Senate
4 October 1922

8th Parliament · 2nd Session



The President (Senator the Hon. T. Givens) took the chair at 3 p.m., and read prayers.

page 3104

PUBLIC WORKS COMMITTEE

Automatic Exchange, Canterbury

Senator NEWLAND brought up a report, together with minutes of evidence, from the Standing Committee on Public Works regarding a proposal to establish an automatic telephone exchange at Canterbury, Victoria.

page 3104

STANDING ORDERS COMMITTEE

The PRESIDENT (Senator the Hon. T. Givens) brought up the first report of the Standing Orders Committee, dated 4th October, 1922, together with amendments and additions to the Standing Orders recommended by the Committee.

Ordered to be printed.

page 3104

PAPER

The following paper was presented: -

Defence Department - Statement explanatory of Estimates of Expenditure, 1922-23.

ADJOURNMENT (Formal).

Supplyof Sulphurfor Superphosphates

The PRESIDENT (Senator the Hon T Givens:
QUEENSLAND

– I have received an intimation from Senator Lynch that he desires to move the adjournment of the Senate to 9 o’clock a.m. to-morrow for the purpose of discussing a matter of urgent public importance, viz., “ That the operation of the present Tariff law has failed to insure an ample supply of fertilizers and their mainingredients at moderate prices for the rural producers of the Commonwealth.”

Senator LYNCH:
Western Australia

.-I move-

That the Senate, at its rising, adjourn until 9a.m. to-morrow.

Four honorable senators having risen in their places insupport of the motion,

Senator LYNCH:

– This motion is dictated by a comparison of the position existing to-day with thatwhich we were led to believe would now -be the position when the Customs Tariff Bill was being passed through this Chamber last year. When the Tariff reached the Senate in the closing months of last year, it included a proposal for the imposition of a duty on sulphur, which is one of the chief constituent elements of superphosphates. It was not in the schedule of duties as at first introduced by the Government, but impressed later on, I suppose, by representations on the subject from people who have a good deal of influence’ with them, the Government subsequently included a proposal for the imposition of a duty on this article. I want honorable senators to understand that cultivation in this country is spread over a very large area. Referring to the Commonwealth

Year Book, I find that there are at present 13,000,000 acres under cultivation in the various States. The agricultural industry, to be successful, involves the use of large quantities of fertilizers. The supply of superphosphates is dependent on the supply of sulphur. When the Tariff was under consideration we were led to believe that if an adequate duty were imposed on sulphur the users of the article in the Commonwealth might depend upon being able to obtain a reliable supply of it. I am sorry to say that in this regard the Tariffhasnot fulfilled the prophecies made respecting it, and people who are to-day dependent on this important ingredient for the manufacture of superphosphate have to import it from abroad or must depend on a very limited and uncertain supply of sulphur placed a,t their disposal by local manufacturers. This condition of affairs has been the subject of an outcry on the part of people directly concerned, namely, the rural producers of Victoria. They waited upon the present Minister for Trade and Customs (Mr; Rodgers) at one of the principal towns in his electorate and laid their case very forcibly before him. I intend to put the report of the deputation on record. Mr. Rodgers was met at Hamilton by representatives of producing interests, as well as by representatives of the Phosphate ‘Company, a company manufacturing fertilizers in this State. It is as well that honorable senators should be informed that the Phosphate Company is a cooperative concern, and it is the policy of the Government and of every progressive party in this country to encourage co-operation. This company, engaged in the manufacture of superphosphates, considers that it has a genuine grievance because an agreement said to have been entered into by people who are supposed to be able to supply manufacturers of fertilizers with the ingredients they require^ has not been kept. The deputation to which I have referred, as I have said, consisted of representatives of the producers’ interests and of this company constituted on a co-operative basis, which has amongst its proprietors and those engaged in its control many people who are engaged in rural industries.

Senator Pearce:

– Is Mr. Hill, of the Country party, a director of the company ?

Senator LYNCH:

– I believe he is, and I assume that certain supporters of the Government are also interested in the company. Quoting from a report of the deputation, which was published in the Wimmera Star, of 28th July of this year, I find that Mr. Wolskel, the chairman of the Phosphate Company, said -

On 9th November Mr. Massy Greene, then Minister for Customs, informed Parliament that a satisfactory arrangement had been made between the Electrolytic Company and the Phosphate Company, and in consequence of this statement the duty was recommended.

He then read a lengthy circular on the matter, which showed that the Electrolytic Company had not carried out the agreement. The duty was supposed to come into operation on the 21st October last. The duty proposed on sulphur was one of those which was to operate when the Minister for Trade and Customs was satisfied that the requirements of the Commonwealth for the article proposed to be made dutiable would be sullied locally. On the 21st October the duty on sulphur was not made operative, because presumably the Minister for Trade and Customs was not satisfied that it could be adequately supplied locally. The time for the commencement of the operation of the duty was extended to March of this year. Then the present Minister for Trade and Customs imposed the duty, with the result that those who require sulphur for the manufacture of fertilizers are forced to pay an increased price for tha article or to depend on the very stingy and very unreliable supply that can be given them by the Electrolytic Company of Tasmania. If we turn up the records we shall find what has happened since the Tariff came into operation. I want to put on record figures with which I have been supplied by the Trade and Customs Department. ‘ It has to be remembered that the Tariff was passed some twelve months ago. I find that the imports of sulphur into the Commonwealth since the Tariff came into operation have been 16,113 tons for the State of Victoria alone. It has to be said that this sulphur has not entirely entered into the manufacture of superphosphate. Senator Earle, when the proposed duty was under consideration, explained that 95 per cent, of the sulphuric acid, which is manufactured from sulphur, is used in the manufacture of fertilizers. Since December last the imports of sulphur into the State of Victoria alone have represented over 16,000 tons. As I could not get into touch with them I have been unable to secure the figures for the imports of this article ‘in three other States concerned, namely. South Australia, Western Australia, and New South Wales. An estimate of their imports would, in the circumstances, only be guess-work. However, in Victoria, which is the one Statein which superphosphates are being manufactured, 16,000 tons of sulphur were imported since the beginning of the present year. The imports of sulphur for the full twelve months ending June of last year represented 33,000 tons for the whole of the Commonwealth. So that the one State in which superphosphates are manufactured, imported, since December last, almost one-half of the total quantity of sulphur imported for the whole of the Commonwealth in the previous twelve months. It is quite clear from these figures that the contention that local manufacturers of superphosphates have not been able to obtain an ample supply of sulphur locally is borne out by these figures.

Another matter of importance is the value of the article. I find that the average value of the 16,000 tons imported since December last is £3 13s. 6d. per ton, but I find, according to Mr. Gepp, the manager of the Electrolytic Com pany, that his price to the manuf acturers of superphosphates is £6 per ton.

Senator Payne:

– Is the price of £3 13s. 6d. per ton the price less duty ?

Senator LYNCH:

– Yes, that is f.o.b. price, less 10per cent. and less duty. Mr.Gepp, of the Electrolytic Company, asks for a nominal price of £6 per ton. These facts show that the manufacturers of superphosphates in this country are given the choice of two cruel alternatives, wither to pay £6 per ton to the Tasmanian company for an uncertain supply, or £3 13s.6d.for the imported article plus the duty and freightcharges.

Senator Senior:

– That is not the position in South Australia.

Senator LYNCH:

– I am aware that the Mount Lyell Company has its subordinate company in South Australia. The Wallaroo Company is apup ofthe Mount Lyell concern.

Senator Senior:

– It isas big as the parent company.

SenatorLYNCH.-And so are some of theothercompanies that are linked up in the same way.I do notknow how Cuming., Smith, andCompany stand, but Ibelieve they are, or were, the owners of a mine in Western Australia, and in the past drew on their own supplies. Thisessential ingredient in the manufactureof super phosphates is not yet supplied in ample quantities by the local companies, and so we have to pay a duty upon the imported article. So far as we can see, we are not within measurable distance of being able to meet the Australian demand from the local sources, and, as a consequence, in the meantime those who have to rely upon this commodity for the success of their operations - I refer to the farming community in the Commonwealth - have to pay an enhanced price of £6 for the local article, or, as I have shown, £3 13s. 6d., plus duty charges. .

I want to impress upon honorable senators, if I can, the fact that the primary producers of the Commonwealth, and especially the wheat-producers in the various States, are entitled to consideration. The area under wheat, 9,000,000 acres, is a dwindling quantity, and it will continue to dwindle unless we off er more encouragement to the wheat-growers. Wheat production depends upon the liberal applicationof superphosphates, and the manufacturers of superphosphates, in their turn, depend upon ample supplies of sulphur being made available at a reasonable price. Our wheat-farmers are up against unfair competition. They have to bear an undue burden in the Tariff. I have given very careful attention to the study of this subject, and I want to place the position before honorable senators. I do not know if a reference to the Argentine will come within the scope of my motion, but I trust, Mr. President, that you will allow me to state briefly what I wish to say. This morning I made inquiries as to the position of wheat-farming in the Argentine, and I find that there is only a nominal duty in the case of nitrate of potash of21/2 per cent. Artificial fertilizers are also admitted free into both Canada and the United States of America, which, with the Argentine, are our principal competitors in the European market. It shouldbe noted also that in all three countries where fertilizers are admitted free there is not the same need for their use. In the Commonwealth their use is essential to successful wheat production. The simplest calculation in arithmetic will provethat our wheatgrowers and primary producers generally, if this handicap on them is allowed to continue, will be unable toholdtheir own in the overseas market, upon which they depend.

Senator Earle:

– I am loath to. interrupt the honorable senator, but it. may help him if I say that the. matter to which he is referring is under the consideration of the Tariff Board, at the present moment.”

Senator LYNCH:

– Then I hope- that something will be done. I am very happy to have that assurance from the Minister. I was about to quote, when the Minister gave- me that encouraging intimation, some illuminating figures, from a valuable work upon wheat production, showing, the position’ of the various countries in the world. I find, that in the case, of our American, competitors, the freights, ranged from 3 cents to 7 cents per bushel to Manchester or Liverpool from Montreal, whereas from the Commonwealth, it waa lOd. prior to the war, and is ls. 4d. at the present time. It will be seen, therefore, that apart altogether from the burden in the way of the duty on fertilizers, the Australian producer- is’ heavily handicapped! in competition. Australia occupies a ‘ ‘relatively subordinate position’ in wheat production.” Thau is the standing comment of tie Commonwealth! Statistician in: comparing the- Australianaverage production with that of’ other countries. Hot only, are our soils less bountiful, but by reason of our geographical position we have’ to pay very much, higher’ freight per bushel; for th& transportation of our wheat to. the, competing centres, of. the world. If onlythe, Government, would, definitely anrnounce that the remedy would- be applied, they would do an incalculable amount of good to. the primary producing interests: of* this country. Unless some- remedy can Be applied, our wheatgrowers, must, eventually go out ofl the business.. A liberal supply of’ fertilizers is essential for. successful production in Australia. “We can stand’ an increasing use of this commodity if- only the price warrants its use. I. have: here a statement issued by the Victorian Agricultural’ Department urging the- wheat-growers of this State to give greater attention to the. use of fertilizers. They point out that the application of J cwt. of superphosphates per acre* will result in a yield of 6 extra bushels-;1 that another- £ cwt. will give- anadditional 3 bushels per acre; and that if the farmers, use 156 lbs. to theacre, they may expect’ to get a further return! of 2’ bushels. If. only they canget this fertilizer’ at a. reasonable price there will’ be an increasing demand for. its use, not only foc wheat production, but for’ pasture. An analysis of oran lighter soils shows that it is deficient in phosphorus, and in this respect theydiffer from the soils of our chief competitors in America. I can quote many] authorities bearing out my contention;.. In the far western States of the “Unified! ,States of America, and in Manitoba and Alberta, the- use- of fertilizers is unknown!. Land there has been cropped for the last twenty years;, and if honorable; senators turn up the records, they will find that the yield in Canada is far in excess^ ofl that in Australia. In North Dakota and the north-west of the United States of America the production, costs certainly show that the use of superphosphates does not enter into the calculation.

Senator SENIOR:

– That may explain why fertilizers are- allowed in free in those countries

Senator LYNCH:

– The honorable senator can put it that way if he likes, but I should, think it was due to the richness of their soils. We have no .rich soils in this country, judged by American standards. It is quite clear from the figures I have given as .to the importation of sulphur for- the State of Victoria alone,, that our local manufacturers, of superphosphates are obliged! to import an. essential commodity upon which, this duty is paid, and. our primary producers, therefore; are under the. necessity of bearing an extra burden in. the price? of the locally manufactured article - a state o£ affairs that seriously handicaps them. in. competition in the world’s- markets. I welcome the assurance of the Minister; that the Tariff Board is about to.- make earnest inquiry into the position, and 5 sincerely hope that, as a result of the1 in-; quiry, the primary producers of’ the- Commonwealth will’ be placed in- a positron that will enable them to meet, on- somewhat equal terms, their overseas competitors.

Senator WILSON:
I shall not delay the Senate very long this afternoon. I indorse Senator’ Lynch’s remarks. For some days’ past T have been carefully inquiring into’ tRia matter, and. it was only this1 morning- that the- Minister (Senator- Earle · South. Australia}, [3’.2’6J.

, whom Iinterviewed, intimated’ that he hoped? te*-, place, the full, facts before- Cabinet- for consideration, next week: I should like. to draw attention to one or two difficulties that have arisen since the Senate, in its wisdom, agreed to the Tariff last year. In South Australia, fortunately, we are -in a happy position so far as the primary producers are concerned. We buy the rock in the same way as in the other States, and the prices are fixed for the various States as follows: - Tasmania, £6 12s. 6d.; Western Australia, £5 18s. 6d. ; Victoria, £5 10s. j South Australia, £4 6s.

Senator Lynch:

– That wants explanation.

Senator WILSON:

– Yes, and I am going to make the explanation. In South Australia we have a company of farmers who come together in a cooperative movement for the production of superphosphates, which is made available to their fellow farmers at a reasonable price. The older and larger companies that are in control in the Commonwealth are out to make the trading position in South Australia as difficult as possible, with the result that, owing to the competition, our farmers can get good phosphate at a price considerably lower than is charged in any of the other States. I am certain that the Senate had no idea, when agreeing to the duty last year, that it would mean a sectional tax. I have been informed on very reliable authority that very shortly there will be imported to Australia and New Zealand about 28,000 tons of superphosphates upon which our primary producers will pay a duty of £2 10s. per ton. Some people say that it will not make any difference to the. price, but I contend that it will make all the difference to it. Even when the large manufacturing companies obtain all the sulphur that they require to supply Australian requirements, it is the duty of the Government to see that the smaller companies in the different States, are able to obtain the ingredients necessary for the manufacture of superphosphate at a reasonable price. Unless that is done the smaller companies will be forced to’go into the enemy’s camp to purchase the requisite ingredients. I feel sure that the matter can be safely left in the hands of the Minister. (Senator Earle). Seeing that the Department is going into it exhaustively, no doubt the Minister will appreciate the support he has received in the form of the present motion. No doubt, honorable senators may look forward to more relief, because it has been distinctly stated by the Treasurer (Mr. Bruce) that it was never the intention of the Government that such duties as those on wire, wire netting, and tractors should be revenue producing. I submit that the .present duty on superphosphates is a revenue-producing one. It was never intended to be so, and until Australia can supply its own requirements the Government should at least delay the imposition of the duty.

Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931

– I support the remarks of Senators Lynch and Wilson. Agriculture is the best industry for this or any other country. It is the backbone of our wealth, and I hope that the Government will do everything in their power to provide the farmers with superphosphate as cheaply as possible. There has been a wonderful advance in the wheat yield of Australia owing to the more efficient methods of farming adopted. In 1902, the quantity of superphosphate used in Victoria per acre was 33 lbs., and in 1920 the quantity had been increased to 78 lbs. The Journal of the Department of Agriculture of Victoria, in its last issue, gives a study of the wheat yield in the Wimmera and Northern districts, illustrating some factors controlling the progressive improvement in the efficiency of a country’s agriculture. Victoria has a greater number of wheat-growers than any other State; it has a larger area under wheat, and it has a greater yield per acre. In the period from 1892 to 1896 the average yield per acre in Victoria was 7 bushels, but in the years 1908 to 1913 the average yield had increased to 14.8 bushels. Last year the average for the whole of Victoria waa 16.8 bushels, an achievement which has never been equalled in any other part of the Commonwealth. In Borung, the largest wheat-growing county in Victoria, the average was 28.05 bushels, and some of the farmers there averaged oyer 50 bushels to the acre.

Senator DE LARGIE:
WESTERN AUSTRALIA · ALP; NAT from 1917

– Victoria is a long way behind Tasmania.

Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931

– Tasmania hardly grows enough wheat for its own requirements. Of course, New Zealand has a larger average yield per acre than Victoria, and the country with the heaviest yield in the world is Denmark. To illustrate the increased production due to the more efficient methods adopted by farmers by the introduction of superphosphate, and the improvement in the breeds of wheat, let me point out that the average yield in the Wimmera has increased from 7.6 bushels in the period from 1897 to 1901 to 19.1 bushels in 1915-20, inclusive. In the Mallee country the yield in 1897-1901, inclusive, averaged 3.9 bushels to the acre, whereas now, under the vastly improved methods adopted, the yield for 1915-20, inclusive, increased “to 10.3 bushels per acre. The figures I have quoted support what I stated last evening as to the improved methods being adopted by the farmers. I speak with greater confidence with regard to Victoria and the Riverina. but I think the same observations apply to the other wheat-growing States of Australia.

Senator Rowell:

– Do you attribute that to the use of fertilizers?

Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931

– Yes, very largely, and we should see to it that the farmers get tile fertilizers as cheaply as possible for this national industry, which is almost the life-blood of the country. Our soils are deficient in phosphates, and -it has been proved that a liberal application of superphosphates improves not only wheat land, but vastly increases the value of grass lands. It has been scientifically demonstrated that the top-dressing of grass land increases its carrying capacity, and improves the quality of the pasture for every class of stock.

Senator Russell:

– The Government have always declined to make one penny out of the farmers.

Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931

– I want the Government to assist the farmers, and so help Australia by making fertilizers as cheap as possible.

Senator PAYNE:
Tasmania

.- Last year we were induced to amend the Tariff schedule by imposing a fairly heavy duty on sulphur. I quite agree that it was correct to impose that duty, because representations were made that all the sulphur necessary for the carrying on of the industry in Australia would be supplied by the Australian manufacturers. To-day, Senator Lynch brings under our notice the fact that 16,000 tons of crude sulphur have had to be imported from overseas for a period of about nine months in Victoria alone, as compared with 33,000 tons in the previous year for the whole of the Commonwealth. That clearly proves that the promises made have not been fulfilled, as far as the production of sulphur in Australia to meet the requirements of the rural community, is concerned. I am glad that the Minister (Senator Earle) has indicated that there is to be an immediate inquiry. Senator Guthrie has emphasized the need to give every encouragement possible to the primary producers, and he emphasized a point that is not often raised. He referred to the extensive use of superphosphates by pastoralists. I know that in the north-western portion of- Tasmania wonderful results have been obtained by the top-dressing of grass lands. Naturally the grass begins to die out after a period of years, and new life is put into the sail by the application of superphosphates. Tasmania is keenly interested in this subject, because, in addition to paying a high price for superphosphates, ite producers have to bear the cost of the freight across Bass Strait. This year Tasmanian producers have to pay £6 12s. 6d. per ton as against £5 10s. in Victoria, the difference evidently . being due to the extra cost of handling and the shipping charges. I am hopeful that in the near future, Tasmania will be manufacturing its own requirements in the form of superphosphates. Flans are in preparation for the erection of a factory for their production in the southern part of the State. The sooner Tasmania is independent in that matter the better it will be. I welcome the motion, and I hope that the discussion will have the effect of awakening those who are specially interested to ‘an even keener interest in future. I Hope that the inquiry made under the direction of the Minister will result in relief being afforded.

Senator EARLE:
VicePresident of the Executive Council · Tasmania · NAT

. - I wish to amplify the interjection ‘'’I made when Senator Lynch was speaking to the effect that the matter has been under consideration. It was brought under the notice of the Minister for Trade and Customs (Mr. Rodgers) by Senators Plain and de Largie some time ago. An investigation has been held by the Tariff Board, whose report is now completed. The Minister hopes to make a statement in the near future in the other branch of the Legislature. I trust honorable senators will be satisfied to know that the subject is receiving the serious attention of the Department. When tie subject was under discussion a year or so ago we were considering interests which should not be forgotten. Parliament was justified in putting the duty ou sulphur in order that the miners working the ‘low-grade ore propositions might be able to successfully carry ou that industry. We have to consider them as well as those engaged in primary production. There are these two sections -which must necessarily receive attention by Parliament.

Senator Lynch:

– Is that not setting a by-product against the staple product?

Senator EARLE:

– No. All the details in connexion with the position have been considered by the Tariff Board ; but there are mining propositions, of which we had ample evidence when the matter was under discussion, in connexion with which the value of the sulphur contents of the ore represented, perhaps, 10s. per ton, which often meant the difference between success or failure. Pyrrhic ore returns a certain quantity of gold, silver, and copper, but not sufficient at times to make it a payable proposition; but if those engaged in mining operations can obtain, say, 10s. per ton for the sulphur contents of the ore it would pay them to treat it. That was what was in the minds of honorable senators when it was agreed to impose a duty on sulphur. That necessity still exists to-day, and I have no doubt that it has been fully considered by the Tariff Board. The matter has been fully investigated, and a report has been submitted to the Minister for Trade and Customs (Mr. Rodgers), who intends making a statement on the matter either this week or next, or, at any rate, before the session closes.

Senator SENIOR:
South Australia

– I am interested in this matter, because I took a somewhat prominent part in the discussion when the duty on ralph ur was under consideration. I desire to impress -upon Senator Lynch that he overlooked one fact - I do not suggest that he did it designedly - and that is the close relation between mining and agriculture in this connexion. In ores containing iron or copper there is usually a percentage of pyrites from which is obtained the sulphur used in the manufacture of sulphuric acid. When I mentioned Wallaroo, by interjection, Senator

Lynch referred to the Wallaroo Phosphate Company in a somewhat slighting manner, and said it could be regarded as only a “ pup “ of the Mount Lyell Company. The honorable senator probably overlooked the fact that tie Wallaroo and Moonta copper mines have been the richest copper mines in Australia. He also seems to forget that Mount Lyell, which is a larger concern, is closely associated with the production of sulphur, which is- extracted from the fumes –at the smelters. I understand that 1 ton of phosphatic rock will, with the use of sulphuric acid, produce nearly 2 tons of superphosphate.

Senator Rowell:

– That is because so much sand is put in it.

Senator SENIOR:

– Sand is used to enable the superphosphate to flow freely in the drills. I desire to impress upon Senator Lynch that he has not put the position fully, and should remember what has been done in connexion with Nauru, in which Australia, and New Zealand and Great Britain are interested. In 1921, 394,051 tons were exported from Nauru, which was 55,000 tons more than was exported during the Pacific Phosphate Company’s best year in 1913, and Australia received more than her share, as of the total quantity exported we received 357,496 tons, or practically 65 per cent.

Senator Wilson:

– We would like to see it all come here.

Senator SENIOR:

– We have received more than our proportion, as we are entitled to only 42 per cent., and there has therefore been no neglect in that direction.

Senator Wilson:

– That point has not been raised.

Senator SENIOR:

– No, but it has been said that in consequence of the operations of the Tariff the manufacture of superphosphates has been interfered with.

Senator Wilson:

– Who said that?

Senator SENIOR:

– I am stating the position fully. Senator Lynch did not quote the price of superphosphate here, and that prevailing elsewhere.

Senator Lynch:

Senator Wilson did.

Senator SENIOR:

– He told us that the price outside ranged from .£8 to £11 per ton.

Senator Wilson:

– The honorable senator is going back too far.

Senator SENIOR:

– These figures are up to date. The price of superphosphate in Tasmania, is £6 per ton, so the farmers have benefited to the extent of practically £3 per ton.

Senator Payne:

– That price applies to last year, and these figures are for 1922.

Senator SENIOR:

– The freight on the rock sent to Australia has been reduced by 7s. 6d. per ton, which makes it still cheaper.

Senator Wilson:

– But we are not discussing the rock.

Senator SENIOR:

– Superphosphate cannot be made without it. It must also be remembered that when the Tariff was under discussion, it was not thought that the Mount Lyell mines would be closed for so long, or that the Wallaroo and Moonta mines would be idle for .a very lengthy period owing to the low price of copper. Is it the fault of the Government that these mines are closed ? If we had been informed that it was impossible to obtain supplies of sulphur locally for the manufacture of superphosphate, we would not have been justified in imposing a heavy duty.

Senator Wilson:

– Did not the honorable senator support a reduction of duties on ‘several items yesterday?

Senator SENIOR:

– I did. The manner in which this matter has been brought forward suggests that the Committee, when considering the Tariff, acted unwisely, and should .have taken every precaution to see that the farmer obtained his superphosphate at the lowest possible price. The Government are not to blame for the position we are in.

Senator Wilson:

– We are not blaming the Government.

Senator SENIOR:

– Unless the position is made quite clear, it will be thought that the Government are guilty of neglect and are not helping the men on the land in the way they should.

Senator Lynch:

– Will the honorable senator tell us of some of the troubles experienced in getting the sulphur from some of these family concerns?

Senator SENIOR:

– When the Tariff waa under discussion it was mentioned that, as only a small quantity was used in the manufacture of aerated waters, supplies for that purpose would be admitted free of duty, because the local product was unsuitable. We have, however, in Australia, huge quantities of pyritic ore from which sulphur can be extracted, and it is unwise to allow similar ores to be imported from Spain. It is suggested that importations should come in as before.

Senator Wilson:

– Who advocated that? .

Senator SENIOR:

– That is why the duty was imposed. The price in Australia is lower than it is elsewhere. We derive considerable advantage in consequence of our interests in Nauru, and the mines here have been closed, and Senator Lynch, should have mentioned: those points in order to make his statement complete.

Senator VARDON:
South Australia

– Our duty is to consider the interests of the primary producers, not only in one State, but throughout the whole of the Commonwealth. Senator Senior has enlightened us by showing that the prices paid in other countries are approximately 50 per cent, higher than in the Commonwealth. The highest price payable in the Commonwealth is £6 12s. 6d. in Tasmania, as against £4 6s-. per ton in South Australia, and it appears to me that some one is receiving exceptionally high profits in this particular industry. In South Australia, owing to the other companies coming into competition with the Cresto Co-operative Company, which consists of about 600 farmers, the price charged, as mentioned by Senator Wilson, is considerably lower.

Senator Payne:

– Twenty-four shillings per ton cheaper in South Australia thant m Victoria.

Senator VARDON:

– Yes, and £2 6s. 6d. per ton less than in Tasmania.

Senator Payne:

– But in the case of Tasmania, freights must be taken into consideration.

Senator VARDON:

– The freight doe» not account for the substantial difference. In order to show that the South Australian company is manufacturing at a profit, I may mention that in their last, report, dated the 1st August, 1922, the profit earned has been sufficient to pay a dividend of 10 per cent, on the ordinary shares, and 7 per cent, on the preference shares, after making full allowance for depreciation and bad and doubtful debts.

Senator Payne:

– - That statement is based upon last year’s prices.

Senator VARDON:

– Those are the. figures which are published in the balalancesheet issued on 1st August, 1922«.v The company is hardly likely to fix % price for this year which would give them poorer results than they got last year.

The Senate is indebted to Senator Lynch for bringing this matter forward. I consider that I am unfortunate in having been associated most of my life with secondary, rather than primary, industries, but I recognise, nevertheless, that unless our primary industries are successful our secondary industries cannot prosper. While the Customs Tariff Bill was before the Senate some honorable senators objected to the appointment of the Tariff Board. I think we can now see the wisdom of our action. I fully approve of what we did yesterday regarding’ wire, wire netting, and galvanized iron. I well remember that when the Bill was before the Senate last vear it was stated, with regard to a number of duties the levying of which was deferred, that they would not be imposed before the Minister had been assured that 75 per cent, of the requirements of Australia were being manufactured locally.

I do not know whether the Minister received that assurance in regard to sulphur. If he did not, something has been done of which the Senate at that time did not approve. I am glad to have the Minister’s assurance that the Tariff Board will deal fully with the matter.

Senator FAIRBAIRN:
Victoria

– I do not need to say more than a word, or two on the motion, particularly after the assurance of the Minister that the Tariff Board has the matter in hand. I hope it will be brought before the Senate before we rise. It will be a great relief to the fanners to know that the matter has been dealt with. I have tried top-dressing with superphosphate on pastoral land, and have received wonderful results. In addition to being used on wheat land, where it is absolutely necessary, it will also be greatly in demand in the future for top-dressing ordinary pasture land. Australia will, require an enormous quantity of this article. It not only increases the carrying capacity of the land, but makes the animals much more healthy. It will do away with rickets and certain other diseases. Senator Lynch said, quite rightly, that it was absolutely necessary, if we were to compete with other countries, that our cost of production should be kept as low as possible. We do not want to abolish the sulphur production industry of the mines, .but we should see to it that the material is supplied to the farming and pastoral community as cheaply as passible: Senator Lynch compared the cost of transporting wheat , from Australia to England, which amounts to 8d. or lOd. a bushel, with the cost of transporting Canadian wheat, which is from 3 to 7 cents, and Argentine wheat, the cost of moving which is about the same as that of Canadian wheat. One cause of that difference is the enormous port charges levied in this country. As an example, I will cite the port charges on the mail steamer Ormonde, which are stated in the trade edition of the Times. The Ormonde is the largest mail steamer trading to Australia. Its tonnage is 14,853 gross and 9,021 nett. The port charges on that vessel in Hobart were £57 10s.; in Sydney, £269 19s. 5d. ; in Wellington, New Zealand, £338 5s. 9d. ; in Adelaide, £407 5s. 4d.; and in Melbourne, £432 16s. 5d.

