3 December 1930

12th Parliament · 1st Session

The President (Senator the Hon. W. Kingsmill) took the chair at 3 p.m., and read prayers.

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Senator BARNES:
Assistant Minister assisting the Minister for Works and Railways · VICTORIA · ALP

– I have not heard anything of the matter mentioned by the honorable senator, but if the New South Wales Government takes the action it is said to be contemplating, the Federal Government will take whatever steps are necessary to provide for the comfort and safe conduct of members of Parliament.

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Report of Select Committee.

Senator Sir WILLIAM GLASGOW brought up the report of the Select Committee on the CentralReserve Bank Bill, together with minutes of the proceedings of the committee and minutes of evidence, and moved-

That the reportbe printed.

Motion agreed to.

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The PRESIDENT (Senator the Hon W Kingsmill:

– Since I have been in this building I have not noticed any darkening in its appearance.

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Senator REID:

-I should like to know if it is true, as reported in the press, thai the Government has given a permit, for the holding of a lottery in Canberra for the benefit of the local unemployed ; and,, if so, why such a degrading system should be introduced for the relief of the few in Canberra compared with the many thousands of unemployed throughout Australia.

Senator BARNES:

– As I understand that a statement is being made in regard to the matter . in an other place, I shall be in a better position later on to give an answer to the honorable senator’s question.

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Appointment of Sir Isaac Isaacs

Senator DUNCAN:

– In view of a report in this morning’s Sydney Morning Herald that a Governor-General has been appointed, has the Assistant Minister a statement to make in regard to the matter?

Senator BARNES:

– I ask leave to make a statement- in regard to the matter.

Leave . granted.

Senator BARNES:

– I have to announce for the information of honorable senators that the Acting Prime Minister has this day received from the Right Honorable the Prime Minister (Mr. Scullin), a cablegram intimating that His Majesty the King has been pleased to appoint the Right Honorable Sir Isaac Alfred Isaacs, K.C.M.G., Chief Justice of the High Court of Australia, as Governor-General of the Commonwealth of Australia, in succession to His Excellency Lord Stonehaven.

As the commission appointing Sir Isaac Isaacs has not yet arrived from His Majesty the King, I am not in a position, at present, to indicate definitely the date on which he will assume office, but I anticipate that it will be about the middle of next month.

  1. am gratified, and I believe that the people of Australia are, that at last we have one of our most distinguished citizens appointed to the very high and honorable post of Governor-General. The’ career of Sir Isaac Isaacs is familiar to all honorable senators. He has held with great distinction the highest positions in the gift of the people of Australia, and I feel sure that he will add lustre to this new appointment, notwithstanding that he follows in the footsteps of other great men.
Senator Lynch:

– What is the term of his appointment?

Senator BARNES:

– I am not conversant with the terms, but I feel sure that his appointment will please 95 per cent, of the people of Australia. Sir Isaac Isaacs is, and has always been, a loyal citizen of Australia and of the British Empire. He has done his best to facilitate the progress of this country. As a member of the judiciary, he has balanced the” scales of justice as- truly as it is possible for any human being to do, and I believe that there will be no regret on the part of any citizen of Australia, regarding the conferring of this distinction upon him.

Senator LYNCH:

– Will the Assistant Minister give an assurance that his Government will not allow the decision given by Sir Isaac Isaacs in” the coalmining proceedings to preclude it recom- mending that- gentleman for a still higher position on any future occasion ?

Senator BARNES:

– I have no reply to give to that question.

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The following paperswere presented : -

Stability of Currency - Memorandum prepared by Mr. C. H. Wickens, Commonwealth Statistician and Actuary.

Tariff Board - Reports and Recommendations -

Glue in Dry Form, Cement and Prepared Adhesives, n.e.i., including Acetylatcd Starch, Casein, Mucilage, Liquid Glue, and Belting Compounds.

Petrol Imported in Containers.

Unscoured Wool and Sheep-skins;

Web Printing Presses.

Commonwealth Employees’ Compensation

Act - Regulations - Statutory Rules 1930, No. 134.

Commonwealth Housing Act- Regulation’s amended - Statutory Rules. 1930’, No. 122:

Customs Act - RegulationsamendedStatutory Rules 1930. No. 138.

Seat of Government Acceptance Act and Seat of Government (Administration) Act -

Seat of Government (Administration) Ordinance and Public Health Ordinance -

Regulations - .

Public Health (Laundries, Cleaning Establishments and Bye Works).

Public Health (Private Hospitals ) .

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asked the Minister representing the Minister for Home Affairs, upon notice -

  1. On what basis and on what ranges of salaries are the special cost of living allowances granted to civil servants stationed in Canberra?
  2. What is the total annual cost of such allowances ?
  3. Are similar allowances paid to federal civil servants stationed at Perth and within rural districts in other parts of Australia?
  4. Does not Canberra possess natural scenic and climatic advantages which are lacking in many country towns in Australia?
  5. Do civil servants in Canberra enjoy the benefits and advantages of national institutions and public services which are established and maintained at the expense of the general taxpayers of the Commonwealth?
  6. If so, should not the cost of living be cheaper in Canberra than in towns that have to maintain their services at their own expense ?
Senator BARNES:

