House of Representatives
26 June 1931

12th Parliament · 1st Session



Mr. Speaker (Hon. Norman Makin) took the chair at 2.15 p.m., and offered prayers.

page 3122

QUESTION

COMMONWEALTH FINANCES

Melbourne Conference Plan - Proposed Taxation in New South Wales - Relief under Hoover Plan.

Mr THOMPSON:
NEW ENGLAND, NEW SOUTH WALES

– Has the Prime Minister seen the monstrous income tax proposals of the Government of New South Wales, published in to-day’s news papers? In view of the grave crisis which is likely to be precipitated in that State by the imposition of such confiscatory and cruel taxation, will he confer with the Premiers of the other States to decide what steps can he taken to safeguard the new federal taxation proposed under the reconstruction plan against the buccaneering attacks of this irresponsible Premier?

Mr SPEAKER:

– Order! The honorable member is not entitled to offer comment or express opinions when asking a question.

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

– I have not seen the report to which the honorable member has referred.

Mr JAMES:
HUNTER, NEW SOUTH WALES

– Last week I asked the Prime Minister whether he would consider the advisability of recasting the Government’s financial proposals in view of the fact that the Hoover plan would relieve Australia to the extent of approximately £3,920,000 this year. His reply was that the Hoover plan had not yet taken shape and that he had no information as to when it would. To-day’s Canberra- Times reports that the Chancellor of the Exchequer (Mr Phillip Snowden) has announced in the House of Commons that the Imperial Government was offering to the dominions and India the same war debt concessions as President Hoover proposed to offer to other nations. He added that he thought that he was interpreting the country’s wishes by deciding to offer to the dominions the option of postponing the whole of their war debt to Great Britain for one year, beginning from the 1st July next. Having regard to that statement, will the Prime Minister now consider a revision of the proposed vicious cuts of pensions and wages ?

Mr SCULLIN:

– The information which the honorable member has read from the newspaper report is that which was contained in a cablegram I read to the House yesterday. My answer to the honorable member’s previous question still applies. President Hoover’s proposal has not yet materialized, and we do not know when it will. In any case we do not anticipate that the Commonwealth will receive any cash benefit from it until the next financial year is well advanced, whereas we have serious financial obligations to meet next month.

Mr BEASLEY:
WEST SYDNEY, NEW SOUTH WALES

– Does not the statement by Mr. Snowden that the Dominion payments to the United Kingdom will be suspended after next month indicate that the Hoover plan is well advanced? That being so, could not the confiscatory cuts of pension and wages be avoided?

Mr SCULLIN:

– The Hoover plan is merely a proposal which must be accepted by all nations interested before any benefit can arise from it.

Mr HUGHES:
NORTH SYDNEY, NEW SOUTH WALES

– Is the acceptance and enforcement of the conference plan by the Commonwealth contingent upon the acceptance and enforcement of it by each legislature throughout Australia, or is it to be operative in the Commonwealth, if approved by this Parliament, regardless of the action taken by State legislatures ?

Mr SCULLIN:

– The plan agreed to by the Melbourne conference requires simultaneous legislation by the Commonwealth and the States. The plan is an indivisible whole, and the seven Australian governments agreed that each should independently carry out its part of the undertaking.

Mr BEASLEY:

– Did the conference leave the legislation to be passed entirely to the discretion of the various Governments or Parliaments concerned?

Mr SCULLIN:

– Not entirely. Each government was allowed discretion as to the method of applying the principles agreed upon by the’ conference. For ‘ instance, there was unanimous agreement that a 20 per cent, reduction of all adjustable governmental expenditure should be effected, but the best means of effecting the reduction was left to the discretion of each government. The representatives of all the governments submitted to the conference their proposals for applying the reduction, and these were approved as being in accordance with the spirit of the general resolution. On certain specific matters discretion was not left to the Governments, but drafts of uniform legislation to be introduced into the Commonwealth and State Parliaments were submitted to the conference and accepted.

Mr THOMPSON:

– Should the Prime Minister find that the new taxation proposals by the Government of New South Wales will seriously interfere with the taxation policy of the Commonwealth under the reconstruction plan, will he confer with the Premiers of the other States in order to ensure that this heavy double burden shall not be placed on the taxpayers ?

Mr SCULLIN:

– Obviously, if we were satisfied that the action of any one government would seriously interfere with the operation of the plan, further consultation would take place, but I cannot answer a question based on hypothetical circumstances.

page 3123

QUESTION

MINISTERIAL TRAVELLING ALLOWANCES

Mr GABB:
ANGAS, SOUTH AUSTRALIA

– In view of the fact that Cabinet Ministers have declared that it is necessary to reduce the pensions of maimed soldiers, the aged, and infirm, will the Prime Minister take steps to discontinue the practice of Ministers, who are in receipt of from £35 to £40 a week each, receiving an extra £2 a day as travelling allowance when absent from Canberra on official business?

Mr SCULLIN:
ALP

– For many years Ministers, when travelling on official business, have been entitled to a special allowance. As Prime Minister, I have checked this expenditure, and have ascertained that on many occasions, not more than one-third of the amount that Ministers were entitled to charge has been collected. The official duties of some Ministers require them to do more travelling than others. The allowances paid to Ministers and public servants will be reduced in accordance with the economy policy.

page 3123

QUESTION

PARLIAMENTARY DEBATE

References to Senate

Mr GULLETT:
HENTY, VICTORIA

– Will you, Mr. Speaker, be good enough to inform the House of the origin and authority for the rule that in the course of debate the Senate must be referred to as “ another place “ ? Having regard to the absurdity of this rule, and to prevent misunderstanding through its application in the Hansard reports, will you consider the abolition of this practice, if it is in your power to discontinue it?

Mr SPEAKER:

– The practice has been in vogue for very many years; if I find that I have not the power to discontinue it, I shall refer the matter to the Standing Orders Committee.

page 3124

MINISTERIAL CHANGES

Mr.R. GREEN - I ask the Prime Minister whether it is a fact that the honorable member for Denison (Mr. Culley), and the honorable member for Flinders (Mr. Holloway) have resigned from the Ministry? If so, have the vacancies been filled?

Mr SCULLIN:
ALP

– Two vacancies have occurred in the Ministry, but the new Ministers appointed to fill them have not yet been sworn in. When they have been sworn in, I shall make a formal announcement to the House.

page 3124

QUESTION

BANK RATE

Mr GREGORY:
SWAN, WESTERN AUSTRALIA

– The newspapers of to-day contain an announcement by the Commonwealth Bank that it has reduced the interest rate on fixed deposits and advances by a flat rate of 1 per cent. This flat rate means in respect of fixed deposits a reduction of approximately 22½ per cent., whereas, in respect of advances, the reduction is only from 14 to 16 per cent. Will the Prime Minister draw the attention of the Commonwealth Bank Board to the anomaly?

Mr SCULLIN:
ALP

– I am awaiting an official announcement, from the Commonwealth Bank Board.

page 3124

QUESTION

RUSSIAN TIMBER

Mr JONES:
INDI, VICTORIA

– I ask the Prime Minis ter if it is a fact that the Canadian Government in February last prohibited the importation from Russia of lumber of all kinds, the Dominion Government being convinced that the timber was cut and transported . by forced labour ? Further, has the right honorable gentleman any information regarding the destination of the cargo of the motor vessel King Lud, which is now at Sydney?

Mr SCULLIN:
ALP

– I shall inquire into these matters and let the honorable member have a reply later.

page 3124

QUESTION

INCOME TAXATION

Mr CROUCH:
CORANGAMITE, VICTORIA

– Does the Treasurer estimate that the income tax returns this year will be larger or smaller, following the diminution of incomes? Does he estimate that further taxation will increase or diminish the net returns?

Mr THEODORE:
Treasurer · DALLEY, NEW SOUTH WALES · ALP

– It will be generally admitted that in relation to private incomes the taxable field has diminished this year as compared with last year and is likely further to diminish next year. Whether an increase- of income tax will affect the amount of income received by taxpayers depends upon the nature of the plan under which the tax is applied, but normally the taxation of incomes does not affect the earning capacity of the taxpayer.

page 3124

QUESTION

SUPER TAX IN NEW SOUTH WALES

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– Was the proposal to impose a super tax of 5s. in the £1 in New South Wales placed by Mr. Lang, the Premier of that State, before the recent conference of Federal and State Premiers?

