13th Parliament · 1st Session
Mr. Speaker (Hon. G. H. Mackay) took the chair at 3 p.m., and read prayers.
– In view of the substantial reductions of wages ordered by industrial tribunals to meet the exigencies of the business depression, I ask the Attorney-General whether the Government can do anything to encourage prosperity sharing schemes between employers and employees, which would eventually recompense the employees for the sacrifices they are now required to make?
– The Arbitration Court generally takes into account the prosperity or depression of an industry when fixing wage rates and other industrial conditions. The Government has no legal power to take the action suggested by the honorable member, nor would this Parliament be able to legislate on the subject. Any arrangement of the nature proposed would have to be by voluntary agreement between employers and employees, but if it is thought that the Government can do anything to encourage such a scheme, very careful and favorable consideration will be given to the matter.
– Having regard to the prominence given in the press to alleged statements by the PostmasterGeneral (Mr. Fenton) that he proposes to vote against the Government on certain items of the tariff schedule, will the Prime Minister consider the adoption, as a matter of policy, of the eminently rational arrangement come to by the British Cabinet recently, that on the tariff issue Ministers should agree to disagree?
– Cabinet would be quite prepared to consider that proposal, but I do not say that it would be likely to adopt it.
– Will the Minister for the Interior institute inquiries regarding the high prices charged for petrol in Canberra and ascertain whether a combine is operating for the purpose of maintaining unduly high charges ?
– I shall have inquiries made into both matters.
– The newspapers report that an agreement has been made between the sugar interests and the Commonwealth Government for a reduction of the price of sugar. Will the Prime Minister say whether that is correct ?
– by leave - At the Loan Council in Melbourne in January last, I announced that a voluntary review of the sugar agreement would be made as early as circumstances would permit. Accordingly, Senator McLachlan, on behalf of the Government, visited Queensland in July last, and presided over a conference in Brisbane, at which the representatives of the sugar producers and refiners agreed to reduce the wholesale selling price of sugar so as to permit of the retail price being reduced by½d. per lb. from the 1st March, 1933, provided the new prices of sugar were maintained until the 31st August, 1937..
– Because the Commonwealth Government pointed a gun at their heads. ‘
– That is not so. The Brisbane conference was in the nature of a preliminary discussion of the matter. The Government was not satisfied with this offer by the sugar producers, particularly as it involved an extension of the period of the present agreement by one year. A final conference was held in Canberra on the 3rd September, and those present decided unanimously, to recommend to their executives that the wholesale price of sugar should be reduced by the equivalent of id. per lb. retail, as from the 1st January, 1933, and that the new price should continue during the currency of the present agreement, which will terminate on the 31st August, 15)36 - subject to I ho new agreement between the’ Commonwealth and Queensland Governments being approved by an act of the Commonwealth Parliament.
The conference decided also to endorse an automatic reduction of the special contribution by the sugar industry to the fruit industry, which is provided for in the present sugar agreement, in the event of the general price of sugar being reduced. The previous contribution of £315,000 per annum will therefore be reduced to £200,000 per annum as from the 1st January, 1933. The reduction of £115,000 per annum is somewhat less than- the value of the general fall of -)d. per lb. in the retail price, and the new annual contribution of £200,000 has been accepted as satisfactory by all the large fruit organizations. The delegates to the Canberra conference then returned to Brisbane to meet their executives, and the Government’ made available the services of Mr. A. It. Townsend for the purpose of explaining’ all details of the position to the sugar executives. I am now pleased to be able to announce the receipt of advice from the Australian Sugar Producers Association and the Queensland Cane Growers Council, that their executives have ratified the decision of the Canberra conference, and a telegram from the Premier of Queensland stating that his Government acquiesces in the arrangements and now awaits a draft of the new agreement.
– But it is totally opposed to what the Commonwealth Government has done.
– This adjustment has been made upon a voluntary basis, as a result of suggestions made by the Government, and it will, I believe, be gratifying to the community as a whole. The sugar producers themselves will benefit considerably, by securing stability and security for the next four years, whereas previous sugar agreements had not the final authority of Parliament, and were open to attack in other respects. The consumers of sugar will derive considerable advantage by this contribution of the sugar producers to thu national rehabilitation policy. Housewives will pay £1,000,000 less each year, and manufacturers approximately £300,000 less. These substantial savings will reduce the cost of living and of production, and help industry generally. The attitude of the Commonwealth Government has been to hold the scales fairly and evenly between producers and consumers.. It recognizes that the sugar industry was not allowed during, and for some years after, the war to obtain the full benefit of inflated world’s ‘ prices, and that the maximum retail price of sugar was reduced by Id. per lb. in 1922 and a further id. per lb. in 1923.
Taking all the circumstances into consideration, the arrangements now completed, subject to the approval of Parliament, are regarded by the Government as equitable to sugar producers and consumers. The Government hopes that these arrangements will be endorsed by Parliament.
In reply to the suggestion that the agreement was made at tho point of the pistol, let me say that, at the conference in Canberra, one of the representatives of the Cane Growers Council asked me definitely whether, in the event of their not agreeing to the proposal which I was putting before them, when the time arrived for a review of the sugar prices the Government would make the industry pay for its refusal to vary the terms of the agreement. In reply I said that in no circumstances would this Government punish any section of the community, but that we would deal fairly with the position in the light of facts then disclosed. I added that we were suggesting a voluntary variation of the agreement, and that no compulsion would be used by this Government with regard to the matter.
– I ask the right honorable the Prime Minister if it is a fact, at stated by >a member of this House in the
Sydney Domain on Sunday last, that the right honorable member for Flinders (Mr. Bruce) has been appointed Resident Minister in London at a salary of £5,000 a year in addition to being provided with a mansion, or is the statement merely so much lying propaganda emanating from a depraved mind?
– The right honorable member for Flinders, while remaining in London, will receive altogether £3,750 from Commonwealth funds, that amount being made up of his allowance as a member of the House of Representatives, his allowance as Minister, and allowances for expenses in London. The salary of the High Commissioner was £3,000 a year, plus £2,000 allowances, or a total of £5,000.
– Less the cuts.
– That is so. Under the Financial Emergency Act the salary has been reduced to £3,750, the amount which the right honorable member for Flinders is receiving. While this arrangement continues, we shall be saving the equivalent of the right honorable member’s allowances as a member and Minister. He will occupy the official residence of the High Commissioner in London.
– Can the Prime Minister say if the amount of £2,100 for expenses is included in the statement which he has just made?
– The £2,100 referred to is included in the £3,750 which the Right Honorable the Resident Minister will receive. It does not, of course, include the cost of maintaining the High Commissioner’s office. All the figures relating to that matter are to be found in the Estimates.
– As many overseas vessels trading in Australian waters obtain full supplies of bunker coal in South Africa and elsewhere, enabling them to avoid coaling here, to the injury of the Australian coal industry, will the right honorable the Prime Minister consider the possibility of taking action to require the owners of such vessels to obtain in Australia the bunker coal necessary for the return voyage ?
– I understand that the matter is receiving the attention of the Tariff Board. I shall have inquiries made, and let the honorable member know.
– In view of the fact that under the shipping laws ofthe United States of America, British vessels are prohibited from calling at more than one American port, will the Government take into consideration the amending of our Navigation Act to prevent American vessels, notably those belonging to the Matson line, from calling at more than one Australian port, and thus safeguard the revenue of Australian railways and shipping companies ?
– There is no law in the United States of America to prevent foreign vessels from calling at more than one American port. The American law merely prevents foreign vessels from carrying passengers or cargo from one American port to another: There is a similar law in Australia. Consequently, the Matson liners, or the vessels belonging to any other foreigncompany, are unable, unless they comply with Australian conditions - and no foreign vessels are doing this - to carry passengers or cargo from one port in Australia to another.
– Can the Acting Minister for Trade and Customs say if it is the intention of the Government, as stated in the press, to impose a dumping duty on certain shipments of petrol now en route from Roumania to Australia ?
– So far, the matter has not received attention from the Government. At the present juncture we are unaware, officially, of any such shipments.
– Has the Minister for the Interior noticed a report of the conditions governing the entry of Italians into Australia, and of the political influence brought to bear to victimize Italian nationals opposed to the Fascist Government? Also, will he inform the House of the full details governing the entry of Italians into Australia contained in the agreement made between the BrucePage Government and the Italian Government?
– If the honorable member will place his question on the notice-paper, I shall have inquiries made; but, so far as I am aware, there is no ground for the statement contained in the question.
-Will the right honorable the Prime Minister affirm or contradict the statement appearing in the Adelaide press, sent allegedly from Canberra, that the Government expects to be able to reduce taxation as a new year’s gift to the people of Australia?
– I have not made any such statement; but 1 have expressed the hope that, in the not too distant future, our circumstances will be such as to enable us to give some relief in taxation, which is sadly needed at the present time.
– In view of the many recent requests for the distribution to the unemployed of surplus military clothing, I ask the Assistant Minister for Defence to say if this can be done?
– So soon as surplus or part-worn military clothing is available, it is forwarded to the Premier’s Department in each State, and distributed, through the usual channels, to the poor and needy.
– Will the right honorable the Prime Minister lay on the table of the House a copy of the conditions under which the Newnes shale oil deposits have been leased to Messrs. Chambers and Treganowan ?
– I think the agreement and papers connected therewith have been tabled in the Senate. I shall be pleased to comply with the honorable member’s request.
Additional Grants for Relief
– Will the Prime Minister inform me whether there is any likelihood of the Commonwealth Government making further grants to the States before Christmas for the relief of unemployment ?
– It is not the present intention of the Government to make additional grants of this nature. The subject of unemployment has been considered by various conferences of Premiers, and programmes have been arranged by the State Governments to provide work. Practically all the public works which could be put in hand are State undertakings, and every effort has been made to provide finance to enable such works to be carried out. The Government is at present doing its utmost to provide all the money needed in this way for the remainder of the financial year.
– I have received from the honorable member for West Sydney (Mr. Beasley) an intimation that he intends to move the adjournment of the House this afternoon for the purpose of discussing a definite matter of urgent public importance, namely, “ The destruction of the principle of arbitration by the setting aside of the federal basic wage.”
Five honorable members having risen in their places,
– The subject which I am about to bring under the notice of honorable members has become one of urgency in consequence of the decision of the Commonwealth Arbitration Court last Friday afternoon to set aside the federal basic wage award in order to meet the wishes of the New South Wales Government. So that honorable members may realize the significance of theimportant change ofpolicy which the setting aside of this award indicates, it is desirable that I should refer to the early history of the Commonwealth Arbitration Court, particularly in relation to the adoption of a basic wage. This is also necessary to enable honorable members to appreciate the great importance to the workers of this country of the presentalteration in policy. In 1907, Mr. Justice Higgins, as President of the Commonwealth Arbitration Court, decided that it was necessary to adopt a basis ou which the living wage could be fixed, and he determined the question in relation to certain costs incurred in the living of a man, his wife and three children. Prior to this inquiry, much difficulty had occurred in determining the basis upon which wages should be fixed. Mr. Justice Higgins considered that it was desirable that some basis should be determined, and he made a general survey of the whole position. After he had determined bis formula he delivered hi9 decision, which is now known as the Harvester judgment. It has since been used by the court as the starting point in considering all the claims that were made by employers and employees. Margins for skill and other circumstances in industry hare been assessed, and additional pay to cover them has been added to the Harvester award. The basis decided upon by Mr. Justice Higgins was adhered to by the court until Mr. Justice Powers made an alteration. Mr. Justice Powers was of the opinion that the Harvester judgment did not altogether meet the needs of the case. He, like the workers, believed that under the principles laid down in the Harvester judgment, wages were really chasing the cost of living all the time, with the result that by the time awards were made any increases granted should have been made twelve months earlier. This was always to the disadvantage qf the workers, and Mr. Justice Powers considering that something should be done to make up the leeway,’ added what became well known in arbitration circles as the “ Powers three shillings.” The principles laid down by Mr. Justice Powers remained effective until quite recently; but just prior to 1920 a good deal of industrial agitation arose for a review of the basis on which the cost of living was fixed. In 1920, the Hughes Government decided to set up a royal commission, under Mr. Justice Piddington, to make a comprehensive survey of
I he whole position from an Australian stand-point. That commission made an exhaustive inquiry into the subject. It was generally felt all along that the investigation made by Mr. J Justice
Higgins had been somewhat restricted, and that he had not taken into consideration all the factors which should have been brought under review in determining the basic wage. A great deal of evidence was obtained from many sources by the Piddington Commission, which finallyfixed the basic wage for New South Wales at £5 16s. per week. That decision was never given effect, notwithstanding that it was universally admitted that the wages fixed pursuant to the principles laid down in the Harvester judgment, plus the “Powers three shillings,” were very much lower than they should have been. I consider that Mr. Justice Piddington’s decision was prevented from becoming operative because of political reasons. Since 1920, many battles have raged in the Arbitration Court between employers and employees, consequent upon the attempts of the employers to reduce wages, but in. all those struggles the basic wage has been regarded as sacrosanct. No one ever suggested that there should be any interference with it. All the arguments centred upon margins for skill, working conditions, and so on. Although thi« attitude was adhered to, irrespective of the views held by opposing sides in different claims before the court, the BrucePage Government, in 1929, brought the subject under review from a new angle. Due to political pressure, that Government decided to make the abolition of the Commonwealth Arbitration Court, and, consequently, the federal basic wage, a political issue. The subject was introduced into this House in circumstances which made the life of the Government of the day dependent upon the decision. As is well known, the Government was defeated in the House, and subsequently, went to the electors on a policy which involved the abolition of the Commonwealth Arbitration Court, and everything connected with it. At that time, the federal basic wage was higher than the average basic wage fixed by the State tribunals, and I feel that it was for this reason that the political parties, led by Mr. Bruce, desired to abolish the Commonwealth Arbitration Court, and so make the lower basic.wage in the various States effective. The election was fought on that issue,” and the people of this country refused, by an overwhelming majority, to allow the Commonwealth Arbitration Court to be abolished. A :new government came into office, and it appeared that this subject had been finally determined. But in 1931, after the change of government, application was made to the Commonwealth Arbitration Court for a 10 per cent, reduction in the value of real wages. At the time a good deal of publicity “was given to the request. I well remember the arguments of the employers. Certain prominent economists associated with the preparation of what is known as the Premiers plan suggested that, if real wages were reduced by 10 per cent., additional employment would be provided. A good deal of publicity was given to that suggestion, and’ many who had not seriously considered the problem of unemployment may have thought that their arguments were sound. Time, however, has proved that they were entirely unsound. The Scullin Government was then in power, and I remember the leader of that Government making a public statement to the effect that if employers considered that a. reduction of 10 per cent. in real wages would provide more employment, the responsibility rested entirely with the employers to prove their case in a practical way. I do not think it necessary to bring forward evidence to show that instead of employment having increased since 1931, there has been an increase in unemployment. Less than two months ago, Mr. Justice Beeby, when hearing a case submitted to the court by the transport workers, admitted that the reduction made in 1931 had not provided more employment. The fallacy of the contention has been definitely proved, and we now have to face the position which exists to-day. “When the 10 per cent, reduction was made, the Railways Commissioners throughout Australia’ applied to the Federal Arbitration Court for the suspension of the award governing railway workers. Honorable members will recall that then, and practically ever since, a definite move has been made by employers to obtain the setting aside of Arbitration Court awards. By the suspension of these awards, the legal barriers set up by Parliament for the protection of the workers are being removed, and the efforts of trade union organizations on behalf of their members are being frustrated. The Railways Commissioners endeavoured to force the position by asking for a suspension of awards. But there was then no attempt to have the principle of the basic wage disregarded. The accepted principle of a minimum standard was acknowledged by the employers at that period. Mr. Cleary, the Chief Railway Commissioner of New South Wales, joined with the other applicant commissioners, but when a change of government occurred, he was instructed by the then Premier, Mr. Lang, that no adult employee in the railway service of New South Wales was to be paid a rate lower than the basic wage of £4 2s. 6d. That instruction had, of course, to be acted on, and was obeyed while the Lang Government remained in power. When a new government came into office, however, one of the first acts of the present Premier, Mr. Stevens, was to withdraw the instruction given, and as a result there was an immediate reduction of wages by 10 per cent, throughout the railway and tramway services. Immediate effect was given to the award providing for a reduction. Yet even that did not satisfy the Government, now in power in New South Wales. That Government was not prepared to leave the matter where it stood, nor would it honour the promises its supporters made during the election campaign. On the 25th May last, Mr. Stevens said -
One half of the workers are governed by federal awards, and a State government has no power to reduce wages fixed by the federal court. We could not interfere with the basic wage in federal awards - even if wo wanted to.
At that time, those of us who were fighting against the present Premier of New South Wales, declared from every public platform in the State, that a change of government would mean a further reduction in wages, and that other things, harmful to the workers would be done. Those who review the position to-day will realize that everything we said then, prior to the last election, has been borne out. Following upon the change of government, Mr. Stevens set up a new Industrial Commission for the purpose of determining a new basic wage for New South Wales. After an inquiry, that commission decided on a basic wage of £3 10s. a week, making a reduction of 12s. 6d. a week in the basic rate formerly in force. The effect of that heavy reduction is now being felt in thousands of homes in New South Wales. The reduction of the basic wage in New South Wales was not sufficient for the new government so far as it applied to the railway and tramway services. Those working under federal awards were receiving the federal basic wage of £3 13s. a week and 3s. a week more than those working under State awards. Although the reduction effected over 16,000 employees in the railway and tramway services of that State the Government, apparently, was still unsatisfied. Immediately the State basic wage was reduced, application was made to the federal court to set aside the federal basic wage, which had its origin in the Harvester judgment, delivered in 1907, and although varied from time to time, has been accepted by the people of this country. The principle of a basic wage was always accepted right up to the 1929 federal election, and then the people definitely refused to allow the BrucePage Government to abolish arbitration, which would have meant the abolition of a basic rate. As the people refused to allow the Government to destroy that sacred principle of industrial payment in 1929, they are not, I am sure, likely to consent to the present setting aside of the federal basic wage. The position at present is, that there is now really no basic rate governing railway and tramway employees in New South Wales, who could be paid as little as £2 lis. 6d. a week. No one can deny that it may not be many mouths before an attempt will be made to reduce the present rate still further. The State Government may say that at present it is willing to pay £3 10s. a week, but if all the legal and other barriers come to be removed, there will be nothing to compel it to pay even that rate. What is the word of governments worth when on the plea that there is a decline in national income, the courts are willing to do almost anything the governments ask of them? In such circumstances, governments are prepared to destroy all awards, and to disregard all promises. No worker can accept the word of any government in matters of this kind. The repudiation of a. sacred principle when it applies to workers seems to be regarded as of no importance.. The court has removed the barriers that protect workers, and left them in the open, economic ring which the people declared, in 1929, they would not tolerate. Protection is afforded, by legal enactments and by other means, to every other activity in our , commercial life, but it appears to be the desire and the intention to remove whatever legal enactments and other barriers stand between the workers and those who would exploit them, so that they may be entirely at the mercy of their employers. It grieves me to admit that, on account of their circumstances individually and as organizations, they can do very little to defend their interests. Within the last two years this has resolved itself into a political question. If the Government believes that politics should be the determining factor, let that be understood. Times will change, as they have changed before. What this Government does to-day another government may do in the opposite direction to-morrow.
– The honorable member’s time has expired.
– It is very difficult indeed to believe that the honorable member for West Sydney (Mr. Beasley) has only this afternoon become aware of the fact that last year the Commonwealth Arbitration Court reduced the basic wage by 10 per cent. It is also hard to understand why this afternoon it should suddenly become a* matter of urgent public importance ; when, as all honorable members know, business of urgent public importance awaits the immediate attention of this House.
