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Wednesday, 27 April 1932


Dr EARLE PAGE (Cowper) .- I do not intend .to make any excuses for supporting the bill now before tis. The bill contains three main provisions, with all of which I am in agreement. Clause 2 states -

No fine, penalties, forfeiture or other dis ability shall be imposed upon thu person by reason of the payment to the Treasurer or authorized person in accordance with this net or of the non-payment of the amount in question to the Statu.

A further necessary amendment is designed to exempt from attachment trust funds that happen to be in the possession of banks, and standing in the name of the State Government. I am pleased that this amendment is being made without delay, because the act as it stood was occasioning concern to many public servants and others in New South Wales. Everybody will now know that there is nothing to fear in respect of such funds. The third principal amendment provides that the Commonwealth Government shall have power to attach any State funds or revenues which may be required to meet the just claims of the Commonwealth against New South Wales.

The Leader' of the Opposition (Mr. Scullin) said that on Monday next the Commonwealth would proceed to the High Court for a declaration as to whether this money claimed is really owing by New South Wales. Surely, however, everybody in Australia knows what the position is in regard to this money. They know that the Commonwealth has -already paid the money in satisfaction of debts owed by New South Wales. There is not the slightest doubt as to the verdict which the High Court will give, and that is why Parliament gave the Government permission to go forward on the certificate of the Auditor-General. The Commonwealth is- merely seeking to recover the money which was paid to overseas bondholders on behalf of New South Wales. Mr. Lang himself admitted that New South Wales owed this money when, in February last, he said that he was prepared to pay a portion of it. He did not at that time dispute that the whole amount was owing. If the Commonwealth Government now finds it necessary to attach further revenues in or.der to recoup itself for what it has already paid away, Parliament .should give it that power as soon as possible. Next year New South Wales will be called upon to pay £6,500,000 in Australia, and £8,5:00,000 overseas. If sue defaults in respect to the whole of that amount, and the Commonwealth takes no measures to secure the money from New South Wales, there will be a general default throughout the whole of Australia, because the Commonwealth will not otherwise be able to find £15,000,000 outside of New South Wales revenues. Mr. Lang has said that such a default is inevitable, and he is certainly doing his best to bring it about. He has already befouled the good name of New South Wales, and he is now trying to drag down with it the credit of Australia. The Country party will stand behind the Government in any action it takes to keep the credit of Australia high, and its reputation clean.

It will be remembered that, when the original enforcement hill was before the House, I suggested that the schedule should enumerate all New South Wales revenues, so that there might be no delay in recovering the money due if obstacles should be placed in the way by the Government of New South Wales. An attempt is now being made by the Government of New South Wales to make it appear that all the evils and misfortunes which have fallen upon the people of that State are due to the action of the Commonwealth Government in trying to collect the money due to it. Such a claim is absurd. Most of the misfortunes of New South Wales may be attributed to the fact that the Government of that State will not march in step with the other governments of the Commonwealth, which are endeavouring to honour their just obligations. It is necessary to live in New South Wales to understand the position which has developed there. A condition amounting almost to anarchy obtains. The banking institutions, which were established under State law, cannot now carry on ordinary financial activities for the Government. We find ourselves back under primitive conditions. The State Government is sending out men with leather bags full of money, accompanied by armed escorts, to pay the ordinary services in various parts of the State. Many public servants are not receiving payment at all. Surely there is no reason why the Government should not be able to pay for all ordinary services, including child endowment, when it has defaulted in respect of millions of pounds of overseas interest and is now defaulting in respect of millions of pounds of interest due to Australian investors. The New South Wales Government ought to be able to act most generously in regard to all the activities it ordinarily sustains, seeing that it has ceased to pay interest on the money it owes. It cannot blame the Commonwealth Government for its financial embarrassment; the blame rests entirely on its own head. Not only is the action of the Government of New South Wales bringing about a condition of anarchy - a sort of creeping paralysis of industrial and economic life in that State - but it is delaying the rehabilitation of Australia. Anything which the Commonwealth Government can do to bring to a speedy end the present regime in New South Wales will have the support of the Country party.

