House of Representatives
6 March 1931
12th Parliament · 1st Session
Mr. Speaker (Hon. Norman Makin) took the chair at 11 a.m., and offered prayers.
page 11
MOTIONOF WANT OF CONFIDENCE
Motion (by Mr. Scullin) - by leave - agreed to -
That so much of the Standing and Sessional Orders be suspended as would prevent Notice of Motion No. 1 - Want of Confidence in the Government - from taking; precedence of all other business until disposed of.
Mr LATHAM:
Kooyong
.-I move -
- That the Government no longer possesses the confidence of this House.
- That a copy of this resolution be forwarded to His Excellency the GovernorGeneral.
I do this because I believe that the best thing we could do forAustralia would be to put the present Government out of office.
Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP
Mr. Parker Moloney interjecting,
Mr SPEAKER (Hon Norman Makin:
HINDMARSH, SOUTH AUSTRALIA
– I warn the Minister for Markets not to continue to interject.
Mr LATHAM:
– The Government has achieved a remarkable record of continuous’ failure. It has done nothing well, nor with even reasonable efficiency. Its history is a record of blunders, some small, some great, but all inflicting injury and damage upon the community. Again and again the Government has demonstrated its incapacity. It has shown itself regardless of moral considerations, of the honour of this House, and of the dignity of Parliament. It has no prestige or credit, at home or abroad. I propose to support those general statements by precise evidence of particular facts under each heading.
Only seventeen months ago the Labour party was returned to power in this House with the largest majority that any single party had ever won at a federal election. We have since experienced continuous suffering and distress. I do not wish to suggest by anything I may say that the Government is wholly responsible for the difficulties that exist in Australia to-day. I recognize, and admit frankly, as any reasonable man must, that any Government in charge of the affairs of the Commonwealth at the present time would be faced with problems of the most acute difficulty. But the action and inaction of the Government has almost infinitely increased the magnitude, gravity and seriousness of those problems. Unemployment has reached tragic proportions, the farmers are in desperate case, and all over the Commonwealth citizens- are moving to dissociate themselves from a political organism controlled, as the Commonwealth is controlled, by the present ministerial party. Movements for secession have been initiated from time to time in different parts of the Commonwealth, and have been founded on various grounds, but never before has a movement been started by the citizens to dissociate themselves from a Government which, in their opinion, is dishonouring the fair name and credit of Australia. Seventeen months ago the Government was given a majority of nineteen members m this House. That docile majority worked like a machine; though ministerial supporters were disinclined on many occasions to support the policy of the Government with reasons they always supported it with their votes. To-day, however, the Government cannot assume to know how honorable members will vote on this motion.
The Government entered office with a glittering array of promises which were made - and I emphasize this point - with a knowledge of the serious condition of the country. In October, 1939, the existence of grave and difficult problems was well known. All were aware that the flow of loan money had ceased, that the prices of wool and wheat were seriously depressed, and that there was no prospect of an immediate improvement cf the financial and economic situation. Although those vital elements of the national position were known in October, 1929, a remarkable number of promises was made by the members of the Labour party. Everybody knows that they have not been and cannot be performed. Every candidate knew, or should have known, that they were impossible of fulfilment; they were made simply to catch votes. They succeeded, but the Government over-reached itself, and is to-day discredited throughout the world. We are all familiar with those promises, and it is quite unnecessary to occupy page after page of Hansard to set them out in detail. I propose, however, to refer briefly, in passing, to a few particular promises, and to proceed then to show the Government’s failure to achieve anything in recent months. My object is to remind honorable members of the position in which the Government finds itself to-day because of those promises. I expect that my references will bc greeted by some ministerial supporters with merely cynical laughter, because the promises, having served their purpose, will be regarded by them as being no longer of significance.
Mr CROUCH:
CORANGAMITE, VICTORIA
– I rise to a point of order. The statement of the Leader of the Opposition that promises were made by ministerial candidates for the purpose of gaining votes, and that reference to such promises now would be greeted by them with merely cynical laughter, is offensive to a large number of honorable members on this side of the House. I ask that it be withdrawn.
Mr SPEAKER:
– I cannot regard that statement as unparliamentary.
Mr LATHAM:
– The first, and perhaps the most notorious of these assurances to which I shall refer, was the promise to take government action to open the coal-mines within a fortnight. That promise certainly obtained votes for the Labour party, but I need only say that it was not, and could not, be carried out. I refer also to the promises - pages and pages of them - made to the returned soldiers. Not one of them has been honoured; but some 2,000 returned soldiers have been dismissed from the Government services.
In some constituencies the farmers were promised 6s. 6d. a bushel for wheat. They have not yet received, and are not likely to receive that price.
Mr CROUCH:
– I rise to a point of order. Under Standing Order 276, I ask that the honorable member for Kooyong be prevented from indulging in tedious repetition. The honorable member has already referred no less than 50 times in this House to the subject to which he is now .addressing himself.
Mr SPEAKER:
– The Leader of the Opposition has not proceeded sufficiently far in his speech to justify me in ruling that he is indulging in tedious repetition.
Mr LATHAM:
– The Government further promised to introduce a comprehensive scheme of national insurance, including unemployment insurance. That waa disclaimed in the budget speech of July last. The most successful promise from a vote-winning point of view was that the Labour party would provide work for all, would maintain wages, and, possibly, provide higher wages. The people believed these promises.
Mr Cusack:
– Where were they made?
Mr LATHAM:
– They were made in every State. In Victoria, they were advertised on gigantic placards, headed “Work for All”. Almost every item of the propaganda of the Labour party contained that and other specious assurances. The people believed this impossible promise. They were cruelly deceived, and are aware of that to-day. The unemployment figures in October, 1929, were 12.1 per cent. The last unemployment figures were 23.4 per cent. Every change that has been made in wages in the Commonwealth since this Government took office has had a downward trend. This Government could do nothing to prevent that because, apart from financial and economic considerations, it has no legal power whatever to deal with wages in respect of the general industries of this country. Thus, taking these half-dozen promises as samples, we find that in every case there has been a complete failure on the part of the Government to redeem them.
I could say much more about unfulfilled promises, but I come now to a consideration of the administrative and legislative actions of the Government during its term of office. Here again I can only make a selection. The tariff has been regarded - I do not know whether it is still so regarded - as one of the triumphs of the Labour administration. There have, I think, been eight schedules put before this House. Mistake after mistake has been made, and new proposals have had to be brought down to correct blunders obviously made and admitted by the Government itself. These continual alterations in tariff policy have been due to ignorance and incapacity. In the meantime many thousands of our citizens have been ruined. In so far as the tariff alterations were designed to increase employment largely and substantially, they have completely failed.
I come now to another subject. This Government took office largely, it was said, to advance the principle of arbitration. Great improvements were to be made to the Arbitration Act. The only significant change made in the act consists of a series of provisions dealing with what are termed conciliation committees. Those provisions have since been declared invalid by the High Court. That is the sole contribution of the Government towards the improvement of our arbitration law ! Yesterday notice was given of a new bill to amend the Arbitration Act, and everybody is now waiting with interest to see what bright ideas have emerged since the time last year when, according to the Government, everything that was necessary was done to make the arbitration system perfect. The Government strongly protests its adherence to the principle of arbitration. As the Attorney-General said time and again in the course of the debates on the Arbitration Bill, it stands for allowing the arbitration judges to exercise an unfettered discretion in relation to matters brought before them. Yet the Government did nothing to protect the Arbitration Court judges in the performance of their duties when a prominent leader of the industrial movement shouted in the Arbitration Court “ To hell with the judges.” When “ The Red Flag “ was Bung on that occasion, did this Government do anything to protect the prestige of the court ? Wot for one moment ! It is impossible to attach any weight or to give any credence to the Government’s profession that it believes in the principles of arbitration.
Let me turn now to another subject. Again I am only making selections from a large number to which I could refer in a similar strain. The Government one day abolished the policy of preference to returned soldiers, and two or three days later reinstated it. It has had no policy on anything. It has simply watched the direction of the winds of public opinion, and, on preference to returned soldiers, as on other matters, has adopted no policy beyond that of vacillation.
The gold bounty is another case in point. One day the Prime Minister was not impressed with the arguments put forward in favour of a gold bounty, and said that it could not’ be granted. Not long -afterwards a bounty was given.
The Minister :for Home Affairs (Mr. Blakeley) one day announced that we were going to honour the name of Australia throughout the world by obtaining money for public .purposes by the establishment of a lottery at .Canberra. Two days afterwards the .proposal was withdrawn.
An export duty on sheepskins was proposed in this House, but within two or three days the Leader -of the Government stated that the duty would not be collected. Yesterday we -had the Ignominious spectacle of a Minister rising in this chamber to say that it was proposed to pay no .attention to the motion made in this House. That was done without any debate. The motion is simply to be allowed to lie on the table, and the subject will not be brought on again. In the meantime, hundreds of thousands of sheepskins have been destroyed; 1,000,000 sheepskins have deteriorated.; large losses have been incurred by the wool-growing industry at one of the most critical times in the history of the Commonwealth ; and no advantage has been conferred by the duty upon a single citizen of this .country.
In order to show how inconsistent and unintelligent -has been the policy of this Government, I shall refer to another important matter. So far as I am aware, the Government has brought down four varying proposals to deal with wheat. The first proposal was for the establishment of a compulsory pool, associated with a guarantee of 4s. a bushel. The bill passed this House, and was defeated in another place. It was framed upon an impossible and unfair basis as between the various States of the Commonwealth. “We were assured in this House that finance could be obtained, and so often was that assurance made that honorable members accepted it, and passed the bill, believing that the money was available. ‘The promise was 4s. a bushel at railway sidings, equivalent to about 4s. 8d. a bushel f.o.b. The crop upon which that bounty would have had to be paid amounted to about 1SO,000,000 bushels, and the money required for the payment of the .-2s. a bushel - which is. a low estimate of the amount necessary to make the payment up to 4s. - ‘would have been £18,000,000. That was the first scheme.
The second proposal was for .a guarantee of 3s. a bushel, f.o.b., to be given by the Commonwealth Bank, .and that institution was to be ‘guaranteed by the Commonwealth Government, although, obviously, if the Government became involved in difficulties, it would have had to get the money from the Commonwealth Bank. The Government was warned that the scheme could not work - that it must inevitably fail - but the Minister in charge airily disregarded, and shouted down, all warnings, asserting that “ the Government would go fearlessly ahead “. That, indeed, is a favorite phrase of the Government. The result was that in the months of December and January the farmers incurred tremendous losses owing to the disorganization of the market brought about by this Unconsidered legislation. Then in January we ‘had the amazing announcement that every one was to conduct his business as though the act had not been passed. Surely such an .announcement was never previously made - in the history of the Commonwealth !
The third proposal, made almost contemporaneously with the abandonment of the second proposal, provided for the floating of a loan of £6,000,000 to afford relief to necessitous farmers, and also to enable the payment of a bounty of 6d. a bushel on wheat to be made. Then, a very little later, the Government intimated that, as it was impossible to float a loan, it proposed to inflate currency and credit hi order to give assistance to farmers by issuing what I regard as spurious money. I have no hesitation in saying that this fourth proposal is a delusion and a pretence.
Mr CROUCH:
– I rise to a point of order. The Leader of the Opposition (Mr. Latham) has referred to a subject which appears on the notice-paper under the heading “ Government Business, Notice of Motion No. 2.” I submit that he has no right to discuss that subject now.
Mr SPEAKER:
– The Leader of the Opposition may make a passing reference to a subject which appears on the notice-paper, though he would not be in order in discussing it at length.
Mr LATHAM:
– I doubt whether the Government believes for a moment that its proposals will pass this Parliament, even if they pass this House. There is certainly no ground for supposing that they will be adopted by Parliament as a whole..
I have referred to the vacillating policy of the Government in connexion with tariffs, the Arbitration Act, preference to soldiers, the gold bounty, the lottery at Canberra, the export duty on sheepskins, and the wheat guarantee, and I submit that, in that record we have the Governments incapacity conclusively demonstrated - an incapacity unequalled in the history of the Commonwealth.
In July last, a budget was introduced. It pretended to balance the estimated receipts and expenditure of the Commonwealth for the current financial year. The Government was warned that the estimated revenue could not be obtained, largely because the effect of the customs tariff would inevitably be to reduce imports very greatly, as, indeed, the Government desired. It was also warned that it Was most unlikely that the sales tax would produce anything like £6,000,000 in a full year, as was estimated. This administration blithely imposed new taxation which it expected to produce £12,500,000, in spite of the warning that the sources of taxation were drying up, and that further taxation would diminish the chances of obtaining additional revenue. It chose to ignore all warnings, and by virtue of its docile majority it succeeded in getting its budget through this House. But as early as August last it was seen that it would be impossible to meet the obligations of the Commonwealth, and accordingly in thai month a conference, which was attended by the Prime Minister and the Premiers of all the States, was held in Melbourne. At that conference it was agreed that th*s several States and the Commonwealth should balance their respective budgets this year, and that if it appeared that the receipts would not equal the expenditure, immediate action would be taken to meet the position as far as possible. The basis of the agreement was that the budgets should be balanced by the reduction of expenditure and the imposition of a minimum of new taxation. That agreement was signed by the Prime Minister before he left Australia. During his absence the honorable member for Maribyrnong (Mr. Fenton) and the honorable member for Wilmot (Mr. Lyons) headed a cabinet which was to carry out the agreement. For some weeks a sub-committee of the Cabinet considered the questions arising. On the Srd of October the Acting Prime Minister (Mr. Fenton) announced that it was proposed to reduce federal expenditure at the rate of £4,000,000 per annum. The first three months of the financial year revealed a leeway in the public accounts amounting to £6,747,000.
About that time an election took place in New South Wales, and four Ministers of the Federal Cabinet appeared on the public platform and denounced the policy of the Government of which they were members* Yet no action was taken against them. For months we have had in Australia a ministerial team without a captain. The Prime Minister made heroic speeches in London; but, apparently, was willing to suffer almost any insult rather than imperil the unity of his party. J ask honorable members to contrast his attitude with that of Mr. Hogan. the Labour Premier of Victoria, and Mr. Hill, the Labour Premier of mouth Australia, who risked their political lives in an honest endeavour to carry out the agreement into which +hey entered. As I have said, four Ministers of the Federal Cabinet were allowed to take the public platform and denounce the policy of their own Government without rebuke or reproof. One might reasonably have expected that they would be called on to hand in their resignations without delay.
In October and November some very dangerous resolutions were passed by the caucus of the Labour party. One of them was in favour of the inflation of the currency to an enormous extent, and the other proposed the postponement of payments of debts which had been incurred. Those resolutions have already done infinite harm to the name and credit of Australia, not only in this country, but also throughout the world.
A second budget was introduced;, but it also was found to be inadequate to meet the needs of the situation. Indeed, the Government admitted its inadequacy. The position was, however, that the Labour caucus had overruled the Cabinet, and that those ‘who were nominally in charge of the business of the country had to do a difficult best. At the end of January the deficit in the public accounts amounted to £11,487,000. While that may not be a true basis on which to gauge the ultimate deficit for the year, it gives an indication of what we may expect, even after making all allowances for increased taxation receipts in the remaining months of the financial year.
