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Wednesday, 17 December 1930

Senator DALY (South Australia) (VicePresident of the Executive Council) . - I should not have taken part in the debate but for the fact that Senator Colebatch questioned the constitutional power of the Government to introduce this bill.

Senator Sir Hal Colebatch - In its present form.

Senator DALY - Measures of this kind must be looked at as much from the point of view of the spirit as the letter of the legislation. There is no doubt that the bill could be defended upon its constitutionality and from the point of view of its bounty provisions.

Senator Sir Hal Colebatch - Is it; u bounty bill?

Senator DALY - I should say that, ii could be brought within the definition of a bounty, because wheat, before it can be marketed, must be reaped. It is still in course of production until it is actually harvested. The Commonwealth certainly has power to grant a bounty to encourage the primary producer to reap his wheat.

Senator Sir Hal Colebatch - No onedoubts that.

Senator DALY - If the Government had not introduced this bill to provide for some form of assistance to outprimary producers, tens of thousands of acres would not have been reaped this year.

Senator Sir Hal Colebatch - Why did not the Government provide assistance in the form of a bounty? Obviously, then the proposal would have been constitutional.

Senator DALY - As the honorable senator knows, many conferences have been held during the last few months between representatives of the primary producers and the Government to consider the form of assistance to be given, and motions for the adjournment have been moved by members of the Country party in another place, to discuss the desperate plight of our wheat-growers. I admit candidly that it is a pity that the bill was introduced in the dying hours of the session. We were unable to devote the time which, otherwise, would have been given to its preparation.

Senator McLachlan - The title is rather unfortunate. It looks like a financial measure.

Senator DALY - I candidly admit that the title might have been more happily worded.

Senator Sir Hal Colebatch - But the bill follows the wording of the title. All through its provisions there is refer- ence to finance.

Senator DALY - I agree that if it had to be argued before a hyper-technical legal tribunal, some exception might be taken to the title.

Senator Sir Hal Colebatch - Does not the Leader of the Senate realize that it may come before such a tribunal?

Senator DALY - Unless it is passed expeditiously there will be no need to worry about the bill on that score; but I have no fear that, in its present form, the bill could be successfully defended before any tribunal.

Senator Sir Hal Colebatch - The High Court is the only tribunal that might be called upon to deal with it.

Senator DALY - It might even go higher than that. But it could safely be defended in the High Court, because the Dried Fruits Act, which is similar legislation, came before that tribunal and stood the test.

Senator McLachlan - It was in a somewhat different form.

Senator DALY - I invite honorable senators to continue this interesting legal discussion when we are in committee. We can then decide how far, and to what extent, the provisions of this bill differ from existing legislation.

The PRESIDENT (Senator the Hon W Kingsmill - It is not usual to discuss the details of a measure on the motion for the second reading. I must ask honorable senators to confine their remarks to the general principles of the bill.

Senator DALY - I shall be glad to do that, Mr. President, but I considered it advisable to speak to the points raised by Senator Colebatch, in order to ensure the passage of the second reading. The provisions are almost a facsimile of those to be found in other similar legislation in which money is appropriated by Parliament. The only difference in this measure is that the Minister may arrange with the Commonwealth Bank to finance the scheme. If the Minister cannot arrange with the bank, he cannot take the money out of the Consolidated Revenue. If Parliament passes legislation, the effect of which is to increase the Commonwealth overdraft, clearly there is an implied moral suasion on the directors of the bank to find the money.

Senator Sir George Pearce - But the banker always has the last word on that point.

Senator DALY - I admit that in regard to this bill, but I am prepared to defend it on the ground that it is a gesture from this Parliament that the institution in charge of the credits of the Commonwealthshould explore every avenue to make it possible for the Government to prevent deflation from running rife.

Senator Sir George Pearce - Or inflation.

Senator DALY - No. The honorable senator and his friends may talk a good deal about inflation, but what would be the position of Australia if the farmers could not reap their crops ? Is there anything worse than uncontrolled deflation? The present proposal is part and parcel of the Government's policy to prevent deflation from going any further than it has gone.

Senator McLachlan - The Government is falling into the error made by Mr. Wickens and forgetting that there is an outside parity.

Senator DALY - I have heard Mr. Wickens quoted with approval by honorable senators opposite, but as soon as he sees a particular danger, which has not been seen by honorable senators opposite, he is immediately regarded with disapproval. No honorable senator can deny that if the crops cannot be reaped Australia will lose more than the £6,000,000 referred to by Senator Duncan.

Senator Sir George Pearce - Will the honorable member say that the low price of wheat is caused by anything in Australia ?

Senator DALY - No. But I suggest that,unless it can be made possible for the primary producers to reap their crops and market them at whatever price they can secure, we shall bring about a system of deflation in this country which will do a great deal more than anything else to rob the savings bank depositors referred to by Senator H. E. Elliott.

Senator Sir George PEARCE - Is not the Minister fighting shadows?

Senator DALY - No; I am replying to Senator Colebatch, who warned honorable senators that this bill was a proposal to bring about inflation. I throw the statement back in his teeth and say that the bill is a considered effort on the part of the Government to prevent further deflation. We have heard a great deal of talk about credits and about the Government being out to destroy the value of our currency, and repudiate, but I say advisedly that this bill is consistent with the policy which has been adopted by the present Government from the start, that of preventing deflation from running rife. I think that honorable senators will appreciate the fact, that, in its effects, uncontrolled deflation can be worse than uncontrolled inflation. It is necessary to control inflation, and it is equally necessary to control deflation. This country, however, will have absolutely uncontrolled deflation unless some relief is given to the primary producers. L hope that the second reading will be carried, and that in committee the policy of the Government will be accepted so that during the recess something may be done to relieve a most deserving section of the community.

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