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Thursday, 24 November 1927

Mr MAKIN (Hindmarsh) .- The budget which has been introduced by the Treasurer is the eighth that it has been my privilege to listen since my entry into the realms of public affairs in Australia. I do not think that such a statement has ever yet been received with more mixed feelings, and with a greater sense of alarm, especially among many of those supporting the Government. It is evident that the more thoughtful Government supporters recognize the seriousness of the situation that has been, created by the extravagant and prodigal manner in which the Treasurer is applying himself to his duties. The amendment moved by the Leader of the Opposition is well timed.

It is desirable that the people of Australia should be acquainted with the situation in which the Government has placed the country by its false policy of going abroad for the greater part of its borrowing, - and the inordinate increase in the cost of government. It is accentuating the position by the ineffective tariff which has been imposed for the protection of certain Australian industries. Any measure of prosperity and improved output is entirely due to the conscientious efforts of the direct producer, whether in primary production or the factory, and is achieved in spite of the Government's backward policy. I do not. know how far the schedule, placed on the table this afternoon, will go towards rectifying the existing anomalies in the tariff, but even if a measure of improvement is afforded, certain of those deferred duties will permit the importing agencies to so accumulate stocks in Australia, especially of woollens, that industry will receive a serious setback. Perhaps the reaction will be so great that it will be necessary to restrict output, and to effect retrenchment. There have been too many dismissals recently in Australian factories. These dismissals create a very unfortunate situation for many people, who face the approach of the festive season with great uneasiness. They are beset with a constant feeling of insecurity. As the Treasurer seeks to justify his position in regard to the present budget, it may be well for me to confront him with some of his own opinions, as expressed in 1921, when he took the then Treasurer severely to task for his alleged extravagance. He assured the right honorable member for Flinders' (Mr. Bruce) that there would be a day of reckoning, and that his gross extravagance was such as to affect seriously the financial position of the country. In October, 1921, the present Treasurer, when leader of the Country party, expressed himself concerning the budget presented by the then Treasurer (Mr. Bruce) in this way -

Hie Treasurer, instead of trying to stem the stream of extravagance, has been content to go with it.

Is that not exactly what the present Treasurer has been doing since he has been in office? Has he in any way endeavored to stem, the rising stream of extravagance in the matter of public expenditure? If he has he should show in what direction it has been done. It is impossible for a Treasurer to give us any indication of the direction in which savings which in 1921 he regarded as so essential have been effected. In the same speech he said. -

The electors must know, and they will know, as far as it lies within the power of the Country party to inform them, that the proposed reduction in taxation cannot continue unless there is a permanent reduction in tlie cost of government.

Has there been any reduction in the cost of government?

Mr Bell - Yes.

Mr MAKIN - In what way?

Mr Bell - I shall inform the honorable member later.

Mr MAKIN - The honorable member for Darwin has already spoken during this debate, and therefore cannot get away in the smoke in that way. There has been not a decrease, but a substantial increase in the cost of government. The reductions in taxation have never been greater than during the present Treasurer's term of office.

Mr Bell - Does the honorable member object to that?

Mr MAKIN - Yes, because the reductions have been made in the interest of the wealthy section of the community, whilst the workers have to bear ever increasing burdens.

Mr ABBOTT (GWYDIR, NEW SOUTH WALES) - Have they not received any concessions?

Mr MAKIN - Emphatically I declare that no relief has been afforded, and concessions alleged to have been given to the working man have been taken from him, with indirectly added charges. Even in his budget the Treasurer has provided for a reduction in income and land taxation to the extent of £1,800,000. Tf the proposed reductions were to relieve the small landholders and those deriving incomes from primary production, I would heartily support them; but they will benefit only the wealthy sections who are receiving big incomes or holding large estates which they are not utilizing to the best advantage.

Mr Bell - Has not the exemption been raised 'and the rates reduced?

