House of Representatives
10 December 1940

16th Parliament · 1st Session



Mr. Speaker (Hon. W. M. Nairn) tookthe chair at 2.30 p.m., and read prayers.

page 676

KALGOORLIE DIVISION

Return to Writ

Mr SPEAKER:

– Ihave to announce that I have received from His Excellency the Governor-General, a return to the writ which His Excellency issued on the 17th October, 1940, for the election of a member to serve for the electoral division of Kalgoorlie, in the State of Western Australia, tofill the vacancy caused by the death of the Honorable Albert Ernest Green, and that by the endorsement on the writ it is certified that Herbert Victor Johnson has been elected in pursuance of the said writ.

Mr. Herbert Victor Johnson made and subscribed the oath of allegiance.

page 676

QUESTION

MILITARY OPERATIONS IN MIDDLE EAST

Mr MENZIES:
Prime Minister · Kooyong · UAP

by leave - As honorable members have doubtless heard, various items of news have been broadcast during to-day with respect to military operations in the Middle East. The Government is not yet in a position to state authoritatively whether Australian forces have been engaged, and if so to what extent; but I think it proper that

I should place before honorable members the news that has already arrived in relation to the matter from the Dominions Office.

Speaking in general terms about the British forces, and not about any particular force, the cables just received indicate that a successful attack was carried out by our forces in the western desert of Egypt on the 9th December last, 500 prisoners and material being captured on the first objective. The enemy reaction was reported to be slight. One Italian general was killed, and the second in command was captured. Various places have been captured, and are being “ mopped “ up. At the time of the sending of this cable, it was anticipated that the number of prisoners might be considerably larger than had been disclosed. It was further indicated that, at the time of the sending of the cable or the gathering of the news, our armoured forces were at a point astride the road 12 miles east of Bug Bug. There was very little enemy air activity, and operations were continuing. The news conveyed in this cable, taken in conjunction with broadcast news of perhaps a more speculative character, would appear to indicate that a very substantial victory has attended the operations of British arms in the Middle East.

Later:

Mr McCALL:
MARTIN, NEW SOUTH WALES

– Did not the Prime Minister say on a previous occasion that before Australian troops would be engaged in an action in the Middle East, the Commonwealth Government would be consulted, and its permission obtained ? In his statement this afternoon, the right honorable gentleman indicated that he was not aware whether Australian troops were engaged. Could it be possible that Australian troops are at present engaged in the battle and that the Government has not yet been notified of the fact?

Mr MENZIES:
UAP

– What I previously told the House, and what I take leave to repeat, was that the arrangement between the Commonwealth and the British Governments was, and ia, that Australian troops will not be placed in any theatre of war without reference to this Government. That, of course, is eminently proper; but once Australian troops are in a theatre of war, as those in the western desert have been for some time, it would appear very strange indeed if, before they could be engaged, consultations had to take place between the two Governments.

page 677

QUESTION

INCOME TAX

Incidence on Shearers.

Mr ROSEVEAR:
DALLEY, NEW SOUTH WALES

– Have representations been made recently to the Treasurer with regard to the incidence of income tax on shearers and other seasonal workers, and to the effect which the weekly levy will have upon their wages? If so, has the ion ora bie gentleman determined what method shall be adopted for the collection of this tax?

Mr FADDEN:
Treasurer · DARLING DOWNS, QUEENSLAND · CP

– The Commissioner of Taxation has this matter under review, and it will be attended to in the instalment plan that is shortly to be brought down.

page 677

QUESTION

TOWERS FOR RADIO BEACONS

Mr BARNARD:
BASS, TASMANIA

– Some- time ago it was found that steel towers for radio beacons had proved unsatisfactory, and ‘it was decided to replace them with wooden towers. Can the Minister for Air give’ me any information as to what progress has been made with the replacement of steel towers by wooden towers ?

Mr McEWEN:
Minister for Air · INDI, VICTORIA · CP

– I am not able to give to the honorable member specific information as to every case in which wooden towers have been substituted for steel towers. I understand, broadly, that in every principal airport the erection of wooden towers has been commenced, and that in fact the work has been completed at every airport with the exception of those at Western Junction and Hobart. Both of these will shortly be completed, and the original plan will then be in full operation.

page 677

QUESTION

SHIPPING LOSSES OFF AUSTRALIAN COAST

AERIAL Reconnaissance.

Mr HUTCHINSON:
DEAKIN, VICTORIA

– In view of the serious shipping losses off the Australian coast, is the Minister for Air satisfied with the present aerial reconnaissance work of the Royal Australian Air Force? If not, will the honorable gentleman consider the extension of these reconnaissances, even though that may entail further curtailment of commercial air services in Australia?

Mr McEWEN:
INDI, VICTORIA · CP; LCL from 1940; CP from 1943

– Every one concerned would be pleased if our seaward aerial patrols could be more widespread than they are at present. I am satisfied that in the circumstances the best use is being made of the aircraft of a suitable character which is available for seaward patrol. That is to be interpreted as indicating that the reconnaissance area is much wider than is generally known and believed. The honorable member also asked whether it would be advisable to impress more civil aviation aircraft for reconnaissance work of this kind. More use has been made of civil aircraft for this purpose than is generally known, and consideration is being given to the possibility of making even wider use of them.

page 678

AIRCRAFTMAN” REED

Trial by Court Martial.

Mr FORDE:
CAPRICORNIA, QUEENSLAND

– Is the Minister for Air yet able to make a report to the House on the result of his investigations of the discharge from the Air Force of Aircraftman Reed for having made a com-; plaint to a Minister of the Crown regard-, ing the working of the department f

Mr McEWEN:
CP

– I am not yet in a position to make a statement on every aspect of the matter, but I am able to give to “the honorable member some further’ information. I find on inquiry that this aircraftman wrote a letter to a Minister. That letter was referred to the office of the then Minister for Air, my predecessor, who, in turn, asked the appropriate officers of his department to report upon it. For the purpose of obtaining full information, the’ letter was referred through the usual channels to the officer commanding the aircraftman’s unit. The officer, discerning a breach of Air Force regulations in the writing of the letter, charged the writer. Then, the accused having been charged under certain regulations, the fact was properly brought to. his notice that he could elect to be dealt with summarily, or be tried b.y court martial, and he chose the latter course. The finding of the court martial is known.

Mr Forde:

– ‘What was the personnel of the court martial ?

Mr McEWEN:

-I cannot say, but if the honorable, member is. interested, I shall supply him with the names, later. I have no doubt that the members of the court were selected in the ordinary way. I am still trying to find out how an inquiry, originating in a Minister’s office, should have concluded in a man being charged, without the knowledge of the Minister or of any one in his office. I think it will be sufficient for me to say that I do not regard such a state of affairs as satisfactory. It is not a matter which I need bring back to this House again, but I propose to take further steps in regard to it. The honorable member for Barker (Mr. Archie Cameron) yesterday asked me how it happened that a man had be.en charged before a court martial without the knowledge or- consent of myself as Minister. I find upon inquiry that it is not within the province of any Service Minister to order or to deny a court martial. Such matters are determined within the Service according to certain regulations.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA

– Under whose warrant or authority was the court martial in this case constituted or convened? What was the status of the court, and who confirmed its findings, and the sentence it imposed? Since the Minister has examined the regulations in the Library, will he explain who acts for His Excellency the Governor-General in these matters as laid down in the Defence Act?

Mr McEWEN:
INDI, VICTORIA · CP; LCL from 1940; CP from 1943

-I have not studied the regulations, but I asked the appropriate officers of my department to inform me on the subject. I am advised that the source of authority in the case of all courts martial is the King, who delegates his authority in Australia to the Governor-General, who, in turn, acting within his competence, delegates his authority to initiate courts martial to certain other persons. In this particular case, it was the officer commanding the Central Area who, as the person to whom the Governor-General had delegated his authority, authorized the holding of the court martial. I am not able to. say what authority confirmed the finding of the court, but I understand that it was the Air Board, or some high authority in the Service. I shall find out who it was, and let the honorable member know.

Mr ARCHIE CAMERON:

– Will the Prime Minister say whether tho Governor-General, to whom certain power

Ls delegated by His Majesty the King, is able, as in a court martial, to take certain action in respect of the rights and liberties of Australian citizens without the advice and consent of his responsible Ministers?

Mr MENZIES:
UAP

– If the honorable member will furnish me with a copy of the question, I shall supply an answer.

Mr POLLARD:
BALLAARAT, VICTORIA

– In view of the obviously harsh treatment meted out to Aircraftman Heed for the minor offence of writing to Ministers and members of Parliament, will the Prime Minister give immediate instructions that no other members of the Royal Australian Air Force in Australia shall be courtmartialled for bringing their grievances under the notice of Ministers or members of Parliament?

Mr MENZIES:

– So broad a rule cannot be laid down. I have had some experience of matters of this kind, and my attention has occasionally been directed to the fact that some breach of service rules has been involved in a communication to me. My own practice has always been that where the complaint touches on general matters of importance, one can scarcely deny to the man, because he is a soldier, the right to have his complaint ventilated. In such circumstances I have waived any such proceedings against him. If, however, the complaint relates to a purely individual matter which can be dealt with through the proper military channels, my own practice has been to remit it to the soldier so that he may adopt the proper procedure.

Mr RANKIN:
BENDIGO, VICTORIA

– Will the Prime Minister instruct his Ministers not to be unduly influenced by people who, for political reasons, appear to be trying to undermine the authority of commanding officers of our armed forces, and thereby destroy the magnificent battle discipline for which the Australian forces have a world-wide reputation ?

Mr MENZIES:

– I can assure my friend that I am always endeavouring to persuade my Ministers not to be unduly influenced by anybody but myself.

Mr FORDE:

– In view of the farreaching indignation caused by the highhanded action of certain officers of the Royal Australian Air Force in bringing about the discharge of Aircraftman Reed for having written a letter to a Cabinet Minister, will the Prime Minister give an undertaking that he will reconsider the whole question with a view to the re-admission of Aircraftman Reed to the Royal Australian Air Force, and to bringing the control of that force more directly under the Minister?

Mr MENZIES:

– I am not prepared to give any such undertaking. I have confidence in the administration of the Department of Air by my colleague the Minister, and I shall leave it to him.

page 679

QUESTION

SALES TAX

Mr GUY:
WILMOT, TASMANIA

– Is the Treasurer able to say what flat rate sales tax would be required to raise the same amount of money as that proposed to be raised under the sales tax proposals of the budget?

Mr FADDEN:
CP

– It would be useless to answer that question. The Government has decided upon differential rates, and the necessary measures are already before the House.

page 679

QUESTION

OIL CARTEL

Mr FALSTEIN:
WATSON, NEW SOUTH WALES

– Is it a fact that the oil cartel has refused to supply Dunlop and Company after to-day unless that firm pays £5,000 to the cartel? Is it also a fact that this firm supplies the Commonwealth Government and the Government of New South Wales with petrol at lid. a gallon less than the price charged by the major oil companies? Is it a fact that the Premier of New South Wales, Mr. Mair, made representations to have Dunlop and Company excluded from the cartel to the extent to which it supplied the State Government, and that that proposal was rejected, although it applies in respect of petrol supplied to the Commonwealth Government? If these are facts, will the Minister for Supply and Development issue an immediate instruction to the oil cartel to withhold action until the merits of the case have been examined, and will ha give an assurance that the Government of New South Wales will be afforded the same opportunity to effect savings on the purchase of petrol as are enjoyed by the: Commonwealth Government?

Mr SPENDER:
Minister for the Army · WARRINGAH, NEW SOUTH WALES · UAP

– In view of the suggestions implicit in the honorable member’s question, I shall discuss the matter immediately with the Minister for Supply and Development, ascertain what the facts are, and see what action is appropriate. I shall then furnish the honorable member with a reply.

page 680

QUESTION

BRITISH SCHOOL CHILDREN

Mr MORGAN:
REID, NEW SOUTH WALES

– Has the attention of the Prime Minister been drawn to the fact that 67,000 school children are running loose in the streets of London during the day without education, and spending the nights in air-raid shelters? Will he communicate with the Government of the United Kingdom and, possibly, with the Government of the United States of America also, with a view to having those children conveyed to safety in Australia or elsewhere?

Mr MENZIES:
UAP

– I shall make inquiries into the matter.

page 680

QUESTION

SWAN BY-ELECTION

Mr MARTENS:
HERBERT, QUEENSLAND

– I have seen a re port in the press to the effect that the Prime Minister intends to travel by air to Western Australia about the end of this week. Will the same facilities be afforded members of the Labour party who desire to visit Western Australia to take part in the Swan by-election campaign?

Mr MENZIES:
UAP

– He would be a wiser man than I profess tobe who could say whether I shall be leaving, by air or otherwise, for Western Australia at the end of this week. That will depend entirely upon the progress achieved in disposing of the business before the House. Whether I travel by air or otherwise will depend on circumstances, and whether any privilege should be claimed in respect of such travel I do not offer to say. My own practice, when undertaking election campaigning, is to bear the cost of travel myself.

page 680

QUESTION

TRANS-AUSTRALIAN RAILWAY

Mr DRAKEFORD:
MARIBYRNONG, VICTORIA

– Has the Minister representing the Minister for the Interior yet obtained replies to questions which I asked on two occasions last week about difficulties and delays in securing bookings on the trans-Australian railway until next year, and the alleged shortage of locomotives and rolling-stock? If he has not yet obtained the answers, can he offer any explanation of the delays, other than the unsatisfactory state of affairs which has been allowed to develop by the administration ?

Mr COLLINS:
Minister without portfolio assisting the Minister for the Interior · HUME, NEW SOUTH WALES · CP

– The information which is sought by the honorable member is being obtained.

page 680

QUESTION

INDUSTRIAL DISPUTE AT WHYALLA

Mr BADMAN:
GREY, SOUTH AUSTRALIA

– Has the Minister for Labour and National Service received a request to intervene in the strike at Whyalla ? If so, will he inform me whether any progress towards a settlement has been made ?

Mr HOLT:
Minister for Labour and National Service · FAWKNER, VICTORIA · UAP

– To date, I have received no request to intervene in the dispute at Whyalla. The general secretary of the Ironworkers’ Union communicated to me yesterday three grounds on which the men were prepared to resume work. The dispute occurred as the result of the dismissal of a man named McLean, an ironworkers’ assistant, and it was suggested to me that the men would resume work if an inquiry into the circumstances of the dismissal were commenced on the same day. A further condition was that McLean should be reinstated pending the decision of the inquiry. I conveyed those conditions to the management of the company, which promised to discuss them with its industrial officer, and to communicate with me later. I understand that the industrial officer, who was in Adelaide at the time, will get in touch with me this afternoon. Other than that, I have no information about the matter.

page 680

QUESTION

INVALID AND OLD-AGE PENSIONS

Mr JAMES:
HUNTER, NEW SOUTH WALES

– The Advisory War Council recommended an immediate increase of invalid and old-age pensions by 1s. a week, with subsequent automatic adjustments in accordance with fluctuations of the cost of living. Will the Prime Minister inform me whether an increase in addition to the shilling will be granted immediately on account of the increased cost of living? Is it proposed to adopt the index figure for the prices of commodities which ruled at the outbreak of war, or will the automatic adjustments be based on the index figure ruling at the date on which the pensioners receive the increase of1s. a week?

Mr MENZIES:
UAP

– The arrangement, which was reached by the War Council, was that the adjustment should be made on the basis of the index figure ruling at the present time, and not on the basis of the index figure ruling at the beginning of the war. The reason was that the sum of 21s. represents not only an increase to the cost of living since the outbreak of war, but also something more, and consequently when 21s. was adopted it was decided to base it on the cost of living at the present time, and to make future adjustments on that basis.

page 681

HOUR OF MEETING

Motion (by Mr. Menzies) agreed to -

That the House, at its rising, adjourn until 10.30 a.m. to-morrow.

page 681

NEW AND OPPOSED BUSINESS AFTER 11 P.M

Motion (by Mr. Menzies) - by leave - agreed to-

That Standing Order No. 70 - Eleven o’clock rule - be suspended for the remainder of this month.

page 681

QUESTION

DEPARTMENT OF THE ARMY

Mr CALWELL:
MELBOURNE, VICTORIA

– Has the attention of the Minister for the Army been drawn to an announcement in the press to-day of a 7-point programme, which purports to represent his views on the future control and administration of his department? If the paragraph be correct, will the Minister take action to ensure that matters of such moment are not first announced in the press while Parliament is in session ?

Mr SPENDER:
UAP

– The administrative organization of the Department of the Army has, of course, been engaging my attention. I am not responsible for the statement which appeared in the press, although it does substantially, with certain modifications, represent opinions which I have reached and, in part, have implemented. My practice has always been to mention in Parliament any general statement which I am of the opinion should be made to the House on decisions of public importance, and to that practice I shall adhere.

page 681

QUESTION

CANBERRA: PRICE OF GRAIN

Sir CHARLES MARR:
PARKES, NEW SOUTH WALES

– A complaint has been made by poultry-farmers and others in Canberra about the extortionate price of 7s. a bushel which they have to pay for wheat. Will the Minister for Commerce say whether it is a fact that all wheat grown in the Canberra district is, on the instructions of the Australian Wheat Board, shipped to Sydney, whilst wheat produced in Carcoar, and. in the far west of New South Wales, is sent here to supply the requirements of poultryfarmers in the Australian Capital Territory ?

Sir EARLE PAGE:
Minister for Commerce · COWPER, NEW SOUTH WALES · CP

– I shall inquire into the origin of the wheat which is used in Canberra, and inform the honorable member.

page 681

QUESTION

AEROPLANE PARTS

Transport by Road.

Mr DEDMAN:
CORIO, VICTORIA

– Is the Minister for the Army aware that, although there are wharfs within a few hundred yards of the aeroplane assembly park of the International Harvester Works at Geelong, large consignments of parts are conveyed by road from. Melbourne to the place of assembly? Will he arrange to eliminate the wasteful use of petrol which is involved in this unnecessary kind of transport ?

Mr SPENDER:
UAP

– The answer to the first part of the honorable member’s question is, “ No “. As to the second part, I. shall have investigations made and convey my reply to the honorable member.

page 681

QUESTION

RELIEF OF NECESSITOUS PRIMARY PRODUCERS

Mr SPOONER:
ROBERTSON, NEW SOUTH WALES

– Recently the Government decided to make available the sum of £1,000,000 for the relief of necessitous wheat-growers in drought-stricken areas. Will the Treasurer discuss with the members of the Cabinet whether this money could be equitably made available to all primary producers, including dairyfarmers who have suffered during the present drought?

Mr FADDEN:
CP

– The grant of £1,000,000 is being made for the relief of distressed wheat-growers and that policy will be adhered to.

page 682

QUESTION

AUSTRALIAN IMPERIAL FORCE

Christmas Leave

Mr GUY:

– In connexion with the Christmas leave to be granted to members of the Australian Imperial Force in Australia, will the Minister for the Army make efforts to ensure that accommodation is made available on boats for Tasmanian soldiers on the mainland who are desirous of visiting their homes during the Christmas season?

Mr SPENDER:
UAP

– I shall be glad to give consideration to the request, and to convey a reply to the honorable member.

page 682

QUESTION

PRIMARY PRODUCTS: SHIPPING AND STORAGE

Mr CLARK:
DARLING, NEW SOUTH WALES

– Is the Minister for Commerce giving consideration to the fullest possible use of shipping in Australia, and also to the storage of primary products which cannot be shipped abroad because of the shortage of shipping space ?

Sir EARLE PAGE:
CP

– On Friday last, representatives of the various shipping interests in Australia conferred in regard to the shortage of shipping. The problem of storage is engaging the attention of the various committees and boards set up to control the export of primary products. They are very much concerned in the matter, and various projects are being carried out.

page 682

BUDGET 1940-41

In Committee of Supply:

Consideration resumed from the 9th December (vide page 632), on motion by Mr. Fadden -

That the first item in the Estimates under Division I. - The Senate - namely Salaries and allowances, £8,176 “, be agreed to.

Mr BEASLEY:
Leader of the Australian Labour party - nonCommunist · West Sydney

– The debate on the first item of the Estimates has covered a very wide field, and much of the criticism from both sides of the committee has been directed towards the methods which the Government intends to employ in order to raise sufficient revenue to meet the rising costs of war and the other expenditure necessary for the conduct of the Government’s affairs. Although the criticism in this committee has been very marked, I think: it is safe to say that the criticism outside has been much more violent and that consternation exists in the ranks of the people who will find the- burdens of increased taxes very difficult to carry. Very grave responsibility must necessarily rest upon us all in dealing with this subject, and it is incumbent on us in criticizing the budget to make constructive suggestions and to offer alternative means of obtaining the necessary revenue to enable Australia to play its part in bringing the war to a successful conclusion. The supplementary legislation that is to follow the budget defines fairly clearly the sources to be tapped in order to obtain this increased revenue. Members of the Opposition have always been strongly opposed to the very steep impositions on the earnings of those in the lower and middle income groups. It will be agreed that this view is held, not only by what might be termed our own direct supporters, but also by the business community as a whole. In recent years people have come to realize that business in this country cannot be successfully conducted unless purchasing power is available in the hands of the masses. Consequently it is feared that the inroads to be made upon the earnings of the people on this occasion will prove so harsh as to have a detrimental effect upon the community as a whole, and, in short, impose upon Australia a form of deflation which will bring about an effect the very opposite from that which the Government hopes to obtain. This matter is so serious that the Opposition has endeavoured, by every process available to it, to get the Government to alter its proposed course of action. It is not for me to disclose in detail the nature of the discussions that have been proceeding for some weeks, in certain quarters, on this subject ; but I think that my colleagues on the Advisory War Council would probably agree with me that the Government could well have given more favorable consideration to views that were submitted to it in Melbourne several weeks ago with the object of spreading the burden of taxation more evenly over the community. Our desire is that the main weight of the burden shall fall upon the shoulders of those best able to bear it. However, the Government no doubt feels that it is in duty bound to stand by its financial programme. At any rate, for some time it remained adamant, and refused to make any concession to our views.

Mr BRENNAN:
BATMAN, VICTORIA · ALP; FLP from 1931; ALP from 1936

– More discussion in Parliament and less discussion in private would probably be in the public interest.

Mr BEASLEY:

– No doubt the Opposition was represented at the discussions to which I have referred, because the majority of its members wished it to be represented. As to how long the present procedure will continue, I can only say that that will depend upon the parties concerned,

We have been, greatly exercised in our minds by the effect of the Government’s proposals upon incomes in the lower and middle ranges. Reference to the schedules circulated to honorable members will show that the tax falls very heavily on those incomes. This must inevitably have the effect of lowering the standards of living of the people, and of impairing their capacity to meet commitments into which they have already entered. It is proposed, for example, to obtain about £2,500,000 from people in the low income range, and something more than E8.000,000 from people in the middle income range, making a total of about £13,000,000 from these groups during six months of the financial year, or £26,000,000 during a full year. That is a very large sum of money to take from people of those classes. Moreover, the diverting of this money into the coffers of the Government, must necessarily mean that it will not be available for the purchase of the necessaries of life or the amenities which such people regard as their right. Retail businesses will therefore suffer severely. It is quite clear to me that the Government’s policy will cause a slackening of business and a consequent slackening of employment. So we shall be moving once again in a vicious circle, particularly in New South Wales.

It should be practicable for the Government to obtain the money it needs from other sources. The basis of our economy should not be undermined, by such heavy- taxation on these lower income groups. I am well aware from my personal contact » with the people in the low and middle income ranges that they are looking to the future with grave misgiving. They cannot see how it will be possible for them to meet their commitments and maintain anything near the standard of their family life. During the last two weeks many statements published in the press have revealed the dismay which the Government’s proposals have caused to people in the low and middle income ranges. When we turn our attention to the particular commitments that have been entered into by these people we must immediately, for instance, ask ourselves whether it will be possible for some of them to continue to educate their children on the present basis., All honorable members will, I am sure, agree that it is desirable that the young people of our community should be afforded the best possible education, but if the earnings from which the cost of education has hitherto been met be depleted “by heavy taxation, less will be available for educational purposes. Some honorable members may say that the children could be educated in establishments, where fees are not payable, but that does not get over the fact that many people have considered that in view of their financial position, they were justified in providing for their children a higher standard of education by their enrolment in technical and other higher educational institutions. It will be unfortunate if the work of such institutions is seriously hampered by the Government’s budget proposals. Any curtailment of expenditure on education must, in the long run, be detrimental to both community and family life. Many of my own acquaintances are fearful, as one illustration, that they may not , De able to continue their present scale1 of expenditure, on education..

Another important commitment with many people has relation to the purchase of their homes. The inroads which the

Government is proposing to make on low and middle-range earnings, will undoubtedly affect the capacity of people to continue to meet such payments. Some of them, I have no doubt, will have to forego entirely all such payments, with the prospect of serious loss, to themselves.

I have referred to only two avenues of expenditure out of many that could be brought under notice, but these two are of sufficient importance to justify our request that the Government should review its proposals in respect of low and middle range incomes, with the object of raising larger amounts from other sources. It may be asked what other sources may be tapped. I suggest, without any hesitation, that the Government could obtain much more revenue than it is proposing to get from the war-time profits tax. A committee of honorable members is at present investigating this subject. The bill which the Government introduced many months ago on this subject was seriously deficient in certain respects. Even now it is intended that only between £4,000,000 and £5,000,000 shall be raised from the proposed war-time profits tax. A good deal of discussion is proceeding at the moment on this issue. Many people consider that the tax could be levied in a much more balanced fashion than that proposed by the Government, in order that all profits in excess of a certain percentage may be drawn upon equitably. It has been suggested that a fiat rate tax of ls. or 2s. in the £1 should be imposed. Many persons competent to express an opinion believe that companies earning substantial profits could well afford to pay a war-time profits tax of 2s. in the £1, in order to assist, to meet the cost of the war, and other pressing needs of the Government. It has been stated that of the aggregate profits that are being made in Australia by public companies, at least £100,000,000 could be taxed without any hardship at all to the companies concerned and an additional £3,000,000 could be obtained from this source. During recent years the profit level of public companies has been steadily rising. One of the Sunday newspapers of Sydney this week published a report of the affairs of Mauri Brothers and Thomson Limited which gives an indication of the high rate of profits made by trading concerns -

Mauri Brothers and Thomson maintains its record. Shareholders again received 15 per cent., and for the fifth consecutive year. This company appears to thrive under trade difficulties. The present war has not even slowed up its profit earning capacity. On the contrary some of the figures indicate even greater expansion of profit making interests. Net earnings for the year, after snipping off £11,110 for depreciation, and an unspecified amount for taxation, are set out at £92,579. The directors were able to pay the dividend, £58,173, with the greatest of ease and still carry £34,000 to the box wherein reserves are stacked, which now holds £352,000.

This firm is of no great importance in the field of big business, as we understand the term, but the facts I have quoted prove that great profits are available for taxation by the Commonwealth for war purposes. A heavier burden of taxation could be carried by big companies with greater ease than the small income earners, without affecting the economic security of the nation. The low income earners have a very sound argument with which to justify their objections to the proposed new taxes; it is that the Commonwealth Government should have due regard for the sacrifices that they have made in the last nine or ten years. Many of them suffered considerably from the effects of the depression of 1929-31, which was brought about by circumstances over which they had no control. They also suffered in order to assist the economic recovery of the nation in the years immediately after the depression. Sacrifices by these people cannot be measured justly in the terms of sacrifices made by the richer sections of the community. A deduction of ls. a week from the income of a basic-wage earner is a greater loss to bini than is a deduction of £1 a week to a wealthy man. These facts should help the Government to reach a better appreciation of the living conditions of the poorer people and explain their feeling of resentment of the proposed impositions. The burden which they are asked to carry might well be lightened by the collection of heavier taxes from big business concerns, which could pay the imposts without undue suffering. In the final analysis the people in the higher income range will benefit more from the success of our armed forces than will persons in the lower and middle incomes. I do not suggest that the people on lower incomes are less concerned about the result of the conflict than are others, but we must remember what happened during and after the war of 1914-18. Many of the poorer people took an active part in that struggle, and afterwards they had to make further sacrifices in order to pay for post-war reconstruction. Many of those who did not take such an active part, the captains of industry, emerged from the conflict much richer than they were before the war. The memory of those years is still fresh in the minds of hundreds of thousands of Australians, and it is not possible to convince them that the money which they are to be asked to contribute to our war effort cannot be obtained from other sources. They are justified in demanding that they be not called upon to pay more than they have paid in the past. The working class is the pivot around which our national economy revolves, and it is not fair that the standards of living of the workers should be impaired by means of the deflationary processes proposed in the budget.

I draw attention to other sources from which the Government can obtain special war-time revenue. Much more can be obtained from the company tax than is proposed. I hope that, as the result of discussions in this committee, the Parliament will agree to shift the burden from the lower income earners to those persons and institutions to which I have referred. It is still possible for this Parliament to remove the deflationary proposals from the budget and preserve equilibrium in our national finances. Another potential source of new revenue is the estate duty. This suggestion has been made before, but the time is opportune to renew it. More revenue could be obtained by means of higher taxes on the estates of deceased persons, particularly of those who were in the high income group. State duties on these estates are high, but they are not so high that it would be impossible for the Commonwealth to secure an additional £500,000 per annum from this source. The Government should not be afraid to take action in this connexion. Another suggestion, which may not be popular among honorable members sup porting the Government, is that the land tax be increased. Sixty-five per cent, of this tax is paid by the owners of city properties. I have often heard it said in this chamber that the land tax bears too heavily on struggling farmers. but an examination of the facts does not substantiate that claim. Property up to an unimproved value of £5,000 is not subject to the tax and I should be happy to increase the exemption, if it were proved that small land-holders could not afford to pay the impost. But big land-holders can afford to pay a much higher tax I may be told that the tax has been increased in recent years. But, for six or seven years, governments of the same political colour as the present Government had gradually reduced the rate of land tax by 50 per cent. Those progressive reductions meant savings of thousands and thousands of pounds to big retail business establishments in Sydney and other capital cities. An examination of their balance-sheets will substantiate that statement. This was what might be called a free gift to firms which could easily have continued to bear the full burden. Taxpayers in the lower and middle income groups feel that the nation’s financial resources could have been strengthened sufficiently to enable our war commitments to be met, if these persons had been made to carry an appropriate share of the burden, from which for many years they had been allowed to escape. They are acutely alive to the fact that, concurrently with the reduction of the land tax by 50 per cent., they have had to struggle to maintain themselves and their families. Many of them have been unemployed or have been employed only part-time on relief work. Yet, having reached what may be described as the end of the road in the crisis through which we are passing, the Government, needing to raise £186,000,000 for defence expenditure, further burdens those who have never really had their heads above water in the last ten or twelve years. The land tax could be restored to the level of 1920-21. The greater part of it is collected from retail firms which have been paying hig dividends, such as Mauri Brothers and Thompson. These could readily carry an additional burden in this time of war. The protection which this budget secures for me and my family extends also to the material assets of the rich. If, by our air defence organization, the bombing of our cities can be prevented, there will be a saving not only of lives, but also of the property of these hig firms, and they ought to be willing to pay what may be regarded as a premium for that insurance. There is scope for the collection of an appreciable additional amount in the form of land tax.

Mr Archie Cameron:

– Bombs would fall also on those who have an exemption of £5,000.

Mr BEASLEY:

– I have admitted that ; the; wealthy should make a special payment, for the safeguarding of their property and goods.

The next matter to which I shall refer is the exemption from tax of certain Commonwealth securities. I may be told that, a contract with respect to these was entered into, and that, therefore, action should not be taken which would cause tha Government to be accused of repudiation.

Mr Conelan:

– What about future loans?

Mr BEASLEY:

– I could argue at length in regard to the effect which repudiation might have on the money market when loans had to be floated in the future. We are told that the financial system is a remarkably delicate instrument, and that the sanctity of a contract embodying a financial arrangement must always be treated as inviolate, but the sanctity of contracts made with those who are in the lower and middle income groups is regarded in an altogether different light. It has always appeared to me that one principle has been adopted with respect to one section of the community, namely, those who gamble in finance, and quite a different principle with respect to other sections. I am prepared to deal with the problem in as practical a way as possible. I would not ask the Government to indulge in repudiation in relation to the contract that has been made with certain bond-holders, but at least it should endeavour to obtain the voluntary conversion of those loansso that income from such holdings might be placed on the same tax able basis as every other asset or investment. What right have Commonwealth bond-holders to remain on the tax level fixed in 1931, seeing that since that date other income earners have had their taxes increased by up to 40 or 50 per cent.? What claim have they to special treatment, compared with the men who have invested in property, in business, or in manufacturing operations ?

Mr Hutchinson:

– Their return is lower than is obtained from good indus-trial investments.

Mr BEASLEY:

– In some cases it may be lower. The point that I make is, that they hold a gilt-edged security which does not involve them in any risk. I have always maintained that the man whose investments are in the field of development, either in business or in manufacturing operations, should be encouraged, because he takes the risk, frequently for a period of years, of having little or no return, and is subject to all the dangers which trade has to meet by reason of the varying conditions of the markets in which he operates. Those who deal in government securities are not subject to similar conditions.

Mr Paterson:

– It is a pity that it wa3 not thought advisable in 1930 or 1931 to limit the exemption to peacetime.

Mr BEASLEY:

– -That is true; it would have been a just and reasonable basis on which to deal with these bondholders. Some of the holders of these securities are in a big way. While some men are giving their lives, and others are giving all that they possess in the workshops or in the development of this country, we are entitled to say to the Government, as the honorable member for Gippsland (Mr. Paterson) has rightly suggested, that the situation to-day is entirely different from what it was when these contracts: were made. The whole world has changed. Australia now has its .back to the wall. What was done in 1931 cannot prevail in 1941. It is our duty to place on the shoulders of all the burden of meeting the cost of the war. The loyalty of these bond-holders might very well be tested by their being asked to give to the Government the right to make conversions of their holdings, so that they might have an opportunity to share the burden that is being placed on the rest of the community.

Mr Bell:

– Tie majority of them have only moderate means.

Mr BEASLEY:

– I realize that many persons of moderate means have invested in these securities, but the greater number is, undoubtedly, in the more well-to-do classes. The following table gives the amount of tax paid by persons in different income groups, including those who have income from Comonwealth securities that are free from Commonwealth taxes as well as from other sources, and those whose income is derived solely from personal exertion : -

The margin is too great, and it should not be maintained, because we are facing a situation the like of which we have not faced previously in our history. What the future holds in store in this field I do not know, but I believe that this is a source of revenue which should be tapped in a practical way. The Government should approach those who hold these securities, and frankly put them on their mettle to prove whether they desire to serve their country. I predict that the majority of them would be willing to meet the wishes of the Government.

Another source that might well he tapped is that covered by the petrol tax. The agreement between the Commonwealth and the States with respect to the distribution of the amount collected by means of this tax is susceptible of alteration. This money was largely ear-marked for the construction of roads, the principal object toeing to provide employment for a large number of unskilled workers whom the States had had to carry for a number of years. This was a very laudable object, with which no one will disagree. But circumstances are daily arising in connexion with even the building of roads which bring the matter more and more within the realm of defence organization. Week after week, in each of the -States, numbers of men who were formerly employed on this work are being transferred to munitions establishments and other defence activities. At least, a portion of the money now being collected .by means of the petrol tax could be used .’by the Commonwealth to provide employment which would have a distinct defence value, and at the same time meet the desires and the interests of the States, because they would be relieved of the burden of having to carry these men when they were unemployed. Our budgetary position would thus be considerably strengthened. It is true that the matter is covered by agreement with the States, but- we cannot afford to “ sit pat “ on such agreements at a time like this. The main responsibility for the finances of Australia rests now upon the Commonwealth, and adjustments must therefore be made with the States when necessary. We are rapidly approaching a position in which the Australian people will demand, not seven budgets, but only one, in order to avoid waste and overlapping. Unfortunately, there seems to be considerable reluctance to tackle this problem, but drastic alterations will have to be made, and it would he well to begin now.

Some time ago, a duty was imposed upon motor-car parts in order to build up a fund for the encouragement of the manufacture of motor-car engines in Australia. The Labour party supported that proposal because it wanted to foster an Australian industry. However, since then our expanding defence needs have made it necessary to manufacture internal com’bustion engines in Australia for use in aircraft, so that the industry has now become established, even though the need for motor-car engines is admittedly not so great as it was. A considerable amount of money, probably about £1,250,000, has already been collected from this special duty ; unfortunately it was not paid into a special trust account, but into general revenue. One might say a good deal in condemnation of the Government for having dealt with the money in this way, but it is not of much use complaining about what has happened in the past; we must look at things as they are.

Section 44. of the Commonwealth Income Tax Act excludes from tax dividends paid by companies not carrying on business in Australia. The idea is that if a company pays tax on dividend* to some other government, it is not taxable here, but the act does not specify the amount of tax that must be paid elsewhere in order to qualify the company for this exemption. Evidently, the payment of even the smallest amount is sufficient. Some of the companies wh’ich come under this heading are Morris Hedstrom Proprietary Limited, H. Jones and Company Proprietary Limited, the Tasmanian jam company, Burns Philp (South Seas) Limited, Emperor Gold Mines, and New Guinea Gold. Others are those tin-mining companies operating in the East, amongst them such as Kampang, Rawang La rut, and Assam Tin. [Leave to continue given.] Practically all of the shares of these companies are held by residents of Australia’, but they are not liable to any tax. The shareholders enjoy the amenities of residence in Australia, and probably the capital with which they bought the shares was in the first place acquired in Australia, yet they pay no tax on the income derived. Whatever reasons may have existed in. the first place for excluding such income from taxation, those reasons no longer apply. Section 44 (2) b excludes dividends paid wholly and exclusively from income derived from sources outside Australia. Many Australian companies have markets in the Pacific Islands, in the East, and in New Zealand, but dividends paid from profits derived from those markets are wholly exempt. Some of the companies concerned are the Colonial Sugar Refining Company Limited, from its Fiji subsidiary; H. Jones and Company Proprietary Limited, from its island and eastern jam trade; Berlei Limited, from its New Zealand and islands trade; Broken Hill Proprietary Company Limited, from its overseas trade; and Burns Philp and Company Proprietary Limited, from its subsidiary known as Burns Philp (South Seas) Limited. Usually about 50 per cent, of the dividend of the Colonial Sugar Refining Company Limited is excluded as non-taxable. In the case of H. Jones and Company Proprietary Limited, 40 per cent, of the dividend is so excluded. Therefore, there is still a large volume of dividend income not subject to any tax at all. I do not think that any honorable member, no matter to what party he belongs, wants to see such companies as the Colonial Sugar Refining Company Limited and H. Jones and Company Proprietary Limited placed in a privileged position. The general consensus of opinion is that all those who are in a position to pay should be forced to pay.

Section 44 (2) c excludes dividends “ paid out of exempt income derived by a company from the working of a mining property in Australia or in the Territory of New Guinea to the extent to which the dividends are paid out of such income “. All dividends from Australian gold-mining companies are wholly exempt, and such companies as New Guinea Gold are also covered by the section. There seems no good reason to exempt gold-mining dividends, particularly as many of the shareholders are absentees. The Great Boulder Mine, for instance, is London-controlled.

Under section 45 of the act, Commonwealth bond interest is taxed only at the rate which would have applied to income derived by a taxpayer had he earned it in 1930. Thus, he obtains the benefit of the” low 1930 rate. This section extends the benefit of the rate to the proportion of the dividends paid from Commonwealth loan interest. Some of the banks pay from 20 per cent, to 40 per cent, of their dividends from Commonwealth loan interest. Thus, the Queensland National Bank pays 39 per cent, from this source, the Commercial Bank 22 per cent, and the National Bank 24 per cent. Insurance companies, trustee companies and shipping companies pay a considerable proportion of their dividends from Commonwealth loan interest, and all these dividends are taxed at the low rate prevailing in 1930. When the Treasurer was introducing the Income Tax Assessment Bill No. 2, he touched on the subject of rebates, and admitted that there was an anomaly in connexion with the rebate of 2s. in the £1 allowable on certain dividends. At present, the tax rebate is allowed at the rate of 2s. in the £1 on the whole of the dividend received, resulting in a loss of revenue amounting to 8d. in the £1 on that part of the dividend paid out of Commonwealth loan interest. It is now proposed to correct this anomaly. Thus, over a period of years, a considerable section of taxpayers has been receiving a concession to the value of 8d. in the £1 from Commonwealth revenue as an absolute gift. “We know that there are all sorts of loopholes by which taxpayers evade their just obligations, and we know that a great deal of revenue has been lost. I suggest that the special committee which is inquiring into the war-time profits tax, might extend its investigations so as to cover the general tax field, and it should have power to call for what evidence it thinks necessary. If it were possible to prevent all forms of tax evasion, it would not be necessary to increase taxation on the lower and middle incomes. I do not suggest that any member of this committee wants to see taxpayers escape their just obligations, hut these matters are very involved. Sometimes it is not possible for honorable members to grasp fully the details of tax legislation when under discussion in this committee. The task demands the attention of a skilled mathematician, and because of lack of knowledge on details, a section of the community has been evading the payment of large sums over a long period of yea rs.

Commonwealth bonds to the value of about £6,000,000 are free from any kind of tax. All bond interest is exempt from State taxes, including unemployment relief tax, and most of the issues bear interest at the rate of 3i per cent or 4 per cent. The Treasurer declared that he had adopted 14s. in the £1 as a reasonable limit to the effective rate of Commonwealth and State taxes. This rate is obtained by adding the maximum Commonwealth, and State taxes, but the computation is based on the fallacious assumption that a person’s total income is taxed, as it should be, whereas interest on bonds is exempt from State tax, whilst a large volume of dividends, such as disbursements by Emperor Gold Mines, are exempt from both Federal and State taxes. One class of dividend is also exempt from State taxation in New South Wales. Unless the rate exceeds 2s. 6d. in the £1, a taxpayer’s dividends are exempt. If the rate is more than that figure, he receives a rebate by paying tax at the 2s. 6d. rate. Even a taxpayer who has invested large sums in bonds and in companies such as the Colonial Sugar Refining Company Limited would not be taxed at the rate of 14s. in the £1. For example, a person might he in receipt of an annual income of £6,000 derived as follows: -

As the first five dividends are derived from sources outside Australia, they are exempt. In other words, £4,000 of the total income is not subject to tax. As 50 per cent, of the investment in the Colonial Sugar Refining Company Limited is also exempt, the taxable income will be reduced to £1,000. That disposes of the Treasurer’s contention that some incomes are subject to taxes amounting to 14s. in the £1. Persons in receipt of high incomes do not, and will not, pay that amount while the present exemptions are allowed.

The subject of bank credit has given rise to considerable discussion among Australians. Groups which earlier took little interest in the proposal, or which ridiculed it, are now prepared to accept the fact that bank credit is a source which should be tapped in order to finance a portion of the country’s colossal war expenditure. The matter in dispute is the limit to which bank credit may be safely employed. Whilst the Treasurer admitted that it has been and will continue to be utilized, he offered no statistical data to indicate the extent to which it has so far been used. The honorable member for Robertson (Mr. Spooner) mentioned the amount of £40,000,000 but I cannot vouch for the accuracy of his estimate. The fact remains, however, that bank credit is being employed, although the extent seems to be purposely concealed from the public. Those honorable members who sat in this chamber between 1929 and 1931 will recall the many discussions about the delicate nature of our financial machine, and the warnings that if Australia attempted to depart from the gold standard, its credit would be ruined. Long and heated debates took place upon the necessity for honouring the promise, which was printed upon the paper currency, to pay the bearer £1 in gold on demand, and I recall the dire forebodings of many people when that promise was withdrawn. If bank credits had been employed more liberally in 1931, Australians would not have suffered the poverty and distress that so many of them endured during the depression years.

Mr. CHAIRMAN (Mr. Prowse).Order! The honorable member has exhausted his time.

Mr HOLT:
Minister for Labour and National Service · Fawkner · UAP

– The latest major development of political and administrative organization in Australia since the outbreak of war has been the creation of the Department of Labour and National Service. No reference to this new department appears in the budget papers, because it was created after the printing of the budget. I propose to outline the functions of the department, and the organization which the Government desires to establish in order to implement such functions. Frequently this war is referred to as a “ total war “. This term suggests to most of us a struggle in which not only the men who actually bear the weapons are intimately involved, but in which the services of every able-bodied man and woman can tip the scales according to the degree of efficiency with which their services are applied for the purpose of exerting a maximum war effort.. The workers in the mines, factories, workshops, farms and offices, by increasing production, can be just as important in bringing the war to a successful conclusion as are those in the fighting services, who have the more spectacular and dangerous role of engaging in physical combat.

Recognizing the influence which the labour potential can exert the

Commonwealth Government has decided to establish a central organization that will make the most effective practical use of our resources of man-power and woman-power. The. marshalling of those resources- in order to obtain the maximum war effort for Australia, and a maximum degree of help and co-operation for Great Britain and the sister dominions, is the primary objective of the new department. If we are to achieve that aim, we must provide for a continuous supply of skilled workers for the rapidly expanding munitions programme and for the requirements of private industry, which has been speeded up to greater activity with the increased industrial tempo that has developed from war needs and activities. The task places upon Australia, with an enormous land mass populated by only 7,000,000 people, the responsibility of making the best use that it can of the limited resources of man-power at its disposal. In this highly mechanized war we must make greater provision than ever before from our own secondary industries for war purposes. The problem of the suitable placement and efficient training of men for industry is not new. Unfortunately, in the past it has not merited from federal governments the attention which its importance in our national scheme warranted. We have been inclined to declare that the technical training of young men and women is the responsibility of the States, and a matter with which we cannot concern ourselves.

Mr Blackburn:

– The United Australia party has repeatedly made such a statement.

Mr HOLT:

– I admitted my own conviction that previous governments have fallen into error in that respect. The problem must be treated as a national one. In the past the States have been handicapped by meagre financial resources, with the result that technical training and technical education have not been fully developed. The war has now forced the Federal Government to intervene. Accordingly, it. has assumed responsibility for the technical training of workers who are required for the munitions, production. Abnormal demands, which have been placed upon the Government to supply skilled technicians, have not yet been met in full, and the necessity for coping with them has brought the Commonwealth Government into the field of technical training to an extent which had never before been contemplated.

Mr DUNCAN-HUGHES:
WAKEFIELD, SOUTH AUSTRALIA · UAP

-hughes. - That is specialized training.

Mr HOLT:

– I agree, hut it is my personal opinion that the financing of technical education is a matter which no central government can ignore if it feels that the problem is not being properly dealt with by the States. The establishment of the new department will not cause overlapping with State activities. The programme, which has been adopted for technical education, has ‘been devised by Commonwealth and State officials, in consultation, and we are making use of State instrumentalities. In some instances, we have provided machinery and machine tools. In every respect, there is a high degree of amicable cooperation between officers of the Commonwealth Government, who administer the scheme, and officials of State technical departments. That principle of cooperation and close co-ordination must operate as the outstanding feature of the work of this department.

The principal functions of the new department relate to matters of general labour policy, man-power priorities, investigations of labour supply and labour demand, the effective placement of labour, technical training, industrial relations and industrial welfare, and planning for post-war rehabilitation and development. The actual organization of this department as an administrative machine is being undertaken at present. The- administrative headquarters and the central secretariat will be established in Canberra. Although, at the moment, certain difficulties of accommodation have , to be overcome, we propose -gradually to establish around that organization other divisions of the department The central administration will concern itself with matters of administration and general policy, man-power priority, particularly in relation to men coming under the national register, and employment research. As honorable members are probably aware, a section which has been functioning in Canberra under the Commonwealth Statistician has been engaged for the last twelve months on matters of employment _research. Its activities will come under the central administration. The work of the department will probably be divided into seven divisions, namely, employment, industrial relations, industrial training, industrial welfare, record and analysis of employment and man-power statistics, national services and reconstruction. The employment division will be concerned primarily with the supply of labour for national work, for the needs of the munitions programme and for private industry generally. It will be concerned not only with the placement of the unemployed, but also with the effective placement of people who may be under-employed or mis-employed. Various problems have already cropped up in this regard. We are even now beginning to experience a shortage of labour, particularly of skilled labour. We are finding that the heavy demands made on the labour market are creating a shortage, for example, of seasonal workers. The Government of Tasmania has recently had to prohibit the movement of skilled workers from Tasmania to the mainland. Care must be taken that the movement of skilled workers from such establishments as Cockatoo Island Dockyard to aircraft establishments does not interfere with the production programme at the dockyard. There is a demand in some quarters for the introduction of female labour into the engineering trade which, in the past, has always rigorously excluded female labour from certain sections of the industry.

Mr Drakeford:

– Who is asking for that?

Mr HOLT:

– An application for the employment of female labour in an engineering establishment was made to the Arbitration Court in Melbourne a few days ago, and the judge has reserved his decision. These are examples of the great variety of the labour problems which are already presenting themselves.

Mr Francis:

– Will the Minister explain why the services of unemployed men in Queensland are not utilized? I in common with other honorable members representing that State, have large lists of unemployed men who get nothing more than a call for intermittent work, yet the Minister says that there is a scarcity of skilled labour.

Mr HOLT:

– If the honorable member is aware of any considerable supply of skilled labour - for .instance, carpenters, bricklayers in the building trade, fitters, turners and tool-makers, or men who already possess some degree of mechanical aptitude and who would be suitable for training - I hope that he will give me particulars. I can assure the honorable member that full use will be made of the services of such men.

Mr George Lawson:

– Will those men be employed in Queensland ? I am given to understand by the industrial unions that many skilled tradesmen who have their wives and families and homes in Queensland are out of work.

Mr HOLT:

– That will depend on the volume of labour available. If it is sufficient I shall be glad to take the matter up with the Ministry of Munitions in order to ensure that the best possible use is made of the labour available in Queensland. Honorable members who are closely in touch with industrial conditions in their own electorates can assist the Government by suggesting means for the better use of the labour resources of their own localities. If honorable members have any suggestions of that kind to offer, I suggest that they make them to me privately after this debate has concluded.

Mr Duncan-Hughes:

– There is a difficulty in that some people have too high an estimate of their skill.

Mr HOLT:

– That may be so. Part of the training scheme in operation is directed towards the training to a better standard of men who have already reached some degree of mechanical aptitude. One other important matter that comes within the scope of the employment division is the establishment of a more satisfactory system of labour placement. From a brief survey which I have already been able to make of this problem, I . am not satisfied that the labour placement system now operating in the various States is effective. Unfortunately, in some of the capital cities some employers are reluctant to approach the official labour exchanges because they consider that the men who register there are of a type and degree of skill not suitable to them. It has been customary, for example, for men to register at such exchanges for sustenance and relief work and as a result employers and employees in more regular employment tend to shun these offices. Consequently, we do not learn precisely what labour resources are available to us. Then again room exists for considerable improvement, particularly in country areas. As far as I know, no really effective method exists at present for ascertaining the labour resources of country areas.

The industrial relations division will deal with the problems that arise from time to time as a result of industrial disputes. Honorable members are now aware of the proposals recently adopted by the Advisory War Council and announced by the Prime Minister for the improvement of the machinery for dealing with industrial disputes. These proposals were designed to give prompt adjudication and speedy equitable decisions in regard to disputes as they arise, before the core hardens and makes their settlement more difficult. I can assure honorable members that the new machinery is working smoothly. When the parties have taken advantage of this new machinery and have brought their disputes to the court or its officers, they have, without exception, been speedily determined. I hope that as union officials, employees, and, for that matter, employers, learn of the steps that have been taken, and of the possibilities which exist for the prompt hearing of the disputes, they will make regular use of the machinery we have provided. The minds of many people are agitated by the frequency with which disputes are occurring. I propose to say a brief word about that, because^ there is a good deal of misunderstanding of the position. Admittedly, there have been more disputes proportionately in recent months than at any preceding period within my knowledge, going back almost to the last war when, also, there was much industrial trouble. The more one examines this matter the more one is led to the conclusion that certain factors are set in motion by war and the resultant condition, which provide a sort of fertilizer for these disputes. Long hours, shortage of labour, the taking into regular employment of many men who, for perhaps months or years, had not been in regular employment, and the strain of war work itself, all combine to create an atmosphere in which friction develops, culminating in stoppages which in more normal and less hectic times would not occur. Often men working 610 hours a week are inclined to regard a stoppage of work as a break in their arduous toil. But it would be a mistake on the part of the general public to assume that, .because there have been a large number of disputes in recent months, any sinister unrest exists among the Australian workmen, or that there is any considerable subversive element in the community. No honorable member would question the loyalty of the Australian workmen. In fact, coming into contact as I have with so many union officials in recent weeks, I have been gratified to notice the number of these men who have sons or brothers serving with the fighting forces. For instance, I recall that recently, after a long and even heated discussion at a conference, one of the most militant of the union representatives, speaking to me privately, said, “ If you do not hurry up about getting my boy into the Royal Australian Air Force, I shall have a revolution in my own home.” I mentioned earlier that there was no indication of a considerable subversive element in the community. I shall not say that there are not some men who are prepared to exploit the present situation in order to get the best they can for the men they represent. But they are not saboteurs in the ordinarily accepted sense of the term; they do not wilfully obstruct our war effort. I regret, however, that there are some men, not many, but sufficient to present a problem, who endeavour to exploit the present situation, perhaps in a spirit of service to those whom they represent, and who unquestionably profess a political ideology which is alien to the views of the overwhelming majority of honorable members.

Mr Pollard:

– The charge of exploitation applies to employers also.

Mr HOLT:

– I admit that this charge could possibly be levelled at both sides. The frequency, however, with which particular unions are involved in stoppages seems to me to be rather more than a coincidence, and points to the fact that some individuals are determined to exploit the war situation. The frequency with which certain organizations are involved in disputes is out of all relation to the’ degree in which other unions are similarly involved. I describe these agitators as bugs in the blanket of industrial bliss. Many complaints were well founded and the Government has made an honest and serious attempt to remedy them. A good deal of our industrial trouble in the past has been due to the delay which has occurred in bringing disputes before the proper tribunal for decision. We have made a genuine effort to overcome that difficulty. So far we have not made any penal provisions whatsoever. We believe that the great majority of our working people will be prepared to make honest use of the new machinery that is now available for the settlement of disputes. If we should discover, however, that some sections of our industrial community are not prepared to resort to this machinery but take direct action themselves without giving the machinery a chance to operate, we shall not hesitate to amend the procedure in order to deal effectively with any such persons who will not act fairly towards the community in general.

The Trade Union Advisory Panel has been able in recent weeks to give to the Government valuable advice on certain matters that have been referred to it and the creation of a corresponding body representative of the employers is now under consideration by the Government.

The Industrial Training Division will give attention to the important problem of technical training for war needs. In this connexion the closest possible cooperation will be maintained with the Ministry of Munitions. Many of the men we propose to train will be required for munitions work, but we also propose to provide for the training of increasing numbers of men to do technical work in the fighting services. Attention will he devoted also to technical training with the object of effectively rehabilitating our men after the war is over. The future development of Australia will demand increasing attention to training in the technical field. We are finding an evergrowing need for properly trained men to meet the demands of our rapidly expanding industries, and we hope that the work done in this field will be of great value to the nation in the years immediately following the termination of the war. The Government has been considerably helped in these matters by the suggestions of private members of the Parliament and I shall he pleased to discuss, at any time, any proposals that honorable members may wish to make along these lines.

The division relating to industrial welfare will not duplicate the work of State departments for it is not proposed to develop iri. spheres already being adequately covered by State activities. The Government is of the opinion, however, that useful work can be accomplished by the adoption of a general policy for the improvement of the health, welfare and recreational activities of the Australian workers. A special problem has arisen, for example, in connexion with the shortage of housing accommodation in such rapidly developing areas as Lithgow. It will be a function of this division to cooperate with the Department of Social Services, the Department of the Interior, and other Commonwealth departments in providing as adequately as possible for abnormal increases of lie number of workers in particular localities.

Mr Drakeford:

– I take it that the Minister has in mind other localities, as well as Lithgow?

Mr HOLT:

–Yes ; I took Lithgow as an illustration. Our housing programme will cover the provision of either temporary or permanent accommodation, according to the needs of the situation. That is the kind of problem that will be dealt with by the Division of Industrial Welfare.

Mr Drakeford:

– Rapid developments are occurring in the Maribyrnong district.

Mr HOLT:

– I am aware of that. Difficulties arising from the same cause are occurring in other districts also. The

Government also has under consideration the practicability of establishing a bureau of home economics, similar to the bureau which functions under that name in the United States of America. It is believed that a lot of useful work could be done, and much helpful advice furnished by such a bureau to the housewives of Australia .as to how to make the best possible use of their weekly income. I have considered for a considerable period that our basic foodstuffs are being distributed by uneconomic methods practically throughout Australia. Ry the adoption of more economic methods of distribution, the value of the basic wage to working people could be increased, in some districts at any rate, by anything from 5s. to 10s. a week. At present the discrepancy between the margin of return to producers and the cost of goods to the consumers is out of reasonable proportion.

Mr Calwell:

– The Minister is proposing to indulge in a little state socialism.

Mr HOLT:

– We all are revising our ideas in these days. I have no desire to deny virtue to any section of political thought, though sometimes too great a degree of merit is claimed for their own proposals by noisy propagandists.

The Record and Analysis Division will have important functions to discharge in relation to the administration of the National Register and the use of the information available from that source. The collection and analysis of employment and unemployment statistics will also fall within the scope of this division. All honorable members must agree that the information we are obtaining in relation to unemployment generally is not as complete as it should be. Figures supplied to me showing the number of persons placed in employment since the outbreak of the war, placed against the official statistics of the reduction of unemployment, demonstrate that there is scope for improvement in the gathering and analysing of statistical information, because it is apparent that many people have come into employment who are not previously registered as unemployed. We ought to know how many of the people returned as unemployed are actually unemployable, how many are entirely unskilled, and how many are capable of being trained to undertake skilled or semiskilled work. .Such information would be of the utmost value to the country and it- will be one of the prime objectives of this division to tabulate such records.

A division which makes a lively appeal to my own imagination will be known as the National Service Division. The Government has under consideration the launching, early in the new year, of a national service movement. “We have not, hitherto, capitalized the desire of many of our fellow citizens to take a more personal and practical part in our war effort. Many people who are not in a position to give full-time service or even a full week’s service at a time- in connexion with the war effort, would be glad of the opportunity to devote a day or’ a night as frequently as possible to such service. Careful organizing would he necessary to make this practicable. Many worth-while activities which are being supported in local districts, in connexion with salvage work,, the Red Cross, war savings groups, national fitness, comforts funds, and the like could be organized on a mort effective basis, and so render more efficient service to the community as a whole. The Government believes that the establishment of national service centres in each shire and municipality would increase the drive and quicken the spirit of unity behind our war effort as well as fire the enthusiasm of our people. The purpose of this division of my department will be to capitalize the war service urge of the people at large. If that can be done, we shall be able more nearly to approach a maximum war effort. Arrangements could be made for local centres to register all the persons in that community who desire to render service of any kind. Such centres could also be made effective rallying-points for the organization of labour in country districts. I have, for example, in mind particularly seasonal workers. If proper contacts could be made between persons wishing to do casual work and the. officers of these local centres, a much more satisfactory distribution of labour should be practicable than is the case at present.

Mr Pollard:

– Such contacts are poorly organized now.

Mr HOLT:

– I agree with the honorable member, and . I hope that the machinery which it is proposed to set up will remedy this defect.

The seventh branch of the department will be known as the Division of Reconstruction. There is no need for me to emphasize the necessity to begin to plan now for the rehabilitation after the war of members of our fighting services and also of munitions workers, whose avenues of employment will quickly become restricted upon the conclusion of hostilities. It has often been claimed that although we won the last war, we lost the peace. We do not desire to repeat that experience. There is a tendency in some quarters to emphasize, to the exclusion of all other considerations, the need to win the war. I know that this is the primary consideration. But we should be able, even while we are putting forward our best effort to win the war, to make provision also to meet post-war problems. It is quite practicable to make our best war effort and, at the same time, to plan, in the spheres of both primary and secondary production, to meet post-war conditions insofar as we can visualize them. With proper organizing fruitful service to that end can be done even now.

Mr Francis:

– After the last war men who had served overseas were provided with employment or given vocational training by the Repatriation Commission. Is it proposed that this new department shall do the work of the Repatriation Department in this connexion?

Mr HOLT:

– I do not suggest that at the present time. This department is in process of formation, and if the problem of reconstruction is to be dealt with properly, it will have to work in co-operation with a number of Commonwealth departments. The Department of Commerce can be very helpful; the Department of Trade and Customs has a very keen interest in the development of secondary industries, and its officers have accumulated a fund of specialized knowledge which will be helpful; the Repatriation Department has a wealth of experience that will be invaluable when the Government is making its plans. The activities of the Council for Scientific and Industrial Research are opening up new fields for development, two of which I shall mention. The encouragement of flax production is one of the happier features of our war-time activities. The establishment of this primary industry arose from research carried out by the same body. The problem of developing the fishing industry on a large commercial scale has been the subject of research by the Council for Scientific and Industrial Research. The information that has been collated in the course of this work will assist the new department. The views of experts from the various departments that I have mentioned have to be obtained before the best plan can be produced.

Mr PRICE:
BOOTHBY, SOUTH AUSTRALIA · ALP; UAP from 1931

– Will the department encourage trade schools?

Mr HOLT:

– There again we shall have the benefit of the experience which the Repatriation Department gained in carrying out its programme of rehabilitation after the last war. This department will not attempt to do the work which a number of other departments will have to do in their usual spheres of activity. On the more academic side, however, it will be able to collate information, particularly in the field of economic research. I have every confidence that the reconstruction division will perform some of the most valuable duties which the new department will be called upon to undertake. As well as obtaining the help of other Commonwealth departments, we shall seek the advice of public and semi-public institutions, such as universities, chambers of commerce and manufactures, societies of professional men such as engineers and architects, and State government departments which control land settlement and education. Honorable members will be able to see, - from the sketchy outline which I have given, the magnitude of the new department. It has great potentialities of becoming a fruitful instrument of social justice and national progress. The degree of success which it achieves will depend very largely upon the co-operation and goodwill of political bodies, industrialists and workers’ organizations.

Mr Francis:

– And State governments.

Mr HOLT:

– That is so. We hope to have a conference of the appropriate State Ministers early in 1941, in order to discuss many of the labour problems which are matters of urgency even at the present time. [Leave to continue given.] We have before us the inspiring example of the Department of Labour and National Service in Great Britain, which has done great work under the leadership of Mr. Ernest Bevin. If we can obtain in Australia the same degree of co-operation from all sections of the people this department will achieve such results as will amply justify its creation, not only for war-time purposes, but also for reconstruction in the happier days of peace. Through the work of this department we can help our comrades and kin in Great Britain. In fighting our battle they are daily resisting the physical attack of the enemy. Although we cannot stand at their sides in this time of trial, we can be of great assistance to them by producing munitions of war. During the last war we sent munition workers to Great Britain; now we are able to send the actual munitions. In this war of the workshops,, we have been able to convert Australia into an arsenal which is growing in magnitude daily. Approximately 15,000 workers are directly engaged in government munition establishments, and within twelve months we expect that the number will have increased to 75,000. We estimate that another 75,000 will be engaged in the production of the component materials for munitions. By this means we can make a direct and valuable contribution to the effort which Great Britain is making. We can even contemplate the bringing to this country from Great Britain of skilled workers who, free from the distractions of bombings and the rigours of life in a beleaguered country, can apply themselves to producing munitions at a rate which is not possible in their homeland. I look confidently to the people of Australia to make a supreme effort in order to maintain continuity of production so that we may give the greatest possible assistance to the Empire. If we cannot contribute our man-power to the fighting forces in the same degree as during the last war, we can at least contribute war materials, and thus help to assure victory for the cause which is vital to us.

Mr McLEOD:
Wannon

.- As a new member of this Parliament, I am amazed at the accusations that have been directed against honorable members on this side of the House by all supporters of the Government, with one notable exception. The exception is the honor.orable member for Eden-Monaro (Mr. Perkins), who admitted that there was good on both sides. The Government, which is dominated by capitalists, has introduced a budget which panders to the financiers. What I resent most about this, is that members and supporters of the Government have tried to bolster up their case by accusing the Labour party of endeavouring to retard the war effort by inciting strikes and disaffection; we are charged with generally being responsible for the nation’s unpreparedness for war. I shall show that the representatives of the big commercial concerns which direct the activities of the Government are actually responsible for our lack of preparedness. The Labour party, which represents true democracy and is the enemy of capitalism, cannot rightly be blamed. At the general election of 1937, the Labour party urged the establishment of an adequate air force and the building of factories in which to construct aircraft. Had a strong air force been in existence when war broke out, Australia would have been able to give immediate assistance to Great Britain. We should have had a trained force of men and factories producing aeroplanes for them. The country will never be provided with any measure of security by the representatives of capitalism; but it is instinctive on the part of the true representatives of the people to see the dangers that lie ahead, because we are not tied by big financial interests. I recall that, in 1937, those interests implied that the Labour party was disloyal to the nation and that the defence preparations which it advocated were not necessary. The actual reason for this attack on us was that these interests did not want factories to be established in Australia. They wanted Australia to purchase its aeroplanes abroad, where much of their money was invested. Their policy was to use Australia as a producer of raw materials instead of helping it to become a big nation in which employment could be provided for its young men. As the Minister for Labour and National Service (Mr. Holt) said only a few minutes ago, we are now trying to train our young men; Labour advocated the taking of that step three or four years ago, but we were told that the Government had no money for such activities. Profits come before patriotism with many of Australia’s big financial institutions. Naturally, therefore, I resent their allegations that Labour is hindering the war effort. The attempts of these profitmakers to protect their own interests actually caused our state of unpreparedness.

Finance is another subject that has caused a great deal of argument in this chamber. I am no financial expert, but I can speak from practical experience and with common sense.

Mr DUNCAN-HUGHES:
WAKEFIELD, SOUTH AUSTRALIA · UAP

-hughes. - The honorable gentleman probably knows as much about finance as do the experts.

Mr McLEOD:

– I know more about it than honorable gentlemen opposite, because I have suffered more than they have. They are receiving their unearned increment from the financial dictators and, naturally, they want to retain it. Finance is the key to everything. Since the introduction of the budget proposals, we have seen the gradual retreat of capitalism before the forces of the Labour party. But there remains one political pill-box that we must capture, and that is finance. A great weight of public opinion to-day favours a more extensive use of the credit resources of the Commonwealth Bank. This view is held, not only by experts, but also by common people, who have suffered and learned that it is not right for banking to be controlled by a few individuals who also control the Government. Unfortunately, the representatives of those individuals have been in the majority in this Parliament for most of the last twenty years. The honorable member for Melbourne Ports (Mr. Holloway) proved last night that the resources of the Commonwealth Bank could be employed to a greater degree than at present. This is no wild suggestion. It has been tried already; as a Scotsman, I like to see somebody else tes* a new [project before I give my support to it. The Commonwealth Bank was functioning in the interests of the nation at the outbreak of the last war. Unfortunately, it was not doing so when the present conflict began. Had it continued to operate on behalf of the masses of the people, our primary producers would not be in the mess they are in to-day, and we should not have experienced that terrible depression ten years ago. Those who control the banking system of this country naturally do not want to surrender what they regard as their rights. Probably if I were one of them I should hold a similar view. If Australia is to be saved . from the danger that threatens it, the policy which we espouse will have to be followed. The present tendency is to increase the taxes on men who are on the bread line. Unity of purpose and a maximum war effort could be achieved tomorrow if the Government would dismiss the Commonwealth Bank Board, which consists of representatives of private industry, private financial institutions, and industrial monopolies, and place a Governor in complete control of the Commonwealth Bank. There is no need to depict for me the horrors of bombing raids. To-day the principal consideration is the making of profits. No man should make any profit in a time of emergency. During the last war, the Commonwealth Bank functioned as a people’s bank under the control of Sir Denison Miller. In 1924, control was handed over to private interests. It must be restored to the people. I place the safety of Australia before the interests of private financiers. If honorable members opposite were sincere, they would force the issue. The best brain in the financial world could be employed. There is nothing wrong with the banking system ; what is at fault is the control of the system. I should not care if the Governor appointed were paid £10,000 a year, so long as he was responsible to this Parliament, and not to a board of directors. The Parliament could then say to him, “ As a trained banker, you shall do what you consider safe in the interests of the country”. As a banker, he would know what were the limits of safety. My safety as a farmer lies in what I produce. To-day, I have 1,400 sheep on my property. I could carry another 1,400 if I had the necessary capital. If honorable members were to take the stand which I suggest, there would be some justification for their claim for the formation of a national government, but they will not do so because it would mean the surrendering of profits, privileges and control. They would rather grant concessions than surrender control. The safety of our nation causes more concern to members of the Opposition than to some honorable members who sit on the Government benches. The worker bears all the pain and suffering of war. The majority of the people of Australia support my argument that banking should be controlled by the national parliament. The matter has reached a serious stage. Would honorable members opposite suggest that the control of the water system of Sydney or Melbourne should be in the hands of three men? Consider the enormous power over life and death which they would have. They could reduce the quantity of water available, on the plea that there was a shortage, and increase the water rates to a prohibitive degree. It is merely hypocrisy to advocate a national government and a maximum war effort, when men who are willing to render some service to the nation are denied the opportunity to do so. There is a powerful munitions monopoly. For two years during the last war the output of munitions in Great Britain was not sufficient to maintain supplies to France, and a Ministry of Munitions had to be established. A costing system was devised, one result of the application of which was the reduction of the cost of a Lewis gun from £175 to £70 in a period of two years. The Commonwealth Government is allowing these interests, whose first aim is to make a profit, to control our war effort. The production of munitions should be decentralized, and much greater use should be made of country centres. Too great a price is being paid for what is produced. The application of a costing system would cure that. For a field gun, £5,500 is an excessive price. Our resources of iron, steel and coal are in the possession of private individuals.

An independent valuation of them should be made, and even at a cost of £5,000,000 or £10,000,000 they should be taken over by the nation, the present proprietors being recompensed at a rate of 3 per cent. That could not be regarded as unjust or confiscatory. In my younger days, I imagined that men who were sent to Parliament thought deeply over the matters which came before them, in order that they might do their best for the whole of the people, but advancing years taught me that the majority of them merely represented bankers, big company directors, squatters, and industrial monopolists, whose object was merely to protect their own profits. Attempts are now being made to break down labour conditions. These have never been given to the workers voluntarily ; from the birth of the Labour movement the workers have always had to fight for the right to live. This led to the establishment of arbitration courts, which some persons would now abolish. In the old squatter days, the employees had to bathe in a lagoon in the early hours of the morning. Did the squatter say “You are a human being, and should be accommodated in a hut”? The men were crowded together under dirty conditions, and had to fight for all the improvements they obtained. The employers are gradually retreating from the position that they formerly took up, but they still have to be compelled to give justice to their employees. These interests have been in control of the affairs of the nation, and they have placed their privileges on a higher plane than the interests of the nation.

Shipping is of considerable value to this country. At one time we had a Commonwealth shipping line, but it was practically given away. The Labour party was responsible for its purchase, but another party disposed of it and also caused to disappear a lot of our social legislation.

The wheat farmer is probably one of the most valuable of our war workers. We have been accused by honorable members opposite of having made a bid for his support. We have asked merely for what belongs to him, but what he has not yet received. The golden grain is as rauch needed as are munitions of war ; we cannot do without it. Many of the wheat farmers benefited very little from the first payment, because they had to meet obligations to banking institutions, and some of them are to-day in danger of losing even their homes unless the Government comes to their assistance. If they were asking for what they had not earned,, they would have no case, but they have grown the wheat and have not been paid for it, although it was acquired from them compulsorily. That is in sharp contrast to the Government’s treatment of big business, which is allowed to put on its own profit. For instance, the Broken Hill Proprietary Company Limited is guaranteed its profit of so much per cent, even on its watered stock. However, there are not many genuine wheat-farmers on the other side of the House.

Mr Hutchinson:

– Surely there are.

Mr McLEOD:

– I said genuine wheatfarmers. If the honorable member for Deakin (Mr. Hutchinson) produces any wheat, it is probably grown by share-farmers. The share-farmers have made the big men. They have done all the work and taken all the risk; they have cleared the land and broken it in. Even if the owner got no return from the wheat, he would be well repaid by the improvement of his land. The royal commission presided over by Sir Herbert Gepp found that it cost 3s. 6d. a bushel to produce wheat, and the prices of superphosphate, bags, and machinery have increased since then. The wheat industry must be considered in conjunction with our war effort. We must keep up the morale of the people. Wheatfarmers are skilled men in their occupation, and it would be uneconomic to allow them to drift away to other jobs. The Commonwealth Bank should be utilized to make the necessary advances to the farmers on’ their wheat. During the last war, the growers were guaranteed 5s. a bushel, and, incidentally, bread was then sold at 8d. a loaf. There is no reason why what I suggest should not be done. The farmers have produced the wheat, and it is merely a matter of paying them for it. It should not be necessary to wait until the wheat is sold.

Something should be done to assist the farmers to cope with their liabilities. The only hope for the farmers is to establish a mortgage corporation attached to the Commonwealth Bank, which would give the farmers long-term accommodation at, say, 2 per cent. The Commonwealth Bank was established, not to make money, but to serve the interests of the people.

Mr Rankin:

– If we do not keep the farmers prosperous, secondary industries cannot be prosperous either.

Mr McLEOD:
WANNON, VICTORIA · ALP

– That is so. Unless something be done to help the men on the land we shall have re-aggregation of areas. The trend is in that direction now in regard to land, as in regard to finance and business generally. We know that small storekeepers are being swallowed up by the big chain-stores. The small man cannot hope to compete against a monopoly. It would reduce prices, and put him out of business in a very short time.

The Minister for Labour and National Service (Mr. Holt) referred to the big gap between the producer and the consumer, and he hinted that he was developing a more radical outlook. Probably there will be tremendous opposition to overcome from the senior members of the Government before he will be able to put his ideas into effect. However, I am convinced that the only way to overcome our difficulties is to reduce this gap between the producers and the consumers. When I stepped off the transport in Australia after the last war, I was asked by many people to join this and that, and if it did not cost too much, I usually did. One man asked me, “Do you want’ to buy a suit-length, digger?” I said, “What is the stuff like ? “ and he replied, “ It is good ; look at it. It was made in the Commonwealth Woollen Mills”. I asked him what the price was, expecting it to be pretty high, but it was only 10s. a yard, and I bought 4 yards of the very finest cloth for £2. All the cloth used for Australian uniforms was made in these mills, and its quality was admired all over the world. It seemed to me that the Commonwealth Woollen Mills had found a way to bridge the gap between the producer and the consumer. I could not understand how it was possible to sell this wonderful cloth at such a price. As a matter of fact, I still have some of it at home. I could not wear it out, and, in the end, it was cut up for the children. I thought that perhaps the wool had been bought at a very low price, so I went to my uncle, who is a wool-grower, and asked him what sort of price he had been getting for his wool during the war. He told me that it had never been better, and that he was quite satisfied. I then thought that perhaps the labour which produced the cloth was sweated, but I was informed that the work people received good wages. In any case, the Government does not sweat its employees. Then I said, “ The grower is satisfied, the workers are satisfied and, best of all, the consumers are satisfied “. Then I learned shortly afterwards that the Commonwealth Woollen Mills, that great national asset, had been sold.

Mr Lazzarini:

– Given away.

Mr McLEOD:

– Yes, given away. It was not long before the price of cloth went up to £2 a yard, and when I bought my next suit I could see through the maternal. It is clear, therefore, that it is the middle man who is responsible for putting up prices to the consumer and keeping them down to the producer. If honorable members opposite really desire Australia to make its maximum war effort, they will have to curb the selfishness of those interests which they represent. The people are demanding a better state of affairs. We must give back to the people the Commonwealth Bank for their use and benefit. All such public utilities should be taken over by the nation, and operated in the interests of the public.

Mr SHEEHAN:
Cook

.- The budget introduced by the Treasurer (Mr. Fadden), although professedly an attempt to arrange and organize the finances of this country for the year ending the 30th June, 1941, is unique, in that almost half the period has already elapsed, and nothing has taken place during that period to indicate that such a severe financial impost should be placed on the people. Hundreds of thousands of persons from one end of Australia to another are convinced that the budget is economic madness, and are demanding that new methods be tried to bridge the huge gap between potential revenue and war-time expenditure. The load of taxation imposed on the lower and middle incomes is preposterous. It will cause hardship and dismay in the home, disaster to trade, and galloping unemployment that no scheme of increased Government employment will be able to overtake. It is all wrong to introduce in the first year of the war a budget so extraordinarily out of balance. Some time ago, Mr. Casey, the then Treasurer, told the people of Australia that if war came we would be able to get any amount of money - that the sky would be the limit. It now appears that those who are controlling the destiny of this nation, who are telling the world that Great Britain will win the war by blockade, are in fact attempting to blockade the working people of Australia, demoralize them, break down their morale, and rob them of that strength and vigour which are so necessary if we are to win the war.

Mr. E. W. Gillespie, chairman ot directors of the Bank of New South Wales - the most influential trading bank in Australia - in a recent address on the economic position of Australia, said -

So far the task of the Government in Australia has been easy, but much more drastic and unpopular measures than have yet been indicated will soon have to be introduced. Australia can play her proper part in the war only by drastic reductions in civilian consumption . . . Many businesses and occupations will have to be curtailed or even suspended during the war. This will bear very heavily upon a large number of individuals and interests, and the Government should be prepared to give financial undertakings in order to guarantee their future and to enable them to resume operations at the conclusion of hostilities.

Mr. Gillespie spoke as the representative of the trading banks. I am of opinion that if there is one service or occupation that could well be dispensed with in war-time it is that of the private banks. The trading banks could with advantage be abolished.

Although Australians do not object to making the maximum contribution required to achieve victory, they are convinced that it will be futile to emerge triumphant if, in the fight, the entire Australian economy has been wrecked. The budget’s deflationary proposals will, I fear, have that effect. All classes have been shocked by the Government’s financial proposals, and are fearful of the repercussions. Small shopkeepers, large warehouses, basic wage earners and others are definitely afraid. For the first time in history, a married man, who earns from £3 to £7 a week and has one dependent child, will be compelled to pay federal income tax, which will absorb the few shillings weekly that he now allots for time-payment purchases.

Mr Anthony:

– In the last war, this group was compelled to pay federal income tax.

Mr SHEEHAN:

– To my knowledge, the basic wage earner has never been called upon to pay federal income tax.

