1932-02-18 13 1 1 SENATE 37 0 Senate. 1932-02-18 The President (Senator the Hon. W. Kingsmill) took the chair at 3 p.m., and read prayers. 37 miscellaneous The following paper was presented: - Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinance No. 1 of 1932 - Motor Traffic. 37 miscellaneous 37 10000 0 0 KINGSMILL, Walter The PRESIDENT (Senator the Hon W Kingsmill - Pursuant to Standing Order No. 28a, I hereby nominate Senators W. Carroll, M. R. O'Halloran, H. J. M. Payne, B, Sampson, and M. Reid a panel to act as Temporary Chairmen of Committees when requested so to do by the Chairman of Committees, or when the Chairman of Committees is absent. 37 miscellaneous 37 10000 0 0 PRESIDENT, The The PRESIDENT - Pursuant to Standing Order No. 38, I hereby appoint the following senators to be a Committee of Disputed Returns and Qualifications: - Senators J. B. Dooloy, R. D. Elliott, J. E. Guthrie, A. A. Hoare, M. R. O'Halloran, H. J. M. Payne, and W. G. Thompson. 37 Questions 37 37 KNF NEW SOUTH WALES NAT 0 0 MASSY-GREENE, Walter Senator GREENE - Information is being obtained and will be furnished as soon as possible to Senator Guthrie in connexion with questions on notice by the honorable senator relating to the Federal Land Tax. 37 37 K09 0 0 PAYNE, Herbert Senator PAYNE asked the Minister representing the Minister for "Works, upon notice - Is it the intention of the Government to make provision for the erection of a now building for the Commonwealth Bank at Hobart, and, if so, when can it be expected that the building will be ready for occupancy? 38 KTR UAP 1 0 MCLACHLAN, Alexander Senator McLACHLAN - The question of the erection of Commonwealth Bank premises is a matter which comes wholly under the control of the Commonwealth Bank authorities, who are, I understand, at present giving consideration to a proposal for the erection of a building in Hobart. I am not in a position to state whether such proposal will be proceeded with. 38 38 KNF NEW SOUTH WALES NAT 0 0 MASSY-GREENE, Walter Senator GREENE - Information is being obtained in reference to questions asked by Senator E. B. Johnston relating to the Moscow News. 38 38 KP8 0 0 JOHNSTON, Edward Senator E B JOHNSTON asked the Minister representing the Postmaster-General, upon notice - Hasa publication entitled The Soviets To-day, which is the official organ of the Australian section of the Friends of the Soviet Union, applied for registration for transmission through the post us a newspaper? Is this journal devoted to communist and revolutionary propaganda? Has the application, if any, for registration been approved? 38 KTR UAP 1 0 MCLACHLAN, Alexander Senator McLACHLAN - Application for the registration of the journal for transmission through the post as a newspaper was made but not approved. The publication in question has been prohibited from transmission by post. 38 KP8 0 0 JOHNSTON, Edward Senator E B JOHNSTON asked the Minister representing the Postmaster-General, upon notice - Has a publication known as the Red Leader applied for registration for transmission through the post as a newspaper? Does this publication describe itself as the official organ of the minority movement and of the Australian section of the Red International ? Is this publication headed very prominently with the Soviet emblems, the sickle and the hammer? Were the available copies of the first issue of this publication seized and destroyed by the Government owing to their seditious and revolutionary contents? Has the Government decided to give this publication the benefits of registration as a newspaper? 38 KTR 0 0 MCLACHLAN, Alexander Senator McLACHLAN - The answers to the honorable senator's questions are as follow: - Yes. Yes. Yes. No; but the posted copies of one issue of the journal were destroyed by the department, as examination of the contents revealed an infringement of the laws of the Commonwealth. No. 38 38 KP8 0 0 JOHNSTON, Edward Senator E B JOHNSTON asked the Minister representing the Attorney-General, upon notice - Is it a fact that great expense and inconvenience are caused to litigants resident in Western Australia owing to the suspension of the visits of the High Court to that State? Can the Minister ascertain when the visits of the High Court to Western Australia will be resumed? 38 KTR UAP 1 0 MCLACHLAN, Alexander Senator McLACHLAN - The answers to the honorable senator's questions are as follow: - To a certain extent, yes. The alterations in the sittings of the High Court were made on financial grounds. It is not possible to make any statement on this matter at the present time. 38 38 KP8 0 0 JOHNSTON, Edward Senator E B JOHNSTON asked the Minister representing the Postmaster-General, upon notice - What action has been taken in regard to the removal of Broadcasting Station 6WF to the new site on the Wanneroo-road, near Perth ? When will this new station be opened for broadcasting? 38 KTR UAP 1 0 MCLACHLAN, Alexander Senator McLACHLAN - The answers to the honorable senator's questions are as follow: - The transmitting equipment is being manufactured, and the necessary steps have been taken for the erection of the building. It is impracticable to fix the opening date until the installation is complete and the testing work well advanced. 38 KP8 0 0 JOHNSTON, Edward Senator E B JOHNSTON asked the Minister representing the Postmaster-General, upon notice - Is the Minister in a position to announce when the new broadcasting station approved for erection at Katanning, in Western Australia, will be put in band? 38 KTR 0 0 MCLACHLAN, Alexander Senator McLACHLAN - The erection of additional broadcasting stations is dependent upon the availability of funds, and it is not possible at present to say when further work will be undertaken. 39 39 JZD NAT; UAP from 1931 0 0 FOLL, Hattil Senator FOLL asked the Vice-President of the Executive Council, upon notice - Has the Minister any recent information as to the progress being made in Europe in relation to the hydrogenation process of extracting power fuel from coal? 39 KTR UAP 1 0 MCLACHLAN, Alexander Senator McLACHLAN - Since his return from abroad early last year, when he investigated the position in regard to the hydrogen a ti on process for the extraction of" oil from coal, Dr. Rivett has maintained close touch with the position abroad. The present indications are that, although the prospects of success appear to be promising, further experimentation and investigations are necessary before it will be possible to say whether the process can be applied economically in Australia. 39 39 JTL 0 0 DALY, John Senator DALY asked the Minister representing the Attorney-General, upon notice - Is lie prepared to lay on the table of the Senate or make available to senators the file relating to the conflict between the Government of. the Commonwealth and that of the State of South Australia arising out of the regulations enacted by the said State Government re the employment of waterside workers in such State? 39 KTR UAP 1 0 MCLACHLAN, Alexander Senator MCLACHLAN - The file containing the correspondence between the Prime Minister and the Premier of South Australia, will he laid on the table of the Library. 39 39 KRZ 0 0 LYNCH, Patrick Senator LYNCH asked the Minister representing the Prime Minister, upon notice - Will the Government communicate with the Governments of Great Britain and New Zealand on the question of writing down the capital cost of the Nauru-Ocean Island phosphate works as a stop in the direction of a reduction of the cost of fertilizers in the Commonwealth? 39 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - The question of what action it may be possible to take to bring about a reduction of the cost of fertilizers in the Commonwealth is being looked into, and the honorable senator will be informed of the result in due course. 39 Compensation for Injuries. 39 K1Z 0 0 RAE, Arthur Senator RAE asked the Minister for Defence, upon notice - In regard to Regulation No. 160 (dated 14th January), increasing the allowance to soldiers and their dependants, has this action restored those allowances to the scale in force prior to the cuts made last year under the financial emergency legislation? If the financial position of the Commonwealth permits of this measure of justice to members of the military forces, will the Minister recommend the Government to extend similar, concessions to old-age and invalid pensioners ? 39 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - The answers to the honorable senator's questions are as follow: - Regulation 10G applies only to members of the militia forces during periods of temporary incapacitation as the result of injury on duty. The recent amendment (Statutory Rule No. (J of 1932) is to provide for the rates to correspond with those payable under the Commonwealth Employees Compensation Act 1930. The new rates are subject to reduction under the financial emergency legislation. See answer to 1. 39 leave of absence Motion (by Senator Foll) agreed to - That two months leave of absence be granted to Senator Sir John Newlands on account of ill health. 39 miscellaneous Motion (by Senator Sir George Pearce) agreed to- That on all sitting days of the Senate during the present session, unless otherwise ordered, Government business shall take precedence of all other business on the notice-paper except questions and formal motions, and except that private business take precedence of Government business on Thursday, after 8 p.m. ; and that unless otherwise ordered, private orders of the day take precedence of private notices of motion on alternate Thursdays. 39 miscellaneous Motion (by Senator Sir George Pearce) agreed to - That, during the present session, unless otherwise ordered, at four o'clock p.m. on Fridays the President shall put the question - That the Senate do now adjourn, which que» tion shall not be open to debate; if the Senate be in committee at that hour, the chairman shall in like manner put the question - That he do leave the Chair and report to the Senate ; and upon such report being made the President shall forthwith put the question - That the Senate do now adjourn, which question shall not be open to debate: Provided that if the Senate or the committee be in division at the time named, the President or the Chairman shall not put the question referred to until the result of such division has been declared; and if the business under discussion shall not have been disposed of at such adjournment it shall appear on the business-paper for the next sitting day. 40 miscellaneous Motion (by Senator Sir George Pearce) agreed to - That, during the present session, unless otherwise ordered, the sittings of the Senate, or of a committee of the whole Senate, be suspended from 12.45 p.m. until 2.15 p.m., and from 6.15 p.m. until 8 p.m. 40 miscellaneous Motion (by Senator Sir George Pearce) agreed to - That the days of meeting of the Senate, unless otherwise ordered, be Wednesday, Thursday and Friday of each week; and that the hour of meeting, unless otherwise ordered, be Three o'clock in the afternoon of Wednesday and Thursday, and Eleven o'clock in the forenoon of Friday. 40 miscellaneous 40 Motion (by Senator Sir George Pearce) agreed to - That a Standing Orders committee be appointed, to consist of the President, the Chairman of Committees, Senators Cooper, Crawford, Dooley, Herbert Hays, McLachlan, O'Halloran and Rae, with power to act during the recess, and to confer with a similar committee of the House of Representatives. 40 Motion (by Senator Sir George Pearce) agreed to - That a Library committee be appointed, to consist of the President, Senators Sir Hal Colebatch, Daly, Dooley, Elliott, Millen and Sampson, with power to act during the recess, and to confer or sit as a joint committee with a similar committee of the House of Representatives. 40 Motion (by Senator Sir George Pearce) agreed to - That a House committee be appointed, to consist of the President, Senators Brennan, Carroll, Daly, Dunn, O'Halloran and Thompson, with power to act during the recess, and to confer or sit as a joint committee with a similar committee of the House of Representatives. 40 Motion (by Senator Sir George Pearce) agreed to - That a printing committee be appointed, to consist of Senators Cooper, J. B. Hayes, Herbert Hays, Hoare, Lynch, Rae and Thompson, with power to confer or sit as a joint committee with a similar committee of the House of Representatives. 40 bill Motion (by Senator McLachlan) agreed to - That leave be given to introduce a bill for on act relating to insurance. 40 miscellaneous ADDRESS-IN-REPLY 40 Debate resumed from the 17th February (vide page 16), on motion by Senator Duncan-Hughes - That the the following Address-in-Reply to His Excellency the Governor-General's Speech, be agreed to: - To His Excellency the Governor-General - May it Please Your Excellency: We, the Senate of the Commonwealth of Australia, in Parliament assembled, desire to express our loyalty to our Most Gracious Sovereign, and to thank Your Excellency for the Speech which you have been pleased to address to Parliament. 40 JY7 South Australia 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES . - As I stated yesterday in formally submitting this motion, it is an honour to move in this House a motion affirming our loyalty to His Majesty the King. Few men could so well deserve it. His Majesty has been tested, in various ways, to the fullest degree: First of all by the strain of the Great War, later by the after-war difficulties, which in their way have been just as hard to overcome, and also by severe illness. I happened to be in England some three years ago on the day on which the King returned to London after his serious illness, and the demonstration of affection with which he was greeted was most striking. The reception, while not vociferous, was obviously heartfelt. We have good reason to be grateful that we have such a king; and I regard it as a high honour to stand here and move that we affirm our loyalty to him. The Governor-General is an essential link with His Majesty, particularly in these days when he is the King's personal representative. As to the manner of the appointment of the Governor-General I shall have something to say later in some detail; but I now pass on to the Governor-General's Speech itself. Before doing so, however, I wish to express my regret at the passing of Senator Ogden and the Hon. R. W. Foster, who formerly represented the district of "Wakefield in another place. I knew bo,th gentlemen well. Senator Ogden commanded the respect of every one who knew him. He always reminded me of an athlete, wrestling with his thoughts, and overcoming them. The late Mr. Foster was my colleague in another place for six years, until we both suffered defeat at the general election in 1928. During that period the better I knew him the more I learned to admire and like him. Passing now to happier things, I feel sure that I express the feelings of all honorable senators when I say how pleased we are to see Senator Greene in his place again in the Senate after his recent illness, and to congratulate him on again being a member of the Government. Honorable Senators. - Hear, hear! 41 JY7 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES - The Speech of the Governor-General waa commendably brief; I, too, hope to be brief in my remarks concerning it. Since the Senate met in November last an election has been fought. It is, perhaps, neither necessary nor desirable that I should say a great deal about the election itself. The Speech makes it clear that the main issue before the electors was whether Australia should follow a policy based on sound financial principles or should depart from those principles - whether we should follow, the advice of experts, or of amateurs who seek not so much to face the difficulties confronting Australia as to avoid them. We should be grateful that the people of Australia, like the people of the Motherland a few months earlier, made a decision which, in the long run, must prove to be the best for themselves. I say that in no partisan spirit. The Senate has special reason for gratification at the result of the election because of the part it played last year in moulding public opinion on important national questions. The sound principles which are to be followed in the rehabilitation of Australia are set ,out in the Governor-General's Speech. It is obvious that the Government proposes to take the advice of experts in dealing with the many matters which will come before it for decision ; and thus we may hope to find some solution of the problem of unemployment, which, I take it, every member of the Parliaments of Australia desires to see solved as quickly as possible Probably no political party - certainly not that to which I belong - has ever claimed that it i3 possible to do away entirely with unemployment. There is always a minority which is unemployable - men who do not want work. We should be grateful that their number in this country is probably comparatively few. For those who want work we all desire to do our best. The relief of unemployment is one of the greatest internal problems with which the Government will have to wrestle. On the external side for years I have been of the opinion that one of our greatest needs is greater co-operation with other countries. Every day the world is becoming smaller, so that "not only are the members of the British Empire being forced to cooperate more heartily than before, but all the nations of the world are being led to see the necessity for working together. We, in Australia, can no longer regard ourselves as an isolated unit which can do as it likes, particularly in the present state of our finances. The Speech contained a reference to the balancing of budgets. All honorable senators will agree that it is desirable that efforts to balance the budget should be taken, not only by the Commonwealth, but also by the States. In this connexion I wish to refer to the concession which was made to two States at a recent meeting of the Loan Council, held in Melbourne. When the Loan Council met it was revealed that the estimated receipts for the year would not be realized, and that, consequently, the deficits of several of the States would be greater than was expected. In the light of figures presented to the Loan Council, it was agreed to make a grant or advance to Tasmania and Western Australia. While I am not distressed at the thought of grants being made to the smaller States, I feel that it is unfortunate that our system should be so lopsided that grants should be rendered necessary, largely to compensate for the effect of certain legislation passed by this Parliament. Nov have I any desire to quarrel with the people of Tasmania and Western Australia, who have been hard hit, but I submit that it would have been better had the grants been made by Parliament rather than by the Loan Council. It is undesirable that the Loan Council should become a bargaining ground. I hope that the Leader of the Senate will have something to say on this matter. I suggest also that the making of such grants is not calculated to encourage those States which have made a determined effort to stand up to their obligations under the Premiers agreement. While not claiming every merit for South Australia, I desire to make a comparison of the taxation levied on the people of that State, and that imposed on the taxpayers of the States to "which these advances were made. According to estimates prepared by Treasury experts, the per capita taxation in South Australia is £4 2s. lOd. per annum, as compared, with £2 4s. lOd. and £2 17s. 2d. for Western Australia and Tasmania respectively. I suggest that it is unwise to assist States to meet their deficits in this way. Such action is not likely to make the people of South Australia keener to stand up to the heavy taxation rendered necessary to comply with the Premiers plan when they know that other States, whose people have not been taxed so heavily, can obtain grants from the Commonwealth Government to help them to make up their leeway. 