House of Representatives
4 April 1935

14th Parliament · 1st Session



Mr. Speaker (Hon. G. J. Bell) took the chair at 2.30 p.m., and read prayers.

page 721

KING’S JUBILEE

Joint Address

Dr. EARLE PAGE ( Cowper- Acting

Prime Minister) [2.31]. - I move -

That the following joint address be presented to His Majesty the King: -

To the King’s Most Excellent Majesty:

Most Gracious Sovereign :

We, the Senate and the House of Representatives of the Commonwealth of Australia in Parliament assembled, tender to You,- upon the occasion of the twenty-fifth anniversary of your accession to the Throne, an expression of our continued loyalty to the Throne and Person of Your Majesty and to Her Majesty the Queen.

With feelings of pride we review the fruitful course of Your Majesty’s reign, and we recall with thankfulness the many blessings which have contributed to the advancement of our Commonwealth and of the status of the Empire among the Nations of the world.

We rejoice that the miracles of the new age have brought the parts of your realm into closer contact. Since Your Majesty assumed the Throne the means of communication have been accelerated to a ‘remarkable extent by invention, and the close co-operation between the component parts of the Empire, which is so earnestly desired, has been thereby greatly facilitated.

With the encouragement and guidance of Your Majesty Australia has won the status of nationhood. Gladly arc we bearing the responsibilities which that dignity entails, and devoutly do we hope that in fulfilling the obligations of nationhood . we will confer added benefits on the Empire.

We deeply appreciateYour personal interest in our advancement, and we recall with pride that members of Your family have been intimately associated with the principal events of our history since Your Majesty and Her Majesty the Queen visited our continent on the occasion of the opening of the First Parliament of the Commonwealth of Australia. The visit of Your son, the Prince of Wales, immediately after the termination of the war and the presence of Your son the Duke of York at the establishment of Canberra as the Seat of Government of the Commonwealth of Australia are fresh in our memory.

These visits, and the recent tour of Your son, the Duke of Gloucester, have done much to emphasize and promote the unswerving . loyalty and devotion of British peoples to Your Majesties and the indissoluble unity of the countries comprising Your realm.

With the other partners in the British Empire we join in thanking Almighty God that Your Majesty, has been spared so long to guide its destinies. It is our fervent prayer that Your Most Gracious. Majesties may continue for many years to enjoy the peaceful progress of the Empire and to promote the welfare and happiness of Your subjects, and through them the peoples of the world.

As honorable members are aware, the 6th May next will be the twenty-fifth anniversary of the accession of His Majesty the King to the Throne. It is fitting that we should seize this opportunity to express in the form of an Address to His Majesty the feelings of loyalty and devotion which animate us. I know full well that the proposal will commend itself to honorable members.

It is hoped that it will be practicable to have this address prepared in a suitable form, signed by the presiding officers of Parliament, and despatched in time to enable it to be presented to His Majesty not later than the 6th May.

I have extreme pleasure in submitting the motion.

Mr SCULLIN:
Yarra

.- Honorable members who sit on this side of the House join in the congratulations that are to be offered by the Commonwealth Parliament to His Majesty the King on the occasion of his Jubilee, and express the earnest hope that he may be granted health and strength to reign for many more years to come.

Mr BEASLEY:
West Sydney

– While supporting the proposed address, my colleagues and I consider that it omits to mention certain facts of which His Majesty the King should be informed. This is an important address and it marks an occasion that occurs only rarely. For that reason; it should not contain anything that might be likely to mislead His Majesty in regard to the conditions that exist in Australia and what is happening on the other side of the world. The reference to the great advancement that has been made in this country may give a wrong impression. Many of the subjects of His Majesty the King who reside in the electorates that my colleagues and I represent are not at the moment making great advancement, bat, on the contrary, are suffering severely. The existing conditions, even in the Federal Capital Territory, do not boar out the statement to which I have referred, and in that respect I contend that the matter has not been put in a proper light. Honorable members, of course, have not had an opportunity to consider in what terms they would wish the address to be drawn up, and can merely do their best in the circumstances in which they find themselves. I believe that the majority of the people of Austrafia would wholeheartedly endorse the statement of the position, made by the Prince of Wales, at a gathering attended by the Prime Minister recently, when His Royal Highness said : -

The regrettable evil effect of the economic disturbance on overseas farmers and the mercantile marine must be regarded as tem porary, in view of the plentitude of raw material overseas and the poverty and malnutrition in Britain. We anticipate accepting all the Dominions can send us, without detriment to British producers.

His Royal Highness has always been most outspoken in the expression of his views upon current economic problems.

Mr Holloway:

– What he has said about Great Britain is true of Australia.

Mr BEASLEY:

– That is the point which I stress. I consider that we should act more straightforwardly towards one another. If we were more frank, and were to refrain from covering up deficiencies by the use of diplomatic language, the problems with which we are confronted would be more readily and satisfactorily adjusted. We ought to grasp the opportunity presented by this message to establish direct contact with His Majesty the King.

Mr Lane:

– Say “ God save the King “, and pass the motion.

Mr BEASLEY:

– The honorable member for Barton must admit that the mere expression of loyalty to the throne will not solve the problems in which the subjects of His Majesty, not only in Great Britain, but also in the dominions, are so closely interested. When we find ministers in Great Britain entering into all kinds of pacts and agreements with foreign countries to the detriment of the King’s own subjects in this country, this message to His Majesty, on the occasion of his jubilee, offers us the opportunity to make direct reference to the fact.

Mr Nairn:

– This should be a message of congratulation, not a moan.

Mr BEASLEY:

– The address proposed to be sent is not confined to congratulations. It seems to have a suggestion of a certain kind of propaganda. The declaration that developments are proceeding in this country is incorrect. The Acting Prime Minister might reasonably have consulted us in the preparation of this address. We could then have faced together the problems and difficulties of both Australia and Great Britain, knowing that the King himself, like the Prince of Wales, is interested in the subject, as is shown by his public utterances from time to time. More frankness and straightforwardness in this matter are desirable and must be exhibited if wo are to solve the great problems that are facing Great Britain and her dominions at the moment.

Dr EARLE PAGE:
Acting Prime Minister · Cowper · CP

in reply - I do not propose to discuss the subject, but I acquainted the Leader of the Opposition (Mr. Scullin) and the Leader of the New South Wales Labour party (Mr. Beasley) some days ago of the intention of the Government to submit this message and indicated its general terms. I regret very much that the remarks just made by the honorable member for West Sydney (Mr. Beasley) were not made to me privately before the terms of the address were presented to the House.

Question resolved in the affirmative.

Mr SPEAKER:

– In accordance with the provisions of the Standing Orders, I shall forward to His Excellency the GovernorGeneral the resolution agreed to by honorable members with a request that it be presented to His Majesty the King.

page 723

BRITISH MEAT IMPORTS

British Government White Paper, No. 4828

Dr EARLE PAGE:
Acting Prime Minister · Cowper · CP

– I lay on the table of the House the following paper : -

Moat imports into the United Kingdom - Copy of British Government White Paper, containing statement of the views of His Majesty’s Government in the United Kingdom.

To enable copies of the paper to be made available to honorable members the consent of His Majesty’s Government in the United Kingdom was sought to reprint it as a paper for Parliamentary purposes in Australia. A reply has, this morning, been received from the representative in the Commonwealth of His Majesty’s Government in the United Kingdom conveying the text of a cable from the Under Secretary of State for Dominion Affairs in the following terms : -

Please inform Acting Prime Minister that we- agree to reprinting in Australia of Command 4828, provided source is acknowledged and a statement inserted to the effect that reproduction has been made with the permission of the Controller of Stationery Office, United Kingdom.

I move -

That the paper be printed.

Question resolved in the affirmative.

Mr E F HARRISON:
BENDIGO, VICTORIA · UAP

– Can the Acting Prime Minister say whether it is a fact that, as one result of the negotiations now proceeding in London between representatives of Australia and Great Britain, permission has been granted to export chilled beef to Great Britain on a commercial basis, instead of on an experimental basis as hitherto?

Dr EARLE PAGE:

– Unfortunately, I cannot give any information to the House on this subject at the present time.

page 723

TARIFF BOARD REPORTS

Mr WHITE:
Minister for Trade and Customs · BALACLAVA, VICTORIA · UAP

– I lay upon the table reports and recommendations of the Tariff Board on the following subjects. -

Canned Oysters

Cloth known as Camel Hair Cloth and/or imitation Camel Hair Cloth.

Condensers, n.e.i., and fixed Electrolytic Condensers.

Crustaceans preserved in tins or other air-tight vessels.

Discs for Agricultural Implements

Flax and Linseed

Flour Milling Machinery and Cereals Milling Machinery

Iron and Steel Plate and Sheet (exceeding 0.135 inch in thickness).

Iron and Steel Sheet up to and including one-eighth inch in thickness.

Leather Manufactures, n.e.i.: Leather cut into shape, &c. ; Harness and Buggy Saddles.

Sulphate of Copper

Ordered to be printed.

page 723

MATERNAL AND INFANT WELFARE

Dr EARLE PAGE:
Acting Prime Minister · Cowper · CP

by leave - The opportunity presented by the Jubilee of His Majesty the King offered a favorable occasion to launch a campaign to include both maternal and infant welfare and to combine these in a national memorial to be offered by the people of Australia as a jubilee gift to the King and Queen. This suggestion was submitted to His Majesty who graciously approved.

The State governments had previously been requested to consider measures for the practical application of this proposal, and many representative bodies of women throughout Australia hadmade comprehensive and valuable suggestions. These proposals were all considered by the Federal Health Council, which formulated a detailed scheme.

The Government has now decided to appeal to the people of Australia for funds to make this gift to the King a memorable occasion, and to provide funds on a scale large enough to bring the practical proposals’ into effect immediately. This appeal will be inaugurated to-night by His Excellency the Governor-General, who will be supported by the Acting Prime Minister (Dr. Earle Page), the Minister for Health (Mr. Hughes), the Leader of the Opposition (Mr. Scullin), and the Leader of the New South Wales Labour party (Mr. Beasley). This is a movement which is without any political colour. It is being launched by the leaders of each of the parties on behalf of the people of Australia as one community. The State governments are cooperating.

I express the earnest hope that the people of Australia will respond magnificently, as they always do in any cause involving considerations of humanity. There can be no cause more worthy of support than that now under attention.

The Commonwealth Government has decided to initiate this fund with a contribution of £50,000.

page 724

AUSTRALIAN SECONDARY INDUSTRIES

Newspaper Report of Speech by Deputy Leader of the Opposition.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– Has the attention of the Minister for Trade and Customs been drawn to a report appearing in the Melbourne Age, of Monday last, which purports to give an account of a speech delivered recently in Melbourne by the Deputy Leader of the Opposition (Mr. Forde), in which the newspaper stated that the . honorable gentleman said-

Mr Scullin:

– Does the honorable member vouch for the correctness of the report ?

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– I propose to quote from the report of the Melbourne Age which purports to be correct.

Mr Scullin:

– I rise to a point of order. The Standing Orders provide that an honorable member may not quote from a newspaper report unless he can vouch for its correctness. I ask that the honorable member for Macquarie be required to vouch for the correctness of the report he proposes to quote.

Mr SPEAKER:

– The point of order is sustained. Can the honorable member vouch for the correctness of the report ?

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– I do so pro forma.

Mr SPEAKER:

– Honorable members can frame their questions, as a rule, without making long quotations from newspaper reports which practice, I think, is usually followed for the purpose of conveying, rather than of asking for, information.

Mr Forde:

– The honorable member is asking the question at the instigation of the Minister.

Mr SPEAKER:

– Order !

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– I ask the Minister for Trade and Customs whether his notice has been directed to the report to which I have referred, in which it is alleged that the Deputy Leader of the Opposition stated at a meeting of the Trades Hall, Melbourne, recently, that the great secondary industries of Australia were being shockingly butchered and were being made vulnerable to the competition of countries which employ black labour extensively, and that the only means of egress from the economic morass in which it was alleged that Australia found itself-

Mr SPEAKER:

– Order ! I remind the honorable member that in the framing of a question it is not in order to make long quotations from speeches delivered by other honorable members. He may ask his question without making use of a quotation obviously intended to direct attention to what has been said by the Deputy Leader of the Opposition.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– I shall conclude by asking the Minister whether he is in a position to make an unequivocal refutation of the statements of the Deputy Leader of the Opposition?

Mr WHITE:
UAP

– Yes, my attention was drawn to the newspaper statement to which the honorable member has referred. Appropriately enough, the date on the newspaper was the 1st April, so I take it that the report must have been a hoax. I appreciate the fact that the Leader of the Opposition (Mr. Scullin) required that .the honorable member who asked the question should vouch for the accuracy of the report, because I cannot believe that the Deputy Leader of the Opposition could have made those statements. I have no statistics available regarding the butchering industry, but I know that the secondary industries in every State of Australia have been able to provide increased employment since the demise of the Labour Government. In the last quarter of 1931, when unemployment was at its peak-

Mr SPEAKER:

– I remind the Minister that, in answering a question directed to him, he is not entitled to reply to the statement of an honorable member as published in the newspapers. I draw attention to Standing Orders Nos. 93 and 94 in relation to the asking and answering of questions, especially Standing Order No. 94, which provides that in answering a question a member shall not debate the matter to which it refers.

Mr WHITE:

– I am sure that honorable members who have read the newspaper report referred to will agree that it was merely a patter of political platitudes.

page 725

QUESTION

IMMIGRATION

Mr MAKIN:
HINDMARSH, SOUTH AUSTRALIA

– Can the Acting Prime Minister give the House any information regarding the reported statement of the Prime Minister that he was prepared to allow migration to Australia to he resumed if certain trade advantages were given to Australia by Great Britain? Is the report correct, and will this House be given an opportunity to review the proposal before a decision is made, so that we may take what steps are necessary to safeguard .the employment of our own people?

Dr EARLE PAGE:
CP

– The honorable member has asked me a number of questions, but I presume he wants to know whether the Prime Minister said that if a market were provided for the products of Australia, we would be prepared to welcome immigrants from Great Britain who would become producers in Australia. The Prime Minister made that statement, and he also said that he would not advocate the resumption of immigration until the economic position of Australia was such that it was able to absorb its own unemployed.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– Seeing that there appears to be some uncertainty regarding the conditions under which aliens are admitted to Australia, will the Minister for the Interior make a statement on the matter ?

Mr PATERSON:
Minister for the Interior · GIPPSLAND, VICTORIA · CP

– Four or five years ago, when, owing to the depression, there was a great deal of unemployment in Australia, restrictions were imposed on the entry of aliens. With respect to aliens other than Asiatics, the rule is that an immigrant who has made good in this country, and is in a position to support a family, may bring in his wife and minor children. In some instances, where a son is over the age of 21, and would not be admitted in the ordinary way under the rule, permission has been granted for him to enter so that the family may not be broken up. Also, an alien in Australia whose financial position is deemed to be satisfactory, may bring in his sister or fiancee. Aliens who do not come within either of these classes may enter the country only if they bring £500 of their own capital. It is not sufficient that £500 should be provided by relatives already here.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– How is the department to know whether it is new capital or not?

Mr PATERSON:

– Inquiries are made, and it is fairly easy to discover whether the money belongs to the immigrant or not.

Mr CLARK:
DARLING, NEW SOUTH WALES

– In view of the conflicting expressions of opinion and mislead. ing statements on the matter, will the Acting Prime Minister give an assurance to the House that the Government will not adopt a policy of immigration, in view of the number of unemployed in this country, until such time as the unemployed are absorbed?

Dr EARLE PAGE:

– The Government’s policy in regard to this matter has been very definitely and fully set out.

page 726

QUESTION

MELBOURNE AIR PORT

Mr FAIRBAIRN:
FLINDERS, VICTORIA

– -Has the attention of the Minister for Defence been drawn to a report in to-day’s press that the Shell Oil Company’s Dragon Rapee, when landing at Melbourne yesterday, sustained damage, apparently as a result of the unsuitability of the Essendon aerodrome? In view of this further proof of the unsuitability of the ground, will the Minister renew his efforts to come to some arrangement with the Victorian Government for the development of the Fishermen’s Bend site as an airport for Melbourne?

Mr ARCHDALE PARKHILL:
Minister for Defence · WARRINGAH, NEW SOUTH WALES · UAP

– I have seen the newspaper report to which the honorable member refers; but I am not convinced that the accident was due to the inadequacy of the arrangements at the Essendon aerodrome. Nevertheless; I remind the honorable member that I have already stated my favorable view of the Fishermen’s Bend proposal, and now that political matters are more settled in Victoria, I shall take up the subject again with the Government of that State.

page 726

QUESTION

POSTAL DEPARTMENT

Temporary Employees

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

– Is the Minister repre senting the Postmaster-General aware of the practice in the Postal Department of dismissing temporary employees just before they complete twelve months’ service, thus depriving them of a fortnight’s accrued leave, which would be their due if they remained for the full twelve months; if so, will he take steps to put an end to it?

Mr HUNTER:
Minister without portfolio representing the Postmaster-General in the House of Representatives · MARANOA, QUEENSLAND · CP

– I am not aware of what the honorable member describes as a practice; but I shall make inquiries, and furnish him with information later.

page 726

QUESTION

RETURNED SOLDIERS’ TRAMWAY PASSES

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– It is the custom, when limbless soldiers and others who are in possession of tramway passes, go into the military hospital in Sydney for treatment, to forfeit their passes upon entry so that when they are discharged from the institution they must re-apply for their passes, and they are put to considerable inconvenience while waiting for the application to be granted. Will the Minister for Repatriation suggest to the Government of New South Wales that the hospital authorities should hold the passes, while ex-soldiers remain in the hospital, and restore them upon their discharge ?

Mr HUGHES:
Minister for Health · NORTH SYDNEY, NEW SOUTH WALES · UAP

– I was not aware of the fact mentioned by the honorable member, and I shall certainly make representations to the Government of New South Wales as he suggests.

page 726

SALES TAX PROCEDURE BILL

Mr FORDE:

– In view of the great1 importance of the Sales Tax Procedure Bill to the general public, will the Acting Prime Minister say whether there is any truth in the rumour that the Government proposes to drop the measure, because of the strong opposition to it which developed in the House yesterday?

Dr EARLE PAGE:
CP

– The Government’s course will be seen during the progress of the proceedings of the House.

page 726

QUESTION

BLIND PENSIONERS

Mr NAIRN:

– I ask the Assistant Treasurer whether it is a fact that, under the regulations which govern the granting of pensions to blind persons, a blind person may, without affecting his pension, carry tea for sale from door to door, but, if he carries other goods, is liable to losehis pension, or may sell newspapers from a stall, but, if he sells matches, is again liable to be deprived of his pension. Will the Minister see if those eccentricities do exist under the regulations, and, if so, will he have the regulations subjected to a general overhaul ?

Mr CASEY:
Assistant Treasurer · CORIO, VICTORIA · UAP

– I cannot believe that the position is as suggested by the honorable member, but I shall look into it and advise him later.

page 727

QUESTION

TREATMENT OF AUSTRALIAN ABORIGINALS

Sir Donald CAMERON:
LILLEY, QUEENSLAND · UAP

– Has the attention of the Minister for the Interior been drawn to a further article by Mr. T. Anderson, the Norwegian journalist, appearing in yesterday’s Melbourne FI Herald under the heading “ Unofficial Swoop on Territory Urged”? If so, is the Minister able to make any statement ?

Mr PATERSON:
CP

– My attention was directed to the article in the Melbourne Herald referred to by the honorable member. In it I notice that among other things Mr. Anderson stated that the Commonwealth Year-Boole showed that some 19,000 odd half-castes were to be found in the Northern Territory, and blandly inquired how they got there. As a matter of fact, the population of 19,500 referred to by the Year-Book really includes full-blooded aboriginals as well as half-castes. I do not know whether Mr. Anderson is aware that some 80 per cent, of the mixed bloods born to-day in the Northern Territory are the progeny of half-castes and half-castes, and that only a very small percentage are the progeny of white and black. The statement made in the Herald by this gentleman is really another indication of very loose handling of facts.

page 727

QUESTION

ANTI-WAR RESOLUTION

Mr BRENNAN:
Minister without portfolio assisting the Minister for Commerce · BATMAN, VICTORIA · UAP

– Assuming that the Acting Prime Minister has noticed that the Canadian Parliament has unanimously passed a resolution denouncing war as a means of settling international disputes, I desire to ask him whether he will consider the passage of such a resolution through this House. I think I can confidently assure him. of the support of the Opposition although not authorized to do so.

Dr EARLE PAGE:
CP

– In common with every other part of the British Empire, Australia desires peace at all times, if it can be obtained with security.

page 727

QUESTION

ELECTORAL ROLLS

Alleged Stuffing

Mr LANE:

– Has the attention of the Minister for the Interior been drawn to u statement made in Smith’s Weekly, of the 30th March, that in nine of the metro politan electorates 22,000 names were removed from the rolls during the month of February, of which 16,000 were removed by objection and without transfers having been made to any other electorate ? In view of the fact that a large percentage of these enrolments is made in the last week before an election, will the Minister instruct the electoral officers to. take special precautions in regard to enrolments on the supplementary lists, in which most of the stuffing of rolls takes place?

Mr PATERSON:
CP

– The Chief Electoral Officer is fully apprised of the position, and steps are being taken to keep the rolls as clean as possible.

page 727

QUESTION

INVALID AND OLD-AGE PENSIONS ACT

Adequate Maintenance Provisions

Mr JAMES:
HUNTER, NEW SOUTH WALES

– Seeing that section 22 h of the Invalid and Old-age Pensions Act inflicts undue hardship upon invalid adults who are living with their parents - in which case the section considers that they are being adequately maintained - and seeing also that the Government has repealed section 52 m, which called upon people to contribute towards the cost of pensions of their relatives, will the Government consider the issuing of a regulation making the same allowance in relation to the income of parents who have adult invalid children in their homes, as was made under section 52 m to persons who were called upon to contribute towards the pensions of their relations ?

Mr CASEY:
UAP

– The point which the honorable member now raises by question was raised by him in the course of the debate on a bill in the House recently. I cannot add anything more to the reply which I made to the honorable member at that time. I do not think there is any inherent connexion between adequate maintenance under section 22 h, and section 52 m to which the honorable member has referred.

page 727

MELBOURNE AND METROPOLITAN BOARD OF WORKS

Sewage Farm Cattle

Mr FISKEN:
BALLAARAT, VICTORIA

– Has the attention of the right honorable the Acting Prime

Minister been directed to a report in yesterday’s Melbourne Argus of a full meeting of the Melbourne and Metropolitan Board of Works, at which Commissioner Ward is reported to have advocated the export of the board’s sewage farm cattle now that the board is debarred from selling them locally? Will the right honorable gentleman assure the House that steps will be taken to prevent this suggested export of suspected diseased beef, which can do nothing ‘but add to the difficulties of our meat export trade?

Dr EARLE PAGE:
CP

– I have not seen the report mentioned by the honorable member, but I can assure him and the House . that the Department of Commerce will do everything in its power to ensure the highest possible quality of meat being exported from Australia.

page 728

QUESTION

UNEMPLOYMENT

Commonwealth Responsibility

Mr JENNINGS:
WATSON, NEW SOUTH WALES

– Has the attention of the Acting Treasurer been drawn to a statement reported to have been made by the Acting Premier of Tasmania relating to Commonwealth responsibility in connexion with unemployment? If so, will he give the House particulars of the amounts allocated, and the proposals made by the Commonwealth Government this year for giving employment in Australia?

Mr CASEY:
UAP

– I have seen a headline with reference to some such statement having been made by the Acting Premier of Tasmania, but I cannot say that I am aware of the contents of the paragraph. As regards the second part of the honorable member’s question, I think I can best refer him to a table that was, by leave of the House, included in Hansard during the debate on the Works Bill on the 15th March last, in which a total of just over £6,500,000 under various headings was set down as being available from loan, revenue, and trust funds for works under federal auspices in this financial year.

page 728

QUESTION

WAR PENSIONS

Mr GARDEN:
COOK, NEW SOUTH WALES

– Is the Minister for Repatriation aware that the Pensions Department in New South Wales deducts 12s. 6d. a week from the pensions of returned soldiers for their keep whilst they are inmates of the Prince Henry Auxiliary Hospital? Does the Minister approve of the practice? If not, will he consult with the Acting Treasurer (Mr. Casey) with a view to having it discontinued ?

Mr HUGHES:
UAP

– My answer to the first part of the question is No, and to the second part is Yes.

Mr LAZZARINI:
WERRIWA, NEW SOUTH WALES

– Will the Minister for Repatriation institute immediately an inquiry to ascertain, first, the number of returned soldiers throughout Australia who are drawing pensions in any shape or form, and who are not actually in need of them, and, secondly, the number of returned soldiers who were discharged from the army as disabled when on active service, and who are now in dire need, yet cannot get a pension ?

Mr HUGHES:

– The honorable member has set me rather a hard task. His suggestion would involve an inquiry into the circumstances of every returned man. I see the point he desires me to note, but I am afraid the machinery at the disposal of my department will not enable me to cover so much ground. If the honorable gentleman wishes to know whether I approve of a position where those who do not need a pension can receive it and those who are in need of it cannot receive it, I assure him I do not.

Mr Lazzarini:

– The department is doing that sort of thing every day.

Mr HUGHES:

– I am not aware that that is so. However, I will refer the question to the department and see what can be done about it.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I ask the Minister for Repatriation if it is the policy of the Repatriation Department to adhere to the pensions policy which has been adopted by practically every one of the belligerent nations in the last war that pensions are payable solely in respect of war disabilities suffered by soldiers, and that the economic conditions of such soldiers are not taken into account in determining the right to receive or hold a pension?

Mr HUGHES:

– The principle upon which the system of pensions rests in that the pension should be proportionate to the disability ; it Has no relation to the circumstances of the individual apart from his disability.

Mr GANDER:
REID, NEW SOUTH WALES

– Will the Minister for Repatriation ascertain how many returned soldiers applied for pensions and were refused, and how many applications for increases of pensions were granted, during the last twelve months?

Mr HUGHES:

– I shall obtain the information asked for by the honorable member.

Mr MULCAHY:
LANG, NEW SOUTH WALES

– On the 20th March last, I asked the Minister for Repatriation a question dealing with applications for pensions by soldiers suffering from tubercular complaints. I pointed out that such applications were refused on the ground that the complaints were not due to war service, although, seeing that these men when they enlisted did not suffer from such complaints, it is obvious, that they must have contracted them as the result of war service, and I asked the Minister if he would instruct the Repatriation Department to show more sympathetic consideration to such applicants. The Minister has not replied to that question. Is he prepared to do so now?

Mr HUGHES:

– I shall certainly do rs the honorable member suggests. There should be a uniform practice in regard to this matter, such practice resting on the foundation of justice to the man. The honorable member need be under no misapprehension that it is my desire to see that soldiers suffering from tubercular complaints and others who are suffering from war disabilities are treated with sympathy as well as justice.

page 729

QUESTION

ARNHEIM LAND GOLD DEVELOPMENT COMPANY

Mr BLAIN:
NORTHERN TERRITORY

– In view of the report by the Commonwealth Government Geologist, Dr. Woolnough, on the holdings of the Arnheim Land Gold Development Company, will the Minister for the Interior inform the House as to what action the Government intends to take in this matter?

Mr PATERSON:
CP

– The Government has not yet considered what action, if si ny, it will take.

page 729

QUESTION

HOUR OF MEETING

Motion (by Dr. Earle Page) pro. posed -

That the House at its rising adjourn until 9.30 a.m. to-morrow.

Mr BEASLEY:
West Sydney

. Will the Acting Prime. Minister (Dr. Earle Page) advise the House as to what is intended with respect to the sittings of the House? He acquainted me more or less privately as to what he had tentatively in mind in this respect, but it would be more helpful if the House were informed fully on this matter so that honorable members would be better able to approach the business before the House.

Dr EARLE PAGE:
Acting Prime Minister · Cowper · CP

[3.17 J. - in reply - In order to accelerate business, it is the Government’s desire that the House should meet to-morrow at 9.30 a.m. and continue sitting up to an hour which will give honorable members sufficient time to catch to-morrow evening’s train from Canberra. On Monday the House will meet at 11 a.m., but there will be no sitting on Saturday.

Question resolved in the affirmative.

page 729

QUESTION

SHIPPING FREIGHTS

Mr JAMES:

– In view of the agitation now being made in this matter by the Australian Overseas Traders Association, from which, I understand, a deputation recently waited on the Acting Prime Minister, will the right honorable gentleman inform the House whether under the agreement covering the sale of the Australian Commonwealth Line of Steamers, it was stipulated that protection would be given to Australian primary producers against any increase of freights ? If that be so, will the right honorable gentleman negotiate with the present owners of these vessels with a view to seeing that this guarantee is adhered to ? .

Dr EARLE PAGE:
CP

– There is a clause in the agreement between the company which purchased the Australian Commonwealth Line of Steamers and the Commonwealth Government of the nature referred to by the honorable member. However, the point which is at present agitating the minds of shippers of products from Australia is whether they can secure a reduction of freights. There has been no suggestion that freights are to be increased. Thus the point raised is a matter for negotiation apart altogether from the agreement mentioned by the honorable member.

page 730

QUESTION

QUESTIONS WITHOUT NOTICE

Dr EARLE PAGE:
CP

– I intimate to honorable members that any further questions without notice that they may wish to ask must be deferred until to-morrow.

page 730

PAPERS

The following papers were presented : -

International Agreements (Treaties, Conventions, &c. ) respecting Commercial Relations, which affect the Commonwealth of Australia - List prepared by the Department of External Affairs.

