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Thursday, 17 June 1926


Senator LYNCH (Western Australia) . - This bill can be regarded as rather an old friend- in this chamber, since this is about the fourth occasion during the last fifteen years on which a proposal of this description has been brought before Parliament. The question, of amending the Constitution has been before the electors for many years, and, although the effort has been persevered with on. three previous occasions, it has not been attended with success. The present attempt differs vastly in every sense from the three preceding ones. Fm instance, we find men of opposing shades of political thought coming close together, and advocating the adoption oi these proposals, which in itself is. a healthy sign. I do not bewail the prospect presented to the people of members of political parties being so much opposed to each other, and so jealous of their own particular policy, that the views held, or opinions expressed, by others are to them almost anathema. Some people, however, are dissatisfied. To that view I am totally opposed, for the simple reason that in the political control of a country one must allow room for the many opinions of others. Any party or individual that is irrevocably bound to the one opinion, does not understand the ordinary rudiments' of liberty. With a proposition such as this, there is an opportunity to stir up the cauldron of public opinion, and to reach a point from which the electors can regard such political proposals from a different aspect. A good stirring-up is an excellent antidote to stagnancy. This is a very important measure, and one to which I feel inclined to give a new title. I suggest that it be termed " An act to develop a more enlightened perspective of the problems that impede our national progress and a. deeper knowledge of the methods required for their solution." If such a title is not acceptable, I suggest that the act be termed "An act to encourage common sense in public deliberations and more tolerance in the discussion and settlement of public questions." I welcome 'the bill, if only for the good it will do in getting men outside themselves, and of encouraging a more wholesome and much desired kind of diffidence in the political faith in which they have lived for some time. It is a strange expression, but it is time, because of the spectacle presented to us. In this instance, men who formerly opposed the proposals are now advocating them, certainly in a modified way, and

Ave have others who advocated them, also in a modified way, asking us now to believe that they are opposed to them. A wholesome convulsion has been brought about in the public affairs of this country, the ultimate result of which, we hope, will be that the country and the people will benefit. After all, that is the desideratum. One objection raised is that this measure is being introduced owing to a lack of political courage. What is political courage? We are showing that we possess a liberal amount of political courage, because, for the fourth, time, we are asking the electors to accept proposals which, they have previously refused to adopt. A courageous act may be defined as that of a man going out to fight a battle against great odds. The Government is going to ask the electors to adopt proposals which, on three different occasions, have been rejected. It is only men of courage who would dothat. We shall be up against the difficulties always experienced by those who* have anything to do with moulding or directing public opinion.


Senator McHugh - Does the honorable senator think that the proposals will receive the support of the people on this occasion ?


Senator LYNCH - I do, in spite of any little sprag some may endeavour to put in the wheels of the coach. On the present occasion, I believe the Government will win. We should not, however, shut our eyes to the fact that there are many difficulties in the way, and that many are needlessly afraid of the results which may follow. Some of the difficulties anticipated will doubtless materialize, but they will surely be overcome.

It is an important task to amend the Constitution. In regard to public questions the average man is inclined to leave matters as they are. The average citizen, to a large extent, is more concerned with his own affairs than with any proposed amendment of the Constitution, which does not come within the ambit of his own personal activities. He is more engaged with the affairs of the world, and in fighting for a crust. I do not propose to endeavour to disturb the equanimity of such gentlemen, other than to advise them that an amendment of the Constitution in the direction proposed is in their interests and those of the whole Commonwealth. The present situation should cause every citizen to put on his considering cap. Our industrial position is almost chaotic. Our arbitration system is difficult to understand, and ' its results are anything but satisfactory. It is, therefore, the duty of the chosen representatives of the people to give a lead to the electors in these matters, and to direct them on the right course in this considerable sea of difficulties. It has been truly said by the sponsors of this proposal that arbitration at present is not by any means the accepted and acknowledged method for settling industrial disputes. Most members of the employing class in the past were opposed to arbitration. Their number, however, is dwindling. Many of those in whose interests arbitration, as a means of settling disputes, was established are opposed to it. Arbitration was introduced chiefly in the interests of the workers. Some of us can recollect the time when there was no arbitration system; when industrial disturbances were settled by the brutal and unsatisfactory means which had operated for centuries in old world countries. We know what happened then when a strike took place. During the great maritime strike, numbers of persons endeavoured to intervene between the contending parties, but the only successful mediator was starvation. When the wives and children of the strikers were reduced to a state of actual starvation, the strike came to an end. We do not want that mediator to intervene again in this country. When, in order to prevent a repetition of those conditions, arbitration as a means of settling disputes was first advocated, it had a mixed reception. There were some who realized that the .time had arrived when reason should supplant force as a means of deciding industrial questions. The bulk of the workers were in favour of the new method, as were also a few employers. The latter were men who, at all times, were ready to do the fair thing by their fellows, requiring no force to compel them to do so. Unfortunately, however, the majority of the employers were opposed to arbitration. The third section, I refer to the general public, was, for the most part, silent. They were the people who suffered most from the continual disturbances that took place, and they realized that some saner and more humane method of settling disputes than had existed in the past was ncessary. In time, through .the efforts of a combination of workers, employers, and members of the general public, public opinion was formed in favour of arbitration as a means of settling industrial disputes. That was 25 years ago. Since then, many changes have occurred. The very section of people in whose behalf arbitration was introduced now makes it difficult for arbitration to continue as a means of settling disputes. Some of them during recent years have acted in a manner which would justify the conclusion that they were bereft of their senses. The result of this and other causes is that, to-day, the system of arbitration is at the crossroads. Because of a conflict between Federal and State jurisdiction, arbitration, as a method of settling industrial disputes, is in an unsatisfactory position. It has not the whole-hearted .support of the people. It must be shifted from that position.