42 K09 0 0 PAYNE, Herbert Senator Payne - Those figures, standing alone, convey nothing. Everything depends upon the ability to pay. 42 JY7 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES - I" think they may be qualified to a certain extent by local matters which may have assisted in causing the taxation. But the honorable senator surely does not suggest that when South Australia has imposed high taxation, and is going to balance, or nearly balance, its budget, whereas Tasmania has not imposed half that taxation, and is not going to balance its budget, the latter State should have its deficit made good by the Loan Council? As a matter of fact, such a policy would distinctly discourage those States which determined to adhere as closely as possible to what is known as the Premiers plan. Certainly a State would not bo encouraged to impose additional taxation if it believed that 50 per cent, of its deficit would be made good by the Commonwealth Government. I do not wish to overstress this point. I merely add that, in my judgment, it would have been far better if this assistance had been proposed by way of parliamentary grants, which could have been discussed in both Houses of this Parliament. The next point to which I desire to direct attention is the reference, in the Governor-General's Speech, to the financial position of New South Wales. I read in one of the newspapers the other day that when the announcement was made that the Assistant Treasurer (Mr. Bruce) had been appointed as one of the representatives of the Commonwealth at the Imperial Economic Conference at Ottawa., and later would go to London to act as Resident. Minister there, the Premier of New South Wales said, in referring to his own State's Agent-General in London - Wu must have there a man who will stand up for Australia, and offset the harm that may ha done by a man whose tendency is to apologi/.c for his native land. The plain fact is that we are in the regrettable position of having to apologize for our native land. And the reason why we have to apologize for it is chiefly the attitude which has been adopted by the Premier of New South Wales. It, therefore, comes very badly from Mr. Lang to talk about Mr. Bruce apologizing for Australia. There is, I think, general agreement that no other member of Parliament is so eminently suited for the particular work that has been given to Mr. Bruce as is that right honorable gentleman, not only because for years the details have been very much under his notice, but also because he is well known and liked in Great Britain, and what he says will carry great weight there. He knows the local conditions and the people. I doubt that it would have been possible to get any one whom these respects would discharge so efficiently the responsible duties which will be required of him in London. We all have- to apologize, not for the doings of Australia, in the main, but for the doings of the Leader of the Government in the senior State of the Commonwealth. 43 KUY 0 0 MOONEY, Patrick Senator Mooney - One would think that the Leaders of other Governments were white-robed angels ! 43 JY7 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES - I do not suggest that. Possibly the honorable senator who has just interjected will endeavour, later, to refute my statements, but before doing so I suggest that if he peruses the English newspapers to bc found in the Library, he will have a clearer insight into the opinion, held overseas, of the Premier of New South Wales. If a man in private life repudiates his obligations, the people with whom lie lias had dealings will have nothing more to do with him in future. The same principle applies in the case of a premier of a State. It is a fact that the Premier of New South Wales lias repudiated, and continues to repudiate, his Government's obligations. In that way, he has jeopardized the financial stability of the Commonwealth, and is doing the greatest possible harm to large sections of his own. State, which are intensely opposed to him and have been throughout. The last federal election made it quite clear that the Premier of New South Wales does not possess the confidence of his own State, and that the rest of Australia is entirely opposed to his financial policy. 43 JTL 0 0 DALY, John Senator Daly - Judging by (be Queensland election results, he must be popular in that State. 43 K0F 0 0 PEARCE, George Senator Sir George Pearce - There was no Lang candidate in Queensland. 43 JTL 0 0 DALY, John Senator Daly - And there are not many Nationalist representatives of that State here now. 43 10000 0 0 PRESIDENT, The The PRESIDENT (Senator the Hon W Kingsmill - Order! I remind the Senate that the honorable senator is a new member and is entitled to be heard in silence. 43 JY7 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES - The Premier of New South Wales does not even enjoy the confidence of the whole of the Labour party in his own State. Senator Daly said yesterday that there was only one Labour party, and that it was a solid party. It is not united, I understand, on the broad question of whether or not it admires Mr. Lang or his policy. If, as Senator Daly has suggested, it is one party, then it must be hydra-beaded, and it speaks at least with many voices. Perhaps this may also be said of other political parties, but rarely has it applied so strongly to any party as it does to the Labour party at the present time. I hope that the Government will do everything that is possible to prevent the Premier of New South. Wales from acting further to the extreme* detriment of the rest of Australia, and: thereby to the rest of the Empire, as wel as indirectly, at least, to the rest of the world. We are told in the Speech, that Mr. Latham, the Minister for External Affairs, will attend the Disarmament Conference at Geneva as a representative of the Commonwealth Government. There are few who do not wish to see the deliberations of that conference attended with the greatest success. Since there is some doubt as to the ability of the League of Nations to give effect to its decisions one should not, at this stage,- say anything which might prevent the Disarmament Conference from being entirely successful. The League has been successful in preventing trouble between member nations in what may be regarded as minor differences, and is now faced with a serious major problem - the dispute between Japan and China. I do not know whether recent events are legally describable as war, but ait all events a considerable number of people on both sides have been killed and, up to the present, the League of Nations has not been successful in preventing an extension of the trouble. We all hope that it will in the near future, because if it should fail, there will be little prospect of success at the Disarmament Conference. I suggest that it is undesirable that we should take sides in the dispute between China and Japan at the present time. There is a tendency, in the press, to criticize Japan for what is thought to be its initiative in the hostilities. 43 K1Z 0 0 RAE, Arthur Senator Rae - Undoubtedly Japan is the aggressor. 43 JY7 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES - The League of Nations is not satisfied on that point. An endeavour is now being made to ascertain the real causes of the war, but, unfortunately, these things are not so easily discoverable as one might imagine. If the League of Nations does not know what is the reason for the conflict, we in Australia cannot be certain of its cause. For the moment, there5 fore, we might very well withhold judgment, and allow the League to see what it can do. That attitude might be adopted with greater willingness in view of the fact that Japan was an ally of Australia in the late war. I believe that I am right in saying that the first contingent of Australian troops to leave our shores was convoyed by 'ships of the Japanese fleet. Let us, therefore, see to what conclusion the League of Nations can come before we arrive at a definite decision. 44 K1L 0 0 BARNES, John Senator Barnes - Judging by the last note that it sent to Japan, it would appear that there is not much doubt in the mind of the League. 44 JY7 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES - That may be so; but it still proposes to have the matter inquired into by a delegation, which may have considerable difficulty, even on the spot, in ascertaining the real cause of the conflict. There may be faults on both sides. It must be extremely difficult to live alongside a country like China, which lias been in a state of turbulence and restlessness for some years, particularly if the question of Russian incitement is involved. A consideration of this matter leads me to say that it surely should furnish an admonition to Australia to have regard to her own defences, which, while the last Government had control of affairs in the Commonwealth, were allowed to get into a deplorable state. It appeared that the Defence Department was singled out for particularly severe treatment. This is perhaps the first occasion upon which the League of Nations has been confronted with a difficulty that it has been unable to surmount, but as the trouble has occurred on our side of the globe, we would be well advised to realize the necessity for seeing that our Defence Department is placed on a proper basis. I feel sure that the Minister for Defence (Senator Pearce) realizes the importance of taking every step that will make for our future safety. On the question of trade reciprocity I do not propose to say very much to-day. There are many people who believe that tremendous advantages can accrue to Australia without her being called upon to forgo anything. That will be found not to be the case; it will be as much a question of " give ", as it will be tff " take ". Only disappointment awaits those who believe that we are to get everything without surrendering anything in return. At the last Imperial Conference, according to the ex-Prime Minister (Mr. Scullin), all of the dominions were in favour of an agreement along the lines now proposed, but Great Britain stood aloof. As a different Government is now in office in Great Britain, there is ground for hoping and believing that an agreement will be come to at the meeting which is to be held at Ottawa during the present year. On the general question of the tariff it is not easy to say very much at the present moment, because the reference to it in the Governor-General's speech is couched in rather general terms, and naturally so. I say frankly that it is not quite so strong as I should like to have seen it, and that it is hard to determine exactly what is meant. The phrase used is - " Subject to certain alterations which will be proposed ". If those alterations prove successful, well and good. It will be necessary to see what is proposed before we can be certain that the alterations are sufficiently extensive. Every honorable senator knows that the predicament of the primary producer has become in most cases almost, and in. many cases quite, impossible. That applies to practically the whole of our primary products, from the greatest to the smallest. The primary producer has been receiving wretchedly low prices, and for at least a year or two has experienced adverse seasons. In addition, he has had to contend against the general financial stringency which has had general application throughout Australia. Then also, he has been handicapped hy the tremendously high prices which, as a result of the tariff, he has had to pay for the secondary commodities that he has been obliged to purchase. In this respect, the Senate can render substantial assistance. The tariff has been pushed to a perfectly absurd point. I can assure honorable senators that for several years the farmers in practically every branch of primary production have passed through very lean times. I hope I shall find in the Senate some who feel as I do - that the primary producer is essentially the backbone of this country, and that we must make it possible. for him to carry on. Consequently, I hope that the alterations to be proposed will embrace some at least of the lines that are essential to primary production. I trust further that the duties will be considerably reduced on oregon, which vitally concerns housebuilding in at least three of the States. Within recent years they have been advanced tremendously, and they became so severe that they aroused the criticism even of members of the Labour party. 45 KOF 0 0 HAYES, John Senator J B Hayes - Is not timber a primary product? 45 JY7 0 0 DUNCAN-HUGHES, John Senator DUNCAN-HUGHES - What protection, may I ask the honorable senator, is given to the man who produces wool? Is he protected to the extent of GOO per cent, of the value of his product? Why should timber receive a protection amounting to 600 per cent, when all the taxation is borne by the wool and wheat industries? I am not a free-trader; I believe in a reasonable amount of protection, and consider that some duty may be imposed on oregon; but I cannot subscribe to such high duties as those that are at present in force. At the last election the people of South Australia voted very largely on this issue. Wherever I went in the country, I found that the tariff was becoming a more vital question than it had ever been before, simply because the people felt that they could not carry on unless the burden was somewhat alleviated. Therefore, I trust that there will be no unnecessary delay in dealing with this matter, and that the alterations which are to be proposed immediately will be substantial and not confined to a few minor items. One other thing that I hope the Government will do is to act at once upon reports of the Tariff Board already supplied. The pigeon-holes of the Customs office must be filled with reports from that board, and I suggest that it would be a very excellent thing if some of those which have been submitted during the last two years were adopted as quickly as possible without waiting for further reports upon the items covered by them. It is abundantly clear, if only from the annual reports of the board itself, that the late Government did not in quite a number of cases follow the recommendations of the board. Of course Ministers are quite within their rights in submitting to Parliament tariff schedules which differ from those recommended by the Tariff Board - that body was constituted as an- advisory board; the last decision rests with the Minister - but although the late Government may not have seen fit to adopt recommendations of the Tariff Board, it will be quite competent for the present Government to do so. I shall not touch upon the question of constitutional alterations, except to say that I hope that suggested alterations we have heard about for years past will bc made very soon. At any rate, I hope that action in this respect will not be postponed until next year. The time for constitutional reform is now over-ripe. This country is creaking and groaning under the imperfections of its constitution. I have no particular desire to be critical, but the experience of the last 30 years, and the immense development of the Commonwealth have rendered many changes necessary. I trust that a convention will be held at an early date at which the matter may be discussed as between the different States. The mere fact that State Premiers are frequently called upon to rush to and from and meet one another in Melbourne or Sydney shows how extremely difficult it is to carry on under the existing Constitution. I take it that for the next session or two the Senate will be faced, as indeed it was last year, owing to the difficulties of the country, with unpleasant tasks which it will have to perform, but I have not the least doubt that in whatever it does it will be fortified by the recent expression of opinion at the general election. With the exception of Queensland, the Commonwealth as a whole has shown very clearly what its feeling is. Apparently a revolution may be anything; it may be a violent one or a peaceful one. There is frequent talk of revolution in Australia, although I must confess I have not seen many signs of a revolutionary spirit in South Australia of late. It is merely talk, but in this connexion I came across some words the other day written by a great British historian in 1864, which it struck me might very well be taken into consideration by those who talk glibly of revolution in any shape or form. These words were - We should draw no horoscopes; we should expect little, for what we expect -will not come to pass. Revolutions, reformations - those vast movements into which heroes and saints have flung themselves, in the belief that they were the dawn of the milennium - have not borne the fruit which they looked for. Milenniums are still far away. These great convulsions leave the world changed, perhaps improved, but not improved as the actors in them hoped it would be. Those who talk of revolution would do we'll to bear in mind the history of the French revolution, and the fate of some of the leaders of that revolution. They might also remember how, for a brief time, revolution merged into the splendours - and miseries - of the Napoleonic era. It is easy to talk of revolution, but I do not think we are on the eve of one in Australia. Indeed it is abundantly clear from the result of the recent election how the promoters of any revolution would fare at the hands of the people of this country. 46 K2Z Victoria 0 0 BRENNAN, Thomas Senator BRENNAN . - I congratulate, if I may do so with propriety, Senator Duncan-Hughes on the temperateness and clearness with which he has carried out the task entrusted to him, and I rise to second the motion he 'has moved. I join with him 'completely in expressing the "pleasure and the honour I feel at being associated with a motion which expresses our loyalty to our Most Gracious Sovereign,. and thanks His Majesty's person a'l representative in Australia for the speech which he has delivered to Parliament. I also associate myself with the remarks Senator Duncan-Hughes has made upon the death since our last meeting of our friend and colleague, Senator Ogden. Coming to the Speech delivered by His Excellency the 'Governor-General, I desire to offer a few observations on a subject touched upon by the mover of the motion, the position which His Excellency occupies to His Majesty the King under the new regime. The first effects of the inauguration of the new system we witnessed yesterday when, for the first time in the history of the Commonwealth, with stately ceremony, this Parliament was opened by a Governor-General born and bred in Australia. It will not be taken I am sure as in any sense disrespectful to His Excellency the Governor-General if we consider, entirely in the abstract, the possible effects of this new regime. Of course, there as no reference to it in the speech His Excellency read, but it is suggested and, if I may say so, becomes relevant, by the very delivery -of the speech. For many years during the history, not merely of the Commonwealth .but of the constituent parts of the Commonwealth also, we have had a system binding us 'closely to His Majesty the King, our loyalty to whom we are expressing in this motion to-day; und I do not think that .any one .can say that, so far as the practical working of that system is concerned, it has ever failed us. I realize that it may he in one sense almost as improper to praise His Excellency the Governor-General as to censure him, hut we are extremely fortunate, if I may say so, again with respect, that we have among us to-day as the typical head of the nation, a man with the outstanding qualifications of our present Governor-General. The system, however, and it is that with which I am dealing, must he judged, not by its happy -accidents, but by its general tendencies, lt may he that it is a happy accident that we have had placed at our head a man with the outstanding qualifications of the present Governor-General, but it seems to me that under this new system there is a danger of the high, exalted, and impartial office of the Governor-General being in the long course of ages reduced into something of the unpleasantness 'of party politics. Parliament lays the foundation of the future, and must look into the ages. Blackstone laid it down that we should be unwilling to change our laws, and, although there is no reference in the speech to any future intention on the part of the Government in regard to this matter, I hope that it will -be recognized that the system under which we have lived up to the present time has worked admirably. It has kept us in close touch with the heart of the Empire, and has been entirely to the advantage of Australia. The one visible link which now exists between the various parts of the Empire and the heart of the Empire is the Governor or Governor-General, as the case may be, but in course of time and with the growth of a spirit of self-conscious nationhood there is a natural tendency to assert an independence which we enjoy for all practical purposes but which, perhaps, does not exist in the strict letter of the law. The presence of a Governor-General remains, as I have said, almost the sole link there is between the parts of the Empire and the heart of the Empire, more particularly since the framing of the Statute of Westminster. It is, I understand, not yet passed. That statute may have extraordinarily great consequences on the relations between the parts of the Empire and the heart of the Empire, and I commend to honorable senators an article which appeared last Monday in the Melbourne Argus, in the course of which a competent constitutional authority said - Are we losing our British citizenship? In critical situations St. Paul found his Roman citizenship stand to him like a bodyguard; and from his day to ours the; citizenship of a great empire has often proved a. priceless possession. The gift of British citizenship, valid throughout the Empire and elsewhere, has been ours from birth. It is in danger of disappearing. It rests upon British statutes, which have linen outside the reach of dominion legislation. But when the Statute of Westminster becomes law, the paramountcy of those statutes will have gone beyond recall, and each dominion will have the power to pass legislation refusing the rights of citizenship within its borders to the peoples of other dominions and of Great Britain itself, except on such conditions as the dominion law imposes. There is no theoretical limit to the severity of those conditions. When the report upon which the Statute of Westminster was founded was under discussion in the Irish Parliament, the Minister for External Affairs (Mr. McGilligun) said - A national, hereafter, of this State, if we pass certain legislation, which may be passed at any moment, will mean a person whom we admit to citizenship in this State under whatever conditions we like to impose. This is the first indication of the way in which Australians may find themselves stripped piecemeal of their present wide-ranging British citizenship, and reduced practically to the status of aliens in other parts of the British Commonwealth of Nations. As a humble member of the Senate, I venture the opinion that if the Statute of Westminster were not proceeded with beyond the stage it has now reached the people of Australia would not feel that they had lost anything. I now pass to the Speech itself, and in what I have to say I hope I shall be brief. There are some who may consider that the Speech is lacking in anything very definite in the nature of governmental proposals. 