House of Representatives
17 September 1941

16th Parliament · 1st Session

  1. House of Representatives
  2. 16th Parliament
  3. 1941

Mr. Speaker (Hon. W. M. Nairn) took the chair at 3 p.m., and read prayers.

page 286

FORMATION OF FADDEN MINISTRY

Ministerial Changes - Representation in House of Representatives.

Mr FADDEN:
Prime Minister · Darling Downs · CP

– I inform the House that, on the 29th August last, consequent on the resignation of theRight Honorable R. G. Menzies as Prime Minister, I was commissioned by His Excellency the Governor-General to form a Ministry.

In addition to my appointment as Prime Minister, I was appointed to the office of Treasurer. The Right Honorable R. G. Menzies was appointed Minister for Defence Co-ordination. No other change has been made in the portfolios held by Ministers when this House adjourned on the 28th August.

The representation of Senate Ministers, as it existed when the House adjourned, has been varied only to the degree that the Minister for Air, instead of the Minister for the Army, will represent in this chamber the Minister for Aircraft Production (Senator Leckie).

page 286

DEATH OF EX-SENATOR WILLIAM KINSEY BOLTON, C.B.E., V.D

Mr FADDEN:
Prime Minister · Darling Downs · CP

– It is with deep regret that I refer to the death in Melbourne, on the 8th September last, of Brigadier-General WilliamKinsey Bolton, a former member of the Senate.

Brigadier-General Bolton was elected to the Senate for the State of Victoria at the general elections of 1917, and served for one term as a member of that chamber. He was defeated at the general ejections of 1922. During his term in Parliament, he served on several committees, including the Joint Committee of Public Accounts. His contemporaries pay tribute to his capacity, his loyalty and his great earnestness.

Brigadier-General Bolton had a distinguished military career. As lieutenant-colonel, he commanded the 8th Battalion, Australian Imperial Force, in the last war. He saw active service on Gallipoli, and was subsequently invalided back to Australia. It is worthy of mention that, to the age of70 years - he was 80 years of age at the time of his death - Brigadier-General Bolton led his battalion annually in the Anzac Day march in Melbourne. He was a man of high personal worth, and his public career was one of which his relatives may well be proud. Through his death, Australia has lost a distinguished citizen. I move -

That this House expresses its profound regret at the death of Mr. William Kinsey . Bolton, C.B.E., V.D., a former member of the Senate, places on record its appreciation of his meritorious public service, and tenders its deep sympathy to his widow and family in their bereavement.

Mr CURTIN:
Leader of the Opposition · FREMANTLE, WESTERN AUSTRALIA · ALP; FLP from 1934; ALP from 1936

– I second the motion, and associate every member of the Opposition with the tribute paidby the Prime Minister (Mr. Fadden) to the public services of the late Brigadier-General Bolton.

The deceased gentleman served for six years in the Senate, and won the respect of his colleagues in that chamber. He also gained many friends among the then members of this House. He took a very real interest in the welfare of Australia.

As the Prime Minister has said, he was particularly devoted to the craft of soldiering, and achieved very great distinction in the first world war. He was accustomed to leadership, and the fact that he continued to be, to an advanced age, one of the principal figures in the Anzac Day ceremonies held regularly in Melbourne after the termination of the war is not only an indication of his spirit, but is also conclusive proof of the respect in which he was held by the ranks that he led. We express our deep sympathy with his bereaved family.

Mr MENZIES:
Leader of the United Australia party · Kooyong · UAP

– I associate the members of the United Australia party with the very fitting tributes that have been paid to the memory of the late ex-senator by the Prime Minister (Mr. Fadden) and the Leader of the Opposition (Mr. Curtin).

As has been pointed out, the late Brigadier-General died at the age of 80 years. I saw him only a few months before his death, and was very much struck by the amazing degree to which he had retained his activity and his interest. He was a great servant of the public, both in the Army and in Parliament, and it is proper that we should pay every honour to his memory.

Question resolved in the affirmative, honorable members standing in their places.

page 287

DEATH OF DR. MILLICE CULPIN

Mr FADDEN:
Darling DownsPrime Minister · CP

– With regret, I inform honorable members of the death in Brisbane on the 1st September last of Dr. Millice Culpin, a former member of this House.

Dr. Culpin was elected to the House of Representatives for the Division of Brisbane, at the general election of 1903, and was defeated at the general election of 1906. He was 94 years of age at his death.

Of course, many years have elapsed since the late honorable gentleman was a member of this Parliament; but his service is on record, and it is appropriate that we, the present members, should express our appreciation of it. I move -

That this House expresses its profound regret at the death of Dr. Millice Culpin, a former member of this House for the division of Brisbane, places on record its appreciation of his meritorious public service, and tenders its deepest sympathy to the members of his family in their bereavement.

Mr CURTIN:
Leader of the Opposition · Fremantle

– I second the motion, and associate the members of the Opposition with what the Prime Minister (Mr. Fadden) has said, in paying tribute to the public service of the late Dr. Culpin, and in expressing to his family our deep sorrow in their bereavement.

Mr MENZIES:
Leader of the United Australia party · Kooyong · UAP

– I associate the members of the United Australia party with what has been said concerning the late honorable member.

Dr. Culpin was a member of this House in its earlier days, and was, therefore, one of the pioneers of the national parliament of this country; consequently, he is entitled to special recognition, because the work done by the pioneers of the Parliament is work from which every member of this House to-dayis benefiting

Question resolved in the affirmative, honorable members standing in their places.

page 287

SUPPLY BILL (No. 2) 1941-42

Assent reported.

page 287

QUESTION

PUBLIC ADMINISTRATION

Mr CURTIN:

– Has the Prime Minister, since I yesterday submitted to him a matter of very great importance in relation to public administration, had an investigation made of it? If not, will he have the requested investigation made, and indicate what action he intends to take with respect to it?

Mr FADDEN:
CP

– I have set the appropriate machinery in motion for an investigation of the matter which the honorable gentleman kindly brought to my notice yesterday.

page 287

JOINT COMMITTEE ON RURAL INDUSTRIES

Mr. FRANCIS, as Chairman, brought up the first progress report of the Joint Committee on Rural Industries, and moved -

That the paper be printed.

Debate (on motion by Mr. Archie Cameron) adjourned.

page 288

QUESTION

WAR LOADING ON WAGES

Mr ROSEVEAR:
DALLEY, NEW SOUTH WALES

– Will the Minister for Labour say what was the first industrial organization which secured a war loading of 6s. a week on award wages? Was that war loading granted in pursuance of Statutory Rule 128 of 1940? Was this action taken with the consent of the Commonwealth Arbitration Court, or was it in defiance of a decision of the court not to add war loading?

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

– by leave - The original grant of 6s. a week was made through the Ministry for Munitions to munitions workers engaged in war production. The grant was then made to tradesmen in the metal trades group, who were brought into line with those working under the munitions agreement, and the rate was subsequently fixed by regulation. Later, the Arbitration Court itself adopted that rate as a general rate to apply to the metal trades.

Mr Rosevear:

– I asked whether the action had been taken in defiance of a previous decision of the Arbitration Court.

Mr HOLT:

– No question of defiance arises. The court itself had prescribed a minimum wage for workers coming under this classification, and the rate subsequently fixed by regulation became the maximum rate. Because it was the sole purchaser of the goods produced by these workers, the Government had a direct interest in seeing that the cost was not unduly inflated. It also wished to prevent poaching among employers by their offering more attractive rates in order to obtain the servics of skilled employees already engaged in the manufacture of goods for the Commonwealth Government.

page 288

TARIFF BOARD REPORTS

Mr. HARRISON laid on the table reports and recommendations of the Tariff Board on the following subjects : -

Bounty on wooden and composite ships.

Ordered to be printed.

Bounty on electric cable and wire, rubber covered.

Carpets, carpeting and carpet rugs.

Elastic. 1 in. and 2 in. in width.

Enamelled wire, covered or not covered, and other magnet winding wires.

Knitted elastic piece goods.

Oregon logs and Oregon junk timber.

page 288

QUESTION

NAVAL AUXILIARY PATROL

Mr GEORGE LAWSON:
BRISBANE, QUEENSLAND

– Is the Minister for the Navy aware that members of the Naval Auxiliary Patrol are required to give an undertaking that they will not call on the Government to indemnify them for injury to themselves or damage to their property during the time they are in the patrol? Does he not consider this an extraordinary condition to impose ?

Mr HUGHES:
Attorney-General · NORTH SYDNEY, NEW SOUTH WALES · UAP

– I do not know what the position is, but I shall have inquiries made, and shall let the honorable member have the information later.

page 288

TARIFF BOARD

Annual Report

Mr HARRISON:
Minister for Trade and Customs · WENTWORTH, NEW SOUTH WALES · UAP

– I lay on the table the following paper: -

Tariff Board - Report for the year 1940-41 together with summary of recommendations.

The report is accompanied by an annexure containing a summary of the Tariff Board’s recommendations which have been considered by the Government, and setting out what action has been taken. As practically the whole of the Tariff Board’s recommendations included in the annexure as tabled are covered by the Tariff Board’s reports which have already been made available to honorable members, it is not proposed to print the annexure. I move -

That the report be printed.

Debate (on motion by Mr. Forde) adjourned.

page 288

QUESTION

DAIRYING INDUSTRY

Mr LAZZARINI:
WERRIWA, NEW SOUTH WALES

– Is the Minister for the Army aware that the dairying industry, particularly that part of it which is concerned with the supply of milk to the Sydney metropolitan area, is threatened with dislocation, owing to the calling up of young men for military service? Will he have an inquiry made with a view to affording some relief?

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

– This matter is at present under examination by the Commonwealth Man-Power and Resources Survey Committee.

page 289

KANGAROO POINT MILITARY HOSPITAL

Mr CONELAN:
GRIFFITH, QUEENSLAND

– Has the Minister for the Army seen a statement by the Minister for Health and Home Affairs in the Queensland Government that the military hospital at Kangaroo Point was in a hopeless muddle owing to lack of equipment, such as sterilizing material-

Mr SPEAKER:

– The honorable member must not make a statement.

Mr CONELAN:

– Is it true, as was stated by the Minister for Health and Home Affairs in Queensland, that the military hospital at Kangaroo Point was badly equipped, that it lacked an operating theatre, a sterilizing plant and X-ray apparatus, and that the accommodation for the troops was poor ? Has the matter been investigated ; if so, has the Minister discovered who was responsible?

Mr SPENDER:
UAP

– These premises were taken over only a short time ago, and investigation was quickly made regarding what equipment was necessary. The statement of the Minister for Health and Home Affairs was made during the time the investigation was proceeding, and the fact that the investigation was being made was public knowledge in Queensland. Immediately after the report was submitted by my advisors - within a day or so after he made his statement - I went through it and gave instructions that their recommendations were to be carried out, and all the matters requiring attention attended to.

page 289

QUESTION

RURAL INDUSTRIES

Effect of Military Training

Mr PROWSE:
FORREST, WESTERN AUSTRALIA

– Is the Minister for the Army aware of the great inconvenience caused at shearing and harvesting time because of the number of men called up for military training? “Will he take steps to ensure that a greater number of exemptions is granted ?

Mr SPENDER:
UAP

– The calling up for military training of men from primary industries has received and is continuing to receive serious consideration. Many of the claims for exemption have, however, proved not to be genuine, and should never have been made. We are aware of the difficulties associated with this matter, and try to arrange the call-up in such a way as not to interfere with seasonal requirements for labour. I admit that the problem has not been completely solved, and discussions are proceeding with the Minister for Labour and National Services (Mr. Holt) with a view to seeing what further can be done.

page 289

QUESTION

PRIME MINISTER

Business Relations With Bank of New South Wales

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

– I ask the Prime Minister the following questions : - Is it a fact that the Commonwealth Bank has guaranteed an advance made by the Bank of New South Wales to the Clyde Engineering Company Limited of a sum of money totalling nearly £150,000? Was such guarantee given by the Commonwealth Bank at the direction of the Prime Minister? Did Sir Alfred Davidson, general manager of the Bank of New South Wales, interview the Prime Minister recently, and if so, was this matter discussed? Is it a fact that no charge has been made by the Commonwealth Bank for this service, and that consequently the Bank of New South Wales will reap all the profit from the deal without accepting any risks ? Is it a fact that the accountancy firm of which the Prime Minister is the principal, acts as auditors for the Bank of New South Wales in Queensland? Have any guarantees of a similar nature been given by the Commonwealth Bank ? Is it a fact that the guaranteeing of this overdraft by the Commonwealth Bank is contrary to the decision of the House when, on the motion of the honorable member for Corio (Mr. Dedman), it disallowed Statutory Rule No. 132 of 1941?

Mr FADDEN:
CP

– If the honorable member will place the questions on the notice-paper, he will receive an appropriate reply; but I hasten to assure him and other honorable members that I am not the auditor for the Bank of New South Wales in Queensland. I have nothing to do with that institution, and have bad no conversation with Sir Alfred Davidson regarding the guarantee in question or any other business.

Mr FALSTEIN:
WATSON, NEW SOUTH WALES

– Is it a fact that the Prime Minister, or the firm of which he is the principal, is or was the auditor in Queensland for the Bank of New South Wales? Will the honorable gentleman inform the House what sum of money has been received either by him or by his firm for services rendered to that financial institution? Will he say whether he proposes to continue to serve the Bank of New South Wales in that or any other capacity, either with or without fee?

Mr FADDEN:

– As this matter is getting right down to personalities and one has to disclose personal and professional relationships, I shall not burke the question. I assure the House that I am not, and never have been, engaged or paid in the capacity of auditor for the Bank of New South Wales. I have undertaken professional work for the bank, as I have done for the Waterside Workers Federation, the meat-workers’ organization, and other unions which engage brains and are prepared to pay for them.

page 290

QUESTION

DEHYDRATED BUTTER

Mr PATERSON:
GIPPSLAND, VICTORIA

– Will the Minister for the Army inform the House whether any success has attended the despatch of an experimental consignment of dehydrated butter to our troops in the Middle East?

Mr SPENDER:
UAP

– No report about the sample has, to my knowledge, yet come to hand, but I shall make inquiries and endeavour to expedite a reply to the honorable member.

page 290

QUESTION

UNITED AUSTRALIA PARTY

Restoration of Unity

Mr CALWELL:
MELBOURNE, VICTORIA

– Has the attention of the Prime Minister been directed to a statement by the honorable member for Henty that at a meeting of the United Australia party on the 28th August last, speaking metaphorically, a lynching took place? Has the allegation been investigated, and has the identity of the persons responsible been established?

Mr Menzies:

– I am informed that the corpse is looking very well preserved.

Mr CALWELL:

– What steps has the Prime Minister taken, or in contemplation, to protect himself against a similar fate? Is it a fact, as has been stated by certain sections of the press, that since the change in the Prime Ministership, complete unity has been restored in the Government ranks?

Mr FADDEN:
CP

– I advise the honorable member to concentrate upon ‘the matter of his own domestic relations with the Labour party.

page 290

QUESTION

No. 1 BARLEY POOL

Mr DEDMAN:
CORIO, VICTORIA

– Will the Minister for Commerce issue a detailed balancesheet showing the financial operations of No. 1 barley pool in order that growers may learn the cost of administration ?

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

– Reports which contained the principal facts about the barley pool have already been published. I shall inquire whether it is possible to publish the details.

page 290

QUESTION

SHALE OIL

Conversion into Petrol.

Mr GUY:
WILMOT, TASMANIA

– Has the attention of the

Minister for Supply been directed to a new process which has been evolved to convert shale oil into petrol, which is the result of scientific investigation by Mr. Clifford Harney, formerly of the New South Wales Department of Education! If not, will he call for a report and ascertain whether this new method of retorting and cracking would be suitable for the development of the oil shale fields at Latrobc and Deloraine in Tasmania?

Mr SPENDER:
UAP

– Whilst I have not heard personally of the process, I shall bring the question to the notice of the Minister for Supply and have an answer conveyed to the honorable member.

page 290

QUESTION

IMPORTATION OF FOOTWEAR

Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936

– Is the Minister for Trade and Customs in a position to make a statement about the alleged dumping of large quantities of footwear into Australia from abroad?

Mr HARRISON:
UAP

– Although I am not in a position at the moment to make a detailed statement about the matter, no evidence is in the possession of my department or myself to show that footwear has been dumped in Australia. As the result of heavy demands which the services have made on Australian boot manufacturers, supplies of footwear for civilians are short. This position has led to the importation of footwear in order to overcome the shortage of supplies.

page 291

QUESTION

LAUNCESTON MUNITIONS ANNEXE

Mr BARNARD:
BASS, TASMANIA

– Will the Minister representing the Minister for Munitions indicate when the munitions annexe at Launceston will be completely equipped and ready to begin production?

Mr SPENDER:
UAP

– I shall make inquiries and supply an answer to the honorable member.

page 291

QUESTION

AID TO RUSSIA

FormationofForeignLegion.

Mr MORGAN:
REID, NEW SOUTH WALES

– Was the Prime Minister correctly reported in the press last Monday as having said in reply to a question regarding the formation in Australia of a foreign legion to serve in Russia : “We have to concentrate on our own defences”? Does that answer imply that the Commonwealth Government will not permit a foreign legion to be raised here in order to assist Russia? Will the Government’s policy in future be to concentrate on home defence?

Mr FADDEN:
CP

– The honorable member quotedonly a portion of my statement. When asked whether I had received from the High Commissioner in London (Mr. Bruce) a reply to an inquiry as to the directions in which the Governmentcould aid the Soviet and the manner in which Australians could be encouraged to assist the Soviet, I stated that I had not received an answer. But I added that the fact that no reply had been received should not deter enthusiasts from getting on with our own war effort.

page 291

QUESTION

DAROOBALGIE MEAT WORKS

Mr BREEN:
CALARE, NEW SOUTH WALES

– In a letter dated the 11th February, 1941, the Minister for Commerce informed me that plans were already in progress to open up the Daroobalgie meat works. Has the Minister any further information to give to me on that subject?

Sir EARLE PAGE:
CP

– I shall get the whole of the information up to date and send it to the honorable member.

page 291

QUESTION

TEXTILE WORKERS

Mr MARWICK:
SWAN, WESTERN AUSTRALIA

– Is the Minister for Labour and National Service able to advise the House as to what was the average rate of pay, including war loading and overtime, paid to male and female textile workers before they went on strike?

