7 October 1931

12th Parliament · 1st Session

The, Senate on the 7th August, 1931, adjourned till a day and hour to be fixed by the President, and notified by him to each honorable senator.

The Senate met at 3 p.m. pursuant to the notification of the President.

The President (Senator the Hon. W. Kingsmill) took the chair and read prayers.

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May I ask if the Leader of the Government has taken steps to make available copies of the report of the British royal commission known as the Macmillan Commission for which I asked some time ago?

Senator BARNES:
Vice-President of the Executive Council · VICTORIA · ALP

– I have made inquiries, and find that, there are about ten or a dozen copies of the report in the Library. Honorable senators are expected to peruse them and return ‘them to the Library as quickly as possible.

Senator Sir GEORGE PEARCE.That is of little use to honorable senators. I repeat my request, that the Government should arrange to obtain copies of this most interesting and valuable report which honorable senators can retain for their own use.

Senator BARNES:

– I shall urge that that be done.

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The following papers were presented : -

Commonwealth Bank Act - Balance-sheets of Commonwealth Bank of Australia and Commonwealth Savings Bank at 30th June, 1931, and Statement of Liabilities and Assets of the Note Issue Department at 30th June, 1931, together with AuditorGeneral’s reports thereon..

Arbitration (Public Service) Act - Determinations by the Arbitrator, &c. -

No. 16 of 1931 - Amalgamated Postal Workers’ Union of Australia.

No.17 of 1931- Australian Third Division Telegraphists and Postal Clerks’ Union.

Nos. 18 and 19 of 1931 - Commonwealth Storemen and Packers’ Union of Australia; Commonwealth Storemen and Packers’ Union, and Commonwealth Naval Storehousemen’s Association.

No. 20 of 1931 - Amalgamated Postal Workers’ Union of Australia, and Commonwealth Public Service Clerical Association.

No. 21 of 1931 - Amalgamated Postal Workers’ Union of Australia.

No. 22 of 1931 - Commonwealth Telephone Officers’ Association.

No. 23 of 1931 - Commonwealth Public Service Artisans’ Association.

No. 24 of 1931 - Common Rule re Compensation for overtime, Sunday duty, &c.

Canned Fruits Export Control Act - Fifth Annual Report of the Canned Fruits Control Board, year ended 30th . June. 1931, together with Statement by the Minister for Markets regarding the operation of the act.

Commonwealth Bank Act - Treasurer’s statement of the Combined Accounts of the Commonwealth Bank of Australia and the Commonwealth Savings Bank at 30th June, 1931, certified to by the AuditorGeneral.

Commonwealth Debt Conversion Act - Regulations - Statutory Rules 1931, No. 103.

Commonwealth Inscribed Stock Act - Regulations amended - Statutory Rules 1931, No. 102.

Customs Act and Commerce (Trade Descriptions) Act - Regulations amended - Statutory Rules 1931, No. 106.

Dairy Produce Export Charges Act - Regulations amended- Statutory Rules 1931, No. 107.

Dried Fruits Export Control Act - Seventh Annual Report of the Dried Fruits Control Board, year ended 30th June, 1931, together with Statement by the Minister for Markets regarding the operation of the act.

Financial Emergency Act - Regulations amended, &c. - Statutory Rules 1931, No. 99- No. 110.

Navigation Act - Regulations amended - Statutory Rules 1931, No. 95.

New Guinea Act - Ordinances of 1931 -

No. 22- Supply (No. 2) 1931-32.

No. 23 - Claims by and against the Administration.

No. 24 - Prisons.

No. 25 - Natives’ Contracts Protection.

No. 20 - Uncontrolled Areas.

No. 27 - Marriage.

No. 28- Stamp Duties (No. 3).

No. 29 - Mining.

Papua Act -

Infirm and Destitute Natives Account - Statement of Transactions of Trustees for the year ended 30th June, 1931.

Ordinances of 1931 -

No. 3- Supply 1931-1932.

No. 4. - Navigation.

No. 5 - Wireless Telegraphy.

No.6 - Customs (Export) Tariff.

No. 7 - Customs (General Import


Public Service Act -

Appointment - Department of Health - G. F. Lumley.

Regulations amended - Statutory Rules 1931, No. 108- No. 109- No.ll3- No. 117.

Wine Overseas Marketing Act-

Regulations amended - Statutory Rules 1931, No. 98.

Third Annual Report of the Wine Over seas Marketing Board, year ended 30th June, 1931, together with Statement by the Minister for Markets regarding the operation of the Act.

Air Force Act - Regulations amended - Statutory Rules 1931, No. 115.

Australian Soldiers’ Repatriation Act - Regulations amended - Statutory Rules 1931, No. 111.

Defence Act - Regulations amended - Statutory Rules 1931, No. 114.

Lands Acquisition Act - Land acquired at Corowa, New South Wales - For Defence Purposes.

Naval Defence Act - Regulations amended - Statutory Rules 1931, No. 97.

River Murray Waters Act - River Murray

Commission - Report for the year 1930-31; together with Statements furnished on behalf of the Governments of New South Wales, Victoria and South Australia in respect of Gaugings, &c.

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

Ordinances of 1931 -

No. 13- Meat.

No. 14 - Mortgagors’ Interest Reduction.

No. 15- Liquor (No. 3).

No. 16 - Trading Hours.

No. 17- Fish Protection (No. 2).

No. 18- Public Baths (No. 2).

Building and Services Ordinance - Regu lations amended (Canberra Electric Supply).

Meat Ordinance -


Regulations amended.

Mortgagors’ Interest Reduction Ordi nance - Regulations.

Public Baths Ordinance - Regulations amended.

Public Health Ordinance -

Regulations ( Meat ) .

Regulations amended (Meat).

Trading Hours Ordinance - Regulations.

Seat of Government (Administration) Act - Statement of Receipts and Expenditure from Consolidated Revenue Fund, and Statement of Expenditure from Loan Fund of the Federal Capital Territory for the year ended 30th June, 1931.

War Service Homes Act - Regulations amended - Statutory Rules 1931, No. 119. Tariff Board - Reports and recommendations -

Boot Lasts and Trees of any material. Churns, other than Hand Churns.

Crown Seals, Granulated Cork, Corks and other Cork Manufactures.

Crude Petroleum, Enriched Crude Petroleum.Once-run Distillate, and Petrol.

Cut Glass Bottles and Decanters.

Gas Cooking and Heating Appliances.

Gloves - Harvesting, Driving, Housemaids’ and Gardening.

Hot Water Bottle Stoppers.

Incandescent Electric Lamps.

Manufactures of Paper, Manufactured Stationery and Books.

Porcelainware, including Insulators, for Electrical purposes.

Soda Ash.

Timber used in the manufacture of containers for canned and fresh fruits for export.

Wall and Ceiling Parts and Decorations.

Wrapping Paper and Paper Basra.

Writing Ink, Ink Powders, and Liquid Drawing Ink.

Bankruptcy Act - Third Annual Report by the Attorney-General, 1st August, 1930, to 31st July, 1931.

Conciliation and Arbitration Act - Regulations amended - Statutory Rules 1931, No. 118.

Customs Act - Regulations amended - Statutory Rules 1931, No. 90.

Cold Bounty Act - Regulations amended - Statutory Rules 1931, No. 110.

High Court Procedure Act and Judiciary Act-

Rules of Court -

Dated 18th August, 1931.

