12th Parliament · 1st Session
The President (Senator the Hon. W. Kingsmill) took the chair at 3 p.m., and read prayers.
– by leave - I wish to make a personal explanation. Last week, I spoke in the Senate on the motion for the printing of the paper relating to the conference of Commonwealth and
State Ministers, and my remarks were widely and fairly reported in the press in various States; but the headings in a section of the Melbourne press, although my views were fairly interpreted, conveyed the impression that I had made an attack upon Great Britain. Indeed, the heading in one of the papers was “ Attack on Great Britain “. I think that honorable senators who heard my speech will remember that the remarks I had to make concerning Great Britain, if they were in the nature of an attack, were an attack on the British Government and not on Great Britain itself. I tried very carefully to differentiate between the two. If the press is to maintain the attitude it has assumed in my case, it will be impossible for an honorable senator in opposing the present Government to attack it without it being interpreted as an attack on Australia. During the course of my speech, I made certain reflections on the New South Wales Government, which certainly could not be construed into an attack on the State of New South Wales. I trust that publicity will be given to my repudiation of the suggestion that I made an attack on Great Britain.
– by leave - I wish to announce that in future Senator Daly will represent in the Senate the Trade and Customs Department, the Department of the Attorney-General, and the Departments of Development, Scientific and Industrial Research.
– On the 3rd July, Senator Pearce asked the following question, upon notice : -
What is the total number of licences issued or renewed under the latest regulations under the Transport Workers Act, showing-
Number issued to the Waterside Workers Federation ;
To returned soldiers;
To other persons, for each of the ports proclaimed under the act?
I am now in a position to furnish the following reply: -
There are twelve ports to which Part III. of the Transport Workers Act and the Waterside Employment Regulations under that act apply. The numbers of licences issued at each of these ports, to the inclusive dates mentioned against each, to the three classes of persons mentioned in the question, are as follow : -
– On the 11th June last, Senator J. B. Hayes asked the Minister representing the Minister for Markets the following questions, upon notice : -
I now desire to furnish the following reply to the honorable member’s questions : -
These figures do not include New South Wales exports, as shipments from that State are not recorded in the manner indicated above. The exports of mutton andlamb from New South Wales during the three months in question were -
2.The meat in question was shipped from Melbourne, Sydney, Newcastle, Brisbane, and Rockhampton, and was consigned to- London; Liverpool; Manchester; Avonmouth; Hull; Southampton; Glasgow; Cardiff; Antwerp; Montreal; Toronto; Cristobel; Marseilles; Colombo; Port Said; Malta; Singapore; Bombay; Hong Kong; Japan; Yokahama; Kobe; Nauru; Ocean Island; Manila; Sourabaya; Macassar; Hamilton Island; Suva; Honolulu; Vancouver; Victoria, B.C.; San Francisco.
The above values are extremely low at present owing to the low prices ruling for tallow, casings, and other by-products.
Skins. - It is impossible to give any reliable estimate of the general average value ofsheep and lamb skins, as these vary in the different States, and also on account of quality and the period which has elapsed since shearing. At the present time in Victoria the following may be taken as a fair range in values: -
Sheep skins (woolly - 3s. to6s. each.
Old lambs (woolly) - 2s. to 3s. 6d. each.
asked the Minister representing the Prime Minister, upon notice -
– The Government has no further comments to offer in connexion with the matter.
Did the Minister for Markets (the Honorable Parker Moloney, M.P. ) receive from the Secretary of the Australian Wheatgrowers Federation (Mr. Stott) a letter asking for the enforcement of the Wheat Advances Act, or the payment of a substantial bounty to assist the industry?.
Did the Minister, in his reply, make the following statement : - “ As you must be fully aware of the fate at the hands of the Senate of the several measures which we introduced to provide assistance”?
Was not the bill for the Wheat Advances Act one of such measures’;
Did not the Senate pass this bill, and is it not a fact that it is to-day a statute of the Commonwealth?
If so, why does the Minister in his reply, as quoted, suggest that the Senate is responsible for the failure to give assistance to the wheat-growers ?
– The answers to the honorable senator’s questions are as follow : -
The following papers were presented : -
League of Nations - International Conference relating to Economic Statistics (November-December, 1928) -
Protocol to the International Convention.
Final Act of the Conference.
Nauru - Report to the Council of the League of Nations on the Administration of Nauru during the year 1930.
New Guinea - Report to the Council of the League of Nations on the Administration of the Territory of New Guinea from 1st July, 1929, to 30th June, 1930.
Regulations under Transport Workers Act - Particulars as to licences issued and renewed.
Sheep and Lambs exported from Australia - Particulars as to ports of export, value of skins, &c.
Air Force Act - Regulations amended - Statutory Rules 1931, No. 78.
DefenceAct - Regulations amended - Statutory Rules 1931, No. 83.
Naval Defence Act - Regulations amended -Statutory Rules 1931, No. 79- No. 80 -No. 81.
Northern Australia Act -
North Australia Commission - Fourth Annual Report, year ended 31st December, 1930.
Seat of Government Acceptance Act and Seat of Government (Administration) Act-Ordi nance No. 12 of 1931- Cotter River.
New Guinea Act - Ordinances of 1931 -
No. 17 - Liquor.
No. 18 - Explosives.
No. 19- Supply (No. 1) 1931-32.
Debate resumed from the 3rd July (vide page 3372), on motion by Senator
That the bill be now read a second time.
Senator Sir GEORGE PEARCE (Western Australia) [3.8]. - I am rather surprised that the debate on this bill is being proceeded with before the Senate has disposed of the motion submitted by the
Leader of the Senate (Senator Barnes) for the printing of the paper relating to the general plan agreed upon by the Commonwealth and State Ministers for the financial and economic rehabilitation of the Commonwealth. I understood the arrangement to be that the Senate would conclude the debate on. that motion and then proceed to the consideration of the several measures to be presented. I again remind the Leader of the Senate that honorable members on this side do not intend to allow this bill to pass its third reading until the other economy proposals have been received from another place.
I shall not occupy much time in the discussion of this bill because last week I had an opportunity to take part in a general discussion on the Premiers Conference plan. I do, however, wish to offer some observations in reply to those who, within the last few weeks, have been criticizing adversely the subscribers to the Commonwealth loans, commonly termed the bondholders. Some time ago I asked for a return giving detailed information with respect to all the loans raised by the Commonwealth Government since 1914, showing the amount raised each year, the number of subscribers, and the amount subscribed by them. This return shows that the total of cash subscriptions amounted to £416,091,637; the total of conversion applications was £214,694,970, and the grand total, £630,786,607 - subscribednot by millionaires or bloated capitalists, but, for the most part, by persons of moderate means. The return also gave the following information : -
Total number of individual subscriptions by persons or bodies in respect of such loans, 1,441,448.
Number of subscriptions by individual persons of amounts of £500 or less, and the total amount of such subscriptions in respect of such loans. Information is not available as regards conversion applications in respect of loans raised from February, 1918, to July, 1923. The information as regards all other loans is as follows: -
Note. - Savings banks have also the following amounts in Commonwealth loans, but they were not investments in ordinary Commonwealth loans, but were domestic transactions. The amounts are -
These figures are a striking testimony to the way in which the thrifty citizens of Australia, as distinguished from the wealthier sections of the community, responded to appeals made by the Government from time to time. This should not be forgotten in the discussion of such measures as the one now before the Senate, and the other legislative proposals of the Government dealing with the present situation. The bill will impose a real sacrifice upon all subscribers to government loans, and particularly upon those persons who subscribed in small amounts. They represent, I repeat, the most worthy class of our community - those people who, throughout their lives, denied themselves personal pleasures and luxuries in order that they might provide for their old age. When, during the war, an appeal was made to their patriotism to ensure the success of government loans, a not inconsiderable number of them realized upon property in order to put money into government loans. During the last few days I have been literally inundated with letters from this class of bondholder, bringing under my notice their position in connexion with the proposed conversion scheme. Their story is indeed a sad one. In many cases, elderly people, who invested in government loans, are drawing just sufficient by way of interest to enable them to live. The sacrifice which they will be now called upon to make will bring their income below the amount necessary to provide them with ordinary comforts. In many cases they will have to sacrifice even some of the necessaries of life. When one remembers the large number of thrifty people who will be so affected by this conversion proposal, one must acknowledge that they will be making a very real and substantial sacrifice. When we compare the sacrifice which the small bondholders are to be called upon ro make with that of those in receipt of salaries or pensions, it will be seen that the small bondholders will make the bigger sacrifice. I could give a number of instances in support of my contention ; but I shall not now take up the time of the Senate in doing so.
I desire now to mention briefly another matter about which a number of honorable senators are somewhat perturbed. Among the loans maturing from 1932 to 1938 are several 6 per cent, loans, one of which was floated as recently as 1928. It is said that the plan involves a general reduction of interest to the extent of 22-J per cent. There is a sense in which that claim is correct ; but there is also a sense in which it is not correct. I take it that, when we speak of a reduction of interest, we mean a reduction of interest over the period during which the country has the use of the money. If we apply that principle to the loans maturing in 1932, or in 1938, we find- that the reduction is, in fact, only 22£ per cent, up to those dates; but, as the principal will not be repaid on the original dates of maturity, but will be retained in some instances for as long as 30 years, the reduction of interest after the present dates of maturity is 33 per cent., not 22-J per cent. Representations have been made to the Government in another place in this connexion; but, so far, the Government has not been able to bring forward any proposals to ease the undoubted hardship which these bondholders will he called upon to suffer. The proposal does not ensure equal treatment to all.
In another direction the Government has attempted to avoid inequality of treatment. The loans which it seeks to have converted bear various rates of interest - per cent., 5^ per cent., and 6 per cent. In order to reduce the interest on those several loans by 22J per cent., the Government adopted the principle of capitalizing a certain amount of the 6 per cent, loans, so that bondholders who have invested in them will receive an accretion of capital as compensation for their interest being reduced to 4 per cent. Could not something of the same kind be done to bring about a result more nearly approaching equality in the case of the short-dated 6 per cent, loans to which I have referred? Could there not be some addition to their capital in order to compensate these bondholders for the tremendous reduction of interest they will be called upon to suffer - a reduction amounting in some instances to 33 per cent.? I commend this suggestion to the Government, not in any spirit of criticism, but in order that wc may not be embarrassed when appealing to the people by having” to meet the objection that equal sacrifice is not to be demanded of all. The conversion of the whole of our internal indebtedness will be a wonderful achievement, and nothing that would militate against its success should he permitted. I believe that the. loan will be a success if we can ensure equal treatment to all.
We have heard a good deal about equality of sacrifice. In this connexion I point out that the sacrifice which the bondholders are being asked to make will bo of a permanent nature. When prosperity again returns, there is no prospect of the rates of interest being raised, whereas other sections of the community will expect to have restored to them the conditions which they enjoyed in our times of prosperity. This point should be taken into consideration when dealing with bondholders.
Senator Sir GEORGE PEARCE.Nor have wages been fixed on that basis. As in the case of the hen and the egg, it is a question of which came first - the increased cost of living or the increased wages.
The only other point to which I desire to refer is the effect of these proposals on a private savings bank in Launceston. Representations have been made to me in this connexion; but as it is a Tasmanian matter I have passed the communication on to the Tasmanian senators. I think there is a good deal in the claim of this institution ; but I shall reserve any further remarks on this subject until I have heard what Tasmanian senators have to say about it, and the Government’s reply thereto. There is a great deal more that I could say; but I shall not occupy the time of the Senate further.
Debate (on motion by Senator Duncan) adjourned.
Debate resumed from 3rd July (vide page 3395), on motion by Senator Barnes -
That the paper laid on the table of the Senate on the 17th June, 1931, namely, “Conference of Commonwealth and State Ministers, held at Melbourne, 25th of May to 11th of June, 1931 - proceedings and decisions of conference ; together with appendices “ be printed.
SenatorRAE (New South Wales) [3.33]. - When I obtained leave to continue my remarks on Friday last, I had not commenced to speak on the proposals embodied in the plan adopted at the Conference of Commonwealth and State Ministers recently held in Melbourne. My remarks to-day are not intended to be lengthy, because I realize that when the various measures to give effect to the policy embodied in this plan come before the Senate we shall again have an opportunity to debate the same subjects.
I shall, however, take this opportunity to state that I am irrevocably opposed to the plan as a whole. The reduction in the rate of interest, as provided in the Commonwealth Debt Conversion Bill, seems to me to be totally inadequate, and the Commonwealth will be faced with a grave danger if the Commonwealth Debt Conversion Bill is passed in its present form. Honorable senators who have referred to the financial position of the Commonwealth from time to time have expressed the opinion that if the present depression is to be lifted, the greatest need of the day is to restore confidence. If that is so, there is a very grave danger of confidence being entirely shattered as a result of the adoption of these proposals. In the first place, it is intended to reduce the rate of interest, but in my opinion, the reduction is not sufficiently great, and secondly, the conversion should be on a compulsory basis, instead of awaiting the goodwill of the bondholders themselves to say whether they will or will not accept a lower rate of interest. I consider that if the emergency is so grave this remedy should be applied without restrictions, and that the only sane and expedient method of securing results would be to make the conversion compulsory.
Notwithstanding the ad misericordiam appeal of the Leader of the Opposition (Senator Pearce) onbehalf of the vast number of small bondholders who, he contends, will be in a precarious position as a result of the extent to which their incomes will be reduced, Ibelieve that there should be a greater reduction in interest rates. I believe that the figures quoted disclose only a very small proportion of the truth, and that a vast proportion of the bonds covering our public debt are held by comparatively wealthy persons and institutions. I am not going to attempt to go into details in this respect as it would take too much time to do so ; but I affirm that the sacrifice tobe made by the bondholders should be sufficient to enable the Government to avoid altogether an attack on invalid and old-age and war pensions. While the Opposition may rightly congratulate itself upon having secured what it has been advocating during the last twelve or eighteen months, this so-called Labour Government has disgraced itself by submitting these proposals, and I can no longer admit that there is anything of Labour in it.
– Bad as is the Government, the honorable senator’s party is worse. My contention is that there is no justification whatever for this repudiation of the promises made to returned soldiers, and I am disappointed that some of them, after having strongly opposed the reductions as being iniquitous, now seem to be falling into line with those who are advocating them, and are prepared to compromise. For my part I am not prepared to make any sacrifice in this matter. Itis an absolute act of repudiation of the meanest and most despicable kind to rob the blinded, maimed and T.B. soldiers of any portion of their pensions. I cannot conceive of anything worse, and cannot for a moment associate myself with a party that will support such an absolutely iniquitous proposal. During the war the most lavish promises were made by governments and individuals in authority to the soldiers. One could also give ample reasons of a practical character to show that there is absolutely no justification for depriving the aged, the invalid and the returned soldiers of their pensions. I wish particularly to emphasize the position of the T.B. and blinded soldiers. I suppose that there is no meaner crime possible than that of robbing the blind or the sick. What would be considered a most despicable act by an individual cannot be any more justifiable on the part of a government. While an individual may attempt to do a most villainous thing for his own benefit, there is no occasion for a government to take up such an attitude. If the rates of interest were reduced all round to 3 per cent. - it is quite possible that the rate will go even lower-
– It may come down to 2½ per cent.
– It may. Money could once be borrowed in New South Wales at 2½ per cent., and the rate of interest may again be reduced to that figure. While any physically fit person has a1s. of his own money left, it is absolute sacrilege to attack the pensions of the blind and the infirm. I cannot conceive of any government calling itself a Labour Government, consenting in any circumstances to such a vile repudiation of pledges that have been made over and over again. I am heartily ashamed of having been associated with men who are responsible for such a proposal. I am quite prepared to join with the Opposition in turning out the Government on a matter of this kind. I now owe absolutely no allegiance to it.
