14 November 1930

12th Parliament · 1st Session

The President (Senator the Hon. W. Kingsmill) took the chair at 11 a.m., and read prayers.

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Senator LYNCH:

-In view of thefact that certain members of this Parliament have expressed the view- that the public creditors of the Commonwealth should stand out of their money for twelve months or longer, will the Government ask those members whether they are pre pared to apply to themselves, as public creditors, the same rule that they would apply to other people,and stand out of their allowances for twelve months or longer?

Senator DALY:
Vice-President of the Executive Council · SOUTH AUSTRALIA · ALP

– I amnot aware that any member of this Parliament has expressed the view mentioned by the honorable senator. If he will be more explicit in stating his question, I shall see whether an answer can be furnished to it.

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Senator CHAPMAN:
through Senator Cooper

asked the Leader of the Government in the Senate, upon notice - 1.How many men were unemployed in Australia during the last two years, giving quarterly statistics?

  1. How many men are unemployed according la the latest statistics?
Senator DALY:

– The answer to the honorable senator’s question is as follows: - 1 and 2.-


Membership of trade unions reporting and number of members unemployed (basedon returns from trade unions):-

I am advised by the Commonwealth Statistician that the figures given in the above table are based on returns supplied by officials of trade unions reporting quarterly. They do not cover all mem- bers of the unions, us returns are not received from unions whose members are employed in occupations of a casual nature, such as wharf labourers, &c., or from unions whose members are permanently employed, such as railway employees, &c. Approximations only are available regarding the total number of unemployed in Australia.

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Senator CHAPMAN:
through Senator Cooper

asked the Minister representing the Minister for Trade and Customs, upon notice -

  1. What is the excesscost to the people of Australiaof commodities produced in Aus- tralia compared with what the cost would have been without any protective tariff, as estimated by Professors Brigden, Copland,Dyason, Giblin and Mr. C. H. Wickens?
  2. What is the amount of the gross burden of the tariff on export industries which depend on world prices?
Senator DALY:

– The informationis being obtained as far as possible.

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Senator CHAPMAN:
through Senator Cooper

asked the Minister representing the Minister for Trade and Customs. upon notice -

  1. What has been theamount of bounty paid on galvanized iron for each of the lastfive years ?
  2. How many men are employed in the manufacture of galvanizediron in Australia?
Senator DALY:

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

  1. Bounty paid duringfiveyears ended30th June, 1930:-
  1. The average number of employeesshown ina statement furnished in connexion with bounty claims made during the financial year 1929-30 was 614. The manufacturers recently stated that900 were now employed.

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Senator CHAPMAN:
through Senator Cooper

asked the Minister representing the Minister for Trade and Customs, upon notice -

  1. Whatwas the amount of duty paid for the year 1927-1928and the year 1928-1929 on each of the following items : - Cornflour, blankets and flannel, knitting factories produce, clothing (waterproof), dressmaking and millinery, hats and caps, chemicals and drugs, paints and varnishes, matches, rubber goods, cement, confectionery, clothing (tailoring &c.), shirts, ties, and underclothing, inks, polishes, &c., ironworks and foundries?
  2. What was the amount of wages paid for the year 1927-1928 and the year 1928-1929 on each of those items?
Senator DALY:

– The information is being obtained as far as possible.

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Senator CHAPMAN:
through Senator Cooper

asked the Leader of the Government in the Senate, upon notice -

  1. . What was the basic wage in 1911-12?
  2. What was the basic wage in 1928-29?
  3. What was the average wage in 1929-30, allowing for unemployed who drew no basic wage ?
  4. What was the increase or decrease of the average wage since 1911-12, on these calculations, allowing 100 as the basis on that date?
  5. What was the cost of living index number in 1911- 12, and in each of theyears 1928-29 and 1929-30?
Senator DALY:

– The Commonwealth Statistician has supplied the following information : -

  1. The basic wage in. 1911-12 based on retail price index numbers for the six capital cities was 50s. 6d. per week.
  2. The basic wage in 1928-29 was 85s.6d. per week, exclusiveof “ the Powers’ 3s. per week.”
  3. The average nominal rate of wage for adult male workers in 1929-30 was 101s. per week. The average unemployment for 1929-30 was14.6 per cent. Applying this percentage to the average wage, the average rate of earnings would be 86s. 3d. per week.
  4. The average nominal rate ofwage in 19 11-12 was52s. 7d. per week.Taking this amountto equal 100, the average nominal rate of wage (101s.) in 1929-30 would equal 192. Allowing for unemployment at both periods, the figures would be 100 in 1911-12 and 173 in 1929-30.
  5. The retail price index numbers (food, groceries and rent - all houses) for 1911-12 was 1951: for 1928-29, 1785: and for 1929-30, 1783, for six capital cities consideredas a whole.

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Senator CHAPMAN (through Senator

Cooper) asked the Minister representing the Minister for Trade and Customs, upon notice–

What was the duty paid on electrical goods imported into Australiafor theyear 1927-28 and the year 1928-29 ?

How many persons were employed in the manufacture of electrical goods in Australia during these years?

What were the wages paid?

What was the added value given to electrical goods manufactured in Australia for the year 1927-28 and the year 1928-29?

Senator DALY:

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

  1. Import statistical itemsNos.518.535. - 1927-28, £1,279,149*; . 1928-29, £1,223.217.
  2. 1927-28, 4.872; 1928-29, 5,852.
  3. 1927-28, £298.916; 1928-29, £1,141,557
  4. 1927-28, £1,439, 822; 1928-29, £1,707,456.

The figures in 2, 3 and 4 are quoted from Production BulletinNo. 23, issued by the Commonwealth Bureau of Census and Statistics.

Exclusive of amounts drawn by working proprietors.

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asked the Minister representing the Postmaster’ General, upon notice -

  1. Did theGovernment decide to erect six new class A broadcasting stations in Australia ?
  2. Are five of such stations under construction; and, if so, where are they situated?
  3. Was it promised and approved that the sixth of these stations should be located in the south-west of Western Australia?
  4. Has such approvalbeen withdrawn, and have orders for the necessary equipment been cancelled ?
  5. If so, on what basis was the decision to cancel the proposed new station in - Western Australia arrived at, if it is proposed to proceed with the other five stations?
Senator BARNES:
Assistant Minister assisting the Minister for Works and Railways · VICTORIA · ALP

– The Postmaster General has supplied the following information

  1. The provision of five national broadcast ing stations was decided upon.
  2. No. The construction of four stations is being proceeded with. The situationsare Newcastle, Rockhampton, Corowa. and Crystal Brook (near PortPirie).
  3. At one stage it had been decided toerect the fifth station in the south-west of Western Australia.
  4. Yes. Because of the financialsituation economy was necessary.
  5. The order for the fifth station hud been placed more recently, and, as the manufacture of the equipment had notbegun the portionof the contract covering this station couldbe cancelled. The orders for the other four stations could not be cancelled, as the equipment had been manufactured and in some instances delivered.

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Sena tor OGDEN asked the Minister representing the Minister for Trade and Customs, upon notice -

Whether the committee which is inquiring into the sugar industry will take evidence in Tasmania or in other States than Queensland?

Senator DALY:

– Inquiry is being made of the chairman of the committee on the point, and a reply will he furnished to the honorable senator as soon as practicable.

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Senator COOPER:

asked the Minister representing the Minister for Trade and Customs, upon notice -

  1. Is it a fact that second-hand magazines and literature are being dumped into this country?
  2. If so. what quantity of this type of literature entered the Commonwealth during the past twelve months, and in what countries did the literature originate?
Senator DALY:

– The answers to the honorable senator’s questions are as under -

  1. Second-hand magazines and literature are being imported to some extent, but there is no reason to think they are sold for export at less than the fair market value, and to the detriment of an Australian industry. Both these conditions apply as to dumping duty under section 4 of the Industries Preservation Act.
  2. No separate record is kept of second-hand literature.

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Senator H HAYS:
through Senator Payne

asked the Minister representing the Postmaster-General, upon notice -

Hasa definite agreement or contract been made between the Government and the shipping company (Tasmanian Steamers Limited) regarding the Bass Straits shipping services; if so, what arc the terms of such” contract or agreement ?

Senator BARNES:

– The matter is under consideration.

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Debate resumed from 13th November (vide page 248), on motion by Senator Daly -

That the paper be printed.

Senator PAYNE:

.- Resuming my speech on this subject, I desire to draw the attention of honorable senators to that portion of the Acting Treasurer’s financial statement which provides that, in addition to the 15 per cent. increase on the income tax rates of last year, a super tax at the rate of1s. 6d. in the £1 is to be imposed on incomes from property exceeding £100. The former exemption was £300. An analysis of those figures shows that persons in receipt of moderate incomes from property who last year paid tax at the rate of1s. 6d. in the £1, will this year be compelled to pay a tax at the rate of 3s. 3d. in the £1 - an increase of 117 per cent. in the rate of tax. That equality of sacrifice which has been preached continuously by the Government since it assumed office is not apparent in these proposals. The persons affected comprise, for the most part, those who, by dint of hard work, enterprise, and thrift, have made regular deposits in the savings banks, taken out life assurance policies, and joined friendly societies, thus ensuring that they will not become a burden on the Commonwealth in later years. These persons, who are perhaps the most deserving section of the community, for on them, to a great extent, Australia depends for its stability and prosperity, are to be penalized for their patriotism. This proposal will apply to many who will be subject to the specal taxation on salaries proposed by the Government so that they willbe called upon to bear a double burden. In the limited time at my disposal I have searched for a precedent for taxation of this nature, but I have failed to find a previous instance of double taxation being imposed on one section of the community. I have been furnished with a statement showing the effect of these proposals on taxpayers in Victoria. A. Victorian taxpayer, whose income from property last year amounted to £300, paid £4 4s. by way of tax for the year 1929-30. If the Government’s proposals are endorsed by Parliament he will have to pay £3818s. this year on a similar income - an increase of 800 per cent. Last year a Victorian taxpayer, whose income from property amounted to £600, paid £41 in taxation. This year he will be required to pay £114 - an increase of 180 percent. Of the £73 increased taxation, which will be payable by him this year, £45 represents federal taxation. A person who received £1,000 from property last year and paid £105 in taxation will be called upon to pay £225 this year - an increase of 115 per cent. Last year £340 was paid in taxation by every Victorian taxpayer whose income from property amounted to £2,000. This year his contribution to the revenue will be increased by 78 per cent., the levy being £610. In the case of persons whose income from property last year was as high as £5,000, and remains the same this year, the taxation impost will amount to £2,174 as against £1,406 last year - an increase of 50 per cent. Honorable senators will sec that in the case of a person with a comparatively small income from property the increased rate of taxation is very high -800 per cent.; the percentage increase diminishes very materially as the income grows larger. Yet this Government is continually denouncing the wealthy section of the community, the capitalists. Those figures prove conclusively that the Government’s’ mission is to impose the heaviest burden of taxation on the comparatively poor.

Senator GREENE:

– I suppose that the honorable senator recognizes that it would not be possible to add an 800 per cent. increase to the taxation of higher incomes?