Senator Keating:

– That is because the facilities of Hobart as a seaport are so much better than those of any other port.

Senator FAIRBAIRN:

– No lighting dues are charged in Hobart, but that does not account for the difference, which is due to the overlapping of the Commonwealth and State authorities. There is too much Federal interference with the States. Notwithstanding the fact that the lighting of the coast is a Federal matter, Sydney and Melbourne still charge heavy dues for lighting. The port charges in Melbourne are the highest in the world. It is quite time that the States ceased to interfere with the Commonwealth, and r hope that the Commonwealth will not further interfere with the States.

Senator Keating:

– The States do not charge for coastal lighting, but only for lighting within the territorial waters of the States. They are two distinct things.

Senator FAIRBAIRN:

– I am told by shipping men that they are not distinct. It was understood that the Federal Government would have control of the lighting of the whole coast, both in port and out of port.

Senator Pearce:

– Have the States reduced their lighting dues since the Commonwealth took over the lighting of the coast?

Senator FAIRBAIRN:

– I understand not. It is a scandal and a disgrace. How can we expect to compete against Canada in wheat, or with the Argentine in wool, in such circumstances? We cannot entirely blame the shipping companies, when they have to pay on one steamer, in the port of Melbourne, charges amounting to £432 16s. 5d. Hobart, with a charge of only £57 10s., is setting a good example to the other ports. I wish to emphasize the point made by Senator Lynch, that if we do not take steps to reduce our port charges, so that they will compare more favorably with the charges made in other countries, which have an immense advantage over us by being nearer to the markets of the world, a great many of our primary industries will cease to exist. I have the greatest pleasure in supporting Senator Lynch’s motion.

Senator DE LARGIE (Western Australia) [4.8). - This question has been raised before to-day, inasmuch as Senator Plain and I talked it over some weeks ago and brought it before the Minister for Trade and Customs (Mr. Rodgers). I wish to give Senator Plain the major portion of the credit for the way in which it was presented to the Minister, who gave us a very favorable reply. We cannot expect the Tariff Board to inquire into all the ramifications of the Tariff in a few months, especially when we call to mind that the Board has to visit the various States. As I was one of those who requested that it should go to Western Australia as soon as possible, I cannot, at the same time, request that it should give attention to this one subject to the exclusion of others. In Western Australia, members! of the Board are visiting every big centre and the agricultural districts, and they ought to be able to get a. considerable amount of evidence, which will strengthen the case put before them by Senator Plain. Whilst it is our duty to do all that we possibly can for the primary producer, whose name is “Farmer,” we must also remember that the miner is a primary producer, whom we cannot afford to ignore. With the exception of coal mining, the mining industry in Australia, particularly metal mining, has been in a bad way for a considerable time. We have reached a stage when we -have very little of the richer ores to mine. Only the poorer ores are remaining, and, in order to make them productive and profitable, we must use every possible by-product. lt waa -with that object in view that a duty was put upon sulphur. It has been suggested to the Tariff Board, and to the Minister for Trade and Customs, that one of the means by which we could get over the difficulty without injuring the [mining industry, would be to give ‘ a bounty on the production of sulphur. That would solve the difficulty and do no injury to the miner, while at the same time it would give to the farmer the cheap superphosphate which we expected he would get. I am quite sure that he is getting cheap superphosphate in a greater degree to-day than he ever got it before. The price of superphosphate, since it came under the control of the Government, as a result of the taking over of the valuable deposits at Nauru and Ocean Islands, has come down very rapidly. Owing to the price of sulphur, remaining where it is, the full benefit has not been secured by the farmer. A reduction in the price of sulphur is one of the things that we should strive to bring about as soon as possible, and with that object in view, I feel sure that the Tariff Board will see the benefit of presenting its report to the Government as soon as’ possible. I support the arguments that have been advanced in favour of cheaper superphosphate. The primary producer- in Australia has many handicaps, and itis only by making full use of our byproducts that we can compete successfully in the world’s markets.

Senator PLAIN:
Victoria

.- When the question was before the Senate previously, I opposed a duty on sulphur very strongly. I could see the danger ahead with regard to manures. This is a question to which I have given a great deal of attention. I seldom raise a question which occupies the time of the Senate unless, after having approached the Minister, I have failed to receive reasonable consideration. I, first of all, thought of asking the Senate to grant a Select Committee to investigate, the matter. Before moving in that direction, however, I interviewed the Minister for Trade and Customs (Mr. Rodgers), and put the facts, as I knew them, before him, and asked’ him whether it was’ the intention of the Government, or of himself, to investigate the circumstances surrounding the supply of sulphur- and manures. He informed me that it was his intention, following upon the information I had placed before him, to go into the whole matter, and at an early date, to make an announcement. I was not present when Senator Lynch moved the adjournment of the House, but if any man is capable of speaking on this subject, it is the honorable senator, who knows what it is to struggle on the land and to wage a hard fight in an arid district. The facility with which fertilizers can be obtained makes or mars the efforts of men who, like Senator Lynch, are settled in the arid districts of this country, where, by the way, we are settling many returned soldiers at the present time. Settlers in such districts should receive at least the same consideration as those who are carrying on the work of rural production under more favorable conditions.

Senator Duncan:

– They are deserving of more consideration.

Senator PLAIN:

– I put them on an equality and say that they should receive at least the same consideration. Men settled in the Wimmera on the best of soil, with good rainfall, and under the most favorable conditions, including satisfactory railway communication, are able to obtain 5 tons of manure, whilst men settled in the arid districts can only obtain 4 tons. The people settled in the arid north have this year escaped, only by what appears to have been a miracle, one of the greatest droughts ever experienced in Australia. Their crops are very light, and yet these settlers are asked to be satisfied with 4 tons of manure, whilst men carrying on a similar occupation under far more favorable conditions, can get 5 tons. I ask the Government to take action in this matter to secure justice for our rural producers regardless of consequence. I have always stood up for the primary producer, and although my voice is not often heard in this chamber, I can claim that there is no man in either the State or Federal Parliament who has done more to promote the interests of the struggling farmer. For years I gave my time to the work of Commissions, for which I asked no money, that were responsible for the placing of legislation on the statute-book in the interests of rural producers. Hundreds of settlers will give evidence that as the result of recommendations which I have made in regard to the improvement of their conditions, they have never turned back. At the present time, through the position I have the honour to occupy as president of one of the greatest political organizations established in Australia, I have urged upon Ministers and Departments the requirements of rural producers and the need lm remedying the grievances from which they suffer. In the efforts I have made, I have received no sympathy from the men who profess to specially represent the farmer. When a request of this kind is made, those people are as silent as the tomb, and for one reason only. It is because fox political purposes they wish to be able to use this grievance of the rural producers as a weapon against the Nationalist party at the nest election. They do not care how the farmers may suffer in the meantime. They do not care whether or not they suffer from a drought. I believe that many of them would pray to God that the rural producers should suffer from a drought if they might make use of the circumstance as political capital. It is time that the people in the drier districts of the north should know the attitude adopted by some persons towards them, and the difficult conditions under which they are working.

It is the duty of the Government to go into this question thoroughly. Those who are to-day manufacturing sulphur are placed in a position which enables them to dictate to persons engaged in another industry. If I desired to commence the manufacture of superphosphates, they would probably say, “ We are very sorry,” Plain, old man, but our supply of sulphur is rather limited. We should like to help your young firm along, but we cannot really do it at present.” After a time they would probably come to me and say, “ We have a little more sulphur than we expected to have, and we should like to know how your firm proposes to treat the farmers. Will you sell manure to them at the same rates as other manufacturers .or at a cheaper rate?” If I were to say, “ I intend to cut prices down to bedrock in order that the farmers may have the benefit of cheap manure,” I should be immediately told that I could get no sulphur.

Senator Wilson:

– Is not that the position to-day?

Senator PLAIN:

– That is the position. The combination of the Mount Lyell and the Electrolytic Company are in a porn. tion to-day to make or mar a great industry. We have passed a Tariff with the object of fostering local industries, but in doing so we have given the power to certain persons to strangle an industry which is being carried on by those who are prepared to assist the rural producers of the country. If this country is to become great, we must afford every possible facility to our primary producers to exploit the riches of our soil. Honorable senators are justified in expressing their opinions on this matter fully and candidly. Unless the matter is dealt with on a basis fair to our rural producers, a little more will be heard from me in this Chamber. Unless justice is done to these people it will be found that I can. make as loud a noise as any member of the Farmers Union, and that I can be just as nasty, too. I have no desire to further delay the proceedings. I have been for sixteen years a member of Parliament, and fail connexion with every grievance which I considered required attention I have gone in the first place to the Minister concerned, and I am in a position to say that during the whole term of my political life I have never asked a Minister, State or, Federal, for anything in reason that was not granted to me. That will account for much of my silence as a member of Parliament. I hope that this matter will be speedily and satisfactorily dealt with.

Senator LYNCH:
Western Australia

– I wish to express my pleasure at the way in which my motion has been received. It is quite clear that though honorable senators may not belong to a party with a particular label in this country they can step outside their ordinary duties and recognise the necessity of seeing that justice is done to any industry in this country on its merits. From the speeches which they have delivered on my motion, honorable senators have made it. clear that they are quite as sympathetic, towards country industries as any other party can be.

This is not a new subject with me. About a dozen years ago I took it upon myself on my arrivel in this Chamber to move in this very matter. If I were asked whether or not it was the votes of the farmers that sent me here, my answer must be that if I had been dependent on the farmers’ votes alone I should never have seen the four walls of this chamber. That consideration, however, has not prevented me at any time from recognising the necessity of doing all that is possible for the men. who are settled on the lighter and less productive soils of this country. I submitted a motion in this Chamber as a result of which the Prime Minister of the day (Mr. Andrew Fisher) put £1,000 on the Estimates for the purpose of rewarding the discovery of phosphatic rock, and paying any company a percentage for working it. I mention this in no egotistical spirit, but in order to show that my sympathies have not been confined by the interests of a particular party. It must be quite clear from what honorable senators have said to-day that something needs to be done in this matter, and if something is not done quickly the general prosperity of the country must suffer. I thank honorable senators for their sympathetic expressions, and I now ask leave to withdraw the motion.

Motion, by leave, withdrawn.

page 3115

QUESTION

FRUIT POOL

Senator KEATING:

asked the Minister representing the Prime Minister, upon notice -

  1. Does the Government intend to form and/or finance a Fresh Fruit Pool before, and for the purposes of,the approaching season?
  2. Did the Prime Minister in August last, in response to representations of a deputation to that end, promise an early reply?
  3. Has such reply yet been given, andif so -

    1. When?
    2. To what effect?
  4. What is the present position of the matter?
Senator EARLE:
NAT

– These questions should have been addressed to the Minister for Trade and Customs, who has supplied the following answers: -

  1. A Government announcement on this subject was made in another place by the Minister for Customs on 2nd instant.
  2. Yes. Considerable negotiations have since taken place, including a conference between representatives of the Commonwealth and State Governments. 3 and 4.See reply to No. 1.

I may supplement these answersby saying that the honorable senator will find the remarks of the Minister reported in Hansard for Monday, 2nd October.

page 3116

QUESTION

FEDERAL CAPITAL

Agricultural College and Experimental FARM

Senator GARLING:
NEW SOUTH WALES

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

  1. Whether the attention of the Minister for Defence h-as been drawn to a proposal originally .made by Sir J. H. Carruthers, M.L.C., of New South Wales, and referred to by me in this Chamber on two occasions, that part of Duntroon Military College and part of the area of about 3,000 acres set apart for military training purposes should be utilized for an agricultural college or high school and experimental farm?
  2. Whether, in view of the fact that much of the accommodation and equipment at the College is now unused, as the result of the recent alteration of the Defence policy of the Commonwealth, and that the proposal above referred to will enable such accommodation and equipment to ‘be effectively used, and so reduce the per capita cost of keeping up the establishment, the Commonwealth Government will bc prepared to consider a proposal with the above object, if submitted by the Government of New South Wales, so long as it does not prejudidally affect the continued use of Duntroon foi military purposes?
Senator PEARCE:
NAT

– The Minister for (Defence informs me that he has no personal knowledge of this matter, hut will have inquiries made.

page 3116

AUSTRALIAN SOLDIERS’ REPATRIATION BILL

Bill read a third time.

page 3116

CUSTOMS BILL

Bill read a third time.

page 3116

CUSTOMS TARIFF (INDUSTRIES PRESERVATION) BILL

Third Reading

Motion (by Senator Earle) proposed -

That this Bill be now read a third time.

Senator KEATING:
Tasmania

– I desire to oppose the motion for the third reading and to say, as I said at the time of the passing of the parent Act which this Bill proposes to amend, that it is not because I object to the preservation of Australian industries at all that I do so. I object to this measure because of the means that are adopted for that purpose. I do not think the means will be effective.

The introduction of this Bill furnishes the strongest justification for my attitude with regard to the parent measure when it was introduced. I think the means adopted are clumsy, and that this attempt to amend them only adds to their clumsiness. The original proposals of the Government were, in my opinion, calculated to harass all those interested in industry. They were uncertain, and we are making them more uncertain by the provisions of this Bill, which, like the parent Act, deals with two distinct classes of importations. It gives power to the Tariff Board to increase the addition from the 5 per cent, which we gave it power to impose under the original Act up to an addition not exceeding 20 per cent. That is the more normal part of the Act, and that is the more normal part of this amending measure. To that, my opposition last year was not strong as it was to the other proposal, namely, the exchange currency provision which is dealt with in clause 4. I pointed out when the Bill was in Committee that the whole scheme, if not designed with that intention, would at all events tend to drive Australia, for its importations from abroad, to countries which, so far from being our Allies during the recent war, were neutrals, except, of course, in. the case of the United States of America and Japan. My comments with regard to the position that would arise in connexion with importation from America and Japan twelve months ago have been verified by experience. The Customs Department finds itself now compelled to adopt legislative provisions to meet those then foreshadowed circumstances. Last year I asked if the Government would postpone that part of the legislation contained in the original Bill, now the original Act, relating to currency exchange, and experience has now shown that the provision then made did not meet the circumstances it was intended to meet. We are now confronted with amendments that will be just as inept and just as foolish as were the provisions of the original measure. Moreover, I think we are simply patching up our clumsy legislation. I said last year that it would be necessary for any person engaged in importing, whether as a private individual or as a calling, to have by his elbow some one conversant with the provisions governing; all the conditions and all the circumstances that we are purporting to provide against. And that will be necessary in the future. I do not care who it is, or. what experience he may have had through long association with any trade or calling, I defy ham to know where he stands at the present time under the legislation we introduced last year, or where he will, stand under the legislation that will be extant if we cass this Bill.

