12th Parliament · 1st Session
The PRESIDENT (Senator the Hon.
W. Kingsmill) took the chair at 3 p.m., and read prayers.
Wheat Bill to Receive Support”.
At a meeting held last night of the Oppositionin the Senate, it was decided to restrict the amount of supply given to the Government to an amount for two or three months.
This decision will be adhered to until the budgetary position improves, the view expressed being that Parliament should not go into lengthy recess’ until there is a definite improvement.
Senator Sir George Pearce will to day convey this decision to the Prime Minister (Mr. Scullin).
In justice to those honorable senators who sit on the Opposition side of the chamber, I wish to say that that statement is entirely unauthorized and also incorrect. I made no such statement to the press. A meeting of honorable senators who sit in opposition to the Government, representing both parties on this side of the chamber, was held. Such meetings have been held from time to time, but at them uo motions are submitted and no decisions are taken; nor can they be, in view of the composition of the Opposition. Yes.terday’s meeting was called for the puipose of enabling honorable senators to exchange views on the various matters coming before the Senate, but it did not come to a decision to restrict Supply as indicated by the Canberra Times paragraph.
– Can the Leader of the Government in the Senate say what are the statutory rates of wages payable to unemployed members of trade unions in Canberra who are engaged on such casual work as gardening?
– The honorable senator was good enough to inform me that he proposed to ask this question. The rates of wages paid to gardeners in Canberra are as follow: - Gardeners in charge, ?7 and ?6 ; leading hands ?5 18s and ?5 12s. ; labourers, ?5 12s. and ?5 6s. ; workmen providing horse and dray, ?6 lGs. ; tool sharpeners, ?5 16s. 6d. ; ranger, ?6 10s.; caretaker, ?5 10s., and lorry driver, ?5 15s.
Assent to the following bills reported : -
Invalid and Old-age Pensions Appropriation Bill 1931. Loan Bill 1931.
The following papers were presented : -
The Budget, 1931-32 - Papers presented by the Right Honorable J. H. Scullin, P.O., M.P., in connexion with the Budget of 1931-32 (Final issue).
Seat of Government (Administration) Act - Notice of variation of the plan of layout of the City of Canberra and its environs, dated 16th July, 1931.
– On the 16th July Senator Foll asked the following questions, upon notice: -
The answers to the honorable member’s questions are as follow: -
asked the Minister representing the Minister for Trade and Customs, upon notice -
– The answers to the honorable senator’s questions are as follow : -
Senator DUNN (through Senator
Bae) asked the Minister representing the Minister for Home Affairs, upon notice -
In view of the 20 per cent, reduction in salaries and allowances, will the Government consider the desirability of reducing charges for board and lodging in the hotels in Canberra?
– The matter is at present under ‘consideration.
Senator BARNES (Victoria - Vice-
President of the Executive Council) [3.11]. - I move-
That the bill be now read a second time.
The bill will provide for the rates of income tax to be applied in assessments for the present financial year, and will give effect to the Government’s proposals: - (1) to increase the normal rates - the rates exclusive of the special tax on property incomes - of tax payable by companies and individuals by 5 per cent, all round ; and (2) to increase the special tax on taxable incomes from property from7½ per cent, to 10 per cent, of the amount of that income.
The estimated yield of additional tax from the increase of 5 per cent, is £380,000, and that from the increase of the special tax on property incomes is £830,000. The balance of £290,000, necessary to make up the estimated total additional revenue of £1,500,000, is expected to be obtained from the reduction of the general exemption of personal exertion incomes from £300, diminishing by £1 for every £3 of the excess over £300 and vanishing at £1,200, to £250, diminishing by £1 for every £2 of the excess over £250, and vanishing at £750.
The latter reduction will be provided for in the Income Tax Assessment Bill, which is to be introduced.
The special feature of this bill is the consolidation of the original schedule rates of 1915, and all the existing supertaxes, and additional and further taxes, except the special tax on property incomes, into one rate expressed in a simple formula for personal exertion and property incomes respectively, and ascertainable in respect of any given amount of taxable income by a simple arithmetical calculation. The confusion resulting from the existing super-taxes, and additional and further taxes, and the complexities of the curves of the second and third degrees represented by the existing formulas has been a source of continued annoyance and trouble to the vast majority of taxpayers, and has, in its practical result, made them completely dependent upon the Taxation Department’s ready reckoners for the ascertainment of the extent of their liability for tax.
In order to eliminate, where practicable, complexities in the system of taxation, the Government instituted inquiries into the possibility of obtaining a more simple rate without materially altering the result obtained under the existing system in the amount of tax assessable in any particular case. After consideration, Professor Giblin expressed the opinion that the desired result could be obtained. The new consolidated rates are fully explained in Professor Giblin’s notes which have been circulated amongst honorable senators. The rate of tax on income from personal exertion is contained in the first schedule; and that on income from property is contained in the second schedule. To calculate in any particular case the amount to be added for the special tax on property incomes, it is merely necessary to add to the tax calculated under the second schedule 10 per cent, of the amount of the taxable income from property.
Attached to the circulated notes of Professor Giblin are two statements, table A and table B, which give a comparison, at stated amounts of taxable income, between the rate which would apply and the tax which would be paid if the old method of calculation were applied to the taxes proposed for the present financial year, and the rates which will apply, and the tax which will be paid under the new method. The tables also compare, at stated amounts of taxable income, the taxes which will be paid, for the present financial year 1931- 32, with the taxes which were payable for the last financial year 1930-31, but as the tables have not been worked out to the last decimal point, the actual tax may differ to the extent of a few pence from the tax so shown. It will be observed that the rates under the old and new methods, respectively, differ in most cases only by small fractions of a penny, although here and there they approximate to, and even exceed, one penny, as at taxable incomes from property of £500. £3,000, £5,000, £10,000, and £20,000’. The differences are sometimes against the taxpayer, as at £500 and £3,000 taxable income from either source, and sometimes in favour of the taxpayer, as at £3,001, £10,000, and £20,000 taxable income either source.
In the case of incomes from personal exertion, the rates under the new method are, in general, slightly less than the rates under the old method. The effect of the proposed rates is illustrated by two graphs which have been drawn up by Professor Giblin for the purpose of comparing, up to a taxable income of about £600 from each source, the graduation, of rate under the old and new methods, respectively. Two further statements have been circulated. One shows the effect of the reduced general exemption of personal exertion incomes and also compares at given amounts of nef. and taxable incomes from personal exertion, the tax payable at existing rates for 1930-31, and the tax payable under the rates proposed for 1931-32. The other similarly compares the tax payable on property incomes, including the special tax of 10 per cent., under the existing and proposed rates, respectively. Apart from the excision of the provisions for super taxes, &c, the new first and second schedules and the other aspects dealt with, the bill will be practically identical in form and contents with the Income Tax A.cts 1930. It is merely necessary to point out that clause 5 replaces section 7a of the 1930 act, and that sub-section 3 of that section is omitted from clause 5 for the reason that it relates specifically to income which was actually derived during the year 1929-30, and therefore has no function in any act which applies to income subsequently derived.
Debate (on motion by Senator Sir George Pearce) adjourned.
Additions, New Works, Buildings, etc.
Debate resumed from the 22nd July (vide page 4205) on motion by Senator Dooley -
That the papers be printed.
– The consideration of the budget involves honorable senators in a realization of certain unpalatable facts which the document and the supplementary papers associated with it contain. The Government’s proposals provide for imposts which in their nature are more serious and more staggering than any formerly contemplated. During the past few days we have had a general discussion regarding the position which this bill, and the other measures associated with it are intended to overcome. Various reasons have been assigned for our present unsatisfactory financial position. We have heard a great number of generalities, in which the Government has been assailed from many angles; but not one sound alternative to the Government’s proposals has been advanced. We have been told, in a general way, that our difficulties would disappear if the party represented by honorable senators opposite occupied the treasury bench, but there has been an entire absence of any constructive criticism of the Government’s proposals or of any workable alternative.
While we all sympathize with the community in the sacrifice which these measures demand, and desire that the imposts shall be as light as possible, all thinking persons in the community realize we must do more than merely arrest the drift; we must take action to improve our financial position. Intelligent persons, when judging the Government, will not only weigh the immediate effect of its actions upon the community; they will also have regard to the many years of inaction on the part of its predecessors, which led up to our present position. They will realize that the financial difficulties which this budget is designed to remove are not the creation of the present Government, nor of the party it represents, but of those who, while criticizing the Government, have failed to suggest a workable alternative to its proposals. The right honorable the Leader of the Opposition (Senator Pearce) offered some criticism which might perhaps be formidable were it not that he was a member of the Bruce-Page Government for about seven years. The right honorable gentleman saw fit to take the present Government to task because of the policy it adopted shortly after it assumed office to correct the adverse trade balance, which had been getting worse during the period when the Government of which he was a member was in office. During that period the imports of merchandise into Australia were valued at approximately £892,000,000, whereas our exports of merchandise were valued at £832,000,000, leaving an adverse trade balance of approximately £60,000,000. Those years were seasons of great prosperity; nature was kind to our principal industries, and the prices of our stable export commodities reached higher levels than at any time previously. Metal prices also were far above the average during those years. The difficulties which confronted the present Government on assuming office are not fully revealed in the £60,000,000 which I have mentioned, because, in addition to the adverse trade balance, Australia, had big annual commitments for interest and sinking fund on her external debts. In order to maintain a proper balance of trade and national solvency, it was necessary to do more than make our exports equal our imports. Additional wealth had to be created. In addition to the advantage of good seasons and high prices, the Bruce-Page Government took over from its predecessors a credit balance of Australian funds held in Loudon amounting to £24,000,000. Despite those advantages, it left an adverse trade balance of approximately £60,000,000 when it relinquished office.
