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Thursday, 4 May 1939


Mr McHUGH (Wakefield) .- I move -

That the House do now adjourn.

I have submitted this motion to enable the House to discuss -

The urgent problems of the wheat industry and the necessity of the Government formulating proposals to enable wheat-growers being assured of maintenance for their families, and economic security for their industry.

I feel sure that honorable members will realize that the wheat industry is of paramount importance to Australia, and in matters of national importance comes second only to defence. There is ho industry in Australia that I know of, which, directly and indirectly, provides more employment than it does. During recent years, a great deal has been said concerning it and there is a lot more can still be said'; but what is needed is immediate action. Definite declarations of policy were made in 1931, 1934 and in 1937 as to what would be done to stabilize the wheat industry if the governments then in power were returned to office. In 1931, the Prime Minister, in his policy speech, said -

The first duty of the next Federal Government in Australia, after it has put its financial house in order, is to investigate every avenue which promises encouragement to production from the land. Not only should all those who are now on the land be kept there, but their work should be more profitable, and all sound steps- should be taken to increase their numbers.

Prior to 1934, the members of the United Australia party and of the Country party emphasized the importance of primary industries. What did the Government at that time actually do? It spoke of assisting the industry and of the sufferings of those engaged in it, but nothing was done. The main promise of 1934 was of financial assistance amounting to £20,000,000 by means of a farmer's debt adjustment scheme, but until then nothing was done. Debt adjustment was merely a spectacular effort. It was said that £20,000,000 was to be expended in adjusting farmers' debts, but that amount was reduced to £12,000,000, and I understand that only £6,000,000 has been made available to various States to adjust a debt structure of roughly £140,000,000.


Mr ARCHIE Cameron - The honorable member did not expect the Government to write off £140,000,000?


Mr McHUGH - No, but it should have kept its election promise to provide £20,000,000 for debt adjustment purposes.


Mr Lane - The farmers do not want it.


Mr McHUGH - They do. Although governments comprising United Australia party and Country party members have been in office for some years, the farmers of this country are now in a worse financial position than they have ever been in the history of the industry.


Mr Archie Cameron - The party to which the honorable member belongs promised the farmers 4s. a bushel.


Mr McHUGH - I shall deal with that point later. The South Australian Government, which is of the same complexion as this Government, has been making similar promises with the same results. The wheat industry is of great importance to Australia, and although the commodity it produces is used so extensively for human consumption, the cost of production is 50 per cent, higher than the price realized for the product.

The bankruptcy returns, especially as they relate to the farming community, are enlightening. Had it not been for certain legislation passed by the parliaments of some of the States to protect the primary producers, the ranks of the unemployed of this country would have been greatly increased by many insolvent farmers. In South Australia, during the depression years, the legislative action of the State Parliament saved many farmers from immediate bankruptcy, but unfortunately the position of the industry has not improved, and very many farmers are to-day in a perilous financial position. In this connexion, I direct attention to the following paragraph dated Canberra, December 1 last, which appeared in the Adelaide Advertiser : -

Farmers easily outnumbered all other classes of Australian insolvents for the year 1937-38.

The annual report of the Attorney-General (Mr. Menzies), tabled in the House of Representatives to-day, Shows that 208 fanners became bankrupt or entered into deeds of assignment out of a total of 1,597. Most of the farming failures were in South Australia, totalling 221.

Many of those failures of South Australian farmers could have been prevented had a more sympathetic national policy been adopted. We know, of course, that no small measure of the disabilities of the South Australian farmers has been due to the fact that, for the last five years, the government of that State has been in the hands of a Liberal administration.


Mr Lane - A Labour administration would be worse than a Liberal administration.


Mr McHUGH - I disagree with the honorable member. If the policy of the Labour party had been implemented, the farmers would be in a much better position to-day. I believe that at the first opportunity they have, the people of this country will return a Labour administration to power. We shall then see a rapid improvement in the affairs of the primary producers. Protection should be accorded to farmers, just as it is accorded to those engaged in secondary production.