Mr SCULLIN:
ALP

– The actual details of proposed taxation were not placed before the conference any more than were the details of the Commonwealth Government’s proposals for increased taxation.

page 3124

QUESTION

REPORT ON WINE INDUSTRY

Mr JONES:

– Has the report of Messrs. Gunn and Gollin, on the wine industry, yet been received by the Government, and, if not, when is it likely to be available?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– Messrs. Gunn and Gollin have recently inquired into the wine industry, and the report on certain aspects of that industry will, I expect, be received by the Prime Minister’s Department next week, and will be sent on to my department. So soon as the Government comes to a decision in regard to the recommendations of that committee, the report will be made available.

page 3124

QUESTION

NEWSPAPER TELEPHONE SERVICES

Mr THOMPSON:

– In view of the big deputation of country newspapeir proprietors and delegates representing the printing trade and the Australian Journalists Association which waited on the Minister yesterday, and theclear case made out for relief from the proposed crushing new rates and conditions governing the use of telephone services in newspaper offices, the ‘ imposition of which will cause, at least, the dismissal of 1,000 newspaper employees, and drive various papers, such as the Canberra Times, out of business, will he postpone the new rates and conditions for one year, in the hope that times may improve? Failing this, will he hold up the gazettal of the new proposals until Parliament has had an opportunity to discuss them?

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

– The reply to the honorable member’s question was given to the deputation which waited on me yesterday. The substance of the representations of that deputation were precisely the same as that of the representations of the honorable member. My reply to the deputation was that the abolition of the use of dictaphones would be deferred for twelve months - until the 30th June, 1932. So far as the rates on telephone trunk lines are concerned, the newspapers obtain a concession of 66 per cent, over private users in respect of day rates. I have nothing further to add at present.

page 3125

QUESTION

WIDOWS’ PENSIONS AND CHILD ENDOWMENT

Mr LAZZARINI:
WERRIWA, NEW SOUTH WALES

– Is it a fact that Mr. Lang, the Premier of New South Wales, stated definitely at the Premiers Conference that under no circumstances would he allow the proposals for the balancing of State budgets to interfere with the payment of widows’ pensions and child endowment in New South Wales?

Mr SCULLIN:
ALP

-The Premier of New South Wales indicated his proposed economies to the conference, and he said, among other things, that he would not include, widows’ pensions in the proposed cuts. Those pensions were substantially cut by a previous administration.

Mr LAZZARINI:

– They . are to be restored.

Mr SCULLIN:

– I understand that it is not proposed to make any further cuts in those pensions.

Mr MORGAN:
DARLING DOWNS, QUEENSLAND

– I wish, through you, Mr. Speaker, to ask the leader of the Lang group in this House, if the recent taxation proposals in New South Wales were inspired by, or approved of, by that group?

Question pot answered.

page 3125

QUESTION

EMPIRE MARKETING BOARD

Mr CROUCH:

asked the Minister for Markets, upon notice -

  1. Is there an Empire Marketing Board in England ?
  2. Has such a board been organized in Australia; if so, what is its constitution?
  3. Have any representations been made by the English Government that it is desirable that such a board should be appointed in Australia ?
  4. Has the Empire Marketing Board been reconstituted as recommended by the last Imperial Conference ?
Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

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

  1. Yes.
  2. No.
  3. No.
  4. The Secretary of State for Dominion Affairs, in reply to a somewhat similar question asked of him in the House of Commons on the 26th March last, stated that the question of changes in the organization of cbe board was being carefully explored, but he was not yet in a position to indicate what action would be taken. A committee had been appointed to consider the question.

page 3125

QUESTION

EXPORT OF EGGS

Mr KEANE:
BENDIGO, VICTORIA

asked the Minister for Markets, upon notice -

  1. Has his attention been drawn to the following item in the Melbourne Herald of the 23rd inst.: -

One million pounds could be made by Australia by the export of eggs to Britain, according to Mr. J. B. Merrett, of London, who, after a visit to secure the co-operation of Australian exporters, will return shortly to supervize the sales of Australian eggs in Britain. Mr. Merrett believes that that amount will be readied in ten years. He says that if farmers stock more poultry and turn their wheat into eggs, they will get three times the value for their product?

  1. If so, what steps does the Government intend to take to improve the overseas trade in this very important primary product?
Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

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

  1. Yes.
  2. Considerable expansion has already taken place in the export of eggs from Australia. The Government is assisting the industry to further increase its overseas trade by rigid inspection of eggs prior to shipment and by including eggs in the overseas publicity campaign conducted by Mr. Hyland, and will consider any proposal by the producers to bring about a more orderly system of marketing by statutory means.

page 3125

QUESTION

LEAGUE OF NATIONS

Mr CROUCH:

asked the Treasurer, upon notice -

  1. What is the annual cost to the Commonwealth of its membership of the League of Nations ?
  2. Is it a fact that some members of the league are in arrears in their contributions, in some cases, as much as eight yeaTS?
  3. If so, what arc the names of these countries in arrears?
  4. Does the fact that these countries are in arrears materially add to the amount paid by Australia; if so, by how much?
  5. Why are these countries in arrears allowed to continue in the league if they will not hear their fair share of its cost?
  6. Why should Australia bear an additional share of the expenses of the league by reason of the default of other countries?
Mr THEODORE:
ALP

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

  1. The annual contribution of the Commonwealth to the expenses of the League of Nations varies according- to the total budget of that organization, of which Australia’s share now is on the basis of 27 units out of a total of 986 units. The cost for the calendaryear. 1931. is the amount of the net contribution’ 810,987 gold francs (£32,392), plus exchange.
  2. Yes.
  3. China, Peru, Bolivia, Nicaragua, and Honduras exclusive of some other countries which apparently were in arrears for the year 1929 only through late payment.
  4. Yes. The total amount of arrears as on the 1st September, 1930, was £478,101. As the League of Nations relies for its funds on the contributions of members, the shares ofmembers must eventually be increased by any arrears which are not subsequently paid up. The Commonwealth’s share would be in proportion to its quota of the total expenses of the league as set out in 1.
  5. Efforts by the league for the collection of arrears are continuous, and for the first eight months of the year 1930 the amount of £41,058 was paid up, but none of the countries mentioned in 3 is represented in that amount. If the countries in arrears were forced from membership of the league the loss of the whole of their future contributions would have to be borne permanently by the remaining members in addition, presumably, to the past arrears.
  6. See 5.

page 3126

QUESTION

DEFICITS OF STATES

Mr THEODORE:
ALP

– On the 24th June, the honorable member for Bendigo (Mr. Keane) asked the following question, upon notice -

  1. What were the amounts of the deficits of each of the States for each of the past five years ?
  2. What proportion of these deficits each year was attributable to railway deficits?

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

page 3126

PAPERS

The following papers were pre sented : -

Arbitration (Public . Service) Act - Determination by the Arbitrator, &c. - No. 12 of 1931. - Arms, Explosives and

Munition Workers Federation of Australia.

Seat of Government Acceptance Act and Seat of Government (Administration) Act -Dentists Registration Ordinance - Regulations.

page 3127

SUPPLY BILL (No. 1) 1931-32

Bill returned from the Senate without requests.

NEW STANDING ORDER. - 96a.

Mr SCULLIN:
Prime Minister · Yarra · ALP

– I move -

That the following new Standing Order be adopted by the House: - “96A. The reply to a question on notice shall -be given by delivering the same in writing to the clerk at the table, and a copy thereof shall be supplied to the member who has asked the question.

I might explain that, when the replies to questions on notice have been given to the Clerk, a copy will be supplied to each honorable member concerned, and to Hansard for publication therein.

The Standing Orders Committee has made this recommendation, among others. As the other recommendations may take some time to consider, we are not now bringing them forward.

Mr Crouch:

– Could we not incorporate in this new Standing Order words to the effect that questions and replies are to be printed in Hansard?

Mr SCULLIN:

– The very fact that the replies to questions on notice are handed to the Clerk will, I think, ensure their inclusion in Hansard.

Mr Crouch:

– There is nothing to that effect in the Standing Orders.

Mr Lacey:

– The present practice is for a Minister, when giving lengthy replies to questions on notice, to ask leave to have them incorporated in Hansard without being read.

Mr LYONS:
Wilmot

.- As there is some doubt whether, under this new Standing Order, questions on notice and replies will, after being handed to the Clerk, be incorporated in Hansard, I suggest that there should be some special authority given for that.

Mr SPEAKER (Hon Norman Makin:
HINDMARSH, SOUTH AUSTRALIA

– It will be necessary for the House to give direction for the publication in Hansard of questions on notice and the replies to them; the authority of the Speaker will not be sufficient. If this new Standing Order is adopted, the course that I shall follow is that, when questions without notice have been answered, I shall ask for papers and any statements that Ministers may desire to make. There will, of course, be no call for questions on notice. Replies to questions on notice will be handed to the Clerk by the Ministers to whom the questions are addressed, and copies of the questions and answers will be distributed to the member, concerned.

Mr Crouch:

– I suggest that we add to the proposed new Standing Order the words - and such question and reply shall be printed in Hansard.

Mr SCULLIN:

– I accept the honorable member’s suggestion, and ask leave to amend the new Standing Order accordingly.

Motion - by leave - amended accordingly.

Mr Morgan:

– Will copies of the replies to questions on notice be handed to the press?

Mr SCULLIN:

– That has always been the practice.