Mr MAKIN - If the honorable member will study the figures he will find that an overwhelming amount of the reductions have favored those who can well afford to pay taxation. Honorable members on this side have not forgotten the way in which the wealthy landholders, with the assistance of the Treasurer, escaped payment of taxation on leasehold land. The Treasurer' endeavored to give them complete exemption from taxation, which they justly owe to the Commonwealth, and had it not been for the vigilance of the honorable member for Yarra (Mr. Scullin), and several other honorable members, the bill, affording them assistance would have been passed by Parliament. The indignation was, however, so pronounced, and the opposition so strong, that the bill was eventually withdrawn. These wealthy leaseholders have now to pay only the arrears, and under the Government's proposals taxation will not in future be collected on leasehold land. When one compares the Treasurer's criticism of 1921 with the budget which he has just presented, a. lamentable lack of consistency is apparent. In 1921 the present Treasurer said, "I urge the Government to give up shuffling and deceiving the public." He should follow the advice he then gave. The manner in. which he endeavours to balance the public ledger is contrary to the accepted principles of finance, and before long he will find that the Government's present, policy has been responsible for seriously impairing the financial stability of the country. He also said -

I urge the Government to withdraw the budget, to grasp the nettle firmly, and to do what every business house is doing - try to square the ledger and prepare for lean years.

Has the Treasurer acted in that way? Yesterday the Prime Minister endeavoured to justify the Government's financial policy, but instead of doing that, he should direct the Treasurer to withdraw this budget and to act in accordance with business principles. I wonder if the Prime Minister recollected the serious reprimand administered to him in earlier years by his now half partner in Government, but then a political adversary. I desire to address myself in particular to the economic position. Honorable members opposite seem to think that our present economic position has been brought about by the Arbitration Courts granting higher wages and shorter hours to men engaged in industry. Some of them openly challenge the wisdom ofthe decisions given by judges in an Arbitration Court, and assert that the time has arrived for dispensing with such tribunals, and thus preventing the workers from receiving a fair share of the wealth they assist in producing. Honorable members opposite have stated that the Australian worker is going slow, and that the improved conditions obtaining in Australia have produced that effect.A regrettable scene occurred in this chamber this afternoon because the honorable member for Franklin (Mr. Seabrook), when comparing the relative worth of Australian and Italian workers made some apologetic reference to the Australian workerwhich conveyed a veiled inference that he was decidedly inferior to the Italian.

Mr.Bell. - The inference came from that side, and not this side of the chamber.

Mr.MAKIN. - The honorable member for Franklin was responsible for the protest of the honorable member for Darling (Mr. Blakeley). The honorable memberforDarwin (Mr. Bell) cannot deny that the Australian workman has done his full share in developing Australia. I have here statisticswhich prove that the Australian worker, under our improved conditions, has increased production, so increasing the wealth of the nation. It therefore ill becomes honorable members opposite to endeavour to traduce our toiler and wealth producer. In support of my contention I shall quote from this journal, which must have the respect of all. Unlike honorable members opposite, who quote only from Tory newspapers, such as the Age, the Brisbane Courier, and the Brisbane Daily

Mail,I shall refer to one of our most influential financial journals, the Australasian Insurance and Banking Record, for the year 1926, the last volume available. That publication gives a compilation of statistics prepared by the Australian Association for the Advancement of Science, from which I extract the following particulars. In1908 the manufacturing production in Australia represented 21 per cent. of the total production, while in 1924 it represented more than 30 per cent. It is estimated that, in 1924, the productive efficiency per person engaged in industries was7¾ per cent. higher than it was in 1911.

Mr Jackson - Does that allow for the increased use of machinery ?

Mr MAKIN - Yes, all allowances have been made. The total capital employed in. our manufacturing industries for the year ended 30th June, 1925, was £302,600,000, while in 1913 it was only £117,700,000. The figures for 1924-25 were made up as follows : -


For the year 1924-25 the value of the factory output was estimated to be £380,500,000 made up as follows: -


Those figures do not signify that the worker went slow. They indicate general prosperity. They mean that the worker has increasedthe market for our primary products. The improved conditions which apply to our workers have brought about the following improved trade conditions. Whereas in 1920 the population of Australia was able to purchase 21.38 lb. of butter per head per annum, in 1924 the consumption was increased to 28.72 lb. The consumption of cheese increased from 2.72 lb. in 1920, to 3.64 lb. per head per annum. Our people were able to indulge in ham and eggs to a greater extent than previously. In 1920 the consumption of bacon and ham was S.71 lb. per head, while in 1924 it had increased to 11.57 lb. For the years 1919-30 to 1924-25 the average percentage of interest and net profit on the capital invested in industry was 15.8 per cent. That is three times the ordinary bank interest, and two and a half times the interest received on government gilt-edged securities. I do not begrudge their profits to those who have placed their money in industry, but I ask honorable members opposite to be just to the workers who produced those returns. Instead of going slow on the job the worker has increased profits and dividends.

