James Scullin
James Scullin Australian Labor Party

Delivered at Richmond, Vic, August 15th, 1934

The election was held on 15 September 1934. The policies of the Lyons Government in response to the Depression were seen to be generally successful. The supporters of Jack Lang in the federal Parliament (Lang had been dismissed as NSW premier in 1932) continued their opposition to Labor leader James Scullin. Lyons travelled the country by air during the campaign in the plane of well known aviator Charles Ulm. The election result was a win for Lyons, with a small swing to the Labor Party. This was minimised due to the poor performance of Labor in NSW and Victoria.

The 1934 election saw the entry of Robert Gordon Menzies into Parliament. Menzies went on to become one of Australia’s most successful and enduring politicians. The UAP had won 33 seats, the Country Party 14 seats, Labor 18 seats and NSW Labor 9 seats. Key issues were employment, fiscal management, wages and rural subsidies.

James Scullin, National Library of Australia
James Scullin, National Library of Australia

James Henry Scullin was born 15 September, 1876 and died 25 August, 1967. Scullin was Prime Minister of Australia 22 October, 1929 to 6 January, 1932. He was the leader of the Australian Labor Party. Scullin represented the electorates Corangamite, Vic 1910 to 1913 and Yarra, Vic 1922 to 1949.

Elections contested

1928, 1929, 1931, and 1934

A grave responsibility will rest upon the people of Australia on September 15. At the last election the present Government was swept into office on a wave of credulous optimism originated by artful propagandists.

Returning prosperity with the advent to office of the U.A.P. was portrayed to the anxious minds of suffering men and women. The platform, the press, broadcasting stations and city hoardings were employed to proclaim the glad tidings that a change of Government would transform the people’s conditions from poverty to prosperity.

To give a semblance of having performed the wonders envisaged in their election declarations the Government and its supporters are striving to persuade the people that they have really entered into the Promised Land. Constant repetition that marvellous benefits have issued from the Lyons Administration is relied upon to convince the unemployed and struggling farmers that they are not really suffering from the privation they believe.

By unstinted expenditure on printed and radio messages, it is hoped to hypnotise electors into imagining that their ills have vanished. Political faith healing is being practised on a large scale, and magical curative results are conjured up as election day approaches.

When the Labor Government was in office every disability suffered by the community was emphasised and cited as proof of Labor’s wrongdoing. Today the serious ills of humanity are veiled from the political sight of many by the colored speeches and writings of Government apologists.

A financial avalanche

During the first two years of the depression the Labor Government struggled against a formidable economic and financial avalanche, and by resolute measures saved the country from being overwhelmed. Remedies had to be applied determinedly. No anaesthetics were available to ease the pain. When, later, our Government faced the electors, we made no attempt to disguise the truth. The facts were placed fully and frankly before the country. We outlined comprehensive measures to grapple with the unprecedented problems confronting us; but the alluring pictures of painted prosperity by our opponents won the day. Disappointment and disillusionment are now the lot of the multitude. Knowing this, and entering into the feelings of the disillusioned people, I come forth, on behalf of the Labor Party, with practical proposals that can be put into operation in the next Parliament—proposals that will be given effect to if Labor is elected to power.

The ideals of the Labor Party are set out printed in the forefront of our platform as an objective and a guide. The progress made in the realisation of those aims along the course of democratic development will necessarily depend upon the steps taken and the pace made as the will of the people reacts to changing circumstances in the light of experience and understanding.

Task and remedies

The immediate task confronting us, at this juncture, however, is to cope effectively with existing conditions by practical remedies for present-day ills.

Stern realities must be faced. We have still more than 300,000 unemployed. The majority of our farmers are working for nothing, and are sinking further into debt. Thousands of the youth of Australia have no permanent prospects. To meet the situation the nation is not called upon to set up an organisation to increase our productive power. There is no need to practise self-denial to provide the means of purchasing machinery, erecting plants, and buildings, and constructing railroads and wharves. We have all these agencies of production only partly in use. The one thing lacking is money.

The present monetary system has failed. Another must take its place. Control of monetary machinery for private profits must give way to national control for the benefit of all. Change of control alone, however, will not suffice. There must be a change of policy. Money must be made the servant of industry, not its master.