Arbitration (Public Service) Act - Determinations by the Arbitrator, &c. - 1935 -

No. 1 - Postal Electricians Supervisors and Foremen’s Association, PostmasterGeneral’s Department, Commonwealth of Australia.

No. 2 - Fourth Division Officers’ Association of the Trade and . Customs Department.

No. . 3 - Postal Overseers’ Union of Australia.

page 730

LOAN (FARMERS’ DEBT ADJUSTMENT) BILL 1935

Message recommending appropriation reported.

In committee (Consideration of Governor-General’s message) :

Motion (by Dr. Earle Page) agreed to-

That it is expedient that an appropriation of moneys be made for the purposes of a bill for an act to authorize the raising and expending of certain sums of money to provide for the grant of financial assistance to the States in the making of payments to or for the benefit of farmers, and for other purposes.

Resolution reported and - by leave - adopted.

Second Reading

Debate resumed from the 21st March (vide page 242), on motion by Dr. Earle Page -

That the bill be now read a second time.

Mr SCULLIN:
Yarra

.- Among the outstanding problems confronting Australia to-day are the sad plight of the unemployed and the desperate position of our primary producers. They are of paramount importance, and, in my opinion, the one has a direct relation to the other. The Labour party has constantly affirmed that the right of the farmer to have living standards secured to him is equal to that of any other section of the community. On many occasions we have put forward pleas for decent living conditions on behalf of the unemployed. We advance the same plea on behalf of working farmers. . I consider that the lots of these two sections are interwoven.

The first effect of the depression in Australia was the reduction of the purchasing power of the farmers, caused by the drop that occurred in the prices of primary products. The immediate result was the cancellation of orders for machinery, plant and many other commodities, and that led to the rapid growth of unemployment in our factories. If the farming industry could be placed upon a sound basis, we should go a long way towards the absorption of the workless in industry. That being the case, I approach this subject from the point of view, not only of the working farmers who are in a desperate plight, but also of the many thousands of others who are in a similar position.

Rural rehabilitation figured very largely in the last election campaign. It is a very fine phrase. It is alliterative as well as high-sounding, and it sounds particularly well when used in an election speech. But I am disappointed at having found that the proposition which we now have before us is not rural rehabilitation, but merely debt adjustment. Debt adjustment, of course, may form a part of a comprehensive rural rehabilitation policy, but it is not rural rehabilitation. In my opinion it does not comprise the most important part of any plan to enable the farmers to carry on their undertakings successfully.

The census taken last year shows that there are 260,000’ farmers in Australia. The Acting Prime Minister (Dr. Earle. Page) informed the House during his speech on the motion for the second reading of the bill that provision was being made for some assistance to be given to approximately 30,000 farmers - less than one-eighth of the total number. The average amount of assistance to be given to even that small number is only £400 apiece. Therefore, the discrimination that will be exercised in the application of this scheme will be enormous. The debts of one out of every eight farmers will be partly adjusted, while those of the other seven will remain without adjustment of any description. Included in that seven will be many who are in need. The disappointment will be widespread, and the heart-burnings considerable. I have noticed that one State has passed legislation to implement - to use a term that is much favoured nowadays - this scheme. In that law the South Australian Parliament has provided that every application for relief shall be published in the Gazette. Those whose claims are rejected, because their position is hopeless,- will also have that hopeless position advertised, and in consequence the last remnant of their credit will disappear. I fear that the discrimination that will be necessary in an attempt of this sort to deal with a debt problem, with a sum of only £12,000,000, will probably precipitate many bankruptcies.

Mr Beasley:

– They may want that to occur in some cases.

Mr SCULLIN:

– I do not know that any one would designedly bring that about; but I am afraid that, inadvertently, it will be brought about, and that the victims will include many industrious farmers who are real triers, probably of as good a class as any on the land today, and, perhaps, much better than those by whom they may be displaced.

The debts of the wool-growers and wheat-growers combined amount to approximately £300,000,000. I make a rough estimate and say that other farmers probably owe £200,000,000, including indebtedness to the States as well as to private lenders. The sum of £12,000,000 is not equal to one year’s interest paid by the wool-growers and wheat-growers of Australia. Under the bill, a grant will be made to the States from a loan that will be raised. That grant will be free of interest, the Commonwealth’s contribution towards the interest liability being £400,000 a year. The wool and wheat industries alone pay an interest bill of approximately £14,000,000. Therefore, the yearly contribution of the Commonwealth will be £1 for every £35 paid by those industries. That shows what a drop in the bucket this proposal is in connexion with the whole problem, of rural rehabilitation.

The second report of the Wheat Commission shows that the debts of 45,000- wheat-growers amount to £136,000,000,. an average of approximately £3,000.. This grant will not provide even £300 for each wheat-grower.

Mr Nock:

– But they have some assets.

Mr SCULLIN:

– I am speaking of the assistance they are to receive in proportion to their debts. I do not deny that they have some assets. I hope that in the majority of cases the value of the assets is equal to the debts. This assistance represents about one-tenth of what the wheatgrowers owe, and they constitute only one-sixth of the farming community; consequently, a very small minority of the primary producers are affected.

The purpose of the bill is to adjust some of the debts of a minority of the farmers. The gift of £12,000,000 is to be spread over three or four years. I would point out that the wheat bounty represented in four years, exactly the same amount, and that that was an annual bounty to only one rural industry. There is nothing in the bill to show that the principal creditors, the mortgagees, are to be called upon to make any contribution. The secured creditors are in a very privileged position, and they will be made more secure by this disbursement of public funds. In many cases their moribund debts will be revivified by the strengthening of the position of those who owe them money.

The Acting Prime Minister quoted examples of compositions that have already been made, to illustrate the method to be employed in the expenditure of this grant. I assume that they were chosen examples, and were not the worst that the right honorable gentleman could find. What do they show? The

State and sundry unsecured creditors accept some reduction, but the loans of the mortgagees remain intact.

The first case cited by the right honorable gentleman was that of a producer whose total liabilities amounted to £5,146. The adjustment reduced them by £1,336, to £3,810. How was that reduction effected? The State Government provided £600, and unsecured creditors accepted 10s. in the £, totalling £439. The merchant who sold a tractor to the farmer repossessed it and received £50 in cash, the liability of the farmer on that account being reduced by, £296. The Crown provided practically one-half, and the unsecured creditors two-thirds of the amount remaining.

In the second case the original liability was £7,929, and the liability after adjustment was £7,447, a reduction of £482. That will not put the farmer on his feet. It was made up by the Crown providing £276 and the unsecured creditors accepting 7s. 6d. in the £. The mortgage of £4,700 is not touched. If these cases are typical, and I assume that they are or they would not have been cited, this proposal will not assist to rehabilitate our rural industries, but the money will be frittered away with little beneficial result.

I have endeavoured to ascertain what is being done by the State governments with the object of disbursing this money. The Government of South Australia was the first to pass legislation on the subject. Under its measure for debt adjustment, the secured creditors are not called upon to make any concessions. They may come in voluntarily if they choose to do so, or they are free to remain aloof. Unsecured creditors are not compelled to come in, either. They are required to call a meeting of creditors and, of course, the majority will rule, and the minority will be bound to act accordingly. If storekeepers and others are to be asked to accept 5s. or 10s. in the £1 from a debtor, why should not the mortgagee be compelled -at least to reduce the interest rate on the mortgage as a contribution towards the relief of a problem on which the Commonwealth is using public money with a view to maintaining farmers in production? I gathered from a statement made by the Acting Prime Minister, in the course of his second-reading speech, that secured creditors with a good margin between the amount of the mortgage and the value of the asset are in such a satisfactory position that they are not being called upon to contribute towards the settlement of the problem; but I suggest that if the Commonwealth and State governments do not stand behind the distressed farmers, and the mortgagees attempted to foreclose on all their securities with the result that properties were thrown on the market almost en masse, the margin of security, even at present day valuations, would at once shrink tremendously. Because the Commonwealth Government is coming to the help of the farmers by the granting of bounties, subsidies and the like, the value of the assets of the mortgagees is being substantially maintained and they should therefore, be brought into the scheme of debt adjustment in some way.

The Government of New South Wales has brought down a bill to provide f or the disbursement of the money to be made available to it by the Commonwealth Government, which, in effect, is an amendment of the Farmers’ Relief Act, although it will subsequently be known as the Farmers’ Relief Debt Adjustment Act. Under that legislation a board may call a meeting of creditors and if a composition is agreed upon the board may direct the Rural Bank to make advances to the farmer to discharge the whole or any part of his debts, or to guarantee interest on the mortgage at such rate as may be agreed upon. Under the existing law, provision is made that all debts, whether secured or unsecured, must be ascertained. If the amount of them is in excess of the assessed value of the property they are placed in a suspended liability account and do not bear interest during the operation of the stay order. Those provisions may seem to be satisfactory, but some very harassing conditions are attached to the granting of relief to farmers in New South Wales. In the cases where supervisors are sent out to properties, they receive a fixed percentage of the total earnings of the farm during the period of their supervision; but the unfortunate farmer is in the position of a man with the bailiffs in. Yet we talk grandly about preserving the dignity of the tillers of the soil, who have been described as the backbone of the country. That is the existing position, and I cannot see that much alteration will be made in it by reason of the grant of money under this measure.

The Government of New Zealand has ako passed legislation for the adjustment of rural debts under which mortgages are brought under notice. The bill as originally introduced into the Parliament of New Zealand contained some very good features, but I am sorry to say that the Dominion Government made a sudden somersault, no doubt in consequence of the pressure of big moneyed interests, with the result that the best features of the bill were jettisoned. Under the New Zealand measure a debt adjustment commission is provided for, with a court of appeal. After consideration is given to a case a stay order may be granted by the court and a budgetary period of five years provided for in which the farmer is required to work under supervision and is allowed living and working expenses. At the end of the five-year period his position is again examined. Under the bill as originally introduced a mortgagor’s equity was granted up to 20 per cent.; but that provision was thrown overboard, anc! other vague provisions inserted for some kind of compensation in the case of properties taken over. I cannot understand the exact effect of the amendments, but they certainly fell far short of the original intention of the Government.

In approaching the subject of debt adjustment, one aspect is often overlooked which should be considered. Some debts due to-day on farm properties were incurred, not as the result of legitimate expenditure necessary to carry on the farm, but because the owner of the property bought more land to add to the size of his holdings. Many farmers who had snug, well secured, and paid-off properties, were not content with their position, but reached out for more land. In the case of farmers with young sons for whom they desired to make provision to enable them to remain on the land and not drift into the cities, it was praiseworthy for the fathers to seek to acquire more land, and I offer no criticism of their action; hut I know of farmers who bought two or three adjoining farms, so that they could make a bigger income from the then high prices of wheat and wool. The result was that at the price of mortgaging their original holding up to the hilt, they acquired an area that was much larger than any one man needed to occupy in order to make a very good living. A question we should consider, therefore, in dealing with the problem of debt adjustment is how far we should adjust debts on arable land held by individual farmers in excess of their legitimate requirements. This, I submit, is a fair consideration, which I do not think has been kept in mind by the Government in determining its procedure.

I am in absolute sympathy, and so I believe are all the honorable members who sit behind me, with the desire of the Government to lift the load of mental worry and financial debt from the men on the land ; but we should have been asked to give general consideration to this subject many months ago without reaching a decision upon it at that stage. The members of State parliaments should also have been invited to take this course. Following upon that general discussion by the various parliaments, a conference of Commonwealth and State representatives should have been held to form concrete proposals, having regard to the circumstances that had been revealed through the general discussions. But instead of taking that course, the Government, apparently, suddenly conceived the brilliant idea, just before the election, of making £12,000,000 available to the States without considering in any way the conditions governing its disbursement. The result of haphazard action of that kind, of course, will be that in a year or two after the money has been spent, we shall be faced with similar problems to those which now confront us.

Mr Lane:

– Like Oliver Twist, the farmers will come hack for more.

Mr SCULLIN:

– Under this measure £12,000,000 is to be made available to the State governments, which are to be given practically a free hand in dealing with it. No attempt has been made to secure uniformity in the expenditure of the money. I do not say that we should tie the State governments hand and foot, leaving them no latitude whatever; but I firmly believe that some attempt should have been made to ensure the introduction of fairly uniform legislation in the various State parliaments to govern the disbursement of this money. At least some fundamental principles could have been laid clown. In 1931, when the financial emergency legislation was introduced, providing for the reduction of interest, not only on bonds, but also on private mortgages, an agreement was reached as to the general basis of operations, although the matter relating t;o mortgages was purely a State concern. A conference of Commonwealth and State Ministers was called and subsequently a legal committee representing the Commonwealth and State governments was requested to draft bills for submission to the State parliaments in accordance with the views ascertained at the conference. The measures so drafted were later presented to the various parliaments and, although variations were made in certain cases, there was a considerable degree of uniformity. At least there was a general recognition of the principles to be followed. We are handicapped in dealing with this measure. We may be satisfied with the methods adopted by one State in expending the money, but quite dissatisfied with the methods adopted by another State, but we shall not be able to refuse a~ grant to one authority without- also refusing it to the other. We are being forced to grant this money although we remain in the dark as to how it will be expended. We are in a cleft stick.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– Uniformity was not secured under the Premiers plan.

Mr SCULLIN:

– There was certainly uniformity to a large extent in the provisions for the reduction of interest. Some State governments took the responsibility of departing from the general scheme, but, at least, the general lines of the plan agreed upon were carried into effect.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– South Australia brought the banks into the scheme, but found afterwards that it did ‘wrong in doing so, and it had to leave them out.

Mr SCULLIN:

– I do -not want to be sidetracked into a discussion of the operations of the banks, but I do not know that the State did wrong. The banks undertook to make reductions in some eases equivalent to, and in others even greater, than those suggested under tho Premiers plan; but subsequently they tried to go back upon that agreement. Up to date the banks controlled by British interests have entirely failed to live up to the conditions laid down, and some other banks only took the action required of them because public opinion forced them to do so.

I make it quite clear that I am not opposed to the granting of relief to farmers, but am favorable to it. I contend, however, that greater consideration should be paid to the methods by which the money granted will be disbursed, seeing that it is public money. Many difficulties, of course, present themselves. For instance, there is the problem of capital adjustment. I remind honorable members that the capital debt load or burden upon a property is only felt each year to the extent of approximately one-twentieth of the total burden. Yet we are striving, almost in the depth of the depresson, to adjust capital debts. We should really concentrate our efforts upon using all available sinews of war to help the farmer to continue his work tinder reasonable conditions in the hope that subsequently we may be able to adjust his capital debt burden. If the general community, apart from the farmers, were enjoying prosperous times and good prices were ruling, we might be able to tackle the tremendous problem of capital debt adjustment; but under existing conditions we can give the most effective relief to the farmer by reducing his current expenditure and contributing towards his current receipts from year to year.

Mr Hutchinson:

– Is that to be done by a reduction of the tariff?

Mr SCULLIN:

– No; not by a reduction of the tariff, which is not a burden on the farmers at all. Honorable members talk about the increased cost of agricultural machinery because of the tariff, as if that were responsible for the farmers’ troubles. Why, the farmers have ot been able to buy any machinery for years past!

Mr Hutchinson:

– The “wool report emphasized the burden of the tariff on the farmer.

Mr SCULLIN:

– The real burden on the farmers - and this is borne out by the wool report - is the burden of interest, a fact which honorable members opposite do not wish to emphasize. A substantial cut in the- rate of interest would do infinitely more for the producers than would any scheme we can devise for reducing their capital indebtedness. The report of the Wool Committee stated that there were small growers whose interest commitments represented as many pence per pound on the cost of producing wool as they paid pounds per cent, on the money they had borrowed. In other words, if they paid 5 per cent, interest it would be equivalent to 5d. per lb. on the wool produced. An illustration was given in the report showing that where 6£ per cent, interest was paid, the interestamounted to more than 6id. per lb. on the cost of producing the wool, and that report was presented to Parliament at a time when the price of wool was 7d. or 8d. per lb. Yet honorable members mouth complaints about the tariff, seeking to blind the farmers and the community to the fact that the real trouble is excessive rates of interest. Every student of this problem knows that no industry can pay a rate of interest greater than the annual increase of capital. To attempt to pay more is to waste capital, and the annual increase of capital in respect of farming has not averaged 5 per cent. The only reason for the ability of money-lenders to exact high rates of interest from the farming community is that men have put their life savings into the purchase of farms, going in debt for the unpaid purchase money, or for the means to work the land, and have never expected to get from the land interest on their capital as well as a living. I know that rates of interest are coming down, but they must come down further yet. We must face this problem, and not attempt to bolster up the position by feeding a small sum every now and then to the hard-pressed farmers. I am not out to destroy the money-lending section of the community, because I know that many who belong to that class are &s poor as the farmers themselves. When we were going into the question of the reduction of interest on government bonds we learned that many bondholders were in receipt of incomes less than the oldage pension. However, we must face the fact that interest rates must be reduced if industry is to lift its head.

The report of the Wool Committee stated that a reduction of the rate of interest would benefit the small grower very considerably, and it added that the rate of interest in Australia had fallen slowly and reluctantly. That is true. One honorable member asked about the report of the Wheat Commission. That report shows that the interest bill of more than half the growers is equal to 7d. per bushel on the cost of production, while on one quarter of the growers it exceeds ls. per bushel. In many cases interest payments represent half the total cost of production.

The South African Parliament has passed a Farm Mortgages Interest Act which, though it does not, perhaps, go far enough, shows that the authorities in that country at least realize that high rates of interest are at the root of this trouble. Under the act the Government pays a subsidy to the farmer to enable him to meet interest charges. The subsidy paid amounts to the excess of interest over 3-J per cent., but the subsidy itself does not in any case exceed li per cent. For instance, if the rate of interest is 5 per cent., a subsidy of li per cent, is paid to the farmer by the Government. The effect is that the farmer pays 3£ per cent. If the rate of interest is 6-§ per cent., the Government pays li per cent, which it raises by taxation, and the cost to the Government, in respect of that transaction, is nil. The effect of this is that that interest is reduced to avoid tho tax. Since that act was passed two years ago the rate of interest has fallen considerably, so that it should be possible now to go even further than it provides for.

We should ask ourselves what benefits are likely to accrue to the farmer as a result of this legislation. £12,000,000 i? to be distributed, and most of this money will go direct to certain creditors. Is will not add. to the capacity of the farmers to cultivate their land, to harvest their crops or even to feed their families. It will confer, in fact, no benefit on the farmers whatever, except to the extent that it may reduce their interest bill.

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

– Very few farmers are paying any interest now, in any case.

Mr SCULLIN:

– The amount each farmer wall receive out of this grant is so small that it can make very little difference to his future prospects. The bill deals with only a part of. the problem. The total primary production of Australia in 1933-1934, leaving out wool, was. valued at £142,000,000, of which £44,000,000 worth, or less than one-third of the total, was exported. I mention that in order to emphasize the importance of the home market, and to point out that there is no need to wait for a world recovery in order to do something for the primary producers in respect of that part of their produce which is absorbed by the home market. If we include wool, the total value of our primary production was £206,000,000, of which £101,000,000 worth was exported, while £105,000,000 worth was consumed locally.

Mr Nock:

– According to those figures the value of the wool clip is £64,000,000. As a matter of fact, it is nothing like that.

Mr SCULLIN:

– I have’ quoted the latest figures available from the Commonwealth Statistician. They are for the year 1933-34, and if the honorable member thinks they are wrong his quarrel is with the Statistician’s Department, not with me. There is no reason why the home market cannot he improved. Leaving out wool, more than two-thirds of our total primary production is sold in Australia. The Labour party and, indeed, members of all parties, have always stood for the principle that the primary producers are entitled to a homeconsumption price that will give them an adequate return for their labour, just as the worker is entitled to receive a fair basic wage. “We should devote ourselves to the improvement of the home market We must adopt methods of organized marketing so that the farmers will not bc robbed of their just returns. The problem cannot be solved by passing measures of a nature designed to keep off the corns of the Government’s particular friends who are exploiting the farmers.

There are two principal ways of assisting the primary producers. The first is to improve the home market, and the best way to do that is to increase employment in Australia. The workless army does not provide a good market for our produce. If they could be given employment the market would expand until it could absorb an increased quantity of primary produce at a profitable price to the farmer. If we can find more employment we shall increase the purchasing power of the community, and thus increase its power to absorb primary products. That is a fundamental fact in the consideration of this problem.. There are great difficulties, I know, brought about by world conditions. For instance, some of the nations of the world are still on the gold standard. In order to gain an idea of how world prices have been affected in relation to gold let us consider the case of wheat. Before the depression wheat was sold off the farm in Australia at an average rate of five bushels for a sovereign ; to-day it is necessary to sell 20 bushels in. order to get a sovereign. Before the depression the price of wheat expressed in gold was approximately 4s. a bushel, whereas now it is ls. a bushel. That indicates the nature of the problem we are up against. I suppose the price of wool in terms of gold is at present from 4d. to 5d. per lb. It is clear, therefore, that we must turn our attention to the Australian market, and we must stop jabbering so much about the cost of the tariff. We must develop our secondary industries in order to provide markets for our own primary products. We must find money for public works in order to improve the spending power of the community, and establish an Australian ‘market for primary produce. If we provide a good Australian market, with a satisfactory Australian price, the primary producers will be able to shift some of the burden of debt, provided we give them assistance from year to year until they get on their feet again.

It matters not what economic problem we are considering, we are always brought back to the necessity for banking and monetary reform. That problem must be grappled with, and I believe that before long public opinion will force it to the front. The Commonwealth Bank must expand, and there must be utilization of national credit to provide cheaper money so that greater assistance may be granted to industry generally in Australia, and to the primary industries in particular.

Serious attention must be given to organized marketing of our primary products, and there must be organization on a national basis. We must remove the influence of market manipulators and food speculators, who come between the producers and consumers. I notice that there is a widespread demand throughout the country for a compulsory wheat pool. A report in the Sydney Morning Herald of March 2S, 1935 states-

Melbourne.

Resolutions favoring the establishment of a Commonwealth Marketing Board or compulsory pool under the control of the growers with power to guarantee a price for wheat to growers of at least 3s. 4d. a bushel at country sidings were passed by the annual conference of the Australia Wheat-growers Federation to-day.

That resolution was passed by the annual conference of the Australian Wheatgrowers Federation. I notice also that the Riverina Divisional Executive of the United Country party, at a meeting in Wagga on Saturday last, passed a resolution urging the Commonwealth Government to inaugurate a Commonwealthwide compulsory wheat pool. I support those resolutions, and I would make the system of organized marketing apply, not only to wheat, but to other primary industries also; nor would I quibble as the Acting Prime Minister (Dr. Earle Page) did the other day, when answering a question, over the management of such pools. I would give the farmers themselves the majority control of the marketing of their own products. I put these proposals forward because I believe that the restoration of the farmers to a substantial measure of their former prosperity will increase their purchasing power, and will tend to increase the volume of employment. This, in turn, will produce a bigger and more profitable market for the farmers. so that the benefits to one section will react favorably upon another. I ask the House to concentrate its thoughts upon the immediate problems that are harassing the farmers to-day. We do not propose to oppose this bill, but we are not satisfied with it. We draw attention to its inadequacy, not as a plea for a bigger grant of money, but for further consideration, believing that more effective use could he made of this money. We ask for a more comprehensive attack upon the question, to deal with finance, with the organization of marketing, and increasing the home market by employment.

Mr McCALL:
Martin

.- After having carefully examined all aspects of the bill, in conjunction with the speech of the Acting Prime Minister (Dr. Earle Page), I rise to make some observations, particularly in the interests of the taxpayer, who is called upon to give this assistance. This measure also affords the opportunity to make a survey of the rural industries, and in this regard I desire to call the attention of the House to the past and present assistance given to the primary industries. It provides, further, an opportunity to consider from the economic stand-point whether this proposed additional assistance is justified. At the Science Congress recently held in Melbourne, Professor Copland said -

If all the facts were explored as carefully as facts relating to secondary industries were explored, we would all be surprised at the growing cost of assistance to primary producers.

A statement of this nature, from an eminent economist, calls for some attention - particularly at this juncture - as it is quite possible that the proposed assistance will, in many instances, result in the creation of additional bad debts, with their accompanying burden on the taxpayer. As I propose to criticize this measure, I desire to make it quite clear that 1 in no way approach this subject with any antagonism towards the primary producers. On the other hand, as one associated in a practical way with the rural industries. I have had every opportunity to understand their difficulties, and appreciate their importance in our economic life.

The Acting Prime Minister has stated that -

The debt of the community generally to the primary producer has never been properly realized and can never be adequately repaid.

I think this is a statement of the type that Professor Giblin referred to when, speaking at the Science Congress in Melbourne, he said -

The farmer has been taught for so many generations that he is the backbone of the country, and that hia activities are more oi the nature of pious devotions than of sordid commercial ventures, that it is hard for him to believe that his country will ever fail to maintain him iu the production of increased quantities of wheat and butter, even if nobody wants them and Uley arc produced only to be destroyed. This doctrine receives 60 much support in political and general sentiment, that the farmer has some justification for his optimism.

I quote this sententious statement, not with any hostility towards the farmer, with whose troubles I sympathize, but from a desire to have this question dealt with free from the maudlin sentiment which besets a number of members of this House when discussing the hardships of the primary producer.

Let us now take into account the record of past assistance with schemes for development of primary production by the expenditure of public moneys.

Victorian Closer Settlement Commission. - The 1933 report of the Victorian Closer Settlement Commission disclosed losses of nearly £10,000,000, the interest and sinking fund falling on the taxpayer. So far as I can gather, these losses are continuing at an accelerated rate. “Western Australian Government. - The “Western Australian Government has spent £7,602,000 in placing settlers on their group settlement scheme, and the losses to date amount to £5,300,000. The royal commission which inquired into the losses of the Agricultural Bank in “Western Australia reported losses of over £12,000,000, involving the public in an annual charge of £615,000 for interest. Only a small proportion of settlement losses are included in this total. It is as well to point out, however, that the commission stated -

Your commissioners are reporting on the operations of the bank over a period of 40 years and therefore must direct attention to the fact that the result of these operations, even had there been no collapse in wheat prices, would have resulted in loss to the State.

South Australia. - Farmers in South Australia owe their Government, about £14,000,000. How much of this must be regarded as bad debts I cannot say, but the Auditor-General of that State is fairly pessimistic about prospects of repayment.

New South “Wales Irrigation. - In New South Wales, £7,577,000 has already been lost on the Murrumbidgee irrigation scheme, and the losses are still accruing. The Government of New South Wales is spending £2,000,000 on another irrigation scheme, the interest on which, if past experience is anything to judge by, will also have to be carried by the public.

Closer Settlement Commission. - What the position of closer settlement is in New South Wales nobody knows, for the Closer Settlement Commission has never yet presented a balance-sheet, despite repeated requests by the Auditor-General.

Soldier Settlement. - This House is already familiar with Mr. Justice Pike’s report on soldier settlement, disclosing losses of £29,000,000. Those losses are still going on.

The Wheat Commission has informed us that wheat-growers owe £151,000,000, and the honorable member for Gwydir (Mr. Abbott) has told us that the woolgrowers owe £139,000,000. What the dairy-farmers owe, nobody knows, but they are probably in debt to an extent commensurate with other producers.

I think it is time that some plain facts in regard to primary producer’s debts and the losses on. primary production were placed before this House, and that assistance to primary producers was based more on business principles and less on the inherent virtue of primary production, especially on unprofitable primary production, which, for some reason or other, seems most energetically championed by some members of this House. During the last 25 years, when the farmer took up his land, a very large proportion of his capital was provided by the State. Advances to settlers by Australian governments at June, 1932, totalled £151,000,000, at which date £84,700,000 was still outstanding. How much of these advances has been written off in the past, and how much will have to be written off in the future I cannot say, but, without doubt, it will be a very large proportion of the amount now outstanding.

The cost of assistance to primary production has now reached a stupendous figure. “With that admirable book, The Australian Tariff, as a guide to what our economists consider assistance to primary production, I have compiled a table showing the charges falling upon the community in respect of the various forms of assistance rendered to primary producers by direct subsidies, losses on developmental works carried by the taxpayers, and other forms of assistance.

Charges falling upon the taxpayer in respect of direct subsidies, developmental works, and other aids to primary production arc classified under seven headings which include all States and Commonwealth expenditure. These figures are computed on exactly the same basis as was followed by the five Australian economists who compiled The Australian Tariff.

The first heading is taken from items shown as assistance to primary producers in the Commonwealth Auditor-General’s report 1934, page 70-^2,823,000.

No. 2 deals with revenue expenditure by departments on lands (including land settlement), imigration, mines, agricultural and pastoral, forests, fisheries, water conservation, supply and irrigation, properties resumed, country roads, bridges, electricity, &c, grain elevators, developmental expenditure. It amounts to £9,474,000.

No. 3 covers losses on developmental works - Country railways, cool stores, experimental farms, &c, closer settlement, soldier group settlement, &c, irrigation, drainage, country water supply, &c. It amounts to £10,382,000. .

I point out to the House that the expenditure I am presenting is not the accumulation of years past, but is the aggregate expenditure which is falling due per annum. That is an important point to consider.

