House of Representatives
13 October 1938

15th Parliament · 1st Session

  1. House of Representatives
  2. 15th Parliament
  3. 1938

Mr. Speaker (Hon.G. J. Bell) took the chair at 2.30 p.m., and read prayers.

page 759

QUESTION

WINE INDUSTRY

Mr HAWKER:
WAKEFIELD, SOUTH AUSTRALIA

– Has the Minister for Trade and Customs received any representations from either the Viticultural Council or the grape-growers concerning the critical outlook in the grape-growing and wine-making industries? If so, do they include suggestions for the rectification of the position?

Mr WHITE:
Minister for Trade and Customs · BALACLAVA, VICTORIA · UAP

– I attended a meeting of the Viticultural Council in Sydney last week, and have since received from the council its representations and suggestions as to what steps should be taken to rectify the difficulties in the wine industry. One of the suggestions is the imposition of an excise duty on wine. That presents many obstacles, as some branches of the industry - for example, that relating to dry wine - do not use fortified spirit, and might be forced out of existence if the proposal were adopted. There is also the question as to whether or not such a principle as excise and rebate is constitutional. I have promised the council that I shall make a careful examination of all of its resolutions, and that the Government will give consideration to the difficulty which has arisen largely as the result of the over-planting of wine grapesby the growers against the advice of the Government.

page 759

QUESTION

CANBERRA HOUSING

Mr BARNARD:
BASS, TASMANIA

– In view of the fact that money has now been voted to give effect to the housing policy of the Government in the Australian Capital Territory, does the Minister for the Interior propose to enlighten honorable members as to the nature of that policy, or is the Parliament to rely on the reports that have appeared in the press from time to time in regard to the matter?

Mr McEWEN:
Minister for the Interior · INDI, VICTORIA · CP

– I propose to make to the House an explanation of the proposals of the Government, when it is asked to vote the necessary funds, at the conclusion of the budget debate.

page 759

INTERNATIONAL LABOUR OFFICE

Maritime Conventions

Mr HUGHES:
Minister for External Affairs · NORTH SYDNEY, NEW SOUTH WALES · UAP

– On the 6th October the honorable member for West Sydney (Mr. Beasley) asked for information regarding certain maritime conventions adopted at the 21st and 22nd sessions of the International Labour Office, 1936. On the 29th June last I made a full statement of the then existing position. I also informed the honorable member on Thursday last that no further advice had been received from the State governments regarding the adoption of the conventions which affected ships under their jurisdiction.

So far as the Commonwealth Government is concerned, steps have been taken to ratify the convention concerning hours of work on board ship, and manning. The necessary documents were forwarded to Geneva on the 18th August, 1938.

As I informed the House on the 29th June, the Commonwealth Navigation Act already fully complies with the terms of the convention concerning the minimum requirement of professional capacity for masters and officers on board merchant ships. The convention, however, extends to intra-state ships, and its provisions are not in all States sufficiently covered by existing legislation to permit of ratification.

So far as the convention on sickness insurance is concerned, seamen have been included in the new Commonwealth national health insurance scheme, and as soon as this scheme becomes fully operative further consideration’ will be given to the matter of ratifying the convention.

As regards the convention concerning the liability of shipowners in respect of sickness, injury or death, both the Commonwealth Navigation Act and the Commonwealth Seamen’s Compensation Act, 1911, contain provisions concerning matters dealt with in the convention. A bill amending the provisions of the Seamen’s Compensation Act has been drafted and has now appeared on the notice-paper of the Senate. Under this bill, the benefits to which seamen are entitled under existing Commonwealth legislation are expended.

As regards the convention concerning annual holidays with pay for seamen, section 25a of the Commonwealth Conciliation and Arbitration Act empowers the Commonwealth Conciliation and Arbitration Court to deal with the matter of holidays, and most of the provisions of the convention have been already covered by awards.

page 760

QUESTION

INFLUX OF ALIENS

Mr JENNINGS:
WATSON, NEW SOUTH WALES

– Will the Minister for the Interior, because of the influx of alien migrants, give consideration to the application of a quota system, similar to that in operation in the United States of America ‘i Further, has the. honorable gentleman any information to give to the House as the result of his inquiries into the report that an Italian liner, the Urania, has been chartered to bring 900 refugee migrants .to Australia?

Mr McEWEN:
CP

– I have made inquiries into the matter raised in the latter part of the question, but have been unable to obtain confirmation of the newspaper report. Tho former part of’ the question involves a matter of policy, which I shall bring before the Government.

page 760

QUESTION

APPLE AND PEAR INDUSTRY

Mr FAIRBAIRN:
FLINDERS, VICTORIA

– In view of the fact recently brought to notice, that many apple and pear growers in Victoria consider that the Victorian Fruit Cool Stores Association is more truly representative of their interests than is the Victorian Fruit Marketing Association, and that, at a recent election, the personnel of the executive of the Victorian Fruit Marketing Association was very considerably changed, greater representation being given to the Victorian Fruit Cool Stores Association, will the Assistant Minister for Commerce, before the introduction of the proposed apple and pear board legislation, invite the new executive of the Victorian Fruit Marketing Association and also the executive of the Victorian Fruit Cool Stores Association, to confer with him?

Mr ARCHIE CAMERON:
Minister without portfolio assisting the Minister for Commerce · BARKER, SOUTH AUSTRALIA · CP

– I do not know that any good would be served at this stage by a conference between me and those two bodies. I can only say that the bill to be introduced will contain a provision enabling both of them to be recognized by the Commonwealth Government.

Later:

Mr FAIRBAIRN:

– In view of the fact that most of the opposition to the proposed Apple and Pear Board, in Victoria at any rate, is not to the principle involved or to the provisions of the proposed bill, but rather to the fact that nobody really representative of the interests concerned has been consulted on the subject, I ask the Assistant Minister for Commerce whether he does not think it would be a polite action to consult the executives of the two bodies to which I referred a few moments ago, and which he is now prepared to acknowledge are really representative of the industry?

Mr ARCHIE CAMERON:
CP

– I have no objection whatsoever to meeting these executives if they will come to Canberra; but, at the moment, my engagements prevent me from going to Victoria to meet them. If they are prepared to come here I shall be quite prepared to meet them.

page 760

QUESTION

SUNDAY TRADING IN CANBERRA

Mr ANTHONY:
RICHMOND, NEW SOUTH WALES

– -Will the Minister for the Interior inform me whether it is correct, as reported in the press lately, that an old ordinance has been revived in Canberra which, if enforced, would make it impossible for tourists or residents to obtain light refreshments between 10 a.m. and 12.30 p.m., and 6.30 p.m. and 8.30 p.m. on Sundays? If so, will the honorable gentleman consider the revocation of this ordinance in order that the growing tourist trade of Canberra may be reasonably catered for, and that the people of this city ma.y enjoy conditions comparable to those in the adjacent State?

Mr McEWEN:
CP

– There is in existence an ordinance of twelve years’ standing which sets out that while certain shops may not open in Canberra on Sundays, certain other establishments, such as restaurants, fruit shops, confectioners’ shops and the like, may not open between the hours of 10 a.m. and 12.30 p.m., and 6.30 p.m. and 8.30 p.m. on Sundays. Recently two inspectors were appointed by the Department of the . Interior to police certain ordinances dealing with industrial conditions. I understand that one of these officers recently directed the attention of the storekeepers of Canberra to the ordinance to which I have referred, and indicated that it would be necessary in the future for them to comply with it. Since my attention has been drawn to the subject I have caused inquiries to be made in the adjacent States for the purpose of comparing the law there with the provisions of the ordinance. I find that in New South Wales, in particular, the legal position is almost identical with that set out in the Canberra ordinance.- I also find that those conditions are not closely policed or enforced. The honorable member may rest assured that no conditions will be established in Canberra regarding Sunday trading which will he substantially different from those operating in the adjoining State, or that will be prejudicial to tourists visiting the Australian Capital Territory.

page 761

QUESTION

EXPORT QUOTA OF LAMB AND MUTTON

Mr CLARK:
DARLING, NEW SOUTH WALES

– Will the Assistant Minister for Commerce inform me whether any reduction has been made lately of the quota of Australian lamb and mutton that may be exported to Great Britain, or whether any falling off of such exports has occurred recently?

Mr ARCHIE CAMERON:
CP

– There” has been no reduction of the quota.

page 761

QUESTION

TRADE REPRESENTATION ABROAD

Mr HAWKER:

– Will the Assistant Minister for Commerce inform me whether the report in this morning’s Argus to the effect that the Government is taking steps to open a Trade Commissioner’s office at Singapore is correct? If not, can the honorable gentleman make any statement on the subject? I should also- like to know the position in regard to Australian trade representation in Java and the Straits Settlement, and whether any steps are being taken to fill the vacancy in the Trade Commissioner’s office in Canada and any other such vacancies that exist?

Mr ARCHIE CAMERON:
CP

– Several matters of the nature referred to by the honorable member are at present under the consideration of the Government, but no decision has yet been made in regard to an appointment at Singapore or the filling of the vacancy in Canada. No decision has been made, either, in regard to India. As soon as decisions are reached on these matters a pronouncement will be made in the House.

page 761

QUESTION

REPATRIATION BENEFITS FOR SOUTH AFRICAN SOLDIERS

Mr JENNINGS:

– In view of the requests made by various South African Soldiers’ Associations in Australia for service pensions and repatriation benefits for their members, I ask the Minister representing the Minister for Repatriation to cause inquiries to be made from the State governments relative to the funds raised in each State during the South African war for the benefit of South African incapacitated soldiers. I should also like to obtain information with regard to the balance of these amounts which have since been transferred to other accounts.

Mr THOMPSON:
Minister without portfolio, assisting the Treasurer · NEW ENGLAND, NEW SOUTH WALES · CP

– I shall bring the honora’ble member’s question under the notice of the Minister for Repatriation, and I . feel sure he will cause the requested inquiries to be made.

page 761

QUESTION

QUOTAS OF IMPORTED MOTOR CARS

Mr HOLLOWAY:
MELBOURNE, VICTORIA

– Has the Minister for Trade and Customs yet had time to look into the requests that have been made by motor car importers for a transfer of portion of their quotas from the United States of America to Canada ?

Mr WHITE:
UAP

– Yes. Different importers in Adelaide have made representations to the Government in this respect, and I have to-day received a deputation on the subject from certain interests in Queensland. I regret that no change can be made in the quota systems. Chassis from both Canada and the United States of America are covered, and a transference from one to the otheris not possible.

page 762

QUESTION

ASSISTANCE FOR AERODROMES

Mr CLARK:

– Will the Minister for Defence inform me whether anything has been done to assist the interests concerned in the establishment of an aerodrome on the Blue Mountains? I should also like to know whether the Government proposes to grant assistance in the establishment of aerodromes on the new air routes that are about to be served?

Mr THORBY:
Minister for Defence · CALARE, NEW SOUTH WALES · CP

– The Government has granted assistance in connexion with the establishment of some aerodromes that are regarded as of strategic value to the Defence Department or that are situated on the main arterial routes of the services now being subsidized to carry oversea mail or mail on certain internal routes. I take it that the honorable member has in mind particularly an aerodrome somewhere near Katoomba. Nothing definite has been done to assist that project.

page 762

QUESTION

INTERNATIONAL LABOUR OFFICE

Annual Leave Convention

Mr HOLLOWAY:

– With reference to the convention carried by the International Labour Office asking affiliated bodies to give annual leave with pay to their employees, will the Minister for External Affairs bring under the notice of the Cabinet the necessity for the Commonwealth Government carrying out that convention as far as its own employees are concerned?

Mr HUGHES:
UAP

– Yes, I shall do so.

page 762

APPLE AND PEAR ORGANIZATION BILL 1938

Motion (by Mr. Archie Cameron) agreed to -

Thathe have lea ve to bring in a bill for an act relating to the marketing of, apples and pears.

page 762

THERAPEUTIC SUBSTANCES BILL 1938

Second Reading

Debate resumed from the 20th June, 1938 (vide page 2325), on motion by Mr.archiecameron -

That the bill be now read a second time.

Mr FORDE:
Capricornia

.- As this bill sets out to amend an act which was assented to about a year ago, it provides further evidence that Ministers towards the close of a session, bring down measures without proper consideration of their provisions. I hope that in future proper consideration will be given to all measures before they are introduced into this House. I do not propose to oppose this measure; it is one of the very few measures that have been introduced by the Government which the Opposition feels it can wholeheartedly support. We have been assured by the Assistant Minis-, ter for Health (Mr. Archie Cameron) that this bill is not intended to alter, in any way, the spirit of the principal act, but is designed to remove any uncertaintyas to the scientific meaning of certain terms used in the principal act, and as to what substances are actually included within the term “therapeutic substances”. I understand that the passage of this measure is also required to enable precautions to be taken to obviate the possibility of the introduction of foot and mouth disease into this country. Realizing what a serious scourge that would be in the dairying districts and in the cattle industry generally, the Opposition is pleased to lend its support to the measure.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 4 agreed to.

Amendment (by Mr. Archie Cameron) proposed -

That the following new clause be inserted: - la. - This act shall commence on the date of the commencement of the principal act.

Mr Gregory:

– Is there not something rather extraordinary in a clause which provides that it shall commence to operate on the date of the commencement of the principal act?

Mr ARCHIE CAMERON:
Assistant Minister · Barker · CP

, - The reason for that is that after the principal act was passed a flaw was discovered in its provisions, with the result that it was not brought into operation. The clause which I now seek to have incorporated in the principal act will come into force at the same time as the principal act.

Proposed new clause agreed to.

Amendment (by Mr. Archie Cameron) agreed to -

That the following new clause be inserted: - “ 5. Section eleven of the Principal Act is repealed and the following section inserted in its stead: -

– (1.) Any officer thereto authorized in writing by the Minister may -

take samples ofall therapeutic substances which are imported or are sought to bo exported and any samples so taken shall be dealt with as prescribed; and

require any therapeutic substances specified by him which are imported or are sought to be exported to be delivered for examination or analysis, or both, to a laboratory appointed by the Minister for the purpose, and any therapeutic substances so delivered may be examined or analysed, or both, accordingly. (2.) No therapeutic substances shall be entered for home consumption or exported unless and until a person or an officer thereto authorized by the Minister certifies that all the provisions of this Act with respect to their importation or exportation, as the case may be have been complied with.’.”.

Title agreed to.

Bill reported with amendments; report - by leave - adopted.

Bill -by leave - read a third time.

page 763

STATES GRANTS BILL1938

Second Reading

Debate resumed from the 29th September, 1938 (vide page 342), on motion by” Mr. Casey -

That the bill bo now read a second time.

Mr CURTIN:
Fremantle

.– The Commonwealth Grants Commission has now furnished five reports to His Excellency the Governor-General, and the Treasurer (Mr. Casey) on each occa sion has carried out its recommendations with respect to the specific amount of grants which should be made to the States of South Australia,Western Australia and Tasmania. I notice that, on the business-paper, is another legislative proposal which has for its purpose the termination, amongst other things, of the work of the Commonwealth Grants Commission, and the giving of that work to another body with a more elaborate title. I express the opinion that if the change results in any greater detail in respect of the reports than the Commonwealth Grants Commission has given to us, then the Inter-State Commission will achieve what I should regard as a miraculous result. The five reports of the Commonwealth Grants Commission - and I think we are entitled to have a look ateach of them if we feel so disposed - form a vast documentation. Whilst we find much valuable data in them, I venture the opinion that even now the dicta are not so definite. There is an annual accountancy examination into the finances of these three States in particu-. lar, and into those of all the States in. general. The commission has failed to achieve what was implicit in the speech of the Prime Minister (Mr. Lyons) when he announced the setting up of this commission, namely, that means should be found whereby the Commonwealth would have guidance regarding what was a reasonable compensation for certain States for the disabilities to which federal policy exposed them. Though we have now had five reports, and have voted very substantial grants to these States, the problem remains unchanged in its nature. The discontent of the States appears not to have lessened, and this I believe is largely due to the contention of the commission that the disabilities cannot be said to be attributable to federation, and, in any case, cannot be measured as disabilities. The com- mission has confined itself all the time to a review of the budgetary positions of the States. It has put forward the submission that the grants should be measured according to the needs of the’ States. Because of that it has had to engage in a stupendous dissection of the budgets of the three claimant States, and it has attempted to make a comparison between them and the budgets of the other States. To do this it lias had to discover the surpluses and deficits in all cases in order to arrive at what it calls a standard deficit. It has found that certain States provide better social services than others ; it has had to measure Hie rate of taxation per head of population, and all kinds of distinctions have had to be drawn in the consideration of the various budgets. This diversity of practice in the various States has caused the commission to engage in a tremendous arithmetical process of digestion, and after this process has gone on for some time it arrives at what it calls a standard deficit. It lias then to determine the relative positions of the States, and after further mathematical labour, it decides that, without the grant, the deficit of a State would be so much, while, with the grant made in the previous year, the otherwise large deficit has been reduced to what it describes as an approach to the standard deficit.