Senator Duncan:

– The Department does not understand.

Senator KEATING:

– The Department itself does not understand the position. From time to time indications have been given here and elsewhere that at some time or other the Federal Parliament, or one or both Houses, -would have an opportunity of discussing in all its bearings the problems in connexion with this important question of currency and exchange that have arisen since the war. We have never had such an opportunity for discussion. As Senator Duncan believes, and as 1 and other honorable senators think, it may be said of every one, whether inside or outside of the Customs Department, that in regard to this currency matter “ ‘e dunno where e are”. A great deal of time has been given by students to this subject, and libraries everywhere throughout the British Empire and the world have been stocking and storing works by various writers upon this complicated subject. I refer honorable senators to certain comments that have appeared in that well-known critical journal The Nation and The Athenæum, in April of this year. In an article dealing with three books - Foreign Exchange, by T. E. Gregory; The. World’s Monetary Problems, by Gustav Cassel; and War and National Finance, by R. M. Brand - there appears this statement in the opening paragraph -

Although so much of our business and our livelihood depends upon the terms on which we buy and sell abroad, very little attention has hitherto been paid,’ even by practical bonkers, much less by traders, to the laws which regulate their buying and selling. Now suddenly the fluctuations of the exchanges have become a topic of general conversation, and every one is supposed to be interested in this subject. But it is easier to talk about than to understand.

Then the writer proceeds to review seriatim the works I have referred to. Now, that is exactly the position in which honorable senators stand, - and that, too, is the position in which traders and the general public stand in relation to this problem. I venture to say, also, that even officers of the Customs Department and members of ‘the Tariff Board are in a like position.

Senator Fairbairn:

– It is about as complicated as Einstein’s theory of relativity.

Senator KEATING:

– Exactly. It may be very easy to talk about, but most difficult to understand. That is why I am objecting to this proposed remedy for trouble that we brought upon ourselves and the community generally by the parent Act. Since our Act was passed, other countries have applied themselves to the solution of this problem, and they overcame the difficulty, apparently, without having anything like the complicated system or methods that we have adopted.

I have said that neutral countries will be hit severely by this portion of the Act. It was pointed out in Committee that the provisions in clause 4 were specially intended to apply to Germany, because that is the only country with, at present, a currency that has depreciated below one-twelfth its normal exchange rate. But other countries may, in the future, be confronted with difficulties resulting in fluctuating exchanges. For instance, Italy’s exchange may depreciate below one-twelfth, and the same may be said of France and Belgium. Although these countries were our Allies in the late war, we shall be forced by this measure to confine our trade relationships with countries where the prices are relatively high. To what purpose? I will requote what I quoted when speaking on the parent Act last year. I quoted then from an article in The Nation and The A thenalum of the previous year, and dealing with the British Act. But these are my own words -

We have a notable instance in what was taking place until the High Court, by its decision, declared that the nay in which the value for duty of goods coming from continental countries was calculated was illegal and invalid.

That in itself shows the disposition of the Minister and the Department of Trade and Customs towards this question of exchange value.

Then I quoted this from the Athenæum article of the previous April - that is, of 1921-

But the worst entanglements are contained in the provisions for a discriminative Tariff

Against countries with a bad exchange. We are to be confined in our foreign purchases to countries to which we must pay dear, because their exchange is better than ours. Upon that extract I commented in these words -

That would be the effect of this proposal. We should be confined to the importation of goods from countries where we nave to pay dearly, because their exchange is better than ours, fend prevented from _ importing from countries whose exchange is not so good as ours.

Then I returned to the article, and quoted this further passage -

We may buy freely from America, Sweden, Holland, and Switzerland, but not from our European war Allies. We are to discriminate against France, Italy, and Belgium, because, aa a result of their war efforts, they are left in a bad financial condition, and to give preferential . treatment to the neutral countries who kept out of the war, and to America, who entered late and sustained least damage.

If the fluctuations of exchange depreciate the currencies of France, Italy, or Belgium below one-twelfth the normalrate, the provisions of this amending Bill will apply very unjustly. The article to which I referred last year, dealing with the English proposals on the same subject, stated further -

Even within our Empire we are to favour Canada and India as against Australia.

My own comments upon the measure with which we were then dealing were to this effect -

We passed a measure last night in regard to our war indebtedness to Great Britain, and that indebtedness indirectly brings us into the position of being debtors with Great Britain to the United States of America, and creditors with Great Britain of France, Italy, and other European countries whose exchange for the time being is depreciated. The effect of this policy will be to discourage us from dealing with our debtors and to encourage us ito deal with our creditors, whereby our indebtedness will be increased.

I returned to, and quoted further from the article thus -

Now the supreme folly of this procedure is that it makes for a general worsening of the bad and fluctuating exchange. For it stops the only really practical method by which countries with depreciated exchange can improve that exchange, namely, by selling abroad as much as possible to countries with better exchange. If we really wanted to help the financially broken countries of Europe, including our Allies, on to their legs again, we should receive on the easiest terms all the goods they were’ able to sell us.’ For the favorable balance of trade they would thus effect would react at. once in an improvement of their exchange. The policy our Government proposes to adopt will aggravate the trouble for the continental countries, and will prevent any further recovery of our own dollar exchange. But the other defect is even more fatal to the policy. A Tariff applied equally to all foreign countries might at least be effective in achieving its object of keeping out the goods our consumers wished to buy, and of substituting English products - for foreign ones. But this Tariff will not do this. It will make us buy Dutch, Swedish, Swiss, and American goods instead of German, French, Belgian, and Italian. For these former countries will only send us not only their usual quota of export goods, but a greatly enlarged amount, recouping themselves for their own national consumption by goods imported from those countries whose produce we exclude by our taxation. Sweden will- send us, not only the paper she has been previously sending, but the paper which Norway (taxed for bad exchanges) will cease to send us, or, what comes to the same thing, will consume Norwegian paper herself, and send us all her own supply. No scrutiny into origins can deal effectively with such evident advantages of substitution, though it can create an expansive and irritating official machinery for trying to do so.

My words last year fell upon unlistening ears, and the Bill was passed, after two divisions. Although I declared that that measure would not achieve its object, no notice was taken of my remarks. I am against this amending Bill. It is only so much patchwork, and it would add to the confusion of the importer, the community, the Department, and the Tariff Board. The only way by which we can get rid of this obnoxious system is to refuse to pass the present Bill.

When the French Mission visited Australia it was suggested that, in the interests of both countries, closer trade relationships should be established.

Senator Fairbairn:

– Would France suffer under the present proposal?

Senator KEATING:

– It would if its exchange rate fluctuated to the necessary extent. France has been our Ally, and we should not do anything to antagonize that country. It is desirable that the entente cordiale should be maintained.

Senator Foll:

– Is the French exchange rate likely to depreciate to such an extent if France remains an Ally of Great Britain ?

Senator KEATING:

– It is impossible to say. I do not consider for a moment that there .is any finality about the present proposal. The Bill is so complicated and far-reaching in its effects that we should not be asked to consider it in the closing hours of the session. It may be argued that the conditions in the other Chamber have prevented the earlier introduction of the Bill, but I do not think the Senate would be justified in agreeing to the measure without adequate consideration of it. Since lust session I have observed that France, in its efforts to re-establish its manufacturing and other industries, has attempted to get some entry for its goods into different parts of the British Empire. British Guiana was approached by France with regard to the way in which French goods were valued for the purpose of import duties, and the Legislature there has adopted what seems to me to be a very reasonable method of calculation. It lakes the value of the goods as they were actually and bond fide sold in France, in French currency, and it converts that value into English sterling on the day of the arrival in British Guiana of the vessel carrying the goods.

Senator Garling:

– Will not the value be converted under this Bill?

Senator KEATING:

– Yes, but it makes additional provisions.

Canada has legislated very simply, and it certainly has .adopted a much better system than we have .in Australia. The Canadian Act is referred to in detail in the Industrial Australian and Miming Standard of 14th September, 1922, at page 463, under the heading, “ Canadian Anti-Dumping Laws.” The article reads -

The Customs Act of Canada has beer amended to deal with attempted dumping of foreign goods. Section 2 of the present Act provides that in the case of importations _ of goods the manufacture or produce of a foreign country, the currency of which is substantially depreciated, the value for duty shall not be less than the value that would be placed on similar goods manufactured or produced in the United Kingdom and imported from that country, if such similar goods are made or produced there. If similar goods are not made or produced in the United Kingdom the value for duty shall not be less than the value of similar goods made or produced in any European country, the currency of which is not substantially depreciated. The Minister of Customs and Excise may determine the value of such goods, and the value so determined shall, until otherwise provided, be the value upon which the duty on such goods shall %e computed and levied under regulations prescribed by the Minister.

Senator Earle:

– What is the virtue of that over the Bill before us?

Senator KEATING:

– It is clear, but in’ the present Bill there is no “certainty. I know of instances where neither the Department nor the Board knows what the value and the duty will be.

Senator Garling:

– The Minister here knows what the ratio of exchange is from day to day.

Senator KEATING:

– If he is to rest on the ratio of exchange, there ia no necessity for the Bill at all. Let the Government follow out the principle laid down by the High Court in the case of Goode- and Co. The journal to which I have already referred has the following comment on the Canadian measure :: -

A notice issued by the Dominion Department of Customs and Excise authorizes Collectors of Customs to accept the present authorized certificate showing relative value in standard currency of paper currency of invoices until 1st October, 1022, after which date all invoices affected by the above section shall bear thereon or attached thereto a currency certificate of a Consul, Canadian Trade Commissioner, or bank, in the following form: -

Our present system is full of uncertainties for everybody, and a much better method could be adopted, on the lines followed in Canada and British Guiana, to effectually protect .the local producer or manufacturer against dumping, and to make the import trade, and the public generally, much more certain than at present, so that those interested would know exactly what they were doing. At present, they do not know what position they are in, and when a decision is finally given, they cannot challenge it: I appeal to the Senate for something more reasonable than the present proposal, and something that those peculiarly affected by the Act will be able to understand.

Senator Vardon:

– Would you say that the currency of France has “ substantially depreciated “ ?

Senator KEATING:

– That term is used in the Canadian Act; but not in ours, and is probably defined.

Senator Foll:

– is it likely that the Act would apply where the manufacturer of a particular article only supplies a small portion of the total quantity used?

Senator KEATING:

– I think so. I have a case before me where it would apply. The importer asserts that there is no local manufacturer, buthe is confronted with the fact that the importation is held up because the Anti-Dumping Act would apply. When he asks for the amount of value and duty, the reply he receives is, “ We do not know.”

Senator EARLE:
Tasmania · NAT

.- I think Senator Keating has strongly substantiated the wisdom of the quotation he has made, showing that it is very much easier to talk about this matter than to understand it. I would not be so foolish as to suggest that I understand all the effects of the depreciation and appreciation of foreign exchanges, and I do not understand all the ramifications of trade where efforts are being made, and successfully made, to deal with those people who not only come into unfair competition with the manufacturers of Australia,but also avoid contributing a fair share to the revenue, as honest traders have to do. These are questions with which the expert officers of the Crown have to deal. I think we are all satisfied on one point: we desire to protect our Australian industries against the cheap goods, particularly, of foreign countries, where those cheap goods come into Australia through a desire to dispose of surplus stocks, or through the depreciation of the exchange rate in Germany. We are absolutely sound- on that policy. All I can say is that the expert officers of the Crown devised this system as the best possible to meet the difficulty. The honorable senator who last spoke suggested that we were somewhat behind other nations; but he is quite wrong, because all countries are faced with the same difficulty. Even countries that have partlyFree Trade are up against the same problem. Canada is now preparing a new system.

Senator Keating:

– It is Canada’s new system that I was referring to, and it came into operation on 1st October, 1922.

Senator EARLE:

– The system under which Canada is operating, I am informed, has proved an utter failure.

Senator Keating:

– Your Department must be slow; it is not up-to-date.

Senator EARLE:

– Canada has now devised a new system, and even if Senator Keating’s contention is correct, I certainly fail to see a very great difference between it and that provided in this Bill. If we refuse to give the officers of the Department the power which they say is necessary to protect our industries, Parliament must take the full responsibility. The Government, on the advice of the departmental officers, have taken necessary and effective steps to protect our industries, and have presented this measure to Parliament in the belief that it will do what is required. I have been advised by those whose duty it is to know that if this Bill does not become law, many Australian industries will be thrown into a state of chaos in the near future. I cannot do more than leave the matter in the hands of honorable senators and place upon their shoulders the responsibility of saying whether this shall orshall not be. the means of dealing with a very complex question.

Question - That the Bill be now read a third time - put. The Senate divided.

AYES: 16

NOES: 7

Majority . . . . 9

AYES

NOES

Question so resolved in the affirmative.

Bill read a third time.

page 3120

IRON AND STEEL PRODUCTS BOUNTY BILL

In Committee (Consideration resumed from 3rd October, vide page 3033) :

Clause 8 -

If, after inquiry and report by the Tariff Board, the Minister is of opinion that the manufacturer of any goods on which bounty is payable under this Act is not selling those goods at a reasonable price, having regard to the fact that bounty on those goods is provided by this Act, the Minister may withhold payment of the bounty or so much thereof as he thinks fit.

Senator GARLING:
New South Wales

– This clause purports to permit the Minister, with the assistance of the Tariff Board, to determine what is a reasonable price.

Senator Earle:

– Upon which a bounty will be paid.

Senator GARLING:

-Yes. It is altogether too wide a power to confer upon the Minister and the Tariff Board, and is a power which Parliament should exercise.

Senator Pearce:

– How could it?

Senator GARLING:

– I shall show presently by means of an amendment I propose moving. Parliament exercised the power of determining what was a reasonable price in measures passed yesterday, and also last year. I object on principle to price-fixing at all, but a bounty is paid to insure that the manufacturers shall by that means receive what they are losing in the matter of duty. As we have decided to impinge largely upon sound economic methods in introducing what are really anomalies in the way of bounties where we have hitherto been in the habit of imposing a duty, wehave to go a little further and endeavour to provide that the public shall also be protected. That is the object of fixing a reasonable price. The people are going to pay the bounty, and this is a means by which they may secure goods at a reasonable figure. If Parliament can determine the amount of bounty to be paid, in place of the duty which was formerly imposed, it should take upon itself the obligation of fixing a reasonable price. What will be a reasonable price will be largely this: If the manufacturer receives the cost of production, plus a reasonable amount of profit, upon the manufacturing costs of the particular goods, he is getting all that he should require, inasmuch as he is receiving a bounty in place of a duty, and he should, therefore, be content to accept as the selling price of any particular article its cost price, plus a reasonable amount to represent his profit.

Senator Senior:

– What is that?

Senator GARLING:

– I suggest that a reasonable profit should not exceed 20 per cent. on the manufactured cost of a particular article.

Senator Earle:

– To cover profit and interest on capital?

