12th Parliament · 1st Session
The President (Senator theHon. W. Kingsmill) took the chair at 3 p.m., and read prayers.
– Has the Leader of the
Government in the Senate seen a report in the press recently to the effect that first-grade petrol can be obtained for 3d. per imperial gallon f.o.b. American ports, and, if so, will he have investigations made to ascertain why the price of firstgrade petrol in Australia is over 2s. per gallon ?
– As I have not seen the statement referredto by the honorable senator, I ask him to give notice of his question.
– I should like to know if the Leader of the Government in the Senate has had his attention drawn to the following paragraph in the Melbourne press: -
Police suspicions that spurious £5 notes are being placed in circulation by a gang of counterfeiters have been confirmed, following the discovery of two more forged £5 notes.
Yesterday Detective Sainsbury, of the Commonwealth Investigation Branch, notified Superintendent Walsh, officer in charge of the Criminal Investigation’ Branch, that a hotel licensee and a city cafe proprietor had been defrauded. Mr. A. J. McWhinney, licensee of the Junction Hotel, Elizabeth-street, city, informed Detective Sainsbury that he had changed a. £5 note for a taxi driver. When he paid the note into the bank he was advised that it was counterfeit.
Seeing that useless notes are already in circulation; I should like to know what action, if any, the Government will take to see that no further useless notes are printed ?
– I have seen the paragraph to which the honorable senator has drawn attention intimating that counterfeit notes arein circulation; further than that I cannot give the honorable senator any information. I naturally assume that steps will be taken to protect the public from impositions of the character referred to.
– On the 26th March Senator Sir Hal Colebatch asked the following questions, upon notice -
I am now able to furnish the honorable senator with the following information: -
– On the 23rd April Senator E. B. Johnston asked the following question, upon notice -
What is the total number of illicit stills discovered in Australia during the past twelve months, showing each State separately?
I am now able to furnish the honorable senator with the following information : -
During the twelve months ended 31st March, 1931, illicit stills were discovered in the various States as shown hereunder: - New South Wales, G.; Victoria, 5; South Australia, nil; Queensland, nil; Western Australia, 1; Tasmania, nil; total, 12.
Senator HO ARE brought up a report from the Printing Committee, and - by leave - moved -
That the report be adopted.
Motion agreed to.
The following papers were presented : -
New Guinea Act - Ordinances of 1931 -
No. 3 - Quarantine.
No. 4 - Laws Repeal and Adopting.
No. 5 - Judiciary.
No. 6 - Rapindik Lands.
No. 7 - Medical.
No. 8 - Interpretation and Amendments Incorporation.
No. 9 - Gold Buyers.
No. 10 - Timber.
No. 11 - Germans Admission Ordinance Repeal.
No. 12 - Natives Taxes.
No. 13 - Electric Light and Power.
No. 14 - Lands Registration.
No. 15- Stamp Duties (No. 2).
No. 16 - Police Force.
Northern Australia Act - Ordinances of 1931 -
Central Australia -
No. 3 - Testator’s Family Maintenance.
No. 4 - Supreme Court.
North Australia -
No. 4 - Testator’s Family Maintenance.
No. 5 - Supreme Court.
Formal Motionfor Adjournment
– I have received from Senator Pearce a letter intimating that it is his intention this afternoon to move - “ That the Senate at its rising adjourn until 10 a.m. to-morrow,” for the purpose of discussing a matter of urgent public importance, namely “ The serious position of the public finance “. Is the motion supported?
Four honorable senators having risen in their places,
Senator Sir GEORGE PEARCE (Western Australia) [3.10]. - I move -
That the Senate at its rising adjourn till 10a.m. to-morrow.
I submit this motion to enable the Senate to discuss the all important subject of public finance. I have before me a document issued by the Commonwealth Treasury in accordance, I understand, with an agreement arrived at by the Commonwealth and State Treasurers in the Loan Council, that monthly statements should be published, showing the position of the finances of the various governments. This statement which is headed, “Monthly Return of Consolidated Revenue Fund for March, 1931,” shows that the budget estimate of revenue for the financial year 1930-31, excluding post office and railways, was £65,622,000, while the actual receipts for the first nine months of the financial year were £32,399,000. The, budget estimate of expenditure for the financial year was £66,456,000, and the actual expenditure for the nine months £52,543,000. In order to determine what the position of our finances is likely to be at the end of the financial year, I have assumed, in making my analysis of these figures that the expenditure for the remaining three months will be on the same basis as that for the first nine months. This means that the total expenditure for the whole of the financial year will be £70,057,000, or £3,601,000 more than the estimate. In order to arrive at the true position, however, we, have to study the revenue returns. The estimate for the year was £65,622,000. For the first nine months only £32,399,000 has been received, so that if the returns for the remaining three months are on the same basis, a further £10,799,000 will be collected by the 30th June next, making a total of £43,198,000 as against the estimate of £65,622,000. The position therefore, is apparently that there will be a deficit of £26,859,000 unless there is a remarkable recovery on the revenue side or a marked falling off in expenditure.
At a time like this, when the Commonwealth, after having had one year in which there was a heavy deficit, is apparently facing another deficit of approximately £26,859,000, where do we find the Treasurer of the Commonwealth (Mr. Theodore) ? Is hehere conferring with his colleagues and trying to devise some sound policy by which this drift can be stopped? No. He is travelling about the Commonwealth making electioneering speeches. This is the man, who after asking the department, over which he presides, to issue that statement to the world, is making statements such as are contained in a report which I shall quote. According to the Argus Mr. Theodore in addressing business men in Adelaide on the 29th of this month, said -
Inquiry had revealed that the Federal Government had saved £2,230,000 since the beginning of the financial year, excluding £1,400,000 for sinking fund adjustment-
The Treasurer is very conscientious in excluding that amount from his calculation. “What is that sinking fund adjustment? Under the authority that Parliament gave him, that £1,400,000 which should have been paid into the sinking fund, has not been paid to that fund, but with a generous gesture, he does not include the amount as a saving. His statement continues - and that it proposed further economies of about £1,000,000. In addition it had committed itself to cuts in departmental expenditure of about £1,000,000 - the total was £4.230,000.
This is a very ingenious way of arriving at the total. Mr. Theodore includes in that total, the cut in Public Service salaries which it is estimated for a full year will save £1,000,000. But there are only two months of the year to go, so that there will not be a saving of £1,000,000, but of only £100,000 or £200,000 for this financial year. Fancy the Treasurer of the Commonwealth submitting a statement such as that to business men, when we have before us a statement from his own department, which, shows that not only has there been no-saving in expenditure, but that if the revenue returns and expenditure continue on the basis for the last nine months - and surely we can take the figures for the first nine months as a fair guide as to what will happen during the remaining three months of the financial year - the estimated expenditure will be exceeded by £3,601,000. Yet we have this man in charge of the finances of the Commonwealth going about the country making these extraordinary statements purely for political purposes.
A week ago a letter from the Commonwealth Bank Board, in which a warning of a most serious character was conveyed, was read to the members of one branch of the legislature. That letter had been in the possession of the Government, if my recollection is right, for nearly a fortnight.
– For twelve days.
Senator SIR GEORGE PEARCE.It was a warning of a most serious character, and although it had been in the possession of the Government for the period stated before it was submitted, to another place, what was the attitude of the Treasurer ? Mr. Theodore came down to the House and made a serious attack, not on the Commonwealth Government for having failed to do its duty, not on the Commonwealth Parliament for having failed to compel the Government to do its duty, but on the Commonwealth Bank. One rubs one’s eyes in wonder, and asks what the banks have had to do with the serious position in governmental finance. Are they . responsible for these estimates, issued by the Treasurer? Have they in any way contributed a single penny to the expenditure of the Commonwealth? Are they in any way responsible for the revenue being below the estimate ? The position is that out of this total Commonwealth expenditure of £66,000,000 the banks have’ had to find £20,000,000. The Government or the Parliament, whose duty -it was to reduce expenditure or increase revenue in order to balance the budget, has not done so. The Government is able only to carry ou the business of the country by means of overdrafts granted by the banks. If for the remaining three months of the financial year expenditure is incurred at the same rate as it has been for the past nine months, and the revenue does not flow in more freely, the Government will need to have from the banks assistance to the extent of from £26,000,000 to £27,000,000. What does that mean? When the Treasurer was making his attack on the banks, he knew that 5s. out of every £1 which he drew as his parliamentary allowance was found by the banks in Australia ; that os. out of every £1 of Commonwealth expenditure had been provided not by taxation or a saving in expenditure, but bf the banks. Yet we have the Treasurer careering around South Australia and Tasmania trying to make the people of this country believe that the banks are in some way responsible for our financial position. Surely it is the duty of the Senate to register a protest against action of this kind, and to insist that the Government and the Treasurer shall do their plain duty by bringing forward adequate proposals to rectify the position. The only honest alternative is to resign. If the present drift continues, we shall be faced with insolvency.
What remedies are proposed by thy Government ? Its only comment is that it proposes to introduce certain .bills to amend the Constitution. It is going along as blissfully as though we were passing through normal times, blackguarding the banks on the one hand and talking about’ amendments of the Constitution on ,the other. The passage of these proposed measures, and even the amendment of the Constitution, would not alter one figure” in this statement. Does the Government seriously consider where we are drifting, and what will be the outcome?
It is fairly obvious that this balancesheet cannot be rectified on the revenue side. Any attempt to rectify it by imposing additional taxation would be equivalent to pushing under water the head of a drowning man. Why are the revenue receipts so low compared with th-3 estimate? The reason is that the source from ‘ which we draw our taxation receipts “is drying up. The money is not being earned; therefore, it is futile to try to improve the position by imposing additional taxation. Why will not the Government realize that the only course open to it is a drastic reduction of expenditure? People say that this must not be touched and that must not be touched. Have we any choice? If we are honest men we must realize that we are paying our way to-day with borrowed money, and that the end of that money is in sight. Before very long, unless the drift is stopped, it will be a question not of a reduction of expenditure. but of being unable to meet our commitments at all. The Prime Minister talks blithely about waiting until three months have elapsed and of then resubmitting to this recalcitrant Senate a bill that it has rejected, so that there may be a double dissolution and a general election for members of both Houses. Does any one, reading the story that these figures relate, think that this country can carry on under existing circumstances for another three months?
– Apparently the condition of the country did not worry the honorable senator during the six years that he was a member of the last Government.
– The present position is unique in the history of the Commonwealth: Never previously have figures such as these been produced. The honorable senator is quite well aware of that. How can the members of the Government reconcile with their consciences and their duty to this country the drawing of their salaries while this drift is going on? What is the good of all this party manoeuvring? Where will it land them, as well as the country? Of what use is it to score a party advantage if the country goes to the dogs?
– Is not the right honorable senator endeavouring to score a party advantage to-day?
– I am not. The facts are far too serious to be regarded from a party point of view, and I am not speaking from such a point of view. We should be recreant to our duty if, when a return like this was placed in our hands, we were to remain silent. Any man with common sense can. see where it is leading us. If the Government evinced some realization of the position there, would not be so much ground for complaint; but the Prime Minister blithely talks about a double dissolution, and the Treasurer flits here, there and everywhere abusing the banks and the Senate. A tragic feature of the position is that the Government, which is supposed to be in control of the Commonwealth has so little realization of where we are drifting, and of what is likely to happen that it will not take any steps to rectify matters.
Looking at these figures calmly, and appraising their ‘significance,’ can any one hesitate to decide what is our plain duty ? We have to cut our expenditure. A few months ago the Opposition suggested that the Government should cut its expenditure, by £4,000,000 a year. Had that suggestion been adopted at the time, it would have made a great difference; but it is too late now to. effect such a small reduction. How does the Government think it is going to evade what these figures show will be the ultimate outcome? Is it waiting, Micawber like, for something to turn up?
– It is depending on the printing of notes.
-That will not save the position, but will make it infinitely worse. I appeal to the Government to do what is plainly inescapable. If its party will not give the necessary sanction, let it have the courage to place country before party, and to say,- “As we cannot do what has to be done because of the opposition in our own party, we will get out and let somebody else do it “. I shall not mention the awful word that is in the minds of everyone ; but we “ all know what the result inevitably must Be unless the right action is taken.
– Let us know what must be done.
-The honorable senator knows it as well as I do. If in his private life his income were so reduced that it was exceeded by his expenses to the extent of one-half - and that is the story which these figures tell - lie would say to his wife, “ We must so cut our expenses as to bring them within our income “.
– Or borrow to foot the bill, as the right honorable senator’s Government did when in office.
-That would be all right so long as you could borrow; but as the honorable sena- tor knows, this Government cannot borrow. It has to cut its expenditure so as to bring it within its income, or accept the dread responsibility for what will follow. Senator Dooley, as a member of the Government, must share that responsibility.
Anybody who aspires to office at a time like the present is looking for serious trouble. The Government which has to succeed the present one will not view the prospect with pleasure. Unless the Government is prepared to do the thing that is absolutely staring it in the face it should, in the interests of the Commonwealth, retire from office and allow some other government to take all the opprobrium that will be attached to it for any action which it must take to save Australia. This Government is shirking and dodging its plain duty. It is of no use now to talk about what the previous administration should have done. The situation is now far too serious to indulge in useless criticism of any sort. This Government must face the realities. If it will not do this I repeat that it should get out and allow another government to take its place. If it does not do this I fear to think of what the consequence will be to Australia.
I have raised this question this afternoon, not for the purpose of scoring any party political advantage, but because I realize, as the Leader of the Senate (Senator Barnes) and his colleague, Senator Dooley must realize, what is meant by the figures contained in the document to which I have referred. I again appeal . to Ministers to take their courage in both hands, and do the one thing that is necessary to save Australia.
.- The Leader of the Opposition (Senator Pearce) is to be congratulated for having given the Senate this opportunity to discuss the grave financial position that confronts Australia. The absolute lack of candour on the part of the Prime Minister (Mr. Scullin) and other members of the Ministry concerning the financial position is much to be deplored. This is particularly to be regretted in view of the fact that the people of Australia are fully alive to the dangers ahead, and are quite ready to make every sacrifice in order that the position of the Commonwealth may be righted. Wherever one goes, one hears the same expressions of opinion, and an earnest desire to have our finances placed again on a sound basis. Unfortunately, we are not getting a lead from the Prime Minister, from the Treasurer, or, indeed, from any members of the present Government. As regards the Prime Minister, it is almost impossible to get from him two consecutive statements of a like character on two successive days; and as for the Treasurer, it is impossible to induce him to take the people into his confidence. As I listened to the speech, delivered by the honorable gentleman in Adelaide the other evening, I’ could not help thinking how improper it was, at this crisis in our affairs, for the Treasurer, instead of urging the people to co-operate, to practically confine his remarks to an abuse of the financial institutions of this country. It is, indeed, extraordinary at a time like this, for the Treasurer to be travelling through the different States making speeches which are calculated to incite the people against our banking institutions. As I said the other day, we ought to be very thankful that those institutions have been conducted on sound lines. The disastrous crisis in connexion with the Government Savings Bank of New South Wales is an outstanding illustration of what we may expect from political interference in the realm of banking. We should, therefore, be everlastingly grateful that the majority of -our banking institutions are privately controlled; and thankful also that, unlike some countries, we have not a large number of mushroom banks which, during such a crisis, would have been compelled to close their doors. The one thing which I think is most to be deplored is the general attack which is being made by members of the Government and certain supporters upon bondholders in Australia and overseas. Quite recently the Treasurer spoke in terms of condemnation of what he described as the money lords of Great Britain, who, according to the honorable gentleman, are. sucking the life blood out of Australia. Who are these money lords? For the most part, as in Australia, they comprise the thrifty section of the people - those people who have saved a few pounds and invested it in
Australian stocks, which rank as trustee securities in Great Britain. Since these facts must be known to the Treasurer, why should he and a number of his supporters refer to these people as blood suckers? Their clear intention is, of course, to lead the people to believe that there is some sinister force operating in Great Britain to prejudice the interests of Australia abroad.
When I was in England last year I was’ privileged, as no doubt many other members of this Parliament have been privileged on like occasions, to gain insight into the inner circles of London finance, and on many occasions when I discussed our position with leading public men in England I was strongly impressed by the total absence of unkind criticism or hostility to the Commonwealth. On the contrary, in that great hub of the Empire, I found the most kindly feelings were entertained not only towards Australia, but towards all the British dominions. I feel sure that my colleague, Senator R. D. Elliott, who was in London at the same time, had the same experience. Prior to the arrival of the Prime Minister (Mr. Scullin) and his colleagues to attend the Imperial Conference, the London Times, the London Daily Telegraph, the Observer and several other leading newspapers in the United Kingdom ^published appreciative articles relating to the Prime Minister, and paved the way, as it were, to enable him to arrange for the funding of our overseas indebtedness. No one can doubt that when Mr.’ Scullin arrived in London he had a great opportunity to get Australia out of the difficulties that beset it at the present time. The right honorable gentleman will admit that he had made good progress towards making satisfactory arrangements with the Westminster Bank and other .financial institutions when news was received in England of the repudiation resolution passed by his own party in Australia. That resolution was given prominence in the British press, and the result was that English investors became cautious. They wanted to know whether that resolution represented the view of the majority of the party led by the Prime Minister. The passing of that resolution made the path of the Prime Minister very difficult; it closed many doors which, on his arrival in England, were open to him. The Prime Minister had a wonderful opportunity to do something for Australia, but the carrying of that resolution, and his unwillingness to stand to his guns and say that the Government would adhere to the agreement .which he had signed before he left Australia, meant that his visit was absolutely wasted.
