House of Representatives
3 December 1930

12th Parliament · 1st Session



Mr. Speaker (Hon. Norman Makin) took the chair at 3 p.m., and offered prayers.

page 894

QUESTION

CANBERRA ART UNION

Mr GUY:
BASS, TASMANIA

– I ask the Minister for

Home Affairs whether an application has been made by the Unemployment Relief Committee of Canberra for the holding of an art union ? If so, what decision has the Government arrivedat?

Mr BLAKELEY:
DARLING, NEW SOUTH WALES

– Such an application was received, and after full consideration, the Government decided not to grant it.

page 895

THE GOVERNOR-GENERAL

Appointment of Sir Isaac Isaacs

Mr FENTON:
Acting Prime Minister · Maribyrnong · ALP

by leave - I have to announce for the information of honorable members that I have this day received from the Eight Honorable the Prime Minister (Mr. Scullin) a cablegram intimating that His Majesty the King has been pleased to appoint the Eight Honorable Sir Isaac Alfred Isaacs, K.C.M.G., Chief Justice of the High Court of Australia, as Governor-General of the Commonwealth, in succession to His Excellency, Lord Stonehaven. As the commission appointing Sir Isaac Isaacs has not yet arrived from His Majesty the King, I am not able at present to indicate definitely the date on which he will assume office, but I anticipate that it will be about the middle of next month.

page 895

QUESTION

COMMONWEALTH. STATISTICIAN

Mr MACKAY:
LILLEY, QUEENSLAND

– Is the Acting Prime Minister aware that the Commonwealth Statistician, Mr. “Wickens, has been engaging in a controversy with a member of this Parliament in the columns of the Sydney Morning Herald on the subject of currency inflation? If so, is he doing so with the knowledge and consent of the Government?

Mr FENTON:
ALP

– In order to expedite business I ask honorable members to give notice of all questions that are not urgent.

page 895

QUESTION

TOBACCO INDUSTRY

Mr JONES:
INDI, VICTORIA

– Is the Acting Minister for Markets and Transport aware that in consequence of the recent increase of 2s. per lb. in the excise duty on all tobacco manufactured in Australia, both from imported and locally-grown leaf, the price of Australian tobacco has been increased by 2s. per lb.? Has the Government considered the representations by members of the Select Committee on the tobacco-growing industry and other members, urging the removal of the increased excise duty, and the raising of any additional revenue required by an increased import duty, thereby protecting the Australian tobacco-growing industry, and ensuring to smokers the local product at the cheaper prices that previously obtained?

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

– Those representations are under consideration by the Government, and I hope to announce a decision at an early date.

page 895

QUESTION

COMMONWEALTH BANK

Conference Between Government and Board

Mr LATHAM:
KOOYONG, VICTORIA

– Is the Acting Prime Minister able to make an announcement to Parliament regarding the conference held this week between Commonwealth Ministers and the Board of Directors of the Commonwealth Bank?

Mr FENTON:
ALP

– Not yet.

page 895

QUESTION

OIL FUEL FOR NAVAL PURPOSES

Mr PATERSON:
GIPPSLAND, VICTORIA

– Has the Minister for Defence yet received a report from Rear- Admiral Sydenham as to the suitability for naval purposes of oil obtained at Lakes Entrance? If so, will he make the report available to honorable members ?

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– I have not yet received such a report. When I do, I shall consider the advisability of giving publicity to it.

page 895

QUESTION

WHEAT INDUSTEY

Mr GABB:
ANGAS, SOUTH AUSTRALIA

– I have received the following telegram from Mindarie, South Australia : -

Large meeting farmers here resolved unable to sow crop next year unless three shillings bushel forthcoming. Proposed pay no taxes till assistance covers cost of production.

If the Acting Prime Minister cannot make a general statement as to the result of the conference between Ministers and the Commonwealth Bank Directors, will he say whether the giving of financial assistance to the wheat-growers was discussed at that gathering, and whether he can give to them any message of hope ?

Mr FENTON:
ALP

– That matter was seriously discussed, but I am unable to make any further announcement at this stage.

Mr GREGORY:
SWAN, WESTERN AUSTRALIA

– The following is a telegram received from the Primary Producers of Western Australia : -

At massed meeting farmers held Perth yesterday under auspices of primary producers association following resolution carried that this conference views with alarm serious position of wheat-growers partly due to abnormal fall in world’s prices which threatens very existence of industry and whilst bonuses to other industries and high tariff pertains demands Federal Government pay bonus equivalent to four shillings per bushel at sidings on all wheat marketed for nineteen thirty thirty one season thereby enabling farmers to carry on their occupations. Farmers this State faced with absolute ruination their financial position result depressed prices precarious. Great unrest prevails industry as State entirely dependent onprimary production mainly wool and wheat. Imperative obtain some relief. Please use every effort and influence in giving effect to resolution.

Has the Acting Prime Minister received that: resolution, and is he aware that in many instances the farmers are refusing to cart their grain to the siding? Also, can he give an answer to the deputation which waited on him on Friday, asking that relief in some shape or form should be given to the wheat-growers?

Mr FENTON:

– Every one admits that the position is serious indeed. The Government is doing everything within its power to obtain relief for the primary producers, particularly the wheat producers. We are doing our best for them.

Mr PROWSE:
FORREST, WESTERN AUSTRALIA

-Is it the intention of the Government to do anything to assist the wheat-growers of Australia? They are anxious to have some definite information on that point.

Mr FENTON:

– I have already given replies to similar questions, and I cannot supply any further information.

page 896

QUESTION

SYDNEY MEAT DISPUTE

Mr THOMPSON:
NEW ENGLAND, NEW SOUTH WALES

– Has the Assistant Minister for Industry carried out his announced intention to confer with the parties to the meat dispute in Sydney? If so, can he announce the result of the conference, and state whether there is any prospect of an immediate settlement of the trouble?

Mr BEASLEY:
Assistant Minister assisting the Minister for Industry · WEST SYDNEY, NEW SOUTH WALES · ALP

– The honorable member might use his influence with the employers

Mr Latham:

– What about answering the question?

Mr BEASLEY:

– You mind your own business !

Mr Latham:

– More evasion!

Mr BEASLEY:

– Mind your own business ! There is too much interference by the Leader of the Opposition. I shall answer the question as I think fit.

Mr SPEAKER:

– Order ! I ask the Leader of the Opposition not to interject. The Assistant Minister is entitled to answer the question in his own way.

Mr BEASLEY:

– If the honorable member would use his influence with the employers to persuade them to obey the law and the decisions of the industrial tribunal, I am satisfied that a speedy and satisfactory settlement would be arrived at.

Mr LATHAM:

– I ask the Minister whether the employers have broken any, and if so what, provision of the law, and whether it is not an admitted fact that the men struck in order to obtain something more than the award of the industrial tribunal allowed to them?

Mr BEASLEY:

– It is an established fact that the matter was referred to a properly constituted authority in New South Wales. That authority gave its decision, and I am hopeful that the Government of New South Wales will see that the decision is honoured.

Mr THOMPSON:

– In view of the fact that about a week ago a statement appeared in the Sydney press to the effect that the Assistant Minister for Industry intended to hold a conference of the parties to the Sydney meat dispute, will the Assistant Minister inform me whether the conference has been held and, if so, what occurred at it?

Mr BEASLEY:

– Atthe first meeting of the House after the publication of the statement to which the honorable member has referred, I stated that the conference had taken place. I am hopeful that the Government of New South Wales will take steps to deal with the situation with a view to obliging the employers to honour the decision that was arrived at by the Industrial Commission.

page 896

QUESTION

EXCHANGE POSITION

Mr HAWKER:
WAKEFIELD, SOUTH AUSTRALIA

– The following state ment relating to the pegging of exchange is taken from remarks of the chairman of the Bank of New South Wales, published in Saturday’s press: -

The rationing of customers, by which of late banks have sought to restrain the purchase of sterling, has been due to a reluctance to raise the rate at which the Commonwealth Bank buys the London money needed to pay the overseas interest and other national charges. In this they have responded to the lead of the Commonwealth Bank and have honoured the exchange agreement.

Have any representations been made by the Government to the banks, asking them to so peg the exchange, and can the Minister inform the House whether the Acting Minister for Markets has handed to him protests from the Wheat-growers Association and other associations of primary producers against the penalty which the pegging of exchange imposes upon the export industry?

Mr LYONS:
Minister for Works and Railways · WILMOT, TASMANIA · ALP

– No representations have been made to the banks, asking that the exchange shall be pegged.

page 897

QUESTION

RATIONING OF EMPLOYMENT

Mr WHITE:
BALACLAVA, VICTORIA

– It is reported in this morning’s press that Mr. Hogan, the Labour Premier of Victoria, criticized a deputation of locomotive engine men, which waited upon him, for failing to accept some form of rationing, because that would have saved many employees from dismissal. Mr. Hogan said that it would not be reasonable for some men to be dismissed while others were working full time. In view of that statement, is the Postmaster-General now in a position to absorb some . 1,400 returned soldiers who have lately been dismissed from the postal service?

Mr LYONS:
ALP

– When the honorable member and other honorable members raised this question previously, I pointed out the difficulties in the way of granting their request, but said that I would look into the matter, and see whether it was possible to carry out the suggestions that had been made; I now find that it is utterly impossible under the law, as it stands, to ration work between permanent and temporary employees. We did in many instances in the post office ration the work of temporary employees. Bather than dismiss some men, we kept all employed as long as possible ; but when the point is reached at which there are excess officers in the permanent service, we can not continue to employ temporary hands either partially or fully to do work which could be performed by the excess permanent men.

Mr White:

– The Public Service Act could be amended.

Mr LYONS:

– Yes.

Mr White:

– Why not propose that ?

Mr LYONS:

– An appeal has been made on behalf of the last handful of temporary men who have been dismissed. If we rationed the work between that handful of men and permanent officers, it would be only fair to re-employ the others who have been dismissed, and to ration them with the rest of the public servants. It would, however, be impossible to do that. If some scheme could be carried out to help those men I should be the first to give it effect, but there is no practical way of surmounting the obstacles which prevent it.

Mr White:

– I would support the amendment of the act.

Mr LYONS:

– It is not practicable at present to do what is desired.

page 897

QUESTION

SALES TAX

Mr ARCHDALE PARKHILL:
WARRINGAH, NEW SOUTH WALES

– Is it proposed to amend the sales tax this session ?

Mr LYONS:
ALP

– I have already answered that question on two occasions. There are certain technical or legal difficulties to be removed, and that is why notices of amendment have been given by the introduction of various bills. These are matters of minor adjustment.

Mr Archdale Parkhill:

– Is it proposed to raise new taxation ?

Mr LYONS:

– No. There will be no increase or review of the tax until the Treasurer, who introduced the legislation which imposes it, returns from England. In the meantime, consideration will be given to any suggestions regarding the operation of the sales tax itself.

Mr Archdale Parkhill:

– In the direction of a decrease?

Mr LYONS:

– In the direction of reconsideration.

page 897

QUESTION

AVOCA POSTAL SERVICE

Mr CROUCH:
CORANGAMITE, VICTORIA

– Has the Minister re ceived a letter from the Shire Secretary of Avoca, of which town he is a native, asking that the AvocaRathscarWestNatte Yallock postal service be restored?

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– I shall get in touch with the Acting Prime Minister, so that the necessary representations may be made to the Postmaster-General on the subject.

page 898

QUESTION

CANBERRA ART UNION

Formal Motion fob Adjournment.

Mr SPEAKER (Hon Norman Makin:
HINDMARSH, SOUTH AUSTRALIA

– I have received an intimation from the honorable member for Henty (Mr. Gullett) that he desires to move the adjournment of the House to discuss a definite matter of urgent public importance, namely “ The action of the Government in permitting a lottery to be held at, and controlled from, Canberra for the purpose of raising money for Government uses “.

Five honorable members having risen in their places,

Question proposed.

Mr GULLETT:
Henty

– I based the notice of my intention to move the adjournment of the House upon a statement which, I believe, was handed to the press a few days ago by the Minister for Home Affairs (Mr. Blakeley), and widely published throughout Australia - these are the actual words used by the Minister -

That the Government had given approval to certain representative bodies to conduct an art union for the express purpose of providing funds for the relief of unemployment in the Federal Capital Territory.

That announcement clearly showed that the Government had decided to give its sanction to the holding of an art union, or national lottery, or series of lotteries, at, and controlled from Canberra, in aid of the public funds. It is true that the Minister has to-day stated that the Government has abandoned this intention; but this extraordinary change of front makes the whole action of the Government only more regrettable and culpable. The Government cannot be permitted by this panicky reversal of its decision, and this abandonment of the Minister for Home Affairs, to conceal from the people the disreputable nature of the undertaking upon which it had intended to embark.

Mr SPEAKER:

– Order ! It is quite unparliamentary for the honorable gentleman to refer to any action or con templated action of the Government as disreputable. I ask him to withdraw the expression.

Mr GULLETT:

– I withdraw it. This extraordinary vacillation of the Government should not be allowed to conceal from the people the fact that ‘it had intended to embark upon an undertaking entirely inconsistent with the best traditions of the Administration of this country. This reversed decision would have been bad enough had it stood alone; but, unhappily, it is only one of a number of remarkable proposals which show that the Government is quite bankrupt of sound ideas, and quite dead to any sense of shame in regard to national finance. Some of these matters merit our attention. I shall refer, first, to the disgraceful financial proposals agreed to by the caucus of the Parliamentary Labour party, with the object of suspending the redemption and conversion of the loan which will mature this year.

Mr Blakeley:

– What has this to do with the matter before the Chair?

Mr SPEAKER:

– I see nothing in the notice submitted to me by the honorable member for Henty referring to that matter.

Mr GULLETT:

– On a point of order, I submit that, as my motion deals with a proposal of the Government for the raising of money for government use, I am entitled to refer to some of the other proposals of the Government for the same purpose.

Mr SPEAKER:

– The “definite matter of urgent public importance “ to which the honorable member has intimated that he wishes to direct attention is the “ permitting of a lottery to be held “. The honorable gentleman must confine his remarks to that subject.

Mr Latham:

– I submit that, iai addressing himself to a question before the House affecting the policy of the Government, an honorable member is at liberty to refer to the consistency or inconsistency of an action of the Government, and is entitled to make an observation as to the vacillation of the Government by reference to other examples of vacillation. Therefore, I submit that, what the honorable member for Henty has said is in order.

Mr SPEAKER:

– His remarks will be in order only so far as they are relevant to the matter under discussion. While general observations may be permitted, an honorable member would not be in order in traversing the whole range of public questions on a specific motion.

Mr GULLETT:

– I had intended to mention only two or three similarly disgraceful financial proposals of the Government, and I have drawn attention to one. In the present case, the Government descended to the lowest level that has been reached by any Ministry in recent years. Had the Minister for Home Affairs had his way, and had the Cabinet stood by his decision of last week, this young capital city would have become polluted by the introduction of an official gaming table. The taxpayers’ money would have been used for the promotion of this scandalous undertaking, and, most remarkable of all, public servants, who were actually named, were to be taken from the work for which they are paid, and placed in charge of this wretched enterprise. The proposal was to me, and, I am sure, to the overwhelming majority of the people, repugnant from every angle. It was a deplorable decision for a responsible Ministry to have reached at any time, and under any circumstances; but, having regard to the fact that this young country is to-day in the throes of a financial crisis, this action is to- be doubly regretted and condemned.

If there are two virtues which the National Government should endeavour to inculcate in the minds of the people, they are work and thrift. We should be working to-day, both with our hands and our heads, individually and collectively, as we have never worked before. But does the Government encourage thrift and work among the people? Does it make an appeal to the best qualities in them? I suggest that the intention, through this lottery, was to pander to the very worst instincts in our people. The holding of a national lottery in Canberra, which would be advertised to all the world as a means adopted for the raising of money, would have aimed the deadliest possible blow at our national morality, instead of encouraging a disposition to work and save. The idea of the Government in this crisis was to dangle before- the eyes of everybody the sign, “Easy Money”. The moral sense of the Government is similar to that of the individual who, on finding himself in embarrassed financial circumstances, helps himself to his employer’s money, and “punts’” it on the “ponies,” because the Government, in this case, proposed to use the taxpayers’ money. That was the spirit behind this extraordinary proposal. The gambling instinct in this country surely needs no special encouragement from the National Government. It is already quite as strong among the community as is good for us.

I now come to the extraordinary position of the Minister for Home Affairs (Mr. Blakeley). Only two or three days ago he definitely announced that the Government had approved this thing; but now, on the first sign of trouble, a few protests having appeared in the newspapers, he has the hardihood to tell us that, upon reconsideration of the matter, the Government is not going on with the project. I take it that the Minister made this announcement’ with the sanction of his colleagues ; that at the Cabinet meeting this morning his decision was overridden by them, and treated with contempt. Does the Minister intend to remain in the Cabinet after such a rebuff ? Does he propose to follow the extraordinary example of the Minister for Health (Mr. Anstey), and the Minister for Industry (Mr: Beasley), who, it is notorious, are quite out of step with their colleagues on financial matters? Despite all this dissension in the ranks of the present Ministry, this division of opinion on fundamental things, in some extraordinary way the Cabinet continues to jog along as a whole. This is something new in. the history of cabinet government in this country. Or is it that, in the absence of the Prime Minister, this is another of the outrageous things done, as it were, behind his back, and has he revolted at this descent to the promotion of gambling? Has the Prime Minister intervened from the other side of the world? Does that explain this extraordinary change of front?

Here we again have evidence of the complete destitution of sound ideas of this Government in applying financial methods to meet the present difficult situation. Here we have Ministers trifling with one extreme proposal after another, to the neglect of the sane and simple solution which lies to hand for our financial trouble. The Government actually ignores what is being done by every State Government. Instead of practising sound economy, it comes down with a proposal to pander to all that is worst in our people by suggesting the establishment of a national lottery at Canberra. We even have the Premier of New South Wales submitting proposals for real economy; but the Federal Government proposes the promotion of a lottery at a time of stress such as this country has never previously known. It is perfectly clear that if the Government would make a real effort at economy, instead of trifling with infamous, low-level schemes of this kind, it would be a simple matter for it to raise substantial sums immediately for the relief of unemployment. if it would straighten out its finances by legitimate means, it would be able to obtain financial relief at once, both in Great Britain and in Australia. Loan expenditure has been cut too much already. It would be possible, if the Government acted rightly, to obtain loan money for the relief of unemployment, and for the prosecution of urgent public works. We could secure the funding of liabilities in London amounting to £40,000,000, together with the release of £23,000,000 of Australian capital which, is wrapped up with them. These things could be done by the Government if only it would follow the right course. It should be possible to get relief through funding to the extent of from £5,000,000 to £10,000,000 a year in interest payments to Great Britain over the next five years. There is easy money which could be picked up by honorable members opposite if only they went the right way about it, instead of pandering in a wretched and contemptible way to the overworked . gaming instincts of the people. It is an extraordinary thing that this great party - great, at least, in numbers - can think of nothing better than a lottery for the relief of the hundreds of thousands of unemployed over whom its members shed tears in this House every day.

Mr Gabb:

– The party has never considered a lottery.

Mr GULLETT:

– This is news, indeed! So the party has never beer consulted on the matter. One wonders whether Cabinet was even consulted about it. The decision becomes more amazing every moment. On a matter so profoundly affecting the moral fibre of this country, the Government or the Minister evidently arrived at this extraordinary decision without even referring it to the party. What a remarkable situation it is ! I do not wonder that the Government took fright, and threw the Minister overboard. What a pretty scheme it was for the Minister to hatch out all by himself. Not the least remarkable feature of the situation is that the Minis*ter is still sitting, at the table after having received this almost unprecedented rebuff.

Mr BLAKELEY:
Minister for Home Affairs · Darling

.- The Deputy Leader of the Opposition (Mr. Gullett), being barren of anything real or original with which to attack the Government, has selected this subject, and it was amusing to hear him spread himself on it so vehemently this afternoon. The honorable member spoke of the moral fibre of the country. Let me tell him something of the moral fibre of the last Government.

Mr Gullett:

– I rise to a point of order. I suggest, Mr. Speaker, that the last Government is in jio way concerned with the subject before the Chair, and cannot be discussed by the honorable gentleman.