The next group, earning from £8 to £12 a week, will be heavily “ slugged “. Income tax payable by a married man supporting a wife and child has been “ skyrocketed “ by from 400 per cent, to 600 per cent., and amounts varying from 10s. to 20s. a week will be extracted from bis pay envelope. The standard of living will be considerably reduced. In every home, readjustments will have to be made in the normal weekly list of purchases. In some instances, the amounts taken from salaries and wages represent a considerable proportion of the weekly outlay for rent, and families will effect savings hy sharing houses, as they did during the depression. Whilst that will cause a catastrophic collapse of rents, the amount of tax payable by landlords on income derived from property will be 20 per cent, higher than the tax upon income from personal exertion. How owners of property will make ends meet is a mystery to all except the Government.

The immediate effect of the budget on trade was disastrous. Stores had enlarged their stocks in anticipation of a big Christmas trade, a considerable portion of which is conducted on the basis of cash orders, which have to be discharged in the New Year. Smaller earnings mean reduced spending, and a severe slackening of trade will cause widespread unemployment. At the same time, arrangements are being made with the Prices Commissioner to pass on to the public in full, the severe increase of sales tax, customs duties and excise. Such increases will further contract the purchasing power of the wage earner, and reduce the turnover of factories, now at the peak of production. The anticipated unemployment from such curtailment in the New Year is appalling.

The demand for the full use of the credit resources of the nation in order to maintain purchasing power and ease the burden imposed upon the taxpayer has extended far beyond the ordinary limits of the Labour movement. In the circumstances, I cannot compromise with the Government upon the fundamental principles of this atrocious budget. The load is more than the public and industry can bear. By supporting the budget, the Labour party is failing to observe its responsibilities to the Australian public, and might just as well disband its organization. In size and terms, the budget is much in keeping with the forecasts. A suitable atmosphere was created for it many months before it was introduced. The public were warned to expect heavy increases of taxes and to tighten their belts in readiness for sacrifices. It is difficult to know why such sacrifices are necessary. Why should Australians be subject to such vicious impositions when the obvious method of financing the war is to utilize the national credit resources? Australia has inexhaustible supplies of wealth. Our people are energetic and intelligent. We have many valuable raw materials, and many important public works are yet to be undertaken, which will prove assets to the country. Instead of demoralizing the country, as it has done by its budget proposals, the Government should utilize our credit, because it is sound.

Taxation will bring in to the Treasury £126,325,000, and public loans, including war savings certificates, bank advances, and bank balances, will amount to £112,000,000. The Government proposes to expend £43,000,000 to defray the expenses of our fighting services overseas. In the first four months of the current financial year, this expenditure has totalled £6,300,000. If that rate be continued, only £20,000,000 will be required for the year. Evidently the Government expects that the expenditure will be doubled before the 30th June, 1941. The budget, which is grossly exaggerated and panicky, covers more than the requirements of war and domestic expenditure.

Last May, the Government adopted proposals for raising from taxation an additional £14,000,000, hut the present budget increases that amount by £31,000,000. Before exploding the taxation bomb in Canberra, the Government should have explored fully any reasonable alternative. It had a wonderful opportunity to put into effect the recommendations of the Royal Commission on Banking and Monetary Systems in Australia. It is refreshing to note that the Prime Minister, in his radio appeal for subscriptions to the war loan, declared that our national credit will he used to the point of safety. This admission established the principle that our national credit can be used, and all that remains is to reach agreement upon the vexed question of what constitutes safe limits. The issue of national credits should never, in any circumstances, exceed the value of goods and services created in Australia.’ Because taxation and loans have been the accepted media of creating national credit, it does not necessarily follow that that policy is always right. In the early days of constitutional government certain moneys were required in order to conduct the business of the country, and although governments always had the constitutional prerogative to create money, this was applied only to the issue of currency, and usually had a debt-chain attached to it. It should not be difficult to imagine what the position of Australians might have been if the financial advisers to the first Commonwealth Government had recommended that its constitutional power to create money should be applied to meet our national needs. Because our first financial advisers acted in ignorance, although ignorance is never accepted as a defence in a court of law, should we continue to carry on in a similar state ?

The terrific growth of taxation can be followed in the following table: -

Under proper constitutional government, not a single penny piece should have been extracted from the pockets of the people.

To the problem there is only one solution. If we regard the budget as a fair estimate of the money which is required for our war effort, we should instruct the Commonwealth Bank Board to make that amount available to the people of Australia as, when, and where it is required. Whatever the amount, the effect would be that the Commonwealth Government, which, in the final analysis, is the people, would owe the money to itself. The people would then have the money which had been created, and which after paying off advances, &c., would naturally be deposited in the Commonwealth Bank. Australia can never go bankrupt by owing money to itself, provided there is an equitable distribution of the money.

I cannot understand the inflation bogy which supporters of the Government and financiers produce whenever the Labour party advocates the use of national credit. The reply to those who cannot or will not admit the sanity and justice of the case for the expansion of national credit j3 the concerted howl of “ inflation “. This age-old bogy is trotted out whenever an attempt is made to loosen the vice-like grip of “ sound finance “ on the pockets of the workers. The Prime Munster spoke airily of “ sky writing”, and the Treasurer declared that credit expansion would be a “ concealed tax upon every shilling in the community “. Less distinguished critics describe it as “ hocus-pocus “. The ignorance or hypocrisy underlying these criticisms becomes apparent when we realize that Australian governments have always been financed principally by credit, not money, issued by the private banks at interest rates of 3^ or 4 per cent., and that the general public were taxed to pay for it. Why should it be termed “ inflation “ if the Commonwealth Bank issues credit f roe of interest, and not be inflation when the private banks issue credit and charge interest upon it. In the whole Commonwealth, there is never more than about £65,000,000 in notes and coin, roughly one-half of which is held by the public and one-half by the banks. Yet the Lyons Government borrowed £100,000,000 in three years, and this Government now plans to borrow more than £100,000,000, including the £28,000,000 loan recently floated. If that loan is to be raised in cash, where is it to come from? Obviously, the greater part of it must be bank created credit, interest bearing, of course. In 1S60 the public debt of Australia was £10,000,000. In 1938, before we faced the task of paying for this war, it had risen to £1,300,000,000, and we were paying £1,000,000 a week or £110 a minute, in interest. Is it not about time that we issued our own credit to ourselves, free of interest, through our own bank? It can be done and it has been done. The Kalgoorlie to Port Augusta railway was built with interest-free credit provided by the Commonwealth Bank, and no one pays interest on the cost of the bank’s palatial buildings in Martin Place, Sydney, and in other cities.

I desire now to make a strong appeal on behalf of small shopkeepers who will be most heavily hit by the proposed increases of the sales tax. Although I am at all times a fighter for the rights of the consumers, I realize that the small shopkeepers arc getting a very raw deal from the Government under this budget. The increased sales tax can be passed on by shops dealing in costly articles, but small shopkeepers, such as the retailers of smallgoods, cakes and confectionery, are not able to impose the tax on small quantities of cheap lines The imposition of these higher taxes must inevitably bring about unemployment in the wholesale confectionery and cake manufacturing businesses. In some instances the increased burden on small shopkeepers will amount to £1 a week. These people already have to pay for licences for milk, tobacco, shop, smallgoods, and Sunday trading, in addition to licences for motor cars and they have to purchase and maintain plant, costing up to £500, including refrigerators, show cases, cutters and scales acquired under hire purchase agreements. Many small shopkeepers will be compelled to close their doors early in the new year because they will not be able to carry on. It must be remembered, too, that among them are many returned soldiers who acquired their businesses when they returned from the last war, and ever since have been struggling to eke out an existence.

I propose now to deal briefly with the Government’s attitude towards invalid and old-age pensions. Under the Government’s compromise proposals the standard rate of pension has been increased to £1 ls. a week. Unfortunately, however, the base rate of pension which fluctuates with the rise or fall of the cost of living is to remain at £1 a week. If in the new year the cost of living figures justify an increase of ls. a week on the base rate, the pensioners will receive nothing ; when the increased cost of living justifies an increase of 2s. a week over the base rate the pensioners will receive an extra ls. a week. The present rate of pension is totally inadequate to meet the high cost of living, and will not go far towards meeting the steep rise of the costs that must take place in the new year when the full impact of the taxation proposals is felt. The Government might well take a lead from the British Government in this respect. Despite the almost crippling costs of war, the rate of pension in Great Britain has been increased from 103. a week to 19s. 6d. a week. Proportionate increases have been made in respect of widows’ pensions and, i» addition, an extra allowance may be made where the rent paid by the pensioner exceeds 6s. a week. All this has been done at a time when Great Britain is spending millions of pounds every day on the war ; but after fighting hard on behalf of the pensioners here, we have been able to induce the Government to grant a rise of only ls. in the pensions of those old pioneers who blazed the trail in this country and who, in the declining years of their lives, are now dependent upon the bounty of the Government. I sincerely hope that the Government will agree to alter the base rate of pensions to £1 ls. a week.

I direct the attention of the Government to the unsatisfactory condition of the wool-scouring industry. Before it is shipped abroad the Australian wool clip should be treated, as far as possible, by Australian workmen. In replying to a question recently, the Minister for Commerce (Sir Earle Page) stated that if it is shipped in the greasy state the wool reaches Great Britain in a better con- dition than if it is shipped in the scoured state. That statement requires investigation. I have not received any advice from experts on this subject, but I doubt very much whether the Minister’s assertion is correct. In any case, there is no necessity to ship our wool overseas, because the British manufacturers have indicated that, if they are given sufficient encouragement from the Australian Government, they will establish their industries in the peace and quiet of this country. The whole of the Australian wool clip has been sold to the British Wool Committee at 13£d. per lb., and is being re-sold to neutral countries at from 43d. to 47d. per lb. We were informed that an arrangement was made with the British Government under which one-half of the profits on the sale of Australian greasy wool to neutral countries would be returned to the Australian wool-growers. Only half of the wool is re-sold in a greasy state. The Government should not have sold abroad the entire wool clip for the duration of the war, no matter what the price offered for it. We could do the whole of the scouring, carding, spinning and weaving in this country if the Government fully realized the value of the wool industry. The whole of the Australian wool clip should be carbonized and scoured in this country. If the wool-scouring industry were established on a sound footing it would provide employment for many thousands of our people. It might well be included in the peace reconstruction scheme mentioned by the Minister for Labour and National Service to-day. I know that the Government is bound by its agreement with the British Government, but after the contract has expired it should take the first opportunity to place the Australian wool industry on a sound basis.

I desire to say a word or two about the Australian Broadcasting Commission because of the iniquitous propaganda which is being launched in an attempt to sabotage the A-class stations. I get very little opportunity to listen to broadcast programmes, but when the opportunity is afforded, I tune in to A-class stations which, unlike the B-class stations, do not »;very night put on a murder story sandwiched between advertisements for patent medicines. The programmes broadcast by the national stations are of an educational nature and of wide interest. Considerable criticism has been levelled recently at the A.B.G. Weekly. I have received issues of the A.B.C. Weekly ever since it was first published. It is a well produced, interesting and informative journal whose publication has prevented the daily newspapers from filching from the Australian Broadcasting Commission many thousands of pounds annually by charging advertising rates for publishing the broadcast programmes. I congratulate the Australian Broadcasting Commission on the production of its official journal, and I hope that the people will reject the insidious propaganda inspired by greedy profiteers who are prepared at any time to sabotage a government-controlled organization because its activities cut across what they regard as their own legitimate field.

Mr CALWELL:
Melbourne

.- My objection to the budget is primarily because it seeks to perpetuate the worst evils of capitalism. If the Government is honest, it should make an endeavour to introduce now that new order of society which we are promised when the war is over. If it is good to have a new order no time should be lost in laying the foundations as early as possible. I have a fear, however, that all these protestations about a new order are not sincerely meant by the press or by the great controllers of vested interests who propagate them. The hopes that they inspire are likely to prove as empty as the hopes raised during the last war when the workers were told that the war was being waged to make the world safe for democracy and fit for heroes to live in. We were disillusioned -after the last war. There was no new order of society, notwithstanding that fratricidal struggle. The conditions of the common people were no better, in some respects they were worse, after the war than before it. The owners of the means of production and distribution still exploited their fellows. In fact, the process of exploitation was accentuated and the conditions were even more repulsive than before the catastrophic struggle commenced. The capitalist state of society is obnoxious to me for many reasons. Some honorable members opposite have attempted to defend capitalism and others have attacked it. The best short description of capitalism that I have heard is “Anarchy plus a police force “. As the years have rolled by that description has become more and more apt. I remember reading some time ago these lines from Wordsworth’s Hob Boy’s Grave, which seem apposite to this discussion -

Because the good old rule

Sufficeth them, the simple plan

That they should take who have the power,

And they should keep who can.

Naturally the members of the Labour party are not satisfied with the capitalist order of society, and wish to see in its place a social order which will ensure the welfare of all classes of the people. Our desire is to change the whole basis upon which present-day society rests. It is of no use for honorable members opposite to tell as that everything will be all right after the war. We know very well that everything “will not be all right so long as the acquisitive instincts of men remain uncurbed by legislative action, and their rapacious desires are allowed unrestricted play. The great majority of the people have to work for the small minority. The 1933 census disclosed that 20 per cent, of the community owned 80 per cent, of its wealth. In other words, 80 per cent, of the people were in bondage to 20 per cent. A better order of society and a more equitable distribution of wealth must be achieved. The members of the Labour party visualize that better order of society and say that it must be brought into being by the time the war drums throb no longer. I have not such a simple faith in the present controllers of the social order as to believe that they will surrender without a struggle the property they at present own. But my colleagues and I on this side of the committee believe in an evolutionary change of the social order. We wish to begin making those evolutionary changes now. We are not prepared to wait until the wealthy people in the community are less anxious about the present and less fearful of the future. We desire to bring about a transformation of the circumstances of the great mass of the people by the institution of a social order in which there will be security for all. The great majority of our fellow citizens are to-day obliged to live on the basic wage, which is sufficient only to keep body and soul together. It provides for only the barest necessaries of family life. Nothing is left over with which a man may acquire property or provide for his old age. Under existing conditions the majority of the working people, having done their duty to their country, spend the evening of their lives in charitable institutions or maintain a bare existence on the old-age pension.

The Government should therefore make up its mind to introduce fundamental changes forthwith. The old process of patching up here and making renovations there will not satisfy us any longer. The people will not accept such a policy. They are looking for big changes and consider that a beginning should be made at once. The Labour party is firmly convinced such changes are inevitable, and, out of consideration for the true progress of Australia, it is not prepared to sink its identity as it would do were it to consent to the formation of a national government. In our view it is essential that the Labour party should keep its organization intact and not sacrifice itself on the altar of political expediency, merely to provide a few of its members with portfolios. We feel that by remaining a separate political entity we can best serve the interests of Australia and ensure that after the war the men who return from the battlefields and those who lose their present employment in munitions factories will be transferred under reasonable conditions to occupations in the processes of normal production. If we remain a separate political party we shall be better able to lead the people whom we represent. In other circumstances it is quite possible that the working people may fall victims to revolutionary doctrines which may even approach Fascism and Communism. We consider that we shall be able to do more for Australia by refusing to join a national government than by joining one.

Some Government supporters with, I believe, absolute honesty have pleaded that a national government would provide a panacea for all our economic, social and political ills. The honorable member for Eden-Monaro (Mr. Perkins) put his view sensibly and honestly. But in my opinion the virtues of a national government are chimerical. The honorable member for Flinders (Mr. Ryan), the honorable member for Wakefield (Mr. DuncanHughes) and the honorable member for Darwin (Mr. Bell) in submitting their views concerning the solution of our political problems all advocated the formation of a national government. Such a government could not solve any more problems than can the Advisory War Council as at present constituted. We ‘prefer to maintain a vigilant opposition in this Parliament, while at the same time contributing such advice as we have to offer through the Advisory War Council. In this way we believe that we are doing useful work to maintain the integrity of our parliamentary institutions and ensure the well-being of society.

It has been argued that because the Labour party of Great Britain agreed to join a national government the Australian Labour party should do likewise. But the circumstances of Australia are entirely different from those of Great Britain. Fortunately the conditions of the United Kingdom are not likely to bo experienced in Australia. The National Government of the United Kingdom assumed office immediately after Dunkirk at a time when it was expected that Hitler would order the invasion of England within a few days, or within a fortnight at the latest. France at that time was in desperate straits and the British armies on the continent were expected to be imprisoned or annihilated. There was scarcely enough ammunition and certainly not enough war equipment in England to provide for a new army to be placed in the field, and the general feeling was that perhaps the last great struggle for the freedom of England was about to be entered upon. It was in those circumstances that the National Government assumed office in Great Britain.

Mr Anthony:

– The honorable member is a little astray in some of his facts. The National Government was formed after Narvik and six weeks before Dunkirk.

Mr CALWELL:

– Germany had successfully invaded Norway, Denmark, Belgium and France. It was common knowledge at the time that France was in danger of collapse. Even if the chronological order in which I have put my facts is not quite accurate there can he no denying that the circumstances of Great Britain at the time when the National Government assumed office there were entirely different from those of Australia to-day. The British Labour party acted according to its light and the Australian Labour party is doing likewise. We feel that we can make our best contribution to the welfare of our country by maintaining our separate political entity. If the Labour party were to join a national government its organization outside this Parliament would be split from top to bottom. I do not accuse honorable gentlemen opposite of desiring to destroy our organization, but I believe that the interests which control the anti-La’bour political organizations outside of this Parliament are sufficiently Machiavellian to believe that it would be a good thing if the Labour party could be temporarily destroyed as a political force, as it was destroyed after the conscription fight in 1916.

The honorable member for Barker (Mr. Archie Cameron) in the contribution he made to this discussion had quite a deal to say about doves, lambs and moths, and he interspersed those interesting observations with some criticism of the Leader of the Opposition (Mr Curtin)’ for having said, at the outbreak of war, that the Labour party did not favour the despatch of an expeditionary force from Australia to participate in the war overseas. It is true that the Leader of the Opposition made such a statement, but it is also true that he was not alone in the views that he expressed on the subject. Senator Brand, a member of the United Australia party, made some interesting remarks on the same subject in the Senate on the 29th November, 1939, some months after the Leader of the Opposition had made his declaration.

Sitting suspended from 6.15 to 8 p.m.

Mr CALWELL:

- Senator Brand said -

It was unnecessary for the leader of the Labour party (Mr. Curtin) to broadcast to the world that no Australian soldier would be sent to fight overseas. The world situation to-day is quite different from what it was in 1914. There is no likelihood of the formation of another Australian Imperial Force. All our industrial, economic and service defence preparations have one objective - home defence.

Honorable members should not think for one moment that I am visualizing an expeditionary overseas force.

No government would dare to denude this country of its virile manhood unless some extraordinary development warranted such action.

Australia’s defence problem is different altogether from that of New Zealand or any other dominion.

That was the opinion of a member of the party which the honorable member for Barker now adorns. If there he any merit in the criticism voiced by the honorable member it would be directed better at members of the United Australia party than at the Leader of the Opposition. The honorable gentleman said other unkind things about the Labour party to which I shall not refer now. But some criticisms were directed at the Government which is still in office by people who were not Labour propagandists. The honorable member for Barker himself, when he was temporarily out of the Government, spoke caustically of its capacity to govern the country, and of the way in which it was conducting the war. On the 14th October, 1939, the Melbourne Herald, which is an organ of the Baillieu group and the managing director of which, Sir Keith Murdoch, has had a very great influence upon the actions of this Government and, unfortunately, upon the destiny of this country on more than one occasion, stated -

The weakest link in Australia’s defence at the present moment is the Federal Cabinet.

It was seen that Australia depended for its security on -

A navy that could do nothing else but run for safety away from Australia if a hostile battleship entered our waters.

A land army of 35,000 ill-trained citizens, of whom it is estimated about 11,000 are efficient enough to take the field.

An air force that does not possess an efficient modern bombing plane, and that, on the present provisions for replacement, might, with very good luck, last three weeks under war conditions.

The following passage appeared in the issue of the 22nd October: -

There is uncertainty as to the defence deficiences and doubt as to what are the exact intentions of the Federal Government.

The Sydney Morning Herald, the organ of the Fairfax family, said on the 27th October -

Despite the statements by the Minister for Defence (Mr. Thorby.) on the precautions taken in the recent crisis, the fact remains that the emergency demonstrated that Australia was unready to meet attack. Some of the deficiencies that were revealed were: at the end of September the naval squadron was weaker even than it was during the starved years of the depression.

Mr Francis:

– That is not correct.

Mr CALWELL:

– It was stated by a newspaper which put the United Australia party into power in company with the United Country party from 1931 onwards.

Mr Badman:

– The honorable member believes only what suits him.

Mr CALWELL:

– I am merely reading for the edification of honorable members the candid opinions of their friends. On the 31st October, the Melbourne Herald published the following statement : -

The September crisis showed us with great clarity just what our own defences amounted to. It showed us that they were hopelessly inadequate even for protection against raids.

I commend these sentiments to honorable gentlemen who have criticized the Labour party for its attitude towards the war effort. They must remember that for the greater part of the last 25 years the Labour party has not been in power in this country. It had a precarious hold on the treasury bench in this chamber for two years, during which it was dependent entirely upon the whim of the Senate for the passing of its legislation. Therefore, if any just criticism can be made in regard to the deficiencies of our defence forces, it must be levelled in truth against the Government now in office and its predecessors. The honorable member for Wakefield (Mr. Duncan-Hughes), who stated his case very fairly, said that retribution had been coming to us for years. But it is retribution for the inefficiency and ineptitude of the Ministries which he has supported, both in this chamber and in the Senate. If our defence deficiencies be not due to the neglect of the various governments that have held office in Australia in recent years, then the blame must attach to the British Government, or to the British Commonwealth of Nations as a whole. At any rate, “Let the galled jade wince, our withers are unwrung”. We cannot justly be blamed for Australia’s lack of defence preparedness.

Mr Duncan-Hughes:

– I blame the Labour party.

Mr CALWELL:

– If the honorable gentleman has any criticism to make, it should be levelled against the United Australia party because the Labour party has not been in power. The supporters of the Government are blind to the realities of the situation.

Mr Rankin:

– What government suspended compulsory military training?

Mr CALWELL:

– Compulsory military training was in abeyance in fact, if not by official decision, before the Scullin Government took office. After the Scullin Government left office the Lyons Government failed to re-introduce compulsory military training. That step was not taken until the beginning of this year. If there be any virtue in compulsory military training, why did not the governments of the United Australia party and the United Country party bring it into force again before 1940?

Mr Duncan-Hughes:

– Many of us advocated its re-introduction. Was there ever a Labour party man who did that ?

Mr CALWELL:

– It may be that the honorable member and some of his friends advocated the re-introduction of compulsory military training, but the majority of opinion in his own party was opposed to it. Members of the Labour party, particularly in Tasmania under the leadership of the late Premier of that State, Mr. Ogilvie, did support the proposal. Whether Mr. Ogilvie was right in adopting that attitude or not, the fact remains that he was in favour of compulsory military training. The honorable member made no reference in his speech to the fact that, in 1937, the Labour party had the only defence policy worth submitting to the electors. His party might have said something then about depending upon the British navy or building more naval vessels for Australia, but in 1937 we could not afford even to build destroyers, judging by the amount of money that was appropriated for defence purposes. The Labour party, however, submitted a policy which, had it been implemented, would at least have put this country in a better position to defend itself when war broke out in 1939. We should have had aeroplane factories all over Australia, and we should have been in a position to help the British people more than we were able to help them. When war broke out the country’s defences were in a more or less useless and hopeless condition. The main criticism that I have to offer of the governments that have held office in Australia and the United Kingdom in the years since the depression is that they believed that, by building up Hitler and bringing him to power in Germany, they were helping to make his particular “ ism “ a bulwark against communism in Europe. They pursued a mistaken policy and built up a monster. The Bank of England, under Montague Norman, helped substantially to bring Hitler to power. If any man should be criticized because British workers are to-day offering their lives in order to destroy this monstrosity of Nazi-ism he is Earl Baldwin, who, as Prime Minister of Great Britain, refused to re-arm against Hitler.

Mr Archie Cameron:

– What about Ramsay MacDonald?

Mr CALWELL:

– Ramsay MacDonald was Prime Minister of England in 1931, but not in 1933, when Hitler came to power. Earl Baldwin was Prime Minister in 1933 and he, in 1935 or 1936, said that the banks of the Rhine and not the chalk cliffs of Dover were the frontier of England. In 1934, when he had the chance to re-arm, he did not do so. He has since admitted that the reason why he did not re-arm was that he was afraid of losing the general election in 1935. He and the governments of the last few years must accept responsibility^ for failure to make the British Empire strong enough when war came to resist the new order established in Germany.

Honorable members opposite have regaled us with their opinions about inflation. The honorable member for Wilmot (Mr. Guy) gave the first of these dissertations on finance. He quoted extensively from letters written by an obscure doctor, whose only claim to fame is that be lives in the electorate of the honorable member for Watson (Mr. Falstein). Various other honorable gentlemen quoted at length from different tomes and told of the grave dangers that would threaten Australia should inflation occur. The honorable member for New England (Mr. Abbott) became irritable when I suggested that inflation in Germany after the last war might have been caused by a deliberate desire to debase the German currency in order to cheat the victors of Versailles. The honorable gentleman said that he was not in the councils of the German people. I can well believe that he, as a member of the Country party, would not be in the councils of anything but that effete organization. I should like to answer the statements made by those honorable gentlemen to whom I have referred, and the honorable member for Flinders (Mr. Ryan), the .honorable member for Darwin (Mr. Bell), and the honorable member for Barker (Mr. Archie Cameron). The opinions that I shall quote are taken from an orthodox journal which contains what might be termed the authorized version of finance. In the January issue of this publication, which is issued by a leading firm of Melbourne brokers, the following statement appears: -

Despite the fact that the shadow of war lies across the world, the Australian public, in majority, sees a shaft of brightness across the Commonwealth. There is a widespread belief in industrial and trade circles that Australia will benefit from the war; that a moderate amount of inflation must benefit producers and commodity-holders; that cheap government money must lighten industry’s burdens. It is a comforting compound belief, but events may force its modification.

Although the following additional quotation from the same issue of that publication may not have any relation to inflation, it shows the way in which those rapacious persons who manipulate stock exchanges, and control our financial institutions, take advantage of the nation’s needs and lay the foundations for the new wealth that they hope to make in this war. Regarding market movements during 1939 this journal published the following : -

Net gain over the year in the stocks listed was almost £12,500.000 and approximately that amount of appreciation was shown by Broken Hill Proprietary Company Limited, Australian Consolidated Industries and Colonial Sugar. Broken Hill Proprietary Company Limited accounted for more than £8,000,000 and Australian Consolidated Industries and Colonial Sugar each for more than £2,000,000.

In its next monthly issue, this journal, which I study very closely, and from which I hope always to be able to quote, to the consternation of honorable members opposite who bluff themselves with quotations upon inflation, says -

Unbridled inflation is a remote danger so long as we have stable government. Credit expansion - yes. But credit expansion that will be used with discretion.

At the end of the next column the following appears: -

It is possible to continue expansion without inflation so long as there are unused resources of labour and capital. Danger point is where, the machinery of production being fully employed, credit expansion ceases to stimulate production but instead leads to competition between the Government and private enterprise for the available resources in the community and thus raises prices, which results in costa rising, wages increasing and teo along the vicious spiral.

I prefer the opinions of a member of the Melbourne Stock Exchange to those of the scaremongers who have written books concerning what happened as the result of inflation in Germany, Russia, and other countries after the last war.

The honorable member for New England (Mr. Abbott) recited an interesting story in relation to the basic needs for a successful imperialism to-day, particularly in the matter of coal and iron, as well as essential non-ferrous metals. He spoke of damping down the production of certain commodities so that we might have more to spend on our war effort, and concluded by saying that we should have to use fewer refrigerators, motor cars, and many other articles about the possession of which the majority of those who sit on this side of the chamber know little or nothing. I agree with the honorable gentleman that there must be a damping down of the production of certain commodities in order that more material as well as money may be available for war needs; but his opinion is in conflict with that of his distinguished Acting Leader (Mr. Eadden), who, in reply to a deputation at Bendigo last Sunday week, said that he preferred that £1 should be spent by private enterprise rather than that £3 should be spent by a government.

Mr Rankin:

– By some governments.

Mr CALWELL:

– When the honorable gentleman was questioned in this House he fell back, as the honorable member for Bendigo (Mr. Rankin) frequently does, on second thoughts, and changed the expression to “some governments.”

Mr Rankin:

– I was present and heard what he said.

Mr CALWELL:

– Then the press hae been distinctly unkind to the acting leader of the honorable gentleman’s party. I do not know whether the. Melbourn newspapers entered into a conspiracy to misreport him. I can only quote from the report that they published. It will be seen that two great minds in the Country party cannot agree as to what is needed in the regulation of investment, in order that this country may make a maximum war effort. I bear no malice towards honorable members opposite; any criticism that I offer is purely impersonal. I hope that they will bear with me as I bear with them. In the spirit of the scriptural injunction - I suffer them gladly. If honorable members opposite had stated their definite intentions on war finance before they went to the last elections, there would be fewer of them on the Government benches to-day. In justice to the people, they should have made their intentions clear.

I believe it was the honorable member for Wilmot who related the results of the investigations into nutrition, or the lack of it, in England, by Sir John Orr. Committees and, I believe, commissions have inquired into the matter of nutrition in this country. Those committees, which have consisted of the most distinguished scientists in Australia, have produced voluminous reports; but this Government and its predecessor have taken no action on the data placed before them, nor have they taken any cognizance of the recommendations that have been made. Speaking subject to correction, I believe that a nutrition committee reported that 25 per cent, of the children of Australia were malnourished. If that be so, it is an awful reflection on our boasted civilization, and a terrible commentary on our vaunted Christianity. Whether or not the observations were the result of investigations all over Australia, or only over part of it, it is. true that malnutrition is widespread, and is particularly bad in the industrial centres. It may be even worse in Sydney than in Melbourne, but I should not think so, because in. New South Wales there is a system of child endowment which makes the lot of the family man a little easier. With the honorable member for Henty (Mr. Coles), I am a member of the Melbourne City Council, which employs medical officers who from time to time investigate ‘health conditions and report results to the Health Department of the council. I quote from a report presented to the Health Department by Dr. Hilda W. Bull in 1935 :-

Curing the absence abroad of Cr. Hilda Kincaid, the medical officer in charge of the child welfare work in the city, I had the privilege of carrying on the pre-school section of her work, and I would like to express my appreciation of the excellent! organization in which she was a pioneer.

I feel that the standards arrived at by Cr. Kincaid are a definite contribution to the health statistics of children of “ pre-school “ age, and any variation in my figures would be due only to slight personal adjustments. I propose, therefore, to give instead, very tentatively, some figures for certain co-relations between abnormal conditions - such as the simultaneous occurrence of malnutrition, anaemia, heart murmurs, defective teeth and tonsils, rickets and allied bone conditions - not making any claim for a cause and effect relationship, but to see if any useful line of inquiry might be suggested by these comparisons.

She went on to point out that the records related to 1,009 separate children who had received medical examination. In addition, 200 children who were attending kindergartens were medically examined, but not being centre children whose progress could be watched from year to year, they were not included in the report. This is what she said in elaboration of the details of her investigations -

Of the children examined, 22 per cent, were between two and three years of age; 27 per cent, between three and four years; 27 per cent, between four and five years; and 24 per cent, between five and six.

As compared with the figures of former years, there is a very slight decrease in the percentage of children at all ages who show evidence of malnutrition in that they are 7 per cent, or more below Emerson’s standards, which is the standard adopted in previous reports. The figure was 20.4 for 1934 and 25 for 1935. At the same time there is a drop in the percentage who are 7 - 20 per cent, above this standard, from 23,2 to 1<5 per cent.

Dr. Bull continued ;

The lack of balance in 4die diet, duc perhaps to the practice of appeasing the hunger of growing children with excess of carbohydrate, is another disquieting feature. The pale, puffy, even slightly overweight child, with continual catarrh, colds, and chronic bronchitis, came to be such a familar type thai) it could be recognized as it came through the door and must indeed be regarded as malnourished in the literal sense of the word.

The increasing evidence of malnutrition with age is very marked. At two years of age,. 16 per cent, were under weight; at three years, 18 per cent. ; at tour years, 23 per cent. ; and at five years, 43 per cent.; were malnourished as judged by Emerson’s standards.

It is obviously more difficult to feed a child on a restricted income with every year of its growth. The milk and cod-liver oil provided by the council form a larger proportion of an infant’s diet, than that of an older child and we were forced during the year to reduce the supply to the older children so as to keep within the estimated cost.

After referring to the desirability of endeavouring to provide one pint of milk for each child each day, she said -

Every parent was advised to provide a pint of milk for each child every day, and poverty, not ignorance, is surely .the main, if not the only, reason for its omission.

If we are to tackle effectively the defence of this country both now and in the future, we must make sure that no child starves. It would be a gross impertinence should any honorable member opposite suggest twenty years hence, if still a member of this Parliament, that any one who to-day is malnourished should don a uniform and fight for this country. We have no right to ask children of to-day to fight for a country which starves them when they are young. This Government can now find ?186,000,000 for purposes of war, yet in 1934 and 1935 its predecessor could not find any sum in order to subsidize the State Governments and municipalities which wanted to give sufficient food to the children of Australia to enable them to grow up strong and healthy. That Government then said that the money was not available, and that if it were demanded an impossible strain would be placed on the banking institutions. It washed its hands with invisible soap and said, “ The responsibility belongs to the .State Governments”. We must have a child endowment scheme, not when the war is over but now. It is up to this Government during this session, by the use of all the powers that it possesses, to produce such a scheme. Mr. Bruce, when Prime Minister of Australia, went to Dandenong, Victoria, on the eve of the 1925 elections and made the following statement: -

The question of child endowment is of vital importance. The man with a family, is the greatest asset to the country and it is essential and desirable that the greatest encouragement and assistance should be given to such men. It is proposed to refer this question to the Commonwealth and State Arbitration judges with a view to their recommendations being considered at a conference between the Commonwealth and State Governments in the hope of evolving a national policy.

The Government led by Mr. Bruce won that election, and subsequently appointed a royal commission on which the present Leader of the Opposition (Mr. Curtin) served with conspicuous success. That body submitted a report to the Government, but with the callous indifference which, on occasions, Mr. Bruce exhibited towards the needs of the poorer section of the community, he went to South Brisbane on the eve of the next elections in 1928, and on the 16th October of that year said -

To provide childhood endowment of 5s. a week for each child in the Commonwealth up to the age of sixteen years would mean a cost to the nation of £24,000,000 a year. It would be imposing an immense financial burden on the people. The effect would be that the cost of production and the cost of ‘living would he so increased that the women would be able to purchase no more than they did before, despite the extra amount of money they would have, to spend.

I have not seen so many sophistries compounded in one statement. [Leave to continue given.] Since 1928 every succeeding non-Labour government has declined to bring child endowment within the range of practical politics. The royal commission which inquired into the matter did not recommend that endowment should be paid in respect of every child, and the cost mentioned by Mr. Bruce in South Brisbane was intended to frighten the people. We must distribute the wealth of the community more evenly if we are to survive after the war. On every hand we see increasing mechanization of industry in all the processes of production and distribution. Machines are being invented to do the work of men. The creative genius of mankind is being utilized to make a few people richer, and to bring the masses of people nearer to the sustenance level. Unless we can make the machines the servants of the people instead of their masters, we shall soon have here conditions similar to those, in European countries, conditions that have been responsible for so much suffering and bloodshed. If we are to prove that the British race has the genius and capacity for government, and for solving the problems of every-day life, we must ensure that the owners of the machines do not appropriate all the benefits from the workers. Machines have been invented, and are in use in Australia to-day, which do the work of five, ten, fifteen or twenty men. Those displaced workers must be kept by somebody. Unemployment relief taxes have been imposed in every State largely to deal with technological unemployment, and to provide sustenance for men thrown out of work by machinery. I do not suggest that we should destroy the machines, as the workers in England wished to destroy the powered cotton looms in the time of Stevenson and Watt, but I say that the benefit of the machines must go back to the workers in the form of reduced hours and increased social services. It may not always be desirable to keep on raising wages. It may be better to give to the workers the benefit of their production in the form of social services such as child welfare centres, child endowment, kindergartens, creches, free medical assistance, and free hospitals. We look in vain for any liberal statesmanship from the present Government in regard to these matters, but they are very live questions to-day. According to the last census figures, a great number of people in Australia are living on the basic wage or less, and they are the real Australian people. The silk-skinned sybarites who congregate in the clubs and fashionable hotels of Sydney and Melbourne are not the real Australians. They are degenerates. The real Australians are the men and women who work, whether with their hands or with their brains, whether with their coats on or off, whether they push a pen or swing a pick. The struggling farmer to-day is working, not for himself, but for a variety of other persons. He works first for the bank which holds the first mortgage on his property; then he works for the solicitor, or whoever holds the second mortgage. After that he works for the firms which supply him with machines and superphosphates, and then for the local storekeeper, who tides him over hi3 worst periods, while the storekeeper is in turn working for the wholesaler and the banks. Farmers to-day are being driven off the land by these conditions. There are relatively fewer people on the land to-day than there were twenty years ago, and they are drifting to the cities all the time. It is not economically healthy that one-half of the population of Victoria should be in the capital city of the State, and the same drift is apparent in the other States also. There must be a revaluation of the land. It was a tragedy for Australia that the land should ever have been alienated. In Victoria, no less than 86 per cent, of the land has already been alienated. It would have been far better for the community if the land had remained the property of the Crown as it is in the Australian Capital Territory, and had been leased at a suitable rental to those who used it. I disagree with the honorable member for Wakefield (Mr. DuncanHughes) when he says that the Commonwealth land tax should be modified. I think it is fair to tax the big city property owners who have grown wealthy on the values created by the community. I recognize that some hardship may be inflicted upon men in the country who have suffered from drought, but the city property owners have no such difficulties to contend with.

When the Prime Minister was speaking I made an interjection which I intended to be helpful, but he misunderstood me, and replied that he would place at my disposal a very extensive library, and the services of treasury officials, to give me an elementary training in public finance. I thank him for that offer, but I have no need of his services. I spent seventeen and a half years in the State Treasury in Victoria. I know much more about public finance than he does, and if 1 had the time and opportunity I could tell something of the budgets presented to the Legislative Assembly of Victoria by the Governments of which the right honorable gentleman was a member, when I was on the Victorian Treasury staff. The Prime Minister is not a very know ledgeable man, though he speaks well from a brief. He said that it was his party which had always increased old-age pensions. I have taken the trouble to trace the history of old-age pensions in Australia. The first measure was introduced in the Federal Parliament in 1908 by the Deakin government. The Labour party was not in power when the act was passed, but it forced the Deakin Government to put it through. Otherwise, that Government would have been thrown out of office. Senator Mulcahy, a Liberal senator from Tasmania, speaking on the 3rd June, 1908, left no doubt as to who was responsible for the inauguration of the old-age pensions scheme. On that occasion he said -

After a certain meeting of a certain party, it was made known that the Deakin Government would be allowed to remain in office for the time being provided that what was required of them was done.

I am prepared to give the Labour party every credit in the matter, and I assert that if a scheme for the establishment of old-age pensions is approved this session, the whole of the credit for it will be due to the Labour party and not the Government.

Senator Sayers, from Queensland, expressed the same opinion, and Mr. W. Knox, who then represented Kooyong, the present Prime Minister’s electorate, made the following statement, also on the 3rd June, 1908:-

Some time back the Leader of the Labour party took the business of the House out of tha hands of the Government and moved a bill. He now points out that within six weeks the Surplus Revenue Bill and this motion directing Ministers to bring in this bill have been introduced to do what was demanded.

In 1925, the then Prime Minister, Mr. Bruce, increased pensions to £1 a week as an election bribe, but it was not necessarily because he believed that the pensioners were entitled to the increase. When a later parliament reduced pensions from 20s. to 17s. 6d., every member of the Nationalist party voted for the reduction, and when that party came into power in December, 1931, it took stock of the situation, and reduced the pensions from 17s. 6d. to 15s. a week, and put a pauper tag on them. If the Prime Minister wants to tell the story of pensions, he should start at alpha and finish at omega. He should not merely select one part of the story as supplied to him by the Treasury. Of course, the present Government will claim the credit for increasing pensions, just as the Country party will claim the credit for having obtained an extra £2,500,000 for the wheat-growers, and an extra 3d. a bushel on the price of last season’s crop. Th truth is that the Labour party is the only political force which has consistently stood for progress. It is true that the Labour party has not always been able to give effect to its programme, but we have popularized our demands so that it has become politically dangerous for the government of the day to deny our just claims. It does not matter very much, after all, who effects the improvement, so long as it is made. If it were not for the dynamic force of the Labour party, the lot of the mass of the people would not be so good as it is. It is not yet so good as it ought to be, or as we desire it to be. Unfortunately, because of the highpowered propaganda of the enemies of the people, government after government opposed to their interests has been able to snatch political victory. The people have been persuaded that it is less dangerous to put a conservative government into office than a Labour one. If the facts were appreciated by the people, there would never be any other but a Labour government in power, and it surely would not be necessary for us to do a great deal in order to surpass the achievements, for what they are worth, of our predecessors.

I have here an article from the Melbourne Herald of the 28th December, 1939, reviewing the operations of 678 Australian companies which published their balance-sheets. Discussing the increased profit-earning of some of those companies, the writer stated -

Noteworthy higher announcements were Australian Motorists Petrol 25 to 150 per cent; General Motors-Holden’s nil to 55 per cent.; Goodyear 10 to 20 .per cent.; Industrial Acceptance 12) to 20 per cent.; and Sigma 27) to 30 per cent. None of the ordinary capital of these companies is listed on Australian Stock Exchanges.

Biggest and most spectacular announcement of the year was the bonus issue of the Broken Hill Proprietary Company Limited. Shareholders will receive 64 bonus shares for every 100 shares held. The transfer, which will involve £4,459,790 of new shares, is expected to be made early in the new year.

This issue will rank next in size to the Colonial Sugar Company’s record bonus of £5,850,000 in 1934.

Despite these statistics, the Government contends that no profiteering is occurring. When the people realize the true state of affairs, they will declare emphatically that the Labour party must govern Australia.

The CHAIRMAN (Mr. Prowse).Order! The honorable member has exhausted his time.

Mr WILSON:
Wimmera

.- My attitude to the issues arising out of the budget is dictated solely by motives of grave concern for the welfare of Australia and the British Empire. The tragic war in which we are now engaged can be brought to a successful conclusion only by the establishment of unity of purpose and action, which, hitherto, has been lacking. I am satisfied that it is not possible for the Government, as at present constituted, to supply the elements of accord and driving force which are necessary to ensure that Australia will pull its fair weight in the tremendous effort that is demanded of all sections of the community. If the British Empire is to preserve the ideals of a democracy, without which civilization would be a sham and a delusion, Australia must have a government which will conduct national affairs in such an equitable manner as to inspire the country to achieve its maximum war effort. In my attitude to these problems, I seek, not personal aggrandisement, but only the privilege, as a private member, of rendering service.

In a time like the present, the responsibility devolves upon me to examine critically the policy and administration of the Government, and to cast my vote in a way which will best serve the interests of the nation. I deplore the difficulties, indefiniteness, and lack of stability in government which are caused by the present composition of the House. Responsible citizens demand that Parliament shall at once resolve itself into a cohesive body in order to direct the affairs of the nation. If this should necessitate, at any time, a change of government, let us have the transition as quickly as possible. A great deal of misunderstanding exists in the public mind, because people believe that a change of government will lead to serious interference with the war effort and general administration. In my opinion, such, a view is erroneous. Even an election is unnecessary to clarify the position. If an election had .been precipitated as the result of the recent budget crisis, a grave responsibility would have rested upon those who advised His Excellency the Governor-General to dissolve this House.

A good deal of criticism of members of the Opposition has emanated from supporters of the Government. They contended that the Opposition is hopelessly divided. I hasten to add that the Government parties are as hopelessly united as the Labour party is divided. Several possible courses have been proposed to ensure stability of government, including the formation of a national Ministry comprising members of all parties. Although such a proposal has much to commend it, hope for the adoption of this solution seems to have faded. The honorable member for New England (Mr. Abbott) made a most constructive suggestion when he declared that stability might be secured by members of the House of Representatives electing the Prime Minister, and by having a Cabinet composed of the outstanding personalities of all parties. The value of such a suggestion could, with advantage, be examined in any future crisis. Of his own volition, the Prime Minister (Mr. Menzies) created a few days ago a position which was amazing and untenable, and which, if persisted in, could have been resolved in only one way. A government without a majority has introduced a. budget which imposes upon the people a burden the like of which has never been known in Australia. The Government, in effect, declared to the representatives of the people assembled in Parliament: “That represents our last word in the matter. Take it or leave it “. Such an attitude leaves to me, as a democrat, only one course.

I do not desire to enlarge upon the importance to Australia of the wheatgrowing industry. Although, at present, difficulties of marketing are tremendous, I am convinced that at the conclusion of the war, the industry will regain many of its lost markets and find a number of hew ones. That will enable it to play a leading part in the development of agri culture and land settlement in Australia. Recently, the Prime Minister declared, in effect, to the 50,000 families which are engaged in wheat-growing : “ The Government cannot pay you an extra 3d. a bushel for your wheat, which it acquired under special authority vested in it by the National Security Act. I know that the payment which you have received does not cover the cost of production and that you are unable to meet your obligations to your storekeepers and mortgagees, and pay your rates and other charges. I also recognize that your farms have been desolated by the ravages of drought this year, that country towns are being deserted and that many of them will become ghost towns if the problem be not grappled with immediately. This year the Government will expend £280,000,000, principally on the prosecution of the war, but it cannot provide an additional £3,000,000 in order to give to you a living wage in order to maintain your morale and provide you with homes. I am sorry, but 1 cannot help you”.

The declared policy of the Government appears to emphasize that only a limited amount of money is available for all purposes, including the prosecution of the war. That is what the bankers would have us believe. They desire to continue to regulate the amount in circulation as they have done in the past. I hope that, presently, Australia will have a government with sufficient courage to utilize the resources of the country for purposes of both war and peace. That is possible without inflation. According to orthodox finance and to the balance-sheets of financial institutions, there was in circulation before the war a certain amount of money in various forms. If we are to conduct the war successfully, that amount must be greatly augmented by an expansion of credit from time to time. The point in dispute is the maximum limit to which credit can be expanded with safety, and the form of control that shall be exercised over it. People require to know whether such control is being exerted by the nation in the interests of the people, or by private financial institutions for their own profit. As that question is paramount in the minds of electors who want to know the truth, I recently asked the Government to institute further inquiries into this all-important subject, covering matters which were not investigated by the Royal Commission on Monetary and Banking Systems. I trust that the Government will hasten to give effect to this suggestion, because people consider credit expansion is essential for the conduct of the war, and the effective organization of the country. In addition, it is vital for the great reconstruction and development, which we believe will come at the conclusion of hostilities.

The Government’s taxation proposals disclose a lack of understanding of the living problems of people who have difficulty, even at the best of times, of making ends meet. Nor are the proposals based on consistency, or on an appeal to reason. It might almost be said that the Government is concerned more with the welfare of the “ poor “ man on the dole of £40,000 a year, than with the interests of another person on the magnificent pittance of £151 per annum. As I prepared this speech prior to the compromise which was reached between party leaders last week, I ask honorable members to accept my criticism in the light of that knowledge. Examining in detail some of the proposals to increase the income tax, I discovered striking evidence of the Government’s deep and abiding concern for those best able to bear the augmented burden, whilst those in a less fortunate financial position are, to their sorrow, remembered. I shall commence my examination at the point at which the statutory exemption on income derived from personal exertion disappears, namely £300. The following table reveals the effect on incomes of the budget proposals: -

Mr Hutchinson:

– The tax is already 14s. in the £1 on some incomes; if that were doubled it would be 28s. It is obvious that the honorable member is absolutely misrepresenting the facts.

Mr WILSON:

– I challenge the honorable member to dispute these figures.

Mr Paterson:

– But the figures do not mean anything.

Mr WILSON:

– If honorable members say that the figures do not mean anything, that they cannot understand them, and that they are unwilling to accept my assurance that I can substantiate them, I am sorry for them. I shall continue my comparison -

Again I refer to the poor fellow on £40,000 for whom the increase is 37 per cent., the lowest of all. Despite the vehemence of the advocates of the wealthy classes, this is a satire on the sentiment of equality of sacrifice. The poor individual who has an income of £40,000 will pay in taxes, without exemption, about £19,600, instead of about £14,200 as formerly, and will still be left a meagre pittance of over £20,000 a year on which to exist. On the other hand, the man with an income of £300, without exemption, will pay £15 instead of about £2 2s. as formerly, leaving him the princely sum of £280 on which to live a life of luxury. These illustrations are given to show the judgment and acumen, if not the callousness, with which the Government has framed its taxation proposals.

I come now to the tax on property. For many years it has been the accepted practice for the Commonwealth to charge higher rates of tax on income from property, including rents, dividends on shares, &c, than on income from personal exertion. On looking over the proposals to raise additional revenue, we find similar syllogistic reasoning. Among those receiving an income from property of £200 per annum are many people who have been wage and salary earners all their lives, and who have invested the savings of their labour in cottages, shares in public undertakings, and loans. They impose no charge on the Commonwealth for pensions or relief because of their thrift and savings. The property tax is levied in accordance with the following scale : -

If it is sound in principle to tax those in receipt of only £200, at a rate 25 per cent, higher than that applicable to personal exertion, by what stretch of the imagination can the rate of only .38 per cent, be justified in connexion with a meagre income of £40,000 per annum? Other inconsistencies just as glaring as this could he cited. But these instances are sufficient to prove that no really serious attempt has been made by the Government to apportion fairly the responsibility for financing the needs of the Commonwealth on the basis of ability to pay and equality of sacrifice. In its proposals for the war-time company tax the Government has attempted to pander to what it evidently regards as public prejudice. “Whilst an attempt to limit the profits of large public companies may have some semblance of merit, most small proprietary companies which are really partnerships with limited liability will be unduly hit because their ability to earn substantial profits is dependent on the specialized knowledge and ability of the members contributing the actual capital employed. Otherwise, it seems that the Government is avoiding anything in the nature of unorthodox procedure in finance as though it were the plague. It is doubtful whether it has even heard of the proposals of that eminent economist, J. M. Keynes, who advocated that where the raising of money from lower incomes is unavoidable for the prosecution of the war effort, the sums collected in that way from salaries and wages should be loaned to the Government at low rates of interest for the period of the war. The idea behind his suggestion is that the loans, which would be redeemed after the cessation of hostilities if neces sary, would be some assurance for the workers against the rigours of unemployment which might follow the war. The spending power thus preserved would also assist in the rehabilitation of normal industry. There is some unbalance in the Government’s proposals in that too heavy a strain is being put upon the taxpayer, the general public, and industry by means of taxation as compared with what might be done in the way of expansion of credit and the provision of finance through the Commonwealth Bank. The Treasurer said in his budget speech that the Government’s policy has been steadily directed towards lower interest rates. Since the war, the yields on government securities have fallen on the average by 1 per cent, and it is true that the rate of interest paid by the private banks to depositors has been reduced, but apparently the Treasurer is so ill informed that he doc3 not know that the overdraft rates for customers of the bank have been increased in many instances. Thus the war situation is being exploited by the private banking institutions. All this points to the necessity for the alteration of the control of our banking system so that the credit resources of the Commonwealth may be more effectively marshalled for the effective prosecution of the war as well as to finance the activities of the Government now and later. To support that view it will be sufficient if I refer to the classic illustration of “ money from home “. Apart from fixed deposits on which 100 per cent, profit is made in re-lending, many millions of pounds is constantly standing to the credit of customers in the private banks, on which no interest is paid. This money is loaned to the Government on treasury-bills and bonds, and, in addition, interest-free credits are loaned to other customers on overdrafts. These loans are made, not on shareholders’ capital, but on the credit of depositors. But worse than this is the power bestowed on the private banks to cause booms or depressions by reducing advances. A great deal more could be said on this subject of banking, but it is not my intention to-night to go fully into the matter. I hope during the life of this Parliament to have an opportunity to deal more exhaustively with some phases of it.

The Commonwealth Government has set up a body to control prices. Such is the avariciousness of human nature that even in time of war and national distress there are those in the community who are prepared to exploit their fellows to the utmost. The shortage of supplies of any commodity that can he produced in Australia should not hu allowed to inflate prices. The law of supply and demand is not immutable and should not be so regarded. Prices can and should be controlled. They should not he allowed to be raised because of increased money circulating through war and defence expenditure. Such money does not represent the cost of civil production, and prices should not be increased because of increased demand. There is no justification for increasing the selling prices of consumption goods. Profiteering, particularly in foodstuffs and everyday commodities, must be rigidly controlled. Speculators must not be tolerated. It is the duty of this Parliament to see that the Commonwealth Prices Commissioner shall carry out his duties impartially, and that penalties shall be imposed on those who disobey the law in this respect. Wholesale and retail prices should be published weekly in the daily press and the people should be urged to see that they are not being robbed. Increased turnover should make it possible to lower rather than raise prices. Wasteful advertising and canvassing should be done away with, and those engaged in wasteful occupations should be employed in war work or civil production.

The Government has declared that it has done everything possible to stimulate our war effort, but it appears to me that at a time when we should all be marching forward unitedly, the political parties have been wasting their strength in a kind of political tug-of-war. An acceleration of our war effort is urgently required. To this end, I suggest that more effective use could be made of the full-time services of first-class executives and persons with highly developed technical skill and experience in industry. I am well aware that the Government has appointed many people to boards, advisory committees, and the like, but it appears to me that the majority of these persons are merely figure-heads, although they are supposed to be directors. The complete marshalling of our machinepower and man-force is essential for a supreme attack upon the enemy. I am sure that I have not been alone among honorable members in observing the muddle and almost casual activity in many so-called munitions annexes and other establishments engaged in work for the Government. We need some one in charge of the affairs of this country with the driving power of a Churchill, but so far the times have not produced the man. Our great lack is expert technicians with wide experience of production. Until such men are put in charge of our various defence operations, and the figure-heads at present in office removed, our war effort will continue to be unsatisfactory.

The decision of the Government to appoint Mr. Olive McPherson to the position of director of the new wheat stabilization scheme is to be deplored. It is simply amazing to me that the Government should have continued for so long its policy of patronage of its political friends and confreres. I have no desire to criticize Mr. McPherson personally. Every body knows that he is already a member of numerous boards and committees. He was at one time chairman of the Closer Settlement Board of Victoria, and in that capacity was largely responsible for the removal of many persons from closer settlement areas in Victoria. Part of my own electorate in the Mallee felt the effect of his activities.

Mr Archie Cameron:

– It is a great pity that he did not remove more people from the honorable gentleman’s electorate.

Mr WILSON:

– The honorable member for Barker (Mr. Archie Cameron) did very well for his own State of South Australia in connexion with the allocation of moneys by the Commonwealth for the removal of wheat-farmers from marginal areas. I have no doubt that his activities served him well on last election day. At any rate, the honorable gentleman left Victoria high and dry. That State received no allocation, although its people contributed a large proportion of the total sum distributed among the

States. Mr. McPherson is, I understand, the managing director of Younghusband Limited, a big wool broking and pastoral firm. He is also a member of the Dairy Produce Control Board, chairman of the Australian Wheat Board, a director of the Commonwealth Bank, and a member of the Phosphates Commission* This list of Mr. McPherson’s membership of boards and committees is far from complete. In the circumstances, the Government could surely have found some other suitable person to put in charge of its wheat stabilization scheme. I shall reserve my remarks on the details of the scheme for a later occasion.

The Government should take action with the object of exercising some control over newspapers and commercial broadcasting stations, so that they will not be able to attack public men as they have been doing of late. The time is not distant when Parliament itself will be compelled to protect candidates during election campaigns. At present, it is a common thing for candidates to he subjected to bitter criticism by powerful newspaper interests and the propagandists of commercial broadcasting stations. It is becoming more and more the custom at election time for these instrumentalities, either of their own accord or for payment, to bring their heavy artillery into action against both individual candidates and particular parties. Much of the comment published in the press or broadcast over the air is totally unfair, yet the unfortunate victims of it are denied any opportunity of effective reply. I hope that this Government, or a succeeding government, will take steps to deal appropriately with this matter. The persons attacked should at least be given proper facilities to make their replies. I feel sure that the honorable member for Barker will agree with me in this connexion.

Mr Archie Cameron:

– I suggest that I he given charge for about a week.

Mr WILSON:

– Another matter crying out for attention by the Government is the unsatisfactory procedure in connexion with the letting of defence contracts. Although time is such an important factor and we have many serious problems with which to deal in providing for the defence of this country, apparently nothing has been done to obviate unjustifiable delay in the letting of defence contracts. A soundly-based costing system should be put into operation at once bo that orders may be placed for defence work without the necessity for moving the cumbersome official machinery that at present is impeding production. I have heard that in some instances 50 or 60 forms have had to be filled in by tenderers before contracts have been obtained. This procedure is bad enough in peace-time; it is absolutely dangerous in war-time. It has taken months, in some instances, to let contracts for important defence jobs. If a proper costing system were adopted, finality could be reached quickly, jobs given to firms without delay, and the production of defence equipment accelerated.

The centralizing of defence activities and expenditure in our capital cities is also to be deplored. Under the existing procedure, boom conditions exist in certain State capitals while rural areas within those States are languishing. I make no claim to be a military expert, but I am confident that if Australia were to be subjected to raids by enemy aircraft we should rue the fact that so many of our defence establishments, including camps for the training of troops, are situated near our coasts and adjacent to our capital cities. For strategical and many other reasons, this policy is definitely dangerous, and the Government should review it without delay. Many of our larger country towns have wellequipped machine shops and factories of one kind or another which could be profitably employed in the production of war equipment and munitions. The Government should make an immediate investigation of these resources with the object of decentralizing its manufacturing for war purposes.

I notice that the amount proposed to be provided for the Council for Scientific and Industrial Research for the current year is only £90,000. A country which has so many problems to solve as Australia should be spending a great deal more money than the Government is proposing to provide for scientific development of its industries. We lag far behind most other countries of the world in this regard. Our population at the moment is 3mall, but surely we all visualize a great future for Australia, and we should therefore be striving with all our might to establish our industries on modern and scientific lines. The amount of £90,000 for industrial experimentation and research is so inadequate as to justify a vote of censure on the Government.

I regret that so little is being done in Australia to encourage the production of power alcohol. Although we have a petrol rationing scheme in operation, one of the purposes of which is to conserve petrol supplies for defence purposes, practically nothing is being done to investigate local resources for the production of power alcohol. A few days ago I had the privilege of investigating certain experimental laboratory work of a chemist who has been producing fairly large quantities of power alcohol from wheat. He has also been producing other by-products of value to the nation. Figures made available to me showed that the power alcohol was costing only between 9d. and ls. a gallon. I hope that the Government will cause an investigation to be made of the practicability of producing power alcohol from wheat on a commercial scale. I shall be glad to make available all the information I have on the subject. Both our defence and normal industrial needs justify a complete examination of this subject, particularly as we are facing serious difficulty in exporting our wheat overseas.

It is to be regretted that no reference appears in the budget to the need for postwar reconstruction. We should now be giving attention to this important subject. Although we do not know how long the war may last, we could be making preparations to meet post-war conditions.

Mr Duncan-Hughes:

– The Minister for Labour and National Service (Mr. Holt) spoke this afternoon on post-war reconstruction.

Mr WILSON:

– That does not alter the fact that no financial provision is proposed in the budget for this purpose. A committee of thoroughly qualified men should be appointed forthwith to examine this question and make recommendations to the Government. After the war, Australia is likely to receive a great many new settlers from the United Kingdom, and, possibly at a later date, from other countries of Europe, and we should now be considering how we may absorb them in useful occupations. The Government should set the necessary machinery in motion at once.

As I see it, in this war the men in the workshops are equally as important as the men on the battle-fields. It does not appear to be probable, at present, that vast numbers of men will be engaged in military operations under conditions similar to those of the last war. As the production of munitions is of such great importance, the Government should be doing everything possible to stimulate these activities. We cannot rely upon the Mother Country to supply our needs. We should be doing our utmost to train men for all classes of technical work. In particular, we should be providing facilities for the training of the lads who year by year are leaving school, so that they may be able, in due time, to take their part in what I shall describe as this factory war. [Leave to continue given.]

We have so many problems to deal with in these times that it is not possible for me to discuss all of them, but I shall refer briefly to the apple and pear acquisition scheme. I have received many letters from apple and pear growers who appear to think that my position in this chamber is such that I am able to come to their aid by forcing the Government to yield to their demands. My knowledge about the apple and pear industry is somewhat limited, but since the inauguration of the acquisition scheme, apples and pears have been much more costly to the general public than they were before, and there has been a great deal of dissatisfaction amongst the growers. Recently, I attended a conference of orchardists at Mildura at which a large element among the growers was very hostile to the scheme. Nevertheless, I advocated the continuance of the scheme in spite of the difficulties that have been experienced in its first year of operation. There have been some losses and mismanagement, but I trust that in future the experience that has been gained at such cost will be used in order to ensure that mistakes will not be repeated. I believe in organized marketing. The position of the apple and pear industry would be very much worse than it is if the scheme had not been brought into operation. I appeal to growers to have patience, ‘because I have no doubt that ultimately the scheme will be improved and will work to their entire satisfaction.

I refer once again to the present wheat season. Much emphasis has been placed upon the problem of marketing that has been caused by the lack of shipping accommodation, and the lack of buyers. It would be a serious problem if we had a large surplus of wheat, but, as I see the position to-day, there may be a shortage of wheat in Australia twelve months from now if we experience another very dry season. This is not a remote possibility, because the United States of America experienced drought conditions in three successive years - an unprecedented series of disasters in that country. We may even be faced with the necessity to import wheat. Therefore, the Government would be wise to plan a few years ahead and arrange for the storage of supplies for at least twelve months in advance. That has been attempted in the United States of America, which has done much more agricultural research and experimental work than Australia. The United States of America is aiming at what it calls “ the ever-normal granary “ - a method of retaining a twelve months’ supply of grain on the farms. I hope that I shall have the opportunity to enter into discussions with the Minister for Commerce (Sir Earle Page) and some of his officers when the marketing scheme is being evolved. I am a wheat-grower and I understand the growers’ problems probably as well as any other man in Australia, and I should like to contribute practically to the formulation of a satisfactory scheme.

I hope that the Government will be democratic in its outlook and give serious consideration to all of the recommendations that have been made by honorable members on both sides of the chamber, so that, as far as possible, its legislative programme may satisfy their wishes. If that be done we shall all contribute materially to the nation’s war effort and the improvement of our economic standards. This would prove our sincere belief in democracy and ensure the true expression of our democratic principles.

Mr ANTHONY:
Assistant Minister · Richmond · CP

.- I listened with a great deal of interest to the speech made by the honorable member for Wimmera (Mr. Wilson). Doubtless, honorable members would have listened with even more interest had the speech been delivered at a critical stage of the party negotiations that took place in Canberra last week. However, the effect of his speech upon me would have been no different; the honorable member is entitled to express his views, and if the Government’s tenure of office had to depend on one individual advancing sectional views, before the interests of the nation as a whole, I would prefer to see it go out of office.

Mr Wilson:

– I would never do that.

Mr ANTHONY:

– I do not make that charge against the honorable member, but there is a grave danger, at the present time, owing to the numerical equality of parties in this chamber, that sectional interests may be advanced in preference to the broader and more important interests of the nation. We all know the recent and tragic story of the defeat of one great democracy. We can learn much from it. The people of France spent much time in debate; certain sections endeavoured to avoid the sacrifices that they knew were required of them ; other sections tried to transfer their responsibilities to others. The net result was that, when the hour of trial came, the nation was unprepared, and to-day it lies under the heel of a conqueror whilst the people who protested so much against making sacrifices are at the beck and call of their enemies. We must learn a lesson from the fate of France. It is of particular importance at this hour when every citizen of Australia should be aware of the dire peril in which we stand.

Mr Falstein:

– The trade unions had to be smashed in France before the country could be defeated.

Mr ANTHONY:

– I listened with attention to the lengthy speech made by the honorable member for Watson (Mr. Falstein), but I heard scarcely one reference to the necessity for helping Great Britain to win this war. Practically the whole of his speech was devoted to demands for new social benefits for the people, more money for some sections, and more taxes for other sections which he does not represent.

After hearing the honorable member for Wimmera, I rose in order to state the position in regard to the wheat industry, to which he referred particularly, and in which every honorable member is greatly interested. The honorable gentleman suggested that the Government should make a further advance to growers apart from the advance of 3d. a bushel to which it has already agreed. But, in the compromise that was reached between the Government and the Opposition - a very just compromise in my opinion - the decision was made that it would be better to make available a sum of £1,000,000 for the relief of droughtstricken and distressed farmers than to make a further advance of 3d. a bushel on wheat in the No. 2 pool, which would have had the effect of benefiting, not only the necessitous wheat-growers, but also those not in need of assistance. The decision made was just, and I commend honorable members opposite for supporting it. I shall indicate what payments the wheatgrowers have received on the No. 2 pool on a record harvest of 210,000,000 bushels, of which 195,000,000 bushels was marketable. They have received 3s. 5-^-d. a bushel, f.o.r. seaboard. Allowing for the extra cost of putting wheat on board, which last season, owing to exceptional conditions, amounted to 4d. and 4 1/2d. a bushel, the advance made on the No. 2 pool is worth approximately 3s. lOd. a bushel, f.o.b., a price which most interested persons regard as being reasonably fair to the industry. I submit, therefore, that there is no reason for cavilling at the decision to make available a sum of £1,000,000 to farmers who are in dire need, instead of giving a further advance of 3d. a bushel to every holder of wheat. Honorable members opposite who agreed to that compromise showed very sound judgment.

A great deal has been said during this debate about credit expansion; but one or two more things should be said. The budgetary policy of the Government differs in very few respects from the budgetary policies of the Governments of

Canada and New Zealand. Honorable members opposite, who have expressed admiration of the New Zealand Government, should have some regard for the report made by a committee which was appointed by that Government in order to consider war-time production, stabilization of wages, and methods of financing the war. That committee, which consisted of representatives of unions and of other sections of the community, issued a unanimous report, the first recommendation of which was -

That, to the utmost of our ability and as far as it is possible to do so without crippling the productive resources of the dominion, we should pay for the war as we go, first by taxation and second by borrowing the savings of the people.

The second very important point which the committee made was as follows: -

The committee strongly recommends that every effort be made to ensure that the goods value of the pound will remain constant, as otherwise all attempts at stabilization must fail.

I have taken some part in the preparation of this budget. It would have been very easy indeed for the Government to have adopted the suggestions of the Opposition, to have evaded its responsibility, and to have relied entirely upon bank credit for the financing of the war. Unfortunately, however, this war cannot be run on the same principle as chocolate wheels. Sacrifices must be made, and there must be prudent regard for the real interests of the men and women who are on fixed wages, the pensioners, the men who have accounts in the savings bank, and the holders of insurance policies. The object of the Government is to try to maintain the purchasing value of money. It can best help the pensioner by seeing that his pound buys 20s. worth of goods, rather than by giving him 25s. which would purchase only 12s. worth of goods. That is the point which the Government has kept constantly in mind. I submit to every fair-minded member of the Opposition, that if the Government had been looking for an easy way, if it had wished to avoid the unpopularity of a burdensome budget, with very heavy taxation, it could have chosen the way which the Opposition has said it would have taken had it been in power ; but it has a higher regard than that course implies for its responsibilities and for the real interests of those who would he the first sufferers, namely, the persons on fixed rates of income, and savings bank depositors. These persons would feel the full effects of any scheme which tended towards inflation. There is very good reason to believe that the point is being approached at which further expansion of credit would become really dangerous. Almost all of the available and employable labour is now fully engaged. The number of registered unemployed in Australia has dropped by 43,000 since the outbreak of war in September last, and it is still falling rapidly. Figures issued by the Commonwealth Statistician a week ago showed that in New South Wales the number of persons actually working had increased from S38,000 in September, 1939, to 882,000 in October, 1940, notwithstanding that tens of thousands of men had enlisted. For Australia as a whole, the ‘ total increase of employment in the last twelve months is estimated at 90,000 men. This is accepted as the safe test to apply to credit expansion. Credit may be expanded up to the point where all of the employable labour is in productive employment. When that point is passed, the demand for goods exceeds the capacity to produce them. Therefore, a point has now been reached in relation to expansion of credit which makes it necessary to proceed very cautiously indeed. What does the budget say in regard to expansion of credit? Approximately £43,000,000 will have to be found for the payment of our troops overseas. The budget makes absolutely no provision for that, and all of it will have to be found by the use of the facilities of the Commonwealth Bank. By public loans £80,000,000 will have to be raised this year. The largest amounts we have ever been able to raise in one year in ordinary times is about £40,000,000. Were we to add to our liabilities in one way and another, all the price controllers in the world would not be able to prevent inflation of prices and the devaluation of money which would result from the too extensive use of the credit instrument. Only the high sense of responsibility which this Government feels towards the community as a whole has prompted it to resist the very strong efforts that have been made in many quarters to utilize the machinery of the Commonwealth Bank rather than take what all of us in our hearts recognize is the only safe way - making a real sacrifice and a stern effort.

Reference has been made to the exemption limit in respect of income tax. I do not know whether a comparison has been made between Australia and New Zealand. If it has not, it should have been. The Government of New Zealand is of the same political complexion as the Opposition in this chamber, and may reasonably be considered to have regard for the comfort and interest of the workers of that country. The following table gives the amount of tax paid in Australia and New Zealand by persons in different income groups, the figures for Australia embodying both State and Commonwealth taxes : -

Therefore, the Labour Government of New Zealand is following almost exactly the policy laid down in Australia. That policy is followed also in Canada, where the exemption in respect of a single man was recently lowered from 1200 dollars to 600 dollars. Every part of the British Empire has expressed the determination to play its part to the full. I know that the wage-earners, if they were allowed to express their own thoughts, instead of being guided by trade union leaders and other persons, would say that they are willing and even anxious to do their part. We can emerge successfully from this war only if we exhibit a determination equal to that of the enemy. I am confident that if the plain men and women of Australia be left alone there will be no doubt as to their willingness to make whatever sacrifices are required.

Mr ROSEVEAR:
Dalley

.- The Assistant Minister (Mr. Anthony) has made an unnecessarily provocative speech, which must tend to delay, rather than hasten, the passage of the budget.

It is difficult to arouse a great deal of enthusiasm at the moment, because there does not seem to be the possibility of members registering by their votes either approval or disapproval of the budget or of the suggested compromise.

Although the Assistant Minister has said a good deal concerning the honorable member for Wimmera (Mr. Wilson), and the effect which that gentleman had on the ultimate decision of the Government to compromise, it is nevertheless a fact that the budget was introduced by an adamant Treasurer, and was supported by an equally adamant Prime Minister, who, in the words of the honorable member for Wimmera, said “ There is the budget; take it or leave it”. That adamant stand has been discarded by the Ministry because it has had time to consider the strength of the different parties in this House, and also has had an opportunity to gauge the reactions of the public in the electorates. So we find to-day a more reasonable and tolerant Government, which is prepared to make concessions to both public opinion and the views of the Opposition.

The amendment of the Leader of the Opposition (Mr. Curtin) has gone by the board. It at least provided a. basis for the discussion of matters which were omitted from the budget speech of the Treasurer (Mr. Fadden). In place of the budget, compromise has now taken the centre of the stage. I frankly regret that compromise, for reasons that I shall state as I proceed. In my view, it is a complete surrender to orthodox theories and reasoning. At best, it represents failure to stand up to the needs of the times. It is a compromise for which this Parliament, and the people of Australia, will pay very dearly in the near future. Whilst all eyes appear to be focussed on the present political situation, very little attention seems to have been paid to the prospects of the future, particularly to what the next budget will be like, and the one after that. It would appear that the Government and, indeed, the majority of honorable members, prefer to go on, like the immortal Micawber, waiting for something to turn up. Although this budget debate, in the parlance of the boxing ring, will be a “ no-decision bout “, it has been useful because the relative merits of taxation, loans and credit expansion have been canvassed. According to the terms of the compromise, it is proposed that the War Council, in consultation with the bankers, shall discuss the possibilities of credit expansion. I hope that the Government will take the stand that, in matters of financial policy, the Government shall rule, and not those in control pf the private banks. It is true that taxation is under the control of parliament, and that governments are able to impose or vary taxes. It is equally true that a very large number of new taxpayers have been brought into the field. I refer particularly to the workers in receipt of lower incomes. Also, heavier burdens have been laid upon those in the middle income group, while additional taxation, though it is not, perhaps, sufficiently heavy, has been imposed upon those receiving higher incomes. The cumulative effect of the Government’s taxation policy is that, during the present calendar year, the people will be required to find an additional £45,100,000, of which £28,450,000 is to be raised by direct taxation from certain classes of individuals and companies, and £16,650,000 by indirect taxation, to be paid by the general community. The question that arises is, what will be the immediate effect of this increased taxation, and what will be its effect on the next budget? Frequent reference has been made to those in receipt of incomes of less than £400 a year who will be required to pay an additional £5,000,000 over and above their share of indirect taxation, and the direct tax levied on their wages by State governments. It is noticeable that ministerial supporters, either by accident or design, have omitted to point out that these new Commonwealth taxpayers are already contributing substantially to State revenue through a direct tax on their wages. In New South Wales, this tax was originally ls. in the £1, and its proceeds were supposed to be devoted to providing work and sustenance for the unemployed. Although we are assured that unemployment has practically disappeared in New South Wales, the State tax on wages still remains, and last year yielded £9,000,000. The proceeds of this tax are not now applied as was originally intended. During the last seven or eight years, the money has been devoted by successive anti-Labour governments in New South Wales towards the cost of social services, pensions, &c. Thus, when we try to assess the effect of the new taxation upon the wage-earners and others in receipt of lower incomes, we should take into account the State taxation which they are already paying. I understand that, grievous as is the effect of direct State taxation on the workers in New South Wales, it is worse in other States. Now, the sales tax is to be increased. Despite the fact that certain articles are to be exempt from sales tax, the fact remains that the workers will have to pay this tax on a large proportion of the articles they use. The Minister for Trade and Customs (Mr. Harrison), in the course of a statement last week on the effect of the budget on prices, quoted the Commonwealth Prices Commissioner (Professor Copland) as follows: -

When new stock is received on which sales tax has been paid at the higher rate, the normal gross profit margin can be added to the sales tax where the latter does not exceed 10 per cent., that is to say, on goods subject to sales tax at 5 per cent, or 10 per cent, the cost to the retailer will include sales tax, and he will be permitted to add his normal gross profit margin to this cost. In the case of goods bearing sales tax of 15 per cent., the retailer will ,be permitted to add his norma] gross profit margin to the manufacturing or wholesale cost including sales tax at 10 per cent.

Thus the workers will be called upon to pay increased sales tax ranging from 10 per cent, to 15 per cent, on most of the commodities they use, and the retailer will be permitted, in many instances, to add his profit to the increased cost, so that the worker, instead of paying 10 per cent, extra, will pay 11 per cent. Most of the 2,500,000 people, who receive incomes of less than £400 a year, use practically the whole of their incomes immediately. Of necessity, they are not in a position to hoard. The income of the basic wage earner is fixed by a tribunal which goes into the minutest details in order to determine the least amount upon which the worker can keep himself and his family. Thus, when taxation is in-‘ creased, such workers are called upon to accept a standard of living below that prescribed by a competent authority. The immediate effect will be a lessening demand for goods in the retail trade, and this, in turn, will have the effect of reducing the demand for the manufacture of goods. This will lead to unemployment, and to a reduction of wealth production. The taxation yield will decline, so that taxation will have to be violently increased in future years. Thus the vicious, downward spiral of deflation will start, and no one knows where it will end. The Government does not seem concerned about it. The Prime Minister waxed facetious at the expense of the 2,500,000 persons who, he said, earned between them £517,000,000 a year. He asked what sacrifices they were able to make, and what sacrifices they have already made. If we look at the enlistment figures, we shall see that the great majority of those in our defence forces are men who are usually described as workers. Before enlistment, they were in receipt of incomes below £400, and now they are offering their flesh and blood in return for a few shillings a day. They are doing it. not for what they hope to get out of the war, but because they deem it necessary to preserve this country as a democracy against the dictatorship powers which seek to dominate the world. The trade union movement also has made sacrifices. In order to co-operate with the Government in the furtherance of its war policy, the trade unions have agreed to the dilution of labour, one of the most dangerous things they could do, so far as their own interests are concerned. After the last war, many years elapsed before the trade unions were able to re-establish their previous customs and usages, because of the inroad3 made on the system by the dilution of labour.

The real question is, not what those on the lower incomes will pay in taxes, but what they will have left after the taxes are paid. Other sections of the community appear to be able to escape the taxation drag-net. I have in mind particularly those who held Commonwealth bonds which they converted in 1931. Because of the mistaken policy of the government of the day, it was agreed that such bondholders should not in the future be called upon to pay on the income from those bonds taxation at a higher rate than that prevailing in 1931.

Irrespective of what might in future be required, the holders of £400,000,000 worth of Commonwealth bonds were granted this concession. As a gesture to ease the sacrifice which they were making by accepting a reduction of interest, such a concession in- peace-time may have been justified ; but those people, under the present abnormal conditions have more to lose than any other section of the community. If Australia be defeated, their securities will be worthless. The workers, perhaps, will find employment, but bonds will be valueless. When assessing what people have at stake in this war, I consider that those who were parties to the agreement in 1931, when present-day circumstances could not have been foreseen, should be prepared to pay increased tax upon the interest derived from their investments, and the Government should have no compunction in further taxing that income.