The Treasurer (Mr. Theodore), and other speakers on behalf of the Government, are unfair to British investors when they say that there is in England a lack of sympathy with Australia in the problems with which she is confronted. My experience in England convinces me that the reverse is the position. If the Government would make a definite statement that it is prepared to do its utmost to balance the budget and live within its income, instead of allowing the finances of the country to drift, I believe that, even to-day, arrangements could be made with British financiers to tide us over our present financial difficulties. While I was iri England, millions of pounds were made available to countries whose securities, in my opinion, were not so sound as those offered by Australia, and at lower rates of interest than the aver.age rate paid by Australia. While I was there, South Africa and India both approached the London market for money, and their loans were quickly oversubscribed. The same willingness to advance money was exhibited in connexion with a number of local gilt-edged loans which came on the market at that time. I say,, unhesitatingly, that if the Government would make a genuine attempt to stop the drift that is going on, and to set its house in order, money could be found. I agree with the Leader of the Opposition that within the next few months practically every form of Commonwealth expenditure will have to be curtailed. It will soon be, not so much a question of a reduction of salary or wages> as of no income at all - a much more serious position. The people of this country must be prepared to make tremendous sacrifices if our finances are to be put on a sound footing.
Last Saturday was Anzac Day. when throughout the country reference was made to the great sacrifices made by the men who fell at the historic landing on Gallipoli. As we listened to those addresses, we must have wondered whether this is the same country that sent forth those men. As in 1915 Australians were willing to lay down their lives for their country, so, to-day, we must be willing to make financial sacrifices in order to maintain our financial solvency. “Whatever sacrifice we make will be in the nature of self -preservation. Economy must be exercised to-day if our future stability is to be guaranteed.
Soon after the present Government assumed office, it abolished compulsory military training - a system that the members of the Labour party previously claimed to be more economical than the one substituted for it. The Government has reduced the efficiency of the Australian navy to such an extent that the vessels might as well be tied up altogether. It refused to allow people from Great Britain to enter this country at the very time when Australian factories were either working short time or closing down for want of a local market.
– The honorable senator has exhausted his time.
– The Leader of the Opposition (Senator Pearce), in bringing this matter before the Senate, may think that he is doing a great service to his country. It may be that he imagines that the Government is blind to the state of affairs that exists, and is therefore not taking the precautions necessary to tide Australia over a difficult period. Let me assure him at once that the Government is fully aware of the difficulties confronting the country. Ever since it took over the onerous task of cleaning up the mess left by a previous administration, it has suffered tribulation. Australia is not yet out of the wood, but the Government hopes that by a judicious administration of the country’s affairs, and the passing of wise legislation, Australia will eventually pull through. The Labour party has had to pull Australia through on other occasions - admittedly not so serious as the present - and in the present crisis a Labour Government is tackling a difficult job with the determination of seeing it through. In no other way shall we emerge successfully.
The Leader of the Opposition asked what the Government is doing to get Australia out of her troubles. I reply that it is doing its best, and is following what is believes to be the wisest course. The greatest trouble confronting us is that of unemployment; many thousands of our ablebodied men are out of work. No more serious position could face any government. Honorable senators ask what steps the Government proposes to. take to alleviate the present difficult situation. It would be a difficult task even for the wiseacres opposite. Our monetary system is not sufficiently elastic to help our country get through a tight place such as it finds itself in to-day, and the Government has endeavoured to set up machinery which we think will enable it to do so. “We introduced a fiduciary notes bill, believing that it would have a beneficial effect on the present conditions, and that it would ease the labour market by enabling a couple of hundred thousand men to get work. There is no dodging the fact that Australia’s greatest trouble to-day is the amount of unemployment that exists. Our indebtedness is not a matter for great concern so long as men are at work, creating something which is generally called confidence. Had that bill been passed and employment been given to our people the country would have got out of its troubles rapidly. “We have followed the Fiduciary Notes Bill by a bill providing for a reduction of interest rates. Every one knows that interest rates in Australia are altogether too high and must be reduced by some means. The Government has no desire to take upon itself the responsibility of fixing rates of interest and it proposes to set up machinery to enable the matter to be decided by an disinterested outside body in the shape of a board, leaving it no longer in the hands of the financial institutions which have always made Australia pay through the nose for everything it has borrowed. Another of the Government’s proposals is a tax on interest on loans. Many millions of pounds in the shape of interest on loans at ridiculously high rates are annually sent overseas. Surely, when a country is in the throes of great trouble extraordinary means to help it out of its trouble are justified. At any rate the Government proposes to take these means, subject, of course, tothe consent of the Opposition in this chamber, which can do exactly what it likes with the present Administration.
While I am on my feet I might as well place the responsibility for the present trouble on the proper shoulders. It has been the policy of the Government to assist the farmers, and we have endeavoured to do so by means well known to honorable senators opposite. But our efforts have been frustrated by the Opposition. The farmers, allegedly the backbone of the country, are in extreme distress. Many are being driven off their farms. I saw quite recently in a Victorian newspaper that it was said at a farmers’ conference that the wives of many farmers in the north of Victoria were clothed inhessian and their children were without boots. The right honorable senator says “ Get the men back to work “. Of course that is the country’s greatest need at the present time, and the Government is endeavouring by hook or by crook to get men back to work, because there is no salvation for any country, nor can it be made prosperous, while half its population is unemployed, or on the verge of starvation. We hear talk of “ equality of sacrifice “. It is those who are out of work, not through their own fault, but because of the mal-administration for many years past of previous governments, who are making thesacrifices to-day. The present Government has the task, as I said earlier, of endeavouring to clear up the mess.
The right honorable gentleman wanted to know what proposals the Government had for cutting down expenditure. He is, no doubt, aware that the present Government has made tremendous efforts to cut down expenditure. As a matter of fact, it has reduced expenditure by approximately £4,000,000 a year. I have not heard from honorable senators opposite any helpful suggestion that would enable the Government to remedy the present situation. The Opposition simply criticizes. It pulls down the temple, but does nothing to lay the foundation of a new edifice. It is an easy matter to put some one in a tremendously deep hole and expect him to get out by his own efforts, not even lowering anything like of a rope to enable him to do so. That is the attitude the Opposition takes up. It offers no suggestion, and affords no help ; it simply criticizes for electioneering purposes.
– The Government is in a hole to-day.
– There is no doubt about it, and I will tell the honorable senator who has put us in that hole. The Leader of the Opposition asked why the Treasurer is not here standing up to his guns.
– The reason is that he is away electioneering.
-What is wrong with that? When others are travelling around the country electioneering for all they are worth, placing their views before the people, surely it is the responsibility of the Government, realizing that the people are being misled, to tell them that they are hearing the wrong story. I am sure that the Treasurer will not miss a step in doing all that it is possible for a Treasurer to do in the interests of Australia.
The right honorable senator said, “ The banks are not responsible for the present situation.” I do not know that the Government has ever held them responsible for it, except to the extent that the banking system of Australia is not elastic enough to get the country out of its present troubles. We might have been in a better position to get out of our troubles had previous governments made provision for a rainy day, but no such provision was made by the profligate administrations that have preceded us. They never took into consideration that there might be a hard bit of road to travel over presently, which would need a little macadamizing beforehand.
In 1923, the year before the BrucePage Government took office, the expenditure was £62,800,000. In 1929, it was £77,200,000, an increase of £15,000,000 in six years. That Administration was “ going for its life “ like a man at the races who has had a few spots and is trying to nick all the winners. While hungry men are tramping the roads looking for employment without the slightest hope of getting it, honorable senators opposite cry, “ Economy, economy, economy.” I have shown what their idea of economy was when they were in office. In 1923, the total taxation was £49,885,000. By 1928 it had increased to £56,303,000, an increase of approximately £6,400,000.
– I hope that the honorable senator’s figures are more reliable than those which the Treasurer made use ofin Brisbane.
– The figures I am quoting have been supplied by the Treasury, and I think that if they are checked they will be found to be absolutely corect. In 1923, the debts of the Commonwealth maturing overseas amounted to £113,000,000. In 1929, they amounted to £159,000,000, an increase of £46,000,000. Yet honorable senators opposite have the audacity to accuse the present Government of not economizing.
– Is that the amount of the Commonwealth debt?
– No ; it is the combined debt of the Commonwealth and the States, but the Federal Government has had its full share of the money borrowed. A former Treasurer has claimed that £39,138,000 was paid off the war indebtedness of the Commonwealth by the Government of which he was a member; but we must set against that an increase of the ordinary debt by £58,250,000, exceeding by £19,000,000 the amount of the sinking fund used for the redemption of the war debt. When the previous Government took office it inherited a surplus of £7,400,000. In six years it squandered the whole of that amount and handed over to the present Government a deficit of £4,987,000. When the present Government started to pull Australia out of the bad times which were just then looming, itwas £5,000,000 behind scratch. Yet now it is blamed for all the troubles assailing the country at the present time. In the years when all this squandering took place we had prosperous seasons, work was plentiful, every- . body was comparatively happy, taxation was flowing in from all sources, prices for our products were good, that of wool was fairly high, and so was that of wheat; our graziers and wheat-growers were doing remarkably well. Honorable senators opposite talk of confidence. In July, 1928, a 5 per cent. loan for £7,000,000 at £98 was issued for a term of 30 years. It was well advertised by the previous Government and there was so much confidence in it among the investors overseas that they ventured to take up 13 per cent. of that loan. The balance of £6,000,000 was left on the hands of the underwriters.
– How long was it before the underwriters unloaded at a premium?
– A few days.
– The underwriters may have shown the previous Government a confidence trick, but it was the responsibility of that Government to see that that was not done. If some governments are ready to surrender themselves to confidence tricksters in the shape of money lenders overseas this Administration at all events is not prepared to do so. Confidence in Australia was destroyed as far back as 1928. This is disclosed by the only barometer by which the credit of a country can be tested, namely, the readiness of investors to place their money at the disposal of a people. In 1929, only seven months after the loan I have just mentioned was put on the market, another loan of £8,000,000, for a similar period and on the same terms, was placed on the market at £98 by the late Government. The extent of the confidence which overseas investors then had in Australia and their belief in the way it was then being governed by the Bruce-Page Administration, is shown by the fact that only 16 per cent. was subscribed by the public, the balance of £6,750,000 being left on the hands of the underwriters. Facts such as these show who were responsible for the destruction of the confidence of investors in Australia. That confidence was well and truly destroyed before this Government took charge of the affairs of the nation.
This Government has made an honest attempt to pull the. country out of its present trouble, but it is controlled in the Senate by supporters of the late administration who are in the majority, and so is prevented from relieving the community of the burden under which it is struggling to-day.
When this Government came into power the short-term indebtedness of the Commonwealth and States overseas amounted to £17,000,000, but it is now £38,000,000. During a period of three years, the BrucePage Government raised £125,000,000, and in doing so exhausted the loan market. Is it any wonder that investors are watching what is taking place in the country where they wish to invest money ? There will always be a lack of confidence in Australia, while the activities of the Government of the day are hobbled by the Senate, constituted as it is to-day, and while we are prevented as we are by this branch of the legislature from giving effect to our legislative programme in the interests of the people of this country. As a result of fifteen years’ administration by anti-Labour governments during very prosperous periods, Australia practically lost its credit overseas, but despite that fact this Government is blamed for the present financial position. During the period of six years in which the Bruce-Page Government was in office imports to- the extent of £892,000,000 were Brought into Australia.
– That was due to the prosperity of the country.
– Those were prosperous years when the Government of the day should have been building up the nation’s finances to meet the lean years that were sure to come. But no such provision was made. No determined . effort was made to establish new industries here, and to expand those already in existence. Instead of that being done our money in those days of prosperity went overseas to purchase imports to the. extent of £892,000,000. During this same six years’ period, our exports were valued at £832,000,000, leaving an adverse trade balance of £60,000,000. Let me show what this Government has done to overcome that state of affairs. When the previous Government came into power, funds in London were in credit to the extent of £24,200,000, but when it went out of” office, there was a debit of £49,000,000 or a difference in six years of £73,200,000. Notwithstanding a drift of such magnitude, honorable senators opposite have the audacity to claim- that the Government which they supported administered the financial affairs of the
Commonwealth with ability. Although the previous Government left an adverse trade balance of £60,0.00,000, the position has now completely changed. For the first seven months of this financial year, the imports were valued at £43,400,000, and the exports at £50,000,000, showing a favorable trade balance of £6,600,000. That is a complete answer to the charge made by the Leader of the Opposition (Senator Sir George Pearce).
I have endeavoured to deal quite dispassionately with this important subject because I realise that the country is in great difficulty, and that every one is anxious to do his best to render whatever assistance is possible. The members of the Government have endeavoured to secure the best advice available and have set themselves with earnestness and ability to the task of righting the position. In this respect the Opposition has done nothing. Not one constructive suggestion has been made by honorable senators opposite. They, frequently refer to the necessity to restore confidence, but they do nothing to help to that end. They are mere calamity howlers parading the country and betraying Australia, perhaps not intentionally, but certainly most effectively. The people on the other side of the world know that we have a huge army of unemployed; that men are tramping the roads when they should be engaged in the fields, in the mines, or in other spheres of activity. If work could be found for them they would, be able to bear a fair share of the burden of taxation. They would be contributing to the revenue instead pf having to look to the Government for a dole to supply them with the bare necessities of life. The Government is seeking a way out. I know it is a tortuous path that we are asking the people to take and that progress may be slow for a time; but by reducing expenditure to the lowest possible amount, we hope that the position will improve. The Government is cutting to the bone and effecting economies which are distasteful to it and to me, personally. I realize that every honorable senator is attempting to do his part, but greater efforts will have to be made to distribute the burden more equitably.
In view of what this Government has done, surely it is entitled to some credit. The only suggestion that we hear from honorable senators opposite is that expenditure should be reduced still further. The only saving which some of them suggest - I do not include all of them - is a reduction of invalid and old-age and war pensions. I say, unhesitatingly, that this Government would rather go out of office a dozen times than adopt such a policy.
– How are such pensions now being paid?
– They are being paid.
– By the banks.
– If- that is so, it shows that the banks have confidence in the Government. The present position is not likely to improve until more favorable consideration is given by this chamber to the measures which the Government brings before it. In the present circumstances, I can only say to the Opposition, “ Thank you for nothing.” All that the Government has received from honorable senators opposite is criticism instead of constructive suggestions, and this makes it exceedingly difficult, if not almost impossible, for it to steer the ship clear of the rocks which it is endeavouring to avoid.
– In the short time at my disposal, I do not propose to traverse many of the extraordinary statements made by the Leader of the Government in the Senate (Senator Barnes), nor do I wish to indulge in any recriminations. I would however, remind the Minister that when the Government of which he is a member came into power, one of its slogans was “ Work for all.” Unemployment was to be banished. But what do we find? When this Government came into office, the unemployment figures were 12.1 per cent., but three months ago they had increased to 25.6 per cent., or more than double what they were when Labour assumed control. It is unfair for the Minister to suggest that the Senate stands between the unemployed and work, merely because it has declined to pass a measure providing for the printing of £12,000,000 worth of “dud” notes. The inference to be drawn from the Minister’s remarks is that if the Fiduciary Notes Bill had been passed, everything would have been all right. Accepting the Government’s own statement that there are 300,000 unemployed at present, and that £32,000,000 in fudiciary notes was to be used for relieving unemployment, we find that under that measure only £40 a year, in “ dud “ notes, would have been available for every person now unemployed. Notwithstanding this, the Government has the audacity to tell us that the Opposition is responsible for the problem of unemployment remaining unsolved. The Minister also said that the previous administration had destroyed any confidence there was in Australia’s credit. I remind him that when the Prime Minister (Mr. Scullin) was in England last year, the Labour caucus passed certain resolutions against its own Government, and, according to the Prime Minister himself, the effect of those resolutions was to absolutely destroy whatever chance Australia had of obtaining financial assistance overseas. The Prime Minister clearly stated that at that time there was every likelihood of Australia’s overseas indebtedness being funded.
It is fresh in the minds of most of us that a very distinguished gentleman visited Australia at the invitation of the Commonwealth Government, in order to diagnose the trouble from which we were suffering, and to suggest remedies. I refer to Sir Otto Niemeyer, who was accompanied by Professor Gregory and Mr. Kershaw, and, in passing, I regret to say that they received shocking treatment at the hands of certain individuals in this country. I propose to read a short but pithy extract, which sums up our position as it was in August of last year. It is considerably worse to-day, but the Government knew at that time that certain action had to be taken. I believe that the Prime Minister intended to do what he knew to be right, but he had not the strength or force to bring his party behind him. The extract which I propose to quote is taken from the Harbour. It reads -
Sir Otto Niemeyer is a business doctor with a world-wide practice. He has already treated - and cured - Hungary, Austria, Poland and Spain, among other distinguished invalids. At the invitationof the Federal Government,he came to Australia and made a thorough examination of the patient. He found Australia suffering from along course of high living and no thinking. The dietary scale consisted chiefly of loans, and the masses of the people needed the invigorating tonic of more work and less sport. The constant resort to loans in a nation is as ruinous as addiction to drink in an individual. Sir Otto Niemeyer wrote his prescription in plain English. Here it is: -
No more loans. No inflation of currency. Reduce costs of government. Reduce costs of living. Reduce costs of production. Grow more wool, grow more wheat, make more butter, dig more coal, work longer hours. Cut down luxuries. Curtail amusements. Invest reproductively the money so saved. Live plainly. Avoid waste. Learn to love work instead of hating it. Do all this and in two years you will recover. Otherwise - exit Australia! If you attend to my instructions, I will send you something to tone up your jaded financial system - a few millions, but nomore - just a little something to tide you over the inevitable discomfortof the period of recovery. If you do not attend to my instructions, I shall attend your funeral.”
The eminent specialist then put on his hat and intimated that he would go and join his steamer. He had not left the house, however, before the hullabaloo began. Dad Scullin had promised that everything would be carried out according to the doctor’s orders, but the younger members of the family yelled out that they would not take the beastly medicine. They called loudly for a dose of their favourite loan mixture instead, and as it was not forthcoming, they sang in chorus, “ We ain’t gonna work no more.”
That, roughly, is the situation that faces those who have the credit and good name of Australia in their keeping at the present time.
I submit that that fills the bill at the present time. The condition of the patient is very much worse now than it was then, but it would rapidly improve if proper remedies were applied, and the nostrums of inflation, note-printing, and nationalization of banking, were abjured. The theory that credit can be created or released is a pernicious one. Confidence cannot be restored on the other side of the world, or even in our own country, until we resolutely “ face the jump.”
