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Wednesday, 11 November 1936

Senator MACDONALD (QUEENSLAND) - They are merely watching..

Senator Hardy - Does the honorable senator think that the principle underlying the action of the Government was wrong ?

Senator J V MACDONALD (QUEENSLAND) - I do not think that any principle underlay its action.

Senator Hardy - Does the honorable senator think that the Government should not have taken any action in connexion with Australia's trade with Japan?

Senator J V MACDONALD (QUEENSLAND) - The Government should not have accepted dictation by the Imperial authorities.

Senator Dein - Does the honorable senator mean that unrestricted imports should have been permitted?

Senator J V MACDONALD (QUEENSLAND) - I did not say that at all. The Government should adopt an Australian attitude in this matter. The tariff policy of this country is evidence of a desire to put Australia first; but it is wrong to hit a good customer in the face.

Senator Dein - Has that been done in respect of Japan?

Senator J V MACDONALD (QUEENSLAND) - If I attempt to answer every interjection by Senator Dein the speech will be his, not mine. As he should know by this time, his school-masterly attitude is not suited to this chamber.

Senator Dein - The honorable senator says that by restricting imports the Government hit Japan in the face, and yet he claims to approve of the restriction of imports.

Senator J V MACDONALD (QUEENSLAND) - I approve of the restriction of imports, if that action is in the best interests of Australia; but I do not approve of the Government making restrictions at the dictation of Imperial interests. Discriminatory action has also been taken against the United States of America. At first I approved of that action, because that country is a bad customer of Australia,but I have since reflected that its people and the people of Australia come from a common stock, and that in a crisis the United States of America would protect Australia. Moreover, since the restrictions were imposed, the United States of America has pointed out that to regard bilateral trade as the basis for fixing a trade policy is wrong. That country has shown that, although in the matter of trade, Australia is at a disadvantage, the position is reversed when trade with other dominions and the British Empire generally is considered. I hope that wool prices will be stabilized, but there is no doubt that the treatment meted out to Japanese buyers has caused instability in the wool industry. I am not alone in that view, for I remind honorable senators that the sheep-farmers themselves have approached the Government by deputation in this connexion.

Senator Dein - Does the honorable senator believe in restricting imports from Japan?

Senator J V MACDONALD (QUEENSLAND) - I believe in restricting imports from any country, even the Mother Country, if they endanger Australia. The budget speech having shown that in the year before last Australia's imports were valued at £7,000,000 more than its exports, proceeded to point out that the position had improved, for the £7,000,000 had been reduced to £.1,000,000. It is well that that is so, for were the tendency in the opposite direction, Australia might again reach the position in which it was in 1929, when there was a gap of £20,000,000 between the values of its exports and its imports. The Treasurer's claim that prosperity has returned cannot be accepted without some reservation. On page 2 of the budget speech appears the following paragraph: -

The general position of export prices as a whole may be seen from the following table of index numbers at half-yearly intervals (base, 1,000 in 1928) : -


The fluctuations shown in that table indicate that prosperity has not yet permanently returned.

Senator Dein - But conditions have improved since the present Government came into office.

Senator J V MACDONALD (QUEENSLAND) - The fluctuations which have taken place reveal the need to go carefully in regard to imports. There should be power to restrict imports from any country. Another paragraph in the budget speech reads -

It is estimated that about 335,000 persons have got back into full-time employment in Australia since early 1032.

That is an encouraging statement, were it not that there are still many persons without employment. A fair estimate would he that at least 150,000 workers are unemployed.

Senator Arkins --Still too many.

Senator J V MACDONALD (QUEENSLAND) - Yes, still too many. No government in Australia can claim 100 per cent, efficiency in dealing with unemployment. Senator Marwick expressed satisfaction with what the Commonwealth Government had done towards putting people back into work, but he had no appreciation for what the Labour Government of Western Australia had done.

Senator Marwick - I did not say anything about putting men back into work; I was speaking about assistance to the farmers.

Senator J V MACDONALD (QUEENSLAND) - The Government of Western Australia would certainly assist the farmers.

Senator Marwick - If it had the money.

Senator J V MACDONALD (QUEENSLAND) - Yes ; but the Commonwealth Government has the money. The Queensland Labour Government has done most for the relief of unemployment. It has done a lot more than the Commonwealth Government has done. It was the first Government to demand money for public works, thereby surmounting one of the main causes of the depression in this country, namely, the cessation of the flow of British loan money into Australia.

Senator Marwick - The Commonwealth Government made it possible to do that by giving protection to the sugar industry.

Senator J V MACDONALD (QUEENSLAND) - King Charles' head again! I hope that Western Australia will attempt to grow sugar in the same way that it is attempting to grow bananas. If it does so. its representatives will undoubtedly vote for the sugar embargo.

