12th Parliament · 1st Session
The President (Senator the Hon. W. Kingsmill) took the chair at 3 p.m. and read prayers.
– Has the Leader of the
Government in the Senate seen a statement in the press recently to the effect that certain biscuit manufacturers in Great Britain, in retaliation for the high tariff imposed by the present Government against Great Britain, have decided not to use Australian sugar or flour, and will be inform them that it is not anticipated that the present Government will be in office very long, and that by not using Australian sugar and flour the quality of their biscuits will deteriorate very much ?
– I have not read the statement referred to by the honorable senator in the first part of his question. No Minister of the Grown would feel called upon to answer the second part of the question.
– I ask the Leader of the Government in the Senate the following question, without notice -
– My answer to the honorable senator’s first question is that the present Government made no promise.
– But its supporters did.
– The Government 5a answerable for its own acts only. It made no promise on the lines suggested in the honorable senator’s first question. The other questions relate to matters of Government policy, and it is not usual to disclose Government policy in answer to questions.
– As I am not satisfied with the Minister’s reply, I shall put my question on the notice-paper for to-morrow.
Motion (by Senator R. D. ELLIOTT - by leave - agreed to- ‘-
That the time for bringing up the report Iron) the Select Committee appointed to consider, report and make recommendations upon the advisability or otherwise of establishing standing committees of the Senate upon Statutory Rules and Ordinances, International Relations, Finance, and Private Members’ Bills, be extended to Wednesday, 28th March, 1930.
– Has the Leader of the Government in the Senate noticed that recent balance-sheets of primary producing companies in Queensland, showed that the losses for the last year amounted to £70,000 odd, and no dividends had been paid for four years, whereas the commercial columns of the newspapers in which this information is given showed that an entertainment company at St. Kilda, Melbourne, had declared a dividend of 25 per’ cent. 1 If the Minister is aware of this, will he take into serious consideration the question of reducing the taxation on primary producers and substituting a tax on amusements?
– I have not noticed the statements in the press referred to by the honorable senator; but if he will supply the Government with the data which apparently he has at his disposal it will be given the fullest consideration.
– I should like to know if it is true that the Government has received from the Primary Producers Association of Western Australia a protest to the effect that its taxation proposals are retarding the development of Western Australia, and secondly if there is any truth in the rumour that Mary
Pickford and Charlie Chaplin have cabled the Government from Monte Carlo, congratulating it on the justice of its taxation proposals, which exempt the industry in which they are interested ?
– I ask the honorable senator to give notice of the first part of his question. I am sure that he did not base the second part of his question on anything he had seen in a Western Australian newspaper.
asked the Minister representing the AttorneyGeneral, upon -notice -
– The AttorneyGeneral has supplied the following answers to the honorable senator’s questions : -
PROPOSED STORM-WARNING Station.
asked the Minister representing the Minister for Defence, upon notice -
– The answers to the honorable senator’s questions are as follow : -
Minister, representing the Treasurer, upon notice -
– The position of the gold-mining industry has for some time been under consideration by the Government, and the Prime Minister hopes to be ina position to make a statement on the matter shortly.
asked the Minister, representing the Prime Minister, upon notice -
With reference to questions asked on the 5th December last, in respect of alleged discontent amongst the public servants of New Guinea -
Has the Minister made the inquiry promised, and if so, with what result?
What decision has been arrived at in regard to the letter from the Public Service Association of New Guinea therein referred to?
– The replies to the honorable senator’s questions are as follow : -
Minister representing the Acting Minister for Trade and Customs, upon notice -
– The information is being obtained.
Resentment in Australia.
Has the Government observed whether strong resentment has been aroused in Australia by reason of the reports of the alleged policy of religious persecution beingpursued by the Government of Russia?
Will the Government communicate the fact of the existence of this strong feeling to the Government of the United Kingdom?
In the event of the Government of the United Kingdom forwarding any representation or protest to the Government of Russia, will the Commonwealth Government associate itself with such protest?
– The answers to the right honorable senator’s questions are as follow: -
Is it a fact that the British Government has made certain representations to the Commonwealth Government in connexion with the recent increases in Customs duties; and, if so, will the Minister have a copy of the representations laid on the table of the Senate?
– The representations referred to have just come to hand, and a copy will be laid upon the table as soon as possible.
– The answers are as follow: -
Total strength of senior cadets prior to suspension of universal training 16,713.
In regard to 350 at educational establishments, it is pointed out that enrolments have hardly commenced owing to the school vacation.
– The Government, as a result of the inquiries it has made, is satisfied that the necessary arrangements for the payment can be made.
– The answers to the right honorable senator’s questions are as follow : -
asked the Minister for Repatriation, upon notice -
– The information is being obtained, and a reply will be furnished to the honorable senator as soon as possible.
Duty on Woollen Yarns.
asked the Minister representing the Minister for Trade and Customs, upon notice-
Will the Government take immediate steps to rectify the existing anomaly whereby artificial yarn (which is a serious menace to Australia’s great national industry, viz., wool) is allowed into the Commonwealth free of duty, whilst upon woollen yarns a duty of1s. per lb., plus 30 per cent, ad valorem, is imposed?
– The matter will receive consideration.
Tariff Board’s Investigations
asked the Minister representing the Minister for Trade and Customs, upon notice -
– The answers to the honorable senator’s questions are as follow : -
asked the Leader of the Government in the Senate, upon notice -
– The answers to the honorable member’s questions are as follow : -
Motion (by Senator McLachlan agreed to -
That leave be given to introduce a bill for an act relating to life insurance.
Debate resumed from 12th March (vide page 10) on motion by Senator Da.lt-
That the paper be printed.
Senator Sir GEORGE PEARCE (Western Australia) [3.20]. - I regret that the Government has not so arranged the business of the present session as to have some bills ready for the Senate. There have been sessions when practically the whole of the work has been of a financial character, in which cases, of course; the necessary legislation had to be introduced first in another place. But some of the bills introduced in another place yesterday were not of a financial nature and could, therefore, have been originated in this chamber. I suggest that the VicePresident of the Executive Council (Senator Daly) should impress upon his colleagues that, in the division of work, it would he advisable that some of the hills should come to the Senate in the early part of the session, otherwise we shall find it necessary to rush them -through the Senate at the end of the session, in which case I predict that there will be difficulty in getting them passed. The Vice-President of the Executive Council can scarcely expect a favorable response from honorable senators if at the end of the session they are asked to rush through the business in a short time when they had practically nothing to do in the early part of the session. I make this suggestion in a friendly spirit.
In dealing with ‘ the Government’s statement of policy, I propose to take the last paragraph first. That paragraph reads -
The difficulties confronting Australia ave serious, and a proper realization of them should result in whole-hearted co-operation of all sections in the working out of a satisfactory solution. Indeed, at the present juncture, the Parliament might fittingly become an economic conference of representatives of the people meeting to discuss the general position.
I heartily associate myself with that sentiment. All honorable senators, I feel sure, would welcome a definite lead from the Government in that direction, in which case it could rest assured of the heartiest co-operation of every honorable senator. But when I look at the statement of policy I fail to see that the Government has given us any lead in the direction indicated. We all recognize the seriousness of Australia’s position and the urgency of such legislative action as can be taken to improve the situation; but I challenge anyone to find a scrap of comfort in the statement before us. It contains nothing that will really affect the economic situation. At a time like this, when the situation confronting Australia is so serious, it would be wrong to criticize the Government’s statement of policy from a party standpoint. The life of the nation is more important than the life of any political party. In the consideration of Australia’s problems we should put party aside and face these issues unitedly. I suggest, however, that that attitude should not he confined to honorable senators on one side of the chamber : it should be general. The Government should know the present position better than anyone else knows it, for it has sources of information not available to others. If we are to co-operate and face the position frankly, as is suggested in the statement, all the cards must be placed on the table, and the whole truth told. We should not gloss over the position with catch cries, or cries of party warfare; we should tell the people the truth and show them the way out. The lead must come from the Government; it is not the duty of the Opposition to suggest remedies at this juncture. The Government has just received from the people a strong endorsement of its policy. It has promised to cure unemployment, to make changes in the industrial field, and to do other things. It is now for it to redeem those promises.
Although any constructive suggestions must come from the Government, I realize that an obligation rests on all of us, irrespective of party, to express our views on the present situationin order to get the people to realize its seriousness, and in the hope that a solution of our problems will be found. I propose to approachthe consideration of this statementin that spirit and to indicate what I believe will contribute towards a settlement of our difficulties.
First, I shall take the opening paragraph of the statement of policy -
Fundamentally, we are suffering from the effects of world-wide depression accentuated by over-borrowing.
If we are to solve our difficulties we must be honest and frank with ourselves; we must be sure that what we say is accurate. Is Australia’s present economic position the result of world-wide depression accentuated by over-borrowing? The statement does not say whether the Commonwealth or the States, or both of them, have been guilty of over-borrowing.
The following table extends to the 30th June,1929, the information given in my last budget-speech, regarding the growth and character of our debt charges for the period of six years ended the 30th June, 1928: -
That statement shows that during those years the war debt - which is a dead debt and earns no interest or working expenses - decreased by £45,276,088, while the works debt increased by £58,058,071. The net increase of the total debt during those years was, therefore, £12,781,983. Those figures show the Government’s statement regarding over-borrowing is not applicable to the Commonwealth. The total debt per head of the population is set out as follows: -
It is well that those facts should be set on record, as there have been attempts to make it appear that the Bruce-Page Government indulged in an orgy of overborrowing. Those figures conclusively disprove such claims.
I come now to the statement that our position is due to a world-wide depression. It is only too evident that a worldwide depression exists. But the existence of such a state of affairs does not necessarily cause our trouble in Australia. The position needs to be examined carefully so that we shall not humbug ourselves. Let us ask ourselves whether the world-wide depression that now exists is the cause of the drop in the prices of wool and wheat. The war caused a tremendous economic disturbance that affected every country in the world, and particularly those countries that participated in it. At the termination of hostilities every European country was faced with inflation and the high prices caused by inflation, and necessarily had to go through a period of deflation, re-adjustment, and reconstruction - and an extremely bitter experience it was. In every one of those countries production costs had to be reduced. I believe that Australia - and New Zealand to a lesser degree - was the only country that escaped that ordeal. Australia did not go through a period of economic readjustment and reconstruction simply because, when the war ended, it had two commodities that the world wanted, food and clothing; and it could supply both to those who needed them.
Let us examine the position of the wheat industry, in which, before the war, Australia had a serious competitor in “Russia. After the war Russia was out of the field as a competitor. Every European country had almost ceased to he a grain-producing country, and instead had become a grain-importing country. I shall quote the prices obtained for Australian wheat under the compulsory wheat pool and also the Western Australian voluntary wheat pool, which was operating in later years. I shall omit fractions of Id.-
It will be noticed that there has been a gradual but steady decrease in prices since the termination of the war. It is significant tha’t the highest price was offered in the year 1919-20, immediately following the war, while the lowest price was received in 1928-29, the year farthest removed from the war. The explanation is simple. The high price of 1919 was due to the scarcity of wheat in Europe - a scarcity which we were able to meet. The low price of 1928-29 is explained by the fact that in that year the nations of Europe had undergone their period of re-adjustment and re-construction, and were again producing the grain foods they required in great quantity.
Senator Sir GEORGE PEARCE.The honorable senator will probably have an opportunity to speak later if he desires; that is if he is permitted to do so, which ‘I am inclined to doubt.
I now wish to make a. statement about which I do not desire to be misunderstood or misrepresented. In my subsequent remarks I shall use the terms “nominal’”’ wages, and “ effective “ wages, and 1 shall explain what I mean. Let us assume that it is necessary, in order to maintain our standard of living, that an unskilled labourer shall be able to purchase 100 units of food, clothing, &c, per day, and that it takes £1 a day to do that. Suppose, however, we can so reduce the cost of production that 10s. a day will be sufficient to purchase those 100 units of requirements. In that case if a wage of £1 per day be maintained, then, as. an effective wage, it is twice as high.. The arbitrary figure of £1 a day is the nominal wage. The effective wage is determined by what the £1 can purchase. Wages in Australia may be high nominally, and low effectively. The wage-earner, by reason of the high cost of living, may not benefit by a high nominal wage of, say, £2 a day. Such high nominal wages have a most important effect in regard to internal competition in Australia, while they have an even more important effect when Australian goods have to bc sold outside of this country. The high nominal wage then must be measured by the nominal wage paid by our competitors in the world’s markets. A high nominal wage then not only does not necessarily benefit the wage-earner inside Australia - because of its low purchasing power; it may really be a low effective wage - but, by reason of the added cost of the goods to be sold outside Australia, it will lessen our ability to compete, and can only be maintained in Australia by high tariff duties. This is not in argument for low effective wages. J am merely laying down principles which, if recognized and applied, will provide the surest means of securing and maintaining really effective high wages in Australia.
If honorable senators ask for an illustration of my contention, I point to the position of the Dominion of Canada, There,, the cost of production has been so. reduced that notwithstanding thar wages are as high as they are in Australia., the Dominion supplies not only the home market, which is not much bigger than our own, but is able to send the surplus output of its secondary industries, as well as its primary productions, into the markets of the world aud compete successfully against cheap-labour countries. It is impossible for Australia to do that.
Let us examine our position and endeavour to discover the reason for the cost of production in Australia being maintained at the level of 1919. In the first place we must remember that we have a scanty population of only 6,000,000 people, spread thinly over the continent, and that we have consistently adopted a policy of high protection for our secondary industries. This policy undoubtedly has resulted in the expansion of our secondary industries and maintained the high cost of living in Australia. On this point I quote the following statement furnished to the conference of Commonwealth and State Ministers at Canberra on 28th and 30th May, 1929, by the then Prime Minister, Mr. Bruce : -
The progressive increase in the cost of living in Australia is shown by a reference to the index numbers. That showing cost of food, groceries and housing in 1914 stood at 1.140; in 1924 it had risen to 1,082; and in 1028 to 1,700. There lias thus been an increase in the cost of living of 54 per cent, since 1914 and 5 per cent, since 1924. The tendency is still upwards, the index for the first quarter in 1929 being .1,820. These figures are best explained by saying that it now takes £1,820 to buy what could Vie bought last year for £1,700; what could be bought in 1924 for £1,682: and in 191.4 for £1,140.
The points I wish to emphasize are that our wages system is based on the principle laid down in the harvester award; that the cost of living has meant a higher nominal rate of wages in industry; aud that this high nominal rate of wage has been an important factor in determining our capacity to compete in markets outside Australia. Whilst nominal wage may be high and act as a serious drawback to all Australian exporting industries, it is not necessarily a high effective wage, as the effective wage is determined not by what it amounts to in pounds sterling but by what it can buy. My other point is that, with a high cost of living, which is not necessarily a high rate of living, and, as a necessary corollary, a high nominal wage, the secondary industries must of necessity have a high rate of tariff duty to protect them from foreign competition in the local market. Thus we have a vicious circle - high tariffs resulting in a high cost of living and high cost of living of necessity demading the payment of high nominal wages. Whenever tariff duties are increased the cost of living necessarily goes up, and wages must follow. And so ad infinitum Accordingly, I join issue with the Prime Minister in the ministerial statement which was presented to honorable senators yesterday by the Leader of the Government in this chamber. I challenge his statement that Australia’s position to-day is the result of a world-wide depression. We must look to local causes. We must do what other countries have already done - get back to normal in production.
Another statement to which I. direct attention relates to the balance of trade. The Prime Minister points out that Australia’s adverse trade balance during the last six years amounts to £42,000,000, and he endeavours to make it appear that, if we can only redress the balance of trade, everything will be well. 1 suggest, however, that in a matter like this it is advisable to examine our position over a longer period of time. We did not set up in business only six years ago. Let us, therefore, go back still further - to the year immediately following the war, when our trade relations were not disturbed by hostilities. Let us examine our trade position during the last eleven years. In 1918-19 our exports totalled £113,964,000, and our imports £102,335,000. In that year we had a favorable trade balance of £11,629,000. In 1919-20 our exports totalled £149,824,000, and imports £98,974,000.
Senator Sir GEORGE PEARCE.In. that year the favorable trade balance was as much as £50,850,000. In 1920-21 our imports totalled £163,802,000, and our exports £132,159,000, the adverse trade balance being £31,643,000. In 1921-22, our exports were £127,847,000, and our imports £103,066,000, so again we had. a favorable trade balance of £24,781,000. In 1922-23 our imports totalled £131,758,000, and our exports £117,870,000, the adverse trade balance being £13,888,000. These figures indicate that over the five-year period which I have just quoted our favorable trade balances totalled £87,260,000, and adverse balances £45,531,000, leaving a favorable trade balance of 41,729,000 for that period. If we consider these figures in conjunction with those quoted by the Prime Minister covering the last six years, we find that, over a period of eleven years, our imports and exports practically balanced. I suggest, therefore, that the explanation of our position is not to be made merely by quoting the adverse trade balance of the last six years. What we have to ask ourselves is this: What are the causes of the excess of imports over exports in the last-mentioned period? Is it not to be found in the fact that, under our fiscal system, we are living in an economic sphere which has no relation to the outside world? Is it not due to the fact that we have had in Australia a great prosperity produced by three causes - (1) a scarcity of production in other countries and consequent high prices for our exportable surplus, (2) a nominal wage and a nominal cost of living much higher than in other countries, and (3) expenditure on extensive developmental works with borrowed money. These causes,
I suggest, raised the artificial purchasing power of our people, and have been largely responsible for the enormous increase in imports during recent years. But now we are faced with this position : The first cause to which I refer - scarcity in the outside world, and a consequent, high price for Australian products - has almost disappeared, and the second cause - a nominal wage and nominal cost of living much higher in Australia than in the outside world - was made possible only by the operation of the tariff and borrowed moneys. The power to borrow money has now practically disappeared and the sole thing remaining in support of the second cause is our tariff. These are cold, bitter truths, but they have to be faced in Australia as they have had to be faced in other countries. The statement of the present Government’s policy does not face them. On the contrary it evades them.