Senator . O’Halloran.
A legacy of debt was inherited by the present Government. It ill becomes the Leader of the Opposition to criticize the measures taken by the present Government to restore a favorable trade balance, when the Government of which he was a member took no steps to deal with the position.
– How much of the amount owing in London was represented by the indebtedness of the States?
– I dare say that the States were responsible for a great deal of Australia’s financial difficulties during that period.
– The honorable senator should be sure.
– I am not going to run away from the fact that the indebtedness of the States had an influence upon Australia’s accruing financial difficulties during that period. The point I wish to make is that had the Government of the day taken proper steps to correct the position, the States would have been prevented from contributing to Australia’s indebtedness to the extent they did. In the light of the facts T have just mentioned, it seems almost incredible that the present Government should be accused of tinkering with the tariff, as some have suggested.
– Did the honorable senator say tinkering?
– Yes. We have heard honorable senators refer to the attempts of this Government to restore trade equilibrium between Australia and the outside world as tinkering with the tariff. Those who in the main are responsible for the position should remain silent if they cannot help the Government by offering some constructive suggestions. Owing to the heavy drain on London funds it was almost impossible for this Government, on assuming office in 1929, to meet its commitments there, and it found that there was no alternative but to take immediate steps to correct the adverse trade balance.
– And by so doing it averted default.
– If finances had been allowed to drift as they were drifting in the early months of 1929, before this Government took office, the Commonwealth would undoubtedly have been compelled to face default in her overseas payments long ere this. The Government has, at least, been successful hi correcting that position.
– And in increasing the army of unemployed to approximately 400,000.
– The position had to be met, and the Government has succeeded to the extent of dispensing with the spectre of default by meeting its overseas commitments when due.
In order to show how successful the Government has been, let us examine the figures for the first eleven months of the last financial year as compared with those of the previous financial year. For the first seven months of the last financial year, the imports were valued at £43,500,000 and the exports at £50,000,000. The Government thus converted an adverse trade balance into a favorable trade balance of £6,500,000. If we compare the figures for the corresponding period in the year 1929-30 we find that the imports were valued at £87,000,000, and the exports at £55,000,000, leaving an adverse trade balance of £31,000,000 for that period. If we continue the comparison up to the 31st April, 1931, the last date to which the Statistician’s figures are available, there has been an excess of exports over imports of approximately £24,000,000, which when we reduce it to its present exchange value in Australian currency, is approximately . £20,000,000. In summarizing the position we find that when the Bruce-Page Government went out of office after a term of over six years, it left its successors an exhausted loan market, impaired credit at home and abroad, a heavy debit balance in Commonwealth cash accounts, a collapse of revenue in almost every department, a shortage of funds in. Australia to meet commitments already entered into, in some cases commitments in regard to which money had already been expended, and, finally, the task for its successors to provide in one year no less than £71,000,000 to meet maturing Commonwealth loans. With this record behind it, which at least must be known to those honorable senators who were members or supporters of the previous Government, I am surprised that any criticism should be levelled at this Ministry for taking the corrective measures I have outlined. .
The Leader of the Opposition (Senator Pearce) quoted figures the other afternoon to show that the action of the Government in increasing customs duties, which was the corrective applied in order to restore the trade balance, had unduly penalized the primary or export industries of Australia. He quoted figures to show that in comparison with the 1911 rates there was a great difference between the index figures of 1930 with respect to primary and secondary industries. We know that there was a remarkable increase between 1911 and 1928 in the price of both primary and manufactured commodities. We also know that since then there has been a sharp and disastrous decline in the price of wool, wheat and metals, which are our principal exports. That is not due to the present Government’s action. Had there been no additional tariff imposts the difference between the index figures of primary and secondary production would probably be as great as, if not greater than, it is today. We have heard a good deal about the alleged intolerable burden imposed upon primary producers, principally by the tariff, which is designed to encourage the manufacture of machinery and farming implements in Australia. I have some tables showing comparative prices of the principal implements required by primary producers between 1913 and 1930. For instance, in 1913 a fourteen hoe seed drill cost £39, and in 1930 it cost £56. There was a corresponding variation in the price of fourteen and sixteen-disc drills, which I shall not quote. In 1913, chaff cutters cost £20, and in 1930, £26. A three-furrow plough cost £26 5s. in 1913, and £36 in 1930. A stump-jump, four-furrow, disc plough cost £36 in 1913, and £44 in 1930. Stump-jump harrows, four-section, with bar, cost £8 and £8 15s. respectively. Stripper harvesters 6-ft. cut cost £85, and £119 18s. 6d. respectively, while the 8-ft. out type cost £110 and £158 18s. 6d. respectively.
I wish to draw particular attention to the comparative prices of agricultural , implements in 1920, under a low tariff, and a non-Labour Government, of which the present the right honorable the Leader of the Opposition (Senator Pearce) was a very prominent member, and in 1931, under a Labour Government and a very high tariff. In 1920 an 8-ft. harvester cost £237 10s., while in 1931 the same type of harvester costs only £153 15s. 2d. The 8-ft. stripper harvester, which is a slightly different implement, cost £187 10s. in 1920, but costs only £145 Ss. 6d. in 1931. The implement known as the combine, which is used by the majority of Australian fanners, and which combines in one operation the two processes of cultivation and seeding, cost £92 12s. 6d. in 1920, whereas the price this year is £67 13s. 9d. I here interpolate that that particular implement is being sold to-day at a lower price than at any time since its manufacture was begun either in Australia or elsewhere. A sixteen-hoe drill cost £75 ls. in 1920, and £55 ls. Id. in 1931. A four-section harrow cost £5 6s. lid. in 1920, and £.i 16s. 6d. in 1931. The ten-disc Sundercut cultivators 0061 £72 4s. in 1920, and £49 12s. 9d. in 1931. I could go down a long list of popular agricultural implements which are in every-day use on the farms throughout Australia, and show that in 1920, under a low tariff and a non-Labour Government, the prices were in all cases very considerably higher than they are to-day. Honorable senators opposite, instead of criticizing the Government for having taken action that has not only rectified the trade balance, but also has been responsible for reducing the cost of these requisites of the primary producers, ought to commend it or remain silent, seeing that during the period when their party was in office the prices were permitted to rise under a low tariff to the extent that I have indicated between 1913 and 1920.
I have referred to borrowing abroad, which we who sit on this side of the chamber have criticized and condemned for many years, and which I venture to assert is responsible for Australia’s major financial difficulties to-day. In this connexion, an illuminating article was published in the Sydney Bulletin of the 16th July last. The Sydney Bulletin, as honorable senators well know, is no admirer of Labour governments or of Labour’s policy; but within certain fundamental lines it fights for Australian industries and the maintenance of an Australian sentiment. Those fundamental lines differ somewhat from certain portions of Labour’s policy; but in so far as this newspaper seeks to further and to protect the interests of Australian industries and to create an Australian sentiment, it is 100 per cent, in accord with the policy of the Labour party. In this very informative article it shows clearly and convincingly that what we have been told again and again was cheap money has proved to be very dear money. The article is so excellently written, that even at the risk of wearying honorable senators I intend to quote it in full. It is entitled, “ The cheap home-made, and the costly imported “, and reads -
In the pre-federation days of mixed tariffs, New South Wales, as the State which was intoxicated with importing ideas, tended to import its debt: while Victoria, inclining more and more to protection, leaned towards the locally-manufactured article. The other States took no very definite stand. As a result, there are striking variations in the oversea interest bills of the various States. These are the six of them at the end of June, 1930, apart from the unknown quantity, interest on casual overdrafts, cadges, misappropriations, and steals -
The position in Victoria is striking in contrast with the position in New South Wales, where the interest payable overseas is approximately £3,000,000 greater than that payable in Australia. The article goes on to say -
The London or New York interest has to be paid by the export o£ gold, of which the local supply is now only a drop in the bucket of the demand (the drop is nearly exhausted and the bucket has grown out of all knowledge), or by the export of goods which oversea people can be persuaded to buy for gold. Sometimes they are very hard to persuade, especially people in New York. In a time of adverse exchange, like the present, £100 borrowed oversea at 0 per cent, costs really 8 per cent., the extra £2 being exchange, brought about by the excessive importing habit. A 6 per cent, imported debt may cost £8 net for the use of £100 for one year, as it is doing now. A 6 per cent. Australia-made debt may cost £4 net for the use of £100 for one year, being the nominal £0 less taxation. There is always some taxation to come off the local £6, for the Australian bondholder is a lawfully taxable Australian subject, and in bad times the lawful taxation may be heavy.
