Senate
29 October 1931

12th Parliament · 1st Session

  1. Senate
  2. 12th Parliament
  3. 1931

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

DEATH OF THE HONORABLE PATRICK McMAHON GLYNN.

Senator BARNES (Victoria- VicePresident of the Executive Council) [3.0]. - by leave - I move -

That the sympathy of the Senate be extended to the members of the family of the late Honorable Patrick McMahon Glynn, K.C., who, from the date of his election to the first Commonwealth Parliament until 1019, was a member of the House of Representatives, and rendered outstanding service to Australia as a member of the legislature and as a Minister of the Crown.

On several occasions recently it has been my sad duty to announce the death of former members of this legislature. Still another, and one who was a prominent member of the first Commonwealth Parliament, has passed away.

The Honorable PatrickMcMahon Glynn, K.C.j who died in Adelaide yesterday, commenced his parliamentary earner in 1887, when he was elected to the House of Assembly of South Australia, and for a total period of seven years before federation he was a member of that branch of the State legislature. Mr. Glynn was elected to the Australian Federal Convention of 1897-98, and at the first general election for the House of Representatives in 1901 was returned to represent South Australia. Subsequently he represented Angas continuously from 1903 to 1919. In various Commonwealth governments he held office as Attorney-General, Minister for External Affairs, and Minister for Home and Territories. He was one of the members of the Commonwealth Parliament who visited England at the invitation of the Empire Parliamentary Association in 1916, and he retained his interest in the association long after he ceased to be a member of this Parliament.

The deceased gentleman will be reremembered as a groat scholar, and as one who attained front rank in the legal profession. His literary ability was reflected in the excellence of the speeches he delivered in another place. His wellinformed mind, and his legal training, were of great value to the legislature and to the Ministries of which he was a member. He did not spare himself in his efforts to render signal service to Australia, and I am sure the sympathy of honorable senators will go out to the members of his family in their great sorrow.

I was but a youth when the late Patrick McMahon Glynn first came under my. notice, and thereafter I was keenly interested in his career. When I came into contact with him in this legislature I found him, as did, I am sure, every honorable senator who knew him, a most kindly-hearted man, always full of sympathy, and ready to extend a helping hand or a word of advice to others. He was a most striking figure in the political life of Australia, yet was. one of the most, modest of men. As a member of the Federal Convention he took a prominent part in its debates, and also served on several of its committees, where his learning and ability were of wonderful service to his country.

It has been the practice to adjourn the Senate on occasions of this kind, but, unfortunately, they are becoming all too frequent, and I believe that if. after having expressed our great sympathy with the family of the deceased gentle- mau, we proceed with the pressing business of the country, we shall be doing exactly what would be the wish of one who attended to his duties so assiduously as did the honorable gentleman whose death we deplore.

Senator Sir GEORGE PEARCE (Western Australia) [3.S]. - I second the motion. The distinguished gentleman to whose memory this motion ia directed was one of the fast dwindling band of those whom we are pleased to speak of as the fathers of federation. He played a very prominent part in the movement that eventually led to the federation of the Australian colonies, and on his election to the first Federal Parliament gave to this legislature the benefit of his wide knowledge and profound learning, as well as enthusiastic service in the cause of his country. I had the honour of being a colleague of his in the first national government formed during the war. Knowing as I do the part he played in prefederation days, as well as subsequently in the Federal Parliament and during the war, I feel that it can be truly said of him that he was a great patriot.- He was an enthusiastic Australian, a loyal British subject, a mau of wide reading, and a great Shakespearian scholar. The flashes that came from his fertile mind illumined many a debate, and apt quotations from the philosophers of old gave a charm and grace to many of his speeches. Mr. Glynn was a man of many parts: a great sportsman in his day, a noted rider, and a lover of the horse. Australia is the richer for hi3 having lived ; the poorer for his passing. He has left his mark on the history, not only of his own State, but also that of the Commonwealth. We extend our sympathy to the family of our deceased friend, and trust that their sorrow may be mitigated by the knowledge of the useful, worthy and distinguished life which he lived.