In December a conversion loan amounting to £28,000,000 fell due. It was imperative that that loan should be converted if the financial, economic, and industrial stability of Australia was to be maintained. The Acting Prime Minister (Mr. Fenton) and the Acting Treasurer (Mr. Lyons) did magnificent work in securing the success of that loan. In their public efforts they were assisted by honorable members on this side of1 the House as well as by others in the community who support the party in opposition in this chamber. I am glad to say that their efforts were aided also by thousands of citizens in all classes of the community. But members opposite were conspicuously absent from all the movements which brought about the success of that loan. It was a patriotic effort which did credit to the people. On what basis was the loan floated ? To quote the words of the slogan used, it was that “ Commonwealth bonds are as good as gold “. I would that they were. One has only to look at the price of those bonds to-day to see how, unfortunately, that slogan has already been falsified owing to the action and inaction of this Government.
Ultimately Mr. Scullin returned from abroad, and we were told that he was going to take charge as Prime Minister. He was going to lead the country and lead his party. He said that he was not a super-man or a miracle worker- -and I am unaware that any such ability had been attributed to him - but that he would go fearlessly forward. He did not indicate in which direction he would go. Everything was very heroic, oratorical and rhetorical. Then he went to Richmond, where he said that his practice was to go into caucus, tell the members what he thought ought to be done, and then let them decide. When he returned from Great Britain he had a great and unexampled opportunity.
All sections were prepared to follow the Prime Minister’s lead, if he would only do his best to carry out his own pledged word as given in August last. It is that to which I am referring. I am not suggesting for a moment that the community or that members on this side of the House, particularly after this almost fatal experience of seventeen months of Labour government, are prepared to adopt and follow the Labour policy. The people are more adverse to the Labour policy now than they have been for many years. If honorable members opposite wish to find that out for themselves, let them face the electors and get their decision. But-I do say, on this fundamental issue of finance, that if the Prime Minister had given a strong lead in carrying out his own word, doing nothing super-human, but merely his best to fulfil his promise, all sections would have followed him, and Australia would not only have “ turned the corner “, touse the phrase which Mr. Hill said that the Prime Minister used to him, but I believe, would also bave started on the road to prosperity again.
What happened ? Instead of the Prime Minister leading his party, the community was treated to a discussion as to whether the leader of the party would be allowed to appear in the Parkes byelection. I am not in the secrets of the Labour party - such secrets as are left, if there be any - and possibly there was no foundation for the reports of the objection raised to the appearance of the Prime Minister in that byelection. In any event, he did speak on that occasion, and for days afterwards the citizens of Australia were cudgelling their brains to find out what he meant. He gave something to everybody. There was “sane and sound finance “ in one part of his speech, and just a little bit of unsound and insane finance in another part. This statement by him will appeal to any thinking audience -
My answer is that the remedy is neither deflation, nor inflation. (Great burst of cheering.) The remedy in my judgment, as I see it, is to aim at restoration and stabilization. I quite agree that everybody wants restoration and stabilization, but the question is, how is it to be obtained ? We also had the Prime Minister saying -
Numerous suggestions have been made about creating credits and printing notes, but I would say that to provide £20,000,000 by that form of credit for works would only be justified as a temporary expedient until arrangements could be made for the flotation of a loan.
There we have the sentence which made it possible for the Prime Minister to appear on the platform in the Parkes by-election! If the Government started to create credits as a temporary expedient to provide £20,000,000, £28,000,000 £30,000,000, £100,000,000, or £120,000,000- to mention various figures, all of which can be attributed to honorable members on the other side - does anybody imagine that it would ever again be able to raise a loan to cover such an issue?
That policy was not exactly a conspicuous success in the Parkes by-election, and from the next by-election the Government thought it desirable to retire ; it did not even run a candidate.
So far the Prime Minister had only given us speeches; there had been no action at all. Recognizing that some action was necessary, the first thing that he did was to help to procure the reinstatement of the member for Dalley (Mr. Theodore) as Treasurer in his Ministry. This caused a shock of indignation throughout the community. The Prime Minister apparently thought that the moral aspect of his action was irrelevant ; I doubt whether he thinks so to-day. During the recess I have been speaking in New South Wales in connexion with the Parkes and East Sydney by-elections, and in Victoria and Tasmania. I have in this way addressed perhaps as many meetings as anybody in Australia, and I can assure the Prime Minister and his followers that this action has kindled everywhere an intense flame of indignation and resentment. The people have been aroused in defence of the principle of integrity and probity in the public life of Australia.
The honorable member for Dalley had a political record in Queensland before he, with some difficulty, entered this House. He nearly ruined that State. A most interesting article on this topic appeared in the Sydney Bulletin of the 28th January last. I give the reference so that honorable members can look at the article for themselves and, if they wish to do so, make any corrections or modifications that they think are justified. After reviewing generally the story of the honorable member for Dalley in Queensland, the article stated -
In his first year he added just on £3 per head to the State’s debt. From £82 9s. 2d. in 1915, when he took office, the debt sprang to £109 8s. 9d. as at June, 1924. In the seven years before Mr. Theodore arrived, the debt had grown £5 10s. 2d. per head; in the nine years of his misrule - nearly half of them war years - it grew £24 0s. Id. per bead.
After referring to the fact that the railways of Queensland were profitable up to 1915, the writer goes on to point out that thereafter astounding losses occurred. He says -
It is the most shocking performance ever put up by any government, State or Federal, in Australia.
Reference is then made to the decline in the number of factories and workshops in Queensland, and to the increase in the Public Service, and the article continues -
In 1914-15, the profit on the State railways, after paying wages and interest, was £3 5s. id. per employee. In 1924, the profit of £3 5s. Id. had been turned into a loss of £94 Os. lOd. - which explains why the astounding increase of taxes was necessary.
The circumstances in which the honorable, member for Dalley (Mr. Theodore) entered this House were the subject of an inquiry by a royal commissioner, who found that a sum of about £5,000 had been paid in his interest in order to obtain the seat for him. As the result of that inquiry, the name of a perfectly honest racehorse, Spearfelt, has become a joke throughout Australia.
The honorable member had a great deal to do with the success of the Labour party in the last federal election, for he was the maker of, or responsible for, a large number of the promises to which I have already referred.
In July last, the honorable gentleman introduced a budget which failed in realization at the rate of about £2,000,000 per month for the first three months of the financial year. It can be said that practically not a single estimate has been reached. I remember hearing the honorable member attack the right honorable member for Cowper (Dr. Earle Page) because he was 3 per cent, or 4 per cent, out in this estimate of customs receipts in twelve months. Although I have not worked out the percentages, I invite honorable members to compare those figures with the figures published on Tuesday last. If ability to estimate customs receipts is a fair measure of financial capacity, the honorable member for Dalley is the last person who should hold the position of Treasurer.
On the 4th July last, the honorable member for Dalley, speaking in this House, said that if he were guilty of a tithe of the things of which he had been found guilty in a certain report he was unfit to be a member of any ministry or of the House. He retired from his position in the Ministry, and quite properly so. The position to-day is in all essential particulars exactly the same as it was then.
I agree with the judgment of the Labor Daily, which, on the 28th January last, published the following statement in a leading article: -
The Labor Daily cannot help but view the vacillating and contradictory actions of federal parliamentarians - their lack of understanding of public opinion and appreciation of ethics - with supreme disgust.
On the 30th January last, an honorable member of this House and a leading member of the Labour party said -
I do not feel at all happy about the events of the past week at Canberra. Australia’s exigencies at this moment ave no warrant for such a departure from high ethical standards, which should now, as always, govern our public life.
I respectfully agree with that opinion, which was uttered by you, Mr-. Speaker.
The Cabinet has been substantially improved by the retirement - I suppose one can say retirement - from its ranks of the honorable member for Bourke (Mr. Anstey) whose advice to the people of Australia was, and is, “ Default and be damned “, and the honorable member for West Sydney (Mr. Beasley) who is today advocating a policy of repudiation. These gentlemen rendered a real service to the Commonwealth by retiring from the Cabinet-
Mr Maxwell:
– Did they retire?
Mr LATHAM:
– I am assuming that they did. The honorable member for Dalley also has it in his power to render a’ real and great service to the Commonwealth by retiring from the Cabinet. It was said that the Treasurer had some wonderful scheme of economic and financial rehabilitation for Australia. This scheme was so remarkable, however, that it was beyond the comprehension of the Arbitration Court and could not be revealed to it even privately and in confidence. A remarkable affidavit was presented to the court by the Attorney-General (Mr. Brennan), to the effect that very careful consideration was being given to this scheme, but that it could not be revealed at the time. Everybody waited with interest to know what these wonderful proposals were. Apparently they were those submitted to the Premiers conference which was held early in February. I hold in my hand a report, printed in four columns, of the speech made to the Premiers at that conference by the Treasurer. The Treasurer has a fluency and facility in the use of jargon that impresses those unacquainted with the subject with which he deals. In this four-column report we find words upon words; but there are two paragraphs which mean something. What these proposals were was apparently clear in the minds of the Government, but it was not thought proper to reveal them to the Arbitration Court. One of the paragraphs is in the following words: - Every one who has studied the question admits-
That is a good introduction to a highly disputable proposal ! It is an impressive formula ! - the capacity of the banking organization of any country to expand at will the credit that may be available to industry, or to finance the monetary affairs of the community. I say that they can expand this credit at will. They are limited only by the effect of carrying out such a policy.
I quite agree with that statement. Banks or private individuals can expand credit at will until they become insolvent. They are only limited by the effect of carrying out such a policy. So far this most valuable contribution to our financial discussions is sound. The banks were told that they could expand credit at will, .but they say, “We have not the money. How can we lend if we have no money ?” The financial authority responsible for this suggestion easily handles that question, as will be seen from a later sentence in the same speech, which reads -
The banks could obtain their advances from the Commonwealth Bank.
There is no difficulty in the banks expanding credit at will, because they can obtain advances, apparently at will, from the Commonwealth Bank! It may be said by some crude thinker that the Commonwealth Bank may not have the money. Where, then, is the Commonwealth Bank to get the money?
The Commonwealth Bank would rely on its ability to create additional currency.
There is an answer to every question ! That speech of . four columns takes us back to the old expedient of the note printing machine. So far as one can judge, that was a scheme which it was deemed injudicious to reveal to the Commonwealth Arbitration Court.
Since then there has been another Premiers’ Conference, and now there emanates from the Government a very modest proposal for a fiduciary issue of £18,000,000 ! The project was explained by the Prime Minister in a statement which appeared in the press on the 2nd of this month. The right honorable gentleman claimed that the scheme is not really dangerous inflation, though “ technically, every issue of banking credit might be described as inflation “. He went on to say, “ The evils due to inflation arise when the inflation causes prices to soar “. If Ministers have a scheme of inflation, which is necessarily subservient to the political exigencies of the day, and believe, they can prevent prices from, rising, they have made a discovery not made by any other government in the history of civilization.
A month or two ago, we were treated to a series of articles by the present Treasurer which stated that the Government, which is sponsoring this wisely and judiciously controlled inflation, intended to put prices up to the 1929 level. The very object of the scheme is to increase prices; yet they must not soar! This Government thinks that while it is admittedly manipulating the currency it can resist all political appeals in a time of acute unemployment and distress, and that it can prevent prices from soaring.
The - Prime Minister further stated that “ The proposal for a limited fiduciary issue is a temporary measure “. Whenever inflation, under political auspices, has been commenced in modern times, it has been claimed that it will be controlled. But the temptations to inflate more .and more, which assail such a proposal, have been irresistible, and “it has proved impossible to stand up against the momentum of the consequences. The right honorable gentleman proceeded to explain that this “ temporary measure “ was “ to enable the Commonwealth Bank to make advances to governments to assist the wheat-growers and relieve unemployment”. Wherever inflation has been politically proposed it has been done, not in the spirit of “We will .inflate and ruin the country “, but in that of “ We will provide money for purposes which every one regards as desirable, at least in some measure “. There has always been the promise of assistance to some portion of the community. In this case, promises are made to the country dwellers in the form of relief to the farmers, and particularly to the city dwellers in a measure of relief for unemployment. It is because such ruinous proposals as this have always been associated with attractive promises of that kind that they are so dangerous. “ Such advances the Prime Minister went on to say, “ are to be covered by publicly subscribed loans when the conditions of the loan market become favorable “. But while inflation persisted, the conditions of. the loan market would never become favorable. It would become possible to raise loans only when such a policy had been definitely abandoned.
The right honorable gentleman continued, “At present it is not possible to go upon the loan market, either in Australia or abroad “. I am astonished that he should consider that even what is termed “judiciously controlled inflation “ would make it at any time easier to go upon the loan market, either at home or abroad. The Prime Minister’s statement continued along lines always followed with modern instances of inflation. He said -
We believe that sacrifices must be made, but that the basic wage should be kept intact. The sacrifice must be spread equitably over the community.
It has always been an argument advanced to support inflation that it would prevent a diminution of wages, and would make it possible either to maintain them at existing rates or even to increase them. Yet, experience has shown that there is no more insidious method of reducing wages than to inflate the currency, under political control. Inflation is the indirect method employed to lower wages when a government believes that some reduction must take place, but desires to disguise what it is really accomplishing.
These proposals have already, in advance, been dealt with and discredited in a report signed by four Treasury officials, from Victoria, Queensland, “Western Australia and Tasmania. From that report I propose to read certain’ paragraphs.
Mr CROUCH:
– I submit, sir, that the Leader of the Opposition is defying your ruling. His speech is anticipatory of a motion for the introduction of a bill now on the notice-paper, against which you have already warned him. I submit that he should be prevented from dealing with a matter upon which other honorable members will be precluded from commenting.
Mr SPEAKER:
– If the honorable gentleman makes any attempt to disobey my ruling, I shall call him to order immediately.
Mr LATHAM:
– When I am aware of the proposals of the bill to which the honorable member for Corangamite (Mr. Crouch) has referred, I shall be very glad to discuss them; at .present, I am not in the confidence of the Government regarding them. I know nothing whatever about the measure, nor do honorable members generally know its contents.
Reverting to the report which I have mentioned, which I am reading in order to indicate the lines on which I suggest that action should be taken - because I do not wish to make merely a negative and critical speech - paragraphs 2 and 3 read -
- . . . The evils which would follow such default would be immeasurably greater than any hardships which the nation need be asked to face in order to restore Australia to a sound position. Panic conditions would be produced in financial spheres - involving banks and savings banks. Business would be paralysed. Insolvencies would be the order of the day. Unemployment would be general. Recovery would be indefinitely protracted.
- The table of national income in paragraph 23 shows that the national income of the nation has shrunk from £045,000,000 in 1928-29 to £525,000,000 in 1930-31, a fall of the order of 20 per cent. It would be only too easy to gloss over our loss of prosperity by an alteration in the purchasing power of the currency. This is not a road to recovery, but to collapse. A progressive expansion in the currency, though at first hardly perceptible inside Australia, could not fail to have a marked and unfavorable effect on credit, and would in the end cause a collapse of industry and trade.
Mr CURTIN:
FREMANTLE, WESTERN AUSTRALIA
– How does that square with the history of inflation during 1914-18 ?
Mr LATHAM:
– We are still paying for the inflation of the currency that took place between the years 1914 and 1918, and the additional inflation now proposed would mean ruin and disaster. The report says in paragraph 6 -
At the present time the gravest danger to confidence lies in the unbalanced condition of government budgets. Banks have been granting to governments further credits comparable in amount to their added advances to industry. The figures of short-term indebtedness in paragraph 15 indicate the extent to which they have done so. Unhappily, the growing size of budgetary deficits threatens an increasing resort by governments to an expedient which must undermine the purchasing power of the Austraiian pound. The borrowing of bank credits hy governments involves either the equivalent starvation of industry or such an expansion o( deposit currency as to lead to dangerous inflation.