New South Wales, as the State whose political fossils stood for the freetrade and importing idea, is naturally the State with far the largest oversea debt, the largest oversea interest” bill, and the largest calamity to face reason of the lamentable exchange problem. Also the State with the braggart freetrade tradition is tlie first and only one to go basely and shamefully bankrupt, and leave its burdon to its neighbours, the five non-repudiating States of the Commonwealth, and especially to Victoria, the State with protectionist traditions. On the other hand, protectionists were naturally the first to realize that it is worth while to keep such an industry in the hands of our own people. Not only do our own people take £4 net in these hard times when others demand £8, but they accept payment in a currency which London and New York despise, and which even the half-way nigger at Colombo regards with a sniff. ‘ ‘I
A home-made debt, if there must be a debt, which seems doubtful, should be the first plank of a Banc political platform. Other things will follow.
I think that article worthy of placing on record in Hansard.
– It sums up the position very well.
– It sums it up in a way that cannot be confuted. The article refers to the difficulty Australia experiences in persuading its creditors abroad, particularly those in America, to purchase Australian commodities. The figures relating to the trade between Australia and the United States of America for the last six years a’re proof of this. They also indicate the influence which this difficulty has had upon the position of Australia during the regime of the present Government. Whereas Australia in six years imported goods to the value of £212,000,000, America took from Australia, only £43,000,000 worth of goods. The adverse trade balance, so far as Australia is concerned, was £169,000,000. Yet honorable senators opposite criticize the Government for having taken steps to rectify that position, and prevent Australia from falling back as a nation.
I think it was Senator Foll who vigorously condemned the Government’s monetary policy, but I venture to say that, if the Government had been permitted to give effect to its monetary and banking policy, much of the unpalatable legislation now before this Parliament, and many of the drastic steps authorized by this legislation, could have been avoided. In the main, our difficulties have been brought about by the destruction of equity in all classes of property, from the smallest home in the poorest suburb to the greatest industrial venture in the land; from the property o£ the smallest orchardist eking out an existence on a few acres to the largest holding in our pastoral areas. During the last few years producers have had to submit, not only to lower prices for all their produce, but also to a 50 per cent, drop in the value of their equities; and, if they have been mortgaged, or encumbered in any other way, their plight has become, not only intolerable, but also impossible. The position could have been rectified by an application of the financial and banking policy of the government of the day which was rejected with contumely by honorable senators opposite. Senator Foll said that the people in Australia, in years to come, would look back on this period and thank God for a Senate which frustrated the desires of the present Government to indulge in an inflationist policy. Why cannot we get away from such terms of abuse as “ inflationist “ or “deflationist”? During the last six months a new term of opprobrium has been added to Australian slang which is more calculated to stir the ire of some people than other and more vicious terms would have done a few years ago. You can call a mau some nasty names and get away with it, but, the moment you call him an inflationist, he becomes very red in the face, and angry in his demeanour towards you. Why cannot we discuss monetary and banking problems in a common-sense way, or apply to them ordinary sound lines of reasoning, instead of indulging in flights of mystic oratory, and producing mazes of figures which no one seems to understand? The Government put forward a policy which honorable senators opposite upset solely by weight of numbers, and not by sound argument, and they claimed that, in doing so, they had done Australia a good turn. In this connexion, I draw attention to an article published in the Sydney Morning Herald of the 20th of this month, giving a brief resume of an address delivered by
Professor GustavCassel in London a short time ago. Professor Cassel is a banking authority of international repute and renown, whose arguments,because it then suited them to do so, were used by honorable senators opposite against the Government’s proposal to establish a central reserve bank. I trust that they will take his . advice on this occasion, because it happens to coincide in the main with the financial policy put forward by the present Government. The Herald article is as follows: -
What is regarded by the acknowledged authorities in London as one of the most brilliant and important contributions to the recent numerous considerations of the world’s economic troubles was given this week at the Bankers’ Institute by Professor Gustav Cassel, the Swedish economist. Of the many eminent economists who have dealt with aspects of the post-war crisis, few have occupied greater prominence than Professor Cassel. Moreover, he was early in the field with his observations on the situation soon after the termination of hostilities in 1918, and was among the earliest to appreciate the many and complex problems with which the world wouldbe faced during the years following the war. from his writings during recent years, and from the lecture delivered last night, it is evident Professor Cassel is among those, who, while recognizing that there may be many causes responsible for the present industrial depression, believe that the primary cause is connected with gold suppliesand monetary policy.
Those introductory remarks stamp the lecturer with the hallmark of knowledge and authority. Professor Cassel took to task all the countries of the world for the uneconomical methods they had applied to the difficulties born of the war. He took them to task over a long list of items.
– I admit that he criticized the tariff operations of certain countries, and, of course, we have to give to his criticism in that regard the same consideration we must give to what he says upon other points.
– And that is no consideration.
– That remains to be seen. Many arguments could be advanced in reply to the honorable senator, but I wish to get on with the point which I am now endeavouring to stress. After dealing with the difficulties in which most of the nations of the world, particularly those in central Europe, found themselves, Professor Cassel said -
The only possible remedy for their present difficulties was obviously a systematic reduction of central banks’ requirements of gold reserves. For this purpose the Gold Delegation of the League of Nations had recommended the international agreement with respect to a general lowering of the legal requirements of gold cover. Doubtless such an agreement would be useful if it could be attained. But as existing legislation in this matter varied very widely, and as the prevailing ideas on the best methods of regulation differed at least as much, there was very little prospect of coining to a result on these lines, at least within a reasonable time. To him it seemed far better to take the more radical step of immediately abolishing all laws regulating the gold reserves of the central banks.
In other words, a policy of less reliance on the gold reserves of central banks would put the international currencies of the various countries on a fiduciary basis. Yet yesterday the Government was criticized in this chamber for its attempt to issue a limited fiduciary currency in order to take the place of Australia’s depleted internal credit.
– The honorable senator does not suggest that Mr. Theodore’s scheme was the sameas Professor Cassel’s ?
– No ; but Professor Cassel’s scheme to remove the limitation on the issue of central reserve banks, so far as it is covered by gold, would have the same effect as the scheme promulgated by the Commonwealth Government.
– The honorable senator is quite wrong.
– It would make the credit of the central reserve banks to a much greater extent fiduciary credits than they are to-day, and in that respect it resembles our proposal.
– Professor Cassel was very definite in saying that no one country can do it alone.
– In the report of this speech from which I am quoting, Professor Cassel admits the difficulty of securing agreement amongst the various countries.
– The honorable senator should read his works.
– This Goernment proposed a fiduciary currency issue of £18,000,000 for a specific purpose. Apart from the soundness of that scheme, at a time like the present, it is necessary to increase our currency supply. Experience has shown that ic. times of prosperity a greater volume of business is conducted by means of a cheque currency, whereas in a time . of adversity, like the present, bank credits and overdrafts being restricted, business people, particularly those operating on a smaller scale, conduct a greater volume of trade on a cash basis. This is a point which is emphasized bv Professor Cassel. He also points out that the fall in commodity prices is due largely to the decline in the purchasing power of the people of different countries. He concluded his lecture with this emphatic declaration -
No further time should be wasted in listening to those false prophets who, by their resistance to every endeavour to gain control over the monetary system, had helped to bring about, intensify and prolong one of the most disastrous catastrophes to which the world had ever been exposed. It was time that the leading central banks came together and made an end of the depression, simply by declaring that they intended, from that moment, to supply the world so abundantly with means of payment, that no further fall in prices would be possible.
That is the policy of this Government. Its intention, in introducing its fiduciary currency proposal, was to put in hand developmental works which, by every test that could be applied to them, would have returned not only interest upon the capital invested, but also a profit. Those works could have been undertaken by State Governments and other reputable and responsible authorities. In all the States there were large bodies of men eager to work but unable to obtain it. All that stood between thom and employment was the absence of credit resources. This lack of credit to create new wealth is a tragedy, and it is upon this point that I join issue with the policy of honorable senators opposite. They do not stand for Australia being made a self-contained nation. They believe in the lowering of our tariff barriers so as to permit of the free imports of commodities from foreign cheap labour countries. On Tuesday Senator Daly ex posed the evil of this policy. The honorable senator quoted from a list of imports amounting in. the aggregate to several millions of pounds worth of primary and secondary products, and showed that all of them could be, or are being, manufactured in this country, but because of the restricted purchasing power of our people due to the absence of credit facilities the industries that are operating are not prosperous.
When first I entered this chamber the percentage of unemployment in all the States was very high, and with a view to checking the upward trend in the figures, we urged the Bruce-Page Government to abandon its immigration policy under which there was a regular influx of work-seekers from other countries. But our request was emphatically refused, and as a consequence, further migrants came to Australia, only to be disillusioned as to their prospects of obtaining employment. Yesterday we had the unfortunate spectacle of a deputation being introduced to the Prime Minister representing 5,000 migrants, all of whom had come to this country within the last five or six years, and asking that the Government repatriate them. Although in the Mother Country the army of unemployed is well over 2,000,000, these people believe that they would be better off in Great Britain than they are in Australia.