Senator McLACHLAN (South Australia) [3.11]. - May I be allowed to pay a dual tribute to the memory of a departed friend - a tribute to him as a public man and a tribute to him as au old friend? He was one of my earliest protagonists in the legal profession, and at all times, he possessed that kindly and courteous nature which characterized his sojourn in the Federal Parliament. He had a wonderful vision with regard to Australian affairs. On one occasion, when wo were discussing the project for the looking of the river Murray for navi-. gabon and irrigation purposes, it was said, paraphrasing the words of an old song - “ Glynn will lock the Murray when the pigs begin to fly;” but Mr. Glynn lived long enough to see that project well on towards completion. I think, we must all admit that he was possessed of great foresight concerning the future of Australia. He was a man of wide culture, learned in his profession, and a classical scholar of much note. It is, therefore, fitting that the flag of Australia to.-day should fly half-mast over this chamber and another place in which he played such a prominent part, not only in creating, but in moulding the laws of this country. We have, on other occasions, mourned the passing of men who played a prominent part in the affairs of this country, but we have never mourned the death of a more genial, kindly and upright man than was the late Patrick McMahon Glynn.

The PRESIDENT (Senator the Hon. W. Kingsmill). - Before putting the motion, I should like to say that I endorse fully the sentiments expressed by those honorable senators who have spoken. By the death of Patrick McMahon Glynn, we have indeed lost a man of great foresight, and the community has lost a gallant gentleman. The sentiments of honorable senators, and the condolence expressed in the motion, will be forwarded to the members of his family.

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

page 1281

WHEAT BOUNTY BILL

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– by leave - I promised yesterday that I would make a statement this afternoon in connexion with the Government’s negotiations with the Commonwealth Bank with regard to the method of providing a bounty on wheat of the 1931-32 season. When the Wheat Bounty Bill and the Wheat Charges Bill were before the Senate on Friday last, the Government was asked to again approach the banks, requesting that the sum of £3,000,000 be made available in the form of a subsidy not exceeding 6d. per bushel on all wheat exported, and that the provision in the bills relating to the collection of a similar amount on wheat used locally be retained. The Minister for Markets (Mr. Parker Moloney) had lengthy conferences with the chairman of the Commonwealth Bank Board on Monday and Tuesday last regarding the wheat position generally. The chairman, in turn, conferred with the associated banks. Much difficulty was experienced in obtaining unanimity amongst the banks regarding a workable scheme, but eventually the banks unanimously agreed to provide a loan of £3,000,000 to pay a bonus on all marketed wheat of the coming season. The Government has agreed to give effect to this arrangement, and accordingly legislation to provide for a bounty of 4½d. per bushel on all marketed wheat of the 1931-32 season is being introduced this afternoon in another place. It is hoped that the measure will have been dealt with in another place in time to place it before honorable senators at a later hour to-day.

page 1282

MARITIME INDUSTRIAL DISPUTE

Senator BARNES:
ALP

– I have no knowledge of the circulars, but if the Leader of the Opposition will hand me copies, I will see what can be done in the matter.

page 1282

QUESTION

PUBLIC SERVICE

Senator BARNES:
ALP

– On the 22nd October, Senator Dunn asked the following question, upon notice: -

In view of the fact that the Government recently instructed that all officers of the

Public Service must take their furlough before reaching the age of retirement, willhe ascertain and inform the Senate -

How many officers under the control of the Public Service Board have been allowed to remain in the Service longer than the period laid down by the Government’s decision: what are the names of such officers and the reasons for making exceptions in each case?

How many officers in the parliamentary service have been allowed to remain in the Service longer than the period laid down by government decision ; what are the names of such officers and the reasons for making exceptions in each case ?

I am now in a position to furnish the following reply to the first portion of the question : -

The decision did not apply to certain officers in South Australia who preserved their existing and accruing rights under section 84 of the Constitution. In addition to those officers, the decision of the Government has not been given effect to in the cases of two officers, viz. : - Sir Robert Garran, SolicitorGeneral, and Mr. E. L. Puddicombe, Chief Auditor, Commonwealth AuditorGeneral’s Office, London. In the case of Sir Robert Garran, it was decided that owing to the fact that he had been closely associated with the Debt Conversion Legislation and the Statute of Westminster, it was necessary that his services should be retained until the end of the present parliamentary sittings. Retirement in the case of Mr. Puddicombe is held in abeyance pending the arrival of an officer in London to take his place. Immediate steps to arrange relief were taken.

page 1282

QUESTION

TRANSCONTINENTAL RAIL WA Y

Use of Collie Coal

Senator LYNCH:
WESTERN AUSTRALIA

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

Would the Minister controlling the Commonwealth railways agree to a running test of coal obtained from the Griffin mine at Collie, Western Australia, on the Kalgoorlie end of the transcontinental railway, for the purpose of determining the value and economy of the coal for railway purposes?