Dated8th September, 1931.

Rules of Court amended -

Dated 11th August, 1931 (Statutory Rules 1931, No. 105).

Science and Industry Endowment Act - Auditor-General’s Report on the Science and Industry Endowment Fund as at 30th June, 1931.

Transport Workers Act - Regulations amended, &c. - Statutory Rules 1931, No. 100- No. 101- No. 104.

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Annual Report

Senator DALY:
Assistant Minister · SOUTH AUSTRALIA · ALP

– I lay on the table the animal report of the Tariff Board for the year 1930-31, and ask leave to make a statement.

Leave granted.

Senator DALY:
Assistant Minister · South Australia · ALP

– The report is complete with the exception of a few summaries of recommendations relating to tariff revision matters that have recently been made by theboard, but have not yet been considered by the Government. With respect to the board’s summaries and recommendations in connexion with by-law items of the tariff, and matters arising under the Customs Tariff Industries Preservation Act 1921-1922, the action, taken is set out in the schedule to the report with respect to each recommendation.

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Assent to the following bills reported : -

South Australia Grant Bill.

Western Australia Grant Bill.

Commonwealth Public Service Bill.

Federal Aid Roads Bill 1931.

Income Tax Assessment Bill.

Income Tax; Bill1931.

Sales Tax Assessment Bills (Nos. 1 to 9).

Sales Tax Bills (Nos. 1 to 9) 1931.

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Order of the day for the resumption of the debate from the 28 th July(vide page 4430) on motion by Senator Barnes “ That the paper be printed “ called on and discharged.

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Motion (by Senator Barnes) - by leave - agreed to -

That leave be given to introduce a bill for an act to amend the Service and Execution of Process Act 1901-28.

Bill brought up, and read a first time.

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Motion (by Senator Dooley) - by leave - agreed to.

That leave be given to introduce a bill for an act to ratify and approve an agreement made between the Commonwealth of Australia and Sir William Colin MacKenzie, Kt., Doctor of Medicine, and for other purposes.

Bill brought up, and read a first time.

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Motion (by Senator Barnes) agreed to.

That the Senate at its rising adjourn till Wednesday next at 3 p.m.

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Child Endowment

Senator BARNES:

– On the 21st July Senator Pearce asked the following questions, upon notice:-

  1. Is it a fact that under the legislation now passed by Parliament providing for certain reductions in Public Service salaries, and under the provisions for payment of child endowment in the Public Service, an. officer who is married and has eight children whose salary was £500 per year, and under the reductions will be £400 per year, will now be eligible for and will receive the child allowance of £13 a year, or £104 a year in all?
  2. If this is so, is it proposed to apply the same rule to married military officers who are also reduced in pay, or whose salaries are reduced by rationing; if not, why not?

I am now in a position to furnish the following reply: -

  1. Under the Public Service Regulations and arbitration determinations an allowance of £13 per annum is payable to officers in respect of each dependent child under fourteen years of age provided that the total amount of allowance paid shall not exceed the sum by which the officer’s salary falls short of £500 per annum. An officer in receipt of salary of £400 per annum having eight dependent children under fourteen years of age would be entitled to child endowment of £100 per annum. It might be explained that payment of child endowment in the Public Service is provided by deduction of an amount equal to the average child endowment paid per officer from thesalary of every adult male officer of theService. The committee appointed under section 13 of the Financial Emergency Act did not recommend any alteration in the conditions as to payment of child endowment.
  2. The conditions governing payment of child endowment in the Commonwealth Public Service apply also to members of the Military Forces.

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Parliament : An nouncement Regarding Date of Re-assembling - Macmillan Report - Tariff; Form of Presentation to Senate - Conversion of Overseas Debt - War Service Homes - Conversion Loan : Payment of Interest to Dissenters - Government Savings Bank of New South Wales : Attitude of Commonwealth Bank Board : Building of Provincial Bank Premises - Bankruptcy Act - Sales Tax Assessment Act: Application to Confectioners - Unemployment : Special Christmas Grant.

Motion (by Senator Barnes) proposed -

That the Senate do now adjourn.

Senator Sir GEORGE PEARCE (Western Australia) [3.22]. - I wish to direct the attention of the Leader of the Government in the Senate (Senator Barnes) to an unfortunate announcement reported to have been made by the Prime Minister (Mr. Scullin), that appeared in the press regarding the date of the re-assembling of Parliament. The right honorable gentleman may, of course, have been misreported, and in that event . the fault is not his; but I know that the announcement caused a good deal of misapprehension, and doubtless inconvenience, to a number of honorable senators. According to the West Australian, the Prime Minister announced that the Federal Parliament, would re-assemble on the 16th September. Those who live in distant

States are not in the fortunate position of those who have to come to Canberra from Melbourne and Sydney, from which cities a train can be caught daily. They have at their disposal only two trains a week, and must book their passage some time ahead of the date on which they propose to travel. I know that a number of “Western Australian and Queensland senators who read the announcement to which I have referred were led to believe that the date mentioned was the one fixed for the re-assembling of the Federal Parliament as a whole, and that in the case of the Senate the announcement had been made in anticipation of the action which you, Mr. President, were authorized by resolution of the Senate to take in connexion with the calling together of this branch of the legislature. But, upon investigation through you, sir, I, and I understand other honorable senators, learned that, although the announcement of the right honorable the Prime Minister specifically mentioned the Federal Parliament, it related only to the House of Representatives. I know that there is quite a strong belief in the minds of a number of honorable members of another place that that House constitutes the Federal Parliament; but I should have thought that, after its recent experiences, the ‘Government at least would have realized that that is not the ease, and that the Senate is not only an important, but also a very effective part of the Federal Parliament. If the announcement were made in the terms in which it was reported, the Prime Minister’s colleagues in this chamber should suggest to him that he limit future announcements to the branch of the legislature to which they refer.

I wish to refer again to the Macmillan report. I know that when reports are made following important inquiries in the Mother Country, the practice is for the High Commissioner to forward a few copies to Australia for record purposes, and for the use of the Common wealth Parliamentary Library. Recognizing the very great significance of this report, and taking time by the forelock, I asked the Government to depart from the usual practice in this case, by arranging for a sufficient number of copies to be supplied to enable every member to obtain one for his own use, so that” we should not be restricted in our efforts to become acquainted with its contents. The subjects with which the report deals affect very closely the legislative programmes of this country, and every honorable senator ought to be able to obtain a copy which he can regard as his own property, so that he might study it at his leisure. The Government apparently has not acted on my suggestion ; the usual practice has been followed, and if we wish to read the report we must do so in the Library. Many honorable senators are in Canberra only when the Senate is sitting, their homes being in other places, and the time at their disposal while they are here is not sufficient to enable them to study documents of this character. Even at this late stage, the Government ought to request the High Commissioner to obtain further copies of this most valuable report.

It is anticipated that next week the Senate will be asked ./U deal with the tariff. I understand that it will be piloted through this chamber by Senator Daly, and I suggest that he should give some consideration to the form in which it is placed before us. Honorable senators are aware that a scries of tariff resolutions, covering some 400 items, have, from time to time, been laid on the. table of the House of Representatives. In some cases, the original duty has been altered twice, and in other cases three times. It would be almost impossible for us to follow the upward flight of these duties unless we were provided with a memorandum indicating what relation the duty in force bore “to that of two years ago, and what alterations had been made meanwhile. I admit that it would be a somewhat cumbersome document to prepare, but I should nevertheless like the Minister to furnish some information on those very useful points.