Mr HOLT:
UAP

– I am not in a position offhand to answer that question in detail ; I could answer it on notice, if the honorable gentleman put it on the noticepaper. My understanding of the decision recently given by the judge in the Federal Arbitration Court is that it places workers engaged on war production in the textile industry on the same basis as workers on corresponding margins for skill engaged on other war production.

page 291

QUESTION

PETROL PRICES

Mr CLARK:
DARLING, NEW SOUTH WALES

– Has the Minister for Trade and Customs this week: sanctioned the sale in Sydney of two grades of petrol? If so, what is the reason for the extra l½d. a gallon which is to be charged for the higher grade?

Mr HARRISON:
UAP

– I have no knowledge whatever of that matter. It is possible that it affects a department other than mine, and I suggest the honorable member to place his question on the notice-paper.

page 291

QUESTION

PETROL RATIONING

Mr SHEEHAN:
COOK, NEW SOUTH WALES

-Can the Minister representing the Minister for Supply and Development tell the House whether there is to be a relaxation of petrol rationing in the near future?

Mr SPENDER:
UAP

– In the near future, no.

Mr JOHNSON:
KALGOORLIE, WESTERN AUSTRALIA

– In view of the statement by the Minister for Supply that petrol rationing may be liberalized by the end of this year, I ask the Minister representing him in this chamber whether he will take steps to ensure that pastoralists, prospectors and farmers, who are carrying on and developing industry under great difficulties and who have no alternative means of transport, will be given priority in the event of any relaxation of existing restrictions?

Mr SPENDER:

– I assure the honorable member that,when there can be some liberalization of petrol rationing, the claims of the people to whom he refers will be fully considered.

page 292

QUESTION

APPLES AND PEARS

Mr POLLARD:
BALLAARAT, VICTORIA

-Will the Minister for Commerce make a statement as to when it is intended to pay the 25 per cent. of money that is still owing to growers of apples and pears? Is it true that an attempt is to be made to evade the payment of the promised 25 per cent. on good-gradefruit where only fancygrade fruit was called up?

Mr ANTHONY:
Minister for Transport · RICHMOND, NEW SOUTH WALES · CP

– The matter of paying the 25 per cent. is now under investigation, but if the payment of the outstanding 25 per cent., which is, after all, only an assessment, means that the growers are to be paid for 110 per cent, or something more than 100 per cent. of their crop, they will not be so paid ; they will be paid only that money to which they are justly entitled.

page 292

QUESTION

UNLICENSED WIRELESS LISTENERS

Mr SCULLY:
GWYDIR, NEW SOUTH WALES

– Has the attention of the Postmaster-General been drawn to the statement of a magistrate, before whom about 60 unlicensed wireless listeners were prosecuted that the Government must have revenue and to his action in imposing fines ranging from £3 3s. to £8 8s. for first offences? Is it the policy of the Postmaster-General’s Department to obtain revenue in that way? Will the Postmaster-General thoroughly investigate the case with a view to having the excessive fines remitted?

Mr COLLINS:
Postmaster-General · HUME, NEW SOUTH WALES · CP

– My attention has been drawn to that matter, which is now under investigation.

page 292

SPIRIT OF THE BRITISH PEOPLE

Personal Explanation

Mr BEASLEY:
WEST SYDNEY, NEW SOUTH WALES

– I rise to make a personal explanation. On the 20th July last, during the debate in this House on the international situation, I spoke about Greece and Crete and other places at which Australian troops have been engaged in warfare. It appears that a portion of my speech was cabled to Great Britain. There has appeared in British newspapers a statement to the effect that I said in this Parliament that there was no fighting spirit in Great Britain. That is distinctly untrue and, in my view, the misreport is a dastardly attempt to misrepresent to the English people the views of honorable members of this Parliament. No Australian publication of any kind published such a statement. Hansard, which contains a verbatim report of what I said, contains no such statement. It is true that I was critical of many of the activities on the different fronts, but I made no such statement as that there was no fighting spirit in Great Britain. I have received a number of letters from people in various parts of Great Britain naturally commenting adversely on my alleged remark. I have also received cuttings from the newspapers in which the report appeared. I wish to say that I have the greatest admiration for the fight and struggle that the people of Great Britain are putting up in this war. I am mindful of what they are suffering and have suffered from air raids and the tragic occurrences at Dunkirk and other places. I should be the last man to suggest that there is a lack of a fighting spirit in Great Britain. On the contrary, I greatly honour the British people for their fighting spirit, the work that they have done and their determination to resist every device that Hitler has employed against them. It is my wish and determination to help in every possible way to crush the forces of Nazi-ism and Fascism in order that they shall never take root on British soil.

page 292

QUESTION

WOOL AGREEMENT

Mr WILSON:
WIMMERA, VICTORIA

– In hopeful anticipation of his proposed visit to Great Britain, I ask the Minister for Commerce whether he will take up with the British Government the matter of revision of the wool agreement with a view to correcting anomalies particularly in respect of price and rebates on resales?

Sir EARLE PAGE:
CP

– That is a matter of policy which the Government will take into consideration.

page 293

QUESTION

NON-OFFICIAL POSTMASTERS

Mr LAZZARINI:

– I ask the PostmasterGeneral whether there is a basic rate of allowance for non-official postmasters. If so, what is that rate, and can the Minister hold out any hope of an increase ?

Mr COLLINS:
CP

– The Association of Non-Official Postmasters has recently been registered and intends, shortly, it is understood, to lodge a plaint with the Public Service Arbitrator.

page 293

QUESTION

MILITARY INVENTION

Mr GEORGE LAWSON:

– I ask a question of the Minister for the Army in connexion with a water-cooling device which has been invented by’ Mr. A. J. Hunting for the use of soldiers serving in the tropics. I have received correspondence from Mr. Hunting, who has informed me that the device was submitted to the Inventions branch, which reported favorably upon it. Subsequently Mr. Hunting approached the Minister for the Army on the 1st July, 1941, when the Minister asked that full particulars of the invention should be supplied to him. Those particulars were forwarded to him on the 4th July, 1941, but no acknowledgement was received by Mr. Hunting. The Minister was approached further on the 10th July, the 15th July, the 16th July, and the 29th July, but Mr. Hunting received no answers. On the 2nd August, he again wrote to the Minister asking whether his invention had been accepted or not, but up to the present time he has not received an answer. I now ask the Minister whether this is the appropriate way to deal with matters of importance to our troops? Will he deal finally with the whole matter and supply an answer to Mr. Hunting?

Mr SPENDER:
UAP

– I know the facts of this matter very well. The statement made by the honorable member does not refer to the occasions when I saw this man personally, both in Sydney and in Brisbane. I told him quite definitely that nothing could be done in connexion wilh his invention, but, like many other inventors, he is persistent. He has been told, once and for all, that it is quite impossible for the Department of the Army to adopt his invention for supplying cold water to our troops because of the difficulty of providing, under service conditions, supplies of the raw materials necessary for the working of the device. I have seen Mr. Hunting on three occasions, and have fully discussed the matter with him. I have also referred him to my advisers, who have informed him that it is impossible to make use of his invention. I do not know of anything more that I can do.

page 293

QUESTION

SIR EARLE PAGE

Visit to London

Mr FADDEN:
CP

– by leave - I desire to inform the House that the Government has decided that the right honorable Sir Earle Page, Minister for Commerce, shall proceed to London at an early date to discuss with the United Kingdom Government vital war matters of common interest.

Later:

Mr ROSEVEAR:

– I ask the Prime Minister whether it is a fact that the Minister for Commerce will travel via Malaya and America on his way to London, and that he will not leave Australia for some time? If so, is this to be taken as an indication that the visit of an Australian Minister to London is not quite so urgent as it was considered to be a short time ago?

Mr FADDEN:
CP

– The time of departure of the Minister for Commerce and the route that he will follow are close secrets at the present time, but they will be disclosed in due course.

Mr CONELAN:

– I ask the Prime Minister whether newspaper reports that the Minister for Commerce will not take a private secretary to London with him, and will take only a typist, are correct? In view of the need for economy, would it not be possible for the right honorable gentleman to use the services of a typist from Australia House when he is in London, instead of wasting money by taking one overseas?

Mr FADDEN:

– I am afraid that the honorable member has been misinformed by statements which have appeared in the press. I assure him that I know the Minister for Commerce sufficiently well to know that he will take with him an adequate staff in order to do a good job.

Mr JAMES:
HUNTER, NEW SOUTH WALES

– In view of the statement made in this House some time ago that the Government of the United Kingdom would allow only the Prime Minister of a dominion to be associated with the Imperial War Cabinet, and the announcement now made that an Australian Minister who is not the Prime Minister is to proceed to London to represent the Commonwealth, I ask the Prime Minister whether he will explain the apparent back-down by the British Government. I also ask whether the honorable gentleman does not consider that the Australian High Commissioner in London, Mr. Bruce, is capable of representing Australia’s interests in Great Britain. Is the design of the Government to get rid of the “ sharp shooter “ in its midst?

Mr FADDEN:

– The honorable member’s question is based on a wrong premise. Sir Earle Page is not going to London to become a member of the Imperial War Cabinet. He is going in pursuance of a decision of this House that a Minister should be sent to London to inquire into many vital matters which closely affect .the welfare of this country.

page 294

QUESTION

COMPULSORY MILITARY TRAINING

Mr MULCAHY:
LANG, NEW SOUTH WALES

– I should like to be informed by the Minister for the Army of the date when the Government decided to introduce military conscription in Australia. The Government has recently been calling up boys for continuous military training, which is military conscription. Is the Minister aware that this is interfering wilh industry and with Australia’s war effort? Will he ensure that exemption is granted to men who have taken upon themselves the responsibilities of married life?

Mr SPENDER:
UAP

– The obligation for military service in time of war has been recognized by statute of this Parliament for many years. The action which is being taken is for the purpose of implementing the obligation which rests upon every man of military age in Australia. It is necessary - and I thought that this would be conceded - to call up men for continuous service for the defence of this country. In view of this necessity, the Government has called up those men who are not engaged in exempt occupations. The determining factor in calling up any person is the list of exempt occupations; that list is constantly reviewed, having regard to the demands made upon our labour resources by our defence programme. It may be said, in general terms, (1) that the obligation for service rests on every citizen, (2) that the call up h necessary, and (3) that it does not interfere with our war effort.

Mr WARD:

– Can the Minister for the Army furnish the House with details of the methods employed by the military authorities in determining what universal military trainees should remain in camp for full-time training? Is he aware that many families have been placed in a desperate financial position by reason of the fact that members of them who are the main, and in many cas*3 the sole, support, have been obliged to remain in camp? Will -the honorable gentleman take steps to see that, if a trainee is the main or sole support of a family, or the father is unemployed or the mother a widow, exemption from continuous camp training shall be approved; failing which, will he arrange to provide additional financial assistance in such cases, so that workers and their dependants will not be compelled to suffer hardships while trainees are undergoing training?

Mr SPENDER:

– I shall have a full statement prepared, for submission to the House, in relation to the first part of the question.

In respect of the problem generally, it cannot be said that the Department of the Army has adopted a harsh view in connexion with the call-up. A large number of applications for exemption has been made, and this has imposed a severe burden upon Army administration. There has been no justification for very many of the applications. As honorable members know, I have had brought to my notice many cases in which hardship has been alleged; and investigation of them has proved to me that the allegation could not be substantiated. That is, of course, not a general view of the matters brought before me by honorable members. I say with respect that a genuine endeavour is made to meet cases of hardship. If, as the honorable member suggests, there are cases in which the call-up can be proved to have caused great hardship to the dependants of the persons concerned, I shall have no hesitation in taking corrective action. It is impossible to adopt a particular rule in respect of hardship cases; each case must be determined according to its own circumstances.I am as anxious as anybody that appropriate cases of hardship shall be properly met by the granting of exemption; but I am equally anxious that nobody shall, on the pretence of hardship, escape his. obligations.

Mr BEASLEY:

– As the number of eligible men within certain age-groups being called up for continuous training exceeds in some instances the number required, I ask the Minister for the Army whether he will explain the method of discrimination adopted by the department ?

Mr SPENDER:

– So far as I am aware, no discrimination is exercised. If there be a larger number of men available for the call-up than is required in particular areas or callings, the call-up is made in accordance with the localities in which the men can best serve, or in accordance with the units best fitted to the particular tasks assigned.

Mr Sheehan:

– Without consideration of personal hardship?

Mr SPENDER:

– Not at all.

page 295

QUESTION

MINISTER FOR DEFENCE CO-ORDINATION

Mr MAKIN:
HINDMARSH, SOUTH AUSTRALIA

– I ask the Minister for Defence Co-ordination whether he will describe the duties that fall within his province? I should also like to know whether it is part of his responsibility to co-ordinate the widely differing views and interests of the members of the Government?

Mr MENZIES:
UAP

– In reply to the last part of the honorable gentleman’s question I would say, “ undoubtedly “. As to the first part of his question, I hope to have an opportunity, possibly to-morrow, to make a statement on the subject.

page 295

QUESTION

CLYDE ENGINEERING COMPANY LIMITED

Mr MORGAN:

– I ask the Minister for War Organization of Industry whether, following upon the generous assistance which the Government has given to the Clyde Engineering Company Limited, of Granville, he will take steps to ensure that the large number of employees of the company who have received notices of dismissal because of the re-organization of the company’s operations, will also be given equitable treatment? Have steps been taken to protect the interests of the employees of this company, similar to those which have been taken to protect the interests of the company itself? Will suitable employment be provided for these people in some other calling so that they shall not be made the victims of economic conscription?

Mr SPOONER:
Minister for War Organisation of Industry · ROBERTSON, NEW SOUTH WALES · UAP

– I am mindful of the letter of the honorable member to me on this subject, which reached me early last week. I was uncertain whether the matters referred to related to my department or to that of the Minister for Munitions. I promised the honorable member, in a telephone conversation, that I would make inquiries into the subject, and I have done so. I hope to let him have a reply to his communication in the course of the next few days, and I shall give him certain information, even though the matter is not directly related to my own department.

page 295

QUESTION

AUSTRALIAN CONSOLIDATED INDUSTRIES LIMITED

Mr CALWELL:

– Has the Minister for Trade and Customs yet received a report from the Prices Commissioner on the subject of the alleged excessive profits being made by Australian Consolidated Industries Limited ? If so, does the report confirm the allegations made by an officer of the Trade and Customs Department in this connexion? If the report has not yet been received, what is the reason for the delay? In view of the Minister’s announced intention to stop profiteering by this company, I ask the honorable gentleman why his Government has taken a lease, at a very high annual rental, of several floors of the building in William-street, Sydney, owned by this company?

Mr HARRISON:
UAP

– The report referred to by the honorable member has not yet been made available to me, but I believe that the investigation has been completed, and that the report is in course of preparation. The reason why space was taken in the building owned by Australian Consolidated Industries Limited in Sydney is that no other space was available. It is not correct to say that the space was taken at a very high annual rental as the rental per foot is much lower than that being paid for corresponding accommodation occupied by other departments in other capital cities.

page 296

QUESTION

MINISTERIAL DUTIES AND REPRESENTATION

Mr MARTENS:
HERBERT, QUEENSLAND

– I ask the Prime Minister whether he will make a statement to the House setting out the specific duties of each Minister, and also the departments which Ministers represent in each House of the Parliament. I ask this question because it is apparent that Ministers themselves are in doubt as to whether certain matters fall within the scope of their administration.

Mr FADDEN:
CP

– The honorable gentleman’s question will receive consideration.

page 296

QUESTION

COMMONWEALTH OFFICE ACCOMMODATION

Eviction of Tenants in Melbourne.

Mr DRAKEFORD:
MARIBYRNONG, VICTORIA

– Has the Minister for the Army investigated the reason why the Director of Hirings and branches of the service departments have insisted upon occupied buildings being made available, or upon the compulsory eviction of tenants, in order to accommodate government departments, in view of the fact that ample empty or partly empty accommodation is available in Melbourne? If so, are the reasons presented to him for not utilizing the empty building space based on the grounds ofunsuitability or inconvenience? Does he consider that such grounds are reasonable or sufficient, having regard to the inconvenience and injustice caused by the compulsory evacuation of firms from well-known addresses, and the probable amount of compensation involved ? If he accepts the view that such reasons have, in the past, been justified, will he say whether he intends to continue the policy of causing evictions when additional accommodation is required and empty building space is available? Will he make availableto honorable members the reasons why the authorities considered that empty building space was unsuitable or inconvenient in each case where it has not been taken in the past, and will he also give such reasons in connexion with any future cases of the kind that may occur?

Mr SPENDER:
UAP

– Obviously I cannot answer all the questions that the honorable member has asked me. I replied in a. general way to similar questions which the honorable member asked me some weeks ago. Insofar as my own investigations of the matter have enabled me to form an opinion, I have concluded that when empty building space that has been offered has not been taken, it has been because it is unsuitable or inconvenient. It is necessary, in such matters, that the needs of the department shall be reasonably met, and so far as I have been able to ascertain, when space offered has been reasonably suitable, it has been taken. It does not follow, of course, that space must be exactly and precisely what is wanted. I am quite satisfied that the approach of the authorities to this whole problem has been reasonable.

page 296

QUESTION

MR. W. J. LOWE

Mr FALSTEIN:

– I ask the Prime

Minister whether the Mr. W. J. Lowe, who, it has been announced, will accompany the Minister for Commerce to London, is the gentleman who was a prominent member of the Country party in Queensland, and who threatened to “ get “ the Prime Minister because of the part that that honorable gentleman played in bringing about the fusion of the United Country party and the United Australia party in Queensland? I desire to know, also, how long it was after this threat was made that Mr. Lowe joined Sir Earle Page’s staff? Is the Prime

Minister able to inform the House what Mr. Lowe’s duties have been since becoming associated with the Minister for Commerce, and what they will be up to the time of his departure from Australia?

Mr FADDEN:
CP

– The name mentioned is appropriate to the question. I do not know whether the Mr. W. J. Lowe who is on the staff of the Minister for Commerce is the Mr. Lowe who is alleged to have stated that he would “ get “ me. If he is the same gentleman, it simply goes to show how tolerant I am.

page 297

QUESTION

APPLE AND PEAR BOARD

Dealings with Mr. Sampson.

Mr BREEN:

– Will the Minister for Commerce call for a report from the New South Wales committee of the Apple and Pear Board, in respect of fruit delivered to the board by Mr. Sampson, of Orange, in 1940, and inform the House why a settlement of the claims of this grower has not been effected? Will be also inquire as to whether Mr. Sampson is being victimized by the Apple and Pear Board, because of his activities in connexion with legal proceedings against it?