This plan, even if carried out in its entirety, will be insufficient to effect what the preamble to the measure states is one of its objects; that is, to avert disastrous consequences, and to re-establish the financial and industrial stability of the Commonwealth. It is most obviously optimistic to imagine that this measure will do anything of the kind. To the extent that it reduces interest, it will give the Government command of money that, otherwise, would have to be spent in that direction; but the saving made possible by the reduction of pensions of various kinds will not be any greater than could be obtained by the reduction of interest to a flat rate of 3 per cent. I consider that that is what should be done. Such action would enable the Government to dispense entirely with attacks on pensions, and leave it with a slight balance. Furthermore, if there is to be, in some degree, a restoration of confidence as a result of the reductions proposed, much greater progress in that direction would follow if the cut were made more drastic.
The grave danger that I apprehend is that when this proposal fails - as it will - to achieve anything like what is suggested or hoped, another attack will have to be made upon pensions, interest, and all other forms of expenditure. In all probability, that necessity will arise in a few months’ time. I ask honorable senators to consider the extent to which confidence would be shattered if one conversion having been made at these reduced rates, it became necessary, atno distant date, to seek still further relief in the same direction. We might as well make the repudiation complete with the one operation. While I have no fear that this Government will ever attempt to do that, I am apprehensive that, having once made an attack on pensions and on the maternity allowance, it will abolish those payments altogether should it find itself more deeply involved in financial difficulties.
For the reasons that I have given, it is my intention to oppose this plan. I know that, unfortunately, the majority of honorable senators think differently from me; but I believe that they are completely out of touch with the people of this country, who will be infinitely more ashamed of the reduction of oldage and soldiers’ pensions than of the attack that is being made upon bondholders. I am not one of those who have attacked bondholders. I, and those who think a3 I do, have had put into our mouths words that we have never uttered in that respect. I have no objection to any person making as much legitimate use, as circumstances permit, of the existing capitalistic system. I have never attacked the individuals concerned; but E do say that those of us who are physically fit, who have money to invest, or any sort of a regular income, ought to be prepared to go right down below the basic wage. So long as we have a shilling in our possession, we should refrain from attempting to rob in this way the old, the poor, the blind and the disabled members of this community. I ask honorable senators whether it is not a fact that, in any decent family, should a member of it be diseased, maimed or blind, he or she is not only treated with kindness, but is given the daintiest food, even though the other members of the family have to go without necessaries. It is considered not only a duty, hut a pleasure, to do all that is possible to lighten the burden of the sufferer. A nation should adopt a similar stand; it should see that any hardship, no matter how great it might be, fell upon the physically fit before it touched a cent of what was necessary for the comfort and the well-being of those who were afflicted. Holding that belief, I shall oppose this scheme to the fullest extent of my power. I know that the numbers are against me; but I feel from the bottom of my heart that I should be committing a crime against the community were I to support what is here proposed.
– I refute the charge of the previous speaker that the Government has been callous in its administration so far as the sick, the aged and the returned soldiers are concerned. The honorable senator said that we should be prepared to submit to any sacrifice, even to a reduction below the basic wage, before pensions of any description were attacked.
– Hear, hear!
– I am pleased that the honorable senator has said “ Hear, hear “. How are we to pay pensions except out of production; and how can we produce unless we keep our workers up to a high standard of physical efficiency? I should like the honorable senator to explain how that high standard of physical efficiency can be maintained if the workers are reduced below the basic wage.
– There are many above it upon whom a commencement could be made.
– I am replying to the statement that we should be prepared to submit to any sacrifice, even to a reduction below the basic wage, before attacking pensions.
– I did not say that there should be a reduction of the basic wage.
– I understood the honorable senator to say that a sacrifice of the basic wage would be preferable to a cut in pensions, but I fail to see how we can pay pensions, reduced or as they are to-day, unless we maintain a proper standard of physical efficiency amongst our workers. How can we maintain that physical efficiency if men’s wages are reduced? Labour economists and writers tell us that if wages are reduced below a certain point the country pays for it in the infantile and other ailments, which are the principal causes of our pension burdens.
No one regrets more than. I do that this trench of invalid, old-age and soldier pensions has to be deserted, but we have to face the position in which we are living to-day. We have been returned to power with a minority in the Senate. We introduced certain financial legislation which the Senate refused to enact.
– And so the Government surrendered to the Senate?
– It may be hard to do, but I am afraid the Government must admit that it has surrendered. It surrendered because there were 300,000 men out of employment, and because it saw the possibility within a few weeks, not of paying the old-age pensioners 17s. 6d. a week, or the returned soldier a pension 20 per cent. less than he is now receiving, but of having not one penny in the treasury with which to pay anybody. And with factions in the party, each man having his own idea as to how the nation’s wrongs should be put right, what was the Government to do? Was it to continue and allow a default, not to the bondholders, but to the pensioners and public servants? Or was it not its duty to accept the inevitable for the moment, and then, as a party, keep on fighting for the ideals for which it stands?
– On paper !
– It may be on paper, but those ideals are as firmly fixed in the hearts of those who remain solid to the movement as they are in the hearts of those who have left it. So far as I am concerned it is a bitter pill to swallow, to think that we have had to temporarily surrender portion of the ground we have held for so many years, but it is merely a temporary surrender. If the movement of which I have the honour to be a member will only become solid it can, within a very short period, recover the ground thus temporarily lost, and still reach the objective at which it is aiming. The Government has made no attack on old-age pensions, the maternity allowance or returned soldier pensions. For the moment it finds it impossible to put Labour’s policy into operation, and it has accepted the dictates of institutions which alone can say what money will be supplied to it.
– To what dictates does the honorable senator refer?
– The financial institutions of this country told the Government in pretty plain language that, unless it adopted a certain line of policy, no money would be made available.
– That is true ; the honorable senator knows that there is no money available.
– I am not contesting the truth or otherwise of that statement.
– Then why condemn the institutions ?
– I am not doing so. I am pointing out that the Government had no means of supply other than through those institutions, and that they said that a certain course of action must be adopted or supply would be cut off.
– That is a better way of putting it.
– It is a distinction without a difference. The Government honestly accepted the inevitable. It was undoubtedly a sad course of action for any member of the Government to take.
– That is an admission that the banks are running the country.
– It is an admission that under our present system the financial institutions have the power to dictate the terms under which they will finance other institutions.
– Why should they not do so?
– I am not complaining of the attitude that they have taken up in that respect; it is their prerogative under the present system; but I look forward to the day when Labour will control the Senate, and bring about a change in our financial system. I may be wrong in my conception of what would relieve the present position, but I am firmly of belief that if Labour had had a majority in the Senate, and had been able to carry its financial proposals through this chamber, invalid and old-age pensions and soldiers’ pensions would never have been sacrificed.
– But that policy would have meant the ruin of Australia.
– I do not agree with the honorable senator. I believe that we would have saved Australia. At any rate we would have avoided the need for doing the unpleasant things which the Government is now called upon to do.
– How is it that Germany and France did not succeed when they tried what Labour proposed for Australia ?
– Neither France nor Germany tried any scheme analogous to the financial proposals of the Commonwealth Labour Government.
– What was the difference between the two ?
– Our scheme was scientific; the other was not. We have a population of 6,000,000. What is the potential wealth of Australia? What are its resources? We have not yet started on their development. It is true that under other governments money has been spent on works of convenience such as the North Shore bridge and a million pound bank in Sydney, while pastoral and grazing areas have been starved; but we have merely touched the fringe of development. For example, in order to supply the fish requirements of Australia £1,500,000 has to be paid every year in wheat . and wool. We pay £40,000 a year to huy olive oil abroad, yet South Australia can produce the best olive oil in the world. We pay £160,000 for imported almonds. Fortunately, as a result of the present Government’s action, 3,000 acres in South Australia will, within the next two years, be placed under crop to supply Australia’s requirements in almonds. When we realize the potential value of our country, and realize what it is we have to pledge, it is a pity that the Senate did not permit this Government to-
– Print money.
– What is the Golden Eagle nugget now on exhibition in King’s Hall but a means of exchange? Against that nugget the honorable senator would permit any government to print as much as four times its worth in notes.
– In printing those notes, the country would have something to pledge. What would the honorable senator pledge?
– The resources of the Commonwealth. In order to put unemployed into work, I would borrow against the resources of the Commonwealth, but I would not spend the money as unwisely as many of our predecessors have done.
– One striking example is the North Shore bridge. Then we have £12,000,000 sunk in the Federal Capital.
– It was Labour that started the Federal Capital.
– I suppose that Labour, like every one else, cannot expect to go through life without committing one mortal sin, but it does not matter who was actually responsible for starting Canberra. The Sydney Bulletin pointed out a few months ago that it is not a question of whether we establish credit by the printing of notes or the borrowing of money, it only becomes inflation if we spend the money unwisely. It would not matter if we issued credits to the extent of £10,000,000 or £20,000,000 if the money were wisely spent in the development of the resources of the country in order to increase its capacity to absorb population.
– What does the honorable senator .propose to do to reduce costs of production so that we can sell profitably overseas?
– The agitation brought about by the Premier of New South Wales for a reduction of interest is one of the biggest factors towards reducing the cost of production. It is an economic fact that the interest cost in the production of wheat is greater than the wages cost. No one would be foolish enough to deny that if this country is competing with other countries the cost of production must come down; but when cost of production was talked about in this chamber a few months ago the only cry to be heard was “Wages must come down “. It was not until the Premiers Conference that we could get the State Premiers, except one, to admit that interest should come down.
– Why is the wheat industry burdened with such a heavy rate of interest?
– If I wanted to borrow £1 from the honorable senator, and I was in a state of affluence, I could bargain as to what the rate of interest should be ; but if I were up against it and the honorable senator was willing to lend the money he would strike his own terms. Of course the farmer has to pay through yie nose.
– He pays no higher rate of interest than any other person in the community.
– I am not claiming that the farmers are paying more for their accommodation from the banks than the latter would demand from other customers with a similar class of security; but honorable senators know that the hanks would prefer to advance money to build million-pound picture theatres in Sydney or Melbourne, because of the reasonable expectation of a continual turnover on the investment.
– That statement is not correct.
– It is correct. I cite as two exhibits in support of it the State Theatre in Melbourne, and the State Theatre in Sydney. I might also mention Pitt-street head office of the Bank of New South Wales. That institution and others declare that they cannot finance agricultural production, but the Bank of New South. Wales had no difficulty in finding the money to build a millionpound bank in Sydney.
– The honorable senator knows that the State Theatres in Melbourne and Sydney were built by his friends in the motion picture industry.
– I have no friends interested in the foreign motion picture industry. The two theatres which I have mentioned were built with finance from banks, which, we were told, were unable to support the Government’s pro4posal to pay the farmers a guaranteed price of 4s. per bushel for their wheat.
– How much American money is invested in picture theatres in Australia ?
– American business interests have to pay their profits into the banks, and the banks, to meet their obligations, rely upon the resources of the country. If the honorable senator wished to send £10,000 out of Australia he would, if he were wise, purchase £10,000 worth of fruit or wine, ship it overseas, and establish the necessary credit in London.
– Or else buy credit at the exchange rate of 30 per cent.
– If he bought Australian credit in England the transaction would be based on Australian production. For a considerable time now this Government has been at its wits’ end to keep its own party solid, and, at the Same time, steer this country through the financial difficulties which confronted it when it came into office. The rocks ahead, which I have attempted to describe, have to be avoided. To add to its troubles the Senate has resolutely opposed Labour’s financial policy.
– We should have entered upon a campaign to smash the banks. Then we should have had the country with us.
– The Government, faced with the alternative suggested by Senator Rae, met the situation, and is now prepared to take the consequences. I tell Senator Rae, in all sincerity, that no two men regret more than do the Prime Minister (Mr. Scullin) and the Treasurer (Mr. Theodore) the need to reduce invalid, old-age, and war pensions, and I feel sure that none will be stronger advocates than they to bring the Labour movement back over the ground which it has been forced temporarily to surrender.
I hope that the plan will be carried out, because we have to realize that while we are fighting for the maintenance of decent conditions in this country, over 300,000 of our people have no standard of living at all.
– And these proposals will not give one of them a job.
– I am hoping that they will. At all events, no relief can be given to them while we are divided in our own ranks.
– Senator Rae does not now belong to the Labour party.
– I believe that every man who stands for Labour’s ideals is still a member of the movement. I, therefore, still consider Senator Rae as a Labour representative.
– I doubt it very much.
– The honorable senator is entitled to his opinion. I believe that the day will come when the faction which Senator Rae represents will be fighting side by side with us for the ideals and aspirations of the Labour party. Meantime, the imperative needs of the moment compel the Government to go right ahead with its programme. I trust that those measures which will come before the Senate within the next few weeks will not be treated capriciously by Senator Rae or any other member of this chamber, but that all honorable senators will at least credit the Government with honesty of purpose in submitting its proposals to meet the present situation.
.- It is not a pleasing duty for any member of this chamber to support these economy proposals. We must, however, realize that if these necessary steps are not taken, there is a grave risk that there will be no money with which to meet the ordinary administrative costs of the Commonwealth. Even Senator Rae will acknowledge the truth of this statement.
– I do not ; I think it is a big bluff.
– Surely Senator Rae knows that if these economy measures are not adopted, our invalid and oldage pensioners, instead of receiving 17s. 6d. a week, may get nothing? I suppose it is of no use to refer to the history dealing with the cause of the present depression. All I need say is that no particular party can be held responsible for what has happened. Governments and private individuals have, for the last 25 years, been spending money lavishly. As a nation we borrowed freely and spent the money upon so-called reproductive works which proved to be not reproductive in the truest sense of the word. Apparently, all of us have not yet learned the lesson, because I heard Senator Daly this afternoon say, that even the fiduciary note issue which this Government endeavoured to foist upon the country recently, would have been expended upon what he termed, “ reproductive “ works. Where could such works be carried out?
– I could guarantee the expenditure of £2,000,000 on reproductive works in the south-eastern district of South Australia.
– Wherever we care to look in Australia, we may see all the evidence we require of the futility of expending so much government money upon public works. It is to be found in numberless public buildings, schools, &c, scattered throughout the Commonwealth, many of which will never return one penny on capital cost. It should be noted also, that Labour governments have been the greatest sinners in this respect. The renowned, or, as some of us would say, the discredited Mr. Lang has been responsible for a greater expenditure of public money in this way than any other Premier, and Mr. Lang, I remind honor able senators, is a man whom Senator Rae would bow down to and worship.
– Would I?
– No one would expect Senator Rae to endorse any reasonable proposal, because he belongs to a Russian organization which believes in the destruction of all property.
– Do I?
– According to newspaper reports, Senator Rae is a member of what is known as the “Prisoners Aid Society “ which is an offshoot of the Russian Communistic party.
– Is it?
– This being so, we should not expect Senator Rae to support the proposals now before the Senate. But all this is by the way.
Senator Daly this afternoon declared that the lavish expenditure, as he termed it, of the Bruce-Page Government, was largely responsible for the present depression. His allegation is not supported by a return published in the Victorian Labour newspaper, the Melbourne Age, a few days ago, showing the total expenditure of successive Commonwealth governments since the inauguration of federation. I shall not weary honorable senators by quoting extensively from the return, but will direct their attention particularly to the figures relating to expenditure immediately prior to the accession to office of the BrucePage Government, and the expenditure incurred during the regime of that administration. In 1921-22, when the Hughes Government went out of office, the expenditure was, in round figures, £78,000,000. In its first year, 1922-23, the expenditure of the Bruce-Page Government totalled £70,000,000; in 1923-24, and in 1924-25, it was £72,000,000; in 1925-26, it was £64,000,000; in 1926-27, it was £62,000,000; in 1927-28, it was £68,000,000; and when it went out of office in 1929-30, the total was £66,000,000, or £12,000,000 less than the expenditure of the Hughes Government in 1921-22.