Senator DOOLEY:
Assistant Minister assisting the Minister for Works and Railways · NEW SOUTH WALES · ALP

– Tests of Collie coal were made previously on the Western Australian end of the transcontinental railway, which indicated that the coal would not be economical to use. Before incurring further expense in making tests of coal from the Griffin mine at Collie, further inquiries will be made regarding experiments carried out by the Western Australian Government railways with this class of coal.

page 1283

PAPERS

The following papers were presented : -

New Guinea Act - Ordinance No.31 of 1931 -Sheriff.

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

Ordinance No. 19 of 1931- Bills of Sale. Public Baths Ordinance - Regulations amended.

Building and Services Ordinance - Regulations amended (Canberra Electric Supply).

page 1283

WHEAT BOUNTY BILL

Order of the day for resumption of the debate on the motion for the second reading of this bill discharged from the notice-paper.

page 1283

WHEAT CHARGES BILL

Order of the day for the second reading of this bill discharged from the notice-paper.

page 1283

FINANCIAL EMERGENCY BILL

(No. 2).

Third Reading

Motion (by Senator Barnes) proposed -

That the bill be now read a third time.

Amendment (by Senator Dooley) agreed to -

That, the bill be recommitted for the reconsideration of clause 3.

In committee (Recommittal) :

Clause 3 -

Section 19 of the principal act is amended by omitting sub-sections 1, 2 and 3 and inserting in their stead the following subsections: -

The Governor-General may, by regula tion, prescribe the maximum amount, rate, percentage or extent of taxation to which the remuneration of any senator ormember of the House of Representatives . . ., of any Minister of State and of any officer or employee, may be subject -

under any one or more of the laws of any Stateimposing taxes upon incomes, where the law of the

State expressly provides that the revenue received from the tax is to be applied to meet expenditure incurred by the State for a specific: purpose, or is prescribed as a lawimposing a tax to meet expenditure-, incurred by the State for a specificpurpose.

Senator DOOLEY:
Assistant Minister · New South Wales · ALP

– I move -

That the words “ a special purpose, or ir prescribed as a law imposing “ bo left out, with a view to insert in lieu thereof the words “ any special purpose, or the regulations prescribe that for the purposes of this section the tax shall be deemed to be “.

The Tasmanian Income Tax Act imposes both an income tax and a hospital tax. It is desired to prescribe not the whole act, . but merely that portion which relates to the hospital tax. That is the sole object of the amendment.

