29 November 1927

10th Parliament · 1st Session

The President (Senator the Hon. Sir John Newlands) took the Chair at 3 p.m., and read prayers.

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The following papers were presented -

Northern Territory Acceptance Act. and Northern Australia Act -

Central Australia - Ordinances of 1927 -

No. 12. - Supreme Court (No. 2).

No. 13.- Slaughtering (No. 2).

North Australia.- -Ordinances of 1927 -

No. 12. - Supreme Court (No. 2).

No. 13. - Slaughtering (No. 2).

Public Service Act - List of Permanent Officers of the Commonwealth Service on 30th June, 1927.

Science and Industry Endowment Act - Reports of the Auditor-General 011 the Science and Industry Endowment Fund, dated 24th May and 8th November, 1927, respectively.

Superannuation Act - Fifth Report of the Superannuation Fund Management Board, year ended 30th June, 1927.

Tariff Board Act. - Tariff Board’s Reports and Recommendations -

Aluminium and Enamelled Hollowware.

Butter and Cheese.

Domestic Electrical Appliances.

Domestic Hand Food Mincers and Choppers.

Domestic Kitchenware.

Fur Strips.


Gramophone Records (Disc Type only).

Pianos, Player Pianos, and Keyboards.

Piece Goods, Knitted, in Tubular or otherwise.

Plain Linoleum.

Seeks and Stockings.

Straw Envelopes for Bottles.


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FormalMotion for Adjournment.

The PRESIDENT (Senator the Hon. Sir John Newlands). - I have received a communication from Senator Ogden intimating that in accordance with Standing Order 64 (1) he intends to move the adjournment of the Senate to discuss a matter of urgent public importance, viz., “ The overtime strike of the waterside workers and its serious effect upon trade and commerce and the community in general.”

Four honorable senators having risen in their places in support of the motion,

Senator OGDEN:

– In accordance with the letter which I have forwarded to the President / move -

That the Senate, at its rising, adjourn till 9 a.m. to-morrow.

I wish to make it clear, at the outset that in drawing public attention to the waterside workers’ refusal to work overtime on the wharves it is not my desire that the Government should attempt to move the Arbitration Court to hear the plaint submitted by the waterside workers. That course, in my judgment, would be distinctly improper. The court is master of its own business, and it would not be right for the Government to attempt to force it to do something which previously it had refused to do. It would also be undesirable and, in my opinion, inadvisable to suggest that the Court should hear the waterside workers’ plaint in view of the fact that they have refused to obey the court’s previous award. One of the reasons which prompts me to move the adjournment of the Senate is that my friends on. the Labour side in this chamber will now have an opportunity to declare their attitude towards this dispute.

Senator Grant:

– The honorable senator is now with the majority. Why do not he and his friends do what they consider, to be necessary.

Senator OGDEN:

– Members of the Labour party, as- well as every other section represented in this chamber havea clear duty to the people of Australia and that is to declare where they stand on this issue. They should say definitely whether they approve of what the waterside workers are doing.

Senator Grant:

– Why does not the Government and its supporters do something? .


– Order!.

Senator OGDEN:

– Briefly, let us review the events that have led up to this trouble.

Senator Grant:

– And do something; do not be humbugging about it.


– Order ! This is the second time that I have asked Senator Grant to pay some regard to the Standing Orders. I warn him that if he continues to interrupt I shall take other steps to enforce obedience to the order of the Chair.

Senator OGDEN:

-I have directed the attention of my friends in the Labour party to what I consider is their duty in this matter, because I am convinced that a few words from them will do more to bring about a settlement of the present trouble than lengthly speeches from honorable senators who support the Government. Let us consider briefly the events that have led up to this dispute. Some time ago the waterside workers applied to the court for a new award, and Judge Beeby very properly refused to hear their claim until they obeyed an earlier award of the court. If we are to have arbitration, “we cannot have direct action too. “Direct action is a contravention of the first principles of fair play and British justice. The attitude of the waterside workers is really a revolt against the principle of arbitration, and those who endorse their action in effect approve the spirit of rebellion. This is a serious matter for the whole of Australia. The waterside workers, a week or two ago, decided not to load ships in Australian ports after 5 o’clock in the evening. The situation is particularly serious to the State, which I, in common with other honorable senators, represent in this chamber. In addition to refusing to work overtime, the waterside workers also made further demands. Some time ago, during the hearing of a claim which they had before the court, they demanded the right to discharge and load cargo at the Electrolytic Zinc Company’s private wharf at Risdon. That claim had never been before the court, and, although the waterside workers enjoyed preference in regard to all work offering on the public wharves, they had no legal right or moral claim to work offering on the Electrolytic Zinc Company’s wharf at Risdon. Naturally the company refused the request, because it would have meant a considerable addition to production costs. To enforce their demands, the waterside workers then took direct action against vessels engaged in the business of the company. A few days ago the Yarra, a Norwegian steamer, unloaded at Risdon a cargo of calcines, and loaded a cargo of zinc. Upon arrival at Sydney, that vessel was declared black by the waterside workers, who refused to handle the zinc. Another vessel, the Kitwitea, called at Hobart last week with a cargo of calcines. It unloaded at the company’s wharf, and when it came back to load general cargo at a public wharf in Hobart it, too, was declared black. That ship was obliged to leave without a cargo, and it is now laid up in Newcastle. Another vessel, a Japanese cargo ship, intended to load zinc at Risdon last week, but the agents, having been advised of the probable trend of events, refused to allow the ship to call there. They feared that if it loaded zinc at Ris don it would be declared black at all Australian ports. The Electrolytic Zinc Company also manufactures superphosphate, and it is having trouble in connexion with that trade too. Recently the steamer Marken, which discharged a cargo of phosphate rock, and loaded zinc, was declared black. The present serious situation demands the attention of all honorable senators. Something more than the declaration of platitudes is necessary to bring the present state of affairs to an end. The Hobart branch of the waterside workers has declared that it would prefer to close down industries rather than submit to defeat on a matter of principle. But what is this matter of principle about which the waterside workers appear to be so concerned? The first principle of unionism should be to safeguard the rights of every individual to a share in any work that may be offering. No such principle is involved in this dispute. No invasion of privileges is contemplated, and certainly there has been no attempt to inflict any hardship upon the men. They claim as their exclusive right, all the work that is offering on the wharves. The Waterside Workers Union is an. exclusive organization. I am a trade unionist, and I believe in the principles of trade unionism.

Senator Needham:

– The honorable senator did at one time.

Senator OGDEN:

– And I do so still. Let us examine the so-called principle which certain shoddy trade unionists - I regret that I am obliged to use the term, but I have used it on the. public platform - attempt to set” up. The waterside’ workers are, as I have said, members of an exclusive organization. They enjoy certain privileges under an award of the Arbitration Court. One of those privileges is preference to unionists, but they take the stand that this privilege shall be enjoyed by only the few who are allowed to join their union. Does Senator Needham call that true trade unionism? Is not the first principle of unionism to protect the weak against the strong, and to assist every individual worker? I fail to understand this demand for a monopoly of the work on the wharfs.

Senator Givens:

– By giving preference to unionists, this Parliament created that position

Senator OGDEN:

– I do not know who is responsible for it, but I want to point out the serious position of Tasmania. The zinc works may have to close down, and the farmers who will want to send their potatoes to the mainland may be prevented from doing so. The busy fruit season is coming on.

Senator Kingsmill:

– What would be the effect of closing down the zinc works?

Senator OGDEN:

– It would probably throw 3,000 or 4,000 men out of employment. The refusal of the waterside workers to load vessels in overtime hours may bring about these disasters. The waterside workers have said they would rather close down the industry than give way upon a matter of principle. I have no objection to men knocking off at 5 o’clock - they have a perfect right to do so - but there are 300 or 500 other men, also unionists, who would be glad to fall into line at 5 o’clock and complete the work they refuse to do. The unions should be compelled to allow thi? to- be done. I do not absolve the State Labour Government of Tasmania from its share of responsibility in this matter. It has not stated openly its objection to the action of the waterside workers.

Senator Sampson:

– It is afraid to do so.

Senator OGDEN:

– I suppose it is, but I think the Federal and State Governments should exercise all their powers to meet force by force, and see that these men obey the law. Have we in Australia reached the stage when it is legal for a few men to declare black a ship, or a dozen ships, or throw a man or hundreds of men out of employment, and thus bring about depression, suffering, and hardship? The rights of the general community ought to come before those of a small section. It is time, therefore, the Federal Government or some authority sought for a legal interpretation as to whether some one cannot be made responsible for the act of declaring ships or other things black. If I had my way, or my will, the first thing I should do - and it should be done if there is legal authority to do it - would be to de-register these men, and place them outside the protection of the Arbitration Court. If they would not observe the awards of that court, I should declare them rebels. At any rate, I should abolish the preference they are getting in regard to work on the wharfs. I should put them in the position of other unions that have to fight their own battles. If they will adopt methods of direct’ action, and use force in order to compel companies to comply with their wishes, they should be met with force. I have no desire to become abusive, but I object very strongly to the attitude of these men. As a matter of fact, I believe that the Labour party generally objects very strongly to their attitude. I am satisfied that the “waterside workers have not the general support of other trades organizations; but, unfortunately, like some men in public life, these other organizations are ‘ afraid to say what they believe to be right - they fall in loyally behind an organization which refuses to consult them. The Waterside Workers’ Federation says to them, in effect : “ This is our trouble. We shall fight our own battle, even though it may bring about disorganization and disruption, and throw the whole of you out of employment. That is nothing, so long as we may enjoy special privileges.” A few weeks ago; the waterside workers in Hobart demanded the right to unload coal which came down to Hobart in river steamers from the Catamaran coal mine. They were warned that the effect of their action might mean the closing down of the mine ; but nevertheless they persisted in their demand and the steamers had to be laid up, the coal mine was closed down, and 300 persons settled about the mine had to scatter through the State looking for employment. The waterside workers took that particular action in order that they might unload Newcastle coal at 6s., 7s., and 8s. an hour. I do not know that the Catamaran coal mine was in as sound a financial position as it might have been, but the action of the workers in demanding the right to unload coal at those increased rates was the deciding factor in the closing down of the mine. Previously ,the coal had been discharged by the crews of the small river steamers. I urge the

Government to’ use every legal power it possesses to prevent this calamity being brought upon the people of Australia. The waterside workers must be told that, like other unions, they must observe the law. Very few unions deliberately flout an award of the Arbitration Court. It is the duty of the Federal and State Governments to tell the Waterside Workers’ Federation to obey the awards of the Arbitration Court, or else be placed outside the pale of the protection of the court.

Vice President of the Executive Council · Western Australia · NAT

[3.27]. - I hope that the action taken by Senator Ogden to-day will not be interpreted by those who are bringing unemployment and distress upon the workers of this country, as an attempt to bring pressure to bear on the Government to move the Arbitration Court to hear the case of those who are deliberately defying the court; because that is an attitude which the Government has not the slightest intention of adopting. Nothing would please those who are on strike more than that Parliament or the Government should be used to bring pressure to bear in that direction. By a species of terrorism the waterside workers are aiming to compel the Arbitration Court to bow the knee at their dictation. Let us look at the history of the case. I have it here, as prepared by the Registrar of the Arbitration Court. On 24th March, 1927, his Honour Judge Beeby, in declining to proceed with the hearing of the Waterside Workers’ Federation’s claims, said -

I have given a great deal of thought and consideration to this matter, and I have considered the rule-books and the affidavits. I desire to make a considered statement in regard to this case so that the union will know exactly what its position is as far as this court is concerned.

During the hearing on 15th January last and subsequent dates of the application by the Waterside Workers’ Federation for a reconsideration of overtime rates and for an award granting preference of employment to its members, allegations were made by various employers that different branches of the federation had adopted and were enforcing local rules in conflict with the then operating wards and agreements. I’ then asked the federation to consider what steps it was prepared to take to ensure observance of awards and to prevent branches imposing local rules and issuing orders to members to demand conditions of employment not incorporated in awards or agreements.

Acting on the assumption that some respect would be paid to this request, I made an interim award increasing overtime rates, and stated that the court would proceed at an earlydate to reconsider carefully wage rates and. conditions of employment and would further assist the parties in an effort to establish an industrial council formed for the purpose of periodic revision of waterside labour conditions.

Since that date the Melbourne brandies of the union have continued circulating sets of rules containing clauses which set up workingconditions not authorized by any award oiincluded in any agreement. Affidavits havealso been filed by various employers, complaining that breaches of awards have been, continued and that new conditions not included in agreements or awards, and contrary to prevailing customs, have been imposed in different ports. Up to the present the material allegations contained in these affidavits havenot been denied.

In the port of Melbourne, the vigilance officer of the union has, by interfering with men at work and by threats or fines, persuaded them, to insist that not more than ten bags of bagstuffs shall be put into a sling, in place ofthecustomary twelve bags. Similar limitationsof output of cased kerosene, and, in Adelaide,, of railway sleepers, have been insisted on. In. New South Wales, the local branch of theunion, for the purpose of compelling . employers to pay a special rate for wheat, hasseriously interfered with shipping by placing a limitation on the number of bags of wheat, loaded per gang per hour; and by refusing towork overtime.

Several other complaints relating to actionsof local branches in different ports were alleged, and remain unanswered. The secretary of the federation filed one affidavit as towheat loading in Sydney, in which the allegation’ of limitation of output was not denied.

I am reluctantly and regretfully forced tothe conclusion that the union’s present policy is to permit local branches to set up and enforce rules, and to act even without rules, in defiance of awards of. this court, of their own agreements, and of the established customs of ports.

The desire of the union to secure a reconsideration of working conditions is perfectly legitimate, and the court intended to enter on the hearing of the pending disputes on Tuesday last. It has always been a rule of this court that while a case is pending, none of theparties involved shall disturb the existing conditions and customs, or enforce claims under the court’s consideration by direct action. Where small local troubles beyond the control - of the executive have occurred, breaches of this rule have been overlooked. In this instance, however, the breaches are serious, and involve efforts to arbitrarily limit production. Whether or not waterside workers’ conditions should be altered to increase the numbers of men working in gangs, or to limit the weight of slings, or to provide increased rates when handling wheat, and whether revision of conditions relating to matters referred to in the affidavits were issues raised in the plaints before the court. The actions of branches of the federation in trying to force adoption of their claims while a case is pending cannot be tolerated, and until the branches are prepared to observe the conditions prevailing at the time of the filing of their plaint, the court cannot proceed further with the hearing.

As the court cannot of its own motion vary atn award, I will not at present say anything as to the cancellation of the interim award of the 1st February. That matter will be considered if application is made by one or more of the parties bound by an award. I understand that the Federal executive of the Employees’ Federation will shortly meet in Melbourne. If they can give the court satisfactory guarantees on the matters referred to, the hearing of the case will be immediately resumed.

I make “that statement after very careful reflection. I regret exceedingly that I am not permitted to go into this matter. I believed it was possible, perhaps, to bring about a better relationship on the waterfront, but that cannot be done while the union claims the’ right to dictate working conditions. If they are to have arbitration then those conditions must be settled by this court. While I pay the respect that is due to the affidavits filed in reply, they amount to an admission that these rules have been adopted deliberately, and that the union intends to try to enforce them. Some of the things they ask may be perfectly just; I cannot say at present. Those matters have to bc investigated. But I cannot go on and fix wages and overtime, and then leave it to the union to say how much work they are going to do, or under what conditions they are going to do the work. I leave the matter over for the present. I ask the Waterside Workers’ Federation to give serious consideration to what I have said when they hold their conferences, and if they can give me sufficient assurance to enable me to go on with the case I shall proceed with it.

