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Wednesday, 12 October 1927

Senator NEEDHAM (Western Australia) . - When speaking last week on the motion for the printing of the budget papers, I laid particular stress upon the Government's borrowing policy. I now intend to emphasize some of the references I then made to that policy, which, accord ing to the measure now before us, it intends to pursue. I pointed out, as is clearly shown in the budget, that there had been a manipulation of loan moneys, in order to show a book surplus. In 1922-23, £2,572,000 was spent on new works, buildings, &c., out of the Consolidated Revenue, whilst lastyear only £215,000 was obtained from that source. The point I wish to stress is that the Government has established a very unsound policy of lavishly spending loan money upon other than reproductive works, and that unless the policy is changed we shall find ourselves in a difficult position. As the loan expenditure on new works increased from £5,000,000 in 1921-22 to £7,000,000 in 1926-27, it will be seen that the alleged surplus of £2,635,000 has been obtained by the simple method of conserving over £2,500,000 of revenue moneys which were once spentonnew works, buildings, &c. Compare this Government's policy of spending loan moneys on this class of works with that of the Labour party when it was in power. The elections of 1910 gave the Labour party a sweeping victory, and theFisher Labour Government, which then took charge, remained in office until 1913. In 1913-14 it went out of office ; but after the double dissolution of 1914, was returned and remained in power until 1916. During that time the money spent out of Consolidated Revenue on new works, buildings, &c., excluding money spent on naval construction, was as follows : -


During 1913-14 Labour was out of office, and under the Government of which Sir Joseph Cook was the leader £2,546,000 was spent out of revenue on new works, buildings, &c. The figures for subsequent years were -


These figures show that it was the policy of the Labour party, so far as was possible, to meet the cost of new works out of Consolidated Revenue, and not out of loan moneys. One of the first things Labour did when it came into power in 1910, was to repeal the Naval Loan Act, which proposed to build the Australian navy out of loan funds, and it built the navy out of revenue.

Senator SirWilliam Glasgow - Did the Labour government make provision for a sinking fund for the repayment of its loans?

Senator NEEDHAM - I shall come to the sinking fund directly. The amount spent annually out of revenue on additions, new works, and buildings by the present Government, is as follows: -


It will be seen that the amount has diminished gradually, and that latterly almost the whole of this expenditure has been met from loan funds. In the five years that Dr. Page has been Treasurer, the expenditure out of revenue on additions, new works and buildings, has decreased by £2,356,000, proving conclusively that the present Government has seized every opportunity to finance works out of loan money and not out of revenue. And upon analysis, I venture to say that not all of the works upon which loan money has been spent are of a reproductive nature. I do not say that Australia can get along without borrowing. It would be foolish to take up that attitude; but this Government has gone to the other extreme, and is borrowing freely for everything. The gross debt of the Commonwealth is £461,000,000.

Senator Sir William Glasgow - Including moneys borrowed for the States.

Senator NEEDHAM - I admit all that.

Senator Sir William Glasgow - Why not deal with the net indebtedness of the Commonwealth ?

Senator NEEDHAM - If the Acting Leader of the Senate will give me a chance, I shall do so. It is evident that Dr. Page is now practising what he condemned as a private member.

I expected to be reminded of the existence of the sinking fund. We are told that in a certain number of years the national debt sinking fund will provide for the liquidation of our debts. But if that is so how is it that our net indebtedness does not decrease? On the 30th June. 1922, it stood at £339,000,000; to-day it is £341,000,000. It seems strange that whilst on the one hand we are told that the national debt sinking fund is reducing our debt, on the other we find our net debt and our gross debt increasing, our borrowing increasing and our interest bill increasing. When will the one overtake the other ? My only explanation is that the sinking fund is being taxed beyond its capacity. It is too severely handicapped. Like a horse carrying too much weight in a race, it cannot overtake the field. Our sinking fund is not commensurate with the liabilities we are incurring. I have already said that a State Premier was termed a disloyalist when he borrowed money in America, but we know now that the Commonwealth has also borrowed in America. Mr. Monell Sayre, a leading New York banker, speaking recently of Australian borrowing and the high rate of interest that Australia is paying for its loans, said: -

It seems to me that Australia is borrowing too much for current expenses.

And that is so; this Government is not pursuing a sane financial policy. I find in the columns of the press that support my friends opposite, particularly at election times, consistent condemnation of the borrowing policy of the present Government. The Age in a leading article said recently -

The truthis that, under the members who constitute the present cabinet, federal finance is becoming more and more chaotic.