Monetary reform

Monetary reform involves the question of unemployed relief; a just price to producers; adequate social services; and a standard of living rising higher and higher until we have reached our capacity for production. These aims are practicable, and cannot be dismissed by mere political persiflage. The superior pose of bankers speaking with self-assumed authority cannot dispose of the tragic facts of private monetary control. Let the money masters be judged, not by their words, but by the fruits of their policy. Engineers have almost perfected productive machinery. Organisers of industry have co-related the factors of production so effectively that all human requirements can be provided in super-abundance. The controllers of finance, however, have lagged behind. They live in the financial era of the last century, and loftily scorn the demand for modern methods of finance to meet modern conditions.

The main features of the policy the Labor Party places before you include these vital issues:-

  • Radical monetary and banking reform;
  • Definite planning to provide employment;
  • Rising living standards to increase purchasing power;
  • Marketing of Australian products; and
  • Effective protection for Australian industries.

Labor set example

More than 20 years ago the Labor Party set out to nationalise banking; to bring banking and credit under National instead of private control. To that end the Commonwealth Bank was established by the Fisher Government. Starting witliout capital, it soon became a live competitor with the private banks, and, by its handling of Australia’s war loan flotations, saved the people of Australia £6,000,000 in flotation expenses alone. The direct profits of the Commonwealth Bank and Note issue, now exceeding £25,000,000, are substantial gains to all the people which otherwise would have gone to shareholders of private banks.

Fully one-third of the dividends from private banks operating in Australia is paid to overseas shareholders. It is not profits, however, that a nationally-owned bank should seek, but the general welfare of the people. Banks control credit, which is the life blood of all industries. Their power to expand or contract credit makes them overlords of industry and trade, and, in difficult times, even gives them control over the activities of Governments. If that power were exercised for public well-being, without first thought of profits or dividends, all would be well. But that is too much to expect from profit-making companies.

False allegations

It is suggeeted by unscrupulous political opponents, and by ill-informed critics, that the Labor Party would confiscate the banks, seize the deposits, and generally commit wanton acts of robbery and pillage. Such allegations are false. They are wicked misrepresentations of an honest Party composed of honorable men.

That persons occupying high positions in the community can degrade themselves to uttering such mendacities is beyond the comprehension of true Australians.

The Labor Party proposes to continue the work of expanding the Commonwealth Bank to that of a Banker’s Bank. Its control was taken out of the hands of the Governor and placed in a Board of eight, of whom six represented private financial and commercial interests.

The Governor’s position was a full-time one, and his energies were directed solely to the promotion of the Bank’s success. The Directors who were later appointed to give part-time service represented outside interests in the commercial and financial world.

Our proposal is to restore the management to a Governor, as originally, when established by the Fisher Government.

The bank will be freed to enter upon a policy of vigorous competition with the private banks. Branches will be established in centres where banking business warrants. The banking business of Commonwealth and State Governments, Municipal Councils, and all other public bodies will be reserved by legislation for the people’s bank. There is no just reason why public accounts should be building up private profits when there is a publicly-owned bank to do the work.

Contradictory criticism

Much of churlish criticism of that policy is self-contradictory. An oligarchy will be set up in banking, says one. The bank will be subject to political control, avers another.

Without going into unnecessary details, I point out that control by the full-time Governor, with proved capacity and integrity, is preferable to an oligarchy composed of Directors with greater interests outside the Bank’s operations. To guard securely against political control, or private interference with the detailed working of the Bank, the Governor would be appointed for a fixed period, and removable only by vote of Parliament, as in the case of judges.

Under Sir Denison Miller, who was appointed by a Labor Government, the Commonwealth Bank was free from political interference. Political control began when the power of the Governor was made subservient to a Board of Directors politically appointed by the Bruce-Page Government.

The policy and administration will be laid down by Act of Parliament. It is surely preferable to have banking policy decided by a Parliament representing the people than to have it dictated by vested interests.