47 K1Z 0 0 RAE, Arthur Senator Rae - Hear, hear! 47 K2Z 0 0 BRENNAN, Thomas Senator BRENNAN - One of my honorable friends opposite says, "Hear, hear " ! No doubt there will be others who will adopt the view expressed in that interjection. But the very reason which would cause some honorable senators to be dissatisfied with the Speech is one, at any rate, of the reasons which causes me in a measure to be satisfied with it. I am aware that those who look to Parliaments to cure the ills of the world will think the Speech disappointing. 47 KOF 0 0 HAYES, John Senator J B Hayes - They will be disappointed, too. 47 K2Z 0 0 BRENNAN, Thomas Senator BRENNAN - That may be. As a matter of fact, I look forward to the day when the Speech of the Governor-General, at the opening of Parliament, will not contain notes of exuberance, because of the many projected measures which it discloses, but rather an apology for the fact that it has become necessary in our ever-expanding social organism to pass such legislation. I say that for the reason that every act of Parliament that is passed means some curtailment of human liberty. I am one of these who believe with Edmund Burke - whatever my friends opposite may think - that liberty is a good to be enlarged, and not an evil to be diminished. Therefore, I do not look with approval at any Governor-General's Speech - and I have in the course of my life read a great many, if I have not heard them - that contains a long list of measures. My view is that too much has been attempted by Parliaments in the past. We have attributed, in large measure, the prosperity which in the goodness of providence we have enjoyed, partly to the laws we have passed, partly to our own excellent qualities, and partly to the richness of the country which we inhabit, whereas the simple fact is that, so far as we have progressed, we have done so mainly, not because of, but in spite of the laws we have enacted. The whole tendency of our laws - and it is a growing tendency - is to restrict more and more, human liberty. I am one of those who believe that the less we restrict human -liberty the better it must be for the community as a whole. It does not follow that because, when we were enjoying prosperity, we were able to make progress in spite of our laws, we shall bc able to do so in times of depression such as those through which we are now passing. The less we attempt in the way of legislation for the regeneration of this country at this critical period, the better it will be .for the country itself. Therefore, I rejoice that the Government, true to the pledges ' which its members gave on the hustings, is not setting out a long list of panaceas for all the evils under which this country labours. There is a reference in the Speech to the fact that the New Year has opened with a healthier and brighter feeling in the community. I believe that there is such a feeling in the community. If it is so, it is quite clear that it has not arisen from anything which the Government has done, since it has not had time to do anything. If has arisen from the mere psychological fact, that a government has been returned in which the people have some confidence. It lias arisen because the people in control of industry now know where they stand. They do not say "Now we have a government which, by its legislation, will lift this country to a higher level ", but " Now we have a government which by its legislation, will not hamper us in our endeavours to lift the country to a higher level ". I believe there is very little that this Government can do to help this country forward except to exercise rigid economy in governmental affairs, and cut down the expenses of government as much as possible. I am not to be taken as suggesting that there should be dismissals of public servants or anything of that nature. Economies can be exercised without inflicting hardship on those who serve the Government, and serve it loyally; but if it should be necessary, I am sure that public servants like private citizens will be quite willing to bear their full share of whatever is required of them. The people have shown in the attitude they took to the great conversion loan, that they are prepared to make sacrifices. That being so, it is the duty of the Government to honour its part of the undertaking embodied in the Premiers plan, and carry out a policy which will succeed, as I hope it will, in very little time, in the proper balancing of budgets. It must be evident to every one that budgets' can be balanced only by increasing the national income in some way or by reducing expenditure. Every one must realize now that we have reached the limit, so far as income from taxation is concerned. Indeed I believe that what this country is suffering from at present - it may be quite necessary that it should so suffer - is the enormous weight of taxation which its citizens have to bear. I am also pleased, as I am sure every one else will be, at the passage in His Excellency's Speech which states that - My advisers, however, are satisfied that there is a general determination to adhere to the plan of financial and economic rehabilitation which has already produced a favorable effect upon the position of Australia. Like every citizen of Australia worthy of the name, I regret that one State and that the most populous- 48 KRZ 0 0 LYNCH, Patrick Senator Lynch - And the richest. 48 K2Z 0 0 BRENNAN, Thomas Senator BRENNAN - And the richest, is the one that should have failed at this critical juncture. The material consequences of that failure are bad enough, and as the Speech says, may involve the whole Commonwealth in financial disaster. But the moral consequence - if one can separate the moral from the material - may be even a great deal worse. We are lineal descendants of the British race. In these outer marches of the Empire we are entrusted with the upholding of the reputation which our forefathers across the seas have built up and maintained through the long ages, and it must have come as a painful shock to everybody of right feeling at any rate to learn that for the first time in the glorious history of the British race, the word of British people had been dishonoured. If anything we feel more humiliated by the reasons that have been put forward for that dishonouring. If in the past we have had to defend a principle or a military position, we have done so by putting men in the firing line. This is the first time it has been sought to defend a position otherwise indefensible by putting babies in the firing line. It was at the close of the Boer War that an explore Chancellor, speaking in the House of Lords, quoted some lines which are particularly appropriate to-day - In all the ills the years have brought, In all the grief we bore, We sighed, we wept, we toiled, we fought, We never blushed before. We have had some reason to blush at the course of events in the most populous and, as Senator Lynch has said, the richest State in the Commonwealth, which should have set an example to the rest of Australia but has so completely failed to do so. I am not wanting in sympathy towards that large section of the people in New South Wales who feel this humiliation as much as we do, but there is a lesson to be learned from the situation. It is only fifteen months since rival policies were put before the people of that great State. On the one hand, there was a policy which said " We have nothing to offer you. There is a road of sacrifice to be travelled and we must traverse it. Return us and we will lead you along that road in the hope that some day we shall emerge into the sunlight." The rival policy was this: "Return us and we will borrow as we borrowed before. We will complete all the uncompleted public works. We will restore all reductions that have been made in salaries." The people - speaking of the people as a whole - listened to the voice of the tempter and returned to power the man who made that promise. SenatorGreene. - He also promised to find employment for the unemployed. 49 K2Z 0 0 BRENNAN, Thomas Senator BRENNAN - And the number of unemployed has grown steadily from that day to this. The lesson to be learned is that when the way of sacrifice stands before us we must face it. We do not solve problems by evading them. We do not solve them by dishonesty of conduct or words. Unfortunately, the people of New South Wales will sooner or later have to face the position, and the sacrifices will be all the greater by reason of the fact that they did not face them when they might have done so. 49 K1Z 0 0 RAE, Arthur Senator Rae - The United Australia party made numerous promises in their advertisements. 49 K2Z 0 0 BRENNAN, Thomas Senator BRENNAN - I do not think any promises were ever so blatantly made or so flagrantly dishonoured as were the promises made by the Government which, to its discredit, at present rules New South Wales. I pass on to other items mentioned in the Governor-General's Speech. One of the things that are regarded by His Excellency's advisers as of cardinal importance is that every possible step should be taken to stimulate private enterprise. I have already indicated that private enterprise can be stimulated by a negative policy. I think that some of the restrictions placed by the law upon industry will have to be removed. I realize that some honorable senators opposite will say that I am attacking wages and am in favour of reducing the Australian standard of living. On previous occasions in this chamber I have asked what is the standard of living of the nearly 400,000 men who are walking our streets and roads, not knowing where their next meal is to be obtained. 49 K1Z 0 0 RAE, Arthur Senator Rae - We cannot improve their condition by adding to their burden. 49 K2Z 0 0 BRENNAN, Thomas Senator BRENNAN - No; but we may improve their condition by making less rigid the social system under which they live and work. An honorable senator who is no longer with us, once deprecated that employers and employed should have " an open go ". I take it that that means that honest men on the one side should be free to negotiate with honest men on the other side as to the terms upon which they shall work, and be worked for. Personally, I do not believe that any dire consequences would follow such negotiations. Many of us fail to realize the extent to which socialism has been installed in our midst, by reason of some of the provisions of the Arbitration Act. 49 JZ6 0 0 O'HALLORAN, Michael Senator O'Halloran - Is it not right to protect the honest men on both sides from the dishonest few on both sides? 49 K2Z 0 0 BRENNAN, Thomas Senator BRENNAN - Yes. The first duty of any government is to protect its citizens; its last duty is to interfere in the private relations of the honest men in all classes of the community. Senator Duncan-Hughes referred to the talk of revolution. It may be, as the honorable senator stated, that the recent elections showed the real temper of the people of Australia. Nevertheless, I remind those who are so anxious to restore prosperity to this country, that nothing is more calculated to retard the return of prosperity than is the talk of revolution and violence, which we hear in so many quarters to-day. Nothing will bring Australia back to prosperity more quickly than will confidence in the stability and honesty of its several governments. I pass by the subject of disarmament mentioned in the Speech, 'not because 1 regard is as unimportant, but because we may soon have an opportunity to discuss it in this chamber. 1 come now to two other matters which, in my opinion, are intimately connected - the Ottawa conference and the tariff. The Governor-General's Speech states - Owing to world-wide depression, the volume of world trade lias declined, and the struggle for markets is becoming still more intense. I associate myself with the previous speaker in the view that, in the event of there being a struggle for markets, we in Australia must realize that the concessions must not be one-sided. We must realize that trade is mutual; if we hope to obtain markets for our goods in other countries, we must be prepared to allow some of their products to come here. I am entirely in accord with the remarks of Senator Duncan-Hughes as to the importance of the Ottawa conference. With him I agree that something in the nature of reciprocal Empire trade seems to offer the greatest possibilities for the future. At the same time, I submit that if it is to the advantage of the several parts of the Empire to reciprocate in trade matters, it is also to the advantage of all countries to reciprocate in trade generally. Let lis, for a moment, consider our trade with France. Each year France buys from us wool to the value of about £11,000,000. Remembering the importance of wool to Australia, we ought to be exceedingly careful not to do anything which might endanger our wool trade with France. Every year Australia has to pay to other countries about £30,000,000 in interest, and only now are the people generally beginning to realize that that interest can be paid only by our exports, which are chiefly wool and wheat, together with a few other primary products. If we do nothing to discourage that export trade, I feel sure that it will look after itself. Coming now to the tariff, I notice that attempts are being made to make it appear that the tentative tariff of 1929, as amended on several occasions since its introduction, embodies Australia's protective policy, and that any one who does not accept it is making an attack on the protective system of this country. While I make no such attack, I, like Senator Duncan-Hughes, maintain that the tariff has gone to absurd limits, and has had woeful consequences to those engaged in primary production. Every economist who has spoken on the subject of the present world depression, has called attention to the effect on trade of the tariffs of various countries. That the conflicting tariffs of the world have reduced international trade almost to vanishing point is patent to everyone. All economists are agreed that consequences have resulted from high tariffs which were not foreseen by any one, and that the present condition of world affairs is largely the result of restrictive tariffs. There are some who contend that the last stronghold of freetrade has fallen now that Great Britain has to some extent surrendered her policy of freetrade. It has been stated that Mr. Neville Chamberlain was moved almost to tears at the introduction of a tariff which his father had foreshadowed early in this century. It is now submitted that the course of events in Great Britain proved that Mr. Joseph Chamberlain was right,' and that those who opposed him were wrong. In considering this matter, we must not forget that Britain has passed through the greatest war the world has known. No other country has presented such a spectacle of financial stability as has Great Britain since the beginning of the war; she financed herself and other nations as well. To-day we live in a changing world; and it may be that Great Britain has had to adopt a measure of protection in order to adjust her balance of trade. To some it may appear that the period since the close of the war has been long; but judged historically, Ave are only now suffering the effects of the war. Experience has shown that at the close of all great wars there has been a period of spurious activity, followed by a period of depression. That has happened in recent years; the spurious activity was so great that the depression has been deeper. We shall, however, live through the depression. When our representatives go to Ottawa, I hope that they will not go in a spirit of selfish bargaining. Bargaining there must be, but Australia should realize that there must be " give " as well as " take that trade must be reciprocal. We should be prepared to do what we can not only for Australia, but also for the other parts of the Empire of which we are proud to form a part. I regret to have to disagree with Senator Duncan-Hughes regarding the need for constitutional changes. I do not believe that conditions in Australia call for any serious alteration in our Constitution, either now ot in the immediate future. I submit that any apparent defects have arisen not from the Constitution itself, but from those who have been engaged to work it. In other words, the defect is not in the machine, but in the machinist. The extent to which the Constitution has apparently failed, because it has led to some ill-will within the Commonwealth, is due to the attempts made by Parliament to do too much, due, as a learned French economist once said, to the efforts of the people to convert Parliament House into the battle ground of everybody's dreams and everybody's covetousness. Take, for example, our high protective policy. When Australian manufacturers put forward proposals for high duties, do they think of Australia as a whole, or only of themselves? When the industrialists in our large cities ask for higher duties for themselves, are they thinking of the struggles of the farmers in the outback places ? Similarly, when Queensland unites to extract a sugar bounty from the rest of Australia, are its people thinking of Australia or only of Queensland? Honorable senators will recollect that the Navigation Act was the outcome of an unholy alliance, in which the shipowners said to the industrialists " Give us the coastal trade to ourselves, and you can have your arbitration awards." When that alliance was entered into, were the parties to it thinking how the Navigation Act would ruin Tasmania? 