Mr ABBOTT (GWYDIR, NEW SOUTH WALES) - If those are the returns from industry, why does the honorable member and his party desire further increases in the tariff.

Mr MAKIN - Those profits apply only to a certain number of industries, which have been protected by the tariffs that have been so consistently supported by honorable members on this side of the committee. Many of our industries still need to be assisted by tariffs, and this unfortunate handicap has been responsible for accentuating the unemployment question and problem. I have in mind industries in my own electorate which are unsuccessfully competing with foreign industries. Those industries produce first class articles, but are unable to fight against the inferior and underweight products from abroad. The pastoral and dairying group produced in 1908 goods per person engaged worth £219 on the 1911 price basis, as compared with £287 in 1924.

Mr Hill - The hours of work may not have been the same.

Mr.MAKIN. - If there has been any alteration in the working hours of people engaged in primary industries, surely it would have been in the direction of a decrease.

Mr ABBOTT (GWYDIR, NEW SOUTH WALES) - There has been certainly no reduction of hours for primary producers.

Mr MAKIN - The Minister for Works and Railways suggested that increased working hours were responsible for the added value of production in the pastoral and dairying group, and is answered by his own colleague.

Mr ABBOTT (GWYDIR, NEW SOUTH WALES) - The honorable member is quoting values and not quantities.

Mr MAKIN - The honorable member for Adelaide (Mr. Yates) about a fortnight ago quoted quantities, and the honorable member for Gwydir (Mr. Abbott) on that occasion asked for values. Now that I have given him values he asks for quantities.

Mr ABBOTT (GWYDIR, NEW SOUTH WALES) - What I asked the honorable member for Adelaide for was the increased cost of production.

Mr MAKIN - The forestry and fisheries group produced in 1908 goods per person engaged worth £161 on the 1911 price basis as compared with £164 in 1924. Much has been said about miners going on strike, but little about lockouts. The mining industry produced in 1908 goods per person engaged worth £233 on the 1911 price basis, as compared with £279 in 1924. There is certainly no evidence of a go-slow policy in that case. In the manufacturing industry the value of goods produced per person engaged during the same period increased from £149 to £165. These figures are not based on inflated values, and I challenge honorable members to refute them. For all industries combined, in 1908 goods produced per person engaged were worth £198, and in 1924, £231.

Mr West - That is a substantial increase.

Mr MAKIN - That is so Honorable members must admit that the national dividend gives a true indication of the position of those engaged in industry. The following was taken from an address given by Mr. J. T. Sutcliffe before the Economic Society of Australia and New Zealand : -

The national dividend for the year 1924-25 I estimate to be 635.6 millions of money sterling. Consequently the national dividend shows an increase of more than 13 per cent. over that for the immediately preceding year. Taking the value of' production and of services and calculating that value per head of population, and then eliminating price variations, the result in productivity per head is considerably higher than in any previous year for which the national dividend has been estimated, and is 11.6 per cent. higher than in 1911.

That statement shows that there has been a substantial increase not only in the value, but also in the quantity of the products of the workers of this country. I hope that, in future, honorable members opposite will at least be fair to the workers and not seek to malign them and to defame their noble achievements. The working man is the truest asset that any nation can possess, although I admit that no man works harder than those engaged in dairying and farming. Our factories have not attained the highest degree of efficiency, hut the fault lies not with the worker, but with the management and equipment. At one time I was employed at the Islington work-shops in South Australia, an institution which was then referred to as a home from home and a place at which the men loafed on their jobs. I worked harder in that establishment than ever I worked before, and so did the great majority of my fellow workers. The fault was with the management and equipment. When the present Railways Commissioner of South Australia was appointed, he expended £500,000 in bringing those work-shops up to date. What is lacking in Australia is efficient supervision. The annual report of the Bureau of Commerce and Industry for 1922 deals with inefficiency and waste in industry.