After showing that the advances made by the banks to Australian Governments, plus treasury-bills, rose from £5,500,000 to £53,000,000 between the 30th June, 1929, and the 31st December, 1930, the report goes on to say -
There is an apparent way of escape which opens when governments borrow directly or indirectly from the Commonwealth Bank.
Reference is then made to the method of financing in operation at the present time, by means of treasury-bills, which the associated banks discount with the Commonwealth Bank, and the paragraph concludes -
If these banks feel in need of liquid funds they will no doubt seek to rediscount these bills with the Commonwealth Bank. If they are accommodated their cash position will improve, and this will ine’vitably lead to a further increase in advances and deposits. Such abuse of bank credit in meeting government deficits must bring about an inflation of prices which may quickly gain an uncontrollable momentum.
After an analysis of the position the statement is made that “ As to 1930-31, it is obvious that it will not now be possible to balance budgets for the current financial year.” That is obvious to every honorable member of this House, and in large measure it is due to the failure of this Government to adopt a sound financial policy in recent months.
Paragraph 19 of the report states -
Reduction in government expenditures at the rate of £15,000,000 a year is the key to the whole position. The possibility of recovering financial equilibrium and general prosperity within a period of three years depends entirely upon the adoption of this policy by the respective governments. Any lesser reduction would not only postpone the return of financial stability, but would postpone the restoration of prosperity to the people of the Commonwealth as a whole.
The report contains some very valuable material relating to interest rates, about which a most active discussion is taking place in New South Wales at the present time. It is most important that the people should arrive at a sound judgment at a time when the suggestion is made that interest rates could be reduced, with consequent benefit to the community as a whole, by the repudiation either wholly or in part of the payment of interest on government loans. Mr. Lang is putting it to the people of Australia that, if he were to reduce from their present figure to 3 per cent, the interest rates on all government loans in New South Wales, the result would be a general reduction of interest rates throughout the community. As a matter of fact, such action would inevitably have exactly the opposite effect; it would raise the price of money. I invite honorable members to consider what the effect would be on the price of bonds; £100 bonds would probably fall to about £30, and the interest rate obtainable in the market would necessarily rise. The Treasury experts say in their report -
Rates of interest are of great importance both to governments and to industry. . . . Whereas the effective yield to purchasers of Australian stocks has risen to an alarming extent both at home and abroad, the rate for sound investments of new savings has moved in the opposite direction in the world’s capital markets. This anomaly is due in the main to lack of confidence in the position of Australia. While this condition continues, any reduction in rates of interest for Australian Governments or industries is impossible. The effective rate of interest is, indeed, likely to increase unless confidence is restored. At present there is a flight of capital which is registered in the panic rates of exchange now prevailing. There are also large maturities of loans due for conversion in the near future. No approach to any reduction of interest rates is feasible until confidence is completely restored. To temporize with the situation is only to postpone the time when a reduction of interest rates will be possible. . . Reduction cannot be accomplished by direct government action.
I agree with and support what I have read from the experts’ report.
I invite this House, adopting any standard or criterion that can be suggested, to determine whether this Government should continue to have the ‘ confidence either of this House or of the community. I judge it first, by the standard of its own promises. It is obvious that it cannot measure up to that standard. I take the standard of unemployment as a barometer of the general position of the community. Could anything be finer for the citizens of any country than the abolition of unemployment? This is the only Government that has ever promised to abolish unemployment; and had that been possible, is it not reasonable to suppose that it would have done so? The truth of the matter is that it cannot be done by any government anywhere. But, judged by that standard, and measured by its own promises, it has completely failed.
Let us take, further, the standard of public credit. Public credit in Australia has never been so low as it is at the present time; it has fallen continuously since the present Government has been in office, largely on account of a feeling of insecurity and a lack of confidence in the reliability of the promises and the undertakings for which the Government has been responsible.
In another report that w”as presented for the information of the Premiers of the States and the Prime Minister of the Commonwealth by the officers of all the Treasuries of Australia, it is pointed out that, on the 27th January, 1931, the following were the prices of comparable 5 per cent, securities: -
Those figures show that an Australian £100 bond, is valued at £24 less than a New Zealand bond for the same amount, and at £27 less than a South African bond. Yesterday, as honorable members can learn from the press the price of Australian stocks in London was still lower, 5 per cent, securities being sold at from £71 10s. to £73 15s. In Australia to-day it is possible to buy Commonwealth bonds at a figure that will give a return of over 12 per cent. So long as the price of Commonwealth bonds depreciates in this manner owing to lack of confidence in a government, it is useless to hope for any reduction of interest rates.
I take as another criterion the rate of exchange. I remind honorable members that, in relation to the prices of their primary products, both South Africa and New Zealand are suffering from the same difficulties that confront Australia to-day. Yet their bonds have not fallen in like manner ! As I have said, Commonwealth bonds ‘ can be purchased in Australia to-day that will show a return of from 12 per cent, downwards. £100 abroad becomes about £130 in Australia. On the other side of the world abundant money is available at rates ranging from 2 per cent, to 3 per cent. ; but it does not come to Australia ! Unfortunately, in the last eighteen months or thereabouts Australia has not been favoured by investors. This is a country which needs a greater volume of private capital from abroad.
The exchange position is also a means of measuring confidence in the Government. There has been a disastrous flight of capital from the Commonwealth. Exchange stands at 30 per cent, adverse to Australia. This figure does not represent the true trading position. It largely represents apprehension and fright. At present people who are afraid of losing their money are getting, it out of the country by almost any means or device at their disposal, and are investing it in countries in which it will be safe. This flight of capital from Australia began only when responsible members of this Government and of the ‘party opposite commenced to advocate inflation or repudiation proposals. Are the millions of pounds sterling invested in Australia by private individuals overseas likely to remain here when the Government in power is proposing inflation, and when financial proposals of the honorable member for Bendigo (Mr. Keane) are regarded as worthy of the consideration of his party? In these circumstances can investors have any confidence in the country at all? There has been not only a flight of capital from Australia, but the value of our currency has seriously decreased. At present the Commonwealth £1 bank-notes are valued at only 12s. 6d. in London, and our silver coinage is also being refused in some parts of the world. This is due solely to lack of confidence in the Government, and to nothing else.
Let us now take another standard - that of the political standing of the Government. We have witnessed the recent intriguing and manoeuvring for positions of various kinds on the part of honorable members opposite, to which I do noi intend to refer. But I intend to1 say a word or two concerning the East Sydney by-election. Although the East Sydney seat has been held by the .Labour party for twenty years, this Labour Government, which professes to represent the majority of the people, has not put up a candidate for that seat. No member or supporter of this Government has ventured upon the platform in the East
Sydney by-election. Never before has there been such an example of political cowardice. What can one think of a government which has not sufficient courage to nominate a candidate for what has always been regarded as one of its strongest seats, and refuses to say for which candidate its supporters should vote?
The position in Australia is difficult for any government; but the difficulties have been infinitely aggravated by the vacillation and indecision of the present Administration. If the measure for a “ fiduciary currency “ is brought down, the effect will be to debase our currency and credit merely for political purposes. We shall never overcome our troubles until such a policy is reversed, and there will be frightful suffering before that can be done. There can be no real improvement with respect to any of the matters to which I have referred until we have a government in which not only this House, but also the people of Australia and people overseas, have complete confidence. There must be confidence in the integrity and capacity of the Government and its members. There must be an indication of resolution and determination on their part to proceed immediately with a clearly-defined policy. I have, I think, demonstrated the Government’s almost incredible incapacity.
We have been informed by the Prime Minister (Mr. Scullin) that politically controlled inflation is now the Government’s policy, and I say, unhesitatingly, that such a policy is placing the country on the road which leads to repudiation, national dishonour, ruin, and disaster. There can be no trust or confidence in any government which adopts inflation as its considered policy, whatever may be said concerning “judicious control” or “ temporary expedients “. At the present rate of governmental expenditure, there will inevitably be governmental default. There must be default unless inflation is introduced, and the result of inflation will inevitably be that there will be an entire absence of stability or security anywhere. and a paralysed state of business throughout the country. There can be no improvement until it is clear that the Government intends to honour its obligations, and that, in order to do so, it will reduce governmental expenditure. Unless that is done, it will ultimately not be a question of reducing salaries or pensions, but of the Government’s ability to pay them at all. A real reduction of expenditure would be the first step towards the restoration of confidence, and there would then be an immediate improvement. There would be a release of credit for industry on account of the smaller financial demands of the Government; the price of Commonwealth stock and bonds would improve; there would be a better security for overdrafts, and interest rates would fall. It is impossible to raise loans until our credit has been restored ; if that were done it would be possible to float a loan in London to fund our accrued liabilities overseas. Having regard to the present exchange rates, it is most important that that should be done. In view of the Government’s financial proposals involving inflation, the raising of loans is impossible. If our London liability were funded, some £23,000,000 would be made available for financing industry and for the benefit of the farming community. With the restoration of confidence it would also be possible to float a loan in Australia for the purpose of assisting the wheat-growers. This Government will be quite unable to render any assistance in that direction so long as it proceeds with its present policy. It appears to me that assistance to the farmers will have to be obtained without governmental help.. If the Government introduced a sound financial policy, unemployment would also decrease.
Reference has been made to a reduction of £15,000,000 in Commonwealth and State expenditure upon which I do not propose to go into details at this juncture as I am not delivering a budget speech. It is sufficient to say, as far as the Commonwealth expenditure is concerned that, subsequent to the presentation of the budget last year, I showed how a reduction of £4,000,000 could be made in Commonwealth expenditure, practically every penny of which I specified. The States are beginning to reduce their expenditures, and further avenues must be explored in order to reduce Commonwealth expenditure. The Government has reduced the salaries of certain public servants, but the amount involved is only sixtenths of 1 per cent. of its total expenditure. At a time like this, it is a shame and a disgrace to pretend that that is a real contribution towards the rehabilitation of governmental finance. I know that a large number of public servants are ashamed of the present position. In the matter of finance, which is the dominating factor, and that to which I am referring more particularly, there is a way out of our present difficulty; but it involves the complete abandonment of all proposals involving inflation and repudiation, and a return to sane, honest finance. The Prime Minister knows that as well as we do.
Mr Archdale Parkhill:
– He knew it in August last, at any rate.
Mr LATHAM:
– That would mark the transition from despair to hope, and the beginning of a return from depression to prosperity. The Government refuses to take the only road that would lead to the happiness of the people. Its career has been a veritable tragedy of failure. It has inflicted untold injury on the citizens of Australia. Its only policy in the past has been to scrabble for votes, and now it is scrabbling for the votes of the farmers, the unemployed, and of others who are suffering on account of the desperate position in which we are. The Government has dishonored the name of Australia. The Government itself has become almost a thing of contempt, even to its own followers. Its record is beyond excuse, and consists of vain endeavours to patch up its internal difficulties to enable it to cling to office. Its future is without hope, and presents a prospect only of ruin and despair. I ask honorable members to vote on this motion in the true interests of Australia, for which this Parliament is more largely responsible now than at any previous time in its history. If honorable members so vote, they will cast their votes with the Opposition to put out of office a government which has proved itself a menace to the welfare and happiness of the people.
Mr SCULLIN:
Prime Minister · Yarra · ALP
– As was pointed out by the honorable member for Fawkner (Mr. Maxwell) we are gathered together here at a very serious time in the history of Australia. Honorable members have come from all parts of the Commonwealth, and so desirous was the honorable member for Fawkner of the immediate consideration of the business of the country that objection was raised by him even to an adjournment for one day as a mark of respect to members of this House who had died since our last meeting. In spite of such objection, however, the time of Parliament is being used for the making of political charges, and the telling of oft-told tales. Every one of those charges has been repeated and rehashed in the speeches of honorable members opposite, and in the press which supports them, during months and years and decades. Yet, this is the contribution which the leader of the great Nationalist party makes to the solution of the national problems with which we are confronted! There was not a helpful suggestion in the honorable member’s speech. It was a diatribe of abuse, sneers, and insinuations; the most pitiful exhibition of rancor to which I have ever listened. I regret that such a speech should have been made in the Parliament of Australia at this time of national crisis. I shall answer all the charges he made that are worth answering, and they are not many.
The honorable member began by referring to the Government’s large majority, which he described as docile. Yet, in the next breath, he declared that, so little control had the Government over its followers, that we did not even know how they were going to vote on the motion now before the House. I should have imagined that, were the majority as docile as he said, there should be very little doubt concerning the result of this motion, and, as a matter of fact, there can be no doubt whatever about it.
The honorable member spent a great deal of time referring to election promises; but even then his speech did not rise above the level of that which he made when he returned to this Parliament a defeated man after the last election. He mentioned the tariff, and held it a crime against the Government that its tariff policy had not absorbed so many unemployed as we had hoped. If he had taken the trouble to examine all that has occurred, however, he would know that, had it not been for our tariff policy, we should have had many thousands more out of work than there are now. Throughout his speech the honorable member strove to convey the impression that responsibility for all the evils from which Australia is suffering ought to be laid at the door of this Government. Hardly anywhere did he admit that Australia was in the grip of conditions which prevail, not here alone, but throughout the whole world. He said that the Government brought down tariff schedules which had subsequently been changed. In a charitable burst he even went so far as to admit that those proposals must have been due to our ignorance. I remind him that technical mistakes are frequently made in tariff schedules, and those mistakes have to be corrected. The honorable member’s charges are really directed against a body of very competent officers.
The Leader of the Opposition also referred to arbitration legislation, which the High Court declared to be invalid. One would imagine from the honorable member’s remarks that this was the first instance in which the High Court had ever declared Commonwealth legislation to be invalid. The Deputy Leader of the Opposition (Mr. Gullett) asks, “What about the duty on sheepskins ? “ I have no hesitation in saying that a very great mistake was made in imposing that duty, and the mistake was corrected at the very first opportunity that presented itself. The main charge of the Leader of the Opposition in regard to the tariff appears to be that some mistakes were made in the preparation of the schedules, and that we corrected those mistakes. The reason that members of the Nationalist and Country parties are now sitting on the Opposition benches is that they made mistakes, but did not correct them. Therein lay their failure.
The Leader of the Opposition referred to the position in regard to wheat, and reviewed the various methods by which the Government had attempted to assist the wheat-growers. He spoke of the Wheat Pool Bill, which he condemned. I remind the honorable member that the Wheat Pool Bill passed this House without a division. The Leader of the Opposition, who has condemned the bill, had not the courage to vote against it, nor were any of his followers game enough to call for a division. When the honorable gentleman condemns the Wheat Pool Bill he condemns this Parliament, which passed the bill on the voices. It was not our fault that the bill did not become law; the responsibility rests on another place. But we did not stay there. We came forward with another proposition. Again we were confronted by constitutional difficulties. We followed it up with a proposal for a loan; but, so the Leader of the Opposition (Mr. Latham) declares, a week or two afterwards we changed over to another proposal. I suggest, therefore, that, .in regard- to the assisting of the wheat-growers of Australia, the members of this Government have been at least triers, which is more than could be said of the Government which preceded us. It is a fact that we have faced great difficulties, not the least of which has been the opposition in the Senate; but, undeterred by Senate opposition or constitutional obstacles we shall continue to do our best for the wheat-growers of the Commonwealth. So much for the criticism of the Leader of the Opposition with regard to our attitude to our primary producers.