It has been said that the BrucePage Government did not face these problems or warn the country of the crisis which was impending, but I propose to show how it did so by quoting extensively from a speech delivered by Mr. Bruce at the conference between Commonwealth and State Ministers, held at Canberra in 1929. Mr. Bruce said -
The situation that confronts us to-day cannot fail to cause anxiety to every thinking citizen. Australia has in the past experienced periods of temporary depression, which have been due in the main to adverse seasonal influences. Generally speaking, we have been fortunate in that they have been of short duration, and that the disabilities which they have occasioned, such as unemployment and stringency in public finance, have rapidly disappeared with the return of normal seasons. Our present position is, however, due, I suggest, to causes that are more deeply seated, and good seasons alone will not restore prosperity. The price of our staple commodities - wool and wheat - have recently declined. The sale of the surplus products of most of our other primary industries has become unprofitable, and the position of our secondary industries is becoming more and more difficult owing to ever-increasing competition from overseas. The cumulative effect of all these things is discernible in the growth of unemployment throughout Australia, and in the increasing complexity of the problems with which we have to contend in relation to our finance, commerce, industry, and production generally.
Having regard to Australia’s unrivalled resources and unexampled opportunities, this check in the progress of our commerce and production is the clearest indication that there is something wrong somewhere in our national economy, which it is our duty to discover and to remedy. The situation calls, therefore, for the closest investigation of the causes of our present difficulties, not merely with a view to ending the existing period of depression, but also with the object of eliminating the factors that are impeding our national progress and retarding our development. This can be done only by an exhaustive examination of the whole position.
Then dealing with the cost of production, lie said -
The question that, has to be faced is - how can this increased prosperity be brought about? During recent years we have attempted to do it by the free use of borrowed money. In pursuance of this policy, Australia hits, since 1920, spent some £300,000,000 of borrowed money on capital works. The results of this expenditure, however, have not been such as to warrant its indefinite continuance upon the basis which has existed in the past. lie went on to say -
A critical examination of our present position leads inevitably to the conclusion that the basic cause of all the economic troubles of Australia to-day is the. high cost of production, the reduction of which is the first step that we must take to bring about a solution of our problems. A nation-wide reduction in our costs of production would effect such a transformation in our industrial and financial position as would enable us not only to absorb our unemployed in useful occupations, but also to pave the way for a progressive increase in our population. In the home market the competitive strength of our secondary industries against overseas goods would be enormously increased ; the value of the tariff protection at present afforded would be augmented ; and the necessity for increased duties to protect Australian industries would disappear. The reality of the need for a reduction in the costs of production in our secondary industries is indicated by the fact that, since the war, conditions in competitive countries have progressively improved ; wages have been increased ; standards of living have been raised ; and hours of work have been shortened. All these factors should have contributed materially to assist Australia’s industries in their competition with the products of other countries. This, however, has not happened. f invite particular attention to these words -
That it should not have happened is all the more remarkable when we consider that the Customs Tariff of 1908 contained only eight items with an ad valorem duty of 40 per cent, or over, whereas in the present tariff there are no fewer than 259 items with ad valorem rates of 40 per cent, or over, and 40 with rates of over GO per cent. “With its tariff, Australia should have been in a better position to compete with other countries which had been increasing wages and reducing hours of labour. Mr. Bruce went on to say -
These facts speak for themselves. The lesson they teach is clear and unmistakable. It 13 that we must take up immediately the task of sotting our house in order by reducing cost3 of production to an economic level. This done, our industries will begin to expand, and new avenues of employment will be opened for our people. Our primary industries will benefit by the increased market afforded for their production due to the greater volume of wages paid to the workers in healthy and progressive secondary’ industries. Our home market for both primary and secondary products will be enlarged, and the margin between production costs and the prices in the world’s market will be increased.
There is one other very pregnant quotation I wish to make. Speaking on the same occasion, Mr. Bruce said -
Two alternatives face Australia to-day. Either we can resolutely attack this problem of reducing our costs of production, and by so doing reduce our costs of living, expand our avenues of employment, maintain and augment our standards of living, and increase our national wealth ; or we oan refuse to recognize the needs of the position, and allow our national wealth to diminish, and unemployment to increase until, faced with a national crisis, we arc forced to lower our standards of living and re-orientate the whole of our national life. Between these two alternatives can there be any hesitation ?
Such was the warning and lead the then Prime Minister gave to the people of Australia. Now let us consider what the present Government has done. In its declaration of policy of yesterday, it said -
Development of primary industries for the production of exportable wealth and the extension of Australian manufacturing will help to balance our external trade and enable us to employ our people, and eventually to maintain a larger population.
Then follows the extraordinary statement -
It would bc a policy of despair to declare that costs of production and development are too high to permit of the expansion of our industries.
Why is it a policy of despair to face the obvious fact that the costs of production and development are too high? The Government indeed acknowledges that they are too high. In the same document in which this declaration is made it announces that in order to encourage the production of wheat in Australia what practically amounts to a bounty on wheat is to be paid. If costs of production are not too high in Australia where is the need for a bounty on wheat? Because behind the proposed wheat pool is a bounty. Wheat will not realize 4s. 8d. per bushel in the world’s markets, and the deficit will have to be made up either out of the Treasury or by calling upon the consumers of wheat in Australia to pay more for their wheat and flour. Thus, the very document which declares that it is a policy of despair to say that costs of production and development are too high acknowledges that they are too high by admitting that one of the great industries upon which Australia depends cannot continue unless it is bounty fed. In its declaration of policy, the Government says that we must face the position frankly, but instead of facing the position frankly it absolutely ignores it.
It is suggested in the ministerial declaration of policy, that if we can redress our adverse trade balance all will be well, and that this can be done and our high costs of production still maintained. The two things, however, are absolutely incompatible. If Australia cannot continue producing wheat unless the wheat producers are provided with a compulsory wheat pool and a guaranteed price - the greatest condemnation one could have of the cost of production in Australia - admittedly the existing costs of production can only be maintained by borrowing from one and transferring to another. Australia cannot increase the overseas price of its wheat or wool by one single farthing, and the Government knows, as does every one in the community, that it is not profitable in Australia to produce wool and wheat on to-day’s prices. Why, therefore, should we. humbug ourselves? If we cannot increase our prices overseas, where we have to sell the greater part of our primary production, the only way in which we can make our primary industries prosper is by reducing the cost of production.
What did those gentlemen, who now occupy the Government benches, do in respect of the warning put forward by Mr. Bruce, when he held office as Prime Minister? Did they then recognize the need for co-operation? Did they agree with Mr. Bruce that Australia was approaching a serious time or that it should shorten sail and readjust the economic position ? On the contrary, they went throughout the country telling the people that all was well, and that the remedy the Bruce-Page Government proposed was a general reduction of salaries and wages. And on that cry they won the elections.
We cannot maintain an effective wage and standard of living in Australia except by reducing the cost of living and the cost of production. To talk of bringing it about by any other means - by compulsory pools and guaranteed prices - is to follow the example of the man who attempted to lift a tub by standing in it. Here we have the Prime Minister making an appeal to the farmers to grow more wheat. It is an excellent proposal to grow wool and wheat if it can be sold at a profit. But let us study the appeal of the Prime Minister (Mr. Scullin) and see what it actually means. Australian production in 1927-28 was valued at £453,311,000, of which amount agriculture was responsible for £84,256,000, or a little over 18 per cent., and manufactures for £158,562,000, or 35 per cent. Notwithstanding this the Prime Minister does not appeal to the manufacturers, whose goods are at present being sold behind a high tariff wall, to assist in restoring our trade balance. None of these manufactures pass beyond that tariff wall; if they did they would be left shivering in the cold blast of world competition. The. Prime Minister did not say to the manufacturers who are sheltering behind our tariff wall, “ For Heaven’s sate pluck up your courage and assist in restoring Australia’s trade balance.” He should advise the Australian manufacturers to do as the Canadian manufacturers are doing - sell their manufactures in the markets of the world, as the producers of Australian wheat and wool are compelled to do. Why does he not tell the Australian manufacturers, who have h;>d the benefit of high protection for 30 years, to do something to help their country by assisting to restore our trade balance? He lias not asked them to sell Id. worth of manufactured goods outside Australia; but has turned to the wheat farmers, who have always been faced with the cold blast of world competition, and, in effect, has said, “For Heaven’s sake grow more wheat.” He appeals for an increased production from agricultural industries, which at present are producing 18 per cent, of our wealth, but he mak<-s no appeal whatever to the section which is producing 35 per cent, of it. In 1927-28 mining production in Australia was valued at £22,983,000, or 5 per cent, of our total production, but the Prime Minister makes no appeal to the mining industry. There was a time in Australia when the mining industry contributed a great deal in the direction of redressing our trade balance overseas. For instance, in 1923 - not very long ago - New South Wales exported overseas 2,3S1,549 tons of coal, but exports of this commodity have fallen off in one year - in 1927- to 1,637,716 tons, a drop of 693,833 tons. For the information of the Senate I quote the following figures showing the coal exports, including bunker coal, from Australia : -
If bunker coal is excluded, the story is even a sadder one, as not only did the export figures fall from 2,012,090 tons to 1,086,371 tons in the six years I have quoted; but during the eleven months ended November, 1929, we actually imported 500,000 tons of British coal, which would not have been brought into the Commonwealth if the coal mines in Australia had continued to work. Did the Commonwealth Government make any appeal to those engaged in the coal-mining industry to redress the trade balance?
Senator Sir GEORGE PEARCE.I do not wish to encourage the importation of luxuries; but they constitute only a very small proportion of our imports.
I do not propose to refer to a good many of the subjects mentioned in this document which has been presented for the consideration of the Senate. The alleged economies effected in the Defence Department will be dealt with very effectively by Senator Glasgow.
The Government has taken some credit for the reconstruction of the Development and Migration Commission, but I say, advisedly, that that commission has been the most economical body that any Australian government, Commonwealth or State, has ever appointed. It has been able to check waste and extravagance in connexion with some of the developmental schemes brought forward by State governments, and which, if they bad not been referred to that commission, would have been proceeded with, with a consequent expenditure in connexion with salaries and all attendant costs for perhaps a hundred years. We have only to study the report of the Development and Migration Commission, which is available to honorable senators, on the Dawson River Valley scheme, which was to cost £4,000,000, and which the Government of Queensland intended to carry on with money which it proposed to borrow until it found that it could get cheaper financial accommodation under the £34,000,000 agreement. Because the scheme was to be brought under that agreement, it had to be examined by the Development and Migration Commission. It was then revealed, as shown by the report, that the Theodore Government was going into the scheme without having first obtained reports from its own experts in the Department of Agriculture, the Water Supply, or any other department, in order to ascertain whether it was economically sound.
Senator Sir GEORGE PEARCE.No; it was going into the scheme practically on the recommendation of its engineer, a gentleman named Partridge, without any proper examination by the experts of Government departments. When the matter came before the Development and Migration Commission the agricultural and other experts in Queensland were asked to report on the proposal, with the result that the scheme was not proceeded with. I invite honorable senators to refer to page 35 of the Second Annual Report of 1928 of that commission, and to read what is said in it con cerning the Nowingi railway proposal of the Hogan Government in Victoria, and which, in the absence of the intervention of the Development and Migration Commission, would have been proceeded with and would not only have resulted in a dead loss to the Government, but would have been responsible for a large number of settlers being placed on land on which they could not possibly make a living. That scheme was held up entirely as a result of the investigations of the Development and Migration Commission.
I notice that the Government proposes in some vague way to take a referendum on the question of an alteration of the Constitution for the. purpose, amongst other things, of obtaining greater industrial powers. Does the Government think that at this juncture, when we are faced with a serious industrial and economic position, it is proper to divert the attention of the Parliament and of the people to an amendment of the Constitution ? Should we not content ourselves with the powers we have to put our house in order so that we can face the storm that is undoubtedly coming? Supposing the Government carries its proposals, whatever they are, and gets full and unlimited power in industrial matters, what will it do to adjust the position with which we are confronted today? Take the coal industry. What would the Government do in that case? It may say that it would, if it had more extensive industrial power establish a coal tribunal before which it would compel the coal-owners and coalminers to appear. Such a tribunal would doubtless make an award, but we have had awards from tribunals before to-day. And with what result? Awards are in force in connexion with the coalmining industry, but the coal-mines are not working. Supposing an award provided for a reduction in the hewing rate for coal, would the coal-miners accept it? If they did not, what would this Government do? Would it compel them to accept it? If the award was that the hewing rate should remain as it was prior to the dispute, would the coal-mine owners open their mines? Could the Government compel the mineowners to open their mines if it would not pay them to do so? Failing that, we come to the remedy that has been suggested in certain Labour quarters, that the Government should nationalize the coal mines. Have those, who would advocate such a course, studied a section in the Constitution under which the Government could not do so without paying fair compensation to the mine owners ? Could the Government give any guarantee that coal produced from nationalized mines would be Id. cheaper than it is to-day? Has not our experience of nationalized industries shown that production iri such industries costs much more then in the case of those under private control? The only remedy in. connexion with the coal industry is to produce at a cheaper rate so that we may in the future export large quantities of coal as we were doing until recent years. Our export trade has dwindled because we cannot sell our product sufficiently cheap in the markets of the world. The only way to restore our trade balance is to bring down the cost of production. The nationalization of the coal mines will not have that effect-. At a time when the country is economically sick, the Government proposes an alteration of the Constitution, but the remedy is equivalent to a mustard plaster on a wooden leg.
The last paragraph in the Prime Minister’s statement, to which I referred in my opening remarks, is somewhat belated. The co-operation suggested is that which the last Government sought at the Premiers’ Conference held in 1929, and which was denied us by honorable senators opposite. Our motives were misrepresented and misconstrued in such a way at the last general election that the Government was defeated. The late Government was anxious and willing to co-operate, and submitted definite proposals for meeting the crisis. Notwithstanding this I say that all of us are willing and anxious to co-operate with the Government if it will show a genuine and frank desire to face the situation and tell the people the truth however unpleasant it may be. If it will apply the proper remedy it will find not’ only that every honorable senator on this side of the chamber will support it; but what is more, that the people of Australia, knowing the whole of the facts, are sufficiently intelligent to make the necessary sacrifice, which every one in this community will eventually have to make, to meet the situation that is confronting them.
Senator Sir WILLIAM GLASGOW (Queensland) [4.19]. - In the ministerial statement delivered by the Bight Honorable the Prime Minister (Mr. Scullin) in another place, and which was read in this chamber by the Vice-President of the Executive Council (Senator Daly), reference is made to the economies to be effected in the Defence Department, which it was my responsibility to administer during the regime of the late Government. In referring to that department, the Minister said -
Tim whole administration of the Department of Defence is now being reviewed with the object of effecting economies consistent with efficiency.
If that is to be done, I trust the Government will give the matter more consideration than it did in connexion with the proposed economies for this financial year. It has been said that expenditure is to be reduced by substituting the voluntary for the compulsory system of military training. The voluntary system will be more expensive than the compulsory system, because of the more expensive uniform which has been adopted. The compulsory system had been established for about eighteen years, during which period it reached a state of “ efficiency never previously known in this country.
Department in 1927 the expenditure on defence from loan and revenue was £5,486,399 per annum. The late Government’s defence estimates for the current financial year amount to £4,640,000, a reduction of approximately £846,000. That reduction was effected without any loss of efficiency, because, as Minister for Defence, I insisted that the training votethe most essential part of the system - should not be curtailed in any way. Another paragraph in the statement of the policy reads -
Proposals for the amalgamation of tlie Royal Naval College and the Royal Military College in a joint establishment at Jervis Bay arc being inquired into, it is felt that a saving in the very high cost of training naval and military officers can be made.
Maintenance of the Royal Naval College last year cost £04,750. As there were 52 cadets at the college, the cost worked out at nearly £1,250 per head per annum. The staff employed for the maintenance of the college was 14.’, or nearly three persons for every cadet. Similarly, with regard to the Royal Military I. College, the maintenance cost was £52,750 for 74 cadets, or more than £700 per head per annum. A staff of OS persons was employed for the 74 cadets.
Obviously, that statement, was made with the intention of discrediting the late Government and the two training establishments. The Government had in its possession a report of the Public Accounts Committee, which would have explained the apparently high cost of training naval and military officers. The Royal Military College at Duntroon was established for the training of staff officers under the compulsory training system recommended by the late Lord Kitchener. At that time it was estimated that the number of students in training would be 150. To-day, there is practically only one-third of that number in the college, so that the cost of training per head is proportionately increased. It is not always realized that in a military training college an academic staff has to be provided, in addition to the professional and technical staff. Moreover, a considerable amount of equipment is necessary for the efficient training of its students. At Duntroon there is an administrative staff which is not only responsible for the administration of the establishment, but also gives instruction in administration to the men in training. A sound knowledge of administration is an essential part of a military officer’s equipment; it is as important as tactical and military skill. An officer lacking a thorough knowledge of administration and organization would soon get his unit intoserious trouble. One of the first essentials of an officer in charge of Australian soldiers is a knowledge of the best way of handling his men; otherwise, he might as well stay at home in the event -of hostilities breaking out.