While there is invaluable information in the five reports of the commission, and while they contain an elaborate and more than useful history of the working of the Australian federal system in its effect upon, the States, it nevertheless appears to me that the commission has failed to put forward what this Parliament expected, namely, a proposal which would avert t he need for an annual review of the problem. As a matter of fact, the commission says that an annual review is the only proper form of review, having regard to the changes that take place. However, because of the need to have exact arithmetical data to go upon, the commission is forced to resort to methods which result in a two years’ lag in the application of its recommendations to the facts on which they were founded. That means that, in the present financial year, 193S-39, the grants to be made to the claimant States will be founded, not on what the States will need this year, but upon what the position was two years ago. The commission says that, in the long run, this method tends to work out evenly enough, but, as a matter of fact it does not, because in bad years the State Treasurers received reduced grants because two years before they had a good year, and in a comparatively good year, they get an increased grant because two years before the position was one of greater difficulty. I am quite convinced that the two-year lag constitutes a greater evil than the unevenness that would be created by fixing the amount of the grant for three or five years. It has always been the practice, when special provision has had to be made to meet special circumstances in the relations between the Commonwealth and the States, to make it apply for a certain defined period. The Federal Convention itself, without anything like the minute data to go upon that the Commonwealth Grants Commission has had, fixed” a period of five years, during which Western Australia should retain the right- to collect customs. The Constitution also prescribed a fixed period after which Parliament was to exercise discretion in regard to the return to the States of any surplus derived from indirect taxation.

It must always be recognized that in a federation certain areas - which in Australia are called States. - will experience greater difficulty than others in carrying on the normal functions which the Constitution implicitly leaves to them. Unitary systems do not suffer the disability, because they are able, by virtue of their legislative power, to deal with the situation. For instance, the Government of New South Wales draws upon the resources of the whole State, and can spend more money in the sparselypeopled areas than it collects from them. Although in the Commonwealth we are obliged to treat all States on the basis of uniformity, in practice it is inevitable that the greatest weight of Commonwealth expenditure will be felt where the population is largest, in States such as Victoria and New South Wales. Defence organization and factories in re- spent of defence organization, post office activities, a.nd even this capital city itself are directed more to stimulation of economic activity in Victoria and New South Wales than in the other States. I need not refer to the obvious truth that the fiscal policy of Australia hai tended to develop secondary industries in the cities of economic a scene! cancy ; that is to say, the cities where population had developed to the greatest degree at the time of federation. Since federation the density of population in Melbourne and Sydney compared with the other capitals has become more marked and, in fact, in the last decade the growth of population has been largely in Melbourne and Sydney. The countryside in Victoria and New South Wales does not show any substantial increase of population. The State of Queensland also shows an increase of population due mainly to the fiscal policy. I am positive that if it were not for the support given by this Parliament to the sugar industry, Queensland would be among the claimant States.

It is important to maintain this Commonwealth. For high national reasons as well as for other reasons, I am against any proposals to dismember this Commonwealth. In fact, I feel that the inevitable trend that lies ahead of us is an expansion of Commonwealth authority, because world problems are so portentous that we cannot afford to lessen the cohesion of national life. But we are not going in any way towards true economic union. Therefore, it appears inescapable that the Commonwealth will, for years to come, have to treat the States on n, differential’ basis.

I do not propose to do more than direct attention to remarks that I have made on similar bills in previous sessions. It is questionable whether this latestreport of the Commonwealth Grants Commission has added anything to the knowledge that it has previously given to this Parliament. It is true that it has introduced the principle of imposing penalties on each of the States because of alleged failure on the part of the State to do something which the commission considers that it should in prudence do. The commission picks up nibbling things in order to impose what it described as a nominal penalty and in order to increase the vigilance of the State Treasurers.

In the five years since the Commonwealth Grants Commission has been in existence, South Australia has been recommended £6,470,000, which is an average of £1^294,000 a year. The highest amount received was £1,500,000 in 1935-36 and the lowest is the amount it is to receive this year, namely £1,040,000. Acting on such information as it had available, the Commonwealth Treasury in the year before the commission was appointed arbitrarily fixed a grant to South Australia of £1,150,000. It is true that the Commonwealth Grants Commission has recommended on one occasion that that amount be increased; as I said, £1,500,000 was paid to South Australia by way of grant in 1935-36; but the amount is now down to £1,040,000. I ‘put it to the Treasurer that, having regard to the two-year lag, which is an inescapable feature of the commission’s methods, and to the difficulties that lag must inevitably bring to the Treasurer of South Australia, we could make a pot-shot at it now and say to the Treasurer of South Australia, “For, the next five years we shall give you a grant based upon an average grant that you have had during the last five years.” I venture to say that while that average would be slightly less than the highest grant that South Australia has had in the last five years and slightly above the lowest grant, the stability of the amount would be on balance an advantage. If it should be pointed out to me that in the next two or three years that grant may prove too much or too little, I would answer by saying that that is an objection, which equally applies to the present method.

Western Australia has had altogether £3,045,000, which is an average of £609,000. The most the State has received was £800,000 in 1935-36,’ and the Least,’ £500,000 in 1936-37. That sharp drop of £300,000 in one year must have had a complicating effect on the budgetary position of the State and created inevitable difficulties for the State Treasurer. The average amount paid to Western Australia since the commission has been in existence is £609,000, whereas in the year before the commission was appointed the Treasury itself fixed £600,000 as a reasonable grant to the State. If, in the last five years the Commonwealth had continued to pay to South Australia £1,150,000 a year, the amount arbitrarily fixed by the Treasury before the commission was established, the Commonwealth Treasurer would have achieved the same result as ha3 been achieved from the five years’ work of the Grants Commission. That is also true of Western Australia which has had £609,000 a year since the establishment of the commission compared with £600,000 paid prior to its establishment.

Mr Casey:

– The honorable member is only taking one previous year, but if he took five years he would not have the same result.

Mr CURTIN:

– I know that.

Mr Casey:

– Tasmania would not respond to the honorable member’s suggestion.

Mr CURTIN:

– The position in Tasmania is, of course, different. The commission has recommended a total of £2,435,000 at an average of £437,000 a year to Tasmania. The highest amount received by that State was £600,000 in 1936-37 and the lowest £437,000 in 1934-35. Its average was £100,000 more than the amount fixed for it in the previous year. I think that we can say quite frankly that, prior to the appointment of the Commonwealth Grants Commission, the Commonwealth Treasury failed to realize how great was the claim of Tasmania. I am not quarelling with what the commission” has done. Its average finding during the last five years can now be regarded as ample confirmation of the decision which the Treasury itself made in the year before it was appointed. My conclusion is that it would now be to the advantage of the Commonwealth and the States if we were to fix these grants for a period of years. I see no earthly reason why they ought not to be fixed for three years, and I should be quite willing to fix them for four or five years, having regard to the fact that, in this matter, stability is in itself an invaluable element in the relationship of the Commonwealth to the States. It is perfectly true that drought conditions or other difficulties may arise within the next two years. The answer is, that in such an event the methods applied by the Commonwealth Grants Commission would not lead to additional relief being given in the year in which it was needed. That is the important point to keep in mind. It would not be until two years after the difficulty had been experienced that the recommendations of the commission would be reflected in the grants payable to the States. This year, the grant to South Australia will be £254,000, that to Western Australia £39,000, and that to Tasmania £77,000, below the average for the last five years. The averages are in excess of the Treasurer’s finding prior to the appointment of the commission, by £144,000 in respect of South Australia, by £9,000 in respect of Western Australia, and by £107,000 in respect of Tasmania. I put it that if the Treasurer contemplates acceptance of my suggestion for the adoption of a period as against an annual review, he ought not to take this year’s determination, but should take the average of the last five years, which I think were typical years; they were years of recovery from economic difficulty, and years in which good prices alternated with falling prices. This year, the situation is quite otherwise. I say to South Australia and Western Australia in particular, because they may be fearful of the effect of this year’s production upon their budgets, that on the Commonwealth Grants Commission’s methods, at least two more fiscal years would elapse before they would obtain additional relief; and we are not certain that the practice of giving effect to the recommendations of the commission may not tie us to an entirely new method, which may be devised if the policy of the Government in regard to the reconstitution of the Inter-State’ Commission is ratified by the Parliament. The legislation designed to that end contemplates the termination of the life of the Commonwealth Grants Commission. It may be, of course, that the Government will appoint to the Inter-State Commission some of the members of the Com-, monwealth Grants Commission; but that would not alter the fact that it was an entirely new body, and that it might set up a new organization. The proposed legislation will impose upon the InterState Commission a much wider investigatory obligation; it will have a number of other problems to keep it busy.

I have only to say, in conclusion, that I have again read Appendix No. 1 to the report of the commission. That is the appendix in which the commission sets out the elaborate method it has devised in order to ascertain the relative taxable capacity of the States. With great respect to the commission, I submit that L am unconvinced that its method of determining the relative taxable capacity of the States is reliable. I am amazed to discover the rigidity of mind with which the commission assumes that, while it makes this concession here, applies this refinement there, and drags wages, motor cars and every other thing into the computation, the taxable capacity of a State which pays the highest wages, works the fewest number of hours, and yields the highest State taxation per capita in Australia, is comparatively low. Any one who looks at the figures -in the table in relation to Queensland will, I think, be mct with what appears to be an affront to common sense. I argued this matter before the commission a few years ago, and failed to convince it. After mature reflection, I still say that even now it has failed to convince me.

Mr GREGORY:
Swan

.- I am sorry that I cannot agree with the Leader of the Opposition (Mr. Curtin) that the report of the Commonwealth Grants Commission should be accepted for a period of three years. I feel that the commission is not carrying out the work intended of it when this Parliament agreed to its constitution. Formerly, if the States were in need of assistance, the Treasury undertook the task of estimating the degree of assistance to be rendered, and I do not think there was any complaint in regard thereto; but there was a demand for a body similar to the Inter-State Commission, which would furnish to this Parliament information in regard to any disabilities that might have arisen by reason of federation. Few honorable members would have voted for the appointment of the Commonwealth Grants Commission had it not been assumed that its duty would be to bring to the Parliament a full knowledge of any disabilities that might have resulted from federation, so that honorable members might have an opportunity to consider the assistance that should be given to counterbalance those disabilities. Can it be imagined that honorable members are so unfair that, if they had placed clearly and straightforwardly before them the fact that, owing to Commonwealth policy, a very severe penalty was imposed on the people of Tasmania, Queensland, or Western Australia, the majority of them would not desire to attempt to ameliorate those conditions? I brought this matter up when the legislation constituting the Commonwealth Grants Commission was before this House. On the 19th May, 1933, during the second-reading speech of the Prime Minister (Mr. Lyons), I interjected -

It will be comprehensive in one sense only, that is, as to the amount of money that shall lie paid, and not as to the disabilities of the State.

The reply of the Prime Minister was as follows : -

The honorable member may rest assured that any State which makes an application for a grant will also submit the grounds of its application, so that the whole subject will be inquired into by the commission. If a State feels that as a result of, say, the operation of the tariff, it is suffering disadvantage, there will bo nothing to prevent it from not only putting that to the commission as a reason why it should be assisted, but also assessing the value of that disadvantage. If that is done, the commission must of necessity inquire into and report upon the amount that ought to bc contributed by the Commonwealth to compensate for the disadvantage.

Mr Prowse:

– That has not been done.

Mr GREGORY:

– Personally, I was not satisfied even with the statement of the Prime Minister. I wanted provision along those lines to be incorporated in the act, and I circulated an amendment which, if agreed to, would have made it absolutely compulsory for the commission to inquire into the disabilities suffered by the States. Unfortunately, the committee stage of the bill was brought forward some days later and in the early hours of the morning of an all night sitting. I had left the chamber, not anticipating that new business could be brought forward, with the result that tie measure was passed without honorable members having an opportunity even to consider my amendment. I do not believe that this Parliament would have agreed to the constitution of an expensive commission, except on the understanding that it would be the eyes and ears of the Parliament, and would enable honorable members to know whether federation was injurious to any one section of the community or to any one State.

Mr Lane:

– The commission has made that fairly plain.

Mr GREGORY:

– It has clearly emphasized in its report that it will not consider disabilities.

Mr Lane:

– But there are no disabilities.

Mr GREGORY:

– The honorable member should not talk so stupidly. I cannot imagine any person who knows anything about Australia, and who is aware that the primary producers, the pastoralists, the timber-getters, and others inWestern Australia, are almost wholly dependent upon the export trade of that State, and are compelled to shoulder high costs by reason of the operation of the tariff as well as of the Navigation Act, because, they have to purchase nearly all of their requirements from the Eastern States, having the brainless incapacity to suggest that they suffer no disabilities. The Leader of the Opposition has clearly pointed out that, as the result of Commonwealth activities, an enormous amount of public money is spent in the large centres of population, and that Melbourne and Sydney derive the greatest advantage from that expenditure. I am not complaining about that. But I do contend that, if we have to purchase from the Eastern States at excess costs our machinery and every other requirement, we have to get something back. The Commonwealth Grants Commission refuses to consider the disabilities of certain of the States under federation. I can understand the disinclination of the honorable member who has interjected to inquire into the evils of selfcontainment and favouritism, which must be attendant upon the operation of the policy which has been followed by the Commonwealth. In the initial stage, the States refused to have anything to do with federation unless it was agreed that for all time three-fourths of the customs and excise revenue should be returned to them. When New South Wales did not have an actual majority in favour of federation, a limitation of ten years was proposed and accepted. It was recognized when the Constitution was being drafted that certain States must inevitably suffer from some disabilities. The States that depend upon their export trade have for many years found themselves to be in a very unhappy position. I draw attention to the following paragraph on page 13 of the commission’s report -

The export price index calculated by the Commonwealth Statistician rose from 809 in June, 1930, to 1083 in April, 1937, and tha value of total exports in Australian currency rose from £136,000,000 for 1935-36 to £102,000,000 for 1936-37. This rise of almost 20 per cent, in export income was the chief factor in the great increase in national income. Australian prosperity had, therefore, about reached the level of the pre-depression years.

In those words the commission undoubtedly recognizes the value of the export trade of the Commonwealth, and its effect on the prosperity of the people. In respect of New South Wales and Victoria there is a reasonably fair balance between the export and import trade figures, but in respect of Western Australia the position is very much the reverse. Western Australia, Queensland and South Australia have a very much larger export trade than the other States in proportion to their import trade. The commission saw fit to declare definitely that a substantial export trade is of great value to the whole community in order to create credits abroad, but it declined to take into account the effect of the Commonwealth policy, which prevented certain States developing their internal resources. Any policy which tends to destroy or to limit the export trade of a State is dangerous, for it may vitiate the very life blood of the nation.