Matters of high policy will be determined by Parliament and executed by the Government. But the detailed administration, the handling of individual accounts, will be kept free from Government or any other interference. That principle was laid down by the Labor Government in 1911, and is still the policy of the Labor Party.

Arbitrary fixing

Banks play an important part in determining interest rates. Supply and demand may operate, but the Banks exercise considerable control of the supply. Too often they arbitrarily fix the rate of interest, and a tightness in the money market is their opportunity to squeeze greater tribute from borrowers. Industries have been crushed under the interest burden, and only by legislation and public pressure have interest rates been reluctantly reduced.

Fears are entertained by officials in the private banks that their employment would disappear with nationalisation of banking. But, with the expansion of the Commonwealth Bank; the officers of other banks will find full opportunities of employment.

It is true that eventually there would be less duplication of branches. Who can justify half-a-dozen banks in a district where one would suffice? Observe the number of bank premises in suburbs or country towns where one post office copes with all postal work. And postal facilities are provided for a larger number of individuals than those patronising banks. With banking and monetary reform assisting and stimulating industry there would be greater opportunities for employment in all walks of life.

Objection is taken that the proposal would create a Government banking monopoly. But that is preferable to private monopoly in banking, which is coming nearer every year. Banks are being absorbed, and binding arrangements are made between the others.

In 1917 the principal private trading banks operating in Australia numbered 20. Since then 11 have been absorbed and nine remain.

The amalgamated balance-sheets of the trading banks for the 10 normal years after the war and before the depression, 1920 to 1929 inclusive, show their reported profits £46,086,930, and the dividends paid £33,237,787. These reported profits gave an average return on paid-up capital over the ten years of 14.86 per cent. The dividends paid averaged 10.61 per cent. on paid-up capital.

Absentee shareholders

The three London controlled banks, with their head offices, Boards of Directors, and a majority of shareholders overseas, have more than one third of Australia’s banking business and approximately, one third of their dividends go abroad. The City of London, therefore, wields considerable influence over Australian finance. In 10 normal years, 1920 to 1929, the reported profits of these banks were £16,000,000, and the dividends paid £12,000,000, their dividends ranging from 10 per cent. to 15 per cent.

In those 10 years the dividends paid exceeded the capital subscribed. In addition, a large percentage of their profits have been placed in reserves, to say nothing of considerable sums of hidden profits placed in hidden reserves. The amount of these can only be ascertained by a searching enquiry. The Labor Government will institute a thorough and impartial enquiry into the whole monetary question, as well as the operations of private banking.

May I explain that when the Government borrows direct from the banks by overdraft or issue of Treasury Bills, the banks are enabled to expand credit resting upon the nation’s credit, and so charge interest upon what virtually belongs to the nation.

There is no sound reason why the Government should pay heavy interest charges to private banks in order to utilise credit belonging to the whole community.

Public works for national needs as well as for the lifting of unemployment could be undertaken without crushing the people with heavy interest burdens.

As an excuse for its failure on unemployment, the Lyons Government quotes figures showing a decline to 20.9 per cent. in the number of unionists unemployed. The statistics quoted, however, do not include large numbers of boys and girls left school and denied employment. None of that alarming number is recorded in the Unions’ reports to the Statistician as unemployed. They have never been in a union, because never employed. Each year 90,000 boys and girls leave school seeking work. Fifty thousand wage earners die or retire annually. There are ninety thousand workers. Herein is the most tragic phase of unemployment.

A false claim

There are 1,610,000 employes in Australia who have reached the age of 20 years and over. On a 20.9 per cent. calculation that would give the total number of unemployed in Australia as 336,000. The position is surely grave in the extreme, notwithstanding that there has been some improvement! Let the fact here be noted that the increased price of wool, adding £22,000,000 to the National Income last financial year, was not due to any action by the Lyons Government. That rise, however, created optimism in certain quarters, and many who had locked up their money early in the depression are now beginning to employ it. The revival in gold mining due to currency depreciation and the stimulus given by the Labor Government was another factor in improving the position. These upward movements are wrongly claimed as achievements by the Lyons Government.

The Government also seeks credit for the increased employment in factories, but that is due almost entirely to the operations of the Labor Government’s protectionist policy.