That the academic standard at Duntroon is high is recognized by the education authorities throughout Australia. Duntroon graduates are considered to have reached the same standard as those who have passed the second year at the various Australian universities.. The University of Sydney will accept any Duntroon graduate, into its third-year engineering course. The military subjects taught, at Duntroon cover a wide range: they include military art, tactics, artillery, signalling, military engineering, surveying, geometrical drawing, military law,, administration, machine guns, Japanese, topography, cavalry aud infantry. The teachers of those subjects are highly qualified officers. It will, therefore,, be seen that the number of instructors at a wellequipped military college is considerable, and that the cost of training students is necessarily high. Every cadet who enters the Royal Military College is supplied with the whole of his clothing requirements, and is maintained by the department. That is a democratic principle with which I feel sure honorable senators opposite will agree. Moreover, no fees are charged to them’ for their training. The provision of clothing to students, and the cost of their maintenance represents about one-fifth of the total expenditure of the college. An examination of these facts will explain the comparatively high cost of running the establishments. But, perhaps, a better indication would be gained by comparing them with similar institutions elsewhere. Duntroon is modelled on the college at West Point in the United States of America. If there was a full’ complement of students at Duntroon, the per capita cost would ‘be about one-half of that at West Point, notwithstanding the more generous treatment of the students at Duntroon. Possibly, the Government, will find it possible to reduce the expenditure on these colleges to some slight extent, but I warn it against so reducing costs that their efficiency will bc impaired.
In order to emphasize that an efficient staff of trained officers is the basis of our military organization, I desire to quote the opinions of some of our prominent military leaders. General Sir Harry Chauvel, Inspector-General of the Military “Forces, said -
That thu Duntroon establishment has already justified its existence there can be no shadow of doubt. To say that the 158 graduates who .served in the late war had any bearing upon the 300,000 men who comprised the Australian Imperial Force would seem ridiculous, yet most, if not all, divisional, brigade, or regimental commanders will bear nut my statement that this was so. The high ideals established at the college by the late General Bridges were a potent influence which made itself felt throughout. In peace the same influence is being gradually spread throughout the Citizen Forces to-day.
This high opinion of the graduates of the college, arid the necessity for the maintenance of this establishment was supported by General Sir John Monash in the following words : -
As a soldier, I regard the naval and military colleges as the sheet anchor of the whole of our organization. In the 4th Brigade I had a considerable number of Duntroon graduates under my command; I took the whole of the second class from Duntroon with me, and they comprised a great portion of my officer force and acquitted themselves gloriously. Many of them reached senior rank. I know the supreme importance of maintaining educational establishments such as that at Duntroon, in order to provide the nucleus of trained leaders, without which no defence organization is possible.
It is the most essential thing; it is more essential than our military headquarters. If one of those two had to be sacrificed, I would sooner sacrifice military headquarters. I say, emphatically, that if the college is destroyed, we destroy also what hope Australia now has of defending herself.
General Sir Brudenell White said of them -
The opinion I formed of them, and one that was confirmed by many of the senior officers, was that they were invaluable, and in most cases the backbone of their units.
I look upon Duntroon so in udi as a foundation that I should place its expenditure almost before anything else.
Combination of I he 1,co College ax thru el unit.* - The -per capita cost would bc reduced by increasing the number of students. Bringing both training establishments under one control and administration would probably effect some economy. Advantage could be claimed for the union of the services.
Arguments against - The carefully considered report of the committee which dealt with this matter shows that the cost of transfer would not be less than £50,000. This makes the scheme impracticable. The disparity in ages is a further and difficult barrier. Moreover, the ground around Jervis Bay is unsuited for military purposes.
In view of its financial consequences the experiment of such a union would not bc sound.
I shall quote the headings under which that committee reported, in order to show honorable senators how thoroughly it investigated the matter: -
Officers for sea, land, or air forces to receive four years’ education at Jervis Bay, entering at the same agc, viz., thirteen years.
Proposal to close both cooleges and train naval and military officers outside the Commonwealth.
Proposal to close Duntroon College and select officers for the military forces, as was done in pro-college days by a qualifying educational examination.
Combination of university and military training.
Transfer of the Naval College from Jervis Hay to Osborne House, Geelong.
Under each of those headings the committee rendered a definite report. It also gave reasons why both colleges should be retained, and I think that it is desirable that those reasons should be placed on record. They are -
The standards of the army in Australia have been raised by the existence of Duntroon. In exactly tlie same tests and examinations to which the officers of the British Army are subjected the Royal Military College graduate has invariably attained distinction. The fact has impressed the military authorities at Home.
The Royal Military College has unquestionably already an important place in Australian history, and is evidence of the growth of national spirit.
In regard to the last item I might say that at the present time there is a Duntroon graduate occupying the position of senior instructor at the Staff College at Quetta, India. That officer was specially asked for by the military authorities in India because of his special qualifications, which indicates that cadets trained ai Duntroon reach a very high standard of efficiency. The report continues:
The body of William Throsby Bridges, the founder and the organizer, and the first Commander of the Australian Imperial Force, lies at Duntroon.
The college fulfils national aspirations. It enables the absorption of military knowledge - tlie necessity of which is ever increasing - with a due regard to Australian character and conditions.
Duntroon as originally established aimed at gradually building up the Staff Corps to an estimated ultimate establishment, and the replacement of wastage. Upon that basis it appeared able to absorb some 30 cadets annually for a considerable number of years ahead. The recent policy of retrenchment has contracted the aims of the college to replacement of wastage only, that is to say, an intake of some twelve to fifteen cadets annually. The stoppage of the New Zealand supply of ten cadets annually has been a contributing cause in the decrease of the number of students.
With a complete establishment the estimated cost per caput per annum, taking into consideration the reduced value of money, should not greatly exceed £500 - £600. This is practically the same as the per capita cost at less generous colleges elsewhere, and little more than half of the cost at West Point in the United States. With a reduced establishment the cost per head naturally rises, and with a less number than 50 probably ascends to £1*1.00. But such figures are not a sure index. The cost of maintenance of lands and buildings is annually recurring, and certain overhead charges remain stationary whatever the output. Moreover, it has to be remembered that the principles upon which the college is founded arc generous in the extreme. From the time of entry to graduation cadets are clothed and maintained entirely at government expense, a condition not applying to any other military college in the world except West Point.
But in any case cost is not a criterion. If war preparations are to continue, the most profitable expenditure possible is that upon the training and education of Australians who are to lead Australian soldiers. Judged by such a standard, the return from a military college, properly based and adequately supported, will ultimately be. out of all proportion to the sums expended. It is not too much to say that all expenditure upon the college was repaid by tlie war service of its graduates.
Judging from the teachings of history and modern experience elsewhere, if the college is now dispensed with it may be safely asserted that at some time it will have to be restored. The full establishment is required if the Defence Act is to romain operative in its entirety. Such restoration may not only be costly in money but in the nation’s life, and the responsibility of destruction is therefore a serious contemplation. No possible alternative will give the same results as the maintenance of the college.
I shall now read a small portion of the report by the Joint Committee of Public Accounts upon the expenditure on these two colleges. It is signed by J. E. Fenton, Vice-Chairman - the present Minister for Trade and Customs - is dated the 15th August, 1924, and states -
The committee was informed that the cost of training each cadet for the financial year 1923-24, calculated on the number of cadets in training on 30th June, 1924, amounted to £1,331 at the Royal Australian Naval College and £955 at the Royal Military College, of which £121 and £150 respectively represented, maintenance costs. It was estimated that if 160 boys were in residence at Jervis Bay the per capita cost would be reduced to £730 per annum, whilst a full complement at Duntroon, i.e., 150 cadets, would reduce the cost to less than £600 per head. In considering these figures, it must be borne in mind that the Australian Colleges have a particularly small entry, and that from the time of admission to graduation the cadets are clothed, maintained, and educated at the expense of the Government - conditions which do not apply at any similar institution in the world.
Inquiry by the committee elicited the fact that, even if these establishments were not in existence, the Naval and Military personnel employed thereat for administrative and instructional purposes would, with one exception - the Captain of the Naval College - he immediately absorbed in the Naval and. Military Forces of the Commonwealth. In neither case are members of the staff, other than the civil instructors, regarded as permanently engaged on their present duties. The officers and men at the Naval College are liable to he transferred to a ship at any time, and the officers and men at the Military College are members of the Australian Permanent Forces on duty at that establishment.
Whilst referring to this phase of its inquiry, the committee desires to bring under notice the varying form in which the estimates of expenditure for the different activities of the Department of Defence are submitted to Parliament. Taking the Estimates for the financial year 1923-24 as an example: -
Divisions No. 59 and 60 - Royal Australian Naval College and hoys’ training ship respectively - include the pay of the whole of the naval and civil staff employed. Under division No. 65 - Naval establishments - there appear lists of naval personnel headed, e.g., “For duty at Naval Establishments, Sydney,” “ For general duty at Flinders Naval Depot,” &c, accompanied by the explanation: - “The following officers and men (sea-going) are also borne for duty, but are included for pay under Division No. 56 Permanent Naval Forces (seagoing). Rates of pay and allowances as prescribed in financial regulations.” Division No. 70 - Royal Military College includes only the pay of the civil and executive officers; the pay of the military staff being included in Division No.69 - Permanent Forces. The Com mandant is borne as a member of the Australian Staff Corps, whilst the pay of other officers and men is shown under their respective units such as Royal Australian Artillery or Royal Australian Engineers.
When the committee inquired the reason for the different treatment of the colleges, it was informed that in adopting the present form for the Estimates the practice of the British Parliament had been followed.
During the course of its inquiry the committee learned that several alternative schemes, which, it was thought, might reduce the cost of these colleges, had been considered, and that a special committee, comprising Professor Sir T. W. E. David, Major-General Sir C. B. B. White, and Captain G. F. Hyde had been appointed by the Government to report upon these colleges with a view to ascertaining whether the cost of training cadets could be reduced. (The report of this special committee, dated 6th July, 1923, was laid on the table of the Senate on the 7th August, 1924, and was presented to the. House of Representatives on the 13th August, 1924).
The principal propositions which have been considered have been: -
This was not regarded as a practicable suggestion, and would, moreover, entail considerable capital expenditure.
If the actual cost of education and maintenance were to be charged, it was considered that very few students would be forthcoming, and that unless a substantial fee were imposed the annual appropriation necessaray for the establishments would not be materially reduced. At the Royal Military College at Kingston, in Canada, the system of training cadets for civil life as well as for the military profession has been adopted with success, but appointments in various Government departments, other than defence, are also offered to graduates from this college.
If Duntroon were closed, one alternative would be to take advantage of the facilities offered by the various universities, where the first two years of training might be effected. To complete the military training, however, it would be necessary to have an establishment convenient to one of the universities, together with a suitable ground for manoeuvres and practical training. This scheme would necessitate payment by the Commonwealth Government of the university fees and provision for the maintenance of each student, and involve a loss of some of the capital expenditure already incurred at Duntroon.
It was suggested that a quasi-military training would be beneficial in the case of young men proceeding to take up appointments in the Mandated Territories, and for this purpose Duntroon was thought to offer special facilities.
At first glance this appeared to be a solution so far as the Royal Australian Naval College was concerned. The committee was informed that those boys who had entered the mercantile murine after the retrenchment at the college had been favorably commented on: but, owing to the number of ships laid up, the companies had difficulty in finding berths for their own apprentices and for the officers and engineers available.
Committee’s Observations and Recommendations.
Already during the brief term of their existence the prestige of the Royal Australian Naval College and the Royal Military College has been well established, not only in Australia but throughout the Empire, and the reputation won by the graduates, particularly during the war, has gained for these institutions a place in Australia’s history.
As a result of its investigations the committee is convinced that these establishments arc essential adjuncts to the defence of Australia.
Having regard to the small number of cadets at present being trained, the committee is of opinion that the colleges are being conducted efficiently and as economically as present circumstances permit. It must be remembered that if these institutions arc to be maintained certain overhead expenses have to be met, and the annual cost of training each student naturally varies according to the number being trained. The entire cost of their upkeep represents less than 3 per cent, of the total defence expenditure.
Evidence was strongly in favour of these establishments being kept, if possible, purely for the purpose for which they wereoriginally intended. The committee, however, recognizes that in these establishments the Commonwealthhas valuable assets, which could be utilized, not only for the training of those who will eventually lead its naval, military, and air forces, but for turning out welleducated youths who willbe able to serve their country in civilian life. It is considered, therefore, that attention should be devoted to the question of obtaining the best possible value for the money being expended on these colleges. The admission of paying students would not materially reduce the annual cost, unless the fees were unduly high, and would, moreover,, mean a radical departure from the principles upon which the colleges have been founded.
After considering many alternatives, the committee is of opinion that the best results would be achieved by admitting annually more students than the number of graduates estimated tobe required for the Services - even at present it is admitted that the number of boys being accepted is less than requirements - and, whilst regarding each of these students as potential naval, military, or air officers, the final selection would depend upon aptitude displayed and progress made throughout their course, as well as by a final qualifying ex a mi nation. The greater number of boys thus admitted would overcome the present wellfounded objection to the segregation of small numbers oflads, and stimulate healthy rivalry both in study and sport. Such a system would give the authorities a wider field for final selection, and enable a boy’s natural inclination to manifest itself.
In the case, of students not selected for a naval or military career, but who are nevertheless anxious to follow avenues of similar interest, the Citizen Forces would afford the opportunityto make use of the training they had received.
The committee that made this report comprised the following - Senators Benny, Bolton, Buzacott, H. E. Elliott, J. D. Milieu, and Needham, and Messrs Bay ley (chairman),Fenton (vice-chairman), Hunter, Makin, Marks. Paterson, and West, members of the House of Representatives. Mr.Fenton, as vice-chairman, signed the majority report. The only dissentient was Mr. Makin, who expressed the opinion that the alternative proposal to utilize the facilities available at the universities for educational purposes, and give the necessary technical and military training at the barracks or other permanent land defence establishments, would adequately and satisfactorily meet the requirements. I earnestly hope that the Government will consider the whole position carefully before it interferes with the organization of either of these establishments. If the students at Duntroon were removed to Jervis Bay, the only saving would be in the administrative costs of the college, because, asI have already pointed out, the boys attending the two colleges are of different ages. The naval students, being much younger, require instruction entirely different from that of the lads attending the military college, whose training necessitates the employment of university professors. The provision of 50 horses for the training of Duntroon students in cavalry and military work adds greatly to the cost of that institution. Sir Brudenell White, Sir John Monash, and Sir Harry Chauvel agree that the two colleges are an essential portion of our defence system. Having regard to the small number of students at both colleges, and the fact that the costs include their clothing and maintenance, it is not unduly high.
Another matter to which I direct attention is the following indication of government policy in the ministerial statement presented to the Senate yesterday :-
Thu Government has devoted much atten- tion to the necessity for stimulating the export of primary products. Important discussions have taken place with representatives of the wool industry, and we are watching willi interest the policy now being put into effect, which, it is ‘hoped, will stabilize prices.
I applaud the Government for not, having taken steps to interfere with the arrangements for the marketing of our wool. The fact that prices are at present at a low level does not suggest the need for government interference. Experience has shown that, once a government interferes in the marketing of any product, the producers of it inevitably suffer. “We all know what happened to the owners of rubber plantations in the Federated Malay States a few years ago, when the British Government, with the object of stabilizing prices, issued instructions that growers must “ restrict their output. For a time prices rose from 9d. to ls. 9d. per lb. As the Federated Malay States supplied the bulk of the world’s market, action to restrict production there undoubtedly stimulated prices temporarily. But the rubber-growers in Java, not being governed by the embargo, did not cease tapping their rubber trees, and, of course, they got into the market and enjoyed the full benefit of high prices. The situation created about that time also induced men like Mr. Henry Ford- to make inquiries as to the possibility of establishing rubber plantations in South America. If their efforts are successful there will be a substantial increase in world production, with consequent lower prices. Eventually the British Government was forced to remove the restriction it had imposed on the Federated Malay States and almost immediately prices for rubber fell from ls. 9d. per lb. to 8£d. or 9d., with the result that those unfortunate people who, during the boom had invested in plantations, lost very heavily.
We are informed also that the Government contemplates taking a note of the growers of wheat with regard to the establishment of a compulsory wheat pool, on the understanding that, in co-operation with State governments, the Commonwealth will guarantee growers 4s.- a bushel. I urge our wheat-farmers to beware of any such proposal. If the Commonwealth Government is a party to any system of guarantee it will necessarily expect to exercise some authority over the marketing arrangements. We all remember the scam’.als in the early history of the wheat pools in South Australia. It is to he hoped, therefore, that the Commonwealth Government will keep its hands off the wheat industry.
As honorable senators know, I am interested in beef, so perhaps it would not be out of place if, at this stage, I reminded them of what happened during the war. Immediately following the outbreak of hostilities the British Government cabled to the Commonwealth and Queensland governments, with the object of making contracts with Queensland beef producers to sell “tha whole of their surplus beef to Great Britain for the period of the war. The producers were consulted and agreed to sell at 4£d. pei’ lb. That was not an exorbitant price, and by no stretch of the imagination could any one suggest that the beef producers of Queensland were profiteering. They honored their contract during the full period of the war by selling the whole of their surplus product to the Mother Country, at the price stated. But the Queensland Government was not so punctilious about a contract which it had persuaded the cattle owners of that State to make with the British Government.
To placate a considerable section of its supporters, prior to an election, the Queensland Labour Government commandeered all the meat it required for the State butcher shops at 3£d. a lb., thus robbing Queensland beef producers of nearly lid. per lb. on their contract with the British Government. The Federal Government also penalized the producers by imposing a war-time profits tax on their surplus profits. It was only right that during the war the British Government should have obtained the beef supplies at a reasonable figure, and perhaps all would have been well with the producers had not some wiseacres informed the British Government that there was going to be a meat famine. As a result, all the cold storage accommodation in Britain was choked with beef. In the course of time the inevitable .glut occurred, and when decontrol of beef took place, prices for cattle fell much below a remunerative level, with the result that Queensland growers were forced to sell at unprofitable prices.