The Tariff Board has inquired into quite a number of the items in the tariff schedule. I am not one of those who join in the clamour that is sometimes made outside for these reports to be laid on the table of Parliament immediately they are presented to the Government. I know that that cannot be done, because’ a large amount of revenue might thereby be lost. The Government must have a certain amount of time to consider what action it proposes to take. But I am under the impression that quite a number of the duties which have been im- posed have been the subject of reports by the Tariff Board, some of which have been presented to Parliament, while others have not. I suggest that the Minister look into this matter before we reassemble next week, so that all the reports relating to items in the schedule will be available to us. What is a legitimate excuse in the case of the House of Representatives cannot be urged in relation to the Senate, because when the tariff comes to us the Government has already taken action, and the other House has dealt with the resolutions that have been laid upon the table by it. Therefore, we should be in possession of all those reports dealing with items that appear in the schedule, with which we shall be called upon to discuss. I ask Senator Daly to give this matter his immediate attention and endeavour to furnish honorable senators with the reports, because the Tariff Board’s function is to advise, not merely the Government, but also Parliament, with regard to all tariff matters. Subject to the safeguards necessary to protect the public revenue, I hope that we will be furnished with the reports of the Tariff Board, before we are asked to deal with the tariff.

Senator FOLL:

.- Since the Senate last met, the Commonwealth debt conversion, loan has been successfully negotiated, but to further strengthen the position of the Commonwealth, it will, I believe, be necessary in the near future to give consideration to a similar conversion of our overseas indebtedness. I also notice, from press reports, that the British Government is about to launch a campaign for the conversion of its long-term indebtedness. This subject will probably play an important part in the forthcoming general election in the Mother Country. I, therefore, suggest that the Government should request the ex-Prime Minister, the right honorable S. M. Bruce, who is now on his way to England, to take up this matter with financial authori-ties in Great Britain. This suggested conversion, I remind the Senate, is not a party matter. As a matter of fact, we are rapidly reaching a stage in our financial affairs that will be beyond the realm of party politics altogether. I think I am right in saying that no citizen in Australia stands higher in the estimation of financial authorities in Great Britain than does the ex-Prime Minister of the Commonwealth, and I feel sure, therefore, that if Mr. Bruce can spare the time, and if the Government utilizes his services in the direction indicated, he will be able to render a great service to this country. I commend the suggestion to the Government for its earnest consideration.

Western Australia

– I protest against the callous indifference shown by the Government .to the interests of honorable senators by requiring us to attend this afternoon - members from the more distant States have been obliged to travel 2,500 miles to Canberra - only to find that there is no business of importance to transact. This is a distinct breach of an arrangement entered into when we adjourned. We were then informed that the Senate would re-assemble on a date to be fixed by the President, . and we understood that there would then be business to transact. During the last session some of us had been absent from our States for about six months, and naturally, we assumed that we should be allowed to remain among our people as long as possible. I am prepared to attend at Canberra at any time, and remain here as long as there is business to do, but I strongly object to the Government requiring our attendance before any legislative proposal has been prepared. The only business transacted to-day was to grant leave to introduce a bill, the second reading of which will be taken next week, to alter the method of serving summonses in the territory, and another measure to confirm an agreement between the Government and a distinguished public servant. I hope that, on future occasions, you,- sir, will not listen to the Government, and that you will exercise your own discretion as to the date for the re-assembly of this chamber, so that we shall not have a repetition of this farce of formally meeting and adjourning because there is no business to be transacted. In the hope that this would be obviated, I telegraphed to the

Leader of the Senate (Senator Barnes) urging that we should not be called together again until certain measures were ready for consideration, and, at Senator Lynch’s request, 1 mentioned that he was of the same opinion. I exonerate Ministers in this chamber from any blame in connexion with the matter. They are always courteous and, I am sure, not responsible for the present unsatisfactory state of affairs. We are told that the Prime Minister conferred with the President, .and was responsible for the meeting of the Senate to-day. This is action which I would expect from the head of a drifting government, which appears to have no settled policy from day to day. Senators from Western Australia spend five days in the train from Perth to Canberra and, in some instances, probably a couple of days in the train from their homes to Perth. Yet we find that, after having made that long journey, we are turned adrift in Canberra an hour or two after the meeting of the Senate, and must wait until next week before we can transact any business.

Senator Daly:

– You must blame Mr. Parkhill for the delay in the tariff debate elsewhere. ‘


– I commend Mr. Parkhill for standing up to his job and putting up such a good fight against the Government’s tariff proposals. My only regret is that, for the most part, he has been, doing this single handed. This is not an isolated instance of the Ministry’s frigid disregard of the interests of honorable senators living in distant States. The fixing of Wednesday for the re-assembling of the Senate might suit the representatives from the other States, because every State capital, except Perth, has six or seven trains weekly, direct to Canberra.

Senator Sampson:

– Except Tasmania.

Senator E. B. JOHNSTON.Although the representatives from Tasmania are in much the same unfortunate position as are senators from Western Australia, the journey to the Seat of Government does not take them nearly so long. As there are only two trains weekly from Western Australia, I suggest that, on future occasions, senators from that State should be given an opportunity to come direct to Canberra. For all the business that is before the Senate, we might just as well have re-assembled to-morrow^ We could then have left Perth on Saturday instead of last Tuesday week, and we could have come, straight through to Canberra. Instead, we arrived in New South Wales on Sunday last and were obliged to wait for three days for the meeting of the Senate. If the formal matters which we are asked to deal with to-day had been left till tomorrow, no harm would have been done, and senators from Western Australia could have remained at home an additional four days. I suggest that in future, when the Senate is called together after a fairly lengthy adjournment, the day of re-assembling be fixed to meet the convenience of honorable senators. This matter may be regarded by some as of little importance, but at a time like the present the country can ill afford to provide the rail fares of the 23 senators who have attended the meeting of the Senate to-day, only to find that there is no business to go on with. I do not mind how often, or how long, the Senate sits, so long aa there is work to do; but I do protest against the Senate being called together, and then adjourning for a week, merely because the Government, which is never ready for anything, has nothing for it to do.

Senator SAMPSON:

– I should like to obtain from the Government a clear and definite statement of its policy with regard to dissenters in the recent conversion loan, and the payment of the interest due to them. Whatever the conversion scheme was in fact, it was nominally a voluntary conversion, with, perhaps, a warning that dissenters would be penalized in some way or other. Honorable senators know that the great bulk of dissenters objected, not to the reduction of interest, but to the alteration of the dates of maturity. When bondholders were asked to convert their holdings, the alternative to conversion was not disclosed ; but it was generally understood that the interest on their bonds would be taxed to such an extent as to make it equivalent to a reduction in interest. The Federal Treasurer (Mr. Theodore) has admitted that the interest on the bonds of dissenters is being with- held. That is default. Does the Government intend to withhold the payment of interest until every Parliament in Australia has passed a measure providing for the compulsory conversion of all bonds? The withholding of the interest due to bondholders is a dishonorable act. Since the debt conversion agreement made no provision for the compulsory conversion of bonds, it would be interesting to know what would happen if even one parliament refused to pass the legislation necessary to make the conversion compulsory. In my opinion, the conversion loan was badly managed. The withholding of interest is causing hardship to many deserving people, and therefore I trust that the Government will make a definite pronouncement of its policy in this matter.