Senator LYNCH:
Western Australia

– This amendment seems very innocent on its face; but so also does many a mischievous thing. It is the art of what is mischievous to assume a pleasing face, so as to deceive those who otherwise would not be deceived. So far as I have been able to study it during the limited time at my disposal, the proposal appears to be that if a tax is promulgated by a State Government for a specific purpose it may be regarded with a favorable eye by the Commonwealth Government, or it may not. The word “ or “ has been introduced by the Minister. According to my reading of the English language, this simply means that if a State decides to impose a specific kind of tax it may be regarded as valid; but should the Commonwealth authority - which, after all, is synonymous with the ministerial party - decide that, in its opinion, such a specific tax is not justified, the procedure is entirely altered. At one stroke this will establish the federal authority as the overlord of the States in the matter of taxation. The Minister has just referred to the Tasmanian Income Tax Act, and ha3 drawn a distinction sharp and deep between the two specific purposes to which it gives effect. . The overshadowing consideration, however, is that this proposal will place in the hands of the Federal Parliament the power of vetoing State legislation designed to impose taxation for a specific purpose. If that be the case - and I have no reason to doubt that it is - it is as well that the Senate should understand it and should say here and now whether it is prepared to accept an amendment of this character. The individual States have a constitutional right to impose taxation. Why should the Federal Government step in and say, “ What kind of taxation are you going to impose? If it does not commend itself to me I shall blue pencil it “ ? It was my intention to challenge this point before the Minister introduced his amendment. I invite honorable senators to study carefully the wording of paragraph b, and to mark the three words, “ or is prescribed “. The Federal Government is arrogating to itself the right to stand in judgment over the States,- and to say whether or not they shall have the right to impose a tax for a specific purpose. That being the case, what becomes of the power that has been given to the States by the Constitution? If the States wish to tax for a specific purpose, what’ right has the Commonwealth to step into the arena and say, “ You cannot pass that tax; I am going to interdict you. Although the Constitution gives you the power to impose taxation, under the power that I have lately arrogated to myself I say that you shall not pass that tax unless by my grace and consent, and with my benediction”. Such a state of affairs was never contemplated by the Constitution. If a provision of that nature had been implanted in the draft constitution it would never have been accepted. As I have said over and over again, this is only an attempt by the central authority to pull to itself still more power, and to the extent of the pulling to leave the States stripped of what constitutionally and rightly belongs to them. What right has the Commonwealth Government to prescribe a law that the States have the constitutional power to enact? It has no more right than have the States to prescribe a law relating to Commonwealth taxation. The federal system may be aptly likened to the solar system. The central authority revolves in its own circle, and the several planets on their own axis, according to the laws that severally appertain to them.

Senator Sir George Pearce:

– But the States have the same power in relation to the taxation of State servants by the Commonwealth authority.

Senator LYNCH:

– Surely the Leader of the Opposition does not suggest thai the States have the power to tax in opposition to the Commonwealth law!

Senator Sir GEORGE Pearce:

– The States have power to say that the Commonwealth shall not tax State servants. Western Australia has already passed a law providing conditions similar to which the honorable senator is objecting.

Senator LYNCH:

– Am I to understand that the States can prevent the Commonwealth taxing State servants?

Senator Sir Hal Colebatch:

– That was the view held until recently; but I do not know how the High Court would view the matter.

Senator Sir George Pearce:

– Western Australia passed a law to that effect

Senator Sir Hal Colebatch:

– In 1915 or 1916 that State passed a law enabling the Commonwealth to tax State Ministers and members of Parliament.

Senator LYNCH:

– Having made inquiries on this point, I understand that, when a State law contravenes a federal law, the State law is, to the extent to which it contravenes a Commonwealth law, invalid.

Senator Sir George Pearce:

– Not if it deals with a subject upon which the States have power to legislate.

Senator LYNCH:

– If the States can so protect themselves from the authority ‘ of the Federal Parliament to impose taxation upon their servants, then my conten– lion fails. Up to the present State servants are subject to Commonwealth law, and are to-day paying Commonwealth taxation. If State public servants are paying Commonwealth taxation which cannot be collected constitutionally, it is a wonder that a test case has not been brought before the court.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– Even under this measure Commonwealth servants will be taxed by the States.

Senator LYNCH:

– Yes, in the manner prescribed by the Federal Government, and upon a differentiating basis. I may illustrate my point by saying that two brothers, each receiving £500 a year, may be working in New South Wales - one a Commonwealth public servant, and the other a State servant. It is probable that under this legislation the State public servant will be taxed at a higher rate than the Commonwealth public servant. On one occasion, the late Sir Samuel Griffith said that the only limitation upon the States’ power of taxing federal servants is when such taxation interferes with or impairs their efficiency. That is the only limitation which exists. A new position is created by this amendment. The Government is seeking to prescribe that taxation to be collected under a State act shall not be imposed in the case of Commonwealth servants. If the States decided to bring in a sumptuary tax, such as is in operation in Canada and other countries, would the Federal Government have power to say that such a tax should not be imposed? Should the federal authority have power to say that a bachelor tax, such as is in operation in many of the States in the American Union should not be collected ?

Senator DUNCAN:
NEW SOUTH WALES · NAT

– The States can pass whatever laws they like, within the ambit of their authority, without intervention by the federal authority.