– According to the honorable senator’s argument, since no migrants- are now coming to Australia, this country ought to be prosperous.
– I have never argued along these lines, and I am not doing so now. The right honorable gentleman is merely misinterpreting my remarks to suit his own purpose. I have always contended that forced migration is an unsound policy, and that the only satisfactory method is to encourage the development of enterprises which will give employment to large numbers of people at remunerative rates, and thus attract to this country migrants of the best type. That should have been the policy of the Commonwealth in its years of prosperity, because then ample finance could have been obtained, not only overseas, but also in Australia, and, therefore, it would not have been necessary to borrow abroad for these purposes. The previous governments should have corrected our trade balance by the encouragement of” those! industries which would have provided employment, and supplied many of these Commodities which at present are being imported. That is the policy of the present Government. I am firmly convinced that only in this way shall we be able to get Australia out of its present difficulties, and place this country again on the high road to prosperity.
– The motion gives honorable senators an opportunity to discuss, in more dr less detail, the position in which this country finds itself, and the causes that are responsible for our present difficulties. But unfortunately experience teaches us that a great deal of speech1making sometimes is necessary to make any converts. It has been said that under modern methods of warfare it takes about a ton of lead to kill a man; so iri like manner, it takes hours, days, and sometimes weeks, to pulverize some of the sophistries that gain currency for common sense. The -trouble with political parties, so far as my observations go, is that they are hot frank enough to admit the error of their ways oi” faults in their doctrines. Their leaders, and for that matter, the rank and file also, believe that their policy is all wise- that it is as untouchable as the Ark of the Covenant. There is, therefore, an obligation on the ordinary man in the street, and I place myself in that class) to look around, and even at the risk of being disrespectful, examine these political theories and see if precept squares with practice. Perhaps this is more necessary in politics than in any other walk of life, for it would appear that this gentle art of not squaring precept with practice owes its popularity to the fact that there is so much profit to be “made out of not doing it and trading upon human credulity.
For many years the unfortunate electors of the Commonwealth have had poured into their ears a great deal 6’f political nostrums in the guise of democratic principles, especially designed for their particular benefit. In course of time they have become disillusioned, and they have’ come to realize that precept does Sot square with practice. So the time comes when those who have been misleading the” people find that there is no longer profit in the business, because the electors,- having now no illusions con.cerning the ability of so-called political leaders to honour their pledges, require them to deliver the goods. I expect we all recall what happened nearly two years ago, when an appeal was being made to the people. The alleged misdeeds of the Bruce-Page Government were magnified by loud-mouthed demagogues at Street corners, and wherever the people could be induced to gather. The electors were told that all the evils from which this country was then suffering, and which threatened it in the near future, were due to the maladministration of the Bruce-Page Ministry. They were further assured that the one thing necessary to right the wrongs was to bundle that Government out of office and elect iii its stead a Labour Government which would ensure prosperity for evermore. The poor deluded electors listened to the appeal, and dismissed the Bruce-Page Government. One charge made against the then Prime Minister (Mr. Bruce) was that he proposed to reduce governmental expenditure by £500,000, and to curtail expenditure of loan money. The people accepted their advice and placed the Labour party in power. They expected that when the Bruce-Page Government was ejected from office, and the Labour party put in its place, a magic wand would be waved and the whole land made to bloom as a rose. A Labour Government has been in office for 22 months. What has been the result? Its eyes, like those of a young kitten, have been partially opened. It is beginning to realize that its statements before the election did not square with facts ; that instead of the malignant cause of Australia’s woes being the Bruce-Page Government, the underlying causes of our present serious financial and economic position are worldwide. Twenty-two months ago we heard nothing from the Labour party of worldwide economic conditions, because, according to those geniuses, there was no world outside Australia. To-day, a Labour Government i& faced with hard economic facts; it finds it exceedingly difficult to deliver the goods. In fact it baa defaulted so far as its promises are concerned. Consequently, it has to admit now that Australia’s troubles have their cause beyond the BrucePage Government in world-wide conditions. The electors of Australia are learning that those who profess to preach the undefiled gospel have deceived them. It is clear that the electors of Kew South Wales, at least, have at last realized that they were deceived. If an opportunity were given to them they would relieve the present Labour Government in that State from its responsibilities ; they would send it about its business as the electors of the Commonwealth did the BrucePage Government. ‘
We have taught the people of Australia to lean, too much on governments. There was a time when the people of this country were told to stand erect, and r.o work out their own material salvation. But times have changed, and now the doctrine poured into their ears is that they should lean on governments - lean hard, at an angle of 45 degrees. The preaching of that doctrine has caused the genuine Labour party and the Nationalist party to be thrust aside. The people of Australia must remodel their notions; they must be brought to realize that if this country is to be reclaimed and their title to hold it made unchallengable they must stand up to their duty as citizens, and lean less on governments.
All political parties have been guilty of making too many promises to the electors. The Labour party has been by far the greatest offender in that respect. In its early days the Labour party taught that citizens may lean on governments to some extent, while generally standing erect, but in these later days it teaches that national progress depends on governments controlling everything from fish shops to shipping services.
Some years ago an effort was made by a number of Australians to found an ideal settlement, based on socialistic ideals, in South America. They left Australia because they were disgusted with the condition of things in this country. I was in the Sydney Domain when the first batch of emigrants was farewelled. Towards the close of the meeting a schoolmaster from South Australia, who was leaving with the contingent, addressed those present, some of whom had expressed sorrow that so many were leaving Australia. The schoolmaster told them not to sympathize with those who were going, but to be sorry for themselves for having to remain in a capitalist “ ridden “ country. Those views were expressed by a schoolmaster - a man of more than average intelligence. In South America his views changed, for after shedding his wild notions he returned to Australia, where he was glad to settle down and make a living for himself. I point out that that band of pilgrims was composed of intelligent men and women - a body of citizens quite unlike the poor dupes of Russia, where 170,000,000 people are governed by 2,000,000; where a band of usurpers rules with a lash of scorpions. The people of Russia are groaning under the heel of tyranny ; they are without liberty. Those Australians who attended the Third Internationale at Moscow know that in Russia labour is conscripted.
– What has all this to do with the budget?
-Under the Standing Orders, I am at liberty to wander over a fairly wide field in order to extract useful lessons for the benefit of the people of Australia. I referred to Russia and the conditions in that land to show what would happen in this country if a party imbued with the ideas of the ruling powers of Russia obtained control. In Russia, there is no liberty. Russia is a land where it might almost be said dead men walk about, constantly goaded and ground down by a band of lawless usurpers. If Senator Rae were in Russia and said “ booh “ against the party in power, it would be the last “ booh “ he would ever say. An order would go forth that at 8 o’clock the following morning Senator Rae was to stand in front of a stone wall, and meet a salute of ten Russian guns. In this capitalist country he can “ booh “ even his own Government and get cheered for it. The men here who talk so much of liberty ought to go to Russia; but they know it is a good country to avoid.
The experiment in South America, which I have mentioned, shows that even among intelligent people socialism is a rank failure. That venture was a tragedy. Those who went there moved from one stage to another, until finally there was not even a trace of the ideal that they left these shores to hold up to the world. My point is that if socialism is a failure when attempted by enlightened men, what a tragedy it must be when attempted by the poor ignorant dupes of Russia!
During the last election campaign, the Labour party made so many promises that it would be impossible to count them. Not one of those promises has been fulfilled. Pressed for a reason, the party says that world conditions have made their fulfilment impossible. Twenty-two months ago the Labour party was returned to power and pledged never to touch old-age pensions, the maternity allowance, or the salaries of public servants; to-day, it has done all these things. It is either a party of humbugs and political windbags or it is a party which does not know what it is talking about.
I submit that most of our troubles are of our own making. Many figures have already been quoted during this debate. I shall not repeat them; but I desire to quote some to show that the poisonous doctrine which has been, preached in this country is largely responsible for our present unfortunate position. Why cannot Australia pay its way? The answer is that production is not on the scale that it ought to be. If we had the wealth that we ought to have, and, indeed, would have if only the spirit that actuated those of 25 years ago and previously obtained to-day, we should have sufficient wealth to pay in full the salaries of public servants, oldage pensions, and the maternity allowance, and still have something to spare. Production in Australia has been brought almost to a standstill, and consequently the nation is without money. When a nation is without money, its people must go short.
Is the Nationalist party, or the Country party responsible for the paralysis of industry? What is the position in the coal industry to-day? In the YearBook, I find that in 1907, New South
Wales exported 3,330,000 tons of coal and in the following year, 3,300,000 tons. Let us compare that output of over twenty years ago with the output in 1927 and 1928. One would expect an increase.
– No; oil has displaced coal to a great extent.