This morning I received from a friend in England a copy of the Loudon Observer of the 1st March last, containing a marked paragraph in an article written by the financial editor of the newspaper, to which he wished to draw my attention. That paragraph is headed, “ Australia Still Wobbling,” and reads-
At the same time the admonition given in the Treasury statement that difficulties are largely due to lack of confidence on the part of investors and “borrowing countries should themselves take all possible measures to restore that confidence,” should be taken to heart. Australia is a case in point. The path to economic sanity has been plainly pointed out to her. Slowly she is moving towards it, but it appears that the requisite sacrifices arc being accepted only with the greatest reluctance. Every kind of nostrum is being put forward in the hope of avoiding the inevitable, from the plain “ repudiation “ of the extremists, headed by Mr. Lang, to the latest “ inflation “ scheme said to be adopted by Mr. Scullin.
It may be stated without fear of contradiction that therewill be no lack of assistance in the way of financial accommodation once Australia has set her feet on the straight and narrow path of definite reform. Until that path is chosen, however, and the less onerous by-ways deserted, London, at least, will stand on one side and keep its packets buttoned up.
I draw the particular attention of my honorable friends on the Government side to the following: -
Any resort to the printing press, such as now suggested, can only lead the Commonwealth deeper and deeper into the mire. London’s financial world is definitely and distinctly friendly to Australia. Past experience has proved this. This very fact, however, makes necessary an attitude of aloofness so long as schemes involving inflation or other methods of unsound finance are in contemplation.
I give the lie direct to the rotten and filthy statements that are being made from platforms in Australia to-day, to the effect that the old country is a bloodsucker, a vampire, a Shylock who is insisting upon being paid the last penny owing. Those statements are not true, and the people who make them know it. It is a contemptible and cowardly attitude to be adopted by any citizen of a nation whose freedom, whose very life, depends upon that great instrument for righteousness, the British Navy. That navy is our sure shield against aggression.
– Listening to statements such as those made by the Leader of the Government and his colleagues, and comparing them with the statements of the right honorable the Leader of the Opposition, one is struck not so much by the diversity of testimony as by the many-sidedness of truth. That feeling is emphasized by a perusal of the financial statement issued last July by the Prime Minister, as Treasurer, in which he said -
Parliament must recognise, however, that no further drift in Commonwealth finances can be permitted, and that the balancing of the budget is an essential step for the restoration of the credit of Australia. The Government proposes to watch the financial position closely throughout the year, and without waiting until the end of the financial year, will not hesitate to take immediate steps, if such action appears to be necessary, in order to prevent any serious disturbance in the budgetary position.
– He saw the truth then.
– Following the meeting of the Loan Council, held on the11th June last, at which the Commonwealth Government was represented by the Honorable E. G. Theodore, the announcement was made that -
The Treasurers feel, however, in view of the difficult outlook generally, that it is proper and advisable for them to urge upon all governments the need for the utmost economy in regard to expenditure, and also that it is essential that the budgets of the Commonwealth and the States be balanced for the forthcoming financial year. This is necessary not only because of the Australian position but also because of the serious effect which the continued deficits in the accounts of the Com,monwealth and States have undoubtedly had upon the credit of Australia abroad.
I wonder whether it is because of our failure to carry that into effect that the great Westminster Bank has demanded from the Commonwealth Government payment in gold on the 30th June next, as was stated by the Prime Minister a few days ago, in spite of the fact that all banking and other financial institutions in the old country have so much money at their disposal, and so little demand for it, that they hardly know what to do with it? They are all anxious to help Australia. Only a discredited government would be treated in such a f ashion.
One of the most damning things that can be said of any government is that it is discredited; and it makes one blush to think that the term is being applied to the present Government in Australia. Last week, Ministers of the Crown almost rejoiced at the fact that the Government Savings Bank of New South Wales was compelled to close its doors. No serious concern was shown regarding the deplorable state into which the finances of New South Wales have fallen. What we need is a good deal less of the “high finance” about which we hear so much, and a good deal more of plain arithmetic.
If members of the government party have any sincerity of purpose and any desire to right the existing position, they will follow the advice tendered by the. Prime Minister (Mr. Scullin) and the Treasurer (Mr. Theodore) last year. If they do that, they will find that the credit of Australia will very quickly be re-established.
The Leader of the Government (Senator Barnes) was particularly unfortunate in his references to the farmers. I believe that the majority of people feel that no genuine attempt has been made to rescue the farmers from the difficult position ill which they find themselves today. The honorable senator was unfortunate also in his reference to investors, and the present state of government securities on the other side of the world. I marvel at the fact that any responsible Minister of the Crown should, considering all the circumstances,refer to those securities in a speech in defence of this Government. The honorable senator emphasized the need for placing in work those who are unemployed. In that direction, every honorable senator on this side agrees with him wholeheartedly. But when we analyse the position, can we find anything constructive that thisGovernment has done towards re-establishing the position? I feel that, on the contrary, every action that it has taken has’ been a discouragement to men of affairs against adding to their responsibilities by providing further employment. Men of affairs to-day are afraid to launch out; and can we blame them ? I do not think that any honorable senator would take on added responsibilities in view of the indications of a lack of responsibility on the part of those who are in power. Every move made by the Government places a further handicap upon industry, enterprise, and finance, and they all tend to undermine national and individual credit. Each move takes a further slice off the goose that lays the golden egg with the result that to-day industry is more or less stagnant, and the unemployed number 300,000 with 700,000 dependants. Five years ago, could such a state of affairs have been visualized in Australia, considering the nature and the extent of her resources? I could not, and I do not, believe that any honorable senator could have done so. The responsibility for thi: state of affairs must rest heavily, not on past governments, as has been alleged the Leader of the Government to-day, but upon the present occupants of the treasury bench. It does not matter how charitably one may review the position, one cannot avoid forming the conclusion that the present Government has done everything possible - perhaps through lack of experience - to increase the number of unemployed to the present astounding and deplorable figure. The result is that we are not living in a free country. We have taken away from the working man the right to work, and from the man of enterprise and energy, the right to develop the resources of this country. The Government knows that, had it made an earnest attempt to put its house in order, it could have obtained all the assistance it needed from those who are able to give that assistance. It knows that all that is necessary is to reestablish confidence. If that were achieved, work would be provided by those who are able and anxious to do so if given an opportunity by this or any other Government.
To-day we find ourselves in the position of having a Prime Minister who appreciates to the full the fact that this Government is discredited in the minds of men of affairs, both in Australia and on the other side of the world. He realizes that the one essential necessary to make possible the re-employment of the 300,000 people who to-day are workless, is the re-establishment of confidence. He must know, also, that that confidence could be restored within 48 hours if we had in office a non-party government under his former colleague, Mr. Lyons, in which he himself might be included. But what do we find? Instead of taking the obviously sane course, this Government clings to office. It is content to sit back and watch the lifeblood oozing out of this country. Apparently also, it can contemplate, with unanimity, all the misery and hardship that must be endured by the 300,000 persons who are unemployed, and their 700,000 dependants during the coming winter. Although this country is supposed to be under democratic government, this is the state of affairs that obtains to-day. If the Government were sincere in its protestations that it has at heart the welfare of the people which it is supposed to represent - the working classes of Australia - it would do those things that are necessary to re-establish confidence in the minds of the people, and make possible the adoption of a policy to provide for the unemployed and for the hungry hundreds of thousands of people in this country. If it is not prepared to take the obviously sane course, it should hand the reins to another government, which, as I have said, could reestablish confidence within 48 hours.
– The Leader of the Senate (Senator Barnes), realizing that he had a hopeless case to defend, resorted to the abuse of his critics, and sought to throw responsibility for the present disastrous state of affairs upon the previous Administration. The honorable gentleman was particularly unfortunate in his line of defence. The figures which he quoted will not stand investigation. The facts are that during the regime of the Bruce-Page Government the per capita debt of the Commonwealth was reduced from £66 to £59 - a reduction of £7 per head. During that period also, £45,000,000 was paid off the war debt. Although the net indebtedness of the Commonwealth was increased by £13,000,000, we should not forget that assets to the value of £58,000,000 were created. Of the total expenditure incurred, no less a sum than £33,000,000 was spent on postal, telegraphic and telephone facilities. and war service homes which are reproductive in the sense that they are returning interest on the ‘capital expenditure.
The Leader of the Senate, like his colleagues in the Ministry, made a purely party defence of his Government’s maladministration. The honorable the Treasurer (Mr. Theodore) is similarly engaged. He is travelling, or flying, hither and thither - at the taxpayers’ expense I presume - making speeches in which he is totally misrepresenting tho position of the Commonwealth during the seven years’ administration by the BrucePage Government. In that period, the States increased their debts by £212,000,000, and the States that were chiefly responsible for that enormous expenditure of money - much of it spent wastefully - were governments led by Mr. Lang, Mr. Theodore, and Mr. McCormack.
In August last, the Prime Minister, apparently in all sincerity, summoned the Premiers and Treasurers of all the .States to confer with the Commonwealth Government as to the means to be adopted to balance budgets. Under the agreement drawn up, the Commonwealth and State Ministers undertook to reduce expenditure by £15,000,000, and to balance their budgets. At the time, I did not believe it was possible to balance income and expenditure in one year without borrowing, but the agreement which Mr. Scullin signed had that as its objective. But what happened? Instead of making an honest attempt to fulfil his obligation by reducing expenditure, we now find, from the official figures quoted by the Leader of the Opposition this afternoon, that on the basis of the expenditure for the first nine months of the present financial year, Commonwealth expenditure for 1930-31 will exceed the Estimates by over £3,000,000, and we are informed that, as a result of this Government’s misrule, the deficit at the end of the financial year will be approximately £26,000,000.
Senator Barnes confessed that this Government had exhausted its credit. Actually, it has destroyed its credit. The honorable gentleman admitted that times were bad, but he offered no excuse for the action of this Government in continuing on its way as if times were prosperous. The ship of state is not drifting on to the rocks. It is being driven on the rocks by an incompetent and reckless Government, which, up to the present, has made no real attempt to economize. Pirates seem to be in control of the ship of state with results that are disastrous in the extreme to the people of the Commonwealth. It would almost seem to be not an exaggeration to say that the Government had embarked upon this course intentionally. “We hear criticism about the comparatively small accumulated deficit disclosed in the accounts when the Bruce-Page Government relinquished office, but nothing is said by honorable senators opposite about the appalling results of this Government’s mismanagement of the finances. It has heaped taxation upon the people until they are almost crushed. One result of its policy is seen in the unsatisfactory state of our trade and commerce. At one blow the Government levied additional taxation on the people to the amount of £12,500,000. Since then, it has added a sales tax, primage duty, and a tax on tea - the beverage of the poor - as well as stupid embargoes. This crushing load of taxation is largely responsible for the wide-spread unemployment throughout the Commonwealth. As previous speakers this afternoon have pointed out, when this Government took office the official unemployment figures were 12 per cent. To-day they are 25 per cent., and it is feared that soon they will be 30 per cent. This is truly a calamitous state of affairs. The Treasurer is not making things any better by perambulating about . the country attacking the bondholders in the Mother Country, and suggesting that all banking institutions and persons who draw interest on government bonds are vampires and Shylocks. His intention, of course, is to create the necessary psychology in the minds of the people for the next election, which we are told will be fought on the issue - “ The people versus the banks “. To counter that move, our watchword should be - “ Hands off the people’s money”. We have 4,000,000 depositors in our Commonwealth and State savings banks. Their deposits must be safeguarded at all costs. Already we have some knowledge of what is likely to occur if adequate measures are not taken to protect their interests. We have seen what has happened under the rule of the Lang gang in New South Wales. As a direct result of Mr. Lang’s policy to repudiate interest payments, the great savings bank in the premier State of the Commonwealth closed its doors a few days- ago. . The inflationary policy of the Scullin Government is really another form of repudiation.
– What does the honorable senator mean by his reference to the “Lang gang”?
– I mean the Premier of New South Wales and his supporters - the most awful set of political barnacles that ever fastened on the people of any country.
The Leader of the Senate (Senator Barnes) has just told us that this Government cannot borrow any more money. Of course, it cannot, because it has utterly destroyed the confidence of the people. The prices of Australian stocks on the London market are a clear indication of the opinion of overseas investors. When this Government came into office eighteen months ago, Commonwealth 5 per cent, bonds were quoted at £93 17b. 6d. ; they are now £71. British 5 per cent, bonds eighteen months ago were selling at £102 7s. 6d. To-day the price is £103 1-1 6th. Commonwealth 6 per cent, bonds eighteen months ago were worth £100 17s. 6d. ; to-day they are quoted at about £80. A comparison between Commonwealth and New Zealand stocks is alarming, but instructive. New Zealand 6 per cent, bonds which, eighteen months ago, were, worth £103 7s. 6d., to-day stand at £106 5s., despite the fact that overseas prices for New Zealand wool, meat, and butter have fallen considerably. The explanation is to be found in the fact that the New Zealand. Government and its supporters have not practised or preached repudiation or inflation. South Africa, although a relatively poor country, is also in an enviable position compared with Australia. Recently a 4^ per cent, loan, which it placed on the London market, was over-subscribed in less than an hour.
Commonwealth bonds have declined in the London money market because this discredited Government has so destroyed the confidence of the people that it is now unable to approach the money market for further supplies. It is possible, even in Australi3j to buy Commonwealth shortdated bonds at a price that will return to the investor 13 per cent. This awful state of affairs is due entirely to misgovernment, to all this talk of repudiation a.nd inflation, and to the deliberate dishonouring of pledges made at election time and since by the Labour party.
The people do not forget .the promises made about the payment of debts, the balancing of budgets, the assistance for the farmers, the opening of coal-mines, and many others, all of which have been dishonored. The situation will not improve while this Government is in power, and since it is determined apparently not to retire, it will have to be scraped off the treasury bench. Immediately that is done, and we have in power a government that is prepared to honour its obligations, large sums of money will be available, and it will be possible to fund our overseas short-dated indebtedness at a low rate of interest. We shall also be able to borrow money, if that be necessary, at a low rate of interest to set the wheels of industry going again.
But this Government will do nothing to put Australia right. The Treasurer, instead of remaining in his place in Parliament and helping to guide the ship of state into safe waters, is going about the country making inflammatory speeches, and quoting false figures with reference to the financial administration of the previous Government, in order to mislead the people. Unless some definite action is taken immediately to right, the situation, it will be too late. This great country, despite its productivity, will be irretrievably ruined, and disaster will overtake our people, the great majority of whom come from sturdy British stock, and are proud to think that they form part and parcel of the greatest empire the world has ever known. Unfortunately for this country, this Government takes its instructions from caucus, and caucus, as we know, is entirely controlled by outside organizations. The man who is leading the Government is not the Prime Minister. The “ boss of the circus “ is the Treasurer (Mr. Theodore), who has behind him a record of ruin in Queensland, and also a record in connexion with the obtaining of the Dalley seat. The Treasurer as boss of the circus cracks the whip and the Prime Minister turns a somersault. He has turned so many somersaults that if he had the semblance of a backbone, he would have dislocated it long ago. The Prime Minister has gone back on the stand he took in the cables sent from England. He said then that he would not agree to any form of inflation, or to any interference with the judiciary during his absence. He even went so far as to say that if appointments were made to the High Court bench during his absence, he would resign. The cables stated in that decision Messrs. Moloney and Brennan concurred. The Prime Minister has done nothing but twist; and in his twisting he has, unfortunately, nearly ruined a great country. And all the time people are unemployed, while some are starving. Motoring from Wodonga the other day, I passed quite 60 unemployed men and women with sacks slung over their bent shoulders; misery was written on their faces, because they realized that so long as the present so-called Government remains in office, their position would be hopeless. They are asking for an early election in order that they might put into office a government in which they have confidence.
The DEPUTY PRESIDENT (Senator Plain). - The honorable senator has exhausted his time.
– I am not greatly concerned about Mr. Scullin, Mr. Theodore or Mr. Brennan, nor am I greatly influenced by what Senator Guthrie or the Leader of the Opposition (Senator Pearce) has to say regarding the financial position of this country. I should not have risen had it not been for the remarks which passed between the Assistant Minister (Senator Dooley) and Senator R. D. Elliott. On my own behalf, and on behalf of those who support the Lang policy, I desire to place on record our belief that the worst Labour government in existence is preferable to the best Nationalist government that could sit on the treasury bench. I gathered from an interjection by Senator R. D. Elliott that, in his opinion, Federal Ministers were rejoicing at the failure of the Government Savings Bank of New South Wales. I am prepared to debate on the public platform with any Minister, or other honorable senator, the causes which led that bank to close its doors. I do not call the present Federal Government a Labour government. It does not know what the term “ Labour “ means. Like the Ramsay MacDonald Government in England, the present Federal Government is following a policy of vacillation. The Scullin party has published throughout New South Wales that the failure of the Government Bank of New South Wales is due to the mal-administration of the Lang Government. I hurl the lie back in their teeth. The Lang Government has been in office for only five months, and it is well known that from the moment it took over the reins of government in New South Wales there has been a run on the State Savings Bank. In the New South Wale3 Parliament, within the last 24 hours, both Mr. Bavin, an ex-Premier, and Mr. Stevens, an ex-Treasurer, admitted that they had said on the hustings that if the Lang party got into office, depositors in the Government Savings Bank would be wise to withdraw their savings. What does Senator Guthrie mean when he speaks of the “ Lang gang “ ? Does he compare the Lang party with a gang of bushrangers or with a razor gang? What about, the squatter gang, which, during the rich years of the war, controlled the primary industries of this country? That gang now urges that budgets should be balanced by the introduction of longer working hours, lower wages, and the abolition of arbitration court awards. It says that by such means we should regain financial stability. The supporters of Mr. Lang are prepared at any time to uphold the Lang plan. Honorable senators know that, in this machine age, machines can out-do men in production. In the United States of America - perhaps the greatest civilization of modern times - Congress has appointed a special committee of experts, including representatives of the American Federation of Labour, to devise ways and means of coping with the rising tide of unemployment in that country. It is estimated that there are 7,000,000 persons unemployed in the United States of America. Similar conditions exist in Great Britain and Germany. Even France, whose treasury is full of gold, is faced with the problem of unemployment. The great Mussolini face3 the same problem in Italy. Australia’s troubles are common to all civilized countries - all are suffering from over-production and underconsumption. The supporters of the Lang plan maintain that until Britain agrees to fund Australia’s overseas indebtedness in th« same way that the United States of
America dealt with Britain’s indebtedness, no further payment of interest on our overseas debt should be made by Australia.