From what I have said, I am sure that honorable senators will realize that Government interference with any of our primary industries always has an adverse effect upon them. I therefore urge our wheat farmers to retain control of their product at any cost. In my opinion, they would be better off without a guarantee, since this would mean Government interference with the marketing of the product. When the price of beef was unprofitable, Australian wool-growers who had cattle on their stations sold them, and gradually the numbers got less, with the result that prices rose and cattlegrowing is now a profitable industry. Canadian cattle-growers were hard put to it to know how to get rid of their surplus cattle. Because of the prevalence of the foot and mouth disease in the Dominion, the British Government would not allow Canadian live cattle to be imported into Great Britain, and it was not until the Canadian Minister for Agriculture visited London and made representations to the British Government that an agreement was arrived at that they might he imported into the British Isles under certain conditions. That agreement, however, did not operate, because the unprofitable price of beef led to such a reduction in the herds of the
United States of America that the Canadian cattle-growers found a ready market for their cattle by driving them over the border into the United States of America. To-day, the price of beef makes the industry a profitable one, and that result has been brought about by the ordinary law of supply and demand. The only government assistance the cattle-growers of Australia have had was that for two years they were given a bounty of a farthing per lb. on the quantity of beef exported. But that assistance was absolutely useless to them. The industry has re-established itself without Government intervention and the same will, happen in regard to wool and wheat. Now that its price is low, wool can compete with all the substitutes that came into use during the period in which its price was high. I, therefore, congratulate the Government on the fact that it is keeping its hands off the wool industry. I hope that it will also keep its hands off wheat, and allow those who know their jobs to provide a solution for the present problems.
– The reference in the ministerial statement to the need for the development of primary industries for the production of exportable wealth is the most abject admission that has ever been made by the leader of a government of the failure of the policy which he professes to uphold. In his ministerial statement, as also in the appeal he recently made by wireless to all wheat-growers of Australia, the Prime Minister has declared that wheat is the only primary product of Australia that can be exported at a profit, although the secondary industries of this country have been bounty fed and bolstered by a high tariff wall for a greater number of years than I can remember. I can recall statements made long before federation that our industries required some little protection during their infancy. Those statements were made nearly 30 years ago, but apparently our secondary industries are still in their infancy, suffering from infantile paralysis to a very high degree ; because it would appear from the policy of the present Government that we must keep on giving them higher protection than ever. While this is being done the Prime Minister picks out the wheat-growing industry as the one that is to be called upon to make a special effort to get the country out of its present troubles. One would really think that it was the wheat-growers who, in the opinion of the Government, had brought Australia into its present bad condition.
– I am glad to hear that admission from the Minister, because if I am drawing a wrong conclusion from the Prime Minister’s wireless appeal, 1 am pleased to be corrected. 1. want to emphasize the fact, however, that of all the primary producers of Australia, the present appeal is made to wheat-growers alone because, as the Ministerial statement of policy says, it is, of all the primary industries of Australia, the one that most readily responds. If the Prime Minister really knew very much about wheat-growing, he would realize that it, is not quite so easy as it seems to suddenly increase by a million acres the area under cultivation. Each State has brought scientific means to its aid to educate its farmers in better methods of wheat-grow- ing and cultivating, with a view to increasing yields, and every one who has any knowledge of the subject knows that in ordinary circumstances it is not possible to sow an extra million acres of land without preparation. When, therefore, the wheat-growers of Australia are asked to increase their acreage by at least a million acres, they are expected to indulge in a pure gamble. If the season is successful and the rains fall at the right time, a very good return, may be secured from that extra million acres, but in ordinary circumstances in Australia today, at least a year’s preparation is required before land can be farmed with any success or hope of success. Mr. Scullin therefore is not only not very logical in his appeal, but he is also asking the farmers from their present depleted resources to embark upon a gamble that will cost them at least £2,000,000; because it costs in Australia at least £2 an acre to plough, cultivate, and sow ground * and find the necessary fertilizers without making any allowance for the cost of harvesting. If a crop is secured, well and good ; but if the crop fails the farmer is worse off than before.
That, however, is not the point I wish to make. What I want to say is that of all the industries in Australia the primary industries, and particularly wheatgrowing and gold-mining, hase been most heavily hit by the “ great national policy of Australia,” that of protection, which is being pushed to its extreme limits by the present Government. The right honorable the Leader of the Opposition (Senator Sir George Pearce) has dealt very fully with the costs of production, and shown that while the price of Australian products has steadily receded since the war, our costs of production have maintained the war level. I am reminded of the old story of the clever boy at school who could easily master any of the sums in the school book, and the schoolmaster made up his mind to give him one that would tax him. The schoolmaster said, “ There is a cat in a well 20 feet deep, which can climb up 5 feet in a day, but falls back 6 feet every night. How long would it take the cat to get out of the well?” The boy set to work with his slate and when he had filled both sides with his calculations, the schoolmaster said, “Well, have you got the cat out of the well yet?” The boy replied “No, but if you give me another slate I think I can have her in hell in five minutes.” The Australian wheatgrowers seem to be very much in the position of the cat in the well. The price of wheat may climb to 5s., but .the cost of production drags them back to the extent of 6s. And the Prime Minister peeping over the edge of the well, looks down and pleads with the wheat-grower to get to work and produce more wheat. I quite agree with the appeal made in the statement of Ministerial policy that all sections of the community should get together and do their utmost to produce a result that is very desirable: that is, to balance the ledger. But why should the appeal be made to one particular section of the people and not to all? That is the point I wish to emphasize.
As Avas foreshadowed by a supporter of the Government some months ago, it is proposed to have a compulsory wheat pool. We had experience of governmentcontrolled wheat pools in Australia at a time when they were absolutely necessary in the national interests.
Eoi1 instance, during the war period a pool was a national necessity, but to-day it is in the nature of a socialistic experiment. I want to give a little of the experience of Western Australia in connexion with the wheat pooling efforts of Australia. From our point of view the pools were not altogether a success.
– The honorable senator is speaking of a Government pool.
– I have already admitted that the pools to which I refer were a national necessity.
– The present proposal is for a growers’ pool.
– It is supposed to be, but goodness knows what it will turn out to be in the end. The people of Western Australia first came into touch with the people of Eastern Australia and their methods in 1924, when unfortunately a drought was prevailing. We had sufficient wheat in Western Australia to provide seed for the coming season, but were compelled to import for the requirements of local flour millers. It was then we first came up against the duty on wheat. We asked to be relieved of the need for paying the duty of ls. a bushel on wheat, but were compelled to pay it, although later on when there happened to be a shortage of oats in the Eastern States at a time when Western Australia had a bumper crop the duty on oats from New Zealand was lifted, and the people of Western Australia lost an opportunity to get a little of their own back again. Later on during the pooling period the price of wheat for local consumption was fixed below export parity. I am not complaining that the price fixed was niggardly. In the circumstances, perhaps it was fair; but I emphasize the point that it was considerably below export parity. What happened? New South Wales, which, I think, had to bear the stigma of having the most unsatisfactorily managed wheat pool in Australia at that time, gristed every bushel of its available wheat and kept up its export trade at export -parity, whilst the people of Western Australia were compelled to supply local needs out of wheat sold at local consumption prices. The people of Western Australia were at that time affected to that extent by a pool controlled in Eastern States. I am giving that as one of the reasons why the
Western Australian growers may look unfavorably upon a government controlled pool embracing, the whole of Australia. I agree with what. Senator Sir William Glasgow has. said concerning governmental control. I do not care what government it is - I do not accuse any government or government, officials of dishonesty - but whenever a government handles a commercial proposition the officials and others charged with the responsibility of its control consider that, as it is a government concern, there is no necessity for the careful administration that is exercised in connexion with a private business. Everyone knows that private commercial concerns ure not managed in the same way as governmental undertakings; if they were it would not be long before they would be in the insolvency court. While I am prepared te support the legislation to be introduced to provide for taking a poll of the wheat-growers on the question of a compulsory pool, I shall want to know something more concerning the Government’s proposals before I am prepared to give them my support.
– Co the honorable senator’s comments apply to a pool controlled by the growers?
– If this pool is to consist of watertight compartments, under which the States will control their own business and handle the wheat they produce, with a certain amount of indirect control by the federal authorities in the matter of selling, a good deal of my objection may be removed. From what I have said it will be seen that the wheat-growers of Western Australia are more capable of efficiently handling a wheat pool than those in any other State. When all the other States have more or less failed the Western Australian people have successfully handled a voluntary wheat pool ; that has been admitted by everyone who has come in contact with its management. T would be sorry to see a pool under the sole control of any government. As the Commonwealth and State governments are to be associated in the guarantee I cannot imagine that they will leave the entire management of the pool to the growei’3 concerned. The last thing that this or any other government would do would be to make itself responsible for financing a pool under the sole control of the growers. I do not think that that is likely, and I should like to know more about the proposal before I give it my unqualified support.
I propose now to make a brief refer- ence to the gold-mining industry. That industry assisted the early development of Australia to a greater degree than did any other industry. Unfortunately, the gold-mining industry, which has declined during recent years, is suffering more in consequence of the burdens placed upon it by various governments, and particularly the present Government, than from any other cause. Every effort should be made by the Government to increase the output of gold, in order not only to find employment for our own people, but to correct the adverse trade balance that is causing everyone a tremendous amount of worry. I am sorry no mention is made of the gold-mining industry in the ministerial statement, but I do not know if the omission is intentional or otherwise.
The Leader of the Opposition (Senator Sir George Pearce) referred to the unfortunate position which has arisen in connexion with the coal-mining industry. I do not suppose that there are many countries more richly “ endowed with coal deposits than Australia, and in ordinary circumstances there should be no country where coal could he more easily -obtained and profitably marketed. Notwithstanding this the tremendous potential source of wealth which we possess is a debit instead of a credit in. the national ledger. This and other factors make us feel that the Government is only half-heartedly attacking the problems confronting us, particularly when our financial position is such that it has called another branch of production to its aid. It should have urged the coa7 and other producers to do what the wheat-growers have been asked to do. The wheatgrowers who are not hampered by the limitation of hours imposed by arbitration courts have to carry on their work even if they barely get “ tucker “ as a
result of their long hours of labour. The wheat-grower who is always well away from the public eye, and has been willing to do so much in the past, is now asked to do a little more.
– To be sweated a little more.
– Yes. I now wish to refer to the constitutional proposals of the Government concerning which we have not received any definite information, except that it is intended to ask the people for additional industrial powers. On four different occasions - the last as recently as 1926 - the people of Australia rejected a proposal placed before them for increasing the industrial powers of the Commonwealth Parliament. I do not know whether their decision was right or wrong. I am merely stating a fact. The most recent refusal was, as I have said, in 1926 ; but in October, 1929, the electors most decisively rejected a proposal for the Commonwealth to relinquish its present industrial powers and hand them over to the States. In the one instance, the people voted solidly against increasing the industrial powers of the Commonwealth, and, in the other, with equal force opposed the Commonwealth relinquishing those powers. It would, therefore, appear that if the people want anything at all in this regard it is that the position should remain exactly as it is to-day. That is the only way I can interpret the votes recorded on the occasions I have mentioned. “When we study the slender reference to industrial matters in the Constitution, we can come only to the conclusion that its framers, thirty years ago, never intended industrial matters to become a major question for the attention of the Commonwealth Parliament. The brief reference in the Constitution was included, I understand, by a majority of only one vote. Every Government that, has occupied the Treasury bench since the inception of federation would have been, saved a tremendous amount of trouble if all reference to industrial matters had been omitted.
– But times have changed.
– They have. Speaking from memory the reference to industrial matters was embodied in the Constitution at the instance of the South Australian delegates, owing to the fact that Broken Hill, which commercially belonged to South Australia, is geographically in New South Wales. The Port Pirie smelters, which are an integral part of the Broken Hill mining concerns, are also in South Australia.
– The smelters were not established at Port Pirie at that time ; the smelting was done at Broken Hill.
– I thought that they were. It would appear from what has occurred in the past that it is the desire of the people that conditions should remain as they are. It has also been freely stated that the Government intend to bring down a proposal to dispense with a referendum in connexion with proposed amendments of the Constitution. If an affirmative vote is recorded on that question the Commonwealth Parliament will have power to amend the Constitution when, and as it thinks fit. I sincerely trust that the Australian people will not grant this or any other Government such o far-reaching power, because once that power is taken out of the hands of the people the Constitution will become the “ football “ of party politics in this Parliament. It would be only natural for the party in power to amend the Constitution to suit itself, and, when it was displaced, for the succeeding Government to restore the position which existed before the change, or to make any other amendments it thought necessary. The Constitution was drafted for the people of Australia before there was a Commonwealth Parliament. It is their Constitution, and my contention is that the people should retain the power to amend the Constitution as they think fit.
– The people have the power to make a change of government.
– I know that. Attempts have been made to amend the Constitution from time to time, and I suppose further efforts will be made. Parliaments and governments come and go, but the right to amend the Constitution, which belongs to the people, should not be taken from them.
It is asserted in the ministerial statement that there is no doubt that the action of the Government in tabling tariff schedules embracing more than 300 items on which higher duties have been imposed, arrested, to a considerable degree, the growth of unemployment. I am glad to see that the Government does not claim to have entirely solved that problem. I direct the attention of honorable senators to the latest quarterly summary of Aus-“ tralian statistics, Bulletin No. 118, for the December quarter of 1929, on page 65 of which they will find the number and membership of unions and figures showing the percentage of unemployed. In the first quarter of 1929 that percentage was 9.3, whereas for the fourth quarter of that year it was 13.1. The tariff schedule was introduced during the fourth quarter of 1929, but it does not appear to have arrested the growth of unemployment.
– Does the honorable senator think that the effect of the tariff would be evident in the quarter in which it was introduced?
– The figures 1 have given are the latest available. The tariff schedule was tabled on the 22nd November, 1929, and operated for about one-half of the last quarter of that year. During that period unemployment was higher than at any period since 1924.
– The higher the tariff the greater the unemployment.
– High import duties do not- prevent importations, for. despite our existing high tariff, goods continue to flow into this country. The Government, in the statement before us, admits that one of the difficulties confronting it is that of finding some means of stopping importations. The imposition of higher import duties tends to raise prices. Those increased prices are, in turn, an inducement to manufacturers overseas to send their goods here. Local manufacturers could stop imports almost immediately if they made up their minds to do so j but unfortunately their greed is such that every time import duties are increased so are the prices of their goods raised. Solomon, who is regarded as one of the wisest of men that ever lived, left it on record that there were four things that were never satisfied. I shall not enumerate them, Mr. President, because I am sure you are awareof them, but I feel confident that if ‘Solomon were here to-day, he would add the Australian manufacturer to his list of those things that never are satisfied and never will be satisfied. As far back as I can remember Australian manufacturers have been seeking more and more tariff assistance, but although their requests have been granted they still claim that it is necessary to ask for more protection. Compared with the Australian manufacturer, the horseleech’s daughters, crying, “ Give, give,” were but infants in swaddling clothes. Local manufacturers have matters in their own hands, but their desire to wring more and more out of their fellow Australians is the reason for our heavy importations to-day.
In the concluding part of the statement of policy the Government suggests that all sections of the community should cooperate to improve conditions. It has directly called upon the wheat-growers to make their contribution, but I wonder if it will call upon other sections of the community to do the same. To what extent will the manufacturers of this country be asked to assist in meeting our oversea interest bill, as some slight return for the assistance granted to them? Unless the Government is prepared to ask them to contribute to the general weal the concluding part of the statement is farcical, for otherwise the Government is asking one section of the community to pay for the sins of the whole of the people.
.- Any one who listened to the excellent speech of the Leader of the Opposition ( Senator Pearce) must have been impressed with the frank manner in which he discussed the problems confronting Australia. His statements must have carried weight even with his political opponents. Every thinking person, in Australia must realize that our financial, economic and industrial difficulties to-day are greater than they have ever been in the history of our country. Although I shall be no party to any factious opposition to the Government’s proposals, I shall criticize them if, in my opinion, they are not in the best interests of Australia, notwithstanding that, in my opinion, they may be brought forward with the best of motives. The first paragraph in the statement of policy which arrested my attention was that in which it is stated -
It would be a policy of despair to declare that costs ofproduction and development are too high to permit of theexpansion of our industries.
The real and, indeed, the only cause of the difficulties confronting industry is the high cost of production. That refers particularly to our primary industries. The Government says that it desires to encourage primary production, but its statement of policy contains not one word regarding the cost of manufacture in Australia, nor does it offer any advice to the people to give of their best. If every individual in Australia could be brought to realize his responsibility for Australia’s future, and could be induced to give of his best to his country, there would soon be very little unemployment, and in a few years our economic problems would be solved.
SenatorRae. - The honorable senator is asking for the millenium.
– Is one asking for the millenium when one asks that the people of Australia should work? Unfortunately, there is a disinclination on the part of many Australians to do their best. That is largely because everything has come to them so easily. One is appalled to find that, in spite of the many blessings and privileges for which we have not had to fight, so many people are not prepared to do their best for their country in its time of trouble. Such base ingratitude is deplorable.
– What nation has a better record? Have we not fought for our privileges?
– We have fought for nothing.
– That is a libel on Australia.
– We are beholden to the Mother Country for our present security.
– Australia has produced the greatest scientist in the world.
– That may beso; but the fact remains that instead of our having to fight for our existence it is preserved . to us by the Old Country. Senator Carroll contrasted the unemployment in the last quarter of 1929 with that of the first quarter of that year, and pointed out that, notwithstanding the imposition of higher import duties in November, unemployment had increased. I do not say that the effect of the tariff schedule on unemployment would he noticeable so soon after its introduction, but it might be well to remind honorable senators of the reason for the great increase in unemployment last year. One reason was that in the early portion of 1929, when industrial strife was rampant in Australia, members of the Labour party did not do their duty. Instead of attempting to quell the timber workers’ strike, members of that party who now occupy prominent positions in this country, urged the men to continue on strike, telling them that it was better to be half starved than to accept the award of the court. That was the beginning of the wave of unemployment that has since swept the country, for, unfortunately, the effect of that strike was not confined to the timber industry. Week after week, as that struggle continued, the volume of unemployment increased. Iam discussing this matter frankly as the Government has invited us to do. It is as useless for any government to ignore facts as it is for an ostrich to hide its head in the sand to avoid danger.
