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Thursday, 8 October 1936

Senator BROWN (Queensland) . - I feel almost abashed to speak after the fiery talk of Senator Arkins. Ho made a most damning attack on the Australian Broadcasting Commission, and I followed his remarks with great interest. It is difficult indeed, to descend from the empyrean heights of Senator Arkins' rhetoric to deal with such a prosaic subject as the budget. I endorse a good deal of what the honorable senator said, although I consider that it was not British for him to attack a man who has no opportunity to defend himself. There may be much to be said against the conduct of Captain Adkins, but that gentleman has no opportunity to present his side of the case. I am at one with Senator Arkins, however, in his attack on the Government for adopting a "hush-hush " attitude on broadcasting matters. This " hush-hush " policy is pursued, not only with regard to the Australian Broadcast ing Commission, but also in respect of many other matters concerning which the people should be taken into the confidence of the Government. This attitude has been adopted by the Government on the subject of the JapaneseAustralianUnited States of America trade struggle - I use the term " struggle " because my honorable friends opposite have looked askance when on other occasions I have spoken of the " trade war." The ordinary member of Parliament is denied any opportunity to deal with these matters of public importance, but the Prime Minister is able, through the Australian Broadcasting Commission, to lecture the people regarding the Australian aspect of the trade dispute with Japan - I have no doubt that in Japan the leaders of the Government are availing themselves of similar opportunities to justify to the people their attitude. In view of the secretive policy of the Government, I welcome the powerful demand made by Senator Arkins for the light of day to be thrown on the Australian Broadcasting Commision's activities. That body handles hundreds of thousands of pounds annually, and we have not a full knowledge of the manner in which it is expended. For all we know the money may, as Senator Arkins has alleged, be wasted.

Senator Foll - A great deal more money would be wasted if a royal commission were appointed.

Senator BROWN - If Senator Arkins has correctly depicted the circumstances of broadcasting, the appointment of a commission would be justified.

We are told that the budget is the finest that has ever been placed before this Parliament. Our good friends on the Government side of the House have gone into ecstasies over it. I do not begrudge the Government its moment of ecstasy. Were the Labour party in power, and able to present to the Parliament a budget containing presents for the people it represents equal to those provided in this budget for the wealthy friends of the Government, it, undoubtedly, would say: " Look what we have done for the good of the country." The Labour party welcomes some features of the budget, but does not admit that it is wholly good.

To the Labour party the budget is like the curate's egg, good in parts. According to Senator Johnston, it is not a good budget, because it does not contain provision for a grant of £300,000 to Western Australia, and because it does not provide help for the drought-stricken wheat-growers in that State.

Senator E B Johnston - Mr. Curtin also agrees that the amount of the grant should be £300,000 more than is proposed.

Senator BROWN - So do I. If Western Australia is suffering disabilities the Commonwealth Grants Commission and the Commonwealth Government should not reduce the «ompensation offered to the State. According to Senator Johnston, whom I believe to be an honest, straightforwarded person, the Commonwealth Grants Commission has altered the basis on which the grants are made.

Senator E B Johnston - The commission puts itself above the Government, and above Parliament.

Senator BROWN - Parliament should not follow it, and if Western Australia is suffering disabilities as the result of federal legislation it should receive adequate compensation from the Commonwealth Government.

Senator Herbert Hays - The Western Australian Government is budgeting for n surplus.

Senator BROWN - But Senator Johnston has told us that that surplus has been " skittled " by the action of the Commonwealth Government. The Government flatters itself that it has done splendidly with its budget, but there are thousands of workers who look on it with disfavour. Of what use is it to tell the 35,000 men on the dole in New South Wales that the Commonwealth Government has balanced its budget, when those unfortunate citizens cannot possibly balance their budgets? I make no apologies for bringing before this Senate once again the sad plight of thousands of men and women in this country, especially when the Government and its supporters are working themselves into a state of ecstasy.

Senator Hardy - It must be difficult for the honorable senator to pick the budget to pieces.

Senator BROWN - I am not concerned about picking it, to pieces, but I am satisfied that the Government has no cause to preen itself on what it has done. When the money is rolling in, it is easy for the Government to remit taxes. Millions of pounds are coming into the Treasury from customs and excise, sales tax and every other source from which governments draw their funds, and, when the Treasury chest is full, what is easier than for the Government to say, " We shall remit this and that " and, like the fly on the wheel, " kid " itself that it alone is the motive force.

