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Thursday, 17 March 1932

Mr JOHN LAWSON (MACQUARIE, NEW SOUTH WALES) . - I can at least compliment honorable members who have spoken this afternoon on the tone of their utterances, which indicates clearly that they are genuinely anxious to evolve some solution of this problem. I listened with a great deal of interest, in fact, with rapt attention, to the discussion on unemployment, a social disorder which touches indirectly or directly every citizen of the Commonwealth, and is afflicting some 20,000,000 to 30,000,000 persons throughout the world. The fact that this menace to our social life is so present to almost every citizen of this country gives one a vivid idea of the magnitude of the problem and the difficulties with which it3 solution is beset.

While individual governments might do a great deal to ameliorate the evils of unemployment, its permanent mitigation can be brought about only as a result of the united endeavour and common policy of all governments, each accepting to the full the obligations that that policy places upon them. Another vital essential to the solution of the problem is the whole-hearted support of the people to the governments concerned.

Last Friday the Leader of the Opposition (Mr. Scullin) spoke upon this subject with admirable restraint, as one who has had experience of the many difficulties of the situation. The right honorable gentleman referred to the fact that his Government had made available for unemployment relief some £2,500,000, and he indicated that it would be proper for this Government to follow a similar course. The right honorable gentleman must admit, upon reflection, that the making available of such a sum cannot in itself be regarded as a real contribution towards the permanent relief of unemployment. It is merely a palliative, which may effect a small temporary decrease in unemployment. I say emphatically that the indiscriminate scattering of largess among the people can never achieve any permanent useful result.

Other honorable members on both sides of the House have suggested that the Government should make available money to be expended on public works. Admittedly, that would give a stimulus to industry, but only in a restricted sphere. All fair-minded people will acknowledge that it would touch only the fringe of the problem, and would, in all probability, have the effect of diverting credits from private enterprise into governmental activities, so depriving private enterprise of the funds necessary for carrying on business. In this connexion, it is worth while to remember the statement that was made by the Prime Minister on this subject last Friday, to the effect that the banks were now being called upon to provide more money to finance government deficits than they had to advance some three years ago for public works. That hits the nail on the head, and indicates how utterly impossible it is, at a time like this, for governments to make very substantial provision for public works. It is obvious that the duty of this Government is first of all to balance its budget, and to insist that every State in the Commonwealth shall do likewise. The failure of any one State to make a genuine effort to balance its budget must make (the recovery of prosperity in the Commonwealth impossible.

Mr Dennis - How will that help the unemployed?

Mr JOHN LAWSON (MACQUARIE, NEW SOUTH WALES) - I ask honorable members not to rush me too fast at my hurdles. If in due course I fail to deal with what they have in mind I shall be quite prepared to answer interjections. While I would support the subsidizing of private industries of specified character, I admit candidly that I have no faith whatever in the average so-called schemes of unemployment relief work. They have been tried everywhere, and have never yet accomplished anything useful. If the disasters of the last two years, and the adversity with which we are now faced, has any lesson to convey, it is that we must cast aside false standards, and cease worshipping at the altar of economic fallacies. Even if we cannot learn to love economic principles, we should at least learn to respect them. It is only in that way that, we can hope to bring industry back to a reasonable state of prosperity. In" short, we should re mould the whole of our industrial life along lines which conform to the accepted canons of economics.

The suggestion has been made that the Government should undertake land settlement schemes. One member of the Opposition proposed that the Government should attempt to settle 10,000 men on the land. What on earth is the use of attempting to settle untrained and inexperienced men and women on the land when rural industry is not paying dividends even to those who understand it? Undoubtedly, we want more people on the land, but the proper way to effect that is to make rural industry profitable. If that were done, capital would flow into it, more land would be taken up, money would be available for improvements, and employment would increase. I recognize that the honorable member for Calare (Mr. Thorby) had but a little time to expound the policy which he is submitting to the Government on behalf of the Country party; therefore, I suspend judgment on it, although I express my doubt of its practical usefulness over a long period. The honorable member proposes the lending of large sums of money to primary producers. Whilst I have no doubt that the Government would be able to find borrowers, I gravely question whether the money could be profitably employed, having regard to the enormous costs which rural industry has to bear, and the fact that very few men are able to make it profitable at any cost. The honorable gentleman's scheme shows evidence of deep thought, however, and I shall await, with interest, his amplification of it. Secondary industry is in very much the same position as primary production. It cannot hope to increase the number of its employees until it can sell a greater quantity of goods, and that can be brought about only by reducing the wide gap between the prices of natural products and manufactured goods. All honorable members may not be aware that the average prices of the products of rural industry are 20 per cent, lower than they were in 1915, whilst the average prices of the products of secondary industries are actually 80 per cent, higher. This wide disparity, due to the extremely high price of manufactured goods, is making enormous inroads on the spending power of, not only the primary producers, but every section of the community. While it continues, we cannot have any real recovery of industry, and government-hatched schemes for the relief of unemployment will not substantially improve the situation. Governments should tackle the fundamentals of this problem. Obviously, we shall be foolish to await the return of profitable prices for primary products. The nation must adjust itself to the lower prices by making every endeavour to reduce the costs of living and production in order that the diminished national income may be spread over a wider field of industrial activity. This will involve drastic revision of the tariff, and a reduction of wage standards in order that they may conform to the lower cost of living which a reduced tariff will bring about. It will involve also a considerable reduction of interest charges on money lent by banks and other institutions to finance productive private enterprise. It will involve further drastic governmental economies, and a determined effort to reduce the load of taxation at present carried by industry. Another essential is that the Government shall, through its Minister in London, immediately take heed of the recommendations of the Macmillan Commission, and endeavour to discover what action is necessary to avoid those vagaries of currency standards which have had such a devastating effect on the prices of Australian primary products. It seems to me that we should endeavour to follow the advice given in that report, and endeavour to get down to fundamentals. There is an inclination to confuse the problem of unemployment in Australia with the world problems which have produced universal unemployment. I suggest that our problem is divisible into two portions - that which we can attack in Australia, and the wider aspect, which can be tackled by our representatives at the various conferences abroad. If we approach the problem in that way, we shall better realize its ramifications, and be able more effectively to seek a solution of it.

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