The Government appears to have pinned its faith to a policy of financing war expenditure from loans and taxation. Such a policy has often been described as “ sane, orthodox finance “. Doubtless the Government is acting upon the advice of its experts, who have been schooled in the propaganda of the private banks. The effects of such propaganda may be seen even in this House, where many honorable members are prepared to defend any exaction which private financial institutions may make upon the Government or the people. Incidentally, those honorable members admit that the banks, are, and should be, the real governors of Australia. If the Government decides upon a loan policy, can it induce people to lend money for the purpose of prosecuting the war effort? It is interesting to speculate upon the possible effects of this heavy taxation upon future loan prospects. During the financial year ended the 30th June 1940, the Government raised £38,000,000 from loans, and many honorable members would like to ascertain how much of that sum was subscribed by the banks and insurance companies. On many occasions, they have attempted to obtain information on the subject, but successive Treasurers during the last nine years have resisted every effort. Why is this air of mystery necessary? If a loan policy is genuine, why should the Government refuse to publish the names of the big subscribers ? If the lodging of large subscriptions is an honorable form of patriotism why should not the private banks be given the credit for it? The Assistant Minister (Mr. Anthony) vaguely hinted that an inordinate expansion ofbank credit had already taken place and added that it had reached almost dangerous proportions. Many honorable members opposite have asserted that expansion of credit means unemployment. Despite the utterance of the Assistant Minister that inflation has already reached dangerous proportions, unemployment in Australia is being steadily reduced. Which of the two theories is correct, I do not know. An inquirer apparently must pay his penny and take his choice.

If it had been possible to extract from successive Treasurers information about the subscriptions to various loans by big financial institutions, light might have been thrown upon the percentage taken up by private investors. That information in turn would be interesting at this stage because of the possible effect of the present taxation proposals upon the capacity of private investors to contributeto future loans. In addition to the loan of £38,000,000 to which I referred previously, the Government has obtained a loan of £12,000,000 from the Commonwealth Bank and the trading banks, and has had the benefit of £15,000,000 worth of war savings certificates. How many more millions the Government proposes to raise in the near future, it has not made very clear; but many sources which, to date, have subscribed to loans may be dried up as the result of the Government’s taxation policy. Fora start, war savings certificates representing a considerable sum have been taken up by people in receipt of low incomes, such as male and female employees in workshops and offices. The great majority of subscribers have a small surplus of money, which they are prepared to invest in order to assist the war effort. If the Government takes that section which has subscribed so heavily to war savings certificates, it will practically dry up that source.

In addition, what will be the effect of this heavy taxation, upon the middle group of incomes between £400 and £1,000 a yea-r? Will the taxing of higher incomes destroy investment and create further unemployment ? Saturation point is reached in taxation beyond which it is dangerous to proceed, because investment is stifled and unemployment follows. If a deflationary policy destroys employment and heavy taxation reduces the purchasing capacity of the remainder of the 2,500,000 persons in the lower-income group, it is unquestionable that this will have violent repercussions on the savings of small business people. This section earns medium incomes and includes prospective private lenders. They depend to a large extent upon the patronage of the working class, and subscribe to this class of investment. I doubt whether they will be able to continue to support loans, because of the heavy taxation imposed, not only upon themselves, but also upon their potential customers.

What will be the attitude of the banks, who claim that they lend only against deposits, in accordance with the principles of orthodox finance? People cannot pay excessive taxes and continue to preserve the level of their deposits in the banks. Since the banks claim - untruly, in my opinion - that they lend only against deposits, the Government’s taxation policy will probably cause a contraction of those deposits, and a resultant reduction of the capacity of the banks to lend money to the Government against them. My estimate of the effect of this enormous increase of taxes upon the raising of loans, particularly from private savings, may be purely speculative. Nevertheless, the effect is real. If to finance the war I had to decide between taxation and loan, I should choose taxation. Although it has many shortcomings, taxation carries no interest, whereas loans remain a perpetual burden upon this and future generations. Taxation should be based upon the capacity of people to pay, and should fall with the greatest severity upon those who have the greatest stake to defend. Loans can be fairly stated to come mainly from those who have a real stake in the country. As they would be the greatest losers if Australia were to lose the present conflict, because much of the present loan money will be utilized for the purpose of prosecuting the war, no valid reason exists why they should remain, after their possessions are preserved, the sole beneficiaries from the debt that future generations will inherit.

The choice between loans and taxation is a choice between two evils, but I reject the proposition that taxation and loans are the only courses open to the Government from which to obtain money to finance the war. The present circumstances arc exceptional, and we must raise a colossal sum for war and civil purposes. A few years ago this budget would have appeared to be a madman’s dream. Because circumstances are exceptional, we must meet them with means which conservative elements describe as “ exceptional “ But the Government, like the Bourbons of Prance, learns nothing and forgets nothing. Its lack of foresight reminds me of a farmer who, disregarding all the latest agricultural implements, continues to use a wooden plough. The Government has attempted to strike a balance between taxation and loans from banks and private citizens; the Treasurer has merely guessed at the results. Members of the Opposition have suggested that the Commonwealth Bank should be employed to operate the credit resources of the nation^ which is the purpose for which the institution was originally established. But the mere mention of the use of national credit through the national bank provoked in this chamber a scene that can only be likened to an old maids’ meeting at which a couple of dozen mice had been let loose. The amendment submitted by the Leader of the Opposition proposed that the resources and functions of the Commonwealth Bank should be utilized to the limit dictated by considerations of safety. The Treasurer made precisely the same statement. I should like to hear a definition of what constitutes in their view the limit of safety. To date, nobody has made any attempt to supply it. In my opinion, the limit is represented by not only the actual wealth producing capacity of the nation, but also its potential wealth producing capacity. Any credit issued by the Commonwealth Bank against the potential wealth producing capacity of the country would not be inflation. It could be made available free of interest and would not remain a perpetual burden of debt. Inflation occurs when the amount of money made available exceeds the wealth producing capacity of a country. Although the Opposition urged the Government to utilize the credit resources of Australia, the Prime Minister declared that such a policy would impose upon all incomes a flat rate of tax, because it would be inflation. With a sob in his voice, the right honorable gentleman referred to the effects of such a proposal upon insurance policies and the superannuation benefits of the workers. The Labour party’s policy does not involve inflation, and I venture to say that greater evils than those envisaged by the Prime Minister have been caused in the past by the deflationary policy of the private banks. The crisis’ of 1931-35, when wages and invalid and old-age pensions, and all other social services were reduced, and hundreds of thousands of workers throughout the Commonwealth were thrown out of employment and had no wages at all, was the result of the unbridled control by private interests of the credit resources of this country. If I have to make a choice between inflation and the reduction of money values on the one hand, and deflation and all the horrors and miseries I saw in 1931-35, then I shall stump for inflation all the time. All those spectres conjured up by the Prime Minister and the Treasurer have no dread for me. I have seen the effects of both policies. The Treasurer said that above all inflation depreciates the value of small businesses, insurance policies, savings bank deposits and the like. The honorable gentleman said that the Government’s policy is a liberal one. If this is a liberal policy, God help this country if ever the Government gets an opportunity to implement a conservative one. The Treasurer went on to say that the Government’s policy stops short at reckless measures which would have such inequitable results and could only end in financial and economic collapse. That is the spectre which the Treasurer conjures out of the proposal of the Labour party that full use should be made of the credit resources of this country through the Commonwealth Bank. Who has suggested that reckless measures should be adopted? Certainly not the Opposition. I have advocated government control, not only of credit, but also of prices, which seems to be the bugbear of those who so much fear inflation. The Treasurer said the Government is in favour of an expansion of credit to the limits of safety, but he has not said what, in his opinion, the limits of safety are. Who is to decide what are the limits of safety - the private banks or the Government? While the private banks control credits at their will and whim, everything is all right in the view of Government supporters; while private bankers still retain control of the financial and credit resources of the nation they will always have power to make and unmake governments, because of their ability to bring about inflation or deflation. That is what concerns the money-changers to-day. It is not a question of who shall govern the country, but who shall determine the financial policy of the country. That is the last stand these people are making. I was satisfied of that when, as a representative of my party, I attended a meeting with government representatives, that the Government was prepared to make concessions on all points. We asked that invalid and old-age pensions be increased, and the Government representatives agreed. When we suggested child endowment, they said that that was a possibility which should be looked into. When we asked for work for the unemployed they were sympathetic. But when we got “down to the. question of the control of credit by the Government we found that this was the rock upon which any attempts to form a national government that would be of any use to the people of this country would be wrecked. Those who dominate the policy of the Government parties are determined that, come what will, they will never agree that the Government shall control the credit resources of the nation. They want the sole right to expand and contract credit so that by dominating the financial policy of the country, they may reap the harvest of wealth for themselves. I am pleased to know that under the terms of compromise “there is to he a conference on this subject. The War Council is to confer with -the Commonwealth Bank Board in regard to it; but as the personnel of both bodies think entirely alike on these matters, what good purpose can be served by the conference? The meeting will be merely make-believe unless it is attended by a Labour representative to put Labour’s view. The Government should “have the right to determine banking and credit policy. That is the policy of the Labour party and the only sound policy that can be adopted. The Prime Minister is scared about lessening the purchasing power of wages and the loss of income consequent upon an expansion of credit, but I remind him again of the fate of wage-earners and pensioners during the depression brought about by the Premiers’ Plan. The speech delivered by the honorable member for Robertson (Mr. Spooner) was like an oasis in an otherwise arid desert. In his frank criticism -of the Government the honorable member demonstrated that he is no Government camp-follower. As Treasurer of New South Wales for many years, he 11 1 as had considerable experience of finance in the State sphere, and ought to know his subject. In analysing the budget, he said that it was deflationary and would ultimately result in unemployment and destitution. So far as he could discover from the figures disclosed in it, the private banks had given no assistance in the matter of credit expansion. Will the Government’s financial policy lead to the same results as those which followed the adoption of a similar policy during the last war? An interesting sidelight on the Treasurer’s speech was his explanation of the situation in which the Commonwealth Bank came to the rescue of the Government. The honorable gentleman said -

Low export prices and the decline of private investment in Australia led to a recession which was reflected in some increase of unemployment and in the declining liquidity of the trading banks.

In short, the Government was faced with a deflationary situation. Would honorable members invest their private funds in a business that had about it all the signs of decay and depression? Certainly not. The Treasurer says that .by coming to its assistance the Commonwealth Bank and the trading banks saved the situation. The honorable gentleman continued -

In keeping with these plane to stimulate the economy, the Government refrained from increased taxation. Additional stimulus was also obtained from the special loan of £12,000,000 from the Commonwealth Bank and the trading banks.

Just at that time, when the Government was tobogganing towards disaster, when, on the surface, a loan to the Government looked to be a bad speculation, along came the Commonwealth Bank and the trading banks with an offer to lend £12,000,000 in order to extricate the Government from its difficulties. In justification of the Government’s financial policy the Treasurer said -

I think it may be fairly claimed that this policy has been justified .by its results. Since the beginning of the war civil employment has increased by about 80,000, or about 4 per cent, of the working population, despite the enlistment in the various forces of more than 150,000 men from the wage and salary-earning groups.

There was no talk of inflation when the Commonwealth Bank and the trading banks came to the assistance of the Government, although, according to the arguments advanced by several Government supporters, the pumping into circulation of another £12,000,000 of credit would be drastic inflation. [Leave to continue given.] So we have the spectacle of the banks lending £12,000,000 to the Government and the Treasurer praising their action and the glorious results that flowed from it. For party political purposes, however, when the honorable gentleman introduced his budget he said that similar inflation in other circumstances would lead to the reduction of savings, wages and the like. I challenge the accuracy of the contention that an increase of bank credit must inevitably lead to higher prices. We should have proper control of prices by a government conscious of its responsibilities to all sections of the community, and side by side with it an expansion of the credit resources of the nation through the Commonwealth Bank. We have a system of price control to-day in present circumstances. Is there any logical reason why we could not have similar control of prices in other circumstances? The Prime Minister now tells us that any further expansion of credit would have dire effects, but only a few weeks ago the right honorable gentleman told us that no limit should be applied to the use of the credit resources of the nation for war purposes. The right honorable gentleman was even more extreme than the former Treasurer (Mr. Casey), who on one occasion said that in the use of credit for defence purposes, the sky was the limit. Mr. Casey was comparatively modest; for him the sky was the limit, but for the Prime Minister there is no limit! The Prime Minister went so far as to admit in his speech on the budget that an expansion of credit might be necessary. He said -

I say that wc may find ourselves with some measure of this kind of thing before we have finished this struggle. We may have a greatly depleted standard of living before we finish this struggle, but we are not to be taken into that condition before it is necessary merely because it appears to offer an easy way out.

It is obvious that the right honorable gentleman sees that there may come a time when one policy will strangle the other, either taxation will make it impossible for him to raise loans, or vice versa. He must foresee, the breaking down of his present policy and the possibility of very drastic expansion of credit through the Commonwealth Bank. Holding .such views, he should be prepared now to apply a policy of credit expansion so that the additional credit may be pumped into circulation in carefully regulated amounts for use in the prosecution of the war. That course is to be preferred to the taking of drastic and, perhaps, disastrous measures at a later date.

A subject of vital concern to the people of Australia is the post-war revival of trade. During the last election campaign, this Government, like the antiLabour politicians during the last war, promised “ pie in the sky when you die “. Everything desirable was to happen after the war. We are asked to accept the same outlook now. I refuse to do so. The Government has ample regulation-making authority and legislative power to provide for the expansion of industry on a stable basis, and it should be taking steps to this end, but it is doing nothing. War conditions overseas and the deficiency of merchant shipping are such as to. justify the taking of every pos- sible action to increase our industrial activities, yet the Treasurer has intimated that he intends to direct all our financial resources into the development of war industries to the virtual exclusion of the development of normal civil industrial enterprises. A proportion of the available investment money should be allocated for commercial enterprises. The exorbitant taxation proposals of the Government and its cornering of the loan market for war purposes will cause havoc unless proper provision be made for the development of new peace-time industries. The financial policy of the Government should be varied and some effort made to take advantage of world trade conditions : otherwise, the aftermath of this war will be more serious for Australia than was the aftermath of the last war.

The Labour party considers that the time is ripe for the Government to assume control of banking. It has taken ocntrol of practically every other class of business activity in the community, in order that the best possible use may be made of our resources for the prosecution of the war. Why, then, should it baulk at taking control of our banking institutions? I hope that before long it will take that step.

The condition of the defences of Australia is causing considerable public alarm. The recent sinking of ships off our coasts and the laying of mines on our busiest coastal trade routes, although we are 12,000 miles from the main theatres of war, has brought the war right to our door. The uneasiness of the general community concerning the inadequacy of our defence preparations is shared by many honorable members of this committee. We should be informed of the disposition of our naval forces and aerial scouting squadrons. We are entitled to be told what provision has been made for the adequate policing of our coasts by units of the Navy and Air Force. As valuable lives and ships are being lost, it is not unreasonable for us to .ask for information on this subject. All that the Minister for the Navy (Mr. Hughes) will say in reply to questions is, “I do not know”. It may be his policy not to disclose information on these matters. If that be so, it is desirable that a secret session of Parliament should be held in order that honorable members may be. able to unburden themselves to Ministers. The Government may be able to make available privately information which it cannot divulge publicly. The secret session, need not last very long, but it would be invaluable.

I wish now to discuss the important subject of invalid and old-age pensions. The outlook of honorable members on this subject is determined according to whether they regard the pension as a charity or as a reward for services rendered by our pioneers to the general community. If the pension be regarded as a charity it may well be likened to the crumbs which a rich man allows the pauper to gather from under has table, the Labour party has never accepted that view. It regards the pension as a right which the pioneers of this country have earned, and it considers that the rate of pension should be sufficient to permit pensioners to live in reasonable comfort. I ask that a responsible member of the Government should tell the committee the basis upon which the Go.vernment considers the pension should, be computed. The rate must surely have relation to some economic factor. In 1931 we were told that it had relation to the national income. Because the national income was low at that time - it had, in fact, fallen to an extraordinary degree - we were told that” the pension must also be reduced,, as the country could not continue to meet the financial commitment involved in a pension at the then existing rate of £1 a week. I shall not at the moment argue whether any reduction was- justified at that time. My purpose is to request a responsible member of the Government to tell us whether Cabinet considers that the pension should or should not be related to the national income. I believe that it should be considered in this connexion. Yet the Prime Minister, as’ an excuse for declining to increase the rate of pension, told us a few days ago that “equating the old-age pension to the cost of living figures of the Commonwealth Statistician, on the basis of £1 in October 1925, it is now worth- £1 ls. 7d.”. Unfortunately, price rises since the beginning of the war have seriously affected many of the bare necessaries of life which the pensioners have to purchase. The prices of certain other items in the regimen to which the index numbers are related have remained fairly stable. The chief increases have occurred, in the prices of bread,, butter, meat and the like. These are important items in the regimen of the average pensioner to which the Prime Minister has sought to anchor the rate of pension. The Government should have a more liberal outlook on this subject. The position of many pensioners is very much more difficult than that of many basic wage earners. In the district which I represent a single pensioner, who has to rent a room, is required to pay about 8s. a week for it, which leaves him only about ls. 9d. a day for all other living expenses. A married couple living on the pension have to pay about 12s. a week for a room and use of a kitchen, which leaves them about 4s. a day for other living costs. Single pensioners, in such circumstances, very often live on two meals a day and depend upon charity for their clothing. The basic wage regimen allows 18s. a week for the housing of four persons. It will be seen, therefore, that a basie-wage earner receiving £4 3s. a week is in a much more favorable position than a pensioner who has to pay rent, although no one would suggest that the position of the basicwage earner is by any means easy. In 1925, when the pension was £1 a week, the national income was £677,000,000. It is estimated that in this financial year the national income will exceed £900,000,000. In view of the fact that since 1925 the national income ha.sincreased by £223.000,000 it is entirely unreasonable to expect us to- be satisfied that the increase of £9,500.000 in the pensions bill since that year is too great a share of the increased national wealth to be devoted to this social service. Another factor that moist be borne in mind is that in 1925 the number of pensioners was 162,356 whereas this, year it is 3’31,5’9’2. The increased amount now being provided- for pensions is, therefore, being shared by 169,246 more pensioners. The relative individual cost has not altered materially. It should also be noted that when the national income dropped by £164,000,000 in 193.1 the rate of pension was reduced to 17s. 6d. It was later reduced still further to 15s. Although the national income has almost doubled since that time, the rate of pension has, so far, not increased beyond the rate payable in 19)25. [Further leave to continue given.] The Labour party holds the view that the proposed increase of ls. in the rate of pension is totally inadequate. As I am of the opinion that the pension is a reward for services rendered, and should bear some relation to the national income, which has increased this year by £75,000,000, I consider that an increase of the pension to 25s. a week is fully justified.

For the reasons that I have stated I dislike the compromise that hae been effected to only a slightly less degree than I disliked the original budget. The income tax that will still fall upon the lower-paid workers, being super-imposed on the sales tax and the State basic wage taxes, amounts to a definite attack on the living standards of the working people - a section of the community least able to bear it - and will, in my opinion, result in totally unnecessary sacrifices which will probably lead to even greater sacrifices in the future through unemployment.

It is my considered opinion that the proposed increase of the rate of pension is insufficient. The new rate should bc at least 25s. a week. I agree with the principle of raising the rate of pension in accordance with increases of the cost of living. This is an equitable and long overdue provision. If the basic rate of pension were raised to 25s. the provision would be acclaimed by all sections of the community. It is gratifying to know that an increase of 7s. a week is to be made in the domestic allowance to the wives of members in the defence services.

The most regrettable feature of the budget is that the Government appears to be determined, despite the extraordinary circumstances which face it, to rely on orthodox methods of taxation and loan finance for the purpose of meeting the country’s war and civil commitments.

I believe that irrespective of whether the affairs of the country be administered by the present Government, or by a Labour government, or a national government, representative of all parties, the paramount need of the day is the adoption of a more liberal banking and credit, policy. Compared with this, all otherissues are subsidiary.

Since there is no indication of a. willingness on the part of the Government to depart from orthodoxy, it appearsto me that the results which will flow from this budget will be the same as in the past, and that whether the day of reckoning comes early or late, the great burden will rest upon the shoulders of the poorer sections of the community, whilst high finance will still control the governments and government policy. I said at the outset that I could find no enthusiasm for the budget as presented; now after examining its details I haveless sympathy for it than I had at the start.

Mr MULCAHY:
Lang

.- I should not have spoken on the budget had it not been for the “ stone-walling “ by the Assistant Minister (Mr. Anthony).. I am definitely disappointed with the budget, as I was also with the GovernorGeneral’s Speech with which the Parliament was opened. The Speech contained no constructive suggestion forthe future of this country, but merely expressed the desire that we shall win: the war. There was no necessity for that wish to be expressed because weare all agreed on that matter. The speech failed to forecast any proposals to meet war conditions, and did not indicate that the legislation promised by the PrimeMinister in his election speeches would be introduced. The reason may be that the electors failed to give to the Government a mandate to carry on ; if so, it was the duty of the Prime Minister to hand over to someone else the responsibility for governing the country.

This may be described as a war budget,, but, as is usual with budgets presented by non-Labour governments, it inflictson the lower-paid sections of the community, greater financial burdens than they can reasonably carry. The lowering of the income tax exemption from £250 to £200 is unfair, and will tend to reducethe purchasing power of the people and bring about another depression. I should’ like to see the exemption raised to £500,. because the cost of living is now so high that a man who is rearing a family on a. salary of £10 a week is practically living from hand to mouth. Certainly all of his earnings are placed in circulation. Any loss of revenue arising from a raising of the exemption could be made up from other sources. In view of the increased cost of living, it is the duty of the Government to see that those who are most capable of finding the money necessary for the prosecution of the war should provide it. I agree with the honorable member for Barton (Mr. Evatt) that it is not so much what is taken from a man that matters, as what is left when the taxgatherer has passed on. The Government’s proposals will not leave very much, if anything, in the pockets of the workers in this country; they are to be asked to carry a greater share of the burden of the war than they ought to carry.

I am disappointed also at the smallness of the proposed increase of the invalid and old-age pension. An additional ls. a week will not compensate these old people for the higher cost of living. It is the duty of the Government to see that the pioneers of this land are amply provided for. My colleague, the honorable member for Dalley (Mr. Rosevear) said that the pension should be 25s. a week, and I agree with him that those who have rendered good service to their country should be treated well in their declining years. I have been appointed to a committee which is to investigate means whereby the loss of revenue resulting from the alteration of the Government’s budget proposals can be recouped with least hardship on the community generally. I hope that the committee will be able to recommend to the Government that any deficiency of revenue resulting from these concessions will be made up by the people who are best able to contribute.

I regret that the Speech of His Excellency the Governor-General did not contain any reference to an amendment of the Repatriation Act. The late Minister for the Army (Mr. Street) definitely promised me that an amending bill would be introduced during the life of the last Parliament. That promise was given after I had drawn attention to some anomalies in the act, particularly the lack of provision to meet such cases as that of a member of the Militia who was killed while on duty in the Liverpool camp. On that occasion, the sum of £5,0 was offered to his parents as a solatium.

Mr Blackburn:

– That matter is now dealt with by regulation.

Mr MULCAHY:

– If the regulation provides for the payment of compensation in such cases, I shall take steps to see that the parents of the boy to whom I referred previously will be more adequately compensated for the loss of the family breadwinner. 1 am concerned at other anomalies in the Repatriation Act. All honorable members know that thousands of men who served in the last war and are to-day suffering from war disabilities find it most difficult to convince the department that their present trouble is due to war service. During the last Parliament, the honorable member for Balaclava (Mr. White) endeavoured to have a select committee appointed to inquire into anomalies in the Repatriation Act. I hope that something will be done in that connexion early in the life of this Parliament.

I wish now to refer to the lack of business methods in the administration of the defence forces generally. Recently, I talked with one of my constituents who was a soldier in the last war, and until recently was a member of the garrison forces. After about twelve months’ service in the garrison forces, he decided to leave of his own accord. Later he received his discharge. As there was a regulation entitling him to a suit of civilian clothes, he obtained an order from the department authorizing the issue to him of a suit. He went to the barracks in a borrowed civilian suit, with the result that he was not issued with a suit by the department. I suppose that had he gone along naked he would have received some consideration. I have written to the department on the subject, but, so far, I nave not received a satisfactory reply. Possibly that is because of incompetence 011 the part of some officer of the department.

I should like to see a little more supervision of the cost of munitions, particularly those made in annexes. The Government should appoint an officer to visit annexes, in order to ensure that where junior labour is employed in the manufacture of munitions, only junior rates shall he paid. The people of this country have to pay heavy taxes at the present time, and before the war is over may have to meet much heavier impositions. For that reason, there should be greater supervision of those who are doing war work. Many rather startling reports have been received in connexion with the manufacture of munitions, but discussion of them would be rather dangerous until one is able to verify their accuracy. A good deal of suspicion attaches to the charges that are being levied in connexion with the manufacture of munitions under private contract. The party to which I have the honour to belong has advocated for years that the manufacture of munitions should be completely under - the control of the Government, and. that no profits should be made out of them.

I am disappointed that greater provision has not been made for the invalid and the aged of this country, and I also regret that the basic wage man is to carry a larger share of the war burden than should be imposed on him.

Item agreed to.

The general debate being concluded -

page 734

ESTIMATES 1940-41

Remainder of proposed vote. - -The Parliament £149,600- agreed to.

Proposed votes.’ - Prime Minister’s Department £637,400, and Department of External Affairs £92,200- agreed to.

Progress reported.

page 734

QUESTION

ADDRESS-IN-REPLY

Debate resumed from the 27th November (vide page 221) on motion by Mr. Beck -

That the following Address-in-Reply to His Excellency the Governor-General’s Speech be agreed to -

May It Please YOUR Excellency :

We, the House of Representatives of the Parliament of the Commonwealth of Australia, in Parliament assembled, desire to express our loyalty to our Most Gracious Sovereign, and to thank Your Excellency for the Speech which you hare been pleased to address to Parliament.

Mr DEDMAN:
Corio

.- So -much has been said in the budget debate that only certain minor matters remain to which I wish to direct attention.

Whilst agreeing that our main aim at the moment should be to maximize our war effort, I also believe that, as far as possible, attention should be paid to the conservation of peace-time standards of welfare. Because of technical factors, there is a definite limit to what can be done in relation to our war effort at the present juncture. More men are offering for the Navy, the Army, and the Air Force than can be equipped. The real limitation of our war effort I believe to be due to the shortage of necessary machines and tools in the factories of this country. Because of the existence of these technical factors, it is all the more important that the resources which are not required, for a maximum war effort should be utilized in ways that are best calculated to serve other activities. An endeavour should be made to keep the national income as high as possible. Legislation which has the effect of reducing, or of tending to reduce, the national income, should be criticized by any person who has at heart the welfare of Australia. Petrol rationing has had a very detrimental effect on a large number of persons. First, it threw out of employment many men who were engaged in garages and motor services generally, before the Government was ready to employ them in connexion with its war effort. A very large number of traders in country districts have been detrimentally affected. It is of not the slightest use to tell the country trader that he has to reduce his petrol consumption by 50 per cent. A butcher who operates in the country can make a living only if he be permitted to call on all of his customers. If, by the reduction of his petrol consumption, he is able to call on only one-half of them, he cannot make a living; this must result in a decline of the national income which is bad for the country generally.

A matter about which I have some knowledge, because prior to entering this Parliament I was a forestry officer, is the haulage of timber. Most of the timber is hauled to the mill by motor trucks. It is of not the slightest use to tell the motor truck proprietors to reduce their petrol consumption by one-half. If they did so, they would not be able to make a living, and the mill owner, as well as the wage-earners at the sawmill, would suffer equally with him. The Government should give attention to these problems, and arrange that when requests are made to the fuel advisory boards in tho different States they should grant sufficient supplies of petrol to enable these individuals to make a decent living.

Great Britain needs all the food that we can send. Scarcely any food is in a more concentrated form than the egg. The egg producers of Australia should be encouraged and helped as far as possible. One of their principal difficulties has been a considerable scarcity of bran and pollard, due to the fact that our export of flour is much below normal. This is not the fault of the egg producers, who have to pay much too high a price for what bran and pollard they are able to obtain at the present time ; it is a fault of the capitalist system generally. The price is fixed according to supply and demand, and bears no relation to the cost of production. The Prices Commissioner should see that the price of bran is not permitted to rise as it has risen. To make up the shortage, the Government should arrange to have a portion of the surplus stocks of wheat ground for use as a substitute for bran and pollard.

The matter of training in technical schools has been raised by the honorable member for Melbourne (Mr. Calwell), and I wish to amplify his remarks. I have said that the limitation of our war effort is due to a shortage of skilled men and necessary machines in our factories. In a recent issue of the Melbourne Age this shortage, and the matter of technical training, were dealt with by Mr. E. P. Eltham, Director of Training for Munitions, in the following terms : -

The immediate need now was for 14,000 tradesmen, mainly fitters. This was an enormous increase on the previously estimated figure of about 3,000, and the Empire air scheme was the principal factor in the increased demand.

One of the best steps ever taken by this Government was when it started the scheme for the training of fitters and turners in technical schools. The only fault which I find is that the scheme does not go far enough. Every technical school in Australia should be engaged full time in training fitters and turners to enter the munitions factories. The

Commonwealth Government should provide sufficient money to obviate any risk of men being deprived of training because of shortage of accommodation or equipment. The Gordon Insitute of Technology in Geelong is playing an important part in training the men offering in the Geelong area, and I trust that, if extra accommodation or equipment is needed, the Government will help to provide it.

My next subject is the damage done to roads near Commonwealth properties. There are many such roads in my electorate. The most important are those serving the munitions factory in Maribyrnong. Of course, that factory is in the electorate of the honorable member for Maribyrnong (Mr. Drakeford). Other important roads are those in and around the Queenscliff Military Station at the entrance to Port Phillip. The four or five municipalities concerned continually write to me requesting that I ask that the Government give them moreassistance in the maintenance of those roads than it has given in the past. I know that the Government is hard pressed for money, but the traffic on those roadsis now more heavy than it was in normal times. It is anomalous that, although petrol is rationed, with a consequent decline of the receipts from the petrol tax, the traffic on those roads has increased. Honorable members are aware that out of the Federal Aid Roads grant a certain amount of money is set aside for expenditure on roads leading to Commonwealth property. The remainder is expended on the advice of the various State roads boards. In answer to a recent request,, made by me in conjunction with the honorable member for Maribyrnong for further moneys to be made available to repair the damage done to roads in theshire of Braybrook, the Minister for theInterior (Senator Foll) informed us that no money was likely to be available for that purpose this year, owing to the rationing of petrol. Unless those roads be kept in order our defence activities, will suffer. If necessary there should be some allocation in the defence estimates for this work to be done.

The Government gave the need for dollar conservation as the main reason f or the introduction of petrol rationing. Our store of dollars can be increased either by lessening our imports of certain commodities, or by increasing our exports to the United States of America. I was impressed by an article which appeared in the Melbourne Herald not long ago. I consider its importance so great that I propose to read extracts from it. Australia is the greatest wool producing country in the world; yet we send the bulk of our wool clip overseas for manufacture. We should be able to manufacture cloths for export. The article in the Herald points out one way in which to increase our exports to the United States of America, and, as the honorable member for Wannon (Mr. McLeod) interjects, the way in which we could increase employment and thereby attract more population to this country. The article reads -

British tweeds and sports clothes will soon be paying for ‘planes. The credit for this idea goes to the executive committee of the Export Council and the 110 British manufacturers who grouped together to organize a constant shipment of fine wearable sports suits and coats from here to the United States.

Paid for in dollars, the proceeds will immediately be switched over to make an “on account “ payment on our bill for American aeroplanes.

The plan is laid on no meagre basis. In ten weeks about £50,000 worth of British woven and made clothes is expected to be sold.

The article continues on those lines. Here is a means by which Australia could conserve its supply of dollar exchange, so that either we or Great Britain could purchase aircraft and other defence needs.

Wastage of foodstuffs is occurring in Victoria. Some years ago, the Government of Victoria introduced a ban on beef produced at the Werribee farm of the Melbourne and Metropolitan Board of Works, because the competition of that semi-public authority was detrimental to the farmers.

Mr McDonald:

– ‘That was not the reason.

Mr DEDMAN:

– That was certainly not the reason stated in the Victorian Parlia.ment

Mr McDonald:

– It was not the reason for the imposition of the ban.

Mr DEDMAN:

– It was one of several strong reasons. I also understand that another reason was a fight between auctioneers who were selling the meat. Perhaps the honorable member for Corangamite knows something about that. The excuse offered in the Victorian Parliament was that the sale of the meat was not in the best interests of the health of the people. That excuse will not hold water. From time to time, inquiries have been instituted as to whether the consumption of this meat was a danger to the health of the community, and innumerable authorities have stated that there could be no detrimental effects if the meat were sold in the market. The disease from which the cattle are supposed to be suffering is known as beef measles. Beef measles is one of fifty odd notifiable stock diseases, many of which - tuberculosis for instance - are very much more injurious to the health of the people. Yet we have this peculiar state of affairs: Ninety per cent, of the area of Victoria is not subject to any meat inspection and in that vast area stock suffering from any of the notifiable diseases can be killed and go into consumption without any inspection whatever and without any attempt by the Victorian Government to rectify the evil. Yet when it comes to this one disease, which is not nearly so deadly as some others, the Government of Victoria suddenly discovers that it would be extremely detrimental to the health of the people if the beef produced on this one area were allowed to go into consumption. The issue has been raised on many occasions, and it was again before the Victorian Parliament last month. The Legislative Council passed the measure repealing the ban, but it was retained by a majority of six votes in the Legislative Assembly. It is clear, therefore, that there is not an overwhelming majority in the Victorian Parliament in favour of the ban. Perhaps this decision had something to do with the winning of the Polworth byelection by the Country party, because undoubtedly the ban was imp’osed with the idea of helping the primary producers to obtain a better price for their beef. Incidentally, I think that view was wrong, because the Melbourne and Metropolitan Board of Works was a large buyer of store cattle; and what the farmers made on the swings they lost on the roundabouts. This tremendous wastage is a matter of concern to the Commonwealth. It is desirable that we should export as much as we can and, if ships are not available to take our exports away, the meat, instead of being boiled down for fat, should be put on the local market so that the people could increase their meat ration if they so desired. I should not object to the meat being labelled “ Werribee Beef “. I know for a fact that many people would prefer it to any other. It is as good as any beef produced in Victoria, and when it was put on the Smithfield market, it was commented on as the best that had appeared there for a long time. The ban costs the Melbourne and Metropolitan Board of Works about £35,000 a year, that being the difference between what the meat would return if sold in the ordinary way and what it returns when boiled down. I cannot see any justification for the ban; beef measles occur elsewhere in Victoria, but no ban has been placed upon beef produced in those areas. It is evident, therefore, that those responsible for the ban do not care what losses it involves. They are anxious only to help one small section. The Commonwealth Government should, in the interests of the consumers, issue regulations under the National Security Act declaring the ban to be invalid.

Mr SPEAKER (Hon W M Nairn:
PERTH, WESTERN AUSTRALIA

– The honorable member’s time has expired.

Question resolved in the affirmative.

Mr SPEAKER:

– I shall ascertain when it will be convenient for His Excellency to receive the Address-in-Reply Honorable members will be notified accordingly.

page 737

STATES GRANTS BILL 1940

Message recommending appropriation reported.

In committee (Consideration of Governor-General’s message) :

Motion (by Mr. Fadden) agreed to -

That it is expedient that an appropriation <if revenue bc made for the purposes of a bill for an act to grant and apply out of the Consolidated Revenue Fund sums for the purposes of financial assistance to the States of South Australia, Western Australia and Tasmania.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Fadden and Mr. Collins do prepare and bring in a bill to carry out the foregoing resolution.

Bill brought up by Mr. Fadden, and read a first time.

Second Reading

Mr FADDEN:
Treasurer · Darling Downs · CP

– I move -

That the bill be now read a second time.

The purpose of this bill is to implement the recommendations contained in the seventh report of the Commonwealth Grants Commission, which was tabled in the House on the 21st November. As honorable members are aware, legislation was passed in 1933 setting up the commission as a deliberative body to inquire into, and report upon, applications made by any States to the Commonwealth for the grant of financial assistance in pursuance of section 96 of the Constitution. During the last six years, the commission has examined the claims of South Australia, Western Australia and Tasmania for Commonwealth grants, and on each occasion its recommendations have been endorsed by this Parliament.

The commission has now examined the applications of those three States for financial assistance from the Commonwealth during the financial year 1940-41. The grants recommended by the commission, compared with those paid last year, are as follows: -

As these figures show, it is proposed this year to make special grants to the States totalling £30,000 more than th grants provided last year. However, the total amount originally assessed last year by the commission was £136,000 greater than that shown above, but a deduction of that amount was made by the commission to adjust a special advance to Western Australia in 1937-38.

The commission’s total assessment for last year was, therefore, £2,156,000, compared with which the grants now recommended, viz., £2,050,000, represent a reduction of £106,000. I shall deal with this reduction when I come to the grants to the individual States. The following statement shows the grants recommended by the Grants Commission since making it first report. In each case these grants have been paid by the Commonwealth : -

A significant fact revealed by these figures is that whilst the total of the grants reached a peak figure of £2,750,000 in 1935-36, they have now become more or less stabilized. This is highly satisfactory to both the Commonwealth and the States. So long as the present system continues, of course, some fluctuations of the amounts of the grants will be unavoidable.

Wednesday, 11 December 19^0.

The principles upon which the commission bases its assessments of grants have been fully discussed in this House in previous years, and since these principles are unchanged, and are set out fully and clearly in the seventh report, I shall not weary honorable members with details. It will be sufficient to remind them that the grants which the commission recommends are determined by the amount of help necessary in order to enable each claimant State by reasonable effort to function at a standard not appreciably below that of other States, or, in other words, to maintain a fair Australian standard. This involves a comparison of the budgetary results of the claimant States with those of the non-claimant States. After taking into account such factors as relative severity of taxation, expenditure on social services, costs of administration, &c, in the several States, grants are assessed on a basis which places the claimant States in a position comparable with that of the non-claimant States. In short, the policy of the commission, which the Government has accepted in the past, is to assess grants on the basis of financial needs, as indicated by an examination of the finances of all States, claimant and nonclaimant alike.

It must, however, be remembered that, in order to make such a comparison, full statistical information is necessary. For this reason the recommendations contained in the present report are based upon the financial results for 1938-39, the latest year for which the necessary information is available.

Whilst I do not propose to deal at length with the report, there are, I think, several points to which special attention should be directed. Last year the commission felt that the claimant States were not making sufficiently strenuous efforts to improve their financial position, and, consequently, it imposed the so-called “ nominal penalties “ on account of current policy of £22,000, £22,000 and £23,000 for South Australia, Western Australia and Tasmania respectively. These deductions were made because the commission believed that the claimant States should be able to improve their position in times of prosperity. The commission feels that in the present circumstances this might be difficult to accomplish and, consequently, corresponding penalties have not been recommended this year.

In order to make the necessary adjustments which I mentioned earlier, the commission finds it necessary, as a preliminary step, to estimate the taxable capacity of each State. This estimate is based primarily upon the amount of Commonwealth income tax assessed in each State. However, gold-mining profits are not subject to Commonwealth income tax, and to this extent a certain amount of taxable capacity was not included in the estimates. Because gold-mining profits are, in some cases, subject to State income taxation, the commission has, this year, corrected its estimates of taxable capacity to take account of this fact.

For some time the representatives of South Australia have maintained that that State was being penalized by the way in which the commission used federal income tax assessments in its calculations of relative taxable capacity. South Australia claimed that the extra taxation levied on property income, as compared with the amount levied on personal exertion income, was far greater in the case of federal income tax than in the case of the income taxes of the States ; and that, consequently, the taxable capacity of the States was being estimated on the basis of a tax system which was quite unlike that which the States actually did, or could, apply. This year the commission has endeavoured to meet this criticism, and has made a correction of its calculations along the lines suggested by South Australia. The method of correction is somewhat complex, and I shall not burden honorable members with the details, which are clearly set out in the report.

I now wish to refer briefly to the grants which have been recommended for each State. One reason for the fact that the total of the grants this year is £106,000 less than that assessed for last year is that in 1938-39, the year on which the comparative calculations are based, the deficits in the non-claimant States were considerably heavier than in the previous year. Because of drought, bushfires, &c, the comparable deficits of the standard States rose from ls. 6d. a head in 1937-38 to 13s. a head in 1938-39. Because the commission’s assessment is based upon the relative financial position of the States, these heavy deficits in the standard States have tended to reduce the grants payable to the claimant States ; but this tendency has been wholly or partially offset by other influences.

In 1938-39 South Australia also suffered from drought, and its primary industries received a severe check. For the first time in four years that State had a deficit. The commission has allowed South Australia £10,000 more than last year on account of economy in administration, and the penalty for loan losses of the past has been reduced from 6 per cent, to 5 per cent, of normal taxation, thus assisting the grant by £39,000. Taxation was relatively more severe than in the previous year, but the benefit of this was largely offset by higher expenditure on social services. The net effect of all these factors is to give to South Australia a grant of £1,000,000, which is approximately the same as the £995,000 paid last year.

The net amount paid to Western Australia last year was £595,000. This amount was recommended by the commission after deducting from the assessment of £731,000 an amount of £136,000 in order to cover the repayment of a special advance in 1937-38 to meet drought conditions in that year. The grant proposed this year is £650,000, which is higher than the net amount actually paid last year, but lower than the amount assessed. This reduction is mainly due to two causes: first, higher expenditure on social services in Western Australia; and, secondly, the more favorable budgetary position of Western Australia compared with the standard States. This latter fact was largely due to the continued prosperity of the gold-mining industry, which allowed the economic position of Western Australia, despite the effects of a prolonged drought, to be well maintained in 1938-39.

In 1938-39, Tasmania’s economic progress was well maintained, despite the setback experienced in other States. That is the main reason for the lower grant. Taxation was substantially increased in 1938-39. and this tended to offset the effects of the higher deficits in other States. The net result of all these factors is to give Tasmania a grant of £400.000 this year, compared with £430,000 provided last year.

Considerable evidence is available that the work of the commission is thorough and impartial, and that all matters affecting the financial needs of the claimant States have been investigated. The Government, therefore, believes that the amounts recommended by the commission will adequately meet the needs of the claimant States, and, consequently, as in past years, has decided to accept the recommendations of the commission.

Sitting suspended from 12.li. to 12.85 a.m.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 740

DEFENCE EQUIPMENT BILL 1940

Message recommending appropriation reported.

In committee (Consideration of Governor-General’s message) :

Motion (by Mr. Fadden) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant and apply out of the Consolidated Revenue Fund a sum for defence purposes.

Resolution reported.

Standing Orders suspended ; resolution adopted.

Ordered -

That Mr. Fadden and Mr. Anthony do prepare and bring in a bill to carry out the foregoing resolution.

Bill brought up by Mr. Fadden, and read a first time.

Second Reading

Mr. FADDEN (Darling Downs-

Treasurer) [12.39 a.m.]. - I move -

That the bill be now read a second time.

The purpose of this bill is to appropriate for defence and war expenditure on works and armaments an amount of £2,928,376, which represents the excess receipts of the Consolidated Revenue Fund during 1939-40. By the Defence Equipment Act of 1934, a defence equipment trust account was established, into which, with the approval of Parliament, various amounts have since been paid with the object of relieving the revenues in later years. The purpose for which amounts standing to the credit of this account may be used are -

  1. for naval construction;
  2. for the purchase of arms, armaments, aircraft, munitions, equipment, machinery, plant, and reserves of ammunition and oil fuel; and
  3. for defence works and buildings and the acquisition of sites therefor.

An amount of £35,809 remained in the trust account at the 30th June last from the excess receipts of 1938-39. This was set aside last year for expenditure on defence equipment, and together with the amount of £2,928,376, which it is now proposed to appropriate for a similar purpose, a total of £2,964,185 is available for expenditure on works and armaments in 1940-41 from the trust account. Details of the items on which this amount is to be expended will be found on page 353 of the Estimates. The policy of treating excess receipts in this way has been approved by Parliament in a number of instances in the past.

Mr BEASLEY:
Leader of the Australian Labour party - nonCommunist · West Sydney

– Can the Treasurer (Mr. Fadden) indicate exactly what extension of the manufacture of armaments and munitions the Government contemplates undertaking in New SouthWales ? I have in mind an earlier decision to expend some of this money on the construction of a cordite factory at Albury. For reasons which I have not been able to ascertain, the Government subsequently decided to construct the factory in South Australia, where it has now been completed. Owing to the fact that not less than 35,000 unskilled workers are unemployed in New South Wales, I should like more information concerning the Government’s proposed activities in that State. I understand that the Government intends to undertake work of this kind in New South Wales, and, perhaps, the Treasurer will now supply details of those proposals.

Mr FADDEN:
Darling DownsTreasurer · CP

in reply - At the moment I am unable to give to the honorable member the information for which he has asked. However, when the Estimates are being considered, I shall be able to supply such details in respect of, not only New South Wales, but also the other States.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 740

WHEAT TAX (WAR-TIME) BILL 1940

In Committee of Ways and Means:

Motion (by Mr. Anthony) agreed to -

That a tax be imposed upon all wheat harvested in Australia on or after the first day of October, One thousand nine hundred and forty-one, whichis acquired by the Commonwealth.

That the rate of tax per bushel of wheat be fifty per centum of the amount by which the price per bushel of wheat exceeds Three shillings and ten pence.

That the tax continue in force until six months after the termination of the present war between His Majesty the King and Germany and no longer.

That, for the purposes of this Resolution, “ price “ means such price as the Minister of State for Commerce, from time to time, by Order published in the Gazette, declares to be the average price free on board at Australian ports, from which wheat is usually exported, of wheat bagged in new cornsacks.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Anthony and Mr. Holt do prepare and bring in a, bill to carry out the foregoing resolution.

Bill brought up by Mr. Anthony, and read a first time.

Second Reading

Mr ANTHONY:
Assistant Minister · Richmond · CP

– I move -

That the bill be now read a second time.

This bill imposes a tax upon wheat, as part of the Wheat Industry Stabilization Plan which will operate from the commencement of the 1941-42 season. The price of 3s.10d. a bushel will be guaranteed to growers in respect of all wheat harvested after the 1st October, 1941, and acquired by the Commonwealth.

When the declared free on board price of wheat exceeds the guaranteed price, a tax equivalent to 50 per cent. of the amount of such excess will be imposed. The tax will operate in the following way: - In addition to the guaranteed price, 50 per cent. only of the total amount by which the free on board value exceeds the guaranteed price will be paid to wheat-growers. The remaining 50 per cent. will be paid into the Wheat Industry (War-time) Stabilization Fund. When the free on board value is less than the guaranteed price, the Commonwealth will be bound to pay to wheat-growers the difference. For this purpose, the Commonwealth will use the moneys in the Stabilization Fund resulting from tax collections before it provides the required finance by other means. Honorable members will appreciate that wheat-growers are protected in adverse seasons, and will share the benefits in seasons when prices are high.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 741

WHEAT INDUSTRY (WAR-TIME CONTROL) BILL 1940

Second Reading

Debate resumed from the 29th November (vide page 321), on motion by Sir Earle Page -

That the bill be now read a second time.

Mr SCULLY:
Gwydir

– This measure proposes to stabilize the wheat-growing industry, but I am not in favour of certain provisions. So many restrictions will be placed upon the industry that I am fearful of the result. One of the most objectionable features of the plan is the proposal to restrict the acreage to be sown next season. That, in itself, is a defeatist policy and is strenuously opposed by wheat-growers’ organizations, because the principle is most dangerous. Twelve months ago the Minister for Commerce (Mr. Archie Cameron) advocated a restriction of acreage or, failing that, he advised farmers voluntarily to grow less wheat than they had grown in the previous season. At the time, I commented that the Minister had no justification for assuming that the following year would produce a bountiful harvest. If production had been restricted on that occasion, the effect upon Australian economy now would be most serious. The previous season produced the second biggest crop in the history of the Commonwealth, namely, 210,000,000 bushels. The record harvest of 213,000,000 bushels was grown ten years ago. The Australian Wheat Board estimates that by the 31st December next it will have a carry-over of only 25,000,000 bushels, although it received into the pool about 195,000,000 bushels. That implies that the board has disposed of 170,000,000 bushels.

Mr Archie Cameron:

– The board has not yet shipped that quantity of wheat.

Mr SCULLY:

– About 36,000,000 bushels has yet to be shipped. According to figures released by the Commonwealth Statistician, this year’s crop, on account of the abnormally dry season, will total only 80,000,000 bushels. Consequently, even with the carry-over of 25,000,000 bushels, the Commonwealth’s supply of wheat will be 70,000,000 bushels below last season’s requirements. Diseregarding this obvious shortage, the Government now proposes so to restrict the acreage to be sown this year that the harvest will not exceed 140,000,000 bushels. Such a policy is inimical to the best interests of Australia, and will not stabilize the industry. No other country has adopted a similar plan.

In 1936, France harvested an abnormally heavy crop totalling 270,000,000 bushels, and created a board to ensure orderly marketing and to control production. Last year, the French harvest exceeded 300,000,000 bushels, and the board disposed of the surplus of 30,000,000 bushels. That body has functioned most efficiently, because the majority of the members represent the growers. The Labour party has taken strong exception to the composition of the Australian Wheat Board, because the farmers’ representatives are in a hopeless minority.

Mr Archie Cameron:

– What good purpose can be served by citing the example of France, which is under German domination ?

Mr SCULLY:

– I am showing how the problems of the wheat industry were dealt with in that country. The Central Committee of the National Wheat Board in France is composed of 52 members, of whom 30 represent wheat producers. There are also nine representatives of millers, bakers, &c, nine representatives of consumers, and one from each of the Ministries of Agriculture, Finance, National Economy and the Interior. It willi be seen that the 30 representatives of the wheat-growers constitute a majority of the committee. That is entirely in conformity with the policy of the Australian Labour party.

In his second-reading speech, the Minister for Commerce (Sir Earle Page) said that the principal feature of the Government’s plan for the stabilization of the wheat industry is that there shall be a guaranteed price of 3s. lOd. a bushel free on board for bagged wheat of an acquired crop of 140,000,000 bushels. All costs of receiving, handling, railing and storing the wheat, and placing it on board ship, will be found out of this price. At first glance this may seem to be a reasonable price ; but, when one realizes that production is to be restricted to 140,000,000 bushels, and that, on the basis of the charges of the Australian Wheat Board against wheat in Nos. 1 and 2 pools, over lOd. a bushel will be deducted for bagged wheat, and 2d. a bushel less for silo wheat, one finds that the price represents less than 3s. a bushel at country sidings, which is less than the cost of production. The Gepp Commission estimated that a payable price for wheat was about 3s. 6d. a bushel, but, since that body presented its report, the farmers’ costs of production have increased considerably, particularly in respect of superphosphates and machinery. The costs are now 3d. or 4d. a bushel more than they were at that time. The industry is in a precarious condition to-day, despite the fact that, last year, a prolific yield was obtained, and over 195,000,000 bushels was received into tie pool. According to the board’s estimate, the growers have so far received approximately 3s. lO.lld. a bushel. Yet the farmers are now asked to continue their industry, despite a reduction of their output by 55,000,000 bushels.

The restrictions being imposed on the growers under this plan are intolerable, and should not be accepted. Statutory Rule No. 26S of 1940 contains regulations under the National Security Act relating to the stabilization of the wheat industry. The regulations state -

  1. – ( 1 ) There shall he a Wheat Industry Stabilization Hoard, which shall consist of three members appointed by the Minister by notice published in the Gazette, who shall hold office during the pleasure of the Minister.

    1. The Minister may appoint one of the members to be the chairman of the board. 4. - (1) The Minister may, in respect of each member of the board, appoint a person to be the deputy of that member.
    2. Any person so appointed shall, in the event of the illness or absence of the member of whom he is the deputy, have all the powers of that member during his illness or absence.
  2. The duties of the board shall be -

    1. to advise the Minister and the Australian Wheat Board on such matters connected with the stabilization and control of the wheat industry as the Minister directs; and
    1. subject to any direction of the Minister, to organize and control the registration of wheat farms, and the licensing of persona to grow wheat under these regulations.

I wonder whether the fanner will he supplied with a collar, and ordered to wear it round his neck. This regulation reminds me of the “ dog collars “ allotted to waterside workers under the Transport Workers Act. No Soviet legislation more effectively deprives the subject of his liberty than do these regulations, which are an insult to the wheat-growers. The regulations further state - 8. - (1) The owner of any wheat farm may make application to the board, in accordance with Form A in the Schedule to these Regulations, for the registration of that wheat farm under these Regulations.

  1. The board shall consider every such application and, subject .to any direction of the Minister, but otherwise in its absolute discretion, may register any such wheat farm.
  2. Where the owner of a wheat farm has not mode application in accordance with subregulation ( 1 ) of these Regulations, the board may permit a lessee of that wheat farm, or such other person as it thinks fit, to make an application, and may, in respect of any such application, register that wheat farm for such period not exceeding twelve months, as it thinks fit.
  3. The Minister or the Board may at any time cancel the registration of any wheat farm.

It is clear that the growers are to be at the mercy of the board. The record of the Australian Wheat Board is one of muddling and bungling, and, since it has taken control of the marketing of wheat, no expression of satisfaction ha3 come from any grower or growers’ organization regarding the board’s methods. The regulations further provide - 9. - (1) Any person may make application to the board, in accordance with Form B in the Schedule to these Regulations, to be licensed as a wheat-grower.

  1. The board shall consider every such application and, subject to any direction of the Minister but otherwise iii its absolute discretion, may license the applicant as a wheat-grower.
  2. The following shall be conditions of every licence granted under these Regulations : - («) that the wheat-grower will not sow with wheat a greater number of acres of land than the board determines; and (2>) such other conditions a3 the Minister notifies by order published in the Gazette.

In a season such as the present, nobody can foretell what will be the state of the wheat market next season, or what the production will be, and the growers will object to this interference with their liberty and with the economic fabric of Australia. The concluding subclause of clause 9 of .the regulations reads as follows: -

  1. A licence under this regulation shall, unless sooner cancelled by the board, continue in force until the 1st day of March next following the granting of the licence but may be renewed, from time to tine, for a period of one year.

The next two clauses are -

  1. A person shall not make a false statement in any application made under these regulations.
  2. A wheat-grower shall not -

    1. sow wheat for grain on any land other than on the registered farm in respect of which he is licensed;
    1. harvest for grain any wheat sown for hay or sown in contravention of these regulations; or

    2. contravene or fail to comply with any condition of registration.

A farmer who was allowed to grow 30 or 40 acres of wheat for hay might find that his production on his area grown for grain was much below the estimated crop. Yet under these stupid regulations he could be compelled to cut 30, 40, 50, or even 100 acres for hay, although he knew quite well that it would be of distinct advantage to himself and the country that the whole of it should be harvested for grain. These regulations should not be tolerated. When the growers realize their import, a revolt will occur throughout the wheat-growing areas.

I have yet to witness the successful operation of a wheat scheme under departmental supervision. Varying legislative measures have been passed in the several States for the purpose of granting relief to farmers, and the supervision of their holdings has been taken out of their hands. There may be exceptions, but, in well over 90 per cent, of cases, government supervision has proved disastrous. Unworkable restrictions have caused great hardship, and, under these new regulations, the troubles of the farmers will be intensified. The wheat-growers in New South Wales are already chafing under irksome government restrictions. Their freedom has been taken away from them; but the restrictions already imposed are as nothing compared with those contained in these iniquitous regulations. Wheat-growers would be much better off if they were left to decide their own fate. The No. 2 Wheat Pool has not yet been finalized. The Australian Wheat Board is handling 195,000,000 bushels and growers have received the same price for that crop as they will receive for the limited crop of 140,000,000 bushels. Even allowing for the carry-over from the abnormal crop of 210,000,000 bushels, the crop next season will be 75,000,000 bushels less than that harvested this season. Regulation 12 prevents a farmer from sowing wheat even for domestic use, either for food or fodder, unless he is a registered grower. These regulations constitute a reflection on the Government, and indicate its policy of defeatism in connexion with the wheat industry. The Government’s scheme for the control of the industry should be scrapped and replaced by an orderly marketing scheme based on those operating successfully in other parts of the world.- In France, production is pegged and wheat-growers receive advances from the Agricultural Credit Bureau, which is guaranteed by the Bank of France. A similar credit organization could be established in Australia, guaranteed by the Commonwealth Bank. Among the several schemes submitted by the wheat-growers’ organizations in Australia, the most popular was that based on the French system. The Government scheme provides for the payment of only 3s. lOd. a bushel f.o.b., which is equivalent to less than 3s. at country sidings, whereas the most popular scheme submitted by the wheat-growers’ organizations provided for a guaranteed price of approximately 4s. a bushel in respect of the first 3,000 bushels. The wheat-growers are anxious to protect the interests of the small men. The position of the large wheat-growers in Australia is much the same as that of the large wheat-growers in Europe. In France, the average price paid for homegrown wheat during the period’ 1935-39 was 6s. 7d.; in Germany, it was 9s. 6d. ; and in Italy, it ranged between 6s. 6d. and 9s. 6d. a bushel. In their handling of the wheat problem, the governments of those countries fixed the price of homegrown wheat as low as possible in order to enable the people to get cheap bread; but the cost of production was so great that in order to encourage the wheat-growers high prices were paid for home-produced wheat in spite of the fact that those countries were close to the largest wheat granaries in the world, where wheat could be purchased much more cheaply. The wheat industry in those countries was stabilized in order to protect the small growers. If the small grower is protected by a guarantee of approximately 4s. a bushel in respect of the first 3,000 bushels,- he will be sure at least of getting £600 for his harvest and will be quite satisfied to have the residue of his wheat marketed to the best advantage, either through a control board or a pool. The plan outlined by the Government completely disregards the’ interests of the small grower. Even big wheat-growers have supported the establishment of a stabilization scheme with a guaranteed price in respect of the first 3,000 bushels. They recognized the need for encouraging the small grower. In my electorate, some growers harvest up to 130,000 bushels of wheat. A yield of from 20,000 to 40,000 bushels is quite common in that area. Large growers can produce wheat profitably when the price is a little over 2s. a bushel, but the small grower, reaping not more than 400 acres of wheat, finds his production costs much higher. The scheme submitted by the Government will strike the death-knell of the small growers. The result of these regulations will be a calamity to the small growers. When the disastrous provisions of these regulations become known, there will be such an outcry that they will have to be withdrawn. I venture to say that if the provisions of these regulations had been inserted in a bill, it would have been incontinently thrown out by the members of this House. Honorable members opposite representing country districts know the difficulties confronting the wheatgrowers, and at heart they know that the Government’s scheme has nothing to commend it. No regulation more souldestroying or more destructive of individual effort than the regulations now before us was ever issued even in Soviet Russia.

Mr PROWSE:
Forrest

.The wheat-growers throughout Australia have for a long time asked for a permanent stabilization scheme to place the industry on a sound footing. The regulations now before us are at least an attempt to do so, and I am rather surprised at the attitude taken by the honorable member for Gwydir (Mr. Scully) regarding them. The honorable member knows that for a long while the wheat-growers have been asking for a compulsory wheat pool. That presupposes binding regulations so that there shall be no “ scabs “. Although the honorable member made such a mouthful of the compulsory nature of this scheme, he is well aware that all trade unionists have to accept certain obligations in the interests of the whole of the members. It would be impossible to stabilize the wheat industry without regulations. To my mind, the Government’s proposition is reasonable. It at least provides that all of the farmers shall share alike. It would be unfair to put some farmers on a different footing from others. The Government is anxious to assist the wheat industry, and, for that reason, is providing substantial sums of money to remove farmers from what are known as marginal lands.

None of us is likely to forget the appeal made to the farmers of Australia by the former Labour Prime Minister (Mr. Scullin) to grow more wheat, livery envelope that passed through our post office for a certain period during the regime of the Scullin Government bore the slogan, “ Grow More Wheat “. At that time the wheat industry was considered to be valuable to the country. Unfortunately, owing to the development of intense nationalism in overseas countries, and the application of a high protectionist policy in countries which were previously under freer trade, Australia lost many of its overseas wheat markets. Avenues of sale that were once open to Australian wheat are now closed. Years ago our wheat industry not only brought approximately £22,000,000 a year into this country, but it also provided wheat for the Australian people at a lower price than it could be obtained in any other country. The right honorable member for Yarra realized the value of the wheat industry, and I cannot understand why some members of the Labour party should now be advocating the skinflint policy of a fixed price of 3s. 10 1/2d. a bushel limited to 1,000 bags of wheat from individual farmers. The protectionist policy of this country has general application to all other industries, no distinction being made between large and small concerns. The Broken Hill Proprietary Company Limited, for example, enjoys a full measure of protection, and so does General Motors-Holdens Limited, although it recently returned a profit of 83 per cent, to its shareholders. In these circumstances it is difficult to understand why honorable members opposite should wish to place a limit on the protective policy in respect of the wheat industry.

It has also been proposed by honorable members opposite that the flour tax should be repealed. The honorable member for Gwydir would find difficulty in justifying his attitude on that issue to the wheat-growers in his constituency. Our farmers have for many years advocated the fixing of a minimum price for wheat for home consumption. Seeing that arbitration tribunals fix the wages of the workers, and that the Tariff Board recommends the degree of protection that should be granted to manufacturers, it is only reasonable that this Parliament should determine the standard to be afforded to the wheat industry, particularly as the growers have to pay tariff-adjusted prices for all the commodities which they require. The fact that wheat is a staple food should have no bearing on this aspect of the subject. Wheat is, in effect, the stockintrade of the farmer; he depends upon it for his livelihood. I do not regard the flour tax as an impost on the bread of the poor, although the honorable member for Capricornia (Mr. Forde) has declared that it is so. That honorable gentleman is wholeheartedly in favour of fixing the price of sugar for home consumption, and I cannot see any reason why he should object to a flour tax in order to permit the fixing of the price of wheat for home consumption. Such protection as we accord this industry should apply equally to all wheat-growers whether their operations are on a large’ or small scale. It would be inequitable’ to limit the assistance to 1,000 “bags ofwheat. Some squatters could grow 1,000 bags of wheat in a relatively small corner of their properties. As we intend to protect the industry, we should do it properly. If the Government were to accept the proposals of the Labour party, it would have to abandon the scheme under which a fixed price must be paid for wheat for home consumption. The result would be that the farmers would lose ls. 2d. a bushel on such wheat. In fact, an amount of £1,866,000 would be taken away in one act from the wheatgrowers. This would be equivalent to £45 for each individual wheat-grower.

I have not examined this bill carefully, but I know that the principles of it have been approved by the Australian Agricultural Council. I have always been an advocate of a compulsory pooling system. As honorable members seem disposed to agree that this system is necessary to meet war conditions, I hope that they will also consent to retain it -after the war is over. I welcome the bill as the first instalment of a comprehensive stabilization scheme.

Mr BAKER:
Maranoa

.I can see very little in the Government’s proposal that is likely to be beneficial, and a good deal that is definitely objectionable to the wheat-growers. The wheat-growing industry is in a serious financial position at the moment. I understand that farmers’ debts aggregate about £150,000,000. A compulsory wheat pool which has been in operation in Queensland for some years has worked effectively. The only troubles experienced have been due to the manner in which constitutional power is divided between the Commonwealth and the States. The best that . can be said for this Government’s proposal is that it provides for a compulsory wheat pool. The details of the scheme are objectionable to me in that they amount to another attempt to regiment a section of the people and take from them the freedom which they have hitherto enjoyed. The stabilization scheme outlined in the policy speech of the Leader of the Opposition (Mr. Curtin) is better than that now proposed by the Government. The Labour party is of the opinion that the fixed price of 3s. 10£d. a bushel should apply to not more than 3,000 bushels, or the first 1,000 bags, of wheat produced by any one grower. Partners may grow as much wheat as they choose, but in respect of any quantity in excess of 3,000 bushels, they would, under the Labour party’s proposal, take ordinary market risks. 1 cannot see any provision in the bill for insurance protection against hail and other damage such as is provided in the Queensland act.

In the light of existing world conditions, it would be advisable, in my opinion, for us to store two years’ supply of wheat in this country, but as this would require the provision of extensive credit for the erection of very many reinforced concrete wheat silos, it does not seem to be practicable at the moment.

I direct attention to what appears to me to be a serious anomaly in connexionwith the wheat industry. Bread, which is made from wheat, is the chief food on the poor man’s table. I understand that it takes 48 bushels of wheat to make a ton of flour. That quantity of wheat at 3s. 10 1/2d. a bushel would cost £9 4s. A ton of flour makes 1,333 loaves of bread which, if sold at 6d. a loaf, would yield £33 6s. 6d. The difference between the price of a ton of flour and the price of the bread made from the flour is thus £24 2s. 6d. “Who enjoys the benefit of that remarkable margin? There is scope here for an investigation by the Commonwealth Prices Commissioner, though I consider that the Government should appoint a royal commission to inquire into the price of bread in relation to the production costs of wheat and flour.

The continuance of the flour tax is also a serious defect in the Government’s scheme. This impost is a special infliction upon the poorer sections of the community. Every one must agree that more bread is used in the families of the poor than in the families of the rich. Consequently, the flour tax is a class tax of the worst kind.

The policy enunciated by the Leader of the Opposition during the last election campaign of limiting the payment of 3s. 10d. a bushel to the first 3,000 bushels of wheat produced by any individual farmer is preferable to that expressed in this bill. I agree with the honorable member for Gwydir (Mr. Scully) that this is another application of the “ dog collar “ tax, and that, when given the opportunity, the wheat-growers of this country will make clear their disapproval of the Government which introduced it.

Mr BADMAN:
Grey

.In my opinion this scheme for the stabilization of the wheat industry is the best attempt which has been made during the last ten years to put the industry on a sound footing. The successful control of 195,000,000 bushels last year which is demonstrated by the fact that, by the 31st December next, all but 23,000,000 bushels of that crop will have been sold, despite the difficulties caused by restricted shipping and war conditions generally, is a wonderful achievement. Compared with prices during previous years the price at which that wheat has been sold is satisfactory. No scheme for the stabilization of the wheat industry that has been put forward has had greater support from the wheatfarmers than has this scheme which the honorable member for Gwydir so roundly condemned. The proposal before us is similar to what is known as the WilsonUppill plan which was placed before the wheat-growers of Australia two years ago. At Horsham some time ago Senator Wilson placed his scheme before 400 representatives of the wheat-growers, and the vote which was taken subsequently showed that all but about ten of them supported it. This stabilization plan is put forward under the National Security Act, but I hope that the wheat-farmers, having had some experience of control last year, and for the duration of the war, further control under this legislation, will agree to the stabilization of the industry on the same basis after the war when the national security legislation will cease to operate. This is a wartime measure which need not necessarily remain in force after the war, but it is a better scheme than that which was advocated before the last election when a bait of 3s. 10£d. a bushel was held out to small farmers.

Mr Frost:

– Does the honorable member think that that was too high a price?

Mr BADMAN:

– No.

Mr Frost:

– Then why does the honorable member refer to it as a bait?

Mr BADMAN:

– Others besides small farmers should be considered. Men with big commitments have been the back bone of the wheat industry in this country for many years. .Some of them have been forced to send their capital out of this country, because they have no,t received a payable price for their wheat. These men are not convinced that 3s. lOd. a bushel is enough. .Should the price exceed that amount on the basis of the export and home-consumption prices combined, the farmer will get 50 per cent, of any amount in excess of that rate, and the money will be placed in a fund in order to stabilize the industry should wheat prices fall. The honorable member for Gwydir said that no farmers’ organization in Australia would support this bill, but I point out that various associations of wheat-growers as well as the Wheat-growers Federation are supporting it whole-heartedly. An official statement setting out the attitude of the South Australian Wheat-growers Association to the wheat stabilization proposals of the Commonwealth Government contains the following: -

Although it is not the province of our Association to suggest that the amount of 140 million bushels is more than the Commonwealth can market at a reasonable price, particularly as we have not access to information which should be held by the Commonwealth Government, it does seem that the suggested total marketed crop of 140 million bushels, to which we must add, say, 20 million bushels retained on farms for seed and feed, giving a total crop of about 160 million bushels, is rather a lot for the Commonwealth to handle at a payable price.

Under the heading “ Is the price too low ? “ the official statement continues -

Undoubtedly there will be growers who still contend that the price is still too low. They will contend that since the Wheat-growers’ Federation laid down its policy of 3s. lOd. costs have increased considerably, and this is undoubtedly a correct contention, but the position which wheat-growers have to face now is this: The Commonwealth has agreed with the price laid down by the Wheat-growers’ Federation. Can growers now refuse to accept their own terms and throw the whole position into confusion, with a serious danger of alienating the sympathy of the .public and the governments of Australia which the3’ at present enjoy?

It would seem that the only sound attitude for farmers to take is that they will cheerfully co-operate with the Commonwealth proposals, admitting that at least a bottom has been put into the wheat industry.

With some of the regulations which have been issued by the Government I disagree. However, the Government is generous in giving a guarantee in respect of 140,000,000 bushels, and the price is fairly satisfactory, notwithstanding that production costs have increased since the outbreak of war.

Mr Rosevear:

– Why does not the honorable member admit that it is a good price ?

Mr BADMAN:

– The honorable member for Gwydir objected to the proposed restrictions, hut I contend that they are so small as to be of little importance. The average wheat yield for the last five years has been 170,000,000 bushels, and the average delivery 150,000,000 bushels. For the last ten years the average yield has been 173,000,000 bushels and the average delivery 153,000,000 bushels. A reduction of 10,000,000 bushels in the delivery for each of the last five years period would mean a reduction by 6.6 per cent, of the total quantity of wheat delivered, or 5.8 per cent, of the total yield. Over the ten years period a reduction of 13,000,000 bushels delivered would affect the total delivery by 8.5 per cent. and reduce the total yield by 7.5 per cent. It will be seen therefore that the proposed restrictions are so small as to be of little account. I have no fault to find with the proposed restrictions in respect of wheat delivery; nor do I object to the registration and licensing of farmers. If farmers are prepared to accept a government guarantee as to price, they should be prepared to accept control, so long as they are not robbed of the right of complete management of their own affairs. I contend that the scheme does not rob them of that control. As the Commonwealth Government will assist the wheat-growers financially it must have some control of finance.

Mr Pollard:

– Surely the honorable member does not stand for a restriction of production?

Mr BADMAN:

– I do not advocate a restriction of the area to be planted; a maximum delivery of 140,000,000 bushels could be obtained by restriction on a percentage basis. It would mean a restriction of only 5 per cent, which, after all, is not much. I do not think that, at this juncture, any restriction of areas will be imposed, in view of conditions in the Aus tralian wheat industry and the world outlook generally. Regulations have been framed to meet all contingencies, but they may not be put into operation. A farmer who is registered should furnish sufficient information to enable the authorities to decide what quantity of wheat he may deliver to the pool. I think that the Government is wrong in saying that a farmer shall not sow more than a certain area. It would be easier to instruct him not to deliver more than a certain quantity of wheat. For instance, a farmer who has delivered an average of, say, 3,000 bushels of wheat, over a period of five years when the average delivery amounted to 150,000,000 bushels, would deliver only 6 per cent, less on the basis of a crop of 140,000,000 bushels. The farmers do not favour the provision requiring them to cut for hay a proportion of a promising grain crop in order to keep the total yield below 140,000,000 bushels. In that respect, they disagree with the regulations. The bill does not define the basis of restriction - whether it shall be area or quantity delivered. I should like to see fresh regulations framed to cover these points.

The honorable member for Gwydir criticized severely the schedule to the regulations which relates to wheat grown in the years 1937-38, 1938-39, 1939-40 and 1940-41. I submit that the present year, 1940-41, should not be included. The Government should go back to 1935-36 or 1936-37 in order to ascertain a farmer’s average sowing and yield, and his delivery quota should be based on that average. The honorable member for Gwydir also criticized the Wheat Board severely. In my opinion, the sale by that body of 173,000,000 bushels of wheat is a wonderful achievement. The honorable member advocated the disbandment of the Wheat Board, but I contend that no board which has controlled any Australian primary produce during the past twelve months has a better record to its credit. The manager, Mr. Thomson, knows the wheat business from A to Z. I hope that his services will be retained by the Government. Last year, when the wheat scheme was put into operation and the pool was placed in its charge, no preparations had been made. The board has now taken control, and has done very well. Mr. Thompson receives a salary of £3,000 and, pitting himself against the English buyers, he saved Australia £360,000. It is contended that he receives a salary of £5,000. That is not correct. He was paid a disability allowance of £2,000 to enable him to transfer himself and his family from Western Australia to Melbourne.

The honorable member for Gwydir (Mr. Scully) has said that the Wheat Board has bungled and muddled, and brought about chaos in the industry. No board has done better. If we compare the present control with that exercised by the Commonwealth wheat pools of 1935 to 1919 we shall find that it has been a huge success. In the period from 1915 to 1919 there was a series of wasteful wheat pools. A good price was obtained for the wheat sold, but perhaps it was not so good as it would have been had greater care or control been exercised. The Commonwealth sold the wheat overseas. Complementary legislation was passed in all of the wheat-growing States, but no other control was exercised. Under the present wheat board, there is control in every conceivable direction. In my electorate, there are two of the largest wheatgrowing areas in Australia, and in them the wheat has been so well protected against weather, mice and vermin that no waste has occurred. I hope that the Government will attempt to continue the wheat stabilization scheme after the termination of the war. I point out to the Minister that the regulations do not contain a definition of “ bona fide wheatgrower “ and do not make clear the meaning of “ wheat-grower “. Six or seven years ago, when Sir Frederick Stewart was Minister for Commerce, some difficulty was experienced in obtaining for the share farmer his portion of the bounty payable. Clause 9 of the regulations, which deals with the registration of wheat-growers, should contain a provision setting out who is to be registered as a bona fide wheat-grower, such as farmers whose chief source of income is derived from wheat-growing. There should be a further provision clarifying the meaning of “ wheat-grower “ ; for example, “ a wheat-grower is a farmer who owns, rents, or share farms a farm on which wheat has been grown from some substantial portion of that farm each year during the last five years “. I support the bill.

Mr BREEN:
Calare

.The honorable members for Forrest (Mr. Prowse) and Grey (Mr. Badman) seem to have the impression that the Labour party objects to a stabilization scheme. Such is not the case.

Mr Badman:

– I did not say so.

Mr BREEN:

– We strongly object to the scheme put forward, which contains many objectionable features. The most objectionable feature is that it attempts to restrict acreage and production. A much wiser man than any gentleman who had anything to do with the formulation of the proposal to restrict acreage, in the person of Dean Swift, gave it as his opinion that whosoever could make two ears of corn or two blades of grass to grow upon a plot of ground where only one grew before, would deserve better of mankind and do more essential service to his country than the whole race of politicians put together. The speeches of the honorable members for Forrest and Grey support my contention that the Government scheme contains many objectionable features, the most objectionable feature being that it restricts acreage, and consequently production. I agree with some of the points put forward by the honorable member for Forrest. It is not equitable that a squatter who grows a thousand bags of wheat in a corner of his property should obtain the benefits of a scheme which provides more than an average price for a restricted acreage. I do not think that any scheme which limits the acreage for which a fixed price shall be paid can be regarded as equitable. Restriction of acreage has the extremely objectionable feature that it is opposed to all of our conceptions in regard to closer settlement. For many years the Governments of both the Commonwealth and the States have formulated schemes of closer settlement. This proposal militates against closer settlement. Take a station of 10,000 acres of grazing country in a safe belt, for which the inflated value of about £8 an acre was paid because of certain factors over which the purchaser had no control. He finds that it is impossible to work the land economically by grazing operations alone, and, consequently, must go in for mixed farming. He decides to cultivate a certain portion of his holding, but because wheat has not been grown on it in the period stipulated in this scheme, he is precluded from doing so. He may have son3, among whom he may decide to subdivide the country. It is impossible for a family of three or four sons to make a living from land previously worked by one family, except by engaging in other forms of primary production. He decides upon cultivation, but is precluded fo-om thus utilizing the land to the best advantage. One farm may be used for cultivation purposes, and land adjoining it be not so used because the holder of it has insufficient capital to clear, fence, and prepare it for cultivation. There are many factors of which only those who are intimately associated with wheatgrowing and primary production generally in certain areas are aware. The scheme is ill-conceived. It could not be otherwise, because those who propounded it have had no experience of primary production. There is a Country party associated with the Government, but what part of the country its members represent I do not know ; probably country towns.

The honorable member for Grey has stated that great work has been done by the Wheat Board, which managed No. 1 and No. 2 pools. Figures supplied by the Department of Commerce show that the cost of handling wheat, f.o.b., has been over ls. a bushel. No wheat-handling agency in this country would have the brazen effrontery to charge ls. a bushel to handle wheat from the point of production until it was placed on board ship.

Mr Badman:

– The figure given by the honorable member is not correct.

Mr BREEN:

– The following figures were supplied to the Young branch of the Farmers and Settlers Association of New South Wales: -

The addition of freight makes the total more than ls. a bushel. The deduction of ls. Id. for handling charges from the guaranteed price of 3s. lOd. a bushel gives a net return to the farmer of 2s. 9d., whereas the wheat commission reported that farmers could not profitably grow wheat at less than 3s. lOd. a bushel. The State Premiers asked for an irreducible minimum of 3s. 6d. a bushel at country sidings, but the Government would not budge. At the last general elections the Labour party offered the wheat farmers 3s. 1(kid a bushel free on rail. The Government’s plan, which is vastly different from ours, was devised by people inexperienced in wheat farming. It is the product of the Wheat Board which the honorable member for Grey (Mr. Badman) eulogizes. That board is managed by a gentleman to whom the Government pays £3,000 a year in salary and £2,000 a year in allowances. There are many public servants who would be able to look after the affairs of that hoard much more cheaply. This legislation is a final insult to the intelligence of the farmers. It is an attempt to delude them into the belief that they will receive more from this scheme than they receive from the No. 2 pool.

Mr LANGTRY:
Riverina

– I protest against this bill. The Minister for Commerce (Sir Earle Page) in moving the second reading declared that the bill crowned twenty years of effort to bring about stabilization of the wheat industry, but it is a very feeble effort at stabilization, because it offers absolutely no prospects of recovery to the farmers and does not ensure that the farmers will receive even the production cost of their wheat. Up to 1930 the wheat industry was in a reasonably sound position, but to-day it is at its lowest ebb. For 25 years prior to 1930, according to figures presented to the Gepp Commission, the average net return to the farmers was 4s. 4d. a bushel, but under this scheme their return will be only 2s. 8 1/2d. a bushel at country sidings. That return is insufficient to lift the industry from the slough. Instead of stabilization this bill will result in more bankruptcy. Under the Labour party’s plan the farmers would be 6d. a bushel better off. That 6d. represents the difference between success and failure.

