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Thursday, 7 August 1930

Senator RAE (New South Wales) . - Every honorable senator must have gained a great deal of enlightenment from the figures quoted by the honorable senator who has just resumed his seat, and his lucid exposition of them; the Senate is indebted to him. It is to be hoped, that the criticism which he levelled against the methods of keeping our national accounts will bear . fruit in the near future. At any time the. ordinary man in the street has sufficient difficulty in understanding financial statements, but when, as is frequently the case, the figures are coloured by party conflict, they are more difficult to understand, because the deductions drawn from them are not always reliable. The . honorable senator explained that the figures quoted by him were supplied by the Treasury, so that their authenticity and accuracy can be vouched for, and we shall find when we . peruse ' them in Hansard that they are even more illuminat ing than they appeared to be when we heard them from the lips of the honorable senator. It is' not my intention to- spoil the effects of such an enlightening speech by attempting to deal with the matters to which the honorable senator referred. I desire to refer to one or two matters mentioned by the Leader of the Opposition. I do not want to enter into a discussion as to who has been most responsible for squandering public money, building up deficits, or wasting accumulated surpluses. The fact remains that the finances of this country are in a very serious condition. As the party to which I belong did undoubtedly receive a mandate from the people to take over the reins of office, and did foreshadow some of the methods by which it proposed to deal with financial problems, honorable senators must admit that the proposals of the Government to wipe out the deficits must be given a fair chance. It is useless for honorable senators to build up fantastic budgets of their own, although I admit that it is the function of the Opposition to point to any errors or deficiencies in the budget presented to them.

I, personally, am not diffident about referring to the proposal to reduce the salaries of public servants and of the members of this Parliament by 10 per cent. I see nothing fair in that proposal so far as it affects public servants, because if our income tax is based on a sound foundation, with a sliding scale of taxation according to the amount of income, then it would be only fair, in the event of an all-round deduction of salaries of public servants, that -that reduction should also be on a sliding scale according to the amount of income. No doubt, every honorable senator considers, that he himself is worth the amount he receives for his services. Consequently, whatever the public may think, he is not disposed to agree to a. reduction of his salary on the ground that he is not worth it. If that assumption is correct, any argument for a reduction of salary must be based on the existence of a national emergency. To reduce salaries, or ration employment- which is really a reduction of salary - is to adopt a wrong method to overcome a depression. In my opinion, it is a most absurd method of meeting our financial difficulties: instead of relieving the general economic difficulties, it only accentuates and intensifies them. Obviously, a reduction of salaries must decrease the purchasing power of the persons concerned. Their reduced purchasing power reacts on every class of business, bringing about further reductions, and so we get into a vicious circle which must inevitably reduce the standard of living. Excellent as was the speech of Senator Greene, I think that he failed to deal sufficiently comprehensively with the illustration that he advanced with regard to there being a pool from which we must all draw our sustenance. If there is such a common pool it eventually depends not so much on how much each draws from that pool, but on how many are putting into it, and what they put into it. A good deal of the cause of the depression from which we are suffering is not due to there being an under-production on the part of those who are the real producers of wealth, but to the fact that there are so many of the semi-parasitical class who create no wealth whatever. One of the chief functions of honorable senators opposite seems to be to defend the position of those who are, from an economic point of view, of no use to the community.We are told from time to time that we must cut down expenses, and increase production. I remind honorable senators that we have been given many instances in this chamber of the evils of over-production. Only last night, in a measure that was rejected in this chamber, wc learned of the difficulties confronting the primary producers engaged in the production pf hops, and were told that propositions had been made, and were being seriously considered, to pay a. number of those primary producers a fixed sum for a number of years in order to persuade them to discontinue producing hops.

Senator Herbert Hays - That is because the costs of production in Australia are so high that we cannot export our produce.

Senator RAE - At the same time, hops are being imported into Australia. I do not wish to transgress the Standing Orders, but honorable senators are aware that strong evidence was advanced to show that a good deal of the high cost of production of hops in this country was due to the employment of inefficient methods.

Senator Herbert Hays - That is not so. Quality for quality, our hops compare with anything in the world.

Senator RAE - One might grow iu a flower pot wheat of an exceptional quality, but that would not prove one's ability to grow and market wheat on a commercial scale. The honorable senator's argument does not prove that the most economic methods of production are being employed in the Australian hop industry. I remind honorable senators that a similar state of affairs is general throughout the world. Only a few years ago the production of cotton in the southern States of the United States of America was so great, the crops were so magnificent, and the yield so splendid, that the growers met and decided that they must destroy one-third of the crop on each holding. Some of the growers, having had a run of bad luck for a number of years, wanted to obtain the advantage of the good yield, and refused to fall in with the desires of the majority. Thereupon organized corps of night raiders went around the country and burnt out the crops of those who would not fall in with the will of the majority. Only recently we read that it was proposed to destroy 4,000,000 bags of coffee in Brazil in order to improve the price of the remainder of the crop. These instances are not isolated. Overproduction is general, and drastic steps have to be taken in order to maintain satisfactory prices. Yet some honorable senators claim that the one panacea for all our economic ills is for the toilers to work harder, and put in longer hours for less wages. That is a doctrine of abomination. Owing to a contingency that has arisen, and which I need not explain, I ask leave to continue my speech at a later stage.

Leave granted; debate adjourned.

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