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Friday, 25 November 1938

Mr CLARK (Darling) .- I congratulate the honorable member for Bourke (Mr. Blackburn) on his speech. It was a refreshing draught of peaceful sentiment in the midst of sabre-rattling. If the rest of the world took heed of the bellicose speeches which have characterized this debate there would be reactions which could lead to war. The budget debate has not lent itself to efforts to promote a more sympathetic and peaceful atmosphere among nations; and the contribution by the honorable member for Bourke, because of its contrast to the others, is all the more to be commended. If any one should stumble on what I am about to say in Hansard, I counsel him to read the preceding speech. Remarks such as were made by the honorable member should not find burial as well as birth in this chamber, they should be carried abroad. Instead of expending millions of pounds on armaments, nations should send forth ambassadors of peace so that more friendly feelings should be promoted. Such a development would allow of the expenditure of a greater amount of money, time and energy on the promotion of the economic welfare of their people, thus making this world a better place.

The budget discloses that the activities of this Government have not been directed to satisfying the needs of the people. It has displayed a lack of initiative in social reform. Some years ago we were able to claim with justification and pride that we were well to the fore in the field of social reform, buto-day, much to my regret, we lag far behind. This Government, and future governments of the Commonwealth, must devote more time to the improvement of the economic conditions of the people, so that they will be able to enjoy a fairer measure of the goods that they produce. As one travels about the country, even on the journey between Canberra and Sydney, one passes through green fields, in which fat stock are grazing, and thriving crops. Production is abundant, and no one in the whole of this country should be in want. Unfortunately, because of our monetary system, the people are not able to get access to the commodities which nature so bountifully provides, and there is much poverty and distress, not only in tho cities, but also in the country towns.

It has been my lot to spend most of my life in country centres. I know many country towns that are less prosperous now, and have smaller populations than they had many years ago. When the land was being cleared and got ready for the plough, when there was fencing to be done, and water to bo provided. Work, was plentiful, and the country towns were prosperous. Now there is only seasonal work to be done. In the pastoral districts, there is shearing and crutching and other seasonal work, but that is all. For the greater part of the year men are out of work, and this unemployment in country districts constitutes a special problem for which governments will have to find a solution. It. is not due to the depression, though the depression made conditions worse. It is a perennial problem, which calls for a permanent solution. In the western districts of New South Wales, rabbits were once plentiful, and between seasons men went out catching them, the sale of skins providing them with an income. However, in most districts, the rabbits have now been cleaned out, so that even this avenue of employment has failed. The Government should do what it can to promote the establishment of industries in country towns, so as to provide employment for local residents. So bad have conditions become that many families are migrating from the country to the cities. They realize that there is no prospect of employment, either for themselves or for their children, in the country, and so they move into the city. In some country places there are not even proper educational facilities. This, of course, is a State matter, but it is just one more factor that is driving the people into the cities.

At one time, most of the shearing in any given district was done by local men who lived in the district. Now it is practically all done by big shearing companies under contract. These firms, such as the Graziers' Shearing Company, with their offices in the city, operate right throughout New South Wales, and, indeed, throughout some of the other States as well. They never employ local men, their attitude being that there is- less likelihood of industrial trouble with men who are working hundreds of miles away from their homes. They sign up shearers in Sydney, and then mai>e them pay their own fares to places as far away as central Queensland. When the work cuts out, they have to pay their fares back to Sydney again, if country men want to get a job shearing they must be prepared to go to some place hundreds of miles away from their own district. This is a matter of national concern. It is a grave anomaly that city residents should have a better chance of getting employment as shearers than have country men, who live in the districts where the shearing is done. This condition of affairs is reflected in the appearance of the country towns, once prosperous and thriving, but now stagnant and. depressed, with their tumbledown fences and unpainted houses.

