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Friday, 26 February 1932

Mr JENNINGS (South Sydney) . -It is a matter of deep regret to me that in my first speech in this House I have to refer to circumstances which adversely affect New South Wales. In view of the national importance of this measure, and of the fact that the framers of the Constitution did not contemplate default on the part of a State, I shall endeavour to approach this subject free from party spirit and as dispassionately as possible. It is a sad reflection on the public life of Australia that this Commonwealth Parliament should have to pass a measure like this. I believe that it is the desire of the majority of the people that the Federal Parliament should rise above party and seek in some national way a solution of the present crisis and unemployed problem. It is obvious that no matter what measures are brought down to the House to overcome these difficulties, they will meet with destructive criticism from certain honorable members opposite. I suppose that, as a young member of the House, I may be rather optimistic in expecting somewhat Utopian conditions to exist in political matters. But we must approach this issue as it presents itself to us. Financial undertakings in private, commercial, and public spheres of action are based on confidence and sanctity of contract. The people look to the Government to set an example in the honouring of contracts, financial and others, and unless all governments honour their obligations we cannot expect private people to honour theirs. In all British governing dominions it is the unwritten law that a financial undertaking once given must be honoured. The undertaking between the Commonwealth and the States was based on confidence. This Government is now legislating to restore confidence and stability in the financial market, and that, in turn, will stimulate industry and promote employment. An outstanding feature of the recent election was that the public of Australia had confidence in the honesty and sincerity of the Prime Minister (Mr. Lyons) and of the Attorney-General (Mr. Latham), the sponsors of this measure. It is difficult to reconcile the attitude of the Government of New South Wales to-day with it's attitude prior to the last State elections. When making his policy speech on behalf of the Labour party in that State, on the 23rd September, 1930, Mr. Lang stated -

The Australian Labour movement would not permit for one moment any of its leaders to be associated with a policy of repudiation. The pledge to the people from a Labour man is as binding as his pledge to a bondholder. The Labour party sets its face against all repudiation.

At that time the official organ of the Labour party of New South Wales considered that statement so important that it published it throughout the State under the heading - "Lang Repudiates Repudiation." The people of New South Wales accepted that statement, and returned Mr. Lang to office with a substantial majority. Mr. Lang must have known that if he included any suggestion of repudiation in his policy speech his party would not have been returned to power. In view of the fact that the Government of New South Wales has now violated almost every pledge that it made to the electors, its duty is to take the simple and obvious course of resigning immediately and appealing to the people. If that were done I feel certain that the verdict of the people would be such as to make this legislation unnecessary. The right maxim in government, private, and business undertakings is not that " Honesty is the best policy ", but that honesty is the only policy. The future of Australia is wrapped up with this legislation. If we repudiate our obligations, God help Australia when we have to approach the loan market for further assistance. Great damage has been done to our prestige abroad because of this talk of repudiation. I have with me a letter from a Sydney business house which throws a side light on the situation. This firm is the representative of a British manufacturing concern, and sells a line of goods which, incidentally, cannot be made in Australia. Under the terms of trade, thousands of pounds worth of goods were sent to Australia on consignment, and on the sale of those goods remittances were, in due course, forwarded to London. As a result of the talk of repudiation, the supply of goods to this firm was stopped.

Cablegrams and letters passed between the two houses, and on the 5th December, 1931, the following reply was received from the British manufacturing company : -

We are sorry that you should feel in any way aggrieved at the delays, but we can only say that the conditions of your country were alone responsible. We could not execute orders without cash in advance, or arrangements made in London to pay cash. We are sorry that we do not see our way to alter our attitude until conditions in your country make it possible for us to reconsider our decision. We arc 'only too anxious to increase our business with your country, but if you put yourself in our place at the time we wrote you, you will realize that conditions at that time looked somewhat hopeless, and we were, therefore, obliged to make our decision on the conditions as they appeared to us. We need hardly add how very much wo appreciate the efforts you arc making to increase business iu our mutual interest, and wc sincerely hope, that is, from what we read in the news from your country, that your financial position is improving, lt is our earnest hope that we shall not have to hang up any of your orders in future, but we are quite sure that you now clearly understand, and until conditions do get on a sound commercial basis, we must ask you to accompany your orders with cash.

In order, then, to get these goods to Australia, the Sydney firm had to send thousands of pounds to London in advance for goods that might or might not be sold in Australia. That firm had to dismiss certain of its hands because of the absolute stagnation of its trade, brought about as a result of the talk of repudiation. That position obtains in respect of many other firms which trade with London. In past years Australia has put in hand public works involving the employment of some 1.00,000 workmen. " In a young coun try like this, public works must bc constructed, and for that purpose public money is needed. The best way to drive capital from Australia is to practise repudiation.

This legislation will not be used as an unfair instrument against the States. When the present position has been righted the necessity for it will disappear. I am certain that when the people of New South Wales reflect upon the situation they will see the necessity for this bill. By its passage Australia will declare to the world that it intends to honour its obligations. If wc do that, Ave shall ensure sufficient money in the future for the employment of our people on public works and in the industries of Australia, and, in our march along the road of prosperity, we shall gradually cleanse the stain of default and repudiation from our national escutcheon.

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