The artificial conditions that have obtained in industry for so many years are chiefly responsible for the present depression, and I charge the representatives of Labour, and especially the trade union secretaries, with largely contributing to many of our difficulties. Production costs in all industries have been increased to such an extent that it is impossible to export manufactured goods, and it is almost impossible to export profitably the products of our primary industries. As I have said, we have been living in an artificial age in which the secretaries of trade union organizations and other so-called advocates of Labour, have proved themselves to be the worst enemies of the workers. I have been a worker, and I know as much about this matter as does Senator Rae. If I were a worker to-day I should say, “ Save me from my friends “. During recent years representatives of trade unions have preached the doctrine of strikes, discontent, class hatred, job control, and of doing as little work as possible, with the result that Australia has found it practically impossible to produce anything profitably. By following that advice, and indulging in a policy of over-borrowing, we have got ourselves into difficulties.
– As a nation we pay the highest rates of interest of any nation in the world.
– And we pay the highest average wages.
– In addition the present Government has put into operation the policy of the prohibition of imports. There is no virtue in restoring our trade balance by stopping imports; such a policy is merely an expedient. The only effective way to restore our trade balance is to increase our export trade.
– And buy olive oil from France?
– We must cease imposing embargoes on the products of other countries. The embargo on the importation of sugar-
– Let us start with carbide; or we might first remove the duty on New Zealand potatoes.
– It would appear, Mr. President, that I have touched on a controversial subject. I shall not pursue it further.
In his speech the other day, Senator Duncan tried to throw on others the responsibility for our present difficulties. I submit that our troubles are of our own making, and I regret that an honorable senator should advocate that an appeal be made to any other country to help us out of troubles which we have brought on ourselves. The British taxpayer is the most heavily taxed person in the world. Why should we call on him - on the British workman with his 30s. a week - to carry our burden? What have we done that we should expect such favorable treatment from them; what have they done to us that we should impose such burdens on them? The suggestion of the honorable senator is ridiculous; it amounts to a shirking of our responsibilities; indeed, it is the policy of repudiation espoused by Mr. Lang. We have got ourselves into difficulties, and we must get ourselves out of them. I believe that we can do so, and that by shouldering our responsibilities we shall again bring prosperity to our people.
The proposals before us are part of a plan to restore confidence, and to get back to the road that leads to prosperity. I believe that that road is a long one. Nevertheless, the majority of the people of this country are prepared to tread it ; the generalbody of workers are not squealing because of the burden they are being called upon to bear. Indeed, the community generally is cheerfully accepting the responsibility of putting matters right. I regret as much as Senator Rae does the necessity for reducing old-age pensions.
– I say that there is no necessity to reduce them.
– A reduction is preferable to there being no pension at all. Similarly, I regret having to reduce soldiers’ pensions ; but it must be done.
I have said that the community generally is prepared to make a sacrifice in the interests of the nation; but there is one privileged section which is offering the strongest objection to any entrenchment upon its rights and privileges. I refer to the postal officials. The Postal Department is permeated with extremism and revolutionary ideas. The employees of that department publish their own journal, in which great hostility has been shown to the government of the day. During the régime of the Bruce-Page Government that journal disseminated propaganda which would have shamed even the Labour party. Coming from a body of government servants, it was disgraceful. I have here a letter from a number of associations whose members are sheltered behind regulations and superannuation enactments, and enjoy better conditions than any outside workers in this country. It reads -
Dear Sir. - We beg to advise you that the following resolutions were adopted unanimously at a crowded meeting of over 700 Commonwealth Public Service employees held in Sydney on Monday night last, 29th June: -
That- (1.) This mass meeting of Commonwealth Public Service employees enters an emphatic protest against the application of the proposed New South Wales emergency taxation, or the unemployment relief tax to Commonwealth Public Service employees within such State as -
It will defeat the spirit of equality of sacrifice by the imposition of dual taxation of Commonwealth public servants;
It infringes the decisions of the recent conference of Premiers where it was decided that economies should be spread evenly over the entire community;
It is a repudiation of the spirit of the decisions of such conference that the unemployment relief tax should form part of the proposed economics ;
It is a contradiction of the avowed intention of the Premier of New South Wales that all sections of the community should make equal sacrifice. (2.) That we urge the New South Wales State Government to exempt Commonwealth Public Service employees from the incidence of the proposed emergency taxation or the unemployed relief tax, and
That we call upon the Federal Government to protect Commonwealth public servants from the harsh treatment of overlapping taxation by Federal and State Parliaments.
You are invited to give immediate effect to the wishes of the mass meeting.
The following Commonwealth Public Service Unions were officially associated with the mass meeting (All New South Wales branches) : - Amalgamated Postal Workers Union; Commonwealth Public Service Clerical Association; Australian Third Division Telegraphists and Postal Clerks Union; Federated Public Service Assistants Association ; Australian Fourth Division Telegraphists, Postmasters, and Postal Clerks Union; Fourth Division Officers Association of Trade and Customs; Commonwealth Public Service Artisans Association; Line Inspectors Asso ciation (Postmaster-General’s Department) ; Commonwealth Telegraphic Traffic and Supervisory Officers Association; Commonwealth Telephone Officers Association; Australian Postal Electricians Union.
On behalf of the Organizing Committee,
It will be seen that these gentlemen are prepared to allow the pensions of invalids, soldiers and aged persons to be reduced; but that they protest emphatically against any reduction of their own emoluments. Not only so, but they also object to having to pay State taxation which every other worker in the State has to pay. I regard as brazen effrontery the paragraph which reads, “ You are invited to give immediate effect to the wishes of the mass meeting.” It may interest honorable senators to know the reply that I sent to that communication. On the 4th July, I wrote in the following terms to Mr. Ernest Smith, the chairman of the organizing committee of the associations, which carried the resolutions I have read: -
I am in receipt of two separate communications from the Commonwealth Public Service Organization, New South Wales branches, conveying two resolutions carried at a meeting held on the 29th of June, one of which records uncompromising hostility to the proposed reduction of public service salaries, whilst the other emphatically protests against certain New South Wales taxation having application to public servants, and calling upon the Federal Government to protect them against State taxation. In comparing these two resolutions I am forced to the conclusion that the decision displayed a lamentable lack of public spirit and a selfishness which I trust is not shared by any considerable section of the rank and file of the organization. It is to be regretted that such drastic economies are necessary, but, unfortunately, the condition of the Commonwealth demands sacrifice from every section of the community, and why federal public servants, enjoying conditions far superior to any unsheltered worker should escape their fair share of the common burden when thousands are workless and in destitution, is unexplainable on just grounds. It is further specifically asked that federal public servants should be protected from State taxation. Every other taxable worker has to pay both - then why ask that those much better off should escape? I am prompted to ask from what source is it expected that money should be found? Must it come from the pockets of those who are suffering hardship asa result of unemployment and from slackness of trade, from the hard pressed primary producer, or is it to be begged, borrowed, or manufactured so that a favoured and sheltered section might escape altogether the common burden? Are old-age and invalid pensioners, and crippled, soldiers to suffer reductions that public servants may go free from any contribution towards the rehabilitation of their country?
This is what public servants are asking, and I am amazed and disappointed at such requests which display such utter selfishness and disregard to the welfare of others. Reduction of wages is not a pleasure, but in this crisis it is a duty which we must perform and the only thing we can do. is to spread the burden as equitably as possible. I regret that I am unable to accede to the request that we “ give immediate effect to the wishes of the mass meeting “ as I fail to see any justice at all in the claim as public servants are already awl,1 v protected and by comparison, very favorably treated. I should be glad to see the day come when the privileges now taken away may be restored but until then, all must share equitably in the common sacrifice necessary to enable that to be done.
I place on record in Hansard the letter from these postal employees in order to show the utter selfishness of men in sheltered occupations in desiring to retain their well-paid positions, and at the same time to be relieved from State taxation. “We have to face the position which confronts us; we must pass through the valley of the shadow of sacrifice ; we must get back to the basic truth that hard work and sacrifice are essential to national progress and character building. Until we realize that we have been living in an artificial age, and change our habits, we shall make no progress towards the goal of prosperity which we are all anxious to reach. Although the proposals before us are distasteful, we on this side realize that they are necessary. “We accept these proposals in the belief that they will lead us out of our present difficulties to a return of the prosperity which we once enjoyed.
.- I wish to refer to the remarks made by Senator Rae on Friday last regarding the Queensland pastoral industry in an endeavour to show some of the causes which have led up to the depression which Australia is at present experiencing. Owing to the low prices prevailing for wool, those engaged in the pastoral industry have for some time been experiencing considerable financial difficulty. The position in Queensland became so acute that a royal commission consisting of men well acquainted with the industry and the productivity of the land was appointed nun to inquire into the pastoral industry. After conducting a thorough investigation, the commission reported that the price then being obtained for wool was insufficient to cover expenses, and recommended that rents should be reduced in order to assist the industry. At that time the pastoralists in Queensland were operating under an award of Mr. Justice McCawley, and were paying the highest rates for shearing that were being paid in any part of Australia; hut it was understood by both parties that if the price of wool fell the whole position would be reviewed. Later, when prices dropped, an application to the court for a reduction in wages was granted. On Friday last Senator Rae denied that he was responsible for instigating a strike of shearers in Queensland last year, although he admitted that he had been requested to assist those who were opposed to a reduction in the shearing rates. Senator Rae promptly answered an “ S.O.S.” message to come to the rescue of the Queensland shearers, and in his efforts to assist them travelled over a portion of Southern Queensland, but did not proceed further because of the cold reception he received.
– That is another piece of news.
– The information I received was that Senator Rae reached “Winton, and there and in other places could not get together enough people to hold a public meeting. At certain meetings the honorable senator indulged in a good deal of talk, but his efforts only resulted in bringing disaster and starvation to a large number of Queensland shearers and their families. Their places wore taken by shearers from the south. Senator Rae, who was then supporting members of the Pastoral “Workers Union, told them that if they only remained firm they would eventually defeat the pastoralists and the members of the Australian Workers Union.
– Did the honorable senator hear me?
– I read a report of the appeal made by the honorable senator at Toowoomba and other centres.
– The reports were faked.
– It is not my intention to go into details with respect to the claims of the rival organizations, but it was well known that it was impossible for the pastoralists to continue to pay the rates in operation prior to a reduction being made. Senator Rae, with his knowledge of the industrial position, must have known that it was impossible for the members of the organization which he represented to obtain the rates they were demanding in face of the opposition of the men from the south who were members of the Australian Workers Union. In fact, the honorable senator was the worst enemy that the Queensland shearers could have had. I do not question his honesty of purpose; but ever since I have known him, and I suppose I have known him longer than any other honorable senator, he has always been regarded as a rebel. According to Senator Rae,the Australian Workers Union - an organization of which the Vice-President of the Executive Council (Senator Barnes) is the president, and which also has a stalwart supporter in Senator Dooley-has served its purpose, and should be wiped out. The effort of Senator Rae on that occasion in endeavouring to assist the strikers resulted in the ruination of many of the men whom he was supposed to help. The honorable senator, who said that he was strongly opposed to a reduction in invalid, old-age, and war pensions because of the hardship which would be inflicted upon many deserving persons, apparently overlooks the fact that he was instrumental in imposing similar hardships upon many men and their families in Queensland who would have been unable to carry on had it not been for the assistance they received from the storekeepers.
– The honorable senator must connect his remarks with the subject-matter of the motion.
– I am endeavouring to show that our present financial position is due to some extent to industrial troubles. The honorable senator also said that, “ What we have we hold “ ; but we can hold only that which we have. During practically the whole of the time this Government has been in office Parliament has been devoting its time to industrial matters which are of major importance.
Senator Rae, who advocates the Soviet system of government, concerning which he has spoken on numerous occasions, may have seen the latest statement of Stalin concerning the socialistic system. I should like to know whether the honorable senator endorses the sentiments expressed by Stalin in the following paragraph
– Has it a bearing on the motion before the chair ?
– It has a bearing on the subjects covered by the motion. If the trade unionists of Australia considered our industrial problems from the same view-point as Stalin, the solution of many of our problems would be easy. The paragraph reads -
Moscow, Sunday. “ It is necessary absolutely to end equality of pay for skilled and unskilled labour,” declared Stalin, addressing the Industrialist Conference where he foreshadowed changes in the complexion of the Soviet ideal. “The wage system compensates for skill in every industry. Every factory has advanced groups of skilled workers, who can be retained only by promotion and wage increases. The Soviet worker who is not suffering from unemployment is free from the capitalistic yoke, the master of his own fate, and demands security in all his material and cultural needs. We must fulfill that demand.”
Stalin pointed out that no ruling class can manage without its own intelligentsia, and urged that energetic, capable and gifted nonparty workers should be more boldly promoted to the leading positions.
The attitude towards the old bourgeois industrial intelligence must be changed. Whereas previously these had been shown the iron fist, they must now be attracted and oared for.
He added that it was necessary that the Soviet corporations should be changed from collective to individual administration.
I support the sentiments expressed by Stalin in that message, and I am sure that they meet with the approval of all who take a real interest in industrial questions.
The Leader of the Opposition (Senator Pearce) quoted from a table showing- the number of subscribers to various classes of Commonwealth loans. He gave the number of persons holding bonds to the value of £500 and less in the various loans covered by the proposed conversion scheme, and said that if the rates of interest are reduced, many small holders will be compelled to make a heavy sacrifice. Honorable senators opposite should realize that 90 per cent. of the funds of life insurance companies, friendly societies, and other such societies are provided by the wage-earners, or what may be termed the middle class of the community. The money deposited in our savings bank is the property of the wageearners, and a large proportion of’ this is also invested in government loans. I know that several large investments are made by associations other than those of the kind I have mentioned, but it can safely be said that the bulk of the money invested in government loans is subscribed by wage-earners. Apparently those who refer to the bondholders in disparaging terms overlook the fact that a majority of them are comparatively poor people.
At present Australia is experiencing an exceptionally good season. But in spite of that we have in our midst between 300,000 and 400,000 unemployed, while, in addition, there are thousands of others who are on the bread line. Any thinking person is driven into a corner when he endeavours to account for such a state of affairs among a population of 6,500,000 people occupying a huge continent with all the assets that Australia possesses.
– I admit that it is world-wide. A peculiarity of the situation is that the problem of production and distribution has been solved ; we can now produce and distribute more than we require.
– Distribution costs more than production.
– I repeat that the problem of production and distribution has been solved. What we are up against is the solving of the problem of exchange values, the exchange of one article or one person’s labour for that of another. I have read as much as the average layman on the question of finance and economics for quite a number of years, and have come to the conclusion that this is one question that is almost impossible to solve. Every economist has a different view regarding the value of exchange. The solving of this problem would bring us nearer to that state for which Senator Rae is working.
– Karl Marx solved that 80 years ago.
– At the present time the question is one between gold and silver. Some people affirm that gold is the proper medium of exchange, while others place silver in that category. The attempt that is being made to get gold into the East, with the object of replacing the silver currency, is causing nothing but starvation and poverty. Then there are countries like theUnited States of America, France, and the Argentine, who keep all their gold locked up. Not being liquid, it is of no benefit toany one. I might liken gold to the wheels of commerce. At the present time it is useless because it is not kept moving. Any person who is acquainted with the East knows that all trading is carried on by means of a silver currency. Instead of being placed in a bank, it is hoarded in houses or carried round on the person. But those conditions are disappearing, and starvation exists everywhere. I sincerely trust that out of this world trouble will be evolved some scheme under which the value of exchange will he placed on such a basis that it will be fair to the producer.
It has been said that the depression through which we are passing will bring home to us many truths, and that eventually benefits to Australia will accrue from it. I sincerely hope that that will be the case. But I remember very acutely the trouble through which the nation passed in 1893, when conditions were nearly as bad as they are at the present time, but were more or less local, not world-wide. What lesson did we then learn? Those who passed through that trouble learned the lessons that it taught, but the generation which was then growing up was unimpressed. They are the people who have been responsible for the boom conditions that have been maintained during the last few years. When we come out of this trouble exactly the same thing will occur ; another generation will grow up and forget all about it. They will have to learn their lesson in their own way, just as we have learned ours.