Three courses are open to us. First, we may leave the settling of disputes to the States, the Federal authorities withdrawing from this sphere of authority. Secondly, we may endeavour to make a clear line of demarcation between the jurisdiction of the State and Federal authorities, leaving the latter in the field. That would leave us in practically the same position as we are in to-day. The third alternative is to vest arbitration in one authority. That, practically, is what this bill proposes. It is clear that we cannot adopt the first expedient. We cannot hand the working of our arbitration system to the States because each would necessarily have regard first to its own interests, and would so shape its policy as to serve them. Any advantage sought by one State for itself would, in selfprotection, be followed in turn by the other States. The result would be greater confusion thannow exists, and arbitration as a system of settling disputes would be brought into contempt.


Senator McLachlan - Is that not the position to-day?


Senator LYNCH - I admit that the present position is almost intolerable. The second alternative is to define the spheres of the States and the Commonwealth.


Senator Payne - There must be a recognition of the varying conditions throughout the Commonwealth.


Senator LYNCH - Any system which provides that awards shall have effect within areas defined by arbitrary boundaries, such as the boundaries of a State, is ridiculous. Awards should be based on other considerations, such as climatic and local conditions. It would be ridiculous, for instance, to make the same award apply to workers in Cooktown, in Queensland, as to those in Bendigo, in Victoria.


Senator Payne - That is what the Public Works Department does. In Tasmania the poles for carrying telephone wires are covered in the same way that poles in tropical areas are covered, to prevent them from splitting.

Sena tor LYNCH. - I was referring to the necessity for arbitration awards being regulated by other considerations than State boundaries. It would be wrong to make the same award for persons engaged in the business of slaughtering animals in Wyndham, in Western Australia, and Kensington, in Victoria. I have referred to the danger of further delay. There is too much at stake. Arbitration as a means of settling disputes has come up for judgment. If, as a system, it fails to receive the support of public opinion, as it is in danger of doing today, it must be sacrificed, and we must fall back upon the old expedient to which I have referred. It is interesting to note that the great bulk of employers are supporting these proposals. I have received a communication from the Chamber of Manufacturers, in Perth, in support of them. I have here, also, a publication entitled Liberty and Progress, which contains the following : -

To make the Commonwealth Parliament the ultimate source of industrial power, and at the same time to provide that the exercise of the power shall be intrusted to an independent non-political tribunal as embodied in the Commerce and Industry Referendum, is the shrewdest and most practicable proposal that has yet been made for the cure of our industrial ills.

Looking through the advertisements in this publication, I see such names as the New Zealand Loan and Mercantile Agency Company Limited, the Australian Mercantile and Finance Company Limited, and W. Angliss and Company Proprietary Limited, which are sufficient to show the nature of the organ and the section from which it receives support.


Senator Findley - Some employers are associated with the Single Purpose League. They believe that arbitration is a curse.


Senator LYNCH - I have already referred to that section of the community which is standing in its own light, and whose action tends to belittle arbitration. I refer to the employees.


Senator Findley - It is the action of the employers which has brought arbitration into disfavour.


Senator LYNCH - That is not so, as the extract from Liberty and Progress, which I have just read, indicates. I do not think it is of much use to hark back to the past, unless history can supply a good objectlesson. But I am particularly interested in pointing out the folly of these men who are standing in their own light and doing theirbest to bring the Arbitration Court into contempt. As one who took a share in ripening public opinion to the point of accepting arbitration, I am availing myself of the opinion of men who are not now following the advice of those leaders of the Labour movement who helped to father this reform.