No. 4, tariff protection to primary industries, as compiled by Professor Giblin, a reliable authority, who was at one time Commonwealth Statistician, deals with sugar, £5,100,000; butter, £5,300,000; rice and dried fruit, £800,000; maize, cotton and minor crops, £600,000; and tobacco, £650.000. The total is £12,450,000.

No. 5, twelve months’ increase in arrears of debts due by primary producers to Crown, aggregates £3,851,000.

No. 6 covers estimated interest and sinking fund on advances to primary producers and expenditure on developmental works which has been written off as lost, the interest and sinking fund falling on Consolidated Revenues. The capital sum involved is approximately £35,000,000. Interest and sinking fund at 6 per cent, represents £2,100,000 for the Commonwealth and all States.

No. 7, exchange premium on overseas interest - for Commonwealth and all States for 1933 - amounts to approximately £6,500,000.

These make a grand total of £47,580,000 approximately accruing each year as assistance to primary producers. This figure does not take into account the wheat bounty and various other forms of assistsance. If all items were taken into consideration, the total would undoubtedly be over £50,000,000 per annum.

These direct and indirect subsidies are equal to over £2 a week for every person engaged in primary production in the Commonwealth, but do not include exchange. In regard to exchange, the community carries two-thirds of the cost of the high exchange rate from which the primary producers benefit to a very large extent. The other third falls on the primary producers themselves. “What exchange means to the average family may be judged by the fact that it adds about 2d. to the cost of every pound of butter, and about 6d. to the cost of every pound of tea consumed in the Commonwealth.

As for the Acting Prime Minister’s statement that farmers have drawn to a large extent upon their capital reserves, they may have done so; but it seems to me they have drawn to a much larger extent upon the capital of their creditors and upon the public funds.

From the evidence I have presented I believe I can, without, exaggeration, and with every justification, quote the sequel to the Acting Prime Minister’s statement regarding the debt of gratitude owed by the community to the primary producers. That sequel is: “ The debt of the primary producers to the community has never been properly realized, and no doubt will never be fully repaid.” I say this in no spirit of hostility to the farmers, but merely to place the plain facts before the House. It must be remembered that the debts of the primary producers and the losses referred to, are not, as some would have us believe, entirely due to the depression. In corroboration of this statement, I again recall the statement of the royal commission which inquired into the losses of the Agricultural Bank of Western Australia -

Even had there been no collapse in wheat prices losses to the State would have still resulted.

No doubt a very large proportion of the debts were accumulated, and most of the losses were incurred during the ten years prior to June, 1929, during which export prices of wool averaged 17½d. per lb. and those of wheat 5s.11d. a bushel. The records of every State government show there were many farmers who could not make their properties pay under such conditions. Therefore, what prospects have they to-day?

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– What does the honorable member propose should be done in that respect?

Mr McCALL:

– I propose to ask the Acting Prime Minister what he suggests should be done. It is no kindness to keep them struggling on properties which never have shown a profit, and are never likely to do so. It is sheer folly to spend public money to keep them on the land when they are running further into debt each year. If a farmer or any other individual has a chance of making good, he should be able to do so if given a level start, that is, if he is placed in such a position that his assets and liabilities balance.

The figures quoted by the Acting Prime Minister regarding the compromises effected in New South Wales show that, by reason of a sacrifice of £600 on the part of the Crown, one man was given an equity of £620, and another was presented with an equity of £801, to which the Crown contributed £276. It was recently announced in the Parliament of New South Wales that, by reappraisement of land values, £4,500,000 had been written off the debts due by 11,000 farmers to the Crown, the average concession to each farmer thus amounting to slightly over £400. This was in addition to other concessions to primary producers by the State Government amounting to £3,000,000 in the last two and a half years. It must be admitted that the chief effect of such reductions of indebtedness to the Crown is to increase the value of the security for the secured creditor. I do not see why the Crown should make these sacrifices, which eventually must fall upon the taxpayer. So far as the farmers are concerned, they would be just as well able to carry on if payments to the Crown were suspended where necessary, and resumed when the farmer is in a position to pay. Who is to say that in five or six years time this land, on which the Crown has written down its equities, will not be worth much more than it is to-day, and that the farmers will be well able to meet their obligations to the Crown? If the uneconomic producer is to be assisted by the socialization of debts, it. will mean that many marginal producers will be encouraged to refrain from struggling to keep out of debt, when perhaps their next-door neighbour has been made a substantial donation by the State. We must avoid encouraging producers to continue unprofitable production in the expectation of government assistance.

When all is said and done, the most deeply-indebted farmer is much better off than the unemployed man on the dole. The farmer has his house assured to him, as the moratorium prevents his eviction; he has his plant likewise secured to him, and can grow a large proportion of his own food. The unemployed man has none of these things. He is dependent upon the dole, and must find shelter where he can. The farmer has suffered losses, but these are ordinary business losses. If persons in other avenues of business lose their capital, no government steps in to make good their losses or to restore their equities in their properties.

Professor Copland and Professor Giblin have estimated the cost of tariff protection to secondary industries to be in the vicinity of £15,000,000 per annum, whilst Professor Brigden, in the May, 1933, edition of the Economic Record, states that it is now probably no more than £13,000,000 per annum. These economists estimate the cost of tariff protection to the primary industries to be approximately £14,000,000 per annum. The point I desire to make, Mr. Speaker, is that for years past we have heard abuse of the secondary industries sheltering behind tariff protection. At least these industries do not ask for assistance from public funds a3 well as tariff protection. What an outcry there would be if any secondary industry employing 1,700 workers, and protected by a duty of 50 per cent, as are the dairy-farmers, asked for assistance from public funds to the extent of £7,102,000, as was spent in settling about 1,700 dairy farmers, at an average cost of £4,177 each, on the Western Australian group settlements! What a commotion there would be if all the secondary industries in Australia asked for assistance to the extent of £12,000,000, to be voted by this bill, or if the public were asked to foot the bill for losses in secondary industries, as they are asked to foot them for the primary producer!

Regarding the allocation of this money, I desire to know whether this sum is to be a straight-out gift, or a loan, to primary producers. I am quite aware that the Acting Prime Minister’s idea is to create a “ revolving fund “, but I fail to see any assurance that it will ever revolve. The farmers are to be issued with interest-free loans, but provision for enforcing repayment is entirely lacking, and personally I do not see any one repaying interest-free loans unless under strong compulsion. I contend that as this money is to be loaned on such generous terms, very stringent provision should be made for its repayment. A condition of this assistance should be that the recipient should not have received other concessions from a State government during the last three years, as regards his capital debts to the Crown, or, if such concessions have been made, no further help should be given until secured creditors have made concessions at least equal to those made by the Crown. There is not the slightest justi fication for the Crown making concessions for the benefit of secured creditors. A second condition should be that moneys advanced under - this act shall be a first charge upon the assets of all recipients, and that farmers shall receive the loan only upon a clear understanding that they are to receive no further concession whatsoever involving a charge upon the public funds. If those receiving this assistance cannot pull through to solvency, it is better for themselves and the State that they should hand their properties over to others, and in such cases there should be absolutely no further expenditure of public moneys upon such properties.

In the bill now before the House, I can see no suggestion of any such provisions, although their urgency must be apparent to any one who has considered the question, especially if this fund is to develop the “ revolving “ function assigned it by its sponsors. . I very much fear, that this £12,000,000 will not revolve, but will go the same way as other millions have gone in the past. I suggest that the Acting Prime Minister should consider some such stringent methods for enforcing repayments as I have already outlined, and that in addition, the utmost precaution should be taken to ensure: first, that advances are granted only to those in need of them ; and secondly, that they be granted only to applicants who have a very good chance of pulling through. I use the words “ very good “ as distinct from the Acting Prime Minister’s “ reasonable chance “, for it must be remembered that all farmers who have incurred the losses already referred to were considered to have a “reasonable chance” when the expenditure was incurred.

Unfortunately the primary producers themselves have been the victims of circumstances. The policy of every State government has been to encourage men to go on the land without the slightest attempt being made to find out whether world markets justified their existence, or whether certain areas were ever capable of profitable production.

The assistance now provided can, in my opinion, be classified under the following three heads: -

  1. Necessary and useful - probably 50 per cent.
  2. Unnecessary, inasmuch as it is given to those who could get on well without it - probably 25 per cent.
  3. Wasted, inasmuch as it is given to producers who have no chance of success - probably 25 per cent.

I believe that if the matter were properly investigated, the last two classes could be eliminated and the annual charge upon the public reduced by £20,000,000 without injustice or hardship to any economic and efficient producer. This would provide the reduction which was suggested as being necessary by the Acting Prime Minister when, during the regime of the previous Lyons Government, he said that taxation should be reduced by a further £20,000,000. Graziers would derive the most benefit from such a review. At present they pay much and receive little. Elimination of this unnecessary and wasteful assistance would reduce costs of production all round, increasing the profit-earning capacity of those pastoralists and other primary producers who are making a profit under the present circumstances, bringing many who are now below the profit line above it, and reducing the assistance necessary to those producers who would still remain below the profit line at a low level of costs. I believe the number forced out of primary production by a reduction of assistance would be comparatively small, and that the general reduction of costs would rapidly open up for them other avenues of. employment in industries rendered economic and profitable through lower costs of production.

I suggest, therefore, for the consideration of the Acting Prime Minister, that a board with powers similar to those of the Tariff Board, but somewhat more extensive, should be appointed to apply to proposals for assistance to primary producers the same critical review as is now applied to tariff protection given to secondary industries. Such a board, I feel sure, would do more effective work in rural rehabilitation than the present method of expenditure of public funds, which cannot go on for ever as the taxpaying capacity of the country has its limits and those limits, Mr. Speaker, have already been reached.

Mr McEWEN:
Echuca

.-.I should like to devote more time than is at my disposal to refuting the ill-informed statements and illogical deductions of the honorable member for Martin (Mr. McCall). Apparently the honorable member draws the whole of his conclusions from a study in the Library of conditions appertaining to primary industry.

I hope I shall be able to make some worth-while contribution to this debate, and that I shall be able to offer some suggestions for the solution of the problems which this bill has been designed to solve. I shall not reply further to the remarks of the honorable member for Martin beyond pointing out that in comparing government assistance granted to primary industries with that given to secondary industries, the Royal Commission upon the Wheat Industry stated that the average cost of the tariff on a wheat farm of 1,280 acres is . £500. Last year there were 15,830,000 acres under wheat in Australia. If the honorable member applies the Commission’s calculation to the total area under wheat, then he will be better able to draw reasonable deductions in order to make an intelligent comparison between the two classes of assistance. In discussing the merits of the assistance given to primary industries, the point must be emphasized that we cannot afford to allow those industries to go out of existence. We have incurred debts overseas which we hope to meet. There is only one method by which they may be honored, and that is by the export of some commodity, the proceeds from the sale of which may be used to meet our commitments. Can the secondary industries which the honorable member for . Martin champions export goods to a value of £30,000,000 or £40,000,000 per annum, sell them competitively on the world’s markets, and thus enable Australia to meet its interest obligations overseas ? Can they further export £70,000,000, £80,000,000 or £100,000,000 worth of manufactured goods, and by their sale enable Australia to pay also for its essential imports? The answer is obvious. We know that they cannot. That explains why this country must take the necessary legislative action to maintain its primary exporting industries. 1 shall endeavour to offer constructive and not merely destructive criticism of the Government’s proposal for dealing with a very difficult problem. I -would say first that, although the bill has my entire approbation so far as it goes, I do not consider that it goes sufficiently far. The decision of a responsible government to raise the sum of £12,000,000, and to devote it to the purpose specified indicates its realization of the magnitude of the problem with which it is faced. But when it is realized that the total debt obligations of these primary industries is in the neighbourhood of £500,000,000, it will be seen that this provision by itself is totally inadequate. If administered well, it will go a long way towards removing the pressing burden of the unsecured debts of the primary producers; but I have yet to discover in what way it can substantially relieve them of the burden of the secured debt, which is in the neighbourhood of £400,000,000. This legislation presupposes the existence on the statute-books of the States of acts that will give immediate protection to primary producers who are in difficulties against adverse action by their creditors, and presumably prevent the dissipation of their existing assets. Within recent years we have heard . a good deal about the sanctity of contracts. That sentiment, I feel sure, has the unequivocal support of every honorable member. But no amount of glib talk of sanctity of contracts will make a security exist where the assets have substantially depreciated in value. Many persons of a conservative frame of mind have not yet realized that there are securities which are only technical, which have no real backing in the shape of actual assets. If we are to deal adequately with this problem of rural debts, there will have to be an appreciation of the fact that creditors cannot realize on security which technically they possess, but which actually does not exist. I should say that if these primary industries are to be established on a sound basis nothing less than a complete and comprehensive re-financing of their secured debt is necessary. The futility of dealing with unsecured debts and ignoring the magnitude of the secured debts should be obvious to any one. If we are to clarify our minds and realize that this action is directed towards rehabilitation instead of being merely a charitable grant to persons in distress, that position will have to be faced. I should say that real rehabilitation will be achieved only if the mortgage debt of the producer is such that he can pay interest upon it at prevailing rates, if the debts other than his mortgage obligations are confined within such limits that he has a reasonable chance of liquidating them within a measurable period of time, and if, in addition, he is left with sufficient capital or credit to maintain his current production. I say, unhesitatingly, that there should be a cessation of government assistance to producers whose debt position is due to personal inefficiency. I say further that no attempt should be made to apply this scheme of rehabilitation to what are known as the marginal areas of production. There can be no effective rehabilitation in areas where it is uneconomic to produce, and assistance should not be given to producers who are farming land which is either unsuitable or inadequate in area for the purpose for which it is being used. Real rehabilitation not only demands that the present debt position of the producer is dealt with, but also goes further and postulates that subsequently he will be able to carry on economic production without additional assistance. Therefore, complementary . action must be taken in addition to this rehabilitation legislation, which deals only with the debt structure. I should say that such complementary action must take cognizance of the burden of the tariff upon these industries. I do not suggest for a moment that the whole of the difficulties of these industries can be met by a revision of the tariff; but we should not ignore the statement by the royal commission that a capital obligation amounting to not less than £500 is added to the burden of the average wheat-farmer by the incidence of the tariff. Complementary action would involve marketing legislation, to give the producers control of the marketing of their product. It would also involve the establishment of homeconsumption prices, and of price stability. There should be, in addition, such action as would reduce, wherever possible, the costs of production. In this connexion I instance bulk-handling installations for wheat. Scientific assistance is also necessary for the reduction of losses. The royal commission has said “ there is urgent need for more technical assistance in the wheat industry” and “further climatological research is necessary ‘’.

I believe that we have ignored for too long the relation of the exchange rate to the position of our primary industries.’ It is not right that governmental policy, which is largely directed towards the rehabilitation of these industries and which, therefore, to be effective, must take cognizance of the prices that those industries receive, should ignore entirely the relation of the prevailing exchange rate to those prices. I have said previously in this chamber that some liaison should be established between the authority which determines the exchange rate and this Parliament which deals with the broad policy of the country. Other countries have taken cognizance of this fact. Argentina, for example, is reported by the Wheat Commission to have deliberately depreciated tho exchange rate of the peso to the extent of 20 per cent, in the interests of the primary export industries of the country.

I regret that the bill does not postulate in detail the general principles upon which the State schemes that are to give effect to this legislation should be based. Under the bill as drawn, debtors whose circumstances are identical will receive different treatment according to the State in which they happen to reside. I regard that as quite wrong. I regard as even more obnoxious the absence of any statutory debt adjustment authority to define and enforce a fair basis for composition where voluntary compromise has failed. The extent to which debtors may participate in the benefits of this legislation will be determined entirely by the good will of their respective creditors. It is quite wrong that this Parliament should vote £12,000,000 and establish the whole of the machinery to give assistance to a certain class of needy citizens, if those citizens may eventually be debarred from participation in the benefits of the legislation by the unreasonableness of any one of the creditors. The bill should contain the stipulation that, before a State can participate in the benefits of this legislation, it shall have or shall establish some debt adjustment authority along the lines found necessary in Canada and New Zealand, and recommended by the Royal Commission on the Wheat Industry. In the actual distribution of these moneys, the States will find that there are different classes of secured creditors. There are many creditors who, in normal circumstances, would be unsecured, but who, by the threat of legal action, have forced farmer debtors to give securities over their assets, such as livestock and hay, liens on crops, and bills of sale over implements. They have thereby gained an unfair advantage over the more tolerant creditors. That is an aspect of this matter which should be given consideration. We should protect the more tolerant creditor against the encroachment of those who, by threat of legal action, have forced farmers to give bills of sale over their assets. These should not be regarded as secured debts but should be treated as though they were unsecured.

Mr Lane:

– That would be a breaking of the contract.

Mr McEWEN:

– It would be an endeavour to provide equity of treatment. That should be the objective of every parliament. Until within the last couple of years the effective rate of interest charged by the fertilizer companies - I speak of Victoria, but I believe that the conditions have been identical in every State - was in the neighbourhood of 18 per cent. When credit was given, 5s. a ton was added to the price of the fertilizer, and 10 per cent, upon the increased price was then charged as interest, so that for the average period over which the credit was needed the effective rate of interest was really 18 per cent. In the case of many of the machinery companies, it was in the neighbourhood of 20 per cent. When trading organizations charge such excessively high rates of. interest, we are entitled to infer either that they are making high profits, or that they recognize that they are trading in a risky business. If we are to recognize this fact, any debt-adjustment authority could and should show discrimination in effecting a compromise of the debts concerned.

Again, we have had instances of wheatbuyers having made substantial overadvances to vendors of wheat. The debts incurred when the sale of the wheat failed to recoup the advance should receive special consideration. It is a very doubtful practice for a government to use public money to reimburse traders for its errors of judgment. The application of the provisions of this bill to the Victorian soldier and closer settlers should be carefully considered. To me, the bill postulates an immediate intention to effect a compromise of the debts of farmers. The Victorian soldier and closer settlers are operating under a statute, in pursuance of which their obligations to the Crown cannot be reviewed for another two years and three months. It would be anomalous, I suggest, if, under this legislation, the obligations of these settlers, other than their obligations to the Crown, should receive immediate consideration, while their obligations to the Crown should be disregarded for another two years and three months. About 13,000 Victorian soldier and closer settlers would be involved, and an amendment of the Victorian Act is needed.

Mr McBride:

– What rate of interest are they paying at present?

Mr McEWEN:

– They are. being debited with interest at 4½ per cent.

Mr Rosevear:

– Has not their capital indebtedness been reduced?

Mr McEWEN:

– No.

Mr Curtin:

– Does the honorable member say that the valuation of the holdings of the Victorian soldier settlers was not reviewed under the terms of Mr. Justice Pike’s report?

Mr McEWEN:

– The Commonwealth Government on one’ occasion voted an amount in excess of £1,000,000 to assist soldier settlers, and that amount was applied to the cancelling of some arrears of interest, but not the capital indebtedness, of the Victorian soldier settlers. Their capital indebtedness has never been reconsidered. Government assistance is to be given to debtors who, without such assistance, must imme diately face liquidation. I think in these circumstances we would be justified in providing that creditors who, in the case of such immediate liquidation, would sustain inevitable loss, should, in view of their sharing in these funds, be called upon to consider the writing off of that part of their debts which would be irrecoverable in the event of immediate liquidation through the withholding of government assistance.

Mr Casey:

– Who should do the writing off?

Mr McEWEN:

– I suggest that the creditors should write off the part of the debt that would be irrecoverable. Some debt-adjusting authority should be set up. This has been found to be necessary in other dominions and in some other countries which have dealt with this problem. In any case, the unsecured debtors would be no worse off if they wrote off the irrecoverable part of the debt. Such action is compulsory in Canada and, in certain circumstances, in the United States of America and New Zealand. The voluntary cutting off of dead wood in order to help a farmer would leave the unsecured creditors at least in no worse position than they would be in if the farmer were forced into the Bankruptcy Court.

Reference has been made during this debate to the debt adjustment legislation of other countries. The Government of Argentina not only deliberately depreciated its currency in the interests of the primary producers, but, in addition, established an official organization for the re-financing of primary producers. In the United States of America the national government set up a refinancing organization with authority to convert the secured obligations of farmers into an indebtedness to the State. The re-financing of farmers’ mortgageobligations is being done in the United States of America by the exchange of the mortgage deeds for government secured bonds, which are immediately marketable and bear interest at 3 per cent., free of tax. The Canadian Government has set up a board of review to confirm voluntary compromises between debtors and creditors. In the event of the debtors and creditors failing to reach a voluntary agreement, the board is clothed with authority to formulate and enforce what it considers to be a fair compromise. I am given to understand that the existence of this element of compulsion has made it unnecessary except in a very few cases, for compulsory methods to be adopted. The knowledge that creditors who -refuse to agree to a reasonable compromise may be forced to do so has made possible, in almost every instance, a voluntary compromise.

Mr Casey:

– Would not such action be possible by the State governments under this scheme?

Mr McEWEN:

– Yes, but I intend later to propose that it shall be a condition of the grant that a debt adjustment authority, clothed with adequate power like that of Canada, shall be set up.

Mr Lane:

– That is pure compulsion.

Mr McEWEN:

– The honorable member for Barton is no doubt aware that the national debt conversion was compulsory, and so were certain conditions of the Premiers plan. In- addition to the Board of Review, the Canadian Government has set up a Farm Loan Board which is authorized to issue farm loan bonds guaranteed by the Government for the purpose of financing first mortgages on farm lands. Loans may be made up to two-thirds of the value of the property. The debt obligations of the farmers are converted from ordinary mortgages bearing the current rates of interest to obligations to the Crown bearing very considerably reduced rates of interest and carrying a payment of 1 per cent, or 2 per cent, above the interest rate as an amortization of the debt. The alternative rate of the sinking fund may be determined by the debtor. The board may also make loans to mortgagees up to within 25 per cent, of the value of the mortgage. This is in recognition of the fact that mortgagees, in consequence of moratorium legislation, have suffered considerably in some cases.

The Government of New Zealand has passed an act empowering the court arbitrarily to reduce the rate of interest on mortgages and to remit arrears of interest. Provision is also made to prevent a mortgagor or lessee from contract ing himself out of the provisions of the act. Where consent is withheld to the placing of part of the mortgage liability in a suspense account, the District Commission may submit the matter to the court and it may “ make an order approving the. basis of settlement “. The New Zealand policy for dealing with rural disabilities has not yet been completely implemented by legislation, but the royal commission, which considered the subject, stated -

The amount of bonds in exchange for which the corporation may take over existing mortgages shall not exceed 80 per cent, of the value of the land and improvements. It is thought that a narrower margin than in the past can be safely accepted when the prices are based on low level prices for produce.

Mr Scullin:

– Would that mean 80 per cent, of the present ascertained value?

Mr McEWEN:

– Yes. In Canada the limit is two-thirds, and in the United States of America the Government, may re-finance producers to the extent of 75 per cent, of the value of the property.

The Leader of the Opposition referred to the manner in which the Government of South Africa had compulsorily reduced interest rates on farm mortgages. The South African act provides that unless the rate of interest on farm mortgages is reduced to a maximum of 5 per cent, a special tax shall be levied to take the whole of the excess above that rate. When the rate of interest on the mortgages has been reduced to a maximum of 5 per cent., the Government pays, as a subsidy, 1& per cent, of the rate, so that the effective rate of interest to rural mortgagees is a maximum of 3-J per cent.

The Royal Commission on the Wheat Industry in the course of its report stated -

Apart from labour, interest on borrowed capital is the largest single item in the costs of the average wheat-grower.

I say without hesitation that that is true to an even greater extent of the pastoralist, whose capital investment is higher and whose labour costs are considerably less.

I suggest that as it is proposed to rehabilitate, by governmental action, men who otherwise would become insolvent, it would not be unjust, in consideration of their receiving a cash dividend from these Commonwealth funds, to compel creditors, if necessary, to write off that portion of the debts due to them not covered by the assets, for, should the Government refrain from helping the debtors, the creditors would inevitably incur a similar loss. Accrued interest that has remained unpaid upon that portion of a secured debt not covered by assets should be written off as from the day upon which the amount of the debt ceased to be covered by assets. I do not suggest that all arrears of interest should be written off. I speak only of the arrears on that portion of debts not covered by assets. The application of a degree of compulsion in the settlement of rural debts is regarded in many quarters as unthinkable. However, we found it impossible to deal with the national debt conversion without compulsion, and if we can justify the compulsory reduction of interest on government bonds which are backed by all the resources of the nation, we need not boggle at the writing off of that portion of rural indebtedness which is obviously irrecoverable. It is essential to apply to rural rehabilitation the principles which are regularly applied in business; we must cut off the dead wood. Business people review their position periodically, and losses are recognized and written off. Every country that has tackled the rural debt problem has had to introduce some element of compulsion. It has varied from the slashing of all debts to the extent of 40 per cent, in certain European countries, to the compulsory composition of rural debts in Canada. The Royal Commission on the Wheat Industry recorded its repugnance to the compulsory writing down of debts, and then advocated the adoption of a scheme which, in the long run, involves the compulsory writing off of some of those debts. Its manner of reconciling this contradiction was to propose that the debts should not be written off until a further seven years, so that the farmers, who have already passed through five years of depression, would be compelled to continue for another seven years struggling to pay interest on debts which are not represented by assets.

I suggest that the Government should give very serious consideration to the rural policy it is to follow after thi3 bill is passed. There should be a complete and comprehensive reconstruction or refinancing of secured debts. A debt adjustment authority should be appointed to . handle debt compositions, and to order the compulsory writing off of debts not represented by assets. Consideration of the position of the debtor whose obligations are not exceedingly pressing might be deferred. The man who to-day has an equity in his property to the extent of, say, 25 per cent., could be left to his own devices for the time being, but the man whose equity is dwindling should, if it is considered in the national interest that he should be kept in the industry, have his interest obligations and his general costs reduced. We can do this most effectively by copying the example of other countries, and going in for a comprehensive plan of re-financing by exchanging existing mortgages for governmentbacked securities which should be non-negotiable just as the existing mortgages are non-negotiable. If that is done we can reduce interest obligations to an average of about 3 per cent. I do not suggest that the Government should do anything that would involve it in the loss of millions of pounds; but present values are so low that if two-thirds of to-day’s value were advanced, the Government would not be involved in any subsequent loss. As regards the balance of the secured obligation - that is, the amount of the existing mortgage in excess of twothirds of to-day’s value of the property - it should then be secured to the present mortgagee by second mortgage. I suggest that this mortgage should be converted at a reasonable rate of interest, say, 4 per cent., and the debts should not be permitted to fall due until after the lapse of a reasonable period of time. I suggest that the Government should follow the example of the Government of South Africa to the extent of subsidizing interest payments on these second mortgages. If the interest rate is fixed at 4 per cent., the Government should subsidize interest payments to the extent of 2 per cent. That would be much less costly than the South African scheme, under which the Government subsidizes interest payments on all rural debts to the extent of li per cent., whether the debtors are in bad circumstances or not.

Provision would have to be made for the amortization of obligations to the Government. The debt adjustment authority, or some other body, could be empowered to stipulate the repayment of an annual sum to the Government, cognizance being taken of the current prices of rural products. This was recommended by the royal commission in New Zealand.

I make these proposals because I believe that we cannot afford, as a country in which so much capital has been sunk in rural industries that provide occupation for a great many people, to allow those rural industries to go out of existence. The benefits which would flow from the adoption of the scheme which I have suggested would be immediately reflected in the improved financial position of the farmers, and in their increased purchasing power. This, in turn, would lead to more employment. There were no idle factories in the cities until the country people lost their purchasing power. Widespread unemployment followed the loss of purchasing power in the country, and the restitution of that power must be a condition precedent to any satisfactory solution of the unemployment problem. Therefore, I hope the Government will not content itself with merely passing this bill, but will take subsequent action to reduce production costs and to refinance rural mortgage obligations.

Mr ABBOTT:
Gwydir

.- I gathered from the able speech delivered by the Leader of the Opposition (Mr. Scullin) that this bill is to be treated as a non-party measure, and that the Opposition will, for the most part, support it. I propose to confine my comments to a discussion of the importance of the rural industries, and the need for preserving them, the ability of primary producers to carry on, their competency or otherwise to do so, the debt position, the amount of relief which Parliament can give, what further relief is possible, and the effect of relief measures on our national finances.

When one honorable member was speaking, it was stated by way of interjection that he had gained most of his information about rural industries from the Parliamentary Library. Whether or no that was true of him, it is certainly not true of me, or many other honorable members in this House who will address themselves to this bill. In any case, sufficient information on rural problems is available in the reports of those who have reported on the wool industry and the wheat industry to enable honorable members to appreciate the main outlines of this problem. The wool report was presented in 1932, and the final report of the Royal Commission on the Wheat Industry has just come to hand. I admit that the value of those reports seems to have been somewhat discounted by the fact that the Government has failed to act upon them to any great extent. Indeed, it has failed to act upon the wool report at all. Those honorable members who have so far spoken on this bill have tended to confine their remarks to a discussion of the position of the wheat-farmers. I propose to deal with the position of the wool-growers.