Mr Fenton - Is not that an American report ?

Mr MAKIN - It does not say so. America is to-day, and has been for many years, one of the best organized industrial nations of the world, and it is quite reasonableto suppose that ourmanage ment less efficient than is hers. The report reads -

Management has the greatest opportunity, and hence responsibility, for eliminating waste in industry. The opportunity and responsibility of labour is no less real though smaller in degree. The opportunity and responsibility chargeable to outside contacts cannot be so clearly differentiated or evaluated. The relative measure of these is shown by the quantities in the following table, which come from the composite evaluation sheets in the engineers' field reports : -


Those figures prove conclusively that inefficiency of management is more serious to industry than inefficiency of labour, and they are an unanswerable reply to honorable members opposite, who have villified the Australian working man. If those honorable gentlemen are not satisfied with our industrial development, let them take steps to see that the interests which they represent improve their methods.

The honorable member for Boothby (Mr. Duncan-Hughes) stated last night that the unsatisfactory condition of our mining industry was due to the high wages and improved working conditions which the miners enjoy; but I submit that it is due to inordinategreed of interested capital for profits and dividends. The honorable member referred specifically to the Broken Hill mining field. I spent sixteen years of my life on it, so that I may claim to know something about it. During the years when I resided on the Barrier - and they were the years of its greatest prosperity - I found thai: the policy ofthe directors of the various mines was invariably to work the high-grade, and to neglect the low-grade ores. The eyes were picked out of such mines as Block 10, Block 14, the Broken Hill Proprietary, the Junction and the British, in order that their shareholders might draw huge dividends and bonuses. The value of the output of the Broken Hill mines up to the end of 1924 was £120,010,033 ; the authorized capital of the various companies was £7,823,000; and the dividends and bonuses paid totalled £26,341,574, Had the miners received anything like an equivalent amount in wages and bonuses, they would have been glad to retire.

Mr M CAMERON (BARKER, SOUTH AUSTRALIA) - A good many of the miners participated in the dividends and bonuses.

Mr MAKIN - I knew intimately many of the people who lived on the Barrier, and very few of them were ever in a position to invest in mining shares. That field is in difficulty now because of the rapacity of directors who, years ago. were not content to work the high and low grade ore as it came, but concentrated upon the rich pockets and left the poor stuff behind. That is particularly true of the Junction mine, which has always been seriously mismanaged. If in general industrial enterprises, management is responsible to so great a degree as is shown by the figures that I have quoted, it is even more so in respect to the mining industry. The value of the Broken Hill mining field has been temporarily destroyed because of the greed of former managers and directors. Because a slight drop has occurred in the price of lead and silver, it is not profitable to-day to work the low grade ores that are available there.

It has been said more than once during this debate that Australia depends to a very large degree for her prosperity upon her production of wool and wheat. We sometimes pride ourselves upon -being one of the greatest, wheat producing nations in the world. My investigations along that line have startled me. Twentyseven nations are ahead of us in the average yield of wheat per acre, and we are only producing 4 per cent of the world's requirements in wheat. The following figures for the year 1924 show the yield per acre of some of the big wheat-growing nations of the world -


Even to *get a yield of fifteen bushels per acre, Australia has regularly to fertilize 75 pei1 cent of her wheat-growing lands.

Mr Foster - Some of the older countries have been using fertilizers for hundreds of years. In any case the figures for one year only are misleading; in one year there is a drought, and in the next year bountiful production.

Mr MAKIN - To satisfy the honorable member I quote the number of bushels per acre produced in those countries during the season 1921-22 - Denmark, 44.14; United Kingdom, 33.26; New Zealand, 28.49; Germany, 26.97; Japan, 22.40; Canada, 17.19; United States, 13.41 ; Australia, 12.52.

Mr Hill - What point is the honorable member trying to make ?

Mr MAKIN - Wheat production is regarded by many honorable members as one of the main buttresses of our national prosperity. I desire the committee to realize that it is a very insecure buttress, and that we should not overestimate its value, and underestimate the value of manufacturing production in maintaining the financial position of this country.