Mr. Langhas said that he desires to bring about a reduction of interest, especially on debts owed overseas. What, I ask, is the main obstacle in the way of securing a reduction of overseas interest? It is the repudiation by Mr. Lang himself of his overseas interest obligations, his defiance of the policy of the Loan Council, and his departure from the standards of honesty that have been observed in this country for so many years. How can we place our New York and London stocks on anything like a decent basis that would permit a consolidation or conversion at cheaper rates while one State, which represents two-fifths of the population of the Commonwealth, and owes nearly half of the total State indebtedness, refuses to pay interest on -the money that it has borrowed to build what were described in the loan prospectuses as reproductive works? How can we fund our short-term indebtedness and get rid of that nightmare of the various governments of Australia, if the policy and the actions of Mr. Lang and his government render impossible any improvement of the position of our stocks in the money markets of the world? I am satisfied that Mr. Lang, by his actions, is preventing that restoration of confidence which is absolutely necessary if we are to effect a big consolidation of our overseas debts that carry a high rate of interest. He is making it impossible for us even to initiate negotiations to that end. I am confident that, had there been no talk of repudiation by the Government of New South Wales, had it stood up to its obligations and faced the crisis in a courageous and manly fashion, as other governments did, by now our interest rate would have been reduced by 1 per cent, or li per cent on that portion of our debt which carries a high rate of interest. I was in favour of such a reduction, and advocated it in this House long before Mr. Lang raised the question. He and his party wish to take all the credit for whatever reduction of interest has been brought about within Australia. All that he did was to give effect to -the decision of the Premiers of the States, in conference assembled, last year. Now he says, "It is our policy; we thought of it first." What he and his party thought of first was a refusal to pay anything. All. other governments in Australia were honestly prepared to deal with the matter on the basis of negotiation, and have done so. By its alliance with them, Mr. Lang'si Government has benefited from that policy. I am confident that our overseas indebtedness can be handled in a similar way if we can get rid of this cancer in New South Wales which at the present time is sucking the lifeblood of Australia. The policy and the action's of Mr. Lang are definitely preventing the rehabilitation of Australia, and particularly the absorption of the unemployed. The first essential to that absorption is, not a governmental loan for the carrying out of some temporary work, but the restoration of confidence in the minds of private investors and private industry generally. At the present time there is operating in New South Wales the policy of terrorizing private industry by confiscatory taxation. The threat has been made that there will be a capital levy, a tax of 5s. in the £l for the relief of unemployment, and other measures of a similar character. Already those threats have resulted in the transfer of capital from New South Wales to Victoria to the extent of many' millions of pounds, and the withdrawal of many more millions from active participation in business and industry because investors dare not use the money for outside enterprises. Any action that may brins' to an early end this condition of affairs deserves well of Australia, and should receive the support of every member of this Parliament. I feel sure that it will have the support of every rightthinking man and woman in Australia, irrespective of their political opinions.

The question arises, how can we bring this matter to an end ; what means are at our disposal ? For almost a year, in New South Wales, there has been the expectation that Mr. Lang would go so far beyond the bounds of decency and so transgress the law, that the representative of His Majesty in that State would be forced to send him to the country.

Nearly a year ago a petition containing 400,000 signatures made that request. At the present time, the people of .New South. Wales are hoping that he will overstep the mark in such a way that cognizance of his action must be taken by the Governor,, and that they will thus be given an opportunity to bring his regime to an end, and so enable the whole of Australia to get on with its job.

I hope that there will be an early election in New South Wales. I have not the slightest doubt what the result will be. I realize that all sorts of red herrings will be drawn across the trail. The Federal and other governments will be charged with cruelty and many other crimes against this particular State. But what is the use of talking about a lowering of the standard of living by the reduction of wages when hundreds of thousands of our people are receiving no wages at all! Surely our first concern is to restore our people to employment! That can be done if all parties in this country will combine, as they did during the war, and say " We are willing to suffer a certain degree of hardship for a year or two if we can win to a future that will be worth while. We have had our spree; we have been extravagant; now we must pay the price." We shall never regain prosperity by resorting to the monetary tricks or the criminal devices that have been suggested; that is generally recognized. If a general election in New South Wales is to be indefinitely postponed, the Commonwealth Government should take every step that is open to it to end the existing regime.

