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Wednesday, 16 March 1932


Mr ROSEVEAR (Dalley) .- One of the most noticeable features of the speeches that have been made by honorable members opposite during this debate has been the endeavour on the part of both leaders and rank and file to convince the. House that this motion is not a political move. When honorable members remember how frequently that protest has been reiterated they will regard the utterances of honorable members opposite as suspect. We know that this is a move to complete by legislation the action begun by the leaders of the National party at the meetings of the Premiers Conference and Loan Council. There assembled at those conferences representatives of the Governments of Australia, each viewing these matters from a different angle. The representatives of the States which had endeavoured to carry out the Premiers plan in its entirety, by imposing upon their people tremendous burdens, had to admit that the sacrifices made by their people were in vam ; that they could not balance their budgets. The Premier of New South

Wales did not adhere to the terms of the Premiers agreement, but the position of New South Wales was no worse than that of other States which had endeavoured to do so. The Premier of South Australia declared that "budgets must be balanced, even if the people of my State have to make further sacrifices ", while the Leader of the Government of Victoria said, " The workers of Australia will have to take their belts in a few more notches ", and the Premier of Queensland, whose State was in an infinitely worse position than New South Wales, as he himself admitted-


Mr Bernard Corser - That is not so.


Mr ROSEVEAR - In any case the Commonwealth Assistant Treasurer (Mr. Bruce) told that gentleman that the position of Queensland was hopeless, and worse than that of the other States. In some respects the position of New South Wales is the same as that of the rest of the States ; in others it is not. Borrowing by that State, the richest in the Commonwealth, has been prevented because of the determinations of the Loan Council, which is comprised of representatives of States many of which have been for some time in a state of bankruptcy, and dependent upon the charity of the Commonwealth. In addition, moneys due to New South Wales from federal sources have been confiscated by the Commonwealth Government, with the result that the Lang Government has been entirely dependent upon "its own taxation resources to carry on its social services. The Commonwealth Government now proposes to attach even those revenues. It knows that by doing so it will embarrass the Lang Administration in carrying out the ordinary functions of government. That, of course, is just what this Government desires. Like all previous Tory administrations it acts first and argues about the legality of the matter afterwards. Had the Scullin Government acted on behalf of its people with the same vigour and the same disregard for legal formalities which characterize the actions of this Government in the interests of its supporters, in all probability it would be in -office to-day.

The honorable member for Darling Downs (Sir Littleton Groom) tried to justify the seizure by this

Government of the revenues of New South Wales. He said that it did not matter if the ordinary legal process was not complied with in this instance, as the departure from orthodox action was justified by expediency. The seizure o£ the revenues of New South Wales is claimed to be justified whether the High Court declares that action to be legal or otherwise. In the meantime what is to happen in New South Wales? It is claimed that the lack of confidence that is allegedly felt in the Government of New South Wales is reflected throughout Australia. Nothing is more calculated to destroy the confidence of investors in Australian securities than the action this Government is taking in regard to New South Wales. The Prime Minister has paraded his allegedly fair treatment of that State. To-day he stated that he went so far as to make a final appeal to the Lang Government during the week-end to do the right thing as he saw it. Let me examine the wonderful opportunity that was afforded to the Premier of New South Wales to make a deathbed repentance. On Friday, the Enforcement Bill was passed, and on Saturday it received the assent of the GovernorGeneral. Apparently there wa3 little doing on Sunday, but on Monday the Government set the law in motion. On Tuesday, it secured a certificate from the Auditor-General, and to-day it submits this resolution for putting the bailiff into the Treasury of New South Wales. Yet the Prime Minister (Mr. Lyons) parades as a virtue the last effort of the Commonwealth Government to awaken the State Government to a sense of its responsibility to the bondholders. We are told that this measure is urgent, and that New South Wales has defaulted to the extent of £924,000. The Prime Minister did not disclose, nor will the Nationalist press do so, that £242,000 of that amount is due to the adverse exchange rate, which is manipulated by the financial interests supporting the Commonwealth Government. The resolution proposes the seizure of several specified forms of revenue, and to justify the extent of the raid, the Assistant Treasurer built up a supposititious case which depends wholly on the word " if ".