A study of the available statistical information reveals very clearly the importance of the export trade of Western Australia. For the four years up to 1929 Australia’s export trade was valued at an average of £143,000,000 per annum. In the next four years, ending 1933,. the figures had fallen to £105,000,000 per annum. ‘When we deduct £54,000,000, gold held in reserve, we get a net figure of £92,000,000 which includes the amount of gold produced during this period. For the four year period up to 1937 an increase was noted to an amount of £133,000,000. It will he realized therefore, Unit in the first four veur period to which I referred, a very high point was reached. This meant that the spending power of the people was also high, and apparently the nation was enjoying prosperity. It is difficult to imagine the real effect of the circulation of this money on the whole community, hut we must all recognize that wealth created by primary production is of far greater consequence to the country than wealth created by other means. I had a long experience of affairs on the Western Australian goldfields, and I came to the conclusion that every man employed on the mines there in, winning wealth from the soil made possible the employment of four or five other people in other directions. From my experience, I calculate that during the years when the export trade of Australia averaged £143,000,000 a year, an- amount of probably £600,000,000” or £700,000,000 a year was being put in circulation. This was a direct consequence of the high values of the exports of the primary producers. After the period of prosperity which ended in 1929, the country had to face a quite different outlook. If our self containment policy be so valuable as we are led to believe it to bc, why did this country feel the depression so keenly? How was it that manufacturers had to dismiss 114,000 operatives and that there was such wretched destitution? Few seem to have realized what the reduction of our export trade by about £50,000,000 a year meant to this country in the period between 1929 and 1933. I need not dilate on that aspect of the subject. It is true that during the last four years there has been some recovery. Our export trade for the year ended 1937 “ totalled £162,000,000. “Unfortunately, these conditions do not seem likely to continue. The point is, however, that so long as we can maintain a vigorous export trade, affairs in this country are prosperous, but once our export trade falls our general conditions deteriorate and unemployment becomes general.

I want now to discuss the value of the export trade of Western Australia in relation to the export trade of the whole Commonwealth. In . 1932-33 Western Australia’s export trade was valued at £25.13 per head of the population, whereas the average for Australia, including the high average of Western Aus-‘ tralia, was only £14 13s. Figures for subsequent years were as follows - lt will be observed that in most of those years, the value of Western Australia’s export trade per head of the population was more than double that of all the States of the Commonwealth, including the high average for Western Australia. There is little need for me to emphasize the great importance of this export trade in connexion with the establishment of credits overseas for Government and general trading purposes. Western Australia is rendering a great service to the Commonwealth in maintaining .a high oxport trade percentage.

Unfortunately the balance of trade between Western Australia and the eastern States is most unsatisfactory. The people of Western Australia purchase from £10,000,000 to £12,000,000 worth of goods each year from the eastern States, but they have a very small market there for the goods they produce. Duties which average about 60 per cent, on all dutiable goods, and various cartels and trading arrangements in operation, combined with the effect of the Navigation Act, make it almost impossible for Western Australia to develop its resources owing to high costs and its dependence on world prices and world markets. In these circumstances, surely every honorable member must agree that the Commonwealth Grants Commission should have given special attention to Western Australia’s disabilities to ascertain whether some monetary or other compensation should not be granted. Yet the commission declined to take even material factors into consideration. As a matter of fact, in discussing the effect of federal policy on certain States and the request that it should bc taken into consideration in assessing the grant, the commission declared, on page 41 of its report -

The commission did not think this just, for such a situation would mean that other favorable influences had counterbalanced thu unfavorable effect of the item of federal policy shown to bc adverse, and States which joined a federation could not expect to separate a single adverse influence and claim compensation on account of it. Moreover, the main effects of federal policy, such as the tariff, are felt by individuals, and not merely by States, and the individuals affected reside in nil thu States.

To my mind, that was an entirely stupid and absurd declaration. To suggest, for example, that property owners in Melbourne suffer from the results of the tariff equally with the property owners in Perth is arrant nonsense. Property owners in the big cities in the eastern States have experienced a very great increase of the value of their properties in consequence of the manner in which factories have been established in certain areas. This lias not been the happy lot of property owners in Western Australia. It was submitted to the commission on behalf of South -Australia that in consequence of the tariff that State had suffered huge losses in all the efforts it had made to establish flourishing agricultural industries in certain new areas. South Australia’s claim for an additional grant was based almost solely on the effects of the tariff. If South Australia is in that position, Western Australia is also in it. lu fact Western Australia’s position is worse than that of South Australia. Unfortunately tariff imposts increase in an almost insidious way. We must all remember that in 1913 the general manager of the Broken Hill Proprietary Company Limited declared that his company did not require any assistance from the Government in the way of duties or bounties of any other form. He said that if the company could not compete with the world without such assistance it would not begin operations. Yet we all know how things have altered in this respect and they are now greedy sycophants for favours and trade privileges.

The commission went on to say -

To compensate a claimant State because some of its citizens suffered and not to compensate other States or individuals affected in a similar way would be absurd.

Unfortunately, Western Australia is not directly represented on the commission. South Australia had its representative and so did Victoria, but Western Australia had no one to fight its case; otherwise I feel that it is unlikely such absurd statements would have appeared in the report. Passages of this type help to blind the real issue. The report also stated -

It was also admitted by thu claimant States that, if the effect of- a. particular item of federal policy could be proved to he adver.su to a State, such adverse effect must lie set oil against the benefits gained cither from1 its association with thu Commonwealth generally or from the balance of federal expenditure in the Statu, over revenue derived from that State.

I say at once that I agree with that. We get advantages in one direction and there is no reason why we should not admit it; but on the other hand we want a clear admission that the commission should bc compelled to use the powers promised to it by the Prime Minister to deal fully with what is admitted to be the very difficult problem of determining just what effect the tariff has on the financial position of the claimant States. That is a tremendous task to set anybody and the elucidation of the problem would necessitate the utilization of the services of a staff of specially trained officers who could be found in the Statistical Department. Furthermore, it would have to consider the increased charges made by cartels, and the extra profits of the importers and the retailers superimposed over and above customs duties, the increased cost of living with increased labour costs, and the effect of the Navigation Act and other restrictions. All of these things dovetail into one another. As I have frequently said, our costs are 100 per cent, higher than they would be if we had freedom of trade in this country. The commission could have framed a very fair estimate of the losses clue to these restrictions, and suggested compensation, but apparently influences were too strong. At page 35 of its report the commission deals with unsheltered industries and the value of production in the various States per head of population. It shows that the average value of production per head of the population was £19 10s. in New

South Wales; £16 5s. in Victoria; £15 5s. 4<:1. in Queensland ; £25 Ss. 6d. in South Australia; £39 Os. 6d. in Western Australia and £17 13s. 3d. in Tasmania. Expressed in index numbers, taking the average for Australia as 100, Western Australia is estimated at 19S, New South Wales at 99 and Victoria at S2. 1 urge upon the Government that when the proposed Inter-State Commission is appointed it should make that body what was promised so many years ago, the eyes and the ears of this Parliament, so that it can acquaint the Parliament with all of the facts presented to it. In my electorate is a large area the settlers of which have suffered very severely during the last six years. If this great area is abandoned, and that seems likely, it willi result in a big loss to Western Australia and to the Commonwealth. In 1930, when they had a magnificent harvest, the price of . wheat dropped to ls. 6d. or ls. Sd. a bushel. Since then they have experienced dreadful droughts and, in some seasons, have not even produced a crop equivalent to the quantity of seed planted. They were advised to go in for mixed farming, but continuous droughts destroyed even this prospect. This has entailed heavy costs upon the State government in its efforts to retain those settlers on the land. The Government’s difficulties have been accentuated by a drought in the north which has caused large losses of sheep. Last year because of drought Western Australia had 5,500,000 sheep less than it had a couple of years ago.

Mr Jolly:

– That state of affairs applied all over Australia.

Mr GREGORY:

– It did at certain times of the year. I am endeavouring to point out that the settlers in Western Australia have also to battle against the effects of federal policy on the resources of the State.

I am afraid that these settlors will also have a particularly bad year again this year. However, I shall not touch upon that because I have no desire to depart from facts as we know them at the moment. The wool cheque in Western Australia in 1933 amounted to £5,000,000; in 1937 it dropped to £3,000,000. The State government has had a very difficult’ time in assisting the farmers owing to the magnitude of their difficulties. I cite these figures to stifle any possible criticism that may come from other honorable members as to the amount recommended to be granted to Western Australia this year. I wish to make it perfectly clear that, whilst the mining industry has done remarkably well in “Western Australia, those engaged in the agricultural and pastoral industries have had a very difficult time. The men engaged in opening up the back country are the cream of the earth. They are prepared to battle against tremendous odds for a home for themselves and their families, and they are quite content to accept hardships if they can only get a chance to make good. Costs have become too high to enable them to compete iri world markets, but if we sacrifice producers of this type, we arc striking at the very foundations of our national life.

I do not agree with the proposal of the Leader of the Opposition that we should endeavour to have the grant to Western Australia stabilized for the next three years. I should prefer that a commission be appointed to inquire into the whole matter of the disabilities of the States and instructed to report to Parliament, particularly in relation to disabilities that result from the effects of federal policy.

Mr FROST:
Franklin

.- Every honorable member knows the disabilities suffered by the claimant States through the effects of federal policy. Years ago, before the Navigation Act came into operation, Tasmania enjoyed a good weekly shipping service to and from New Zealand. Large quantities of timber and primary produce were shipped to the sister dominion regularly. Unfortunately, however, that service has been discontinued and now, if we wish to ship our produce to New Zealand, we have first to ship it to Sydney for trans-shipment to New Zealand. This, of course, means that double freight must be paid. The Commonwealth Grants Commission was set up to inquire into the disabilities of the claimant States and to recommend to the Government the grants that should bc made to aid them each year. I do not look upon the grant as charity; rather do I regard it as only part of that to which the States are entitled. The claimant States have suffered very severely since federation because of the growing practice of the Federal Government of spending the bulk of its revenues in Victoria and New South Wales. During the building of this capital city, thousands of mcn were attracted to leave the States by the good conditions of the employment offering, and a great many of them settled here permanently. The smaller States were not able to do anything to counter the drift of population to the more prosperous States, and, as the result, their industries were not able to increase production. I am pleased, however, to say that, as far as Tasmania is concerned, that drift now appears to have been checked. It is with regret that I note that the grant recommended for Tasmania this year has been greatly reduced below that provided last year. Apparently the practice of the commission is to recommend a reduced grant on a sliding scale each year. In 1936, the commission urged upon the Tasmanian Government to put its house in order. The Tasmanian Government made every effort to do so. This year, the commission has drawn attention to the fact that the State railways have lost a lot of money, and has asked the Tasmanian Government to call a halt to this extravagance. It is interesting on that account to read what the commission had to say in regard to the State railways in 1936. The 1936 report of the commission stated -

Un fortunately, Tasmania lias allowed her assets to run down. .Railways need rehabilitation; forests are depleted, and there is also evidence of soil exhaustion. There seems to have been some lack cif foresight and enterprise in these directions, but few positive faults of policy can bc found.

During the depression, railway rolling stock was allowed to get into bad order. Following the commission’s advice, the Tasmanian Government expended a large sum of money to put its railway rolling stock into better condition. That expenditure was responsible to a great degree for the losses incurred on the railway system. Now the commission has taken Tasmania to task for having suffered such a large loss on its railways. The latest report states - lt is impossible, however, to feel comfortable about the public finances of Tasmania, We have already referred to the position of the railways in paragraphs 132-138 and to the general position of the State in paragraph 55. The commission has a special opportunity for examining the policies of the claimant States, and wo feel -that it is our duty to draw attention to matters which are of critical importance. We have recommended unconditional grants because we believe that for various reasons the financial position and economic circumstances of sonic States made it impossible for them to give their citizens fair standards.

The commission is thus penalizing the State because it has done what it was asked to do. It cannot be denied that Tasmania has suffered from the effects of federal policy to a greater degree than any other State in the Commonwealth. Some time ago, arrangements were made with a foreign country to develop its large deposits of iron ore. What happened? The Commonwealth recently, by regulation, prohibited the export of iron ore from Australia. If it had been permitted to develop the iron ore industry in Tasmania, employment would have been provided for many persons, and additional revenue furnished for the State. Thus, because of the action of the Commonwealth, the financial position of the State- is being prejudiced. The Commonwealth has declared that Western Australia and Tasmania must keep their iron ore deposits undeveloped as a reserve against the time when the deposits in the eastern States arc exhausted, and those two States should undoubtedly be compensated for this loss.

I agree with the Leader of the Opposition (Mr. Curtin) that the amount of the grant should be fixed for a period, preferably for five years. The grants should be on a liberal scale, because it is desirable that the continent as a whole should be developed, instead of all the development taking place in two or three of the States. For many years, Queensland has benefited from tile protection which the sugar industry in that State has enjoyed, and the other States have contributed towards this benefit. It has been reliably stated that Tasmania alone contributes £200,000 a 3’ear to Queensland for sugar, and other States contribute in proportion. Tasmania receives ‘ no special help in this way ; we are losing everywhere.

In 1936, the Common-wealth Grants Commission reported as follows regarding forestry development in Tasmania : -

A long-term forestry policy involving considerable expenditure over a term of years is needed. Such a policy has been workedout and described to us in evidence, and the Commonweal th Director of Forests commented on it very favorably to us. This policy hasnow been initiated with the help of the Common wealth grant for foresty, but it is hampered by uncertainty as to the necessary funds in future years, which prevents, for example, the recruiting of an adequate technical staff. An undertaking to finance some such scheme, approved by the Commonwealth’s technical advisers, seems to us the kind of additional help that Tasmania now needs.

Tasmania is the most suitable State in the Commonwealth for the growing of forests, and money expended upon forestry work there would benefit the whole of Australia. However, Tasmania has received no help for this purpose except a small share of the grant made by the Commonwealth to all the States for forestry purposes.No special assistance was given in response to the recommendation of the commission.

The grants received by Tasmania have diminished steadily during the last three years. In 1936, the amount was £600,000; in 1937, it was £575,000; and this year it is only £410,000, which amount is quite inadequate, and is not in accordance with the Federal policy of assisting the weaker States. It has been proved that in every federation the smaller states suffer certain disabilities. At the present time, Australia is spending millions of pounds on defence, yet hardly any of the money is to go to Tasmania. There were ironical cheers in this chamber yesterday when the Treasurer (Mr. Casey) announced that £190 was being expended on defence in Tasmania. Tasmania is one of the richest States in the Commonwealth in natural resources, and, were it not for federation, its people would be the most prosperous. The mineral wealth of the State, and the great productivity of the soil, would ensure that.

Mr Lane:

– That is one reason why Tasmania should not receive a Commonwealth grant.

Mr FROST:

– Tasmania as entitled to the grant becauseof the disabilities it suffers under federation. The honor able member cannot see beyond the beaches of Bondi and Coogee. Where would Sydney be without the potatoes and other produce that it regularly draws from Tasmania? Every day we read in the market reports that so many hundred tons of potatoes arc expected to arrive from Tasmania. I urge the Government to increase the grant which has been recommended for Tasmania, and to make it payable over a fixed period. [Quorum formed.]

Mr HAWKER:
Wakefield

.- I think that congratulations are due to the Commonwealth Grants Commission on the work.it has done. I do not agree with all of its conclusions. I do not think it has gone into all the phases of the problem, but it has done a great deal of very valuable work. It has approached the matter with a fair mind, and has put the whole subject of relations between the States and the Commonwealth on a much better basis. I hope, however, that that will not prevent the Government from going on with its proposal to set up an Inter-State Commission to carry out inquiries of this kind in the future. The

Constitution is mandatory on the point, and it is in some respect a repudiation by this Parliament of the Constitution that the Inter-State Commission is not now in existence.