Senator PAYNE:

– I do; but I consider that these percentages are worthy of quotation, for comparative purposes. I direct particular attention to the disparity which exists between the incidence of taxation on incomes from personal exertion and those from other sources. There is no justification for such extreme differentiation. A man’s investments are usually made possible by his strenuous personal exertion in early life. Those who have lived extravagantly are to be rewarded by the Government in this fashion, while thrifty workers are to be subjected to this excessively heavy burden - and by those who profess to be his friends. The Government is crucifying a section of the community that should be encouraged to continue the good work that it has been accomplishing for many years in building up the resources of the Commonwealth. I remember reading a statement that a large number of people who derive their incomes other than from personal exertion doso mainly from dividends; that dividends especially should be burdened by a heavy taxation impost. To enlighten those who suffer under that delusion, I shall quote a short paragraph that appeared in the Melbourne Argus a little while ago. It reads -

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That taxationhas reached its limit has been demonstrated in severalcases lately, in which companies have been unable to pay dividends or have paid them at a much reduced rate. A striking instance was afforded yesterday at the annual meeting of shareholders inRobertReid and Co. The chairman (Mr.RobertReid) pointed with satisfaction to the stability of the company, but said that taxation was so heavy that it looked as if the trading community had borne all that could be expected of it.. “ During the year ended the30th June,” said Mr.Reid, “Federal and State income tax and land tax, as well us absentee tax, workers’ compensation tax. workers’ unemployment tax, and family endowment tax, actually borne by the company, and which must necessarily come out of the gross profits, to the great extent to which they’ have now been imposed, amount to a crushing burden. But for this a dividend to the ordinary shareholders, even if only a reduced one, would have been possible.” Shareholders who receive no return from their invested capital are not likely to view with equanimity for any length of time their dividends being paid in taxation to the Government, and Mr.Reid’s warning that excessive taxation, by destroying the source, would ultimately prove disconcerting to the taxing authorities themselves, should be taken heed of. Reference to the same subject was made yesterday by Mr. T. L. Jones, chairman of directors of United Provisions Ltd. He said that £41,500 had to be set aside for Federal and State taxation, not including stamp, customs, and other duties. The sum mentioned, he said, was equal to 40 per cent. of the amount received by shareholders, who personally were subject to further taxation.

That will conclude, for the time being, my criticism of the taxation proposals outlined by the Government. I now turn to the attitude adopted by the enemies of the trading banks of Australia. Those people indulge in unfair criticism of the activities of those banks to such effect that at public meetings and, especially at the hustings during election campaigns, they have poisoned the minds of a great section of the people of Australia with the false impression ‘that the trading banks of Australia are an absolute incubus; that their mission is simply to oppress, not to help. The statistics contained in the last banking record available to honorable senators are illuminating on this point. They disclose that, instead of the trading banks calling up overdrafts and refusing to make advances, so further penalizing business men already confronted with serious difficulties, they have, during the past year, adopted the opposite attitude. They have paid due regard to the needs of Australia, and have been particularly liberal in the matter of advances. I believe that these figures were quoted by Senator Pearce yesterday, hut they will hear repetition. My extract reads -

While deposits have fallen £10,9(14,084 on the year. advances Iia ve declined by only £3,175.841. so that where a year ago advances represented 03.32 per cent, of deposits, they aru now 98.14 per cent. During the quarter the decrease in deposits lias been £0,023,455, and in advances £5,183,998. A better view of the position is obtained by adding Government securities to advances. The combined item is £14,000,0(10 in excess of deposits, and the ratio is 105.0 per cunt. A year earlier that proportion was 100.94 per cent., showing that the banks have utilized their resources to the fullest extent in an endeavour to meet the demand for accommodation. At the same time, cash reserves have been called upon, and the reduction is relatively heavier than in deposits.

So that practically the whole of the deposits handled by the banks have been utilized as advances.

Senator PAYNE:

– Whether that be so or not, the extract furnishes a complete refutation of the allegation that the banks are persecuting the people and are responsible for the existing acute financial position.

  1. shall touch on the reference in the financial statement to the expenditure of the Commonwealth Government in certain directions, and particularly to the claims that a large sum of money has been saved in the matter of departmental expenditure. T know that a goodly sum has been saved. But how has that been effected? There have been wholesale dismissals of a certain class of federal employee, those engaged in a temporary capacity, and particularly in the PostmasterGeneral’s Department. A. large proportion of those unfortunates are returned soldiers, many of whom were maimed at the war and are partly incapacitated, but who arc 100 per cent. efficient in their work.
Senator Ogden:

– The difficulty is that it is impracticable to discharge permanent officials.

Senator PAYNE:

– Our first duty is to those men who fought for the country. I claim that this Commonwealth Government has been recreant to its trust. Promises were made that everything would be done by the government of the’ day to ensure that our returned men would not suffer through having volunteered for active service.

Senator Ogden:

– Were all of the men who were dismissed returned soldiers?

Senator PAYNE:

– A question was asked the Postmaster-General in another place on the 5 th November, as follows : -

  1. How many employees have been discharged from his department since the 30th -Tune last?
  2. How many of such employees were returned soldiers?
  3. How many of such employees have been in the department for two years and over?

The answers read -

  1. 2,1.02.
  2. 1,420.
  3. 1,144.

A few years ago, on the representations of certain honorable senators, and members of another place, the Public Service Act was amended to give returned soldiers on the temporary staff of Government departments an opportunity to gain admission to the Service after serving continuously for two years, without qualifying by the usual examination.

Senator Ogden:

– We already have too many public servants.

Senator PAYNE:

– That is beside the point. I personally know of more than one man who complied with those conditions to the best of his ability, but whose desire to enter the Service was thwarted. Immediately they approached the twoyear term, they were given a holiday for a few weeks, and their continuity of service broken.

Senator Daly:

– -That was under previous governments, not this one.

Senator PAYNE:

– I shall quote a case to show that this Government is an offender. I have a letter from a man who has served for eight or nine years in the Postal Department, Melbourne. He is a returned soldier who was badly maimed at the Avar and, . by almost superhuman effort, has mastered his physical injuries and made himself 100 per cent. . proficient at his work. Three times, through no fault of his own, his service was interrupted just as the two-year term was reached. Is that a fair way to treat such men? Now hehas been dismissed. I know that his superiors class him as 100 per cent. efficient. Yet he is to be thrown aside like a dirty rag, to be replaced by a junior mechanic, a single man. [Extension of time granted.]

I thank honorable senators for their courtesy. This man is one of the pluckiest that I know. He has a delicate wife and several children. He is thrown into the ranks of the unemployed, not’ because of any deficiency on his part, hut. because has never been permitted to enter the permanent Public Service. He is only one ease out of scores which I could mention.

Senator Daly:

– Why did not the honorable senator bring up these complaints two or three years ago?

Senator PAYNE:

– Another which I wish to bring under the notice of honorable senators is that of a returned soldier with both legs amputated as the result of injuries received during the war. This man was working alongside the one to whom I have just referred’. He also has been dismissed recently and this is what he has to say: -

It is difficult to reconcile the admiration of our “ gallant soldiers “ as expressed by our Acting Prime Minister in his Armistice Day message with the callous action of his colleagues in dismissing the unfortunate married temporary employees in the Public Service.

Senator Daly:

– Does not the honorable senator realize that these dismissals are not due to any particular action by the Government but take place under statute? Does he suggest that we should dismiss members of the Public Service Board?

Senator PAYNE:

– There is special provision in the Public Service Act for the employment of this class of person and the Minister cannot deny that since the Government of which he is a member has been in office it has taken no action to give effect to the particular section dealing with that matter.

Senator Daly:

– We obtained the highest legal opinion available to see if we had any power, andwere advised that the authority of the Government was limited. Limbless soldiers have been dis missed for the simple reason that their continued employment was not possible.

Senator PAYNE:

– I cannot accept the Minister’s assurance. It is common knowledge that this Government is at all times prepared to bow down to the great majority of the public servants. Recently executive officers of various public service associations declined to accept proposed reductions in salaries and this Government lacked the necessary courage to take a stand against them. If it had made reasonable reductions in public service salaries, the dismissal of these unfortunate temporary employees numbering 1,400 - men who were prepared to give their lives for the country - would not have been necessary. The Minister knows also that many of those who now refuse to accept reductions in salary were eligible during the war but did not respond to the nation’s call.

I believe that a complete change in the outlook of the individual units in Australia is necessary before we can overcome our present difficulties. Action by Parliament will not, of itself, provide the remedy.

Senator Dunn:

– Suppose we submerge the country for 24 hours.

Senator PAYNE:

– I should not have any serious objection to that course if it wore possible, provided I could be assured that those who were worthy of Australia would come to the surface. 1 feel convinced that we shall not, as a nation, reach our true objective until there is a wider conception of the true meaning of the term “ patriotism.” Two years ago I had an opportunity to visit other parts of the world. I came back just as loyal to Australia as I was before I left these shores. But I should be a much happier man if I thought that individual Australians had a higher realization of the duty which they owe to their country; if there was more evidence of a determination to face the facts of life and work harder instead of a disposition to gratify the pleasures of the moment without regard to the future. I am convinced that, if Australians had a better outlook on life, it would not be long before this country emerged from its difficulties. During my tour abroad, I visited one of the provinces of Northern France, and one day was interested to see an elderly man working very hard in the fields. From curiosity I spoke to him asking why he was working so hard and I was very much impressed by his answer. - “Why,” he said, “I am working for France!”. The attitude of that man, I may add, is typical of the people generally in France. They realize that the more they do as individuals, the more they are doing for their country. Unfortunately for Australia, the contrary doctrine has been preached during recent years. The working classes have been told that the less they do as individuals, the better it will be for the Commonwealth. That is a most pernicious doctrine, which I hope to see reversed and eventually eliminated from our public and private life. I am hopeful that out of the adversity through which we are passing there will rise a new Australia, peopled by individuals with a proper appreciation of the results that must flow from hard work, personal sacrifice, and a conscientious performance of the daily task. Only in this way can we hope to make this nation worthy of its splendid inheritance.

I shall conclude my remarks by quoting from an address delivered by a young woman at a public gathering which it was my privilege to attend in Geelong, Victoria, a few months ago. I was so much impressed by the speech that I wrote to the young woman and asked her for a copy. The subject of her address was “Australia at War.” This is what she said -

Australia is at war - at war with herself. She is in the throes of a great crisis, brought about, let it be clearly understood, by herself.

It is folly to blame conditions in the outside world. These may accentuate a crisis, but they cannot produce one in Australia, unless within Australia there are weaknesses to form congenial soil for their growth and spread- ing.

And because these weaknesses exist the crisis is upon us to-day. We stand face to face with two great alternatives - degeneration or re- generation. Choice is trembling in the b alance, and whether Australia goes forward on the pathway of regeneration, or blindly steps over the precipice, depends upon whether the average individual pulls himself together in a spirit of selfishness, or allows himself to drift in a spirit of easy-going, careless selfindulgence. Every force that can be brought to bear to lift Australia from the mire into which she is drifting should be exerted and stirred into greater activity.

The crisis of which I am speaking is given many names. It is called an industrial crisis, a financial crisis, a moral crisis, the general aftermath of war. But be its names what they may, is there not some root cause from which arises the crisis wheresoever it may develop ?

The answer to this question is, I believe, clear anddefinite. The underlying cause of this critical point in Australia’s history is fundamentally due to the lack of virile, selfdetermined, idealisticyet practical individuality.