Senator LYNCH:

– If that is the case, what is the meaning of this amendment? What is the object of this proposal if the States are to retain their present powers under the Constitution? It appears that this provision has been inserted to give the federal authority full power to act as censor over the States in matters of taxation and to retain the power to veto State legislation. If that is so, it really means throwing a mantle of protection over federal public servants and members of this Parliament. We have often heard the maxim that all are equal before the law, but it would appear that the object of this amendment is to place certain members of the community in a more favoured position than others. In discussing this measure, the Assistant Minister (Senator Daly) used the word ’ protection “ over and over again. What *does that word mean in the sense in which it was used by the Assistant Minister? That we are using our power to protect the members of this Parliament and Commonwealth public servants from paying rates of taxation that may be imposed upon others. I do not submit that as the major’ objection to this proposal. The principal object of this provision seems to be to deprive the States of the power which they should constitutionally enjoy. Even under Mr. Lang’s taxation proposals, there is no such discrimination. This simply means that Commonwealth public servants in, say, New South Wales, may be placed in a special category and protected from paying taxation which will have to be paid by other citizens in that State.

The TEMPORARY CHAIRMAN (Senator Payne:
TASMANIA

– The honorable senator’s time has expired.

Senator Sir GEORGE PEARCE (Western Australia) [3.48]. - It appears to me that Senator Lynch is under a misapprehension. This measure, if it becomes law, will not interfere with the right of any State to impose whatever taxation it may think desirable. It does not interfere with that right. No measure that Ave may pass can deprive the States of the rights which they now enjoy in respect of taxation. The only limitation placed upon the States is that they cannot impose customs duties. As stated by the Assistant Minister (Senator Daly), the High Court decided in 1903 that the States cannot tax Commonwealth public servants-

Senator Lynch:

– At a higher rate than any other citizen.

Senator Sir GEORGE PEARCE.That they had no such right. But it was obvious that such a position would create an invidious distinction. The High Court held that the States cannot tax Commonwealth public servants.

Senator Lynch:

– That is the first position.

Senator Sir GEORGE PEARCE.Yes. The Commonwealth then said to the States : “ We shall give you power to tax them,” and accordingly in 1907 the” Commonwealth Parliament passed a bill giving power to the States to tax Commonwealth public servants with the limitation that the .taxation imposed upon them must not differ from that imposed upon -the rest of the citizens of a State. There was no federal income tax in 1907, but in 1915, the first year of the war, the Commonwealth Parliament imposed an income tax, and Senator Colebatch has reminded me that the States passed laws enabling the Commonwealth to tax State public servants. It is clear that this bill is imposing a limitation on the States. It tells the States that the power extended to them in 1907 is continued, but because an attempt has been made to differentiate in at least one State, for example, the vicious rate of tax sought to be imposed in New South “Wales, the Commonwealth Government is asking Parliament to pass a provision which will protect its public servants. That is the limitation, and, as Senator Colebatch pointed out the other day, the States could have imposed a like limitation upon the Commonwealth when they conceded to the Commonwealth the power to tax State public servants.

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– The committee is dealing with a machinery amendment which does not interfere with the principle already accepted yesterday. The purpose of the amendment is merely to make the clause more workable.

Senator Lynch:

– Will not the effect of it be that the federal public servant, will pay less State taxation than the ordinary citizen of a State?

Senator DOOLEY:

– Possibly, but that principle has already been agreed to. I hope that the committee will recognize that what it has now under consideration is merely a drafting amendment to give effect to yesterday’s decision.

Senator RAE:
NEW SOUTH WALES · ALP; LANG LAB from 1931

– While I as a senator may gain some advantage by this provision, I cannot see its fairness. Presumably the Commonwealth public servants domiciled in the States will benefit by the expenditure of any money raised by a State through taxation imposed for a special purpose.

The TEMPORARY CHAIRMAN:

– The committee is now discussing an amendment to alter the wording of a provision, the principle of which was endorsed yesterday.

Senator RAE:
NEW SOUTH WALES

– If the amendment is to tighten up a part of the bill to which I object, I am surely in order in referring to the effect it is likely to have. It seems to me that it is likely to have the effect of preventing the States from exercising the right to impose taxation for a special purpose.

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– We had a very protracted debate yesterday on. the point raised by the hon orable senator, and the bill was amended, but the Parliamentary draftsman subsequently found that it was necessary to further amend it in the form submitted in the Assistant Minister’s amendment, in order to give full expression to the will of the Senate. The whole purpose of the amendment is to give expression to the desire of the Senate. The amendment affords every protection to the States.