Regarding the disabilities of the States, I hope that the Treasurer (Mr. Casey) will accept the principle of basing financial adjustments between the Commonwealth and the weaker States on the ground of disabilities, and not, as the Treasury has striven to do in the past, on the ground of need. I. am afraid that from a practical point of view,/ it may he inevitable to consider needs,but, morally, the ground for assistance rests on disability, even though the amount of the disability may be difficult to calculate. The honorable member for Franklin (Mr. Frost) has just referred to one disability which is very substantial in the case of Western Australia, which exists to a lesser ratio in regard to Tasmania, and to only a slight degree in the case of South Australia. It is very real, but very difficult to calculate. I refer to the federal policy of imposing an’ embargo upon the export of iron ore. Leaving out of account the international morality of the action, which is debatable, it cannot be denied that the embargo imposes a handicap on Western Australia. It has nullified a promising effort to settle and develop a remote area in that State. The embargo was imposed, partly to safeguard the future of industries in the eastern States, and partly from motives of high policy which is supposed to be in the interests of the whole Commonwealth. Nevertheless, it is a definite disability, and there are many such. Last year, I referred to the manner in which the market for Australian barley, most of which comes from South Australia, was very seriously diminished as the result of federal action ‘to protect the glass industry in the electorate of Cook. Disabilities of that kind are indirect, and difficult to measure. On the other hand, there are, undoubtedly, certain compensations arising from federation. The honorable member for Franklin mentioned the dependence of Sydney on Tasmanian potatoes. That is certainly a disability suffered by the people of Sydney, who could get better potatoes from New Zealand except for the action taken by the Commonwealth to prevent them from doing so. I do not think that, however, the benefit which Tasmania enjoys in respect of potatoes is anything like full compensation for what it suffers under federation. In South Australia, certain definite benefits arising from federation are enjoyed in respect of the wine industry and the motor body-building industry, but, making all allowances for’ these, I think that there remains a considerable balance of disabilities under federation. I want to see the Commonwealth strengthened, and growing in unity of national purpose. I. do not think that it is necessary for it to grow from any increase of the spheres of action of this Parliament; it should grow from a common sense of being one people and from a common sense of the difficulties with which different parts of the Commonwealth have to contend. A proper financial adjustment as between the different units of the Commonwealth is one of the essentials of solid national growth,

The commission has done a valuable service in working out its formula. 1 agree with the Leader of the Opposition that’ the formula will result in a time lag of two years. This year most of the States will probably experience difficulties, because the grants to the claimant States are based on the figures for 1936-37, which was a remarkably good year for primary production. The grants are based not on prosperity in the smaller States, but on their prosperity in relation to the prosperity in the non-claimant States. The great diversity of industry in Victoria and New South Wales and the sugar and other tropical industries in Queensland, give to those States some security against extreme fluctuations ; and in good times, when primary production is flourishing, the needs of the claimant States are fewer in comparison with the position in the non-claimant States than they would be in had times like the present. I do not think, however, that the making of grants of a set amount for a specified number of years would entirely overcome the time lag disability. So long as the Loan Council allows latitude in deficits and surpluses the claimant States will be able to take into consideration the changes, and will be able to forecast with a certain degree of accuracy what their grant will bc two years ahead. I expect in the year after next the grants will be substantially greater than they are this year, . because they will be based on the conditions which are operating this year. I think that the Treasury officers, Commonwealth and State, are able to make an accurate forecast as to what effects the present economic conditions will have upon the grants. What I have said, of course, presupposes that the commission will not depart from ite present method of calculation. The commission appears to do things instinctively and in some years, in order to bring the result of its calculations into line with its instinctive guess, it makes allowances and deductions from grants such as those on account of loss on loan accounts. I draw the attention of the House to what the commission says on pages 82 and 83 of its current report. It says -

We have frequently drawn attention to our difficulties in assessing special grants owing to lack of reliable figures. lt goes on to say -

As our adjustments on account of .relative severity of taxation constitute such an important element in special grants., it is a matter of great importance that our basic data should be reliable. In the absence of more complete data, however, we are obliged to rely on broad judgments and approximations which may or may not be confirmed when better statistics become available. As our adjustments for taxation involve such large sums, it is very desirable that the area of inference should be reduced to a minimum. This year we have experienced great difficulty with the Tasmanian assessments owing to the fact that federal central office company assessments, which relate to incomes derived from more than one State, arc not a-.located to the various States. In the absence of this allocation we are obliged to make estimates which are based in part, on Statu taxation assessments.

It further points out, as it has pointed out in previous years, the importance of having accurate statistics. I hope that it will be possible for the Commonwealth Taxation Department to dissect its accounts in such a way that its statistics will be really accurate. The Commonwealth Grants Commission, or the InterState Commission, whatever the case may be, would then have a solid basis on which to make calculations.

The most important thing to bear in mind is the fact that these grants are palliative and by no means a cure. The most important thing for this Parliament to do is to help the States to help themselves rather than to pay them compensation to carry on an existence somewhere iia conformity with Australian standards, lft should do its utmost to support indus.tries that lead to the decentralization of our economic system. I believe, for instance, that the news-print industry in Tasmania will help to put vigour and life into that State, which would he worth a great deal more than a cash grant for the injuries which the State has sustained. Some attention should be given to the possibilities of other industries. This Parliament should be prepared to go further than it has gone to give assistance to industries which are not situated in the already existing industrial centres of the Commonwealth. If the nation is to be held effectively, the growth of population in areas other than those in the southeastern portion of the continent should be encouraged. If steps are taken to give that encouragement a great deal more would be done to rectify the disabilities of the smaller States than could possibly be done by cash grants. In the absence of that encouragement, however, cash grants are essential. Although the grants to the States this year represent reductions on the grants of last year, I accept the commission’s findings as a fair assessment according to its formula, and I trust that the formula will not be adjusted to the disadvantage of the smaller States in the future when it happens to work in their favour.

Mr MAHONEY:
Denison

– I am more satisfied than ever before that the disabilities of the claimant States will never be correctly calculated except on a broad national basis. The Commonwealth Grants Commission claims that the best system for compensation to smaller States is on the basis of needs, but I disagree. The needs of a State depend upon its budgetary position. I warned the Tasmanian Government against accepting the needs basis, and said that the time would come when its grant would be considerably cut. My phopecy is borne out this year. I give the commission this much credit: I feel that it did not anticipate that its formula would work to the disadvantage of Tasmania to the degree that it has done this year. It has, however, taken opportunity to punish the State. The first thing for which it has punished Tasmania is for having a good Labour government, which has placed the State on a sound financial footing.’

Mr Lane:

– That is not stated in the report.

Mr MAHONEY:

– The commission agrees that the State Labour Government has improved the economic position of Tasmania, and because of that improvement it has penalized the State. If a nationalist government and all of the chaos and unemployment that result from such a government had been in existence, Tasmania would have received an increased grant. That proves conclusively that one of the reasons for the punishment of the State is the fact that Labour is in power.

I was pleased to hear the Leader of the Opposition (Mr. Curtin) and the honorable member for Wakefield (Mr.

Hawker) direct attention to the fact that the expenditure of a tremendous amount of Commonwealth money in the thicklypopulated States has brought prosperity to them. The expenditure of £20,000,000 on Canberra has helped to improve the financial and economic positions of Victoria and New South Wales, but it has conferred no benefit on Tasmania. That State loses population as the result of the prosperity that is brought a’bout in other parts of the Commonwealth as the result of the expenditure of millions of pounds of Commonwealth funds. I have always argued that one of the great disabilities of Tasmania is the fact that it is out of the circle in which Commonwealth money is expended. This year, for instance, the Commonwealth Government proposes to expend on defence £15,000,000, hardly one penny of which is to be expended in any part of Tasmania. The hydroelectric scheme provides Tasmania with the cheapest source of power in the Commonwealth, and that should have been taken into consideration when the Commonwealth Government was establishing its munitions factories. All of Tasmania’s claims have been lost sight of and it will lose £165,000 of Commonwealth grant this year.

Another way in which the commission penalizes Tasmania this year is by imposing a penalty because of the increased, wages now being paid to the railway workers. The cash value of the penalty is £17,000. The Tasmanian railway workers who were granted this increase of wages by the Arbitration Court are still the lowestpaid railway workers in Australia. It is altogether wrong to penalize a State on that account. A further argument in justification of the reduction of the grant is severity of taxation. It is said that a drought in Queensland caused a drop from 112 to 90 in the severity of taxation in that State. The commission has contended that, because of the increased prosperity in Tasmania due to the administration of a Labour government in the last two years, the taxation in that State should be higher than it is. Why should a drought in Queensland be taken as a basis of calculation? It is a matter over which the people of

Tasmania have no control. The Government of that State agreed to reduce its public works programme., on the promise of the Commonwealth that it would undertake extensive defence works, but that promise has not been kept. Is that justice? Is there any wonder that the tendency in- Tasmania is to secede from the federation? The sole object of the reduction of the Commonwealth grant this year is to impose a penalty upon the Labour Government of that State. The Prime Minister (Mr. Lyons), when asked to comment upon the reduction, said that it was due to business improvement and the increased community income. Bitterness is felt because a dagger has been thrust at the heart of the Labour Government of Tasmania on account of its having displayed sufficient business capacity to improve the position of the State within the last two years. I know very well that the Commonwealth Government seized the opportunity with pleasure, and that it is gloating at the-result. as it gloats over all of its victims in the political struggle.

It has been said that the increase of the natural population in Tasmania is not sufficiently rapid. In this national capital there are families which came from Tasmania when building operations were commenced here. How can that State expect to maintain its population when its people are drawn to the mainland to share in the prosperity induced by Commonwealth expenditure? Workers were taken from Tasmania to work on the Kyogle to South Brisbane railway, and they never returned. The same thing happened in connexion with the construction of the railway from Oodnadatta to Alice Springs. Men and women will always go to places which offer the best wages and labour conditions. That is why the natural increase of the population of Tasmania is proceeding at a slow rate. This matter should have been given greater consideration by the Commonwealth Grants Commission. In order to place its goods on the markets of the mainland, Tasmania has to rely on transport by sea.

Mr Collins:

– What about the air?

Mr MAHONEY:

– No considerable volume of goods is sent to the mainland markets by air. I understand that thatwill be a costlyand uneconomic means of transport for many years to come. Hundreds of thousands of poundshave been lost to Tasmania because of high freights. It should have a more up-to-date and more frequent service for the carriage of its goods. A further disadvantage is suffered in connexion with the tourist trade, because the steamer fares are too high, due to the absence of competition, and there is not a regular and up-to-date service. It is a law of nature that the strong shall live upon the weak. The strong States are sapping the economic vitality of the smaller States; they are taking their people, and, in addition, have the advantage of the great bulk of Commonwealth expenditure.

I recognize that the Commonwealth Grants Commission has done a fairly good job, and I should prefer it to an obnoxious, anti-Tasmanian, anti-federal body appointed by this Government with a view to finding jobs for some political dead-beats. Prior to federation, Tasmania received £466,000 annually in customs revenue.

Mr Jolly:

– It has had over £1,000,000 in the form of Commonwealth grants.

Mr MAHONEY:

– -It has lost tens of millions of pounds, as well as a large portion of its population, and has received practically nothing in return. It contributes to Commonwealth expenditure for the economic development of Australia. Nothing has been done in Tasmania in the direction of establishing industries which would induce the workers to remain there. All of the big industries of New South Wales and Victoria are protected, to the detriment of Tasmania. I need only refer to the great steel works at Newcastle, the glass industry, and the galvanized-iron industry. The sugar industry in Queensland has been stabilized, at a cost to the people of hundreds of thousands of pounds. It is time that some industry was stabilized in Tasmania, which is now regarded as a poor relative.

The Commonwealth Grants Commission recommended the expenditure of an additional £75,000 upon forestry in Tasmania, but the Treasurer (Mr. Casey) refused to give effect to that recommendation; yet when it recommended the reduction of last year’s grant by £165,000, the recommendation was accepted.

The representatives of Tasmania and of the other claimant States are fully justified in ventilating their grievances in this House. Personally I protest bitterly against the proposal to reduce the grant to Tasmania by £165,000. The State Government should not abide by the formula that has been devised by the Commonwealth Grants Commission. If honorable gentlemen opposite who represent Tasmanian constituencies vote for this iniquitous proposal they may rest assured that they will be defeated at the next federal elections. As certain Government supporters who protest against the making of grants to necessitous States are never backward in accepting tariff benefits and bounties designed to assist various industries in the States which they represent, they should not be so antagonistic to the making of financial grants to other States. Instead of sniggering, they should be sympathetic.

Mr Stacey:

– We do not want sympathy;we want our rights.

Mr MAHONEY:

– That is so; but I remind the honorable member for Adelaide (Mr. Stacey) that Western Australia and South Australia were receiving grants from the Commonwealth long before Tasmania was doing so, and in proportion to their population those two States have received far more in this way than has Tasmania. The Tasmanian Government should not be penalized because it has done a good job.

The honorable member for Wakefield complained about the price in Sydney of potatoes from the north-west coast of Tasmania. His suggestion that potatoes should be imported from New Zealand is, in my opinion, an insult to the Tasmanian potato-growers. The honorable gentle- man favours the payment of a bounty on wines produced in South Australia. If the South Australian wine was of the same uniformly high quality as are the Tasmanian potatoes, the honorable gentleman’s attitude could be better understood, but it is not so. Tasmanian potatoes are as good as any produced elsewhere in the world, but some of the South Australian wine that is marketed is not by any means all that it ought to be. Between 75 per cent, and SO per cent, of the trade of Tasmania is interstate, but it has to be organized under very difficult conditions.

I hope that when the paper pulp industry is established in Tasmania better days will dawn for that State-. The industries of Tasmania should be granted full protection just as are those of the other State3. Unfortunately, in the past, substantial help has been given to certain industries on the mainland to the detriment of Tasmania. Surely the time has come to discontinue that policy.

I have no doubt that I shall be told that the Treasurer of Tasmania, Mr. Dwyer Gray, has not complained about the reduced grant. I warned that gentleman years ago not to accept the formula of the Commonwealth Grants Commission for fixing the amount of the grant to Tasmania. Ho asked, “Why?” 1 said, “ You will get a raw deal. As soon as the State budget is balanced the grant will be reduced “.

Mr Lane:

– I suppose the honorable member would not suggest that the State Treasurer should fake the budget?

Mr MAHONEY:

– Certainly not. I complain, however, that because of the good results of the administration of the Labour Government in Tasmania the people of that State are being called upon to suffer by means of a reduction of the Commonwealth grant.

It is only fair that a larger proportion of the defence expenditure of the Commonwealth should be expended in Tasmania. The Commonwealth Treasurer has shown that he is far from being sympathetic with Tasmania.

We are well aware that at a recent meeting of the Loan Council the Premiers were told that if they reduced their loan expenditure on public works the Commonwealth Government would bear it in mind in allocating” defence expenditure. Unfortunately Tasmania’s claims in this regard have been almost entirely overlooked. When Mr. McLean, the general manager of the hydro-electric enterprises of Tasmania, returned from a recent trip abroad, he said that Tasmania had one of the finest schemes of its kind in the world. Why does not the Commonwealth utilize the abundant hydro-electric power of Tasmania in connexion with its defence enterprises? Tasmania is entitled to greater consideration in respect to aviation, shipping and railway services than it is receiving. If the Commonwealth Government desires to help Tasmania it should make possible the building of a new railway line from Hobart to Rosebery and thus make provision for the smelting of Tasmanian minerals at Risdon. There is no justification for transshipping these minerals across Bass Strait. The smelting should be done in Tasmania. I urge the Government to provide finance so that the Tasmanian Government may build the railway line to which I have referred.

The Grants Commission is clever at setting up Aunt Sallys and knocking them down. For example, it has complained that the local government rates in Tasmania are not on the same scale as those on the mainland. But Tasmania has very few. wealthy suburban areas like Potts Point, in Sydney, and St. Kilda, in Melbourne. Immediately a proposal was made that certain municipalities should increase their rates, Nationalist supporters in Tasmania said the move emanated from Labour dictators. Local government rates should not be taken into consideration by the commission when determining the grants to the claimant States.

I hope that the Tasmanian Government will not take this reduced grant lying down, and that it will fight for the rights of the Tasmanian people as will their elected representatives in this Parliament. I appeal to honorable members not to look upon Tasmania as a mendicant State, but rather to regard it as an important link in the partnership of the Commonwealth, entitled to its fair share of any federal expenditure of either revenue or loan moneys. For that reason I protest so strongly against the latest recommendation of the Commonwealth Grants Commission in respect of Tasmania. I have been told confidentially that the formula worked out by the commission to assess the grant was one which it did not think could be arrived at, which indicates that it might be an incorrect one. I am glad that this Parliament has altered its outlook in regard to the claimant States, and has agreed to the principle that it is better to assess the disabilities of the smaller States by their disadvantages, than by their needs. £ hope that next year, and in the years to come, a more stable system of grants will be adopted. The continual changing of the amount of the grant year by year has a very upsetting effect upon those who control the financial resources of the claimant States. This year the grants to Western Australia, and Tasmania have been reduced, while South Australia also is to have a small decrease. I do not say, however, that political pull has been exerted in connexion with this matter. I trust that the bill will be withdrawn, and that it will be replaced by another which will provide for the restoration of the grant to Tasmania to the amount provided last year. If that be done, 1 feel sure that the people of Tasmania” will appreciate it, and there will not be any desire on their part to withdraw from the federation.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– It would be very unreasonable on the part of the Government or of any honorable member to expect -that a measure of this character should be permitted to pass without considerable criticism. The State governments, which will benefit as the result of this measure, as they have benefited in the past, would be less than human if, on occasions of this kind, they did not saddle their warhorses - their representatives in this Parliament - and send them forth to do battle on their behalf. Most of the criticism levelled against this bill is borne of the fact that the precise measurement of the needs of the three States concerned cannot be, and never’ .will be, an exact science.