There has been a great deal of condemnation of governments on account of the expenditure that they have incurred. 1 have been long enough in public life to know that any government which does not borrow and spend soon goes out of power. In a democracy, no government is strong enough to resist the pressure of the people when expenditure is demanded. Senator Daly, this afternoon, said that had he had control of the expenditure, he would have spent wisely. 1 have heard that tale put up before by politicians and leading public men. In a democracy you have to do as the crowd wishes, or make way for some one who will. For two or three years before Mr. Bruce was defeated he went round Australia pointing out that the cost of production was too high.
– Yet he continued a policy of importing.
– My point has nothing to do with either freetrade or protection. The Labour party, including Senator Daly, denounced Mr. Bruce and his Government, and argued that they wished to reduce wages. Mr. Bruce was opposed to the reduction of wages, and stated so many times; but he directed the attention of the people to the fact that the nation was living beyond its means; that the cost of production was too high; and that, unless care was exercised, a collapse was inevitable. I do not think that he or anybody else foresaw the severity or the widespread nature of that collapse when it came. Warnings were also voiced in other quarters. Australia was visited by a party of business men of ability, standing and world-wide renown, called the “ Big Four “. What effect had their warnings on the people generally ? They were altogether too mild in their criticism of our habits. But, reading between the lines, no one could ignore the gravity of the situation that they forecast. Then there was Sir Otto Niemeyer. He was the guest of the Government, yet was abused from one end of the country to the other by Labour ‘ men. The most insulting remarks that Ministers could think of were made regarding him on the public platform. It was not until he had left Australia that one Minister had the courage to explain that he had been asked by the Government to come here. In a general way, Sir Otto Niemeyer recommended what is now being done. The . Leader of the Opposition in the House of Representatives, discussing the last budget, put forward a programme practically identical with that. which is now proposed. Every person of common sense realized then that we were facing a crisis, from which there was no escape.
– Does the honorable senator say that the Leader of the Opposition in another place suggested a reduction of interest?
– He did not make that suggestion, probably because he thought that that matter was best left alone. But what does all this talk about interest signify? We have asked the public to give us their money so that we might carry on public works, and we have spent that money foolishly. The cost of practically all our public works has been too high, and their revenue-producing qualities have been destroyed by the existing depression. Senator Daly himself referred to a building that was erected by the Government of New South Wales at a cost of £1,000,000. Why was that work undertaken? It was not necessary. Although it is a credit to Sydney, stupidity was exhibited in embarking on it. The majority of Australian industries have been enabled to get on their . feet by the employment of borrowed money; but the borrowers could afford to pay the interest involved, because they were placed in a position to produce at a profit. There are few businesses in Australia that are not carried on by means of overdrafts; but that system is profitable to the proprietors, because it enables them to make articles from which they can obtain a return. Australian Governments, however, have stupidly spent money upon works that have cost so much that there is no chance of their proving reproductive. Take our railways as an example. We have spent, as a nation, more upon railway construction than, possibly, any other country, and have thus opened up the whole of the Commonwealth. The consequence ia that there is not a railway system in the States that pays. We have the land, and we have many people settled on it, but what are they getting to-day? It does not pay to produce wheat. In Queensland, railways were run out hundreds of miles towards the west, and at one time they paid because wool was at a price which enabled it to be produced at a profit. Freights then charged were much less than they are to-day, but the lines paid so well that the State extended them. To-day, however, it does not pay to grow wool at the price obtainable for it, the railway freights are high, the staffs are over-manned, the wages of the railway employees are high, and the Queensland lines are no longer paying. I take railways merely as an example of many other industries.
Quite recently, a letter appeared in the Brisbane Courier, in which the writer pointed out that after spending 60 years in Queensland, and saving a couple of thousand pounds, he had drawn it from the savings bank and invested it in government loans so that he and his wife could live on the interest without applying for an old-age pension. This thrifty man was actually earning on his bonds £4 less than the pension paid to a married couple who had been thriftless, and had saved nothing. Thousands of old-age pensioners have been brought into their present position through disease, distress and so forth, but hundreds of them are drawing pensions because of their own carelessness;because they have spent their money instead of being thrifty like this old pioneer whose plight I have mentioned. There are hundreds in the same plight because they have been thrifty; having saved against their old age, they are now to be sadly affected by the reduction of interest proposed. I am not finding fault with the reduction of interest; it is necessary; there is no escape from it. But if old-age pensions are to be cut down, it must not be forgotten that 17s. 6d. will now purchase more than £1 purchased a couple of years ago.
We have heard a great deal about equality of sacrifice, and another claptrap term frequently employed is “ equal hardship “. There is no such thing as equality of sacrifice, and the phrase “equal hardship” is all so much humbug. Every one must make a sacrifice, but it cannot ‘be made equal. Some will suffer in one way and others in another.
– “We can be fair.
SenatorREID. -We can try to be fair, but we cannot make the sacrifice equal; nor can we bring about equality of hardship.We are governed by the law of economics. All the talk in the world will not convince me that the basic wage is not an uneconomic factor. There can be no basic wage, unless the recipient has earned it. I have no objection to the payment of the basic wage, if it can be done; but the philanthropist who gives a man something he has not earned is burdening industry, and inflicting a hardship on some other person, who has to work harder in order that it may be paid. He is making it harder for those on the bread line to get away from it.
– How can they pay the wages in the sugar industry?
– Just as they do in any other industry so long as it brings in money. I understand that 80 per cent. of the money earned by that industry is absorbed in the payment of wages. But whether the men engaged in the sugar industry get high wages or not, the economic law which affects all industry will affect it in the end. We cannot stop the working of economic law. The basic wage is an uneconomic factor in production, ‘because it means that if a man is not earning the wage he is receiving, some one else has to be impoverished in order that he may be paid.
– That is exactly what applies to the sugar industry.
– That industry will be affected like other industries. No industry can be bolstered up for all time.
– Why did not the honorable senator say so a few weeks ago?
The PRESIDENT (Senator the Hon. W. Kingsmill) . - I ask honorable senators not to conduct conversations.
– I sympathize with honorable senators from Tasmania who were not in the chamber when the division took place on the sugar question; naturally they are very sore about it, but I said then what I am saying now.
This afternoon a resolution agreed to by civil servants in Sydney was quoted. Meetings of protest have not been held in any other city of the Commonwealth, and it is rather peculiar that this resolution should have been carried at a meeting in Sydney, above all places. At any rate, the spirit of the resolution and the language used are typical of Sydney and not of the Commonwealth Public Service. I meet a great number of public servants in Canberra, and the majority I find, although regretting the need for a reduction in salaries, realize that it is inevitable. They realize that the Government has not the money and that public servants must make a sacrifice as well as all other sections of the community. One can see from a glance at the balance-sheet of almost every private enterprise that few industries in Australia to-day are paying. In nearly every business establishment, the employees are being rationed or the staff is short-handed. Rates fixed under arbitration awards are all. coming down. While civil servants in Sydney, a sheltered class in constant employment, with no uncertainty about the morrow, are asking us not to carry out these proposed reductions, there are thousands of people in employment outside the Service, in constant fear of what the morrow will bring forth.
To show the position in which Australia is at the present time, I quote the following press telegram from Perth: -
Giving evidence before the Farmers Disabilities Commission, Mr. E. A. McLarty, managing trustee of the Agricultural Bank, the Soldiers Settlement Scheme, and the Industries Assistance Board, estimated that the total debt of the 20,559 farmers in the State was £30,000,000. He said that if prices continued at the present level it was impossible to see success for any farmer.
That is typical of the position of nearly all the wheat-growers of Australia. How can these men get out of debt unless the cost of administration and the cost of living come down? That telegram is an answer to the claim of the civil servants of Sydney. Very few industries in Australia can export goods and bring money into Australia. While this .depression exists, public servants must submit to the sacrifice required of every one in the community. We are all in the same boat. It is most unfortunate, but I do not ‘wish to make political capital out of the situation of the Commonwealth, because it is too .serious. I hope that
Senator Reid. the community generally will take heed of what has happened. As all sections participated in benefits during our years of prosperity, all must now bear a fair share of .the sacrifices necessary to lift Australia out of its present troubles. I have not the slightest fear for the future. Although the path ahead may be difficult for some years, we must all pull together, irrespective of the Government in power.
Before closing I should like to place on record a thoughtful statement made recently by Mr. Davidson, general manager of the Bank of New South Wales. Although I do not know Mr. Davidson, I have a high regard for him, because of the many useful contributions which he has made towards the solution of our troubles. The following report of his speech appeared in the Sydney Morning Herald: - “The thing we have to realize in connection with the financial plan is that it is but the first phase, and the negative phase of reconstruction,” said the manager of the Bank of New South Wales (Mr. A. C. Davidson) in an address to members of the Chartered Institute of Secretaries yesterday. “ This phase,” he continued, “ is concerned with the cutting down of expenses, although there is also an endeavour to raise more revenue. The more revenue that is raised, the more money comes out of private industry. The first phase is to be followed by the positive phase of reconstruction - that is to be one of individual private activity. We have to realize that Governments do not and cannot initiate new industry. Their methods are slow and cumbrous.”
The Government, he added, was too slow to deal with the present situation without causing disturbance, and it was impossible to look to the Government for new industries that must be necessary. Institutions and associations, he feared, would not be of much use in the positive phase of reconstruction. These associations were formed for the purpose of defence, although later- on they became aggressive. Such sectionalism in the community was not going to assist during the recovery period.
The call, as always, was to the directing class, said Mr. Davidson. The energies of this class had been dampened down as a result of easy prosperity. The Government regulations over nearly everything had to be considered. “ These things have got to go,” said Mr. Davidson. “ We cannot have reconstruction if executives are tied up in this way. The call is for personal independence, and for personal work. These must be the great features of Australia’s recovery. We have to accomplish two things that, at the present moment, may seem absolutely impossible. We must expand our exports and provide Australian goods at prices that will enable us to compete. Our exports are reduced to about £90,000,000. We have about £40,000,000 to pay to discharge interest abroad. We have to live within imports, totalling £50,000,000, which is about one-third of what we are accustomed to. Can we live within itr We will have to give up luxuries to do so, and find out which imports are absolutely necessary for the maintenance of Australian industry. Every one must realize that he must train for something harder.”
The extension of primary and secondary industries was the second essential in the recovery of the country. If anyone took the trouble to go through the range of Australian exports, Mr. Davidson concluded, he would be amazed at the small number of items. This range of items would have to be increased.
This part of the Government’s proposal is merely the negative phase. “When all the measures necessary to give effect to it have been passed the Government, if it is to lift Australia out of its difficulties, must introduce other proposals to remove the shackles from industry, and permit the people of Australia to enter upon the positive phase of their task. If -we do this, and if all pull together, there need be no fear of the ultimate result.
– “Would the honorable senator favour giving to all industries the consideration accorded to the sugar industry?
– Apparently it is impossible for a representative of Queensland in this chamber to speak upon any subject without being called upon to reply to interjections relating to the sugar industry.
– It is a very pertinent interjection.
– The sugar industry is an important one, and it has meant much to Australia. But I shall not pursue that subject further at this stage. Although I believe that, if all sections of the community pull together, we shall overcome our difficulties, I cannot help remarking on an unfortunate recent development in New South “Wales. “Within the last few days there has been another strike in the coal industry, due, it is said, to the dismissal of a wheeler in one of the pits. As I know nothing of the cause, I cannot judge whether the dismissal of the wheeler in question was just or unjust; but I regret that such an obviously minor matter should be allowed to paralyze the coal industry, and throw out of employment thousands of miners and other workmen dependent upon it. That is the policy which threatens to pull down the important State of New South “Wales, and that is the spirit which, if we are to get out of our troubles, we must endeavour to eradicate.
I hope that the several measures to give effect to the plan will be passed, so that at the earliest possible moment money will be available to industry, and the people encouraged to enter upon the positive phase of their task. It is, however, essential that there should be complete harmony and goodwill between employers and employees.
– Every one who really has at heart the welfare of Australia must realize the gravity of the position which necessitated the formulation of the plan adopted at the Premiers Conference in Melbourne recently. Consequently, all sections of the community should give earnest consideration and their whole-hearted support to the proposals brought forward by the Government. I admire the courage with which the Prime Minister (Mr. Scullin) has handled the situation. I believe that the drastic cuts in governmental expenditure and the sweeping changes contemplated in administration are necessary to give effect to this scheme for the financial and economic rehabilitation of the Commonwealth. The task upon which the Prime Minister and his colleagues have entered must be very distasteful to them. It mean3 the surrender of the ideals of the Labour movement.
But while honorable senators on this side may approve of the measures now taken, we cannot help commenting upon the length of time which the Government took to reach its decision. If the steps now contemplated had been taken eighteen months ago, the sacrifices then required of the people would not have been so great as will now be necessary. It may be of interest if I review briefly the events of the past eighteen months, and the warnings which ‘the Government received from time to time concerning the steady drift in Commonwealth finance. As far hack as April, 1930, the Treasurer (Mr. Theodore), speaking at Sydney Royal Show luncheon, said -
The diminution in our national income has resulted in the people having at least £50,000,000 a year less to spend. There is the explanation of our most serious problem.
It is as plain as a pikestaff. The facts are so obvious that every intelligent man must realize that a solution must be found. Whether we like it or not, we are compelled to resort to economy - economy by governments and by communities as a whole.
Although that warning by the Treasurer was issued in April of last year, this Government took no practical steps to meet the situation. It should, however, be noted that in July last the Prime Minister (Mr. Scullin), when delivering the budget speech which was prepared by Mr. Theodore, prophesied the balancing of the federal budget for 1930-31. On that occasion he said -
Parliament must recognize 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.
Although the position became worse month by month, it took the Government twelve months to make any definite proposal to stop the financial drift. On the 4th November, 1930, the Labour caucus departed from the principle that the federal budget should be balanced when a majority of its members supported the proposal of Mr. Anstey, that the repayment of loans falling due in December of that year should be compulsorily postponed. Happily, Mr. Lyons, who was the Acting Treasurer at that time, refused to agree to any postponement. Indeed, he inaugurated a campaign for the conversion of loans amounting to £28,000,000. So successful was his appeal that the loan was over-subscribed bv £2,000,000.
Coming a little further, we find that in April of this year, the Treasurer (Mr. Theodore), speaking at the Ballarat City Hall, admitted that if the £18,000,000 proposed to be put info circulation by means of a fiduciary note issue, was not sufficient, the process of inflation would continue. His proposal was that notes should be issued without any backing other than the potential assets of the country.
– Probably the best backing possible.
– I admit that Australia has valuable potential assets; but so long as they remain undeveloped, sound financial institutions will not lend money on such securities.
– Queensland applied for a loan of £750,000 for ringbarking.
– Ringbarking is an asset, because there is a return from it the following year. The issue in unlimited quantities of pieces of paper, nominally worth £1, against problematical assets is entirely wrong.
– Any school child knows that.
– Notwithstanding the definite promise of the Prime Minister in his budget speech last year -that the financial drift would be stopped, twelve months elapsed before any definite action to that end was taken. Even now, it is difficult to say whether the proposed remedies will be sufficient to meet the situation.
In his speech the other day, Senator Kneebone suggested that Mr. Bruce, the former Prime Minister, should have foreseen the present situation during his term of office. Mr. Bruce did warn the people on many occasions that the country could not continue its heavy expenditure. Senator Kneebone appeared to forget that. 1927 marked the peak period of prices for our primary products.
– In that year Mr. Scullin warned Mr. Bruce of the necessity for stopping the drift.
– Sir Robert Gibson did the same.