Senator DUNN:
New South Wales

– .1 desire to bring under the notice of the Government the conditions existing in Balmain, where thousands of men, women, and children are practically starving. The workers at Balmain have, for the most part, been engaged either in the iron and steel industries or on the waterfront, where work is practically at a standstill, so that honorable senators will realize the extent to which they are suffering. 1 suggest, for the consideration of the Government, that some of the obsolete naval vessels now lying idle in Sydney Harbour be taken to Cockatoo’ island and broken up and sold, thereby providing employment for these workers. 1 have no desire to be unfair to any person, and therefore I hesitate to suggest that this work is being delayed in order that the Treasurer, who represents the district, might benefit. I appeal to the Government to do something for these unfortunate people.

The second matter to which 1 wish to refer is the position of occupants of war service homes. T am speaking now as a representative of the State of New South Wales and as a returned soldier. Next Friday a bill introduced by the Government now in control of the destinies of New South Wales will become law, and will make a reduction of 4s. 6d. in the £1 on rents. The object of the State Government in introducing that legislation was to afford relief to tenants, shopkeepers and others, who, because of the depression and the general reduction in salaries and wages, are no longer able to pay the rents formerly demanded of them by owners of the premises they occupy. I ask if it is not possible for the Commonwealth Government to extend the same reduction to occupants of war service homes throughout Australia. About four months’ ago I was informed, in answer to a question, that the Government proposed to reduce from 5 per cent, to 4^ per cent, the interest rate charged on war service homes. The reduction, iu my opinion, is quite insufficient. Many occupants of these homes are finding it difficult to keep up their payments. If the Government of a State is prepared to bring about a compulsory reduction of 4s. 6d. in the £1 in the matter of rent3, I think the Commonwealth Government should at least extend the same privilege to the occupants of war service homes throughout Australia.

I understand that in Queensland there is no State savings bank, the whole of the savings bank system of the Stare being in the control of the Commonwealth Bank, that an amalgamation is being arranged between the Government Savings Bank of Western Australia and the Commonwealth Bank, and that the savings bank in Victoria is controlled by the State. But I want to speak on behalf of the Government Savings Bank of New South Wales, which recently had to close its doors for reasons which may or may not have been sound; the point is arguable. The New South Wales Government, with the support of leading citizens of the State, is now engaged in a determined effort to rehabilitate the institution, but the Commonwealth Bank Board is spending hundreds of thousands of pounds in erecting palatial banking chambers in the principal country and coastal towns in New South Wales, in many instances practically alongside branches of the Government Savings Bank. I do not claim that in doing this the Commonwealth Bank Board is exceeding its authority, although each town already has a post office in which the depositors in the Commonwealth Savings Bank are afforded every facility to transact savings bank business; but I should like to know if it is true, as alleged, that the Treasurer of the Commonwealth

Government is at all times endeavouring to afford every assistance to the Commonwealth Bank Board to go ahead with the building of these palatial branches for the express purpose of trying to down the present. Government of New South Wales and its Premier. I leave the matter there.

Senator Daly:

– The honorable senator docs not believe that allegation %

Senator DUNN:

– I do believe it. Senator Rae and I, who represent the Lang or Beasley group iti this chamber, will to the best of our ability see that the present Government of New South Wales gets fair play from the present Commonwealth Government.

South Australia

– I wish to draw attention to certain representations which have been made to me regarding the administration of the Bankruptcy Act, and which, if they are correct, will, I think, show that it is necessary to take immediate steps to amend the law. A decision recently given by the judge in bankruptcy is that expenses which are legitimately incurred in accountancy work, particularly for the purpose of continuing a deed of arrangement under Part XII. of the act, cannot be paid in priority under the Bankruptcy Act. People who have done the work, and to whom the money is due, are, therefore, obliged to rank as ordinary creditors. If that is the position - and it is said to be such by persons who are experts in the administration of bankrupt estates - it is likely to create a state almost approaching chaos in New South Wales, where quite a number of people are carrying on under deeds of inspectorship. I draw attention to this matter at once, because it is likely to affect adversely a very deserving class of creditors who are endeavouring to carry on their debtors under various deeds of assignment or deeds of arrangement.

Another matter to which I wish to draw the attention of the Government arises from the administration of the Sales Tax Assessment Act as applied to manufacturing confectioners. Where the manufacturers’ sales do not total over £500 per annum, the manufacturer is exempt. The effect of this has been to bring about the setting up of quite a number of small factories by persons who were formerly employed by the larger factories. The result has been disastrous to the legitimate manufacturers of sweets and chocolate. Representations have been made to me, and I understand are being addressed to the Government, in relation to the matter from the South Australian branch of the Manufacturing Confectioners Association. These representations indicate that if steps are not taken to relieve the larger manufacturers, or impose upon the smaller manufacturers the obligation to pay sales tax, serious consequences will result. No doubt the position is difficult ; but I do not think it was the intention of the Government or Parliament that an industry employing large numbers of persons should be placed in an unfair position compared with units employing very few persons. I trust that the’ Treasurer will look into the matter, and see if something cannot be done to relieve the larger manufacturers who, I believe, are carrying on their industries in a most satisfactory way. Undoubtedly, if there are groups of individuals carrying on business whose output i» not sufficient to justify the payment of sales tax, those groups will ultimately lead to the extinction of the legitimate manufacturers of confectionery.

South Australia

– Last year the Commonwealth Government made a special unemployment grant available to provide Christmas cheer for the workers, but, unfortunately, the money was not forthcoming until some time after Christmas. If the Government intends to provide a special Christmas grant this year for the unemployed, I trust that it will be made available in ample time. We all know that never before in the history of Australia has there been greater need for this assistance for the unemployed. I know, however, that the Government is sympathetic.

Another point upon which I wish to speak has already been mentioned by Senator Sampson. It relates to one of the aftermaths- of the great conversion stunt. It was inevitable that what was first suggested should be a voluntary loan should develop into a compulsory loan. We are now reaping what we have sown. Quite a number of particularly hard cases have been brought under my notice. Hard-working persons, who had saved up considerable sums of money, responded as late as November last to an appeal by the then Acting Treasurer (Mr. Lyons), and patriotically invested their money in government bonds, which they were told were as good as gold, but who now find that, so far as they are concerned, their money is its good as gone.

Senator Sampson:

– A person received £50 for the slogan “ Commonwealth bonds are as good as gold.”


– Those who invested their money in government stock held that opinion.

Senator Daly:

– Commonwealth bonds are better than gold.


– -I do not wish to enter into a discussion upon that phase of the matter at this juncture. I have no sympathy whatever with those dissentients who believe that, by refraining from converting, they will receive financial benefit.

Senator Thompson:

– There are a number in that category.


– That may be so. There is also a large number in another category, who are suffering, not only hardship, but also a distinct injustice. Many of these persons, who could ill afford to invest their savings in Commonwealth bonds, did so as a result of the special appeal which was made at that time. They were told that their money would be repaid within a certain period; but they now find that the bonds will not mature for years. If legislation is to be introduced to compel conversion, some special tribunal should be set up to deal with cases of hardship. I have received a. number of communications from persons who are not only seriously inconvenienced, but are experiencing undue hardship. A portion of one letter reads -

I have been out of work since February, 1930. Only earned £12 myself, and two sons only earning very little; not enough to keep themselves. One on half time, and two going to school. With rates and taxes, and mortgage to meet, it is impossible to carry on and meet the extra surcharge on the taxes. Within the next three months there are inscribed amounts due. I have dissented for three amounts, £900; but they tell me I will have to convert them. I have already converted £1,290, and the Government has run it out to the 1961 limit, so I will be pushing up daisies by them. That was due in 1938. . . .