Mr ANTHONY:
CP

– My reply to the last part of the question is that no grower of fruit has been victimized because of opposition to the Apple and Pear Board; rather is the reverse the case. Very full investigation has been made of Mr. Sampson’s claims; but I shall have them further investigated, and furnish the result to the honorable member.

page 297

QUESTION

REPATRIATION

Mr MULCAHY:

– Last July, I directed a question to the Minister for the Army on the subject of the compensation of persons serving in the military forces who are not covered by the Repatriation Act, concerning which a departmental committee had submitted a report, and later received from the honorable gentleman the reply -

I now inform the honorable member that the report of this committee has been received, and the question is now under consideration by the Government. I anticipate that a decision will be given at an early date.

Will the Minister inform the House of the result of the investigation, and state what decision was reached on the committee’s report?

Mr SPENDER:
UAP

– I regret that a decision has not been made by the Government. The matter raised by the honorable member is the subject of a long departmental report. I shall have a discussion concerning it with the Minister for Repatriation, and endeavour to achieve finality by the Government as quickly as possible.

page 297

INTERNATIONAL AFFAIRS

Ministerial Statement

Sir FREDERICK STEWART:
Minister for External Affairs · Parramatta · UAP

. - by leave - I propose to relate briefly to the House some of the more important developments in the international sphere during the last few months, and to outline the present position at various salient points.

At the outset, it is desirable that we should see in true perspective the change in the aspect of the war which was brought about by the German attack on Russia and the subsequent stubborn Russian resistance. The initial and outstanding fact is, that the Russian defence has added immeasurably to the capacity of the British Empire and its Allies, aided by the United States of America, to sustain the war against Germany until the time is appropriate for the striking of decisive blows for victory ; in all probability, it has also shortened that time. We ought not to overlook the fact that Hitler deliberately added Russia to his list of enemies, for the sake of certain specific advantages which he expected to obtain. It can be assumed that he will put forth the most exhaustive efforts in order to secure those objects. To the degree to which he is successful, he must in due course return the more formidably to the assault on the defences of the Empire.

During three months of fierce and unrelenting warfare, the Russians have maintained courage and morale of a high order. From the accounts of authoritative British observers in Russia, it is evident that Russian equipment, especially artillery, is of a high quality, that the supply system and the transport system generally are efficient, and that the Red Air Force is still very much to be reckoned with. Again, whilst we must avoid imagining that the Soviet technicians possess magical devices, there is no doubt that the defence system against air attacks of Moscow and Leningrad has caused heavy losses to the enemy. The Russian army, however, is faced with a tremendous task, and at the present time, in some parts of the line at least, its situation is dangerous, if not critical.

No degree of admiration for Russian courage can conceal the fact that severe losses have been sustained and that, whilst giving due weight to the Russian counter-offensive in the central sector of the front, the cities of Leningrad and Kiev are seriously threatened. The German claim to have penetrated the suburbs of Leningrad is an indication of the seriousness of the position on the northern front, although the city is known to be strongly defended, and may well be capable of a prolonged resistance. In the central sector, Marshal Timoshenko’s counter-offensive is continuing. In the south, however, a German pincers movement threatens to isolate Kiev from contact with the rest of the country; whilst Odessa, on the Black Sea, has been surrounded for some weeks.

The occupation of Western Ukraine has meant the loss of a large percentage of Russia’s heavy industrial production, and the loss of Leningrad would be. even more serious. Our only certainty is that, even should the Russians be forced to relinquish control of some of their principal cities, or leave them isolated strongholds, they are determined to continue the struggle farther to the east, and particularly around the oil fields of the Caucasus.

In their efforts to secure a decisive victory, the Germans have launched an anti-Bolshevik crusade. Italians, Hungarians and Rumanians have joined in it willingly enough, but elsewhere the crusade has not met with any marked success. A few Spaniards have gone to the eastern front, but French forces who were enlisted for service in Russia proved too patriotic for German safety. More unfortunate still is the case of the Finns, who have been led by their desire to regain territory ceded last year to the Soviet Union to take up arms beside the Nazis. The government of the United Kingdom continued to maintain diplomatic relations with Finland for as long as this was reasonably possible, because clearly there is no real community of interest between Finland and Germany; there is, in fact, increasing evidence that, the former frontiers having been re-gained, the Finnish people at least would be happy to withdraw from the struggle.

We may note with satisfaction the improvement of Soviet relations’ with the governments’ of neighbour countries now under the Nazi yoke. As a result of the Soviet-Polish agreement entered into in June, Polish subjects in Russia will be organized under their own leaders in order to help in the common fight. Since then, the Soviet Government has given full recognition to the Czechoslovak Government in London.

In this connexion, there is apparentlya certain amount of misunderstanding regarding Australia’s formal relations with the Soviet Union.. The Commonwealth Government has received many representations that some specific step, such as an exchange of diplomatic representatives with Moscow, should be taken in order to demonstrate our sympathy and moral solidarity with the Soviet Union in its present struggle. But the real position is perfectly straightforward. The King of England has had diplomatic relations with the Soviet Union since 1924, and, as is the case with every other European country, Australian representation in Russia is effected through the medium of the British diplomatic and consular representatives. Russia’s status as our ally, and our wholehearted recognition of that status, are not in the least affected by the fact that there i-s no direct diplomatic exchange between the two countries. It merely happens that there is no Soviet consular representation in Australia. Here again, however, the Commonwealth’s position is clear. The Government has clearly indicated that it is ready to receive and welcome Soviet consular representatives in Australia. There is no obstacle of any kind to this, nor is there any governmental or administrative obstacle to the maintenance and development by Australia of trade relations with the Soviet Union.

An example of the already close cooperation between Britain and Russia is to be seen in the joint action taken to eradicate a potential German Fifth Column in Iran, and to safeguard the important supply route through Iran to Russia. The strategic importance of Iran, both to our own position in the Middle East and as a channel of supply to the Russian armies, is likely to become increasingly apparent. Of the three available routes by which help can be sent to Russia, the northern route through Mur.mansk and Archangel is threatened by enemy action as well as by winter ice. The eastern route, through Vladivostock, is, from the point of view of the United Kingdom, long and arduous. It is, therefore, essential that the Persian Gulf route should be not only kept open but also improved.

For some time, it had been apparent that large numbers of Germans, far more than were necessary for legitimate enterprise, had been entering Iran. As the Shah’s Government would not take steps to expel them, the Governments of the United Kingdom and Russia decided to take firm measures. On the 25th August, British and Russian troops entered Iran from the west and north respectively, meeting with little resistance. The Iranian Government, upon receiving an Anglo-Soviet assurance that no threat to the territorial integrity of Iran was involved, has now agreed to partial occupation of the country by British and Russian forces for the duration of the war, to the expulsion of German, Italian, Rumanian, Hungarian and Bulgarian diplomatic representatives, and to the surrender of all German nationals within the country. The abdication of the Shah, announced this morning, was not unexpected. He had been responsible for the downfall of the Iranian Government which was in power at the time of the initial Anglo-Soviet occupation, and his persistent intrigues with the Axis appeared likely to make it impossible for the present government to remain in office. His actions were clearly at variance with the real wishes of the Iranian people, and his abdication will greatly help the maintenance of stability in Iran.

It may be well at this stage to review briefly the position in other countries in the Middle East of particular interest to Australia. In Iraq, the situation has improved to such a degree that British women and children who were evacuated during the recent rising have now been allowed to return.

In Syria, military action has given way to the working out of a political settlement which will stabilize relations between the local Vichy representatives, the Free French authorities, and the United Kingdom. One piece of welcome news is that some thousands of Vichy troops have decided to join the forces of General de Gaulle.

Egypt is still apprehensive of a German-Italian invasion from the west, and has suffered in recent months from air raids extending to and beyond the Suez Canal. Meanwhile, however, our forces in the Western Desert are harassing the enemy by day and night, and the heroic garrison at Tobruk, though continuously bombed, is still being supplied and relieved by sea, despite all the efforts of the enemy.

The most serious threat to our position in the Middle East comes from the constant pressure by Germany against the Turkish Government, and much depends on the ability of the Turks to maintain their independence. The Germans have made great efforts to divorce Turkey from her alliance’ with Britain, but Turkish caution has so far resisted all their efforts.

Recent German preparations in Bulgaria must not, however, he overlooked, and the Turkish Government cannot have failed to take due note of them. The visit of Admiral Raeder, Chief of the German Naval Staff, to Sophia seems to indicate that some new move is afoot though its exact direction i3 not clear. A timely warning was recently given to the Turkish Government by the Russian Government, which knows only too well, from its own experience, the worthlessness of Nazi assurances, and the force of treacherous Nazi assaults.

I turn now to a brief review of the situation in Western Europe. British relations with Spain have continued to be prejudiced by Spanish, fears of occupation by Germany. However, Germany’s preoccupation in Russia has given the Spaniards a respite from extreme German pressure. There is no indication that General Franco is any more willing than he was last year to drag his povertystricken country once again into war.

In France, despite the efforts of Admiral Darlan to make a final peace with the Axis and construct a state entirely on the Fascist model, there are signs of growing unrest among the people. Frenchmen, who were willing to cooperate with the Nazis to restore order in communications and commerce, have been disturbed by events in Syria and Indo-China, and the wave of arrests and repression following the recent attempt on the life of Laval shows that this discontent is no mere passive uneasiness, and will assuredly be of weight when the day of retribution comes.

It is not yet clear what the effect of recent changes in the French High Command in North Africa will be. These may be a preliminary to closer collaboration with Germany in Tunis and Dakar, but it is possible that further Axis demands on North Africa will, in fact, be resisted, as was promised after the capitulation of Indo-China.

The political situation in French Oceania, which is of particular concern to Australia, is now comparatively stable. The French people in New Caledonia, the New Hebrides and Tahiti are strongly attached to the cause of Free France, and are devoting their attention, with the active assistance of the Commonwealth and New Zealand Governments, to the improvement of their economic and military position. The appointment by General de Gaulle of a High Commissioner for French Possessions in the Pacific should help to secure a vigorous and co-ordinated policy-

In the Far East there has been an undoubted lull during the last few weeks. This can be attributed largely to the firmness displayed by the Governments of British Empire countries and of the United States since the Japanese incursion into French Indo-China at the end of July. Immediately after the announcement of an agreement between the Japanese and Vichy Governments providing for the occupation by Japanese forces of bases in Southern Indo-China, the British and United States Governments took steps to freeze all Japanese assets under their control, thereby reducing trade with Japan to a bare minimum. Australia played its full part in the consultations which preceded the imposition of these measures, and in the action taken, although, as the Prime Minister announced at the time, no separate administrative action was necesssary on the part of the Commonwealth Government, since Japanese assets in this country were effectively frozen by the United Kingdom freezing order. There is no doubt that these speedy countermeasures came as a surprise to the Japanese Government. Their immediate effect has been reinforced by the subsequent strict application of the freezing orders. The result has been a very noticeable hesitation on the part of the Japanese Government, and a partial relaxation of the strong pressure which was being brought to bear on Thailand for a period after the Indo-China Agreement - pressure which at one stage led the Commonwealth Government to think that the Japanese were about to embark on a further southward advance.

It is reasonable to suppose that another important element in the determination of Japanese policy has been the resistance of Russia. There is evidence that the prolongation of the RussoGerman struggle has given rise to doubts in some quarters in Japan as to the previously regarded inevitability of an Axis victory. The war in Russia continues to be reported with reasonable impartiality in the Japanese press.

In this atmosphere conversations have for some weeks been proceeding at Washington between the Governments of Japan and the United States of America, with a view to finding a basis for a settlement in the Pacific region. The Commonwealth Government has been advised of these conversations, but it is not possible at the present time to form any judgment as to what their outcome may be.

The Government of the Netherlands East Indies has continued to display the firmness which characterized its attitude through the economic negotiations with Japan earlier this year. The Netherlands East Indies came into line with the British Empire and the United States by immobilizing Japanese funds, and by cutting down trade with Japan.

Thailand, despite its difficult position, bas given plain evidence of its determination to resist any attempt to violate its independence.

Recent Japanese offensives in north and central China and in the coastal areas have not developed on a large scale, and the general military position remains virtually unchanged, with the Chinese Government still firmly established at Chungking, and Chinese regular and guerrilla armies still active. Meanwhile, despite the blockade of the Chinese coast, China is keeping open its channels of supply with the outside world, and assistance from Britain and America, to the fullest extent possible, continues to reach the Chines armies over the Burma Road.

To sum up, I do not attempt to describe the situation in the Far East and Pacific except as one of continued suspense. The underlying reasons which have given us cause for uneasiness in the past still remain. It is certain that the Axis, and those who are its agents in the Far East, have not relinquished their attempts to involve the countries of this region in an. extension of the European war.

None the less, the fact that there has been a pause in the trend of events which a short time ago appeared to be leading direct to a dangerous climax, and the further fact that advantage has been taken of the pause to engage the Japanese Government in parleys, gives us ground for some modified encouragement. We may hope that the traditional prudence of Japanese policy will still reassert itself, and that the door to some eventual settlement, which will respect the rights and interests of all peoples in the Far East, has not yet been irrevocably closed.

Throughout the recent difficult period in the Far East, the United States of America has taken a clear and encouraging initiative in support of stability and against policies aiming at the domination of independent countries. That initiative we have gladly recognized and accepted, in the knowledge of the vital importance of Anglo-American collaboration in the East as well as in the West.

I venture to think also that under the stress of recent events Australia’s own policy in the Pacific region has become more conscious and better defined. We have continued to establish closer contacts with countries bordering this region. The house will be aware that the newly accredited American Minister, Mr. Nelson T. Johnson, has taken up duty in Canberra. I ask the House to join me in welcoming him to Australia, and in assuring him of the closest friendship and co-operation of the Government and people of Australia.

The arrival of the first Chinese Minister to Australia, Dr. Hsu Mo, will serve to remind the people of Australia that they now have a special interest in the future independence and prosperity of China. I am confident that the House will join me in issuing the warmest possible welcome to Dr. Hsu. The Australian Minister to China, Sir Frederic Eggleston, is at present on his way to Chungking.

At two other points in the Pacific region, whose security is closely linked with that of Australia, the Commonwealth Government has taken or contemplates taking steps which we hope will increase the effectiveness of our voice in Far Eastern policy and enlarge our means of direct contact with neighbouring countries. The first of these is Singapore, which, as a bulwark of Australian defence, a centre of growing political importance and commercial possibilities, and a focal point of imperial communications, possesses great significance for Australia. Furthermore, the presence in Malaya of units of the Australian Imperial Force and the Royal Australian Air Force must inevitably give rise to problems of administration which require close liaison with the imperial civil authorities at Singapore. In view of these considerations the Commonwealth Government has appointed at Singapore an official representative who twill exercise a wide range of functions covering administrative, political and commercial matters.

The question of Australian representation in the Netherlands East Indies also has engaged our attention, and negotiations are now proceeding in London with the Government of the Netherlands.

Mr FADDEN:
Prime Minister · Darling Downs · CP

– I move -

That the following paper be printed: - “International Affairs - Survey of Latest Developments - Ministerial Statement, 17th September, 1941.”

I desire to add a few observations of a general kind, which, I hope, will he of help to honorable members in their assessment of the broad picture of the war and the conduct of Australian and Imperial policy. First, I repeat with emphasis what has already been said many times, that the present period is for us still mainly an interval for preparation and for production. Thanks to Hitler’s decision to attack Russia, and to the most determined resistance which Russia has made to that attack, we have already had a full three months since June which could be utilized without distraction for increased war production. How much longer this period will last I do not prophesy. It is not impossible that the end of it is already very near.

Have we used this respite? Speaking for Australia, I say that, broadly, we have used it well. Our output in all branches of arms, munitions and war material has continued to mount from month to month. It is true also that the realization of what is at stake in this war, and the realization that to win the war we must depart more and more from normal ways of living, has in these last few months sunk more deeply into the minds of the Australian people. But this does not mean that we have yet reached the maximum of which we are capable. Side by side with the war production of the United Kingdom and other parts of the Empire, and with the flow of material from the United States of America, our own efforts must be increased. It is not enough that there should be no slackening. Every day must see its extra quota. It may be that this interval will be the last chance we shall have to concentrate practically ail of our attention on reducing the gap between ourselves and the enemy in arms and equipment.

I ask this Parliament, therefore, to set its face resolutely against any complacency. The main stream of the war may remain diverted from us for a further period of weeks or even months, but the diversion can only be temporary. The decisive stage of the war is still ahead, and will require our fullest commitment and our most exacting endeavours.

At the moment, the prospects of the war in Russia are uppermost in our minds. The statement which has just been read outlined the military situation on the front in the light of the information available, which is undeniably meagre. Enough is apparent, however, to indicate that the position for Russia is beyond question serious. The outstanding fact is that in spite of obstinate resistance and losses that must be on the heaviest scale, the German attack maintains its impetus and pushes steadily further into the Russian interior.

Whilst the progress of the Germans may be less than they had expected, and the cost greater than they estimated, it would be a profound mistake to suppose that Hitler has not calculated on a campaign lasting into the winter, or that the coming of winter will necessarily hold up the German attack. The probability is otherwise. With modern mechanized armies engaged in a war of movement, we are unlikely to see a reversion to the static warfare of 1914-18. In addition the winter is late enough in Southern Russia to allow still for two or three months of campaigning under favorable conditions. Although the Russian defence has been both courageous and efficient, the Soviet Union will need all the material support which the British Empire, together with the United States, can afford to it. Our position in this respect is unequivocal. Immediately on the outbreak of the Russo-German war in June, Mr. Churchill pledged to the Soviet the assistance of the British Commonwealth. That undertaking was endorsed by Australia two days later when the then Prime Minister (Mr. Menzies) declared our position. In the following month a formal declaration of mutual aid between the Soviet Union and the United Kingdom was made in Moscow, with the concurrence of the Dominion

Governments. We thus have towardsRussia the obligations of an ally, which we are bound hy every consideration of honour as well as of our own security to observe and carry out to the utmost.