Senator McLachlan - Labour did not institute this reform. It was instituted in South Australia by Charles Cameron Kingston, and in New Zealand by Mr. Seddon.


Senator LYNCH - There is a minority in trade unionism which, to-day, is opposed to arbitration, and, if my remarks on this occasion will bring them back to a saner mind and a realization of the valuable work done in the past by the leaders of Labour, good will be done. If I refer to actions of the past, I do so in order that good may come of it. Some time ago the local correspondent of the London Times sent the following to his newspaper : - :

There is much discontent with the arbitration system, which official Labour roundly declares to be a failure.

Mr. Grayndler,secretary of the Australian Workers' "Union, was asked for his opinion on this statement, and he said -

The statement is quite contrary to facts. There has not been such a declaration from official Labour. By far the majority of unions in Australia favour arbitration; but a strong minority is against it. If the defects in the act were removed, or the powers of the court enlarged, arbitration would prove a great gain to the nation as a whole.

I cite Mr. Grayndler's statement for the edification of those men who, although in the same political camp, are, apparently, rushing to the conclusion that it would be wrong to accept the Government's present proposals. I am pleased to be in possession of that opinion given by a leading member of the Labour party, and the active mouthpiece of a body of workers numbering 150,000. To their everlasting credit be it said that the members of the Australian Workers Union have been a buttress and pillar to the work of arbitration in this country for many years. I contrast Mr. Grayndler's attitude with that of others who have done their level best to bring arbitration into ridicule, because it shows that we have in this country a solid backing of public opinion in favour of sustaining arbitration amid opposing shades of public opinion. This leads me to the further remark that, unless a change is made and arbitration is taken out of the sea of turmoil in which it is at pre sent, that body of public opinion will be subject to erosion, and may. dwindle until arbitration reaches that state of contempt when the people will not have it, and will strike our arbitration laws off the statute-book. It is, therefore, to the interests of the workers of this country to see that the proposed amendment of the Constitution is accepted by a very substantial majority. Notwithstanding the efforts of some of those false friends to whom I have referred, to destroy it, arbitration has done a mighty lot of good in many directions. One can enumerate the good it has done in a negative way to show its public beneficence. A great deal lies to its credit in the work it has actually done to prevent strikes, but we cannot enumerate those occasions. They remain like the unlisted legion. We do not know actually what they are, but we do know that because of the existence of the Arbitration Court men have been prevented from coming into unpleasant conflict. Mr. Justice Higgins has placed on record the fact that from 1914 to 1917 there were 1,647 strikes in Australia, but there were only three of these that could possibly be entertained by the Commonwealth Arbitration Court, over which he presided. The fact that 1,647 strikes occurred in Australia within three years is not a very good commentary on the State industrial tribunals as compared with the Federal court, and the figures are all in favour of the application of the Federal system limited, harassed, and hamstrung as it was during those years.


Senator Sir Henry Barwell - Those figures cannot be correct, because the Federal Arbitration Court covers the whole sphere.


Senator Drake-Brockman - During the whole existence of the Federal Arbitration Court there have been only seven interstate strikes.


Senator LYNCH - Mr. Justice Higgins also tells us that in five years, from 1914 to 1919, there were only three disputes which fell within the jurisdiction of the Federal court, and were unaccompanied by strikes.


Senator McLachlan - There was a much larger field for the State courts to cover.


Senator LYNCH - But even giving that in, there is a wide disparity between three disputes and 1,644.


Senator Drake-Brockman - There were 350,000 unionists registered under the Federal court, and 500,000 registered under State courts.


Senator LYNCH - I come now to point out how the Arbitration Court has suffered rather than gained from interference by governments and parliaments. Without that interference, it would not have experienced so much trouble. On occasions the Federal Government, with the cognizance of the Federal Parliament, has stepped out of its recognized sphere to take part in another field of activity not properly belonging to it. In my opinion, the Government has a recognized ambit in which to move, and if it moves out of it into a judicial sphere it certainly abandons a traditional rule, and is guilty of an act that public opinion will never endorse. I recognize that it was very sorely pressed to do so on one occasion to which I refer, but I shall quote one example of the harm done by Government interference with the functions of the court. It brought about many strikes that would not have occurred but for that interference. In 1919, when the war was over, and there was no excuse on the ground of the exigencies of war to prompt the Government for what it did, it interfered during the progress of a seamen's strike, and a Minister assumed the role of arbitrator. I protested against it at the time, but was unsuccessful in getting sufficient backing in my protest against the action of the Government. The seamen, who were working under an award of the Arbitration Court, violated that award by going on strike and holding up shipping. Faced with the necessity of getting them back to work, the Government set up a special tribunal to settle the dispute, and that tribunal was a Minister who fixed such rates and conditions as upset the whole scheme of rates and conditions throughout the maritime trade, and created no end of trouble and disruption in that trade. For example, firemen's wages were raised to £16 a month, while the engineers working alongside, who have to go through a special training in order to follow their avocation, were only earning £15 10s. a month. The natural result was that, although the seamen's strike was settled, the action of the Government of the day led to unrest and dissatisfaction in other branches of the maritime trade.