We have been told that the people will soon be relieved of some of their taxation burdens; but while the man in the street has to foot the bill for the interest on our loans he cannot get relief from taxation. It is true that there have been a couple of reductions in the income and land tax, but it is only the richer people who have benefited, and not the men on the bread line. To meet her war obligations Great Britain imposed a super-tax on certain incomes - I believe it is still in existence - but Australia did not. As a result the workers have been obliged to bear a greater proportion of the burden of repaying the war debt than is borne by those who profited by the war. During those awful years of struggle we heard a good deal about the profiteer, the man who was amassing a fortune from the shedding of human blood. We were told that he would be called upon to bear a heavy share of the liquidation of the war debt. It is certainly true that for a while, and a very little while, we imposed a tax on war-time profits, but I venture to say that the profiteer has escaped his fair share of the burden of taxation, while the men and the dependents of the men who went away ro fight have had to pay more than their fair share. I claim, therefore, that the borrowing policy pursued by the Government is not beueficial to Australia.

In the schedule to thebill provision is made for £300,000 for advances of passage money, landing money, and medical fees to assisted immigrants.I cannot see what justification the Government has for spending loan moneys for this purpose. From 1921 to 30th June, 1927, the Commonwealth paid £1,037,136 as free passage money to assisted immigrants. What have we to show for that expenditure, either in the number of migrants who have come to our shores, or by wayof an accession to productive work? Nothing at all. Yet we are asked to consent to a loan bill to appropriate £300,000 for passage money, landing money and medical fees of assisted migrants! During the same period the sum of- £372,661 was loaned to assisted migrants for passage money, landing money, and medical fees. Of that amount £206,906 has been repaid, leaving a balance outstanding of £165,755. With a wellconsidered scheme under which migrants were carefully selected, they could help to solve our problems. The existing system does not confer any benefit upon Australia. We have a Development and Migration Commission and a Departof Markets and Migration. A special officer recently left Australia to join the staff at Australia House. The High Commissioner, Sir George Pearce, and the Minister for Trade and Customs (Mr. Pratten) have toured England in the interests of migration, yet no good results have accrued. Recently a deputation waited on the Premier of Victoria with the request that he should provide work for the unemployed in Melbourne. He replied that he did not have the money necessary to put in hand works that would afford relief.Yet the Commonwealth Government proposes to incur an additional expenditure in bringing to Australia migrants who will accentuate our . unemployed difficulty, as they have done in past years. That is a wrong practice. The policy of the Government should be first and foremost to see that Australians are provided with work. It could then assist migrants to come to Australia to take a part in the development of our natural resources. This expenditure out of loan funds cannot be termed reproductive. I shall be interested to learn in what way it has resulted in further productivity. I remind honorable senators that the money thus spent is not recoverable. When Dr.

Earle Page was a private member, be strongly denounced the expenditure of loan money to assist migration. He acted rightly. Since he became Treasurer, however, he has continued the practice which he then condemned. From 1921 up to the 30th June last £1,037,136 was expended in providing free passages for assisted migrants, and of the amount loaned £165,755 has not been repaid. Thus the Commonwealth is out of pocket to the extent of £1,202,891. A halt should be called to this extravagant policy that the Government is pursuing.

Senator Ogden - Does the honorable senator believe that migrants add to the ranks of the unemployed?

Senator NEEDHAM - The migration systems under which we have been working for many years has accentuated the unemployed problem. Before bringing migrants to Australia we should make available land that is now locked up by land monopolists in the various States.

Senator Grant - How can that be done?

Senator NEEDHAM - By the imposition of an effective tax on the unimproved value of the land. The land monopolists will not till it, and, adopting a " dog in the manger " attitude, will not allow anybody else to do so. Until that land monopoly is destroyed and the land hunger of our people is satisfied, no system of migration will be of benefit to Australia.

Senator Ogden - The figures show that the percentage of unemployed persons is gradually decreasing.

Senator NEEDHAM - I have studied those figures, and I have also had some experience in the handling of armies of unemployed men. I have seen amongst those men in Western Australia migrants who were assisted to come to Australia. Ostensibly they were brought out to go on the land, but within three or four weeks they returned to the city and sought employment as boiler makers, carpenters, engineers, and so forth. Although both Commonwealth and State money is expended upon migrants, they compete with Australian workmen in the labour market during the winter months.

Senator Reid - The honorable senator was brought out to Australia and competed with Australians for the work that was offering.

Senator NEEDHAM - I throw that back in the teeth of the honorable senator. I was not brought out to Australia ; I paid my way. I was very glad to come here, and I have never had any desire to leave.

Senator Reid - I did not say that the honorable senator was brought out as an assisted immigrant.

Senator NEEDHAM - The honorable senator did; I ask him not to make that statement again. I regard it as an insult.

Senator Reid - I did not mean the statement in the way the honorable senator has interpreted it.

Senator Sir William Glasgow - Does the honorable senator regard such a statement as a reflection on all assisted migrants ?

Senator NEEDHAM - I regard it as a reflection on myself; but I shall let it pass. The Government should call a halt in connection with loan expenditure, and so far as is possible, confine its borrowing to works of a reproductive nature.

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