This man is out of work, and naturally cannot pay his way. As the bonds aranot to mature until 1961, he will, as hesays, be “pushing up daisies,” by that time. He may not live to have the benefit of the money which he patriotically loaned to the Government.

Senator McLachlan:

– There are a lot in that position.


– I am glad that Senator Sampson raised this question, because I do not think it is the intention of the Government to do an injustice to those who, out of pure patriotism - they could not afford to do it - loaned! more than they otherwise would to theGovernment, which has now let them down.

Senator McLachlan:

– An intimation, by the Treasurer appeared in the pressto the effect that it was the intention of the Government to appoint a hardshipsboard.


– Unless something is done, great injustice will be inflicted upon many deserving persons. The letter continues -

I have npt paid the income tax yet, and I cannot do so unless I get some release of my cash.

This man states that his house is only partly paid for, and that practically every member of his family is out of work. As he is in possession of some assets, he cannot be termed destitute, and consequently cannot obtain rations. Such evils are likely to be prevalent in connexion with any such conversion “ stunt,” which must result in the poor being pressed in the interests of the big financial concerns, which are able to buy Commonwealth bonds, with a face value of £100, a,t from £50 to £70, on which they can obtain 4 per cent, interest. That is obviously the intention of a number of persons, who are profiteering when the nation is in financial difficulties. I do not object to speculation of this nature by individuals; but I strongly object to the nation deliberately profiteering. This man has to meet his income tax, municipal and other rates, and the payments due on his house. He suggests that, if ha could obtain £900, the remaining £1,200 could remain until 1961. I could quote a number of cases of bondholders in South

Australia who are right up against it. In South Australia these persons cannot obtain rations unless they declare before a justice of the peace that they are destitute. A person holding £2,000 worth of bonds cannot declare that he is destitute. The bonds he holds are practically useless to him, unless he sacrifices them. Of course, they could be sold at market rates, and apparently that, is the scheme. This man could sell his bonds for £60 or £70 on which the buyer would receive 4 per cent, interest on their face value of£100. That shows the fallacy of the whole scheme.

Senator E B Johnston:

– They are worth over £80 to-day.

Senator Thompson:

– About £85.


– That is due to the ramifications of the scheme; no one can object to the variation in the market prices of government stock.

Senator Thompson:

– There is no scheme; the honorable senator knows that perfectly well.


– Does the honorable senator suggest that there is no scheme ?

Senator Thompson:

– Bonds are sold at their market value.


– It is in accordance with the law of the land, by which I am prepared to stand. But I ask the Government to give this matter its closest attention. I know it will do that. I have investigated this case, and other cases, and know that the persons concerned are in an awful position. They do not wish to shirk their responsibilities; they are anxious to do their best. Many of them who invested more than they conveniently could in government stocks have since found that the authorities or the Government are now depriving them of their bard-earned cash.

SenatorRAE (New South Wales) [4.11]. - In supporting the remarks of Senator Kneebone, I should like to take this opportunity to repeat what I said when the conversion loan was brought “into the realm of practical politics, that voluntarism and compulsion are as far apart as the poles. Consequently, it was a sheer piece of hypocrisy for Parliament to provide by legislation that the conversion was voluntary, when at the back of our minds it was the intention to compel those who dissented to make the same sacrifice as those who converted voluntarily. We cannot have voluntarism and compulsion at the same time. There was no voluntarism about it when it was intended to compel dissenters by legislation to bear the same sacrifice. It must now be admitted that those who advocated straight-out compulsory conversion were on sound ground. We did not advocate any hypocritical or camouflaged conversion.

Senator Dunn:

– The Government is doing what Mr. Lang was accused of doing.

SenatorRAE. - Yes; whatever proposal Came from that quarter was condemned. The Government is now doing what I said would be done. If we intended to make the conversion voluntary those who dissented should not have been submitted to any penalty whatever.

Senator Sampson:

– That was not proposed in the bill.

SenatorRAE. - If it were- intended to be a voluntary conversion loan why should those who object be subjected to any penalty whatever; if they are to be, it cannot be regarded as a voluntary conversion.

Senator Sampson:

– The bill does not. mention compulsion.

SenatorRAE. - It was said that those who declined to convert would be dealt with. The Government’s proposal is a specimen of the common hypocrisy which obtrudes into our legislation.

I rose more particularly to refer to the three points raised by Senator Dunn with respect to the proposal to provide employment for the residents of the waterside suburb of Balmain near Sydney in breaking up certain vessels. Hitherto, it has been a part of the idiotic system under which we live for obsolete war vessels, irrespective of their original cost, to be towed out to sea and sunk. Before the H.M.A.S. Australia was sunk, it was admitted that she could have been put to some practical use, but nothing was done. Owing to some idiotic arrangement with the Powers at the time she had to be sunk. That has been the practice in connexion with other obsolete vessels which are lying idle and encumbering, the harbour, although valuable work could have been done by breaking them up. It would be good business on the part of the Government, not as an act of charity, but in order to provide employment, to dismantle these vessels.

Senator McLachlan:

– What could they be used for when broken up?

Senator Dunn:

– The material could be sold as scrap.

Senator RAE:

– I am informed by those connected with the shipping industry that a considerable quantity of valuable material could be made available.

Senator Foll:

– Ship-breaking is a big industry overseas.

Senator RAE:

– Yes. The Government should give attention to the suggestions made with respect to the vessels mentioned by Senator Dunn.

Certain legislation in connexion with war pensions was passed some time ago - I am happy to say that I refused to support it - under which the dependants of many of our returned soldiers were legally robbed. The big man received the benefit, but the small man had to make the sacrifice. These men have been penalized and robbed. The promises made to them have been absolutely repudiated, and it would be rendering them some small measure of justice to restore to them that of which they have been robbed. If those purchasing homes were granted some reduction in interest corresponding with the general reduction which is taking place in other directions, their position would not be so acute.

Even at the risk of detaining the Senate, I wish to refer to the action of the Commonwealth Bank in competing with the Government Savings Bank of New South Wales. Whatever honorable senators may think of the State Government of New South Wales does not concern me, and is of no consequence in connexion “with this matter. Some little time after the closing of the Government Savings Bank of New South Wales, the Chairman of the Commonwealth Bank Board made an important, well thought out, and authorized statement to the effect that it was owing to the mischievous action of some and the folly of others that the Government Savings Bank of New South Wales was compelled to close its doors. At the time, he added, it had assets more than sufficient to cover its liabilities, but that it was not possible to liquify those assets in sufficient time to meet the run on the bank. He said that the run on the bank need never have occurred but for the mischievous action of some, and the folly of others. It is well known that in a short time some £16,000,000 were withdrawn from the bank and that no private trading bank could have stood up to a similar run. In the bank smash of 1S93, the Government of the day promised certain legislation in order to allow the banks to escape from the financial position into which they were then plunged. But the Government definitely and distinctly told the banks which still remained open that no legislative relief would be afforded if they allowed any one of the remaining banks to close its doors. Consequently, one institution which was in a particularly rocky condition,” was saved by the other banks, which immediately brought their gold to its assistance and thereby permitted it to meet its liabilities. Subsequently, the Government introduced legislation which I, then a member of the’ State Parliament, opposed. It provided those banks with an opportunity to reconstruct. Those institutions which had survived rushed their gold to the support of the one which was on the point of closing its doors, and so prevented that catastrophe from overtaking that institution. It is well known that action along similar lines has been taken since that date. There was nothing to prevent the Commonwealth Bank Board from coming te the rescue of the Government Savings Bank of New South Wales. I challenge any one to refute the assertion that had Sir Robert Gibson, a week prior to the closing of that institution, made the statement that he made subsequent to its closing, the catastrophe which overtook it would have been avoided. Honorable senators must admit that the occurrence was not a cause for rejoicing.