– I have given the figures for New South Wale3 because the figures for the whole of the Commonwealth are not before me, nor are they available. New South Wales being the biggest coal-producing State, provides an example which is sufficient to show the trend of affairs ill regard to the export of coal. In 1927 the exports totalled only 1,600,000 tons, and in 1928, 1,100,000 tons, showing a clear decrease, as compared with 1907-08, to one-third, or a 66 per cent, decline. During that period the population of Australia increased, and one would naturally assume that our export coal trade would also keep pace and have increased. Why did the export of coal from New South Wales decrease by twothirds during the period mentioned?
– The use of fuel oil is responsible for nearly the whole of it.
– There is a chorus on my left to the effect that the use of fuel oil is largely responsible for the shrinkage. For the information of those honorable senators who hold that opinion, I may say that in Canada, where fuel oil is, of course, much cheaper than it is in Australia and, therefore, competition is fiercer, the position is the exact reverse. I shall quote the Canadian figures in order to ram such sophistry down the throats of those who use it and to show that the cause is not, as they state, the use of fuel oil.
– Do not be too cruel.
– I cannot stand humbug; I abominate it. I intend to state the position correctly, irrespective of consequences. We have heard a chorus from honorable senators opposite that the export of coal from Australia can not increase because of the use of oil fuel; but on page 354 of the Canadian Y ear-Book for the year 1930, I find that the coal production in that dominion for 1909 was 10,000,000 tons, and in the following year 11,000,000 tons, or, roughly, an average of 11,000,000 tons a year. In 1927 the yield “was 17,300,000 tons, in 192S, 17,400,000, and ii, 1929, 17,200,000.
– Is that the yield ?
– That is the prod notion. While the export of coal from Australia has fallen off by two-thirds or 6 n per cent, in twenty years, the production in Canada has increased by 60 per cent, in the same period. What have honorable senators opposite to say to those figures? Where does their oil argument como in now? The position in Australia should be the same as it is in Canada, iv here there has been an increase in the yield of over 60 per cent., as against a decrease of two-thirds in our export trade.
– I thought the honorable senator was going to make an honest statement.
– I do not intend to ask that the honorable senator should withdraw that remark. When I am merely stating facts the honorable senator, with his damnable hardihood, accuses me of being dishonest. I intend to express my opinions, irrespective of whether they do, or do not, hurt the feelings of others. The coal industry of Australia is fading away, it is wilting like a flower, while that in the sister dominion of Canada is flourishing. The reason is easily explained. The coal-miners in New South Wales and others like them have not stood up to their job. Why have not they extracted sufficient coal from mother earth to help this country to pay its way, and to maintain the rate of pensions paid to the invalids, the aged and the returned soldiers? Senator Hae, who has shown so much sympathy towards the pensioners, and has shed crocodile tears on their behalf, should realize that if our coal industry and secondary industries had developed to the same extent as they had in Canada, it would not have been necessary to reduce wages or pensions. It is his duty to go to those people and tell them that there should not be any more humbugging or playing at work in their industries. He should tell the coal-miners to go to work instead of remaining idle for twelve months, as they did lately, because their earnings were reduced to £2 a day. That was admitted by the secretary of their organization. They went out on strike against a reduction in wages to £2 a day, when other poor wretches could not obtain 2s. a day. The industries of the country were strangled as a consequence and production crippled. The business of this country has been, brought practically to a standstill by thepoisonous doctrine preached by those who roam all over the country, which has not only ruined the cause of the workers, but also has brought disaster to the Commonwealth. The workers have not gained anything by listening to the talking or arguing of* those who preach false economic doctrines. These men are living the lives of bad citizens. Upon whom are the coal-miners and the other easypace workers in this country living? They are, as I shall prove, depending absolutely upon the efforts of those engaged in primary production.
What is the position with respect to our export trade generally? What does it represent? It provides us with all that we eat, drink, wear and consume. If we cannot bring money into this country as a result of selling our products we cannot possibly carry on. It is recorded on page 634 of the Commonwealth Year-Book, that our export trade in 1910 was valued at £68,000,000, 95 per cent of which is represented by exports of primary production. Who are our primary producers? The wool-growers, the wheat-producers, the fruit-growers, and the dairymen, and their assistants. The exports represented in the amount of £68,000,000 were produced from the land. But for the efforts of our primary producers we should be in a bad way indeed. On page 128 of the Commonwealth Year-Booh, we find that our exports, for the last year for which particulars are available, were valued at £141,000,000. While the primary producers of Australia, therefore, have doubled the value of their exports, the coal-miners in New South Wales have reduced their exports by twothirds. Who are they living on? They must be living upon the men who are content to go on with their job, and to keep producing instead of arguing. One set of Australians is living upon the other. One set is producing the wealth, whereby the wages of government employees and others, as well as invalid and old-age pensions, are paid. But for the efforts of those engaged in production for export, it would be impossible for us to keep out of the financial bog. We are in our present position, because production has been paralysed as a result of the poisonous doctrine poured into the ears of the workers. If the wheat and wool growers went on strike in the same way as did the coal-miners in New South Wales, where should we be to-day? Will Senator Rae answer that question ? We should be faced with starvation, but because the primary producers keep at their work the coal-miners and transport workers and other persons afflicted with work fright are able to live. They should do a fair thing as other sections of the community are doing. They should not be the kept part of the community. Those engaged in secondary industries, to whom I shall presently refer, are not shouldering their share of our responsibilities either. In consequence of the shinkage in our coal export trade and secondary industries this country has not been able to maintain its pension rates or the salaries of its public servants. That would have been possible if these once industrious people had stood up to their jobs as the primary producers are doing. The Assistant Minister (Senator Daly) said, in answer to one of his colleagues the other night : “ Don’t we know that this must come out of production?” We have no philosopher’s stone; we have no magic wand; it must come out of production. I repeat that the coal-miners should do their job and thus enable Australia’s coal trade to he in as healthy and flourishing a position as it is in the sister dominion. It is impossible to expect a revival of our coal export trade while the men in that industry strike because their earnings have been reduced to £2 a day. Is that the way to help Australia or to assist the pensioners? I shall tell the pensioners that their pensions have been reduced, because the coalminers and other work-stoppers have strangled production and kept us poor.
– That is an absolute falsehood.
– Order! The honorable senator is entitled to say that the remark is inaccurate, but he must not say that it is an absolute falsehood.
– Then I shall say that it is a wilfully inaccurate statement.
– The honorable senator must not use the word “wilfully “.
– I shall leave it at that.
– The honorable senator will not leave it at that. He must withdraw the word “ wilfully “.
– Then I shall say that it. is seriously inaccurate.
– Facts speak for themselves.
I have given the position with respect to Canada’s coal trade. I shall now refer to our secondary industries, in which there has also been a shrinkage in production. This is due to unperformed services in this country. The exports from Canada of partially and wholly manufactured goods in 1930 were valued at $507,000,000. It is interesting to note that $216,000,000, or over £40,000,000 worth of those exports were sent to the United States of America, where the living standards are equally as high as in Canada, and over a high tariff barrier. Has Australia acted in like manner? It has not; and that is one of the principal causes of our troubles. My friend, Senator Daly, refers to a few bags of nuts that come from the United States of America, or a few cases of pickles that come from some other country, but does not touch upon the major causes that are responsible for our present position.
While Canada exports to foreign countries over £100,000,000 worth of its secondary products, Australia exports only a miserable £2,000,000 worth. Is it not plain that if Australia exported £60,000,000 worth of secondary products, as she should, we would not be situated as we are? There must be something wrong, because our advantages are equal to, if not greater than, those of Canada. I have on my farm an imported Massey Harris machine. The coal, coke and iron used in the manufacture of that machine had to be railed from a long distance inland in the United States of America to the manufacturing centre. Duty had to be paid at the border, and when it was sent to Australia it had to surmount a stiff tariff barrier. If Canada can do these things, and while upholding her living standards also enrich herself, why cannot Australia do likewise? The reason, as I have already explained, is that mischief-makers have been abroad in the field of industry here and not in Canada. I could show that over and over again they have made the workmen discontented by telling them this, that and the other thing. It is claimed that piece-work must not be indulged in ; although we know that everywhere to-day the policy of some trade unionists is nothing but piece-work. During the 25 years that I have been in this Parliament, the value of Australia’s secondary exports has hovered around a miserable £2,000,000 or £3,000,000. Is it not plain to even a schoolgirl’s intelligence why Canada can borrow money on Wall-street at« as low a rate as 4 per cent., whereas Australia cannot secure accommodation on any money market in the world? The reason is that we are not producing as we should be.