Mr SPEAKER (Hon Norman Makin:

– I assure the Deputy Leader of the Opposition that immediately the Minister for Home Affairs says anything irrelevant to the question before the House, I shall call him to order.

Mr Latham:

– May I ask whether you propose to give a ruling on the point of order which has been raised?

Mr SPEAKER:

– I have already stated that the Minister is in order until he has said something irrelevant to the subject before the Chair. So far, he is in order.

Mr BLAKELEY:

– There has been a good deal of hypocrisy-

Mr SPEAKER:

– Order ! It is not permissable for the Minister to impute hypocrisy to any honorable member of this House.

Mr BLAKELEY:

– I have not imputed it to any honorable member.

Mr SPEAKER:

-The Minister cannot evade the responsibilities of his position. He must withdraw his statement.

Mr BLAKELEY:

– I withdraw it. The honorable member who has just resumed his seat was a member of the Government which authorized the printing of special 5s. 6d, postal notes to meet the convenience of those persons who wished to purchase tickets in Tattersalls lottery, lie worked himself up into a great passion over the subject of lotteries this afternoon, but I remind him that the Government of which he was a member depended on money raised by taxation from these immoral sources to. carry on the business of the country.

Mr Archdale Parkhill:

– And the Government of which the Minister is a member has legalized that lottery.

Mr BLAKELEY:

– Yes; we do it openly, and without hypocrisy. We recognize the lottery, and instead of accepting money from it in taxation on the one hand, and on the other making a pretence of refusing to accept letters for it, as did the last Government, we allow the public to send letters openly through the post. The last Government, while keeping up the fiction that it would not accept letters for Tattersalls, printed special 5s. 6d. postal notes to facilitate the business of the lottery.

Mr Gullett:

– I rise to a point of order. I was not permitted to refer to various financial proposals of this Government, and I do not see why greater latitude should be extended to the Minister in regard to his reference to the last Government.

Mr SPEAKER:

– The Deputy Leader of the Opposition (Mr. Gullett) when he was checked, was referring to certain forms of taxation and to the financial policy of the Government, the Minister has been referring to subjects that are strictly relevant to the question before the House, namely, to lotteries, and the issue of postal notes to be used in con nexion with lotteries. If he goes beyond an explanation of the statements he has made concerning lotteries, he will be called to order.

Mr Archdale Parkhill:

– He was referring to the raising of funds.

Mr SPEAKER:

– I warn the honorable member for Warringah. He is showing very little respect to the Chair.

Mr Archdale Parkhill:

– I have spoken only once while you have been on your feet.

Mr SPEAKER:

– The honorable member has made other observations of which I took no notice at the time; but if he again offends, I shall name him without further warning.

Mr BLAKELEY:

– Not only were- 5s. 6d. postal notes printed by the last Government to facilitate the remission of money to the promoters of lotteries, but the Government arranged also for representatives of the Treasury to go to Tasmania and, practically, oversee the conduct of Tattersalls sweepstakes, and the distribution of the money, in order to ensure that the Commonwealth Treasury obtained its due proportion.

Mr Gullett:

– Does not the Minister think that that lottery should be taxed if it cannot be stopped ?

Mr BLAKELEY:

– Although the honorable member objects to lotteries on the ground that they are immoral, the Government of which he was a member reached out with both hands for taxation from that source. Yet the honorable member talks of the immorality of the action taken by the present Government. Again, the last Government deliberately gave to the Tasmanian Government the exclusive right to tax all prizes in Tattersalls sweeps. It magnanimously said, “ We will leave that field of taxation to the State Government “ - not because of moral scruples, but to relieve the Commonwealth Government of a financial responsibility, estimated to amount to £111,000 yearly. Although the Deputy Leader of the Opposition has worked himself into a passion this afternoon for purely political purposes, that he is not opposed to lotteries is shown by the fact that he and his colleagues, when in office, welcomed them with open arms for the revenue they produced^ and arranged with the Government of Tasmania that the amount of taxation from this source that the Commonwealth surrendered, should be accepted as portion of the Commonwealth grant to that State. The Tasmanian Government is now getting about £111,000 per annum from this field of taxation vacated by the Commonwealth.

Mr SPEAKER:

– The Minister will not be in order in continuing in that strain.

Mr BLAKELEY:

– I was making only a passing reference to that matter. The Canberra Unemployment Relief Committee is representative of business men, the Commonwealth Public Service and local trade unions. During the eight months in which it has been functioning it has done remarkably good work in an honorary capacity. Recently, representatives of the committee waited on me and asked to be granted the right to conduct an art union to” raise funds for the relief of unemployment in the Federal Capital Territory. I was, and still am, in favourof an art union on the lines suggested, but the Government, after due consideration of all the circumstances, decided not to grant permission for it.

Mr Gullett:

– The Minister said that permission would be granted.

Mr BLAKELEY:

– The Deputy Leader of the Opposition has endeavoured toconvey the impression that the Government was about to convert Canberra into another Monte Carlo, and he knows that that is not true.

Mr Gullett:

– The statement that I said something. which I knew was untrue is offensive, and . I ask that it be withdrawn.

Mr SPEAKER:

-I ask the Minister to withdraw the statement.

Mr BLAKELEY:

– If anything I said was offensive to the DeputyLeader of the Opposition; I’ withdraw it. The honorable gentleman sought to make it appear that this was to have been a Government lottery,but the Government was to have taken no part in it, beyond granting permission for the conduct of it.The Government’s connexion with it would : have been much less than the connection of the Governments of Queensland and Tasmania with the Golden Casket art union and Tattersalls sweeps respectively. The last Government deliberately created machinery for the conduct of art unions and lotteries in the Federal Capital Territory.

Mr Gullett:

– In connexion with church bazaars, I suppose.

Mr BLAKELEY:

– The Government of which the Leader and Deputy Leader of the Opposition were members, passed the Lotteries and Art Unions Ordinance, which provides, amongst other things, for cash prizes. If it was right for the last Government to conduct, or allow others to conduct, lotteries and art unions in this Territory, what would have been immoral had the present Government given permission to the Canberra Unemployment Relief Committee to do so? The ordinance sanctioned by the Bruce-Page Government provides for art unions to be conducted - for the purpose of the distribution or allotment by chance of paintings”, drawings, or other works of art and articles of use and ornament - the following words seem to indicate the mind of the Deputy Leader of the Opposition - or of sums of money as prizes to be expended for their purchase.

I am reminded of a church bazaar which I once attended and at which a lottery was conducted for a box of chocolates worth 10s. The winner was entitled to hand back the chocolates and receive 10s. in exchange. The ordinance approved by the Government of which the Deputy Leader of the Opposition was a member made tricks of that kind possible. Apparently the honorable gentleman had forgotten the existence of this piece of legislation.

Mr SPEAKER:

– The Minister’s time has expired.

Mr Latham:

Mr. Speaker-

Mr Fenton:

– I move -

That the question be now put.

Question - That the question be now put - put. The House divided. (Mr. Speaker. - Hon. Norman Makin.)

AYES: 35

NOES: 21

Majority . . . . 14

In division:

AYES

NOES

Question so resolved in the affirmative.

Original question resolved in the negative.

page 903

QUESTION

DUTY-FREE ADMISSIONS

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES

asked the Minister for Trade and Customs, upon notice -

What is the quantity und value of goods allowed to enter the Commonwealth free of duty under by-laws 174 and 404, respectively, for each month of the present financial year ?

Mr FORDE:
ALP

– There are approximately 728 items under Item 174: and 1,310 items under 404 on the permanent or standing by-laws. In addition to this a number of individual by-laws have been made. It would be an enormous task, which would involve a heavy expense, to go through the entries and records in all States to extract this information, and it is considered that this expense would not be justified.

page 903

QUESTION

DEPARTMENTAL MATERIAL AND EQUIPMENT

Mr ELDRIDGE:
MARTIN, NEW SOUTH WALES

asked the Acting Prime Minister, upon notice -

In view of the promise of the Prime Minister that all Commonwealth departmental materials and equipment would, where possible, be secured through Cockatoo Island Dockyard, will he furnish particulars of all work for thy. Postal Department and all other Commonwealth departments which has been carried out by private firms, or- imported, since the present Government took office, showing the classification of items, departments, dates of supply, costs, firms and addresses concerned?

Mr FENTON:
ALP

– The Commonwealth departments concerned have been communicated with in regard to this matter, and a further reply will be furnished to the honorable member as soon as possible, [f it is found that the cost of preparing this return is excessive the request of the honorable member may not be complied with.

page 903

QUESTION

SAVINGS CERTIFICATES

Mr CROUCH:

asked the Acting Treasurer, upon notice -

  1. Is it a “fact that the number of savings certificates issued in England averages 1,090,000 weekly?
  2. Would this be an acceptable practical way of partly meeting accruing internal loans?
Mr LYONS:
ALP

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

  1. According to a return laid before the British House of Commons, £41,050,000 was raised by National Savings Certificates in 1929-30.
  2. Certificates of this nature were issued in Australia to assist war finance, but the sale of them was discontinued several years ago. The question of again issuing savings certificates will be considered.

page 903

QUESTION

FLAX BOUNTY

Mr FRANCIS:
MORETON, QUEENSLAND

asked the Minister for Trade and Customs, upon notice -

  1. What quantity of flax was produced in Australia during the years ending 30th June. 1929 and 1930?
  2. What amount of bounty has been paid on audi production of flax?
Mr FORDE:
ALP

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

  1. 1928-29, 236 cwt. 1929-30, no information is yet available.
  2. No payments have yet been made.

page 904

QUESTION

FEDERAL CAPITAL TERRITORY

Pastoral Leases

Mr McGRATH:
BALLAARAT, VICTORIA

asked the Minister for Home Affairs, upon notice -

  1. How many rural lessees in the Federal Capital Territory hold pastoral leases beyond the limit of value provided by ordinance?
  2. What are the names of such lessees and the values of their holdings?
  3. Is it a fact that valuable agistment rights have been granted by the Lands Officer to a lessee holding land beyond the statutory limit?
  4. If so, what agistment rights have been so granted in the last three years?
Mr BLAKELEY:

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

  1. None.
  2. See answer to No. 1.
  3. No.
  4. See answer to No. 3.

page 904

QUESTION

STATE MORATORIUM LEGISLATION

Mr ELDRIDGE:

asked the Acting Prime Minister,upon notice -

Will he obtain from the Premier of New South Wales a copy of the Moratorium Bill, if available, to be introduced in the Legislative Assembly of that State, and submit it to the Acting Solicitor-General of the Commonwealth to obtain a report as to whether federal legislation will be necessary to prevent the institution of proceedings under the Commonwealth Bankruptcy Act which may frustrate the protection to be accorded debtors by the moratorium legislation of the State?

Mr FENTON:
ALP

– Steps have been taken to obtain a copy of the bill, but I am advised that one is not yet available.

page 904

QUESTION

PAPER-PULP INDUSTRY

Mr GUY:

asked the Acting Prime

Minister, upon notice -

Whether he is in a position to make a statement to the House respecting the efforts of the Government to assist in the development of the paper-pulp industry?

Mr FENTON:
ALP

– Negotiations are being actively pursued between the Governments and the interests representing the paper-pulp industry in Tasmania, and the House will be informed as early as possible of the result of these negotiations.

page 904

QUESTION

EXPANSION OF CREDIT

Mr LONG:
LANG, NEW SOUTH WALES

asked the Acting Treasurer, upon notice -

  1. Will he consider a release, expansion, or mobilization of credit that would cause the associated banks to fulfil their proper functions in the credit system of Australia, with a view to lowering the present rate of interest, which is being at present maintained at a ridiculously high figure by the action of the banks in restricting credit?
  2. Will he consider the matter of future internal loans being incorporated in the banking system of the Commonwealth with a view to decreasing interest rates?
Mr LYONS:
ALP

– If the honorable member will be good enough to submit to me particulars of the scheme he has in mind I will give his proposals full consideration.

page 904

QUESTION

LOANS

Utilization of Banks’ Resources

Mr LONG:

asked the Acting Treasurer, upon notice -

  1. Will it be possible to have all future internal loans incorporated in the banking system of the Commonwealth at a low rate of interest?
  2. If this were done, would it release a large amount of the £27,000,000 loan falling due this month to the bondholders for investment in industry ?
  3. Would it also tend to bring about a rapid decline in the present excessive interest rate, and constitute the first step back towards prosperity, which this country should be able to maintain even in the face of adverse conditions in other parts of the world?
Mr LYONS:
ALP

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

  1. In my opinion no such plan is possible, as the resources of the banks are required to finance ordinary banking business. 2 and 3. See answers to question No. 1.

page 904

QUESTION

SUGAR

Production - Consumption

Mr FORDE:
ALP

– On the 12th November the honorable member for Boothby (Mr. Price) asked the following question, upon notice -

  1. What was the total production and value of sugar grown in Australia for each year from 1912 to 1930 inclusive, together with the amount of (a) raw sugar produced, and (6) raw sugar exported, in each of such years ?
  2. What is the estimated consumption in Australia of refined sugar for each year from 1912 to 1930 inclusive, together with the amount of refined sugar exported during each of such years?
  3. What was the wholesale price and the export price of refined sugar for each of the years 1912 to 1930 inclusive?
  4. Is the Minister in a position to give this House any data as to the price paid for sugarcane land?

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

  1. No, but the matter is at present the subject of inquiry by the Commonwealth Committee on sugar.

On the 27th November the honorable member for Boothby (Mr. Price) asked the following questions, upon notice -

  1. In connexion with the sugar embargo question, is it a fact that the Australian consumption of sugar, both direct and indirect, is approximately 115 lb. per head per annum, ‘and is probably the highest in the world ?
  2. Provided that the price of sugar were reduced to pre-war level, what would be the approximate effect upon the prices to consumers of the following food articles: -Jam, canned fruit, condensed milk, confectionery, sweet biscuits and cakes, jelly crystals, and other commodities?

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

  1. The estimated consumption of sugar, both direct and indirect, is approximately 115 lb. per head per annum. This is probably the highest in the world.
  2. The approximate amounts would be -

Jam -1d. per standard1½-lb. tin.

Canned fruits -½d. per standard 30-oz. can.

Condensed milk -¼d. per 14-oz. tin.

Confectionery -¼d. per lb.

Sweet biscuits and cakes -¼d. per lb.

Jelly crystals -¼. per lb.

Other commodities - Negligible.

page 906

QUESTION

MANUFACTURE OF CARBIDE

Mr FORDE:
ALP

– On the 18th November the honorable member for Denison (Mr. Culley) asked the following question, upon notice -

In view of the fact that tlie Carbide Company, in Tasmania, is receiving . protection against the imported article, will he have inquiries made as to whether it is necessary to use imported coal against local coal in the manufacture of carbide?

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

The representative of the Australian Commonwealth Carbide Company Limited states that it is necessary to use imported coal in the manufacture of carbide as the required type of coal is not obtainable in Australia. The particular kind of coal imported is Welsh anthracite, and it is used us an ingredient in the manufacture of carbide. It is stated that Welsh anthracite coal is used by manufacturers of carbide all over the world, ordinary grades of coal being practically useless for” the required purpose. The company’s representative states that it uses Australian coal for all burning purposes, 2,000 tons, approximately, having been used in that manner during the past twelve months.

page 906

QUESTION

CANBERRA TRAIN SERVICE

Mr FORDE:
ALP

– The honorable member for Bendigo (Mr. Keane) and the Deputy Leader of the Opposition (Mr. Gullett), on the adjournment of the

House one evening last week, made reference to some proposals which were being carried out in connexion with the alteration of the railway service to and from Canberra. As promised, I have had representations made in the matter, and am now in receipt of advice to the effect that the existing service will be maintained until Parliament adjourns. The question of retaining a convenient service when Parliament is not sitting is still the subject of negotiations between the Commonwealth Railway Commissioner and the Chief Commissioner for the New South “Wales railways.

page 906

QUESTION

ENTERTAINMENTS TAX

Mr LYONS:
ALP

– On the 28th November the honorable member for “Wentworth (Mr. Marks) asked the following question, upon notice -

What revenue was collected per ‘medium of the federal entertainments tax for the twelve months ending 31st August,’ 1930, for each respective State, from (a) moving picture theatres; and (b) all other amusements (respectively detailed)?

The answer .to the honorable member’s question is as follows : - (a.) and (b). The particulars asked for are not yet available in respect of the twelve months ended the 31st August, 1930. The information in regard to the year ended the 30th June, 1930, is as under: -

page 907

QUESTION

DEFENCE DEPARTMENT INSTRUCTORS

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– On the 28th November the honorable member for Kooyong (Mr. Latham) asked the following questions, upon notice -

  1. Is it a fact that a number of instructors in the Defence Department who were returned soldiers, and who were performing their duties efficiently, were required to submit to a further medical examination in July last?
  2. Is it the case that at such examination they wore required to be passed as fit for active service, although it was known that many of them had suffered war disabilities which rendered them unfit for active service, while leaving them fully capable of performing instructional work?
  3. Were some, and, if so, what number, of these instructors dismissed from the service in and since July last?

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

  1. The military regulations have always prescribed an annual medical examination in June for all members of the Permanent Military Forces for fitness for active service. Beyond this ordinary annual medical examination in June, no further medical examination was held excepting in the cases referred by the examining medical officers to a medical board.
  2. Those under 40 years of age reported by a medical board as unfit for active service, are normally discharged permanently medically unfit, and are eligible for superannuation pension. It is considered uneconomical to continue to train unfit men under 40 years. Those over 40 years reported by a medical board as unfit for active service, but capable of efficiently performing the duties of their appointment without aggravation of their disability, are continued in the service, as it is recognized that their age and experience are Of benefit in the training of others.
  3. Since 1st July one officer of the Staff Corps, three quartermasters and nine sergeantmajors have been discharged on the report of a medical board as permanently medically unfit for further military service, on superannuation pension. Eleven of these were returned soldiers. Most of the above were recorded permanently medically unfit for several months preceding their discharge, and were on’ sick leave for varying periods in accordance with the regulations for sick leave pending discharge. In addition to the above the following numbers are still on sick leave, pending discharge on superannuation pension, viz: one, twelve months; one, ten months; two, eight months; one, seven months; two, six months; two, five months; two, four months; three, three months; three, two months; and three, one month.

page 907

QUESTION

TARIFF BOARD REPORTS

Mr FORDE:
Acting Minister for Markets and Transport · Capricornia · ALP

– I lay on the table of the House the reports of the Tariff Board on the following subjects: -

Web printing presses, glue, cement, and prepared adhesives, &c. Petrol in containers. Export duty on unscoured woo! and sheepskins.

I move -

That the reports be printed.

Mr ARCHDALE PARKHILL:
Warringah

– I wish to make some reference to the tariff and to enter a most emphatic protest against the action of the Government.

Mr SPEAKER (Hon Norman Makin:

– Does the honorable member propose to enter into a detailed discussion of the tariff items in question?

Mr ARCHDALE PARKHILL:

– Yes.

Mr SPEAKER:

– The honorable member will not be in order in anticipating the discussion of the tariff schedule. He may discuss tariff matters generally, but not detailed items.

Mr ARCHDALE PARKHILL:

– Reports of the Tariff Board are constantly being placed on the table and motions are moved that they be printed.

Mr Forde:

– Honorable members have asked for the reports to be made available to them, and, so that copies may be distributed among them, I have moved that the reports be printed.

Mr ARCHDALE PARKHILL:

– My complaint is that once these reports are printed, no further action is taken by the Government to deal with them. I suppose that over five hundred items have been put into operation and have not yet been dealt with.

Mr SPEAKER:

– I think that perhaps I might assist the honorable member if I explain that these reports deal with the following subjects : - Web printing presses; glue, cement, and prepared adhesives, &c. ; petrol in containers; and export duty on unscoured wool and sheepskins. The honorable member will be in order in referring to those items, but no.t to any others.

Mr ARCHDALE PARKHILL:

– I submit that the delay which is taking place in dealing with Tariff Board reports amounts to a public scandal.

Mr SPEAKER:

– The honorable member is not in order in referring to anything that is being done in this Parliament as amounting to a scandal.

Mr Latham:

– What is the Standing Order?