Senator Hardy - Does the honorable senator not think that the Government has acted wisely in the course that it has pursued ?

Senator BROWN - I do not think that the Government is at all wise. It is only the turn of the economic wheel that has enabled it to go to its friends and say. " We are remitting so many thousand pounds' worth of taxes ". In the Sydney Sun, I read recently that the tax remissions will be worth £30,000 a year to one firm. For that firm undoubtedly, this is a splendid and beautiful budget ! Were I a member of a firm that had so much money placed in the pockets of its shareholders, I should be ready to commend the Government from the bottom of my heart. But if I were a dole worker I could not be expected to go into ecstasies over the budget. The Government's financial policy is good or bad, according to one's point of view. Actually, this budget is like a good many more that have preceded it; it is highly gratifying to one class of the community and a dismal disappointment to another class. It contains no planning for the future. One could expect a progressive government to plan for the future, but this budget plans for permanent poverty. All that it attempts is merely to keep the workers in a peaceful frame of mind.- It makes no attempt, by planned action, to increase the total productivity of Australia, which, to-day, should be the objective of organized society working through its political system, so that there could be a greater and more equitable spread of wealth amongst the people. What Parliament is being asked to do at present is merely to take so much from the com- m unity by way of taxes and then to distribute it.

Senator Hardy - The attitude of the Labour party is that more should be taken.

Senator BROWN - The Labour party's position is entirely different from that occupied by the true-blue Conservatives who constitute the present Government; they are dealing only with the economic circumstances of to-day. If in power, the Labour party would deal with the realities of the present-day situation, as I admit this Government is doing, but at the same time it would try to legislate in such a way as to provide the greatest possible extent for the future, and thereby ensure increased productivity and a more equal distribution of wealth in the community. This Government is satisfied to have thousands of men and women out of work and to preserve the uneconomic dole and relief work systems. This budget entirely lacks any provision likely to lead to a general increase of productivity or any increase of the well-being of the masses.

Senator Herbert Hays - But the honorable senator believes in a policy of less work.

Senator BROWN - I was not mentioning that aspect, but was dealing with the need for scientific organization of industry, so that the people as a whole might be better placed. This Government is content to take with one hand and to give back with the other, and then to say " Hey presto ! See what we have done !" It fails to realize that any benefits which may accrue are due, not to governmental action, but to the turning tide of prosperity. There has been a substantial increase of the revenue from customs duties on imported goods and, also, of the excise revenue. This Government's experience in that respect parallels that of the Bruce-Page Government some years ago when the Treasury found difficulty in spending the millions of pounds that poured into the Government's coffers. But whilst the position in the Federal sphere may be satisfactory can it be said that Australia, as a whole, is doing so well? Allof the States have difficulty in balancing their budgets. The federal and State Governments may be likened to the members of a family, and the insolvency of individual members renders the position of the family as a whole far from reassuring. State Governments are discontented with their present financial relations with the Commonwealth. Despite the proud boast and the rhetoric of the Treasurer (Mr. Casey), we cannot lose sight of the fact that the States are not paying their way, and that an ever increasing tax burden is being laid on the shoulders of the people to meet the rising public debt. The debt industry has been working overtime lately. The Treasurer has told us that during the last four years the public debt has increased by £67,954,000. Analysed, his figures show that States debts increased in that period by £75,799,000 and the Commonwealth debts decreased by £7,845,000.

Federal and State Governments are similar, and the Commonwealth has no monopoly of intelligence in the application of its principles to practical politics. Surely no honorable senator will declare that as regards general intelligence members of the Commonwealth Government stand head and shoulders above members of any State Government.

Senator Herbert Hays - The honorable senator ought to be pleased that the Commonwealth Government is able to show a surplus.

Senator BROWN - I am exceedingly pleased, but I am endeavouring to show that the financial position of the States gives mo cause for gratification. Although the present Federal Tory Government has for its leader an ex-Labour man and another ex-Labour member is Leader of the Senate, and although members of the Ministry may claim credit for the Commonwealth surplus, they cannot deny that Australia as a whole is getting more heavily into debt.

Senator Hardy - How much of the increase of State debts was due to the activities of the Forgan Smith Government in Queensland?