– That is repudiation.
– It is nothing of the sort. We merely ask for an extension of time in which to meet our liabilities. Australia’s interest commitments on money borrowed overseas by other governments amount to £27,000,000 per annum. The Lang plan provides for an extension by two years of the term of repayment of that amount. That would give Australia the use of £54,000,000.
Senator E. B. Johnston claims that the Lang plan means repudiation. I remind him that Great Britain at one time withheld payments due to the people of the United States of America. The late Mr.Bonar Law visited the United States of America to plead the cause of the British nation. After six weeks he returned, having failed in his mission. Later, when the Congress of the United States of America realized that Britain was one of the best customers of the United States of America, Mr. Bonar Law was invited to return to that country, with the result that the whole of the debt was funded. Yet, when Mr. Lang, and his supporters, urge that the same action should be taken in connexion with Australia’s indebtedness to Britain, we are told that we are repudiationists, disloyalists, communists, bolsheviks, and everything that is bad. In addition to the £27,000,000 per annum payable as interest overseas, Australia’s internal interest commitments also amount to £27,000,000 per annum. Honorable senators opposite urge that wages must come down, and that the standard of living must be reduced. But they do nothing for the 300,000 men and women who walk our streets seeking employment. According to them, interest is to remain sacrosanct. Mr. Lang has refused to pay interest, and 1 applaud him for his action. Mr. Scullin, Mr. Brennan, and others rush into print because the Lang party stands four-square for the principles of Labour. Senator Guthrie said that the Prime Minister is a twister. He is more than a twister; he is everything
– The honorable senator must moderate his language.
– Talk about repudiation! The Prime Minister and his colleagues are to-day assailing one man and his followers who have announced a certain policy which they believe is badly needed because of the financial position of Australia.
– What about the third plank in the platform of that party ?
– The third plank reads as follows: -
That the existing system of currency be altered from that of a nominal gold standard to a system more suited to modern conditions, preferably the goods standard.
I want to say to the honorable senator from New South Wales, who is sitting there with a cynical grin on his face-
– Order !
– I withdraw that. As one of the ambassadors from Pittstreet or the Motor Loan Cash Order people and a few more of those outfits, I suppose the honorable senator will tell us-
– The honorable senator has exhausted his time.
– I am inclined to wonder where the Government stands, attacked as it is by friends and foes alike. The Leader of the Opposition (Senator Pearce) claims that for the nine months of the current financial year, while this Government has been in office, the deficit has grown to something in the vicinity of £19,500,000, and that if we remain in office, the deficit for the year will be something like £23,500,000. But the right honorable gentleman knows perfectly well that the greater portion of the taxes are collected in the latter part of the financial year, and that the position is likely to be improved. At any rate, it is not likely to be as bad as the honorable senator predicts. It is not the deficit that worries the present Government so much as the remedy to be applied. Whether the responsibility rests on the shoulders of the previous Government or those of the present Government, the fact remains that the difficulties exist, and it is our duty to endeavour to remove them although we may differ as to the methods to be employed in doing so.
Let us examine the position to see if we can save £20,000,000. There are certain liabilities which must be met. The first is £26,700,000 for interest, sinking fund and exchange. The next is an amount of £20,000,000 for invalid, oldage, and war pensions. As a matter of fact, because of the existing unemployment, this amount ha3 been increased by about £2,000,000 during the last year. In previous and more prosperous times, sons and daughters could afford to keep their aged parents. To-day many are unable to do so, and these parents have reluctantly been obliged to apply for pensions. The same has happened in regard to invalid pensions. Applications are made to-day which would not have been made had the times been more prosperous. I agree with the Leader of the Government that we cannot see our way to make any call for further sacrifice on the part of our pensioners. Already the working people of Australia have made a sacrifice of something like £44,000,000 through unemployment. What is the alternative? I have listened patiently to honorable senators opposite, and I have heard one of the Nationalist party leaders speaking. I do not know how many leaders the party has. There is one in the House of Representatives, and one is touring the country, organizing Nationalist forces against Labour, making it necessary for Mr. Theodore to follow him up in order that the position may be correctly stated.
Some honorable senators opposite have adversely criticized the Treasurer’s action, and the Leader of the Opposition has said that Mr. Theodore has set out upon an election campaign. Would the fright honorable gentleman say the same in regard to his leader, or supposed leader, Mr. Lyons, who was recently in the forefront of the Labour movement, and has been gladly accepted by the opponents of Labour ? It is strange what rejoicing there is when a Labour man joins the Nationalist ranks. The present Government has a perfect right to state its case to the people. Honorable senators opposite must admit that they have offered no helpful suggestions.
– They have made some very good offers.
– I should be obliged to the honorable senator if he would let us know what they are. The fact remains that no helpful suggestions to get over the present difficulty have been put forward by honorable senators opposite. By what means would they restore confidence? By abolishing arbitration awards, leaving the working classes at the mercy of the employers, and without any protection from an industrial tribunal.
– No one suggests that.
– I challenge hon.orable senators opposite to say that they would not abolish arbitration if they were in power to-morrow. It is in the policy of the Nationalist party to do so in order to fulfil an agreement supposed to have been entered into at the request of the banks.
There is also the suggestion from the Commonwealth Bank that social services shall be reduced. How can we reduce social services? Can we make further reductions in regard to hospitals, which even now are not in the position to pay their staffs? Can we ask the working classes to make still greater sacrifices than they are already making? We all realize that the only hope of salvation this country has is to get its people back into employment.
– Then why did Mr. Theodore incite them to keep out of employment ?
– I do not know that he ever did so, and in any case he is capable of answering for himself. We know that people are tramping tha country searching for work and cannot get it; that starvation is staring many of them in the face, and that many city men and women are sleeping in bags in the parks. Has there been any attempt to solve that problem by our friends opposite ?
– The Queensland Government has-done pretty well.
– Yes, because the Moore Government in Queensland started off with a surplus, and because the sugar embargo protects the State’s big chief industry. Without it Queensland would probably be in a worse position that tlie other States. I do not wish it to be understood that I am opposed to the embargo. I believe in applying the principle to Australia generally. I think it would enable us to stabilize our industries and our prices so that our people could lead decent lives, work decent hours and earn decent wages. There was never greater prosperity in Australia than when wages were high and when money was available.
– How would the honorable senator stabilize the prices of wool and wheat?
– I realize that we have no control over the prices paid for wool and wheat overseas, but I also realize that the control exercised by the’ banks over the price of land has forced the costs of production to an unduly high level. If we are to produce cheaply it will not be because wages are reduced on the farm or in the shearing shed. As a matter of fact, shearers have already had a reduction of 20 per cent. The fact that in the past money was made freely available by the banks created a sort of false prosperity, as a result of which land values were so increased that to-day in many cases it costs 3.6d. a bushel to pay interest on loans, land tax and rates, without spending one penny on labour. That is a -direction in which an endeavour must be made to tackle the wheat problem. The value of the land must be brought down. But honorable senators opposite prefer to start at the other end of the ladder. They would lower costs of production by forcing the worker to accept whatever wage is offered to him, and the landlord to accept whatever rent he can get and the storekeeper and others to accept whatever terms they can get.
– It would assist the primary producers if the land tax were reduced or abolished.
– I have no doubt that the taxation burden is heavy and that there are many industries which bear an undue share of it; but the Government cannot afford to reduce taxation; it must have revenue. In the first place the reduced price of our exportable products is responsible for our present position, and I admit that we have no control over that problem.
Previous governments were in power during prosperous times and the BrucePage Government went out of office just on the turn of the tide. Had it remained in power conditions would have been worse for the people of Australia than they are to-day, because the policy of the Nationalist party would have been applied and arbitration awards would have been abolished. That issue was fought out at the last election. The people determined by an overwhelming majority that the Federal Arbitration Act should be retained. They knew what would be the result if they had no protection from the law to govern their wages and working conditions. Honorable senators opposite seem to think that we should get back to the conditions of the ‘nineties, before arbitration wa3 known in this country.
– No one has suggested that.
- Mr.- Tout, of the Graziers Association, prior to, and during the last election, frequently said, through the columns of the press, that the only hope for the pastoral industry of Australia was the abolition of awards whereby workers could be engaged at whatever rates of wages the employers could afford to pay. We know what those rates would be.
I am opposed to the system of handing out doles, but the fact remains that the people have to be fed and clothed. It is the task of the country to find employment for its people and to see that they get a decent wage so that they may live under decent conditions. If we are to accept the requirement of the banks and reduce social services it means, amongst other things that we must reduce the provision for the education of our children. Would such a policy be in the interests of this country?
– Something might be done in that direction.
– Honorable senators opposite should tell us exactly what they mean when they suggest that we should adopt the proposals suggested by the banking institutions. Those of them who say that there should be equality of sacrifice merely talk, while others, unable to resist, are forced to sacrifice practically everything they possess. In the department which I have the honour to assist in administering, the pruning knife has been employed to such an extent that men who have given 30 years of honest and earnest service to the Government have been retrenched. I do not wish to place all the responsibility for what has happened upon previous governments; but, to a large extent, they are responsible, and consequently must take their share. They borrowed money overseas to the absolute limit.
– The honorable senator has exhausted his time. As an act of courtesy to other honorable senators, I suggest that those who speak to this motion should confine themselves to a period of ten minutes, so that all who wish to speak may have an opportunity to do so.
Senator Sir HAL COLEBATCH (Western Australia) [5.22]. - I propose to speak for only a few minutes. The Assistant Minister (Senator Dooley) asked whether we could give any advice as to how to get Australia out of the present trouble. I refer him to an authority which he should be willing to accept - the present Prime Minister (Mr. Scullin). If he will refer to the cablegrams sent by the Prime Minister when in London to the then Acting Treasurer (Mr. Lyons), he will find excellent advice as to the best way in which to get out of the present difficulty. Let me remind the Minister that one of those cables ends with these words -
I know and share members feelings regarding the. sufferings of the unemployed; but the extinction of our credit will spread that suffering tremendously.
Mr. Scullin also said
I came to London with the consent of the party. Apart from the Imperial Conference, my most important mission was to restore Australian credit so that we could fund the floating debt, and, if possible, raise some new money to relieve our economic position. My efforts would have succeeded had party support been maintained
Let me remind the Minister that in the first of these cables the Prime Minister said that the Government could not coerce the administration of the banks. He spoke of inflation in these words -
All this talk about creating credit and inflation is most damaging, and will seriously prejudice the conversion of maturing loans and treasury-bills. Since inflation was suggested efforts are being made by men here to withdraw their money from Australia.
In these cables we find sound and complete advice. I suggest that our troubles are almost entirely due to the fact that the Prime Minister has abdicated his high office, and has handed over the control of Australia’s financial policy to a notorious wrecker - a man who, I suppose, has a greater capacity for destruction than any other man who has ever occupied a prominent position in the public life of this country. During a comparatively short time this man, unhampered by any Legislative Council, was able to bring the great State of Queensland almost down to ruin and bankruptcy. He brought it to such a position that it was impossible for it to raise money on the London market. It is for such a man that the Prime Minister has abdicated. He has gone back on every declaration he made - declarations to which he pledged his honour and that of his Government. He has handed over the financial policy of Australia to a recognized wrecker, who to-day is pursuing exactly the same policy - although on slightly different lines - by which he brought Queensland to a state of bankruptcy, and by it he will bring Australia to bankruptcy if he is permitted to do so. I do not know that we are very much concerned about the differences of opinion between the Lang party and those who advocate the Theodore plan. The difference in the plans themselves cannot be discerned. They are the same in effect and principle, if not in detail.
Before resuming my seat, I propose to refer briefly to a remark made by Senator Dunn. He said that during the last New South Wales election the then Premier of New South Wales, Mr. Bavin, and the then Treasurer, Mr. Stevens, warned the people that, if the Lang party returned to power, it would be wise for them to withdraw their money from the Government Savings Bank of New South Wales. Who are the people who had money in that institution ? They number considerably over 1,000,000 persona, 750,000 of whom had deposits amounting to less than £20. The people with deposits in the Savings Bank of New South Wales were the electors of New South Wales. They corresponded almost exactly in numbers, and were the same people. The electors of New South Wales did not believe Mr. Bavin and Mr. Stevens when they told them that, if Mr. Lang were returned he would bring about such a state of affairs that the Government Savings Bank would be unsafe. They . ‘i loved Mr. Lang when he said that he would not, in any circumstances, tolerate a policy of repudiation. That was what they believed. Despite the specious pleadings of Senator Dunn, we all know that what Mr. Lang has done has been to repudiate. The occupants of the treasury bench admit it, and know it- to their cost. Hence there has been a run on the Government Savings Bank of New South Wales which has been compelled to suspend payment. When we hear of Mr. Theodore going about the country and saying it is a case of the people versus the banks we should remember what has happened to the people in New South Wales. They found that, in effect, they were the banks. They found that they, the people, were the Government Savings Bank, and that an unscrupulous government, having got into power by deluding them with promises to do certain things, had then turned round and destroyed the banks and the people as well.
Senator Dooley told us that the last federal election was fought on the issue of arbitration. Is that the issue before the people to-day? The issue today is inflation, and the present Treasurer claims the right to force upon this community a policy of inflation upon which the people have never had an opportunity to express an opinion. And yet he has the impudence to say that it is a matter of the people versus the banks. If he were successful - as he would be but for the Senate - the people of Australia would discover, as the people of New South Wales have, that the people and the banks are one and the same, and that the Treasurer, by adopting a policy which they have not had an opportunity to express an opinion on, would bring the banks to ruin and with them the people. /Senator Sir Hal Colebatch.
I refer honorable senators to a paragraph which appears in the cables published in this morning’s issue of the Sydney Morning Herald -
In the present more confident tone in Lon-‘ don, due to the sounder week-end trend of the Loan Council’s discussion, there is less disposition to assume the impossibility of renewing the bills due on the 30th June.
What does that mean? The healthier tone is due to the fact that at the meeting of the Loan Council the Commonwealth Treasurer was outvoted by every other member of the council. London says -that this healthier tone in the Loan Council makes it possible that Australia will be able to renew her treasury-bills when they fall due. If we are to restore confidence, we have to dispose of this impostor. The Prime Minister, if he wishes to remain in office, must assume the responsibility of office, and get back to the pledges he made; but so long as this impostor, this wrecker, remains in office-
– I rise to a point of order. I take very strong exception to the honorable senator referring to the Treasurer as an impostor. I ask that that word be withdrawn.
– -The , honorable senator must withdraw it.
– I have nothing further to say.
– The honorable senator must withdraw the word to which exception is taken.
– I will withdraw anything. So long as the Prime Minister continues to abdicate in favour of a man who .has lost the confidence of the people of this country and at Home, there is no hope for the unemployed; no hope of improvement in our financial position, and no hope for the people of Australia.
, - When this Government assumed office, the percentage of unemployed was 12.1, and, in accordance with its promise, it made an earnest attempt to provide work for our people. In the first place, a measure was introduced in which provision was made for a guaranteed price of 4s. a bushel on wheat, which would have made work available to large numbers, but it was defeated by the votes of the Opposition in this
House. Another bill providing for a guaranteed price of 3s. a bushel was then passed by both branches of the legislature, but was defeated by the Commonwealth Bank. Honorable senators may smile at the expense of the farmer, but
I am merely stating facts.
– Where was the money coming from?
– I remind senators that the subject before the Chair is public finance. They must not refer at length to measures which have been passed or rejected by this chamber.
– Although other honorable senators were permitted to refer at length to measures debated in this chamber, apparently, I am to be denied a similar privilege. I was endeavouring to show the manner in which the Government has endeavoured to relieve unemployment.
– The honorable senator must connect the subject of unemployment with that of public finance.
– I intended to do so. Senator Sampson said that the Government had attempted to issue “ dud “ notes in order to relieve unemployment.
II the notes which this Government proposed to issue were “ dud “ notes so also are the £260,000,000 worth of notes issued by the Bank of England. They are essentially fiduciary notes, as their only backing is the credit of the nation.
– Our credit has gone.
– The wealth and productive capacity of a nation is its credit. With the resources we possess, the Government was fully justified in introducing legislation providing for the issue of £18,000,000 worth of notes. Ample credit should be made available.
– It would be to a competent government.
– The Government behind which the honorable senator sat for a number of years did not make a very good showing while it was in office. The present Government is expected to balance its budget; why did not the previous Government square its accounts?
– When it attempted to do so, it was rejected by the electors.
– It had six and a half /years of office; yet, as the Leader of the
Senate (Senator Barnes) has pointed out, it commenced with a credit balance of £7,500,000 and finished up with a deficit of almost £5,000,000. We know perfectly well why the governments of the Commonwealth and the States are not able to balance their budgets at the present time. The cause is the wave of depression that is sweeping over Australia in common with all other countries, and the huge army of unemployed for whom work cannot be found. Budgets can never be balanced on a diminishing revenue, nor while there is a big army of unemployed. Senator Sampson quoted Sir Otto Niemeyer as having said that our people must work longer hours. Our present trouble is largely attributable to the fact that we have over-produced compared with the purchasing power of the people. Our . warehouses are full of commodities that the people cannot purchase. If work were provided for our unemployed, those surplus stocks would quickly be consumed, because the purchasing power of the masses would be as great as it was some years ago.