The Chief Inspector of Factories reported that, in 1931, no less than 222 new factories commenced operations in Victoria, and that the number employed were 5776 greater than in 1930.

The higher duties, however, did not take full effect until two years after being imposed, owing to the holding of heavy stocks of imported goods. Despite duty reductions by the present Government, Australian industries have benefited from protection given by the Labor Government.

Statistics and stomachs

The number employed in factories has increased by over 60,000 since June, 1931. In the wool and worsted industry 5,000 more are employed than before the depression. In the cotton industry the number of employes doubled, and 2,000 more were employed in the electrical apparatus and wireless industries. These are illustrations of the movement that has taken place in manufacturing, and bears testimony to the value of the Labor Government’s protectionist policy. This upward trend must be stimulated by greater efforts. To quote reductions in the percentage figures of unemployment will not lighten the burdens of the 300,000 still unemployed. The self-satisfaction and complacency of the Government is disastrous to men and women suffering acutely.

Although faced with greater financial difficulties, the Labor Government expended more money in 1930-31 on works than was spent during the last two years by the present Government. And what we did was only a fraction of what could have been done had not our financial proposals been rejected by the Senate.

The anti-Labor Parties seek to make political capital out of the fall in the number of unemployed, but there is very little substance in their claim, in face of the fact that the percentage improvement in unemployment figures has been greatest in West Australia since the Labor Government there was returned. In Labor-governed Queensland the percentage of unemployment is the lowest in Australia.

Before the U.A.P. Federal Government can justly claim credit they should show what part they actually played in bringing about any improvement. The Government rests its claim almost entirely upon one set phrase:

We have restored confidence.

Realising that the public were looking for some specific proof, Mr. Lyons, speaking in Sydney on 2nd July last, essayed to supply it. On that occasion he said:

Four per cent. 1961 Australian stocks, in September, 1931, were down in value to £70/18/2. On 22nd December of that year, a few days after the present Government had been elected, they had risen to £90/18/6.

Wrong deductions

By that statement the Prime Minister sought to create the impression that Australian stocks had jumped from £70/18/2 to £90/18/6 immediately his Government was elected. The honest fact was that these same stocks had risen to £90/14/5 before the elections were held. So that, instead of rising £20 in a few days after the elections, they rose by the trifling amount of 4/-. So much for this vaunted restoration of confidence, forming the whole political stock and trade of the Lyons Government.

Confidence in the security of Australian stocks was restored during the last three months of Labor’s regime. Following upon the success of the huge conversion loan, the market price of our stocks rose consistently. Lack of opportunities to invest in industry has caused further rises in the price of Government stock. We should hear no more of the vainglorious boast that confidence had been restored by the change of Government.

Faith in Government securities has been restored, but much more remains to be done. There is still lack of confidence in thousands of homes where unemployment and poverty prevail. There is grave anxiety in other homes where parents are seeking in vain for opportunities to place their children in work and commence them on useful and honorable careers.

At the Premier’s Conference, called by the Labor Government in September 1931, special consideration was given to unemployment.

The Commonwealth and State Governments submitted lists of works of permanent value, including building of workmen’s homes, afforestation, road construction, opening up new land for occupation and serving also to feed the railways, clearing Crown lands, water supply and sewerage for several country towns and outer suburbs, water conservation for stock and irrigation purposes, dams and bores on stock routes, wheat bulk handling, and harbour improvements. The Commonwealth Railways submitted a proposal for the construction of a railway from Port Augusta to Red Hill on the standard gauge, and to continue that gauge to Adelaide. That would give a uniform gauge from Kalgoolie to Adelaide, and would bring us another stage nearer a uniform railway gauge for Australia.

Banks provoke poverty

The Premiers’ Conference appointed a committee to report on these and other proposals. That committee consisted of Mr. J. Gunn, Mr. H. W. Gepp, representing the Development Department; Professor Brigden, Professor Giblin, and Professor Hytten, as economists; and Messrs. Mulvaney and Murphy, of the Commerce Department. The Committee, in their report, advised:

That in this emergency the banking resources of the country must be used to the limit.