Australia should keep its eyes on the level of imports, because the balance of trade and the state of our funds in London are vital factors in the prosperity of the country. Self-satisfaction exists among supporters of the Government in regard to this budget, which, I admit, is fairly good, largely because the Government has been lucky in having reaped the benefit of good seasons; but the Government should keep a watchful eye on imports to see that they do not grow to such an extent as to exceed exports. An adverse balance, perhaps of even £5,000,000, would put the Commonwealth in a bad position. The budget contains the following paragraph: -

Of the £stg. 11,000,000 increase in imports, £stg.!),000,000 is accounted for by increased imports of non-competitive goods, mainly machinery, motor vehicles, and petrol. The prominent position of metal manufactures and machinery indicates rapid growth and improvement in tho equipment of secondary industries.

Therein is some explanation, although I am sorry to see that motor vehicles and petrol are included. Nevertheless, we have no reason to applaud the increase of imports, although we were only £1,000,000 in arrears last year as compared with £6,000,000 in the previous year. The Government is entitled to claim credit for the loan conversions in Great Britain; but we should not let the matter rest there. The Australian High Commissioner, Mr. S. M. Bruce, has received a good deal of kudos for having secured a reduction of interest on loans domiciled in Great Britain. No doubthe has thereby saved a great amount of money for Australia, but having regard to the cheapness of money on the London market there is not the slightest doubt that he should have obtained a greater reduction. The average rate of interest payable on Australian debts domiciled in London this year is 6s. 8d. per cent, more than the rate of interest on loans domiciled in Australia - a fact which I hope the British investors- will note. I think that the Minister will admit the truth of these figures, which are taken from the budget itself.

Wo can give some credit to the Scullin Government for the fact that the 6 per cent, loans in this country were converted to 4 per cent, five or six years ago. The present Prime Minister (Mr. Lyons), as the then Leader of the Opposition, signed the appeal which was made to the bondholders on that occasion. The interest burden to-day is only 13s. Id. per capita more than it was in 1920-21. It is some satisfaction to know that, supported by public opinion, the Scullin Government made those conversions which, with the Londan conversions, have resulted in our being only that amount worse off, despite a larger debt. The reason for tho reduction of the interest rate is, of course, that all classes in the community suffered in the depression. Wages were cut down and social services were lopped off in order to secure economy, and, of course, loan money had to share in the general sacrifice.

A fact that should be brought out more strongly is that the budgets of the States and the Commonwealth combined show a net surplus of £1,137,000. That, of course, is largely due to the fact that the Commonwealth had great revenues, and that its surplus last year was between £3,000,000 and £4,000,000.. Subtracting the State deficits, the net surplus over all budgets is £1,137,000. That is a satisfactory position, and I think it could be used as an argument from this side of the chamber that the masses should be helped by a reduction of indirect taxes, which are at present oppressive. Senator Hardy recently referred to the fact that indirect taxes hit the masses while direct taxes hit the classes. It seems that the surplus over the whole of the Commonwealth - one cannot ignore the national economy - gives scope for a greater reduction of the taxes which the people at present bear. The budget discloses that customs and excise revenue exceeded the estimates last year by £3,58S,000, sales tax by £5S2,'000 and land tax by £177,000. I think that the sales tax could have been reduced more, because, like the customs and excise, it is a tax which affects the common people. When I was in Melbourne recently I met a number of business people, who some time ago made representations, I think, to the Prime Minister, that the rate of the sales tax should be placed at some more workable figure than 5 per cent.. because the rate of 5 per cent, involved a great deal of clerical work in the fixing of costs and prices. The rate previously was 6 pt».r cent. The business people contended that a tax of 44 per cent, could be more conveniently calculated. There is not the slightest doubt that the position of the Commonwealth's finances warrants the emergency sales tax being reduced to 3 per cent., in order to give relief to those persons who have to bear the added hurden of the customs duties and other indirect taxes. It may be contended that the gap in Commonwealth finances which woRd result would have to be made up in some other direction, and that people who pay land tax and income tax already pay huge amounts, but the budget shows that the amount of indirect taxes amounts to more than £51,000,000 annually, whereas direct taxation yielded last year only £10,480,000. In other words, customs and excise and sales tax are about five times greater than the whole of the direct taxes. I am sorry that Senator Hardy, who makes a speech and then goes away for a week, talked a great deal about something of which he does not know much. The land, tax yielded £2,846,000 in 1933-34, whereas the receipts from that source last year amounted to only £1,200,000. Within the last four years the land tax has been halved. I should like to correct a statement made earlier in the debate by Senator Hardy or Senator Johnston that the Queensland Government borrowed money from the United States of America at a high rate of interest rather than borrow from Great Britain. The Queensland Government did not wish to borrow in the United States of America at a high rate of interest, but was forced to do so by certain London financiers - " gansters " would be a more appropriate term - who refused that Government the financial accommodation afforded to other States and also to the New Zealand Government. They closed their doors to the Government of a sovereign State in a British dominion because that Government's legislation did not suit them. Moreover, the representatives of a " stinking fish " party in Queensland visited Great Britain to denounce an important State merely because certain individuals could not get their own way. British financiers listened to the representations of these antiAustralians, and, consequently, the Queensland Government was forced to float a loan on the New York market. At the time the accommodation was refused to the Queensland Government, British financiers made available £1,500,000 to certain interests in Sao Paulo, in Brazil, a country populated by Portuguese and Indians, some of whom would not be admitted to Australia under our immigration laws.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - What rate of interest was the Queensland Government compelled to pay in New York?