I know that the financial position of a good many of our primary industries is not so sound as it should be, but at the moment I am particularly concerned about the position of the important wheat industry. Perhaps the heaviest single burden that falls upon the farming community is the need to meet interest charges. As' the National Parliament alone can deal effectively with this problem, I have every justification for bringing it under notice this afternoon. Farmers' organizations in all parts of the Common wealth have held numerous meetings to discuss and analyse the position of their industry, and attention has been given to every minute detail of the complex situation which the farmers face. Definite conclusions have been announced in many instances as the result of these deliberations, and a unanimous decision has been reached that the affairs of the wheat industry should be stabilized without delay. Any action designed to achieve that end will have to take full account of interest charges.

Some time ago the Government, in its wisdom or otherwise, appointed a Wheat Commission to investigate the whole situation. I understand that this body cost the taxpayers of Australia £45,000. It travelled throughout the Commonwealth and investigated every aspect of wheat-growing. Personally, I think that that was unnecessary, for the economic difficulties of the industry were apparent. However, Sir Herbert Gepp, the chairman of the commission, was a most able man, and the commission over which he presided presented a most comprehensive report to the Government which, no doubt, all honorable members of this Parliament have read. It dealt in detail with the burden ©f interest charges upon the farming industry and pointed out that 5,000 farmers in Australia were paying interest equivalent to as much as ls. lOd. a bushel in order to continue their wheatgrowing activities. Yet to-day wheat is being sold for less than ls. lOd. a bushel. In these circumstances I challenge the Government to turn its attention to this vital problem. Does it intend to do anything for the wheat industry, or does it intend to continue to subordinate everything to defence activities? I admit 'that defence is the most important subject to which our attention could .be directed; but the wheat industry is of almost equal importance, and its stabilization is highly essential to the welfare of Australia. To-day many thousands of wheat-farmers are living under conditions very much worse than those of men who earn the basic wage. Many young farmers have very little to defend. Yet the wheat industry should be stabilized in the interests of the financial and economic security of Australia. Throughout this country many hundreds of store-keepers and men engaged in small businesses art dependent upon the stability of 'the wheat industry. It cannot be denied that if some thousands more farmers become insolvent they will drag with them into the bankruptcy court at least as many hundred business men. In these circumstances it is highly essential that the National Parliament should devote its attention to this important problem. The Government naturally has control of the business of the Parliament.


Mr Brennan - I do not know so much about the " control ".


Mr McHUGH - Neither do I for that matter, but, theoretically, the Government is in control and we have the right to expect it to initiate an effective policy for the stabilization of the wheat industry. I am particularly interested in the subject as I represent a rural constituency which is now supporting the biggest single party in the Parliament. I realize the difficulties that have to be faced, but it is the Government's business to face them. I am most concerned as to whither this industry is heading, and whether this Government proposes to shoulder its responsibility to stabilize it. For a long time the Labour party has had a policy for the stabilization of the wheat industry based on the contention that secondary industries in this country have been built up mainly at the expense of the primary producers who, unquestionably, supply the sinews of war, as it were, for the secondary industries. Our farmers are the real producers of the wealth of this country. "We must, therefore, provide them as well as other sections of the community with an Australian standard of living. It is not right that huge companies like the Broken Hill Proprietary Company Limited should be able to benefit to the extent they do by our protective policy while thousands of our farmers are being forced into bankruptcy. It is clearly recognized by the Australian people that we must effect a change in our monetary policy. This view is borne out in the report of the Royal Commission on Monetary and Banking Systems. We on this side believe that finance is the root cause of many of our economic ills, whilst it accentuates many others. A problem confronting- the Australian people to-day is whether Australia should be governed by the private trading banks with their policy of dividends first irrespective of consequences, or by the Government which has placed upon it by the Constitution the sole responsibility for matters involving public credit, currency and banking. The wheat industry dovetails into our monetary policy to such an extent that in its present crisis we should do something to rehabilitate it. [Leave to continue given.] When he was Prime Minister, the right honorable member for Yarra (Mr. Scullin) designed a policy to alleviate this industry. Honorable members know the fate which befell Labour's proposals in another place. Suffice it for me to say at this juncture that it was never given a chance because of an adverse majority in the Senate. We say that this industry should be assisted as much as possible. In the recommendations made by the royal commission which inquired into the industry, we find a statement to the effect that the Commonwealth Government, in the interests of national progress, could and should make available in a time of crisis, credit free of interest to an industry confronted with problems which, in the opinion of the Government, justify such action. In view of that statement, the way in which this industry should be assisted seems clear to me. We have modernized all forms of human activity. To-day a farmer can take off 300 bags of wheat in a day, whereas, our fathers, with a hand reaper and sickle, could produce only an infinitesimal quantity of wheat in the same time. The extraordinary progress achieved through modern methods of production were emphasized by various speakers in a. debate in this chamber last night. But has corresponding progress been effected on the human side of industrial activity, which is the more important? Shall we allow an obsolete monetary and banking system to hold up the wheat industry and drive our farmers to insolvency, or shall we extend to that industry the credit which is essential to its survival? Dr. Schacht, the economic adviser to the German Government, says that this amounts to pumping credit into an industry, but the fact remains that such assistance is essential to our wheat industry. During the depression years we made a number of peculiar valuations.