Mr CUSACK:
Monaro · Eden

– Some time ago I asked the Prime Minister whether the practice of making oral answers to written questions was likely to cease. The New South Wales Parliament at one time followed the custom that has hitherto been adopted by this Parliament, but an alteration was subsequently made. I suggest to the Government that, instead of answers to questions on notice being handed to the Clerk, and copies of them given to the members concerned, we might follow the New South Wales practice of printing the questions and answers on the notice-paper, and, in that way, make them available to all honorable members. At present we are able to get from the member concerned the information contained in an answer to a question upon notice, but it will be most inconvenient if we are obliged to wait for such information until the publication of Hansard. For this reason I suggest that both the questions and the answers to questions on notice should be printed on the business-paper for the day.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

.- I support the suggestion of the honorable member for Eden-Monaro (Mr. Cusack). I had intended to make it myself. Sometimes questions of very great interest to all honorable members appear on the notice-paper; but, if the replies given to such questions are not available to us until two or three days after they have been given, the interest in them may evaporate. There may be some technical difficulty in printing the questions and answers on the same business-paper, but surely that could be overcome. The proposal of the honorable member for Eden-Monaro is in accord with the practice of the New South Wales Parliament. If the replies to questions on notice are made available as soon as they are given, honorable members can make much more use of them than if they have to wait for them for several days. Every day our noticepaper contains two or three pages of matter, principally notices of motion which may never be discussed by the House, which is kept in type. If the room that these notices of motion occupy on the business-paper were taken up by answers on notice, it would be much more useful to us.

Mr WHITE:
Balaclava

.- When this proposal was first made, I thought well of it, but I am beginning to doubt whether it will achieve any good result. If work is piled up in other directions by the adoption of this arrangement, no economy will be effected. As the honorable member for Richmond (Mr. R. Green) has said, there is general interest in the replies to some of the questions that are asked . upon notice, and honorable members will be inconvenienced if the replies to such questions are not available to them until the publication of Hansard.

Mr Riordan:

– Copies of the replies could be left on the table.

Mr Scullin:

– Extra copies of the replies to questions on notice are always left with the Clerk of the House. The practice is to provide eight copies of each reply. A number of these are distributed to the press, but some of them are left with the Clerk for the convenience of honorable members.

Mr BELL:
Darwin

.- The object of this proposal is to facilitate business, but I doubt- whether it will have this effect. In my opinion, it will tend to greatly increase the number of questions asked without notice. At present, if a question appears on the notice-paper in relation to a subject upon which another honorable member desires information, he is not entitled to ask a question upon it without notice. If the replies to questions on notice are- not made available promptly to honorable members, difficulties will be caused. I do not see any particular virtue in this proposal.

Mr SCULLIN:
Prime Minister and Minister for External Affairs · Yarra · ALP

– There is no doubt that, if honorable members approve of this motion, a great deal of time will be saved. The practice of answering questions upon notice orally is in many cases a farce. Frequently such replies contain numerous figures, and permission is asked that they be incorporated in Hansard unread. On every occasion the Speaker must obtain the permission of the House for this to be done, but I have never known leave to be refused.

Mr Bell:

– I have objected to that course on at least one occasion.

Mr SCULLIN:

– There are two serious objections to the suggestion of honorable members that the replies to questions on notice should be printed on the businesspaper with ‘the questions. One objection to that course is that the information would not be available to honorable members until a day later than would otherwise be the case.

Mr Crouch:

– That would not matter.

Mr SCULLIN:

– Honorable members are sometimes very impatient to obtain answers to the questions they ask upon notice. Frequently it is necessary for Ministers to obtain from Melbourne or elsewhere the information desired. Many years ago it was the practice of another place to print both the questions and the answers in the Journals, but that was abandoned. I point out that the noticepaper is printed in a different measure from Hansard, in order to meet the convenience of honorable members. The printing of the notice-paper involves an expenditure of about £3 per diem. If a great deal more type-setting is involved in the printing of it, as would be the case if questions and answers alike were printed, the expenditure would be a great deal heavier. Moreover, all the questions and answers would have to be reset in the measure of Hansard.

Mr Fenton:

– Many answers involve the setting of type in tabulated form, which is expensive.

Mr SCULLIN:

– That is true. At present several spare copies of the typewritten replies to questions are left in the hands of the Clerk. Arrangements could probably be made for a greater number of spare copies to be available. I ask honorable members how often they take advantage of the availability of these spare copies?

Mr Thompson:

– We do not ask for them, because we know that the Hansard proofs will be available the next morning.

Mr SCULLIN:

– I ask honorable members to give the new proposal a trial, for I feel sure that it will result in the saving of time and. money.

Question resolved in the affirmative.

page 3129

COMMONWEALTH DEBT CONVERSION BILL

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

Second Reading

Mr THEODORE:
Treasurer · Dalley · ALP

by leave - I move -

That thebill be now read a second time.

The reduction of interest rates on our public debt is an outstanding feature of the rehabilitation plan agreed to in the recent Premiers Conference. The conversion of this debt is a colossal undertaking, the magnitude of which has rarely been exceeded in the history of the world. It may be compared with the great British debt conversion -submitted to the British House of Commons by Mr. Goschen in 18S8. If the object of this conversion is attained, the interest burden on the community will be lightened, and the loan market steadied for the future. This will undoubtedly lead to the improvement of the national credit of Australia.

The bill is part of a general scheme for the sharing of the loss occasioned by the prevailing economic disturbance. It is clear to all who have given serious consideration to the problems of Australia that we cannot get back to financial stability until considerable readjustments have been made, and in the making of such re-adjustments, it is the duty and obligation of governments to see that the sacrifices involved are evenly and equitably spread over the whole community. The reduction of the interest on our internal indebtedness is a necessary part of the plan agreed to at the Premiers Conference. As that plan involves reductions in wages and salaries and social services, no fair-minded person would attempt to defend the exemption of the interests of bondholders and others with fixed monetary claims, who hitherto have borne no part of the general sacrifice. The plan is indivisible; the carrying out of any one part of it is dependent on the carrying out of every other part of it.

Mr Hughes:

– And the carrying out of it by all parties.

Mr THEODORE:

– Yes. If any of the parties to this plan failed to discharge the obligations resting upon it, undoubtedly the whole rehabilitation scheme would be wrecked, either permanently or temporarily. If there is a failure by one of the major parties to the scheme to perform its obligations, neither the plan nor any major part of it could be given effect until the conference had been re-convened, and the situation re-surveyed.

Mr Hughes:

– Where is that set out in black and white? So far as I can see, it is not in the agreement.

Mr THEODORE:

– What I am about to read will show what the governments committed themselves to before the details of the plan were settled. In order to make it effective, the Leaders of the Opposition in the Commonwealth Parliament were invited to attend the Premiers Conference in Melbourne, and, after a full discussion, and in the presence of the representatives of the Commonwealth Opposition, the following resolutions were agreed to on the 10th June, towards the termination of the proceedings : -

The conference, including the Leaders of the Opposition in the Federal Parliament, having most carefully considered the financial position of the Commonwealth and the States, and recognizing the national inability to meet existing government charges, is unanimously of the opinion that to prevent national default in the immediate future, and a general failure to meet government payments, all expenditure, including interest on government securities and other interest, and expenditure upon governmental salaries and wages, pensions, and other social services, must be substantially reduced. These measures, drastic as they may appear, are the first essentials to the restorafi’on of prosperity arid the reemployment of our workless people. The necessary sacrifice is due to national inability to pay, and it must, therefore, be shared by all. The conference has accordingly provided a conversion plan under which bondholders may make their contribution to the general sacrifice by themselves accepting the lower rate of interest which the existing position mates unavoidable.

Those resolutions were agreed to without dissent. The implications and the obligations in them were generally recognized as being involved in any rehabilitation plan.

Mr Hughes:

– But it is not stated that the agreement must be carried out by each of the parties.

Mr THEODORE:

– That was specifically agreed to, so far as the words of those attending the conference could bind them to such an undertaking. Frequent allusion to this understanding will be found in the reports of the conference itself, and especially in the proceedings of the last day, and almost the last hour. The Premiers pledged themselves to perforin their part of the undertaking as set out in the resolutions, which, as I have said, were carried unanimously.

Mr Hughes:

– That undertaking was implied.

Mr THEODORE:

–So long as there is nomisunderstanding as to what is implied, no difficulty can arise’ from an implication.

Mr Prowse:

– Did not the Premier of New South Wales make some reservation?

Mr THEODORE:

– That is another matter. I am now submitting to the committee a full explanation of the debt conversion part of the plan. Already we have had a discussion on the first part of it, and, perhaps, the honorable member will have an opportunity, on another occasion, of raising queries as to other matters.

The proposed conversion is a colossal undertaking, hot only because of the immense sum involved, but also because of the complexities caused by the number and variety of the stocks affected. The number of government loans maturing in Australia and outstanding at the present time, allowing for the variety of conditions, the difference of dates of maturity and the difference of interest rates, totals, approximately, 1,250. These securities are divided into the following classes: -

COMMON WEALTH.

Inscribed stock.

Bonds.

Treasury-bills.