Senator GARLING:

– To cover everything, in addition to the cost of production. If we wish to determine what is the reaonable price of goods in Great Britain for admission to this country it is determined upon that basis, but the allowance in such instance, in addition to the cost price, is only 5 per cent. That is too low a figure for present purposes. I move -

That the following new sub-clause be added : - “ (2) In this section, ‘ a reasonable price ‘ means such a price as represents the cost of production of the goods, plus such addition, not exceeding 20 per centum, as is determined by the Minister after inquiry and report by the Tariff Board, less the amount of the bounty payable on such goods.”

Senator Earle:

– Twenty per cent. levied on the cost of the goods?

Senator GARLING:

– Yes. As we have been able to fix a reasonable price for goods in other Acts, there should be nothing to prevent us doing so in this instance. If we allow up to 20 per cent. as profit on the cost of production, we shall be sufficiently conserving the interests of the manufacturer, and at the same time protecting the general consumer.

Senator EARLE:
VicePresident of the Executive Council · Tasmania · NAT

– I would ask Senator Garling not to press his amendment, because I think that, after all, he would find that his effort to make a fixed price mandatory would be futile. It is quite evident that the closest inquiry into the manufacture of any one of these articles could not reveal the actual cost to the manufacturer of that particular branch of his business. The things with which we are dealing, such as wire, wire netting, galvanized iron, and tractors, would probably be only one branch of production carried on by, probably, a very large organization. It would cost the Department an enormous amount of time, and, indeed, money, to make anything like a comprehensive inquiry into the actual cost of production in any one branch of a business, unless the manufacturer was prepared to place his cards on the table and disclose the cost. We have a right to look for a fair deal from the manufacturer, considering that we are paying a bounty to him. The Administration, which will really be the Tariff Board, which will advise the Minister, requires the greatest latitude, so that it can use every possible effort to ascertain whether reasonable prices are being charged to the consumers.

Senator Vardon:

– Might not the Tariff Board consider that 10 per cent. was a reasonable profit?

Senator EARLE:

– Very likely they would. They would probably inquire as to what price the articles could be im- ported for if there was no duty, and they would ascertain what they could be imported for if the original duty was still on. If the manufacturers were charging 20 or 30 per cent, more than that, the Board would naturally say that it was an exorbitant price. The manufacturers would be told that they were getting all this profit from the consumers, and were not entitled to any bounty. If we were to attempt to fix a price estimated on the cost of production, plus a percentage of 20, the difficulty would be, in the first place, in ascertaining the actual cost of production. We should run into considerable difficulties there. If the clause is allowed to remain as it is, and the Minister has power, on the recommendation of the Tariff Board after consideration, to refuse to pay the bounty, or a portion of it, because the manufacturer is charging too much for his goods, we shall have a better chance of compelling the manufacturers to act fairly than if we carry the amendment.

Senator Senior:

– The difficulty is that we cannot determine what “ too much “ is.

Senator EARLE:

– That is quite true, but that is what the amendment proposes to do. We are proposing to keep these industries in Australia by replacing, in the form of a bounty, that which we are taking off in the form of a duty. If through lack of importations, or the possibility of importations, some manufacturer is able to charge an exorbitant price, then the Minister, advised to that effect after mature consideration by the Board, would undoubtedly be in a position to say, “ I am not going to add to your enormous profits by paying you this ^bounty. ‘’ If after consideration he found that the amount of bounty set forth in the schedule was too much, he could decide to pay portion of it. I appeal to Senator Garling not to press the amendment. If he does so, I must ask honorable senators to vote against it. 1 think the clause, as drafted, is more likely to insure fair and equitable administration of the Act than any effort in the direction of fixing the profit by Statute.

Senator PAYNE:
Tasmania

.- The object of the Bill is to insure, especially to the rural portion of the community, supplies of goods which are absolutely necessary to them, at the lowest possible rate. The ‘Bill would absolutely fail in its object if the clause were eliminated or amended in the direction suggested by Senator Garling. I think every honorable senator will agree with me that it is essential to have in the Bill a clause of this character, in order to obviate the possibility of manufacturers taking advantage of the bounty to increase their prices. Senator Garling, with the very best motives no doubt, seeks to, make an amendment of the clause, which, if earned, would unduly penalize the rural producer. The honorable senator suggests that the manufacturer should be allowed a margin of 20 per cent., less the amount of the bounty, after providing for all the costs of production. Suppose the bounty amounted to 3 per cent., it would mean that the manufacturer would be assured for all time of a profit of 17 per cent., whereas, in all probability, lie would be prepared to accept 10 or 12 per cent.

Senator Garling:

– My proposal says, “ not exceeding 20 per cent.”

Senator PAYNE:

– If we said “not exceeding 20 per cent.,” that percentage would become the standard. If we fixed a price we would not be able to get any manufacturer to sell his product at less than that price.

Senator Elliott:

– What about outside competition ?

Senator PAYNE:

– Notwithstanding all the competition that is supposed to exist in Australia, prices do not come down. Notwithstanding the enormous number of distributing houses that exist in this city, prices remain high. I have come to the conclusion that competition does not bring down prices. I used to have an idea that it did. I believe that excessive competition may so restrict output and increase the overhead expenses of individual competitors that they may have to secure a higher rate of profit in order to cover themselves. I feel quite satisfied that Senator Garling’s amendment will have the opposite effect from that which he expects.

Senator DE LARGIE (Western Australia) T5.27]. - The difficulty of regulating prices, as Senator Garling proposes to do, is very great. After our experience of the results of our priceregulation legislation of a few years. ago, we should need no other warning that we ought to be sure df our ground before attempting to legislate again in that direction. Whilst we know reasonably well the prices of the ordinary commodities of life, there are other things the price of which it as not so easy for us to fix. We are dealing with such things in this Bill,. Who can tell what the cost of a tractor should be? Who can forecast the probable fluctuations that may take place in the iron trade, and which may affect wire netting, galvanized iron, and other articles? The cost of production must change, for we are in a transition period. We know that commodities connected with the iron wade must come down in price. They have done so after every great war we have ever had, and the wonder is that they have remained so high in this country up to the present time. In other countries there is a downward tendency of a very radical kind, and we must expect it to continue and affect the market in Australia. Therefore, how can we say whether we should fix 10 per cent., 15 per cent., or 20 per cent, as a reasonable margin of profit? Unless Senator Garling can give me an assurance that he hae some knowledge of the working of these trades and of the cost of the commodities we are dealing with, I cannot follow him in any lead he may give in the direction of fixing prices. We_ may possibly in the near future have occasion to reduce the bounties because they may be found to be too high. When we consider the total cost of pro>duction, £2 10s. or £3 8s. per ton represents a very high bounty. The bounties proposed! in respect of tractors run from £40 to £90. So far as I can learn the tractor likely to be most in favour will be a 25 horse-power machine, the bounty for which is to be £70. That is a very generous and liberal bounty. We may see tractors turned out in Australia for little more than double that amount. We know how enormous have been the reductions in the cost of building motor cars. If we have a big company established here with the control of a large amount of capital and under the management of a man with the brains of a Ford, we may look for radical reductions in the cost of production of these articles. A bounty of £70 for a tractor may be reasonable to-day, but in a very little time it might be found to be altogether too much to pay. In my view it would be a very great mistake to attempt at this time to fix the prices of the articles.

Senator ELLIOTT:
Victoria

.- The statement of the Minister (Senator Earle) as to the difficulties surrounding this matter completely justifies my criticism when he introduced the previous Bill repealing the ‘ duties ou articles corresponding with those dealt with by this measure. It was said that manufacturers were quite satisfied that the provision being made for the payment of bounties would recompense them for what they would lose by the repeal of the duties. We are to have an inquiry by the Tariff Board into all these industries. That will result in the creation of another huge Government Department whose duty it will be to conduct inquisitorial investigations into the affairs of manufacturers.

Senator de Largie:

– The honorable senator must admit that the Tariff Board has justified’ its existence up to the present.

Senator ELLIOTT:

– The Tariff Board has done; nothing in this line so far. When we were asked to repeal the duties which were originally passed to assist the industries, it was represented to us that the measure now under consideration would place manufacturers in as good a position as they would be in if the duties were retained. That promise has not been fulfilled. It is proposed under this measure that manufacturers endeavouring with the utmost difficulty to establish new industries shall be subjected to harassing conditions, instead of being able to rely upon a simple Customs duty which would preserve to them their home market. They cannot .participate in the bounty proposed to be paid under this Bill without disclosing all the particulars of their business to the Tariff Board. We do not know what experience the members of the Board have had in the conduct of such businesses as these, still they are to be given the arbitrary power of saying what is, or is not, a reasonable profit. Last year we were, time and again, reminded that the people in Flinderslane were profiteers. We were . told that they were making huge and unjustifiable profits, but the same people to-day are suffering huge losses. Suppose that last year, or in previous years, power had been given to a Government Department to see that these people made no more than a small profit in the conduct of their business, what would be their position to-day? If they had been subjected to interference of this kind during their profitable years they must have failed altogether. The people to whom I refer are carrying on an ordinary importing business, the conduct of which is comparatively simple compared to the conduct of a manufacturing business. The proposed inquisitorial interference with manufacturing industries in this country cannot result otherwise than in absolute failure. If we had had this measure before us when we were considering the other Bill proposing the repeal of duties, I am satisfied that honorable senators would have determined to reject both, and maintain the system of protecting these industries through the Tariff.

Senator Earle:

– Surely the honorable senator is in favour of reducing the cost of these articles to rural producers? There is no other way in which that can be done.

Senator ELLIOTT:

– It might be done by subsidizing the rural producers themselves in the way in which those engaged in the meat industry have been subsidized. I do not know how the Minister can expect any one to embark in these manufacturing industries if they are to be burdened with the harassing conditions1 proposed by this Bill.

Senator GARLING:
New South Wales

– I should like to say that the very process which I have suggested to arrive at the cost of production will have to be followed by the Minister and the Tariff Board if the clause is passed as it stands. So that the objection raised to my amendment on that account fails. As, however, no good object can be served by pressing the amendment when a majority of honorable senators are not in favour of it, I ask leave to withdraw it.

Amendment, by leave, withdrawn.

Senator LYNCH:
Western Australia

– No doubt the intention of the Government in this matter is good, but it remains tobe seen whether the Bill is constitutional or not. Parliament, some years ago, was moved by a good intention toregulate hours of labour and rates of pay by the imposition of an Excise duty, but we found when the High Court was appealed to that that legislation was invalid.

Senator Pearce:

– In that case we were taking money from some one. This is a case in which we give money, and we can attach what conditions we please to the gift.

Senator LYNCH:

– This is the converse of the measure to which I have referred, but it may still be regarded as unconstitutional. Whether we have the power to pay money out under certain conditions for the purpose of fixing the price of commodities is a question the constitutionality of which has yet to be determined.

Senator de Largie:

– The manufacturers are not likely to raise that question.

Senator LYNCH:

– I can readily imagine circumstances under which the question might be tested. The exercise of this power may give rise to anomalies in connexion with manufacture which may lead to the testing of the question. I submit the instance of two factories side by side - A and B. Factory A is engaged in the manufacture of goods enjoying protection under the Customs Tariff. Factory B is engaged in the manufacture of goods on which bounties are paid. The proprietors of factory A, depending for their protection on a Customs duty, may charge any price they please for the goods they manufacture, up to 100 on 500 per cent. in excess of the cost of production. The proprietors of factory B, on the other hand, producing goods which are protected by bounties, will be restricted under this Bill as to the price which they can charge for their goods. The owners of the bounty-fed factory, suffering from this differentiation, may be induced to test the validity of the law.

Senator Earle:

– There is not the slightest doubt about the constitutionality of this measure.

Senator LYNCH:

– On grounds of polity, my objection to the measure remains. If we are to believe what has been said in the past, protected industries will never take advantage of the protection they enjoy to charge exorbitant prices for their manufactures.

Senator Foll:

– Who told the honorable senator that?

Senator LYNCH:

– I am glad to have the statement retracted by the honorable senator and by the Minister in charge of this Bill (Senator Earle). I intended to remind honorable senators that clause 8 of the Bill is itself a contradiction of the contention to which I have referred, and which, we are now to understand has been withdrawn. I am supporting the measure because I believe that those who will derive advantage under it will fear to lose that advantage by charging exorbitant prices for the goods they produce.

Senator FOLL:
Queensland

– The objection urged by Senator Lynch supplies the principal reason for the establishment of the Tariff Board. One of its chief duties is to see that the Tariff is not exploited by charges of 500 per cent, in excess of cost of production, as the honorable senator suggests. If any manufacturer is permitted to exploit the Tariff to such an extent the Tariff Board will not be doing its duty. It was called into existence in order to regulate profits and prevent the exploitation of Customs duties by manufacturers.

Clause agreed to.

Clause 9 -

If the net profits of any person, firm, or company claiming bounty under this Act exceed, in any year, fifteen per centum on the capital employed in the business, the Minister may, after inquiry and report by the Tariff Board, withhold so much of the bounty payable as will reduce the net profits for that year to fifteen per centum on the capital employed in the business.

Senator FOLL:
Queensland

.- I see one objection to this clause. It proposes that the net profit of any person, firm, or company claiming bounties must not exceed 15 per cent. I want to point out that there may be some firms whose manufacture of the goods upon which1 bounty is to be paid may represent but a very small proportion of their total output. Some amendment of the clause is necessary to make it clear that the 15 per cent, has reference only to the production of goods for which the bounty is to be paid.

Senator Earle:

– That is the intention of the clause.

Senator FOLL:

– Unless the Minister is prepared to accept an amendment to the clause, I think it ought to be postponed and, if necessary, re-drafted.

Senator EARLE:
VicePresident of the Executive Council · Tasmania · NAT

– I hope the honorable senator will not persist in his request for the postponement of the clause. The officer responsible for its drafting considers that it will not bear the interpretation placed upon it by Senator Foll. I recognise that the clause is capable of a wider in terpretation, but no action will be taken in regard to this matter, except upon recommendation, after inquiry, by the Tariff Board, and I remind honorable senators that the Board will take a practical view of the situation. If, for example, a manufacturer is engaged in the manufacturing of wire netting, and a hundred and one different commodities, and if his business capital is £100 ,’000, consideration will only be had to the amount of capital applied to the business of manufacturing wire netting. The clause is elastic. It can do no harm,’ but, on the contrary, it may be a valuable safeguard in connexion with the expenditure of public money.

Senator MacDONALD:
Queensland

– I had intended to reserve any remarks I wished to make in Committee until clause 10 was under review, but I cannot help expressing surprise at the Minister’s statement that the word “may” is permissive, particularly after the impression I obtained yesterday, when, by way of interjection while Senator Duncan was speaking, I asked the honorable senator, referring then to another clause, whether he would not prefer the clause to be made mandatory. I understood then that the word “may” was regarded by the Minister as mandatory, but now we are told that it is permissive. If this clause is permissive, I suggest that the same view must be taken of the preceding and following clauses. It is unwise to place too much power in the hands of the Minister or the heads of the Departments.

Senator Senior:

– The profits may have been made on the manufacture of articles other than those for which bounty may be claimed.