Senator Elliott alleged that members of the Government rejoiced when the Government Savings Bank of New South Wales closed its doors. That is news’ to me. I regard the occurrence as a calamity, and blame Mr. Lang for it. He is responsible for having stampeded the people of New South Wales into withdrawing their deposits. Immediately he announced his intention to decline to discharge his interest liability, there was a rush on the State bank, and in a few weeks from £16,000,000 to £18,000,000 were withdrawn from it. The people were afraid that they would lose their money if they allowed it to remain in that institution. I have not heard any member of the Federal Labour party express pleasure at the fact that it was compelled to close its doors. It is a bad advertisement for Australia, and some time must elapse before the blemish placed upon the reputation of our people can be removed. I do not think that there are many persons who are in agreement with Mr. Lang’s policy.
On the one hand the Government is blamed because it has imposed taxation, and on the other hand, because it has refused to reduce expenditure in certain directions. It would appear that in the opinion of some people the Government is wrong, no matter what it does. I recognize that the saturation point in regard to taxation has been reached,’ and that no further burden in that direction can be placed on the shoulders of the people. The time may be near or distant, but it is bound to come, when we shall have to adopt a fiduciary note issue. The orthodox system of finance has failed, and we must resort to what is somewhat unorthodox. We should at least give the proposal a trial, and see how it pans out. It must be admitted that, if a demand for their money were made simultaneously by all of those who have deposits in the banks, the most that they could be paid is approximately 6s. in the £1. There is no gold in circulation in Australia to-day, and the amount held as a reserve is only one-third of the value of the notes that have been issued; therefore, we are operating on what to all intents and purposes is a fiduciary note issue. In other words, its principal backing is trust, and a reliance on the Government to pay 20s. in the £1.
Unfortunately, the present Government is denied by the Senate the right to legislate as it thinks fit to relieve unemployment, and to bring to this country a measure of prosperity. Therefore, it cannot be wholly blamed for the present position.
.- There is very little to add to what has been said in regard to the extraordinary position in which Australia finds itself to-day. I endorse the remarks of the Leader of the Opposition (Senator Pearce) and say without hesitation that the Treasurer of the Commonwealth (Mr. Theodore) is adopting an entirely erroneous view of what is required to put matters right.
Only a little while ago - on the 15th April last - Mr. Theodore -wrote to the Chairman of the Board of Directors of the Commonwealth Bank a letter in which the following paragraph appeared: -
The Commonwealth Government, for its part, feels that you should be informed that the Government cannot be deflected from its definite policy by the unwarranted action of the Bank Board. The Government intends to proceed with its parliamentary programme and can only hope that the Bank Board will
. refrain from precipitating a crisis until Parliament has had an opportunity of dealing with the finance bills.
I say, without hesitation, that it would be a fatal step to attempt to gain political control of the banking institutions of Australia. Of all things, that would be most likely to accentuate the present position. I do not wish to indulge in recrimination, hut I cannot refrain from saying that every action taken by the Government, since it came into office in October, 1929, has increased, rather than lessened, the gravity of the position. I have studied its record, and cannot find one act calculated to restore confidence, especially overseas. For many years we have buoyed ourselves up with the idea that our standard of living should be higher than that of any other part of the world, that we should have what we have neither worked for nor earned. We must realize that in the existing circumstances such a policy is detrimental to Australia. It is necessary to cut our garments according to our cloth.
The attitude adopted by the Treasurer (Mr. Theodore), in 1929, unfortunately, had a greater effect upon unemployment than any other factor. He then, from the public platform, incited workmen to disobey awards of the Arbitration Court, practically telling them that it was better to starve than to work 48 hours a week. That was the beginning of our troubles; it resulted in many thousands of men being thrown out of employment immediately who were followed subsequently by thousands more. It must be recognized that we are dependent upon the assistance that we can obtain overseas to enable us to turn the corner. The method that has to be adopted to secure that assistance has been clearly stated, but it has been repudiated by the Government, although in the beginning it was approved of by the Prime Minister, who gave the assurance that it would be put into operation. No other course is open to us. I claim that any attempt at inflation, or in the direction of political control of our banking system would further accentuate the position, and that in a very short while we should find it impossible to avoid the crash that now appears imminent. It is not too late to put our house in order. The honorable gentleman who has been leading the Opposition in another place since 1929 placed before the Government, at the outset of its career, a proposition which, in effect, was identical with that recommended by Sir Otto Niemeyer. He said, “ I pledge every member of the party with which I am associated to assist the Government. We are prepared, as a party, to go into political oblivion until, with the aid of the Government, we are able to put matters right in Australia”. That offer has since been renewed and rejected.
I regret that certain statements were made to-day by Ministers of the Crown, because they were absolutely misleading. The Leader of the Senate (Senator Barnes) referred to the extraordinarily high rate of interest associated with Commonwealth loans. A list of the loans in existence to-day shows that they number 21. The interest rate of the first eleven ranges from 5 per cent, to 5-J per cent. ; that of the next four is S-J per cent, in the case of only five it i3 6 per cent. These .figures have been furnished by the stock exchanges of Australia. The statement made by the Minister would leave the impression in the minds of the people of Australia that we are paying usurious rates of interest for accommodation received when, as a matter of fact, they are very reasonable. We have been assured on numerous occasions, that investors in Commonwealth securities can safely rely on the good faith of the Commonwealth Government to observe its contract. On this point I take the following extract from a speech delivered by the former Acting Treasurer (Mr. Lyons) when an appeal was being made to the people to subscribe to the last loan : -
Nothing- waa clearer than that the contract, made on the basis of the prospectus, was absolutely binding on the present and on all future governments.
In view of that definite statement by the Acting Treasurer of the Commonwealth, how is it possible to reconcile the more recent utterances of the present Treasurer, with regard to rates of interest and other cognate matters.
– The statement? by the Acting-Treasurer was made only a few months ago.
– It was made on the 5th December last. I could say a good deal more upon this point, but I shall reserve my remarks for a future occasion.
I emphasize that the then Acting Treasurer stated definitely that a contract made in the terms of the last loan prospectus was binding, not only on this Government, but on all future Governments. Any suggestions now made that the Government may repudiate its contracts or that it will persist with its policy of inflation will merely accentuate our difficulties. Something must be done by this Government to check the drift. Unfortunately there appears to be little disposition on the’ part of Ministers to do what is necesgary. Instead the Treasurer is visiting different States and making speeches, in which he is attacking the banking institutions of this country. I take the following extract from his speech in Adelaide, as reported in the Adelaide Advertiser of the 28th of April -
The banks controlled the- monetary policy of Australia. The Commonwealth Bank was attempting as well to dictate the policy of the Government. The Commonwealth Bank and the Associated Banks are the real rulers of Australia, and will continue to be until the people take away some of their power. The Commonwealth Bank Board represents a government that has ceased to exist.
Such an extraordinary statement as that from the Commonwealth Treasurer, will undoubtedly, do much to weaken the confidence of those persons overseas, to whom wo must look for future assistance. To me it is inexplicable that a Minister of the Crown should be so wedded to the policy of the party to which he belongs as to ignore the awful consequences of its folly. The Treasurer must know that his recent speeches will increase our difficulties. I should have thought that, even if his principal aim was to fight in the interests of his party, his common-sense would compel him to refrain from giving utterance to statements that must inevitably damage the .economic and financial structure of the Commonwealth. I am glad that the Leader of the Opposition submitted this motion, and I hope that the discussion on it will be fruitful of good results.
– The reply of the Leader of the Senate (Senator Barnes) to the remarks of the Leader of the Opposition (Senator Pearce), was in the nature of a smoke screen intended to divert attention from this Government’s many acts of maladministration. The Minister mentioned what he was pleased to term the profligate administration of the previous Government. I happened to be a member of that administration and touching his charge of profligacy, I remind him that we paid into the national debt sinking fund, £14,000,000 in excess of the statutory requirement. But this is not a time for recrimination or villification. Nor is it a time for the making of election speeches, or abusing political opponents. Although Australia is facing the gravest financial and economical problem in its history, the Government, for political reasons, resolutely declines to regard the position in its true perspective. We are told, in effect, that suggestions are needed. The Government has been furnished with a number of suggestions which, if adopted, would go a long way to the solution of our manifold difficulties. Only a few months ago - to be exact, in February last - Treasury officials at the request of the Loan Council, made certain important recommendations. Under the head of “Unemployment,” they said -
The problem of unemployment is as urgent as the problem of balancing budgets, and the grievous position of many thousands of people imposes a responsibility upon governments, no less severe than the responsibility to restore financial stability. The difference between the two are these: (o) Financial stability is within the control of governments, and it is a condition precedent to the restoration of employment, (b) The restoration of employment is not directly within the capacities of governments.
I emphasize that the under-Treasurers and other officials of the Commonwealth and State Governments were specially invited by the Loan Council to furnish information bearing upon the financial position of the Commonwealth, and this board of experts, which was presided over by Sir Robert Gibson, the Chairman of the Commonwealth Bank Board, supplied information which, for political reasons, was ignored by the Government. This course must, in the end, redound to the discredit of the Ministry. It will bring about a much greater measure of suffering, and do more hurt to that section of the people which the Government professes to protect, than if the Prime Minister had stood firmly to his promise, made in August last, to institute economies in administration and in other directions, so as to ensure budget equilibrium. In paragraph 12 of the report of this special committee, there appears the following table showing the action taken by the various governments to reduce expenditure on salaries in the Public Service: -
To that table there is attached this footnote, to which I direct particular attention -
The Commonwealth has imposed special taxes at rates varying from 10 per cent, to 15 per cent, on salaries exceeding £725. These taxes are estimated to yield £6G,000 in a full year, which is approximately 0.0 per cent, on the total salaries, exclusive of those subject to rationing.
Thus it will be seen that, while the several States have been levying exactions on their public servants in order to reduce expenditure, the Commonwealth Government has been content with economies representing approximately three-fifths of 1 per cent.
Ministers have argued that honorable senators on this side offer no constructive proposals to help the Government. I have shown that many suggestions have been made. But that is beside the question. I deny that it is the duty of the Opposition to find a policy for the Government. Its policy, if it has one, changes from day to day. On one day it brings down a measure to reduce rates of interest and the next day the Treasurer declares that it is the intention of the Government to restore price levels to those ruling in 1929. It would, therefore, appear that we are to have cheap money but dearer commodities. Surely Ministers realize that they cannot have it both ways. If they insist on cheap money, they must, to be consistent and honest with their people, expect corresponding rates for commodities, unless they and their supporters desire to continue living in an Elysium of unreality.
I think I have demonstrated that the Government has had at its hand. ample material to extricate the Commonwealth from its difficulties, and that if it had been honest in its intentions and uninfluenced by political considerations, it could have done much for the good of the people. The recommendations of the Treasury experts, to which I have directed attention, represent the view of officials well versed in financial problems. Unlike representatives of political parties, they had no axe to grind. They were not dependent upon the votes of the multitude to keep them in their positions. On the contrary, their one desire was to make concrete proposals, designed to ease the burdens at present resting on the people. Unfortunately, the Prime Minister shamelessly endeavoured to prevent the information which they compiled from seeing the light of day. Doubtless, he knew full well that if their recommendations were ignored, the Government would feel the full weight of public criticism.
Queensland has furnished an example of what can be done to restore confidence and ensure a larger volume of employment. But the Treasurer has .his own ideas about these matters. He said the other day that the monetary system of the Commonwealth was not sufficiently elastic. Apparently, the honorable gentleman would like to extend the note issue indefinitely. This new prophet in the financial arena declares, further, that the country has been strangled because of its unworkable monetary system. By what does he propose to replace it? His remedy is to substitute for it a system based on no standard at all. We are, therefore, forced to the conclusion that the Treasurer’s criticism of our monetary system is simply a flank attack on our banking institutions. Actually, the Government, and not the banks, is responsible for our present difficulties. The associated banks are entitled to the support of every right thinking man and woman in this community. The suspension of the Government Savings Bank of New South Wales is a direct result of political interference. Dealing with this matter, the Bulletin, one of the leading publications in Australia, castigated the Lang Government for its mal administration and concluded with this indictment of the Premier of that State-
Liar, law breaker, disloyalist, defaulter, destroyer, he is not fit to be Premier of a self-governing British community. If he had his deserts he would be in the dock.
The suspension of the Government Savings Bank of New South Wales is a calamitous result of the Lang policy. It is not a subject for levity. Bather is it a subject for the severest disapprobation. Quoting from the finding of the Mungana Royal Commission, I find it said of the chairman of the Loan Council -
He has been found guilty of fraud and dishonesty in procuring the State to purchase the Mungana mines for £40,000.
How can we expect the people o£ our own country, let alone those overseas, to have confidence in Australia when men who do these things occupy such high places? The closing of the doors of the Government Savings Bank of New South Wales will have far-reaching effects. Prom a recent issue of a wellknown Australian journal I take the following extract: -
Millions of British working men and women, through the National Health Insurance Fund Commissioners, have had some of their accumulated subscriptions invested in; New South Wales, other States, and Commonwealth securities. The British commissioners have shown preference for long-dated inscribed stocks. One of the large items selected by them was the New South Wales Government 5 per cent. 1945-65; another, the Commonwealth 5 per cent, registered stock, 1945-75.
The statement of accounts published in 1929 by the British Minister of Health exhibits a list of securities held by him on behalf of the various national health societies, which then comprised 17,800,000 persons entitled to benefits. These millions of poor people are thus included in Mr. Lang’s “ Shylocks “ and “hungry bondholders”; it is their money which has been invested in New South Wales and Commonwealth securities. They are the folk New South Wales Labour would swindle. Thousands of them are now too old for sickness benefits, but are coming due for small contributory pensions.
In the list of securities four lines are devoted to Commonwealth, ten to New South Wales, four to Queensland, five to South Australia, three to Tasmania, seven to Victoria, and six to Western Australian stocks. It is odd that the Premier of the most favored State should be the first in the history of the Empire to play the “ scaler’s “ game.
These are the people who have invested their money in New SouthWales stock. Are they not to be considered in connexion with this destruction of Australian securities? According to the Government, the working men of England, whose savings are invested in loans are Shylocks who are endeavouring to strangle this country. It is time that the Government came to its senses and gave up endeavouring to camouflage the position by talking of a fiduciary note issue. The Government knows that it is sinking, and like a drowning man who grasps at a straw, it is grasping at anything which it thinks will keep it in office. But its efforts will be in vain, for before long it will sink so deeply that the movement to which it once belonged will never be regenerated.
. - In attempting to defend the Ministry the Leader of the Government in this chamber (Senator Barnes) has attempted to throw the blame on the Opposition majority in the Senate which, he says, has prevented the Government from remedying the troubles at present afflicting Australia. I remind the honorable gentleman that no party was ever returned to power with a greater majority than that which the present Government possessed when it assumed office. I challenge the Leader of the Senate to show that the Senate has hampered the Government in any way in connexion with any of the items of the policy with which it went to the country. It is true that the Opposition in this chamber has not readily consented to carry out the legislative programme submitted by the Government; but that is because that programme is entirely different from that which was placed before the people during the election campaign. In not agreeing to certain legislation brought forward, the Senate has saved the people from the Government. The Government should bring forward the proposals which it announced on the hustings.
– The time allowed under the Standing Orders for the discussion of this motion has expired.
Motion - by leave - withdrawn.
asked the Leader of the Government in the Senate, upon notice -
What is the total annual cost, including all charges, of producing and distributing Hansard?
– The total cost of reporting, printing, producing, and distributing Hansard during the last complete year for which records are available 1929-30- was £27,189. This includes reporting work for standing and select committees, commissions, and conferences, the value of which is not separately recorded and for which no charge is made.
Alleged Dictation by Bank of England.
asked the Minister representing the Treasurer, upon notice -
– The answers to the honorable senator’s questions are as follow : - 1 and 2. I have noticed the report referred to, but in the absence of the Treasurer, I regret I am not in a position to furnish any information in the matter.
asked the Minister representing the AttorneyGeneral, upon notice -
– The answers to the honorable senator’s questions are as follow : -
asked the Vice-President of the Executive Council, upon notice -
– The answers to the honorable senator’s questions are as follow : - 1 and 2. Yes. The statutory rule in question will be tabled in accordance with the Acts Interpretation Act.
Minister, representing the Treasurer, upon notice -
– The answers to the honorable senator’s questions arenas under:-
Minister representing the Minister for Trade and Customs, upon notice -
– The information is being obtained.
Minister representing the Prime Minister, upon notice -
– The answers to the honorable senator’s questions are as follow : -
asked the Minister representing the Minister for Home Affairs, upon notice -
– The answers to the honorable senator’s questions are as follow : -
Motion (by Senator Sir George Pearce) agreed to -
That a return be prepared and laid upon the table showing -
In respect to all loans raised by the Commonwealth since 1914 -
The total amount raised in each of such loans;
The total number of individual subscriptions by persons or bodies ;
The number of subscriptions by individual persons of amounts of £500 or less, and the total amount of such subscriptions;
The amounts subscribed by -
) Insurance societies ;
Sittmg suspended from 6.19 to 8 p.m.
Private business taking precedence after 8 p.m.,
Correspondence between Commonwealth Bank and Treasurer.
– I move -
Thatthe correspondence between the Government and the Commonwealth Bank regarding the guaranteed price of 3s. per bushel f.o.b. for wheat, approved under the Wheat Advances Act 1930, be laid on the table of the Senate, such action having already been taken by the Government in regard to correspondence between the Commonwealth Bank Board and the Treasurer with reference to the inability of the bank to make further advances to the Commonwealth Government.
I am submitting this motion in order to see if there is any reason why the wishes of this Parliament that 3s. a bushel f.o.b. be paid for wheat should not be carried into effect. Honorable senators will recollect the trouble that we have had in this Parliament in the matter of giving assistance to farmers. Last December the Government brought forward a Wheat Advances Bill, providing for the payment of 3s. a bushel to wheatgrowers; but although that measure was carried without demur by big majorities in both chambers, months have gone by and the promised payment to the wheatgrowers has not been made; nor have they been given any assistance by the Commonwealth Government. When the Acting Minister for Markets (Mr. Forde) introduced this bill in another place, he said -
The Government has examined all the proposals that have been made for assisting the wheat-grower, and has come to the conclusion that the only practicable method of helping him is to guarantee him a fair price for his wheat, having regard to the present price of wheat on the world’s market. It has decided, after very careful and serious consideration, to guarantee the grower 3s. per bushel f.o.b., equivalent on the average to about 2s. (id. at country sidings for f.a.q. wheat of the 1930-31 crop.