51 JRW 0 0 CRAWFORD, Thomas Senator CRAWFORD - Tasmania is a long way from being ruined. 51 K2Z 0 0 BRENNAN, Thomas Senator BRENNAN - I hope so. Tasmania is a rich country which ought to be a model of quiet prosperity. 51 KOJ 0 0 HAYS, Herbert Senator Herbert Hays - So it would be, if left alone. 51 K2Z 0 0 BRENNAN, Thomas Senator BRENNAN - I agree with the honorable senator that had Tasmania been given fair treatment by the rest of Australia, it would now be a prosperous State. Once we, as a people, learn to shape our legislation in the interests of the whole of Australia, rather than of its several parts, we shall hear less of proposals for constitutional changes. I remind those who are demanding these constitutional alterations that although the Constitution provides for its amendment, it is not possible to make any change that will not give more power to the central government. And the very persons who are calling for constitutional changes are those who object that already the central government has too much power or, at any rate, is exhibiting too much activity. When asking for constitutional changes they should bear these things in mind. There is some casual reference to the subject in the Speech and to the want of time to fully consider what amendments should be made; but while sympathizing with Senator DuncanHughes, I hope we shall not hear anything further of constitutional changes during the lifetime of this Parliament. I conclude by endorsing the hope expressed in the last paragraph of the Speech that Divine Providence may guide our country. I have every confidence that if the people of Australia will realize that we still have a great country, and that the greatest asset any country or people can have is its reputation, we shall in due time emerge from the deep depression through which we are passing. I second the motion. 51 K1L Victoria 0 0 BARNES, John Senator BARNES .- I congratulate the mover of the motion (Senator Duncan-Hughes) and the seconder (Senator Brennan) upon their successful discharge of a difficult task, namely, that of infusing a little enthusiasm into their remarks in support of the Government's policy, or want of policy. The Speech of the Governor-General is wholly lacking in inspiration. The primary purpose of such a document is to give information to the people of the legislative proposals of the Government, but the Speech delivered to the Senate yesterday contains not even a glimmer of light. It is true that it tells us that the Government intends to take certain action with regard to national finance and unemployment, which are so inter-related that they cannot be separated ; but both were receiving the earnest attention of the previous administration. The late Government brought down proposals to improve the finances of this country and to reduce unemployment. The plan to which the Government was working was the product of eminent experts representing the Commonwealth and State Governments. It had many faults, but undoubtedly it did something to put Australia into a sounder financial position, and I feel sure that, in time, it would have brought this country out of its present difficulties. That plan was working satisfactorily under the previous administration, but unfortunately, because of a hostile majority in this chamber, we were not in a position to give full effect to our policy. The present Ministry is not faced with that difficulty. Commanding, as it does, a majority in both Houses it will be able to give legislative effect to any proposal it thinks fit to bring forward. The causes which led to the change of government at the last election are explainable. The people were becoming desperate owing to the increase in unemployment. They realized that, as the Government was ham-strung in the Senate it was unable to do what it set out to do, so we may assume that they resolved to give this new Government, which boasted so much" of its capacity to pull the country out of its troubles, an opportunity to do so. I can only hope that it will manage the affairs of the Commonwealth with greater ability than was shown by the Bruce-Page Government. The present situation is a very desperate one. Our army of unemployed is increasing continuously; it has increased even since the return of the present Government to power, and despite the alleged confidence of the people in its ability to restore financial stability. 52 K2L 0 0 REID, Matthew Senator Reid - To what extent has unemployment increased since the elections ? 52 K1L 0 0 BARNES, John Senator BARNES - I am not in a position to say precisely, but I have read in the newspapers that several establishments have recently closed down. Only a day or two ago it was reported that in one industry alone there had been an increase of 3,000 unemployed persons. There is reference in the Speech to the projected mission to England of the Assistant Treasurer (Mr. Bruce), who will act as Resident Minister in London after attending the Imperial Economic Conference at Ottawa. His object, I assume, will be to inspire more confidence in the minds of those financiers in Great Britain, who sometimes oblige us with loans. I can only hope that he will be more successful than in the last year of his Government's administration when, as we know, it failed ignominiously in its attempts to raise further money in London. 52 JTL 0 0 DALY, John Senator Daly - Lang could not be blamed for that failure. 52 K1L 0 0 BARNES, John Senator BARNES - No; Mr. Lang had not then come into the firing line. It seems to me that the Assistant Treasurer is not the best emissary the Government could have selected for the purpose in view, and I am afraid that, having regard to the experience of the Bruce-Page Government, any overtures which he may make for financial assistance in London will meet with a poor response. The Government, in its effort to win the last election, placarded the country v with posters suggesting that its success at the polls would mean the end of unemployment. As a matter of fact, one election placard illustrated an army of unemployed marching back to the factories, workshops and mines, with smiling faces and hands in their pockets feeling for the money which, no doubt, they hoped to get on pay day. But this Government has not indicated any definite plan by which it will relieve unemployment. The previous administra- tration had no doubt as to its ability to finance its proposals, and it would have been successful but for the obstruction which it encountered in this chamber. One paragraph in the Speech makes mention of the cessation of Commonwealth public works and, because finance is difficult, it is proposed to abolish not only the PublicWorks Committee, but also the Public Accounts Committee, a very important body, which has rendered very useful service to the Commonwealth. Both, indeed, have done good service. 53 K2L 0 0 REID, Matthew Senator Reid - There is no works programme for the committee. 53 K1L 0 0 BARNES, John Senator BARNES - The Scullin Government had works in contemplation, and knew how to finance them. This Government has no cure for unemployment because it is unable to provide finance. No one will deny that many useful and reproductive works could be undertaken if financial provision could be made for them. How does the Government intend to absorb the growing army of unemployed? It is useless to talk about giving relief, if the means whereby it is to be given cannot be shown. The last Government propounded a certain policy, but honorable senators who now sit opposite refused to allow it to be put in operation. There is plenty of work of a profitable nature waiting to be done in Australia, but the money to carry it out must first bo found. From what source is it to be obtained? The Governor-General's Speech does not contain even the glimmer of a proposal; all that the Government apparently intends to do is to send a Minister to the Old Country for the purpose of raising a loan, despite the fact that on two previous occasions a similar application was rejected. 53 KOJ 0 0 HAYS, Herbert Senator Herbert Hays - What cure would the honorable senator prescribe? 53 K1L 0 0 BARNES, John Senator BARNES - The cure suggested by the last Government was an alteration of the financial system of this country. Had that been given effect, the Government would have been able so to arrange the affairs of Australia that sufficient money would have been available to absorb the army of unemployed in profitable public works. 53 JZD 0 0 FOLL, Hattil Senator Foll - They would have been paid with " shin plasters ". 53 K1L 0 0 BARNES, John Senator BARNES - The country is being financed with " shin plasters " at the present time, in the shape of cheques on accounts that are overdrawn. The cheque of a private individual can be described more truly as a "shin plaster " than can a fiduciary note, because it has the backing of only one individual, whereas the other has behind it the whole of the assets of the country. Honorable senators opposite argue that Australia has not sufficient internal credit to carry out any undertaking, and that it must borrow abroad. It is time that the people realized the soundness of their credit, and the wealth of their assets, and insisted upon the affairs of this country being financed without resort to the foreign money lender, from whom so many millions have been borrowed in the past that, as the seconder of the motion for the adoption of the Address-in-Reply stated, our interest commitments at the present time total some £30,000,000 a year. Until there is in office a government which recognizes the practicability of using the credit resources of the country for the financing of public works, it will not be possible to do much towards relieving the unemployed. The prices obtained for our primary products have been affected by the depression that has operated not only in Australia, but also throughout the world. We have not been able to sell our produce to other countries to nearly the extent we desired because their army of unemployed is as great proportionately as ours, and that has had the effect of lessening the purchasing power of the nations. Until the unemployed problem is solved, there will be no hope of solving the problem of prices, or any of the other problems that so acutely affect Australia at the present time. The first essential is to place at work those who wield the pick and shovel, so that they may have something to spend. They are the foundation of our social structure, and upon their stability depends the strength of the edifice that is erected. 53 K8P 0 0 THOMPSON, William Senator Thompson - Surely that is the responsibility of the States! 53 K1L 0 0 BARNES, John Senator BARNES - It is the responsibility of the whole of the people of this country . Under present conditions, I admit that it is more the responsibility . of the States than of the Commonwealth. If, however, the alterations to the Constitution that are foreshadowed are made - and in my opinion they should he - it will become the responsibility of the whole of Australia. The men who lay the foundations of the social structure of this country must be able to obtain work whenever they want it. When they cease to earn, the whole edifice must topple down. According to some authorities, the way in which loans have been made to the States of Western Australia, South Australia and Tasmania, is illegal. That may or may not be so; but in certain circumstances which could not be foreseen and provided against, a government would be justified even in acting illegally if it were necessary to prevent the collapse of any State or States. Consequently, I do not quibble at the slight measure of assistance that has been given to the States to which I have referred. The position in New South Wales for which the people of that State have been blamed- 54 K0F 0 0 PEARCE, George Senator Sir George Pearce - Not the people. 54 K1L 0 0 BARNES, John Senator BARNES - Mr. Lang is no more powerful than the majority of individuals, and cannot take any action unless he has the support of the majority of the elected representatives of the people. This, however, is a matter upon which honorable senators from New South Wales are more qualified' to speak, and to them I shall leave it. The Speech of the Governor-General lays it down that the best way to relieve unemployment is to encourage private enterprise. How is private enterprise to be encouraged when the Government will not itself tackle the problem, or release the credits that are necessary to enable employment to be provided by private individuals? 54 K09 0 0 PAYNE, Herbert Senator Payne - What credits are there to be released ? 54 K1L 0 0 BARNES, John Senator BARNES - There are many business people in this country who can tell the honorable senator what an extension of credit means. Reference is made in the Speech to the question of disarmament. There are some men in the world who strongly oppose disarmament; but it gives me pleasure to think that the great majority of the people of every country, particularly those who are called upon to do any fighting that has to be done, will welcome any steps that may be taken in that direction. They are convinced, as I am, that the greatest menace to the peace of any country is the continual building up of armaments by any nation. Such a policy, in my opinion, was responsible for the last war. This question is being closely examined by the people of the world, now that the heat engendered by the last conflict has somewhat died down and a calm review of all the circumstances is possible. Germany was blamed for the last outbreak, because for 40 years she had been building up armaments of various kinds, the argument advanced being that it was her ambition to conquer the world. I have no brief for Germany ; but I ask honorable senators to consider for a moment her geographical situation. She had on one of her borders the Russian nation, of which she was as much afraid as it was possible for one country to be of another. Upon another border, she had the Balkan States and Austria, and on the other side there was France. Consequently, she was hemmed in on all sides by nations which she considered were her bitter enemies, and a menace to the liberty and the welfare of her people. In all probability she armed in order to protect herself. This caused alarm in the minds of the people of other countries, and gave rise to the belief that there was a deliberate intention on the part of Germany to cause injury to the rest of the world. I, in common with other honorable senators, welcome the attention that is being devoted by some of the greatest < minds in the world to the possibility of doing away with what is most likely to incite trouble between one nation and another. When war occurs, people who have no animosity towards each other kill merely in order that they themselves may survive. They are hurled into the conflict without being given time to consider the consequences, and it is only when the calamity has been perpetrated that the full extent of its effect is felt. According to the Speech of the Governor-General, it is proposed to abolish the Committee of Public Accounts. I have not had the experience of working on that committee, but from what I have been told I believe that it has performed very valuable work for Australia. It may be said of the Public Works Committee that it has cost a good deal of money; but that has occurred only while it ha3 been functioning. 55 K2L 0 0 REID, Matthew Senator Reid - It saved the country a lot of money. 55 K1L 0 0 BARNES, John Senator BARNES - I know that it did. It has always justified its existence. I say the same of the Committee of Public Accounts, which has been a very much less costly body. It may not have saved as much public money as the Public Works Committee, but it certainly has done magnificent work. Other honorable senators who have had experience on it can enlighten the Senate regarding the nature of its operations. Senator Brennan expressed a desire to revert to the conditions that existed at the time of " the open go " in industry. I do not know whether that gentleman has had much experience of the operation of the system and of its effect upon the people of this country. If he has had, he should be very reluctant to advocate a reversion to anything like a similar state of affairs. " The open go " did not mean that an honest man on one side met an honest man on the other and came to an agreement to maintain- harmonious relations. What happened was that the worst element in the country ran its affairs. The conditions were those that were dictated by the greatest scoundrels, who were utterly indifferent to the welfare of- the country. There was a long and a bitter fight to clip the wings of this element in the community, and to bring into existence a system that would enable honest men on both side3 to meet each other and settle their differences. Senator- Payne. - Is there not some trouble now on that point? 55 K1L 0 0 BARNES, John Senator BARNES - I know that there is. No matter what machinery there may be in existence for the settlement of disputes, it will never function satisfactorily because there is always the element of discontent in human nature. But that i9 the element which has always made for the progress of the human race. Had our forefathers remained quiescent, contented with their lot, we should not to-day be in possession of all the advantages of civilization we enjoy. The policy of the " open go " will get us nowhere. It is practically the policy of a return to the open ditch, from which our forefathers emerged. Many attempts have been made to alter our Constitution to give the people greater control of the affairs of this country. There is a conflict of opinion as to how the Constitution should be altered. I would give the Commonwealth absolute power to do what it wanted, which, of course, would mean the wiping out of State Parliaments. An alteration to bring about that result would confer tremendous advantages on the people. I can never understand why the people cannot be trusted. With their very existence at stake surely they can be trusted to take care of their own country. As a matter of fact with the people in control the country would be safer than it is under the present system of restricted control. I do not intend to say any more. I know that Ministers are anxious to get to work to clear up the mess they claim they have inherited from the late Government. I shall afford them every opportunity to get busy. Relief will, probably, come sooner to the people when " the dingoes are not howling ". I suggest that we can complete our immediate business and adjourn to enable another place to send us down some work to do. Any scheme which will give relief to the unemployed, and will improve the financial condition of the country, will receive the wholehearted support of the Opposition. The more speedily the Government gets busy to bring about that end, the better the Opposition will be pleased. 