Were every Australian thus equipped, this crisis would cease to be. It exists because there is in this country no clearly defined purpose, no self-determination, no vision ardently pursued, because Australia lives from hand to mouth - buys what she cannot afford to buy - spends what she cannot afford to spend - indulges herself in that which she cannot afford to indulge- treads any by-path which happens for the moment to take her fancy, and improvidently seeks to doctor her ills at their surfaces instead of attacking them at their roots.

The crisis, however widespread and complicated it may be, will soon disappear if every citizen will remember amidst the pressing preoccupations of his daily life that the honour and the welfare of his country are in a definite measure in his individual keeping, and that he can do nothing in his own individual life, however exclusive to himself the action may seem, which docs not react upon that honour and upon that well-being. As is his honour, so is the honour of the country of his birth. As is his rectitude, so is the rectitude of this land. As is his prosperity, so is the nation’s prosperity. His strength sustains Australia. His wisdom illumines her. His life energizes her, and his weaknesses devitalize her. If the individual be selfish and self-centred, Australia draws nearer - to dissension and quarrelling. If he be brotherly, she draws near to entry into a mighty national brotherhood. If he lives for her, Australia will begin to live for the world, setting a great example of reconciliation between the interests ofa nation and those of the world at large.

Is not, then, the crisis an individual matter even more than a collective one? Or, to put the question otherwise, is not the crisis to be overcome more by a change of attitude on the part of the individual even than by legislative and administrative processes? Granting the value of the latter, the former is a direct approach to the very roots themselves of the ills from which our laud of the Southern Cross suffers.

The tiling, then, that is most to be desired and fostered in this fair land of ours is a feeling of brotherhood, goodwill, courtesy, and supreme respect for law; then we shall go forward with eager hearts to make Australia that which she has been declared to be -a promised land.

Senator Sir HAL COLEBATCH (Western Australia)[11.43]. - It seems to me that any one reading the financial statement presented by the Acting Treasurer (Mr. Lyons) in another place a few days ago,- must be impressed by the extraordinary discrepancy between its first and second portions. The first half is evidently the voice, indicating the intricacies of the maze in which Australia has lost itself. The second half is the band that would lead us out of it. The voice is the voice of Lyons, and the hand is the hand of caucus. Because caucus has not listened to the voice of Lyons, the hand is leading us further into the maze - into the poisonous, stagnant pool that lies in its centre, instead of into the bright sunshine that awaits us outside.

I direct the attention of Government supporters to one or two remarks in the opening portion of this statement. If they will turn to page 6, they will find the Acting Treasurer explaining that our position as a nation would be benefited if we could satisfactorily fund our outstanding obligations abroad. Then follows a statement showing the extent to which Australia’s stocks in the London market have depreciated in comparison with .New Zealand and South African securities. That i.3 a fairly clear indication of om- position. If honorable senators will refer to the next page, they will find a very frank, clear and truthful statement of the effect upon the community. Up to the present the chief sufferers are primary producers, the unemployed and those in receipt of incomes from business profits which have seriously declined or have entirely vanished. So says Mr. Lyons.

During the recent New South Wales election, I was induced - I admit to a large extent against my better judgment - to deliver one or two addresses in and around Sydney. The statement to which I have just referred was made by me time after time, but always received with jeers and hoots of derision from the supporters of labour candidates. They declared that the producers and business people mentoned by Mr. Lyons were not suffering at all, and contended that the so-called depression was something manufactured in order to reduce the standard of living of the workers.

On the same page we find the following paragraph : -

The people of Australia have accustomed themselves to a condition of prosperity due in part to high prices for our staple exports and to the heavy borrowings abroad.

That is a statement which I have ‘made over and over again, but which honorable senators opposite will not accept as accurate. Finally I quote the following - this is where the voice ends: -

The community generally is at present in a state of inertia and is awaiting a lead from some responsible authority to restore con 1 deuce. That lead should undoubtedly come from the highest representative body in the community, which is the Commonwealth Government. Thu Government recognizes thisresponsibility. The first need in present circumstances is that the Government should take steps for the balancing of the budget.

I now come to the proposals of the Government which have been submitted as the best means to overcome our troubles. I do not intend to deal with them in detail; but 1 mention in passing the proposed increases in taxation. Apart altogether from the objections raised by Senator Sir George Pearce and Senator Payne, I contend that they constitute a flagrant repudiation of the arrangements made at the June meeting of the Loan Council and confirmed at a meeting of that Council in August. At the June meeting of the Loan Council the then Treasurer (Mr. Theodore) gave, a definite assurance that such additional taxation as might be necessary, in addition to the economies which would be introduced, would be effected without invading those avenues of taxation which must necessarily be left to the States to enable them to balance their budgets. The same attitude was taken up at the conference in August, and the Acting Prime Minister in the final statement issued, repeated in the same words the undertaking that such additional taxation as was necessary would be imposed without invading the revenue producing possibilities of the States. Not only has that very solemn undertaking been repudiated and departed from; but repudiated to such an extent that I think it will be quite impossible for the States to impose any additional taxation if these contemplated taxes are imposed. Therefore, it becomes quite impossible for the States to do what the Commonwealth says is the first essential in the matter of balancing budgets.

We have a repudiation of the undertaking which the Government recognized and which it declared was necessary if the budgets were to be balanced.

Reference has been made to the contemplated reductions in salaries. As far as the tax on the allowance to Ministers and members is concerned, I say at once, that it is wrong in principle and entirely inadequate. Instead of a tax which appears to be something of a temporary nature to meet the depression which some optimists think will disappear in the course of a year, there should be a frank recognition of the position in which Australia is placed, and of the long, hard road we shall have to traverse if we are to emerge with credit and honour and reach a state of prosperity. In my opinion there should be a permanent reduction in the allowances of Ministers and members, and, instead of it being 10 per cent., it should be at least 20 per vent.

Under the Government’s proposals public servants receiving £725 a year or less are to he exempt from the salaries tax. I should like to tell honorable senators of a little incident that occurred a short time ago in Sydney when I was returning from the city on the last tram. I was the only passenger and the conductor entered into conversation with me. For some reason or other he thought I was a member of the New South Wales Parliament, and he asked me what the Government intended to do to relieve unemployment. I asked him what he thought of the position. He informed me that he had been rationed and his wages reduced by 13s. a week. He did not mind that because he recognized the difficulties confronting the authorities. He was better off, he said, than a good many other fellows, andhe would not mind the reduction in wages if it would help to overcome the unemployment trouble. He further informed me that he had a brother-in-law who had been out of employment for a great many months, and whom he had to assist. He was willing to do what he could to maintain his family, but found himself confronted with an additional difficulty when he learned that tea was to be taxed and that an additional impost was to be placed upon imported tobacco. He said that he did not know how the people would be able to carry these extra burdens. He further informed me that he was amazed to read in the newspapers that certain Commonwealth public servants, who have security of employment, long-service and generous annual leave, and a pension when they retire, were not to be asked to contribute anything, even though in receipt of as much as £14 a week. He did not, and I do not, think it fair that a vast majority of the public servants should be exempt from taxation in this way. I commend that opinion to honorable senators opposite. Most members of the Public Service, I am sure, think that their first duty and responsibility is service to the community, but a contrary view has been accepted by Ministers.

A further statement in this document reads -

  1. . It would be quite impossible in a period of eight months to so reconstruct the budget that a balanced ledger could be secured for the present financial year.

At the beginning of August it was known by every member of the Commonwealth Government that it would be impossible in a period of ten months to make the necessary adjustments. In spite of the knowledge that the necessary adjustment could not be made within ten months, nearly three months delay occurred, when the task became even more difficult.

The only other direct reference which I intend to make to the Acting Treasurer’s financial statement is in connexion with the proposed financial assistance to South Australia. That proposal will have my heartiest support, because I fully realize that notwithstanding the troubles which the other States are experiencing no other State is so deeply involved in difficulties that are not of its own making - I am not suggesting that South Australia is not in some sense responsible - as South Australia As this position has been brought about to some extent by the long continued drought, it is the responsibility of this Parliament to render whatever assistance it can to that State.

I do not think it is profitable at any time to try to place the blame on any particular shoulders, but I feel that we shall not get out of our present difficulties and set ourselves on the right track again until we fully appreciate what has brought about our present trouble. I do not intend to blame any particular government or political party, because all parties in power, both Federal and State - I willingly include myself as an exmember of a State Cabinet - are responsible. The twin policy that we have been adopting has brought, and, eventually, always will bring to a state of bankruptcy the country adopting it. That twin policy to which I refer consists of extensive borrowing abroad, combined with a high protective tariff. I intend to make the truth of that statement absolutely clear. I assert that, apart from world causes, no other single factor has contributed so much to the present unfortunate position of Australia, and done so much to damage our credit, as heavy borrowing abroad combined with high customs duties. It should be clear to every one that year by year we have been spending as revenue an enormous per centage of borrowed money. That policy was the direct cause of the collapse in Victoria in the early nineties. Victoria, was then operating under a high protective policy, and was also borrowing extensively overseas.

Senator Rae:

– What of the land boom?

Senator Sir HAL COLEBATCH.That was one of the consequences of adopting such a policy. In 1893 tlie Victorian correspondent of the London Times, who, by the way, Was a woman - Flora Shaw - pointed out that at that time Victoria was spending as revenue millions of pounds of borrowed money. Whenever a country spends as revenue large sums of money actually borrowed, there will be land and other booms, because when money is made plentiful booms always follow.

Three years ago, I was appointed a member of a commission to inquire into the working of the Commonwealth Constitution. One of my first efforts was to endeavour to ascertain the extent to which the practice, to which I have just referred., had been adopted. I was not concerned at the moment with its financial or economic aspects, but with the results as between the States from a pursuance of such a policy. I commenced the inquiry on the assumption that the older States of the Commonwealth had undertaken a good deal of their early develop mental work before high federal customs duties were imposed, and, therefore, when costs were lower. On the other hand, the newer States, particularly the State, which 1 have the honour to assist; in representing, had been compelled; to carry out their developmental’ policy at higher costs, due to a. large extent to the protectionist policy of Australia, be that policy right or wrong. The first step I took was to endeavour to obtain front the Customs’ Department a return showing the amount paid directly by governments as customs taxation on their own importations. 1 recognized, of course, that it would represent only a fraction of the amount of loan money taken annually into revenue account by the Commonwealth Government. But, curiously enough, although the royal commission pursued its inquiries in this direction with diligence for the best part of a year, it was unable even to find out how much the Commonwealth Government had collected through customs taxation from the State Governments, without any regard whatever to the amount collected from private individuals supplying material to those Governments for the carrying out of loan works. The fact that this information could not be obtained was to my mind an indication of the complete blindness of the authorities to this pernicious policy of spending as ordinary revenue a large percentage of loan money, the effect of which is not merely to increase the cost of work undertaken by the State Governments - and that increase does not by any means rest at the amount which the State Government has to pay in customs taxation - but also to increase the wages bill and everything else. The British Economic Delegation, which visited Australia towards the end of 1928, and submitted its report in February, 1929. made this observation : -

Loan moneys raised overseas can come only to Australia in the form of goods. These goods are subject to the customs duties provided for under the Common wen I til tariff on importation into Australia, and. are in this way taxed to an extent estimated at from 15 to 20 per cent, of their value. The result is that this proportion of moneys borrowed abroad for capital purposes comes to the Commonwealth as revenue and is spent accordingly. This diversion of capital funds to revenue is obviously bad fi nance.