The reply to that very conciliatory statement from the court is contained in the following telegram from Brisbane, published in the Argus on 22nd October, 1927:-

Retention of One “ Pick-up.”

Brisbane, Friday. - A special “ stop-work “ meeting of members of the Brisbane branch of the Waterside Workers’ Federation was held this morning, and attended by about 800 persons. The following resolution was passed with two dissentients: - “ That this federation approach the court to see if it will hear its plaint without withdrawing the one ‘ pick-up ‘; that if refused the federation adopt a policy of Irritation along the lines laid down previously by the committee of management in refusing to work overtime to bring about preference to members of the federation and one ‘ pick-up ‘ a day to nil branches who desire it; the said irritation policy shall be varied to suit various branches if required.”

The president (Mr. A. Hankinson) said that the meeting had been called in accordance with the instructions of the Federal committee of management. Similar meetings were being held in other States for the purpose of receiving the report of the recent conference of the federation held in Melbourne, and to consider and vote on the resolution quoted.

A motion was unanimously agreed to protesting against the Sydney branch, or any other branch, accepting new members while the federation was overmanned.

Fancy such an attitude being adopted by those who suggest that they are loyal to the principle of arbitration. Their actions are absolutely hostile to arbitration. They are saying that the court must do as they wish and that they will penalize the industries of the country and the workers generally unless they ger, their own way. The attitude of the Government is that it will not bring the slightest pressure to bear upon the Arbitration Court or interfere with it in any way. The duty of the members of the Waterside Workers’ Federation is to obey the law as laid down by Judge Beeby in this very conciliatory recommendation. This Government will go to any extent necessary to see that the law of the country is observed, and in order to ensure that the industries of the country are carried on. The undertaking it gave on a previous occasion that communication between Tasmania and the mainland would be maintained is repeated. The Government’s attitude will, I am sure, receive the overwhelming support of every law abiding person in the community.

Senator Ogden:

– Who can apply for deregistration of the union? Could the Government do so?


– The employers are entitled to do so. The Government are not parties to the dispute. The present industrial trouble provides another illustration of the pitiable position in which the Commonwealth Parliament “stands under the Constitution in’ regard to interstate disputes.

Senator Kingsmill:

– And . which, it sought to avoid.

WESTERN AUSTRALIA · ALP; NAT from 1917; UAP from 1931

-GEORGE PEARCE. - Yes. We asked that in regard to interstate disputes the Commonwealth Parliament should have the same powers as a State parliament. Honorable senators are aware, however, that our powers in relation to interstate industrial disputes are severely limited by the Constitution. Nevertheless, the Commonwealth Government will, with the powers it possesses, do all that it can ; but it will not endeavour in the slightest degree to bring pressure to bear upon the Arbitration Court.

I hope that nothing will be said on either side of the chamber during this debate to encourage those who are defying the law, and who believe that they can bring, directly or indirectly, parliamentary, political or any other pressure to bear on the court, to encourage them to defy the Arbitration Court. I join with Senator Ogden in his contention that there is an obligation on the part of the Opposition to declare themselves in this matter. If honorable senators opposite believe in arbitration, as they say they do, they should tell the members of this organisation that they are in the wrong, that their action is bringing about unemployment ‘and distress in this country and that the right thing for them to do is to declare the strike off. That having been done, the Arbitration Court would then be able to adjudicate. I trust there will be no division of opinion on this matter in this Parliament. If there is not, I venture to say that public opinion against the strikers will be so strong that it will do more than can anything else to settle the dispute. The present dispute could not have arisen at a worse time. The wheat and fruit harvests as well as the tourist season arc rapidly approaching, and from the point of view of the public a more inopportune time for a strike could not have been chosen. Where is this going to lead us? Can Australia, with a light harvest and the lack of employment which must necessarily follow, countenance such a position ? It may be “ the last straw “ and lead to financial disaster. These men are courting industrial destruction. Their action in threatening to tie up the whole of our shipping should not be countenanced ‘by anyone either inside or outside this Parliament, and honorable senators of the Labour party should certainly tell these people point blank that they are in the wrong.

Senator NEEDHAM:
Western Australia

– I followed with interest the speech of Senator Ogden, and I am still wondering whether in submitting his case he was actuated by a desire to protect the interests of the community or to attack the party to which I have the honour to belong.

Senator Ogden:

– I am anxious to protect the community.

Senator NEEDHAM:

– He said at the outset that he would not ask the Government to bring any pressure upon the Arbitration Court because that court was the master of its own destiny.

Senator Ogden:

– That is so.

Senator NEEDHAM:

– But he concluded by appealing to the Government to take immediate action to de-register the Waterside Workers’ Union.

Senator Ogden:

– I do not care by whom the union is de-registered.

Senator NEEDHAM:

– The honorable senator referred to the action of the men in connexion with the loading and unloading of certain ships as if he were giving the history of the whole dispute. He did not, however, touch the main point at issue. He said that the action of the men in this instance would cause unemployment; but it is well to remember that, whilst a member of the Senate, he did not voice his objection to the action of the associated banks of Australia when they had a financial hold-up, which threw thousands of people out of employment. The Vice-President of the Executive Council (Senator Pearce) has definitely stated that the members of the Waterside Workers’ Federation are defying the court. I wish to compare- that statement with one made by the Prime Minister in another place, who, when asked a question yesterday morning concerning the same industrial trouble, said he was not going to make at that time any statement which might prejudice a very delicate position. For once I agree with an utterance of the right honorable gentleman. It compares more than favorably with that of the Leader of the Government in the Senate, who has not been so careful in the choice of his words. TheVicePresident of the Executive Council, instead of relieving the position has aggravated it. The Minister also quoted the utterances of Judge Beeby. This is not an arbitration court. We are not assembled here to settle industrial disputes, but intervention by the Prime Minister might be of assistance.

Senator Sir William Glasgow:

– Does the honorable senator think that awards of the Arbitration Court should be obeyed ?

Senator NEEDHAM:

– I shall come to that in a moment. The court can intervene if it chooses to do so.

Senator Foll:

– Does the honorable senator believe that the awards of the court should be obeyed ?

Senator NEEDHAM:

– The honorable senator knows the attitude of the Labour party towards the Arbitration Court.

Senator Sir William Glasgow:

– The employers have always had to obey the awards of the court.

Senator NEEDHAM:

– The Labour party has always advocated arbitration as a means of preventing and settling industrial disputes. It has not been shown today that these men are defying an award of the court. The main cause of the trouble has not been mentioned.

Senator Herbert Hays:

– What is it?

Senator NEEDHAM:

– The employers demand that the men shall present themselves for picking-up purposes twice a day, whereas for six years they have worked under three awards which, provided for only one pick up daily. The employers have had opportunity to raise the question of a second pick-up, but have not done so. I understand that Judge Beeby said that the whole of the awards and declarations would be placed in the melting pot and a new award would be made. That was being done when the steamship owners brought a host of affidavits not relevant to the plaint before the court, and on those affidavits Judge Beeby ordered the men to return to work.

Senator Sir William Glasgow:

– The honorable senator is prejudicing the case.

Senator NEEDHAM:

– I am replying to the statement made by Senator Ogden that the trouble had arisen from the refusal of the waterside workers to load or unload a certain vessel. If there has been a breach of the award the Waterside Workers’ Federation are not alone to blame. The steamship owners as well as other employers have broken awards on other occasions, but in this instance Senator Ogden is endeavouring to place the blame upon the members of the federation alone. ‘ Hehas also attempted to show that the country is teeming with industrial unrest. The Prime Minister, speaking in September of this year, said -

Australia was not more subject to industrial trouble than any other country. The overwhelming majority of workers in Australia were perfectly sane, sound, decent people, who wanted to get on with their job.

Later he said -

The only way in which these problems can be dealt with is by resorting to a spirit of co-operation and goodwill, which must fill thegap which political action is unable to bridge.

Senator Ogden has shown his good will towards the men by suggesting that the organization should be deregistered while the good-will of Senator Pearce consists of accusing the men of having done certain things while ignoring the wrong things done by others. The Prime Minister also said -

Many Empire problems have been solved by understanding and mutual sympathy. Surely in their own small sphere Australians can. bring about a similar spirit. Was there not a tendency towards antagonism in every direction?

Industrial disputes are always injurious, particularly to the workers involved in them. For that reason, the Labour party advocated arbitration as a means of settling disputes. That system is not perfect; but no system is without its faults. The long delay in getting cases heard before the Arbitration Court has frequently been responsible for industrial disputes. I maintain that the present is not the time to discuss this matter. To-morrow the ultimatum of the employers will expire. In the meantime, the negotiations which have been proceeding may lead to a settlement of the dispute. It would have been better if members of this Parliament had held their peace, so that not one word of theirs could be said to have aggravated the seriousness of the position. Our duty is to do all that we can. to remove the obstacles in the way of lasting industrial peace.

Senator Sir George Pearce:

– I desire to make a personal explanation. During the course of the honorable senator’s remarks, he said that my statement of the Government’s policy on this question differed from the Government’s policy as outlined’ by the Prime Minister in another place. When I spoke, I had before me the statement made by the Leader of the Government in another place; but as our Standing Orders prevent me from quoting from the Hansard report of a speech made in another place during the current session, I did not read the Prime Minister’s exact words. However, there was no essential difference between my remarks and those of the Prime Minister. We both said that, in the opinion of the Government, the action of the nien amounted to a deliberate flouting of the court, and that their action was an unjustifiable attempt to threaten the court.

Senator PAYNE:

.- Senator Ogden was fully justified in “bringing this matter forward, if only to give honorable senators of the Labour party an opportunity to express their views concerning a matter so profoundly affecting the public welfare. I agree that we in this Senate should say nothing which- could be construed as an interference with the Arbitration Court ; but when the country is confronted with a serious problem, it is the duty of all public men to take a stand and to express their views.

Senator Findley:

– What purpose will it serve?

Senator PAYNE:

– If honorable senators opposite would express their views on this matter, they might assist in the settlement of the difficulty. Unfortunately, they are silent whenever there is an industrial dispute; they will not even tender advice to those on whose votes they depend ; in a time of crisis they are of no use to the community. Senator Needham knows well that the majority of the men engaged on the Australian waterfront have no desire to be out of work at this season. On the contrary, they are desirous of earning as much money as they can. Unfortunately, during recent years there has sprung up a new army of men called organizers - I prefer to call them disorganizes - whose sole object seems to be to create disputes so that they themselves may not be without a job. I have on many occasions talked with men who earn their livelihood as waterside workers, and they have told me that frequently they have not desired to cease work, but have been ordered to do so. If the Leader of the Opposition shuts his eyes to facts, he is not doing his duty. He should recognize that to a great extent the people follow the lead set them by their representatives. The position, as pointed- out by Senator Ogden, is indeed serious. I know something about one of the disputes which has caused the hold-up of an important Australian industry. I refer to the suspension of the Electrolytic Zinc Company’s operations. It is not generally recognized that the wharfs from which the company ships its product are privately owned, and are situated at least 5 miles from Hobart. As there are no waterside workers residing in the locality, the suggestion that the cargoes handled at those wharfs should be handled only by members of the Waterside Workers’ Union - all of whom live in Hobart and suburbs - is intolerable. The company’s own employees do the work, and I am informed are paid for it at the same rates that would be paid to members of the Waterside Workers’ Union. The company has, moreover, gone to considerable expense in providing labour-saving machinery to handle the zinc in the most expeditious manner. No arbitration court would overlook those facts. Those who are responsible for the present cessation of work should realize that nor only are the waterside workers affected by this strike, but that many thousands of workers throughout Australia are also affected. Particularly at this time of the year, public men should not hesitate to urge the workers to resume work, and to rely on the Arbitration Court to deal justly by them. Otherwise of what use is the Arbitration Court? If, after an award had been given, circumstances arose which would justify an alteration of the award, a further appeal could be made to the court. The people of Australia will not much longer tolerate these continual cessations of work in face of the machinery that has been provided for the settlement of disputes. I approve of Senator Ogden’s action in bringing this matter forward, and I hope that this expression of the opinion of honorable senators will have some weight with those who are called upon to deal more directly with the settlement of the dispute. I trust that their efforts will be successful and that work will again be resumed.

Senator DUNCAN:
New South Wales

– As a representative of the State in which is situated the chief port of the Commonwealth, I regard the maintenance of our shipping services and the efficient handling of cargoes as a matter of great importance not only to that State but also to the whole of Australia. I agree with the Leader of the Opposition that we in this Senate should do nothing which would tend to extend the dispute or to inflame the passions that have already been aroused. Nor do I think that this is a time when attacks should be made on organisers or others. As an old trade unionist, I regard this dispute with concern. While I have always been an ardent believer in arbitration as a means of settling disputes, I agree with those who say that that system is to-day on its trial. Indeed, there are many who believe that already it has been tried and found wanting, and should therefore be abolished. Much of the opposition to the Government’s referendum proposals to increase the industrial powers of the Commonwealth was due to a disinclination on the part of the people to extend the arbitration principle. There is a general feeling in the community that the system whereby industrial disputes are dealt with must be reviewed iri the near future-. That is a tragedy, because the bulk of trade unionists stand firmly by the principle of arbitration as a means of settling industrial disputes. Comparatively few among the great number of trade unionists in Australia continue to pin their faith to direct action whenever a dispute arises.

Senator Ogden:

– I object to them claiming both means of settling disputes. , . … ,

Senator DUNCAN:

– I ‘agree that we should have either one system or the other. It is true, as Senator Ogden has said, that the people of Australia are justified in looking to the members of the Labour party to give them a lead in this matter. I go further, and say that as the limitations, constitutional and other-, wise, imposed upon Government, both Federal and- State, make it impossible for them effectively to deal with this situation, the solution of the difficulty rests with honorable senators opposite and those trade unionists who believe in arbitration as a means of settling industrial disputes. The section of industrialists that stands for direct action derides the arbitration method and sneers at what it calls arbitration court trade unionists. It alleges that it would be infinitely better if the court were abolished so that the workers would be forced to depend entirely on th6 strength of their organisations. But what is the opinion of the great majority of the trade unionists of this country? One remembers that the principle of preference to unionists and the establishment of arbitration courts- and wages boards have had the effect of building up the strength of the unions.

Senator Givens:

– And filling many of them with “ scabs.”

Senator DUNCAN:

– I do not go so far as to say that; but the unions have a large number of men in their ranks who do not practice the ethics of trade unionism, but use their organization merely as a means of grabbing increases in wages. It seems to me that a great conflict will have to come between the section that believes in arbitration and the other section that unfortunately has been able to secure control of the unions, and seeks to hurl the arbitration method into political and industrial oblivion. There is only one way in which this great issue can be determined, and that is by the unionists who believe in arbitration taking a firm stand, and declaring that they will not permit the would-be destroyers of the Arbitration Court to continue the work in which they are now engaged. I agree with Senator Ogden that ir is a pity that honorable senators opposite do not step into the breach and declare themselves to be behind the majority of trade unionists, who favour the settlement of industrial disputes by arbitration. The Leader of the Opposition, to whose speech I listened with .close attention, said much about the merits of the dispute; but he had nothing whatever to say upon the great principle of whether arbitration should be accepted by every party to the disputes that are de’alt with by the court, or whether any organization, whether of employers or employees, should be permitted to trample on the system of arbitration whenever it suits it to do so. Not one word of condemnation was heard from Senator Needham regarding the action of the mei. who would abolish arbitration. He is not prepared to tell these men that they are in the wrong, and he is not willing to plead for a more general acceptance of the principle of arbitration. “Why do wo find honorable senators opposite, and the political Labour leaders outside, afraid to take the stand that they ought to adopt in the interests of the majority of the trade unionists f Is it because the* fear the militant members of the union who desire to smash arbitration courts and the arbitration acts, thereby causing distress from one end of the country to the other, in order to bring about the revolutionary conditions that obtain in some other countries? They are not “game” enough to condemn the action of those nien. The attitude adopted by the Leader of the Government in this chamber, is the strictly correct one. If it were proposed by the Government to interfere with the court in this matter, I could no longer support it, but I am sure that it would never suggest action of that kind. After all the Arbitration Court if not actually an ordinary court of justice, is presided over by a portion of the judiciary, and if that court is to be broken down by the Government of the day, dictating what it should do in the event of an industrial dispute a government would be equally justified in giving orders to the High Court, or any similar tribunal. Such an action would be entirely wrong. It is distressing to hear honorable senators opposite asking the Government to intervene, and tell the Arbitration Court what it should do. That is a new. .doctrine.