Effect was given to that promise by the bill, but nothing has been done to give the money to the farmers. In December last the Acting Minister also said -
Although the representations made to the Commonwealth Bank, first by myself, as Minister for Markets, and, secondly, by the Cabinet, to grant additional assistance to the wheat-growers, were not successful, it is felt that if this request is backed by honorable members of all parties, as it will be if this bill is carried unanimously, the bank will he prepared to make the necessary advances.
At that time no doubt the Government felt that if the bill was carried the money would be made available to the wheatgrowers, and I have no doubt also that at the present time the Government is willing to make the payment. At any rate, the bill was passed, and the only objection which was urged against it by myself and others was that the amount was too small. We felt that the full sum of 4s. per bushel at railway sidings promised by the Prime Minister in his “ Grow more wheat “ campaign should be paid. But we readily accepted the proposal in the bill, knowing that the farmers were desperately in need of financial assistance, and that even 3s. would do something to enable them to meet their current liabilities and put in a crop for the coming season, an urgent matter if this country was to become prosperous again. The authorization given by this Parliament for 3s., however, has not been carried into effect, and Ministers have advanced different and, I think, contradictory reasons for the failure of the Government to carry out the instruction of Parliament. A few days ago I asked the following question : -
What is the reason why payment to the farmers of 3s. per bushel f.o.b. for wheat was not proceeded with under the provisions of the Wheat Advances Act 1930?
The reply, to which I direct particular attention, was -
Because the Chairman of the Commonwealth Bank Board intimated at a conference with the Prime Minister and the Acting Minister” for Markets in January last that the bank was unable to find the necessary finance for the payment of the guaranteed prices owing to a doubt being expressed by its legal adviser as to the power of the Commonwealth Government to guarantee the bank against loss in connexion with such payments.
Honorable senators will see that there is no suggestion of a shortage of money on the part of the Commonwealth Bank or any suggestion of the Commonwealth Bank not being entirely satisfied with the guarantee of the Commonwealth Government. The sole reason advanced is that a little legal technicality stands in the way.
– It is a constitutional difficulty.
– Are we to allow the wheat-growers of Australia to be ruined because of a little legal technicality or constitutional difficulty without this Parliament having an opportunity to see whether it is one that cannot be overcome? I was in another place a few nights ago when theWheat Bill was being discussed, and I understood the Prime Minister to say that the reason for the non-payment of the 3s. was a defect in the constitution of the Commonwealth Bank. I regret that I have not been able to trace his words in Hansard, but I want to read from Hansard the reason advanced by the Minister for Markets (Mr. Parker Moloney).
– The honorable senator is aware that it is not quite in order to allude to a debate in the same session in another place.
– I looked up the Standing Order and it told me that I could not do so except by quoting from Hansard. I have, therefore, taken care to read from Hansard.
– Standing Order 413 provides -
No senator shall allude to any debate of the same session upon a question or bill not being then under discussion, nor to any speech made in committee, except by the indulgence of the Senate for personal explanations.
Before the honorable senator proceeds I should advise him to secure the indulgence of the Senate.
– I shall be very glad to have that indulgence. [Leave granted.]
The portion of Hansard of the 16th April last which I wish to read is as follows : -
Mr. PARKER MOLONEY. The plain fact is that the Board of Directors of the Bank accepted the advice of their legal advisors to the effect that the Government could not guarantee the bank against loss.
Mr. Marks. Was this opinion furnished to the Bank Board after the bill was passed?
Mr. PARKER MOLONEY. I believe so. The legal advisors of the Government were of the opinion that the Government could guarantee the bank against loss, but the bank, naturally, preferred to accept the advice of its own legal authorities.
Mr. Marks. I wish it to be quite clear that this advice was given after the bill had been passed.
Mr. PARKER MOLONEY. It was given after the passage of the bill.
Mr. Marks. Then of what use is it for us to retain the act?
Mr. PARKER MOLONEY. It is of no use at all. We are only wasting time in discussing this clause.
Mr. Forde. The Crown Law advisors still maintain that their view is correct and the view of Mr. Menzies, K.C., incorrect.
Mr. PARKER MOLONEY. But the Board of the Bank naturally accepted the advice which its own counsel gave it.
It seems that a difference of opinion between lawyers is to be regarded as sufficient excuse for shelving an act to give assistance to the wheat-growers. Inquiries I have made so far give no direct information as to what this legal or constitutional point is, and I submit that only by a perusal of the correspondence and the opinions of the legal advisors of the Commonwealth Government and the Bank Board respectively, can we ascertain whether or not the injustice which has been done to the farmers can be set right by this Parliament. We cannot assist the farmers until we know which is the correct legal opinion. The Government has advanced no other reason for not carrying the bill into effect. Shortage of money has not been stated as a reason for the non-payment. On the Minister’s own showing, the money is waiting for the farmers if only a legal technicality can be overcome. All admit how necessary it is that assistance should be given to the wheat-growers, and the only proposal the Government has put forward to give that assistance is in the shape of a guaranteed price. Are we to understand that the various proposals to give a guaranteed price for wheat have been put forward without inquiries having first been made as to whether the Commonwealth Government had the power to carry them into effect? The first proposal was for a guaranteed price of 4s. a bushel at railway sidings.
– And the honorable senator voted against that.
– Certainly I voted against it, because that legislation provided that the States should be a party to the guarantee on a most inequitable basis. I do not think that honorable senators need to be reminded of the injustice of that iniquitous proposal which dragged in poor and needy States to shoulder the major part of the burden. Mr. Scullin’s proposal was to be generous with other people’s money. He was offering to do something to help the States at their own expense, imposing the heaviest burden on the States with the smallest population and the greatest wheat production. That proposal was for a State and Commonwealth guarantee of 4s., to which the “Western Australian Government refused to be a party.When Parliament did authorize the Government to pay a guaranteed price of 3s., the Government did not say that the bank would not find the money; it said “No, a legal question prevents the guarantee being paid”. If that prevents 3s. from being paid surely it would similarly have prevented 4s. from being paid. Senator Barnes does not want honorable senators and the people of Australia to believe that the Constitution will enable the payment of a guarantee of 4s. at any time, but not a guaranteed price of 3s.
– The Government could have overcome any constitutional difficulty by providing for the payment of a bounty.
– This should have been done and would have been approved. I intend to deal with that aspect of the question. The second bill which provided for a Commonwealth guarantee of 3s. a bushel was passed by both branches of the legislature, but no payment whatever has been made. The Government now contends that the Commonwealth Bank could not accept its guarantee, and that it does not possess the constitutional power to give a guarantee acceptable to the lending authority. Apparently, its constitutional power in this respect is not acceptable to any other banks since theWheat Advances Act of 1930 clearly gave the Government power to obtain the money from the Commonwealth Bank, or from any other financial institution within or outside Australia. If it is correct that the Commonwealth Bank has no power to accept a guarantee from the Commonwealth Government, it is fortunate that the Wheat Marketing Bill was not passed seeing that a joint guarantee by the Commonwealth and the States was proposed, as it is now contended that the Commonwealth, owing to constitutional or legal difficulties, is unable to assist, the States would have been left to carry the burden.
– There was no doubtas to the constitutionality of the Wheat Marketing Bill.
– If the Minister can show why a guaranteed price of 3s. was not acceptable to the Commonwealth Bank, and a guaranteed price of 4s. would have been acceptable, all I can say is that this debate will have served a good purpose.
– The honorable senator should confine his remarks as closely as possible to the wording of the motion, which relates to the tabling of certain documents in connexion with the Wheat Advances Act of 1930.
– I intend to do so. Under the original proposal the States would have been liable for any loss, while the Commonwealth, which would have had control of a compulsory pool for three years and would have had the first call on the real money in Great Britain, would not have had any responsibility under its guarantee.
– I ask the honorable senator not to return to a course which I just asked him to leave.
– The. Wheat Advances Bill did not contain the extraordinary provision embodied in the Wheat Marketing Bill to the effect that if any part were declared unconstitutional its remaining provisions would remain operative. Why was that provision inserted? Because the Government knew the Wheat Marketing Bill was unconstitutional. I have clearly shown that if the guaranteed price of 3s. was not acceptable no other guaranteed price could, for the same reasons, have been acceptable to the Commonwealth Bank. The papers that I wish to be tabled would place the position clearly before the Senate. To-day the farmers feel that they have been deserted by the Government and the Federal Parliament. In response to the request of the Prime Minister to grow more wheat additional areas were put under crop, but legislation passed by this Parliament providing for guaranteed prices has not become operative. This is the only industry in Australia that has not been assisted, and it is the only Australian industry that has ever been successful in having a bill passed through this Parliament for its benefit which has not become operative. No attempt whatever has been made by the Government to overcome the constitutional or technical difficulties by introducing another bill providing for a guarantee under conditions acceptable to the Commonwealth Bank. In the case of the “Wiluna gold-mines, the Government very properly decided to give financial assistance to a wealthy gold-mining company to the extent of £300,000, and when doubt was expressed as to the constitutional power of the Government to give a guarantee to the company’s bankers, the Government asked the State Government to indemnify it against any loss. If there was any doubt as to the power of the Commonwealth Government to pay a guarantee in this case, the Government could have introduced similar’ legislation under which it could have obtained the assistance of the States. In the case of the Wiluna gold-mines, the company was able to receive the money from the bank before the legislation was passed by this Parliament. No protests were lodged against the passage of that legislation ; no constitutional difficulties were raised and ii, doubtful policy was not adopted. The wheat-farmers are becoming desperate, owing to the neglect of the Government to pay the guaranteed price of 3s. as approved by Parliament. Meetings of farmers have been held throughout the wheat belts in Australia, at which the Federal Government and its supporters have been traduced for their- failure to assist them. I have before me a copy of the North-Eastern Wheat Belt Tribune, of the 17th April, which shows the propaganda which is being broadcast in Western Australia owing to the failure of the Government to pay a guaranteed price. An article in that paper is headed “ Wheat Growers Union - President visits Dowerin - Allegations of Corrupt tion.” Mr. Mulqueeny, who is Foundation President of the Wheat-growers Union of Western Australia, and as a Labour candidate contested a seat in the Western Australian Parliament, said -
Senator Guthrie told us in Melbourne that the wheat-growers had been betrayed and. that our National Government was reeking with corruption. Senator Guthrie told us that he had been offered £14,000 for his vote in connection with the film industry.
– Does the honorable senator intend to connect his remarks with the motion?
– Yes. Indignation meetings were held throughout the wheat belt because a guaranteed price of 3s. a bushel for wheat had not been paid and this is a sample of the propaganda used at such meetings. If the correspondence is tabled, as I suggest, we shall probably know the reason why the farmers have not been assisted. The paragraph continues -
Mr. Mulqueeny then described the formation of the all-Australian Wheat Growers Federation.
It is a lengthy report which I shall not read, but it clearly shows the opinions held by many farmers.
– Has not that statement been denied by Senator Guthrie?
– He showed me some telegrams on the matter which in his absence I do not feel at liberty to disclose. In any case, it has been broadcast from one end of the wheat belt to the other, and indignation has been expressed throughout the State which I represent at the non-payment of a guaranteed price. If we were permitted to see the files, we should be able to diagnose the complaint and perhaps provide a remedy. One would think from the legal difficulties which have arisen over a wheat guarantee, that the Commonwealth had never previously assisted an Australian primary industry. Bounties have been paid to the gold, iron, steel, wine, cotton and other industries, and no legal difficulties have arisen. Such bounties are in operation and benefiting those engaged in the industries concerned. In no other instance has the Commonwealth Government admitted that its legislation was faulty or that its guarantee was unacceptable. But in regard to wheat-growers alone, that plea has been put forward as a reason for the non-payment of an amount which they should receive. If the prevailing financial depression had been given as the reason for the Government’s inability to assist I should not have submitted this motion in this form. Ministers have given different technical reasons; but I submit that the real reason can be obtained only from correspondence, for the production of which I am now asking. The powers of this Parliament should be fully exercised in providing a legislative remedy to remove the defects in the existing act. There must be a way open to this Parliament to see that effect is given to its wishes in regard to a guaranteed price of 3s. a bushel. I have before me a printed document comprising seven pages headed “ Financial Requirements of the Commonwealth. Correspondence between Commonwealth Bank Board and Commonwealth Treasurer as to the inability of the Bank to provide further assistance to the Commonwealth and State Governments of Australia. Presented by command - ordered to be printed.” . No fewer than 870 copies of this document have been distributed, and in consequence of the manner in which it was brought before Parliament by the Treasurer, it has been published by practically all the leading newspapers in the Commonwealth. I maintain that if the correspondence between the Commonwealth and its bankers in which it is clearly stated that no further accommodation can be made available, can be published, surely the correspondence which I mention should be. I should imagine that the correspondence which the Treasurer read would be the last which the Government would wish to have published. If my bankers advised me that I was living beyond my means, and that they would advance me nothing further, I would observe silence upon the matter; but if they wrote stating that there was a technical reason why they could not give effect to a guarantee promised to a friend or an industry, I would not hesitate to broadcast that fact; I would place the matter before my friends to see if they could help me to overcome the difficulty. The Government has adopted an entirely opposite policy; it has broadcast to the world the fact that its advances have been cm-tailed, but maintains that correspondence which states that an advance cannot be made by the Commonwealth Bank to our greatest industry, on account of legal or constitutional disqualifications, is secret and cannot be produced, notwithstanding that it is only by its production that we can obtain information that may enable amending legislation to be introduced and the guaranteed price to be paid.
I need hardly say that it is upon the wheat industry more than upon any other that the prosperity of Australia depends. No other industry in this country plays an equal part with it in providing employment for our people. To-day, throughout our wheat districts, thousands of men are unemployed and on the tramp, who would be in employment had the guarantee of 3s. a bushel been paid in accordance with the wishes of Parliament. Assistance ought to have been given to the farmer months ago. Next season’s crops are now being planted. Hundreds of thousands of acres that would have been cropped had the 3s. a bushel been paid when this Parliament gave legislative sanction to its payment, will not now be sown. Large numbers of men have been ruined in the meantime because of the failure of the Government to make the promised payment. Even now many thousands of settlers will be saved if assistance is given immediately. In these circumstances, I make no apology for having moved this motion.
Senator Sir JOHN NEWLANDS (South Australia) [8.3-1]. - I have pleasure in seconding the motion. In South Australia, hundreds, possibly thousands, of farmers have held meetings from time to time and carried resolutions regarding the prices guaranteed by the Government and its failure to fulfil its promises.
I have had forwarded to me an account of a meeting held about a fortnight ago at Manoora, in South Australia. Over a hundred farmers from the surrounding districts gathered at that centre and passed resolutions concerning the promised payment of 4s., and later 3s., a bushel for their wheat, and requesting to be informed when it was intended to make the payment. I, with others, was under the impression that when the Senate had dealt with the legislation providing for a guaranteed price the matter was entirely in the hands of the Government, and that we could do nothing further in the direction of seeing that the payment was made. It will soon be too late to plant next season’s crop, and something must be done to make the necessary assistance available. The majority of the wheat-growers are hard up, and unless they can plant another crop they will be in a still worse plight in the near Suture. The letter that I have received in regard to the meeting at Manoora states -
General dissatisfaction was expressed regarding the unfair treatment meted out to the wheat industry by both State and Federal Parliaments, and much evidence was advanced to prove favouritism. . . . No objection was raised to the principle of arbitration, nor to a balanced protective system for Australian industries; but as the Federal Parliament has persistently refused, or at least failed, to provide compensating benefits for the wheat industry - and as the wheat industry is being ruined by the generosity of Parliament to “ those that nath,” it was resolved to ask all federal members representing wheat-growers to compel attention to the urgent need for fair play and necessary adjustments by moving to suspend all tariff and arbitration advantages enjoyed by other sections of the community. The resolution dealing with this position was carried unanimously, as were the other two resolutions urging governments to introduce legislation that will secure for wheat-growers the control of the marketing of their wheat, and in the meantime, for the balance of this year, a fair price for wheat eaten in Australia.
That refers to the tax on flour, which the farmers have been advocating for a very long time. The letter goes on to say -
All the State members present promised to urge the Premier to call Parliament together at once for the purpose of introducing marketing legislation, and fixing a home price for wheat, as New South Wales has done, and before much more is given away.
The letter concludes by asking honorable senators to use their influence with this Parliament. The following resolutions were carried unanimously at the meeting:
That this meeting of farmers calls upon the Government to immediately introduce legislation to give the farmers control of the marketing of their wheat, as only by control are they likely to get fair play.
That the South Australian senators and the federal member for this district be informed that the high cost of production, resulting from the tariff and arbitration policies, has made the production of wheat unprofitable, and has already brought disaster upon thousands of wheat-growers.
That the senators and the district member be requested to take immediate steps to secure compensating advantages for the wheat-growers to offset the burdens imposed upon them.
That if early relief cannot be obtained for wheat-growers the senators and district member be asked to take steps to have the advantages granted the favoured industries and occupations suspended until such time as the necessary adjustments are made.
I have also received a lengthy statement setting out the position in which the farmer finds himself on account of the withholding of the guaranteed price promised. I hope that the Government will give these men an opportunity to do something for themselves. They do not want the dole, or any assistance other than in the direction promised. If that be given we may have in the year to come wheat that can be exported for the benefit of Australia. I hope that success will crown the efforts of Senator Johnston in that direction.
– I point out to honorable senators that the question before the Senate is that certain correspondence be laid upon the table of the Senate. I ask them to avoid, as far as possible, the discussion of the question whether money is or is not to be advanced to the wheat1growers. I have allowed the mover and seconder of the motion a considerable degree of latitude in order that they might make the position clear.
