1933-10-11 13 1 4 REPS 3405 0 House of Representatives. 1933-10-11 Mr. Speaker (Hon. G, H. Mackay) took the chair at 3 p.m., and read prayers. 3405 Bill The following bills were returned from the Senate without amendment: - Appropriation (Works and Buildings) Bill 1933-34. Loan Fund Expenditure Bill 1933. 3405 Bill Assent to the following bills reported: - Supply Bill (N0. 2) 1933- 34. Appropriation (Works and Buildings) Bill 1933-34. Loan Fund Expenditure Bill 1933. 3405 Miscellaneous Resignation of Right Honorable S. M. Bruce - Issue of Writ 3405 10000 0 0 MACKAY, George Mr SPEAKER (Hon Q H Mackay - I have to announce that I have received from the Right Honorable S. M. Bruce a letter resigning his seat as member for the electoral division of Flinders in the State of Victoria, to take effect from the 6th October, 1933, and that I propose to issueto-morrowa writ for the election of a member to serve for the said electoral division. The dates in connexion wilh the election will be fixed as follows: - Date of issue of writ, 12th October; date of nomination, 30th October; date of polling, 11th November; return of writ, on or before the 2Sth November, 1933.. 3406 Miscellaneous 3406 F4O Wilmot UAP r-Prime Minister and Treasurer 1 0 LYONS, Joseph Aloysius Mr LYONS . - by leave - I desire to inform the House thai the_Right Honorable S. M. Bruce, C.H., M.C., and Senator the Honorable Sir Walter MassyGreene, K.C.M.G. 'have ceased to be members of the .Ministry. 3406 miscellaneous Appointment of Right Honorable S. M. Bruce 3406 F4O Wilmot UAP Prime Minister and Treasurer 1 0 LYONS, Joseph Aloysius Mr LYONS . - by leave - I desire to inform the House that the Government has decided to appoint the Right Honorable S. M. Bruce as High Commissioner for Australia in the United Kingdom. The appointment will take effect immediately. The arrangement under which Mr. Bruce remained a member of the Ministry, while "representing Australia in London, has proved most satisfactory in practice. It is felt, however, 'that such an arrangement, if continued indefinitely in the case of a particular Minister, would involve a departure from the principle of the collective responsibility of Ministers. To this principle the Ministry, collectively, and Mi1. Bruce, individually, attach great constitutional importance. The question , has, therefore, arisen whether Mr Bruce could better serve the Commonwealth's interests by remaining in London in the capacity of High Commissioner, or by returning to Australia. The Ministry felt that. Lt was very important that Mr. Bruce, should continue the work that he has been doing in London. While Mr Bruce himself was prepared to serve the Commonwealth in any capacity desired, lie concurred in the view that much important work still remained to be done in London, and that, if ho "(vere to remain there, it was undesirable that he should do so as a member of the Ministry. Accordingly, Mr. Bruce has agreed to accept the office of High .Commissioner. Unfortunately, he could not be of service as a Minister both here and in London simultaneously. The wide experience and skill in financial matters which Mr. Bruce possesses have already borne fruit in the outstanding success of his efforts for the conversion of our loans abroad. There was the frankest consultation between us, and Mr. Bruce. wa3 at all times entirely free to make his own choice. For myself, I shall feel keenly the loss of his valuable advice and ripe knowledge in. the Cabinet. No leader could have wished for a more loyal colleague. He is an outstanding figure in London, and his distinguished services, not only to Australia, but also to the Empire as a whole, are widely appreciated in Great Britain. Australia could not have a hotter representative in the international sphere. As Mr. Bruce has already been absent from Australia for more than a year, he will, at the appropriate time, return to Australia for a short period to renew his contact with local affairs. 3406 Questions 3406 3406 KLL 0 0 MAKIN, Norman Mr MAKIN - Will the right honorable the Treasurer consider the payment of the increased pensions rates from a date prior to one determined by the passage of the amending legislation? 3406 F4O UAP 1 0 LYONS, Joseph Aloysius Mr LYONS - I have already pointed out that 'the increase can take effect only after it has been approved by Parliament. Actually, it will begin to be paid from the date when the act is proclaimed, following the assent of the Governor-General to it. No time will be lost in obtaining that assent when the bill has been passed by both Houses of the Parliament'. 3406 3406 KOC 0 0 HAWKER, Charles Mr HAWKER - I should like to be informed whether the Attorney-General has taken cognizance of the report that efforts are being made to extend the strike in the meat export trade in Melbourne to other branches of the meat industry in that and other cities, and whether he is considering the taking of action, either by conciliation commissioners or through other channels, to prevent this hold-up at the peak period of the meat export season? 3407 F4O UAP 1 0 LYONS, Joseph Aloysius Mr LYONS - At the moment, the right honorable the Attorney-General is absent from Canberra, but I shall bring to his notice immediately the matter raised by the honorable member. He may already have given some consideration to it. 3407 3407 C7E 0 0 PAGE, Earle Dr EARLE PAGE - In view of the difficulties that have arisen in connexion with the implementing of the report by the Tariff Board on primage and exchange, which are causing considerable delay in connexion with the handling of goods, will the Ministry expedite the matter so that relief may be afforded? 3407 F4O UAP 1 0 LYONS, Joseph Aloysius Mr LYONS - We shall do everything possible to expedite the matter. A great deal of responsibility will rest with individual members on both sides of the House. If the matter can be disposed of promptly by Parliament itself that will be the most effective way of giving relief. 3407 3407 JOS 0 0 BELL, George Mr BELL - Has a decision yet been reached regarding the restoration of the letter delivery by carriers in Queenstown, a matter regarding which representations have been made by myself and others? 3407 KXQ UAP 1 0 PARKHILL, Robert Mr ARCHDALE PARKHILL - This matter has been reconsidered as a result of the representations of the honorable member and other honorable members representing Tasmania, and it has been decided that, after the usual counter delivery has been made following the arrival of the train, the residue of the mail shall be delivered by carrier. 3407 3407 KJQ 0 0 JAMES, Rowland Mr JAMES - In view of the complaints from Australian shipping companies and from the maritime unions regarding the unfair competition of the highly subsidized Matson Shipping Line, and in view of the admission of the Minister for Commerce that he would prefer to be fighting the case for the unions rather than against them, is it the intention of the Government to bring down legislation placing a prohibited surcharge on all passenger tickets and all bills of lading issued by this company when trading between certain specified Australasian ports which are not covered by the navigation laws of Australia and New Zealand? 3407 KV7 UAP 1 0 STEWART, Frederick Mr STEWART - This subject is at present under consideration by the Government in conjunction with the Government of New Zealand. 3407 3407 KFE 0 0 GREGORY, Henry Mr GREGORY - Last year the Government introduced a customs bill containing two important amendments, and it is still on the notice-paper. Seeing that most honorable members on this side of the House are pledged to support the principles embodied in those amendments, will the Prime Minister state whether it is the Government's intention to go on with the bill, and, if so, when? 3407 F4O UAP 1 0 LYONS, Joseph Aloysius Mr LYONS - The Government proposes to go on with the bill, but there are other more important matters to be dealt with first. 3407 3407 KX9 ALP; FLP from 1931 0 0 WATKINS, David Mr WATKINS - In view of the fact that one of the major oil companies is now breaking verbal agreements entered into with the smaller independent oil companies which were chiefly responsible for bringing down the price of petrol, will the Prime Minister authorize the royal commission which is inquiring into the petrol industry, to visit Newcastle, where it will be able to obtain some definite information on this subject? 3407 F4O UAP 1 0 LYONS, Joseph Aloysius Mr LYONS - I cannot give an assurance that the commission will visit districts other than those already decided upon. Requests have been made that the commission should visit the capitals of the more distant States, and it was agreed that if evidence was offering of a nature which would justify such action the commission might do so. However, if it goes to Newcastle it may be called upon to visit numerous other towns throughout the Commonwealth. Honorable members are constantly asking when the report of the commission will be made available, and the Government is just as anxious as honorable members are to have the report presented; but, if the commission is required to go on peregrinations all over the country, the report must necessarily be delayed, and the honorable member himself will be dissatisfied. 3408 3408 KHG 0 0 HILL, William Mr HILL - When will the Minister for Commerce be in a position to make a statement regarding the policy of the Government for implementing the international wheat agreement? 3408 KV7 UAP 1 0 STEWART, Frederick Mr STEWART - At this moment the matter is receiving the Government's most serious consideration. It is impossible to say when we shall be able to convene the necessary conferences to discuss the matter, but honorable members may rest assured that no undue delay will occur. 3408 KX7 0 0 WARD, Edward Mr WARD - Following the statement of the Minister to the House last Friday relative to the international wheat agreement, of which Australia is a signatory, and in respect of which he stated that it was estimated that the importing countries would require 562,000,000 bushels of wheat for 1933-34, will the Minister inform the House from what source additional requirements will be obtained in event of the demand proving greater than the estimate? 3408 KV7 0 0 STEWART, Frederick Mr STEWART - Part of the agreement provides that, in the event of the world demand exceeding the estimate, the requisite additional supplies will be drawn from surplus stocks in North America. 3408 KX7 0 0 WARD, Edward Mr WARD - Will the Minister for Commerce inform the House which countries, being signatories to the international wheat agreement, have consented to fixed quantities of exports? 3408 KV7 0 0 STEWART, Frederick Mr STEWART - The whole of that information is contained in the agreement which was tabled by me in this chamber last week. But I shall personally supply the honorable member with the information which he desires. 3408 3408 K9A 0 0 GANDER, Joseph Mr GANDER - Will the Postmaster-General state whether it is the intention of the Government to issue wireless listening licences free to blind persons? 3408 KXQ NAT; UAP from 1931 0 0 PARKHILL, Robert Mr ARCHDALE PARKHILL - This matter has been brought under the notice of the Government by practically every honorable member of the House, and by various organizations as well. A statement regarding the Government's intention and policy will be made when the Postal Estimates are being discussed. 3408 3408 JVZ 0 0 CAMERON, Malcolm Mr CAMERON - Seeing that the full amount of the subsidy of £250,000, which was made available last year to enable producers other than wheat-growers to purchase superphosphates was not absorbed, will the Government give an undertaking to supplement the unexpended balance to make the amount equalto last year's grant? 3408 F4O UAP 1 0 LYONS, Joseph Aloysius Mr LYONS - I undertake to give consideration to the honorable member's request. 3408 3408 KNX UAP; LP from 1944 0 0 HARRISON, Eric Mr E J HARRISON - In view of the fact that orders are being delayed, trade dislocated, and unemployment aggravated as a result of the uncertainty which exists regarding the date upon which the proposed sales tax remissions will operate, will the Treasurer state when the new condition of affairs will come into operation? 3408 F4O UAP 1 0 LYONS, Joseph Aloysius Mr LYONS - I have already pointed out that it is the intention of the Government to make this relief date from the issuing of the proclamation following the Royal Assent to the necessary legislation. That, admittedly, leaves the date open, but it is the only course which can be followed. The Government has estimated that a certain amount of revenue will be collected for the year from various sources. It has already shown that it is anxious to give the fullest relief as early as possible. The proposals covering these matters have been brought forward in thebudget which is now in the hands of honorable members, who can facilitate or delay their operation. Personally, I hope that we shall lose no time in approving of them. 3409 3409 KWC 0 0 THORBY, Harold Mr THORBY - Is it a fact that the Customs Department is now demanding certain deposits in opposition to the decision of the House in connexion with the reduced duties, and if deposits are being demanded on goods that have been imported since last Thursday, is it the intention of the Government to allow them to be retained by the department for all time? 3409 KZR UAP 1 0 WHITE, Thomas Mr WHITE - The Prime Minister (Mr. Lyons) has already answered a question asked by the right honorable member for Cowper (Dr. Earle Page) on the same subject, but to further elucidate the matter I may say that all reductions of duty, in primage and other duties, operate immediately a schedule is tabled, except those that fall below the 1928 level. Those in that category have 'been reduced temporarily to the 1928 level; but, as soon as the amended tariff is passed, the full reductions will operate. I suggest to honorable members that short speeches on the bill will hasten the operation of the tariff schedule, and enable the reductions of duty to take full effect. Later: 3409 KWC 0 0 THORBY, Harold Mr THORBY - I ask the Minister for Trade and Customs if it is a fact that the customs authorities are demanding sums of money by way of deposits in excess of the duties prescribed in the last schedule tabled in this House, and if it is intended to enforce these duties, or to regard the payments as deposits and refund the amounts when the amended schedule is ratified? 3409 KZR UAP 1 0 WHITE, Thomas Mr WHITE - The so-called deposits represent the difference between the 1928 rates and those in the latest schedule. Such payments have never been refunded in the past, neither by the Bruce-Page Government nor by any other administration back to the inception of federation. It has been the practice that duties once collected are always retained. Honorable members interjecting, 3409 10000 0 0 SPEAKER, Mr Mr SPEAKER - I ask honorable members not to comment on answers given by Ministers. The practice is growing, and it is, I think, a very undesirable one. 3409 3409 KOC 0 0 HAWKER, Charles Mr HAWKER - Is the Minister for Trade and Customs in a position to give to the House any information regarding the outcome of negotiations with Ministers from South Australia and other States on the subject of whether it is possible to give relief to returned soldier settlers and other settlers who have been forced to grow on their holdings certain grapes for wine and spirit purposes for which there is little sale? 3409 KZR UAP 1 0 WHITE, Thomas Mr WHITE - A scheme propounded by the Commonwealth Government, and submitted to the Minister for Lands and Premier of South Australia, has been consideredby the Government of that State, and, I believe, will be accepted by it, although I have not yet received official confirmation of that fact. 3409 Miscellaneous 3409 KFA Richmond CP 0 0 GREEN, Roland Mr R GREEN - I desire to make a personal explanation. In the Tweed Daily, published at Murwillumbah, on the 7th of this month, appeared an article headed, " No Investigation to be made - Repatriation Commission's Work." The article relates to certain statements made by myself during the debate on the Supply Bill last week. It reads - The Minister for Repatriation (Mr. Marr) stated to-day he was satisfied the charge arose out of Mr. Green's personal hostility towards Mr. Semmens. The Government, he added, had found Mr. Semmens a very competent officer, and was satisfied it was quite unnecessary to take the matter further. Mr. Green had several times gone out of his way to make attacks on that gentleman under the privilege of Parliament. I do not know whether the Minister is correctly reported in that article; but let me say that, in the first place, the article is definitely and absolutely untrue. I have no personal hostility against Mr. Semmens. I have not spoken to that gentleman for so many years that I have nearly forgotten what he looks like. Secondly, the article imputes improper motives to me in that I used my place in this House to pursue a private vendetta. Actually, no private vendetta exists. The fact is that I used my place in this Parliament to bring forward what I believed to be serious charges of maladministration against the department, and the only officer mentioned was the Chief Commissioner. That gentleman, holding, as he does, the position of Chief Commissioner, must bear the responsibility for what I consider to be maladministration and the improper policy of the department. If the Minister takes the responsibility for having inspired this article in the press, then the remarks that I have made concerning the Commissioner for Repatriation apply also to him, because he is in charge of the Repatriation Department. 3410 KMW Parkes UAP Minister for Health 1 0 MARR, Charles Mr MARR - I wish to make a personal explanation. The report which the honorable member for Richmond (Mr. R. Green) has read was not inspired by me. It was evidently taken from the reply which I gave to his accusations in this chamber. I repeat that the honorable member for Richmond has incessantly - as a perusal of Harvard will show - made attacks upon the Chief Commissioner,, who is the Chairman of the Repatriation Commission. Those attacks are quite unworthy of the honorable member, and his accusations are untrue. When making his speech the other day, he did not bring to my notice as Minister the name of one individual who had been wrongly treated by the Repatriation Commission, or whose case had not been handled sympathetically. I again say to the honorable member that if he will give me the names of persons or exsoldiers who have not received proper treatment, I shall make it my personal obligation to inquire into their cases. The Chief Commissioner has the entire confidence of the Government, and the attack upon him was most unfair and uncalled for. If the honorable member has any accusations to make against the Chief Commissioner, the Government will, so soon as they are brought under its notice, cause inquiries to be made respecting them. 3410 Questions 3410 Dismissal of Limbless Soldiers 3410 L08 0 0 ROSEVEAR, John Mr ROSEVEAR - In view of the statements made in the House by the Minister at the time of the leasing of Cockatoo Island Dockyard to the effect that the private company would find employment for all the then employees, and many others, does he not consider thc immediate dismissal, by the company of eight limbless soldiers, who have since been unemployed, to be a breach of, if not the written, then at least, the implied terms of the contract? If so, cannot the Government prevail on the company to carry out its obligations to these men? 3410 F4O UAP 1 0 LYONS, Joseph Aloysius Mr LYONS - First of all, let me say that the company has no definite obligations in regard to these men. When the agreement was entered into, the position was that the Government could not have continued any longer to sustain the huge loss involved in the operation of Cockatoo Island Dockyard from year to year; and whether the dockyard was continued by the Government or taken over by a company, it would have been necessary to shorten hands. Prom a financial aspect, the position could not have been justifiably maintained by the Government, there being a loss on the operation of Cockatoo Island Dockyard of £60,000 a year. We, therefore, entered into an agreement with a private company in the hope that it would, not only lead to a better development of the works and more employment, but also entail a smaller loss financially on the part of the Government. 3410 L08 0 0 ROSEVEAR, John Mr Rosevear - Was it not stated that the employees would continue to be employed? 3410 F4O 0 0 LYONS, Joseph Aloysius Mr LYONS - I said that an effort would be made to keep the men, particularly the limbless soldiers, in employment. Every effort has been made up to the present to keep to that arrangement, but when it was found that many men could not continue to be employed in the works we searched the Commonwealth departments with the desire to find employment for them. We are still doing that. Whenever an opportunity presents itself to place one of these men in employment, it will be cheerfully grasped. That is all that can be done at the ])resent time. One of the budget proposals of the Government for the year is that a vessel shall be built for the Navy, and if it can be constructed at Cockatoo Island Dockyard it will provide increased work there. Of course, we cannot give an open cheque. Thc vessel can be built- at Cockatoo Island only if arrangements satisfactory to the Government can he made. If, however, it is built there, a definite improvement will occur in the employment position. The Government will do everything it possibly can to provide employment for the limbless soldiers and for others. 3411 3411 KJQ 0 0 JAMES, Rowland Mr JAMES - Since it is generally claimed that the reduction of taxation will mean less unemployment, will the Prime Minister indicate how many millions will have to go back to vested interests to enable all the unemployed to be absorbed in industry, seeing that since £2,100,000 was remitted in November last the unemployment figures have been reduced by only 2.4 per cent.? 3411 F4O UAP 1 0 LYONS, Joseph Aloysius Mr LYONS - I think I made it quite clear, in presenting the budget, that the whole aim of the Government in 'reducing taxation is to relieve industry and place it in a better position to absorb the unemployed. I repeat that, unless industry can solve this problem, it cannot be solved, because if the unemployed cannot be re-absorbed in industry, they cannot be found employment by the Commonwealth Government, or even by all the governments of Australia acting conjointly. All that they can do is to make the conditions such that it will be possible for industry to re-absorb the unemployed. 3411 papers The following papers were presented: - Commonwealth and State Ministers - Conference held at Melbourne, June, 1933 - Record of Proceedings and Decisions with . Appendices. Canned Fruits Export Control Act - Seventh Annual Report of the Canned Fruits Control Board, for year ended 30th June, 1933, together with a statement by the Minister regarding the operation of the Act. Customs Act - Proclamations prohibiting the Exportation (except under certain conditions) of - Frozen Beef and Frozen Veal to the United Kingdom (dated 21st June,. 1933). Oranges to New Zealand (dated 21st August 1933). Silver Coins minted in the Commonwealth to New. Zealand (dated 13th September, 1933). Dairy Produce Export Control Act - Eighth Annual Report of the Dairy Produce Control Board, for year ended 30th June, 1933, together with a statement by the Minister regarding the operation of the Act., Northern Territory Acceptance Act and Northern Territory (Administration) Act- Ordinances of 1933 - No. 12 - Justices. No. 13 - Slaughtering. Licensed Surveyors Ordinance -Regula- tions. Railways Act - By-laws Nos.63,64,65. 3411 Motion In Committee of Supply: Consideration resumed from the 4th October (vide page 3223), on motion by Mr. Lyons - That the first item in the Estimates, under Division 1 - The Senate - namely, "Salaries and allowances, £6,840," be agreed to. 3411 F4Q Yarra 0 0 SCULLIN, James Henry Mr SCULLIN .