55 K0F Western Australia UAP Minister for Defence 1 0 PEARCE, George Senator Sir GEORGE PEARCE [5.10]. - I congratulate the mover and seconder of the motion for the Address-in-Reply on their thoughtful and sound speeches. The sobriety of their utterances reflects the sobriety of the policies they endorse. They commented favorably on what the Leader of the Opposition (Senator Barnes) regards as a defect, the absence of any promise of a long legislative programme. I may say at once that the Government has deliberately taken up that attitude towards its activities in the coming year because it believes that it will be a year of great difficulty. The main theme of the Speech is that there should be every attempt to live within the Premiers plan. Although we have only just come into office, it is already obvious to us that if we are to live within the Premiers plan there must be further economies in governmental expenditure. It has, so far, been impossible for us tc look adequately into the question of how those economies are to be effected, but if honorable senators will pause for a minute to consider the subject, they will realize that the task is one which should be undertaken solely by Ministers. Official staffs cannot undertake it. Of course they will loyally carry out any instructions they get from Ministers, but if we are to have real economy, it must be brought about by the considered action of Ministers as the result of an intense and continually applied search into various avenues of expenditure and a determination as to which of those avenues should be cut down. Short as has been our experience in this Government, we have already seen certain directions in which we believe the cost of government can be cut down. One of them already suggested is the suspension of the two committees associated with the cost of Parliament. Many no doubt could advance reasons why the Public "Works Committee and the Public Accounts Committee should continue to function, but I think that the majority of honorable senators will agree that during this time of great financial stress we can very well carry on without them. They are not to be abolished; they are merely to be suspended. If either branch of the" legislature considered that any matter should be the subject of inquiry it would bo quite easy to set up a select committee at a comparatively small cost to deal with it. I think the overwhelming body of feeling in both chambers is that at a time like this it is wise to suspend the expenditure upon these two committees. Another reason for a short legislative programme is that our financial condition is serious in regard not only to government expenditure, but also in regard to the position of Commonwealth and State finance, both in Australia and overseas. The active cooperation of the Commonwealth and the States is absolutely essential to avoid serious trouble, if not disaster, and surely, at a time like this, when we are grappling with these questions it would not be wise to have Parliament sitting and dealing with intensified programmes of legislation. It is indeed a time to devote to the consideration of the measures which must be taken by the Commonwealth and the States to meet the crises which will arise within the next twelve months. It is certainly not a time to be dealing with legislative matters that can wait until we are out of the storm. The storm is on us now, and it is the first duty of the Government to see how we can shorten sail to weather it. Senator Duncan-Hughes was under some misapprehension when he referred to a decision of the Loan Council under which certain amounts were credited to "Western Australia and Tasmania. They were not grants. 56 K7F 0 0 COLEBATCH, Hal Senator Sir Hal Colebatch - They were merely advances. Senator Sir GEORGE PEARCE. - In the true sense, they were not even advances. Every State agreed that it would only ask from the banks an advance up to a certain amount. But "Western Australia and Tasmania intimated to the Loan Council that they could not carry out their undertaking and would be compelled to ask for advances exceeding the amounts for which they had originally undertaken to ask. As a matter of fact they intimated that they would require double what the Loan Council has now allowed them to have. The Loan Council has sanctioned these two States obtaining from the banks the amounts indicated by Senator Duncan-Hughes, but they are debts owing by the States themselves, and are not amounts contributed by the Commonwealth or by any other State. In the true sense of the term therefore, they do not compare with the grants that are made by the Commonwealth to the States. . 56 JZ6 0 0 O'HALLORAN, Michael Senator O'Halloran - Is not that a departure from the Premiers plan? Senator Sir GEORGE PEARCE.Only to the extent of "Western Australia and Tasmania being allowed to exceed the amounts which they undertook to ask from the banks. The banks have agreed to increase the amounts originally allowed on the understanding that the balance of the two States' requirements is made up by the States themselves, either by a reduction of expenditure or by an increase of revenue. Senator Barnes compared the present Government's proposals with those of his Government. I cannot help thinking that he is haunted by the ghosts of the past. He pointed out, for instance, that his Government had implemented the Premiers plan. The people did not condemn his Government for having done so. They condemned it because, having implemented the plan, its supporters went into the country and proceeded to condemn it, saying that at the first opportunity they would reverse it. Moreover, some of their leaders told the people that they had not abandoned the idea of an inflation of the note issue or the idea of the nationalization of banking.. The people did not believe in those panaceas. The late Government was not defeated because it had implemented the Premiers plan, but because it was still flirting with the foolish ideas of inflation and the nationalization of banking. Senator Barnes said that Mr. Bruce is not a suitable person to send to London because he failed to raise loans in London in 1928 and 1929. The facts are that the Bruce-Page Government did raise loans in those two years. They were largely left in the hands of the underwriters it is true, but they were raised. "What happened when Mr. Scullin went to London in 1930? He announced that one of the objects of his mission was to achieve the funding of the floating debt. "Why did he fail to do ,so? Mr. Scullin himself gave the reason for his failure. He said that he had made substantial progress with his mission, but that ho failed owing to the repudiation speeches which were being made by his supporters whom he had left behind in Australia. It is on record that Mr. Scullin failed to fund the debt for the reason I have given. Whatever may be said of Mr. Bruce, it cannot be denied that he stands very high in the estimation of overseas investors. They know that when leader of a previous government his main endeavour was to place Australian finance on a sound footing. The Government of which he was the leader was not guilty of reckless borrowing. During the time it was in office the Commonwealth debt increased by only £13,000,000, although the increase in the national debt - Commonwealth and States- was £220,000,000. Reckless borrowing was not due to the action of Mr. Bruce or the government of which he was the leader. The investors in the Old Country are well aware of the fact that it was the government led by Mr. Bruce which passed legislation providing for a national debt sinking fund and control over future borrowing. After a time that government convinced the States and the people to agree to the provisions now embodied in the financial agreement between the Commonwealth and the States. When Mr. Bruce was urging the adoption of that agreement, he assumed that he was advocating an agreement between honest men, and that the parties to it would act honestly toward one another. No one could then have foreseen that a government led by a man who would publicly advocate repudiation of its debts would be returned. The financial agreement failed only to the extent that it did not make adequate provision for dealing with dishonesty. The Leader of the Opposition (Senator Barnes) deplored the absence of proposals for public works. Has Senator Barnes lost all sense of logic? Are not our financial difficulties to-day due very largely to over-expenditure on public works? In one breath he deprecated the inability of the Commonwealth to raise money in 1929-30 under favorable terms, and in the next said we ought to raise more money. Why was not the Government able to raise money at the time to which he referred ? Plenty of money was available on the London market, but the government of the day was not able to raise a loan because Australia had overborrowed. 57 K1L 0 0 BARNES, John Senator Barnes - Will the Leader of the Senate say what he would do? 57 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - I shall do so. The Leader of the Opposition referred to the means by which the late Government would have financed public works. It is very difficult to fully understand the late Government's financial proposals, some of which were sponsored by the Government itself and others by caucus. Let us consider the proposal put forward by the Labour caucus for providing £25,000,000 for public works. That is the proposal to which, I presume, the Leader of the Opposition referred. That money was to be raised by means of a forced loan from the Commonwealth Bank. Of course, the first step in that connexion was political control of the Commonwealth Bank, and the Leader of the Opposition quite innocently remarked that the Government failed to raise the money because of the action of the Senate. The action which the Senate took was to refuse to give the Government political control of the Commonwealth Bank, and thus enable it to raise a forced loan of £25,000,000 through that institution. In those two naive admissions the whole plan of the Government of which the Leader of the Opposition was a member is unveiled. Such a scheme might have provided some temporary relief, but I venture to say that the disaster which would have followed within a year would have brought about in Australia considerably more unemployment and misery than exist to-day. Under such a policy industry in this country would have come to a stand-still within a year. 58 JZ6 0 0 O'HALLORAN, Michael Senator O'Halloran - Is that likely to follow the adoption of a similar policy in the United States of America? Senator Sir GEORGE PEARCE.The two policies are not analogous. The Leader of the Opposition (Senator Barnes) asked where we are to raise sufficient money to provide employment. The Government of which he was a member made frequent reference to the release of credits; but its members and supporters never explained what was actually meant by such an expression. I shall tell them what we mean by a release of credits. The way to provide employment is to restore confidence in the government of the country; when that is done credits are naturally released. Do honorable senators opposite read the quarterly figures published in the press with respect to the finances of Australia? If they do, they will know that when the previous Government was in office the amount of money on current account decreased, and that concurrently with that decrease the amount on fixed deposit increased. Do they realize the significance of what occurred? Confidence declined while the late Government was in power, and, consequently, profits in industry became less and less. Those companies which had their capital invested in industry found it impossible to pay dividends, and instead of capital being invested in industry and handled through current accounts, it was placed on fixed deposit at a comparatively low rate of interest. That is a striking indication of the economic condition of a country. It is essential that the vast amount of money now on fixed deposit' should be released and invested in industry. If industry can be made profitable, money will be withdrawn from fixed deposit and used in providing employment. 58 JVF 0 0 DOOLEY, John Senator Dooley - At whose expense? 58 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - To the detriment of nobody. 58 JVF 0 0 DOOLEY, John Senator Dooley - To the advantage of those who make profits. Senator Sir GEORGE PEARCE.Those engaged in the manufacture of boots, hats, or any other commodity sell their products, and nobody is injured in the process. That is what happens when industry is profitable. Larger quantities of commodities are produced, both buyer and seller benefit, and no one is injured. The Government is convinced that if industry is made profitable credits will be released, and by that means employment provided. We can commence to cure the unemployment evil not by borrowing money and increasing our interest charges, but by encouraging industry. 58 JVF 0 0 DOOLEY, John Senator Dooley - How does the right honorable senator suggest that industry can be made profitable? Senator Sir GEORGE PEARCE.Either by increasing prices, which we cannot do, or reducing the cost of production. The Leader of the Opposition further stated that the main essential is to get the unemployed back to work. I do not agree with that contention as the only consideration. Men could be employed on unproductive works such as shifting -sand from one part of the sea coast to another; but that would not give any return for the money expended. The work to be found for the unemployed must be of a productive nature. This country is already labouring under the burdon of heavy interest payments on money borrowed for other than reproductive work. We cannot increase our present national debt even if we desired to do so, because money is not available. We must find some means to provide work without increasing our national debt. 59 JVF 0 0 DOOLEY, John Senator Dooley - How does the right honorable senator suggest that we can overcome the difficulties confronted by those, for instance, who obtained only 4 1/2d. for four tons of cabbages? 59 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - That is a catch question which was asked by the honorable senator and those supporting him during the recent election. Those engaged in growing cabbages should realize that they should be produced and marketed only when the conditions are favorable, and not when there is likely to be a glut. I am not surprised to learn that the Leader of the Opposition is opposed to the Government's policy of encouraging private enterprise, because the party of which he i3 a member believes in the socialization of industry. Let the members of that party consider the position of the socialized industries in Australia to-day. Is there any prospect of our railways paying in the near future, particularly if they are conducted as they are to-day? Moreover, is there any prospect of these railways employing any more men than at present? The indications are that the number now engaged will have to be reduced. Our railways are becoming so unprofitable that out of sheer necessity many of the State Governments will have to close down unprofitable lines, and the railways ,vill provide less employment than in the past. Has any honorable senator opposite the temerity to suggest that we should construct more railways? If a loan of £25,000,000 had been raised on what productive work could it have been used? 59 KOZ 0 0 HOARE, Albert Senator HoARE - The unification of the gauges. 59 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - If the railways are to he controlled under the present system, the unification of the gauges will not do more than add to the capital cost of a system which is already overloaded to such an extent that it cannot do more than pay working expenses. When honorable senators opposite talk of the socialization of industries, why do they not tell us what other industries they propose to bring under this system. 59 KOZ 0 0 HOARE, Albert Senator Hoare - That is the right honorable gentleman's business. Senator Sir GEORGE PEARCE.We on this side do not advocate the socialization of industry. Rather do we favour private enterprise, which has always provided nearly 80 per cent, of the employment in Australia. If unemployment is to be cured, there is obviously more hope of dealing with it by encouraging private enterprise than by engaging in further government enterprises. The Leader of the Opposition (Senator Barnes) spoke of omissions from the Governor-General's Speech. Honorable senators must have been surprised, as I was, that the honorable gentleman made no reference whatever to one of the greatest constitutional difficulties confronting Australia to-day - the failure of one State to carry out obligations into which it had solemnly entered. On the outstanding subject of our national life, the Leader of His Majesty's Opposition in this chamber had not a word to say ! For the Premier of a State who gave the Government of which Senator Barnes was a member a solemn undertaking to do certain things which he has not done, he has not a word of condemnation ! Mr. Lang gave the late Government a week's notice of the inability of New South Wales to meet its obligations. Even then the Commonwealth Government had difficulty in meeting the situation which arose ; but eventually it found the money. A condition entered into by the Premier of New South Wales, on that occasion, and recorded in the minutes of the Loan Council, was that Mr. Lang undertook in future to find the interest on both the State's internal and external obligations, and in addition, to carry out the Premiers plan to the extent of reducing his adjustable expenditure as the other States had done. On his entering into that solemn obligation Mr. Lang was re-admitted to the Loan Council. Notwithstanding that promise he notified the Commonwealth Treasurer (Mr. Lyons) on a recent Thursday evening, that his State would be unable to meet an interest liability of about £970,000 due overseas on the following day. The Leader of the Opposition, who was a member of the Commonwealth Government to which Mr. Lang gave his promise to pay, has not one word to say in condemnation of the action of Mr. Lang, or, indeed, any comment at all to make on the subject. I wonder whether his colleagues will adopt the same attitude. I ask leave to continue my remarks at a later hour. Leave granted : debate adjourned. 60 Miscellaneous 60 K0F Western Australia UAP Minister for Defence 1 0 PEARCE, George Senator Sir GEORGE PEARCE [5.41]. - I move - That the sitting of the Senate be suspended until 8.30 p.m. this day. It is the desire of the Government to avail itself of the opportunity presented by the presence in Canberra of practically all the Consuls-General in Australia, to tender them a complimentary dinner. The Government feels that it is in the best interests of Australia that we should show the representatives of other countries who are with us that we desire to continue friendly relations with them. This will be the only opportunity to do so, as the gentlemen concerned have to return to Sydney. This adjournment is sought in order to enable Ministers and others who have been asked to attend the function to do so. Question resolved in the affirmative. Sitting suspended from 5.42 till 8.30 p.m. 60 miscellaneous Address-in-Reply. Debate resumed. 60 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - I have nothing further to say. 60 JZ6 South Australia 0 0 O'HALLORAN, Michael Senator O'HALLORAN . - I agree with the Leader of the Opposition (Senator Barnes) that the mover of the Address-in-Reply (Senator Duncan-Hughes), and the seconder (Senator Brennan), handled a rather difficult task with considerable ability. I endorse also the concluding sentiments expressed in the Speech that the blessings of Divine Providence may rest upon this Parliament and the community which, for the time being, is governed by it. If the Speech is to be regarded as a true criterion of the Government's intentions, I am afraid that long before this Government vacates the treasury benches, the community will have good reason to invoke the protection of Divine Providence, because the document must be a very great disappointment to hundreds of thousands of electors throughout the Commonwealth, who were misled by the promises made during the election campaign. The Speech bears a striking resemblance to many of the United Australia party slogans published during the recent election campaign, and is just as devoid of positive proposals. It is simply a string of meaningless platitudes, and because of the absence of positive proposals, must be a source of profound disappointment, particularly to the large army of unemployed in all the States. In my own State, the election campaign was remarkable for the number of these alluring promises, in slogan form, in the columns of the metropolitan newspapers, and on city hoardings. In these slogans the people were told that all that was necessary to ensure a return to prosperity was to vote for a gentleman who had suddenly sprung into prominence as the leader of a newly-organized party. I have here a few examples of these promises in slogan form. Here are two - "Vote for Lyons and jobs for all." "Lyons will pay promptly, and pay in full." There was also a large poster depicting a huge army of workless people marching back to employment. I invite honorable senators supporting the Government to point to any proposal in the Governor-General's Speech calculated to honour the implied promises contained in these captions. Mr. A. Greenfell Price, the United Australia party campaign director, a very estimable gentleman, and one who, I presume, had full authority to speak on behalf of the candidates of his party, also made a number of glowing promises in advertisements published in the metropolitan newspapers. There can be no doubt on this point, because I attended a number of declarations of polls, and I heard successful United Australia party condidates eulogizing the good work which Mr. Price had done during the campaign. I am sure that many of these successful candidates must be profoundly disappointed that, up to the present, no evidence is forthcoming of the Government's intention to honour the promise made on their behalf. 