– I cannot help a feeling of surprise at the pathetic appeal which Senator Johnston has made this evening on behalf of the wheat-growers of the Commonwealth. I contrast his attitude to-night with the stand which he took on another occasion when the Government submitted to this chamber a measure designed to benefit our primary producers. There were no constitutional objections to the Government’s proposal to guarantee our wheat-farmers 4s. a bushel, yet the honorable senator voted against the bill.
– I voted against it because the Commonwealth Government expected the State Governments to bear one-half of any los3 that might be incurred.
– I fully understand the reason for the honorable senator’s penitence. There are reasons why the correspondence should not be laid on the table. “With regard to the proposed guarantee of 4s., there were no constitutional difficulties against the financing of the scheme by the Commonwealth Bank, because the State Governments were to be parties to the agreement.
– Order! The question before the Chair is whether or not certain correspondence shall be laid on the table.
– I submit, Mr. President, that since other honorable senators have been permitted to discuss the general question, I am entitled to put the case for the Government.
– I have already stated that, having allowed the mover and seconder of the motion considerable latitude in order that the purpose of the motion might be clearly understood, I wished honorable senators to confine their remarks to reasons why the correspondence should or should not be laid on the table of the Senate.
– It is only fair, Mr. President, that I should be given an opportunity to reply on behalf of the Government to the charge which has been made against it. I want my reply to appear in Hansard, side by side with the charge that has been made.
– The honorable senator will agree that the charge has been made and replied to in the Senate at least half-a-dozen times, and that reports of both the charge of the Opposition and the reply of the Government may be found in several places in Hansard.
– Very well, Mr. President. But I shall be glad if you will allow me to say only a few more words. I repeat that the constitutionality of the proposed guarantee of 4s. was not challenged. The Government’s proposal to pay 3s. a bushel was in an entirely different position.
– It would have been impossible for the bank to pay 4s. a bushel.
– It may have been difficult; but that was the Government’s proposal.
– Are we to understand that the Commonwealth Bank was prepared to finance the Government’s scheme to pay 4s. a bushel, yet could not finance the later proposal to pay 3s.?
– “We were advised by the bank that certain legal technicalities put that proposal out of court. As honorable senators are well aware, sometimes it i3 considered inadvisable, in the public interest, to lay certain documents on the table of either House. It was only through the courtesy of the Commonwealth Bank that the Government was informed of the opinion given by the bank’s legal advisers with regard to its proposal to pay 3s. a bushel. “When the papers relating to the matter came under my notice to-day I immediately sent for Senator Johnston and informed him that h’e was at liberty to peruse them. The honorable senator courteously declined, giving as his reason that he did not wish to get information which he would not be at liberty to give to his people in “Western Australia. I understand his unwillingness to peruse the correspondence in the circumstances stated. For my part, I feel that it would not be right to disclose, except privately to honorable senators, the view taken by the bank’s legal advisers. In view of what I have said, I hope that the honorable senator will not press this motion to a division, because it would be impossible, without betraying a confidence, to lay the papers on the table of the Senate.
.- It is refreshing to hear such noble sentiments expressed by the Leader of the Senate (Senator Barnes) concerning the propriety of laying on the table certain correspondence between the Government and the Commonwealth Bank with regard to the Government’s wheat guarantee proposals. His unwillingness to make the correspondence available is the more interesting, in view of the fact that recently in respect of another important matter, the widest publicity has been given to correspondence beween the Treasurer and the bank. No fewer than 870 copies of that correspondence have been broadcast throughout the Commonwealth, the reason being that the Government is using it for political propaganda. In this matter, Senator Johnston is not requesting that any private correspondence, which might be the property of the bank, shall be laid upon the table. All that he is asking is that the correspondence which actually passed between the bank and the Government shall be made available to honorable senators. If, as the Leader of the Senate has indicated, the bank intimated that a legal difficulty prevented it from financing the Government’s later proproposal to pay 3s. a bushel, I should have thought that the Government would welcome this opportunity to remove the stigma that rests upon it with regard to that matter. No one suggests that private correspondence, the property of the Commonwealth Bank, should be divulged. We are justified in assuming that the letter, written to the Government by the bank giving its reasons why it could not finance the Government’s proposal to pay 3s. a bushel is the property, not of the bank, but the Government. In supporting the motion, I wish to make it quite clear that I, and other honorable senators on this side of the chamber desire simply to obtain information, which we believe the Government has deliberately withheld from Senator Johnston. I feel sure that if the honorable senator had obtained a satisfactory reply from the Minister, he would not have submitted this motion to have the correspondence laid upon the table of the Senate. Surely, there need be no secret about any legal difficulties with regard to the Government’s proposal. If that were the only obstacle to the fulfilment of its promise, the Government should welcome this opportunity to make the correspondence available. The question is not an unreasonable one. I, therefore, trust that the Minister will not oppose the motion simply because it has been submitted by an honorable senator in opposition. This is not a party matter. It is simply a request, and a reasonable one, to obtain certain information in the public interest.
Senator Sir GEORGE PEARCE (Western Australia) [8.55]. - I should feel loth to support a motion, asking the Government to produce certain correspondence which the Government might deem it undesirable to disclose, but for the fact that circumstances connected with this matter have created a suspicion that the Government is itself to blame for its failure to honour its pledges. Prom the earliest propositions in regard to wheat marketing there has been an atmosphere of mystery enveloping its various wheat proposals. When the first scheme to guarantee wheat-growers 4s. a bushel was spoken of, we all remember how statements of a most positive character made by one Minister one day, were corrected by other Ministers the next day. These conflicting views as to certain pledges have created suspicion in the minds of the public that, for some reason or other, the Government is holding back information which the public should have. I understand that the Leader of the Senate (Senator Barnes) takes the view that if he tables this correspondence, it will disclose a legal opinion which the bank regards as its property, and should not be divulged.
– Surely it was communicated to the Government?
Senator Sir GEORGE PEARCE.I was coming to that point. It seems to me that if a legal opinion was given to the bank it would not appear in the correspondence from the bank to the Government, and be on the Minister’s file. Prom my knowledge of official correspondence I am inclined to think that the bank would inform the Government that it had received certain legal advice indicating that - the Government could not constitutionally recoup the bank for any loss that might be incurred, through the payment of the guaranteed price of 3s. I should very much doubt that the bank would quote, in the correspondence, the whole of the legal opinion referred to. If my assumption is correct, the tabling of the correspondence would not make any greater disclosure of the opinion given by the bank’s legal advisers than was contained in the speech of the Minister to-night.
– But it might be a little more understandable.
– That is so. To overcome the objections raised by the Leader of the Senate I suggest that, if the file is laid on the table, and if some of the correspondence is withheld at the request of the bank, Senator Johnston might be satisfied.
Senator Sir GEORGE PEARCE.That being so, the Minister might very well agree to the motion. Then if the bank requests that certain papers be taken from the file, Senator Johnston will raise no objection. “Would a legal opinion that the Government’s guarantee to protect the bank against loss was not constitutional prejudice the Commonwealth Bank? “Would it not rather be something which the bank would like the public to know ? The bank does not want to be held up as a bowelless corporation which has no desire to help the farmers. I cannot conceive of the bank raising any objection to the tabling of the papers. The reason given by the Minister for not producing them is not convincing; it is more an excuse than a reason. I commenced the review of this question with a prejudice in favour of the Minister, probably due to my long association with official documents. I know that there are many files in government offices which, if laid on the table of either House or of the library, would prejudice the public interest. It may be, for instance, that some person contemplates taking legal action against the Government in connexion with a contract, and arranges for some member to ask that the papers be laid on the table. He does so with the object of gaining a full knowledge of all that went on in connexion with the contract. Such a person, while not willing to lay all his cards on the table, is often prepared to take advantage of parliamentary procedure to get the Government to lay its cards on the table. In such a case I should support the Minister and agree that the papers should not be laid on the table. But that is not the position here. I cannot see how r the bank would be prejudiced by these papers being laid on the table. The Minister did not say that the Government would be prejudiced; he referred to the bank. I suggest that the motion be carried, and that the Minister extract from the file any papers which the bank considers should not be made public. To that course I, and I think other honorable senators, would offer no objection. I suggest that it be followed.
– To say that I was amazed at the explanation given by the Minister is to put the position mildly. The legislation referred to in the motion was passed in December, 1930. We went away for our Christmas vacation confident that the farmers would receive something at the hands of the Government. Later, we found that there was a general impression throughout the country that the Commonwealth Bank had either refused, or was unable, to honour the Government’s undertaking given in that legislation. The Government allowed that impression to remain. The general public believes that the Government’s intentions were good; that it was desirous of helping the farmers but was thwarted by the Commonwealth Bank. According to the Minister someone was advised by some legal gentleman that the guarantee was unconstitutional. That information must have come to the knowledge of the Government some time ago - certainly not yesterday. In other words, that information must have been in the possession of the Government at the time that it was allowing the people to understand that the bank had refused to honour the undertaking given to the farmers, or was unable to give effect to it. If the reason for not paying the advance was that to do so would be to act- unconstitutionally why did not the Government inform Parliament before Easter of the difficulty with which it was faced? Had it taken Parliament into its confidence, ways and means might have been devised to meet the situation. Instead of doing that, the Government kept quiet, and allowed the impression to remain that its good intentions were blocked by some ill-intent on the part of the Commonwealth Bank. The Government is deserving of the severest censure for not following some such course as I have suggested. The farmers of Australia have been misled in this matter. The Minister for Markets (Mr. Parker Moloney) ought to have made a public statement setting out the reasons why, after the legislation had been passed, there was no finance for the farmers of Australia. I have a great deal of sympathy with the Leader of the Government in this chamber (Senate Barnes), who at this late hour, has to make an attempt at an explanation. The Minister for Markets ought to be thoroughly ashamed of himself for the way in which he has endeavoured throughout to hoodwink the farmers of this country
Senator Sir HAL COLEBATCH (Western Australia) [9.7]. - I shall be brief. The Minister for Markets has said that the bank accepted the advice of Mr. Menzies that the proposed advance was unconstitutional. The Leader of the Senate (Senator Barnes) gave us an assurance that no such difficulty arose in connexion with another similar matter. I have among my papers in Sydney an opinion by the same Mr. Menzies, covering eight or ten pages of foolscap, which gives chapter and verse in support of his considered opinion that the advance contemplated in the Wheat Marketing Act was unconstitutional. We are now asked to believe that the bank accepted the advice of Mr. Menzies in regard to this latter matter, but rejected his advice in regard to the other matter of a similar nature. The motion should be carried in order that the matter may be cleared up. Already papers have been laid on the table of the Senate, the tabling of which I feel sure the bank did not sanction. Those papers reflect seriously on the credit of the country, and may do some harm. I refer to the correspondence which passed between the bank and the Treasurer as to the ability of the bank to continue to finance the Government. I should like the Minister to state whether or not I am correct in saying that those papers were tabled without the consent of the bank.
– No objection to their being tabled was raised.
– I doubt if the bank even knew that they would be tabled. Yet it is now suggested that a legal opinion, to what the public is entitled, cannot be laid on the table without breaking confidence with the bank. We are told that the bank obtained the opinion of a solicitor that a proposed advance was constitutional, but the same solicitor had previously advised that a similar advance contemplated earlier, was unconstitutional, and indeed, gave detailed reasons in support of thai opinion.
– In my opening speech I omitted to mention that the Minister had offered to show me the whole of the correspondence in private. I now desire to thank him for his courtesy. When that offer was made, I said that I did not care to see the correspondence in those circumstances; that unless I could show it to the wheat-growers, with whom I hoped to discuss the matter, I would rather not see it at all. I have no desire to embarrass the Government. If the Senate carries the motion, I shall be quite prepared to accept the suggestion made by Senator Pearce that in the event of the bank objecting to any portion of the correspondence being laid on the table, that portion of it shall be withdrawn from the file when tabled. I hope that the motion will be carried. I assure the Minister that my object in moving this motion is not to embarrass the Government, but to get at facts which are of great interest to a worthy section of the community, the severity of whose privations has been greatly increased through the non-payment of the guaranteed price of 3s. a bushel for their wheat.
Question resolved, in the affirmative.
.- I move -
I thank the Senate for having allowed this notice of motion to remain on the notice-paper during the last few weeks. I wish to refer to some statements made by the Prime Minister in the policyspeech which he delivered at the Richmond Town Hall, Victoria, on the 19th
September, 1929, when the right honorable gentleman was the Leader of the Opposition. One item in that policyspeech was the establishment of a steamer service between Tasmania and the mainland of Australia under the complete control of the Commonwealth. The Federal platform of the Australian Labour party contains a plank providing for a Commonwealth Line of Steamers, both for overseas and interstate trade. ‘ On my recent visit to Tasmania, I travelled extensively and met people holding all shades of opinion. During the course of my travels I met Mr. Ogilvie, a barrister, who is leader of the Tasmanian Labour party. He told me, in the course of conversation, that one of the greatest demonstrations he had ever witnessed was in the Hobart Town Hall when Mr. Scullin announced that from hundreds of platforms that night throughout the Commonwealth, Labour candidates were enunciating the plank of the Federal Labour party that if it secured a majority in the Commonwealth Parliament, a Commonwealth line of steamers would be established between the mainland and Tasmania, and that the vessels would be built in Australia. Mr. Theodore was saying exactly the same in Sydney, because Cockatoo Island is adjacent to the foreshores of the Dalley electorate. As a result of this announcement Labour secured, the return of quite a number of candidates in Tasmania, the establishment of a line of steamers between the mainland and the island having been a burning question in that State for many years.
Although I did not hear it first hand, I believe that Mr. Scullin called in the services of Mr. E. C. Riley, the Government Whip in another place. Mr. Riley was employed on Cockatoo Island in the clerical section, while I was employed on the island in the mechanical section. I understand that he advised Cabinet to consult Sir William Clarkson, a gentleman who at one time was a Rear-Admiral h the South Australian Navy, and was in command of H.M.S. Mildura, a vessel which was anchored for so long in the River Torrens that when there was occasion to shift her, the bottom fell out of her. Although there were experts on Cockatoo Island, drawn from the leading ship-yards of England and Scotland, men who had come to Australia and remained here, their advice was not sought. Later on I had the pleasure of introducing a deputation of Cockatoo Island workmen to the Prime Minister. He listened very patiently to what the deputation had to say, and then pointed out the financial position of the country and, taking hishearers into his confidence, said that the Government was sending up to the Senate a bill to provide for £18,000,000 worth of Mr. Theodore’s “fids”, and that when the farmers had got their quota, some of the “ fids “ might be made available to build ships. I am afraid he was talking with his tongue in his cheek. In the Balmain district almost the. whole of thesecondary industries are engaged in ship building. The leading establishments are Mort’s, Chapman and Sinclair’s, Poole and Steels’, and Weir’s. Cockatoo Island is also in the neighbourhood of Balmain, Rozelle and part of Leichhardt, where men and their sons and their grandsons have spent all their lives in the steel industry. At the present time they are right up against it, although at Cockatoo Island we have machinery which probably cost the Commonwealth taxpayers £1,000,000-, quite capable of building all steamers required in the Australian trade. Hoskins Limited, at Port Kembla were prepared to meet the Commonwealth Government by the provision of steel plates. They had imported a large plate-rolling mill which had been used in some of tha eastern sections of Great Britain during the war. When the Leader of the Opposition (Senator Pearce) was Minister for Defence, the torpedo boat destroyers Warrego and Torrens, were put together at Cockatoo Island. The Warrego had first been built in Great Britain and dismantled. It was subsequently reassembled at the island, and served as a pattern for the Torrens and several other river class torpedo boat destroyers which were built at Cockatoo Island. This work was followed by the building of ferry boats, after which the cruiser Brisbane was built. It was followed on the stocks by the cruiser Adelaide. Several boats for carrying grain between Australia and Great Britain were also built at the island, and the Bruce-Page Government gave the dockyard an opportunity to build the 12,000 ton steamers Ferndale and Fordsdale. That work is regarded by British shipbuilding yards as the largest venture yet undertaken by Australian shipbuilders. The plans and specifications of those vessels, which were equipped with guns so that they could act in conjunction with vessels of the Australian fleet in time of war, were prepared and the whole of the work completed at the Cockatoo Island Dockyard.
– Was the report of Bear-Admiral Clarkson on the equipment of those vessels with guns ever published ?
– I do not think so. The speed trials of the Fordsdale and Ferndale were highly successful. An average speed of 19 knots was maintained between Australia and Great Britain, this enabling them to complete the trip within 30 days. Since the work on those two vessels was completed operations at Cockatoo Island Dockyard have been practically at a standstill. The seaplane carrier Albatross was constructed at the yards, but with that exception operations have been confined to several small lighthouse steamers and general work of a somewhat unimportant character. This matter has been mentioned to the Prime Minister, and the distress experienced by the workmen living on the Balmain Peninsula was also brought before the notice of Mr. Lyons, when Acting Treasurer, and who, as the Leader of the A.F.A.L. - “all for Aloysius Lyons “ - party, is now stumping the electorates of South Australia and Tasmania. At present Cockatoo Island Dockyard is in a serious position.
– Is the honorable senator not proving that the dockyard received more consideration from the Bruce-Page Government than it has from this Government ?
– I am merely giving the history of the dockyard. Cockatoo Island was once owned by the Government of New South Wales, but, in 1913, it came under the control of the Commonwealth Government. At that time it was brought up to date by the introduction of modern machinery and plant at a cost of over £1,000,000, and it has been stated that the total cost to the Commonwealth Government was in excess of £2,000,000. Notwithstanding the huge amount of money which has been spent on its equipment and maintenance weeds are now growing in places where work was once actively undertaken, and valuable electrical and other equipment exposed to the weather is seriously deteriorating in value. Insufficient money is available to employ the necessary electricians and fitters to keep the machinery which is outside the shops in a proper state of repair.
– Why does not the federal member for the district endeavour to do something?