- The budget speech contains the Government's financial and economic policy, and an impartial review of the present budget in broad outline will, I think, reveal fundamental defects which have apparently escaped the notice of many persons who have read it casually. It is seen that the Commonwealth has again lapsed into deficits, that adequate provision is not made in the present proposals for the relief of unemployment, and that public moneys are to be distributed without regard to the demands of justice and equity. Although described as a " restoration budget", it contains these fundamental defects, and the seriousness of the position can be appreciated only by a close survey of recent events in Australia. In 1926-27, the Commonwealth had a surplus of £2,800,000, but for the two succeeding years, 1927-28 and 1928-29, the deficits amounted to £7,800,000, so that in June, 1929, the accumulated deficit was approximately £5,000,000. In addition, we had a huge adverse trade balance, which threatened the very solvency of the nation. At that time the world crisis hit Australia, and this country was ill prepared to meet the blow.With a continuance of over-borrowing abroad, and importations for which we could notafford to pay, our position was weak when the blow fell. The deficit in June, 1929, of £5,000,000 had accumulated after a series of prosperous years. A fall then occurred in the national income, The drop in world prices reduced the purchasing power of the people and increased unemployment. Those factors, in addition to the/ stern measures that had to be taken to stop the flood of imports, produced a disastrous effect upon government budgets. By June, 1931, we had an accumulated deficit amounting to £17,000,000. I draw attention to thi3 fact, because it emphasizes the seriousness of again lapsing into deficits when they can be avoided. And I submit that they can be avoided. We had four successive deficits from 1927-28 to 1930-31. In 1931-32 we opened the year with a prospective deficit of £20,000^000, and the various State governments had deficits of a similar amount facing them. The position was appalling. Our credit had been stopped by the banks. In fact, the credit of seven governments had been stopped. The outlook of Australia was perilous in the extreme. The revenue that we expected in the early part of 1931-32 would have paid only 12s. in the £1 of our estimated expenditure. It was then that drastic steps - harsh measures, if you like - had to be taken to meet the position. When I recall the sacrifices that were made, and my own heart-burnings as I faced the situation as Prime Minister, I have nothing but feelings of intense indignation that a government should now come along and budget for deficits. It is deplorable that 'this should happen after all the sacrifices that were made to balance the budget. As the result of the adjustments made in 1931-32, and the suspension of overseas war debt payments, which represented, in Australian currency, about £6,000,000 per annum, we ended last year with a surplus df £1,314,000. That was the net result of the adjustments made by the previous Government in 1931-32. This year the position is still better, because the Government of the day has had the full benefit of the economies effected in 1931-32, thc increased taxation that was then imposed, and the continued suspension of war debt payments. It is true that it has had '£2,000,000 less in taxation, but that amount was largely offset by the taking of £1,600,000, based on a full year's calculation, from wage-earners and pensioners. The result was that last year was finished with a surplus of £3,546,000. The excess for the two years amounted to £4,860,000. The step3 that were taken to meet a desperate situation in 1931-32 are so well known that it is not necessary to recapitulate them. It was my belief then, as Prime Minister, and, I think, the belief of every honorable member of Parliament, that there was a unanimous determination that the sacrifices at that time to balance trade and to balance the budget would not be made in vain, and that every effort would be exerted to continue to balance our budget. In accordance and in pursuance of my declaration as Prime Minister, I felt sure that we should have a progressive balancing of budgets. I also had the impression that, as there was not a dissentient voice in Parliament, there was a strong determination, that, not only would balancing of budgets be maintained, but that our public servants and pensioners, and those who had received special cuts in 1931 to adjust the position, and who, in addition to making these -substantial sacrifices, were also called upon to share in whatever extra taxation was imposed, would be the first to be given relief when the finances permitted. In fact, a solemn declaration to that effect was made in Parliament on behalf of both the Government and the Opposition of the day. The; budget placed before us last week departs in a most flagrant manner from the undertakings given in 1931-32. The present Prime Minister's speeches throughout the country rang with the fervour of his determination that thc budgets would be kept balanced. He said that only by this means could confidence and credit be restored and maintained in Australia. Yet the right honorable gentleman's speech last week announced two successive deficits for this year and next year. We are asked to approve of the budgeting for a deficit, estimated at £1,176,000 for this year, and at £3,672,000 for the following year, making a deficit in the current accounts of two years of £4,848,000. We were cheerfully told that this would absorb the whole of -the excess for the last two years, with an utter disregard of the fact that there is an accumulated deficit of £17,000,000. A year ago the Government sought to justify the cruel and harsh treatment of pensioners and public servants by pointing to this accumulated deficit of £17,000,000. To-day, when it is a matter of handing back £7,500,000 to certain taxpayers, that accumulated deficit is entirely ignored. If the budget figures are to be accepted we shall face 1935-36 on a working basis which shows a shortage of revenue over expenditure of £3,670,000. Those are the budget figures, not mine. To put it in other words, at the end of June, 1935, the position of Australia's finances, on the budget figures, will he unbalanced to the extent of £3,670,000. 3413 K0A 0 0 GABB, Joel Mr Gabb - And that is providing we get good seasons! 3413 F4Q 0 0 SCULLIN, James Henry Mr SCULLIN - If the budget estimates are sound, we shall begin 1935-36 in an unbalanced position. In addition to that, we shall have an empty Treasury. Every penny of the accumulated excess of the last two years will have been absorbed through the reduction of taxation. Parliament will, therefore, at that time, be called upon to face the unbalanced position which confronted it two years ago. Millions of pounds are to be returned to wealthy taxpayers, and all the cash in hand is to be absorbed. There is just sufficient cash in hand now, on the budget statement of the position, to tide the Government over the next election. The philosophy of the Government, I take it, is, "The carnival is over; after us, the deluge." It says, in effect, that some one else can clean up the financial mess. Praise has been given to this budget by various financial and commercial magnates and their mouthpieces, the tory newspapers; but, in their own businesses, these gentlemen would regard it a3 sheer lunacy to budget for a deficit after distributing all their funds in hand. I wonder if those who cheer this Government's financing would adopt similar methods in their own private businesses? Their approval of the budget springs from their selfish satisfaction at obtaining remissions of taxation rather than from any concern for the national welfare. The Government has yielded to the outside influence of wealthy interests. We -debated the budget last year at a time when the figures showed a surplus for the previous year's operations, and we pointed out that the Treasurer had made a serious under-estimation of revenue, particularly of customs revenue. We further expressed the view that the under-estimation appeared to be deliberate in order to justify the cruel cuts in public servants' salaries, and in pensions. I made that assertion. It was indignantly denied, and I was forced to withdraw it, which I did. But the facts are that, although the Treasurer budgeted for a deficit last year, tha revenue exceeded the estimate by £7,000,000, customs and excise alone exceeding the estimate by £5,392,000. The present Prime Minister and Treasurer (Mr. Lyons), has delivered two budget speeches in this House, in each of which he has budgeted for a deficit, although he is the protagonist of balanced budgets. I notice that last year the income tax assessments were sent out very late, which suggests that the Government has something snuggled away for this year. We have, however, only an outsiders' view of the position. In any analysis we make we are bound to accept, for the time being, the figures presented to us in the budget. Of course it would be reprehensible for the Government to place incorrect figures in the budget. 3413 F4O 0 0 LYONS, Joseph Aloysius Mr Lyons - Hear, hear ! 3413 F4Q 0 0 SCULLIN, James Henry Mr SCULLIN - The right honorable gentleman endorses that. Will he endorse my emphasis of the injustice done to-day to those public servants, pensioners, and others who are not receiving full restoration of the reductions made two years ago? I repeat that I accept, for the time being, the budget figures. They anticipate a deficit for this financial year, and it is useless to talk about the absorption of the surpluses of the past two years. The facts stand 'out stark and clear that for the present year and for the following year, at least, the revenue of the Commonwealth will not meet expenditure by £4,800,000. Turning to another aspect of the matter I ask those honorable members who were hero in 1931 if they have forgotten the pledges made from both sides of the House that reductions of wages and social services would be the first to be, restored. When I made that statement I thought that I was speaking for the Parliament and for the Australian people. Not one dissentient voice was raised. Every honorable member supported my declaration. I repeated it, not only when the Financial Emergency Bill was under consideration, but also on subsequent occasions. The present Prime Minister, who then led the Opposition, will find that in his speech in May, 1931, he said that honorable members on his side would stand behind the proposal for the restoration of these reductions at the earliest possible moment. 3414 F4O 0 0 LYONS, Joseph Aloysius Mr Lyons - We are doing it. 3414 F4Q 0 0 SCULLIN, James Henry Mr SCULLIN - I submit that in view of the figures that have been placed before us, restoration is now possible. There was no qualification that the Government would hand back £25,000,000, as some suggest, to the taxpayers before that pledge would be honoured. It is thc duty of this Parliament to honour the pledge made by the members of every party in this Parliament, the pledge made to those men and women who were called upon to make a special sacrifice during a critical period of Australia's history. I have already said that restoration is now possible. I would not urge it if it were not so. Twelve months ago, I did not urge a total restoration. I said that the then financial position of the Commonwealth would permit a partial restoration. But instead of a partial restoration public servants and pensioners received a further reduction. To say that a total restoration was possible last year would have been an irresponsible statement to make. But it is possible now. When the reductions were first made, I said that refunds would be made as soon as possible. I say that that is now possible, and I. take my facts from the budget speech. In that speech, the Treasurer said that on the present rate of taxation and expenditure the surplus for this financial year would be £5,476.000. That is on thc present rate of taxation and expenditure. Full restoration of wages and social services for the remainder of this financial year would be less than £3,500,000. Had there been no cut last year, restoration could have been made for a full year at a cost of £3,500,000. On the balance of this year, it would have cost £2,250,000 had there been no cut last year. This budget proves how harsh and unneces sary were the cuts of a year ago. Under the 1931 rehabilitation plan, commonly referred to as the Premiers plan, economies were effected, and taxation wa3 increased. After weeks of consultation with State Governments representing different political views, we strove, as far as was humanly possible, to spread the burden and to make the sacrifice equal. Although I do not think it practicable to make sacrifices equal, an effort was made to place them on a basis of equity. There were two fundamental aspects of that plan. I stress that point because the present Government adopted " equality of sacrifice " as a slogan at the last general election, whereas I went to that election justifying the action already taken, an action which I can Sti justify. I am still standing to the fundamental aspects of the Premiers plan. One of them was balanced budgets, and another was a restoration of the reductions at the earliest possible moment. I said that those who had to submit to a reduction of salary or wages, or who had to suffer as the result of reduced expenditure on social services, should be the first to receive restoration. A conversion loan was also a part of the plan under which the rate of interest was re*duced. I declared that the rates of interest, then being charged could be reduced and still give a reasonable return to those holding gilt-edged securities. Recent events have more than justified that opinion. That declaration of restoration of wages and social services, which was never challenged, has now been departed from in a most flagrant manner. Those casual readers who say that this is a restoration budget, have not examined it. Last year the Government reduced taxation by £2,100,000. It cut wages and social services by £1.600,000 a year. I am putting my figures on a yearly basis, for the sake of comparison. This year taxation is to be further reduced by £7,490,000, and the expenditure on wages and social services is to be increased by £1,513,000; but there are still 900 adult public servants doing junior work and in receipt of juniors' pay. The homes of pensioners are still to be charged with the pensions they receive, thus converting the pension in such cases into a loan. Under this budget, public servants and war pensioners will receive some restoration of the amounts taken from them, and superannuated public servants will have their pensions restored in full. For these things I am pleased ; but I am not pleased that those in receipt of invalid and old age pensions and maternity allowances" will be worse off under this budget than, under the 1931 plan. The net result of last year's budget and that now under consideration will be that, whereas taxpayers will benefit to the extent of £9,500,000 a year, through remissions of taxation, wage-earners and those benefiting from social services will be worse off in' the aggregate by £160,000 a year than tinder the 1931 plan. In the face of these facts, what becomes of the vainglorious boast of the Government that it is making an allround restoration The Government is handing out millions to the taxpayers of Australia instead of restoring to others what was taken from them. In 1931 the desire was to spread the sacrifice as equitably as possible; to-day we have reached a position of the gravest inequality. In my opinion, the budget is grossly unjust; it is a glaring example of class discrimination. "We are now .told that, subject to certain restrictions, pensions are to rise or fall according to .the variation of .the cost of living figures. The Government is really making the cut in pensions constant for at least many years. My Government .refused to .apply the 20 per cant, cut to pensions.; we reduced the pension by .2s. 6d. a week, our desire being to ensure at least as much purchasing power .as when the pension was £1 a week. At no time did my Government say that the reduced pension was to be the basis on which pensions would be calculated in the future on the cost of .living figures. No one in Australia has ever examined the relation between pensions and the cost of Hying, as has been done in the case of the basic wage. Even in those critical days, my Government strove to ensure, first, that the reduction of the pension should be less than the reduction of the cost of living, and, secondly, that the worker on the basic wage in the Public Service should receive no cut in real wages. My Government preserved those principles; this Government has violated them. 3415 KIU 0 0 HUTCHIN, Arthur Mr Hutchin - Does not this budget preserve them both? 3415 F4Q 0 0 SCULLIN, James Henry Mr SCULLIN - No. There are still 900 adult public servants who, under an award of the Arbitrator, are entitled to the adult basic wage, but are in receipt of much less than that basic wage. I have never made a definite statement in this House with any intention to deceive. I now say definitely that pensions were not reduced in 1931 because the cost of living had fallen. They were reduced only because money was not available to pay pensions in full and meet other commitments. If in future pensions are to have relation to the rise and fall in the cost of living, the only honest course is to have the whole position examined, so that the relation between the two may be properly defined. The Government's action is merely an excuse for breaking a promise which this Parliament made when it called upon these people to make sacrifices. I turn now to the outstanding problem still awaiting solution - that of unemployment. Nearly two years have passed since the electors of Australia were induced to support the party now on the treasury bench because of its definite declaration that, if it- were returned .to power, real money would flow into industry, a.nd unemployed workers, would quickly be absorbed. The unemployed were told that a change of government would result in such a restoration, of confidence that private enterprise would practically be waiting for them to offer themselves for employment. 3415 KNP 0 0 MAXWELL, George Mr Maxwell - That is an exaggeration. 3415 F4Q 0 0 SCULLIN, James Henry Mr SCULLIN - Has- the honorable member for -Fawkner (Mr. Maxwell) forgotten the placards which were exhibited in large numbers in and around Melbourne, and the literature which was circulated? If the dictionary contains a stronger word than " exaggeration ", that .word could truthfully be applied to the propaganda which .the party opposite indulged in during the last election campaign. The optimistic note which the Prime Minister struck in his budget speech will, no doubt, find a ready response among the privileged sections of the community; but it will find no echo in the ranks of the destitute workless of Australia. The Stock Exchange boom may gladden a few, but there is no sign of a boom in the labour market of this country. The Prime Minister quoted statistics showing that, whereas at the end of the second quarter of 1932, returns submitted by trade unions revealed that 30 per cent. of the unionists of Australia were unemployed, at the end of the second quarter of this year the percentage was 25 per cent. The right honorable gentleman was careful not to go back beyond 1932, forhe knew that, at the end of the second quarter of that year - six months after his Government came into power - unemployment in Australia was at its peak. He did not tell us that at the end of the second quarter of 1931, when the outlook for Australia was the blackest I have ever known it to be, 27.6 per cent. of the unionists of Australia were out of employment. A reduction from 27.6 per cent. to 25 per cent. does not justify his optimism, particularly when we reflect that, however accurately the returns submitted by the unions may be compiled, they do not take into account the large numbers of boys and girls who leave school each year, and (because they have never worked, have never been registered as unionists, and, therefore, cannot be recorded as unemployed unionists. If that ever-growing number of unemployed boys and girls is added to the workless army, the position to-day is seen to be worse than the statistics indicate. The Prime Minister claimed in the budget speech - and he repeated the claim to-day - that the reduced taxation proposed in this budget will increase employment, because it will release capital, which private enterprise will use to provide employment, and that by no other means can the problem of unemployment be solved. In the present circumstances there is no substance whatever in that claim, for capital in plant, machinery and money is lying idle to a greater extent to-day than has been the case for decades. Taxation remission to provide for an increase of capital is not the remedy for unemployment; there is only one remedy. 3416 KIU UAP 0 0 HUTCHIN, Arthur Mr HUTCHIN - To cut the costs. 3416 F4Q ALP; FLP from 1931; ALP from 1936 0 0 SCULLIN, James Henry Mr SCULLIN - No. Progressively with the cutting of costs we have had increasing unemployment. All over the world costs have been coming down and clown, and unemployment has been going up and up, proving that those who agree with the honorable member have learned nothing from this crisis. There is only one way to increase employment, and that is by increasing purchasing power. Taxation remission will not do it; indeed, the reduction in customs revenue will, in many instances, bring about a reduction of employment, as it will retard industrial development. Private enterprise will not spend more moneyuntil business expands, and business cannot expand except through increased consumption. My view is that a vigorous public works policy on practical lines to create a wage fund will stimulate trade expansion and employment, and then private enterprise may come in and absorb a large number of those who are unemployed ; but until that stimulus is given and private enterprise can see a market for its products it will not employ men for greater production. 3416 KNP 0 0 MAXWELL, George Mr Maxwell - Where is the right honorable gentleman going to get the money to pay wages to create a wage fund ? 3416 F4Q 0 0 SCULLIN, James Henry Mr SCULLIN - If the Government has money to hand out to banks and other financial institutions - and, incidentally, goes on its knees and asks those bodies to reduce rates of interest - it can provide money for these works direct to the people. The Government should reinforce the capacity of the people to buy. To-day we have no problems of production, and nobody can fairly claim that production has been reduced because of high costs. Four years ago, when production was at its peak in Australia, the costs of pro- duction were infinitely higher than they are to-day. But now that we have got costs down, we have also got the purchasing power of the people down, and production falls with a diminution of that purchasing power. If tax remission were required to make good capital shortage, and there were outlets for capital investment and markets for their products, the methods of the Government would have much to commend them. But that is not the position to-day. The circular that was issued by the Bank of New South Wales a few months ago declared that in Australia there is no dearth of money awaiting investment, and the returns that have since been published by other financial institutions support that statement. No greater proof of it can be found than the price of Commonwealth stocks here and elsewhere. 3417 KIU 0 0 HUTCHIN, Arthur Mr Hutchin - That is because of the confidence of the people in the Government. 3417 F4Q 0 0 SCULLIN, James Henry Mr SCULLIN - I am as glad as any one else to know that our stocks are at a premium, and our interest is down. But let us not deceive ourselves, because that is not sufficient proof of prosperity or even of returning prosperity. On the contrary, it proves that there is not an outlet for the investment of the moneys which have been accumulated in Australia, excepting through the medium of giltedged securities. Our need is to provide an outlet for that money, and not to give these institutions more money. In 1929, 1930, and 1931, the banks contracted the credit of this country; they called in overdrafts, and deliberately raised the rate of interest. They said that they were doing it because they wanted to discourage borrowing and stop extravagance. That policy of deflation did more to accentuate the position than anything else could have done. Having partially driven industry out of existence, and swelled the army of unemployed, the banks and others now find that their excess profits are piling up, and they do not know what to do with them; consequently,the banks are to-day refusing money on deposit which would bear interest. That is the answer to the boast of the Prime Minister that a remission of taxation will increase employment. The honorable member for Denison (Mr. Hutchin) interjected that our stocks are high because people have confidence in this Government. Behind that is the sinister suggestion that political influences have been brought to bear; that the people had not confidence in the previous Government. I ask the honorable member to turn to any other country that he chooses and examine its position. He will find that, whether there have or have not been political changes, the price of interest has come down. The reason is that no outlet can be found for the investment of money; therefore, the price of government stocks have soared. These persons in London who recently bought our stocks were urged to do so on the plea that there is a sane government in office in Australia. Let us remember that those stocks mature in from ten to fifteen years' time. 3417 KV7 0 0 STEWART, Frederick Mr Stewart - That is a prophecy. 3417 F4Q 0 0 SCULLIN, James Henry Mr SCULLIN - They are not fools enough to imagine that this Government will be in office in ten years' time. The effect of this stifling of enterprise has brought about the result to which I have referred, and money lies idle, awaiting investment. Only when the purchasing power of the people is increased will that money find investment, and the army of unemployedbe reduced. It will he a gradual process, but the snowball will grow. I ask honorable members who pin so much faith to financiers and econmists to read the pronouncements of those persons. Let those who pin their faith to the Bank of New South Wales read its circular which was issued in May last. Let them also read the inspired address that was made by President Roosevelt, who said, during the passage of the National Industrial Recovery Act, " The aim of the whole effort is to restore our rich domestic market by raising its consuming power." I agree that cheap money is a good thing; but cheap money must be found employment, and the Government must set an example, because it is the custodian of the people's very life on occasions like this. Tax remissions may have a partial effect on the position, but it is a negligible one. The only extent to which tax remissions can improve purchasing power is to the degree that they will increase the purchasing power of those who are not receiving sufficient to buy their needs. If they increase the income of those who have more than they require, that merely adds to the reserves which those persons have in the banks lying idle. Let me examine the tax remissions and take, for example, individual income taxation. Very substantial remissions are promised. According to the report of the Commissioner of Taxation, persons whose income is £6 a week or less, pay approximately one-fortieth of the total taxation received. On this basis we may assume that they will receive one-fortieth of the remission, or 2£ per cent., and that the balance of the benefit accruing from the Government's proposals regarding taxation will go to those whose income is over £6 a week. Those whose income is £8 a week or less will, according to the official figures, receive one-sixteentH of the remission. Turning now to the Government's proposed remissions of land taxation, it should be remembered that no person pays federal land tax unless the unimproved value of his land exceeds £5,000. Therefore, it is obvious that the promised remissions of land tax will pot benefit the owners of small Areas of land. Certainly, none of our struggling wheat-growers will benefit from this portion of the Government's financial programme. It is suggested that these remissions of taxation will be passed on to the general public; but I notice that, although only a week has elapsed since the budget speech was delivered, the Prime Minister hiimself is not now quite so certain that t\e people generally will benefit from these remissions, and he is giving hints and uttering veiled threats that if they are not passed on, something will happen. Precisely what action he proposes to take we do not know. When he delivered the budget he expressed the belief that the price of motor tires would be reduced following the lowering of the duty on crude rubber from 4d. to 2d. a lb., which will involve the Government in a loss of revenue of £225,000. The day following the budget speech, Mr. Watt, the chairman ' of the Dunlop-Perdriau Rubber Company, remarked that, while the reduction of duty was gratefully received, he could not promise any reduction in the price of tires. 3418 KUW 0 0 STACEY, Fred Mr Stacey - Has the right honorable gentleman noticed the reduction of interest now charged by the Australian Mutual Provident Society? 