power, Great Britain is unable to absorb the huge quantity of products that pour into her markets. I ask leave to continue my remarks.
Leave granted; debate adjourned.
House adjourned at 11.30 p.m.
Cite as: Australia, House of Representatives, Debates, 20 November 1930, viewed 22 October 2017, <http://historichansard.net/hofreps/1930/19301120_reps_12_127/>.