Peace savings certificates.

States.

Inscribed stock.

Instalment stock.

Registered stock.

Funded stock.

Stock payable to bearer.

Bonds, including registered bonds.

Debentures, including registered debentures and instalment debentures.

Treasury-bills.

Fixed deposit stock.

The securities are divided between securities having fixed dates of redemption, some of which are redeemable at earlier dates under certain circumstances, and securities which are interminable, or have no fixed date of maturity. They are, again, divided into securities the interest on which is subject to taxation, and certain State securities, the interest on which is exempt from taxation.

The object to be attained by this conversion and by the bill, is, in itself, a simple one. It is to secure a reduction of the interest rate by 22½ per cent., and to establish a new consolidated Australian governmental stock, based; generally speaking, on a 4 per cent, interest rate; but the action involved in the conversion operation is far from simple. There are many difficulties and Complexities, and these have been multiplied by the limitation of time at the disposal of the Commonwealth Treasury in making provision for so gigantic an undertaking.

I am greatly indebted, personally, to certain officers who have been working upon this plan, almost day and night, since the rising of the Premiers Conference, and particularly to the Assistant Secretary to the Treasury, Mr. Sheehan-, and to the Under-Treasurer for South Australia, Mr-. Stuckey, whose services have been lent to the Commonwealth by the South Australian Government for the purpose of assisting us to solve some of the problems connected with the conversion scheme. These two officers have been indefatigable, and, without their assistance, we certainly could not have circulated the bill at so early a date as to-day.

The Commonwealth and State debts that will come under the scheme amount, in the aggregate, to £556,000,000, of which £400,467,000 is represented by Commonwealth securities, and £155,533,000 by State securities. The details are as follow: -

The approximate annual interest payable on the debt is distributed as follows : - On Commonwealth stock, £12,200,000: on State stock, £16,800,000; total, £29,000,000. The following is an analysis of the stock domiciled in Australia, with particular reference to where it is domiciled: -

Of the £400,000,000 of Commonwealth securities, approximately £180,000,000 represent issues made by the Commonwealth for the States.

There is a large number of holders of this greatvariety of stock. It is known, of course, that on each issue of a large loan in Australia, in recent years, there have been very many applicants. How much of such stock remains in the hands of the original subscribers it is impossible to say, all we know is that, in the numerous Commonwealth loan issues, a vast number of subscribers throughout the Commonwealth have participated, and, no doubt, many of these have subscribed regularly to successive loans. The Commonwealth stock inscribed at the Commonwealth Bank is owned by 101,000 stockholders. There are 189,000 owners of Commonwealth treasury-bonds, whose bonds are lodged for safe custody with banks and savings banks, whilst it is estimated that there are, approximately, 100,000 persons whose Commonwealth treasury-bonds are in their own hands.

An approximate allocation of the debt under the various interest rates is as follows : -

The average rate of interest payable on the debt of the Commonwealth and States in Australia at present is £5 4s. 3d. per cent.

The reduction of 22½ per cent, will bring this average rate down to £4 0s. 9d. per cent. - a saving of £1 3s. 6d. per cent.