3418 F4Q 0 0 SCULLIN, James Henry Mr SCULLIN - Yes ; that is the one bright spot in the response of the commercial community to the Government's proposals. There is a significant silence on the part of private banking institu tions, with the exception of the general manager of the Queensland National Bank, who said a few days ago that the proposed reduction of federal taxation would enable the Queensland National Bank to reduce its interest rates by one-twelfth of 1 per cent. I have also read statements by prominent tea merchants to the effect that, despite the reduction of primage duty on tea, there is to be no reduction in the price of that household commodity. I have received a number of letters from, and have read statements by, a number of traders stating that the reduction of the sale's tax by 1 per cent., being equivalent to 1-Jd. in purchases totalling 10s., is too small to permit of any reduction in the retail prices of commodities. It should be remembered that these tax reductions, which are intended to make possible lower, interest charges, will apply to the profits of last year's trading operations; that profits earned by the banks have been based on last year's higher interest charges, and that these institutions have made the necessary provision for the payment of income taxation. It would not be wide of the truth to say that these reductions are really a gift to the banks. This reduction of interest is long overdue. I freely admit that, in respect of government accounts, the banks met the situation at once, hut we should remember that the treasury-bills taken up by the banks were a very fine investment. As regards overdraft rates, the banks have not fulfilled the spirit of the rehabilitation plan of 1931. They did not reduce interest rates as they should have done. Any reduction now being made is, therefore, long overdue and should have been made without any reduction of taxation whatever. In 1931, the banks offered as an excuse, and there was some reason in their claim, that they had high interest-bearing fixed deposits for two years, thus making it impossible for them to meet the demand for lower rates on overdrafts. But it is two years since they put forward that excuse, and those fixed deposits at the higher rates of interest are not now a stumbling block to a reduction of overdraft rates. In any case, all of the deposits did not have two years to run. The banks appear to be the overlords of the Government, the Parliament and the people. The Commonwealth Bank was cited by the Prime Minister in support of his contention that interest was being reduced. It is true that the Commonwealth Bank has set a fine example in progressive reductions of its charges. But it was the only bank which the right honorable gentleman could cite. One honorable member said in the House some time ago that the position of the Commonwealth Bank was somewhat different from that of private trading banks, in that it does not pay taxation. That is not sound, because the Commonwealth Bank hands over to the Commonwealth 10s. out of every fi of profit earned. If that is not, in effect, high taxation, I do not know what is. "We were told by the Prime Minister that emergency taxation to the amount of £25,000,000 had been imposed upon the people. The right honorable gentleman's statement gave an entirely false representation of the true position, though I do not suggest that it was done intentionally. Any one reading the budget speech would be led to believe that the Government was collecting an additional £25,000,000 in the way of taxation since the depression set in, when, as a matter of fact, the taxation levied in 1928-29, totalling £56,000,000, was the same as was received last year, so it is quite wrong to suggest that additional taxation has been imposed on the people under emergency legislation. "What is true is that adjustments have been made in certain forms of taxation to make up for losses sustained in other directions. Loss of revenue through, the customs, for instance, had to be made good by the imposition of sales tax, and so on. But the fact to be remembered is that we are not collecting more taxation from the people than formerly. We are told in the budget speech that there are to be tax reductions to primary producers. Direct assistance to those needing help would be much better. They will not get one-tenth of the benefits from assistance given in an indirect way that they would get if it were given directly. The position of the wheat-growers is so precarious that unless there is ari increase in the world price for wheat, direct .assist ance must be given to tide them over the coming season. The proposed restrictions of exports of wheat will mean, if we have a few good showers in our important wheat-growing States, that there will be a substantial surplus of wheat in Australia this season. I submit that it is the obvious duty of any government which agrees to restrict the exportation of that surplus, to finance our wheat-growers until their product can be marketed. Recently, the Premier of Victoria declared that the Commonwealth Government had failed to help the States to shoulder the burden of unemployment. I agree with him. This is the outstanding failure of the budget. Income tax is not paid unless the people have incomes. But what of those who have no income? Two-thirds of the land tax is collected from city properties. All that is required to give relief to those of our struggling primary producers who are called upon to pay land tax is a more liberal administration of the hardship provisions of the Land Tax Act. The existing land tax should continue to be levied on city properties. It is wrong to remit land and income tax to the extent of millions of pounds to the fortunate, instead of giving direct relief to the destitute. For these reasons I move as an amendment - That the item be reduced by £1. If this amendment is carried it will be regarded as an instruction to the Government to reconstruct the budget in order - To provide against a deficit in the current revenue and expenditure account, thus ensuring continuance of a balanced budget ; To formulate a practical and extensive loan works programme in cooperation with State Governments for the stimulation of employment; To restore old-age and invalid pensions to £1 a week, and ' remove the objectionable amendments made last year relating to the homes and relatives of pensioners ; To make full restoration of reductions in war pensions and maternity allowances ; To restore the percentage reductions in Public Service salaries and wages and superannuation contributions; and To provide for assistance to wheatgrowers in the event of a continuance of the present low price. When these obligations had been met, taxation could be reduced. As the accumulated deficit of £17,000,000 was liquidated by a temporary advance from loan account, .the surplus of the last two years, amounting to £4,S00,000, should be transferred to that account and utilized to finance portion of the. suggested loan works for the relief of unemployment. Those works could bc financed through the Commonwealth Bank up to a fixed limit. No one is able to say exactly what that limit is, but it should be sufficient to stimulate employment substantially during the next year or two. If the Government is averse to that method, let it go on the open market and, with some of the money that it proposes to remit to the taxpayers, give immediate relief to the unemployed. The financial position of Australia fully justifies my submission of these proposals to Parliament for its endorsement. The budget figures clearly show that these restorations can be made, and the budget balanced. I ask Parliament to redeem the promise given by both the Government and the Opposition to those who made sacrifices when the nation was in peril. The restorations would immediately increase the purchasing power of fully 300,000 people, and together with an adequate works programme, would give a decided impetus to employment and trade. My proposals, which I submit on behalf of the Labour party, are practical and just. Sound finance rests upon the maintenance of a balanced budget. Justice demands that restoration be made to th, men and women who were called upon for special sacrifices in a national emergency. Not only national stability, but also in my opinion the call of humanity, demand more attention than is given today to the sufferings of the unemployed of Australia. 3420 C7E Cowper 0 0 PAGE, Earle Dr EARLE PAGE .- It is not my intention to devote the timo at my disposal to a criticism of the remarkable speech that has just been made by the Leader of the Opposition (Mr. Scullin), who for the first time in my political life has attempted to prove that the reduction of taxation is bad and must lead to unemployment. 3420 F4Q 0 0 SCULLIN, James Henry Mr Scullin - I did not. 3420 C7E 0 0 PAGE, Earle Dr EARLE PAGE - At all events, the right honorable gentleman's argument was that it is bad. I wish to elaborate a positive policy which, in my opinion, will at the earliest possible moment restore to employment the workloss people of Australia. Incidentally, I shall answer some of the arguments that have been advanced by the Leader of thc Opposition. At the outset; the only comment that I wish to make is that the right honorable gentleman appeared to condemn himself out of his own mouth by suggesting in his amendment that he is opposed to the current. year's revenue and expenditure account ending with a deficit, and then immediately proposing five different ways in which the expenditure of the Commonwealth might he increased. One of his suggestions is that a loan might be raised. There is really no intrinsic difference between loan expenditure and revenue expenditure, except that a loan means taxation in the future while revenue expenditure connotes immediate taxation. In essence, therefore, the adoption of his proposal would necessarily result in additional taxation. His contention is that the best means of getting people to work at the present time is, not by private employment, but by government employment in.excelsis. From what we have experienced during the last four years, every one in Australia must realize that government relief employment means dead-end, spasmodic employment, in many cases employment at work to which the individual concerned is totally unaccustomed. I have known men engaged in spasmodic sewerage work during the last four years speak of "shovelling cement into their souls " because they were doing what had no permanence, and was totally different from anything they had learned to undertake. I suggest that the best way to get more people back to work is to have less taxation, to leave more money in the pockets of the people; whether they be small wage or salary earners, or big people, makes not the slightest difference, the effect is to increase the purchasing power of the community, revive trade, and raise employment to a higher level. The Leader of the Opposition argued that certain remissions of customs taxation would not be passed on to the people of Australia, and instanced the case of rubber. If that be so, the Government has the obvious remedy of so amending the tariff that the resultant competition would reduce prices to a reasonable level. It appears to me that the position of Australia and of the world at the present time may be likened to that of a sick man in an unhealthy house. Double action is necessary, general action to clean up the insanitary condition of the house, and special individual action to restore the health of the patient. All are in agreement as to the disease from which the world is suffering. The World Economic Conference, however, has refused within the last few months to take steps to remedy the position. The Prime Minister (Mr. Lyons) said in- his budget speech that complete failure had attended the deliberations of that conference. Having played its part individually at that gathering, all that Australia may now do is devote itself to the task of restoring its own affairs to a healthy state. If it can make more healthy a substantial part of the house - that is to say, the British Empire, which is a substantial part of the world - it will have done something worth ' while. I believe that if the right attitude be adopted a lead will he given to the rest of the world in relation to a balancing of the budgets of individuals, as has already been done in the case of governments: Because I believe that the present budget, so far as it goes, has the right outlook, and is faced in that direction, I am prepared to give it ray support. The various proposals for reductions I regard us a complete vindication, and an endorsement of the policy that the Country party has been expounding ever since the depression burst upon us some four years ago. My chief criticism of it is that it does not go far enough. Although the rates in the tariff schedule are to be reduced in certain cases, , the incidence of exchange and primage limits the reduction to only 12-i- per cent., and thus the bulk of the Hems are still protected to a greater extent than was the case under the Scullin tariff. The recommendation of tin? Tariff Board with respect to exchange is not being given effect. That position must be rectified. I held the belief that supporters of the Government were in favour of rectifying it at the earliest possible moment, I have heard that opinion expressed repeatedly by Government members, including the Postmaster-General (Mr. Parkhill) both before and since he became a Minister. The money which the Prime Minister says he is keeping as a nest egg against a possible deficiency next year, and which the right honorable the Leader of the Opposition maintains should 'be used, instead of loan money to defray the cost of immediate works, I contend should be devoted to further remissions of taxation. The means by which the people would derive the greatest measure of profit, and the, largest number be employed at the earliest possible moment, are the complete removal of primage in the case of British goods, as the Tariff Board has recommended, and .the total abolition of the land tax, and the super tax on property - which, I believe, have more to do with the continuance of unemployment than any other two taxes that arc levied at the present time. Every person who gives thought to the matter must recognize that the impulse to more extensive employment and the stimulation of trade would be much greater if the whole of the relief were given immediately, instead of a portion being given this year and the balance next year. That would have a. very marked effect in Australia, and might be a. prime cause of the setting in motion of world machinery for trade recovery. The members of the different governments throughout the world say that the position may be righted only by removing trade restrictions. No government has had the courage to take that action. The movement must start somewhere, and I suggest that it should start in Australia. The present Commonwealth Government has had the courage to go a short distance along the road. I urge it to take every step that is open to it in that direction. Australia is dependent to a very much greater extent than any other country upon its export trade. The people of the United States of America arc attempting to put their house in order independently of the rest of the world, but I do not believe that they can succeed in doing so. They say, in effect, "Only 6 per cent, of our production is exported, consequently, we can ignore the influence of the rest of the world upon our national economy." The lungs in a man's body represent only 1 per cent, of his total weight, yet he would be in a poor state with only one-half per cent. So I say that the experiment of the United States of America will fail because of its neglect of world influences. Bearing in mind our greater dependence on the rest of the world for the disposal of our products, we should exhibit the utmost readiness to attract customers. It is suggested that we should impose embargoes and high duties against foreign countries who are good customers of ours. If we do not purchase some of their products, where will they obtain the money to pay for what they take from us? If their exportable surplus is taken by other countries, to that extent the goods of those countries, will be shifted out of their proper relationship, and ultimately our industries must be affected. "Passing on the buck " is not the way to face up to the position ; we have to deal with the facts as we find them. If we did that, our costs of production would be reduced to the minimum, the relative prices of industrial goods and primary products would be adjusted, the man on the land Would have his purchasing power restored to him, the factory wheels would again be set in motion, and the workless would regain employment. The urgent problem in Australia, as in every other country, is unemployment. How shall we get our people back to work? After four years of depression, we still have 26 per cent, of our workers out of employment, while in some trades the percentage is over 30 per cent. Before the depression it was said that the maximum unemployment ratio was 25 per cent. : beyond that there would be revolution. I say that the time has come for a revolution in regard to our taxation. We must bring about a condition of affairs in which private enterprise - which has always provided 90 per cent, of the employment - will 'be able to carry on profitably, and re-absorb the unemployed workers. The attitude of practically all countries throughout the world during the depres- sion has been defensive and negative. They have attacked supply and tried to limit it. They have adopted a defensive economic policy by limiting production, limiting export, imposing restrictions on trade and embargoes on imports. That system is absolutely wrong. Instead of seeking to restrict supply, we should aim at increasing the demand. There are millions of people throughout the world who have not enough bread to eat, yet it is proposed, by international agreement, to restrict the acreage under wheat. Thousands are wearing threadbare clothes, yet there 'is a surplus of the raw materials out of which textiles are made. We must make industrial goods cheaper, and thus increase the demand, especially by the man on the land, so that the workers will be re-employed. One way to do that is to reduce taxation on the enterprise of the people, and it should be done by co-operative action between the Commonwealth and the States. Three years ago, when the Premiers of the various States met the then Prime Minister in conference, there was brought into being what has come to be known as the Premiers, plan. They agreed to do some very unpopular things - to reduce benefits, to lower rents and interest rates, to cut salaries, and to increase taxation. In my opinion, it is a breach of contract, in spirit if not in letter, for the Commonwealth Government to take any important financial step to reverse that process without consulting the other governments. So far as the relief of unemployment is concerned, the responsibility falls ultimately upon the State authorities, and the solution of the unemployment problem lies in reduced taxation. In this regard, I think that the States have a legitimate grievance, in that they were not consulted by the Commonwealth when it was framing its financial arrangements for the year. Isolated action by any one government cannot possibly be so effective as co-operative action by all the governments. The position in regard to unemployment is practically stagnant, with 25 per cent, of our workers still unemployed. Their budgets are hopelessly unbalanced -everything is going out, and nothing coming in. Josiah Stamp, the noted economist and publicist, said recently that it was more important that individuals should be able to balance their budgets than that governments should do so. 3423 KHL 0 0 HOLLOWAY, Edward Mr Holloway - But the right honorable member does not agree with that? 3423 C7E 0 0 PAGE, Earle Dr EARLE PAGE - Our governments can still balance their budgets this year, and afford, taxation relief to the extent of £20,000,000. The Commonwealth Government says that it proposes to remit £'7,500,000 in taxation, and the Premier of New South Wales, Mr. Stevens, is reducing taxation by £6.250,000. It does not require a great deal more effort ito make the reductions total £20,000,000. Let us consider the unemployment relief taxation imposed by the States. At "the beginning, the taxation collected in this way amounted to £12,000,000; last year it was reduced to £9,000,000, due to the reduction of unemployment from 30 per cent, to 26 per cent. There are still 120,000 persons unemployed in New South Wales. If we could, by encouraging private enterprise, find employment for 60,000 of them, there would be an additional 60,000 paying into the fund, and 60,000 fewer drawing from it. Mr. Stevens said that he wa3 prepared to cut the tax in half, because he believed that such action would encourage private enterprise to re-employ the workers. By co-operative action between the States and the Commonwealth; this result could he achieved in every State. In my own affairs, taxation has prevented me from providing as much employment as I should have liked to give. Had it not been for the family endowment tax, I should have been able to employ another man, thus providing a livelihood for him and his family right throughout the period of the depression. 3423 JOM 0 0 BEASLEY, John Mr Beasley - But the right honorable gentleman would not have done.it. 3423 C7E 0 0 PAGE, Earle Dr EARLE PAGE - During the last twelve months I have stretched my credit to the limit, and have done everything possible to keep men employed, because I believe that now is the time when we should make an effort in this direction. Why is there so much unemployment to-day? We have the same land, the same labour power, and the same equip ment as we had before the depression There is plenty of money in the banks. Indeed, during the last four years, fixed deposits in the banks have increased by £21,000,000. Interest rates have been reduced - not so much as they might have been, perhaps, but they have been reduced - and yet private advances are £40,000,000 below what they were four years ago. They now represent only £259,000,000, as against £299,000,000 in 1929. The banks themselves are clamouring for government investments, so that they may pay interest to their depositors, and during the last four years they have lent to governments £60,000,000 more than normally. Private enterprise will not accept advances from the banks, because it cannot find opportunities for safe and profitable investment. Nothing would tend so quickly to make private enterprise profitable as a reduction of taxation, and I know nothing that will retard the growth of public confidence so much as the advocacy of fantastic schemes' such as the socialization of banking. Until taxation is reduced and trade barriers are removed, not only in Australia, but throughout the world, there is little hope of the depression lifting, or of unemployment being relieved. Let us consider in this connexion the position of the two great creditor countries - Great Britain and the United States of America. Last year Great Britain put only £29,000,000 into new capital issues of foreign securities- as against £107,000,000 four years ago, while the United States of America invested 66,000,000 dollars in this way as against 758,000,000 dollars four years ago. Here is a big reason for the contraction of world trade. The reason. for this decline lies in heavy taxation, and in the fact that international trade barriers prevent creditor countries from obtaining their interest in goods from the debtor countries. We must remove such international restrictions. For this reason I think that the Government is mistaken in not remitting more taxation, both direct and indirect, but especially indirect taxation. I may liken the position of Australia to a bullock wagon loaded with heavy logs, and bogged on a bush track. The driver in such circumstances does not try to extricate the wagon by flogging his team, or by piling still more logs on to the wagon. He throws the logs off, so that the team, with a lightened load, may drag the wagon free. We, too, must throw off the logs of taxation that are crushing us. The Government says that it, agrees with me in principle, and that it, is willing to follow this policy, but I urge it to 'do still more. It should not withhold action because, as the Bible has it - There is that withholdeth mort: than is meet, but it tendeth to poverty. The Prime Minister, in his budget speech, said that, since the 'beginning of the depression, extra taxation to the extent of £25,400,000 had been imposed by Commonwealth Governments, and we know that State Parliaments have increased taxation by £15,000,000. Therefore, the burden of taxation is £40,000,000 greater now than four years ago. The Leader of the Opposition said that this increase is not represented in money actually collected. That is true, because production has declined from £447,000,000 to £305,000,000, but it remains true that last year State and -Federal Governments collected no less than £90,000,000, as compared with £S6,000,000 four years ago. That represents a very much larger amount, measured in wheat or wool or butter, than was collected at the beginning of the depression. The taxpayer is concerned, not so much with the actual total sum of money taken' by governments in taxation, as with the .percentage of his income that he has to pay, and that percentage is much higher now than it was four years ago. Take, for example, the federal income tax. In 3928-29, the amount collected was over £9,000,000. Since then there has been imposed on the same set of taxpayers - because State and Federal taxpayers are the same - an unemployment relief tax which returned £9.000,000, sales tax which yielded £9,000,000, and a property tax which brought in over £5,000,000. Apart from that, the income tax rate was increased by approximately 50 per cent. The fact is that there 'are now in effect three Commonwealth income taxes, where there was one four years ago, and the rate of taxation - whether it is called by another name does not matter - has the same detrimental effect in lessening the amount available with which to buy goods from shops or to start men in employment. Four years ago the added cost of the customs taxation levied on goods imported into this country represented 20 per cent. Last year the figure was just on 40 per cent., and the year before 42 per cent. The rate of the customs taxation on the individual article has doubled, and, therefore, the value nf any article that is purchased is twice as dear as it was four years ago when there was more money in circulation. That is one of the main causes of unemployment. We have to remember too that taxation on goods is doubled before the goods reach the consumer. The sales tax is imposed at the second last place. Accountants inform me that thc tax of 6 per cent, represents something like 11 per cent, when the consumer buys the goods. The primage of 10 per cent, represents 20 per cent, when the goods are purchased, so that on top of this huge governmental taxation is an immense amount of consumer taxation. We should reduce the maximum amount of taxation this year, particularly as it will be supplemented in its beneficial effects by another huge amount of consumer taxation. The position at the present time is this: Last year the Government managed to obtain by way of taxation some £3,500,000 more than it expended, despite the fact that it spent £2,250,000 in assisting primary production. Had the wheat bounty not been paid last year, the Government would have had a surplus of £5,500,000. In my calculations 1 have omitted from possible taxation reductions £2,000,000, because I anticipate that the Government will have to find assistance for the wheat-growers, an amount equivalent to that expended last year for that purpose. There is, therefore, as compared with last year, £3,500,000 that can be remitted. The accumulated surplus of last year and the year "before amounts to £4,S60,000, so that there is at least ' £8,360,000 immediately available for taxation reduction. The Government says that it intends to use that money ultimately for the purpose of assisting industry, but that this year there will be a deficit of £1,100,000, and next year a deficit of £3,700,000, and that it intends to keep the accumulated surplus as a setoff against this deficit. The surest way to have a deficit next year is to keep taxation to its maximum this year, and the surest way to have no deficit is to get rid of the largest amount of taxation. This morning's daily press discloses the fact that income tax collected by the Commonwealth for the first three months of this year amounts to £3,300,000. It is tax collected on account of last year's assessments. Obviously there was a definite understanding that the tax would not be collected too readily at the end of last year so that there would be more money available this year. 3425 F4O 0 0 LYONS, Joseph Aloysius Mr Lyons - There was no such understanding. 