The honorable member has rather futilely attempted to link his speech with a particular decision of the Arbitration Court that was given on Friday last. That decison simply applied, in the case of certain transport workers, a principle that already had been applied in many other cases; and it was made subject to the condition that there should be no reduction that would bring the wage below the recently determined New South Wales basic rate of £3 10s. a week. Accordingly the basic wage, the principle of which the honorable member professed such undeviating adherence, as fixed by the State tribunal, has been adopted as the limit of the reduction by the federal court, although it was not bound so to act.
In the particular industry concerned, the railways and tramways services, the 10 per cent. reduction already had been applied to 17,985 employees of the Transport Board. The effectof last Friday’s decision was to extend that reduction to a further 16,025 employees, and thus to place them in that respect in the position occupied by their fellows.
The honorable member has traversed the history of wage fixation back to 1907, and has referred to the report of the commission on the basic wage that a wage of about £5 16s. a week - the amount varied in different States - would have to be provided if the recipient was to enjoy the standard of living which the commission itself determined was necessary for his comfort. The honorable member must know that the Commonwealth Parliament has no legal power to give effect to any such decision. Surely he must also remember that the chairman of that commission, Mr. Piddington, himself reported that there was not, in this country, the amount of money that would be needed to pay such a wage. Therefore, both legally and economically, the proposal was absolutely impossible. Accordingly, at the present time, not one word that the honorable member has spoken touches any question with which this Parliament has any power to deal.
It will not have escaped the notice of honorable members that a considerable portion of the honorable member’s speech was directed against statements that were made, or that were alleged to have been made, by the present Premier of New South Wales. It is quite plain that this Parliament has no power to deal with such matters. Up to the present, this Parliament has accepted the principle that these matters should be determined by a non-political, independent, and impartialtribunal. That is the procedure that is being followed. This Parliament has no legal power to fix the basic wage. The speech of the honorable member, therefore, amounts to an attack on the principle and practice of arbitration, for which the proper time has not been chosen. As very important work awaits our attention, I move -
That the question be now put.
Question put. The House divided. (Mr. Speaker - Hon. G. H. Mackay.)
Majority . . 29
Question so resolved in the affirmative.
Question - That the House do now adjourn- put. The House divided. (Mr. Speaker - Hon. G. H. Mackay.)
Majority . . . . 31
Question so resolved in the negative.
The following papers were presented : -
War Service Homes Act - Report of the War Service Homes Commission for year ended 30th June, 1932, together with Statements and Balance-sheet.
Ordered to he printed.
Audit Act - Regulations amended - Statutory Rules 1932, No. 93.
Census and Statistics Act - Regulations amended- Statutory Rules 1932. No. 94.
Commonwealth Bank Act - Balance-sheets of Common wealth Bank and Commonwealth Savings Bank and Statement of Liabilities and Assets of the Note Issue Department, at 30th June, 1932; together with AuditorGeneral’s Reports thereon.
Lands Acquisition Act - Land acquired at Hall, Federal Capital Territory- For Federal Capital purposes.
Debate resumed f rom the 16th September (vide page 605), on motion by Mr. Lyons -
That the bill be now read a second time.
.- When introducing this measure last Friday, the Prime Minister (Mr. Lyons) said, “ It is regretted that the reductions arenecessary “. At the outset I challenge the accuracy of the statement that reductions are necessary. I have too vivid a recollection of the financial difficulties that beset my own Government last year to approach the consideration of this bill in an irresponsible way. Whether in office or in opposition, I would apply this test to a measure like this: Are the proposals necessary? And are they equitable? In my opinion, an examination of the facts, particularly of the outstanding facts, will show that the Government’s proposals are entirely unnecessary, and grossly inequitable. If we review our recent financial history we shall see the position in proper perspective.
When the Financial Emergency Act was passed last year, the Labour Government, which I led; was facing a perilous situation. The national income had fallen by £200,000,000, and despite the earlier administrative economies, the expenditure was increasing, mainly because of the high rate of exchange, the increasing cost of pensions, and the increase of unemployment. The rectification of the adverse trade balance was the important factor affecting the budgetary position. The loss of customs revenue experienced over the two years when the trade balance was being rectified by my Government amounted to £23,000,000. That was an enormous amount of revenue to lose. In addition, other revenues suffered severely. The Commonwealth deficit for the year ended the 30th June, 1931, was £10,750,000, and the estimated deficit for 1931-32 amounted to the enormous sum of £20,000,000. There would have been a deficit of over £30,000,000 for two years, if steps had not been taken to prevent the drift. On top of that, the banks announcedthat no further advances would be made to the Commonwealth or the State Governments unless deficits were substantially reduced. The alternative to the reduction of the deficits and the stopping of credits, was the rationing of the revenue, which would have meant that in the first month of the financial year the Commonwealth could have paid only 12s. in the £1. In addition, there would have
Deen no loan money for the works then in progress, and that would have meant the dismissal of 18,000 men. That was the problem which confronted Australia a year ago. It was a desperate situation, but I ask honorable members to contrast it with the present financial position of Australia, and, particularly, with the condition of the finances of the Commonwealth. There has been a great change.
These considerations lead me to ask whether the action proposed by the Government under this bill is justified in our present circumstances. This Government has inherited a surplus, and it has a deficiency to meet this year of only £1,460,000, as against the deficiency of £20,000,000 that had to be faced last /ear. That gap of £1,460,000 has been deliberately created by the Government itself, in reducing customs duties and other taxes. According to its own estimate, it has forfeited £1,200,000 in taxation, and it now proposes to fill that gap by imposing reductions on the poorer sections of the community. In order to consider the position in true perspective, one must realize what the £20,000,000 deficit a year ago really meant. To appreciate fully the difficulty of the task that confronted the Parliament then, one has only to remember that the adjustable government expenditure was given as £40,000,000, apart from interest. Interest has not been, and never was, included in what is called adjustable government expenditure, because it has been regarded as a contractual obligation, and when my Government had a deficit of £10,750,000, and was facing the prospect of another deficit of £20,000,000 for the following year, it was urged right and left to make cuts in wages and old-age pensions as the only adjustable expenditure that could be touched. Pensions and maternity allowances cost £20,000,000, and salaries and wages, £12,500,000, making £32,500,000 out of the £40,000,000 regarded as adjustable expenditure. But my Government insisted that before reducing pensions and wages, the bondholders should he called upon to make a sacrifice, whether our obligations to them were contractual or not, and eventually that’ course was adopted.
The Labour Government, when facing the £20,000,000 deficit, made its adjust ments as fairly as was possible in the difficult circumstances. It increased taxation by £7,000,000 and reduced expenditure by £8,000,000. The principal reductions were: - Interest, 22^ per cent.; bounties and administration, 20 per cent, on the average; salaries and wages, 20 per cent. ; and pensions, 13 per cent. Subsequently the payments of interest and principal on the overseas war debt were suspended, and the year ended with a surplus.
Facing a deficit of £20,000,000 the Labour Government asked the invalid and old-age pensioners of Australia to contribute 7i per cent, of that £20,000,000. But the present Government asks them to provide 75 per cent, of a deficit of £1,460,000. Is that equitable? Can we accept the plea of necessity, put forward by the Prime Minister when introducing the bill, particularly when we know that this Government is deliberately sacrificing revenue from customs duties and sales tax? That taxation is high, I do not deny; but on the other hand, wages and pensions are low. Under the Premiers plan, there was to be an allround sacrifice, and if there is to he any meddling or tinkering with that plan, we should begin by restoring to those worst’ off before we start cutting down any of the taxation imposed a year ago to balance the budget. Last Friday, the Prime Minister introduced two bills ; the first to reduce taxation, and the second to reduce pensions, wages, and the maternity allowance. The cruel injustice of this Government’s proposal is emphasized by an examination of the revenue figures for this financial year. There is every sign that there will be an increase in imports leading to an increase in customs revenue. Had the Government retained the old duties, not only should we be protecting Australian industries and maintaining in work people who are now being dismissed from their employment, but we should also collect revenue in excess of what the Government now estimates to receive from customs duties. It is obvious that the importation of goods is not necessarily limited by our London funds. In previous years, in spite of lack of London funds, we have had an excess of imports over exports. In fact, when those funds had been depleted by many millions, and trade moneys were piling up iii Australia to the menace of the credit of thi3 country, Australia was being flooded with imports. When the Labour Government took office, it took steps to stem that flood, but it will recur unless something very definite is done by the present Government to prevent it. In any case, it is clear, that receipts from customs revenue will rise. Already they have exceeded the estimate for the first two months of this year by £934,000. Other revenues are also buoyant. A Treasury statement shows that for the first two months of the current financial year, there is a surplus of £2,141,000. For a portion of that surplus, there is, I know, some special explanation, but not for all of it. We find that customs and excise revenue have substantially increased, and that other revenues are buoyant, and I notice in the press a forecast, apparently inspired, that in February next, there will be a reduction, of direct taxation. As a matter of fact, the Prime Minister has already indicated that one of the earliest steps this Government will take is to reduce taxation. I shall be very glad if we can reduce the special taxes imposed to balance the budget, but I shall sternly resist any such reduction until some step is taken to restore the cut in pensions, in the wages of the lower paid wage earners, and in the maternity allowance.
In committee we can examine in further detail the clauses of the bill affecting pensions, wages, salaries, maternity allowance and bounties; but there are one or two matters I propose to touch upon at this stage. In my judgment, the pensioners of Australia have made their sacrifice towards the rectification of the financial crisis. When it was first suggested that they should come into the plan, the rough drafts of which were prepared before the Premiers Conference met, the suggestion was an all-round cut of 20 per cent, in adjustable governmental expenditure, including a 20 per cent, reduction of interest, pensions, wages, and other services. My government refused to accept that as anything like an equitable proposal, and our determination was that the cut should be 22^ per cent, in respect of interest and approximately 13 per cent, in respect of pensions. That was a fair proportion, although it may be held that there are many thousands of bondholders whose interest return is not so much as the amount received by an old-age pensioner. I know that that is true, because I handled many thousands of such cases during the consolidation.
– Are they holding those bonds to-day?
– I think so. While ii is true that the value of their bonds may be much higher on the market, that is of no great advantage to the holders excepting for the greater security it gives, because if they disposed of their bonds they would have to invest their money in other securities not quite so gilt-edged. There are today tens of thousands of bondholders with incomes ranging from 10s. to £2 or £3 a week; but there are also scores of bondholders with very much higher incomes, and therefore, I do not, in a general way, nut the bondholder in the same category as the pensioner. The 22£ per cent, cut on interest for loans domiciled in Australia is a fair proportion compared with the 12£ per cent, or 13 per cent, cut in pensions, and it should not be disturbed by any action of this Government, unless it be in the direction of restoring to the invalid and old-age pensioners some measure of the reduction Imposed on them last year. As the head of the last Government, I said that we would make such - a restoration as early as possible and when asked whether I would apply it also to bondholders, I said, “ No “ ; because I felt that the rate of interest had been too high altogether and, as reduced, was only reasonable. I make that statement, today as I made it when I was Prime Minister, when we were beset with so many difficulties, and had so many problems to face. As I said at the outset of my remarks, now that I am in opposition, I am not prepared to face any problems in an irresponsible way.
The first proposal of the Government was that there should be a further allround reduction in pensions of 2s. 6d. a week, making their contribution towards the nation’s need 5s. a week, or 25 per cent, of the maximum pension previously paid. That outrageous proposition aroused indignation from one end of Australia to the other. Realizing that it could never carry such an iniquitous scheme through this House, the Government changed it. I ask honorable members carefully to examine the new proposal. “We are told that, under it, the Government will effect a greater saving than would have been possible previously. That, may or may not be. It is all conjecture at thi3 stage, and I should like to hear a responsible statement on the subject from the Government. As Treasurer, I took part in the administration of the pensions department, and wy duties as Prime Minister brought, me continually into contact with its officers. I formed the opinion that the administration of the Old-age and Invalid Pensions Act i3 efficient, and, at the same’ time, humane. Cases of fraud can be cited in connexion with any activity, and the administration has been disclosing fraudulent practices ever since pensions have been paid. Speaking from memory, I believe that last year some £50,000 was paid to persons not entitled to relief.
– Does the right honorable gentleman term that efficient administration ?
– The very fact that the fraud was discovered indicates the efficiency of the department. I am confident that, if the honorable member were administering the department, he could not make it 100 per cent, efficient in that respect. Certainly, the sum of £50,000 is riot a large percentage of the £11,000,000 paid yearly for’ invalid and old-age pensions. I believe that the act is rigorously administered, except, perhaps, in the case of invalid pensions. Every honorable member must have had experience of claims for invalid pensions which, if submitted to a searching test, would disclose that, according to the strict letter of the law, the claimants were not legally entitled to relief. On the other hand, it is evident that the pensions are well deserved. I cite the case of a claimant, totally incapacitated, for whom the doctors hold out hope of recovery in a year or so. Strictly according to the law, such a person is not entitled to a pension, for he must be permanently as well as totally incapacitated. Yet, in such circumstances, pensions were granted.
– That is not being done now.
– I believe that it is not being done in recent months. Several cases have been brought under my notice which suggest harsh treatment. The claims do not conform to the letter of the law; but they are made by those who are almost incapacitated, and unable to work. If it is the intention of the Government to tighten up the law, and declare that such people are able to do light work, at a time when hundreds of thousands of ablebodied individuals are seeking jobs, that is sheer cruelty, and a poor expedient, to save a comparatively small sum of money.
No honorable member on this side stands for the encouragement of fraud in connexion with old-age pensions or anything else. AVe agree that, when frauds are discovered, those responsible should be dealt with. We do not object to the law being adjusted to prevent those not entitled to do so from receiving relief; bur, I ask the Government to be careful in the degree of harshness it proposes to inflict on genuine cases. If the officers of the department are so instructed, they will carry out the law strictly according to the act, and see that the Government gets its pound of flesh.
– There is no suggestion that that shall be done.
– I am forced to conclude that if that is not done, there will not be the saving anticipated by the Government. Time will tell, and honorable members will experience some of the repercussions of any contemplated harsh administration.
If the proposal to reduce the pensions of those who have no other income by 2s. 6d. a week is replaced by another that will result in the cancellation of a number of pensions, it will cause even greater hardship than would have been inflicted by the original scheme. I have in mind the provision that will make relatives legally responsible for the maintenance of their aged parents. It revives in my memory the cruel old conditions of the
Victorian act. I have not looked up that law, but the new scheme appears to me to be similar in effect, and just as pernicious in principle. I recollect that under the Victorian law, sons and daughters were haled before a court to show cause why they should not support their parents. In many cases the court held that they were not liable to do so, but the .examination revealed most intimate and embarrassing details concerning their financial affairs. It is true that, in this measure, provision is made for the court to hear cases in private; nevertheless the circumstances of the pensioner soon become known beyond the court. Who does not know of cases of aged pensioners whose children supply them with comforts supplementary to the necessaries of life provided by the pension. Under this bill, those children, living possibly on a standard barely above the basic wage, are liable to be called upon to provide fully for their parents. * The effect will be to deprive the old people of comforts that they now enjoy. Again, take the case of aged people whose children fail to recognize their moral obligation to care for their parents. I am convinced that these represent but a small percentage of the community. Does any honorable member believe that a high-spirited old man or woman so treated would apply for a pension and expose to the world the shameful fact that his or her children were neglectful? If I know anything about the matter, they would -rather suffer in silence, and allow their pensions to be cancelled. I have received sheaves of letters from old folk who refrained from applying for a pension- until they were 80 or thereabouts, which indicates that there are not the number of mendicants amongst our aged that some would have us believe.
To see that in the past sons, daughters, and other relatives have not neglected their obligations to the aged and indigent, we have only to consider the fact that since the depression there has been a tremendous increase in the applications for old-age pensions. When a man is thrown out of work, or receives only intermittent, employment, he is consequently unable to support his parents or other relatives, and application must be made for a pension for them. The fact that in many instances no application for a pension, particularly an old-age pension, was made previously is proof that a number of persons of an age ‘entitling them to a pension were not receiving one, because of the support given to them by their families. But when the depression and unemployment caine, and one out of every three persons in the community was out of work, it was a different story. Old-age pensions increased alarmingly and extraordinarily. I do not believe that that increase will be maintained if we turn the corner, as we are being told that we are doing by this Government almost every week. This proposed reduction in pensions is a dismal forecast for the future.
The fundamental objection to the proposal to make the relatives responsible for persons who would otherwise be eligible for a full pension, is that it disregards the principle, which we have always recognized, if not in practice at least in spirit, that the old-age pension is a right earned by the old people who have worked for and served this country. It may be asked - if the pension is a right, why should it not be paid to all persons of eligible age, irrespective of their income? The answer is that Commonwealth finances could not provide for such an expenditure; but the right is there, and we should not lose sight of it. People who contribute to friendly societies have tha right to receive payment for sickness; but they cannot all claim that right, because certain conditions have to be fulfilled before payment can be made. They have all contributed to the fund, and they are fortunate, indeed, who do not have to draw from it. Again, it is said that if we change the system of pensions by making it a contributory system, everybody will be entitled to draw an old-age pension; but I submit that the present scheme is more or less a contributory one. Everybody contributes to the Consolidated Revenue. It is suggested that some people are claiming old-age pensions to-day because they have been thriftless; but that would apply to a very small section. In any case the more they have spent the more they have contributed to the revenue of the country.
– Would the Leader of the Opposition (Mr. Scullin) advise us to put that principle into practice 1
– As a matter of fact, the Prime Minister has already broadcast a statement advising the people to spend money in order to restore prosperity to* this country. That is not the worst advice that we can give in these times of dismal depression. There is no doubt that under the present method of collecting revenue - the imposition of customs and excise and sales tax - the freest spenders are the biggest contributors.
– Does the right honorable member really contend that the more we spend the better it will be for the community generally ?