– The reason for the appeal to the electors in 1929 was the determination of Mr. Bruce to rehabilitate the finances of the country.
– He was afraid to meet the House of Representatives with a budget along the lines of his proposals.
– He was not afraid to face the people. Unfortunately, the electors were stampeded by false promises into supporting the Labour party, with the result that the Government led by Mr. Bruce was defeated. The change of government meant that, instead of immediate steps being taken to put our finances on a sound footing, the drift continued. Our national income in 1927-28 was £656,000,000, or about £100 per head of the population. By 1929-30 it had fallen to £564,000,000; during 1930-31 it dropped still further to £485,000,000, while it is estimated that for 1931-32 it will be £456,000,000- a fall of £200,000,000 since 1927-28. Unfortunately, that enormous fall in the national income has not been accompanied by a corresponding reduction of governmental costs; on the contrary, those costs have increased. I realize that there are items of expenditure over which the Government has no control, especially in times such as those throughwhich we are passing. Nevertheless, on a percentage basis, the fall in revenue has been far greater than the reduction in the cost of conducting our governmental and social services, even when uncontrollable expenditure is excluded. The combined deficits of the Commonwealth and the States at the 30th June, 1931, are estimated at the appalling figure of £31,000,000. The gravest aspect of our financial situation is that, unless drastic reductions are made in governmental expenditure, the current financial year will end with a deficit for all the Governments of Australia amounting to £40,000,000.
– The proposals now before us will reduce the deficits to about £11,000,000.
– The plan which we are asked to accept is a courageous one, for it seeks to rehabilitate our finances by means of stern economies. It is true that deficits have occurred in the past; but, as a rule, they have been due to seasonal conditions, and the position has been rectified in subsequent years when good seasons have been experienced. The present situation has arisen from entirely different causes. It is the outcome of the tremendous fall in the prices of our primary products, assisted by high production costs. The cost of production in secondary industries must bebrought down to correspond to the prices received for our primary products. It is useless for us to shelter behind a high tariff wall so long as our primary products have to compete with the products of other countries in the markets of the world.
When speaking of Australia’s prospects in commerce and industry, Senator Dun can sounded a rather pessimistic note. I remind him that the primary producers suffered drastic reductions in their incomes two years ago.
– They are not very optimistic to-day.
– The great majority of them are optimistic; at least they are continuing to sow wheat and to breed sheep and cattle.
While on the subject of expenditure reductions, I desire to refer to the action taken by the present Government of Queensland two years ago. As a result of the prompt action of the Moore Government, Queensland has overcome the worst of the difficulties associated with its scheme of rehabilitation, and is now definitely on the way back to prosperity. Had the Commonwealth Government acted similarly, the Commonwealth would now have turned the corner, and many of our difficulties would be behind us.
– Why were the crippled States asked to carry the burden imposed by the sugar agreement?
– I do not intend to be drawn into a discussion on the sugar question at this juncture. The White Australia policy has always been strenuously supported by every member of the Federal Parliament, and the assistance afforded the sugar industry has been with the object of enabling sugar to be produced in Australia by white labour. Queensland is the only country in which sugar is produced by white labour. The figures show that the policy adopted by the Queensland Government has proved eminently successful. The percentage of unemployed in Queensland is lower than in any other part of the Commonwealth, and, in some of the country districts, there is almost an entire absence of unemployment.
In considering the conditions under which the Government has been able to carry on during the last twelve months, we have to remember that the Commonwealth Is in exactly the same position as a farming, pastoral, or any other business undertaking. During periods of depression, drought, bad trade, or other causes affecting adversely the conditions of a business, the owner or owners are usually able to receive financial assistance from their bankers to carry them over the bad period. If the proprietor or proprietors of the business persist in spending money on the same lavish scale as in times of prosperity, thus getting further into debt, they are invariably brought up with . a sharp turn, and informed that further financial assistance will only be supplied for the carrying on of essential services. The Government of any country is the business manager for the people, and the principles which apply to individuals are also applicable to governments. I cannot see that the banks acted unwisely in deciding that they could no longer allow the people’s money, which they hold in trust, to be squandered by governments, particularly when the Commonwealth Government gave no indication of a desire to place its house in order. The banks could not have acted otherwise, and it is to be regretted that a similar intimation was not given twelve months ago. I do not think that the Government has any real complaint against the action of the banks, which have informed it that, unless it proceeds along sound lines, no further accommodation can be provided.
– Does not the honorable senator think that the banks have been over-generous to the Government?
– Yes. The Commonwealth Bank should have informed the Government twelve months ago that its overdraft could not be further increased.
I agree with the statement of the Prime Minister (Mr. Scullin) that our financial position is a matter of arithmetic and not of argument. A person receiving £3 a week cannot carry on when his weekly expenditure is £4. That is what the Government has been attempting to do. The adoption of such a policy by an individual in business results in bankruptcy, and, in the case of a nation, in default. When a man in business becomes bankrupt his employees and creditors suffer, but in the event of a nation’s default, the whole community has to bear the hurden, and particularly those depending upon the Government for their livelihood. In the event of the Commonwealth Government defaulting, the public servants and those in receipt of invalid, old-age, and war pensions would lose most as they are directly supported by governmental funds. In the event of default, certain social services could not be continued, and what is still more serious, such a state of chaos would result that we would be exposing ourselves to the application of revolutionary principles. That is one of the gravest dangers with which we have to con ten i at present, and which might follow as the result of the privation which som.1. are at present experiencing.
The Government’s plan provides for a reduction of 20 per cent, in all controllable governmental expenditure, including salaries and wages of governmental employees and invalid and old-age and war pensions. In this respect, the public servants are in a much better position than many of those in private employment, who had their salaries reduced some time ago. The proposed reductions, which no one welcomes, must be made quickly. We are all loth to reduce the payments to the aged and infirm, many of whom are worthy pioneers, but when the country is unable to pay 20s. in the £1 it is better to take the position in hand and pay 17s. 6d. in the £1, instead of 9s. in the £1 as the committee of economists suggested would happen in July if adequate steps were not taken to stop the drift. The subject of war pensions has been fully considered by a committee repre-sentative of returned soldiers’ organizations, and I understand that a plan acceptable to those organizations and to the Government has been submitted. ] am pleased to learn that the pensions paid to incapacitated soldiers and the widows and orphans of returned soldiers are not to be interfered with. I should like to inform Senator Rae that as the result of representations made by their representatives the pensions of limbless, blinded, and tubercular soldiers, to which he referred this afternoon, are “not to be reduced.
The interest payable on government bonds held in Australia is also to be reduced. This afternoon the Leader of the Opposition (Senator Pearce), in an able speech, referred to the loss which some bondholders will suffer as a. resulof the Government’s proposals. On pap« 183 of the report of the proceedings of the conference of Commonwealth and State Ministers, the committee of experts states -
Other methods may be considered by which contributions from fixed money-claims may be obtained, but which involve breach of contract. In normal times broach of contract would constitute an insuperable objection, but fundamental as is the sanctity of contracts, it must not be overlooked that insistence on their fulfilment to the letter might, in present circumstances, force the debtor governments into a policy that would surely destroy the value of the bond. Generally, breach of contract would cause lack of confidence, and would set up a flight of capital from the country subjecting investors to it. But when the alternatives are inflation and default, or taxation of an equal or probably greater severity, holders of fixed money claims may find it wiser to accept a variation of their contracts which is less onerous than taxation, and insures them against the greater loss of total default.
There we have a definite statement indicating that there was a grave chance of the bondholder losing not only his interest, but also his capital. That, to my mind, is the strongest argument in favour of the voluntary acceptance by the bondholder of the reduction of interest. By doing so he, to a large extent, safeguards his capital. His interest, for the moment, it is admitted, is to be at a lower rate; but, with such a large amount of capital as £550,000,000 at stake, it is far better to lose 22£ per cent, in interest than to risk the loss of the whole of the capital.
Senator Bae has argued that the confidence of the people internally will be shaken under this proposal, and has contended that a compulsory conversion would result in greater confidence being aroused. I venture to suggest that the reverse would be the case. If a compulsory conversion were forced through, confidence in our generation would be wholly lost, and any future government that went on the market for a loan, except at a very high rate of interest, would find it impossible to borrow. I realize that there is a certain degree’ of repudiation in what is being done; but I consider that, in the light of all the facts, particularly that relating to the safeguarding »f capital, the holders of bonds will rally round the Government at this critical juncture and voluntarily convert their holdings.
I believe that the confidence of the public would be greater if the Government were to show a little more leniency in regard to those particular issues with respect to which it is proposed to give a premium. I note that the 6 per cent, bonds which fall due in 1938 will be issued at a premium of £4 3s. 6d. The amount of the bonds falling due on that date is approximately £14,000,000. Then we come to the large issue which was converted last December. It is generally recognized that that was a patriotic conversion. At the time, 6 per cent, bonds could be bought on the open market at somewhere about £90. These bondholders converted their holdings at par, repayable in 1932. The total amount of the bonds falling due in 1932 is roughly £34,600,000. The premium that we have been led to believe those bonds will carry is approximately 18s. 8d., which is £3 4s. lOd. below that of the 1938 bonds. If a special prize is to be awarded, it should go to those who voluntarily con-, verted last December. We are really penalizing, to a certain extent, those who then gave the Government the use of their money for a further period of two years. An additional premium of £3 4s. lOd. in their case would amount, in the aggregate, to £1,115,000. It would not actually cost the people that sum, because it would be issued in the form of bonds, and would be added to the amount of the re-converted bonds, spread over a period of 30 years.
Then there are conversions of roughly £4,000,000 in 1934, £4,600,000 in March, 1935; £96,000 in September, 1935, and £53,000,000 ip 1937. If the premium on the whole of those issues were made the same as for the 1938 issue, the holders of all of these stocks would be placed on an equal footing, and it would be a gesture by. the Government indicating that it was endeavouring to give as attractive terms as possible. The additional premium would be £1,839,000. The addition of £2,000,000 to the total conversion would make very little , difference, considering the huge conversion involved. I feel .certain that such an action would appeal to the bondholder. It would give, him far greater confidence, and be a powerful stimulus to voluntary conversion.
– The proposal that extra taxation should be imposed was thoroughly explored by the experts who reported to the Premiers Conference, and they came to the conclusion that already Australia had practically reached the taxable limit of direct taxation. A nation that exceeds a certain limit in direct taxation is really straining the source from which revenue is drawn. It is actually taking from the community that portion of its earnings which can be made available for further production. The experts reported- that although there was a possibility of certain extra taxation being secured, it should not be obtained by means of direct taxation. In Australia to-day between 300,000 and 350,000 have registered as unemployed. It is a bigger army of workless than we have ever had before, and its existence is one of those things which justify the steps now proposed to.be taken; because with such a large army of unemployed, we are running a grave risk, not only of extremism, but also of the total collapse of the existing social structure. We are also compelled to use a large proportion of our revenue upon unproductive undertakings, or in providing doles. It is estimated that the enormous sum of £10,500,000 will be spent on unemployment relief during the year 1931-32. The estimate is a moderate one.
– The experts saythat the amount required will be £3,000,000 more.
– If the position is not greatly improved during the next twelve months, allowing the unemployed only £1 a week, the amount we shall have to pay out in this direction will be in the vicinity of £1S,000,000. It is, therefore, of vital importance that men should be got back into employment as quickly as possible.
It has been said that the recommendations of the experts will not’ assist private industry; but I think they will go a long way towards doing so. It is certain that we can only hope for an ultimate reduction in the number of unemployed by thu means suggested, because the expenditure of money on unproductive works, or doles, or on any like form of relief, has no permanent value; the country is getting no return for the money spent. Certain of the proposals are drastic, but they are warranted if by means of them we can overcome the grave unemployed predicament we are in at the present time. Still more drastic measures may even be warranted.
I am pleased to note an improvement in the means of trade - the money necessary for the extension of our present activities or for the establishment of new enterprises. During the past fortnight the banks and financial institutions generally have added their weight to the effort to bring about this altered condition by reducing their overdraft rate by 1 per cent. This will make an enormous difference to our primary producers. Individually it may not appear to be much; but when we are informed that the farmers in Western Australia alone are in debt to the tune of £30,000,000, a reduction of 1 per cent, in their interest will make a very great difference, and, in some cases, perhaps the difference between profit and loss.
It is said that the proposals before us are only the beginning, and that we shall have to go further before we can definitely say that Australia has turned the corner. One factor that will greatly assist tho country in turning that corner is greater production. Whatever is done in the direction of- reducing rates of interest, wages, pensions, and expenditure on social services is only an actual saving in money. It brings no new capital into the country. Until there is a definite increase in the export of our produce we cannot expect any great relief in this direction.
The tariff may not have been actually mentioned in the proposals before us, but it has a great bearing upon the industries of Australia. On page 181 of the report of the Premiers Conference, the experts’ opinion on this point is set out as follows : -
The increased primage duty and the valuation of imports in Australian currency, if adopted, should be accompanied by the abolition of embargoes and rationing in respect of imports imposed during the last two years, and by a reduction of some of the extreme protective duties. Such measures would be no longer necessary, and their removal would promote better feeling overseas, or at least’ 011-set any unfavorable reaction to increased primage and the higher valuation of imports. On the whole, about £8,000,000 should be obtained from the com-
Dilution of primage, sales tax, and a revaluation of imports, accompanied by a reduction of embargoes and high customs duties, and a more liberal exemption of basic foods and instruments of production. (The principles of these exemptions require careful detailed statements, which cannot be attempted here.) These proposals would yield £10,000,000 of new taxation, which reduces the gap between revenue and expenditure in 1031-32 to £16,000,000.
The experts have hit upon one of the sources of our present troubles by saying that there should be a “more liberal exemption of basic foods and instruments of production “. During the last eighteen months heavy tariffs and embargoes, imposed without being submitted for ratification by this chamber, have added at least 15 per cent, to the cost of production. [Extension of time granted.]
In good seasons these extra burdens imposed by the tariff might be borne by the primary industries without sustaining an actual loss on the cost of production, but that result is brought about immediately the primary producers are faced with lower prices for their products in the markets of the world. I am afraid that existing price levels for our primary products in overseas markets will rule for some years to come. Since we cannot reasonably expect a return to 1925-26 prices for some years, it is essential that costs of production should be brought down to a level that will make it possible for our producers to export at a profit. In this connexion I direct special attention to the handicaps imposed upon our farmers as compared with primary producers in the Argentine, which country exports the same class of products and is therefore probably our strongest competitor in the British market. In the Argentine the following essential requirements of primary producers are duty-free: - Dips, disinfectants, filters, agricultural machinery, mining machinery, machines for production, electrical machinery, all books, medicines, serums, scientific instruments, ploughs, wire-netting and galvanized iron. By contrast, in Australia imported dips carry duties of from 25 per cent, to 35 per cent. ; agricultural machinery, 20 to 30 per cent.; mining machinery, 40 to 55 per cent.; electrical machinery, 45 to 60 per cent.; medicines, 30 to 40 per cent.; ploughs, 20 to 30 per cent., with stump jump ploughs prohibited; galvanized iron under the new schedule tabled in March last, from £5 10s. to £7 10s. pelton. Despite these handicaps, Australian farmers are expected to produce for export in competition with primary producers in the Argentine which, geographically, is more favorably situated in relation to European markets.
– As a representative of Queensland, the honorable senator should be the last to complain of the tariff policy of this Government.
– No doubt Senator Daly intends to say something about the Queensland sugar industry. Before the dinner adjournment I effectively replied to other comments concerning that industry.
– I might mention the duty on bananas.
– I could quite as effectively defend that policy also. The honorable senator’s interjections do not affect my argument that, in competition with other primary products in the world’s markets, out farmers are unduly handicapped by the tariff.
– I might also mention the Queensland cotton industry.
