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Friday, 27 June 1930

Senator LAWSON (Victoria) . - This bill sounds the first note in connexion with the finances of the Commonwealth for the ensuing year. In accordance with well established practice, the Senate is now asked to grant supply for the next three months. I have looked through the bill and find that it is not. possible to check the expenditure for the first three months of the ensuing financial year with that of the first quarter of the financial year just closing. I do not know what is the practice of this Parliament in the matter. I have not been present at a budget debate, nor have I been a member of this chamber during the consideration of financial proposals. I suggest that it would facilitate the understanding of theposition by honorable senators if it were possible to put in one column the expenditure during the year just expiring, and the proposed expenditure for the ensuing three months in another column. That would enable honorable senators immediately to see the contrast. I do not for a moment doubt the statement of the Vice-President of the Executive Council (Senator Daly) that this is the normal expenditure; that the list contains no exceptional items that have not been fully explained; that it is based on the commitments for the ensuing year, of which we are making provision for one quarter.

I endorse what has been said by the Leader of the Opposition (Senator Pearce) regarding the unemployment grant. We all realize how aggravated the unemployed problem has become. It is high time that parties ceased to attempt to make political capital out of this very serious social condition, the greatest problem with which we have been faced. I know that at election time, when party passion runs high, it is the practice to blame the party in power, and to claim that the Opposition would be able to cure the evils if placed in the position of responsibility. I venture to. suggest that the party that is so well represented in this chamber by the Vice-President of the Executive Council has in times past been the greatest offender in that respect. It lias indicated that it held the panacea for this social ill. But the causes of unemployment go deeper than political expedient, and each party, when actually faced with the responsibility of dealing with the evils, discovers that there is no royal and easy road to their removal. The Government is making a grant to the States, and I think that the Senate might be informed by the Leader of the Government in this chamber as to the conditions of the proposed expenditure. We should know whether the Commonwealth Government is merely saying to the States " Here is this grant - make the best use of it that you can," or whether certain conditions are to be imposed upon the States as to how the money shall be expended. "No one would harass a government in any genuine endeavour that it made to alleviate the existing conditions. .1 suppose that the experience of all honorable senators at this time is a sad one. We have people, good, steady, honest and reliable workmen, knocking at our doors and asking if we can do anything to help them to obtain jobs. These are not unemployables and n'er-do-wells, but reputable working citizens. We should have hearts of steel if we were not moved to compassion by the spectacle that we have to observe ; by the experience that we are unfortunately compelled to go through. We all find the utmost difficulty in doing anything in independent cases, to meet the situation. Sometimes we meet with a measure of success, but it is not always so. One could paint no more pathetic picture than that of the breadwinner of a family earnestly seeking work, and being refused time after time. The Government must be supported by honorable senators in every earnest and honest attempt that it makes to relieve that condition of affairs. At the same time we have to realize that if taxation is made so burdensome, so excessive, so grievous to be borne, we shall take out of industry funds that are necessary to provide employment; that we shall stifle all initiative and effort, and stop at the source the flow of capital into enterprise, thereby definitely limiting the sphere of industrial activities. That has particularly to be borne in mind in the existing circumstances.

There is one other item on which I should like some assurance from the Leader of the Government in this chamber. The Treasurer seeks an advance of £1,500,000 to cover a period of three mouths. I know that sometimes, in connexion with these temporary supply bills introduced in various parliaments, the amount asked for is greater in proportion than the amount for the complete period of twelve months for which Supply will eventually be granted. I think that we should have some assurance from Senator Daly on that point. The honorable senator ought to give us a general survey of the position so that we may know whether there are any special purposes for which the amount is asked; whether this is the usual, or an unusual amount.