Mr M CAMERON (BARKER, SOUTH AUSTRALIA) - Does the honorable member expect that we shall be able to export our manufactures?

Mr MAKIN - The time will come when the entire wheat production of Australia will be required for local consumption. To-day some of the best lands of Australia are not being tilled. In close proximity to Adelaide are rich lands used for grazing sheep, although they are eminently suitable for agriculture. The wheat growers are sent into the distantnorth and to the far end of Eyre's Peninsula. Much of the distant land might be just as suitable for stock as is thos land nearer Adelaide. A visit to Booagunyah station, about 50 miles from Tarcoola, convinced me that much of the country towards Central Australia can be utilized to greater advantage for sheep grazing than for any other form of production. Already men are growing wheat beyond Goyder's line of rainfall, and are finding it a very unprofitable business. If the land there were utilized for sheep grazing it would give a better return for the energy expended upon it, and the agriculturalists could with advantage to the community apply themselves to the richer lands nearer the metropolis.

Mr Killen - Should not the owner of land know whether it can be best used for sheep or for agriculture.

Mr MAKIN - Not every man can afford to purchase flocks with which to stock a grazing property. The poorer fa farmer usually selects wheat growing and dairy farming because they involve a smaller capital outlay.

Mr M CAMERON (BARKER, SOUTH AUSTRALIA) - Because of the high price of agricultural implements and machinery it is cheaper nowadays to engage in sheep grazing than in wheat production.

Mr MAKIN - I invite the honorable member to disprove if he can the facts that I have presented to the committee. We do not even market our wheat to the best advantage. According to F. B. Guthrie, F.C.S., if our export wheat were milled into flour Australia would have saved £4,000,000 during the last ten years by returning to the soil the natural manures in the form of offal. I recognize the difficulty of compelling our customers abroad to buy our flour when they want our wheat. The reason they insist upon having the wheat is that it has the highest gristing quality of any in the world, and they can mill it with inferior wheats and sell the blend as A.1 Australian flour. That is not fair to this country. I was disappointed to find that the export of flour has seriously diminished, and that the Commonwealth is sustaining an increasing loss through not returning to the soil the offal as a natural manure.

I should like to pay a well-deserved tribute to the dairy farmer. If there is one primary producer who has endeavoured to improve his economic efficiency, he is the dairy farmer, and statistics show that asa result of the improvement of his herds he is getting a. greater return per cow than he did some years ago. The number of dairy cattle in Australia in 1920 was 2,055,638, and by 1924 the number had increased to 2,444,637. The quantity of butter produced in 1920 was 208,081,864 lbs., and in 1924 313,952,291 lbs. In 1916 the milk per dairy cow was less than 300 gallons: in 1920 it was 314 gallons, and in 1924 it had been increased to 363 gallons. The number of farmers who adhere to hand processes in butter making is rapidly diminishing. The average quantity of milk churned to produce a pound of hand-made butter was approximately three gallons, but the manufacturer and his artizans have by their brains and skill evolved the separator, by which on the average a pound of butter is obtained from every two and a half gallons of milk.

Mr Bell - Unfortunately separators' are not manufactured in Australia.

Mr.MAKIN. - One would expect the representative of a rural constituency to know better than that. In 1911 the value of farm yard production was £20,154,000, or £48s. 2d. per head of those actually engaged in the industry. The 1925-26 production, reduced to the basis of 1911 prices, was £26,750,000, or £4 8s.11d. per head. I have endeavoured to give to the Committee figures which will enable members more fully to appreciate the services rendered to the country, both by the primary producers and the manufacturers.