– No; but they do contribute more in taxes. If it were not for the spendthrifts, the honorable member’s profession would not be so lucrative. The old-age pension has been granted on the principle that it is a reward for service. The applicant has to prove his need, but that condition, was imposed only because of the lack of means to give a pension to everybody. The . fact that claimants have to prove that they have resided in and worked for this country for twenty years before they are entitled to an old-age pension is proof that the pension is a reward for service rendered to the community. We interfere at once “with that principle when we make the relatives, other than, say, the husband or wife, responsible for the payment of the pension. I am putting that contention forward, not because I desire to excuse any member of a family who would allow his aged parents to be insufficiently provided for when he can well afford to support them, but because I think that our old people who have borne the heat and burden of the day ought not to be asked to suffer the indignity of seeing their children harassed merely hecause they are claiming what is their right in the circumstances in which they find themselves. 1 come now to the proposed reduction of the salaries of public servants, which I shall deal with more fully at the committee stage. The Prime Minister has endeavoured to show that this is the ordinary application of the cost of living reduction which automatically takes place under an award. That is not a true representation of the position. Had there been no previous reductions in Public Service salaries, this reduction of £S would have applied all round to-day ; but reductions have already been made, and the public servants who have been affected should not now be asked to bear this additional reduction in cost of living. Last year, when the Premiers plan was adopted by my Government, we laid down and observed two principles. One wai that there should be no reduction in the- real basic wage of any government employee. The other was that where percentage reductions in salaries above the basic wage were made, future reductions in cost of living should not bt applied until the percentage reductions had been absorbed. We adhered to both of those principles, and we can see no reason for departing from them. To-day. a question was asked by the honorable member for Hindmarsh (Mr. Makin) respecting the South Australian railways. The answer given by the Government was correct, that the Federal Labour Government did lay down the principle that government employees who had suffered the 10 per cent, reduction imposed by the Commonwealth Arbitration Court - which was referred to to-day On the motion for the adjournment of the House - should not have applied to them any future cost of living reductions until the original reduction of 10 per cent, had been absorbed. That principle was adhered to while my Government was in office’, but it is now proposed to depart from it. I submit that it should be maintained. The cost of living has fallen, although I question whether, to the wage-earner, it has fallen to the extent indicated by the index figures. That is a subject which I cannot discuss at the moment. Since the cost of living has fallen for everybody, why should the public servants suffer under this proposal, and the bondholders and taxpayers be left untouched ? Why should the taxpayer obtain relief at the expense of the public servant, the pensioner, and the claimant for maternity allowance? Did the supporters of the Government object to the ratio in which the burden was distributed last year, when we were endeavouring to balance the budget? Did one of them object to pensions being decreased by 13 per cent., while the salaries of public servants were reduced by 20 per cent, and interest by 22*, per cent.? I heard no protest in this House nor during the elections. At no time to my knowledge did any honorable member who sits behind the Government’ to-day insist that the reduction in pensions should equal or be in excess of the redaction in interest payments to the bondholder. “Why meddle with that ratio now? The Government is attacking wages, pensions, and the maternity allowance, and at the same time is giving relief to taxpayers and leaving interest untouched. That is not just. The fact that several acts of Parliament were amended by the Financial Emergency Act indicated that that measure was temporary; but this Government, in applying socalled automatic cuts in respect of the cost of living to the salaries of public servants, in addition to the percentage cuts already made, is apparently regarding the emergency legislation as permanent. Against that I strongly protest. When the Federal Arbitration Court reduced wages by 10 per cent, in January and February, 1931, six months before tho Premiers plan was adopted, my Government intervened in the court. We did not believe in reducing the real basic wage, and I have said repeatedly, first as Prime Minister and later as Leader of the Opposition, when the 10 per cent, reduction was applied despite the Government’s intervention and the gallant fight by the unions, that if the real basic wage was to be reduced below the Harvester standard in order to reduce the cost of production, it was not fair to put an additional burden on the workers by depriving them of any advantage arising from a reduction in the cost of living. One of the promises held out to the workers was that the reduction in the cost of living would compensate for the reduction of wages. Now they are being deprived of that advantage, and are suffering one cut upon another. In consequence, we are descending into a depression from which it will be difficult to rise. Had the percentage cut been allowed to be absorbed in the cost of living, the workers would have enjoyed some measure of restoration. Had the policy which, we laid down in that regard been adhered to public servants would be receiving some measure of restoration. Instead, the Government is continuing the process of pulling down. The people who made sacrifices last year were assured that the desire of Parliament was to spread the burden as equitably as possible, and to protect them from even greater losses and reduction. I made that declaration genuinely on behalf of my Government, and it was endorsed by every honorable member then in opposition. During the last election campaign not the slightest hint was given by any member or supporter of the present Government that a basic principle of the plan - the ratio of sacrifice - would be violated.
– We helped the right honorable member’s Government to put the plan into operation.
– That is so, and the honorable member and his colleagues accepted the ratio of reductions that the plan proposed. He never protested against the old-age pension being reduced by 13 per cent, and the bondholder’s interest by 22J per cent., nor did the honorable member on the hustings warn the people that those proportions would be changed. Now the Government proposes, apparently with the support of the honorable member, that many pensioners shall suffer a reduction of 25 per cent, as against the cut of other incomes by 20 per cent, and interest by 22*, per cent. The honorable member echoed the statement of my Government that the burden of sacrifice was to be spread ; that all sections of the community were to come to the country’s aid during the great national crisis. Now when the crisis is past-
– The immediate budgetary crisis is over. I refer to the deficit of £20,000,000 that faced my Government, the stoppage of bank credits to governments, and the possibility of having to ration revenue, and to sack 18,000 men. The present Government is not confronted with a crisis of that nature; indeed, if we accept the Prime Minister’s assurance, the corner of the depression has been turned. I personally do not believe that the country has yet been lifted out of the depression. The budget proposals of this Government contain no practical proposal for dealing with the paramount problem of unemployment. The depression is not over, but this Government is not confronted with the possibility of national default; the country is not on the edge of a precipice as it was two years ago. This year the Government faces a prospective deficit of £1,460,000, which is largely the result of a reduction of taxation, whereas my Government had to face a deficit of £20,000,000. We avoided the most imminent dangers by compelling all sections of the people to make sacrifices; we did things that hurt and were unpopular, but we tried to distribute the burden in equitable proportions. The present Government is now altering the basic principle upon which those sacrifices were made, compelling the poor’ to contribute double the amount required by the previous Government, whilst taxpayers are to be relieved and bondholders are to be left undisturbed, although their bonds have been made more valuable by the improvement in the country’s financial position.
– Did not the right honorable member’s Government use the money borrowed from bondholders to pay the pensioners?
– That is a misrepresentation. The Commonwealth had borrowed from bondholders at a rate of interest it could no longer -afford; it was paying pensions and wages at rates which the Government could not pay during the crisis. All these obligations were reduced, and we asked the bondholders, because of their gilt-edged security, to bear a reduction of 22£ per cent, as compared with the 13 per cent, reduction suffered by pensioners. Now the honorable member for Fawkner (Mr. Maxwell) is helping to compel the pensioner to accept a reduction of 25 per cent, whilst the bondholder’s position is unchanged. Had members of the present ministerial party given any hint of this policy at the last elections, the people would have given a different verdict. The Government is guilty of a most flagrant betrayal.
Another declaration which I made on behalf of my Government was never challenged, so far as I know. “When introducing the Financial Emergency
Bill, and on several other occasions both inside and outside Parliament, I declared that, when the finances permitted, what was being taken under the financial emergency legislation from those on the bottom rungs of the social ladder would be restored. I referred particularly to pensions, maternity allowance, and wages. My Government provided, also, that the automatic reductions in accordance with the fall in the cost of living should not be applied to government employees who had suffered a percentage cut. In that way we were making a measure of restoration to the public servants; but the present Government, having inherited a surplus from its predecessor, and being in such improved circumstances that the problem of balancing the budget is simple compared with that which my Government had to solve, is reversing the earlier policy, and making the burden of sacrifice heaviest on those least able to bear it. Only the fear of an immediate crisis, the imperative need to economize in order to avoid national default and the rationing of revenues, caused my Government to reduce wages, pensions and maternity allowances; but the magnitude of the danger confronting us necessitated all-round sacrifices. These, however, should be regarded as temporary expedients, and what has been taken away should be restored as so’on as the state of the finances permits. Even though the moratorium in respect of the overseas war debt be not continued, the deficiency at the end of this financial year, if we may judge by the increasing revenues, will not be unmanageable, and there is certainly no justification for the atrocious measures that the Government is adopting. The Ministry lacks vision. It is arousing resentment in the hearts of the people by the class bias which is so manifest in this legislation. The people have suffered unemployment with wonderful patience; and others have submitted to the sacrifices imposed upon them because they believed that the burden was being equitably distributed; but I warn the Government that this class-biased legislation will provoke all-round resentment, and will not be accepted in the pacific manner that Ministers seem to expect. The financial position now is not nearly so grave as it was last year, and the reduction of the old-age pension from £1 to 17s. 6d. in the emergent circumstances then existing does not warrant a further reduction of 2s. 6d. now. This is an unjust proposal. The Government is transferring the national burden to the weakest shoulders, and applying offensive conditions to the aged poor. The whole brunt of the Government’s attack is being directed against the poorer sections of the community, who are the least able to resist. As a protest against this policy, I move-
That all the words after “ That “ he omitted with a view to insert in lieu thereof the following words: - “the bill be withdrawn and redrafted for the purpose of re-adjusting the Government’s financial proposals in order to rectify the gross injustice which the bill imposes on the poorer section of the community “.
.- The bill proposes to amend the Financial Emergency Act, which embodied the plan adopted last year to help Australia out of difficulties unprecedented in its history, and this second-reading debate should be devoted to an examination of the results of the plan, to see whether it is achieving what was hoped of it to effect the financial and economic salvation of the country. The reductions which the bill proposes may well be dealt with in committee. We must give consideration to the 400,000 or 500,000 women and men whose incomes have been reduced by 100 per cent., and who, at the present time, have neither work nor wages. Let us examine the general principles upon which we have operated so far, with a view to discovering amendments which would improve the plan and help to restore work to those who are without it. If we compare the unemployment figures of to-day with those of a year ago, when the original measure was brought down, we shall find that there has been an increase from 28 per cent, to 32 per cent., so it, is obvious that something more needs to be done. I suggest that we should especially direct our attention to this phase of our problem, and I hope, to outline before I resume my seat, a scheme which will, at all events, give some ray of hope to those concerned with the balancing of Commonwealth, State,- or individual budgets. What has happened in Australia is really the counterpart of what has happened in practically every other country, and an examination of the causes will show that action taken by government’s has tended to accentuate the difficulties. The right honorable the Leader of the Opposition (Mr. Scullin) suggested just now that we in Australia had emerged from our crisis, and that the situation to-day could not be in any way compared with the crisis of last year. “ Mr. Scullin. - I was referring to the budgetary position.
– The budgetary position is. by no means satisfactory. The accumulated deficit of Australian governments for the year 1931-32 is estimated to be £17,216,000. and actually the Commonwealth Government anticipates that its revenue this year will be £1,300,000 less than its estimated expenditure, and this, as I shall show later, despite the fact that certain payments which ought to be provided for are being deferred. In view of the fact that our short-term credits now total £82,700,000, it is idle to suggest that we have overcome the major portion of our troubles, and that we can relax our efforts. To suggest that as the position is really to mislead the people at large. It is generally admitted that efforts made by governments in different countries to overcome the grave financial and economic difficulties confronting them, have actually accentuated the crisis rather than improved it. This view is expressed in an article in the .London Times of the 7th July, 1931, and also in resolutions of a conference’ of economists at Cambridge, on the 16th July of this year, attended by representatives from Austria, Belgium, Germany, Holland, and other countries. I propose to indicate the lines along which, in my opinion, we should proceed if we desire to see a lessening of unemployment in this country-
– I hope that the right honorable gentleman does not contemplate the introduction of matter which is irrelevant to the subject-matter of the bill. The budget, debate will afford ample opportunity to discuss . unemployment and cognate subjects. This bill deals with the reduction of the maternity allowance, invalid and old-age pensions, the allowances, paid to Ministers and members, the salaries of public servants, payments to asylums, an amendment of the Wine Export Bounty Act, and the suspension of the Gold Bounty Act. References necessary .to elucidate points in debate will be in order, but any attempt to indulge in a general financial debate would be outside the scope of the bill.
– With all due deference to you, Mr. Speaker, I should like your ruling on this point : The matter about which I am about to speak covers the whole situation, and it seems to me that if I am prevented from dealing with the plan as a whole, there will be no further opportunity of discussing it. The Leader of the Opposition dealt with the budgetary position, not in detail, it is true, but incidentally. If I am permitted the same liberty I hope to be able to show that it will be possible to raise the national income so that further cuts in expenditure will not be necessary.
– If the right honorable gentleman contents himself with brief references in the elucidation of his points, he will be in order; but I feel it my duty to warn honorable members that a general debate on subjects other than those dealt with in the bill would be outside the scope of the measure.
– The Times weekly edition of the 7th July, 1931, states -
So far every country has sought to save itself from the consequences of the breakdown of international trade by measures which, though they may have been partially successful so far as its own internal position is concerned, have only made the general “position worse. It is scarcely an exaggeration to say that up to the present, with the single but very encouraging exception of the agreement between Holland, Belgium, and Luxemburg for mutual progressive tariff reductions, every step taken by every country to improve its own economic position has increased the difficulties of every other, with inevitable boomerang effects.
The economists who attended the conference at Cambridge expressed this view -
Severity of present economic crisis has been very greatly increased by the numerous and frequently altered measures which have been taken to restrict the freedom of transactions in commerce and finance. It is the unanimous opinion of this conference that these defensive measures taken by the individual countries, are mutually destructive and are largely responsible for the persistent fall in prices on the world market which has taken place over the past twelve months.
These, I suggest, are extremely apposite comments on the position in Australia, which, as we know, is paralleled in other parts of the world. In any discussion of this important subject, we must take these matters into consideration, because whether or not there shall be further cuts in invalid and old-age pensions will depend upon the amount of our national income, and whether or not- there is any necessity for further reductions in the salaries paid to members of the Public Service will depend on the methods adopted to re-organize the Service generally
The remedy which I suggest does not emanate from the Country party, but from the committee of experts appointed by this Government, which, in a report to the April conference of Commonwealth and State Ministers, made certain definite recommendations for the improvement of our present position. I hope later to suggest in some detail the machinery to carry out the plan recommended by the economists. For this proposal we have precedent in the action taken recently by the British Government, also by the Ottawa Currency Committee, by the statement of the British Chancellor of the Exchequer, by the comments of Mr. Keynes, the eminent economist, in a recent examination of the Australian position, and by the International Gold Committee of the League of Nations.
All other countries are rapidly coming to the conclusion that the only real way to better the economic position of the world, and especially to establish equilibrium in governmental budgets, is to do something to raise the wholesale world prices of commodities generally. It is of no use to talk at large and in general terms. What is urgently needed is specific action to meet a definite situation. The Financial Emergency Act was a special measure designed to deal in a specific way with our economic and financial ills. We must likewise now consider definite proposals to increase the national income. Only by some such action can we hope to restore the purchasing power of ‘our primary industries, thus enabling them to purchase the products of secondary industries throughout Australia and in that way relieving unemployment in this country. An examination of the budget. figures shows the need for action along these lines. There has not been a general reduction of governmental expenditure at all comparable with the fall in the national income. In 1928-29, the total expenditure of all governments in Australia represented about 27 per cent, of the national income; to-day, despite the economies resulting from the adoption of the Premiers plan, it represents approximately 43 per cent, of the national income. In 1928-29, the last year in which I was Treasurer, the total Commonwealth expenditure amounted to £51,899,077. Honorable members are aware that the charge of extravagance has been levelled at my administration of the finances. I propose to show that the budget position, during my term of office, does not support that contention. Although, in the year following the defeat of the Bruce-Page Government, there was a diminution in the national income of £100,000,000, the expenditure was no less than £52,304,600, or £400,000 in excess of expenditure during my last year of office, and in the last year of the Scullin Administration, when the national income had declined by approximately £200,000,000, the expenditure was £52,249,000, or roughly £300,000 in excess of the expenditure in my last year as Treasurer. Governmental expenditure last year represented 10 per cent, of the total income as compared with 7£ per cent, in my last year of office, or an increase of 2-J per cent. If one adds to these figures the deferred expenditure of £11,000,000- £4,160,000 interest on the British war debt under the Hoover plan, £2,900,000 reduction in payments to sinking funds, and £4,000,000 reduction in payments to bondholders–
– I am sorry to intervene again, but if the right honorable member were permitted to continue along these lines the discussion on this bill would develop into a general budget debate.
– I regret that you take this view, Mr. Speaker, because in private conversation the right honorable the Prime Minister (Mr. Lyons) said that the main discussion on the Government’s financial proposals would take place on this particular bill. For this reason I ask for leniency because, in my opinion, the proposal I am submitting is closely related to the financial structure of the Commonwealth, and inseparable from the objects of the bill.
– If the original bill were under discussion it would be permissible for the right honorable member to proceed along these lines; but this hill is for the purpose of amending the Financial Emergency Act in certain particular directions. It would, therefore, be quite wrong, and would prolong the debate indefinitely, if I were to allow the right honorable member to continue in the present strain.
Dr. - EARLE PAGE.- I quoted those figures to show that no government economies have been effected of a magnitude comparable with the magnitude of the reduction in our national income. I also desired to point the direction in which we must go if we are to take effective steps to avoid, if not the present cuts in pensions, at least additional cuts in the future.
In my opinion it is necessary for us to re-organize our system of government throughout Australia, with the object of eliminating duplication in our departmental activities. If this were done, expenditure could be substantially reduced. The figures I just quoted place the position in regard tq government expenditure clearly before us. A doublebarrelled policy, designed to reduce expenditure by re-organizing our services - as we did, for example, when we amalgamated the Commonwealth and State taxation departments a few years ago, and thereby saved £250,000 per annum - and to increase income by lifting the price levels of farm products, is essential. A clear line of demarcation between Commonwealth and State activities is vital to our welfare. I do not believe that we can effect anything like the reduction of expenditure necessary to balance our budget by merely cutting pensions and wages.
It has been said that there has .been no external borrowing during the last three years. That may be so, but we have increased our unfunded debt and debts to the banks by £82,000,000. This is really borrowing. “We cannot indefinitely continue this policy of inflating our currency, for it leads to a reduction in the purchasing power of the people, including the pensioners.
I suggest that, in order to obviate this kind of thing, the Commonwealth Government and the people of Australia should take immediate steps to bring about, as nearly simultaneously as possible, the general re-organization of governmental activities, in order to avoid duplication, and the stimulation of the values of our production. It must be remembered that the value of our production determines the income of our people, the income of our people determines the amount of taxation that they can pay - whether it be direct or indirect - and this, in turn, determines the amount of revenue which the Government will have available for expenditure. The path which we should tread was marked out for us by the committee of experts, the report of which was quoted by the present Leader of the Opposition, when he introduced his budget last year, and referred to by him when the financial emergency legislation was introduced. The recommendations of that committee have been supplemented by the report submitted by the committee of economists this year. The economists made quite clear the necessity for an increase in the external price of the products of our primary producers by a correlated tariff and exchange policy. Prices in Australia must also be raised in order to increase the taxable capacity of the people. The people of Australia and of every other country must be got back to work, and some means must be found by which the price of farm produce can be brought into closer relation with the price of factory goods. Recently the Acting Commonwealth Statistician, Professor Giblin, pointed out that between June, 1928, and June, 1932, the price of rural goods had declined in Australia by 46.2 per cent., and wages by 14.4 per cent., while the price of industrial goods had increased by 10.7 per cent. That is an impossible position. The reduction in the price of farm produce and wages, concurrently with an increase in the price of industrial goods, has had the inevitable effect of throwing people out of work. Although the price of industrial goods has risen, more industrialists are out of work than when prices were lower, and more people have been forced to accept the dole. The expenditure of more money to provide for the dole has, in turn, made necessary increased taxation. One class of expenditure which has to be met is the interest charge on money raised for the relief of unemployment, and, I trust, that required for the provision of a sinking fund, for the £3,000,000 spent last year and the £7,000,000 estimated to be spent this year. The provision of money for these purposes means that less money is available for old-age pensions, civil servants, and others.
Another unfortunate effect of the reduction in the prices of our primary produce has been that the value of the property of working people and others has also declined. The fall has been so serious that many workers have no equity whatever in the home which they are purchasing. Many others are unable to meet ‘their instalments, and still others cannot pay their rent or meet commitments for replacements of one kind or another. Until something is done to remedy the cause of these troubles, there can be no general improvement in Australia’s position, nor can there be any hope of avoiding depreciation in the value of pensions and so on. It must be apparent, therefore, that the whole financial position comes under review in our discussion of this bill.
One of the main factors in bringing about the position which we are now facing was the tariff imposed by the Scullin Government. This was said to be a protective tariff of 100 per cent., but on top of it there is super imposed an exchange rate which has varied from the 6 per cent, of a couple of years ago to 30 per cent, at one stage, and 25 per cent, at present. We must all realize that a considerable quantity and variety of goods indispensable to ordinary people, old-age pensioners, civil servants, and even members of Parliament, must still be imported, and that the existing conditions make the cost .of these goods unnecessarily high.