– That matter was fully discussed in this House on a recent occasion and, I think, it was demonstrated, to the satisfaction of the Senate, that the Government’s policy with regard to the cotton industry was amply justified. My concern now is to prove that, since the tariff has substantially increased the price of all requirements on our farms, proposals for relief in this direction should be regarded as part of the general plan for the rehabilitation of the Commonwealth, because our prosperity depends upon the successful marketing of our surplus primary products overseas. Unless we can do this, the finances of the Commonwealth will be wrecked, and our primary producers will be forced off their properties.
Senator Kneebone, speaking to this motion last week, mentioned that the Senate had rejected a number of Government proposals which, he said, were definitely designed to meet the special difficulties now confronting the Commonwealth. Those measures, he added, included the proposed fiduciary note issue, and the nationalization of banking. The former proposal was exhaustively considered by the Under-Treasurers and economists whose services were placed at the disposal of the Premiers Conference in Melbourne recently, and this is what they had to say about it-
There are two methods by which, without a technical breach of contract, contributions’ might be exacted from internal holders of fixed money Claims. One is that of raising the price level, either by the issue of additional currency or by the creation of bank credit. There can be little doubt that under present conditions, such a policy would destroy confidence in the currency. With such loss of confidence, both interest and exchange rates would rise. The rise in exchange Would increase the cost of meeting overseas interest obligations, and, therefore, upset the whole plan for budget equilibrium. The increase in interest rates would be damaging to conversion operations, and again impose an additional strain upon the budget. The net effect would be to increase the deficit, and to require an increasing amount of new credit and currency to be created for balancing the budget in successive years. Under these circumstances an inflationary policy would soon get out of hand and bring about a collapse of the currency.
That was the considered opinion of experts who had been specially deputed to investigate the proposal. They had no doubt that an inflation of the currency would quickly get out of hand.
The Government is now taking the only course that is open to it, and I have not the slightest doubt that once the people of Australiarealize the gravity of the situation, and the sacrifices that will be necessary to place the Commonwealth again on a sound basis, they will, figuratively speaking, take off their coats, get to work, and quickly pull Australia round the corner.
– It was pleasing to hear Senator Cooper say that he intended to support the Government’s proposals, because a few days ago the right honorable the Leader of the Opposition (Senator Pearce) struck a note of warning which was suggestive of hostility to them. No one will deny that Australia is on its trial. So also are honorable senators, and members of another place. If we are to get out of our present difficulties, sacrifices must be made by all, and there must be effective and whole-hearted co-operation with the Government.
– The Government is a bit late in starting.
– I think we can look for this support from all who really appreciate the seriousness of the position. I recall, and I have no doubt other honorable senators also remember, the wonderful effort made by the people of Australia during the war. Personally, I was opposed to the conscription of our manhood, and took part in the campaign against that policy, because I was firmly convinced that, without conscription, the people would rally to the support of the country. I believe now that when they realize how desperate is our situation, and the onus is upon all public men to place the facts before them, they will respond just as loyally as they did during the war.
Iam reluctant to attach blame to any government for the position in which we find ourselves to-day, but I cannot refrain from saying that the previous administration was, to some exent, responsible. Senator Thompson said just now that we were starting a bit late to apply the remedies. To that I might reply that the previous Government, of which he was a supporter, was unmindful of its responsibilities because, as we know, this condition of depression was becoming apparent while it was in office, and the Bruce-Page Government had been warned of the danger. The British Economic Mission - the Big Four as it was termed - visited Australia and plainly told the Government of the day that financially and economically, Australia was drifting dangerously. The members of the British Economic Mission advised the Government that it was borrowing money too freely and spending it too lavishly. They pointed to the Hume weir, and other works which have been undertaken without any proper investigation of the existence of markets for the products which would be grown as the result of their construction. The previous Government adopted a policy of borrowing money wherever it could be borrowed, and of spending it wherever it could be spent. Although it was warned that a day of reckoning would come, it was not until the position became serious, in the last days of the Bruce-Page Government, that a halt was called.
– Were not the States the greatest offenders?
– The Bruce-Page Government set them a bad example, and it must accept its full share of the responsibility for the orgy of borrowing that took place. Had money still been available, that Government would have continued to borrow. °-
The present Government was unfortunate in assuming office when it did. Ever since it took over the reins of government it has been confronted with difficulties. Nevertheless, it is prepared to shoulder its responsibilities, and to see the country through its difficulties. Senator Thompson expressed a doubt as to the honesty of the Government in relation to the agreement arrived at by the Premiers al the recent conference.
– The Prime Minister has faltered once.
– He did not. When the present Government came into office it found the loan market exhausted, unemployment rife, and trouble in the timber and coal-mining industries.
– Members of the Labour party applauded the timberworkers for having gone on strike.
– On the contrary, we deplored the strike. There would have been no trouble in the timber industry had not a judge who was appointed by a Nationalist Government increased the working hours in that industry without justification. Before the award which led to the strike was made, the timber-workers had an unchallengeable record as a lawabiding organization. They had always abided by the awards of the court. No charge of disloyalty can be laid against the timber-workers.
– Who created the “ basher gangs “ if the timber-workers did not?
– They might have been instituted by some friends of the honorable senator’s party. When the Government came into office there was a clamour for it to take over the coalmines. That was not constitutionally possible, even had the Government felt inclined to take over a dying industry.
One of the first things the Government did after it came into power was to ask the banks to release credits in order to assist industry, stabilize prices, and provide employment. Unfortunately, the banks had practically exhausted their funds, and were not willing to advance further credits. For that position they themselves were largely to blame, because in the past they had poured out money like water without due regard for the consequences. I know of instances in which parsons who desired to borrow money were offered more than they asked for. Eventually, the banks found that they could not continue the policy they had been following. The trouble was that the change of policy came about too suddenly. Competent authorities say that deflation can be as great an evil as inflation. The policy of deflation was put into operation so suddenly that the present chaotic state of affairs resulted. Confidence was lost, not because of any action of the Government, but because of the operation of the policy of deflation. Credits were not made available to carry on the industries of the country. We cannot attribute the blame for our present economic situation entirely to anything that has happened in this country, because the present depression is not confined to Australia; it is world-wide. Similarly, the banking practice followed in Australia is the banking practice of the world.
During recent years, our national income has fallen enormously, and as a consequence, unemployment has increased. The fall in our national income is due to the much lower prices received in the world’s markets for our primary products. In order to meet that difficulty, the Government proposed to increase the currency; but the banks would not agree. Legislation was then introduced to meet the situation, only to be rejected in this chamber. The Government was then faced with the possibility of being unable to pay more than 12s. in the £1. The circumstances were such that it was forced to accept the proposals put forward at the recent Premiers Conference to reduce invalid and old-age pensions to 17s. 6d. a week, and to make a percentage reduction in the salaries and wages of its employees. Concurrently with those proposals, the Government insisted that interest rates on fixed deposits, mortgages, and other securities, should be reduced by 22½ per cent. The inclusion of reduced interest rates in the plan agreed to at the Premiers Conference was a wonderful achievement for the Government, because not one of the plans previously submitted by the Opposition provided for any reduction of interest. It can he claimed for the plan now before us that it is allembracing.
I hope that the time is not far distant when we shall again have climbed to prosperity. The Government feels very keenly the reduction of pensions, and hopes that the day will soon come when they can be restored. Although it will be difficult to convince pensioners that, even with the reduction of their pensions, they will be no worse off than they were in 1927, the Statistician’s figures prove that that will be the case.
Honorable senators will agree that the vast majority of the workers of this country are reasonable men and women, who would not object to a reduction of their wages, provided that the cost of living were reduced to the same extent. They would be prepared to accept £2 for every £3 they previously received, so long as the purchasing power of their incomes remained the same. One cannot blame the workers for objecting to being called upon to make greater sacrifices than other sections of the community will bo asked to bear. It is well to remember that, although wages have increased, they have done so only because the cost of living figures on which they were based have justified the change. The workers have never secured through the Arbitration Court increased wages unless prior to such increases the cost” of commodities had risen proportionately. The same process should have been adopted when prices began to fall, in which case there would have been no complaint from the workers. Any one who has studied the position must realize that it is indeed serious and that, consequently, drastic remedies are necessary. The Government recognizes the gravity of the situation, and has set itself determinedly to grapple with it. Although I feel that we can hope for very little from this scheme, I am prepared to give it a trial. The problem that confronts Australia confronts most of the civilized countries of the world, and men who have made a life-time study of economics, banking and finance have applied themselves to a solution of it.
The Government has been accused of advocating a policy of inflation. It may interest honorable senators to know that some eminent authorities hold that inflation,properly controlled, is a very good thing. The same may be said of a policy of deflation.For the information of honorable senators, I shall quote a paragraph which appeared in the Sydney Morning Herald of the 19th June, which states that inflation may be necessary in order to stimulate the industries of any country. As we cannot allow our industries to drift, the banks may yet be asked to make credit available in order to encourage industry in Australia. According to the findings of theMacMillan Commission, Great Britain has realized that a policy of deflation which is not properly controlled may have disastrous results. The paragraph to which I have referred reads -
The Daily Herald lobbyist says that the report of the Macmillan Committee on finance and commerce, which was appointed in November, 1929, will be presented to the Government this week. He forecasts that there will be a majority report severely criticising the policy of the Bank of England during the trade depression, and suggesting that the bank at present could substantially improve trade by making credit more easily available and by increasing the amount of money in circulation, and that this policy should be carried out in co-operation with the Central Reserve Bank of America, the Bank of France, and other great central banks . . . “ The report is likely to create a sensation, as the Bank of England’s policy will be openly condemned by the committee, which includes some of the greatest financial experts in Britain.”
– Possibly he was able to obtain information in advance. I am sorry that the report, which will be interesting, is not yet available. Banking institutions, like governments, are capable of making mistakes.
– But, unlike governments, they have to bear the consequences of any mistakes they make.
– I have yet to learn that the banks are losing as the result of the present depression.
– Some of .the banks are not in a sound position.
– I have read the history of the bank smashes which occurred in 1893, and I do not think that the banks lost much. In fact, some of the shareholders made a lot of money out of the transactions at that time.
– Many thousands were lost by both depositors and shareholders. ,
– The Commercial Bank declared a dividend of 12 per cent, and then closed its doors.
– I have no desire to attack the banks.
– Why not?
– Nothing can be gained by adopting such a course. We are in the hands of the banking institutions, which have this and other countries by the throat.
– What of the Government Savings Bank of New South Wales ?
– I am referring more particularly to the policy of the trading banks, and not to the savings banks, whose funds consist of the savings of the poorer section of the community. I do not profess to understand the tricks of those “ who control our banks, and who can decide to close their doors on one day and open them next day when the position is not as serious as they say it is. Just prior to the closing of the Government Savings Bank of New South Wales, the Commonwealth Bank came to its assistance with a supply of fiduciary notes. The people of Australia were willing to accept as many notes as the Commonwealth Bank could make available. No one was demanding sovereigns; the people were prepared to accept Commonwealth notes in whatever quantities Sir Robert Gibson, as Chairman of the Commonwealth Bank Board, would make available. The banking institutions of this country are capable of looking after themselves, and I believe that had they fallen into line with the policy df this Government, Australia would have been in a better financial position than it is to-day.
Unfortunately, on assuming office, this Government was faced with a severe slump in the prices obtainable for our primary products. Even if the employees engaged in primary production worked without wages our primary industries would not be in a better position than they are to-day. As a matter of fact, wages play a very small part in the production of wheat and wool. Quite recently a squatter who holds a large area of land at Glen Innes complained to me of the amount he has to pay in interest, and of the cost of producing wool. He told me that twelve months ago it cost him ls. 0½d. a lb. to produce wool, and of that amount wages represented only ‘4£d. a lb., the remaining 8d. being absorbed in interest and taxation. If 75 per cent, of his expenses is represented in interest and taxation, a reduction of 20 per cent, in his wages costs will be of little benefit to him.
From time to time honorable senators opposite have referred to the necessity of reducing the cost of production in order to allow the products of our industries to compete with those of other / countries. I know they are not serious in that suggestion. How is it possible for Australian producers, operating 12,000 miles from the principal markets, to produce and sell as cheaply as countries where the standard of living is much lower than it is in Australia?
– We have some advantages.
– Ope advantage enjoyed by Australian producers of wool was obtained as a result of this Government preventing Russia from purchasing the pick of our stud sheep. If the export of stud sheep had been permitted, Russia would be competing with us in the production of wool, as she has been in the matter of wheat. Protection has been afforded to those engaged in the production of butter, sugar and beef, but more particularly with regard to sugar and butter. Some of our commodities are sold overseas at lower prices than prevail here in order to protect local industries.
– Has that protection been afforded to the beef industry ?
– Beef has been sold abroad at prices cheaper than those charged to our own people.
– That is not being done in the exporting States.
– I have not compared the prices during the last few months, but twelve months ago the position was as I have stated. It is impossible to expect empty vessels to travel 12,000 miles in order to load our primary products when in travelling to other countries they can obtain loading both ways. We should pay more attention to our internal trade than to our external trade, and, in that way, assist in building up a self-contained nation. This Government has introduced a comprehensive fiscal policy, including the imposition of embargoes on commodities which were previously dumped in this country. The percentage of unemployment in Australia would be much greater than it is to-day had this Government not imposed heavy customs duties on certain commodities. Quite recently Mr. Vicars, of Vicars Limited, Marrickville, informed me that he was now employing 100 more in his factory than he had previously employed.
– Can they manufacture for export?
– As a matter of fact, they cannot meet the local demand. It is foolish to export greasy wool to be manufactured into the finished article when woollen goods can be manufactured in Australia.’ We must not interfere with the standard of our people.
– With 300,000 out of work there is no standard of living.
– Unfortunately, our standard of living has been reduced in consequence of the fact that money has been squandered in certain undertakings which cannot possibly show a profitable return.
– Is the honorable senator referring to State enterprises ?
– That is where the money has been wasted, particularly in Queensland.
– Some of the State enterprises undertaken in New South Wales were a success, while others were a failure. But I cannot see what bearing that has on the position. I feel inclined to bury the past. I have quite a lot of matter that I could use, but what good would that do ? I could refer to the statement of Senator Pearce, that the only way in which the position can be righted is by turning the present Government out of office. It would appear that the sole desire of the right honorable gentleman is to get back into office. Would he welcome the return of “ the tragic Treasurer”?
– What has this Government done during the last eighteen months to help Australia ?
– It has endeavoured to clean up the mess in which it found this country. One of its achievements has been to swing the trade balance in our favour. When it came into power, £30,000,000 worth of goods that could be manufactured locally were being dumped into this country. It has taken action in the direction of enabling those goods to be manufactured here. It has left no stone unturned to rectify the position. Even if it had only corrected the adverse trade balance, its. existence would have been justified. I hope, however, that within the next twelve months the operation of its policy will have the effect of at least inducing the banks to release the credits that are necessary if our people are to be given employment.
– To what credits does the honorable senator refer?
– Credits that will assist industries and enable the farmer to plant his crops.