The Leader of the Opposition said that the debts of primary producers amounted to about £500,000,000, and that the wheat-farmers alone owed approximately £141,000,000. The wool producers of Australia are in debt to about the same amount. When the wool report was released two years ago, the price of wool was 8d. per lb. This year the price is about 9£d. per lb., while last year it rose, for that year only, to about 15d. At -page 15 of the report, the various costs of producing wool are set forth as follows : -

I understand that there are 70,000 wheatfarmers in Australia, of which 60,000 are engaged in the production of wheat alone. There are 90,000 wool-growers, and the total debts of wool and wheat-growers are as follows: -

As the right honorable the Leader of the Opposition said this afternoon the interest burden at the rate of 5 per cent, on those two industries is £14,000,000 per annum. Expressed in terms of wheat, out of the present wheat crop, approximately 135,000,000 bushels, no less than 60,000,000 bushels will go to meet the interest charge on the industry. Expressed in terms of wool, at the presentprice, in order to earn £7,000,000, representing the interest burden on the wool industry, the wool of no fewer than 21,000,000 sheep will be required. If we exclude flocks of over 10,000 in the wool industry, that leaves a total of about 74,000,000 sheep, out of which 21,000,000 sheep, roughly one-third, have to earn the interest. The Wheat Commission in its report says that 30 per cent, of the wheat-farmers can produce wheat for between ls. and ls. lid. a bushel, and 70 per cent, for from 2s. upwards. Interest is not included in those figures. The wool production costs are 9d. per lb. before interest is included, which shows most clearly that the greatest burden that those two industries are confronted with at the present time is that of interest. I agree with the Leader of the Opposition that we have to look at other things beyond the debt structure of these industries, and devise means to keep them going. I confess that I cannot see how they are to be kept going under the debt burden that they are carrying at present. No matter from what angle the position is regarded, it seems to me impossible to carry on industries which, as in the case of wheat, have to use 60 per cent, of their total production to meet their interest burden, calculated at the rate of 5 per cent., or as in the case of the wool industry, in which 21,000,000 sheep have to earn the interest. Nothing is to be gained at the present time by not facing these facts; by refusing to realize how serious they are, and how acute the position in those industries is. I have spent most of my adult life in the wool industry, which I know very well indeed. There is a common feeling amongst people who are not practically engaged in that industry, that it is one in which there are a great many wealthy men, and which to a great extent is not in need of assistance. We who represent these people know that in the wool industry as well as in the wheat industry there are many producers who will not be in need of assistance under the present measure. But, speaking now more particularly of the wool industry, we also know that there is an amazing number of small men engaged in it. Their number is much greater than one could possibly imagine. I have here figures that show that there are nearly 90,000 wool-growers in Australia owning flocks from under 500 up to 50,000 sheep’ and over. The wool committee’s report shows that there are 50,749 flock owners who each have sheep numbering under 500. Their total is 9,661,000 sheep. Then there are 16,361 flock owners owning flocks of over 500 and under 1,000, which total 11,473,000 sheep. There are 10,896 flock owners owning flocks of 1,001 up to -2,000, and their sheep total 15,170,000. There are 7,260 flock owners owning flocks of 2,001 up to 5,000 sheep. Their sheep total 22,042,000. These smaller flock owners total 84,266 and own 58,346,000 sheep. When we come to flocks of over 5,000 sheep, we are getting into a more prosperous stratum in the wool industry. The figures aTe : 2,265 owners owning flocks of 5,000 up to 10,000 sheep, totalling 15,575,000; 1,056 owners of flocks from 10,000 to 20,000, totalling 14,584,000 sheep; 376 owners of from 20,000 to 50,000, totalling 10,959,000 sheep; and 54 owners of 50,000 sheep and over, totalling 3,924,000 sheep. These larger owners number 3,751 and own 45,042,000 sheep. In those 3,751 flock owners are included large companies with big pastoral interests. A great number of them will not be in need of assistance, although at the same time many large growers and many companies are not showing a profit under present conditions. The point I want to make in that regard is that very often a man does not owe much on his property. He may have inherited it, or may have been able to take advantage of good seasons and good prices during the war and immediate post-war years. In that way he may have been able to keep himself comparatively free of debt. That sort of thing makes a great deal of difference to the position of many men in the industry at the present time. Of the £140,000,000 odd owed by the woolgrowers throughout the Commonwealth, the great bulk is owed by the men who own flocks of from 10,000 sheep downwards, and particularly those owning from 5,000 sheep downwards. It seems to me that it is those men who are in vital need of assistance. The bill will give a certain measure of assistance to those producers.

Another charge which is often hurled against the land-owners, and sometimes put down as one of the causes of their present position, is that they have paid too high prices for their land. I quite agree that in many instances that is so. A man who pays more than an economic price for his land - and the economic price must be based on the earning capacity and the yield - has only himself to blame if he finds himself in trouble. My experience in the wool industry is that some men are rather influenced by what may be called the

Social aspect of a district, and pay high prices for land to get into it. If they got into trouble, it is purely “ their own pigeon “.

Mr Lane:

– But they all come in for this bounty.

Mr ABBOTT:

– Not necessarily, as the honorable member will see if he will allow me to explain an amendment which I hope to submit at a later stage. In the estimates made by the Wheat Commission and the Wool Committee, an unduly high price for land has not been taken, particularly so far as wool is concerned. In that case the wool costs are estimated at £3 per sheep area, and interest at 5 per cent. That is a low estimate, because interest has been a good deal higher. The object of the bill is to borrow £12,000,000, which is to be handed out to the States in certain ways that are already laid down. In fact, some of them have already been implemented by State legislation. It therefore seems to me that any discussion aimed at altering the purport of the bill is likely to be ruled- out of order. Any such alteration would have the effect of destroying arrangements that have already been completed. I join to a certain extent with the Leader of the Opposition in regretting that this Parliament did not have an opportunity to lay down conditions unhampered by what has already been implemented in one or two of the States, in accordance with principles that were outlined by the Government before Parliament had a chance to discuss the bill at all. In this debate it seems to me that we must confine ourselves to the fact that the States are going to carry out work for which the Commonwealth is finding the money. The Commonwealth proposes to borrow £12,000,000 over a period of years, and the money will be allotted as shown in the schedule.

Mr Martens:

– To what material extent will it benefit those industries?

Mr Archdale Parkhill:

– To the extent of £12,000,000 !

Mr ABBOTT:

– Yes, there will be a benefit to that extent. I commend the Government for what it has done in that regard. It is endeavouring to do something definite to the full extent of its capacity, but the House must consider whether the time has not arrived when those industries which are in dire distress must be saved by more than governmental action. Australian governments cannot continue indefinitely raising money from the taxpayers, or borrowing it. The necessary effort must be made by all who are concerned in the welfare of our primary industries. In those I include the great financial institutions, which have been singularly lacking in any definite assistance of a voluntary nature up to the present. We must all agree that the effort which is being made at the present time cannot be confined purely to governmental action, as it is in this bill. One must ask oneself whether the practice of borrowing money to lend out again in order to retrieve the position is sound. Personally, I do not see that it is. There, again, I must agree with the Leader of the Opposition.

Mr Holloway:

– If the honorable member thought a little, he would say straight out that it was unsound.

Mr ABBOTT:

– To put it definitely, I think it is unsound. There is no doubt that we must make a big effort to save these industries which are in dire distress, not through the fault of the people engaged in them, but because of world circumstances over which they have no control.

Mr RIORDAN:
KENNEDY, QUEENSLAND · ALP; FLP from 1931

– It would be more unsound to allow them to die.

Mr ABBOTT:

– That is so; but to save them requires a nation-wide effort. It is most important to the nation that that great effort should be made. The honorable member for Martin gave the House a tremendous number of figures regarding the assistance which had been given by various governments to primary industries. No matter what has been done by governments for those industries in the past, there is no escaping the fact that their financial position is unsound. Instead of giving the House columns of figures, the honorable member could have simply confined himself to the fact, which has been often pointed out, that of the people engaged in primary industries at the present time, only about 5 per cent, contribute anything by means of income taxation to the finances of the States and the Commonwealth. Income tax, which is tax upon profit over expenditure, may be taken as the barometer of the prosperity of any industry or of the individuals engaged in an industry, and when we find that these great industries, which have produced so much wealth for the Commonwealth, are able to-day to pay approximately only 5 per cent, of the total income tax of the Commonwealth, it must be clear to us that their position is unsound. The assistance to be granted under this measure works out approximately at the rate of £400 for each of 30,000 farmers. But I agree with the Leader of the Opposition that there are more than 30,000 Australian wheat-farmers in distress to-day. Also, I agree with the honorable member for Martin in doubting whether this grant will provide a revolving fund. Whilst it will certainly be of great assistance to the distressed farmer, it will not help him to the extent that he will quickly be enabled to pay back this loan, in order that the money may be passed on to another distressed settler. To think otherwise would be expecting too much.

This measure agrees so much with measures of a similar character passed previously that honorable members have looked practically to the same sources of information in discussing it. For instance, the money will be subject to State laws. In South Australia particularly the State laws dealing with rural debtors are harsh. Putting the matter bluntly, they treat the debtor almost as a criminal ; they certainly put him in a humiliating position. State efforts in this direction have been designed mainly to prevent people from becoming bankrupt, rather than assist a very deserving and unfortunate section in a more tangible way. Both Commonwealth and State measures appear to apply only to unsecured creditors and to assistance given by governments through re-appraisement. Thus, in many cases, the position of secured creditors is much better now than it was before any legislation of this kind was enacted. Figures given ‘by the Acting Prime Minister demonstrate this point quite clearly. It seems extraordinary that no greater effort than this has been made in Australia to cope with the debt structure of the Commonwealth. I commend the Government on this measure; but to provide assistance to the extent of only £12,000,000 where, roughly, the security at stake is £500,000,000, is inadequate. We find that other countries have made much more determined attempts to deal with problems of this kind. Particularly is that the case in Canada and in New Zealand. It was quite dramatic to follow the progress of the measure brought down by Mr. Coates, as Minister for Finance, in the Parliament of New Zealand. The original provisions of the measure were gradually whittled down until ultimately an important provision in the original scheme was dropped by that government. We can only conclude that this action was due to pressure brought to bear on the government by certain interests,

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

– What was the provision to which the honorable member refers ?

Mr ABBOTT:

– It was a provision that, after re-appraisement over a certain period of years, the farmer should retain 20 per cent, equity in his property. That was entirely dropped, and I can only conclude that this provision was unpopular in certain circles.

Whenever we come to deal with the debt position, the cry is raised that we must not do anything to harm the big financial institutions which have been so valuable to Australia. The principal creditors of wool and wheat producers are as follows: Trading banks, £73,000,000; private mortgagees, £67,000,000; the Crown, £50,000,000; wool firms, £30,000,000; trustee companies, £26,000,000; State banks, £20,000,000; unsecured creditors, £17,000.000; and insurance companies, £5,000,000.

Mr Holloway:

– Has the honorable gentleman been able to secure any figures to show how much those banks have already received in interest and repayment of principal on those loans?

Mr ABBOTT:

– I have, not been able to get that information. Prom the figures I have just quoted, it will be seen that the trading banks have lent £73,000,000, or one-fourth, of loans totalling £288,000,000. Honorable members will realize that these figures to a certain extent are only estimates. No one will deny that a great deal of credit is due to the banks for the assistance they render to this country in its difficulties. After all, banks are simply business undertakings conducted for profit. In dealing with this aspect of the matter it is, however, interesting to read the opinions expressed by the Wool Committee and the Royal Commission on the Wheat Industry. On page 45 of its report, the Wool Committee says -

In regard to a national policy - (c) this would include the permanent problem of closing the gap between total costs, including a return upon capital invested and future prices. This involves a reconsideration of the relations between this basic industry and the general economic structure.

On page 25, this report says -

The wool industry needs the lowest rate of interest on its borrowed capital that business prudence can provide. We urge that prudence should be tempered with mercy, and even with a willingness to take risks.

On page 24 of its report the committee, replying to the claim made by the financial institutions that they have greatly assisted the industry says -

We reply that all institutions serving the wool industry and dependent upon it for their capital values, as well as for their future income, are lucky to have any income at all. As “middlemen” they (the financial institutions ) have for the most part built up reserves in the prosperous years. What are the reserves’ for, except for a crisis? And how much more of a crisis are they reserving their undistributed profits for?

On page 22 of its report the Wheat Commission says -

The people of Australia must decide what standard of living their farmer members are to enjoy, and must implement their decision by making any necessary adjustments.

And on page 34 of its report the same commission says -

It is unthinkable that the industry should be left to find its own level. The industry is too important, and its collapse would be disastrous to the whole economic and social system.

Apparently, both these bodies are of opinion that secured creditors must be prepared to share sacrifices equally with unsecured creditors. The latter are provided for in this measure to a limited extent only. The Wheat Commission points out that always there are two parties to a debt - the creditor and the debtor.

I have no desire to attack the financial institutions, but I feel I should be lacking in my duty as a representative in this Parliament of the primary producers if I did not say that a great deal of pressure is being put on men at the present time to go off the land. In other words, these men are being put off the land by certain financial institutions. “Without quoting either the name of the financial institution or the individual concerned in the case, I ask honorable members to consider what would be the feelings of a man who received from a bank a letter of the kind I propose to read. The individual concerned was a settler in. the north-west district of New South Wales, and he received from a certain bank the following letter, dated the 10th December, 1934:-

Dear Sir, - I regret to have to advise you that my inspector has refused to again sanction your limits, and he instructs me that I am to pay no further cheques on your account without reference to him. You must, therefore, advise me beforehand of any future drawings, and wait until I obtain his sanction before issuing cheques.

He further instructs me to say that we will be glad if you will arrange for your finance elsewhere - your woolbrokers may be able to arrange an outside loan for you by which you could clear up the debt to the bank and make a fresh start. If you are not able to do this, then you must endeavour to sell the property while some equity remains.

Mr Scullin:

– I like his idea of a fresh start.

Mr ABBOTT:

– From time immemorial people have gone on and off the land,- but I contend that to-day more pressure is being brought to bear by financial institutions on settlers to meet their commitments than has been the case for the last three years.

Mr Martens:

– That is not peculiar to the wool-grower.

Mr ABBOTT:

– I do not wish to be unfair, but I believe that many financial institutions deal very harshly with their clients.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– I think the honorable member mentioned a very harsh case on another occasion.

Mr ABBOTT:

– Yes. That was a case of a settler in the north-west district of New South Wales whose property was valued at £15,000, and on which he owed £11.000. In that case the financial institution sought to have the property sold in order that it could recover its £11,000.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– Does the honorable member suggest that the banks should give unlimited credit?

Mr ABBOTT:

– No ; but they should not deal so harshly with clients in such circumstances as I have outlined. I now take the extreme step of giving a personal illustration of the attitude adopted by certain financial interests in this respect. I owned a property valued, stocked, at £20,000, on which there was a first mortgage of £5,000. This mortgage, which was held by a trustee company, fell due in 1930 - a year, as honorable members will recall, in which prices dropped considerably and conditions in general were chaotic. Finding myself able to raise only £2,600 to meet this mortgage of £5,000, which was bearing interest at the rate of 4½ per cent., I wrote to the company, pointing out that I could meet a little more than 50 per cent, of the mortgage, and asked for a renewal of the balance. The letter written to me by that trustee company in reply to this request said -

We refer to previous correspondence and to your application for a loan of £2,300 on security of your property . . . and beg to advise having received the valuation thereof . . . at £3 10s. per acre . . .

The matter has been considered by the trustees, by whom I have been desired to inform you that, subject to your signing an approved mortgage, we are willing to lend you the amount, for which application has been made1, for the term of three years, with interest at the rate of 8 per cent, per annum.

I shall not mention the name of the company.

Mr E F HARRISON:
BENDIGO, VICTORIA · UAP

– In fairness to other companies, the honorable member should do so.

Mr ABBOTT:

– I have endeavoured to show that it should not be left to the Government alone to rectify the existing position, but that all sections concerned should shoulder their responsibility in the matter. It seems to me that, without equality of action, any scheme put forward is hound to fail. Other countries have realized that, and have introduced a measure of compulsion. It is difficult, I know, to apply a common plan to these industries. I am not one of those who think that the time has arrived when debts should be written off. The . writing-off of debts would be an admission of failure to grapple with the problem, and an acknowledgment of our inability to extricate ourselves from our difficulties. I believe that it would be better to adopt some plan for the suspension of a portion of the indebtedness. If that were done, and the condition of these industries improved, we should be acting fairly towards many persons who have advanced money to primary producers. I refer the House to what the Wheat Commission has said regarding the difference between writing down a debt, and its suspension. After all, a suspended debt iis still an asset, and may be discharged if prices and other conditions improve. Suspension would also reduce the amount of interest payable, because there would be no payment on the portion of the debt suspended. I regard the interest position as the most acute with which we are faced at the present time. I have stated publicly, and I now repeat, that I consider that the interest rate could well be reduced to 4 per cent, so far as primary industries are concerned. It seems to me, also, that the time has arrived in connexion with these big advances to primary industries, for provision to be made for the repayment of a portion of the principal sum advanced. The honorable member for Melbourne Ports (Mr. Holloway) had this matter in mind when he asked me how much had been paid in interest. It is known that the amount paid in interest’ on many properties is far larger than the sum originally borrowed. My experience of graziers and. others is that, in days gone by, so long as they were able to pay the interest, make improvements, and have a little for themselves, they did not worry very greatly about the principal debt, and, frequently, it was handed down from father to son over , an almost indefinite period. If the Commonwealth has the necessary power, it should now take steps to secure the repayment of a portion of the principal. In committee, I shall move for the suspension of a portion of the debt by the State instrumentalities that will give effect to the Commonwealth’s scheme. So far as the debt structure is concerned, the matter has to be tackled in more ways than by mere governmental assistance. No one realizes more than I do that the people are looking more and more to parliaments to assist them in their struggles. I have been depressed by correspondence that I have received from many producers, not only within my own electorate, but also in other parts, because it indicates a state of hopelessness in regard to obtain- ing relief from financial obligations. These men frankly say that the power of financial institutions is too great, and that Parliament will do nothing to assist them. I hope that the Parliament will insist upon equality of sacrifice, and a more determined effort by others to supplement what the Commonwealth is doing. I commend the Government for the action it is taking.

Mr CLARK:
Darling

.- It is rather unfortunate that this bill has been brought forward subsequent to the introduction of measures similar in character in the States. Had the converse been the case, the State legislation could have dealt with the problem from a broad point of view, and uniformly throughout the Commonwealth. This will prove to be quite futile, because the writing down of the debts of the farmers will give no more relief to the wheat-grower than has been given in the past. As the Leader of the Opposition (Mr. Scullin) lias pointed out, the amount proposed to be disbursed under this measure is no greater than that which has been paid to the wheat-growers in the form of bounties over the last three years. When it is exhausted, the wheat-growers, like Oliver Twist, will ask for more, and will not derive any real benefit from it.

The Acting Prime Minister (Dr. Earle Page) has stated that this action is in fulfilment of an undertaking given in the policy speeches of himself and the Prime Minister during the last election campaign. I contend that the two proposals were not identical. On the 4th July, 1934, a conference was held between the United Country party and the United Australia party to deal with the matter of debt adjustment and rural rehabilitation. According to the Sydney Morning Herald of the 6th July, a basis of agreement was arrived at which was fair to all parties. The electors were given to understand that the Government would legislate for the writing down of debts in keeping with present-day values. That proposal met with .opposition from the financial institutions and the then AttorneyGeneral, Mr. Latham, said that he would not join up with any government which proposed to write down the indebtedness of the farmers. An employee of the Bank of New South Wales, in evidence, strongly opposed any scheme for the writing down of the debts of the rural community. The headings to the article dealing with the matter, which appeared in the Sydney Morning Herald of the 6th July, were “ Debt Adjustment “, “ Bank Attitude “, “ Opposed to Compulsory Writing Down “. The next item of interest appeared in the Sydney Morning Herald of the 17th July. It read=-

The plan is still the subject of negotiation with financial institutions, including the trading banks.

Later, it was announced that the Prime Minister had abandoned his debt adjustment plan. But for election propaganda purposes, it was persisted with in a very mild form. A subsidy of £12,000,000 was promised to the wheat industry. On the 1 2th August, the Sydney Morning Herald said that the opposition to the proposals revealed in some quarters had led to their virtual abandonment. Speaking over the air on the 20th August, Mr. Lang made the following statement: -

If we examine the question in the light of that information, we must come to the conclusion, that not only does Mr. Lyons’s policy lack any provision for relief of indebtedness, but that a government led by him cannot now, or at any other time, como between those who owe money and those who have lent it. On the question of debt adjustment, therefore, it is fair to say that Mr. Lyons has no effective proposal.

This measure is designed .to protect the mortgagee class, and not the borrowers.

Mr Archdale Parkhill:

– The electors showed their disbelief of that asserliOn by returning the Lyons Government.

Mr CLARK:

– Unfortunately, that is so. I feel certain, however, that after this measure has been put into operation i hey will realize that they were unwise in their choice. There is no doubt that Mr. Lang was right in what he said. This legislation will prove quite ineffective. The authority which finds the money should direct the manner of its distribution. That is not being done. Some one stated during the debate on the Wheal Growers Relief Bill that it was for the needy, not the greedy. I assert that this, grant is for the greedy, not thi* needy. It will protect the interests of the mortgagee, and will be to the detriment of the farmer. I have had experience in country centres of the con ditions of farmers and graziers. About 1920 the conditions became very bad after a period of drought, and many men found themselves in difficulties. I have personal knowledge of a man who, when he returned from the war, had £1,700 on fixed deposit with a bank. Another man had a property of 3,000 acres mortgaged with that bank for £3,600. The man with the money on fixed deposit was invited by the bank to take the property over for the amount of the mortgage. He told me that he did not like the proposal, as it was suggestive of Kerry landlord practices. However, the owner of the property was able to secure an advance of £4,300 from the Rural Bank which was established by a Labour Government in New South Wales. He discharged his mortgage with the private bank, spent £700 in stocking the property, put it on a profit-earning basis and ultimately sold it, realizing £3,000 for his equity. But if a private banking company had closed down on him he might have lost everything. Another man “ whom I knew had a property valued at £12,000, on which the mortgage was £8,000. This was at a later stage, when prices were down, and before the introduction of the moratorium legislation. He lost all his sheep during a drought, and could noi obtain a further advance to enable him to carry on. The result was that he lost the whole of his equity; but the proposition remained a sound investment for the bank, notwithstanding the fall in values. The asset of the bank was not lost, but the whole of the man’s interest in the property was lost. A measure of this description will not prevent that kind of thing from happening. If a medical practitioner -were called in to attend a patient suffering from appendicitis he would not prescribe dope to cure him, but would get to the root of the trouble and remove it. I suggest that, that is what should be done in connexion with our rural industries. I’ can find no provision in this bill to finance farmers to tide them over a period of difficulty. It seems to me that only the banking and financial institutions are likely to benefit by the passage of this bill. The small storekeepers and others, who, in a limited way. have assisted the farmers, will probably suffer heavy losses through the operation of this bill; but the banking and financial institutions will, undoubtedly, see an appreciation in the value of their securities. In introducing this measure the Acting Prime Minister said -

Those with no hope at all must be shifted into avocations that can bo determined only by careful inquiry and study.

Who is to make the inquiry and study? He also said -

The money should be granted only to those farmers who had a reasonable prospect of successfully carrying on after a composition had been made.

That sounds reasonable enough, but, unfortunately, it seems to me that the judge of competency to carry on will be the financial institutions. If those who control these organizations are able to put their hands on some one whom they think more capable of managing a property profitably than the embarrassed person in occupation of it at the moment, they will undoubtedly use their influence to remove the one individual and install the other. There can be little doubt that they will be in a position to dictate terms to other creditors, as they will be the main creditors. This will probably mean that small business men will lose all the money that is owing to them by particular settlers. I direct the attention of honorable members to the following paragraph from the report of certain bankruptcy proceedings which appeared in the Sydney Sun on the 29th January, 1935, under the heading “Farmer Defies Judge; Goes to Gaol” -

Mr. Lynton, for the Official Receiver said “ There is a movement growing up in the country districts of this State whereby it is practically impossible to make a forced sale of a distressed property. Surrounding farmers attend the sale in force and either refuse to bid or make a ridiculously low offer with the result that the Official Receiver is unable to realize on the property. Country auctioneers arc even afraid to act on behalf of the Official Receiver because they will receive no further business from the -farmers. It is an intolerable state of affairs.

The point to notice is that the farmers are realizing that the banking institutions are foreclosing on their fellows. I do not think that anything in this bill is likely to remedy that state of affairs. Assistance to our rural industries should be on a national basis. One of the supervisors acting under the Farmers’ Relief Act of New South Wales, said, in conversation with the honorable member for West Sydney (Mr. Beasley) and myself a few days ago, that a receivership was not a very profitable enterprise at present, but a quasi-bankruptcy business. He added that there would be more profit before very long. He spoke, of course, as an accountant. The effect of this bill can only be to make the position of necessitous farmers worse than it is, because it will place them more completely in the hands of the financial institutions. It has been stated that the debt of the farmers and graziers amounts to about £260,000,000 while the annual interest bill on this debt is about £14,000,000. We have been informed that interest charges account for about ls. 3d. in the cost of producing a bushel of wheat, and on the basis mentioned by the Leader of the Opposition (Mr. Scullin), interest charges represent between 5d. and 6d. per lb. in the cost of producing wool. As the average price of wool is about 9d. per lb., it will be seen that there is not too much profit left for graziers who are heavily involved financially. I consider that as this Parliament is making this money available to the State parliaments, it should determine the manner in which it is to be expended. Small creditors should not be entirely overlooked in the interests of the big financiers. I noticed that in one case referred to in the schedule of specimen cases made available by the Acting Prime Minister, certain creditors had to be satisfied with the payment of 7s. 6d. in tho £1, while the position of the mortgagee actually improved. In the very first instance cited in that schedule, the unsecured creditors received 10s. in the £1, whereas the asset of the mortgagee improved in value from £1,920 to £2,410. Some creditors therefore suffered heavy losses, while the equity of the mortgagee improved substantially.

Sitting suspended from 6.15 to 8 p.m..

Mr CLARK:

– Under the present arrangement the mortgagee has already collected his interest, or it has been added to the mortgage. The small creditor has had practically no payment from the estate of the farmer, yet it is proposed in the legislation we are now considering that the mortgagee shall receive preferential treatment. “When the Farmers Relief Bill was first introduced in New South Wales, it wa3 proposed to describe as receivers the officials who were to administer it, but as thi3 was too suggestive of bankruptcy, ‘their name was changed to supervisors. In operation in New South Wales this act has proved most unfair. Already 2,000 farmers in difficult circumstances have declined to come under the act, because they feel that to do so would be merely the first step towards bankruptcy. Those who come under the act forfeit their right to protection under the moratorium legislation, so that should the stay order be lifted they are liable to be forced off their holdings. Section 3 6 it of the act provides that the board shall bc entitled to call up any advances to the farmer, and exercise its rights under any security relating thereto, notwithstanding anything to the contrary contained in the Moratorium Act of 1932, or any act amending or replacing that act. Section 32 states -

Any farmer who while subject to this act receives any moneys whether as the proceeds of marketing of any produce of the farm or otherwise which moneys are receivable by the supervisor in accordance with this act shall account to the supervisor forthwith for the same.

Any farmer who neglects or refuses so to account shall be liable on summary Collviction to a penalty not exceeding £100” or to imprisonment for six months.

Many farmers are in such circumstances at the present time that they are compelled to engage in outside work, such as shearing or road-making, in order to obtain ready money. Under the act, the money so earned may be claimed by the supervisor, and if it is withheld the farmer is liable to a fine of £100 or six months’ imprisonment. The effect of this section is practically to make criminals of the farmers. In New .South Wales today about 1,800 farmers are carrying on under the Farmers Relief Act. There are 54 supervisors who receive more out of the farmer’s estate than the farmer does himself. The supervisor receives in respect of each farm £5 5s., and 3 per cent, of the gross proceeds of the farm, while the farmer himself is allowed only £75 a year with which to keep himself and his family. Do honorable members believe that that is just treatment for the farmers? Yet we are being asked to hand money over to the State authority to be U3ed in the manner I have described. It will be found in practice that current interest on the mortgage, arrears of interest on second mortgages, and liens on crops must all be satisfied before the farmers get anything. In the district bounded by Temora, West Wyalong and Lake Cargelligo there are 362 fanners carrying on under the Farmers Relief Act of New South Wales. The supervisors, who receive £5 5s., plus 3 per cent, of the proceeds of each farm, also carry on. their ordinary occupations of stock and station agents, accountants, or solicitors.