Wool is Australia's most important product. At the present time we produce 25 per cent. of the world's requirements in wool, an achievement of which Australia should be proud. Let me say, however, that we cannot expect always to hold the premier position in the markets of the world. Other countries are purchasing our stud sheep, and are improving their flocks to such an extent that in a very few years they will be our formidable rivals. The world's total wool production for the year 1925 was 2,096,579,000 lb. of which Australia contributed 729,243,000 lb. The average weight and value of the fleeces shorn in Australia in 1921 were 6.65 lb., 8s. in value ; and in 1925, 7.69 lb., 16s. in value. That is, the value of the wool has practically doubled, while the clip itself has been improved by the introduction of better flocks. The wool industry is the only one concerning which I have been able to. secure complete figures, and I shall quote these because some honorable members have said that, increased cost of production is responsible for the precarious position of certain industries, particularly the primary industries. They have said that the country cannot stand the improved wages and shorter hours, and that we must call a halt. The figures I am quoting are taken from the report of the Land Settlement Advisory Board of Queensland issued in 1927. Thar. State is probably the least favorable which I could use as an example formy own purposes. Honorable members opposite constantly declare that it is going to ruin, and that industry there is burdened with increasing costs. The cost of production in the wool industry in that State has increased by approximately 12 per cent. during the period from 1911 to 1925. Running costs, such as the cost of machinery, represent 8.7 per cent.; increases in shearers' wages, and better conditions generally, represent 2.06 per cent.

Mr Foster - The honorable member should go back further than 1911 in-order to make a proper comparison.

Mr MAKIN - If I went back to the days of the flood when Noah took the sheep into the ark I expect the honorable member would still say that I should go back still further. The increases in respect to other items of cost are as follows : -


Mr.Foster. - Railway charges have gone up 40 per cent. during the period mentioned.

Mr MAKIN - I quote from a reliable and authentic public document, and the charges are as I have said. I think I have proved that it is not the workers, . nor their improved conditions, that are so burdening down industry that it is unable to carry on. The honorable member for Franklin (Mr. Seabrook) said that no sooner did Parliament grant increased protection to an industry than the unions demanded increased wages and shorter hours. Has it ever occurred to the honorable member that the claims of the workers have to go before a tribunal - the Arbitration Court - which decides whether any increase in wages shall be granted? The wages paid are not determined on the prosperity ofthe industry, but on what it costs the worker to feed, clothe, and house himself; in other words, what it costs him to live. That is not the basis on which the manufacturer determines the protection he demands, or the dividends which he secures. The worker and his wife have to go into the box and answer questions as to what it costs them to live, even down to a postage stamp. Not so the wealthy landowner and private investor in industry. I contend that the condition of industry in this country enables it to give the worker the greater benefits which he enjoys. Their conditions should be even better than they are. I would like to see the primary producers, who are workers in a true sense secure a better return for the services they are rendering to the nation. But for those who are profiteering, and who, by their exploitation, are robbing both the workers and the primary producers -

Mr Foster - The honorable member would hang them.

Mr MAKIN - Judging from many of the remarks which he has made, the honorable member would do even worsethan hang the working man. He would be tempted at times to boil him in oil.

Mr Foster - I am prepared to stand by my record. It shows that my attitude has always been fair.

Mr MAKIN - I promise the honorable member that either the' honorable member for Adelaide or myself will entertain him some time in the near futurewith a. record of his own sayings and doings in reference to the working man when he was Minister of Public Worksin South Australia.

I hope that I have been able to satisfy the committee that the Australian worker is not going slow on the job. He is not decreasing his output, nor impairing national efficiency, or the financial standing of the Commonweaith. By his hard toil and. consistent efforts he is contributing to the assets of the nation. . He is working in such a way as will place this country in a premier position among the nations of the world. We can maintain our present high economic conditions if the Government will realize its obligations to all sections of the community, and not relieve the wealthy men of the payment of taxes justly due by remitting £1,800,000 in land and income tax, and placing extra burdens on the backs of those least able to pay. Let the Treasurer place this proposed remission of taxation into a sinking fund to liquidate over a. period of 50 years our present Commonwealth public debt. If the Government will recognize its responsibility, give adequate protection to industry, support the primary producers by the more just dispensing of a nation's reward and recognize its duty tothe people, it will earn the gratitude of the nation as a whole, the Leader of the Opposition has been compelled to challenge the attitude of this Ministry as the Treasurer himself, in 1921, challenged the then Treasurer at that time he said -

I urge the Government to withdraw the budget- to grasp the nettle firmly, and to do what every business house is doing, namely, try to square the ledger, and prepare for lean years.

That is what we are urging the Government to do now, so that we may be able to improve the financial standing and prestige of the country, and do our part to add to its future prosperity.

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