First of all, the engineers went out on strike, and the ships were once more held up. The engineers rightly discerning that the seamen had gained by their unlawful action, followed their example. It is said that if you take one foolish action, you must follow it up by a second. The moral is not to take the first foolish step. It was the first foolish step the Government took that produced the inequality between the two branches of the maritime trade. Of course, a second tribunal had then to be created to raise the wages of the engineers to £19 10s. a month, and when that was done, as the result of the Government's unwarranted interference in the maritime trade, it is easy to imagine what effect it had among the multifarious trades throughout the country. Others immediately said that they must be treated in a corresponding way, and the result was that the Arbitration Court was brought into disfavour.

I support the present Government's proposals, so that future governments, parties, and parliaments may be prevented from taking similar action. There was no warrant at the time for the action of the Government of the day, and I protested at the time that if the Minister could not raise the wages of all sections of the community, he had no right to lift those of one section. But I could do no more than record my protest. I shall mention yet another of the many instances of interference. The coal-miners in New South Wales have a habit of tearing up awards as if they were of no moment or benefit, although much labour andanxiety has been associated with the creation of the various industrial tribunalsappointed in this country. The coal-miners occupy a strategic position, and are able to hold up society. They set out on one of their manyjaunts in 1917, when the country was at war. Although working under an award, they suddenly decided to use their power to the utmost. The Federal Government desired the President of the Commonwealth ArbitraCourt to take the matter in hand, but he refused to do so unless given a free hand to weigh the evidence and come to a decision. I admit that the government of the day was in a sore plight regarding the transportation of material required at the front. Thereupon the Prime Minister appointed a special tribunal, and the coal-miners obtained all that they had demanded.

By such misplaced generosity these men and others are encouraged to seek time after time the same favours as those granted in the first instance. The miners solemnly . agreed not to cause further industrial trouble. They undertook to work without interruption while the war was in progress, but that promise was deliberately broken. When the tramway dispute over the card system occurred in New South Wales, those miners went on strike again. When one false step is taken, the community is bound to suffer.

I cannot understand any honorablesenator refusing to advocate on the public platform the granting of the power proposed to be taken. It will result in the establishment of an authority that will decide industrial questions without being bullied and overridden by any parliament or government of the day. Unionists, such as the coal-miners and those engaged in the maritime trade, who go on strike because they are conscious of the power they can wield, inflict a sort of mild blackmail on society. Time after time they sacrifice the interests of the community in order to attain their own selfish ends, and on one or two occasions they have been aided by the government in power. Of course, the public has suffered.


Senator McLachlan - And is suffering now.


Senator LYNCH - Yes. These unionists, acting so selfishly, throw the whole industrial machinery of die country out of gear. Besides, a wrong relationship has been set up, as between employees ii> one industry and another. This has come about for want of a- correlated system. I remember the Premier of Western Australia (Mr. Collier) citing the case of a tram conductor in Perth who was receiving higher wages than a man working in the deep levels of the Great Boulder mine. If our industrial laws are to be placed upon an enduring basis, we must secure the services of the best brains in the country to establish standards that will be observed throughout the Commonwealth, instead of having the varying standards that obtain to-day. In 1907 Mr.' Justice Higgins declared that the basic wage should be fixed, not in accordance with the ideas of employers or employees, but according to the normal needs of a person living in a civilized community. But now another standard has been set up. A commission in Queens land has pronounced that the formula of Mr. Justice Higgins is obsolete. According to this new standard, wages should be fixed in proportion to the ability of an industry to pay them. It is suggested that a basic rate should be fixed for various industries, irrespective of the standard laid down by Mr. Justice Higgins. In view of these conflicting formulae, it is necessary for an authority, of such talent, wisdom and wide knowledge of affairs as are required to enable it to deal with this very important matter, to determine a method that will mete out even-handed justice to all employees and employers in Australia. Disputes, dissatisfaction, and anomalies are rampant in the industrial field to-day, on account of the imperfect system in operation. This measure proposes to introduce for the first time co-ordination of industrial standards. Without system, no lasting benefits can be conferred.