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

  1. Conditions as to the granting of allowances to officers stationed in Canberra are set out in- Public Service Regulation- 97b. Briefly, the position is asfollows: -
Officers, irrespective of salary, residing at one of the- Government hotels or boarding establishments receive1 an allowance equal to 25 per cent, of the boarding , charges. Officers, irrespective of salary, renting homes, are granted allowance equal to 20' per cent, of the rental paid, exclusive of rates. Officers purchasing or building homes receive allowances varying according to the' officer's salary range, from £15 to £36 per annum. Apart from the foregoing, married officers who were compulsorily transferred to Canberra with their departments receive an allowance of £30 perannum to meet living costs; which are higher in Canberra than Melbourne, and the disabilities consequent on compulsory transfer. {: type="1" start="2"} 0. Approximately, £31,000 perannum. 1. Not in-Perth, but 'special allowances under - a graduated scale are paid under arbitration) awards or Public Service Regulations to officers stationed at a number of centres throughout the Commonwealth tomeet. disabilities due to severe; climatic conditions, isolation, or high cost of living. Such allowances range from £20 to £140 in the case of married officers, and from £10 to £120 in respect of single officers. 2. It is considered that, on the whole, the scenic and climatic advantages of Canberra compare more than favorably with those of other country towns of Australia, and were factors influencing its selection as the scat of government. 3. Owing to its early stages of development, some institutions of which the public have the benefit elsewhere have not yet been established in Canberra. The Canberra community is. moreover, not comparable with an ordinary country town, as most of its members were transferred from a, capital city with special advantages in the way of institutions. What is considered an equitable proportion of the cost of the public services provided in Canberra is met by the residents. The fact that Canberra is the seat of government, built in accordance with a definite plan, has involved provisions and arrangements which would not be required in other towns of similar size, e.g., the basic engineering services have been provided in advance of present requirements, and at an earlier stage in the city's growth than would have been the case elsewhere. A considerable portion of the cost of 'maintenance mustbea charge against the ConsolidatedRevenue. The residents of the Territory are required also to pay their share of general Commonwealth taxation. 4. Payments made in respect of services form only a small proportion of the increased cost of living in Canberra. A record made by the Commonwealth Statistician on the 28th August last indicated that food and groceries were 17 per cent. higher in Canberra than in Melbourne, and that the average house rent was 64 per cent. above that of Melbourne. {: .page-start } page 864 {:#debate-7} ### QUESTION {:#subdebate-7-0} #### TARIFF Free Admission of Machinery - Schedule Amendments {: #subdebate-7-0-s0 .speaker-K3X} ##### Senator CARROLL:
WESTERN AUSTRALIA asked the Minister representing the Minister for Trade and Customs, *upon notice -* {: type="1" start="1"} 0. Has his attention been drawn to an item in theSydneyMorningHerald of Tuesday, 25th November, under the heading of " Tariff Decisions ", relating to a list of goods, similar to those requiredin every State in the Commonwealth, alleged to have been brought under the operation ofItem No. 174 of the tariff, for one day only, in order that, they might be admitted free of duty? 1. Under what circumstances were these goods brought under this item ? 2. What were the grounds for the decision, and at what ports were the goods referred to admitted? {: #subdebate-7-0-s1 .speaker-K1L} ##### Senator BARNES:
ALP -- The answers to the honorable senator's questions are as follow : - {: type="1" start="1"} 0. Yes. 1. On applications, made by localfirms or companies who required these machines for manufacturing goods within the Commonwealth. The Minister was satisfied after full inquiries that these machines are not being made in the Commonwealth and they were admitted under Item 174 in accordance with the. usual practice of the department. 2. The grounds for the decisions were that the machines were required in connexion with local industries and machines of Australian production were not procurable. These goods have been or will he imported at Melbourne. Sydney, Perth,Fremantle and Brisbane. {: #subdebate-7-0-s2 .speaker-KRZ} ##### Senator LYNCH: asked the Minister representing the Minister for Trade and Customs, *upon notice -* {: type="1" start="1"} 0. What is the number of proposed amendmerits of the tariff since 1st October,1929. not yet. approved by Parliament? 1. What are the dates when resolutions for such amendments were tabled? 2. How many items of the tariff were affected by each proposed amendment? 3. What is the total number of items affected by all the proposed amendments ? {: .speaker-K1L} ##### Senator BARNES: -- The answers to the honorable senator's questions are as follow : - 1. (a) Customs,6: (b) excise, 4; (c) special duty of 50 per cent.,2; primage, 2. 2. (a) Customs, 21st November. 1929, 11th December, 1929.19th June, 1930. 9th July. 1 930, 25th July,1930, 5th November. 1930: (b) excise, 21st November, 1929, 19th June. 1930.9th July, 1930,5th November, 1930; (c) special duty of50 per cent., 2nd April, 1930. 19th June. 1930: (d) primage. 9th July, 1930. 5th November, 1930. 3. 4. (a) Customs, 180; (b) excise, 7; total. 187. {: .page-start } page 865 {:#debate-8} ### IMMIGRATION BILL Assent reported. {: .page-start } page 865 {:#debate-9} ### PATENTS BILL Motion (by SenatorBarnes) agreed to- That leave be given to introduce a bill lor an act to amend the Patents Act 1903-1921. Bill brought up by **Senator Barnes,** and read a first time. {: .page-start } page 865 {:#debate-10} ### INCOME TAX (SALARIES) ASSESSMENT BILL Bill received from the House of Representatives. Standing and Sessional Orders suspended, and bill (on motion by **Senator Barnes)** read a first time. {: .page-start } page 865 {:#debate-11} ### SOUTH AUSTRALIA GRANT BILL Bill received from the House of Representatives. Motion (by SenatorBarnes) proposed - That so muchof the Standing and Sessional Orders be suspended us would prevent the bill being passed through all its stages without delay. {: #debate-11-s0 .speaker-K0F} ##### Senator Sir GEORGE PEARCE:
ern Australia · West [3.27]. - I do not intend to oppose this motion, because the Leader of the Government in the Senate **(Senator Daly)** spoke to me before the meeting of the Senate regarding the proceedings inthischamber to-day. While I wish to do everything that I can to facilitate business in order that honorable senators may be enabled to reach their homes before Christmas, I think chat some explanation of the absence of the Vice-President of the Executive Council while important business is being dealtwith in this chamber is due to the Senate. For several days, the absence of the Leader of the Government at the opening of our proceedings, particularly at question time, has been noticeable. There are only two Ministers in the Senate - a smaller number than has been the case for many years - and if it is at all possible they should be present during the sittings. There may be a satisfactory reason for the honorable gentleman's absence, suchas illness, although I have not heard thatheisill.Unfortunately, this is not the first time that the VicePresident of the Executive Council has been absent from the sittings of the Senate, and, although Iam loth to draw attention to this matter. I feel that some explanation of his absence is due to us. {: #debate-11-s1 .speaker-K1L} ##### Senator BARNES:
Assistant Minister · Victoria. · ALP -- I had it in mind to explain to the Senate that the Leader of the Government in this chamber **(Senator Daly)** had conferred with the Leader of the Opposition **(Senator Pearce)** regarding the conduct of the business of the Senate to-day, and that they had agreed regarding the procedure to be followed. I am sorry that I failed to do so. With all other honorable senators, I regret the absence of the VicePresident of the Executive Council, but I assure them that it is unavoidable.He is receiving a deputation on a matter of vital interest to Australia. I assure honorable senators that there is no desire on his part to act discourteously. He would be at his post in this chamber, were it not that the interests of the country demand his attendance elsewhere. Question resolved in the affirmative. Bill (on motion by SenatorBarnes) read a first time. {: .page-start } page 865 {:#debate-12} ### INCOME TAX ASSESSMENT BILL (No. 2). Bill received from the House of Representatives. Standing and Sessional Orders suspended, and bill (on motion by **Senator Barnes)** read a first time. {: .page-start } page 865 {:#debate-13} ### FINANCIAL STATEMENT Debate resumed from the 25th November *(vide* page 624) on motion by **Senator Daly** - That the paper be printed. SenatorDUNN (New South Wales) [3.33]. - When I obtained leave to continue my remarks on this motion, I was saying that posterity would erect a monument to the present Premier of New South Wales **(Mr. Lang). Senator E.** B. Johnston interjected that a monument of debt would be erected by that gentleman. As the Lang Government, which was defeated three years ago, left a surplus of £1,500,000 **Senator E.** B. Johnston, and those with whom he is associated, should know that **Mr. Lang** is not likely to erect a monument of debt. During the period the Bruce-Page Government was in office it spent approximately £500,000,000 obtained from loans, customs revenue and from the general taxation of the people for which there is practically nothing to show. But, when an appeal was made to the people over twelve months ago Labour was returned with an overwhelming majority to another place. That should satisfy **Senator E.** B. Johnston that the people of Australia believe in the Labour party's policy. Although this Government found the Treasury empty when it assumed office, and Australia in common with other countries is now facing general depression, together with an acute unemployment problem, it is honestly endeavouring to do its best for the people. The Government does not believe in repudiation as suggested by some newspapers, but rather in honouring its obligations. It is declared in the press that we favour a policy of inflation. During, and shortly after the great war, Germany adopted a policy of mad inflation which resulted in financial chaos and depression in that country. It paralysed the very nerve centre of the business life of Germany, and eventually spread to France. But there the people grappled with the problem in such a way that to-day that country is in a stable position. {: #debate-13-s0 .speaker-JYB} ##### Senator DUNN:
NEW SOUTH WALES -- I do not think that is the reason. In the days of the commune they disposed of the Tories by chopping off their heads, but the policy of intelligent Australians is to destroy political opponents through the ballot box. When the last appeal was made to the people a number of political heads were chopped off. Some prominent persons in Australia, including the Commonwealth Statistician **(Mr. Wickens),** believe that a reasonable policy of inflation would not be detrimental to Australia, and would be the means pf relieving our _ wheat-growers, who are indebted to, storekeepers to the extent of £6,000,000. I cannot understand why some newspapers have adopted their present policy with regard to national finance. After all, in most cases, it is but the opinion of the financial editor. What he writes for the edification of its thousands of readers is published as the financial policy of that particular newspaper. **Senator Colebatch** has published quite a number of financial articles in the columns of the Sydney *Evening News.* Doubtless, he and those whom he meets at the Constitutional Club, in Sydney, believe that he expresses sound political views in relation to finance. On the other hand, however, we have **Mr. C.** H. Wickens, the Commonwealth Statistician, advocating a policy of sane inflation, and such an eminent journal as the Sydney *Bulletin* seriously asking the people of Australia, through its columns, whether such a policy would hurt Australia. I do not think that it would. It is not likely that the process would be carried to the extreme that was witnessed in Germany. I believe that if the currency of Australia were inflated to the extent of £50,000,000- {: .speaker-K0F} ##### Senator Sir George Pearce: -- By how much ? {: .speaker-JYB} ##### Senator DUNN: -- The figure that 1 mentioned was £50,000,000. I will go so far as to say that if an additional £20,000,000 was thrown on the market to-morrow it would go a long way towards correcting, particularly in the wheat areas, the terrific depression that exists in Australia. {: .speaker-K7F} ##### Senator Sir Hal Colebatch: -- What does the honorable senator mean by the phrase, " thrown on the market ?" Does he suggest that there would be a scramble for it? {: .speaker-JYB} ##### Senator DUNN: -- If there were a scramble I have no doubt that some of **Senator Colebatch's** friends would' be in it. {: .speaker-KP8} ##### Senator E B Johnston: -- The Government has refused to help the wheatgrowers. {: .speaker-JYB} ##### Senator DUNN: -- The present Government has never refused to help the wheatgrowers. _ The honorable senator knows that he and his colleagues from Western Australia voted, in this chamber) against the proposal of the Government to guarantee the wheat-growers 4s. a bushel for their wheat. **Senator Lynch** was absent from that division, but in response to his telegraphed request I, as Government whip, with the permission of the Vice-President of the Executive Council **(Senator Daly),** arranged for him to be paired with the Assistant Minister **(Senator Barnes).** The Government has never broken its faith with the primary producers. {: .speaker-KP8} ##### Senator E B Johnston: -- What about the request that was made at the conference of wheat-growers held a fortnight ago? {: .speaker-JYB} ##### Senator DUNN: -- The question that we have to consider now is, not what request has been made recently by the wheat-growers, but why my friend, **Senator Johnston,** and other honorable senators from "Western Australia, turned down the proposal of the Government to guarantee the payment of 4s. a bushel. The Government, iri its financial statement, has placed all its cards on the table. The right honorable the Leader of the Opposition **(Senator Pearce),** ably supported by **Senator Colebatch,** has, to use the vernacular, slangwanged the Government, and has alleged that it has fallen down on its job. The right honorable gentleman, apparently, needs to be reminded that he was a member of a government which, in six years, expended the huge sum of £500,000,000. It is not an exaggeration to say that practically every person in the community is affected in some way by the prevailing depression. The values of buildings, factories, plants, machinery, land, crops, stocks, goods and commodities, have slumped in value to the extent of many millions of pounds. Many business people who were thought to be firmly entrenched financially, are to-day closing their doors. In New South Wales many businesses and' industries would he in a sound position at the present time as a result of the Government's tariff reform policy, if other conditions were similar to those that1 existed a few years ago. But, what is the position? Borrowing abroad has ceased; there is depression throughout the world; and overproduction is accompanied by underconsumption. Behind all this stand the great financial institutions. Recently, **Sir Otto** Niemeyer, Professor Gregory, **Mr. Kershaw** and other representatives of the Bank of England, visited Australia, gave it the " once over," and then departed. {: .speaker-KP8} ##### Senator E B Johnston: -- The Government promised to accept their advice. {: .speaker-JYB} ##### Senator DUNN: -- An election was fought in New South Wales on that issue, and the people of that State overwhelmingly, and rightly, in my opinion, turned down their recommendations. When **Sir Otto** Niemeyer arrived at Auckland on his return journey to the Old Country he made a statement that, to my mind, must affect Australia detrimentally in the eyes of the world; he said that we as a people are living in the lap of luxury. {: .speaker-KP8} ##### Senator E B Johnston: -- He was referring to the people of Sydney, not to those outback. {: .speaker-JYB} ##### Senator DUNN: -- He referred in general terms to the people of Australia. {: .speaker-K0F} ##### Senator Sir George Pearce: -- He referred particularly to Sydney. {: .speaker-KP8} ##### Senator E B Johnston: -- And he said that the country people had great hardships to bear. {: .speaker-JYB} ##### Senator DUNN: -- That is true. *La* every country rural people have not the luxuries that are available to city dwellers; that applies even in a highly civilized modern country like the United States of America. But assuming for the moment that **Sir Otto** Niemeyer referred to Sydney, and that the luxury in which the people of that city have beer living has been the cause of the present financial condition, was it a luxury for Governments of New South Wales, Labour and Nationalist, to proceed with the construction of such a valuable asset as the North Shore Bridge, or an underground railway? Was it a luxury for governments of all political colours to construct railways, roads, dams and other modern means of developing the country? 