Our annual borrowings of recent years have been, roughly, £40,000,000 per annum. Twenty per cent. of £40,000,000 is £8,000,000, 15 per cent. is £6,000,000. Taking the mean between the two, we find that each year for the last ten years no less than £7,000,000 of borrowed money has been taken into the ordinary revenue of the Commonwealth. For the whole period £70,000,000 of this borrowed money has been taken into Commonwealth revenue. No country can pursue such a policy without finding itself bankrupt.

Senator Barnes:

– But that happened under the Nationalist administration.


– My friend is so imbued with party spirit that he does not seem to be capable of considering a matter on its own merits. I prefaced my remarks by saying that I attacked no party. I even went so far as to say that, because I had been a member of a State ministry for seven years. I must be held accountable so far as that Ministry could be held accountable for what had happened. The present is no time for saying. “It was his fault, and not. ours.” It is the time for looking at matters fairly and squarely to see where we have gone wrong so that we may not go wrong again.

It is an indisputable fact, to which the British Economic Delegation drew attention, and of which the creditors of Australia and investors abroad are fully conscious, that for ten years past we have each year taken into ordinary federal revenue no less than £7,000,000 of loan money and spent it as though it were revenue, with the result that we find the interest and sinking fund burden upon the loans we have raised almost beyond our capacity to bear. If we divert into ordinary revenue, and spend as such, 20 per cent. of the many millions we borrow, leaving only 80 per cent. for the works themselves - many of them sound, others perhaps subsequently found to be unsound, but which we expect to provide interest and sinking fund upon the amounts borrowed for their construction - is it not inevitable that after the lapse of years the burden of providing that, interest and sinking fund becomes extremely heavy? It was recognized that the crisis of the’nineties, which brought Victoria almost to ruin, arose from this cause. Yet the Commonwealth, refusing to learn from the past, has started off on the same policy. The other States were not in the same position as Victoria in the’nineties; they did not crash because they had not in operation the twin policies of borrowing abroad and spending loan moneys a?” customs revenue. I hope that the lesson we have had on this occasion will not he forgotten and that never again shall we carry on a policy which will permit of large sums of borrowed money being spent year by year as ordinary revenue. I have quoted the figures for the past ten years, but the practice has continued since the commencement of the federation under allGovernments.

In 1926 a pamphlet was issued in London and addressed to the Imperial Conference. Its authors attacked Australia’s credit on three grounds. The first was that our borrowings were excessive in comparison with the increase in our population. To my mind that was directly attributable to the false policy we were pursuing; we were not as a matter of fact spending the whole of our borrowing on developmental work, 20 per cent. having gone into ordinary revenue. The amount borrowed was not having the effect it should have had in opening up opportunities for increased employment. The second ground of this attack upon Australia’s credit was that too much of our borrowed money was being spent on State enterprises. The extent of that I think has lessened very considerably in more recent years. The third ground of this attack was that, as a whole, Australia, with the exception of Western Australia, had no adequate sinking fund, the investment of which was assured on the market in which the money had been borrowed. We have not yet rectified that position by establishing over the whole of Australia an adequate sinking fund, the investment of which is assured on the market in which the loan is raised. If we borrow money in America, the demand is made that our sinking fund in respect of the amount borrowed shall be invested in the loan itself. London has never asked for that to be done, but it has asked that an adequate sinking fund should be assured for investment on the market in which the money is borrowed. Although Australia, three years ago, stubbornly -refused to agree to that condition, because at the time it was thought that our greatest difficulty would be in meeting our heavy local obligations, I am convinced that one of the first steps towards the restoration of Australia’s credit is that inthis respect we should do what London reasonably demands, and have a sinking fund in London that will always be available for investment on the market in which the loan is raised.

Senator GREENE:

– It is a great pity that London did not insist on that condition from the first.


– I am entirely in accord with what the honorable senator has said. From that time London has practically insisted on this condition and it is because it is not being observed that our credit in London has come down. Two or three years ago I urged, in n pamphlet, that a great mistake was made in setting up a single borrowing authority instead of seven small borrower who were very much more acceptable to the London investor. There is, however, no need for me to repeat that argument now.

This policy of taking annually into revenue account £7,000,000 of borrowed money - it has seldom amounted to less - has also had the effect of putting up wages - not the real wages, but money wages - in order that the worker might live under the heavy cost of living thereby brought about. It has, therefore, had the effect of so increasing the cost of production that the primary producers at the present time are paralysed. I did not speak last night on the motion moved by Senator Lynch, because I was in hearty accord with it, and it seemed to be desirable to get a division on it, but if I had spoken I should have liked toimpress one thing upon honorable senators. For a great many years we have bacl good prices and, with the exception of South Australia, and portion of Queensland, good seasons for our agricultural industry; but it is a shameful commentary on the public policy of Australia that in the first season of adversity our primary producers are brought almost to the ground. Public policy has so in creased costs of production that even in years of good seasons and high prices our primary producers have not been able to accumulate any reserves, and have been compelled to live from hand to mouth. There should be in this a lesson for the future, that unless the primary producer can make good and substantial profits in seasons of good prices and favorable climatic conditions, he is bound to go to the ground whenever we have a. bad season’ or low prices. It is utterly wrong that in the first season of trouble he should be in the position in which he finds himself to-day. But it is due to the false standard which has been set up, mainly by taking annually into revenue account £7,000,000 of borrowed money. If that had not been done during the last ten years the primary producers of Australia would have been able to get out of debt and accumulate such reserves that they could have regarded almost complacently one, or even two seasons of such bad prices that they could hardly get their own back again. No country can be said to be on anything like a stable basis if the first blast of adversity is likely to bring it to the ground. If we get through these present troubles we must bear in mind that our primary industries must not be forced to live from hand to mouth - they must be able to make progress and accumulate reserves - and until we reach that position neither our primary industries nor the country itself can be considered solvent.

I entirely agree with the inspiring address read to us by Senator Payne coming from a Geelong lady. It is altogether stupid for us to talk about our troubles being due to world causes. It is, no doubt, true that there is a worldwide depression, but that was inevitable. We could not have a war, almost worldwide, without some one having to pay for it. Our troubles are not entirely due to that cause, and we can best ascertain how we have contributed to them by comparison of our credit abroad with that of other countries. On the London market Commonwealth 6 per cent. stocks have fallen by £11 within the last couple of years, and of that fall they have dropped £5 15s. within the last month. At the. outset of my remarks I drew attention to the Acting Treasurer’s reference to the great benefit that would result to Australia from the satisfactory funding of the £37,000,000 of floating debt in London. Is it not obvious that the possibility of making that satisfactory arrangement; has been desperately prejudiced by the fact that happenings in Australia have caused our stocks in London to fall by £5 15s. within the last month? I am taking no notice whatever of the sudden drop that occurred at the end of last week. Happily the position has recovered and is now what it was before that tragic drop took place. In the meantime, New Zealand’s 6 per cent. stocks are quoted at £105 17s. 6d. on the London market, as against £91 15s. for comparable Australian stock. That is to say, an investor in London will pay £14 2s. 6d. more to obtain New Zealand stock than for Australian stock returning the same interest. If we go into the more minute details Ave shall find that there is a difference of 10s. ; but that does not affect the general position. In New York, on the 19th December, 1929 - about eleven months ago - Commonwealth 5 per cent. stock stood at £94. In the early part of last week - I am not referring to anything that happened towards the end of the week - those stocks stood at £72. A week earlier Canada had floated a loanof 100,000,000 dollars- about £25,000,000- at 4 per cent. with a small discount, making the cost to the country and the return to the investor £4 5s. per £.100. That means that American investors will pay £100 for a Canadian bond yielding him £4 5s. per annum interest, repayable in 30 years, while he will give only £72 for a Commonwealth bond paying 5 per centinterest and redeemable at the full amount of £100 in 25 years.

Senator GREENE:

– Last week Australian4½ per cent. stocks sold in New York at £66.

Senator Sir HAL COLEBATCH.Those figures are sufficiently tragic to make us recognize the extent to which our own actions have damaged our credit, and the necessity for putting things right. I am not speaking of anything that has happened during the last week. It is true that there has been a big fall lately; but the genesis of the whole business is that investors abroad have at last awakened to the fact that an enormous proportion of the money borrowed by Australia during recent years has been regarded as ordinary revenue, instead of having been applied to the development of the country’s resources. Within the last fewweeks South Africa floated in Londona loan of £5,000,000 at4½ per cent. at £95 10s.. showing an effective rate of from £4 15s. to £4 16s per cent, according to the date on which the loan is redeemed. At the same time. Commonwealth loans bearing a higher rate of interest were selling at £80 5s. That was the price before the last big drop - the price to which Australian stocks have since recovered. The latest quotation is from £79 to £82. The quotations appear in the press every Saturday morning. To-morrow’s newspapers will probably show that on Thursday of this week, Australian 5 per cent. stock stood at £80 5s. A London investor is prepared to pay £100 for New Zealand stock which will return him £4 15s. interest, while we will give only £80 for an Australian bond, returning him 5 per cent, interest and repaying him a full £100 on redemption in anything from fifteen to 45 years at Australia’s option.

Senator Thompson:

– Those other countries have not Labour governments in office.

Senator Sir HAL COLEBATCH.That is not an adequate answer. In view of the dominance which caucus is exercising over the Federal Labour Government. I. should be delighted to see some other government in power. Nevertheless, I do not think that the placing in power of a government representing a different political party would remove the deep anxiety now in the minds of investors abroad, an anxiety due to the knowledge that for many years Australia has been borrowing enormously and spending 20 per cent, of her borrowed money for ordinary purposes of revenue in order to bolster up a boom standard of living instead of developing the resources of the country. That is the root cause of our trouble. It is futile to suggest that the present Government is in any way responsible for that particular phase of the subject. Stocks have fallen steadily during the past two years. They have come down with tragic suddenness during the last two mouths because of a fear on the part of investors that Australia, instead of being controlled by a government, is controlled by some outside body. Generally, investors abroad are not con*cerned whether a Labour or a Nationalist Government is in office ; they are as ready to lend money to one as to the other. It is not the mere fact that a Labour Government is in office that disturbs investors; it is a fear that there is no government at all in office.

While these things have been, going on in Australia, what has been happening in the Old Country? A conversion loan of £.100,000,000 offered, recently at 4 per cent, was not only oversubscribed, but many tenderers offered a premium. That the loans floated by Canada, South Africa, New Zealand, aud the Mother Country met with such a good response from investors shows that the price of money on the London market is falling. It remains for Australia merely to re-establish her own credit to share in the benefits of that fall.