The debt is allocated between loans subject to taxation and those which are " tax free " as follows : - The following table shows the amount of Government securities held by the banks and by other institutions, and the approximate amount held by the public : - The conversion plan is based on a 22-J per cent, reduction of the rates of interest on all existing securities. On certain securities the existing rate is already low, and, as it would not be fair to ask the original holders of these securities to make a further sacrifice of interest on their specially low interestbearing securities, it has been decided that the holders of securities which bear interest rates of 3 J per cent, or less, who acquired them prior to the 4th August, 1914, shall not have the rate of interest reduced below 3 per cent. The new securities will be issued in the form of a common stock, which will be known as "Australian consolidated inscribed stock," or "Australian consolidated treasury-bonds," as the case may be. The new stock will be issued at three different rates of interest, namely, 4 per cent., 3$ per cent., and 3 per cent. It is anticipated that holders of existing securities which bear interest at a rate in excess of 5 per cent, will convert into the new 4 per cent, securities at a premium, that existing securities bearing interest at 5 per cent, will be converted into new securities at par bearing interest at 3£ per cent., while holders of existing securities bearing interest at less than 5 per cent, will convert into new 3 per cent, securities at a premium, or, if they so desire, they can convert into new 4 per cent, securities at a discount. It is necessary to have a variable rate instead of adhering to 4 per cent., as originally intended, in order to overcome difficulties that may present themselves to trustees, who may find that the conversion may affect the capital under their control, and in some way affect the terms of their trusteeship. The new securities will have a currency of 7, 10, 13, 16, 19, 22, 24, 26, 28, or 30 years, and it is intended that they shall be apportioned evenly in respect of most holdings. In the case of holders of securities not exceeding £1,000,* or trustees, provision is made that the Treasurer may spread the new issue over a lesser number of maturity dates than those mentioned. If the new securities were issued to mature at the same period, and if all interest became due on the same date, it would be most inconvenient to the Treasury. Therefore, the months in which the new securities will mature will be spread through the second half of the calendar year, as set out in the bill. The effect of the reduction by 22^ per cent, of the interest rates on the existing securities is shown in table 1 in the schedule to the bill. If this is referred to, it will be seen that in most cases' the reduction of the nominal rate brings about rates which have to be set out in pounds, shillings, and pence. For this reason, the new consolidated securities will be issued at the rates of 4 per cent., 3 J per cent., or 3 per cent., and provision is made for holders of securities on which the nominal interest rate reduced 'by 22-J per cent, would be in excess of 4 per cent, to receive a premium on their bonds when these are converted into the new 4 per cent, stock. The method of calculating the premium or discount is set out in detail in the schedule. **Mr. Stuckey,** who is an actuary, has rendered the Government very considerable service in working out these matters. There are certain securities for which special provision had to be made. The first of these are the tax-free securities. On them the interest reduction of 22£ per cent, will be maintained until the dates when they mature, with the existing conditions as to exemption from taxation. New securities issued in exchange for existing tax-free securities maturing on or before the 31st December, 1934, will mature on the original date of maturity of the existing securities, and will then be reconverted at par, and bear interest at 4 per cent., maturing on the 15th November, 1941. The taxable securities will continue to be taxable after conversion, but will be exempt from the special *1%* per cent, tax that was imposed last November; from State income tax; and from any further Commonwealth income tax. {: .speaker-DQC} ##### Mr Hughes: -- Does that apply to State, as well as Federal, securities? {: #subdebate-17-0-s1 .speaker-KVS} ##### Mr THEODORE:
ALP -- Yes, to the whole of the taxable securities that will come under the conversion plan. In the case of securities held by savings banks, as it may be essential for the conduct of the business of such institutions that the existing dates of maturity shall be preserved, arrangements have been made for this to be done ; but there will be a deduction of 22J per cent, from the interest rate. Special provisions are also needed in the case of overseas trade moneys temporarily invested in Australian securities, and authority is given to the Treasurer to fix such maturity dates for. such securities as may be thought necessary in the circumstances. The Commonwealth treasury-bills now held to cover bank overdrafts, &c, are a special kind of security, and provision is made for their renewal on such terms as the Australian Loan Council may determine, subject to the rate of interest at which they are discounted being reduced to 4 per cent. Peace savings certificates are another kind of security to which the general conversion plan would not apply, and provision is made that they may be continued on the same conditions as formerly. It is necessary for the Government to give six months' notice of any change of interest on such certificates. Such notice will shortly be given, and, therefore, interest on those securities will be reduced from 5 per cent, to 8f per cent, as from the 1st February, 1932. There are only £240,000 of those certificates now outstanding. ( The date at which the conversion is to take place has been fixed as the 31st July, 1931. Interest will be payable on existing securities at the rates now applicable to them up to and including that date; but on and after the 1st day of August, 1931, interest will be payable at the rate' fixed for the new securities which will be issued under the act. Owing to the change in the rate of interest upon conversion, it would be impossible to allow existing bonds, debentures, or treasury-bills to remain current. All such securities must be submitted to be exchanged for new securities. This will not affect the rights of any person under the act, hut even where a holder of bonds, debentures, or treasurybills dissents from the conversion he must surrender his securities, and will receive for them new securities in the form of inscribed stock carrying the same conditions as the original securities carried. {: .speaker-L07} ##### Mr Lazzarini: -- What about inscribed stock ? {: .speaker-KVS} ##### Mr THEODORE: -- There would be no surrender of inscribed stock, the holders of which are identifiable. The provision applies only to bearer securities. {: .speaker-KIT} ##### Mr Mackay: -- Why issue any bonds at all? {: .speaker-KVS} ##### Mr THEODORE: -- That is a pertinent question that was raised at the Premiers Conference, and debated at some length; but it was determined that bonds should be issued as well as inscribed stock, to meet the convenience of investors. {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- Is it possible to introduce an effective safeguard against the evasion of taxation in connexion with bearer bonds? {: .speaker-KVS} ##### Mr THEODORE: -- That is a very difficult thing to do; but it was thought undesirable to interfere unduly with the rights of bondholders, and it suits the convenience of many persons to hold bearer bonds, as they simplify the negotiations of advances in the conduct of business. {: .speaker-DQC} ##### Mr Hughes: -- The present inscribed" stock will be merged into the new stock whether the holder converts or not. {: .speaker-KVS} ##### Mr THEODORE: -- Not if the holder does not convert. Holders of securities other than inscribed stock, however, who do not convert must surrender their securities, and receive in their stead new securities. {: .speaker-KV8} ##### Mr Stewart: -- But the previous rate of interest will be maintained. {: .speaker-KVS} ##### Mr THEODORE: -- Yes, when a holder dissents from conversion. {: .speaker-KIT} ##### Mr Mackay: -- At present, the holder of inscribed stock has nothing to show for it. {: .speaker-KVS} ##### Mr THEODORE: -- An investment in inscribed stock is entered in a register, and a certificate of registration is given. But whether bondholders convert or not, they must surrender theirbearer bonds. Those who do not convert their bonds will receive inscribed stock in their stead. {: .speaker-JOM} ##### Mr Beasley: -- How does that agree with the honorable gentleman's statement that the Government does not wish unduly to interfere with the rights of bondholders. {: .speaker-KVS} ##### Mr THEODORE: -- The Government does not want to impose any undue hardship upon the holders of Government securities. The conversion plan calls for a considerable sacrifice in some cases, but it is not desired to deprive holders of existing rights. The right to hold bearer bonds will be continued, but holders who serve a notice upon the Treasury dissenting from the conversion, must surrender their bearer bonds, and receive in return for them inscribed stock. {: .speaker-F4O} ##### Mr Lyons: -- Such persons can no longer hold bearer bonds. {: .speaker-KVS} ##### Mr THEODORE: -- Only those who convert will be permitted to hold bearer bonds. {: .speaker-L1T} ##### Mr Yates: -- That is one of the bludgeons with which the Government is threatening the bondholders. {: .speaker-KVS} ##### Mr THEODORE: -- Associated with every great conversion plan are conditions which interfere to some extent with the existing rights of holders. We ask these people to waive some of their rights. In the case of certain tax-free securities issued by the States, the effect of the reduction of 22½ per cent, in the interest rate will be to create odd rates of interest, and as it would be impracticable to issue new bonds, debentures, or treasury-bills carrying fractional rates of interest, provision has been made that all new tax-free securities bearing these rates of interest shall be in the form of inscribed stock. Upon the computation of the amount of the new securities, according to the conversion plan, in most cases the principal sum will come to an odd amount. Provision is therefore made that any odd amount not being a multiple of £10 shall be paid in cash, with a right to the holder of the security to contribute further cash to bring his holding up to a higher multiple of £10. I mentioned a little while ago that the rights of trustees may be affected under this conversion operation. Those rights will be protected by legislation. As this Parliament has perhaps not full power to protect the rights of trustees or others occupying a similar fiduciary capacity with regard to the holding of Government securities in Australia, it was agreed at the Premiers Conference that each State Parliament should pass measures to protect such persons, so that they might be enabled to convert their holdings, notwithstanding the terms and conditions of their trust. Such -conversion will not render them liable in regard to their trusteeship. {: .speaker-KMU} ##### Mr Marks: -- That protective measure will have to be put through very promptly. {: .speaker-KVS} ##### Mr THEODORE: -- A uniform bill has been drafted by the Commonwealth and State legal authorities, and, I think, accepted by all the States. Provision has been made that it shall come into operation on the date at which the Debt Conversion Act comes into operation. In the first instance, every holder of existing securities will be invited to convert his securities into new ones, under the terms of the bill. As the conversion is to be on a voluntary basis, holders of existing securities who desire to dissent from their conversion will have the right to record their dissent within fourteen days after the commencement of the act, or in the case of security holders who are absent from the Commonwealth, within six weeks after its commencement. In the case of holders of existing securities who do not apply for conversion, or do not signify dissent, it will be assumed that they desire to convert, and in such cases new securities in accordance with the provisions of the bill will be issued in the place of the old ones. Criticism has been offered regarding the right of governments or parliaments to assume that persons who hold State securities are willing to convert on the conditions offered by a government merely because they have