The banks, however, took a different view, and the comprehensive plan of public works was not proceeded with, because money was not obtainable. Meanwhile, thousands of workers and their families are living on sustenance. State Governments have spent £27,000,000 over the past three years on sustenance and work for sustenance of little permanent value while the workless remain to eke out a miserable existence. Not this, but a bold forward policy is needed to transfer a large number of men from sustenance to permanent employment, thereby making a substantial start on the upward grade.

An Australian outlook is also needed. The purchase of a cruiser overseas at a cost of £2,280.000 is monstrous, while thousands of Australians are unemployed.

Northern Australia

The north of Australia offers scope for national development in pastoral, agricultural, and mining pursuits. Settlement of the north is essential to the preservation of our White Australia policy.

Labor is strongly opposed to the exploitation of Northern and Central Australia by Chartered Companies. We shall seek the aid of the people of that Territory, by granting to them a system of self-government through an Advisory Council, as was proposed by the Labor Government, but rejected by the Senate.

In classifying lands of the Territory, Labor will remove many anomalies at present existing. All leases will be surveyed to determine boundaries and facilitate improvements.

Encouragement will be given to the introduction of stud stock, and the development of the great agricultural possibilities of this Territory.

To help in placing the unemployed in work assistance will be given to prospectors, Government batteries and water supplies will also be provided where practicable.

The preservation of our forests is a national obligation. If large numbers of men were employed to protect our timbers and safeguard our forests against fires and despoilers, the cost of their employment would be saved many times over. The destruction of our forests is a crime against future generations.

The production of oil and petrol in Australia from shale, coal or petroleum wells would open up important avenues for employment, and would ease the heavy drain on the nation’s finances for imports.

Our dependence on overseas sources for our supplies is a grave national weakness.

Oil production

In 1930 the Labor Government provided £100,000 to employ men producing oil from shale. Assistance was also given to those searching for petroleum oil.

This encouragement will be continued, and, in addition, the possibilities of producing substantial supplies of oil from coal will be fully explored.

Any development in oil production will be amply safeguarded against attacks from powerful overseas interests.

By declaring that private enterprise must be relied upon to absorb the unemployed, the Government merely seeks to throw off its own responsibility. When private employers cannot employ the workless the Government must. Work for sustenance cannot continue indefinitely. Its peril lies in too great a strain upon human endurance, which must eventually lead to desperation or degeneration.

It is protested that the country cannot afford to spend large sums of money on extensive public works, but what would these works cost? If the materials were locally produced, the bulk of the cost involved would he labor, and labor costs, in the main, simply represent food, clothing, boots, housing, etc., provided in the form of wages. Can it be truthfully said that, within the nation, the workers’ needs cannot be produced? That life’s essentials, in sufficient quantities for its present population, are not within the resources of Australia? A thousand times No! It is obvious that Australia’s problem is not one of ample production. That has been mastered, or, rather, over-mastered. I do not suggest there is no limit to the provision of finance for employment, but the limit is the capacity of the nation to produce. We are certainly a long way from having reached that limit.

Observe all around us idle machines, factories, and workshops wonderfully equipped to produce very much more than the people are able to buy because, though needing so much more, they have not the purchasing power. Loss of purchasing power is mainly due to unemployment. Yet there is plenty of work to be done. The folly of that state of affairs is appalling.

An obsolete system

In this enlightened, progressive age we remain slaves to an obsolete banking system. The nation’s economic energies are bound with financial ligatures stagnating the lifeblood of industry.

When the Labor Government submitted a measure enabling the Commonwealth Bank to provide £1,000,000 a month to employ 50,000 men on full time employment on Public Works it was denounced and defeated. That, however, was not an extravagant proposal. It was quite practicable and well within the financial means of the nation. Besides giving a stimulus to every industry in Australia, the new purchasing power of 50,000 men on full wages would have created an activity in shops, and factories and the market for primary products would have expanded.

In carrying out this plan the Government and the Bank would be guided by experience. The price level would be carefully watched.

Currency and employment

Monetary and Banking reform and the provision of employment for the workless are closely interlocked. Definitely related to both is the question of marketing Australian products.