– The timber workers’ strike was one of the finest fights the workers ever waged.
– It was the cruellest thing ever inflicted on the workers by those who led them. It was, primarily, the cause of at least 75 per cent, of the existing unemployment. I could take Senator Rae to Sydney, of which city he is a resident, and produce before him half a dozen fine, sturdy young men who are seeking work in a trade which is dependent, to some extent, upon the timber trade. Last year those men wore out of work for nine out of twelve months because of the timber strike, and even now they are working only intermittently. It will be a considerable time before their industry regains a normal condition.
I believe that there is only one course to be adopted to bring about a better position in Australia. The men and women of this country must understand clearly that the future of Australia depends upon them individually, and that they must be prepared to produce to their fullest capacity, to give a fair day’s work for a fair day’s pay, instead of taking heed of the insidious propaganda that has resulted in a contrary condition of affairs. All parties must co-operate. I should like to see their representatives engaged in a round-table conference in an effort to solve the difficulty.
– If, as the honorable senator has suggested, we are a spoon-fed race, why not go to the people who are spoon-feeding us and urge them to settle the problem?
– It is impossible for Australia to rear an optimistic and virile community while people are compelled to do as little as possible.
– What about the people who do nothing at all ?
– I have no time for parasites. I shall deal briefly with the new tariff that has been imposed on the people of Australia. If ever there was an unjust imposition placed upon the people of this country, it was the tariff schedule introduced in November, 1929. I shall quote some of the questions that I placed upon the notice-paper to-day, and the replies that I received. I hope honorable senators will take notice of my remarks. I asked the questions because, after full consideration, I believed that the Government had no time to prepare this tariff schedule between the date on which it assumed office and the date of presentation of the schedule. This is the first question that I asked : -
Was the tariff schedule tabled in the House of Representatives in November last prepared by the Minister or officers of his department or by any officers of the. Public Service? If not, by whom was it prepared?
The answer was -
The tariff schedule referred to was prepared by the Minister in conjunction with the officers of the department.
My next question was -
Were the items contained in the schedule given full and detailed consideration by the Government or Minister before he took action to make the new duties operative?
The answer was, “ Yes “.
My comment on that is that the PostmasterGeneral was interviewed by the press at Burnie, Tasmania, on the 8th
January last, and asked to make a statement. In that statement he said that the tariff had been hurriedly prepared for presentation to Parliament and the Government had not had time to give it extended consideration. When I read that statement. I felt it was my duty to ask my very pertinent question. I am confident that, notwithstanding the reply that I have received, the Government had not sufficient time to give that lengthy schedule full consideration before tabling it. That is why I said, advisedly, t hat the tariff has been “imposed” on the people of Australia. My next question was -
How many of the items contained in the new tariff schedule were referred to the Tariff Board for investigation and report thereon before the new duties were made operative?
What were the items so referred?
On what items in the new schedule were reports received by the Minister before the new duties operated ?
The answer was -
Tariff Board reportshad been received on many subjects before the new duties were made operative.
That is an evasive answer. Honorable senators will remember that yesterday the Minister presented certain reports from the Tariff Board on a number of items. I have them here. They number twenty. I have, in addition, two reports that I received before Parliament adjourned last year, the only two that were then available. That makes a total of 22 reports out of 220 items. I am confining my remarks to the November schedule. Yet the reply of the Minister was that many items had been reported on. My last question is the most serious one. I asked -
If the bulk of the items in the tariff schedule under notice were not referred to the Tariff Board and reports thereon were not received by the Minister before the new duties were made operative, has the Minister considered the legal position created by his action in making the new duties operative in contravention of the provisions of section 15 of the Tariff Board Act, which provides that the Minister shall refer to the Tariff Board for inquiry and report “the necessity for new, increased or reduced duties “ and that the Minister shall not take any action in respect of these matters until he has received the report of the board.
The reply that I received was -
There is no question of the legality of the new duties if Parliament ratifies the action taken by the Government.
That is not a proper reply to my question. To show that I was justified in asking it I shall quote section 15 of the Tariff Act. of 1921.
– I rise to a point of order. I donot wish unnecessarily to object: to irrelevant matter, but I submit that that now being discussed by the honorable senator does not come within the scope of the motion before the Senate.
– The tariff schedule is referred to several times in the ministerial statement now being debated.
– Senator Payne is referring to certain questions that he asked in this chamber, and is endeavouring to justify the asking of those questions.
– I do not think that the honorable senator is out of order.
– Section 15 of the Tariff Board Act of 1921 reads-
The Minister shall refer to the board of inquiry and report the following matters: -
– So that the Government is breaking the law?
– Exactly. To-day I took the trouble to turn up the debate that took place when a bill was introduced to establish the Tariff Board. The late Mr. Pratten, then a senator, and afterwards Minister for Trade and Customs, made a very strong endeavour to have the section optional instead of mandatory on the Minister. I opposed his amendment, and fought it very keenly. Litter, when the late Mr. Pratten was Minister for Trade and Customs, he recognized that Parliament had decided the matter, and that the Minister must refer all matters of alteration to the Tariff Board, and that he should not take any action in respect of any of those matters until he had received the report of the board. I make that point quite clear. It should afford Senator Daly food for thought.
I have taken a very great interest in a paragraph in the ministerialstatement which details, among other matters to be submitted to Parliament, proposals relating to the Seat of Government Act, a cotton bounty bill, and a shale oil bounty bill. I find a most serious omission. Honorable senators are aware that several years ago a scheme was evolved to establish an important industry in Tasmania - the manufacture of newsprint. After the company concerned had made preliminary negotiations with regard to the acquisition of land, the Prime Minister of the day, the Right Honorable S. M. Bruce, was approached and asked whether the Commonwealth Government would assist to establish the industry. After giving the matter very careful consideration, the right honorable gentleman made a. definite pronouncement to the effect that he was prepared to recommend to Parliament that assistance should be given to the industry. The industry has had a great struggle to become established, and a lot of money has been spent in connexion with the venture. I and many other Australians are looking forward to the time when success will be achieved. I understand that on more than one occasion the present Prime Minister has stated publicly that he would honour the promises made by his predecessor. I do not take for granted everything that I read in the press; but a short time ago I observed that this company had been given to understand, by a statement made by the Prime Minister early in the life of this Parliament, that a bounty would be provided to assist the industry. No reference to that is made in the ministerial statement, notwithstanding the claim that the Government desires to increase industrial activities in Australia and to make this continent self-contained. I hope that the omission is an inadvertent one. I cannot allow myself to imagine that the Government would deliberately make the omission.
– Tasmania will have a lot to thank the Labour Government for.
– I hope so. A very definite pronouncement was made by the present Prime Minister in Hobart last year. He then stated that if his party were returned to power he would not do as the then Prime Minister had promised - repeal the coastal provisions of the
Navigation Act - so that passengers would be able to travel in comfort between mainland ports and Hobart in the large oversea passenger steamships, but, that, on the contrary, he would tighten up the provisions of the act and make them more rigid. He did not know then who was going to win the Franklin seat, and he had no reason to think that the elected candidate would die on the date of the declaration of the poll, otherwise he would not have made such a statement as that. But, what happened? On the Monday preceding the by-election, the present Labour Government having been returned at the general election, there appeared a notice . in the Commonwealth Government Gazette, intimating that the coastal provisions of the Navigation Act were to be suspended from December to May to allow passengers the opportunity to use the more commodious steamships on the Hobart run during the tourist season, but on the following Thursday a special Gazette was issued reversing the Government’s decision. Unfortunately, information with regard to the special issue of the Gazette was not published in Tasmania until the day before the byelection. It is just as well to remember these things.
– Another confidence trick on the part of this Government.
– I have no wish to say anything nasty about this Government, but I cannot help reminding honorable senators of the attitude taken by the Prime Minister in certain circumstances.
I do not wish to enlarge upon what has already been said concerning the Government’s proposals in connexion with the wheat industry, but I urge extreme caution before any action is taken that is likely to jeopardize the industry. I can well understand that growers may be influenced by what would appear to be a temporary advantage under the Government’s scheme, but a temporary advantage may easily become a permanent disadvantage. It does not appear that the Government has given adequate consideration to the manner in which the scheme is to be financed. There was no reference to this aspect of the proposal in the statement read by the Leader of the Senate (Senator Daly) yesterday; this information had to be extracted from the Government by means of questions placed on the notice paper. I trust, therefore, that the scheme will be very carefully examined by every member of this chamber. “We shall have ample opportunity to deal with this matter when concrete proposals are before us. All I wish to say at this stage is that I realize fully how essential the wheat industry is to Australia, and how important it is that every effort should be made to bring down the cost of production.
Iri conclusion, I express the hope that the attitude of members of the party to which I belong towards the Government measures will convince not only the Ministry, but the people generally, that we propose to place Australia first in all our discussions, and do what we believe is best in the interests of the country.
Senator Sir HAL COLEBATCH (Western Australia) [6.10]. - I wish to avoid, as far as possible, touching on any of the ground that has been covered by previous speakers in this debate, but I fear that, to some extent at all events, I may have to speak of matters that have already been mentioned. Senator Pearce referred to the Prime Minister’s statement that -
Fundamentally wc are suffering from the effects of a world-wide depression accentuated Itv over-borrowing.
Whilst I agree with nearly all that the Leader of the Opposition said as to the effects of the world-wide depression, and whilst I also agree with him that, because our circumstances have been so extremely favorable, we have escaped more lightly than any other nation the consequences of the war, I propose to consider a little more deeply the result of our policy of borrowing. I do not believe that Australia’s troubles are in any way due to overborrowing. Our resources are so enormous that we might safely have borrowed even more than we have had we spent, it wisely. I am convinced that it is in the direction of extravagant expenditure rather than of over-borrowing that wo have gone astray. Senator Pearce said also that if there had been overborrowing the Commonwealth was not the guilty party, because compared to the States its borrowings had not been heavy. I am not in agreement with him on that point, for I find that; in 1922-23, the first year of the six-year period mentioned by him, Commonwealth expenditure on revenue account was £63,000,000, and in 1928-29, the last year of that period, it was £81,000.000 - an increase of £18,000,000 per annum in expenditure by the Commonwealth over a short period of six years. During that period there was no corresponding increase in population and no corresponding increase in national production. In those six years the population of Australia increased by only 600,000 persons, so that the expenditure per annum rose from £11 per head to £13 per head. Without analysing the figures relating to expenditure by the States. I have no doubt that in that field also there was a similar increase in expenditure, from revenue account as well as from loan account, without obtaining full value for it.
– Was not a considerable portion of the increase in Commonwealth expenditure due to war pensions ?
– I should think that the Commonwealth payments on account of war pensions were as great in 1922-23 as they were in 1928-29.
– Nothing like it.
– I invite the honorable senator, to study the official statistics for 1928-29 and compare them with the figures in the previous volume covering the years 1922-23. If he does so I feel sure he will find that there has been an enormous increase of expenditure in every department.
Sitting suspended from 6.50 to S p.m.
Private business taking precedence after 8 p.m.,
Notice of motion by Senator R. D. Elliott called on -
Motion (by Senator R. D. Elliott) agreed to -
That the notice of motion be postponed until Thursday next.
Notice of motion by Sena tor Lynch called on -
Motion (by Senator Lynch) agreed to -
That the notice of motion be postponed until Thursday next.
The following papers were presented : -
Arbitration (Public Service) Act - Determinations by the Arbitrator, &c. -
No. 43 of 1929 - Professional Officers Association, Commonwealth Public Service.
No. 44 of 1929- Commonwealth Public Service Artisans Association.
No. 45 of 1929 - Australian Postal Electricians Union.
No. 46 of 1929- Australian Third Division Telegraphists and Postal Clerks Union.
No. 1 of 1930 - Association of Draughtsmen, Public Service.
No.. 2 of 1930 - Arms, Explosives and Munition Workers Federation of Australia.
No. 3 of 1930 - Meat Inspectors Association, Commonwealth Public Service.
Lands Acquisition Act - Land acquired near Newcastle, Now South Wales - For Postal pu rposes.
Land Tax Assessment Act - List of Applications for Relief from Taxation during the year 1929.
Senator Sir HAL COLEBATCH (Western Australia) [8.2]. - Before the adjournment for dinner I was referring to the increased Commonwealth expenditure on revenue account during the last six years, but I do not wish it to be understood that I was speaking in a critical spirit. I am entirely indifferent as to the reason for that increase. I have looked through the Statistician’s figures, and find that the increase is in every department of state from beginning to end. I understand that it is the desire on both sides of this chamber to look facts squarely in the face, and I wish honorable senators to look squarely in the face of the fact that in 1922-23 the expenditure of the Commonwealth on revenue account was £63,000,000, whereas in 1928-29 it was £81,000,000, an increase of £18,000,000 within, the six years, although in the meantime there has been no corresponding in crease in population, or in the volume of our products, or in the development of our resources. This extraordinary expansion in the federal, as well as the State, civil services is, perhaps, one of the most striking illustrations of extravagance in Australian public life.
When we come to the matter of the expenditure of loan money we have to remember that, in the first place, this money - I am speaking now of money borrowed by the States - is brought to Australia in the form of goods, and at the very outset tribute is demanded on it by the Commonwealth. Almost every article imported by State governments as the result of their borrowings in London pays a high customs duty, and the amount thus collected by the Commonwealth goes automatically into the federal revenue, and is spent as revenue. That is to say, money borrowed by the States in London becomes Commonwealth revenue. The Royal Commission on the Constitution went to no end of trouble in endeavouring to discover what this amounted to, but found it impossible to ascertain the figures. The customs authorities said that the information could not be given. The commission exhausted every means at its disposal, but could not ascertain what amount the Commonwealth collected year by year in the form of taxation on State importations. It could not discover the percentage of loan money borrowed in London that became federal revenue and was spent as such. That it is a very considerable percentage there can be no question. The commission did discover that, during one brief period - speaking from memory, I think it was a year - upwards of £1,000,000 was remitted to one State in the form of collections of duties on goods imported by that State as theresult of loans raised in London. This matter did not escape the notice of the British Economic Delegation. The delegation directed particular attention to it, partly on the ground that it was economically unsound that a part of a loan raised by a State should become revenue of the Commonwealth and partly because money borrowed in London was not being spent on developmental work in Australia, but was to a certain extent passing into ordinary revenue.
In addition to Unit first charge upon loan moneys raised by the States for the development of Australia, there can be no doubt that in recent years, largely by reason of the operation of the Australian tariff and arbitration court awards, the cost of carrying out works has increased so enormously that, compared with the pre-war period, it is questionable if we have obtained much more than half the value for our loan expenditure. Our trouble, therefore, is not due to over-borrowing. We could quite safely have borrowed the £300,000,000 had the whole of the money been legitimately and economically spent in the development of the resources of Australia, and we should have been better off had we done so.
– Does not that mean that we have over-borrowed?
– I am not quarelling over words; but looking at the matter squarely in the face, our trouble is due ‘to the fact not that we have been borrowing so many millions in London in recent years, but that, having borrowed these millions we have not legitimately spent them on the development of our country. Had we done so there would have been no trouble. An impression exists in the mind of the London financier, which can only be removed by reform on our part, that in addition to the stuns which have gone into federal revenue a large proportion of the money borrowed in -London has beeL Spent not in developing Australia’s resources but in bolstering what we are pleased to call the Australian standard of comfort. Every people is entitled to the highest standard of comfort it can earn, but we have been living up to the highest standard of comfort we can borrow, a condition of affairs that cannot continue very long. The mere fact that with all this borrowing our power to absorb additional population has declined is conclusive evidence that the money has not been wisely spent. Had it been wisely spent the additional opportunities made available to the people would have brought others to our shores without any of the activities of a migration commission. There would thus have been no appreciable addition to our debt per head of the population. On the contrary, there would have been such an addition to our production that our additional borrowing would have hurt us very little if at all.
When I speak of the Australian standard of comfort having been bolstered by big borrowing and extravagant spending 1” am not by any means to be regarded as attacking the working man. All sections of the community are to blame, and probably the working man has gained the least out of it. Take, for instance, the extent to which motor cars have been imported in recent years. When I made reference a few months ago to the fact that there were twice as many motor cars in Australia as we had use for, my statement waa questioned by another honorable senator. A few weeks ago I stood alongside an important highway in Sydney between noon and 12.30 p.m., just when the people were moving out of the city and when motor cars were passing as quickly as they could. I made a careful census and found, taking full-sized cars only, that the average number of persons in each car was less than one and a half. How can wc avoid traffic problems with a condition of affairs so ridiculous as that? ‘.The mere fact that a very large number of people riding in those cars probably had not paid for them,’ or if they had paid for them had done so by mortgaging their homes or future incomes, is further evidence of the fact, from which I do not think there is any escape, that wo have imported luxuries into Australia during the last few years to an extent which is largely responsible for the state in which we find ourselves to-day.
One of the opening paragraphs of the ministerial statement of policy shows clearly what has happened. 1 do not question that in the last six years we have gone to the bad to the amount mentioned; nor do I question the need for a decrease of imports; but the vital question is what sort of imports are we to decrease? If we can decrease the importation of luxuries of a wasting character it will be altogether to the good, but if we fail to. do that and, instead, are forced, as we shall be, to decrease the importation of articles we need in order to develop our country and enable us to produce more in the future, it will be a very bad lookout for us, indeed.