Another contributing factor to the present unfortunate situation is, that for the last three years Australia has been off the gold standard. Our currency and exchange are, in fact, being managed. The pertinent question, therefore, arises, whether they are being managed with the object of stimulating the national income and revenue and helping the people to the greatest possible extent.
– How does the right honorable gentleman suggest that they should be managed?
– I shall deal with that point presently. It cannot be denied that the exchange has been and is being managed. At one stage during 1930, the rate varied from 6 per cent, to 8 per cent. Then the Bank of New South Wales jumped it to 30 per cent, inside of a month. That in itself was proof that the rate had hot been stable. Later, when Great Britain went off the gold standard, our position became definitely worse. We were 60 per cent, to the bad at one stage, taking gold as a basis. Even during such a period as that the price of industrial goods in Australia had risen, while the wholesale price levels had fallen by 13 per cent. If the exchange and currency must be managed, they should be managed in the best interests of the whole community, and not in the interests of certain sections. The management should be along the lines suggested by the experts committee in April last.
– Then, the honorable member is in favour of the withdrawal of the bill?
– There is no need to withdraw the bill. If the Government wished to do so, it could insert certain amendments to give effect to my suggestions. The economists’ committee last April laid down definite principles which should be observed. Although these were not so definitely stated as in the report submitted by the experts last year, they were, nevertheless, indicated. The principles were as follows: -
That equilibrium between costa and prices oe sought as a basis for .the restoration of employment.
That Parliament authorize the Commonwealth Bank to manage the exchange rate to this end, taking into account economic conditions.
That the budget deficits for 1032-33 should not exceed £12,000,000.
That the Commonwealth Parliament systematically revise the tariff with the objective of promoting the greatest employment throughout industry, and not only in the industry directly concerned in each item.
Effect has not been given to those recommendations. If an attempt were made to express them in our legislation, we should be facing our difficulties in an entirely different way, and with much more hope of reaching a successful solution of them.
The first essential, however, is that the facts of the whole situation shall be placed in our possession. Authoritative information as to the relation of the currency of this country to the gold standard, is absolutely necessary. I suggest, therefore, that the Government should appoint a committee such as the Macmillan Committee of Great Britain, to determine .the price levels in Australia in relation to Great Britain and the gold countries. If we must retain the system of management of the currency and exchange, the fullest possible information must be made available to us; otherwise depreciation in the value of our money will undoubtedly continue.
– And the depreciation in the value of the pensioners’ income will also continue.
– That is so. The mere cutting of pensions will not get us anywhere. I suggest that . the Government should arrange for the appointment of a committee to submit a report to enable us to determine exactly what the position is as between Australia and Great Britain in the matter of currency, what depreciation has occurred as a result of the issue of £82,700,000 of shortterm credits, and how the depreciation which has occurred in price levels has influenced the purchasing power of money. Such a committee could also inform us as to the rate of exchange necessary to stabilize our position. Honorable members will recognize that it would be useless to fix the invalid and old-age pen Hi on rate at 3 5s. a week, and to find the following month that purchasing power had decreased to such an extent that the pension, though nominally 15s., was actually worth only 10s. or 7s. 6d. Information such as that should be made available to honorable members before they are asked to come to a decision with respect, to the matters contained in this bill. The essential thing is to obtain the facts as to purchasing power in this country as compared with other countries. We should also have further information as to what is a proper rate of exchange to restore prices and costs in Australia. These are matters which concern the pensioners and the public servants very materially. Members of Parliament, too, who are having their allowances further reduced, should know the proper relationship between costs and prices in Australia. I suggest that a committee should be appointed to determine these points. Its report could be submitted within a short time, and the people would then be in possession of some extraordinarily useful information. The possibilities of obtaining the information that is needed have been increased by the work done during the last two years. Having obtained that information, it would be the duty of this Parliament to pass the legislative machinery necessary to enable the Commonwealth Bank to implement the findings of the committee. There should be an amendment of the Commonwealth Bank Act as part and parcel of this financial emergency legislation. Ordinarily, the amendment of the Invalid and Old-age Pensions Act should be made by an invalid and old-age pensions bill, and any alteration of the conditions of the public servants should be made by an amending Public Service bill. The method of amending several acts by a measure such as we are now discussing has been adopted to enable honorable members to debate the proposals of the Government for reducing expenditure as a whole. Therefore, an amendment of the Commonwealth Bank Act should be embodied in this measure also.. I propose to give notice of an amendment to enable me to discuss the subject upon lines which I consider absolutely necessary. The Commonwealth Bank Board should be placed in a position to arrange for what-; ever rate of exchange might be suggested as being the proper rate - the real rate of exchange. It is not of so much concern that the present rate may he increased or reduced; what is needed is that the rate shall be real and effective. I am of opinion, however, that if the rate were determined by actual conditions, it would go up. The Commonwealth Bank Board could be empowered to adopt the findings of a committee such as I have suggested, and provision should be made that the Commonwealth Bank must buy and sell all exchange offered from both business houses and banks, so that the rate might not be broken by open market transactions. Great Britain, when faced with a similar position, established what is known as an exchange equalization account of £150,000,000 provided by the Bank of England for the specific purpose of keeping price levels in Great Britain at such a rate as would stimulate the business of the country and increase its national income, improving the opportunities of exporters, and thus enabling them to increase their total revenue and reduce their income taxation, or giving a concession on essential services that would otherwise be unavailable. It should be the function of the Treasury here to find the money needed. “We heard a great deal during the last election campaign of “ tuning-in to Great Britain “ ; of following the lead given by that country. We should do that; and, in doing it, we should be following wise leadership. In matters of finance, GreatBritain stands pre-eminent, and we could not do better than follow her example. There is no suggestion in connexion with the provision of this money that sterling should be stabilized and the exchange rate so managed as to assist internal markets and the export trade. What I have suggested would not necessitate political control of the bank.
– Where does the right honorable member suggest that we could obtain the money for an exchange stabilization account?
– The honorable member does not understand the position.
– The right honorable member for Cowper (Dr. Earle Page) persists in dealing with the subject of exchange, but I cannot permit him to answer interjections which refer to matters outside the scope of the bill. I have given him much latitude, and I ask him not to disregard further the direction of the Chair.
– A policy such as I have outlined would be a facsimile of that in operation in Great Britain. I shall answer the point raised by the honorable member for Balaclava on some other occasion. I suggest that the exchange equalization account. should be similar to our note issue from which the Government takes the profits, and in this case should bear any loss. There is no necessity to wait for money to be found. At present the British treasury has provided only a small proportion of the £150,000,000 involved. The federal treasury could guarantee any loss that might be incurred, and at the same time be permitted to take any profit that is derived, as is done in Great Britain. Any increase in exchange from the normal rate could be met by a simultaneous reduction in tariff. The recommendation of Mr. Keynes in this connexion is, worthy of consideration. He said -
If alteration of the exchange were accompanied by a corresponding rectification of tariffs, I should support it, for aggravation of tho existing tariff by exchange depreciation being superimposed upon it is probably the principal cause of those remaining maladjustments which are purely Australian and not a just reflection of world conditions.
In effect he holds that we have not done anything to connect our exchange rate with our customs tariff. The Government is now forced to bring down an amendment of the financial emergency legislation which we were told last year would solve all our difficulties. The policy I have recommended should have been applied at the outset, so that everyone might know exactly where he stood. At present the importer finds that he has to charge more than he desires, because he has to pay a high tariff in addition to the rate of exchange.
– Order !
– “When an old-age pensioner receives 15s. a week, he finds that he has to pay more for his imported tobacco than he otherwise would pay, because of the high exchange rate. If reductions in , the tariff were contemporaneous with any rise in the exchange rate, the importer would be in a better position than he is in to-day with the duties that prevail. The manufacturers are in a similar position. At present they are forced to charge more for their goods because of the high cost of raw material. All this is reflected in the cost of living in Australia, indeed it is one of the main factors of the present cost of living. We should be prepared to face the issue, and reach a definite understanding before any reduction is made in old-age pensions. The Government seems to be exploring other avenues without considering this most important phase of the question. Those who say that we should not deal with the exchange position and the tariff before deciding upon further cuts take a very short-sighted view of the subject. The two matters are inextricably related. The price levels in Australia have an important bearing on invalid and old-age pensions. When the Government of which I was Treasurer increased pensions from 15s. to 17s. 6d. a week, and later from 17s. 6d. to 20s. a week, it considered the purchasing power of money. If honorable members will refer to the budget introduced at that time, they will see that the amount received was such that the pensioners were- being penalized because the pension had not risen with the cost of living. Honorable members will find that in 1925, for the first time since 1910, when pensions were first introduced, the pensioner was in relatively the same position notwithstanding increased living costs. Importers and manufacturers are deeply interested in price levels. The primary producers are anxious to know whether they will be in a position to pay their taxes, and whether they will be able to carry on their operations at a profit. All these matters are closely associated with the problem we are at present discussing. [Leave to continue given.] We should do something to stabilize price levels, especially the prices of primary products, and at the same time prevent the costs of secondary products from rising unnecessarily. If that be done, we can visualize the day when, not only the Commonwealth, but the States too, will be able to balance their budgets, and deal with their problems in a scientific and positive way. I do not believe that the percentage cute that are being made under this measure are scientific. The whole subject should be dealt with in a different way. It is for that reason that I have brought forward my proposal. If it were adopted, an immediate effect would be stability in the wool market, and on the prices received from wool depend the national income of Australia during the ensuing year and our trade balance overseas. If we could stimulate our export industries and make them more profitable, the volume and value of our exports would increase, thus making available overseas additional sums that would make it possible to enlarge our imports; and that, in turn, would have a beneficial effect on our customs revenue. In such circumstances we could look to the future with some degree of hope. I am satisfied, and every one else must be also, that percentage reductions alone at the present time will not solve the problem that faces us. Something more than that is needed. It would, I suggest, be a calamity if this debate were so circumscribed as to exclude the aspect of the subject to which I have directed attention, which appears to me to bo inextricable from a consideration of the question. If we reduce old-age pensions we must be prepared to show how we propose to bring down contemporaneously the cost of living. No one, the Government least of all, wishes to do anything that may harm oldage pensioners. I am confident that its aim is to discharge whatever obligations it assumes. For that reason, I have no hesitation in supporting its proposal. It must so manage its finances that old-age pensioners and public servants may be «ure of receiving what they are promised. The contention of the present Leader of the Opposition when he was Prime Minister last year, was that if he did not follow the course that he then proposed, instead of a pension payment of 17s. 6d. a week being possible, it was problematical whether the Government that he led would be able to pay more than 12s. in the £1. Everybody agreed with him. If we faced the problem according to the views enunciated by the economists in their reports, both this year and last, means would be found to bring about equilibrium between costs and prices. With the management of the exchange by the Commonwealth Bank along the lines that I suggest, there is a possibility of increasing not only State and Commonwealth revenues and the national income, but also employment generally throughout this country.
– I recognized the importance of the right honorable gentleman’s speech and was sorry to interrupt him; but it is my duty to enforce the Standing Orders, and insist upon debate being strictly relevant to the bill. If honorable members generally desire to widen the scope of .discussion, they must move accordingly.
– On a point of order, I direct attention to the fact that the object of the bill is to deal with a financial emergency, and that the measure is the outcome of a conference of State Premiers convened by the Prime Minister for the purpose of devising means of dealing with the question. The exercise of the functions of honorable members will be greatly curbed if your ruling, Mr. Speaker, is sustained.
– Order ! There if no point of order.
.- The House has listened* this afternoon to two speeches on precisely the same subject. 1 now propose to make a third.
The Leader of the Opposition (Mr. Scullin), many honorable members must have felt, was labouring under a rather severe handicap in attacking the present Government on its proposed financial emergency legislation, because the right honorable gentleman was forced to act similarly last year, when he had the unpleasant duty of putting through a measure of which this is only an amendment. I can imagine the freedom of style that would have characterized the right honorable gentleman’s speech had we then been responsible for the legislation which he was obliged to father.
The Leader of the Opposition rightly said that debate on a subject of this character should be conducted with a full sense of responsibility. In his earlier periods there was evidence of his remembrance of that injunction; but it would be difficult, indeed, to suggest that toward* the end of his speech a sense of responsibility was the dominant idea in his mind. The government of the country is not assisted by objection to reductions in expenditure unless some indication- is given as to where the necessary finance is to he obtained if the proposed reductions are not made. In that respect the right honorable gentleman skated very lightly and delicately, and avoided an obstacle which has a very real significance. It would be easy and popular at the moment to refrain from proposing any reductions in expenditure, and trust to luck for the revenue required. That, after all, summarizes the recommendations of the Leader of the Opposition. But the Government is not prepared to do that.
The first objection of the right honorable gentleman Avas that the reductions now proposed are not in accordance with the Premiers plan, which he accepted. In reply, I point out that that plan had as its basis a recognition of the true responsibilities of governments, and was founded upon the very simple principle that governments must pay their way within an early period, to which end the finances of the Commonwealth and the States should be soundly based. The alternative was the insolvency of not only governments, but also large numbers of our fellow citizens. Accordingly, the plan dealt with the volume of public expenditure, Commonwealth and States, as at the end of June, 1930. It proposed that certain reductions should be made immediately in that expenditure, as the first stage in a progressive plan for the balancing of budgets at a reasonably early date. The plan is not understood unless it is recognized, first, that it applied to the total amounts of expenditure rather than to the rates of payment made to individuals; and, secondly, that the proposed reductions, expressed in percentages, represented the first step towards the balancing of budgets. Surely no one would be so foolish as seriously to say that, if the particular reductions then suggested were insufficient to save the country from insolvency, no further reductions should be made whatever the circumstances might be?
The Leader of the Opposition has argued that the reductions proposed in this bill are not necessary. It is true that last year’s accounts closed with a surplus of £1,314,000. But that signifies only that the Commonwealth Government owes so much less to the Commonwealth Bank. The outstanding accumulated deficit of the Commonwealth for which no provision has been mad” is £17,216,000. In the absence of the reductions here proposed, to which the right honorable gentleman objects, if the Commonwealth were required to pay to the British Government the full amount owing on account of war debts, there would be a deficit this year of £9,681,000. If, however, interest only were taken into account, the deficit would be £7,681,000. Leaving out of account those war debt payments, the prospective deficit was reduced to £2,781,000. That has been provided for - as a member of the Government I do not propose to criticize the method adopted, although obviously it is open to criticism - as toonehalf by carrying forward last year’ssurplus of £lj314,000, and as to theremainder by the reductions proposed in this bill. In that sense, and to that extent, there will be a balancing of the budget. The financial position of the Commonwealth is still difficult, and, therefore, it is not safe to trust to luck. The right honorable gentleman suggested that the Government had under-estimated its revenue for the year. The Government thought it proper to be candid with the people of Australia. It is true that last year the receipts from income tax were higher than were expected; but since the year 1931-32 covered the worst period of the depression, it naturally follows that the taxation to be collected this year will be on incomes the lowest since 1893. if one takes gold prices into account. In the same way the receipts from land tax this year must almost certainly be less than last year.
The right honorable gentleman devoted particular attention to the customs revenue, which he said had increased during the early months of the current financial year. In this connexion the question arises whether the same volume of goode will be imported this year as last year. If so, and we have the ‘money to pay for them, it will be a welcome sign of returning prosperity.
– Not necessarily.
– It must not be assumed that because we are able to buy more goods overseas than formerly, we are necessarily creating financial difficulties for ourselves ; we must consider the facts and circumstances of the case. The increase in customs revenue for the first two months of the current financial year can be maintained only if money or credit is made available abroad for increasing our purchases over the amount of last year. How can that be done? In the case of money it. depends on the price* received for the goods we export. I do not wish to repeat what the Treasurer said in his budget speech, that although there had been a welcome increase in the prices of certain primary products, those increases only brought them to about last year’s level. We cannot be sure that the seasonal prospects will be realized, and we know that world prices are uncertain. A report issued by the Commonwealth Statistician on the 2nd September last, after the budget had been prepared, contains the following paragraph : -
It is clear that the present volume of exports cannot be maintained without an increase in export prices. … It may be reckoned very roughly that a rise in export prices for the whole year 1932-33, of at least 15 per cent, above the present level will be required to sustain the present volume of exports.
Although it is easy to say that the customs revenue will continue to increase, a precise examination of the facts reveals that that result is by no means certain. It may be so. Certainly no one can deny it; on the other hand no one can be sure of it. The position is such that we must take the safe course. Should there be an increase in revenue above that provided in the Estimates, the Government hopes to be able to made a real contribution towards the well-being of all sections of the community by reducing taxation. A year or more ago honorable members were astonished at a report by economists that out of a national income of £450,000,000 about £194,000,000 was pent by governments. Whatever the difficulties in the way, I am confident that honorable members generally agree with the Leader of the Country party (Dr. Earle Page) that one of the major problems facing Australia is how to reduce the cost of government. It is useless to talk in generalities about bringing down the cost of government; we- must consider particular reductions. This bill proposes to make certain specific reductions, among them being the reduction of invalid and old-age pensions. I recognize that those who oppose the reductions can make a sympathetic appeal of great force, for there is no subject which lends itself so readily to political exploitation by an opposition. I am glad to say that when I was in Opposition last year no member of the party I was leading exploited for political purposes the proposal of the Labour Government to reduce invalid and old-age pensions. One has to look at the facts in this connexion. One outstanding fact is that last year the number of invalid and old-age pensioners increased by 15,000.
– The honorable gentleman will admit that the circumstances are entirely different.
– I admit that there were causes for the increase; I am merely stating the fact. That Australia cannot afford an indefinite increase in the pensions bill, any person possessing a sense of responsibility must admit. Where does this money for pensions come from? Some honorable members addressed themselves to this question as if the determination of the rate of a pension were a matter of the generosity, ot the meanness, of individuals in this chamber. I remind them that money paid in pensions has to be provided by the people of Australia as a whole; it does not come from nowhere. We have to consider the ability of the people of Australia to provide any given amount, and the effect of their doing so on employmerit and industry generally.
So much has been said about this reduction of invalid and old-age pensions being unjust, and not in accordance with the Premiers plan, that I propose to devote a few minutes to examining the figures. The Premiers plan provided for a reduction of 20 per cent, of all adjustable government expenditure, including emoluments, wages, salaries, and pensions paid by governments, compared with that for the year ended the 30th June, 1930. On page 264 of the Year-Booh, volume 24, the Commonwealth Statistician shows that in 1929-30 invalid and old-age pensions cost this country £10,791,325. The following year the amount was £11,710,953, an increase of nearly £1,000,000 on the expenditure of the previous year. In 1931-32 there wa3 a decrease of about £5S5,000, the amount paid being £11,125,956. That decrease represents a reduction of about 5 per cent, on the expenditure for 1930-31 ; but, compared with the 1929-30 figures,
Which form, the basis of the Premiers plan, the figures show an increase of £334,000. It will be seen therefore that, so far from invalid and old-age pensions having been reduced in total amount - and I am arguing on that basis because it is necessarily the basis from which the Treasurer and the Premiers plan must proceed - they show a “considerable increase. The proposed expenditure for this year is £10,500,000,. which is only about £300,000 less than that for 1929-30. On the 1930-31 figures’, it represents a reduction of about 10 per cent.