Senator MacDONALD:

– There is some doubt as to the interpretation of the clause. Yesterday we were told by the Minister that the word “ business “ referred to the whole of a business, and not merely to that section of a business engaged in manufacturing commodities upon which bounty will be paid.

Senator Earle:

– Surely not. I never said anything of the kind.

Senator Russell:

– The High Court has already decided that the word “ may” means “ shall.”

Senator MacDONALD:

– That makes confusion worse confounded. We have just been told that the clause is permissive.. Iri order to make the position, clear, I move -

That the word “ may “ be left out with a view to insert in lieu thereof the word “ shall.”

Senator EARLE:
VicePresident of the Executive Council · Tasmania · NAT

– After further examining the clause, I am satisfied that the interpretation placed upon it by the officer responsible for ite drafting is correct, and that, where a manufacturer is carrying on a joint enterprise, that is to say, manufacturing several articles, including those upon which the bounty may be paid, the whole of the capital invested in his. business will not be taken into account, but. only that portion of it required for the manufacture of articles that come under this Bill.

Senator Foll:

– The clause does not say so.

Senator EARLE:

– I think it does. I think honorable senators will agree that my interpretation is a reasonable one. Then there is an additional safeguard, requiring first an inquiry and recommendation by the Tariff Board, and then the decision of the Minister as to whether it would be equitable in the circumstances to withhold any portion of the bounty claimed. I have some recollection that the High Court did, as Senator Russell has remarked, interpret the word “may” as being mandatory.

Senator Pearce:

– That was in connexion with a section of the Electoral Act,

Senator EARLE:

– It would, I think, depend upon circumstances whether the word “may” was to be regarded as permissive or mandatory.

Senator Garling:

– In this clause it is permissive.

Senator EARLE:

– I agree with the honorable senator, and I think it is desirable that it should be so, because there will then be a better chance of equitable administration.

Senator GARLING:
New South Wales

– I rise to support Senator Foll. There is not the slightest doubt, in my mind, as to the meaning of this clause. I regard it as the most iniquitous in the Bill.

The TEMPORARY CHAIRMAN (Senator Buzacott:
WESTERN AUSTRALIA

– The honorable senator must confine himself to the amendment before the Chair. He will have an opportunity to speak on that matter later.

Senator GARLING:

– In regard to- the amendment proposed by Senator Mae Donald, I agree- with the Minister that the power should be permissive and not mandatory, and that the Minister should act on the- advice of the Tariff Board.

Amendment, by leave, withdrawn.

Senator GARLING:
New South Wales

– The amendment having been temporarily withdrawn, I now have the right to consider the clause as it stands. It is really a blot on the Bill.. It is the one clause that I intended from the first to criticise. The meaning is so plain that he who runs may read. It is obvious, that the clause applies where the net profits of any person, firm, or company exceed 15 per cent, of the capital employed in the whole business, of that person, firm,, or company. I understand that Senator Foll has an amendment to submit that will make the intention of the clause clear.

Amendment (by Senator Foll) proposed -

That the words “ the business “, line 4, be left out with a view to insert in lieu thereof Mie words “ respect to the business in connexion with which bounty is payable

Senator PAYNE:

– I am afraid that the amendment will not meet the case.

Senator GARLING:
New South Wales

– It seems to me that this amendment will leave the clause almost as vague as it was before. If a large firm, like Anthony Horden’s showed more than 15 per cent, profit on the whole of its business, the clause might apply, because, for instance, they might be manufacturers of wire netting. The profit should be limited to’ that “ branch “ of the business. I do not, however, intend to press the matter to a division.

Amendment agreed to.

Senator MacDONALD:
Queensland

– I now move -

That the word “ may “, line 5, be left «ut with a view to insert in lieu thereof the- word “ shall “.

I intend to press this amendment. Hie clause should be so worded as to leave no doubt as to the Minister being required to do certain things. Personally, I am a Protectionist. I believe that our primary industries should not be squeezed out of existence, but at the same time I do not wish to see manufacturers put in a position that would enable them to exact an undue profit.

Senator Earle:

– I can only ask the honorable senator not to press the amendment.

Amendment negatived.

Clause further consequentially amended and agreed to.

Clause 10 -

  1. The Minister may make application to the President of the Commonwealth Court of Conciliation and Arbitration for a declaration as to what wages and conditions of employment are fair and reasonable for labour employed in the manufacture of fencing wire, galvanized sheets, traction engines, or wire netting.
Senator MacDONALD:
Queensland

– If anything, it is more important here even than in the preceding clause that the word “ shall “ be employed instead of the word “ may “. In this Bill there is protection for the manufacturers, and in a preceding measure we had consideration for the primary industries. I strongly maintain that there should be protection for the workers, and so that there can be no doubt, the clause should be mandatory instead of permissive. The Minister should be directed rather than permitted to take the action referred to. The first sub-clause says that the Minister “ may “ make application to the President of the Court, and the second subclause sets out that on the hearing and determination of the application the President shall do certain things. Later on, in sub-clause 4, we find that the Minister ‘’ may “ withhold the whole or any part of the bounty payable. I move -

That the word “may,” line 1, be left out with a view to insert in lieu thereof the word “shall “.

Senator GARLING:
New South Wales

– It would be utterly wrong to substitute the word “ shall “ for “ may,” which would mean that the Minister would be compelled to make application to the Court. We do not want the Minister continually approaching the President of the Arbitration Court, and I suggest that the positions of sub-clauses 1 and 3 should be reversed. In order to understand the possible effect of the use of the words “ may “ and “ shall “ we have to consider sub-clause 3, which reads -

Every person who claims the bounty payableunder this Act shall, in making his claim, certify to the Minister the conditions of employment and the rates of wages paid to any labour employed by him other than the labour of members ofhis family.

The Minister may then act upon his own knowledge, and agree that conditions are fair; but if he is not prepared to do so he has the alternative of going to the Arbitration Court, and we should, therefore, use the word’ “ may “ instead of “ shall.” Sub-clause 4 reads -

If the Minister finds that the rates of wages and conditions of employment or any of them - (a) are below the rates and conditions declared, as in the first sub-section of this section mentioned to be fair and reasonable; or (b) are below the standard rates and conditions of employment prescribed by the Com monwealth Court of Conciliation and Arbitration, or the determination of any State industrial authority, the Minister may withhold the whole or any part of the bounty.

The Minister may not necessarily agree with a particular award.

Senator MacDonald:

– It is giving too much power to the Department.

Senator GARLING:

– It would not be right to say that he “ shall “ withhold the bounty if he is satisfied that the person is not entitled to it, or to say that he “ shall “ take the matter before the Court, until he knows all the circumstances governing a particular case. I have other comments to make upon this particular provision, and if I can induce a majority of honorable senators to support my views, the whole clause will be broken up.

Amendment negatived.

Senator ELLIOTT:
Victoria

.- I cannot understand why this clause is introduced, because the employees, so far as I am aware, in any business likely to be affected by this measure are already protected by what I might term a whole regiment of Industrial Courts, Wages Boards, and Industrial Tribunals. What is the use, therefore,of the Minister holding another inquiry in order to decide whether the conditions are fair and reasonable ? It is going beyond even an absurdity, and I shall vote against the clause unless good reasons are adduced for retaining it.

Senator EARLE:
VicePresident of the Executive Council · Tasmania · NAT

– This clause is an exact reproduction of section 10 of the Iron and Steel Bounties Act of 1918, which is at present on the statute-book, and under which action has never been taken.

Senator Senior:

– Why re-enact it?

Senator EARLE:

– Because it is considered a reasonable safeguard in the interests of the men employed in an industry. Surely we have to give some consideration to such employees who are, like the rest ofus, taxpayers and contribute a portion of the bounty. It is only reasonable that attention should be given to theconditions of employment in the industries where the articles on which a bounty is paid are manufactured.

Senator Elliott:

– Although the conditions are already determined by Courts and Wages Boards?

Senator EARLE:

– Those who approach the Arbitration Court have no more interest in the business in which they are employed than to return to their employer a reasonable amount of labour for the remuneration they receive. In this case they have a further interest, because they not only have to earn the wages they receive in return for their labour, but as taxpayers contributing - the amount may be very small - towards the cost of producing the goods. If the Government, as representing the employees, undertake on behalf of the taxpayers to contribute by means of a bounty towards the cost of production, it is the duty of the Government to not only see that the consumers are protected, but to ascertain if the employees are also receiving fair treatment.

Senator Elliott:

-But we have provided all sorts of machinery for their protection in other directions.

Senator EARLE:

– There is no necessity for honorable senators to put up a fight against this clause, because we are merely inserting a provision to insure reasonable precaution, and, as I have said, a similar section is embodied in another Statute, and no fault has been found with it.

Senator Reid:

– Has action ever been taken under it?

Senator EARLE:

– No, but we should have it as a safeguard.

Senator GARLING:
New South Wales

– I need hardly inform the Minister (Senator Earle) that two wrongs do not make a right, but I agree with him that the object of this clause is to secure the rights of the working man, just as we protect the manufacturer to whom the bounty is paid and also the consumer. That is a principle with which I agree; but let me remind the Minister that, although he has mentioned that a similar provision is embodied in the Iron and Steel Bounties Act which was passed four years ago, he should really go back to 1901, when the first Customs Act was passed, because the same idea was in the minds of legislators, and a section was then proposed to insure that the manufacturers receiving the benefit of duties paid their workmen a reasonable wage. It was termed the new Protection.

Senator Fairbairn:

– But that has been overruled by the High Court.

Senator GARLING:

– It may have been, but Parliament has re-introduced the principle. Under that Act a provision was inserted so that the manufacturer who derived benefit from Protection should pay his employees a reasonable rate of wages, and because of the lack of any other machinery then to protect the employees. Since that time, however, other means have been provided, and even if that section was considered necessary then, it need not be repeated now. We have numerous Courts, Wages Boards, and Tribunals before which employees can appear if they are dissatisfied with the conditions under which they are working. My objection is not that the clause increases the protection given to the workmen - I would not oppose it because of that - but because it provides no less than four different ways for the Minister to arrive at what are fair and reasonable conditions, and no manufacturer will know the conditions which he will have to comply with in connexion with his trade until he applies for a bounty. First of all, the Minister has the right to decide as to whether the conditions are reasonable, and if he is not satisfied, and is not in a sufficiently strong position to enforce his decision, he can, as provided in sub-clause 1, approach the Commonwealth Court of Conciliation and Arbitration for a declaration, which may be given on a special application relating to that industry.

Senator Lynch:

– On whose application? .

Senator GARLING:

– On the application of the Minister, and the Court may then fix certain rates of wages and may make a declaration that certain conditions of labour are fair to apply to the particular industry in respect of which the claim is made. That may not satisfy the Minister, and he could, under the clause as drawn, go still further and say “I will apply the standard rates either of the

Federal Arbitration Court or of a State Court.” Such rates may be on a different basis altogether from what the Court might award as the result of a special application. It would be very humbugging to the manufacturer not to know the conditions with which he would have to comply.

Senator Elliott:

– Until he applies for a bounty.

Senator GARLING:

– Yes; the whole matter would be wrapped up in uncertainty, and we would be making confusion worse confounded. An employer may be carrying on industries other than those affected by particular bounties, and a workman may be employed partly in one branch of the business and partly in connexion with the manufacture of another product in respect of which a bounty would be payable. The employer is then worried as to whether the men are working under the proper conditions, and he would not know until his claim was submitted to the Minister whether the Minister would exercise authority in any one of the four directions open to him.

Sitting suspended from 6.30 to 8 p.m.

Senator GARLING:

– Before the dinner adjournment I was pointing out in reference to sub-clause 4 of clause 10, that having regard to the earlier sub-clauses, the Minister had practically four alternatives which he could propose for the purpose of fixing the rate of wages and conditions of employment. He may decide for himself whether or not they are correct; go to the Court of Conciliation and Arbitration, and get a special declaration; insist upon the observance of a certain standard fixed for general purposes by the Court of Conciliation and Arbitration ; or require that a certain State award shall apply. Those are not alternatives in the sense that theemployer is also permitted to satisfy the requirements of the section by claiming to come under any one of them, but the Minister could say, if the employer claimed to come under one of them, “ No, I am not satisfied with that. I require that you come in under another award.” The consequence would be that the employer would never know where he stood. With the National party in power, and with the present Minister there might not be much to fear, but looking to the possi bility, however remote it may be, of a party being in power which was utterly opposed to the capitalistic system; I cannot conceive of a scheme of harassment more effective than this section provides -

Senator Earle:

– If such a party were in power it could enact such a law.

Senator GARLING:

– We ought not to help them by placing this clause on the statute-book. I would like to point out that the draftsman has departed very radically from the provisions of nearly all the orevious bounties Acts. I had the curiosity to look up the old bounties Acts, and found that in connexion with the Bounties Manufacturers Encouragement Act 1908; the Shale Oil Bounties Act 1910; and the Sugar Bounty Act 1905- 10, we had a provision designed to protect the worker. It is a provision to insure that the industries concerned pay reasonable wages and observe proper conditions. But we find the provision in previous Acts so worded that there can be no objection to it. Take, for instance, the Manufacturers Encouragement Act 1908. In that Act it is provided that -

If the Minister finds that the rates of wages, or any of them, are -

below the standard rates prescribed by any Commonwealth or State industrial authority; or

in the absence of any such standard applicable to the case, are below the standard rates paid in the locality in which the goodsare manufactured; or

in the absence of any such standard rates respectively, are, on application by the Minister to the President of the Commonwealth Court of Conciliation and Arbitration, declared not to be fair and reasonable by him or by a Judge of the Supreme Court of a State or any person or persons who compose a State industrial authority to whom he may refer the matter, the Minister may withhold the whole or any part of the bounty payable.

I wish to direct special attention to the words. “ in the absence of any such standard.” Each of the paragraphs of the sub-section commences with those very important words. The result was that the manufacturer might show that he had been paying the standard rates of wages prescribed byany Commonwealth or State industrial authority, or, if there was no rate applicable to the case, that he was paying the standard rates in the locality. The alternative was with him, and rightly so ; but in the Bill now before the Senate the alternative is not with him, but is entirely with the Minister. The matter would not be determined until the claim for the bounty arose, and then he might be told that he was not applying the particular standard of which the Minister chose to approve. The Minister might, before I move any amendment, satisfy himself whether, in the drafting of the Bill, those very important words, “ in the absence of any such standard,” wereleft out purposely, or, as I think is the case, were omitted inadvertently.

Senator Earle:

– The Bill is exactly the same, in this particular, as the Iron and Steel Bounties Act 1918.

Senator GARLING:

– That is coming down to very modern times. Without casting reflections on . Parliament, or parliamentary draftsmanship, I think the draf tmanship of the Bills in the days to which I have referred compared more than favorably with the draftsmanship of modern times. I say this just as I would say that old conveyancing was better than modern conveyancing. In past times greater care was taken, and in the Bills which I have mentioned, care was taken to see that those essential conditions for safeguarding the rights of the individual were put in their proper place. If those words were inserted the section would then read -

If the Minister finds that the rate of wages and conditions of employment, or any of them, are below the standard rates and conditions of employment prescribed by the Commonwealth Court of Conciliation and Arbitration, or, in the absence of any such standard applicable to the case, are below the standard rates determined by any State industrial authority.