'Or was the luxury our distinguished visitor spoke of the fact that the people of Sydney and in many instances people in country districts have provided for themselves comfortable homes lit by electric light and installed with means for cooking by gas or electricity; or that they go to their places of business in trams or enjoy the comfort of sleeping' compartments when .they have occasion to. travel on railway trains? {: .speaker-KP8} ##### Senator E B Johnston: -- Or that they have miniature golf links? {: .speaker-JYB} ##### Senator DUNN: -- I should not care if there were millions of miniature golf links if it is the people's pleasure to make use pf them. According to the *Sydney Morning Herald,* the advent of this newpastime of the people has been the means of releasing £600,000 which would not otherwise have seen the light of day. This £600,000 has enabled waste land, which otherwise could not be used, to be developed, and has given employment to artisans of all kinds. If that be luxury, let us have more of it. Is the criticism of **Sir Otto** Niemeyer based on the fact that the people of Australia attend race-courses or cricket matches, that they work 48 hours or 44 hours a week - I should like to see the 44-hour week general throughout Australia - or on the assumption that they dress too well? The average Australian does not dress in a flash style. He is just a happygolucky individual J-~ likes to have a nice suit of clothes, good boots and a good hat, and to enjoy life. Move power to him! Three or four years ago he could do so. As n member of the Australian Imperial Force on leave, I had an opportunity to see the slums of London, Edinburgh, Belfast and Dublin, and the squalor in which workers of Great Britain were living, although at the time most of them wore working in munition factories. There are slums in Sydney, Melbourne and Adelaide and, no doubt, in Perth and Brisbane, and the sooner they are wiped out the better, but they are nothing compared with those I saw in Great Britain. Was our distinguished visitor from the Motherland speaking of our standard of living which we are proud to believe is higher than of any other country? If it be luxury to live in comfortable homes and to clothe ourselves well, the more we have of it in Australia, the better for us. It is said that the values of stocks and shares from the Stock Exchanges have been hammered down to such *a* level as to create a feeling of uneasiness and panic among investors. Eighteen months ago, **Mr. Bavin,** then Premier of New South Wales, was speaking of depression and the press was echoing his words with the result that a far-reaching policy of deflation was set up iii Australia. It is a policy which must be arrested because deflation can be just as cruel in its effects as was the mad inflation which occurred in Germany some years ago. A sound common-sense policy of inflation is necessary in Australia at the present time to arrest any lowering of the standard of living, and of the people's purchasing power. The economic life of the Commonwealth has had a tremendous set-back. There are nearly a quarter of a million of our citizens workless, walking the streets, the highways and the by-ways, and. what other means have we of getting them back to work than a system of sane inflation as .advocated by **Mr. Wickens,** the Commonwealth Statistician? If I remember rightly, **Sir Otto** Niemeyer said that Australia should become a nation of rural or primary workers, and that its manufactured requirements should be supplied by the Motherland. Fifty years ago, according to economists, 70 per cent, of the people of Australia were engaged in rural occupations; but as a result of the application of modern machinery, only 30 per cent, of the population is now so engaged, the other 70 per cent, being employed in secondary industries. Is it wrong for the people of Australia to believe in a policy of protection ? We are told that in 50 years our population will exceed 13,000,000, and the present Government has laid down the foundation of a sound protection policy for the benefit of unborn generations. To-day, the living standard of the workers has been definitely lowered, and there is a growing fear that wage rates and standards of living will bc further reduced. Will it right matters to have a lowering of wages and an increase in the hours of labor? I say. without fear of contradiction, that it will not. Our factories and warehouses are just as sound to-day as they were before the wave of depression came over the Commonwealth. Business enterprises and the sources of production are just as capable of functioning to their fullest capacity as they were eighteen months ago. When I left the Cockatoo Island dockyard to enlist in 1914, hundreds of men were being engaged to work in the dockyard, and in November, 1919, when I returned to Australia, and went among my old workmates, I found that there were 3,000 men on the payroll of the island. It is the largest establishment of its kind south of the line. And there are hundreds of other big factories in Australia that could be "worked to their limit, as we have workmen in plenty who are ready and willing to man them. It is well to remember that during the five years of the Great War Australia piled up a debt of £370,000,000 in its effort to help the Mother Country. Approximately 419,000 Australians volunteered in the Australian Imperial Force and. 318,000 embarked for active service abroad. Of that number 00,000 died from wounds, and. over M00,000 were reported as casualties. Those are statistical facts, not ray figures, aud they prove that the Australian Imperial Force suffered a greater proportion of casualties than did any other of the allied forces. But despite that. great sacrifice for the Empire the Mother Country recently guaranteed to take £8,000,000 of the primary products of the Argentine, a considerable proportion of which will be used to nourish the personnel of the British Army and Navy, the forces upon which the splendid traditions of Great Britain have been built. We are informed that, under the regime of the Czars, Russia became indebted to British investors to the extent of £390,000,000. Following the downfall of the Czar's rule, and the deposition of Kerensky, Russia established a Soviet system under Lenin, and, rightly or wrongly, the new order repudiated the indebtedness of its Czarist predecessors to Great Britain. Yet to-day the Mother Country is trading extensively with Russia, to the detriment of the primary producers of Australia. It is on record that our wheat-farmers are indebted to the storekeepers of Western Australia, South Australia, Victoria and NewSouth Wales to the extent of £6,000,000. Only " a few weeks ago, *32* storekeepers met in conference at Barellan, a small country town on the Riverina, and it was disclosed that' farmers in that district were indebted to them to the amount of £1,050,000. And now, when we are gathering the most bounteous wheat harvest that has ever been known in Australia, our farmers are faced with ruin. All the talk! By the jingoists and professed patriots has proved to be bunkum.' When our Prime Minister **(Mr. Scullin ) and other distinguished representatives of Australia' pleaded' with the British Government foi- a : quota for our wheat and for preference for other of our primary products their -overtures were rejected. They were given nothing.** {: .speaker-K0F} ##### Senator Sir George Pearce: -- And that from a British Labour Government f {: .speaker-JYB} ##### Senator DUNN: -- 1 thank the right honorable senator for his timely interjection. As I have previously stated, there is no Labour Government in power in Great Britain. {: .speaker-KOZ} ##### Senator Hoare: -- It is Labour by name only. {: .speaker-JYB} ##### Senator DUNN: -- It is a government of Labour brumbies, of political labour piebalds. A visit to the British House of Commons will disclose a motley gathering of politicians. Half a dozen may secede from the Tory party under the leadership of **Mr. Baldwin,** or from the Liberal party under **Mr, Lloyd** George, and they are welcomed with open arms into this so-called " Labour Government." But. there are Labour governments in the British Empire. There is one controlling the destinies of New South Wales, another in South Australia, one in Victoria, aud upon the Federal treasury bench is the Scullin Labour Government of the Commonwealth of Australia. {: .speaker-KP8} ##### Senator E B Johnston: -- **Mr. Eldridge** did not speak too highly of that Government. {: .speaker-JYB} ##### Senator DUNN: -- " Am I my brother's keeper? " It is no concern of mine what **Mr. Eldridge** said. Anybody with money and power can gain access to the House of Commons; he merely purchases the representation of a suitable constituency. The only virile men who sit behind the Ramsay MacDonald Labour Government are those from flip Clyde - the 'representatives of Scotland - men who are continually urging the MacDonald Government to do something. It is absurd to claim that there is a Labour Government in control in Great Britain. Representatives of the Australian Commonwealth, of New Zealand, Canada. South Africa, India, and the Straits Settlement, appealed to the British Government to stimulate trade within the Empire and for preference for the colonies, aud their appeals were, rejected. Despite Australia's great sacrifices in the Great War, there are at present over 200 ships flying the British mercantile " red duster" steaming to and from the ports of Soviet Russia, conveying cheap wheat from that country to Great Britain. T, raise no objection against the Soviet Government disposing of ita .farmers' wheat as it desires on the world's markets; hut I do object to the politicians and investors of Great Britain patronizing Russia and the Argentine to the detriment of the' rural workers of the Empire. What is wrong with Canadian wheat, with that from New Zealand, or the grain of Australia? What is wrong with our beef, "our mutton, and Other of our primary products? Why should preference not he given to them, instead of to Russia and the Latin, nation of the Argentine? To-day our farmers are down and out; the overtures of our Prime Minister have been rejected. We asked for bread, and were given a stone. We have made the sacrifice; but we are to receive no return. Why has there been such a slump in values, and the alarming drift in our economic life? It simply means that international money power, which controls the very existence of every man ' and woman in the capitalistcontrolled countries on this earth, has set out to force a process of deflation upon Australia, as it has done with other countries. We read in the press, and have been told in this chamber, that that so-called financial genius from the Bank of England, **Sir Otto** Niemeyer, assisted to adjust the budgets of Serbia and other Balkan States. I repeat that I hope the day will never come when an Australian Government, in an endeavour to balance the budget, will bring down the standard of living in Australia to that of those countries on which **Sir Otto** Niemeyer has left his mark. The salvation of this or any other country lies in the hands of its people. A poet, whose work will never die, has said that, " Who would be free themselves must strike the blow." At the best, the proposals put forward for correcting our present ills are only palliatives. Although at the last election the Govern ment received a mandate from the people to straighten out the country's finances, it is almost impotent, because it is tied by chains forged by the banking institutions of the world. In an article I have before me it is stated that the Bank of England was formed in the 17th century by a clever Scotsman named Paterson. It goes on to say - >The Dutch Prince, William, who had been invited over to England in order that he might help the Whig section oi' the English aristocracy to steal the people's commons, and, in the specious name of religion, perpetrate other public robberies, found himself in financial difficulties. He desired to have at his back a standing " regular " army of trained mercenaries, and he was anxious to remunerate his hangers-on substantially to prevent them from going over to the other side. For these tilings, he needed money. The '"' moneyed interest " caine forward with the money- -at eight per cent. Thus was formed the Hank of England. {: .speaker-K7F} ##### Senator Sir Hal Colebatch: -- From what publication is the honorable senator reading ? {: .speaker-JYB} ##### Senator DUNN: -- I am reading from a statement published in a newspaper registered in Australia. {: .speaker-K7F} ##### Senator Sir Hal Colebatch: -- If there is nothing to be ashamed of, perhaps the honorable senator will be good enough to give the name of the newspaper. {: .speaker-JYB} ##### Senator DUNN: -- I shall tell the honorable senator the name of the newspaper when it suits me to do so; in the meantime he must endeavour to exercise patience. This newspaper states that it. has been proved that the Bank of England was founded by robbers and blackmailers led by a Dutch prince or king. {: .speaker-K1Z} ##### Senator Rae: -- And it has been run by robbers and blackmailers ever since. {: .speaker-JYB} ##### Senator DUNN: -- That is so; but it, operates under the authority of the laws of' England. *[Extension of time granted.]* I thank honorable senators for their courtesy in granting me an extension of time. I find it difficult, **Mr. President,** to find a parliamentary term which will do justice to my feelings when referring to the Bank of England. When I- think of that institution all feelings of peace and goodwill which are supposed,' to permeate us at Christmas time, and all the kind thoughts that are usually prompted by a recollection of the fairy stories told me by my mother when a child at her knee, depart. The Bank of England reminds me of a story of a band of robbers *m The Arabian Nights.* **Sir Otto** Niemeyer is the Ali Baba of to-day. But. instead of leading a band of 40' thieves! **Sir Otto** Niemeyer, according to a British weekly periodical, has a band of only 24 thieves. They are, however, constitutional thieves, for they have been given a royal charter signed by a Dutch king who came from Holland - a charter which enables these political crooks to waylay and rob the people by trickery or Other means. The article from which I quote goes on to say - Nobody 'could be a director who had not invested some thousands of pounds sterling in shares of the hank. Of such a nature were the i-ii les, as Bliss said, a few years ago, in the " Encyclopaedia of Social Reform," the directors of the Bank of England are "practically self-elected." They nominate themselves for their jobs as the banking laws- of England enable them to do. In common with - other countries, Australia is in their grip. We shall not emerge victorious from the present depression .until the people of Australia, through the ballot box, return to the Senate a majority of Labour members pledged to give to the Parliament of this country complete control of the banking system of Australia. That day is coming. And when it comes the brutal majority now sitting in opposition to the Labour party in this chamber will be swept aside and legislation in the interests of the people of Australia will be placed on the statute-book. {: .speaker-KP8} ##### Senator E B Johnston: -- When that day comes the majority might accept the advice of **Sir Otto** Niemeyer, as Labour Ministers, including Messrs. Penton, Hill and. Hogan have done. {: .speaker-JYB} ##### Senator DUNN: -- I believe that those gentlemen have already seen the error of their way, and that good results will accrue from their seeing the light. The article in the newspaper to which I have referred continues - >This institution and the standing army established by Dutch William have ever since been, really, the rulers of England, although they have been prudent enough not to be too ostentatious about the matter. > >The Williamites used to boast of what they called "the Glorious Revolution." That was the Wilis Plot of 1(388, by means of which they soared King .Tames the .Second out of his kingdom, and " feathered their own nests " most profitably. > >When, however, the French Revolution took place and for a while the French proletariat, the " sansculottes." were in power, the " Glorious Revolutionists " of England went into ecstasies of horror about the rulers of Franco. They no longer declared their belief in " revolution," and ceased to mention that there was any such thing as a " Glorious Revolution." Furthermore, they expressed the utmost horror of what they termed " French principles." > >This horror of "French principles" lasted, until that "'gallant" king, the late Edward of England, helped to bring about the '"'cordial understanding " between Britain and France - which led to the terrible war with Germany. > >Since the war, however, it is noticeable that there is a coolness in the relations between Britain and France. This has become almost arctic in its frigidity, as differences have manifested themselves between the financial system imposed upon. Britain by its financial cliques and that imposed upon France by the financial cliques in that country. Some of .our leading citizens, through the columns of the press, have advocated a return to the gold standard. Their cry is, " We must have more gold ". Some few months ago an eminent banker and financial adviser to the League of Nations, whose name I find it difficult to pronounce, pointed out that- >If the gold standard world had been supplied with an adequate amount of currency and credits by the exercise of reasonable economy in the use of its monetary gold supply, there would have been a fall in general prices. I refer to **Sir Henry** Strakosch. {: .speaker-KQZ} ##### Senator Lawson: -- Can the honorable senator pronounce the name of the newspaper from which he quoted just now? {: .speaker-JYB} ##### Senator DUNN: -- The newspaper from which I quoted', and the name of which I promised to reveal, is one of the most eminent daily newspapers in the Australian journalistic world. It has a highly-trained staff of financial and other experts, and wields a greater influence in the social, industrial and political' life of this nation than does the *Evening News,* which has been trying to resist a drop in its circulation by getting **Senator Colebatch** to write articles for publication from day to day. I refer to the *Labor Daily.* {: .speaker-K7F} ##### Senator Sir Hai Colebatch: -- A very good paper, too. {: .speaker-JYB} ##### Senator DUNN: -- The *Labor Daily* has a circulation of about 100,000 copies daily - a circulation larger than that of the newspaper previously mentioned by me, which prefers to go outside its own State to find writers on financial subjects. I have no objection to that policy being adopted in order to prevent a further drop in the circulation. {: #debate-13-s1 .speaker-KPQ} ##### The PRESIDENT (Senator the Hon W Kingsmill: -- Even allowing for the wide bounds set in this debate, I do not think that the honorable senator can drag in a comparison between newspapers. He must, therefore, not attempt to do so. {: .speaker-JYB} ##### Senator DUNN: -- Extracts from newspapers have been freely quoted during this debate; but if you, sir, rule that 1 am not in order in quoting from them I shall bow to your ruling. The privilege has been extended to others. {: .speaker-KPQ} ##### The PRESIDENT (Senator the Hon W Kingsmill: -- It is a privilege that must not be abused. {: .speaker-JYB} ##### Senator DUNN: -- Australia, we are told, is to bc forced back to the gold standard. Prior to the release of the' wardogs of Europe, notes were looked upon by some with, suspicion, but: when the stocks of gold, were called in and paper money was more extensively circulated, doubt and fear concerning their value gradually disappeared. The gold supply of the world is diminishing. Money must be made available to assist, trade and industry, and the sooner it is, the *sooner* will it bo possible to defeat the conspiracy to impoverish the people and blackmail the nation, such as now being done by the Rank of England and other banking institutions. Although these institutions are now blackmailing the people of Australia, I feel that as a result of the wise and sound administration of this Government this country will again enjoy prosperity. Personally, I do not think that this Government has functioned as rapidly as it should, but it has gone as far as the brutal majority in opposition would allow it. Speaking for myself, and I believe for my colleagues, in this chamber and in another place, I may say that the sooner my friends opposite throw down the gage of battle the better , it will be for the people of Australia. The members of the Labour party are quite prepared to take up their challenge, and, if an appeal is made to the people in June or July of next year, I know what the ballot box will disclose. A Labour Government will again be returned and in this chamber it will not have to face brutal opposition- {: #debate-13-s2 .speaker-10000} ##### The PRESIDENT: -- Order ! {: .speaker-JYB} ##### Senator DUNN: -- To every measure introduced .in the interests of the people as has been the case during recent months. {: .speaker-10000} ##### The PRESIDENT: -- The honorable member should cease speaking when called to order. The reiteration of the term " brutal " is distinctly out of order. {: .speaker-JYB} ##### Senator DUNN: -- If the word " brutal " is disorderly, I withdraw it. **Senator** COOPER (Queensland) [4.41 j. - **Senator Dunn,** in the course of his speech, wandered to the Argentine, Canada, England and France, but 1 propose to come nearer home. About twelve months ago the members of the Labour party in another place returned from the hustings flushed with victory - and full of promises. Honorable senators opposite said during that election campaign that, if the Labour party was returned to power conditions would improve-, employment would be found for every one, and that everything in the garden would be glorious. But instead of the improvement promised, we find that the depression is far worse than it was when the Government took office. A Minister of the Crown assured the people, and particularly the workers, that, by the imposition of high tariffs and embargoes, employment would soon be found for every one ; but during the Labour Government's regime unemployment has increased from 12.1 per cent, to 22 per cent. I do not place the entire responsibility for our present situation upon this Government, because practically every country is experiencing depression such as that which usually follows a great international conflict. I blame the Government, however, for misleading the people by saying that, if a Labour Government were returned to power. Australia would immediately be prosperous and that employment would be available to every one. When the Treasurer presented his budget in July of this year, which was seven months after the Government took office, he disclosed a deficit of £1,500,000, which, together with the deficit of over £5,000,000 left by the Bruce-Page Government, made a total deficit of £6,458,728. On page 9 of the financial statement presented by the Acting Treasurer **(Mr. Lyons),** it. is shown that, during the seven years which the Bruce-Page Government was in office. £14,000,000 in excess of the amount required by statute was paid into the national debt sinking fund. If we deduct, the deficit pf £5,000,000 of tlie Bruce-Page Government from the £14,000,000 mentioned, a surplus of £9,000,000 is shown. Despite these figures, honorable senators opposite charge that Administration with extravagance. {: .speaker-KOZ} ##### Senator Hoare: -- What, about the £125.000,000 borrowed during the last three years the Bruce-Page Govern mont was in office? {: #debate-13-s3 .speaker-JQP} ##### Senator COOPER:
QUEENSLAND -- I am merely quoting the figures contained in the Acting Treasurer's financial statement. {: .speaker-KRZ} ##### Senator Lynch: -- The honorable senator's figures do not include appropriations for road-making and naval construction. {: .speaker-JQP} ##### Senator COOPER: -- I arn quoting the Acting Treasurer's figures, the accuracy of which I arn sure honorable senators opposite will not deny. By adopting such a policy that Government saved the taxpayers £840,000 a year, if interest is taken at 6 per cent. {: .speaker-JZ6} ##### Senator O'Halloran: -- The total debts incurred by that Government greatly exceeded the saving mentioned. {: .speaker-JQP} ##### Senator COOPER: -- During the twin of office of the Bruce-Page Government, the total increases of the Commonwealth debt was £13,000,000. It is of no use for honorable senators opposite to try to confuse the public by quoting figures relating to State debts, which, in the same period, increased by £201,000,000; Queensland's contribution, I am sorry to say, having amounted to £28,000,000. {: .speaker-KOZ} ##### Senator Hoare: -- The Bruce-Page Government was left a legacy of £7,000,000 by the Hughes Government. {: .speaker-JQP} ##### Senator COOPER: -- Allowing for that, the Bruce-Page Government was still £7,000,000 to the good after spending approximately £5,000,000 on warships for the defence of this country. Let us examine the financial proposals of the present Government, the members of which, when in opposition, continually attacked the' Bruce-Page Government on the ground of extravagance. In the budget, presented last July, it proposed to raise by taxation an additional £12,500,000- nearly £2 a head of the population - from the taxpayers of this country. Prom that time the finances of the Commonwealth dropped behind . considerably each month. until they resulted in the astounding deficit of £6,747,000 for the first quarter of the financial year. Although the Government was aware of this drift - the monthly returns showed clearly what was happening - it made no attempt to summon Parliament to pass corrective measures until a month after the expiration of the first quarter of the financial year. Are we not justified in flaking ourselves why the Government, with its knowledge of the drift that was occurring in the finances of the Commonwealth, did not instantly call Parliament together? {: .speaker-JZ6} ##### Senator O'Halloran: -- I ask the honorable senator to quote the figures relating to the expenditure of the last year of the Bruce-Page Government, and the proposed expenditure for this year. {: .speaker-JQP} ##### Senator COOPER: -- The proposal is to expend £4,000,000 more this year than was spent in the last year- of the BrucePage Government. Tlie only reason that we can assign for the failure of the Government to attempt at an earlier date to arrest the financial drift is that an election was pending in one of the States. {: .speaker-KRZ} ##### Senator Lynch: -- That election was more of an auction. {: .speaker-JQP} ##### Senator COOPER: -- Apparently its attitude was, " We shall see what is the' result of the election before we deal with the finances of the Commonwealth." Its dalliance requires explaining, in view of the fact that the Prime Minister **(Mr. Scullin)** was a party to the following resolution passed in Melbourne at a conference that took place with the Premiers of the States on the 5 th and 6th August last : - >That the several governments represented at this conference declare their fixed determination to balance their respective budgets for the financial year 1930-31, and to maintain a similar balanced budget in future years. This budget equilibrium will be maintained oil such a basis as is consistent with the repayment or conversion in Australia of existing internal debt maturing in the next few years. > >Further, if during any financial year there are indications of a failure of revenue to meet expenditure, immediate further steps will be taken during the year to ensure that the budgets shall balance. {: .speaker-K1Z} ##### Senator Rae: -- Have any of the State budgets been balanced ? {: .speaker-JQP} ##### Senator COOPER: -- I am dealing now with the resolution to. call Parliament together immediately it became apparent that there was any drift in the finances of the Commonwealth. I maintain that Parliament should have been summoned as soon as the operations of the first quarter of the year disclosed a deficiency of nearly £7,000,000. Yet, we were not asked to reassemble for another month; and nothing of a practical nature has been done since we met. An early summoning of Parliament would have shown the people that the Government earnestly desired to balance its budget. But, instead of that, we had the spectacle of Federal Ministers and Labour members gallivanting throughout the State pf New South Wales. When, eventually, Parliament reassembled, instead of business-like proposals being advanced tq remedy the position, .government supporters wrangled with each other for a fortnight, and it was impossible to obtain any definite pronouncement of policy. This party wrangle culminated in the passing of the following resolution in caucus, at the instance of a responsible Minister: - >That legislation be passed immediately, compel ling bondholders in the £27,000,000 loan maturing in December, to hold their bonds for a further period of twelve months, interest to be paid as usual, with a proviso that persons in necessitous circumstances may receive immediate payment of small amounts by cashing their bonds at the Commonwealth, same to bc hold as non-interest-bearing security, the onus of proving that circumstances justify -payment to fall on bondholders. The following motion was moved by the honorable member for Fremantle **(Mr. Curtin),** and agreed to: - >That a demand be made on the Commonwealth Bank Board to underwrite the £27,000,000 loan, failing which **Mr. Anstey's** motion be put into effect. We are now witnessing the spectacle of the Cabinet-*-the leaders, or .the captains of the party-- being browbeaten and overwhelmed by the rank and file in the caucus. Rule by the forecastle was agreed to by 22 votes .to sixteen. It is humiliating for any party, any industry, or any business to be dictated to by its rank and file. If the leaders cannot impose their will on their followers, it is their duty to make way for others who can do so. During this debate a great deal has been said and published in regard to the compulsory releasing of credits, which is regarded as. a fairy wand that, if waved, would extricate us from all our troubles. If that be so, it is extraordinary that every other country has not recognized its outstanding qualities. What exactly is meant by this phrase? From what I have been able to gather, the releasing of credits implies that there . are untold millions sterling locked up in the strongrooms and vaults of the banks of this country. Now let us endeavour to ascertain just where these untold millions are. At the end pf each quarter, the trading banks of Australia present a list of balances, technically called bank aggregates, for publication in all the newspapers throughout the Commonwealth, for the benefit of those who wish to ascertain the exact financial position of these institutions. On the 30th September, 1929, the deposits in the trading banks amounted to practically £2S0,000,000. By the 30th September, 1930, they had shrunk to, roughly, £263,000,000. Therefore, during the twelve months, the savings of the people, or the excess wealth of the nation, decreased by nearly £17,000,000. Similarly the reserve of -gold' and notes on the 30th September, 1929, amounted to, approximately £44,000,000, and on the 30th September, 1930, to approximately £36,000,000. It will thus be seen that, although the . individual income was reduced, the amount actually advanced was. greater, because the reserve was encroached upon tq the tune of, roughly, £8,000,000. Compared with the deposits, the advances :pf the banks .amounted to 93.32 per cent, on the 30th September, 192.9 ; but, by the end of .September of this year, they had increased to 98.14 cent.; and if we take into account Government securities, we find that the (percentage of advances ito, deposits was 105.6 per cent. Can any person with the slightest understanding of finance hold that the Acting Treasurer ;(Mr. Lyons) Was wrong in saying, in the course of his financial statement, that the limit of safety has been reached so far as the trading banks are concerned? A community cannot lend more than it can earn. The Commonwealth Bank has also advanced to the fullest extent on Government securities, to the trading banks and in other ways. The bulk of the £263,000,000 held by the trading banks on deposit has been lent to private businesses,wool growers, and wheat-farmers, and. used ingeneral advances made for carrying on the business of the community, and all that the banks hold for their money are, legal documents which would be useless for feeding the unemployed. They would first have to be turned into wealth before they could be used for that purpose.All that the banks actually hold in, cash is £33,000,000 in paper money and £3,000,000 in coin for the ordinary daily trading requirements of the nation. If that money were taken from them the banks could not carry on their ordinary daily trading. The same remarks apply to savings bank deposits. The trustees of the savings banks have not hoarded the money deposited by the thrifty. They have lent it out to municipalities, governments, harbour trusts and other semigovernmental concerns. They have also made considerable advances to home builders. There does not exist any such thing as a credit which can be grasped and turned into use straight away. The credit of the nation is really only the £l,100,000,000 which Australia owes. Extended to every individual in the community, it roughly amounts to £170 per head, and represents one of the greatest credits the world has ever seen. Against, that credit we have the national wealth in the shape of minerals, lands -and buildings and over 6,000,000 healthy, strong, worthy Australians who carry on their work by means of it. We can only surmise that what the Labour party means by a compulsory release of credits is the issue of a printed slip of paper against nothing - in the ordinary language of the day,the inflation of the currency. In the *Sydney Morning Herald* of the 13th November, I noticed the following letter : - {: .page-start } page 875 {:#debate-14} ### FOLLY OF INFLATION {:#subdebate-14-0} #### Germanbankingaccount {:#subdebate-14-1} #### Rendered Valueless A letter showing the devastating effect of: inflation in Germany has been forwarded to the "Herald" by **Dr. A.** Reginald McLeod. "This interesting document,"'he states, "might cool the enthusiasm ' of individuals countenancing inflation. One can see that nearly, £1,200, in the Berlin Bank, completely disappeared within a few hours, and that is exactly what will happen to the depositors in Australia if the anticipated move of inflation is proceeded with." The letter, which was sent to **Mrs. Lilly** Marsland, of. Chatswood, by the Dresdner Bank at Berlin in June, 1927, is as follows: - " We received to-day a letter of **Dr. A.** Reginald McLeod, Sydney, dated 9th ultimo, requesting us. to inform youon the present standing of your account with us, which you had opened on the 27th July, 1922. In reply we beg to inform you that the balance of your former account, viz., 22,926.40 paper marks are of no value any. more, on account of the depreciation of the old currency. You will no doubt have learned from the newspapers that in accordance with the DawesPlan a new currency (gold-currency) has been established in Germany in the relation of 1 Reichsmark being equal to 1,000,000,000,000 paper marks, of which your former account consisted. By converting your papermark balance intoReichsinark under this relation there was no bookable item left. Therefore your account had to be closed for want of substance." The same result would follow inflation in this country. The inflation would probably be small at first, but it would proceed to get. larger and larger until the whole of the savings of the thrifty people of this country would be wiped out. The advocate of an inflation of currency is no friend of the worker and no friend of his country. The former would be the first to feel the evil effects of inflation. His wages would not be able to keep pace with the advance in the prices of what he would be obliged to purchase. {: #subdebate-14-1-s0 .speaker-JQP} ##### Senator COOPER: -- The honorable senator must realize that the cost of living has come down considerably in every State. {: .speaker-K1Z} ##### Senator Rae: -- According to figures, but not according to experience. {: .speaker-JQP} ##### Senator COOPER: -- If we set up a standard we must abide by it. If we are to knock it down we must have something to replace it. {: .speaker-K1Z} ##### Senator Rae: -- The facts prove otherwise. {: .speaker-JQP} ##### Senator COOPER: -- Facts, which are the only means of deciding anything, show that the cost of living has been reduced in every State. {: .speaker-K1Z} ##### Senator Rae: -- No statistics can disprove the fact that the man who buys an article finds that he has to pay a certain price for it. {: .speaker-JQP} ##### Senator COOPER: -- I can prove to the honorable senator that in Brisbane practically every commodity is cheaper than it was 6 months ago. Half a sheep can bc bought for 6s. 9d. If that is not cheap living I do not know what it is. There has been a considerable amount of talk that the capitalist has lost nothing during this period of depression. {: .speaker-KOZ} ##### Senator Hoare: -- I do not think any one has said that. {: .speaker-JQP} ##### Senator COOPER: -- It lias been definitely said in the newspapers. {: .speaker-KOZ} ##### Senator Hoare: -- I think that the newspapers are wrong. {: .speaker-JQP} ##### Senator COOPER: -- I am glad to hour the honorable senator say so. I quote the following from the *Australian Mining Standard* of the 23rd October - >An estimate of the decline in share values is given in the most recent issue of the "Stock .Exchange of Melbourne Official Record." The estimate is in two parts. ( 1 ) of bank shares, including all banks quoted on the Sydney Stock Exchange, except Bank of Now Zealand, and (2) of 33 industrial issues. The latter contain rather more Melbourne issues than Sydney issues. A comparison of bank shares, 'average price of 102!), with the price on October 1. 1930, shows a fall of £34,222,523 from £S9,074.032 to £55,352,10!), and of ordinary shares of the 33 industrial issues a fall of £20,456,159, from £39,0IS,024 to £19,101,805. Iri the former case, the fall is 38.2 per cent., mid in the industrial companies 51.0 per cent. The tacts disclosed in that article conclusively prove that the investor has suffered considerably during this period of depression. Our primary products have also been selling at reduced prices. In the case of wool and wheat the prices realized are far below - the cost of production. Industrialists, farmers, pastoralists, investors and people of all typos have had to live on a reduced income. While these people have been forced by natural economic laws to live upon reduced, incomes, or to fall back upon their reserves, the Government, with a full knowledge of the situation and itself in great financial difficulties, has nui do no attempt to cope with the situation by reducing expenditure. On the contrary, it has increased its expenditure by practically £-1,000,000 per annum. The National Parliament should be the fi rsl to set an example by living within its onn means, and it is to the everlasting shame of this Government that it has failed to make airy serious endeavour to bring its expenditure into conformity with its revenue. It h,as imposed' additional crushing burdens , of taxation on the depleted incomes of taxpayers, and has resorted to the desperate and futile policy of trying to tax the country back to prosperity. Already our taxpayers have an income of £100,000,000 less than they did in previous years, and it should be evident that it is impossible to wring this extra taxation out of them. Such a policy will merely further deplete the small reserves possessed by our taxpayers - a reserve which is so essential to industry - which would normally be reinvested and do more to relieve unemployment than will the ineffective efforts of the Government. In his supplementary financial statement, the Acting Treasurer **(Mr. Lyons)** states - >Up to the present the chief sufferers from the loss nf income are thu primary producer, thu unemployed,- and those in receipt of incomes from business profits which Iia viseriously declined or vanished. Yet. knowing that, the Acting Treasurer proposes to impose a further burden on the community in the shape of this extraordinarily heavy increase in taxation! The outstanding feature of this exorbitant and grossly unfair proposal is that it will fall on those., who derive their incomes from property or interest. It is a direct tax upon the thrifty in the community - upon those who, throughout their lives, have made provision for their old age in order that they shall not place upon the Government the necessity to maintain them in the winter of their lives. They have invested their hardearned savings in small properties, and arc at present receiving from that source a very much' diminished income compared with that- of a. couple of years ago. Yet their attenuated receipts are to bear an additional impost that, in its severity, is without parallel in the history of the Commonwealth. As an example, I mention that previously an income- of £300 a year from property was taxed to the extent of £4 4s. per annum. Under this proposal of the Government the tax upon that income will be £38 18s. Some honorable senators opposite may claim that £300 a year is a fair income. Considering the times, that is debatable. However, it is most improper to inflict such an excessive . increase upon a class of taxpayers who cannot pass even a portion of it. on, particularly when the value of their investments has ah-eady .fallen appreciably. The two most necessary factors at this juncture are that governments should live within their incomes, and that every endeavour should lie made to place our unemployed back in work. The latter is impossible of achievement if the Government insists upon piling additional taxation on the industrial and producing sections of the community, lt is apparent to all who caro to give thought to the problem that, instead of bringing in the desired additional revenue, the Government will defeat its purpose; there will not be the incomes to pay the needed taxes. The Government is simply killing the goose that lays the golden eggs. I suspect that it is realizing that fact at. the eleventh hour, and is becoming panicky that it will dry up the sources of revenue. I am confident that if the country were properly managed, and taxation kept in reasonable bounds, Australia would quickly regain its old prosperity. We 1 1 ave the goods with which to supply the world's requirements, and which the world wants, but, naturally, the consumers of the world will pay only a reasonable price for them. Unless we reduce our costs of production to enable us to compete in the markets of the world, our finances will remain in their present chaotic condition. It is necessary for the Government to pursue a bold course; to set an example for others to follow. Let it put its house in order and live within its income, and Australia will quickly overcome its economic difficulties. I urge the. Government to abandon its weak-kneed policy of drift, und face the issue. Let it forsake the role of Pliable, assume that of Christian, and steadfastly load the country through the financial slough of despond which bars its 'way to prosperity. {: #subdebate-14-1-s1 .speaker-KTR} ##### Senator MCLACHLAN:
South Australia -- This interesting document, the printing of which we are now debating, betrays within itself evidence of its being hybrid. Without, doubt, some of its contents' are tlie outcome of the various conferences that 'took place between the Prima Minister, the State Treasurers and some distinguished financial guests, who were invited to visit Australia and tender advice to our 1 governments. Oric may 'find echoes of that advice in this financial statement, alsodefinite evidence of alterations in thepolicy that was originally decided 'upon by the Federal Government. It would-' appear that an obtrusion of the " super.government" upon the Scullin Government has brought about this supplementary financial statement. It is neitherhorse nor ass. It might have been well' for Australia had we had a lead one way or the other; had we had something tangible either along the lines originally decided upon by the Prime Minister, or moulded upon the mad proposalsemanating from caucus. We should then have known where we were. Perhaps the present difficulty is the result of the absence from Australia of the right honorable gentleman who is, from the point of view of honorable senators on thisside if not from that of his own party, the- head of the National Government. It is interesting to examine the supplementary financial statement from this point of view. Has there or has there not been a realization of the position by the Government? I believe that we can with advantage examine a few of the statements that were made a few months ago, when the Prime Minister, in his capacity of Treasurer, presented his budget speech on the 9t.h July of this year; a speech to which this financial statement is an addendum; There then appeared to bo glimmerings in the minds of the Government of tlie difficulty with which it was faced ; of some realization of the desperate position into which Australia had fallen. Embodied in that speech is the following passage: - >The Loan Council must secure overseas, by a long-dated loan or other means, not less than £30,000.000 in the near future in order to clear up the London position. Failure to make such provision would bring about an embarrassing situation. ,The difficulty arises entirely from our temporary inability to secure command of funds in London. The statement continues - >This situation has been causing the Commonwealth Government and the Loan Council grave concern for some time past, and has been" the subject of intimate negotiations with Loudon financial houses. T am hopeful that these negotiation* will prove successful, and that the meeting of our London commitment* will be arranged on satisfactory terms at an early date. Later in the statement there is a comparison of- London market quotations for Australian stocks- and those of sister dominions. Reference is.- made to , the impossibility . of balancing our position overseas- other than by the- export of; tremendous1 quantities of gold. There is also evidence of a realisation by the Government at that time that things could not continue as they were. The statement then expresses the pious hope - a hope not yet realized - that the tariff policy of the Government would cure our ills.. Higher tariffs, even to the extent of prohibitions, were imposed with a view to improving the position; but even the Government itself does not now expect relief from that source. So far from assisting us, the higher duties and prohibitions have caused further unemployment and greater financial difficulties. The Government's fiscal policy has had a boomerang, effect. In July last there seemed to be some realization by the Government of Australia's desperate financial position, and had it then grappled with the. position courageously, as I believe the Prime Minister intended, we should now have had nothing, to lay at its door. We could only say that it did the best possible in the circumstances. But what do we find ? The Government plays up to the worst element in the. Labour party ; it is afraid to do what is right in the interest of Australia. Does it fear the consequences of doing right? Every rightthinkingperson would have supported the Prime Minister and those associated with him, if they had taken their courage in their hands and, in the interests of the nation, acted on the independent advice proffered by an expert. Instead of doing that, the Government has bowed the knee to Baal, has cravenly accepted instructions from caucus,, composed, for the most part, of those who do not understand the seriousness of the position, and fail to realize that ruin and disgrace must be the inevitable result of following their advice. When the Government invited **Sir Otto** Niemeyer tq Australia; when it conferred with the State Premiers, and entered into an agreement with them, I believe that it was actuated by right motives. But its subsequent actions are nothing short of craven. For political purposes it has backed down from the position it then took up, with the result , that unemployment is. increasing;, industry is almost at a. stand-still and the turnover of, every- section of the community,, with the exception of the sheltered few who,- ace under tha protection, of. certain laws,, or are in receipt of salaries, from the Commonwealth Treasury, is reduced. There are times when the exigencies of party must be subservient to, the welfare- of the nation.. That time, had arrived when the Prime Minister delivered his budget speech in, July. That the Government placed party before country stands to its eternal shame. It would appear that some of the Government supporters are more interested in adopting the role of political showmen than ' in doing their duty as representatives of the people. Although the Government realized the necessity for calling Parliament together, it delayed, doing so in ' order to enable party strings to be pulled, and to' provide facilities for what **Senator Lynch** has aptly described as 'the- "auction sale" which recently took place in New South Wales. The result of. the New South Wales election has strengthened the hands of the extremists in the Labour party, and now in the party-room they use expressions which can only be described as meaningless and absurd. I frankly confess that I am disappointed with the Government - one would expect greater courage from men who hold the King's commission - yet I believe that among them are some who have the welfare of this country at heart. I appeal to them in the interests of Australia to defy those who would bring about their country's undoing. I realize that this is not the time for incrimination, but when I see my country's future jeopardized by inaction and ineptitude, I cannot refrain from expressing my disapprobation of the Government's delay in summoning Parliament, Months ago the Government, indicated that if the financial drift continued Parliament would have to be called together. That that drift did continue this paper which we are asked to print shows. Nevertheless, Parliament was not summoned for reasons which I have already stated. I now say to the Government that, whatever it proposes to do - whether good,. bad or indifferent-- let it be done immediately in the interests of industry. The very uncertainty of the position is doing incalculable harm. People do not know where they are. Indeed, he would be an extremely sanguine , man who would attempt to prove that the Government knows where it is in fiscal matters. The Government should take definite action along well defined lines. The people are calling out for some definite policy in place of the ever changing incidence of tariffs and ,of taxation. The Government should decide on a policy for a period of at least twelve months so that industry could formulate its plans that far ahead. There are certain sheltered persons of the community who, because they have received the protection of awards " of Wages "Boards and Arbitration Courts and have not shared the sufferings of the rest of the people, do not realize the desperate position .which confronts Australia. We are told that we must maintain the Australian standard of living. But what is that standard, when official records show that 200,000 persons in the community are in receipt of the dole? The actual number must be considerably more. Surely it is time we opened our eyes to see -what is ahead of us ! What do these men, who line up daily at Richmond and other places, asking for the necessaries of life, think of our standard of living? What is their standard? The standard of living of which some honorable senators speak so glibly is, after all, something abstract. Instead of considering only the standard of living of those in sheltered industries, we should consider the standard of the masses of the people. I have always stood for industrial arbitration, but in the interests of the multitudes who daily crave a pittance to keep them from starvation, I maintain that it would be better that those who are now protected should be called upon to accept a reduction of wages in order to provide employment for others. I am associated with one or two industries which, although not suffering grievously from the present depression, have had to dispense with the services of ;a number of employees. The absence of markets, and the indecision of the Government, make them so uncertain regarding the future that they can not formulate any plans. . Their money is accumulating, yet they have had to put men off. It may be that that money will be used to swell the present Conversion Loan - which I wish all success - 'but it is not good that money should be withdrawn from industry even for such purposes. If -those in industry knew where they were there would be .greater -confidence in the future, with beneficial results to governments and people alike. {: .speaker-K0F} ##### Senator Sir George Pearce: -- .Money would then be invested .in enterprise. {: .speaker-KTR} ##### Senator MCLACHLAN: -- I c'harge the Government with inaction and ineptitude, and with having sacrificed the interests of the country to obtain a party advantage. I say emphatically that the time for political manoeuvering has passed, that the game of politics can no longer be played with that finesse which is sometimes associated with a game of draughts or chess. The time is overdue for the game of politics to be played honestly in the interests of the nation. I blame the Government most for having neglected its duty pending the result of the New South Wales election. There can be only one explanation of the delay in summoning Parliament. The Government 'knew that if it did its duty, as it was seen by the Prime Minister at the . Premiers Conference in Melbourne, the " auction sale " in New South Wales would not attract the number of bidders it did attract because the people would realize that they were -being offered something impossible of attainment Goaded into action it -produced the financial proposals which have been brought before Parliament. It would appear from one portion of the statement that the Government proposed to adhere to the decisions reached at the conference of Commonwealth and State Ministers, which was held in Melbourne an August. That it intended to give full effect to the decisions reached at that conference is obvious from the material contained in a portion of this document; but later its courage failed, and it pulled down the flag because of hostile criticism with which I shall deal later. The Government has failed to carry out the policy contained in the budget presented to this chamber in July last. I venture to say that if the Government had carried out its policy, those who made so much noise during the recent New South Wales election, and who spoke about, frozen credits, would have curled up under its influence. What did they do? They placed a weapon in the hands of the cranks - the madmen of the party, as they described them - and these men are now endeavouring to replace some of their sane Ministers by others who wish to do certain things to which I shall refer later. The inactivity of the Federal Parliament at the present juncture has been freely commented upon. Honorable senators have been compelled to travel from the different States to Canberra to find that when the Senate assembles that some unimportant measure is placed before them for consideration, and. then the proceedings are adjourned while some little game is being played in the party room in Canberra, in Melbourne, or in the Trades Hall in Sydney. In that building the game is played most effectively. I understand that at a recent caucus meeting chairs wore hurled across the room. I am glad to learn that on this occasion those who have been so vigorous in their desire to sool on others, took part in the melee, and suffered at the hands of their infuriated friends. The country generally has' lost confidence in the Government because of the statements of its supporters concerning inflation, and even repudiation. The people, who are entitled to look to the Government which is in control of the nation's destinies for a lead, are wondering what caucus is doing and how the party machine is functioning. The Government must emerge from its inertia and do something worth while in the interests of the country. The financial proposals of the Government are of little value; they will not assist to balance the budget. As **Senator Cooper** said, some Ministers are breaking faith with the head of the Government. As it is not carrying out its proposals, the people of Australia realize that there is more in this political game than meets the eye. The people are waiting for action which is deferred by decisions reached in the caucus room. The people are losing confidence in the great national institution in which they have always believed, owing to blatancy on one side and weakness on the other. {: .speaker-K1L} ##### Senator Barnes: -- Which side is blatant and which is weak? {: .speaker-KTR} ##### Senator McLACHLAN: -- I do not regard the Assistant Minister as blatant. He is always to the point, and I would not credit him with being weak if he had his own way. He must, however, take what is coming to him, in common with other members of the Cabinet. It is the blatancy of some which has got this country into its present position. Our present depression is due to some extent to the delay of the Government. What is the psychology of the people of Australia to-day with respect to our economic position? They are afraid. They are depressed. There are no avenues in which they can profitably invest their money. The unemployed are losing hope. That is not a position in which this country should be placed. What is the opinion of the depositors in the savings banks? If honorable senators, particularly those from New South Wales, will study the banking figures, they will realize what the people are beginning to think. Recently, no less than £3,000,000 was withdrawn from the Savings Bank in New South Wales. Those who have withdrawn the money cannot have a. very hopeful outlook. What does the Government offer them? It offers them this supplementary budget. {: .speaker-K0F} ##### Senator Sir GEORGE PEARCE:
WESTERN AUSTRALIA · ALP; NAT from 1917; UAP from 1931 -- Additional taxation. {: .speaker-KTR} ##### Senator McLACHLAN: -- Yes, which is to be levied on the thrifty, while others in. sheltered positions will escape. The proposed additional taxation is unjust in its incidence; it is inequitable, and savours rather of political than national interest. This is the budget that is offered in place of one that would restore financial equilibrium and secure the confidence of the people. We were informed this afternoon by an honorable senator noted for his eloquence and powerful voice, that the scene of battle is now to be changed. It is no longer to be a battle against the Commonwealth and other Australian banks, but against that great national institution established by Paterson, who, I am glad to say, was a Scotsman, in Lombard-street, London. It is the Bank of England which **Senator Dunn** says is impoverishing the people and blackmailing the nation. Such utterances will, I suppose, he placarded all over the country prior to the next election which **Senator Dunn,** speaking for himself and not for his party, says will be held next year. The Bank of England, we are informed, is the great menace to Australia's credit. This is the Colossus which is going to he attacked. I can imagine **Senator Dunn,** in his political armour aud with poised spear, charging this mountain of gold in Lombardstreet. The attack is now to be made on the Bank of England. {: .speaker-K7F} ##### Senator Sir Hat Colebatch: -- Which Ramsay MacDonald and Phillip Snowden say is, undoubtedly, the bulwark of England. {: #subdebate-14-1-s2 .speaker-KTR} ##### Senator McLACHLAN:
SOUTH AUSTRALIA · NAT -- Yes, the Bank of England, which is the finest institution of its kind in. the world, has always adopted a sound financial policy in the interests of the nation, and despite what some blatant orators say, has been of great service in the issue of credits. [ shall shortly submit a question to honorable senators opposite concerning credit, which I am sure they cannot satisfactorily answer. Although the depression we are now experiencing is not peculiar to Australia, T denounce the Government for not administering the right medicine in order to reduce the nation's temperature. One can see at a glance that it is utterly impossible for the Government to obtain additional revenue in the maimer proposed without increasing prices and. seriously interfering with primary production, which is the bulwark of our national prosperity. It does not lie within the - power of this or any other government to remove depression; but the Government could materially assist to relieve it. **Senator Dunn** quoted mi article with respect to the operations of the Bank of England which, if any value were placed upon it, might induce some to think that our national banking institutions had failed, and that Parliament itself had failed in its duty to the people. {: .speaker-K0F} ##### Senator Sir George Pearce: -- Perhaps the name is objectionable. Honorable senators opposite might prefer the Bank of Russia. {: .speaker-KTR} ##### Senator MCLACHLAN: -- The Bank of Russia is in a sorry plight, as most of its securities are at present held outside of Russia. I now wish to refer to a subject which has already been debated in the Senate, and which I would not have raised had it not been for the attitude adopted by **Senator Dunn.** On more than one occasion the Leader of the Government in the Senate **(Senator Daly),** in referring to the difficult position in which the Government finds itself, and to the necessity of relieving credits, evaded - perhaps not intentionally - the exchange position and its benefit to the primary producers of Australia. On page 5 of the financial statement we find the following: >From time to time tlie bunks raised the exchange rate for London money and rationed their customers, with the object of conserving London funds, restricting imports and assisting exports. Steps were also taken by the Commonwealth Government in the early part of the present session of Parliament to restrict imports by rationing and by tariff measures. And mark this - >Subsequently, a scheme for the mobilization of London exchange was adopted under which the banks agreed to pool their London funds and to provide approximately £3,000,000 a month in exchange for 'Austral ian money. The London funds so provided were to be used to meet the national liabilities in respect of interest and limited services of the Commonwealth and State Governments. This scheme took effect from the 1st September. In a statement delivered in this chamber on the 9th July last, we had an indication that the right honorable the Prime Minister was pursuing that course; but we now have complete documentary evidence that this policy, instead of being put into force from the 1st of January of the coming year, has been operating since the 1st September of this year. Despite this, we are informed that the banks are of no assistance to the Government. They are helping the Government, and, I contend, in an improper way, to keep down the exchange rates, in accordance with the wishes of the Government, Information on this point was sought from the Vice-President of the Executive Council **(Senator Daly)** by **Senator Colebatch** the other day, but the desired admission, which was not forthcoming, is now before us in black and white. We are told that those controlling the banking institutions are vultures who prey upon the people of this country by preventing the release of credits and the issue of additional notes. In what way could these notes be employed if they were released? Those in control of our hanking institutions are endeavouring to restore our financial equilibrium in order that the Government may not be forced to ask for time in which to meet its obligations at home and overseas. {: .speaker-K7F} ##### Senator Sir Hal Colebatch: -- They handed over their gold to the Government, and took notes in exchange. {: .speaker-KTR} ##### Senator McLACHLAN: -- That is so; chey are assisting the Government in every direction.We have also heard of the demand that there shall be a release of what, I believe, one gentleman described as " the frozen stream of credit:" {: .speaker-KLU} ##### Senator Sir William Glasgow: -- The phrase used was " the congealed stream of credit." {: .speaker-KTR} ##### Senator McLACHLAN: -- I believe the idea is to have a central reserve bank, or some institution of the kind, to make credit available. I ask honorable senators to consider two propositions concerning credit: First, what more credit can a reserve bank, or for that matter all the banks in Australia, provide than is being provided to-day, where it is needed - overseas - at the rate of £3,000,000 a month? This is being done at the expense of those whose claims have been advocated from time to time by **Senator Lynch** and other honorable senators - the wool men, the wheat men, the men who export frozen produce in the shape of lambs and beef, unless they be clever enough - and some of them are - to sell their exchange as they please in England without the intervention of the Commonwealth Bank or the trading banks. It is difficult to see in what way they are doing harm. It may not be regarded as patriotic to sell exchange except through the banks;but, knowing that the rate of exchange is pegged at much less than it ought to. be, one must expect these reactions. {: .speaker-JZ6} ##### Senator O'Halloran: -- Does the honorable senator blame the Government for the pegging of the exchange ? {: .speaker-KTR} ##### Senator McLACHLAN: -- The . honorable senator's leader in this Chamber blames the banks. I admit that the position is a difficult one for the Government, because it has to obtain money in some way. But it would not have been so difficult if the Government had acted instead of only talked. A great deal is said about credit being made available for local works. {: .speaker-JZ6} ##### Senator O'halloran: -- The honorable senator has very subtly evaded my point. {: .speaker-KTR} ##### Senator McLACHLAN: -- I have always realized the difiieulties of the Government, and have never evaded anything. We must all face the facts; there can be no finessing. The banks are charged with having done all sorts of things, including the . pegging of the exchange; yet, the fact is that that very action was taken at the instance of the Government. I do not say that the Government ought not to use every effort to get its money overseas, and thus avoid repudiation ; but it could have done so in another way without any difficulty, without robbing the primary producers to the extent that they have been robbed, and without impairing its credit. The cry is that the banks are not making any credit available. I ask the cleverest honorable senator on either side of this chamber to say, if £10,000,000 were made available at the present time, in what industry would an individual invest it, in. what reproductive work would the present Government employ it? The answer is "None." One could point to small railway projects here and there that would absorb a few hundred thousand pounds - such oddments as the line from Tied Hill to Port Augusta. They may be justified; that is beside the question. The point I am making is that the present talk is in millions of pounds. Where is the outlet for such expenditure? Would an individual employ it in pastoral pursuits? Would my distinguished and good-looking colleague from South Australia **(Senator O'Halloran)** embark *om* pastoral enterprises in that State? Would he fallow another couple of hundred acres of farm land if he had any cash to spare? Not one farmer or pastoralist in South Australia is makingany income out of either of those pursuits. {: .speaker-K1Z} ##### Senator Rae: -- It is strange, then, that nearly all of them leave a good " swag " when they die. {: .speaker-KTR} ##### Senator McLACHLAN: -- They have been a little provident in the past. Today, however; I tell tha honorable senator solemnly that not one pastoralist in South Australia can afford to pay the wage that is fixed by the Arbitration Court; and when the story comes to be told by **Mr, Ewing** - as it will be told at the expiration of twelve months from the 30th June - the honorable senator will find that that gentleman has received little or nothing by way of income tax from the taxpayers who are carrying on in those dry areas. "What the position is in Victoria, I know not; but I believe that a large proportion of the farmers of that State will not return one penny of income; and they are probably working for less than, the basic wage. Therefore, I ask, why all this talk about credit? Is it proposed that credit shall be issued indiscriminately? Is the Government courting national bankruptcy by the adoption of a system of largesse? These are questions that my friends opposite should ask the distinguished gentlemen, who lead these wild theorists, to answer. Let us see where we are heading, and what they propose to do with the money. If they have a means of employing it profitably, I say, " good luck " to them. Let me take the illustration of **Senator Dunn,** who said that plenty of money is available for miniature golflinks. Why is that so? It is because those who have invested in them can expect to get some return from them. **Senator Dunn** surely would not suggest that the Government should construct a series of miniature golf-links? That is about the only profitable industry that is left at the moment; although I am told that some of those who have invested in them are already getting into difficulties. {: .speaker-JYB} ##### Senator Dunn: -- What about the gold bounty ? {: .speaker-KTR} ##### Senator MCLACHLAN: -- That matter will he dealt with when it is presented in a proper way in this chamber. The Government is without a policy, and the proposals it has brought down are absolutely inadequate for the balancing of its budget. It has no past accomplishment. All sorts of wild and woolly schemes are being put up to it. It grasps at one, and then at another. Among the lot, we may find something that is sound, and upon which we can render it assistance. {: .speaker-KOZ} ##### Senator Hoare: -- That is what we said about the Government of which the honorable' senator was a member, when it was in office. {: .speaker-KTR} ##### Senator McLACHLAN: -- Even if we went wrong, we at least did something; aud that is more than the present Government -can be charged with. The curse of caucus is on this Government, and hampering it. I believe that, if the Ministry were free and untrammelled, it would endeavour to do what the Prime Minister decided before leaving Australia should be done, and what will ultimately have to be done, whether the Government party likes it or not. The public demands that there be a restoration of confidence in the national credit. *Sitting suspended from 6.15 to 8 P.m* {: .speaker-KTR} ##### Senator McLACHLAN: -- The public are demanding restoration of confidence in our national credit and national institutions; in other words, that we shall be honest, and that the nation -declare that covenants will be kept. The mouthpiece of the nation is the Government. Repudiation does not appeal to people who are 98 per cent. British. It is the last thing likely to happen among a British community. The only repudiation needed is repudiation of the windbags, who have advocated inflation. It would help in a measure towards the restoration of confidence in the Government and institutions of this country. The present position calls for some action on the part of the Government. There should be no difficulty whatever in floating the conversion loan: Without all the efforts that are being put forward, if the people had been reassured that there was to be no inflation, if there had been no nonsense talked about an extension of credit, a thing which cannot work any good to this community j the loan would have been oversubscribed before this. The industries of this country have nothing in which to make use of their money at the present time. Firms with overdrafts a few months ago, are now finding themselves embarrassed by having idle capital on their hands, but they are hesitant about investing it, because of the absence of a specific declaration as to the attitude of the Government. It is stated in the press to-day that that declaration is not to be made until after the closing of the conversion loan. It is one of the worst things that could happen. Let us have that declaration now when it is wanted, and see how the public will respond. Surely members have nothing to fear. If they honestly believed that they were doing the right thing no one would blame them, but in view of what is taking place delay is dangerous. We are told in the press that the deputation, which waited on the Commonwealth Bank Board, is not to receive a reply, because of the likely effect of that reply upon the loan. But I know that the opinion is widely hold that a stout declaration of thenation's intention to be honest would not only be appreciated as a moral gesture in the right direction, but would also go far to restore that confidence, which to a large extent, has been lost, because of the delays of the last few weeks. {: .speaker-K1L} ##### Senator Barnes: -- That statement has been made50 times. SenatorMcLACHLAN. - It has been made, but there seems to be a timorous- ness about the attitude of the Government. We have to face the position, and let us do so; let us have a declaration straight away that there is to be no inflation, andI venture to say the response will be overflowing applications forthe conversion loan. Another factor that would tend to restore confidence is that the Government should show favoritism to none. We all regret that taxation has to be imposed, because of its detrimental effect upon the revenue of the Government and employment. It affects industry to a degree that would surprise those who impose it. But if taxation has tobe imposed let it be applied all round. Let the whole nation know that they have been affected by the position that has arisen, and that a national effort is necessary such as was made by the whole of Australia during the crisis through which we missed in theperilous years of 1914 to 1918. This dilly-dallying, this policy of *laiissez faire* will get us nowhere. Action is necessary upon the lines of the Prime Minister's agreement with the Premiers of the States to which all Commonwealth Ministers subscribed. In New South Wales **Mr. Lang** is imposing a tax of1s. in the £1. Can we not see in that the writing on the wall ? Is it a course which is agreeable to **Mr. Lang?** No ; but he has to relieve unemployment and balance his budget if he can, because he knows that in the long run, it is the only thing that counts, and that only by balancing budgets can the credit of this country be restored. In the financial statement we are now debatingwe have what is practically a repudiation of the agreement solemnly entered into by Commonwealth Ministers with the Ministers of the various States. A section of the Cabinet that has remained in Australia is deserting the Prime Minister. The agreement with the Premiers is regarded by it is as one of those scraps of paper of which we heard something a few years ago. Above all things, we should not resort to the paltry expedient suggested in the press a few days ago: that the national capital was to institute within its boundaries a lottery. Surely the condition of the nation is not such that it is necessary to defile the good name of the Federal Capital by the institution of such a thing as that. Whatever the necessities of the States may be I venture to think that it is beneath the dignity of a government to indulge in such a thing. That we have to thank caucus for the fact that the lottery is not to he proceeded with is something, at all events, to its credit. It was lamentable to see an announcement in the press by a Minister that a lottery was to be established to relieve unemployment in Canberra. At least one day we saw that stated. The next day we saw that we were not to have such a lottery. It has been a case of "Now you see it, now you don't", with every item of the Government's activities within the last six months - ever since **Mr. Scullin** left the shores of Australia. One does not know where the ship of State is heading. {: .speaker-K0F} ##### Senator Sir George Pearce: -- Because she isbeing steered from the focs'le. {: .speaker-KTR} ##### Senator McLACHLAN: -- Every hand is at the tiller; every member of caucus has his own ideas as to how Australia should be governed. If Ministers will take the right course they will have all right-thinking people in the community behind them. The need for this transcends all party considerations, and to it the Government should devote immediate consideration. The piebald statement submitted by the Acting Treasurer, and supposed to do what **Mr.** Scullin agreed to do, will not have the effect of balancing the budget. It is political in its aspects. It is a travesty upon any sound financial attempt to do anything in relation to balancing the budget. I have indicated what can be done. Delay just now is absolutely dangerous to the national credit. Failure of the conversion loan would be little short ofa calamity. My prediction is that it will not fail. Australia's credit is good. Gold, wheat and wool, on which Australia has lived in the past, will ultimately come to the rescue of the country. But we have to steer the ship of State over a troublesome sea, and it is the duty of those who occupy the treasury benches to-day to tide it over. It is useless to remain inactive, or to be scared of shadows. Inflation suggestions are merely shadows. But Ministers must bear in mind that whatever they do they must standbehind the thousands of frugal wise and thrifty citizens whose savings bank deposits have been poured into the coffers of the treasury. How are these depositors viewing the position? It is for them I am pleading. It is their confidence which must be restored. The big men in the financial world take steps to guard themselves at every turn, but what of those people who are not so well informed in regard to financial matters, and do not know where the ship of State is heading? They are unduly alarmed. Chey are, indeed, going through a bad time. They are in fear and trembling day by day as to what is likely to happen in this country. Let the Commonwealth Government be stem in its determination. Let it take the course I have suggested and repudiate the wild proposals made by a wild section of its followers to save their own faces because of election promises, I have no desire to indulge in incriminations regarding those promises - they are all more or less political humbugsbut the Government must put them on one side, and do the right thing by the nation and by the people. I have no desire to delay the Senate any further in regard to this matter, because we shall have frequent opportunities to express our views concerning the legislation that is brought forward; but something has been said this afternoon by wayof interjection in regard to the late Government. I wish to quote from the writings of one who was by no means friendly to that Government. It is useless to blame any one for what has passed, but on the 5th May, 1929, the exPrime Minister, **Mr. Bruce,** said that nothing but a facing of the facts would get this country out of difficulties. He said in most unambiguous terms that the crisis then approaching was without precedent in the history of Australia, that it was not a recurrence of the depressions that we usually got over by rising prices or increased productivity of our wool and wheat, and that we should have toget down to facts if we wished to preserve our standard of living.The honorable gentleman indicated that; if we did not got down to facts our standard of living might be compulsorily reduced in the long run. He saw the writing on the wall, and plainly indicated what he saw when he addressed the Premiers Conference, held at Canberra, on the 28th May. Some of the observations that **Mr. Bruce** then made are worthy of reproduction. Here is one - >A critical examination of our present position loads inevitably to the conclusion that thebasic cause of all the economic troubles of Australia to-day is thehigh costs of production, and that a reduction of our costs nf production is the first step that we must take to bring about a solution of our problems. He summarizes the position thus: - >Two alternatives face Australia to-day. Either we can resolutely attack this problem of redlining our costs of production, and, by so doing, reduce our costs of living, expand our avenues of employment, maintain and augment our standards of living, and increase our national wealth : or we can refuse to recognize the needs of the position and allow our national wealth to diminish, and unemployment to increase until, faced with s national crisis, we are forced to lower our standards of living and re-orientate the whole of our national life. Between these alternatives can there he any hesistation ? Attention was also drawn to our position by the gentleman who is now Prime Minister of Australia. **Mr. Scullin** urged that the parties should get together and do something. But what have we done? It has been claimed by some that the Bruce-Page Administration was an extravagant one. In the very supplementary financial statement with which we are now dealing. under the heading of "Sinking Fund", the Acting Treasurer, probably unwittingly, pays a splendid tribute to the thrift and care of this Government's predecessor in office. This is what he says - 111 the seven years since the establishment nf the National Debt Sinking Fund," a total of £4>3,7-27,921! has been provided for the redemption of Commonwealth, debt. This sum is £14,000,000- in excess of the amount required in that period under a sinking fund scheme designed to pay off post office debt in 30 years, and- other' debt in 50' years. What better tribute could be paid to the character of the financial' administration of the Bruce-Page Government? I believe that I can summarize the position very well by reading a statement from the pen of a man who is by no means favorably inclined towards the late Government. It is - >The States were alt in a sound financial position in 1920. Since that year they have run amok. Whereas the Commonwealth *per capita/* debt has been reduced, that of the States increased front £76- 9s. in 1920, to £112 18s. Id. in 1928. The Commonwealth taxation *per capita* increased from £8 4s. 8d. in 1920,. to £8 17s. 8d. in 1929; that of the States increased in the same period from £2 7s. Id. to £5 15s. 7d. Bear in mind, during the period under review the States increased their debt by 145 per cent. ! Do not let us imagine that the political colour of the gentlemen who were in office in the States concerned was of the same hue as those who sit on this side of the chamber. I do not wish to say anything to hurt the feelings of the Government, but we know full well that this year's expenditure from federal revenue is something like £4,000,000 greater than the budget proposals of the Government which preceded it in office. For that it must account to the electors. If that is economy in times such as these there is something radically wrong with the administrative methods employed. We should be shortening sail in every direction and putting the ship of State in order for the storm that "is upon us, and may increase in its intensity. Apparently afraid of the supergovernment which dominates it, the Government is not facing the position. It has been craven-hearted, and has weakly obeyed the command of a certain section. While my remarks are condemnatory of the policy and attitude of the Government; I am not without hope that it will yet see the error of its ways and do the right thing. It may be that, a certain amount of balancing, will be necessary on the part of the1 man- who* is in charge of the ship of State- when he returns. I withhold) my judgment until the- Prime Minister does return and demonstrates whether he is prepared' to- set about rectifying: the position. Unfortunately, the right' honorable gentleman ha3- been- delayed overseas and! the months are slipping by. No excuse can be- advanced for the Government not having visualized the- position. It should have advanced1 a remedy before this, one that should1 have been brought into operation immediately after die departure of the Prime Minister, who realized' the- position. It is his responsibility.. Tim* after time, he has voiced the sentiment that the honour of this country is as deal? to him- as his- own personal honour. I think that every human, being who has within him any of the Australian spirit will wish the Prime Minister well in that regard, believing that he' intends to tackle the job honestly, fired with the desire tobring about a balancing of our budget and the restoration of the confidence of overseas and local investors in Australa. {: #subdebate-14-1-s3 .speaker-KOZ} ##### Senator HOARE:
South Australia" -- I congratulate **Senator Mclachlan** on **Ms** sincerity. His speech was asn excellent one, and had I not known the honorable senator and his brand- of politics intimately I should have imagined that he was' a modern Moses making a serious attempt to lead the masses of Australia out of bondage. The- honorable senator waxed enthusiastic over the unemployment problem. Presumably, he put up a fight for the workless people of Australia. On the other hand, he upheld the capitalistic system by praising the bankers of Great Britain and claiming that they were the bulwarks of the Empire. No one could have been a more strenuous advocate for those financiers than he. The honorable senator claimed that those people represented the finest institution in the world. If he was in earnest, I say, God help the worst." Let me take the minds of honorable senators back to the beginning of the war, to demonstrate how patriotic and .how wonderful were the banking institutions of England. When war was declared the lords and dukes of England, who govern the banking structure in that country, waited upon the Prime Minister and informed him that they were bankrupt ; unable to pay their way. {: .speaker-JXZ} ##### Senator DUNCAN:
NEW SOUTH WALES · NAT -- I do not think thatthey said that. {: .speaker-KOZ} ##### Senator HOARE: -- They closed the doors of their banks. {: .speaker-JQP} ##### Senator COOPER: -- When? {: .speaker-KOZ} ##### Senator HOARE: -- The honorable senator knows perfectly well that immediately after the war was declared they closed the doors of the banks for four days, and did not open them until the British Government came to their assistance by printing additional bank notes. {: .speaker-JQP} ##### Senator Cooper: -- That was merely to give them a chance to marshal their reserves. {: .speaker-KOZ} ##### Senator HOARE: -- Marshal their reserves ! They declared that they were bankrupt. The Prime Minister of the day called together the leading bankers in conference, and they told him that the banking institutions of Great Britain were tottering to ruin. As one printed in his newspaper, and was sacked for doing so, " The banks of England have proved that they are a fair weather structure. They have failed to stand the stress of the financial oppression that is now facing the British Empire." The British Government indicated that it would see the banks through by backing them with the credit of the Empire. It did so by printing and issuing , Government Treasury notes of the denomination of £1 and 10s. The banks then re-opened their doors and carried on business as usual. But they did not show their appreciation of the kindness -extended to them by the representatives of the taxpayers of Great Bri-tain. Those unfortunate people are still paying taxation on the Government Treasury notes that were issued to save the banks of Great Britain from destruction. Those banks, saved from ruin a few months previously by the paper currency of the nation, loaned the Government of England £200,000,000, and charged a high rate of interest for it. Actually it was the government's own money. Such was the manner in which the banks of Great Britain displayed their' gratitude to their benefactor. {: .speaker-K2L} ##### Senator Reid: -- And it is the intention of this Federal Government to issue a tremendous number of treasury-notes .at this juncture. {: .speaker-KOZ} ##### Senator HOARE: -- This Government recognizes that it should have sufficient currency to carry on its business. A number of honorable senators opposite complain about the proposal to raise sufficient credit in Australia to give work to the unemployed about whom **Senator Mclachlan** seemed to be so deeply concerned. That honorable senator, by the bye, omitted to draw attention to the tremendous inflation 'that was permitted during the war, when millions of bank notes were printed. Then apparently the procedure was all right. Now, it is altogether wrong. {: .speaker-K6I} ##### Senator Chapman: -- Because of the wastage of war. {: .speaker-KOZ} ##### Senator HOARE: -- I thank the honorable senator for his interjection, and remind him that any credit raised to-day would be for the purpose of carrying out reproductive works, while during the war it was for the purpose of destruction. {: .speaker-K6I} ##### Senator Chapman: -- The honorable senator is incorrect. Australia is not producing enough to-day. {: .speaker-KOZ} ##### Senator HOARE: -- It is being proclaimed from the very housetops that Australia cannot dispose of the wheat and wool that it is producing. If we are not producing enough, why are our warehouses overflowing? The trouble is that we are producing more than our people can afford to buy. {: .speaker-K6I} ##### Senator Chapman: -- The exchange position is against us. {: .speaker-KOZ} ##### Senator HOARE: -- Is not the rate of exchange controlled by the bankers? Who are the bankers of England? A short time ago we heard the slogan,' "No trading with the enemy " - meaning Germany. But a quartette from Germany, England and America controls the banks of England. In any case, the bankers of England were well paid for all that they did. If they had been the patriots they professed to be during the war, they would have advanced to the British Government all the credit possible, because they knew that the Empire was fighting to maintain its financial institutions, as well as its other possessions. What would have become of the banks if Germany had won . the war? Many thousands gave their all in the interests of the Empire; but the bankers received compound interest on all their contributions. **Senator** McLachlan described the Labour party caucus as a curse. Is the Labour caucus any more a curse than is r he caucus of the Nationalist party? We know something of the squabbles that took place in the Nationalist caucus during the term of office of the BrucePage Government. We know that members were expelled without being heard by judge or jury. Every party is entitled to hold meetings to discuss its affairs and the affairs of the country: in that sense one caucus is *us* good, or as bad, as another. **Senator McLachlan** said that the Australian banking institutions were the finest in the world. In notes, gold coin, and bullion, Australia possesses about £53,777,126. *Yet.* on that security, we have borrowed about £400,000,000. ' We have borrowed, not cash, but credit. I should say that the credit of the nation is determined by its productivity. During the regime of the Bruce-Page Government, numerous bookkeeping entries wore made, by which sets of figures were transferred from one person to another. In that way the millions mounted up. According to honorable senators opposite, the inflation that took place then was all right, whereas similar inflation to-day would be all wrong. It may be contended that inflation was justified then, because the nation was at war. Is there not a war raging to-day - a war against want and unemployment? Is it not as right now to raise credit to provide work for starving men and women as it was then to raise credit for the destruction of human life? Ninety-eight per cent, of the workers of to-day ask only for work and independence. {: .speaker-K09} ##### Senator Payne: -- Labour unions will not allow some men to work. {: .speaker-KOZ} ##### Senator HOARE: -- No man who receives wages granted as the result of an application by a union for an Arbitration Court award has a right to "sponge" on the members of the union by whose sacrifice and efforts- such conditions have been obtained. < {: .speaker-K0F} ##### Senator Sir George Pearce: -- ls the honorable senator referring to the Commonwealth public servants *i* {: .speaker-KOZ} ##### Senator HOARE: -- There has been a great outcry against the Commonwealth public servants; but I point out that about 82 per cent, of them receive less than £300 per annum. {: .speaker-K0F} ##### Senator Sir George Pearce: -- Should not those public servants receiving more than £300 make some sacrifice? {: .speaker-KOZ} ##### Senator HOARE: -- Possibly the exemption should be £500 instead of £725. But the Government has no intention of making any deduction from the wages of men on. or near the basic wage. Senators Cooper and McLachlan endeavoured to show what a wonderful administration the Bruce-Page Government was by pointing out that it paid into sinking funds about £14,000,000 in excess of the statutory requirements. I remind them that, on assuming office, that Government inherited from the Hughes Administration, an accumulated surplus of over £7,000,000. At the end of its 6-J years of office that accumulated surplus had disappeared and in its place there was a deficit of over £5,000,000. In other words, the country went to the bad to the extent of about £13,000,000 during the 6-1 years that the Bruce-Page Government ruled the country. Had the Government paid its way there would have been no excess contribution to sinking funds. Nor did those honorable senators mention that, during the term of office of the BrucePage Government, the national debt increased by about £19,000,000. {: .speaker-JQP} ##### Senator COOPER:
QUEENSLAND · NAT; CP from 1935 -- It increased by only £13,000,000. {: .speaker-KOZ} ##### Senator HOARE: -- During the last three years of its term, that Government borrowed £125,000,000. {: .speaker-K09} ##### Senator Payne: -- The honorable senator, and those associated with him, not only supported that expenditure, they asked for more. {: .speaker-KOZ} ##### Senator HOARE: -- If the supporters of the late Government were as anxious to do something for the unemployed then its they now profess to be, why did not that Government start some reproductive works? It is all very well for **Senator McLachlan** to criticize the present Government, but he must he aware that it is confronted with difficulties greater tl,ar those which have faced any previous government. The honorable senator also said that the Government was blameworthy for not having called Parliament together earlier. Is he not aware that a new system of raising revenue - the sales tax - had just previously been put into operation and that, it was only reasonable to give it a trial before summoning Parliament ? {: .speaker-K2L} ##### Senator Reid: -- The sales tax is equivalent to a reduction of the basic wage. {: .speaker-KOZ} ##### Senator HOARE: -- It may reduce the basic wage in a roundabout way, but it lias been the means of taxing the purchasers of motor cars, silks, satins and fur coats, whom the Government set out to catch. To that, extent, at least, the sales tax is a success. **Senator Cooper** referred to a drop in the price of wool. Since the present Government assumed office the value of our exports of wool and wheat has decreased by some £60,000,000 a year, which is a severe loss to the Commonwealth, and has increased its When the Bruce-Page Government was in power, wool and wheat were sold at prices higher than those ever before realized. If that Government could not balance its budgets, it was time it made room for a government which would. {: .speaker-JQP} ##### Senator COOPER:
QUEENSLAND · NAT; CP from 1935 -- This Government, cannot. {: .speaker-KOZ} ##### Senator HOARE: -- The honorable senator must admit that the serious decline in the price of wool and wheat, coupled with the extensi ve over-borrowing of the previous Government, is largely responsible for the depression with which we are now confronted. Although its ramifications are world-wide, its origin can be traced to the war, when mad inflation commenced, when huge profits were made, high interest rates paid, and a number of swindles practised by wholesale importers in this and other countries. {: #subdebate-14-1-s4 .speaker-K1Z} ##### Senator RAE:
NEW SOUTH WALES · ALP; LANG LAB from 1931 -- That, was the commencement of high wages. {: .speaker-KOZ} ##### Senator HOARE: -- Wages increased because prices were going higher and higher. Wages were chosing prices until n climax was reached. {: .speaker-JQP} ##### Senator Cooper: -- That is what would happen under a policy of inflation. {: .speaker-KOZ} ##### Senator HOARE: -- Inflation has its hell, as also has deflation. With stabilized wages and prices, inflation, properly controlled, would not present any grave dangers; but if it werenot properly controlled, almost any pricecould be charged. Previously no attempt was made to stabilize prices. {: .speaker-JQP} ##### Senator Cooper: -- How can prices bestabilized in the markets of the world? {: .speaker-KOZ} ##### Senator HOARE: -- Overseas prices, cannot bo stabilized ; but a seriousattempt could be made to do so here. I believe in the issue of credits in Australia, to finance the construction of publicworks. The East- West, railway, which cost approximately £7,000,000, was constructed on credit. {: .speaker-K3X} ##### Senator Carroll: -- By day labour. {: .speaker-KOZ} ##### Senator HOARE: -- Yes. Sena-tor - Reid who was a member of this chamberat the time, knows that that line was constructed without borrowing a penny, in providing a credit of £7,000,000 with which to construct that line, Australia, was not. one penny the poorer. {: .speaker-JQP} ##### Senator Cooper: -- 1 wish the pastoral industry could, be financed in that way. {: .speaker-KOZ} ##### Senator HOARE: -- I fail to see why the same principle cannot be applied in . connexion with other undertakings. {: .speaker-K2L} ##### Senator Reid: -- Will the same principle be applied in. connexion with theconstruction of the Red Hill-Port Augusta railway ? {: .speaker-JTL} ##### Senator Daly: -- Yes. {: .speaker-KOZ} ##### Senator HOARE: -- It should. During, the war the then. Prime Minister, **Mr. Hughes,** should have said that the people of Australia were going to set an exampleto the world by paying Australia's war expenditure out of revenue instead of" with borrowed money. {: .speaker-K2L} ##### Senator Reid: -- Where would he have obtained the money? {: .speaker-KOZ} ##### Senator HOARE: -- The present Minister fox Repatriation and Health **(Mr. Anstey)** showed how Australia's war expenditure could he financed with £20,000,000. {: .speaker-JTL} ##### Senator Daly: -- In fact it was financedwith about that sum. {: .speaker-KOZ} ##### Senator HOARE: -- Yes. Our war indebtedness amounted to £400,000,000, although there was only £53,000,000- available in. Australia at the outbreak of" war. The same old credit was being used, over and over again. This system hasbeen going on right down through theages. The Saviour of mankind said, "My house is the house of prayer; but' ye have made it a den of thieves." I do- not suggest that the hanking institutions consisted of a. den of thieves at that time, hut as the same money was being used over and over again, the nation was robbed of millions of pounds by way of interest. The increase in unemployment, to which **Senator Cooper** referred, is due principally to the attempt which is being made to balance our budget. I have nothing to say against **Sir Otto** Niemeyer, who visited Australia with the one object. {: .speaker-KRZ} ##### Senator Lynch: -- Was he not invited? {: .speaker-KOZ} ##### Senator HOARE: -- He did his work well for the Bank of England, which he represented. {: .speaker-K2L} ##### Senator Reid: -- He did not represent the Bank of England. {: .speaker-KOZ} ##### Senator HOARE: -- **Sir Otto** Niemeyer came to Australia as the direct representative of the Bank of England, to conduct an inquiry into our financial position. He attended a meeting of the Loan Council and tendered advice, and if it was accepted by the Loan Council it was the council which was at fault and not **Sir Otto** Niemeyer. Possibly he came to Australia to see if the Bank of England could take over the £37,000,000 loan falling due this month. His duties were satisfactorily performed in the interests of those who sent him here. In all probability the taxpayers of Australia will have to pay their share of the cost of his visit. {: .speaker-K1L} ##### Senator Barnes: -- Not one penny. {: .speaker-KRZ} ##### Senator Lynch: -- I. think he said that he came here at the expense of the Bank of England. {: .speaker-KOZ} ##### Senator HOARE: -- I do not wish to cast a reflection upon **Sir Otto** Niemeyer, or any one else who does not deserve it. {: .speaker-K3L} ##### Senator Sampson: -- We did not have to pay for his advice. {: .speaker-KOZ} ##### Senator HOARE: -- I do not know if it was worth much. He did not tell us anything that we did' not know. Those in control of the Bank of England could not know our position as well as we do. We know what is needed as a way out of the difficulty ; hut those in control of the Bank of England probably wanted to see whether -there was an opportunity for a " rake off " by- taking over the loan then falling due. The Government is- endeavouring to do its duty as- it sees' it; and in spite of the Objections -of honorable senators1 opposite will' endeavour to make sufficient credit available in Australia to provide employment for those who are willing, and who have the right to work. We cannot continue to allow over a quarter of a million of our people to remain workless. In South Australia it is costing the Government £14)000 a week to feed the unemployed. Commonwealth and. State Ministersshould have informed **Sir Otto** Niemeyer, that they would endeavour to 'balance their, budgets, not in one year, but in, perhaps, two or three years. Why should our governments- endeavour to balance their budgets in one year? It is an absolute impossibility without dragging down the people of Australia, as they have been dragged down as the result of the curtailment- of the loan programme,, which has