The Commonwealth Government is doing little or nothing to provide work for the unemployed. It claims that the responsibility rests with the State governments, but the problem will never be solved until it is tackled in a national way. It is no answer to say that £2,000,000 is being made available for expenditure in New South Wales. Most of this money will be expended in the city, and the unemployed in country districts will derive no benefit from it. I have received appeals from country centres, for a share of this relief money. One country town has had no unemployment relief money for six years. The unemployment problem is always worse in country towns than in the cities, because the organization of relief is so much more difficult in country centres. It is not enough for the Government to point out that unemployment figures have fallen from 9.7 to 8.6 per cent. We have 200,000 unemployed to-day, but if there were only 20,000 persons unemployed, the position would still be serious. The conditions under which the unemployed are existing in country centres is a reproach to our civilization. On the outskirts of every country town there in a calico town or a tin town, in which are living those families who have had to move out of the town itself because they are unable to pay rent for decent houses. There they are living generally on food relief. I have a letter here from a mau in Du Duo stating ll.1 at in une such settlement outside that town there are nine families who have been ordered off by the Forestry Commission. It is no solution of the problem simply to order the people to move on. In this group there are 27 children, and all the families, with the exception of three, are dependent on food relief. It is very little satisfaction to them to know that the unemployment figures have declined, and we, as members of Parliament, should not be satisfied with the position either. Something should be done to give to people in the country a greater measure of economic security. Unless the Government ensures that everybody who is prepared to work is provided for it is not doing its duty.

We should be very careful before admitting immigrants to Australia to take the employment which seems to be scarce enough for our own people. Some of the foreigners who have been admitted have been exploited by employers. In this Australian Capital Territory there is a grazier who advanced £50 four years ago to a foreigner to bring his family to this country. The foreigner was working for him for less than the basic wage, and was entitled to two weeks' holiday a year at £3 a week. For the last three years, however, he has not been given any holidays, so that the grazier owes him £18 in respect of thom. The foreigner has paid him back all but £16 of the money advanced to him, and his employer is threatening to sue him for this amount, although himself actually" owing £18. Primary producers who fail to treat their employees properly are pursuing a shortsighted course, because they cannot hope to develop a profitable home market for their produce unless the workers have adequate spending power. Men who have to work on a low wage are poor spenders and poor consumers.

Much more could he done for the development of country centres by the provision of better roads and water conservation schemes. Wool is produced in the country, and should be treated there as far as possible. In the last report of the Wool Board, there is reference to a process known as gas chlorination, which renders wool unshrinkable. If wool can be prevented from shrinking, the demand for it should be increased enormously, and there is no reason why the wool should not be subjected to this process in country centres. I can remember when much of the wool scouring and washing was done in country towns, and one may still see the decaying wool scours where this industry was carried on. Now the work is done in the cities, but it is time we retraced our steps, and restored country industries as a means of providing employment for the people in country towns. Recently a meat works was established in Bourke for the treatment of local stock. The new industry will serve the requirements of cattle growers in the far-north, and, already, it has provided increased employment. Unless further undertakings of this kind be embarked upon, we cannot hope to see our country towns thrive, particularly as in the past the claims of the unemployed in country centres for relief have generally been disregarded. In its last report, the Wool Board makes valuable reference to these matters. I am sorry, however, that too much of the revenue of the board has been absorbed m administrative expenses, whilst only a comparatively small amount has been devoted to research and the promotion of markets, which were the main purposes for which the board was created. The Government should keep the woollen manufacturers abroad up to their promise to subsidize this fund £1 for £1. So far they have made no contribution whatever to it, and when I asked a question on this matter a week ago the Minister for Commerce (Sir Earle Page) replied that it was still the subject of negotiations. I regret that the trade delegation which recently went abroad failed to accomplish much for Australian producers. No sooner had it returned than the AngloAmerican Treaty, which will obviously operate to the detriment of our wheatgrowers, was announced. I do not agree with the Minister for Commerce that the loss of the Empire preference of 2s. a quarter on wheat will not be a disadvantage to our growers, and apparently, neither to the growers themselves, if one may judge by the letters which many honorable members have received from various growers' organizations. The problem of markets is bound up with that of international relations. On this point,

I commend the very able speech made this afternoon by the honorable member for Bourke (Mr. Blackburn). Undoubtedly, the establishment of friendly relations between all countries would give a greater impetus to trade than could possibly be achieved through the negotiation of treaties. Nations which are at enmity will not be inclined to trade with one another.