The honorable gentleman jumped backwards and forwards from one subject to another so often that he reminded me of a bird up a tree, hopping from bough to bough, and I venture to think that he and his supporters will be well “up a tree “ when the division on this motion is taken. He told us that certain resolutions of the Labour party had injured the credit of Australia abroad. I have not the slightest hesitation in saying that resolutions were passed by my party, and that they did harm to the credit of this country;;* but for myself I can say that, while I was in London, I did my best to restore its ‘credit; I challenge any honorable member opposite to say that I did anything to injure it. The speeches of the Leader and the Deputy Leader of the Opposition, however, did more injury to the credit of the Commonwealth than any of the resolutions passed by the Labour party.
The honorable gentleman said this morning that Australia’s lack of credit is due to lack of confidence in this
Government, and to nothing else. Could exaggeration go further? But it is effectively answered by a statement in a speech delivered by the Deputy Leader of the Opposition on the 9 th of November last, when he said-
At present, the credit of the Commonwealth is desperately low. It has fallen to a level which actually menaces the whole financial fabric and threatens the Commonwealth with positive eclipse. . . . because Federal and State finance has been unsatisfactory. . . . I include the administration of the last Government. But this is not a time to waste one’s breath in fixing the blame. All parties have been concerned in it. . . . Our position is due to the fact that our credit has become suspect. … I am not charging the present Government with the responsibility of it.
Mr Gullett:
– Not all the responsibility. That extract is well stripped of its context.
Mr SCULLIN:
– Those remarks are a most effective answer to the statement of the Leader of the Opposition this morning that Australia’s lack of credit is due to the lack of confidence in this Government, and to nothing else.
The decline in Commonwealth credit has not been incidental merely to the last year or so; nor does it, as the Leader of the Opposition has suggested, date from the accession of this Government to office.
Mr Gullett:
– Study the price level of Commonwealth bonds and see.
Mr SCULLIN:
– It is true that the decline in .Commonwealth stocks has accelerated in recent months. It would be useless to deny that the prices of our stocks have fallen. I admit that they were higher when the preceding Government was in office than they are today; but the previous Government left them lower than, they found them, and they have been falling steadily for some years. c
Mr Latham:
– They were down £4, and are now down £27.
Mr SCULLIN:
– They dropped more than £8 between 1926 and 1929 in what may be regarded as boom years, when, as the result of good seasons and satisfactory export trade conditions, Australia realized high prices for all export- “ able products. During that time, also, the Commonwealth Government should have been in a good position to borrow money overseas. Despite these advantages, the Bruce-Page Government was unable to balance its budget, and, towards the end ,of itscareer, was unable to float loans in London. Let me illustrate this point. In July, 1928, at a time when the credit of Australia was supposed to be unchallengeable, the Bruce-Page Government issued a loan of £7,000,000. Of the amount required, 87 per cent, was left in the hands of the underwriters. In January. 1929, it again went on the market for £8,000,000, and 84 per cent, was left with the underwriters. This, I remind honorable members, was the position nine months before this Government took office. Nine months before this Government came into office, the Bruce-Page Administration had practically abandoned the idea of raising money in London, and it bequeathed its difficulties in this respect to the present Government. The task before us was colossal. The amounts necessary for conversions and cash loans were greater than were required by any previous administration, because of the ineptitude and extravagance of our predecessors in office. Ip May, 1929, they went on the London market with a conversion loan of which 47 per cent, was left with the underwriters. One honorable gentleman opposite said just now that I was not in Australia when the last Commonwealth loan was floated. It is true that I was not; but I did my best to ensure its success.
Mr Gullett:
– You sacked the man who was responsible for its success.
Mr SCULLIN:
– That statement is not true. Since this Government came into office, it has been obliged to raise £100,686,000- £22,000,000 of new money and £7S,000,000 in conversion loans, all of which were fully subscribed, with the exception of £2,000,000 in November, 1929, when the banks, came to the assistance of the Government. Honorable members opposite twit this Government about that one small loan, but say nothing of all the others. The Leader of the Opposition (Mr. Latham) made particular reference to the balancing of budgets. He omitted carefully to indicate where the £15,000,000 required by the seven Governments of Australia, were to come from. This Government, at the proper time, will- place its financial proposals before the House.
The present Administration came into office sixteen months ago. It found a huge governmental machine going full steam ahead. Departments were built up, one structure upon another, and then a superstructure. This Government set about the arduous task of cutting down administrative costs, but found itself impeded by contracts which had been entered into by the previous Government, under which highly-paid officials drew salaries of £2,000 a year for positions, some of which were sinecures. These officials could not be removed, because they could produce contracts signed by the previous Prime Minister.
Mr Latham:
– Who are those officials?
Mr SCULLIN:
– If the honorable member wishes names to be bandied about in this chamber I can give them.
Mr Latham:
– If the right honorable gentleman thinks it better to give them to me privately let him do so.
Mr SCULLIN:
– I can give them privately.
Mr Archdale PARKHILL:
– The statement has now been made in public; let the names be given in public.
Mr SCULLIN:
– Very well. I cite the appointment of Mr. Trumble, a very good officer, but with next to no duties to perform. One man is now doing Mr. Tremble’s work in addition to his own ; but I could not remove Mr. Trumble because of a contract which he held. I was obliged to make a re-arrangement with the Defence Department so that he could be employed for the balance of the period covered by his contract.
It is true that since this Government has come into office expenditure’ has increased, but that is due to causes which I have already stated, but which will bear repetition - causes over which present Ministers have no control. Increased expenditure upon interest, sinking fund and pensions, and increased payments to the States alone account for the swelling of the expenditure by between £4,000,000 and £5,000,000 a year. Ministers, however, have in sixteen months cut down departmental and administrative expenditure by £2,300,000, and the axe is still being applied to what is practically extrava gance incurred by the previous Government.
The Leader of the Opposition said that when I came back from abroad all sections of the people would have been prepared to follow me. As a matter of fact, I should be welcomed by honorable members opposite only if I betrayed my own political convictions.
Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP
– Come now to the August Premiers’ Conference?
Mr SCULLIN:
– Very well. I attended that conference.
Mr Archdale Parkhill:
– Reluctantly
Mr SCULLIN:
– Yes ; reluctantly, because, with a ‘ temperature of 103 degrees, I rose from a sick bed to do so.
Mr White:
– They took the backbone out of you.
Mr SCULLIN:
– No one could take the backbone out of you, as you have never had one. I advise honorable members who talk about the August agreement to peruse it carefully, because it does not include all the things that have been attributed to it. It was, in effect, an agreement between the various Governments of Australia to balance budgets, and the Commonwealth Government still stands by it; but any man who has studied the matter impartially must admit that the rapid changes which came about soon after August, particularly the decrease in. imports and the drop in price values, affected all revenues and made the balancing of budgets impossible. The Commonwealth Government is not the only one to fail in that respect. No signatory government to that August agreement, Nationalist or Labour, is balancing its budget.
Mr Morgan:
– The Queensland Government is doing so.
Mr SCULLIN:
– The Queensland Government is the only one to find that its predecessors had bequeathed it a surplus. It is remarkable how a statement of these truths stir up honorable members opposite.
With a most feeble attempt at mimicry the Leader of the Opposition tried to twist certain words used by me in Sydney. The words were, “ Neither inflation nor deflation is the policy to pursue.” I repeat that the policy of this country should he restoration of confidence and stabilization. But why should those words of mine be used by the Leader of the Opposition in an indictment of this Government? Does not the Leader of the Opposition agree with the policy they indicated ?
Mr Latham:
– That is what I have said.
Mr SCULLIN:
– Then the honorable member ought to withdraw his motion.
NowI come to a juicy morsel, so simple that the honorable member for Balaclava (Mr. White) will be able to follow me, and understand where previously he could not. The Leader of the Opposition has dragged into this debate the name of the honorable member for Dalley (Mr. Theodore), declaring that I have lost sight of the moral aspect of the matter - that I regard it as irrelevant. I challenge any honorable member to cite anything in my public life which indicates that I regard the moral aspect of any matter as irrelevant. On the other hand, I can give moral support to the action of the Government in reinstating the honorable member for Dalley as Minister. In proof of his assertion that the honorable member for Dalley had nearly ruined Queensland before leaving it, the Leader of the Opposition read a paragraph from the Bulletin, and when he was talking of probity and honour he supported his remarks by reading a paragraph from the Labor Daily. I cannot imagine the honorable and learned member relying upon such evidence to win a case before a judge.
Mr Archdale Parkhill:
– Let the right honorable gentleman produce his proof to the contrary.
Mr SCULLIN:
– I shall do so. The Leader of the Opposition said that, at the outset, the honorable member for Dalley had done the correct thing by resigning his portfolio. He did; but he went further and took the manly course of challenging the Queensland Government to prosecute him criminally - to put him in the dock.
Mr Bayley:
– Why did he not proceed against Smith’s Weekly for libel?
Mr SCULLIN:
– The honorable member for Oxley (Mr. Bayley), whose bitterness and spleen are growing with his years, is merely repeating what his leader has frequently declared. Why should men against whom charges are laid be compelled to sue newspapers for libel in order to clear their names?
Mr Gullett:
– The honorable member for Dalley was found guilty by a royal commission.
Mr SCULLIN:
– He was not. The responsibility for giving an opportunity to clear his name to one who was figuring prominently in the life of this nation rested with the Government that laid the charges against him. That opportunity was not afforded by the royal commission referred to; it was denied to the honorable member for Dalley.
Mr Morgan:
– Invitations to him to give evidence were sent by telegram and otherwise.
Mr SCULLIN:
- Mr. Speaker, are your warnings to that parrot in vain?
Mr SPEAKER:
– If the honorable member for Darling Downs interjects again, I shall name him.
Mr SCULLIN:
– When the honorable member for Dalley resigned from the Cabinet because of the report of the Royal Commission before which be was denied the opportunity to appear, he challenged the Government of Queensland to prosecute him. Every fair-minded man and woman will say that if there was the slightest foundation for the commission’s report the honorable member should take his place in the criminal dock, and that any government with a sense of responsibility which believed that the report as it applied to the honorable member was well founded, would have taken steps to prosecute him on a criminal charge.
Mr Latham:
– That is a very confident legal statement.
Mr SCULLIN:
– It is sound. One has only to study the words in the report itself - -
Mr Gullett:
– Read them.
Mr SCULLIN:
– They have already been read often enough by the honorable member.
Mr SPEAKER:
– It will not be permissible to read anything from that report.
Mr SCULLIN:
– The honorable member for Dalley resigned from the Cabinet and challenged the Government of Queensland to institute a criminal prose- cution. But the Leader of the Opposition interfered; he thrust himself into a matter that was not his concern. He rushed in to advise the Premier of Queensland as to what he should do.
Mr Latham:
– I did nothing of the kind.
Mr SCULLIN:
– Then the honorable member must take to task his Nationalist colleague, the Premier of Queensland.
Mr Latham:
– I had nothing to do with the matter.
Mr SCULLIN:
– I shall quote from the debate in the Queensland Parliament on the Crown Remedies Act Amendment Bill, which related to the Mungana inquiry. The following extract is from the Queensland Hansard of the 9th September, 1930, page 847 : -
Mr. Forgan Smith. What did Mr. Latham think about it?
The PREMIER. - He said right from the very beginning that there was no chance of a criminal prosecution-
Mr Latham:
– I have always said that. but he also said that he thought there was a chance of a civil prosecution.
Mr Latham:
– Hear, hear! I have said that.
Mr SCULLIN:
– The Premier of Queensland said -
I did not ask him for an opinion - it was volunteered. I want to make it quite definite that there was no request made to Mr. Latham for an opinion.
Mr Latham:
– That was after the commission’s findings. I had nothing to do with the commission.
Mr SCULLIN:
– I did not say the honorable member had. My statement is that after the honorable member for Dalley resigned from the Cabinet and challenged the Queensland Government to prosecute him and so afford him his only chance to clear his character, the honorable member for Kooyong thrust himself forward. Actuated by political prejudice he interfered in the province of another government by volunteering his advice gratis.
Mr Latham:
– I suppose I have discussed the matter with many people.
Mr SCULLIN:
– For the sake of Australia, it was the duty of every public man in Australia, regardless of his political opinion, to give all the aid he possibly could to another public man to clear his name. The Leader of the Opposition gave advice which would thwart the endeavours of the honorable member for Dalley to vindicate his reputation.
Mr Latham:
– I gave no advice at all.
Mr SCULLIN:
– At any rate the opinion which the honorable member volunteered was accepted and acted upon by his fellow Nationalist, the Premier of Queensland. When I returned to Australia from my trip abroad, I learned of what was occurring; a serious charge had been hanging over the honorable member for Dalley for months, and there seemed no immediate prospect of finality being reached. The Leader of the Opposition talked to-day about the urgent need to do something that would improve the financial position of the country, yet he and his supporters have been running about the country besmirching the character of a Commonwealth Minister who has got his head down and is earnestly doing a job to help his country. The Queensland Government, in order to succeed with its political stunt, arranged to dodge a criminal prosecution, and institute a civil action which will not afford the honorable member for Dalley an opportunity to clear his name.
Mr SPEAKER:
– The Prime Minister will not be in order in offering observations on a matter which is sub judice or in assessing the possible consequences of pending legal proceedings.
Mr SCULLIN:
– I have no desire to do that.
Mr Francis:
– The Prime Minister has been doing that for the last quarter of an hour.
Mr SCULLIN:
– If I have unwittingly transgressed I have merely followed the example set by the Leader of the Opposition. The honorable gentleman talked of probity and honour among public men, and I propose to show that politics have dictated his attitude throughout the history of this matter. From the beginning I never believed that the Treasurer was guilty of the charge that has been laid against him. If I had thought so I would have advised him to resign from this Parliament.
Mr Archdale Parkhill:
– He should have resigned from Parliament.
Mr SCULLIN:
– The members of the Opposition never suggested that.
Mr Archdale Parkhill:
– Yes we did.
Mr SCULLIN:
– Not at the time.
Mr Gullett:
– Why did the Prime Minister accept the honorable member’s resignation from the Cabinet?
Mr SCULLIN:
– Because he desired it, and because he wanted the Queensland Government to launch a criminal prosecution against him. Obviously, no man could remain in the Cabinet with a criminal prosecution hanging over his head. A mere civil action is in a different category. The Queensland Government,in order to achieve its purpose, passed through the State Parliament the Crown Remedies Act Amendment Bill, which prevents the court from insisting on a criminal prosecution.
Mr Latham:
– I rise to a point of order. After the ruling you, Mr. Speaker, have given, how much further may the Prime Minister discuss the details of a pending action?
Mr SPEAKER:
– I have already ruled that the Prime Minister will not be in order in referring to any legal proceedings now pending.
Mr SCULLIN:
– It was not my intention to do so, and what I am about to say will not touch the proceedings pending in the law courts. I quote again from the Queensland Hansard of the 26th August, 1930-
Mr. Forgan Smith. The opinion of the Attorney-General was that no criminal charge could be sustained.
The Attorney-General. - I repeat it.
Mr. Forgan Smith. Criminal proceedings were not taken because . . . they could not secure a verdict.
The Attorney-General. - You are quite right.
Mr POLLARD:
BALLAARAT, VICTORIA · ALP
– Let me ask you this question point blank: if you take proceedings under this act, can Theodore go into the box and get a verdict of “ Not guilty “ in respect of the charges made by the Commissioner?
The Premier. - He is not charged with them.
From the Queensland Hansard of the 9th September, I quote this passage: -
Mr. Hanlon. Did counsel suggest that you had better grounds for civil proceedings than in a criminal prosecution.
The Premier. - They suggested that we had no grounds for a criminal prosecution, but we had a reasonable chance in a civil prosecution.