The farmers are in their present unfortunate position, because of a deliberate policy of deflation practised by the governments and banks some years ago. Money has a greater purchasing power now than it had at the time the farmers’ debts were contracted, with the result that the debts have become harder to pay. The effect of this present legislation will be to shift the risk of the farmers’ debts from the banks to the people as a whole, thus giving greater security to the banks. The small creditors will be cut out altogether. The storekeepers, who are owed money by the farmers, owe money themselves to the wholesalers and manufacturers. If they receive only 2s. in the £1 on those debts, as is indicated in the schedule distributed with this bill, they will lose a great deal of money, while they will be compelled to meet their own obligations in full. The present proposal would be fair only if the Government brought down legislation to deal with the whole debt structure of the community by writing down debts in accordance with the increased purchasing power of money. In his second-reading speech the Acting Prime Minister said that, in numerous instances, the secured creditor had lent, say, £2,000 on the security of a property valued at £5,000, and it would be unreasonable that, when a slump came, he should be forced to take less than that to which he was entitled. I agree with that, but there is room for difference of opinion as to what the secured creditor is entitled to. “When the purchasing power of money increases, the responsibility of the farmer alters. The Leader of the Opposition pointed out this afternoon that, whereas five bushels of wheat were worth a sovereign before the depression, 20 bushels of wheat were only worth a sovereign now. This principle of adjusting debts in accordance with the value of money . has been made to apply between nations, and it should apply between individuals. I remember reading once that the Allies ceased paying war debts to the United States of America because Germany had ceased to pay the indemnity which it owed to them. Germany had stopped paying the indemnity because the United States of America had stopped lending it money for that purpose. In that instance, there was a general shifting around of the debt burden, and something of the same thing is contemplated as. the result of this proposed legislation. Dealing with war debts, Irving Fisher, a professor of economics at- the Yale University, stated -

The wm debts bath in this country and in Europe, for instance, have been, for the most part, contracted at high price levels. If we should drop hack to the’ 1913 level of prices it would almost double the burden of our national debt, for the Government would have to repay dollars almost twice as big in purchasing power as the average of those which it borrowed.

It is the same in regard to the debts of individuals. There are precedents for the adjustment of debts according to the purchasing power of money. The Church in England is supported by tithes, a tax which was at one time paid in commodities, and in Scotland the practice of paying, not in kind actually, but in money according to the value of commodities, was in operation. The Government should scale down all debts and mortgages according to an index figure based upon the purchasing power of money. For instance, a debt, of £100 incurred in 1929 could, without injustice, be paid to-day with £72 14s. as this amount has the same purchasing power to-day as £100 had in 1929. Since 1929 the price of wool has fallen by 47 per cent., and the price of wheat by 38 per cent, in Australian currency. The prospects ahead of the wool industry are not bright.

To-day, in France, wool is worth about 4£d. per lb. on a gold basis, and I was told by a French wool-buyer recently that his purchases from last year’s clip were still in store, as well as part of the previous clip. Taking 1921 as a basis, a debt of £238 would be fairly paid with £253 in 1929, and the same debt would be fairly paid in 1931 with £205, while to-day it should be discharged with £184, according to the altered purchasing power of money. It is, therefore, not a matter of robbery to write down these debts. It is simple justice to do so; because the debtors are entitled to re-pay the exact amount of debt which they incurred - that is, to pay only with coin of the same purchasing power. Jevons, in his indices, shows that a debt of £85 incurred in 1789 would be fairly paid in 1809-20 years later - with £161, and in 1849 with £64. A debt of £74 incurred in 1849 would be fairly paid in 1873 with £111. A debt of £100 incurred in 1873 would be fairly paid in 1896 - 23 years later - with £51. The purchasing power of money increased between 1896 and 1914 by 35 per cent., so that it would take £135 in 1914 to pay a debt of £100 incurred in 1897. The point I wish to make is that money has not a constant value, and that debts should be adjustable according to the actual value of money. According to the figures I have given, a debt of £85 was payable 20 years later with £161, whereas 60 years later it could be fairly paid with £64, which would have the same purchasing power.

One sorry feature of this bill is that one section of the community is being singled out for special treatment, as the Government has not the courage or initiative to deal with the indebtedness to the ordinary mortgagee, which should be treated on the same basis as the debts owing to all other sections of the community. There is no obstacle to this proposition being put into operation, except the conservatism of the Government, or its unwillingness to adjust debts at their present-day value. This is a case of the protection of the capital interest to the detriment of all other interests in the community. The Labour party, during the election campaign, had a policy to deal with this proposition, and my leader (Mr. Beasley), in his policy speech, advocated :

Suspension of private indebtedness of farmers and home-buyers, pending stabilization, to be followed by equitable debt adjustment and the writing on” of actual overcapitalization of every section of the community.

That is the policy that we stand behind to-day. An amendment will, I understand, be moved by our party along those lines, stipulating that the money shall be made available only on condition that the State governments arc prepared to write clown on an equal basis all debts due to both mortgagees and the business community. As I pointed out curlier, the business community might bc seriously handicapped by having its debts substantially written down while the financial interests made no sacrifices. The customers of business establishments might be gravely imposed upon by having to pay higher prices for commodities, due to the fact that serious loss has been entailed on those establishments by the writing down of the indebtedness owed to them. This is a .matter that concerns the taxpayer, not only because he has to find the interest on the loan, but also by reason of the higher prices he will have to pay for commodities. Something along the lines I have indicated will be done as soon as people realize their position, and ask for it to be done, but not before. I have here an extract from a speech made by Bishop Burgmann, of Goulburn, some time ago, regarding the dominance of the financial institutions. Referring to the worker, he said -

Hu is not so readily responsive to Nationalist catch-cries, and when his mind becomes clear, and his determination fixed, he is not likely to remain any longer u passive instrument in the hands of big finance. 1 am confident that, after this measure has been in operation for a little while, if it, is not amended along the lines that wc shall put forward, the people will awake to the injustice under which they arc suffering, and, at, the first opportunity, put into power a government that will attempt to amend it for them.

Mr FAIRBAIRN:
Flinders

– I consider that the Government is to be commended for its courageous attempt to bring about an acceleration of the natural process of cleaning up and adjusting the rural debt position. I say it is to be commended for its bold action, because I do not want in any way to blink the danger of the project upon which Parliament is now asked to embark. Unless the greatest care is taken in the administration and distribution of this money, we may well- see £12,000,000 go down the sink without any appreciable measure of rural debt adjustment having been achieved. The only result may well be, if proper safeguards are not insisted upon, that a taste for further millions will be engendered in the mouths of those who are lucky enough to get hold of this money. I say also deliberately “ to accelerate the natural process of debt adjustment” because all through the depression there has been a certain measure - an alltooslow measure - of debt adjustment going on. I think the reason for the alltooslow progress is to be found, to a certain extent in a great deal of the farmers’ relief legislation, which has been passed by the various State parliaments, producing a sort of stalemate. Nevertheless, the greatest barrier to recovery in this country to-day is the hopeless debt position in the rural industries. I do not think the Government, or anybody else, considers this bill to be a magic wand which will bring about rural rehabilitation immediately. “What the Government intends, and what, if the measure is properly administered, may be effected, is a cleaning up of the debt position which will prepare the ground for a- return to prosperity by several other measures which are essential for the rehabilitation of the primary-producing industries. These include the reduction of costs by other methods, the retaining and increasing of overseas markets, and an extension of the home market.

There are, I consider, in the world to-day, two very different debt problems. One is the normal debts which have been incurred, the other is the abnormal debts which have been incurred by an excessive and unwise use of the credit system.

When the war ended there was a tremendous potential consumer-demand in the world. The energies of the civilized peoples had all been concentrated, for some years, upon destruction, and the goods of ordinary normal civilized life had not been produced. These were urgently required by the peoples of the world, and those who wished to supply them, desiring quite naturally to profit by manufacturing them, realized that the purchasing power of the world was not sufficient to meet its requirements, and so embarked on a greater and greater use of the credit purchase system. Each year the purchasing power was inflated more and more by what may be termed the more and more liberal use of credit. The only figures that I have ever seen to illustrate my point were those compiled in the United States of America in 1926. They showed that, in the year 19.25., the people of the United States of America pledged their earnings for 1926 to the extent of 5,000,000,000 dollars, or £1,250,000,000 sterling. They naturally decreased their purchasing power for 1926 by that amount. If the manufacturers wished to continue their sales, they had not only to make a similar credit arrangement in 1926, but had also to make additional facilities. This went on and on, not only in the United States of America, but in every other country in the world as well, until the people arrived at a stage at which they had nothing further to pledge. I believe that in America a condition of things was reached in which one could take delivery of a motor car by paying down about £10. Finally, however, this credit system was abused to such an extent that it could no longer be extended. This meant the curtailment of trade, resulting in the curtailment of employment in industries, ‘ followed in turn by a further curtailment of trade. Just as trade had been built up like a snowball, it melted away like a snowball that had been left out in the sun. This process went on throughout the world, and was, I think, the major cause of the depression. One could point to other causes, and indicate many reasons why the position is not improving; but I think that was the major cause. In rural communities, owing probably to the sim- plicity of those of us who live in the country, the debt structure mounted up to an even greater extent than it did in the cities. The fact remained that the farmer was landed, in most cases, with a hopeless load of debt. I can give as an illustration the particular case, which is typical of many, of a farmer in whose affairs I was interested as a trustee. In 1929 he bought a property at the peak period of prices. He paid £3,000 in cash, which was more than the normal proportion at that time, and should have had an equity of £3,000. When, eighteen months later, we examined his affairs to see how they could be fixed up, I found, on adding up his total debts, that they amounted to 30s. an acre more than the price that he had paid during the boom period. He had a tractor which he had bought for £560, on which he had paid only £70 in cash. Everybody knows that, immediately that tractor did a day’s work on the farm it depreciated in saleable value by more than that £70. He had therefore been given that tractor without any adequate security. He had also a header, valued at well over £100, on which he was to pay nothing until after his first crop. That farmer cannot be excused for having run’ himself hopelessly into debt - the debt would have been hopeless even if wheat had remained at 5s. a bushel - but I consider that those people who almost forced implements on him on those conditions cannot be held free of responsibility. Their loss is inescapable, and must be acknowledged.

Mr McCall:

– The farmer would not have taken the implements if he had not wanted them.

Mr FAIRBAIRN:

– I said that he could not be held blameless; but he was aided and abetted by people who, to keep up their turnover, made sales on quite inadequate security. As I shall show later, these people must bear a very big proportion of the loss, which cannot be escaped. Their position cannot be considered in the same light as that of the first mortgagee who lent his savings on a big margin of security, and with what was supposed to be a certainty of repayment. It may be urged, and quite reasonably, that what the Government proposes to do for the rural industries it should do for all debtors. However, there are two main justifications for this measure. The first is that our exporting industries are the basis of the economic structure of this country. It may be urged that when our grandfathers came out to this country they should have followed the example of the mutineers of the Bounty, and established themselves as a self-contained community independent of the rest of the world. However, they decided that this country was admirably suited for primary production, and they made up their minds to concentrate on primary production, selling their products in the markets of the world, and buying their manufactured products from the rest of the world. Although since those days we have developed very efficient secondary industries, we have to admit, whether we like it or not, that our exporting rural industries are the foundation of our economic system. We cannot get away from that fact. We are very proud of the development of our capital cities, and also of our secondary industries, but we built those cities and developed those industries for the most part on capital from abroad. On what security did we ‘borrow that capital? It was on the security of our exporting industries. Therefore, unless we are prepared to reshuffle and deal again, to plunge Australia into a state of chaos, making it necessary for us to adopt a fiveyear plan as the Soviet has done in Russia, in order to create a self-contained Australia, we have to admit that our exporting industries are the foundation upon which the whole of our industries rest. Consequently, from a national viewpoint the Commonwealth Government is well justified in proposing to make available this money in a hazardous but merited effort to clear up the debt position of the rural industries. This policy is also justified on the grounds of fairness because, undoubtedly, both in times of prosperity and during the depression, the rural community has not had a fair reward for its efforts. By the rural community I mean the country worker, the small farmer, and the big pastoralist as opposed respectively to the worker, the man of moderate means, and the big manufacturer in the city. Ample instances tojustify this conclusion have been provided, particularly within the last few years. Well-known pastoralists on a big scale, once reputed to have been fabulously wealthy, now have to consider carefully whether they can subscribe £5 for the relief of those in their local village, while their counterparts in the cities are able to make donations of £10,000 or even £100,000 for similar objects. I am not criticizing the actions of such men; they have proved themselves great citizens; but the fact remains that, owing to the unequal rewards of efforts in the past, those who conduct big businesses in the cities have had tremendous rewards for their efforts compared with those who carry on pastoral businesses in a big way. This comparison applies also as between the station-hand and the worker in the city.

Mr Lane:

– Wages are lower in country areas.

Mr FAIRBAIRN:

– In spite of the fact that a station-hand works longer hours, and does more arduous work than his counterpart in the city, he has to bear more responsibility in his work. The responsibility of the city basic wage worker in his job finishes when he knocks off work in the evening. The stationhand, very frequently, when conditions are unfavorable, has to be out late at night rescuing sheep, or doing other urgent work, and he is not paid in proportion to the work he does, for the simple reason that there is not sufficient profit in primary industries. Those industries have no means of approaching the Tariff Board to ask. that their prices be raised to enable them to pay higher wages. Often in the past the country employer has had to fight in many ways the just demands of rural workers for higher wages, for the simple reason that he has not a sufficient margin of profit to pay such increases. Thus, on the ground’ of fairness as between primary and secondary industries, I claim that this effort to help the rural industries is justified.

The Leader of the Opposition made a remark which I did not quite follow. This is unusual, because the right honorable gentleman- is almost invariably very clear. However, in talking of farmers hopelessly in debt he said that many farmers deserved to be in sues a position, because after paying off one farm they had acquired two or three other farms, simply in order to increase their holdings. He said that such a course was justified where the farmer acquired the additional holdings in the interests of his children, but was not justified otherwise. Wouldthe right honorable gentlemansay that it would be a disgraceful thing if Messrs. H. V. McKay extended their works, and, by so doing, gave employment to twice their number of workers ? I think he would quite rightly applaud such a step and point to it as an achievement. Why then should it be a disgraceful thing for a farmer to try to expand his enterprise? I cannot underthe right honorable member’s reasoning in this respect. I believe that a farmer should not be expected to be quite content to carry on for ever as a small farmer. Every one should have the opportunity to expand his business. That is only fair play and is the incentive we require to secure greater and greater efficiency in any industry.

It is important that this bill should be discussed in detail, because the success or failure of this project is going to depend almost entirely on the methods of administration decided upon by the various State governments. Honorable members have an opportunity to examine the proposals of only two out of the six State Governments. In this respect we find ourselves in a difficult position. However, we cannot blame the Commonwealth Government for this handicap, because at least six months ago it made known to the State governments what it intended to do and asked those governments to submit proposals. I do not know why the Victorian Government has not submitteda proposal. Possibly it is because certain gentlemen in the Parliament of that ‘State who talk a great deal about the need for rural rehabilitation are more interested in rehabilitating themselves on the treasury beach of the Victorian Par^ liament than they are in solving this problem.

Mr Gander:

Sir Stanley Argyle for instance,

Mr FAIRBAIRN:

- Sir Stanley Argyle can be held quite blameless in this matter, because he handed it over to his gallant allies. of the

Victorian Country party to give those gentlemen the opportunity to submit a proposal to the Commonwealth. Those gentlemen claimed that they had a proposal for administering this money, but they considered it to be far more important to stab their colleagues in the back in order that their friends might get ministerial salaries than to go ahead with their proposals.

Mr. SPEAKER (Hon.G. J. Bell).Order!

Mr FAIRBAIRN:

– Perhaps my remarks have been a little irrelevant, but I have explained one reason why we are handicapped in discussing this proposal. The right honorable the Acting Prime Minister indicated certain provisions which he hoped would be carried out by the State governments. I feel quite certain that he would like in every way to insist on these . provisions being carried out to the letter, but I cannot see how that will be assured under this measure. It has been suggested that the Commonwealth Auditor-General at the end of six months should investigate the accounts and submit a report as to whether or not the State governments are carrying out the proposals embodied in this measure. It would be most impracticable. I realize it is very difficult to insert into this measure any provision to ensure that every intention of this Parliament will be carried out. Even if we insisted that a Commonwealth trustee should be appointed in each State to provide such a safeguard it would be most difficult for such trustees to discover whether the terms of this measure were being departed from. Obviously, it would be impracticable to have every case, which is submitted, examined by two separate authorities. Therefore, in this respect, we have to take this measure somewhat on trust. Two dangers I see are, first, that this money will be wasted in an attempt to salvage hopeless cases, and, secondly, that sufficient encouragement will not be given to secured creditors to co-operate in this project. The Acting Prime Minister explained that there are three classes of farmer-debtors. The first, ‘and fortunately the biggest class, is the farmer who can handle his debts provided the government, reduces his costs in other ways and by the. making of suitable trade agreements and the maintenance and expansion of markets so that the farmer -will benefit by getting higher prices for his products. Those are other methods of rural rehabilitation with which this Parliament will have to deal. Fortunately, the great majority of the farmers, if given proper assistance in other directions, can handle their debts.

Secondly, there is the marginal farmer, upon whom, I consider, every effort should be concentrated. He is the man who, with even a slight improvement of prices and other assistance, would still have a debt that he could not carry but who could carry a reasonably adjusted debt.

The third class comprises those who are in an absolutely hopeless debt position. From the point of view of numbers, I do not think that they represent a very big percentage of the total number of farmers; but their debt would represent a substantial percentage, and if the States were to attempt to salvage them the £12,000,000 might easily be frittered away without a single farmer being placed in any better position than he now occupies for the discharge of his indebtedness. The Government should insist upon the exclusion of these hopeless cases from the provisions of the act. Many of them are hopeless because they are endeavouring to farm land which is not suitable for farming of their particular type. But there are others on the very best wheat country who, with a boom psychology, paid £20 an acre for land on which they could not possibly pay their way even with wheat at 5s. a bushel. It is often suggested that if we were to allow any farmers to go to the wall -they might be replaced by less’ efficient men, and farming would cease to be a profitable occupation, I do not think that that applies in these cases. Many of the best wheat-farmers in Australia, when urged to sell their farms for £20 an acre during the boom . period, said to themselves “ We cannot possibly make any appreciable interest with land at £20 an acre, even at the present price of wheat; why not retire and invest the money elsewhere?” They were the shrewdest and most able farmers. Many of them retired, and are living in the suburbs of capital cities. Some are now in dire straits, because they received only a small cash payment, which they invested in a home, and are dependent on the interest from the balance of the purchase price, which they are not now receiving. In the majority of cases they are much better farmers than those who paid them £20 an acre for their properties. Therefore, it is absurd to say that if we allowed such optimistic, inexperienced men to suffer the desserts of their inexperience, farms would go out of cultivation. The last thing which normal mortgagees who have invested their savings in farms want to do, is to foreclose.

Another point to which I wish to refer is the need for the States to give some encouragement and incentive to secured creditors to co-operate in the compositions effected. The honorable member for Echuca (Mr. McEwen) has suggested that there should be a compulsory writingoff or suspension of all debts not covered by the present value of the farms. I submit that that offers no solution of the farmers’ difficulties. Where a man has a small but an insufficient equity, some encouragement should be held out to the secured creditors to write down his debt to them, and thus have restored to them legal security for their investment, which they do not hold at the present time.

Mr McEwen:

– What would induce them to do that?

Mr FAIRBAIRN:

-If the farmer’s equity is a small one, the indebtedness is not really secured. It may theoretically be covered, but if they were to sell they would not realize the amount of the debt; and if they had to put in a manager they would lose on the undertaking. Therefore, I suggest that the act should provide that where creditors, and particularly secured creditors, agree to a reasonable proposition, and make some definite effort to put the farmer on a fair basis, they shall have their legal security completely restored to them. There should be finality in the matter. Having agreed to a sacrifice, if the new agreement cannot be carried out by the farmer, the creditor should be able to take what steps he thinks fit to save as much as possible from thecollapse.

Mr Frost:

– The honorable member is studying not the farmer, but the mortgagee.

Mr FAIRBAIRN:

– I am studying the farmer in every way. I suggest that the secured creditor should be encouraged to take this action voluntarily, and should even have pressure applied to him. If he did not make what was considered a reasonable offer by those administering the act, he could be told, “ We wipe our hands of the matter ; the farmer will remain under the existing relief conditions “. If the creditor made a real and an adequate attempt to put the farmer on a sound basis, he in turn should have his rights restored to him in full. It is deplorable that we should have had to resort to moratorium legislation; but we are passing through quite abnormal times, and although this relief legislation has not worked out as well as Parliaments hoped, it nevertheless was justified by the circumstances. But we do not want to perpetuate this sort of thing. To do any good, this bill must have an air of finality. I am quite sure it would be found that trustees and those who have invested their savings in mortgages, would gladly make a substantial contribution to the compositions for the sake of complete restoration of security. It would be in their interests to do so. I deplore the attitude adopted by honorable members like the honorable member for Franklin (Mr. Frost), who interjected a little while ago. They regard as disgraceful any advocacy of the rights of creditors. Although the Leader of the Opposition admits that those who have invested their savings in mortgages are not obtaining a very big return, he for the most part refers to them in scathing terms, and regards them as Shylocks. I would point out to him that the big financial magnates do not invest in mortgages. The big manipulators of finance can make much more substantial profits in other directions. Practically all mortgages are held directly or indirectly by the rentier class - retired farmers, business men, and the widows and children of retired persons. Although, in common with the majority of people, they wish to enjoy as big an income as possible, they are not so much exercised in their minds in regard to interest rates as they are in regard to security.

Mr Beasley:

– The report of the commission does not show that.

Mr FAIRBAIRN:

– I see as much of these things as any honorable member. Of countless mortgages that I have seen, very few are held by what one may describe as wealthy persons. It is the retired man who wishes to make provision for his widow and children upon his death, or the man who has decided to relinquish active farming operations, who engages in this class of investment.

The Government should concentrate on the two points that I have raised. The money should not be squandered on hopeless cases, and there should be some air of finality. Comment has been made upon the fact that only £12,000,000 is to be distributed for the relief of the tremendous debts that exist. If the act is reasonably administered, the distribution of that £12,000,000 should lead to relief being given to an amount of anything from £40,000,000 to £50,000,000. It would be quite wrong to make any amount available unless adequate compositions were made by creditors. If £500 is advanced, there should, be a reduction of the debt by at least another £1,000. The margin should be even bigger; the reduction should be in the ratio of 3 to 1. That reduction should be made partly by the unsecured creditors accepting a certain amount in the £1, and partly by the secured creditors writing off a definite sum for the sake of the additional security thus afforded.

There is one other point to which I should like to refer. An erroneous impression may have been left by the reference of the honorable member for Gwydir (Mr. Abbott) to apparently harsh action by a trustee company.

Mr Martens:

– That is not an isolated case.

Mr FAIRBAIRN:

– I venture to submit that it is most isolated. Many persons are so ignorant of the position in regard to trustee companies that they imagine them to be Shylock money lenders, who make these investments on their own behalf. There are no big holdings in trustee companies, for the reason that under the law they are only allowed to issue 1,000 shares to a shareholder. The establishment of trustee companies came about in this way: Men who had a reputation for honesty and business ability often found that they were obliged to devote much of their time in an honorary capacity to the administration of the estates of deceased friends and relatives. A number of these people, recognizing the need for a trustee company to handle estates entrusted to individuals, formed such an organization and found that it gave- every satisfaction. This example was followed by others. These trustee companies at first did not make large profits, but as the facilities offered by them become more widely known their business increases; the profits of the shareholders are adequate, and the shares are at a premium. The shares are in small holdings. The average director of a trustee company is not on . the board because of any profit he may derive from the operations of the company, but because he realizes the value of the service which it gives. Possibly he, himself, desires to escape the arduous responsibility of administering certain estates, and, therefore, he hands the work over to an organization which has special facilities for carrying it out. He goes on the board to see that the affairs of the company are properly conducted. I happen to be a member of the board of directors of one of these companies, and although I have held that position for only a short period, I have been most interested and gratified to note the reasonable attitude adopted by the company, and by most of the rival companies, in their administration of estates at this difficult time. I commend the Government upon its courage in embarking on a dangerous undertaking, with a view to effecting a clearing up of farmers’ debts, in order that through the well-being of the rural industries Australia may return to national prosperity.

Mr MARTENS:
Herbert

.- Listening to the remarks of the honorable member for Flinders (Mr. Fairbairn), one might imagine that the pastoral companies were composed of good men ; but I remember that when I had occasion to fight them in the Arbitration Court, even in prosperous times they strenuously opposed the granting of increases of wages and improved working conditions to their employees. When wool was worth up to 48d. per lb. they fought tooth and nail against the payment of more than 30s. a week to stockmen. This afternoon I asked the honorable member for Gwydir (Mr. Abbott) what would be the value of the proposed relief to individual farmers, and the Minister for Defence (Mr. Parkhill) interjected “£12,000,000”. I should like to know what the measure will be worth to those in dire need of assistance. Something more than this bill is required. The honorable member for Echuca (Mr. McEwen) was proceeding on right lines when he suggested that the appointment of a board was necessary. I contend that debt reduction can be effected only by organized efforts, and by the various governments meeting the farmers’ creditors in conference.

On the admission of. the honorable member for Flinders, the debtors bought in when the prices of land were abnormally high, but to-day land values have heavily depreciated. Many holdings were sold during the boom period on small deposits. Farms priced at £13,600 were sold on a deposit of £75, and properties valued up to £9,000 changed hands on the payment of deposits ranging from £10 to £30.

Mr Lane:

– The purchasers were very foolish.

Mr MARTENS:

– They bought land under those conditions because they hoped to improve their position. The sellers of those properties are the persons who ought to be prosecuted, because they knew that the buyers had no hope of ever owning them. A close inquiry into the debt question should be initiated by the Government, and there should be collaboration between the Commonwealth and State authorities and those who have advanced the money owing by the farmers.. Take the position of a man who is hopelessly involved financially, but who will receive no assistance. Is he in trouble because of incapacity, or because he has not made a legitimate effort to avoid indebtedness? If hot, he has every right to assistance. The problem will not be nearly solved by the advance of £12,000,000. This money will not be circulated; it will go into a frozen asset. Of what benefit will £12,000,000 be in meeting indebtedness stated to amount of £500,000,000? It is a mere drop in the ocean.

It was stated to-day by the honorable member for Gwydir, and in the last Parliament by the honorable member for Kennedy (Mr. Riordan), that when the Financial Emergency Act was passed the mortgages in individual cases such as those indicated by the honorable member for Gwydir were called up, in many instances, by the banks. The mortgages were renewed at an increased interest rate of 1 per cent. Presumably these men were to be helped by aggravating their position. I appreciate the value of writing down the principal debt; but a reduction of interest to 3 per cent, or 4: per cent, would be of enormous benefit. I believe that the intention of the Government is to benefit the farmers; but, as I have already said, something more than the benefit to be afforded by this bill is required. It would be advisable to appoint a select committee of this House to inquire into the whole matter, and report upon it as quickly as is humanly possible. Such an investigation will have to be made sooner or later. As remarked by the honorable member for Darling (Mr. Clark), civil debts will soon have to be dealt with by a method similar to that adopted in regard to international war debts. When farmers cannot repay the whole of the money advanced to them, the creditors will have to be prepared to compromise with them.

The honorable member for Gwydir, in reply to the honorable member for Melbourne Ports (Mr. Holloway), said that in some cases more money had been paid back by way of interest than the original amount borrowed. I suggest that no great hardship would be inflicted if the creditors in these cases were told to wait a long time for their money, until more legitimate debts had been partially discharged. It is true, as’ in the case of national debts, that private debtors have often paid back more in interest than the amount of the original debt. Suppose a man has worked on a farm, with the assistance of his wife and family, for fifteen or twenty years. It should not be possible in Australia, at all events, for that man to be told that, unless he can meet his commitments, he must leave his holding. By his labour over many years he has created real wealth, and has probably spent considerable sums in improving the property. It would be monstrous to tell such a man to vacate his home and seek other employment. The honorable member for Martin (Mr. McCall) remarked that any farmer was better off than a. man on the dole. I agree with him. A man on the dole has fallen as low asa human being should be allowed to go. While a farmer may be deriving practically no income, he at least has a home, and a means of living without cadging.