Senator Sampson:

– It was a calamity.

Senator RAE:

– Every one will agree that it was a calamity; and it could have been avoided had the chairman of the Commonwealth Bank Board acted in the manner that I have indicated.

Senator Daly:

– Had the same consideration been given as was extended te the Government Savings Bank of Western Australia, it would not have occurred.

Senator E B Johnston:

– The people of Western Australia have faith in the Government of that State.

Senator RAE:

– The faith of the people of Western Australia in the Government of that State, or the lack of faith of the people of New South Wales in their Government, has nothing whatever to do with the case. In my opinion, there was a conspiracy between those who are concerned in the management of the Commonwealth Bank and some persons who occupy high places in the political life of this country, to bring about the closing of the Government Savings Bank of New South Wales.’

Senator E B Johnston:

– The adoption of a policy of repudiation by the Lang Government was responsible.

Senator RAE:

– That is entirely wrong. Long before Mr. Lang propounded what is known as the Lang Plan some members of the previous State Government asserted that if the Lang party were returned to power Mr. Lang intended to seize from the Government Savings Bank of New South Wales the assets of the people of that State. The most villanous lies were uttered as political propaganda. The ex-Premier, Mr. Bavin, aud his Treasurer, Mr. Stevens, as well as other prominent members of that party, openly stated that if the people returned the Labour party to power Mr. Lang would rob them of their savings.

Senator Thompson:

– The New South Wales Government did not repay at the proper time large sums that were owing to the bank; that was one of the contributing causes of its failure.

Senator RAE:

– The honorable senator’s view of the matter is perverted. For many years different governments in New South Wales have borrowed from the Government Savings Bank of that State. That practice has been followed in every State. The money that was owing when Mr. Lang came into power had been borrowed by previous Governments. Senator Dunn has reminded me tha t in the first three months of the Lang Government’s tenure of office the withdrawals from the Government Savings Bank of New South Wales amounted to £14,000,000. I ask any honorable sena tor to point to a private trading bank that could withstand a run of that kind if the other banks did not come to its assistance. I repeat that, merely for party political purposes, the statement was made that Lang and his supporters would rob the people of their savings if they were returned to power.

Senator Foll:

– Does the honorable senator say that the bank would not have closed had Lang not been returned to power ?

Senator RAE:

– I say that, for political purposes, the statement was repeated over and over again by those who were opposed to the Lang party, that if that party were returned to power it would steal from the bank the savings of the people, and that that was the primary cause of the run upon the bank.

Senator BRENNAN:
Attorney-General · VICTORIA · ALP

– The Lang party was in power for eight months before the bank closed.

Senator RAE:

– It does not matter how long they had been in power; the position of the bank was shaken by the political propaganda of the other side, the object of which was to destroy the bank and pull down Lang in ‘the process. The closing of that institution had a repercussion in a run that started on the Commonwealth Bank; but that bank was able to stem if. There was nothing to prevent the Commonwealth Bank from placing at the disposal of the Government Savings Bank of New South Wales the surplus notes in its possession, and thus averting the calamity, as had been done on previous occasions. Those notes could have been returned immediately the run was stopped. When the banks crashed in 1893, there was no such thing as a Commonwealth note issue, every private trading bank issuing its own notes.

Senator McLachlan:

– The position at that time was saved by the guarantee which was given by the Government.

Senator RAE:

– Why, then, did all except four of the banks that were doing business in New South Wales close their doors ?


– It was the Government’s guarantee that saved those four.

Senator RAE:

– That guarantee was given after the event. The Government vernment was in negotiation with the of the day brought down two measures, the purpose of one of which was to make the notes of the private trading banks legal tender. That was a -magnificent present to the banks ; it made their notes legal tender without any gold backing, their paper money having to be accepted as though it were sterling. The purpose of the other measure was to enable those institutions to reconstruct, by locking up their deposits for long periods. Those who had money on fixed deposit were paid very little more than half the interest which they were compelled to pay for bank accommodation. I know business men who, at the time, had money on fixed deposit with the private trading banks. Those deposits were locked up for periods ranging up to 32 years.

Senator Thompson:

– Some of them were locked up in perpetuity.

Senator RAE:

– “When those men wanted capital they were compelled to borrow from the banks and pay twice the rate of interest that they were receiving on their locked-up deposits. This great calamity affects a very large percentage of the people of New South Wales, and, indirectly, does harm to the whole of the Commonwealth. I charge those who are responsible with having taken a dastardly part against the interests of the Commonwealth, believing that if the bank were forced to close, the Lang Government would be broken as a result.

Senator Thompson:

– Want of confidence in the Lang Government was :the principal cause.

Senator RAE:

– The fact cannot bo denied that that want of confidence was brought about by the most infamous means. Those responsible were not courageous enough to fight the Lang Government on its merits or demerits, but circulated the most venomous and lying statements in order to shake confidence in the bank. Honorable senators would like to make it appear that the Lang Government did not possess the confidence of the people. How can that be, when only a few months earlier it had been returned to power, with the largest majority that any party had ever received, showing that very much more than 50 per cent, of the people who voted were in favour of its being given a square deal? I realize what has happened; but it is my duty as a public man and a member of this Senate to place on record my absolute conviction - I go further and say my knowledge - that it was a base conspiracy which caused the overthrow of that bank. But bad as that was, there i$ a similar conspiracy in existence to-day which has the still viler purpose of endeavouring to smash this institution, when a very fine attempt is being made to place it once more on its” feet. I admit that many years ago the then Government of New South Wales illadvisedly attempted to compete with the Commonwealth Bank by erecting, at considerable cost, buildings for the conduct of savings bank business in various towns throughout the State. It is regrettable that an arrangement was not made when the Commonwealth Bank was first instituted, to avert that sort of competition. The Federal Government of the day, of which I was a supporter, tried to come to terms with all the States, so that they would merge their business with that of the Commonwealth Savings Bank. Those overtures proved successful in the case of one or two States, but were rejected by the others. But the fact remains that a very fine attempt is being made to place the Government Savings Bank of New South Wales on its feet, so that ultimately, and as speedily as possible the .old depositors who are at the great disadvantage of having their money locked up, will be repaid. The Leader of the State Country party, the Leader of the Opposition, and many other prominent men in New South Wales associated with political parties that are opposed to the present Government, have designedly opened accounts in the new branch of the Government Savings Bank of New South Wales, that commenced operations a few weeks ago. They desire to help to rebuild that institution. Therefore it is not a Lang bank. The law establishing it has been so framed as to preclude political interference; so it is the bounden duty of all those who are in a position to do so to give every possible assistance to re-establish it.