61 KRZ 0 0 LYNCH, Patrick Senator Lynch - Surely the honorable senator cannot expect results at once? 61 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - Perhaps not, but we are entitled to expect some evidence of an intention to give effect to election promises. That is not to be found in the Governor-General's Speech. Other election slogans were " A vote for Lyons is a vote for work !" " Scullin and Lang failed. Let Lyons do the job; he can ". Then there was a special appeal to the women of South Australia, eleven reasons being given why they should vote for the United Australia Party candidates. I do not intend to weary the Senate by reading the whole of them, because there will be ample time, during the next three years, to remind honorable senators supporting the Government of promises made on their behalf. 1 do not know if the fact that the South African cricketers were, during part of the election campaign, playing a match against South Australia influenced the campaign director to select eleven reasons why the women should vote for United Australia Party candidates, but at all events that was the number which appeared in full page advertisements in the metropolitan newspapers. Reason No.' 6 was set forth in these terms - " The Scullin Government" renewed the sugar agreement and caused you to pay twice as much as the people of New Zealand ". "Where, in the document which was read to us yesterday, is there a suggestion that that agreement is to be revised, so that housewives in South Australia and the other States may obtain sugar at a lower price than that fixed in the agreement made by the Scullin Government with the sugar industry? 61 KNF NAT 0 0 MASSY-GREENE, Walter Senator GREENE - Does the honorable senator suggest that we should repudiate the agreement? 61 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - No ; but during the election campaign the promise was made that, if United Australia Party candidates were successful, the price of sugar would he reduced. Senator Brennan, who seconded the motion this afternoon, also made reference to this subject. In his remarks there was certainly an implication that, while the Speech contained no declaration of the Government's intention to revise the agreement, there is now a pious hope that the parties concerned will come together and agree to reduce the price of sugar below the level considered by an expert committee to be the price at which the industry could be carried on under white labour conditions. Reason No. 7, especially directed to the women of South Australia, was - " The Scullin Government raised the cost of tea by 5d. per lb." Everyone knows that the previous Government, with great reluctance, imposed a tax oh tea for revenue purposes. This Ministry and its supporters know, quite as well as the Government which imposed the tax, that, under existing financial conditions, its repeal is absolutely impossible. And yet, in the course of this debate, we have had numerous references already to this Government's honesty of purpose! We have also heard insinuations that the previous Government acted to the detriment of the people and bequeathed grave difficulties to its successors. On this point all I need say is that the Government, in 1932, found Australia in a much better position than it was when the Scullin Government took office in 1929. Other election slogans issued in South Australia were as follows: - "A prosperous New Year ! Secure it ; vote for Lyons !" " You waited two years for Scullin to do something for you ; now do something for yourself. -Vote for Lyons !" " So little done, so much to do. Vote Lyons I" " A steady government means a steady job! Give Lyons a chance!" This was the kind of propaganda that led hundreds of thousands of people to cast their votes in a certain direction on the 19th December last. I wish now to deal specifically with one or two of those implied promises, and I take as the first - " So little done ; so much to do ". One would have thought that, after being in office for approximately six weeks, and after the people had been told, during the election campaign, that Mr. Lyons and his party had a policy to restore financial stability, it would not be necessary to wait one day for the declaration of a positive proposal to help the workers back to work, to help the business community,' which had been struggling under adverse conditions for so many years, back to an era of profits, and our primary producers, who have been suffering so much and for so long, from low prices and droughts, back to the conditions which obtained in former years of prosperity. But we have this declaration of policy, which, as the Leader of the Opposition (Senator Barnes) remarked this afternoon, contains nothing of a positive nature, and offers no hope to the unfortunate workless, many of whom on the 19th December last voted for the present Government in the belief that the promises implied by the slogans that were employed would be given effect by the Government, and that early in the new year the jobs which the Prime Minister (Mr. Lyons) was supposed to have "in the bag" waiting for the ballot-box to spring the catch would materialize in the different industries throughout Australia. Yet what do we find? In Victoria, where unemployment was decreasing during the final quarter last year, according to the latest official figures that I have obtained from the .Government Labour Exchange in that State, there was an increase in the month of January totalling 2,938. That is what is causing the disappointment to which I referred in my opening remarks. Having read the declaration of policy, I waited until this afternoon for the Leader of the Government in the Senate (Senator Pearce) , to furnish us with some amplification of the intentions of the Government. I expected that, being now on the other side of the chamber, he would adopt the advice which he tendered repeatedly to Labour ministers during the period that they occupied the seats of the mighty, to go ahead with the task of rehabilitation and reconstruction. But the only positive declaration that he made was that the present was not the time for an intensive legislative programme. The suggestion behind that statement was that this Parliament is shortly to be closed, and that the elected representatives of the people, who are the trustees of the interests of this country, are to return to their homes and either rusticate or spend their time in whatever way they please except in discharging the duties that they were sent to this Parliament to undertake, leaving it to the Cabinet to carry on the task of reconstruction by administrative acts. Such a declaration by the Leader of the Government does not contain very much hope for the suffering thousands in our community. Instead of amplifying the policy of the Government, as we might reasonably have expected him to do, the right honorable gentleman went on to refer to the fact that the last Government submitted proposals designed to change the financial policy of Australia, and he condemned those proposals as being unsound. Whilst a review of the past, very often, is helpful, in coming to decisions for the future, a review of that past will not solve the problems that confront this nation unless the Government is prepared to reverse the whole of its declarations and adopt the policy to which the previous Government endeavoured to give effect. That policy, I feel convinced, provides the only solution of Australia's difficulties. It is all very well for the right honorable gentleman to condemn it. In other parts of the world the proposals that we put forward are being accepted, not condemned. Let us consider what has happened recently in that great republic, the United States of America. Within recent months we have heard in this chamber many references to what is termed " real money ". It was understood by a majority of those who listened to the debates that, took place on this subject that the term implied a reference to monetary gold. The United States of America, from one cause or another, has accumulated within recent years a huge hoard of monetary gold. It possesses nearly half of the monetary gold of the world; it has more real money than any country has possessed since the beginning of the present era of the world's history. One would think that if there were anything in the policy which the present Government professes to believe will rectify Australia's position, the United States of America would not have reached the condition of business despair, stagnation, and unemployment that exists in that country to-day. Yet we find that proportionately their unemployment is as great if not greater than ours, that their business has suffered probably more than ours, and that at last their Government has been obliged to adopt remedial measures. The President of the United States of America does not close his Parliament with the declaration that this is a time for administrative and not legislative action. According to a cable message published in the Adelaide Advertiser on the 9th December last, in his annual address at the opening of Congress, President Hoover outlined the efforts that would be made to meet unemployment and other emergencies of the depression, and said - Wc must put some steel beams in the foundations of our credit structure. The message further states - He drew attention to the huge deficits in government finance, and recommended the establishment of a group of discount banks throughout the country, to make loans on homes, thus encouraging home buildings, and the creation of a reconstruction finance corporation with authority to issue its own debentures and to aid a variety of businesses that were in difficulties duo to the depression. The Reconstruction Finance Corporation has since been created. What are its articles of association ? They are, " That the credit of the American nation, to the extent of £450,000,000, is to be used in the form of fiduciary debentures to liquefy and cause to flow the credit of the United States of America, to enable private banks that have been closed because of the freezing of their securities, due to the depression, to secure a supply of cash to re-open, thus enabling businesses to be restarted and employment to be provided." That is precisely the policy which the Labour party endeavoured to enact while it occupied the Government benches ; but this Senate was responsible for preventing it from being given effect. The suggestion made by the last Government, at the instance of the ex-Treasurer (Mr. Theodore), was something on the lines of a managed currency, something in the nature of controlled inflation, the barometer of control to be commodity prices. What is happening in America to-day as the result of the release of £450,000,000 worth of credit through the National Reconstruction Corporation? Commodity prices have risen, industrial and other securities have firmed, and there is at the moment in New York a jio te of confidence which was absent in December last before this action was taken. Had similar action been taken in Australia when it was proposed by the last Government, there would today be a stronger note of confidence, greater employment, and more security for the business undertakings of this country. A managed currency is condemned by our honorable friends opposite. Let us contrast their attitude with that of a gentleman who, according to the positions he has held in the past and the office he now holds, is entitled to speak with some authority on this question. I refer to Mr. Reginald McKenna, a former Chancellor of the Exchequer in Great Britain, who is now chairman of directors of one of the greatest banks in the Old Country, the Midland Bank. According to a cable message that was published in the Adelaide Mail on the 30th January last, addressing the annual meeting of shareholders of the Midland Bank on the 29th idem, Mr. McKenna said - Either we must have a soundly-managed gold standard, which can only be secured by well-ordered international action, or we must definitely abandon gold and rely upon a managed standard without any metallic basis. In either event one thing is certain; the art of monetary management must be relied on more and more to obviate such a catastrophe to economic life as we are witnessing to-day. Our experience in the last few months has taught us which of the alternatives mentioned we should choose. 63 K8P 0 0 THOMPSON, William Senator Thompson - That is not government management. 63 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - Mr. McKenna does not declare against government management. I remind the honorable senator that the currency of Great Britain to-day is largely a government managed currency, that there is a fiduciary currency of, I think, £2S5,000,000, which has been issued under authority conferred by the Parliament in the Bank Act. When I last consulted that act the fiduciary note issue authorized by it amounted to £260,000,0000; hut power is conferred upon the administration to increase the issue in times of stress, provided that, after a certain period, should the notes not be redeemed, the authority of Parliament must be secured. When the financial holocaust descended on Great Britain last year, that power was exercised, and the issue was increased to the extent of £25,000,000. I have seen no mention of the redemption of that additional amount. To-day two-thirds of the currency of Great Britain is fiduciary. It is a government-managed currency issued by the Bank of England under the authority of the British Parliament. Mr. McKenna says that unless a better international agreement can be arrived at for the rational use of credit, the nations must depart from the metal standard altogether and adopt for the carrying on of all activities of business a managed currency provided by the financial systems of to-day. Speaking with experience as Chancellor of the Exchequer of Great Britain, in which capacity he was practically responsible for the control of the fiduciary currency, he could have meant nothing less than an extension of the currency provisions of the Bank of England Act with which he is familiar, aud under which he has worked both as Chancellor of the Exchequer and as director of one of the greatest banking corporations of Great Britain. The Leader of the Government in the Senate (Senator Pearce) said that the Government, in some mysterious way, proposes to release credit by the creation of confidence, which he alleges the late Government destroyed, and in order to prove his assertion, he quoted figures relating to the fixed deposits in current accounts in the trading banks of Australia. He showed that during recent years there had been a tremendous increase in the amount on fixed deposit compared with the amount on current account, proving that there had been a tendency to tie up the nation's working capital. He laid the blame for this at the door of the late Government. If the right honorable gentleman would look at the Commonwealth Statistician's figures, he would find that this tying up of the nation's working capital occurred during the regime of previous governments of which he was an illustrious member. In 1921, the amount at current account in the trading banks and the Commonwealth Bank was £128,000,000, and the amount on fixed deposit, £119,500,000. The excess of deposits at current account over the amount on fixed deposit was £8,500,000. Eight years later, in 1929, the amount at current account was £127,500,000, and the amount on fixed deposit, £202,500,000, the excess in favour of fixed deposits being £75,000,000. If an increase in the amount on fixed deposit compared with the amount at current account can be attributed to the destruction of confidence that destruction of confidence must have been brought about by the Governments of which the right honorable senator was a member, because in the eight years from 1921 to 1929 the nation's working capital was tied up to the extent of £83,000,000. During the two years a Labour Government was in office the amount at current account dropped from £127,500,000 to £91,000,000, and the amount on fixed deposit increased from £202,500,000 to £210,500,000, an increase of £8,000,000, or £4,000,000 a year, a much lower rate than when anti-Labour governments were in power. The reduction in the amount at current account is easily explainable. It is due to the depreciation in the value of the securities held by the banks against overdrafts. These figures by no means substantiate the case made out by the Leader of the Government in the Senate. On the contrary, they destroy it. I venture to say that to-day the people of Australia are wondering why they did not listen a little more attentively and kindly to the words of wisdom they heard from responsible members of the Labour party when a mandate was sought for them to give effect to a policy which would have improved the condition of the majority of the citizens of Australia. 