Mr Latham:
– Obviously, it is a matter of evidence.
Mr SCULLIN:
– When I returnedto Australia I was disappointed to find that the charges were still pending, and likely to drag on for months. When. I examined the facts I have already mentioned, and many others which I am not permitted to put before the House, I, believing him to be the innocent victim of political persecution, was not prepared to allow him to suffer further.
Mr Archdale Parkhill:
– That is why the right honorable gentleman put two good men out of the Cabinet.
Mr SCULLIN:
– I deny that I put any men out of the Cabinet. No man could have done more than I did to hold my colleagues together.
Mr ARCHDALE PARKHILL:
WARRINGAH, NEW SOUTH WALES · NAT; UAP from 1931
– They stood to the Prime Minister like men and brothers.
Mr SCULLIN:
– And while they stood to me like men and brothers the honorable member and his leader were traducing them in this House.
Mr Archdale Parkhill:
– We offered to co-operate with them.
Mr SCULLIN:
– Yes, with a stiletto in hand.
Mr Archdale Parkhill:
– That is the method adopted not by us but by the supporters of the Prime Minister.
Mr SCULLIN:
– This is what the Leader of the Opposition. (Mr. Latham) said when my trusted colleagues were leading this Government -
The Ministry has proved itself to be incoherent and incompetent in this, as in nearly all the other business which it has brought before this chamber.
Later, the honorable member stated-
This year has been a year of almost unmitigated disaster for the people of the Commonwealth and that is largely due to the policy or absence of policy of this Labour Government.
That statement was made when the Government was being led by the two honorable gentlemen to whom the honorable member for Warringah (Mr. Archdale Parkhill) has referred. When, as Acting Treasurer, Mr. Lyons was introducing the Income Tax Salaries Assessment Bill, the Leader of the Opposition said -
The bill in its title and in the whole of its drafting is a piece of hypocrisy.
Honorable members opposite attacked both the Acting Prime Minister and the
Acting Treasurer while they were leading the Government. I read of those attacks when I was in London. Now honorable members opposite talk about what I have done to those two gentlemen. Let me say that I was anxious that my colleagues should remain in the Cabinet, and while it is true that they were loyal to me, I was loyal to them. Therefore I refuse to accept’ the position as honorable members opposite put it. Regardless of what political consequences might follow, I was not prepared to advocate the exclusion of the honorable member for Dalley (Mr. Theodore) from the Cabinet. I was not unmindful of the political capital that the Opposition would make out of his reinstatement, nor was I unmindful of the sneers and insinuations that might be levied against my own personal honour, because of the support that I had given to that honorable member. Believing in his innocence, believing that as the charge against him had been held up for seven months, another seven months would probably elapse before the case would be heard in court-
Mr SPEAKER (Hon Norman Makin:
– I ask the Prime Minister to recognize my ruling by not referring further to that subject.
Mr SCULLIN:
– ‘Knowing all these things, I, as leader of the party, was placed in the position of having to give advice, and, in advising my supporters to reinstate the honorable member for Dalley as Treasurer, I consider that I acted rightly.
Mr Latham:
– The Prime Minister was responsible for the reinstatement of the Treasurer.
Mr SCULLIN:
– The Leader of the Opposition, as usual, is only too ready to accept as truth what he reads in a. sub-leader of a newspaper supporting his party. I had not the right to reinstate the honorable member for Dalley as Treasurer, because, in accordance with the rules of the Labour party, the Ministry is elected by Labour members in caucus.
Mr Latham:
– I said that the Prime Minister assisted to reinstate the honorable member for Dalley.
Mr SCULLIN:
– The honorable member said that I attended the party meeting and. followed the lead set by the members. Let me say that at that meeting I gave my advice as leader of the party, and the majority of the members accepted it.
Mr Gullett:
– Only 24 out of 55 members supported the Prime Minister.
Mr SCULLIN:
– The action taken at. that meeting has been since confirmed by secret ballot.
Mr Gullett:
– Not half of the supporters of the Government voted for the reinstatement of the honorable member for Dalley.
Mr SPEAKER:
– The honorable member for Henty (Mr. Gullett) must cease interjecting.
Mr SCULLIN:
– I told my supporters that I was prepared to take the political consequences of my action, and the majority of them were prepared to accept my advice, so that an injustice might not be done to any member of the party. There are many people who, although believing in the innocence of the honorable member for Dalley, say that . he should have cleared his name before being reinstated as Treasurer. That would be quite fair in normal circumstances, but in this instance the honorable member for Dalley is being unjustly treated, and it is only right that his colleagues should stand by him. I am standing by him. I shall withdraw nothing that I have said, nor shall I apologize for anything that has transpired in this matter. After all, what comprises the speech of the Leader of the Opposition?
Mr Archdale Parkhill:
– The Prime Minister has not touched upon it yet.
Mr SCULLIN:
– I have answered everything in it that is worth answering. His speech was merely a rehash and repetition of matters that the members of the Nationalist party have trotted out from year to year. The Leader of the Opposition has said that unemployment has grown, and he suggests that we are to blame for that. He disregards what we have done- to assist the unemployed. He said that our credit is bad, and that the values of our stocks are low. He disregards the fact that those values were dropping before the Labour party took office. The Leader of the Opposition then dealt with election promises. He recited them one after the other, as he did sixteen months ago. He has repeated them again and again. Never before have I listened to a weaker or more futile attempt on the part of a leader of the Opposition to censure the Government.
Sitting suspended from 1.5 to 2.15 p.m.
Mr Latham:
– by leave - In his speech this morning the right honorable the Prime Minister (Mr. Scullin) referred to some statements in Queensland Hansard. I desire only to say that I was in no way associated with the initiation of the proceedings before the royal commission in Queensland, or with the proceedings themselves, either directly or indirectly, nor have I advised the Government of Queensland in any respect in relation to any subsequent proceedings of any character. I shall quote from the Queensland Hansard of the 9th September, 1930, page 849, in which Mr. Moore, the Premier of that State, is reported to have said -
I did not ask Mr. Latham for any legal opinion: but he and Mr. Scullin both thanked me for sending the matter- the evidence and the report - down so promptly. We sent it down by air mail. In commenting upon the report, Mr. Latham said that he had not been able to go through all the evidence, but that it did not appear to him that a criminal prosecution would be possible, though it was possible that civil proceedings might lie. I did not ask him for an opinion - it was volunteered. I want to make it quite definite that there was no request made to Mr. Latham for an opinion, and the terms of reference were not submitted to him:
I did not give any opinion, although I should have been perfectly entitled to do so, if asked; but in the course of conversation with Mr. Moore, as in conversations with other persons, I did say that, owing to the technical rules of procedure relating to evidence in criminal trials, it did not appear to me that there would be any chance of obtaining a conviction in this case, apart from any other consideration of any description.
Mr PATERSON:
Gippsland
– Honorable members opposite must have been profoundly disappointed with the speech of their leader this morning. I am not given to disparaging the utterances of honorable members opposite; but it is not too much to say that the speech of the Prime Minister (Mr. Scullin) can best be described as pitiable. The right honorable gentleman replied to very little that was said by the Leader of the Opposition (Mr. Latham) ; indeed, the voluntary restrictions he placed on himself by the requests that he made to you, Mr. Speaker, in regard to the duration of his speech, suggest that he felt that he was dealing with a matter concerning which the least said the most easily mended.
On the right honorable gentleman’s return to this country from England there was a general disposition on the part of persons belonging to all political parties to withhold criticism, and to give him a chance to show his mettle. Every one realized that he would have to tackle a very difficult task, and there was a general feeling that he should be given a chance to do so without undue criticism. He had talked so bravely on the other side of the world that most people felt that he should have an opportunity of, translating his words into action. In his absence overseas the ship of State was steered very largely from the forecastle, with the present Treasurer (Mr. Theodore) as the leading deck-hand. There was about as much cohesion in the Cabinet as is to be found in a spilt bag of marbles. Some Ministers said certain things ; other Ministers contradicted them. From different platforms they gave expression to different views almost from day to day. The honorable gentleman who was Acting Prime .Minister (Mr. Penton) made a statement - somewhat belated, it is true, but, nevertheless, a statement welcomed in this House - that Sir Otto Niemeyer was invited by the present Government to visit Australia, that the Government was indebted to him for the advice which he gave, and that that advice had been given at its request. In spite of that announcement, we had the spectacle of three Ministers - one of whom is still a Minister - from public platforms in different parts of the country insulting in the grossest possible way the invited guest of their own Government.
So far as the party behind the Government is concerned - I refer to the
Labour caucus - never before in the history of constitutional government had a caucus shown such contemptuous disregard for the views of senior Ministers, upon whom the load of responsibility of governing the country rested, as was shown during recent months. On more than one occasion, Ministers were compelled at the point of the caucus bayonet to do things which their better judgment told them ought not to be done. One example of that nature was the making of certain appointments to the judiciary in the absence of the Prime Minister and the AttorneyGeneral. Another instance was the incredibly stupid action by which an export duty was placed on sheepskins. I shall not dilate upon that action beyond saying that, so far as I am aware, it was the first time in Australian history that an attempt was made to impose a tax on exports. Australia is regarded as a protectionist country, in which most industries - certainly, nearly all secondary industries - receive for their products something in excess of world prices. There are other industries in Australia which are on the ground floor in that they are conducted on a freetrade basis. Among them is that industry, in which those persons who have sheepskins to sell are included. Hitherto, it has been thought that the man on the free-trade level, who has to accept in a protectionist country free-trade prices for his goods, could not be forced lower than that level; he has been regarded as being on the ground floor. But this Government brought in a schedule by which a tax was placed on exports. Even if business had not been entirely suspended, the effect was to reduce below the free-trade level the price which the man who produces those skins would receive. In other words, he was pushed below the ground floor level into the basement - and that in a country where secondary industries are two or three stories above ground level.
A third decision of the Labour caucus - a decision more farreaching, revolutionary, and dangerous than the two I have mentioned - was that the loan which was to be redeemed in December should not be redeemed in the ordinary way. Caucus decided that it should be redeemed - if one may describe the decision by that term - by inflating the paper currency; and that if the Commonwealth Bank did not show itself agreeable to that course, or could. not be compelled to adopt it, then payment was to be postponed for a year or two. That decision of the caucus was frustrated only by the Acting Treasurer (Mr. Lyons) refusing to accept dictation from an irresponsible majority. He defied that majority, and, with the assistance of the Acting Prime Minister (Mr. Penton), made arrangements for the redemption of the loan with real money, thus saving Australia from the intense humiliation which would have been felt by its people had effect been given to the decision of caucus.
Mr Martens:
– What is real money?
Mr PATERSON:
– That which is backed by something substantial. I do not suggest for a moment that the people of Australia blame the Prime Minister for these things. He was absent when they were done, but the people were under the impression that on his return he would solidly support the Acting Treasurer in his stand against inflation. The people had the right, if not the reason, to expect that on his return to the ship of state he would grasp the tiller firmly, and steer a straight course, and that he and the Ministers who went overseas with him would be found ranged shoulder to shoulder with the two Ministers who saved Australia from humiliation in their absence. The country was entitled to expect that these five senior Ministers would stand together with their backs to the wall and fight the inflationists, determined to carry out the self-imposed obligation of honoring the compact made in Melbourne immediately before the Prime Minister sailed. That was the compact to endeavour to balance budgets, and its terms stated their “ fixed determination “ to do so. The Prime Minister, the Acting Treasurer, and the Premiers of the various States were present, and they affirmed their “fixed determination” to balance their budgets.
But the people who expected something of the Prime Minister have been wholly disappointed. They have been completely disillusioned. On the Prime Minister’s return to Australia lie found that a byelection was in progress. The people felt that here was an opportunity for him to give a definite lead to this country; but, instead of doing that, he sat on a rail, paid fulsome compliments to a man whose resignation from the Government he had regarded as indispensable some six months before, and, after saying that he stood neither for inflation nor deflation, he slipped off the rail, and espoused the inflationist cause, the side on which were the big battalions, if not the brains, of his party. The Prime Minister turned his back upon the counsel of the man who had saved Australia from disgrace in his absence.
It is remarkable that this policy of inflation should be adopted by the Prime Minister, in view of his earlier statements, and it is equally remarkable that it should be put forward by the present Treasurer (Mr. Theodore), having regard to what was said by him in 1923. At that time he was Premier ,01 Queensland, and this is what he then had to say concerning the inflation which he is now advocating -
Australia should make every effort to maintain a sound money basis. The world has had many salutary lessons in recent years of confusion caused by unstable money. Trade is paralysed, commodity prices soar sky high, wage standards are lost and national bankruptcy ensues. It is a misconception to think that by adding paper to currency any additional wealth is created. To merely pay higher wages in paper achieves only disappointment, as the purchasing power of paper money will be less than the purchasing power of gold by the amount which corresponds to the extent of the inflation. By inflating the currency we get into a vicious circle. Once the issue of paper exceeds the currency requirements of the community the value of money is depreciated, and commodity prices commence to soar. None suffers more than the workers, because their wages are paid on the assumption that commodity prices are in gold and not inflated paper prices. Wages are always less than they should be in countries that practise inflation.
Whatever confidence the people as a whole may have had in the Prime Minister on his return from Great Britain two months ago, has now disappeared. One reason for this is the lack of courage which he has shown to do unpopular things that are essential for the preservation of our national solvency; another is his acquiescence in the state of affairs in which the unemployed and the im- poverished primary producers carry almost the whole burden of sacrifice in Australia, while more than 99 per cent, of the Commonwealth public servants escape any share of it.
Yet another factor that has caused whatever confidence the people had in the Prime Minister to disappear is the prominent part he has played in debasing our former standard of political honour by restoring to place and power one whom a royal commission of unimpeachable integrity and unquestionable impartiality had declared to be guilty of fraud and dishonesty. There was a time when the merest breath of suspicion overhanging a public man was an insuperable bar to his advancement to a public position of honour and responsibility, if not, indeed, to any participation in public affairs. If the Prime Minister and other members of his Cabinet are satisfied with a lower code of ethics than has obtained in the past, they have no right to force that lower code upon this Parliament. For the honour of public life I hope that the Treasurer will be able to establish his innocence; but, until he has done so, it is an insult to this Parliament that he should occupy his present position. Can the people be expected to accept the financial panaceas which come from such a quarter in the country’s hour of financial and economic adversity? The Prime Minister says that what we need is a restoration of confidence. Is this a means which he employs to that end? Is there any precedent throughout the Parliaments of the Empire for such a brazen disregard of all that is right and proper in the circumstances?