Mr Paterson:

– In any case, it does not stay put.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– It is not possible in any circumstances for the needs of the States to be measured exactly. The result is that differences of opinion will, al ways occur, and naturally one cannot hope that prejudices will be wholly suppressed. I suggest that, having appointed what may be termed an umpire on this question, the Government has done well on this occasion, as in the past, to accept its -verdict in respect of the amounts proposed to be granted to various claimant States. That principle has been endorsed, I think, by this d’ebate, as a matter of fact, to such a degree by the Leader of the Opposition himself, that he is prepared to accept as suitable grants to the claimant States for the next five years the average of the grants awarded to them during the last five years. That is a fine tribute, not only - to the endeavours of the Government to do a fair thing by the States, but also to the com mission itself. It is worthy of note that so far no honorable member who has discussed this measure however much he may have criticized the findings of the commission, has questioned it honest intent. The question of difficulties and disabilities between the various States of the Commonwealth and the Commonwealth itself is common to federations throughout the world; but one might say that Australia to-day is leading the world in its endeavours to find means whereby these difficulties may bc overcome as satisfactorily as possible.

Mr Curtin:

– We should pay tribute to the members of the convention who devised the placitum in the Constitution which gives the Commonwealth Government power to do it.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– I am in complete agreement with the Leader of the Opposition in that regard. Recently a royal commission was set up in Canada to inquire into difficulties and differences experienced by the various provinces of Canada in their relations with the Dominion Government. It is very interesting to note that not one, but several, of the representatives of the various provinces, in giving evidence before that royal commission, strongly urged that the system which has been adopted by the Government of the Commonwealth, and which has been in practice now for five years, should be adopted also in Canada as a means of settling differences arising in the relations between the provincial governments and tho Dominion Government of Canada. That indicates that States in other parts of the world are studying, and in many cases approving, the methods adopted by the Commonwealth in relation to the difficulties arising between the Commonwealth and the States. The Leader of the Opposition put forward certain proposals concerning the making of grants to the claimant States in the future. He commented on the fact that, so far, the Commonwealth Grants Commission has not found it possible to arrive at any formula which would permit the making of annual grants without holding an inquiry into the whole aspect of the relations of the Commonwealth and the States year by year. The honorable gentleman suggested that, for the next five years, or failing that, perhaps for the next three years, the grants awarded to each of the claimant States should be the equivalent of the average grant awarded to the State during the last five years, basing his contention on the fact that, in the case of two States - South Australia and Western Australia- the average grant over the last five years approximated the grants made to those two States in 1933-34. The honorable gentleman, however, did not effectively deal with the fact that the average grant to Tasmania over the last five years showed a wide divergence from the grant made to that State in 1934.

Mr Curtin:

– I pointed out that the commission found that the Commonwealth had failed to do the right thing by Tasmania prior to its appointment.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– That is so. The honorable gentleman, however, went on to suggest that we ‘should take a potshot at the amounts to bc granted to the claimant States for the next five years. I did not gather the reaction of the honorable member for Denison (Mr. Mahoney) to that proposal, but I am inclined to think that he was not entirely in agreement with his Leader.

Mr Mahoney:

– There is not much difference between us provided the Commonwealth agrees to give Tasmania the higher grant.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– That completely confirms my suspicion. On this occasion, I find myself in agreement with the honorable member for Denison; I do not agree that in matters of this kind we should take a pot-shot at all. I believe that in the past many of the very real difficulties that have been suffered by the claimant States,, and, in fact, by all Australian Governments, were due to the fact that, in past years, governments have taken pot-shots in respect of their finances; they have relied too much on guesswork, .and not enough on well-reasoned calculation, when evolving and implementing their financial and general governmental policy. I do not think that this Government, which, year after year, is called upon to make very substantial grants to the claimant States amounting in the aggregate to more than £2,000,000 per annum, should decide upon any grant without making full investigation as to the merits of the case submitted by a claimant State.

Mr POLLARD:
BALLAARAT, VICTORIA

– The Commonwealth Grants Commission is shortly to go out of existence.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

-It may go out - of existence shortly, but if it does, some similar inquiry to that conducted by the commission in the past will have to be undertaken each year in the future. It is not as though the cost of the commission has been excessive. As a matter of fact, during the last three years, the total cost of maintaining it has averaged only £4,942 per annum. I venture to suggest that the information gathered by it and embodied in its various reports has been very cheaply acquired at that price. I emphasize further that I believe that when this Parliament is called upon to make grants aggregating in excess of £2,000,000 annually, it should he in full possession of all the facts which warrant the making of those grants. I hold very strongly that the existence of some such body as the Commonwealth Grants Commission is necessary in order that we may keep a proper check upon the financial and governmental .activities of the claimant States and take steps to check unhealthy trends in their activities. This Parliament is entitled to know from year to year just how the various States are conducting their finances. This year, for instance, the commission tells us that Western Australia is borrowing at a rate in excess of the rate at which it should borrow. It tells us that Western Australia is not recovering as high a percentage of its debt charges as it should.

Mr Curtin:

– That is ancient history.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– Partly, perhaps, but it is modern history also, because the commission emphasizes the fact that Western Australia is continuing its drift on this mistaken policy, and is not attempting seriously to revise it. The commission finds, further, that South Australia is not recovering the arrearsdue by its debtors to the extent that it should ; that it has, over a period, allowed arrears to increase steadily, notwithstanding the continuous improvement of economic conditions. It finds, also, that the Tasmanian railways are in a hopeless financial position, and that the drift is continuing. I submit that this House should be in possession, from year to year, of a statement setting out whether or not the various claimant States are acting as they should in regard to the matters of the character referred to.

Mr Curtin:

– Similar criticism of the finances of the non-claimant States could be made if an investigation were conducted into their affairs.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– I have no doubt that it could.

Mr Curtin:

– And even the Commonwealth Government would be in the same plight in respect of many matters.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– I do not gainsay that for a moment, hut the approach of this question is that the commission and thisParliament have always taken the view that the claimant States have the right to enjoy the same standards as the non-claimant States. Provided the aim of the commission to bring about that state of affairs is substantially realized, the criticism levelled by the Leader of the Opposition against the non-claimant States is hardly relevant.

Mr Curtin:

– I am not criticizing them. They, like the claimant States, would be able to advance good reasons why they cannot do any better.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– The honorable member for Swan (Mr. Gregory) directed severe criticism against the recommendations of the commission. He argued with all the fervour for which he is noted that the disabilities suffered by Western Australia were not properly compensated for by the grant which was recommended. He stated that the commission had refused to consider the alleged disabilities which Western Australia suffers as the result of federation. In reply to that I point out that, on numerous occasions, the commission has dealt with that very matter, as it applies not only to Western Australia, but also to the other States, and it has found that the net disabilities of the claimant States under federation, if they exist at all, are such as would justify a very considerable reduction of the amount of the grants over the last five years rather than an increase. I refer the honorable member for Swan to the third report of the commission, of which paragraph 189 is as follows : -

All these matters have to be taken into consideration in estimating the totalnet effect of federation onthe financial position of a State. We have pointed out the impossibility of measuring this net effect with any accuracy. There is, however, convincing evidence that at present, even with omission of imponderable benefits, the total net adverse effects on each of the claimant States is very considerably less than the needs of the State, measured from the relative financial position. We cannot see any possibility in the immediate future of this position being reversed. It follows that, under present circumstances, there is nothing to add to the measured “ needs “ on account of federation and federal policy, so far as these affect the financial position of the States. Needs at present include the net effect of federation and a good deal more besides.

Mr Gregory:

– The honorable member is evading the issue, which is that the Prime Minister made a definite promise, and that the commission has declined to honour it.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– The findings of the commission are subject to review by Parliament, and, all things considered, Parliament has accepted them with remarkably little hostile criticism. I also refer the honorable member to paragraph 68 of the fifth report of the commission, in which it is stated -

The answer to Western Australia, therefore, is that, in so far as the particular points raised affect the relative financial position of the State, they are reflected inthe grant. If an assessment could be made of the cost of the further disadvantages detailed in paragraph 03, it is unlikely that it would add substantially to the estimate made by Western Australian witnesses of the total net adverse effects of the tariff to Western Australia; and the commission lias already concluded that these are less than the advantages derived by Western Australia from the allocation of Commonwealth revenue and expenditure, and from other services provided by the Commonwealth.

Mr Curtin:

– It seems somewhat grotesque to say that it is impossible to measure a thing and then to add that, if it were measured, it would be less than something else.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– It has always been admitted that it is impossible to measure these things accurately. The measurement of needs and disabilities is not, and cannot be, an exact process We must rely largely on the fairminded.ness, the sense of justice and the native shrewdness of the men composing the commission, and their ability and fairmindedness have not at any time been challenged. We achieve accuracy so far as accuracy is possible. Beyond that we cannot go. The broad finding of the commission is that, actually, the various States do not suffer disabilities under federation at all, the position rather being that some of the States enjoy greater advantages under federation than do others. The findings of the commission are based on the assumption that those States which en’joy fewer advantages are entitled to have their standards raised to an equality with those of the more fortunate States. It is an application of Australia’s accepted fiscal system to the relations between the various States. The geographical situation of States, the variation in the extent of their natural resources, all affect the standard of living and the standard upon which the various State governments can function, and when the commission sets out to equalize those varying standards it .does all that it can do in the circumstances. It takes all known disabilities into consideration ; it has regard to the differing methods of accountancy employed, to the density of population, and to all other relevant factors, and then makes as close a. calculation as it can of the needs of the States in order that their standards of living may be made to approximate one another as nearly as possible.

Mr BARNARD:
Bass

.- 1 have listened carefully to the reply of the Parliamentary Secretary to the Treasury (Mr. John Lawson) to the arguments and criticisms advanced by various speakers in respect of the recommendations of the Commonwealth Grants Commission for this year. With some of what he said I entirely agree. Tor instance, I agree that the calculation of the amount of the grants cannot be an exact matter. As the honorable member for Gippsland (Mr. Paterson) interjected, an investigation can be made, but the relevant factors do not stay “put”. The Parliamentary Secretary said that all the Commonwealth could do was to accept the decision of the umpire. With that I agree, and if the recommendations of the commission for the last five years had been accepted by the Government, I should not have much reason to complain. The fact is, however, that they have not all been accepted, except in respect of some of the claimant States. The commission is to be complimented on the wealth -of material it has collected and collated over the last five years. Its reports are in reality a history of the economic development of the claimant States, and, indeed, of all the States. Moreover, the cost of the commission itself is not excessive. It has done’ a successful job and I have no serious complaint against it. The only thing ] regret is that it is not to be allowed to continue its work.

There is much in the argument of the Leader of the Opposition (Mr. Curtin) that the. grants to the States should be averaged’ over a number of years, because this would enable State Treasurers to prepare their budgets more accurately. The reduction of the Tasmanian grant by £165,000 this year must necessarily throw the finances of that State into disorder. If that aspect could be removed it would be of service to Tasmania.

One of the reasons advanced by the commission for the reduction of the grant to Tasmania for this year is that taxation in that State is not so high, relatively speaking, as it is in the .States which are accepted as the standard. The commission’s report refers to the increased incomes of companies and of persons on the higher ranges of income. If that be the case, the commission is paying, perhaps, an unconscious compliment to the Labour Government of Tasmania. Labour has been -in charge in Tasmania for several years, and if it is shown that its administration has resulted in increased incomes, both personal and company, it is an effective answer to those who criticize the administration of Labour. It is indisputable that the prosperity of the larger States has, to a great degree, been achieved at the expense of the smaller States. Prosperity in the eastern States is due largely to industrialization and for that reason cognizance must be taken of the effect of federation on the smaller States. I agree with the Leader of the Opposition that the time is coming when we must have greater consolidation of the States of the Commonwealth instead of a loosening of the ties that bind us together.

Mr Gregory:

– Every time the Commonwealth approaches the people with a referendum for an increase of its power til F6f US6 1 1

Mr BARNARD:

– That is due to the fact that the people have the facts misrepresented to them or to their failure to understand the technicalities involved in an alteration of the Constitution. The Royal Commission on the Finances of South Australia issued a report shortly before the’ Commonwealth Grants Commission was established. Frequent reference to that report is made in the reports of the Grants Commission. The appendix of the royal commission’s report contains some interesting figures relating to the value of Australian production between 1901 and 1926-27. For the purposes of this debate, I shall take the figures foi the largest State, New South Wales, and for the smallest, Tasmania, and set them out in the following table -

The report does not contain figures for 1901 in respect to manufactures, but the following table sets out the value of manufactures from 1907 to 1927: -

The comparisons in both of the foregoing tables show that Tasmania has suffered adversely as compared with the largest State of the Commonwealth. The latest Australian production statistics bulletin, which contains figures for 1935-36, sets out that in that year New South Wales produced primary produce to the value of £69,760,000 as compared with £5,755,700 for Tasmania. New South Wales, therefore, produced twelve times as much produce as did Tasmania. The figures for factory production are : New South Wales, £69,470,000; Tasmania, £4,066,000. The factory production of New South Wales, therefore, was seventeen times as great as that of Tasmania. Those figures clearly indicate that in recent years there has been some recognition of Tasmania’s claim for assistance and improvement. Even allowing for that, however, the progress of Tasmania has not kept anything like pace with that of New South Wales. Tasmania has always suffered from its insular position and lack of regular shipping. It has also suffered from a loss of customs collections, because the State is given no credit for goods consigned to the State from overseas which are unloaded at mainland ports.

The truth is, of course, that all States receive grants from the federal purse.. It is only because the grants to the smaller States are made upon the recommendation of a special body, and are the subject of a special appropriation by Parliament, that the searchlight of public opinion is focused upon them. . We never hear about huge sums from federal revenue that go to the other States because no special appropriation is necessary. From 1901 to the 30th June, 1935, all States had received £292,350,000 in bounty from the Commonwealth Government. Up to the end of 1937-38, New South Wales had received £116,211,441; Victoria, £S3,825,302; Queensland, £44,066,961; South Australia, £39,376,656; Western Australia, £36/720,647 ; and Tasmania, £17,623,164. There is considerable controversy as to the assistance given by the Commonwealth to the primary producers of Tasmania. All informed persons know that this State has a relatively larger rural population than any other State of the Commonwealth. We are proud of that fact in these days when people talk so much about the decentralization of. population. Taking all forms of assistance to primary producers from both loan and revenue, the amount given to Tasmania in comparison with that given to all States combined is clearly shown in the following table: -

The sum of £553,246 given to Tasmania to help primary producers during that six-year period represents £2 8s’. 4d. a head of the mean population of that State, while the £20,832,373 given to all States, including Tasmania, represents £3 2s. 3d. a head of the mean population of Australia. The assistance given to primary producers in Tasmania, which is the most rural of all the States, is thus very far ‘below the Australian average. These are facts taken from figures prepared by the Commonwealth Statistician, and they show that Tasmania has been neglected in this regard.

I referred earlier to Tasmania’s position as far as grants are concerned, stating that I was inclined to agree with what the honorable member for Macquarie (Mr. John Lawson) had said as to acceptance of the commission’s recommendations by the States whether they were in their favour or otherwise. I pointed out that Tasmania has never received from the Commonwealth the full amounts recommended by the commission. On at least two occasions the commission has made recommendations which were not accepted by the Commonwealth Government. That is one of the principal reasons, I think, why the basis of averaging the grants paid over the last five years, would hardly be acceptable to Tasmania. I have, of course, no authority to say whether that system would or would not he acceptable to Tasmania; that is a matter for the State Government to decide.

Paragraphs 341 and 342 of the third report of the commission, dealing with special Commonwealth assistance to Tasmania, pointed out that whilst in the case of the other claimant States the commission felt convinced that the grants recommended were sufficient to give to those States full opportunity to redress their financial inferiority, it did not feel the same conviction in respect of the Tasmanian grant, although it believed that the grant was ample for the immediate purposes of the budget. After referring to the lengthy depressed conditions of Tasmania, and giving other reasons for this statement, the commission said -

We think, therefore, that there is occasion for special help and encouragement beyond the scope of the special grants, and we recommend this need to the consideration of the Commonwealth Government and Parliament.

