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Thursday, 17 June 1926


Senator MCLACHLAN (South Australia) . - I am afraid that the honorable senator who has just resumed his seat (Senator Barwell) and I are in conflict over this issue. I do not propose at this stage to refer to other constitutional measures that may come before us later for consideration ; but I desire to say emphatically at the outset that, if the Government had not taken some steps such as are indicated in the measure now before us, it would have been unfaithful to the pledge made by the Prime Minister (Mr. Bruce) during the last election campaign. In announcing the Government's policy the right honorable gentleman stated definitely that if returned to power it would endeavour to secure some measure of industrial peace for this country. The Prime Minister has taken the earliest opportunity to give effect to that pledge. The Government is deserving of commendation for having, at the first opportunity, brought forward a measure to ensure to the Commonwealth Parliament power so to legislate as to give effect to the ministerial policy. But what do we find ? It may be that this inclusion of power with regard to corporations is hurting the feelings of some people, but so far as industrial powers are concerned, and so far as power to regulate and control trade unions is concerned, Government supporters are pledged up to the hilt. Thousands of voters who, in other circumstances, would not have voted for ministerial candidates supported them at the last election because of that definite pledge. The people believed that the Government was resolved, in respect of industrial matters, to restore the rule of law in this country which had for a considerable time been abrogated. They expected the Prime Minister, as soon as possible, to take the necessary steps in that direction. He has -done so in this legislation. I can understand the opposition to these proposals by men who do hot believe in arbitration. My friend, Senator Barwell, has indicated that he does not accept arbitration as part and parcel of our economic or social system, and he quoted several authorities in support of his arguments. But, when he cited the experience of other countries in favour of his argument, he left out of account altogether consideration of the psychology of the Australian people. It ig impossible for us to give up our arbitration and conciliation system, which includes industrial courts, wages boards, and round-table conferences, which Senator Findley favours. It is part and parcel of our social system, and I do not

Bee how we are to get rid of it. From the outset this Parliament has had the power to legislate in matters of. conciliation and arbitration within a limited sphere, and it is rather late now to suggest that compulsory arbitration should be departed from. Whatever form of industrial legislation is found to be most desirable this Parliament will, if the proposed powers are given, have power to pass. It has also been suggested that the proposed amendments of the Constitution, both in regard to conciliation and arbitration and in connexion with corporations, will strike at the basic principle of the Federal system. In 1901 the Commonwealth Parliament was given power to intervene in industrial disputes extending beyond the limits of any one State ; but if the conditions which prevail to-day had obtained in 1901, I venture to say that the Australian people would have been prepared to vest the Commonwealth Parliament with complete power in that respect. At present there is hardly an industry in Australia which cannot be brought within the ambit of the Commonwealth Arbitration Court, and it is, therefore, idle to suggest that by extending the powers of the Commonwealth Parliament in the direction proposed we are interfering with the rights of the States. If the people had realized, in 1900, that- our industrial situation would be as it is to-day, the restrictive words in the Constitution which it is now proposed to eliminate would never have been inserted. The Minister (Senator Pearce) stressed the tremendous difficulties under which this country is at present labouring. It has been my misfortune, at various times, to study the position, which our organizations have reached. Let us consider for a moment whether, under our industrial system, we are really proceeding as sane human beings should do. Arbitration systems have been iu existence since 2,000 years b.c., when wages were fixed by statute. In Australia we are irrevocably committed to the principle of conciliation and arbitration, but I do not think it has ever had a fair deal at the hands of the people of Australia. It has never received within official circles, or at the hands of various governments, the support to which it is entitled. I do not intend to refer to the personnel of the courts, but I think it is admitted that at times there has been a lack of confidence in that regard, which has not been beneficial to arbitration. I have come in contact with wages boards consisting of representatives of employers and employees, and an independent chairman. That is not arbitration. Representatives such as I have mentioned attend such meetings not as arbitrators, but, in the main, as advocates. The voting is often equal, and the determination of a question is then left to some highly-placed public servant as chairman. If the award obtained from the board is unsatisfactory to the representatives of either the union or the employers they go to the Arbitration Court. A further determination is then made, and if that is not satisfactory an interstate dispute is created.