I trust that every person who is interested in the welfare of this country will respond to the call that is being made, and allow the past,with all its faults, to be buried. Let us all act unitedly in pulling this country out of its difficulties. We are confronted with a very difficult task. I and my colleagues are swallowing a very bitter pill when we agree to the reduction of old-age and invalid pensions, for which the Labour party has fought and claimed credit ever since it came into existence. It has always stood by the wage-earner and many others in a similar position, and advocated their cause. Sacrifices have to be made, because the revenue is not sufficient to meet our liabilities. The banks hold the key to the situation, and they say that they cannot carry governments any further. It is better to come to some understanding and agreement under which old-age pensioners will lose 20 per cent., rather than that we should continue to the stage at which 50 per cent. or more would be lost.We are face to face with realities.We are confronted with a position that should have been tackled years ago, and it is so serious that drastic measures to deal with itare imperative. I trust that the conversion scheme will be successful, and that the other proposals of the Government will be accepted in the spirit in which they are put forward. I should like the people of this country to have sufficient faith and confidence in their representatives in this Parliament to know that they will do the right thing for them. The Government realizes that it is impossible to obtain an absolute equality of sacrifice. This is the fairest method that could be adopted, and is the least of a number of evils.We do not for a moment contend that there is equality of sacrifice between the old-age pensioner who loses 2s. 6d. a week, even though the cost of living has decreased to that extent, and the man who holds £10,000 worth of gilt-edged securities, and whose loss of interest is to be 22½ per cent. It is recognized that there are a number of small investors who have invested only sufficient to bring them in £1 a week in interest. The contention is that their sacrifice will be greater than that of the old-age pensioner. That may be true; but it must not be forgotten that their capital will remain intact, and worth probably double what it would be if these steps were not taken. On the other hand there is the working man who all his life has striven to secure a home, and who now finds that it is worth not more than half what he paid for it. How could such sacrifices be equalized? All that is possible is to do the fair thing, and to make the sacrifice as nearly equal as possible. That is the aim of the Government, and it trusts that no one will escape.
-Why not include the tariff in the cuts, as was recommended by the economists?
– That is a question that will have to be gone into. The interjection of the honorable senator reminds me of a statement which was made by the Leader of the Opposition, to the effect that this plan was all right so far as it went, but that it dealt only with financial reconstruction. The right honorable senator contended that it was necessary to take steps also towards economic and industrial reconstruction. I was at a loss to know exactly what he meant. He said that he was not prepared to accept the word of the Government, and would not allow this legislation to pass the Senate before he knew what was proposed in connexion with other portions of the Melbourne plan. He urged the Government not to be content with this action, and argued that the present system of determining the wages, hours and conditions of the employees should be swept aside, so that employers and employees would be free to bargain among themselves.We have had experience of that bargaining in the past. Surely any one who passed through that period has no desire to revert to those conditions ! I agree that the question of the protection of industries will have to be considered; but who would consent to the abandonment of our tariff, thus leaving our secondary industries at the mercy of the manufactures of cheap-labour countries? I very much doubt whether any government would seriously consider the two propositions that have been put forward by the right honorable senator. Must we continue indefinitely to slash the wages of the working people, and to take from them what they have fought for for years ?
-Who made that suggestion ?
– No other inference can be drawn from the statement of the Leader of the Opposition, than that neither he nor his party would be satisfied until they had swept aside everything that makes for the protection of the workers. No government that stood for the principles of democracy could entertain such an idea for one moment. The labourer is worthy of his hire, and must he protected against the employer who would take advantage of him. The arbitration system was set up for that purpose, and it would be a sorry day when any government abolished it.
– The present Government has abolished it already in relation to the Public Service.
– That is not the case. The honorable senator is bitterly opposed to conciliation and arbitration. He believes in direct action. He has had experience of direct action, and should know what bitter fights have had to be waged under that system. Any one who was at all concerned about the welfare of his mates would not for a moment advocate getting back to the dark days of the strike. The honorable senator says that arbitration has killed militancy in the working people of this, country. I have yet to learn that militancy has ever been of any value to them. There may have been no alternative in the old days. The squatter of that period would have set the dogs on the honorable senator had he found him on his property.
– He would do so now; and he would be assisted by the Australian Workers Union.
– The Australian Workers Union has always fought a straight and an honest fight. It has achieved more by arbitration and conciliation than has been achieved in a lifetime by themethods advocated by the honorable senator.
– All the best victories were won before there was arbitration; and they can be won again.
– I have no desire to debate the virtues of the Australian Workers Union with the honorable senator. Those who are acquainted with that organization appreciate the good work that has been done by it on behalf of the workers of Australia. I have no desire to prolong the debate, but I trust that the Opposition will give the Government the credit due to it, and all the assistance they can to help the country out of the difficulties in which it finds itself to-day.
– Senator Dooley is to be commended for his candour, particularly for his admission that the proposals this Government has put forward are a bitter pill for it to swallow. I am sure we all appreciate the position of the Government. In 1929 the then Prime Minister (Mr. Bruce) told the’ people of the position, and eventually when an appeal was made to the electors those who are now in control of affairs said that there was no need for alarm - that if they were returned to power the finances of the country would be righted without any reductions of salaries or any of the steps which are now proposed to be taken. It is indeed bitter to have to eat one’s own words. This Government made promises to the electors which it knew would be absolutely impossible of attainment. What has happened will be, I hope, a lesson which not only the Government, but also the people will never forget.
Senator Dooley said that the Opposition represents the employing class, and inferred that Labour members alone represented and watched over the interests of the workers. If all the things he said would have happened had the Nationalists again been returned to power, were likely to happen, why is it that they did not happen during the twelve years when Nationalists were in a majority in this Parliament? Instead of dreadful things happening to them, the workers of this country had much for which to . thank the Nationalist party. They gained many considerations and concessions.
If the people look to this Parliament to right things for them, I am afraid they will look in vain. If left alone they can right their own wrongs, and the best service this Parliament can render to them is to leave them alone to follow along the lines of developing the country. Parliament should confine itself to doing the things which are essentially the functions of a government; that is to say, governing the people, and keeping out of those things that hamper the progress of any country.
– The people will not allow Parliament to leave them alone.
– I frankly admit that in the past there has been on both sides a bid for the popular vote. The people have demanded certain things, and the Governments of the Commonwealth and the States have either yielded to the pressure or given . way to others who were prepared to bow to the popular clamour. In that respect, they have been in a measure responsible for the position in which we find ourselves to-day. I can sec that the present Government now realizes that the position is just what it was stated by Mr. Bruce nearly two years ago it would be. The present proposals of the Government are practically those which were agreed upon at the Premiers Conference in Melbourne in August last. At that time it was estimated by the same people who have drawn up the present plan, that a 10 per cent. reduction would meet the situation. When the Prime Minister signed that agreement, we understood that he would carry it out. Had he done so, the sacrifice now required would not have been so drastic.
Senator Dooley has spoken of industrial legislation. I shall be pleased if any one can produce evidence to show that industrial legislation has done anything at all to assist industry in Australia. As a matter of fact, it has been in a large measure responsible for a great deal of the present unemployment.
– Are countries without industrial legislation any better off than we are?
– I think that the best reply to the honorable senator’s interrogation is the fact that Australia’s primary and secondary industries are not able to competewith those of other countries in the markets of the world.
– In order to do that, we should have to come down to the coolie level.
– The honorable senator’s extravagant way of expressing himself is his own undoing. Australia’s secondary industries cannot even competewith countries which pay as high wages as are paid in Australia. Our secondary industries are really sheltered industries, but with a few exceptions, they are unable to export. It is useless to talk about building up secondary industrieswhen the saturation point for the absorption of their output is reached. Australia is not in a position to do anything with its surplus output of secondary industries.
– We can do the same with it as we dowith the surplus output of butter and sugar.
– The honorable senator knows quite well that we are no longer in a position to find bounties to subsidize any industry to export; our people are not in a position to pay the additional price whichwould be necessary to provide such bounties.
I agreewith Senator Pearce that the present proposals are only the first step towards the rehabilitation of the finances of Australia. They must be followed by a stocktaking of our primary and secondary industries. Until we can substantially increase our exports of primary production I can see no immediate prospect of relief.
The phrase “ equal sacrifice “ has become a slogan with the Government. So far as the voluntary conversion loan is concerned, many of the peoplewho are deeply interested - the stockholders -will find that there is no equality of sacrifice. However, I am supporting the proposals, because they are the unanimous decision of the Premiers of the various States and of the Commonwealth Government. The working out of the details was left to the committee of experts, and the proposed legislation has been framed on lines recommended by them. There are aspects of the proposals, particularly those relating to debt conversion, which I do not like, because they savour of the breaking of contracts, if not repudiation.
– There is no doubt about that.
– Nevertheless, I support the general scheme, because I am unable to suggest an alternative that would be acceptable to all governments, and, at the same time, meet the difficult situation that confronts us. I doubt that there is precedent for the legislation which it is now proposed to place on the statute-book of the Commonwealth. As recently as November last . the Government made an urgent appeal to the people to subscribe to a conversion loan. Thewinning slogan adopted for the campaign, andwhich played no small part in the success of the loan, was “ Commonwealth bonds are as good as gold “.
Present market quotations for the new Government securities do not suggest that they are as good as gold. If a holder of those bonds wished to realize on them, he would have to be content with something in the vicinity of £80 or £85 per £100.
I think we should consider carefully the position of the class of investor mentioned by the right honorable the Leader of the Opposition (Senator Pearce) this afternoon - those thrifty people who invested their life savings in government securities in order to provide for their old age. Under this conversion scheme a large number of them will be placed in a very difficult position. It is most regrettable that the Government is breaking faith with them with regard to the interest return on, and the maturity date of, their investments. Many of these old people would have been infinitely better off to-day if, instead of denying themselves many comforts and luxuries, they had spent their money freely and relied upon the old-age pension. There is also another class of investor that will be harshly treated under these proposals. I refer to the younger generation who were induced to make weekly contributions for the purchase of government bonds. As we all know, during the last loan campaign, many business houses, banking, and other institutions, made a special appeal to their employees, and offered special facilities to them to contribute portion of their weekly earnings for the purchase of government bonds. Doubtless, many of these young people anticipated that they would have the use of their money at the maturity date of their bonds. Under this scheme they will be obliged to accept other securities, the maturity date of which will be still further postponed. This breach of contract - for that is what this conversion proposal means - will not be lightly regarded by these young people, who have every right to expect the Government to set the standard for honest and straight-forward dealing. For this reason, I support the plan with a great deal of reluctance. Only the dire necessities of the nation compel me to give support to this portion of the general scheme.
The right honorable the Leader of the Opposition mentioned this afternoon that the Government’s financial proposals must be followed by other measures to make possible the economic rehabilitation of the Commonwealth. With that statement, I am in full accord. The Ministry would be well advised to free industry, and especially our primary industries, of many of the burdens resting upon them, so as to permit those engaged in them to work out their own destiny. Our wool and wheat industries, upon which the prosperity of the Commonwealth depends, are in a serious plight. In recent years, no section of the community has been hit harder than our small farmers engaged in the production of foodstuffs for home consumption. It is true that they will secure some relief, following the arbitrary reduction of interest rates. I should have preferred relief to come to our primary producers through the re-establishment of confidence in the Government of the country. It is anomalous that Australia, despite its undoubted resources, should be looked upon with such disfavour in financial circles. But this, as we know, is largely due to the lack of confidence in our Government. On many occasions since the present Ministry took office, we have heard, from responsible Ministers and prominent members of the party supporting the Government, suggestions of repudiation and inflation of the currency. As might have been expected, the prices of Australian securities have declined seriously in London, New York and elsewhere. Compared with other dominions of the British Empire, Australia occupies a most unenviable position. ‘It is impossible for the present Government to borrow money overseas, whereas other dominions, which have not allowed their finances to drift so dangerously, experience no difficulty in obtaining all their requirements at a reasonable rate of interest.
Although the Government’s proposals will improve our financial position, I think our principal need at the moment is a rest from legislation and a period of wise administration. I doubt that we can expect this from the present Ministry. Its record is not such as to inspire confidence in its bona fides. However. I support the motion, which may be regarded as a full brother to one submitted a few weeks ago, dealing with the sugar agreement. The Senate then was given the opportunity to debate the proposal, but any decision which it might have seen fit to record would have been of no avail, because the Government was committed to the agreement. This motion also was submitted merely to allow honorable senators to discuss generally the plan which was adopted at the Premiers Conference. In that sense it has many points of similarity with the motion relating to the sugar agreement, concerning which Senator Cooper and Senator Reid had something to say this afternoon. The latter, I believe, intimated that he sympathized with those Tasmanian members who were not present when the division was taken on the sugar agreement. So far as that agreement was concerned-
– Is the honorable senator entering upon a personal explanation?
– No, Mr. President; but since other honorable senators referred to the sugar agreement, I thought I was entitled also to say something about that matter.
– The honorable senator will be in order in referring to , it if he connects his remarks with the motion before the Chair.
– The omission from the plan of any reference to the sugar agreement is a weakness of the general scheme.
– That is so. The subsidizing of industry has been especially mentioned in connexion with the rehabilitation scheme put forward by the Government. In this connexion I say. definitely, that if the scheme had included a proposal to reduce the price of sugar by 20 per cent., it would have been more in keeping with the Government’s intention to make all sections of the community share in the general sacrifice, and the people, as a whole, would have benefited to a greater extent. Had it made the same reduction with respect to sugar that it has made in respect of all bounties-
– The Government has done, nothing of the sort, and the honorable senator knows it.
– The honorable senator should not work himself into a frenzy. If there is to be equality of sacrifice, then the people of Queensland should share in it. The Government should take steps to reduce the price of sugar. If the workers in the cane-fields have to accept their share of the national sacrifice there should be no difficulty in reducing the cost of sugar by 20 per cent.
– The honorable senator’s remark shows his ignorance.
– The honorable senator must not accuse another of ignorance.
– At the mention of sugar Senator Crawford works himself into a frenzy.
– I am not working myself into a frenzy.
– I must ask Senator Crawford to assist in conducting this debate in a reasonable and impersonal manner. Those honorable senators who have not yet spoken will have an opportunity of replying in an orderly way to the observations of previous speakers.
– I am not making any personal attack on the honorable senator. I am merely pointing out directions in which the Government could confer a benefit on the whole of the people of Australia without interfering with those who have invested their money in the cane-fields of Queensland. I submit that if the workers in the canefields are to be called upon to accept reduced wages, there could be a reduction of 20 per cent, in the cost of sugar without the profits of those who have invested money in the industry being affected. I fail to understand why a Labour Government, which claims to be democratic, should introduce proposals demanding heavy sacrifices on the part of the workers, and yet signs a contract to renew the sugar agreement for a period of three years at the previously existing rates. The gold bounty and other bounties are to be reduced. I maintain that by reducing the assistant granted to the sugar industry a considerable saving could be made without causing injury to any one.
Senator CARROLL (“Western Australia) T9.50]. - As a humble representative of a political party which was not consulted by the Prime Minister (Mr. Scullin) when these proposals were being considered, I desire to say that I regard the plan of the Melbourne conference as being in the nature of a circle, which, however, is not complete. If we have heard of one thing more than another during the last two or three weeks it has been the slogan “Equality of sacrifice “.
– It. is like that blessed word “ Mesopotamia “.
– And like “ charity “, covers a multitude of sins.
One or two important considerations which have to do with the rehabilitation of. this country were, apparently, not taken into account by the conference of Premiers. There are two sections in the community which should’ be treated in the same way under any proposal for the restoration of our financial position. First, there is the importer, who is generally a citizen who lives decently with his wife and family, and contributes his share of the taxation demanded by governments - no small item in these days. He has suffered so much from embargoes, prohibitions, and high duties that he has practically been forced to close his establishment in consequence. Then we have the Australian manufacturer who, under this scheme, is not required to sacrifice one penny. Notwithstanding that in the past he has been the recipient of enormous gifts from the Commonwealth, he is not to suffer a 20 per cent, reduction in the hour of the nation’s trial. On the contrary he is to retain the full measure of protection which has been afforded to him in the past. The Minister told us of one manufacturer in Sydney who is employing 100 more persons to-day than he did previously. I assume that his employees are mostly girls. I do not object to that, because girls must live, and, if they are to live decently, they must work. I do say, however, that, even if the Government’s policy has resulted in an additional 100 employees in one place, it has thrown out of employment 1,000 persons somewhere else. Under these proposals a favoured section of the community is to be immune from sacrifice, while others less able to bear the burden are required to carry it.
– Has the honorable senator studied the stock exchange schedules lately?