Senator BROWN - The Premier of that State in his last budget speech told the people of Queensland that his Government was adversely affected by the present relations between the Commonwealth and the States. Western Australia, so Senator Johnston said this afternoon, cannot balance its budget and Tasmania is in a like position. Within the last few days we have had to deal with bills covering the expenditure of many thousands of pounds to assist primary industries in those States. Mr. Forgan Smith, admittedly one of the most brilliant Premiers which Queensland has had, said this in his budget speech recently: -

At this last conference (of Commonwealth and State Ministers) I suggested that the Commonwealth should increase its contribution under the financial agreement towards the liabilities of the States for interest ami sinking fund hy 25 per cent.

Hisrequest was unanimously supported by every other State including Western Australia which, according to Senator Johnston, wishes to secede from the federation.

Senator E B Johnston - No; according to the vote of the people.

Senator BROWN - I accept the correction, but I suggest that the vote of the people in that State was largely influenced by the misleading eloquence of Senator Johnston. Mr. Forgan Smith went on to say -

To accede to this request would have cost the Commonwealth something less than £2,000,000 per annum, and the relief given to Queensland would have been approximately £300,000 each year. The Commonwealth Government rejected this request and contented itself with a 20 per cent, increase in the Roads Grant from petrol taxation, which will give Queensland about £104,000 additional grant for specific purposes, for the next ten years, commencing in IU37-38.

It is important that honorable members should realize the position. The request made by tho States cannot be regarded lightly. It represents a prest deal more than their relative financial embarrassment at the present time. It is significant that all of the States arc suffering from tho grossly unbalanced financial position that has developed within the Commonwealth as a whole. Some of the States suffer more than others, and the three smaller Stales arc now receiving large special grants as a matter of normal procedure. In 1935-3(1 these special grants totalled £2.400.000, and to this large sum federal taxpayers in Queensland contributed their share.

Queensland has never grudged these less fortunate States the special assistance they have received. We are part of one Commonwealth, and we recognize our common obligations.

Other and occasional grants of a minor character aru made from time to time to all the Status as the Commonwealth Feels more or less benevolent or obliged by the exigencies of the moment.

As has been proved on so many occasions, we on this side have always supported requests from claimant States for monetary assistance. Mr. Forgan Smith said further -

But it is time that every responsible citizen of this State recognized the fact that all such temporary expedients are fast becoming obsolete and, indeed, intolerable, and that the financial obligations of tile Commonwealth are in need of review.

It is worth while to examine the proportions of Commonwealth Consolidated Revenue which has been contributed to tlie States since federation. I have taken out the figures for three periods - the first ten under section 87 of the Commonwealth Constitution (known as the "Braddon Clause"), the intervening period of sixteen years up to 1.92U-27. prior to the Financial Agreement under the Surplus Revenue Acts of the Commonwealth Parliament, and the period since then, lo 1934-35, under the Financial Agreement. The proportions for these periods are as follows: -


These figures show that a steadily decreasing proportion has been returned to the States.

The grants to he paid to the various States this year Will be dealt with in measures which will come before the Senate shortly from the House of Representatives, so I shall, then have an opportunity to say what I think abou them.

Senator E B Johnston - We should like to have the honorable senator's opinion of the reduction of the grants.

Senator BROWN - I have already told the honorable senator that I think Western Australia is entitled to the additional £300,000, and I am surprised that the Leader of the Senate (Senator Pearce), whose influence in the Caucus of the Tory party is well known, did not fight strenuously against the reduction of the grant to that State this year.

Senator ALLAN MACDONALD (WESTERN AUSTRALIA) - How does the honorable gentleman know that the Leader of the Senate did not fight against a reduction ?

Senator BROWN - Perhaps the honorable senator is right. Perhaps the Leader of the Senate did put up a fight for his State.

Although from the stand-point of the landed proprietors, of the men who farm the farmers, and of the rentier class, the budget may be gratifying, yet, considered from the viewpoint of the rank and file of the working classes, the artisans and the working farmers, it is not encouraging, because it does not make their position more secure or their lives any brighter.

Senator Herbert Hays - I thought tho working classes were pleased with tin's budget.