Senator Foll:

– We might as well give directions to a court dealing with a criminal case.

Senator DUNCAN:

– Yes, with any case. It is a pernicious doctrine, and I am exceedingly pleased to know that the Government is not prepared to accept the advice of Senator Needham. The time may come when there will be in office a government that will attempt to dictate to the courts; but, thank heaven, that day has not yet arrived.


Senator Ogden is to be commended for bringing this matter forward. The Leader of the Opposition, in his responsible position, might have said something, at all events, in justification of those who desire that a law passed by this Parliament shall be observed. But his remarks were merely apologetic “on behalf of those who are breaking the law to-day. He said that, the judge would have proceeded to hear the complaint lodged by the waterside workers had it not been for the action of the employers in handing in affidavits showing that the waterside workers had enforced conditions on the employers other than those prescribed in the determinations of the court. If we are to expect industrial peace under the arbitration system, the employers, whether ship-owners or any other employers of labour, are justified in pointing out to the judge, by affidavit, that they will not tolerate the enforcement upon them of conditions other than those imposed by the court. The waterside workers have a determination under which they have been working ; but from time to time they have introduced other conditions, which have been accepted by the employers. When the case was submitted to the judge, the employers pointed out, by affidavit, that, although certain conditions had existed, the pinpricks that had occurred from time to time would not be tolerated in future. To all intents and purposes, the Leader of the Opposition excused the union in question from nonobservance of an Arbitration Court award. He had nothing to say with regard to the breaches of the award, or to direct action, and, finally, he announced that he still stood for arbitration ! All

I have to say is that he has an extraordinary conception of the meaning of arbitration and conciliation. The Opposition declares that its policy is to support arbitration, and yet, when awards are broken, from time to time, no complaint is heard from it. . It is afraid to express any opinion in favour of a principle that it claims to support. The unionists must realize that they cannot have it both ways. If they are” to resort to direct action and the strike when a.n award does not suit them, they will break down the whole fabric of arbitration.

Senator Foll:

– Some of them took a ballot in North. Queensland as to whether they would abide by an award when they got; it.


– I shall rake another opportunity later of dealing with that matter. The Leader of the Government has given an assurance that the Ministry will see that the essential services of the country are maintained. It seems extraordinary that disputes in connexion with 3ea transport always occur at the busiest time of the year, when harvests have to be marketed, and the tourist traffic is at its height. I hope that the Government will take a firm stand at the proper time in regard to this matter, and let it be seen in no unmistakeable mariner that essential public services are not to be allowed to be interfered with at the bands of a minority, to which the people of Australia have always shown extreme tolerance. I think that the limit of public forbearance has been reached in this, as well as in certain other matters. I hope the Government will show its determination to honour the promise given to the electors two years ago to see that law and order and the services of the country are maintained, and thereby justify the majority which the people gave them two years ago.

Western Australia

– I rise to protest against the inconsiderate attitude of honorable senators on this side of the chamber! Can they not realize the difficult position in which they place their fellow members of the Senate opposite? Why do they urge them to express an opinion on the subject that has been raised? Can . they not see, in their pity, that whatever opinion honorable senators opposite express, they must offend a large proportion of their constituents? Why not consider that aspect! Those unfortunate representatives are in the most difficult position in which it is possible for them to find themselves. Why force them to express an opinion, if they have one, on this matter? I really feel deeply for them. Honorable senators on this side, including Senator Ogden, have not spared their feelings. They have my sympathy. I hope I shall never be in the same position. But let me suggest to them a way out. Let me suggest that independent of this case, but still relevant to it, they should consider the advisability of placing another stone upon that wall which they and their party are building around Australia to isolate us from the rest of the world. Let them think of that for a moment. If they do, then what honorable senators on this side may say on this issue matters not a jot. If they express an opinion on the larger question, they might very well let the smaller one go. I do not intend to express my views upon this subject. I question if it is necessary, unless I am called upon to do so, by the Leader of the Opposition. Honorable senators opposite can, I think, make a good guess at what my views are. I am quite prepared to let it go at that. I cannot, however, resume my seat without again expressing my sympathy with honorable senators opposite in the extremely awkward position in which they find themselves in having to offend a large section of their constituents if they express any opinion whatever upon this important matter.

Senator SAMPSON:

– I do not desire to labour this question. Senator Ogden is to be congratulated for having drawn public attention to the situation that has arisen as a result of the overtime strike by the waterside workers in Australia. Those of us who. have been watching the trend of events on the waterside during the last few months realized some time ago that what has happened was inevitable. I feel sure that public opinion is strongly behind the ship-owners in their present attitude,, because the people generally are tired of this annually recurring hold-up of shipping which year in and year out we have had to pay for in my State. The ultimatum delivered by the ship-owners is the only logical course which they could have adopted. It would be intolerable if outside organizations could make good their demand to interfere with the conduct of private business concerns. The Wateraide Workers’ Federation was fully aware that in sanctioning an overtime strike at this particular time it would dislocate the shipping industry. I was hoping that the Leader of the Opposition (Senator Needham) would declare this afternoon whether or not he approved of what had happened and whether he believed in job control. I join with Senator Kingsmill in extending my sympathy to Senator Needham. I realize how awkward is the position iu which he finds himself. Even if the shipowners agreed to meet the Waterside Workers’ Federation in conference there would be no guarantee that any agreement that might be reached would be honored. The ultimatum delivered by the ship-owners expires to-morrow. The issue is whether or not the laws of the* Commonwealth shall be observed. To that there can be only one answer.

Senator REID:

– I have listened attentively to all that has been said, and I fail to see what good purpose can be served by this debate. If we study the history of the Labour movement we must be forced to the conclusion that in industrial disputes such as the one now engaging our attention blame is not attachable so much to the leaders or organizers of labour as to the rank and file - those members of unions who do not take sufficient interest in the business of the organizations to attend their meetings. The power of the unions has been built up by the influence of the Arbitration Court. I doubt- if there were a half-dozen trade union organizations in existence before we established our present system of conciliation and arbitration for the settlement of industrial disputes. Under that law a man is forced by the operation of the principle of preference to unionists to join a trade union if he wishes to earn a living. The system has placed power in the hands of inexperienced Labour leaders who have not shown a deep sense of responsibility. But after all they are not so much to blame as the indifferent trade unionist who is not sufficiently interested in the doings of his union to attend its meetings and thereby safeguard benefits which have come to trade unionism generally through awards of the Arbitration Court. We cannot hope for a marked improvement in our industrial affairs until trade unionists generally realize their individual responsibilities by attending the meetings of their unions.

Senator Sir George Pearce:

– Even if they did attend they might not be allowed to express an opinion.

Senator REID:

– I think I can claim a wider experience of trade unionism than even the Leader of the Senate, and I say definitely that under present conditions, but largely owing to their own indifference, the majority of trade unionists are inarticulate. The position is not likely to improve until the majority of unionists regularly attend the meetings of their organizations and use their influence against any attempt by the minority to tyrannize the movement. In this debate we have an illustration of what I mean. Honorable senators opposite are silent when they know they should speak. I am wondering if their silence is due to their belief that the dispute is in a sense sub judice. .

Senator Sir George Pearce:

– That has not deterred them before.

Senator REID:

– The right honorable the Minister is right. Let me recall what happened recently in New South Wales. Prior to the last general election there was a meeting of the Federal Labour Conference in Canberra. That body passed certain resolutions and laid down a definite course of action in respect of the pending New South Wales State election. But what happened? The opposing section of the movement snapped its figures at the federal conference and, defying the executive, supported Mr. Lang. Actually it did more than that- -it brought a number of Federal Labour members behind Mr. Lang. The present situation of Australian shipping is really serious, but most, of the blame is attachable to the great body of trade unionists themselves.

Senator Sir George Pearce:

– Does not the honorable senator believe that the leaders should tell the rank and file when they are wrong?

Senator REID:

– I question if the leaders really believe that they arc in the wrong. We must not forget that many of them lack experience and when placed in a position of responsibility they do not know how to use their power. Few know how to use power when it is placed in their hands. I include myself, lest it be suggested that I am unfairly criticizing other people. The leaders of trade unions, as we have seen, are not leaders in the true sense of the word; many are little better than tinpot gods suddenly raised to a position of responsibility and have no idea how to control a difficult situation. It is deplorable that there appears to be a disposition in certain quarters to undervalue the privileges which the working class are now enjoying as a result of our system of arbitration. I hope that wiser councils will soon prevail. At present the great majority of the workers seem to be completely out of hand, and they are forcing their leaders along a course which they must know to be wrong. I know that many of them defy the Arbitration Court despite the fact that nearly all the judges of the court have been exceedingly favorable to the unions. Judge Beeby is apparently as favorable to them as any one could wish him to be, and not one of the past judges of the court could be accused of bias against the unions. Hence, if the workers continue in their refusal to obey the awards given by judges in their favour, arbitration will be abolished and preference to unionists will be knocked on the head. When that happens, the unions of Australia will be scattered to the winds. Within two years nine-tenths of them will not be enjoying the privileges that they have to-day, and which they would not be enjoying but for the Arbitration Court. With the abolition of the court, competition between employers will bring back once more the bread and butter line, and the unions will be smashed. The best thing the waterside’ workers can, do is t’o carry’ ‘out their award. There is one grievance they havewhich I think justified. They have to wait too long before they can get their claims heard by the court.

Senator Sir George Pearce:

– There is no difficulty in that respect now with the appointment of additional judges.

Senator REID:

– According to the newspapers, the wharf labourers have been from nine to twelve months trying to get some matters remedied by the court.

Senator Sir George Pearce:

– The court was ready to hear their claim if they would only obey an order of the court. Judge Beeby adjourned the hearing of their claim to enable them to obey a previous award.

Senator REID:

– I quite endorse the action of Judge Beeby. I think he did right to tell the union to fulfil an award of the court before he would listen to their further claims, but I understood from the newspapers that previously the hearing of their claim had been delayed. It is of no use repeating that the situation is critical. We should all try to instil into the minds of sensible unionists, who must be in the majority, that they have everything to lose and nothing to gain by this eternal turmoil, and that they ought to enforce their decisions at the union meetings. If that were done, I think there would be more co-operation than there is at present. I do not know what can be gained by this debate, and I do not know that I have added anything by speaking, but it seemed to me that the case was so serious that one was entitled to express an opinion upon the situation.


– The honorable senator has exhausted his time.

Senator LYNCH:
Western Australia

– The debate initiated by Senator Ogden seems to have one serious defect, and that is that the Senate has not been favored with an expression of opinion from a very important section of the chamber. We have arrived at a stage in the present situation when an expression of opinion from that section would do a lot of good. I do not know whether a stop-speech meeting has been held in the vicinity of the Federal Parliament House, but we have an illuminating’ silence^ from some- honorable senators when an expression of opinion by them would be very salutory. This stoppage in the loading of ships in violation of an award of the Arbitration Court, is no small matter, and is of painful recurrence in this country. An expression of opinion from one particular section of the Senate would do a great deal’ of good, because of the effect that this present trouble is likely to have on arbitration - which, as Senator Duncan has said, is still very much on its trial. We are, unfortunately, not favored with it. When we find one powerful union disrespecting the law and bringing arbitration into contempt by adopting the ready means at its disposal outside the Arbitration Court, it bodes ill for the large number of unionists and unions who can resort to no such measures. Certain trade unions stand at very important strategic points in our industrial field, and as a result of the power they can wield at those points they are able to hold up the industrial life of Australia and bring its trade and commerce to a standstill, causing serious inconvenience and loss to the community in general. At the same time a very large section of trade unions is not in the position to command that same amount of power, and it is in their interests that arbitration should be preserved in all its fulness. If arbitration continues to be buffetted and kicked about and brought into general contempt on every occasion like the present by the powerful unions, it must naturally follow that the time will come when that shield of defence of the smaller unions will be lost to them, and their position will be very much worse than it was years ago.

I do not agree with Senator Reid that no good can come out’ of this debate. Senator Ogden had every reason to bring this matter forward. In a few days Tasmania to all intents and purposes will be as effectively shut off from the mainland as it would have been if the German fleet had surrounded it during the late war. Is this being done by an influential section of the community? No; it is being done by a miscroscopic few - an infinitesimal section of the people, who by exercising the powers of blockade - their own selfmade, law: - are forcing the ‘ island State into the position of a beleaguered’ city. It is easy to conceive the enormous loss that will be inflicted on the various interests in that island State and on interests in other outlying portions of the Commonwealth, though not to the same extent, as in the case of Tasmania. Are we to stand helplessly by any say nothing? Are we to signify by our silence our approval of the action of these men? What would be the position if the boot was on the other foot, and the shipowners were guilty of a. lock-out? Instead of indulging in a systematic policy of silence in this chamber certain honorable senators would unloose their tongues and wag them indefinitely; we should hear declamations and denunciations and every form of blame rightly saddled on the shoulders of those who were seeking to’ bring the law into contempt.

Senator Ogden had another reason for bringing this matter forward. The refusal of the waterside workers to perform a certain portion of their work during overtime is a violation of an award they have obtained from the Arbitration Court. By their action they have transferred the dispute^ from the court and -its precincts to the bar of public opinion. Is not this chamber entitled to express its opinion under those circumstances ? If there is any collection of men in the Commonwealth entitled to do so on a question of such vital importance as this, it is this Senate, and no other that I know of. Unless the waterside workers have public opinion in their favour they know they cannot win the struggle. What has public opinion to say as to the action of the men - whether it is right or wrong, and whether they are entitled to disrespect an award of the Commonwealth or respect it ? In view of the great social wrong that has been perpetrated as a direct result of the action of the workers, I claim that the common weal lias been seriously injured. Not only on this occasion, but on previous occasions, has it been injured, and if we say nothing, our silence will be wrongly construed. - 1 do not believe in the claim that the Government can do nothing. If I interpret correctly the outline of the Government’s intentions given by Senator Pearce, the Government will see that the law is upheld. . I believe that the Government is entitled to go that far, and even further. I believe that the law should bp strained to the uttermost for the purpose of seeing that a national infliction, a great social wrong, is not put upon innocent people. The Government will not be justified in standing inertly by with folded arms while the people suffer. Ministers would not be worthy of their salt if they did not see that the law was enforced and that wrong was not done to innocent people. Senator Ogden is entitled to the appreciation of honorable senators for his efforts in bringing the workers to a sense of their duties, if only they will hear what is said to them by their friends. Senator Ogden and others who have spoken in this debate are as much the friends of the workers as those who are so loud in their professions of praise of them. Speech is very cheap at any time and always ; it is actions that count every time. The professing friend is sadly wanting when you go to look for him. The person who acts at the critical time is the true friend. The sympathy of honorable senators who have spoken on this debate has always been on the side of the workers. We are asking only that the men who are taking part in this dispute shall adopt a better frame of mind, and that they shall not divide their friends or sour those who have been with them all the time. It is an old art in generalship to divide one’s enemies and to unite one’s friends; but in this case the men Are trying to divide their friends and to sour the feeling in the breasts of those who have always sympathized with them, and are their friends no matter what is said to the contrary. When the men commit these acts and resort to a form of blackmail against society, society must, protect itself. The odds against the strikers in their present action are overwhelming, as the number who will suffer is legion compared with the comparatively small number who are holding up the transport services of the country. I should like an expression of opinion by the professed friends as to the justification for their action on this occasion, if only for the purpose of showing if arbitration is to be preserved to safeguard the interests of trade unionists, and of no one else. In ventilating this subject, Senator Ogden has rendered a service not only to

Tasmania but also to other parts of the Commonwealth which may at any time have a similar experience if these men are allowed to defy the court. I trust, however, that wiser counsels will prevail, and that they will realize the seriousness of the unwarranted, step they have taken. Years ago wharf labourers were regarded as the cream of our workmen ; they were always ready and willing to do an honest day’s work. They were always alert when their interests were likely to be in danger, but were at the same time sufficiently unselfish to pay some regard to the interests of others. It was not their policy then to hold up the transport services of the country in the unwarranted fashion which these men are doing to-day. If they continue to act in this foolhardy way, they will eventually lose the support of those on whom they could otherwise rely.