By monetary reform and the employment of workless men, financial difficulties and the burden of interest will be lessened, and purchasing power will be increased, thus ensuring a better home market for primary and secondary industries.

The Labor Party undertakes to pass the necessary legislation and to facilitate schemes for orderly marketing of primary products whenever the producers themselves are prepared to organise.

The profit margin between the price received by producers and that paid by consumers can be scaled down. The costs of distribution are too heavy. Much of the profits of middlemen are lying idle in bank accounts. In the hands of working farmers, these would be circulating through business channels and increasing employment.

What has already been done with the organisation and marketing of dried fruits can be done with other products. The Labor Party does not rely upon market manipulators, financiers, and brokers for political support, and is, therefore, free to render maximum support to sound marketing schemes.

The Commonwealth Bank, reorganised, can render greater assistance in financing pools and making advances pending the final realisation of farmers’ products.

National planning

National planning is required to lift the community out of unnecessary poverty.

Restriction of output is not a remedy; it is a calamity.

Mr. Lyons, speaking in Tasmania, is reported in the Hobart Mercury of 22nd June last, as saying:

It is futile for us to place our hopes in greater inter-Empire trade.

Giving as a reason for that statement, Mr. Lyons added:

The United Kingdom has contracted obligations in her treaties with foreign countries, which prevent her imposing severe restrictions upon foreign meat and dairy products, unlees she also imposes restrictions upon Dominion products of the same kind.

So much for the Ottawa Agreement.

Awful Ottawa Agreement

Not only must we provide better marketing organisations at home and abroad for present production. We must expand productivity locally in those goods at present being imported. With that object in view the Government I led gave generous encouragement to tobacco-growers in Australia. The result was a marvellous expansion in the cultivation of tobacco. A change of policy, however, came with a change of Government, and a severe set-back was given to that industry.

A Labor Government will not only restore the necessary margin of protection, but will restrict imports for a number of years, gradually diminishing the importation of foreign leaf and increasing the consumption of Australian tobacco.

Australian exports to America are valued at only £3,500,000 a year, whilst importations from that country amount to £8,000,000 annually. Included in the imports from America is tobacco leaf. Last year 15,000,000 lbs. weight of tobacco leaf were imported, whilst the total consumption was 19,000,000 lbs. weight. If the present rate of importation is permitted to continue, there is no outlook for the tobacco industry in Australia. A change of Government will change that policy, and, we hope, change it permanently.

For the Past four years the wheat-growing industry has been in a parlous plight. It is an industry of great national importance, providing employment and food for our people, as well as producing an exportable commodity to pay for necessary imports. In view of these facts the wheat industry must be placed on a sound basis.

Temporary assistance from year to year leaves it in a precarious position.

A wheat pool

The Labor Party proposes that, after reference to the growers by ballot and with the co-operation of the States, a stabilisation plan be adopted covering a period of three years.

The outlines of the plan are:-

  • A national wheat pool on lines similar to those proposed in the Bill introduced by the Labor Government in 1930.
  • A guaranteed price of 3/9 per bushel f.o.b. for all wheat sold off the farm.
  • Wheat for home consumption to be sold from the pool at 4/- per bushel.
  • The pool to be financed through the Commonwealth Bank.
  • Fifty per cent of any increase in price over 4/- a bushel f.o.b. to be paid to the bank until the money advanced has been liquidated.
  • The home consumption price to remain at 4/- during the three years period.
  • The price of flour to be fixed on a fair basis in relation to the price of wheat.
  • State and Commonwealth legislation will be required, enabling the wheat-growers and Government representatives to control the pool, and to protect farmers from foreclosures during the period of stabilisation.
  • The whole position to be reviewed at the end of three years.

During the years 1916, 1917, and 1918 there was a national wheat pool. The price of wheat was fixed at 4/9 a bushel, and the price of bread was 4d. per 2 lb. loaf. There is no reason, therefore, why bread could not be sold at its present price with wheat at 4/- a bushel.

Market manipulators

Market manipulators and food speculators will bitterly assail this proposal as they did the Labor Government’s Wheat Pool Bill in 1930, when they succeeded in having it rejected by the Senate.