Senator BROWN - I have not yet beard any pæans of praise from the workers, although I have travelled several times up and down through central Queensland and I am in close touch with the workers. The Treasurer declared that about 335,000 persons have bee u put back into full-time employment. When I read that statement in the budget I thought that perhaps the Government had, at last, solved the unemployment problem.

Senator ALLAN MACDONALD (WESTERN AUSTRALIA) - The Government has got very close to it.

Senator BROWN - Senator Allan MacDonald, in his desire to stand in well with the Tory party, says that the Government has got close to solving tlie unemployment situation. How can he make that assertion when there are still 30,000 people on the dole in New South Wales' alone, as well as thousands in other States, including Queensland, although the employment position there is much better than in any other State? Thanks to the brilliant leadership of Mr. Forgan Smith, in that State the basic wage is higher, the hours of labour in industry are less, and the purchasing power of the pound greater than elsewhere in the Commonwealth.

The magnitude of the national debt should be a matter of concern to all. it now reaches the staggering total of £1.200,000,000. The political pioneers of 30 or 40 years ago would have thrown a fit if they had been told that, in this year of grace, the public debt of Australia would reach £1,200,000,000. There is, however, one redeeming feature; debts have to be paid in goods and workers have to he employed to produce those goods. So my withers arc unwrung when people who juggle with high finance tell me about the growing figures of debt. All the ordinary worker wants is a job and a decent wage, and that his wage shall have the highest possible purchasing power. There are three classes of wages - real, relative and nominal. The real wage is measured in terms of what it will buy, tlie nominal wage is the name given to the wage - it may be £3 to-day and £4 to-morrow - and the relative wage is the amount of definite purchasing power and command over goods that goes into the pockets of the workers in relation to the total productivity of the country. I have not had time to study the figures, but it seems to me to be questionable whether this budget will increase the relative wages of the mass of the people to any great extent. It is certain that, the nominal wage has seriously decreased during the last few years. In the industry in which I was engaged, the basic wage was a few years ago £5 a week, and it is now £4 5s. a week. The nominal wage may be a little more or a little less, but the workers are concerned only with securing a job and with what the reward of their labour will yield to them in necessaries and comforts. Having got a real wage, they should be interested in the relative wage and whether they are getting more or less of the total productivity. Can any honorable senator say that the real wage or the relative wage will be increased as a result of this budget? After all, the real test of any governmental action is the degree of security and happiness enjoyed by the people. If their security has not been enhanced, and real and relative wages have not been increased, the putting of thousands of pounds into the pockets of the rentier class by way of remissions of taxes is not of much service to those who do the actual work.

Senator Arkins - Does taxation decrease the real wage?

Senator BROWN - It depends upon many factors. As a matter of fact, that is answered by Senator Hardy's monitor, Mr. A. C. Davidson, general manager of the Bank of New South Wales, who, in a brochure, has pointed out that it ia necessary for taxes to be raised and spent by governments in order to give an imatus to recovery and provide wages for le workers when, because of the financial and economic depression ordinary business cannot possibly provide work and wages for the mass of the people. If the Government increases taxes it should spend the money in such ways as to ensure that the position of the masses will be improved.

Senator Hardy - If that policy were carried out to its logical conclusion, there would be nobody left to tax.

Senator BROWN - The Labour party recognizes the need for taxation, and that it cannot be eliminated at the present time. Possibly, if the social credit system proposed by Major Douglas were adopted, taxation would be a thing of the past. While we continue to impose taxes we must spend the money in such a way as to improve the general economic standard of the nation so that a greater amount of wealth can be produced. The Treasurer, in the concluding remarks of his budget speech, made a sly dig at the Labour party when he said -

The policy of the Commonwealth Government has had a very great influence in bringing about the desirable results reflected in. this budget. Unwise financial, monetary or tariff policy are- matters which would have gone far to prevent the effective operation of the factors making for improvement. Artificial speeding np of activity in Australia through credit expansion might have had temporarily beneficial effects, but would have introduced the probability of dangerous repercussions.

The Treasurer infers that if the Lyons Government had not been returned to power, unwise monetary policies would nave been implemented by Labour, and that there would have been artificial speeding up of activity through credit expansion. During the last few years, however, there has been great expansion of credit by the private banks of Australia. The only difference I can see between expansion of credit by private banks and by governments is that the private banks are able to get a considerable rake-off, whereas if credit had been expanded by a fiduciary issue the people would have received the benefit. Credit expansion should be controlled by the Commonwealth Bank. At present, how ever, the Commonwealth Bank is dominated by the private banking system, and no honorable senator can deny the fact that there has been an expansion of credit by the private banks.