Various country movements have made known their views; they have pointed out that, if eighteen Or 21 months are to elapse before Mr. Lang faces the constituencies, they cannot see how New South "Wales can. continue to exist. This Government has been asked by the country movements to endeavour to bring about a change in the Constitution that will permit the people themselves to have some say immediately in the division of that State; to pull the horse from under the Government if they cannot pull the Government off the horse. 1 am assured by the Government that earnest consideration is being given to the question of endeavouring to have incorporated in the Constitution those provisions to facilitate the division of existing States without reference to the State Parliaments but on the initiative of the people alone, which the Commission on the Constitution, over which Sir John Peden presided, suggested would be supported by every party in Australia. These provisions received the unanimous support of the National party, Country party, and Labour party members of that commission. If that were done, the people of New South Wales would be in a position to deal with the Parliament of that State at the earliest possible moment and end this present regime

Last year, when the question of repudiation was first raised in this House by the action of the Lang Government, it will be remembered that I moved the adjournment of the House. I then urged that, the sooner we removed Mr. Lang from the position of being the only repudiator in Australia, the better it would be for Australia as a whole, and the quicker we would get on with Australia's, reconstruction. The proposal then put forward received the support of the honorable member for Kooyong (Mr. Latham), that the British Parliament itself should be asked to subdivide the State of New South Wales, and thus place "lie honest portions of the State in a position to stand up to their obligations. If New South Wales still refuses to pull its weight with the other States it will not be possible for Australia to carry on for another eighteen months. The Attorney-General (Mr. Latham), then Deputy Leader of the Opposition, said -

Suppose a particular area of New South Wales, containing a population greater than that of some of the existing States, to be practically unanimous in its desire to form itself into a new State, and suppose that practically unanimous desire to arise from a definite infringement of the law by the Government of the State; and suppose the Parliament representing the whole of Australia to be also practically unanimous in its wish to give effect to the desire of the area concerned, then under those extraordinary aud exceptional circumstances, it would bc certainly proper to consider the advisability of applying to the Imperial Government to exorcise its supreme legislative authority. At the 1930 Imperial Conference it was expressly agreed by the governments of all the dominions and the Government of Britain that Imperial legislation might properly be passed relating to any dominion at the request and with the consent of that dominion. That is a useful reserve power, and should, I believe, continue to exist.

In normal circumstances no one would dream of suggesting the utilization of such a power, and it is only because of the present very exceptional circumstances that I suggest that the Government should at least consider the desirability of taking what I admit to be an extraordinary action to deal with an extraordinary situation. ... I suggest that the Government should seriously consider this proposal.

Those remarks have infinitely more weight now, because the position in New South Wales has since become indescribably worse. The Government of that State has not only adopted a defiant attitude, but has also repudiated all its debts. It has no real money, nor facilities for handling money, with, which to 'finance the ordinary activities of New South Wales, and it is only a matter of time" when the Commonwealth will have to take action to carry out the social, and, possibly, the essential services of that State, otherwise the people will starve because of the failure of the Lang Government to do so. The Lang Government is now trying to prevent any taxation, including State income taxation, from being collected, and, as a result, the prospective deficit of New South Wales is likely to be enormously increased. How is this National Parliament to deal with the position % We have a tremendous responsibility placed upon us. The

Government of New South. Wales is absolutely blocking any attempt to commence at an early date the rehabilitation of Australia. I am prepared to support - and I am speaking for the members of the party in this corner - any action that the Commonwealth Government takes to bring to an end this dreadful position, which no one ever contemplated would exist between the Commonwealth and the State of New South Wales.







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