64 KOJ 0 0 HAYS, Herbert Senator Herbert Hays - You can do it once only. 64 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - You can do it, and can keep on doing it provided you insist that the credit released is used for the creation of new wealth or for giving to the community some service for which it can afford to pay. Under a managed currency that would be the limit. As a. matter of fact, it is the limit today, but with this difference, that to-day our currency is controlled. After all, the note issue plays a very infinitesimal part in our business transactions. As already pointed out to-day, those transactions are mainly carried out by cheques, and the volume of cheques is controlled to an appreciable extent by the value of securities lodged with the banks against overdrafts. In good times, when prices are high, the amount of currency of that nature is, of course, increased materially. All that Labour suggested was that as an antidote to the depression, the nation should take the responsibility off the should crs of the private banks. I do not blame the banks for restricting credit - I have amplified this before - they must protect their depositors and shareholders - but in Australia there is work of a profitable nature to be done. There are types of production which could be increased. Take small-farm production as a case iu point. As the result of recent tariff activities in Great Britain, Australia has been given a very decided advantage over Scandinavian countries for the supply of a very substantial proportion of the butter and other small-farm products which the people of Great Britain consume, and there is opportunity at the moment for the Commonwealth Government, in cooperation with the State Governments, to stimulate this kind of production which can be produced in Australia and sold at a profit in Great Britain. That was the type of work to encourage which Labour suggested the credit of Australia should be used. We also suggested that it should be used to enable people to be absorbed in industry and for businesses to be built up. If there is one thing more than another that the present Government, according to declarations of policy during the election campaign, wishes to maintain, it is the inviolability of the Premiers plan and the credit of Australia by the prompt payment of Australia's overseas commitments. I shall deal first with the inviolability of the Premiers plan. Early in the history of this Government a conference with State Ministers was held in Melbourne, at which a vital decision was reached. That decision was that the States of Western Australia and Tasmania should be permitted to depart from the pledges given when the Premiers' plan was adopted, and their total Budgetary de fecit was permitted to be increased by a substantial amount. The Premier of South Australia who, has been a very consistent supporter of the Premiers plan, has roundly condemned the attitude of the Commonwealth Government in this connexion. According to a report published in the Adelaide Advertiser on this subject, he said - I have always been a keen advocate of two things in connexion with Australia's financial position. One is that the smaller Status should bc relieved of their disabilities under federation, and the other is the Premiers plan, as the best means for Australia to rectify her financial position. The resolution passed by the Loan Council is a departure from 'both of those principles. It is a loan to Western Australia and Tasmania to meet revenue expenditure. It will not relieve them of their difficulties, and they will have further trouble in making up the amount of increased deficits not met by these temporary loans. In effect, this is a departure from the Premiers plan. He went on to say that the better course would be for the whole nation to shoulder the responsibility by way of a disabilities grant if any State failed to meet its commitments through no fault of its own. The Advertiser in a leading article on the 2nd February, 1932, shows that Tasmania and Western Australia have not done so much as some of the other States to keep within the Premiers plan. That plan provided that two things must be done to bring about budgetary equilibrium for all the States in Australia. One was that iu order to get as close as possible to that equilibrium, economies should 'be effected to the maximum, and revenue should be raised to the maximum. The various States adopted different methods of effecting economies and raising revenue, and with two or three exceptions they have substantially succeeded. South Australia, which probably had a more difficult situation to face than any other State, succeeded in, reducing its budgetary deficit by those means, and I venture to say - the Advertiser says it deliberately in its leading article, which is too long for me to read - that Western Australia could also have succeeded if it had been prepared to take the steps which South Australia was compelled to take. There is an informative quotation in the Advertiser article, comparing the positions of farmers in Western Australia and South Australia. The comparison is between a South Australian farm of 1,300 acres situated 30 miles from the seaport, and a Western Australian farm of 1,400 acres situated 170 miles from the seaport. The land tax on the South Australian farm is £S2, compared with £7 on the Western Australian farm. The district council rates on the South Australian farm total £15, compared with £7 on the Western Australian farm. Leaving out such questions as education and the like, we come to the important factor of railway freights. The outward freight on wheat from the South Australian farm is 4d. a bushel. It is also 4d. a bushel from the Western Australian farm, more than five times further away from the seaport. The inward freight on superphosphate to the South Australian farm is lis. a ton; to the Western Australian farm it is only 5s. a ton. The farmers of South Australia have been forced to accept these burdens under the Premiers' plan. If the compact made in Melbourne is to be honoured and justice is to be meted out to all the States, the people of Western Australia should accept a burden at least somewhat approximating that which the people of South Australia have been compelled to accept. I need not give the comparative figures on taxation. They have already been given by Senator Duncan-Hughes. I content myself by pointing out that the taxation in Western Australia is 50 per cent, of that paid in South Australia, and that in Tasmania it is 60 per cent, of that paid in South Australia. 66 KOJ 0 0 HAYS, Herbert Senator Herbert Hays - What about (lie ability of the States to pay? 66 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - Taking the ability to pay. the position is accentuated in the case of Western Australia. Senn tor Herbert Hays. - But not in the case of Tasmania. 66 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - I admit that the taxable capacity of Tasmania is the lowest in the Commonwealth. I think it is about 50 per cent, of the Australian average. That of South Australia is 75 per cent, of the Australian average, but that of Western Australia is equal to the Australian average, and is, therefore, 25 per cent, greater than that of South Australia. In that respect Western Australia is a worse offender than Tasmania. 66 KRZ 0 0 LYNCH, Patrick Senator Lynch - How does the honorable senator arrive at the taxable capacity of a State? 66 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - The figures from which I am quoting have been compiled by the economic experts, who were largely responsible for the Premiers plan. 66 K0F 0 0 PEARCE, George Senator Sir George Pearce - Where did the honorable senator obtain them? 66 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - They have been compiled by Professor Giblin and other professors, and were published in the report on the disabilities of South Australia recently presented to this Parliament. New South Wales, which did not adhere to the proposals embodied in the Premiers plan, has been ostracized. As finance is not available to that State to enable it to carry on, it has been forced to default. 66 K0F 0 0 PEARCE, George Senator Sir George PEARCE - It has elected -to default. 66 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - The South Australian Advertiser puts the position very clearly in this way - If only in so far as it made fish of one State and flesh of another, the Loan Council blundered yesterday, when, by a majority vote, and as it seems, without adequate inquiry, it granted special concessions to Western Australia and Tasmania. That is the opinion expressed by a newspaper which supported this Government during the recent election campaign, and it uses terms much stronger than those which I would employ. It condemns the action of the Commonwealth Government which was responsible for the decision of the Loan Council so strongly stigmatized in the newspaper from which I have just quoted. The right honorable the Leader of the Senate said that New South Wales elected to default. What would have happened to Western Australia and Tasmania had special consideration not been given to those States? They, too, would have been forced to default. Where is the difference ? 66 K0F 0 0 PEARCE, George Senator Sir George Pearce - They honoured their undertakings. 66 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - It is all very well to blame the Premier of New South Wales (Mr. Lang) for the default of New South Wales. Whether we agree or disagree with Mr. Lang's methods we have to admit that for the moment he is in a position of power in New South. Wales, and that any action taken against Mr. Lang affects the State and its people. The electors of New South Wales are entitled to the same consideration as given to those of Western Australia and Tasmania regardless of who may be the Premier of New South Wales, or Prime Minister of the Commonwealth. Owing to the way in which the matter has been handled by this Government, it is not default on the part of New South Wales, but default by the Commonwealth. The late Government was in a similar position, but it did not permit the Commonwealth to default. It paid the amount due by New South Wales, and arranged to collect the money later. 67 K0F 0 0 PEARCE, George Senator Sir George PEARCE - On the condition that it would not occur again: 67 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - This Government refused to provide the £500,000 which New South Wales required to meet its interest commitments, and when it discovered that it had made a mistake, hastened to assure the bondholders abroad that their interest would be paid whether it was or was not collected from the New South Wales Government. In the meantime irreparable damage had been done to Australia's credit. In one day the value of Australian bonds in London and New York dropped to the extent of £23,500,000. Such a drop seriously affected cautious bondholders who could not afford to take any risk, and benefited the speculators who could afford to take a chance and who consequently made a " rake-off ". The Government has also been condemned by the Industrial Australian and Mining Standard of the 4th February of this year, which usually supports its policy. It states - Under the Financial Agreement the Commonwealth assumed absolute responsibility for Mie whole of Australia's debts. If the Commonwealth, therefore, permits any State to default in one of its engagements, that "default instantly assumes the complexion of default By the Commonwealth. Our external creditors are fully aware of the unalterable fact. The Commonwealth Government intends eventually to make good Mr. Lang's default. It has said so. It will pay Mr. Lang's overseas creditors in full after it has clipped Mr. tang's wings. ~ Unhappily, it will pay Mr. Lang's debt too late to save our national honour from disgrace if it further delays payment. For Mr. Lang's debt is Australia's debt, and if Mr. Lang defaults, we default. Australia's quarrel with Mr. Lang is no concern of our external creditors. If Australia makes them pawns in a game of politics (instruments to coerce Mr. Lang), all the decent people of Australia will suffer equally with Mr. Lang in the esteem of the world. That is what has been objected to by the people abroad and by such institutions as the Westminster Bank and the Chase National Bank which, when approached on the subject, made similar declarations to those published in the Australian press. It was most unfortunate, they said, that the Lyons-Lang controversy could not be settled within Australia. The Commonwealth's credit already had been adversely affected. This was more important than the £500,000, which Mr. Lang sought from the Loan Council. 67 KRZ 0 0 LYNCH, Patrick Senator Lynch - How would the honorable senator feel if he held some of the bonds? 67 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - I should feel that I had been unjustly treated by the Commonwealth which under the financial agreement is responsible for meeting the interest on the bonds. 67 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - Does the honorable senator endorse the statement that we are responsible? 67 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - We are. 67 K2Z 0 0 BRENNAN, Thomas Senator Brennan - The passage which the honorable senator read does not say so. 67 JZ6 0 0 O'HALLORAN, Michael Senator O'HALLORAN - The paragraph in the Industrial Australian and Mining Standard reads - Under the financial agreement the Commonwealth assumed absolute responsibility for the whole of Australia's debts. It means that we assume responsibility for New South Wales as we do in connexion with the other States. I am opposed to the Government's proposal to abolish the Public Accounts Committee, and I hope that the financial policy of the Government is not to be judged by actions such as it proposes to take in this connexion. The Commonwealth Parliament as the trustee of the people of the Commonwealth appoints a cabinet to act as its board of directors and to retain some such measure of control over the finances as can be afforded by the assistance of a Public Accounts Committee. Although we have been informed that the committtee is to be abolished in order to effect economy, we find that the parliaments of other countries are strengthening their control over financial affairs by appointing additional committees or increasing the powers of existing bodies. In a recent report on the financial position of Tasmania - a State which the Prime Minister represents - the Auditor-General of that State insists upon the imperative necessity of appointing a Public Accounts Committee to safeguard the State's finances. Instead of abolishing the Commonwealth Public Accounts Committee as is proposed, the Government should alter the constitution of the committee and allow it to function for the objects for which it was established, which were so clearly outlined by that great Australian, the late Lord Forrest, in 1913. Before the Government does anything in the direction of abolishing the committee it should recognize that which was recognized by the previous Government when a measure to reduce the personnel, of the committee was under consideration last year. In that measure a clause was inserted to enable 'the committee to conclude an important investigation on which it was then engaged into the parliamentary control and procedure in relation to the public finances of the Commonwealth, the form in which Estimates and budget-papers and other financial statements are presented to and dealt with by Parliament, and the desirability of uniform methods of accounts for the Commonwealth and the States. It was decided by the Government of the day that the Public Accounts Committee should be permitted "to complete that inquiry before any alteration in its personnel was made, but owing to the dissolution of Parliament, the bill was not finally passed. The committee obtained evidence from eminent authorities, compiled a mass of information, and had it been permitted to complete its report would have been able to recommend means by which substantial improvements could he made in the keeping and presentation of Commonwealth accounts and the possibility of very substantial savings would have been disclosed. Recommendations would also have been submitted concerning an alter- tion in the personnel of the committee, to enable it to function along the lines of a similar committee of the House of Commons, which co-opts the assistance of experts from the Audit Department and Treasury. Before taking, any action to abolish the committee the Government should permit it to be reconstituted to enable the valuable evidence secured and which is ready for- presentation to Parliament to be made available. I trust the Government will give this matter its serious consideration. In conclusion, I desire to refer to the statement of the Leader of the Government in the Senate that the Government cannot find employment for all the people of this country. That is the task of private enterprise. I venture to suggest that the late Government did more to assist private enterprise in providing employment than any other government has done. It afforded protection to Australian industries which resulted, not only in the Australian people manufacturing those things which they required instead of purchasing them from abroad, but also in converting a huge adverse trade balance into a favorable trade balance. By that means it assisted in maintaining national solvency during the most difficult period in the nation's history. If this Government is able, at the closing of its term of office, to point to a similar record, it will have achieved something of which it may he proud. 68 K1Z New South Wales 0 0 RAE, Arthur Senator RAE . - Those honorable senators who moved and seconded the Address-in-Reply made the best of the meagre materials provided for them in the Governor-General's Speech." I wish to refer to some of the statements which have been made during this debate, but I have no intention of traversing the whole Speech. Senator Brennan stated that the absence from the Speech of many proposals for legislative enactment was all to the good. He pointed out that every law curtailed to some extent the liberty of the individual, and that consequently the less legislation the better. With that wise generality I heartily agree; but under the existing social system, and probably also under previously existing social systems, there are groups of individuals whose instincts lead them to abuse the freedom they possess, and to trespass on the freedom of others. Laws are therefore necessary to curb their rapacity. Because of the development of the capitalistic system, these predatory individuals, who live by exploiting the people generally, have become so numerous and skilled in the art of breaking through, or evading the law, that almost the whole of the time of parliament is taken up in either enacting new laws or amending existing laws in order to deal with their pernicious activities. So long as the capitalistic system exists so long will parliaments be required to enact legislation to prevent the worst phases of that system from dominating the whole system. There has been too much legislation in some directions. Forty years ago, when I was connected with a radical journal, I advocated that for every new law placed on the statute-book one or more old laws should be repealed. By that means I hoped that our legislation would bc brought within practical limits. We have to enact legislation to-day almost entirely because the existing system makes it easier for men to do right than wrong, to rob their neighbours than to live by honest toil. Until the capitalistic system has been abolished none of the proposed remedies for the existing evils will be of more than a superficial nature. I listened with interest to the Leader of the Senate (Senator Pearce) when he roundly condemned the socialization of industry. The right honorable gentleman stated that the chief reason for our heavy indebtedness was that we have so many nationalized, or socialized, services. He specially mentioned our non-paying railways. As on previous occasions my remarks in this connexion seem to have been misunderstood, I shall to-night endeavour to make my meaning perfectly plain. The nationalization of industries, such as the railways, telegraphs and telephones, is not in any respect socialism. The socialization of industries as now advocated does not mean that governments are to make a piecemeal acquisition of public services, or of industries; nor does it mean that we shall borrow money to buy manufactories, or float loans in order to extend our railway systems. The socialization of industry means the establishment of socialism as an organized method of breaking away completely from the present system. 69 K2L 0 0 REID, Matthew Senator Reid - How would the honorable senator bring it about? 69 K1Z 0 0 RAE, Arthur Senator RAE - I do not propose to present to honorable senators to-night a fully developed scheme for the inauguration of socialism. Socialism will be established as the result of circumstances. 69 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - Such as those which exist in Russia to-day. 69 K1Z 0 0 RAE, Arthur Senator RAE - I do not suppose that the Vice-President of the Executive Council (Senator McLachlan) knows as much about Russia as I do. 69 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - Probably I do not. 69 K1Z 0 0 RAE, Arthur Senator RAE - The Minister's admission denies him the right to criticize conditions in Russia. I shall not attempt in this speech to deal with conditions in Russia; but it is beyond refutation that although the world is richer to-day in real wealth than ever before, there is more suffering and direr poverty than it has previously known. Surely those facts are a sufficient indictment of the present system ! 69 KOJ 0 0 HAYS, Herbert Senator Herbert Hays - It has not yet been established that they are facts. 69 K1Z 0 0 RAE, Arthur Senator RAE - I am prepared to bring forward evidence in support of my statement. The Leader of the Government also said that only by encouraging private enterprise could we hope for any improvement of existing conditions. One naturally thinks of the United States of America - that great citadel of individualism - when seeking the results of private enterprise, because in that country socialism is taboo, and trade unionism is so poorly organized that even its leaders confess that only slightly more than 5 per cent, of the workers " there are organized. In the United States of America, moreover, there is no political Labour party in existence, so that individualism and private enterprise there are unrestricted. The railways of that country are owned by private companies, as are also its telegraphs and telephones, and other social services; yet the latest reports available show that between 8,000,000 and 10,000,000 persons in that country are unemployed, while many millions more are only partially employed. That is the state of affairs in the home of private enterprise, one of the finest countries in the world, which has a home market of 120,000,000 people. 