3425 C7E 0 0 PAGE, Earle Dr EARLE PAGE - Whether there was an understanding or not, it is a remarkable happening. The Government this year has understated - I do not say deliberately - its revenue in the same way as it did when it brought down the budget last year, when it understated the revenue by nearly £8,000,000. During that year there was taxation remitted to the extent of just on £2,000,000. In addition the wheat-growers received £2,250,000, making a total of £4,250,000. There was a surplus of £3,548,000, which brings the amount to the amount I mentionednearly £8,000,000. The figures reflected in the budget, and the actual takings since its introduction, show that the revenue was understated in the budget estimate, and that we are likely to receive this year, even at the reduced rate of taxation, £4,000,000 more than is anticipated in the budget. That money, instead of being received by the Government, should he left in the pockets of the people. A reduction of the rate of taxation, as I have suggested, would not necessarily mean a lessening of receipts. We, as a nation, undoubtedly, will have more money to spend overseas because of the improvement in the wool position and in the butter position, although it is true that we shall have less money because of the wheat position. The attempt that, we are now making to lessen taxation should encourage a greater British investment in this country, bringing about a greater flow of British imports and an increased customs revenue. I am totally opposed to the view of the Leader of the Opposition and his supporters that imports damage employment in this country. Taking the figures for the last five, ten, or twenty years we find that in the years in which we were receiving greater imports there was less unemployment. In 1926-27 we bought £164,000,000 worth of imports and the men employed in our factories numbered 452,000. In 1931-32 our imports were worth £44,000,000, and the workers in our factories numbered only 330,000, a decline of 120,000. If we do something to encourage investment, especially in private industry in this country, we shall make certain this year of an increase not only of our customs revenue, but also of our income taxation, sales taxation and every other form of taxation. There should be a substantial decrease of taxation this year because there will be a saving of at least £2,000,000 in the interest bill of the Commonwealth and States, and exchange owing to the favorable overseas conversions which Mr. Bruce has been able to effect. I congratulate him upon his good work in that connexion. Altogether, he will convert loans amounting to £106,000,000, and already loans amounting to some £70,000,000 have been converted. My calculations show that, roughly, £2,000,000 will be saved in interest on conversions, including exchange. During the last four years, the Commonwealth Government has not had to find a sum of £5,500,000, which is owing by Australia to Great Britain on account of the war debt. The budget has been relieved to the extent of about £6,000,000 which has been taken by the Federal and State Governments from the bondholders of this country because of the operation of the Premiers plan and the general conversion at the lower rate, and as a result of deaths of returned soldiers and their parents the repatriation expenditure has decreased by £1,000,000. If we take these facts in conjunction with those disclosed by the budget, we see that a good case is made out for the maximum reduction of taxation this year. The bigger the remission of general taxation the less unemployment relief tax it will be necessary for the States to impose. The Government of New South Wales has made a bold effort in remitting substantial taxation despite a deficit, and if the other States would follow the example set :by Mr. Stevens we should soon 'begin to see effects that would discount altogether the criticism that has this afternoon been levelled by the Leader of the Opposition at the Government's proposals. The. Commonwealth and the States should get together in order to prepare an extension of the Premiers plan to return to the people benefits which were taken from them three years ago at a Premiers conference. The Commonwealth and the States should act in co-operation and in full consultation. Victoria has already decreased the unemployment relief tax by 5 per cent., but has not gone so far as one would like, because there has been no co-operation and consultation between the Commonwealth and the States. I have no doubt that if we gave greater remissions of taxation and freer entry to British products, Great Britain would reciprocate by making a greater demand for our products. The land tax, which during the last three years especially has not been paid out of income, is a direct levy on capital, and a first charge on property, and therefore should bc remitted. The super tax on property income also should he remitted, because it has been the main factor in keeping up private interest rates. If we did these things there would soon be a reflection in lower interest rates throughout Australia, particularly in regard to mortgages, and as a result greater employment would be given in the building trades and repair work in which section of industry there is to-day the biggestpercentage of unemployment. I urge the Government, to carry out the full recommendation of the Tariff Board in respect of primage and exchange. The Prime Minister has maintained that he stands solidly behind all recommendations of the Tariff Board, and during my absence from active political life I understand that he has suggested that at one time I said something to .the same effect. If he has said that, he has been misled, because I shall quote extracts to show that at no time did I bind myself in the way in which the Prime Minister has bound himself to the recommendations of the Tariff Board. What I said was that I would have a Tariff Board investigation to ascertain what industries were economic and commercially sound, and that I would protect only those which proved worthwhile. The Tariff Board in August last sent to the Government a recommendation that primage should not be collected in respect of protective duties. It pointed out that that imposition of primage in these cases did not give to the Commonwealth any revenue of significance, because the duties were already prohibitive, that it merely allowed Australian-made goods to he sold at a price higher than that which otherwise would be charged, that it was a tax upon the consumer with no corresponding benefit to the Government, and that, because of this position, certain industries were induced to start operations upon an uneconomic basis. That recommendation has not been given effect, yet the Government says that, in regard to increases or reductions of duties, it must stand by the recommendations of the Tariff Board. 3426 F4O 0 0 LYONS, Joseph Aloysius Mr Lyons - We did not suggest that that' would be done in individual cases. We said that as a matter of general principle we would be bound by the recommendations of the board. 3426 C7E 0 0 PAGE, Earle Dr EARLE PAGE - Although the Government sent back to the board on two or three occasions its recommendations on galvanized iron and sheet glass, just because they were not in accordance with government policy, it took no action in another instance in which a report of the board conflicted with that policy. Why was not the report of the board on primage and exchange sent back to the board if thc recommendations contained in it did not agree with the proposals of the Government? By giving effect to the recommendations of the board in respect of primage, there would be a considerable reduction of consumers' taxation without any corresponding reduction of government revenue. The Government should also implement the recommendations of the board in regard to exchange, particularly in respect of imports from countries whose currencies have a better value than ours. I refer to countries on the gold basis, the exchange with which affords greater protection to Australian industries than .that of Great Britain. All that the Tariff Board ' recom.mends is that the same absolute reduction of 12£ per cent., as applies to Great Britain, should apply in respect of other countries, although it represents a much smaller proportion of the exchange protection than in the case of Great Britain. The Government's excuse for not giving effect to this recommendation is that it wants to use this particular concession as a means of bargaining with other countries for trade treaties. I shall protest as loudly and as vehemently as I possibly can against the use of the -exchange rate as a bargain counter so far as the tariff is concerned. The tariff should he dealt with on its merits, and the primage gives plenty of bargaining room. It is necessary in the interests of the Australian public that this matter should be dealt with immediately. Any loss of revenue could be covered by the funds that the Government now has in hand. Owing to the vast number of our people who are unemployed, the removal of the accumulated deficit of £17,000,000 should be left until times improve. The most important task to be accomplished now is to get men back to work. If public funds now in hand are used for the purposes of tax remission that I have indicated, Australia will be vastly benefited, and industry will be able to meet the community's most urgent need. "Whatever else the Government does, it should give effect to these proposed remissions of taxation immediately. It is of no use to say that the sales tax will be removed in a month, or that- the recommendations of the Tariff Board regarding exchange will be given effect five or six weeks hence. Some momentum has been given to trade revival during the last few months, and if anything should happen to check this forward movement, Australia might lose ground which it might be impossible to recover. During the next few months, we may feel a repercussion of the partial failure of the economic experiment in the United States of America, and I should like to see as much money as possible made available for the stimulation of trade by Government action so that our position will be strong enough to withstand any ill effects. I shall not submit an amendment to the motion before the committee: I shall vote against the amendment 'proposed by the Leader of the Opposition (Mr. Scullin) ; but I shall lose no opportunity, as the various taxation bills come before us, to urge upon the Government the adoption of the measures which I have outlined. 3427 JOM West Sydney 0 0 BEASLEY, John Mr BEASLEY . - It is recognized that, under our present parliamentary system, the budget speech is a most important document, because its effect may be either good or evil upon every person iu the various constituencies throughout Australia. Under this so-called democracy, every member in this chamber should have a voice in discussing and determining the contents of the budget; but the circumstances that have led to the presentation of this budget are such that neither the members of my party nor the followers of the Government itself have had any voice in the formulation of the proposals. During the recent parliamentary recess, the only information available to honorable members as to what Ministers were doing was that supplied through the columns of the press." Members of my party have watched the actions of the Government during the four months the Parliament has been in recess, and the first indication we received regarding the preparation of the budget was a newspaper report to the effect that leading Ministers were about to leave Canberra for Melbourne to discuss the budget proposals with representatives of the private banks and the Commonwealth Bank Board. It is strange that these gentlemen did not even come to Canberra to discuss the matter with the Government. 3427 KYX 0 0 RILEY, Edward Charles Mr Riley - Ministers had to go to them. 3427 JOM 0 0 BEASLEY, John Mr BEASLEY - Yes. Prominent Ministers left Canberra, in an obliging way, for the purpose of receiving their instructions as to what the budget should contain. 3428 F4O 0 0 LYONS, Joseph Aloysius Mr Lyons - That is quite wrong. 3428 JOM 0 0 BEASLEY, John Mr BEASLEY - Of course, we expect the right honorable gentleman to say that. The next report we read stated that Ministers would assemble at Canberra to put the finishing touches on the budget. The Government then proceeded, within the lines that had been prescribed for it, to draw up its proposals. The next stage in the proceedings was for its supporters to be called together on the morning of the day on which the budget speech was to be delivered. Not one of them was aware of its contents, or had been afforded an opportunity to make a single alteration. Members of this committee who have had ministerial experience know that the text of measures which provide for such important changes as alterations of customs duties, &c., are usually telegraphed to all parts of Australia, so that the new schedule may take effect immediately after it has been tabled in this House. Although members of the Ministerial party may have been told what the budget contained, they were not even previously consulted about it, because the document had already been printed when the speech came under their notice. I suppose that they were willing to acquiesce in the Government's proposals. At any rate, if they had objections, they were not likely to announce them publicly. 3428 DQC 0 0 HUGHES, William Morris Mr Hughes - That practice is followed by all governments. 3428 JOM 0 0 BEASLEY, John Mr BEASLEY - I am coming to that point. The supporters of the Government may have criticized the proposals to a degree; but, if they dared to do so in this chamber, they would fall foul of the machine that controls the Government party. I refer to the press and the private banking institutions in this country, which arc in league with their fellow institutions throughout the world. A good deal is heard at the present time about the failure of democracy. It is said that democracy is not producing the results that were expected of it, but it must be admitted that under the system of government operating in Australia, the elected representatives of the people do not determine government policy, and therefore our proud boast of democratic government is but a sham. 3428 KZF 0 0 LANE, Albert Mr Lane - In New South Wales Mr. Lang dismissed all his Ministers when they disagreed with him. 3428 JOM 0 0 BEASLEY, John Mr BEASLEY - Those who formulate Labour policy are at least associated with the real producers, and, unlike the honorable member, do not batten on the section which they represent. It is fitting, at this juncture, at least to attempt to unmask the real governors of this country. In so far as the budget speech contains a programme of work to be carried out during the ensuing year, it deals with an important branch of governmental activities, and if the private banks are responsible for the formulation of the policy that has been adopted, then they are the actual governors of the. people. A report in the Sydney Morning Herald of the 15th August dealt with the ministerial conference with the trading banks held in Melbourne, and contained a statement by the Prime Minister (Mr. Lyons) that a "general discussion took place upon our financial position." The right honorable gentleman added that " some reference was made to the question of federal taxation." The Sydney Morning Herald went on to say - It was learned,howcver, that both Ministers and bankers regarded the conference as being successful. Some bankers expected that the Commonwealth Government would suggest that in return for taxation remission they should make an agreement whereby interest would be reduced by a stipulated amount. It is believed that the Commonwealth made no attempt to make such a bargain- That is borne out by the statement of the Leader of the Opposition (Mr. Scullin)- There is reason to believe that as an outcome of the conference the banks, having indicated their desire to assist the Commonwealth Government in making its taxation remissions effective over a wide area, will be left free to determine this scope and the extent of any adjustments of overdraft interest rates. This may mean that the general reduction will not be made by the banks, but that relief will be given at the discretion of the banks to particular clients, according to their circumstances. 3428 F4Q 0 0 SCULLIN, James Henry Mr Scullin - That is what they said two years ago. 3428 KXQ 0 0 PARKHILL, Robert Mr Archdale Parkhill - The honorable member himself was present at one such conference. 3429 JOM 0 0 BEASLEY, John Mr BEASLEY - I was not. The comment of the Sydney Morning Herald clearly indicated the opinion of the interests represented at the conference, at which they laid down their terms to the Government,When that journal stated " It was learned, however," it is clear that it knew exactly what had taken place. Members of this committee will be permitted to discuss the budget proposals, and offer their criticism regarding them ; but although we may prove that some of the measures will operate unjustly, it will be impossible for us to alter them. The sponsors of this programme have already rejoiced at their success, and they can leave the matter quite safely in the hands of their agents, who will see that the numbers are provided to enable the Government measures to be carried through, no matter what opposition is expressed. Even the Leader of the Country party (Dr. Earle Page) remarked that he had no intention to embarrass the Government so far as the budget was concerned. Members are entitled to consider whether the proposals of the bankers, as outlined in the budget, disclose the real financial position of the country. Our overseas war debts have an important bearing on the financial situation, yet apart from a passing reference in the budget speech, the Prime Minister did not deal with them. "War interest and sinking fund payments were suspended under the moratorium granted by the United States of America to Great Britain, which, in turn, extended a similar concession to Australia. If our obligations in this respect were fully met. wo should have a deficit of about £11,000,000. Mr.Scullin. - Nearly £12,000,000. 3429 JOM 0 0 BEASLEY, John Mr BEASLEY - The following figures show the relief afforded with respect to war indebtedness: - 3429 F4Q 0 0 SCULLIN, James Henry Mr Scullin - Is the honorable member quoting in sterling? 3429 JOM 0 0 BEASLEY, John Mr BEASLEY - Yes. According to the arrangements finally made with the British Government, no payments are to be made this year; but I am given to understand that no such arrangement has been made to cover next year.We are entitled to know whether the opinion expressed by the Attorney-General (Mr. Latham) a few months ago to the effect that we may conveniently forget the war debt problem is still his opinion and that of the Government. If so, it looks as though the war debts will be cancelled or, if not cancelled, will not be paid. In either event, it is well that we should call to mind what was said by Government supporters in opposition to our policy of war debt cancellation about eighteen months ago - that we should remember the widows and orphans who hold war bonds, and to whom the payment of interest on the war debt is of vast concern; that it is outrageous even to suggest a cancellation of war debts because of the hardship that such a course would entail to people who held these securities. Apparently there is now no need to bother about these people regarding whom the Government was previously so much concerned.We are, however, confronted with the fact that no definite indication is given in the budget as to whether Australia may be expected to meet these payments next year, and if we have to meet them the financial position of this country will be very different from what is disclosed in the budget; instead of an alleged surplus, it would show a heavy deficit. It may be that the policy of Great Britain in respect of its indebtedness to the United States of America is to be extended to Australia. It will be remembered that, when President Roosevelt refused to extend the war debt moratorium, Great Britain made a token payment of £2,000,000 to the United States of America. " Token payment " is, perhaps, a convenient term, but the fact remains that the war debt obligation was not honoured. If it is the intention of this Government to follow that example, we should be told of it. As things are, it cannot be said that the budget truly reflects the real position in regard to war debts. Another aspect of the subject which should not be overlooked is that the Prime Minister has taken into consideration, not only 1933-34, but also 1934-35. If the war debt problem does not arise this year, it will most certainly arise next year. The trend of the remarks of the right honorable member for Cowper (Dr. Earle Page) was towards a lessening of the burden of taxation, but no one party can contend that it holds a monopoly of the desire to reduce taxation. My colleagues and I have as much right as any other section in this chamber to advocate remedies in this direction, for we contend that we represent the real wealth producers of Australia. It is well known that taxes imposed upon certain classes of the community can be passed on. Ultimately, practically all taxation falls upon the lower-paid people. Some of it even affects, disastrously, the unemployed. When considering the effect of a reduction of taxation, it is worth our while to study for a few moments the chief purpose for which taxes have been imposed in recent years. It cannot be gainsaid that the greater proportion of the revenue that we have collected during these years has been used to meet interest payments, and I submit, therefore, that those who talk so glibly about the honouring of our obligations in regard to interest payments, particularly those who are interested in our overseas indebtedness, cannot expect to have it both ways; they cannot have a reduction of taxation and at the same time a continuity of the existing high interest rates. If we are to maintain what has been called the honorable standard, and pay interest rates that are really beyond our capacity, we should not be reducing taxes; and the last people who should ask for such a reduction are those who advocate the meeting of' the existing exorbitant interest charges. Figures which I have taken from public accounts disclose that the great bulk of the revenue collected in Australia in recent years has been absorbed by interest and exchange charges. The following table shows the total amount of revenue received from taxation in Australia and also the amount per head of the population for the years mentioned: - 3430 DQC 0 0 HUGHES, William Morris Mr Hughes - Do those figures include revenue from services? 3430 JOM 0 0 BEASLEY, John Mr BEASLEY - No; from taxation alone. I now direct the attention of honorable members to the following table, which shows the amount of revenue spent in interest alone, and also the percentage of that amount to the total revenue: - It will be seen from that table that since 1929 we have paid on the average about 60 per cent. of our revenue in interest charges alone. In the case of the last year or two I have not even included exchange in my calculations. It must surely be clear, from this statement, that interest charges are strangling the country. Numerous instances could be given of the disastrous effects of our present monetary system. One which I have frequently given relates to a loan of £16,000,000 that was raised by New South Wales in 1888 for railway purposes. This loan fell due in 1924, and was converted; but up to 1924 the State had paid no less than £25,907,726 in interest charges without repaying any of the principal. The original interest rate was 3½ per cent., but the conversion rate was 5 per cent. The loan is now redeemable in 1955, by which time New South Wales will have paid no less than £49,825,526 in interest without any reduction of the principal. Including principal and interest, the total payment at that date will have amounted to £65,S25,526. I am glad to know that there is an increasing number of people in the country, -as well as certain honorable members of this House, who, if they had sufficient courage, would admit that an indefinite continuation of this system is intolerable. My final point on this aspect of the subject is that those who desire a reduction of taxes must also agree to a reduction of interest rates and drastic alteration of this method of finance. But many of them will not consent' that it should be dealt with in the same way that the Government saw fit to deal with wages, social services and the like; they wish to adopt conciliatory measures in this connexion. 3431 KNP 0 0 MAXWELL, George Mr Maxwell - Does the honorable member think that we should pay no interest at all? 3431 JOM 0 0 BEASLEY, John Mr BEASLEY - Great Britain took a certain course in respect of its indebtedness to the United States of America. The people of Australia were advised some time ago to "tune in to Great Britain ". If that may be done in one connexion it may equally well be done in another. To suggest that interest rates should be arbitrarily cut as was done in the case of wages and social services is, according to supporters of the Government, to call down upon oneself the name of repudiationist. But, apparently, while it is, or was, quite proper to repudiate the terms of certain agreements having the binding effect of law, it is not proper to do so in connexion with other agreements that have no greater legal effect than those repudiated. If, as the Government maintains, it can be established that the financial circumstances of the country will not warrant a continuation of social services and wages at former levels, then it will not warrant the continuation of interest payments at former levels. I know that it is often said that the financial mechanism of the country is so delicate that even a heavy breath might throw it into disorder. But now that circumstances are as honorable members opposite describe them, surely it is reasonable that we should- 3431 KXQ 0 0 PARKHILL, Robert Mr Archdale Parkhill - Breathe! 