In considering the justice of the proposed reduction, I take two lines of approach. The invalid and old-age pension was increased on account of an increase in the cost of living, and if it were right so to increase it, it is equally right to consider a reduction of the pension when the cost of living decreases, at least, if the financial condition of the Commonwealth, and of the people as a whole, presents real difficulties. Take the retail price index, so far as it relates to food and groceries. In 1911, when the pension was first paid, it was fixed at 10s., and I find that the increase to 12s.’ 6d. in 1916 left it, on the basis of the 1911 price levels, at 8s. Sd., instead of 10s. When the increase to 15s. was made in 1920, the pension was really worth only 8s. on the basis of the 1911 price levels. In 1923, there was an increase to 17s. 6d., and the real value of the pension on the same basis was then only 9s. 3d. In 1925, when the pension was increased to £1, it became worth lis., and for the first time, except during the immediately preceding year, its real value was above the original amount. If the pension were reduced to 15s., it would he worth 10s. 4d., on the basis of the retail prices of food and groceries in 1911. If one takes the index which includes house rents, one gets the following comparison: -
If the pension were now reduced to 15s. in every case - that is not the proposal contained in the bill - its real value would be 10s. 7d., but it is proposed, under .this measure, that where the pensioner depends on his pension for a living, and having no other income or only additional income which would bring his total income up to not more than 17s. 6d., he shall receive a pension which with income, if any, will amount to 17s. 6d.
The bill also provides for a charge upon property, after the death, of the pensioner. It is difficult to see any reasonable objection to a proposal so eminently fair. The proposal that relatives should contribute to the maintenance of pensioners is also a fair one. It will, I hope, do a great deal to restore the sense of family responsibility, in which I am sure every honorable member believes, whatever he may say in the course of tins debate. It is provided that no contribution shall be required in a case where a relative is unable to afford it, having regard to those dependent upon him, and having regard to his means. Nor can any contribution be ordered where, for special reasons, it is not fair or just that a relative should be required to make provision towards the support of a pensioner. In all cases the grant of die pension is independent of any contribution made by a relative.
The right honorable the Leader of the Opposition (Mr. Scullin) went so far as to say that the present pensions system is really a contributory one, because we all contribute to the Consolidated Revenue. I am afraid that if a proposal were made that a large bonus should be paid to every member of this . House, because we all pay taxes, and it were then sought to support that proposal on the ground that it was founded on a contributory basis, some of us would have dialectical difficulties in defending it outside this chamber. The administration of invalid and old-age pensions has not been harsh in the past, and there is nothing in this bill that will make it harsh in the future. The Government has no intention or desire other than to act sympathetically, but it will also act fairly and justly towards new applicants for the pension, and towards the community as a whole. Only those who are entitled under the law to a pension should draw it, and the Government, so far as it is able, will administer sympathetically, according to its terms, the legislation passed by this Parliament.
I shall refer only briefly to the criticism offered to the reduction of the salaries and wages of public servants. All the
Government proposes is to apply to public servants a reduction which is applied to those working under awards outside the public service, when a reduction occurs in the cost of living.
Speaking generally, I claim that sound finance is a necessary condition of a return to prosperity, and from the point of view of both the pensioner and the wage-earner, it is essential that every reasonable step should be taken to bring our expenditure within the limit of our real resources. It would be fatal to go on incurring deficit after deficit. That would result only in ruin and devastation for all sections of the community, especially for those who are least able to protect themselves, such as the invalid and old-age pensioners. The Government conceives that, in submitting these proposals, it is really acting in the interests of the pensioners as well as in the interests of the community as a whole. The statements of those who profess to be their special friends, but who object to these reductions, amaze me. If some half-wit were to propose that everybody should get £20 a week, and that a law should be passed to give everybody that wage, some members of this House would be frightened to oppose it. Without being able to associate the subject of exchange so directly with theproposals in this bill as was successfully done by the right honorable member for Cowper (Dr. Earle Page), and therefore without discussing it on this occasion, I appeal to the House, on the grounds that I have stated, to support the measure.
Sitting suspended from 6.15 to 8 p.m.
– I am sure that when it became known that the budget speech of the Prime Minister and Treasurer (Mr. Lyons) contained proposals for an amendment of the Financial Emergency Act-, the people of Australia as a whole must have been shocked realizing, as they would, that a further inroad was about to be made upon the incomes of some of the most unfortunate sections of the community. They were entitled to recall the policy-speech of the Prime Minister, and many of the speeches delivered in the various electorates by members of the party opposite. For instance, in the Sydney Town
Hall, the Prime Minister spoke at great length of the value it would be to Australia if his party were returned to power, and concluded by saying that from the day on which his party took control every day onward would be a better day for Australia.
– The people still think so.
– If the people were given an opportunity now to say whether they think it was a better day for Australia when the present party came into power, I have no doubt as to what their decision would be. The loss of purchasing power is having such an effect on all classes in the community that it is very difficult to estimate the extent to which the people generally have suffered, but the evidence of it is plainer to-day than it has been at any other stage of the depression, and I feel that as time goes on the urge for a change of control in the administration of Australian affairs will come more forcibly from the business section of the community than from any other. The wage-earners have reached the lowest possible level ; in most instances, they are accepting the dole or a food coupon ; but there are others with equal cause for complaint against the continuation of a policy which is steadily robbing them and destroying their life’s work. I refer to those who have, by various means, acquired small incomes, or have small businesses and such like. The statement of the Attorney-General (Mr. Latham) when supporting this bill that to follow any other course than that proposed in this measure would mean bankruptcies was absurd. I think I can justly claim that, as a result of this policy, there have been in every State of the Commonwealth more bankruptcies than at any other period in our history. There is a feeling of general despair among the whole of the people which is entirely attributable to the adoption of the plan embodied in the legislation which this bill proposes to amend.
With regard to speeches delivered in the electorates, prior to the poll last December - particularly in the metropolitan divisions - won, but only for a short time, by ministerial supporters, I can picture the honorable member for South Sydney (Mr. Jennings) speaking in Redfern, across the road from my electorate, and endeavouring to justify this attack upon the unfortunate pensioners. I think that the people who supported him and other honorable members opposite at the last election were entitled to expect that if the incoming government could not remedy their troubles, at least, it would not make them worse. The people were told that if the control of the affairs of Australia were entrusted to the followers of the honorable member for Wilmot (Mir. Lyons), things would very soon be on their way back to their ordinary level. At any rate, such was the atmosphere created throughout Australia. The answer is contained in the provisions of this bill.
I remember a deputation which waited on the Prime Minister not long after his return to power, and was attended by the honorable member for South Sydney and others. The honorable member will recall the facts which were placed before the Leader of tho Government on that occasion, how old-age pensioners brought along the inadequate clothing they had to wear in order to demonstrate their unfortunate circumstances. The honorable member will also agree that they definitely made out a case in asking for a restoration of the 2s. 6d. which had been taken off their pensions by the Financial Emergency Act. On that occasion I asked the Prime Minister if he was prepared to make it known to the people generally that his Government would hold the situation even at 17s. 6d. instead of making it worse. I admit that I received no definite answer, but it was. painfully clear to me that the policy provided for in the Premiers plan, instead of alleviating the position with regard to pensions and unemployment, was tending to make it worse. I agree with the right honorable member forCowper (Dr. Earle Page) that this proposed further reduction of pensions is not the end if this policy of the Premiers plan is still to be continued.
Those honorable members who were in this Parliament when the Financial Emergency Bill was first introduced, were told by the then Treasurer (Mr. Theodore) that by the acceptance of the Premiers plan as embodied in the measure, work would be provided for 100,000 men, and that factories which were then idle would spring into activity almost immediately. This afternoon when I listened to the speech of the Attorney-General (Mr. Latham) I was reminded of the speech of the then Treasurer. They were practically the same. Mr. Theodore endeavoured to explain that pensioners would do better on 17s. 6d. a week than on £1. The only way to test that is to place one’s self in the position of an old-age pensioner trying to eke out an existence on 17s. 6d. or even £1 a week. It is all very well for honorable members to view these matters in comfortable surroundings and wanting for nothing, but let them go into the district I represent and into others and endeavour to explain to old-age pensioners that they can work out their existence under conditions set out in this bill. Like the Attorney-General to-day, Mr. Theodore used the reduced cost of living as an argument for cutting pensions. I think it was most unfair on his part to do so. Is there any honorable member in this House who will say that even with the reduced cost of living a pension of £1 a week will provide the requirements of an old-age pensioner, to say nothing of the extra requirements of an invalid pensioner. Those who are endowed with all the necessary faculties to enable them to go about their occupations in the ordinary way should extend the greatest sympathy to those who are not so endowed. But apart from their particular disabilities, invalid pensioners must have medicines and medical attention, and they require warmer clothing than is needed by those who are in normal health. I could read a long appeal from the Blind Association which would touch the heart of every honorable member. To argue this question on the basis of the cost of living even from the angle of a pension of £1 a week, is most unfair. I do not deny that it was discussed from that angle last year, but there were many honorable members of the Labour party who did their best to expose this method and prevent the original bill from passing. The measure was passed only with the aid of the then Opposition. We have always claimed that it was not Labour’s policy; that it was the policy of the avowed enemies of Labour. At any rate it was with the assistance of the enemies of Labour that that bill became law. In introducing it last year, the then Prime Minister (Mr. Scullin) said -
I hope that it will give a sense of security to the people, and that it will enable business to be revived and moneys to be released for employment in this country. If the assurances that we have received, and the statements that have been made to us, bear fruit as a result of the operation of this plan, I believe that we shall turn the corner, and be able to employ many of our citizens who are now out of work.
The assurances referred to by the then Leader of the Government were not dis.closed to the House, but they must have been given by some one with authority. To my mind they could not have been bona fide, or the people responsible for them must have failed to live up to their undertaking. At any rate, when those who were leading Labour were prepared to accept an assurance from some one behind the scenes if they would only implement the Premiers plan, they failed miserably to stand behind Labour’s policy. On the same occasion the then Prime Minister, said -
We’ have the assurance that when our finances are straightened out, as proposed under this plan, the banks will carry the governments of Australia over the period of three years.
Those words seem to indicate that the assurances had been given by the banks. They were evidently prepared to carry the Government and Parliament for three years if the Premiers plan was accepted. That it must have been accepted and in its entirety is evident from the fact that the plan became the law. The three years have not elapsed; on the contrary, only one year has passed, and now we are to have a further cut of pensions. The inference I draw from the quotation I have just read is that the banks were prepared to carry the Government over and would adjust -the financial situation, without any further reduction. Another quotation I make from the speech of the then Prime Minister is the following:
Government employees who are making a sacrifice will have their positions made more secure; persons whose pensions are being reduced will have removed from them the danger of a greater reduction.
The logical inference of those words if they mean anything is that the acceptance of the Government’s proposals was to make the position safe for governmentemployees who had to undergo the cuts imposed, and to the invalid and old-age pensioners it was an assurance that if they accepted the proposed cut their position would be secure and any further cut would be avoided.
We are entitled to assert that, when the leader of the then Government introduced the measure, and even during the sittings of the preliminary conferences which resulted in these proposals, the country expected a definite undertaking that, if the measure went through, the future position of those people would be safe. As is well known, a number of us refused to accept any assurance that was given. Naturally we were guided by the past, and knew that honorable members opposite were opposed, on principle, to all social reforms. I know perfectly well that the payment of pensions was accepted originally by our political opponents only because of the weight of public opinion that was behind the reform. At election time honorable members opposite never have the courage to advance a definite plan for their removal.
I recollect that when Sir Joseph Cook represented Australia at a certain overseas conference at which I was present, the payment of better wa.ge3 and expansion of social conditions came under consideration, the endeavour being made to bring backward countries up to the standard of more advanced communities. I noticed that on every occasion Sir Joseph and his co-delegates voted for the standards equivalent to the lowest prevailing in central Europe. Palpably, there has never been a genuine desire on the part of honorable members opposite to accept even a small degree of advancement. The progress made is the result of pressure brought to bear upon the Government and its supporters by the virile party of which I am a member - a party that will watch these matters carefully, and keep the general public fully advised.
– Who instituted pensions?
– Time does not permit me to go exhaustively into the subject; but the granting of pensions resulted from a compromise effected between the Labour party and the party under the leadership of Mr. Lyne, the latter gentleman and Mr. George Reid being contestants for the premiership of New South Wales. In return for the support of the Labour party, then the corner group, Mr. Lyne promised certain improved social conditions, one of which was the granting of pensions. Afterwards that service was taken over by the Federal Government.
The members of my party opposed the Premiers plan, contending that, if by reducing pensions and other social services by 22-J per cent., Mr. Theodore could find employment for 100,000 persons, the logical conclusion was that, if the reduction were 45 per cent., employment could be provided for 200;000. It has been conclusively proved that, instead of providing employment for 100,000 individuals, the adoption of the plan has added ‘ practically another 100,000 to the ranks of our unemployed. Subsequent events have clearly demonstrated the fallacy of the whole programme then advanced.
In the course of my speech on the basic wage this afternoon, I indicated that Judge Beeby himself had admitted less than two months ago that the 10 per cent, cut in real wages in January, 1931, had tended to make the position worse, instead of improving it. It is unnecessary to confine my references to the utterances of members of Parliament. My contentions are endorsed by gentlemen who have long been associated with industrial matters in a judicial capacity.
The amended bill introduced by the Government is even worse than the previous one, which contemplated an allround reduction of 2s. 6d. a week in oldage and invalid pensions. I am confident that the real effect of the bill will not be appreciated until it is actually in operation. As an illustration, I refer to the reductions in returned soldiers’ pensions last year. It was thought that the 22£ per cent, reduction would be the final inroad made upon the income of recipients. Very few honorable members then realized that, in addition, a regulation was to be introduced embodying what was termed an “ adequate maintenance “ clause. I followed the progress of the measure very closely, and did not in the least anticipate such a step.
– That is so; but it has nothing to do with the bill.
– It proves that the real effect of these measures cannot be appreciated until they are actually in operation. I shall give an example that occurred in my electorate. The person concerned is an old lady, aged 74 years-
– On a point of order, Mr. Speaker, I submit that the matter of returned soldier pensions is not under discussion, and the remarks of the honorable member are, therefore, irrelevant.
– I have listened very carefully to the speech of the honorable member for West Sydney (Mr. Beasley), and I am satisfied that he is connecting his remarks with the bill.
– About four months after the Financial Emergency Bill was passed, we were informed that, in addition to reducing soldiers’ pensions by 22-J per cent., it was also necessary to take into consideration the whole of the circumstances of the pensioner’s household, to determine the application of the adequate provision clause. The old lady to whom I refer lost one son at the front, and another of her sons returned from the war a cripple. She was receiving an old-age pension and a pension for the boy she had lost; but an inquiry revealed that her husband, who is also aged, was in receipt of a superannuation benefit amounting to £3 5s. a fortnight. Of course, he had paid for that during his working life. It was contended that, with the superannuation payments and the old-age pension, the house was adequately provided for. Accordingly, the pension which the old lady received for her lost son was reduced from 36s. to ls. a week. I apprehend that similar happenings will result from the operation of this measure. Our pensioners will not realize the true position until, quite unexpectedly, they find their pensions cancelled. Then honorable members on both sides of the House will receive numerous requests to plead the cause of those affected.
I contend that unfair responsibility is being placed upon Deputy Commissioners of Pensions by asking them to exercise these discretionary powers. They will be made the battle centre of all the attacks which we shall have to make from time to time in our endeavours to ease the burdens of pensioners. I am confident that some of the proposals in this measure will be found impracticable, and, as I said earlier, they will make greater inroads upon the small incomes of these people than many honorable members realize.
I come now to the provision that insists upon children maintaining their parents wherever that is considered possible. Reference has been made to the great increase in the number of pensioners during the last year or so. Obviously, the general depression has brought about that increase. As the Leader of the Opposition (Mr. Scullin) stated, hundreds of children who previously supported their parents now cannot do so. It has boon our proud boast that whenever possible Australian children do their utmost to care for their aged parents. I refuse to allow to pass without challenge, the statement that Australian sons and daughters fail to provide for needy parents. I know that there are isolated cases of neglect, but that is to be found in all walks of life and in all countries. It is entirely wrong for any honorable member to make a general attack with regard to the alleged failure of Australian children to provide for their parents. I know cases, where, because of their son’s unemployment, parents have, with great reluctance sought the aid of the local member regarding a pension. They were not actuated by any desire to bleed the Government, but were forced by sheer privation to seek assistance during these extraordinarily hard times.
– This measure will not adversely affect such cases.
– I am coming to that. I believe that the operation of the measure will give rise to a set of circumstances whereby a neighbour will write to the authorities saying that “Bill” or “ Tom “ is working, and the first thing the pensioner will know will be that his pension is cancelled. Informers are ever eager to harm others, and they will thrive under this bill. Consequently, the onus would be thrown on the pensioner to explain the circumstances of his home.
Government MEMBERS - No.
– I put the position as I see it, and I have had considerable experience in the matter, including a number of years as a member of this Parliament. In his speech the Prime Minister (Mr. Lyons) indicated that the matter of a son or daughter’s obligation to contribute towards the sustenance of a parent will be determined “ on their position to contribute.” What precisely does that mean? How is the determination to be arrived at? If I were to go to the Industrial Commissioner and give as a reason for a request for increased wages the fact that I now have to keep my aged parents, my request would be disregarded as not affecting a basic wage determination. On whose shoulders will lie the responsibility of determining the capacity of children to contribute to the maintenance of their parents? I believe that the onus will fall upon the unfortunate pensioner.
Government Members. - No.
Mir. BEASLEY. - It is all very well for members opposite to say “ No “. Honorable members must realize the difficulty that will exist in the case of large families, of determining the responsibilities of one child against that of another. Eventually the onus will be placed upon the pensioner, whether invalid or old-age, to supply to the’ department every detail in connexion with his children’s means of livelihood.
– Will the honorable member point to the clause in the -bill to which he is referring?
– I am quoting the second-reading speech of the Prime Minister. It is all very well for the honorable member to try to lead me from the track. I am answering the arguments of the Prime Minister. He has stated that the sons and daughters of pensioners should bear a certain responsibility, and I am entitled to elaborate that point.
– The pensioner does not come into the matter, at all.
– The pensioner comes into the matter all the time. What does it matter about the children ? They can go to the four corners of the earth. How will the pensioner be able to trace them? Only the aged and the infirm are concerned in these proposals. Last week we discussed legislation, the object of which was to grant assistance to three of the States. That assistance is needed as a result of the Premiers Conference and the financial emergency proposals. In the States of Tasmania and South Australia the old-age pensions and the wages of the Public Service employees are to be reduced, and the amount required to help these States is to be collected by this Government. There is no doubt that the Commonwealth Government in Canberra is becoming a collecting agent. It is collecting from the poorer classes and distributing largess to the smaller States in an effort to maintain the exorbitant interest rates on oversea borrowings, which has placed an almost unbearable burden upon this country. The honorable member for Hindmarsh (Mr. Makin) has produced in this House figures showing that South Australia is the most heavily taxed State in the Commonwealth, yet this Government is placing a further burden upon the public servants and pensioners generally of that State to enable it to meet impossible commitments overseas. The Government’s proposals in this direction are deserving of the utmost opposition on the part of all members of this House.