Senator OGDEN:

– I was rather disappointed with the speech of the Leader of the Opposition (Senator Needham). I knew I could not expect him to express a definite opinion on such an important subject, although it is one which vitally affects the welfare of the Commonwealth. The members of the Opposition in this chamber would let the country go hang rather than endanger their seats in Parliament. I am not an enemy of Labour - my children have to earn their living in the industrial field - but I believe in the workers observing the laws as others have to do. All that I asked was that the members of the Labour party in this chamber should tell the workers that they should adhere to the principle of arbitration.

Senator Findley:

– Who gave the honorable senator authority to ask the members of the Labour party to express an opinion?

Senator OGDEN:

– I have the right to call upon the members of the party in this chamber to do so. If they refuse to tell these men that they should preserve this edifice erected by Labour, the inference is that they have abandoned their old ideals, and are supporting those who resort to direct action: The speech of the Leader of the Opposition was a masterpiece of evasion and was well thought out considering the short time in which he had to prepare it; but he refrained from expressing an opinion against the waterside workers, and also from openly condoning their action. On two or three occasions when the Labour party has been asked to express an opinion on crucial questions, it has refrained from so doing. That is the reason why X am’ not sitting behind the Leader of the Opposition to-day. On one occasion when the State was approaching a state of rebellion Senator Needham refused to respond to the call of his country. On that occasion the people of Tasmania asked for the assistance of Parliament in preserving communications between Tasmania and the mainland: but the Leader of the Opposition openly said that he intended to protect the waterside workers, irrespective of the interests of the general community. The action of the Leader of the Opposition and those who supported him on that occasion is largely responsible for the Opposition benches being practically empty as they are to-day. The vacant benches of the Opposition tell eloquently of the weaknesses of those who endeavour now to speak in the sacred name of Labour. If there is one section of the workers which has not observed the awards of the court, it is the waterside workers, who have received more from the court than any other industrialists in Australia. In their organization preference is given to unionists, and its members have the right to do all work offering onthe wharves at the expense of members of all other unions. They have overtime rates amounting in certain circumstances to 7s. 9d. an hour, as well as easier conditions than obtain in any other industrial activity. All of these advantages were secured as a result, of the arbitration machinery provided by this Parliament, and not by direct action, which they now favour. Notwithstanding this, the Leader of the Opposition refuses to tell the men they should observe the awards of the court. I have no hesitation in saying that if they refuse to obey the law, I shall, while preserving the interests of others, use -every oppor tunity to deprive them of the privileges which they now enjoy. That is not an unfair proposition. I do not deny the right of any unionist or worker to strike ;. but when expensive machinery is provided for the protection of their privileges, they should not resort to direct action. I fought for and helped the workers to secure arbitration, believing that they would work peacefully and under happier conditions. But what do we find? Unfortunately, especially on the waterfront, there is more industrial trouble to-day than existed prior to the establishment of the Arbitration Court. I repeat in all seriousness that if these men deliberately refuse to observe the awards of the Arbitration Court, I shall not hesitate to assist in placiug them beyond its jurisdiction. I thank the Senate for the way in which the motion has been received and also the Leader of the Government (Senator Pearce) for the definite statement he made concerning the determination of the Government to preserve law and order.

SenatorReid. - Did the honorable senator think that the Government would not uphold the law?

Senator OGDEN:

– No, but I wished to have a definite statement from its representative in this chamber as to the action the Government would take. I trust the Government will see that essential services are not in any way disturbed. Having directed public attention to the subjectI ask leave to withdraw the motion.

Motion, by leave, withdrawn.

page 2127



Senator THOMAS:

asked the Minister representing the Minister for Markets and Migration, upon notice -

What is the amount of refrigerating space provided on -

The Orient Company’s mail boats trading to Australia?

The Bay -class steamers of the Commonwealth Line?


– The information is being obtained and will be supplied to the honorable Senator as soon as possible.

page 2128


Report adopted.

page 2128


Bill received from the House of Representatives.

Suspension or Standing Orders.

Vice-President of the Executive Council · Western Australia · NAT

[4.55]. - I move -

That so much of the Standing and Sessional Orders be suspended as would prevent the bill being passed through all its stages without delay.

As honorable senators will observe, this is the only bill at present before the Senate, on the first reading of which, as honorable senators know, there can be a general discussion on subjects other than those with which it deals. The debate on the second reading, however, must be relevant to the bill itself. If, therefore, this motion is carried no hardship will be involved, as any honorable senator who wishes to speak on general subjects will be able to do so. When the second reading has been moved, assuming that stage is reached to-day, the debate can, if necessary, be adjourned.

Senator Payne:

– What is to become of the motion for the printing of the Estimates and Budget Papers?

Senator Sir GEORGE PEARCE.That will be read and discharged. A similar motion is brought before this chamber every year to give honorable senators an opportunity to discuss the Government’s financial proposals before the Appropriation Bill reaches this chamber.

Senator NEEDHAM (Western Australia [5.0]. - I hope that the Senate will not agree to the motion. Since I have been a member of the Senate I have consistently opposed unnecessary suspensions of the Standing Orders. The present is another such occasion. If I saw before me a notice-paper well filled with items of Government policy, and a Government eager to put that policy into operation, I could understand a motion to suspend the Standing Orders being submitted ; but the notice-paper before us is practically devoid of business. Moreover, some time must elapse before it can be augmentedby bills from another place. There is therefore no justification for the motion which has been submitted. It is true, as the Leader of the Senate has said, that on the first reading of this bill honorable senators may discuss subjects not relevant to it; but that is not a sufficient reason for suspending the Standing Orders. The ordinary procedure should be adopted. Realizing that only a few weeks remain before we adjourn for Christmas, I should have assisted the Government to get through its work expeditiously by suspending thu Standing Orders if the business-paper had warranted it; but that is not the position confronting us to-day. There is no justification for the action taken by the Leader of the Senate.

Question resolved in the affirmative.

First Reading

Motion (by Senator Pearce) proposed -

That the bill be now read a first time.

Senator NEEDHAM:
Western Australia

– The action of the Leader of the Senate in rushing this bill through is in keeping with what took place recently in another place. The Estimates were “gagged,” “bludgeoned,” and “ guillotined “ through that chamber. It is true that the debate on the Estimates extended over a long sitting; but, surely the elected representatives of the people should be given the opportunity fully to discuss the Government’s financial policy, and its handling of the country’s finances. During the last thirteen months Parliament has been in session for only a few weeks. In the circumstances what reason was there to rush the Government’s financial proposals through another place? The procedure which was adopted there is apparently to be followed in this chamber. Notwithstanding that during the last 21 months prior to this session Parliament has devoted only 84 days to its business, the Government forced ‘ the representatives of the people in another place to deal with an expenditure of many millions of pounds in a few hours. Such procedure is a travesty of parliamentary government. It is a reflection on democracy.’

Senator Herbert Hays:

– What ‘ does the honorable senator suggest should be done?’-

Senator NEEDHAM:

– If honorable senators opposite would exercise that independence of which they boast, such things would not happen. These legistive halls have been closed for many months, yet when members gather to conduct the business entrusted to them they are not given time to do so.

Before the last election the Government was rich in promises. Foremost among the promises which it then made to the electors was one that a scheme of national insurance against unemployment would be introduced.’ In his policy speech the Prime Minister said that, although it had been the practice of various Governments, when appealing to the electors, to make many promises designed to attract the support of the . different sections of the people, he would not resort to such tactics. Yet, his policy speech was full of promises, made with the distinct object of securing votes. Many of the promises then made have not been fulfilled; I do not think that the right honorable gentle- man ever thought that they would be fulfilled. Two years of the term for which this Parliament was elected have expired; yet no scheme of national insurance against unemployment has been introduced. Referring to the proposal of the Government the Prime Minister in hig policy speech said -

One of the main causes of industrial unrest is the everpresent dread which haunts the worker of the privation .and suffering which will be brought upon his dependants in the event of sickness, .unemployment and old-age. lt lias to be recognized- that, even under the conditions existing in Australia, the wages of the workers are not sufficient to enable them to support themselves against these evils. My Ministry recognizes the duty of the nation in this regard. The Ministry proposes to introduce legislation for a national scheme of social insurance covering the questions of old-age, and invalidity, which have been reported on, and as soon as a further report on unemployment is received I will legislate on such lines as will enable workers to be insured against this most deadly cause of anxiety and unrest.

With fine words and alluring promises of that nature the Prime Minister sought the votes of the electors of Australia. Believing that those promises would be fulfilled, the electors of Australia voted for a return to. power of the Government led . by the Prime Minister. But what has been done to give effect to those promises ? In particular, what has the Government done to introduce a scheme of insurance against unemployment? It is true that a commission was appointed, and that already it has submitted two or three reports. I claim, however, that if the Prime Minister had been sincere in his desire to introduce such a scheme, he could have done so without appointing a royal commission. There was already sufficient information available to enable a scheme of national insurance to be introduced. Even now, long after the royal commission has ceased its labours, we appear to be as far as ever from the fulfilment of that promise.

There is no need to stress the importance of a scheme of national insurance. The distress and suffering caused by unemployment may be compared with that caused by war or pestilence. As it is the duty of every nation to protect the health of its people, as was done in Australia during the outbreak of bubonic influenza, so it is its duty to provide against unemployment. The resources of the State should be employed to prevent unemployment and its consequent loss to the community. We frequently hear the workers of Australia blamed for causing industrial trouble - we have heard it in this chamber to-day - but the Prime Minister spoke truly when he said that one of the main causes of industrial unrest was the uncertainty in the minds of the workers regarding the welfare of themselves and their families in the event of unemployment or sickness overtaking them. The Prime Minister himself stated on the hustings in 1925 that one of the main reasons for it was the ever present dread of the privation and suffering that follow in the wake of unemployment. The blame for the unrest that occurs can be laid at the door of this Government; at least it cannot escape from its share of the responsibility for . it. Despite its realization of the danger to the community in that regard, it has allowed two years of its governmental life to expire without redeeming this pledge given to the people two years ago. A few days ago I asked the Leader of the Government in the Seriate if the Ministry intended to introduce legislation to provide for national insurance against unemployment, and the reply that I received was that the policy of the Government would be announced in due course. But that policy was announced two years ago, and has not yet been put into operation. The only thing that the Government has done in the past two years to give effect to its policy has been to pass an amendment of the Crimes Act. It was stated at the election that there were people in our midst who were a menace to the community; but the persons named on that occasion are still here. The revolution that was prophesied has not occurred, and nobody has heard anything since of the “ Bed “ menace. To save its face the Government amended the Crimes Act, but the measure is a dead letter, and if it were put into operation to-morrow it is possible the High Court would declare it to be unconstitutional.

While ‘ the Government has not carried out its promise to give effect .to.’ a scheme of national insurance against unemployment, it has rendered assistance to an indiscriminate system of migration, which is swelling the ranks of the unemployed and intensifying the labour problem. The Government is attracting to this country persons who do not settle on the land, but enter into active competition with Australian citizens who are already unemployed. I referred to one phase of the evil a few days ago - the great influx of Southern Europeans. I do not know whether the Government intends to reserve the subject of national insurance for another election cry. That lure was held prominently before the people in 1925, and it will not be long before Australia will be in the throes of another federal election. Perhaps the Government will hold the matter over until the eve of the election, trusting to the forgetfulness of the people, and will put it forward as something new.

The subject of war reparations -is worthy of a few moments’ consideration. When hostilities ceased, and the peace terms were arranged, we were informed that Germany would be required to pay certain sums to the, .allied nations by way of reparation. Great Britain was to receive, under the Dawes Treaty, a certain sum, of which Australia was to have a share. A few days ago I asked the Leader of the Government what amount Australia was supposed to get, and the reply was “ It is not possible to make a reliable forecast of what Australia will receive in future.” I call attention to the fact that I did not ask what sum Australia might receive in future; I distinctly inquired as to the total sum Australia, was entitled to receive. I was told that up to the present time the payments to the Commonwealth had amounted to- £2,090,098. Perhaps the Leader of the Senate will inform us whether that sum was paid into the consolidated revenue,, or whether it was used to reduce the war debt. I should also like to know if we have so far received our proper proportion of the reparation money. The Minister might also tell us how much New Zealand and Canada have been paid, and the total sum those two dominions are supposed to get. We should then be able to compare the position of the three great, dominions.

A discussion has occurred during this session on the subject of the sale of the Australian Commonwealth Line of Steamers. I understand that the Government intends to dispose of the Line without giving the Parliament an opportunity to discuss the conditions of sale. I notice by the press that inquiries are being made by Lord Inchcape and Lord Kylsant, who control 42 and 37 lines of steamers respectively. I believe that those two great shipping magnates have inquired from the Prime Minister about the sale of the Commonwealth Line, and that he has replied that public tenders will be invited. -He and his Government have gone further than that, and now saythat this Parliament will not be consulted before the sale is effected. Last week the Prime Minister stated in another place that the Government had decided to call for tenders as soon as possible. When it was proposed to place the Line under the control of a board, this Parliament was consulted on the matter,, and was given an opportunity of agreeing or objecting to the constitution of the board. I contend that just as we wereasked for our opinion on that matter,, we should also be consulted before the final disposal of the vessels. The Leader of the Senate made a definite statement in this chamber that Parliament would have another chance to discuss the sale of the ships, and when confronted with that statement, he said that he thought that the opportunity would be provided when the bill for the repeal of the act which brought the Shipping Board into existence was under consideration. “Whether that is so or not, we cannot escape from the fact that the Prime Minister, prior to the discussion in. this Parliament on the sale of the Line, had already committed himself to the statement that, before the ships were sold, Parliament would be consulted. Are we enjoying a true constitutional system of government, when the representatives of the people are denied a voice in the completion of such an important transaction as the sale of this Line? It was said by the honorable member for “Warringah (Mr. Parkhill), in the other branch of the legislature, that Parliament is not the place to discuss important matters, and that they should be dealt with in the party room. That may be his view; but if honorable gentlemen on the other side are to receive all the information on matters of this nature, and are to be consulted in their party “room, before the ships are disposed of, what of the rights of the Opposition? Although we are small in numbers, we represent almost half of the people of Australia. Therefore, Ave claim as a right, and not as a privilege,’ that this great State instrumentality, which has done good work for Australia, should not be, disposed of until this Parliament, and the people of this country, know the conditions of sale. The Prime Minister did not get authority to sell the ships, although the right honorable gentleman spoke of the famous mandate which he says he received from the people in November, 1925. As a matter of fact, Government supporters during the election campaign spoke most enlogistically about the value of the fleet, and clearly gave the people to understand that, if returned to power, they would advocate the retention, if not the extension, of the Australian Commonwealth’ Shipping Line in the interests of the primary producers. The Govern ment’s proposal now to sell the ships is a betrayal of that pledge. Parliament should have another opportunity to discuss the proposal before the ships are disposed of. Let me refresh the memory of honorable senators concerning certain cable messages that passed between the Shipping Board and its chairman in London. One message asked if the Government would give favourable consideration to an offer, and the Prime Minister’s reply stated that before any decision’ was arrived at Parliament would be consulted. If it was necessary then for Parliament to be consulted, it is necessary now. The statement made the other day by the right honorable the Leader of the Senate (Senator Pearce) that this chamber would have another opportunity to discuss the sale of the Line, certainly influenced a number of votes on a motion then before the Senate.