been responsible for the throwing of thousands of men on the unemployment market, with a consequent lessening- of- the purchasing power of the community. Our warehouses are filled with goods, because so many of our people are out of employment. We shall never balance budgets by the dismissal of men and the reduction of wages. {: .speaker-K0F} ##### Senator Sir George Pearce: -- But it. will be done by the printing of notes, will it not? {: .speaker-KOZ} ##### Senator HOARE: -- With all due respect to the right' honorable senator, there is more chance of balancing a budget in that way than by casting thousands of persons an the unemployed market. Other nations have balanced their budgets bv the printing of notes. It was in Venice that the first treasury-note in the world was printed. Venice carried on with a treasury-note currency for 600' years,, without having: one bank smash. That cannot he said for England or any other country. The trade and commerce of Australia can be carried on with notes to the value of about £25,000,000. When we say that we are going to raise credit, we do not mean that we intend to print thousands of notes that will never see the light of day. There are in the Commonwealth Bank at the present time thousands of £1,000 notes that have never' had the ribbons removed from them. Why should we print more notes when sufficient for our-' needs- have- already been printed ? {: .speaker-K2L} ##### Senator Reid: -- If the notes are there, why does not the Government- use- them? {: .speaker-KOZ} ##### Senator HOARE: -- If we had control of them we should do so; and it will be done in the near or distant future. The honorable senator knows that, when he was a member of the Labour party, one plank of its platform was the nationalization of banking. That is still an objective of the Labour party. When the Commonwealth Bank was being established, **Mr. (now Senator) Greene** said that it would never survive a war or -a drought; yet it faced both, and finished up with a surplus. **Senator Pearce** was a member of the Government of the day, and he knows that the idea was ridiculed. It was said that Commonwealth bank-notes would be sold on the street corners for 5s. a barrow load, and that one would be able to buy a " fiver " with ia pint of beer. A well-known politician .said that Australia was being pushed over a precipice; and would sink into .oblivion. Similar sentiments are being uttered to-day. The establishment of the Commonwealth Bank was one of **Senator Pearce's** pet schemes ; and if he is not proud of it he should be, because it is one of the best institutions of its kind in any part of the world. With its backing, Australia has emerged triumphantly from one of the stormiest periods in its -history. When it is the only banking institution, the profits derived from its operations will be returned to the people, to whom they should go. The Government -will then be able to carry on public works without resorting to borrowing. There must be a general recognition of the fact that, " Finance is government, and government is finance." Any nation that does not control its own- financial system will be controlled by that system. That is what is happening to-day. The banking institutions of not only Australia, but also every other part of the world, are the dictators of policies. A few years ago, the legislature of the United States of America proposed to pass legislation dealing with the oil trust, but was compelled 1 to. climb down at the behest of the financial institutions of that country. The sooner our financial operations are controlled by the people themselves, and the profits are returned to the people, the better it will be 'for the nation. {: .speaker-K3L} ##### Senator Sampson: -- What if there should be a loss ? {: .speaker-KOZ} ##### Senator HOARE: -- I am glad 'to have that interjection, because it reminds 'me that up to date the Commonwealth Bank has made profits aggregating about £26<000,000. {: .speaker-K2L} ##### Senator REID:
QUEENSLAND · NAT -- It -has succeeded, because it has been a free 'agent, and "not subject to political influence. {: .speaker-KOZ} ##### Senator HOARE: -- Whether or not it has been .a free agent, it has been the controlling factor in the Commonwealth. lt has kept the interest rates down to a minimum, and has financed the wool and the wheat crops. I suppose that it willi have >to finance the wheat crop this year. **Senator Lynch** has complained that the Government has not done anything for the primary producers ; yet when it introduced a bill guaranteeing the wheatgrowers a minimum of *'4a.* a. bushel' for their grain the honorable senator wired that he was opposed to the measure lock, stock and barrel. The Commonwealth Bank, I presume, will have to find sufficient credit to make advances up to about 80 per cent, of the present season's wheat crop. {: .speaker-JQP} ##### Senator Cooper: -- Jit will have in the wheat an asset "to advance against. {: .speaker-KOZ} ##### Senator HOARE: -- The asset will soon have gone overseas. {: .speaker-JQP} ##### Senator Cooper: -- It will then get its money back .again. {: .speaker-KOZ} ##### Senator HOARE: -- That does not alter the fact that it must raise from £20,000.000 to £30,000,000 worth of credit. {: .speaker-JQP} ##### Senator Cooper: -- The honorable senator and his friends are asking for an advance to be made against thin. air. The **PRESIDENT (Senator the Hon. W. Kingsmill)** . - Order ! I ask honorable senators not to conduct ^conversations across the chamber. {: .speaker-KOZ} ##### Senator HOARE: -- I should like the honorable senator to make 'a sensible interjection. 'I arn 'endeavouring to point out that the credit will - merely be transferred from the Commonwealth Bank to the primary producer; that it -will be a bookkeeping entry only, and that not a penny 'will change hands. No complaint will1 be made against that in any -quarter; on the contrary, the Commonwealth Bank will be praised for having come to ' the assistance of the farmers. I am 1101 acquainted with any other method by which the situation can be handled. The wheat-growers said, " "We want freedom to sell our wheat." They now have that freedom. The Government was asked where it would find the money to finance its guarantee of 4s. a bushel. Had the Wheat Marketing Bill become law, the onus would have been on the Governmnent; but now it is on the farmer,- and is causing him no end of worry. **Senator Cooper** is one of the primary producers of this nation. I remind him that when, in about the year 1922, the primary producers wanted to borrow a few millions from the Commonwealth Bank, their overtures were rejected; but immediately the private banking institutions were loaned by the Commonwealth Bank £5.000,000 at an interest rate of 4 per cent, or 4£ per cent., those institutions iti turn Mid vu need .it to the primary producers at ji rate of 6-i- per cent, or 7 per cent. Had the Commonwealth Bank acted rightly, instead of enabling the private banks to :get a rake-off, it would have loaned the money direct to tho primary producers, and given them the benefit of the lower rate of interest. Why would it not pay that institution to lend the money to men who wanted it to build up industry in Australia? It is strange that advances are being withheld from men who wish to build up industry. I do not know whether the desire is to see the number of unemployed increased, or what is at the hack of the refusal to make funds able. _ **Senator McLachlan** credited the Government with a desire to give employment to our people, and to do the right tiling. {: .speaker-K0F} ##### Senator Sir George Pearce: -- Can a bank advance to its customers more than if receives by way of deposits? {: .speaker-KOZ} ##### Senator HOARE: -- I answer the right honorable senator by saying that during the war we borrowed £400,000,000. How -did we do it? {: .speaker-K0F} ##### Senator Sir George Pearce: -- That is not an answer to my question. {: .speaker-KOZ} ##### Senator HOARE: -- It is my way of answering it. The amount borrowed was (greater than the amount deposited. Certainly the Government had behind it the credit of the nation. I again point out that the productivity of a nation constitutes its credit. I do not believe that Australia, has yet reached the limit of its credit. We do not want to exceed that limit, and there is no reason why we should do so. I think that we should proceed on safe lines by doing the right thing. Like many other parts' of the world to-day, Australia is in a bad position. We can make progress, not by having a huge army of unemployed, but by giving employment to our people; and it seems to me that at this time we must do as we have done in the past. We raise sufficient credit to enable us to carry on public works as we did when we constructed the East-West railway. Debate (on motion by **Senator Carroll)** adjourned. {: .page-start } page 892 {:#debate-15} ### QUESTION {:#subdebate-15-0} #### CANBERRA LOTTERY {: #subdebate-15-0-s0 .speaker-K1L} ##### Senator BARNES:
Assistant Minister · Victoria · ALP -- *by leave* - This afternoon **Senator Reid** asked a question relating to the proposal to hold a lottery in Canberra. I have since ascertained that an application was made pursuant to the Lotteries and Art Unions Ordinance 1926-1929, by the local unemployment relief committee for approval to conduct a lottery. It was decided to grant the approval sought, but after reconsideration of the matter the approval has been revoked. When more mature thought was given to the matter, it was found that it had many ramifications that it would bc better to avoid, and the only way in which they could he avoided was by revoking the authority to hold the lottery. {: .page-start } page 892 {:#debate-16} ### SALES TAX {: #debate-16-s0 .speaker-K1L} ##### Senator BARNES:
Assistant Minister · Victoria · ALP -- *by leave* - In regard to representations recently made by **Senator Pearce** and **Senator Payne** with reference to the incidence of the sales tax in certain circumstances, I have received the following memorandum ' from the Commissioner of Taxation : - > **Senator Pearce,** in tlie Senate on 12th November, 1930, read a letter from **Mr, F.** McClean, manufacturing furrier, of Carlton. Victoria, relative to the payment of sales tax on his manufactured goods. **Mr. McClean** contended that goods manufactured by him prior to the 1st August should not be taxed, and that those manufactured after that date should not be taxed until they- were sold. Both of those contentions were raised on behalf of other manufacturers when the Sales Tax Assessment: Acts were being considered by Parliament. 'When tho bills for the acts wore introduced to Parliament, they provided that the tax in such cases should be paid on the actual sale price. **Mr. MeClean's** manufactured goods would thus have been taxable on the actual retail sale price at the time of sale. In the course of the discussion on the bills in Parliament, an amendment was made to provide that tax should be payable on a wholesale selling price at the time of the transfer by the manufacturer of stock from his factory branch to his retail selling branch. A wholesale selling value is less than a retail selling value. Thus the taxpayer received a concession in regard to the sale value upon which lax should be paid. As regards manufactured stocks on hand on the 1st August, 1930, the legal position is that sales tax is payable at the time of sale of any of those goods, but it is then payable on the retail selling price. As regards tha manufactured stocks transferred on or after 1st August, 1930, to retail stock, tax is payable at the time of transfer, but on a wholesale selling price. > >A departmental ruling was issued in August last to the effect that, if manufacturing retailers so desired, they could regard manufactured stocks which were on hand at thu 31st July, 1030, as having been treated on the 1st August, 1030, as stock for sale by retail in order that they might pay sales tax al once on a wholesale selling price instead of paying it on the actual retail sale price when the goods were sold. If **Mr. McClean** does not wish to avail himself of this concession, he is not legally bound to pay tax until he sells any of his manufactured goods which were on hand on the 31st July, 1930, but he must then pay tax on the actual retail sale price as required by the law. If he refrains in future from treating any of his manufactured goods as stock for sale by retail, he would not be taxable until he sells the goods, but he would then he taxable on the retail sale price. All other manufacturing retailers in Australia hare been treated in this manner,and those >vho have availed themselves of the concessions mentioned above have already paid sales tax in accordance therewith. **Mr. MeClean's** ;laim8 cannot be allowed without far-reaching amendments of the law involving provision for refunds to be allowed to persons similarly situated who have already paid tax. In framing the law in its present form, Parliament placed manufacturing retailers in the tame position as an importing retailer or purchasing retailer. The importing retailer pays sales tax at the customs at the time of importation, and the purchasing retailer pays the tax at the time of his purchase. The manufacturing retailer is paying tax at the time of manufacture of his goods. In all three cases the possibility exists that some of the goods may be unsaleable through various causes, or saleable only at prices much below those upon which sales tax has been paid. > >In regard to **Senator Payne's** representations, the foregoing observations deal with two of them, viz. : - > >1 ) Sales tax being paid by manufacturers on stocks held by them on 1st August, 1930, and subsequently sold ; and > >Retailers who import must pay the tax at thu time of importation although the goods may not be saleable through changes of fashions. > > **Senator Payne's** other points were > >Sales tax is not being paid by wholesalers on stocks on hand on the 1st August. > >Small retail shops are being charged sales tax by manufacturers, who refuse to allow the retailers to increase the sale price of the manufactured goods as these are fixed prices. The retailers cannot pass on the tax. > >As regards (3), a wholesaler is required to pay sales tax on all sales of goods on and after the 1st August, 1930, made to an unregistered person or to a registered person who is not entitled to quote his certificate of registration. It is not material when the wholesaler obtained those goods. **Senator Payne's** point is that a manufacturer must pay tax in August on the stocks on hand on the 1st August, while a wholesaler does not' pay until he sells. This position only arises out of the concession granted by Parliament to manufacturers to enable them to pay tax at wholesale prices when they treated their goods as stock for sale by retail. If they do not so treat their stocks they do not pay tax until they sell the goods, but, as. previously stated, they pay on the retail selling price. It is not reasonably practical to charge the tax at the time of sale on a wholesale selling value for the goods, because of the serious' difficulties which exist in ascertaining such a value. Already the department is experiencing very great difficulty in ascertaining wholesale selling values at the time of transfer of goodB from factory branches to retail sections of a business. This will probably involve some amendment of the law to overcome the difficulties. > >As regards (4), the Commonwealth has no power to interfere with the action of any manufacturerin fixing the maximum selling price of his products when sold retail by persons who purchase the goods from him. The matter is one for adjustment between the retailers and the manufacturers. {: .page-start } page 893 {:#debate-17} ### ADJOURNMENT {:#subdebate-17-0} #### Commonwealth Bank : Caseofmr. Mask Young Motion (by **Senator Barnes)** proposed - That the Senate do now adjourn. {: #subdebate-17-0-s0 .speaker-K1Z} ##### Senator RAE:
New South Wales -- I desire to bring before the Senate an old grievance. It is that of **Mr. Mark** Young, an ex-officer of the Commonwealth Bank who was, in a sense, dismissed from the bank about seven years ago, and has ever since been attempting to get an independent inquiry into the circumstances surrounding the loss of his position. This was not a straight-out dismissal. His resignation was, in a measure, enforced, because of the insistence that he should take a position which would have been considerably lower than the one he occupied. At one time **Mr. Young** was manager of the Melbourne branch, and I think he was also, for a time, manager of the London branch, but when the trouble arose between him and **Mr. Kell,** who was at the time Acting Governor, he was Chief Inspector in New South Wales. No charge of incompetency or inefficiency was raised against him, but possibly because of the ambition of others to occupy his job, or it may have been through jealousy arising from other causes, some person appears to have had sufficient influence with the Acting Governor to induce him to offer **Mr. Young** a position which he considered it was an insult and degradation to ask him to accept. His refusal amounted to his suffering a dismissal. {: .speaker-K3L} ##### Senator Sampson: -- Did he resign? SenatorRAE. - Yes, but he had no desire to resign. He considered that he was forced into resigning by the conditions imposed upon him. No man with dignity could accept them. It was something like a bank manager being made an office boy. It may not have been so extreme as that, but it was in that direction. The matter should not be considered a party question. An inquiry was held, but by those who were practically responsible for **Mr. Young's** leaving his position. It was, therefore, an appeal from Caesar unto Caesar, and **Mr. Young** considered that he was not given justice. I do not wish to delay honorable senators; I shall probably refer to the matter again. For the moment I wish to Tefer briefly to the complications of the case. On the one hand, Parliament, as such, has no control over the working of the Commonwealth Bank. On the other band, **Mr. Young** does not urge that he has any legal claim for compensation and he knows that, after an absence of seven yeaTs, during the whole of. which he has been fighting to obtainsome recognition of his claim, the position that he previously occupied must have been filled, and that any reinstatement would bring about a disturbance of vested interests. He does, however, claim that he is entitled to consideration on moral grounds. If the bank will not take notice of a resolution passed by Parliament, Parliament is at least entitled to see that justice is done to a citizen who has been morally mistreated. This matter was before another place for debate in previous years, and the present Prime Minister **(Mr. Scullin),** the Acting Prime Minister **(Mr. Penton),** and the Attorney-General **(Mr. Brennan)** all made speeches in which they declared that **Mr. Young** had a remarkably good case. A motion was submitted, but it was for the appointment of a committee of inquiry, or a royal commission, and it was rejected on a purely party vote, some of the members of the then Government expressing their sympathy with **Mr. Young** and admitting that they considered that he had a just claim. After all, the Commonwealth Bank is an instrumentality of the Commonwealth, and this Parliament has a right to see that justice is done irrespective of party or person. I ask the honorable senator who is at present in charge of the business of the chamber to bring the' matter before **Ms colleagues** of the Cabinet, and to indicate whether the Government is prepared to re-open the matter with the view to giving effect to the opinions that were expressed by several prominent members of the present Government when in opposition. {: #subdebate-17-0-s1 .speaker-K1L} ##### Senator BARNES:
Victoria · ALP -- If the honorable senator will supply me with a copy of his remarks I shall bring them under the notice of the Cabinet. Question resolved in the affirmative. Senate adjourned at 9.34 p.m.

Cite as: Australia, Senate, Debates, 3 December 1930, viewed 22 October 2017, <>.