Senator Guthrie - Is the honorable senator opposed to the wages board system?


Senator MCLACHLAN - Not if it operates satisfactorily, but I have known a representative of one side on a wages board to be withdrawn, with the result that, as the Minister had not power to fill the vacancy until a certain period had elapsed, it was unable to function, thus causing intense trouble to the parties. The representatives of the workers are really paid advocates, whose business it is to create industrial strife. There has been a tremendous waste of effort in connexion with the administration of our arbitration system, and it may be. said that, to some extent, the States are to be blamed for the complications which exist. Senator Barwell said that in 1920 it was considered that the last word in arbitration had been said by the parliament of which he was then a member. That opinion was also expressed when Mr. Homburg, an exAttorneyGeneral of South Australia, introduced his industrial code. Owing to the congestion in the courts, there is no expedition, and, as I have already indicated, there is tremendous waste of economic effort. One honorable senator said that the Government's proposals in this direction were not mentioned during the hustings, but during- the campaign I went so far as to say that if an amendment of the Constitution was required I would support such action in order to secure industrial peace. There is a strong impression abroad that there is too much industrial turmoil in Australia. That there is can be proved by the figures quoted in another place, and also by those which Senator Barwell submitted to the Senate to-night. Whether it is correct, as stated, that the number of strikes in Australia is greater in proportion to the population than in other countries, I do not know; but I do know that information of that nature which is being made available on the other side of the world is much to our disadvantage. It is time the genius of the people was exerted to such an extent as to overcome the difficulties we are now encountering if arbitration is to remain a -portion of our industrial system. I can understand the logic of a man who does not believe in arbitration at all, but I cannot see on what grounds some fear the intrusion of the Commonwealth into the wider field of industrial conciliation and arbitration. That the sovereign rights of the States, of which we have heard so much, are being attacked is undoubted, but on the day when the Commonwealth Arbitration Court ruled that engineers employed by State Governments came within its scope, the sovereignty of the States in this respect ended. In every State of the Commonwealth the relationship between the States and their employees, except those on the civil list, is governed by tribunals which they themselves have set up.


Senator Needham - And which they control.


Senator MCLACHLAN - And which, perhaps, they very unwisely control. It is indeed most undesirable in the public interests that there should be any mock trials concerning the relationship between certain ' sections and the Government itself. There should be a real tribunal in which the public would have faith, on which the interested parties would be fully represented, and which w.ould protect the public purse. I have never known a government to refuse to give effect to the finding of a tribunal which it had established. Surely this Government, which is endeavouring to bring about a brighter era in the industrial world should be given credit for what it is doing, instead of being charged with impinging upon the rights of the States. So far as I can see, the objections offered to the referendum proposals are due to the mental make-up of the objectors, who do not believe in arbitration, and who have not the blessed candour of the honorable senator who preceded me.- They think that the system is fundamentally wrong, but have not taken into account the psychology of the Australian people. We can imagine how public opinion would be influenced if decisions were based on the advice appearing in the press. I have not known the average Australian to take a great deal of notice of public opinion when his pocket has been affected. We must get something a little more binding if the awards and determinations of the court are to be enforced. It has been said that, in the past, the awards have not been observed. I have burnt my boats long ago so far as the question of arbitration is concerned. It is ten years since I advocated similar co-ordination to that which the Government now proposes, although I was not able to get my ideas incorporated in their entirety in the platform of the party to which I belong. There can be no valid objection to some coordinating body, particularly if it be a court with judicial power whose officers hold their positions for life, getting in touch with subordinate tribunals which will deal with the affairs of the various States. In Victoria, where, I understand, on the best authority, the wages board system has worked very satisfactorily, Parliament could allow the wages boards to continue to function as they have functioned in the past. I remind honorable senators that it is not an exclusive power, but a concurrent power, that is sought. If Parliament- does not allow the wages boards to function under the concurrent jurisdiction, there is, as honorable senators are aware, power in this bill to enable them to function as a part of the Commonwealth system.' I am sure that nothing is further from the minds of honorable senators and of the Government than any desire to interfere with any State tribunal which is working satisfactorily. We must, however, have some co-ordinating authority. We must prevent men living in one State from obtaining an advantage over men in the same industry across the border. The fact that different awards operate in the various States is a fruitful source of industrial unrest. When a man who is working on one side of the border finds out that his fellow just over the other side is receiving more for the same, work than he receives, it is only natural for him to try to obtain the same conditions for himself. I visualize the time when the State awards, which have been maintained under the decision of the High Court, will be given effect to in the new legislation which we are asked to pass. No injustice is likely to be done by an Australian Parliament to an Australian State. Such a thing is unthinkable. I realize that, iu the smaller domestic sphere, home rule is essential; but I realize also that if one part of Australia is adversely affected by any legislation which we may enact, it will react- on the whole of Australia. I have already indicated where I stand regarding unification. The Minister pointed out, and his remarks were emphasized by Senator Lynch, that a great deal of overlapping of industrial awards now exists. It is painful to think of the trouble and confusion that has arisen over industrial legislation in Australia when the thing should be so simple that every man could understand it. We are endeavouring to provide one system for the whole of Australia - a system that will lead to simplicity, a saving of expenditure, and the co-ordination of the efforts of the various State instrumentalities which will carry out the work under the bill. I know of some merchants who, to-day, are working under twelve or fourteen awards. Is that not an infliction on industry? Surely one award would be sufficient! I admit that there are difficulties in the way; but those difficulties are not insuperable. I come now to a question that has given rise to considerable debate. It has been said that an award cannot be enforced against a union.