I como now to the proposed reduction in Public Service salaries. The position of the public servants should receive our most careful and favorable consideration in the light of the sacrifices already made. It is not right that they should be made the chopping-block for the Government’s financial economies, merely because they are public servants. Many parents have placed their sons and daughters in the Public Service at considerable loss to themselves, but with the feeling that in the end there will be continuity of employment, and, at least, an honouring of obligations on the part of the Government that employs th6m. The Government should not always single out the public servants for special sacrifices when it is in need of additional revenue. The Public Service Salaries Act of July, 3931, provided for a reduction based on the cost of living, and also a flat rate reduction of up to 24 per cent., covering all grades of officers. Let me tell honorable members what the public servants have done for this country. They accepted the cost-of-living reduction at the hands of the late government three or four months before it actually became due, and by so doing sacrificed £4 10s. per head. And at. the request also of the late government the public servants refrained for twelve months from filing claims before their Public Service Arbitrator, an action which undoubtedly robbed them of many advantages and concessions. The action of this Government in singling out the public servants for additional sacrifices should be a lesson, not only to the public servants themselves, but also to Labour leaders, not to concede one inch in respect of the benefits won for industrialism, because once concessions are made in one direction further sacrifices are demanded in other directions. That has definitely happened in regard to the Public Service. The Scullin government, in putting the Premiers plan into operation, took a definite and drastic course, and that course having been opened up for it, this Government, so soon as it took office, found it an easy one to follow and proceeded further along it. Therefore, the Labour paTty must, in future, be determined not to forgo one reform or advantage won for the workers, but to fight for its retention to the bitter end, because a concession in one direction must lead to further concessions in other directions. The public servants have suffered a reduction in, not only salaries and wages, but also superannuation. Under the superannuation scheme fortnightly deductions from salaries are placed in a fund for the ultimate benefit of the public servants. The Commonwealth Government also contributes to the fund. Repudiation has been spoken of in this House, but let me inform honorable members that this Government’s repudiation in respect of its superannuation obligations is the worst form of repudiation that we have experienced in this country. Super annuation benefits have been reduced by 20 per cent., and there is no intention on the part of this Government to pay the public servants the amounts to which they are entitled, and for which they have contributed over a period of years. The Government’s policy is bringing nothing but misery and suffering to the public servants and the people generally.
There is another source of revenue which could be tapped if further savings are necessary. We have attacked the Australian bondholder by arbitrarily reducing his interest payments. We have placed additional burdens upon all the people within our borders, but we have allowed the overseas bondholders to escape. They are still demanding their pound of flesh. The budget papers show that we owe overseas roughly £307,000,000, on which the interest rate is between 5 per cent, and 6£ per cent. A reduction of 1 per cent, in the interest rate would save £3,070,000. If exchange were added there would be a further saving of £767,000, making a total of about’ £4,000,000. This Government is forcing the people to the lowest standard of living, but strangely enough, it makes no attempt to interfere with the overseas bondholders. We are rapidly reaching a stage at which the majority of the people of this country will demand that this Government take steps to relieve their burdens.
– There was no . such demand at the New South Wales election.
– Over 540,000 people made that demand in spite of boycotting on the part of the press, in spite of propaganda, and in spite of the wealthy interests of this country. Only recently the Sydney Morning Herald disclosed the fact that a reduction of only 1 per cent, in the interest rate on £96,000,000 of loan moneys over which the Government holds current optional conversion rights would benefit Australia to the extent of £1,000,000 a year, excluding exchange altogether. If this legislation has been introduced as a showcard in order to facilitate the conversions of the loan falling due on the 12th November next, we may expect other showcards of a similar nature when later conversions are about to take place. No doubt the people will be asked to bear even greater sacrifices. We should fight for the maintenance of the highest standard of living for our people. The aged and the infirm have played their part in the building of Australia. Many of them pioneered the outback under difficult conditions. Our parents and grandparents served this country well, and if some of them, because of a stroke of misfortune, have had to apply for a pension, surely we should assist them to the best of our ability, irrespective of the consequences. With the assistance of science and invention, this country has reached a high stage of production, and surely it can provide the requirements of the aged and the infirm. This Government, in the interests of capitalism, is endeavouring to lower the standard of living in Australia, and its proposed attack on the invalid and old-age pensioners should be resisted by every man and woman in this country.
.- In perusing this measure and the secondreading speech of the Prime Minister (Mr. Lyons), it seems to me that the Government’s fall from its election promises to, first, its budget proposals and, secondly, its present proposals, is nothing short of a tragedy, and the duty devolving upon me as Deputy Leader of the Opposition is to drive home the indictment of this Government for the gross and callous disregard of the helpless and weak of the community. A disorganized, helpless and unfortunate section of the people is being called upon by this Government to fill practically the whole of the financial gap that it has set out to bridge. What a tragedy for those people; but because the aged and infirm are not organized in a strong militant body, their protest is as futile as a voice crying in the wilderness. We know that the Government was seriously considering a reduction of war pensions.
– That is not true.
– That proposal provoked a storm of abuse from one end of the continent to the other.
– That is a lie.
– I ask the honorable member for Macquarie to withdraw that interjection.
– I withdraw it.
– Honorable members are not entitled to interject merely because they disagree with the views of the honorable member addressing the chamber. However distasteful the opinions expressed by an honorable member may be they must be heard in silence. Every honorable member, in turn, will have an opportunity to express his own views.
– The soldiers, being well organized throughout Australia, made their influence felt, and the Government had to back down before its proposals were submitted to the House. The majority of honorable members do not appreciate the position in which they are placing some hundreds of thousands of invalid and old-age pensioners; they received scornfully the protest made by the Leader of the Opposition (Mr. Scullin), but their scorn will not dispose of the case against this infamous measure. No doubt, the bill will be carried, for the Government has a majority in this chamber largely because, during the last election campaign, the Prime Minister said at a meeting in Launceston that if his party were returned to power, there would be no need for further cuts, and probably some of the cuts already made would be restored. But the reductions provided for in this measure are superimposed upon the sacrifices which the people are already bearing under the Premiers plan. The public servants have to suffer a further reduction, although they were told when the percentage cut provided for in the Premiers plan was made, that no further sacrifice would be asked of them
Last year the financial position of Australia was exceedingly grave; our country was in the throes of the worst financial crisis in its history, and all Australian Governments, Labour and Nationalist alike, were forced to reduce expenditure, not because they wanted to do so, but because economy was necessary in order to avert disaster. Their position was analogous to that of a father of a family whose income^ has been reduced from £6 to £4 a week. However generously disposed he may be towards his family, he has to reduce his expenditure. Last year, in the midst of a financial crisis, the Commonwealth Labour Government found that certain reductions of expenditure were inevitable; the pressure of the banks was so great that social services’” had to be curtailed mid wages had to be reduced. The then Premier of New South Wales, Mr. Lang, had to toe the lino with the other State Premiers. He had to subscribe to the Premiers plan ; because the alternative was no pay, another “ Black Friday,” for all people dependent on government payments, he was obliged to force through the Parliament of New South Wales, legislation providing for reductions in Public Service salaries, and the extension of rationing, which reduced thousands of railway employees and other government servants-, to an average wage of £2 a week. Similaraction by other governments was dictated by the gravity of the financial situation-
The circumstances of the present Commonwealth Government are very different. The Prime Minister has stated on several occasions recently that Australia has turned the corner, and that there is every indication of the depression lifting. If that be true, the improvement is not due to anything done by his Government. The trade balance was rectified by the tariff policy of the Scullin Government, and if the financial position of the Commonwealth is now sound, it is because of the actions of that Ministry. In the current financial year, the Go;vernment, being faced with a deficit of approximately £1,468,000, has called upon public servants and members of Parliament to provide £245,000, is taking from the wine and gold-mining industries £74,000, and is reducing the expenditure on the maternity allowance by £60,000. But three times the total of these economies is to be taken from the old-age and invalid pensioners, the most defenceless section of the community. The Government originally intended to reduce all old-age pensions from 17s 6d. to 15s. a week; in other words, the aged and infirm were to bear 70 per cent, of the estimated deficit of £1,468,000. But such was the outcry by all sections of the community against this iniquitous proposal, that the Government, even after the budget had been submitted, was forced at a party meeting to back down and agree to pay 17s. 6d. a week to aged and invalid persons who are solely dependent on their pensions. But the pensions paid to inmates of institutions are to be reduced from 5s. to 3s. 9d. a week, and the total amount of pension received by a pensioner, plus compound interest at 5 per cent., is to become a charge upon a house, the proceeds of an insurance policy, or any other property left by him at his death. In other words, the Government will seize an old person’9 home instead of allowing it to pass to the married daughter or son.
– The married son should support the parent.
– 1 am certain that 98 per cent, of married sons will gladly support their parents if they are able to do so ; but when the basic wage is £3 10s. a week in New South Wales and £3 3s. in Victoria, how can a man with a wife and three or four children contribute weekly towards the upkeep of his aged parents? Many sons have for years supplemented the small pensions of their parents, but because of the reduction of the basic wage they are unable to continue to do so; their earnings are barely sufficient to maintain themselves and their families. Now the Government proposes to seize any property left by a pensioner rather than allow it to be inherited by deserving sons or daughters who for years, probably, have contributed hundreds of pounds towards their upkeep.
The Scullin Ministry was faced with an estimated deficit of £20,000,000, and received an ultimatum from the banks that after the 15th July, 193], no further credit would be made available to the Commonwealth unless it subscribed to the policy embodied in the Premiers plan. Had effect been given to that threat, all public revenues would have had to be rationed, and pensioners and others with claims on the Commonwealth Treasury would have been paid only 12s. in the £1. The Government preferred to reduce the pension from £1 to 17s. 6d. rather than allow such a crisis to develop that it would be unable to pay more than 12s. Accordingly, pensions were reduced by 12£ per cent, and interest by 22^ per cent. But the Labour Government, instead of reducing taxation as the present Government proposes, increased it.
– It did.
– That was preferable to cutting invalid, old-age and soldier pensions as the present Government proposed to do. We made every effort to bridge the gap between revenue and expenditure before agreeing to any cuts, and only after the Prime Minister was successful in bringing the bondholders, banking institutions, and other money lenders into the plan by compelling them to accept a reduction of the interest rates, were cuts in social services adopted. Nevertheless, the pensioners were asked to make good only 7 per cent, of the deficit, and then only when the alternative was national default; whereas the present Government is requiring them to make good 70 per cent, of the estimated deficit of £1,468,000. This deficit is” the result of a deliberate reduction of taxation to appease the wealthier sections of the community. The Lyons Government is conducting a savage attack upon the wages and pensions of a section of the community from which it gets little political support. It has introduced to this House within the last few weeks one bill to reduce taxation and another to reduce wages, pensions, and the maternity allowance. Why is the Government not doing more to 7-educe the interest rate? Many money lenders are not sharing in the general sacrifice. We know that there are persons who will not lend motley at less than 7 per cent.
– The Government of which the honorable member was a member had every opportunity to do that.
– I remind the political neophyte from Macquarie that control of interest rates on mortgages is a matter for the State Parliament. In Queensland, under a Nationalist Government, the Premiers plan, so far as it” related to the reduction of interest rates, was not equitably carried out, insofar as the mortgagor was required to take the mortgagee’ to court and there establish his claim for a reduction of interest. The present Labour Government, however, has taken steps to make the reduction of interest rates compulsory by act of Parliament, instead of requiring the manager or proprietor of a business to apply to the court for a reduction, and, incidentally, expose his financial affairs to the public view. Because some features of the Premiers plan were not equitably enforced, people are still demanding the same rates upon mortgages that they demanded three or four years ago.
The budget submitted to this House a few weeks ago is a rich man’s budget, transferring a larger share of the burden on to the shoulders of the most defenceless section of the community. The AttorneyGeneral (Mr. Latham) asked where the money would come from to fill the gap if we did not adopt this course. He knows quite well, as a responsible member of this Government, that it has created the gap. by remitting taxation to the tune of over £1,200,000, the principal items being £50,000 in respect of primage duties, £350,000 sales tax, and £806,000 in the form of reduced customs duties. The Estimates before the House suggest that our customs revenue this year will be down to the extent of £2,000,000, as compared with last year, but the returns for the first two months of the financial year show an increase in customs collections of £1,541,000. In my opinion, the Government has under-estimated its customs revenue for this financial year. The Attorney-General also suggested that the right honorable the Leader of the Opposition this afternoon had said that there would be increased returns from income tax. I listened attentively to all that the right honorable gentleman said, and, although he pointed to a probable increase from customs revenue, he admitted that there would not be increased collections from income taxation. The customs figures for June, July and August of this year indicate that there will be a considerable advance on the total estimated by the Government. The Attorney-General then went on to say that the Government’s proposals were all a matter of finance, and that implications of meanness or generosity were not involved in them. There might have been some point in his argument if the Government had not varied the relative percentage of the cuts in interest payments and pensions. Under its latest scheme the cut iia pensions has moved up to 25 per cent., whereas the cut in interest payments remains at 22*. per cent. If the Ministry had not reduced taxation more notice might now be taken of the Attorney-General’s pleading that the Government could not find the necessary money to make good this £1,100,000 in respect of invalid and old-age pensions. We should also bear in mind that this Government, is in a much better position to bridge the gap between revenue and expenditure than was the Federal Labour Government during its last year of office, because, in addition to an overwhelming majority in the Senate to pass any legislation which it might send up, it has behind it the sympathetic banking institutions which, in the last election campaign, poured out more money against the Federal Labour party candidates than at any previous period in the history of this country.
– Order !
– The right honorable member for Cowper (Dr. Earle Page) told us this afternoon that we are still facing the crisis. I do not for a moment say that we have left the economic depression behind us; but I believe there is no budgetary crisis of the magnitude that had to be faced by the Scullin Administration, which had arrayed against it the full strength of the money power, a hostile majority in the Senate, and hostile financial interests, some of which would have favoured the rejection of Supply by the Senate, with consequent default, so that the Government would have been forced to appeal to the people and the country would have been handed over to the enemies of Labour. Had it wished, the Scullin Administration could have followed the easy path. Instead, it preferred the manly course - the course approved by the federal executive of the Labour party - and decided to hold on to the reins of office, and do the best under the circumstances for the workers, so that it could place its -policy clearly before the people.
– Order ! The honorable member must not continue to transgress the ruling of the Chair.
– I have no desire to do that, Mr. Speaker. Up to date, this Government has not submitted proposals calculated to cure the economic ills of this country. Its continued policy of deflation will mean an alarming increase in unemployment. We were informed this afternoon by the right honorable member for Cowper that, since the present Ministry assumed office, the figures relating to unemployment in this country had risen from 28 per cent, to 32 per cent., and this, despite the promise made that immediately following a change of government, there would be an appreciable reduction in the number of persona out of work in the Commonwealth.
Reforms in currency, banking and finance must continue to occupy a foremost place in our thoughts if we are to emerge from the economic difficulties which confront not only Australia, but all other countries. When the Federal Labour party first enunciated its policy for monetary reform, it was severely criticized. We were told that we stood for wild inflation and reckless finance. What is the position to-day ? Some of the leading economists and financiers in the world are advocating a modified inflation and higher price levels-
– Order !
– This Government’s policy of deflation and its cuts in the salaries of public servants and payments to invalid and old-age pensioners and others with claims upon the Commonwealth Treasury will not solve our problems. Trade depression and its resulting unemployment have been considerably aggravated by the monetary policy which this ‘Government is pursuing. So enormous is the power exercised by financial institutions that they cannot longer be allowed to remain under private control. Public control is essential. We must have returned to this Parliament a party with a majority that stands for monetary reform. The aim of our monetary policy-
– Order !
– In deference to your ruling, Mr. Speaker, I shall not continue that branch of my argument. Another opportunity will be available at a later date. All I wish to say now is that this Government’s policy would make it impossible for the majority of sons and daughters of aged people to contribute to their maintenance. I have had many examples recently of considerable increase in unemployment in certain branches of our secondary industries which give employment to many thousands of young men and women. Under this Government’s tariff proposals, large numbers of them have been thrown out of work and. as a consequence, their parents will be forced to apply for the invalid and oldage pension. Probably many will be afraid to do so because, if this measure is passed there will always be the fear of a visit to members of their families by some officious policeman, who, armed with a pocket book and pencil, will ask them the most searching questions. Possibly these police officers will visit the factories or other establishments and, in front of other employees, put embarrassing questions to sons or daughters of applicants for pensions. As a result of the policy which I helped to put into operation during the Scullin regime, 220 new factories giving employment to 5,76S persons were opened in Victoria during 1931.
– How many factories were closed ?
– Order ! The honorable member for Barton (Mr. Lane) must cease interjecting.
– Further evidence of the effect of this Government’s tariff policy is to be found in the following statement which appeared in this morning’s Sydney press from Mr. Gordon Bennett, the President of the Sydney Chamber of Manufactures : - -
Austrnliii.il manufacturers have already experienced cancellation and general cutting down of orders in consequence of the latest tariff schedule-
– Order ! I have, on several occasions, asked the honorable member, to confine his remarks to the bill. If I have to do 30 again I shall ask him to resume his seat.
– I protest against the hypocrisy of this Government’s policy. By its discouragement of industry it is throwing thousands of young men and young women on the industrial scrap heap so that its friends, the importers, may secure greater profits. How can we expect the sons and daughters of Australian people to contribute to the maintenance of aged or infirm parents if we do not provide them with lucrative employment? This Government has not done anything to ensure employment for our young men and young women who are coming into the labour market at the rate of 100,000 a year. The. only effect of its policy to date has been to reduce the spending power of the community. It has remitted taxation in the interests, not of the poorer classes, but of the wealthier sections of our people. Why? Simply because those interests stood behind its candidates in the last election campaign. The Government’s policy is evidence of the worst kind of political dishonesty. It is the greatest ramp that has ever been put over the people of this country in the interests of the wealthier and privileged classes, and I am convinced that it will redound to the discredit of the Ministry. It is something of which the people have good -reason to be ashamed and, when they get the opportunity, they will relegate the Government and its supporters to obscurity.
.- An examination of the financial position as disclosed in the’ budget is essential before intelligent comments can be offered as to the necessity or otherwise for further reductions of expenditure in respect of pensions, maternity bonus, payments to the Public Service, payments to members, and bounties. I propose to touch upon the budget as briefly as possible with this purpose in view. The thing which impresses me most in connexion with our financial position is that various governments, Commonwealth and State, have been living beyond their means for the last three years to the extent of over £82,000,000. We were told the other day by the right honorable the Prime Minister (Mr. Lyons) that that unfunded debt is still growing, and that even if the Commonwealth succeeds in “ breaking-even “ this year with the help of the reductions proposed in this bill, and if the Hoover moratorium is continued, the States must inevitably add another £9,000,000 to it, making the total unfunded debt £91,000,000. We have heard a great deal, particularly from the critics of former governments, about what they call the orgy of borrowing which took place a few years ago. We need not pride ourselves that this orgy has ceased, because we are still borrowing in Australia at approximately the same rate as former governments borrowed overseas for public works, the only difference being that to-day wc are borrowing from the banks inside Australia, not to construct public works, but to finance deficits. The public works for which the various governments borrowed in years gone by were often not wholly reproductive. In fact, in some instances, they were regarded as so utterly unproductive that critics of governments described them as white elephants. If the whiteness of the elephant is the measure of its’ unprofitableness, can one imagine a more dazzling whiteness than the continuance of borrowing for a number of years for the financing of deficits? That is the position in which we are to-day. While1in the past, and to a less extent to-day, we”; have provided sinking funds in respect of” money spent on public works, in connexion with this particular obligation - this unfunded debt of £82,000,000- we.’ are finding no money for sinking funds-.. In other words, during the last three years the various governments of Australia have lived beyond their means to the extent of £82,000,000. In these circumstances, all honorable members, irrespective of party, must agree that every avenue of economy must be explored.
One of the most striking features of our present financial position, and one which should influence honorable members in determining their attitude in connexion with the reductions proposed in this bill, is the fact that the Government is depending for the balancing of its budget upon the hope of action by the United States of America in respect of the continuance of the Hoover moratorium. In passing, may I say that I hope events will justify the Government’s optimism, and that the world economic conference, shortly to take place, will provide a solution of our difficulties in this direction. In any case, we can only absolutely depend upon relief in that direction to the extent of £2,000,000, which is the amount we have been let off by Great Britain in connexion with our sinking fund payments last year and again this year.