Before I resume my seat I may, perhaps, be permitted to mention briefly another matter upon which we have had some discussion this afternoon. The Conciliation and Arbitration ‘Act, in its amended form, is not calculated, to prevent industrial unrest. In th-3 first place the path to the court is neither as easy nor as clear as it should be, and the delay in hearing claims makes the task of industrial leaders particularly difficult. They find it almost impossible sometimes to restrain members of their unions from taking direct action.. Further, I submit that the spirit of the amending Conciliation and Arbitration Act has not been put into operation. It would have been much better if, instead of additional judges the Government had appointed more conciliation commissioners. A few months ago the personnel of the Arbitration Court bench was increased by the appointment of another judge and the first conciliation commissioner. If we had more conciliation commissioners to assist Mr. Stewart, we should have less industrial unrest throughout Australia. Though reference to the appointment of ex-Senator DrakeBrockman to the Arbitration Court bench may be somewhat belated, I feel it incumbent on me to say ‘now that ‘ the appointment was ill-advised, because the appointee was not qualified for the position. Certainly his presence on the bench does not inspire the confidence of those workers who are obliged to approach the court for redress of grievances. ExSenator Drake-Brockman was a known industrial partizan. On every occasion in debate his voice was raised against the case stated for the workers. He is a past president of the Employers’ Federation, an ex-Government Whip, and a year or two ago was the Government’s emissary to another part of the world.

Senator Grant:

– His appointment to the Arbitration Court bench was a purely political one.

Senator NEEDHAM:

– The honorable senator is right. It might have been different if the appointment had been to the High Court bench rather than to the Arbitration Court. It is deplorable that one who displayed so much partisanship in industrial matters should now hold in* his hands the industrial destinies of citizens of the Commonwealth. The right honorable the Leader of the Senate, will say, probably, that other governments have made similar appointments. I know of none so glaring as that of exSenator Drake-Brockman to the Arbitration Court bench. He had no great legal qualifications, and, so far as we know, he was a briefless barrister. 4But I am not so much concerned about that, as I am about his undoubted partisanship in all industrial matters. The appointment has not helped the cause of conciliation and arbitration.

Senator CHAPMAN:
South Australia

– The Leader of the Opposition (Senator Needham) protested in hU opening remarks because the Government would not allow a duplication of the debate upon the financial position of the Commonwealth in the discussion of this bill, and yet he trotted out the same old subjects - the Government’s election pledges, the sale of the Shipping Line, and the appointment of ex-Senator DrakeBrockman to. the Arbitration Court bench. He also charged the Government with reckless extravagance

Senator Needham:

– The charge is true*

Senator CHAPMAN:

– If we analyze the figures contained in the budget papers, we find that there is no justification at all for such an allegation. The statement was made so often and so loudly here and in another place that even the public began to believe that there might be something in it, and when the right honorable member for North Sydney (Mr. Hughes) secured the adjournment of the debate last week, there was a general impression that th«. Government, and in particular the Trea-surer, would be soundly trounced. We all give Mr. Hughes credit for what he did as Prime Minister during the war. For several years he occupied with credit a very high and honorable position. But the whirligig of time brought its changes, and the right honorable gentleman had to give way to another, who is now the Leader of the Government. In the circumstances it is natural that he should not be quite so enthusiastic about the present Government’s administration as he was about his own. It was fully expected that when he spoke on the budget last week, he would throw a bombshell into the ranks of the Government’s supporters ; but his effort proved not a bombshell but a squib. The Leader of the Opposition (Senator Needham) has charged this Government with recklessly squandering the public revenue.

Senator Needham:

– So it has.

Senator CHAPMAN:

– The honorable senator’s statement is not borne out by an examination of the figures. He said that in 1921-22 the gross debt of the Commonwealth was £416,000,000, compared with £461,000,000 in i927, and by that statement he wished the people to believe that the finances of the country had been handled recklessly. He did not explain that the last mentioned figures included loans to the States and other sums repayable in cash to the Treasury. It is most unfair for the honorable senator to include the” money loaned to the States, mostly for developmental purposes, and to suggest that the present Government has recklessly squandered it. In order that the position cannot be misrepresented I propose, .to compare the figures for the year 1921-22 with those for the year 1926-27. The position on the 30th June, 1922, was as follows : -

The position on the 30th June, 1927, was as follows : -

Deducting loans to the States and other sums repayable in cash to the Treasurer the net debt of the Commonwealth was £339,002,105 on the 30th June, 1922; and £340,978,952 on the 30th June, 1927. During that same five-year period the population increased by 600,000. The increase from £416,000,000 to £461,000,000 quoted by Senator Needham is represented by increase of loans to the States, &c, and it cannot be said that this money has been ‘recklessly squandered. During the five years our national debt increased by £2,000,000, and the war debt was reduced by £36,000,000. It must be remembered that there are no assets to show for that war debt. Although in five years we increased other debts by £38,000,000, a net increase of £2,000,000, we have assets to show for it in the form of reproductive public works. Our assets have actually increased in the five years by £38,000,000, and our population by 600,000. Senator Needham says that, that is a bad financial position, but f regard it as a good financial position.

While the net’ public debt of the Commonwealth has thus increased by £2,000,000 in five years, we find that the debts of States under the control of Labour have steadily increased during the same period. On the 30th June, 1921, the debt of New South Wales was £175,000,000. In 1922 it was £190,000,000; in 1923, £147,000,000; in 1924, £224,000,000; in 1925, £215,000,000; and in 1926 to £223,000,000. During the same period the debt of Queensland mounted from £79,000,000 to £102,000,000, and that of South Australia from £54,000,000 to £81,000,000. In New South Wales and Queensland, and, for part of the period, in South Australia, Labour governments were in power during the period covered1 by these figures. If Senator Needham regards the record of the Commonwealth Government as wasteful and extravagant, how can he describe the loan expenditure of the State Governments I have mentioned? °

Senator Needham:

– The Western Australian Labour Government has >just had a surplus, which is the first that the State has had for many years. . r ,

Senator Sir George Pearce:

– ^-Thanks to the Commonwealth grant.

Senator Payne:

– Tasmania had a surplus last year.

Senator Sir George PEARCE:

– Thanks also to the Commonwealth grant.

Senator CHAPMAN:

– The financial position of the Commonwealth does not cause me as much concern as does its complicated and chaotic industrial position - a matter that affects governmental finance more than anything else.

The budget papers contain some very interesting information showing the value of Australia’s exports, and it is well to compare the figures for 1915-16 with those for 1925-26, covering a period of ten years. The comparison is as follows : -

The produce of mines and quarries covers coal, £508,446 in 1915-16, and £881,679 in 1925-26; copper, £3,590,433 and £293,836: gold bullion, ore, and concentrates, £1,064,245 and £350,001; gold specie, £8,938,742 and £3,969,122; lead, £3,194,206 and £4,524,142; precious stones, £27,166 and £116,432; silver, £789,395 and £1,825,517 ; zinc, £1,479,495 and £2,569,596; and tin, £835,451 and £486,562. There-has been a considerable reduction in our mining exports, which, I think, is largely due to the increased cost of production and not to the fact that the mines are being worked out or becoming too deep to work. The comparison covers also -

Under the heading of “ products of manufacture;” we have -

Apparel and textiles, boots and shoes, biscuits, confectionery drugs and chemicals, glass and glassware, glycerine and lanoline (unrefined, implements and machinery leather, manufactures of metals, manures, oils (bottled and bulk), soap, tobacco, and all other articles.

Although the exports of our primary products have increased to a very considerable extent during the ten years, the exports of our manufactured goods have scarcely increased. This, I think, is mostly due to our increased cost of production.

I am glad to see that at last the Tariff Board has come to the conclusion that high customs duties increase the cost of production. “We have a sad spectacle in Australia. First of all, arbitration courts increase wages, and then the manufacturers approach the Tariff Board and ask for increased duties on account of the increased cost of production. - In its last report the Tariff Board says -

In so far as recent increases in customs revenue have been due to the collection of higher duties imposed with the object of discouraging the importation of the appliances or - commodities on which such duties were imposed, the increased amount, collected represented in the case of goods used in manufacture an addition to tile cost of production which in- directly increased the cost of living; and, to the extent that any such increased revenue was due to the imposition of duty on commodities imported in the form in which they are consumed it represented a direct increase in the cost of living.

Although the Tariff Board has sounded this warning, the Government has just brought down another schedule of increased duties which will tend to further increase the cost of living. Until we call a halt in the imposition of high customs duties, we shall have no halt in the rate at which the cost of living is increasing. The Tariff Board refers also to the abuse of protection and says that it is compelled to place on record this conclusion -

The board regrets being compelled to place on record its conclusions, arrived at after the most intimate touch with all phases of industry within the Commonwealth, that there is a prevailing tendency which is calculated to abuse the protective system and by forcing the pace under disadvantageous conditions to .actually endanger the efficacy of the system. This tendency is not confined to one section alone, but is common to the industrial unions, the secondary producers and the primary producers of the Commonwealth. It is proposed to deal later with each group separately and to justify this far-reaching assertion. The board is profoundly convinced that if Australian industry is to be maintained and safeguarded, it is absolutely essential that the leaders of industrial unions should recognize this serious menace of rising costs of production which the board has indicated. The board wishes it to be understood that it is not desirous of taking any side in the industrial disputes within the Commonwealth, but it cannot be blind to the fact that simultaneously with the board being asked to consider large increases in duties on such important industries as timber, engineering, iron and steel, brushware,- copper (bonus), butter and cheese, glassware, clothing and textiles, with the object of enabling such industries to exist, applications had been lodged and Arbitration Courts - Federal and State - had been and were being asked to grant not only increased wages, but further improved conditions and shorter hours, and State Governments were introducing legislation at the time, which further added to the already high cost of production.

Instances are given in the report in which the manufacturers admit that wages and conditions overseas are the same as they were three or four years ago, and that notwithstanding the fact that the duties which they desired on certain commodities have been imposed the cost of production in Australia has increased to such an extent that they have been compelled again to approach the’ board for further protection. In the absence of additional protection they maintain that they will be unable to hold their own in competition with overseas manufacturers. If this condition of affairs continues - if this increase in the cost of production goes on - our industries will come down with a crash. Even exporters of primary produce will be unable to compete in the markets of the world. The matter requires the immediate and earnest consideration of the Government.

I now wish to refer to the conditions in the Mandated Territory of New Guinea, which some members of this Parliament visited a few months ago at the invitation of the Government. I am pleased that the Minister for Home and Territories (Mr. Marr) was able to visit New Guinea to obtain first hand information. I am sure that the members of the Parliamentary party which” visited the Mandated Territory will agree that it is impossible for one to understand the conditions obtained there in the absence of first-hand knowledge. The problems confronting the administration are numerous and complex, and are even greater than those with which the Government has to deal here. Other nations are closely watching the administration of the territory which the Commonwealth is controlling under a mandate and even whilst we were there cablegrams were coming from other countries asking for information to be used before the Assembly of the League of Nations. There are many problems confronting the Government in this connexion which have not yet been considered, but some of which I believe are now receiving attention. There are one or two phases upon which I feel very strongly and in regard to which I wish to place some information before the Government. Honorable senators are aware that the local residents in the Mandated Territory, many of whom are Australian ex-soldiers, have no voice whatever in the government of the country, which at present is under the control of an Advisory Council consisting of the Administrator and the Government Secretary, the Treasurer, the Commissioner of Native Affairs, the Director of Public Health, and the Director of Agriculture. Practically all of the expropriated properties have now been disposed of. many to returned soldiers, and

I believe the Government intends to gram some form of local government.. Such action, which will have my hearty support, should be taken at the earliest possible date. The native population of the Mandated Territory at 30th June, 1925, was estimated at 350,000 in addition to J, SOO Chinese. I understand that a further influx of Chinese has been prohibited; but owing to the prolific birthrate their numbers are increasing very rapidly. A portion of Rabaul is known as “ Chinatown,” where the Chinese population is thriving and where no European is allowed to conduct any business. In Chinatown is a very fine Chinese club the headquarters of the Kuo Ming Tang, or the Chinese Nationalist party. There are also two hotels in Chinatown conducted by Chinese, and as at times there is insufficient accommodation in the European Hotel, which is outside Chinatown, European visitors are compelled to stay at these hotels. Honorable senators will realize that the Chinese proprietor cannot exercise proper control over an Undesirable class of white men, and there have been unpleasant incidents for which white men have benn responsible. Moreover, the Chinese in Chinatown have an absolute monopoly over the laundries, tailoring, baking and other trades. The native market, where a good deal of trade is done, and where the native boys congregate, is also situated in Chinatown. Some time ago I submitted certain questions to the Minister which I shall quote, together with the answers. They were : -

  1. Are Europeans debarred from trading within Chinatown, Rabaul?
  2. How many trading licences, were issued last year to Chinese to trade in Rain ill?
  3. How many Chinese traders were there in Rabaul at the end of the German regime?
  4. Were these Chinese traders licensed by the Germans?

The answers were -

  1. Yes.
  2. Sixty-three.
  3. The Administrator advises that no re cord is available of licences issued in respect of Chinatown during the German regime.

Honorable senators will sec thai Europeans are debarred from tracing in Chinatown. If “the white residents do not obtain their supplies from the .stores conducted by Carpenter and- Company or Burns, Philp and Company, they are compelled to trade with the Chinese, -who in certain classes of business have a complete monopoly. I understand the Germans brought out large numbers of Chinese coolies, placed them in a compound in Chinatown, and granted them a few trading licenses. I also understand that under the military administration which followed the German regime, further trading licences were granted, with the result that the Chinese have now an absolute monopoly of the trade.

Senator Payne:

– A perso. -wishing to erect a store in Rabaul could build outside Chinatown.

Senator CHAPMAN:

– Yes, but what is the use of putting up a store well away from the chief trading centre? We are giving the Chinese a monopoly. It seems unreasonable that a European should be debarred from purchasing, say, an hotel, or conducting any business in Chinatown. I have placed the position fairly before the Government, and trust that the present undesirable state of affairs will soon be altered. When I was in the mandated territory-. I visited a number of the native missions and schools and saw the writing of some of the native scholars, which was equal to that of European children of the same age. It is, however, a remarkable fact that there is not a Go.vernment school for white children in the territory.

Sitting suspended from 6.15 to 8 p.m.