Mr SPEAKER:

– The determination that terms are offensive or expressions unparliamentary is left to the discretion of the Chair. I regard the word “ scandal “ as a reflection upon this Parliament, and therefore, I ask the honorable member to withdraw it.

Mr ARCHDALE PARKHILL:

– I am not for one moment reflecting upon Parliament.

Mr SPEAKER:

– Does the honorable member withdraw his remark?

Mr ARCHDALE PARKHILL:

– Yes. The fact that these reports have been printed and not dealt with has’ engendered in the mind of the general public a feeling of dissatisfaction with this Parliament generally, and particularly with the Government in power. I have heard harsh terms, much harsher than I have used in this House, applied to the Government because of its extraordinary delay in dealing with tariff reports and schedules. Its tariff policy is inflicting a grave injustice on the citizens of this Commonwealth. Some of them have been caused cruel financial embarrassment; others have been presented with fortunes: All this ha3 been done over-night. People wake up in the morning and find that, because of the imposition of prohibitive duties or embargoes upon imports, they are face to face with ruin. I protest strongly against the continuation of the present position. I object to the way in which the reports have been compiled. Most of them are the result of a cursory and casual inquiry into the industry concerned, and the recommendations contained in them in no sense represent a well-considered judgment. I ask the House to compare our method of compiling tariff reports with that of other countries. In Canada a full investigation is made into every aspect of the industry concerned. The inquiries are often of a protracted nature; but, when completed, a full statement of the position of the industry in all its ramifications is furnished. A dozen or so of the Tariff Board’s reports that were brought d’own to the House only the other day have not yet been dealt with. We do not know for what period the embargoes are imposed. We know no more about the Government’s tariff policy than we do about its policy in respect of anything else. There has not been the faintest semblance of leadership exhibited by the Ministry in regard to questions of national importance. Why does not the Government deal with these tariff reports, and bring about a double dissolution as soon as possible? One would imagine from the remarks of Government supporters that they were anxious to expedite a double dissolution, but apparently that is not so. The Government is not, as the honorable member for Henty (Mr. Gullett) has said, jogging along, but is actually crawling on its stomach. When it is not drifting it is crawling, and being kicked along by the caucus. I have never seen a more humiliating spectacle than that presented by this Government in respect of every aspect of .administration.” Perhaps its worst exhibition is its tariff policy, which is inflicting hardship throughout the country.

I have protested against the delay in dealing with the tariff schedules, because it is inflicting the gravest and cruellest injustice upon many of our fellow citizens. We should be allowed to discuss the schedules in their entirety, butthis we have not been permitted to do. Schedule succeeds schedule in an alarming way; but the elected representatives of the people in Parliament are denied the opportunity of discussing them. If I were permitted to say so, I would describe this proceeding on the part of the Government as scandalous; but as it would be unparliamentary for me to use that term, I can only say that the action of the Government is worse than that.

Mr SPEAKER:

– Order ! . The honorable gentleman is seeking to evade the ruling of the Chair. I must remind honorable members that becoming behaviour and respect for the Chair are required of them.

Mr ARCHDALE PARKHILL:

– .7 had no intention of evading your ruling, Mr. Speaker. I have the greatest respect for the Chair. I was simply endeavouring to express my opinion. I consider it to be reprehensible on the part of the Government to introduce ill-advised and ill-considered tariff taxing proposals and then prevent honorable members from discussing them.

Mr Forde:

– The Government is making available to honorable members the reports of the Tariff Board for which they have asked.

Mr ARCHDALE PARKHILL:

– Unfortunately, the heaviest duties, and those which have caused the greatest hardship have been imposed, not upon the recommendations of well-considered reports of the Tariff Board, but upon the judgment of the Acting Minister.

Mr Forde:

– All proposals are considered by a sub-comm’ittee of Cabinet.

Mr ARCHDALE PARKHILL:

– I object to the present system of imposing increased customs duties, because it rests upon the inexperience of one Minister. The schedules which he has introduced are having the same kind of result that would be caused by the releasing of a rabbit in a crockery shop. A rabbit would run hither and thither and knock down valuable ornaments and break costly antiques which could not be replaced. The tariff schedules for which the Acting Minister is responsible are having a disastrous effect upon the industries of this country, and are inflicting great hardships upon our people. I do not suggest that the Acting Minister intends his actions to have this effect; but he is ignorant, and must necessarily be ignorant, of the intricacies of the many industries affected by the schedules he has tabled. No one man could possibly understand all the ramifications of these industries, unless he has had a lifelong training in industry in all its aspects. Mere clerical knowledge could not possibly fit a man to appreciate the intricacies of many secondary industries which have been established in this country. Yet the Acting Minister, after five minutes’ experience in the department, so to speak, took steps which resulted in embargoes being placed upon the importation of certain commodities, and prohibitive duties on other articles which were not being and could not be. made here. No doubt you, Mr. Speaker, have a thorough knowledge of engineering, with which industry you had practical association for many years; but the Acting ‘ Minister for Trade and Customs has had the temerity to subject this industry, among other, to the fiercest customs taxation without any knowledge whatever of it. On his mere, “ say so “, some industries in this country have been ruined and others have enjoyed a measure of temporary prosperity ; some workers have been robbed of their employment, and some - a very few - have been given a little more assurance of regular work for the time being. A system which places such great power in the hands of one man, who may act without any expert advice whatever, is entirely wrong.

During the early period of his administration of the Customs Department, the Acting Minister said glibly and frequently, that the policy of the Government would ensure the employment of 50,000 additional men. Such remarks must be attributed to the exuberance of youth and the enthusiasm engendered by the assumption of ministerial office. Every time an honorable member on this side of the chamber objected to the introduction of a new tariff schedule, the Acting Minister jumped to his feet and said that the new duties would, without doubt, result in the employment of another 50,000 men. This was mere speculation on his part. All that the honorable gentleman can say now is that if these new duties had not been imposed, 50,000 more men would have been unemployed. In my opinion, it is the enforcement of the Government’s unbalanced tariff policy, its prohibition of the importation of raw materials for industry, its exclusion of certain commodities and machinery required in industry undertakings, and its refusal to take into consideration all the circumstances of our present situation, which have caused a great deal of the unemployment that exists to-day. I believe that the tariff schedules for which this Government is responsible have actually robbed 50,000 of our fellow citizens of their employment. In spite of this, the representatives of the people in Parliament have been denied the right to discuss the situation with a view to remedying it. It is not fair that our mouths should be closed on all these subjects. When the Acting Prime Minister was abroad, he said that the embargoes would have only a temporary application.

Motion (by Mr. fenton)-That the question be now put - put.

The House divided. (Mr. Speaker - Hon. Norman Makin.)

AYES: 33

NOES: 20

Majority . . . . 13

AYES

NOES

Question so resolved in the affirmative.

Original question resolved in the affirmative.

page 910

QUESTION

TRENCH RENTS

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

by leave - I desire to make a statement regarding the remarks of the honorable member for Corangamite (Mr. Crouch), in which he criticized the replies given on the 26th November to his questions relating to the accommodation of the Australian Imperial Force in France. I now wish to reiterate that my replies were absolutely correct. For the information of honorable members I may state that in May, 1916, the Imperial Government accepted full financial liability for accommodation and barrack stores required by all dominion forces abroad, that is, in the United Kingdom, France, Belgium, Egypt, &c. this concession resulting in considerable monetary saving to the Commonwealth. A very liberal interpretation was placed upon the term “ accommodation “, it covering not only all types of what might be termed housing for the troops, e.g., billets, hutments, barracks, hospitals, &c, but that required for accommodating all stores, equipment, &c. In accordance with such arrangements, therefore, Australia did not, as I have already made clear, pay for any accommodation including rent for the use of trenches, &c, utilized by the Australian Imperial Force in France, either in the per capita charge for the maintenance of our troops or in any other manner, any liability that might arise in that connexion being purely a matter for adjustment between the Imperial and French authorities. In the excerpt quoted by the honorable member from the book, Episodes and Reflections, written by MajorGeneral Sir Wyndham Childs, appears the statement, “ I think we paid compensation for disturbance of the trenches we dug outside the zone of the armies “. In my reply to questions 1 and 2 by the honorable member, I stated that no information is available as to whether the British Government was charged with or paid “ trench rent “, &c. I again state that no official information on that point is held and also that Australia did not pay any such compensation. With regard to the honorable member’s reference to the reply given by the then Minister to a question raised by Mr. Finlayson in October, 1919, to the effect that the per capita charge paid by Australia for the maintenance of her troops in France and Belgium included “ accommodation “, I can, at this stage, only’ say that such reply was apparently made under a misapprehension, the per capita charge not including accommodation. I trust the honorable member is now satisfied, and would suggest that he might see his way to withdraw his remarks to the effect that the department is guilty of “inexcusable ignorance and palpable evasion “, in supplying the information as the basis of my answers.

Mr CROUCH:

– By leave I desire to make a statement.

Mr Archdale Parkhill:

– I object.

Mr Lewis:

– That is cowardly and contemptible.

Mr SPEAKER (Hon Norman Makin:

– The honorable member is not in order in making such an interjection.

Leave not granted.

Mr CROUCH:

– I rise to make a personal explanation.

Mr SPEAKER:

– Has the honorable member been misrepresented?

Mr CROUCH:

– Yes, by the statement that has been made by the Minister for Defence. I was given no notice of the intention to make this statement, or I might have prepared myself to reply to it. The Minister has called upon me at the request of officers of his Department to withdraw certain remarks that I have made. In the first place I asked if the British Government had paid rent for the ground used to make war trenches.

Mr Archdale Parkhill:

– I submit that the honorable member is disputing a statement of fact, and that there has been no misrepresentation of which he can complain.

Mr SPEAKER:

– The honorable member will not be in order in controverting, under cover of a personal explanation, something said by the Minister. If he has been personally misrepresented, he will be inorder in continuing his remarks but not otherwise.

Mr CROUCH:

– I have been misrepresented personally. It will be remembered that the closing words of the Minister’s statement were that I should Avithdraw the inaccurate statement made by me. I submit that that contains a misrepresentation.

Mr SPEAKER:

– The concluding words of the Minister were -

I trust the honorable member is now satisfied, and would suggest that he might see his way to withdraw his remark to the effect that the Department is guilty of “ inexcusable ignorance and palpable evasion “ in supplying the information as the basis of my answers.

There is no misrepresentation of the honorable member in that statement.

Mr Francis:

– Hear, hear ! The honorable member is merely wasting the time of the House.

Mr.Crouch. - I rise to a point of order. Last week, I think, Mr. Speaker, you directed an honorable membur to withdraw his remark that another honorable member was wasting the time of the House. The honorable member for “Warringah (Mr. Parkhill) has accused me of wasting time, and I ask that the words be withdrawn.

Mr SPEAKER:

– I did not hear the words used.

Mr Archdale Parkhill:

– I used no such words.

Mr Lewis:

– You are only a contemptible cad.

Mr SPEAKER:

– The honorable member for Corio must withdraw that remark.

Mr Lewis:

– So he is.

Mr SPEAKER:

– I shall name the honorable member for disobedience of the Chair.

Mr Lewis:

– I suppose Imust withdraw in accordance with the rules of the House.

Mr SPEAKER:

– The honorable member must withdraw what he said.

Mr Lewis:

– I withdraw it.

Mr Crouch:

– I ask that the honorable member for Warringah be called upon to withdraw the words used by him, that I have been wasting the time of the House.

Mr SPEAKER:

– It is usual to accept an honorable member’s denial.

Mr Francis:

– I do not wish the honorable member for Warringah to be blamed for an interjection for which I am responsible.

Mr SPEAKER:

– The incident is now closed.

page 911

IMMIGRATION BILL

Assent reported.

page 912

TARIFF SCHEDULE (No. 5) 1930

Customs and Excise Duties

In Committee of Ways and Means:

Mr FORDE:
Acting Minister for Markets and Transport · Capricornia · ALP

– I move -

That the Schedule to the *Customs Tariff* 1921-1930 as proposed to be amended by Tariff Proposals be further amended as hereunder set out, and that on and after the Fourth day of December, One thousand nine hundred and thirty, at nine o'clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, Duties of Customs be collected in pursuance of the Customs Tariff as so amended. That in this Resolution " Tariff Proposals " means the Customs Tariff Proposals introduced into the House of Representatives on the following dates, namely : - 19th June, 1930 ; 9th July, 1930 ; 25th July, 1930 ; and 5th November, 1930. That, excepting by mutual agreement or until after six months' notice has been given to the Government of the Dominion of New Zealand, nothing in this Resolution shall affect any goods the produce or manufacture of the Dominion of New Zealand entering the Commonwealth of Australia from the Dominion of New Zealand.
That the Schedule to the *Excise Tariff* 1921-1928 as proposed to be amended by the Excise Tariff Proposals be further amended as hereunder set out, and that on and after the Fourth day of December, One thousand nine hundred and thirty, at nine o'clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, Duties of Excise be collected in pursuance of the Excise Tariff as so amended. That in this Resolution " Excise Tariff Proposals " means the Excise Tariff Proposals introduced inthe House of Representatives on the following dates, namely : - 19th June, 1930 ; 9th July, 1930 ; and 5th November, 1930. I have had distributed among honorable members a memorandum showing the items in the proposed December, 1930, tariffs, as compared with the 1921-28 tariffs and the customs tariff resolutions of the 22ndAugust, 1929, the 21st November, 1929, the 19th June, 1930, the 9th July, 1930, and the 5th November, 1930. The customs and excise tariff motions which I have just submitted affect revenue items. It will be recollected that, on the 5th November, 1930, certain revenue duties were imposed with the object of assisting to balance the budget. By the tariff schedules brought into the House on that date, increased excise duties were imposed on locallymanufactured tobacco, and at the same time a compensating increase was made in the duty on imported manufactured tobacco. The present customs resolution imposes an increased duty on imported leaf tobacco for use in the manufacture of tobacco and cigarettes, in lieu of the excise duty recently imposed on the Australian-made tobacco, whether manufactured from imported leaf or from Australian-grown tobacco. The increase now imposed on imported leaf is1s. 8d. per lb. The excise tariff resolution provides for the abolition of the 2s. per lb. increase imposed on locally-manufactured tobacco by the resolution of the 5th November, 1930, under items 6 a and b, and the rates on locally-manufactured tobacco classifiable under these items will revert to the former level. The duty on imported cigarettes is being increased by 1s. per lb. It was estimated, when the schedule was brought in on the 5th November, that the proceeds from the increased excise duties, principally on tobacco, would return additional revenue of approximately £1,000,000. Amendments now made to the tobacco duties have been adopted after a conference with the members of the parliamentary select committee which recently inquired into the tobacco-growing industry in the Commonwealth. This committee was presided over by the honorable member for New England **(Mr. Thompson),** who had with him the honorable member for Barton **(Mr. Tully),** the honorable member for Herbert **(Mr. Martens),** the honorable member for Darling Downs **(Mr. Morgan),** and the honorable member for Indi **(Mr. Jones).** The Government, after consultation with this committee, and with representatives of the workers in the tobacco industry, and after considering the case put up by the British-Australasian Tobacco Company, decided to make this alteration. We trust that the new duties will, without causing undue loss of revenue, have the effect of stimulating the demand for locally-grown tobacco which, in turn, will stimulate production. I feel sure that the honorable member for New England will agree with me that this result should follow. Lt is estimated that, as a result of the altered duties, we shall obtain only a little less revenue than if we had permitted the excise duty of 2s. per lb. on tobacco made from locally-grown leaf to remain in force. The Government realizes that this is a time when it is necessary to assist and foster new industries. It has been pointed out to us that the tobaccogrowing industry is one of great promise, f believe and predict that, as a result of these tariff amendments, Australia will in the course of time produce all the tobacco she requires. This is an industry in which it is possible to secure a net return of £100 an acre from a good crop, and from £50 to £60 an acre from a fair crop. As the members of the select committee bave pointed out, the industry is capable, as a result of this tariff amendment, of giving a return three times as great as any other primary industry at the present time. Why should we go on importing £3,000,000 worth of tobacco every' year from other countries when, by proper assistance to our own growers, we might supply all our own requirements? I feel sure that many honorable members opposite, besides the honorable member for New England, are agreed that the Government's present action is justified. It is proposed, also, to revise the duty on fencing wire. The intermediate and general rates on iron and steel wire less than 15 gauge are being increased by 52s. a ton in order to restore the protective and preferential position, existing prior to the introduction of the customs tariff resolution on the 5 th November. In order to curtail expenditure on bounties, it was decided before the 5th November last to abolish the bounty on wire, replacing it by an increased duty. Honorable members will recollect that the duties operating prior to that date on fencing wire, gauges 8 to 14 inclusive, were - Free, British; 100s. intermediate; and 120s., general. A bounty of 52s. a ton was paid on locallymanufactured fencing wire, but this bounty is not now being paid. The protection afforded to local manufacturers of. fencing wire prior to the 6th November,. 1930, was 52s. by means of a bounty, and a customs tariff of 120s., making a total of 172s. a ton. This amount of protection is now being restored, and in like manner the margin of preference to British manufacturers is being restored to its former level of 120s. a ton. The Government has given further . careful consideration to the item under which a duty of Id. per gallon was imposed on kerosene.' A representative deputation of wheat-growers waited upon me immediately after the wheat conference, and pointed out that this duty would place a heavy burden upon the farmers. When the duty was imposed I said definitely that I was of opinion that it would not be passed on to the farmer, and, in answer to the deputation, I said that, if it could be shown that the duty was being passed on, the Government would be pleased to reconsider the whole matter. This Government is acutely sensible of the fact that 50,000 wheatfarmers in Australia are in serious financial straits as a result of low prices. The bottom has fallen completely out of the wheat market, and the price is lower now . than it has been for the last 36 years. The Government was' very sorry that it could not accept the wheat-farmers' pro- 'posal that a sales tax of £7 4s. a ton should be imposed on flour, so that a bonus might be paid to the growers. It was only because we realized that the scheme was fraught with great difficulty from an administrative point of view, as we have been advised by experts, that we were compelled to turn it down. However, as the Acting Prime Minister **(Mr.** Fenton) said at the time of the conference, and as I have myself stated, anything which the Government can do to lighten the burden on the wheat-growers will receive every consideration. Each year 3,000,000 gallons of kerosene are imported into Australia. Three-fifths is used for power on the wheat-fields, and on farms generally, and two-fifths is used for lighting purposes in the homes of country people, many of them wheatgrowers. The Government has been convinced by evidence forthcoming from South Australia and elsewhere, that the duty on kerosene is in some cases - though not all - being passed on, and has decided to repeal the duty altogether. Although the revenue derived from this duty was very attractive from the point of view of the Government, it was decided that the present was an inopportune time to raise revenue from such a source. By this step the Government has proved its practical sympathy with the farmers, who have been able to put up a good case. It is also proposed to revise item 291 (l), to enable Baltic timber imported prior to the 20th March, 1930, and which is in bond on the 31st December, 1930, to be entered for home consumption at the 20s. per hundred super feet rate of duty. On the 20th of March this year the Prime Minister **(Mr. Scullin)** announced in this House the terms of an agreement entered into between the Government and certain timber importers, who had disputed the tariff classification of baltic timber. Legal proceedings had been initiated by the importers, and, after a conference between them and the Prime Minister, those proceedings were withdrawn on the understanding that the importers would be permitted to return to bond the timber in respect of which the dispute arose. They were to receive a refund of the duty paid, and the timber, when subsequently entered for home consumption, was to be chargeable with a rate of duty not exceeding the then existing rate of 20s. per 100 superficial feet. I shall quote the words used by the Prime Minister on that occasion, as recorded in *Hansard* of the 3lst March, page 353. They are as follow: - >In the circumstances I took the reponsibility of allowing the timber to be rebonded, and of agreeing to refund the amount of duty that they had paid- {: .speaker-KFS} ##### Mr Gullett: -- Is the honorablemember in order in quoting from *Hansard* for the current session? The **CHAIRMAN (Mr. McGrath).He** is not. {: .speaker-F4U} ##### Mr FORDE: -- The Prime Minister also used the same words in reply to the deputation which waited upon him. {: .speaker-KZO} ##### Mr Latham: -- I rise to a point of order. The Minister stated that he was reading from *Hansard* of the current session, and, although ruled out of order, he continues to do so. {: #subdebate-30-1-s1 .speaker-10000} ##### The CHAIRMAN: -- The Minister has since assured me that he is quoting from the Prime Minister's reply to a deputation. {: .speaker-F4U} ##### Mr FORDE: -- In his reply to the deputation, which was identical with his statement in the House, he said - >The formula in which the arrangement we came to has been expressed is as follows: - {: .speaker-KZO} ##### Mr Latham: -- Is the Minister reading from the report of the deputation? {: .speaker-F4U} ##### Mr FORDE: -- This is the statement made by the Prime Minister to a deputation. I was present at the interview. He continued - {: type="1" start="1"} 0. In all cases where duty paid under protest on dressed Baltic floorings, linings, and weatherboard, any owner shall have the right to rebond such timber and receive refund of duty paid thereon, provided such timber is physically in position to be re-bonded, and when such timber is subsequently entered for home consumption the rate oi duty thereon shall not exceed the sum of 20s. per 100 super feet. That point needs some explanation. It was suggested that if the timber were re-bonded there would be nothing to prevent the Government from increasing the duty before it could be taken out of bond again. But that would be playing an unfair trick upon the merchants; so, although it is not usual to give assurances in regard to variations of duty,I undertook that nothing df the kind would be done. The formula concluded in the following terms : - {: type="1" start="2"} 0. In each case where timber is re-bonded the relative proceedings are to be discontinued, and where any proceedings, whether under section 163 or' section 167, are discontinued, each party shall pay its own costs. 1. The refundof duty to be made under paragraph (1) shall be made within fourteen days after the request is lodged. In the tariff schedule introduced into this House on the 19th June, 1930, provision was made for a deferred duty of 24s. per 100 super feet on Baltic timber, to come into operation on the 1st January next. The deferment of the increased rates to that date was inserted in order to enable the stocks of Baltic timber in bond to be cleared, and in the ordinary course of trade that period would have proved sufficient. The depression in the building trade, however, has so affected building operations that only a very small proportion of the timber covered by the agreement has been entered for home consumption. The proviso included in the present schedule will enable all Baltic timber imported prior to the 20th March, 1930, to be cleared at the 20s. rate, in accordance with the spirit of the Prime Minister's promise. A new item in the excise tariff imposes a duty on concentrated grape must. This article is grape juice from which water has been evaporated, and it is now being used in wine-making to the detriment of the revenue from fortifying spirit. In the manufacture of sweet wine, fortifying spirit is largely used, and the excise duty on this spirit is 10s. per proof gallon, if made from doradillo grapes, and l1s. per proof gallon if made from other grapes. The cost of fortifying a wine up to 34 per cent. of proof spirit is 2s. 4d. per gallon of wine, and when wine is exported under the Wine Export Bounty Act the department returns 2s. 4d. on each gallon to the exporter by way of drawback. By using concentrated must, wine-makers do not require to employ the same quantity of fortifying spirit. Not only does the revenue suffer, but the wine-making trade throughout the Commonwealth is disorganized by reason of the differential costs of production. In some instances the wine-maker has, through the use of concentrated must, paid as low as10d. per gallon of wine in duty on the fortifying spirit used, as compared with 2s. 4d. per gallon paid by manufacturers who do not use concentrated must. In self-defence, all winemakers will have to resort to the use of concentrated must, if a duty is not imposed thereon, and the revenue will suffer accordingly. A duty of 3d. per gallon is being imposed on concentrated must, used for purposes other than wine- making. This is a nominal duty, and has been imposed for the purpose of giving to the department control over its use in order to ensure that it is not employed for wine-making unless it pays the higher rate. The action taken by the Government in imposing excise duties on concentrated must meets with the full support of the Federal Viticultural Council, and was recommended by the Senior Inspector of Excise, **Mr. Gollin.** After full investigation, he reported to the ComptrollerGeneral of Customs, who advised that action be taken in accordance with that report. The proposal was examined by a sub-committee of Cabinet, including myself, and finally the Government decided that this new item should be inserted in the tariff schedule. The whole matter will, however, be referred to the Tariff Board for public inquiry and report. I move - >That progress be reported. Question - That progress be reported - put. The House divided. (Chairman - Mr. McGrath.) AYES: 33 NOES: 20 Majority . . . . 13 AYES NOES Question so resolved in the affirmative. {: .page-start } page 917 {:#debate-31} ### NATIONAL DEBT SINKING FUND BILL Secondreading. Debate resumed from 28th November *(vide* page 841), on motion by **Mr. Lyons** - >That the bill be now read a second time. {: #debate-31-s0 .speaker-C7E} ##### Dr EARLE PAGE:
Cowper .- During the last twelve months the Government has resembled nothing so much as a cow which is continually returning its cud to be chewed and chewed again. Every measure of legislation which the Government has submitted to Parliament has required frequent revision, because it was ill-considered and illdigested originally. A notable instance is the tariff schedule introduced to-day to amend a schedule tabled on the 5th November, which amended a schedule tabled in July, which amended a schedule tabled in June, and which amended a schedule tabled in April, and so on. Never in the history of any legislature has there been such an exhibition of incompetence and illconsidered haste as has distinguished the brief reign of the present Government. This measure, which deals with the credit of Australia, falls into the same class, and shows in every line and in every feature of it the same lack of consideration and care for national interests. The national credit is to every country a prized and cherished asset, and all legislation before being passed should be examined carefully to see whether there is in it any suggestion of depreciating the credit of the country. The measure before the House, if passed in its present form, will constitute a definite attack upon the credit of Australia. We shall commit a breach of faith with those who have lent us money, and they will be able to make out against Australia a case of actual repudiation. Therefore, I ask the Government to withdraw this legislation, andbring down a measure which will not only avoid all these objectionable features, but also deal efficaciously with the problem with which we are confronted. Surely the Government should be prepared to take action along the lines that I have suggested. {: .speaker-JPV} ##### Mr Blakeley: -- America is doing exactly what we are doing. {: .speaker-C7E} ##### Dr EARLE PAGE: -- It is doing nothing of the sort. This legislation constitutes an actual breach of contract, which would permit of action being taken against Australia. {: .speaker-KZO} ##### Mr Latham: -- Should we follow the example of America? {: .speaker-JPV} ##### Mr Blakeley: -- No, but honorable members opposite continually hold up America as an example to be followed by us. {: .speaker-C7E} ##### Dr EARLE PAGE: -- I am surprised at the Minister's interjection. 1 thought that it would merely be necessary for me to point out the effect of this legislation whereupon the Government would be prepared to redraft the measure so as not to enable that particular charge to lie. I sympathize with the Ministry in its difficulty in connexion with the collection of revenue, but I suggest that there is a method whereby a certain measure of relief could be obtained without this charge being laid against the Commonwealth. During the last six or seven years, ever since the sinking fund has been established, Commonwealth loans have been subscribed to, not merely because of the legislation of this Parliament, but also because of the inclusion of certain statements regarding sinking funds in the prospectuses of every loan. Those statements are so definite that no one could suggest that we should ignore them. In 1928, when we appealed to the people to subscribe to a 5¼ per cent. war conversion and redemption loan, we stated, among other conditions - >In accordance with the requirements of the National Debt Sinking Fund Act 1923-1925 the Treasurer of the Commonwealth will pay into the National Debt Sinking Fund, annually during the currency of this loan, a sinking fund contribution of not less than 10s. in respect of each £100 of the loan. In connexion with the4½ per cent. £8,000,000 loan issued in the United States in 1927, this was stated - >The Commonwealth has established a Sinking Fund for its public debt under the National Debt Sinking Fund Acts, which provide that, during a fifty-year period beginning in 1923, payments from revenue to the Sinking Fund must be made at the rate of not le3S than i per cent. per annum of the amount of the Commonwealth loans outstanding in 1923 and loans subsequently issued, except those raised for the purpose of making local advances which are to be repaid to the Commonwealth and credited to the Sinking Fund. All German reparations received by the Commonwealth and one-half of the net profits of the Commonwealth Bank of Australia must also be paid into the Sinking Fund. I ask honorable members to note the word " also ". All German reparations received by the Commonwealth, and onehalf of the net profits of the Commonwealth Bank of Australia, had also to be paid into the sinking fund. So there is no misunderstanding about that. Then, again, in connexion with the loan of £7,000,000 issued in 1928 in London at 5 per cent., 1945-75, 'this was stated - >All Commonwealth loans carry a sinking fund in accordance with the provisions of the national debt sinking fund acts, which provide *inter alia* that a sum equal to 10s. per cent, shall be provided each financial year. In the case of post office loans the sinking fund is increased to 14 per cent. On a certain portion of the debt incurred for repatriation of ex-service men, no fixed per centage is provided for the sinking fund, because this debt is being repaid by instalments extending over varying periods not exceeding 35 years. These instalments, as received, are paid automatically into the sinking fund; all German reparations and one-half of the profits of the Commonwealth Bank of Australia pass into the same fund. In addition to the money payable to the sinking fund, as above, the Treasurer of the Commonwealth of Australia has authority to apply surplus revenue to redemption of debt, and in the four years ended 30th June, 1927, £7,415,755 of surplus revenue actually was applied to redemption of debt. The total amount applied to redemption of debt from all sources in the same period of four years was approximately £26,000,000. Those clauses were inserted in those agreements for a definite reason, which was to assure the lenders of Great Britain and America that the public debt redemption would be carried out along the lines indicated at that time. The effect of these liberal provisions in regard to the sinking fund was this. Whereas **Mr. Theodore,** when Treasurer of Queensland, had been forced to provide in New York a sinking fund of 1 per cent, in which he had to invest in a certain way each year, and whereas **Mr. Lang** in 1926-27 had also to make similar contributions in regard to the loan floated by him, yet, because of the liberal character of the Commonwealth debt sinking fund, the Commonwealth was in the happy position of not having this obligation placed upon it. The American lending authorities recognized that the pro- vision that we had made was substantially equal to what was required from both New South Wales and Queensland. {: .speaker-KMU} ##### Mr Marks: -- What was the rate charged by America? {: .speaker-C7E} ##### Dr EARLE PAGE: -- As a result of the liberal provisions in our sinking fund acts, we were able to borrow in America at a rate lower than that charged to any other foreign country since the war. That country felt that we had made definite provision, which would not be altered so far as our loans were concerned, and it consequently gave us better treatment than any country off the continent of America in respect of the 5 per cent, loan issued in 1925, and the 4£ per cent, loan issued in 1927. The terms given at that time were actually better than could be obtained in London, although our loans there at that time were trustee securities. {: .speaker-KV8} ##### Mr Stewart: -- Why has 'America since lost confidence in our securities? {: .speaker-C7E} ##### Dr EARLE PAGE: -- I shall deal with that presently. This legislation, if passed by this House, will tend to depreciate still further the value of our securities. The action of the last Government in regard to sinking funds tended to maintain the value of our securities. It was in office for seven years, and during that period the quotations for Commonwealth loans remained almost at the same level as compared with other dominions. From the beginning of 1923 to October 1929, there was a variation of less than 4 per cent, between New Zealand, South African and Australian stocks on the London market. But afterwards, largely as a result of the blow to the belief of foreign investors in the soundness of Australia, when last year the people of Australia refused to take the first step towards national rehabilitation, the credit of Australia was lowered. The Acting Treasurer has informed me that in July the value of Australian stocks in London was 14 per cent., and at other times 20 per cent, lower than in 1929 before the Bruce-Page Government went out of office. To maintain the value of our stocks we must retain the confidence of people overseas; but how is that possible when we attack our sinking funds? Government supporters are continually pressing for lower interest rates. The right way to bring about lower interest rates is to endeavour to pay off our debts at the earliest possible moment by utilizing the services already hypothecated. If we seek to lessen the interest rate, at the same time neglecting to take steps to pay off our debt, we cannot expect anything else but that the rate will be maintained, or even increased. I oppose this measure. I believe that there is a means whereby we can give certain relief to the Consolidated Revenue account without deliberately transgressing the contract which has been entered into with the American and British money lenders. I trust that the Government will accept amendments that will permit of this relief being given. I have not the slightest doubt that the Government desires tq maintain, if possible, Australian credit at the highest stage. One good thing that has emerged from the introduction of this measure is that it has given the Acting Treasurer, a member of a Labour Government, an opportunity to justify the whole of the Bruce-Page financial control of debt during its seven years of office. He has informed us that there has been paid into the sinking fund a sum of no less than £14,000,000 that need not have been paid into it under the original idea of the law. That represents, roughly, £2,000,000 a year. It is obvious that the deficit of £4,950,000 which the Bruce-Page Government left was created as the result of the liberal sinking fund provision which was made during those seven years. If we had taken from the sinking fund what is now suggested there would have been an accumulated surplus of over £9,000,000. It is worth while at this juncture to emphasize what has been done, because if there is anything which is likely to help our credit overseas, or even in Australia, it is to show how consistent this Parliament and the Commonwealth Government have been in trying to manage the debt position in a comprehensive and satisfactory way. Take the Commonwealth debt. In 1922. the public debt of the Commonwealth was £364,839,000. In June, 1929, seven years later, it had increased to £377,621,000, an increase of nearly £12,800,000, averaging, during those seven years, an increase of £1,800,000 a year, and had actually decreased by £6 9s. 5'd. a head by reason of the growth of population. What is more important, the money had been spent in such a way that the taxation burden on the people of Australia for this added debt of nearly £13,000,000 was, actually, less than it was in. 1921-22. On the 25th November, I asked the Acting Treasurer - {: type="1" start="1"} 0. What was the interest payable on 30th June, 1928, and 30th June, 1929 (ti) for the Commonwealth, and (6) for the States? 1. What was the amount available from revenue-producing assets in the years 1927-28 and 192S-29? 