The result of this election is a matter of grave concern to those who are interested in the maintenance and expansion of Australian industries. Too much damage has already been done by duty reductions on 1,000 tariff items.

Unless Labor is returned with a majority, another Coalition Government is inevitable with the Country Party holding important portfolios.

The flood gates once again will be surely opened to foreign goods.

At the Australian Country Party Conference in Sydney on lOth July last, it was unanimously agreed that, despite any agreement reached by the Parties for co-operation for the elections or afterwards, there must be no departure from the tariff policy adopted by the Country Party.

That policy is definitely opposed to protection.

A vote against Labor is a vote against effective protection for Australian industries.

The Labor Party is more than ever convinced that adequate protection is essential to Australian development.

Hope for the future

The hope for the future lies in sound economic planning to exploit the country’s resources; to establish firmly local industries and local markets, and to build up a robust race of men and women freed from the blighting effects of unemployment and poverty.

Propaganda claiming credit to the Lyons Government for balancing Australia’s overseas trade and balancing the Budget is audacious misrepresentation.

The Bruce-Page Government, after an orgy of profligate spending, reckless overseas borrowing flooding Australia with foreign goods, left the Labor Government with a financial mess to clean up. That herculean task was courageously faced in the midst of the world-wide depression.

Labor corrected the adverse trade balance by drastic tariff action, and, at the same time, balanced the Commonwealth Budget.

The Lyons Government, coming into office in January, 1932, merely presented the Labor Government’s 1931-32 Budget, which showed a favorable trade balance of £35,000,000 and a Budget surplus of £1,314,000.

Wealthy favoured

Having reaped the fruits of Labor’s action, the Lyons Government passed the benefits on to their political friends by reducing taxation on the wealthy and imposing heavier burdens upon the poor.

The policy agreed to by the Government of floating loans at £3/7/8 per cent. to replace Treasury Bills carrying £2/5/- per cent. is imposing an unnecessary burden upon Commonwealth and State Budgets.

The transfer of Treasury Bills to bonds adds £1/2/8 per cent. to the interest bill. On the £13,000,000 of Treasury Bills replaced by bonds, the interest charge to Governments has been increased by £147,000 a year. The interest burden must be reduced, not increased.

In Great Britain there is an open bill market, and the British Government has issued Treasury Bills totalling £988,000,000. These Bills are regularly renewed, and become practically a permanent loan. The interest paid is less than one per cent.

By arrangement between the Treasury and the Commonwealth Bank, a Bill market could be established in Australia. By that means the Commonwealth and State Governments could obtain use of moneys at lower rates of interest than that being paid today for Treasury Bills or bonds.

Reductions in pensions, social services and public service wages and salaries were temporary exigencies to meet a financial emergency, and will be fully restored by a Labor Government. The objectionable clauses in the Pensions Act relating to pensioners’ property and charges on relatives will be repealed. A review of the Arbitration system and the methods of applying the cost of living figures to the basic wage will be undertaken.

Improvement in living standards

There must be progressive reductions in working hours and increases in living standards commensurate with increased powers of production, due to specialisation and mechanisation of industry.

National insurance against unemployment, accidents and sickness are important aspects of social economic planning requiring earnest attention.

Consideration will be given to the financial relations between Commonwealth and States, with due recognition of their differing economic conditions. Suitable action will be taken, paying particular attention to the unequal effects of Commonwealth Legislation and finance.

To give fullest effect to some of the proposals I have submitted, amendments of the Commonwealth Constitution will be necessary. Such amendments are long overdue. Fortunately, the Constitution gives to the Commonwealth adequate powers on banking. But on industrial and commercial matters Commonwealth powers are severely limited.

Having failed to reach agreement at a Premiers’ Conference on the question of amendments to the Commonwealth Constitution, the Government should have seized the opportunity to consult the people on Constitutional amendments simultaneaously with the holding of these elections.