Our secondary industries are not standing up to their job and making their enterprises pay, as our primary producers are doing. That is the cause of all our trouble; that is the seat and the centre of the malady which afflicts this country. If our manufacturing enterprises were conducted under circumstances similar to those of Canada, and £60,000,000 annually were poured into Australia as a result of the export of our secondary products, would we not be better able to pay our way ? It is because they are not so conducted that we are poor, discontented and unable to pay our way. Is it not about time that we remodelled our ideas, and asked ourselves seriously how long the present conditions are to continue? Can we afford to allow one section to live on the industrious section of the community ? Can we further alford to have two sets of Australians in this country? The farmer rises in the dark, and finishes his work in the dark. What sort of spirit is it that allows one set of lazy Australians to dodge their responsibilities while another set have to strain themselves to the utmost to make it possible for this country to survive? It is a damnable spirit. The poisonous doctrines that have been poured into the ears of the workers have resulted in nothing but dead sea fruit. I challenge any honorable senator to prove that the conditions of labour are worse in Canada than in Australia; yet when Canada last went on the Wall-street market for a loan, it obtained £20,000,000 at an interest rate of a shade over 4 per cent., thus enabling its industries to keep going. It has no men on the dole, and, so far as I know, no soup kitchens. Until a certain section of Australians are prepared to stand erect and justify the claim that they are industrious and true-born Australians, our affairs will never be placed on a proper level. Is the man in the country to be burdened indefinitely? Is it fair? Is it just? Is it playing the game? Is it expected that he will always wear a patient smile? I tell honorable senators that he will not. He is jibbing now, and is coming into the cities to share even the dole. He cannot continue any longer the present hopeless struggle.
It is said that the banks are the cause of our troubles. I have stated previously, and I repeat, that had the banks done what their critics wanted them to do, their position to-day would be equally as unfortunate as it was in the early nineties, when they were unable to pay their way, and thus brought about the greatest crisis in the history of this country. They were warned by that experience, and, so far, have been able to weather the gale and hold their bowsprit to the wind. If, as is alleged, the banks are the cause of our troubles, why has not the Labour party established State banking institutions? I expect to be told that the Upper Houses in the States have stood in the way; but is that so? When Mr. Theodore was Premier of Queensland, what was to prevent his creating a State bank there? He must have had some diffidence regarding the very doctrine that he preaches to-day. He could have established a banking institution just as easily as I can take my seat now.
– At that time the Commonwealth Bank had not been strangled.
– I helped to bring the Commonwealth Bank into existence, and I am very glad that it is functioning to-day. I recognize, however, that it has special privileges which the private banks do not possess. If it were obliged to pay taxes, and were subject to the same treatment as the private banks receive, it would not make the showing that it is making to-day. But let me get back to Mr. Theodore. He could have established a State bank in Queensland, but did not do so; just as the present Commonwealth Government could have opened up a coal mine in New South Wales, in opposition to the late ‘John Brown, but kept out of such a venture. It is good propaganda, but mighty inconsistent, for these men to be continually railing against the banks, when they have the power to establish a national bank, yet will not raise a little finger in that direction.
– The honorable senator knows that banking legislation is the prerogative of the Commonwealth and not of the States.
– The honorable senator cannot side-track me in that way. The States have the right to establish banks within their own borders. An agricultural bank was established in Western Australia. The Queensland Government bad the right to establish ‘a State institution, but did not take that action. Even in Russia the State bank has not been able to save the Soviet Government from the payment of high interest rates. I have proved from the Soviet Year-Booh that that Government has had to pay 8 per cent., 10 per cent., and even 12 per cent, for the money that it has borrowed. It is very successful propaganda to talk about the money power. It arouses a jealousy that has very fruitful results on election day. But it is wrong to stir up this jealousy, because a large number of men have invested their all in these institutions. The State savings banks are maintained by the poorer people of Australia. They provide the means that enable this Government to carry on. The Australian Workers Union, which has funds amounting to tens of thousands of pounds, could start a bank to-morrow if it pleased. Banks have been started with far less capital than it possesses. The Bank of New South Wales started with a £50 note. But it is considered better tactics to use this propaganda against the banks, because it produces good results on election day.
If there is a monoply of which we do not approve, why not be honest and set up in opposition to it? Take the case of the beef barons in Queensland. The Labour Government, of which Mr. Theodore was a member, obtained office in 1915 as a result of a powerful appeal to the electors to consider the way in which the beef barons had them by the throat. Yet that Government subsequently became a beef baron itself, and lost millions of pounds of the taxpayers’ money. The right honorable member for North Sydney (Mr. Hughes) initiated the Commonwealth Government Line of Steamers, which resulted in the loss of about £10,000,000 of the taxpayers’ money. Why was that loss incurred? Because those who should have co-operated in the venture, so as to make it a success, were found wanting. Human nature could not stand the strain. Because the third cook, a potato peeler, or a seaman wished to remain on shore until the last minute, the sailing of these 15,000-ton steamers was frequently delayed. That could not last. Other folk who were more industrious wanted to go ahead with their business. They are the men on the proceeds of whose labour Australia lives, and but for them this country would be bankrupt. We are all living to-day on the £141,000,000 worth of primary products that are exported. If those who are engaged in the coalmining and other similar industries had only stood up to their job, and put forth an equal effort, Australia would not have been confronted with anything like her present difficulties. Those are the things I want to make known. I want an answer to them. It is useless to go all round the subject without touching the core of it. I want to know why production has been so paralysed in Australia compared with Canada? When we get an answer to that question wo shall know where we stand.
The plan calls for equality of sacrifice. It is quite true that under the reductions proposed hardships will be suffered, but the plan is the production of the best experts in Australia, and we have no reason to condemn it until we see how it works out. The present depression will teach us a lesson to be more energetic in future, and to stand up to their jobs in the spirit of the grand old pioneers who made this country for us. If we do not learn the lesson, but get back to the old position, our experience will have availed us nothing. Shakespeare aid -
Sweet ure the uses of adversity;
Which like the toad, ugly and venomous,
Wears yet a precious jewel in his head.
There is nothing like adversity to teach us a lesson, aud the difference between the party in opposition and the party iu power to-day is that we tell the people what they ought to know rather than what pleases them, whereas the party in power teaches the people, to their undoing, the things that please them rather than the things they ought to know. The surgeon performs an unpleasant duty to bring about a better state of health in his patient. The country has got into a bad state industrially and economically; it is in a very much distempered state, and adversity, like a surgeon, has come along to cure it. We must remodel our ideas, and all pull together for the common good. We must increase production. Every child knows that the more we produce’ the more there is to divide. The unfortunate policy of the past that has lod us into our present condition, has been to decrease production. Patrick Henry said at the Virginian Convention -
I have but one lamp by which my feet are guided, and that is the lamp of experience.
Let us be guided by our experience. The policy of the past has only ‘ served to shrivel up the national income, with the result that there is no money available for those who need it. Let us, therefore, get back to increased production. Let us have co-operation throughout Australia and, chastened by the experience of the past, let us pull the ship of state once more on to an even keel, resolved never again to revert to the old, bad and mischievous grooves of life, but to emulate, in the spirit which actuated them, the deeds of those pioneers who made this country for us.
– I wish to make a few remarks concerning a matter affecting the financial emergency plan upon which the Standing Orders have hitherto prevented me from commenting. I refer to the failure of the Government to put into effect the recommendations made by the economists and experts for the reduction of the tariff. The Government convened this great conference of Premiers, experts and others in Melbourne and sought the advice of leading economist* and financial experts of Australia, and a report has been presented to us signed by Professor Copland, as chairman, Professors Giblin, Melville, and Shann, and Messrs. Pitt, Simpson, Stanley, Strutt, and Stuckey, State Under-Treasurers. Not only were the Prime Minister and Treasurer present at the conference to consider the proposals of the experts and economists; the Government very properly decided to call in the assistance of some of the leaders of political parties. The Leader of the Opposition in the House of Representatives (Mr. Lyons), and the Deputy Leader of the Opposition (Mr. Latham), leaders of the Nationalist party, were accordingly invited to join in considering the comprehensive scheme put forward by the economists. But the most important recommendation made by those experts has, so far, been ignored by both political parties who were represented at that conference. For some reason which I entirely fail to understand, no invitation to attend the conference was sent to any member of the Country party, with the result that a careful perusal of the report of the proceedings of the conference fails to indicate where the conference dealt with the matter of putting into effect the recommendations of the experts for a reduction of the tariff. The most important recommendation of all in this most carefully prepared scheme for the financial rehabilitation of Australia has been entirely ignored. Bills have been introduced to convert and reduce the interest on our great public debt, and to reduce the salaries, pensions and emoluments’ of every section of the community ; but the recommendation that should have been put into effect, in order to enable the people of Australia to live on their reduced incomes, salaries, and interest returns, and which would have brought down the cost of living to an extent corresponding with the reduction of wages and all other receipts, has so far been entirely ignored. On page 181 of the report signed by the whole of, the political economists and financial experts whose names I have mentioned, I find the following recommendation: -
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.
The mo3t important points are the “ abolition of embargoes and rationing,” and the “ reduction of some of the extreme protective duties.” The recommendation proceeds -
Such measures would be no longer necessary, and their removal would promote better feeling overseas, Or at least offset any unfavorable reaction to increased primage and the high valuation of imports. On the whole, about £8,000,000 should be obtained from a combination of primage, sales tax, and a revaluation of imports accompanied by a reduction of embargoes and the 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.)