He said that if New South Wales should continue to repudiate its overseas liabilities, if in future it repudiates the interest owing to the Australian bondholders, and if such repudiation continues for a further six months, a stated amount will be owing. The right honorable gentleman admitted immediately afterwards that the amount at present due by the State to the Commonwealth could be - recovered by attaching the income tax revenue for the next eight weeks. But by specifying revenues totalling much more than the present 'liability of the State, Cabinet will have power to issue, while Parliament is adjourned, a proclamation which can be manipulated as the Government thinks fit to embarrass the Government of New South Wales. Supporters of this proposal have alleged that New South Wales is creating a new standard of political morality by failing to meet its commitments. Possibly that Stale would be in a better position than, any other to discharge its liabilities if its Government were prepared to accept the policy dictated by the Commonwealth Government. Mr. Lang is not prepared to do that. His Government could, for instance, save a considerable amount of money by closing non-paying railways. Would the Country party approve of that? If overseas commitments are to be met regardless of the sacrifice entailed on the people of New South Wales, the Government would possibly be justified in conserving the finances of the State by discontinuing railway services which are a burden on the Treasury. Another £2,000,000 could be saved if the State Government were to enforce the payment of the amounts due to it during the last twelve months by the farmers - debts which the Lang Government has waived in order that these primary producers may be relieved of a portion of their burden. Would Ihe Country party approve of that? Again, if the Commonwealth Government were to expend in New South Wales the revenue it collects there, the State Government would be in a better position to meet its commitments. According to Commonwealth Treasury returns, the federal revenue received from New South Wales last year was £25,147,000, and Commonwealth expenditure in that State £23,372,000. New South Wales, during the twelve months, paid into the Federal Treasury £1,750,000 more than was returned to it. In other words, lis. per head of the taxation raised in New South Wales, and 103. per head of that raised in Victoria, was spent in other States. On the other hand, the Commonwealth expended in other States the following amounts per capita more than it collected in those States: - Queensland, 9s.; South Australia, los. 9d. ; Western Australia, 45s, 4d. ; and Tasmania, 76s. 3d. Yet the representatives of these States have the effrontery to charge New South Wales with having refused to meet its commitments. But for the federal revenues collected in New South Wales and Victoria being expended in other parts of the Commonwealth, the finances of the other States would be in an infinitely worse position than they are to-day.

The Prime Minister, the AssistantTreasurer, and the Leader of the Country party are most solicitous for the welfare of the oversea bondholders who, we are assured, are not Shylocks. Indeed, the Assistant. Treasurer declared that the foreign lender has been a benefactor to New South Wales, inasmuch as the great public works of that State are assets which were created by loan expenditure. The right honorable gentleman neglected to mention that the bondholders have been repaid over and over again, in interest, the money they lent. Whilst the Commonwealth Government is so concerned about compelling New South Wales to pay its debts to the bondholders, Ministers have not shown similar enthusiasm in attempting to recover from the Kylsant Shipping Company the money contracted to be paid for the purchase of the Commonwealth Shipping Line. If the Government is justified in putting the bailiff into the New South Wales Treasury to recover £900,000, it should adopt the same procedure to recover moneys amounting to £1,320,000 in respect of which default has been committed by Lord Kylsant, to whom the Bruce-Page Government sold the Commonwealth Line of steamers at a sacrifice. The money with which those steamers were purchased by the Common- wealth, was borrowed, and surely the purchaser of those ships from the Common wealth will not force the lenders to forgo their money. If the Commonwealth Government will collect in behalf of the people the money owing for the ships, it will at least give some evidence that it is sincere and consistent in insisting that obligations should be honoured. The Assistant Treasurer told the House that the credit of New South Wales has disappeared. That is a remarkable statement, having regard to the fact that private capitalists were prepared to finance the building of the eastern suburbs railway at a cost of £8,000,000, and to accept New South Wales Government bonds in payment. If the Loan Council and the Premiers Conference had been sincerely desirous of relieving unemployment, they would not have refused to co-operate with the Government of New South Wales in arranging to finance that project. The expenditure of £8,000,000 in New South Wales would have provided work for many hundreds of the unemployed.


Mr Paterson - Was not that sum unreasonably large?


Mr ROSEVEAR - Not when compared with the expenditure on other public works.


Mr Stewart - That alleged offer was mere pre-election bluff.


Mr ROSEVEAR - It was not. The negotiations had proceeded so far that the Government was able to name the contractors, who in turn publicly stated that they would find the £8,000,000 required and accept New South Wales Government bonds.


Mr Stewart - New South Wales bonds endorsed by the Commonwealth.


Mr ROSEVEAR - The contractors were prepared to accept New South Wales bonds without any guarantee by the Commonwealth, but the Loan Council would not allow the State Government to accept the offer.


Mr Bernard Corser - Would Lang have paid interest on it?


Mr ROSEVEAR - The honorable member might put that question to Mr. Lang. One remarkable feature of this resolution is the misleading wording of item v. : " revenue from taxation upon incomes, but not including revenue from taxation imposed by the Unemployment