Senator CHAPMAN:

– The missions have done splendid work in educating the natives, and some assistance from the Government would be justified. White residents at Rabaul are forced to send their children to a convent school because there is no Government school there for white children. In other portions of the Territory, outside Rabaul, public servants and planters are in an even worse condition. In order to educate their children they are practically forced to send them to Australia. That means an expenditure of at least £ 100 per annum for each child. The public servants I met in the Mandated Territory are a fine class, and, I believe, are very much underpaid. They claim that “they are the lowest paid public servants in any tropical territory. In the interests of their health white people living in New Guinea must have an occasional holiday in other climates. The regulations under which they work provide for three months’ leave every two years, but as the fares to and from Australia for a man, his wife and two children cost about £78, in addition to which there would be expenses in Australia, honorable senators will see that the slender incomes of public servants will not permit many of them to leave the Territory. Living expenses are high. Since the Expropriation Board closed its stores the price of commodities has increased by 10 per cent. Petrol costs 3s. a gallon. I trust that the claims of these men will receive the early consideration of the Government.

The opinion is expressed in the Mandated Territory that “ dummying” is practised in connexion with plantations. Returned soldiers have been granted big concessions in respect of their holdings. For advances obtained from the Government they pay interest at 5 per cent., as against 6-J per cent, charged to civilians. Moreover, a deposit of 15 per cent, of the price of their holdings is accepted from them, whereas civilians and private firms are required to make a deposit of 30 per cent. For the repayment of the balance of the purchase money returned soldiers are granted a period of twenty years, as against ten years allowed to civilians. The returned soldiers say that they have no objection to firms being allotted plantations on terms applicable to civilians,, but that they object to their obtaining benefits meant only for returned soldiers. On the other hand, it is urged that these firms are financing soldiers who have not sufficient money of their own, and that by so doing they are assisting the soldiers in a practical way. Recently I asked the Minister representing the Minister for Home and Territories the following questions : -

  1. Were the plantations Ulaveo, Wangaramut, Neinduk, Maulapao, Kuradui, Raniolo Kul Kul, Marangis, Kavilo, Dogumor, Bogadjim, Siar, Potsdamhafen, Katu, Fissoa, Fileba, Kolube, Koka Komalu, Ungan, in New Guinea, taken over by the original allottee?
  2. Are they being worked by the original allottee, and lias “the allottee ever been on them ?
  3. Were they all taken over by, one, firm on behalf of the original allottee. If not, how many were taken over by one firm?
  4. Are they all being worked by one firm? If not, how many are being so worked?
  5. What ordinances or regulations have been passed with a view to the prevention of dummying and the prevention of the properties falling into the hands of firms financing the soldiers ?
  6. Has the Government any control over agreements between the soldier and those financing him ?

I received the following replies : -

  1. The plantations named were taken over by the attorney for the purchasers.
  2. The plantations are being worked on behalf of the respective purchasers. The Minister is not in a position to state whether the allottee in each case has ever been on his plantation.
  3. The plantations wore taken over, and are being maintained by one company as attorney for, and in the interests of, the respective purchasers.
  4. See answer to question 3.
  5. The Treaty of Peace Regulations numbered60 and61 have been promulgated with a view to the prevention of dummying. So long as any of the purchase money or interest is outstanding, the Treaty of Peace Regulations prevent the properties falling into the hands of the companies, firms or persons financing the soldiers. When the contract price and interest arc paid in full, the transfer is controlled by the Transfer of Land Control Ordinances, 1924.
  6. Until the whole of the purchase money on the property is paid all right, title and interest in the property remain vested in the Custodian of Expropriated Property, and no assignment, or transfer of, or charge on, the purchaser’s rights under the contract of sale may be made without the Custodian’s consent. Otherwise, the Government has no control over agreements between the Australian soldiers and the companies, firms or persons financing them.

It is intended that after the instalments have been paid “dummying” shall he prevented by section 4 of Transfer of Land Ordinance No. 17 of 1924, which provides -

  1. Notwithstanding anything contained in any law in force in the Territory, no person shall, without the approval in writing of the Administrator -

    1. transfer or enter into any contract or agreement for the transfer of any land;
    2. give a mortgage of any land; or
    3. grant a lease of, or an casement, right, power or privilege over, in, or in connexion with any land.
  2. Any transfer, contract, agreement, mortgage, lease, casement, right, power or privilege, made, entered into or granted in contravention of this section shall be void and of no effect.

The transfer must be approved by the Minister. I desire to direct attention also to section 2 of Ordinance No. 33 of 1924, which reads -

Section 4 of the principal ordinance is amended by adding the following sub-section at the end thereof : -

Notwithstanding anything contained in this section an offence shall not be deemed to have been committed against this section in any case where a person enters into a contract or agreement for the carrying out of any of the transactions mentioned in paragraphs a, 6, or c, of sub-section 1 of this section if the contract or agreement -

is expressed to be subject to the Administrator; and

provides that, unless and until that approval is given, the contract or agreement shall have no force or effect.

Although there is a good deal of control over these properties, I am afraid that a clever lawyer would be able to find a means of evading the terms of the ordinance.

Senator Sir George Pearce:

– Surely the honorable senator would not prevent a man from selling his plantation?

Senator CHAPMAN:

– No ; but I should prevent all the plantations from falling into the hands of one firm. A firm which is managing a plantation might run up costs against the owner which would place it in a better position than its competitors in the event of the owner desiring to sell the property. These costs, as it were, would be used to buy the property. I do not think that the Government desires that all these plantations shall eventually fall into the hands of one firm, or that it favours “ dummying.” It, however, must know that “dummying” has taken place in other instances. There is grave danger of further “dummying “ when one firm has taken over so many plantations on behalf of the allottees and is working them on their behalf.

The only other matter that I wish to touch upon is the labour difficulty, and that is probably the greatest problem in the whole of the mandated territory. In the Melanesian Islands, the advent of the white man practically threatened the extinction of the native race. New diseases were introduced, and the reports of the medical officer in New Guinea show that lung and chest diseases account for no fewer than -47 per cent, of the deaths. Dr.Cilento pointed out that 24 per cent. of the deaths were due to pneumonia, 23 per cent, to tubercolosis, and 24 per cent. to dysentry. These diseases have been accelerated by the advent of white people. It was noticed in the early days that, after the arrival of a vessel from overseas, there was a considerable increase in diseases among the natives because of contact with whites. Tuberculosis is not a natural complaint with the natives.

Senator Cox:

– I thought that it was due to their wearing more clothes than, they had been accustomed to wear.

Senator CHAPMAN:

Dr. Cilento states that the working natives should wear a certain quantity of clothing for the sake of their health. The problem is an intricate one, and I believe that the administration is doing all that it can to raise the native population to the higher plane of civilization. Our rule in New Guinea is being closely watched by the League of Nations, which probably knows more about the conditions there than do the people of Australia. In the early days the occupation of the men was solely to engage in warfare, practically the whole of the work being done by the women.. Those conditions obtained for many centuries, and it is naturally very difficult to induce the natives to work, although labour is their only salvation. It has been said by some persons that we are hard on the natives, because we allow them to be recruited for the plantations. I have heard it remarked that the recruiter goes to the islands with a gun and compels the natives to .work whether they want to or not. Having made careful inquiries in New Guinea, I can say without hesitation that that is a misleading and unfair statement. No such methods are adopted. I saw new recruits working on the ships in Rabaul. At first they staggered under the weight of a bag of copra 20 lb. or 30 lb. lighter than a bag of wheat, and several of them collapsed under the load. After six or twelve months training, however, assisted by decent food and fair treatment by their white employers, they are to be seen running and laughing while carrying the same weight of copra. I am satisfied that we are doing a great deal to uplift them, and, although it is difficult to get native labour at the present time, the recruiting is done in a reasonablemanner. Only the “boys,” as the native men are called, are recruited.

From 90 to 150 are employed on one plantation, and there are no women among them. This is leading to a very undesirable state of affairs and to depraved practices. Owing to the present trend of public opinion, it is impossible to recruit both men and women; but, in my opinion, it is highly undesirable that the native “ boys “ should be kept away from their wives for a number of years. The Government must tackle this difficult problem. The position was graphically described recently in the Sydney Sun in a special article headed “ Gods of New Guinea,” and in the same journal of the 2nd November last a long article appeared under the heading ‘ Awful Depravity,” in which it was stated -

Extraordinary disclosures of the revolting depravity and disease among the natives of former German New Guinea are contained in a report presented to the Minister for Home and Territories (Mr. Marr) by missionaries who attended the conference held recently in Rabaul.

We cannot immediately alter the present conditions, but we are doing our best to uplift the natives. Any action that the Government can take to improve the present state of affairs should be adopted. The recruiting of the boys without their wives is tending to assist the conduct of which complaint is made. The medical officer and the commissioner of native affairs both recommend that the women should be recruited with the natives. No doubt many people in Australia would protest against that, and I, myself, might have done so, had I not recently inquired into the conditions on the spot. The natives should be provided with married quarters, so that they could live normal lives. The women should not be forced to work on the plantations; but they should be permitted to accept employment. They should be given small ‘ plots of land to cultivate, and should be helped in every way, otherwise the evil existing to-day will increase. It is forcibly dealt with in the report of the -Missionary Society. It is hard for the Government to realize exactly how serious the conditions are, and I am pleased that the Minister for Home and Territories has visited New Guinea, and obtained first-hand information. I believe that he is moving along right lines in the direction of reform among the natives. If action is not taken immediately Australia will be called to account at the bar of the League of Nations.

Senator GRANT:
New South Wales

– The time is opportune to place upon record a few facts that are likely to be overlooked. I invite the attention of the Senate to the very unfair manner in which taxes ure extracted from the people, and to the heavy amount of taxation that has to be borne by the poorer section of the community. I realize, of course, that my remarks will, to a great extent, fall upon deaf ears, because the present Government represents the wealthy section of the people. I propose to remind the Senate of what is regarded by all economists worthy of the name as the proper basis of taxation. Ever since the establishment of federation we have adopted a so-called protective policy, but it does not protect the primary or secondary industries of the Commonwealth. This system of raising the national revenue permits those best able to bear the burden of taxation to escape with the payment of a nominal sum. To this I attribute much of the present turmoil, unrest and unemployment throughout the Commonwealth. It should be the aim of honorable senators to devise a system of taxation that will relieve unemployment and place the burden upon the shoulders of those best able to bear it. It is universally admitted that customs taxation falls with special severity upon the poorer section of the community. No doubt this is why it has been so warmly supported throughout the ages in almost all countries. While Great Britain is ostensibly a freetrade country, actually it resembles, in some respects, the Commonwealth in that it obtains the bulk of its revenue from customs and excise duties and income taxation. Therefore, it may be regarded as a high revenue tariff country.

It has been truly said that while a government may tax a man indirectly to almost any limit, it has the greatest difficulty in extracting from him taxation in a direct form. Hence the popularity of the indirect method for the raising of revenue in all civilized countries. I repeat that, in my opinion, much of the turmoil, unrest, and unemployment throughout the world may be removed by a change in the system of taxation. In Great Britain to-day there are no fewer than 1,500,000 able-bodied men and women out of work. To support them a heavy direct tax. is levied upon all sections of the community. The total income of Great Britain for the financial year ended 31st March last, was £S05,701,233 ls. lOd. One would imagine that the well-to-do people of the Mother Country would contribute substantially towards the revenue, but we find that the bulk of the national income is received from customs and excise, and income taxation, the figures being - Customs duties, £107,515,000 ; excise duties, «- £132,978,000; income taxation, £234,717,000; super tax, £65,910,000. From customs and excise, the total receipts were £240,493,000, and yet some ill-informed people in this country endeavour to persuade their fel-low citizens that Great Britain is a freetrade country ! That, of course, is not so. Great Britain is a. high revenue tariff country.

Income taxation, another important source of Great Britain’s revenue is, in my judgment, a direct incentive to a “ go-slow “ policy. It is a tax upon industry, and one of its effects’ must be to drive capital out of a country. Excise and customs duties, income taxation, and the super tax are all a handicap upon industry, and are levied upon those least able to bear the burden. A totally different position is disclosed when we examine the taxation imposed upon the owners of land in the Mother Country. I have not been able to ascertain the total value of the lands in Great Britain, but since it is probably the most densely populated country in Europe, with about 700 people to the square mile, the lands must be extremely valuable.- The total revenue derived from land taxation in Great Britain last year was only £S80,000, the figures being, house duties, £5,000 - I question whether that item can be regarded as a land impost - land tax, £650,000; duties on land values, £225,000. The total of receipts from this source is extremely paltry in comparison with the amount received from customs and excise and income taxation. The position should be reversed. If the bulk of the revenue in Great Britain were raised from the land, there would be little or no unemployment there. On the contrary, Great Britain would enjoy a degree of prosperity to which she has been a stranger for many a long day. Under existing taxation systems, the present unsatisfactory state of affairs is inevitable. I have referred to Great Britain because, rightly or wrongly - I think wrongly very often - the Commonwealth Government follows Britain’s lead in regard to its method of raising revenue. Australia is supposed to be a protectionist country, but the existing scale of duties does not exclude foreign-made goods. Actually it produces an ever- increasing source of revenue.

It is patent to the meanest intelligence that unemployment is in direct ratio to the importation of foreign goods. No matter what may be said in favour of encouraging local industry, so long as we continue the present policy of borrowing money abroad, so long may we expect the inflow of foreign-made goods into the Commonwealth. I should welcome ti -.complete cessation of borrowing abroad with a view to fulfilling all our requirements in Australia. But that is about the last thing which the present occupants of the treasury bench -will- be willing to consider. No one will deny that customs taxation offers the easiest way to compel the poorest sections of the community to pay the highest amount of taxation. I congratulate the Minister for Trade and Customs (Mr. Pratten) upon the very able way in which he manages to remove taxation from his wealthy friends, and increase the taxation paid by the poorest sections of the community. I take it that was one of the purposes for which he was elected to represent Martin. He is doing his work in a most faithful manner. He has succeeded most admirably in securing exemption from taxation for the wealthy people, and in putting as much taxation as possible on the poor. How much longer that will continue I do not know. We have in all the States an increasing army of unemployed able and willim; workers. Our policy of protection, whatever else it may do, has certainly not removed that phenomenon. Notwithstanding all that has been said about encouraging local production and - all that sort of thing the amount of revenue we derive from taxation upon foreign made goods entering Australia has been steadily increasing year after year. It is true, of course, that the increase has hot been quite regular. But the figures for the respective years are as follow: -

The estimate for the current year is £44,000,000, but from experience we may safely conclude that the amount will be considerably exceeded. How long are we to be told that this is a policy to protect our secondary industries when all the time apparently the main object is to protect certain people from taxation? When the customs and excise duties produce £4.3,000,000 in one year it must be quite apparent that it is not necessary to increase taxation in other directions. It. is therefore natural to find a strong desire on the part of some honorable members not only to increase customs taxation, but also to simultaneously decrease income taxation, and I believe, also land taxation. I shall not very much regret a reduction in the income tax, although I think it would b, far better to have a reduction in customs taxation; but I hope that the Government will seriously consider what it is doing before it reduces land values taxation, which is, of course, the best method that can be devised for raising revenue for Federal, State, or local government purposes. It has the outstanding characteristic that it falls directly on the owners of land and cannot be passed on. The owners of land must pay, and for that reason the present occupants of the treasury bench who represent the wealthy section of the community do not look upon it with a favorable eye. They pin their faith to customs excise and other indirect methods of taxation, and armed as they are with a substantial majority I suppose we may expect them to force their views on tha Parliament of this country. Once a protective or a high revenue policy is established, it is almost impossible to remove it. I realize that it is hard to increase direct taxation, especially land values taxation, but it is an easy matter for a government with a big majority to do as it likes. I. expect the present Government to collect more and more revenue at the Customs House, and less and less by means of income taxation or land, values taxation.