2. What were the balances covered by taxation in those years? In reply, the Acting Treasurer furnished a statement showing that in 1921-22 the Commonwealth had to cover the balance of interest by taxation to the extent of £17,106,1S0, and in 1928-29 to the extent of only £16,488,337. In other words, the taxpayers of Australia were, in 192S-29, actually paying £700,000 less interest on money borrowed for the purpose of prosecuting the war and of developing this country than in 1921-22 before the Bruce-Page Government took office. The percentage covered by taxation altered from 94.51 per cent, in 1921-22, to 82.88 per cent, in 1928-29, a difference of roughly 12 per cent. {: .speaker-KXT} ##### Mr Paterson: -- Was that difference accounted for by the revenue received from reproductive works? {: .speaker-C7E} ##### Dr EARLE PAGE: -- There were two reasons for it. First, the borrowed money was spent in such a way that the great bulk of it returned something immediately. Roughly £58,000,000 was spent on public works during the seven-year period, of which £33,000,000 was devoted to the construction of additional telephone, telegraphic and postal facilities and war service homes. This expenditure at once returned 5^ per cent, to the revenue and 1£ per cent, to the sinking fund. Certain other moneys were spent on war service homes, and this expenditure also made an immediate and definite return to the revenue. A large sum was also spent on the South Brisbane to Kyogle railway, with the object of unifying the railway gauges between Brisbane and Sydney. There was no return from this expenditure during the construction period ; but the line has now been opened for two or three months, and will, in my opinion, prove to be one of the best paying railway propositions in the Commonwealth. Steps were also taken by the Bruce-Page Government to ensure that works which would not be immediately revenue producing, such as road works, should be paid for, as far as possible, out of revenue, so that the interest burden on the taxpayers would not be increased. During the last three or four years of the BrucePage regime about £2,000,000 of Commonwealth money was spent on the Federal Aid Roads scheme out of revenue. It was provided that in respect to borrowed money spent on this scheme by the States 3 per cent, should be paid into the sinking fund. The object of this was to induce the States to provide out of revenue as much money as possible that they needed for this purpose. The result of this policy is that the Commonwealth taxpayers are now paying £700,000 per annum less in interest than they were paying seven or eight years ago in so far as their debt is concerned. The second reason why the percentage of interest covered by taxation has been reduced is that the Bruce-Page Government established the national debt sinking fund in 1923, and, as a result of its operations, redeemed £45,000,000 of war debt in the seven-year period. The act under which the fund was set up provided that any source of revenue, such as reparation moneys, which are essentially a return of capital spent on the war, should be paid into the National Debt Sinking Fund. Definite steps were taken to ensure that there should be no tampering with such income. To this end it was also provided that in the prospectus of every loan, provision should be made for the payment of a definite amount into the sinking fund. This was done to ensure that in the years of plenty and high prices we should pay as much as possible off our debt. During the period of which I am speaking, one bale of wool would pay off as much debt as two bales would pay now, one Bushel of wheat as much as two bushels, and three tons of butter as much as four tons. By this means £14,000,000 more was paid off the national debt than was provided for originally by the 10s. per cent, provision. The original plan was to pay off our war debt in 50 years. In 1921 an arrangement was made to pay off our war debt to Great Britain in 35 years. Our internal war debt, at that time, leaving out of account amounts repayable by the States to the Commonwealth - in connexion with soldier land settlement and other schemes - was £250,000,000. It was found that 10s. per cent, of this would yield £1,250,000 per annum, and that if this were compounded our debt would be extinguished in 50 years. In connexion with other debts, such as those incurred in respect of the postal and other public works, it was felt that a 50 years' sinking fund provision would not be satisfactory, because the life of the assets in some cases was not more than 30 years. Provision was, therefore, made to liquidate such debts in 30 years, or in the life-time of th»5 asset created by the expenditure. An additional provision was that an amount equal to 5 per cent, of the total debt actually cancelled each year should also be paid into the fund, so that the actual amount paid off was really compounded. It was hoped, by these means, that we would be able fairly quickly to build up a subtsantial fund. In fact, we are doing so, for the fund grew from £2,500,000 in the first year to £6,000,000 last year. A continuation of this policy for twenty years would build up an annual fund of £20,000,000, which would give the Commonwealth a much greater control of the money market than she could otherwise have. With the backing of a fund like this, the conversion of old loans and the flotation of new loans could be effected on much more favorable terms than otherwise. In the past Australia, as a borrower, has always been in the hands of the lenders; but, with an annual £20,000,000 sinking fund- behind her, she could. even as a borrower, exercise a considerable influence upon the market. The judicious use of such a large sum of money by the Commonwealth and State authorities, through the Loan Council, would be of immense value to the taxpayers, and would enable the council to determine, to some extent at all events. the interest rate which she would pay on new money and on conversions. Anything that hinders the building up of such a fund must necessarily react upon the ability of the Commonwealth, or the Loan Council, to do anything effective to reduce interest rates. The Treasurer, under the existing act, is also obliged to pay into the sinking fund - {: type="a" start="d"} 0. all repayments to the Government of the Commonwealth of loans or advances made out of the Loan Fund - {: type="i" start="i"} 0. to States and to territories under the authority of the Commonwealth? 1. for the erection of wheat silos; 2. under the Nauru Island agreement; and 3. for such purposes as are prescribed; 1. all moneys credited, after the commencement of this act, to the War Service Homes Trust Account in accordance with section thirty-nine of the War Service Homes Act 1918-1920 in respect of purchase money and repayments of advances; 2. all unexpended balances standing to the credit of the Loan Fund which are no longer required ; 3. all moneys received in respect of reparations under the Treaty of Peace with Germany; and 4. all moneys received from the States as Sinking Fund contributions in respect of loans made by the Commonwealth to the States. The object of these provisions is to ensure that such sums shall be paid into the sinking fund as will put Australia into the best possible position to deal with the problem of converting her huge war and other debts in Australia and overseas as they fall due from time to time. It was also provided in the Financial Agreement Validity Act that roughly £1,000,000 should be paid into the sinking fund annually by the Commonwealth towards the redemption of State debts. The control of the national debt sinking fund was placed in the hands of a commission, consisting of the Treasurer of the Commonwealth, the Chief Justice of the High Court, the Governor of the Commonwealth Bank, the Secretary of the Treasury, and the Solicitor-General. It will thus be seen that there is only one politician on the commission. After the various States ratified the financial agreement, provision was made for them to elect a representative on the commission. His period of office was fixed at three years, after which a new election must take place. There can be no doubt whatever that the establishment of a national debt sinking fund has already had an extremely beneficial effect upon our financial position. An examination of the records will show that in 1923, when the fund was established, we were paying about £6 10s. per cent. for our money. At that time there was no co-ordination of Commonwealth and State borrowing. The Loan Council had not been set up, and there were no means whatever of unifying borrowing; but since the establishment of the sinking fund and the Loan Council the position has gradually improved. Our average interest rate has been brought down to just over 5 per cent. in respect of money borrowed in Australia, and just under 5 per cent. in respect of money borrowed overseas, in certain cases. In all the circumstances it is highly regrettable that the Government should seek to do anything to militate against the good effect caused by the establishment of the fund. Anything which lessens the importance of the fund, as the passage of this bill would undoubtedly do, must have a bad effect upon our financial position. Apart altogether from any question of political policy, we should not do anything at this moment to impair our credit. During next year we shall have to convert about £70,000,000 or £80,000,000; and during the next five or six years the Commonwealth and the States will have to convert about £400,000,000. If, by the establishment of a substantial sinking fund, we can reduce our interest rate in respect of this huge amount of money by 1 per cent., or even by½ per cent., as we may well do, it will be of tremendous benefit to the taxpayers. A reduction of the interest rate by only½ per cent. would mean an annual saving of about £2,000,000 in interest alone. The good effect of this would be reflected immediately, not only in the Government accounts, but in all private business, too There can be no doubt whatever that the private interest rate is regulated by the price which governments have to pay for their money. Government securities are the best investments that the people have, and if the Government is able to obtain its money at a reduced rate of interest, undoubtedly the interest rate will fall in respect to other borrowing. If, on the one hand, high rates prevail for government money, high rates will also prevail for overdrafts and other moneys required by private enterprise. In my opinion, an interference with the provisions of the sinking fund at the present moment will have an adverse effect upon interest rates. If, on the other hand, we maintain our present conditions, and are able to bring about a reduction in the price of money for government purposes, money will become available at reduced rates of interest for home building and other business enterprises. It is highly desirable, therefore, that we should do everything possible to reduce the rate at which the people will be prepared to lend money to the Government. It would be disastrous if anything should be done which would make it necessary for us to pay higher interest rates for new money. I again stress the legal aspect of this matter. The lawyers to whom I have shown this contract say that the action proposed in this bill of altering the terms of the sinking fund after the signing of a contract could not be upheld. In the 1927 prospectus there was a definite statement that 10s. per cent, of the loan, together with the German reparation payments received by the Commonwealth, and half the net profits of the Commonwealth Bank would be paid into the sinking fund. {: .speaker-KNP} ##### Mr Maxwell: -- Obviously with the object of inducing subscriptions. {: .speaker-C7E} ##### Dr EARLE PAGE: -- Yes. This encouraged lenders to let us have money at lower rates of interest. From my own experience at the Treasury, I can say that there has been a good deal of discussion on this point. It was actually insisted by the London lenders, in connexion with **Mr. Lang's** loan in 1927, that a sinking fund should be provided in respect of all past loans to be spent in London and that the repayment into the fund in respect of future loans to be raised should be more substantial than in the past. {: .speaker-K7U} ##### Mr Crouch: -- Does the clause regarding reparation payments appear in any prospectus other than that of 1927 ? {: .speaker-C7E} ##### Dr EARLE PAGE: -- A similar clause appeared in the 1925 prospectus regarding additional sums paid into the fund and as to the English prospectus the undertaking with respect to reparation payments could be read into the statement. In the Australian prospectus it is stated that, in accordance with the requirements of the National Debt Sinking Fund Aci 1923-25, the Treasurer of the Commonwealth will pay 10s. per cent, of the loan into the sinking fund. So far as the American, loan is concerned, there is no room for argument on this point. If the files dealing with the matter were consulted, it would be found that we insisted throughout that we were paying much more than 10s. per cent, into the sinking fund. The Bruce-Page Government tried to deal with the repayment of the indebtedness of both the Commonwealth and the States, in order to ensure the improvement of Australian credit. It is the more necessary to deal with the indebtedness of the States than with that of the Commonwealth, because,, as I have shown, during the last seven years the Commonwealth's burden of interest, lias been lightened to the extent of some £700,000 a year, while, unfortunately, in thai period the States have increased their total interest bill. The amount of interest raised by the States by means of taxation was £6,238,824 in 1921-22, compared with £11,505,401 in 1928-29, an increase of £5,266,577 a year. The percentage of interest on State debts covered by taxation was 29.83 in 1921-22, and 33.96 in 1928-29. To enable the indebtedness of the States to be dealt with, the Commonwealth Government, in 1923, suggested that the States should join the Commonwealth in a comprehensive scheme to pay off the whole of the debt in the next 50 years; but the States, although willing to make provision for the redemption of future debts, did not wish to deal in that way with past debts. Accordingly in the agreement that the Commonwealth should borrow on behalf of the States, it was insisted that the States should pay 10s. per cent, into a sinking fund for the gradual extinction of the debts incurred in future. In 1926, however, the Federal Government took up the subject of the past debts of the States, and an offer was made by the Commonwealth that if the Loan Council could be made a constitutional and statutory authority, and the whole of the debts of the States were to be taken over by the Commonwealth, the latter would be prepared to contribute, roughly, one-third of the total amount required to provide a sinking fund for the State debts. That arrangement has been in operation since 1927. Pending the carrying of a constitutional amendment to make the position absolutely permanent, the Commonwealth paid a certain sum each year into a trust fund, and used it for the purpose of liquidating State debts during 1927-28 and 1928-29. In 1929, the people agreed, by referendum, to the validation of the financial agreement, and it is now part of the law of the land. Under that measure, roughly £3,000,000 is provided each year as the State and Federal contribution to the extinction of the State debts. Although £1 13s. 9d. per cent, was contributed to the Commonwealth sinking fund for the extinction of Commonwealth debt proper in 1928-29, the amount provided by the States did not in any degree approach that sum. Taking the Commonwealth and States together, the sinking fund payments totalled about 15s. to 16s. per cent, of the total debt. Allowing for the sum of £1,950,000 now proposed to be taken from the fund, the amount that would be towards sinking funds is roughly 13s. per cent, of the total debt. Those figures are subject to correction, because I must confess my inability to follow the amending bill before the House. Having examined it closely I admit having experienced difficulty in discovering just what is proposed to be done. I do not consider it wise to leave any doubt concerning the sinking fund. The present act is distinguished by its clarity, even a. layman being able to appreciate the meaning of the few terms employed.. The contributions to be made to the sinking fund are clearly set out. An absolute novice in financial matters could understand the measure; but it is impossible to follow the amending bill now before the chamber without studying every amendment made since the passing of the original act and even then its purpose is not very clear. In these circumstances, I urge the Government to re-consider this bill. I am anxious to help Ministers in every possible way, so as to relieve the financial situation, if only temporarily. I think that if the officers of the Treasury went into this matter with the Acting Treasurer from the opposite angle to that from which they have approached it, and, keeping to the spirit and letter of the contract drawn up, they could find a means of relieving, to some degree, the revenue, benefit might result. I should be sorry to see the revenue permanently relieved as provided under this bill. Moneys received by the Commonwealth as contributions to the sinking fund of the nature specified as windfalls as the Acting Treasurer called them, are of a capital nature, and should be paid into the sinking fund. If this fund were steadily increased, we should fairly rapidly bring down the rates charged for public money, and that would have a beneficient influence which would spread throughout the community, and stimulate industry. I trust that the Government will see its way clear to make an amendment in the bill which will place it beyond question that there is not the slightest fear of a breach of contract, and that such a thing is farthest from the thought of the Commonwealth Ministry and Parliament. Whatever happens we must stand to the letter of the contract. If the Government will not do as I suggest in regard to the redemption of future loans, it ought, at least, to deal with past debts, according tq the contract made with the lenders; whatever changes are made should affect future loans only. If the Government will adopt that stand, the act will be simplified. I am opposed to any action of a purely temporary nature. The less we interfere with the sinking fund, except by increasing the sums paid into it, the better it will be for everybody. I hope that the Government will place it beyond doubt that the sinking fund is not to be encroached upon, and that it will be made plain to the world, even though the prices of our exportable commodities become lower than they are at present, that Australia is anxious to pay its debts at the earliest moment and intends to do it. {: #debate-31-s1 .speaker-KZO} ##### Mr LATHAM:
Kooyong .- I thank the Government for permitting the Opposition to speak on this bill. It is most courteous of Ministers to allow members elected to represent the people to say anything upon the business before the House. This afternoon the Government has adopted the procedure of gagging honorable members, to prevent the discussion of matters of which Ministers are ashamed. They have reason to be ashamed of this bill, yet I challenge the Acting Prime Minister and the Acting Treasurer to gag me when speaking to it. Such action, however, would be in line with their procedure this afternoon. We have had a disgraceful exhibition of a Government- {: #debate-31-s2 .speaker-KLL} ##### Mr SPEAKER (Hon Norman Makin: -- The honorable member will not be in order in offering observations on what has occurred in this House this afternoon. {: .speaker-KZO} ##### Mr LATHAM: -- Will you indicate, **Mr. Speaker,** the Standing Order on which that ruling is based ? {: #debate-31-s3 .speaker-10000} ##### Mr SPEAKER: -- All discussion must be relevant to the question before the Chair. I, therefore, ask the Leader of the Opposition to address himself to the second reading of this bill. {: .speaker-KZO} ##### Mr LATHAM: -- The Government is abandoning a procedure which it has practically made customary, in permitting a discussion on the second reading of this bill. The memories of honorable members are sufficiently long, I think, to recall the previous occasions to which I allude. When the Government has been doing something of which it is ashamed, it takes steps to prevent discussion, and I am surprised that it is not attempting to do the same thing now. The Government is becoming so accustomed to applying the gag that it must have bean by a deliberate act of repression that the Acting Prime Minister refrained from moving that " the question be put ", or that " the honorable member be no longer heard ". {: .speaker-JPV} ##### Mr Blakeley: -- The honorable member is wasting the time of Parliament. He has no notes prepared, and he is just filling in time. {: .speaker-10000} ##### Mr SPEAKER: -- The Minister has made an offensive remark, and I ask him to withdraw it. {: .speaker-JPV} ##### Mr Blakeley: -- I withdraw it. He is not ready to speak, and he is wasting time. {: .speaker-10000} ##### Mr SPEAKER: -- The honorable member is aggravating the offence. He must withdraw his statement. {: .speaker-JPV} ##### Mr Blakeley: -- I did not know that that was the remark to which objection was taken. Anyway, I withdraw that also. {: .speaker-KZO} ##### Mr LATHAM: -- This bill is another step in the direction of depreciating the credit of our country. It will inevitably have the effect of lowering the reputation of Australia. The Acting Treasurer played with words when he expressed his indignation because the Opposition described the bill as a raid on the sinking fund. The effect of the bill is that payments into the sinking fund are to be reduced in a specified manner ; but the Acting Treasurer waxed eloquently indignant at the suggestion that this constituted a raid on the sinking fund. What does a raid on the sinking fund mean ? Surely it means that money which would otherwise be appropriated for sinking fund purposes is being diverted to other purposes. I can only think that the Acting Treasurer was hard put to it to find some reason for imputing blame to the Opposition in connexion with a proposal for which the Government alone must accept responsibility. The Acting Treasurer himself had to draw a distinction, though not in clear terms, between this Government and the last. The last Government, if you please, was extravagant because it paid off too much in the way of debts ! We spent millions of pounds in paying off our debts. This Government proposes to cease doing that. If the last Government had adopted the proposals embodied in this bill there need have been no deficits at all. This Government proposes to do two things. It proposes to reduce sinking fund payments by approximately £1,950,000, according to the estimate of the Acting Treasurer, and it proposes also to take into revenue account for the current year a sum of approximately the same amount of money representing interest earned by the proceeds of liquidated enemy properties! It is using to balance its budget money which has been accumulating ever since the year 1914-15. This money is all going in this year, and, in addition, the sinking fund is 'being raided to the extent of almost £2,000,000. I am unable to understand the indignation of the Acting Treasurer, and his objection to the term, "raiding the sinking fund ". I do not know whether it was worked out in Cabinet that there must be some abuse of the Opposition, and that, therefore, the suggestion should be made that the Opposition, by describing this measure as a raid on the sinking fund, was depreciating the credit of Australia. Such a charge is rather infantile. After all, the credit of Australia is affected by the substance of this measure, not by the manner in which it may be described. I cannot help thinking that a good many of those who support the measure are not very particular about the meaning of words, provided they can, in some way, disguise the fact that this really is a raid on the sinking fund. The bill provides that sinking fund payments shall be reduced. It is drawn in a most remarkable manner. It has the effect of striking out paragraph *g* of sub-section 1, of section 9, of the National Debts Sinking Fund Act 1923-29, and also of striking out subsections 2 and 3 of the same section. That is the effect of the measure, and it could easily have been expressed in straightforward language. But the method of drafting adopted is such as to obscure the effect of the bill. I challenge any honorable member to study this bill in conjunction with the original acts for ten minutes, and then to set down just what it means. Why not say straightout that it is proposed to alter the law in such a way that, whereas, formerly, certain moneys were paid into the sinking fund in accordance with the promise given to investors who lent money . to the Commonwealth, it is now proposed to discontinue paying such moneys into the sinking fund in order to avoid political unpopularity. {: .speaker-KNP} ##### Mr Maxwell: -- What a beautiful preamble that would make to a bill ! {: .speaker-JPV} ##### Mr Blakeley: -- The honorable member has only three more minutes to fill in. He is making heavy weather of it, but he will be able to get plenty of matter for his speech during the adjournment. {: .speaker-KZO} ##### Mr LATHAM: -- I do not read my speeches, as does the Minister for Home Affairs, nor do I need to have my speeches written for me as does the Acting Minister for Customs, and other Ministers. We, on this side, never take objection to that, because we recognize the limited capacity of some of the Ministers. The report of the National Debt Commission for the year ending the 30th June, 1930, contains the following paragraph : - >All reparation moneys received under tlie Treaty of Peace with Germany, and one-half of the .net profits of the Commonwealth Bank of Australia and of the Commonwealth Savings Bank of Australia, must be paid into the sinking fund. That is the report of the National Debt Commission, presented pursuant to statute, and ordered to be printed on the 20th November, 1930. Therefore, so recently as the 20th November, 1930, this Parliament issued to the world, to be read by all interested in the financial affairs of Australia, a statement under the authority of the Acting Treasurer of the Commonwealth, the Chief Justice of the High Court, the Governor of the Commonwealth Bank, the Secretary to the Treasury, a representative, of the States, and the Acting Solicitor-General, to the effect that all reparation moneys received under the Treaty of Peace with Germany, and one-half of the net profits of the Commonwealth Bank and of the Commonwealth Savings Bank, must be paid into the sinking fund. *Sitting suspended from 6.15 to 8 p.m.