The Minister said that the stabilization plan would bring about voluntary debt adjustment, but no one will voluntarily adjust debts. The figures used in bolstering up the Government’s plan are misleading to the general public, because the price set out is inclusive of handling charges and in no way represents what will be received by the farmer. The average man cannot profitably grow wheat at 2s. 8d. a bushel on a small farm. When war broke out the Wheat Stabilization Committee was about to draft legislation under which the price of wheat at country sidings would be 4s. a bushel over 3,000 bushels. That would have been the salvation of the small farmer. No doubt the big landholders and the companies whose activities are diversified will derive benefit from this legislation, but the man who has only 200 or 300 acres of land cannot engage in mixed farming, and there is no salvation in this scheme for him. I do not think that many honorable members realize the0 difficulties of men who are trying to earn a living from wheat on small areas under the existing mortgage system. The recommendation of the royal commission was for a reduction of the interest on mortgages to 2^ per cent. It was proved before that commission that interest charges represented in a bushel of wheat amounted to ls. 9d., which is only ls. less than the net guaranteed price. In good seasons farmers could probably make a profit out of wheat at 3s. 3d. or 3s. 4d. a bushel at country sidings, but not in bad seasons. The wheat industry is slipping back and it is dragging the small business people in the country towns with it. I support the contention of the Premier of New South Wales that the farmers should he paid 3s. 6d. a bushel at sidings. The drift from the land will never be arrested until the primary producers are assured of a profit. Under present conditions sons of farmers cannot be blamed when they go to the cities in search of work. I have two sons who know as much about farming as it is possible to know. They are working for wages, because what I earn from my farm would not keep me, let alone them. I see no solution of the farmers difficulties in this plan.

Mr POLLARD:
Ballarat

– I have perused this bill with a good deal of surprise. Its purpose, evidently, is to achieve planned economy in the wheat industry, and it has been introduced by a Government representative of those interests which have always condemned planned economy, which have always accepted the law of supply and demand, and which contended that no restrictions should he placed on private enterprise. Yet the very essence of this scheme is that there shall be planned economy for the wheat industry, that it shall, in effect, be sovietized. that it shall be controlled, and that the wheat-farmer shall be told how much wheat he shall grow, when he shall grow it, and what price he shall receive for it. The Government is repudiating everything for which it has stood in the past. During the last election campaign, it went before the people telling them that the Labour party was dangling a bribe before the farmers when it offered them 3s. lOd. a bushel for their wheat; yet the Government has now meekly bowed the knee, and itself offers the same bribe to the growers, a bribe which, by the way, is insufficient by 6d. a bushel. Attached to the offer, however, is the undesirable condition that production shall be restricted. One might be able to understand a proposal of this kind coming from the Labour party, which has always stood for planned economy, particularly in primary production. The Government has chosen the least organized and least articulate section of the community to which to apply its restrictive measures. No restriction is placed on the Broken Hill Proprietary Company Limited as to the number of coils of barbed wire or tons of galvanized iron it shall produce. No restrictions have been placed upon firms producing radios, or upon MacRobertson s Limited as to the quantity of chocolates to be manufactured, but it is proposed to restrict production of the staple food of the people. The Government proposes to tell the primary producer that he shall harvest 200 acres for seed wheat, that he shall cut and bind and stook and stack 100 acre3 of wheaten hay, which any farmer knows will not keep in good condition for more than twelve months. Then, if the farmer buys stock to consume the hay, he will be no more likely to find a market for the stock than for the wheat if he had harvested it. This measure will react against the Government which has introduced it. There should be incorporated in the bill provision for financing farmers who desire to change over from wheat production to some other kind of farming.

Last session I heard the honorable member for Barker (Mr. Archie Cameron) and the right honorable member for Cowper (SirEarle Page) say that wheatfarmers should produce hay for stock raising, or should turn over to dairying, or pig raising or poultry keeping. Do they not realize that it is beyond the financial capacity of farmers to switch over from one form of production to another? A man cannot begin dairying unless he is able to buy at least 10 cows, nor can he become a poultry farmer unless he is able to buy 500 fowls, or whatever the minimum number may be. The bill should be withdrawn, and redrafted so as to incorporate the proposals put forward by the Leader of the Labour party (Mr. Curtin) in his policy speech. That policy was obviously acceptable to the people, a fact which is demonstrated by the increased strength of the Labour party, which polled particularly well in the wheat-growing constituencies. I have always been in favour of co-operation, and I am glad to know that, during the war, wheat is to be disposed of on the co-operative plan. I do not, however, approve of the Government’s proposals for restricted production. It is possible that after the war Australia will not be producing enough wheat to feed its own people.

Mr Badman:

– What restrictions are proposed ?

Mr POLLARD:

– On that point the bill provides that a wheat-grower shall not sow wheat for grain on any land other than on land licensed for the purpose. No limits are prescribed, and the imposition of restrictions is to be at the whim of the government of the day. Who is to say that this Government, committed to pay a price of which it does not approve, will not impose drastic restrictions in order to reduce its liability? The honorable member for Grey (Mr. Badman) has fallen in meekly behind the Government, and is now compelled to support its policy, including the increased price of wheat, although he and his colleagues declared that 3s. 6d. a bushel was enough. As I have said, this Government, which formerly pinned its faith to the law of supply and demand, is now compelled to accept the trend of world affairs, and embark upon a system of planned economy in the hope of solving the problems of the wheat industry. I hope, however, that the Government will drop its proposals for restricting production.

Mr DUNCAN-HUGHES:
Wakefield

– I do not think it is surprising that the Government should take notice of the trend of world affairs. It is the normal thing for a government to do, unless it wishes to butt its head against a stone wall. As a matter of fact, these restrictions are being applied for two reasons - because of the war, and because of the excessively high tariffs all over the world which have made it difficult for us to dispose of our products.

Mr Pollard:

– Is the honorable member a free trader?

Mr DUNCAN-HUGHES:

– No, but I would have tariffs a good deal lower than those advocated by honorable members opposite. I accept the Government’s proposals without any enthusiasm, believing them to be for the benefit of the wheat-farmers. This scheme is similar to those for the control of apples and pears, and of wool. Personally, I do not like these control schemes. I happen to be a wool-grower myself, but I recognized at the beginning of the war that, although I do not like the control of wool, it is essential in wartime. Similarly, though I had previously opposed proposals for the control of apples and pears, I realize that, during war-time, control is inescapable in the interests of the growers themselves. One of the objects of the bill, and the regulations associated with it, is the prevention of production of wheat on unsuitable lands, on lands in unsuitable districts, or indeed by unsuitable growers. I do not like the principle of licensing. Like the honorable member for Calare (Mr. Breen) I am perfectly certain that many difficulties will have to be resolved under this scheme, and a great deal of unpleasant restriction enforced which will be very unpopular with the farmers. In the past the wheat-farmers have been mainly in the position of receiving assistance, without having any compulsion applied to them. Consequently, a great many of them will dislike restriction when it is actually applied. Very much will depend upon the way in which the hoards carry out their duties as to whether or not this temporary stabilization scheme will stand up to the strain. I look upon the scheme as a trial. It does not convert me, as an honorable member has suggested by interjection, into a socialist in war-time, any more than I imagine myself to be an anarchist in peace-time. The scheme is to be given a trial. Who can say what will happen to wheat in the course of the next two years, should the war continue for that period? Even the honorable member who preceded me cannot be quite sure of what the future holds for the industry. It may be that, owing to developments overseas in a much shorter time than we think, a far greater demand, and far higher prices than we think possible, may eventuate.

Mr Scully:

– Does not that possibility make it still more dangerous to experiment with these regulations?

Mr DUNCAN-HUGHES:

– No. This is a real attempt to carry the wheatfarmer through a very difficult period, which, to a large degree, is none of his making. A converse possibility is that a dearth of shipping might cause a glut of wheat in Australia. In these circumstances, I admit that something in the form of control, little as I like the principle of restriction, becomes necessary.

Mr Pollard:

– Should there be a shortage of shipping, will not wheatgrowers who change over to the production of mutton and lamb still find themselves in difficulties?

Mr DUNCAN-HUGHES:

– Can any honorable member say whether, in two years’ time, there will be a greater demand and higher prices for wheat, or whether it will be practically impossible to transport it overseas? We can only hope that the boards which will administer this scheme will act with judgment. A multiplicity of possibilities for irritation will arise under these regulations as they are now drafted. For the reasons I have given, I accept the scheme, but, as I have said, I do so without enthusiasm.

Mr McLEOD:
Wannon

.My first objection to the scheme embodied in the bill is that we shall require an army of inspectors to police the regulations, and, very probably, the expenditure so incurred will exceed the cost of providing an additional advance of 6d. a bushel to the growers. It will be practically impossible to police the regulations. Chaos will result. So many injustices will be inflicted upon growers that their morale will break. The problems confronting the industry could be dealt with much more fairly and effectively by other means. The wheat policy of the Labour party is based on common sense. We are to aim at a production of 140,000,000 bushels. That means that we must calculate the number of acres required to produce that quantity. At best, the soundest estimate can only be a guess, and a wild guess by Bourke-street farmers. Another objection which I have to the scheme is that its administration will not be placed in the hands of practical farmers. On paper, the scheme looks very nice. The crop may look promising. In that case the boards will have power to order farmers to cut portion of their crop for hay. But whilst the crop may be estimated at many millions of bushels, whole areas of the wheat belt may be destroyed overnight within a month after the estimate is made. The crop may be estimated at six or seven bags to the acre, but actually the farmers may be lucky to get three bags to the acre. I repeat that the scheme will create chaos in the industry. How is it proposed to compensate farmers, assuming a crop of 140,000,000 bushels is expected and the actual yield does not exceed 40,000,000 bushels? We cannot afford to interfere with nature. Restriction of production may lead to a shortage. As the honorable member for Gwydir (Mr. Scully) has pointed out, we have now on hand only one year’s supply, and we do not know whether the crop next year will fall short of the average. If impracticable men are allowed to meddle with the industry, we may be faced with disaster. As an additional safeguard, the regulations provide that the grower can be compelled to cut his crop for hay in any year in which a heavy crop is expected. In such circumstances, how will a farmer who is forced to cut for hay be compensated ? In the long run it would be better to allow him to strip his crop, because it is easier to store wheat. We have not the facilities to store hay. The whole scheme is impracticable. It is a foolish attempt to regiment the industry. Such a scheme cannot be carried out fairly between growers. One man may be restricted to 25 per cent, of his present acreage, and another allowed a greater percentage. Even should the allotted percentages be equal, the fact remains that one man can grow more wheat than another on a given area. I do not propose to cover ground which has already been covered by other honorable members. I suggest that the whole scheme should be withdrawn, and something more practicable devised. I feel sure that the growers themselves could devise a better scheme, paying due respect to the safety of the industry. Such a course would be far wiser, because any scheme devised by the growers themselves would offer a firm foundation for future policy. I oppose the restriction of production, because it will only worsen conditions in the industry.

Mr ARCHIE CAMERON:
Barker

– I do not propose to say much about the bill at this unearthly hour of the morning, because I have a decided objection to the framing of legislation in “‘possum” hours. I have had some experience with wheat, and I believe that this bill, which will be passed by this House some time this morning, will have to be amended before very long. It contains provisions of a financial character, which this Parliament, or its successor, will find to be a little too onerous. If honorable members opposite happen to be in power at such a time, they will know all about it.

Mr Pollard:

– That means that the price will be reduced?

Mr ARCHIE CAMERON:

– Very definitely. On the other hand, if honorable members opposite believe that the wheatgrower can be given a guaranteed price, with unlimited production, they have another think coming. If unlimited production be permitted, no need will exist for any stabilization scheme. The need for stabilization arises from the fact that the production of wheat exceeds the demand. The world has built up its second greatest surplus of wheat. I think that the present-day surplus is about 1.400,000,000 bushels, the greatest surplus having been during the depression years from 1929. to 1935. Since then the demand for wheat has decreased, because European countries are growing more wheat. Any scheme of stabilization in this country will not affect the internal agri cultural policies of European countries. We have had some experience of international agreements with regard to wheat. They were not altogether successful, and I do not think that they will prove to be successful in the future. However, we must face our own difficulties. If honorable, members opposite think that we can continue to produce wheat at a cost of 3s. 6d. a bushel, and export it to world markets, on which the price is 2s. 6d. a bushel, and make up the difference of ls. in Australia, they must recognize that that ls. must he extracted from the pockets of somebody in this country.

Mr McLeod:

– We produce wheat cheaper than any other country.

Mr ARCHIE CAMERON:

– No ; Argentina, Russia and Canada can run rings around us in the cost of producing wheat.

Mr McLeod:

– ‘Shipping freights must be reduced.

Mr ARCHIE CAMERON:

– That is not the solution of our problem. The awful truth is that our only available markets are overseas. We cannot control the market overseas, or in the Par East. As a general rule, we can only sell wheat in the Ear East when the price is unprofitable to the Australian producer.

The honorable member for Gwydir (Mr. Scully) made some well-chosen remarks about the composition of the Wheat Board. One truth that honorable members should fix firmly in their minds is that the people who pay the piper will call the tune. If an industry is subject to grower-control, there must also be grower-responsibility. The financial responsibilities under this bill will be borne not by the wheat-growers, but by Australian taxpayers. While they continue to find the money, it is a pretty piece of impudence on the part of the representatives of the growers to contend that the fanners should direct the operation of the scheme. No honorable member opposite would administer his farm on the same principle. He would not say to a man who might be share-farming with him : “ As you are putting something into this venture, I shall give you complete control “. Far from it ! He would carefully point out that, as he bore the financial risk and responsibility, he must have control. The share-farmer would not be permitted’ to watch, a test cricket match while the crop was being -ruined by the weather.

The statement of the Assistant Minister (Mr. Anthony), dealing with the subdivision of existing wheat properties which are registered, should be carefully watched, because it is in direct conflict with another decision that the Government is putting into effect. Provision has been made to prevent the subdivision of wheat land, once the marginal problem has been adjusted. Unless the Assistant Minister has cognizance of that fact, it may lead to trouble in the near future.

One honorable member remarked that it was terrible to suggest that the Government should compel a man to cut hay. This matter is closely associated with production, which depends upon the export trade. Export is the key to the whole problem. Very shortly, Great Britain may cease to import Australian wheat for the duration of the war, because supplies can be secured more quickly from Canada and Argentina, as the voyage is much shorter than it is from Australia and the freights are certainly no higher.

Mr Pollard:

– To what other class of production should wheat-growers turn?

Mr ARCHIE CAMERON:

– That is a problem which will arise out of the war. Farmers should not be permitted to produce unlimited supplies of wheat which the country can neither store nor export.

Mr Pollard:

– Does the honorable member suggest that farmers should engage in some other form of agriculture?

Mr ARCHIE CAMERON:

– The honorable member knows that I have definite ideas upon the subject; but as it does not come within the i scope of the bill, I would be infringing the Standing Orders if I were to deal with it at this juncture.

The honorable member for Gwydir declared that the Australian Wheat Board had rendered excellent service by disposing of a large portion of our surplus production. It is the first time in the history of Australia that the Commonwealth Government has disposed of wheat under such conditions as those which it accepted on that occasion. Although a few small deals were transacted during the last war, Australia went in for the business in a big way on this occasion.

The Commonwealth had to choose between accepting terms involving the payment in cash of one-half of the total purchase price, .and the balance at the rate of 4£ per cent, over a period of twelve months to two years, or running the risk of mice and weevils eating the wheat. For several days, honorable members opposite have taunted Ministers with having sold wheat on terms to a country which may be our enemy. If the wheat had been kept in Australia and a mice or weevil plague had developed, as it did during the last war, the Government would have had neither wheat nor cash with which to appease the farmers. Honorable members should take such matters into consideration before they trenchantly criticize the Government.

I represent some of the best wheat land and some of the worst wheat land in South Australia, and honorable members opposite cannot convince me that everything in the wheat garden is lovely, that the farmer need not restrict production, because the Government will assist him. and that the Commonwealth Bank and Kingdom-come will support him. We must study the industry honestly and impartially. Before many years have elapsed, we may be obliged to make, in regard to wheat-growing, decisions similar to those which the Government of the Dutch East Indies was compelled to make in the days of the Chadbourne International Sugar Agreement, dealing with the production of sugar in Java and other Dutch islands.

Mr Curtin:

– All the critics, pessimists and optimists, are not confined to this side of the House.

Mr ARCHIE CAMERON:

– I should be perfectly happy, for the peace of mind of the Leader of the Opposition (Mr. Curtin), if all members on his side of the House were optimists ; but he has one or two of the cantankerous pessimists, who usually accumulate on this side’. The wheat problem is not so easy as it would seem after listening to one or two honorable members opposite. Although they represent wheat-growing constituencies like Calare, Wannon, and Riverina, I remind them that some honorable members on this side of the chamber know all the ramifications of the industry, to their financial cost, and are also conversant with the international conditions of the wheat trade, which has declined over a period of years. Wealthy countries like the United States of America have been able to subsidize the export of wheat. This year, when Australia was trying to sell flour in the Philippine Islands and Shanghai, the subsidy paid by the Government of the United States of America on a barrel containing 196 lb. of flour amounted to 2s. a bushel on the wheat content. No honorable member opposite could claim with justification that the Commonwealth should subsidize the export of flour on a similar basis, because it would be beyond the financial capacity of the Government to do so.

Mr Pollard:

– Is the honorable member in favour of the proposed price of 3s. lOd. a bushel?

Mr ARCHIE CAMERON:

– In my opinion, the price is too high. Before very long, the Government of the day will admit that a mistake was made, and that the Assistant Minister was too optimistic when he fixed the price.

Mr McLeod:

– Is the honorable member in favour of reducing the interestrates payable on mortgages?

Mr ARCHIE CAMERON:

– The honorable member does not, know the meaning of mortgages. If he visits the electorates of Barker, Grey and Wakefield, and the top end of the Wimmera, he will find that he can get sheaves of mortgages on which the rate of interest does not matter, whether it be 1 per cent, or 100 per cent., because no interest will ever be paid upon them.

Mr McLeod:

– A reduction of interest would greatly assist farmers.

Mr ARCHIE CAMERON:

– Not to a large extent. If the position of a farmer is such that the interest burden means to him the difference between success and failure, he has a very queer agricultural economy.

Mr McLeod:

– It means a difference of ls. a bushel. Has the honorable member ever read the Wheat Commission’s report ?

Mr ARCHIE CAMERON:

– As I spent seven or eight very interesting weeks with the commission in Victoria and South Australia, I am familiar with its investigations, and I have made a close study of its report. The honorable member quoted extreme cases, in reference to which the commission declared rightly that even if the farmers concerned had obtained 10s. a bushel for their wheat, they could not have made a profit on the year’s operations. Some of those men will never make good farmers, and much of the land that men are trying to cultivate is not suitable country for growing wheat.

Mr McLeod:

– Does the honorable member refer to the Wimmera?

Mr ARCHIE CAMERON:

– I refer to land to the north of the federal division of Wimmera. Fortunately for the honorable member, he represents some of the best wheat-growing land in Australia. Farmers are in difficulties chiefly because they were too confoundedly greedy in buying their neighbour’s land. Before prices crashed, it was the pride and delight of many farmers to he able to declare that they could grow wheat successfully for ls. 6d. a bushel. Descriptions of their success were published in the newspapers. One of the leading members of the Wheatgrowers’ Federation in South Australia, Mr. Herbert Dolling, who contested a Senate seat for the Labour party at the recent general election, was one of the most consistent contributors to the press. Repeatedly he asserted that his cost of production was only ls. 8d. a bushel. But during the depression he could not grow it profitably at 4s. a bushel.

Mr Pollard:

– The honorable member should be fair. He knows that Mr. Dolling had freehold land.

Mr ARCHIE CAMERON:

– I have an intimate knowledge of Mr. Dolling’s experiences, and I heard the evidence which he gave before the Wheat Commission. On that occasion his testimony was a flat contradiction of everything that for years he had written on the subject. Many farmers desired to buy their neighbour’s land. If they lacked the necessary cash, they paid a deposit of a couple of pounds an acre, and gave a fat mortgage of £8 or £10 an acre at fantastic rates of interest. When wheat prices crashed they were prepared to blame everybody but themselves for their position. Many things can be said on both sides about the wheat problem; but up to date the criticism has been onesided. Before honorable members opposite have been in this chamber much longer, I hope that they will have a better appreciation of the justice of the case that can be put for some of these intricate and interesting problems. In many instances failure has been due to ill luck and to conditions over which no farmer has control. Some of the worst cases, however, relate to men who, out of sheer desire to go one better than their neighbours, got themselves into a financial mess, for which they alone were responsible. Fifteen years ago they were rigid, dyed-in-the-wool Conservatives. Now, so extreme are their views, that they speak and act as if they were reared in Moscow.

Mr Curtin:

– Do any of them ask for the establishment of a wool appraisement centre in Albany?

Mr ARCHIE CAMERON:

– To discuss that subject would be to transgress the Standing Orders. I merely desire to suggest to honorable members that they should tread warily when dealing with the wheat problem. In my opinion, the Government has already exceeded the bounds of safety. We all know that these bounds have been exceeded owing to political expediency. I frankly confess that I have not been enthusiastic about any wheat stabilization scheme. When I was Minister for Commerce, I proposed the payment of 3s. 6d. a bushel, and, if a scheme of this kind is still in operation four or five years bence, I feel sure that honorable members opposite will admit that that price was not far from the mark.

Mr ANTHONY:
Assistant Minister · Richmond · CP

in reply - Despite the criticism that may be levelled against this scheme, it represents the first genuine attempt at stabilization of the wheat industry throughout Australia. Although points of criticism will undoubtedly arise in connexion with this bill and the regulations to be promulgated under it, I believe that it will contribute greatly towards the stabilization of the industry. The honorable member for Gwydir (Mr. Scully) apparently believes that the crop is to be restricted to 140,000,000 bushels, but that is not quite correct. The marketable crop is to be 140,000,000 bushels, but that does not take into account 20,000,000 bushels for seed and feed purposes. Therefore, the total production to be permitted under the scheme will be about 160,000,000 bushels. The honorable member also took exception to the constitution of the Australian Wheat Board. I point out that part of the plan under the bill and the regulations is to increase the representation of the growers on the board.

Mr Scully:

– They will still be hopelessly in a minority.

Mr ANTHONY:

– Not at all. When two additional growers’ representatives are appointed, the personnel of the board will be twelve members, of whom four will represent the growers and two will represent the marketing pools. Therefore, the growers will have six representatives out of twelve, apart from the chairman. What, could be fairer than that? The honorable member for Calare (Mr. Breen) and the honorable member for Riverina (Mr. Langtry) must be under a serious misconception when they say that the grower will receive only 2s. 8-Jd. a bushel at sidings. The handling charges are estimated at about 9d. a bushel, which reduces the price from 3s. lOd. f.o.b. to about 3s. Id. a bushel at sidings.

Mr Scully:

– The handling costs in the No. 1 Pool were nearly ls. a bushel.

Mr ANTHONY:

– On the figures supplied by the Australian Wheat Board, the average freight charge is 4 1/2d. a bushel and the other charges, including storage, amount to another 4$d. a bushel, making a total of 9d. a bushel. If an honorable member says that the price at sidings is 2s. 8d. a bushel, when it is actually 3s. Id. a bushel, he reduces the payment to the farmers by £3,000,000.

I point out to the honorable member for Ballarat (Mr. Pollard), and the honorable member for Gwydir (Mr. Scully), that restrictions with regard to primary industries are already in “operation in Australia. The _ honorable member for Brisbane (Mr. George Lawson) and the honorable member for Griffith (Mr. Conelan) can vouch for the fact that the sugar industry is severely bound by restrictions as to acreage and the quantity of mills, yet the sugar scheme has proved successful. If the wheat-growers are to receive a guaranteed price, some form of restriction is inevitable, sothat the liability of the Commonwealth Government may be limited.

Mr Scully:

– The production of sugar does not fluctuate so much as in the case of wheat.

Mr ANTHONY:

– The fluctuation is so serious at times that it affects the price of sugar. The principle of restriction of production was established by the Labour party in Queensland, and has always been supported by it. I do not anticipate any of the difficulties that some honorable members forecast as the result of a restriction of wheat acreage, because common sense will have to be applied in regard to it. Members of the Opposition may even be in power when the restrictions have to be enforced. In that event they would, no doubt, ensure that irksome regulations were not imposed. We must obtain our experience in this matter as we proceed. It is necessary to pioneer a new path in respect of the wheat industry, and I feel sure that common sense and fair play will be the guiding principles in the application of the regulations.

The honorable member for Grey (Mr. Badman) suggested that a clearer definition of “ wheat-grower “ than that contained in the bill is required. There is much in what he has said, and I shall direct the attention of the Minister for Commerce (Sir Earle Page) to the matter, with a view to having it clarified. I trust that the bill will receive a speedy passage.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clause 1 agreed to.

Progress reported.

Message recommending appropriation reported.

In committee (Consideration of Governor-General’s message) :

Motion (by Mr. Anthony) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the Wheat Industry (War-time Control) Act 1930.

Resolution reported ; report adopted. In committee (Consideration resumed) :

Clauses 2 to 6 agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill - by leave - read a third time.

page 758

WHEAT TAX (WAR-TIME) ASSESSMENT BILL 1940

Second Reading

Mr. ANTHONY (Richmond- Assistant

Minister) [3.30 a.m.]. - I move -

That the bill be now read a second time.

The purpose of this bill is to give effect to the provisions of the Wheat Tax (Wartime) Bill 1940. The bill provides that the tax shall be payable by the wheatgrower and shall be collected by the Australian Wheat Board by deduction from compensation due to the grower on account of the acquisition of his wheat by the Commonwealth. The amount of the tax will be assessed by the Wheat Industry Stabilization Board to be constituted under the National Security (Wheat Industry Stabilization) Regulations. I commend the bill to honorable members.

Question resolved in the affirmative.

Bill read a second time and reported from committee without amendment or debate.

Bill - by leave - read a third time.

page 758

STATES GRANTS (DROUGHT RELIEF) BILL 1940

Message recommending appropriation reported.

In committee (Consideration of Governor-General’s message) :

Motion (by Mr. Anthony) agreed to-

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant and apply out of the Consolidated Revenue Fund a sum for the purpose of making grants to the States for the purpose of drought relief.

Resolution reported.

Standing Orders suspended ; resolution adopted.

Ordered -

That Mr. Anthony and Mr. Fadden do prepare and bring in a bill to carry outthe foregoing resolution.

Bill brought up by Mr. Anthony, and read a first time.

Second Reading

Mr ANTHONY:
Assistant Minister · Richmond · CP

– 1 move - That the bill be now read n second time.

The purpose of this bill is to grant and apply out of the Consolidated Revenue Fund the sum of £1,000,000 to be made available to the States as grants for the relief of wheat-growers in droughtstricken areas. Provision for this amount to be paid to wheat-growers seriously affected by the drought was included in the amended budget proposals. Allocations to the individual States will be determined after a conference with Ministers representing the six States. The methods to be adopted by any State to alleviate hardship suffered by wheatgrowers within its boundaries in consequence of drought will be approved by the Commonwealth before a grant is made to that State. I commend the bill to honorable members.

Mr SCULLY:
Gwydir

.- 1 support the bill. It is some satisfaction to know that this concession has been granted to the distressed wheat-growers throughout the Commonwealth as the result of negotiations between the Government and the Opposition. I hope that when this money is made available a specific instruction will be issued to the respective State Governments that it must, be utilized only for the purpose for which the grant has been made. When grants of this kind have been made on other occasions, the only benefit received by necessitous farmers has been the writing down of their indebtedness to their creditors. I trust that an instruction will be issued to the State Governments that this money must be paid direct to necessitous farmers.

Mr BAKER:
Maranoa

.I support the remarks of the honorable member for Gwydir (Mr. Scully) regarding the terms on which the grants should be made to the State Governments for distribution among distressed wheatgrowers. The appropriation of such a large sum - £1,000,000 - represents a notinconsiderable concession which has been wrung from the Prime Minister by the Labour representatives on the Advisory War Council. I am glad to be able to say that I was one of the ten representatives of wheat-growing constituencies who waited on the Minister for Commerce (Sir Earle Page) to urge that a further payment be made from the No. 2 wheat pool. We asked for an advance of 6d. a bushel, but on the principle that half a loaf is better than no bread, we were glad to accept 3d. I hope that when this money is distributed it will be paid directly to the distressed wheatgrowers, and not used to reduce their indebtedness to their creditors.

Mr POLLARD:
Ballarat

– I support the bill; but in view of the large sum of money to be appropriated clause 3 should be amended to provide that its final allocation among the States shall be subject to the approval of the Government. Clause 3 provides -

The amount payable to each State under this act shall be such amount as the Minister determines after conferring with State Ministors respectively representing each of the six States.

I have a very vivid recollection of what happened last year when a grant of £500,000 was made for distribution amongst necessitous farmers in droughtstricken areas. Notwithstanding the fact that the then Minister for Commerce, the honorable member for Barker (Mr. Cameron), conferred with each of the six State Ministers, he allocated the grants to the States without reference to the Government of the day. This bill confers too great a power on a single Minister ; it gives him absolute control of the distribution of £1,000,000. I do not suggest for a moment that the present Minister for Commerce (Sir Earle Page) will not exercise his judgment in the way he thinks best, but we must remember that we are all human and, where such a large sum of money is involved, the final decision should rest not on the Minister but on the Government.

Mr Anthony:

– I shall be glad to move an amendment substituting the words “ Governor-General in Council “ for the word “ Minister “.

Mr POLLARD:

– I am glad to have that promise. The State of Victoria was excluded from the allocation of funds for drought relief last year, and to-day we have the spectacle of wheat-growers from the Mallee, who should have participated in the grant, calling on the secretaries of the Trades Halls at Ballarat and Melbourne asking for jobs. In both Federal and State spheres there is a tendency to vest too much power in a single Minister. Unless the proposed amendment is inserted in this bill the Minister may follow the lead given by his predecessor, take the law into his own hands, and distribute this grant according to his own sweet will. When the honorable member for Barker (Mr. Archie Cameron) was Minister for Commerce he acted in an arbitrary manner in allocating among the States the grant for distressed wheatfarmers, but when the Treasurer of the day suggested the appointment of a certain individual as Co-ordinator of Works without consultation with the Cabinet, the honorable member for Barker was immediately up in arms against the proposal. It was good policy for the honorable member to act as he did, but not good policy for his colleague to act in such a way. Causes of irritation of this description should be removed, and all matters which vitally affect the welfare of individuals in the different States should be subject to final approval by Cabinet.

Mr ARCHIE CAMERON:
Barker

– With the passage of time no doubt the honorable member for Ballarat (Mr. Pollard) may be expected to gain a closer acquaintance with the truth. Many of his statements on this measure are wide of the facts. The honorable gentleman said that I had distributed £500,000 in drought relief. That is not true. The money I distributed had nothing to do with drought relief. Moreover, the purposes for which the money was to be used and also the method of distribution had been discussed on two or three occasions in this Parliament. The object of the Government was to assist farmers on marginal wheat lands. The act passed by this Parliament provided that the money made available should be distributed by the Minister for Commerce. The Minister was not required or expected to consult Cabinet, although it had previously been agreed that the State Ministers for Agriculture should be consulted. They were consulted and asked to submit proposals to the Commonwealth. The Minister for Agriculture of Victoria did not submit proposals in accordance with the law. That is the true version of what occurred. The Government of Victoria deserved the treatment it received, because it did not attempt to comply with the provisions of the act passed by this Parliament. The money was distributed legally and wisely.

Mr Rankin:

– But unfairly.

Mr ARCHIE CAMERON:

– What is wise cannot be unfair. The money was distributed in accordance with the terms of the act. I hope that the Government will not amend this bill as suggested by the honorable member for Ballarat. Any trouble that occurred over the distribution of the money provided by the last parliament for the relief of farmers in marginal areas, was due entirely to the shortcomings of the Government of Victoria. The Premier of Victoria sent a letter to the Prime Minister (Mr. Menzies) which no State Premier should have written. It stated that after the Government of Victoria had been informed by the Commonwealth Government how much money would he made available, it would decide what to do with it. The act set out how the money was to be expended. Probably the honorable member for Ballarat is not aware that the State Ministers for Agriculture conferred in this chamber for two days without being able to agree to anything except that the distribution of the money should be left to the Minister for Commerce.

Mr Pollard:

– Subject to the approval of Cabinet.

Mr ARCHIE CAMERON:

– Not at all. I speak with some knowledge of the facts of the case. If Commonwealth Ministers cannot be trusted to distribute relatively small amounts of money according to principles laid down in acts of parliament, things have come to a pretty pass. If all such matters have to be referred to Cabinet, Ministers will have no time to deal with major matters of policy.

The Government’s policy in connexion with marginal lands had already been determined. For the last five years moneys provided for this purpose have been distributed by the Minister for Commerce, according to the stipulated principles.

Mr Pollard:

– It is too much power to repose in one Minister.

Mr ARCHIE CAMERON:

– Much larger sums of money will doubtless be expended by the Ministers of our service departments under the terms of measures which will be passed through this parliament within the next few hours without any protest from the honorable member for Ballarat. His arguments were not worth the breath he used to utter them. The Government should stand by the bill as it was introduced.

Mr ANTHONY:
Assistant Minister · Richmond · CP

in reply - The Government is prepared to accept the suggestion of the honorable member for Ballarat (Mr. Pollard). In any case the whole matter will be subject to the advice tendered by the Australian Agricultural Council, and the Commonwealth Government will have a check rein on the money.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 and 2 agreed to.

Clause 3.

Motion (by Mr. Anthony) agreed to-

That the clause be omitted and the following clause inserted in lieu thereof: - “ 3. The amount payable to each State under this act shall be such as the Governor-General determines: Provided that no determination under this section shall be made until after the Minister has conferred with State Ministers respectively representing each of the six States concerning the amounts to be paid under this act to the States.”

Clause 4 agreed to.

Preamble agreed to.

Title agreed to.

Bill reported with an amendment; report adopted.

Bill read a third time.

page 761

LOAN (DROUGHT RELIEF) BILL 1940

Message recommending appropriation reported.

In committee (Consideration of Governor-General’s message) :

Motion (by Mr. Anthony) agreed to-

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to authorize the raising of moneys to be loaned to and the payment of moneys to, certain States for the purposes of drought relief.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Anthony and Mr. Fadden do prepare and bring in a bill to carry out the foregoing resolution.

Bill brought up by Mr.. Anthony, and read a first time.

Second Reading

Mr. ANTHONY (Richmond- Assistant

Minister) [3.57 a.m.]. - I move -

That the bill be now read a second time.

The purpose of this bill is to authorize the raising of moneys to be loaned to certain States and the payment of moneys to those States for drought relief purposes. As the result of prolonged drought conditions throughout Australia immediate action became necessary in September to avoid excessive losses of livestock and extreme hardship in the areas affected. There was still a chance that the livestock position would be improved by favorable rains in a number of districts, but over a large area the position of feed and crops was already hopeless and, with a continuance of dry conditions for another couple of months, heavy stock losses appeared unavoidable unless special provision could be made to meet the needs of the situation. A conference of Commonwealth and State Ministers was held on the 27th September to discuss drought relief problems. The subject received further consideration at two later conferences of representatives of the Commonwealth and State’ Governments. At the request of the Commonwealth Government the State Governments prepared and presented outlines of the proposals which it was desired should operate in the respective States. These proposals were considered by the Commonwealth to be reasonable and sound, and a drought relief plan acceptable to all the governments interested was agreed upon. The main points of the plan were the provision of finance for drought relief and the assurance that any moneys so provided would be used in the best interests of drought-stricken farmers.

The amounts required by the several States to put their proposals into effect, make a total of £2,770,200, and are set out in detail in clause 3 of the bill.

Of this sum the Commonwealth has already made £950,000 available to enable the States to meet cases of immediate urgency. “With the approval of the Loan Council the Government decided that the necessary money should be raised by means of a Commonwealth loan, and that the Commonwealth should then make the sum of £2,770,000 available to the States by way of loans, to be repaid on an instalment basis over a period not exceeding seven years. Interest would be payable by the States on moneys so lent to them by the Commonwealth at the rate payable by the Commonwealth on moneys borrowed for this purpose.

Honorable members will see outlined in the bill an arrangement by which the Commonwealth will meet a portion of the interest which would normally be due by the States on the principal of the moneys loaned to them. This interest contribution, the administrative costs of raising the Commonwealth loan, and a straight-out grant to drought-affected wheat-growers, which is the subject of a further bill, may be regarded as the Commonwealth Government’s contribution to drought relief in Australia. Honorable members will note that the States are being allowed a period of four years in which to make their first repayments of principal. In fairness to the States, they must be given an opportunity to recover some of the moneys which they, in turn, will lend to the drought-stricken farmers. It will be appreciated by honorable members that when a farmer has suffered a year of severe drought, at least three or four years must elapse before he will be in the position to repay money advanced to him during or following the drought to enable him to carry on. The bill also provides for the appropriation from the Consolidated Revenue Fund of moneys necessary to meet the Commonwealth’s contribution to the States by way of interest payments to which I have previously referred. I commend the bill to honorable members.

Mr SCULLY:
Gwydir

.- I support the bill, and commend the decision of the Government to advance this money to the States for the relief of distressed primary producers. I point out, however, that the sum proposed to be made available will not meet the posi tion; three or four times as much is. necessary, because of the prolonged and disastrous drought which many districtshave experienced. The Gwydir electorate combines wheat-growing and grazing. Some of the best grazing land in Australia is included in the district, but so disastrous has been the drought that the pastures have suffered badly. In the’ northern portion of New South Wales and in southern Queensland, the graziers are in a pitiable condition. I know of efficient and adaptable men who have: been practically forced off their holdings. Never before in the history of Australia have the conditions of men on the land been so serious. A few days ago there appeared in the Sydney Morning Herald a letter from Mr. H. Simms, of Bellata, in which he said that in New South Wales there were 112,000,000 sheep with a capital indebtedness of over 25s. a head. That shows how serious is the position and how inadequate this measure of relief will be. if adequate assistance is to be given to these primary producers, a much bigger sum must be made available quickly. The only way to meet the situation is by the utilization of the credit resources of the Commonwealth, by the granting of advances to distressed primary producers, through the Commonwealth Bank, at nominal rates of interest. There is a demand from the primary producers for such a scheme. I regard this bill as the first of many instalments, if the necessary relief is to be given. I hope that the Commonweal th Government will insist on the money being made available to distressed farmers at a nominal rate of interest, and will not allow the State Governments to make a profit out of the distress of the farmers.

Mr BAKER:
Maranoa

.- I express my appreciation of the proposals contained in this bill, but I point out that Queensland will receive only £250,000, whereas the other States are to receive more.

Mr Fadden:

– The States will receive what they asked for.

Mr BAKER:

– In that event, I have no more to say except that Queensland is suffering from a severe drought, and that a scheme of water conservation, including such works as the damming of the chief river, should be undertaken.

Question resolved in the affirmative.

Bill read a second time.

In committee :

Clauses 1 and 2 agreed to.

Clause 3 (Application of moneys).

Mr GUY:
Wilmot

.- I desire to know why no money is to be advanced to Tasmania. I expect to be told that that State made no application for assistance, but I point out that only last week the Premier of Tasmania said that he had not submitted an application because it was distinctly understood that only wheat-growers would be covered by this legislation. I now find that the hill provides for “ the alleviation … of hardship suffered by primary producers in consequence of drought.”

Mr Curtin:

– Does the honorable gentleman suggest that drought conditions exist in Tasmania?

Mr GUY:

– Definitely yes.

Mr Archie Cameron:

– I was chairman of both the conferences at which the Premier of Tasmania was present. If he had had a good case to present, he certainly failed to present it.

Mr GUY:

– As I have said, the Premier of Tasmania did not make application for assistance because it had been decided that the assistance should be for wheat-growers only.

Mr ANTHONY:
Assistant Minister · Richmond · CP

– In reply to the honorable member for Wilmot (Mr. Guy), I can only say that the sums set down in this hill are those specified toy the States in their applications. If Tasmania is not mentioned, it is because no application was received from that State.

Mr Guy:

– Was it decided that the money would be made available to assist wheat-growers only?

Mr ANTHONY:

– I point out that these moneys will not he free grants by the Commonwealth to the States; they will be loans to be repaid. It may be that the Government of Tasmania did not desire to incur the liability of a loan.

Mr ARCHIE CAMERON:
Barker

– I can assure the honorable member for Wilmot that the position is as stated by the Assistant Minister. I was chairman of both conferences at which this matter was discussed. At the conference held on the 25th and 26th October, both the Premier of Tasmania, Mr. Cosgrove, and the Minister for Agricultur, Mr. D’ Alton, were present. The bill now before the committee contains the amounts which were ‘ agreed to by the States on that occasion. There was no protest from Tasmania and no request from that State for any money.

Mr GUY:
Wilmot

.- I realize that Tasmania did not apply for any money, hut I wish to know whether it was at any time laid down that the money would be provided for the assistance of wheat-growers only.

Mr Archie Cameron:

– There was no such condition.

Mr GUY:

Mr. Cosgrove inferred that if he had known that money would be made available for primary producers other than wheat-growers, he would have submitted an application.

Mr Fadden:

– Every other Minister present at the conference understood the position.

Mr ANTHONY:

– My information is that this money was not specifically earmarked for wheat-growers exclusively.

Mr FROST:
Franklin

.I realize that this money is to he advanced toy way of loan. I have kept silent because I know that Cabinet is to give consideration to the disabilities of Tasmania. Tasmania looks on while a gift of £1,000,000 is distributed among the wheat-growers of the mainland and nearly £3,000,000 more is advanced free of interest. The people of Tasmania do not mind that being done, but they hope that their request for £20,000 for the relief of distressed growers of small fruits will not he rejected when it. comes before the Parliament. The Treasurer (Mr. Fadden) smiles, so I feel confident that Tasmania’s claims will not be overlooked.

Mr. ARCHIE CAMERON (Barker) T4.14 a.m.]. - When this matter was decided at the Melbourne conference, it was known by the representatives of each State that the money was for other primary producers besides wheat-growers. If the proposal had been confined to distressed wheat-growers, Queensland would not have lodged a claim. Its problems are associated with the dairying industry, and the £250,000 which Queensland is to receive, will assist dairy-farmers, not wheat-growers. I assure the honorable member for Wilmot (Mr. Guy) that the representatives of Tasmania at the conference were fully aware of the conditions, but they did not apply for assistance.

Mr JAMES:
Hunter

.It seems to me that whenever Tasmania wants anything, it succeeds in obtaining it. It has been a liability to the Commonwealth for quite a long time.

The CHAIRMAN (Mr. Prowse).Order ! The honorable member must confine his remarks to the clause before the committee.

Mr JAMES:

– It had the Prime Ministership-

The CHAIRMAN:

– Order !

Mr JAMES:

– The President of the Senate-

The CHAIRMAN:

– Order !

Mr JAMES:

– The Speaker of the House of Representatives, and the indomitable Gerry Mahoney all in the one session, and even then was not satisfied.

The CHAIRMAN:

– Order ! The honorable member must either confine his remarks to the clause, or discontinue them.

Mr JAMES:

– I hope that this sitting will soon be terminated.

Clause agreed to.

Clauses 4 and 5 agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 764

APPLE AND PEAR (APPROPRIATION) BILL 1940

Message recommending appropriation reported.

In committee (Consideration of GovernorGeneral’s message) :

Motion (by Mr. Anthony) agreed to-

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant and apply out of the Consolidated Revenue Fund a sum for the purpose of repaying to the Commonwealth Bank of Australia advances made for the purposes of the National Security (Apple and Pear Acquisition) Regulations.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Anthony and Mr. Fadden do prepare and bring in a bill to carry out the foregoing resolution.

Bill brought up by Mr. Anthony, and read a first time.

Second Reading

Mr ANTHONY:
Minister assisting the Minister for Commerce · Richmond · CP

– I move -

That the bill be now read a second time.

This measure is introduced for the pur pose of granting and applying out of the Consolidated Revenue Fund the sum of £750,000, to enable the repayment to the Commonwealth Bank of Australia of advances made by the bank for the purposes of the National Security Apple and Pear Acquisition Regulations.

By October, 1939, it was apparent that, owing to war conditions, the normal channels of marketing apples and pears would not be available for the 1940 crop. Those fruits did not appear in the priority lists of the Government of the United Kingdom, and the export of any of our apples and pears to the United Kingdom appeared extremely doubtful.

Forced to consider new methods of disposal and marketing, the Government decided that acquisition by the Commonwealth as from the 1st March, 1940, of the 1940 crop of apples and pears was the only means of averting chaotic conditions in the industry. Provision for an acquisition scheme was made by regulations promulgated under the National Security Act in November, 1939. It was necessary that finance should be provided for the marketing committee of the Australian Apple and Pear Board, the body charged with the administration of the 1940 acquisition scheme.

In normal marketing conditions, apple and pear growers receive assistance from outside persons or firms, in the form of cash advances, fertilizer supplies, and orchard requisites for the production and harvesting of the coming crop. It was necessary that the Commonwealth, having decided to acquire the 1940 crop, should come to the assistance of growers to enable customary practices in regard to the production and harvesting of the 1940 crop to proceed. It was decided that advances should be made to growers, such advances to be offset against realizations from sales of the fruit acquired. As a first advance, the Government agreed to make payments to individual growers at the rates of 2s. a bushel on apples and 3s. a bushel on pears, in two instalments, on 75 per cent. of the assessed crops of apples and pears. Crop assessments were made in January, 1940.

As an inducement to growers to pick their fruit in its best condition, and to expedite delivery to the agents of the marketing committee, the Government later agreed to make to them a further advance of1s. a bushel on both apples and pears of prescribed quality delivered to the marketing committee. Funds were required by the marketing committee to provide also for the costs involved in the packing, transport and marketing of the fruit, and for administrative and publicity expenses.

In accordance with regulation 25 of the National Security (Apple and Pear Acquisition) Regulations, arrangements were made with the Commonwealth Bank to advance sums totalling £3,078,125 for the above-mentioned purposes, subject to the following conditions: -

  1. A guarantee in pursuance of the regulations to be furnished for the full amounts of advances made by the bank.
  2. The clearance of outstanding indebtedness before the 31st December, 1940.
  3. Interest on advances to be charged at the ruling rate for rural credits advances.

Although the marketing of the 1940 apple and pear crop has not been completed, it is apparent at this stage that the operations of the marketing committee in respect of that crop will result in a substantial loss.

Honorable members are asked to approve the appropriation from Consolidated Revenue of a sum of £750,000, which will enable the Government to honour its guarantee to the Commonwealth Bank in respect of the deficiency between realizations from sales by the marketing committee of fruit which the Government acquired, and the total amount expended by that committee in the administration of the acquisition scheme from moneys ad vanced by the Commonwealth Bank. It is not anticipated that the sum which the Government will be called upon to pay to the Commonwealth Bank by the 31st December, 1940, by reason of this deficiency, will reach the figure of £750,000. It is desired, however, that the necessity for a further approach to Parliament, in the possible event of understatement of the amount for which approval is sought at this stage, may be avoided.

Several factors have operated to prevent the 1940 acquisition scheme from being a financial success. Honorable members will recall the unprecedented weather conditions which were experienced in all States in late March and early April of this year. Not only was the expected crop reduced by about 3,000,000 bushels, thereby upsetting the earlier assessments on which advances had been made, but the extraordinary conditions also had a detrimental effect on the size and quality of the fruit. The keeping properties under cool storage conditions were so greatly affected that considerable re-packing was necessary later in the season, and the presentation costs were thereby substantially increased. Further quantities of fruit on which advances had been made were lost at this stage. Moreover, the weak condition of many varieties after removal from store caused a depression of prices, resulting in a reduction of the anticipated proceeds from sales. Increased freights and insurance costs further inflated the marketing costs. Fortunately, the Government was able to arrange for the shipment to the United Kingdom this year of about 2,000,000 cases of apples and pears at very satisfactory prices. Whilst this figure is much less than 50 per cent. of normal pre-war exports to United Kingdom and continental markets, the realizations from such shipments made an important addition to the proceeds of sales of the balance of the fruit. I commend the bill to honorable members.

Mr FROST:
Franklin

.I support the bill. When the Government undertook the handling of the apple and pear crop throughout Australia, the estimate of the crop was about 13,000,000 bushels. Payment was made on over 9,000,000 bushels. Certain conditions had to be imposed which had not operated previously, and a big loss was sustained, principally on the mainland, owing to conditions which could not be avoided. Payment was made in respect of 3,000,000 bushels which was not harvested. The Government will not lose the amount stated by the Assistant Minister (Mr. Anthony) ; but even if it does so, it will come very well out of a difficult situation.

Mr POLLARD:
Ballarat

– I have no choice but to support the bill. The growers have been paid for their fruit. Although we are in honour bound to support this measure, because it provides for the liquidation of an overdraft with the Commonwealth Bank, honorable members are entitled to learn from the Assistant Minister (Mr. Anthony) whether the Commonwealth Government, and he in particular, intends in the present season to sanction the operation of a scheme in circumstances similar to those that operated last year, or will see that whatever scheme is applied is sensibly managed and well directed. Should not some consideration be given to the advisability of having an entirely new or a rejuvenated board to administer the apple and pear acquisition scheme? Before we pass this measure we should know whether the same board will administer the new acquisition scheme. I concede that the acquisition last season was surrounded by unprecedented difficulties, but any administration which could lose £750,000 on a £3,000,000 crop should be closely investigated. If the Minister will assure me that the new acquisition scheme will be brought into operation by legislation of this Parliament and not by regulation under the National Security Act, I shall sit down now.

Mr Anthony:

– If the honorable member has anything to say he should say it now.

Mr POLLARD:

– This Parliament in 1939 appointed an Apple and Pear Board to advise the Government on the improvement of marketing methods, both here and overseas. On the outbreak of war we were faced with shipping difficulties and the probability that the fruit which would normally be exported would have to remain in Australia. The Government vested that board with statutory power which enabled it, under the direction of the Minister for Commerce, to arrange for the marketing of the whole of the crop. I frankly admit the need for controlled marketing and I do not agree with those growers who, led by merchants, believe that in war-time they can enjoy peace-time privileges, and contend that they would be better off without control and acquisition. Control and acquisition are essential in existing circumstances. Nevertheless, the Commonwealth Government should review the arrangements and, although it is often suggested that producers are incapable of appointing men to represent them, a poll of the growers should be taken. The existing board was appointed by the Minister for Commerce after he had received nominations from the State Ministers for Agriculture, and the chairman is a merchant. I suggest that the acquisition scheme for the coming season should be administered by a board nominated partly by the Commonwealth Government and partly by the growers themselves. Last season, the value of crops was assessed and payments were made on that basis. Many growers failed to make deliveries, safe in the knowledge that they would receive threequarters of the assessment.

Mr Frost:

– Next season the crop will be paid for on delivery.

Mr POLLARD:

– We have no assurance of that.

Mr Francis:

– In spite of the loss sustained, apples sold retail at 4d. each.

Mr POLLARD:

– In Victoria better quality fruit, considering the bad season, was never previously available and prices were not above the ordinary. The retailer is often opposed to any orderly marketing scheme which will give the grower a greater profit and him a lesser profit. Apple and pear growers who have the interests of their industry at heart are anxious for a better scheme this year, and many of them are doubtful whether the personnel of the existing hoard is satisfactory.

Mr Rankin:

– The abnormal weather was largely responsible for the failure last season.

Mr POLLARD:

– The weather did have some effect, but it did not cause some of the growers to refrain from spraying, picking, and delivering their fruit to the packing sheds. Payment for fruit should be made on delivery and, if a grower is the victim of weather hazards, he has grounds for special relief.

Representatives of organizations in my district have written to me suggesting that the Minister for Commerce should appoint several gentlemen from that district to the board. It will be difficult to suggest that, but in view of the chaos in the industry caused by mismanagement and inexperience, I submit that a change of personnel is warranted. If half of the members of the hoard were replaced the new members would have the benefit of the experience of the remaining old members. They would also be critics of the past administration.

Mr FRosT:

– The members of the board were appointed by the growers.

Mr POLLARD:

– No, they were appointed by the Minister for Commerce on the recommendation of the State Ministers who had received nominations from various organizations. The present board has learned a lot, but an infusion of new blood would give good results.

Mr Archie Cameron:

– Which half of the membership would the honorable member dispense with?

Mr POLLARD:

– That would be a matter for the common sense of the Minister. The honorable member for Barker would make a good job of it, because he knows something about it. The existing hoard has not done well enough.

Mr Frost:

– The board was never constituted to do the job which was given to it.

Mr POLLARD:

– That is true, but it should have done better. Its failures convinced me that its personnel should bc changed. The problem in the Harcourt district, which I represent, will be very grave. There will be 1,000,000 cases of export apples produced, and if those growers who live near the Melbourne market think that they will be able to keep that market to themselves without its being invaded by other growers they are mistaken. The board lacks imagination, and demonstrated that fact in its marketing efforts. For instance, advertisements were inserted in the Melbourne papers stating that Sturmer apples could be purchased for 7s. 6d. a case c.o.d. I do not think that the sales effected by that advertisement paid for the cost of insertion. The average consumer will not take the trouble to write or telegraph for a case of apples. He wants to have the fruit put under his nose. All retail fruit-sellers should be licensed distributors under the scheme, and fruit should be put up in cartons of suitable size, and at a price which would be favorable to both the retailer and the grower. I hope that the Minister will change the personnel, of the board. I have placed before him, for his consideration, certain names which were submitted to me.

Mr BELL:
Darwin

.The honorable member for Ballarat (Mr. Pollard) dwelt upon the loss incurred lastyear and condemned the board for this, saying that the personnel of the board should be changed. I think that a word should be said in defence of the board, because it is well known that the loss was due largely to the bad season. It was not the board which decided that the crop should be assessed before the fruit was half grown, with the result that not nearly so much fruit was harvested as had been paid for. It is true that some of the growers did not take care of their fruit. They saw what was coming, and, having received their money, did not trouble to harvest the crop. That, however, was not the fault of the board. The Minister for Commerce and the State Ministers for Agriculture were responsible for the scheme which included provision to assess the fruit on the trees, because they believed that little of it could be exported. As a matter of fact, quite a lot was exported. Next year, I understand, the fruit will be paid for on delivery.

Mr WARD:
East Sydney

– I was amazed to hear the very poor defence of the board put up by the honorable member for Darwin (Mr. Bell). After attempting to exonerate the board from blame for what took place last year, he went on to say that this year the scheme was to be altered, and the fruit, instead of being assessed on the tree, would be paid for on delivery. It is evident that some one blundered.

Mr Archie Cameron:

– It was not the board.

Mr WARD:

– The honorable member says that the board was not to blame, but the honorable member for Ballarat (Mr. Pollard) said that there were no growers’ representatives on it. Who, then, was responsible ?

Mr Frost:

– All the members of the board were growers’ representatives.

Mr WARD:

– There seems to be more to this loss of £750,000 than meets the eye, and the matter should be inquired into further. It is strange that the Commonwealth Government should guarantee a return to the growers and then advance the money on the probable crop, not the actual one. I do not say that all the growers were blameworthy, but the way was certainly left open for unscrupulous growers to plunder the Treasury, particularly if supervision by the board was lax. I should lite to hear from the Minister just who was to blame for this costly blunder.

Mr ARCHIE CAMERON:
Barker

– There is no doubt that there will be some heart-burning over the doings of the Apple and Pear Board. The act constituting the board was passed in 193S, and the board was appointed in July, 1939. It was constituted as an export control board, and nothing more, but when war broke out, the control of marketing, both in Australia and overseas, was handed over to the board, although the members had no knowledge of local marketing conditions.

Mr Ward:

– What Minister was responsible for that?

Mr ARCHIE CAMERON:

– It was a government decision. An innovation which, I hope, will never be repeated, was introduced when it was decided to assess the crop on the trees. I was Minister for Commerce for seven months, and during that period I acquired a good deal of information regarding this matter. In Tasmania, the growers played the game very well, but I cannot say so much for those in some of the mainland States, particularly in New South Wales and certain parts of Victoria. In fact, the conduct of some of the growers in those States was deplorable. They raised no protest until after they had received their money from the Commonwealth. They took the money and then sold on the open market the fruit for which the

Commonwealth had paid, thus acting in defiance of all law and morality. The Commonwealth, partly for this reason, but largely because of weather conditions, was obliged, under its agreement, to pay for 3,000,000 cases of fruit which were never delivered to it. I saw fruit in the Wakefield electorate practically cooked on the trees. It was not worth picking. That happened also in Victoria, and in certain parts of New South Wales. However, we cannot get away from the fact that certain growers set out deliberately to defraud the Government. I can employ no other language. The next difficulty arose because it was practically impossible to secure shipping space. The fruit sent to England brought remarkably good prices, and, for that reason, I doubt very much whether so much as £750,000 will be needed for the purposes specified in the bill. Within the last six or seven weeks the fruit in cold storage has deteriorated to such a degree as to warrant some reduction of the proposed grant. Much of the fruit delivered was very poor. In extenuation of the board’s failure to achieve the best results, particularly on the Sydney market, I point out that the wholesalers of Sydney put their heads together in order to defraud the board. Week after week they refused to buy, except at crash prices, cargoes of fruit from Tasmania, including varieties of apples which, in other years, brought a good price on the Sydney market. None of them would touch certain varieties. I know perfectly well what happened. Honorable members will admit that, in setting out to crash prices, in that way the wholesalers in Sydney actually defrauded the board of a just price.

Mr Pollard:

– Why not replace half of the members of the board?

Mr ARCHIE CAMERON:

– That would not remedy the position. The real cause of the trouble was that the board was asked to handle a problem for which it was not constituted. It was set up as an export board. It is all very well to be wise after the event, but, possibly, some improvement might have been made had persons more closely acquainted with internal marketing conditions been appointed to the board.- Honorable members should bear in mind that many factors operated over which the hoard had no control. One of the most serious factors was the adverse weather conditions which prevailed throughout last summer. Even in Tasmania, where, with very few exceptions, the growers played the game, the standard of fruit and the yield on an acreage basis was not up to the average. Adverse climatic conditions supervened after the assessments were made, and before the fruit was ready for delivery. No authority could have foreseen such a difficulty. In all the circumstances I, as one who had something to do with the administration of the scheme and was, perhaps, occasionally fairly rough on the board, realize that the board was confronted with a very difficult task. I am certain that if many of the people, both inside and outside of Parliament, who have severely criticized the board had been entrusted with the same responsibility they would have made a hash of the joh.

Mr BREEN:
Calare

.- - It will require more than the eloquence of the honorable member for Barker (Mr. Archie Cameron) to put up a sound case in defence of the Apple and Pear Acquisition Board. It is now generally recognized that the scheme was ill conceived. The board estimated that there would be a huge surplus of apples, which it would not he able to sell on the Australian market. Consequently, a blind eye was turned to many things that were done in the orchards. Growers were encouraged to believe that they would be paid for their fruit provided they did not put it on the market. They could let it rot on the trees, or throw it to the pigs and poultry. Any administrative body which encouraged such an attitude deserves the severest condemnation. In the district of Orange many growers could not realize their cost of production. Inspectors visited orchards in that district and endeavored, in consultation with the orchardists, to assess a fair price for the fruit on the trees. It was invariably found, however, that the assessments would not enable the growers to meet their cost of production. Consequently, orchardists realized that it was useless to pick the fruit. Thus they rose in rebellion. Many of them refused to register. In this way many who were driven ofl their orchards, owing to the hardships of the scheme, incurred the full penalty of the law. Many storekeepers in Orange to-day are practically bankrupt because of the bungling on the part of the Apple and Pear Acquisition Board. I agree with the honorable member for Ballarat (Mr. Pollard) that the present personnel of the board should be replaced. It is unwise to leave so much power in the hands of people who have displayed such incompetence in the past.

Mr BAKER:
Maranoa

.Much fruit is grown in the Granite Belt in the electorate which I represent. Owing to the hardships arising from the operation of the acquisition scheme, many growers were driven from their orchards. It appears that advances were made on the blossoms on the trees. One difficulty confronting the industry is its inability to send fruit overseas owing to the shortage of shipping. However, the real cause of the industry’s marketing difficulties is lack of consumer credit. If the mass of the people here were provided with the wherewithal to purchase more fruit, the industry could establish a payable home market.

Mr RYAN:
Flinders

.I wish to make two points. So far as I am able to judge, the board took over control of local marketing in very difficult circumstances. It had had no previous experience of local marketing conditions. Bearing these facts in mind, it did as good a job as could be expected of it. I am in a somewhat different position from other honorable members who have fruit-growers in their constituencies, insofar as a considerable minority - it may even be a majority - of the growers in my electorate are extremely dissatisfied as the result of events which occurred last year. They have good grounds for such dissatisfaction. Many of them live in and around Melbourne, which is their normal market. Owing to causes completely beyond their control, the market was taken away from them. Their dissatisfaction is due mainly to the fact that the conduct of affairs by the hoard last year was far from efficient.

My second point is that the Government should grant to growers this year an advance prior to the delivery of the fruit into storage. Before the fruit is delivered at the store, the great majority of growers are obliged to meet heavy expenses in respect of labour and fertilizer. Most of them, if not all of them, require an advance of at least 6d. or 9d. a case before the fruit is actually delivered into store. If the board were efficient, the growers as a whole would, I think, be satisfied with the scheme.

Mr SPEAKER (Hon W M Nairn:

– I point out to honorable members that whilst the purpose of the bill is to grant and apply out of Consolidated Revenue a sum for the purpose of repaying advances by the Commonwealth Bank, the debate is resolving itself into a discussion of the merits and demerits of the Apple and Pear Acquisition Board. As the administration of the board arises only indirectly under the measure, I appeal to honorable members not to make that aspect a feature of their remarks.

Mr Archie Cameron:

– Is it not the custom of Parliament, Mr. Speaker, to insist upon the redress of grievances before granting supply to His Majesty? This measure is a request for the appropriation of a sum of £750,000 for a certain purpose.

Mr SPEAKER:

– I have no desire to stifle discussion, but merely suggest that, in view of the hour, honorable members should strictly confine their remarks to the bill.

Mr ROSEVEAR:
Dalley

– Whilst I do not represent any considerable number of fruit-growers, a substantial number of people in my electorate will be obliged to foot a portion of this expenditure. For that reason, some comment should be made on the disclosures that the House has heard during this debate. The time has arrived when the activities of a number of the boards which have been appointed by the Government should be reviewed in order to discover the extent of the losses incurred by their operations. Such deficits may result from inefficiency on the part of members, unfortunate selections of personnel by the Government, and the fact that members have had a pecuniary interest in the business that they were administering.

The House is indebted to the honorable member for Ballarat (Mr. Pollard) for disclosing the truth about the operations of the Apple and Pear Board. Had he not intervened in the debate, the bill would have been blessed by honorable members who represent apple and peargrowing districts, and £750,000 would have been provided to pay for somebody’s incompetence. Every effort which has been made by honorable members to extract from the Assistant Minister (Mr. Anthony) and the honorable member for Barker (Mr. Archie Cameron) information respecting the cause of the loss has failed.

Mr Frost:

– The honorable member did not object to the provision of £14,000,000 for the wheat industry; but when £750,000 is to be made available for apple and pear growers, he opposes the grant.

Mr ROSEVEAR:

– I object to the voting of such a considerable sum, with the blessing of honorable members who represent apple and pear growers, when obviously maladministration or gross blundering has occurred. Who is responsible for the loss ? The honorable member for Barker, who spoke vigorously in defence of the board’s administration, side-stepped my inquiries as to who was responsible for the appointment of the board. The Assistant Minister, when asked a similar question by the honorable member for East Sydney (Mr. Ward), stated that he would give the information when replying to the debate. At that stage honorable members will have no opportunity to verify his reply. On a crop of apples and pears valued at £3,000,000, the board incurred a loss of £750,000.

Mr Archie Cameron:

– The sum of £3,000,000 would be the advance, because the crop is worth considerably more than that amount.

Mr ROSEVEAR:

– All I know is that the Commonwealth advanced to growers the sum of £3,000,000, and now Parliament is asked to make up a deficiency of £750,000. Unless my arithmetic is sadly astray, the loss on the transaction is 25 per cent. The activities of the board have been extraordinary. As was admitted during the debate, members visited orchards before the crop was half grown. Disregarding the possibility of adverse seasonal conditions, and the ravages of blight, it assessed the value of the crops and paid the apple-growers for them. The honorable member for Barker excused this action by stating that the board was peculiarly suited to control the export trade. He confessed that its members were ignorant of conditions of the local trade. Strangely enough, however, the Government allowed the board to administer the sale of apples after the export trade had ceased. Obviously, some one blundered. I admire the loyalty of the honorable member for Barker to his former colleagues. He is endeavouring to shelter them and will not admit that they were responsible for this grievous error. The Government appointed the board to administer a scheme involving the outlay of £3,000,000, although it was aware that the members were familiar with only one side of the trade. When the export trade failed, common business prudence dictated that the Government should change the personnel of the board, or seek advice from authorities on local marketing conditions. It. failed to do so.

In addition, the recipients of the bounty from the Government never harvested the crop. In short, they were sneak-thieves. Although they obtained money under false pretences from the Government, they were not prosecuted. The House should not pass the bill unless the Government gives an assurance that those responsible for this colossal loss on the operations of the board will be dismissed.

Mr Archie Cameron:

– The honorable member will have to blame the weather principally for the loss.

Mr ROSEVEAR:

– The loss has been attributable to one of three causes - the weather, the Ministry, or the board. The honorable member for Barker has exonerated the Ministry, and excused the board on the ground that its members were ignorant of local marketing conditions. In order to conceal maladministration or lack of proper administration, he blames the weather. Fate was against the board and the Government, because it has incurred a loss of £750,000 on a £3,000,000 deal. The honorable member for Ballarat suggested that half the personnel of the board should be replaced by new members. I do not know whether he hoped that the adoption of such a proposal will halve the loss. In my opinion, most of the boards which are now controlling government marketing schemes should be overhauled in order to determine whether they are competent to administer the responsibilities that devolve upon them, and whether their members have any pecuniary interest in the success or failure of the board’s operations.

Mr MORGAN:
Reid

.The revelations made by the honorable member for Ballarat (Mr. Pollard) have solved the mystery of the shortage of supplies of apples and pears. The Assistant Minister (Mr. Anthony) should explain why no action has been taken to dismiss the persons responsible for this loss. Such a state of affairs provides the strongest possible reason for the introduction of a system of co-operative marketing and farming in the rural industries, if such a scheme were introduced, it would overcome many difficulties and would allow producers to control their own affairs. They would have local autonomy without government interference. Such a system would save huge losses, and producers would not have to come, like mendicants, to Parliament for financial assistance. The sooner the Government investigates the possibilities of my suggestion the better it .will be for the community.

Mr FALSTEIN:
Watson

. The honorable member for Dalley (Mr. Rosevear) calculated that the Apple and Pear Board’s operations resulted in a loss of 25 per cent. I desire to correct that figure. The honorable member for Barker (Mr. Archie Cameron) stated that the total amount advanced was £3,000,000. If a loss of £750,000 were sustained, the sale of the crop must have realized only £2,250,000. In those circumstances, the deficiency represents a loss of 33-J per cent.

Mr Archie Cameron:

– That is not correct. The honorable member should ascertain the facts before he draws conclusions.

Mr FALSTEIN:

– I have drawn the obvious inference from the honorable member’s statements. Such a loss is larger than that which would be consistent with the proper administration of the scheme. Undoubtedly, the board has been a failure, and should bear the responsibility for it.

Mr Calwell:

– The honorable member for Barker, being a former Minister for Commerce, should be held responsible.

Mr FALSTEIN:

– I do not believe that the fault lies with the honorable member for Barker. He did not inaugurate the scheme, and he was not responsible for the appointment of the board. But irrespective of the personnel and their interests, they should be called to account for this substantial deficit. I do not represent apple and pear growers. My electorate contains many people who have young families which would much appreciate a supply of apples and pears at reasonable prices, but it is impossible to purchase these fruits cheaply in Sydney. The honorable member for Barker is, apparently, disturbed by the disclosures made in this debate, because it necessarily brings a board appointed by the Government into disrepute.

Mr Frost:

– Sydney people have been supplied with a great deal of fruit at prices under the cost of production.

Mr FALSTEIN:

– Many people in Sydney cannot afford to purchase apples and pears at the prices charged for them. In addition, the public is called upon to suffer- the loss of £750,000 in the administration of an ill-conceived scheme.

Mr Bell:

– The people have been supplied with very cheap fruit.

Mr FALSTEIN:

– Despite the honorable member’s claim, the fact is that cheap fruit has not been obtainable in Sydney. This measure should not be passed, in the absence of a guarantee by the Minister that a proper inquiry will be held, in order to ascertain who was responsible for the maladministration of the scheme.

Mr ANTHONY:
Assistant Minister · Richmond · CP

in reply - In the discussion of this small bill, honorable members have availed themselves of an opportunity to criticize the operations of the Apple and Pear Board last season. Many of the comments that have been offered are not quite fair to the members of the board. The duty devolves upon honorable members to be careful about the remarks they make concerning the business reputations of men outside this Parliament, particularly before they are made aware of the facts of the case. Last year, it appeared that, unless the Government intervened, a huge surplus of apples and pears would be thrown on the Australian market. The usual production is from 10,000,000 to’ 11,000,000 cases a year, of which about one-half is exported. Owing to the shipping position, and the war conditions, it appeared that the half of the crop that is ordinarily exported would have to be disposed of in some other way. Experience shows that even the presence on the market of a surplus of 600,000 to 750,000 bushels is sufficient to cause a collapse, but a surplus of 2,000,000 or 3,000,000 cases would have catastrophic effects on all of those engaged in the industry. Fruit-growing is a most important industry. In Tasmania, it accounts for 25 per cent, of the income of the State. In Australia, 12,000 farmers are engaged in the production of apples and pears, and the livelihood of 100,000 persons depends on the industry. Therefore, I consider that the Government was justified in taking the steps considered necessary to protect the livelihood of those individuals. It decided that, instead of letting a huge surplus of fruit go on the market and cause a complete collapse of prices, the wiser plan would be to introduce a .scheme that would avoid that disaster.

Consequently, the Apple and Pear Board was appointed. It is easy for those who have little knowledge of the fruit industry to) criticize the work of men who have devoted their whole lives to the welfare of the industry. The members of the Board have forced their way to the front in their respective States as leaders in their industry. Some of them have had experience of the fruit export trade, and others have had much experience of co-operative selling. The position that arose in the apple and pear industry, when 5,000,000 cases of fruit was likely to have no market, was similar to the situation that would have to be faced in an industry in which one-half of the employees were suddenly thrown out of work owing to war conditions. Late in the season last year, the board was suddenly called upon to devise a plan to market a surplus of 4,000,000 or 5,000,000 cases of fruit. A task of that magnitude being suddenly imposed on the board, much experience had to be gained with the passage of time. I much regret the reflection that has been cast upon the business capacity of the members of the board. I investigated the matter as thoroughly as I could. I consulted the Commonwealth fruit experts and the representatives of the industry in Tasmania. I visited thatState, and, having conducted a fairly exhaustive inquiry, I found that the principal reason for the loss occasioned was the unparalleled weather conditions experienced last autumn, when much of the fruit was destroyed ; elsewhere the quality was much below normal. The crop was assessed in January, when the fact was apparent that, in addition to the heavy loss of fruit, a serious reduction of the size of apples and pears had occurred. The board made mistakes which any group of ordinary individuals might have made in similar circumstances. More serious than the reduction of the size of the fruit was the deterioration of its keeping qualities. The board had to place about 2,500,000 cases in cold storage, where it had to be kept for several months, and I am informed that when it was taken from cold storage it rapidly deteriorated. I agree that many improvements upon last year’s plan could be made; Payment under the new scheme will be made on delivery, and not on assessment. Therefore, payment will be received only for fruit that is mature and has been delivered. Payment without delivery can only be permitted on the authority of the Minister. Much fruit may have to be paid for without delivery, because we cannot possibly dispose of the surplus of 5,000,000 cases if the shipping position does not improve.

Another difficulty experienced was the lack of co-operation with the Government by some of the States, particularly New South Wales. The Government of that State withdrew all co-operation, and certain sections of the growers also placed great obstacles in the way of the board. I do not say that the growers did not have some justification for their protests, but most of the points in dispute have since been dealt with. I appeal to honorable members to be fair to men who are not here to defend themselves, and to give recognition to the extraordinary set of circumstances which would have made it most difficult for any board to avoid a loss. I urge the House to pass the bill.

Question resolved in the affirmative.

Bill read a second time, and reported from the committee without amendment or debate.

Report adopted.

Third Reading

Motion (by Mr. Anthony) proposed -

That the bill be now read a third time.

Mr POLLARD:
Ballarat

– The Assistant Minister (Mr. Anthony) has told us that one of the shortcomings from which the committee suffered was its lack of expert knowledge of the local marketing of fruit. Last season the committee was confronted with the task of disposing of fruit, particularly apples and pears, on the local market, and it is obvious that many mistakes were made. I suggest that the committee should be strengthened by the appointment of a member with an expert knowledge of local marketing conditions. We ask for the appointment of a skilled authority to stimulate the consumption of apples in Australia.

Question resolved in the affirmative.

Bill read a third time.

page 773

WIRE NETTING BOUNTY BILL 1940

Message recommending appropriation reported.

In committee (Consideration of

Governor-General’s message) :

Motion (by Mr. Harrison) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the Wire Netting Bounty Acts 1939.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Harrison and Mr. Fadden do prepare and bring in a bill to carry out the foregoing resolution.

Bill brought up by Mr. Harrison, and read a first time.

page 774

SESSIONAL COMMITTEES

Motions (by Mr. Fadden) - by leave - agreed to -

Standing Orders Committee

That the number of members appointed to serve on the Standing Orders Committee be increased to nine and that Mr. Speaker, the Prime Minister, the Chairman of Committees, the Leader of the Opposition, Mr. Beasley, Mr. Bell, Mr. Blackburn, Mr. Makin and Sir Earle Page be members of that Committee; three to form a quorum

Library Committee

That Mr. Speaker, Mr. Brennan, Mr. Coles, Mr. Hutchinson, Mr. Paterson, Mr. Riordan and Mr. Rosevear be members of the Library Committee; three to form a quorum.

House Committee

That Mr. Speaker, Mr. Abbott, Mr. Barnard, Mr. Francis, Mr. Mulcahy, Mr. Price and Mr. Watkins be members of the House Committee; three to form a quorum.

Printing Committee

That Mr. Beck, Mr. Conelan, Mr. Falstein, Mr. McCall, Mr. Morgan, Mr. Rankin and Mr. Ryan be members of the .Printing Committee; three to form a quorum, with power to confer with a similar committee of the Senate.

page 774

PARLIAMENTARY STANDING COMMITTEE ON PUBLIC WORKS

Motion (by Mr. Fadden) - by leave - agreed to -

That in accordance with the provisions of the Commonwealth Public Works Committee Act 1913-193G, the ‘ following members be appointed members of the Parliamentary Standing Committee on Public Works: - Mr. Badman, Mr. James, Mr. Jolly, Mr. Martens, Mr. Sheehan and Mr. Stacey.

Sitting suspended from 5.55 a.m. to 10.80 a.m.

page 774

POSTPONEMENT OF ORDER OF THE DAY

Motion (by Mr. Fadden) proposed - That Order of the Day No. 4 be postponed until after the consideration of Order of the Day No. 5.

That the House, at its rising, adjourn until 10.30 a.m. to-morrow.

I therefore submit that the order of business usual at the beginning of a sitting day should be followed.

Mr SPEAKER (Hon W M Nairn:

– The House did not adjourn yesterday. The sitting was simply suspended. In those circumstances this is a continuation of yesterday’s sitting.

Mr Blackburn:

– Should not yesterday’s resolution be rescinded?

Question resolved in the affirmative.

page 774

SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL 1940

Second Reading

Debate resumed from the 21st November, 1940 (vide page 97), on motion by Mr. Fadden -

That the bill be now read a second time.

Mr FORDE:
Capricornia

– In normal times the strongest opposition would be offered to any increase of the rate of sales tax, but, unfortunately, the Government is faced with the necessity to raise unprecedented revenues for carrying on the war. In the circumstances, the Labour party will criticize, but not oppose, the bill. We believe, however, that the war should be financed to a much greater extent by central bank credit issued by the Commonwealth Bank. The Treasurer (Mr. Fadden) anticipates obtaining additional revenue totalling £3,400,000 under the provisions of the bill. The measure also provides for goods of an annual sale value of £47,000,000 to be withdrawn from the exempt lists and, with one exception, made liable to a tax of 5 per cent. Goods of a sale value of approximately £21,000,000 per annum, now subject to the flat rate tax of per cent., are to be placed in the new category, and subjected to a tax of 15 per cent. The rate of tax on the remaining: categories is to be increased from 8^ per cent, to 10 per cent.

Sales tax was first imposed in Australia during the nadir of the depression at a time when revenue had fallen off to an unprecedented degree. The situation was so serious that the Government of the day had to take drastic steps to stem the tide of imports. A reduction of more than £10,000,000 in the yield from indirect taxation was experienced in 1930-31 compared with the yield from this source in 1928-29, and additional revenue had perforce to be obtained from other sources. It was in these circumstances that the Government of the day imposed the sales tax, which has been a prolific money-spinner. The following table shows the annual revenue obtained from the sales tax since its introduction : -

For the last ten years, the sales tax has thus returned an average revenue of approximately £8,548,000. In’ difficult times like the present, it is too much to expect any government to abandon this field of taxation.

When the sales tax was first imposed it caused a great deal of criticism. Some honorable members opposite, who now occupy prominent positions in the Government, were particularly severe in their denunciation of it. They declared that it was a most unfair tax, and that when their party secured control of the treasury bench it would take immediate steps to repeal it. So far from adopting that course, honorable gentlemen opposite have both widened the scope and increased the rate of the tax to such a degree that it is now a most serious imposition on the mass of the people.

Under the provisions of this bill, the general rate of tax is to be increased from 8^ per cent, to 10 per cent., and provision has also been made for certain goods, of an estimated annual sale value of £47,000,000, to be withdrawn from the schedule of exemptions and made liable to a tax of 5 per cent. The goods specified in the third schedule of the bill are to be subject to a tax of 15 per cent. From these sources, the Government expects to obtain an additional revenue of £3,400,000 during the remainder of the financial year. The annual sale value of the goods remaining in the taxable field will be approximately £251,000,000, and that of the goods still exempt approximately £314,000,000.