It then referred to the necessity for a long-term forestry policy for this State, involving considerable expenditure over a period of years, and suggested that an undertaking by the Commonwealth to finance such a scheme was the kind of additional help which Tasmania then required. It will be remembered that the commission had made a similar recommendation in its second report. I remind the House that Sir Nicholas Lockyer recommended in 1926, that a grant of £50,000 per annum should be provided over a number of years for forestry purposes in Tasmania, and that the Commonwealth Parliamentary JointCommittee of Public Accounts also suggested in 1930 that a special grant should he made to the State for the same purposes. The Commonwealth Grants Commission further pointed out that a comprehensive forestry policy for Tasmania had been planned by the Con- servator of Forests, and had the approval of the Tasmanian Government. This scheme was submitted to the Commonwealth Government as far back as the Sth November, 1935, but nothing having since been heard of it, the Commonwealth Grants Commission, after a fairly comprehensive survey of the situation, made the recommendation that special consideration should be given to Tasmania to provide it with an opportunity to make up for its wastage and its lengthy depressed conditions, by a forestry policy financed by the Commonwealth Government over a period of years. I repeat that Sir Nicholas Lockyer, who was appointed by the Commonwealth Government of the day to make a survey of the position of the State, after sifting the whole of the evidence submitted to him, had recommended that £50,000 should be made available over a period of years, and that subsequently the Commonwealth Parliamentary Joint Committee of Public Accounts, after making its investigation, which I agree was probably not quite so comprehensive as the other investigations, had. made a recommendation on similar lines. So far nothing has been done to give effect to these recommendations.

The budgetary position of Tasmania two years ago has been taken into consideration, and the effect has been to reduce the grant this year by £165,000. This has caused considerable embarrassment to the State. What does the Government propose to do in regard to those recommendations which, for a period of years, it has failed to put into effect ? The Lyons Administration has been in power now for six years. Although its composition was then slightly different, i£ first appointed the Commonwealth Grants Commission. It has accepted fully the commission’s recommendations in respect of .South Australia and Western Australia, but has done nothing to give full effect to recommendations concerning Tas1 mania. I frankly admit that Tasmania has improved its position in recent years. The cash grants from the Commonwealth Government have contributed towards that end. But Tasmania’s progress has been much slower and much less marked than has that of the two large manufacturing States.

At page 69 of its fifth report the commission shows that Tasmania expended 29s. Sd. a head of its population on social services and education, whereas the Australian average was 32s. lid. The figures relating to health, hospitals and charities reveal that Tasmania expended 3s. 6d. less a head of the population than the Australian average, In the circumstances it cannot he* said with justice that Tasmania has been unduly extravagant in this regard. So long as it keeps its figures below the Australian average it is doing a. good job.

Whilst we regret that the grant has been reduced this year - the reduction of £165,000 will have a very serious effect upon the State’s finances - we shall have to be content with it, because we accepted an increase when it was given. Whilst one may not agree entirely with the whole basis of the recommendations, it is useless to criticize too strongly. My principal complaint against the Government is that no apparent consideration has been given to the recommendation made in two previous reports, the intention of which was to enable the State to become independent of future grants. We have to accept the position and make the best of it; but I emphasize that, whilst doing so, Tasmania has justification for complaint against a government which established a body to investigate and report to it on the disabilities of the States, and. then failed to give effect to the recommendations of that body in their entirety. With that reservation I accept the position.

Mr NAIRN:
Perth

.- The fifth report of the Commonwealth Grants Commission, upon which this bill is based, will probably he the last that we shall receive from the commission. I hope that the next report we receive on this subject will come from the proposed Inter-State Commission. I have heard it said that the Government intends to shelve the Inter-State Commission Bill, but I hope that that will not be done, for a good many people in the community are looking forward to the reestablishment of the Inter-State Commission.

Mr SPEAKER (Hon Gr J Bell:
DARWIN, TASMANIA

– I hope that the honorable member will not anticipate the debate on another bill.

Mr NAIRN:

– All I wish, to say, sir, is that I hope the debate on that bill will not be unduly delayed. The Parliamentary Secretary to the Treasurer (Mr. John Lawson) attempted to defend the Commonwealth Grants Commission for not having dealt exhaustively with the disabilities of certain States under federation. Although the commission has not inquired into disabilities, it has offered an opinion that .the minority States would receive less on the basis of disabilities than on the basis of needs. The Tariff Commission found no difficulty in ‘ assessing the position of the minority States in respect of the tariff enactments of this Parliament, the Commonwealth Grants Commission declared that it could not form a judgment on that subject. It preferred to take a pot-shot at the position, without making any serious inquiry into the subject of disabilities consequent upon Commonwealth policy. The plain fact, of course, is that certain States of the Commonwealth are in a position of economic subservience to other States. In some respects the position of the minority States in Australia’ is worse than that of certain central European States, like Czechoslovakia, which are liable to come under the domination of Germany. Those particular nations at least have the right to impose their own tariff measures, and in some degree correct their disabilities. But the minority States in the Commonwealth cannot take t.ha.t step. Consequently their industries suffer in comparison with the industries of the larger States.

I recognize the necessity to afford tariff protection to certain industries of this country, but, unfortunately, I cannot point to a single industry in Western Australia which has been encouraged or assisted by the fiscal policy of the Commonwealth. As the other minority States are in the same position, they, with Western Australia, have to come to the Commonwealth Parliament from time to time for financial assistance. Western Australia is in the same position in relation to the other States of the Commonwealth as our industries in general would be to the industries of certain other countries if Australia adopted a freetrade policy and opened its doors freely to the products of other countries. Western Australia has to suffer the disability of unrestricted competition from the industries of the eastern States. Surely in such circumstances it is entitled to some degree of compensation. I fear, however, that too many members of this Parliament are disinclined to assist the minority States, preferring rather to leave them to fend for themselves.

It is for this reason that a good many of us welcomed the appointment of the Commonwealth Grants Commission, though we have not altogether agreed with the policy it has adopted in certain respects. We have never accepted its refusal to consider disabilities due to federal policy, nor its procedure in assessing grants according to the purely monetary needs of the claimant States. Such a policy undoubtedly encourages thriftless State Treasurers to look to the Commonwealth Government for larger grants to cover up their own deficiencies. I do not intend to enter on a long criticism of the Commonwealth Grants Commission, but I suspect, after a careful reading of the several reports that it has issued, that its procedure has been, first, to give some attention to the financial position of the Commonwealth Government, as it realizes that any grants to the claimant States must come from Commonwealth funds.

Mr Casey:

– I think the Commonwealth Government is the only one whose financial position has not been investigated by the commission. [Quorum formed.]

Mr NAIRN:

– It seems to me that the commission has, first of all, attempted to make an approximation of the financial position of the Commonwealth, and then, by pot-shot methods, it has made some kind of an allocation of the total amount to the various States. However, I suppose the minority States should be grateful to the Commonwealth Grants Commission, for I find that since it has been in existence the grants to necessitous States have been on a much more generous basis than formerly. For instance, the average grant to Western

Australia in the five years during which the commission has been functioning has been £600,000 per annum. In the preceding five years the amount was £400,000 per annum; so that “Western Australia has actually been £200,000 per annum better off in respect of Commonwealth grants since the commission has been functioning.

Mr Casey:

– Then the honorable member is in favour of the pot-shot method?

Mr NAIRN:

– I am not. I do nox believe that is the proper way to deal with this situation.

Mr Curtin:

– Surely it cannot be said that the commission’s methods have been pot shot, seeing that it has issued five informative reports.

Mr NAIRN:

– I disagree with the suggestion of the Leader of the Opposition that grants to claimant States should be made upon a uniform basis for a period of five years. It is sounder policy, in my opinion, to investigate the position of each claimant State from time to time, and make a grant in accordance with the existing needs of the situation. The economic position of various States varies year by year, and this should be borne in mind in recommending grants. However, we take leave of the Grants Commission with a sense of gratitude and a hope that it will be followed by an inter-State commission endowed with wider powers of inquiry.

Sitting suspended from 6.15 to 8 ‘p.m.

Mr GREEN:
Kalgoorlie

.- Honorable members representing the claimant States suffer a good deal of humiliation in having to come here year after year, cap in hand as it were, asking for the renewal of the Commonwealth grant to their respective States. They are certainly not called upon to justify the grant, because every honorable member in this House knows that the claimant States have a just claim on the resources of the Commonwealth. Nevertheless, one cannot discuss a bill of this sort without a certain feeling of distaste. This unhappy state of affairs will continue as long as the Government continues its policy of making yearly grants to the

States to supplement their shrunken resources. The grant to Western Australia last year amounted to £575,000; this year it has fallen to £570,000. It is a wonder the Government does not hold bargain sales in these grants, such as those conducted by drapers’ shops, quoting 193. 11-kl. for this State and 19s. 11¼d. for that State. I agree with the Leader of the Opposition (Mr. Curtin) and the honorable member for Wakefield (Mr. Hawker), who urged that the time will soon arrive when the grants will have to be determined on some actuarial basis and fixed for a period of years. If that were done, the State governments would be in a much better position to plan their economy ahead. I also agree with the honorable member for Wakefield that the claimant States labour under natural disabilities, in addition to those created as the result of federal policy. In regard’ to the latter, there is, I feel sure, no doubt in the minds of honorable members generally. I do not agree with those people in my own State who would secede from the federation in an endeavour to escape the yoko imposed upon them by federal policy. We are all, I feel sure, sufficiently good enough Australians to reject any suggestion that the federation should be torn apart, although we might use that threat in an attempt to drive a harder bargain with the Commonwealth.

Sir Frederick Stewart:

– Was that “ the purpose of the secession movement in Western Australia?

Mr GREEN:

– I sincerely believe that a large majority of Western Australians favoured the secession movement a few years ago. In stating this, however, it is only fair to say that I may not be reflecting the views of the collective mind of the people of Western Australia. I do not know how a vote on that question would be decided to-day. I have no doubt that the honorable member for Forrest (Mr. Prowse) would be prepared to admit that he is still an ardent secessionist; his views have not changed very much in that regard. The honorable member for Wakefield pointed out that the natural disabilities of the claimant States form a very important factor which must be taken into consideration in assessing

State grants. Tasmania’s outstanding natural disability lies iu the fact that it is separated from the mainland by Bass Strait. If it were attached to the mainland, that State would derive very large revenues from its tourist traffic, because I know of no State in the Commonwealth that has greater scenic beauties to display. South Australia also has several natural disabilities. It is largely a primaryproducting State, depending almost entirely on its production of wheat and wool although it has only S,000,000 out of a total of “ 112,000,000 sheep in the Commonwealth. South Australia experienced a succession of very bad seasons in its wheat-growing areas up to three years ago, and although during the last three years its wheat-farmers have harvested bumper crops, they have not been able to extricate themselves from difficulties associated with former years. I am familiar with the problems that beset them because when going to and from my electorate 1 travel through the wheat belt of South Australia. Whereas a bumper crop was promised South Australian farmers not more than four weeks ago, to-day their crops are wilting as the result of adverse seasonal conditions.

The Commonwealth Grants Commission has laid it down that it proposes to accept as a basis for measuring grants in the future the financial needs of the claimant States. During the last six years the grants provided for South Australia have totalled more than the combined grants to the other two claimant States. We recognize, of course, that the Commonwealth Grants Commission is composed of fair-minded men and we do not cavil at the fact that so much money has been made available to South. Australia because it is obvious that the financial needs of that State have justified the provision of larger grants; but Western Australia, too, has several natural disabilities, first and foremost among them being its large area and its comparatively small population. Although the State embraces an area equal to one-third of the Commonwealth it has only 450,000 people to develop it. Not for nothing are the remaining 6,500;000 scattered throughout the eastern States. The reason is obvious. I admit frankly that

Western Australia is the most difficult part of the Commonwealth to develop. Although its area is sixteen times as large as that of Great Britain, because of. the poor rainfall only about one-twelfth of it can carry rooted crops. It therefore becomes apparent that its small population cannot carry on without assistance. My colleagues may not agree with me, but I would go as far as to say that the whole of the northern part of Western Australia, if the State is agreeable, should be placed under the administration of the Commonwealth and like the Northern Territory should be a Commonwealth responsibility. Only 10,000 people are settled in Western Australia north of the tropic of Capricorn compared with 180,000 in Queensland. It must be obvious that the taxpayers in the north-west cannot be expected to meet the necessary outgoings in connexion with the development of that vast area. I do not wish to be a Jeremiah in regard to my State; I am not apologizing for it. Another natural disability from which the State suffers is found in the willy-willies which occur at irregular intervals and cause a tremendous amount of damage. Following a willy-willy frequently jetties have to be replaced by the State Government at a cost of £40,000, only perhaps to be swept away again by another storm. These jetties are absolutely necessary for the landing of supplies in the north-west. The irregularity of the rainfall which is experienced throughout the north with the exception of the Kimberleys which have a tropical rainfall-, is another disability from which the State suffers. In the very difficult country in the north the State Government has established a government meat works, to which are driven regularly cattle from the Northern Territory, About 3S,000 cattle were killed at the Western Australian government meat works last year, and I believe that that number will be exceeded this year. Although not much money is ‘being paid into a sinking fund for the meat works, at least more than is necessary to cover working expenses is being recovered from the working of the plant for that purpose. Without those works there would be no possible outlet for cattle raised in that remote area. Western

Australia is suffering again this year, for the fourth year in succession, from bad seasonal conditions. Adverse seasonal conditions have occurred even in places which, for a number of years, were considered to be reasonably safe, much more safe than, say, the Mallee districts of Victoria. In the past the rainfall in that area of “Western Australia has been comparatively sure, but again this year blank failure stares the farmers in the face for the fourth year in succession. Within the last three years wool-growers have lost 3,000,000 out of 5,000,000 sheep. Although many of the growers have spent a lifetime in the outback in an endeavour to seek a competence, they now find themselves faced with ruin. Many are broken-hearted and hopelessly insolvent. Then the task is to re-establish the depleted flocks.

I desire now to point out some of the actual disabilities under which Western Australia suffers as the result of federation. The first of these disabilities is the policy of protection. In my opinion this policy is absolutely necessary if Australia is to become a nation. It must be admitted, however, that, as far as Western Australia is concerned, protection has not helped us. As a matter of fact, it has operated to our detriment. The farmers point out that, with a free market, they would be able to buy their machinery and other essential supplies from abroad at very much lower prices than they have to pay for them in Australia to-day; and in support of their argument, they compare present prices’ of harvesters and other agricultural machinery with the prices of a few years ago. After obtaining a grant of £575,000 last year, Western Australia was a little better off than usual, and finished the year with a surplus of £10,000. Honorable members will admit that they judged things to a nicety. Included in the revenue was an amount of £170,000 representing rents from land, and another £165,000 for timber leases. The return from rents will gradually disappear as the farmers pay off the instalments on their conditional purchases, and become the owners of the land they occupy. Indeed, what with the series of bad seasons and low prices, so that on an average the price of wheat has been ls. a bushel lower than the cost of production, there would have been an exodus of population from the State if gold had not come to the rescue. Within, the last few years, 2,900 wheat farmers out of a total of 12,000 have gone off the land, and this year still more will leave. On the gold-fields I have met hundreds of ex-farmers who, after toiling for years at clearing their land, with the help of an advance from the Agricultural Bank had finally to admit defeat and walk off without a penny. Fortunately, the gold-fields were able to absorb them. In 1929, when the price of gold was low, there were only 3,000 miners in Western Australia. Today, the price of gold is double what it was then, and mining firms have taken advantage of the fact to install up-to-date machinery, and greatly increase production, with the result that there are to-day 17,000 miners on the fields. The gold yield has increased from 393,000 ounces in 192S to 1,111,000 ounces at the present time, which represents £11,000,000 in money.

As I have said, many of the disabilities of Western Australia are due to protection. I have no fault to find with protection as a policy; it is necessary for Australia and, in the circumstances, the only thing that can be done to help those States such as Western Australia and South Australia, which have to depend on primary production, is to give them Commonwealth grants when their finances are in a bad way. Some years ago, a committee of five appointed by the Bruce-Page Government inquired into the effects of protection in Australia, and found that the loss sustained by Western Australia as the result of protection was much more than that State has been receiving by way of Commonwealth grants.