Senator Barnes - It can.


Senator McLACHLAN - The Govern-, ment has promised to introduce legislation to enable this to be done, and the unions, in the main, are willing to accept it. It is quite .a simple matter. On the statute-book at present there is a law to compel the various insurance companies to carry out certain obligations secured by deposits of money. Industrial organizations must either accept arbitration or reject it. If they accept it, there is nothing to prevent us from requiring them to make a deposit of money or, as the Minister indicated, to enter into' a bond.


Senator Guthrie - So far, they have been tossing a two-headed penny.


Senator McLACHLAN - That is so.


Senator Needham - That statement is entirely wrong.


Senator McLACHLAN - This is not a party question, and I do not desire to treat it as such. In the past, the position has been that wages have been on the increase; but we must consider the possibility of a different state of affairs iu the future - the cost of living going down, the price of wool dropping, and the rates of wages decreasing. We want to know that the unions which are prepared to accept benefits from arbitration are prepared to abide by the result when the position is reversed. Surely it is not beyond the ingenuity and capacity of this' Parliament to pass laws which will ensure that the unions will obey the awards ?


Senator Needham - In the past they have always rendered obedience to the awards.


Senator McLACHLAN - I do not agree with that statement.


Senator McHugh - Will the honorable senator give a specific instance to the contrary?


Senator McLACHLAN - The point is not whether they have or have not obeyed awards in the past, but whether they can be compelled to do so in the future. If we are not to have the rule of law, what are we to have? In its absence, we shall have industrial turmoil, inconvenience, and unrest throughout the country. I do not agree with the ActingLeader of the Opposition (Senator Needham), Senator Barwell, and others that this legislation has been hastily introduced. The Government had no alternative; it had to keep its election pledge.

Since I have had the honour to take my seat in this chamber I have been asked on innumerable occasions when the Bruce-Page Government intended to honour the pledge to introduce legislation to restore industrial peace in the community. The answer to that question is contained in this bill. There is no justification for the accusation of undue haste. In 1911 and 1913, as well as in 1919, similar proposals were submitted to the people. This is, therefore, no new question, but one upon which the people are not so woefully ignorant as. some honorable senators would have us believe. I venture to predict that the electors will not be found to be entirely in. the dark regarding the powers that the Government asks them to grant to the Parliament of the Commonwealth. Reference has been made to trusts, combines, and trade unions. When in England last year I had the opportunity to examine some figures in a morning newspaper there regarding the disposal of trade union . funds. The result of the exposure was that the membership of trade unions was reduced by about 2,000,000.