I join with Senator Pearce in his remarks concerning the assertion in the ministerial statement of policy that it “would be a policy of despair to declare that costs ‘ of production and development are too high to permit of the expansion of our industries.” A declaration that the costs of production and development cannot be brought down is a confession of hopelessness - that Australia is bankrupt. At least it will be regarded as such by those on whom we must continue to rely for assistance to develop our resources. If we go on the English money market and say that we cannot reduce our costs of production we shall get a very unsympathetic hearing. Such a policy would imply that all development and expansion must cease, whereas what is required in Australia is that costs shall be brought down as they have been brought down in other parts of the world. When another honorable senator made a similar statement Senator Daly asked how costs could be reduced. It is not a difficult matter to reduce costs. Many items in our tariff impose an undue burden on our industries without giving a corresponding benefit to the country at large. In the closing hours of the session prior to the Christmas adjournment we had a bill brought down to increase the bonus paid to a .firm manufacturing galvanized iron, bringing it up to ?4 10s. a week for every mau employed in the industry. That is one of the factors responsible for the increase in the cost of production. Another is the ridiculous position in regard to Queensland sugar. The Government has issued an appeal to farmers to grow more wheat. Northam is tlie centre of a wheat-growing district. When I was there a week or two ago I took the trouble to make a pretty exact inquiry on certain lines, and I ascertained that .that community, comprising, in the town and district, between 20,000 and 30,000 people, has two local governing bodies, a municipal council and a roads board, which make the roads and footpaths, provide the light and sundry health and sanitary services, and cover all the duties implied by local government. The excess cost of sugar to that community over and above London parity was one-half the total cost of its local self governing bodies which are responsible for the construction and maintenance of roads and footpaths and other such work. It is such communities that are being asked to produce more wheat, while at the same time they are confronted with the absolutely indefensible position under which in connexion with one article of consumption they are asked to pay an excess cost equal to one-half of that incurred by all their local self-government. The Prime Minister’s appeal to the wheatgrowers to produce more wheat certainly implies that they will have to work harder. They will have to if they are to produce more wheat, particularly if they are to do so profitably at 4s. a bushel. What hours are they to work? Does any one think that the farmers growing additional wheat in order to help Australia out of her present trouble will work 44 hours a week?
– The “ most recent suggestion of the trade union movement is that rural workers should work only 40 hours a week.
Senator Sir HAIL COLEBATCH.The wheat growers who are being asked to assist the Government will be compelled to work 60 hours a week. Honorable senators opposite ask how we should decrease the cost of production. Only yesterday a statement was published to the effect that a large proportion of the railway employees in New South Wales are paid for 48 hours, whilst they work only 44 hours a week, in consequence of which an additional ?600,000 is imposed upon the community in that State. We have been asked how the cost of .production can be reduced. If a farmer has to work 60 hours a week in order to grow more wheat to help Australia out of its difficulties would it not be fair for the right honorable the Prime Minister to suggest that the railway employees of New South Wales, who are being paid for 48 hours a week when they are working only 44 hours, should work 48 hours at all events until Australia gets out of her present difficulties. Is there anything unfair in such a proposition? Is it right, just or honorable for the railway employees in that State to be paid for a 48-hours week when they are working only 44 hours, while the wheat-growers of Australia are being asked to work longer hours in oi;der to get the country out of its trouble?
– But the wheat-growers will get a certain proportion of the returns from increased production.
– Not necessarily.
Senator Sir HAL COLEBATCH.Four shillings a bushel, the price which the Government is guaranteeing the wheat farmers at country sidings, represents barely the cost of production. That is all they will receive if they respond to the request of the Government to increase the area under crop, and in doing so, work longer hours. They will have to rise earlier in order to cultivate a larger area. They cannot afford to pay labour at prevailing rates of wages, and will have to do most of the work themselves. If we were to tell the farmers to work 44 hours a week to produce wheat at 4s. or even os. a bushel, they would say that they could not do it. Is this appeal being made to all sections of the community or only to those who are producing wheat?
I do not wish to labour the coal question, but I should like to know if the Government intends to tell the coalminers that they must be satisfied if they can earn a reasonable living. I have always contended that men employed underground should work shorter hours than those engaged in surface work. The evidence tendered before the royal commission on the coal industry shows that the average wage earned by the coalminers was £2 2s. for a day, consisting of from 34 to 5 hours. Surely it is fair to say to men working under such conditions and who are receiving a full day’s pay for five hours work, that they should work for seven hours a day. Would it not be fair to tell them that the limit they place on production is largely responsible for our present troubles, and that they must dispense with limited production. I rejoice to note in the Prime Minister’s speech that the Government is awakening to the fact that increased production is the only thing that can save Australia. That is definitely laid down in the Prime Minister’s utterances, but it should apply to every one. The coal-miners should be told that they must work at a reasonable rate and during reasonable hours, and that they must also withdraw all restrictions upon output. The miners surely know that a restriction of output does not result in their ‘ earnings being increased. Would it not be reasonable to tell, the bricklayers that there must be no restriction upon the number of bricks laid per day?
– There has been no restriction in the output of bricks.
– Does the Leader of the Government in the Senate suggest that there has been no reduction in the number of bricks laid per day ? During the last ten years there has been a decrease of 30 per cent., and the cost of bricks and bricklaying has resulted in the price of houses being increased by 100 per cent.
– A fair number of contractors have retired on the profits made on war service homes, but there are not many bricklayers so favorably placed.
– I suggest that the Minister refer this matter to the Council for Scientific and Industrial Research, a body which could readily determine how the cost of production in Australia can be reduced.
– We are suggesting that the farmers should work their land more scientifically.
Senator Sir HAL COLEBATCH.The recommendations of the Council for Scientific and Industrial Research in this respect would he invaluable to the Government if it was prepared to put them into operation. The other day we had a statement from the Prime Minister which was almost in the nature of a boast to the effect that the Government was keeping in employment 1,000 public servants, who, but for its advent, would have been dismissed, and that it was keeping them in employment at great cost to the country. ^ There can be no other conclusion than that he was retaining their services knowing there was nothing for them to do. The services of 1,000 men are being retained at a cost of £250,000 per annum. That amount is taken from industry in order to be wasted in keeping a thousand men employed in this way. Such a policy must increase unemployment. If that £250,000 were left in the taxpayers’ pockets to use in productive work, it would provide employment for more than 1,000 persons. At the end of twelve months ‘ there is nothing to show for the £250,000 extracted from the pockets of the taxpayers in order to provide employment for men who, apparently, have nothing to do. It is a shameful admission on the part of any government that men are being employed unprofitably.
– What about the government that is paying equivalent to 28s. a week to married men in the form of rations, and for which no service is rendered ?
Senator Sir HAL COLEBATCH.The more money is spent in this way the more the Government will have to spend in providing rations. The figures quoted by Senator Carroll show that the percentage of unemployment is steadily increasing. It is futile to say that there is unemployment all over the world. Are we to suggestthat because there is unemployment in poor and over-crowded countries in Europe there must also be unemployment in this rich but sparsely-populated land? France has no unemployment problem, and the number of unemployed in Italy is equivalent to only 1 per cent, of the total population, whereas at the end of last year according to the Statistician’s figures our percentage of unemployment was three times as great. I doubt whether there is another country where the number of unemployed in proportion to the population is as great as it is in Australia. There is far more reason for unemployment in poor and over-crowded European countries than there is in a rich but sparsely-populated country such as Australia.
– Why do the Italians migrate to Australia if the conditions in their own country are so satisfactory?
Senator Sir HAL COLEBATCH.Because they are over-crowded.
What is meant by a stabilization of prices, to which reference is made in the ministerial statement? What does the stabilization of wool prices mean? Any attempt to artificially fix the price of wool will defeat the object in view, just as has happened from the beginning of history. When we artificially raise the price of any commodity, production is immediately increased and consumption decreased, and as a result of the operation of these two factors we are soon overwhelmed by a plethora of such commodities. That has been the result whenever it has been attempted. The marked rise in the price of wool after the termination of the war was not brought, about by the artificial fixing of prices, but it had the same effect. I was in Great Britain at that time and was in conversation with people in Leeds and Bradfordwhose fathers and grandfathers had been engaged in the woollen industry. These manufacturers said that the high price of wool was a calamity, and that in a few years the Australian squatters would realize what an injurious effect high prices would have on the woollen industry. High prices had the effect of stimulating the production of artificial silk and artificial wool, which would never have come on the market but for the abnormally high price of the wool. As the price of wool decreases it will be found that the manufacturers of these substitutes will experience hard times. There is every reason to expect that a fall in the price of wool will lead to increased consumption.
– And to the partial extinction of such artificial commodities?
– Yes; it is the natural consequence and wool will rise again. The more we try to rectify the position by artificially controlling prices the greater becomes our difficulty.
Certain proposals are being made by the Government in connexion with wheat. It is curious to relate that on the day on which we are asked to discuss this matter the newspapers publish a statement from the chairman of the Farmers Wheat Board in the United States of America issuing a warning to the effect that unless the wheat-growers . reduce their acreage by 10 per cent., to prevent a wheat surplus, the board will be unable to help them in getting a fair price next year. That board, with all the resources of the country behind it, says that they cannot have a subsidized price and at the same time increase production. If they are to have a fixed price they must reduce production. To speak of increased production and fixed prices is absurd. Where is it going to lead us ? The price of wheat in London to-day is 7s. 4½d. per cental, or 4s. Sci. (i bushel. We are told that the price to be guaranteed to Australian wheat-growers is equivalent to 4s. 8d. per bushel f.o.b. The Government does not know what freight charges are to be imposed on shipments of next season’s wheat;- but they are not likely to be low, because the extent to which our imports are diminishing must have an effect upon homeward freight. It is inevitable that freights will be increased; but even allowing for a very reasonable rate we cannot possibly expect our wheat to be landed in London at less than 5s. 5d. a bushel, whereas the present price is 4s. 5d. per bushel, or a difference of ls. a bushel. Assuming that the farmers respond to this appeal of the Government, and we produce something like a record crop, what will happen? Our record wheat crop was 160,000,000 bushels in 1924-25. Allowing 40,000,000 bushels for local consumption, that would leave 120,000,000 bushels available for export. If there is a loss of ls. a bushel on the 120,000,000 bushels- as there would be at the present price - how will it be made up? The Government should tell us what it proposes to do should the position arise. We know what is done to make up the loss on the sugar and. butter which we export. Is it proposed to do the same with wheat ? If that is the Government’s intention, I point out that the position with respect to wheat is entirely different from that in the case of either sugar or butter. About one quarter of our sugar crop, and approximately one-half of our butter production is exported; but in the ease of wheat, threequarters of which is sent abroad, a loss of ls. a bushel would mean an additional 3s. a bushel on the wheat consumed at home.
– The Minister for Markets (Mr. Parker Moloney) said that the wheat board would have the power to fix the price of wheat in Australia.
– Wo are entitled to know more than we have been told; all the cards should be laid on the table. We should know how it is proposed to make up any loss on the wheat which we export. I am not criticizing the Government’s proposals because I do not know what they arn; but what ever it does will mean taking money out of the pockets of the people - largely those who grow the wheat. The wheatgrowers who pay current prices for everything they purchase, as well as their share of taxation, ‘would find that they would lose most of the. subsidy. The basis of the subsidy is unreasonable and unfair. It is proposed to pay 4s. a bushel at all country sidings. The cost of conveying wheat from the farms to the seaboard is much heavier in New South Wales than it is in Western Australia. The New South Wales farmer would get his 4s. a bushel, and the other Sd. would be paid for him. The Western Australian farmer would get his 4s. a bushel, but the cost of conveying his wheat to the seaboard in Western Australia averages only about 4d. a bushel. In that case the farmer in New South Wales is to receive a much bigger bonus than the farmer in Western Australia. I do not see how the Government’s proposal can place the wheat-farmers in New South Wales and Western Australia on the same footing and comply with, the Constitution, which provides that any bonuses granted shall apply equally to all the States. I am not familar with the rates of carriage in the other States. We are also entitled to know ‘how the first advance is to be paid. Will it be paid by some arrangement with the banks, or will the Commonwealth Government pay for the wheat as it is received?
– All these matters will be explained when the bill is introduced.
Senator Sir HAL COLEBATCH.Then it is just as well to indicate now what we shall expect before we can give favorable consideration to the bill.
The statement of policy informs us that the Commonwealth Government has invited the State Governments to join with it in guaranteeing the growers 4s. per bushel for the first year. Does the Government think that the wheat-growers throughout Australia will alter their present methods on the strength of a guarantee for one year? The wheatgrowers of Western Australia are perfectly satisfied with their voluntary pool and the opportunities afforded by independent buyers. Does the Government think that they will be willing to scrap their present organisation to join a Commonwealth pool merely on the strength of a guarantee of 4s. a bushel for one year? If we are to continue to despair of ever decreasing the cost of production other industries than the wheatgrowing industry will soonbe inneed of assistance. What is the position in the mining industry to-day? Almost every day additional mines areclosing down. Only a few days ago there was a sinister paragraph in our newspapers regarding what is likely to happen, when the British Government’s contract for the purchase of zinc concentrates comes to an end. All our industries are in such a position that they cannot compete with the rest of the world. Any government that adopts the attitude that it is a policy of despair to talk of decreasing the cost of production is entirely blind to the reality of the position.
The statement before us refers to the success of the conversion loan. It would be a sorry state of affairs indeed if that loan had not been a success. Conditions are bad when 6 per cent, is offered for government securities. An investor looks for both security and interest. If he is offered the perfect security of government bonds and, in addition, interest at the high rate of 6 per cent., how are the peoplewho are engaged in the development of the industries of this country to obtain money? What is the farmer, who we are told must increase production, to do? What rate of interest will his banker charge him if 6 per cent, is offered for government securities? One reason for the success of the conversion loan was that a large number of people possessing money for investment, were so scared about the general position that they were afraid to put it into industry. Consequently they invested it in government bonds. A country has reached the worst possible state of affairs when the people rush to lend their money to the government instead of investing it in various private enterprises, which would provide more employment than if the money were lent to the government. The Loan Council has wisely decided to reduce borrowing. I firmly believe that if it had made that decision some time ago, and instead of asking for, say, £30,000,000 and being prepared to accept as much as it could get, it had reduced its requirements by 50 per cent., it would have had a readier response on the London market. In this connexion I wish to utter a word of warning. A fatal error in the Financial Agreement with the States has become manifest recently. There is nothing in the agreement to prevent the setting up of subsidiary borrowing authorities. Many of these have been set up since the Loan Council was established. They can borrow where they like without the permission of the Loan Council. Only the other day the Treasurer of New South Wales suggested that the New South Wales government railways should be constituted a borrowing, authority to borrow money without the consent of the Loan Council. Before the agreement was entered into that position ought to have been foreseen and provided for. The defect can now be remedied only by the whole of the State Parliaments passing legislation; to prevent the setting up of subsidiary borrowing authorities.
– Do not such bodies have to get the sanction of their governments to the raising of loans?
– Not in all cases. Sometimes they merely announce their intention to borrow money, and then go right ahead with their proposals unless the ratepayers make a protest and demand a poll. In certain cases’ in which money is proposed to be borrowed for various services such as the provision of tramways, water, or electric light, they have to get the approval of the State government. But the point is that certain governments themselves are now suggesting that these bodies should be established in order to get behind the Loan Council. In such cases they will grant, the necessary power.
I do not propose to add anything to what has already been said regarding the cost of our naval and military colleges, except to say that, having listened with great attention to Senator Glasgow, I am still of the opinion that, unless some means can be devised to decrease the cost of these establishments considerably, it would be better to close them, for under existing conditions they are far too costly. After the Government had announced its intention respecting these establishments, the Prime Minister visited the naval college at Jervis Bay. If press reports are correct, it appears that his visit somewhat modified his views, for he is reported to have said that the previous decision of the Government would have to be reconsidered. I trust that means will be devised to reduce the cost of those establishments, so that they may be kept going; but, unless that can be done, they should be closed. Senator Glasgow gave as a reason for the high cost of training that only about one third of the number of students for which the military college was established were now undergoing training. Unhappily, that is the sort of thing that is going on everywhere. When the Commonwealth Government took over from the States the control of migration an enormous and expensive organization was very quickly built up. Some of its officers were too highly paid. Later, when migration fell, the organization continued, and the men drawing big salaries retained their positions. The result was that the per capita cost of migration became enormous.
The Prime Minister recently had a good deal to say about the overlapping of Commonwealth and State departments. He said that there were six State Agents-General in London costing £50,000 per annum, in addition to Australia House, which cost £130,000 per annum. In order to avoid that duplication, he naively suggested that the six States should dispense with their AgentsGeneral, who for many years have done the work well at a total cost of £50,000 per annum, in order to prevent overlapping with a Commonwealth organization doing the same class of work. Why should the representatives of the States get out of the way to make room for a Commonwealth department costing three times as much? I predict that, if that course is adopted, there will be very little saving in the total expenditure incurred in London. I speak with some knowledge of Australia House when I suggest that it should be easy to reduce the expenditure there by at least the full amount now spent by the six States in London - £50,000 per annum.
I come now to the Government’s proposals to amend the Constitution. Two proposals are to be submitted to the people. First, it is proposed to ask them to strike out paragraph xxxv of section 51 of the Constitution, providing for arbitration and conciliation in the settlement of industrial disputes extending beyond the limits of any one State, and to insert in its stead -
Industrial matters, including -
Happily we know exactly what is intended shall be done under this new power. There can be no mistake about it. The Labour conference in Melbourne recently set down clearly the legislation that was desired under that power. It was, first, that there should be a 44-hour week in all industries, with heavy penalties for both employers “and employees if they worked longer.
– What is wrong with the 44-hour week?
– The first thing that is wrong is that the farmers of Australia cannot produce the extra wheat that is needed, nor can any other industry in this country live under those conditions without receiving subsidies paid by somebody else.
– How does the honorable senator know that?
Senator Sir HAL COLEBATCH.Were we not told the other day that unless the manufacturers of galvanized iron received an increased bonus amounting to £4 10s. per man per week, they could not carry on? Did not Judge Beeby, in the Arbitration Court, say that not one of these industries can carry on without substantial assistance if the prevailing conditions of labour are to obtain ? That is a pretty policy to put before a country whose only salvation lies in increased production.