I shall have a. further opportunity of speaking on both these points at a later date, and I do not propose to pursue them, further at the present time ; but taxation is a question of the very first importance, and the study of ii- would amply repay all legislators. It ls some time since I placed on record what I regard and what is regarded by all political economists as the correct principle of taxation, and I desire to place them on record again so that in the discussion of these matters honorable senates, may perhaps remember them at a later date, and possibly give effect to them. They are to be found on page 406 of the memorial edition of the writings of Henry George, Progress and Poverty, Vol. II., and are as follow’: -

The ‘best tax by which public revenues can be raised is evidently that which will closest conform to the following conditions: -

That it bear as lightly as possible upon production - so as least to check the increase of the general fund from which taxes must be paid and the community maintained.

That it be easily and cheaply collected, and fall as directly as may be upon the ultimate payers - so as to take from the people as little as possible in addition to what it yields the Government.

That it 1)0 certain - so as to give the least opportunity for tyranny or corruption on the part of officials, and the least temptation to law-breaking and evasion on the part of taxpayers.

That it bear equally - so as to give no citizen an advantage or put any at a disadvantage, as compared with others.

Let us consider what form of taxation best accords with these conditions. Whatever it bc, that evidently will be the best mode in which public revenue can be raised.

Elaborating ‘these canons of taxation, Henry George sets out beyond contradiction that a tax which complies with these requirements is a straight-out tax upon land values, without graduation or exemption. That is the method of taxation employed in local governing districts of New South Wales. -It is responsible for the wonderful progress how being made by the city of Sydney. It lias been stated that the Commonwealth land tax was imposed for the purpose of bursting up large estates and for other reasons, but in my opinion it was imposed for revenue purposes. Practically speaking it has produced the same amount of revenue every year. It is a great pity that an exemption up to £5,000 is allowed, but it would be regarded as heresy on my part to proceed on those lines and I shall not do so. We are indebted to the Brisbane Labour conference for the land tax with that exemption. I think that Senator Lynch was one of those who persisted in including the exemption in the Labour platform. Others were Mr. J. C. Watson and Mr. W. A. Holman. A considerable number of those responsible for its inclusion in our platform are not in the Labour movement to-day, but that is a matter of detail. It is the policy of the party to have that exemption in the federal land tax. Some persons say that provision was made for an exemption of £5,000 in order that the States might also have an opportunity to impose a land values tax:…but that is so much humbug, because the States have complete power to impose such taxation either above or below the exemption I have mentioned. Some have: exercised that right, although in the eastern or central divisions of New South Wales such a tax is not imposed for revenue purposes. It only applies to a few freeholds in the western division. As the New South Wales Government collected from the whole of the land-holders of New South Wales last year the nominal sum of £3,500, is it any wonder there is an increasing number of unemployed? I recently heard of a person who some years ago invested the nominal sum of £25 in the purchase of a block of land in Sydney, and later had the misfortune to be imprisoned for a number of years. When he was released the land for which he paid £25 was worth, approximately, £200,000. That is a clear indication of the fact that the owner who did not do anything to increase its value was able to reap where he had not sown. It cannot be said that land values taxation is a tax upon industry. Many persons are afraid to express an opinion upon this important subject. Such a tax directly affects so many wealthy people.

Senator Lynch:

– Is that why the Labour party does not adopt the system ?

Senator GRANT:

– The Labour party is the only party which has stood rigidly for a land values tax, and the Labour Government in Queensland has imposed more direct land values taxation than any other government in the Commonwealth. Taxation based on land values is imposed in South Australia and Western Australia, and to a lesser degree in Victoria and Tasmania. As it is the community which gives the land its value, the community ought to appr’opriate for its use the. added value. Another illustration came under my notice many years ago in which a man leased a farm from a landowner in Scotland. After he had acquired the lease, he purchased agricultural implements, and for the first time about 200 acres of good undulating country were cultivated, on which highly productive crops were grown. When the lease expired at the end of two or three years, the owner of the land compelled him to pay a substantially increased rate for a further term merely because of his industry.’ As the owner of the land he legally robbed the lessee of his rights. The same thing occurred in Ireland years ago; but the position there became so acute, and the “Irish people so incensed, that the system was dispensed with. My objective can be achieved by the public realizing that ifr should appropriate the value which it gives to land, and if such a system as I suggest were generally’ adopted, the unemployment which is at present disgracing practically the whole of the civilized world, would cease to exist. I shall reserve any further comments I have to make on this subject until a measure relating to land taxation now before another place is submitted to the Senate.

I wish again to direct the attention of the Senate to what I consider the peculiar action of the Pensions, the Repatriation, or the Defence Department, the facts in regard to which are these : - The son of a lady named Mrs. Christina McArthur, of 306 Nelson-street, Annandale, enlisted for service during the Great War. He was named Sinclair McArthur, his number was 8,156, and he was a corporal in the Fourth Battalion. Early in the war he made the supreme sacrifice, leaving a widowed mother. In accordance with column 2 of the first schedule of the

Australian Soldiers Repatriation Act of 1920, Mrs. McArthur was entitled to a war pension of £2 12s. 3d. per fortnight. A pension of £2 was granted to her, but from the 18th August, 1915, the military allowance ceased to be paid. In April, 1926, the case was reviewed, when it was disclosed that Mrs. McArthur was a widowed mother, and the pension was reassessed on the basis of the £2 12s. 3d. instead of £2 as from the date of the original grant. An increase in the rate to £2 12s. 3d. was effected from the 18th August, 1915, and about the 14th of May, 1926, a cheque for £172 3s. Id. was forwarded to the pensioner to cover arrears then due. Following the payment of that cheque into her banking account, which was a very small one, the Deputy Commissioner of Pensions, in view of her changed financial circumstances, promptly reduced her old-age pension, with a result that she lost £11 8s. 9d. It is altogether wrong for a department to deprive an old-age pensioner of that amount because another department failed to pay her the money when it became due. Any department worthy of the name should at once make good the amount. On her behalf and at her request, I applied for a refund, and I was informed by the Deputy Commissioner of Pensions that he had no option but to reduce her pension owing to her altered financial position. 3 may say that the £172 3s. Iddid not last very long, because it had to be used in meeting outstanding accounts. As the Deputy Commissioner of Pensions has refused to pay the £11 8s. 9d. I should like to see an amount in the Estimates to cover it. Persons banking money receive interest at the rate of about 4 per cent., and Mrs. McArthur is entitled to interest at that rate on the money withheld from her by the department.. The sum of 12s. 3d. a fortnight waswithheld from her from the 18th» August, 1915, until the 14th May, 1926,. a period of about eleven years, and I claim that she is entitled to interest on it amounting to £44 15s. 8d. That: amount, together with the £11 8s. 9d.. withheld from her, makes a total of £56 4s. 5d. due to her. I have made repeated’ application for this money, hut not one of the three departments concerned has paid it. It is a disgrace that a woman who- lost her son in the early days of the war should be treated as this woman has been treated. In a few minutes Parliament sometimes agrees to the expenditure of millions of pounds; yet the whole machinery of government is used to prevent a poor widow from reciving that to which she is entitled. I intend to take whatever steps are in my power to. see that this woman obtains justice.

Senator LYNCH (Western Australia) 1.9.17]. - The appearance of the budget early in the financial year is a great convenience, because it enables honorable senators to consider the Government’s, financial proposals before the money has actually been expended. There is very little use in Parliament expressing its opinion about expenditure after it has T)een incurred.

I am afraid this is all the praise I oan afford this budget. This year we are asked to agree to the expenditure of about £63,000,000. That is a large sum to be found by a comparatively small population. The amount derived from taxation to-day is about double what it was ten years ago. A. good deal has been said lately of the heavy inroads made by the Government on the incomes of the people. In this matter there is no authoritative guide to tell us where to stop. The only limit to taxation appears to be the patience and endurance of the people. It is clear that when £63,000,000 is taken from the pockets of the people and diverted’ to channels controlled by the Government, that money is not used as it would be if it remained in the pockets of the taxpayers. The pound that is directed from private to public channels ceases to fructify in the same manner as before. As a productive agent in the one case it enhances in value, in the other case it loses.

Various methods have been adopted from time to time in order to -ascertain the total income of the people of Australia. The approximate amount could be obtained by totalling the incomes of individual taxpayers, or by a careful examination of the balance-sheets of public and private companies and other public bodies. This is a laborious and incomplete method. I have adopted ;a method of my own in order to estimate the income of the people of Australia. I have based my calculations on information contained in the Commonwealth Y ear-Book. That publication, while excellent in many ways, could be improved if the statistical department had greater funds at its disposal. In the Canada Y ear-Book one can find the true position of every Canadian private and governmental activity. In . our case, however, much of the information that we need is, unfortunately, withheld from us. Nevertheless, the Commonwealth YearBook is an estimable production. Prom it I have ascertained that the total private wealth of the Commonwealth is estimated at £2,166,000,000. If we assume that that income of the people of the’ Commonwealth is equal to 5 per cent, annual yield, we obtain an annual income of £108,300,000. That does not include the value of municipal and governmental enterprises which do not earn anything like 5 per cent., let alone an annual sum to offset their depreciation and inevitable extinction. For that reason I strike them out from this calculation. If from that £108,300,000 we deduct the £63,000,000 required for this Government’s purposes, we shall see how alarming is the position. If to this we add the £21,000,000 levied by the. States the position is still more serious. If 5 per cent, is too -low, and we double it, then the cost of government, State and Federal, equals considerably more than £1 in every £3 of the national income. As there is an end to every story and every river, so there must be an end t” this inordinate inroad on the savings of the people. We cannot, continue to extract these large sums from the people without endangering our “financial aim industrial stability. The Government should, therefore, exercise the closest scrutiny the expenditure of every pound diverted’ from the pockets of .the taxpayer. I_f!it does not do so, financial disaster, deep and widespread, will overtake us.

In my opinion, the Treasurer has adopted an extraordinary system of bookkeeping. That remark from one who is not skilled in bookkeeping may be regarded ‘as audacious. A person unacquainted with our system of finance would come to the. conclusion, after a. study of the figures on page 13 of the budget, that we had had a succession of deficits instead of a series of surpluses. The Treasurer in his budget speech compared the five years ended 30th June, 1927, with the period ended 30th June, 1922, which was the period immediately prior to his assumption of office. On page 13 of the budget papers reference is made in respect of the same- period to a number of surpluses . totalling £4,221,984. There are two statements, one which shows the remarkable total of £7,661,053 of deficits and the other, £4,221,984 as the total of surpluses. With these figures we are led to believe, by a study of page 13, that the 5-year period ended’ June, 1927, shows a deficit of £3,440,049, whereas the true position is that there was an aggregate surplus for the period of £6,800,000. I am quite aware of the means by which this deficiency has been arrived at. The Treasurerhas brought into account the accumulated surplus of £6,408,424 on the operations of the years ending 1921-22, and mixed it and other surpluses with the sums applicable to 1922-23 andsucceeding years. A more sensible system of book-keeping to adopt would be to make the national balancesheet so simple that he who runs may read.’ -We should be able to see at a glance whether or not” there has been a . surplus in any particular year or years and how it has been applied, without laboriously puzzling out mystifying explanatory notes. My contention is that, instead of there being a deficiency, there has been a net surplus during the 5-year period of £6,800,000 although the Treasurer tells us that there has been a deficit according to the inapt figures supplied. This is due to the practice of introducing the accumulated surpluses from previous years, and mixing them with the operation of other years. I urge that we should follow the example of New Zealand. On page 8 of its budget statement, the accumulated surplus and the manner in which it has been applied, are set out in the clearest fashion. It shows that a surplus of about £29,000,000 has accumulated, and on the opposite page we see at a glance exactly how it has been distributed down to the last shilling. If the Commonwealth Treasurer adopted a similar system of book-keeping, we should not befogged, as we are by reference to page 13 of the budget.

It is interesting to consider how the States have fared compared with the Commonwealth during the last five years. While the Federal Government had a surplus to the extent of nearly £7,000,000, the States experienced fifteen surpluses and fifteen deficits, their net deficit being £2,976,741. In other words, during the 5-year period when the Commonwealth was prosperous and rolling in money, the States were rolling in deficits totalling £2,976,741, so that great difficulty was experienced by them in trying to balance their ledgers. They were hampered correspondingly in the great work of national development. Figures are as follows -

I now come to the subject of the public debt, which the Treasurer dealt with first in the budget. He said -

It is surely a most gratifying feature of our finances that we were able to effect this substantial reduction last financial year in our war debt.

I point out that the reduction in the total debt, which is the thing that matters, is not nearly so great as would appear. If honorable senators will refer to pages 10 and 11, they will notice a further attempt at making the positio’n anything but clear. We find on page 10 the words, “ Less debt redeemed, £8,481,579.” Then,- referring to the war debt, we see these words, “ This was reduced in 1926-27 by £7,640,987.” Any person reading that would naturally associate the two items, and conclude that there had been a reduction of-some £16,000,000 in the total debt. But on turning to page 11, one finds this statement -

The amount made available for debt redemption in the financial year just closed was £5,989,230, being £493,321 in excess of that for 1925-26.

Then follow the details of every conceivable item contributing to this sum, and these amount only to £5,989,230, which is far short of the £8,481,579 pre viously mentioned. It means that the difference between those two sums was made up from loan moneys, and nothing else, but that is not stated.

Let us inquire into the pleasing statement of the Treasurer that it is most gratifying that we were able to effect a substantial reduction in . our war debt last year What is the position in regard to that debt? If we turn to the budget statement of 1925-26, we notice that the Treasurer then informed us that the war debt in 1922 was £333,000,000. To-day, according to this year’s budget figures, it is £297,000,000, which shows a reduction of £36,000,000 in the five years. But other debts in 1922 amounted to £30,577,000. To-day, according to the budget before us, the other debts amount to £69,706,300, or an increase of £39,127,000. In other words, while we reduced the war debt by £36,000,000 in five years, we increased the ordinary debt by £39,127,000 in the same period. Instead of the position being gratifying it is the reverse, since there was an increase instead of a decrease of indebtedness.

Senator Payne:

– Does not that include the money borrowed for the States?

Senator LYNCH:

– No. It is money borrowed for the Commonwealth’s specific purpose. ‘

Senator Sir George PEARCE:

– It includes money spent on revenue earning assets.

Senator LYNCH:

– The money borrowed for the States stands separately, and with such I am not concerned.

Senator McLachlan:

– One is a dead debt, and the other is a revenue producing debt.

Senator LYNCH:

– The net Commonwealth debt has been increased by the amount that I have stated. In parting from the subject of loan indebtedness, I am quite prepared to concede that the position is rather healthy. The Commonwealth has not spent nearly as much as the States for the simple reason that perhaps we have outrun the constable as far as we could afford in regard to borrowing. We have had warnings from all sides to the effect that it is not right to borrow at the present time, particularly having regard to our continually adverse trade balance, and there is also the fact that we cannot borrow at a more favorable rate than 5i per cent, interest, while the United States of America can borrow at 3£ per cent. It is equally true that the country’s resources cannot stand the strain of that extra 2 per cent., unless we live within our means and borrow in proportion to the extent of our production.

Referring to taxation, I find by reference to page 27 of the budget’ that the Treasurer said -

The direct taxation collected in 1021-22 totalled £22,048,483, while the estimated collections in 1027-28 are £13,750,000, a reduction of £8,208,483. In the same period, the per capita burden of direct taxation fell from £4 to £2 4s. Id., a reduction of more than 45 per cent.