I have before me the last report of the Auditor-General, and if honorable senators will bear with me I shall read one or two extracts from it. At this time, there is nothing new that can be said regarding the financial position, and I have no desire to anticipate the budget debate; nor do I seek to obtain from the Leader of the Government in this chamber a declaration of financial policy at this juncture. We must not attempt to secure from him any advance instalment of the budget proposals. Our press has been full of the financial situation and Australia's economic position. The matter has been the subject of deep consideration by men in control of big financial institutions, and there is a certain amount of gossip and tittle-tattle going on, the extent of which perhaps we do not realize, but which is apt to add to the sense of despondency and to create an impression of instability. I take it that our obligation as senators and as leaders of public thought is to endeavour to study the position and to do nothing that will destroy the stability and confidence that is essential in every community. But we should not shut our eyes to the realities : we should realize that the facts must be faced. If we are confronted with dangers and difficulties, we at any rate have the resolution and the capacity to overcome them so far as it is within the power of an individual or a community to do so. Yet if the dangers are hidden and unseen ; if we are -not taken into the confidence of the Government and are left more or less groping in the dark, we cannot find a means of removing them. It seems to me. that the situation calls for candour and frankness on the part of the Government. I realize that there are certain things within the ken of men in high places, mon who are charged with great responsibility in times of national difficulty, that' cannot be spoken lightly. But a general survey of the position should be given with candour and honesty, so that the people may know what it is.

I said that it is not possible to say anything new on the situation; but the words of wisdom written by the AuditorGeneral should not fall on deaf ears. I presume that honorable senators have read the report. Paragraph 6, to be found on page 11, deals with the financial position. What has been said here cannot be repeated too often. It helps us to realize the policy that we have been pursuing. I am not blaming any particular government. The States and the Commonwealth have been equal offenders. I suppose that politicians have never been great apostles of economy. The cry of every Minister and every member of parliament is for more and more expenditure. Now and again we may hear " the voice of him that crieth in the wilderness," calling for economy; but it is not a popular cry. The urge is always for more and more expenditure. There is a very definite danger of politics, instead of being concerned with political principles and matters of high public policy, degenerating into a game of placating this section and that section, and of abusing its position to give bribes to States, or to different sections of the community. There is a likelihood of building up the impression that Parliament is to be regarded not so much as an institution for the public weal, as an instrument to extract benefits and confer bribes on different sections of the community. The time has arrived when we must get rid of that idea of poll: tics and of government. We must to some extent cast aside party divisions, and unite in a general endeavour to right the situation, to redress the trade balance, and to bring our country back to a position of stability.

The concluding paragraph of the ministerial statement read by the Prime Minister, and repeated in this chamber by the Vice-President of the Executive Council - one that I have previously quoted in the Senate - urged that it would be a good thing for Parliament to resolve itself into a kind of economic committee to seek a solution of our difficulties. The words of exhortation that I should like to address to Government representatives in the Senate are that I hope that the budget that will, in due course, be presented to Parliament will be framed in a national spirit. I hope that, if sacrifices have to be made, there will be no discrimination; that we shall be called upon to bear them equally and according to our ability to make them. It seems perfectly obvious that additional taxation will have to be imposed, and that expenditure will have to be reduced. But the Government may find that it is impossible to make such wholesale reductions in expenditure as will have a notice-" able effect on the balancing of our ledger. Customs revenue has dropped, and the effect of certain recent tariff proposals of the Government must inevitably result in reduced revenue from that source, so that there remains only direct taxation. Taxation can he used discriminately- to placate favoured sections, and to deal harshly with others. If it is imposed equitably, we must be willing to carry the burden. My plea is for no discrimination; for equality in the distribution of the burden, according to the ability to carry it. That seems to be the inevitable way in which the" Government will have to shape its proposals. It must effect such reductions as are possible, eliminate waste and prevent duplication, and particularly must it stop the wretched policy of duplication of effort between the Commonwealth and States.