– I understand that he is now telling the people of South Australia something about Mr. Lang. Further, as Cockatoo Island is an important adjunct of our defence system it should not be . neglected. Some years ago 4,000 men were actively employed in the dockyard, but to-day there are only about 300 artisans and labourers engaged. The number of workmen employed from 1916 to 1927 was as follows :- 1916, 2,500; 1917, 1,800; 1918, 2,350; 1919, 4,500; 1920, 3,450;, 1921, 1,500. . . . 1927, 1,000. Although there are fewer than 550 officers and men now employed, 100 men are shortly to be dismissed.
– Does the dockyard get much private work?
– It has tendered for large quantities of outside work, but has been prevented by constitutional difficulties from entering into contracts. In the Bunnerong case the dockyard authorities submitted a tender for work which was to cost approximately £1,000,000, but their right was contested in the High Court, which held that as the dockyard was a government undertaking it could not engage in private work.
– On what work are the men at present engaged.
– Principally in the construction of aeroplane masts, masts for wireless stations and a little general work that comes from time to time. The dockyard authorities also tendered for the supply of a large quantity of 9 feet water pipes for a pressure tunnel required by the Water and Sewerage Board of New South Wales, and if the contract had been accepted, at least 100 men would have had employment for eighteen months, but the decision of the High Court in the Bunnerong case prevented the dockyard receiving the contract. From 1916 to 1927 the men employed at the Cockatoo Island Dockyard received wages amounting to over £12,000 weekly, whereas the present weekly wages paid amount to less than £3,000. In these circumstances, one can imagine the difficulties confronting the tradespeople in Leichhardt, Rozelle, Annandale and Balmain, many of whom have been compelled to go out of business. Most of the men who were previously employed in the dockyard are now depending on the dole.
– Shipbuilding at Cockatoo Island has always been costly.
– I admit that, but the standard of living enjoyed by the Australian workmen is much higher than that enjoyed by those engaged in similar work in other countries and with whom they have to compete. If shipbuilding is to be discontinued in Australia the nation will be faced with serious difficulties in the years to come. A dislocation of the ship-building industry affects also the iron, steel and other industries. Moreover, there are thousands of young men who should be learning the work of shipbuilding and its allied trades, who are now standing around the street corners in Sydney. They have no opportunities to attend technical schools or obtain practical experience in work which should be undertaken in Australia. If plans were prepared and preparations made for laying down the keel of even one steamer for service in the Tasmanian trade employment could be found for ‘400 men, who would support 1,200 dependants, for a little under two years.
– What would such a vessel cost?
– I cannot give an estimate of the cost. The authorities have pleaded with this Government to make £500 available to enable plans and specifications for such a vessel to be prepared. If one vessel were constructed the cost of subsequent vessels of a similar type would be considerably lower as the same plans and specifications could be used. But when we asked the Prime Minister to make available £500 for expenditure upon this work, he “ came back at us “ with the rejoinder that the money would be provided if honorable senators would kindly pass the Fiduciary Notes Bill. That is where the matter now rests. The re-painting of the buildings at Cockatoo Island would give employment to 100 professional painters, and painters and dockers, for about two months. Repairing and reconstructing wharfs would keep 60 carpenters and assistants in employment for about six weeks. The building of new sanitary blocks and sanitary tanks would engage 60 men of various trades for about two months. The repairing of the crane and rail tracks would keep 60 labourers employed for about six weeks. Forty fitters and their assistants would be employed for six weeks in repairing machines ; twenty plumbers and assistants for six weeks in repairing water, hydraulic and air mains; twenty boilermakers, sheet-iron workers and assistants for six weeks in repairing roofs, chimneys, &c, and 60 boilermakers, shipwrights and assistants for three months in building a new caisson for No. 2 dock. It will be seen that the above programme would afford employment to over 400 men for from one month to three months, and would benefit about 1,200 of their dependants.
In his policy speech, delivered on the 19th September, 1929, the Prime Minister, after referring to the building of steamers for the Tasmanian trade, went on to say -
Cast your minds back. Some of you perhaps will have had actual and bitter experience of it; some of you will have read of it; and others will have heard of it from the lips of their fathers - the long, stern struggle of the workers of this country in the days that preceded Federation, for better conditions, for wages that would keep soul and body together, for a little leisure, a little pleasure, a little of life’s sunshine.
I know as well as the Prime Minister what struggles the working class have had. If he is a Labour Prime Minister, if he has at heart the interests of the working class, why did he not stand up for them when he attended the Imperial Conference only a few months ago? So far as I can see, he and those who sur- round him at the present time have divorced themselves from the working class. Whether I am in this Parliament for four or five months or for ten or twenty years, I shall always be a Labour man; but I shall be in a different category from that of the Prime Minister. He can talk this bunk and tripe when he is appealing to the people, yet he can do nothing for the thousands of men and women who to-day are hungry on the Balmain Peninsula; and Mr. Theodore can tour South Australia, and other States abusing those of us who believe in effecting certain financial reforms. The machinery and buildings on Cockatoo Island can be exposed to the weather, and go to rack and ruin for all that the Prime Minister cares. He is not concerned about the struggles of the working class. The sooner he understands their position, as I know it to be, the better it will be for himself, and for those who are associated with him. He sought the opinion of Bear-Admiral Sir William Clarkson in regard to the type, and the construction cost of two vessels for the Tasmanian service, when it was well known that that gentleman’s brains were as deeply encrusted with barnacles as was the hull of the battleship Mildura on the river Torrens.
Although there is ample provision at Cockatoo Island for the construction of aeroplanes, it is the policy of the Government to have them constructed in Great Britain. I witnessed at the last Royal Agricultural Show in Sydney a display in which a bombing machine, doubtless of the latest type that has been brought from England, participated. In a casual conversation with one of the officers of the Royal Australian Air Eorce I asked whether it was possible to build aeroplanes of that type in Australia. His reply was : “ If the workmen of Australia were given the opportunity to build aeroplanes in this country, they could do so.” The firm of which one of the greatest airmen of the present generation - Air Commodore Kingsford Smith - is a director or manager, has placed orders with Cockatoo Island for the building of the wings of its aeroplanes. If such an expert has confidence in the workmen at Cockatoo Island, surely this great political joss, the Prime Minister of Aus tralia, this great Labour leader, this mountebank masquerading in the name of Labour, can come off his perch and give a practical demonstration of his confidence in the Australian workman to construct aeroplanes. He does not hold that confidence in them.
Many Australian merchants and business people, for reasons known only to themselves, place their orders in England when they require any vessels to be built. The Manly and Port Jackson Steamship Company on different occasions recently has had its vessels built in the Old Country, although for many years they were built at Mort’s Dock. It was possibly the influence of the shareholders, who wished to draw larger dividends, that was responsible for the adoption of such a policy. The same thing applies to the North Shore Ferries Company. These companies appear to overlook the fact that they have been built up by the great mass of the people of Australia.
Effective steps are taken by the United States of America to prevent any American shipping firm from having its vessels constructed in other countries. If a firm in Boston, New York or San Francisco placed an order in Great Britain, Germany, France, Norway or Sweden, it would be compelled to pay customs dues amounting to the difference between the cost of the vessel if constructed in the United States, and the price charged in the country where it was built. That is clearly set out in a letter received by Mr. S. Shearer, general secretary of the Federated Shipwrights’ &c. Association of Australia, from Mr. W. B. Hamilton, Collector of Customs, United States Customs Service, San Francisco, California, of which the following is a copy: -
Replying to the various inquiries made in your letter to N. S. Farley, of this office, under date of the 4th ultimo, you are advised as’ follows : -
The Government of the United States pays no subsidy, bounty or other unit per ton to ship-builders. The Tariff Act of 3rd October, 1913, provided for the free entry of materials for the construction of vessels and their machinery and free entry of articles for their outfit and equipment of all vessels built in the United States, either for foreign or domestic owners and for free entry for repairs of naval vessels or other vessels owned or used by the United States and vessels registered under the laws of the United States; but this provision of said Tariff Act was repealed by the Tariff Act of 21st September, 1922.
There are no concessions granted by the American Government or port authorities to vessels built in the United States excepting that the Tariff Act of 1922 provides, in section 313 thereof, that, upon the exportation of articles manufactured or produced in the United States with the use of imported merchandise, the full amount of duties paid upon the merchandise so used shall be refunded as drawback, less 1 per centum of such duties, and that “the provisions of this section shall apply to materials imported and used in the construction and equipment of vessels built for foreign account and ownership or for the Government of any foreign country notwithstanding that such vessels may not, within the strict meaning of the term, bo articles exported.” You will see therefrom that no drawback of duties is allowable to vessels built for citizens of the United States, such drawback being allowed only when built for foreign account.
No American citizen or company can place orders for the building of vessels or procure any class of vessels from another country and be allowed to engage in the coastwise trade of the United States, but such citizens or companies may purchase foreign-built vessels but such vessels are allowed to engage only in trade with foreign countries or with the Philippine Islands and the Islands of Guam and Tutuila when wholly owned by citizens or corporations organized thereunder or under the laws of any State thereof, the president and managing director of which shall be citizens of the United States. Foreignbuilt vessels registered pursuant to said provision shall not be allowed to engage in the coastwise trade of the United States, and if such vessels do engage in such trade all merchandise carried is subject to seizure and confiscation, and if any passengers are carried, there is a penalty of $200 for each passenger so carried coastwise in foreign-built vessels or in American-built vessels which may have been sold foreign and registered under a foreign flag.
Section 466 of the Tariff Act of 1922 provides that the equipments or any part thereof, including boats purchased off, or the repair parts of materials to be used, or the expenses of repairs made in a foreign country upon a vessel documented under the laws of the United States, or a vessel intended to be employed in such trade shall, on the first arrival of such vessel in any port of the United States, he liable to the payment of ad valorem duty of 50 per centum on the cost thereof in such foreign country; and then, if the owner or master of such vessel shall wilfully and knowingly neglect or fail to report, make entry and pay duties as herein provided, such vessel, with her tackle, apparel and furniture, shall be seized and forfeited.
No law has yet been passed in the
United States to foster or assist ship-building industry or the promotion of the American Merchant Marine in the way of bounty or subsidy, although this matter has been frequently discussed in the maritime journals for many years, and many efforts have been made to induce the Congress of the United States to provide subsidies or bounties for the American Merchant Marine.
You say that you understand that subsidies or bounties were paid by the Governments of Germany, Spain, France, Italy, and the United States. As explained, no subsidies have been paid by the United States. Possibly all of the other countries mentioned by you have paid subsidy or bounty. Some years ago France paid bounties or subsidies, as this office understands, according to the number of miles travelled by vessels under French registry, and, in order to secure the greatest amount of bounties, various sailing vessels travelled from France all round the world by the way of Tasmania to this port in order to get in the greatest number of miles for their bounties, but it is understood that this bounty or subsidy has been greatly modified or entirely discontinued, inasmuch as none of such vessels has arrived at this port for several years.
The following, in addition to the questions propounded by you, may be of interest: -
Section 21 of the Merchant Marine Act of 1920 provides that from and after 1st February, 1922, the coastwise laws of the United States shall extend to the island territories and possessions of the United States not now covered thereby provided that, if adequate shipping service is not provided by said date, the President shall extend the period for the establishment of such service in case of any island territory or possession for such time as may be necessary for the establishment of adequate shipping facilities, and provided further, that this provision shall not take effect with reference to the Philippine Islands until the President of the United States, after a full investigation of the local needs and conditions, shall, by proclamation, declare that an adequate shipping service has been established as herein provided, and fix a date for the going into effect of the same. In the last few months there has been considerable agitation is the United States to extend the coastwise laws to the Philippine Islands, but, so far, no action has been taken, and very recently the newspapers stated that the Filipinos have filed a protest with the authorities at Washington against putting into effect the coastwise laws of the United States in respect to the Philippines.
Many countries, possibly all, require vesselscarrying passengers to be inspected, and the carrying of the necessary equipment of lifesavins: and protection of property, but section 26. Merchant Marine Act of 1920, provides that cargo vessels, documented under the laws of the United States, may carry not to exceed sixteen persons, in addition to the crew, between the United States and any other port foreign or domestic, and between foreign ports, and such vessels shall not be held to be passenger vessels or vessels carrying passengers within the meaning of the inspection laws and rules and regulations thereunder, provided, that, nothing herein shall be taken to exempt such vessels from the laws, rules and regulations respecting life-saving equipment, and provided further, that, when any such vessel carries persons other than the crew, as herein provided for, the owner, agent or master of the vessel shall first notify such persons of the presence on board of any dangerous articles us defined by law or of any other condition or circumstance which would constitute a risk of safety for passenger or crew, and provided further, that the privilege bestowed by this section on vessels of the United States shall be extended in so far as the foreign trade is concerned, to the cargo vessels of any nation which allows that like privilege to cargo vessels of the United States in trades not restricted to vessels under its own flag, and provided further, that failure on the part of the owner, agent, or master of the vessel to give such notice shall subject the vessel to a penalty nf $500, which may be mitigated or remitted by the Secretary of Commerce upon a proper representation of the facts.
It is hoped that all of the questions propounded by you have been satisfactorily answered, but, if there is any further information you desire, it will be supplied upon your request therefor.
In case you desire to read in full the laws mentioned in this communication, it is suggested that you call upon the American Consul at Sydney, as no doubt he has full copies of the’ laws mentioned in this letter.
Collector of Customs.
To-day men and women on Balmain Peninsula are living on the dole and are being evicted from their homes. The deputation that waited upon our “ humane “ Prime Minister asking that they be given the right to work, proved conclusively that the relief work suggested at Cockatoo Island would provide employment for 400 men and sustenance for 1,200 of their dependants. Even though the farmer is affected by slackness or depression he does not neglect his ploughs, tractors and out-buildings. The Prime Minister, in his policy, speech, went on to say -
It is well that ve should not forget it. It is well that we should remember the men who fought the battle for us.
I was one of those who fought the battle for this country. I intend to fight no more battles of that kind. Continuing, the Prime Minister said -
Many of the young and happy folic who live to-day have no conception of the conditions of the past.
What I am concerned about are the conditions of the present. As a supporter of the Lang policy, and a member of the Beasley federal group, I remind the
Prime Minister, and the Treasurer as well as that monument of legal intelligence, the Attorney-General, that I and my colleagues are very much concerned about the distress and starvation prevalent among women and children in Balmain. The Prime Minister added -
One could go on telling of these pitiful things, painting tragic pictures of the past.
And so the word-spinning Prime Minister continued with his story. I tell him now that there is a real fight on, and he must stand up to it. Before he became Prime Minister he went to the coal-fields in New South “Wales and told much the same tale, making many promises to the coal-miners, who afterwards found that he had let them down. While I was Government “Whip I was reprimanded many times for fighting the case of the coal-miners on the floor of this chamber, but I saw no reason to apologize for anything I had done in the interests of the working classes. In any case, I was never happy in that position. I again appeal to the Senate to force the Prime Minister at an early date to honour the pledges contained in his policy speech with regard to the shipbuilding industry in this country.
– Is the motion seconded ?
– I second it.
Senator Sir GEORGE PEARCE (Western Australia) [10.5]. - Through the courtesy of the Leader of the Senate (Senator Barnes) in giving way to me at this stage, I am able now to move, as an amendment -
That after the word “immediately” the following words be inserted: - “to lease the Cockatoo Island Dockyard to a person or company which could curry out work at the dockyard which cannot, under the judgment of the High Court, be undertaken by the Government, and would be able, among other things,”.
The motion would then read -
– For whom would the ships be built?
– For any one who would care to buy them. But that would not be our worry. “What I am concerned about is that the Government shall not bc responsible for the building of such vessels because, as well we know, the taxpayers will have to foot the bill. This motion is just another of tha socialistic chickens that have come home to roost. I listened with great interest to all that Senator Dunn had to say to-night, and I remind him that this unemployment at Cockatoo Island Dockyard is the direct result of the policy which he espouses for the socialization of industries. The previous Government, realizing the condition into which the dockyard was drifting, invited tenders for a lease of the establishment. When it went out of office it had under consideration an offer from a person of repute and with the necessary capital to carry on the establishment. Briefly, the offer was for the payment of £10,000 a year to the Government with the proviso that, if the profits from the undertaking exceeded £10,000 a year, the Government would receive a certain percentage. I may add that, at that time the Government was losing thousands of pounds per annum in connexion with the establishment. That firm offer, to which I have alluded, was in the possession of this Government when it came into office, but nothing was done to complete the negotiations. I should like Senator Dunn to remember that if the Government of which he was a supporter had accepted the offer, the dockyard could have undertaken much of that work to which he referred to-night. As is well known, the dockyard, being a Government institution, cannot do certain work because of the High Court judgment. If, however, this Government had closed with the offer to lease that establishment, large numbers of men would have been kept in continuous employment. But this Government stands for the socialization of industry. Accordingly, it rejected the offer, with the result that although much work has been available, the Government dockyard could not undertake it. Consequently, large numbers of men have been unable to secure employment. I do not wish to see tha dockyard deteriorate, because I realize that it is a very valuable asset, especially in time of war. I could speak at great length of the amount of work done there during the war, because I was the Minister responsible for its administration. A great deal of valuable work in the fitting up of merchant ships for the transport of our troops overseas was done at the dockyard expeditiously, efficiently and at a reasonable cost. But, as time went on, it became apparent that its continuance under government control was unthinkable. After the war we were notgetting that faithful service from employees which wo had every right to expect and, finally, owing to prohibitive costs, it became impossible to do certain work there. But the dockyard is splendidly equipped, and I am confident that, in the hands of a private company it could, without any increase in the tariff, secure a great deal of work which at present is being done outside Australia. If Senator Dunn really wishes to find employment there for a large number of operatives his best course is to induce some private company to take over the establishment. I ask leave to continue my remarks at a later date.
Leave granted ; debate adjourned.
Senate adjourned at 10. 11 p.m.
Cite as: Australia, Senate, Debates, 30 April 1931, viewed 22 October 2017, <http://historichansard.net/senate/1931/19310430_senate_12_129/>.