Although this Government has given some attention to the wool industry, which is easily our greatest export industry, it must endeavour to do more. Perhaps the greatest problem confronting the industry to-day is the instability of wool prices. Because of this uncertainty, most of those engaged in the industry do not know what to-morrow will bring for them. Although 61,429 more bales were sold at the last JulyOctober sales the aggregate return was nearly £3,000,000 less than that from the corresponding sales last year, whilst the average price at there sales dropped from 14.59d. per lb. to 10.15d. per lb., or a decrease of 30 per cent. The figures for the July-October sales over the last four years have been -


Furthermore, many growers actually receive substantially les3 than these figures. I need hardly stress the urgency, therefore, of some scheme to stabilize wool prices. If the industry will not agree to the principle of a compulsory pool, I suggest, as an alternative, the adoption of the principle of a reserve price. One of the greatest evils in the industry to-day is the practice of forward selling by buyers, yet we are told that it is impossible to fix the price of wool over a period of years. Having sold forward, overseas buyers, who operate at our sales, naturally tend to beat prices down. If it i3 possible for the buyers to fix the price in advance to the manufacturers, surely some scheme could be evolved "for the placing of a reserve price on this product. If this were done, countries would find it easier to finance their purchases, and would have the advantage of being able to take supplies from reserve stocks as they needed them. The scheme could be financed through the Commonwealth Bank, so that the growers would not be obliged to wait for payment for wool held in reserve. In this way our wool sales would be made less of a gamble for the grower and for the buyer, as there would be a minimum price below which wool would not fall. It has been wrongly argued that such a scheme could not be applied to wool. Wool is one of the few products which is knocked down to the highest bidder. If manufacturers adopted similar methods for disposing of their cloth they would not last in business for a year.

Another problem confronting the industry arises from the increased production of substitutes. In Germany all cloth, in the manufacture of which wool is used, must contain at least 50 per cent, of substitutes. Although a few years ago it was almost negligible, the quantity of substitute used in that country to-day is equal to half of the quantity of natural wool which Germany absorbs. A similar development is taking place in Japan. It must be obvious that as the use of substitutes increases the demand for natural wool will decrease.

I again draw the attention of the Government to the urgency of the problem of housing. In the eastern States activity in the building industry is decreasing, mainly because the financial institutions are restricting credit, whilst in New South Wales, particularly, there has been a definite falling off. As this industry offers one of the best means of providing employment governments should do everything in their power to stimulate it. As I pointed out earlier, the conditions under which many people are forced to live to-day is a national disgrace. The need for a housing scheme is nation-wide. Previous governments have given attention to this matter, but nothing has yet been done. In 1927-28, legislation was passed by this Parliament to enable the Commonwealth to finance such a scheme, and in a speech which he delivered on the 14th August, 1934, the Prime Minister said -

We ^propose to procure money, and to expend it in co-operation with the States in the building of homes for workers.

One would expect that after making so definite a promise to the people, the Government would have acted upon it long before this, but so far it has done nothing. When the Prime Minister was asked whether he contemplated taking action to give effect to that promise he said -

Any extensive scheme of housing and slum clearance would involve the raising of large sums of loan moneys. If the Commonwealth embarked upon a loan-raising programme for the purpose of assisting the State governments in this direction it would only result in the amount of loan moneys now available for ordinary State Government loan programmes being reduced.