I have already indicated the effect of our present loss of credit on the funding of our £37,000,000 liability in the Old Country. The same argument will apply in connexion with our local debts falling due in December of this year. I join with other honorable senators in expressing both the hope and the belief that that funding operation will be successful. It is the duty of every citizen to help in that direction by showing the world that Australians have confidence in their country, and regard the loose talk of repudiation only as another instance of the British custom of allowing freedom of speech even to the point of license. We should make it clear to the world, that our national sentiment is such that repudiation has no permanent place in the minds of our people. Then there is the matter of meeting monthly requirements. Although during the last four months the position has become very bad, it will improve as the year goes on, because certain revenues are received in the second half of the year. Nevertheless, there is only one thing that can enable the Commonwealth and State Governments to meet their monthly obligations; and that is a return of public confidence. Nothing else will suffice. I can understand the attitude of the worker who is not particularly concerned about meeting our obligations in respect of debts contracted in the past. But I suggest that he is vitally concerned regarding Australia’s credit in the future. What is to be the future of Australia if, by destroying public confidence, we drive away investors from abroad? I am not peaking so much of investors in public loans, because I hope that we shall never again he betrayed into so extravagant a loan policy as we have followed in the past; I allude more to the investment by private people in the development of the resources of our country. I say without hesitation that the development of those resources, the maintenance of the Australian standard of living, the increase of population to an extent sufficient to protect Australia in view of an overcrowded and dreadfully disturbed world, and the elimination of our unemployment problem, depend to a great extent on the generous investment of private funds from overseas. Unless we can restore confidence those investors are not likely to assist us. I urge the workers of Australia, as well as the Government, not to be greatly concerned with speculators and “boomers”, but to consider the financial stability of the country from the point of view of its effect upon themselves. I remind them that unless confidence is restored to the extent, that private investors will be induced again to invest in Australian securities, it matters little what laws we pass to maintain our standard of living. Without a restoration of confidence the unemployed in our midst will not get back into employment. There is no future for this country, or for its working men and women, that is not dreadful to contemplate should that confidence not be restored.

Senator Barnes:

– We should be all right if we had confidence in ourselves.’


– It is tragic to reflect that because of the destruction of confidence we, in Australia, are doing less work and creating less wealth than at any stage of our history, notwithstanding the need for doing more. I agree that it is utterly futile for us to throw the whole of the blame on the workers. This rot has set in from the top; and it must he cured from the top. Money and brains are as necessary as is the free and friendly co-operation of the workers. Perhaps, the most tragic thing about the whole position is that in this time of stress our people are divided into two political camps, as though the legislation that helps one must necessarily injure the other. Surely, we can see that the prosperity of Australia as a whole is the only thing that will help either class. We must co-operate and work together or we shall go down together.

What is the alternative to the proposals agreed to at the Melbourne conference? 1 have no hesitation in saying that we should already be a good way out of our troubles had the resolutions of that conference been faithfully carried out. There would have been no difficulty iti funding outstanding liabilities in London at satisfactory prices if immediately at the conclusion of the conference the position had been honestly met. I direct attention to the statement of the .Acting Treasurer in which he emphasizes the great benefit which would accrue to Australia if those debts were funded. We can only hope that Mr. Scullin’s influence in London will result in that being done even now. The financial statement before us sets aside the proposals which emanated from the Melbourne conference and substitutes alternatives. I notice in this morning’s papers that the Government has removed the embargo which hitherto existed on Tattersalls sweeps. I do not know whether the Government thinks that the people of Australia can gamble themselves out of debt, or whether it is under the impression that people find it so difficult to send money to Tattersalls that by removing the embargo there will be more money to invest, more revenue for the country, and greater prosperity. Personally, I have very little confidence in expedients of that kind.

The other proposal is that there shall be a drastic alteration in the banking system of the country. I am aware that we shall have a more favorable opportunity to discuss the matter, but there are one or two observations that I should like to make. It was emphasized by Senator Barnes yesterday that almost every civilized country in the world has seen the necessity to adopt central banking legislation. Let me remind the honorable senator that other countries have done that for two purposes: first, to stabilize their currency, and, secondly, to prevent inflation. If we establish a central reserve bank, the possible application o/ which may be to debase the currency or to facilitate deflation, we must not delude ourselves with the idea that we are doing what other countries have done. We shall be doing the very opposite. Reference has been made to the banking experiments of Prance. We are told that they were designed to bring about an inflation in that nation’s currency. My first visit to France occurred towards the end of 1923, and between that time and when I left England early in 1927, I visited Prance many times and witnessed what happened there. I saw the misery of the people during the period that a policy of inflation was in force. It was the custom of the wage-earner to spend his wages as soon as he was paid, because he was afraid that the value of his money might depreciate within an hour. In 1926, after the long period of inflation and refusal to balance the budget - the two go together - France had entirely destroyed the credit of the country, and brought about the debasement of the franc until its value was fast approaching vanishing point. One radical socialistic ministry after another was set up, only to crumble between the hard facts of an unbalanced budget and an obstinate party majority. Does that not contain some lesson for Australia? So long as those two things persisted, the position of France went from bad to worse. It is related that when the President of France greeted M. Herriot, who had been the first, and was destined to be the last of the Premiers of the Left, he said “Get it over quickly! M. Poincare is to follow !” He did. Within a few days Herriot’s ministry had resigned. M. Poincare was appointed Premier, and he balanced the budget, stabilized the franc and opened the door to a prosperity such as France has not enjoyed for a long time. M. Poincare saved France from a tragically desperate position. By deflation, he improved the value of the franc from Id. to 2d., and, by stabilizing it, gave some permanent value to the currency of the country, with the result that France has started on the road to prosperity and security. I counsel honorable senators to profit from the experience ofFrance ; to draw the conclusion that we in Australia have a chance to do what France was persuaded to do only after she had suffered for years under a false policy, and brought the most extreme misery to her people, particularly to the wageearning classes. Australia has a chance to bring about the same result without enduring the hardship imposed on the people of France.

There is an old definition of a banker : “ A man who takes care of other men’s money, and lets them have it when they want it.” I urge honorable senators to be very wary about setting up an institution which would involve an alteration of that definition so that it would read, “ A politically constituted authority that takes the people’s money and does what it likes with it.” I would particularly ask what would be the effect on our credit abroad if there was a change in the monetary policy of the country replacing the original definition by the other, a change flying entirely in the face of the policy of countries which have established central reserve banks? Would it be to increase or to destroy confidence in our national stability? Again I counsel honorable senators to let their decision be guided entirely by their belief in that direction. If it is going to destroy confidence abroad, away with it, because it must hurt us. If it would do something to restore confidence in us abroad, let us have it quickly, because that is the only thing that can help Australia at this juncture.

I do not for a moment think that British investors have lost their confidence in the resources of Australia. Let us remember that they have put £600,000,000 into Austraiian securities - something like one-seventh of their total overseas investments. But they have last confidence in Australian policy. There is no question about that. We have pursued a foolish policy for a great many years, and the logical conclusion of folly is disaster. I believe that there is still time to restore confidence. But we mustact quickly. Already we are faced with a flight of capital from Australia. Already those who can are converting their liquid assets into cash, and, notwithstanding the high rate of exchange, are exporting that cash from this country. I know of instances where products have been exported without any intention of bringing the proceeds back to Australia.

There are two methods of overcoming that difficulty. One is the expedient usually adopted by governments which are afraid to face the facts; by placing a prohibition on exports. That necessitates the issuing of a licence to export, one of the conditions of the licence being that the proceeds must come back to the country. The adoption of such a policy would complete the flight of capital. It would depreciate the Australian £1 almost as quickly as would an extravagant inflation of our currency. There is the other method, which I urge the Government and this Senate to adopt. It is, by the pursuance of a sane policy, to strain every nerve to balance our budget, disregarding political advantage. That would restore the confidence of investors. If we can do that, those who have money invested in Australia will be in no hurry to withdraw it, for I believe the possibilities of Australia are unrivalled. I urge that we should adopt that policy, accepting all the sacrifices, the difficulties and the hardships that it would involve. But action must be taken quickly.

Which road are we to take? That involving the flight of capital from Australia, and the alarming depreciation of the Australian £1, or that which, by wise administration, will induce those people abroad who have capital to invest it inthis country? I remind honorable senators that the accumulation of capital for investment is growing daily. Let us instil in those abroad the belief that there is no better country in which to invest their wealth than a sanelygoverned Australia.

Debate (on motion by Senator Guthrie) adjourned.

Sitting suspended from 12.41 to 2.15 p.m.

page 345



Debate resumed from the 13th November (vide page 259) on motion by Senator Carroll : -

That this Senate strongly advocates the encouragement of increasedintra-Empire trade and the development of the ideal of Empire Economic Unity, and considers that the most effective means which can immediately be employed towards that end is the adoption of a comprehensive system of reciprocal preference calculated to preserve and expand the particular and essential industries of each section of the Empire, upon which the prosperity of all depends.

South Australia

– Last evening, when I obtained leave to continue my remarks, I was discussing the possibility of an expansion of trade between Australia and other countries, with particular reference to an increase in the trade relationships between the Motherland and other portions of the British Empire. This movement would have, an important effect upon the marketing of Australia’s surplus primary products. As honorable senators are aware, we have a considerable volume of trade overseas in all classes of primary production over and above the quantity required for the needs of our people. We produce largely in wool, wheat, meat, butter and sugar. I, with other honorable senators, was hoping that the Imperial Conference, now nearing its end in London, would accept proposals for an extension of Empire trade, having in mind, so far as Australia is concerned, the acceptance by the Government of the Mother Country of proposals for the taxation of foreign wheat and a reciprocal arrangement for the marketing in Great Britain of a larger proportion of Empire-grown wheat. As this phase of the subject was fully discussed last evening by SenatorR. D. Elliott, I do not propose to traverse much of the ground covered by that honorable senator ;but it seems to me that some brake on public opinion in the Mother Country is preventing the British Government from adopting any scheme to give the dominions a greater share of that market. In my opinion, the real obstacle to Empire preference is not so much a prejudice in the’ British mind against the taxation of foodstuffs generally, as a desire to protect British investments in other countries.

Senator R D ELLIOTT:

– At the present time in England the principal argument against reciprocal trade relationships is the belief that Australia would have nothing to do with it.


– Australia has shown conclusively that she is prepared, at all times, to meet the Mother

Country in a policy of preference. Since I addressed the Senate last evening, I have had a conversation with the Assistant Minister for Trade and Customs and the Acting Minister for Markets and Transport (Mr. Forde), who informs me that the value of preference given to Great Britain by Australia amounts approximately to £10,000,000 per annum, while the preference given to Australia by Great Britain is less than £1,000,000. Actually, the British preference is just a little over £750,000 a year.

Preferential trade with the Mother Country has been the policy of the Commonwealth for many years, and I think there is abundant evidence that Australia is prepared to greatly widen the area. One of the arguments against this policy in the Mother Country is, I understand, the desirability of fostering trade with the Argentine where, as honorable senators know, there is a heavy investment of British capital. In recent years conditions in the Argentine have been so turbulent that British statesmen and commercial interests have become uneasy about the security; hence the disposition to increase trade with the Argentine in order to protect British investments in that country. This may be a perfectly laudable thing to do, and I have no doubt that the British policy is, to some extent at all events, directed to this end. But it is retarding the growth of reciprocal trade relations between the Mother Country and her dominions. We have had abundant evidence during the la3t few months, of the desire of other nations to enter into some kind of trade agreement with the Commonwealth, and there is more than a suspicion that, in her desire to keep faith with Great Britain in this matter Australia is sacrificing a considerable amount of trade. For example, France for many years has beeD importing £15,000,000 worth of Australian primary products, and in return has been selling in Australia goods to the value of only £3,250,000. Belgium also purchases over £9,000,000 of Australian exports and sells us goods valued at less than £1,000,000. I remarked last night that if we could not keep our money in Australia it would be to our advantage to keep it within the family - the British Commonwealth of Nations. Any failure to develop reciprocal trade relations with the Mother Country cannot be charged against the Commonwealth because, as 1 have shown, it has always been prepared to give increased preference provided Great Britain responded to the gesture. If this trade movement is not encouraged, then, in order effectively to develop the Commonwealth and provide markets for our products, we shall be obliged to look elsewhere. We shall have to enter into reciprocal trade relations with those countries which have proved themselves to be good customers for Australian production.