– I hope that the honorable member will soon connect his remarks with the bill.
– With the greatest respect, Mr. Speaker, I submit that my brief statement of our general financial position is absolutely relevant to the bill, and to a consideration of whether the proposed reductions are entirely justifiable. In conformity with your wishes, I shall be as brief as possible in these remarks, and will more directly connect them with the bill in a very few moments.
The Treasurer has budgeted to spend £54,000,000 this year, if we exclude from this amount the proposed expenditure on our two great business undertakings, the Postal Department and the railways, except in so far as they relate to profit and loss. We find that 80 per cent, of this proposed expenditure can be accounted for under three headings, which are: First, payments arising out of the Great War, which is the largest; secondly, payments to the States, which is the second largest; and thirdly, payments in respect to social services, which is the main subject of this bill. In round figures £43,000,000, or 80 per cent, of our proposed expenditure of £54,000,000 - excluding the two items to which I have referred - are accounted for under these headings. A further examination of the figures shows that payments arising out of the war amount to £19,500,000, in round figures, and include war loan interest and sinking fund, soldiers’ pensions, medical, services and repatriation. There is a welcome drop from £30,000,000 to £19,500,000 under this heading. This is accounted for by relief from overseas payments, which, I hope, will continue; by the lower rate of internal interest brought about by the conversion, and by reduced expenditure on war pensions, repatriation and medical services.
The next largest item to which I shall make passing reference, is the payment of £12,500,000, in round figures, to the States. -The steady growth of this item of expenditure can be regarded with more equanimity than increased expenditure in some other directions, because it only means the transfer of a large sum of money from the coffers of the Commonwealth Government to those of the State Governments. This figure must grow in view of the fact that we have undertaken to provide sinking funds for all future State debts, and these will gradually increase.
I come now to our expenditure on social services, and, therefore, to the principal subject-matter of this bill. The Government proposes to spend this year £10,500,000 on invalid and old-age pensions, and £330,000 on maternity allowances. It has decided to continue the pension at the rate of 17s. 6d. a week to completely indigent pensioners. This is the level to which the pension was reduced last year by the Scullin Government. The Government has also decided to limit to 15s. a week the pension to pensioners with an income of 2s. 6d. a week or over. A pension at this rate will be a reversion to the figure which was in operation in 3923, when the Bruce-Page Government assumed office. It will be remembered that during that year, when revenues were abundant, and times good, that Government raised the pension from 15s. to 17s. 6d. a week and also increased from 10s. to 12s. 6d. a week the amount which a pensioner might earn without a reduction of pension. Two years later, in 1925, when conditions were still prosperous, and the prices of our wool and wheat high, the pension was raised from 17s. 6d. to 20s. a week. When times are good and revenues abundant it is a pleasant and popular thing to increase the amount payable under our social service legislation to the highest limit that we can afford; but when times are bad and. the revenues unequal to the maintenance of existing rates of payment, it is decidedly unpleasant and unpopular for a government faced with the necessity -for economies to reduce such payments to a former level. I have no doubt that the Scullin Government found the duty of making such a reduction both unpleasant and unpopular. Nevertheless, twelve months ago it had to make the reduction, and our voluble friend who has just resumed his seat, the present Deputy Leader of the Opposition (Mr. Forde), assisted in doing that unpopular thing, believing that the need for it was inescapable. I am convinced that the present Government is just as reluctant to make a further reduction as was the Labour Government to make a reduction last year. Speaking for myself, I can say that it is with extreme reluctance that I find myself faced with the necessity of supporting the Government in doing this thing, which it believes it must do.
When the Government first announced its decision to reduce, the pension, in order to clear my mind as to the fairness or otherwise of the proposal, I set out to ascertain the relationship of the present pension and the proposed new pension to the present basic .wage, and also the relationship of the pension to the basic wage in each of the years when pension rates were altered. In this connexion I have obtained some information from the Acting Commonwealth Statistician, which is both interesting and informative. The pension first became payable in 1911. The first increase was made in 1916 by a Labour Government. In 1920 the Hughes Administration made another increase from 123. 6d. to 15s. a week. In 1923 and 1925 increases were made by the Bruce-Page Government, and in 1931 the reduction to which I have already referred was made by the Scullin Government. This year a further alteration is proposed. The statistical information supplied to mc shows that when the pension first came into operation at the rate of 10s. per week, the basic wage was then 46s. 6d. a week, and the percentage of the pension to the basic wage was 21.5. It must bc remembered, of course, that the federal basic wage is intended to support five people, whereas the pension is intended to support one person. We must therefore look at the figures which I am quoting in the light of these facts. In 1916, during the war period, the basic wage went up to 63s. 6d. The increase in the pension to 12s. 6d. a week made the percentage to the basic wage 19.7. In 1920, when the pension was increased to 15s. a week, during the period, when Mr. Watt was Treasurer in the Hughes Administration, the basic wage was 85s. 6d., and its percentage to the pension 17.5. In 1923, when the Bruce-Page Government increased the pension to 17s. 6d. a week, the basic wage was 84s. 6d. and the percentage 20.7, or nearly what it was when the pension was originally granted. In 1925, when the pension was increased to 20s. a week, the basic wage was 85s. 6d. and the percentage reached 23.4. This was the first year in which the amount of pension actually exceeded the percentage of the basic wage that existed when the pension was originally bestowed. In 1931, when the basic wage had dropped to 66s. 7d. a week, and the pension was reduced to 17s. 6d. a week, the percentage was 26.3, or higher than ever before. We now come to this year. The basic wage - and I have referred in each instance to the average basic wage for all the States, as furnished by the Commonwealth Statistician - is 63s. lid. I know that £3 10s. a week is payable under a State arbitration award in New South Wales, but I have been dealing all along with the average federal basic wage over all the States. On the basis of a wage of 63s. lid. and a pension of 15s. a week, which will be granted under the Government’s proposal to pensioners who have some income, the percentage of pension to the basic wage will be 23.4, or exactly the same a3 it was in 1925, when the pension was raised to 20s. a week. The pension of 17s. 6d. a week which will be granted to completely indigent people, will be 27.3 per cent, of the present basic wage, which is the highest percentage on record. It will he seen, therefore, that under these proposals the completely indigent pensioner will receive a higher pension in relation to the basic wage than ever before.
– Is the honorable member trying to prove that the basic wage is too low?
– I arn not. I am simply stating what I believe to be facts. I think it is perfectly fair to show the relationship between the basic wage and the pension in the years in which alterations have been made. Taking that aspect into consideration, and the extent to which some relatives of old persons look to the Government to relieve them of their natural obligations towards their parents, I think that the Government is justified in bringing down the amendments foreshadowed with respect to property, and the obligation of relatives. I realize to the full the truth of the statements of the right honorable the Leader of the Opposition, the Deputy Leader of the Opposition, and other honorable members as to the great difficulty in which some persons find themselves to-day - persons who but for the fact that they are not receiving the wages they formerly received, or that they have no job at all, would be only too willing to assist their aged parents. The bill will not require of such persons anything unreasonable. The proposals of the Government with respect to property qualifications and the obligation of relatives are well worthy of a trial.
The only satisfactory solution of the pensions problem lies in a contributory system, and I hope that before too long a period has elapsed it will be possible for the Government to bring down proposals embodying such a system. Perhaps in view of our poorer circumstances to-day as compared with those which obtained a few years ago, such a scheme may have to be a little less ambitious than that brought forward in 1928 by the Bruce-Page Government. Nevertheless, I believe that a contributory scheme is the only means by which to encourage thrift. Under such a system pensions would be paid to persons regardless of any other savings they may have made. Unfortunately, the position at present is that a pensioner may only own his house and a very little more without being debarred from enjoying a pension or having his pension considerably reduced. That seems to offer a direct incentive to a person to spend money rather than to save it, and to divest himself of his savings in order to qualify for a pension. I have heard of many instances in which persons have deliberately spent money because they realized the comparative futility of saving owing to the fact that such savings as they could make would prevent them from receiving the full pension which they otherwise might enjoy. One instance was brought under my notice by the police magistrate in the electorate which I represent, and is, therefore, absolutely authentic. A couple who had saved over £1,500 realized that if they invested that amount in gilt-edged securities the return by way of interest would be insufficient to bring them in an income equal to that which they would obtain in the form of a pension if they were absolutely without means. When the pension was 20s. a week, this couple’ would have received £2 a week, or £104 a year, whereas had they invested the £1,500 at 5 per cent, it would have returned them only £75 a year. What did they do? They decided that the best thing was to get rid of the money. They embarked on a world tour lasting twelve months; they enjoyed themselves immensely, and returned to Australia possessing practically only the cottage in which they lived. Shortly afterwards they were receiving a pension of £2 per week between them. That has been going on, and is directly encouraged by our present pension system. We all rejoice in the fact that interest rates have come down; but, in view of the lower interest rates, it is difficult to obtain sufficient in the form of interest on savings to enable those in humble walks of life to be independent of a pension. Under these proposals, a couple without any means at all would receive 35s. a week between them, or £91 a year. But such a couple would require to invest no less than £2,275 in Commonwealth consolidated 4 per cent, stock bought at par, to receive £91 a year in interest.
– They could purchase an annuity.
– Yes; but they would have to invest £2,275 in gilt-edged securities at the ruling rate of interest to enable them to draw 35s. a week. How many persons occupying a humble position in life, having reared a family and purchased a home, can save anything approaching that figure? The incentive to spend rather than save must remain while there is a tremendous gap between the small amount of capital which debars from or substantially reduces a pension and the large amount which must be saved in order to be independent of a pension. It seems that to-day the incentive to save is to some extent discouraged. For that reason T trust that as soon as possible this Government will bring forward a contributory system of pensions under which persons from the age of sixteen, or as soon as they commence work, will pay a few pence each week into a fund which will be subsidized by a similar or smaller amount by the employers, and also by the Commonwealth Government, for the purpose of providing pensions in old age. A fund built up in that way would be one from which a man would feel that he could draw his pension knowing that he had helped to provide it. There would not be the slightest suggestion of the stigma of charity, and he would receive a full pension regardless of what he might have saved in other ways. I believe that is the only satisfactory solution, and I trust that the present Government will explore every possible means of providing such a scheme.
Provision is also made in the bill for the parliamentary allowances of Ministers to be reduced by a total of 30 per cent., and those of members by a total of 25 per cent. I am prepared to accept whatever reasonable reduction is made in members’ allowances, so that we may take our fair share in whatever sacrifice has to be made.
– The 25 per cent, is the total by which allowances are to be reduced.
– Yes. No doubt the public generally thinks that the reduction proposed under this bill is actually 25 per cent. In reality, the total reduction of members’ allowances is equivalent to 35 per cent, or 37^- per cent. There is always a considerable difference between an honorable member’s gross and net allowance. Honorable members realize that, in carrying out their parliamentary duties, at least 33 per cent, of the original £1,000 disappears in inescapable expenses. Therefore, the net allowance is about £666, and a £250 reduction in that amount is about 37^ per cent. That being so, I think that we can hold our heads up in the community, feeling that we are taking a reasonable share in the sacrifice that has to be made in the nation’s interest.
The Government also proposes to discontinue the gold bounty until such time as the price of fine gold falls to £5 10s. per ounce. At the present price of gold a continuance of the bounty would be unjustifiable, particularly when we realize that, by means of the double exchange premium which we enjoy - the difference between gold and sterling and sterling and Australian currency - gold has appreciated from £4 4s. to approximately £7 7s. an ounce, or 75 per cent. We have to admit that that increase, which obtains as a result of the exchange, is sufficient greatly to stimulate production in the industry. I am glad, however, that the Government does not propose to abolish the bounty altogether, and that it undertakes to restore it when the price of gold drops to £5 10s. an ounce.
I wish, also, to briefly refer to the Government’s proposal in connexion with the wine bounty. I should like to hear the Minister for Commerce (Mr. Hawker) on this subject, because it is one with which he is well acquainted. I hope that we shall get some information from the honorable gentleman. I understand that the Government proposes to limit the bounty to £98,000. When the export of any commodity increases to such a point that the ratio between the tax imposed to provide the bounty and the bounty itself is disturbed, . owing to that increase in exports, it would be wise, at the beginning of the export season, to definitely fix the amount of the bounty which the special excise tax “will suffice to provide. One important feature” in connexion with bounties of this nature is the effect which they have on internal price levels.
– The honorable member thinks it should be limited?
– I think it would be better, in the interests of those engaged in the industry, if we definitely fixed the bounty at a point which will’ certainly be met by the excise collected. If it can be shown that the special excise collected will be sufficient to pay the full amount of bounty in operation to-day on the whole of the wine likely to be exported this season, of course no action need be taken. In connexion with the butter scheme which bears my name, it has been found necessary, as exports have increased, to reduce the amount of bounty which is paid from the levy collected/ from those engaged in the industry. The same principle must apply in connexion with wine. I merely suggest that it would better serve the interests of the producers of grapes, who provide the raw material from which wine is made, to have a definite amount of bounty -fixed, the payment of which would be a certainty, rather than incur the risk of the bounty being swallowed up in the first threequarters of the exporting season by a tremendous and unnatural rush of exports,” with the object of participating in the bounty before it was absorbed and have no provision for what remained. I have a perfectly open mind on the question, and shall be interested to learn the views of the Minister for Commerce.
J very much regret the necessity for the introduction of this measure, but, believing it to be a sheer necessity, I shall support it.
.- This measure has been expounded clearly and ably by the Prime Minister (Mr. Lyons) and the Attorney-General (Mr. Latham).
The honorable member for Gippsland (M.r. Paterson) developed at some length the question involved in the removal of the incentive to save, represented by the property qualification in our pension system. Despite that, however, there is in this community a large class of people who, through no fault of their own, and, in many cases, with a sense of deep shame, are obliged in their old age to rely for their maintenance on the State. We, on our part, are obliged by financial circumstances to reduce in certain cases the amount that they receive.
I support this measure without any degree of enthusiasm. It is most regrettable that it has to be given effect. It will not be politically popular, and it goes against the humanitarian grain to enact it; but in the circumstances it is inescapable.
The humanitarian line is a very easy one to follow; but the bowels of compassion are not the monopoly of certain honorable members opposite. The sooner inevitable economic ups and downs are taken out of the hands of this House, and definitely linked up with purchasing power, or a contributory system, the better, because the temptation to make political capital out of inevitable economic facts would then be removed.
There seem to be three principal ways in which to approach the question of pensions. The first is that of purchasing power which was covered by the AttorneyGeneral. I also have investigated the figures independently of that honorable gentleman. On the basis of the two principal indexes - either food and groceries alone, or those items, plus all houses - 15s. represents a higher purchasing power than there has been at practically any time since the payment of pensions began. Consequently, on that ground there would appear to be a logical reason for the proposed cut.
The second consideration is that of the pension rates payable in other British communities. In Great Britain, Canada, the Irish Free State and New Zealand, the total pensions burden per head of the population per annum is considerably less than in this country, and in the majority of cases is not much more than half.
The third consideration appears to be that of the financial burden on the country, and the question whether we can continue to pay the rates that have been paid in the past. There is only one pool of income in any community, and out of it must come wages, salaries, interest, the tribute exacted by governments for administration and social services, and the losses on government enterprises. If any one of those factors demands a greater share of the pool than it has had previously, the others must accept less.
The total burden of pensions has been increasing for many years. For the five years which ended with last year, the annual increase amounted to £700,000. In 1924, 33 per cent, of those who, on account of age, were eligible to receive an old-age pension, were drawing pensions. In 1930 the figure, was 40 per cent., and now, I understand, it is nearly 50 per cent. There are 257,000 persons in receipt of old-age and invalid pensions, apart from soldiers’ pensions. Unless the census, which is to be taken next year, discloses a very definite variation in the age distribution of the population, it is calculated that, within a period of ten years, we shall be called upon to find, on the basis of 17s. 6d. a week, a total of from £16,000,000 to £18,000,000 a year in oldage and invalid pensions. Such a burden would wreck our finances and be far beyond any conceivable taxable capacity.
– Is the honorable member forecasting further reductions?
– No; I am explaining the proposed reduction. Notwithstanding any degree of prosperity that we might enjoy, we could not raise by way of taxation an amount sufficient to enable payments on that scale to be made. That is a point which seems to have been overlooked by the Leader of the Opposition (Mr. Scullin), when he launched his attack upon the proposed reduction. The burden of all taxation inevitably falls upon productive industry, and consequently helps to create or to maintain unemployment. That point was taken a few years ago by the General Federation of Trade Unions in Great Britain, which, after three competent persons had investigated the subject for a considerable time, reported on the incidence of high taxation upon employment. That report showed quite definitely that high taxation was opposed to the interests of the workers, because it slowed down trade, stopped activity and initiative, and so had a tendency to keep unemployment at a high level. There is no doubt that the continuing and increasing burden of pensions has been responsible for the increaing burden of taxation in this country in recent years.
For the last two years, old-age. and invalid pensions have absorbed 48 per cent, of the total amount raised in this country by way of taxation, other than through the tariff and excise, that is, from income tax, land tax, sales tax, entertainment tax and death duties, and for the five years preceding, the amount thus absorbed represented 60 per cent. Even now the total estimated disbursement on invalid and old-age pensions for the current year is practically the same as that for the year 1929-30.
From the humanitarian stand-point, the care of the indigent, the old and the sick should be, and is, one of the first duties of the State. It should, I believe, be superseded by only one other consideration, and that is the general good and the welfare of the whole of the community. Undoubtedly, at a time like the present, the welfare of the whole necessitates the cutting down of government expenditure to the lowest possible level in order that our budgets may be balanced, our credit may be high, our interest burden as low as possible, and employment, as a result of the lowering of taxation, at a high level.
The Scullin Government realized the weight of the hurden of pensions. Its method would have solved the financial and currency problem in a totally different fashion. It proposed to attempt, by currency manipulation, to raise the price level to that of 1929. That would have involved a 30 per cent, rise in the price level, and, practically speaking, ‘ a 30 per cent, decrease in the purchasing power of all fixed incomes, including pensions.
The case put up by the AttorneyGeneral, and the note on which he ended his speech, was that, during the years when prosperity was mounting, and the cost of living was consistently rising, the government of the day very rightly raised the pension rate so that it might be in some sort of accord with the cost of living. Granting that, I cannot see any argument against a’ reasonable decline in a time of stress like the present, with the similar object of making the rate accord with the existing cost of living. I cannot understand why the Lender of the Opposition, and other honorable members opposite, have apparently of set purpose ignored the factor represented by the total amount paid by way of pensions. I find it impossible to believe that they can be consistently irresponsible concerning the financial future of this country, lt has been demonstrated that this country could not hope to continue to bear the pension burden that has been carried within recent years.
.- I am opposed to this measure, for the reasons that led me to oppose the principal act when it was introduced in 1931. I realize now, as I did then, that the cutting of wages and social services will not effect that rehabitation in the financial position or create employment to the extent which those who introduced this legislation anticipate. We have been asked on this occasion, as we were on that, to offer some alternative to the reduction of pension payments. The group to which’ I belong, which sat on the cross benches in 1931, put up to the Government of that day a proposal which would have met the position, and we intend to re-submit it now. If accepted, the result would be to distribute more equitably than at present is the case the ‘burden of the indebtedness of this country. I can see no equity in taking from people who have no,t now sufficient on which to live. Had the Scullin Government, when it undertook the conversion of internal loans totalling £560,000,000, effected an additional reduction of 1 per cent, in the interest rates, the saving so made would have been over £5,000,000 per annum. Instead, it saved over £4,000,000 by reductions in pensions and other social services.