One of the objectionable features o£ the bill is that it provides that boots and shoes of a wholesale value in excess of 15s. a pair shall be liable to a tax of 10 per cent. In effect, this will mean that approximately half the boots and shoes at present being sold become taxable. The total estimated annual sale value of boots and shoes is £8,000,000. The Government acted unwisely in expanding the taxable field to include boots, shoes, and slippers, and the effect of this provision will be serious to a large section of the working people of Australia. The boot and shoe trade has made vigorous protests against this alteration of the law, and has urged the Government to reconsider its attitude. Typical of the telegrams despatched by the trade to the Government, and also to private members of Parliament, is the following message from the Melbourne boot and shoe manufacturers: -

Manufacturers engaged manufacturing boots and shoes are amazed at announcement in to-day’s press on sales tax on footwear. Quite illogical and must cause confusion and difficulty. It is urged that reconsideration be given if sales tax must be imposed on footwear and be uniform in its entirety.

The following is a fair sample of the telegrams received from Sydney manufacturers : -

Proposed sales tax on footwear will cause endless confusion in interpretation and application. We respectfully advise that it be reconsidered and made uniform.

I sincerely trust that the Government will comply with these requests, and review its attitude.

It will probably be contended by the Treasurer that an exemption from sales tax of boots and shoes having a wholesale value in excess of 15s. a pair will impose no hardship, but the tendency in recent years has been for working people to buy better quality footwear.

Mr Lazzarini:

– The people know that by buying a better quality of footwear they obtain better value for their money.

Mr FORDE:

– I agree with that view. The Government has made a serious error in imposing a sales tax on any footwear. The rate of sales tax to be levied on boots and shoes having a wholesale value in excess of 15s. a pair is 10 per cent. A similar rate of tax will he imposed on all slippers. This indicates that the Government is of the opinion that slippers are a luxury item, while ordinary footwear of a wholesale value not in excess of 15s. a pair is not so. I cannot understand how this decision was reached. It is common knowledge that during the depression years, and particularly in 1930-31, women wore slippers in the streets because they were less expensive than shoes. On the ground of economy a large percentage of the girls now working in factories also wear slippers at work. Consequently, the suggestion that slippers are a luxury item is ill-founded. The very reverse is the case. Any increase of the price of cheaper slippers must therefore impose an additional burden on persons on the lower income range. The Government’s proposal in respect of boots and shoes is full of anomalies. For example, sandshoes, which are exempt from sales tax, although they are worn chiefly for sport, are more of a luxury item than cheap slippers which are worn by very many people throughout the community.

I understand that a flat rate of sales tax of 21/2 per cent. on all footwear of a wholesale value of less than 15s. a pair, and of 10 per cent. on all footwear above that value, would be approved by the boot and shoe manufacturers, who contend that it would yield more revenue than is likely to be obtained from the Government’s proposal. I wish it to be understood, however, that I am not advocating this variation. I simply put it forward as the opinion of the trade. Other sections of the trade advocate a flat rate of 5 per cent. on all footwear in preference to the present proposal. The Opposition considers that all footwear should be exempt from sales tax.

The Government has also proposed that certain books at present exempt from sales tax should be brought into the taxable field. Since the outbreak of the war a general increase of 12 per cent. has occurred in the price of students’ textbooks. It is now proposed that such books shall be subject to a sales tax of 5 per cent. This impost will place a heavy strain on the already straitened financial resources of students. The position is regarded as extremely serious by all organizations interested in student activities. I direct particular attention to the following letter forwarded to the Leader of the Opposition (Mr. Curtin) under date the 29th November, 1940; by the Students Representative Council, University of Melbourne : -

Since the commencement of this war there has been a general increase of 12 per cent. and upwards in the price of student textbooks. The proposed new federal sales tax of 5 per cent. will, therefore, impose a very severe financial strain on students.

For this reason, a letter in the following terms has been sent to the Federal Treasurer : -

The Students’ Representative Council of the University of Melbourne views with grave concern the provision in the proposed federal budget which imposes on the sale of student text-books a tax of 5 per cent.

The council regards this as an unjustifiable burden on students, and desires to draw your attention to the position in England, where a tax of 12 per cent. was imposed on student text-books and later withdrawn in the face of stringent criticism.

Accordingly, the council strenuously urges that student text-books should be exempted from the operation of the proposed tax.

I hope that the Government will review the proposed tax on books because it cannot be justified on any reasonable grounds.

The Government also proposes to increase the imposition on all chocolates and confectionery, which are the only foodstuffs listed for taxation at the rate of 15 per cent.

Mr Ward:

– A tax on children.

Mr FORDE:

– That is so. Such items as jewellery, pleasure yachts, toilet preparations, sporting equipment, washing machines, refrigerators and accounting machines are placed in the same category as chocolates and confectionery. The manufacture of confectionery is a very important Australian industry, with a wholesale turnover of over £6,000,000 per annum, and it employs more than 8,000 workers directly and many thousands indirectly. Of the £3,400,000 additional sales tax proposed to be collected from November, 1940, to January, 1941, the confectionery industry is to be asked to contribute 8 per cent., or £270,000. This will unduly penalize an important industry and those primary producers, wholesalers and retailers who are dependent upon it for their livelihood. “While chocolates and confectionery are to be taxed so severely, other comparable products, such as ice cream and biscuits, are included in a lower category; this is unfair. I do not ask that the rate of tax on ice cream and biscuits be increased ; but I ask that chocolates and confectionery be placed in the same category as those items. The value of primary products bought for use in the industry makes a big contribution to primary producers and assists them to find a local market for their products, which is a matter of great importance at the present time. The industry uses approximately £1,000,000 worth of sugar and over £165,000 worth of milk each year. Its annual consumption of glucose, or maize syrup, requires over 560,000 bushels of maize, worth £275,000. The value of gelatine used is £50,000. Peanuts, almonds, dried fruits, flour starches, fruit pulp, honey and butter are also bought in large quantities. Unless the tax be reduced to 10 per cent., considerable unemployment will occur in this industry, as well as in the primary industries which provide its raw materials and among the distributors of the finished products. The industry employs 3,000 workers, and at least 50,000 shops are engaged in the selling of chocolates and confectionery. Those persons who are earning a living from the industry will be penalized very heavily if this impost be brought into effect. Chocolates and confectionery cannot be regarded as purely luxury articles, as the Government would have us believe. Nothing is more nourishing than chocolate, which the masses of the people use extensively as a supplementary diet for their children. The Government has not justified the tremendous increase of the tax on these articles.

Another item upon which a very substantial increase of tax is proposed is made-to-order clothing. The master tailors associations of the various States have made strong representations to the Government on this matter, and I hope that the Minster will be able to grant at least some of their requests. The master tailors of three of the eastern States recently agreed unanimously to motions deploring the proposed increase of the rate of sales tax on made-to-order clothes, which represents the enormous proportion of 60 per cent, of the previous tax payable. This means that a tailor with a turnover of £500 a month, who formerly paid tax of £20 6s. 8d. on that volume of business, will now be expected to pay £33 6s. 8d. The result will be that an increasing number of tailors will have to go out of business, and the public will have to turn more and more to the readymade section of the industry and purchase clothes at a cheaper rate. Consequently the Government will collect less tax from made-to-order clothes whilst undue hardship will be imposed on that section of the tailoring trade, which employs a very large number of skilled tradesmen. Therefore I ask the Minister to reconsider his decision in regard to this item.

I refer now to the proposed tax on wheatmeal bread. The baking trade throughout Australia was astounded to learn that certain varieties of bread were to be supercharged by the sales tax. Whilst it appears that wheatmeal sold as wheatmeal bread will have to bear the tax, ordinary brown bread - which is wheatmeal bread - will not be taxed if it be solid as brown bread. I ask that all bread, whether it be household bread or fancy bread, be exempted from the proposed increase. The baking trade has been hard hit already by the number of enlistments of its employees, and the imposition of this proposed tax would probably cause an increase of the price of bread, thus throwing an additional burden on the general community.

Another item about which I have cause for complaint is the proposed tax on dental supplies. Members of the dental trade are gravely concerned at the Government’s decision to charge sales tax on dental goods on the value of sales when they leave the retail traders. I understand that these materials represent about onethird of the trade’s turnover. This may be a matter for administration or an amendment of the law. The problem involves the interpretation of two definitions in the act. The first is the definition of “manufacturer”, and the second is the definition of “ sale of goods by wholesale “. The dental traders ask that the sales tax be imposed on the goods at their source and that the transactions he classified as retail sales. Representations have been made to the Government on this matter and I understand that it is giving consideration to them. I hope that it will be able to remove the objections raised by the trade.

The Minister has promised that he will do this in an administrative way.

The proposed sales tax on medicines is another injustice. Whereas veterinary medicines are to be exempt from tax, medicines for human use are to be taxed severely. It is not logical that a person who buys medicine for a pet dog or a race-horse should be exempt from tax, whilst people who buy such medicines as whooping-cough vaccine, vitamin preparations, and the drugs used in dispensing physicians’ prescriptions are taxed to the extent of at least 5 per cent, on sales value. It would appear that the Government considers the health of dogs and horses to be more important than the health of our children. Incidentally, persons using veterinary preparations are frequently in a position to buy them at wholesale rates, whereas the people who buy medicines for human consumption have to buy them at retail prices. Most of the medicines purchased in Australia are used by working-class people; surely medicines for the sick are essential commodities. That tax cannot be justified, and I ask the Minister to have it removed.

There are many other items to which I could refer, but they are too numerous for me to be able to discuss all of them now. At a later stage I may be able to deal with them. If conditions were normal, I should not hesitate to use every privilege that I have as a member of this House in order to fight these proposed new imposts. Even in view of the present circumstances, I ask the Minister to give sympathetic consideration to the requests for relief that have been made by various sections of the people. The Government would be well advised to wipe out the proposed impost on boots, shoes, and slippers, because these are necessary articles used by the masses of the people.

Mr Paterson:

– The proposed tax will affect only the most expensive of these goods.

Mr FORDE:

– It will apply to all shoes over a wholesale price of 15s. a pair.

Mr Paterson:

– Which means a price of about 22s. 6d. a pair retail.

Mr FORDE:

– But surely the Government does not want to force the masses of the people to buy cheap, shoddy boots and shoes, that will fall to pieces very quickly. The Government seems to have decided that inferior articles are good enough for the working classes, who will, therefore, have to join the herd of people who buy the cheapest and most shoddy articles of clothing, whilst the better articles are reserved for the use of the privileged classes. Since standards of living in Australia have improved, the average working man and woman have been purchasing good quality boots and shoes which, although they are more expensive initially, give better value for money in the long run than the cheaper articles.

Mr Lazzarini:

– That has also improved the technique of trade.

Mr FORDE:

– That is true. The Government should remove this tax. Even under war-time conditions it is not justified in proposing a tax on books. I ask the Minister to give an assurance that this item will be reviewed. The proposed tax on medicines is equally unjustifiable. If the Government sees fit to exempt from sales taxation medicines used by veterinary surgeons, it can have no valid reason for taxing medicines used by the people. I hope that the Minister will reconsider a number of these items and grant some relief from this tax. I shall await his remarks on the subject with interest.

Mr BECK:
Denison

.- I listened with interest to the remarks of the Deputy Leader of the Opposition (Mr. Forde), and I agreed largely with them. I, too, urge the Government to reconsider the sales tax on footwear. The schedule provides for sales tax at the rate of 10 per cent, on boots and shoes, the wholesale price of which is in excess of 15s., and 10 per cent, on all slippers. The statistician’s figures in relation to the Australian boot industry show that the total production of boots and shoes, not including slippers, for the year ended the 30th June, 1939, was about 14,000,000 pairs, valued at approximately £7,000,000. In order to arrive at the wholesale selling price, 15 per cent, is added to cover selling and distributing costs, thereby making the total value nearly £8,000,000. The average cost of a pair of shoes made in Australia is lis. 4£d. and of slippers 2s. 9d., thus bringing the total wholesale value of the boots, shoes and slippers manufactured in Australia to a little over £9,000,000. Some years ago footwear was subjected to sales tax, ‘but for some reason it was removed later. I am not prepared to go so far as the Deputy Leader of the Opposition suggested, and urge that sales tax be removed altogether from footwear, but I suggest that sales tax at a flat rate of 5 per cent, be imposed on all footwear. That rate would not greatly affect the workers, because the amount of tax on a pair of shoes of medium price would be small.

Mr Beasley:

– The honorable member should not lose sight of the fact that this tax will be added to an already heavy burden. He seems to regard it as the only one.

Mr BECK:

– I have not overlooked that fact, but I realize that revenue must be obtained. Sales tax at a flat rate of 5 per cent, would not impose a heavy burden on the lower-paid section of the community, whilst the more costly boots would still be bought by people who could afford them. A flat rate of 5 per cent, on all boots and shoes would yield about £452,000. At present, rubber footwear is not included in the schedule; but if the flat rate of 5 per cent, applied to such goods also, an additional £45,000 would be obtained. Unless the tax be extended to rubber shoes, people will wear more of this class of footwear thereby throwing many employees in the boot-making industry out of work. No honorable member desires that to happen. It has been suggested that all children’s footwear he entirely exempt from sales tax. That would bring the wholesale selling value of boots, shoes and slippers, excluding children’s footwear, to about £8,000,000. Sales tax at 5 per cent, on that amount would yield about £406,000. If rubber footwear were added, another £18,000 would be received from the tax, bringing to about £425,000 the return from sales tax at a flat rate of 5 per cent, on all footwear excluding that worn by children. On the present basis of sales tax, the estimated yield is about £375,000-10 per cent, on the wholesale value of slippers yielding £111,000, and 10 per cent, on boots and shoes costing over 15s. bringing in about £264,000. It will be seen therefore that sales tax at a flat rate of 5 per cent, would yield more revenue, and at the same time cause less trouble in the trade, than will result from the proposals of the Government. I understand that from about 65 per cent, to 70 per cent, of the footwear produced in Australia is sold at about 15s. a pair. That tends to encourage evasion of the tax; already there have been evasions. I know of one instance in which a Melbourne dealer invoiced the shoes separately from the laces and the box containing them. The Government’s proposals will react against the employees in the industry, and will so encourage unscrupulous methods that the financial result to the Commonwealth will be less than the Treasurer expects. Until about 25 years ago it was practically impossible to buy a really good pair of shoes of Australian manufacture. All highclass footwear was then imported. The position is now entirely different; Australian workmanship in this industry has reached such a high standard that there is no necessity to import any footwear whatsoever. I do not want these skilled workers to be forced to turn out shoes of poor quality like sausages from a machine. Honorable members know that children’s footwear must be of good quality, or prove uneconomic. It is priced largely according to size; shoes sizes 7 to 9 are sold at a certain price, and larger shoes, sizes 10 to 13, at a slightly higher price. But when a child needs a shoe size 1, sales tax will become payable because the price will bring the article into the taxable field. There should be no sales tax on children’s shoes, and I ask the Minister to give further consideration to this aspect of the question. I understand that the Boot Employees Federation is in favour of sales tax at the flat rate of five per cent, on all footwear rather than the proposals contained in this bill. I think that I am safe in saying that both employers and employees in this industry are of that opinion.

Mr LAZZARINI:
Werriwa

– I have consistently opposed the sales tax and I shall oppose this tax. I sometimes wonder if this is a Christian country, when I find that the woman who has done her duty in rearing children has to pay sales tax on the medicine bought for her kiddies when they become ill, whereas another woman who has failed fo do her duty, and prefers to nurse a poodle-pup, can get all of the medicine that she requires for her pet dog and not pay any sales tax on it. That such a state of affairs exists is a reflection on our civilization and a disgrace to this Parliament. Can the Minister justify the imposition of sales tax on the surgical footwear required by a child who has suffered from infantile paralysis, whilst medicines and requisites used in the treatment of racehorses, dogs, pigs and other animals are exempt from the tax? Such legislation should be condemned in any country which calls itself Christian. I am not concerned whether the sales tax represents a farthing, a halfpenny, a shilling, or a pound; I object to it on principle. This schedule shows the world that, in the opinion of the Government, an animal is of more value than a human being. Were the truth about this tax known to the people, they would turn the Government out of office. No decent person should stand for such a state of affairs; I certainly will not do so. Whenever a budget is introduced there is evidence that this cowardly method of imposing indirect taxation has been adopted. I regard indirect taxation as a cowardly means of extracting money from the people, because the Government does not come out into the open to tax them, but extracts money from them without their knowledge. So long as these methods are adopted, the Government’s difficulties will continue. We must change our methods and hurl from office those who will not adopt other means, and tap other sources, in order to raise money for the nation’s needs. What will happen next year? Will further demands be made upon our already over-taxed economic resources? The whole system is impracticable, and I offer the strongest objection to the Government’s proposals. In particular, I am opposed to the imposition of the sales tax on books, and upon confectionery which is consumed by the masses. However, I do not wish to deal specifically with any phase of the sales tax legislation, because I am opposed to the whole system. My views on this ……. ^ …ti. …/.. subject are well known to every honorable member. This measure is a disgrace to the Government, and a gross reflection on every honorable member in this Parliament, particularly when we find that the tax is not levied on medicine for, say, dogs, while it is imposed on medicines used by Australian citizens, including children.

Mr FRANCIS:
Moreton

– The introduction of this measure follows upon the approval by this House of the Government’s taxation proposals foreshadowed in the budget. The important point that honorable members seem to have overlooked, is that recently we have been discussing a wartime budget, framed to secure the greatest possible national effort in the prosecution of the war. When we realize that in 1930-31 Australia’s defence vote was £3,000,000, in 1939-40 it was £56,000,000, and that the estimated defence expenditure for this financial year is £186,000,000, we can appreciate the special efforts which must be made to secure revenue.

I remind the honorable member foi Werriwa (Mr. Lazzarini), who said that sales tax is a cowardly impost, that he supported the Scullin Government which was the first to introduce what he terms a cowardly tax. The tax was first imposed at a time of financial stringency by the then Treasurer, Mr. Theodore, so that all those condemnatory things which he has said about this Government are applicable with equal force to the Labour party. When economic conditions improved after the last depression, governments of the same political complexion as the Government now in office, reduced the sales tax from time to time, and exempted numerous items. In fact, the number of exemptions granted on charitable, educational and other grounds, and in order to assist the development of industries, was amazing. For instance, all foodstuffs, raw materials for our secondary industries, and all building materials were exempted. Unfortunately, the Government has been forced to resort to this method of raising revenue because of circumstances which now prevail. The fact that the war necessitates unprecedented demands upon the people of this country seems to have been forgotten by honorable members opposite.

My main purpose in speaking on this measure is to ask the Government to reconsider some of the classifications set out in the schedule. The administration of the sales tax legislation leaves much to he desired. 1, and no doubt many other honorable members, have received communications complaining of the new classifications contained in this measure. On the items in one group, a tax of 5 per cent, is levied, on another 10 per cent., and on a third 15 per cent. I wish to make a plea on behalf of those conducting small businesses in the country who, in many cases, are experiencing difficulty owing to the drought, and are carrying on only with the help of members of the family who are working from early morning until late at night. These people will be further burdened by the division of the sales into the three groups as is provided in this measure. In big businesses, the task will be colossal, and the bigger the business the greater will be the difficulty. I urge the Treasurer (Mr. Fadden) to reconsider this legislation with a view to simplifying the system so that business people may be able to avoid the heavy cost of meeting the requirements of the Taxation Department. Unfortunately, it is essential that this tax be imposed in order that revenue may be raised, but the Government, in its effort to prosecute this country’s war effort, should bring its legislation before Parliament in such a form that the absolute minimum of disorganization is caused. Many items in this schedule appear to be wrongly classified. I shall not occupy the time of honorable members by going through all of them in detail, but representations have been made to me from many quarters concerning classifications which I am. sure the Government will have great difficulty in justifying. I should like to know why some items are placed in certain classifications, while similar goods are in others. I cite as an example chocolate and confectionery, which is in the 15 per cent, group, while other foodstuffs are in the 5 per cent, and 10 per cent, groups. What is the explanation of the differentiation? 1 am interested in the confectionery industry because, in the manufacture of sweets, large quantities of primary products, such as sugar, milk, and glucose, are used. Chocolate and other confectionery are included in the same division as jewellery, pleasure yachts, toilet preparations, sporting equipment, washing machines, refrigerators, accounting machines, and other luxuries. Surely there is no justification for such grouping. The annual wholesale value of confectionery produced in Australia is estimated at £6,000,000, while the industry employs, directly and indirectly, more than 8,000 persons. Of a total of £3,400,000 estimated to be collected up to June, 1941, by means of increased sales tax, the confectionery industry will contribute 8 per cent., or £270,000. That is penalizing unnecessarily the primary producer as well as children whose only luxury is a lcl., 2d., or 3d. stick of confectionery. The State which I assist to represent in this Parliament produces all the sugar consumed in Australia, and, in addition, exports large quantites to other countries. The confectionery industry uses approximately £1,000,000 worth of sugar annually, hut this additional impost on confectionery will result in a substantial decrease of the quantity of sugar consumed. A similar adverse effect will be felt in the dairying industry, because milk is an important constituent of confectionery. More than 4,000,000 gallons of milk, valued at £165,000, are used annually in the manufacture of chocolate and other confectionery. Glucose, a product of maize, which in Queensland is grown mainly on Atherton Tableland and in the southern districts, is also used extensively, the annual consumption of which represents more than 560,000 bushels of maize valued at £275,000. Other products used in the industry include gelatine, valued at £50,000 annually, peanuts, almonds, dried fruit, flour, starches, fruit pulp, honey, and butter.

I hope that the Treasurer will realize that, by classifying confectionery in the 15 per cent, group, a great injustice is being done to the confectionery industry and to the primary producers. I appeal for a reconsideration of this portion of the schedule. It is only one example of many items which are wrongly classified, and I trust that the Treasurer will rectify the anomaly. I have received representations on many other items, but I shall content myself by citing only one. If the Treasurer will act on the lines suggested, I shall bring other cases under his notice when the bill is in committee.

Mr BEASLEY:
Leader of the Australian Labour party - nonCommunist · West Sydney

– To a certain degree all forms of taxation are irksome. During the years in which the sales tax has been in operation it has been criticized somewhat severely. In the past the tax has been ill balanced, and the Government has failed to analyse satisfactorily its incidence. I can safely say that the Government has not been able to examine in detail the items of this schedule, and therefore the classification of items has been left to departmental officers whose duty it is to frame proposals and generally to advise the Government. But owing to the far-reaching ramifications of the sales tax, it would have been better had the various items been classified in Parliament. Many honorable members are trained in the various sections of commerce and industry, and, therefore, have a more extensive knowledge of certain phases of industry affected by this form of taxation than have those who advise the Government. For instance, the honormember for Denison (Mr. Beck) has had a long experience in the boot trade, which is of advantage to him when that industry is under consideration, but his views are not known to the Government until measures affecting that industry are brought before Parliament. It would be unwise for the Government to proceed with this legislation until its effects have been thoroughly explored. We are drifting towards a bureaucratic form of government rather than adhering to the democratic system which provides for decisions by Parliament. We should be able to exercise our rights in this matter and determine how this, or any other tax, should be applied. Honorable members should be given a full opportunity to express their views before these proposals are finally drafted, and then such views could be borne in mind when the legislation is being framed. The Government should not pledge itself to the acceptance of all that a section of the Public Service cares to submit, without first having had the benefit of parliamentary discussion. This is an appropriate occasion to take action along those lines, particularly in respect of this form of taxation. We ought to have in our possession a memorandum setting out the items previously exempt and now brought within the field of the tax. How is any honorable member to know what interests have been protected, or what individuals or sections, by processes unknown to us, have been able to secure concessions? A complete memorandum should be prepared giving reasons for the decision of the Ministry to include different items in particular groups. According to opinions already expressed in this House, many of the items are not acceptable. After full discussion, the Ministry should permit either a committee of this House, or its own advisers, to examine the observations of honorable members and then present to Parliament reasons for the different classifications. We should then know exactly what we were doing, and instead of blindly accepting the schedules would have grounds upon which to justify any action that we took if it were challenged in the electorates. The task of bringing down the budget was given to the present Treasurer (Mr. Fadden) only a fortnight before the document was ready for final consideration, consequently it was impossible for him to make a proper examination of all that it contains in the light of what I have said. No honorable member should be obliged, willy-nilly, to accept the opinion of some officer of the Taxation Department with respect to the application of any tax. We have to decide whether this Parliament shall govern, or leave the task to the advisers of the Ministry.

Mr Holloway:

– It is not the fault of the advisers.

Mr BEASLEY:

– They could lay the basis upon which discussion should take place; in other words, determine the agenda. I have no desire to criticize unfairly or unjustly the advisers of the Ministry. This Parliament should function according to the principles of democratic government. We represent a crosssection of the community, and each of us has a particular background and experience. Out of the pooling of our thoughts and experiences would emerge what was best in the interests of the people as a whole. It is obvious from what has already been said that honorable members feel that they cannot justify in their electorates the application of this tax in certain directions. Opportunities should be furnished for proof to be obtained as to whether they are right or wrong. Acting in a deliberative capacity, the Parliament should be enabled to pass judgment on the proposed application of the tax. Sales tax has never been popular. I was a member of this House when it was first introduced. It was claimed at the time that the financial position of the country was such that new sources of revenue must be explored in order to balance the budget. It is interesting to note that those who opposed the proposal of the Labour Government of the day, and declared their determination to remove this tax at the earliest possible date, have since increased both the rate and the number of items involved. It has now become a permanent feature of Australian taxation. As happens with most taxes, successive Treasurers have failed to relax their grip on such a profitable means of obtaining revenue. The items in the schedules reveal glaring anomalies. For example, tax is to be imposed on drugs and medicines, including patent and proprietary medicines, used in the prevention, cure or treatment of sickness or disease in human beings, and in the compounding or preparation of such drugs or medicines, hut not including drugs and preparations put up and sold for the purposes of photography. It is difficult, almost impossible, to justify on humanitarian grounds, the taxing of drugs and medicines used by human beings, and the exclusion of those used in photography. A memorandum such as I have suggested might enable us to understand the reasons for such apparent anomalies; otherwise no one can justify them. I cannot see how any government could justify the imposition of the tax on invalid chairs and other appliances needed by invalids. I am drawn irresistibly to the conclusion that the matter has not been adequately examined. A pension is paid to invalids in order to improve their lot. These appliances are vitally necessary to them. If housed in thickly congested areas, they would not be able to move around and enjoy the benefits of sunlight and fresh air unless some such means were available to them. It seems to me that there has been a good deal of blind stabbing in the preparation of the schedules. If such be the case, we should not be obliged to accept them.. A further anomaly is the imposition of a tax of 10 per cent, on tooth paste and of 15 per cent, on toothbrushes. What is the reason for that differentiation? Oils and lotions for children are to be taxed at the rate of 15 per cent. Why should they be regarded as a luxury? The totalitarian countries are to-day making the raising of families the basic principle of their existence. If our population be not increased, this nation will not survive. How the Government or its advisers can suggest that these goods are in the luxury class, is beyond my comprehension. The Ministry should have the schedules reconsidered by its advisers on the basis of the collective representations of honorable members.

Mr Archie Cameron:

– The Ministry would not then have a policy.

Mr BEASLEY:

– At the moment the Ministry is not in a position to have a policy entirely of its own making. The people have determined that any policy followed must pay due regard to the wishes of all parties in this Parliament. The honorable member for Barker (Mr. Archie Cameron) would know if he had been here that the opposition to !bea items is widespread. This hill was brought down on the advice of the Government’s taxation experts. It represents their point of view, but no one could claim that they understand every aspect of this subject; they could not be expected to do so. They were told to devise means whereby £23,000,000 could be raised from this form of taxation. This bill is the result. It remains .for Parliament to dissect it, to ease the pressure where it needs to be eased, and to increase it where an increase seems justified. If the Ministry would approach the problem in that way, it would achieve a much better balanced tax. Some industries are willing to bear extra sales tax without passing it on. The confection :ry industry is prepared to carry extra sales tax, but not to the degree proposed. Generally, however, when the sales tax is passed on, the public has to pay more than the rate of tax, because of the fractions that occur when sales tax is added to prices. In order to achieve a balanced application of the tax, the Ministry should consider the views of Parliament and, having done so, send the Ministers back to its advisers or, as was done in respect of the proposed war-time company tax, refer it to a committee of honorable members. If that were done, there would be a better atmosphere. Honorable members generally would be in a better position to defend the imposition if they shared the responsibility for it.

Mr HOLLOWAY:
Melbourne. Ports

– I appeal to the Ministry to review three outstanding anomalies and injustices. I refer first to the tax on drugs and medicines which will disorganize friendly society dispensaries from which the people in the poorer industrial suburbs get most of their medical requirements. Those people cannot afford to buy expensive proprietary medicines and imported drugs. On other occasions, the last thing in our minds has been to tax medical needs, and I counsel the Government to exempt from this tax the more common drugs which the people must have; they can do without some of the more costly drugs. I am not concerned about the tax on perfumes and chemicals used in beauty parlours, but in no circumstances should some drugs be taxed. My second objection is to the tax on books and literature, especially educational text-books. It is highly undesirable to tax people’3 minds and education. Some people’s only recreation is the enjoyment of books. Perhaps, later, we shall be forced to levy a tax on literature, but I do not think that the need has yet arisen. When that time does come, books of an educational character should be the last to be taxed. Thirdly, I object to the way in which it is proposed to tax footwear. On a former occasion, we had a long debate on that subject, and we wore almost unanimous that footwear should not be taxed, because 99 per cent, of it is a necessity. Only 1 per cent, of the range of footwear in Australia could be described ns a luxury. I should like to provide exemption of footwear, but, since that appears to be impossible, the Ministry should give consideration to the imposition of a flat rate tax on a lower scale over the whole range of footwear. As a Labour man, it is difficult for me to support even that. The Australian boot industry 30 years ago, under the influence of excessive competition, overcapitalization, and “ sweat “ work, was regarded as a shoddy industry. The result of all those factors was that footwear became too cheap in comparison with other commodities. The industry became over-expanded during the last war, when overseas suppliers were cut off. Many men entered the industry and became rich almost overnight, but it did not do them much good, because they collapsed afterwards. The boom left a large number of plants and skilled workers capable of producing footwear at prices below comparable prices in other countries.

Mr Fadden:

– A flat rate of tax would not get over that.

Mr HOLLOWAY:

– I suggest a flat rate spread over the whole range and the elimination of the 15s. exemption. It would be better for the industry generally if the rate of tax were reduced and all classes of footwear were brought within its range. The Government would get more money that way. By exempting all footwear costing less than 15s. a pair, based on the wholesale value, the Government will be responsible for the reintroduction of shoddy work and increase already excessive competition. The men who will take advantage of the exemption are Poles and other foreigners, who disregard award rates and carry on their trade in what are popularly known as “ rat-holes “ in the outer suburbs of Sydney and Melbourne. Already, those people are selling boots and shoes, which formerly cost 15s. 9d. or so wholesale, at 14s. 10-id. No advantage will accrue to anyone from that. The net result will be footwear badly constructed from offal instead of sole leather, which will be dearer in the long run to the wearers. Employees will be “ sweated “, and the whole industry will be disorganized by stop-work meetings at factories where the pace is unusually hot. That would be avoided if the tax were spread over the whole range and the result would be to the benefit of all interests - employers, employees, and the public. Under present conditions the Australian footwear industry is highly organized, and its product is cheaper than in most other countries. In Europe, the factories work long hours. I have seen the employees start work before breakfast, knock off for breakfast, and go right through the day until late in the evening. In spite of their long hours, they do not do one-half of the work that the Australian worker does in his eight-hour day. The Australian works fast, and has modern machinery. I do not wish to see anything done that would bring about chaos in the industry.

Mr McCALL:
Martin

– I have always found the Treasurer (Mr. Fadden) willing to listen sympathetically to a reasonable argument, and I am sure that he must be impressed by some of the speeches that have been made, because evidence has been produced that this bill contains some remarkable anomalies. We all hope that before we go into committee he will give consideration to those anomalies and give some relief. I desire to refer to what I believe to be the most outstanding anomaly of all, that is, the inclusion of confectionery in the third division. I cannot understand how departmental officials could possibly have placed confectionery in the same category as speedboats, canoes, surf-boards, games, puzzles and party novelties. Some may question whether confectionery should be regarded as a straight-out food, but I do not think there can be any doubt that it is. On this subject, Lord Woolton, Minister for Food in Great Britain, has been reported in the press as follows : -

At a press conference last week, Lord Woolton, Minister of Pood, was questioned as to whether a concentrated iron ration for the nation was in contemplation, a ration which it would be compulsory for people to cany about with them for use in an emergency, such as an unduly prolonged stay in a shelter cut off from the usual means of sustenance. Lord Woolton replied that such a contingency had not been overlooked and that Professor Drummond and his department in the Ministry had the matter in hand. What U proposed for the purpose is a special “ reinforced “ kind of chocolate.

It is clear, therefore, that chocolate, which is one of the principal confec tionery items, is regarded as having a high food value. The Australian confectionery industry uses £1,000,000 worth of sugar each year, 4,000,000 gallons of milk, 560,000 bushels of maize, and very large quantities of glucose. How a product of such obvious food value can be placed in the same category as fireworks and puzzle games passes my understanding. I maintain that this extra impost should not have been placed upon the industry. Those associated with it know that they must contribute their just proportion to the war effort, and they would not object to a tax of 10 per cent., as on other foodstuffs. The honorable member for Werriwa (Mr. Lazzarini) mentioned that there is no tax on dog medicines. He might have gone farther and pointed out that there is no tax on dog biscuits manufactured in Australia. The Government should recast the bill. As the honorable member for West Sydney (Mr. Beasley) pointed out, there has obviously been a good deal of blind stabbing in fixing the rates. We understand that the budget was compiled hurriedly, and that it is necessary to raise a very large amount of revenue. We have every sympathy with the Treasurer and his officials, but we should seek to preserve equity; otherwise, we shall produce distress and unemployment.

Mr BLACKBURN:
Bourke

– I regard the sales tax as a detestable form of taxation which takes us back to the days described 100 years ago by Sydney Smith, when he said that the Englishman lived a taxed life, paying taxes on every article which he used from the cradle to the grave. However, all the parties have agreed to accept the sales tax as a means of raising revenue. I regret that, but it is their decision, and I do not propose to say more on the principle of the tax than I said during the budget debate.

The honorable member for Denison (Mr. Beck) and the honorable member for Melbourne Ports (Mr. Holloway) referred to the effect of the sales tax on the boot industry. Complaints against the proposed tax have been made by the boot manufacturers, the boot operatives, and the consumers. It is true that the tax applies only to boots, the wholesale price of which is over 15s. Thus, boots produced at 15s. Id. a pair pay tax, while those produced at a wholesale price of 14s. lid. a pair pay no tax. In this trade there are some persons who are both manufacturers and retail sellers of footwear. The proprietor of Ezywalkin Proprietary Limited is one of them. He operates under several company names, and manufactures several different products, which he sells to the public through his retail shops. There is nothing to prevent him - though he might be too scrupulous to do so - from evading the sales tax by writing down to below 15s. a pair the price at which he invoices his products to himself in his various incarnations. It may be that manufacturers will be forced to combine in order to establish joint retail stores so that they may avoid taxation in this way. There is no doubt that the sales tax will bear very heavily upon the boot industry. I was chairman of a Select Committee of the Victorian Legislative Assembly which investigated the effect upon the history of the practice of leasing machinery to manufacturers. I came to the conclusion that there was practically unrestricted competition in the industry. Some years ago, the American trade commissioners reported that it was useless to expect American footwear to compete on the Australian market with the local product, even if there were no protective tariff, because costs of production in Australia were as low as anywhere in the world. That is partly because it is one of the oldest established industries in Australia, the first protective tariff having been provided in Victoria in 1860, and partly because, during the last war, a great many people were brought into the industry. There was a big demand for soldiers’ boots, and men such as painters, etc., who were thrown out of employment in other industries, came into the boot-manufacturing industry. Australia was able to find markets in South Africa, Indonesia, a id other places, and some of those markets were subsequently lost. South Africa, for instance, started manufacturing footwear for itself. Thus the trade in Australia was loaded up with a great many more men than it could properly carry, and it has never recovered from that position. For many years the industry has been in a very bad way in Melbourne, and probably in Sydney, also. Factories have been working part-time, and few employees are earning full wages. The sales tax will not affect the production of cheap footwear, and may not seriously affect the volume of employment, for the time being, because of the demand for soldiers’ boots, but it will probably destroy altogether the manufacture of betterclass footwear, and that trade once destroyed will never be revived. One of the reasons why such highly competitive conditions obtain in the boot manufacturing industry is that the boot machinery manufacturing firms do not sell the machinery straight out to boot manufacturers, but lease it to them. The machinery never becomes their property, so that should a manufacturer become bankrupt, the suppliers of the macLinery can reclaim it, and come on the lessee for payments which would otherwise never be required of him. Thus it is possible even for working men with little or no capital, to enter the boot manufacturing industry, and prices are kept down to the lowest level. It is absurd to say that there is any over-charging in the boot trade, and the imposition of the proposed sales tax would be most unfair to consumers and manufacturers alike.

Mr Beck:

– “Would the honorable member agree to a flat rate of 5 per cent, on all footwear?

Mr BLACKBURN:

– I agree that the trade and the operatives would prefer that to the Government’s proposal.

I come now to what I regard as the most unpardonable blemish on this system of taxation, namely, the tax on books. Previously, there were both sales tax and primage duty on books, but they were subsequently removed. “When I was a trustee of the Public Library in Melbourne, I joined in the making of a protest to the Government against these impositions. That tax was removed, but the Government now proposes to reimpose it, almost immediately after the British Government has made it quite clear that it will not impose a Purchase Tax upon books. In August last, the Chancellor of the Exchequer yielded to public protests, and promised that he would withdraw the British Government’s proposal to apply a 12 per cent, purchase tax on books. Those protests were very vigorous. The people of England were reminded that a tax upon books is a tax upon knowledge, as was the tax on newspapers which was abolished in England between 1850 and 1870. In the course of those public protests, the following letter from the Minister for Information, Mr. Duff Cooper, to Mr. .Segrave, the editor of the Bookseller, was quoted : -

Dear Mr. Segrave, 1 am very glad to know that the list of books to be published here during the summer and autumn is, as usual, going out this year to carry its reminder that the freedom to write and to read is part of the cause for which the British Empire and Commonwealth fights. All who prize the great heritage of civilized communication will welcome the Bookseller’s export number, and I wish every success to your admirable enterprise in thus stimulating the distribution of British books.

Yours sincerely,

DUFF COOPER

Books are one of 4he few articles which we import to-day. They represent one of the most defensible forms of imports, because we in this comparatively undeveloped country, with much smaller numbers of scholars and learned men than are to be found in the older countries, must look to what is written and said in those countries. Although the tax will adversely affect the production of books locally, it is primarily intended to prevent the importation of books. I have received the following letter from Mr. George Jabor, the Australian representative of several” famous English publishing houses, including the Oxford University Press : -

Looking at the matter from a business viewpoint, since the outbreak of war publishers in England have found it necessary, owing to increased cost of material and compulsory war risk insurance, to substantially increase the published price of many books. In addition to this, the Australian bookseller has to face an increase of 33^ per cent, in shipping freights, and up to 500 per cent, increase in marine insurance. In case this percentage seems to be incredible., let mc say that normal rate of insurance is 25s. per cent., and since the outbreak of war it has increased to as unifil as £10 per cent, and fluctuates around that figure.

The proposed sales tax would affect school books. University text books and .technical books, and would therefore impose an additional burden on the working-class parents of children and university students, and in the case of technical books it would be nothing less than a tax on tools of trade.

I propose to deal further with the contents of that letter when the item is being discussed in committee. The Treasurer should deal sympathetically with the representations which have been made by myself, and other honorable members, including the honorable member for Barton (Mr. Evatt). I sincerely hope that the Government will not disgrace Australia by imposing a tax upon knowledge.

Mr BELL:
Darwin

.-Whilst anomalies are bound to arise in connexion with exemptions from sales tax, and opinions differ as to which goods should, or should not, be exempt, the number of anomalies existing to-day is greater than at any previous period in the history of this tax due, of course, to different rates being fixed upon various classes of goods. Much has already been said during this debate about the sales tax on boots. To me it seems extraordinary that the tax should be applied to higher-priced footwear. Merely because the price is higher, it would be as reasonable to place a higher rate of tax per lb. upon a 4 lb. loaf of bread as upon a 2 lb. loaf. I cannot understand the reason for such a distinction. Whilst some of my employees prefer to pay about 25s. a pair for boots which are of a better make and more durable, others, who are not so concerned with fitting, will pay only about 14s. a pair. The latter, of course, take the view that they can obtain two pairs of boots for the price which the others pay for a single pair. The incomes, however, of all of these men are equal. Why should one man be obliged to pay the tax whilst another man with the same income be allowed to escape?

Although I have listened to many debates on the sales tax since its inception, I have not yet heard any discussion on the point at which the tax should be levied. I contend that it should be levied on the first, and! not the last, wholesale transaction. The rate of tax would have to be increased in order to effect that change, but the burden on the retail purchaser would not thereby be increased. Under the present system of levying the tax on the last wholesale transaction tradespeople are put to considerable inconvenience and cost, and such factors must, of course, be represented in the retail price. Consequently, purchasers of goods from wholesale houses in towns distant from ports of manufacture now pay sales tax not merely on the basis of the actual price of the goods, but on a price which compensates the wholesaler for freight and incidental charges. In respect of goods of any class transported from the mainland to Tasmania, sales tax is levied on a price which includes freight and wharfage, and charges for removal of the goods from the wharf to the warehouse. This practice is foreign to the principle of the sales tax. The difficulty could be overcome by levying the tax on the first wholesale transaction, which i3 either on the price at the factory, or the import price. In this way the cost of collecting the tax would also be reduced, and, at the same time, tradespeople would be enabled to avoid considerable inconvenience and various incidental expenses. I have no doubt that the taxation department has considered this proposal, but I have not yet heard any reason advanced why the tax should not be levied on the first, instead of the last, wholesale transaction. I should now like to hear an explanation from the Treasurer on that point.

Anomalies arising in connexion with the sales tax cause considerable worry. Many of them cannot be excused. However, I am somewhat surprised at the protests made by honorable members opposite against what they term the cruelty of this tax on the poorer sections of the community. Coming from honorable gentlemen who have placed heavy burdens on the mass of the people through high tariffs, such protests can hardly be sincere. It is strange to hear those honorable gentlemen, the high priests of tariff; complaining about the incidence of the sales tax. The incidence of the customs duties which they have supported in this chamber falls much more heavily than the sales tax upon the great mass of the people.

Mr FROST:
Franklin

.- Sales tax is to be levied on all commodities required by those engaged in the fishing industry. In recent years that industry has experienced bad times. When the petrol tax was imposed, with the object of raising revenue for the construction and improvements of roads for the benefit, of motorists, no attempt was made for many years to relieve the fishermen of that tax in respect of petrol which they required for their launches. Fishermen in my electorate also suffered a severe setback in July last when the Government commandeered their boat, which was plying between Hobart and Sydney. Most of the fishermen in Tasmanian waters cater for the Sydney market, but owing to that action of the Government they are now obliged to find markets elsewhere or go out of business. In such circumstances it is not fair to levy sales tax on every article which they require in the earning of their livelihood. Even crayfish pots are to be subject to this tax.

Articles required in the canning and bottling of vegetables should also be exempt from sales tax. Because of a. shortage of shipping we are unable to maintain our exports of fruit. Therefore, we should encourage the canning and tinning of fruit and vegetables, not only for the home market, but also for the overseas market. Whether or not the war should end sooner than we expect, the possibility is that people in many parts of Europe will soon be faced with starvation. The Government is impressing upon apple and pear growers the necessity for finding a market for their surplus production. Last year hundreds of thousands of bushels of fruit went to waste. In such circumstances it is unwise to hamper the sales of such commodities as Australian eider, which I notice will also be subject to sales tax. Surely the Government could afford to exempt such commodities from this tax in order to encourage an industry which is now unable to market a. considerable proportion of its production. Confectionery also is subject to sales tax. Writing to me about the effects of the increased sales tax, a confectioner declared that the trade would find it practically impossible to pass on the imposition to customers, and, in consequence, the industry would suffer severe hardship. Foodstuffs, beverages, medicines, books, building materials and machinery have not escaped the Treasurer’s drag-net. Even lime, which is used extensively by primary producers for the purpose of improving their pastures, has not been overlooked. I appeal to the Treasurer to give earnest consideration to the advisability of exempting the items to which I have referred.

Mr COLES:
Henty

.- The sales tax has been in operation so long that it is generally conceded to be accepted by the people as a regular form of indirect taxation. To the credit of the community, very little protest has been voiced about the amount of money which the public is asked to provide under the budget during the current financial year. Because objections have not been strenuously pressed, we should not ignore the real protests that are made by persons engaged in various trades, which will be seriously affected by the incidence of this tax. A genuine grievance exists in respect of two features of this imposition. The Deputy Leader of the Opposition (Mr. Forde) has already dealt thoroughly with the classification of confectionery. This point appears to be so absurd that it bears all the earmarks of a departmental mistake. In my opinion, the trade should have been consulted before the Treasurer (Mr. Fadden) agreed to include this item in the schedule.

The marketing of confectionery may be considered under two headings. First, “there are the speciality lines which are wrapped in special packages, and are sold by weight, for 3d. and the multiples thereof. Secondly, there are the bulk lines, which are composed mainly of sugar and are also sold by weight. When the price of confectionery is increased, people purchase smaller quantities. The value of the sugar which is used in the manufacture of confectionery in Australia amounts to £1,000,000 a year. As the result of an increase of sales tax, £60,000 worth of sugar will not be transported from Queensland to confectionery manufacturers in the southern States. That will represent a substantial reduction of the wealth of Queensland. A big percentage of confectionery sales is made by small marginal businesses, which make a bare existence out of their trading. This imposition will reduce their sales, and it is not beyond the bounds of probability that a large number of small shopkeepers will be forced out of business. The Treasurer should give consideration ‘to the representations of the confectionery trade for a review of this tax.

The effect on traders generally of the triple method of sales taxation, which is now being imposed for the first time, calls for attention- If honorable members cast their minds back to the introduction of the sales tax during the depression, they will recall that many anomalies occurred in the administration of the legislation. I was a member of a deputation that waited on the former Prime Minister (Mr. Lyons) to discuss the matter and we succeeded in ironing out many problems arising from a number of annoying and expensive methods of book-keeping, and the like, to which commerce and industry were then subjected. Protests against the present tax have been lodged by combined meetings of wholesale and retail traders representing many industries, and their complaints have a genuine foundation. Big businesses, which have machine accounting books, take these matters in their stride and are caused little or no inconvenience; but the system imposes an added burden and expense upon small shopkeepers and country store-keepers. The Treasurer would be well advised to consult the trade generally about the incidence of this triple taxation.

A matter of this magnitude cannot be dissociated from our total war effort. At present, Australia is gradually changing over, as far as it can afford to do, from the manufacture of peace-time requirements to the manufacture of war materials. We must release from everyday industries as much man-power as possible for absorption by war industries. This tax will impose a heavy burden ipon distributing trades, which do not need to be bolstered up, because they contribute nothing to the national wealth. Our war legislation should attempt to simplify the conduct of peace-time industries in order to reduce to a minimum the number of persons engaged upon the distribution of peace-time necessities.

Mr Ward:

– In the Commonwealth, 100,000 persons are still unemployed.

Mr COLES:

– They are not skilled clerks. There is practically no unemployment in the clerical grades, and employers experience difficulty in obtaining trained men. If bigger staffs are required as the result of the imposition of this tax, the price of goods must be increased, and the general community will be poorer for it. If the Government were to simplify the sales tax, businesses would not require increased staffs to deal with it. During the depression, our aim was to create avenues of employment in industry; but, at present, our purpose should be to release people from peacetime industries in order that they may be engaged in speeding up the war effort. The duty of Parliament should be to smooth out, and not to increase, difficulties of business administration.

Mr WARD:
East Sydney

.- Any member of the public who has the opportunity to read the various speeches delivered by honorable members upon the sales tax legislation will be amazed to learn how the parliamentary machine operates. Although every speaker to date has criticized the measure, it is obvious to all that, because of some peculiar arrangement arrived at between the various parties, the bill will be passed on the voices. It is all very well for honorable members opposite, many of whom are known to be wealthy, to declare that the workers must bear a portion of the sacrifice arising out of the national emergency. Workers are making a real sacrifice when the Government taxes their food, and other domestic requirements. This legislation means that they must consume less than before. Honorable members opposite talk glibly about the “ equality of sacrifice.” When they pay their taxes, no physical sacrifice is involved. All they have to do. is to write a cheque for the amounts set out in their assessments. Although their bank balances may De somewhat smaller than usual at the end of the year, they will not have to do without food.

Mr Coles:

– Our overdrafts will be increased.

Mr WARD:

– The honorable member cannot truthfully declare that he is making any real physical sacrifice. The sales tax is most unfair. The honorable member for Werriwa (Mr. Lazzarini) was correct when he stated that direct taxation is the fairest form. The sales tax is a way of chloroforming the people and removing money from their pockets, unknown to themselves. I am amazed that honorable members opposite, after criticizing the bill, will later vote for it.

When the Treasurer (Mr. Fadden) introduced this legislation, he deliberately informed me that foodstuffs would not be affected, but I notice in Division TV. of the second schedule such items as mixtures of vegetables and meat, canned or bottled; soups, canned or bottled; soup powders and soup cubes; and pickles and vinegar. For several days, honorable members opposite have taken credit for increasing by a small amount the allowance paid to invalid and old-age pensioners. Under the compromise effected between the Government and the Opposition, this unfortunate class will receive an additional ls. a week; but before they are paid the increase, the sales tax will take from them more than that amount. Of the 300,000 invalid and oldage pensioners in the Commonwealth, the majority live in rooms, and lack the everyday domestic facilities for preparing their meals. As they depend largely upon canned and bottled foods, they will make the greatest contribution under this tax. Honorable members opposite talk glibly about the necessity for compelling the workers to make sacrifices. Is it not time for Government members and the wealthy section whom they represent to make a substantial contribution in that respect? I ask leave to continue my remarks at a later hour.

Leave granted ; debate adjourned.

page 790

ADDRESS-IN-REPLY

Presentation to the GovernorGeneral.

Mr SPEAKER (Hon W M Nairn:

– The Address-in-Reply will be presented to His Excellency the Governor-General at Government House to-day at 2 p.m. T shall be glad if the mover and seconder of the Address-in-Reply, together with other honorable members who so desire, will accompany me when I present it.

Sitting suspended from 12.45 till 2.S0 p.m.

page 790

SALES TAX (EXEMPTIONS AND CLASSIFICATIONS BILL) 1940

Debate resumed. [Quorum formed’].

Mr WARD:

– I listened with interest to some of the arguments advanced by honorable members opposite, and particularly the remarks of the honorable member for Denison (Mr. Beck), concerning the sales tax on boots “and shoes. The honorable member seemed to be more concerned about the interests of the bootmanufacturers than about protecting the interests of the public. He said that unscrupulous individuals would be able to avoid the tax. “Wealthy companies, of course, engage the best legal brains in the community in an effort to avoid the payment of their just dues, and it will never be possible to prevent the unscrupulous from trying to avoid taxes. The suggestion by the honorable member for Denison, with regard to the sales tax on boots, would not help the workers, but, if adopted, would bring into the field some who now escape the tax. If he wishes . to advance the interests of the boot trade, the best way would be to devise means by which poor people would be able to obtain boots. In my electorate hundreds of unfortunate children are compelled to go without them, because their parents receive such low wages that they cannot afford to purchase them. The honorable member for Henty (Mr. Coles) suggested that the intention of the Government was to force workers from industries producing consumer goods to industries engaged in the war effort. That would be a foolish policy. If every member of the community were fully employed, and a greater supply of materials for the defence of Australia were needed, such a proposal might he justified, but over 100,000 workers in Australia are still unemployed. It is said that they are mostly unskilled workers, yet various trade-unions report that many skilled men are now available for employment. The Carpenters’ Union in Sydney has established a new employment office on the waterfront, and it recently advised me that, at any time, at least 200 skilled carpenters could he supplied for marine work at a few hours’ notice.

I stated earlier in my speech that every member who had spoken had criticized this bill, hut regarded it as necessary, because money had to be raised from some source to finance the war effort. We should examine other fields in which this money could be secured, without taxing the poor. I recently addressed the following question to the Treasurer about Commonwealth tax-free loans: -

  1. Will he have facilities provided for honable members to peruse a list of subscribers to Commonwealth tax-free loans?
  2. Is it a fact that a number of Ministers and members of the Government parties in the House of Representatives and in the Senate hold parcels of these bonds, which will not be subject to the additional income tax provided for in the budget for this year?

The Treasurer replied -

  1. No such lists are available.
  2. I am unable to say what Commonwealth securities, if any, arc held by members of this Parliament.

That answer was a mere evasion.

Mr Archie Cameron:

– If the securities are bearer-bonds, what record is kept of them?

Mr WARD:

– The Treasurer, by his reply, suggests that there are no records ; but the names of the purchasers of inscribed stock are recorded and could be made available to the Parliament and the public.

Mr SPEAKER (Hon W M Nairn:

– The honorable member must discuss the bill.

Mr WARD:

– I am endeavouring to show that it is unnecessary to impose this additional tax, since the money required by the Government could be provided from another source. Numbers of people profess to be very patriotic, but they evade their responsibilities by investing money in ways which enable them to escape taxes. I have received information during the last few weeks that certain members of the Government have recently taken up parcels of tax-free bonds. Since the Government requires invalid and old-age pensioners to pay more for their food and medicines, it is only reasonable to suggest that the fullest facilities should be made available to members of the Opposition to ascertain who buy up parcels of tax-free bonds. In the last few years members of the present Ministry have disposed of shares in various companies. I presume that they have not thrown away the money received for the shares. How have they invested it? So far as I can ascertain, they have not made free gifts of their money to the Treasury. If they have taken up large parcels of tax-free bonds-

Mr SPEAKER:

– The honorable member must confine his remarks to the bill. He may not enter into a discussion concorning individual members of the Government.

Mr WARD:

– I did not mention any individual member of the Government, but, had I been in possession of more detailed knowledge I should have done so- The fact is that the Government is preventing members from securing information on this matter. It is wrong for members of parliament to be talking about equality of sacrifice when they are prepared to impose a tax on the poor and at the same time allow well-to-do members of the community to escape their responsibilities

Since the invalid and old-age pensioners were granted an increase of the pension by ls. a week, the price of matches has risen by 2d. a dozen, and up went the prices of tobacco and other commodities, with the result that the pensioners will immediately lose the benefit of their increase. Honorable members opposite say that some of their wealthy friends will have to pay income tax at the rate of 14s. in the £1. As the honorable member for Barton (Mr. Evatt) pointed out, it is not what we take from a man which counts, but the amount which we leave with him. I should be glad to be getting an income which required me to pay tax to the amount of 14s. in the £1. The Government is not only imposing tax on the foods and medicines of the poor, but it is also imposing penalties on children. It is grabbing the lollies of the school children! It makes the invalid who requires an invalid chair pay an extra tax. Additional penalties are being imposed on the sick and invalid ‘ who require medicine, and surgical equipment. These people are to be penalized because of their misfortune, whilst others are to be permitted to escape taxation. The sales tax Ls wrong in principle, but because of some peculiar agreement between the parties - I should prefer to use a much stronger term - honorable members are to be prevented from recording a vote upon it.

Mr Archie Cameron:

– The honorable member is confined to barking. He is not allowed by his party to bite.

Mr WARD:

– The honorable member for Barker is a barker only when he is out of the Cabinet. He is now using his position on a back bench in order to barge his way back into the Ministry. His opinion does not count for much, either in this House or outside. He thinks that the workers exist only in order to produce wealth for others to enjoy. When he was in the Ministry, he tried to cripple the trade unions and prevent the workers’ views from being broadcast. By dictatorial methods he has always tried to down the workers.

Mr SPEAKER:

– Order ! The honorable member may not engage in a private quarrel in the consideration of this bill.

Mr WARD:

– The speeches of honorable members do not amount to a snap of the fingers in preventing the Government from pursuing the course which it has chosen ; but every member of the Opposition should demand on the public platform that the people should be made aware of the identity of the alleged patriots in this Parliament and outside who, by investing in Commonwealth taxfree bonds, are escaping their responsibility.

Mr PROWSE:
Forrest

.- I have received a large number of telegrams from not only Western Australia, but also other parts of Australia, protesting against the method of collecting the sales tax. The concluding portion of a telegram sent by the President of the Chamber of Commerce, Perth, reads as follows : -

Chamber suggests before present proposals are passed full consideration be given as to whether some scheme can be adopted which, whilst providing required revenue, would simplify method, thus avoiding the possibility of many errors and saving largely in expenses.

All the telegrams admit the necessity for collecting the same amount of revenue. A leading member of the Opposition and a leading member on the Government side have both urged that a flat rate of tax should be imposed on footwear. In view of that I urge the Treasurer (Mr. Fadden to ascertain the simplest way of collecting the tax on this item.

Mr BAKER:
Maranoa

.- 1 condemn this iniquitous tax because in passing it on business people will add a percentage for profit on the additional outlay. It is regrettable that a tax should be imposed on foodstuffs. The effect of this tax will be to bring about an increase of malnutrition which unfortunately is already widely prevalent among our younger people. Sales tax has also been imposed on the requirements of settlers and graziers, on windmills, pumps, tanks and tank stands, troughing, water sprinklers and irrigation machinery. All of these items so necessary for the new settler should be exempt. So unmindful is this Government of the interests of the unfortunate, the sick and injured people, that it proposes to tax even surgical appliances, including abdominal belts, adhesive plaster and strapping. Educational and scientific books should be exempt from the tax. We should do everything to encourage rather than hinder the acquisition of learning. As a stranger in this House I find the greatest difficulty in ascertaining what rate of tax is to be levied on the items appearing in the schedule. A Good Samaritan has told me that a tax of 10 per cent, is imposed on all items in the first schedule, 5 per cent, on those in the second schedule, and 15 per cent, on those in the third schedule. The rate of tax should be clearly shown in respect of every item appearing in the schedules. Bills of this kind are thrown down before us, and with only about five minutes to examine them honorable members cannot possibly deal with them intelligently. I cannot too strongly express my condemnation of the imposition of this iniquitous tax on foodstuffs.

Mr PATERSON:
Gippsland

– I was very surprised to hear some of the criticism offered by honorable members to the Government’s proposals in connexion with the sales tax on footwear. The honorable members for Denison (Mr. Beck) and Melbourne Ports (Mr. Holloway) and several other honorable gentlemen, particularly those on the Opposition side, opposed the tax on footwear on the ground that it would inflict hardship on people who are not well off. They have suggested that a flat rate of 5 per cent, should be imposed on all footwear. That seems to me to be a direct contradiction of the attitude generally taken by honorable members opposite in connexion with indirect taxation. Honorable members generally, I think, agree that those with the smallest incomes should be exempt from direct taxes. That is the principle which the Government has adopted in connexion with the indirect tax on footwear. All footwear that sells at a retail price of less than about 22s. will, under the Government’s proposal, be free from tax. That will automatically exempt from tax all children’s footwear except luxury lines.. Those who pay from 22s. to 25s. a pair for children’s shoes can well afford to pay this tax.

Mr Beck:

– In urging that a flat rate should be imposed, I said that children’s footwear should be exempt.

Mr PATERSON:

– I was not aware of that. I entirely disagree with the suggestion that a flat rate be imposed. We should endeavour to exempt footwear sold at a price within the reach of those of modest means. That is what is aimed at. in the Government’s proposal.

Mr Martens:

– Does the honorable member suggest that footwear costing 22s. 6d. can be regarded as a luxury?

Mr PATERSON:

– It is possible to purchase quite good footwear at about a guinea. Those who are able to pay more than that should have no objection to paying sales tax, particularly at a time such as this. The proposal of the Government in this connexion confers a distinct benefit on people with small incomes.

Mr BREEN:
Calare

.- As the leaves of the budget turn over and the plot develops to its climax, we see even the most doughty fighters for orthodox finance losing faith in their cherished formula, lt is not my intention to tell the Government how it should make this formula work, because I do not believe that it is -workable. In its incidence this legislation will act as a punitive measure rather than as a measure of raising funds to enable the Government to carry out its war effort. It is recognized by all honorable members that a policy of decentralization is necessary in the best interests of the community; but the greater part of the legislation brought down by this Government will have the effect of militating against, instead of fostering, that policy. Let us consider for a moment the effect on small tailors in country towns of the proposed sales tax on clothing. The general store in the average country town has not the means to purchase the ready-made clothing available to city dwellers. The clothing requirements of the average man in the country are catered for by the local tailor. The country man wears his suit for from twelve months to two years, and the effect of this legislation will be to squeeze the country tailor out of existence. If he employs labour, he will have to put his man off and, as no employment is available in country towns for that class of labour, the unfortunate employee will drift to the cities. The consuming power of the people is lessened and so the vicious circle goes on. Every piece of legislation brought down by this Government has been ill-considered and vicious in its incidence. The Government has even seen fit to impose the tax on tinned milk. Any body familiar with conditions in country towns knows that for about three months of the year it is almost impossible to get fresh milk. Even if fresh milk is available during that time many people are too poor to buy it. Every docket presented in return for a dole ticket used in the country will be found to record the purchase of tinned milk. That milk is used, not for household purposes, but by the baby of the family. If items such as tinned milk are taxed, the children of the poorest section of the community will be deprived of an essential food.

Tinned vegetables also are to be taxed. All honorable members must be aware that at. times fresh vegetables cannot he purchased even on the Sydney market. What chance would country people have, in such periods, to obtain adequate supplies ? Frequently the use of tinned vegetables is. compulsory in the country, because fresh vegetables are unprocurable. I need hardly remind, honorable members that various organizations interested in the promotion of public health have again and again emphasized the food value of milk and vegetables. If poor people cannot afford to buy these necessaries, they and their children may suffer from serious malnutrition. If that state of health should develop generally, obviously we should not be able to make a maximum war effort. Some honorable members opposite have referred to the desirability of imposing this tax on the initial sale in preference to the final sale, hut under our modern system of finance, it does not matter very much at what stage it becomes payable. A certain amount of capital is required to market goods, and if more than the necessary amount is used- larger aggregate profits will be required by the capitalists, although the percentage of profit may remain more or less stationary. The adding of cost to cost is invariably to the detriment of the community, and sooner or later our persistence in this process will bring our economic structure crumbling about our heads. I have said on other occasions in this House that the Government should make some revolutionary changes in our monetary system. Private banking methods which might have been suitable to the economy of 100 years ago are entirely unsuitable to the economy of to-day. The more closely we examine the provisions of the budget, the more clearly we see that the working community will be heavily penalized by them.

Mr DUNCAN-HUGHES:
Wakefield

– I was pleased to hear the honorable member for Darwin (Mr. Bell) refer to the inconsistencies of honorable members opposite as revealed by their different attitudes on this sales tax legislation and on tariff proposals. The honorable member’s remarks awakened in me memories of a tariff discussion in which I participated in the Senate seven years ago. It was the longest and fullest tariff discussion that had ever occurred in the Senate, and it is remarkable that the items then under discussion included some that are now being discussed in this chamber. On this occasion the issue is not whether a heavy customs duty should be imposed, but whether a comparatively small addition should be made to the rate of sales tax.

In my contribution to that Senate tariff discussion I devoted a good deal of attention to footwear. I was glad to hear the honorable member for East Sydney (Mr. Ward) take a stand to-day in the interests of the consumers, for seven years ago, in the Senate, I also directed attention to the rights of the users in dealing with, among other items, tobacco, footwear, medicines, and rabbit traps. Unfortunately, too few members of Parliament show an interest in the welfare of the consumers.

The remarks of the honorable member for Melbourne Ports (Mr. Holloway) in relation to footwear were made in a persuasive and insinuating manner, using the word “ insinuating “ in its best sense. In the Senate tarin’ discussion of 1933, I moved that the proposed British preferential rate of duty on footwear should be reduced to 30 per cent. I considered that with the assistance of freight, exchange and primage, that rate afforded adequate protection to the Australian industry.

Mr FORDE:

– The honorable gentleman doubtless desired to make possible the importation of British footwear, .although our Australian boot factories were not then operating at full capacity.

Mr DUNCAN-HUGHES:

– With the natural protection then available, my proposed reduction of 15 per cent, would still have left the local manufacturers with a 65 per cent, protection against British products and 100 per cent, protection against foreign goods. The amendment Was defeated on a division by 14 votes to 7. Every Labour senator voted against my amendment. I find it difficult to reconcile their attitude with the views being expressed to-day by honorable members opposite. For many years, Australia relied upon British manufacturers for the supply of the footwear required here, but by 1933 95 per cent, of our requirements were being manufactured locally. I considered that in view of the decisions of the Ottawa ‘Conference which had just been made public, we were under some obligation to assist the British manufacturers of footwear and other goods. The members of the Labour party thought otherwise. My old friend, Senator Rae, in a characteristic utterance on my amendment, said -

I am sure that on reflection Senator Duncan-Hughes will realize that his proposal merely skims the surface, and would have but ephemeral results.

In concluding his speech, the honorable senator remarked -

I should be out of order if I said more than once each time I rose, “There is no remedy for the existing trouble other than the destruction of capitalism “.

Mr Ward:

– Hear, hear!

Mr DUNCAN-HUGHES:

– I expected to hear at least one honorable member opposite endorse that view. My desire was to ensure that purchasers of boots would be able to obtain their requirements at a reasonable price.

Then the honorable member for Werriwa (Mr. Lazzarini) referred to the effect of the Government’s proposals on the prices of medicines. In the 1933 discussion in the Senate, I adopted precisely the attitude that he is adopting to-day. I moved that the proposed British preferential duty of 30 per cent, ad valorem should be reduced to 20 per cent. A keen discussion followed and my amendment was defeated by 14 votes to 13. Again, although the amount was designed to enable working people in particular to obtain their medicines at a reasonable price, every member of the Labour party present voted against it.

Mr Holloway:

– We are now able to make in Australia practically all the medicines we require.

Mr DUNCAN-HUGHES:

– That may be so. I was interested to learn subsequently that my amendment was viewed with favour by many of the big chemists, and also by many members of the general public.

Mr Holloway:

– As the result of the policy that was then adopted, our soldiers are now able to obtain Australian-made medicines.

Mr DUNCAN-HUGHES:

– The honorable member for Melbourne Ports, as I have already said, made his speech in a most persuasive fashion this morning, but it did not influence me greatly because I remembered that the attitude adopted by honorable senators of the Labour party seven years ago resulted in the defeat of my amendments.

Mr Holloway:

– If the honorable member was right then, the same attitude should be right now.

Mr McCall:

– We are at war now.

Mr DUNCAN-HUGHES:

– That is so. The conditions are entirely different to-day.

If I felt a temptation to support any of the views expressed by any honorable gentleman opposite on this bill, I should lean to the case submitted by the honorable member for Bourke (Mr. Blackburn) in regard to books, and more particularly books of learning. This issue was dealt with in this Parliament about ten years ago during a criticism of imposts on books, and as the result of the clamour the Government’s policy Was eventually varied. In these days, every one should be prepared to make some sacrifice to assist the national war effort. Nevertheless, I do not think it is sound policy to penalize purchasers of books of learning. In times like these the natural tendency is to limit expenditure in this direction. Honorable members are in a fortunate position in that they are able to obtain from the Parliamentary Library such books of this character as they may require. I do not regard books of learning as luxuries, although it may be true that we could do without some of them for the time being. One result of the imposition of this tax will be that the importation of books of learning will be discouraged, with a consequent slackening of the dissemination of real knowledge throughout the community. I do not suggest that the Treasurer (Mr. Fadden) should drop his proposal at this moment, but he should, I think, seriously reconsider it in the near future in order to see whether it is not practicable to obtain the revenue he requires without putting on this tax. I hope that it may be possible to restore books of learning to the list of exemptions.

In my budget speech, I expressed the view that difficulties would be encountered with the imposition of differential rates of sales tax. This procedure will, I am sure, be a bugbear to small business people. However, I have no doubt that all of us are of the opinion that we could make a better selection than the Treasurer has made of goods to which the sales tax should apply, but I am also certain that the selection of any one of us would fail to give complete satisfaction to any other one of us. In any case it is of little use for us to wave the flag and talk about the Empire and the need to do our utmost to assist the war effort if, immediately we are faced with specific propositions, we stumble and fall away from our high aspirations.

Mr Ward:

– What has the honorable member done to assist the war effort?

Mr DUNCAN-HUGHES:

– Surely it would ill-become any honorable member to emphasize his own particular part. In any case this not a time for small personalities. We should look at the facts. The Government’s proposal is designed to assist the nation to make its maximum war effort. ‘Consequently, although I may not be in favour of some of the details of the measure before us, I do not intend to vote against it. I may think that I could have made a better choice, but that is not the point. I do not desire, either, to emphasize that the sales tax was first imposed by the Scullin Government. That ako is beside the point. There is no reason why honorable members generally should not express their views on the details of the Government’s measure, but, for my part, I shall vote for the bill irrespective of whether I favour all of its provisions.

Mr JAMES:
Hunter

.- Every one agrees that the provisions of this measure are not altogether equitable. Those honorable gentlemen who have spoken in support of it’ have used the argument that we should concentrate all our financial resources on the war effort. We all believe in giving of our best in order to win the war. But the Government can go a little too far in its harsh treatment of the people whom it expects to fight in defence of Australia. It is unreasonable to tax them indirectly to the degree that is proposed in this measure in addition to the extremely heavy direct taxation that is already provided for in the budget. The Government even had the temerity, in that budget, to propose the reduction of the income tax exemption from £250 to £150; but, fortunately, the Labour party was able to force it to compromise at £200. The annual consumption of taxable goods in Australia is valued at £365,000,000. Of the total, goods to the value of £314,000,000 will be free of sales tax. The machinery used by primaryproducers will remain exempt. I can see in that the hand of the Country party, which dictates what action the Government shall take in regard to primary industries. This is the price it demands of the Government in return for its support. The Minister said in his speech on this bill -

Exemptions from sales tax are based upon certain well-defined criteria, which may be briefly stated as follows: -

The goods are basic foodstuffs.

Machinery and equipment in primary industry.

But the honorable member for East Sydney (Mr. Ward) and others have made it abundantly clear that basic foodstuffs will not be exempt from sales tax. The poorest members of the community, such as old-age pensioners who have no other home than a bachelor hut or tenement, will be forced to buy the preserved commodities which are referred to in Division IV. of the second schedule to the bill as “vegetables, canned or bottled ; mixtures of vegetables and meat, canned or bottled; soups, canned or bottled; soup powders and soup cubes; tomato puree and tomato paste; pickles, olives and capers; vinegar; and ice”. Are they basic foodstuffs or are they luxuries? Surely the Government cannot honestly classify them as luxuries. Those unfortunate people who live by themselves on a pension or small annuity will be obliged to pay a heavy share of this 5 per cent, sales tax. It is a tragedy.

I refer now to the exemptions provided in favour of primary producers. In 1934 or 1935 I’ was instrumental in having a number of commodities used by miners placed on the list of exempt goods. But the Government has cast its dragnet and brought those articles into the field of sales taxation once again. Miners, who are engaged in a form of primaryproduction, are to be hit by the sales tax even before they can start work. Their pit boots, picks and shovels, drills, boring machines, explosives and carbide, which they must purchase in order to earn their income, are to be taxed. The honorable member for Barker (Mr. Archie Cameron), who is so concerned about the welfare of the cocky farmer, laughs. All of us are concerned with the welfare of the man on the land, but it is altogether wrong to discriminate between different primary industries, as has been done in this bill. Coal is just as important a primary product as is any other commodity. It provides the fuel that drives the wheels of industry and brings the farmer’s wheat and other products to market.. Notwithstanding this, coal-miners and coal-owners are to toe obliged to carry a heavy burden of sales tax, whilst other primary producers are to go more or less free. Division I. of the second schedule to the bill provides that the tax shall apply to “ all materialsfor use in the mining industry in carrying out mining operations and in the treatment of the product of those operations “. Even metalliferous mining is to be affected, because the provisions include “ material for use in the recovery of metals by the flotation, cyaniding, electrolytic or similar processes “.

Mr Rankin:

-. - Does the honorable member blame the Country party for the fact that agricultural machinery is not to be subject to sales tax? If so, the Labour party’s chances in the Swan byelection might be prejudiced.

Mr JAMES:

– The honorable member cannot bait me like that. The Labourparty believes in exemption from sales tax of all tools of trade in primary production. When honorable members of the Country party bargein on the composite Government and dictate, for the price of their votes, what exemptions shall be granted to the people whom they directly represent - or misrepresent - why do they not ensure that other primary producers, such as the coalminers, receive the same privileges ? Had’ the Labour party sold its principles for portfolios, it might have been able to save the miners from the severe effects of these proposed taxes, it might also have relegated the Country party to the background of political affairs. But the Labour party will always stand by itsprinciples; it will never sell out.

Mr Archie Cameron:

– Does the honorable member suggest that the coalfields should be represented in this Parliament by members of the Country party ?

Mr JAMES:

– If the coal-miners, had a representative like the honorable member for Barker (Mr. Cameron), who has jumped like a political brown billy-goat from crag to crag, they would dump him down one of the mines. I am a miner. I am not interested in dividends from the coal-mines, but it is my duty to endeavour to look after the interests of the mine-owners; in doing so, I shall also be looking after the interests of the miners. I endeavour to ensure that the owners will not be required to pay such heavy overhead costs by this tax on machinery as will cause idleness on the coal-fields. I have never held a brief for the mine-owners but, from a life-time of experience, I know that they will suffer severely from the effects of this proposed sales tax which will reflect itself in less work for the men, for whom I am mainly concerned. Coal-miners work on contract, not day labour conditions. Therefore they have to purchase their own tools and explosives. That reminds me of a statement by my friend from the tall timbers in Victoria, the honorable member for Gippsland (Mi1. Paterson). He said that the sales tax would not apply to boots costing less than 15s. a pair wholesale, or about 21s. retail. But coal-miners must use boots capable of resisting the damaging effect of chemicalimpregnated water in the mines. Consequently they cannot purchase satisfactory boots for less than about 25s. a pair retail. These are called pit boots. If some of the miners did what they sometimes feel like doing, and trod on the faces of supporters and members of the Government with their mining boots, those honorable gentlemen would soon realize the quality of their footwear. The bill also provides for sales tax on wooden tool handles that are used by the miners. These were formerly exempt from sales tax. Brattice cloth, which is essential in mining operations, will also be taxed. It is used to ensure perfect ventilation in order that gases that are liable to spontaneous combustion may be driven out of the mines. By including this com modity in the sales tax provisions tha Government is courting the risk of serious explosions in the coal-mines. Surely honorable members on the Government side of the chamber are not so callous as not to have been deeply affected by mine explosions in which as many as 300 men have been blown into eternity. It seems that these dangers do not matter to them. I often speak in this House on behalf of the miners. At times I become tired of trying to enlist the sympathy of Government supporters for my constituents. Honorable members opposite have been warned time after time of the precautions that should be taken in the mines in order to provide for the safety of the workers. The imposition of a paltry 5 per cent, sales tax upon mining materials, such as brattice cloth, may cause the owners to economize in their use, with the result that men may be killed. In that event, the Government would realize that what Rowley James had said so often was true. Honorable members opposite do not seem to care what happens to anybody other than the people whom they represent. They do not believe in the slogan, “ All for one and one for all “. They are concerned only about the interests of the wealthy classes and overlook the welfare of the working classes. Timber, one of the most important articles used in mines, also comes within the dragnet of this measure. It is used in order that .miners may not be crushed by sudden falls of rock in the bowels of the earth. Is the protection of profits the first consideration, and that of human life the second? It appears to be so when the Government is prepared to exempt all primary-producing machinery except mining machinery. I am complaining not because farming machinery has been kept out of the field of sales taxation, but because mining machinery has not. The miners cannot work in the pure air and God’s sunlight; they have to earn their living in the foul gaseous atmosphere beneath the earth. Timber and other materials used for safeguarding miners’ lives should not be subject to heavy taxes; then, the mine-owners will not reduce their use in the mines, and, thereby lower the margin of safety of mine-workers. Other items in the schedule are saddlery and harness, and trace chains. Saddlery is used more extensively in the mining industry thaI in many other industries. The safety of the lives of men who have to work thousands of feet below the surface frequently depends on the strength of the wire rope used to lower them and haul them to the surface, yet a tax of 5 per cent, is imposed on this article. Many mining disasters have been due to an inrush of water, which has had to be pumped out. Men have been trapped like rats below the surface. The saddest feature of such a catastrophe is the pitiful last message left for wives on the food cans of the men. In the little town of Hamilton, close to where I was born, a number of men were trapped on one occasion by an inrush of water. Callous and brutal disregard for the welfare of those who are placed in such a situation is shown by the tax imposed on pumps which are used to keep water out of mines.

Another member of the. community which this tax will hit very hard is the invalid pensioner. Many pensioners need abdominal belts, crutches, bandages and bandage winders, artificial limbs, artificial eyes, elastic bandages, knee caps and stockings, surgical boots, surgical, medical and first-aid outfits, trusses, &c, yet all of these are to be taxed. If honorable mom bers attempt to justify the taxing of the poor, the sick, and the afflicted, whilst exempting others who can well afford to pay, they will not be observing the principles which they enunciate. Shortly, we shall be commemorating the birth of the Lowly Nazarene. This measure is a striking example of departure from His teachings that we should assist the poor.

In working-class communities, the acquirement of homes is the ambition of our citizens. This is the first aspiration of young married couples. Yet the whole of the building materials are again to be brought within the ambit of this tax. Men should be encouraged to he patriotic, and prepared to fight and shed their blood in the interests of their country. Bad though the conditions may be in this country, the Australian youth is nevertheless responding magnificently to the call for enlistment for military service a’broad, and the enlistments of mem bers of the working class, as usual, are the most numerous, because they represent the largest section of the community. We should not, by the imposition of taxes, reduce the standard of living of our people below what is fair and reasonable, but should encourage them to build homes. Girls who work in city stores, and in the State and Federal public services, if in receipt of a taxable income exceeding £200 a year, are to be subject to a direct tax. Everybody must realize what a hard struggle a woman has who is living away from her parents in city apartments. The rent that she has to pay for decent accommodation is high. In addition to being taxed directly, women are to be further taxed on all the toilet accessories they need, such as face powders, rouge, creams, lotions, oils, lipsticks, lipsalves, eye-brow pencils, eye.beautifiers, and other preparations which enable them so to improve their appearance that they are attractive in the eyes of gentlemen like some of the old bluebeards who sit opposite. We believe in having a healthy and clean race, yet the Government proposes to tax body powders, deodorants, creams and similar preparations, suntan oils, lotions, &c, toilet and bath soap, bath salts, solid or liquid, foam preparations, shaving sticks, creams, soaps powder and tablets.