Last August, prior to the Prime Minister’s departure for England, an important conference, to which allusion has been made by the Leader of the Opposition '’Mr. Latham) and the Prime Minister (Mr. Scullin), was held in Melbourne, and the Prime Minister left a sick bed to attend it. As I have already mentioned’, a resolution was passed, by which the representatives of every Government in Australia. Commonwealth and ?tate, irrespective of its political complexion, expressed their fixed determination to live within their incomes. The budget brought down by the Prime Minister in July proposed an expenditure £4,000,000 greater than had been budgeted for by the previous Government in its last year. I admit everything that has been said to the effect that some of these increases were due to extra sinking fund payments, and some to increases in old-age pensions and so forth; but the fact remains that, in this year of unexampled difficulty in the balancing of budgets, the proposals submitted by the Prime Minister in July last were for an expenditure £4,000,000 greater than that of the Bruce-Page Government in its last year. It was realized by August that it would be impossible to carry on successfully on that basis. We were slipping back, so far as the Commonwealth Government was concerned, leaving out of consideration altogether the position of the States, at the rate of £30,000 a day. The conference met and stated its fixed determination to balance budgets. Almost immediately an improvement occurred in our credit both in Australia and overseas. People thought that at last something was to be done. At that time Australian stocks in London were about four points behind New Zealand stocks; but within a few months they were between £20 and £30 behind them. To show how the dilatoriness of the Government - to use no stronger term - has affected our credit, I also direct attention to the fact that while Canada was able to borrow money in New York for 4-J per cent, at par, our own 4$ per cent, stocks - we had some there, because the former Treasurer borrowed money in New York two or three years ago - were obtainable at about £60. This means, to put it in plain English, that the American financier who is satisfied with 4J per cent, on money lent to Canada feels that the risk in respect of money lent to Australia is so great, on account of the present Government being in office, that he must have 1 per cent, or 8 per cent, instead of 4£ per cent. In ‘ order to obtain that percentage it is necessary to buy our stocks for a little more than half their face value.
Weeks went by after the holding of the August conference in Melbourne before anything whatever was done. But eventually Parliament was summoned to meet on the last day in October. When we assembled the sitting was immediately adjourned. We wasted our time in coming here, for we were told that nothing would be done until the following week. The reason for that was that, although the Acting Treasurer (Mr. Lyons) had prepared an amended budget with the object of effecting considerable economies, his proposals were not acceptable to caucus, which refused to adopt them. A delay of another week ensued while fresh proposals were being prepared. When the Acting Treasurer made his statement the following week it was an admirable survey of the position, but when the honorable gentleman came to that part of it which required deeds, it was found that the words and the proposed deeds did not fit. It was quite evident that the honorable gentleman’s hands had been tied behind his back, and that he had not been permitted to do the thing that he had set out to do. He was prevented from doing what he desired to do to give effect to the compact made in August last year. He informed us that on the basis of the budget brought down by the Prime Minister in July, it would be possible, if trade revived and if the amount of employment available increased, to finish the year with a deficit of between £8,000,000 and £10,000,000; but that if the depression continued - and things have been going from bad to worse since then - we could expect a deficit of between £12,000,000 and £15,000,000 on the budget introduced in July. After the brave words which had been spoken at the conference in Melbourne in August, we felt that when Parliament was summoned for what was described as an economy session some effort would be made to balance the budget at a point at least midway between the most optimistic and the most pessimistic figures of the Acting Treasurer, namely, £8,000,000 to £10,000,000 and’ £12,000,000 to £15,000,000 respectively.
But the Acting Treasurer (Mr. Lyons) was not allowed to bring down proposals which could be expected to have even that effect. He was merely permitted to make proposals to bridge the gap to the extent of £6,750,000. How was this to be effected? One might have expected that some real economies would have been proposed. But the’ first suggestion was that the amount to be paid into the sinking fund, on the basis of the payments made in previous years by the Treasurer of the preceding Government, should be reduced by £2,000,000. In the course of his statement on that occasion, the Acting Treasurer paid a tribute to the Treasurer of the former Government (Dr. Page) upon having paid into the sinking fund during the period that that Government was in office - nearly seven years - £14,000,000 more than was strictly necessary in order to conform with sound sinking fund practice. Another so-called economy was the reduction by £500,000 of expenditure by the Postmaster-General’s Department. The result of this action has been that country postal facilities have been seriously reduced although city postal facilities, including two postal deliveries a day, have been continued. The only attempt that was made to economize in allowances, salaries, and wages was to impose a tax of very modest proportions upon the emoluments of Ministers and members of Parliament, and a certain number of civil servants in receipt of more than £725 per annum. A salary of £14 per week was regarded as a sort of basic wage for the Civil Service. No officer in receipt of less than that sum was expected to make any sacrifice whatever although Australia was at a serious financial extremity. At the same time, heavy additional taxation was imposed, some of which was of a most cruel kind. A primage tax of 4 per cent, was imposed without any exemptions whatever. The tax was chargeable on such essential commodities as phosphatic rock used in the manufacture of superphosphate, woolpacks, wheat sacks, and things of that kind, many of which must be re-exported. According to the honorable member for Echuca (Mr. Hill), who is an authority upon this subject, the imposition of the 4 per cent, tax on these commodities has placed an additional burden of £180,000 per annum on the shoulders of the primary producers, many of whom are in such a serious plight to-day that they do not know at what moment their mortgagees might foreclose upon them and turn them off their blocks.
Do honorable members realize that a small reduction of If per cent. in the £11,000,000, which we pay annually to the Commonwealth Public Service, would have provided the Government with more than £180,000? Yet this Government, which pretends to be the friend of the primary producers, preferred to put this additional burden upon these men, who are practically down and out, rather than make a small reduction in the emoluments of the Commonwealth Public Service. It was afraid of losing votes. I have a higher opinion of the members of the Commonwealth Public Service than to judge them in that way. I believe that a very large proportion of those now engaged in the Service would be quite willing to bear a fair share of the nation’s sacrifice, and that the time has come when they should be asked to do so.
The Government has again and again put expediency before principle, and we as a nation are rapidly drifting towards default. In all seriousness I believe that nothing but a change of government can now save Australia from default. If we total the overdrafts and short-dated treasury-bills of the Commonwealth and various State Governments we find that up to the end of February last, those Governments were overdrawn in current expenditure to the extent of nearly £57,000,000. And still the drift goes on. I admit that a considerable part of that money will be made up during the remaining months of the financial year from land tax, income tax, and so forth; but I believe that the amount that comes in will be surprisingly small as compared with the expectations of the Treasurer.
I shall give as an illustration the position of an individual, believing that what happens to an individual and the steps that he has to take to rehabilitate himself are on all fours with the case of a government in similar circumstances. If a man suffers a sudden diminution of income we might forgive him for continuing to live practically at the old rate of expenditure if he had sound reason for believing that in a short time, perhaps within twelve months, his income would be back to normal. But has this Government any reasonable expectation that its revenues will be in any better position next year than they now are ? Is it not absolutely patent to all that, at least so far as income tax is concerned, the receipts of the Government next year, based on this year’s income, must be very much smaller than the negligible amount it will collect this year based on last year’s income.. If the Government is going to call a halt, surely the time should not be deferred until we go absolutely over the precipice into default. For the time being Australia is enormously poorer as a nation than it was a year or two ago, but there are still people who refuse to recognize that fact.
Mr McNeill:
– Does not that happen in every country?
Mr PATERSON:
– I take the opportunity of congratulating the honorable gentleman on his accession to ministerial office. It is true, as the Minister for Health (Mr. McNeill) has said, that the position is common to most countries. But the fact remains that, while all countries in the world are suffering from a depression and a general fall in the price of commodities, Australia is suffering to a greater extent than the majority, because the particular commodities that we produce in quantity for export are the very things that have fallen in price to the greatest extent. Australia is a greater sufferer even than some of the countries that depend substantially upon the production of secondary industries. When there is a world fall in the price of commodities, it is invariably the case that the raw materials - primary products - fall in price to a greater extent than do manufactured articles. That is explained by the fact that the latter have to go through more processes, and that there is a more rigid wage system attached to their production.
It is essential that we should grasp the extent to which we have become so much poorer, as a nation, during the last year or so than we were previously. Take the position of our wool industry. Australia is the greatest woolproducing country in the world. It possesses about one-sixth of the world’s sheep, and produces approximately onefourth of the world’s wool. For the five years ended the 30th June, 1929, our wool cheque from overseas, disregarding the wool sold to our own mills in Australia, averaged about £63,000,000 per annum.
This year it will be in the neighbourhood of £26,000,000, or a drop of £37,000,000 per annum in that one commodity. Again, take wheat.This year we have had a record harvest, but the fact remains that the wheat cheque which will come to Australia from overseas for that harvest will be at least £20,000,000 less than it would have been had the average price of the preceding five years been maintained. On the two commodities, wool and wheat, we are £57,000,000 to the bad this year.
It may be said that that is merely a difference in money values. There is some truth in the contention that if the drop in primary and secondary commodities the world over had been of uniform character, we might have had some compensation in proportion to our monetary loss. That would have been so had we been able to exchange cheap wool, cheap wheat, cheap metals, cheap fruit and other commodities that we produce better than do other countries, for the products which those countries produce better than we do, such as machinery, tea, silk, motor chassis, and so on at cheap rates. But while the imported commodities have fallen in price, they have not done so to the same extent as have our own products. Further, this Government has done everything that is humanly possible to prevent Australia from enjoying the compensation that should accrue from an exchange of cheap commodities with other parts of the world, by heaping tariff barrier on tariff barrier, embargo on embargo and, incidentally, by closing to us many markets, the entrance to which we previously enjoyed.
The only permanent basis of trade is an exchange of commodities between individual and individual, and nation and nation. The only way, in the long run, in which we can be paid for the things that we export is by receiving from the countries that purchase our products, commodities which they produce better than we can. This Government has placed tremendous obstacles in the way of such an exchange, in the form of enormous and unjustifiable duties. Again, there is the exchange premium on exports, the benefit ofwhich is, to some extent, illusory. I do not say that it is not a great advantage to the exporter to have the exchange position as it is to-day. It is of great benefit to him. It stimulates export. I do not know where our wheat-growers would be without the encouragement given to them by the addition to the price of wheat brought about by the existing rate of exchange. The honorable member for Echuca (Mr. Hill), who is an authority on wheat matters, informed me yesterday that the price for which our wheat is sold to-day, ls. 8d. per bushel at country stations, would be ls. 2d. if it were not for the existing rate of exchange, and that if the cost of the bags was deducted the price per bushel would be lid. at country stations, in English money.
We have to remember that while a premium is paid on our exports a tax equivalent to that premium is charged on our imports. In view of the fact that permanent trade can be carried on only by an exchange of commodities, it is apparent that the benefit of a high exchange rate is somewhat illusory and is nullified in the long run by the very high price of the commodities for which the farmer has exchanged his goods. I believe that the prices of primary products upon which Australia is dependent must improve ; I cannot conceive of their remaining permanently at the very lowlevel that they have reached to-day. He would be a very bold person, however, who would predict that they would, within a reasonable time, at any rate, rise to anything like the level that we formerly enjoyed. In my opinion, the majority of the people of Australia would feel very greatly relieved if there were the prospect of prices rising within the next year or two to a level one-quarter below that which formerly ruled.
From time to time in this Parliament, wc have heard a very great deal from honorable members opposite regarding equality of sacrifice. I say that to-day the primary producers of this country, and those unfortunate people who are out of employment, are bearing by far the greatest share of the sacrifice which is entailed by the existing depressed conditions. How does the Government propose to distribute that sacrifice more evenly? We are told that the cure of our ills lies in inflation, and that it is proposed to issue additional paper money to the value of £18,000,000. It is my considered opinion that the Government is endeavouring to make capital out of the dire necessity of the unemployed members of our community, and the impoverished wheat-grower by dangling this bait before them, in the belief that they will clutch at any straw. If the Government expects to go to the country on this issue, I hope that the people of the Commonwealth will not be misled as were the people of New South Wales last October, to their sorrow.
Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP
– The honorable member is opposed to the giving of any assistance to the farmer.
Mr PATERSON:
-My record proves that I am not opposed to assisting on sound lines the farmers of this country. I should like to ask those who advocate inflation, how can more paper money issued in Australia improve world prices ? When we take into consideration the fact that an enormous proportion of our production of wool is exported, and that the quantity which we use in our mills is comparatively trivial ; when we realize that the proportion of wheat that we export, compared with what we ourselves consume, is in the ratio of about five to one, we must recognize how futile it would be to tamper with the currency in the expectation that it would be of any assistance to the primary producer. I believe that these proposals of the Government are a snare.
There is no easy way out of our difficulties. Our national prosperity, our capacity to meet our obligations both external and internal, and, indeed, our living standards, must depend upon export values. There is only one solution of the problem of bringing about equality of sacrifice: The cost of many of the goods that are produced in this country, the services of all kinds that are rendered, the salaries and wages that are paid, and the social benefits that are provided by the Government, must be adjusted in conformity with what we may regard as a permanently lower level of world values for Australia’s staple products.- If that be not done, it will be quite impossible for our primary industries to continue. I believe that, to begin with, some additional sacrifice must be made by this Parliament. Last November, when we were summoned to attend what was called an economy session, I expressed the opinion, in a speech that I delivered on the revised budget, that we had reached a stage in the financial position of Australia when nothing short of a 20 per cent, reduction of all controllable expenditure would enable us to maintain our national solvency. I pointed out that, if the Government had not the courage to take this action, the position might be such in the ensuing year - which is this year - that a 30 per cent, reduction would be inescapable, imposing a degree of suffering and hardship that would be avoided were the drift checked in time. T expressed the view that, if the Government took its courage in its hands and made the reduction immediately, it might be just possible for this country to carry on upon that basis; but that if it were not made, even bigger sacrifices would eventually be necessary. I am still of that opinion.
Mr Lacey:
– “Would the honorable member subject the interest on our debt to such a reduction?
Mr PATERSON:
– I would apply it to all expenditure that is controllable. I do not believe that there is any satisfactory means of arbitrarily forcing down the rate of interest. I consider, however, that before this country can escape from its difficulties the rate of interest must come down, and that it will come down rapidly so soon as steps are taken to put our house in order. How can honorable members opposite expect the Government to be . offered cheap money when its credit is so low that any person who has £100 to spare can invest it in what we regard as gild-edged government bonds, and make 11 per cent, or 12 per cent, out of the transaction? I believe that if the Government showed “the world that while it was unable to balance its budget this year it was willing to exert itself to the utmost to do so, our credit would improve so materially that money at reasonable rates of interest would become readily available for the rehabilitation of both primary and secondary industries, and that there would be no need for inflation.
Let us look at one or two big items of Commonwealth expenditure. To begin with, it costs us £30,300,000 to meet our commitments arising out of the war. The next big item is that of invalid and oldage pensions. In 1913, invalid and oldage pensions cost this country in round figures £2,500,000 a year. Two years ago the cost was over £10,000,000; last year it was £10,700,000; and this year it will be £11,650,000. If we add” the amount involved in the payment of the maternity bonus we arrive at a total on those social services of nearly £12,500,000, which, with the expenditure arising out of the war, brings the total under those heads to about £43,000,000. Then, the Commonwealth Public Service costs about £11,000,000 a year, which raises the total to £54,000,000. We pay about £11,000,000 annually to the States, which brings us up to £65,000,000 under the four heads mentioned. I have no complaint to make with regard to this payment to the States, because if it were not made the Treasurers of the States would be obliged to impose additional taxation to that extent. Can we as members of this House continue to authorize the payment of our present parliamentary allowances? Can we continue the present scale of remuneration to public servants and go on paying the social services on the present scale out of overdrafts? If we continue to do so, we must inevitably topple over the brink into insolvency. We must pull ourselves together, show that we have backbone and do the right thing. Certain honorable members opposite pretend to be horrified at any suggestion of a reduction in their allowance, in the salaries of Commonwealth public servants, or in pensions; but while they profess to be opposed to such reductions they are by the back door method of inflation proposing to make the £1 worth much less than it is to-day. It is not an honorable method.
Mr SPEAKER:
– The honorable member for Gippsland is not in order in imputing that any action of honorable members is dishonorable.
Mr PATERSON:
– I withdraw the word to which you, sir, have taken exception.