Despite heavy responsibilities cheerfully accepted by the people of Australia to encourage the development of the sugar industry, the sugar-growers of the Commonwealth are to-day in trouble. For many years there has been a prohibition on imports of sugar grown by coloured labour and under conditions not desirable to be introduced to Australia, but the success of the Commonwealth policy is being endangered owing to the large increase of production beyond the needs of the Commonwealth. All our surplus sugar has to be sold in open competition in the world’s market. Great Britain consumes approximately £33,000,000 worth of sugar per annum and, in recent years, has been taking Australian sugar to the value . of £2,000,000. It has occurred to me that, under a policy of reciprocal trade preferences, it should be possible to market larger quantities of our sugar in Great Britain. The Minister for Markets (Mr. Parker Moloney), as honorable senators are aware, is now in the Mother Country engaged on a trade mission on behalf of the Commonwealth, l t has been reported in the press that he has had an interview with a representative of the Government of France with a view to securing a revision of the drastic tariff conditions recently imposed by the French Government on the imports of Australian wheat. We are given to understand that the conversations, which have taken a hopeful turn, will be resumed at an early date. I sincerely trust that the outcome will be an agreement for the marketing in France of Australian primary products on mutually satisfactory terms. I understand also, from newspaper reports, that on his return journey to Australia the Minister for Markets intends to visit Canada to inquire into the possibility of improving the trade between the Commonwealth and the Dominion. In 1928-29 we exported to Canada goods to the value of £814,000. and imported from that dominion, commodities valued at £4,872,000. Australia produces many commodities which should find ready sale in Canada, and I am hoping that, as a result of the Minister’s negotiations, our trade with that country will improve considerably. There should also be an opportunity in New Zealand. For some years our exports to New Zealand totalled over £5,000,000, but latterly it declined to about £2,000,000. There must, of course, be some explanation for this downward movement. I do not pose as an expert, but it seems to nif that as Australia is in the position to supply the classes of goods which New Zealand requires an investigation by the Minister on his return to Australia should disclose the cause for the decline.

I have no desire to detain the Senate at greater length. T believe that good purpose will be served by the carrying of this motion. Not only will public opinion in Australia be stimulated, bin the Government and the people of Great Britain will be made to realize that thiCommonwealth Government is in earnest in its desire to extend the policy, if in return it can obtain from Great Britain a certain measure of trade preference to help us out of some of our difficulties. I am in complete agreement with Senator Guthrie that no charge of inefficiency or slackness can be laid against our primary producers. The primary producers of Australia have in their pioneering efforts in the first instance, and in maintaining production at a reasonable volume, to contend with difficulties more peculiar to this country than to any other. Throughout practically the whole of this vast continent the soil, with the exception of drought periods, is capable of producing almost anything. But we have possibly a greater variation, in rainfall than exists in any other country. Moreover, over large areas producers have to contend with the disadvantage due to the absence of high ranges of mountains, which are responsible for local rainfall, and feed streams that provide water supplies.

Practically the whole of Central Australia is devoid of such mountain ranges, and intheir absence the rainfall is light, thus rendering the country practically waterless. Therefore, the settlers in that part of Australia have to depend upon the great artesian and sub-artesian basins, which have been tapped at considerable cost, to provide sufficient water for stock and human consumption. Our primary producers have had many natural disadvantages with which to contend, but, fortunately, they have succeeded in overcoming many of them. In the main, they have established a volume of production under the prevailing conditions which ca.n be favorably compared with that of the best agrarian stock in the world. I venture to say that if Great Britain would realize this fact, and also that there is nothing in the detrimental statements which have appeared in the Old Country, they would consider the question of Empire preference in the manner in which it has been viewed by honorable senators who have spoken in support of the motion, and that great and lasting good to the British Empire would result.

Senator Sir GEORGE PEARCE (Western Australia) [2.24]. - I do not wish to detain the Senate at any length in discussing this subject; but I should not like the’ motion, which I intend to support, to be passed without expressing my “opinion upon it. We should be honest with ourselves and to the other portions of the Empire, and not merely trifle with phrases. The motion relates to reciprocal preferential trade. If we are to have reciprocal preferential trade, then we shall have to re-orientate our ideas in regard to the tariff. It is useless to speak of reciprocal trade that will be of no value. If we retain our present tariff with the idea of manufacturing everything in Australia, irre-. spective of cost or economic value, effect cannot be given to a policy of preferential trade. Senator O’Halloran’s speech consisted very largely of showing the benefits that would accrue to Australia if other portions of the Empire would purchase our goods ; but other portions of the Empire have a perfect right to adopt a similar attitude.

Senator Reid:

– Which they do.

Senator Sir GEORGE PEARCE.Some portions do. They naturally say they are not going to take our goods when they can produce similar goods in their own country. If we really wish to have reciprocal trade we have to make up our minds on what we are to reciprocate. We cannot expect other portions of the Empire to take any more unselfish view than we are prepared to take. Senator R. D. Elliott, in a very informative speech, said that a marked change of opinion was coming over the people of the United Kingdom. The tenor of his argument was to the effect that the people of the United Ki ngdom were beginning to doubt whether it was wise to allow Great Britain to become the dumping ground for the products of European and other countries which were shutting out British manufactures. The honorable senator showed that certain European and other manufacturers were dumping their surplus production in the British market at rates lower than the cost of production, and that the British Government was likely to introduce some form of protection in the interests of her manufacturing industry. That is the only way in which dumping can be checked. Great Britain is a manufacturing country. If we are to ask Britain to take our wool, wheat butter, wine, dried and canned fruits, and meat under preferential trade conditions, we must also take some things that Britain produces, and these would be manufactured goods. It is useless to point to a number of items in our tariff, and to say that we can give Great Britain 10 per cent. preference on a particular item which, because of the prohibitive duty on British goods, may be of no use.If we are really in earnest in this matter we should say, “Here are some manufactured goods which you produce, and on which we are prepared to give you effective preferential treatment.” It is useless to impose what is practically a prohibitive duty against Great Britain, and to call it a preferential duty, because a still higher duty is imposed against other countries. The duties imposed should be at a rate that will enable those goods to come into Australia and bo profitably sold. Ifwe are only going to say that Ave will impose a duty that will prevent

British goods from competing with similar locally produced goods, and render it even more difficult for foreign goods to come in, there will he no reciprocal trade in that respect. There is no reciprocity, in such a policy. We cannot say that all goods that can be manufactured in Australia are to bc manufactured here, and that preference is to bc given to _ British goods when the duties imposed will actually prevent such goods being profitably sold in Australia. In these circumstances, it is mere humbug to speak of reciprocal trade. It would be too one-sided.

Senator Barnes:

– What does the right honorable senator advocate?


– As a result of my experience during the war period, I say that certain industries are essential to Australia from the viewpoint of defence, and these Australia should encourage. Some industries are essential to Australia, even if we have to pay a higher price for the goods they produce, because in the event of war we should be prevented from receiving from other countries these commodities. A list of such industries could be prepared ; we could say that from the view-point of defence and the safety of the country, it was essential to encourage such industries in Australia, and give them such a measure of protection as was necessary. We should not shut out all competition, since in that way you get not an efficient but an inefficient industry. In respect of that limited class we could have a. fair measure of protection, and there would remain a large class of. manufactured goods in respect of which we could have genuine reciprocal preferential trade arrangements with Great Britain. But it is idle to think that we can do this without giving up something. If the policy suggested were adopted we would not ask other countries to give up something unless Ave also were prepared to make some sacrifice.

I may mention a case in point. Australia once carried on a very important trade with Fiji, which, speaking from memory, was worth £1,000,000 a year. At that time banana production was developing in Queensland and in the northern portion of New South Wales. When a tariff schedule was under consideration it was contended by the representatives of

Queensland that as the banana growing industry was of considerable value to Queensland it should be highly protected. A member in another place moved an amendment - it was not submitted by the Government of the day - to impose a prohibitive duty, thereby entirely shutting out the Fiji product. That amendment was carried, and as a result the ships that usually brought bananas from Fiji to Australia and carried back our manufactured goods discontinued in the trade. That trade was secured and has been retained by New Zealand. What is the use of telling, the people of Fiji, which is a portion of the Empire, that we wish to have reciprocal trade relations with them, and offer them a preferential duty on wheat,- oats or some other such commodity? They want preferential treatment on commodities such as bananas which they produce. If we wish to undertake reciprocal trade with Fiji it should be in bananas and sugar, if we are not prepared to give them preferential treatment on these commodities let us not humbug ourselves by speaking of reciprocal trade with other portions of the Empire.

Let us consider trade relations with Canada where there is a splendid market for our dried fruits, wine, butter and products of that nature. Canada also produces certain articles for which she is seeking a market. Is it reasonable to ask Canada to take our dried fruits, wine, butter and various other commodities, and not to take their agricultural machinery? Canada is a manufacturing country and is looking for markets for her manufactures. Canada does not want preferential trade on bananas or sugar, but on the articles which she produces and many of which are produced in Australia. If we are to adopt the policy of genuine reciprocal trade we shall have to select certain articles which Canada can produce more, cheaply and more effectively than we can, and on those give preference. That would affect the particular Australian industries concerned. If we wish to firmly establish, say, the dried fruits industry in Australia we shall in order to give Canada a quid pro quo have to give up some manufacturing industry.

Senator DUNCAN:

– Is the honorable senator suggesting free trade on those articles ?


– Not necessarily. The duty imposed would have to he such that it could not he regarded as prohibitive; but one in which the difference in labour conditions and the like would be taken into consideration. It would be useless to say to Canada, “ If you let our dried fruits in free we shall only put 50 per cent. duty on your agricultural machinery “ - or, for that matter any other commodity. I am merely using agricultural machinery as an illustration. Therefore, although the passing of this motion may be quite an easy matter, what do we mean by it ? If, as Senator O’Halloran suggested, all we see in it is an opportunity to find a market for Australian products well and good. But the honorable senator went on to indicate what a lot of articles could be made in Australia which we now import. In other words he would prefer to still further shut out the other fellow.

Senator O’Halloran:

– Does the right honorable senator argue that we should import boots and shoes? That was the only item I mentioned.


– I do not, so long as our factories can make the goods sufficiently, efficiently and economically, and hitherto they have been able to do so; but I would not put a duty on boots and shoes so as to shelter inefficiency. Thathas been the tendency of our tariff. It has gone to such an extreme now that it is not merely protective, it is prohibitive and shelters inefficiency. The healthiest thing we can have is competition, provided it is fair. T. shall not take up more time. I am voting for this motion because I am prepared to reduce our tariff and, in some cases, abolish duties, so that when we ask Great Britain to give preferential treatment to our meat, butter wine or fruit, we mean that we are prepared to give to some British manufactures a real and not a sham preference.