As matters stand, military help for Russia has obviously been limited, but already British aircraft have arrived at the front and have been in action. Direct economic support is also well under way. Immediately Russia was attacked, the Governments of the United Kingdom and of the United States of America asked for a list of the materials that were most urgently needed for maintaining Russian war supplies. The British Ministry of Economic Warfare had in its possession a good deal of information on this subject and was able to make immediate dispositions. Supply missions from the Soviet Union have since arrived in London and Washington to co-ordinate arrangements. Tin, rubber, oil, boots and clothing, wool and other products have arrived in Russia and more are on the way. Long-range planning for the supply of Russian requirements will be facilitated by the discussions which are shortly to open in Moscow between the governments of the Soviet Union, the United Kingdom, and the United States of America.

In the programme of economic aid to Russia, Australia may have a direct part to play. We are not, however, a principal in this matter and no good purpose would be served by attempting to take on ourselves commitments which would be in advance of the proper co-ordination now on foot between the three governments primarily concerned. We shall meet to the fullest extent possible any requirements which may in due course be allocated to Australia.

I come now to the second cardinal feature of our immediate war outlook, namely, the growth of co-operation between the British Commonwealth and the United States of America. In many ways, we can see the course and conduct of the war in its best perspective by regarding it against this background. Since the Atlantic meeting of President Roosevelt and Mr. Churchill, no one can doubt that the United States of America is committed to the moral and material support of the Allies until the aim which it shares with them - the destruction of Nazi Germany - is achieved. This must be a dominant fact in our estimation of the future. Against the military ebb and flow in Europe, the Mediterranean or the Near East, we are entitled, on a long-range view, to set American and British sea-power, American and British industrial capacity, and a common Anglo-American resolve. This collaboration is our principal aid to victory. Used to the utmost, and, above all, filled out by our own efforts, it will enable us in due time to strike decisive blows.

I mentioned American sea-power. For some months in the Atlantic, which is a crucial theatre of war for us, the American Navy has been performing a most valuable service in patrolling and giving warning of enemy surface or underwater craft. Now, following the President’s declaration of the 11th September, American warships are under orders to give actual protection against enemy attack to shipping in waters vital to American defence. The declaration was momentous. It inspired us, and was highly expressive to all of the determination of the Government of the United States that American supplies shall pass across the .seas unhindered. I make special reference to it because of its incalculable influence on the course of the war. Germany may or may not desire to take up the challenge at. once. If Germany does not, it will lose its ability to strike at the vulnerable sea-routes in the North and South Atlantic, to the outstanding advantage of Great Britain. If it does, German raiders, air, submarine and surface, venturing outside the strict .combat zones defined under American law will do so at the risk of clash with naval forces of the United States. That would appear to be a reasonable interpretation of the President’s .declaration. The term “ American defensive waters” is obscure; but I have no doubt that it is deliberately so. If the Germans wish to test the meaning of the term, they are free to do so, and to take the consequences.

Nearer home for Australia, we have good reason to acknowledge the encouragement which we have derived from American policy in the Far East during the last few months. It is a mattei of deep satisfaction to the Commonwealth Government that recent AngloAmerican action in this region has been concerted.

Throughout the critical period in the Far East, extending now for well over a year, the Commonwealth Government has regarded it as of the highest importance that Imperial policy in this area should be co-ordinated, so far as circumstances allow, with American policy, besides being based on the fullest consultation between the British Commonwealth governments concerned.

Accordingly, I take this opportunity to welcome the arrival at Singapore within the last few days of Mr. Duff Cooper, a leading member of the Government of the United Kingdom. The purpose of Mr. Duff Cooper’s visit to the East is to help in the co-ordination of Imperial policy and to facilitate exchanges of views between the relevant authorities.

In this process Australia will gladly co-operate, and we have formally invited Mr. Duff Cooper to visit us as soon as possible after he has established himself at his Singapore head-quarters.

Important aspects of Far Eastern policy are now under direct discussion between ourselves and the Government of the United Kingdom.

As for the actual outlook in the Far East, I do not propose to enlarge on the survey which honorable members have just beard, except to repeat that I do not regard the situation as having changed in essentials during the last month, and that we must remain vigilant and ready for some sudden turn of the war which will impel us to active self-defence near our own coastlines.

Malaya is one frontier of Australian security. The other, in the defence of which we have also undertaken to share, embraces Egypt, the Suez Canal and the Near East. In this area, at sea and in the air over the Mediterranean, on the perimeter at Tobruk, and across the Libyan frontier, Empire forces are using growing opportunities for offensive action against both Italy and Germany. In recent months, they have been strengthened greatly in numbers, and still more in equipment. Our general activity in the Mediterranean is perhaps less spectacular, but not less persistent or in pro- portion less effective than operations of the Royal Air Force in western Europe. It is imperative that both should be maintained at the maximum scale if we are to obtain the utmost possible military advantage from the preoccupation of the main part of Germany’s land and air arms in Russia. Reckoned in terms of destruction of the enemy’s war resources and shipping, and in the possible effects on morale in Europe, the advantage will not be small. It might be very substantially increased if new openings for the offensive are availed of quickly and decisively as they occur. But we should not delude ourselves that in general we have yet passed out of the broadly defensive stage of the war into which the British Empire was forced after the collapse of France. There will certainly be further trials and disappointments before we have done that.

In Australia, we would do well to keep specially in mind the threat to our security if Germany should again turn its strategy to the Mediterranean and the Middle Eastern countries in the near future. Having command over most of Europe and of the northern shores of the Mediterranean, the enemy may strike viciously at the centres controlling the historic routes from west to east. “We have been accustomed to think of these as being sea routes only, but with modern motor transport and aircraft, the old land routes may well become just as important. In that event, trade routes through Asia Minor, Iraq- and Iran to the East will once more be the objective of a dictator seeking world power.

Looking ahead, and bearing in mind the extraordinary change of the conditions of warfare, we must accept the unpleasant fact that our security to-day is imperilled as never before. We are still fortunate in that potential enemies are still some thousands of miles from our shores. We should therefore throw into the struggle our full weight of men and materials at places where they are likely to be most effective. We are being called upon to do this in increasing measure, and we are responding. Australia’s war effort is daily growing in magnitude and still more in efficiency. At the same time, we are building up our home defences on land and sea and in the air, and establishing a munitions industry of which we can be justly proud.

Honorable members will have read the report of the members of the British Ministry of Supply who visited Australia at the beginning of this year, and will recall the statement that -

It is quite clear that the possibilities for the production of armaments and war supplies generally in Australia far exceed the possibilities of any other country in the Eastern Group.

Because of this, we are being called upon to produce an increasing amount and an ever-widening range of supplies and equipment, not only for our own troops, but also for the troops of other dominions. These orders, which go through the Eastern Group Supply Council, are part and parcel of a plan of co-ordinated Empire war effort. We would be failing in our duty if we did not respond to our utmost to these calk. We are doing that, and consequently we have planned a heavier programme of production of munitions, equipment and supplies than ever before in the history of the country.

To quote again from the report of the British Ministry of Supply, we have the assurances of these expert investigators that-

Subject to the few exceptions already mentioned we have no reason to doubt, speaking generally, the ability of the Commonwealth to achieve the programme.

And again -

In the main, there seems to us no reason to believe that the programme is unduly optimistic or exaggerated.

We should not regard it as either optimistic or exaggerated. The present international situation is so grave that no effort on our part can he too great. We have seen democracies, great and small, overwhelmed by the common enemy. We have seen him invade Russia and within ten weeks occupy an area as large as Germany. We have seen him waging terrible war upon ships which are supplying Britain’s urgent need of food and equipment, and we have ample evidence of his capacity to carry on this work of destruction. He will not be overthrown without the united efforts of the United Kingdom, the Dominions and their allies, backed by the enormous industrial reserves of the United States of America.

The theatres of war may seem remote to us in Australia, but never have they been closer. What we are doing now to improve our military forces and to develop our munitions industry is of the greatest importance. I quote again from the report on munitions production in Australia : -

There appears to be a lack of appreciation by the Australian public and by the men themselves of the extent and importance of the work that they are doing. We doubt whether it is universally realized that the need for armaments and all forms of war supplies, at the earliest possible moment, is as great to-day as it was at the time of the collapse of France in June last. We are inclined to think also that it has not been sufficiently realized by the public generally that in the present war the number of troops in the field is not the prime factor, but that the quantity and quality of the latest forms of armament, both offensive and defensive, with which those troops can be equipped, is of supreme importance. In other words, this war is to be far greater than any previous one, a mechanical war, an engineer’s war.

I should be failing in my duty if I did not remind honorable members again of the urgency of the task before us, and of the importance of making every possible sacrifice in order to contribute our full share to the Empire effort. Only in this way shall we keep the enemy from our own shores, protect our sea routes to the old world, make our contribution to the safety of the United Kingdom, earn the respect and co-operation of the great free people of the United States of America and share finally in the destruction of the menace to all free and humane peoples represented by Hitlerite Germany.

Debate (on motion by Mr. Curtin) adjourned.

page 305

RAW COTTON BOUNTY BILL

(No. 2) 1941.

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 ant to amend the Raw Cotton Bounty Act 1940-41.

Resolution reported.

Standing Orders suspended ; resolution adopted.

Ordered -

That Mr. Harrison and ‘Sir Frederick Stewart do prepare and bring in a bill .to carry out the foregoing resolution.

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

Second Reading

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

– I move -

That the bill be now read a second time.

The sole purpose of the bill is to enable the Commonwealth to guarantee cottongrowers an average net return of 15d. per lb. on raw cotton above the grade of strict good ordinary that will be produced from the 1942 crop and thereafter until the completion of one cotton season after the cessation of the present hostilities with Germany. This net return will include any net return to growers from sales of by-products of raw cotton such as cotton-seed oil, seed cake, and oil cake.

The necessity for .this legislation arises from the great expansion of Australian manufacturers’ requirements of raw cotton, ‘and the increasing shortage of overseas shipping. It is estimated that 80,000 bales- equivalent to 500 lb. net weight each - of raw cotton will be required during the next year by local manufacturers of cotton yarn, explosives, absorbent cotton wool, medical lint and numerous other products. However, during the 1941 cotton season, which will end in a few weeks, only 12,000 bales of raw cotton is expected to be produced arid, under prevailing conditions as to the price to grower, viz. 12$d. per lb. as provided by the present Raw Cotton Bounty Act, it is most unlikely that production from the 1942 Queensland crop will exceed 15,000 bales.

On this basis some 65,000 bales would need to be imported for current consumption from other countries, mainly the United States of America, India. Egypt, East Africa and the Belgian Congo. In addition, it i3 essential, for reasons of national security associated with the shortage of shipping and expanding war needs for cotton, to maintain adequate reserve stocks of raw cotton in Australia. For this particular purpose, a further 40,000 bales of raw cotton should be provided during the next twelve months. Australia’s raw cotton requirements during the next year are, therefore, 105,000 bales in excess of the maximum likely production in Queensland under present conditions as to price to growers and rising costs of production. In view of this weak supply position, the Government has considered it prudent and justifiable to take steps to encourage a large expansion of cotton growing in Australia, so as to reduce our present excessive dependence upon imports which might be reduced or seriously delayed in the event of hostilities breaking out in the Pacific Ocean or Indian Ocean.

Competent authorities, both Federal and State, .agree that a guaranteed net return of 15d. per lb. for Australian raw cotton will, subject to adequate stimulus and organization by State authorities, cause the 1942 crop to yield at least 30,000 bales of raw cotton, or more than twice the output from the 1941 crop. This price is equivalent to 5id. per lb., for seed cotton, or id. per lb. less than the net return. guaranteed from 1920 to 1923 when the cotton-growing industry was revived in Australia. The price of 5$d. is, however, higher - and in many cases much higher - than any net return on seed cotton to growers since 1923.

I point out to honorable members that, although 15d. per lb. represents an advance of nearly 4d. per lb. on the average net return to producers for several years before the- war, it is slightly less than the present duty-free cost at Australian ports of similar types of American raw cotton: Having regard to increasing world demands for raw cotton for war purposes, the partial destruction of large cotton-growing areas in Russia, which is one of the principal world producers, and overseas shipping shortages and freight rates, it may be expected that overseas cotton will not be obtainable in Australia during the rest of the war at less than current costs; indeed, costs of such cottons may rise further. In any event, the bill is unlikely to involve the Commonwealth in substantial payments of bounty, except for the cotton season immediately following the end of hostilities.

However, without the security of the guaranteed price afforded by the bill, it is not to be expected that many new farmers would enter the industry or that existing growers would increase their production substantially, because it is only natural that present and potential growers will look at the position they would occupy if the war were to end suddenly and cause all raw cotton values to recede below present levels. This is a risk that governments must shoulder during abnormal times, as, indeed, is being done in many directions by the governments of all the warring nations, as well as the United States of America.

A large expansion of cotton growing in Queensland, or new production in other States, will entail the preparation of 50,000 or 60,000 acres of additional land for planting by the end of November next. Costly work of this nature can be undertaken by many growers only if they receive loans or credits from State governments and various financial institutions. Such aid will not be rendered to a sufficient degree, unless it is clear beyond doubt that all the raw cotton produced will be saleable at remunerative prices. Such prices are assured by the bill now before the House, and the extensive demand by Australian manufacturers.

The extension of the guarantee for one complete cotton harvesting season . after hostilities cease is essential, because growers who have incurred considerable expense in the preparation of land, planting operations and cultivation of the crop up to the signing of an armistice in the belief that a certain price will be received for their crop, are entitled to that price. If the price were not guaranteed in this way, it is clear that fears of a post-war recession in market values would result in cotton-growers adopting an ultracautious development policy to the detriment of our war-time needs for this vitally important raw material.

The guaranteed price of 15d. per lb. is based on three factors. I have already mentioned the first, viz., that the present cost at Australian ports of similar types of cotton from the United States slightly exceeds 15d. per lb., and may become higher. The second factor is that Australian production costs have increased since the war began, and will doubtless advance still further. Moreover, production costs in the large new areas expected to be devoted to cottongrowing will, in general, be higher than the costs on well-established farms where capital expenditure has been written down over a period of years. Also, new growers are not likely to be as efficient as experienced growers. The third factor is that the present net income of most cotton-growers - either absolutely, or in relation to the net income from other farm products in their districts - is not sufficiently attractive to induce them to expand their production substantially. Incidentally, a large expansion of cottongrowing in Australia will provide a remunerative vocation for other primary producers whose economic position may be weakened by reduced exports of various commodities caused by overseas shipping shortages or closure of overseas markets.

Honorable members may recall that the present Raw Cotton Bounty Act, which covers all production up to and including the 1945 season, was intimately associated with a definite undertaking by the Queensland Government that its plan for improving the efficiency of the cotton-growing industry would preeminently and almost exclusively provide for -

  1. the quickest possible conversion of cotton production from dry farming to irrigation by the most economic means for each selected locality;
  2. a special campaign by enough thoroughly-qualified men to instruct all farmers personally and quickly as to the absolute need for practising correct rotations and other essential cultural methods; such campaign to be followed up persistently with the object of ensuring that the best practices shall be adopted by the bulk of the farmers in the shortest possible time, this campaign to include the circulation of suitable literature ;
  3. a substantial increase, in quality and number, of the personnel of the Cotton Research Section, for the specific purpose of accelerating vital scientific work on plant-breeding, pests, diseases, soils, fertilizers, cultural practices, and especially the new problems that are sure to be encountered with production under irrigation;
  4. anything related to these measures. The Queensland Government also agreed to ensure complete co-operation between its Department of Agriculture, the Queensland Cotton Board, cotton spinners, and the Department of Trade and Customs on all relevant matters, particularly in regard to the supply at all times of the types of raw cotton most suitable for use by Australian manufacturers. I am pleased to say that the Queensland Government has been carrying out these undertakings in a satisfactory manner, having regard to the difficulties unavoidably experienced under war-time conditions.

The purposes of the undertakings and the guaranteed minimum net return of l5d. per lb. now proposed render it advisable to sound a note of warning concerning the possible post-war position of the industry. As honorable members are aware, the Commonwealth’s cotton policy since 1935 has been based on the availability to spinners and other manufacturers, at all times, of raw cotton at the Australian equivalent of world’s parity prices, irrespective of the origin of the cotton. Tinder this policy, a sliding-scale bounty has been paid to Queensland growers to such an amount as is deemed necessary to provide them with a reasonable net return under prevailing conditions as to production costs.It is unlikely that present high world prices, which are almost wholly due to abnormal war-time conditions, will continue for long after the war ends. Under such circumstances, the Commonwealth could not guarantee Australian producers the continuance of such an attractive price for raw cotton as 15d. per lb., because the burden of cost on the Commonwealth budget would be tremendous and out of proportion to the present economic value of the industry to Australia and to normal world values for raw cotton. I suggest, therefore, that the price now being arranged for cotton-producers should be regarded by them and the appropriate State authorities as affording an excellent opportunity for expenditure on plans with the express object of increasing efficiency and reducing production costs in order to meet the post-war position.

In this connexion, all overseas experience proves abundantly that production costs can be substantially reduced by producing raw cotton under irrigation. In certain States in the United States of America, and in Egypt, Russia and several other countries, the yield per acre under irrigation has always been at least three times as high as the yield under natural rainfall conditions. Similar results have been consistently achieved in the comparatively small irrigated areas in Queensland. Many years of experience in the cotton-growing districts of Queensland have proved that rainfall and other important climatic conditions are too variable and unreliable for the economic production of raw cotton. The Queensland Government fully recognizes this fact, and I hope that the next year or two will witness a very marked advance in irrigation development.

Picking or harvesting costs in Australia are the highest in the world, being two and a half times as high as in the United States of America. Even in America, serious consideration has been given to the practicability of using machinesto pick cotton, thus reducing costs and helping to solve the problem of usually low world-market values for raw cotton. It would seem, therefore, that the future of cotton-growing in Australia will be largely determined by a marked reduction of picking costs, which can only be achieved by the use of machinery. The Commonwealth Government has already rendered financial assistance to the Queensland Cotton Board towards the purchase of a mechanical cotton-picker, which has been experimented with for two seasons. All competent authorities recognize that, whilst a wide adoption of mechanical cotton-picking will displace human pickers to a corresponding degree, the reduction of employment in thai direction will be far less than increases of employment of farmers, field workers and ginnery workers created by a large expansion of cotton-growing, which is only possible in the long run by a substantial reduction of production costs and selling prices.