Since wages have fallen, to about tho 191-4 level, I submit that interest should be brought down to 3 per cent., the level then obtaining. We have converted our internal indebtedness; allegedly on a voluntary basis, although actually under compulsion. Australian bondholders had, as it were, a pistol placed at their heads; they were told that if they did not convert their holdings voluntarily, legislation would be introduced to compel them to do so. That threat was actually carried out in the case of bondholders with holdings amounting to between £5,000,000 and £7,000,000. I feel compelled to use the word “ repudiation “ when referring to what took place. The Government treated Australian bondholders in that way ; but when we suggested that similar action should be taken in the case of British bondholders we were told that it would be repudiation, and would give this country a bad name. Between 1919 and 1921, Britain repudiated its debts to the United States of America -when the Old Country obtained a reduction from 5 per cent, to 3 per cent, in respect of securities amounting to £900,000,000. For ten years, the rate of interest is to be 3 per cent., and then 3-J per cent, for a further 52 years. Australia has borrowed £370,000,000 overseas at rates ranging from 5 per cent, to 6i per cent., as shown in the budget, and cannot get any reduction of interest. We cannot even get the’ concessions allowed to our allies in the late war, notwithstanding that most of our indebtedness is due to our participation in that war. Britain reduced the Belgian debt by 40 per cent., and the Italian and French debts by 50 per cent., but granted no concession to her own kith and kin, 60,000 of whom laid down their lives, and 72,000 more were made cripples in the interest of the Empire.
Those who urge that some relief should be granted to Australia by Britain are told that they favour repudiation, and would bring disgrace upon their country. If there is any disgrace, it lies with the British Government in that it is not prepared to do for Australia what it has done for Italy, Belgium and France. Were Britain to treat Australia as it has treated those other countries, there would be no need for these unfortunate pioneers, who have blazed the trail and made this country fit to live in, to suffer any reduction of their pension. The Government’s first proposal was to save £1,100,000 by reducing invalid and old-age pensions by 2s. 6d. per week, while a further £60,000 was to be saved by reducing the maternity allowance. These two sections of the community should be exempt from any reductions of expenditure rendered necessary by our financial position. The maternity allowance was introduced by the Fisher Government in 1912 in order to ensure that expectant mothers would have proper medical attention at the most critical period of their lives. Previously, that attention was not always given to the poorer classes of the community. Although the cost of living was considerably less in 1912 than it is to-day,»it was then thought that an allowance of £5 was not too much. Both this Government and the Scullin Government attacked these defenceless people. It is indeed unfortunate that a so-called Labour government should pave the way for a more callous government to deal in this pernicious way with the maternity allowance and invalid and old-age pensions. Under the present proposal, no mother will receive a maternity allowance should the home income exceed £208 per annum. I object to new citizens of this country being brought into the world under a system of charity. It. is well that the people of Australia will have “an opportunity before long to say whether or not they endorse the action of the Government. I feel sure that they will register their disapproval in no uncertain manner. I warn honorable members opposite that of those supporters of the Scullin Government who voted for the Financial Emergency Act and the ‘ reduction of pensions only one from each State has been returned to this House. ‘In this category Queensland is represented by the honorable member for Capricornia (Mr. Forde), Victoria by the Leader of the Opposition (Mr. Scullin), Western Australia by the honorable member for Kalgoorlie (Mr. A. Green), and South Australia by the honorable member for Hindmarsh (Mr. Makin).
– Did the honorable member say that I supported the Premiers plan?
– I did the honorable member an injustice in saying that he supported the Premiers plan. He did not do so. I meant to say that the honorable member for Hindmarsh is the only supporter of the late Government again returned to represent a South Australian constituency. ! warn honorable members opposite of what is in store for them. History has a happy knack of repeating itself, and I feel sure that it will do so again. I am at a loss to account for the silence of some honorable members opposite who made such a fuss about reducing the invalid and old-age pensions, even going so far as to say that they would be willing to wreck the Government on this issue. The honorable member for Macquarie (Mr. John Lawson), the honorable member for Barton (Mr. Lane), the honorable member for Lang (Mr. Dein), and the honorable member for South Sydney (Mr. Jennings) are silent. The honorable member for Perth (Mr. Nairn) and the honorable member for Denison (Mr. Hutchin) are silent. “Will no honorable member opposite speak in defence of the old-age pensioners? Do they imagine that because the Government has relented, owing to the pressure brought to hear upon it by means of letters and telegrams of protest from various organizations, some of which support the Government, a victory has been won for the pensioners? No. The circumstances of these unfortunate people are to he made more difficult than under the previous reduction of 2s. 6d. per week. In all probability if these proposals are adopted a greater amount will be taken from them, and many will lose their pensions altogether as a result of their children being forced to maintain them. Many of the pensioners occupy the homes in which their parents reared their families, and although they may desire to hand the properties down to their children, under this bill the old homes will he mortgaged to the Government. After the death of the pensioner the homes will be sold by the Government to recoup itself for the amount paid as pension. So far as this measure relates to invalid and old- age pensions, it should be entitled “Invalid and Old-age Pensioners Mortgagee Bill,” and in the committee stage, I propose to submit an amendment for the alteration of the title accordingly.
If other sections of the community have been called upon to suffer an income reduction of 22-£ per cent., some of them are able to afford it. The pensions reduction last year at the flat rate of 2s. 6d. really meant a reduction in many instances of 50 per cent. Numbers of pensioners own property apart from that in which they live, and even when they were receiving pensions as low as 5s. a week, these had to be reduced by 2s. 6d. a week. In some cases, pensions amounting to 10s. were reduced to 2s. 6d., showing that the ‘ pensioners were, in many cases, subjected to a far greater reduction than 22^ per cent. A similar anomaly will he created under this bill.
Much has been said about the reduction of the cost of living, and reference has been made to the present index figures being comparable with those for 1920. In that year, the pension amounted to only 15s. a week. To he consistent, we should bring our high salaries and allowances down to the 1920 level. Members of this Parliament then received £600 per annum, hut there is no talk now of reducing their salaries to that figure.’ Members of Parliament, as well as many other sections of the community, have not made sacrifices comparable with those that the Government is now calling upon’ invalid and old-age pensioners to make. To what extent have the Governor-General and judges of the High Court suffered on account of the depression? Judge Lukin, I understand, receives a pension of £1,000 per annum from the Queensland Government, and he also gets a salary of £2,500 per annum as a member of the judiciary. This is the judge who, in 1928, said that the timber-workers should receive a basic wage of about £3 15s. per week ; but when he was asked to accept a salary reduction of 22$ per cent., his replY was an emphatic “ no.” He was not the only member of the federal- judiciary who took up that attitude. If reductions are to be enforced”, let the Government show a little initiative, and tackle the “ tall poppies,” instead of the unfortunate section of the community, who have difficulty in eking out a hare existence.
How would honorable members opposite like to live in a room of the type available at a. rental of 6s. a week? An old-age pensioner has informed me by letter^ that his expenses amount to 14s. 1C%1. a week, and under the proposed reduction, he would have 1-Jd. a week left for the purchase of tobacco ! The son of a pensioner interviewed me during the week-end, when he learned that the Government proposed to take a mortgage over the homes of those in receipt of the pension. This man has built a house on a five-acre block of land belonging to. his father. The land is in the name of the father, who lives with his. son. If the father continues to draw the pension - which is more than likely, because his son is Unemployed, and has six children - under the present bill, the Government will have a lien upon the home, although the son has been entirely responsible for the improvements placed upon the land. Honorable members will realize that in this and similar cases, great hardship will, be inflicted. Consider the case also of parents who have sons with their own domestic problems and who are probably receiving only the basic wage. Under this measure the insult is hurled against the sons that they will not help support their parents, and the Government threatens to take action in the courts of law calling upon them to show cause why they should not contribute towards their parents’ support. In many instances, a son has built a home for his mother on land purchased by him, and he has put the land in his mother’s name; but when his mother dies, this callous Government will have a lien on the property.
Honorable members on both sides of the House are aware how unfair is the present law to pensioners who have property, apart from that in which they live, which is not revenue-producing. For pension purposes, the value assessed by the local governing authorities is taken as a guide. If that exceeds the statutory limit of £400 for one or £S00 for husband and wife, no pension can be paid. We know, however, that local government valuations are not always the true market value. Those municipal clerks, whose salaries are fixed .upon a percentage of die revenue, are not likely to write down property values. Instead of making the provisions of the act harsher, we should liberalize them, particularly in regard to property ; at any rate, we should not base the pension upon property unless it is revenue-producing. During the regime of the Bavin Government, in New South Wales, a person entitled to an old-age pension owned a house, the tenants of which were on the dole and could not pay their rent. The old mau could get neither rent nor dole, and still had to pay his municipal rates. Many people are the owners of land on which there are no houses, but on which they have to pay rates. One old-age pensioner has to lay out £29 a year to meet municipal charges, although he gets no income from the land itself. He is not entitled to a pension of more than 4s. 6d. a week. The proposal in this bill that the value of the property which the pensioner owns is, after his death, to be assessed against the pension practically amounts to a further tax on thrift. In the past we have exhorted people to be thrifty, and immediately they have taken our advice we set to work to penalize them and deprive them of social services which we would give to them if we were a little more liberal in our consideration for those who are the real backbone of the country.
I am wondering why honorable members who support the Government are not speaking to this bill. Is it that they arc pledged to reduce the taxation of those who provide their election expenses and must make good the loss of revenue at the expense of another section of the community and the most defenceless - the invalid and old-age pensioners? We have to pay a huge rate of interest to overseas bondholders; but, apparently, we are not to get the money with which to do so from those who can afford to pay it, and must get it from those who are not in a position to do so. I have said in the House before, and I say it again -
For whosoever hath, to him shall bc given, but whosoever bath not. from him shall be taken away even that he hath.
Discussion has centred upon the responsibility of a son to keep his parents. Does any honorable member know of children who are in a position to maintain their parents and are not doing so? I do not know of any. On one occasion the Deputy Commissioner of Pensions said to me, “It is remarkable that the people who apply for oldage pensions in your district reach such m great age before they do so “. The explanation is simple. Before the present depression any morning at 5.30 o’clock, men between 75 and 80 years of age .could he seen toddling to their work. These old men are only too willing to work for their living while it is possible for them to do so; they arc only too glad to be independent of the pension. In other cases, sons and daughters with no large family encumbrances maintained their parents. They believed in accepting their responsibility to repay the fathers and .mothers for what they had done for them in the past. If is only common humanity, a characteristic of the majority of the citizens of Australia I am glad to say. The present depression, however, has brought about an intolerable position. Sons and daughters who were maintaining their parents have been thrown out of employment, or have only intermittent employment, and are mo longer in a position to maintain their parents. The latter have been obliged to throw themselves upon the resources of the nation, and apply for pensions. Despite the fact that many of these sons and daughters maintained their parents for a number of years, and in some cases built homes for them and had the deeds vested in their names, the Government now assumes power to place a lien over those homes when the parents die. Can that be termed justice? No, it is buccaneering; piracy of the first order.
Let me turn to another phase of the matter. This country is not receiving the justice to which it is entitled. Let us say to the people overseas to whom we owe money that we have been forced into the position of repudiating our own bondholders, cutting wages and reducing social services and we expect them to reduce their rates of interest on our indebtedness. It will be remembered that, in 1923, Great Britain figuratively held a revolver at the head of the United States of America, and demanded and received a reduction of interest on its indebtedness to that country. The Prime Minister has exhorted us to “Follow England”. Let us do so and declare our inability any longer to pay high rates of interest. Let us demand a moratorium until interest rate3 are placed on a fair basis.
-Order! I ask the honorable member to connect his remarks with the bill. .
– With all due respect to you, sir, I point out that this is entitled a financial emergency bill. I am showing how we can improve our finances per medium of the overseas bondholders, instead” of by sacrificing our pensioners. In that way I hope to connect my remarks with the bill and to pacify the Chair.
– Order ! I hope that the honorable member doe3 not think he can be humorous at the expense of the Chair. If so, he will quickly discover his error. The honorable member will immediately cease referring to foreign loans and deal with the bill that is before the House.
– I did not intend to be humorous at the expense of the Chair, but—-
– Order ! The honorable member will proceed with his speech on the second reading of the bill, or resume his seat.
– I have here a circular, a copy of which has, no doubt, been received by every other honorable member. It is from the Federal Council of the Blind, Deaf and Dumb Institutions of Australia, and it sets out the hardships which will be inflicted on these people by the operations of the bill. These unfortunate individuals are endeavouring to learn a trade in an institution, so that they may be able to eke out an existence. It is most pitiful to watch blind people at work basket making and so on. The circular reads -
It has been contended that there has been a decrease in the cost of living during the past few years, in answer to which we respectfully point out that there has been a more than corresponding decrease in the means oi adding anything in addition to the pension. Blind people as a class are severely handicapped in the pursuit of a living, as illustrated by the fact that of the 1,400 blind people in the Commonwealth of an employable age, only 500 of them are now being employed at the respective blind institutions.
I realize that, from the point of view of the money lender, much can be said in favour of the Government of the day pursuing this policy. But nothing can be said for it from the humane stand-point. Allegedly, we are living in a Christian civilized age. Surely we should be capable*? of extending a little human sympathy to those who are down-trodden. The Government is oppressing unfortunate people merely because it desires money to pay interest on securities held by people who already have more than enough of the good things of life. During the war many of those persons took advantage of the occasion to invest money in war loans for the purpose of raising money to kill human beings, but to-day they refuse to invest in loans to create useful reproductive work. Their contracts are held to be sacrosanct. In effect the Government says “Do not touch them. They belong to us. You can cut old-age pensions, allowances to expectant mothers and sustenance to workers, but you cannot touch this wealthy class, because they sent us to Parliament to look after their interests “. They are the people who pay the expenses of the United Australia Party, the United Country Party, and other organizations of honorable members opposite which employ so many aliases.
– We have no tin hares here.
– The honorable member’s supporters caught the wrong people when they dabbled in tin hare inquiries. They did not expect tot catch Mr. Hordern, Mr. Barry, and the State Minister for Justice, Mr. Martin, and his friends. If the amendment moved by the Leader of the Opposition is not carried, I shall endeavour to improve the bill at the committee stage.
– I quite appreciate the difficult position in which the Government is placed in preparing its Estimates in this time of national crisis. Any one who has been connected during the last two or three years with the commercial life of the community, engaged in preparing estimates, will recognize the collossal task which confronted the Government in bringing down its budget. Its difficulties have been intensified by varying tariffs, the increasing and alarming rates of exchange and interest overseas, the necessity to make economies, and also the position arising from the Ottawa Conference. The Government is entitled to credit for endeavouring to do -the right thing for the nation. In times of stress governments introduce unpopular legislation in either increasing taxation or depriving the public of national benefits. The Prime Minister (Mr. Lyons) has ‘introduced this bill in an endeavour to balance the budget. Governments are expected to make conservative estimates. ^ This Government has acted wisely in refraining from reducing the - pensions of returned soldiers. Its action in that respect will meet with the approbation of the returned soldiers, their organizations and their dependents throughout Australia. I regret that the Government has seen fit to reduce further the salaries of the federal public servants, and I suggest that at the end of six months, if the financial position improves, as I believe it will, this reduction should be restored. The customs revenue is likely to be greater than anticipated. Most of the warehouses throughout Australia are depleted of stocks, and merchants are holding small supplies mainly because of the prohibition on imports, the uncertainty in regard to exchange and the fear of governmental action or legislation. Now that the position of Australia is more stabilized, I believe that, notwithstanding the high rate of exchange, imports will flow to this country ; that the revenue from the customs will become more buoyant, and that at the end of twelve months the Estimates will be exceeded by some millions of pounds.
This legislation proposes to review to some extent the old-age and invalid pensions. I am pleased that the original amount of 17s. 6d. will be retained for those who have no other means of support. I have followed the old-age pension movement with interest since its inception in the South Sydney electorate some 30 years ago, when the father of the movement, Canon Boyce, of Redfern, first publicly agitated for its innovation. The pension system has conferred a great benefit upon many pioneers of this country, who, without it, would have been in a state of privation and distress. It is the most Christian-like social legislation that has ever been enacted in Parliament. The system has been accepted by the people of Australia as part and parcel of our social life, and we must be careful to exercise discretion in administering it, so as not to interfere unduly with Australian sentiment. Many of our old-age pensioners suffered privations in order that they might give to Australia worthy sons and daughters. Many of them played their part in the industries of this country, and others were prominent in the sporting fields. Their children proved to be among the finest soldiers that the world has ever seen. Our old pioneers who are in distress should receive the sympathetic consideration of this Parliament. There may be many abuses under the system, but, at the same time, we must be careful how we tackle them so that undue hardship on the pensioners and their families can be avoided. In the South Sydney electorate there are something like 4,500 pensioners and 55,500 electors. Those electors, by means of taxation, have to contribute, directly or indirectly, towards the pensions, and, as a matter of equity, it is necessary that we should ensure that the money provided for that purpose does not flow into wrong channels. Many of the old-age pensioners still have a feeling of pride and independence, and in carrying out these proposals we should not add to their misfortune by giving publicity to their private affairs. Some reference has been made to certain utterances respecting old-age pensioners in the electorate of South Sydney. Let me say that at no time have I used the helpless old-age pensioners as a means of political propaganda, andI hope that the time will soon arrive when the pensions system will be free altogether of party politics. I shall vote for the second reading of the bill, and at the committee stage will take the responsibility of reviewing any clause which I consider may inflict undue hardship so that it may be eradicated.
Debate (on motion by Mr. Makin) adjourned.
Assent to the following bills reported : -
Appropriation (Works and Buildings) Bill 1932-33.
High Commissioner Bill.
Motion (by Mr. Lyons) proposed -
That the House do now adjourn.
.- I regret that I have to take this opportunity to refer to a matter upon which a discussion was denied the members of my party this afternoon because of the action of the Attorney-General (Mr. Latham) who after delivering his own speech on an urgent and important public matter, moved that the question be now put.
– On a point of order, I wish to know whether the Minister for Health (Mr. Marr) is in order in asking his supporters to leave the House so that a quorum will not be present.
– No point of order is involved.
Motion (by Mr. Marr) put -
That the question be now put.
The House divided. (Mr. Speaker - Hon. G. H. Mackay.)
Question so resolved in the affirmative.
Question - That the House do now adjourn-put. The House divided. (Mr. Speaker - Hon. G. H. Mackay.)
Majority . . 23
Question so resolved in the affirmative.
House adjourned at 11.2 p.m.
The following answers to questions on notice were circulated: -
M’r. Archdale Parkhill. - The answers to the honorable member’s questions are as follow : -
Petrol and Oil Prices
Works at Canberra during the past three years?
Premium on Gold Export.
What is the amount of premiums earned by the Commonwealth Bank on this country’s gold exported by the bank?
Institute tor Scientific and Industrial Research.
How many married couples are engaged at the Institute for Scientific and Industrial Research, Canberra,and what are the respective salaries paid to them?
In view of the fact that the cost of living has been declared to have been reduced in Canberra, and the allowances of residents at government hostels cut down, does the Government intend to reduce the tariff charges at these places in keeping with such reduction inthe cost of living; if not, why not?
I am now in a position to furnish the following reply: -
I am now in a position to inform the honorable member as follows: -
Australian Production : Value
The answers to the honorable member’s questions are as follow: -
Cite as: Australia, House of Representatives, Debates, 21 September 1932, viewed 22 October 2017, <http://historichansard.net/hofreps/1932/19320921_reps_13_135/>.