For instance, we valued the Australian nation and said that all our land and the equipment thereon were worth £4,000,000,000. If this young country with all its resources is worth that amount, then we should be justified in making, available a few million pounds in order to save the wheat industry. "We should follow that course rather than continue borrowing year after year, which seems to 'be the orthodox method of finance. We cannot go on borrowing from £20,000,000 to £40,000,000 every year, piling up a load of interest which our children's children will be obliged to shoulder. We should have sufficient intelligence and courage to face the problem now. If, unfortunately, Australia should become embroiled in war, I have no doubt that the policy which I am now enunciating as a means of assisting our distressed wheat farmers will unhesitatingly be put into operation by the government of the day, irrespective of its political complexion.

The Labour party's policy for the stabilization of the wheat industry may be stated briefly. Realizing the necessity for putting forward a scheme which will ensure a minimum price to the farmer for his wheat, and at the same time safeguard the consumer against exploitation, the Federal Labour party, puts forward the following proposals which embody requests that have been made by all the farming organizations throughout Australia during the past eight years, and in connexion with which the United Australia party and the United Country party have refused to take any action: -

We believe that growers should receive a home-consumption price of 4s. a bushel, irrespective of world prices or whether the export price is above or below that level. This home-consumption price should be the basis for the price of bread in. Australia. We. contend that- if the export price rises above 4s. a bushel one half, of the excess should' be paid to the growers, and one-half be contributed to a reserve fund to liquidate the advances made from time to time under the pooling system. Briefly, that is the Labour party's proposal.

Any finance needed from time to time to. assist the industry should be made available by the Govern- ment through the Commonwealth Bank. Under cover of this motion I could discuss the relative merits of protection and freetrade, as well as the policy of economic nationalism now operating in various countries; but I think it will be sufficient to say that the essence of Labour's policy for the stabilization of the wheat, industry lies in the effective control of the Commonwealth Bank in the interests of the people generally, and particularly in the interests of Australian wheat-growers whose future is at stake.

I hope that I have outlined clearly my own views and those of the Labour party on this important subject. I thank honorable members for the patient attention which they have given to my remarks. I have emphasized the serious situation of the wheat-growers because I realize the importance of the industry to the Commonwealth, and the urgent need for measures to save it. Many wheat-farmers to-day are living under conditions which would shock honorable mem'bers opposite. Such a state of affairs, I regret to say, exists in some parts of my electorate of Wakefield. The importance of this industry cannot be exaggerated. It is worth saving, and the time to act is now.







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