LABOUR IN AUSTRALIA.

New Zealand Herald, Volume LXVIII, Issue 20794, 10 February 1931, Page 11

LABOUR IN AUSTRALIA.

PARKES BY-ELECTION RESULT

FAR-REACHING EFFECTS; EARLY DISSOLUTION SUGGESTED. [from our own correspondent.] SYDNEY, Feb. 5. It is not exaggerating the position to say that there is almost general jubilation throughout Australia at the result of the Parkes by-election in Sydney, which resulted in such a crushing defeat for the Federal Labour Government. Only the true-blue Labour men are wearing long faces—and fchev have a very good cause for so doing. They can see now how their leader, how they themselves, have misjudged the temper of the people. They can see that the Australian people will stand behind sound finance, will have nothing to do with inflation, or with any other form of tinkerang with the money system, unless due caution is followed. They can see that the people demand action, demand, economy and> above all, demand moderation.

Tho wind that blew from ParkeS on Saturday last is d eve l°pi n S into a hurricane at Canberra and seems destined to change the whole course of Federal politics. It may even blow Mr. Theodore out of office once again and blow Mr. Lyons • back. It has struck an icy blast into the hearts of the inflationists. Their cry for an early election on the inflation issue dwindled to a whisper in a night. Now even the whisper cannot be heard. The inflationists, more perhaps than anybody else, received their answer from Parkes. The Nationalist Party saw to :t that that was the main issue. The electors saw to it that their answer should not remain in doubt. It is scarcely safe to whisper inflation to any Labour, man just now and it seems certain that the new financial policy, now being draWn up under the guidance of Mr. Theodore, advocate of the "judicial release of credits," will be drastically recast. Blow to Mr. Theodore's Prestige. The Parkes result, by the way, has been a severe blow to the prestige of Mr. Theodore. Mr. Theodore was almost as big an issue as inflation. His re-appoint-ment to the Cabinet was made in tho midst of the campaign, and thereafter no ■meeting was held without some reference to him. The Nationalist references were far from complimentary. Before he rejoined the Cabinet Mr. Theodore played an important part in Parkes and it was known that the Labour candidate, selected because he was an extremist v in finance as well as in other matters, had his . blessing. Mr. Theodore practically conducted the Labour campaign and it was there that he chose to try out his new gospel of financial reform. Labour caucus members would not have lipid it against him if he had merely lost the seat; few of them considered that it could be retained; but the huge extent of the vote turnover to the Nationalist Party has shocked and frightened them. They no longer regard Mr. Theodore as a wizard. Now that the resignations of Mr. Fenton and Mir. Lyons must take effect a reconstruction of the Cabinet is certain. In this there are many possibilities. An influential section of the caucus is demanding that all the portfolios should be declared vacant. If Sir. Scullin finds .'it necessary to give way to the pressure that will be exerted a secret ballot will be held for the purpose of selecting the Ministry. In that event Mr. Theodore'* position would be very uncertain. It is very likely, too, that all his friends would suffer and that tho moderates, headed by Mr. Lyons and Mr. Fenton, would fee in command. What the Senate May Do.

But no matter what happens in caucuil, Labour's position must continue insecure, for it still lias to contend with a hostile Senate. The gloom that has settled on the Labour Party is not relieved by a realisation of the fact that the Senate may now seize an opportunity to precipitate an early quarrel with the Government and 50 force a dissolution of both Houses. This would bring about a. general election, and in the light of Parkes Labour fears that thsre would be but one result.

The' Parkes by-election has set fear :in the heants of even the State Government, and it is thought that it will stimulate Mr. Lang to renewed efforts to redeem some of the many promises he made during the last general election. Had the Nationalist majority in Parkes been small it would not have worried Mr. Lang and v his friends, whose relations with the Scullin Government have not been of the happiest. Close observers predict a general Federal election within six months. It is feared, therefore, that Australia is in for another six months of financial drift.