Senator Sir HAL COLEBATCH (Western Australia) [2.48]. - The Senate is indebted to Senator R. D. Elliott for his very full, interesting and informative speech, and if in the very few words I intend to say I seem to be entirely critical, I ask the honorable senator to believe that it is because I am speaking for a few minutes only. I appreciate and sympathize with a great deal of what the honorable senator said, but I have not the slightest intention of voting for or against the motion, because I recognize that it has been framed in the vaugest possible terms in order that it may entirely prevent opposition. There is nothing in it to which any one can object. Although it is possible to so frame a motion that it cannot excite opposition, it will have the defect of its qualities; it will entirely fail to inspire enthusiasm or point the way to any beneficent results. For that reason I do not intend to vote on it either one way or the other.

The honorable senator attaches far too much importance to mere figures showing the trade between one country and another. He speaks as though trade were a duet between two countries, and seems to think that it is wrong that the people of England should buy so much from Denmark and sell it so little. A country might buy entirely from another while selling nothing to it. It might sell entirely to another country and buy nothing from it. Such a position would be entirely logical. While I am prepared to accept the doctrine that the whole of the Empire should stand together, working as far as possible in the interests of each part of it, I am firmly convinced that there can be no prosperity in any portion of it unless there is prosperity in foreign countries as well. There can be no prosperity in the world generally, noassurance of an enduring peace until, subject to revenue purposes and the desirableness of assisting infant industries or that kind of thing, there is among all the nations of the World a reasonable disposition to trade with each other. Nothing else can save them from misery and suffering, or. finally, from war.

Senator Guthrie:

– Surely it is an advantage to trade within our Empire first!

Senator Sir HAL COLEBATCH.Certainly; but even under that heading I suggest that certain remarks have been made about efficiency. Senator Guthrie made a vigorous defence of the efficiency of our Australian industries - wheat and wool. What preference, what protection, what wall have those two industries to lean against? Is not the secret of their efficiency the fact that they have to compete against the rest of the world, that they have to fight for their existence?

And, .without making any suggestion against any other industry, I assert that the inevitable tendency of preference, protection, or assistance, is to break down efficiency. I am not at all sure that what *has been done in the direction of sheltering and protecting the butter industry has not to some extent interfered with its efficiency. There have been recent complaints, very vigorous in their nature, about the quality of some of the Australian butters, and I am by no means sure that the defects do not to some extent have their origin in the policy of protection and assistance and bolstering up of the industry against free competition from makers of butter overseas.

Senator Guthrie:

– Would not the honorable senator agree that it would be a very good thing for Australia if Great Britain bought more wheat from us than from Russia at the present time?


– I do not think that I would agree with that idea with very much enthusiasm, because we know perfectly well that the Empire produces far more wheat than it can consume, and there must always be a large proportion of Empire-grown wheat sold in foreign countries. I do not see that it would make any appreciable difference if the wheat grown, in Russia were sold in Great Britain, or in countries that otherwise would be our customers. It might help to some extent if Great Britain bought more of our wheat,* for it is not a matter that invokes very much enthusiasm from mc.

I hope, that in cold print the speech of Senator R. D. Elliott will not read quite so badly as it sounded. I do hope that the vindictive emphasis he placed on the word “ foreign “ will disappear. He used the word as if there were something bad or wrong about anything which is foreign. In my opinion, that is not quite the spirit to develop at the present time. I” am inclined to think that the honorable senator has to some extent been captured by the campaign recently launched in Great Britain by two comparatively new, and I do not think particularly ornamental, additions to the British peerage. It has been the habit of Lord Beaverbrook and Lord Rothermere. for a number of years, to attack with venom and, to my mind, without a shadow of reason or justification, men on both aides of British politics whose names will live in the annals of the country as British patriots. I mention, in particular, Stanley Baldwin and Philip Snowden, men of different types of politics whom it has been the delight of these two noble lords to attack in season and out of season. Their attacks not long ago provoked a little rhyme, with the sentiments of which I associate myself. It was -

When round for public works you look.

Two urgent jobs at once appear -

To dam for ever Beaverbrook,

And drain the mud from Rothermere

However much the honorable senator may have been impressed by the campaign of these noble lords, I can assure him that they will never greatly influence Imperial policy.

Senator RAE:
New South Wales

– I congratulate Senator R. D. Elliott on the vast amount of information of a very interesting character he has compiled in support of his motion. If. he really believes that the cabling to the Old Country of the carrying of the motion will be of any value, I should be very loth to deprive him of that pleasure. But I must say that I agree with the Leader of the Opposition (Senator Sir George Pearce) that it is useless to pass a motion consisting merely of pious aspirations unless we understand the lengths to which it commits us. Senator Colebatch said that Senator R. D. Elliott had drafted his motion in terms so vague that no one could object to it. Thereare two portions of it to which I object. I object to the words “ and the development of the ideal of Empire economic unity “. It is not only an ideal which is incapable of realization; it is also one which we should not even attempt to entertain. In short, it is an absolutely absurd and fantastic aspiration. There can be no Empire economic unity unless the Empire’ be possessed of geographical unity. Unless trade is prevented by the most artificial and objectionable barriers, it must naturally gravitate from one country to another in more or less propinquity. What one can produce with greater advantage will necessarily be exchanged for what can be produced with greater advantage by an adjoining country. It is not desirable, for instance, to prevent, trade between the United

States of America and Canada in order that Canadian produce may travel thousands of miles further in order to reach Australia. I hold with Senator Colebatch, that the idea that by bottling up trade in certain directions we increase the mutual prosperity of those who attempt it is not always justified by the facts. I agree with Senator Colebatch that if, by excluding Russian wheat from Great Britain, we were enabled to sell more Australian wheat in that country, it would necessarily divert the Russian wheat to countries which otherwise might buy some of our surplus wheat. In that sense the preferences are not all that they are supposed to be. I am not against preferential trade, but I am opposed to our going out of our way to foster it. I am opposed to the idea of pledging ourselves not to protect any Australian industry that we think it advisable to protect, in order to give preference to Great Britain or any other country. While we have tariffs we should endeavor to enter into reciprocal arrangements with other countries to our mutual advantage; but to imagine that we can bottle up trade within the Empire is to my mind as foolish as it is objectionable.

I do not believe that there can be anything like permanent political unity between countries far apart. The tendency will always be for such countries to drift apart. The Empire unity that exists to-day is possible only because the bonds of Empire have become so slender as to be almost invisible. The feeling of affection that exists is due to the further loosening of the bonds between the component parts of the Empire rather than to the strengthening of those bonds. At the Imperial Conference further concessions have been formulated notifying the increase of powers to the selfgoverning dominions. Economic unity between countries separated by thousands of miles of ocean is a dream worthy only of an inmate of an insane asylum. I shall not pledge myself to any such sentiments.

The other portion of this motion to which I object is that which states that on the adoption of a comprehensive system of reciprocal preference the prosperity of all depends. The prosperity of this or any other country - I speak in a commercial sense - depends largely on whether it trades in the most suitable quarters, irrespective of race or nationality. The prosperity of Australia does not necessarily depend on our trading with other parts of the Empire. That prosperity depends on many factors, not the least important of which is our trading where it suits us best to do so. I believe that the ties of race - that affection we feel for those who come from the same stock - are not due to trade, commerce or financial intercourse at all; they are due to associations and traditions founded on something very much higher and nobler, though, perhaps, not so easily definable. Consequently, I do not consider myself any less loyal, iu the true sense of the term, to the best traditions of the race by dissenting from the idea that we must necessarily exchange goods with one another in order to show our affection. I am prepared to do what I can to assist inter-Empire trade if it will result in benefits to all; but I object to the statement that Empire economic unity - a fantastic, unrealizable and undesirable dream - and the prosperity of this or other parts of thu Empire depend on intra-Empire trade. A lot of “ bunkum “ is talked about these things; but we should consider them as sensible men, unaffected by the glamour of idealistic sentiments which have no real foundation.

As Senator Colebatch pointed out, many of th6 British dominions export the same commodities that we export. That being so, how can we arrange a preferential system for the whole Empire which will be free from the possibility of friction arising between them ? Sugar is one of our important products; but why should Great Britain give Australia a preference in regard to sugar if by doing so she would injure the sugar industry of her West Indian colonies? Canada produces wheat; South Africa produces wool ; New Zealand produces wheat, wool and meat. All those commodities are also produced by Australia. So many parts of the Empire produce the same commodities that it would be possible to regulate the exports of such commodities only under a dictatorship; it is impossible with several selfgoverning dominions. The subject is surrounded by pitfalls, difficulties and obstacles of such an insuperable nature that we are, to a great extent, wasting our time in seriously considering such a proposal as that now before us. It may be practicable to devise means whereby preferences can be given with respect to particular commodities; but to attempt to evolve a comprehensive scheme of Empire preference, which would be fair to all the component parts of the Empire, is to attempt the impossible.

While I am not opposed to assisting other parts of the British Empire, I realize that if we attempt to build up a watertight empire by excluding foreign goods, we shall inevitably arouse feelings of enmity which will, in time, cause our Empire to be the most hated empire the world has ever known. The exclusion of foreign goods would provoke a coalition of other nations to destroy an empire which sought to build up its own prosperity on the ruin of others. Senator R. D. Elliott said that the proposals for empire preference had already provoked resentment among the nations which would be adversely affected by such a policy. I remind honorable senators of the many times that they have drawn attention to the retaliatory action taken by France because of the customs duties recently imposed by Australia. If we carry that process further, and shut out entirely goods from foreign countries, not in order to foster Australian trade, but to build up a world empire, trouble will inevitably result. I go further, and say that to attempt such a thing would be almost as bad as to accomplish it. I have no time for empires as such, for empires mean domination. Only by domination could we confine our trade to the different parts of the Empire. That is not only an impossible task; it is a task which would bring with it greater evils than those we now seek to overcome.

Senator LYNCH:
Western Australia

– This subject is so expansive that it is difficult to conceive of you, Mr. President, being called upon to call an honorable senator to order for having strayed beyond its bounds. As the Empire has developed its people have had different conceptions of the best means of promoting its prosperity. At one time it was thought that the more goods the Empire sold to the rest of the world the better ; now it would appear that we have reached the stage when its interests will be best served by confining trade within the Empire. The whole subject bristles with anomalies and difficulties, and it is impossible to say whether they can be solved. The granting of self-government to the dominions was a departure from the previous idea of having the Empire as consolidated as possible. Let me give an illustration. Suppose that instead of being composed of fragments scattered all over the earth’s surface the Empire was one united and compact land area similar to the United States of America. Then there would be no autonomy except one. We should all be living under one central government, actuated with the same hopes and aspirations, and there would bc no need for a discussion such as that in which we are participating. But, scattered as we are over a wide-flung area, it was necessary to grant autonomy for the different parts of the Empire, and with the granting of that autonomy was inevitably bound up the desire of each unit to look after its own interests first. We in Australia enjoy social standards which are higher than those obtaining in the Old Country, the land from which we have sprung. Enjoying the privilege of self-government we have raised our standards of living considerably above those of Great Britain. We initiated our own fiscal standards, and declined to admit free into Australia even those goods that were made by our own kith and kin in Great Britain. In our endeavour to protect our social standards, we may have prejudiced the welfare of the people we had left behind in the Old Country.