Senator McHugh - That was due to the unemployment which prevailed.


Senator McLACHLAN - It was not due to that cause, but to the fact that there had been maladministration of the union funds. Notwithstanding a " backto the-union " movement, the tide of secession was not stemmed. The figures published showed that while the membership of' the unions had decreased, the expenses of management had increased. I do not desire to proceed with that aspect of the question; but in the light of recent developments in this country, it is due to the members of the trade unions that Parliament should see that their funds are kept in accordance with law. That is all that we ask. It has been represented that these proposals are an attempt to interfere with the working, and general management of trade unions. I say definitely, that nothing is further from my mind. I take it that the Government's intention is to provide for an actuarial examination of the funds of the unions in the interests of the members. Whether that work is to be done by Government auditors or by others is not of great concern.


Senator Barnes - Is the honorable senator in favour of placing associations of employers in the same position?


Senator McLACHLAN - Why not?


Senator McHugh - What about the funds of the trusts and combines?


Senator McLACHLAN - I do not know that they have any funds. Probably the honorable senator knows more about them than I do. Broadly speaking, we have an arbitration system to which we stand committed. We know its limitations in the federal sphere. We know its disadvantages to the indus-' trialists and to employers by reason of expense, complications, and delay. We know that it has been used, not legitimately, but illegitimately. The Government now says, " Give us the power to create co-ordinate authorities which will, deal with all questions of wages and conditions of labour in a judicial way, and remove them beyond the pale of Parliament." It is regrettable that industrial: problems have ever become linked up with the political questions of the country. A great deal of the trouble that has arisen is due to that first fundamental mistake. Notwithstanding that some of the proposals of the Government may go a little further than it was my original inclination to support, the advantages to be gained in regard to industrial matters are so great as to outweigh all disadvantages. We are also asking for power to make laws with respect to the creation or control of corporations. Senator Elliott.; has pointed out by interjection tonight that when the federal compact was entered into, every one believed that this Parliament would have that power, but the Commonwealth Government soon found out that it did not possess it. Even if Federal control of corporations has all' those defects that Senator Barwell has pointed out, what harm can result ? ' The same power rests to-day with the New South Wales Government, which is led by a gentleman who probably may be regarded as an extremist even among his own class. Yet no great danger has resulted to the corporations of the State. It is our duty, in the interests of Australia's peace and prosperity, and in the interests of the good opinion which the people overseas should have of us, to give every measure of support to these proposed amendments of the Constitution in order that we may be able to enactlaws providing for industrial rest, and not the unrest which is prevailing in the country to-day. They will enable us to enact laws which will restore our good name in the eyes of the world.


Senator Barnes - The honorable senator does not. suggest that Australia, has a bad name? 8enator MCLACHLAN. - From an industrial point of view, it has a bad name. I have met people overseas who are afraid of the industrial position in Australia. I do not share their fears.


Senator Barnes - It should not be said.


Senator MCLACHLAN - Does not my honorable friend desire to hear the truth ? Does he propose to live in a world of hypocrisy all his life f Is heliving under the belief that everything is all right when it is not all right? What is the use of shutting our eyes to the facts ? One man told mc of £3.000,000 which was diverted from Australia - the greater portion of it went to the Argentine, and some of it to New Zealand - because the investors were afraid of the industrial unrest here. . That is what is going on. A lot of us shivered over the future of England a few weeks ago, but there was no cause for it. When you get among the people of England you realize that their good sense would speedily lead them to drive into the English. Channel the rabble we feared. Likewise, I have no fear for the future of Australia, but it is essential that' the National Parliament of Australia should show to the world that it intends to take seriously in hand the reform of its industrial arbitration system, and that it is able to manage, that system which it has been at so much pains and so much trouble to set up.

Debate (on motion by Senator Drakebrockman) adjourned.







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