– I do not hold any shares in any company in Australia, and therefore I do not study the stock exchange schedules very closely. I point out, however, that the shares of some companies are low to-day only because of the reduced purchasing power of the people. That some companies are not so. prosperous as they were does not disprove my statement that one section of the community is being given preferential treatment.
The people are beginning to realize the enormous cost of government in this country. There is no wonder that they complain. It is indeed strange that, so far as we know, the Melbourne conference did not study that question. At least, it made no proposals whatever for reducing the cost of government by attempting to evolve any scheme whereby the tremendous overlapping between the Federal and State governments could be avoided, and needless expense saved. To that extent the conference failed.
There is no doubt that, during recent years, the Commonwealth has engaged in activities which should have been left entirely to the States, in which case they would have been better performed than they now are by the Commonwealth. That invasion by the Commonwealth might have been justified had it led to the retirement of the States from those fields ; hut, instead of accomplishing that result, the action of the Commonwealth has only resulted in a duplication of activities.
Some honorable senators who have spoken have endeavoured to show why Australia, which is so richly endowed by nature, should be in such a serious position. If Australia were populated with teeming millions of people we might understand the country being in sore straits; but it is difficult to explain why so vast a country, with such a small population, should suffer a serious depression. The fact remains that the depression has occurred, and that it is very real. Various suggestions have been made to account for our present troubles. One cause of the increase in our costs of production, and therefore of our reduced purchasing power, is the dual system of arbitration which is in operation in the Commonwealth and the States. I do not wish it to be understood that I am opposed to arbitration, although I do say that it has not had such beneficial results as its authors anticipated. Those who framed the Federal Constitution never intended that the Commonwealth should invade the industrial field to any extent. I understand that it was only by a narrow majority that the framers of the Constitution decided to make any reference at all to arbitration matters, and that the provision was made only to meet extreme cases. It was intended that, generally, the industrial field should be one for State control. To-day, however, the Commonwealth and the States are endeavouring to outbid one another in the industrial field.
– The arbitration courts are principally engaged in pulling down wages just now.
– I wish that Senator Rae would realize that there comes a time when it is no longer possible to pay 30s. for either work or material worth only £1. We have reached that position in Australia; in many instances money is not available to pay wages. Every employer would like to pay the highest wages possible ; but when money is not available what is to be done ?
– Wages are earned before they are paid.
– If I received 20s. a week and produced only 15s. worth of work, how long would I be employed?
– That is not the position.
– That is the position with which Australia is confronted. The Commonwealth cannot afford to pay its commitments unless drastic reductions are made in certain directions. The sister Dominion of Canada has in some respects advantages which we do not possess, and in others we have an immense advantage over Canada. The weekly wages paid in practically every Canadian industry are higher than those paid in similar industries in Australia, but in Canada they are able to carry on without industrial troubles. Canada has no arbitration system such as we have in Australia. It provides for arbitration, but has no arbitration courts or judges controlling industry and telling employers and employees what they must and what they must not do. If industrial trouble arises the employers and employees select representatives who appoint an umpire and settle down to business. When a decision is reached a report is made to the Minister of Labour.
– That is arbitration.
– After a report is submitted the committee ceases to function.
– But that is arbitration.
– I do not say that it is not. I am contending that in Canada they do not incur the expense of establishing courts and appointing judges for whom, as legal men, I have the highest admiration, but who know little or nothing about the industrial problems upon which they are engaged. Our Arbitration Court judges have to be guided entirely by the evidence placed before them by the advocates on each side, and in that way unnecessary expense is involved. If arbitration is to be continued in this country, a simpler method must be adopted, otherwise we shall not get anywhere.
I remember reading that, after the conclusion of the American Civil War, the representatives of the Southern States were continually ventilating grievances of every description. On one occasion one of the Northern representatives said to his Southern friends : “The trouble with you people from the South is that if you were to raise more hogs and less hell you would get on better”. That seems to be our position. We have been raising too much of the latter commodity which has no exportable value. In support of that we have only to read a paragraph which appeared in the newspapers this week to the effect that about 2,000 men in one of the New South Wales collieries have ceased work, and that the trouble is likely to spread because one wheeler has been dismissed. I have no knowledge of the justice or otherwise of the action of the management in dismissing the person concerned, but it is impossible for the industries of this country to be’ carried on if operations are to be held up merely because one .employee has a grievance. That is not an isolated case; the same kind of thing is going on day after day. At present we are operating under a double-barrelled system. The employees have arbitration as one barrel and the right to strike as another, and if they miss their bird with one they will bring it down with the other. By way of interjection Senator Bae said on Friday last of the industrialists, “ What we have we hold “. That is the old law of tooth and claw. We are supposed to have advanced and to have democratic methods of dealing with our troubles. As reasonable people we are supposed to be amenable to the conditions in which we find ourselves. But how far have we advanced when such a view as that expressed by Senator Bae is held by a very considerable section of the people?
– I hope it will be held by all.
– The honorable senator reminds me of Wordsworth’s lines concerning Rob Roy -
That they should take who have the power,
And they should keep who can.
The Assistant Minister ‘ (Senator Dooley), in blaming the late Government for the position we are in, said that it realized that a change of policy was necessary only in its dying hours. He said that although the Commonwealth Government had not borrowed lavishly the figures proved that the Commonwealth Government should have restrained the States from extravagant borrowing.
– I said that the Commonwealth Government was a party to it.
– I remind the Assistant Minister that prior to 1926 the Commonwealth had no power to restrain the States. In that year the Bruce-Page Government took steps in the direction of co-ordinating borrowing by introducing the Financial Agreement Bill, which was strongly opposed by the party of which ‘Senator Dooley is a member. The financial agreement between the
Commonwealth and the States was adopted as a result of the action of a Labour Premier in Queensland, who is now the Commonwealth Treasurer, and who borrowed money at such a high rate of interest that other governments when going on the money market were compelled to pay unnecessarily high rates.
– That is absolute rot.
– Order !
– He borrowed at 7 per cent.
– I may be making a mistake, but I shall say that the then Premier of Queensland (Mr. Theodore) borrowed money at 7 per cent, when other States were paying only 5 per cent, or 5-j per cent. That had the effect of forcing up the money market against the other States.
– He did not do anything of the sort.
– The action of the Queensland Premier was responsible for forcing up the interest rates to such an extent that the Bruce-Page . Government introduced a Financial Agreement Bill in 1926 to control and co-ordinate State and Federal borrowing.
– The honorable senator must have read that in some distinctly anti-Labour organ.
– Nothing of the kind. I do not pretend to be a Solomon, but I claim to possess ordinary common sense, and to be capable of understanding what I read.
I am exceedingly glad to learn that a committee representative of returned soldier organizations has reached an agreement with the Government with respect to the reduction in war pensions.
– Their leaders have sold out.
– It is easy to make such an assertion; but I venture to say that the members of that committee realized that reductions were inevitable.
– It knew that the Government could not continue to pay the present pensions.
– It came to an agreement with the Government because it realized that that which it proposed, and which the Government was willing tq accept was the best that could be done in the interests of those whom it represented.
If honorable senators have any doubt concerning Australia’s position, they should refer to the Commonwealth YearBook in which they will find that while the number engaged in Australian secondary industries during the last four years has increased by 5 per cent., our total production has decreased by 11 per cent.
I wish also to refer to the proposed reduction in the maternity allowance. The women of Australia through their organizations are prepared to accept a 20 per cent. reduction, but, in addition to the reduction, it is now proposed to pay the allowance only to those mothers whose husbands’ income does not exceed £250 per annum. The maternity allowance when first introduced was not regarded as a charitable gift, but as a recognition by the nation of the motherhood of Australia. This Government now proposes to take the maternity allowance off that high plane, and to treat it as a charitable donation.
– The representatives of the State Governments which do not have to provide the money supported that proposal.
– That does not alter my contention that it is a drastic alteration of the basis upon which the maternity allowance was first granted. The whole principle has been departed from as the allowance was never intended to be a charitable contribution in any shape or form. The Government has taken an entirely wrong action. It should have made the reduction, and left the principle intact. I believe that the women of Australia will never forgive it for having changed that principle.
A proposal with which I do not agree relates to the gold bounty. This was not a part of the agreement originally, but I believe that it has been embodied in one of the bills that is to give effect to the agreement. The gold-mining industry is more capable of assisting this country in the present period of trouble than is any other industry with which I am acquainted. But while the bounties that are being paid to other industries are to be reduced to some extent, the gold bounty is to suffer a reduction of no less than 50 per cent. It must be borne in mind, too, that it was never intended to pay this bounty on the full production of gold, but only on what was produced above the average for the three previous years; consequently, it would have been paid on a very small proportion of the total production, whereas in the case of every other industry the calculation is made on the total production. However, I understand that there is a possibility of the Government modifying its views to some extent. Whether the crumbs that the gold-mining industry has been able to pick up will prove sufficient, I cannot say, but it is some comfort to get at least a crumb.
– The present position is quite untenable.
– No one knows that better than the Government itself. The representatives of Western Australia, which is the principal producer of gold in Australia at the present time, were foremost in their appreciation of the action of the Government in bringing down the Gold Bounty Bill some months ago, but we did not dream that before a shilling of that bounty was paid it would be reduced by 50 per cent. It is rather paradoxical that the Government should propose to reduce what has never been paid.
– Has not the goldmining industry benefited from the exchange rate?
– Not to any greater extent than any other industry which is able to send its product across the seas.
– I understand that a satisfactory arrangement has been arrived at.
– I am pleased to have that assurance. It would be more reassuring, however, if the honorable senator could tell us that the arrangement was satisfactory to both parties.
– I understand that it is. The people of Western Australia are eminently reasonable.
– To my knowledge they have never asked for anything unreasonable from this Parliament; and certainly they have never been given it.
Senator Dooley has endeavoured to make us believe that a great deal of our trouble was due to the tremendous deflation that has taken place. I remind him that Mr. Ramsay MacDonald, speaking on the Army Estimates only a few weeks ago, directed the attention of the House of Commons to the fact that the appropriation of £70,000,000 which he was seeking for army purposes, was no greater than the £50,000,000 voted in 1911. I invite the Minister to reflect on that statement, which to me indicates that there has been a good deal of inflation.
Before concluding, I should like to refer to the delightful speech that was made the other night by Senator Brennan. It was not only a model of diction, but was couched in most appropriate, and very fine, language. The honorable senator struck a note that, in my opinion, fits the position very aptly when he said that within the last few years we had lived joyously and spent our substance, and that the time had come for us to foot the bill. His words reminded me of the following passage from Omar Khayyam: -
While the rose blows along the river brink,
With old Khayyam the Ruby Vintage drink :
And whenthe Angel with his Darker Draught
Draws up to thee - take that, and do not shrink.
In Senator Brennan’s words, we have lived joyously. But the rose has now shed its bloom. We have drunk the wine to the lees, and now have to drink the darker draught. In other words, we have to pay up and look pleasant.
– We have to sober up.
– We have had our financial “jag”, and the reckoning has to be made. It is useless to blame any particular parliament, government, or person. There are crowds of business men in the big cities, now posing as financial advisers to the Government, who were guilty of making the most ridiculous investments in properties. We have all been involved to a greater or less extent. This and the previous Government were advised that the moment the prices of wheat and wool dropped, Australia would be on the rocks ; and that we should take stock of the position, and trim our sails to suit the different wind that would blow when such a time arrived. That time has arrived, and it is our duty to stand up like men to our responsibilities. Again, I say to the Government that it must compel every section of the community to bear a portion of the burden. No section must be allowed to escape. Every means of reducing the expenditure, which is now crushing the people of Australia, should be explored most minutely.
Debate (on motion by Senator E. B. Johnston) adjourned.
Queensland Loans: Interest Rates. - Conditions in Canada.
– I move -
That the Senate do now adjourn.
It is my duty to correct the statement of Senator Carroll this evening that while the present Federal Treasurer (Mr. Theodore) was Treasurer of Queensland, he borrowed money at an interest rate of 7 per cent. When that statement was made I communicated with the honorable gentleman, and I am instructed to inform the honorable senator who made it, that he has been misinformed; that on no occasion during the period that Mr. Theodore was Treasurer of Queensland did he borrow money at an interest rate of 7 per cent.
– Might it not have been while he was Premier?
– Neither when he was Premier nor Treasurer of Queensland. Honorable senators will realize that the honorable gentleman has no opportunity of defending himself in this chamber. When the statement was made it was communicated to him, and he was asked to say whether it was accurate. To me it appeared incredible. The reply to me by the Treasurer was emphatically in the negative; that on no occasion did he, either as Premier or Treasurer of Queensland, borrow money at the rate suggested.
– For the State?
– For the State.
– All that I know is that it is now being paid.
– I should like to make a brief reference to the comparision drawn by Senator Carroll, between the conditions in Canada and in Australia.
– I said that Canada was in a better position than Australia.
– The honorable senator was in Canada three years ago, but in the intervening period there has been an opportunity for that dominion to encounter misfortunes similar to those which have afflicted this country. To indicate the present position, I read the following paragraph from a letter sent to Australia by the Saskatchewan section of the United Farmers of Canada, Saskatoon, dated the 29th May, 1931 : -
We, the farmersof Western Canada, are living in troublesome times. Most of us arc facing bankruptcy ; our land is covered with mortgages. The price of farm products is the lowest in history, which, of course, makes it impossible to pay either taxes or even interest payments on our loans.
Our streets arc crowded with unemployed men and women, and to cap it all, the powers that be, i.e., both, Provincial and Federal Governments seem to bo going around in circles holding conferences and accomplishing very little by way of a solution to the economic problem.
To me, those statements establish the fact that there is a parallel between her position and ours.
– Yet the government of Canada can raise millions of pounds, while we cannot raise a shilling.
– I have rend that por tion of the letter first, because it relates to the position of the farmers and the workers of thatcountry. The letter was received by the Premier of New South Wales, Mr. Lang, in justice to whom I shall road theremainder. It is as follows : -
Dear sir, -
One of the lodges of our organization, namely, the Fennell Hall Local Lodgeat North Battleford, Sask, passed a resolution at a meeting hold recently, requesting me to express to you appreciation for the human stand taken by yourself, recently, when, according to press reports, yon stated publicly that you would not take money from labour and farmers tobe given to bondholders. The members of our organization realize that it requires a man of courage and strong convictions to take such a stand against the capitalistic exploiters, and they wish toadvise you that your action is being noted in far-off Canada.
It is, therefore, a great pleasure for us to convey our most sincere appreciation to you for the commendable stand which you have taken.
Wishing you every success, yours very truly,
I mention these matters, because there is a good deal of truth in the old saying that distant fields look green. Canada, like other countries, including Australia, was probably enjoying a period of prosperity when the honorable senator was there. Since then there has been ample time for it to meet with misfortune similar to ours. If we except Soviet Russia, which honorable senators generally do except, I venture to say there is not one country in the world to-day that has not at present tens of thousands of unemployed, the number, of course, varying according to local conditions. The worldwide unemployment figures amount, according to the statisticians, to upwards of 30,000,000 people. It all goes to show, as I have maintained all along, that, apart from local circumstances, the whole capitalistic system under which we live has almost reached the point of collapse. It was the declaration of a very orthodox philosopher and economist, John Stuart Mill, that small means are worse than useless in coping with big problems. The remedies put forward by the Premiers Conference, I contend, will only carry us over a few months, by which time we shall have to take further steps in the downward path we are now treading.
– When I made my comparison between Canada and Australia, I had thought of what the position of . Canada was when the parliamentary delegation was there. What I had in my mind was the simple fact that a month ago the dominion applied for a loan of £54,000,000 at 4½ per cent., and it was subscribed seven times over inside a day, whereas we are unable to borrow at all.
Question resolved in the affirmative.
Senate adjourned at 10.33 p.m.
Cite as: Australia, Senate, Debates, 8 July 1931, viewed 22 October 2017, <http://historichansard.net/senate/1931/19310708_senate_12_130/>.