not expressed dissent. It has been said that that is not a fair and equitable assumption. {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- It is a wise provision'. {: .speaker-KVS} ##### Mr THEODORE: -- It is essential if the loan is to be successful. {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- Many persons require their minds' to be made up for them. {: .speaker-KVS} ##### Mr THEODORE: -- That is so. Anticipating that there might be some misgivings on that important point I have sought information regarding the practice and experience of the United Kingdom in handling its large conversion loans. In 1822 the British Chancellor of the Exchequer converted " navy and other 5 per cent, bonds " amounting to £152,000,000 into stock carrying a lower rate of interest. The owners were not asked to assent. The act provided that those who did not dissent were assumed to have assented to the terms proposed, and only two weeks was allowed to holders to notify dissent. That was before the days of telegraphs, and when other means of communication were imperfect. {: .speaker-JOG} ##### Mr Bayley: -- Possibly, little money was held outside of London in 1822. {: .speaker-KVS} ##### Mr THEODORE: -- The honorable member is making a somewhat hasty assumption. In 1824 the British Government converted £75,000,000 from- 4 per cent, to 3£ per cent., and again the nonexpression of dissent was assumed to signify assent. In 1830, £154,000,000 of 4 per cent, stock was converted into 3-J per cent, stock, and assent was assumed, unless dissent was expressed between the 26th March and the 24th April, one month. In 1844 another sum of £249,000,000 was converted from 3£ per cent, to 3J per cent., and assent was presumed, unless dissent "was signified between the 11th and the 23rd March, a fortnight. In connexion with the great conversion loan of 1888, involving a total of £558,000,000, the then Chancellor of the Exchequer, **Mr. Goschen,** when speaking on the second reading of the bill, said - >The experience of previous large conversions shows us that the conditions of successful conversions on a large scale arc that assent should be presumed iri the absence of an expression of dissent, that the time allowed for the expression of dissent should be strictly limited, and that power should be taken to pay off the dissentients in such manner as Parliament may direct. The Chancellor of the Exchequer was charged in some quarters with holding a threat over the dissentients inasmuch as Parliament reserved to itself the right subsequently to determine the time and manner in which they should be paid off. The alternative to conversion presented such unattractive possibilities to existing holders that they were literally forced to convert. {: .speaker-L1T} ##### Mr Yates: -- Were those conversions on the due dates? {: .speaker-KVS} ##### Mr THEODORE: -- Some of the loans were interminable. In connexion with the 188S loan the Government must have had the right to pay off at any time. {: .speaker-L1T} ##### Mr Yates: -- Were the loans that were so treated maturing? {: .speaker-KVS} ##### Mr THEODORE: -- There was no fixed date of maturity. {: .speaker-KDW} ##### Mr Jones: -- Is there any provision for holders of bonds that will mature next year to be paid off? {: .speaker-KVS} ##### Mr THEODORE: -- No. {: .speaker-KXT} ##### Mr Paterson: -- But I think that the Treasurer stated, in respect of bonds maturing in 1931 to 1933, that, in the event of holders desiring to convert, the dates "of maturity would not be altered. {: .speaker-KVS} ##### Mr THEODORE: -- I was referring to certain tax-free securities maturing from 1931 to 1934. The present immunity from taxation will be continued to the original date of maturity, after which such securities will be converted into the consolidated stock. Huge amounts will mature in Australia during the next few years, and that emphasizes one of the incidental, but important, advantages of this conversion scheme. The primary object of it was not to discover an easy way to deal with maturing loans, but rather to reduce the rate of interest, as part of a complete plan for the distribution of the loss of national income, but incidentally this scheme will solve the important problem that would be presented by large loans maturing within the next few years. These have naturally caused a great deal of anxiety to Commonwealth and State Governments, and will be a matter of concern to subsequent governments unless a general conversion plan is agreed to. For instance, in 'the next seven years, Commonwealth securities alone, aggregating £258,000,009, will mature. The following analysis shows the principal Commonwealth securities, exclusive of treasury-bills, that will mature in each of the next ten years : - Under this conversion scheme ten new maturity dates will be fixed, extending to 30 years. This scheme will give a more even distribution of the debt over the intervening years, and provide for manageable amounts in each period. It provides, also, maturity dates which will enable a better spread of interest payments over the mouths of each year, and avoid the necessity for Treasurers to store money for the payment of large sums in June or December, or at other periods of the year which may be inconvenient. The total amount of the Commonwealth and State debts contracted within Australia is £556,000,000. If we take the holdings of the Commonwealth and State Savings Banks, the maturity dates of which are subject to arrangement, at £117,000,000; and tax-free securities held by the public and governmental authorities, other than savings banks, the maturity dates of which remain as at present, at £50,000,000; and treasurybills held by banks, which will not be converted into long-term securities, at £22,000,000, and certain securities representing overseas trade moneys at £7,000,000, we arrive at a total of £196,000,000, which will not be required to be distributed over the various maturity dates. This leaves £360,000,000 to be so distributed. If that amount were evenly distributed over ten maturity dates the sum of £36,000,000 would mature on. each date. {: .speaker-K0A} ##### Mr Gabb: -- That is on the basis of 100 per cent, conversion? {: .speaker-KVS} ##### Mr THEODORE: -- Yes. I think that we have a right to expect complete success for the conversion loan. It may be that a few individuals, for a variety of reasons, will dissent; but it would be a mistake to assume that the conversion as a whole will not be a success. In Great Britain the conversions in the earlier part of the nineteenth century, and those handled by **Mr. Goschen,** covered almost 100 per cent, of the indebtedness. Of the huge total of £200,000,000 only £1,000.000 was left unconverted. It is significant, however, that one conversion scheme - I think it was proposed by **Mr. Gladstone** when Chancellor of the Exchequer in the early fifties - was not a success, and that in that instance the bondholders were given a long period in which to notify their intention to convert. That was a departure from what had been the general practice up to then of assuming conversion in the absence of dissent. {: .speaker-KXT} ##### Mr Paterson: -- The conversion scheme would fail here if that were done. {: .speaker-KVS} ##### Mr THEODORE: -- I have no doubt of it. The lesson is worth remembering. If we departed from the principle laid down in the bill we should endanger the success of the scheme. {: .speaker-KNP} ##### Mr Maxwell: -- On what principle is the distribution made over the ten maturity dates? {: .speaker-KVS} ##### Mr THEODORE: -- The small amounts held by individual bondholders among the public will be consolidated in the earlier years or distributed over the seven, ten; and thirteen year periods. If there is a block of £100,000 worth of securities it will be distributed in £10,000 groups over the ten periods. {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- What is to be described as a small holding? {: .speaker-KVS} ##### Mr THEODORE: -- Anything up to £1,000. Owing to the large amount which will not have to be distributed, it should be possible to increase the amount maturing in the 1938, the 1941, and the 1944 periods by, say, £20,000,000 in each period, making the total redeemable on each of those dates, £56,000,000. {: .speaker-KNP} ##### Mr Maxwell: -- Will the investor, when asked to convert, bc informed when his securities will mature, if he does convert ? {: .speaker-KVS} ##### Mr THEODORE: -- The conditions are set out in the bill, and full information will be conveyed by means of advertisement. Under the plan, the bulk of the small holdings will be consolidated at *1,* 10, and 13 year periods. There is to be a right to redeem outstanding stock on the 31st December, 1950. We have in this plan, preferred to make conversion a matter of agreement rather than of compulsion. A great deal of attention was given at the Premiers Conference to this aspect of the matter, and unanimity in favour of voluntary conversion was eventually arrived at. {: .speaker-JOM} ##### Mr Beasley: -- What will be the extra cost of carrying out this conversion? {: .speaker-KVS} ##### Mr THEODORE: -- Colossal as the conversion scheme is, the cost will be negligible. The Government will have no brokerage to pay, no underwriting commissions, nor any of the ordinary charges attached to the raising of a new loan. Nor will it have to make the usual costly appeal to the public for subscriptions. The only expense involved will be that of sending out notifications circularizing bondholders, and such advertising as may be necessary to bring the details of the plan fully before the notice of subscribers. The condition of national emergency in Australia makes an adjustment of our interest burden imperative, and also necessitates what we hope will be achieved through this plan, namely, easier credit conditions, a healthier tone in the Australian money market, more confidence among investors in government securities of all kinds, future stability of the market, and lower interest rates for the future. If we can obtain those additional advantages, which would mean so much to the nation, from a conversion based on a voluntary appeal, that will undoubtedly outweigh any possible advantages which might be claimed for compulsion. The desirable objects I have enumerated can best be achieved by co-operation ; they cannot be achieved by terrorism or brutal threats of compulsion. Of course, the bondholder must realize that with him also it is a matter of give and take; that without this rehabilitation plan he might lose a great deal more than he will sacrifice under it. "Without it he might lose, or at least seriously imperil, the whole of his capital in so far as it is invested in government -bonds. If bondholders co-operate with the Government, and freely convert their "holdings, they will protecttheir own securities, and help the country as well. That ought to influence bondholders to do what they can to make the plan a success. Regarding future interest rates, I hinted here during the course of my speech, and expressed the hope in more definite terms elsewhere, that the conversion plan may lead to a permanent reduction of government loan rates in Australia. I know that the plan does not guarantee any such thing. It brings down the nominal rate, and reduces the interest burden on outstanding securities, but it does not guarantee a permanent reduction of the interest rate, because if there continues to exist, after the conversion scheme has been carried through, lack of confidence and dread of what may happen in the future, the new securities may slump on the market as the existing securities have done. It is idle for me to claim that the Government's plan guarantees for the future a 4 per cent, government loan rate, and I know that it may be regarded as unduly optimistic even to hope that it may establish such a rate for any long period. But I certainly think that a 4 per cent, government loan rate is something that, we should aim at, and if the bankers, the stock exchange operators, the bondholders, and the general public become confident of our ability to emerge from our present difficulties, it will be possible to have a 4 per cent, consolidated Australian stock placed upon a permanent basis, and quoted at, or near, par upon the exchanges. To accomplish that we must have the acceptance. of this plan by the bondholders. We must have the thorough co-operation and proper recognition of the bona fides of each party to the scheme. We must have, too, the monetary support of the market. That, I believe to be essential in a matter of this kind. We owe.it to the existing holders of government bonds to sup port the market and uphold the value of their securities. At present we have no means of doing this, except so far as it can be done by the employment of sinking funds in the hands of the Government, to purchase a particular class of stock. In England, at times, funds have been established for the purpose of supporting British consols. The Commonwealth, during the war, established a fund for the purpose of maintaining the market, and of helping the holders of securities. I believe that something of the kind might be done with respect to this conversion; but this operation is so gigantic that a fund would have to be of considerable dimensions to be effective. The Government is cooperating with the banks and other financial institutions which are vitally concerned in maintaining the value of their securities. We hope, therefore, to effect something in that direction. No provision has been made for maintaining the value of securities under the plan as agreed upon by the various governments, but it is a matter that we shall have to consider seriously with a view to bringing about stability in our security market. I have given as much detail as I think necessary to enlighten those who wish to study the conditions of the proposed conversion. This proposal affects a vast number of people. Some of the small bondholders may regard themselves as being harshly treated; but the plan is designed to protect the interests of small and large bondholders alike, and to protect holdings in government securities, which would be imperilled unless some general financial rehabilitation were agreed to. Debate (on motion by **Mr. Lyons)** adjourned. {: .page-start } page 3138 {:#debate-18} ### ADJOURNMENT Ministers' Travelling Expenses - Reduction of Soldiers' Pensions - Repatriation of Excess CoalMiners - Governmental Expenditure : Personal Explanation. Motion (by **Mr. Scullin)** proposed. That the House do now adjourn. {: #debate-18-s0 .speaker-K0A} ##### Mr GABB:
Angas .- I wish to say a little more on the subject of travelling expenses for Ministers, about which *L* asked a question in this House this afternoon. Now that I have fuller information at my disposal, I feel that 1 should be lacking in my duty to my constituents if I did not make some protest against the enormous travelling allowances which are drawn by Ministers. I am not discussing this subject merely because the Labour party happens to occupy the treasury bench. The Prime Minister has said that travelling allowances for Ministers have been provided since federation. {: .speaker-K7U} ##### Mr Crouch: -- The States also provide travelling allowances for Ministers. {: .speaker-K0A} ##### Mr GABB: -- That Ls so. I do not know whether the travelling allowances for Ministers have been at the rate of £2 2s. a day, or, in the case of the Prime Minister, £3 3s. a day, since federation; but I should be much surprised if, upon investigation, I found that to be so. The Prime Minister, in reply to my question, said that he had investigated this matter, and had ascertained that on many occasions not one-third of the allowances provided for Ministers had been drawn by them. I find that the Minister for Trade and Customs **(Mr. Forde)** drew £525 in twenty months. {: .speaker-KZR} ##### Mr White: -- What about his secretary? {: .speaker-K0A} ##### Mr GABB: -- I intend later to gather details of the travelling allowances of ministerial secretaries and expenditure on motor hire. I recognize that the Minister for Trade and Customs is most obliging and enterprising, and has many calls upon his time, but I am taking his case because he has drawn the highest allowance. Had I an opportunity to investigate the Prime Minister's statement that Ministers had drawn only onethird of the allowance to which they were entitled, I am convinced that the statement would bc found to be incorrect, at least in respect of most Ministers. An allowance of £525 in twenty months works out at £26 53. a month, £6 6s. a week, or £2 2s. a day of three days in every week since this Parliament was elected. During that period there have been 86 Sundays. This Parliament sat on 163 days during that period, and we must add to that the days on which the Minister was in Canberra attending Cabinet and caucus meetings. We have also to ascertain the number of days other than Sundays which the Minister spent in his own home, and the days on which he visited his own electorate. During the twenty months therewere two periods of Christmas holidays.In view of those facts, I cannot accept the statement of the Prime Minister that the Minister for Trade and Customs and most of the other Ministers have drawn only one-third of the allowance that they could have drawn. What is the position to-day? As a member of this Parliament I am asked to support a reduction of ls. a week in a pension of 5s. 6d. now paid to the inmates of the old men's home at Magill, South Australia. I am asked to support that proposal, distasteful as it is to me, in order to assist, even in some small degree, to bring about financial stability. Therefore, I cannot remain silent while Ministers, on the figures I have quoted, are drawing travelling allowances of £2 2s. a day, while in receipt of a salary of £5 or £6 a day. What is the position of a Minister who is travelling on public business? He is supplied with a gold pass, which enables him to travel on the railways free of cost, and is not obliged to incur the expense of motor hire. "What expenses does he incur that necessitate an allowance of £2 2s. a day? It is too much to ask me to countenance such things. The Prime Minister has said that there must be a drastic reduction in governmental expenditure in certain directions, and surely the time has arrived when Ministers' travelling allowances should be substantially reduced, or entirely dispensed with. **Senator Daly,** when holding the portfolio of VicePresident of the Executive Council, drew £382 in travelling allowances. He has not been a member of the Government for some months, but I should like the Prime Minister to say if' it is correct that he drew only one-third of the amount he could have drawn. In his case I have not had time to institute a comparison on the same basis as that used with respect to the allowances paid to the Minister for Trade and Customs. The position of the PostmasterGeneral **(Mr. A. Green)** differs somewhat from that of **Senator Daly,** as he has been a member of the Cabinet for twenty months. The PostmasterGeneral has drawn £359, but I cannot believe that he has received only one-third of the amount to which the Prime Minister says he, in common with other Ministers, was entitled. The ex-Minister for Health **(Mr. Anstey)** is another who has made a welter of this practice to the extent of £369. The present system cannot be allowed to continue, and I appeal to the Prime Minister to consider making an adequate reduction in Minister's travelling allowances, or discontinuing them altogether. {: .speaker-K7U} ##### Mr Crouch: -- If a reduction were made it would not prevent a reduction in the allowance of the honorable member. {: .speaker-K0A} ##### Mr GABB: -- The honorable member for Corangamite is endeavouring to draw a red herring across the trail. My attitude with respect to the salary of honorable members will bear favorable comparison with that, of the honorable member. If he will submit a motion to reduce the salary of members to £600, I will second, and support it. {: #debate-18-s1 .speaker-K7U} ##### Mr CROUCH: -- I favoured a reduction to £500, but the honorable member would not support me. {: .speaker-K0A} ##### Mr GABB: -- I have no recollection of the honorable member having submitted such a motion ; but if he will do so, I will support it. {: .speaker-K7U} ##### Mr CROUCH: -- I shall keep the honorable member up to that. {: .speaker-K0A} ##### Mr GABB: -- As the Government has decided to make a reduction in invalid, old-age and war pensions, I am prepared to do the work expected of me in this Parliament for £500 a year during the crisis, provided other members do likewise. There is no need whatever for Ministers to be paid £2 2s. a day as a travelling allowance, in addition to the remuneration they receive as Ministers. The action of some of them seems to me akin to exploitation, a word which I use in the sense of selfishly utilizing the opportunities available to obtain all one possibly can when serving in a public capacity. The Government must take drastic action in this matter. On the other hand, I wish to congratulate the Prime Minister **(Mr. Scullin),** the Treasurer **(Mr. Theodore),** and the Assistant Minister **(Mr. Culley),** who has recently resigned, upon the comparatively small amount which they have received from this source. The time is rotten ripe for action to be taken in the direction of discontinuing travelling allowances to Ministers who are already well remunerated, particularly when the finances of this country are in such a state that the pensions of invalids, the aged, and those who served this country in the Great War have to be reduced. {: #debate-18-s2 .speaker-JUB} ##### Mr D CAMERON:
BRISBANE. QLD · NAT .- I direct the attention of the right honorable the Prime Minister **(Mr. Scullin)** to a paragraph which appeared in the Melbourne *Argus* of yesterday concerning the committee appointed to inquire into the reductions to be made in war pensions. The paragraph is to the effect that the chairman of the committee, Professor Giblin, said that there was some doubt in the minds of the members of the committee as to the actual meaning of the Prime Minister's statement when he announced that such a committee was to be appointed. In order that the work of the committee may proceed satisfactorily and expeditiously, perhaps the right honorable gentleman will state exactly the terms of reference, so that there may not be any misunderstanding in the matter. {: #debate-18-s3 .speaker-JWT} ##### Mr FRANCIS:
Moreton .- Recently I asked the right honorable the Prime Minister **(Mr. Scullin)** if he would table the correspondence which has passed between his department, the Assistant Minister for Industry and the committee dealing with the repatriation of excess coal-miners in Queensland. Although the right honorable gentleman said that that would be done, I have made inquiries of the officers of the House and of the Parliamentary Library, and find that the correspondence has not yet been made available. {: .speaker-F4Q} ##### Mr Scullin: -- I intended to table it, but overlooked the matter. It will be made available on Tuesday. {: .speaker-JWT} ##### Mr FRANCIS: -- There seems to be a general impression among those interested in the repatriation of excess coal-miners in Queensland that the Government is concentrating upon employing excess coal-miners by developing the shaleoil industry in New South Wales, and that some indifference is being shown to the excess coal-miners in Queensland. I ask the Prime Minister if the same consideration will be given to the claims of the men in that State as is apparently being given to the repatriation of excess coal-miners in New South Wales. In that State the Government has placed the services of **Mr. Gunn,** a member of the Development and Migration Commission, at the disposal of the committee, and I ask the Prime Minister if that gentleman's services can also be made available on behalf of the Queensland coal-miners to co-operate with the committee in that State. Already this matter has been delayed too long. Although the Government's offer of £100,000 was made fourteen months ago, not one man has yet been repatriated. I would be neglecting my duty if I did not urge expedition, particularly as many of the men are in financial difficulties and many are in very needy circumstances. I trust that the Government will make **Mr. Gunn's** services available in the direction I have suggested, and that the work of the committee will be completed with the utmost expedition. {: #debate-18-s4 .speaker-L1T} ##### Mr YATES:
Adelaide .- My attention has been directed to an interjection made a day or two ago by the honorable member for Fawkner **(Mr. Maxwell)** when the honorable member for Perth **(Mr. Nairn)** was speaking. It was to the effect that I had made the extraordinary statement that all governmental expenditure was reproductive. Evidently the honorable member for Fawkner waited until I had left the chamber before making that assertion. Had I been present I would have denied it. {: .speaker-KNP} ##### Mr Maxwell: -- Does the honorable member suggest that I would do such a thing? {: .speaker-L1T} ##### Mr YATES: -- I cannot conceive of the honorable member attributing to me a statement so far from fact. I have said that government undertakings are profitable so far as actual earnings are concerned, but that such is not the case when interest is included. There is not one undertaking in the Commonwealth today that is profitable to the people. As a member of the Joint Committee of Public Accounts which inquired into the revenue of certain governmental activi ties, I have been supplied with figures over a series of years with respect of some governmental undertakings. I shall quote certain figures for South Australia which are indicative of the position in all the States. A table showing the loan assets, liabilities and interest, and result of loan operations of South Australia for 1929-30 covers the following items : - {:#subdebate-18-0} #### Business Undertakings {:#subdebate-18-1} #### Railways Country waterworks. Harbours and jetties. Metropolitan waterworks and sewers. Water conservation. {:#subdebate-18-2} #### Loans and Advances Soldier settlement. Advances for homes. {:#subdebate-18-3} #### Municipal Tramways Trust Advances to settlers, &c. Closer settlement. {:#subdebate-18-4} #### Advances to State Bank {:#subdebate-18-5} #### Metropolitan and Abattoirs Board {:#subdebate-18-6} #### Public Works {:#subdebate-18-7} #### Irrigation Roads and bridges. River Murray, weirs, locks, &c. School buildings. Other buildings. South-eastern drainage. Improvements on pastoral leases. {:#subdebate-18-8} #### Afforestation {:#subdebate-18-9} #### Other Purposes Railway depreciated assets and relaying. Revenue deficits funded. {:#subdebate-18-10} #### Miscellaneous The only item in the list which shows a profit in the profit and loss column is Metropolitan waterworks and sewers, the profit being £259,041. All the other operations show a loss, when earnings, expenses, and interest and sinking fund contributions are taken into account. It will thus be seen that I was fairly accurate in my statement. The total loan liabilities for 1929-30 in respect to the works that I have enumerated were £96,829,817; the total earnings, £5,939,440; and the expenses £4,176,911. There was thus an excess of earnings over expenditure, leaving out of account interest and sinking fund payments. But the obligations under that heading amounted to £5,045,084. The total loss on all the undertakings was therefore £3,282,555. As I have said, the position of South Australia is, to a large extent, the position of the other States. I wish to inform the honorable member for Fawkner **(Mr. Maxwell)** that before I make statements of the kind to which he referred in his interjection, I take pains to find out the facts. In this particular instance, my statement was in accord with the facts. {: #subdebate-18-10-s0 .speaker-F4Q} ##### Mr SCULLIN:
Prime Minister · Yarra · ALP -- The honorable member for Angas **(Mr. Gabb)** has again called attention to the amount drawn in travelling expenses by Ministers - a matter to which he referred at question time today. He used a race-course term, and said that Ministers "were making a welter of it". I endeavoured to show clearly in replying to the honorable member's question that Ministers were far from " making a welter of it ". The payment of travelling allowances to Ministers and public servants engaged on official business away from their homes is a practice which has been followed for at least 20 years. {: .speaker-K0A} ##### Mr Gabb: -- Has £2 2s. a day been paid for 20 years? {: .speaker-F4Q} ##### Mr SCULLIN: -- I do not suppose that that amount has been payable for the full term. The amount payable a day, will, like all other expenditure, be subject to a reduction in accordance with the economy plan. This morning I said that Ministers had not drawn more than one-third of the amount to which they were actually entitled, and I emphasize that statement. In some cases, not more than a fifth of the amount to which Ministers are entitled has been drawn. My attendance at the Premiers Conferences alone would, at £3 3s. a day, have exceeded the total amount that I have drawn. The honorable member saw fit to single out the Minister for Trade and Customs **(Mr. Forde)** for special denunciation. {: .speaker-K0A} ##### Mr Gabb: -- I referred to him only because the amount that he drew was the highest amount drawn. {: .speaker-F4Q} ##### Mr SCULLIN: -- There are special circumstances in the case of the Minister for Trade and Customs. Since the assumption of office by this Government that honorable gentleman, while an honorary Minister, and not in receipt of a full ministerial salary, acted as Acting Minister for Trade and Customs. He has also acted as Acting Minister for Markets and Transport. Probably, he is the most energetic Minister Australia has ever had. He has had many requests from honorable members of all shades of political opinion to visit various districts. If he had claimed the full amount of travelling allowance to which he was entitled, he would have received a very much larger sum than he has actually drawn. {: .speaker-K0A} ##### Mr Gabb: -- There cannot be many days left in respect of which he could draw allowance. {: .speaker-F4Q} ##### Mr SCULLIN: -- I have personally checked the returns, and I assure the honorable member that many additional days could have been charged for. It cannot be expected that Ministers, who are called upon to do a great deal of travelling in the discharge of their official duties, shall do it at their own expense. It is all very well to say that Ministers draw a salary, but that does not by any means cover the situation. I intensely dislike having to discuss these matters. I believe that this is the first occasion on which the subject has been brought up in Parliament. {: .speaker-K0A} ##### Mr Gabb: -- This is the first time that Australia has been in such a serious position. {: .speaker-F4Q} ##### Mr SCULLIN: -- That may be quite true ; but it is recognized that Ministers and public servants who are obliged to travel in order to discharge public duties are entitled to travelling expenses. {: .speaker-K0A} ##### Mr Gabb: -Would not one guinea a day be a fair thing under the present circumstances ? {: .speaker-F4Q} ##### Mr SCULLIN: -- I ask the honorable member to allow me to make my speech without interruption ; I listened to him in silence. "While I draw the highest ministerial salary I assure honorable members that my net return is less than it was when I was a private member. It must be remembered that the Minister for Trade and Customs has been preparing material for the purpose of taking charge of the debate on the most extensive tariff schedule that has ever been tabled in this Parliament. He has had to spend a large amount of time in making inspections, conducting interviews, and hearing deputations in various parts of the Commonwealth. He has handled this business in a most masterly way. It has not been possible for him to inform his mind on all these matters without considerable expenditure and much travelling. It is, unfortunately, true that Ministers cannot travel as cheaply as private members. The honorable member for Brisbane **(Mr. D. Cameron)** said that the committee investigating the proposed economies in soldier pensions appears to be somewhat doubtful about the terms of the reference to it. He was good enough to hand me the newspaper report upon which he based his statement. He also acknowledged that my statement on the subject was quite clear. As a matter of fact, the terms I used were taken from the resolution adopted by the soldiers' representatives. They asked me to do a certain thing, and I agreed to do it. The only thing that the Government fixed was the amount of the economies to be effected. The soldiers' committee was asked, at its own request, to make inquiries with the object of recommending how economies to this amount could be made with the least hardship and the fewest anomalies. In the circumstances, I cannot understand why there should be any uncertainty about the terms of reference, and if there is any such uncertainty I am surprised that I was not asked to clear it up. I point out that ProfessorGiblin and, in fact, all the members of the committee, were nominated by the soldiers' organizations. When **Mr. McCann** found that he was unable to come from Adelaide, **Mr. Holland** was nominated in his stead. {: .speaker-KZR} ##### Mr White: -- I think that the trouble has arisen because of ambiguities in the press reports of the Prime Minister's statement. {: .speaker-F4Q} ##### Mr SCULLIN: -- Perhaps I had better read a letter which I sent to Captain G, *J.* C. Dyett, the Federal President of the Returned Sailors and Soldiers Imperial League of Australia. It is as follows : - >I desire to confirm the arrangements made to-day in conference, when it was decided that the Governmentwould appoint a special committee to consider questions relating to the necessary reduction of war pensions. > >The personnel of the committee will be Major-General T. H. Dodds; Professor L. F. Giblin; **Mr. McCann, president** of the South Australian branch of the Returned Sailors and Soldiers League; **Mr. C.** M. Farrow, federal president, Limbless Soldiers Association; **Mr. A.** J. Chambers, general president, Tubercular Soldiers Association; **Mr. P.** J. Lynch, acting federal president, BlindSoldiers Association. > >Under the plan agreed upon by the Commonwealth and the State for meeting the grave financial emergency existing in Australia, the Commonwealth Government has undertaken that a saving of £1,291,000 will be effected in the expenditure on war pensions. The plans of the Government for effecting this saving were placed before Parliament by the Treasurer of the Commonwealth yesterday. > >It is the desire of the Government that the necessary saving should bemade with the least possible hardship to war pensioners, and without creating anomalies. The Government accordingly invites the committee to examine the position and tosubmit to the Government its views us to the best course to be adopted to secure the necessary saving. > >The committee will be - given all possible facilities to obtain from the Repatriation Commission any information it desires in regard to war pensionpayments. > >In view of the urgency of the matter, it is desired that the committee commence its investigations at the earliest possible moment, and that the report of the committee be furnished to the Government in Canberra not later than Thursday morning, 2nd July. > >I shall be glad if you will be good enough to ask the committee to meet in Melbourne on Monday next and go straight on with its inquiries. > >Yours faithfully, J. H. Scullin, Prime Minister. Mr.R. Green. - Is the Government asking the committee to find the £1,200,000? {: .speaker-F4Q} ##### Mr SCULLIN: -- The Government has acceded to the request that a committee should go into the matter and make suggestions as to how economies in war pensions can best be made. I stated clearly in the House the other day that if the report of the committee arrived in time, and was acceptable to the Government, the bill would be amended accordingly. I did not undertake that the Government would accept the report; I made that reservation. I also said that, if the report did not arrive in time, the Government would have to go on with its legislation. But I added that even if we had proceeded with that legislation to the extent of having passed it through both Houses of Parliament, and the report which came to hand subsequently was acceptable to the Government, an amending bill to give effect to the committee's recommendations would be introduced. Mr.R. Green. - Has the right honorable gentleman received any progress report from the committee? {: .speaker-F4Q} ##### Mr SCULLIN: -- I received an interim report from the committee about half an hour ago, but I have not had time to read it. I shall do so at the first opportunity, and shall probably make it available to honorable members whon we resume next week. The honorable member for Moreton **(Mr. Francis)** raised the question of the repatriation- of tho excess coalminers of Queensland. I regret that 1 did not make the papers available yesterday. I intended to do so, but overlooked the matter. *1* shall, however, give instructions for them to be placed on the table of tho Library. I have no objection to the services of **Mr. Gunn** being made available as requested by the honorable member, but I point out that we cannot agree to the whole £7,000 being expended in making an investigation. {: .speaker-JWT} ##### Mr Francis: -- **Mr. Gunn** is an officer of the department. {: .speaker-F4Q} ##### Mr SCULLIN: -- In all these journeys travelling expenses and travelling allowances arc incurred. I shall go into the matter and sec what canbe done. Question resolved in the affirmative. House adjourned at 4.23 p.m.

Cite as: Australia, House of Representatives, Debates, 26 June 1931, viewed 22 October 2017, <http://historichansard.net/hofreps/1931/19310626_reps_12_130/>.