With those words included there would be nothing harmful in the clause.

Senator Earle:

– Does not the honorable senator see that all the powers given to the Minister in sub-clauses 1, 2, and 3 would not be exercised if the provisions referred to in paragraph b of sub-clause 4 were complied with. If there was an award of an Arbitration Court or a Wages Board, naturally the Minister could not take action, because, if it prevailed, he must pay the wages provided for under it.

Senator GARLING:

– Sub-section 3 says that “ every person who claims the bounty payable under this Act shall, in making his claim, certify to the Minister that conditions of employment and the rates of wages paid to any labour employed by him- “

Senator Earle:

– I would direct the honorable senator’s attention to subclause 4, which says that if the Minister finds that the rates of wages and conditions of employment -

  1. are below the rates and conditions declared, as in the first sub-section of this section mentioned, to be fair and reasonable; or
  2. are below the standard rates and conditions of employment prescribed by the Commonwealth Court of Conciliation and Arbitration, or the determination of any State industrial authority, he may withhold the bounty.
Senator GARLING:

– How is the employer to know which of the two standards the Minister will take? If we add the words “ in the absence of any such standard,” the rights of the employer would be safeguarded.

Senator Earle:

– If he is observing either of those standards he must be safe.

Senator GARLING:

– As the Bill is worded, it is optional for the Minister to choose any standard, and he need not choose it before the goods are manufactured, but may choose and state it when the application is made for the bounty. I propose to draft an amendment to meet the case, having regard to the provisions, in the old bounties Acts.

Senator EARLE:
VicePresident of the Executive Council · Tasmania · NAT

– I hope the honorable senator will not insist upon amending this clause. It appears to me that it is really more comprehensive than the clauses of the Acts to which he has referred. I believe the clause in the Iron and Steel Bounties Act 1918 was the result of more mature consideration than the clauses of the previous Acts. The outstanding fear in his mind is that there may come into power a Government which has a desire to harass the manufacturer by making stipulations which it would be almost impossible for him. to comply with. He seems to anticipate that some Administration may create difficulties. I cannot imagine for a moment that the electors of Australia would send in any other Administration than a National one for many decades, but even if they did, I cannot imagine any Administration elected by the people of Australia doing anything to prevent the development of the industries of this coun try. If a Minister, no matter who, so harassed the manufacturer as to make it impossible for him to carry on under this Bill, he would be ruining the industries of Australia. If such an Administration were in power it would only take them a matter of a few hours to enact legislation and obtain the power if they wanted it. The greatest protection possible must be given to the Government in handling the people’s money, so as to see that the money is equitably and fairly paid. I admit that the clause is elastic and that it gives considerable power to the Administration, but I recognise that although it may never be necessary to use it, the fact that it is in the Act will operate as a deterrent to those who are inclined to cause the exercise of it. I ask the Committee to retain the clause as it is. All the dangers that the honorable senator has anticipated would still exist, even if we amended the clause. Any such Administration as he fears could annex power prejudicial to the industries of Australia, and could maladminister this particular clause.

Senator GARLING:
New South Wales

– I will, perhaps, make the position more clear if I now suggest the amendments I propose to submit. I intend to propose that sub-clauses 1 and 2 be left out, that sub-clause 3 be made sub-clause l,and that sub-clause 4 be left out, with a view to inserting something in its place.

Senator Earle:

– Does the honorable senator propose to leave any part of the clause in?

Senator GARLING:

– I assure the Minister that I propose to leave in all that he will find necessary to secure what he desires, namely, that the manufacturer shall provide decent conditions and pay decent wages.

The TEMPORARY CHAIRMAN (Senator Buzacott:

– I point out to the honorable senator that the Committee has already decided that the word “may,” line 1,shall stand, and be will not be in order in submitting an amendment to any part of the clause prior to that.

Senator Pearce:

– The honorable senator might propose to leave out all the words after the word “ may,” with a view to inserting what he thinks should be inserted, and he can then explain to the Committee what his intention is.

Senator GARLING:

– I move-

That, in sub-clause (1), all the words after the word “ may “, line 1, be left out.

Senator LYNCH:
Western Australia

– We have been told by the Minister (Senator Earle) that a provision similar to this, which has found a place in previous Acts, has remained inoperative because there has been no necessity to put it into force. It has been held in terror over the heads of people who might offend. My chief objection to the clause is that it throws upon the Minister, or his subordinates, the duty of appearing in an Arbitration Court as suitors for the fixing of wages and conditions in the industries covered by the Bill. Those of us who have had experience in the industrial field can recall an overwhelming number of cases in which labour unions and their officers have had to go to immense trouble and to expense which has run into thousands of pounds, on occasions, in the effort to have reasonable wages and conditions applied to the industries in which they have been engaged. This measure represents but a very small part of the policy of the Government, and yet it proposes that the Minister shall step in to assist the employees in these particular industries and say to them, “I will see that proper wages and conditions are fixed for you.” That is not the province of the Government. If provisions of this kind have remained inoperative, it may be because they are contained in measures which were rushed through without sufficient consideration. We are now approaching the end of the session, and Bills will be rushed through this Chamber without the attention and consideration which should be given to every clause they contain.

Senator Pearce:

– That cannot be said of this measure.

Senator LYNCH:

– That has happened in the past, and the fact that we have passed provisions which have not been operative is an evidence that in passing them we did not foresee what would happen. All that is required in this case is that the Minister should insist on a certificate being furnished by every applicant for bounty that his industry is carried on under proper wages and conditions. If he does not supply such a certificate he should receive no bounty. The men employed in the mining industry in North Queensland, in Tasmania, and on the Golden Mile in Western Australia, had to go to infinite pains, trouble, and expense to secure the application to their industry of proper conditions and wages; but the men employed in the industries in Melbourne that are to derive benefit under this Bill are to be saved all that expense, trouble, and anxiety, by having proper wages and conditions fixed for them at the suit of the Minister. In my view it is unseemly that the Government should take up such a position. Every purpose which the clause is designed to serve would be met by a provision in this simple form -

Every person claiming bounty payable under this Act shall, in making his claim, certify to the Minister that the conditions of employment and rates of wages in his industry are those fixed by an Industrial Court of a State or of the Commonwealth.

That is, in one sentence, what is desired, and it would throw upon the claimant for bounty the responsibility of certifying that he observes fair wages and conditions. I shall, of course, vote for the clause, but it is a cumbersome and unnecessary method of achieving the object which the Government have in mind.

Senator ELLIOTT:
Victoria

.- The Minister (Senator Earle) quite failed to convince me of the necessity for this clause. Is he in a position to say that’ any of the industries covered by the Bill are not already regulated so far as wages and conditions are concerned by the award of any tribunal?

Senator Earle:

– If they are so regulated, the clause will not operate.

Senator ELLIOTT:

– If that be so, where is the necessity for the clause?

Senator Earle:

– Because some may not be so regulated.

Senator ELLIOTT:

– There are only four industries covered by the Bill, and surely the Minister is in a position to say whether any of them is not so regulated. I believe that the employees in these industries are more highly organized than are the employees of any other industries. There are Arbitration Court awards and Wages Board determinations covering every branch of these industries.

Senator Pearce:

– Some wire netting is made in gaol.

Senator ELLIOTT:

– If the industry is a State industry conducted under State regulations, this Bill will not apply to it.

Senator Pearce:

– State industries are not excluded.

Senator ELLIOTT:

– I see no reason why a State industry of this kind should not be encouraged by the payment of a bounty if that would enable a State to supply people with cheaper wire netting.

Senator Wilson:

– Does the honorable senator want more people ‘ ‘ run in “ t

Senator ELLIOTT:

– A State carrying on an industry of this kind might be given assistance in the way proposed by this Bill. The Minister has argued that if we strike out this clause a future Government desiring to impose unreasonable conditions will have no difficulty in doing so, but there is no reason why we should make their path smooth for them. There are certain influences at work in our community at the present time with the determination to put an end to the capitalistic system altogether.

Senator Pearce:

– There are also influences at work to put an end to the arbitration system.

Senator ELLIOTT:

– That is so. We have witnessed a succession of irritating strikes and “ go-slow “ tactics with the object of making it imposible to carry on certain industries. If a Government animated by such sentiments as the Minister has suggested were returned to power, there would be nothing to prevent them making use of this clause to further their objects to impose upon employers wages and conditions in their employment which they never contemplated at the time they embarked on their industry, and if we made any protest, they would be in a position’ to reply, ‘ There is your own Act, and we have merely administered it.” There is no necessity for this at all. Suppose a manufacturer is working under the conditions of a Wages Board, power is given to the Minister, notwithstanding, to have the matter brought before the Court for a new determination, and if the President of the Court declares that the conditions are not fair and reasonable, the Minister can nut the applicant out of the bounty altogether.

Senator MacDonald:

– You would have to give Parliament power if you wiped out this clause.

Senator ELLIOTT:

– Does the honorable senator contend that there are not already sufficient safeguards in our Statutes to provide that every workman shall be employed under fair and reasonable conditions?

Senator MACDONALD:

– I think this provision is necessary. We have given protection to the farmers and manufacturers, so it is only fair we should give protection to the workers.

Senator ELLIOTT:

– They are already provided for in every State of the Commonwealth, as the honorable senator very well knows. It seems to me that there is some ulterior motive at the back of this proposal. There is no need to j add to the protection already given to l the workman , under our many Acts. I shall support the amendment moved by Senator Garling.

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

– As I was the Minister who introduced the Steel Bounties Act, in which this provision first appeared, I can assure honorable senators that there are very good reasons for the alteration. It is a fact that to-day in most, if not all, the industries that will come under this Board there are Federal and State awards, but we must remember that this measure will operate over a number of years, and it may so happen that workers who to-day are under an award will not be so protected twelve months since.

Senator Vardon:

– That is hardly likely.

Senator PEARCE:

– It is quite likely. I remind the honorable senator that occasionally an award runs out, and for some reason or other no new award takes its place.

Senator Vardon:

– ‘Can you give us a single instance?

Senator PEARCE:

– I could give dozens of instances of cases. Honorable senators may pick up the Victorian Government Gazette, and almost every month they will notice that some particular trade is gazetted for a Wages Board. Trade operations are so diversified that sectional industries are being constantly established. Take, for instance, the industry of drawing wire. I doubt very much if those employed in that industry are under any award. If it should so happen that an industry is not operating under either a Federal or State award, sub-clause 1 of this clause will then become operative; not otherwise. This is no new principle. It has been in existence for many years, and the practice of the Department is to accept an award and pay the bounty under it. I ask honorable senators to consider the position that would be created if they struck out this clause. A determined effort is being made to abolish arbitration. Whatever view we may hold on that question, I think honorable senators will agree with me that this is not the place to decide that principle. If we are going to do away with arbitration, the proper action to take is to move for the repeal of the Arbitration Act - that is a straightforward way of doing it, not to attack the principle in this Bill. I warn Senator Garling that if we strike out this clause we shall find during the coming election that our action will be used to indicate that we are already commencing tq break down the principle of arbitration.

Senator Wilson:

– I cannot follow the Minister.

Senator PEARCE:

– I know enough of political tactics to realize that if we strike out this clause it will be urged during the election campaign that we seized upon this, the first measure that contains the principle of arbitration, to break is down. It may be that the clause is clumsily drafted, but it has been in our Acts for a number of years, and no harm has resulted from it up to date. It has been operated in one Act since 1918, and its substance is in other Acts. I put it to Senator Garling that it is not worth while, because of the draftsmanship, to take a risk by striking out this authority to give power to the Minister. Whilst a remark which I made about a prison industry when Senator Elliott was speaking may have been regarded as somewhat jocular, it is a fact that wire netting is made in one of our State prisons, and if this amendment were carried, I think wire netting made in State prisons would be entitled to claim the bounty, because State industries are not excluded.

Senator Elliott:

– Why exclude them ?

Senator PEARCE:

– Well, that would not be fair competition with other manufacturers, because prison labour is unpaid.

Senator Elliott:

– The object of the Bill is to provide cheap wire netting for the farmers.

Senator PEARCE:

– Yes ; but that is not the way to make cheap wire netting for the farmers, and, besides, the States would use that money for the reduction of expenditure on their gaols. I appeal to honorable senators that, if this clause is struck out, our action will probably be misinterpreted,. The clause can do no harm,, and it may do some good.

Senator GARLING:
New South Wales

– It is probable the Minister for Home and Territories (Senator Pearce) would not have referred to the possibility of electors misinterpreting the action of this Committee if this clause were struck out, had I not made the unfortunate mistake of not clearly indicating earlier what words I wish to have inserted. My amendment seeks to strike out all the words after “ The Minister may “, and to insert in their stead the words - if he thinks that the rates of wages and conditions .of employment in any of them are below the standard rates and conditions of employment prescribed by any Commonwealth or State authority, withhold the whole or any part of the bounty payable.

That clearly would be a recognition of Commonwealth or State authorities. I also propose to add the following subclause : -

Every person who claims the bounty shall, in making his claim, certify to the Minister (die conditions of employment and the rates of wages paid to any labour employed by him other .than the labour of members of his family.

If my amendment is accepted it will not impinge one iota upon the principle of the Arbitration Court fixing awards.

Senator Pearce:

– But, the honorable senator does not provide for any industry in which there may be no award.

Senator GARLING:

– If the Minister will withdraw the clause for the purpose of providing those safeguards that appear in the old bounties Acts, and make the provision operate as he said it was intended to operate, namely. in the absence of any other standard, I will not oppose the clause at all, even though it is a long and rambling one, and in some essentials unnecessary. It is not only the drafts^manship I am objecting to. It is the absence of material words which are intended to operate so as to aid .the employer as against the .arbitrary action of any Minister who may be in power, but who wild be helpless if those words are left out. If the Minister will agree to have the clause withdrawn to see whether the wends which have Deen, used in other

Acts over and over again cannot be reinserted, 1 would not press my amendment. I cannot understand the Minister refusing a simple suggestion which I made that words which this Parliament has seen fit to place in Acts over and over again should be put in this measure to remove any possibility of fear in the minds of legislators that the Minister desires to insure that he is to be top-dog, and able at his own sweet will to impose a cumulative series of harassing conditions, anyone of which, had they been complie’d with by the employer, would have ordinarily been regarded as fair conditions, but which would not have been in compliance with the particular standard that the Minister might choose under the power given to him in this clause, to bring in.

Senator EARLE:
VicePresident of the Executive Council · Tasmania · NAT

– There had better be a division on the amendment. , I realize that Senator Garling is earnest in his desire to improve the clause, and I would not doubt his ability to draft a .suitable provision if he had had the same opportunities for studying the present position as have the officers responsible for .the clause as printed. The clause represents the work of an expert draftsman, who has had the assistance of the officers administering the Department. After many years’ experience of the requirements of the Department, the clause has been deliberately framed, and it is not likely that Senator Garling can greatly improve upon it on the spur of the moment.

