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Thursday, 14 April 1921


The PRESIDENT (Senator the Hon T Givens (QUEENSLAND) - 'Order! The honorable senator cannot proceed along the lines which he is now pursuing, because, in addition to the fact that his remarks are scarcely relevant to the Air Defence Bill, he is transgressing a rule of the Senate that an honorable senator may not discuss the subject-matter of a motion which is, upon the notice-paper. In the course of discussing the motion to which I allude the honorable senator will be perfectly in order in traversing everything that was mentioned by the Minister for Repatriation in the statement which he made to the Senate yesterday, but he is not in order in discussing that subject under the present motion.


Senator GUTHRIE (VICTORIA) - Then, sir, I shall state the reasons why I support Senator J. D. Millen's amendment. My attitude is based on the fact that I be lieve in the urgent necessity for economy. That is no parrot cry, but a very live and pressing need of the Commonwealth to-day. We cannot afford to spend the large sum of money involved in the venture set forth in the measure under discussion. We have in Australia loans maturing during the next seven years amounting to £359,795,204, on which we are only paying interest of £4 12s. 0½d. per cent., so far as the Commonwealth' is concerned, and £4 0s. 3d. per cent, with respect to the States. When these loans mature, and must be renewed, we are not likely to get the money under 6 per cent., which would mean an extra interest bill of £5,400,000 per annum. In the course of the next twelve years we shall have loans falling due amounting to the huge aggregate of £508,000,000. I would like all honorable senators to read the very able speech delivered in Perth the day before yesterday by Sir Henry Braddon. At the same time, I should like honorable senators to read that wonderful book by Owen Wister, called "A Square Deal."

I maintain that instead of spending money at the present time on air defence the Government would be better advised in increasing the expenditure on immigration. The best defence of this country is to be found in increased population. Not only will it lessen the taxation per head of the people, but it will be by far the best and safest way of defending the country. In my opinion, the optimistic view adopted by the Commonwealth Treasurer at the present time represents quite a menace to- the financial stability of this country. He has been basing his estimate upon the great prosperity of the last few years, when Australian producers, concurrently with good seasons, have had record high prices for our raw products. It is by the export of raw products and the margin of our exports over our imports that Australia lives. I draw attention to the fact that, owing to the huge returns from the high prices of wool and other commodities the Treasurer (Sir Joseph Cook) has been able to secure from income taxation a revenue of £13,000,000 a year. We have, at the same time, been overimporting, and we have enjoyed a huge Customs revenue owing to the fact that we have imported a tremendous volume of commodities at record high prices. There is a decline in the volume of our exports staring us in the face. I make the statement that, during the next two or three years, exports from Australia will decline by 5.0 per cent. During the next few years there will be practically no income on which to levy taxation, and, therefore, the Treasurer must look forward to a greatly reduced revenue from that source. Because of the tremendous decrease in our exports we shall have no money wherewith to buy imports, and. there must, therefore, be an enormous decrease in the volume of our imports, and a . consequent decrease in our Customs revenue.

Taking wool, which is the staple product of this great continent, I may inform honorable senators that for the last three years the average amount of money that has come into Australia as the result of our sales of wool has been £47,823,688. For the year ending 30th June, 1921, we will not receive £15,000,000. I do not like to be pessimistic on the wool question, or .any other, but I do not think that we can rely upon a return from wool in the next two years of more than £15,00.0,000 per. annum, as against an average of over £47,000,000 per annum for the preceding three years.

If we take wheat, the position has been saved this year simply because we have had the benefit of a record crop of 16 bushels per acre, the highest yield ever known in Australia, and wheat is at a record price. The result is that this year's wheat crop is valued at £58,500,000. That is not going to recur. It was more or less a fluke, and we must be guided by averages.


Senator Wilson - It is not all paid for yet.


Senator GUTHRIE (VICTORIA) - No, but it will be paid for. I am afraid that, because of the return we are receiving this year from wheat, the Treasurer has been led to believe that all is safe and serene, when, as a matter of fact, in my opinion, our financial position is desperately dangerous. We must be guided by averages, and the annual average amount of money obtained from wheat in Australia has been only £19,000,000 for the last fourteen years, as against £58,000,000 this year. ,


Senator Crawford - Has the honorable senator referred to the total return for wheat or only from wheat exported?


Senator GUTHRIE (VICTORIA) - - 1 say that the average total value of the wheat crop of Australia for the last fourteen years has been £19,234,096. The value of this year's crop is £58,500,000, at 9s. per bushel. That covers the value of the total crop. The value of the wheat for export this year, according to the estimate of the Department, is £52,000,000.

Let us consider" now another great primary product which- we' export, namely, meat. In 1919-20 we exported meat from Australia to the value of £10,000,000. Owing to the excessive freights charged by 'the Shipping Combines on frozen produce and the declining value of meat in the world, I doubt whether in the next two years we shall be able to export a quantity of meat sufficient to earn for this country any substantial revenue.

If we take the gold production per annum we shall find that in ten years it has declined from a value of £10,557.000 to £4,537,000. I am referring to these matters in detail, to show that our great primary products are collapsing in value to such an extent that we are not likely shortly to have any material income upon which to levy taxation or with which to import largely, and,' therefore, our revenue from Customs duties must fall off enormously. If we go on spending money as we have been doing in the past we shall send the good ship of State slap-bang on to the rocks. I feel that the Government have not taken into consideration the enormous slump in the value of our great raw products, upon which we depend, and I maintain that the export of raw products from Australia for the next two years will be 50 per cent, below the average of the past two years. I. therefore, ask whether we can afford to go on spending in the lavish way we have been doing?

Direct taxation. has been so heavy that we cannot possibly further penalize ' the producers 'by increasing it. On the contrary, I believe that they will be unable to continue to bear the taxation already imposed upon them unless the prices for raw commodities such as wool, meat, skins, oats, and other grains improve. If the Government must increase taxation to meet the decline of revenue which may be expected' on the important items to which I have referred, they must tax luxuries. I do not care to what extent they tax luxuries - but they will receive no very great income from that source.

I consider the state of affairs so serious that in order to balance the ledger the Government may find it necessary to tax articles of necessity such as tea. kerosene, and similar articles.


The PRESIDENT (Senator the Hon T Givens - Order! The honorable senator is not in order in discussing the principles of taxations Such a discussion cannot be regarded as relevant to the motion now before the Senate. I have allowed the honorable senator considerable latitude to show that, in his view, the state of the finances does not justify the passing of the Bill, but a general discussion upon taxation is not relevant to the question before the Senate, and I cannot allow the honorable senator to continue further on those lines.


Senator GUTHRIE (VICTORIA) - Can I point out why I think we have no money to spend on Air Defence?







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