Relief Tax Act 1931". The Assistant Treasurer stated that because of the specific exclusion of the proceeds of that act, the money raised for unemployment relief will not be claimed by the Commonwealth. The right honorable gentleman knows as well as I know that the special unemployment relief tax does not .nearly cover the payments made by the 'State Government for the relief of the unemployed. Moreover, all classes of revenue are paid into a common fund, and it is impossible to discriminate between one kind of income tax and another. The talk of separating one form of revenue from other forms is sheer hypocrisy, and the endeavour to make the people believe that the workless are sustained only by the revenue from the unemployment relief tax is a mere subterfuge. Every source of revenue is being tapped to provide work and sustenance for the unemployed ; therefore this House may as well delete the qualifying words in item v. and frankly tell the people what the Government is really doing. The Assistant Treasurer stated that the high basic wage in New South Wales is responsible for the distressful conditions in that State. If high wages are responsible for conditions in New South Wales, what is responsible for unemployment in South Australia? If low wages are the solution of the unemployment problem, let us got down to the coolie standard at once. Perhaps the right honorable member would be satisfied then. If this argument is sound, the coolie standard is the only remedy for unemployment. According to him, the lower wage3 are, the better it is for the country. Therefore, India, China, Japan, and other eastern countries, where the people work as long as the sun shines, for the lowest possible wages, should be the working' man's paradise, but even those countries have their unemployment problem. The fact is that the reduction * of wages will not solve the unemployment problem, and members of the Country party should be the last persons to advocate wage reduction. Owing to falling world prices for primary products, many farmers are suffering hardship today. The only hope for them is to develop a strong, local market, and that cannot be done by reducing wages.

Membersof the Country party should, in this at any rate, agree with us, because thehigher the purchasingpower of the people, the better it will beit the farmers.

I thank the honorable member for

Hindmarsh (Mr. Makin) for the lecturer which he gave to members of the group to which I belong.We are not particularly concerned with what he thinks of us, nor with what the supporters of the Governmentthink of us. We have certain definiteopinions on the subject of honouringobligations, andwe are preparedto act up to them. We believe that if people cannot pay, they should be given time inwhich to meet their obligations. The Federal Government availed itself' of the relief afforded by the Hoover moratorium, and the same sort of treatment should he accorded the Government of New South Wales. That Government is not defaulting because it wishes to do so. The alternative before the Government of New South Wales is to meet its obligations to the overseas bondholders, or to do its duty by the people it represents. It is one of the proudest claims of our party that the Government of New South Wales had no hesitation in saying that the people of Australia should come first. The honorable member for Hindmarsh blamed us for the position he is in to-day; but the honorable member cannot honestly blame any one but himself. If he were in his proper place, he would be among the Government supporters. He abandoned any Labour principles he ever had when he supported legislation which attacked the wage standard of the workers, and the pensions of those who were least able to help themselves.


Mr Martens - He both spoke and voted against the economyplan.


Mr ROSEVEAR - Certain members of the Labourparty, although they voted against the Scullin economy measures, first took good care to see that those measures would be passed. The honorablemember for Cook (Mr. Riley) was one of those. He whipped up his own partyto vote for the measure, but " squibbed " the issue himself, and voted against it. It is certain that if the Labour party could not solve the unemployment problem, the reactionary Nationalist forces will not be able to do so. We are not offering any apologies for our attitude in regard to these proposals. The factthat our group is in this Parliament to-day, even though we are small in numbers, shows that the people we represent support the action of the Governmentof New South Wales, and we represent some of the biggest industrial districts, in which the blows of the Scullin economy measures were felt the hardest.

The Unemployment problem was really responsible for the downfall of the Scullin Government, and it will bring about the downfall of this Government also. Those who organized the campaign of the party now in office were keen psychologists'; they recognized that the unemployed were becoming depressed, and were ready to turn to any party which would promise them relief. Numerous promises were made to the unemployed - promises which there was never any hope or intention of carrying out. Perhaps the Government thinks it is doing something clever in attempting to embarrass the Government of New South Wales by means of the debt enforcement legislation. No doubt, it is a shrewd political move, but it will inflict great hardship on the workers of New South Wales, and they are not likely to forget it. Honorable members who represent New South Wales constituencies will be held responsible for their support of the action that is being taken to-night.


Mr Stewart - The Premier of New South Wales would not accept my challenge to resign, and contest his seat against me.


Mr ROSEVEAR - All sorts of challenges are freely issued during election time. Donations are promised to hospitals, but the hospitals never receive them. Challenges to political contest are flung out but never eventuate. If the Premier of New South Wales were to bother his head about all the challenges issued to him by political cranks who want to contest his seat against him, his whole time would be given up to fighting elections.

As I said before, the Government is notconcerned whether this legislation is constitutional or not. We realize that if we had the wisdom of Solomon and the eloquence of Demosthenes we could not deflect the Government from its purpose.

No doubt the Government believes that it is obtaining a political advantage, but we realize that, unwittingly perhaps, it is doing itself serious inquiry in the eyes of the electors. Whether this legislation is found to be constitutional or not, the attempt to enforce it will inflict great suffering on the people of New South Wales. So far the Government's proposals have been carried out according to programme, but the next step, and the most important, is to seize the revenue of New South Wales. Judging from the statements of the Premier of New South Wales, who said that he intended to fight this legislation by any and every means in his power, I can promise the Government that it still has a tough job before it.







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