Senator ALLAN MACDONALD (WESTERN AUSTRALIA) - Rather as a result of. extra production.

Senator BROWN - I refer the- honorable senator to what Mr. Davidson hassaid in this regard. If the honorable senator were to study the subject he would learn that there can be such a thing as credit expansion, which has for its object an increase of the productivity of the community by making possible the increased utilization of machinery and labour in industry and on the land. A student of economics knows that there is a certain elasticity in the modern productive system, and that if a bank or se number of banks wish to increase the total productivity of the nation, it can be done by way of credit expansion. That such expansion has taken place during the last few years cannot be denied. The Treasurer, in his budget speech, inferred that credit expansion has not taken place, but that if a Labour government had been in power it would have operated a wrong policy of credit expansion, and artificial speeding up of production would have resulted. What is the difference between the issue of credit by the private banks and the issue of credit by the Commonwealth Bank backed up by the total productivity of the country?

Senator Herbert Hays - Credit expansion has been brought about by the higher prices .received for our export goods.

Senator BROWN - I admit that there are other factors to be considered, but the banking system can, by the exercise of its powers of issuing bank credit,, influence the productivity of the nation. Any one who denies that is totally ignorant of what is going on.

Senator Herbert Hays - It should be so, but it is not so.

Senator BROWN - Does the honorable senator deny the fact that there has been an expansion of credit by the private banks ?

Senator Herbert Hays - As I have said, it has been brought about by the higher prices received for our exports.

Senator Hardy - There has always been expansion and contraction of credit.

Senator BROWN - The private banks have the power to issue bank credit, and if to-morrow there were a national emergency they would have the power to issue Further bank credit with the object of organizing industry for the greater production of essential commodities. That fact has been pointed out time and again, lorn Johnson, who, at one time, was a member of the Labour cabinet in Great Britain, wrote a book entitled Finance in War-time, in which he conclusively proved that there was a tremendous expansion of bank credit in England during the war years, in the early days of the war by the Government, and afterwards by the private banks, so that the Government was able to organize the successful prosecution of the war against Germany. The same procedure was followed in Australia. But whilst men lost their lives in that conflict, thousands of people in this country continue to draw money as the result of the expansion of bank credit that had 110 real existence. That credit did not come out of the savings of the people; it was deliberately evoked by the exercise of the private banking functions. When the Treasurer reflects upon .the Labour party and gives the impression that had we been in power we would have made the mistake of artificially speeding up activity in Australia through credit expansion, he is not actually telling the truth.} because there has already been a great speeding-up of activity as the result of credit expansion by the private banks. We say that under a proper organization this power now exercised by the private banks would be exercised by a central governmental banking institution, for the benefit of the whole of the nation. Keen students of banking are now of the opinion that the nation must take greater control over the issue of bank credit and that it should no longer be left in the hands of the private .banks. There is a vast difference between the policy of the Labour party and the old Tory policy, which accepts tlie domination of the private banking system. There is no certainty that within the next few years we shall not again have unbalanced budgets.

Senator ALLAN MACDONALD (WESTERN AUSTRALIA) - The next budget will be better still.

Senator BROWN - Any member pf this Parliament who really believes that never again will there be unbalanced budgets in Australia must be suffering from mental decay. It is indeed pathetic that at this time of international difficulty the so-called leaders of the community should be so happy in their ignorance as to believe that because the Treasurer has produced a budget show" ing a small surplus, the future is assured and all our troubles aTe at an end. The very actions of the Government demonstrate clearly that it believes that the years immediately ahead are fraught with grave danger. Japan lias been given a kick in the fiscal pants, and the United States of America has been caned on tlie ankles. Yet the Government professes to believe that it* actions will lead to greater prosperity throughout the Empire, and particularly in Australia ! The latest issue of Smith's Weekly contains an article by Mi-. Forgan Smith, the Premier of Queensland, dealing with the situation which has arisen between Australia and Japan and between Australia and the United States of America.

Senator ALLAN MACDONALD (WESTERN AUSTRALIA) - Why did he choose that medium to circulate his- views?