The point I emphasize is that the portions of the experts’ recommendations which the Government have so far adopted, and embodied in legislation, should have been accompanied by a reduction of embargoes and high customs duties, and a more liberal exemption of basic foods - which, of course, include sugar - and instruments of production, which include agricultural and mining machinery. I ask now if the Government proposes to put this important recommendation into effect; if it proposes to reduce or abolish the duty on agricultural and mining machinery? If not, why has this portion of the recommendation of the experts been ignored by both of the political parties who alone were represented at the conference? Why was no member of the Country party extended the courtesy of the same invitation that was extended to the leaders of the Nationalist movement in this Parliament? The Government has adopted a very incomplete portion of the plan. The most important recommendation has been entirely ignored, although its adoption would have given relief to the people who are suffering a reduction in their incomes under legislation already agreed to by this Parliament. It seems wrong to make these reductions unless, at the same time, we reduce the cost of living; but, unless we reduce the cost of production we cannot reduce the cost of living, and the only way to reduce the cost of production i3 to adopt this most important recommendation. The producers of Australia will be left in a more impossible position than ever if they are to continue exporting their produce overseas, selling it in the world markets, and selling in a limited local market with a reduced purchasing power, while at the same time the heavy taxes already imposed on their implements of production, and on everything they eat, drink, oi wear, are to remain absolutely untouched by this Parliament.
For nearly two years, at any rate since November, 1929, when the first huge tariff increases and embargoes were introduced, we have been in session month after month but have been denied any opportunity to consider, and, I believe, to reduce these burdens. But the Government should not wait for the Senate to bring about the necessary reductions. It should have adopted the recommendation of the experts, secured further details from them, and brought forward tariff reduction proposals as part of the plan we are now considering. The embargoes on the importation of agricultural machinery have not been lifted. The high duties still remain in spite of the fact that the experts have recommended that relief should be given by a more liberal exemption of basic foods and instruments of production.
I wish also to refer to the proposed terrific increases of the sales tax and primage duty already under consideration in another place. The budget papers show that the revenue expected to be received from these increases is part of the Government’s plan to balance the budget, but the experts were not unanimous on the point.
– Some of them objected to the increases.
– Yes, and so do I. The experts said -
The administrative difficulties of a sales tas are great, but we are committed to them for the present sales tax, and they will not be greater for a higher tax. There is also primage duty operating and there is no technical difficulty in increasing it. The sales tax might be raised to 0 per cent, and the primage duty to 10 per cent, with care that in both cases basic foods are exempt and possibly also the more important goods which are direct instruments of production, such as machinery, fertilizers, com sacks &c.
Honorable senators will note that these experts who recommended the imposition of increased sales tax and primage duties, emphasized that direct instruments of production, and particularly machinery of the classes to which I referred, should be exempt. They estimated that the increase of the sales tax from 2$ per cent, to 6 per cent, would yield £5,600,000, and that the increased primage duty from 4 per cent, to 10 per cent, should return £2,400,000, or a total of £8,000,000. The bulk of this extra revenue is to be taken from the pockets of our farmers and other primary producers, who produce 95 per cent, of the nation’s exportable wealth. An important dissent is recorded by two Under-Treasurers, Mr. H. A. Pitt and Mr. J. J. Strutt, in the following terms : -
We dissent from the proposals to increase the sales tax and primage duties. The effect will be to add to the cost of living and to the cost of production, and thus delay national recovery. We think that reduction of the deficit should be effected by other means.
This dissent is definite evidence that two of the most brilliant of the economists who attended the conference believe that an increase in these taxes will lead to an increase in the cost of living, and add to the cost of production. National recovery will only be possible if we reduce our costs of production and the cost of living, and this is imperative since drastic cuts have been made in the salary and wage incomes of so many of our people under the emergency plan. This higher taxation will lead to an increase in unemployment. Unless the Government exempts agricultural and mining machinery from the operation of these new duties, I shall oppose those bills when they come before the Senate. It is impossible to tax our primary producers of this country into a condition of prosperity, and yet that is what this Ministry is trying to do. If a man breaks a window or assails another the penalty imposed upon him will probably be a fine of £1 ; but if a man purchases a harvester for use on his farm, the
Government, by means of this sales tax of 6 per cent., imposes upon him a fine of from £12 to £18. When the original sales tax bills were in this chamber I fought strenuously for the exemption of all these classes of machinery, and now it is proposed to increase the sales tax from 2£ to 6 per cent. # I hope that the Senate will insist upon machinery, the direct instruments of production, being added to the list of exemptions or else reject the bill. There are other important phases of the budget to which I shall direct attention later, but I take this opportunity to express my strongest opposition to the Government’s tariff policy, and the reduction of the gold bounty by 50 per cent. It would have shown more wisdom if it had allowed the gold bounty to stand and had applied to the whole of the tariff the 50 per cent, reduction which it has made in the gold bounty.
Debate (on motion by Senator Brennan) adjourned.
Customs Administration : Duty ok Imported Conveyors - Pinus INSIGNS for Butter Box Making - Mr. Lang: Statement in Adelaide “Advertiser and Register.”
Motion (by Senator Barnes) proposed -
That the Senate do now adjourn.
– Yesterday I made certain observations concerning the administration of the Customs Department. I now direct attention to what I regard as a grossly unjust act of administration. My complaint has relation to the customs duty levied on a complete printing press equipment, including conveyors, ordered in August, 1927, by the Adelaide News Limited from the London firm of Hoe and Company. The whole of the equipment was not shipped immediately and the conveyors were not delivered until some time in October, 1928. In the meantime, a Melbourne firm, Gibson, Battle Proprietary Limited, conceived the idea of building these conveyors in Australia, and with this object in view, its representative visited the premises of the Adelaide News and inspected its new printing plant and conveyors. Since this class of machinerywas not being manufactured in Australia when the order was placed, it was entitled to free entry under section 169a of the Customs Tariff Act. Nevertheless duty amounting to £961 was demanded on the conveyors and this amount was paid under protest.
– Is that class of machinery being manufactured in Australia now?
– Yes ; the firm of Scott and Company, which is really controlled by Gibson, Battle Limited, is now. carrying out that class of work. But I repeat that Mr. Cameron, its representative, made an inspection of the uptodate equipment which had been imported by the Adelaide News Limited with a view to modelling its manufacture on similar lines. There has been a good deal of controversy with the department over the return of the duty paid under protest and on the 28th July, 1930, the Adelaide News acknowledged receipt of a departmental communication of the 16th July, forwarding a form of application for the admission of goods under bylaw provisions of the tariff. From this it would appear that the Minister had come to the conclusion that the machinery in question should be admitted duty free. In its letter the Adelaide Nexus stated -
We note what you say in regard to the manufacture of newspaper conveyors by Scott and Company Proprietary Limited of Melbourne. We are sure that at the time our order was placed, August, 1927, no Australian firm was making these conveyors, nor had their manufacture then been considered.
I may. add that subsequently the Adelaide News placed an order with Gibson, Battle Proprietary for the supply of certain equipment. The company had no desire to send work out of the country if it could have its requirements met by local manufacturers. In his reply of the 19th June, 1931, the Minister admitted that in the past conveyors for printing presses had been admitted free under by-law item 174. His letter stated that -
An application submitted by a Sydney newspaper proprietor for admission under by-law of two conveyors entered for home consumption on the 14th November, 1929, was refused, in view of the ability of Scott and Son Proprietary Limited, William-street, Melbourne, to supply suitable conveyors.
Of course, they were able then to supply conveyors. A further paragraph in the letter stated -
The Australian manufacturer on the 8th June, 1928, was prepared to accept orders for conveyors of local manufacture, while the conveyors now in question were not imported until the 16th October, 1928.
The Minister failed to appreciate what had been toldhim in the previous letter. I take it that he was advised by some officer of his department before sending his reply. It was nearly twelve months before. Gibson, Battle and Company or Scott and Son Proprietary Limited, started business that this plantwas ordered. Then comes what I regardas a very immoral decision on the part of the Government. The letter continued -
I might state that the applicant failed to comply with an important requirement in connexion with applications for admissionof goods under “by-law items of the tariff in that the request for concession was not made prior to the placing of the order for the goods in respect of which tariff concession is desired. This omission on his part has seriously prejudiced his application as at the date of importation of the conveyors in question an Australian manufacturer was in a position to supply a suitable plant.
That is not the case. An Australian manufacturer was not in a position to supply a suitable plant for a considerable period after that date. And the way in which he placed himself in that position was by getting engineers to examine this plant, which had been manufactured by Hoe and Company, of England, a very reputable firm. The Minister having at an earlier stage invited applications for the remission of the duty, it is now highly improper for him to seek to evade repayment. If the Minister representing the Minister for Trade and Customs will examine the file, he will see that these things were bandied about for some time. At first there was a dispute whether any duty should be paid at all. If the Government has any regard for morality, this is a case that calls aloud for its consideration. The facts are entirely with the newspaper company. In private business a man who attempted to do what the Minister has done would be estopped by law. I hope that something will be done to rectify this injustice.