The policy advocated by the Leader of the Opposition (Mr. Scullin) will help to find a way out of this morass. With all deference to those . who say that the financial institutions have done remarkably good work, I contend that they have been extremely well paid for it. Although the honorable member for Flinders said that the banks had not lent the money owing by the farmers who are in debt, I know quite well that a great deal of it has been advanced by those institutions. The official figures from documents quoted by the honorable member for Gwydir show that the loans made to farmers by those institutions are greater_ than those received from any other source. Nobody who has had access to the records, and has kept his eyes and ears open, can be ignorant of the fact that the banks and financial institutions have advanced a very large sum of money to the farming community, and have charged an exorbitant rate of interest. The worse off a farmer is the harder these institutions make the borrowing proposition for him. I say quite candidly that if the banks and other financial institutions could see their way to improve their position at the expense of the graziers and farmers generally, including the sugargrowers, they would not hesitate to do so. Some honorable members seem to imagine that the sugar-growers are wealthy people; but on two occasions I made representations to the previous Government with the object of securing a moratorium for their benefit. Many of them paid too much for their land with the result that when the bottom fell out of the sugar market, as it fell out of the market for many other commodities, they found themselves in an extremely difficult position. The purchasing of land at unduly high prices, as described by the honorable member for Flinders, was not peculiar to the men engaged in any one primary industry. Exorbitant prices were paid for land, and high prices were also paid for machinery, by many people who were not really in a position to bear such liabilities. These unfortunate individuals were, in many cases, encouraged to buy both land and machinery by other people who gambled on prosperous conditions continuing indefinitely. Farms were bought on very small deposits with the result that when hard times came it was impossible for the purchasers to meet their commitments. The honorable member for Flinders referred to the extent to which tractors had been purchased. “We all must know that hundreds of farmers bought tractors for which, obviously, they had very little use. But I am glad that horses are again being employed on many farms, with the advantageous result that a market is being found for horse fodder, and the consequent result that less American or other foreign oil is required. If the Government desires to assist tlie primary producers in the best possible way it should cause a thorough investigation to be made into the whole situation by a well qualified tribunal, in order to ascertain how the assistance can best be given. It is useless to keep men on -properties that, obviously, can never yield them even a reasonable living. Eather than prolong the agony of such people it would be better for the various governments to follow the example of a former Premier of Queensland, Mr. McCormack, who, when he was assured that the settlers in the Beerburrum area could not possibly make a success of their holdings, made other land available to such of them as had proved that they were capable of succeeding. The indebtedness incurred- in respect of the Beerburrum holdings was written off. I have no stupid notions about the farmers of this country, nor, for that matter, about the industrialists. Some people say, and appear to believe, that the farming community is of no real value to the country ; and others hold similar views about the industrialists; but, in my opinion, both the primary producers and the industrialists must go forward hand in hand. Unless there is a substantial industrial community in the country, the primary producers cannot expect to have a valuable home market which, as we all know, is the best possible market for them. The great body of industrial workers of the Commonwealth can, if provided with adequate purchasing power, do a great deal to assist the primary producers. It would be a grievous error for any government to allow a widespread abandonment of farm holdings ; but it is useless for governments to assist the farmers except on sound lines. We all recognize that if our obligations overseas are to be met we must increase our export industries, and to do that we must assist our primary producers over periods of stress. We can do this best by malting it possible for the great industrial communities of Australia to buy the goods that the farmers and others produce. The purchasing power of the people should, therefore, be maintained, and, as far as possible, increased. Unless a policy designed to have this result is put into operation, it is a waste of time for the Government to introduce measures of this character. I have no illusions about the effects on the employment situation of the expenditure of £12,000,000 to be provided by this bill. I do not think it will put many men. back to work. It will enable some people who are now able to meet their obligations in part to do so to a greater degree than at present, and so will enhance their credit; but it will do nothing more. I trust that the Government is preparing plans to cope with the larger problem to which I have directed attention. While it is necessary to ease the ordinary debt position of many producers, I submit that it is also necessary to ensure that there will be a reduction of their capital indebtedness and also their interest obligations. This should be effected by complementary action on the part of the financial institutions, brought about, if necessary, by compulsion. I believe that a successful agrarian population is necessary to the welfare of the Commonwealth. “Without a considerable production of primary goods, raw materials will not be available for our manufacturing interests let alone for export.

Ill fares the land, to hastening ills a prey,

Where wealth accumulates, and men decay.

That is what is happening. It is the duty of this Government to see that money is made available to promote the true welfare of the people.

Mr PROWSE:
Forrest

.- I compliment the Government upon the recognition of the need for the introduction of this bill. We have heard some interesting speeches to-day. It is a good thing that the importance of the primary exporting industries of this country has been emphasized. If we are to consider ourselves a deliberative and thinking Parliament, we must weighup the relative value of our various industries. No less than 97 per cent, of the exports of Australia consist of primary products. I should like to have spoken immediately after the honorable member for Martin (Mr. McCall), for I should then have expressed myself with much more fervour than is now likely. I ask the honorable gentleman what would happen to the beautiful city of Sydney if our exporting industries were suddenly to cease production? It would become a seriously besieged city. But that is not likely, because men with a broader outlook than that of the honorable member will save it. The wool industry of Australia has contributed, during the last ten years, between £40,000,000 and £70,000,000 a year of new wealth to the Commonwealth. The variation is accounted for by the fluctuations in the price of wool. Over the same period the wheat industry has brought approximately £23,000,000 of new money to the country annually. It is this new money that has enabled the people in the honorable member’s constituency to flourish. Our butter, fruit, and other primary-producing industries have also had a great deal to do with the financial stability of the nation. The honorable member appeared to think that it would be better to let these industries disappear.

Mr McCall:

– I did not say that.

Mr PROWSE:

– The honorable gentleman did, in a generous moment, admit that a certain commission of five economists had declared that the tariff policy of Australia had placed a handicap of approximately 9 per cent, on our export industries. But since that declaration, during the period that the Scullin Government was in office, a higher fiscal policy has been put into operation with the result that Professor Copland has said recently that the tariff policy of the country represented a handicap of 15 per cent, on our exporting industries. In these circumstances, it is not surprising that we should protest that other Australian industries are being supported at a cost of approximately £100,000,000 a year in the higher prices of the goods that the people need. This is a reasonable computation. That kind of thing has been going on, not only during the depression, but also throughout the whole 34 years of federation.

Mr Maxwell:

– What has this to do with the bill?

Mr PROWSE:

– It emphasizes the necessity for, and justice of, making money available to primary producers in order that our great exporting industries may be rehabilitated. Up to date the primary-producing industries have not had a fair deal. That is most definitely shown by an examination of the statistical records dealing with the taxable capacity of the people. The taxable income of Australia in 1933 was £122,000,000, of which the great pastoral, mining, and agricultural industries accounted for only £5,000,000, and the manufacturing and other industries of the big cities for £117,000,000. Our insular and short-sighted fiscal policy has not only made it difficult for our primary producers to operate in this country, but has also caused certain overseas markets to be closed to them. The report of the Royal Commission on the Wheat Industry also indicated that the wheat consumed in Australia had been taken from the growers for1s. a’ bushel less than it would have brought had it been sold on the overseas markets. This represents a charge of £3,400,000 on the primary producers every year. If honorable members would consider this matter dispassionately, they would see that the wheat industry has contributed this large sum in reduced prices for a commodity which is sold in this country at a price lower than that at which it could be imported from countries where it is grown by black labour.

Mr McCall:

– Western Australia spent £7,000,000 in placing 1,700 dairyfarmers on the land.

Mr PROWSE:

– The honorable member is still looking at the matter from a narrow view. The States as well as the Commonwealth have made a great blunder in spending so much borrowed money to place people on the land. We say “go on the land, my boy,” and after that advice has been accepted, we place burdens upon the farmers, close the markets of the world against them, and in every way impede their progress. The whole policy in the past has been wrong. Why should not a farmer be protected by the Arbitration Court and be paid wages proportionate to the value of his work? Why does he not get an Australian price for his commodity? Honorable members must be fair in their judgment of these matters. The man on the land works much harder than the man in the city. But the manufacturer is protected by the tariff, and his workmen are protected by the Arbitration Court, while the man on the land has no tariff to regulate his price; he is subject to world conditions. That is why it is necessary to provide assistance such as is proposed in this bill. I issue this challenge to honorable members: Are the secondary industries of this country ready to start off from scratch with the primary industries ? That challenge is a fair one. I have been issuing it ever since I have been in this House. If the primary industries of this country were given fair treatment, they could compete against any other country in the world. If the secondary industries of Australia were placed on the same basis as the primary industries everybody would be much better off, and there would be fewer people on the dole. I am reminded that primary products areprotected by our tariff. That is true. When the leader of the Country party saw the hopelessness of getting a fair deal for the farmers he wisely said, “Let us get in and secure some of the spoils “. Few industries in this country to-day are able to stand on their own feet. What a position for any country to be placed in 1

Mr SPEAKER (Hon G J Bell:
DARWIN, TASMANIA

– Order! I ask the honorable member to connect his remarks with the bill.

Mr PROWSE:

– As I am dealing with assistance to an industry I think that my remarks are in order.

Mr SPEAKER:

– The bill does not deal with assistance to industries.

Mr PROWSE:

– It deals with rural rehabilitation. If the exporting industries of Australia had been left alone, this country would be much better off than it is to-day. The fall in the prices of export commodities has brought about the depression in Australia and has rendered necessary the making of these grants. But while the primary industries have been languishing due to the fall in world prices, the secondary industries of Australia have had tariff walls raised to protect them and they have not been subjected to world prices. If the value of our exports had not fallen by £100,000,000, there would have been no need for the introduction of a bill such as this. But the falling off in the value of our exports has resulted from the policy of this country in past years, and in order to save its face, this Government must do everything in its power to protect the primary industries which create our credit abroad. I compliment the honorable member for Flinders (Mr. Fairbairn) on his sound and sane remarks. I compliment also the honorable members for Gwydir (Mr. Abbott) and Echuca (Mr. McEwen). If the money proposed to be granted under this bill is distributed wisely, it will not only liquidate the huge debt which now rests upon the rural industries by £12,000,000, but may also be the means of reducing it by from £30,000,000 to £50,000,000. I agree with those who contend that rates of interest on mortgages are too high. Having regard to the prices received for primary commodities, it is more difficult to-day to pay 4 per cent, interest than it was to pay 7 per cent, in more prosperous times. Some steps should he taken to reduce interest rates.

Mr Rosevear:

– Repudiation !

Mr PROWSE:

– I do not agree with the principle of repudiation. The banks have come in for a good deal of criticism. The Associated Banks of Australia today have about £300,000,000 on deposit, and practically a similar amount out on advances; but they are mere agencies for the investment of money and are entitled to their “ rake off “, though they should bc content to take a little less. When bank interest rates were reduced from 7 per cent, to 5 per cent., the deposit rate was reduced by a similar amount, so that the difference between what they paid on deposits and what they earned on advances remained exactly the same. In other words, the banks have suffered nothing by the reduction of interest rates, the margin being preserved at 2 per cent. Pressure should be brought to bear upon secured creditors to force them to make some sacrifice approximating that which the unsecured creditors are asked to make. If this were done and rates of interest were written down, farmers would be given some prospect of being able to carry on. The banks and mortgagees are not at all anxious to see men go off the land. In other circumstances, they might be glad to see a man abandon his holding, but in the present state of the rural industries, it is not easy to replace a man upon the land. They are therefore glad to keep men on their holdings. The honorable member for Herbert (Mr. Martens) said that there should be an inquiry into the rural industries. Two inquiries have taken place recently, one into the wool industry and the other into the wheat industry. The report on the wool industry showed that whilst South Africa can grow wool profitably at 6d. per lb., it could not be profitably grown in this country under from lid. to 13d. a lb. The greater part of the wool grown in Australia to-day is marketed at a loss. More recently there has been an inquiry by the Royal Commission on Wheat, which I urge the honorable member for Herbert to read. He will find in it the position of the wheat industry, and the commission’s findings are’ borne out by the re marks of the honorable member for Gwydir to-night. I trust that something can be done to make it obligatory on the secured creditors to make some sacrifice inasmuch as their property rights have been bolstered up by this bill

Mr BEASLEY:
West Sydney

– After listening to the debate so far, I gather that there is very little enthusiasm regarding what might be achieved by this bill. The division among Government supporters, I understand, is sufficiently wide to suggest that in the committee stages there will be plenty of scope for amendment. Honorable members may be better able to appreciate this state of affairs when they recall that, just prior to the general election last yeal’, the question of debt adjustment became very prominent in the minds of all political parties. When the previous Government had nearly completed its full term of office and had not attempted to do anything real to solve the problem, it became a burning question that some definite proposal should be brought forward if it hoped to be returned to the Treasury bench. Considerable speculation subsequently took place as to what the two wings of the party now united in a coalition Government proposed to do in regard to this matter, and one prominent member of the United Australia party, now abroad, is reported to have said that if the proposals of the other wing were accepted, he would not be prepared to enter the Ministry. According to the policy speech of the Leader of the Country party (Dr. Earle Page) as circulated, the Country party and the United Australia party had arrived at an agreement in regard to deb’t adjustment. In that speech there appeared the following words : -

While the State schemes have given a stay to the position they do not go to the root of the trouble, and the scheme proposed by the Country party, in co-operation -with the United Australia party, is put forward, not to supplant but to supplement those schemes already in operation.

That was in the speech as circulated, but was that speech ever delivered? It was not, and when the right honorable gentleman went to the microphone to broadcast his speech he did not utter the words “ in co-operation with the United Australia party.”

Mr Maxwell:

– This is all very interesting, but it has nothing to do with the bill.

Mr BEASLEY:

– It has to do with the bill, because the Acting Prime Minister, when introducing this bill, said that it would implement the policies of the Country party and the. United Australia party as outlined before the last election. It is evident that, prior to the last election, there was no real unanimity in regard to rural debt adjustment between the two parties which now compose the Government, and that the proposals contained in this bill are not those which the election speeches of the leaders of the parties now comprising the Government would have led us to expect. As a matter of fact, very few honorable members who support the Government seem to know what its rural policy is. Others vote just as they are directed, whether they have opinions of their- own or . not, and this boasted freedom of thought of which we hear so much goes by the board. Prom the speeches of honorable members opposite it is evident that the policy which this bill is designed to carry out was decided upon after the policy speeches of the leaders of the Country party and the United Australia party were delivered without consultation with their supporters.

The only point upon which those parties were in agreement before the election was that some form of debt adjustment was necessary, but it is quite obvious that there was no agreement regarding the manner of administration, or the extent of the relief which should be granted.

The speeches which have been delivered by Government followers in support of this bill made good hearing when we remember how the interests they represent reacted to the first proposals put forward for debt adjustment, interest reduction, &c. Even the honorable member for Forrest (Mr. Prowse) has become quite radical on this subject of excessive interest charges. Those who offered such strong opposition to any suggestion that interest rates should be reduced or debts written down have now been forced to accept the principle that debts can no longer be regarded as something sacrosanct. A few years ‘ago those who suggested interest reduction and the writing down of debts were abused and reviled from one end of Australia to the other. Now the very same proposals are emanating from what are claimed to be the most respectable quarters. Eight through the depression until the present time governments have obstinately refused to do the thing that obviously needed doing. Now the system of rigid observance of debt contracts has finally broken down, and even the most conservative persons recognize that the primary producers can no longer be left to the mercy of those who have been exploiting them. Slowly but surely the fortress of orthodox finance is crumbling. The honorable member for Flinders (Mr. Fairbairn) admitted that he supported the bill with great reluctance because it represented a new departure, and he feared the possible results. He realizes that the scheme now under discussion may be merely the first step towards a general writing down of debts.

Mr Fairbairn:

– The honorable member is deliberately distorting what I said.

Mr BEASLEY:

Hansard will record that, while the honorable member congratulated the Government on the move it was about to make, he expressed the opinion that the Government was treading on dangerous ground, and that the consequences of its action had yet to be determined. Evidently, the honorable member still harbours some reactionary ideas on the subject. It must be evident to all thinking persons that this scheme is merely the beginning of a general movement for debt adjustment. The sorry feature of the whole thing is that, in the period during which governments have been gradually forced to recognize the need for action, thousands of good men and women have endured much needless suffering. In many cases their life savings have been utterly lostIt is this weight of suffering that has made itself felt even by the most conservative representatives in the Parliament. However, the savings of these people have been lost, and nothing we can now do can restore them. In too many cases they must look to State governments for relief work in order to carry on.

While we support the movement for debt adjustment, we maintain that the benefits of the scheme should not be confined to primary producers alone. We all know how difficult it is for primary producers to meet their obligations, but other sections of the community are in much the same position. For instance, a man who set out a few years ago to buy his own home has in the meantime suffered reductions of wages, or in many cases, has lost his employment altogether, yet the obligation which he assumed in better times in respect of his house remains the sameAs a result men find that, because of the interest which has accrued, their debts are greater, in some cases by hundreds of pounds, than the original amount, notwithstanding that large sums have been paid off. There are, therefore, other persons who are as much entitled to assistance as are those with whom this bill deals. Many artisans and professional men, as well as thousands of manual workers, are quite as badly off. Remembering their plight, we are forced to the conclusion that the proposals of the Government are not so equitable from the point of view of people . generally as some of its supporters would have us believe. Sooner or later these other sections of the community will have to be catered for. For that reason we on this side do not propose to hinder the passage of this bill. We believe that this is the beginning of a movement that must soon have general application. Even some supporters of the Government admit that it merely tinkers with the problem, in- that it does not even give an assurance of protection to the. farmers who come within its scope. According to the report of the Wheat Commission, the debts of the wheat-farmers of Australia amount to £141,000,000, of which £35,000,000 is owed to the trading banks, £9,000,000 to trustee companies, £18,000,000 to the various State banks, and £30,000,000 to private mortgagees. As a means of settling those debts the’ amount to be provided by this measure will be as a drop in the ocean. Those figures do not support the plea made by the honorable member for Flinders, on behalf of the trustee companies. Although we have not the figures showing the indebtedness of other sections of the community, we may safely assume that what applies to the wheat-farmers applies with equal force to other sections of the community, namely, that the trading banks hold most of the mortgages.

I come now to ask whether the bill is adequate for the purpose for which it has been introduced. The debate, so far, clearly indicates that few, if any, honorable members agree that the amount to be provided is adequate. But, even if the amount were sufficient for the purpose, the bill does not provide that the money is to be made available to the farmers immediately. It is to be spread over three years. That provision again weakens the argument of those Government supporters who contend that this legislation will have early and beneficial practical results.

Another point of major importance arises in connexion with the administration of this legislation when it has become law. This Parliament will provide the money, but it will be expended by the States. During the last fortnight many honorable members have sought information regarding the legislation in force in the various States which will govern the expenditure of this money. I think that I am right in saying that a promise was given that information on that subject would be supplied. So far, it has not come to hand. Some of us hoped that, if the legislation of the States was not satisfactory, certain principles might be embodied in this legislation. As a member representing a constituency in New South Wales, I am particularly concerned with the effect of this legislation on farmers in that State. The Parliament of New South Wales has made provision for handling this money by passing the Farmers Relief Debt Adjustment Bill, which provides for various methods, of dealing with farmers who are in financial difficulties. Although, obviously, in necessitous circumstances, many farmers in New South Wales refuse to be ‘brought under the State act, the reason being that they do not approve of some of its provisions, particularly those which require them to hand over their properties to supervisors appointed by the State Government. If they become beneficiaries under the New South Wales law they must relinquish their rights under the moratorium laws of the State, and, consequently, many of them prefer the protection given by those laws to the relief from their debts, for which other State legislation provides.

Mr Archdale Parkhill:

– There is no compulsion in the matter.

Mr BEASLEY:

– These farmers, who say that if they surrender their rights under the moratorium laws and place themselves in the hands of supervisors they become practically receivers of the dole which is paid to those who, unfortunately, are unemployed. Although they are in need of help they will not participate in the distribution of the £12,000,000 which is to be handed to the States because of the iniquitous scheme adopted by the Government of New South Wales.

Another objection to this legislation is that the Federal Government will not help those farmers whom it considers to be beyond assistance. Who is to decide whether or not a farmer is beyond assistance?

Mr Street:

– The various boards in the several States.

Mr BEASLEY:

– It may be that a farmer in New South Wales who, because he has, in his opinion, an extensive equity in his property, refuses assistance under the State law because it would rob him of his moratorium rights, will be classed as one beyond assistance.

Mr Fisken:

– Not if he has an extensive equity in his property.

Mr BEASLEY:

– By refusing assistance under a State act a farmer will place himself in a position which would deprive him of assistance under this legislation.

Mr Lane:

– If he has a good equity in his property it will not be necessary for him to come under this legislation.

Mr BEASLEY:

– Whether or not his equity is good will be a matter for determination largely _by his creditors. The value of the equity - whether good or otherwise - will depend largely on the point of view; the mort gagee may have one opinion, and the farmer another. We on this side are convinced that, in this respect, there will be a good deal of dissatisfaction, and for that reason we urge the Government to embody in this bill certain principles which will enable cases of the kind that I have mentioned to be treated equitably. Prior to the passing of the legislation of New South Wales, and the introduction of the “ stay order “ the debts of the farmers were practically frozen because the debtors could not pay the storekeepers or other unsecured creditors. After the “ stay order “ is introduced a meeting of creditors is summoned. Unsecured creditors are then given to understand that if they do not voluntarily write down their claims they are likely to receive nothing. Under this form of compulsion they really have no alternative but to write down their claims. Most of these people are country storekepers. I desire to say a word in favour of the country storekeepers as against those for whom the honorable member for Flinders has pleaded. On more than one occasion the storekeepers have stuck to the farmers by granting them extended credit and other assistance. They stood behind the farmers when governments and financial institutions forsook them. It appears that in the adjustments to be made these storekeepers will suffer by having the amounts owing to them reduced by as much as 50 per cent. Why should these traders suffer to that extent, when the secured creditor is to have his interest, and even the principal debt itself, guaranteed by the Government, as is provided for in this bill? If, as is contended, there must be sacrifices, I submit that those sacrifices should be shared by all the creditors. And if any differentiation is to be made, it should be made in favour of the country storekeepers and the unsecured creditors, because they have actually carried the farmers in their time of financial difficulties. They have to meet their own debts because I do not suppose that the city warehouses will make any reductions when rendering their accounts.

Mr Fairbairn:

– Does the honorable member think that the secured creditors have no debts?

Mr BEASLEY:

– If I were to argue on the basis of the purchasing power of the different creditors, I should say that, under present conditions, many of the secured creditors are better off to-day than when the debts were contracted. It may further be claimed that we should deal with the subject more on the basis of attempting to increase the general wellbeing of the country from the point of view of development than from any other angle. I should be prepared to argue that country storekeepers and other unsecured creditors, who in this case, are mostly people associated with the country, having been willing to engage in what may be called pioneering work, and risk their capital in necessary businesses, are a better and greater asset to the nation than ever the private banks have been. I should therefore be prepared to show them greater leniency and consideration, and give them fairer treatment, than proposed by the bill passed in New South Wales.

It is proposed to raise £12,000,000 by means of a loan to be spread over three years, the money to be made available to the States free of interest, but the law in New South Wales provides for a charge of 2-J per cent, to the farmer. The State, therefore, gets the money from the Commonwealth free of interest, and makes the farmer pay interest on it.

Mr Hutchinson:

– That money will come back into the fund again.

Mr BEASLEY:

– It has been suggested during the debate that the money will “ revolve “, as the honorable member appears to suggest. I think it will revolve to the extent of keeping the farmer on his property as a sort of caretaker, only until such time as he becomes what the Acting Prime Minister (Dr. Earle Page) calls “ a proposition not worth bothering about.” If we look around us,, we can find plenty of evidence to prove that that is just what will happen. We are told over and over again how important it is to develop our export trade, but we are faced to-day with restrictions in all directions of all the most important sections of our primary production. It is, therefore, very difficult to visualize- a future in which the money will revolve back to the fund again. The farmer will absorb this amount and much more before he clears himself of difficulties. The system of application of the money by the States is most important. We propose to give the farmers the assistance they say they need, and they do need it if the case put up by country member’s is ‘Correct. I am not here to minimize the position of farmers in any way, because I have a reasonable knowledge that in most cases it is as bad as represented here to-day. If, however, the money is to be handed by the Commonwealth to the States free of interest, it should also go straight through to the farmer free of interest! so that he may be helped as the Commonwealth Government, apparently, intends. But somehow or other it appears to me that all that the bill will do, if the New South Wales law is allowed to prevail, is to help to keep the farmer on his property just so long as the interests which hold the mortgages feel disposed to allow him .to remain. The position appears to be similar to that which confronted this country in the early stages of the depression, when a movement was set on foot to curtail public works. It was pointed out that if the curtailment was too sudden and drastic, bringing about an enormous amount of unemployment all at once, it might have serious repercussions. Those handling the position adopted a steady process of bringing the works to an. end gradually, so that finally people would become accustomed to their new circumstances. This measure seems possible of application on similar lines. It would be bad business, in view of the repercussions that would follow, to allow large numbers of farmers to be put off their holdings at the one time. There is no doubt the Government and the interests which it represents will accomplish that purpose in the end, but the process will intentionally be made slow. Meanwhile, the farmers will be told that the prospects are good, certain adjustments being merely needed here and there, but eventually they will reach the end of the road, as did those who lost their permanent employment in the last few years. It seems to me that the powers in charge of our public affairs - and they are not necessarily in Parliament - have decided that at all costs the citadel of capital must be maintained, and they are now fighting a rearguard action in an endeavour to maintain orthodox methods. This measure, as regards the assistance it proposes to give, appears to lend itself to that policy, taking the steps grudgingly one by one; in the meantime, many will lose their holdings and return to a poor condition of life which they never expected to see again. That position will gradually develop, until many properties will fall back into the hands of the larger interests which have been financing them all along. We on this side of the House believe that, if adjustments must be made, if the storekeeper, the local doctor, and others, have to sacrifice a percentage of what is owed them, the same percentage should be applied to all others who are involved, so far as indebtedness is concerned. If sacrifice is good for one section, it is equally good for others. The Government should adopt a general policy of writing down capital indebtedness. We are told that Canada has evolved a method of dealing with the problem, consisting first of voluntary adjustment on the same percentage basis in regard to all debtors, to be followed, where the parties refuse to come to a voluntary arrangement, by compulsory action through the courts or boards set up for the purpose, just as happens in Australia in industrial disputes which the Arbitration Court is called upon to settle. A similar policy could be applied in Australia. In that way we should approach the problem on a just and equitable basis. This bill is merely an attempt to attack the problem piecemeal; dealing with only one section of the community, which is admittedly in a bad position, while ignoring the claims of other sections who are in an equally bad state. If those who have spoken on the bill believe what they have said- and most of them have indicated that such a course is the right and correct one - they will be given an opportunity by us of laying it down as a principle. I hope it will not be objected, as has been the case in other financial arrangements with the States regarding assistance to the unemployed, that it is not within the province of the Commonwealth to impose any particular conditions. All that is required now is for the Government to lay it down as a principle that all those who have contracted debts shall be put on an equal footing, and that all creditors shall share equally whatever sacrifice is necessary. When that is done, we can at least claim that, as regards primary production, to which the debt question is so important, we have created a precedent under which all are called on to make equal sacrifices. Once that is done, it should not be diffi-cult to apply the principle generally. I leave the matter there, as I am not in a position to know the details of tlie legislation proposed in the other States. We have been informed to-night that the only other State that has made any advance with regard to legislation is South Australia. I gathered from interjections by the honorable member for Barker (Mr. Archie Cameron) that he is not altogether pleased with that legislation and its application to those who are in necessitous circumstances.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– I did not say anything of the sort; I helped to pass legislation on those lines six years ago, before the honorable member’s party was heard of.

Mr BEASLEY:

– I am afraid that most of the time the honorable member does not know what he is saying. We are here, I understand, to help those who need help, in a form commensurate with their circumstances, which are not of their own making. They on their part have done their best to work out their own problems, providing for their own requirements, and, it may be said, the general requirements of the community in regard to export trade. If there are in force, in the various States, laws which are contrary to what the farmers themselves desire, it is the duty of this Parliament to lay down principles which will apply the law to the distribution of this money on a basis fair and -equitable to all concerned.

Mr STREET:
Corangamite

– This bill, although apparently it is receiving practically unanimous support, has come in for a great deal of criticism, especially from honorable members opposite. It is one which, as the Acting Prime Minister (Dr. Earle Page) has pointed out in his second-reading speech, has been brought forward in fulfilment of an election promise made last September. In my opinion, it represents a genuine attempt to face up to at least the initial stages of the enormous problem of rural debts. The necessity for such a bill is, I am afraid, only too obvious. One of the main reasons why it is necessary is that, although primary producers have suffered a tremendous and alarming drop in prices, they have had no corresponding reduction of production costs. Eoi* some years the various State governments have attempted to deal with problems of rural relief by various means, such as moratorium acts, relief boards, protection certificates, stay orders, and so on. In actual fact, however, those measures have done little else than afford seasonal .relief for any one particular year, without providing more than a transient alleviation. That is quite understandable, because nothing fundamental has been done, the fundamental problem being, of course, the burden of debt which still continues. In Now South Wales the Farmers’ Relief Act did make provision for a composition of debt or deed of arrangement between the farmer and creditor; but, except in isolated cases, little happened, for the very good reason that the farmer did not have the money necessary to enable him to place suitable proposals before his creditors. That disability this legislation seeks to remove. Naturally, the administration of it must fall upon the States. It is obvious that a common rule to apply to all the States is not possible. It is important to consider whether or not the conditions laid down by this bill, under which the money will be granted to the States, form a sufficient guarantee that this enormous sum will be used to the best advantage. Unfortunately, enormous sums have been lost in rural relief. We must be sure that, on this occasion at least, there will be no frittering away of these millions. The safeguards provided in clauses 7 and 8 are ample. I admit that at first I thought that it would be preferable for the Commonwealth to retain some form of central control ; but I now believe that that would be impracticable and that the conditions laid down provide as far as possible adequate safeguards for the pro- tection of Commonwealth money. Many difficulties will be encountered by tho States, one of the greatest of which - on this point I agree with the honorable member for West Sydney (Mr. Beasley) - will be for the various boards to decide who are likely to have a reasonable prospect of carrying on successfully. This selection will cause many heartburnings, and in making selections and in determining whether or not the composition is wise the Commonwealth will have to rely upon the efficiency of State organizations. It is useless to attempt to adjust debts if farmers are to continue to grow wheat, wool or whatever else they may be producing at unpayable prices. If that is done, the farmer will merely pile up more debts and will have heavier burdens to support.