Senator Thompson:

– There was criminal delay in re-establishing it.

Senator RAE:

– There was not. The delay was unavoidable. The State Go- that nothing is gained by wailing over Commonwealth Bank Board for the merging of the State institution with the Commonwealth Bank. As soon as possible, after it was definitely ascertained that the State Bank would not get a fair deal from the board, the Lang Government took steps to re-establish the bank. I associate, myself with the protest of Senator Dunn that the Commonwealth Bank should not, at the expense of the nation, undertake the building of special banking premises, costing tens of thousands of pounds merely for the purpose of interfering with business that is being done legitimately by the Government Savings Bank of New South Wales. In many cases, these premises are being erected as near as possible to -existing State banks, manifestly with the object of destroying the latter institution which is making heroic efforts to reestablish itself. It is the duty of those who know these facts to ventilate them, and, if possible, to visit future, punishment upon those who are responsible for such dastardly action against one of the most important institutions in New South Wales.

Senator BRENNAN:
Victoria · ALP

– I desire to bring under the notice of the Minister representing the Treasurer (Senator Barnes) a matter that concerns the harassed taxpayer, namely, the relation of the unemployment tax, which has been enacted in Victoria, to federal income tax exemptions. Under the Commonwealth Income Tax Act, an amount paid by way of State income tax is an allowable deduction. Although the Victorian unemployment tax is, in fact, an income tax because it is based on income, the Federal Commissioner of Taxation does not allow it as a deduction. In other States the very same taxation legislation has been passed; but it has been called an income tax act and, consequently, payments made under it are allowable deductions. The Victorian act is entitled an Unemployment Tax Act, but, as I have stated, it is really a tax on income. The rule of the law courts, in construing an act, is to consider, not its title but its pith and substance, and, as I have explained, the pith and substance of the Victorian act. as also the pith and substance of similar measures passed in other States, show that it is an income tax. Because of the different titles given to these measures in the several States, the Federal Income Tax Commissioner differentiates, for federal income tax purposes, between the taxation of citizens in Victoria and citizens in some of the other States.

Senator Rae:

– The New South Wales act is called an unemployment tax.

Senator BRENNAN:

– That is so, and I understand that the Federal Commissioner of Taxation does not allow as a deduction payments made under it. It is obvious that if these payments are allowable deductions in some States merely because the act under which they are made is called - an Income Tax Act, and are disallowed in other States because the taxation measures go by another name, there is unfair discrimination between the taxpayers in different States - a thing that is prohibited by the Constitution.

I also desire to associate myself with the remarks of those honorable senators who have spoken on the subject of war service homes repayments. I, in common with other representatives of Victoria, received only this morning a circular letter dealing with this matter. I am informed that those who are occupying war service homes and have submitted voluntarily or compulsorily to a reduction of income from which they had contracted to meet interest and sinking fund charges on their properties, are now, in common with other sections of the community, suffering severely in these times of financial and economic stress. A great number of them have already lost their homes, and others, I believe, are in grave danger of being dispossessed. I agree with Senators Dunn andRae that the Government might very properly consider the position. The circular letter suggests the appointment of a commission of inquiry. I think the Government should instruct a departmental officer to make the necessary investigation, and see whether some measure of relief cannot be given to those who are in danger of losing their homes.


– They have bees keeping up their repayments magnificently.

Senator BRENNAN:

– I know that is so. For that reason, as well as for past services which they have rendered to this country, they have every right now to expect the Government to do everything possible to afford relief to them.

Senator McLachlan:

– Arrears of repayments, represent only a little over 2 per cent.

Senator BRENNAN:

– I do not often find myself in political agreement with Senators Rae and Dunn, and although I do not wish to associate myself in any way with Senator Rae’s remarks about the “ conspiracy “ to destroy the Government Savings Bank of New South Wales, I am in accord with him upon some points. The honorable senator suggested that the want of confidence in the Lang Government, due to what he termed the dastardly propaganda by political enemies, had been responsible for the closing of the State Savings Bank. His argument was, I think, somewhat faulty, because, when the bank failed, the Lang Government had been in power for seven or eight months, and, as he explained, the people took so little notice of this propaganda that they returned Mr. Lang by an overwhelming majority. Savings bank business in all the States has, in recent years, increased to very great proportions. As a rule, these institutions have been managed in an admirable manner. I therefore deprecate anything in the nature of unnecessary competition between State and Commonwealth savings banks. The public, in the long run, has to pay for this competition without getting any corresponding benefit from it, because the institutions already in existence are ample, and provide a very safe treasure house for the savings of the people. I agree with the view that the Commonwealth Government should not sanction the expenditure of public money in the erection of buildings which, after all, are only to be used in active competition with very admirable State institutions.

Senator DALY:
Assistant Minister · South Australia · ALP

– Dealing first with the representations made by Senator Brennan, concerning allowable deductions for federal income tax purposes, I remind him that there is in the existing law pro vision for an appellate tribunal, and, if the Commissioner is interpreting similar legislation of the various States in the way suggested by him, I feel certain that there would be very little difficulty in upsetting his decision. I agree that the only true interpretation that can be placed upon a statute is that which is ascertained from a study of its pith and substance. This Government will not tolerate differentiation between deductions allowable in the various States. I am indebted to the honorable senator for bringing this matter under the notice of the Ministry. I shall ask the Commissioner of Taxation for a report, and, when the Senate resumes next week, I hope to be in a position to advise the honorable senator further on the subject.

There is a good deal to be said for Senator McLachlan’s complaint concerning the position of the confectionery industry in South Australia. Nobody ever dreamed that the sales tax acts would be perfect instruments for the production of revenue; everybody believed that anomalies would be discovered in the course of their administration. It would appear, from representations that have been made to me in South Australia by Senator McLachlan, and by representatives of the Confectioners Association, that anomalies have been disclosed. It seems that, while legitimate manufacturers are compelled to observe the provisions of factories’ acts legislation, and Commonwealth and State arbitration awards, an exempted class of manufacturers is being encouraged, and, unless these administrative anomalies are rectified, the exempted ‘ manufacturers might force the legitimate concerns out of existence. We should then have unregulated trade, with all its undesirable consequences. I can assure him that the complaint will be brought under the notice of the responsible Minister, and I hope to be in a position to furnish him with further information when the Senate re-assembles next week.

I do not agree that this Government lias been guilty of any net, the effect of which has been to rob anybody in connexion with the conversion loan, or under our war service homes legislation. Senator Sampson, who made this complaint, must recognize that, legally, the Commonwealth Government is a partner with the various States, and that the Premiers’ plan, as it has been called, is the considered view of the leaders of all governments represented at the conference to consider the financial stability of the Commonwealth. The debt conversion loan was part and parcel of that plan. Senator Sampson has asserted that, in respect of a. certain percentage of bondholders, there has been base repudiation on the part of the Commonwealth.

Senator Sampson:

– I charge it with being guilty of unqualified default.

Senator DALY:

– I am afraid that, in common with every other honorable senator, the honorable senator must accept some responsibility for the present position.

Senator Sampson:

– No.

Senator DALY:

– If, as the honorable senator implies, there has been a conspiracy to default, and the Government, is un-Australian in its outlook, we are all in it.