Senator BROWN - He probably chose Smith's Weekly because he knows that it is widely read throughout Australia. I am endeavouring to disabuse the minds of those honorable senators who have become obsessed by the idea that because the budget contains some excellent paragraphs there is -nothing to worry about for the future. Because I believe that the future is dark indeed, I urge the Government to do its best to make ample provision for the future, by exercising greater control over the national economic machine in order to ensure that the people of_this country shall be properly fed, clothed, and housed. Even in this garden city of Canberra there are bug huts at Molonglo. People there are suffering from -scabies, notwithstanding that the expenditure of a few thousand pounds would eliminate . the .eye-sores and remove the breeding places of disease. Unfortunately, similar miserable dwellings are 'to be seen throughout Australia. Instead of remitting taxes, thereby greasing the fat pig, and giving concessions to those who can well afford to pay, the Government should expend its revenues in eliminating dwellings which are unfit for human habitation, and should make it possible for the workers of this country to live in decency and comfort. The New Era, a publication associated with the Douglas Credit System, contains an article from the Hertfordshire correspondent of the London Times, in which the following appears: -

A new effort is to bc made to put the English rasher of bacon on Britain's breakfast table all the year round.

To-day I learned from Sir John Russell, director of Rothamsted, the oldest and most famous agricultural research station in the world, of the new ideas which may put pig- breeding on a fresh basis and ensure a regular supply of bacon pigs in factories which sow suffer because they are busy only at seasonal intervals. " Our present piggeries at Rothamsted ", Sir John said to mc, will be replaced by buildings constructed in accordance with tho very latest scientific principles. New forms of ventilation will be introduced. Already we are experimenting with electric radiators to ensure that our pigs sleep warmly on cold nights. " Sows which are expecting or have just produced litters cannot stand either unduly cold or unduly hot weather. If we can construct pigsties which remain at an even temperature it may bo possible to solve the problem of rearing pigs the year round and to prevent stoppage of growth in the autumn and winter when tlie hours of daylight ure short."

The PRESIDENT (Senator the Hon. P. J. Lynch). - The honorable senator must connect his remarks with the subject before the Chair.

Senator BROWN - The Treasurer stated that the Government intended to expend £8,000,000 on defence. One of the first essentials of a country's defence is that its people 3hall have something to defend. I admit that most Australians are in that position; but, unfortunately, there are some, even in this country, who have nothing to defend, and are living like pigs. I was pointing out that in England steps are being taken to make living conditions decent, even for pigs. I now plead that good Australians should be given at least that measure of comfort that the people of England claim for their pigs. Let us, in this Senate, do something to improve the condition of the human beings who make possible a budget which the Government regards as so wonderful. The Government flatters itself on having remitted taxes amounting to many millions of pounds, and on having set aside £8,000,000 for defence; but it is unwilling to spend a few million pounds to provide proper housing for the human beings who would be called upon to defend the country in the event of war. It is a fearful commentary on modern civilization that human beings are housed in rotten " piggeries " at Molonglo and elsewhere, and that money cannot be found to feed, clothe, and house them decently. I am sick and tired of referring to these things. Instead of flattering itself on the budget the Government should play the game with the workers and treat them decently.

Senator Dein - The honorable senator scarcely flatters the workers of this country when he claims for them the standard provided in England for pigs.

Senator BROWN - I believe that my fellow men are entitled to the same comfort as I claim for myself; and this rich country can give it to them. Every man. woman, and child in Australia should be able to live in decency and comfort. Honorable senators of New South Wales know that thousands of people in Sydney are not properly fed. Mcn must have healthy bodies if they are to defend their country. Fifty years ago Bismarck realized the need for healthy bodies if men were to become efficient fighting machines, but we in Australia do nor appear to have learned that lesson.

Notwithstanding that large sums of money are to be set aside for defence purposes, no encouragement is given by the Government to the development of airmindedness among the youths of the country by assisting gliding clubs. Recently, the secretary of : the Queensland Gliding Association asked that the Defence Department should do something more definite in the direction of developing an air sense among the young men of this country. If Australia expended a few thousands of pounds annually upon gliding clubs, as other countries are doing, thousands of young men would be sufficiently air-minded to develop into well-trained pilots within one-half the time now occupied in training them.

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