3431 JOM 0 0 BEASLEY, John Mr BEASLEY - Yes, breathe heavily enough to make those people who were not prepared to do anything to assist their country two and a half years ago, to do something now. It is quite popular nowadays to advocate the reduction of interest rates, but it was not popular to do so two years ago. It would be rather embarrassing to a number of honorable members of the committee to compare statements which they made on this subject two and a half years ago with statements which they have made upon it more recently, economic pressure and also pressure in their electorates having caused them to modify their opinions considerably. Such a comparison would show how insincere they must have been previously. I suppose it is possible to propagate policies up to a certain point without worrying whether they could even become effective, but when such policies totally fail to achieve any of the results claimed for them, people, at last, begin to. kick strenuously. I know from my travelling in country districts, and my contact with farming communities, that there is a very decided kick in these days against the policy that was advocated by honorable members opposite two and a half years ago. People are not now prepared to accept the talk about the delicate nature of the financial mechanism of the country. Perhaps this accounts for a good deal of the activity of the Country party during the recess. It may also explain why some members of that party are now advocating the reduction of interest rates. It is strange, however, that in this connexion conciliatory methods are advocated, whereas in connexion with pensioners, public servants and wage-earners generally, compulsory methods were adopted. Had the financial policy of the party which I represent been adopted over two and a half years ago, much of the suffering and misery experienced in Australia in recent years would have been avoided, the burdens which many unfortunate people have been, and are still, hearing would have been relieved long ago, and not only would interest rates have been reduced, but our overseas commitments in the matter of exchange would also have been adjusted to a figure much lower than that which we have to meet to-day. As the result, however, of the policy adopted by our opponents, the people have been compelled to accept what has been termed au "honorable policy," hut which involves commitments beyond their capacity if a decent standard of living is to be maintained in this country, and they are now reaping the reward of so doing. A good deal has been said by the right honorable the Prime Minister regarding our overseas indebtedness, and the work of the Resident Minister in London (Mr. Bruce), who has now 'been appointed High Commissioner for Australia. The right honorable gentleman said that the conversion of our overseas loans has been most satisfactory; but a comparison between the conversion of Australian loans and the conversions carried out by Great Britain shows that Australia has not been as fortunate as some suggest. It would appear that Australia has to continue to be the stalking horse in matters of this kind. Quite recently Great Britain handled a conversion loan of £175,009,000 at 2$ per cent., and the effective rate of interest was £3 3s. Id. for' eleven years, or £2 19s. 7d. for sixteen years, whereas the average rate of our conversions overseas works out at about 3J per cent., and the effective rate at about £3 19s. Id. It will therefore be seen that, in regard to the average rates for our overseas conversions, there is not much to crow about. Those honorable members with whom I am associated hold the view that, if firmness and determination had been applied, and those who provide the money had been informed in a straight and plain manner that the capacity of this country was limited, that blood could not be got out of a stone, and that we were determined to maintain a reasonable standard of living in Australia, the interest charges would have been much more reasonable than they are to-day. If in Australia a decent standard of living is to be maintained, unnecessarily high rates of interest cannot be paid. If that policy had been followed, those who handle this class of business in Great Britain, and who will always extract as much as they can, would have adopted a more reasonable attitude. There is no sentiment in big business! Those who handle our loans are after the dollars all the time, and if they can get countries like Australia willing to acquiesce in their proposals, and to accept the conditions they impose, they are likely to continue to charge unnecessarily high rates. There is too much propaganda in this country in the direction of saying that our people are willing and able to pay. Advantage has been taken of our willingness to pay by those who dabble in this class of business overseas, with the result that we have to submit to conditions which the country cannot stand. I mentioned earlier the attitude adopted by Great Britain, which I do not condemn, with respect to its commitments to the United States of America. My view on that matter is that the United States of America has been paid in full for any service it rendered during the war. My only criticism of Great Britain in this respect is that, instead of endeavouring to maintain conditions that could not be maintained, it should have taken similar action long ago, and thus prevented hundreds of thousands of persons from becoming poorer as a result of the policy adopted. Bad as it is that more than one-half of our revenue from direct taxation isabsorbed in meeting our interest payments overseas, there is even a worse result; owing to changed conditions, nearly three times the quantity of goods is now required to pay our commitments than was necessary when the original contracts were entered into. On that ground alone, I say that the demand for no reduction of interest rates is unjust. It is the manipulation of currency for which we are not responsible that has brought about this position. Wo have not the power to vary the basis on which interest payments are made; but, if by the power they wield, either here or abroad, others can. determine that three times the quantity of goods is now required than was necessary under the original contract, surely we are justified in resisting the claim, particularly when it means greater unemployment in this country, the compulsory acceptance of a lower standard of living, and a diminution of social services. Yet our Government still pursues the same old policy* Various anti-Labour governments in Australia have been successful in lowering the standard of living, not only of those engaged in industry, but also of those employed in rural work. I should like to know how long the public will accept this position. The banking institutions have a grip upon governments and upon the people; they are now in complete control. In my reference to the presentation of the budget, I have shown how they act in matters of this kind, and the extent to which they were responsible in framing the proposals now submitted to us. It will not be long before the people will be forced to insist that they cannot continue under such conditions. Economic circumstances will force the people to traverse a different road from that on which they have travelled during the last three years. We have endeavoured to get down to the root cause of our present troubles, and in that respect we definitely claim that the policy which we, as a party, have been endeavouring to follow is the only one that can save the situation. The standards of living are being massacred. Proper consideration must be given to the circumstances surrounding our monetary system. The payment of interest should be tackled from an entirely different angle from that taken by the present Government. There is a marked difference between the financial policy of those with whom I am associated, and that of honorable members opposite. Supporters of the Government pander to "big business" and private finance, regarding such interests as the high lords of the situation, whereas, we refuse to accept the dictation of such people, claiming that their policy has brought the country to the position indicated in an interjection by the right honorable member for North Sydney (Mr. Hughes) " that all governments are in the same position". If that is so, and all governments are subject to the dictates of these influences- 3433 DQC 0 0 HUGHES, William Morris Mr Hughes - I did not say anything of the kind. 3433 JOM ALP ; LANG LAB from 1931; ALP from 1936; ALP (N-C) from 1940; ALP from 1941 0 0 BEASLEY, John Mr BEASLEY - The right honorable member can explain later what he actually did say; but there is no doubt in my mind as to the meaning of his interjection. The circumstances which surround the whole world to-day are due to the policy which has been forced upon the people in the way which this budget has been forced upon us. The responsibility is theirs, and not ours. They have directed governments; they have laid down the terms. They have said what should, and what should not, be done. The responsibility for the failure to find markets for our surplus primary products or to provide employment for our people, is due to their action. In these circumstances, it is useless for the right honorable member for Cowper to express the views which he holds, because the present unsettled economic conditions are world wide. The parliaments of Australia to-day are not the real authors of the financial policy being followed. The right honorable the Prime Minister, who has been a member of Australian parliaments for nearly 25 years, has frequently expressedthe views which honorable members oh this side of the chamber hold.For years, he fought the financial interests of this country. He was the Premier in a Labour Government in Tasmania, and was also a member of a Federal Labour Ministry. Despite his many achievements on behalf of the Labour party, monuments to our desire to act in the interests of humanity, he has now changed his political views. Such changes of political opinion have occurred before, and I suppose are to be expected in the future; but it is fitting that I should mention this, as it shows how7 a man's outlook on life may change, and how he can assist to destroy much of that which he has helped to build. The Prime Minister is now supporting a policy which is cripplingthe great majority of people in this country, and pandering to those interests which have opposed mankind in the great crisis through which we have passed. We claim that the Labour party must continue to play its par i, not only to-day, but also in the years to come, by focussing public attention on actual facts, and by making the people realize who are really governing the country. The Government, if it really has the interests of the people at heart, should tackle this problem at the root, instead of tinkering with it in the manner suggested in the budget. In dealing with the financial position of the Commonwealth during the last four years, it is interesting to refer to the public debt of Australia, as recorded in the Commonwealth Year Book. The figures are - Since 1929, the public debt has increased by £100,000,000. In 1929, it was £173 4s. 7d. per head of population, and in 1933 it was £182, an increase of £8 15s. 5d. For the last two years, the public debt has increased by £48,500,000, or £4 4s. per head of population. 3434 KMW 0 0 MARR, Charles Mr Marr - For how much of that amount are the States responsible? 3434 JOM 0 0 BEASLEY, John Mr BEASLEY - It does not matter, because the same taxpayers are concerned. We cannot avoid our responsibilities by saying that a large, proportion of that amount has been incurred by the States. The point I want to make is that our public indebtedness has increased since 1929 by £100,000,000, and during the last two years by £48,000,000. There is a tendency on the part of some to join those on the " band wagon ", and to talk about a prosperous situation such as that alleged in the budget. In the light of the enormous increase of the public debt in recent years, it is vain to say that prosperity has returned, and that there is no need to worry about the depression. Those who have joined the " band-wagon ", like those responsible for the budget, may regard our colossal public debt as of no importance, because they know that such gilt-edged securities are better than others. So long as the Government is willing to make its policy conform to their terms, they are satisfied. Should another government arise and place human factors first, these people can and will apply pressure and create circumstances unfavorable to it. They control the organs of publicity, and can issue propaganda to stir up the community against any government which they dislike. This method has proved entirely satisfactory to them in the past. There are good reasons why big business and private financial institutions do not worry about an increase of the public debt. They know that over and above everything else the interest due to them will be paid, and that they will lose nothing. The Government is prepared to pander to these interests, although it knows that in doing so it is forcing the masses to carry an unfair burden. In 1929, Australia's interest indebtedness to overseas investors amounted to £27,530,993, and in the following year to £27,596,798. In the three following years - 1931, 1932 and 1933 - that indebtedness was £28,427,855, £28,661,631 and £27,337,473 respectively. It is true that last year the amount was £1,329,158 less than in 1932; but, compared with 1929, the reduction was only £193,520. \Leave to continue given.] In 1929, it required 20 per cent, of the value of our exports to pay Australia's interest indebtedness overseas; this year 34.6 per cent, of our exports will be absorbed in that way. We must, therefore, either increase the volume of our exports or receive a higher price for them in order to meet our commitments abroad. The Government is entitled to its own opinion as to which policy should be pursued. It proposes, however, to restrict the volume of our exports with, a view to raising prices. I cannot understand how the Country party, which professes to be desirous of reducing unemployment, can accept a policy of restricted exports. Although a restriction of exports necessarily increases unemployment, it does not always mean the maintenance of high prices, for, notwithstanding the agreement to restrict wheat exports, the Liverpool market on Friday last showed a considerable drop in the price of that commodity. Instead of prices rising, thus enabling us more easily to meet our obligations overseas by exports, the indications are that prices will fall still further. From whatever angle we view the policy of restriction to which I have referred, the principle underlying it is wrong. Large numbers of the people of other countries are in a state of semi-starvation, yet Australia, which is mainly a primary-producing country, is prevented from e'xporting those products which not only would relieve their distress, but would also help ' our own finances. The Leader of the Opposition (Mr. Scullin) has moved an amendment which, if carried, would affect a number of items in the Estimates. We in this party would go further. We would reduce the item not only for the purposes to which the right honorable gentleman referred, but also as an instruction to the Government not to introduce legislation to decrease the taxation payable by those who will not pass the benefits on to the general public. We should refuse to grant any remission of taxation to persons who will hot pass on the benefits they receive : the Government should demand the full amount of taxes now payable, and itself apply a proportion of it to assist the unemployed. People who are not prepared to do the right thing should be told that others will do it for them. That is the only language that they will understand. Further, the item should be reduced as an instruction to the Government to divert the proposed expenditure on armaments to the relief of war pensioners and the assistance of the purchasers of war service homes by reducing the valuations of the homes. Time will not permit me to deal now in detail with matters affecting pensioners, public servants, and other persons who have suffered under the financial emergency legislation of this Parliament; but an opportunity will be afforded when thc Financial Relief Bill is before the House. From the outset we in this party have strenuously opposed the Premiers plan. We do not believe in destroying that which has been built up only after much work and effort by the Labour party in the past. The proposals contained in this budget are ample evidence that our attitude has been justified. Unfortunately, the promises of this Government to restore social services cannot be relied on, because the Government is controlled by forces outside this Parliament. It has broken its pledge to the poorer sections of the community. I remind the Postmaster-General (Mr. Parkhill) that the great majority of the public servants whose salaries should be restored are in the department which he administers. Most of them are poorly paid, for, unfortunately, the Postal Department does not offer much scope for advancement in a financial sense. Large numbers of men in that department are not even being paid the rates awarded by the court for the work which they perform. The party with which I am associated, will support the amendment, although wishing that it went further. However, time is on our side, and we look forward to the day when these wrongs will be righted. 3435 DQC 0 0 HUGHES, William Morris Mr Hughes - I rise to make a personal explanation. The honorable member for West Sydney (Mr. Beasley) evidently -misunderstood my interjection, and has inadvertently done me an injustice. Apparently, he was under the impression that I had said the position of all governments was such that they were, in effect, compelled to submit their proposals to vested interests. That would be a monstrous perversion of the facts. I said nothing of the kind. My interjection referred to something very different. The honorable member was saying that at the time the party was called together to hear the Government's budget proposals, the budget speech was in print and copies of it had been distributed throughout Australia. I merely interjected that that practice was common to all governments, and I said nothing more than that. Silling suspended from 6.12 to 8 p.m. 3435 KXQ Warringah UAP Postmaster-General 1 0 PARKHILL, Robert Mr ARCHDALE PARKHILL [8.0 . - Had I any doubts on the subject, the criticism that some honorable members have levelled at the budget would convince me of the soundness of the proposals which have been submitted by the Government; and the nebulous and extraordinary character of that criticism will implant a like conviction in the minds of the general public. The Leader of the Opposition (Mr. Scullin) protested against the remission of taxation, and submitted alternative proposals. He suggested that the budget should be reconstructed to provide, among other things, against a deficit in the current revenue and expenditure account. The right honorable gentleman also proposed that invalid and old-age pensions should be restored to £1 a week, the level at which they stood before his Government introduced the financial emergency legislation. That would involve an expenditure of over £2,000,000. Next, he advocated a full restoration of war pensions, which would account for £650,000. The re-establishment of the maternity allowance of £5, and the removal of restrictions in regard to income, would mean another £300,000. The right honorable gentleman further proposed a restoration of the percentage reductions in Public Service salaries, which would involve £600,000; and- that additional assistance should be given to wheatgrowers, which, if granted on. the same scale as last year, would cost £2,250,000. Thus he would budget for an aggregate additional expenditure of nearly £7,000,000! My figures are approximate, but they indicate that what thc right honorable gentleman really suggests is that the present abnormal taxation should continue without relief to the contributors, and that the only beneficiaries should be those sections which I have enumerated. It is manifest that such a. programme would have no effect in restoring prosperity to Australia, which is the object of every fair-minded person in this chamber, and certainly that of the Government. The Leader of the Country party (Dr. Earle Page) suggested that the Government should not worry in the least about last year's deficit of £1,176,000; that, in addition to making the proposed remissions of taxation, it should distribute what he euphoniously described as the amount in the "kitty" - meaning the accumulated surplus of £4,S60,000 - and decrease income by further reductions of taxation to the extent of from £6,000,000 to £7,000,000. Such a proposal completely ignores the efforts of the Commonwealth and State Governments to relieve all sections of the community by remissions and restorations to the amount of something like £13,500,000. The people of Australia, will admit that, in the circumstances, this represents a substantial and most reasonable reduction of taxation. The honorable member for West Sydney ' (Mr. Beasley) advanced no proposals for the alleviation of existing dim.cu 1 t i 's . His speech consisted merely of a laboured exposition of his own fantastic political views, and did not contain a single constructive suggestion to benefit the workers whom he claims to represent, or the people generally. The honorable member began by saying that the policy of this Government is controlled by the banking institutions of Australia, and he proceeded to elaborate his argument and convince himself, at least, that those bodies had something to do with the budget that is under discussion. I do not believe that there can be more than four or five members in this chamber who harbour the illusion that this Government submits its plans for review by an outside body. Even if such a' fanciful idea were general, it could be proved to be without foundation. Actually, the policy of the Ministry is formulated by its members, and is not inspired by any outside source. Honorable members will concede that a Prime Minister and his Treasurer are at liberty to confer with representative citizens upon certain aspects of a subject. As the Leader of the Opposition (Mr. Scullin") will admit, that procedure is followed by all governments in the British Commonwealth of Nations, and I assure honorable members that this Government, ha = not departed from well established practice. The honorable member for West Sydney then claimed that members of the ministerial party were not consulted with regard to the budget before it was introduced. The right honorable member for North Sydney (Mr. Hughes) rightly interjected that that procedure is followed by all political parties. There are obvious reasons why that is the only reasonable course to pursue, particularly with regard to tariff matters, the details of which cannot be disclosed to members of any decently regulated party before they are laid on the table of Parliament. When the honorable member alleged mala fides on the part of the Government, he was merely beating the air; his insinuations have no foundation. The honorable member then dealt with reduction of interest. Surely what the Government is doing, and what the High Commissioner in London has done, and is still -doing in this respect, affords definite evidence that the seriousness of the position is recognized and that every step is being taken to reduce the interest on our overseas indebtedness, for the benefit of the people of Australia. What contribution did the honorable member for West Sydney make to assist the Government in that direction? He said that he would adopt another policy, figuratively that of taking the banker by the throat and shaking money out of his pocket; in that way, he hopes to improve the condition of the workers whom he claims to represent in this chamber ! Illadvised, unsound and extravagant statements of that nature are doing more than anything else to retard the development of Australia and prevent the legitimate employment of capital in enterprise. 3437 KIU 0 0 HUTCHIN, Arthur Mr Hutchin - Does anybody take any notice of such statements? 3437 KXQ 0 0 PARKHILL, Robert Mr ARCHDALE PARKHILL - Unfortunately, they do. The public' know that the honorable member for West Sydney speaks as a henchman of Lang, and they imagine that there is still a danger of that person regaining office. The shadow of Lang is still a curse upon the country, and does much to prevent the development of industry and the employment of labour. Certainly, the ill-chosen references to which I have referred are a serious menace to the restoration of confidence. The honorable member also repeated the canard that the British Government has repudiated its debts to the United States of America. Either be does rot know the position, or he is wilfully repeating what he knows to be untrue. The British Government did not repudiate its indebtedness to the United States of America. It merely deferred the payment of an instalment of interest pending the readjustment of the matter of war debt repayments to the United States of America. That false statement has been repeated 30 often that I must correct it in justice to Great Britain, whose honour should not be traduced, particularly in this Parliament.' 3437 KX9 0 0 WATKINS, David Mr Watkins - Will the honorable gentleman state what Great Britain has done for Australia since the war? 3437 KXQ 0 0 PARKHILL, Robert Mr ARCHDALE PARKHILL -- 1 do not propose to reply to such an absurd and puerile interjection, because every honorable member knows that Australia owes practically everything to Great Britain, which has been most generous in its treatment of the dominions, particularly this Commonwealth. The honorable member for West Sydney concluded his remarks by directing attention to the increase of the public debt. Surely he does not believe that money which is being, spent by governments in New South Wales and in the other States on reproductive works comes from the air or falls, like manna, from heaven. He must realize that, since it has to he borrowed from some source, interest must be paid on it. Apparently the honorable gentleman ignores the obligation to pay interest on borrowed money. This, at all events, is the inference to be drawn from his remarks. I am entitled to say that his contribution to the debate did not, in any sense, assist in the solution of our difficulties. He offered no constructive suggestion to meet any of our present difficulties, nor did he advance any proposal that would increase to the slightest extent the butter on the bread of the workers, or provide a single job for the workless in his electorate. On the contrary, his remarks were definitely calculated to prevent employment from being found for the people of this country. The main contention of the Leader of the Opposition (Mr. Scullin) was that this budget was framed in the interests of the wealthy and privileged classes. 3437 JNP 0 0 BAKER, Francis Matthew Mr BAKER - That conclusion is obvious. 