The bill does not alter the established practice of the last few years, whereunder Australian raw cotton must be sold to manufacturers from time to time at the Australian equivalent of world parity prices of similar cottons. To such degree as current parity prices permit, the Queensland Cotton Board will be expected to sell its raw cotton to spinners and other users at prices which will not involve the Commonwealth in the payment of any unnecessary bounty. As I have already stated, if present parity prices continue little, if any, bounty will be payable under this bill while the war is actually in progress. The outstanding merit of the bill is the confidence which cotton-growers may properly derive from it in their plans for meeting the urgent needs of this country for a raw material that is of first-class importance to out Defence Forces. I feel sure that the Commonwealth Parliament will not look in vain to the cotton-growing industry for an adequate response to these needs.

Debate (on motion by Mr. Forde) adjourned. .

page 309

CABLE AND WIRE BOUNTY BILL 1941

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 provide for the payment of bounty on the production of rubber-insulated cable and rubber-insulated wire.

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.

Second Reading

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

– I move -

That the bill be now read a second time.

The bill provides for the payment of a bounty of 4d. for each1lb. weight of copper wire used in the manufacture of rubber-insulated cable and rubberinsulated wire - other than such cable and wire sold by a manufacturer direct to the Commonwealth for use for defence purposes - which has been or will be manufactured during the period from the 1st July, 1940, to the 30th June, 1942, for sale for use in the Commonwealth. Bounty will not be paid to such an amount as may cause the net profit derived by a manufacturer from the manufacture and sale of bountiable cable and wire to exceed 8 per cent. of the capital actually used by him in such manufacture and sale. Furthermore, the maximum amount of bounty payable in respect of cable and wire manufactured during either of the two financial years covered by the bill is £25,000.

A brief description of the origin and circumstances of this new industry will, I hope, be of value to honorable members in their consideration of the merits of the bill. In June 1940, the Olympic Tyre and Rubber Company Limited commenced in Melbourne the commercial production of vulcanized india rubber - V.I.R. - cables for wiring dwellings and factories, and also certain types of flexible cables, with the ultimate object of making these and other kinds of rubber-insulated cables and wires to the extent of one-third of Australia’s requirements. A modern and efficient plant was installed, and tests have proved the satisfactory quality of the company’s production. Most types of rubber-insulated cables and wires have come to Australia from the United Kingdom, on a duty free and 4 per cent. primage basis. Consequently, the Melbourne company has had to sell its products for civil purposes in competition with the prices of less costly imported goods, and this has entailed substantial losses to the company so far. For this reason, the bill now before the House has a retrospective effect, providing the bounty on all non-defence production as from the 1st July, 1940.

The company’s original intention was to accumulate sufficient stocks in order to enter the market in all States simultaneously, and it also had in mind seeking protection from the Government before entering the market. However, bef ore this could be done, a survey by the Department of Supply and Development of stocksof rubber-insulated cables in Australia disclosed a serious shortage, due to reduced imports from the United Kingdom caused by the war. In response to official requests, the company released its stocks for consumption earlier than had been originally planned, and the Tariff Board advises that some, if not the whole, of the losses would probably have been avoided if the company had adhered to its original intention of entering the market at a later date when higher selling prices would have been obtainable.

I mention here that a considerable portion of the company’s output has been sold to the Government for defence requirements, and that no bounty will be payable inrespect of the goods involved, the question of fair and reasonable prices being one for settlement between the company and the Commonwealth departments concerned.

Owing to increasing war-time difficulties, which are affecting manufacture and shipping, it now seems likely that no supplies of rubber-insulated cables and wires will be obtainable from Great Britain, in which event Australia may have to rely almost entirely on local production for its requirements. Normally, the wholesale value of our requirements of rubberinsulated cables, and wires, is at least £1,500,000 per annum.

In order to meet this unexpected demand, the Olympic Tyre andRubber Company Limited has taken steps to increase its productive capacity and another company, Cable Makers (Australia) Proprietary Limited, is about to start production at Liverpool, New South Wales. These two companies expect to provide the bulk of Australia’s requirements within the next year or two. It is likely that from 800 to 1,000 employees will be directly engaged in this new industry at no distant date.

The Tariff Board’s report stated that the industry must be considered one of great importance during the war and that,on the return of peace, it should be capable of taking its place among the permanent industries of the Commonwealth. The Tariff Board is. therefore satisfied that assistance to the industry is justified, and it has recommended that the bounty provided in this bill be paid on all production from the 1st July, 1940 until the 30th June, 1942. Already the industry has rendered valuable assistance to our war effort by meeting many demands for electric cables for use in Australia and in various theatres of war.

The Tariff Board has recommended that, before the expiration of the bounty, the method of future assistance to the industry, whether by a customs tariff or by a further bounty, should be reviewed. The Government will arrange for such review in due course.

It is now quite a common practice, in connexion with the establishment of new. industries in Australia, to assist them by means of a bounty in their early stages when production is much less ‘than the requirements of the market. This practice results in a much lower cost to the community than the immediate imposition of a protective customs tariff. As local production approaches market requirements, bounty assistance can be effectively and economically replaced by tariff protection.

The production of rubber-insulated cables in Australia is an immediate wartime necessity, and will be a valuable post-war industry of fairly considerable magnitude. It will not only provide employment for a large number of persons directly, as I have already indicated, but will also create indirect employment by its demand for local copper wire, lead, tin, chemical ingredients and cotton. The only important non-Australian raw material used is rubber, and that is obtained from British Malaya.

I have no hesitation in commending the bill to the favorable consideration of honorable members.

Debate (on motion by Mr. Forde) adjourned.

page 311

POWER ALCOHOL

Report of Committee or Inquiry

Debate resumed from the 25th June (vide page 364, vol. 167) on motion by Mr. Spender -

That the following paper be printed: - ‘Power Alcohol - Report of Committee of Inquiry “.

Mr FORDE:
Capricornia

.- All honorable members were pleased to receive the report of the Power Alcohol Committee of Inquiry, dated the 17th May, 1941. Such remarks as I shall make on the subject will be mainly critical of the delay which the Government has permitted to occur in implementing the report, particularly in view of the serious shortage of liquid fuel in Australia, and of the obvious advisability of pushing ahead with a bold national scheme for the manufacture in this country of power alcohol from various agricultural products, including wheat and sugar. It is impossible for us to over-estimate the importance of petrol and other liquid fuels as they are of- major consequence, not only to our economic life, but also to our defence activities. The numerous letters received by honorable members from their constituents in every part of Australia complaining of the inconvenience that they have had to suffer since the petrol rationing scheme came into operation have brought home to us the importance of liquid fuel in the every-day life of the community. When the shortage of liquid fuel became acute we realized as never before how practically every person in the community was affected, either directly or indirectly. Hundreds of thousands of our people have been seriously inconvenienced and their business operations have been dislocated by the shortage of liquid fuel. This has caused considerable unemployment in certain trades, more particularly the motor trade. Consequently, so far from opposing any steps that the Government is taking to establish power alcohol distilleries in various parts of the Commonwealth, we applaud its activities. Our complaint is that the Government should have acted more than two years ago. The delay that has occurred in giving effect to a modified degree to the provisions of the report has been entirely unjustified. The production of power alcohol has been the subject of controversy for many years. Some people have alleged that power alcohol is not so good a liquid fuel as petrol, but most honorable members of this House, irrespective of their party affiliations, have stressed the great importance of obtaining power alcohol from various surplus primary products in this country. Yet only now, when we are desperately in need of every gallon of petrol and every gallon of liquid fuel that we can obtain, has the Government agreed to take some action. I believe that power alcohol should be manufactured from many of our surplus primary products, and, although I am particularly interested in the sugar industry, I am pleased, as an Australian, to know that large quantities of surplus wheat are to be used to produce this very necessary liquid fuel. The fact that various primary products can be used for this purpose is an assurance that the project will have enthusiastic support from people all over Australia. The proposals will be much more substantially supported, for example, than if only surplus sugar produced in Queensland was intended to be used. The honorable member for Forrest (Mr. Prowse), who represents a large wheatgrowing area in Western Australia, has not been noted in the past for his support of Australian secondary industries, but it is probable that he will support this proposal because it will be of some benefit to the wheat industry in which he is interested. In fact, I expect him to be as favorable to the” production of power alcohol from surplus wheat as he has been to the establishment of the tobacco industry. The honorable member for Calare (Mr. Breen), the honorable member for Gwydir (Mr. Scully), the honorable member for Riverina (Mr. Langtry), the honorable member for Wannon (Mr. McLeod), and the honorable member for Maranoa (Mr. Baker), among honorable gentlemen on this side of the chamber, all represent large wheat-growing districts, and they have been as active in their support of the proposal to produce power alcohol from wheat as they have been vigorous in their denunciation of the Government for its delay in giving effect to the recommendations of the Power Alcohol Committee of Inquiry. I have no doubt that, in the course of this debate, they will reiterate their criticisms. I do not intend to suggest to the Government where the proposed distilleries should be established, for I have no doubt that representatives of wheat-growing areas will make effective representations on that subject.

Mr Beck:

– There should be some distilleries in the fruit-growing areas.

Mr FORDE:

– I have no doubt that that, subject also will engage the attention of the Government. I trust that the Minister representing the Minister for Supply and Development will be present in the chamber throughout this debate in order to equip himself to make suitable representations to his colleague on the suggestions made. Unfortunately the Government has not gone far enough, in my opinion. That view is shared by many other honorable gentlemen. The Power Alcohol Committee of Inquiry recommended that immediate action should be taken to erect distilleries to produce 40,500,000 gallons of anhydrous alcohol, but although its report was made on the 17th May last, the Government has not achieved any practical result. The recommendations of the committee were clear and definite, and I can see nothing to justify the Government shelving consideration of the subject. I should like to know why, after the committee submitted its report, the document was referred to another body for an expression of opinion. The committee included in its personnel gentlemen of high executive ability and wide technical knowledge, and it devoted nine months to its inquiries, but no action has been taken upon its findings, except to refer them to another committee. Any one who knows anything about the history of power alcohol in Australia is aware that the Standing Committee on Liquid Fuel, the members of which were afforded the opportunity of reporting on the report of the committee of inquiry, included gentlemen who have always been opposed to the manufacture of power alcohol in Australia, and have criticized the fuel value of power alcohol. In my view vested interests have been at work in relation to these issues, and views have been expressed which have not been without bias. Any one who has had the opportunity of using a proper admixture of petrol and power alcohol knows that it is as good as any super grade fuel which has been placed on the Australian market. This has been proved beyond all doubt, and I am particularly pleased that the Power Alcohol Committee of Inquiry was unanimous on this subject. Under the Government’s scheme it is proposed to produce 7,000,000 gallons of alcohol from sugar products, 5,000,000 gallons from the existing rectifying spirit distilleries which are operating in the Murray Valley and 10,000,000 gallons from wheat. To-day we have three distilleries producing power alcohol mainly from molasses. These plants are in operation at Sarina, in Queensland, Yarraville, in Victoria, and Pyrmont, in New South “Wales. It is proposed to use these resources to the fullest possible capacity.

Mr MCCALL:
MARTIN, NEW SOUTH WALES

– Are not these plants owned by the Colonial Sugar Refining Company?

Mr FORDE:

– The plants at Yarraville and Pyrmont are controlled by the Colonial Sugar Refining Company, but I believe that the plant at Sarina is independent. A large overseas whisky combine has a big interest in it. The amount of molasses to be used in the plants producing power alcohol from sugar will be supplemented by approximately 44,000 tons of raw sugar per annum. The valuable and voluminous report of the committee of inquiry stated that if all motor fuel consumed in Australia were blended with between 12£ per cent, and 20 per cent, of power alcohol, a high grade fuel would result which would enable the average petrol engine to yield its greatest efficiency. The normal consumption of petrol in Australia is about 350,000,000 gallons per annum. If this quantity were treated with a blend of say, 15 per cent, power alcohol, approximately 52,000,000 gallons of power alcohol could be used in Australia each year. That an effort was not made prior to the outbreak of this war to establish and develop this industry to a production of 52,000,000 gallons of alcohol per annum, for blending with Australia’s normal consumption of petrol, totalling 350.000,000 gallons per annum, is to be deplored.

Mr McCall:

– Is the 52,000,000 gallons regarded as the possible maximum production ?

Mr FORDE:

– The committee pointed out that, if the normal consumption of petrol contained 15 per cent, of alcohol, approximately 52,000,000 gallons of alcohol would be required each year. The Government, however, has seen fit to make provision for a production of only 22,000,000 gallons of power alcohol. The former Minister for Supply and Development (Senator McBride), said in a statement on the 25th June, that in dealing with the recommendation of the committee, the Government had to bear in mind the necessity to develop the production in Australia of substitutes for imported petroleum to the limit of the plant and man-power available. I entirely disagree with the contention of the Government in regard to the position. It is essential that additional plants be constructed. Their construction would not interfere in any way with the war effort of the Government in respect of manpower. Representing sugar districts, 1 know that optimistic views are held by certain gentlemen who have spent a lifetime in an investigation of the production of power alcohol from surplus sugar, in regard to the efficacy of a big manufacturing scheme for absorption of the surplus sugar production. Mr. J. A. Hackett, in an address which he gave to the Rotary Club at Townsville, on the 23rd April last, said that if ever there was a time when factories for the production of power alcohol should be established in Queensland, it is now, and that the academic question of economics, or that of vested interests, should be ruthlessly brushed aside. We are forced to curtail our imports of motor spirit, and there must be further drastic curtailment. We have the material, the plants, and the trained men available to replace it with power alcohol from sugar, or its by-product, molasses. Mr. Hackett went on at length to show the practicability of the whole scheme, and pointed out how Australia, from its surplus sugar production, could supply a greatly increased quantity of power alcohol.

Mr JOLLY:
LILLEY, QUEENSLAND · UAP

– Is the surplus sugar sufficient for what the Government proposes to do?

Mr FORDE:

– One-half of the sugar produced in Australia is consumed locally, and the other half is exported. A greatly increased quantity of sugar and ‘molasses could be utilized. I do not say that sugar can be produced in Queensland at a sufficiently low price, and in quantities large enough, to supply anything like the existing shortage of petrol - that would involve reduction of the price of sugar to an unpayable level - but, taking into consideration the Australian consumption, the price received for it, and the quantity which inevitably has to be exported, a much larger tonnage for the manufacture of power alcohol could be provided than has so far been made available. If the Government were to give full effect to the recommendations of the Power Alcohol Committee, three very useful purposes would be served. Additional supplies of petrol would be provided for defence needs, and our economic life would be enabled to progress smoothly. The drastic repercussions caused by petrol rationing, which will be felt ‘with increasing severity as the rationing is accentuated, cannot be too strongly stressed. Hardship has been caused in numerous cases, and there has been serious interference with primary production. Men whose operations take place at a distance from the railway, and who consequently have to depend on the utility truck for the transport of their produce to markets, have suffered very severely, and these sufferings will be increased. What could have been done two years ago in the production of power alcohol, should have been done. There is a third benefit which cannot be overlooked, because it relates to post-war reconstruction. I believe that this is one of the industries which will have to be considered in that regard. The committee pointed out in its report that the production of an additional 40,000,000 gallons of power alcohol would absorb 14,000,000 bushels of wheat and 64,000 tons of sugar; that, assuming the price of wheat to be 3s. 6d. a bushel, and the price of sugar £9 a ton, £3,000,000 per annum would be distributed among the primary producers of Australia, and in addition, the distilleries in a permanent industry would employ approximately 900 men.

In connexion .with the extraction of power alcohol from sugar, the committee dealt with two schemes, but favoured what it called the juice mill scheme, under which the capital cost of a “ distillery capable of producing 8,000,000 gallons per annum, including land, buildings, plant, storage, &c, is estimated at £550,000. Each 1,000,000 gallons of alcohol produced from sugar cane would absorb approximately 8 tons of sugar, or 50,000 tons of sugar cane.

The importance ito Queensland and Australia of the sugar industry, which is suffering from over-production, cannot be over estimated. During the last war, the consumers of Australia were able to obtain sugar at a price not exceeding 6d. per lb., because of the existence of the Australian sugar industry; whereas the consumers of Great Britain, as well as of France and other European, countries, paid up to ls. 6d. per lb. It is estimated that the consumers of Australia were thus saved approximately £16,000,000 during the period of the last war. The price could have been lowered to less than 6d. per lb. much sooner than it was, but for the fact that the Hughes Government of the day set out to reimburse the Treasury to the extent of the loss which had been incurred by the Government on the importation of sugar, in order to supply the shortage which existed in this country; because in those days the local sugar industry was not able to meet our requirements. The Commonwealth Government of the day, working in cooperation with, and at the request of, the Queensland Government, fixed a price of £30- 6s. 8d. a ton for the sugar we were forced to import in order to meet the difference between production and consumption in Australia, for which as high as £80 a ton had to be paid. It is not necessary for me to go into details in order to show that the existence of the local industry, which is now producing the whole of our requirements of sugar, is of tremendous importance during the present war period, in that it enables Australian consumers to purchase the very best sugar that can be produced in the world, and at a price lower than world parity. This helps very materially in keeping down the cost of living.

The Government would be well advised to provide additional distillery accommodation in Queensland, in order to increase the output of alcohol from sugar. Alcohol made from sugar juices in Queensland, and tankered to the southern States, could compete with alcohol made from any other raw material, even wheat. As a matter of fact, the actual production of alcohol from sugar juices is cheaper than production from any other material, and wheat is enabled to compete with sugar only because the raw material, or the alcohol, has to be transported from Queensland to the other States. I do not wish it to be thought that I am in any way decrying the erection by the Government of plants to extract petrol from wheat. I am glad that the Government has decided upon such a course; but if it can expend £1,100,000 upon the erection of such distilleries in the different States, it could at least expend an additional amount upon the erection of distilleries in Queensland for the production of power alcohol, from molasses and surplus sugar juices. Far from wishing to prevent expenditure upon the establishment of distilleries in wheat-growing areas in other States, I would increase that expenditure, and in addition provide the necessary funds for additional distilleries in Queensland. An alcohol distillery building alongside a sugar mill would need far less construction than a wheat distillery, and could be constructed more quickly. As we are in urgent need of more motor fuel, it is important that everything be done to increase production. I have a fairly wide knowledge of the power alcohol industry in Queensland, and of the assistance which has been given to it by the Queensland Government over a number of years. I believe that no government in Australia has given more sympathetic attention to it than has the Queensland Government, particularly its leader, Mr. Forgan Smith, who, as a Minister some years ago, played a very prominent part in its establishment at Sarina, and later, as the head of the Government, introduced legislation to compel the oil companies to mix a certain percentage of power alcohol with the petrol that they sold.