This bill does not pretend to cover more than one phase of rural rehabilitation - a point which the right honorable the Leader of the Opposition (Mr. Scullin) overlooked - as only one class of farmer is to be helped. The wider* problem of rural rehabilitation will have to be considered by the Australian Agricultural Council, the meeting of which has unfortunately been postponed. We are concerned only with the debt adjustment of individual farmers who, after receiving the benefit of such debt adjustment, are supposed to have a reasonable chance of carrying on successfully. I was sorry to hear the honorable member, for West Sydney say that the New South Wales Government proposes to charge interest at the rate of 2i per cent, on the moneys it advances. I do not know if all the States propose to make the money available free of interest, but I hope that they will find it possible to do so. It is wise to provide that none of this money can be used by the States for administrative purposes, as all the States have the necessary administrative machinery already in existence. The conditions which the Commonwealth Government will insist upon are clearly set out in the bill. If the honorable member for Flinders (Mr. Fairbairn) will refer to paragraph b of clause 7 he will find that it is provided that money will not be made available to those who have no reasonable chance of making a success of their undertakings. I am also glad to learn that the Government has refused to listen to any suggestion that the money should he used for .the payment of debts owing to State instrumentalities, as the States should continue to shoulder their responsibilities in that regard. They have already shown that they are prepared ‘to assist their own farmers to the limit of their capacity. I do not profess to know whether the proposed allocation between the States is equitable but, as was explained by the Minister in his secondreading speech, the basis upon which the Commonwealth Statistician has worked appears to be sound. Considering the total indebtedness of farmers the amount of £12,000,000 may appear small, but it is difficult to estimate the amount of debts which this sum will liquidate. I read that Judge Payne of South ‘ Australia said that it was estimated that £1,800,000 would probably liquidate debts amounting to £8,000,000, and if that is so this £12,000,000 may liquidate between £50,000,000 and £60,000,000 worth of debt. If this bill is a step towards the restoration of profitable production, and I believe it is, it should be the means of reducing unemployment in many directions. At present many of the farmers are suffering owing to their inability to produce at a profit; but this legislation should provide an opportunity for many to recover their position and ultimately to succeed. There is no doubt that difficulties will be encountered in the working of the scheme. Producers whose position is considered hopeless and who cannot be assisted under this bill-will, of necessity, have to be helped, in some way, by the States, in other avocations. The bill has my wholehearted support, and I trust that it will be given a speedy passage.

Mr NOCK:
Riverina

.- I intend to support this bill because I believe that it is an honest attempt on the part of the Government to assist the farmers to get on their feet again. I regard it as a measure of national importance because fanners and . others producing commodities for export are most important to our national welfare. The average farmer to-day may be likened to a broken-down tractor; we may provide it with kerosene but we cannot get it to work because it is out of repair. Under this scheme provision is being made for the expenditure of £12,000,000 to assist the farmers who can be said to be out of repair. I do not wish to tell a tale of woe or to whine on behalf of the farmers because the Royal Commission on the Wheat Industry has demonstrated beyond all doubt the position in which they are placed. Some honorable members have referred to the fact that the farmers’ debts total £151,000,000 but we have to recognize that there are assets against those debts. We might admit, for instance, that the total debts of the farmers and graziers of Australia amount to £288,000,000, but we have to consider also the value of the land, improvements and stock which they hold. If we do that we may find that in the aggregate there is no deficiency. Many of our farmers have liabilities in excess of their assets, but quite a number have assets in excess of their liabilities. The £12,000,000 to be spent will benefit only those whose liabilities are in excess of their assets, and the argument adduced that the £12,000,000 is a mere drop in the ocean and totally inadequate can be disregarded. Two honorable members on my left said that the amount may be sufficient to liquidate from £40,000,000 to £60,000,000 of debt; and, I think from the experience already gained under the New South Wales Farm Relief Act that that is probably correct. The honorable member for Martin (Mr. McCall), a budding economist, supplied us with a waggon load of figures, which do not represent the actual position. We were told that the annual Government outlay in connexion with rural industries is in the vicinity of £47,000,000 but I would point out that for an annual outlay of that amount the Government has assets. Money has been spent on the erection of silos, rural development, railway construction and irrigation, but the only amounts which can be annually debited to such enterprises are the depreciation and interest costs which are in excess of the income derived from such facilities. In some years the silos pay for depreciation and interest charges and working expenses, and in such circumstances it would be unfair to suggest that the annual capital outlay to increase these facilities represents a loss. Other comparisons have been made in regard to the position of rural industries and secondary industries. “We have been told that Professor Copland has stated that as the result of our protective policy the prices of secondary goods are increased to the extent of £15,000,000 annually, and primary goods to the amount of £13,000,000. In connexion with secondary industries the amount is determined by ascertaining the margin between the local prices and the cost of importing similar goods, but in the case of primary products the margin is taken as between the price of these goods in Australia at export parity, and that charged for them. It would be fairer if the comparison were made on the same basis - local prices and imported costs. Professor Copland also said that practically 80 per cent, of the advantage obtained from home consumption prices is paid by the primary producers. [Quorum formed.”]

These statements, like those made by other economists, seem correct in theory but in practice are wholly erroneous. If the advantage is paid by the producers themselves the position would appear to be that the more benefit the producers derived from a home consumption price the poorer they would become. But the fact is that so many of the costs of primary industries are fixed costs that this does not apply. Interest alone represents half of the primary producer’s costs, and a home consumption price for his product will not affect it. Then take his railway freights. Although in theory the cost of the requirements of consumers affects the cost of living and wages, and, later on, the cost of transport, we find that transport charges to-day, with wheat selling at 2s. 9d. a bushel, are the same as when wheat brought 7s. 6d. a bushel. These facts explode the theory of the economists, and we are justified in fighting to get the rural industries on the same basis as that of the secondary industries so that they might secure a home consumption price for that portion of their produce which is consumed in Australia. Many honorable members on this side of the House are in agreement with the remarks of the Leader of the Opposition with regard to the interest burden. We have continually made representations with regard to the margin of interest which is charged by banking organizations over and above the rate they pay on deposits put in their care. I recognize that they are, as it were, agents for the depositors; but whereas when interest rates were high, the banks’ margin was from 2 per cent, to 2i per cent., now that the interest payable to depositors is only 2$ per cent, the banks charge 5 per cent, on overdrafts. There should be some legislation to limit fairly the margin fixed by these organizations. Reference has been made to the Farm Relief Board of New South Wales, to the interest charged by that board and to the lack of protection. But in this connexion I would point out that when a stay order is granted the excess of a man’s liabilities over his assets are put into a suspense account, interest is chargeable only on the balance of his liabilities, and the rate of interest is limited to 4 per cent. Thus an opportunity is given to a man under a stay order to recover his position. The honorable member for West Sydney (Mr. Beasley) referred to the hardships resulting from a stay order being put over a man’s effects; but already in New South Wales 1,800 farmers have availed themselves of the protection of the stay order. This indicates, I contend, that the aVerage farmer is not afraid of the stay order and that judging from the experience of his neighbours or that of others whom he may know, he is assured that he will receive a fair deal. That speaks for itself. With regard to the contention of the Leader of the Opposition, that an increased communitypurchasing power would enable the producer to receive higher prices for his product on the home market, and that these higher prices would again add to the purchasing power of the community, I point out that the mere transfer of a shilling from one person to another does not increase the purchasing power; it is merely a transfer. No matter how much the primary producer receives for his product on a home market it does not increase the purchasing power of the community by one farthing. The purchasing power of the community can be increased only when higher prices are received by the farmer for his products overseas. A rise in the export price of wheat of Id. a bushel adds £500,000 to the purchasing power of the community; the addition of 2s. a bushel to the home consumption price would add nothing whatever. When the farmer’s purchasing power is increased by such action it gives him an incentive to increase production. Exports increase and more wealth is then brought into the country. By that means only is the purchasing power of the community increased.

I support the proposal in this bill to arrange for the voluntary composition of debts. I am opposed to any arbitrary writing down of debts, because I have never seen a method by which that can be equitably done. When a man gives a mortgage over his property he realizes that he is transferring the first right of payment of the cash proceeds of that property should it be necessary to realize on it. Although land values may fluctuate the mortgage remains stable; I have never heard of a case where the mortgagee, when the value of the property has risen, has received from a profitable sale a farthing more than the amount he loaned. Although the honorable member for Darling (Mr. Clark) said he would support a policy of writing down he also said that he would support a policy of writing up should market values recover. Such a system would be unworkable. If the value of a property were written down, and, after the owner had sold, the property value rose, it would not be possible to take from the new owner any advantage to compensate the mortgagee for that writing down. There are many instances of the unworkability of such a scheme. If a man had raised a loan of £2,000 on mortgage, and in addition had borrowed £1,000 from a bank on his own security to make up a total loan of £3,000 to suit another person, how would it be possible to write down in that case? Supposing the £3,000 was written down, would the honorable member follow it up by writing down the portion due to the bank and expect the bank to be able to write down portion of its deposits involved in this deal? Such a scheme would be absolutely unworkable. Take another case. If an agent provides £400 for the purchase of a flock of sheep, what right have you to write it down? If a profit is made on the sale of those sheep the financier does not receive anything extra; he is not a partner, and is entitled only to interest and the repayment of the advance. Any loss is the responsibility of the borrower and not of the lender. There is no possible way by which such a system could be equitably worked. Indeed, the repercussions which would follow from the general breakdown of the financial fabric would make money unprocurable for rural finance and that would be a greater hardship to the man on the land than having to meet his commitments.

However, it is a long lane which has no turning. The price of wheat to-day is a good deal better than it was twelve months ago, and if it continues to rise land values will immediately rise. Who is to have the benefit of that rise? The owner, not the mortgagee, will reap the benefit, and so, when land values fall, the mortgagee should not suffer. The principles of this measure are sound. The grants for which it provides have to be provided by the taxpayers; they should be limited to absolute minimum requirements and should be used with discretion. The act provides that money shall be given only to those who are considered to have a chance of recovery, so that they may continue to produce to the advantage of Australia. The money is not to be used to liquidate State debts. The New South Wales act provides that interest up to 2£ per cent, may be charged, but the charge is optional. In the other States, which have submitted proposals, there is no provision in this respect. Furthermore, this money when refunded can be used to assist other settlers along the lines embodied in this bill. It has been said that the bill does not go far enough. I would say not that the bill does not go far enough, but that further action is necessary. It is incumbent upon the Commonwealth Government to make provision whereby the wheat industry and other rural industries which desire it shall be put on the same basis as the secondary industries. The primary industries should be able to obtain for their products prices equal to import parity or a home-consumption price. That would benefit them as the tariff benefit9 secondary industries, and would help to make good the lack of balance between the primary and secondary industries. The Commonwealth Government cannot afford to delay in bringing this about. It should cut out the system of bounties, and take the rural industries out of the political cockpit, by giving them control boards and either by excise or by a homeconsumption price, benefits which will stabilize them, and make the proposals contained in this bill and the efforts of the producer worth while.

Mr SCHOLFIELD:
Wannon

– I congratulate the Government on the introduction of this measure, which should have been brought down long before this. I wish, also, to congratulate the honorable member for Flinders (Mr. Fairbairn) on the rather remarkable address he gave this evening. The honorable member touched upon certain points which are usually overlooked in a debate of this nature. His reference to the disabilities suffered by producers as a result of certain business methods at the present time I intend to deal with later. Owing to the unusual economic conditions all over the world, since the war, prices for primary products have dropped to such an extent that primary production is unprofitable. This is the case, not only here, but all over the world. Some countries have realized this state of affairs, and are trying to do something to put their primary producers on a better footing. We very tardily, as it were, have at last endeavoured to do something to help the primary producer. The provision of this £12,000,000 is a step in- the right direction. It is, however, only a temporary measure to tide the producers over a bad period. This assistance, in conjunction with the composition of debts and the writing down of some State debts, should help the producer tremendously. The Leader of the Opposition (Mr. Scullin) said that the amount was not sufficient. He probably would desire to have made available an enormous sum to liquidate the debts of the producers and all others who find themselves in a bad way. From such a suggestion we can only conclude that he and his party have in mind the creation of money from the air, or, in other words, inflation. That type of finance would not do the farmers any good at all. Indeed, it would simply aggravate their difficulty. Much has been done by certain States to relieve farmers and others of their debts by bringing about certain arrangements between creditors and debtors. Such relief has been afforded by them without having any sum of money available for the purpose. It seems reasonable, therefore, to assume that when this £12,000,000 is used in the composition of farmers’ debts an enormous benefit will result to Australia as a whole. I firmly believe that when all this money is in circulation it will represent a total turnover in the transactions of the community of many millions of pounds. Thus it will not only help the farmer, but give an impetus to business and assist to relieve unemployment. Certain sums have been mentioned as representing the total debts of the farming community. I think the Leader of the Opposition (Mr. Scullin) put the figure in the vicinity of £500,000,000. When we subtract from that huge sum the debts of those who are able to carry on without the aid of this legislation, and the debts of those who are too deeply involved for it to be of any value to them, the sum remaining will be very much less than the amount which has been mentioned. It would, therefore, appear that £12,000,000, the sum provided by the Government for rural rehabilitation under this legislation, will certainly do much to ease the debt burden of the farming community. As to the secured creditors, I agree with other honorable members who have spoken on this point, that they should make some contribution to the scheme for rural rehabilitation. It is not fair that storekeepers and other traders who have given extended credit to the farmers should have to bear an undue proportion of the burden. Some scheme should be devised whereby the secured creditors could be required to contribute something as well as the unsecured creditors. I realize the difficulty of formulating a method to ensure an equitable distribution of the debt burden - I do not like compulsion - but we must, I think, consider that if such a scheme cannot be put into operation, the unsecured creditors will lose practically the whole of the amount owing to them. Some attempt should be made to bring the secured creditors into line with the unsecured creditors. The principle of the Government taking over private debts is a wrong one. Although I do not agree, in the main, with what the honorable member for Martin (Mr. McCall) has said, the Government should give consideration to the suggestions which he put forward.

One way in which assistance may be given to our primary producers is to make possible a reduction of their costs of production. As I observed at the outset, this bill, making available £12,000,000, is intended merely to help our farmers to carry on pending the adoption of measures to ensure stability in our primary industries. The first step is to consider proposals for reducing costs of production. On this point, I disagree with the Leader of the Opposition concerning the effect of the tariff on farmers’ costs. It is definitely a burden, not only upon primary producers, but also upon the people generally, including the workers in industry, and we should, without further delay, set about rectifying the position. There should also be a drastic reduction of the interest burden upon industry, primary and secondary, and a reduction of taxation. It is a well-recognized axiom that the more money that is left in the hands of the business community, the larger will be the amount employed in industry, with consequent benefit to employees. Money taken from industry by way of taxation and other charges, and utilized for governmental purposes is not always used to the best advantage.

The honorable member for Martin compared the position of our primary producers with that of persons engaged in secondary industries. His comparison was most unfair to the former, because, as is well known, the primary producer has to sell his produce on the world’s market, taking what he can get for it, whereas secondary industries, being protected by the tariff are able to exact from the community a price for their product that will or should show a profit. If the margin of profit is not sufficient, application is made for a higher tariff, which usually is given. As for the employees in secondary industries, if the wages paid are not considered sufficient for the maintenance of Australian industrial standards, application is made to the courts for higher awards. Thus are their difficulties met.

The primary producer is not in such a favoured position. As I have pointed out, he is obliged to take what he can get for his product, and if production costs are too high to return a profit on the price received, he has no redress. Some indication should be given to the States as to what is considered necessary in connexion with the composition of farmers’ debts. Clause 7 deals with the conditions under which money shall be advanced to the States for the purposes of debt relief. The language of the clause is somewhat vague. There should be a uniform method for dealing with primary producers in each State. In this respect ‘the bill does not go far enough. It should, if necessary, be withdrawn to have inserted in it provisions giving more definite instructions to the States as to what they are expected to do in connexion with the composition of farmers’ debts. Unless there is uniformity in this important matter, there will be a great deal of confusion and conflict of interests in the several States.

The honorable member for Flinders (Mr. Fairbairn) mentioned the enormous extension of credit by certain sections of the trading community for the purpose of making more money to meet additional taxation due to the general world depression. Manufacturers, not only in Australia, but also in other parts of the world, have been extending their activities in the hope of securing additional buyers by means of the time-payment or small-credit system. In this way they have been able to greatly extend their sales area, and to. cope with the increased business secured in this way, they have incurred heavy expenditure in the enlargement of premises and plant. Unfortunately, this method of doing business has led to an enormous accumulation of debts, which the people who contracted them have been unable, in many instances., to- liquidate,- Some steps should be taken, if not by this Government, by the governments of the States, to limit the amount of debts incurred in this way. Unless some such action is taken, the assistance which is being provided under this legislation will, be of little avail, because there will be no control over future expenditure. The only result will be that the “go-getter” salesman will induce primary producers and others to incur debts which will land them in a worse position than they are in at the present time.

Mr Nock:

– That could not happen in New South Wales now.

Mr.SCHOLFIELD. - I am glad to hear the honorable member say that. Legislation on the lines suggested should be introduced in all the States to save the people from themselves, and incidentally safeguard State governments from an enormous future expenditure for the assistance of primary producers and others who may get into difficulties.

The liabilities of the farming community must be considered in relation to the national debt, because, if people purchase certain commodities by the payment of small deposits, the theory is that, upon the importation of such goods, the State contracts a debt for which there has been no production. I therefore suggest that steps be taken to safeguard the people and the Commonwealth from further difficulties in this direction. I approve of the principles of the bill.

Mr CURTIN:
Fremantle

.- This is a very important bill. It brings before the Parliament considerations which affect profoundly the relationship of the Parliament, and therefore of the nation, to the individual members of the community. I remember many years ago observing an enormous expansion of the State into what were the normal economic activities of the citizens. I felt that sooner or later the time would come when it would be imperative that there should be a clear line of demarcation drawn between the State, in the discharge of its civic functions, and the State as promoter and stimulator of economic activities.

That appears to me to be more than a merely academic problem. It involves much more than a detached consideration of what may be called the philosophy of government, because all over the world in recent years we find governments, regardless of their alleged political principles, embarking more and more upon policies which make necessary the use of the State as an engine to either stimulate private enterprise in” its business relations, to protect it, or to make good such losses as private enterprise have experienced.

I have been accustomed, in the history of this country, to read very many important utterances, in which it is claimed that the real budgetary difficulties of Australia have been derived from unwise State activities, meaning by that, of course, that, by embarking upon public enterprise, and so-called “ socialism at work” policies, the finances of governments have been deranged.

Looking at the matter practically and in broad sweep, I have come to the conclusion that the chief burden upon government budgets in Australia has not been because of the use of the State as an organizer of collective production or distribution, but because of the use of the State as a prop upon which so-called private enterprise and initiative are accustomed to lean. I believe it is true to say that, in Australia, the State has become more and more an auxiliary of private enterprise. It has made good the losses of private enterprise. It has taxed its citizens in order to assist private enterprise. In a variety of ways it has imposed burdens on sections of the community in order to promote the interests, and very frequently the speculative activities of either individual citizens or group of citizens.

The purpose of this, latest instalment of a long series of bills is not to promote production, not to increase the asset-producing elements of the nation, but to furnish some sort of fund by means of which a group of private purchasers who are indebted to other groups of private traders - > either merchants, storekeepers, or the shareholders of trading banks - shall be assisted. By and large, I believe that this bill, which professedly is one to assist debtors, has for its major purpose the preservation of the interests of creditors. It is an important measure. In the first place, it adds £12,000,000 to the national debt, and about £500,000 a year to the interest liability of the nation. It does that at a time immediately following upon a ‘ period of about four years in which approximately £122,000,000 has been added to the total public debt of the States and the federation. I may point out that the per capita debt has risen from £170 in 1930, to £183 at June last, despite the increase of population that has taken place. This addition of £12,000,000 to the national debt for the purpose of reducing the debts due to certain private traders appears to me to require some very substantial argument to justify it; particularly as the bill excludes from its provisions debts due to the Crown in any shape or form. Those debts which are set out in the report of the Wheat Commission are not by any means all that are owing. The debts due to State banks should be added, because I think it can be accepted as a practical consideration that the State banks are guaranteed by the States, that they have made advances to rural industry, and that the distinction between debts due to them and those due to the Crown is one of title rather than of substance.

I feel that I should say that when the British financial mission was in Australia its attention was drawn to the loss of interest on loan liability; that is to say, the failure of instrumentalities which had been created by the States and the Commonwealth out of loan funds to earn the interest payable upon them. Serious as the position in that respect was then, it is far more serious now, because the advances that have been made out of the £122,000,000 added to the public debt since 1930 are less capable of earning interest than is the average of the previous total indebtedness.Railways, which formerly made a very large contribution to the interest payable upon their debt, are now earning far less than they did, and are imposing a larger burden than ever upon taxation. That portion of the increased loan expenditure which in recent years has been used for unemployment relief cannot be said to be capable of earning interest. Thus there are these two major additional burdens upon taxation. There is also the decline in the earning capacity of other important instrumentalities of government, such as country water supplies, and advances made to agriculturists and pastoralists for various purposes, which formerly earned interest, but nowreturn far less than the liability. I point out, further, that whereas formerly it could be said that of the total of £55,000,000 which the States and the Commonwealth had to find annually for interest payments, only about £20,000,000 was a burden on taxation, the fact now is that, although the aggregate interest bill for the present year has been reduced to about £49,000,000, over £30,000,000 is a direct burden upon taxation, because the instrumentalities in which the money has been sunk are incapable of earning the interest charges.

I make this preliminary statement because the first effect of this bill is to add another £500,000 per annum to the interest payments which this nation has to meet, without placing an additional wheelbarrow upon any farm to enable that greater interest burden in perpetuity to be borne. The importance of this goes to the very foundations of the financial capacity of governments, Federal and State, in Australia, to carry on without maintaining an intolerable burden of taxation upon the people. I can imagine that this burden could be justified if there were an asset side to it. The honorable member forRiverina (Mr. Nock), when dealing - properly, I believe - with the debts of the primary producers, pointed out that there is an asset side to their liabilities. I agree with him. There is, too, an asset side to the public debts of the States and the Commonwealth. But there has been no presentation of the existing valuation of those assets. I submit that the Wheat Commission should not only have presented to us, as it did, a miniature picture of the wheat industry and its debts, but should also have attempted to determine the present asset value of the properties against which those debts have been contracted.

Mr Nock:

– It did that, but made the figure too low.

Mr CURTIN:

– Because the bill goes far beyond the ramifications of the wheat industry, the estimates applicable to that industry are no guide at all to the general debt structure to which the scheme is to be applied. As a matter of fact, there is no section of primary producers which, prima facie, is exempt from the general principles of the measure. It applies to pastoralists, fruit-growers, dairy producers, and a multitudinous number of mixed enterprises, all of which can be said to be associated in some way with primary production. I doubt whether it can be confined to those primary industries which deal solely in exports. I believe that the milk producers who supply metropolitan areas come within its ambit, and that it also affects primary producers who supply all other domestic markets.

Mr McBride:

– They are not excluded by the bill.

Mr CURTIN:

– I am saying that they are not excluded, and that, therefore, the estimates used in connexion with the examination of this problem - estimates which have been limited mainly to the wheat industry and partially to the wool industry - are not an adequate guide to this Parliament in the formulation of a comprehensive measure of debt adjustment in relation to the primary producers of Australia taken by and large. We have had placed before us certain figures in respect of the 240,000 primary producers who are believed to be in the Commonwealth. The Acting Prime Minister (Dr. Earle Page), in his second-reading speech, said that only about 30,000 of those would be affected. The position as it appears to me is that, in the future, taxation will have to carry a huge burden in order to reduce infinitesimally the debts which are alleged to be an intolerable burden upon that section of the producers of Australia who can be brought within the category of the 30,000 to whom the bill is said to be applicable. As a matter of fact, this country could permit the evacuation of one-eighth of its primary producers without jeopardizing its economic structure.

Mr Gregory:

– Oh, no!

Mr CURTIN:

– Of course it could. As a matter of fact, I believe that it could permit evacuation of the activities of one-eighth of the 240,000 producers without lessening its capacity to meet the existing demand for goods. I consider that a far better use than is contemplated in the measure could be made of this £12,000,000. I put it particularly to the representatives of country interests in this

Parliament, that the first effect of this bill will be the creation of so grievous a degree of unfairness between claimants to its benefits that it will be impossible for this Parliament to satisfy the claims of distress. The Wheat Commission, dealing with only the wheat side of the problem, mentioned certain facts. The bill deals with a certain’ class of persons who have debts. All those who are at present able to meet their interest payments are excluded from its provisions. Those who would still be unable to meet their obligations, even if they were given the proposed assistance, will also be excluded.

Mr Lazzarini:

– The top and the bottom.

Mr CURTIN:

– That is so. The Wheat Commission estimated that, with wheat at 3s. a bushel, 40 per cent, of the farmers would be able to pay working expenses and interest. The price of wheat is not at present 3s. a bushel, but we may take that as a pivotal figure upon which to forecast the incidence of this measure as a working instrument. For the purpose of my argument, I submit that that 40 per cent, are to be excluded from the benefits of the bill. If not, the provision for those who ostensibly come within its purview is hopelessly inadequate. The commission further estimated that 26 per cent, of the wheatfarmers would be able to pay working expenses and a portion of the interest charges that they have to meet, if wheat were 3s. a bushel. I submit that the essence of this bill is that it deals only with that particular group of ‘wheatfarmers and all other primary producers who, with reasonable prices for their products, would be able to pay working expenses, and make a contribution to their present interest obligations.

The Wheat Commission estimated that 34 per cent, of the wheat-farmers of Australia would be unable to meet their working expenses, even if they had no interest obligations at all to meet. These farmers, for the most part, are not the victims of adverse seasonal conditions, or of any problem of production which the parliaments of Australia could solve for them. They are chiefly on lands which are more or less infertile, they are remote from ports, and they are exposed to high, freight charges both ways. In the majority of cases - and I make this statement with confidence born of my two years’ association with the Grants Commission - the 40 per cent, who at the present time, on the estimate of the Wheat Commission, could not pay working expenses, even if they had no interest payments to meet, are incompetent farmers, attempting to work land which is not economically suitable for wheat production.

Mr Blain:

– Because untrained men have been allowed to put them there.

Mr CURTIN:

– I submit that the present problem does not involve a postmortem inquiry as to how they got there. The fact is that, in many areas outside the areas of reliable rainfall at-the growing period for wheat, land purchased at too high a price has been brought into cultivation, under the stimulus of the post-war policy of settlement. This unhappy state of affairs has, to a considerable extent, been fostered by the tripartite migration agreement between the Commonwealth, State, and British Governments, and by the loans raised both in connexion with that policy and in respect of the settlement of soldiers on the land, not necessarily because the exsoldiers were incompetent, or because the land was not reasonably fertile, but because it was capitalized far above its true economic value. All these considerations impel me to say that there must be more than mere debt adjustment to re-orientate the primary producing interests on a basis that will be adaptable to the present position and the probable position in the next decade. We must face this re-orientation.

Obviously, markets for Australian wheat are not now so great as they were three years ago. The Wheat Commission, in its final report, pointed out that, during the last decade, the proportion of the wheat produced but unconsumed in Australia had risen enormously. This accentuates the pressure on Australian statesmanship to find, not only markets for our wheat, but also increasing markets for our increasing production.

Mr MCBRIDE:

– Is the honorable member in favour of restriction?

Mr CURTIN:

– I am trying to present the facts of the situation, in the belief that before even this Parliament can formulate a workable policy it must have some conception of the realities of the situation. If there has been one contribution more injurious than another to the financial stability of this country, it is the assumption that any political policy will work simply because a few persons desire that it shall work. Not so long ago, in an examination of the problems of democracy, we were told that its inherent weakness was that the workers were able, by their votes, practically to bribe the parliament to give them concessions which were economically impracticable. I submit that in the last few years we have seen the parliaments of Australia dragooned, step by step, into a veritable series of wildcat policies, allegedly for the relief of those in distress, but inspired mainly, I regret to say, by ill-considered and unstatesmanlike readiness merely to adapt political policy to the clamour of the moment, regardless of any endeavour to discover the best policy in the interests of the country.

I did not hear the whole of the speech of the honorable member for Martin (Mr. McCall) ; but, according to paragraph 97 of the Auditor-General’s report just submitted to us, in the last fourteen years, £17,119,000 has been expended by the Commonwealth Parliament in assistance to primary producers. That is a mere circumstance when compared with the amount of assistance granted in a variety of other ways. Debts due to the Crown which figure in the Wheat Commission’s report are only a fragment of the indebtedness of the primary industries to the State governments. I refer to the cost of railway construction policies, the reduction of freights, the carrying of certain commodities almost at a dead loss to the transportation system, and failure by farmers to pay interest on advances made. In addition to that, during the past four years the exchange rate against Australia has been 25 per cent. Honorable members know that Commonwealth subsidies to primary producers amounted to £2,250,000 in 1932-33, and £3,045,000 in 1934, whilst the grant estimated for the present year is £4,000,000, making a total of over £9,250,000, or over £3,000,000 a year.

Interest payable by the States overseas has amounted to over £56,000,000 in the last three years, and the exchange on that, which is paid out of revenue, has amounted to about £14,000,000. The exchange payment provided by the taxpayers to State governments has gone as a direct subsidy to exporters. This year the amount payable in interest overseas on the debts of the States will be £17,000,000, and, in addition to that, the States will have, to find £4,250,000 for exchange.

Mr McClelland:

– “Why not correct the exchange position?

Mr CURTIN:

– I am merely asking honorable members to realize that during the last three years the burden on the budgets of the Commonwealth and the States, in order to assist primary production, has enormously increased the already intolerable burden of taxation.

Mr GREGORY:

– It is not the only burden.

