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Friday, 17 July 1931


Mr SCULLIN (Yarra) (Prime Minister) .- The Deputy Leader of the Opposition (Mr. Latham) asked me what action was being taken in regard to the payments made by the Commonwealth on behalf of the Government of New South Wales for interest due by that Government. I said this morning, in reply to a question, that communications which had been received from the Premier of New South Wales were, for the present, confidential. Honorable members- must recognize that there are stages in negotiations when communications between governments are confidential.


Mr Latham - I merely asked what stage the negotiations had reached.


Mr SCULLIN - I shall never be guilty of committing this Parliament, or this country, to obligations, without furnishing full information to Parliament, and to the public generally. I take exception to the remarks of the honorable member for Perth (Mr. Nairn), who said that the Government was meeting the obligations of the Government of New South Wales without consulting this Parliament; that we were acting without the authority of Parliament. That is a grave charge, but it has no foundation in fact. We are acting on the authority of the legislation of this Parliament, and of the legislation passed by every Parliament in Australia. Our authority is the financial agreement, and all we have done to date is to meet a legal obligation imposed on us by that agreement. When the New South Wales Government first failed to meet its interest obligations, I made a full statement to the House, placing before it all the information at my disposal.


Mr NAIRN - The Prime Minister made an offer to re-open the Government Sav.ings Bank.


Mr SCULLIN - I made no such offer.


Mr NAIRN - The Commonwealth Bank Board did.


Mr SCULLIN - All I did was to agree that negotiations should be conducted between the two banks with a view to re-opening the New South Wales Government Savings Bank. As a Commonwealth Government, we have an obligation to all the people of Australia. The closing of a government bank in one State is a serious tiling to -the people of Australia as a whole, and particularly affects the credit of the Commonwealth. In the interests of the people of Australia, I hope to see the New South Wales Government Savings Bank re-opened, but not at the expense of all the States for the benefit of any one State. This Government is determined that every State shall meet its own obligations, and- on that point we have never wavered. Is there, however, any honorable member in this House who disapproves of the action of the Government to date in meeting interest payments regarding which the New South Wales Government defaulted ? There is a legal obligation od us to do that.


Mr Paterson - We must pay.


Mr SCULLIN - We have instituted legal proceedings against the Government of New South Wales, and if that government does not meet its obligations, those proceedings will be gone on with. The proceedings have been instituted, not. only in the name of the Commonwealth

Government, but in the name of that Government and of the five State Governments who, besides New South Wales, are parties to the agreement. We owe it to the people of the States, and to the Commonwealth as a whole, to proceed with this litigation if necessary, but I should be glad if we could have this issue settled in a reasonable way without resorting to litigation. I have neglected no opportunity of arriving at such a settlement. It is a reflection on Australia that, when we are asking all sections to make sacrifices for the restoration of our credit, and the rehabilitation of our finances, the governments of the Commonwealth should be lighting one another in thecourts.


Mr Fenton - We should make New South Wales stand up to its obligations.


Mr SCULLIN - Have I ever said anything to the contrary?

Mr.F en ton. - No.


Mr SCULLIN - It has been suggested that we are using the money collected in all the States to meet the obligations of a particular State. The fact is that we have no option under the financial agreement but to followthe course we have taken.

Mr.Nairn. - Has the Commonwealth a legal obligation to meet interest payments in respect of those loans raised be- fore the financial agreement was signed?


Mr SCULLIN - Under the financial agreement we have a legal obligation to holders of State securities.


Mr Nairn - But only, I think, in respect of loans raised after the financial agreement was signed.


Mr SCULLIN -The honorable member may, on another occasion, dispute the advice we received from two leading counsel, ono in Melbourne, and one in Sydney. The only criticism levelled to date against the Commonwealth Government has been that we delayed four days in makinga declaration as to whether we would meet the interest payments or not. We delayed making a declaration, because we wanted to know exactly where we stood before we assumed the obligation. We obtained the best legal advice we could, and acted upon it. We propose to continue acting upon it, and to meet in full our legal and moral obligations. The Government has not committed this Parliament or the Commonwealth to anything without fully informing Parliament of what it was doing, and we do not propose to depart from that course.


Mr Latham - The Prime Minister is not able to give any further information as to the progress of negotiations?


Mr SCULLIN - I am not. I cannot do so at present without committing a breach of confidence. I may be able to say something later.

Regarding the request of the honorable member for Angus (Mr. Gabb), if there is a demand for the report on the wine industry, we shall have it printed. I am endeavouring to follow the rule laid down in regard to the report of the Sugar Investigation Committee. Copies of that report were sold to those interested, at 8s. each. That is very costly, I admit, but it is estimated that copies of the wine industry report could be sold for 3s. each. Fifty copies of the report have been roneoed, and, in response to an inquiry, I have learned that the stencils have been preserved. Instructions have been issued that a further 100 copies are to be made, and if the demand for copies persists, the report will be printed, and copies made available to those who desire them.

The honorable member for Hunter (Mr. James) raised the subject of medical attention being given in certain cases by qualified officers of the Commonwealth Health Department. This departmenthas been set up to deal with purely Commonwealth matters, and the cases to which he referred are the concern ofthe State. I have the greatest sympathy with those on whose behalf the honorable member has spoken, and it is not because I am callous to their sufferings thatI decline his request. It would create an intolerable position,however, if the Commonwealth Health Department were to make itself responsible for attention to individual cases throughout all parts of Austrafia. The honorable member for South Sydney (Mr.E. Riley) is needlessly alarmed. I have not seen a statement in the press that the Leader of the Opposition (Mr. Lyons) has gone officially to consult Sir Robert Gibson. He has. I understand, gone to Melbourne, and if, when he is down there, he consults Sir Robert Gibson, as a member of the committee he ia at liberty to do so. When I go to Melbourne next week I also hope to be able to meet Sir Robert Gibson.


Mr E RILEY (SOUTH SYDNEY, NEW SOUTH WALES) - What I wanted to know was whether the Leader of the Opposition was a member of the committee?


Mr SCULLIN - He is.


Mr E RILEY (SOUTH SYDNEY, NEW SOUTH WALES) - And as such is he authorized to negotiate on behalf of that committee ?


Mr SCULLIN - There is no negotiating to be done.


Mr Riordan - It was stated in the press that there was to bc a parley with Sir Robert Gibson upon loan matters.


Mr SCULLIN - Day after day I read scores of press paragraphs that are not altogether correct. In any case would it be a dreadful crime for any honorable member to go to Melbourne and discuss any important subject with Sir Robert Gibson, if he could meet him? To the simple question which has been asked - " Have we handed over the government of the country to Mr. Lyons?" my reply is " No ".

Question resolved in the affirmative.







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