Mr Paterson:

– Can. the honorable member say what proportion of Queensland molasses is going to waste at present ?

Mr FORDE:

– None of it is going to waste; it is being utilized for various purposes, including the production of fertilizers and methylated spirit, and in feeding stock. There is a power alcohol mill at Sarina, south of Mackay, and there should be another in North Queensland, as well as one in the Bundaberg district, which is a large sugar-producing district in my electorate. Transport charges are a very important factor in the State of Queensland, where sugar is produced over a length of 2,000 miles at places along the coast 50, 100, and 200 miles apart. The Queensland Government, realizing that the power alcohol mixed with petrol produced a motor fuel of a high standard, even superior to ordinary petrol, encouraged the building of a distillery at Sarina as the first unit, nearly twenty years ago. That distillery started with a production of 100,000 gallons, and its estimated capacity, when the work now in hand is completed, is 2,000,000 gallons. The Queensland Government introduced a bill to encourage the ase of power alcohol. It had found that the garages were being discouraged by the big oil companies from selling it. Indeed, unless legislative action had been taken it would have been very difficult, if not impossible, to obtain a market for this product at all. The Commonwealth Government has been asked by the Queensland Government to promote the expansion of distilleries in other areas in that State. The Premier of Queensland, Mr. Forgan Smith, set out his reasons in the following statement : -

On the basis of normal conditions in Queensland, we should use 50,000,000 gallons of petrol. Taking la per cent, of that, it would give a use for power alcohol of 7,500,000 gallons, and on that basis there is ample room for additional distilleries, or at least for one more. That would produce a volume greater than anything, that we have in existence.

He stated further -

If the Commonwealth were to tell the Queensland Government, “we shall give you freedom of excise within your own State to produce as much power alcohol as you like for your own State “, then it would be a different proposition entirely. The Commonwealth has not given us that undertaking, and they do not appear to be willing to give it.

He also pointed out to representative sugar-growers that it was not wise to push the case for power alcohol beyond reasonable limits, because it might encourage the belief that the price of sugar might be reasonably reduced. Those of us who are familiar with the sugar industry know that the present price of sugar, taken in conjunction with the cost of production, leaves very little profit for the grower. The thousands of sugar-growers throughout Queensland are having a very lean time at present, particularly those in districts with the less favorable rainfall, such as Bundaberg.

Mr Beck:

– Who does make the profit out of sugar?

Mr FORDE:

– The growers and the workers in the industry certainly are not making much profit. An overwhelming majority of the mills are owned and controlled by the growers themselves - I think the number is 32 out of a total of 34. Two of the mills are owned by the Colonial Sugar Refining Company Limited, which also owns a refinery in Brisbane. The Miliquin company owns a refinery at Bundaberg. In addition to the refinery in Brisbane, the Colonial Sugar Refining Company Limited owns refineries in each of the capital cities, with the exception of Hobart. This company makes tremendous profits, but they are not made exclusively in Queensland. It is interested in the production of black-grown sugar in Fiji, which is supplied to New Zealand and Canada and, under a preferential tariff, to Great Britain. It would suit the Colonial Sugar Refining Company Limited if there were no Government control of the sugar industry, and it was able to flood the Australian market with black-grown sugar from the islands, where it can employ labour at about a shilling a day. I would not like honorable members to gain the impression that the high profits earned by the Colonial Sugar Refining Company Limited were an indication of the profits made Kv the growers and workers in the sugar industry.

Sir George Bell:

– What has this to do with the report?

Mr FORDE:

– The report deals fairly fully with the sugar industry, and discusses the profits made in it. I do not oppose the Government’s scheme; I support it, but say that it is belated. The Government should have made provision at least, two years ago for the establishment of distilleries in the wheat-growing States for the treatment of wheat, as well as in Queensland for the treatment of surplus molasses.

Mr BREEN:
Calare

.- I do not propose to criticize the Government for planning to produce power alcohol in various parts of the country, but I, like the honorable member for Capricornia (Mr. Forde), regret that action was not, taken earlier. The people in country districts feel the effects of petrol rationing more acutely than do those in the cities. Distances are greater in the country, and we have now gone beyond the stage of the pony and sulky. Some more rapid means of transportation is necessary, and the people in the country are thrown back upon the motor car. In the cities, transport services are supplied by trams, taxi-cabs, electric and steam trains, both suburban and near-suburban, but in the country there are only motor cars. Therefore, the rural dwellers look to the Government for relief from petrol rationing, both by obtaining increased petrol from overseas and by the production of power alcohol. In Appendix 11 of its report, the Power Alcohol. Committee discusses the merits of establishing power alcohol distilleries in metropolitan areas as against country districts.

It goes into the cost of bringing wheat from country districts to the city, and balances that against the advantages provided by better factories, more abundant labour and electric power and water supplies available in a city. I understand that comparatively large quantities of water are needed for distillation purposes, as well as a high load of electric power. These factors favour the country as a place for the production of power alcohol. The water shortage in Sydney is acute, and this is due, not so much to the di,ought on the catchment area, as to the increased consumption of water owing to the expansion of war industries. This expansion has also made heavy demands on electric power supplier Therefore, in regard to hath water and electric power, the- country offers advantages over the city for the production of power alcohol.

The Government has been criticized for concentrating the munitions industries in vulnerable coastal areas in the vicinity of the large cities, and this criticism is justified. Owing to the tremendous demands made upon it at the present time, the British navy cannot make ships available for the defence of Australia in the same measure as previously, so that we are open to sudden attack by ah enemy. Unfortunately, one potential enemy is a strong naval power, and it lies closer to us than any powerful British naval forces. For that reason, our war industries should, where possible, be placed outside the danger zone. Petrol is necessary for the defence of this country, and our position would be critical if our stores of petrol were destroyed and we were unable to obtain further supplies from overseas. I hope that this will not happen, but we must he prepared for it. The Government would be well advised to erect the distilleries at inland centres that are not exposed to attack by an enemy.

If cost were the only factor to be considered, production of power alcohol from wheat at a cost of approximately 2s. a gallon would be ruled out as uneconomic in comparison with the cost of synthetic fuel, such as petrol extracted from coal or shale, which is less than ls. a gallon. An added advantage of adopting one of the many processes of recovering oil from coal is to be found in the valuable byproducts, including benzol, an importation which is required in the manufacture of war materials. But cost is not the only important factor. The needs of the war are paramount, and Australia must utilize more of its natural resources than in peace-time, even though it may be uneconomical to do so.

Appendix 11 deals with problems associated with the transport of wheat from country areas to a central distillery situated on the coast. A comparison gives the total freight charges from country districts to Sydney as £8.66, whilst the cost of bringing wheat to produce 1,000 gallons of power alcohol from a country distillery to the metropolitan area for blending and distributing it is £11.32 a ton. Certain features of this report require elaboration. The cost of production of power alcohol from wheat, namely, 2s. a gallon, is calculated on the basis of 3s. 6d. a bushel for wheat f .o.r. at country sidings. Under the Wheat Industry Stabilization Scheme, however, the Commonwealth Government has not paid such a liberal price to farmers. They receive 3s. 10 1/2d. f.o.b. ports, which is substantially less than 3s. 6d. a bushel f.o.r. at country sidings. If the wheat-grower were guaranteed 3s. 6d. a bushel f.o.r. at country sidings, he would be much more satisfied with the stabilization scheme than he is at present. After all changes have been deducted from the price which the Commonwealth is paying, he will be fortunate if he receive? 2s. 6d. f.o.r. at country sidings. On the basis of 3s. 10£d. a bushel f.o.b., wheat could be provided at country sidings for 2s. 6d., which would considerably reduce the cost of power alcohol distilled in the country, as compared with the cost when the grain has to be transported to the metropolitan area.

Another important factor is the availability of transport. Bulk loading of. wheat by the railways is much more economical than carriage by road. But the very reason that compels the Commonwealth Government to undertake the production of power alcohol makes it impossible to provide the railway transport that would be required to haul to the city the quantity of wheat needed for the distillation of power alcohol. The needs of wa.r not only made it imperative that th«> Commonwealth Government should provide substitute fuels for the purpose of replacing supplies of petrol that we cannot now import, but also have removed from the road much of the transport which was previously available for the cartage of wheat. The needs of war also have absorbed much of the space that hitherto was available on the railways and on interstate shipping for the transport of wheat. .For those reasons, this report, so far as it assumes the availability of rail transport for the cartage of wheat to the metropolitan area, is based on wrong premises. Consequently, the final figure comparing the cost of production of power alcohol in the country with that in the metropolitan area must be discounted. The district which I represent produces one-third of the wheat grown in New South Wales, and climatic conditions in that part of the country make it ideally suitable for the storage of wheat in either silo or stack. The compilers of the report considered that wheat of low gluten content instead of wheat of high gluten quality should be used in the production of power alcohol. A suggestion was made that if the Government decided to select an inland site for the distillery, that site should be in the south-western- quarter of New South Wales, where wheat of low gluten content is grown. But that raises the question of whether wheat is available in the south-western quarter of New South Wales at all times and in all seasons, because the supply for the purpose under review must be consistent. Definitely, no wheat is available in that part of the State in a drought year. I suggest the selection of a site in the central-west of New South Wales, where supplies of water also are plentiful. This directs attention to the potentialities of the Lachlan River, which contains ample supplies in all seasons. As approximately 1,000,000 gallons of water a day is required for the purpose of power alcohol distillation, the Government should not overlook the claims of that area.

Another consideration that must be borne in mind in the selection of a site is that the distillery should be erected in a district which draws electricity from Burrinjuck, or ample supplies of coal from Lithgow. The report has thrown out of court all theories regarding the establishment of a number of small distilleries. If the Government has decided to erect one central distillery in New South Wales, the many facts that I have enumerated indicate the wisdom of selecting an area such as the central-west, where the greatest quantity of wheat is grown, where an ample supply will be available in all seasons, and where power is provided and water is plentiful. Any part of the central-west along the Lachlan or Macquarie Rivers would be suitable.

Engineers and experts who have advised the Government on this subject, and whose evidence was taken into account in the compilation of the report, discussed important chemical principles in connexion with the production of power alcohol from wheat. One of them is derived from a well-recognized principle in physics, namely, the latent heat of vaporization. Tests have proved that a blend of power alcohol and petrol reduces the efficiency of an internal combustion engine; but if power alcohol alone be used in conjunction with carbon monoxide from a producer-gas unit, the efficiency of an internal combustion engine is stepped up even beyond the rated horsepower of the- engine. As the intention of the Government is to use a blend of power alcohol and petrol, it may happen that as the result of further research a straight liquid anhydrous power alcohol will be used instead of a blend, thus providing a market for a much larger quantity of these fuels than is at present intended.

Sitting suspended from 6.15 to 8 p.m.

Mr BREEN:

– I wish to sum up the arguments in favour of my contention that in determining the site of a distillery for the production of power alcohol, the Government should consider both the economic position of the country areas where the wheat is produced and the fact that war industries are being concentrated in the metropolitan areas to the detriment of a proper balance throughout the country as a whole. I urge that the advice of these authorities who have been consulted by the Government as to the situation of distilleries, should be accepted. I understand that the New South Wales Government was consulted and recommended to the Commonwealth that priority be given to certain towns in that State which fulfilled requirements for the production of power alcohol, such as the availability of wheat, water and power &c. The New South Wales Government obtained its advice at great expense, and experts from the Department of Agriculture helped to compile the report which was presented to the Commonwealth Government. T urge that the report be accepted, and that the sites recommended bc adopted.

Appendix 10 of the committee’s report suggests that the residue of the wheat after distillation - cattle fodder - would have to be taken to receiving depots in metropolitan areas for final distribution.

I think that is a false assumption. In certain areas in the north-west and southwest of New South Wales there is always an immense market for cattle fodder, and there should be no need to transport that by-product to the metropolitan areas. In comparing the relative merits of distillery sites in country areas and the metropolitan areas, the report states that the freight charge on fodder would he £2.31 per 7,260 lb. of fodder., which would be the residue from the production of 1,000 gallons of power alcohol. That argument can be discarded altogether because that residue need not be taken to the metropolitan area. If it were, it would, only have to be taken back to the country to feed starving stock. The report also quotes a freight charge of £9.01 per 1,000 gallons for transporting the power alcohol to the metropolitan area for blending with petrol at central depots. The compilers of that report could not have been aware that petrol produced from shale is being blended at Glen Davis, within 100 miles of the centre of the wheat areas of the northwest of New South Wales. There are also these important sentences in the report : -

The alternative scheme would consist in transporting the wheat to a large central distillery., where the alcohol could be manufactured at lower cost.

If facilities for blending existed at country bulk depots, so that the alcohol need merely be denatured at the factory, then, a saving of £23.8 could be effected in daily freight charges.

When that saving is compared with the charge of £26 per diem for wheat .shipped from the country to the metropolitan area, its significance is apparent. The fact that petrol blending is already being done practically in the wheat belt, should convince the Government of the desirability of carrying out the recommendations of the New South Wales Government and having the distillation done in the country instead of in the metropolitan areas.

Mr SCULLY:
Gwydir

.- It seems to me that the Government is delaying this all-important project unnecessarily. Shortly after this report was submitted to the House some months ago, an announcement was made by the Minister for Supply and Development that distilleries would be constructed forthwith that would be capable of producing 3,000,000 gallons per annum ia each of the four major wheat-growing States of the Commonwealth, but, up to date, no finality has been reached. We are facing one of the most critical times in the history of Australia, and, in fact, in the history of the world, in regard to fuel problems. We see the country districts of Australia withering through lack of adequate transport; almost insurmountable difficulties are being met, yet, so far, this Government has done nothing at all, except talk and talk and talk,, as it usually does. It seems to take years to make up its mind on any matter. There is discontent throughout the length and breadth of Australia, particularly in New South Wales, because of the lack of action on the part of the Government in regard to this very important matter. Furthermore, it is questionable whether the recommendations submitted by the Power Alcohol Committee are in the best interests of poweralcohol production. The report of that committee states .that the best commodities for the production of power alcohol are sugar and wheat. In some parts of Australia the production of power alcohol from sugar is already in operation, but in regard” to this major commodity, wheat, progress is being seriously delayed. Except during great seasonal adversity, Australia invariably has a large carryover of wheat which could profitably be turned into power alcohol. The point I wish to impress on the Government is that the requirements which have been specified in relation to the establishment of these, large distilleries cannot be fulfilled by the majority of country towns throughout the Commonwealth. Only close to the already congested seaboard of Australia would all thoSe conditions be fulfilled. We have been informed by a reliable authority that a sewerage system sufficient for a population of 100,000 is required to dispose of the effluent from such a distillery, and apart from Sydney and Newcastle, there is no city in the whole- of New South Wales which has a sewerage system of that size. It seems that the unfortunate position caused by concentration of munitions industries in the coastal areas of Australia will be fur ther accentuated in this regard. Due to that policy of centralization country towns are being strangled ; many of them are already in their death throes. Unless we get a government which is determined to give effect to a policy of decentralization, or at least, will pay some attention to the plight of the country districts, Australia will take many years to recover from the position into which we are now drifting. Therefore, I commend to the Government the advisability of building distilleries of a smaller capacity than those which are now proposed, so thatcountry towns, particularly those in New South Wales, may benefit. It should be possible to work more expeditiously if three or four smaller distilleries were established in all wheat-growing States. That would obviate centralization and add greatly to the efficiency of dis tribution. In my electorate there are country towns which offer facilities for the distillation of power alcohol equal to those of any other part of the country. For example, Quirindi has one of the most up-to-date and cheapest electrical power systems of any country town. It has a coal mine close by and it is on the junction of four railways. It also has a never failing water supply and. above all in importance, a never failing supply of wheat. Fifty miles to the north-west, the town of Gunnedah has equal facilities, a coal mine with an inexhaustible supply of coal, and an uptodate electricity supply system. Both of those towns are. sewered. What I have said about Quirindi and Gunnedah applies equally to Narrabri, except that it has no coal mine. That deficiency, however, is compensated for by its close.11ess to the coal mine at Gunnedah.

Mr Archie Cameron:

– Which of those towns does the honorable gentleman recommend ?

Mr SCULLY:

– All or any one of them. They have equal; facilities. There are also towns in the central-western and southern parts of New South Wales which are admirably suited for the establishment of power alcohol distilleries. That is why I impress upon the Government the desirability of establishing small distilleries throughout the wheat-growing areas.. The Parliamentary Joint Committee on Rural

Industries, of which. I am a member, was told by one of the most competent authorities on the subject of power alcohol that small distilleries could be economically established. His views coincided with mine. I urge the Government to go ahead with the establishment of the power alcohol industry in States where it is not already in existence, and to expand the industry where it has already been established. If it will not adopt my suggestions, at any rate I ask it to do something to enable us to obtain supplies of substitute fuels which we must have. The Government will be recreant to its trust if it delays this all-important project which is essential not only to our war effort, but also to the national economy.

Mr RIORDAN:
Kennedy

.- lt. gives me great pleasure to have the opportunity to take part in a debate on a motion for the printing of the report furnished by the committee which was appointed to investigate the production of power alcohol in this country. I well remember that not so long ago I urged in this house the implementing of a policy similar to that which has been recommended by the Power Alcohol Committee, because it was vitally necessary to do what was being done on the other side of the world in the production of substitute fuels. The honorable member for Barker (Mr. Archie Cameron) interjected during the speech of the honorable member for Gwydir (Mr. Scully) that it had taken the honorable member a long time to wake up. I remind the honorable member for Barker that he was a prominent member of the Ministry when honorable members of the Opposition urged the Government to follow Europe’s example. He, with his colleagues, laughed, at the proposal. It was uneconomic, they said. Perhaps it was uneconomic in peace-time, but we could see the war clouds gathering on the other side of the world. Nothwithstanding the warning of the Munich Agreement, the Government did nothing. The point is that, although the Government of which the honorable member was so prominent a member did nothing, he will very shortly go out into his electorate and. pointing to the new power-alcohol industry, say, “ Look what our Government has done “.