Senator McLachlan - Unless we have system, there will be more trouble.


Senator LYNCH - Undoubtedly; If it comes' to contrasting the importance of preserving State rights with that of perfecting our industrial laws, I am in favour of placing the latter in the foreground for definite solution. The intelligent solution of. this problem has taxed the ingenuity and ability of men throughout the centuries, and it is still unsolved. We are now trying to bring it, at any rate, into the region of solution. The people of the Old Country have never had faith in arbitration. Mr. Ramsay MacDonald has said that arbitrators cannot be trusted. They are equally unpopular in the United States of America.; but Australia has' reached a level in evolving a system of industrial .arbitration that- has never been approached by other countries. We should cast aside all considerations calculated to prevent us from conferring upon the community the benefits contemplated under this bill. Here is an opportunity to place our industrial system on a sound and enduring basis, lifting it from the quagmire of hopeless confusion in which it has floundered. The shearers in Queensland work under a 44-hour week, whilst similar workers employed south of the State boundary are required to work 48 hours a week. No employer can tell from week to week what he will be required to pay under the conflicting awards given in the various States. We should not hesitate to accept the Government's proposal for solving our greatest of domestic problems - the proper and reasonable adjustment of conditions in the industrial field.

While, generally speaking, I agree to the taking of the proposed power, there are one or two exceptions to which I intend to refer. I do not hold that the bill should apply to State instrumentalities. The States are autonomous, and any interference with those instrumentalities that have become traditional would be unwarrantable. The State rights heard of in the times of Alexander Hamilton, when the States of America fought one another so bitterly, are different from those of our own. At that time the popular conception was to have the States keep the ring, and let individual effort have a free field and unfettered liberty for its purpose. But a change has come over not only public sentiment, but also public conviction. It is felt now that the State should step down and give up the ring-keeping occupation; it should move into the industrial arena, and do something in addition to preserving law and order. Now, in Australia, we have the States doing many things that minister to the vital necessities of the people. Who would abolish, for instance, our State railway systems? He who would advocate such a policy would be regarded as a lunatic. Our State-owned water-works are equally valuable in supplying necessary public services. Western Australia, for the purpose of fostering the pastoral industry, established meat works at Wyndham for the treatment of the produce of that area ; private enterprise having failed to meet the requirements of the people in that district. I need not emphasize the fact that this service cost the taxpayers of that State a good deal of money, but great and direct benefit was conferred upon the hardy pioneers, who would have became insolvent - some of the small settlers especially - had it not been for the assistance, afforded by the State. But there is another school of thought in this country that wishes to go a step further, and completely displace private enterprise. It is a modern variety which, up to the present, has not given, substantial proof of the truth of its dogmas. I do not hold with them in the least. I believe in testing the ground before giving way to new ideas, but I say that with this qualification : that if State enterprises had been encouraged and supported by a hearty co-operation, as they should have been, we should have had a vastly different story to tell to-day. There would not then be the existing gulf dividing precept from example, expectation, and realization. Let me quote as an example our experience with the State Implement Works in Western Australia. Mr. Bath, the responsible Minister of the day, and I went into that question, and were satisfied that the establishment of the works would relieve the farming community in Western Australia, of 25 per cent, of existing charges on their implements. A large area was set aside on the banks of the Swan River for this State activity, and huge workshops were erected there. What happened? In that case it was the unexpected that happened. The men engaged in the enterprise were the first to strike a deadly blow at it, with the result that to-day, as far as my knowledge goes, the industry might as well be non-existent for al] the effect it has upon the prices charged to the Western Australian farmers for their implements of production. We have to recognize that public opinion is unalterably in favour of certain enterprises being entrusted to State Governments. This being so, to allow any outside authority to fix the rates of wages to be paid to employees in say, a State tramway system in Western Australia, a power scheme in Tasmania, and a kindred industrial activity in Queensland, would be a blot on an otherwise commendable proposal. I am not in favour of this dead-level life-destroying policy of uniformity. Up to a certain point, and in certain directions, uniformity is, uo doubt, justifiable. Bub to require industry in all the States to conform to one monotonous standard, will be to undermine initiative and enterprise, which are essential to States as well as to individuals.

The DEPUTY PRESIDENT. - Order ! The honorable senator has exhausted his time.







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