It would, therefore, seem that we have arrived at that point, so aptly described by a German professor, where two high principles collide and neutralize each other. On the one side is our struggle for existence and the maintenance of our standards, and on the other, as crystallized in this motion, the effort to consolidate trade within the Empire. It cannot be done. The one neutralizes the other. If the British Empire was one compact land area, I should give my wholehearted support to the motion, but as our Empire is so wide-flung and separated geographically, each unit governed by totally different standards of existence, it is impossible for me to do so. My attitude is one of experimental indulgence. Let me give another illustration. The sugarworkers in North Queensland earn £1 and upwards a day. Compared “with workers in the cooler shades of southern environment they richly deserve it. On the other hand, operatives in the north of England do not earn anything like that amount. Yet we are asked to draw tighter the bonds of Empire trade at their expense. Does any honorable senator think it reasonable to ask the operatives in the north of England to bear the cost of a protective tariff, however small? It would immediately lower the purchasing power of their wages, which is already too low. In Australia the purchasing power of our wages is higher. So long as social standards within the Empire possess the quality of inequality, it is hopeless to put a motion such as this into application in its entirety. We can never arrive at a cut-and-dried plan to arrange the trade relationship between the component parts of the Empire. I believe that we can merely arrive at a loose and free relationship which shall leave the different parts of the Empire to work out the details and, endeavouring to conserve undivided interests, at the same time to dovetail one into the other.

  1. fail to see how the passing of this motion will have any good effect. So long as we have self-government, the compelling necessity is to preserve our own interests. Therefore; we cannot deny the right of the people in the Old Country to be just as jealous in preserving their own interests, and ensuring that, their earnings will have the maximum purchasing power. The whole project is like the irresistible force meeting the immovable object. If the acceptance of this motion meant increasing the duty on food entering the Old Country from foreign sources, that would mean lowering the purchasing power of .money in Great Britain or, in other words, reducing tho wage standard there. No matter how we may endeavour to gloss it over, that is the effect. I am reminded pf a saying of the late Sir George Reid, to the effect that the way to keep the Empire together is to maintain a very slender tie. It became a well-known aphorism, “ The slenderest tie is the strongest bond.”

It is impracticable for us to shut out the outside world ; to keep it at arm’s length - and the wisdom of the policy is doubtful. At the request of the mover of the motion I shall finish my remarks by saying that this matter cannot be settled by waving a v. agic wand, and v claiming that the job is done. The joh can be done only by having a free relationship between the component parts of the Empire. By that method alone will the maximum benefit be obtained.

Senator HOARE:
South Australia

– I ask the mover of the resolution to be as explicit as possible. Upon his explanation depends the manner in which I shall record my vote. I do not wish to he misled. I desire to know where this resolution will lead, me as a protectionist. Will it break down any barriers of protection, to which we in Australia are to some extent pledged? Unlike Senator Pearce, I do ‘not agree that we should import bananas from Fiji, and destroy that industry in north Queensland. Again, Australia has built up a splendid farm machinery industry, which provides a good deal of employment. Will that be affected if this resolution is carried? Will it mean giving Canada some special preference, and so undermining the industry in Australia? If so, I cannot support the motion. Yesterday I had made up my mind to support it. but to-day I foresee grave danger from its acceptance. Seemingly, very few honorable senators know where the motion will lead us. I ask the honorable senator to be precise in his reply, and to explain what is intended if the motion is carried.

Senator CARROLL:
Western Australia

– Owing to the peculiar circumstances under which the motion was submitted, it falls to my lot to reply to the debate. I shall be as brief as .1 can. I assure Senator Hoare that the motion does not mean the abandonment of what we iu Australia regard as our national policy. I am of the opinion that, wo have carried that, national policy beyond reasonable limits; it needs modification in certain directions, hut that modification need not in any way interfere with our own industries. I remind Senator Hoare that Australia imports a tremendous quantity of timber from overseas, the great bulk of it from the United States of America. Our sister dominion, Canada, has enormous forests of similar timber. There is an instance where we could extend preferential treatment to a sister dominion, and increase intra-Empire trade.

I commend to honorable senators the remarks of the Leader of the Opposition in the Senate (Senator Pearce). The right honorable gentleman struck the right note when he said that in dealing with this problem we should have something solid behind our minds, and not merely pass a pious resolution. I remind the Senate that the motion does not touch upon anything new. It is only asking for an extension of a policy that has been in operation for a great many years. We have asked and have received from the Old Country certain preferences with regard to our products. The motion merely urges that the position should be examined, and that we should extend the policy where that can be done to the mutual advantage of the different components of the Empire. I do not think that even Senator Rae would object to trading with a sister dominion when that would result in as much advantage as would accrue from trading with a foreign country, a country which might conceivably use the proceeds to punish us later, as was done in the Great War. If anything could convince me of the righteousness of this motion, it is the opposition that came from Senator Rae. My experience shows that the honorable senator will oppose anything that promises to benefit the British Empire. I commend the motion to the Senate.

Question resolved in the affirmative.

page 355


The PRESIDENT (Senator the Hon W Kingsmill:

-I have received a communication from Lady Howse, informing me that she and her family return their sincere thanks for the kind expressions of sympathy contained in the motion of condolence, on the death of the late Sir Neville Howse, recently passed by this Senate.

page 355


Senator DALY (South Australia-

Vice-President of the Executive Council) [3.32].-I move-

That the Senate at its rising adjourn till Tuesday, the 25th November, at 3 p.m.

As honorable senators are aware, this is a financial session. I have interviewed the Acting Prime Minister (Mr. Fenton) with regard to the business that is likely to come before the Senate, and I have been informed that the debate in another place on the budget statement, presented by the Acting Treasurer (Mr. Lyons) will take some days longer to complete. As there is not sufficient business on the Senate notice-paper to keep this chamber fully occupied next week, the Government considers it desirable to adjourn until Tuesday in the following week. I have conferred with the right honorable the Leader of the Opposition (Senator Pearce), who has acquiesced in this arrangement. I am sure that honorable senators will do all they can to meet the wishes of the Government, and, if necessary, will agree to meet on one or two mornings in that week in order to complete the business.

Question resolved in the affirmative.

page 355


The following papers were pre sented : -

Northern Australia Act -

Central Australia -

Ordinances of 1930-

No. 13 - Stock Diseases.

No. 14 - Legal Practitioners (Trust Accounts).

Health Ordinance - Regulations amended &c. -

Wells and Water.

Infectious Diseases.


North Australia -

Ordinances of 1930 -

No. 15 - Stock Diseases.

No. 16 - Legal Practitioners (Trust

Accounts ) .

Aboriginals Ordinance - Regulations amended.

River Murray Waters Act - River Murray Commission - Report for the year 1929-30, together with Statements furnished on behalf of the Governments of New South Wales. Victoria and South Australia in respect of Gaugings, &c.

page 355


Petrol Duties. - Wheat-Growing In dustry: Relief to Growers. - Government Business.

Motion (by Senator Daly) proposed -

That the Senate do now adjourn.

Senator GREENE:

– I do not wish to detain honorable senators unduly, but I desire to direct the attention of the Leader of the Senate (Senator Daly) to a matter of urgent importance ‘to a. number of people engaged in the business of importing petrol. Recently the Government imposed a deferred duty on petrol in containers. When this duty becomes operative it will practically prohibit all those who are not associated with the major oil companies from carrying-on business. From time to time the duty 1ms been deferred for a month, and everybody knows that within a month it is impossible to order and receive goods from America, so the effect of the deferred duty is to destroy the business of a number of people engaged in this particular industry. I do not wish to discuss the merits or demerits of the duty itself. If I attempted to do so I have no doubt that yon, sir, would prevent me. But I wish to point out that these so-called minor companies, which have been importing petrol to Australia for a number of years, have been gradually building up a considerable volume of business, and the public has benefited through being able to obtain petrol at prices considerably below those charged by the larger oil companies. The latest and most effective method adopted by the major oil companies to checkmate the smaller oil importing concerns was to approach the Government for this particular duty. They know perfectly well that when the duty actually is imposed the whole of these minor companies will be forced out of business. Naturally they are hoping that the duty will soon be made effective, because they- are considerably annoyed that these smaller people are selling petrol at prices below the rates charged by them. I suggest for the consideration of the Government that on the 1st December, the date now fixed for the operation of the deferred duty, the Minister should further postpone its operation for another six months. That would enable the Tariff Board to complete its inquiries and afford an opportunity to some of the small traders to get their own business back. The people of Australia would also bc able, for that period at all events, to obtain petrol at prices lower than those charged by the larger companies. I hope that the Government will, treat this matter as urgent and take the necessary action. If the Ministry does not intend to make the duty effective on the 1st December, I* trust that it will be postponed for at least six months.

Senator LYNCH:
Western Australia

.- I should like to know if the Leader of the Senate (Senator Daly) is in a position to state when the Government will give consideration to the motion passed last evening with regard to the position of our wheat-growers. ‘ I need hardly remind the Minister that the eyes of thousands of harassed primary producers are on the Government at the present time, that, they are waiting anxiously to hear what action the Ministry intends to take. We are all hoping that it will give immediate and sympathetic consideration to the terms of the motion as well as to the resolution passed by the conference of representatives from the wheat-growing States in Canberra on Thursday.

There is another matter. As a senator from one of the more distant States, I should like to know how long the business before the Senate is likely to occupy this chamber when it re-assembles on Tuesday week. It takes me five days to travel from my home in Western Australia to Canberra and five days to return. As - this is a part of my duty as a representative of the people I have no complaint on that score, but I should like to know if it will be possible to get through the business in reasonable time when next the Senate assembles.

Senator DALY:
VicePresident of Executive Council · South Australia · ALP

– I shall take the earliest opportunity to bring under the notice of the Minister for Trade and Customs (Mr. Fenton) the matter mentioned by Senator Greene and I feel sure that it will receive sympathetic consideration. I also assure Senator Lynch and other honorable senators that the position of our primary producers is causing the Government very much ‘concern. There was a special meeting of Cabinet this morning at nine o’clock to consider the resolution passed by the Senate yesterday, and I understand that a preliminary statement will be issued either this afternoon or early next week by a sub-committee of the Government. I brought before Cabinet, as faithfully as I could, the representations made by Senator Lynch and other honorable senators who took part in the discussion last night, and I hope that when the Senate resumes on Tuesday week, a definite statement of the Government’s proposals will be made. As to the legislative programme to which Senator Lynch referred, it is difficult to say how long the business will occupy the Senate. My experience is that this chamber docs not waste time. I believe it will dispose of all the legislative measures brought before it expeditiously and efficiently. If honorable senators can complete the programme within the week, I am sure they will not prolong the discussions for a fortnight as a make-believe that business is detaining them. I am hoping that the session will end the week after next; but we may nave about a fortnight’s programme when we return. The representatives of the Government in this chamber will do their utmost to facilitate the passage of legislation and to meet the convenience of honorable senators.

Question resolved in the affirmative.

Senate adjourned at 3.45 p.m.

Cite as: Australia, Senate, Debates, 14 November 1930, viewed 22 October 2017, <>.