Whatever time the honorable member for Gwydir may have taken to wake up is short in comparison with the time that the Government has taken to wake up. If the honorable member for Barker examines the report of the Power Alcohol Committee he will see that in 1937 - the latest year for which figures are available - Germany produced 38,000,000 imperial gallons of power alcohol from potatoes and molasses, France 42,000,000 gallons from sugar beets and molasses, England 5,600,000 gallons from molasses, Italy 10,000,000 gallons from sugar beets, molasses, grapes, &c, Austria 600,000 gallons, Hungary 2,900,000 gallons, and Czechoslovakia 14,000,000 gallons from agricultural products, and Sweden 4,200,000 gallons from sulphide liquors from wood pulp. In 1939 Brazil manufactured 11,000,000 gallons from molasses and raw sugar. The Philippine Islands produced 9,000,000 gallons from molasses in 1937. Australia, in 1939, produced 1,500,000 gallons. The contrasts in those figures show how long it has taken this Government to become aware of what was happening in other parts of the world. As the result of the Government’s slothfulness, Australian industry to-day is disorganized through lack of fuel. I protest, too, against the delay in the presentation of the Power Alcohol Commitee’s report to the House. The Government has had it sin.ee May last. The Government ought not to have taken five months to realize the importance of the committee’s recommendations.

I take this opportunity to lodge another protest in support of that made by the honorable member for Gwydir. I protest against the policy which has bled the rural districts of labour to such a degree that many rural industries have been forced to close down. That policy shows the lack of co-ordination in the so-called war effort of the Government. The power-alcohol industry would do much to decentralize population with resultant benefit to country towns. The Power Alcohol Committee has recommended the establishment of power-alcohol distilleries, but their location has been left to the Government. All that the Government has done after five months of deliberation is to announce that it intends to establish in New South Wales, Victoria, South Australia and Western Australia a distillery with a capacity of 3,000,000 gallons per annum, representing a total production of 12,000,000 gallons. That is as far as the Government has gone notwithstanding the precarious state Australia is in, owing to the fact that its fuel stocks are ait a dangerously low level. I understand that the sites of those four distilleries have not yet even been selected. If that be any criterion of the Government’s war effort, the people outside will have no difficulty in forming their own conclusions as to the shortcomings of that effort. We want action, not words; we have had too many words and too little action in the past. We on this side of the House who represent country constituencies know that the power-alcohol industry will assist primary producers, because it is mainly from farm-grown products that power alcohol for blending with imported petrol can be produced. The production of power alcohol will make available to the primary producers money that they badly need and to the Commonwealth itself new revenue, for every gallon of power alcohol produced means that one less gallon of petrol has to be imported.

My information is that the Government has also suggested, but only suggested, the erection of a number of small distilleries along the Murray River to produce 5,000,000 gallons of power alcohol a year. Fortunately, this Government will soon make way for another government which will not waste time in suggesting things, but will actually do things. Any other government but this would have heeded the warnings of the times and followed the example of countries abroad, even if only for the purpose of assisting primary producers. Germany’s original intention in establishing the power-alcohol industry was to assist its primary producers, particularly the growers of beet and potatoes. How well advised that policy was has been proved by the fact that the German power-alcohol industry is playing a vital part in Germany’s war effort. Things would have been different in Australia had this Government been wise enough to follow that lead. It is useless, particularly at a time like the present, to discuss the costs or economics of the power-alcohol industry. We are not concerned about costs; our concern is the production of a fuel suitable for use in internal combustion engines. The term “ power alcohol “ has been used a lot in this debate. Power alcohol is ethyl alcohol denatured in order to render it undrinkable. The land produces the raw material needed for its distillation, ain( all parts of Australia, with the exception of Tasmania, grow products from which power alcohol can be produced. The diversity of those products warrants the Government in establishing distilleries all over the country.

Other speakers have dealt with the production of power alcohol from wheat. I shall deal with the production of power alcohol from sugar cane. Sugar cane is grown in New South Wales and Queensland, and for a number of years the power-alcohol industry has been operating in Queensland in association with the sugar industry. The first distillery was established at Sarina. Subsequently its capacity was increased until to-day, I understand, it produces about 4,000,000 gallons a year. The Colonial Sugar Refining Company Limited, to which frequent reference is made in this Parliament, seeing what was happening on the other side of the world, some years ago established distilleries at Pyrmont, in Sydney, and Yarraville, in Melbourne. It made investigations in the sugar beltin order to ascertain whether it could get the necessary raw material. That company is one of the biggest producers of power alcohol in the Commonwealth. I have been given to understand that since the outbreak of war the oil companies desired to obtain power alcohol to enable them to increase the octane rating of their second-grade petrol so that the recognized standard quality might, be attained. The oil companies were prepared to take what they could from Australia, but they would not build a distillery in .the sugar-growing districts of Queensland, although a distillery costing £55,000 could produce 1,000,000 gallons of power alcohol per annum. Yet we are told that the present petrol position in Australia cannot be improved owing to the shortage of tankers.

I notice in the report of the committee that from the by-products of the sugar industry 7,500,000 gallons, of power alcohol could be produced annually,, but the committee makes no recommendation as to how much wheat and how much sugar should be used by the distilleries. One possible distribution that has been mentioned is 38,000,000 gallons of power alcohol from wheat and 7,500,000 gallons from sugar. It appears that the three distilleries now established at Sarina, Pyrmont and Yarraville would have to be kept in operation 168 hours a week the whole year round in order to produce about 7,000,000 gallons of power alcohol annually. I urge the Government to give serious consideration to the erection of another distillery in Queensland, which now has only one distillery and that has been, established by private enterprise. Queensland has taken a leading part with regard to the production of power alcohol, and should receive every possible encouragement. Even if 10,000,000 gallons per annum were produced’ in Queensland from sugar, that quantity could- be absorbed in that State under peace-time conditions, because it could be mixed with all petrol sold.

In order to encourage the sugar industry, the Queensland Parliament passed an act compelling the oil companies to add a certain percentage of power alcohol to all petrol sold in Queensland, but the companies contested the legislation, which was held to be- ultra vires section 92 of the Commonwealth Constitution. An agreement was subsequently entered, into between the Government of Queensland and the oil companies under which the companies were to take the whole of the power alcohol1 produced in that State. Seeing that petrol is essential, not only for the carrying on of the war industries, but also to provide settlers in many country areas with means of transport, and to keep the wheels of industry turning, there need be no doubt that when the war is over there will be no difficulty in absorbing, in Queensland, the whole of the power alcohol produced in that State. I have seen no announcement, by the Government of steps to he taken to provide for the financial security of the primary producers who supply raw materials to the distilleries. After the war, petrol may again he plentiful, and it is necessary to know what will then happen to the distilleries and to the primary producers, such as the wheat growers in Western Australia and South Australia, who will supply the raw materials from which power alcohol is to bc made. This afternoon,, the honorable member for Gippsland (Mr. Paterson) asked the Deputy Leader of the Opposition (Mr. Forde) what proportion of the molasses obtained from sugar cane was going to waste. I draw the attention of the honorable member to paragraph 58 of the report. which states -

The total molasses production in Australia is about 130,000 to 140,000 tons per annum, depending on the size of the sugar crop ; this would be sufficient to produce. 7,500,000 to 8,000,000 gallons of alcohol. Molasses is, however, required for a number of other important purposes, viz., a large quantity is needed for the production of methylated spirits, an essential in many secondary industries; a further large quantity is consumed in the -manufacture of acetone, an essential in munitions production ; a relatively small quantity is converted to rum; various quantities arc, used as fertilizer in cane-growing, for cattle feeding and for fuel in sugar mills. Although some hundreds of thousand’s of gallons were formerly wasted, practically all molasses is now conserved for some useful purpose.

I again urge the Government to take action, in conjunction with the Queensland Government, and perhaps also the sugar industry, to establish an additional distillery in Queensland,, or small distilleries as adjuncts to the existing, sugar mills.

Mr McLEOD:
Wannon

.- I am beginning to doubt whether the Government is sincere in this matter, and intends to implement the recommendations of the committee. Months have elapsed since the report was tabled’, and everybody now knows that the petrol position throughout Australia, particularly in the country areas,, is very serious. A good deal of space is occupied in the report in discussing the economics of the petrol position and of power alcohol production, and. the cost to the user of power alcohol produced in the. country as compared with the coat in a metropolitan area is worked out to a fraction of a penny ; but, as it would be necessary to transport the wheat to the cities if distilleries were erected there, I claim that power alcohol could be produced as cheaply in the country as anywhere. We should take a broad national view of the matter, and have in mind the need for a policy of decentralization, particularly in view of the fact that the farmers in the wheat areas are suffering great privations. I fail to see any disadvantage in establishing a distillery in a country centre, as compared with adopting a site in a metropolitan area. It is not difficult to recognize the hand of vested interests in connexion with this project. Those interests do not wish to see the distilleries established in country districts, but I consider that it will be necessary to erect them in areas where the essential raw commodities are produced. Belief is being sought for settlers in rural areas, and it would be obviously against the interests of the nation to build the distilleries away from those areas.

Considering the subject from another aspect, I desire to know under whose control the .distilleries will be after they have commenced operation. Will they be controlled by the Government or by private enterprise? We know that the Government is to find the money necessary for their erection, and one naturally wonders whether they will then be handed over to private enterprise.

Mr BAKER:
Maranoa

.- At first sight the report of the committee appears to be comprehensive, but, on close analysis, certain serious defects are noted There seems to be no provision for the distillation of power alcohol in Queensland from wheat. Queensland has become an important wheat-growing State, and the industry would become more important but for the unfortunate restrictions on wheat production. I should like to believe that this omission is due to a printer’s error, and that it will be rectified. One of the most important commodities in Australia to-day is petrol; lacking an adequate supply of it, we need some other form of liquid fuel. Day after day we hear complaints from people who need more petrol in order to operate their motor vehicles, agricultural implements, milking machines and other units. Petrol is required, not only for our war effort, but also for our primary industries and transport services. We are entitled to ask what this Government and its predecessors have been doing during the last five years. They saw the war clouds gathering, but they went to sleep on their job. It seems that Rip Van Winkle left many descendants, and most of them must be sitting on the other side of the House. Almost two years of the most intense warfare in history elapsed before the Government woke up and began to talk of establishing distilleries for the production of power alcohol. ‘The Queensland Government was wide awake, and it established a power alcohol distillery at Sarina, about 20 miles from Mackay.

Mr Calwell:

– But that is a Labour government.

Mr BAKER:

– The job would not have been done otherwise. The Report of the Power Alcohol Committee of Inquiry states: -

The present position of the wheat industry is described by the Commonwealth Department of Commerce under date of 10th September, 1940, as follows: - ‘

About one third of the normal wheat crop of 170,000,000 bushels is consumed in Australia and two-thirds is exported. Australian consumption is estimated at 55,000,000 bushels a year. Of this total 32,000,000 bushels are used for human consumption, 15,000,000 bushels for seed and 8,000,000 bushels for animal feeding.

With normal seasonal conditions, the 1941-42 crop can be expected to amount to approximately 100,000,000 ‘bushels, of which approximately 105,000,000 bushels will be for export.

The difficulty will be to transport that quantity overseas. The report states later : -

The yield of alcohol from wheat, with starch content oi 05 ,per cent., varies from 2.3 to 2.5 gallons per bushel of GO lb., for the malt and amylo processes respectively. Although the amylo process seems more attractive, more is known in Australia about malting; by this process 1;000,000 gallons of alcohol “would absorb 435,000 bushels of wheat.

I hope that these proposed distilleries will not be built in the large cities near our coastline. For strategic reasons, if for no other consideration, we should encourage decentralization of industry, because our coastal towns and cities from Thursday Island to Melbourne could be laid in ruins without difficulty by enemy ships. Industries, of this important character particularly, should be far removed from the coast. One of the secrets of Russia’s success is that its great industries are not concentrated near its western border, close to Germany. In fact, many of its large industrial establishments are located to the east of the Ural Mountains. Another strong reason why distilleries should be established in rural districts is that such a policy would check the drift of population from the country to our big cities. This has always been a serious problem, and it has been aggravated by war-time conditions. We shall be faced with many problems when the war is over, and the restoration of our rural populations will not be the least of them. I hope that a power alcohol distillery will be established in the wheatgrowing area of Queensland at a reasonable distance from the coast. I point out that wheat production in Queensland over the last two years has averaged 18 bushels, or slightly more, to the acre. I do not believe that this has been equalled in any other State. A distillery could be established profitably at Dalby, Pittsworth, Millmerran or Cecil Plains, all of which are in good wheat-growing districts. I hope that the members of the Government will awake from their long sleep and get down to business. They should throw off the mantle of Rip Van Winkle, which has been upon them now for twenty years, and get to work and help to win the war.

Mr PATERSON:
Gippsland

– I have read the report of the Power Alcohol Committee of Inquiry, which recommends the production of 40,500,000 gallons of anhydrous alcohol per annum, chiefly from wheat, at a wholesale cost of about 2s. a gallon. It is signed by seven gentlemen. Two of them make some dissent from the principal report in a. later reservation, and one of these two makes a further reservation on his own account. Three of them have appended their signatures to a section dissenting from a claim made in the major report regarding what is called the “ additive value “ of alcohol, or its power to improve the grade of any petrol to which it is added. Finally one member of the committee has made an additional recommendation. I do not believe that I have ever seen a report in which there was such a consistent lack of unanimity as there is in this report. However, I am not surprised at this, in view of the outstanding difficulties involved in the problem, particularly from an economic point of view. I have tried very hard to find reasons for supporting the main recommendation of the committee, but I can find only one - admittedly it is a very important one - and that is the fact that we are at war. It is a consideration which over-rules all others in a matter of this kind. If the war should continue for another three or four years - and I pray to God that it may not do so - we may derive some benefit from the erection of power alcohol distilleries. We are told in the report that about two years will be required to establish distilleries and put them into operation.

We have heard various opinions expressed in this debate. Apparently some honorable members consider that the production of alcohol from wheat can be continued successfully after the war. I do not share that view. The proposition would be hopelessly unsound; I cannot believe that the industry can have any permanent place in our economic structure. Its establishment in war-time may be justifiable, because any expenditure in the interests of national safety in wartime is justifiable. But, in considering the problem from an economic point of view, we learn that the normal landed cost of imported petrol, free of duty, is 5d. a gallon. I understand that the approximate cost of producing petrol from Australian shale is about lOd. a gallon, or double the normal landed cost. We have also been given some interesting figures relating to the production of petrol from coal, in a very painstaking report, which was prepared by the Standing Committee on Liquid Fuels and tabled in Parliament not many months before the outbreak of war. The cost of petrol produced from black coal was estimated, to be 15d. per gallon, and that of petrol produced from brown coal 36d. per gallon, or three times the normal cost of imported petrol. These figures take into consideration the amortization of the necessary machinery.

Mr Scully:

– Do they take into account the value of the by-products?

Mr PATERSON:

– They take everything into consideration. I am endeavouring to help honorable members to see this problem in its proper economic perspective by contrasting the costs mentioned in the report of the Power Alcohol Committee of Inquiry with those mentioned in the report of the Standing Committee on Liquid Fuels. I cannot quote infallibly from memory, but my references to the latter report are substantially accurate. The Standing Committee on Liquid Fuels stated that the cost of the plant necessary to produce 42,000,000 gallons of petrol per annum from black or brown coal would be about £12,000,000.

Mr McLeod:

– That money would be expended in Australia?

Mr PATERSON:

– No. According to the committee, a great deal of it would have had to be expended in Germany, and that is not possible to-day. It stated that the only country in the world which was producing petrol from black and brown coal on a big commercial scale was Germany.

Mr Scully:

– Great Britain also is producing petrol from coal.

Mr PATERSON:

– But the amount produced is insignificant in proportion to the country’s requirements. It is a thousand pities that the Government did not carry out the Liquid Fuel Committee’s recommendation that, in view of the fact that the shadow of war was hanging over us, the money which would be required for the erection of plant to produce from coal one-eighth of our annual requirement of petrol or 42,000,000 gallons, should be expended on the purchase of one year’s supply of petrol, and the provision of storage for it. That sum of £12,000,000 would have bought 360,000,000 gallons of petrol, the quantity which this country uses annually, and would have provided storage accommodation for it. Unfortunately, that report was presented only a little while before the war began, and, presumably, the Government was unable to implement its recommendations. It is a thousand pities that they were not implemented when tankers were available. I repeat that 5d. a gallon was the normal landed cost of petrol, without duty, when the report to which I have referred was presented; the price to-day is about 91/2d. a gallon. The approximate cost of producing petrol from Australian shale is l0d. a gallon, and l5d. a gallon is the estimated cost of producing petrol from black coal. The cost of producing anhydrous alcohol from wheat at 3s. 6d. a bushel f.o.r. shipping ports is about 2s. a gallon, or approximately five times the normal landed cost, duty free, of imported petrol. In passing, I mention that the honorable member for Calare (Mr. Breen) mentioned the price of wheat for alcohol manufacture, proposed in the report, as being 3s. 6d. a bushel at country railway stations, but the report expressly mentions that that price is for wheat f.o.r. shipping ports. That means that the farmer would probably receive under 3s. abushel for the wheat which wouldbe converted into alcohol.

Mr Breen:

– He is not getting that price for wheat to-day.

Mr PATERSON:

– To those who appear to believe that this industry will have some future after the war I say that I do not share their optimism. I believe that the cost of providing these distilleries will have to be written off immediately after the war. It would be better to use our black coal, or our brown coal, to produce petrol at1s. 3d. or1s. 4d. a gallon, than to grow wheat from which to produce power alcohol at 2s. a gallon. After the war, we must regard this proposal from the economic point of view; and if we do so, we shall see that it is unsound. The only justification for the proposal is that the country is at war. In my opinion, we must make up our minds that we shall have to write off the cost after the war. Probably after the war is over, there will be a tremendous demand for wheat to feed the starving people of Europe. The price may well go up to 5s. a bushel. That is not a high price to visualize in such circumstances. But supposing that the price does not go beyond 5s. a bushel, are we to understand that the wheat-growers of this country will be prepared to provide the amount of wheat necessary to keep these distilleries going and will be content with 3s. 6d. a bushel f.o.r. ports for it? Further, are we to understand that the State governments will be prepared to take action to acquire wheat for conversion into power alcohol at that price in order to keep the distilleries going ? It must be remembered that after the war the Commonwealth Government will not have the powers which it now exercises. These are things that we must consider carefully before we pass legislation to implement the recommendations of the committee. The only raw material in Australia from which power alcohol could be obtained on anything like an economic basis is molasses. I do not know of any other raw material which could be produced at a price which would make the growing of it for the production of alcohol worth while. I say that as one who is most anxious to do everything that is humanly possible to solve the problems of primary production. I represent a primary producing area.