I do not wish to offer criticism of what has happened in the past, but it seems to me that if, for instance, several of the States had forestry departments functioning satisfactorily it was unnecessary for the Commonwealth to duplicate expenditure by superimposing a Commonwealth Forestry Bureau upon the people of Australia. That, unfortunately, has been the tendency in federal politics. There appears to have been a desire on the part of successive Commonwealth Governments to reach out for further activities and responsibilities. This tendency must be checked. Neither the Commonwealth nor State Governments can afford luxuries of that kind. The Auditor-General, in his report for the financial year ended 30th June, 1929, pointed out that the deficiency in Commonwealth accounts for 1927- 28 was £4,209,492 and for the year 1928- 29 £4,395,540. This is a serious situation. The Auditor-General is a judicial officer. He knows no party. He is bound to serve the people without regard to the Government or party in power. It is his duty to report freely and frankly on the financial position of the Commonwealth. I commend his report to honorable senators. I hope they will read it and take heed of what he has said. It is not my intention to read at great length from it, but even at the risk of repeating what has been published in the press and said from the public platform on many occasions, I crave the indulgence of honorable senators while I direct attention to certain paragraphs. The AuditorGeneral states -

The heavy revenue deficiencies shown in the Commonwealth Treasury accounts for the last two years are not only a matter of serious concern to Parliament, but to the whole community. Reduced customs revenue and an increased expenditure are, of course, the main factors in causing these deficiencies. Reduced borrowings abroad and smaller returns from wool, wheat, &c., have resulted in an adverse trade balance which strongly indicatesthat Australia as a community is living beyond her means and mortgaging her future production. Only by reducing imports and increasing exports can the exchange position be remedied.

The difficulties of the Treasury at the present time are great, and the only remedy is economy in public and private expenditure. Two aspects of the matter present themselves -

(b)   Excess of expenditure by the whole community.

As to(a), all Government expenditure should be reduced so as to bring the annual costs of government within the revenue.

Duplication in Commonwealth and State activities should not be allowed. In particular, loan expenditure, so heavy in the past, should be confined to services of a reproduce tive character.

In the interests of greater production, industrial stability is vital. Anything in the nature of strikes, lockouts or failure to perform a fair day's work necessarily adds to the cost of production. Inefficiency in industry, unemployment, or the inability to make full use of available labour or plant operates in the same way. In turn, higher production costs cause higher living costs and increased wages - but not effective wages. Worst of all, the result is that production costs become so high that frequently Australian industries even when assisted by a high tariff, cannot compete successfully with manufacturers abroad in supplying goods for our own consumption. The exportation of the products of our secondary industries is consequently almost negligible.

SenatorRae. - The Auditor-General indulges in a number of platitudes.

Senator Payne -they are not platitudes; they are facts.

Senator LAWSON - It is true that the Auditor-General is repeating well-known economic truths. By virtue of his high place of responsibility it is his particular duty to direct the attention of Parliament to these truths in a pointed way, and it is but fitting that we should, at all times, take notice of what he has to say. In his lastreport he has indicated very clearly that we have departed from certain elementary economic truths.

Senator Dunn - Does the honorable senator say that this Government has done that?

Senator LAWSON - All governments have done so, and I must say that I have not heard any of my friends in the party to which Senator Dunn belongs urging governments to refrain from this or that item of expenditure. On the contrary, invariably they have urged the need for more and more expenditure. The AuditorGeneral goes on to say -

The above indicates briefly the necessity for an endeavour by all to secure a return to a satisfactory economic position. The resources of Australia are so great that that end may readily be achieved ifthe whole community will combine to make a moderate effort to pull together, work harder and save more.

Senator Dunn - What does he mean by saying that men must work harder? Does he suggest they they must drop dead on the job?

Senator LAWSON - Not at all. The Auditor-General is hound to say what he thinks of certain items of expenditure irrespective of whether his comments hurt this or that party.

The Prime Minister has urged all members of this Parliament to come together as an economic committee to consider the problems that confront the Commonwealth. In my judgment the situation is such as to call for united effort on the part of all members of all parties, and what I wish to say to the Government is this: I hope that when we have the details of the budget proposals we shall find that they have been conceived in a spirit of equity; that there is no politics in the budget,, but that it has been framed as a financial instrument by means of which all sections of the community will, be encouraged to pull together in a spirit of goodwill. 1 do not propose to say any more at this stage. This bill is a normal parliamentary measure to provide for the financial needs of the Government. It is the first indication of the requirements for the ensuing year, and this seemed to be a fitting opportunity for me to offer a few general observations on the financial situation and to direct attention to what the Auditor-General has said. I urge honorable senators to read other sections in the report which, out of consideration for their good nature, I refrain from reading.

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