* {: .speaker-KZO} ##### Mr LATHAM: -- This bill proposes to make such statements untrue for the future, because its object is to alter the existing law in order that reparation moneys and Commonwealth Bank profits shall . no longer be paid into the sinking fund. This is a very serious step. The fact has already been clearly pointed out that if the last government had been content to finance in this manner it would have had no deficits. I am glad that it was guilty of the alleged extravagance of paying off debts rather than of humiliating this country in the manner now proposed. The financial proposals of the Government mean that this year, by means of the raid upon the sinking fund and the appropriation of accumulated interest received on the proceeds of enemy properties, £3,900,000 will be available to swell the revenue. Next year the £1,950,000 of accumulated interest in respect of enemy properties will not be available, and accordingly that method of finance cannot be continued. There is a most important matter which honorable members should consider very carefully before they assent to the bill. I take the view that this Government has from the day of its accession to office depreciated the credit and reputation of the Commonwealth, and that this bill is only another contribution to the lowering of the status, credit, and reputation of Australia throughout the world. The loans in respect of which a sinking fund is provided are floated on the basis of prospectuses which are recognized in Commonwealth statutes. The Commonwealth Inscribed Stock Act contains provisions relating to the prospectuses to be issued in respect of Commonwealth loans. The3e constitute the terms of the bargain between the borrower and the subscriber. In recent years the prospectuses have varied. The right honorable member for Cowper **(Dr. Earle Page)** quoted an American prospectus which specifically stated that reparation moneys and half the profits of the Commonwealth Bank would be paid into a sinking fund. I have others here to which I invite the attention of honorable members. A prospectus for a 6 per cent. conversion and redemption loan was issued by the present government on the 3rd February last. Under the heading " General conditions " clause 17 says : - >Sinking fund contributions will be paid into the national debt sinking fund annually during the currency of this loan in accordance with the requirements of Commonwealth law. Any person who refers to Commonwealth law to ascertain what those requirements are will immediately discover the National Debt Sinking Fund Act 1923-29, which contains definite provision that the reparation moneys and half the profits of the Commonwealth Bank shall be paid into the sinking fund. {: .speaker-K0A} ##### Mr Gabb: -- Does that shut out an amendment of the law? {: .speaker-KZO} ##### Mr LATHAM: -- The prospectus contains the terms of a contract between the lender and the borrower that the moneys mentioned will be paid into the sinking fund. Alternatively, the statement is a mere fraud upon the public and the investor. If it means that the Parliament of the Commonwealth holds itself free to amend the law from time to time as it thinks proper obviously the statement is worth nothing. Its true meaning is that the contributions to the sinking fund required by Commonwealth statute will be continued. The various classes of payments are arranged under headings running from *a* to *h,* and to them was added subsequently sub-section 2, which prescribes another source of contributions to the fund. All those payments are on an equality. It is futile for the Acting Treasurer to try to make out a case for the bill by referring to the original intention of Parliament to provide merely for a 10s. per cent. sinking fund in respect of ordinary loans and a 30s. per cent. sinking fund in respect of loans for the Postal Department. No distinction can be drawn between the different provisions in the National Debt Sinking Fund Act. I refer the House to another prospectus issued by the Commonwealth Bank in London for a loan closing on the 24th May, 1929, which invited holders of certain Commonwealth stock to convert into 5 per cent. registered stock, to be issued at £97 per cent. and mature in 1945-1975. The clause relating to the sinking fund stated - >All Commonwealth loans carry a sinking fund in accordance with the provision of the National Debt Sinking Fund Acts. That is an express reference to the Commonwealth statutes which contain these provisions, and I repeat that no distinction can be drawn between one provision and another, or between one act and an amending act, or between one amending act and another amending act. {: .speaker-009FQ} ##### Mr Curtin: -- Does the honorable member contend that the implication is that the National Debt Sinking Fund Acts shall not be varied during the currency of the loan? {: .speaker-KZO} ##### Mr LATHAM: -- The statement certainly means that there shall not be an alteration to the prejudice of the bondholder; otherwise it is worthless. No security is offered if it means that the sinking fund may be reduced or abolished whenever Parliament thinks proper. {: .speaker-KNP} ##### Mr Maxwell: -- The prospectus binds the people of the Commonwealth. {: .speaker-KZO} ##### Mr LATHAM: -- It does, and I propose to say something later about its legal aspect. In principle no distinction can be drawn between a reduction and the abolition of the sinking fund. Either is a variation of the contract, a refusal to abide by the terms which were offered when subscriptions to the loan were invited. Another prospectus issued on the 16th January, 1929, in respect of an £S,000,000 loan at 5 per cent., contained this statement - >All Commonwealth loans carry a sinking fund in accordance with the provisions of the National Debt Sinking Fund Acts, which provide, *inter alia,* that a sum equal to 10s. per cent, shall be provided each' financial year. This bill proposes to strike out some of the " other things " provided for by the National Debt Sinking Fund Acts. The prospectus expressly directs the attention of the investor to the legal provision that more than 10s. per cent, must be paid into the sinking fund. The examples I have quoted may be added to those to which the right honorable member for Cowper **(Dr. Earle Page)** referred. I turn now to the prospectus of the current loan, to which honorable members, in common with the public, are invited to contribute, and which we hope will be fully subscribed by the 15th of this month. {: .speaker-K7U} ##### Mr Crouch: -- The honorable member is doing his best to prevent that. {: .speaker-KZO} ##### Mr LATHAM: -- The honorable member need not think that the facts to which I have referred are not known. The Government cannot bury its head in the sand ; it cannot alter the sinking fund without investors, stock exchanges, brokers, and bankers being aware of what is happening. I am asking the Government to refrain from doing something that must inevitably react to the grave discredit of Australia. The prospectus of the current loan states - >Sinking fund contributions will be paid into the national debt sinking fund in accordance with tlie requirements of Commonwealth law. If to that were added this foot-note - >It is to be understood that the Commonwealth Parliament will reduce or abolish the sinking fund whenever the Government needs more money, would anybody pay any regard to that condition? The prospectus constitutes the contract between the subscriber and the people of Australia. It is true that we may vary the terms of that contract with our own people. If this bill is passed Australians will have no right to require that contributions to the sinking fund shall continue in . accordance with the terms of the contract made with them, because this Parliament has power to legislate to nullify or repudiate a contract of loan made in Australia between the Government and citizens of this country. But has the Government considered its legal position in relation to overseas subscribers? When a loan is floated in New York or London the contract is made in America or the United Kingdom, and therefore is not within the legislative power of this Parliament. I ask the Acting Treasurer to consult with the Crown Law Department regarding the authorities which I propose to cite. The first case to which I shall refer is that of *Spiller* v. *Turner,* - 1 *Chancery,* 911. I am referring to cases in connexion with which considerations of Australian law have been raised. The first case - *Spiller* v. *Turner* - occurred before federation, being heard in the year 1897 ; the second case was heard in the year 1927. In the case of *Spiller v.* *Turner ,* what happened was this: An English company, carrying on business in Queensland; passed resolutions under which preference shareholders became entitled to a certain dividend. The Queensland legislature passed an Income Tax Act which provided that income tax should be imposed on all dividends or interest received 'by shareholders out of assets in the colony, and it was enacted that the amount due by the shareholder should be a debt due to the Crown. It was held by a judge of the Chancery division that, as the contract between the preference and ordinary stockholders was an English contract, the rights under it of preference stockholders not domiciled in the colony were not affected by the colonial act, and that they were, therefore, entitled to their 6 per cent, without any deduction in respect of colonial duties, That is to say, a contract made in England between an English company carrying on business in Australia, and persons in England, was an English contract, and beyond the reach of the Queensland legislature. The provisions of the Queensland Income Tax Act providing that a certain amount might be deducted from the dividend was held to be ineffective in relation to the rights of those shareholders in the company. Now I come to the second case, the latest, I believe, on this subject. It is that of the *London and South America Investment Trust Limited* v. *the British Tobacco Company.* The English Trust Investment Company held shares in an English company - :the British Tobacco Company - carrying on business in Australia. The Commonwealth Income Tax Act, passed by this Parliament, provided that deductions could be made by the company for income tax on dividends payable to absentees; but as the debt arose under an English contract, and was an English debt, the judge said - > >I do not think that it is property in respect of which the Commonwealth legislature has power to impose taxation upon the plaintiff company, or that it is property the incidence of which may be altered by the Commonwealth legislature. Although those cases affect this question only from the point of view of taxation, the principle is this, that where a contract is made abroad, even though it be made with a company doing business in Australia, and subject to Australian law, so far as Australian execution can reach its assets, that contract cannot be varied by this legislature. In the case of a contract between the Commonwealth of Australia and stockholders in New York, upon the terms of the prospectus which the right honorable member for Cowper **(Dr. Earle Page)** read, or in the case of a contract made in London between stockholders or subscribers to loans and the Commonwealth, upon the terms of the prospectus which I have read, we have contracts made outside Australia, and if litigation were instituted in New York or in Great Britain, the Australian law purporting to vary the terms of those contracts might be held to be ineffective. That being so, what are we doing by this legislation ? "We are depriving our own people of the benefits of the sinking fund provision ! If action were taken against us by people abroad, probably there would be difficulties of procedure in serving process upon the Commonwealth, but it would be a poor thing for this country to take refuge behind such a defence. Subject to difficulties of procedure in serving the Commonwealth, there appears to be little doubt that if proceedings were taken in New York or London, judgment would be given against the Commonwealth, in accordance with the terms of the contract, notwithstanding any legislation passed by this Parliament. If the Commonwealth makes contracts with persons in other countries, it must submit to the laws of those countries. That has been held in the two cases to which I have referred, which are well known authorities in company and income tax law. The subscribers in London and New York would be, respectively, English and American citizens, and, therefore, the contracts made with them abroad are beyond the reach of this legislature - contracts made upon the faith of the natural and unambiguous meaning of the words of the prospectus. {: .speaker-A48} ##### Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP -- Many investors do not even know that there is a sinking fund. {: .speaker-KZO} ##### Mr LATHAM: -- I am astonished to hear the honorable member make that interjection, and I am sure that he does not realize its significance or effect. If he did, he would be glad to withdraw it. {: .speaker-A48} ##### Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP -- It is a fact. , {: .speaker-KZO} ##### Mr LATHAM: -- It is a fact which is completely and perfectly irrelevant. Most subscribers to a loan subscribe through brokers and bankers, who know perfectly well the terms of the prospectus. Lenders subscribe on some terms, and are there any other terms than those of the prospectus? There are no other terms whatever. {: .speaker-A48} ##### Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP -- A prospectus is not a contract. {: .speaker-KZO} ##### Mr LATHAM: -- I refer the honorable member to the terms of the Commonwealth Inscribed Stock Act, in order that he may inform his mind as to whether a prospectus constitutes the terms of a contract. The honorable member might also with advantage read a case in which the question arose as to the power of Queensland to tax Commonwealth loans. That power was excluded because the prospectus excluded it. That is the first case reported in the 29th volume of the Commonwealth Law Reports. There is no doubt that the terms of a prospectus are the terms of a contract. What is the meaning of a prospectus? Holders of Commonwealth 6 per cent., inscribed stock and treasury bonds maturing on the 15th December, 1930, are invited to convert their holdings or part thereof, &c. The terms are set out as to cash subscriptions, and then there appear the general conditions of loan. It is under that heading that the provision as to the sinking fund appears. I am astonished that any one can suggest that the terms of a prospectus are irrelevant, and can be overridden at pleasure. I appeal to the Acting Treasurer to reconsider this legislation. I am not prepared to face him with the direct authority of a case in which a country has sought, after money has been subscribed on the faith of a prospectus, to repudiate or vary the terms of that prospectus. I do not know that such a case has happened, except in respect of Mexico, Turkey and some South American and Central American States. So far as I know litigation has never arisen in our courts upon any such issue; but the authorities to which I have referred 3how that these contracts are valid, that it is not within the power of this Parliament to vary them, and it would be a poor thing on the part of this Parliament to try to vary them. I ask the Government to give consideration in this matter in the interest of the credit and reputation of the Commonwealth. It has dragged the flag of the Commonwealth in the dust and mud; hut I appeal to it in this instance to make some attempt to follow the lines of fair dealing with our own and other people. {: #debate-31-s4 .speaker-KYZ} ##### Mr RIORDAN:
Kennedy .- The Leader of the Opposition **(Mr. Latham)** has accused this party of dragging the flag of the Commonwealth in the mud. The Labour, party is an Australian party, and as such is profoundly interested in the development of this Commonwealth, and not only of any section of this Commonwealth. I listened attentively to the speech of the Leader of the Opposition, and I was astonished at the political bias, prejudice, and spleen which he- and the Leader of the Country party **(Dr. Page)** displayed merely for purposes of political propaganda. The right honorable member for Cowper based his case in regard to loans on false premises. The statement of the Leader of the Opposition that this Government has dragged the flag of the Commonwealth in the mud is objectionable to me as a member of the Labour party. The propaganda of the Opposition and of the Opposition press has been of a kind to drag the flag of the Commonwealth in the mud. Although they appeal for a non-party spirit their propaganda during the last three weeks has been to gain a political advantage against this party. This party has no intention of dishonouring its obligation under contracts entered into by the previous Government. The mass of the people whom we represent is just as honest as those whom honorable members opposite represent. The working class is the backbone of this country. That has frequently been stated even by honorable members opposite. "We, on this side, represent the mass of the people, and we have no desire to dishonour any of our loan obligations. I take exception to the statement of the right honorable member for Cowper that when he was Treasurer the Commonwealth obtained better treatment in respect of oversea loans than did **Mr. Lang** of New South "Wales and **Mr. Theodore** when Premier of Queensland, who were compelled to provide a sinking fund of 1 per cent. Let me tell the right honorable member for Cowper that the Theodore Government not only pioneered the American market, but did it to the distinct advantage of Queensland. In 1922, when the Commonwealth Government was paying 6£ per cent, for money in London, the Queensland Government raised money in America at a cost to Queensland of 5£ per cent. net. In 1923-24, the right honorable member for Cowper, as Treasurer of the Commonwealth, raised a loan in Australia of £16,9S'7,594, at 6 per cent., or per cent, more than the Queensland Government had paid for its American money the previous year. The right honorable member said this afternoon that he obtained money in 1921-22 for 4 per cent.; but I can see no record whatever of this transaction in the official documents. A loan of £5,000,000 was raised in London at that time at 6 per cent., plus discount. In all the circumstances, the Leader of the Opposition made a scurrilous attack upon the Labour party this afternoon when he accused it of having dragged the flag of Australia in the mud. Even Nationalist newspapers are to-day charging the Opposition with " giggling in an inane fashion at a Government which is at least trying to do something." It has been said that the left wing of the Labour party queered the pitch of the Prime Minister in England, while he was trying to raise money for Australia. It was not the Prime Minister, the elected representative of the people of Australia, but the ex-Prime Minister, the rejected of the people, who queered our pitch. On the very day that the ex-Prime Minister arrived in England the price of Commonwealth stocks on the London market fell, and not by accident, but by design. The members of the Opposition cannot deny the truth of my statement. The right honorable member for Cowper **(Dr. Page)** was quite inaccurate this afternoon when he said that the Queensland Government was compelled to establish a sinking fund in connexion with its American loans. I was astonished to hear the- right honorable member make such a statement, for I did not expect him to put the position unfairly. His speech this afternoon has done a great deal to lower him in my estimation. I invite the right honorable member, and also the honorable member for Gippsland **(Mr. Paterson),** who is interjecting, to show me, in the official returns, a record of the BrucePage Government having obtained money in London in 1922 for 4£ per cent. {: .speaker-KNP} ##### Mr Maxwell: -- What has all this to do with the question whether the provisions of this bill constitute a breach of contract with bondholders ? {: .speaker-KYZ} ##### Mr RIORDAN: -- The honorable member for Fawkner **(Mr. Maxwell)** is capable of judging the merits of a case. I have put the position in regard to Queensland's financial transactions on the American money market, and I have invited the right honorable member for Cowper to indicate clearly which loan he was responsible for obtaining in London about that period for 4£ per cent. I leave the honorable member for Fawkner to judge between us. The honorable member for Gippsland may, if he can, direct my attention to the official records in connexion with this alleged 4-J per cent, loan which was raised at the time when the Government was actually paying 6 per cent, for money. I leave the matter there. {: #debate-31-s5 .speaker-KXT} ##### Mr PATERSON:
Gippsland -- I wish, first, to direct the attention of honorable members to certain statements made by the Acting Treasurer **(Mr. Lyons)** in introducing this bill. The honorable gentleman said that in the seven years after the passage of the National Debt Sinking Fund Bill, that is, from 1923 practically to date, we have paid £14,000,000 more off our national debt than we need have paid to conform with the standard of debt reduction agreed to by the Commonwealth and the States in 1927. Instead of paying this large sum off the national debt, the Bruce-Page Government, had it so desired, could have retained possession of this money and still have given effect to a reasonable debt reduction policy. The speech of the Acting Treasurer indicated, to put it in another way, that the previous Government provided £43,750,000 for debt extinction when it. need have provided only £29,750,000, to effect debt reduction on a scale similar to that laid down in the agreement made between the Commonwealth and the States. Honorable members opposite have lost no' opportunity of condemning the finance policy of the previous Government.' They have said that, although the country was passing through prosperous times during the regime of that Administration, it failed to husband its resources. But these reckless charges have been effectively answered by their own Acting Treasurer. That honorable gentleman showed conclusively that the previous Government did a great deal more in regard to debt reduction than could reasonably have been expected of it. This substantial amount was paid off the national debt, not only during good years, but also during bad years. In the two concluding years of the Bruce-Page Administration deficits were experienced which totalled nearly £5,000,000, but in that period £12,000,000 was paid off the national debt. Had the previous Government been satisfied with the standard which the present Government is now seeking to adopt, it could have shown substantial surpluses throughout the whole of the period in which it was in occupation of the treasury bench. I hope, therefore, that in the future, when honorable members opposite feel inclined to condemn what they call the financial follies of the previous Government, they will bear in mind that the Acting Treasurer corrected this view on Friday when he declared that our debts had been redeemed on such a generous scale during the last seven years. Let me remind honorable members opposite of one of the effects of the National Debt Sinking Fund Act of 1923 and the subsequent amending acts. This legislation, during the seven years in which it has been in operation enabled us to reduce the Commonwealth debt *per capita* by £6 12s. 5d. That is not commonly known, and is ignored by our financial critics. At the 30th June, 1922, prior to the passing of the Sinking Fund Act by the late Government, the Commonwealth national debt, as distinct from State debt, stood at £66 4s. 3d. per head of the population, and it was reduced by the 30th June, 1930, to £59 lis. lOd." per head - a reduction of £6 12s. 5d. per head. That was accomplished at a time when the State debts increased by some £21 per head. What are the sinking fund obligations Under the present law? We have to find 10s. per cent, on debt existing prior to the passage of the legislation of 1923, and .that is provided by means of a fixed annual payment of £1,250,000 to the sinking fund. That amounts to onehalf per cent, on £250,000,000, which was found to be the net Commonwealth debt at that time. In addition to that, we have to provide 10s. per cent, on all Commonwealth debt contracted after the date of the passage of the act of 1923, as well as 5 -per cent, interest on bonds which have been redeemed and cancelled by the National Debt Commission. This 5 per cent, is paid to the commission in order that it shall lose nothing by redemptions and cancellations, and so that the compounding results shall not be interfered with. The legislation also requires us to find £1 per cent, in addition to the ordinary 10s. per cent, on such part of the debt as relates to the post office, making a total of 30s. per cent, on all post office loans. Further than that, there is the more recent obligation entered into between this Parliament and the State Parliaments in 1927, by which the Commonwealth assists the States in providing the sinking fund for their debts, the Commonwealth paying 2s. 6d. and the States 5s. per cent, on old debt, and on all new debts contracted by the States subsequent to the agreement, the Commonwealth advancing 5s. and the States 5s. per cent. That assistance to the States costs the Commonwealth, in round figures, £1,000,000 per annum. Then there are further obligations, which include the payment into the public sinking fund of half the profits of the Commonwealth Bank, which amounted last year to £363,000. We also undertake to pay into the national sinking fund all the money received under the Treaty of Peace with Germany for reparations, which last year amounted to £878,000. Half the profits of the Commonwealth Bank, plus the German reparation payments, together amounted to £1,241,000 last year. The Acting Treasurer wishes to reduce the sinking fund commitments by £1,950,000, so there is a gap to be breached of about £700,000, and one is naturally interested to know from what source that money is to be obtained. The Acting Treasurer mentioned in his budget speech the amount of the reparations and of the half profits of the Commonwealth Bank, and in a very general way he referred to other excess payments. One big obligation of the Commonwealth to the National Debt Commission is the payment, to which I have already alluded, of 5 per cent, of the amount of debt which has been redeemed and cancelled by that body. Last year the amount of interest paid on cancellations was £815,000. So far as I can understand the complicated verbiage employed in the bill, it seems to me that the main item which the Acting Treasurer has in his mind when he speaks of "other excess payments," is the 5 per cent, interest on cancellations. The Acting Treasurer, it appears, proposes to withhold so much of that 5 per cent, as applies to the cancellations over and above the amount that would have been cancelled if the new proposals of the Government had had effect since 1923. That is the only theory that I can advance. I do not wish to say anything to-night in an endeavour to secure a party political advantage. If one desired to do that, one could find many points on which to attack the Government in connexion with this measure ; but I realize how desirable it is that restraint should be exercised in the criticism of this bill, in view of the necessity for the restoration of confidence and credit. Therefore, I shall contine my criticism to the one point that stands out above all others, and which has been strongly put by the right honorable member for Cowper **(Dr. Page)** and the Leader of the Opposition **(Mr. Latham).** This is that if the bill is carried it will amount to a definite breaking of the conditions under which we have borrowed money from the United States of America and Great Britain, and from investors in Australia. I do not say for a moment that the reduced amount proposed to be put into the fund under this bill is inadequate for the purposes of a sinking fund. I believe that the bare 10s. per cent, on ordinary loans and 30s. per cent, on post office loans, plus the 5 per cent, on cancellations, really form the basis of a sound sinking fund, although it is a much smaller provision than that made by the late Government; but the admission of that does not in any way brush aside the grave charge that the amendments proposed by the Government, if carried, would constitute a breach of the contract under which we have to obtain money from investors in Britain, the United States of America and Australia. It is one thing to claim that a sinking fund, which simply came up to the standard of the agreement arrived at between the Commonwealth and the States, is quite satisfactory, and it is entirely another thing to say that the Government has the right to put that kind of fund into operation after having borrowed money on the condition that some other and more generous sinking fund would be continued. Part of the American loan prospectus relating to the sinking fund has been quoted by the right honorable member for Cowper and the Leader of the Opposition, and it is most specific. The various items making up the present generous sinking fund are all referred to ; we borrowed money on the basis of that sinking fund, and we must honour the contract that we have made. The mere fact pointed out to the Government that there is a binding contract will surely be sufficient to induce it to amend the bill. There are three alternatives open to us as honorable men. The simplest, of course, is to leave the existing legislation as it is. Secondly, if the Government still proposes to amend the act on the lines of the bill, the changes it proposes to make should apply only to new loans raised from now onwards, and we must exclude from the effect of the proposed legislation all loans which have been obtained under the old conditions, and on the prospectus of which appeared our undertaking to redeem the money in accordance with the law as it stands. The new loan prospectus, which I have in my hand, merely states that sinking fund contributions will be paid into the national debt sinking fund in accordance with the requirements of Commonwealth law. This prospectus does not enter into details as in the case of former loans, some of quite recent date. Then there is the third alternative, which was foreshadowed, at any rate, by the right honorable member for Cowper this afternoon. Among other things, he said that it would be possible for the Government to make a saving, certainly nothing like the sum of £1,950,000 proposed to be secured by this legislation, but a substantial saving, without committing any breach of contract, either in the spirit or in the letter. The right honorable member for Cowper **(Dr. Earle Page)** foreshadowed certain amendments which the Government would do well to accept. The Government must follow one of the three courses outlined. We cannot repudiate any obligation into which we have entered. We must leave the law as it stands; or we must, if we amend it, make the amendment have no application to loans raised under conditions laid down in the law as it stood ; or we must consider some method by which certain substantial savings can be made without committing a breach of contract, either in spirit or -letter. The honorable member for Kennedy **(Mr. Riordan)** referred to the 5£ per cent, loan raised by Queensland in the United States of America, and he seemed to be under the impression that that loan had a great deal to do with the subject under discussion to-night. Personally, I fail to see the connexion. The Auditor-General of Queensland, whose authority must be recognized, said that that 5£ per cent. loan raised by a former Queensland Government really worked out at6½ per cent., because the stock was sold at a long way below par. I quote the AuditorGeneral as follows: - >The total scrip issued under the two American loans was 22,000,000 dollars, or at par (4.860) £4,521,167. The profit on conversion amounted to £714,800, and expenses and discounts totalled £284,177. The net proceeds therefore amounted to £4,951,799. > >Interest on these loans for the year ended 30th June, 1924, was £295,930 18s. 8d., and the cost of transmitting the larger portion of same from London to New York was £27,134 18s. 9d., giving a total of £323,065 17s. 5d. > >Taking into consideration - > >The profit on conversion; > >The flotation expenses, charges, and discounts ; > >Exchange and interest payments; the effective interest charge per £100 to the State on these loans for the year ended 30th June, 1924, was approximately £6 10s. 5d. The honorable member for Kennedy was also concerned to know where the last Commonwealth Government succeeded in raising a loan at4½ per cent. The answer is that it was raised in 1927 in New York. {: #debate-31-s6 .speaker-009FQ} ##### Mr CURTIN:
Fremantle .-I am moved to speak on this bill because of the criticism which has been levelled against it by honorable members opposite. To begin with, this measure involves no fundamental breach of contract- {: .speaker-KXT} ##### Mr Paterson: -- No fundamental breach? {: .speaker-009FQ} ##### Mr CURTIN: -- I see no breach of contract, either in letter or in spirit, in the legislation before us. The purpose of the Sinking Fund Act, as I understand it, is to provide means for the redemption at the end of definite periods of the war debt, certain other debts, and the post office debt. The original act, as the Acting Treasurer **(Mr. Lyons)** pointed out, provided that the sinking fund should be employed to redeem the post office debt at the end of 30 years, and to redeem the war debt and other debts at the end of 50 years from the date of the application of the act. This bill, which provides for a relief to the revenue for this year, does not in any way vary the periods specified in the original act for the redemption of debts. Therefore, the security of investors who have lent us money in respect either of the war debt or of other debts is in no way impaired. The solvency of. the sinking fund is not threatened, and there is no reason why the fund should not be equal, at the end of the specified period, to the redemption of the debts in respect of which it was created. "What honorable members seem to object to is that there should be any variation of the financial provisions passed by the last Government. They think that its legislation should be sacrosanct. {: .speaker-KXT} ##### Mr Paterson: -- There is no reason why this . Government should not alter legislation, but it should stick to contracts. {: .speaker-009FQ} ##### Mr CURTIN: -- We are sticking to the contract. There will be no variation of the undertaking we gave that sufficient sums would be paid to the National DebtCommission for the redemption of the war and other debts at the end of 50 years, and of the post office debt at the end of 30 years. What do honorable members complain of then? They say that a prospectus was issued intimating that the debts I have mentioned would be redeemed earlier than the dates specified. That, however, did not give the investors the right to demand their money before the time specified in their bonds. {: .speaker-KV8} ##### Mr Stewart: -- It has been suggested from this side that the Government's action may affect, in some degree, the security of investors. {: .speaker-009FQ} ##### Mr CURTIN: -- That is arguable. I venture the opinion that, having regard to the operations of the National Debt Commission, there is more danger to the security of investors from undue taxation than from possible variations of the provisions in respect to the sinking fund. The Leader of the Opposition, rather unnecessarily, I think, remarked that, from the day that this Government came into power, it has depreciated the credit of Australia. He proceeded to blame this Government for all the ills which have overtaken the country. The other day I stated that this attack upon the credit of Australia had commenced long before the advent of the present Government, and I propose now to show that if there has been any impairment of our credit, it is due, not to any legislation sponsored by this Government, but to a variety of factors that were incubated during the administration of our predecessors. In 1926 the Imperial Conference had dedicated to it a criticism of Australian financial conditions, and the authors, Messrs. Sidney Russell Cooke and E. H. Davenport, have, this to say - >In the whole British Empire there is no more voracious borrower than the Australian Commonwealth. Loan follows loan with disconcerting frequency. It may bc 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. They went on to make it clear that at that time there existed factors in connexion with Australia's financial position which warranted disquietude on the part of overseas investors. It is not the publication of that document which is of importance, but whether or not the conditions described in it actually existed. No one who has studied the history of Australian affairs during the last five years can fail to recognize that, so far back as 1926, it was apparent to those who were closely examining the fabric of our economic structure, that our credit was then causing grave uneasiness. Last year there was held in Canberra a conference of Commonwealth and State Ministers, and on the 28th May .the then Prime Minister, **Mr. S.** M. Bruce, addressed that conference on the subject of balancing the budget. The provisions contained in the bill now before us are intended to relieve the revenues of the Commonwealth so as to make it possible at least to approximate to budget equilibrium this year. **Mr. Bruce** deliberately told the conference in 1929 that it was impossible to balance the budget. In the course of his speech he said - >Expenditure can and must be reduced by the elimination of waste, and by the exclusion of unnecessary expenditure. The maximum reductions, however, which could possibly be effected by the most stringent economy would not be sufficient to balance the ledger, unless we are prepared to repudiate solemn . obligations into which we have entered, such as the payment of soldiers' pensions - which is unthinkable - or to withdraw services or social benefits which have been provided by governments in the past. Such a withdrawal would ' be a retrograde step, such as should be taken only in the face of dire necessity, and when no other remedy is available. I invite the Leader of the Opposition, who has on several occasions during dis- cussions on financial measures brought down by this Government, chided the Ministry with failure to balance the budget, to indicate what criticism he has to offer concerning the considered opinion of his late leader upon the subject of balancing budgets. **Mr. Bruce** was not addressing a popular assembly, but was engaged in what might be called a business consultation with the leaders of the State Governments in an endeavour to prevent the drift which was apparent in Australia's finances, and in the course of those discussions he deliberately stated that it was impossible to balance the ledger. {: .speaker-KFE} ##### Mr Gregory: -- Unless economy was practised. Read it all. {: .speaker-009FQ} ##### Mr CURTIN: -- The quotation I have made is most germane to the consideration of the finances of the Commonwealth at this juncture, especially having regard to the fact that, like a dog worrying a bone, honorable members of the Opposition seize upon any measure introduced by the Acting Treasurer ; they offer no constructive criticism, but merely endeavour to tear the proposal to pieces. They speak as though this bill would be the last straw to be loaded upon the camel's back of Australian security and credit, whereas it proposes nothing that would be detrimental to the capacity of the National Debt Commission to discharge its trust. The principal resources available to that body are, of course, the funds made available out of ordinary revenue. In addition, the former Treasurer gave to the Commission £7,415,000 from surplus revenue, while at the same time incurring new debts and increasing taxation. {: .speaker-KXT} ##### Mr Paterson: -- He reduced the national debt by nearly £7 per head. {: .speaker-009FQ} ##### Mr CURTIN: -- The right honorable member for Cowper, while Treasurer, increased the taxation from £49,678,842 in 1922, to £56,303,489 in 1929. In the same period his total revenue from all sources jumped from £64,897,046 to £78,984,551, and the expenditure from Consolidated Revenue rose from £57,861,511 to £81,343,526. The total taxation advanced by £6,750,000, the total revenue by over £14,000,000, and the expenditure by £23,482,000. Having regard to those figures, it is not surprising that the Deputy Leader of the Opposition **(Mr. Gullett)** described the right honorable member for Cowper as the most tragic Treasurer in Australian history. Honorable members opposite pride themselves on having made an additional contribution of £7,415,000 to the sinking fund. The Auditor-General had something to say on that subject. The Treasury and the Auditor-General presented the accounts differently, and there is a discrepancy between the two. I understand that there is a reason for that which reflects no discredit on either party, and I am not prepared to say that the form adopted by the Treasury was inaccurate or misleading. I accept the figures as they are, and they show that the total of the surpluses on revenue account from 1921-22 to 1929-30 inclusive, is £4,073,000, whilst the deficiencies total £16,939,000. This explains the statement of the right honorable member for North Sydney **(Mr. Hughes)** on one occasion, that the right honorable member for Cowper inherited accumulated surpluses of *£7,000,000,* and when he vacated office bequeathed to his successor an accumulated deficit of practically £5,000,000. {: .speaker-KZO} ##### Mr Latham: -- After paying off £45,000,000 of the public debt. {: .speaker-009FQ} ##### Mr CURTIN: -- And incurring a substantial amount of new debt. Whatever use honorable members opposite may attempt to make of the statistics available regarding the finances of the Commonwealth and past surpluses and deficits, the fact remains that, if the financial administration of the last Government had been as capable and effective as those honorable members claim, the finances of the Commonwealth would have been in better heart on the day they left office than they were on the date when they first assumed control of the Treasury. If the 'right honorable member for Cowper was the heaven-sent financier that he now pretends to have been, the finances would certainly have shown an improvement during his stewardship. But we know that the fact was far otherwise, and the former Prime Minister, **Mr. Bruce,** in addressing the State Premiers in May, 1929, confessed that it was impossible to balance the Commonwealth ledger without repudiating solemn obligations. Apparently the Leader of the Opposition thinks that the only solemn and sacred covenant in this civilization is that made with the investor. All others, involving social obligations and the rights of humanity at large, are variable from time to time; but when a measure is introduced which varies to some extent the relations of the investor with the nation, in order to restore financial equilibrium and maintain equity as between the investor and the nation, the honorable gentleman becomes incensed. In the *Political Science Quarterly* of September, 1930, **Sir Josiah** Stamp discusses Clemenceau's bitterness concerning the Young plan for the variation of the German reparations payments. The arguments used by Clemenceau were very similar to those used by the Leader of the Opposition. He regarded the Treaty of Versailles as; a rigid contract, and demanded that it should be carried out to the letter. **Sir Josiah** Stamp said that Clemenceau never realized the difference in the real values represented by the marks and francs about which he was talking, and continued - >The truth of the matter is that the more you talk in fixed terms of money, the more you are concealing the fluctuating total of human effort that lies behind, and these late months have shown us that every month the position of debtors of all kinds has become more and more onerous, and the position of those who have borrowed on debentures and the like, more difficult. That quotation is particularly applicable to the arguments advanced by the Leader of the Opposition and the honorable member for Gippsland **(Mr. Paterson).** The bill takes cognizance of the altered financial position. The Government realizes that to equip the National Debt Commission with resources which would enable it to redeem the post office debt in less than 30 years, would be to impo.se an undue hardship on the taxpayers without improving the security of the bondholders by one iota. The national revenues to-day are in such a depressed state that to attempt to redeem the war and other debts of the nation in less than 50 years would be to impose on the present generation an intolerable strain, the cumulative effect of which would be that economic debilitation of the nation which the Leader of the Opposition pro:fesses to dread. The bill is an honest attempt to help the country practically to carry out the obligations into which it has entered. The Leader of the Opposition while straining at a gnat would swallow a camel. He expects all the resources that were available to the National Debt Commission one year or two years ago, to be still available, although in speech after speech in this chamber he has indicated the impossibility of the nation maintaining its expenditure on anything like the scale of two years ago. If honorable members opposite contend that it is impossible to maintain the Public Service rates of pay, and to continue public expenditure at the rate of two years ago, how can they justify their contention that the provisions relating to the appropriation of revenue for the use of the National Debt Commission shall not be varied to the extent of one shilling? {: .speaker-KNP} ##### Mr Maxwell: -- Does the honorable member contend that one party to a contract has the right to vary its terms? {: .speaker-009FQ} ##### Mr CURTIN: -- I do not; and this bill does not propose any variation in the essence of the contract, which is that the debt of the Postal Department shall be redeemed within 30 years from the date of the establishment of the sinking fund and the war and other debt within 50 years. This bill does not defer the date of redemption. {: .speaker-KNP} ##### Mr Maxwell: -- Why were the sinking fund provisions specifically quoted in the prospectuses? {: .speaker-009FQ} ##### Mr CURTIN: -- The Treasurers who issued them were justified in quoting the law as it then was. It provided that the sinking fund, although originally designed, to redeem the debt within a certain period, should be more generously endowed than was actually necessary to fulfil the intention of Parliament. The additional endowments were an extra safeguard, and were a very proper use of surplus revenues when such were available. But while the former Treasurer was paying those sums into the sinking fund to redeem old debts bearing a low rate of interest, he was incurring new debts at higher rates of interest, and was imposing intolerable taxation on the people, notwithstanding the general prosperity of the nation. Do honorable members opposite believe that it is practicable in this crisis to contemplate a reduction of the period of redemption? Having regard to the depressed revenue and the fact that no man, not even the last Prime Minister, can foresee when the budgets of the Commonwealth and the States will regain equilibrium, do honorable members opposite contend that we should continue a process of finance that would involve the imposition of excessive taxation upon the Australian people in order to redeem, earlier than was intended by Parliament, debts which are already amply secured? 1 invite the honorable member who is to follow me to answer that question. {: #debate-31-s7 .speaker-KXQ} ##### Mr ARCHDALE PARKHILL:
Warringah -- It is unfortunate that this debate has not been confined to the bill before the House. The honorable member for Fremantle **(Mr. Curtin)** dealt at length with the credit of Australia and the responsibility of the Government for the lowering of that credit. It was only now and again that he referred to the measure under discussion! I should not have risen to speak - because our case has been fully proved - but for the fact that the honorable member has, as he usually does when he addresses this House, bowdlerized quotations, and torn them from their context merely to suit his purpose. {: .speaker-009FQ} ##### Mr Curtin: -- That is not fair. {: .speaker-KXQ} ##### Mr ARCHDALE PARKHILL: -- I shall entirely prove my case. The honorable member referred to a pamphlet issued by Messrs Cooke and Davenport prior to the Imperial Conference of 1926, in which they reflect upon Australian credit. He pointed out that in that pamphlet these men indicated that the loans that were being sought, time after time, by the Commonwealth and the States, did not indicate with any degree of certainty or clarity the purpose for which they were required. I asked him, by interjection, which he declined to answer, whether it was not a fact that the main contention of those gentlemen was not that the credit of Australia was impaired or inadequate for the loans that were being raised, but that the prospectus was not clear and distinct. They contended, as we contend, that the prospectuses should show clearly the purpose for which the loans were being raised, and what steps were being taken to provide a sinking fund in order to liquidate them. The honorable member for Fremantle deliberately refrained from mentioning that. He allowed this House to believe that the pamphlet was issued solely for the purpose of attacking the credit of Australia. He also said that the ex-Prime Minister **(Mr. Bruce),** when addressing the State Premiers on one occasion, had said that budgets could not be balanced. The honorable member said that to the accompaniment of the derisive laughter of Government supporters, as though the balancing of budgets was not a matter for serious consideration. Of course, judging by the attitude . of the Government in regard to the balancing of the Commonwealth budget, the derision of its supporters is quite appropriate. The honorable member indicated that the ex-Prime Minister had deliberately stated that the budget of the Commonwealth and the States could not be balanced. {: .speaker-009FQ} ##### Mr Curtin: -- In that year the Commonwealth budget was not balanced. {: .speaker-KXQ} ##### Mr ARCHDALE PARKHILL: -- The honorable member for Swan **(Mr. Gregory)** and myself asked him to quote further from the .speech of **Mr. Bruce,** but it did not suit him to do so. Had he done so, an entirely different complexion would have been placed upon the remarks of the ex-Prime Minister. This is what he said - >Two alternatives face Australia to-day; either we can resolutely attack this problem of reducing our costs of production and by so doing reduce our costs of living, expand our avenues of employment, maintain and augment our standards of living and increase our national wealth, or we can refuse to recognize the needs of the position and allow our national wealth to diminish and unemployment to increase until, faced with a national crisis, we are forced to lower our standards of living and reorientate the whole of our national life. Between these two alternatives can there be any hesitation? This should be clear to the supporters of the Government, and it is perfectly clear to the members on this side of the House. If the Nationalist party were in power our problems would be resolutely and courageously tackled. Our attitude would be in strong contrast with the feeble, limping and stumbling steps that are to-day being taken by this Government in contradiction of what is right and decent and the proper course to take in order to place this country once again on the road to prosperity. The point at issue is the carrying out of a contract. It is amazing to hear the honorable member for Fremantle and other Government supporters contend that when an individual or country enters into an honest and straightforward contract it could be varied at the wish and inclination of one party to it. Such an attitude surely indicates the extent to which the public life of this country has been degraded under the administration of this Government. Where would be our standards of probity, integrity and honesty if contracts were not to be honored? If I purchased from the honorable member for Fremantle certain property under certain conditions of sale he would not for a moment permit me at a later stage to vary the terms of the contract. Certain contracts were made by this country when loans were floated. They were made by the previous Government and the present Government. This bill proposes to abrogate the terms of those contracts and to substitute an entirely different set of conditions. We contend that that is' a dishonorable action, and that it will bring discredit upon the country, both here and abroad. The honorable member for Fremantle said that it had been alleged that the credit of this country had fallen since this Government had taken office. The facts show that; but the statement that the credit of Australia fell just when the ex-Prime Minister arrived in England is just one of these partisan statements which one expects from little minds capable of engaging only in party warfare. There is no justification for it, and I do not suppose that one honorable member on that side believes in his heart that the ex-Prime Minister had, during the time that he was abroad, the slightest desire to injure the credit of Australia. The credit, of Australia is to-day as low as it has ever been; but that is largely, if not entirely, due to the fact that the present Government will not stand up to its responsibilities. If the people of this country were assured that the Ministry was determined to rehabilitate this country there would be instilled in the minds of the general community a feeling of confidence which would help largely to place Australia in a position of financial stability. It is lack of confidence in Australia, both here and overseas, that has brought about our straitened circumstances, and it is indeed a tragedy that because of a wave of hysteria the Nationalist party was defeated at the last election. It is equally tragic that the Prime Minister went overseas. Had he stayed here he would have carried out the promise that he made and put his name to in Melbourne, to reduce governmental expenditure. He would have either carried out that promise or gone out of office, if he is the man the people of this country believe him to be. Had the right honorable gentleman carried out his promise three things would have happened. First, Ave wouk have funded £34,000,000 overseas, which would have realized further millions of pounds for the benefit of industry in this country; secondly, Ave would have floated the £2S,000,000 loan without difficulty; and, thirdly, Ave would have started joyously on the radiant road to prosperity. I cannot see any possibility of our getting on this road until the present halting, limping Government makes way for a government Avith courage to do the thing that ought to be done. {: #debate-31-s8 .speaker-L07} ##### Mr LAZZARINI:
Werriwa .- Honorable gentlemen opposite seem Avith one accord to hang on to this theory with the superstition of the benighted savages. They talk of sinking funds as though' these Will ultimately entirely liquidate our national debt. The right honorable member for Cowper **(Dr. Page)** once claimed that he had invented a sinking fund. Apparently, he is ignorant of the fact that such funds have existed for very many years. The younger Pitt, when Treasurer of England, established a sinking fund Avith the object of paying off the cost of the Napoleonic Avar. He was able, through the fund, to pay off a part of the cost of the Avar ; but, in doing so, he incurred other national debts two or three times as great as those which he extinguished. That is exactly what the right honorable member for Cowper would have done had he remained in office long enough. It is true that sinking funds liquidate national debts; but, invariably, they cause other national debts to be incurred in respect of which higher rates of interest apply than applied to the old debts. In my opinion, these' funds are so much humbug, trickery, and fraud. They are a kind of confidence trick, by which the small investor is misled. They have the effect of bringing into being a few thousand small investors in government stocks in different parts of the country, who create a psychology favorable to the continuance of the present capitalistic system of finance. The stupidity of the whole system is manifest to all who realize that in order to maintain sinking fund payments the Treasurers of the Commonwealth and States alike are incurring huge deficits in their finances. Nothing could be more stupid than the pursuance of this policy. For my own part, I have always opposed the adoption of these principles of public finance. I say definitely and emphatically that it is the utmost folly for us to think that Ave can finance this country by continuing to practise the orthodox principles of capitalistic finance, which are so much trickery on the people. I do not say that any individual Treasurer is fraudulently resorting to this method of misleading the people; but it must be apparent to any one who intelligently analyses the position, that we can never balance our accounts by these methods. Some of the loans that will be converted by the present loan were floated at *3%* per cent., some at 4i per cent., and others at varying rates of interest up to about *h* per cent. The people are now being asked to lend their money for two years at 6 per cent., or ten years at 5f per cent., or twenty years at 5-J per cent. I do not propose to discuss the provisions of the bill in detail, but I feel it obligatory on me to place my views on public finance before honorable members at every opportunity. I discussed this subject in this House on the 16th November, 1927, when the budget of that yea' was before us. I propose to make some quotations from that speech. The figures must remain as I then gave them, because I have not had time to bring them up to date. I said - >If we analyse the Treasurer's figures they show how stupid is the claim that the national debt will be extinguished under the Government's proposal. The financial year covered by the budget shows an increase in the national indebtedness of £2,624,391. Our national debt is now £1,016,623,752. According to the Treasurer, this amount will be redeemed in 58 years. This afternoon the honorable member for Gippsland said that the previous Government had reduced the national debt. {: .speaker-KXT} ##### Mr Paterson: -- Per head of the population. {: .speaker-L07} ##### Mr LAZZARINI: -- That is pure nonsense. The national debt increased at a faster rate while the previous Government was in office than at any other period in our history. I went on to say, in the speech from which I have already quoted - >On those figures, allowing nothing for inevitable increase in the rate of borrowing, the new debt created in that period will be £1,168,838,430. Honorable members opposite have said that we shall be guilty of a breach of contract if we interfere with the existing sinking fund provisions. They consistently preach the pagan doctrine of the sacred rights of property. Human beings may rot from starvation, but the country must be governed on the principles of 2,000 years ago. This is rank, raw, paganism. There is not a vestige of Christianity in it. {: .speaker-KZR} ##### Mr White: -- I rise to a point of order. The statement of the honorable member for Werriwa **(Mr. Lazzarini)** that there is not a vestige of Christian sentiment in the views of honorable members on this side of the chamber is offensive to me, and I ask that it be withdrawn. {: .speaker-L07} ##### Mr LAZZARINI: -- I withdraw the statement. I did not intend it to have a personal application to any honorable member opposite. In my opinion, the doctrines of capitalistic finance, which are being practised to-day, are shot through with the paganism of 2,000 years ago. They totally disregard the welfare of the people, who may die of hunger and. starvation or continue to exist in misery and degradation. This is not Christianity in any sense of the word. I went on to say - >Should the present policy continue for the next 58 years, Australia will have paid in interest £3,040,871,256 on the existing debt. It will also have redeemed that debt, and created a new debt of upwards of £1,168,000,000, upon which will have been paid in interest an extra £100,000,000. Where does the Treasurer think he is leading the country? Just what do he and his associates think they are doing? In the light of these figures can it be denied that this system of finance is nothing but trickery, fakery and fraud? I gave the following figures on that occasion : - Those figures do not take into account a single penny in respect of increased interest. When is this stupidity to cease ? The building up of sinking funds under existing conditions is useless. It is tantamount to creating another Frankenstein monster to crush us in the dust. No honorable member can truthfully deny that sinking funds merely liquidate one debt by the incurring of another. . In these circumstances it is ridiculous for honorable members opposite to flog themselves into a white heat of passion in talking about the breaking of contracts. It would be a good thing for humanity if all such funds, and. all that they stand for, could be swept away. I do not say that this can be done, but if it could be done, it would be a good thing. I would not mind if the Acting Treasurer took every penny out of the sinking fund to help the nation in its present crisis. What is the difference between incurring a deficit of £1,000,000 and putting £2,000,000 into a sinking fund and increasing the deficit by £3,000,000? I am not concerned about the sinking fund, for I know that it will never pay off the national debt. Sinking funds are not meant to pay off debts; they are meant to increase year by year. National debts were not. known until private banking institutions commenced operations. For centuries the British nation fought its wars without piling up debts and interest for posterity to pay. But, with the coming of private banking institutions, an unholy economic trinity was formed - private banking institutions, foreign wars, and national debts - to which humanity has been in subjection ever since. Can any honorable member dispute that the genesis of national debts is the establishment of private banking institutions? In my father's day the motto was, "Borrow, and let posterity pay." Posterity has not yet paid, and it never will pay, because it cannot pay. {: .speaker-KNP} ##### Mr Maxwell: -- Should our debts be paid? {: .speaker-L07} ##### Mr LAZZARINI: -- They cannot be paid, as the honorable member will realize if he applies his keen analytical mind to the subject. If. he thinks that these debts can be paid, he is only hypnotizing himself. The time is ripe for some new system to be introduced. So far as I am concerned, the Treasurer can put his hands into the sinking fund and take the lot if he needs the money to meet pressing needs of to-day, for by so doing he will not affect the economic position of the country. I repeat that sinking funds will not, because they cannot, wipe out the national debt. {: .speaker-KXT} ##### Mr Paterson: -- They will wipe out existing debts. {: .speaker-L07} ##### Mr LAZZARINI: -- Yes, by creating others at higher rates ofinterest. This month we are asked to wipe out a debt of £28,000,000, some of which carries interest at3¾ per cent., and some at 4 per cent. In future, for that money we shall pay5½ per cent., 5¾ per cent., or 6per cent. That is what the sinking fund is doing. When we tell the people that a certain sum is being put aside each year as a sinking fund to liquidate the debt, we are working the confidence trick on them. It is useless to put £2,000,000 into the sinking fund, and at the same time increase the deficit, by £3,000,000. Yet that is what is being done every time there is a deficit wherever sinking funds operate. Honorable members' opposite get intoa white heat at the thought of taking a few hundred thousand pounds from the sinking fund to meet the necessities of the present time! In this chamber, where I am compelled to use parliamentary language, I can only say that they are fooling themselves. The day of reckoning is fast approaching. The people want something more than is offered by the honorable member for Warringah **(Mr. Parkhill),** who talks of the rights of property. What about the rights of the hungry and the unemployed? The Government should be honest, and tell the people the true position. {: #debate-31-s9 .speaker-KZR} ##### Mr WHITE:
Balaclava .- Believing that all that couldbe said by honorable members on this side had already been expressed by the Leader of the Opposition **(Mr. Latham)** and the right honorable member for Cowper **(Dr. Earle Page),** I had no intention of participating in this debate; but the remarks of the honorable member for Werriwa **(Mr. Lazzarini)** have provoked me to quote a few figures which, I hope, will lead him from his anti-capitalistic obsession and his savage attacks on imaginary enemies. The honorable member said that he would not care if the Government took the whole of the sinking funds, as we should still be no worse off. I should characterize such an action as a raid on the sinking funds. It is admitted in the Acting Treasurer's statement that during its term of office the Bruce-Page Government paid into the sinking funds £14,000,000 more than was necessary. {: .speaker-L1C} ##### Mr Lewis: -- More than the statutory requirernents. {: .speaker-KZR} ##### Mr WHITE: -- Which is the same thing. In three years the Bruce-Page Government accumulated a deficit of approximately £6,000,00.0; but asits contributions to sinking funds were £14,000,000 more thanwas necessary it really left a credit of £8,000,000 when it went out of office. Mr.Fenton. - The honorable member forgets that that Government started with a surplus of over £7,000,000. {: .speaker-KZR} ##### Mr WHITE: -- Even so, it went out of office about £1,000,000. to the good. The present Government has piled up a deficit of over £6,000,000 in about three months - more than the Bruce-Page Government accumulated in six and a half years of office. Moreover, that. Government spent £7,000,000 in the purchase of cruisers, which the present Government wants to destroy.' In addition, it spent £1,250,000 on roads; £500,000 on scientific and industrial investigations ; a similar sum in the finding of markets; £250,000 on equipment for the Royal Air Force; £200,000 in the development of civil aviation; and £220,000 in prospecting for oil. The honorable member for Werriwa **(Mr. Lazzarini)** saidthat the national debt per head of the population has not decreased during recent years. I maintain that it has decreased. In, support of his contention the honorable member quoted some figures from a speech of his own published inHansard of 1927. Let me correct him with the true figures. Australia's war debt was £333,000,000 in 1922, and in 1929 it had been reduced to £287,000,000. The debt per head in the Commonwealth was £65 in 1922, and in 1929 it had been brought down to.£59 ; but in the States it increased from £93 per head in 1922 to £114 in 1929. Although the Bruce-Page. Government spent lavishly, being in office during a prosperous period, it did not increase unemployment. When it left office the unemployed in Australia numbered 12 per cent, of the population, and now it is nearly 21 per cent. Members like the honorable member for Werriwa **(Mr. Lazzarini)** would have the people believe, chat the Labour party has a monopoly of interest in the welfare of the workers, whereas their comic opera caucus passes resolutions about inflation and repudiation which show that their party stands for repudiation of the agreements entered into with purchasers of our bonds and general impoverishment.. Now t,he Government has set out ,to plunder the National Sinking Fund, and it is obviously shirking its responsibilities. It has submitted iniquitous class legislation in connexion with its taxation proposals, and yet it professes to bemoan the messages cabled overseas that depreciate Australia's credit. On Friday last a member opposite made an attack on the judiciary. Both Ministers and members of the Labour party have insulted a financial authority who came out to Australia to assist the Commonwealth . Government. The honorable member who has just resumed his seat remarked that we pay off one debt and incur another at a higher rate of interest. [ point out that interest is based on the bona fides of the borrower, and if a government repudiates its loan obligations, it can hardly expect to ' be decently treated in the councils of the world. The credit of South Africa and New Zealand stands higher abroad than that of Australia. Investors overseas have no doubt read the speeches made in this House by those honorable members opposite who would have , the working man believe that by printing' further notes money will become more plentiful. As nearly everybody knows, wealth can be produced only by increased production,. which is work. The fantastic -talk of honorable members opposite is of no use to Australia, {: .speaker-JPV} ##### Mr Blakeley: -- What about the honorable member's fantastic ideas? {: .speaker-KZR} ##### Mr WHITE: -- Only this morning the Minister,1 who interjected, announced that he was willing to establish a lottery in Canberra. What a degrading proposal ! {: .speaker-KLL} ##### Mr SPEAKER (Hon Norman Makin: -Under Standing Order No. 266 the honorable member will not be in order in discussing that matter. {: .speaker-KZR} ##### Mr WHITE: -- If Ministers got down to fundamentals and the affairs of the nation, and tried to deal with the budget as they would with their private affairs, some headway might be made ; but if they pursue their present . policy, .unemployment will increase, and Australia will have to pay even higher rates of interest than have obtained in the past. I protest against this plundering of the National Sinking Fund. Debate (on, motion by **Mr. Crouch)** adjourned. . . {: .page-start } page 941 {:#debate-32} ### ADJOURNMENT {:#subdebate-32-0} #### Trench Rents - Pairs - Dismissal of Returned Soldiers - Rationing Motion (by **Mr. Fenton)** proposed - >That the House do now adjourn. {: #subdebate-32-0-s0 .speaker-K7U} ##### Mr CROUCH:
Corangamite -- In the course of a statement made, by. leave, this afternoon, the Minister for Defence. **(Mr. A. Green)** questioned the accuracy of certain remarks made by me last week, regarding a question I had previously asked in the House. Unfortunately, I was not given leave to reply to the Minister earlier in the day, although I endeavoured to speak by way of a personal explanation. The Minister, although he .had given me no notice of his intention to refer .to the matter, handed to me the report supplied to him by an officer of his department. I find that the statement made by the Minister was not his own, but was prepared for him by the Finance Secretary of the Defence Department. The concluding words of that statement were that I should see my way to withdraw my remarks. Such a suggestion by the Secretary of a department should not be permitted. Had I considered that my remarks were erroneous, I would not he so unfair as to persist in them; but I submit that the statement made by the Minister merely confirms them. The statement concluded - >I trust that the honorable member is now satisfied, aud would suggest that he might see his way to withdraw his remarks to the effect that the department is guilty of " inexcusable ignorance aud palpable evasion" in supplying the information as the basis of my answers. Both those criticisms were justified. In the first place I asked the Minister whether any trench rent was paid to France in 1914, and he replied "No". The authority for that question was the Deputy Assistant Adjutant-General of the British Army, who said that rent was paid, although not for front trenches, for back trenches. The answer of the officer of the department, as adopted and read by the Minister, was as follows : - >I stated that no information is available as to whether the British Government was charged with or paid trench rent, &c. I again state that no official information on that point is held, and also that Australia did not pay any such compensation. If that is so, inexcusable ignorance has been shown by some members of the Defence Department, most of whom according to the army lists, have been attached to the British Army. Further, in the Defence Department there are a number of intelligence officers who are supposed to keep in touch with matters of foreign policy which are within their purview, and also with the composition and organization of defence in such countries as Japan, Russia, Germany and France. Surely, a publication to be found in the library would be available to these officers, whose duty it is to study the activities of foreign armies, and who should know something of the position assumed by the British Army during the war. Notwithstanding that, I was informed that no official information on that point was available. If no official information is available, there is inexcusable ignorance on the part of some officers in the Defence Department. The second point is whether they are guilty of palpable evasion. One question I asked read - " Did part of this ' accommodation ' consist of the use of trenches ?" The answer I received was in the negative. The next question was - "If not, what ' accommodation ' in France was charged for " ? The answer I received read - " No ' accommodation ' whatever used by the Australian Imperial Forces in France was charged against the Commonwealth Government ". On reference to *Hansard* of the 1st October, 1919, ] find that the Acting Minister for Defence **(Mr. Wise),** in answer 'to a question by the honorable member for Brisbane (Mi. Finlayson), said - >The *per capita* charge of os., paid to thu Imperial Government for the maintenance, equipment, &c, of Australian troops operating in France and Belgium, includes accommodation. Is not the recent answer, therefore, a palpable evasion of facts? The document from which I have quoted was prepared by an official for the use of the Minister, whom I do not hold responsible; but the intelligence officers of the Defence Department should have correct information at their disposal, particularly in view of the information given by **Mr. Wise,** in 1919. Instead of me being asked to withdraw my statement, as the Minister, by reading a statement prepared for him, asked me to do, the Minister should withdraw the official's statement, and arrange for an inquiry to be conducted to ascertain why this House is being deceived by such incorrect statements. {: #subdebate-32-0-s1 .speaker-KYZ} ##### Mr RIORDAN:
Kennedy .- I express regret at inadvertently recording my vote in a division this afternoon when I had paired with the honorable member for Oxley **(Mr. Bayley),** who, I understand, is absent because of illness in his family. {: #subdebate-32-0-s2 .speaker-KZO} ##### Mr LATHAM:
Kooyong .- With reference to the vote which I recorded in division this afternoon, I wish to say that, in accordance with the practice which usually obtains in this House, I regard myself, as Leader of the Opposition, as being paired with the Prime Minister during his absence from the Commonwealth on public business. No arrangement has been made to that effect, but speaking generally, that course is usually followed. I have, however, hardly regarded myself as being bound in the same manner when the "gag" or closure is applied, as when matters of substance are before the house. {: #subdebate-32-0-s3 .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- I direct the attention of the Acting Prime Minister **(Mr. Fenton)** to the fact that the report of the Joint Committee of Public Accounts on temporary employment in the Public Service appears to have been disregarded. The large number of returned soldiers that have been dismissed from the Public Service within recent months is, to say the least of it, an absolute scandal, particularly as others who did not serve in. Australia or abroad have received permanent appointments. {: #subdebate-32-0-s4 .speaker-10000} ##### Mr SPEAKER: -- I remind the honorable member for Richmond **(Mr. R. Green)** that this afternoon I called another honorable member to order for using the word " scandal ". {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- The reply given by the Acting Treasurer to-day that he is only carrying out the law, is begging the question. This, and previous Governments, have declined to do the fair thing by those who served their country during a period of national emergency. While these men were overseas, others who did not leave Australia, were' placed on a permanent footing in the Public Service, and now it is said that because the others are on the permanent staff no alteration can be made in their status. I put it to the Acting Prime Minister that he should take into account those who have already been dismissed. Since September last, 700 returned soldiers have been dismissed from the Postmaster-General's Department in New South Wales alone, because they were temporary employees. Many of them had been working in the department for years, and they are now being succeeded by younger men who joined after them, and whom they actually taught their jobs. The war has been over for twelve years. The returned men are now getting on in years; their hair is turning white in many cases, and they have family responsibilities. I appeal to the Government not to continue this indiscriminate sacking of returned soldiers just because they went to the war. It is becoming an absolute scandal. {: .speaker-K7U} ##### Mr Crouch: -- Would the honorable member alter the law? {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- It is possible, even now, under the Public Service Regulations, to make a temporary employee permanent after a lapse of two years. No advantage was taken of that provision wither by this Government or the last. {: #subdebate-32-0-s5 .speaker-KZR} ##### Mr WHITE:
Balaclava .- I have mentioned this matter in the House many times, and I wish now to associate myself with the request made by the honorable member for Richmond **(Mr. R. Green).** The number of dismissals is even greater than that stated by him. Since the 30th June last, 1,429 returned soldiers have been dismissed from the Postmaster-General's Department alone. 1 have here a joint letter signed by 36 returned soldiers protesting against their dismissal. These men have between them 74 children ; some of them are partially incapacitated, having lost an eye or a limb or fingers. Most of them were repatriated into the PostmasterGeneral's Department by the Repatriation Department which made the choice as to whether they should be placed in private or government employment. They became experts as mail-sorters, and passed all their examinations. They should have been put on the permanent staff through length of service, but because of some disability, perhaps, they continued to rank as temporary. I nave communicated many times with the Postmaster-General regarding this matter, and only to-day I was informed by him, in answer to a question, that, as the law stood, nothing could be done. I remind him, however, that when a Labour Premier in Victoria has sufficient courage to tell the railway workers that they should accept rationing, this Government should not hesitate to do the some thing. It could be done by amending the Public Service Act. I do not wish to raise political issues in regard to this matter, but I have been assured that the Government's inactivity is due to the fact that the Postal Workers Union is opposed to rationing, and this we have seen in the press regarding unions generally. After all, is the Minister in charge of his department, or is he the servant of the union? The Christmas season is approaching, and men who have been with the department for many years, and who, in most cases, have no other trade, arc now to be thrown on to the labour market. The other day the Acting Prime Minister speaking at Wesley Church, said that we had to look to private enterprise to absorb the unemployed. How can private enterprise absorb these men who are suddenly thrown out of work at a time when employers are finding it difficult to retain the services of even their expert workers ? These men can be taken back into the department if the Government will do the right thing. I appeal to the Minister to act quickly. {: #subdebate-32-0-s6 .speaker-KEV} ##### Mr FENTON:
Acting Prime Minister · Maribyrnong · ALP .- Naturally, honorable members will not expect me to go extensively into this question, important as it is. It must be known to the honorable member for Balaclava **(Mr. White)** that the great bulk of those recently taken on by the PostmasterGeneral's Department have been returned soldiers. Out of 28,000 permanent employees, at least 24,000 are in the PostmasterGeneral's Department, and, seeing that practically all recent appointments to that department have been returned soldiers, it necessarily follows that when dismissals become necessary, returned soldiers must form a large proportion of those dismissed. {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- These men were repatriated into the department. If they are now dismissed their repatriation is rendered ineffective. {: .speaker-KEV} ##### Mr FENTON: -- I do not wish to raise political issues in the consideration pf this matter, but I 'remind honorable members that before this Government took office hundreds of returned soldiers in the Postmaster-General's Department had been served with notices of dismissal. We did retain those men for a considerable time. I shall make further representations to the Postmaster-General to sec whether anything canbe done. I am not at present familiar with the recommendations of the Public Accounts Committee regarding temporary employment in the Public Service, hut I shall look them up. I am sure that, both as a member of this House and as a member of the community, no one is more sympathetic than ' the Postmaster-General **(Mr. Lyons)** towards returned soldiers; and if anything can be done for them I believe that he will do it. To-night, however, I cannot make any promise, because, as honorable members know, the work available is not sufficient for the reinstatement of these men. It is well known that thousands of subscribers have relinquished their telephones. At one time it was the intention to proceed with the erection of automatic exchanges; but to-day there is not the demand that would warrant our going ahead with the installation of those plants. In the circumstances, honorable members cannot expect that men can be continuously employed. {: .speaker-KNP} ##### Mr Maxwell: -- What has the honorable gentleman to say in regard to the rationing principle in relation to the Postal Department? {: .speaker-KEV} ##### Mr FENTON: -- There are difficulties in connexion with that proposal with which I am not conversant. The PostmasterGeneral this morning; in reply to a question that was asked without notice, intimated that theadoption of anything like an extensive rationing system in his department is practically impossible. Having had consultations with his officers and the Public Service Board, he should know the exact position. {: .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- That is because the proposals of the Joint Committee of Public Accounts have not been accepted. {: .speaker-KEV} ##### Mr FENTON: -- I promise the honorable member that I shall read those recommendations. I do not know whether the Postmaster-General himself is conversant with them; but doubtless he, too, will study them. Any move in the matter must come from him; even the Prime Minister cannot intervene. I. assure honorable members that this Government is as sympathetic as any government could be in regard to the provision of employment for the people of this country, whether they be returned soldiers or others. Question resolved in the affirmative. House adjourned at 10.43 p.m.

Cite as: Australia, House of Representatives, Debates, 3 December 1930, viewed 22 October 2017, <http://historichansard.net/hofreps/1930/19301203_reps_12_127/>.