70 K0F 0 0 PEARCE, George Senator Sir George Pearce - I would rather he unemployed in the United States of America than employed in Russia 70 K1Z 0 0 RAE, Arthur Senator RAE - The people in the United States of America who are unemployed are out of work largely because of conditions over which they have no control. Neither they nor the workers of Russia have any choice as to their domicile. The United States of America has incurred no heavy indebtedness because of allegedly foolish socialistic experiments, as is said to be the case in Australia. Although it has an accumulated gold reserve of £1,000,000,000, the United States of America is unable to escape from its financial difficulties. Only a week, or two ago President Hoover admitted that his country's deficit at the end of the current financial year will be about £424,000,000. In the face of these facts, which are indisputable, honorable senators opposite laud private enterprise while at the same time condemning anything that has a taint of socialism. In roy opinion the term " socialization of industry" is an unfortunate one; I prefer " the establishment of socialism " 70 KP8 0 0 JOHNSTON, Edward Senator E B Johnston - Or sovietism. 70 K1Z 0 0 RAE, Arthur Senator RAE - The word " soviet " is a Russian word meaning " council " ; it has reference to the organizing of affairs according to a definite plan rather than going on in a " hotch-potch way " as we do in this country. The capitalistic system has hopelessly failed. Even before the war it was doomed; the war hastened its end. The reason is plain. Invention, discovery and technical equipment have advanced to such an extent that competent investigators have affirmed that in any highly industrialized country the needs of the community for a year could be produced in two months. This would mean that machines would be idle for ten months out of twelve, although the amount of work required to produce the commodities might be spread over the full term. 70 K8P 0 0 THOMPSON, William Senator Thompson - Soviet Russia is straining every nerve to do the same. 70 K1Z 0 0 RAE, Arthur Senator RAE - I am not speaking about Russia. The fact remains that if we continue producing a much larger volume of goods than we can consume, we must necessarily throw a larger proportion of machinery into idleness and, to that extent, reduce the return on invested capital. Honorable senators opposite will see that I have a tender regard for the interests of the capitalists in this matter. The invention of up-to-date machinery and the perfection of technical equipment and chemical research enable manufacturers to produce so heavily, that, from time to time, a glut is caused in the markets of not only one country, but also in the markets of the world, with the result that prices- for those commodities fall rapidly, mills and factories are forced to close or work half time, and thousands of operatives are thrown on the industrial scrapheap Being then, unemployed, their purchasing power is nil. Consequently, there is further depression in business, leading to further unemployment. So the vicious circle i3 continued. In all industries machinery is now doing the work formerly done by men. "When I was a lad working with others in the harvest field, we were required to bind and remove the sheaves cut by the reaping machines, so that they would not be trampled upon by the farm horses' on their next round. That work gave employment to a large number of men. Now harvesting is done in one operation. The displacement of human labour in that one occupation can be multiplied in every direction. It is not wide of the truth to say that man power in industry has been displaced by machinery to such an extent in recent years that one-half of the adult workers of the world could be drowned in the Pacific without any appreciable effect upon the output of modern machinery under mass production methods. And this process of mechanizing production is going on at an accelerated rate. 70 K8P 0 0 THOMPSON, William Senator Thompson - But it is not the true cause of the present world problem. 70 K1Z 0 0 RAE, Arthur Senator RAE - If human beings are thrown out of employment, the market for the sale of products must necessarily be restricted. 70 K0F 0 0 PEARCE, George Senator Sir George Pearce - England is supporting more people to-day than she did 100 years ago, when little or no machinery was used in industry. 71 K1Z 0 0 RAE, Arthur Senator RAE - England was the first country to utilize machinery in the textile industries and later in the heavy industries. This gave her the command of the world's markets, and as she had been for centuries the leading maritime nation, she reaped enormous profits from the sea carriage of her manufactured products to other countries and the transport of raw materials required by British industries. Later, when other countries followed her example and introduced machinery in industry, her position became increasingly difficult, and now she cannot maintain all her people in reasonable comfort. Unemployment is increasing, notwithstanding the return to power recently of a Government of which the present Commonwealth administration is a weak imitation. But for the migration of her surplus population, Great Britain would have been a mass of starving humanity long ago. Being also the great financial centre of the world she has levied tribute, in the form of interest upon loans to other civilized and semi-civilized countries. By this means she obtained spheres of influence for trade which gave her control of an unlimited supply of raw materials produced in cheap labour countries and enabled her to maintain an aristocracy of labour at home. But that time has gone. The Speech makes reference to world competition which prevents an increase in commodity prices by means of which we hope to restore prosperity to this country. Every nation is now in commercial and financial difficulties. Some are actually bankrupt, but are being allowed to carry on by the goodwill of their creditors. The world war mortgaged the production of future generations and added to the impoverishment that already existed in all the older countries. The condition of their people has now become unendurable. The popular remedy is to reduce wages in industry, lengthen the hours of labour, and otherwise take what steps are possible to bring down costs of production. Great Britain complains that she cannot afford to pay the Australian rate of wages. On the Continent Germany declares that she cannot pay the rate of wages obtaining in British industries. Other competing nations make similar complaints. Wages in the far-eastern countries are about one-tenth of the wages paid in Great Britain. This means, of course, that the purchasing power of the people in the Far East has fallen to such an extent that they are unable to obtain the commodities of which they stand in urgent need. Consequently, European manufacturers have to seek other markets, and are compelled to reduce wages. If this vicious circle is allowed to continue, finally the condition of the workers in European countries will be brought down to the coolie level of India, China, and Japan.We who represent the workers feel that we must struggle against these forces which, if unchecked, will destroy the living standards of our people. We declare that wo cannot afford to wait for legislation. We might as well wait for the millennium. Consequently, we are determined to main tain the struggle and, if necessary, will carry the war into the enemy's camp. This is the class struggle. 71 KTR 0 0 MCLACHLAN, Alexander Senator McLachlan - I thought the honorable senator's claim was that the workers had nothing to lose. 71 K1Z 0 0 RAE, Arthur Senator RAE - Our claim is that we have not got what we ought to have, and it is our bounden duty to ourselves and those dependent upon us to struggle, in every possible way, to retain what little we have, and to use every opportunity to fight for more. So long as the capitalistic system exists, so long will the class struggle continue. This does not mean, as some people endeavour mistakenly and others falsely, to represent, that we are preaching class hatred. That is not what we advocate. We declare that there must be this class struggle while the system of production for profit by wage labour exists, and while wage labour is continually being ground down to the lowest level of subsistence. This class struggle has its roots in the existing social order, and must continue while those conditions prevail. 71 K0F 0 0 PEARCE, George Senator Sir George Pearce - What about the profits made in Lang's lottery? Are they legitimate? 71 K1Z 0 0 RAE, Arthur Senator RAE - The right honorable gentleman is dealing with trivialities. 72 K0F 0 0 PEARCE, George Senator Sir GEORGE PEARCE - 1 thought the lottery system was part of the Lang plan. 72 K1Z 0 0 RAE, Arthur Senator RAE - I have had no hand or voice in the establishment of the lottery in New South Wales. In any event, Mr. Lang is not a professed socialist. Senator Brennan made some reference to the spirit of revolution which appears to be evident in some parts of the Commonwealth. I remind honorable senators that the word simply means a complete change, though not necessarily a complete change in the social order. We may speak of a revolution in industry or the revolution which has taken place in navigation since the days of the old sailing vessels. The term " revolution ", in its application to the ushering in of socialism, does not necessarily imply the adoption of violence. It means a complete change, instead of the haphazard nationalization of industries. The railway systems, for example, do not manufacture their own rolling-stock, but purchase their requirements from private enterprise. Under the existing system State undertakings are inextricably mixed up with private enterprise, and, consequently, can furnish no criterion as to the manner in which socialism as a system would work. Such a system cannot be established piecemeal; it must either be thoroughly organized or remain in the clouds. I want to make it perfectly clear that I and those who think with me do not necessarily mean that such a revolution should be accompanied by violence. 72 K8P 0 0 THOMPSON, William Senator Thompson - On one occasion in this chamber the honorable senator said that he was prepared to either kill or be killed in a revolution. 72 K1Z 0 0 RAE, Arthur Senator RAE - I would say it again if necessary. There will be no need to use force if the possessing class are animated by a spirit of sweet reasonableness; but should they decline to realize that we are passing through a period of transition, that the old system is damned irretrievably and must be replaced by another; should they set their faces stubbornly against the change and, like Pharaoh with the children of Israel, harden their hearts and use all their political and social influence to repress those who are endeavouring to bring about the change, they will be responsible for whatever occurs. I believe that many of the best educated and some of the most prosperous people in the community are convinced, as I am, that socialism must be the next step taken by humanity to save itself from destruction. If, through self-interest, those who have vested interests refuse even to consider these matters, they will have only themselves to blame for what occurs. The French revolution was not planned and organized, but waa the natural outcome of the infamous conditions to which the people were subjected. Similarly, any revolution that may arise either here or elsewhere, will be the fruits of the existing conditions, and not the result of any scheming or plotting in underground cellars. The capitalistic system offers no permanent hope of a recovery from the position in which humanity finds itself to-day. As each country becomes industrialized, it becomes a competitor of other countries instead of a user of their products, and thus the area in which foreign trade can be acquired is constantly contracting. There are, of course, many commodities for the production of which some countries are peculiarly adapted, but, generally speaking, the. constant mechanizing of different communities is adding to the number of competitors and restricting the area in which they may compete. The friction which arises from this acute and intense competition accumulates, until eventually it reaches the exploding point and warfare is the result. War is as much the natural fruit of the capitalistic system as crime is the fruit of poverty and ignorance. So long as that system exists we shall always be either at war or preparing for it. The pious wish is expressed in the Speech of the Governor-General that' the Disarmament Conference will be successful. I venture the opinion that it has not a million to one chance of being successful. The seven greatest powers to-day are spending upon armaments annually over £14,000,000 more than they spent in 1913. The present trouble in China proves that when any great nation attempts to impose its will on a weaker nation, the League of Nations is powerless. I do not say that either country is entirely blameless. The fact remains, however, that a state of war exists, the only factor absent being an official declaration, and that it has broken out in spite of the pacts, compacts and other undertakings that have been entered into during the last few years. While the capitalist system prevails, war is the inevitable outcome of a strong nation being hemmed in, with a rapidly increasing population, and a shortage of raw materials. She must endeavour to expand so as to obtain the raw materials she needs, and the space that her people require. I admit that a temporary alleviation of the position in which we find ourselves at the present time may be effected; but the prevailing conditions must inevitably recur unless the fundamental causes of them are removed. We are told that only by living within our income and reducing the cost of products can we restore confidence and sot in motion the locked-up private enterprise that awaits development. Honorable senators opposite claim to possess the quality of honesty. Why have they not the common honesty to admit that what they propose is a reduction of wages and a lengthening of hours? I heard the United Australia party candidate in the recent East Sydney by-election campaign say that it was better for two men to receive £2 a week each than for one to receive £4, and the other to be idle. Fining down the matter to one individual is most misleading. Doubtless, were I a man of independent means, and I wanted to engage labour to erect a summer-house or in some other way to beautify my estate, and I could obtain the services of two men for £3 a week each, it would be cheaper for me to employ them than to pay one man £6 a week. If such a practice became general, however, the purchasing power of the people would be so far reduced that it would make an enormous difference to the life of the community. The policy of the party which is now in power in this Parliament is opposed, not only to natural justice, but also to elementary commonsense. If cheap labour were the solution of the unemployed difficulty, there would be no unemployed in China, India or Japan, where males work for1s. a day, women for half that amount, and children for even less. Yet' in those countries millions of the population arc unemployed. It is indisputable that if low wages and long hours were factors in promoting prosperity they would be the most prosperous communities on earth. It stands to reason that if Now South Wales abolished the 44-hour week and reverted to the 48-hour week, fewer men would be required for the work that is offering. The whole object involved in a lengthening of hours is to dispense with some portion of the labour that is at present engaged. I ask leave to continue my remarks on another occasion. Leave granted ; debate adjourned. 73 adjournment Rabbit Netting and Poisons: Exemption from Sales Tax and Primage Duties. Motion (by Senator Sir George Pearce) proposed - That the Senate do now adjourn. 73 KP8 Western Australia 0 0 JOHNSTON, Edward Senator E B JOHNSTON . - I draw the attention of the Government to the necessity for exempting from the sales tax and primage duties rabbit netting and rabbit poisons. The Leader of the Senate (Senator Pearce) has been in Western Australia lately, and I believe realizes the fact that the number of rabbits has increased alarmingly in every portion of that State ; yet the people are called upon to pay very heavy primage duties and sales tax when they have occasion to purchase the rabbit netting and poisons which are necessary to deal with the pest. I have received from the Road Board Association of Western Australia, which represents the whole of the rural areas of that State, a letter on the subject. I believe that, owing to the nature of the season through which wo have passed, a similar position exists in other parts of the Commonwealth. The letter reads - I beg to advise that at the meeting of the executive committee of the above association, held on the 27th January, a number of communications were received from country road boards requesting relief from the imposition of the sales tax and primage duty on rabbit poisons, wire netting, &c, used largely in the destruction of rabbits. The committee resolved that each Western Australian representative in the Federal Houses of Parliament should be asked to take such action, and use all the pressure possible on the federal authorities, for the purpose of assisting the farmers generally, who are finding the increased expenditure, due to the imposition referred to, to very burdensome, and I am desired to express the wish that you maybe able to assist in the removal of the taxes referred to on behalf of all primary producers. For your information I am to add that owing to the large number of abandoned properties and unattended Crown lands, rabbits have been very much on the increase this year, rendering the task of those who remain on the land in keeping down the rabbits very difficult and costly. Where the settler has not wire netted his holding the task is almost hopeless, and the cost of netting is almost prohibitive by reason of the high charges on it. Trusting you will be able to afford a measure of help on the lines requested, I am yours faithfully, H. Rosman, Secretary. Senator Rae. - What are the duties? 74 KP8 0 0 JOHNSTON, Edward Senator E B JOHNSTON -We permit rabbit-proof netting to come in from England free of duty, but importations from foreign countries pay a duty of £2 a ton. In the present circumstances, I think that that duty might well be remitted. There is also 25 per cent. exchange on the purchase price, and then come the most objectionable features, a primage duty of 10 per cent., and a sales tax of 6 per cent. The Governmentthus extorts 16 per cent. duty on a commodity which it says should be imported free of duty from Great Britain in order to help the primary producers. In regard to rabbit poisons, the primage duty is 10 per cent. in the case of phosphorus, which is mostly used. I understand that it is 4 per cent. on cyanide, which is principally used for other purposes. Practically every farmer in the wheat belt of Western Australia, and persons in other parts of the State make extensive use of rabbit poison. 74 K0S 0 0 PLAIN, William Senator Plain - What is the effect on the price of rabbit-proof fencing? 74 KP8 CP 0 0 JOHNSTON, Edward Senator E B JOHNSTON - These charges add 41 per cent. to the landed cost. I hope that the Government knowing that these charges hear very heavily on the primary producers will remit the primage duty and sales tax on items, particularly on rabbit-proof netting, which are required by the farmers to enable them to get rid of the fearful pest of rabbits. 74 K0F Western Australia UAP Minister for Defence 1 0 PEARCE, George Senator Sir GEORGE PEARCE [10.17]. - As a representative of Western Australia, I have also received the letter which the honorable senator has read, and have forwarded it to the Minister for Trade and Customs, making representations on the same lines as those advanced by the honorable senator. I will see that the honorable senator's remarks are brought under the notice of the Minister and the Treasurer. Question resolved in the affirmative. 74 22:18:00 Senate adjourned at 10.18 p.m.