Senator Sampson:

– I said that the Government had defaulted in the payment of interest to the dissenting bondholders.

Senator DALY:

– I do not agree that there was anything sinister in the action of those who appealed to bondholders to make a voluntary conversion of their holdings. I regard it as being creditable to Australia in the highest degree that 97 per cent. of the bondholders were prepared to convert their loans. The honorable senator would defeat that wonderful achievement by complaining against the introduction of legislation to protect them from the 3 per cent. who dissented.

Senator Sampson:

– They should be paid the interest which is due to them.

Senator DALY:

– I agree that this nation should pay, both in interest and principal, 20s. in the £1, but I point out that had the conversion loan not been asuccess, no one would have been paid, either interest or principal. It stands to the credit of the partners responsible for the conversion loan that Australia can still hold up its head and say that it not only can, but that it will, pay 20s. in the £1 to every creditor, both in respect of interest and principal. I know that there will be cases of hardship, but there has never been an act passed by any Parlia ment which has not inflicted hardship on somebody. Every action taken for the betterment of the nation injures some one, and causes hardship.

Senator Sampson:

– Why did not the Government tell the dissenters what would be done to them?

Senator DALY:

– The Government believed that the people of Australia were sufficiently loyal to pay the country’s debts without compulsion. The Labour party does not believe in compulsion or conscription in any form. The response to the conversion appeal is evidence that the Government’s faith in the people of Australia was well founded.

Senator Rae:

– Is it not illogical to penalize those who did not convert their holdings ?

Senator DALY:

– They are not being penalized at all.

Senator Sampson:

– They are not being paid their interest.

Senator DALY:

– They will be paid their interest as well as their principal; but had the conversion loan not been ‘ a success they would have received neither. The honorable senator, as a member of a political party, must . take his full measure of credit or blame for the united action taken by all political parties to convert Australia’s internal indebtedness. The Government has not acted dishonorably nor need any of the partners to the conversion scheme have any qualms of conscience regarding this matter. I firmly believe that the success of the conversion loan is the beginning of the end of Australia’s troubles; that the faith in their country which the Australian bondholders displayed heralds the return of prosperity to this country. We must, however, abandon all wrangling and pull together for the common good.

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– The Leader of the . Opposition (Senator Pearce) inquired whether copies of the Macmillan report would be made availableto honorable senators. I have no doubt that copies of such an important document can be made available to honorable senators. I shall look into the matter.

Senator Poll suggested that Mr. Bruce, a former Prime Minister, be asked to assist in arranging for the conversion of our overseas indebtedness while in Britain. I have no doubt that when the Government deals with the overseas indebtedness of Australia, it will call to its aid gentlemen capable of giving it the best advice possible.

Senator Johnston was a little unfair in his complaint regarding the calling of the Senate together. In this matter, the practice is for the Senate to instruct its President to do certain things, which, after consultation with the Prime Minister in order to ascertain whether there will be business for the Senate to transact, he docs. The Government cannot be blamed if the discussion of the tariff in another place has taken longer than was anticipated. Knowing that- the Senate was desirous of dealing with the tariff, the President arranged for the Senate to be called together last week, but when I discovered that there would then bc no business for the Senate to transact,” I got in. touch with the President, (Senator Kingsmill), the Leader of the Opposition in the Senate (Senator Pearce), and the Opposition Whip (Senator Foll). Had .we been without a quorum when the Senate met an adjournment from day to day would have been necessary. Consequently, I endeavoured to ensure the presence of a quorum here to-day, comprising honorable senators who could most easily reach Canberra. I did not want any honorable senator to travel from Western Australia to be present on the re-assembling of the Senate this week. Indeed, I made a special effort to prevent them from travelling at all. After consultation with other honorable senators, I was assured that a quorum would be present. I did my best, and the Opposition Whip also rallied his forces. Indeed, he brought more honorable senators of the Opposition than I expected to see.

Senator Sampson referred to the conversion loan, and the non-payment of interest to dissenters. The Government has not acted blindly in this matter. It knew that there would be dissatisfaction, and some cases of hardship; but it made provision that, so far as possible, that hardship would be alleviated. I personally have sent on to the proper authorities cases in which I have reason to believe hardship would be inflicted, and I understand that they and all similar cases are receiving consideration;

Senator Dunn spoke of the unemployment prevailing at Balmain. Ever since it assumed office, the Government has been doing its utmost to relieve unemployment. To that end, it has consulted with economic and financial experts, and has acted on their advice, with a view to restoring confidence in Australia so that money might be obtained to provide employment for our people. There is plenty of work to be done in Australia, but, unfortunately, money cannot be found to carry it out. The Government has done its best, and is hopeful of obtaining money iu the near future. Legislation is being introduced in the several Parliaments of Australia which, it is hoped, will complete the good work performed by the 93 per cent, of bondholders who voluntarily converted their holdings.

Honorable senators, have referred to cases of hardship in connexion with war service homes. It is true that many occupants of war service homes are suffering hardships; but, unfortunately, there are tens of thousands of others in Australia who are in a similar position. For all of them the Government is striving to do the best possible.

Senator Bac spoke of the competition which exists between the Commonwealth and State savings banks. That competition would not exist if the State institutions were fulfilling their proper functions. I do not doubt that the Government Savings Bank of New South Wales was wisely conducted, and rendered wonderful service to the people of New South Wales, but T point out that in the matter referred to the Commonwealth Government has no control whatever over the Commonwealth Bank. Section 22 of the Commonwealth Bank Act provides that -

The board may establish branches or appoint agencies of the bank in any part of the Commonwealth or nf any territory under the Commonwealth.

That power is vested in the Bank Board, not in the Government. So if any one is to blame it is the Bank Board. The

Government has endeavoured to pass legislation to control the whole banking system of Australia in the interests of the people, rather than in the interests of private shareholders. That is still the Government’s policy.

The PRESIDENT (Senator the Hon W Kingsmill:

– Before putting the question, I desire to make clear the position with regard to the re-assembling of the Senate. I understood the Leader of the Senate (Senator Barnes) to say that I called the Senate together last week. I did nothing of the sort; I called the Senate together, for to-day. But for the influence which I exercised, the Senate would have been called together last week-

Senator Barnes:

– I am sorry that I stated the position wrongly.


– And honorable senators would not have had this extra seven days.- Let me say at once that I regard this practice of adjourning the Senate sine die as being improper, unconstitutional and directly opposed to parliamentary procedure. It is an expedient which should only be used in the . stress of an extreme national emergency, such as a state of war. As a matter of fact, it was introduced during a state of war and should not have been continued a day longer than the existence of that state of war. I want to make my position very clear in this matter. As a rule there is no consultation upon the . point. The President is instructed by the Senate to fist the date of reassembling, and this he does at the request of the Government in power. On this occasion the date advised by’ the Government was so obviously likely to result in great inconvenience with no corresponding benefit to honorable senators that I ventured to speak to the Prime Minister and to- the Leader of the Senate concerning it, and they were good enough to concede an extra seven days, which extension it now appears, was not long enough. I should be very glad indeed to see discontinued this system of adjourning the Senate sine die which takes out of the hands of the Senate the conduct of its own affairs.

Question resolved in the affirmative.

Senate adjourned at5.7 p.m.

Cite as: Australia, Senate, Debates, 7 October 1931, viewed 22 October 2017, <>.