3437 KXQ 0 0 PARKHILL, Robert Mr ARCHDALE PARKHILL - An examination of the Government's proposals will disclose that this budget is one - of the most evenly balanced ever presented to this House. Its principles have been carefully thought out, the one purpose in view being to provide relief for the people in such a way as to benefit all sections. The right honorable gentleman omitted to mention the remission of taxation to insurance societies, although that proposal, perhaps more than any other, might appear to benefit wealthy financial institutions, and, incidentally, will involve the Government in a loss of revenue of over £700,000. I suggest that he had a special reason for omitting to mention this particular item in the Government's financial policy, because when this tax was imposed in 1929 by the Bruce-Page Government he went about the country condemning that administration for its action, and promising to lift the tax if he were returned to power. Although he was successful at the polls, he did not have an opportunity to fulfil his promise, in this respect, and for that I do not blame him. My present purpose will he served by quoting what he said in his policy speech on that occasion. The Melbourne Age, of the 19th September, 1929, reported the right honorable gentleman as having said - The burden of taxation recently imposed by the Bruce-Page Government on life insurance societies, falls mainly on the dependants of hundreds of thousands of breadwinners. This Government is lifting that impost, and, on the evidence of the Leader of the Opposition, is thereby taking taxation off hundreds of thousands of breadwinners. I should mention also that, on the 20th September, 1929, the Labor Daily, in enumerating the promises contained in the policy speech of the Leader of the Opposition, stated that they included the " repeal of taxation on mutual life assurance companies ". 3438 F4Q 0 0 SCULLIN, James Henry Mr Scullin - I still think it will be a good thing to do after the Government has restored the special cuts. 3438 KXQ 0 0 PARKHILL, Robert Mr ARCHDALE PARKHILL - I am endeavouring to show that this Government is giving effect to its policy, and I am reminding the committee that the right honorable gentleman, in his speech this afternoon, made no mention of this aspect of its financial proposals. I have shown that the Government is remitting taxation in the interests, not of the wealthy sections of the community, but of the people generally, and, as regards life assurance companies, in the interests of hundreds of thousands of policyholders. It has been objected that these remissions of taxation will not be passed on to the people, but will simply benefit the wealthy financial institutions and taxpayers with higher incomes. I do not for one moment believe that benefits from reduced taxation will not accrue to the people generally; but if they should not be passed on, as is intended, the necessary legislative remedies will be available, and will be applied, although not in the way suggested by the Leader of the Opposition. When the right honorable gentleman was in office we were told, when instances of profiteering were brought to his notice, that if it could be shown that manufacturers were taking unfair advantage of the customs tariff protection, his Government would take certain action. Evidence of exploitation by the manufacturers was adduced, but the Scullin Government took no action against those people. The Leader of the Opposition referred to what he termed the " cruel and harsh treatment of old-age pensioners and public servants, presumably by the cuts iu social services and salaries when he was in office. His remarks aptly described what 'he did in those years, and I oan well understand his present desire to sea those cuts restored, and that unhappy chapter of his political life closed as speedily as possible. But whether it would give pleasure to the right honorable gentleman and his party to see this Government make the restorations, I am not quite so sure. 3438 F4Q 0 0 SCULLIN, James Henry Mr Scullin - I am not concerned which government takes action, so long as the restorations are made. Mr. ARCHDALE PARKHILL This Government is glad to be in a position to return to invalid and old-age pensioners, to public servants and to exsoldiers and their dependants, some of the reductions that were imposed upon them at the time; but anything which it may do in this respect will not interfere in any way with its general policy for the restoration of prosperity. Any government would be open to criticism if it handed back to certain sections of the community largess, generously and without regard to the consequences to other sections. It is easy to criticize this Government, as it was easy to criticize the Labour Ministry, for having taken the wise course, but a government has a definite responsibility, and the present Ministry is doing its utmost to act fairly to all classes in the community, while directing its policy to the restoration of general prosperity, and paying regard to the clamant necessity for the re-employment of so many thousands of ' our fellow citizens, who to-day are without income of any kind. The budget proposals are calculated to do more in that way than any other measures submitted to this Parliament for a long time. The Leader of the Opposition said that, when he appealed to the people, he definitely mentioned two fundamentals essential to the restoration of prosperity, namely, balanced budgets and the restoration of the cuts made in payments to public servants and pensioners. I am not sure that the right honorable gentleman was so emphatic then, as now, about the need for balanced budgets, but it is re-assuring to know that, as a Labour leader, he leans strongly to such a sound principle of government. Nor do 1 remember the right honorable gentleman, promising very definitely a restoration of the cuts made in public servants' salaries and the payments to pensioners, particularly in view of the difficult state of the finances at that time, when his Government was faced with a deficit of £40,000,000, which in the following year was reduced to £20,000,000. But assuming that, when appealing to the electors, the right honorable gentleman did mention these fundamental principles, is it not singular that he should have omitted the really important essential, namely, the re-employment of our people? 3439 F4Q 0 0 SCULLIN, James Henry Mr Scullin - I mentioned that as a third fundamental principle. I spoke of the need for balanced budgets, of plans to deal with unemployment, and the restoration of cuts made in salaries and social services. 3439 KXQ 0 0 PARKHILL, Robert Mr ARCHDALE PARKHILL - I accept the right honorable gentleman's assurance, and emphasize that, more important than any other subject, is the re-employment of our workless fellow citizens. Surely there is very little difference of opinion as to what can or should be done in this direction. I say frankly and definitely that the most important thing to do in order to restore prosperity to Australia is to induce private enterprise to extend its activities, and so make possible the absorption in industry of a large number of men and women who, to-day, are without employment. During 1929, the peak year, of our prosperity, when the number of government employees was greater than at any other period in the history of the Commonwealth, governments were responsible for the employment of only 18 per cent, of salary and wage-earners, the remaining S2 per cent, being dependent upon private enterprise. These figures prove that, while governments may spend large sums of money on reproductive works to pro vide employment, we must look to private enterprise for a real solution. Anything which governments can do in this way should only be regarded as an encouragement to private enterprise to act similarly. 3439 KMZ 0 0 MARTENS, George Mr Martens - That is all that "has been suggested. 3439 KXQ 0 0 PARKHILL, Robert Mr ARCHDALE PARKHILL - Apparently, then, the Government and members of the Opposition are at one in this matter. I am glad to have the assurance of the honorable member for Herbert that his party advocates the adoption of measures which will induce private enterprise to engage in undertakings to provide more employment. The Leader of the Labour party in Queensland, Mr. Forgan Smith, in his policy speech, expounded the principle that it is to private enterprise that the workers of this country must look for any real alleviation of their conditions. That is my contention to-night. 3439 KMZ 0 0 MARTENS, George Mr Martens - He also said that a lead would have to be given by governments. 3439 KXQ 0 0 PARKHILL, Robert Mr ARCHDALE PARKHILL - That is true. The governments of the States are spending large sums on public works with a view to inducing private enterprise to enlarge the avenues of employment; and, in proposing to increase its expenditure in that direction by £2,802,000, the Commonwealth is doing far more than has been done by any other government for many years. The Leader of the Opposition (Mr. Scullin) has proposed that the sum of £4,500,000 should be appropriated for public works. That does not go much further than the proposal of the Government. 3439 F4Q 0 0 SCULLIN, James Henry Mr Scullin - I mentioned that merely as a part of what is necessary. 3439 KXQ 0 0 PARKHILL, Robert Mr ARCHDALE PARKHILL - I accept that qualification ; in any case, the difference between us is comparatively slight. The Government's proposals are advanced with a due sense of its responsibility, and a knowledge of the funds that are available and the uses to which they can be applied. The right honorable gentleman also referred to pensions, concerning which- we shall probably hear a good deal before this debate closes. I have made a calculation which shows how each £1 of taxation collected by the Commonwealth has been spent during the last two years, and the estimate for this year. It is as follows : - Every individual in the community is sympathetically inclined towards pensioners. I am confident that were this matter to be entirely dissociated from party politics the expenditure upon invalid and old-age pensions and other social services of approximately one-fifth of the total amount raised by way of taxation, would be admitted to be eminently reasonable, and that the pensioners themselves would be content with the treatment they are receiving. I agree with the Leader of the Opposition that it is not good for any country that the value of its bonds should be constantly rising to the exclusion of investment in industrial and other securities. We are, however, justified in assuming, from the fact that Australian stocks rank higher than those of any other dominion, that this country is well governed, and that there is confidence in its future both in the Commonwealth and throughout the British Empire. 3440 F4Q 0 0 SCULLIN, James Henry Mr Scullin - May it not also prove that in other countries there is greater investment in stocks other than government bonds? 3440 KXQ 0 0 PARKHILL, Robert Mr ARCHDALE PARKHILL -I do not think so. I have taken the trouble to ascertain how Australian and New Zealand stocks compare. Our 5 per cent. stock was worth £86 5s. on the 10th June, 1930, while on the 9th instant it was worth £109 2s. 6d. On the latter date New Zealand 5 per cent. stock was quoted at £108 7s. 6d. This is the first occasion on which Australian stocks have ranked higher than those of. New Zealand. Capital is being attracted to this country more freely than has been the case for many years. Although it would be better if investments in private enterprise were greater, we have every reason to be proud of the fact that our stocks rank higher than those of the other dominions. As the Leader of the Country party (Dr. Earle Page) has indicated his intention to vote against the amendment, it would be ungracious of me to do other than offer some friendly criticism of his proposals. He has suggested a most extraordinary system of finance. So far as I can gather, he proposes extravagant reductions of taxation, irrespective of all the factors of government and of the constituent items of finance. No reputable journal appears to be willing to father his scheme. 3440 C7E 0 0 PAGE, Earle Dr Earle Page - What about the Sydney Bulletin? 3440 KXQ 0 0 PARKHILL, Robert Mr ARCHDALE PARKHILL - I do not regard it as a reputable journal. I am bound to confess that I am totally unimpressed and un convinced by his statement to-day in regard to the removal of taxation. He characteristically ignored the deficit of £17,000,000 that still hangs round the necks of the people. 3440 C7E 0 0 PAGE, Earle Dr Earle Page - I mentioned it quite definitely. 3440 KXQ 0 0 PARKHILL, Robert Mr ARCHDALE PARKHILL - It is my impression that the right honorable gentleman overlooked it. If he is so keen on the reduction of taxation, why did he not reduce it when he was Treasurer in the Bruce-Page Government? He will surely admit that during that period his surpluses were as great as that which is available to the present Government. 3440 C7E 0 0 PAGE, Earle Dr Earle Page - We reduced the land tax by 30 per cent. and the income tax by 45 per cent. 3440 KXQ 0 0 PARKHILL, Robert Mr ARCHDALE PARKHILL - It has been left to this Government to make a substantial contribution to the prosperity of Australia. I do not say that Australia has reached the stage of abounding prosperity, but there are clear and indisputable signs that the position to-day is vastly improved in comparisonwith what it was. If time permitted I could quote the list of building permits issued by the metropolitan municipalities of Sydney showing how the building trade has revived, and employment improved. [Leave to continue given.] This budget is fair to all sections of the community, and should contribute materially towards the restoration of national prosperity. 3441 KLL Hindmarsh 0 0 MAKIN, Norman Mr MAKIN .- Those who listened to the speech of the Postmaster-General (Mr. Parkhill) must have felt that he was somewhat ill at ease as compared with some of his former oratorical efforts in this chamber. As counsel for the defence he lacked much of the fire and dash which usually characterizes him in attack. He sought, by the employment of vague generalizations, to create an impression which the budget itself does not justify. He said that the proposals of the Leader of the Opposition (Mr. Scullin), if given effect, would cost the country an extra. £7, 000,000, which it could not afford. As a matter of fact, the cost of restoring pensions, maternity allowance, superannuation and Public Service wages and salaries to what they were before the cut would be no more than £3,500,000 for the remainder of the present financial year. Even if we added another £2,000,000 for the relief of the wheat-growers, we should still be able to live within our income, provided we did not remit any taxation. However, it did not suit the Postmaster-General to emphasize that point. He said that the budget was the best balanced that had been submitted by any government for years. As a matter of fact, the budget for the present financial year will not balance, because the Government estimates a deficit of £1,140,000. The Postmaster-General, referring to unemployment, tried to make it appear that the Opposition desired to place on the Government full responsibility for finding profitable employment for every one. We maintain that it is the definite responsibility of the Commonwealth Government, in its budget, to give a greater fillip to industry by a progressive policy of public works, so as to restorethe purchasing power of the people. There was one part of the speech of the right honorable member for Cowper (Dr. Earle Page) that I failed to understand. He said that it was essential that the purchasing power of the workers should be restored so that they might be able to absorb the products of industry. At the present time, he said, the unemployed had no incomes at all. He referred most sympathetically to the men who were going about in threadbare clothes, while the clothing factories were working part time. The remarkable thing to me was that, while the right honorable gentleman recognized how wrong was this condition of affairs, he should advocate a policy that would merely aggravate the trouble. His idea is to import freely from abroad those goods which we should be manufacturing in Australia. If we do that, how are we to find employment for our people? His' theory is contrary to the economic experience of the last few years. We have been treated to a great deal of self-adulation by members of the Government, and have read fulsome praises of the budget in the daily press. It is well, however, to consider for a moment upon whom the budget bestows its benefits. We have read in the newspapers that the budget has been enthusiastically received in financial and commercial circles in the United Kingdom. Indeed, the London Daily Telegraph placed over its article dealing with the budget the following heading, "Australia's Big Gift to British Trade ". If abig gift has been bestowed on British trade, something must have been taken from Australian trade in order to make that possible. An examination of the position shows that it is not foreign trade, but Australian trade, that will suffer. Our budget has been received particularly well in Lancashire, where the textile industry is greatly elated at the prospect of exploiting the Australian market. The Australian textile industry has developed to such an extent that it can now supply the whole of Australia's requirements with goods of excellent quality. I remember speakingto one of the leading Lancashire manufacturers of cotton and light tweeds when he was on a visit to Australia some months ago. He said to me : " Of course, Mr. Makin, you do not manufacture light tweeds in Australia, and therefore special concessions should be afforded to the British manufacturers of these materials." I was able to show him that the suit I was wearing was made from light tweed manufactured in Australia, and he could hardly believe that material of such fine quality could be made here. It is evident that manufacturing interests abroad do not realize, or will not admit, what can be done in Australia in the way of manufacturing. If British manufacturers desire to exploit the Australian market, they should establish branch factories here. The Leader of the Opposition, in an excellent speech upon which I congratulate him heartily, aptly -described this as a rich man's budget. We were informed by the newspapers that the banks received it most cordially, as also did the large insurance companies. The pastoralists have said that they are moderately pleased with the proposals, while the commercial interests generally have expressed entire satisfaction with them. The banking, insurance, shipping, land and commercial interests are to benefit by remissions of taxation to the extent of almost £7,500,000, yet the great body of the general community is to receive little or no benefit. 3442 KWC 0 0 THORBY, Harold Mr Thorby - The general community will share in every penny of the taxation remissions. 3442 KLL 0 0 MAKIN, Norman Mr MAKIN - The great mass of the people will not share to any extent. Let us consider how these benefits are to be distributed. Under the Premiers plan, the taxation on income from property totalled £830,000. Last year there was a remission of that tax of £500,000, and this year there is to be a remission of £1,100,000. Therefore, in respect of the impost' of £830,000 under the financial emergency legislation, property-owners are to receive a total remission of taxation of £1,600,000, or £570,000 more than the amount imposed under the rehabilitation plan. The Government also proposes to reduce the company income tax rate from ls. 4.Sd. . to ' ls. in the £1, representing a reduction of 30 per cent.; whereas, the increase in the rate linder the financial emergency legislation was from ls. 4d. to ls. 4.8d. in the £1, or only 5 per cent. The impost under the rehabilitation plan was £380,000, yet the Government in this budget is now remitting taxation to the extent of £580,000, which represents a gift of £200,000. The amount contemplated to be received under the Premiers plan as additional revenue from indirect taxation was £6,400,000 - namely, sales tax, £4,000,000, and primage £2,400,000. The fact that that amount was exceeded may be attributed to the improvement that took place in trading. Under the budget of last year concessions were granted to the value of £400,000, and provision is now being made for the remission of a further £3,200,000, the total concession representing considerable more than half of the imposition under the financial emergency legislation. We come now to land tax. It is well for us to be reminded of what sections of the community are to benefit' from these remissions of taxation. The Leader of the Opposition (Mr. Scullin) has correctly intimated that no owner pf property of an unimproved value of less than £5,000, pays federal land tax, and that the great majority of those who do pay this tax own property in the large cities and not in the rural areas. Under the financial emergency legislation, no additional burden was placed upon these taxpayers; yet this Government now proposes to benefit them to the extent of £1,100,000, of which £700,000 was provided from last year's surplus, . and the balance is to be provided this year. The Government has gone out of its way to benefit shipping interests abroad to the amount of £25,000. The Postmaster-General has already referred to life assurance companies. The benefits that they are to receive under the Government's proposals amount to £700,000, and will merely help to swell their profits and strengthen the position of their policy-holders. Surely any benefits that are to accrue under a plan of national recovery, should be shared, not by sectional interests alone, but by the whole of the people. Actually we find that under the Government's proposals those who made the greatest sacrifice in time of emergency are now to receive very scant consideration. It is interesting to note in this budget the distinct departure from those principles which were formerly held by the Government to be inseparable from sound public finance. This budget proves that the opinion of the Government is that a deficit representing remissions of taxation to wealthy interests is justified, but to budget for a deficit is an endeavour to maintain wage standards and social services is dangerous. Such is the peculiar logic of the Government. Now let us consider how the crumbs that fall from the rich man's table are to be distributed. Under the financial emergency legislation, the pensioners suffered to the extent of £1,825,000. The amount of the proposed restoration of pensions this year is only £635,000. Surely that is a poor contribution to the people who made substantial sacrifices at a time of national crisis. Why should the Government be so unmindful of the hardships suffered by the unfortunate pensioners? It claims credit for proposing to increase invalid and old-age pensions by £635,000, yet during the last twelve months, by a most iniquitous and paltry provision of the financial emergency legislation, it caused 12,000 persons to surrender their pensions rather than mortgage their properties to the Government. By this surrender of pensions, the Government saved approximately £500,000, nearly equal to the amount of the proposed increase. By a process of intimidation the Government caused many of our aged folk to forego benefits to which they were rightly entitled. The Labour party in this chamber, which represents the Labour movement throughout Australia, stands absolutely for the restoration of the pension to £1 a week. Any adjustment in respect of variations in the cost of living should start from that basis. The sliding scale proposal of the present Government to vary the pension according to the cost of living shows that it has permanently fixed 17s. 6d. as the maximum amount to which the pensioners are to be entitled. Under the Government's plan, only 38 per cent, of them will benefit. The reduction of war pensions made under the Financial Emergency Act amounted to £1,300,000, and in the present 'budget, it is proposed to restore £248,000. The wealthy section is to get more than it has contributed through special emergency taxation, yet old-age invalid and war pensioners must continue to bear a large portion of the burden imposed on them under the original rehabilitation plan, and increased by this Government. Truly, as the Leader of the Opposition remarked, this is essentially a rich man's budget ! The Prime Minister said that no reduction under the Financial Emergency Act had been made of the pensions payable to single or married exsoldiers. That may be, but the Govern-' ment instituted a more rigorous medical examination, as a result of which the pensions of many ex-soldiers have been sub'stantially reduced. I have been required! to attend at the Repatriation Department in the interest of pensioners more in the last twelve or eighteen months than at any previous period. The decisions of the medical officers have been less sympathetic than previously, and have resulted in many single and married returned soldiers being deprived of their pensions. By a remarkable coincidence, an effort has been made by the examining officers to make inroads upon the pensions by reporting that certain disabilities were not due to war service, but were contracted prior to enlistment. In every possible way, war pensions have been reduced. Let honorable members consider the position of the public servant. In April, 1931, three months before it was due, he voluntarily accepted a cost of living reduction of £18 a year. A further reduction of £16 a year was imposed by the Government in July of that year, twelve months before it should have taken place. On top of that, special cuts ranging from 3 per cent, to 25 per cent, were imposed under the financial emergency legislation ; but that was not all. In the following year the Government imposed another reduction of £8 a year in order to grant assistance to primary producers and concessions to land owners. The public servant now sees all the emergency taxation under the Premier's plan being removed while he is required still to carry a special burden little less severe than was considered necessary at the most acute period of the financial crisis. That is grossly unfair. The cut in the salaries and wages of Commonwealth public servants amounted to £1,800,000, and this year, the Government proposes to restore only £550,000. Is that its method of showing consideration to a loyal Public Service? The ministry is acting in a parismonious way, and is being much less generous than the Public Service has a right to expect. Before one penny of taxation is remitted there should be a full restoration of wages and salaries to the Public Service and to all employees of the Government. There is no reason why the rates awarded by the Various tribunals should not be paid in full. Government employees should not be called upon to accept conditions less just than those imposed on other sections. Those who find it necessary to accept the benefits of social legislation are required to bear a further load owing to the unfortunate financial and economic crisis, while some persons who made no contribution to financial rehabilitation are receiving from the Government substantial gifts. I regret that any government should have seen fit to reduce the payments due by it to the Superannuation Fund. The contract made between the Government and its servants should be regarded as sacred, and should be observed in every respect. The Government's contributions to the Superannuation Fund should never have been reduced, and the restoration now proposed is long overdue. In view of the prospect of an easier financial position the Government should go further, and make the restoration of full superannuation benefits retrospective. The budget can give satisfaction only to those whom the Government is aiming specially to serve. These proposals had to receive endorsement at a conference in Melbourne between the Government and the banking and financial interests. 