Senator J V MACDONALD (QUEENSLAND) - I believe that it was 7 per cent., a rate higher than would have been paid in Britain.

Senator Collings - But Queensland got the advantage of the exchange.

Senator J V MACDONALD (QUEENSLAND) - Yes, I believe that the rate was 1 per cent, more than it would have been bad the loan been raised in London. Although British financiers would not accommodate the Queensland Government, a loan, of £1,000,000 or £1,500,000 was raised in New York through the City National Bank, on the directorate of which were two or three British financiers. When Mr. Theodore arrived in New York he found that there was not much difficulty in raising a loan so long as the Government was willing to guarantee the payment of interest. Apparently the British financiers thought that they would teach the Queensland Government a lesson and not go farther than that.

I sincerely trust that all emergency legislation will be repealed as soon as possible, because the sales tax and certain other imposts .are pressing unduly upon the people. The sales tax should have been reduced to 3 per cent. I notice that there has been a reduction by 10 per cent, of the tax on income from personal exertion and from property, but the reduction on income from property should not be so great as that on income from personal exertion.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - The rates are not the same.

Senator J V MACDONALD (QUEENSLAND) - No, but there has been a reduction of 10 per cent, in each case, whereas the reduction in respect of income from personal exertion should be 10 per cent., and on income from property 5 per cent., because property is established wealth, whereas income from personal exertion is earned by the sweat of the brow.

Senator JAMES McLACHLAN (SOUTH AUSTRALIA) - Many persons possessing property have worked hard to acquire it.

Senator J V MACDONALD (QUEENSLAND) - In some instances, property is inherited, and, in other cases its owners would not welcome an inquiry into the manner in which they came into possession of it.

I compliment the Government upon having increased, if only slightly, invalid and old-age pensions, but in view of the improved financial position it should have restored the pension to the full amount. Early in the depression, the number of persons entitled to the maternity allowance was serious restricted. I regret that the allowance is now based upon income; it was never intended to be regarded as a charitable payment. When my three children were born, I was earning much more than £4 a week, but I collected the allowance, because I felt that if I declined to do so it might be said that I considered myself superior to others. When our population figures are almost stationary, and certain European countries controlled by dictators are increasing their populations, no restriction should be placed on the maternity allowance. I trust that before long the allowance will be paid regardless of the income of the applicant.

On previous occasions, I have dealt with the urgent necessity to give greater publicity to Australia as a tourist resort, and to the high quality of its products. In the budget speech the following paragraph appeared : - .

With a view to assisting the sale of Australian products abroad, and the tourist traffic, the Government has decided to increase the g rantsfor publicity to the Oversea Trade P ublicity Committee and the Australian National Travel Association.

In view of the extensive publicity campaigns conducted by Germany, France, Italy, Switzerland, United States of America, and Canada the action of the Government in increasing these grants is justified. I understand that in the United States of America the value ofthe tourist traffic is of such importance that it occupies the second or third place amongst national industries. A great deal more could be done in advertising Australian primary products in Great Britain and in the East, and in that way increasing our sales so that our exports might in time exceed our imports. Mr. E. A. Angove, a world traveller, in an address before the Haymarket Central Square Broadway Association said -

Countries such as Japan, Great Britain, Germany and the United States of America gave away tourist pamphlets in millions, but Australia lagged badly in publicity for its attractions to visitors.

There is no justification for adopting the suggestion sometimes made that tourist pamphlets should be sold at a profit; they should be produced in an attractive form, and, as suggested by Mr. Angove, distributed in millions. There is no reason why Australia should not be the most important tourist resort in the southern hemisphere. I hope that the comments of Mr. Angove will be taken to heart, and that there will be no stinting of the provision for publicity or of the quantity of literature distributed. Also, we should treat tourists with a certain amount of courtesy, allowing them to feel that they are always welcome. We should take care not to give the impression that we are bent on exploiting them.

Debate (on motion by Senator Payne) adjourned.

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