Mr CURTIN:

– I agree with the honorable member. It is far from being the only burden. But, despite all that has been done, we have to confess that the present position of the primary producers of Australia is not any better than it was three years before any part of this additional burden of taxation was contracted. That is so because, obviously, farmers are being carried who should not be on farms. There are being worked in Australia, for certain classes of production, areas upon which successful production is economically impossible. I do not desire to sound a note of despair; but I believe that in parts of South Australia, Western Australia, Victoria, and New South Wales, farming operations are being carried on which, in their present form, should be carried on no longer. Debt reduction would be of no advantage whatever to many wheat producers in Western Australia and some of the other States. It would be a decided advantage if additional capital were made available to those affected, to enable them to provide more water for their farms and proper fencing to protect their land against the invasion of rabbits. Money to enable them to replace wornout plant with new equipment to assist them to carry on satisfactorily would also be a great help. My main point, however, is that the money to be provided under this bill should be used to diversify the primary producing industries of the major primary producing States. The belief that wheat-growing can he carried on, regardless of any other activities, seems to me to be madness. I have endeavoured to survey the economic possibilities of Western Australia, and have come to the conclusion that the increase in the flocks of that State, mainly in the agricultural districts, has tended to strengthen and stimulate the primary producing industries. I believe that no farmer should be assisted under the provisions of this or any other measure of relief who cannot, adjacent- to his homestead, provide the greater part of the vegetables he needs for his family, run some cows on his property, and, in addition, maintain the usual cottage industries around his own home. We know very well that a great part of the indebtedness of the farmers of Australia is due to the fact that they were misled into believing that they could carry on a single enterprise. The old conception of a farm was a place where the major requirements of the farmer and his family were produced. We must get back to that conception.

Mr McEwen:

– The honorable member desires to make peasants of the farmers.

Mr CURTIN:

– That remark does an injustice to my argument. I do not desire to develop a peasant class in Australia. I am pointing out that the present debts of the Australian primary producers have been contracted mainly because the farmers were led to ‘believe that an inexhaustible market existed outside of Australia for specialized products such as wool and wheat, and that by the proceeds from the sale of wool and wheat they could afford” to buy motor power and practically everything they required for their own consumption or use. I instance the development in the use of tractors in Australia and the evacuation of farms by horses for haulage purposes. That change threw upon the world market, on the part of Australia, the product of an enormous acreage which had to be sold outside of this country for cash in order to pay for the spirit to generate the power of the tractor and also to pay for the tractor. I admit that horse-power involves more labour, but, at least, the horses consumed some of the products of the farm. Further, it was always possible, I submit, for horses to be reproduced upon a wisely ordered farm to replace those whose working life was ending.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– That would not apply to the sandy country in “Western Australia.

Mr CURTIN:

-It would apply to practically the whole of the agricultural area of Australia that had been developed before the war. The greater part of the alleged insolvency of the primary producers is due to two causes which have arisen since the war, first, the excessive capitalization of the farms; and secondly, the endeavour on the part of various governments to place people on the land which was not naturally suitable for the kind of production sought to be developed. In Western Australia the Government had to service 40,000,000 acres in order to ensure the cultivation of 4,000,000 acres. In other words, instead of settlement stretching naturally from one area to another adjacent area, it was jumped here, there, and everywhere, until we had a veritable patchwork of farms involving an enormous amount of road construction, the building of long stretches of railway, and the spreading of public administration to isolated places widely separated. This inevitably had the effect of increasing the public debt.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– Every section of the community in Western Australia supported that policy while it was in progress.

Mr CURTIN:

-Not to any greater extent than did the people of the other States.

Mr McBride:

– No one anticipated the falling-off in markets and prices.

Mr CURTIN:

– Without doubt the financial institutions excited development by making loans available under loose conditions, not only to private enter- prise, but also to governments. I direct- attention to the fact that the public debt increased enormously, both internally and externally, from 1919 onward.

Mr McBride:

– Who was it that in 1930 advocated so strongly the production of more wheat?

Mr CURTIN:

– I decline to take any notice of the interjections of the honorable member. He should reserve them for public meetings ; they are not appreciated in this chamber. The debts of the primary producers of Australia have to a large extent been the direct outcome of the speculations of the financial institutions of this country. I suggest that a wiser way could be adopted to spend the £12,000,000 that is to be made available than that suggested by the Government. I think it would be better to leave the debt where it stands than to reduce it. There is no stability about capital values ; they rise or fall in accordance with circumstances which this Parliament can influence very slightly. At present, capital values are low, because the prices of primary products are low; but if, four or five years hence, prices recover as the result of a world war or some other happening is it doubted that land values will not recover? Or is it doubted that those assisted by this contraction of debt will be prepared to sell out at an inflated value compared with present values? I suggest that in a world where capital values are flexible, it would be suicidal for this Parliament to do more than pay the actual interest obligations which, at present, are the real deterrent in enabling production to be carried on reasonably. I point out that it is immaterial to the farmer whether he owes £500 or £5,000 if, out of his annual production, he is able to meet all the charges reasonably imposed upon him. His capital debt is one thing, and his running costs are another. I submit that the right course for this Parliament to adopt in a time of emergency is to enable farmers who ought reasonably to be assisted to meet their running costs. That could be done, as has been suggested, by a reduction of costs, by increasing prices by some artificial means, or by making a contribution towards such costs as cannot be reduced.

Mr Street:

– Or by a combination of all those means.

Mr CURTIN:

– That is so. The cost of carrying on certain farms in Australia could be assisted, as has been suggested, by making advances free of interest to permit the replacing of wornout plant. What is the position under this scheme ? The money cannot be used to purchase a new plough to replace an old one. There must be some new source of credit to enable that to be done. The farmer will not be aided unless he has a new issue of credit from some source. When a country increases its public debt by £12,000,000 for the purposes of farmers’ debt adjustment, it should endeavour to envisage some means to set alongside that sum additional funds for the purchase of new plant, so that we shall not go on as we have during the past ten years, making it increasingly evident that all the governments will have to dip into the pool of taxation to meet interest payments on moneys advanced to assist the running costs of industry. There must be an end to that. I put this point to honorable members: The very factors which have made it impossible for the primary industries to carry on are factors operating in respect of the governments in Australia, and there can be no support upon which governments can lean when the factors which have produced insolvency in primary industries operate in respect of the governments themselves. Why is it that primary producers cannot meet their running costs? It is because so great a part of the proceeds of the sale of their products has to be hypothecated for definite and contractual charges. Is that not what is happening to the governments of this country?

Mr Archdale Parkhill:

– That is a mere platitude; that applies to everything.

Mr CURTIN:

– The difference is this; when it happens in the case of farmers or other sections of the community, the Government can come to their aid; but when it happens to a government only one thing can be done.

Mr Archdale Parkhill:

– Increased taxation ?

Mr CURTIN:

– I do not believe that the ‘ time has been reached when Australia cannot meet its obligations. In addition to attempting to diversify production on farms in Australia by placing at the disposal of the farmers assistance to enable them to adapt their properties to those forms of production which do exist or can be helped into existence, I believe that the most immediate practical use that could be made of the addition of £500,000 a year to the interest liability of this country is that the increased interest liability that this country contracts should be used to reduce the interest liability of the farmers in this way. Under this bill the money we pay doe3 not increase their productive efficiency.

Mr LANE:
Barton

.- The Government is very unwise in proposing to hand money to the State governments for distribution. Some months ago, when this proposal .was first brought forward, I expressed the opinion that the ‘ Commonwealth should extend, rather than restrict, its sphere of action.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– Does the honorable member suggest that it should create another expensive department?

Mr LANE:

– In New South Wales, although the Commonwealth Bank has agencies established all over the country, the State Government is establishing a State Rural Bank in each township for the purpose of distributing this money. The Premier of New South Wales has already complained that the Commonwealth will have to take some responsibility in regard to the internal matters of the States. For myself, I believe that Commonwealth influence must inevitably grow; but this cannot be achieved by transferring money to the States, as is proposed in this bill. Every year this Parliament is asked to vote large sums of money, which are subsequently handed over to the States for distribution. The Commonwealth Government has every right to say exactly what should be done with Commonwealth money, and to dictate the terms upon which it should be distributed to the growers. What we have to consider is whether the plan adopted by the State Government is wise. Generally speaking, the farmers to-day are on land that is not capable of giving them a living.

Friday, 5 April 1935

Mr LANE:

– -Members of the Country party are always telling us that the farmers are on the rocks, and must receive assistance. They are even howling that the farmers must be assisted out of loan money. Members of the Country party also tell us that the well-to-do wheatfarmer was quite justified in accepting the Commonwealth bounty on wheat even to the extent of £4,000 in one year, and, therefore, I was pleased to hear the honorable member for Gwydir (Mr. Abbott) change front to-day and say that a man with a flock of 10,000 sheep or more should not participate in the Government’s bounty.

Mr Abbott:

– I, of course, said nothing of the kind.

Mr LANE:

– I thought the honorable member must have made a mistake. Never except by mistake would he forfeit the right of the wealthy landholder to pirate government money provided by the city taxpayers. I did not hear the speech of the honorable member for Forrest (Mr. Prowse) but I have no doubt that he said again, as he has often said before, that the wheat-farmers must be kept on their farms because we depend on them to provide funds overseas with ‘ which to meet our interest obligations. Therefore, I was pleased to hear the honorable member for Fremantle (Mr. Curtin.) say that 8 per cent, of the wheatfarmers could go off their holdings, and would never be missed. If a further 30 per cent, went off their holdings tomorrow there would be. double that number waiting to take their places. Queensland has shown that wheat-farmers, by means of a pool, can regulate their own industry. The wheat-growers of Australia have had the opportunity to stabilize their industry at any time by forming a pool, but honorable members know that the’ wealthy farmers refuse to have anything to do with one.

Mr McEwen:

– Does the honorable member support a wheat pool?

Mr LANE:

– I would rather that there were a wheat pool than that the representatives of the. farmers should come here every year asking for £3,000,000 in bounties. I should be prepared to allow the farmers to manage their own pool, but I should place a committee over them to see that they did not grab too much. It would be desirable to take steps to see that they did not, like the butter producers, take more than they were entitled to.

I was interested to observe during this debate that members of the Country party have ceased to blame the tariff for the farmers’ troubles, and have concentrated on interest charges. On page 132 of the report of the royal commission on wheat the following passage occurs: -

Farmers, when giving evidence before the commission, frequently stressed the effect of the tariff in raising the costs of these sundry items. This matter is one which concerns the whole policy of Australian development during the past few decades. The general result of the tariff has been to raise the price of the commodities to the farmer by a certain percentage which is difficult to estimate. The Informal Committee of Inquiry which went into the matter and reported in 1929 came to the conclusion that the general effect of the tariff as a whole was to raise costs by about 9 per cent. If this be accepted as correct, then the tariff is responsible for an increase in costs of about½d. per bushel.

At page 251 the following appears : -

In general, the Australian farmer is, to-day, paying no more for his machinery than he would have to pay if machinery were not made locally and were imported duty free. The fall in the value of the Australian pound has been a contributing factor.

I have been trying to find out why honorable members have now deserted the tariff, and pinned their faith to interest. The honorable member for Gwydir this afternoon mentioned a property somewhere which was worth at one time £20,000. There was a mortgage of £5,000 on it, and when the time came to pay off the mortgage the owner was short of £2,400 to discharge the debt. He was forced to obtain further accommodation, and to pay 8 per cent, for the money. In all probability, if the property was really worth £20,000, he could have obtained a bank overdraft at 5 per cent., and there would have been no need for him to pay8 per cent, for the accommodation. The fact that he was not able to do that seems to indicate that the capital value of the farm had been overstated. The honorable member for Darling (Mr. Clark) referred to a man who had £1,700 in the bank, and was offered a farm valued at £5,000. If he had only £1,700, which he paid over on the property, going in debt for the remainder of the purchase money, and if he had no funds with which to work the property, he would soon find himself in difficulties. The trouble is that, because of reductions of land values, whatever equity the owner originally had has now practically disappeared. Three examples have been placed before us to-night. In regard to the first of them, the owner of the land had not more than a 15 per cent, interest in the property. The second related to a property valued at £8,000, whose owner had only a 10 per cent, interest in it. I ask honorable members where they can find a person who will hand over a property worth £8,000 on a deposit of 10 per cent. Only a government will do such a thing; and that is why these problems arise from time to time.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– It has been done in hundreds of cases.

Mr LANE:

– That is why £17,000,000 was lost in connexion with soldier settlement. The third example had reference to a property worth £-4,000, the equity of the owner being only 13 per cent, of its value. If he were to approach any person or institution, other than a government, with a proposal to purchase a property of that value on a 13 per cent, deposit, he would have no chance in life of obtaining it, unless from some one who took his money with the definite intention of subsequently turning him off the land and retaining the deposit.

Mr Archdale Parkhill:

– What does the honorable member consider a sound financial proposition ?

Mr LANE:

– Unless a man can provide 40 per cent, of the value of a property, he can never make it pay. When his equity is only 10 per cent., he has no chance of paying for it.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– Is the honorable member supporting the bill?

Mr LANE:

– I am not sure that I am. I have strong views on this matter, but I was denied an opportunity to speak in the party room.

Mr Archdale Parkhill:

– The honorable member is having his say now.

Mr LANE:

– It is too late. Although Parliament has a right to be consulted regarding these issues, we are compelled to pass this scheme which has already been handed over to the State Governments. They are now operating it.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– No. The honorable member shows lamentable ignorance of State legislation.

Mr LANE:

– Other similar instances, all equally unsound, have been mentioned to-night. Our rural industries are full of examples of properties held by men to whom a profit is impossible.

Mr RIORDAN:
KENNEDY, QUEENSLAND · ALP; FLP from 1931

– What does the honorable member suggest?

Mr LANE:

– I suggest a pool similar to those in the United States and Canada, with a home-consumption price for wheat.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– How long has the United States of America had a pool ?

Mr LANE:

– There is a pool in Canada. If the price of wheat were stabilized at, say, 3s. a bushel, many farmers would make a profit, because, on the authority of the Wheat Commission, many of them produce wheat at from 2s. to 2s. 3d. a bushel. I suggest that should the price rise above the stabilized figure, the surplus should be placed to the credit of an assurance fund, to be drawn upon in times of drought. Many farmers whom I have approached will not have a pool at any price, preferring the fluctuations of the market. These men are principally freeholders, who are not losing, even with wheat at 2s. 6d. a bushel. The wheat industry could well be controlled on the same lines as the sugar industry, namely, by a restriction of the area under cultivation. The producers of sugar know what quantity they can sell locally, and the price at which they can sell it, and they are prepared to accept a lower price for the sugar sold outside Australia. Those engaged in the wheat industry know that, because of the influence of the Country party in the Cabinet, they can squeeze the Government and obtain £3,000,000 or £4,000,000 every year by way of bounties or subsidies. Some honorable members know that the condition on which they were ‘ elevated to ministerial rank was that this scheme should go through. I should not have said that had not honorable members been shirking their responsibilities.

Mr Archdale Parkhill:

– The honorable member has no right to say it because it isnot a fact.

Mr LANE:

– If the Minister wishes I shall prove it. I consider that the rehabilitation scheme, as we have it before us to-day, may be. a good prelude to approaching the banks or the secured creditors for further consideration to the unsecured creditors. I am not one of those who think that the unsecured creditors should be the only ones to be asked to cut their debts. I do not believe that men on the land, with only a small surplus, such as £600 on a £4,000 property, can carry on with the present price of wheat ; and according to the report of the royal commission, there cannot be any sudden rise in price within the next three or four years. If that is the position, the only way to avoid the necessity for paying bounties and borrowing money to rehabilitate the farmer is to stabilize him in his price for wheat, following the system which, as adopted in Queensland, has proved capable of stabilizing the industry and preventing its collapse.

Mr WARD:
East Sydney

– It is difficult to ascertain exactly who is responsible for the present plan which is claimed to be a scheme for the rehabilitation of rural industries. Government supporters, including members of the Country party, seem to have joined forces in propounding a scheme which, they say, will assist farmers engaged in rural production to rehabilitate themselves, but the one thing that has been demonstrated during this discussion is the enormous power of those controlling private finance to dictate and determine the policy of the Government. Reading the second-reading speech of the Acting Prime Minister (Dr. Earle Page), one might think that the purpose of the scheme was to give £12,000,000 directly to the farmers. Such is not the case, because the farmers will not receive the benefit of the £12,000,000. Every section of the community is facing a debt problem of its own. Why are the farmers to be the one section singled out for special consideration? Whenever Parliament has been asked to vote money, amounting to a few hundred thousands of pounds, and never anything of the magnitude of £12,000,000, for the alleviation of distress amongst the unemployed, members on the government side, particularly members of the Country party, have stressed the necessity for spending it on works of a reproductive character. On this occasion not one penny of the £12,000,000 which will be added to the national debt will provide an atom of reproductive industry, or add to the wealth of the nation. The bill which it is claimed will be of benefit to the nation generally, and to the farmers in particular, will rather have the opposite effect, because every additional bushel of wheat grown to-day diminishes the opportunity of the primary producer to dispose of his existing surplus and only increases his difficulties. It is useless for the Acting Prime Minister or anybody else to tell us, knowing the world situation as we do to-day, that this is only temporary assistance being given to the industry.For the last five or six years when money has been directly voted by this Parliament for the assistance of primary industries, we have been always told that it was a temporary measure to tide the industry over a passing difficulty. Now, instead of voting money in the shape of bounties to the tune of £3,000,000 or £4,000,000 per annum, we are faced with a proposal to increase the national debt at one blow by £12,000,000; but the money will be used, not to secure the farmer in the possession of his assets, but to protect the financial institutions which have assisted him, at enormous profit to themselves, during a difficult period. Not only that, but the trading banks, the only institutions permitted by the Government to take up treasury-bills, are to get an additional rake-off from the treasury-bills to be issued by the Government to raise this money. Our experience is that 90 per cent, of the farming community will take anything that is handed to them, reaching out for and grasping it regardless of the interests of those at whose expense it is provided. The Australian community is paying an exorbitant rate for its butter to make up to those engaged in the dairying industry for the loss incurred through selling their exported surplus on the world’s market at whatever price is offered. The same thing applies to many other articles turned out by the primary producer. He always, through, his representatives in this Parliament, claims protection for his own products, while, on the other hand, advocating free trade on all the articles he requires. The farmers relief legislation introduced in New South Wales has not relieved the farmers’ difficulties, notwithstanding what the honorable member for Riverina (Mr. Nock) has said. Stay orders totalling 1809 have been issued. There are 200 cases being investigated at the moment by the board established under that legislation, and fewer than 50 of those orders have actually been removed since the act came into force. The reason why the farmers are unable to get beyond the clutches of the Farmers Relief Board, which is only an authority constituted to preserve the farmers’ assets until such time as the mortgagees see fit to foreclose, is obvious. Everybody knows that, when the farmer makes application for a stay order, he automatically signs himself outside the provisions of the moratorium legislation of New South Wales. The moratorium legislation introduced by Mr. Lang when he was Premier of the State destroyed the obnoxious provision known as the personal covenant, which allowed a mortgagee to pursue and even to sell the very household furniture of his debtor to satisfy his claim upon the estate. Mr. Lang’s moratorium legislation provided that, be the borrower a farmer, a home purchaser, or a worker in industry, at least his home should be protected from the attacks of the mortgagee. When a farmer makes application for a stay order, he signs himself outside of that legislation, and nobody knows better than do the farmers of New South Wales how harshly this particular legislation - the Farmers’ Relief Act - has been applied against them. The farmers who are known in that State as “ hopeless cases “, are the only ones to . be provided for under this legislation, in spite of what has been said here to-day about the three classes into which the Acting Prime Minister divided the farming community, and what he has said to the contrary during this debate. He said that one section required no assistance, having a surplus of assets over liabilities; that there was a second section upon the marginal line whose liabilities exceeded their assets to such an extent that they were having difficulty in carrying on, but, if assisted by the Government, would probably be able to enter into profitable production; and that a third section comprised those said to be engaged in uneconomic production, who, during a period when the price of wheat was high, had extended their operations on land unsuitable for production, and were to be sacrificed. The only men to be assisted under the farm relief legislation of New South Wales are not included in the two sections which the Acting Prime Minister said are worthy of consideration. The only section to receive no assistance are those who are in a hopeless position - those who have been compelled, because of their circumstances, to seek aid from the Farmers Relief Board established under farmers’ relief legislation. I have heard honorable member’s speaking scathingly about the policy of the Labour party; but we find that, under the legislation introduced by the anti-Labour Steven’s Government which is now in force in New South Wales, bailiffs are’ being placed in control of the farmers’ affairs. The honorable member for Riverina (Mr. Nock) should have extended his inquiries a little further in regard to the operations of that legislation. In New South Wales to-day there are 54 bailiffs operating under 1,809 stay orders, and who are controlling the activities of the farmers.

Mr James:

– I rise to a point of order’. Conversations opposite are being conducted in such a loud manner that it is impossible to hear the honorable member for East Sydney. I think it only fair that the House should be kept in a state of order.

Mr SPEAKER:

– The honorable member for East Sydney-

Mr James:

– If the conversations were on this side of the House I know that you would call for order.

Mr SPEAKER:

– The honorable member must withdraw that remark.

Mr James:

– I withdraw it.

Mr WARD:

– The 54 bailiffs operating under the Farmers Relief Board are not farmers, or men interested in farming operations. They comprise seven stock and station agents, 42 accountants, and five solicitors. There is not one practical farmer managing the farms under the control of the Farmers Belief Board. Let us examine the position of the farmers under this legislation. Certain administrative costs which up to the present. time amount to approximately £29,000, have to be found by the general taxpayers in that State. The other costs in connexion with the control of the farms themselves, including the fees of the bailiffs in charge, have to be met out of returns from the farmers’ produce. The bailiffs are paid a minimum fee of £5 5s., or 3 per cent, of the money obtained from the sale of the produce. If the amount obtained in that way is insufficient it is advanced by the board, and added to the debt of the farmer. The honorable member for Riverina, or any other honorable member who claims to represent the farming community, cannot deny the fact that many of the farmers in New South “Wales, who sought the aid of the board, are to-day in a more hopeless position than they were when they applied for a stay order. They are in an impossible position, but the farce is allowed to continue. It is useless to continue spending money on an uneconomic industry. Any one who has studied the wheat industry must realize that there is no immediate prospect of the wheat-farmer being in a better position than he is to-day. “When in difficulties, the farmer has no compunction about receiving money raised by the Commonwealth Government through the imposition of a sales tax on flour, which is a tax levied on the foodstuffs of the people. I am not prepared to support any scheme which increases the national debt, or which transfers that debt from the shoulders of one section of the community on to the shoulders of another. This section of the community must understand that it cannot be prosperous unless there is general prosperity throughout the country. The only occasion on which some honorable members make any effort to assist the workers is when they are seeking something for themselves. They say that if they receive some assistance from the Government, which will enable them to obtain a better price for the commodities they are pro ducing, the workers will also benefit. The graziers, wheat-farmers, and others engaged in primary production have invariably opposed any application by the workers for higher wages and better conditions. They do not think that the workers should organize themselves and withhold their labour if they are not receiving adequate return for their work. There have been numerous occasions when the workers have been seeking a more adequate return for their labour, and have withdrawn it from the industry, and rightly so too. “What has been the policy of the farmers and other producers on such occasions? They, with the assistance of their sons and relaives, have used every means to defeat the object of the workers. They ally themselves with the big industrialist of the city, and are always willing to show a united front when the workers are asking for better conditions and higher wages.

Mr SPEAKER:

– I ask the honorable member to connect his remarks with the bill.

Mr.WARD. - I am attempting to point out that thousands of workers will not receive any benefit as the result of this legislation, but, on the contrary, will be called upon to find annually an amount of £500,000 in interest on the proposed expenditure. I can show that the treatment and consideration meted out to this particular section of the community - the private banking institutions - is not justified.

Under present circumstances, I contend, it would be far better if the unemployed workers were never put to producing consumable goods, but were simply given the opportunity to consume some of the surplus goods produced by others. The workers are to be called upon to foot the bill, so the Government allege, to assist the farming community, 90 per cent, of whom will grasp assistance from whatever quarter it may be offered, irrespective of who is to foot the bill. The farmers may be deluded into believing that this legislation is going to alleviate their present position. In New South “Wales, machinery already exists for the distribution of this money. I have shown that any farmer in New South Wales who requires assistance under this measure must first of all apply for a stay order. That is, he must immediately come under the direct control of the Farmers Relief Board. I have already shown what that implies. The board immediately appoints a bailiff whom, because the board does not desire to hurt the tender feelings of the community, it describes as a supervisor.

Motion (by Mr. Archdale Parkhill) put -

That the question he now put.

The House divided. (Mr. Speaker- - Hon. G. J. Bell.)

AYES: 30

NOES: 17

Majority . . . . 13

AYES

NOES

Question so resolved in the affirmative.

Original question resolved in the affirmative.

Bill read a second time, and committed

page 794

BILLS RETURNED FROM THE SENATE

The following bills were returned from the Senate without amendment: -

Customs Bill 1935.

Raw Cotton Bounty Bill 1935.

House adjourned at 12.50 a.m. (Friday).

page 794

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Australia’s National Debt

Mr McClelland:

d asked the Acting Treasurer, upon notice -

  1. What was the amount of Australia’s national debt at 30th June, 1932?
  2. What is it at the present time?
  3. What was the amount of interest paid for the year 1932?
  4. What is the amount of interest payable annually at the present time?
  5. What amount of treasury-bills is in circulation at the present time?
  6. At what date was the largest amount of treasury-bills in circulation, and what was the amount ?
Mr Casey:
UAP

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

  1. £1,187,827,865.
  2. At 31st December, 1934, the debt was £1,237,122,394.
  3. £48,778,791 for the financial year 1931-32.
  4. £45,045,455.
  5. Treasury-bills in circulation in Australia at 31st March, 1935, totalled £48,888,000.
  6. The maximum amount of treasury-bills in circulation in Australia was £53,615,000 on 17th November, 1933.

Small Fruits Industry: Payment of Bounty

Mr Mahoney:
DENISON, TASMANIA

y asked the Acting Prime Minister, upon notice -

In view of the parlous condition of the small fruits industry in Tasmania, and the inadequacy of the small subsidy already granted, will he give favorable consideration to the payment of a special bounty of £20,000 per annum on fruit pulp, in order to give relief to hundreds of small fruit-growers, who, to-day are forced to let their fruit rot on the ground?

Dr Earle Page:
CP

– I direct the honorable member’s attention to the announcement by the Prime Minister last December of the Government’s policy in relation to the grant of £5,000 then made, in which the intention of the Government in regard to future assistance to the berry fruits industry was clearly stated.

  1. J. White : Contract with Government.
Mr Paterson:
CP

n. - The information is being obtained, and will be furnished as soon as possible, in answer to a series of questions asked by the honorable member for West Sydney (Mr. Beasley) regarding the details of a contract between R. J. White and the Commonwealth Government.

Visit of Duke of Gloucester

Mr Jennings:

s asked the Acting Prime Minister, upon notice -

In view of the fact that the film depicting the tour of tlie Duke of Gloucester shows imperfect photographs (due to unfavorable photographic conditions) of the surf lifesaving carnival at Manly, New South Wales, during the visit, and tlie fact that the nlm will have important advertising value for Australia, will he arrange to have better mid complete pictures, showing clearly surf lifesaving clubs in action on our surfing beaches, included in the film, because of its special interest to people overseas?

Dr Earle Page:
CP

– The Commonwealth Government is not the author of the film referred to by the honorable member. Itwas prepared and presented to the Commonwealth Government by Mr. Stanley S. Crick,’ managing director of Fox Film Corporation, for inclusion in the national archives. I may mention, however, that in addition to films depicting Australian life-saving clubs in action, which have already been produced by the Commonwealth Cinema Branch, and sent overseas for exhibition, it is proposed that the branch shall secure- at the first available opportunity new films of this land for display overseas..

Broadcasting Studio at Hobart.

Mr Hunter:
CP

r. - On the 20th March, the honorable member for Denison (Mr. Mahoney) asked, without notice, a question pertaining to the erection of a wireless broadcasting studio at Hobart. I am now in a position to inform the honorable member, that advice has been received from the Australian Broadcasting Commission, within whose purview the matter comes, to the effect that the commission has plans under consideration, and intends to proceed with the erection of a studio at Hobart as soon as it is. satisfied with the plans.

Employment at the Sydney General Post Office.

Mr Hunter:
CP

– On the 2nd April, the honorable member for Lang (Mr. Mulcahy) asked, without notice, a question pertaining to staffing measures to cope with overtime in the Telegraph Branch, General Post Office, Sydney. Inquiries which I have since made, elicit that, owing to .abnormal sick leave during March, a greater amount of overtime was worked than is usually the case. As, however, overtime is extremely irregular in its incidence, it is far more economical and otherwise advantageous to utilize skilled permanent personnel beyond normal hours as traffic congestion requires, than to employ temporary hands not qualified to operate multiplex machines.

Australian Broadcasting Commission.

Mr Hunter:
CP

r. - On the 14th March, the honorable member for Wentworth (Mr. E. J. Harrison) asked, without notice, a question pertaining to meetings held by the Australian Broadcasting Commission. The following particulars - relating to commissioners’ meetings held since the inception of the commission on 26th May, 1932, to 24th March, 1935 - have now been furnished by the Australian Broadcasting Commissioner: -

Cite as: Australia, House of Representatives, Debates, 4 April 1935, viewed 22 October 2017, <http://historichansard.net/hofreps/1935/19350404_reps_14_146/>.