The second action which it is asked shall be taken if this increased power be given is the total abolition of all piece-work or any form of payment by results. I venture to say that there are a number of industries in Australia to-day which exist only because they have a reasonable and satisfactory form of payment by results, a method that is just as satisfactory to the employee as to the employer. Payment by results does get the work done.
– Those industries pay the highest wages in Australia.
– Of course they do. Abolish all piecework and payment by results, and the number of our unprofitable industries will increase by leaps and bounds. Also, the number of our unemployed will go up even more quickly than it has since the last tariff schedule was introduced.
The third power to be legislated for is equal pay for equal work for men and women. I do not mind that at all, butI object to it in conjunction with the abolition of payment by results. If we are going to have payment for work done, by all means give women as much as men. But if we are to fix rates of wages arbitrarily on some idea of a man’s responsibilities and all that sort of thing, and if we are to have the same payment for women as for men, we shall have one of two results. Either we shall be giving a man far less than he can live on, or we shall be giving women far more than industry can pay. We cannot have it both ways. The fourth piece of legislation that the conference insisted upon is compulsory preference to unionists. I do not propose to discuss that.
There is another suggestion, and I fancy that it will be regarded as the crowning joke in the way of constitutional amendment. No constitutional lawyer with a shred of reputation would dare to draft a document of this kind. It is a proposal to alter the Constitution by inserting, after section 128, the following new section : -
Notwithstanding anything in the last preced ing section, the Parliament shall have full power to alter the Constitution in the following manner: -
The proposed law forthe alteration thereof must, after the lapse of one month from its origination in a House of the Parliament, be passed by an absolute majority of each House of the Parliament, andbe assented to by the GovernorGeneral.
All honorable senators are familiar with the provisions of section 128. It sets out the manner in which the Constitution may be amended. That, may be done by a bill passed by both Houses and accepted by a majority of the people voting in a majority of the States, while, in certain circumstances, it can be amended only by the consent of a majority of the electors voting in the State concerned. It is not proposed to amend that section or to strike it out. It is merely suggested that another section shall be added which will override section 128 and render its provisions invalid and useless. The first consideration that one has is that such a provision could not be carriedwithout a majority in every State of the Commonwealth, because the last paragraph of section 128 provides: -
No alteration diminishing the proportionate representation of any State in either House of the Parliament, or the minimum number of representatives of a State in the House of Representatives, or increasing, diminishing or otherwise altering the limits of the State or in any manner affecting the provisions of the Constitution in relation thereto, shall become law, unless the majority of the electors voting in that State approve the proposed law.
If carried, this amendment would enable the Parliament to make any of the alterations which are prohibited under that paragraph. Ihave not had an opportunity to consult a constitutional authority, but I am so firmly convinced in my own mind that I do not hesitate to express my opinion for what it is worth. I believe that the proposed alteration cannot become law unless it is approved by a majority in every State of the Commonwealth. I venture the opinion that it has been put up in a spirit of insincerity, with the knowledge that it cannot possibly be carried. If the Government was sincere about the matter it would have put up a reasonable and sensible amendment that would have effected what is desired, an amendment in the terms submitted by the accredited representatives of the Australian Labour Party to the commission appointed to inquire into the Australian Constitution. That amendment was a reasoned one, drawn up by an eminent counsel. Though it was one to which I could not give my support for a moment, it was at all events sensible, something that could be submitted to the people. The proposal of the Government is, to my mind, utterly ridiculous, and it will be regarded as ridiculous if the Government has the hardihood to persist with it.
I do not think that it is necessary for me to detain the Senate longer. I welcome the declaration by the Government that it recognizes the need for increased production. I hope that it will go to all sections of the community with that message, and particularly to people that the Government is supposed to represent in this Parliament; not because these people are the worst offenders, but because they are some of the offenders. Unless the Government is prepared to go to its own people and tell them these things it is very little use asking the farmers to work harder, merely that they anay receive a return for their outlay and nothing else. I, for one, would be heartily pleased to cooperate with the Government in the manner suggested iu the closing paragraph of the ministerial statement; but before doing so I desire to have a throwing aside of these socialistic shibboleths, and these economic enormities that would disgrace a kindergarten. There must be a clear-cut issue on the part of the Government, and a determination by the people of all sections to help the country out of its present morass. That is by no means an impossible task. It is less difficult in Australia than it would be in any other country in the world. We in Australia have all the real requirements of life. We are more blessed naturally than almost any other country in the world. We have a people who have sprung from the best stock that the ages have produced. With all those advantages we can, if we pull together, get Australia out of its present difficulties. But we cannot do that unless we recognize the full facts. The first is that, from top to bottom, we have been hopelessly extravagant, and that that must cease. The second is that there must be no artificial restriction of production, whether such restriction takes the form of slowing down in the matter of work or the artificial putting up of prices.
– We have before us a very interesting document which is, generally speaking, a specification of intentions on the part of the Government. It is called a ministerial statement of policy, and it embraces many things, big as well as little, admissions, commissions and confessions. The first confession that I notice is that the Government prides itself on the fact that the £10,000,000 loan has been over-subscribed. There is not a word in the statement about the iniquities of the capitalist. For the time being, at any rate, he- is a good fellow. I read in some of the papers that support the ministerial party a very strong eulogy of those who had so ably supported the recent loan. There was not one word of condemnation. Apparently, for one day out of the 365, that much maligned section of the community which possesses a little money, and is able to subscribe, has escaped scot-free. I am very glad to learn from the Government that, after all, the capitalists of Australia are not all bad people.
There is another statement, which has been referred to by previous speakers. It relates to production in Australia and reads - lt would be ji policy of despair to declare that costs of development and production are too high to permit of the extension of our industries. ‘
In other words, that the cost of production in Australia does not need to come down in order to ensure an expansion of industry. I want to know how that extension of production is going to take place in Australia without a reduction in the cost of production. I am willing, as the Cornishman would say, to hold a caudle while some one “ is a-doing of it.” We have only to recall what has been said on the subject in the immediate past by responsible mouthpieces of the Gov.vernment party. This vital question was discussed at the Premiers’ Conference last year in this very building. Mr. Collier, the Labour Premier of Western Australia, said that the cost of production in Australia must undoubtedly come down. That highly respected and responsible man was most emphatic on the point, and his declaration is a flat contradiction of the statement that I have just read.
Mr. McCormack, the Premier of Queensland, made a corresponding statement. But when the former Prime Minister, Mr. Bruce, using milder language, said that, if we were to pay our way, the cost of production must come down, practically every hoarding in Australia was placarded with the announcement that he proposed to bring down wages. His statement was twisted out of all semblance to its original form, and the people were given to understand, in the plainest of language, that his principal object was to bring about a reduction in the standard of living. It would appear, therefore, that whilst Mr. Collier and Mr. McCormack were commended for stating an economic truth, Mr. Bruce, who put it in slightly different form, was condemned. Mr. Collier got a halo; Mr. Bruce a burning pitch cap. This, I suppose, is the modern conception of fair play in the political arena.
I notice in this specification of multifarious proposals submitted by the Prime Minister, that the Government has modified our migration policy to the extent of permitting only a trickle of our kith and kin from the Old Country to reach Australia. In other words, we are told that this vast country of 3,000,000 square miles is no longer capable of absorbing those tens of thousands of people, who formerly were cordially welcomed and whose coming added to our industrial, financial, and national strength and assisted in the development of the Commonwealth. The Leader of the Senate (Senator Daly) in a statement, recently in Adelaide, observed that a reconciliation had taken place between the Commonwealth and State Governments on this subject, and confessed that South Australia, which comprises an area of something like 200,000 square miles, and boasts of a fine capital city, as well as many important provincial towns, is able now to absorb only between two and three domestic migrants per month! I am wondering how that State proposes to dispose of these migrants - what will happen if one settles in the city and the other in the country. Will someone arise with the wisdom of Solomon, to divide the third equally between the city and the country?
The Government has invited all sections in this Parliament to come together as an economic council and tender advice as to the best remedies to apply to our present situation. On that point I can only say that my advice has always been proffered in that spirit. But this is no place for smooth speech or hollow compliments; I am unable to use honeyed words with which to. express my views on all subjects. If I see a wrong being committed, and if I feel that I have a grievance, in justice to myself, I must express myself in language appropriate to the nature of the trouble. If I speak strongly I can assure the Government that I place myself in the position of the wise parent who feels it is incumbent on him to chastise adequately his truant offspring in the hope that he will keep to the straight and narrow path in future. I, therefore, assure the Ministry that anything I have to offer in the way of criticism of its measures will be done with the best of intentions. I have learned by experience that the circumlocutory method of address which so often is employed to evade plain issues, is not always the best. If one wishes to establish heart to heart communication between opposing forces the direct method of approach is productive of the most satisfactory results.
I am well aware, as indeed are all honorable senators, that Australia is in a very serious position. But I believe, with Senator Colebatch, that nature in her bounteousness has endowed us with a wonderful heritage which it should be our duty to use to its highest purpose. We are the descendants of one of the finest stocks in the world. We have our faults, it is true, but our virtues, I believe, more than balance our faults. Nature has given us a wonderfully rich dowry in mineral, pasture and wheat lands, and I feel sure that the financial distemper from which we are now suffering will soon pass. If it does not, then without a doubt we shall be in for a bad time. I applaud the Prime Minister for his declaration that at this particular period in our history we should forget all animosities, discard all forms of hostility and pull together. This is an admirable sentiment and one with which we all agree. But I remind the right honorable the Prime Minister that when his predecessor made the same appeal, the Labour party failed to respond to it. This Government is now appealing to all parties to help it and help Australia. It will not appeal in vain. On the contrary, there will be a most generous response on our part. We are prepared to do all that humanly is possible to help this country through its present trouble, for the simple reason that if we do not lend our wholehearted assistance, the innocent will suffer with the guilty and there will be far worse times ahead for the overwhelming mass of our people.
The Scullin Ministry has sent out its S.O.S. to all parties to help it. The Prime Minister is quite emphatic as to the urgency of this need for assistance. He declares that Australia is in financial trouble. The position must indeed be very serious when the Leader of the Government of a country with almost limitless natural resources and peopled with a virile race, makes such an admission as that. Unfortunately we are in trouble. We need no further reminder of that unpleasant fact than a hint which we received not long ago from our banker that he does not think so well of us to-day as he did a few years ago. Our money is now costing us 6 per cent. On the day when the announcement was made of the issue of a conversion loan of £1.0,000,000 at 6 per cent, money in London fell from 4£ per cent, to 4 per cent., clearly indicating that whilst we are languishing for money for which we are prepared to pay a record price, London quotations are down. I do not blame any particular party for our present position. All I propose to do is to apportion the blame fairly.
The present position has many facets. As some honorable senators have said, we have been an extravagant people. I heartily believe that. We had the money to spend and believed we were welloff. Few people can be extravagant if they are poor, though it is true, nevertheless, that a person can be poor and extravagant at the same time. But, generally speaking, when a community is extravagant it is extravagant with the things which it possesses. Australia has had a wonderful period of prosperity lasting for ten or fifteen years. As a result the people lived up to their incomes and many went a bit over. Money that should have been directed into reproductive channels was spent in frivolities and luxuries. We have continued along this path until our bankers have called a halt. But that is only one facet to our present unsatisfactory financial position. There is another. Production has been declining during the last few years. I was alarmed, when I perused the latest edition of the Commonwealth Year-Booh, to find to what extent production had declined in the Commonwealth. In 1927-28 our exports were valued at £143,000,000, but, as everybody knows, in that year we obtained an enhanced price for everything which we had tq sell. If we examine our export trade from the stand-point of prices paid in 1901, we shall find that our exports for 1927-28 were worth only about £62,000,000. These figures show that for the last seven years Australian exports have dwindled from £13 per head to £9 per head of population, and that there has been a steady and progressive decline in the value of primary production exported, notably wool and wheat.
I wish particularly to impress upon honorable senators and those who may be disposed to criticize my summary of the situation, that I am taking the values of 1901 as the basis for my calculations. It is necessary to examine the situation from this angle because there has been a progressive tendency on the part of the overseas buyers of our products to pay lower prices. They are not now disposed to pay as much for our- products as they were a few years ago, and, as a result, our national income from wheat and wool has fallen this year by probably about £30,000,000 or £40,000,000. Australia is the poorer to that extent, and if it is to meet the situation an adjustment of the system of production is inevitable. This brings me to the point that if we are not in a position to produce at a price that will allow of a margin, then we must go out of business. As a matter of fact that is what is happening now in the case of a number of enterprises. There is, as I have said on other occasions, an obligation resting upon the leaders in the industrial movement to impress upon their people that the successful development of Australia depends upon a fair deal and reasonable co-operation between employers and employees. Only in this way can we expect to solve our industrial troubles. We should endeavour to do away with that malignant spirit which is keeping the two elements of production asunder. The Prime Minister is my authority for this statement. Mr. Scullin has said in the plainest of language that owing to the existence of the coal strike he found it impossible- to make successful financial arrangements in London. Of course we all know that it is true. It is only another instance of that kind of conduct that has placed this country in the disadvantageous position of having to pay more than any other for the loans it raises. I secured a return from our Treasury officials before the last budget statement- was presented, showing that in regard to borrowing activities Australia was in a far worse position during 192T and 1928 than New Zealand, Canada and even South Africa, and that if our credit was as good as that of Canada the saving in our annual interest bill would be over £5,000,000, if it was as good as that of New Zealand the saving would be £3,000,000, and if it was as good as that of South Africa, with all its cut-the-painter pranks, the saving would be £2,000,000. I recall when Australia’s credit was better than gold. When the late Lord Forrest borrowed on the London market to build the Coolgardie water scheme, a work .which was completed within the estimate, something which is impossible nowadays, the price was 3-J per cent., but immediately the loan was subscribed and the stock was listed on the Stock Exchange it jumped to £103. The promise of a handful of people to repay £100 on a given date was better than gold to the extent of £3 per £100. Why arc we not in so good a position to-day? Because we have followed foolish advice; we have allowed the bone and sinew of our people to listen to malicious advice which has been poured into their ears from time to time. Mr. Scullin is my witness that the coal trouble alone is responsible for the way in which the London money market has shut the door in the face of Australia. Why cannot we root out the causes that have led to the coal strike?
– There is no coal strike; it is a lock-out!
– For twelve months men have been kept out of employ ment by the subscriptions of their fellow men. The unionists have not always been in a position to subscribe from their earnings to keep others idle. In 1890, when I was on strike, the fountain of help in the shape of funds from fellow unionists ran dry in three months, showing that in years gone by the position of the- worker was incomparably worse than it is to-day. Thousands to-day can remain idle and so render it impossible to make financial arrangements overseas advantageous to Australia. I am quoting not my own opinion, but that of a responsible leader of the Labour party, who hiis had the courage to tell the. world at large what his opinion is.
I have dwelt upon the position of Canada, New Zealand and South Africa, showing how Australia lags behind in the matter of raising money abroad, and has to depend upon its own resources, paying 6 per cent, for doing so, which of course, cannot be continued for long. It is plain that there is something radically wrong when this Commonwealth cannot borrow at less than 6 per cent. I propose now to show what Canada and New Zealand have done in the matter of the .balance of trade which the Commonwealth Government is so anxious to restore. I gather from the Canadian earBook just to hand, that in 1913, Canad;i had an adverse trade balance of something like £5 a head-; last year it converted this into a credit balance of £3 a head. In 191 3 New Zealand’s debit trade balance was 4s. a head. In fourteen years it was converted into a credit balance of £2 a head. In 1913, Australia had a debit trade balance of 12s. a head, which has since increased to £3 4s. a head. Australia has lagged behind. We hear over and over again the cry “produce more,” but will the people, produce more if they are not given encouragement to do so? You may take a horse to water but will it drink? You may summon spirits from the vasty deep, but will they come? You may ask the producer to produce more, but can he do so if no inducement is given to him, unless he has cheap land such as he can get in Western Australia? Any one who likes to go round the country will find that men are abandoning cultivation because it does not pay, and are going in for sheep. But having done so they now find that the market for wool is as bad as it is for- wheat, and they are in a most serious predicament. The position of the primary producer to-day is, therefore, anything but rosy. On the average, Australians . are. courageous aud thrifty enough to engage in any task if they think it will pay, but if they see it does not pay, they drift away from it, and get into some other occupation. Because of the favorable conditions in big centres of population men congregate in them rather than go into the interior. When I landed in Queensland 40 years ago, J. naturally asked where I could do nest, and I was told to “ go west”. It was sound advice, but the further you go west on the eastern fringe, or east on the western fringe in the present day t.he worse you will fare. Mr. Collier, the Premier of Western Australia, mentioned some time ago the ease of a tram conductor in Perth who got as good wages as the man working at the 2,000-ft. level in the Great Boulder Mine. It is a facet of our present position that men will not go into the’ interior because there is no adequate reward. They will not seek to rise from the ranks because’ of the fear that they would be regarded as “bosses’ men,” and this attitude of theirs is reflected in our trade balance to-day compared with that of Canada and New Zealand. In the field of industry there is a restless and malignant spirit which is so prevalent that if a man rises from the ranks of yesterday by the fairest means in the world, he is not considered so good a citizen as he was when he was a journeyman. There have been occasions when men, given an opportunity to advance from the ranks to the position of foremen, have shrunk on the brink and recoiled into the ranks rather than be accused of being with the bosses. That is a wrong spirit. It ought not to exist, and should he discouraged at all costs. It has come so much into being within the last ten or fifteen years that there is to-day a wider and impassable gulf between employers and employees. It is a sort of latter-day serpent that has sprung from no one knows where. I cannot understand the need for it.