I propose to move at the appropriate stage for the exemption of these and other items affecting the mining industry to which I have referred. Some persons have always been able to secure exemptions and bounties in return for their political support. There are bounties on practically everything produced, yet nothing has yet been done for the coal-mining industry. In the early hours of this morning, this House dealt with a matter concerning the apple and pear bounty. Mention was then made of the 7,000 to 11,000 growers in the fruit industry being “ hard up “. I represent approximately 15,000 miners, for whom nothing has been done and who have suffered more than any other section. Not only are they not to be given a bounty directly, but they are to be taxed directly and indirectly. Tax is even imposed on soaps. That goes a little too far. I plead with the Treasurer to give consideration to the matters I have raised.

I am not pandering to him when I say that I have always found him reasonable and ready to listen to our representations. Naturally, not being associated as closely as I am with the mining industry, he has had to rely for advice on his departmental officers, who have told him that these are the only sources from which revenue can be obtained. The primary producer, it is said, must not be asked to pay a tax on his harvester; yet all of the articles which the constituents of Rowley James need are to be subject to sales tax. That gentleman intends to “ kick like the devil “ in order to have these items again placed in the exempt list. I fought for their exemption in 1934 and 1935. If it was right to exempt them then, it is equally right to exempt them now.

Mr CONELAN:
Griffith

.- Division VI. of the third schedule provides for the imposition of a sales tax of .15 per cent, on yachts, skiffs, dinghies, launches, speed-boats and canoes. The Government is to be commended on that account. But the Government also intends to tax at the same rate children’s toys, such as those purchased at Woolworth’s and Coles for 3d. or 6d., small games sold for 6d., children’s stockings, penny lollies, school-books, Christmas blockings, and everything else that gladdens the heart of a child. Surely the Government is not in such dire straits that it is necessary to tax all of these items at the high rate of 15 per cent.! I appeal to the Treasurer (Mr. Fadden) to give further consideration to this matter. I am certain that neither he nor the Government wishes to prevent poor children from purchasing what will brighten their Christmas festivities. The honorable member for Wakefield (Mr. Duncan-Hughes) made a patriotic appeal in support of the sales tax, but I remind him that, during the last war, when there was no sales tax, the public found ‘all the money necessary. This insidious form of taxation was introduced in 1931, admittedly by a Labour government, but it must be remembered that Australia was in a terrible economic condition at that time. Labour has not been in power since 1932, but the sales tax has remained, and this year the Government proposes to raise by it no less a sum than £20,400,000. When the Labour Government went out of office, the sales tax was yielding £8,000,000 a year. Now, out of a total of £74,000,000 which it is proposed to raise by indirect taxatian, over £20,000,000 is to come from sales tax. This form of taxation falls with particular severity on the lower sections of the community, and the larger a man’s family, the more he has to pay.

Mr PERKINS:
Monaro · Eden

– I feel sorry for the Treasurer (Mr. Fadden), who has probably the hardest job in Cabinet at this time. His is not a popular job, when taxes have to be increased. During the regime of the Lyons Government, the task of the Treasurer was pleasant enough, because every year he was able to reduce taxes, including the sales tax. I was looking forward to the time when it would be possible to abolish sales tax, but, owing to conditions arising out of the war, it is necessary to raise more revenue, and so all taxes, including this one, must be increased. Let us not forget that under this budget we have to raise £186,000,000. It is easy for every one to tell the Government to leave him alone and tax the other fellow. The honorable member for Hunter (Mr. James) put up a very good case for exempting the coal-miners, and the honorable member for Griffith (Mr. Conelan) made an eloquent plea in favour of exempting from taxation the children’s lolly-sticks and toys. Before that, several honorable members asked for concessions to the boot industry, and others wanted the tax on confectionery reduced. If all those concessions were granted, several million pounds of revenue would have to be made up in some other way. Therefore, I support the Treasurer’s proposals, little as I like them. I believe that an excellent precedent was created when a committee of the members of this Parliament was appointed to consider the taxation of profits. I understand thai the committee reached a unanimous decision which will be subsequently brought before the House. This method of considering proposed taxation should be extended. I do not suggest that it can be done now there is not the time, but it will have to be done sooner or later. It is impossible for the Treasurer alone, or even for his officials, to see all the possible effects of any proposed tax, and whatever he done, anomalies will arise. The tax on books was removed after it had been in operation for some time, and now it is to be re-imposed. I appeal to the Treasurer to make more use of the members of this House. We are here to help him, and if he must have £20,000,000 from sales tax, we shall find it for him in such a way as to do the least possible harm to industry, while inflicting the minimum of hardship on the public. I do not favour the proposed differential rates of sales tax. Storekeepers have sufficient difficulty now in connexion with the tax, and their difficulties will be increased under the new system. However, we are prepared to put up with these hardships now, because there is a war on, but in future members pf Parliament should he consulted more fully upon these matters.

Mr DRAKEFORD:
Maribyrnong

– This is the tail-end of a longdrawnout debate, during which honorable members have criticized both the principle and details of the measure before the House. The Government proposes to raise an additional £3,400,000 by means of the sales tax. I object to this method of raising revenue while other avenues are available, just as I object to all attempts to increase indirect taxation which falls most heavily upon the poorer sections of the community. I appreciate the difficulties with which the Treasurer (Mr. Fadden) is confronted, but I cannot avoid feeling resentful when I see heavier taxes being piled upon the workers, while the Government refuses to explore properly other avenues for raising revenue. This measure shows the wide difference of outlook between the Government and the Labour party. It proves that there is no hope of complete co-operation between the two parties, one representing as it does the interests of the wealthy section of the community, which controls all the instruments of propaganda and publicity, and the other the interests of the majority of the people, including the workers. The Labour party wants to see those who have most at stake pay their proper share of the cost of the war. That raises the question of what is their proper share. The Government evidently agrees that they should pay something, but it also proposes to increase the tax burden on the poor by raising indirect taxation. No less than 82 per cent, of the revenue raised last year came from indirect taxation, and now the Government proposes to take more.

I deny that this budget has been hastily prepared. As a matter of fact, the Government deliberately refused to produce its budget until after the election in order to avoid political consequences. The budget has been carefully prepared with the idea of loading on to the workers all they can bear, while placing the lightest burden possible on the wealthy. For that reason I object to it. This measure is called “A Bill for an Act to amend the Sales Tax Exemption Act 1935-1939, as amended by the Sales Tax Exemption Act 1940”. Its proper title should be, “ A Bill for an Act to remove such protection as formerly existed for the living standards of the workers “. While an additional £3,400,000 is to be raised by the sales tax, certain wealthy companies are piling up enormous reserves. Taxation on such companies should be increased before additional burdens are laid upon the workers, and by the workers I mean, not only those employed in mines, factories and transport, but also primary producers and clerical workers. Probably the Government will be compelled next year to make even heavier demands on the public, but, at this stage, so great an increase of indirect taxation is not necessary. It is now proposed to levy sales tax on such articles as tinned foods, building materials, and materials used in the construction of water supply schemes and sewerage undertakings. The tax on building materials will make it more difficult for people to acquire their own homes. The capital cost of homes will be increased, and the interest charges will accordingly be greater. I realize that the Government must raise revenue for war purposes, but I condemn it for attempting to place the heaviest burden upon the workers, who are expected to fight the war and pay for it too.

Appeals are constantly ‘being made to the public to subscribe to various patriotic funds in order to provide comforts for men in the fighting services. I believe that the Government should provide whatever is necessary for the troops; there should be no need for additional comforts bought by private subscription, but as the Government does not accept that, it should not discourage public efforts. A patriotic carnival held recently at Essendon raised a gross total of £4,000, mainly by the sale and distribution of goods in various ways. The profit will be about £2,000, but if the claim which has been made for a sales tax has to be paid on the goods disposed of, it will reduce the profit by £100. Such an experience must greatly discourage the organizers. When goods are purchased for sale for patriotic purposes, they should not be subject to sales tax.

The honorable member for Melbourne Ports (Mr. Holloway) and the honorable member for Denison (Mr. Beck) dealt thoroughly with the desirability of imposing a flat rate, instead of differential rates, upon the sale of footwear. Such, a proposal is approved, not only by the manufacturers, but also by the employees. If the imposition of a flat rate will not result in a loss of revenue, the Treasurer could adopt it in preference to the proposed differential rates, but the rights of the consumer should not be neglected. I commend the honorable member for Eden-Monaro (Mr. Perkins) upon his courageous attitude in offering friendly criticism of the Government on this measure. Recently, he also made an excellent speech in defence of democratic institutions. When honorable members tender sound advice to the Government which they support, they should be complimented by the House. He pointed out that the Parliament could be made to work more satisfactorily by making greater use of the committee system. Despite all declarations to the contrary, I am convinced that a national government is unnecessary. Parliament can function successfully without it. The honorable member for Eden-Monaro stated that the committee which was appointed to inquire into the proposed war-time company tax has reached a unanimous decision. Later, its recommendations will be conveyed to the House. Similar work could be done with committees, thus preserving the rights of the people and the Opposition, and assisting the Government to function effectively. Although private members, irrespective of their party allegiance, are invariably willing to assist the Government in Australia’s war effort, use is seldom made of their undoubted ability and extensive experience. Once the Government has decided how it can best protect the wealthy, it is satisfied with its efforts, and gives no consideration to the welfare of the poor. Greater use could be made of parliamentary committees. If a committee representative of all parties were appointed to inquire into forms of taxation, other than those now contemplated, it could assist the Treasurer to achieve his budget calculations by means that would impose less hardship on large sections of the community. I protest against this bill, because it increases indirect taxation, with the result that the workers will make the biggest contribution. The Government deliberately delayed the introduction of the budget until after the general election had been held, and it now proceeds to extraordinary lengths to protect the wealthy. I should feel much happier if no compromise on the budget had been reached by the party leaders, because I wish to be free to voice my disapproval of this method of fleecing the people and lowering the living standards of the workers.

Mr BRENNAN:
Batman

.- We are now engaged in the race to the recess, with the usual concomitants of hard work, forced marches and deliberations lasting long into the night, and with the additional penalty which arises from the fact that as the Government does not command with certainty a majority in the House, it cannot impose the “guillotine “ or the “ gag “ for fear that its somewhat defenceless position may be disclosed on the eve of Christmas to an inquisitive public. Such conditions are not favorable to an intelligent examination of serious problems of State, of which the sales tax is undoubtedly one. Those who have employed it from time to time, including the Scullin Government of which I was a member, have defended it on the ground of “ military necessity “, or have contended that in certain circumstances the end justifies the means. As I indicated in my speech on the budget, there is grave danger that too high a price in spiritual things may be paid for merely material advantages. That is aptly illustrated in the proposal to revive a tax upon learning and knowledge, upon mental processes, which is summarized in the phrase “ a sales tax upon books “. It redounds to the credit of the British public that they have made themselves so intelligently articulate upon this matter that the evil has been overthrown and any idea of imposing such a tax in the United Kingdom has been abandoned. It was interesting to observe the different kinds of mind that were associated with the protest in Great Britain, including men of letters, men of religion, philosophers and members of the reading public, who were accustomed to take refuge in the solace of communication with great minds through the processes of literature. We in Australia seem to have fallen from grace. The fight against the taxing of books has been waged in this Parliament on previous occasions, and we thought that we had won. In my view, the case against the imposition of a tax upon knowledge is unanswerable. Whatever the consequences, we dare not pledge things that are priceless for things that are material. We have no right, founded on mere necessity, to abandon matters of high principle. It is better to run any risk rather than take such a course.

The honorable member for Wakefield (Mr. Duncan-Hughes) made some comparisons between the attitude which he adopted in the Senate to the tariff and his attitude to the sales tax, in order to show that the Labour party manifested inconsistency in the fact that, whilst it was concerned about the interests of consumers of goods subject to sales tax, it manifested little concern for the consumer of goods subject to high tariff duties. Although his observations were, in my opinion, not altogether pointless, they lose much of their force when we consider the real significance of the Labour party’s attitude to the tariff. It is not simply a matter of collecting revenue. The protectionist policy is designed to stimulate local industry, in order to create employ ment, avoid costs of transport from overseas, and make manufactures available locally at prices lower than those of the imported articles. Whilst many sharp limitations may be imposed upon that line of argument, it is quite a logical presentation of a different case from that which is presented for the sales tax. This imposition is a predatory measure, designed to raise revenues ex necessitaterei I join with those who have expressed the hope that a different course of action will be followed, without necessarily losing revenue, from that which is now proposed in respect of the sale of boots. Manufacturers and workers alike have condemned the present proposal to impose differential rates according to price. On behalf of the employees’ organization, it has been well stated that the proposed tax -will undoubtedly place a penalty upon quality and value, and, conversely, a premium upon shoddy footwear. A representative manufacturer contended that the progress of the boot-manufacturing industry, with its extra service to the public resulting from years of experimentation and conscious effort, will be lost because most manufacturers will be forced to adopt mass-production methods, demanding of their labour quantity instead of quality. That will undoubtedly be the result of the tax in its present form. It is a mistake to suppose that intelligent working-class people think it prudent to purchase either in boots or clothes the cheapest article. In other words, it is problematical whether the cheaper article is not, in the long run, the dearer article. I think the better opinion is that if one can possibly find the money, as a rule he gets economically more for his money when he buys the more expensive article. That, of course, is quite apart from the fact that some goods are sold at extravagant prices and at unnecessarily high profits. Nevertheless, price has a relation to real value in goods. As employers and employees have indicated, this tax is merely an incentive to the manufacture of shoddy in place of a good article. It is a matter for congratulation that entirely by reason of tariff protection - and the honorable member for Wakefield would do well to bear this in mind - we nave succeeded in establishing in Australia a footwearmanufacturing industry which reflects great credit on operatives and manuf acturers alike. As some honorable members know, I do not hold extravagant views in regard to high tariffs, but I believe that we have reason to be proud of the fact that, with the assistance of the protection afforded by the tariff, we have been able to establish an Australian leather industry on the basis of good quality. It is entirely right that we should have cultivated to the fullest degree the manufacture of leather in Australia. We are now able to produce an article in competition with the very best in the world at, on the whole, a reasonable price. It would be regrettable if, as the result of the imposition of this sales tax, we should encourage our manufacturers to produce, in keen competition, an inferior article.

It is now proposed that sales tax shall be imposed on advertising matter which may be generally described, as far as I am interested in it, as handbills, salesbills or dodgers, which are distributed in the suburbs to advertise the holding of sales by drapers’ establishments and the like. Handbills are also, of course, distributed by butchers, bakers and retailers of classes of goods not subject to tax. They have been described as the bread and butter of the printing industry, and the tax proposed to be put on them will bear hard on those who print them and on the user of the goods. Some of the goods advertised in these handbills are themselves already subject to sales tax, which makes effective salesmanship difficult enough. The imposition of this further tax must result in the prices at which the advertised goods are sold being further increased. I do not know why this new departure is being made. The Government seems to have sought out new avenues in which the tax can be applied, but I cannot think that it is doing it very logically. A little more intelligent cooperation among honorable members might have informed Ministers better on this point. I hope that, with a view to ameliorating the hardship that it will entail, particularly on workers and the consuming public generally, the Treasurer will reconsider his decision to impose sales tax on books, boots and handbills.

Mr MORGAN:
Reid

.- I realize that it is futile to debate the general principles of this bill at any length, because the Government has made up its mind to go on with it. There are, however, certain anomalies in connexion with the sales tax which should be brought under the notice of the Government. Even at this late hour the Treasurer (Mr. Fadden) may be willing to exempt goods from the tax where its imposition would cause great hardship. The proposed sales tax on building materials hitherto exempt will increase greatly the cost of the average worker’s home and create a serious position for the co-operative building societies in the Commonwealth. In a letter addressed to the Registrar of Cooperative Societies, Sydney, on this subject recently the secretary of the Lidcombe Co-operative Building Society No. 4 Limited, wrote -

The recent application of sales tax to many classes of building materials hitherto exempt has created a serious position in our society.

As you are aware this society has recently completed all formalities necessary and incidental to carrying out its activities. To date some 46 loans have actually been approved by my board and perhaps 16 of these jobs are actually under construction. Another seventy loans will probably be submitted to my board in the next few weeks as the members concerned have not finalized their loan applications although in a number of these cases they have prepared their plans and specifications and secured their tenders.

Where the jobs are already started the member has completed a building agreement with the builder and presumably the burden of sales tax will fall upon the builder . . .

The assumption that the burden of the tax will fall on the builder is wrong, as I shall show later. The letter continued -

But of the remaining 30 cases approved, construction has not been commenced through no fault of the members but due to the necessary delays in preparing the society’s securities and obtaining Government indemnities. The majority of our members are young .men recently married who are endeavouring to establish a home for themselves and it seems to us particularly unjust to, in effect, tax these people an average of about £20 in the establishment of their homes through circumstances entirely beyond their control. My board feels therefore that your department representing the co-operative building society movement as a whole could properly make representation to the federal authorities concerned with a view to securing relief for at least those persons who have applied to the society for loans and through circumstances beyond their control have been forced to wait until completion of the society’s requirements and preparation of Government indemnity and now find that the cost of constructing their building will be in excess of the amount they contemplated finding through the application of sales tax on building materials.

P.S. - Since writing the above a local builder informs me that he was advised yesterday by the Sales Tax Commissioner that section 70

of the Sales Tax Act provides for the adjustment of contracts entered into before the 22nd instant to allow sales tax to be passed on by the builder. If this is the case every member at present building through the society will be affected.

The Minister for Trade and Customs (Mr. Harrison), who has had some experience of building societies, will agree that considerable delays take place before newly-formed building societies are able to function. “When the preliminary meetings of intending shareholders have taken place, application has to be made to the Treasurer for approval under the National Security Regulations to raise the required capital. Application has then to be made to the Registrar of Co-operative Societies for the registration of the proposed society and the Government guarantees provided and submitted to the State crownsolicitor. When these formalities are completed the approval of the Executive Council must be sought. Applications by prospective borrowers have to be held up until all these formalities have been completed. It has been pointed out by responsible officials of building societies that the proposed sales tax on building materials formerly exempt will increase the price of the average worker’s home by from £30 to £40. The whole structure of these societies is based on the previously existing arrangements, and if this bill be passed in its present form, it will operate harshly on the movement. I commend the suggestion of the honorable members for Eden-Monaro (Mr. Perkins) and Maribyrnong (Mr. Drakeford) that committees of the House should be established to deal with draft legislation before it is brought before the Parliament. I realize that it is now rather late in the day to expect the Government to accept major amendments, but I ask the Treasurer to undertake to give consideration to the views that I am submitting.

The imposition of sales tax on building materials will bear very heavily on young married people who are seeking to purchase their own homes, with the intention of rearing families. The best immigrant that this country can have is a healthy young Australian. We should be doing our utmost to encourage family life, and one means to that end is the facilitating of arrangements by which our young people may purchase homes on easy terms. We all are well aware that in totalitarian countries matrimony is subsidized and family endowment practised. This applies particularly to Germany, Japan, and Italy. I have read descriptions of mass marriages in those countries, and they have impressed upon me that the subsidizing of matrimony and the encouragement of parenthood are desirable in our own land. We have only a small population in a large country, but the Government seems determined to discourage marriage and the rearing of large families. We must alter our policy in this regard. Honorable members are well aware that in a country lying not very far to the north of Australia the population is increasing at the rate of 1,000,000 a year. That country is only one-twelfth the size of Australia, but it has a population twelve times greater than ours. We must reverse our attitude on these vital issues, and one step to that end would be the lifting of the sales tax from all building materials, in order to cheapen the cost of constructing dwellings.

Mr FADDEN:
Treasurer · Darling Downs · CP

in reply - I have listened with great interest to the speeches delivered on this bill. Unfortunately, it is impossible for me to give favorable replies to all the representations that have been made. To do so I should need to work a miracle. In the circumstances, I must ask honorable members to have regard to the fact that the two main purposes for which this bill has been introduced are: First, the raising of revenue; and, secondly, the raising of it quickly. In the extraordinary circumstances in which the country finds itself, this course is essential to our safety. I shall not be so foolish as to declare that the bill does not contain anomalies. Every taxing measure contains anomalies. Perfection has not yet been achieved in this regard. But I give honorable members my assurance that if anomalies, injustices and hardships are brought under notice they will be given immediate consideration. Any defects of the measure will he remedied as far as it is humanly possible to remedy them. Inevitably legislation of this description will inflict hurt upon certain sections of the community, hut the Government earnestly desires to minimize, in every way possible, the hurtful effects of this measure. A complete survey was made of the whole financial situation before it was decided to introduce a bill of this description, but as an abnormally large amount of money had to be raised for war purposes, and also for ordinary government activities, the Government was reluctantly forced to conclude that an increase of the sales tax was unavoidable. Some honorable gentlemen have argued that the flat rate system should have been retained. I point out that to obtain the amount of revenue which this bill is estimated to yield, it would have been necessary to increase the flat rate of sales tax from 8^ per cent, to 13^ per cent. The loading of an additional 5 per cent, on goods already heavily taxed would have had serious repercussions in many directions. [Quorum formed.’] A tax of 13£ per cent, on many items of goods in common use would not have been justified in view of the fact that an equal amount of revenue was obtainable by the imposition of differential rates under which nonessential goods could be required to bear a heavier rate of tax.

For some years the list of goods exempt from the sales tax has been .progressively enlarged as the revenue position has improved; but the extraordinary conditions of to-day have made a continuation of that procedure impossible. The Government was unable to see any workable alternative to the policy it has adopted. It is regrettable that certain items have had to be withdrawn from the list of exemptions, but the rate of tax in respect of them will be only 5 per cent., whereas the general rate will be 10 per cent., and the special rate on items that may be said to fall into the category of non-essential goods will be 15 per cent.

The principle of applying a differential rate of sales tax is not new. It is in operation in Great Britain. We are simply following the example, of other countries in this direction.

The honorable member for Darwin (Mr Bell) asked whether the Government had considered the wisdom of applying the tax to the first sale. The experience of other countries in this regard was studied, and the Government concluded that, for reasons which were in its opinion unanswerable, that procedure would be unwise. The proposal to apply a turnover tax was also rejected on account of the pyramidal nature of such an impost. I am quite satisfied that the present proposals, notwithstanding their disadvantages and possible anomalies, are the best that can be submitted, having in mind the need to raise additional revenue expeditiously. Any anomalies will be examined as they are revealed.

Reference has been made during the debate to the effect of the new rate of tax on the working community. The Government determined that two principles should be maintained in connexion with this measure: First, that sales tax should not be imposed on items of the regimen upon which the basic wage is fixed ; and, secondly, that the tax should not be permitted seriously to affect our export industries. A careful examination of the bill will show that these principles have been preserved.

In reply to the representations that have been made in favour of the abandonment of the proposed tax on footwear valued at less than 15s. a pair wholesale, I point out that even here the principle of not taxing items having direct relation to the basic wage, has been preserved to the greatest possible degree. Our total annual sales of footwear in Australia approximate £9,000,000. Of this amount only £4,000,000 will be subject to sales tax. In the period from the inception of this tax until 1936, footwear was subject to this impost, but as revenue became sufficiently buoyant to permit the enlargement of the list of exempt goods, footwear was lifted out of the taxable field. The Government is of the opinion that, even under the new conditions, footwear of the class usually purchased byworking people will not be liable to sales tax.

Mr Makin:

– Does the Treasurer think it is necessary to tax medicines ?

Mr FADDEN:

– Medicines are taxed only in certain circumstances. In reply to the honorable member for Melbourne Ports (Mr. Holloway) who referred to this aspect of the subject, I point out that the raw materials required by the dispensaries of friendly societies and by retail chemists for the dispensing of medicines will ‘be subject to a tax of only 5 per cent. Provision has been made for the complete exemption of medicines supplied by retail chemists and the dispensaries of friendly societies for aged and destitute people. A good deal has been said during the course of the debate about medicines for dogs. Such medicine is exempt under somewhat peculiar circumstances. Provision exists for the exemption of all goods used in the prevention, cure, or eradication of diseases of beasts and livestock. Dogs fall within the legal interpretation of livestock. I intend, however, to give further consideration to this subject in order to ascertain whether a more satisfactory definition of livestock can be drafted which will exclude dogs from the general exemption.

The desirability of exempting this that or the other item from sale3 tax is largely a matter of personal opinion. Under the differential system of taxation I am quite certain that every honorable member would make a list different from that of every other honorable member. The fact must be remembered that the purpose of this measure is to provide additional revenue to meet expenditure inseparable from the unfortunate circumstances that face the country. The sales tax was introduced originally in order to meet the unforeseen circumstances of the depression. This Government has now found it necessary to introduce a differential rate of tax, and also to vary certain principles of the tax, in order to assist to meet the extraordinary cost of the war in which we are now involved. It is not a case of Fadden’s taxes; it is a case of Hitler’s axis and we must measure up to the situation. I have heard honorable members say that a great deal of clerical work will be involved in the administration of the differential rates. Unfortunately that is so, but we are living in times when convenience cannot always be con> sidered. I hope that all honorable members will recognize, as I do, that it is inevitable that there will be anomalies in the measure. There are also anomalies in our income tax provisions. They have been altered year after year without satisfying every one, and we shall find that this will be true also of the sales tax. We must deal with the matter honestly and conscientiously with the determination to iron out the anomalies as they arise.

I was greatly impressed with the representations made by honorable members in favour of exempting books, and I shall submit an amendment to do that. I shall also introduce a measure to exempt wine from sales tax and effect an adjustment to another source of Commonwealth revenue. I should like to meet the wishes of every honorable member who has asked foi either a special exemption or modification of a rate of tax; but it is my duty to obtain the revenue which the country needs and I cannot do that and, at the same time, satisfy the wishes of all honorable members. I ask the House to face the situation, inescapable as it is, and assist me to pass the bill in order that we may make the greatest possible effort to win the war.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 and 2 agreed to.

Progress reported.

page 807

ADDRESS-IN-REPLY

Presentation to the GovernorGeneral.

Mr SPEAKER (Hon W M Nairn:

– Accompanied by honorable members, I, this day, waited upon His Excellency the Governor-General, and presented to him the Address-in-Reply to His Excellency’s Speech on the occasion of the opening of the first session of the Sixteenth Parliament, agreed to by the House of Representatives on the 10th December, 1940. His Excellency was pleased to make the following reply: -

Mr. Speaker,

I desire to thank you for the AddressinReply, which you have just presented to me.

It will afford me much pleasure to convey to His Most Gracious Majesty the King, the message of loyalty from the House of Representatives oi :he Commonwealth of Australia to which the Address gives expression.

page 808

TARIFF PROPOSALS 1940

Customs Tariff Amendment (No. 2) ; Customs Tariff (Canadian Preference) Amendment (No. 1) ; Customs Tariff (Exchange Adjustment) Amendment (No. 1) ; Excise Tariff Amendment (No. 2)

In Committee of Ways and Means:

Mr HARRISON:
Minister for Trade and Customs · Wentworth, · UAP

.- I move - [Customs Tariff Amendment (No. 2).]