3444 KXQ 0 0 PARKHILL, Robert Mr Archdale Parkhill - Nothing of the kind! 3444 KLL 0 0 MAKIN, Norman Mr MAKIN - "We know that members of the Cabinet proceeded to Melbourne to confer with the banking and other financial interests concerning Government policy. The financial position was the vital matter that concerned those particular interests, andi by reason of the proposals in the budget an effort was made to extract from them certain promises of support and financial assistance. I challenge the statement made by the Postmaster-General (Mr. Parkhill) that the budget was prepared in the Treasury. In my opinion it was drawn up outside the Treasury by those parties who dictate the policy of this Government and recognize the benefit of having a Ministry in power that is ready to serve their special interests. But such an alliance is not satisfactory to the great, body of citizens throughout Australia, and the time is coming when the people will indignantly protest against what has been done. They will show conclusively that a budget that serves the interests of a privileged few meets with their disapproval. This Government has overlooked the dire needs of hundreds of thousands of citizens who have the first claim to consideration in view of the improved financial situation. As my time is almost exhausted I shall ' have to wait another opportunity to discuss other phases of the budget. I shall refer to the war hysteria that the Government is seeking to arouse by means of undesirable propaganda. I shall protest vigorously against the defence proposals outlined by the Minister for Defence at the Millions Club recently. On the earliest possible occasion I shall take an opportunity to emphasize the growing feeling of the Australian people against war and their earnest desire to encourage friendly relations with neighbouring nations. By provocative defence proposals, the Government will jeopardize the amicable relations which should prevail among all peoples. "We should show the sincerity of our adherence to the League of Nations by displaying a spirit of goodwill, and a desire to bring about disarmament. Instead of preparing for war, we should relieve the community of the burdens which the last war imposed upon it. 3444 JVR Perth 0 0 NAIRN, Walter Mr NAIRN . - I am in no better position than the honorable member for Hindmarsh (Mr. Makin) to say where and under what circumstances the budget was prepared, but, unlike him, I do not desire to take a shot in the dark. The honorable member has complained of what he describes as the Government's gift to British trade. In my opinion, gifts to trade benefit the donors as much as those who receive them. Under the Ottawa Agreement, Great Britain has taken a substantially increased proportion of its needs from Australia. We should be willing to reciprocate. Our friends opposite suggest that we should take everything and give nothing; but, in my opinion, one-way trade has contributed more than anything else to the unemployment that is rife throughout the world. The Government, in taking a middle course between tha,t proposed by the Opposition, which would make no reduction in taxation, and the proposal of the Country party, which would make a reduction of £20,000.000 is acting reasonably. I listened to the right honorable member for Cowper (Dr. Earle Page) describe how he would implement his proposal to remit £20,000,000 to the taxpayers, but I regret that I was not able to follow his explanation. It must be remembered that both the Leader of the Opposition and the Leader of the Country party have spoken without responsibility that attaches to office. They have both, however, been in office. The right honorable member for Yarra in opposition is very different from the right honorable member for Yarra in office. I have compared thc right honorable gentlemen's statements when he was in opposition in 1929 and when he was Prime Minister in 1931, with those that he has made to-day. In 1929 the right honorable gentleman went to the country, and promised that if his party were returned, to power it would set up a standard of living the like of which had never been attempted in any part of the world. Of course, he was unable to keep his promises. I do not blame him, nor I think does any one else, because he was unable to foresee the financial depression that was approaching. But his Government did not meet, the depression nearly as early as it should have done. The consequence was that, after a. bare two years of office, the Commonwealth was facing a deficit of £20,000,000. He has himself told us that his Government faced insolvency, with \a prospect at that particular time of paying only 12s. in the £1 of the estimated expenditure for the year. In those circumstances, the right honorable gentleman was forced to accept the Premiers plan, which was not of his conception. In accordance with that plan be very reluctantly proposed reductions of the Public Service salaries and pensions, of which Parliament approved. He did that solely because circumstances forced him to do it. On that account, he deserves sympathy rather than criticism. I criticize him to-night, however, because now that he is back again in his old position of irresponsibility, with his eyes towards an election perhaps fifteen months hence, he is again making extravagant promises which he has no hope of honouring. He has promised, among other things, that if his party is returned to power at the next election it will restore the invalid and old-age pensions to £1 all round. I personally approve to a certain extent of the right honorable gentleman's attitude in regard to pensions. If I had my way I would restore the pensions to the 1931 level, but to make promises to a section of the public with the object of leading it to believe that certain things can be accomplished which experience has shown cannot be accomplished, is entirely wrong. Such promises should not be made in any circumstances. On the whole I congratulate the Government upon the budget. On only two items do I offer criticism. I believe that the Government made a serious error in interfering with the pensions legislation, and reducing pension payments as it did some twelve months ago. Public opinion lias forced it from time to time to retreat from certain positions that it took up at that time, until now the pension position is as it was in 1931, except only for the property provisions which affect only a minority of pensioners who own property. 3445 KFW 0 0 GUY, James Allan Mr Guy - What about the cost of living? 3445 JVR 0 0 NAIRN, Walter Mr NAIRN - I do not take much notice of the cost of living adjustments as they apply to pensioners. ' A considerable time will elapse before an increase in the pension rate will be justified in consequence of an increase of the cost of living. In any case, an increase of pension because of an increase of the cost of living is of no real value to pensioners. The Government would be well advised to acknowledge plainly that it made a mistake in reducing the pension rate and in incorporating certain property provisions in the pension law. There was no justification, in my opinion, for singling out pensioners for specially adverse treatment of that kind. It would be wise to restore the pension position to that of 1931. The cost of doing so would be trifling. The savings that are likely to be made by the Government in consequence of the property of certain deceased pensioners coming into its hands have been, and, in my opinion, are likely to be trifling. The property charge upon the estates of deceased pensioners will ultimately defeat its object, for it will entirely discourage thrift. A person who knows that any thrift that he practices will benefit neither himself nor those whom he leaves behind him but only the Government, is not likely to endure the hardship of saving. Every inducement to working people to save is taken away by the knowledge that only the Government is likely to profit from it. If people know that, only by spending all the money that comes into their possession are they likely to become entitled to a full pension, they are not likely to save. Obviously, the thrifty among the poorer sections of the people are called upon to suffer most, because of these property provisions of the pensions law. We should endeavour to act equitably to pensioners. For that reason, I hope that the Government will remove this charge upon property. If it is not entirely removed, I hope that the value of the property which pensioners may hold without penalty will be substantially increased. 3446 K9A 0 0 GANDER, Joseph Mr Gander - Would the honorable member support an amendment to that effect ? 3446 JVR 0 0 NAIRN, Walter Mr NAIRN - Most definitely, and I am not the only honorable member on this side of the committee who would do so. We desire to see justice done to thrifty pensioners, as well as to other people. My only other criticism of the budget is in respect of the failure of the Government to provide for some assistance to the wheat-growers. Not only has the Government failed in this respect, but, by allocating every penny of its expected income, and even budgeting for a deficit, it has rendered the granting of such assistance impossible, except by the raising of a loan, which is doubtful policy. The attitude of the Government appears to be that the provision of an annually-recurring contribution in the nature of a bounty for the support of the wheat-growers is not to be encouraged. I can see no reason why that attitude should be adopted towards this industry when a different policy is adopted in regard to a number of other industries of less value to Australia. We maintain, year after year, bounties for the iron and steel, cotton, sulphur, and several other industries. We also maintain the sugar industry in. a privileged position. 3446 K6Q 0 0 CORSER, Bernard Mr Bernard Corser - And wepay a dole to Western Australia! 3446 JVR 0 0 NAIRN, Walter Mr NAIRN - That is beside the point. The sugar industry is being maintained in a sheltered position at a cost to the consumers which is variously estimated, but is usually reckoned at about £5,000,000 a year. If honorable members desire to make a careful estimate of what this industry costs Australia, let them ascertain what imported sugar could be sold for in this country, and what we have to pay for locally-grown sugar. 3446 K6Q 0 0 CORSER, Bernard Mr Bernard Corser - Imported sugar grownby black labour ! 3446 JVR 0 0 NAIRN, Walter Mr NAIRN - That is an appeal to prejudice. For my part, I should be glad if we could do more trade with what are called black-labour countries. If Western Australia, for instance, could buy sugar from Java, it would be able to build up a reciprocal trade with that country. Unfortunately, the western State is not able to engage in reciprocal trade with Queensland. The point that I am making, however, is that the wheat-growing industry has been singled out as one which is not worthy of assistance year after year. 3446 K6Q 0 0 CORSER, Bernard Mr Bernard Corser - It has been assisted to the extent of £5,000,000 in two years. 3446 JVR 0 0 NAIRN, Walter Mr NAIRN - And in that two years it has been responsible for bringing into Australia £40,000,000 of new capital. That, surely, is good finance from a national point of view. It may be that the people engaged in the production of wheat are living under starvation conditions, but it cannot be denied that the production of wheat is to the advantage of the nation. If wheat production should entirely cease, or even if it should he seriously diminished, the capital cities of Australia would be flooded with an even larger number of unemployed than they have at present, and the deficits on our railways would be increased. In fact, the country would go to pieces if the wheat industry were lost. Therefore, I submit that the Government should not lay downthe principle that it shall not be granted assistance when the circumstances require it. There is a substantial reason, on the other hand, why it should be helped. The Government has recently, on behalf of Australia, executed an agreement for the limitation of the export of wheat, and has taken upon itself the authority to control exports. That seems to meto involve it in the responsibility of protecting the wheat-growers who will be adversely affected by this agreement. 3447 KV7 0 0 STEWART, Frederick Mr Stewart - That will not be so. 3447 JVR 0 0 NAIRN, Walter Mr NAIRN - If the Government does its duty they will not be adversely affected. At present there is every possibility of a surplus over Australia's export quota, and producers will not be permitted to dispose of it. If that be so, I feel sure that the Government will not allow these unfortunate wheat-growers to beleft without assistance. 3447 KV7 0 0 STEWART, Frederick Mr Stewart - No. 3447 JVR 0 0 NAIRN, Walter Mr NAIRN - I am glad to have that assurancef rom the Minister. The fact that wheat-growers have to appeal for assistance suggests that they do not receive the same consideration as do those engaged in other industries. 3447 KXQ 0 0 PARKHILL, Robert Mr Archdale Parkhill - The honorable member cannot say that they have not received assistance during the last two years. 3447 JVR 0 0 NAIRN, Walter Mr NAIRN - Last year assistance was given grudgingly and in a form that rendered it less acceptable than it otherwise would have been. That was due to the fact that not one member of the Cabinet has any practical knowledge ofwheat-growing. The Government believedthat it was better able to say how thebounty should be distributed than are the farmers whoproduce it. 3447 KXQ 0 0 PARKHILL, Robert Mr Archdale Parkhill - All the Government did was to ensure that the money went to the farmers who deserved it and not to those who had incomes. Does the honorable member complain of that? 3447 JVR 0 0 NAIRN, Walter Mr NAIRN - I am not complaining; but the conditions imposed were not acceptable to a majority of the wheatgrowers.I am pleased to learn that the wheat agreement is to be handled by the Minister forCommerce (Mr. Stewart), and hot by the Postmaster-General (Mr. Parkhill). I believe that the Minister for Commeree will do whatever is necessary toprotect the interests of the wheatgrowers. I am surprised to hear any criticism of the Government's proposed reductions in taxation. Taxation is an evil which we would all willingly dispense with. At first I thought that the proposed relief to insurance companies would need a good deal of explanation, but I find that the Government's proposal in this respect has the support of the Opposition, which three years ago regarded this form of taxation as unfair.I assume that,before agreeing to such a reduction, the Government feltthat the benefits which the companies derived would be passed on to the people. That has already been done by the Australian Mutual Provident Society, which has reduced the interest rate on mortgages. It is also proposed to reduce the taxation on property, the income from which consists mainly of rent and share dividends. Property-owners have suffered very severely since the depression. Taxation on property is imposed on the net income, although the net amount received may not represent fair interest on the value of the asset. Although a property may.be returning only ½percent., the owner is liable.to pay a tax of 10 per cent. The cut imposed in accordance with the Premiers plan was, generally, 20 per cent., but property-owners lost much more than that. Land tax, which is a questionable tax, should be based on the profits which the land returns instead of upon its estimated capital value. The earning capacity of city properties and pastoral lands has decreased considerably during the last few years. Aslarge areas of country lands do not return interest on the capital expenditure, it is grossly unfair that the owners should have to pay any land tax in respect of them. The same could be said of some city lands which do not return sufficient to pay rates, taxes and interest. In these circumstances, a reduction of taxation is urgently needed. The Government is to be congratulated upon presenting such a satisfactory 'budget. Two years ago, when a report of a committee of economists and undertreasurers was submitted, to a conference of Commonwealth and State Ministers, the deficits of the Commonwealth and of the State Governments were estimated at £32,000,000, exclusi ve . of the amount to be set aside for loan redemptions. If that amount were taken into consideration, the Australian national deficits for that year would have been £39,000,000. Since then, Australia's finances have substantially improved, and the combined deficits of the States for the current financial year are estimated at only £8,000,000. That amount is substantially set off by the amount provided for loan redemption. At the end of the last financial year, the Commonwealth Government was able to show a surplus of over £3,000,000. That is a result of which we should be proud. I do not suggest that that favorable position is entirely attributable to the present Government, but such a magnificent result could have been achieved only by sound finance. It would not have been obtained by the present Leader of the Opposition (Mr. Scullin), whose Government was forced, by circumstances, to take the first step towards national recovery, and because of that step, was deserted by a number of its supporters. As a result he was forced to the country, and subsequently into opposition. We have every reason to congratulate ourselves upon the recovery made, and also upon the fact that Australia is the first nation to regain financial equilibrium. 3448 KIO Maranoa 0 0 HUNTER, James Mr HUNTER .- I intend to support the budget proposals of the Government, and to oppose the amendment moved by the Leader of the Opposition (Mr. Scullin). I was surprised to hear the Postmaster-General (Mr. Parkhill) criticize the Government of which he was once a loyal supporter; indeed, I cannot understand any supporters of the present Ministry condemning the Bruce Page Government which a majority of them supported. When that Government was in office, they strongly attacked any one who opposed it. I ha<ve a quotation from a speech made by the present Postmaster-General in reply to a statement made by one of his late colleagues, the honorable member for Henty (Sir Henry Gullett), who, until he was appointed to the Bruce-Page Government; was one of its most bitter opponents. This is what the present Postmaster-General said in 1928 - Wo find that we are better oil' to-day th al we were in 1021-22 by 10s. per bead. ". . . X believe the Bruce-Page Ministry to be the strongest political combination that has existed in this Commonwealth for many years, and the one leader is just as necessary to the welfare of the community as the other. lt is to the interests of members cm this side of the chamber at least to preserve that combination us lon;; as possible. . The Treasurer (Dr. Page) lias carried out the duties of his office with singular nihility, skill and industry, and with lasting benefits to the people of this country. His reputation has steadily increased, and he has a chum upon the good wishes and gratitude of the people. 1 have no desire at the next election to he faced on every platform on which I stand with the statements of the honorable member for Henty, or with the votes and statements of the right honorable member for North Sydney (Mr. Hughes). . . . The Postmaster-General said to-night that there had been no remission of taxation when the right honorable member for Cowper was in office; but according to the annual report of the Commissioner for Taxation, there were four reductions of income taxation amounting in all to 42 £ per cent, during that time. Land taxation was also reduced by 20 per cent., and later by 10 <per cent. On one occasion, the Postmaster-General attended a meeting at Mosman in his electorate at which the ex-Treasurer was the principal speaker. In moving a vote of thanks to the speaker, the present Postmaster-General made laudatory remarks regarding" his work as Treasurer of the Commonwealth. The honorable gentleman was a most loyal supporter of the Bruce-Page Government. It ill behoves any member who supported that Government to criticize it now, for if it was wrong, its supporters also were wrong. I hope that we shall not have a repetition of the uncomplimentary statements which have appeared recently in the newspapers regarding the Bruce-Page Government. The Leader of the Opposition (Mr. Scullin) has moved au amendment that the item be reduced by £1. I often wonder what would happen if in such circumstances a government reduced its Estimates by £1. According to parliamentary usage, if the committee affirms that one item in the Estimates is wrong it declares in effect (that the Estimates as a whole are wrong. Therefore the carrying of an amendment that a proposed vote be reduced by £1 is, in reality, a declaration of want of confidence in the Government. I cannot support the amendment, because I am not willing to support any no-confidence motion moved by the Leader of the Opposition or any other member of the Labour party. If a no-confidence motion were carried, and a change of government resulted, our experiences during the two years that the Scullin Labor Government was in office, would be repeated. Since that Government's defeat conditions in Australia have improved. The budget before us is a good one, in that instead of hindering progress by reducing expenditure here and there, it removes some of the shackles from industry, and if conditions generally in Australia do not improve as a result, then I shall fear for the future of this country. But I am confident that the removal of some of the shackles from industry will bring about improved conditions. Already there is a. better tone in the community; the outlook is more hopeful and people no longer feel that they are working merely for the Government. 3449 KF9 ALP; FLP from 1931; ALP from 1936 0 0 GREEN, Albert Mr A GREEN - The wheat-farmer is worse off than ever. 3449 KIO 0 0 HUNTER, James Mr HUNTER - When the bills dealing with the separate matters of wheat, pensions, &c, are introduced, I shall Lave something to say upon them. The chief object of this amendment is to have a list of names recorded in Hansard and then to say that certain honorable members by their vote on the amendment showed that they were not sympathetic to the wheat farmers, the pensioners and others. Copies of Hansard will be circulated throughout the country to show how members voted on the amendment. The electors of Maranoa know where I stand on these subjects. The intention of the amendment is to mislead some of the more ignorant pensioners, who do not understand the forms of this chamber, to think that the carrying of the amendment will mean that from to-morrow the pension will be restored to £1 a week. If propaganda of that sort were successful it would simply result in the defeat of one government at the elections and the substitution of another. But- it would be wrong to encourage expectation that any of the objects stated in the amendment could be achieved. Recently 1 have read a number of speeches in which the speakers have promised that pensions will be restored to £1 a week " as soon as possible." I am prepared to go further than that. I promise that, as soon as possible, pensions will be raised to £25 a week. In making that promise I am not less sincere than some who promised a restoration of the pension to £1 a week as soon as possible. I do not imagine that any member of the committee, other than members of the two branches of the Labour party, will support the amendment. 1 shall not support it, for I realize that this country does not want a repetition of its experiences under a Labour administration. 3449 JPP Franklin 0 0 BLACKLOW, Archibald Mr BLACKLOW .- I cannot support the amendment moved by the Leader of the Opposition (Mr. Scullin). On1 the contrary, I compliment the Government on the budget it lias placed before us. Relief from taxation at this juncture is most opportune, and will have a far-reaching effect. Trade and industry will be stimulated and, in turn, unemployment will be diminished. The taxpayers of this country have been labouring under a. heavy burden of taxation and some measure of relief is long overdue. The budget promises more money to wage earners and pensioners alike, while interest charges will be automatically reduced. Just as a reduction of import duties, or of the sales tax, results in a lowering of the price of commodities, so a remission of taxation reduces interest charges. It is cheering to know that the Commonwealth is able to balance its budget, but we must have regard also to the position of the States. Unfortunately, New South Wales is the only State in a position to follow the lead of the Commonwealth. The prospect of a reduction of the excessive taxation of the past three years is gratifying. Unless that relief is given in the near future certain of our industries will collapse. By subjecting primary producers to excessive taxation governments have been killing the goose that lays the golden eggs; for excessive taxation maintains high rates of interest, which is the greatest burden On the man oh the land, as it destroys his assets and, consequently, his spending power. It is all very well for honorable members opposite to talk about legislating a country into prosperity. That policy will not get us far. In my humble opinion the experiment that is now being carried out by the United States of America through the medium of the National Industrial Recovery Act should be watched by us with grave concern, for should it fail the reaction will be detrimental to the whole world. I am pleased that the Government proposes to reduce sales tax and, in respect of some commodities, to lift it entirely. The sooner it is abolished the better it will be for industry, for no other tax is so far-reaching and unfair. The act is most difficult to administer, and many firms have had to employ additional clerks to prepare the returns that are required. I believe that this tax is retarding industrial recovery far more seriously than is generally imagined. On more than one occasion I have drawn the attention of the Government to the sales tax charged on certain items, which it penalizes most unfairly. I again mention carbide, which has to compete with electric light, gas and kerosene, sources of power on which no sales tax is charged. It is pleasing to me that the Government has reduced this tax on drugs, chemicals, and invalid foods, but here again an anomaly exists, for sales tax is charged on "Bourn-vita", a splendid food for invalids, which is manufactured largely from milk and eggs. The outlook of our primary industries is not at all encouraging. During the past few years the great wheat industry has had to appeal to the Government for assistance, for which purpose a sum of from £5,000,000 to £6,000.000 has been appropriated. 