Numerous conferences between Commonwealth and State Ministers have been held at which financial proposals have been discussed. At a recent conference a report bv Treasury experts was submitted, but their recommendations were not even considered, because the Government had not the backbone to carry them out. Those experts submitted certain recommendations showing how savings could be made in Commonwealth and State expenditure to the extent of £15,000,000. The Commonwealth Government which ignored the recommendations now proposes to inflate our currency to the extent of £18,000,000. “We should be on much sounder ground and assisting a return to prosperity if we resolved to do our share in saving £15,000,000 rather than to produce an additional £18,000,000 from the note printing press. If the Governments acted upon the lines recommended by the Treasury experts and showed a determination to live within their straitened means there would be an almost instantaneous restoration of confidence and real money would become available at reasonable rates for the rehabilitation, of our primary and secondary industries. It is necessary to put out the grass fire of high governmental expenditure before applying the match to the bush fire of inflation, which if once lighted will ruin us before it can be extinguished. Only by living within our income will it be possible to make a recovery, for private enterprise to be encouraged, and for employment to be found for Australian citizens. Because this Government has fled from its difficulties instead of facing them, confidence in the Government has gone, credit is at a very low ebb, unemployment figures are appalling, and capital is leaving Australia in millions.
This morning the right honorable the Prime Minister (Mr. Scullin) referred to a loan floated by the former Treasurer (Dr. Earle Page), a portion of which he said was left on the underwriters’ hands for some little time. Money can be raised readily, and a loan oversubscribed in half an hour if sufficient inducement is offered. Some years ago the former Treasurer (Dr. Earle Page) raised a 5 per cent, loan in New York at 99$. That loan was taken up in an hour or two. Do honorable members opposite think that that was satisfactory to the then Treasurer. They might have shown somejubilation had they been able to do something of the kind; but the then Trea- surer felt that, as he ‘was able to get all the money he required in an hour and a half, the terms offered had perhaps been a little too generous. As a result of that experience the terms of future loans were gradually tightened up in order to drive the hardest possible bargain. It is evidence that a pretty hard bargain has been made when portion of a loan has to be taken up by the underwriters, and when it is taken off their hands in a week or two it is highly satisfactory. It shows that too much has not been offered for the money. That is a complete answer to the charge of the Prime Minister. While the Government is not wholly responsible for all of the difficulties in which Australia finds itself to-day, its share in bringing about our present unhappy state of affairs is a very large one. It has increased our financial difficulties enormously. It stands condemned on its own record. We have nothing to hope for from it, and I shall be doing a service to Australia by assisting to remove it from office at the earliest possible moment-
Mr CROUCH:
Corangamite
– As it was not my intention to participate in this debate to-day I have not prepared any notes. There was very little in the speech of the Leader of the Opposition which called for a reply, but there is one point to which I think I should direct attention. Serious attacks have been made upon the Government for the way in which the credit of the Commonwealth has fallen. Unfortunately, reports of the speeches of members of the Government and its supporters seldom appear in the London press, whereas those of the Leader of the Opposition (Mr. Latham), who has the support of the Nationalist press in Australia - the channel of communication with the English press-are , frequently published in London newspapers, and greatly to our disadvantage. Those who studied the London newspapers during the time the Prime Minister (Mr. Scullin) was in England, found that .his work of endeavouring to restore Australia’s national credit was almost entirely spoilt by the action of the Leader of the Opposition, and the Deputy Leader of the Opposition (Mr. Gullett). In the London Times of 30th November, 1930, there is an example of the attacks made upon
Australia’s credit by the Leader of the Opposition. A paragraph reads -
Mr. Latham branded the caucus majority financial proposals as inflation, repudiation, and robbery. It was left for Labour to propose a policy of calculated dishonesty.
Will any one say that the policy of Labour is one of calculated dishonesty?
Mr Maxwell:
– Repudiation is calculated dishonesty.
Mr CROUCH:
– There is no repudiation by us nor even a suggestion of repudiation by the Government. As the statement of the Leader of the Opposition meets with the approval of honorable members opposite, it is well to analyse it, and endeavour to determine what the Nationalist party stands for, and why it should attack Australia’s credit in this House and through the London press. Reference is made to the “ caucus majority.” The caucus system obtains in all the parties in this House, and we may take it that in this case the majority of caucus is to be regarded as meaning, really,, the Government. Evidently then the Leader of the Opposition (Mr. Latham) meant that the Government’s proposals were tantamount to inflation, repudiation, and robbery.
Mr Mackay:
– Hear, hear!
Mr CROUCH:
– The honorable member applauds. That may be taken as further justification for my statement. The Leader of the Opposition characterized the Government’s policy as calculated dishonesty. How, then, can he be surprised when such statements injure our credit in London?
Mr Maxwell:
– It is not the words which have injured our credit, but the fact of repudiation.
Mr CROUCH:
– Will the honorable member for Fawkner (Mr. Maxwell) support the statement of the Leader of the Opposition that the members of the Government are guilty of calculated dishonesty ?
Mr Maxwell:
– I say that calculated repudiation is calculated dishonesty.
Mr CROUCH:
– Will the honorable member go so far as to say that the Government has been guilty of calculated repudiation? No. He is silent now, and. therefore, he must condemn the statement of the Leader of the Opposition as published in the London papers. The statement to which I have referred I came across by the merest chance. There have been many others. It is little wonder that Mr. Scullin, struggling amid all sorts of difficulties is. London, was unable tq secure for Australia the financial accommodation it required when such statements as this, emanating from responsible political leaders, were broadcast in tha London press. It is true that Mr. Bruce is no longer a member of the party opposite, but I venture to say that the party ought still to accept some responsibility for - his utterances when he was their leader. When he was in London at the Imperial Conference he delivered an address to London bankers on Australia’s financial trouble, and his remarks are reported in The Times, of London, of the 17th November, 1926, as follows : -
There is .no question that certain sections of opinion in the city of London are critical of Australian finance. They suggest that we have over-borrowed in the past and should now curtail our commitments and pay ofl our national debt. This point of view springs from a lack of knowledge of the character of the Australian public debt, the purposes for which it has been created, the necessities of the present, and the possibilities of further expenditure on a reproductive basis.
The report continues’ -
The amount of capital expended on railway development was not excessive. . . . The financial position of the railways as a whole was thoroughly successful. The Australian people realize also that it is necessary to obtain full value for loan moneys which are expended. This question is being faced by the people of Australia with courage, and in future loan moneys will not be permitted to be used to maintain artificially a standard of life higher than that which is justified by the true produce of industry.
This seems to me to be prophetic of the attitude adopted by Judge Beeby in the Arbitration Court when giving judgment on the basic wage claim. In fact, the concluding words are practically the same. I find, to my surprise, however, that about the time Mr. Bruce delivered this address in London, he also spoke before members of the British Parliamentary Labour party, and, according to the London Times of the 15 th December, 1926, stated that -
In Australia, the fundamental economic principle was the maintenance of an adequate standard of living for all people.
When he spoke to the bankers, he stated that in future loan money would not be used to keep upan adequate standard of living; but when he spoke to the Labour party, he informed them that the fundamental economic principle in Australia was to maintain an adequate standard of living. Speaking in 1926, Mr. Bruce also stated -
We in Australia can claim to have the situation well in hand.
Since then, our troubles have been increasing like a snowball rolling down a mountain side. Every time the last Government got into trouble over its debts, it funded its floating liabilities. This went on until further accommodation of the kind was finally refused, and the present Government is left to face the music. Mr. Bruce continued -
I would suggest that the matter is one for us to deal with, and not for action by any financial groups in London or elsewhere. The lender is entitled to convince himself that his own interests are safeguarded, and the security of this loan not threatened, but it is certainly not part of his function that he should attempt to dictate the policy of the borrower.
Yet, when the Labour party caucus passed a resolution to the effect that it did not desire Sir Otto Niemeyer to dictate the economic policy of the Commonwealth Government, there was a great cry of indignation from honorable members opposite. I ask leave to continue my remarks at the next sitting.
Leave granted; debate adjourned.
page 42
NEW ZEALAND EARTHQUAKE
Mr SPEAKER (Hon Norman Makin:
– I have received from the Prime Minister of New Zealand, the following reply to the message communicating to him the resolution of sympathy passed by this House on Wednesday in connexion with the recent earthquake: -
The Government and people of New Zealand deeply appreciate the kind message of sympathy conveyed in the resolution adopted by the Australian House of Representatives in connexion with the earthquake catastrophe in the Hawkes Bay district. The message is being conveyed to relatives of the victims of the disaster.
DEATH OF SIR JAMES McCAY.
Mr SPEAKER (Hon Norman Makin:
– I have to inform the House that I have received from Mrs. G. O. Reid, daughter of the late Sir James McCay, a letter thanking the House for its resolution of sympathy.
page 42
PAPERS
The following papers were presented : -
Air Force Act - Regulations Amended - Statutory Rules 1931, No. 3
Air Navigation Act - Regulations Amended - Statutory Rules 1931, Nos. 8, 9.
Audit Act - Transfers of amounts approved by the Governor-General in Council - Financial Year 1 929-30-Dated 23rd February, 1931.
Control of Naval Waters Act - Regulations Amended - Statutory Rules 1931, No. 7.
Customs Act - Regulations Amended - Statutory Rules 1931, No. 10.
Dairy Produce Export Control Act - Regulations Amended -
Statutory Rules 1930, No. 143.
Statutory Rules 1931, No. 12.
Defence Act - Regulations Amended - Statutory Rules 1931, Nos. 1, 13, 14, 15.
Designs Act - Regulations Amended - Statutory Rules 1930, No. 150.
Dried Fruits Act - Regulations Amended - Statutory Rules 1930, No. 151.
Dried Fruits Export Charges Act - Regulations Amended - Statutory Rules 1931, No. 18.
Export Guarantee Act - Return showing assistance granted to 31st December, 1930.
Flax and Linseed Bounties Act - Regulations - Statutory Rules 1930, No. 154.
Gold Bounty Act - Regulations - Statutory Rules 1931, No. 21.
Lands Acquisition Act - Land acquired at - Corowa, New South Wales - For Postal (Broadcasting) purposes,
Mackay, Queensland - For Defence purposes.
Rawlinna, Western Australia - For Defence purposes.
Lighthouses Act - Regulations - Statutory Rules 1930, No. 128.
Nationality Act - Return for 1930.
Naval Defence Act - Regulations Amended - Statutory Rules 1930, Nos. 152, 153. Statutory Rules 1931, No. 2.
Navigation Act - Regulations Amended - Statutory Rules 1930, Nos. 126, 127.
New Guinea Act -
Ordinance of 1930 - No. 23 - Customs. Ordinance of 1931 - No. 1 - Stamp Duties.
Norfolk Island Act - Ordinance of 1930 - No. 3 - Health.
Northern Australia Act -
Central Australia -
Ordinance of 1931 -
No. 2 - Justices.
Public Service Ordinance - Regulations
Amended.
North Australia -
Ordinance of 1930 -
No. 20 - Pearling (No. 2).
Ordinances of 1931 -
No. 1 - Deputy Government Resident.
No. 2 - Justices.
Education Ordinance - Regulations.
Pearling Ordinance - Regulations.
Public Service Ordinance - Regulations
Amended.
Papua Act - Ordinances of 1930 -
No. 10 - Native Regulation.
No. 11 - Post and Telegraph.
Passports Act - Regulations - Statutory Rules 1930, No. 155.
Patents Act - Regulations Amended - Statutory Rules 1930 No. 148.
Post and Telegraph Act - Regulations Amended - Statutory Rules 1931, Nos. 4, 5.
Public Service Act -
Appointment of H. W. Quiney, Department of the Treasury.
Regulations Amended - Statutory Ruled 1930, Nos. 141,146.
Sales Tax Assessment Acts (Nos. 1 to 9) - Regulations - Statutory Rules 1930, No. 156.
Seat of Government Acceptance Act and Seat of Government (Administration) Act-
Ordinance of 1930 - No. 22 - Housing (No. 2).
Administration and Probate Ordinance - Rules of Court dated 17th December, 1930.
Court of Petty Sessions Ordinance (No. 2) - Rules (Solicitors’ Costs).
Land Advisory Board Ordinance - Regulations ( Fees ) .
Public Health Ordinance - Regulations -
General Sanitation.
Infectious Diseases.
Piggeries.
Superannuation Act - Regulations - Statutory Rules 1930, No. 145.
Trade Marks Act- Regulations Amended - Statutory Rules 1930, No. 149.
Treaty of Peace (Germany) Act - Regulations Amended - Statutory Rules 1930, No. 144.
Wine Grapes Charges Acts - Regulations Amended - Statutory Rules 1931, No. 11.
page 43
SPECIAL ADJOURNMENT
Motion (by Mr. Scullin) proposed - That the House, at its rising, adjourn until
Wednesday next at 3 p.m.
Mr GREGORY:
Swan
.- Would it not be possible for the House to meet on Tuesday next ?
Mr.Francis. - Let us meet on Monday.
Mr GREGORY:
– No, Tuesday would be a fair thing. Every one knows the desperate condition of the country. I do not wish to prevent discussion on the censure motion now before the House, but I am anxious that Parliament should get to work as speedily as possible. I desire further to know what are the proposals of the Government for this session.
Mr SPEAKER (Hon Norman Makin:
– It is not permissible for the honorable member to discuss on this motion anything other than the date of meeting.
Mr GREGORY:
– I wish, if possible, to induce the Prime Minister to alter the motion so as to provide for a sitting of the House on Tuesday, in order that we may get on with the business of the country.
Mr SCULLIN:
Prime Minister · Yarra · ALP
– In reply to the honorable member for Swan (Mr. Gregory), all I can say is that, if the Government had submitted, without notice, a motion to provide for Tuesday sittings, there would have been a number of protests from honorable members because of arrangements which have been made by them. The Government is anxious to facilitate the debate on the motion submitted by the Leader of the Opposition (Mr. Latham) so that the division may be taken and business brought down. It is the general rule, at the commencement of each session, to meet on the Wednesday and, later, to arrange for a sitting on Tuesday. It is not thought desirable to ask honorable members to meet on Tuesday without giving at least one week’s notice of the intention.
Question resolved in the affirmative.
page 43
ADJOURNMENT
Transport Workers Act Regulations - Auditor-General’s Report - Liaison Officer in London - War Service Homes - Case of Mr. J. T. Ingram.
Motion (by Mr. Scullin) proposed -
Thatthe House do now adjourn.
Mr LATHAM:
Kooyong
.- I desire briefly to refer to the list of papers presented this afternoon pursuant to statu Honorable members will notice that it includes 40 odd regulations, ordinances, &c. and that there is one conspicuous omission. There is only one regulation made lately in which there has been any general interest. I refer to the one promulgated under the Transport Workers Act on the day following the last adjournment of this House. It was not included in the list of papers laid on the table of the House this afternoon. I am aware that a statutory provision enables the Government to postpone the laying of that document upon the table of the House for a further period. It, however, is probably the only important regulation that has been made during the recess, and I should like to know why it was not included in the papers presented this afternoon. It is printed. All honorable members have seen a copy of it, and it is being operated throughout Australia. Itis of more importance that any other regulation or ordinance in the long list which has just been placed in the hands of honorable members. Why has it not been laid on the table?
Mr FENTON:
Maribyrnong
– I trust that the Prime Minister will do his best to facilitate the printing of a sufficient number of copies’ of the Auditor-General’s Report so that each member may be supplied with one early next week. I have perused it, and I feel that I should pay a tribute to the Auditor-General for the preparation of the document. He has rendered signal service to the Commonwealth. I hope that copies of his report will be made available to all honorable members next week.