I desire to refer to the position of the pinus insignis industry in South Aus- tralia - if industry it can be called. I understand that an examination has been undertaken either by the Council for Scientific and Industrial Research, or some kindred body, into the use of pinus insignia for the manufacture of butter-boxes. It is stated that pinus insignis, unless subjected to some special treatment, conveys a flavour to the butter. I believe that efforts were made to isolate the odour, and to ascertain how it could be combated. The box manufacturers of South Australia should be informedwhether or not the experiments were successful. If pimus insignia can safely be used for the manufacture of butter boxes, they could provide employment for a number of men. I do not wish to harass the department; but, representations having been made to me, I feel it my duty to bring this matter under the notice of the Minister.
– I had something to do with the negotiations for a remission of the duty paid on the conveyor attached to a printing machine imported by the newspaper company in Adelaide mentioned by Senator McLachlan. It seems to me that, while the reply of the Minister for Trade and Customs is reasonable, the company is not being fairly treated. As mentioned by Senator McLachlan, conveyors were not manufactured in Australia at the time that the printing plant was ordered. The conveyor imported by this company was the last one to be brought in from another country. Conveyors are now being made in Australia. The company has paid the duty, amounting to £916, under protest. I point out that negotiations regarding this conveyor extended over a number of years without finality being reached. The company is not satisfied with the treatment it has received. I hope, therefore, that the Minister will go into the matter with a view to seeing that justice is done.
– I know something of the matter to which Senator McLachlan has referred, because I also made an attempt to secure a refund of the amount of duty paid by Adelaide News Limited. Unfortunately, in this matter, the Minister for Trade and Customs (Mr. Forde) does not see eye to eye with members from South Australia, who feel that the company has a just claim for a refund. Now that I have the honour to represent the Minister for Trade and Customs in this chamber, I can assure Senator McLachlan that anything that I can do to remove what I feel to be an injustice, will be done.
Senator McLachlan also referred to the use of pinus insignia for butter boxes. Only to-day, I received a report from Dr. Rivett on this matter, enclosing certain comments by the forestry expert of the Council for Scientific and Industrial Research. I assure the honorable senator that investigations in this matter are proceeding. It may be reassuring to him, and to others who have made representations in this connexion, to know that, so far, the experiments have proved most successful. .We are hopeful that one of the disabilities suffered by South Australia will be removed, and that that State will be able to supply the necessary timber for the manufacture of boxes in which to send our butter overseas.
– In the Advertiser and Register, published in Adelaide on Tuesday, the 21st July, there is a leading article entitled, “ This State’s Answer to Mr. Lang “. As reference is made in it to Senator Daly, I shall quote from it -
It is no longer possible for Mr. Lang to appeal to the Loan Council in “ the sacred name of Labour “, in spite of the fact that even in his absence Labour exerts a preponderating influence at the meetings of that body. The Lang faction, which has been mainly instrumental in reducing the whole Labour movement to its present state of chaos, is not deserving of the least consideration from any conceivable point of view. It is true that Labour politicians may be found in this country even to-day, whose seeming preoccupation is still the unity of the party at all costs, and who would like to regard Langites and Communists, and all the revolutionary extremists in modern politics, as fish fit for the Labour net. Mr. Scullin must beware of being forced by these indiscriminating enthusiasts into making concessions to Mr. Lang, in the vain hope of advancing the cause of Labour “ solidarity “. Pressure may oven be brought to bear upon him from within the Cabinet. (Senator Daly, who was recently re-admitted to the Ministry, listened the other day - at least, we presume so- to a deplorable speech by Senator Rae, and heard him declare, not only that the Government had “ disgraced itself “ by its acceptance of the Premiers’ plan, but that there was no element of Labour left in the whole Administration, and that “ we should have entered upon a campaign to smash the banks “. The newly-appointed Assistant Minister from South Australia followed immediately afterwards with a soothing recital of the things that would be possible when the Labour party was solid once more, and “ recovered the ground temporarily lost “. When he was reminded that Senator Rae does not now belong to the Labour party, he made this suave and accommodating reply - “ 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”. In the alchemy of such a mind, it would be possible to make a Labour stalwart, and even a statesman, of the frantic Mr. Lang.
The article goes on to point out Senator Daly’s views might constitute good reasons why New South “Wales should not get any accommodation from the Loan Council.
– It should not.
– The honorable senator may be right; but I should like him to explain, if he can, what relation there is between the two matters.
– Ask the editor of the newspaper.
– If he were sober, he would probably know. The article from which I have quoted goes on to say -
Mr. Hill, in an outspoken statement which we published this morning, agrees that it would be impossible to grant money to Mr. Lang except on the most stringent conditions. As representing South Australia on the Loan Council, the Premier might well go further, and declare that this State will not disgorge another penny to avert the fate which awaits the Lang Government. We cannot sustain a further burden, merely in order to holster up the worst administration in Australian history; and Mr. Hill would be gravely misinterpreting the sentiments of those for whom he is empowered to speak, if he hesitated to addthatwe would not, even if we could.
I remind honorable senators that the State in which this article was published, and whose Premier it seeks to influence, obtained £800,000 of the £1,000,000 which this Parliament appropriated for the relief of unemployment to enable it to balance its budget. Yet this alleged spokesman in this newspaper has the unbounded audacity to speak about what they will do in providing money to help other States upon which they have been living.
– South Australia is only getting back a bit of its own. New South Wales has wallowed in our money.
– Whenever money in the nature of a grant has been appropriated by the Commonwealth to help impecunious States, New South Wales has been the largest contributor, because contributions of this nature are made on a population basis. In this case, when £1,000,000 was appropriated for the purpose of relieving unemployment, £800,000 was used to assist South Australia in balancing its budget. That was done at a time when the number of unemployed in New South Wales was estimated at 150,000. Those men were deprived of about £4 each, which would have provided some relief had the money been used for the purpose for which it was appropriated.
– Is the honorable senator apologizing for Mr. Lang?
– I am not apologizing for, or attempting to excuse, Mr. Lang. He is quite capable of fighting his own battles.
As it is not my intention to speak on the budget debate, I should like to make a brief reference to another matter. Senator Lynch, in a long diatribe which I have heard at least 50 times, made a most unwarrantable attack upon the coal-miners of New South Wales. He did not make a mere passing reference to them, but laid himself out for about half an hour to utter what can only be described as a libel of a most vile character against the general behaviour of these men. He accused them of being loafers, and of living upon the fruits of the industry of others. I have known the majority of the coal-miners of New South Wales for the last 30 years, and I venture to say that there is no harder working, or more honest type of citizens in this country. In a majority of the calamitous disputes that have occurred in the coal-mining industry in New South Wales, the employers have been wrong and the men have been right. There may have been among the numerous minor disputes over trivial matters some cases in which the men were blameworthy. I am not so bigoted as to say that the men are angels, and that the employers are of the other breed, but, in the main, the miners have waged the most justifiable fights that could have been fought by any class of workers. Any one who knows anything about the coalmining industry will admit that the work is dirty, disagreeable, and dangerous. Unless they had stood up for their rights by means of strikes, they would have been ground downto a position of absolute serfdom. The action they have taken has been forced upon them by the conditions of the industry.
– There have been no similar troubles in “Western Australia.
– I am speaking only of the coal-mining industry in New South Wales. I have a long and fairly wide knowledge of the conditions in the northern, southern, and western districts. It was a libel of the most cowardly kind to accuse men, who have no representative here, of living upon the labour of others. When Senator Lynch was speaking, I interjected “ I thought the honorable senator was going to make an honest statement “. He had previously said that he desired to review the position honestly from every viewpoint. After showing how the export coal trade of New South Wales had fallen off during the last twenty years, he proceeded to compare the production in Canada with the export trade of New South Wales. He compared the reduction in the export coal trade of New South Wales with the increase in the local use of coal in Canada. A comparison to be fair must be under comparable conditions. The coal production of Canada has, according to the figures quoted by the honorable senator, increased considerably, while the export coal trade of New South Wales during the same period has fallen off. It may have been unintentional, but that was not an honest comparison, because the circumstances are not comparable. In a prolonged and deliberate diatribe of the most offensive character he attacked the coal-miners, and said that the secretary of the coal-miners organization had admitted that the coalminers earned up to £2 a day.
– He did not say that they earned it but that they got it.
– They earn whatever they get. Senator Lynch distinctly stated that the secretary of the coal-miners’ organization admit- ted that the coal-miners earned £2 a day. That official never made such an admission in the sense in which the honorable senator used it. Honorable senators will agree that a half-truth is the worst kind of lie. It is quite true that coalminers sometimes earn £2 a day, but it is equally true that in nearly every colliery the men are off duty during certain days in every fortnight, and in many cases do not even earn the basic wage.
– They do not.
– It is most unfair to state one bald fact divorced from the context. In that way the honorable senator libelled the coal-miners of New South Wales, or of Australia generally; but his remarks were particularly applicable to the coal-miners of New South Wales. There is no harder-working or finer body of industrialists in any part of Australia than is to be found in the collieries of that State.
Question resolved in the affirmative.
Senate adjourned at 5.59 p.m.
Cite as: Australia, Senate, Debates, 23 July 1931, viewed 22 October 2017, <http://historichansard.net/senate/1931/19310723_senate_12_131/>.