3450 KX7 0 0 WARD, Edward Mr Ward - The honorable member does not believe in government interference with private enterprise. 3450 JPP 0 0 BLACKLOW, Archibald Mr BLACKLOW - 1 do not, but in times like these it is imperative that the Government should help our key industries to tide over their difficulties. I am certainly opposed to the extreme tariff policy of honorable members opposite, which is contrary to Labour principles. A sum of £15,000 was appropriated in the Addition, New Works and Buildings Estimates, with which we dealt last week, to purchase a vessel to make a survey of Australian waters for the purpose of developing the fish industry. Although the sum is a small one, I believe that the Government would have been wiser to save it and concentrate on the development of established industries. The opportunity exists "for the scientific development of the meat industry in the Northern Territory, a matter which the Government would do well to consider. Unhappily, the fresh-fruit growers of Australia are in a precarious position. Anybody who has read recent press reports must have noticed that the prices realized on the London market for our fresh fruits are uneconomic and disastrous to the growers. The Government insists that fresh fruit exported shall be of a specified standard of excellence; yet, despite the high quality of their products, Australian growers have averaged only 3s. or 4s. a case for apples and pears. These prices have involved them in a loss of hundreds of thousands of pounds. As an employer of labour, the fresh fruit industry is of far greater importance than the wheat industry, which, in recent years, we have assisted to the amount of between £5,000,000 and £6,000,000. On the average farm, a man and a boy can put in and take off anything from 200 to 300 acres of wheat, whereas small areas devoted to fruit-growing provide employment for a large number of workers. In the apple industry the estimated cost of cultivating, growing, spraying, manuring, pruning, picking for market, carting to shed, and providing for interest, rent, rates and insurance is 2s. 6d. a bushel. Cases cost Hd. each, local freight is 4d., and shipping fees, levy and insurance, amount to 3|d., while grading, sorting, wrapping, labelling, stencilling, strawboards and woodwool cost 9d., making the total minimum cost to the grower of 4s. 6d. a bushel. Last year, Tasmania exported 3,282,514 cases of apples and pears. On a production basis of 3,000,000 cases, the total costs amount to £S65,062j made up of the following items Wrapping paper, £17,362 ; nails, £5,532 ; woodwool, £3,036 ; strawboards for lining of cases, £10,800; manure, estimated cost £2 an acre, £37,61S ; spraying, estimated cost £2 10s. an acre, £47,022 ; cases, £93,750; freight to United Kingdom, £618,750; local freight, £50,000. It must be obvious to honorable members who have any knowledge of the industry that, unless prices in the British market improve very substantially, the fresh fruit growers in this country will be faced with disaster. It is absolutely essential for the Commonwealth Government to give immediate assistance to them, because if the industry collapses, the effect on employment in all fruit-growing areas will be disastrous in the extreme. Hundreds of persons find seasonal employment in the Huon fruit-growing district. If the Government cannot see its way clear to help our fruit-growers as it has helped the wheat industry, those engaged in it will suffer a setback from which it will take them years to recover. The present position is absolutely uneconomic* I sincerely trust that the Government will bring forward proposals for giving immediate assistance to this industry. I notice that it has set aside the sum of £125,000 for the reduction of freights, but that will not be sufficient. The industry is in such a desperate plight that the majority of growers will be unable to carry on unless something is done immediately to help them. 3451 KJQ Hunter 0 0 JAMES, Rowland Mr JAMES .- I SUp.port,the amendment moved by the Leader of the Opposition (Mr. Scullin), and agree with much of his criticism of the budget. The Postmaster-General (Mr. Parkhill) dealt somewhat severely with the honorable member for West Sydney (Mr. Beasley), the leader of the party to which I belong.- Times out of number my leader has enunciated the principles for which we stand, and out of respect to the committee, and because he did not wish to weary honorable members this afternoon, he did not reiterate in detail proposals which we believe are necessary for the restoration of prosperity to this country. The statement of the Postmaster-General, that benefits from the remission of the taxation will accrue to all sections of the community, is quite misleading, because this budget definitely benefits the wealthy section of the community at the expense of the working classes. It is, in effect, -a rich man's budget, and doubtless will bring much joy to big business sections, which will benefit by remissions of taxation to the amount of £7,490,000, plus the November remissions, £2,100,000,. making the total relief granted to the wealthier people of this country £9,590,000. Of course, they will hail the Prime Minister and members of this Ministry as the saviours of the big financial institutions. We are told that the Go.vernment proposes to make available £1,178,000 for the relief of unemployment. Contrast this amount with that which it is proposed to remit to the representatives of big business, and it will be seen what little regard the Government has for the unemployed. Although the electors were exhorted to vote for honorable members opposite, with a view to securing permanent employment at reasonable rates of wages, unemployment has declined to only a slight extent since the present Govern^ment assumed office, and a large number of men have been absorbed on temporary relief work and are not getting even the basic wage. According to the budget, the figure has. been reduced by only 2.4 per cent, since a remission of taxation to the amount of £2,100,000 was made last year. It would be interesting to calculate the remission that would be needed to place industry in a condition to absorb the whole of the unemployed. When the Scullin Government left office Australia had a favorable trade balance of £33,000,000, but as a result of the removal of the restrictions placed by it on imports, the balance in our favour has already been reduced to £19,000,000, and if the present rate of decline be continued, the position will again be reached that faced the last Government upon -its assumption of office, when there was an adverse balance of approximately £60,000,000. Instead of creating employment, the effect of such a condition would be to close down the industries of this country. The claim of the Government, that a large number of men who were formerly out of work have been placed in permanent employment, cannot be sustained, because the majority of them are engaged on temporary relief work which has been substituted for the dole. Although it was elected to balance budgets, and promised to do so, the Government is deliberately budgeting for a deficit this year of £1,176,000, and one next year of £3,620,000, a total of £4,848,000. Is that honest finance? At the last elections the present Prime Minister was acclaimed as the man who would lead Australia out of bondage into the promised land of prosperity. So far, however, that prosperity has not been realized, except by a small section of the community which is to get the benefit of taxation remissions. It is argued that the whole of the people will benefit, and that industry will begin to move, as the result of the present budget proposals. Any such improvement will not necessarily be due to this budget, for in the United States of America industry has already made a step forward. The real difficulty with which the world is confronted to-day is the absence of markets to absorb what industry produces. Industry has reached such a standard of efficiency since the advent of machinery that human power has been largely displaced, with the result that one half of the people has to be taxed to keep the remainder in idleness. A solution of the problem by the national control of credit and a shortening of the hours of labour has been propounded time after time by -the group of which I am a member, and I do not propose to occupy the time at my disposal in reiterating it for the benefit of those who refuse to understand what it means. They realize, of course, that it would affect the pockets of those who pay their election expenses and dictate their policy. The present Government severely condemned the former Premier of New- South Wales, Mr. Lang, for having adopted a certain attitude in regard to overseas debts; yet it has made no provision for a war debt of £80,000,000, the interest on which amounts to £4,900,000 per annum. The Treasurer cheerfully assumes that payment of this interest will not be required. In the first place, the United States of America suspended for twelve months the interest payments due to it by the United Kingdom. The British Government in turn extended that concession to Australia. Later the suspension was extended, but there is no guarantee that that policy will be continued. The stand taken by Mr. Lang was that interest should not be sent overseas at the expense of widows and orphans, and of those who were unemployed. 3452 JUD 0 0 DEIN, Adam Mr Dein - He refused to pay it. 3452 KJQ 0 0 JAMES, Rowland Mr JAMES - He did not; he said that he would suspend payment until interest was reduced. This callous Government threatened to confiscate all deposits of the Now South Wales Government in the banks, with the result that it could not pay for its social services. When this Government could not defeatMr. Lang with financial enforcement legislation, it prevailed upon the State Governor to dismiss him; but he went out of office with his principles intact. Instead of making remissions of taxation, the Government would be better advised to increase the payments to the sinking fund, for the ultimate liquidation of our colossal indebtedness of £1,100,000,000. The Premiers plan, to which Mr. Lang refused to subscribe, was in substance the same as that put forward by Sir Otto Niemeyer. By refusing to accept this plan, Mr. Lang stood forth as the champion of the downtrodden masses of the community. He obeyed the injunction of Christ, who said, " Feed My lambs, feed My sheep ". The Commonwealth Government demanded that he should sacrifice the people in the interests of the overseas bondholders. It was said that if he did not pay the full interest rate on borrowed money, it would prejudice Australia's credit overseas, and bring disaster on the country, but it is becoming increasingly evident that the country would have been better off had Mr. Lang's policy been put into operation. We now have the spectacle of many countries adopting the very policy which he enunciated. Some of the things which the Government proposes to do were long overdue, and this applies particularly to the sales tax. It would never have been necessary to impose this tax, or to adopt many of the other measures which were part of the Premiers plan, if the members of this group had been listened to in 1931, when the plan was introduced. If our proposal for reducing to 3 per cent. the interest on bonds had been accepted, the Labour party would have been saved, and there would have been no need to reduce pensions or to cut the salaries of public servants. However, our suggestion was not accepted, and we, in common with the rest of the Labour party, had to bear thebrunt ofwhat happened. The Government has not dealt fairly with the pensioners, who have made greater sacrifices than any other section of the community. Their contributions towards balancing the budget amount to 5s. in the £1 of their income. The present Prime Minister said, at the time the Scullin budget was brought down, that he would support the restoration of the pension and salary cuts at the earliest possible moment. Not long after that he became Prime Minister, but instead of restoring pensions, he further reduced them by £1,180,000. Nevertheless, when, a month after, his budget was introduced, it showed a surplus of £2,781,000, practically the amount he had expected as a deficit. If he really meant whathe said about restoring the pension cut, he should have given it buck straight away, instead of waiting twelve months. Even now the Government, is giving back only £635,000. 3453 KXQ 0 0 PARKHILL, Robert Mr Archdale Parkhill - That is not a bad donation. 3453 KJQ ALP; LANG LAB from 1931; ALP from 1936 0 0 JAMES, Rowland Mr JAMES - No ;but it is not comparable with what other sections are to receive. The Government should have done justice to the pensioners before remitting taxation.Up to the present the pension cuts amount to £2,905,000, of which £1,725,000 was taken by the Scullin Government in June, 1931, and £1,180,000by the Lyons Government, in October, 1932. This amount includes £480,000, which was given up by 12,074 pensioners who surrendered their pensions rather than sign the iniquitous Form 43. In the terms of this form, the pensioner, in consideration of the payment of a pension, undertook that he would not at any time thereafter transfer or mortgage any real or personal property of which he was then the owner, or of which he might thereafter become the owner, without the prior consent in writing of the Commissioner of Pensions. 3453 KNP 0 0 MAXWELL, George Mr Maxwell - Is it not a fact that the pension was never intended for people who are the owners of property? 3453 KJQ 0 0 JAMES, Rowland Mr JAMES - I dispute that, because, when the pensions bill was introduced in 1908, it was expressly stated, as the honorable member for Darling Downs (Sir Littleton Groom) reminded the House not long ago, that the pension was given as a right, and was not to be considered as a charitable payment. Even after restoring £635,000 to the pensioners, as the Government proposes to do, there will remain abalance of £2,340,000, of which they have been deprived. That must be given back to them, and we must also abolish the objectionable provision relating to the confiscation of pensioners' property. The pensioners have already made sufficient sacrifices, and they should not be called upon to contribute anything further. The Government does not seem to realize fully the sacrifices that the old age and invalid pensioners made when they were assisting in the development of this country. Some people contend that it is only right that the Government should have a lien on properties of persons who receive pensions. It would be interesting to know the amount of money which the Government has received from the estates of pensioners who have died. Several claimsby the Government for refunds of pensions have passed through my hands, and in some instances money has been extracted from persons who could ill afford to pay it from the estate of a deceased pensioner. The legislation providing for the taking over by the Government of the homes of aged and infirmpeoplo is iniquitous. Why is it not applied to retired judges, army officers, and others who receive substantial pensions from this country? Why should they not be placed in the same category as industrial workers, who have assisted in the development of this nation and reared children who are assets to the country? Why should they be the only people to have their properties confiscated under the financial emergency legislation? I would support the Government if the estates of all people reverted to the Grown. There should he no discrimination between one section of the community and another in respect of the conditions under which pensions are paid. Many a son, when building a home for his widowed mother, has placed it in her name. There is no provision in the act to meet such cases, and consequently many widowed mothers have refused to take the pension. We have to remember that love and sentiment are associated with family life, particularly in respect of the home . in which children have been born, and when the home is in danger of reverting to the Crown, the children may, in their endeavours to save it, deprive themselves of many necessaries of life, especially if they are asked, as beneficiaries under the will of their deceased parent, to refund the amount of pension received since the 12th October, 1932. The provision for the confiscation of properties of deceased persons is a disgrace to the statute-book of Australia. This method of gaining revenue is worse than highway robbery. 3454 10000 0 0 BELL, George The CHAIRMAN (Mr Bell - The honorable member is not in order in referring to an act of Parliament in such tenms. 3454 KJQ 0 0 JAMES, Rowland Mr JAMES -Even Ned Kelly would not have resorted to the despicable tactics adopted by this Government. TheCHAIRMAN- The honorable member'sremarks are out of order. 3454 KJQ 0 0 JAMES, Rowland Mr JAMES - Another iniquitous provision of the act is that which assesses against thepension property that is non-revenue producing. In many instances aged people who have property other than the house in which they live, have their pensions reduced by£1 a year for every £10 of property value in excess of £50, or are debarred from receiving a pension if the property exceeds £400 in the case of a single person, or £800 in the case of married pensioners, irrespective of the fact that the property may be occupied by an unemployed person who is unable to pay rent. The act should be amended to provide that,here the property is non- revenue producing it should not be assessed against the pensioner. Another anomaly in the act is the provision by which the property of husband or wife is deemed for pensions purposes to belong to both. It frequently happens that an aged or infirm couple live apart, and the man may find that the property of his wife is assessed against him even though he is penniless. While visiting Young during 'the last State election, a decent and respectable old gentleman, who was living in a tent, questioned me regarding his eligibility for a pension. He said that his wife had property. I told him that in order to qualify he would have to obtain a legal separation from his wife, and that if he could persuade her to sign a document to that effect he would have no difficulty in getting a pension. His wife was living at Randwick, where she had property to the value of about £2,000. She had a good business which gave her an incomeof at least £8 a week. I asked her to sign the statement; she refused to do so, saying that she would rather leave the old b- to rot. That woman had been living apart from her husband for twenty years; yet, for pension purposes, her property was deemed tobelong to both. 3454 JUD 0 0 DEIN, Adam Mr Dein - Why did not the honorable member advocate an alteration of the act some years ago when the Labour party was in power? 3454 KJQ 0 0 JAMES, Rowland Mr JAMES - Because this provision is being applied more harshly under the administration of this Government than ever before. Another case which has been brought under my notice was dealt with by the honorable member for Reid (Mr. Gander). A woman deserted her invalid pensioner husband six years ago and lived with another man. In January last, the pension of her husband was reduced by 2s . 6d. On his behalf the honorable member for Reid made representations to the Pensions Department andwas informed that, because the wife was living with another man and receiving free lodgings, half the value of such lodgings was deemed to belong to the husband and his pension was on that account reducedby 2s.6d. The pensioner could see that the joke was against him, and he said to the honorable member forReid, "If my wife's lover gave her £2 a week, half of it could be debited against me, and I would get no pension at all.Wouldn't I be stiff if my wife had twins, and half of the liability in respect of them also was debited against me?Relief should be given in such cases of hardship. If the income of a woman living an immoral life can be assessed against her husband from whom she is separated, then it is time the act was amended. The Prime Minister madeno reference in the budget to the sacrifice required of expectant mothers to assist to balance the national budget, although he has declared that the financial burden has been equitably distributed. The fact that the death rate prior to the payment of the maternity allowance was higher in Australia than in any other country, and that since 1912 it has been lower than elsewhere, is proof that great benefit has resulted from the payment of £5 to ensure that mothers shall be provided with proper medical attention at the most critical time of their lives. It was wrong to reduce the allowance to £4 and to place it on a charitable basis, withholding the payment if the income of the family is £208 or more per annum. I ask leave to continue my remarks. [Leave granted.] Progress reported. 3455 Adjournment Garden Island Dockyard: Compensation to InjuredEmployees. Motion (byMr. Lyons) proposed - That the House do now adjourn. 3455 JWE Corio UAP Assistant Treasurer 1 0 CASEY, Richard Mr CASEY . - On the 4th October last the honorable member for West Sydney. (Mr. Beasley) drew attention to steps taken by the Garden Island naval authorities in workers' compensation cases, in which the cost of medical treatment of injured employees is not paid by the Commonwealth when the employee is entitled to free treatment as a member of a lodge or benefit society. Under section 11 of the Commonwealth Employees Compensation Act the Commonwealth assumes liability up to the limit of £100 for the cost of such medical, hospital and surgical treatment in relation to the injury as is, in the opinion of the Commissioner, reasonably necessary. The liability so assumed is a liability towards the employee or his dependants, as the case may be, and the Commonwealth has no liability to third parties for the cost of such treatment. The Attorney-General's Department has advised the Commissioner that where an employee is entitled as a member of a lodge or benefit society to receive such treatment and is under no liability to pay the doctor for it, the Commonwealth also has no liability in respect of it. If, however, circumstances were to necessitate the attention of a specialist or any other practitioner from whom the employee, as a lodge member, is not entitled to free treatment, the Commonwealth would meet the charges of that medical treatment, subject to the limitations imposed by section 11 of the act. The restriction referred to by the honorable member applies only in cases where the injured employee receives medical or hospital treatment without 'charge by reason of his membership of a lodge or benefit society. Question resolved in the affirmative. House adjourned at 11.8 p.m. 3455 ANSWERS TO QUESTIONS The following answers to questions were circulated: - 3455 3455 KF9 ALP; FLP from 1931; ALP from 1936 0 0 GREEN, Albert Mr A GREEN asked the Treasurer, upon notice - Whether the Commonwealth Government has yet made available to the State of Western Australia the £100 which was the share of that Stale in the £5,000 that was to he devoted to assisting the banana industry? 3455 F4O UAP 1 0 LYONS, Joseph Aloysius Mr Lyons - Yes. The amount mentioned, viz., £.100, was paid to the Government of Western Australia in July last. 3455 3455 KFE 0 0 GREGORY, Henry Mr Gregory asked the Prime Minister, upon notice - Does the Government approve of a method adopted by some manufacturers whose products are protected by tariff impostsor assisted by bounties, insisting upon fixing the minimum price at which retailers may sell their products? Does it accept the policy enunciated by the Minister for Trade and Customs that this minimum retail price fixing is not a restraint of trade, and that the fixing by the Manufacturer of a minimum retail selling price is in the interests of the consumers? Is it a fact that certain manufacturers, whore industries are highly protected, impose penalties on any retailer selling at less than the price fixed by the manufacturer? 3456 F4O UAP 1 0 LYONS, Joseph Aloysius Mr Lyons - The answers to the honorable member's questions arc as follow: - The Government does not consider that it is called upon to approve or disapprove of methods of distribution or of trade discounts adopted by Australian industries. Any allegation made to the effect that consumersare being exploited by protected industries will at all timesbe investigated, and in cases of proved exploitation suitable action will be taken. I am not aware that the Minister for Trade and Customshas enunciated such a policy. See answer to 1. 3456 3456 KF9 ALP; FLP from 1931; ALP from 1936 0 0 GREEN, Albert Mr A GREEN asked the Prime Minister, upon notice - In view of the fact that it was found necessary togrant the wheat-growers of Australia 4½d. per bushel bounty for the season before last, and 2s.6d. per acre for every acre sown in crop for the last season; and as wheat is a lower price to-day than it was last year at this period of the year, will he make a declaration immediately of the amount of bounty to be made available to the wheat-growers for the coining season? 3456 F4O UAP 1 0 LYONS, Joseph Aloysius Mr Lyons - As the honorable member is aware, it is not the practice to disclose govern ment policy in answer to a question. The honorable member may rest assured that the Government is giving the closest attention to all aspects of the wheat position. 3456 3456 KYH 0 0 PRICE, John Mr Price asked the Treasurer, upon notice - In connexion with the exemptions from the operations of the sales tax,has the Government overlooked the question of milk bottles, and wads for sealing? If so, will the Government reconsider placing on the exemption list milk bottles, and wads for sealing? 3456 F4O UAP 1 0 LYONS, Joseph Aloysius Mr Lyons - The matter has been under the consideration of the Government, but exemption was not deemed to be justifiable. 3456 3456 KXY UAP 1 0 PERKINS, John Mr Perkins . - On the 5th October, the honorable member for Kalgoorlie (Mr. A. Green) asked, upon notice, whether arrangements could be made for Mr. H. C. Brown to visit Thursday Island and Broome, before ho returns south, in order to confer with pearlers in connexion with the problems facing the pearling industry. I am now in a position to advise the honorable member that I have been in touch with Mr. Brown who advises that he has already conferred with the pearlers in Darwin, and proposes to meet the pearlers at Thursday Island on the 17th of this month, on his return voyage to Canberra. The question of sending Mr. Brown to Broome will receive consideration in the light of the report which he submits on his return to Canberra. 3456 3409 KZR UAP 1 0 WHITE, Thomas Mr WHITE . - Last week, the honorable member for Wakefield (Mr. Hawker) asked whether the reduction of 2s. 6d. per gallon in the excise on fortifying spirit applies to that portion of the excise collected for general revenue purposes, or whether the whole or part of it applies to that portion which is paid into trust fund. I can now inform the honorable member that sub-section 3 of section 4 of the Wine Bounty Act 1930 requires a sum equal to 5s. per gallon to be paid into the trust fund, therefore the reduction of 2s. 6d. per gallon will be from the proportion of the excise colleted for general revenue purposes.