Another disability recently imposed on Western Australia is the embargo on the export of iron ore from Yampi Sound. In April of this year, there were nearly 100 men in the northern part of the State engaged in the development of the iron ore deposits. A contract had been entered into with the Japanese buyers for the supply of 1,000,000 tons of ore, for which £2,000,000 was to be paid. The industry would have provided employment for a considerable number of men, many of whom would probably have settled in the district later on. The Commonwealth, in its wisdom, decided to prohibit the export of iron ore. I am not finding fault with that decision, but if it was not possible to let the ore go to Japan, then the Federal Government should have ensured that the deposits were worked for the benefit of Australia. However, nothing has been done, and this has caused a real grievance among the people of Western Australia, who are convinced that they get nothing out of the country’s policy of protection ; in this case they have been debarred from developing their iron ore deposits.

Western Australia also has a grievance in regard to the expenditure of money on defence. At tlie present time, a false prosperity is being created in the eastern States by the expenditure of large sums of money on armaments to protect us against an enemy who has not yet appeared. I do not object to work being provided for men, but I am convinced that many honorable members who have supported the Government’s policy would not have been so keen about it were it not for the fact that much of the money is to be spent in their own electorates. Thus the people who hope to make profits out of the defence scheme, as well as the worker who hopes to get his daily wages out of it, are unanimous in support of the Government’s defence policy. The amount of money to be expended in the distant States under the defence scheme is practically nothing as compared with what is to be expended in two eastern States, which it is not necessary for me to name. I believe that there is much merit in the suggestion of the honorable member for Melbourne Ports (Mr. Holloway) and the Leader of the Opposition (Mr. Curtin) that a great deal of the defence work could be carried out in the various State railway workshops. Even at this stage it might be well if the Government were to reconsider its policy, and adopt that suggestion, instead of giving contracts to private firms whose interest it will become to foment war sen res. using the press to that end.

The figures relating to the trade of Western Australia with the eastern States show what a valuable member of the Commonwealth Western Australia is. For the year ended the 30th June last, imports into Western Australia from the eastern States amounted to £12,319,000, while exports from Western Australia to the eastern States were valued at less than £2,500,000. Thus, Western Australia buys £5 worth of goods from the eastern States for every £1 worth which it sells to those States. I am not blaming the eastern States ; it is a matter of business ; but these figures show that the policy of protection, which has developed the industries of the eastern States so that they are now able to supply almost the whole of our daily needs, has been five times more valuable to them than to Western Australia. I stress the enlightening fact that the handful of people in Western Australia are more valuable to the trade of Australia than is any other country in the world except Great Britain. According to the Year-Booh for the year 1934-35, Australia’s exports to Great Britain were worth £153,760,000. Last year, Western Australia bought goods from the eastern States to the value of £12,319,000. Japan, which is always being boosted as our good customer to whom we should always be ready to toady bought from- Australia in 1934-35 goods to the value of only £12,000,000 odd in Australian money, and most of that was for wool which Japan could not do without. This year, I notice, we have an adverse trade balance with Japan. All the other British possessions combined bought from Australia only £11,000,000 worth of goods, or £1,000,000 worth less than Western Australia bought from the eastern States. It would, for the eastern States, have been no light matter, therefore, if Western Australia had seceded from the Commonwealth and had imposed a stiff tariff against the importation of goods from the eastern States.

Mr PROWSE:
Forrest

– I again protest against the basis upon which the Commonwealth Grants Commission makes its findings. The method is grossly unfair and is contrary to the intention of the Constitution. The Constitution has been violated inasmuch as there is now no Inter-State Commission al though the words of the Constitution are, “ There shall be an Inter-State Commission “. The intention of the framers of the Constitution was that that InterState Commission should try to balance the scales evenly as between the different States and report to the Commonwealth Parliament where a disadvantage brought about by the union was taking place. The States were given to understand that any such disability would be remedied. Federation has brought such disabilities on some of the States that they have gradually withered and become totally subject to the larger States which control this Parliament. It was anticipated by the framers of the Constitution that there would be disabilities against some of the States and certain provisions were made to overcome them; for instance, Western Australia was allowed for a considerable time to retain the benefit of customs revenue paid on goods imported into the State. The grants proposed to bc made under the Commonwealth Grants Commission Act were to be to redress disabilities, but the persons constituting the Commonwealth Grants Commission have determined that the grants are to be made on needs, and not on disabilities.

I should like honorable members to ask themselves in what position Western Australia would be if there were no federation. Would it have made greater progress than it has made if it had not entered the federation? If it has not been able to make the progress that it was making prior .to federation, what are the reasons for this? Royal commissions and even the “ Big Four “ have recognized that the producers of Australia are under disabilities compared with the secondary industries. Western Australia is a primaryproducing State ! Commonwealth laws, I submit, have brought disability to Western Australia in many ways. The Navigation Act places the State financially farther away from the eastern States than is New Zealand, London or New York. I should like honorable members to picture New Zealand as a. member of the federation. Would it have made the progress it has made if it were? No! New Zealand could buy and sell Australia under its own system of government because it has not gone mad with a fiscal policy of isolation. The honorable member for Swan (Mr. Gregory), whom I compliment on his address, and the honorable member for Kalgoorlie (Mr. Green), whom I compliment for portions of his address, showed the evil effects of the protectionist policy on Western Australia. I cannot compliment the honorable member for Kalgoorlie wholly because he is inconsistent. He shows all the evils that protection brings to Western Australia, and yet he is a great believer in the protectionist policy.

Mr Brennan:

– That is because he is an Australian and not a parochialist. He is therefore consistent.

Mr PROWSE:

– If we are to have a brotherhood of equality why does the majority inflict on the minority gross injustices and disabilities? The grants system merely alleviates; it does not cure. The grants are a dole on the basis of necessity and they do not attempt to get at the root of the evil.

Mr Green:

– What does the honorable member suggest should be done?

Mr PROWSE:

– That the great State of Western Australia would make greater progress if it were not in the federation. I shall elaborate on the figures cited by the honorable member for Kalgoorlie. In one year Western Australia bought more than £10.000,000 worth of goods from the eastern States, and those States bought £1,000,000 worth of goods from Western Australia. There was an adverse balance of £9,000,000 which employed people in the eastern States and penalized the people in Western Australia. Western Australia has to buy in a market in which the costs are artificially raised by means of protection and to sell its products in open competition with the rest of the world. Is not that a disability? Does not that enable the eastern States that get money from good customers in the west to employ their people? Western Australia is penalized because it is not able to buy where it sells.

The inordinate attempt to make Australia self-contained by a fiscal policy has been tried with serious results to the whole of Australia. The honorable member for Henty (Sir Henry Gullett) the other day said that the outlook from a population point of view was bleak. He said that, according to the Commonwealth Statistician, Australia would shortly reach a peak of 8,000,000 inhabitants and that the population would then begin to decline. He pointed out that we were not effectually occupying Australia and that unless we occupied it we were not justified in holding it. “Western Australia has done its job towards developing the country. In that State approximately 450,000 persons are nobly struggling to do so. Each person in the State produces more for export than any other two persons in the Commonwealth. The per capita production for the whole of Australia is about £16 whereas the per capita production in Western Australia is £36. Australia’s export is Australia’s credit. The Treasurer (Mr. Casey) will, as did the right honorable member for Yarra ,(Mr. Scullin), recognize the importance of our export trade. The right honorable member for Yarra, when hewas in power, wanted more wheat to be exported so that credits would be established. The present seasonal indications and the prevailing low prices indicate that our funds in London will dwindle to nought this year. It is in developing credits in London that Western Australia plays a notable part as a unit of the federation. The service Western Australia is performing in that respect should be recognized.

There should be an end to the creation of conditions in the eastern States for the benefit of those States at the expense of the western State. The report of the Tariff Board on the suggested development of an Australian motor industry was tabled last week. The Tariff Board has said wisely that it would be uneconomic to further that industry as a whole. I invite honorable members to read the letter addressed by the Minister for Trade and Customs (Mr. White) to the Tariff Board. It was almost coercive and was designed to force the hoard to bring in a report favorable to the establishment of the industry.

Mr Forde:

– That is a serious charge which the Minister should be present to hear.

Mr PROWSE:

– I am making no charge. The letter is there for honorable members to read. The Tariff Board was not influenced ‘by the letter. It did as I anticipated it would. We have had experience of the motor industry in Australia. We started to make the bodies of motor cars and the setting up of that industry has doubled the cost of the motor car in Australia, incidentally in Western Australia, and has given the manufacturers a profit of 66 per cent, on their outlay. Commonwealth legislation that would enable the establishment of an industry for the manufacture of the complete vehicle would create additional costs of transport in Western Australia where transport is so necessary.

Mr Forde:

– The Country party had three Ministers in the Government which placed the subject of the manufacture of motor vehicles in Australia before the Tariff Board.

Mr PROWSE:

– I excuse no one, whether he be a Country party man, a Labour man or a Nationalist, who ignores the economic facts that face this country to-day. The honorable member for Henty is aware of the dangers.

As a Western Australian I feel that the development of my State is being retarded by Commonwealth laws. There is no such thing as disloyalty in what I am saying. Indeed, I challenge any man to be more loyal to the Empire that keeps us than I am. I believe, however, that that portion of His Majesty’s Dominions embraced in Western Australia would be developed more rapidly if it seceded from the federation. It would he able to shelter more people and would be in a better position to defend itself if the shackles of federation which hold it down were broken.

The honorable member for Kalgoorlie referred to a’ number of economists who voluntarily offered their services to Mr. Bruce to advise him as to the handicaps that the development of secondary industries in Australia place upon the exporting industries. Honorable members may read their report. It was made at a time when the tariff was lower than it is to-day. It declared that the handicap amounted to 9 per cent, of production costs. Western Australia bears the full brunt of the 9 per cent., yet derives no reciprocal advantages. Certainly, some primary producers in proximity to the large populations of Melbourne and Sydney profit by reason of the fact that those populations are made possible by our export industries; that trade advantage is not available to Western Australia because of its isolation. I repeat that there would have been no depression in Australia but for the fall of our export commodity prices. Our export trade is the source of our credit and our prosperity, as well as of the inordinate profits which are made by the manufacturers. The Australian Glass Company was the means which led to the destruction of the Wyndham meat trade with Belgium, ‘because in placating that company, offence was given to a customer country whose trade with Australia was in the ratio of 9 to 1. The barley-grower ofSouth Australia also was making something out of Australia’s trade in that commodity with Belgium. The view of this House is that, so long as the Australian Glass Company may make a profit of 20 per cent., the Wyndham meat-producerand the South Australian barley-producer can “go hang”, and that a similar fate can befall the man who needs motor transport for the carriage of his produce to market so long as General Motors-Holdens Limited may make a profit of 66 per cent., nearly the whole of which goes to the United States of America. Honorable members must face the fact that this country is not occupied so effectively as is necessary for its defence. The Opposition protests loudly against immigration.

Mr SPEAKER (Hon G J Bell:
DARWIN, TASMANIA

Order ! The honorable member is discussing the fiscal policy rather than assistance to certain States.

Mr PROWSE:

– I am referring to what is happening to Western Australia because of the hampering conditions of federal legislation. Without much vision, we supported the tripartite agreement under which the sum of £32,000,000 was provided by the British Government, the Commonwealth Government, and the governments of the States, to settle people on the land, particularly in Western Australia. Those settlers were able to produce commodities, but because of the high costs induced by fiscal policy in Australia they were not able to market them.

Mr SPEAKER:

– Order! The honorable member is surely voicing a view which affects the whole of Australia !

Mr PROWSE:

– One disability under which Western Australia labours is due to the fact that it is not able to find markets. If we expect other countries to buy our goods, we must be in a position to take some of theirs in return. Our potential customers have been offended, and do not want our goods. Had Western Australia been free to enter into reciprocal arrangements in respect of natural products, that great State would have gone ahead by leaps and bounds. The working man considers that he has done a great thing in having secured an improvement of his position, but the purchasing power ofwhat he receives has been automatically decreased and he is no better off than he was before. The whole of Australia has been placed in an insular position, and we cannot produce anything to sell to other countries. If that position is not worthy of the consideration of this national Parliament, I do not know what is.

Debate (on motion by Mr. Bernard Corser) adjourned.

page 793

ADJOURNMENT

Sitting Hours : Un employment - Christm as Relief.

Motion (by Mr. Casey) proposed -

That theHousedo now adjourn.

Mr JAMES:
Hunter

.- I object to the suggested adjournment. This Parliament has sat for only short periods for some years, and the press has taken it to task on that account, yet on the first day on which the House met in this week there was an all-night sitting, and probably when the Government is so disposed it will again adopt similar tactics and pass legislation by the process of physical exhaustion, without proper discussion. I sat in this chamber until 6.30 this morning, endeavouring to voice grievances that I had failed to have adjusted by different departments. Now, having sat for only a few hours, it is proposed that the

House shall adjourn, although there are matters of grave national importance awaiting consideration. We are hurrying on to theChristmas recess when we shall be so to speak, in the lap of luxury, while many thousands of unfortunate unemployed will receive no consideration. I have asked the Government to make provision for Christmas relief, but no action in that direction has been taken. Last night, and early this morning, Estimates were rushed through, including £41,160 for the upkeep of the GovernorGeneral’s establishments.

Mr. SPEAKER (Hon. G. J. Bell).Order! The honorable member is out of order in discussing that matter.

Mr JAMES:

– This House sat on only 29 days in one year. With so much suffering and distress in the community, it is grossly unfair that the Government should adopt these tactics. I should not be surprised if, to-morrow, having sat for a few hours, the House will adjourn until Wednesday of next week. Then, there will be a further long adjournment on account of the running of the Melbourne Cup race. Is it any wonder that democratic institutions are being condemned? Recently, this Parliament passed legislation for national health and pensions insurance by means of the application of the “ guillotine “.

Mr SPEAKER:

– I insist that the honorable member shall not make reference to a previous debate or to the action of Parliament.

Mr JAMES:

– Even the Treasurer (Mr. Casey) cannot explain that legislation to the satisfaction of honorable members, nor can the National Insurance Commission.

Mr SPEAKER:

– Order! I have directed the honorable member to refrain from referring to that legislation in any way at the present time.

Mr JAMES:

– May I, then, say that, byreason of the fact that legislation is not thoroughly discussed in this House, it cannot be satisfactorily explained to honorable members? We have asked for explanations to be made in regard to a certain act.

Mr SPEAKER:

– Order! If the honorable member does not pay regard to the direction of the Chair he will be asked to resume his seat.

Mr JAMES:

– Well, the House will then adjourn.

Mr SPEAKER:

– Order ! The honorable member will resume his seat.

Mr BRENNAN:
Batman

.-I am entirely in sympathy with the views that have been expressed by the honorable member for Hunter (Mr. James). Yesterday, we. had the unique experience of an all-night sitting at the end of our first day of sitting in this week. We arrived in Canberra by train, after a long journey, on Wednesday morning. We met, as is usual, at 3 o’clock in the afternoon, and we were required to continue to sit until 6.30 a.m. this day. Now, it is proposed to adjourn at 8.45 p.m. What is the meaning of this “ rake’s progress”? What explanation or excuse is there for treating honorable members in this contemptuous fashion ? Is it some pre-arranged vendetta by the Government against the Opposition? Is it intended that methods shall be adopted which will make it as difficult as possible for honorable members who regard their work conscientiously, to address themselves seriously to the problems they are required to face? The Treasurer (Mr. Casey), without apology or excuse, has moved : That the House do now adjourn.” I do not. understand the position. I agree with the honorable member for Hunter, that if this kind of thing is persisted in it must bring Parliament into disrepute and even into contempt. Those who, professing to be upholders of democratic institutions, treat the representatives of the people in this contemptuous manner will live to learn that something lesspleasant and, indeed, less beneficial to the country, may take the place of those institutions. Under the forms of the House, I understand that we are precluded from discussing, on a motion for the adjournment, the adjournment of a debate which a number of honorable members had intimated their readiness to continue.