That the Schedule to the Customs Tariff 1933-1939, as proposed to be amended by Customs Tariff Proposals introduced into the House of Representatives on the twenty-first day of November, One thousand nine hundred and forty, be further amended as hereinafter set out, and that, on and after the twelfth day of December, One thousand nine hundred and forty, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in pursuance of the Customs Tariff 1933-1939 as so amended. [Customs Tariff (Canadian Preference) Amendment (No. 1).] That the Schedule to the Customs Tariff (Canadian Preference) 1934-1939 be amended as hereinafter set out, and that on and after the twelfth day of December, One thousand nine hundred and forty, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in pursuance of the Customs Tariff (Canadian Preference) 1934-1939 as so amended. [Customs Tariff (Exchange Adjustment) Amendment (No. 1).] That on and after the twelfth day of December, One thousand nine hundred and forty, at nine 0'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, the Schedule to the Customs Tariff (Exchange Adjustment) Act 1933-1939 be amended as follows : - by omitting " 130 (a) " and " 130 (b) (1) (6) " ; by omitting " 289 (a) ". [Excise Tariff Amendment (No. 2).] That the Schedule to the Excise Tariff 1921-1939, as proposed to be amended by Excise Tariff Proposals introduced into the House of Representatives on the twenty-first day of November, One thousand nine hundred and forty, be further amended as hereinafter set out, and that, on and after the twelfth day of December, One thousand nine hundred and forty. Duties of Excise be collected in pursuance of the Excise Tariff 1921-1939 as so amended. The tariff proposals I have just introduced are, for the most part, composed of tariff amendments which were included in tariff proposals introduced in the last Parliament and validated for the period up to and including the 21st February, 1941. It is necessary that these amendments be now re-introduced to enable the duties to continue should Parliament not resume before that date. The only new matter consists of minor drafting amendments to tariff items 122a, 122b, 174m, 93, 291l, and 399. Under the present wording of items 122a or b, any article in which textile or felt was used, other than articles specifically named in the tariff, would become dutiable if the smallest portion of felt or textile were included in the article. The amendment now proposed will rectify this anomaly. The amendment to item 174m 93 relating to vertical drilling machines provides that the maximum speed factor of over 5,000 revolutions a minute shall be an alternative to the other qualifications, whereas, at present, it is additional to the other qualifications. The amendment gives effect to the original intention of the Government. In respect of item 399 - fire brigade and life-saving appliances - the amendment will enable the Minister to prescribe, under the by-law to the item, any type of fire brigade or life-saving appliance, whereas, at present, a strict interpretation of the item, so far as it affects fire brigade appliances, limits tha application of the by-law to ladders, ladder and hose carriages, water towers and woven canvas hose 2 inches in diameter and over. Later developments in fire-fighting equipment such as foam ejectors, self-contained portable fire pumps, &c, can now be provided for. Item 291i is amended by deletion of the proviso. Under the proviso which was incorporated in the tariff in 1930, when the duty was increased on weatherboards and on tongued' or grooved timber, any such timber which was imported before the 20th March, 1930, and which was in licensed customs warehouses on the 31st December, 1930, should be eligible for entry at the duty prevailing before the increase. The stocks of this timber have now been completely cleared through the customs and the need for the proviso no longer exists. Progress reported. {: .page-start } page 814 {:#debate-41} ### TREASURY BILLS BILL 1940 Motion (by **Mr. Fadden)** - *by leave -* agreed to - >That he have leave to bring in a bill for an act to amend the Treasury Bills Act 1914-1915. {: .page-start } page 814 {:#debate-42} ### SALES TAX (EXEMPTIONS AND {: .page-start } page 814 {:#debate-43} ### CLASSIFICATIONS) BILL 1940 *In committee* (Consideration resumed from page 807) : Clauses 3 to 5 agreed to. Clause 6 (Exemptions). {: #debate-43-s0 .speaker-KJQ} ##### Mr JAMES:
Hunter .- The Minister listened attentively to my speech on the second reading of this bill, but in his reply he made no reference to the representations I made on behalf of men engaged in the mining industry. This industry has had no assistance whatever from the Government, but it is entitled to receive at least the same measure of consideration as is given to those other primary industries, which are favoured by exemption from sales tax on agricultural machinery. The coal-mining industry, which has suffered for many years, is to be taxed heavily through imposts on all machinery and apparatus used in mining operations. I am not being parochial by advocating relief for the miners whom I represent in this Parliament. I also advocate the extension of assistance to men engaged in metalliferous mining. Both industries are essential to the welfare of Australia. The coal-mining industry is of particular importance, because its product is used in practically every industry. It is unreasonable that it should be taxed while the other primary industries go free. I believe that farming machinery has been granted exemption merely because a political party in this House is able to put the screws on the Government. The coal-mining industry is at least entitled to know why it cannot obtain any exemptions, when another primary industry is able to secure the exemption of the machinery that it uses. Tools of trade are exempt, yet tax is imposed on explosives and machinery used, in coal-mining operations. The work of coal-mining is largely carried out under contract, which means that the men who undertake the contracts have to incur the expense of purchasing explosives and machinery before they can produce any income. I am quite sure that the Advisory War Council did not realize what was being done when it agreed to the adoption of this schedule. Surely it is not too late to do justice to those who are engaged in the coal-mining industry! The workers in that industry are urged to maintain harmony in it, and to increase production in order that the war effort may be stimulated, yet they are being taxed, not only in this way, but also directly. If the Treasurer will give me the assurance that machinery and all other apparatus used in the industry will be exempt, I shall be quite satisfied. Otherwise I shall be definitely disappointed, because there will be no equity in what is done. It would appear that half a dozen members of the Country party can demand and obtain the exemption of items affecting their industries because the Government is relying on their support; hut because it is not relying on my support, this hardship is inflicted on the industry that I represent. {: #debate-43-s1 .speaker-KX7} ##### Mr WARD:
East Sydney -- I direct attention to the remarks of the Treasurer **(Mr. Fadden)** concerning the decision of the Government as to what foodstuffs should come within the range of this tax. The honorable gentleman said that the Government was actuated by a certain principle in keeping out of the range of the tax all foods covered by the regimen used in fixing the basic wage rate. I think it will be agreed that certain items of food included in the schedule have to be purchased by those who, unfortunately, are obliged to live in rooms, and have not the necessary facilities to prepare ordinary meals, with the result that they have to depend on bottled and canned foods. I refer to pensioners and others who have very small incomes. I suggest that the tax should be reviewed in respect of some of these foodstuffs, with a view to their exemption. {: .speaker-F4T} ##### Mr Fadden: -- I agree to do that. {: #debate-43-s2 .speaker-JPN} ##### Mr BLACKBURN:
Bourke .- I support the contention of the honorable member for East Sydney **(Mr. Ward).** The speech of the Treasurer **(Mr. Fadden)** has made it perfectly clear that, by the exemption of certain foodstuffs, the Government is freeing from this tax not the wage-earner, but the employer, upon whom ultimately the burden of an increased cost of living is placed. If there is to be exemption of foodstuffs which are necessaries of life, the exemption should be carried out consistently; it should not embrace merely those foodstuffs which fall within the family regimen. It must be obvious that those who are not members of households - for example, the single woman who occupies a flat or any other apartment and has to provide for her own needs - consume an inordinate quantity of canned and bottled food. This applies to single persons generally. Therefore, the Treasurer ought to give favorable consideration to the very reasonable proposal of the honorable member for East Sydney for the exemption of these foodstuffs from the sales tax. Clause agreed to. Clauses 7 and 8 agreed to. Clause 9 (Amendment of schedule). {: #debate-43-s3 .speaker-F4T} ##### Mr FADDEN:
Darling DownsTreasurer · CP -- I move - >That all the words after the words " item 35a ", paragraph *g,* be omitted, with a view to insert in lieu thereof the words " sub-items (2) and (3) of item 36 and item 38: " and the following .paragraphs: - "' ($fa) by omitting from item 39 the letters n.e.i.,' (wherever occurring); *" (9b)* by omitting items 40, 41, 42, 43, 44, 45 and 5lB; " The purpose of this amendment is to exclude from exemption item 39 the letters " n.e.i. " - which means, " not covered by any other item or sub-item in this schedule, or by any item or sub-item in any other schedule to this act " - in order to preserve the existing exemption of medicines manufactured and sold by friendly societies, and goods manufactured and sold by dispensing chemists who sell goods exclusively by retail. In order to give effect to this proposal it has been found necessary, for drafting reasons, to subdivide paragraph *g* of clause 9. The new paragraphs *ga* and *gb* are consequential amendments. Amendment agreed to. Amendment (by **Mr. Fadden)** agreed to- >That the figures "51" be omitted from paragraph *(h).* **Mr. FADDEN** (Darling Downs - Treasurer) [5.131. - I move - >That the words "Division XII. and item 95 ", paragraph *j,* be omitted, with a view to insert in lieu thereof the following paragraphs: - " (/<*) by omitting from sub-item (2) of item 81 the word ' pedal ; ' " by omitting Division XII.; *" [jo)* by omitting from paragraph (6) of sub-item (1) of item 91 the words cement, lime, " (/<*) by omitting item 95; *"* *(ie)* by omitting from item .100 the letters n.e.i.,' (wherever occurring);". The purpose of this amendment is threefold - {: type="i" start="i"} 0. To omit the word "pedal" from exemption item 81(2) of the first schedule, in order to exempt wireless transceivers of all types acquired by or for the Australian Aerial Medical Services. At present the organization enjoys the exemption of wireless pedal transceivers, but as the pedal transceiver is being superseded by an improved model the desire is to exempt transceivers of all types acquired by that organization for the benefit of outback residents. 1. To omit the words "cement and lime " in item 91 of the first schedule, in order to exclude from exemption paper bags for the marketing of cement and lime. Item 91 relates to the exemption of containers for exempt goods, but as cement and lime have now been brought into the taxable field at 5 per cent., it is necessary to exclude those goods from the item. 2. To omit the letters " n.e.i. " from item 100, in order that the exemption applicable to small manufacturers - those whose sales of goods do not exceed £1,000 - shall be preserved. If the term " n.e.i. " were not excluded, the exemption would not apply in respect of the small manufacturers of any goods specified in the second schedule or the third schedule, and it would not be economic for the department to register such persons. In order to give effect to these proposals, it is necessary, for drafting reasons, to sub-divide paragraph ; of clause 9. The new paragraphs *ja, jb,* *jc,* *jd* and *je* are consequential amendments. Amendment agreed to. Amendments (by **Mr. Fadden)** agreed to- >That after paragraph *(q)* the following words be inserted: - " (</o) by omitting from sub-item (3) of item 120, the words 'covered by sub-item (1) of this item ';" > >That sub-item (3) of item 15 of proposed second schedule be omitted. > >That item 23 of proposed second schedule be omitted. Amendment (by **Mr. Fadden)** proposed - >That paragraph ((i) of sub-item (1) of item IS of proposed third schedule be omitted with a view to insert in lieu thereof the following paragraph: - "(d) devices for practising games, sports, or exercises; but not including clothing and footwear." {: #debate-43-s4 .speaker-JPN} ##### Mr BLACKBURN:
Bourke .- This morning I mentioned the case of the person who, under various corporate names, carries on the business of manufacturing footwear and also of retailing it. I have in mind one person who runs several manufacturing businesses, and also has a large retail business in Melbourne in which he sells his own products. This person can invoice the footwear he. manufactures to his retail business at any price he chooses. By invoicing it at less than 15s. a pair wholesale, he will escape sales tax. How are other people in the trade to be protected against unfair competition of that kind? {: #debate-43-s5 .speaker-JOQ} ##### Mr BECK:
Denison -- I have no desire to embarrass the Government, but I believe that an excellent case was put up to-day by those who have discussed the exemption of footwear, and the Treasurer should give their remarks, more consideration. Probably the only way to get anything done would be to move an amendment, but I do not want to embarrass the Government by doing that. The argument of the Treasurer **(Mr. Fadden)** is that, by limiting the sales tax on footwear to such as has a wholesale value of 15s. and under, he is refraining from taxing an item in the cost of living regimen. If that is his reason, why put the tax on sox, ties, hats and other items of clothing which also are included in the cost of living regimen? "We who disagree with the Government's proposal have advanced an alternative one which would yield more revenue, but it is not being given fair consideration. {: #debate-43-s6 .speaker-F4U} ##### Mr FORDE:
Capricornia .- This matter of footwear is deserving of further consideration. It is an anomaly that, while boots are exempt if the wholesale price is below 15s., slippers of any value are to be taxed. According to the *Year-Booh,* 8,200,000 pairs of slippers were manufactured in Australia last year, as against 14,000,000 pairs of boots and shoes. Slippers are worn by all classes of the community, but particularly by the working classes. **Mr. Maloney,** the general secretary of the Federated Boot Association in New South Wales, has told me that in industrial areas a great many housewives wear slippers, not only in the house, but also when they go out shopping. I should like the Minister to accept an amendment providing that slippers, the wholesale price of which is below 5s., should also be exempt from sales tax. If there is any justification for exempting lower-priced boots, and I believe there is, there is equal justification for doing likewise with regard to slippers. The Government seems to be of the opinion that slippers are a luxury item, but that is not so. They are worn very largely by the working classes because they are cheaper than shoes. If the Treasurer **(Mr. Fadden)** accepted my amendment, it would not cost a great deal. The wholesale price of slippers ranges from about 2s. 3d. to 7s. or 8s. a pair, so that 5s. is a fair average. I have been informed by the secretary of the Federated Boot Employees' Union that 20 per cent, of his members in New South Wales are engaged in the manufacture of slippers. {: #debate-43-s7 .speaker-BV8} ##### Mr CALWELL:
Melbourne .- I support the representations of the honorable member for Bourke **(Mr. Blackburn)** and the Deputy Leader of the Opposition **(Mr. Forde)** and urge the Treasurer to give them serious consideration. If he is unable to give a decision now, I ask him to keep the matter in mind with a view to removing anomalies at a later stage. I appreciate the way in which the Treasurer has listened to the representations of honorable members, and attempted to meet them as far as possible. I believe that the matters brought forward by representatives of the boot trade employees are particularly worthy of consideration. The Treasurer should also endeavour to meet the objection of the honorable member for Bourke regarding those persons who both manufacture and retail footwear. It is not right that they should be placed in a position to compete unfairly against others. {: #debate-43-s8 .speaker-KJQ} ##### Mr JAMES:
Hunter .- I have asked that machinery and equipment used in the mining industry be exempt from sales tax, and I again urge the Minister to give consideration to my request. Pit boots are an important item of equipment. They are specially constructed, and cost about 21s. to 25s. retail, and 17s. 6d. wholesale. The miners buy them through their own co-operative stores, which are mutual benefit societies; their profits are distributed among the members. This tax upon footwear is unjustified. Surely the Labour party's representatives on the Advisory War Council were not aware that such a provision was included in the bill. Whilst the many requirements of the rural industries are exempt, the measure inflicts severe penalties upon the mining industry. {: .speaker-KLL} ##### Mr Makin: -- The council did not consider the schedule. {: .speaker-KJQ} ##### Mr JAMES: -- Then the Labour party is justified in repudiating the compromise between the Government and the Opposition. The honorable member for Moreton **(Mr. Francis),** the honorable member for Robertson **(Mr. Spooner),** and honorable members representing Tasmanian constituencies will have great difficulty in explaining to miners in their electorates their acceptance of this provision. {: #debate-43-s9 .speaker-F4T} ##### Mr FADDEN:
Darling DownsTreasurer · CP -- The honorable member for Hunter **(Mr. James)** has taken an unnecessarily serious view of this proposal. Actually the position is not nearly so harsh as he believes. I am quite prepared to listen sympathetically to representations made by honorable members, in order to avoid, as far as possible, imposing unnecessary hardships upon any particular class. The proposal regarding slippers calls for some adjustment, though I cannot accept the suggestion of the Deputy Leader of the Opposition **(Mr. Forde).** Whereas the honorable gentleman estimated the minimum price of slippers to be 5s. a pair, the average price is 2s. 9d. If his proposal were accepted the Government would lose a substantial amount of revenue. {: .speaker-F4U} ##### Mr Forde: -- Will the Treasurer have an appropriate amendment inserted when the bill is considered by the Senate? {: .speaker-F4T} ##### Mr FADDEN: -- No. I have certain ideas about the sales tax, which I propose to place before honorable members later in the sitting. The honorable member for Bourke **(Mr. Blackburn)** referred to the possibility of manufacturers of footwear evading the payment of sales tax. The Commissioner of Taxation has ample power under section 18 (3) *a* to amend the sale price of an article to a reasonable figure, if he considers that it is not fair, or that it is a fictitious wholesale value. The penalties for evasion are sufficiently severe to deter even the most audacious manufacturer from attempting to place a false value upon footwear. The act is efficiently policed, and the possibilities conjured up by the honorable member are the subject of constant vigilence. {: #debate-43-s10 .speaker-JWT} ##### Mr FRANCIS:
Moreton ,- I appreciate the assurance of the Treasurer **(Mr. Fadden)** that he will review the decision to increase the sales tax upon mining machinery. I now ask him to give sympathetic consideration to the claims of fishermen for the exemption of such equipment as nets, lines, hooks, boats and crayfish pots. Australian fishermen work long hours under most hazardous conditions for a very poor return, and their request is not unreasonable. {: #debate-43-s11 .speaker-10000} ##### The CHAIRMAN: -- I remind the honorable member that the committee is at present considering the subject of footwear, not fishing tackle. {: #debate-43-s12 .speaker-KJQ} ##### Mr JAMES:
Hunter .- I am far from satisfied with the answer which the Treasurer **(Mr. Fadden)** gave to my representations for the exemption of footwear. I now ask the honorable gentleman whether he will give effect to his undertaking to exempt explosives for use in mines. {: .speaker-10000} ##### The CHAIRMAN: -- Order ! The honorable member is not in order in discussing explosives. Amendment agreed to. {: #debate-43-s13 .speaker-F4U} ##### Mr FORDE:
Capricornia .- What amount of revenue does the Treasurer **(Mr. Fadden)** expect to collect this year from the sales tax upon ice? Foodstuffs generally have been exempt, but ice which protects food is subject to the tax. This imposition will place another burden upon workers, because they purchase large quantities of ice. Persons in receipt of moderate and high incomes have refrigerators. Will the Minister favorably consider the advisability of exempting ice? {: #debate-43-s14 .speaker-F4T} ##### Mr FADDEN:
Darling DownsTreasurer · CP .- Sales of ice amount to about £S40,000 per annum. Whilst the request of the Deputy Leader of the Opposition **(Mr. Forde)** will receive serious consideration, I remind him that if we exempt a number of items, each of similar magnitude, we shall derive no revenue at all from sales tax. As I previously indicated, I shall later make an announcement upon the sales tax which, I think, will satisfy most honorable members. {: #debate-43-s15 .speaker-F4U} ##### Mr FORDE:
Deputy Leader of the Opposition · Capricornia -- Representations have been made to the Treasurer **(Mr. Fadden)** by the dental profession that the tax on materials and equipment used by dentists should be applied to their wholesale value at the source and not to their value when they leave the retailer's hands. An investigation will reveal that the most generous estimate of the yield from item 22 would not be more, than £2,000. To obtain that comparatively insignificant amount it will be necessary for all dentists to register under the act. Not only will the tax obtained be absorbed in administrative costs, but also those who will come within this extension of the tax field will be involved in administrative expenses aggregating more than the additional yield. It is clear that the amendment of the act broadening the definition of a manufacturer was never intended to relegate the members of a profession who, in the performance of their work, make an artificial restoration of the physical functions of some part of the human system, to the status of mere manufacturers. If that was the intention we would have to regard as a manufacturer those who by artificial means restore the facial features or physical extremities that have been destroyed either by disease or by accident. To describe a dentist as a "manufacturer " is, on the face of it, absurd. There are two ways in which this difficulty can be dealt with; first, by the inclusion of the necessary words to exempt a dentist from the definition of a manufacturer, and, secondly, by a direction from the Minister that, in the administration of the act, dentists shall not be regarded as manufacturers. I trust that the Treasurer will give this matter careful consideration. {: #debate-43-s16 .speaker-F4T} ##### Mr FADDEN:
Treasurer · Darling Downs · CP -- The representations made by dentists in regard to the tax on dental instruments, appliances and materials used in the preparation of artificial dentures have been kept in mind. As I told the deputation of dentists which waited on me in connexion with this matter, the problem can be overcome by administrative action. I give an assurance to the Deputy Leader of the Opposition **(Mr. Forde)** that his representations will be sympathetically considered by the Government. {: #debate-43-s17 .speaker-JWT} ##### Mr FRANCIS:
Moreton .- I ask the Treasurer to give sympathetic consideration to the representations that I have made in regard to the tax on fishing boats, crayfish pots, engines for use in the fishing industry, fishing nets and netting. The fishing industry is of great importance and everything within reason should be done to encourage it. Unfortunately, it has languished for many years because no definite plans have been made for its development. {: #debate-43-s18 .speaker-F4T} ##### Mr FADDEN:
Treasurer · Darling Downs · CP , - I am aware of the difficulties of the fishing industry. I shall look into the matter in the light of the representations made by the honorable member, and ascertain to what extent, if any, relief can be afforded. {: #debate-43-s19 .speaker-BV8} ##### Mr CALWELL:
Melbourne .- In the third schedule, item 10, sub-item 9, provision is made for the imposition of sales tax on toilet and bath soap, bath salts and foam preparations. Does the Treasurer **(Mr. Fadden)** consider that a tax of 15 per cent, is a reasonable impost on ordinary toilet soaps used in almost every household to-day, and costing from 3d. to 4d. a cake? I believe that when this sub-item was drafted the officials advising the Minister had in mind the more expensive toilet soaps. The general standard of cleanliness in the community has risen greatly in recent years. As a Commissioner of the Melbourne and Metropolitan Board of Works, I know that the average daily consumption of water *per capita* in the metropolitan area of Melbourne has risen from 50 to 70 gallons in the last ten years. The introduction of hot water systems and the provision of public baths by municipal authorities have contributed to a large, extent to this increase, {: .speaker-JPN} ##### Mr Blackburn: -- Does the honorable member regard Lifebuoy soap as a toilet soap ? {: .speaker-BV8} ##### Mr CALWELL: -- I do not know if Lifebuoy is regarded as a toilet soap, but many other brands of soap sold at the same price are placed in that category. Soap as a cleansing agent is in much the same class as toothpaste; yet toothpaste is taxed at only 10 per cent. If the Treasurer must impose a tax of 15 per cent, on toilet soap because of the exigencies of the moment, perhaps he will give an assurance that, as soon as circumstances permit, he will reduce the tax on this sub-item to 10 per cent. I commend the suggestion of the honorable member for West Sydney **(Mr. Beasley)** that a committee of this House be appointed to advise the Treasurer during the recess on phases of the operation of the sales tax act. The committee system has been instituted with very satisfactory results in connexion with the proposed war-time profits legislation, and might very well be extended. {: .speaker-F4T} ##### Mr Fadden: -- I shall consider the honorable member's suggestions. Amendment (by **Mr. Fadden)** agreed to - >That in sub-item 1, item IS of proposed third schedule the word " and " first occurring be omitted with a view to insert in lieu thereof the word " or ". {: #debate-43-s20 .speaker-JWT} ##### Mr FRANCIS:
Moreton .- During the second-reading debate on this bill I dealt at some length with the proposed tax on confectionery and the like. I rise now to ask, not for the omission of this item, but for its reclassification into the 10 per cent, group. As much of the raw materials used by the confectionery manufacturing industry is supplied by primary producers sympathetic consideration should be given to this request. {: #debate-43-s21 .speaker-F4T} ##### Mr FADDEN:
Treasurer · Darling Downs · CP -- The representations made by the honorable member will receive sympathetic consideration. Honorable members will realize, however, that the Government must foe guided by the advice of its officials. I would like to correct a misapprehension that appears to exist that confectionery comes within the category of luxury goods. That is not the case. The items included in the 15 per cent, category are not necessarily luxury goods, though they are of a less essential nature than those included in the 10 per cent, category. {: .speaker-KMZ} ##### Mr Martens: -- They are . not everyday necessaries. {: .speaker-F4T} ##### Mr FADDEN: -- They are, if not nonessential in time of war, at least less essential than the items included in the 10 per cent, category. {: .speaker-JWT} ##### Mr Francis: -- Will the Treasurer reconsider his decision to impose sales tax on confectionery lines selling for Id., 2d., 3d. and 6d. ? {: .speaker-F4T} ##### Mr FADDEN: -- I shall look into the matter in the light of the representations made by the honorable member. Amendment (by **Mr. Fadden)** proposed - >That in sub-item (2), item 20, of proposed third schedule the following words be added, " of a kind used for household purposes ". {: #debate-43-s22 .speaker-JY7} ##### Mr DUNCAN-HUGHES:
WAKEFIELD, SOUTH AUSTRALIA · UAP .- Will the Treasurer define the position in relation to both public and private hospitals? Every body knows that big public hospitals and charitable institutions have fairly elaborate laundry establishments, but I do not know whether they can be classed as " industrial ". The equipment may possibly be classed as of the kind used for household purposes. {: #debate-43-s23 .speaker-F4T} ##### Mr FADDEN:
Darling DownsTreasurer · CP -- All goods bought for public hospitals are exempt from the sales tax. Amendment agreed to. Amendment (by **Mr. Fadden)** agreed to - >That in item 25 of proposed third schedule the words "printed matter viz. - "be omitted. Clause, as amended, agreed to. Clause 10 agreed to. New clause 11. Motion (by **Mr. Fadden)** agreed to - >That, after clause 10, the following newclause be inserted: - " 11. Notwithstanding anything contained in this or any other act, where any registered person is required to pay sales tax in respect of the sale by retail of goods covered by any item or sub-item in the schedule to the principal act, which were purchased or imported by him, prior to the commencement of this act, without the quotation of his certificate, sales tax shall not be payable on so much of the sale value of those goods as exceeds the amount which, in the opinion of the Commissioner, would be the fair market value of those goods if sold by that person by wholesale. Title agreed to. Bill reported with amendments; report *- by leave* - adopted. {:#subdebate-43-0} #### Third Reading **Mr. FADDEN** (Darling Downs- Treasurer) [6.4]. - *by leave* - I move - >That the bill be now read a third time. The Government appreciates the active co-operation of honorable members in giving such an expeditious passage to this bill. The measure will not he a happy monument to any of us, for we all regret the circumstances which have made necessary these increases of 'the rate of sales tax. However, the gravity of the situation of our country has made the introduction of the bill absolutely necessary. I was much impressed by some of the speeches delivered during the secondreading debate. The honorable member for West Sydney **(Mr. Beasley)** suggested that a committee of honorable members, representative of all parties, should be appointed to examine the incidence and probable effects of differentiated rates of sales tax. The Leader of the Opposition **(Mr. Curtin)** also mentioned the matter to me this afternoon. In view of what I have learned of the beneficial outcome of the work of the committee appointed to consider the draft bill for the imposition of the proposed war-time company tax, I believe that substantial benefit might follow a similar examination of this measure. The Prime Minister **(Mr. Menzies)** has requested me to announce that a special committee of representatives of all the political parties will be appointed to examine and report upon this bill, particularly in relation to anomalies and the effectiveness of our sales tax machinery. I hope that the work of this committee will be as satisfactory as that of the committee which considered the draft War-time Company Tax Bill appears to have been. Question resolved in the affirmative. Bill - *by leave* - read a third time. {: .page-start } page 820 {:#debate-44} ### WINE EXPORT BOUNTY BILL 1940 Motion (by **Mr. Harrison)** - *by leave* - agreed to - >That he have leave to bring in a bill for an act to amend the Wine Export Bounty Act 1939. Bill brought up and read a first time. *Sitting suspended from 6.9 to 8 p.m.* {: .page-start } page 820 {:#debate-45} ### NORTHERN TERRITORY (ADMINISTRATION) BILL (No. 2) 1940 Bill received from the Senate and (on motion by **Mr. Collins)** read a first time. {: .page-start } page 820 {:#debate-46} ### COMMONWEALTH PUBLIC SERVICE BILL 1940 Bill received from the Senate and (on motion by **Mr. Collins)** read a first time. {: .page-start } page 821 {:#debate-47} ### BILLS RETURNED FROM THE SENATE The following bills were returned from the Senate without amendment: - States Grants Bill 1940. Defence Equipment Bill 1940. {: .page-start } page 821 {:#debate-48} ### PUBLIC WORKS COMMITTEE Message received from the Senate acquainting the House of Representatives that the following senators had been appointed members of the Parliamentary Standing Committee on Public Works : - **Senator Brand, Senator Cooper** and **Senator Lamp.** {: .page-start } page 821 {:#debate-49} ### WAR-TIME (COMPANY) TAX {:#subdebate-49-0} #### Committee's Proposals {: #subdebate-49-0-s0 .speaker-F4T} ##### Mr FADDEN:
Darling DownsTreasurer · CP -- *by leave* - I lay on the table of the House the following report of the committee which was appointed to inquire into the proposal to impose a special war-time tax on companies: - 11th December, 1940. The Right Honorable the Prime Minister, We the signatories to this letter, being the members of the committee appointed to inquire into the proposal to impose a special war-time tax upon companies, beg to report that we have examined the proposal and now report and recommend as follows : - {: type="1" start="1"} 0. That private companies as defined in the Income Tax Assessment Act be removed from the scope of this tax. 1. That the Income Tax Assessment Act be amended to tax a private company upon 100 per cent. of its undistributed income instead of upon 75 per cent. of that income as at present provided by the law. 2. That all public companies be required to pay the greater of the following amounts, viz. - {: type="a" start="a"} 0. the War-time (Company) Tax, as computed under the bill drafted for that purpose ; or 1. A super-tax of1s. in the £1 on taxable income in excess of £5,000, as computed under the Income Tax Assessment Act. (Sgd.) A. Fadden. {: type="A" start="J"} 0. P. Abbott. 1. W. Colics. {:#subdebate-49-1} #### John J. Dedman {: type="A" start="W"} 0. A.jolly. 1. Mulcahiy. 2. J.riordan 3. H..scullen 4. S. Spooner. The recommendations were unanimously agreed to by the committee, and the Government proposes to bring forward the necessary amendments to implement them during the third-reading stage of the Income Tax Assessment Bill 1940. {: .page-start } page 821 {:#debate-50} ### WIRE NETTING BOUNTY BILL 1940 {: #debate-50-s0 .speaker-KNX} ##### Mr HARRISON:
Minis ter for Trade and Customs · Wentworth · UAP -- I move - >That the bill be now read a second time. The object of the bill is to restore payment of bounty on the production of wire netting in Australia. Prior to the 3rd May, 1940, bounty was payable at the rate of 9s. 7d. a ton but, owing to the definition of " duty of customs " in section 3 of the original 1939 act, the imposition of special war duty under the Customs Tariff (Special War Duty) Proposals which came into operation on that date, had the effect of cancelling the bounty previously payable. In section 8 of the original act the rate of bounty is prescribed at 9s. 7d. a ton, but there is a provision that, if the rate of duty be increased, such reduction shall be made in the rate of bounty as is equivalent to that increase. The rate of duty under the intermediate and general tariffs prior to the 3rd May, 1940, was £5 a ton; the special war duty proposals imposed an additional duty of 10s. a ton. As the increased duty was more than the rate of bounty, the payment of bounty ceased. Wire netting is free of duty under the British preferential tariff, and the special war duty would not apply to any importations coming under that tariff. Actually, wire netting is not being imported to Australia, and consequently no special war duty is being collected. Thus the increase of duty is merely theoretical, and does not give any advantage to Australian manufacturers. The Tariff Board's report of the 30th May, 1939, expressed the opinion that the bounty could be withdrawn without detriment to the wire-netting industry, but the Government decided to continue the bounty in order to afford the Western Australian Netting and Wire Company Limited a reasonable opportunity to establish its operations on a firm footing. This company suffers the disadvantage of having to pay full freight on wire rods procured from the eastern States and to sell the finished product at the common c.i.f. price, which applies to all main cities in the Commonwealth. Without the bounty, the position of this company would be gravely affected. Moreover, the Government holds the opinion that it is sound and expedient, for national reasons, to encourage manufacture, wherever possible, in more than one State, especially when the State concerned is far distant from other sources of Australian supply and is a substantial user of the product being manufactured. Clause 2 of the bill makes provision for the amendment to operate as from the 3rd May, 1940, the date on which the special war duty proposals came into operation. Clause 3 amends the definition of " duty of customs " by excluding any duty expressed by a customs tariff or customs tariff proposal to be imposed as a special war duty of customs. The definition as amended will be - " duty of Customs " means the duty of Customs chargeable in pursuance of any Customs Tariff or of any Customs Tariff proposal introduced into the House of Representatives, but does not include any duty expressed by the Customs Tariff or Customs Tariff proposal to be imposed as a special war duty of Customs. I am sure that the bill will meet with the approval of honorable members. {: .speaker-JWT} ##### Mr Francis: -- Will it cause an increase of the price of wire netting? {: .speaker-KNX} ##### Mr HARRISON: -- No. {: #debate-50-s1 .speaker-F4U} ##### Mr FORDE:
Capricornia .- As this bill is designed to assist a small industry in Western Australia, the Opposition will support its passage. It is a struggling industry and we know from the facts stated by the Minister that it is necessary to pass this legislation in order that the enterprise may be assisted to develop. I should not like to see all of Australia's secondary industries concentrated in one or two States. The policy of the Labour party is to decentralize secondary industries as much as possible. This is of great importance from a defence point of view; if all of our big industries were situated in one or two States they would be vulnerable to onslaughts by any aggressor nation. I am very pleased that this industry has been established in Western Australia. It is a long way from the eastern States to Western Australia to send the finished product. To-day, wire netting is being produced in the factory at Perth and distributed to farms throughout Western Australia where wire-netting fencing is needed by the farmers for protection against pests which make successful cultivation almost impossible. The same thing applies to Queensland, from which I come, although we are not so fortunate there as to have an industry of this kind. I am hopeful, however, that it will be possible to establish a factory in the near future, because I believe that the smaller States will become more protectionistminded if new secondary industries be established within their borders. In the past, the citizens of those States have had a more or less anti-protectionist outlook due to the fact that they have had very few secondary industries. A change is taking place, however. South Australia has developed a number of heavy industries, and recently a branch of the firm of Davies Coop and Company Limited, employing 500 or 600 persons, was established there. This industrial development must have a very important bearing upon the fiscal outlook of the people of the smaller States. With the acquisition of a few more secondary industries by Western Australia, the views of honorable members representing that State will probably change from support of a low tariff policy to support of adequate and effective protection. As happened when they asked for 300 per cent, protection for their tobacco industry, they will be solidly in favour of high tariffs. The bill will enable the wire-netting industry in Western Australia to expand and develop, and it has the support of the Opposition. {: #debate-50-s2 .speaker-JS9} ##### Mr BREEN:
Calare .- I have no doubt that the establishment of the wire-netting industry in Western Australia will be advantageous to Australia because it promotes decentralization, but I should like to know a little* more about the share holdings of this company. I recall the time when the Newcastle works of Rylands Brothers (Australia) Proprietary Limited and Lysaght (Australia) Proprietary Limited were able to pay their wages bill out of the bounty assistance given by the Commonwealth. When those industries were firmly established, there was no suggestion to return to the Commonwealth any of the profits that were made by the Broken Hill Proprietary Company Limited, as the result of the monopoly of "wire manufacture that it enjoyed. At the present time, the rods provided for the wire drawing, weaving, and galvanizing in the wire-netting works of John Bylands, Newcastle, and some of the rods for Lysaght's works in Sydney are supplied by the rod mill of the Broken Hill Proprietary Company Limited, Newcastle. I understand that that mill cannot supply sufficient rods for the wire-drawing department of Bylands, because it is not working full time. What is behind this matter? If the wire is woven, and galvanized or blackened, and sent to Western Australia at the present time, a certain freight has to be paid. The Broken Hill Proprietary Company Limited is making huge profits. If, by reason of the establishment of these works in Western Australia, it be given practically free transport on the rods sent across to that State, which it will receive in the form of a rebate of *£6* a ton, it will thus be enabled to make still greater profits. I know something about the wire.netting industry in Newcastle, because I worked there for years. At the present time, there is a shortage of steel in Australia, and the Broken Hill Proprietary Company Limited cannot supply sufficient to keep Australian industries going. Is this the appropriate time to establish in the western portion of the continent a wire-drawing plant or is it considered that it would not be in the best interests of this country to import rods from Canada or from some other portion of the Empire, if that were possible? In South Australia blast furnaces, open hearth furnaces, blooming mills, and perhaps a wire-drawing mill, have been established. If this bounty be given to the weaving mills and galvanizing mills of Western Australia, because the rods have to be transported the long distance from the eastern States, the establishment of a wire-drawing mill in South Australia would enable the rods to be made in that State and transported only about onehalf of the distance. .Such a -mill would derive the full benefit of the bounty, because its rods would be used in the wire drawing and weaving department of the works being established in Western Australia. I should like to know a little more concerning the relationship of the company established in Western Australia to the Broken Hill Proprietary Company Limited. {: #debate-50-s3 .speaker-KX7} ##### Mr WARD:
East Sydney .- It seems rather peculiar that the Government should propose to grant a bounty to any secondary industry at the moment. Judging by the declared profits, all companies are able to carry on without any direct governmental assistance. I should be surprised to learn that any company engaged in any branch of the steel manufacturing trade is in need of financial assistance from the Commonwealth. The Minister for Trade and Customs **(Mr. Harrison),** in his introduction of this measure, mentioned particularly the wire-netting company in Western Australia. 1 well recollect that when this matter came before the Parliament a few years ago the assurance was given that the wire-netting company of Western Australia had no connexion with Broken Hill Proprietary Company Limited. I do not know whether similar circumstances exist to-day. I take it that this bounty will be paid to only one company producing wire netting. {: .speaker-KNX} ##### Mr Harrison: -- It is intended only for that purpose. {: .speaker-KX7} ##### Mr WARD: -- That may be; but I imagine that any Commonwealth legislation would be effective throughout Australia. {: .speaker-KNX} ##### Mr Harrison: -- Any company earning above a certain percentage of profit would be precluded from receipt of the bounty. Bounty will be payable to all companies except those earning above the specified rate. {: .speaker-KX7} ##### Mr WARD: -- Gan the Minister furnish information with respect to the earning capacity of this company, and the basis upon which the decision will b'1 made in future that it is earning sufficient profit to warrant withdrawal of the bounty? If this company is typical of many other companies, I shall be interested to learn how much actual capital has been invested in the undertaking, what is the amount of watered stock, and exactly what rate of profit is being made on the capital invested. I do not feel disposed at this particular *time,* when burdens are being imposed on all sections of the community, to support the desire of the Government to assist financially a privately-owned secondary industry, particularly one that is engaged in this trade. As the honorable member for Calare **(Mr. Breen)** has said, so far as we know there is no importation of wire netting at the moment. These companies enjoy a monopoly of the wirenetting trade in Australia, and would be able to sell a much larger quantity than they are selling if they were working to capacity. Some of them have orders booked up for six months ahead. If they are able to make profits under these most favorable circumstances, there is no case for the payment of this bounty. I hope that the Government will not persist with the measure. I shall be interested to learn the quarter from which the representations came. Even in ordinary circumstances, the Parliament would need to give the most minute examination to a measure of this kind, before agreeing to it. In existing circumstances, I believe that it should be rejected. {: #debate-50-s4 .speaker-009FQ} ##### Mr CURTIN:
Leader of the Opposition · Fremantle -- The. case for this bill has been put previously to this Parliament, which has approved of a measure having for its purpose the granting of a bounty in respect of the manufacture of wire netting in Australia, on the condition that the company engaged in its manufacture was not earning a profit of more than 6 per cent, on its capital. {: .speaker-KX7} ##### Mr Ward: -- On what capital? {: .speaker-009FQ} ##### Mr CURTIN: -- On the capital used in the business. {: .speaker-KX7} ##### Mr Ward: -- What constitutes capital? {: .speaker-009FQ} ##### Mr CURTIN: -- The question as to whether there should be ia distinctive principle in respect of the amount of capital upon which profits should be measured, as against the general practice of the Parliament, should not be taken into account on this particular bill. {: .speaker-KX7} ##### Mr Ward: -- Why not? {: .speaker-009FQ} ##### Mr CURTIN: -- For the reason that all bounties approved by this Parliament, which have enabled wire-netting industries to be established in New South Wales, have been given without regard even to the limitation of profit on actual capital, as is set out in this bill. {: .speaker-KX7} ##### Mr Ward: -- We are not responsible for that. {: .speaker-009FQ} ##### Mr CURTIN: -- This party has always supported, either by the imposition of a duty or by the payment of a bounty, the establishment of secondary industries in Australia. {: .speaker-KX7} ##### Mr Ward: -- This is already established. {: .speaker-009FQ} ##### Mr CURTIN: -- This industry in Western Australia is not established; it is in process of establishment. I remind the House, and I think it is fair to remind the country also, of the relationship of this industry and of Western Australia to the general policy of protection in Australia. I do so because I have stood for that policy. {: .speaker-JSC} ##### Mr Brennan: -- The bounty was suspended. {: .speaker-009FQ} ##### Mr CURTIN: -- The bounty was suspended on the recommendation of the Tariff Board, because it was presumed that the duty imposed would afford sufficient protection to the company. But there is no competition from overseas at the present time. No ships are coming to Australia, no duty is being collected, and the company has now to obtain the whole of its raw material from the Broken Hill Proprietary Company Limited, as it had to do previously. Formerly it was not able to procure raw material from other countries because of the operation of our general tariff policy. The extraordinary position existed that the company which is commencing in Western Australia was unable to draw on the iron supplies of the world in the early stages of manufacture, whereas the companies operating in the eastern States could purchase raw material from Germany and Great Britain. In the early stage of the foundation of this industry, this Parliament sought to use tariff policy in order to assist the development of the iron and steel industry, and the wire-netting industry in particular. As the result of our policy, a factory in Western Australia which depends on the eastern States for any part of its raw material has to pay in freight charges upon such raw materials more than five times as much as it would pay were it able to get that raw material from Europe. The policy of my party in respect of Australian shipping, and the development of an Australian mercantile marine, has imposed very heavy costs on both the primary and the secondary industries of Western Australia. I have defended that policy in the larger interests of the complete economy of the nation, and have said that it was the duty of this Parliament to equate, by other measures, the economic burdens which protection as a whole had imposed upon the more distant, more sparsely populated, and least developed parts of the Commonwealth. {: .speaker-L08} ##### Mr Rosevear: -- Have not those sections of the Navigation Act which were considered injurious been suspended? {: .speaker-009FQ} ##### Mr CURTIN: -- No; the suspension relates solely to the tourist traffic to Tasmania, and does not cover the carriage of goods. I am not criticizing the policy of this country in respect of protection, but am merely seeking to adjust it, so that the whole of its advantages will not be concentrated in one or two parts of this continent. For a period of years, the farmers of Western Australia paid more for wire netting than did the farmers of New South Wales or Victoria, the reason being that the cost of freight from the place of manufacture to Western Australia was far greater than from the place of manufacture in New South Wales to the place of use in that State or in Victoria; that is to say, the shipping cost to Western Australia, as the result of the production of wire netting in .Sydney and Newcastle, was far higher than was the cost of delivery in Victoria and New South Wales. Shipping cost is the real explanation. The people of Western Australia were unable to import wire netting from other countries because of our general fiscal policy, which was designed to keep out of Australia wire netting manufactured elsewhere than in Australia. Thus the people of Western Australia are dependent on factories in the *eastern States* for their requirements of wire netting, just as they are dependent on the factories of Collingwood for their footwear requirements, and on the factories of Sydney for textiles and the like. Each year, £11,000,000 worth of goods manufactured in other States are consumed in Western Australia, whereas those States take only £1,000,000 worth of all the goods produced in Western Australia. The balance of trade in that respect is definitely against Western Australia. That State is a great market for not only the factories, but also the employers and the workers of the highly developed States of Victoria and New South Wales. This has caused a lack of equilibrium in the national economy. We have had to deal with this because of submissions by certain of the States for special grants over a period of years, in order that some encouragement might be given to the development of secondary industries in those States. The State Governments have given bounties, although the law does not enable them to give bounties as such, they being the prerogative of this Parliament. In Western Australia an Industries Assistance Board was established, and advances were made to this factory. This concern is the result of half a dozen disappointing endeavours to produce wire netting. Two or three companies went into liquidation, and a well-known local citizen, **Mr. Malloch,** set himself the task of attempting to organize the production of wire netting as part of a general service of pumps, machinery and the like, for the farmers of Western Australia. The Government of that State has made a contribution to enable the industry to be soundly established, but it is unable to carry the whole load. The Commonwealth Government, acting wisely in the national interest, which makes it imperative that employment shall be provided in secondary industries in Queensland, South Australia, Tasmania and Western Australia, sought to devise means whereby the struggling infant in the western State might survive." It was felt that the well-established industry in New South Wales, which was capable of paying more than 6 per cent, on capital, ought to be able to continue production without any bounty, but that an enterprise which was not able to earn at least 6 per cent, should be assisted. We know that if a man has £5,000 to invest he looks for two things- - security, and the possibility of profit. In Western Australia the tendency of investors is to put their money into Commonwealth stock at 3f per cent, or 4 per cent, because secondary industries have had such a chequered experience. So far no profit has been earned on the capital invested in the wire-netting manufacturing industry in Western Australia. I am convinced that if all bounties to protected industries which enjoy a monopoly of the Australian market were limited to 6 per cent, there would not be so many of them earning large profits in the eastern States. {: .speaker-JSC} ##### Mr Brennan: -- Some of the States do not receive Commonwealth grants. {: .speaker-009FQ} ##### Mr CURTIN: -- The system of paying Commonwealth grants was devised to enable States, upon which the impact of federal policy falls most heavily, to receive some compensation to enable them to maintain social services and other governmental utilities at approximately the same standard as that which prevails in other States. As its reports show, the Commonwealth Grants Commission refuses to recommend a grant unless and until the claimant State proves that, without the grant, it could not maintain services at approximately the average Australian standard. The Broken Hill Proprietary Company Limited has no interest in the Western Australian enterprise other than to supply it with raw materials, nor have Lysaght's anything to do with it. I believe that if large corporations engaged in the production of steel, or boots, or textiles had at heart the real interest of Australia they would, instead of expanding their existing factories in Victoria and New South Wales, establish branch factories in the other States, thus providing employment in those States where they sell their goods. Hitherto, they have been willing to sell their goods in the other States, but they have not been prepared to provide employment for the people. It is not my intention to vote for high duties in order to make some people rich, and to provide industrial sanctuaries in one or two States. One of the great needs of Australia at the present time is the decentralization of industry and population. It is in every way wrong that we should have more than half of our people cooped up in two great cities, thus contributing to the vulnerability of the country, with its long lines of communications and sparse population. The problem of spread of population is essentially the problem of the distribution of industries. We must provide occupational opportunity for the people, and that must be done, not by concentrating industry, but by distributing it. The Government has done the sensible thing in assisting this industry in Western Australia. There is no need to assist it in other places; it is already established elsewhere. I believe that the price of wire netting to the farmers generally is unnecessarily high, but the farmers of Western Australia have had to pay even more than elsewhere because of their long distance from the manufacturing centres in the eastern States. I regret that any doubt should have been expressed as to the fairness of this measure. This will be one of the few bounties with a limiting provision that, when profits exceed a given figure, the bounty shall cease, thus ensuring that there shall be no profiteering. {: .speaker-L08} ##### Mr Rosevear: -- Does the measure contain any provision to safeguard the workers' industrial conditions? {: .speaker-009FQ} ##### Mr CURTIN: -- There is no such specific provision, hut I can assure the honorable member that the State laws of Western Australia for the protection of workers are as good as those of any other State. For the last fifteen years there has been a Labour Government in office in Western Australia, and rates of pay are not inferior to those in other States. Indeed, one of the difficulties of establishing secondary industries in Western Australia is stated to be that wages are high, and that the Workers' Compensation Act there imposes greater charges on industry than are borne in other States. I give a guarantee to my colleagues that the workers in this industry will be better treated than would be the case if Western Australia were dependent upon the old world for its supplies of wire netting, or had to obtain them from New South Wales. {: #debate-50-s5 .speaker-KMW} ##### Sir CHARLES MARR:
Parkes -- I support the hill, and congratulate the Leader of the Opposition **(Mr. Curtin)** upon having made out a good case for the establishment of another secondary industry in Western Australia. For many years that State has suffered a serious disability because of the lack of secondary industries, its people being compelled to pay high prices for goods manufactured in the Eastern States. When wire netting manufacturers in New South Wales were receiving the bounty, farmers in Western Australia could have imported their supplies of netting more cheaply from overseas. There are two features of this measure which appeal to me - first, the fact that it is proposed to develop a secondary industry in Western Australia, and, secondly, that it represents another advance in the direction of the decentralization of our secondary industries. We should welcome this proposal because we all are anxious to bring about the decentralization of those huge industries at present concentrated in a small area on the Eastern seaboard. {: .speaker-L08} ##### Mr Rosevear: -- Does the honorable member think that the Western Australian company will be able to obtain raw materials from the Broken Hill Proprietary Company Limited? {: .speaker-KMW} ##### Sir CHARLES MARR: -- That will have to be watched. I agree with the honorable member for East Sydney **(Mr. Ward)** that there might be cause for suspicion if the Western Australian company were merely a subsidiary of the Broken Hill Proprietary Company Limited. 1 remember what happened when Rylands, of Five Dock, was endeavouring to compete in the manufacture of galvanized wire netting with Lysaght's of New South Wales, a subsidiary of the Broken Hill Proprietary Company Limited. The Sydney firm experienced great difficulty in getting supplies of raw material. This Parliament should do everything it can to ensure that manufacturing firms in States other than New South Wales obtain adequate supplies of raw materials to enable them to carry on. I remind honorable members opposite that the Labour Government of Western Australia is behind this enterprise, and that should be sufficient assurance for them. It should be our policy to encourage the establishment of secondary industries in every considerable centre of population, thus helping to distribute population. The only possible objection to the present proposal is that it might absorb skilled workmen who could be employed upon the production of war material, and that the money which is to be paid in bounty might be used in our war effort. However, I think that the Leader of the Opposition has proved his case in support of the proposal, I regard this as another step in the expansion of our secondary industries, and I shall always be prepared to support proposals of this kind which this or any other government may bring before Parliament. {: #debate-50-s6 .speaker-JSC} ##### Mr BRENNAN:
Batman .- Apparently this bill wa3 introduced and read a first time in the early hours of this morning, and now the debate on the second reading is proceeding. The honorable member for Parkes **(Sir Charles Marr)** appears to be completely satisfied with the measure, and the Deputy Leader of the Opposition **(Mr. Forde)** did not oppose it; but private members Who have not been so privileged as to have an opportunity to seek advice upon the matter are somewhat in doubt as to the wisdom of expediting the passage of the legislation. I ask the Minister for Trade and Customs **(Mr. Harrison)** to adjourn the debate until to-morrow, in order to give to honorable members a short breathing space in which to examine the implication of the measure. {: .speaker-KNX} ##### Mr Harrison: -- I am sorry, but I cannot agree to the adjournment of the debate at this stage. I do not think that the measure is contentious. {: .speaker-KX7} ##### Mr Ward: -- It is not for the Minister to say whether the bill is contentious. {: .speaker-KNX} ##### Mr Harrison: -- The Leader of the Opposition **(Mr. Curtin)** has made that fact perfectly clear. {: .speaker-JSC} ##### Mr BRENNAN: -- This is almost unprecedented and an extraordinarily high-handed action. Honorable members were driven hard last night. The bill was surreptitiously introduced in the early hours of the morning and no request has been made, until now, for the adjournment of the second-reading debate. Comtroversial matter and important principles are involved in this legislation. I should like to hear the views of the honorable member for Forrest **(Mr. Prowse)** upon it. If he intends to vote for the bill, I should like to know how he will justify his support of a proposal to pay a bounty upon the manufacture of wire netting. Perhaps his attitude is influenced against his usual practice by the fact that the wire netting will be manufactured in Western Australia. {: .speaker-KXT} ##### Mr Paterson: -- The Country party has always preferred a bounty to a duty on wire netting. {: .speaker-JSC} ##### Mr BRENNAN: -- In this instance, the industry has the protection of a duty, and will now enjoy the assistance afforded by a bounty. So far as I am permitted imperfectly to understand the implications of the bill, the bounty was granted originally in anticipation of the importation from Great Britain of raw materials which never arrived. Now, it appears that the bounty is to be re-granted for the special purpose of achieving decentralization of industry by establishing the manufacture of wire netting in Western Australia. {: .speaker-L08} ##### Mr Rosevear: -- The bill contains no provision to protect the interests of the employees. {: .speaker-JSC} ##### Mr BRENNAN: -- My principal objection is that honorable members have had no opportunity to examine the legislation. So far as I am able to recall, the Minister did not inform the House as to the amount of the bounty that will be paid. Mi-. Harrison. - As the maximum annual payment has been fixed at £5,000, the honorable member will see that the bounty is not a big one. {: .speaker-JSC} ##### Mr BRENNAN: -- To those who are accustomed to owe allegiance to a " bounty king that amount seems to be small. However, a serious matter of principle is involved in this legislation. Even the Deputy Leader of the Opposition did not extend to me the courtesy of suggesting that he desired, for certain reasons, to expedite the passage of the bill without discussion or examination. The Leader of the Opposition placed himself in a false position when he spoke so eloquently in support of the special claims of Western Australia. That was unfortunate, because this matter should be studied just as rauch from the standpoint of workers in the electorate of Batman as from the importance of establishing a new industry in Western Australia. The general principle of protection has always been strongly supported by the Labour party and by many honorable members opposite, as some think, to an extravagantextent. {: .speaker-KMW} ##### Sir Charles Marr: -- By only a few. {: .speaker-JSC} ##### Mr BRENNAN: -- The honorable member for Parkes is eminently wellsatisfied with the bill. Has he had any private consultations about its contents? {: .speaker-KMW} ##### Sir Charles Marr: -- No. {: .speaker-JSC} ##### Mr BRENNAN: -- Having regard to the business interests involved, including the Broken Hill Proprietary Company Limited, I must strenuously protest against the continuation of this debate and if my consent be required to facilitate the passage of the bill without discussion at any stage, I shall certainly withhold it. To those who are wedded to the policy of protection, but not to the boosting of the special interests of big business, I look for support. Never in my experience have I known of an instance where, without the courtesy of a personal request to honorable members to facilitate the passage of legislation, a Minister has persisted in carrying the bill through all stages to finality. On many occasions, at the end of a session, the rushing of legislation has been a commonplace experience, and I have repeatedly protested against it. In the circumstances, I must now logically and naturally follow up my protest by impeding, wherever possible, the passage of the bill without actual dissension. {: #debate-50-s7 .speaker-KYI} ##### Mr PROWSE:
Forrest .- Listening to the remarks of the honorable member for Batman **(Mr. Brennan),** one does not wonder at the result of the secession referendum in Western Australia. The Leader of the Opposition **(Mr. Curtin)** declared that the trade balance between the eastern States and Western Australia was in the ratio of eleven to one in favour of the former, leaving the western State with an adverse trade balance of nearly £10,000,000 a year. This unequal condition of affairs has enabled the eastern States to employ their people and to reduce their taxes. Taking advantage of the Navigation Act, the shipping companies have fixed freights for the carriage of goods from Melbourne to Fremantle at a preposterous figure, which exceeds freights on cargoes from New York or London to Fremantle. Commercially Western Australia is more remote from Sydney than London and New York are from the eastern States. Western Australians are also com- pelled to buy in the dearest market in the world, which gives to the eastern States a huge trade advantage. Now, when the payment of a small bounty is proposed in order to enable the establishment of a small industry in Western Australia,, the honorable member for Batman indulges in miserly and unjustifiable criticism of the legislation. Is it any wonder that Western Australians seek to secede from people who are so unreasonable and so ungenerous? I compliment the Leader of the Opposition upon the manner in which he defended, not alone Western Australia, but the general cause of right and justice. The Country party has always held the view that it is preferable to develop an industry by the payment of a bounty than by the imposition of heavy duties. Under the bounty system, the whole of the people, not merely those only who buy the articles, contribute to the assistance that is granted. Such a principle is eminently fair. I heard no " squealing " when Parliament voted to the Broken Hill Proprietary Company Limited and Lysaght's Limited, a bounty on galvanized iron exceeding £600,000. THb bill proposes the payment of a mere £5,000, under certain conditions. {: .speaker-KNX} ##### Mr Harrison: -- The maximum amount that may be paid is £5,000. {: .speaker-KYI} ##### Mr PROWSE: -- This small sum is required to develop an industry in Western Australia. The criticism voiced by the honorable member for Batman makes one disgusted. {: #debate-50-s8 .speaker-KEU} ##### Mr FALSTEIN:
Watson .- Whilst I am in agreement with the statements by the Leader of the Opposition **(Mr. Curtin)** about the importance of the decentralization of industry and the need for the establishment of secondary industries, I consider that the Minister **(Mr. Harrison)** has not been honest with the House. Government Members. - Withdraw ! {: #debate-50-s9 .speaker-KEU} ##### Mr FALSTEIN: -- I withdraw the expression and say that the Minister has not been so frank as he might have been. The honorable gentleman in a very cavalier fashion invited the House to pass a measure providing for the payment of a bounty of £5,000 a year to an industry in Western Australia, without giving to honorable members any information concern ing the capital of the company which is to receive it. He has not given us any details regarding its profits, nor has he supplied the names of its shareholders. The House would have appreciated a plain statement by the Minister of all the facts concerning this company. The honorable gentleman merely told us in his secondreading speech that the bounty would be paid to West Australian Netting and Wire Company Limited. I sought to obtain some details of the company from the files in the Library, but it is not listed on any of the stock exchanges in Australia. If it is good enough for the Commonwealth to provide a bounty of £5,000 a year for a company, surely it is good enough for those who are to receive the proceeds of the bounty to list their company on the stock exchange so that honorable members may acquaint themselves with all the published information concerning it. {: .speaker-JNR} ##### Mr Baker: -- Nobody wants to buy shares in the company. {: .speaker-KEU} ##### Mr FALSTEIN: -- After this bill is passed, "the shares will, no doubt, be rushed. All companies which enjoy bounties provided out of the public purse should be listed on the Stock Exchange. I appeal to the Minister to disclose all the facts in his possession concerning this company. {: #debate-50-s10 .speaker-K9G} ##### Mr JOHNSON:
Kalgoorlie .- I support this bill, which confers a twofold benefit on Western Australia. It encourages the establishment of a secondary industry and provides an opportunity for pastoralists and agriculturists to get cheaper wire netting. Western Australia has a very unfavorable balance of trade with the more prosperous eastern States. The State Government has given a lot of attention to proposals for its rectification. When the Cabinet was last reconstructed, a full-time Minister was appointed to develop and encourage secondary industries in Western Australia. I am therefore glad that a Western Australian secondary industry is to receive the measure of assistance from the National Parliament that is proposed in this bill. Those who have opposed the bill have been somewhat suspicious as to what may be behind it. I have no doubt that the Minister will be able to dispel their doubts. {: #debate-50-s11 .speaker-KNX} ##### Mr HARRISON:
Minister for Trade and Customs · Wentworth · UAP -- Honorable members have complained that I did not advise them that I intended to bring on this measure to-night. This bill has only three clauses, which in the main conform to all the principles espoused by the Opposition from time to time. Its purpose is to protect and develop a secondary industry. Yet division exists in the ranks of the Opposition in regard to it, and protests have been made by honorable members in respect of matters that would have been quite clear to them had they taken the trouble to read the principal act. The wording of the principal act establishes beyond doubt that this industry is not being afforded an opportunity to make large profits and at the same time receive the bounty. The Government has protected this industry in two ways ; it has imposed the high duty of £5 a ton and, secondly, it has provided a bounty; but so that the public shall be protected against exploitation the amount of the bounty is limited to £5,000 in any one year. In addition, the profits that may be made by the recipient of the bounty must not exceed 6 per cent. If the profits exceed that amount the company cannot draw the bounty. {: .speaker-JPN} ##### Mr Blackburn: -- That is not quite correct. {: .speaker-KNX} ##### Mr HARRISON: -- I refer the honorable member to section 5 of the principal act, which provides that the total amount of bounty paid under the act in respect of wire netting produced during any one financial year shall not exceed the sum of £5,000.' {: .speaker-JPN} ##### Mr Blackburn: -- The Minister said that the rate of profit was fixed. {: .speaker-KNX} ##### Mr HARRISON: -- It is fixed at 6 per cent. The principal act gives the Minister the opportunity to determine what shall be regarded as capital used by the company in the making of its profits ; but that power has never been used detrimentally by any Minister. What are the facts? They are that prior to the 3rd May, 1940, the company was enjoying a bounty at the rate of 9s. 7d. a ton, and, but for the imposition of the special war fluty, would still have been enjoying it. That duty exceeded the bounty payable and due to a definition in the principal act, the bounty was automatically cut out. The company is in no way connected with the Broken Hill Proprietary Company Limited. It is a limited company, operated on a very small capital. {: .speaker-JSC} ##### Mr Brennan: -- It is a customer of the Broken Hill Proprietary Company Limited. {: .speaker-KNX} ##### Mr HARRISON: -- It must draw its raw materials from its competitor at prices determined by that competitor and, in addition, it has to pay freight to Western Australia and compete in the open market. The honorable member for Batman **(Mr. Brennan)** should be glad to support a bill which is designed to protect a small industry against a great monopoly. I have been perfectly frank with the House in regard to this company. The Government desires that it shall continue to enjoy the bounty it has always enjoyed, subject to the conditions laid down. Honorable members opposite have spoken of the need to encourage decentralization. I share their views on that subject. They should support the bill because it gives effect to that policy. This is not a contentious measure, and I ask the House to expedite its passage. Question resolved in the affirmative. Bill read a second time. *In committee:* The bill. {: #debate-50-s12 .speaker-KX7} ##### Mr WARD:
East Sydney .- I press the Minister to disclose the information sought by honorable members during the second-reading debate. I am not carried away by the usual flambuoyant speech of the Minister regarding decentralization. We want to know on what basis the Minister will determine what constitutes the capital employed by the company. I was rather amazed to hear the Leader of the Opposition **(Mr. Curtin)** say that if the profits of all companies sharing in bounties had been restricted to 6 per cent, no factories would have been established in Australia. {: .speaker-009FQ} ##### Mr Curtin: -- I did not say that, but it is true, nevertheless. {: .speaker-KX7} ##### Mr WARD: -- I do not challenge the statement other than to say that it indicates the existence of an amazing state of affairs. The Leader of the Opposition also said that certain men invested their money in industry purely for the sake of providing employment. If I had money to invest I would consider a safe return of 6 per cent, a very sound investment. When pressed by the honorable member for Bourke **(Mr. Blackburn),** the Minister admitted that he had the power to determine what constituted the capital employed. That is too great a discretionary power to be placed in the hands of any Minister. Section 9, sub-section 4, of the principal act provides - >For the purposes of this section, the Minister may - > >determine what amount of capital is from time to time actually used, and what amount of net profit is derived thereon by any manufacturer in the manufacture and sale of wire netting; and > >determine, and include with the amount of capital actually used and net profit thereon derived by the manufacturer, any amount of capital actually used and the net profit thereon derived by any other person (whether subsidiary to or affiliated with the manufacture or not) in the distribution or sale of wire netting to users thereof. The committee will see that the Minister was not so frank as he would have us believe. The honorable gentleman carefully evaded the pertinent question asked by the honorable member for Watson. We want to know how much capital is employed in this company, how much of the authorized capital has been subscribed, whether there is any watered stock, whether profits have been distributed by way of bonus shares, what rate of dividend has been paid each year, what was the percentage of profit to paid up capital, and the names of the large shareholders. We are entitled to that information. I support the protest of the honorable member for Batman **(Mr. Brennan)** against the departure from regular parliamentary procedure in connexion with this bill. It is not likely that honorable members have more important parliamentary duties to discharge than those which occupy their attention in this chamber. If legislative business of sufficient volume is waiting to be done, we should remain in Canberra an extra week, or two if necessary, to do it. Had the normal procedure been followed in this case, the bill would have been intro duced and read a first time, and possibly the second-reading speech of the Minister would have been made; but further consideration of the bill would then have been adjourned to give honorable members an opportunity to study it. Under such circumstances we should have been able to inform our minds on the subjectmatter of the bill. As it is, we are left in the dark. I am not prepared to accept the bald statement of the Minister that there is nothing contentious in the bill. 1 want something more than assurances of that kind. In particular, I desire a proper opportunity to consider the legislation presented to the Parliament. {: #debate-50-s13 .speaker-JPN} ##### Mr BLACKBURN:
Bourke .- The degree of protection that the workers are likely to obtain from the arbitration tribunals of Western Australia is greater than that likely to be provided by the Commonwealth Arbitration Court. I am prepared to concede that the interests of the workers would be satisfactorily watched by the State authorities. In any case, it is probable that for the purposes of war-time industrial legislation steps will be taken to invest the industrial tribunals of Queensland and Western Australia with Commonwealth authority. My chief interest in the bill, at the moment, is as to whether proper steps will be taken to fix the price of wire netting in Western Australia at a figure which will be fair to purchasers. I believe that the price of wire netting was fixed by a regulation issued towards the end of October, 1939, and no doubt the figure was based on the ruling prices in New South Wales and Victoria about that time. Section 7 of the Wire Netting Bounty Act, No. 37, of 1939, provides - >The bounty under this act shall be payable in respect of wire netting which, during *a* period of five years commencing on the date of the commencement of this act, has benn produced in a factory exclusively from Australian materials and in accordance with the prescribed conditions for sale for use in the Commonwealth. That section implies that as public money may be paid to private companies by way of a bounty, the price of wire netting will be regulated. I have always maintained that Parliament should not grant tariff protection to any industry without protecting the consumers as to prices; but we are always told that the limitation of our constitutional power precludes the making of such a provision. As that is not the position in respect of bounties, I submit that provision should be made in this measure to ensure that Western Australian purchasers shall not be required to pay an unduly high price for wire netting. The price should be moderate. Even though the Commonwealth might provide only £5,000 a year by way of bounty, the interests of the purchasers of wire netting in Western Australia should be safeguarded as to price. {: #debate-50-s14 .speaker-KNX} ##### Mr HARRISON:
Minister for Trade and Customs · Wentworth · UAP .- Apparently it has been assumed by some honorable members, including the honorable member for East .Sydney **(Mr. Ward),** that the company engaged in the manufacture of wire netting in Western Australia is operating in a big way with large capital. That is not so. This company is not associated with the big companies in the eastern States, and its ramifications are not widespread. Hitherto, this firm has not made large profits. Had that been the case, it would not now be applying for the bounty. The company has been operating for a considerable period in rather difficult circumstances, and has not progressed owing to certain disabilities due to the necessity for it to obtain raw materials from the eastern States. The honorable member for East Sydney overlooked section 9(1) of the Wire' Netting Bounty Act No. 37 of 1939, which sets out- >Where the net profit of a manufacturer from the manufacture and sale of wire netting during any financial year or part thereof exceeds the rate of six per centum per annum, on the capital actually used by the manufacturer in that manufacture and sale, the Minister may withhold from the manufacturer payment of bounty in respect of the production of wire netting during that financial year or part thereof, and may recover any bounty which has been paid in respect thereof. The honorable member will notice the use of the words " capital actually used ". The Minister has power to cause an investigation of the capital position of the company to be made, and he may also take steps to ascertain whether exorbitant or, in fact, any profits are being made. He is empowered to hold the balance evenly as between the Government and the company in order to make sure that the bounty is not being illegally obtained. As to the conditions in this industry, I direct the attention of honorable members to section 11 (2) of that act, which reads - >The Minister may require any person applying for the appointment of his premises as a factory under this section to furnish information as to the nature of the business or proposed business, the marketing possibilities of the wire netting, and such other matters as the Minister thinks fit. It will be agreed, I think, that that provision authorizes the Minister to inquire into any matters connected with a company which makes an application for the bounty. The honorable member for Bourke **(Mr. Blackburn)** correctly stated that the price of wire netting has been declared and can be altered only after consultation with the Commonwealth Prices Commissioner, but, as honorable members know, the prices of certain commodities vary in the different States. I am not able to give specific information concerning the present price of wire netting in Western Australia, but I have reason to believe that the price originally fixed is the same as that in other capital cities. I suggest, however, that there is sufficient competition in this industry to ensure that prices will be kept at a reasonable level. The very fact that the profit of this company may not exceed 6 per cent, while it continues to draw the bounty should convince honorable members that there will be no exploitation of the purchasers of wire netting. I shall be glad to obtain and make available additional information on this subject. If necessary, the Prices Commissioner will be requested to investigate the whole subject. {: #debate-50-s15 .speaker-JPN} ##### Mr BLACKBURN:
Bourke .- I understand that the price of wire netting has been higher in Western Australia than in the eastern States, chiefly because of additional costs incurred in freights. It must be apparent to all honorable gentlemen, however, that it would be possible for this company to charge an exorbitant price for wire netting, which would still be lower than the price at which wire netting made in the eastern States could be sold in Western Australia. I ask the Minister for an undertaking that steps will be taken to ensure that the price in Western Australia will be kept at a reasonable level. {: .speaker-KNX} ##### Mr Harrison: -- I give the honorable member an assurance on that point. {: #debate-50-s16 .speaker-JSC} ##### Mr BRENNAN:
Batman .- The Minister for Trade and Customs **(Mr. Harrison)** has just furnished us with ample evidence that he knows very little about the subject on which he has been descanting so eloquently. My attention has been directed by the honorable member for Dalley **(Mr. Rosevear)** to a provision of the Wire Netting Bounty Act ( No. 2), No. 81 of 1939, which sets out - 9a. - (1) Where, in the locality where wire netting in respect of the production of which bounty is claimed is manufactured, any standard rates of wages or conditions of employment to be paid or observed in respect of any persons employed in the manufacture of that wire netting have been - {: type="a" start="a"} 0. prescribed by any award, order, or determination of the Commonwealth Court of Conciliation and Arbitration or of any other industrial authority of the Commonwealth or of a State or Territory or in any industrial agreement registered under any law of the Commonwealth, or of a State of Territory; or 1. declared to be fair and reasonable in accordance with the provisions ofsub-section (2) of this section, a manufacturer when making any claim for bounty in respect of the production of any wire netting shall certify to the Collector that the rates of wages and the condition's of employment observed by him in respect of the persons employed in the manufacture of the wire notting were not less favorable to the persons so employed than the rates and conditions so prescribed or declared. Had the Minister referred to that provision instead of to section 11 (2) of Act No. 37 of 1939, he would have shown that he had some real knowledge of the subject. I notice that clause 2 of the bill now before the committee provides - >This act shall be deemed to have come into operation on the 3rd day of May, One thousand nine hundred and forty. It is retrospective. Apparently the company has been receiving bounty now for about seven months. The Minister misled me into thinking that the bounty was a mere £5,000. He omitted to state that it was to be £5,000 per annum for a period of five years. {: .speaker-KNX} ##### Mr Harrison: -- I said £5,000 per annum. {: .speaker-JSC} ##### Mr BRENNAN: -- I think not. That puts the position in a very different light. {: .speaker-JPN} ##### Mr Blackburn: -Has the bounty not been paid to this company already? {: .speaker-KNX} ##### Mr Harrison: -- Yes. {: .speaker-JSC} ##### Mr BRENNAN: -- This fact serves to illustrate the necessity for a little more inquiry. Had I been a walking encyclopaedia of every act of Parliament I might have been familar with the provision relating to wages and conditions. I was not. This is a matter which should be investigated. Itwas for these reasons that I asked for an adjournment of the debate. However, nothing but generalities having emanated from the Minister and special pleading on behalf of Western Australia from other sources, I shall leave the matter at that for the present. {: #debate-50-s17 .speaker-K6Q} ##### Mr BERNARD CORSER:
Wide Bay -- I listened with interest to the remarks of the honorable member for Batman **(Mr. Brennan),** the honorable member for East Sydney **(Mr. Ward),** and the honorable member for Watson **(Mr. Falstein).** Knowing the policy of the party with which, until recently, they claimed to be associated, I can see that to-day they are besmirching the name of that party and attempting to pull down its banner, which it has for so long held aloft as the battle standard of the movement for the establishment of new industries in Australia in the interests of the workers. After many years of government encouragement to secondary industries, we find that Sydney and Melbourne have enjoyed the bulk of the spoils. In those cities to-day we see great industrial development, the employment of thousands of people, and the production of much material wealth which is purchased by primary producers from one end of the land to the other. To-night we heard three representatives of those great cities attempting to deny to a small industry the right to continue in existence. The development of that industry will mean a great deal to Western Australia, and it will certainly be of value to the primary producers, because it will manufacture a material which they need for the protection of their crops at a lower price than they have been charged up to the present. The bill has the support of every honorable member, with the exception of those three representatives of Sydney and Melbourne whom I have mentioned. What does this bounty propose to do? It proposes to provide employment for workers in Western Australia, where secondary industries offering jobs to the workless are few and far between. The establishment of the new industry may be only the beginning of great industrial development in Western Australia. {: .speaker-JSC} ##### Mr Brennan: -- It will provide a new customer for the Broken Hill Proprietary Company Limited. {: .speaker-K6Q} ##### Mr BERNARD CORSER: -- The honorable member's remark falls from me like water from a duck's back. I have always supported the establishment of secondary industries and on many occasions I have been allied with the Labour party in advocating the promotion of new industries by means of bounties. I am surprised that these three honorable gentlemen are endeavouring to pull down all that has been accomplished by the Labour party in the past and to deny Western Australia, the one that is weakest in point of industrial development, the right to develop secondary industries. The difficulties that confront the people of Western Australia are unknown to the honorable members. I hope that that there will be no repetitions of these miserable attacks when we again seek to promote a policy of decentralization and development of secondary industries. {: #debate-50-s18 .speaker-KEU} ##### Mr FALSTEIN:
Watson .- It was not my intention to speak at this stage, but I am entitled to say something in reply to the statements of the honorable member for Wide Bay **(Mr. Corser),** which were entirely contrary to the facts. Had the honorable member listened to my speech on the motion for the second reading of the bill he would have heard me say that I supported the Leader of the Opposition's declaration that the Labour party stands unequivocally for the establishment of new secondary industries in Australia. I resent his attempt to attribute to me and other honorable members on this side of the chamber words which we did not utter. It was only a shabby electioneering stunt intended to be used against us. {: #debate-50-s19 .speaker-10000} ##### The CHAIRMAN: -- Order ! The honorable member must address himself to the Chair. {: .speaker-KEU} ##### Mr FALSTEIN: -- Honorable members will recall that although 1 drew attention to some points in the bill to which I took exception, I said that I believed that it should be passed. I also agreed with what the Leader of the Opposition said in support of the measure. The objections that I raised related only to procedural matters. Some supporters of the Government attempt to take an unfair advantage of us by representing that because we do not honestly believe that bills are 100 per cent, correct, we are attempting in some way to retard the war effort or to do something contrary to the advancement of the national interest. It is for these reasons that I rose to make these remarks, which are justified, having regard to the circumstances. {: #debate-50-s20 .speaker-BV8} ##### Mr CALWELL:
Melbourne .- I support the bill. Having heard all that is to be said about it, I believe that the balance of argument is definitely in its favour. Nevertheless, some aspects of this discussion merit ventilation. I am afraid that a few members of the Country party attempted to provoke the somewhatinnocent members of the Opposition into making reckless statements that might be useful to Government supporters at the Swan by-election. The speech of the honorable member for Wide Bay **(Mr. Corser)** could not have had any other purpose than that. The debate has been useful, at any rate, in that it provoked the Minister in charge of the bill **(Mr. Harrison)** to rise in his wrath and condemn the monopolies headed by the Broken Hill Proprietary Company Limited and other huge financial organizations which are levying heavy toll upon the consuming public of this country. I do not know how the Minister will fare at a later date when the Broken Hill Proprietary Company Limited is providing money for the slushfund of the party to which he belongs. {: .speaker-10000} ##### The CHAIRMAN: -- Order ! The honorable gentleman must confine his remarks to the matter before the chair. {: .speaker-BV8} ##### Mr CALWELL: -- I shall content myself by saying that, if the Minister's conversion be genuine it is one of the most remarkable in recent political history. {: #debate-50-s21 .speaker-KX7} ##### Mr WARD:
East Sydney .- I join with the honorable member for Watson **(Mr. Falstein)** in correcting the erroneous impression which may have been created by the statements of the honorable member for Wide Bay **(Mr. Corser).** The truth is that we, like all other members of the Labour party, believe in the establishment of secondary industries; but I am not wedded to the idea that the only way to establish new industries is by propping up private enterprise. The honorable member for Wide Bay probably would not have been so enthusiastic if the Labour Government of Western Australia had established a State industry for the production of wire netting. Honorable members opposite are only concerned about the welfare of private enterprise and, as soon as there is any suggestion that a secondary industry should be owned and controlled by the State, they lose their enthusiasm. We had the Cockatoo Island Dockyard, but honorable members opposite voted in favour of giving it to private enterprise at a time when the nation was urgently in need of a dockyard of its own. That showed conclusively that honorable members will support the establishment of secondary industries only when their action will provide fresh opportunities for the investment of private capital. I am hopeful that the time is rapidly approaching when the Commonwealth Government and the State governments will cease to use the public funds for building up private enterprises, and will use them instead for the establishment of State owned and controlled industries which will be conducted in the interests of the people generally. These are the reasons why some of us were critical of the bill. I hoped to hear some criticism of the measure from at least a few honorable members supporting the Government, but apparently there has been a rapid conversion of all of those honorable gentlemen to this new policy which they now advocate. The Labour party wants this country to develop in such a way that opportunities will not be provided for private enterprise to exploit the workers and the consumers at the same time. If it were permissible at this stage, I should deal with many other evils of private industry. There was a case in which the Assistant Minister **(Mr. Anthony)** was interested; he knew a great deal about share-farming and how to become rich without working. Honorable members opposite have chided the Labour party by saying that we have constantly supported a policy of protection until now, when we go back on it. That is not the case. We are entitled to review our activities in the light of past experience. The Broken Hill Proprietary Company Limited has been built up by the protectionist policy of the Labour party until it has become such a monster that it is actually throttling the life out of this country. The honorable member for Wide Bay **(Mr. Bernard Corser)** might indicate, in the light of these facts, whether he is just as enthusiastic concerning the provision of funds for the establishment of State industries as he is in relation to the assistance of private enterprise. {: #debate-50-s22 .speaker-K6Q} ##### Mr BERNARD CORSER:
Wide Bay -- The honorable member for Ea»t Sydney **(Mr. Ward)** accused me of having no interest in the assistance of institutions which happen to be State controlled. I have had considerable experience of State enterprises in Queensland, where millions of pounds were lost on them. Some years ago the State of Western Australia, to which the honorable member would deny the opportunity to manufacture wire netting by refusing to agree to the provision of a small bounty of possibly up to £5,000 a year provided Australia with an example of State enterprise which would not make one enthusiastic in that regard. If the proposition we are now considering were State owned, controlled and operated, as was the steamship which the Government of that State once had in its service, I should view it coldly. We are told that that steamship had to stop in order to whistle. {: #debate-50-s23 .speaker-JSC} ##### Mr BRENNAN:
Batman .- There is one point that I should like to have cleared up. In saying that, I do not suggest that the Minister of Trade and Customs **(Mr. Harrison)** has so far cleared up any other points. I should like to know what provision has been made to ensure supplies for the manufacture of wire netting from the Broken Hill Proprietary Company Limited. I mention this matter for the very good and sufficient reason that if the Country party - of which you, **Mr. Prowse,** are a distinguished member - looked after the interests of the farming community, it would be aware that it is almost impossible to obtain supplies of fencing wire, roofing iron, or any of the other commodities manufactured by the Broken Hill Proprietary Company Limited or one of its large variety of pups. I have had personal experience of this. I have a very moderate holding of land, but 1 have needed several chains of fencing wire, and I regret to say that great difficulty has been experienced in obtaining supplies. Others, less favorably situated, and whose need is greater, have failed altogether. Will this company in Western Australia, which is to be so handsomely endowed every year with Commonwealth funds, be assured of supplies that willenable it to carry on its operations? The honorable member for Watson **(Mr. Falstein)** thought it necessary to re-assure the committee in respect of his adherence to the general policy of protection. He is a new member, but I am not. My adherence to the principle has been well established. Nobody knows that better than you, sir, because we have often debated the subject privately, and, may I say, with great lucidity. The Minister might be able to relieve our minds on the point that I have raised. Bill agreed to, and reported without amendment; report adopted. Bill read a third time. {: .page-start } page 836 {:#debate-51} ### MORGAN- WHYALLA WATERWORKS AGREEMENT BILL 1940 Message recommending appropriation reported. *In committee* (Consideration of Governor-General's message) : Motion (by **Mr. Fadden)** agreed to - >That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to ratify and approve an agreement made between the Commissioner of Waterworks of the State of South Australia and the Commonwealth of Australia. Resolution reported. Standing Orders suspended ; resolution adopted. *Ordered -* >That **Mr. Fadden** and **Mr. Anthony** do prepare and bring in a bill to carry out the foregoing resolution. Bill brought up by **Mr. Fadden,** and read a first time. {:#subdebate-51-0} #### Second Reading **Mr. FADDEN** (Darling Downs- Treasurer) [9.54]. - I move - >That the bill be now read a second time. The purpose of this measure is to validate the agreement of the 20th November, between the Commonwealth and the Commissioner of Waterworks of the State of South Australia, for the purchase of water under what is known as the Morgan- Whyalla water scheme. This scheme provides for the building of a pipe-line, with the necessary pumping stations and reservoirs, from Morgan, on the River Murray, to Whyalla, on the western side of Spencer's Gulf, and is designed to provide a water supply to districts as far north as Port Augusta, and to new industries at Whyalla, which can be established at that centre only if an adequate supply of water be made available. The agreement is for a period of twenty years. It provides for the purchase of water for Commonwealth Railways purposes at Port Augusta, at the rate of 2s. 4d. for each 1,000 gallons; but the Commonwealth has agreed that, irrespective of the quantity of water used by the Railways Department, it will make minimum payments to the State during each year of the currency of the agreement equivalent to one-half of any loss that the State may make in working the undertaking during the year, but not exceeding the sum of £37,500 in any one year. Should the loss in any year not exceed £25,000, the Commonwealth will not be called upon to make any payment under the minimum payment clause of the agreement, but will be required to pay only for the water actually used. I commend the bill to honorable members. {: #subdebate-51-0-s0 .speaker-KLL} ##### Mr MAKIN:
Hindmarsh . - This project has been the subject of considerable investigation by the Railways Standing Committee of the Parliament of South Australia. It has received the endorsement of that body, as well as of all parties in the State Parliament. I am in entire agreement with it. South Australia is at last to derive some advantage from the policy of fostering the establishment of secondary industries in Australia. Whyalla may well become one of the greatest industrial centres of this country; therefore, the foresight displayed in this matter is most commendable. Blast-furnaces have been erected at Whyalla in connexion with the production of iron and steel, and this enterprise is likely to lead to the establishment of other large industries in the locality, of which shipbuilding will bc one of the most important. The scheme will also serve districts between Morgan and Whyalla, and to them it will be most acceptable. This work is essential if there is to be that industrial expansion ii South Australia which we all desire, and if the State .is to have a more balanced economy in relation to primary production and secondary industry. There will be the further advantage of major industries being decentralized; instead of being concentrated on the eastern coast, they can be established in localities which are far safer from external menace. I support the second reading of the bill. {: #subdebate-51-0-s1 .speaker-JNM} ##### Mr BADMAN:
Grey -- I support the remarks of the honorable member for Hindmarsh **(Mr. Makin)** in regard to the supply of water to Whyalla through a pipe-line from Morgan to Port Augusta and back to that new, thriving town. At present, water for the use of a population of nearly 7,000 people is brought by ship from Newcastle. At Whyalla it is pumped' into tanks, and then distributed throughout the town, partly by pipes and partly by water carts. The town is growing so rapidly that a proper water supply is necessary. This place has grown up under the wing of the Broken Hill Proprietary Company Limited, which is so much abused in this Parliament. Were it not for the operations of the company, which is quarrying ore at Whyalla, and shipping it at the rate of 3,000,000 tons a year to Newcastle, there would be less employment in Newcastle, and that city would itself be a smaller place. Although the Labour party has such a terrible set on the Broken Hill Proprietary Company Limited, the fact must be remembered that the company pays a great deal of money directly in wages, and supports an extensive transport system. Though it may be a monopoly in some respects, its operations hare undoubtedly benefited Australia very greatly. This country would be better off if we had more firms of the kind. The great danger at the present time, when mines have been laid around our coast, is that some of the ships carrying water from Newcastle to Whyalla might bo sunk, and the people there would be short of water. The Broken Hill Proprietary Company Limited has established blast furnaces at Whyalla for the making of pig iron, and a factory for the manufacture of aeroplane engines. Already engines are being turned out at a rapid rate. There is a deep-sea jetty with 1,000 feet of berthing space on one side, and 800 feet on the other. Here, also, shipyards have been established, and the keels of two vessels have been already laid. The Broken Hill Proprietary Company Limited has set out to create a model town at Whyalla, and if honorable members visited the place they would be pleasantly impressed by the fine streets and the attractive colour schemes which have been introduced. This is one of the driest parts of Australia, the average rainfall being only ten inches a year, so that the need for providing a better water supply is evident. For some time past, the Government of South Australia has been urging the Commonwealth Government to advance money for the construction of this pipe line. Now that the money is available, it is necessary to make provision for meeting interest charges, and the Commonwealth has accepted responsibility for 50 per cent, of any loss incurred. The Commonwealth Railway Department at Port Augusta will benefit from the existence of the water supply, but very little of the country between Morgan and Whyalla, through which the line runs, will pay water rates. Most of it is already rated by the South Australian authorities which, unfortunately, could not supply Whyalla with water. The population of this town has increased very rapidly from about 1,000 to 7,000 in five or six years. I trust that it will in the future become one of the most highly developed industrial areas in Australia. I agree with the honorable member for Hindmarsh **(Mr. Makin)** that Whyalla is probably less vulnerable to attack than any other place in Australia. Enemy surface raiders would have no chance of traversing the Gulf to attack Whyalla, and the distance is great even for aeroplanes. The provision of this pipe line is an important step forward in the development of this baby Newcastle in South Australia. {: #subdebate-51-0-s2 .speaker-JVA} ##### Mr MORGAN:
Reid .- The Government is solicitous for the welfare of the Broken Hill Proprietary Company Limited, and is assisting it in the establishment of new industries at Whyalla, but I contend that it has a more important duty to perform in reopening the Walsh Island dockyard. The war might be over, and we might not even be the owners of Australia, if we have to wait until the shipbuilding industry is established at Whyalla, but the Walsh Island dockyard could be opened almost immediately. Both water and coal have to be transported to Whyalla, whereas at Walsh Island the coal is right alongside the shipyards. There is no shortage of men or of water, and the fabricated steel is produced in the neighbourhood. {: #subdebate-51-0-s3 .speaker-KJQ} ##### Mr JAMES:
Hunter .- I do not really object to this measure. I recognize that anything which makes for the development of South Australia helps also to develop Australia as a whole, but I think that it would be better policy at this time to recondition the Walsh Island dockyard. This need not involve the dropping of the other scheme altogether; there is room for both. I have previously asked that when water supplies are provided for military camps, people living in the neighbourhood should be allowed to avail themselves of the supplies. The defence authorities, when these camps are being established, ride roughshod over State and local authorities. During the construction stages they use the local water supply, emptying the people's tanks, but then, when they get their own water supply, they refuse to let the people fill their tanks from it. That is what has hap pened in the vicinity of the Rutherford and Greta camps, and also at Rathmines. Of course, the Broken Hill Proprietary Company Limited has no interests in Greta such as it has in Whyalla. Why, I ask, should not provision have been made for meeting the needs of local inhabitants when the water supplies were installed? I have on previous occasions taken this matter up with various ministers who have administered the Department of the Army. They change so often that it is hard to know who is in and who is out. I do not protest against this proposal to provide Whyalla with a water supply, rather do I compliment the Government upon ii, but I urge the claims of the Walsh Island dockyard as a shipbuilding centre and ask that the residents of Greta and Branxton be supplied with water from the defence water main there. However, when representations are made to the Government, it says, " This is not our affair; go somewhere else". Newcastle, with its large population and its supplies of raw material, is the proper place for shipbuilding yards, though I admit there is room for shipbuilding at both Newcastle and Whyalla. {: #subdebate-51-0-s4 .speaker-KCM} ##### Mr DRAKEFORD:
Maribyrnong -- The Government deserves to be commended for this proposal, provided the rights of the people are preserved and no exclusive privileges are given to the Broken Hill Proprietary Company Limited. The Labour party believes that secondary industries should be spread as widely as possible throughout Australia. Even though there are large munitions works in my electorate, I believe, and have always advocated, that it Ls wrong to concentrate the manufacture of munitions in one area. The same argument applies to shipbuilding and other forms of industrial development. Whyalla is probably as safe from attack as any place in Australia. It is a suitable place in which to establish war industries, and it is only right that it should be provided with an adequate water supply. Water will also he provided for Port Augusta and other places where the supply is anything but good. Good water is also necessary for the proper running of locomotives, a matter of which I have some knowledge. The use of bad water places a heavy strain on the locomotive men, and also increases maintenance costs. The present water supply at Whyalla is unsatisfactory, and the provision of a better one is overdue. I welcome this legislation, as an indication that the Government has at last yielded to the representations of the Labour party to diffuse industrial development throughout Australia, and not confine it to the big cities. {: .speaker-KJQ} ##### Mr James: -- Hear, Hear! {: .speaker-KCM} ##### Mr DRAKEFORD: -- The honorable member for Hunter **(Mr. James)** appeared to consider that some injustice had been done to Newcastle as the result of the failure to reopen the Walsh Island dockyard ! {: .speaker-KJQ} ##### Mr James: -- I am not parochial in my outlook. {: .speaker-KCM} ##### Mr DRAKEFORD: -- The bill provides that if South Australia incurs a loss in connexion with the operation of the water scheme, it may not claim from the Commonwealth Grants Commission increased compensation. That is reasonable. Certain privileges are being extended to an influential company, which are not being granted to other organizations, and the Government should ensure that such privileges are not abused. My recent visit to Western Australia revealed to me that the people there honestly believe that they are not getting a fair deal from the Commonwealth, and that the development of the small States is being retarded. The present proposal will contribute to the industrial development of South Australia, and for that reason it is to be welcomed. I hope that this will be the first instalment of an effective developmental programme, which the Labour party has advocated over a long period, but which the Government has too tardily adopted. {: #subdebate-51-0-s5 .speaker-JOM} ##### Mr BEASLEY:
Leader of the Australian Labour party - nonCommunist · West Sydney -- Under this legislation, the Commonwealth will guarantee the expenditure of a sum of money to provide Whyalla with an adequate water supply. The town will become a shipbuilding centre. {: .speaker-F4T} ##### Mr Fadden: -- Among other things. {: .speaker-JOM} ##### Mr BEASLEY: -- I should like the Treasurer **(Mr. Fadden)** to inform the House whether the Commonwealth has obtained a suitable guarantee of the continuity of shipbuilding in Australia in future. Ordinary business prudence dictates that such an assurance should be secured before the Commonwealth is irrevocably committed to guarantee the money. A long-range plan should be devised in order to safeguard this investment. The honorable member for Grey **(Mr. Badman)** questioned the criticism that the Labour party has levelled from time to time against the Broken Hill Proprietary Company Limited. In the matter of shipbuilding, we have a genuine grievance against that enterprise. Five years ago, when the company required vessels for its coastal trade, it could have constructed them in Australia, thereby giving employment to large numbers of skilled tradesmen. Despite the representations made by the Labour party, the company purchased the vessels abroad. Its lack of patriotism was inexcusable. From successive Commonwealth Governments it has obtained tariff protection and bounties upon its production. Now a powerful monopoly, it has secured many concessions from its exploitation of the natural resources of the country. In my opinion the Broken Hill Proprietary Company Limited is only the trustee of those resources, and any benefits which accrue to it from them should be distributed among the Australian people. When the company found that it could purchase in Great Britain ships for £3 or £4 a ton less than the cost of construction in Australia, it did not hesitate. If it had been able to strike a harder bargain in China, it would have bought the vessels from that country. If shipbuilding yards at Whyalla, Williamstown, and Sydney are to be kept busy, the Commonwealth must enter into a planned arrangement with Great Britain. Many honorable members have advocated the diffusion of British shipbuilding activity, contending that a portion of the requirements , of the Royal Navy should be fulfilled in Australia. In the interests of Britain's security, naval construction should not be concentrated in British Isles, where yards are open to attacks by air. No doubt the Clyde is being bombed nightly by the Germans. If the British Government had responded to our suggestions, minesweepers, light cruisers, and units of the "mosquito" fleet which are so urgently required in the Mediterranean Sea and the North Sea, would now be sliding off the slipways in this country almost every month. Some of the light naval craft, which are now being built at Maryborough and at Cockatoo Island, will later join the Royal Navy. I should like the Treasurer to inform the House whether shipbuilding will continue in Australia after the conclusion of hostilities, and will not revert to the Clyde. Such an assurance is necessary in order to safeguard our investment at "Whyalla. In the past, the British vested interests have never desired ship-building to flourish in Australia. As the result, the Commonwealth is now unable to play so prominent a part in the present conflict as otherwise it could have done. I require an assurance that vested interests in Great Britain will not cause a cessation of shipbuilding in Australia at the conclusion of the war. The Treasurer should also state whether the consultations with the interested parties have reached a point at which the Commonwealth is warranted in signing this agreement, and whether he is satisfied- that the investment is sound. To-day, I was associated with important discussions relating to the urgent necessity for maintaining uninterrupted shipping services on the coast. The position is serious. I am reluctant to approve of this legislation unless it heralds the inauguration of a planned programme of shipbuilding. {: #subdebate-51-0-s6 .speaker-K6Q} ##### Mr BERNARD CORSER:
Wide Bay -- In supporting the bill, I compliment the honorable member for West Sydney **(Mr. Beasley)** upon his advocacy of an extension of ship-building in Australia. At the outbreak of war, the Commonwealth experienced considerable difficulty in marshalling ship tradesmen, young and old, to undertake the construction of sloops, destroyers and other classes of naval craft. I am gratified to see that the Government now means business, and I hope that numbers of naval and merchant vessels will be built in Australian yards in future. In my electorate, there is a great shipbuilding establishment, which is considered to be the second best yard in Australia. During the last war, it constructed the *Echuca* and the *Echunga,* which were the only two steel ships built by the Commonwealth. After the war, no more orders for ships were placed, and this valuable yard lay idle until last year. At present, it is constructing three sloops for the British Government. I hope that before long, the Government will be able further to develop shipbuilding under a long-range programme which will ensure security of employment for large numbers of skilled tradesmen. As an island continent, Australia should become a maritime Power. There now exists an urgent demand for ships, as a result of the submarine warfare conducted by our enemies. If the Government appeals to the shipbuilding interests it will find that they will rally to its assistance in every way. {: #subdebate-51-0-s7 .speaker-JS9} ##### Mr BREEN:
Calare .- I support the remarks of the honorable member for West Sydney **(Mr. Beasley)** in regard to the business morality of the Broken Hill Proprietary Company Limited. The Government is to be complimented on its decision to support the South Australian Government's efforts to provide a water supply at Whyalla. At present the boats carrying ore from Whyalla to Newcastle return in water ballast. It is hoped that in the near future these 'boats will be carrying payable cargoes on the return journey. Owing to the shortage of shipping due to the exigencies of the war, every effort should be made to use every foot of cargo space to the best advantage. The blast and open hearth furnaces at Whyalla use a very large quantity of fuel. In all other countries it is customary for the ore to be carried to the fuel. The procedure adopted at Whyalla represents a departure from accepted practice, which should give a great impetus to the coal-mining industry in New South Wales and assist in the recovery of large quantities of benzol. One of the subsidiaries of the Broken Hill Proprietary Company Limited has for many years been the recovery of benzol and motor spirit from coal, the coke residue being used in the blast-furnaces at Newcastle. That coke, which is known in the industry as commercial coke, has a very limited market. The coke produced on the south coast of New South Wales is of much better quality and more readily saleable. Consequently, if a better market can be found for commercial coke a greater amount of benzol can be economically produced. Knowing the repute of the Broken Hill Proprietary Company Limited, if it could secure a cheaper water supply at Whyalla it would do so. The Chichester water scheme was undertaken by the State Government at a very high cost, yet .the Broken Hill Proprietary Company Limited endeavoured to secure a cheaper water supply of its own by developing the Stockton waterbeds. The furnaces at Whyalla will use a very large quantity of water and I trust that the scheme will be proceeded with at once. {: #subdebate-51-0-s8 .speaker-BV8} ##### Mr CALWELL:
Melbourne -- One extraordinary fact that has emerged from the debate on this bill and the one that preceded it is that the Broken Hill Proprietary Company Limited has only one avowed friend in this House, namely, the honorable member for Grey **(Mr. Badman)** ; yet, strangely enough, it seems to dominate the whole of the economic life of this country and to wield a tremendous influence in the councils of most of its governments. Much as I dislike the Broken Hill Proprietary Company Limited and its great power, I commend the bill because it is a step 'in the direction of decentralization. Federation has not benefited South Australia, Western Australia or Tasmania proportionately as it has benefited the eastern States. Though it is rather late in the day, I am glad that the Government proposes to take some remedial action. The proposal to establish the shipbuilding industry at Whyalla is only the beginning of a big movement towards decentralization. More than two-thirds of the population of Australia is congregated between the mountain ranges and the sea. That is not good for the country socially, economically or politically. If this Government is seizing the opportunity created by the exigencies of the war to spread industries in strategically more favorable positions, the war has at least brought about some good. I hope that in the course of years, many of our industries which are at present centred in the big capital cities will be placed in more favorable positions. Every one realizes what disasters would occur if, for instance, Sydney were bombarded from the sea or subjected to a raid by hostile aircraft. Those who have read of the disastrous bombing of Coventry and Birmingham must visualize what would happen if the city of Melbourne were subjected to a similar attack. When the honorable member for Maribyrnong **(Mr. Drakeford)** was speaking, _I interjected that it would be a good thing if all the new war industries established in this country could be placed behind the barriers of the mountain ranges. Those established in New South Wales could be placed, say, at Lithgow and Orange where they would receive the natural protection of the Dividing Range. Similarly, in Victoria, most of the new war factories should be situated north of the Dividing Range where they would be provided with an additional element of safety. {: .speaker-JNX} ##### Mr Barnard: -- We would not mind if a few industries were established in Tasmania. {: .speaker-BV8} ##### Mr CALWELL: -- Industries should be established in Tasmania to make that State reasonably self-supporting. At least one honorable member opposite who represents a Tasmanian constituency is not anxious for the establishment of a munitions annexe or any other industry in his electorate because he fears that an increase of the industrial strength of his electorate may have unfortunate electoral results for him. A few days ago I asked a. question in the House concerning the conversion of the railway line between Broken Hill and Port Pirie to the standard gauge. I commend the Government for its decision to consider undertaking that work. If our seaborne trade is interrupted by mines or other war-like activities, it is desirable that we should have a certain alternative flow of fuel from New South Wales to South Australia. For this reason the conversion of the line between Broken Hill and Port Pirie to the standard railway gauge should be completed without delay. You, **Mr. Deputy Speaker,** and the honorable member for Maribyrnong have recently drawn attention to tha necessity for the provision of additional rolling-stock on the East- West line. {: #subdebate-51-0-s9 .speaker-KLL} ##### Mr DEPUTY SPEAKER (Mr Makin:
HINDMARSH, SOUTH AUSTRALIA -- I have treated the honorable member with considerable indulgence. I ask him now to confine his remarks to the subject-matter of the bill. {: .speaker-BV8} ##### Mr CALWELL: -- If any money is to be expended on shipbuilding the claims of the electorates represented by the honorable member for Melbourne Ports, Maribyrnong and myself should not be overlooked in the dispensing of the Government's bounty. As the subject-matter of the bill has been fully discussed I shall not occupy the time of honorable members any further in elaborating what has already been said. The honorable member for Wide Bay **(Mr. Corser)** referred to the advantages of Queensland for shipbuilding purposes. I agree with what he said, but I remind him that the Government has already undertaken to put in hand a shipbuilding programme in Queensland involving an expenditure of £1,500,000. An announcement that this would be done was made by **Senator Foll** on the eve of the general elections. It had all the appearances of an election bribe. I hope that the Treasurer, who represents a Queensland constituency, will take steps to ensure that the Government will fulfil its promises in this regard. {: #subdebate-51-0-s10 .speaker-JSC} ##### Mr BRENNAN:
Batman .- The purpose of this bill is " to ratify and approve an .agreement made between the Commissioner of Waterworks of the State of South Australia and the Commonwealth of Australia ". The object of the agreement is to enable the Commonwealth to guarantee the South Australian Commissioner of Waterworks against any loss in connexion with the provision of a water supply at Port Augusta, Whyalla and elsewhere in the northern areas of South Australia ". The water is to be drawn from the River Murray. The agreement, which covers four closely printed pages of small type, involves considerations of finance, the relative responsibilities of the Commonwealth and the States, and the position of State instrumentalities in relation thereto, and also other matters of high policy. I mention these points because I wish to repeat the protest I uttered this evening concerning the manner in which another bill was introduced and forced through the House. The uninformative second-reading speech of the Treasurer on the bill now before us was an insult to our intelligence. I am indebted to the honorable member for Calare **(Mr. Breen)** and the honorable member for Darling **(Mr. Clark)** for any useful information that I have on this subject. It is apparent to me that although the wealthy Broken Hill Proprietary Company Limited, which has big interests at Whyalla, will be a substantial beneficiary by reason of the establishment of this water supply, the Commonwealth Government is being required to underwrite a substantial amount in respect of anticipated losses in connexion with the scheme. The company is not even mentioned in the agreement. I can see no reason why it should not be required to bear at least a proportion of the expected losses. The procedure in connexion with this bill has been almost an exact repetition of that adopted in connexion with the previous measure before the House. In regard to that bill the Treasurer made his second-reading speech, and no doubt because that measure was of considerable interest to Western Australia, the Leader of the Opposition **(Mr. Curtin),** who represents a Western Australian constituency, was invited to rise and give the bill his blessing. The object doubtless was to forestall discussion and to ensure that the bill would have a speedy passage through the House. In respect of this bill the Treasurer made his secondreading speech and then, no doubt because the measure is of special interest to South Australia, the honorable member for Hindmarsh **(Mr. Makin)** was given the opportunity to give it his benediction. This practice is detrimental to the rights of other honorable members who may wish to discuss measures on their merits, apart from their special application to particular States. I greatly deplore the adoption of this procedure to which I am reluctantly compelled to call attention. The House has been treated with scant courtesy by the Treasurer. The honorable member for Maribyrnong **(Mr. Drakeford),** in his interesting speech on the merits of the proposal, unfolded the details of what must be regarded as an ambitious and almost romantic scheme to decentralize a valuable industry. It is, however, nothing but the bare truth to say that although the wealthy Broken Hill Proprietary Company Limited is deeply involved in this whole project it is not being called upon to undertake any obligations under the long and intricate terms of the agreement we are being asked to ratify. 1 hope that the success foreshadowed by the Minister for this scheme, and presumably hoped for by the honorable member for Hindmarsh, will be justified, but I have been a member of this Parliament for long enough to have seen many roseate hues of hope dispelled by stark realities. Moreover, I have never known a private company to enter into an agreement with the Commonwealth Government without getting the better of it. I have reason to believe that the Broken Hill Proprietary Company Limited is not an exception. I cannot understand why this company has not been made a party to this agreement. The bill should not have been rushed before the House, and honorable members should not have been treated so contemptuously by the Government. Nor do I consider that certain honorable members of the Opposition should have meekly acquiesced in the disrespect with which the Government has regarded "the rights of private members. {: #subdebate-51-0-s11 .speaker-KMZ} ##### Mr MARTENS:
Herbert .- I had no desire to take part in this debate, but I am " fed-up " with having to sit quietly by while certain honorable members on this side of the House have flogged the Leader of their party as they have been doing during to-day. I say definitely that because the Leader of the Opposition, saw fit to support the hill which has just been passed by the House he should not have been traduced and subjected to charges which practically amounted to dishonesty. All that he has done has been to support a measure of considerable significance to the State which he represents. Now the honorable member for Hindmarsh **(Mr. Makin)** has been treated to a similar attack by the honorable member for Batman **(Mr. Brennan)** for having supported a bill intended to benefit South Australia. I have been long enough a member of this Parliament to know that the honorable member for Batman has not always adopted the attitude that he has adopted this evening. "When he was a Minister of the Crown he did not always show anxiety to furnish honorable members with the information that they desired, and he was not at all anxious at that time for long Parliamentary discussions of Government measures. I rather think that the honorable member has been actuated this evening mainly by a desire to " stonewall " the legislation before the House. I regard this bill as being a legitimate attempt to do something in the interests of one of tha less populous States of the Commonwealth. I have a clear recollection that certain measures introduced by the Scullin Government to establish important industries in Australia were not opposed by ' the honorable member for Batman. In my view those industries were of real value to the Commonwealth. I am tired of having to sit and listen to speeches of the kind that have been delivered during the last two hours by certain honorable gentlemen who sit on the Opposition benches. I do not think that any honorable member would suggest that I have ever withheld criticism of members of the government when I have considered it should be uttered; but I do not think that it 'will be suggested, either, that I have ever been prepared to make statements concerning Government supporters which I have not also been prepared to make concerning members of my own party when I have considered them to be warranted. {: #subdebate-51-0-s12 .speaker-KX7} ##### Mr WARD:
East Sydney .- I cannot be justly accused of any intention to " stone-wall " this bill. I have, in fact, listened with great interest to the speeches that have been made upon it. But I join with the honorable member for Batman **(Mr. Brennan)** in protesting against the procedure that is being adopted. It is entirely wrong, in my view, for the Government to throw long and involved agreements on the table of the House and expect us to ratify them at short notice without having had an opportunity to read and study them. We cannot intelligently discuss agreements of this description in the circumstances in which this bill is placed before us. The debate on the second reading of the bill should have been adjourned. It is entirely wrong to bring down a bill like this at short notice and expect it to be passed immediately. The Broken Hill Proprietary Company Limited must have had advance knowledge of the intentions of the Commonwealth Government and the Government of South Australia in connexion with the provision of this water scheme for Whyalla. The project will undoubtedly benefit this big company, though no doubt certain other interests may also reap some benefit from it. I can see no reason why the Broken Hill Proprietary Company Limited should not have been required to accept a part of the financial responsibility for the provision of this water supply. Doubtless before the company agreed to establish its big works at Whyalla, it was given some assurance by the Commonwealth Government and the Government of South Australia that an adequate water supply would be .provided. The company should accept some responsibility in respect of this scheme. {: .speaker-JTY} ##### Mr Archie Cameron: -- It will certainly be obliged to do so. {: .speaker-KX7} ##### Mr WARD: -- In what way? The company will reap substantial benefits from the scheme, but apparently it will not have to bear any of the financial loss that will be incurred. It is almost unbelievable that the company should have agreed to establish its works at Whyalla without having . received an undertaking that a water supply would be provided. There is no justification for calling upon the Commonwealth Government and the Government of South Australia to bear the whole burden of the anticipated loss on this scheme. Supporters of the Government believe that members of the Opposition are not favorable to decentralization and the establishment of new Australian industries if we are not prepared to give our blessing to every proposition put before this Parliament for the disbursement of public funds in order to assist private enterprise. My views on this subject are well known. I am a keen critic of the policy of using public moneys to bolster up private enterprise, but I have no objection to the use of public moneys for the establishment of State-controlled enterprises. The public does not benefit to any large degree from the activities of private concerns. The honorable member for Hunter **(Mr. James)** will bear me out when I say that, although big companies like tho Broken Hill Proprietary Company Limited provide a great deal of employment, the conditions of employment and the wages paid are open to a great deal of just criticism. There are many men who curse the day when they became employees of that big combine. Many of them are broken in health. Therefore, all this talk about the benefits of employment by big undertakings is grossly exaggerated. I ask the Government whether the Broken Hill Proprietary Company Limited was given an assurance by the Commonwealth Government and the Government of South Australia that, if these works were established, the water supply would be provided for them. The Broken Hill Proprietary Company Limited should be informed that, as it will be the greatest beneficiary from the scheme, it will be required to pay at least a considerable portion of the cost. {: #subdebate-51-0-s13 .speaker-JTY} ##### Mr ARCHIE CAMERON:
Barker -- Some honorable members opposite appear to be hopelessly misguided in their approach to this subject. Whether that appearance is simulated or not, I do not know. No matter what territory this water main will traverse in South Australia, every inch of the country on either side of it will be subject to rates, which will go towards the cost of the project, whether the water from it be used on those properties or not. It stands to reason that the Broken Hill Proprietary Company Limited, which is the heart and soul of Port Pirie, for instance, will benefit by the reticulation of water from the river Murray ; but so also will every family resident in that town. One of the greatest problems at Port Pirie and Port Augusta has always been the lack of good storages or potable water. Many small reservoirs were built in the Flinders Range, which is difficult holding country, and where rainfall is doubtful. At times when the reservoirs have held, rain has not come; but the river Murray is always there. This scheme is one of the best projects for the development of secondary industries in the Spencer Gulf district that has ever been undertaken. {: .speaker-KX7} ##### Mr Ward: -- We do not oppose the scheme; we want to know who will have to pay for it. {: .speaker-JTY} ##### Mr ARCHIE CAMERON: -- On the face of the agreement, those who benefit most from the scheme will have to pay most of its cost. One of the greatest difficulties experienced by the Commonwealth railway authorities at Port Pirie and Port Augusta, as the honorable member for Maribyrnong **(Mr. Drakeford)** pointed out, is due to the absence of good water for locomotives. That trouble will bc overcome when this scheme is brought into operation and the Commonwealth will save thousands of pounds a year as the result. The Broken Hill Proprietary Company Limited is developing important industries in that area. The honorable member for East Sydney **(Mr. Ward)** referred to shipbuilding, but that is only one subsidiary activity that will be undertaken at Spencer Gulf. Sooner or later, I have no doubt that it will be fairly late, the Opposition will recognize the truth of what has been said time after time in this chamber - that the foundation of any shipbuilding industry is the existence, first, of a fishing fleet, secondly, of a mercantile marine, and thirdly, of a naval force. In time of war the naval force requires the assistance, under modern fighting conditions, of a number of the merchant ships and fishing boats. One of our present difficulties is due to the fact that we failed to build in time of peace, the fishing and mercantile fleets that are necessary for our protection and the carrying on of commerce in time of war. {: .speaker-KLL} ##### Mr DEPUTY SPEAKER (Mr Makin: -- The honorable member will not be in order in pursuing that line of argument. {: .speaker-JTY} ##### Mr ARCHIE CAMERON: -- Whatever advantages may be gained from the establishment of a shipbuilding industry in Australia, this scheme has very little to do with shipbuilding. Industrial establishments at Spencer Gulf include blast furnaces at Whyalla and the great smelters at Port Pirie. The erection of tin plate rolling mills at Whyalla is already contemplated, and a proposal to install a pipe manufacturing plant has also been investigated. Honorable members must look at this subject in the light of the facts and not in the dubious light of their suspicions. The facts arc plain, whereas their suspicions are illfounded. The scheme may involve the State of South Australia in temporary losses, but it will become a payable proposition. Every honorable member should be proud to support the proposal, and thankful that the Government of South Australia and the Commonwealth Government have seen fit to co-operate in bringing it into existence. {: #subdebate-51-0-s14 .speaker-JPN} ##### Mr BLACKBURN:
Bourke .- This measure appears to be perfectly in order, but I rise to say that even the least objectionable of measures should not be rushed through this House as have this bill and the bill with which we have just dealt. Before new measures are discussed in detail they should be introduced and ample opportunity given to honorable members to consider them before the second reading and the committee stages are reached. I believe that honorable members are justified in protesting against the hustling of legislation through this chamber. I have had longer experience of parliamentary work than anybody at present in the chamber, with the possible exception of yourself, **Mr. Deputy Speaker,** and certainly with the exception of the honorable member for Batman. I have seen a great number of things done in this hurried way towards the end of a session which parliament has afterwards regretted doing. The honorable member for Barker **(Mr. Archie Cameron)** spoke of suspicions. Those suspicions were engendered by the way in which this legislation is being hurried through the Parliament. {: #subdebate-51-0-s15 .speaker-F4T} ##### Mr FADDEN:
Treasurer · Darling Downs · CP -- *In reply* - I am the Minister responsible for any neglest of the kind suggested by the honorable member for Bourke **(Mr. Blackburn).** I assure him that I had no intention to slight honorable members. The time factor has unfortunately entered into the matter, which has become very urgent on account of the desirability of the South Australian Government having the agreement ratified as expeditiously as possible. We consider that the terms of the bill are very simple. The honorable member for Batman **(Mr. Brennan)** said that he took a very serious view of the matter; I doubt whether he is sincere in that regard. As a lawyer, he must be well aware that the bill is intended only to ratify an agreement that has been entered into between the Government of South Australia and the Commonwealth Government in connexion with the sale of water for use in locomotives owned by the Commonwealth. The South Australian Government appointed a special committee to investigate this matter thoroughly. That committee took some months to carry out its investigations and it presented a very valuable report. On the strength of the report, the South Australian Government obtained financial assistance through the proper channel - the Loan Council - in order to carry out the project at a cost of £3,000,000. It intends to provide essential water supplies at the town of Whyalla which, up to the present, has had to depend for its supplies of water on ships leaving Newcastle for Whyalla to load iron ore. Every one knows that the industrial . activities at Whyalla are part and parcel of the Commonwealth's war effort. They are indispensable to the big factories at Newcastle and Pt. Kembla, because they produce the raw material from which Australian steel is manufactured'. In its wisdom, the South Australian Government entered into an agreement with the Broken Hill Proprietary Company Limited - an agreement which is entirely its own concern and not the concern of the Commonwealth Government. The agreement is to be operative for a period of 30 years, and covers the supply of water to the company up to a quantity of 1.000,000,000 gallons a year. The bill now before the House is merely to ratify the agreement entered into by the Commonwealth Government with the South Australian Government to purchase water from the State for locomotives used on the transcontinental and other Commonwealth railways. The Commonwealth Government ordered an investigation of the matter, and the committee of investigation reported that the scheme is necessary, is of national im- .portance, and justifies assistance by the Commonwealth. At the present time a great deal of inconvenience and cost is involved in transporting water to Whyalla. Therefore, I ask the House to give authority for the ratification of the agreement in order that the Government of South Australia may get on with a job which is important to the conduct of our war effort. Question resolved in the affirmative. Bill read a second time, and passed through its remaining stages without amendment or debate. {: .page-start } page 846 {:#debate-52} ### TREASURY BILLS BILL 1940 Bill brought up by **Mr. Fadden** and read a first time. {:#subdebate-52-0} #### Second Reading {: #subdebate-52-0-s0 .speaker-F4T} ##### Mr FADDEN:
Darling DownsTreasurer · CP -- *by leave* - I move - That the bill be now read a second time. This measure is designed to give greater protection to Commonwealth securities. The Treasury Bills Act, as it now stands, provides penalties for forging or uttering these securities, or for being in possession of false forms, but there is some doubt as to whether the provision an that act is wide enough to prevent the reproduction of certain Commonwealth securities for the purposes of advertisement, or for their unauthorized publication in various ways. The law makes it an offence for any person to make or have in his possession, without the authority of the Treasurer, any copy of an Australian note, or any writing, engraving, print, &c, resembling an Australian note. Defacing or disfiguring such notes, or using them in connexion with advertisements, is also prohibited. It is felt that similar protection should be afforded to other securities such as treasury-bills, treasury-bonds and war savings certificates which are negotiable bearer securities. This bill is drawn to give that protection by incorporating in the Treasury Bills Act provisions similar to those that now exist in the Commonwealth Bank Act in respect of Australian notes. Through the issue of war savings certificates, Commonwealth securities are becoming very widely known, and honorable members will, I am sure, agree that adequate steps ought to be taken to safeguard these securities, in the interests of both the Commonwealth and the holders. Debate (on motion by **Mr. Forde)** adjourned. {: .page-start } page 847 {:#debate-53} ### SALES TAX PROCEDURE BILL 1940 {:#subdebate-53-0} #### Second Reading {: #subdebate-53-0-s0 .speaker-F4T} ##### Mr FADDEN:
Darling DownsTreasurer · CP -- I move - >That the bill be now read a second time. This is a short measure, which is necessary to adjust the machinery for the collection of sales tax to the new basis upon which the tax will be levied if the budget proposals receive the approval of Parliament. Section 8 of the Sales Tax Procedure Act is a penalty section which provides, amongst other things, that a penalty may be imposed for omission from returns of particulars of taxable goods, or for the inclusion of particulars relating to taxable goods in a column of the return provided for goods in respect of which sales tax is not payable. That provision was adequate when there were but two classes of goods, namely, those subject to tax andthose not subject to tax. It will be inadequate in the altered conditions. In the new proposals, goods will fall into four classes. There will still be one class not subject to tax, but each of the other three classes will be subject to tax at differing rates. New forms of return will be necessary for use in the altered circumstances, and these will provide separate columns for particulars of goods at the varying rates. It is considered essential, for the proper control of understatement and evasion, that the scope of section 8 be extended so that it may apply to cases in which goods taxable at any specific rate are included in a column provided for goods taxable at some lower rate, thus causing underpayment of tax. The proposed amendment is designed for this one purpose. No new principle is involved, the amendment arising solely out of the change of the method of levying the tax. The section as it stands contains a proviso enabling the whole or any part of the penalty imposed to be remitted when the error is due to inadvertence. This proviso will apply to the extension now proposed. Debate (on motion by **Mr. Forde)** adjourned. {: .page-start } page 847 {:#debate-54} ### SALES TAX ASSESSMENT BILL (No. 1a) 1940. {:#subdebate-54-0} #### Second Reading {: #subdebate-54-0-s0 .speaker-F4T} ##### Mr FADDEN:
Darling DownsTreasurer · CP -- I move - >That the bill be now read a second time. The proposed amendments are incidental to the proposals contained in the budget, and are complementary to other legislation already introduced to give effect to those proposals. They are designed to adjust the machinery to two new features which appear in the sales tax, namely - {: type="i" start="i"} 0. the provision of differential rates for different categories of goods ; and 1. the re-introduction into the taxable field of goods hitherto exempt. Section 3 (5) of the act as it stands at present enables the Commissioner of Taxation, when taxable and exempt goods are sold together for one inclusive price, to apportion that sum between taxable goods and exempt goods so that a value upon which sales tax should be calculated may be ascertained. Under the altered basis of paying tax, it is expected that cases will arise in which goods taxable at varying rates will be sold for one inclusive price, and the desire is to have a similar power of apportionment of the lump sum, so that the amounts to be taxed at the relevant rates may be ascertained. An amendment of section 3 (5) is proposed to afford this power. The existing law also contains a provision which enables agreements for the sale of goods entered into prior to the date of changes of the rates of sales tax to be varied, in order to enable taxpayers who become liable for extra tax by reason of such increases to recover the additional amount payable, or conversely to enable purchasers of goods under such agreements to obtain the benefit of any reduction of rate. This provision is contained in section 70a of the act. It is proposed that the scope of this provision shall be extended so that agreements for the sale of goods hitherto exempt but now being made taxable may be varied in order to enable the vendors to recover the amount of sales tax which they will now be called upon to pay. A similar amendment is proposed in section 70b, which relates to contracts for the erection of buildings or for the performance of work involving the supply of material. The section as it now stands authorizes variations because of changes of rate, but does not cover cases in which variation of the amount of tax occurs through the goods concerned being included in or excluded from the exemption schedule. The proposed amendment adjusts the position in this respect. No new principle is involved in these proposals. Debate (on motion by **Mr. Forde)** adjourned. {: .page-start } page 848 {:#debate-55} ### ESTIMATES 1940-41 *In Committee of Supply:* Consideration resumed *(vide* page 734). Department of the Treasury. *Proposed vote,* £1,074,100. {: #debate-55-s0 .speaker-JUQ} ##### Mr CLARK:
Darling .- Taxfree loans to an amount of £40,500,000 have been floated. The interest payable on £750,000,000 of the public debt is £27,000,000 per annum, and that interest is free from any additional tax imposed since 1931. During the intervening period, taxes have been increased by 60 per cent. The Government should tax this interest at the present rates, and thus effect a considerable saving, amounting to probably many millions of pounds. The matter is of vital importance, and should not be overlooked by the Government when searching for new avenues in which to raise money for the prosecution of the war. {: #debate-55-s1 .speaker-KX7} ##### Mr WARD:
East Sydney .- I take it that on this vote we may discuss invalid and old-age pensions. {: #debate-55-s2 .speaker-KYI} ##### The CHAIRMAN (Mr Prowse:
FORREST, WESTERN AUSTRALIA -- The honorable member may discuss the administration of the department. {: .speaker-KX7} ##### Mr WARD: -- I have a good deal of criticism to level against the administration of the Pensions Department, not so much in regard to the manner in which the majority of the officers discharge their duties, as with respect to the practice now generally adopted by the department in dealing with claims. The number of applications rejected recently, and the number of pensions cancelled upon medical -review, would lead honorable members to believe that an instruction had been issued to the department to curtail expenditure wherever possible. It would appear that the Government desires to cut down the expenditure on pensions, particularly invalid pensions, but is not prepared to interfere directly, preferring to adopt a more subtle method, without making the public declaration that economies are being effected. Quite recently, in my electorate, and doubtless also in other electorates, many invalid pensioners have been called up for medical review. Some of them have been receiving the invalid pension for a number of years. Their state of health, with advancing years, would be worse now than when the pension was originally granted. Despite that, however, the doctors have suddenly discovered that they are not totally and permanently incapacitated, and their pensions have been cancelled. Some doctors seem to have a strange idea of what constitutes total and permanent incapacity. Recently a case came under the notice of the Deputy Commissioner of Pensions in New South Wales, by whom it was referred to the central office in Canberra. It was that of a young girl who suffered from epileptic seizures. The pensions doctor would not certify her as totally and permanently incapacitated, and when her case was reviewed this finding was upheld. Shortly afterwards, the girl had a seizure on a south coast railway station and fell on to the track and, but for the heroism of her male companion, would probably have been killed. The facts were brought under the notice of the Pensions Department, which was able to verify them by reference to the railway authorities. The department said that the seizures were not of sufficient frequency to justify the payment of a pension, though the evidence was that they were so frequent of late that the girl's parents would not allow her to go out unattended. It had often happened that she had had attacks, and had been brought home by strangers. I should like the Treasurer to give a direction that in all cases of proved epileptic seizures no question of definitions should be raised, but that the pension should be paid upon application. There is no doubt that during recent months the attitude of the department towards applicants for pensions has changed. I am not a medical man, but I can 'tell whether a person is suffering from some visible disability. The regulations should be amended to permit of the favorable review of cases in which applicants have been refused pensions. When an application has been refused, the department insists, before reconsidering the case, that the applicant shall obtain a certificate of total and permanent incapacity from a private medical practitioner. This costs money but sometimes, even though the applicant returns armed with two or three such certificates, no notice is taken of them, and he is again examined by a government doctor, often by the same doctor who turned him down before. Legislation should be passed to provide for the setting up of a panel of doctors or, at any rate to require the pensions authorities to pay some attention to the opinions pf private doctors who have certified that an applicant is totally and permanently incapacitated. In the opinion of the department, a person who has lost a limb is not totally and permanently incapacitated, and, therefore, is not entitled to a pension. In my opinion, some regard should be had to the occupation previously followed by the applicant. If a navvy, for instance, loses an arm or a leg when he is 40 years old or more, it is ridiculous to say that he is not totally and permanently incapacitated. He is then too old and unadaptable to learn another occupation. If an inmate of an institution applies for and obtains a pension a contribution is not made towards the cost of his upkeep by the Commonwealth authorities, but if he is in receipt of a pension before entering the institution, all but 6s. a week of the pension is paid over to that institution. When a pensioner who contributes to a hospital fund enters hospital, the department immediately stops his pension for 28 days, and then resumes payment to him at the rate of 6s. a week until he is discharged. Afterwards, the pensioner must make personal application to the hospital authorities for the return of the money deducted from his pension and paid to them. This provision should be abolished, and the pensioner should receive his full pension whether in hospital or out of it. He should be left to make his own arrangements with the hospital. {: #debate-55-s3 .speaker-JSC} ##### Mr BRENNAN:
Batman .- Supplementary to what has just been said by the honorable member for East Sydney **(Mr. Ward),** I recommend that a change be made in the present method of medically examining applicants for the invalid pension. I understand that in Melbourne the practice is to retain a certain number of doctors in the exclusive employ of the Pensions Department, but there are other medical men, some of them eminent in their profession, who have pensions cases allotted to them. I know of one woman applicant for a pension who was certainly sick and, I as a layman, should say permanently sick. She was sent for examination to a prescribed medical practitioner, an eminent man in his profession, who had a long list of patients waiting to see him on the day she called, with the result that she was waiting there for hours before receiving attention. Pensioners are not workhouse mendicants of a bygone century. I can understand the point of view of the medical practitioner, but Parliament should concern itself primarily with the comfort and convenience of applicants for pensions. They should not be regarded as negligible persons who are to receive attention only after every one who can afford to pay has been dealt with. There should be sufficient medical men in the employ of the department to prevent delays of that kind. They should make appointments, suitable, of course, to their own convenience, but primarily suitable to the convenience of the sick applicants for pensions. That is a matter upon which reform is urgently needed. I do not think that the private practitioner, who is busy with hi3 patients, is the most sympathetic examiner of applicants for pensions. A doctor, whose sole duty is to examine applicants, and who is part of tlie departmental machine, would develop a better understanding of the factors which entitle an applicant to an invalid pension. {: #debate-55-s4 .speaker-JPN} ##### Mr BLACKBURN:
Bourke -- I take advantage of the presence of the Minister for Social Services **(Sir Frederick Stewart),** to draw attention to two matters in which the administration of the invalid and old-age pensions system is unfair to applicants for pensions. One of them has been dealt with to some degree by the honorable member for East Sydney **(Mr. Ward).** The act provides that a person shall not be eligible to receive an invalid and old-age pension unless he is permanently incapacitated, and a regulation has expanded the phrase to " permanently and totally incapacitated ". The construction which the Pensions Department has placed upon the phrase is that if a person be physically capable of doing any class of work, although there may be no demand for his services, he is not permanently and totally incapacitated. In my opinion, such an interpretation is wrong. In tho Workers' Compensation Act of New South Wales, a similar phrase appears, namely, " permanently and totally disabled ". The High Court has held that the expression quoted means that a person is permanently and totally disabled if he is physically incapacitated from ever earning by work any part of his livelihood. This condition is satisfied when capacity for earning has gone, except for the chance of obtaining special employment of an unusual kind. It is no answer to his claim to contend that he could obtain special employment of an unusual kind. That attitude of the Pensions Department is that if a person is physically capable of doing any class of work, whether or not there be a demand for his services in that capacity, he is not, within the meaning of the act, permanently and totally incapacitated. I have known more than one instance where a young woman has, by her liability to epileptic fits, been unable to keep any form of employment. In her own home, where there was no demand for her services, she could wash dishes or scrub floors, because whenever she suffered a seizure she could receive immediate attention. But she could not keep any employment, because people would never know when she would be likely to have a seizure. She is permanently and totally disabled from earning her livelihood by labour. The Pensions Department declares, however, that she is not permanently and totally incapacitated to do certain work. To be " permanently and totally incapacitated " seems to the department to mean to be "physically unable to do anything whatever at any time ". Such an interpretation of the act 13 unwarranted, and I ask the Minister for Social Services **(Sir Frederick Stewart)** to place a more sympathetic construction upon it. In another respect, the Pensions Department is wrong in its attitude to applicants who have, at some time or other, disposed of property. A person may voluntarily and for no consideration transfer his land to a child ; the transaction is absolutely binding upon him. But the department treats the property as still belonging to the transferor, if he should happen, years afterwards, to apply for a pension. If the property were worth £400, he is disqualified from ever being able to receive a pension. A man 70 years of age possessed, in Gippsland, a considerable area of land which was heavily mortgaged. Feeling himself unable any longer to cope with the responsibility, he transferred the land, subject to the mortgage, to a nephew, who was living with him. He thought that the nephew would maintain him during his remaining years. Subsequently, the nephew married and turned the old man off the property. After he had made several unsuccessful applications for a pension, I took up the matter with the department. He had no legal claim upon his nephew to maintain him, and had not the slightest possibility of securing the return of his property. Nevertheless, the department declared that it regarded the land as still being in his possession, although it did not suggest that he had transferred it to his nephew in order to be able to qualify for the pension. The department never asserts that an applicant has deprived himself of property for that purpose. It merely declares that at some time or other, the applicant voluntarily alienated his property. He may have done so years bef ore, when he did not contemplate that he would be obliged to apply for a pension. Such an interpretation is a departure from the benevolent intention which, the legislature had when it passed the act. {: #debate-55-s5 .speaker-JVA} ##### Mr MORGAN:
Reid .- In the matter of applications to the Capital Issues Advisory Board, the Treasury seems to differentiate in favour of large concerns, irrespective of the merit of the claims of smaller enterprises. Some time ago, the Government granted financial support to a hig enterprise which is exploiting the shale-oil deposits at Newnes, and a customs schedule, which was recently prepared, foreshadows a degree of preference that will give a monopoly to that concern. Any similar companies that are in operation before August next will receive preferential treatment. The excise payable upon their production will be only 3d. a gallon, but companies registered after that date will be compelled to pay an excise of 4Jd. a gallon. At present, the Treasurer is unfairly refusing the applications of other enterprises that desire to engage in the extraction of coal from oil. It granted an application by a large oil company to which the public is asked to subscribe £2,500,000, but refused to sanction the application of Coal, Oil and By-products Limited, which required a capital of only £5,000. This money was forthcoming from persons interested in the venture. Before making the application, they spent £1,700 on conducting tests, and were gratified with the outcome. At the request of the Treasury, the sponsors of the project allowed a test to be made in the presence of the Commonwealth Fuel Advisor, **Mr. Rogers,** who expressed himself satisfied with the results. Still, he did not recommend the granting of the application; he considered that the market for coke which is one of the byproducts, was strictly limited, although on the South Coast of New South Wales the steel industry is unable to obtain adequate supplies and each week is thousands of tons short of its requirements. If this unsatisfactory position *in* not clarified shortly, I shall move for the appointment of a select committee to inquire into it. Last week end, I saw a practical test of the scheme. The coal went into a retort, and in the course of the process I saw oil emerge. There was a residue of coke of good quality. Though a layman, I am satisfied that the proposition will be a success. There is no reason why the Government should not allow such an enterprise to operate. Only by the process of trial and error can we expect to evolve an efficient scheme for extracting oil from coal. The inventor of the process, **Mr. Edwards,** spent six years in Germany, where he investigated various systems at sources that were closed to the Commonwealth expert. While thus engaged, he developed serious eye trouble and consulted a German doctor. In the course of treatment, drops were placed in his eyes and he immediately lost his sight. He has never recovered it. I leave honorable members to draw their own conclusions. The Government should immediately establish a council to co-ordinate housing and slum clearance- in the big cities. The abolition of slums in Great Britain and housing reorganization throughout the country are designed to make life brighter and better for millions. Almost revolutionary powers have been conferred upon **Sir John** Reith, who will be planner-.in-chief of the new Britain which will be created after Hitler is crushed. The appointment is hailed as a true indication that the Government will reward the millions who have shown such national devotion and endurance during days and nights of intensive bombing. The Housing Board of New South Wales has reported that there are at least 30,000 homes in the City of Sydney and in immediately adjacent municipalities which were erected many years before buildings were subject to architectural supervision, and control by the health authorities. They have long outlived their usefulness, and their existence, together with the manner in which they have been densely crowded on almost every available square foot of land, forms a major housing problem for Sydney. It is almost an axiom that a slum district eventually spreads and engulfs adjoining areas. Unchecked, the blight can spread with astonishing rapidity. The States are powerless to abolish slums without financial assistance from the Commonwealth. I hope that this matter will be attended to immediately; it should not become a post-war problem. {: #debate-55-s6 .speaker-KX7} ##### Mr WARD:
East Sydney .- At present, persons in receipt of the maximum rate of pension are entitled to receive from outside sources 12s. 6d. a week. If that amount be exceeded, their pension may be reduced. In my opinion the Government should be more liberal, and permit them to earn a few extra shillings before their pension is affected. I endorse the appeal of the honorable member for Bourke **(Mr. Blackburn)** on behalf of applicants who, years ago, purchased blocks of land which they have not been able to sell. Such properties are not assets, but liabilities. The pensioners have to struggle to pay the rates which often fall into arrears, and accumulate. In assessing the eligibility of applicants for the pension the Government should disregard the possession of nonincomeproducing property, such as a vacant block of land. *Sitting suspended from 12 midnight to 12.20 a.m. (Thursday).* *Thursday, 12 December, 1940. [Quorum formed.]* {: #debate-55-s7 .speaker-KYI} ##### Mr PROWSE:
Forrest -- I have long held the opinion that an old-age pensioner should be allowed to earn more than 12s. 6d. a week without suffering a corresponding reduction of his pension. A concession such as this would not be very costly, but it would greatly improve the lot of pensioners. I was glad to hear the honorable member for East Sydney **(Mr. Ward)** make the constructive suggestion that old-age pensioners should be allowed to earn up to £1 without interference with the pension rate. The time is ripe for the granting of this concession. If pensioners were permitted to supplement their pensions by accepting employment in places where they would be kindly treated they would be better off not only monetarily but also physically. It seems absurd that a pensioner may not earn more than 12s. 6d. a week without suffering a proportionate reduction of his pension. {: #debate-55-s8 .speaker-KLL} ##### Mr MAKIN:
Hindmarsh -- I join with the honorable members for Forrest **(Mr. Prowse)** and East Sydney **(Mr. Ward)** in urging that there should be a liberalization of the administration of the Pensions Act. I agree with the suggestion that old-age pensioners should be able to earn up to at least £1 a week without suffering a reduction of their pension rate. At present the pensions legislation operates very unfairly on those who wish to try to help themselves. Rising costs are increasing the difficulties of pensioners and they should be encouraged to supplement their pensions in this way. Grave hardship is inflicted on the parents of invalid pensioners of adult. age because in assessing the pension rate, the department has regard, not to the needs of the pensioner, but to the income of the home. Although the pensioner is of adult age the administration still regards him as a dependent child and assesses his pension in accordance with the family income. The Minister for Social Services should institute an inquiry to see if it is not possible to ameliorate in some degree the harshness of the act in this regard. I bring under the notice of the Government again the case of a man earning a little above the basic wage, whose wife has been an invalid for fifteen years and for the last seven and a half years has been bedridden. The nature of her infirmity requires the services of somebody to care for her during her husband's absence at work and the employment of a masseur to ease the pain. In assessing the rate of pension paid to this unfortunate woman no allowance is made for the cost of these services. The Minister should give serious consideration to the desirability of amending the act in order to provide that, in assessing the rate of pension to be paid, the cost of services of this kind shall be deducted from the income of the husband. {: #debate-55-s9 .speaker-KA9} ##### Mr JOLLY:
Lilley .The total vote for the Department of the Treasury is increased by £182,000 as compared with the vote for last year. That represents an increase of over 20 per cent. I can readily understand that the enlarged scope of the Taxation Department is mainly responsible for the higher vote. I should like information concerning the increased . vote for office requisites and equipment for the taxation office. Last year £12,210 was provided for this purpose, but. this year the vote is £79,480, which represents an increase of over 600 per cent. Some explanation of the large increase of that vote is due to the committee, lt would be of interest to honorable members if the Treasurer could state the approximate cost of operating the new system of collecting income tax by instalments. The vote for the taxation office this year increased by £167,400, and it appears that most of this increase can be accounted for by the institution of the system of tax collection by instalments. I regret that when I have asked for information regarding votes in the past Ministers have rarely replied to my inquiries. In the interests of this Parliament, I again urge that, at the earliest possible moment, the Public Accounts Committee should be reconstituted. Such a body could make a calm and thorough examination of all these votes. It is scandalous that we should be expected to rush through appropriations of large sums of money in this way. I appeal to honorable members to take something more than a passing interest in the huge sums we are called upon to vote every time the Estimates are before us. On this occasion we are being asked to pass a budget running into the abnormal sum of £1S6,000,000 without being given an opportunity to make a careful and complete analysis of the items contained in it. {: #debate-55-s10 .speaker-F4T} ##### Mr FADDEN:
Darling DownsTreasurer · CP -- The increased vote for the Department of the Treasury is entirely due to the instalment plan of income tax collection. The cost of that plan this year will be about £140,000; next year, it is expected to exceed £200,000. Extra equipment is required for the use of officers engaged in the collection of income tax by instalments. With regard to the suggested reconstitution of the Public Accounts Committee, if the honorable member will be patient a little longer I think that he will be rewarded. {: #debate-55-s11 .speaker-JUQ} ##### Mr CLARK:
Darling .I appeal to the Government to make a more liberal provision to meet cases of hardship among pensioners who, while owning their own homes, are obliged, for health or other reasons, to live in some other locality. Under the existing procedure, such a pensioner, who may be able to let his own home for 15s. a week, while having to pay £1 a week for a house in another locality, is subjected to a reduction of his pension, notwithstanding the fact that his housing is involving him in extra cost. Pensioners who have to incur additional housing costs in such circumstances should not be required to suffer the further disadvantage of the reduction of their pension. I have submitted cases of this kind for the consideration of officers of the Pensions Department and they have agreed with my views. I hope that the Minister will give sympathetic consideration to this complaint. Another unfair charge against pensioners, particularly women, has relation to cases when a husband may be earning up to 32s. 6d. In such circumstances half of the husband's earnings are regarded as the income of the wife. A pensioner is allowed to earn 12s. 6d. a week at present without suffering a reduction of pension. I suppose that when the new rate of 21s. a week comes into operation that amount will be increased to 13s. 6d. a week. It seems to me to he most unfair that an invalid pensioner wife of a man earning 33s. 6d. a week should have half of her husband's income set off against her pension. The requirements of an invalid wife are a heavy drain on the family income, for she needs medicine and medical attention, and I hope that the regulation by which the half of a husband's earnings are regarded as the income of his invalid pensioner wife will be amended. An unsatisfactory arrangement is also in vogue in respect of pensioners who hold life assurance policies payable at death. The surrender value of these policies is taken into account in computing the amount of pension payable. It is unjust that pensioners who, during their working lives, have made some provision of this kind for their old age should be called upon to suffer for it. This grave injustice should be remedied. A more liberal interpretation of the Pensions Act in this connexion is highly desirable. {: #debate-55-s12 .speaker-KV7} ##### Sir FREDERICK STEWART:
Minister for Social Services · Parramatta · UAP -- I remind honorable members, who have referred to certain invalids who have not been able to obtain a pension, that the act specifies that a condition precedent to the granting of such a pension is that the claimant must be totally and permanently incapacitated. This provision, and also the present interpretation of it, has continued throughout the history of our pensions legislation. Obviously if is a matter for medical judgment whether a person is or is not totally and permanently incapacitated. I do not think that any one would suggest that the final decision in such a matter should rest with the local medical advisers. Their opinions should be subject to review by departmental medical referees. A conflict of opinion sometimes occurs between district medical officers and departmental medical officers, but it is entirely incorrect to suggest, as some honorable members have done during this discussion, that the departmental attitude has recently become more rigid with the result that less generous treatment is given to claimants for pensions. The contrary is the case. I have personally arranged, in a number of instances, that a medical board shall inquire into claims submitted to the department in respect of which there has been a conflict of medical testimony. The claimant's medical attendant has invariably been made a member of the board. I propose to continue that policy. I have in mind at least one case submitted to me by the honorable member for East Sydney **(Mr. Ward)** in which I have arranged for a board of that kind to act. If the honorable member will furnish the details of the case he referred to this evening I shall consider whether it is appropriate for investigation by such a board. {: .speaker-KZX} ##### Mr George Lawson: -- I suppose the Minister is prepared to appoint such boards in any of the States? **Sir FREDERICK** STEWART.Boards will be constituted wherever there arc cases appropriate for their consideration. Reference has been made to the medical treatment of pensioners in public hospitals. The. arrangement whereby the first 28 days' pay of a pensioner who enters hospital is retained in order that it may be handed to him when he is discharged from the hospital, is surely in his interests, for by this means a certain amount of money is available to meet the expenses of convalescence. I shall give careful thought to the remarks of the honorable member for East Sydney in this connexion. I shall also give close attention to the remarks of the honorable member for Bourke **(Mr. Blackburn)** and the honorable member for Forrest **(Mr. Prowse).** Obviously, in a department which deals with more than 300,000 pensioners, a strict adherence to rules and regulations must cause hardship in some cases, but I assure honorable members, without reservation or equivocation, that if it is possible to remove hardships by the exercise of ministerial discretion, that course will be followed. {: #debate-55-s13 .speaker-KJQ} ##### Mr JAMES:
Hunter .I have been pleased to hear the remarks of the Minister for Social Services **(Sir Frederick Stewart). His** action in appointing medical boards to consider cases in which a conflict of medical opinion occurs will be welcomed by all sections of the community. Unfortunately, some pensioners are still being treated harshly by government medical officers. I have in mind certain cases in the West Wallsend district. A new government medical officer was appointed some time ago' in that locality, and because of the feeling that gained currency that he was treating pensioners harshly I was asked to attend a deputation on the subject with the president of the Lake Macquarie Shire Council, **Mr. Pearce.** The medical officer remarked that it had been stated that a racket was going on- in the district in regard to pensioners. I said to him, "Are we to understand that it has been determined to deprive persons of their pensions indiscriminately ? " He replied, " Ah well, I would not say that". Councillor Pearce said, "It is remarkable that two invalid pensioners who had been in receipt of the pension for a number of years died within a few months of having been refused further pension payments on the ground that you, as the Government medical officer, were of the opinion that they were able to work ". The statement by the Minister to-night concerning the creation of a medical board of appeal for claimants of pensions is gratifying, and shows that there is hope for a more humane administration of the act. On and off for the last seven years, I have had a notice on the business paper of this House to the effect that section 227i of the Invalid and Old-age Pensions Act should be repealed. That section, which was enacted at the instigation of the first Lyons Government in 1932, provides that applicants for the pension who are being adequately maintained by parents, brothers, sisters or certain other specified relatives, shall not he eligible for a pension. This provision has caused a great deal of hardship. Unfortunately, it has not been practicable for me to get a vote of the House on my motion. I have submitted my motion in several Parliamentary sessions, but after the Minister has replied to my remarks he has obtained leave to continue his speech at a later date, and that has been the end of the matter. I believe that if a vote could have been taken on this issue a few years ago my motion would have been agreed to. Every other iniquitous amendment of the Invalid and Old-age Pensions Act introduced by the Lyons Government in 1932 has now been repealed. I can see no reason why relatives of invalids who are themselves on the basic wage, plus £13 a year for each dependent child, should he obliged to maintain their unfortunate relatives without a pension. When the Invalid and Old-age Pensions Act was introduced it was laid down that an applicant for a pension must be sixteen years of age or over. The legislature at that time must have held the view that a parent supporting an invalid child over the age of sixteen years was entitled to some help. Parents who have the responsibility of maintaining an invalid child, and who receive no assistance from the Government, are suffering a severe hardship. In addition to the fact that they receive no aid by way of pension for invalid children, they are not allowed for income tax purposes the statutory exemption of £50 for each child. Surely, when an exemption of £50 is allowed for children under the age of sixteen years, it is reasonable to ask that a similar exemption be granted in respect of children over the age of sixteen years who are invalid or unemployed. The act specifies that an invalid child living in his parents' home is not entitled to a pension if the parent earns the basic wage and is in receipt of £13 a year in respect of each child under the age of sixteen years living at home. No parent could be expected to force his offspring to leave the home in order to qualify for a pension. I do not ask the Minister to give aid to parents with adequate incomes; by that I mean an income of £500 a year. I ask him at least to specify a certain income below which parents will be eligible for assistance ; that level should not be less than £9 a week, plus £13 a year for each child. I hope that the Minister will yield to my representations. Section 22 *h* was inserted in the act in 1932. Every other iniquitous section has been repealed; why this one has been allowed to remain I do not know. In 1932 the first Lyons Government laid it down that children earning £6 or £7 a week must contribute towards the support of their parents. That was an unpopular provision, because many people were affected by it. Therefore, before the Government faced the electors in 1934, it repealed that provision in order to gain favour. Those who were affected by the provision objected to it because they were prepared to assist their parents voluntarily and resented any suggestion of compulsion. The decision to repeal that section of the act was merely a vote-catching device on the part of the Lyons Government - an act of political expediency suggested by the old slogan, " The greatest good for the greatest number ". If the Government were just it would consider not only the good of the greatest number but also that an injury to .one is an injury to all. The few who suffer from legislative injustices are not sufficiently numerous to be able to cast an effective block of votes at election times. The Government considered that it was not worth while to legislate for the few parents who were required, without assistance, to support invalid children. I admit that in the trade union movement there has always been the same tendency to work only for the good of the greatest number, leaving a few unfortunate individuals to suffer. No man worthy of the name would refuse to help indigent parents who had made sacrifices in order to give him a start in life. If the Minister for Social Services **(Sir Frederick Stewart)** and the Treasurer **(Mr. Fadden)** have any humanity in them, I believe that they will take action to repeal section 22 *h* of the Invalid and Old-age Pensions Act. A former schoolmate of mine is suffering from this provision. He is now 55 years of age and lives with his widowed mother, who is 80 years of age. His father was thrifty and invested in property from which his mother obtains a weekly rental equivalent to the basic wage. So long as he continues to live beneath his mother's roof, he is ineligible for the invalid pension. I know of dozens of similar cases. Nobody could justify the continuance of this provision. If anybody deserves assistance it is the man supporting an invalid child while struggling to maintain a decent home. {: #debate-55-s14 .speaker-KV7} ##### Sir FREDERICK STEWART:
Minister for Health and Social Services · Parramatta · UAP -- The honorable member for Hunter **(Mr. James)** will appreciate that it is not possible for me to give an off-hand undertaking in response to his request. But I promise to investigate any specific cases in which the section of the statute to which he referred is considered to be imposing any hardship. Since I assumed control of this department, the "adequate maintenance " provision of the act has been liberalized and, I may add, without any beating of drums in the process. That will continue to be the attitude of the department so long BS I administer it. Proposed vote agreed to. Department of the Attorney-General. *Proposed vote,* £234,600. {: #debate-55-s15 .speaker-KX7} ##### Mr WARD:
East Sydney -- I wish to refer to a matter under Division No. 33, the High Court. Some time ago the Chief Justice was relieved of his duties on the High Court bench and sent, as an ambassador of this country, to Japan. I have no criticism to offer of the appointment of an ambassador, but I object to the Government's choice of the man to fill that office. I believe that a selection more acceptable to the people could have been made. In my opinion **Sir John** Latham has no special qualifications for this diplomatic position. He paid one visit to Japan on what was termed a good-will mission from Australia. The **CHAIRMAN (Mr. Prowse).Will** the honorable member inform me how he connects these remarks with the proposed vote? {: .speaker-KX7} ##### Mr WARD: -- Division No. 33 of the proposed vote deals with the High Court and, as the result of the appointment of the Chief Justice to the new ambassadorial post in Japan, a vacancy for a High Court judge now exists. Criticism can be justly levelled at the Government for making the appointment. It is wrong practice to appoint a Justice of the High Court to another position and, at the same time, permit him to retain his status as a member of the High Court bench. He should do as the honorable member for Barton **(Mr. Evatt)** did when he became a member of this Parliament; he should resign his office. {: #debate-55-s16 .speaker-10000} ##### The CHAIRMAN: -- The honorable member would be in order in discussing that aspect of the matter, but not the fitness of the Chief Justice to occupy his new position. {: .speaker-KX7} ##### Mr WARD: -- The action of the Government establishes a bad precedent. The individual concerned, no matter who he might be, should be made to decide whether he desires to retain his existing position or remove his public activities to another sphere. The Chief Justice should either be replaced by another ambassador, or be asked to retire from the High Court bench and thus make a vacancy for a fresh appointment. {: #debate-55-s17 .speaker-JLZ} ##### Mr ANTHONY:
Minister assisting the Minister for Commerce · Richmond · CP -- The Attorney-General is not in the chamber to answer whatever points may be raised, and it is difficult for me to furnish satisfactory replies. If it were possible, I should be glad to oblige the honorable member. Proposed vote agreed to. Department of the Interior. *Proposed vote,* £462,100. {: #debate-55-s18 .speaker-KLL} ##### Mr MAKIN:
Hindmarsh -- Two years ago, a child of **Mr. and Mrs. James** William Raven, of North Largs, South Australia, went to England. The parents now desire to secure the child's return to Australia as an evacuee, because of the danger to its safety and welfare in the United Kingdom. If other children are to be 'brought to Australia as evacuees, equal treatment should he accorded to Australian children. This child is a minor. I believe that the parents are not in a position to pay the full amount of the passage money, and desire to be granted an assisted passage if the child cannot be returned as an evacuee. The department has refused to consider their proposition. The adoption of this adamant attitude is most unfortunate. The case has been recommended to me by the Port Adelaide and District Justices' Association. I feel confident that it would not have been presented had it not merited consideration. I shall be glad if the Minister for the Interior will have the matter further investigated and considered. {: #debate-55-s19 .speaker-JLZ} ##### Mr ANTHONY:
Minister assisting the Minister for Commerce · Richmond · CP -- If the honorable member for Hindmarsh will supply me with the full details, I shall personally place them before the Minister for the Interior. {: #debate-55-s20 .speaker-JUQ} ##### Mr CLARK:
Darling .At the present time, there is a good deal of dissension and discussion among various State interests, with reference to the use of the waters made available under the River Murray waters scheme. The diversion of the waters of the Snowy River to the coast of New South Wales has been suggested; persons in the western portion of the State have demanded the augmentation of the water supply in that area by the use of the waters of the Snowy river. The River Murray waters scheme, and irrigation generally, should be administered by Commonwealth, instead of by State, authorities. If national needs were the governing factor, there would be no bickering by conflicting interests in regard to the use of these waters. I should like the Commonwealth to give immediate consideration to the adoption of this proposal. The railway between Port Pirie and Broken Hill is a narrow-gauge line. At the present time, there is considerable traffic of iron ore and steel between Whyalla and the munitions industries that are being established in South Australia, and the steel indus try at Newcastle and Port Kembla. In view of the urgent demand for the greatest use to be made of available shipping, the railway which runs through Broken Hill to the eastern States should carry a much larger volume of traffic. In order to achieve maximum efficiency, the break of gauge should be eliminated.' This matter has been discussed for a considerable number of years. A few days ago, in response to a question that I asked in this Parliament, I was informed that **Sir Harry** Brown is to lead a committee of investigation into this proposal. I should like the Government to regard as urgent the laying of a third rail, or of standardizing the gauge from Port Pirie to Broken Hill. This would make a good deal of shipping available between Adelaide and the eastern States, and would also be an insurance against any hold-up of shipping because of the activities of raiders and the laying of mines off the coast. The cutting off of ore supplies from the great steel industries would he a grievous happening. In present circumstances, considerable delay would occur in the transfer of the traffic load from one gauge to another. A great deal of unemployment exists in Broken Hill at the moment. The unemployed are more or less isolated, as there is little opportunity to absorb them in that city. They number about 1,000 or more. A large percentage of them could be employed on the conversion of this line, and this would bring some measure of comfort and happiness into their homes, in addition to doing a great national service. It is one of the most essential works at the present time, and the Government should proceed with it. {: #debate-55-s21 .speaker-JLL} ##### Mr ABBOTT:
New England -- The amount voted last year in respect of motor vehicles, under the heading " General Expenses ", Item 11, was £12,000, and nearly £16,000 was expended. This year, provision is made for an expenditure of £14,000. The expenditure in relation to the military, naval and air forces has increased enormously, and it might be a good thing to prune some of the other items; they should not automatically rise because of war conditions. {: #debate-55-s22 .speaker-JNM} ##### Mr BADMAN:
Grey .I listened with interest to the honorable member for Darling **(Mr. Clark),** advocating the continuance of the 4ft. 8£in. railway gauge from Port Pirie to Broken Hill. This is a most urgent national work, and it should be carried out as soon as possible. For some considerable time, the honorable member for Maribyrnong **(Mr. Drakeford)** has been advocating the standardization of the railway gauges of Australia. It may not be possible to undertake the whole of the work at the present juncture, but as soon as possible the link between Port Pirie and Broken Hill should be completed. There is a standard gauge from Kalgoorlie to Port Pirie, a distance of about 1,107 miles. The standard gauge has also been laid from Broken Hill to Sydney, another 700 miles, but there is a break of 260 miles between Port Pirie and Broken Hill. From Sydney to Brisbane there is a standard gauge line of 613 miles. The construction of the link between Broken Hill and Port Pirie would give an unbroken length of standard gauge from Brisbane to Kalgoorlie, a distance of 2,680 miles; or, turning southward to Albury, 2,457 miles. The removal of breaks of gauge, which interrupt the transport of troops, goods or armaments from one portion of Australia to another, is of tremendous importance from a defence point of view. The Government should, if possible, provide for the conversion to standard gauge of the line between Broken Hill and Port Pirie. Failing that, it might be sufficient to lay a third rail. The South Australian Government regards the line from Broken Hill to Port Pirie as the most payable in the State. It is jealous of the revenue which it receives from that line but, for national and defence reasons, we cannot allow any State to hold up this necessary undertaking. There are many objections to the third rail system, and engineers have reported against it over and over again. The fact remains, however, that it does work, and is working at present in many railway yards in South Australia. One great advantage of converting to standard gauge the line between Broken Hill and Port Pirie would be that the same rolling-stock could be used right from Brisbane to Kalgoorlie. We have been told that the Commonwealth railways have not sufficient rolling-stock for ordinary purposes. It may be that there is some in New South Wales that could be used on the Commonwealth line, if necessary. It is essential, in the interests of national safety, particularly at this time, that this section of line should be converted to the standard gauge in order that troops and war material may be moved freely from one State to another. {: #debate-55-s23 .speaker-BV8} ##### Mr CALWELL:
Melbourne -- I support the representations of the honorable member for Darling **(Mr. Clark)** and the honorable member for Grey **(Mr. Badman),** regarding the standardization of the railway gauge between Port Pirie and Broken Hill. The argument that such conversion would enable New South Wales rolling-stock to be used on the Commonwealth line is probably the most important of all. If Western Australia should be attacked by an enemy, it would at present be impossible to send troops and war equipment to defend that State without tremendous delay due to transhipment at points where there are breaks of gauge. At the present time there does not seem to be enough rolling-stock on the Commonwealth line to meet ordinary traffic requirements. I understand that a conference of Railway Commissioners for New South Wales, Victoria, and South Australia discussed this subject of a standard gauge recently, but State jealousies were so strong that no agreement could be reached. The State Governments are opposed to the project for purely selfish reasons. I suggest that the Government should use its war-time powers, and do the job regardless of the wishes of any State. Too much deference is being shown to the feelings of some State Ministers, and it does not follow that the best interests even of the States concerned are being served. {: #debate-55-s24 .speaker-L08} ##### The TEMPORARY CHAIRMAN (Mr Rosevear:
DALLEY, NEW SOUTH WALES -- There is a special vote covering Commonwealth railways, and these matters may be discussed when that vote is before the committee. There is nothing under the heading of the Department of the Interior that has to do with railways. {: .speaker-BV8} ##### Mr CALWELL: -- I trust that members of the Government have been duly impressed by what has been said on the subject, and I hope that the work will be undertaken without delay. {: #debate-55-s25 .speaker-JLZ} ##### Mr ANTHONY:
Assistant Minister for Commerce · Richmond · CP -- The honorable member for Darling **(Mr. Clark)** referred to the river Murray waters undertaking, but I remind him that this work is controlled, not by the Department of the Interior, but by the River Murray Waters Commission, composed of representatives of the States and Common'wealth. Whilst I admit that his remarks have point, the fact is that the Commonwealth alone can take no action. The Snowy River undertaking would also be a matter for the State authorities alone. Now, regarding the break of railway gauges- {: #debate-55-s26 .speaker-10000} ##### The TEMPORARY CHAIRMAN: -- I have already ruled that that subject may not be discussed under the vote now before the committee. {: .speaker-JUQ} ##### Mr Clark: -- The construction of railways is the responsibility of the Department of the Interior. The TEMPORARY CHAIRMAN.There is a separate vote covering Commonwealth railways, and the matter can be discussed under that. {: .speaker-JLZ} ##### Mr ANTHONY: -- When that vote is before the committee, I shall reply to the points raised regarding railway gauges. The honorable member for New England **(Mr. Abbott)** asked why expenditure on cars used by officers of the Department of the Interior had increased so greatly. That increase has been brought about because the department is responsible for the construction of defence work in various parts of Australia, and cars are used by officers to supervise the work. {: .speaker-KA9} ##### Mr Jolly: -- Would not the cost of such supervision he covered by the defence vote? {: .speaker-JLZ} ##### Mr ANTHONY: -- Not all of it. Proposed vote agreed to. Department of Defence co-ordination. *Proposed vote,* £97,600. {: #debate-55-s27 .speaker-JPN} ##### Mr BLACKBURN:
Bourke -- Regulation 26 of the National Security (General) Regulations is as follows : - 2(i. - (1.) The Minister may, if satisfied with respect to any particular person, that with a view to prevent that person acting in any manner prejudicial to the public safety or the defence of the Commonwealth it is necessary so to do, make an order - {: type="a" start="c"} 0. directing that he be detained in such place, and under such conditions, as the Minister from time to time determines, and any person shall, while detained in pursuance of an order made under this subregulation, be deemed to be in legal custody. That was enacted in the temporary regulations when war first broke out, and before the National Security Act was passed. When the act was under discussion, many of us here, who did not know as much then as we know now, thought that section 13 was a safeguard of civil liberty. It authorized a Commonwealth officer, or a person authorized by the Minister, to arrest any one suspected of having committed, or of being about to commit, an offence. It was agreed that he could be detained for ten days only before he was brought to trial. We now find that that is not the case, because regulation 26 takes away the right of *habeas corpus* altogether by enabling the Minister to cause the arrest of any person. At present, I understand, this power is used only against naturalized subjects and aliens, but the regulation says that any person may be taken into_ legal custody. If I were arrested by order of the Minister and flung into gaol, my friends, if they applied for a writ, of *habeas corpus,* could be informed that I was being detained under the direction of the Minister. This section was discussed recently by the Pull Court of Western Australia in a case which was referred to in the September issue of the *Australian Law J ournal.* The person who was interned, Salvatore Paino, was a naturalized British subject of Italian birth, but it was held that the regulation applied to " any person ", and was not restricted to aliens or naturalized British subjects of alien extraction. Though counsel for Paino contended that the regulation was inconsistent with section 13 of the act which safeguards the right of citizens against such arrest, the Full Court of Western Australia took the opposite view. It declared that following the decisions of the High Court during the last war, the executive had the right to deprive a citizen of recourse to a writ of *habeas corpus,* and considered that section 13 and regulation 26 (1) had an entirely distinct operation. Section 13 applied only where it was intended to bring a civil charge against a person; regulation 26 (1) operated where the Minister intended to keep a man in legal custody, because his being at liberty was deemed to be contrary to the national interest. That regulation should be carefully considered by the Government. It is no answer to declare that the regulation is being used only against aliens or naturalized British subjects of alien extraction, because it can be used against any natural born British subject, resident in Australia. {: #debate-55-s28 .speaker-KA9} ##### Mr JOLLY:
Lilley .- I ask the Assistant Minister **(Mr. Anthony)** whether it is possible to prepare a memorandum explaining the system of audit that is adopted in connexion with the huge expenditure on the maintenance of fighting services. According to my information, it is the practice of the Department of Defence Co-ordination to have its own internal check; but in addition, the Auditor-General also examines the expenditure. I should like to be supplied with details of the extent and thoroughness of the cheeks. In my opinion, the Auditor-General should make a complete check of the total expenditure of the department. I congratulate the Minister for the Army **(Mr. Spender)** upon his appointment of efficiency officers, who are virtually independent permanent officials of the Department of Defence Coordination. Their duty is to investigate the work of the fighting services, co-ordinate the activities of various branches, and abolish overlapping and extravagance. A similar practice should be adopted in other departments. {: #debate-55-s29 .speaker-KCM} ##### Mr DRAKEFORD:
Maribyrnong -- The Chair has overlooked the section entitled "Defence and War (1939-40) Services ", which occurs between the Department of the Interior and the Department of Defence Coordination. {: .speaker-L08} ##### The TEMPORARY CHAIRMAN (Mr Rosevear: -- That section is merely an informative statement, and is related to the Department of the Interior. The committee has agreed to that vote. {: .speaker-JNM} ##### Mr Badman: -- I rise to order. I submit that the section "Defence and War (1939-40) Services " has not yet been dis.cussed The' TEMPORARY CHAIRMAN.I rule that it has been disposed of. {: .speaker-JTY} ##### Mr Archie Cameron: -- I contend that the Temporary Chairman's ruling is wrong. The section is not associated with the Department of the Interior. The TEMPORARY CHAIRMAN.Order! The committee is now considering the Estimates for the Department of Defence Co-ordination. {: #debate-55-s30 .speaker-JTY} ##### Mr ARCHIE CAMERON:
Barker -- I protest against the absence of the Minister for Defence Co-ordination **(Mr. Menzies),** while the Estimates for this department are being discussed. The Government should be ashamed of itself. Estimates involving £55,000,000 are now under consideration, and none of the Ministers in charge of the three fighting services is in the chamber. Such a lack of courtesy is an affront to the Parliament. Although I have a good deal to say about each of the fighting services, I do not propose to deliver my speech at this hour to an empty ministerial bench. Enormous sums of money and tens of thousands of men in the army, navy, and air force are involved in this discussion. In the circumstances, I shall not agree to the vote. {: #debate-55-s31 .speaker-KCM} ##### Mr DRAKEFORD:
Maribyrnong -- Like the honorable member for Barker **(Mr. Archie Cameron),** I consider that Ministers should be in the chamber in order to supply honorable members with information about the departments which they administer. ' The committee is not being given information to which it is entitled. Until the responsible Ministers are present, honorable members arc justified in delaying the discussion. {: #debate-55-s32 .speaker-JLZ} ##### Mr ANTHONY:
Assistant Minister · Richmond · CP -- Some of the service Ministers will be in the chamber as their departments come up for consideration. The Minister for the Army **(Mr. Spender)** has already arrived, whilst the Minister for Air **(Mr. McEwen)** has been in the chamber during the greater part of the evening. **Mr. ARCHIE** CAMERON (Barker) failure to reconcile international aims and interests, and is the outcome of nations' inability to tolerate each other's pursuit of certain aims, interests and objectives. Power to wage war depends directly upon a government's intolerance of anything that conies between it and its war objectives. All must be subjected to the one purpose of imposing the national will upon the enemy, and of resisting his attempts to impose his will on us. My own conception of a successful war-time Government is one in which war objectives and general policy are determined by Cabinet as a whole, with a small sub-committee - the War Cabinet - to make those hour-to-hour decisions demanded of any Cabinet under the stress of war, but within the general limits of objectives laid down by Cabinet itself. The War Cabinet must also provide the driving power to keep the war machine in order. Therefore, Cabinet itself must co-ordinate national policy and, inside Cabinet, the Prime Minister must be free of all departmental duties. In his mind and person must reside a knowledge of the administration of each of his Ministers, his chief function being to see that the pursuit of national war objectives is maintained, that internal security and national morale are prompted, and that all forces, persons and functions are in being, in form, in place and in time, to execute their several parts of the common task allotted to each of them. I have never been able to appreciate the reasons which prompted the division of Cabinet into a War Cabinet and an Economic Cabinet of practically equal strengths. My strong conviction is that outside the War Cabinet which must make decisions of a purely military character, and to which time, speed and secrecy are frequently the over-riding considerations, all other questions should be submitted to the general Cabinet. So that Cabinet may be able to work on special subjects in sub-committees, and for its efficient working and the securing of decisions in time, it is of the utmost necessity that it should not he dispersed to a degree which will prevent its timely concentration. It stands to reason that, in time of war, a small War Cabinet is a necessity; but the functions of a War Cabinet, to my mind, centre in the enlistment of forces, their training, equipment and supply, and their use in action, having due regard to the strategical situation. In this connexion much of the time of the present War Cabinet is devoted to questions which are not the subject for proper War Cabinet consideration at all. Such things as the pay of troops, repatriation matters, outfits to be granted to nurses, &c, are matters which come within the ambit of the general policy of the Government. I firmly believe that selection for ministerial rank depends upon the following principles: First. a man's capacity to do the job allotted to him; and, secondly, that the Minister when appointed will bring support to the team. If these qualifications are lacking in the Ministry as a whole, or in a fair proportion of Ministers individually, no number of appointments of Co-ordinators-General, boards or committees, will compensate for all the weakness which is inherent in the constitution of the Government. After all, the conduct of the war demands accuracy and speed in making decisions, unswerving pursuit of objectives, and ruthless administration in order to attain them. Only by a correct appreciation of an enemy's next move can one prepare and dispose forces to meet him. *~No* amount of outside advice, research, assistance or experience will compensate for the inefficiency or shortcomings of misfits in a Cabinet. The greatest of all qualifications for war-time government is possession of that natural intuition and war-wariness which is something with which a man is born and which is neither learnt, acquired nor inherited, and which can be neither taught, disposed of, or bequeathed. Certain questions must be answered if we are to get a proper appreciation of whither we are heading in this present conflict. I believe those questions are : What is our objective ; what forces will he needed; what supplies will they require; when and where will they be required ; what supplies will the civil population require; what supplies can we afford for others; what are our deficiencies; and what improvisations or adaptations can we make to meet them? The answers to these important questions will provide us with a clear-cut policy for the future conduct of the war. Such a policy must he capable of translation into legislative acts on the one hand, and into administrative facts on the other. The spectacle that confronts us to-night, when the committee is asked to agree to these votes by forced marches, is not a good sign. In order to devote proper time to the consideration of these matters, parliament should be asked to sit next week, if necessary. Some of the problems that confront us are so weighty that they should not be discussed in open Parliament. I refer particularly to matters relating to shipping and the safety of shipping. I deplore the way in which information in regard to shipping is bandied about. The constant publication of information of a vital character in the press is disturbing the public mind. Such information was published a week or two ago, and again this week. It is continually happening. If there are leakages in ministerial departments or in the fighting services, it is time that steps were taken to stop them. We cannot expect to wage the war to a successful conclusion if we divulge vital information to the enemy. It is surely impossible for us to win the war if every move to be made is known within a few minutes of the decision being arrived at. We have recently had a taste of what it means to be up against naval depredations round our own coast. Only recently a most complete statement of the aerial reconnaissance plans of the Department of Air was given, first exclusively to one newspaper, and then to the press generally. It is obvious that the enemy obtains his information by wireless. One has only to visit the exhibition in Sydney arranged by the Minister for the Army of documents, guns, and wireless sets captured from enemy aliens in Sydney to realize the preparations made for securing and transmitting vital information to the enemy. In that exhibition is an array of wireless sets, every one of which is capable of getting in touch with Germany and Italy by short wave. In spite of this, practically everything affecting the safety of shipping in this country is published in the press and, I have no doubt, supplied surreptitiously to the enemy within a few hours. The seals are re- moved from the wireless transmitting apparatus on neutral vessels as soon as they clear the heads. All of those vessels are equipped with apparatus which would enable them to communicate vital information to those operating against us. We do not publish ocean forecasts or information regarding the state of the sea, but we give away too much information regarding our own plans and our own weaknesses. Information of this kind may make very good reading in the press. No doubt John Citizen can take it, but the people who are really taking it in tlie neck are those who risk their lives travelling on ocean-going vessels around our coasts. Our lack of method prevalent in all too many instances to-day is leading to a state of affairs for which this country will have cause to be very sorry if it is not checked before the time is too late. If the Government wants a discussion of these things, if it wants approval of the Estimates presented in this chamber, Ministers in charge of the fighting services should be present, not merely to listen, but also to discuss with honorable members all matters in connexion with the conduct of the war. {: #debate-55-s33 .speaker-JVA} ##### Mr MORGAN:
Reid .I endorse the sentiments expressed by the honorable member for Barker. The Department of Defence Co-ordination should endeavour to act up to its name. I draw the attention of honorable members to the following cable message from Washington which was published in the *Sydney Morning Herald* last week: - >Great importance is attached to the voluntary appearance of the Secretary of State, **Mr. Cordell.** Hull, and the Secretary of the Treasury, **Mr. Morgenthau,** before the joint Senate and the House of Representatives Committee on monetae affairs yesterday before it unanimously approved the Administrator's decision to extend financial aid to China. While the exact information given by Ministers was not disclosed, it is an open secret that they convinced the committee that aid to China is likely to prove a potent factor in stopping Japanese expansion in the Far East. It is understood that **Mr. Hull** frankly discussed the possibility of overt Japanese movement against the Philippines, the Netherlands East Indies, and British possessions and dominions in the Northern Pacific. The dangerous position confronting Australia to-day is recognized by the United States of America. The Minister for the Army **(Mr. Spender)** should state what is to be the limit of our home defence services. In the early stages of the war a demand was made that as many Australian troops as possible should be sent overseas. Now, the many thousands of our troops in Britain are constituting a problem to the British Government, and our overseas commitments run into many millions of pounds. Dealing with the position in Canada, **Mr. Mackenzie** King said - >If the Government had yielded to the demand earlier in the year and had sent thousands of men overseas, it could have only saddled Britain with an additional burden. Instead, there was a balanced programme of war production, co-incident with the raising of the army, navy, and air forces. In deciding how many more troops should be dispatched overseas, the Government should take into account the possibility of invasion of our own shores. It should build up the Air Force as rapidly as possible, and also strengthen our coastal fortifications. {: .speaker-KUG} ##### Mr Spender: -- Precisely what does the honorable member suggest that the Government should do? {: .speaker-JVA} ##### Mr MORGAN: -- Call-ups for the Australian Imperial Force and for home defence should be systematized. Before further recruiting for the Australian Imperial Force is undertaken, a definite quota should be fixed for home defence, and the period of training in the home defence forces should be limited to say, three or six months, in order to enable the men to prepare for their return to civil life, keep the wheels of industry going, help to pay the cost of the war effort, and be ready for the change over when peace comes. {: .speaker-KUG} ##### Mr Spender: -- The Government is applying that policy in respect of enlistments in the home defence forces. {: #debate-55-s34 .speaker-JUQ} ##### Mr CLARK:
Darling .- I urge the Government to establish the head-quarters of the defence services in Canberra. At present, they are located in Melbourne, and Ministers are obliged to travel back and forth from Canberra to Melbourne in order to attend to administrative matters. No obstacle exists to the transfer of the defence headquarters to Canberra. That department should take over the new patents building. The staff of the Patent Office could return to the building which they previously occupied at Acton. {: .speaker-KUG} ##### Mr Spender: -- Sufficient accommodation is not available in Canberra to meet the requirements of defence headquarters. {: .speaker-JUQ} ##### Mr CLARK: -- At all events, the chief branches of the Defence Department should be stationed in Canberra. The Government should provide every facility to friendly aliens in order to enable them to serve with our defence forces. In recent years, many refugees have come to Australia in order to escape persecution in the dictatorship countries. They enjoy the protection of our flag, as well as many of the privileges of citizenship. They should be prepared to assist in the defence of this country as combatants or in any capacity in which the Government might desire to avail itself of their services. The Government, has, however given very serious consideration to this matter. Under the Defence Act, not yet naturalized persons are debarred from enlisting in our military forces. {: .speaker-KUG} ##### Mr Spender: -- It has been announced that when recruiting for military services overseas is resumed in January, friendly aliens will be permitted to enlist. {: .speaker-JUQ} ##### Mr CLARK: -- They should also share obligations in respect of compulsory military service. {: #debate-55-s35 .speaker-BV8} ##### Mr CALWELL:
Melbourne -- The honorable member for Barker **(Mr. Archie Cameron)** outlined what he described as a considered plan for the proper conduct of the war, and the more effective preparation of the defences of this *country.* Unfortunately, honorable members will not be given an opportunity to examine his proposals before the relevant item is disposed of. Consequently, his effort has been somewhat futile. That is to be regretted, because the honorable member for Barker has had considerable 'Cabinet experience. Since this Parliament assembled, honorable members on this side have repeatedly requested the Government to hold a secret session of Parliament in order to permit of the frankest discussion of our war effort. I wish to touch upon a number of defence matters, with reference to the vulnerability of certain parts of our coast, but I hesitate to do so at this stage for fear that I may not be rendering the best service to the nation. I regret very much that the Government has not seen fit to grant our request for a secret session. It may be argued that no opportunity has yet presented itself to permit of such a session being held. Only a day or so ago, the Minister for External Affairs **(Sir Frederick Stewart)** submitted a statement dealing with the international position, and at the request of the Leader of the Opposition **(Mr. Curtin)** the Prime Minister promised to set aside a special day for honorable members to discuss that subject. Now it seems that we shall not have an opportunity to do so. Following the visit of **Mr. Anthony** Eden to the British forces in the Middle East, it was suggested that the Minister for the Army **(Mr. Spender)** be sent to Egypt to see whether all possible preparations were being made for the offensive in which it is expected our Australian troops will participate within a few months. I point out that when **Mr. Eden** returned to London, not one but several secret sessions of the House of Commons were held, and according to the press, the British Parliament was told all that could bc told about the position of the British armies in the Middle East. Those sessions were held within the last fortnight. I can see no reason why this Government should not take similar action. "We have an equal interest with Britain in the maintenance of the Suez Canal. It would seem that this Government is prepared to follow Whitehall too slavishly. It has not displayed any mind of its own upon problems which we share with Britain in the defence of zones vital to the existence -of this country. Only yesterday the Prime Minister announced that an engagement had taken place in Egypt, but he was unable to say whether any Australian troops had taken part in that action. That seems to suggest some fault in the communications between our army head-quarters in Egypt and the Government in Canberra. Perhaps, the communications are being sent to London and then despatched to Australia. Our military forces overseas should be in direct contact with the Australian Government. In recent weeks honorable members have been obliged to seek out information about the war in the daily press, and through the wireless news broadcasts. I do not accuse the Government of deliberately withholding information. Indeed, I doubt very much whether it is receiving very much information in addition to that which is published in the press. In justice to our people, the Government should secure more information about our soldiers overseas, and display a greater readiness to make such information available to honorable members. In only one instance since the outbreak of war has the Government taken a purely Australian stand in connexion with the conduct of the war. That was in regard to the Burma-road incident. I am curious to know whether it is disposed to act as independently as it should in matters in which, perhaps, the tendency is to subordinate our interests to those of other portions of the Empire. I recall that when **Mr. Watt** was Acting Prime Minister, in 1918, the Commonwealth Government refused a request from the British Government that the British High Command should have the right to impose the death penalty on Australian troops in France. I should like to think that the members of the present Australian Government had the same virile outlook as **Mr. Watt.** I do not suggest that this Government would decline to support the attitude adopted in 1917-18 in this matter, but I question whether it would take a strong stand on a matter in respect of which it had no precedent. We should be given as much information as possible about current international happenings. If necessary, a secret session should be held in order that we may be fully informed of the effectiveness or otherwise of the nation's war effort. We ought to be told of the dispositions of our forces and of the productive capacity of our factories. So long as any employable persons are without work in the community I shall feel that we are not making a maximum war effort. I realize that the Government has had to face difficulties, but we have now been at war for fifteen months, and it is high time that the difficulties were overcome. Every employable man and woman in the community should be put to useful work in order to speed up our war industries. **Mr. JAMES** (Hunter) [2.33 a.m.J.I agree with the suggestion that the Minister for the Army **(Mr. Spender)** should be sent overseas in order to obtain first hand information for the Australian people. I suggest that he he accompanied by a couple of formidable batmen-. Probably the honorable member for Adelaide **(Mr. Stacey)** and **Senator Keane** would fill the bill. The **CHAIRMAN (Mr. Prowse).The** honorable member must confine his remarks to the subject before the chair. {: .speaker-KJQ} ##### Mr JAMES: -- I suggest that it would give Hitler and Mussolini a shock to see two stalwarts like the honorable member for Adelaide and **Senator Keane** mingling with our forces in Egypt, A matter to which the Minister for the Army should devote immediate attention is the wastage of foodstuffs in military camps. It is an unfortunate fact that all the food cooked for a given meal but not consumed by the troops at that meal, is wasted. I know from personal knowledge that huge roasts of beef from which not a single slice has been cut have been thrown out into waste bins. A good deal of other valuable foodstuffs is regularly given to the pigs. This waste should he stopped. Apparently, just as much food goes into the camps at week-ends, when hundreds of men are on leave, as goes in on normal days. Better supervision of contracts is required and could be achieved by the appointment of food supervisors. {: .speaker-KUG} ##### Mr Spender: -- The honorable member is incorrect in stating that the same quantity of foodstuffs is received into the camps at week-ends as on ordinary days, although I admit that some difficulty exists in determining the precise number of men who will remain in camps at week-ends. {: .speaker-KJQ} ##### Mr JAMES: -- I speak of what I know. Another matter to which I direct attention is the unfair discrimination against members of the garrison battalions in relation to railway passes. The personnel of the garrison battalions are recruited from ex-service men. Members of the Australian Imperial Force are granted return journey railway vouchers when they obtain leave; this concession is not begrudged them, but members of the garrison battalions receive a voucher for a journey only one way. Most of these men are in the garrison battalion only because they are too old to enlist in the Australian Imperial Force. The valuable service they rendered to their country during the last war should be remembered in their favour to-day. The Minister for the Army will say that he is bound by certain prescribed regulations. The fact of the matter is that he is finding himself just as circumscribed as his predecessors. If I were the Minister for the Army I should consider myself to be the prescribed authority. What I wished to do I would do. I trust that the present procedure in respect of the issue of railway passes to members of the garrison battalion will be reviewed. It is regrettable that discrimination is being shown against the rank and file of the Militia, with regard to wet canteens. Why should officers and noncommissioned officers enjoy the privileges of wet canteens while the men in the ranks are denied them? These men are entitled to ordinary civilian rights in such a matter. Discrimination in respect of an amenity like a wet canteen must inevitably cause discontent. If there were 8,000 padres in camp and they found that their bishop was able to obtain as much whisky as he desired, while they were denied such a privilege, discontent would develop among them, even though many of them were teetotallers. The Minister will doubtless say that wet canteens cannot be permitted in militia camps owing to the com* aretively youthful age of the trainees. Why, then, should members of the Air Force who, generally speaking, are younger than members of the Militia, have access to wet canteens? The Minister's attitude is not consistent. If the militia men were able to purchase a. glass of beer at the end of their day's work they would be satisfied. The fact that they cannot do so, but must save up their few " bob " until they can obtain leave and get access to alcoholic liquor outside the camps is a fruitful cause of trouble and leads in some cases to excessive drinking. Recently a considerable number of enemy prisoners arrived in Australia from Great Britain for internment in this country. Included among them were many Jewish refugees who had run away from the wrath of Hitler in Germany, and obtained domicile in England, where upon the outbreak of war some of them were interned. Among these people are some members of the German Christian Socialist movement. An Anglican clergyman of my acquaintance had some money for one of these Christian Socialists, but it was only after most exhaustive inquiries that he was able, with my help, to find out which camp the man was in. This man was strongly opposed to the Hitler regime, and it seems to me to be unjust that he should now be interned. The representations made to the Government for the release of an internee named Ziebold should be carefully considered. Ziebold was interned some time ago but, at the instigation of the late member for Kalgoorlie **(Mr. A. E. Green),** he was subsequently released. He was afterwards re-arrested and again interned. I believe that action was taken against him because of his political beliefs. There was no suggestion that he was engaged in subversive activities. {: .speaker-KUG} ##### Mr Spender: -- I think the honorable member must be in error in that regard, for our advisers in these matters confine their attention to subversive activities. A person would not be interned simply because he held certain political beliefs. {: .speaker-KJQ} ##### Mr JAMES: -- I understand that the report in regard to Ziebold stated that he was a German Communist. No section of the German people was more opposed to Hitler than the Communists. Ziebold has been in this country for years, and he married an Australian girl. Although I disagree with the views of the Communist party, its members should not be interned merely on account of their political beliefs. Progress reported. {: .page-start } page 866 {:#debate-56} ### BILLS RETURNED FROM SEN ATE The following bills were returned from the Senate without amendment or requests: - Wheat Tax (War Time) Bill 1940. Wheat Industry (War Time Control) Bill 1940 Wheat Tax (War Time) Assessment Bill 1940. Loan (Drought Relief) Bill 1940. States Grants (Drought Relief) Bill 1940. Apple and Pear (Appropriation) Bill 1940. Wire Netting Bounty Bill 1940. {: .page-start } page 866 {:#debate-57} ### SPECIAL ADJOURNMENT Motion (by **Mr. Spender)** agreed to - >That the House, at its rising, adjourn until 11.30 a.m. this day. {: .page-start } page 866 {:#debate-58} ### TARIFF BOARD REPORTS **Mr. HARRISON** laid on the table reports and recommendations of the Tariff Board on the following subjects : - >Rubber thread. > >Bounty on two-wheel tractors. > >Silk and Artificial Silk Piece Goods, hand- printing of. Ordered to be printed. {: .page-start } page 866 {:#debate-59} ### PAPERS The following papers were presented : - >Audit Act - Transfers of amounts approved by the Governor-General in Council - Financial year 1939-40. Navigation Act - Regulations: - Statutory Rules 1940, No. 260. Taxation - Twenty-second Report of Commissioner, dated 1st November, 1940, together with Statistical Appendices. House adjourned at 2.50 a.m. (Thursday). {: .page-start } page 866 {:#debate-60} ### ANSWERS TO QUESTIONS *The following answers to questions were circulated: -* {:#subdebate-60-0} #### Alice Springs-Birdum Road {: #subdebate-60-0-s0 .speaker-JPT} ##### Mr Blain:
NORTHERN TERRITORY n asked the Minister repre senting the Minister for the Interior, *upon notice -* {: type="1" start="1"} 0. Will the Minister state when it is expected that the military road from Alice Springs to Birdum will be available for light traffic? 1. Will he give instructions so that part of the road plant transported from the Main Roads Boards of the southern States may be purchased and retained in the Northern Territory ? 3.Will he instruct that part of the imported construction staff be retained in the Northern Territory so that swamps and creeks might be kept open for traffic during the wet season by providing an all-weather road? {: #subdebate-60-0-s1 .speaker-K0D} ##### Mr Collins:
CP -- The Minister for the Interior has supplied the following answers : - {: type="1" start="1"} 0. The work was completed on the 29th November, 1940. 2 and 3. This has already been arranged. Housing Reform. {: #subdebate-60-0-s2 .speaker-JVA} ##### Mr Morgan: n asked the Minister for Social Services - {: type="1" start="1"} 0. As he has indicated publicly that he is taking up with Cabinet the matter of housing reform, will be give consideration to the question of engaging a planner-in-chief on similar lines to the appointment of **Sir John** Reith by the British Government; or, alternatively, a Commonwealth Housing Council, representative of all States, which will draw up a plan toco-ordinate and proceed with housing reform, town planning, and slum clearance throughout Australia? 1. Will he also give consideration to the immediate provision by the Commonwealth Bank of adequate finance for co-operative building societies operating under the various State housing schemes? {: #subdebate-60-0-s3 .speaker-KV7} ##### Sir Frederick Stewart:
UAP -- The suggestions contained in the questions will receive due consideration. {:#subdebate-60-1} #### Service Pensions {: #subdebate-60-1-s0 .speaker-JPN} ##### Mr Blackburn: n asked the Treasurer, *upon notice -* >Will the promised increase of invalid and old-age pensions apply also to service pensions? {: #subdebate-60-1-s1 .speaker-F4T} ##### Mr Fadden:
CP -- Yes. {:#subdebate-60-2} #### Tax-Free Bonds : List of Subscribers {: #subdebate-60-2-s0 .speaker-KX7} ##### Mr Ward: d asked the Treasurer, *upon notice -* {: type="1" start="1"} 0. Will he have facilities provided for honorable members to peruse a list of subscribers to Commonwealth tax-free loans? 1. Is it a fact that a number of Ministers and members of the Government parties in the House of Representatives and in the Senate hold parcels of these bonds, which will not be subject to the additional income tax provided for in the budget of this year? {: #subdebate-60-2-s1 .speaker-F4T} ##### Mr Fadden:
CP -- The answers to the honorable member's questions are as follows: - {: type="1" start="1"} 0. No : such lists are available. 1. I am unable to say what Commonwealth securities, if any, are held by members of this Parliament. Electoral Ballot-papers : Improvement of Design. {: #subdebate-60-2-s2 .speaker-KFW} ##### Mr Guy: y asked the Minister representingthe Minister for the Interior, *upon notice -* {: type="1" start="1"} 0. Will he take action to ensure that, at future Commonwealth elections, the surnames of candidates will be printed on the ballotpapers in much larger type than under existing practice in order that candidates' names may be readily and easily seen by all electors? 1. Will he issue instructions to have the squares in front of the candidates' names mademuch larger than under existing practice in order to allow the figures to be made more legible? {: #subdebate-60-2-s3 .speaker-K0D} ##### Mr Collins:
CP -- The Minister for the Interior has supplied the following answer : - 1 and 2. Yes, so far as the State of Tasmania is concerned. It may be explained that the ballot-papers for Commonwealth elections are printed at the local government printing offices in the several States. Those produced by the Government Printing Office at Hobart for use at the recent federal elections were not up to standard, as both the type and the squares were smaller than in the samples supplied. Army Contracts: Supply of Bread. {: #subdebate-60-2-s4 .speaker-KNX} ##### Mr Harrison:
UAP n. - On Friday last the honorable member for Watson **(Mr. Falstein)** asked my colleague, the Minister for the Army, some questions relative to the price of bread being supplied to the Army by Gartrell, White Limited, of Sydney. I am able to inform the honorable member that the price of bread supplied under the contract of Gartrell, White Limited was recently investigated by the Commonwealth Prices Commissioner, who ascertained that the contract price was not below the cost of production of bread. The second question asked by the honorable member was whether Gartrell, White Limited had applied to the Prices Commissioner to fix a price for bread in excess of that accepted in the contract. Up to the present, no request has been received from the company to fix a higher price for the contract. The Prices Commissioner has under consideration, however, an application from the Master Bakers Association of New South Wales to review the prices charged for bread in certain parts of the metropolitan area of Sydney, with a view to eliminating price-cutting and restoring the maximum price fixed by the Minister for Agriculture in New South Wales on the recommendation of the Wheat Products (Prices Fixation) Committee in 1938. It is understood that Gartrell, White Limited is a member of the Master Bakers Association and, to this extent, would be associated with the increase requested by the association. As all particulars regarding the costs of the company named are confidential, I regret that I am unable to make the papers available for the perusal of the honorable member. Army Contracts. {: #subdebate-60-2-s5 .speaker-KUG} ##### Mr Spender:
UAP r. - On the 6th December, the honorable member for Dalley **(Mr. Rosevear)** asked, *without notice,* whether it was a fact that Raith's Bakery had recently been fined £1,000 for supplying bread of short weight, and, if so, whether the company had since paid the fine; also, whether it was a fact that more recently the company had been given another contract. The Minister for Supply and Development has furnished the following reply : - >I assume that the honorable member refers to the Abbco Bread Company Proprietary Limited, of which **Mr. J.** L.Raith is manager. > >1 ) This company was fined under State law for delivering loaves short in weight. The delivery was in bulk lots for the Army and was paid for by bulk weight. The contract does not require a precise weight per loaf. > >I have no knowledge whether the company has paid the fine as this matter is one of State concern. > >Subsequently, the Abbco bakery obtained a contract for the supply of bread to the Central Military Supply Depot, Sydney, for the period the 9th August to the 31st October, 1940. Manufacture of Munitions: Country Applicants for Employment. {: #subdebate-60-2-s6 .speaker-KUG} ##### Mr Spender:
UAP r. - On the 6th December the honorable member for New England **(Mr. Abbott)** asked, *without notice,* whether arrangements would be made for the Department of Technical Education of New South Wales to examine country applications for munitions work. The Minister for Munitions has furnished the following reply: - >The technical schools in all the capital cities are being employed in the training of munitions workers and in the course of training they conduct examinations as to the results of the training. It is impracticable, however, for any agency other than the managements of the respective munitions factories to determine the suitability of applicants for employment. It can bo said, however, that any person who satisfactorily passes a term of training in a technical school in any engineering subject will be eligible for employment in a munitions factory. Meat Supplies in Australian Imperial Force Camps. {: #subdebate-60-2-s7 .speaker-KUG} ##### Mr Spender:
UAP -- On the 6th December the honorable member for the Northern Territory **(Mr. Blain)** asked the following question, *without notice : -* >The ration of meat which is supposed to be supplied on the soldier's plate in camps of the Australian Imperial Force is11/2 lb. daily, but the ration is not supplied. Fresh beef is supplied to the camps in quarters, and mutton, most of which is fat mutton, in whole carcasses. Thirty-four per cent. of the quantity supplied is hone and fat. The officers are unable to effect an improvement" without instructions from a higher authority. Will the Minister for the Army give instructions that, in future supplies of meat to the Australian Imperial Force camps, allowance shall be made for the waste or that first-grade meat shall be supplied? I am now in a position to inform the honorable member as follows : - {: type="1" start="1"} 0. The standard daily ration includes *1* lb. of fresh meat and 2 oz. bacon. In order to ensure a satisfactory issue, approximately 11/3 lb. of fresh meat per man is purchased. For instance, the present approved menu in Victoria necessitates the weekly purchase of the undermentioned items for each 100 men in camp: - {: type="1" start="2"} 0. The approved menu provides for the issue of beef and mutton on alternate days. 1. All meat purchased is prime quality and is subject to inspection by qualified officers prior to acceptance. The standard specification provides that excessively fat meat will not be accepted and stipulates that carcasses of mutton shall not exceed60 lb. Barbed Wire - Supplies for Primary Producers. {: #subdebate-60-2-s8 .speaker-KUG} ##### Mr Spender:
UAP r. - On the 6th December the honorable member for Wide Bay **(Mr. Corser)** asked, *without notice,* whether supplies of barbed wire could be made available to graziers and farmers in Queensland. The Minister for Supply and Development has furnished the following reply : - >Representations have been made by grower* ofcane, cotton and tobacco in Queensland concerning difficulties being experienced in obtaining supplies of barbed and other fencing wire. As the honorable member will appreciate, this material is of considerable importance for defence purposes, consequently demands from the Army, both locally and overseas, are particularly heavy and urgent. Prior to the honorable member's inquiry, however, a special effort had been made to meet the requirements of the primary producers in Queensland and arrangements made for shipment comprising 113 tons of barbed wire for all Queensland ports on the 6th December last. War Supplies: Manufacture in Country Workshops. {: #subdebate-60-2-s9 .speaker-KUG} ##### Mr Spender:
UAP -- Yesterday the honorable member for New England **(Mr. Abbott)** asked, *without notice,* whether steps would be taken to supply full information concerning our war requirements to trade organizations with a view to tenders being submitted by country garages and small workshops. The Minister for Supply and Development has furnished the following reply : - >The war requirements of the department are generally upon a scale and to a precision that arc beyond the scope of country garages and small workshops. This has been the subject, recently of a deputation from those concerned to the Board of Area Management in Sydney, and after explanation of the difficulties to be expected and the exacting nature of the requirements, the garage-owners' representatives expressed themselves satisfied that they could not do the work. If a garage-owner is prepared to transfer his machines and himself to a central workshop where both the machines and himself can be employed in association with other facilities that might be available, the department would be pleased to hear from him. Gift Ambulances fob Army. {: #subdebate-60-2-s10 .speaker-KUG} ##### Mr Spender:
UAP r/ - On the 27th November last the honorable member for Corio **(Mr. Dedman)** asked the following question, *without notice: -* >Will the Minister for the Army state whether or not it is a fact that the Government is exploiting the generosity of those who, in Geelong and elsewhere, are presenting ambulances to the Army, by charging a duty of £30 on every such vehicle? I am now ina position to inform the honorable member that where money is donated to the Government for the purchase of an ambulance vehicle, the vehicle is purchased in bond and entered free of duty under item 370 of the Customs Tariff Schedule. If, however, an ambulance purchased from duty-paid stocks be donated to the Government by a private person, there is no provision under the law by which the donor may obtain a refund of duty. Workmen's Compensation. {: #subdebate-60-2-s11 .speaker-N76} ##### Mr Menzies:
UAP s. - On the 5th December the honorable member for Cook **(Mr. Sheehan)** asked me whether I would inquire whether workers' compensation insurance makes any provision for injuries received while on duty as a result of enemy action of any kind. In reply, the honorable member is informed that a departmental committee is examining the whole subject of compensation in respect of war injury. On receipt of the committee's report, the question will be given consideration by the Government. Shortage of Coal. {: #subdebate-60-2-s12 .speaker-N76} ##### Mr Menzies:
UAP s. - On the 4th December the honorable member for Hunter **(Mr. James)** asked me the following question, *without notice: -* >I ask the Prime Minister whether it be a fact that the shortage of coal supplies is causing the Government concern; is the right honorable gentleman aware that at certain collieries belonging to the J. and A. Brown and Abermain Seaham Collieries Limited, the whistle denoting commencement of work has been silenced for from three to five weeks on end, and that one of the most lately equipped Caledonian collieries has been closed for years; if there be a shortage of coal, does not the right honorable gentleman consider that the opening of these mines and the pooling of orders would ensure greater supplies than are obtainable under the proposal of the Government to induce the employees to work additional shifts? I desire to inform the honorable member that on Friday last the coal position was discussed at length by the War Council with representatives of the owners and of the Coalminers Federation. I am advised that the shortage of coal is chiefly in the States other than New South Wales. The problem of coal supplies is inseparable from that of shipping and other transport. Discussions have accordingly taken place with the shipowners and power has been taken to increase the shipment of coal from New South Wales. The Government will now consider the results of these discussions and of the action already initiated. Purcell Engineering Company. {: #subdebate-60-2-s13 .speaker-JVA} ##### Mr Morgan: n asked the Minister representing the Minister for Supply and Development, *upon, notice -* {: type="1" start="1"} 0. In view of alleged discriminatory treatment against the Purcell Engineering Company Limited, Auburn, in connexion with orders for machine tools required for the war industry, will the Minister immediately investigate the matter with a view to rectifying the injustice as well as speeding up the war effort? 1. Will he also place on the table the list of linns who participated in the recently announced orders totalling £2,000,000? 2. Will he consider the question of appointing a director of machine tools, or a subdirector in New South Wales, who is not associated with any firm participating in war contracts ? {: #subdebate-60-2-s14 .speaker-KUG} ##### Mr Spender:
UAP -- The Minister for Supply and Development has supplied the following answers : - {: type="1" start="1"} 0. There is no evidence of discriminatory treatment against the Purcell Engineering Company. An. order for 42 machines has been placed with the company. When that order has been completed, further orders will be considered. {: type="1" start="2"} 0. Tlie names of the firms which participated in the recently announced orders of £2,000,000 will be furnished as early as possible. 1. Upon the recommendation of tlie Business Board of Area Management in New South Wales, a controller of machine tools has already been appointed for that State. As it is necessary to appoint an expert in machine tools to the position and as every machine tool firm in Australia is engaged upon departmental contracts, it is impracticable to find an expert who has not at some time been connected with one or other of the companies. There is no reason to doubt the integrity of any person associated with the department in the war effort. {:#subdebate-60-3} #### Petrol Rationing : Figures For New South Wales {: #subdebate-60-3-s0 .speaker-BV8} ##### Mr Calwell: l asked tlie Minister representing tlie Minister for Supply and Development, *upon* *notice -* {: type="1" start="1"} 0. Is it a fact that the secretary of the New South Wales Service Station Association stated in the daily press of Saturday last that sales of petrol were down in New South Wales by 40 per cent, compared with last year? 1. If so, can he offer any explanation for this state of affairs? {: #subdebate-60-3-s1 .speaker-KUG} ##### Mr Spender:
UAP -- The Minister for Supply and Development has supplied the following answers : - {: type="1" start="1"} 0. A statement appeared in the press on the 7th instant in which **Mr. C.** A. Gregory, general secretary of the Service Station Association, is reported to have said that sales of petrol throughout New South Wales are about 40 per cent, below the pre-war normal. No indication is given of the basis for **Mr. Gregory's** statement. No official report of sales for November is yet to hand. Under tho National Security (Liquid Fuel) Regulations retailers of petrol are required to furnish monthly returns of sales by the 7th of the month. Difficulty is being experienced in obtaining compliance with this requirement. 1. If there is a reduction as stated, it is probably due to consumers using stocks purchased prior to the operation of the rationing scheme, and also that consumers are saving ration tickets for use during the holiday season. A reduction owing to the operation of the rationing scheme would also affect the sales. Galvanized Iron and Fencing Wire. {: #subdebate-60-3-s2 .speaker-KUG} ##### Mr Spender:
UAP r. - On the 9th December the honorable member for Bass **(Mr. Barnard)** asked, *without notice,* whether any complaints had been received of a shortage of galvanized roofing iron and fencing wire in Tasmania, and if so, what steps had been taken to overcome the shortage. The Minister for Supply and Development has furnished the following reply: - >Complaints have been received from Tasmania regarding a shortage of galvanized iron sheets and fencing wire. Demands for defence purposes both locally and overseas are particularly heavy and have affected the availability of supplies for other purposes. Efforts have been made to arrange additional supplies for Tasmania to meet the shortage. A slight improvement in tlie position is anticipated in the near future and action has been taken to extend a certain degree of priority to Tasmanian requirements. The position is being kept continually under review. Oil Cartel. {: #subdebate-60-3-s3 .speaker-KUG} ##### Mr Spender:
UAP r. - Yesterday the honorable member for Watson **(Mr. Falstein)** asked the following questions, *without notice: -* {: type="1" start="1"} 0. Whether it was a fact that the oil cartel had refused to supply Dunlop and Company Limited after yesterday unless that firm paid £5,000 to the cartel? 1. Whether i,t was a fact that this firm supplies tlie Commonwealth Government and the Government of New South Wales with petrol ait lid. a gallon less than the price charged by the major oil companies? 2. Whether it was a fact that the Premier of New South Whales had made representations to have Dunlop and Company Limited excluded from the cartel to tlie extent to which it supplied the State Government, and that this proposal was rejected, although it applied in respect of petrol supplied to the Commonwealth Government? 3. Whether, if these were the facts, the Minister for Supply and Development would issue an immediate instruction to the oil cartel to withhold action until the merits of the case had been examined, and would he give an assurance that the Government of New South Wales would be afforded the same opportunity to effect savings on the purchase of petrol as were enjoyed by the Commonwealth Government ? The Minister for Supply and Development has furnished the following replies : - {: type="1" start="1"} 0. The oil cartel does npt supply Dunlop and Company Limited. . Any questions of supply to Dunlop and Company Limited arise from its relations with its importing company. The importing company may have oversold its quota and require under its cartel agreement to purchase from other members of the cartel. The only circumstances in which Dunlop and Company Limited could be required to pay any sum of money would be through the importing company which supplies it. 1. The facts are approximately as stated. Dunlop and Company Limited is a jobber with no system of general distribution to the public. 2. Dunlop and Company Limited has no quota under the cartel, but its importing company is a member with an appropriate quota under the agreement arrived at by all companies. Under this agreement Commonwealth purchases were excluded from the quota system in order to assist certain small importers. The concession was not extended further for reasons which have been explained to the Premier of New South Wales. The cartel arrangements are necessary to increase the utilization of storage- capacity and the quota system is incidental to these arrangements. Detention in Military Camps. {: #subdebate-60-3-s4 .speaker-KUG} ##### Mr Spender:
UAP -- Last week the honorable member for Bourke **(Mr. Blackburn)** stated he had received a letter signed by a number of soldiers now in camp at Seymour (Puckapunyal) protesting against a member of their unit being sentenced to solitary confinement for eight days in a room no larger than 7 feet square. The honorable member also referred to complaints made to him concerning conditions in military camps in other places used by the Army. I now desire to inform the honorable member that reports received from the Area Commandant at Puckapunyal state that no soldier in that area has been sentenced to solitary confinement. Sentences of detention of less than fourteen days are served under guard, in units. The guard rooms used as barrack detention rooms are 16 feet by 12 feet, and are well ventilated. Soldiers under sentence of detention are regularly exercised and are not confined continuously in barrack detention rooms. A military prisoner under sentence of imprisonment for an offence under Defence Act or Army Act is committed to a detention barracks as prescribed in Military Regulations. Instructions provide that a room in a place of detention is not to be occupied unless it has been certified by a board consisting of a Staff Officer, an Officer of Engineers, and a Medical Officer, to be of such size and to he ventilated and fitted up in such manner as is necessary for the health of the occupants. The cubic space prescribed for a room is 800 cubic feet, hut District Commandants may, subject to certification by the board, approve the occupation of a room not less than 550 cubic feet. Strict regulations are laid down for execution of sentence and commitments, transfer, removal, release and escort of soldiers under sentence. Time does not permit of inquiries being made at all military camps throughout Australia, but it has been ascertained to-day that at Seymour and Puckapunyal the barracks detention rooms are as prescribed in the instructions. At Seymour the detention rooms are 10 feet by 12 feet, and at Puckapunyal 12 feet by 16 feet. They are in good condition, well lighted, and ventilated, with wooden floors and outside sanitation. The hygienic conditions are excellent. The officers in charge would welcome any inspection. {:#subdebate-60-4} #### Aliens Tribunals : Remuneration or Personnel {: #subdebate-60-4-s0 .speaker-JTY} ##### Mr Archie Cameron: n asked the Minister for the Army, *upon notice -* {: type="1" start="1"} 0. What will be the daily cost of each tribunal set up under Statutory Rules 1940, No. 260, National Security (Aliens Control) Regulations, issued recently, together with the daily cost of all persons attending each tribunal, and .preparing the cases for each tribunal, and in any way so assisting? 1. What fees are to be paid to each member of each tribunal? {: #subdebate-60-4-s1 .speaker-KUG} ##### Mr Spender:
UAP -- The answers to the honorable member's questions are as follows : - {: type="1" start="1"} 0. From the experience gained in connexion with the advisory committees already functioning, I find it very difficult to give an estimate as to what will be the daily cost of the aliens tribunals set up under the National Security (Aliens Control) Regulations, but not yet functioning. The cost will necessarily vary in each individual case according to circumstances and the number of appeals presented. Internees will, of course, pay the cost of presenting their cases to the tribunals. {: type="1" start="2"} 0. It is proposed to pay to members of the tribunals, other than judges and State officers, an honorarium of £5 5s. a day. Payment will not be made to judges and State officers without the consent of the State concerned. {:#subdebate-60-5} #### Industrial Disputes {: #subdebate-60-5-s0 .speaker-KXY} ##### Mr Perkins: s asked the Minister for Labour and National Service, *upon notice -* {: type="1" start="1"} 0. How many (o) strikes, and (6) lockouts have engaged his attention since his appointment to his present office? 1. How many of these (a) strikes, and (b) lockouts have been settled? 2. How many men were concerned in the (a) strikes, and (6) lockouts that have been settled? 3. How many men are concerned in the (a) strikes, and (&) lockouts still in continuance? {: #subdebate-60-5-s1 .speaker-009MC} ##### Mr Holt:
UAP -- The answers to the honorable member's questions are as follows : - >Up to the 6th December, 1940 - 1. (a) Fifteen, (&) nil. > >Ten strikes settled. Negotiations proceeding in regard to five strikes. > >4,600 men in the settled strikes. > >3,300 men in strikes in regard to which negotiations proceeding. > >Several disputes which, but for the machinery provided by the Department of Labour and National Service might have led to further strikes, have been settled. Soldiers' Pay and Allowances: Case of Private Hoddinott. {: #subdebate-60-5-s2 .speaker-KUG} ##### Mr Spender:
UAP r. - On the 4th December the honorable member for Reid **(Mr. Morgan)** referred to the case of Private G. Hoddinott, and to the delay in the payment of his military pay and subsistence allowance. I promised to have the complaint investigated and to furnish the honorable member with a reply. I have now received a report on the subject, from which it would appear that subsistence allowance was available for payment to members of " day-boy " camp at Hurstville on due date, but was not collected by Private Hoddinott during the period of three days allowed the Camp Commandant to effect payment; consequently the amount of 16s.11d. due was returned to the District Finance Officer as unclaimed. No request for payment of this amount was received from Private Hoddinott, but later a claim for £4 2s. 2d., covering subsistence allowance for Private Hoddinott and four other members of the Hurstville " day-boy " depot, was received from Bathurst camp. After investigation a cheque for this amount was forwarded to the Depot Paymaster, Bathurst Camp, on the 5th December. Claim for subsistence allowance for the period of sick leave from the 25th August, to the 1st September, 1940, has not been received in the District Accounts Office. Further inquiries are being made by the District Finance Officer to ascertain if any amount is due, and if so to effect early payment. Pay and subsistence allowance on account of pre- embarkation leave are paid by commanding officers prior to members proceeding on leave. The reasons for non-payment in this case are being investigated. Compulsory Trainees: Alleged Dismissal from Employment. {: #subdebate-60-5-s3 .speaker-KUG} ##### Mr Spender:
UAP -- On the 5th December the honorable member for Martin **(Mr. McCall)** asked . the following question, *without notice -* >Has the attention of the Minister for the Army been drawn to the fact that 43 compulsory trainees have been refused reemployment upon the completion of the period of their training? Can he assure the House that he will exercise his powers under the Defence Act to ensure that employers do not penalize their employees in this way? I am now in a position to give the honorable member an assurance that every case reported to the military authorities has been thoroughly investigated. Investigation has disclosed that in a number of instances the allegation by the trainee that his loss of employment resulted from military service could not be substantiated. Where it is clearly evident that the reason for dismissal is for some cause unconnected with military service, nothing would be gained by instituting legal proceedings. The protectionof the civil employment of universal service trainees is safeguarded by section118a of the Defence Act 1903-1939 and by the National Security (Reinstatement in Civil Employment) Regulations (Statutory Rules1939, No. 176 as amended by Statutory Rules 1940, Nos. 63, 103 and 222). I am satisfied that the officers in the various military districts, who are entrusted with the responsibility of investigating complaints from universal service personnel under the provisions of these regulations, are actuated by a keen desire to uphold the rights of trainees. Any particular cases of complaint I shall be glad to have investigated. Uniforms for Troops. {: #subdebate-60-5-s4 .speaker-KUG} ##### Mr Spender:
UAP r. - On the 9th December the honorable member for Griffith **(Mr. Conelan)** asked the following question, *without notice -* >In view of the fact that, for hygienic purposes, troops stationed at Darwin are issued with shorts and shirts, will the Minister for the Army authorize the issue of similar uniforms, instead of long trousers and tunics to troops in Queensland, at least while on leave, if not when in camp? I am now in a position to inform the honorable member that provision already exists for the wearing of shorts and shirts by military personnel to all troops located at or north of Rockhampton. Members of the Militia Forces south of Rockhampton may be issued with shorts as an alternative to khaki drill trousers. Members of garrison battalions in Queensland may receive shorts and shirts in lieu of the khaki drill working dress at the discretion of the command administration. Throughout Australia members of the Australian Imperial Force are being issued with shorts and shirts for wear during the summer months, as may be considered desirable by local commanders. I may add that the question of the provision of shorts and shirts for other personnel called up for full-time duty is now receiving attention.

Cite as: Australia, House of Representatives, Debates, 10 December 1940, viewed 22 October 2017, <http://historichansard.net/hofreps/1940/19401210_reps_16_165/>.