Mr Breen:

– No wheat is grown in the honorable member’s electorate.

Mr PATERSON:

– That is not correct. Some wheat, although not a great quantity, is produced there. But even if wheat were grown in large quantities in my electorate I would still express the same opinion. I would still endeavour to convince the wheat-growers of Australia that they could not reasonably count on this industry being continued as an economic proposition after the war. I would not seek to delude them with false hopes. In saying that, I do not suggest that other honorable members are seeking to delude them. I am prepared to support this proposal only as a war measure. I do not believe that it can possibly be continued after the war. If, after the war, we are to do anything to supply our own liquid fuel needs, we should do better from an economic point of view to increase our production of petrol from shale, or even to extract petrol from black or brown coal, rather than continue the hopelessly uneconomic process of producing alcohol from wheat. I cannot help contrasting the proposal to spend millions of pounds on this scheme with the decision of the Government to lend £33,000 to assist in the production of flow oil at Lakes Entrance in Gippsland, and then only on very strict terms as to the repayment of the money.

Mr BREEN:

– What will it cost to obtain flow oil at Lakes Entrance?

Mr PATERSON:

– The cost will be infinitely less than the amount that will be involved in the proposals recommended by the Power Alcohol Committee. Crude oil obtained in Gippsland has been sold at about 6d. a gallon. 1 mention this subject only by way of contrast, because I realize that, at the moment, we are not dealing with the production of flow oil at Lakes Entrance. The Government, which is prepared to contemplate the spending of millions of pounds on the production of power alcohol from wheat at a cost of 2s. a gallon, might very well give a second thought to what I regard as the harsh terms that it has imposed in respect of early repayment of the modest sum of money which it is providing for the production of flow oil in Gippsland.

Mr MORGAN:
Reid

.- Like the honorable member for Wannon (Mr. McLeod), I doubt the Government’s sincerity in regard to effecting a permanent solution of the problem of power alcohol. The honorable member for Gippsland (Mr. Paterson) has let the cat out of the bag. The facts that the report of the committee recommends the centralization of operations in the capital cities, and also that its control will be in the hands of vested interests, indicate that the same policy is to be adopted in connexion with this project as has been adopted in connexion with the Newnes oil shale deposits. If that be so, the proposal before us has no permanency, and the prophecy of the honor able member for Gippsland will come true. We have only to recall what has happened at Newnes to visualize what will happen in connexion with these proposals. The Government was induced to provide £600,000 in connexion with the Newnes project, the output of which was estimated at 10,000,000 gallons per annum. The Minister in charge of the undertaking admits that the actual output is not more than at the rate of 3,500,000 gallons a year, and I am credibly informed that the actual production is not greater than 1,000,000 gallons per annum.

Mr Spender:

– The honorable gentleman’s information is most unreliable.

Mr MORGAN:

– The chairman of the committee which investigated the proposal says that the Newnes deposits could produce 30,000,000 gallons of petrol per annum. After the Government was induced to put money into the Newnes project, the control was handed over to certain private interests, and the Government did not have an independent director on the board of control. I believe that that is the position to-day, notwithstanding that the Government provided two-thirds of the original capital, and since then another £400,000, making a total of about £1,000,000. The additional £400,000 was provided without the authority of the Parliament. When I raised this matter recently I pointed out that there was not even a formal agreement to protect the Government and the people whom it represents. The control of Newnes was handed over to Mr. Bailey, a representative of the Vacuum Oil Company Proprietary Limited.

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

– Order! The House is discussing the report of the committee which investigated the production of power alcohol, and the honorable member must confine his remarks to that subject.

Mr MORGAN:

– I am discussing the method by which this undertaking is to be carried out, and I submit, Mr. Speaker, that I am entitled to deal with the history of a similar concern.

Mr SPEAKER:

– The honorable member may make a brief reference to any similar concern, but he may not go into details concerning it.

Mr MORGAN:

– The question of control is important, because millions of pounds will be involved. The management of the Newnes project -

Mr SPEAKER:

– The honorable member may not discuss Newnes in detail.

Mr MORGAN:

– The history of Newnes is not palatable to the Government. For strategic reasons the production of liquid fuel should be carried out in inland regions rather than in the capital cities. If the Government is to expend large sums of money and take certain risks in connexion with this project, the control should be in the hands of independent men who represent the taxpayers of this country.

Mr MARTENS:
Herbert

.- I represent in this House that portion of Queensland in which Sarina is situated, and I say without hesitation that much better results would have been obtained from that enterprise if the major oil companies had not interfered. Originally, the spirit obtained from molasses was- marketed as power alcohol, but now it is offered as “ Shellcol “ and “ Plumecol “. The industry has been strangled by the major oil companies, including the Commonwealth Oil Refineries. Some of the producers of molasses regard the power alcohol industry as a menace, and will not supply molasses to any distillery. Dealing briefly with the matter referred to by the honorable member for Gippsland, I point out that there are many shale deposits in this country. In my own electorate there is an area which has enormous possibilities. Certain interests have taken up about 500 acres in this locality, in which it is estimated that the shale is at least 150 feet deep. The shale will not need to be mined. It can be quarried. Consequently the proposition there is very different from that at Newnes. Although the oil content of the shale is admittedly not so high as that of the Newnes shale, this factor is more than counterbalanced, in my view, by the relative ease with which the shale can be obtained. I am not particularly wedded to the power alcohol proposition, and I have said so in my electorate and over the air. I do not wish to boost any particular source of supply. My contention is that the Government should do its very utmost to exploit all probable sources of supply of liquid fuel. Our people heed this fuel in order to maintain their daily activities, and I do not care from where it is obtained so long as it is obtained. I shall not offer any objection to the obtaining of liquid fuel from coal, shale, or any other source. Our great business should be to get the fuel. I am not greatly swayed, either, by the economic argument. If we had allowed ourselves to be governed by economic considerations alone we should never have had a sugar industry in Australia. If we ‘had permitted ourselves to be frightened by what has been called the “Paterson curse” in the dairying industry, we should not be producing nearly so much butter as we are now producing. Personally, I am happy that our present production has been made possible. These two industries are of real value to Australia, and we can develop other industries which will be equally valuable if we refuse to allow ourselves to be scared by the economic argument. Our people need liquid fuel for their machinery, and we must provide it for them if they are to get on with their job. I do not agree with the statement that an expenditure of £12,000,000 would have been involved in establishing an industry in Australia to produce oil from coal. On a previous occasion in this House, I referred to figures cited by Captain Cruickshank in the British House of Commons in connexion with the Billingham-on-Tees enterprise. He said that the plant there had cost less than £5,000,000. If we were to add 50 per cent, to that the cost of a similar plant in Australia would be only £7,500,000 and not £12,000,000. If we had set to work seriously on the project when it was first brought to notice, we should not now be worrying ourselves about the production of power alcohol from surplus products. We should have an established industry of enormous value to the country which would have made us more or less independent of outside interests. The German nation is not concerning itself, in these days, about economic considerations. Enormous quantities of fuel oil are being produced from coal in Germany, and there is no reason why similar quantities should not be produced in this country. Let us not continue to flog the dead horse of economic stability. Bather let us get on with the job. I regret that certain interests which have been >willing to go ahead with the production of fuel oil have been debarred from doing so, not by the Government, hut by such organizations as the major oil companies. I have in mind a small company which was promoted at Sarina to produce liquid fuel. It was prevented from operating in any effective way by the activities of the major oil companies.

Mr SPENDER:
Minister for the Army · Warringah · UAP

– in reply - Two main complaints have been made against the Government in the course of this debate. It has been said, first, that the Government has been guilty of inordinate delay in dealing with the recommendations of the Power Alcohol Committee, and secondly, that it has not gone far enough in the implementation of them. An objective consideration of the dates in respect of this matter is sufficient to dispose of the first complaint. The report of the committee is dated the 17th May, 1941. After it was received, it was referred to the Standing Committee on Liquid Fuels. I do not think that any one who has any idea of the complexities of this subject, and of the many factors which require consideration, would suggest that it was unreasonable or unwise to refer the report to the Standing Committee on Liquid Fuels, more particularly having regard to certain dissentient views raised in the report. By the 25th June, which was a little more than a month after the receipt of the report, the Government had announced its policy. In such circumstances, it is unreasonable to say that there has been undue delay. When Senator McBride tabled the report in the Senate on the 25th June last, he said that it had received the full consideration of the Government. He added that the Government in considering the recommendations of the committee, had to bear in mind three factors: first, the necessity to develop the production in Australia of substitutes for imported petroleum to the limit of plant and manpower available ; secondly, the desirability of maintaining a balanced development as between the various classes of substitutes, including, as well as power alcohol, shale spirit, benzole and producer gas; and, thirdly, the limitation imposed upon expansion by the munitions programme. Bearing all these factors in mind, the Government decided, as a first objective, to aim at a production of 22,000,000 gallons of power alcohol made up as follows: - 7,000,000 gallons from existing anhydrous distilleries, 5,000,000 gallons from existing rectifying spirit distilleries, and 10,000,000 gallons from new distilleries to be erected. The last-named figure has now been increased to 12,000,000 gallons. In all these circumstances, I say that the Government has dealt with this subject with remarkable despatch.

The Government lost no time in discussing with the State governments the whole subject of the establishment of new distilleries. It asked the State governments to indicate where they considered distilleries could best be established, bearing in mind the considerations mentioned in the report. I have been informed by Senator McBride that the last of the replies from the States has only just come to hand. It must be obvious that in these circumstances the Commonwealth Government cannot be blamed for any delay that has occurred in this respect.

Mr Scully:

– When were the States approached ?

Mr SPENDER:

– I cannot state the date.

Dr Evatt:

– Have any sites been actually chosen?

Mr SPENDER:

– . Sites have only been chosen tentatively. Final action could not be taken until all the recommendations from the States had come to hand. Sites will have to be determined in accordance with the conditions laid down in the report. The discussions have been carried on in close consultation with the army authorities so that strategic factors may be given prime consideration. I say, therefore, that the Government has acted with despatch, and also with courage and boldness. It must be remembered that we are dealing with a proposal to use surplus primary products which cannot be marketed overseas. It is stated in paragraph 289 of the committee’s report that the erection of distilleries for the use of sugar will take from twelve to eighteen months and of distilleries for the use of wheat, from eighteen months to two years. Having regard to this factor, I submit that the Government should be commended and not criticized for the action it has taken. As I have already indicated, it is now proposed to produce 12,000,000 gallons of power alcohol from wheat. The wheat distilleries will be located as follows : -

The total production of power alcohol from sugar and wheat will be located as follows . -

As to whether the distilleries will be under government control, I assure honorable members that Ministers are fully aware of the criticisms which have been directed to this subject-matter. At least some members of the Government hold certain views on this subject, and honorable gentlemen may rest assured that the recommendations of the committee, which are definitely that the expenditure should be under the control of the Commonwealth Government, or the Commonwealth and State Governments, will be carefully borne in mind.

Mr Pollard:

– Is the Minister prepared to reveal the order of preference of the States?

Mr SPENDER:

– I am not able to do so at the moment. If I can give those details during the week I shall do so. Taking into account all the factors of the situation, including the economic circumstances in which we now find ourselves, and those in which we may find ourselves after the war, as referred to by the honorable member for Gippsland, I am of the opinion that the Government has taken a courageous stand in that it has not confined itself to economic considerations. We are well aware that because of what is now being done, we may find ourselves called upon to face definite liabilities when the war ends.

Question resolved in the affirmative.

page 330

PAPERS

The following papers were presented : -

Munitions Production in Australia - Extracts from confidential Report by members of British Ministry of Supply during visit to Australia, January, 1941, and Summary of Conclusionsof Sir Alexander Roger.

Ordered to be printed.

Commonwealth Grants Commission Act - Report of the Commonwealth Grants Commission on applications made by the States of South Australia, Western Australia and Tasmania for Financial Assistance in 1941-42 from the Commonwealth under section 96 of the Constitution.

Land Tax Assessment Act - Applications for relief dealt with during the year 1940-41.

Customs Act - Proclamation (dated 12th September, 1941 ) prohibiting the Exportation (except under certain conditions) of -

Drugs and Chemicals, viz.: - Ether, sulphuric; Sulphanilamide; Sulphapyridine; Sulphathiazole.

Miscellaneous: - Aluminium paint; Charcoal; Cotton thread and yarn; Films, used motion picture and other used photographic; Horsehair; Hose, rubber and woven canvas; Paints, lacquers, enamels, varnishes, thinners, containing any of the following: - Acetone, butyl acetate, ethyl acetate, nitrocellulose; Rubber tyres and tubes; Sisalkraft board.

Defence Act - Regulations - Statutory Rules 1941, Nos. 216, 218.

Lands Acquisition Act - Land acquired -

For Defence purposes -

Ballarat East, Victoria.

Bankstown, New South Wales.

Coff’s Harbour, New South Wales.

Werribee (near), Victoria.

For Department of Health purposes - Darwin, Northern Territory.

For Postal purposes - Gympie, Queensland.

National Security Act -

National Security (General) Regulations - By-laws - Controlled area.

Orders -

Control of lights and traffic.

Prohibited places (2).

Prohibiting work on land.

Protected area.

Taking possession of land, &c. (93).

Use of land (17).

National Security (Housing of War Workers ) Regulations - Orders - Prescribed area (2).

National Security (Statistics) Regulations - Order - Collection of statistics.

Regulations - Statutory Rules 1941, Nos. 207, 208, 209, 210, 212, 213, 214.

Naval Defence Act - Regulations - Statutory Rules, Nos. 215, 217.

Peace Officers Act - Regulations - Statutory Rules 1941, No. 204.

Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinances - 1941 -

No. 8 - Juries.

No. 9 - Police Superannuation.

House adjourned at 9.27 p.m.

page 330

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Depabtment of Information : Australian Establishment in New York ; Loan Publicity ; Advertising Costs; Expenditure.

Mir. Calwell asked the Minister representing the Minister for Information, upon notice -

Mr McLeod:

asked the Minister representing the Minister for Information, upon notice -

  1. What was the amount of the commission paid to advertising agents in connexion with the last two public loans?
  2. Who were the advertising agents who handled the publicity work in connexion with such loans?
  3. How much was spent by his department in the past six months in newspaper advertising contracted for in the six capital cities of Australia?
  4. How much waa similarly spent in contracts for (a) country daily newspapers and (6) country newspapers published other than daily?
  5. Will he favorably consider spending much less in advertising in metropolitan dailies and more in. country newspapers?
Mr Calwell:

asked the Minister representing the Minister for Information, upon notice -

  1. What was the total expenditure by his department in the last financial year?
  2. How much of such expenditure was incurred in respect of (a) salaries; (6) newspaper advertising; (o) poster advertising; (d ) radio advertising; (e) movie picture screen advertising; (/) general?
Mr Calwell:

asked the Minister representing the Minister for the Interior, upon notice -

  1. Is it a fact that except for a few men engaged on munitions annexes, Government hospitals, and other war jobs, senior architects in Melbourne are virtually unemployed?
  2. Is it a fact that architectural firms that have been handling big orders every year are disbanding?
  3. Is it a fact that such disintegration may have serious results on defence works and postwar reconstruction?
  4. Is it a fact that if the system obtaining in Adelaide were adopted in Melbourne much legitimate cause for complaint would disappear ?
Mr Langtry:
RIVERINA, NEW SOUTH WALES

asked the Minister for

Air, upon notice -

  1. Is it intended to reconsider the establishment of an air school at Corowa?
  2. Why was Benalla chosen as an air school in preference to Corowa, seeing that both towns are in the Southern Command?
  3. What amount of money has been spent so far on the Benalla air school, and what will the total cost be?
  4. What would it have cost to establish an air school at the Corowa aerodrome, which is at present being used for landing purposes for Narrandera and Corowa services, and has electric light, water, &c?
Mr McCall:

asked the Minister for Air, upon notice - 1.In view of the published statements made by Senator Arthur regarding the attitude of the Commanding Officer of the Air Force Station at Richmond, what action, if any, does the Government propose to take?

  1. What steps is an officer of the Air Force entitled to take to defend himself against charges made by persons in public?
Mr Wilson:

asked the Prime Minister, upon notice -

In view of the tremendous additions to the national debt due to methods of finance followed by the Commonwealth to meet war expenditure and other purposes, and the need for avoiding methods likely to lead to after-war depression and instability, will the Government appoint a royal commission, the personnel of which shall be approved by Parliament, to inquire into and report to Parliament on all essential phases of banking and currency practices, with a view to recommending the adoption of such alterations to the present system as will meet the needs of the nation in war and peace and prevent unnecessary debt and taxation?

Capital Issues Advisory Board

Mr Morgan:

n asked the Treasurer, upon notice -

  1. Who comprise the Capital Issues Board?
  2. Is any member thereof associated, as director or shareholder, with any financial institution ?
  3. Is a member of the Board bound to disclose any interests he may have, direct or indirect, in any concern making application to the Board?
  4. If so, what interests have been disclosed by any member of the Board?
Mr Fadden:
CP

– The membership of the Capital Issues Advisory Board is as follows. - Sir Claude Beading (chairman), Sir Ernest Fisk, Sir Walter MassyGreene, Sir Harry Lawson, Mr. E. C. Erwin, Mr. J. H. Gosse, Mr. J. M. Hardie, Mr. J. McCann, Mr. C. A. Norris, and Mr. F. Wilson. Several of these gentlemen are associated with different financial institutions, but each of them has always refrained from tendering any advice to me upon a matter in which he is in any way interested.

Commonwealth Aircraft Corporation Limited: Lidcombe Factory

Mr Morgan:

n asked the Minister representing the Minister for Aircraft Production, upon notice -

  1. Has any agreement been completed between the Government and the Commonwealth Aircraft Corporation Limited in regard to the management of the acro-engine factory at Lidcombe ?
  2. If so, when, and what are the principal terms of the agreement and the remuneration to Commonwealth Aircraft Corporation Limited for its services?
  3. When will the agreement be tabled in the House?
Mr McEwen:
CP

– The Minister for Aircraft Production has supplied the following answer: -

A formal agreement has not yet been completed, but negotiations are proceeding with the Corporation, and finality will be reached at an early date.

Cite as: Australia, House of Representatives, Debates, 17 September 1941, viewed 22 October 2017, <http://historichansard.net/hofreps/1941/19410917_reps_16_168/>.

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