Again, on page 28, we read -

Quite apart from the specific reductions of taxation already quoted, the Government’s policy has steadily lessened the drain on the taxpayers of Australia.

With all due respect, I flatly disagree with that statement. Not only have we not lessened the drain, but we have increased it very considerably. In this matter I propose to supply the missing part of the Treasurer’s statement. To support my contention, I rely on the figures taken from the budget papers showing the amount of direct and indirect taxation since 1917-18. These figures show that, in the short space of ten years, from 1917-18 to 1926-27, the burden of direct and indirect taxation has more than doubled. In 1917-18 the total amount raised was £24,606,000, and in 1926-27 it was £58,994,000. But let me return to the year 1921-22, which, according to the present Treasurer, was the year in . which there was disclosed the most lax and wasteful system of finance. I may add, in passing, that I approved of the strictures made by the honorable gentleman upon the financial policy of the government of that day, and of preceding governments, because I have always contended that the financial proposals should be framed with a strict view to economy. But the fair and radiant morning has turned’ out a dark and murky day. In 1921-22 the amount of direct and indirect taxation raised from the people totalled £49,678,000. During the next five years, under the administration of the present Treasurer, it rose to £58,994,000 in 1926-27, a clear increase of over £9,000,000. What is more important, the increase in taxation per capita advanced from £9 0s. 4d. in 1921-22, to £9 12s. 8d. last year. So far, in my examination of the financial situation, I have dealt only with the salient points. The figures clearly demonstrate that taxation, instead of decreasing, has increased during the five-year period under review. I have prepared a complete return for the years mentioned. It is as follows: -

I have already shown how the taxpayer has fared at the hands of the present Treasurer. Following the honorable gentleman’s example, I have dissected the taxation figures for the period mentioned in order to ascertain how the burden has fallen upon the different sections and groups of the community. The following figures dealing with land and income tax receipts are illuminating and instructive.

From the above totals, we find that, during the Treasurer’s administration of the finances, there has been a reduction in the land and income tax section of taxpayers’ contributions amounting to £3,563,466, or approximately 20 per cent., in five years.

Senator Grant properly said tonight that indirect taxation falls more heavily upon the poorer than on the richer sections of the community. Let us examine other figures now and see how the poorer people fared during the same period. In 1921-22 the customs and excise revenue amounted to £27,639,000; in 1926-27 it bad increased to £43,552,000. In other words, during the five years of alleged economy in administration there was a clear increase of 58 per cent, in indirect taxation, the burden of which falls chiefly on the poorer section of the community, while those who pay land and income tax were relieved to the extent of more than 20 per cent. That is how the rich and poor have fared at the hands of this Government. Wherein comes the validity of the Treasurer’s claim that the Government has “steadily lessened the drain on the taxpayers of Australia?”

Senator Payne:

– - That is a most unfair construction to place upon the figures.-

Senator LYNCH:

Senator Payne can place upon them what construction he pleases. I have given the figures. They speak for themselves.

Senator Payne:

– I am only suggesting that the whole of the community pays customs and excise duties.

Senator LYNCH:

– High customsduties bear heavily upon the poorer classes in the community, both directly and relatively. They press harshly upon the primary producer. They hamper industry, and retard development. It. is a fact that by means of these duties the savings of the people are continually finding their way into the coffers of the Treasury out of due proportion to their income. Looked at from another angle we find that the increase in taxation during the five-year period under review has been greater than the increase in the population. In 1921-22 the total receipts from direct and indirect taxation amounted to £49,678,000, and in 1926-27 to £58,994,000 - an increase of 18 per cent., while the population increased from 5,510,229 in 1921, to 6,110,514 in 1926-27r an increase of only 10 per cent. Thus taxation has completely outstripped and outran our increase in population.

Reference also has been made in the course of the debate to the expenditure of loan money on new works and buildings. Figures which I have taken from the budget papers show in what manner provision was made for new works during the five-year period 1921-22 to 1926-27. In 1921-22 the expenditure from revenue on new works and buildings was £2,571,794; and in the following year it was £720,927; in 1923-24, £3,129,510; in 1924-25, £343,916; in 1925-26, it rose to £3,066,941 ; and in 1926-27 it dropped to £216,447. The expenditure from loan during the same period was as follows :- 1921-22, £5,246,503 ; 1922-23, £5,3S3,949 ; 1923-24, £6,060,048 ; 1924-25, £6,341,758 ; 1925-26, £7,678,856 ; 1926-27, £7,051,128. The salient feature of these figures is that the amount spent in 1926-27 from revenue and loan on new works and buildings to meet the expanding necessities of the people was less by over £550,000 than in the “ bad,example “ year, 1921-22. There is a further observation I want to make. In the years 1923-24 and again in 1925-26 there was special expenditure of £5,250,000 on naval and other defence works, swelling the aggregate amount due to abnormal surpluses. These may be regarded as windfalls and would never have come about if the previous method of financing works and buildings had been continued. Deducting this manufactured windfall from the total vote for works and buildings during this model period of five years, it leaves a rather mean showing.

Honorary Minister · QUEENSLAND · NAT

– What was the increased payment for war and old-age pensions during the five years.

Senator LYNCH:

– It was fairly respectable. Deducting the £5,250,000 which was spent on naval and other defence works, the total expenditure on works and buildings for the five years averaged £869,601 a year less than was spent, on works and buildings in “ the bad example” year, 1921-22. In the five “ model “ years the annual expenditure from revenue on these public necessities as compared with 1921-22 ‘was £1,076,246 less. If I ask a man how much money he has, I expect him to tell me not that he has £2 in one pocket, £3 in another, and £5 in another ; but that he has in all £10. So that an important point in the discussion of finance is to get at the total amount involved for the purpose of fair comparison. The net result of the fiveyear period was that the Commonwealth spent out of revenue, on works and buildings, £5,381,000 less than would have been spent had the expenditure on these public requirements been continued on the basis adopted in 1921-22. This might be all very good if there was a corresponding reduction in taxation; but taxation, instead of falling, has increased. If we had left £5,000,000 unexpended in the Treasury, it should have been there at the end of the period of five years, but it was not there and, not being there, one would have naturally expected that it would be reflected in a reduction of taxation. There has, however, been an increase in taxation during the alleged vigilant period of strict economy of over £9,000,000, or 18 per cent., as I have proved. No wonder the Treasurer is silent on the Customs House side of taxation, but the truth must out.

During the five-year period when the same “ model financing “ was observed expenditure out of revenue on . war and repatriation services was!- as follows :- 1922-23, £30,100,000 ; 1923-24, ‘ £28,770,000 ; 1924 - 25, £28,482,000 ; 1925 - 26, £29,171,000; and 1926-27, £29,209,000. In 1921-22 the expenditure out of revenue on war and repatriation services amounted to £31,337,000. To give the. net position again the average yearly expenditure out of revenue on these war services was £2,191,000 less than was spent during the year 1921-22 - the year of shocking example. Expenditure on the same basis as was incurred in 1921-22 would have amounted to £10,955,000 more for the whole period of five years. One would think that when £2,191,000 was. annually saved on war services there would be a corresponding reflection in reduced taxation, but as I have already said taxation during the period has bounded upwards.

To sum up the position, the saving effected by the present Treasurer during the five-years period on works and buildings) that are so much required by the. people, was £5,381,000, and in war services, including repatriation, £2,191,000 a year, or a total of approximately £16,000,000. While we have had that saving on the basis of that awful year, 1921-22, we have had surpluses amounting to over £6,000,000, but had our finances been administered as they should have been, that is to say, had our public works and war services been financed out of revenue instead of loan money to the same extent as was done in 1921-22, we should have incurred an expenditure two and a half times greater than that surplus. So that not only would the accumulated surplus of over £6,000,000 be swallowed up, but we would have a £10,000,000 deficit instead. As it is, a sum of £16,000,000 was saved through the change over to loan moneys, and taxation went up at the same time. The Minister says that old-age pensions have increased, but these show no greater pro rata increase during the period extolled than over the period condemned. I have an idea where most of the money has gone. Some of it has been spent on useless and extravagant expenditure, included in which is the payment to commissions which are travelling all over the country. The building up of needless bureaucratic departments is far in excess of the country’s stage of growth.

Would it not be infinitely better to leave £18,000,000 annually iii the ‘ pockets of the people, instead of raising it and spending it to no appreciably visible purpose? Let us see what has been done in Canada. According to the Canada Year-Booh for the year 1921 the total taxation of Canada amounted to 41.96 dollars, or £8 ls. 7d. a head. Five years later it amounted to 34.46 dollars, or £6 ls. Sd. a head. Australia’s taxation in 1921 was £9 Os. 4d. a head. In 1926 it was £9 12s. Sd., an increase of 7 per cent, as against a ‘decrease of 30 per cent, in Canada over the same period. Roughly speaking, there was a difference of 40 per cent, between the Canadian and the Commonwealth governments, one in the direction of easing the burden of taxation and the other in the direction of increasing it. In the matter of taxation, let us hope that Senator Payne, who is an admirer of Canada, will ask why we should have this increased taxation in Australia, with nothing to show for “it, as compared with the decrease in Canada. I want to know why this should be the case, despite the fact that we are spending loan money on works on which previous governments spent their revenue. If the practice of the past had been continued in its entirety our revenue expenditure figures would have an entirely different showing, or the revenue from taxation would have shown a considerable decrease. But far from doing so it shows a substantial increase. I am afraid that we shall not have a drastic change until the people take a hand in the matter. We cannot go on increasing the burden of taxation, especially in an indirect form, without coming to a sudden stop with unmeasured injury to the people.

The defence of this country is so all important that it needs very little comment from any one who wishes the country well. We have the statement of Mr. Lloyd George that there are more men in Europe to-day ready to stand to arms than there were before the great war. It is about time we looked to the position of Australia. In the budget papers we see the same dead level being maintained in the expenditure on defence. I am sure the Minister for Defence (Senator .Glasgow) would have taken the matter in hand, but he has not been al lowed to do so. The last thing a government should do is starve the defence vote. Year after year the InspectorGeneral has’ been drawing attention to the urgent and vital necessity for doing something to put Australia in an adequate state of defence, but year after year governments have turned a deaf ear to his appeals.

Taxation is mounting. Where is the money going? I think the time has arrived to appoint a commission. As a matter of fact, the only commission really wanted is one to inquire into the mania for appointing so many commissions. I am not opposed “ to commissions as a principle, but a very indulgent and lavish hand is being used in appointing them. There has been no firm refusal to requests for their appointment. A commission has just been appointed to investigate the pastoral industry. There are other industries needing ‘investigation if such is to be the position. Wheat-growing is one. I can quote figures to show the urgent necessity for an inquiry into that patient and long-suffering industry. They are doleful figures respecting rural industries. In 1915-16 the total area under cultivation was 18,000,000 acres. In 1925-26 the area under cultivation declined to 16,000,000 acres, a decline of 2,000,000 acres over the ten years. During ten years of alleged progress 2,000,000 cultivated acres of good Australian soil have gone back to grass or primeval wilderness. It is true that during the war period a special appeal was made, particularly to wheat farmers, to put more country under crop, which, to some extent may be responsible for this very doleful and depressing spectacle presented iti the pages of the document from which I am now quoting. There has been a clear’ decline of 2,000,000 acres in ten years; but after making allowance for the response to the special appeal which I have mentioned, I find that in the last four years during which no such appeal was made, our production has been at a dull, dead, stationary level. That is not progress. Commissions and boards are appointed to inquire into almost every activity in- this country, and since the Government wishes to waste money, as it appears to be doing in many directions, it could with complete justification and without waste institute an inquiry into the stagnant condition of the rural industries of Australia. The pastoral industry has received a set-back during the last year, but it is hoped that the position will improve. I am, however, directing attention to the unwarranted, and almost childlike action of the Governmen in listening to every appeal that is made on behalf of other industries, whilst at the same time the most important industry, and one on which Australia depends’ to a large extent for her financial stability, is entirely neglected. I trust the Prime Minister will give some attention to the industries on the broad countryside.

Senator Kingsmill:

– The Government would listen more readily to a suggestion for increased duties.

Senator LYNCH:

– Ye3; it is almost outside the pale of common sense. Duties are piled up to such an extent that it is becoming impossible for many of our rural industries to have the slightest hope of prospering. The cost of living is increasing and unemployment is prevalent, largely because of the unreasonable protection afforded to a few manufacturers and their operatives, who are the only ones who benefit. Customs duties have been imposed and collected, not in response to any appeal, but purely because the Minister of the day imagines that such duties are necessary. The depressing page of Australian history, containing the figures I have just quoted, shows that the rural industries are stagnant, notwithstanding the progress which is manifest in other directions. The position is as I have stated, and any one acquainted with the public affairs of this country and with industry must admit that it is time that both the manufacturers and the operatives got down to business instead of continually asking for favours and appealing to the Government in an attempt to persuade it to impose duties to assist industries already highly favoured as well as other puny and paltry industries. Why does not the Government help those men upon whose efforts the whole country is dependent? The page which I have quoted from this document should be placed in the hat of every man in Australia.

I return to the question of defence. We have a man in charge of our Defence Department who knows his work, and the Government should pay some regard to his recommendations. He, and some of the officers associated with him, are closely in touch with the international situation, and they also know what is needed in the matter of marshalling, training and equipping our manhood for the protection of the nation. When we sea taxation piling up until it has reached £9 12s. 8d. a head of the population, it is time we called a halt, dispensing with a ruthless and remorseless hand with all useless expenditure, and spending the money at our disposal in providing for the defence of this great country. It is true that the League of Nations provides a very good safeguard, but in it I do not place all my faith. . I believe in what Mr. Lloyd George said, that Britain, with the assistance of America, could achieve a good deal, and that the League of Nations can also assist in preserving peace. Our home defence should, however, not be neglected, as we have infinitely more to lose than any other country on the face of the earth. Our resources are such that we should not hesitate to spend every penny we can afford for their protection. We should be ready to be able to strike an effective blow should the occasion arise, because other nations are not neglecting their defence systems. In the days gone by an attempt was made to establish something in the nature of the present League of Nations, but the proposal was finally abandoned. The concert of Europe was such an effort in the early part of last century that, when it came to an end, the British Prime Minister of the day said, “ Thank God we are free and can revolve on our own axis.” We have been shown the way to defend ourselves by Sir Harry Chauvel, who has, however, received little assistance from the present or past Governments. Every administration turns a deaf ear to his advice; but those of us who know the country, and realize its possible destiny if our defence policy is not radically altered, are not satisfied. If the present

Government will not effect a change we. should replace it by a Government that will.

Senator Findley:

– Hear, hear. That is the way to do it.

Senator LYNCH:

– We could not expect much support from Senator Findley and bis followers, who believe that teo much money is at present being spent on defence. Money is being expended in frivolous and extravagant ways, whilst nothing is being diverted to a department which is insistently asking for help in order to ensure the defence of Australia. Our defence expenditure should receive first consideration, and until it does other expenditure should be rigidly cut down. Is it not time that we made our position secure in an endeavour to retain possession of this glorious country,’ which we are so fortunate to possess? We should allow the Commonwealth defence system, which may be regarded as a seedling, to grow into a grand old oak capable of sheltering us from all the storms that may come. As instinct, reason, inborn feeling, and everything else point to the insecurity of our position, I ask that the defence vote be increased. If this Government will not do it, it is time we had one that will.

Debate (on motion by Senator Payne) adjourned.

Senate adjourned at 10.25 s.m.

Cite as: Australia, Senate, Debates, 29 November 1927, viewed 22 October 2017, <>.