Mr WHITE:
Balaclava
.- I direct attention to the fact that, recently, there has ‘been a radical change in the representation of Australia in England on the Army, Navy, and Air Boards. Hitherto, the Commonwealth has been represented by a general officer. While Parliament was in recess the procedure was changed with the result that the position is now filled by a public servant, assisted by three junior officers representing the three arms of the Service. Although Mr. Trumble is a most efficient officer, the fact that he is not a general officer of the Service must greatly diminish the importance of the post. I feel sure that he will not be able to discharge duties so satisfactorily as his predecessors have done. He will not have the same ease of access to the different departments of the War Office, or get quite the same reception which his predecessors enjoyed. I ask the new Minister for Defence (Mr. Chifley) who, I know, will treat this matter with sincerity, to give it careful consideration, and see if some change cannot be made. General Bruche, who represented Australia, is on the point of departure from England. If a quick decision is made he can be stopped. The matter is, I think, of sufficient importance to call for prompt action in order to maintain the prestige of the Commonwealth in London.
Mr GULLETT:
Henty
.- I wish to direct the attention of the Prime Minister (Mr. Scullin) and the Minister in Charge of War Service Homes (Mr. Culley) to the position of a number of returned soldiers. The matter is of first class importance, otherwise I should not have raised it at this stage. The position is known to all honorable members. Owing to the fall in wages from various causes, and the reduction in the earnings of a large number of men as a result of the rationing of work, many returned soldiers are finding the existing terms of repayment for war service homes very onerous. In fact, so serious is the position that some are unable to continue their payments. I am aware that the Minister has given the House an assurance on more than one occasion that every consideration will be shown to returned soldiers who lose their employment, and I wish now to invite the sympathetic consideration of the Prime Minister to the larger question of hardship which is being suffered because of the reduction in wages following the awards of the Arbitration Court or the operation of the principle of rationing. I admit that the difficulty does not lend itself to quick treatment. It will involve, probably, the recasting of the regulations governing the repayments.
Mr Lacey:
– Does the honorable member suggest a revaluation of homes?
Mr GULLETT:
– It may mean revaluation or an extension of terms. I sincerely hope that the Government will give the matter earnest, and immediate consideration.
Mr FRANCIS:
Moreton
.- I support the remarks of the honorable member for Henty (Mr. Gullett). I hope that the Prime Minister will give the matter early consideration and see if it is not possible, in the present circumstances prevailing in Australia, to grant relief to those returned soldiers who are unable to meet their payments under the War Service Homes Act. Many years ago, when returned soldiers entered into these special contracts, they were in receipt of incomes much in excess of the amounts which they are able to earn today. In the circumstances, I consider that the whole system of repayment should be reviewed. I have made several representations to the department with regard to this matter and I am not satisfied with the replies received. I consider them altogether too stereotyped in character. This subject should be thoroughly investigated by the officers of the department and the Minister. I hope that early action will be taken.
Mr YATES:
Adelaide
.- As a returned soldier, I should like to say a word or two on this subject. Returned soldiers should not be expected to suffer as the result of the present economic position. I have always held that their case has never been properly answered. I remember the promises that were made on their behalf before they left Australia. I saw in King’s Hall to-day one returned soldier, whose position should enlist the sympathy of every honorable member. He assured me that he did not know what he was going to do because the Entitlements Appeal Board had turned him down. He has doctors’ certificates galore, and yet there is no hope for him. I feel impelled to say something at this stage because one of the proposals to deal with the present economic situation involves a reduction in soldiers’ war pensions. I said in this House in Melbourne in 1915, before I went to the war - when the first “War Pensions Act was being considered - that I hoped there would be no recurrence of the history of English wars; that we should not have the spectacle of Australian soldiers standing in our streets, with placards on their chests, intimating to passers-by that they had been injured in the Great “War and were in need of assistance. I said, at that time, that in our treatment of returned soldiers we should be not merely just but also generous. No one then dreamed that our men would enter such a holocaust as the war zones proved to be, and no one dreamed that they would return to Australia in their thousands maimed and helpless. And yet to-day there are some who talk about reducing pensions to our men who were injured in the war !
Mr Bernard Corser:
– Who has said that?
Mr YATES:
– It is included in the list of suggestions made by the committee of financial experts, whose views are applauded by honorable members opposite. It is to be found in practically every scheme for economy in administration by honorable members opposite and their supporters.
Mr Gullett:
– The Government that is supported by the honorable member has sacked 2,000 returned soldiers.
Mr YATES:
– I will deal with that and other matters at the proper time, because I do not stand for any attempt to “ sell a pup “ to men who risked their lives .for this country. I saw and know what our Australian soldiers did. I know that they are not being treated fairly.
Mr Bernard Corser:
– Honorable members opposite will possibly be the first to deprive them of what they already have.
Mr YATES:
– If what the honorable member indicates is possible it will not be done by one who is asking for pensions for tubercular soldiers - men who undermined their health whilst fighting in France to protect the property of people in Australia. I remember hearing Sir Joseph Cook say, “ Money is a good soldier; put your money into the war loans “ ; but is it not a fact that bondholders have drawn more than they ever put into our war loans, whilst many returned soldiers have lost not only their homes, but also their livelihood? They are on the bread-line in Adelaide to-day. My advice is so to alter our system of finance that people will no longer be permitted to sit like vultures on a fence waiting to strike at the vitals of industry. Here we have a country producing in the greatest abundance wool, meat, fruit, wheat, wine - in fact, everything that man requires for food and clothing - yet we hear talk of its defaulting, or becoming bankrupt. Such a state of affairs can only be brought about through our inability to run the country properly. But for heaven’s sake do not let us make any attempt -to save ourselves by breaking our promises to the soldiers, to whom, when they left our shores to fight for our protection, we said, “Nothing is too good for you”. Their reward has been a heavier yoke than ever about their necks. I quite agree with the honorable member for Henty (Mr. Gullett), but I want to make a start at the right end. I would afford the soldiers relief by seeing that those who provided the money out of which the soldiers’ homes were built get less interest on their bonds, by dropping them down from the high horse they have been riding and depriving them of some of the profits they have been earning on their money since 1915, when the first war loan was floated. It would then be possible for us to assure the soldiers that we did not “ sell them a. .pup “.
Mr CURTIN:
Fremantle
.- I desire to bring under notice an extraordinary position, which has been a subject of negotiation with the Chairman of the Public Service Board, in connexion with the dismissal of Mr. T. J. Ingram, an employee of the Customs Department, Fremantle. This man, who has ten children, of whom seven are under sixteen years of age, was employed in a temporary capacity as searcher, and was refused a permanent appointment on the ground that he did not come within the definition of a returned soldier as laid down in the Public Service Act. He has been employed in the Customs Department for a number of years, and on three occasions was recommended by his superior officers for permanent appointment on the ground of his unquestioned competency. He was also rewarded by the department in accordance with its regulations for special zeal _ in connexion with the discharge of his duties. As a matter of fact, he was generally regarded as being primarily responsible for the discovery of the 50 Chinese who were hidden in the hold of the steamer Almkerk in a daring attempt to introduce Chinese into the Commonwealth which attracted a good deal of attention at the time. Although this man may not come within the definition of “ returned soldier “ in our Public Service Act, so much of a soldier was he that he is the proud possessor of the Distinguished Conduct Medal. It is true that he did not serve with the Australian Imperial Force. When war broke out, he was employed at the naval base at Fremantle, and, having had military experience with the Ter ritorials in Great Britain, was anxious to join up with the 3rd Light Horse Brigade then stationed at Claremont, Western Australia. SquadronSergeantMajor Watts, of that brigade, however, urged him to proceed to Melbourne, stating that there were better opportunities there for trained men. Ingram accepted this advice, and, at his own expense, left Fremantle on the 20th November, 1914, for Melbourne. He reported at Victoria Barracks with a view to joining up with the Engineers, but having explained that his wife and children were in England, he was informed that before enlisting, he should go to England to see them. This he did, leaving as a third-class passenger by the Orontes on the 9th December, 1914, and paying his own passage money, which amounted to £17. On his arrival in England, he discovered that his wife was ill, and he worked for a little while in a munition factory in order to be near her. He subsequently enlisted in the Royal Engineers, and was drafted to France. He was in the actual firing line for two years and two months, gaining double promotion at one period, and finishing up as acting sergeant. He was in hospital on three occasions, and was awarded the Distinguished Conduct Medal in April, 1918. Although the officers in superintendence over Mr.Ingram at Fremantle have unanimously spoken of his efficiency as an employee in the Customs Department, not only has he been refused the permanent appointment to which a rational interpretation of the definition of returned soldier should have entitled him, but he has within the last two months been dismissed in order to make room for persons who are described as excess officers in other departments, and who have had no experience in the important work of searching the vessels that arrive at Australian ports. This is really technical work which calls for the services of men with experience if the customs regulations and the provisions of the Immigration Restriction Act are to be properly observed. I have brought this matter before the Public Service Board repeatedly, and I bring it before the House now to draw the attention of the country to the monstrous injustice that is being inflicted on citizens of Australia by the technical interpretation which has been given to the definition of returned soldier in the Public Service Act.. If the interpretation under which the Public Service Board has acted is correct, then Parliament must have passed the bill under a gross misapprehension. This man. was in Australia and would have enlisted in Australia but for the advice tendered to him by responsible military officers at the time he sought enlistment. He served in the British Army to the undoubted satisfaction of his military superiors, and I know no more desirable type of private citizen than Mr. Ingram. At any rate, none has given better service to the Customs Department than he has, none has higher credentials than he possesses from the standpoint of meritorious service. Yet, he is not only refused permanent appointment, but has also been compelled, with the number of children he has, to join the great army of unemployed. If the Public Service Board cannot reinstate this man, in at least a temporary capacity, it is high time the law was altered.
Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936
.- I thank the honorable member for Henty (Mr. Gullett) for having spoken . as he did. At this stage of civilization the soldier must have a fair show ; he did not get it in the past. The history of the world shows that when soldiers had done their work, either in defending their homelands or in conquering foreign countries, they were thrown aside like soiled gloves. It is on record that Tiberius Gracchus said that whilst the birds of the air had their nests and the beasts their lairs, the Roman soldier, who had conquered the world, was without a place in which to lay his head, and was left to starve. The breach of the promises made to our soldiers who fought in the South African war is well within the recollection of many honorable members. Sir John Madden was manly enough to declare publicly that he regretted that lies had been put into his mouth when, as- Acting Governor of Victoria, he read to Parliament a speech promising that the men who served in South Africa’ would be cared for on their return. Those promises by the Government of the day were vilely dishonored, in connexion with the last awful deluge of murder, during the years 1914-18, promises were made to our soldiers; they were told that they were fighting for liberty and to end war. Apparently the liberty the Australian soldier has won is the liberty to die in want as the Roman soldier did. The homes of the men who risked their lives for their country should be secured to them. Yet government departments are evicting them and their women and children are being forced to seek shelter elsewhere. Thanks to Mr. Lang, the New South Wales Parliament has passed a Moratorium Act which empowers the householder who cannot meet his obligations to apply to the courts, which, if they are satisfied that the applicant has a good case, can grant him relief from his obligations for two years. This Parliament should introduce a Moratorium Act to preserve the homes of the soldiers. I support the views of the honorable member for Adelaide (Mr. Yates) in regard to currency; they are based on the well-known Guernsey Island market scheme. So long as I remain in this House I shall contend for fair play for the soldiers. I have given to my constituents .the right to recall me from Parliament at one day’s notice, and I would rather retire from this House than support, unjust treatment of the soldiers. This is not a matter of party politics ; it involves the honouring of a solemn promise. During the Great War I was a member of the recruiting committee in Melbourne from the inception to the finish of its activities. Others gave their services for a little time and, having gained some kudos, retired. I was the only member of the committee whose service was continuous. The pledges made to the soldiers from thousands of platforms are not being kept. I honour the honorable member for Adelaide for having offered his life in defence of his country. I volunteered in the first week of the war, but my old age was responsible for my rejection. Strange to say, the doctors who rejected me have passed away, while I am still alive. My desire to help the soldier is just as sincere as it would have been had I been granted the honour and privilege of serving at the front alongside the honorable member for Adelaide.
Mr SCULLIN:
Prime Minister · Yarra · ALP
– The matter raised by the honorable member for Fremantle (Mr. Curtin) regarding the dismissal of an officer of the Trade and Customs Department will be referred to the Minister for Trade and Customs (Mr.Forde) and a reply will be furnished to the honorable member.
The Deputy Leader of the Opposition (Mr. Gullett) has rightly said that a good deal of leniency is shown to occupants of war service homes whose rents are in arrears. But he has questioned the ability of many of the soldiers to meet their monthly obligations since wages have been reduced by awards or otherwise. This matter has already received some consideration, and the only suggestions that have been made are that the period of repayment should be extended or that the homes should be re-valued. This opens up a very much wider problem. Thousands of workers, whose wages have been reduced, are in the same position as the soldiers in regard to the purchase of homes on terms, and a serious problem confronts those who have fixed liabilities of this character. A reduction of the cost of living, following a reduction of wages, will give no relief to thosewho have fixed liabilities. It is a great mistake to imagine that Australia will solve its economic problems by mere deflation and reduction of wages and prices; the fixed liabilities will remain, and ifwar service homes are written down the same process will have to be applied to thousands of other homes which are being purchased on terms.
Mr Bell:
– And to farms.
Mr SCULLIN:
-That is so. This proves indisputably that the policy of deflation is in many cases leading to bankruptcy rather than to prosperity. That matter, however, may be discussed on another occasion.
In regard to the request of the honorable member for Maribyrnong (Mr. Fenton), the House has not yet ordered that the report of the Auditor-General be printed, but probably members would like copies of that document to be made available to them, and I shall ask the Clerk of the House to do that.
The honorable member for Balaclava (Mr. White) has referred to the rearrangement of the duties of the military and naval liaison officers in London. I remind the honorable member that only in recent years have we maintained an officer above the rank of colonel at Australia House. When the re-organization of that establishment was under consideration we were faced with the fact that one very capable and valued officer was occupying a position which was practically a sinecure, “whilst we had there, in the person of Mr. Collins, an officer who was capable of discharging the duties of official secretary and financial adviser. When we decided to amalgamate those two positions we were able to re-arrange the liaison duties, and entrust them to Mr. Trumble, who, by virtue of his long experience as secretary of the Defence Department, was well qualified to discharge them. No other dominion has a similar liaison officer in London, and I fail to see the necessity for one in respect of Australia. Canada, New Zealand and South Africa have liaison officers in London in connexion with the Air Force, but not in connexion with the military and naval side of defence. The upkeep of that position, has of course, added to our expenditure. This Government has had to face a reduction in expenditure. I suggest to the honorable member for Balaclava (Mr. White) that the time to discuss this subject is when we are dealingwith the whole report on Australia House, and the position generally in London. We have not yet obtained the benefit of all the savings that we arehoping to effect. Mr. Collins is still investigating the position. Under the arrangements that have been made we have been able to place an officer whose salary of £2,000 a year would have had tobe paid in any event. The only other question raised was the request of the Leader of the Opposition (Mr. Latham) that the regulation relating to transport workers should be laid on the table of the House at once. I shall make inquiries into this matter, although I have nodoubt that the regulation will be tabled in due time.
Question resolved in the affirmative.
House adjourned at 3.56 p.m.
Cite as: Australia, House of Representatives, Debates, 6 March 1931, viewed 22 October 2017, <http://historichansard.net/hofreps/1931/19310306_reps_12_128/>.