That was a definite case of backsliding; the Government is not prepared to stand up to its promises. It is true that certain developments did take place in the building industry, but the indications are that activities in that direction are now on the wane. The Sydney Morning Herald, of the 9th November, reported -

Co-operative building societies in New South Wales have reached a stage where further development is impossible until additional loan money is made available, and several hundreds of prospective members of building societies who desire to build or purchase a home on the co-operative basis are prevented from doing so because of the inability of the proposed new societies to provide finance.

I pointed out that fact to the Prime Minister, and asked him whether, in view of his election promises, he would consider an unconditional grant by the Commonwealth to enable building societies to develop. The right honorable gentleman replied -

My attention has been drawn to the article referred to. In view of the paramount need for expenditure on defence, and the increasing obligations in regard to national insurance, invalid and old-age pensions, &c, the Government regrets that it is impossible to consider making unconditional grants for the purpose indicated by the honorable member.

That was a definite refusal by the Government to carry out the Prime Minister's promise of 1934 to provide finance to enable homes to be built for the people. The welfare of the people is being subordinated to the Government's defence programme. If expenditure on defence be necessary, the programme should be financed by a tax on the wealth of the people. "Wars are fought to protect wealth and property, and those with possessions should be prepared to pay for their protection. I say definitely that if credit is to be made available to finance the Government's defence programme, it should' also be made available to enable homes to be built for the people. This is a vital matter. The banking commission reported that the Government could safely expand credit through the Commonwealth Bank to enable homes to be built. It is a sound proposition. The policy of the Government, coupled with a deterioration of conditions generaally, including a falling off of building activities, is bringing about a state of affairs similar to that which existed before the last depression. Press reports indicate that finance for building purposes is becoming increasingly difficult to obtain. Moreover, it is said that only from 50 to 60 per cent, of the value of a property can be obtained by way of loan. Further, according to the Weekly Economic Review, interest which averaged 5.6 per cent, for the previous quarter was 5.7 per cent, for September. That interest rates are gradually rising is an indication that money is more difficult to obtain, and that restrictions are being placed upon lending. That is a wrong policy. The present conversion loan is being floated at 3} per cent., which is £ per cent, above prevailing rates. Increasing interest rates are not to the advantage of the people and do not encourage those activities which provide employment for the people. About £17,000 was expended on obtaining a report on banking and monetary systems. I believe that the purpose of appointing the commission was to ward off the demand for financial reform. Little or nothing has been done by the Government to implement the recommendations of the commission. That body recommended that, where the policy of the Commonwealth Bank Board conflicted with that of the Government, the opinion of the Government should prevail. It said also that the Government must be prepared to substantiate its opinion by legislation. Those recommendations of the commission are sound. The Government should be prepared to lay down a banking policy and accept the responsibility for it. On page 196 of its report the commission said that the Commonwealth Bank can make money available to the Government, and others, free of any charge. That is in accordance with the policy which has been consistently advocated by the Labour party for years. A wrong financial policy is being followed in connexion with the present conversion loan, which is being underwritten by the Commonwealth Bank. Instead of borrowing to convert the bonds, credits should be made available in the Commonwealth Bank to all bondholders. Should the loan not be taken up the Commonwealth Bank will have to provide credit to those persons who now hold bonds. In any case, the bank will have to find money for some bondholders. It would be a sound policy for the bank to advance money against all the bonds.

Mr Prowse - Free of interest?

Mr CLARK - Yes, in accordance with the recommendation of the commission. If the Commonwealth Bank were to. advance money free in respect of all tha bonds, money would be available for investment in industry, employment would be promoted, and the spending power of the community would be increased. Moreover, the interest-bearing debt would be wiped out, and the interest bill and tax burden reduced. If bondholders, whose investments total about £90,000,000, wished to raise credit on their holdings, the banks would advance to them at least £60,000,000. The only security which the bank would have for the return of the money would be the credit of the nation. If it be sound finance for a banking institution to advance £60,000,000 against bonds " with a face value of £90,000,000, surely it would be sound finance for the Commonwealth Bank to issue direct to the Government against those bonds.

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