Had not the life of the Labor Government been suddenly ended in 1931, we would have submitted to the people by referendum three questions. One of these would, if carried, have made the Commonwealth Parliament the only sovereign Parliament in Australia. State or Provincial Councils could then have been set up to deal with purely local matters, with powers delegated to them by the Commonwealth. The alternative for submission was to enlarge the industrial and trade and commerce powers of the Commonwealth. The Bills for the Referendum had passed the House of Representatives once, but were rejected by the Senate. They were ready for the second introduction to Parliament, and could have gone direct to the people if again rejected by the Senate. The sudden defeat of the Government by Pariiament, however, destroyed that opportunity of obtaining the authority of the people. If elected, the Labor Government will refer to the electors measures for altering the Constitution to unify and simplify Government throughout Australia.

In this policy speech my purpose is to focus public opinion and to concentrate efforts on the outstanding questions.

Labor constructive

The Labor Party’s policy is constructive. We are not out to destroy, but to build up. A Labor Government created the Commonwealth Bank, and a future Labor Government will extend that Bank’s power and influence for the purpose of strengthening the financial and economic position of Australia.

I urge you to study carefully the Labor Party’s proposals. I ask you, in fairness to yourselves, to judge these proposals as enunciated by Labor’s accredited leader. I exhort you to disregard the caricatures of that policy emanating from our political opponents.

Summed up, the main proposals in Labor’s policy are:-

  • Monetary and Banking Reform.
  • Expansion of the Commonwealth Bank.
  • Interest Reductions.
  • Stimulus to Employment.
  • Financial co-operation with States and Municipalities for useful works, including uniform railway gauge.
  • The Commonwealth to begin with the construction of the Port Augusta-Red Hill railway.
  • Northern Territory Development.
  • Constitutional Amendments.
  • Effective protection to primary and secondary industries, workers, and consumers.
  • Review of the Ottawa Agreement.
  • Organised Marketing.
  • National Insurance.
  • Arbitration Amendments.
  • Restoration of reductions in Wages, Pensions, and Social Services.

Wild, unfounded charges concerning Labor’s attitude towards banking and finance, calculated to create public panic, are freely indulged in by certain persons and newspapers, unmindful of the serious consequences.

It is astounding how reckless these are in their desperate anxiety to conserve vested interests against the interests of the nation.

Dire calamities are predicted if Labor be returned. The bitter attacks upon our banking policy are a repetition of the misrepresentation employed against Mr. Andrew Fisher and his colleagues 24 years ago, when they announced their intention to establish the Commonwealth Bank.

A foolish prophecy

During the 1910 elections a conservative paper declared that

the financial sky would rain foreclosures and evictions.

The evictions since then of many poor people in our midst, however, cannot be ascribed to Labor’s policy. But can more correctly be said to be the effect of a ruinous financial policy opposed by Labor.

That the influence of the money power is tremendous is evident when the press, with a few notable exceptions, bow down before it. Newspapers that refuse to yield to the pressure of financial interests should have the weight of the community in numbers solidly behind them.

Much discussion is taking place as to whether democracy has failed. The evils that beset the world are advanced as proof of its failure. The truth is, democracy has not been fully or fairly tried. Political democracy we have. We must also have industrial democracy. The fortunes, particularly the misfortunes of the people, are bound up with banking policy. While money magnates dictate economic conditions, and unduly influence the policy of Governments, there is not complete democracy.

Scoffing jibes at Labor’s proposals offer no remedies.

Platitudes futile

Platitudes on ‘sound finance’ and ‘real money’ will not provide for those experiencing cruel privation.

Misrepresentation to create fear of Labor is not a substantial substitute for food.

The means to live a reasonable life as decent citizens is the right of every worthy man and woman.

A negative policy, or a wait and see attitude, is tragic after five years of depression and deprivation.

Democratic rule

It was persistently suggested at the last elections that, while the Labor Government was in office, bankers and financiers would not release money for enterprise, and that, with the removal of the Labor Government, millions would flow into industry and employment and prosperity would appear. Thousands of poor people, sorely tried by poverty, voted against their lifetime convictions, but they have had a sad awakening. I am confident that, on this occasion, they will assert their rights as men and women, and, by their votes, will transfer their power to a Labor Government with majorities in both Houses of Parliament. That power, in Labor’s hands, will be used with firmness and with justice. Democracy shall rule Australia, not a financial oligarchy.