Senator Duncan:

– Is the Minister arguing that no alteration in drafstmanshi,p is desirable in any circumstances ?

Senator EARLE:

– No. This principle has been in operation for four years. I must resist the amendment.

Question - That the words proposed to be left out be left out - put. The Committee divided.

AYES: 5

NOES: 18

Majority . . . . 13

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Clause agreed to.

Clause11 -

No person shall -

obtain any bounty which is not payable;

obtain payment of the bounty by means of any false or misleading statement ; or

present to any officer doing duty in relation to this Act or the regulations, any document, or make to any suchofficer any statement, which is false in any particular.

Penalty :Five hundred pounds or imprisonment for twelve months.

Senator GARLING:
NewSouth Wales

– In the Meat Export Bounties Bill, passed some weeks ago, the penalty fixed was £100, as in the case of former bounties Acts. There should be some uniformity in these measures in regard tothe amount of the penalty. Is there any particular reason why, in this Bill, the penalty should be raised to £500 ?

Senator EARLE:
VicePresident of the Executive Council · Tasmania · NAT

– The explanation is simply that there is a great deal more money involved in connexion with this Bill than with former measures. As there is a possible inducement to do greater evil, the penalty is made higher to prevent that evil being done.

Senator PAYNE:
Tasmania

.- Will the Minister explain the necessity for paragraph a? Could any person possibly obtain the bounty, when it was not payable to him., without making a false or misleading statement? A bounty might be paid to an individual when it was not really payable, through an error on the part of the Department, and the recipient of the bounty might be regarded as having committed an offence.

Senator EARLE:
VicePresident of the Executive Council · Tasmania · NAT

– If paragraph a were likely to do any barm I would be prepared to see it deleted, but as it can do no harm, and may act as a safeguard against the wrongful expenditure of money, it ought to be retained. It is desirable to take every precaution to prevent the payment being made to persons to whom it is not due. I can see the possibility of the bounty being obtained without a false statement having been made, because by omitting to make a certain statement a person might lead the Department to the conclusion that he was entitled to the payment, knowing quite well that he was not entitled to it. I hope that the clause will not be disturbed.

Senator DUNCAN:
New South Wales

– Although I am not one of the legal luminaries of this Chamber, I believe that there is a loophole in this clause that may dead to difficulties later on in the practical working of the Act. A subsequent clause provides that a return shall be supplied each year, setting out the names of all persons to whom the bounty has been paid. The return might not contain the names of any individuals, because the payment might be made to public companies.

Senator Keating:

– That would be covered by the Acts Interpretation Act.

Senator DUNCAN:

– If not, there might besome difficulty in sheeting the responsibility home to individuals.

Senator Earle:

– What Senator Keating has said is perfectly correct.

Senator PAYNE:
Tasmania

.- I should not have risen but for the extraordinary statement of the Minister (Senator Earle) when I suggested that paragraph a was unnecessary. I can imagine a. person not conversant with the letter of the law applying for a bounty without having any intention whatever to defraud the Department. A person defrauding the officers of the Customs Department could only doso by making a false or misleading statement, and that is provided for in paragraphb. If it should happen that a person innocently obtained a bounty to which he was not entitled the Department has no alternative but to impose a very heavy penalty.

Senator Keating:

– A bounty may be sent through the post to a particular individual and may reach another person, who would retain it, and there would not be any false representation.

Senator PAYNE:

– Such a person would then be liable under another law.

Senator Keating:

– Under this, too.

Senator PAYNE:

– This applies only to applicants for a bounty.

Senator Keating:

– No; it says “no person.”

Senator PAYNE:

– The provision says, “ No person shall obtain a bounty,” which means obtain it from the Department.

Senator Keating:

– It may be sent to some one by mistake.

Senator PAYNE:

– Personally, I do not think paragraph a is necessary. It may lead to some innocent person being penalized.

Senator FOLL:
Queensland

.- On income tax and other similar returns a person has to declare that the contents are accurate, and if any statement is wilfully false the punishment prescribed is inflicted. What is the position in this instance? A person may unintentionally make a false declaration, and such a situation should be provided for.

Senator EARLE:
VicePresident of the Executive Council · Tasmania · NAT

– I am afraid Senator Foll would like to make the path for the wrongdoer very easy. Of course, it is not mandatory that a person shall be fined £500 or imprisoned for six months, as those are maximum penalties, and if representations were successfully made to the Court that a person unintentionally made a false declaration there might not be any prosecution at all.

Clause agreed to.

Clause 12 (Return to be laid before Parliament).

Senator DUNCAN:
New South Wales

– It is provided in this clause that a return shall be prepared in the month of July in each year and laid before both Houses of Parliament within thirty days after its preparation. This return shall show the names of all persons to whom the bounty was paid, the amounts, names of places and States in which the goods were produced, number of present employees in each of the works, wages paid, and hours of labour observed in the production of the goods. In a previous clause the Bill provides a ‘ certain limitation of profit, which has been amended to apply to particular items produced by the firms or companies who receive bounties, and that if the profits exceed 15 per cent, on the capital employed the Minister may do certain things. In the return to be fur nished each year some indication should be given to the Minister as to the particular profit made by the undertaking in the year under review.

Senator Pearce:

– We do not do that in connexion with income tax.

Senator DUNCAN:

– But we have already provided that if the profits exceed 15 per cent, a bounty shall not be paid.

Senator Pearce:

– The Minister will have the information, but why should he disclose it?

Senator DUNCAN:

– There is another provision that makes it obligatory on the person or firm to furnish that information to the Minister.

Senator Pearce:

– That is before he receives the bounty.

Senator DUNCAN:

– -Yes, if the profits exceed a certain percentage, but where is the provision which will enable the Minister to demand the information ? The particulars should be given on the return to be submitted.

Senator Pearce:

– They have to do that if the profits do not exceed 15 per cent.

Senator DUNCAN:

– Clause 7 provides that the accounts, books, and documents of any person, firm, or company claiming a bounty shall be subject to examination and audit by an auditor appointed or authorized by the Minister, and some indication should be given to Parliament as to what the profits are. We would not be asking for anything of a confidential character, but should have the right when we, as custodians of the taxpayers’ money, are paying large sums to persons or firms in the form of bounties to know what profit a concern is making.

Senator Pearce:

– The disclosure of the profits of a company might seriously affect it. If it was not making any profit its credit would be affected.

Senator Elliott:

– Inquiries can be made by the Tariff Board.

Senator DUNCAN:

– Such a question would have to be referred to the Board by the Minister, and I wish to make sure that he will have the information upon which to take action.

Senator Earle:

– S’o he will.

Senator DUNCAN:

– If the Minister is of the opinion that such a precaution is unnecessary I shall have to allow it to pass; but it appears to me that those in control of the administration should have a. definite return each year from the firms receiving the bounty, showing the profit they axe making. It will be exceedingly difficult to obtain such a return in the absence of any special provision, and it will be found that “ faked “ balance-sheets are being presented to the Minister and to the Parliament. I wish to be quite certain that the interests of the taxpayers are being fully protected.

Senator FOLL:
Queensland

.- This clause provides that a return shall be completed in the month of July, and it is possible that a number of the firms will not close their financial year until the end of June.

Senator Earle:

– This is to be a parliamentary return.

Senator FOLL:

– There will be the usual stocktaking, and the auditing of books, principally in connexion with limited liability companies which are governed by law, and I do not think they will be able to present a complete financial statement showing details of their profits on the articles they are manufacturing in time for this return to be presented in July.

Senator Earle:

– If not, they will be included in the following year.

Senator FOLL:

– The date could very easily be extended so that the return could be submitted in August, and then there would be little possibility of any firm, especially those operating under ‘ this provision, being unable to submit the information in proper time. We have already provided that if the profit “on a particular article exceeds 15 per cent, the manufacturer will not be entitled to receive a bounty, but many firms will not know as they proceed whether they are making 10, 15, or 20 per cent, until the end of their financial year. Most of the business firms arrange for their year to terminate in June or December, as it is a convenience from an income tax point of view.

Senator Pearce:

– They generally arrange to do their stocktaking in the slack period.

Senator FOLL:

– Apart from stocktaking they would have to draw up a statement of their business operations for the year, and it will take some time to discover whether the profit exceeds 15 per cent., and the Minister (Senator

Earle) must realize that it is not alway-3 possible for a big firm to strike a balance immediately the financial year closes, as the books have to be audited, and sometimes returns and invoices obtained from all parts of the Commonwealth. If this information is not available in time to be included in the return to be submitted in July they will have to wait twelve months for their money.

Senator Earle:

– The honorable senator is quite wrong. This is merely a parliamentary return, and if the particulars are not available when a return is submitted in July they will be included in. a subsequent one.

Senator FOLL:

– If that is so, surely it is desirable to have the return as complete as possible, and to have as many accounts as practicable closed. If the Minister will agree to extend the date to August he will find that it will meetthe convenience of the Department and . those affected by the Bill, and the Treasury figures will be complete.

Senator EARLE:
VicePresident of the Executive Council · Tasmania · NAT

– I cannot see that any possible advantage would be derived by adopting the honorable senator’s suggestion, as we have no idea as to what month the companies concerned will close their vear’3- operations. If we altered the date toAugust a similar difficulty would naturally arise.

Senator Foll:

– Does not the Ministerthink that the business firms would arrange for their financial year to close in order to coincide with this provision?

Senator EARLE:

– Certainly not. Thewhole of the departmental work will go on, and a return will be compiled from the latest information. If the particulars are not available in time to be included in a statement submitted to Parliament in July they will be embodied in the next, and this provision will not interfere in any way with the operations oi manufacturers. It may mean that some item, or portion of an item, may be held over.

Senator Foll:

– It may affect the Treasurer’s figures.

Senator EARLE:

– Other reports may be presented, but one must be available to Parliament not later than July if Parliament is sitting.

Senator MacDONALD:
Queensland

– I strongly support the proposal that the return asked for in this clause should include information regarding the profits made.

Senator Duncan:

– Every public company has to publish a balance-sheet.

Senator MacDONALD:

– And it should be included in the return. There is no secrecy about it. The Bill provides, tentatively, at any rate, in clause 9, for such a statement. It would certainly be a great assistance to Parliament if the return included that information. It appears to me that in clause 9 there is very liberal provision for making a profit, for, after the bounty is exhausted, there is, apparently, no limit to the rate of profit. It seems that everything is provided for in the return except a statement regarding the rate of profit, which is a very interesting item, and ought to be included.

Senator GARLING:
New South Wales

– I regret that I cannot follow my colleague (Senator Duncan) in this matter. I regard the clause imposing a penalty of loss of bounty as objectionable in the way it was originally drawn, and I would not increase that objection by calling upon the company or persons to render returns indicative of the reasons why it, or they, had paid 15 per cent., nor would I do anything else of an inquisitorial nature. The information called for under the clause is wide enough to cover everything, and the clause has the virtue that it is in the same form as has been employed since bounty Acts first came in.

Clauseagreed to.

Clause 13 (Regulations).

Senator LYNCH:
Western Australia

– Seeing that this clause enables regulations to be made prescribing the quantities to be manufactured of the four different commodities, and also prescribing the procedure for dividing the bounties betweena number of claimants if the quantity manufactured is in excess of that provided for by the bounty, has the Minister (Senator Earle) considered the possible contingency where certain commodities, like fencing wire or wire netting, are made in excess of the prescribed amount, and other commodities, such as galvanized-iron, are made short of the prescribed amount? Is the Department agreeable to give to the commodities manufactured in excess the bounty not absorbed by the other articles? If my recollection iscorrect, I think former bounty Actshave containedsuch a provision.

Senator EARLE:
VicePresident of the Executive Council · Tasmania · NAT

– The intention of the Government is to expend the whole of the £250,000. It will be proportioned by regulation, but none of’ it will go back to the Treasury. If any of it is not used it will be carried over to the next. financial year.

Senator GARLING:
New South Wales

– Is it anticipated that the £250,000 may be insufficient to go round? The bounty has been put forward in place of duties. The duties were certain to the manufacturer. Paragraph b of this section suggests the possibility of the £250,000 not being enough. to meet all the claims for bounties. Might it happen that the manufacturer, having a claim for £100 or £1,000 bounty, would have to pool with other manufacturers and accept short payment, because the money would not go round?

Senator EARLE:
VicePresident of the Executive Council · Tasmania · NAT

– It is estimated. that therewill be no possibility of such a contingency, at least before Parliament has had an opportunity of dealing with the matter again. If Australia becomes a large manufacturer of these articles, £250,000 a year will be insufficient in five or ten years’ time, I am advised that there is no possibility of the manufacture of these articles exceeding the amount provided for during the next three or four years. I can give the Senate an assurance that in the interregnum between now and the time when Parliament will have an opportunity of dealing with the question again the sum of £250,000 will be ample to pay the bounty to all applicants.

Clause agreed to.

Schedule.

Senator GARLING:
New South Wales

– I rise to direct attention to the extraordinary difficulties which the Minister in charge of the Bill (Senator Earle) and Senator Pearce said would be encountered when I suggested the advisability of ascertaining the cost of production in an amendment which I put before the Chamber this afternoon.

Notwithstanding the objections that were then raised, I find that the outstanding feature of the schedule is the stipulation that in fixing the rates regard shall be had” to the relative cost of production.” I was told that it was practically impossible to ascertain the cost of production, and now I find that the schedule bases the system of bounties on the cost of production.

Schedule agreed to.

Preamble and title agreed to.

Bill reported with amendments.

page 3139

BUDGET, 1922-23

Order of the Day called on for resump tion of debate from 28th September (vide page 2830), on motion by Senator E. D. Millen -

That the Estimates of Receipts and Expenditure for the year ending 30th June, 1923, and the Budge t-papers, 1922-23; laid on the table of the Senate on 18th August, 1922, be printed.

Debate (on motion by Senator Duncan) further adjourned.

page 3139

ADJOURNMENT

Order of Business

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

– I move-

Thatthe Senate do now adjourn.

I regret havingto move the adjournment of the Senate at this stage, but I recognise that it would he hardly fair to expect honorable members to speak to the motion for the second reading of the Superannuation Bill to-night. Ipoint out, in view of the position of business in another place and in theSenate, that not many opportunities canbe looked forby honorable senators to discuss the financial proposals of the Government unless they avail themselves of the motion on the business-paper for the printing of the Estimates and Budget-papers. I therefore propose to make that the first business for to-morrow in order that honorable senators may not be able subsequently to complain that ample opportunity was not given them to express their views on this very important feature of Government policy.

Question resolved in the affirmative.

Senate adjourned at 9.32 p.m.

Cite as: Australia, Senate, Debates, 4 October 1922, viewed 22 October 2017, <http://historichansard.net/senate/1922/19221004_senate_8_101/>.