I am free to say, I suppose, that any amount of business awaits the attention of Parliament, and that honorable members on this side of the chamber, at any rate, are prepared to deal with it at once and to the best of their ability. In the circumstances, I protest against the adjournment of the House at this hour.

Mr BARNARD:
Bass

– I also protest against the course the Government is adopting. I sat in the House until 6.30 a.m. to-day, and I clearly recall the state of exhaustion of some honorable members at that hour. I object against the indecent haste of the Government in dealing with the bill that was before us this morning.

Mr SPEAKER:

– Order !

Mr BARNARD:

– I realize the limits of this discussion, but I can see no reason why the Government should not arrange the business of Parliament in such a way as to make it unnecessary for honorable members to sit during the whole of the night. That course having seemed necessary to the Government yesterday, it is extraordinary that the House should adjourn after only a short sitting to-day. If certain honorable gentlemen had had their way, the House would have adjourned before dinner this evening. I register my emphatic protest against this procedure, and callupon the Government to make better arrangements for the conduct of public business.

Mr CASEY:
Treasurer · Corio · UAP

– in reply - In protesting against the adjournment of the House at this hour, the honorable member for Batman (Mr. Brennan) said that the House was required to sit for sixteen hours yesterday, the sitting extending until 6.30 o’clock this morning. Surely the very fact that the House sat for so long yesterday is an adequate reason for it adjourning early this evening. Did the honorable member for Batman sit in the House throughout yesterday’s proceedings ?

Mr Brennan:

– I was here until an early hour this morning. It was only when I was deprived of my right to take a full part in the debate that I withdrew.

Mr CASEY:

– There was no curtail ment of the discussion yesterday, as those of us who were here until 6.30 am. to-day are well aware. Honorable members had full opportunity to speak their mind, on every aspect of the various subjects that came under notice during yesterday’s discussion. The Government is under some obligation to submit its business to Parliament in such a way as will meet the convenience of honorable gentlemen. Moreover, it must be remembered that there are two Houses of the Parliament and the Government must pay due regard to the convenience of honorable members of both Houses. I am sure that honorable members opposite are aware of certain facts in this regard which are not altogether public property.

Mr Green:

– That has nothing to do with it.

Mr CASEY:

– The honorable member for Kalgoorlie (Mr. Green) must be well aware of the attitude that the members of his party in the Senate have adopted. The Government is quite within its right in asking the House to adjourn at this hour, in view of the fact that it sat sixteen hours yesterday practically without a “ let-up.” The motion for the adjournment was moved having regard to the convenience and also the health of honorable members who were required to sit for such long hours yesterday and throughout last night. ‘I was one of those who attended “throughout yesterday’s sittings and I feel that the course the Government is now adopting is reasonable.

Question resolved in the affirmative.

page 795

PAPER

The following paper was presented : -

War Service Homes Act -Report of the War Service Homes Commission for year 1937-38, together with Statements and Balance-sheet.

House adjourned at 9.7 p.m.

page 795

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

War Pensions and Repatriation

Mr Francis:
MORETON, QUEENSLAND

s asked the Minister representing the Minister for Repatriation, upon notice -

What was the cost of (a) war pensions, and (b) repatriation, for each year from 1918 to 1938?

Mr Thompson:
CP

– The Minister for Repatriation has supplied the following information: -

  1. War pensions (excluding service pensions ) -
  1. dost of repatriation benefits(excluding administration, education scheme, grants to persons not eligible under the act, and expenditure on works under the control of the Department of the Interior) -

Note. - Account is not taken in the above figures of exchange or of the amounts repaid by other countries for medical treatment, &c, of their sobers resident in the Commonwealth, or of amounts repaid on loans and for interest, insurance and sundry services. The figures, therefore, are gross.

Oil Leases

Mr Green:

n asked the Minister for the Interior, upon notice -

  1. How many oil leases are let at present in each of the six States, and what is the total area leased in each State?
  2. Is thereany difference in conditions in the tenure of the leases in each of the States; if not, what are the conditions, particularly those dealing with the manning of the leases!
  3. On how many of these leases in each State is active prospecting in progress, and on how many in each State has no work been done for the last two years?
Mr McEwen:
CP

– The answers to the honorable member’s questions are as follows: -

  1. 2, and 3. The information desired by the honorable member is not available. Oil leases in the various States are matters which fall within the jurisdiction of the governments of the States.

On. Research in Papua.

Mr Green:

n asked the Minister in Charge of Territories, upon notice -

Will the Minister lay upon the table of the Library the geological report furnished by Dr. Arthur Wade and Dr. K. Ward, members of the Commonwealth Oil Advisory Committee, of the results of the search for oil, so far made, at the Oiapu bore, Apinaipi, Papua?

Mr Hughes:
UAP

– The honorable member’s request will receive consideration.

Canberra and Australian Capital Territory : Unemployment

Mr Barnard:

d asked the Minister for the Interior, upon notice -

  1. What was the total number of unemployed in the Australian Capital Territory at the 30th June, 1938?
  2. What was the average number of persons on part-time or relief work during the last financial year?
  3. Is it the intention of the Government to provide full-time work for those unemployed; if not. how much work a week is provided for (a) married men, and (b) single men ?
  4. What is their daily rate of wage?
Mr McEwen:
CP

– The information is being obtained.

Australian Shipbuilding Industry

Mr Beasley:
WEST SYDNEY, NEW SOUTH WALES

y asked the Minister for Trade and Customs, upon notice -

  1. Was. a committee appointed to inquire into all the phases of the shipbuilding industry in Australia?
  2. If so, who were the members of this committee?
  3. Has the report, yetbeen submitted to the Government?
  4. Is the Government in a position to state what action it proposes to take in this matter; if not, when can . such an announcement be expected ?
Mr White:
UAP

– The answer to the honor- able member’s questions . is as follows: -

A committee was not appointed to inquire into the shipbuilding industry, but following on the receipt of a report from the Tariff Board, certain departmental inquiries were made. The Tariff Board’s - report and the further information received by the department are at present receiving consideration. An announcement of the Government’s intentions will be made us early as practicable.

Royal Australian Air Force:

Machines on Loan from Great Britain

Mr Curtin:

n asked the Minister for Defence, upon notice -

  1. How many Avro Anson aeroplanes is the Government borrowing frour the British Government?
  2. When are they expected to arrive?
  3. For how long are these machines on loan to Australia, and how much is being paid for them?
Mr Thorby:
CP

– It. is not. in the best interests of Australian security to make this information public.

Leaseof Government Dock

Dr Maloney:
MELBOURNE, VICTORIA

y asked the Minister for Defence, upon notice -

  1. Has the Government leased any dock to any private person or corporation?
  2. If so, who are the lessees?
Mr Thorby:
CP

– The answer to the honorable member’s questions is as follows : - 1 and 2. CockatooDock and Engineering Co. Pty. Ltd. have been granted a lease of Cockatoo Island, Sydney, which includes the Sutherland Dock and the Fitzroy Dock.

Priceof Butter

Mr Lane:

e asked the Minister for Trade and Customs, upon notice -

  1. Is it a fact that recently the price of butter manufacturedin Australia has been increased’ to the consumers in Australiabv 2d. per lb.?
  2. If so, is it a fact that this increase, based on the annual Australian consumption of 210,000,000lb., will mean a rise in price to the consumers by an amount of £l,750,000 annually?

  3. Is it a fact that the Tariff Board Act provides that the Minister shall refer to the board for inquiry and report any question whether a manufacturer is taking undue advantage of the protection afforded him by the Tariff, and inparticular in regardto his -

    1. chargingunnecessarilyhigh prices for his goods : or
    2. acting in restraint of trade to the detriment of the public; or
    3. acting in a manner which results in unnecessarily high prices being charged to the consumer for his goods, and shall not take any action in respect of any of these matters until he has received the report of the board?
  4. Will he refer the matter to the Tariff Board for early inquiry?
Mr White:
UAP

– The answers to the honorable member’s questions are as follows : -

  1. The price of butter was raised in June last by1d. per lb.
  2. The total increase to consumers is thus approximately £875,000 per annum.
  3. Yes.
  4. The matter of an inquiry by the Government into costs in the production of butter is under consideration.

Commonwealth Grants Commission.

Mr.Nairn asked the Prime Minister, upon notice -

What is the average annual sum paid to members of the Commonwealth Grants Commission by way of -

remuneration for services, and

expenses?

Mr Lyons (through Sir Earls Page:
Minister for Commerce · COWPER, NEW SOUTH WALES · CP

e). - The answer to the honorable member’s question is as follows: -

  1. Salaries and fees, £1,734 per annum.
  2. Travelling allowance, £375 per annum.

The above are averages of the total amount paid to the chairman and other members (2) of the commission over the period of five years since the inception of the commission.

Grantsformineralresearch.

Mr.Green asked the Minister for the Interior, upon notice -

When were the last grants for prospecting for gold made by the Commonwealth to the various States and the Northern Territory ?

What were the respective amounts granted to the States concerned and the Northern Territory, and for what periods? 3: Will an amount be made available for this purpose on the current year’s Estimates? if so, how much, and how will it be allotted?

When was the last grant made for any other minerals, including oil, stated separately for the localities mentioned?

What are the amounts, if any, to be made available for all minerals, other than gold prospecting, on this year’s Estimates?

Mr McEwen:
CP

n,. - The information is being obtained.

International Relations : Czechoslovakia

Mr Hutchinson:
DEAKIN, VICTORIA

n asked theMinister for External Affairs, upon notice -

  1. What is the personnel of the International Commission set up following the Munich Conference, and what countries are represented on this commission?
  2. Is it a fact that Germany has occupied areas of Czechoslovakia not agreed upon at the Munich Conference; if so, what areas?
  3. Arc plebiscites to be held to determine the fate of certain Chechoslovakian areas; if so, what areas?
  4. Have the Czech people been allowed to remove removable property from ceded areas?
  5. What areas have been ceded to Poland and Hungary, and what has been the procedure followed ?
Mr Hughes:
UAP

– The answers to the honorable member’s questions are as follows : -

  1. The countries represented on the International Commission are Great Britain, France, Germany, Italy and Czechoslovakia. The representatives arc the Ambassadors at Berlin of Great Britain, France and Italy, the Secretary of State in the German Foreign Office, and representatives of the Czechoslovak Govern- ment.
  2. The Munich Agreement provided for four zones to be occupied by German troops in stages from the 1st October to the 10th October. It also provided that a fifth zone was to be determined by the International Commission and this was in fact determined and occupied by the 10th October in accordance with the agreement.
  3. Yes. in accordance with the Munich Agreement, but the Commonwealth Government has received information to the effect that the new frontier may be finally determined by the German and Czech Governments without recourse to a plebiscite. In addition, negotiations are now proceeding between Czechoslovakia, Poland and Hungary which may involve the question of plebiscites affecting Polish and Hungarian minorities.
  4. Yes, though it is pointed out that discussions are now proceeding between representatives on theInternational Commission as to what constitutes movable property in accordance with the terms of the Munich Agreement.
  5. In regard to Poland, certain portion of the Teschen and Freistat areas have already been conceded, while Czechoslovakia has conceded to Hungary “ token “ occupation of Sahmino and Novy Mesto. The procedure followed was that of direct negotiations between the governments concerned.

New Guinea: Salamaua- Wau Road

Mr Green:

n asked the Minister in Charge of Territories, upon notice -

  1. Are the reports of the officers who have been examining the four suggested road routes from Salamaua to Wau in the Territory of New Guinea yet completed?
  2. If not, what routes have been reported on, and when will the whole of the reports be finished?
  3. Will he place the reports of the different officers on the table of the House or the library for the information of honorable members? If so, on what date will this be done?
Mr Hughes:
UAP

– The answers to the honorable member’s questions are as follows : -

  1. Complete reports have not yet been received in Canberra.
  2. Reports are being obtained in regard to the following possible routes for a road from Salamaua to Wau -

It is expected that all surveys will be completed within a fortnight. Inquiries are being made of the Administrator’ as to when the reports on all the routes will be available.

  1. The request of the honorable member will receive consideration when reports on all possible routes arc available.

Wheat Industry.

Mr Gregory:

y asked the Minister for

Commerce, upon notice -

  1. Has the Minister’s attention been drawn to a memorandum on the international wheat situation by the secretariat of the Wheat Advisory Commission in London giving the purchasing power annually of a bushel of wheat during the past fifteen years in Australia, Argentina, Canadaand the United Statesof America, demonstrating how much less the purchasing powerwas in Australia in comparison with the other countries mentioned?
  2. If this is a fact, canhestatetowhat if is due ?
  3. What action is now being taken by the above-mentioned countries to ensure a stable price for the production of wheat?

SirEarlePage. - The answers to the honorable member’s questions are as follows : - 1.Yes.

  1. Data is not available to enable satisfactory critical examination of these tables to he undertaken.
  2. There are no actual “stabilizing” schemes in existence, butgovernmental assistance has been granted in varying forms. These are summarized hereunder: -

Argentina. - Government has power to fix minimum prices. There is no report yet of any fixation for present season’s crop.

Canada. - Canadian Wheat Board will pay to growers minimum price of 80 cents for grade No. 1, Northern Fort William Port Arthur. For lower grades correspondingly tower prices will be paid.

United States of America. - Government policy involves the following features: -

  1. Loans to farmers - averaging about 59 cents a bushel - as an inducement to them to withhold supplies from the market. It is expected that 130,000,000 bushels will be held in this manner. Loans are only made to those farmers who subscribe to the Government “ quota “ arrangement for next season’s plantings (vide (b) below).
  2. Purchase by the Federal Surplus Commodities Corporation of surplus wheat for export and relief purposes. The quantity mentioned is 100,000,000 bushels.Encouragement to millers for the export of flour up to a maximum of 5,000,000 barrels. Plans provide for theflour-milling trade to negotiate its own exports and to receive from the Government indemnities based on the difference between the domestic price and price’s ruling in foreign markets at time of sale. (c)Endeavour to restrict wheat production to reasonable limits. To this end total winter and spring wheat areas for next season’s harvest have been placed at 55,000,000 acres. Total sowings for the harvest just garnered were 78,500,000 acres. Adhesion of growers to this plan is secured by reason of the Government’s assistance programme being made available only to those growers who accept the “ quota “ arrangement provided thereunder.

Townsville Post Office

Mr Martens:
HERBERT, QUEENSLAND

s asked the Minister representing the Postmaster-General, upon notice, -

What was the cost of the recent painting of the post office at Townsville?

Mr Perkins:
Minister without portfolio assisting the Minister for Trade and Customs · EDEN-MONARO, NEW SOUTH WALES · UAP

– The information is being obtained.

Charges for Radio Messages at Sea.

Mr Price:
BOOTHBY, SOUTH AUSTRALIA

e asked the Minister representing the Postmaster-General, upon notice -

  1. Has the Government reached anyagreement regarding the disparity which exists in the rates charged for radio messages for ships atsea, to Australia, and those to the United Kingdom ?
  2. If not, what stage in the negotiations has been reached?
Mr Perkins:
UAP

– The honorable member will be furnished with a reply to his inquiries as early as possible.

National Ihsorakce: Blind Employees - Names of Approved Societies.

Mr CASEY:
UAP

Y. - Yesterday, I promised the honorable member for East Sydney (Mr. Ward), in reply to a question he asked me, without notice, that I would obtain more specific information for him regarding the position of blind persons under the National Insurance Act. I now wish to amplify my former statement by saying that blind persons, if engaged in insurable employment, must be insured, but a special provision of the National Insurance Act - section 97 - provides that the pension payable to a blind person under the Invalid and Oldage Pensions Act will not be reduced in any way by reason of the benefits received under the National Insurance Act. A blind person, therefore, if insured and qualified, can draw, in full, health and pension benefits under national insurance, without diminution of the pension payable to him under the Invalid and Old-age Pensions Act.

On Friday, the 7th October; the honorable member for Werriwa (Mr. Lazzarini) asked if I would make available to the House a list of the names of approved societies formed in Australia under the national health and pensions insurance scheme. A number of copies of the list of societies to whom provisional approval has been given under the act up to the 30th September, 1938, has been laid on the table in the Library.

Cite as: Australia, House of Representatives, Debates, 13 October 1938, viewed 22 October 2017, <http://historichansard.net/hofreps/1938/19381013_reps_15_157/>.

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