I ask those who would turn Australia into a Bolshevik state to go to Russia, and see how they would fare. The other day I gave figures to show that according to what has been written by a Soviet official under the authority of the Soviet Government the workers in Russia are serfs, almost in chains, and are compelled to work on the roads for 3s. a day. In Australia we have coal-miners who refuse to work for £2 a day, the amount they could earn, and wo have amongst us a band of mischiefmakers seeking to prevent them from earning those wages. They would be better employed in Russia trying to prevent men from working for 3s. a day, a wage which no Australian Communist, would accept. They could be well spared. Their handiwork is only too plain in Australia, but as Mr. Scullin has condemned them I am saved that, task.
The cost of government in this country, to which reference has been made, is far too high. It includes that which is expended for the purpose- of insuring civil order, protection against, external and internal aggressions and other dangers. Our cost in this respect, in comparison with other countries, is far too high.
– Would the honorable senator be in favour of his parliamentary allowance being reduced?
– I would like to sayin answer to the honorable senator that the more we spend in the direction I have indicated the poorer the community becomes, and unless the expenditure is incurred for the purpose for which it was appropriated we cannot expect to develop and progress as we should. The governments of Australia have gradually worked themselves into the position which is confronting us to-day. According to certain calculations which I have made, the cost of government in Australia is greater than that in any other English-speaking country. According to the figures taken from the British Budget of 1928-9, the expenditure in Great Britain was in that year £741,500,000. The aggregate income of Great Britain and Northern Ireland in 1924, according to Professor A. L. Bowley and Sir Joseph Stamp, the income tax commissioner, as published in the Y ear-Book of the Daily Mail, in 1928, was £4,165,000,000. If we divide one amount ,by the other we find that the cost of government of that country was 18 per cent, or 3s. 7d. of each £1 of national income. According to the World’s Almanac of 1929, the United States of America . Census Bureau found that the national wealth of that country in 1922 was 320,800,000,000 dollars. The National Industrial Conference Board found that the national income was 70,700,000,000 dollars, and, according to the same authority, the expenditure of the Federal Government was 3,700,000,000 dollars, and that of the States was 1,551,000,000 dollars, or a total of 5,251,000,000 dollars. If one amount is divided by the other, we find that 7 per cent, or ls. 5d. in the £1 of the national income of the United States of America was expended in the cost of government. In Canada, according to the figures to he found in the Year-Book, the cost of the Central Government in that dominion in 1926, after excluding railways and canals, was 325,300,000 dollars, and that of the provinces 136,600,000 dollars, making a total of 461,900,000 dollars. The private wealth of Canada, exclusive of railways and canals, was 19,700,000,000 dollars, which I have multiplied by 5 per cent, and which gives a national income on that basis of 985,000,000 dollars. The cost of government, which was 461,900,000 dollars, divided by the sum of 9S5,000,000 dollars, gives 46 per cent., or 9s. 4d. in each £1, as the cost of government in that country. According to the Y ear-Book of 1929, the private wealth of New Zealand is £752,000,000, and the public wealth, £298,000,000. The annual income of that dominion is given as £37,600,000. The cost of government is given as £24,460,000, which, after making deductions for losses on isolated sections and branch lines, would be about £24,000,000. Treating these figures in the same way we find that 63 per cent., or 12s. 7d. in each £1, represents the cost of government. The figures in connexion with the Commonwealth, taken from the Budget of 1927-8, are interesting. They show that the expenditure for that year was £62,000,000, exclusive of rail- ways and interest. The private wealth of Australia during that year was £2,832,000,000, and the value of bonds in public undertakings was £550,000,000, making a total of £3,382,000,000. The aggregate income on the same basis of 5 per cent, of the capital value gives the cost of government, in the case of the Commonwealth, £62,000,000, and that of the States, £50,000,000, or a total of £112,000,000. The last-mentioned amount, divided by £169,100,000, which represents 5 per cent, of the capital value of the private wealth of Australia, gives an expenditure of 72 per cent., or 14s. 4d. in every £1 of income. Summarized, the figures are as follows: -
Great Britain, 18 per cent., or ‘is. 7d. in every £1 of net income.
United States of America, 7 per cent., oils. 5d. in £1 of net income.
Canada, 40 per cent., or 9s. 4d. in every £1 of net income.
New Zealand, 03 per cent., or 12s. 7d. in every £1 of net income.
Australia, 73 per cent., or 14s. 4d. in every £1 of net income.
In order to correct the impression which may have been conveyed by the remarks of Senator Sir Hal Colebatch-, that the cost of State Governments has gone up very rapidly, I point out that the cost of government in the Commonwealth has remained practically on the same level for the past seven years. The taxation per head of the Commonwealth varied between 1921-28 from £9 ls. 8d. to £9 0s. 4d. The taxation per head in the States during the same period increased from £3 4s. 9d. to £5 0s. 9d. The percentage increase in the States was 54, but that of the Commonwealth a little more than $ per cent., whereas that for the Commonwealth and the States combined, has been 15 per cent, over a seven-year period. The figures I have given are the result of some calculations I made in order to satisfy myself as to how much of the money we are collecting is being spent in connexion with the government of the country. The figures have been obtained from official sources, and prove conclusively that the Governments of Australia are very expensive.
– What does the honorable senator include in the cost of government ?
– I have left out all essential services.
– What Joes the honorable senator include in the cost of government of the Commonwealth ?
– The taxation per head of population.
– What about our telegraphic and telephonic service?
– They are essential services and are not included.
– Do you include all forms of taxation?
– I have not included the postal service or any such activity. I have taken the taxation per head in the Commonwealth, for the purpose of government alone, for a period of seven years, as I have also done in connexion with the States. I have excluded, as I have in the case of Canada, all government utilities. The information which L have given should engage the attention of those who wish to assist the country out of its present difficulty as every additional £1 diverted from productive channels is money unwisely spent.
I agree with what has been said by other honorable senators to the effect that we should assist the Government to help this country out of its present difficulties. We are in troubled waters, and we cannot relieve the position unless we compel every section of the community to realize its obligations and to assist in rectifying our present adverse trade balance. It is, however, unreasonable for the Government to submit an unbalanced policy under which it expects the wheat-growers to produce more wheat and work longer hours whilst a similar request. is not made to other producing interests. Does not the Government realize that those engaged in the wheat industry are working harder and for longer hours than those in any other industry? Do not the members of the Government realize that those engaged in our secondary industries are working under the most favorable conditions, and in many cases only 44 hours a week? Does the Government think it fair play to allow such a disparity to exist? Is it right to ask this over-burdened section of the community to come to the rescue of the whole of the people, while others are not being asked to do their share ? There is no semblance of equality in the Government’s proposals. I appeal to members of the Government to have the courage of their convictions, and to tell the coal-miners that it is their duty to produce more coal. It is also their responsibility to tell the brickmakers to produce more bricks, and the bricklayers to build more walls; the wharf-labourers to fill more slings, the protected industries to produce more, and, producing more, to produce more cheaply, and by so doing place themselves on the same level as the farmers who are the hardest worked of all. Why single out the wheat farmers and ask them to produce more? If honorable’ senators opposite were to engage in rural activities to-morrow, their perspective would be altered, and they would then shape their policy in accordance with the needs of the people. But because they are not engaged in such pursuits, they do not realize how the shoe pinches or the collar galls. We want to see the burdens equally divided between all sections of the community, and Ave do not want any party ro be afraid to face the situation. What has been said by honorable senators on this side may result in the loss of votes at the next election. Our troubles about that! What we are telling the electors is in their own interests, because Ave feel that if Ave are to be conscientious we cannot tell them anything else. We are asking the Government to mete out even-handed justice to all sections. The wheat-growers have no more special interest in the welfare of this country than any other producers. They will always d.o their bit. They do not wish to be prompted in their efforts by guaranteed prices. They Will do a fair thing without a guarantee of 4s. a bushel. It is not right to load that offer with the condition involving the formation of a compulsory wheat pool. The wheat farmers do not care what the Government may do, because it is men of their type, and those engaged in the gold-mining industry, who have pioneered this country. They are men whose blood is worth bottling, particularly when compared with those working under favorable conditions in the cities. Why should those men engaged in city industries be coddled as they have been for years past? There is nothing more certain than in a country like this, where freedom exists, there cannot be water-tight compartments of welfare and illfare. If a man feels that he can do better elsewhere, he goes there. It is like the attraction the magnet has for steel. When a man in the country who is faced with difficulties which threaten to overwhelm him sees an opportunity to earn a livelihood under easier conditions in the city, he goes to the city. No one can stop him. Unless the policy announced by the Prime Minister is followed, there is nothing ahead of the people of this country but untold suffering and privation. Every individual must accept his share of the burden and effort if the barque of State is to be steered again into clear water, and the country is to regain its status. Largely through our own fault, our reputation among the nations is not good. Let us turn over a new leaf, and work together for the common good. Let us do our duty to the country that has been kind to us. Australia has been kind to me - kinder than I have deserved. Outside this Parliament there are men as good as, or better than, most of us ; but the fickleness of fortune has placed us here and left them outside. As one who claims to possess the instincts of a man, I am prepared to make some sacrifice to place the country on a sound footing. I urge the Government and its supporters to follow the Prime Minister’s lead.
– I have listened to-day for long hours to the greatest amount of calamity howling I have ever heard. Honorable members of the Opposition have risen one after the other to say that they can see nothing good in this country, that its people are without virtue, and are robbers who are driving the country to perdition. The Leader of the Opposition (Senator Pearce) said that the policy of the Government as outlined in the statement before the Senate would not get the country out of its troubles. The Government knows that it has a Herculean task to bring order out of the chaos it inherited from the late Government. Senator Pearce said that we must decrease the cost of production. That problem is now being faced by every country in the world. The question all of them has to decide is how it can be done. One or two members of the Opposition have said that they would lower the cost of production by reducing wages and extending the working hours. Those honorable senators would take us back again to the dark ages, when men were slaves. Under a system of slavery cheap production is possible. It took the human race many centuries to get away from that state of affairs. Civilization has reached a stage in which every man and woman has a chance of realizing aspirations of which the slaves of the past never dreamed. Men and women to-day want time for recreation and also some of the comforts of civilization. The right honorable the Leader of the Opposition said that the late Government had reduced the war debt by £15 per head of the population during its seven years of office. Had it remained in power for another 21 years there might have been no war debt; but he did not tell us that that policy also resulted in throwing 180,000 men out of work. . Had that policy been continued for 21 years there might have been no war debt; but there would have been an unemployed army of 550,000. Do honorable senators consider that that is a good policy for this country? Why is it that Australia is in a worse condition to-day than it has ever been if the policy of the late Government was so good?
SenatorFoll. - Unemployment is greater to-day than when the present Government assumed office.
– That is because the late Government spent all the money available. When it came into power there was a surplus of £7,000,000. Not only was all that money spent but a deficit of £5,000,000 was heaped up by it. The late Government’s record is that it squandered £12,000,000 and left the country a huge army of unemployed. Yet it is claimed by members of the Opposition that that Government comprised wise men who were true statesmen. Is it any wonder that the people of Australia turned it out of office? Whatever its faults, the present Government is better than that which preceded it.
– The people are only waiting to turn out the present Government.
– When the opportunity comes they will not do so, for the Government will have such good results to show that the people will not desire a change. This is not the first time that the Labour party has had to put Australia on her feet. On a previous occasion a Labour government inherited a huge deficit, but after three or four yearsnot only were the debts it inherited paid off, hut when again a Nationalist government took office there was a huge surplus for it to squander. The Labour party has managed the affairs of this country like a thrifty father only to die and leave it to a spendthrift son. Yet honorable senators opposite have the cast-iron cheek to criticize its methods ! Some of the proposals of the Government, as set out in the statement beforeus, will assist. Australia to overcome her difficulties.
The question has been asked to-day why farmers should be asked to grow more wheat when they cannot make wheatgrowing pay now. Wheat-growing doesnot pay to-day because of the difficulty of getting a decent piece of land in a suitable locality. The only land available for settlement is rough or scrubby country which takes a tremendous amount of clearing before anything can be done with it. Capital is necessary for its proper development. The country should do something to assist a manof good character who is prepared to develop it. Honorable senators opposite have criticized the Government’s proposal for the establishment of a compulsory wheat pool. In every successful business proper organization is necessary. The wheatgrowing industry is no exception to that rule. A proper system of organization and the adoption of business methods should lower the cost of wheat production. Organization, not longer hours or reduced wages, will reduce the cost of production. No successful business can be built up by low wages and long hours. Successful business men everywhere advocate short hours and high wages.
– And no restriction of output.
– I do not advocate any restriction of output excepting that no man should be expected to work with the whip of the slave driver above him. Some of us in this chamber remember the time when a man, having bent his head to his work in the morning, did not dare to lift it up till the whistle blew, for fear, not perhaps, of the slave-driver’s lash, but of dismissal. That day has passed, thank God ! No longer will men tolerate such conditions. Australians can pride themselves that, as workmen, they compare more than favorably with the workers of any other country. Organization has done much, for instance, for the fruit industry. The dried fruits industry was at one time in a state of chaos through lack of proper organization. Encouraged by the Government the growers got together and are now in a fairly prosperous position. In addition to earning a decent result for themselves they are able to pay satisfactory wages and allow their employees to work reasonable hours. Unfortunately, because they are disorganized, certain sections of industry are unable to afford their employees reasonable working conditions. I shall repeat it story which I have frequently told. On one occasion, after appearing in the Arbitration Court in Melbourne on behalf of the employees in the fruit industry, I was walking along Bourke-street in company with a friend. This man had previously been a miner colleague of mine at Broken Hill, but he was then a citrus farmer from the Murray River, and had been contesting the claims of the workers in the court. As we walked along to lunch we passed the window of a fruit shop wherein oranges were marked for sale at 6d. each. My friend said “ No wonder the growers were protesting in the court against the wages claimed by your men. That orange costs you 6d. in Melbourne. Probably I grew it. If I could obtain one penny for each orange that I grew I could make a fortune out of the business. The freight costs from the farm to the shop are negligible. There is great room for organization with a view to cheapening the purchasing price of fruit.” I endorse my friend’s remarks. Surely there is room for greater organization that will cheapen production without lengthening hours of work or reducing rates of pay. That is what my Government is endeavouring to do. On the contrary, honorable members opposite want longer hours and less pay. and a few have had the courage to express their opinions.
SenatorFoll. - No one on this side has said anything of the sort.
- Senator Foll could not have been present at the time. For all that I know he also might make a similar statement. I know that he is capable of anything.
– The honorable senator will kindly discuss the motion.
– The object of this Government is to so organize industry that it can be carried on under civilized hours, at reasonable rates of pay, without sacrificing the freedom or standard of living of the people.
The ministerial statement before the Senate mentions a number of contemplated measures. One concerns the Commonwealth Bank. I believe that that institution could be used as an instrument to organize the wheat and other industries. Many of our industries are cramped because they have not the necessary capital to expand. They are unable to obtain credit, although their assets may be remarkably good. For some reason or other the banks refuse to give them the credit that they desire.
– If the honorable senator asks the Treasurer, he will explain the reason.
– The Treasurer knows the reason, and he is endeavouring to remove the difficulties that exist. This Government believes that the potentialities of the Commonwealth Bank can be utilized with greater wisdom in the future than has been the case in the past - that it can be developed more in accordance with the intentions of those responsible for its creation. It believes that the bank is an instrument through whose medium opportunities of wealth production may be afforded.
– Can the bank create wealth?
– It can afford the means of organizing industry and so, indirectly, create wealth by giving credit to producers of wealth. It is a well known fact that the late Government was responsible for landing 180,000 unemployed in this country. No doubt with their dependants they would number 360,000. Those people had to be fed, housed and clothed by the remainder of the community, at a cost of at least15s. a head. If we can effect a business arrangement which will put them into employment and make them support themselves, we shall relieve the rest of the wealth owners of the country of that responsibility.
– Does the honorable senator mean that they should be given a dole from public funds when they are out on strike?
– I do not think that any reasonable person in this country advocates that people should be driven into starvation. I ask leave to continue my remarks at a later date.
Leave granted; debate adjourned.
– I move-
That the Senate do now adjourn.
.- I desire to make reference to a remark made by Senator Barnes during the course of his speech this evening. He claimed that honorable senators on this side had advocated longer hours and reduced wages in Australia. I do not think that any honorable senator on this side has advocated anything of the kind. This party has always taken up the attitude that wages conditions in Australia should be governed by the proper bodies such as the Court of Conciliation and Arbitration. Senator Barnes is endeavouring to put into the mouths of honorable senators on this side remarks to which they did not give utterance. As his Government desires the co-operation of honorable senators of the Opposition, according to the ministerial statement, the honorable senator should extend fair play to us. I remind him that the only gentleman in the public life of Australia who usurped the functions of the Arbitration Court and reduced wages was Mr. Theodore, the present Federal Treasurer, who, when Premier of Queensland, went behind the Arbitration Court awards and reduced the wages of the Queensland public servants by 5 per cent.
– I desire to say that the statement by SenatorFoll is incorrect. He claims that no member of his party advocated lower wages or longer hours. The whole tenor of the remarks by Senator Lynch was in favour of longer hours and lower wages. Incidentally, he inaccurately declared that some thousands of colliers were on strike in Australia! It is an historical fact that no colliers are on strike, but that they are locked out by the colliery-owners, who have violated the law. I again point out that the whole trend of the speeches of honorable members opposite has been to indicate that the only way to pull this country out of the financial morass is to lower the standard of living of the wage-earners. That may be verified by a reference to Hansard. Those particularly culpable are former Labour members who, having deserted their original principles, are most malignant in their utterances.
– There has been a tendency on the part of honorable senators to anticipate debate in a most lamentable manner. I ask them to discontinue that tendency.
Question resolved in the affirmative.
Senate adjourned at10.12 p.m.
Cite as: Australia, Senate, Debates, 13 March 1930, viewed 22 October 2017, <http://historichansard.net/senate/1930/19300313_senate_12_123/>.