The TEMPORARY CHAIRMAN:

– I again remind honorable senators that the principle contained in the provision which was agreed to yesterday must not be debated. The only question before the Chair is as to which words are preferable - those already in the hill as amended, or those now proposed to be inserted by the Assistant Minister?

Senator LYNCH:
Western Australia

. - I did not accept the principle yesterday. At any rate, I merely rise now to point out that despite the statement by Senator Duncan that this bill does not interfere with the original position of the States, we have in it an elaborate method by which the Government is attempting to deprive the States of a power which they already possess.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– What I said was that the bill does not take away from the States the power to levy taxation.

Senator LYNCH:

– Clothed in, a mass of verbiage this is admittedly an attempt to protect a certain class of people, and it is useless to say that no harm is being done. The harm is that a portion of the power of the .States has been taken away from them.

The TEMPORARY CHAIRMAN.The honorable senator is entirely out of order. He must confine himself to the question whether he prefers the wording of the provision as agreed to in committee yesterday, or the amendment now proposed by the Assistant Minister.

Senator LYNCH:

– I wanted to get from the Government a clearer exposition of the position. However, I have entered my protest. I let the matter go now, not to the limbo of forgotten things, hut to that place where ghosts rise and fight out matters in the law courts; because it is my belief that this will be the starting point for future trouble and confusion between the States and the

Commonwealth. The Commonwealth is taking to itself a power to which it is not entitled.

Question - That the words proposed to be left out (Senator Dooley’s amendment) be left out - resolved in the affirmative.

Question - That the words proposed to be inserted, be so inserted - put. The committee divided. ( Tem porar y Chairm an - Senator the Hon. H. j. M. Payne).

AYES: 19

NOES: 8

Majority . . 11

AYES

NOES

Question so resolved in the affirmative.

Amendment agreed to.

Clause, as further amended, agreed to.

Bill reported with a further amendment; report adopted.

Bill read a third time.

page 1287

SUPPLEMENTARY APPROPRIATION BILL 1927-30

Second Reading

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– I move -

That the bill be now read : a second time.

Of the Supplementary Estimates now submitted, those for the years 1927-28 and 1928-29 are Estimates of the previous Government, whilst those for 1929-30 are Estimates of the present Government. The invariable practice has been to submit Supplementary Estimates to Parliament at the earliest convenient opportunity after the Auditor-General’s report has been presented. This report is accom panied by the finance statement, which embodies a schedule which will subsequently be presented to Parliament in the form of Supplementary Estimates. Members of Parliament) when dealing with the ordinary Estimates, have an opportunity to make themselves familiar with the excess expenditures which have been made under the authority of the vote for Treasurer’s Advance to be afterwards covered by a supplementary appropriation, and when studying the Auditor-General’s report, they also may make themselves conversant with the specific provisions to be included in Supplementary Estimates. The passing of the covering appropriation thus becomes more or less a formal matter, and the presentation of the Estimates has always been deferred until the last days of a session or of a sitting of Parliament, prior to a prolonged vacation. Advantage is now being taken of the opportunity to submit the Supplementary Estimates for the three years. I may mention that this is not the first occasion upon which Parliament has been asked to deal with Supplementary Estimates of more than one year. In December, 1921, Estimates for two years were brought down together, as was also the case in April, 1927, and in October, 1924. Supplementary Estimates for three years were introduced. It is the custom each year to provide on the Estimates a vote, “Advance to the Treasurer”. This provision enables the Treasurer -to.make advances to the various Commonwealth departments to meet expenditure not provided for in the ordinary divisions of the Estimates. Particulars of such expenditure must always be included in a parliamentary appropriation. As copies of the Supplementary Estimates are being circulated among honorable senators, I do not propose to refer at length to the items of expenditure which are being submitted for the approval of Parliament.

The vote for Treasurer’s Advance for 1927-28 was £1,500,000, and the expenditure amounted to £654,084, made up as follows: Ordinary departmental expenditure and war services, £647,969; additions, new works and buildings, £6.115.

In 1928-29 the advance to the Treasurer was again £1,500,000, and the expenditure £320,486, the summarized totals being: - Departmental expenditure and war services payable from revenue, £288,337 ; additions, new works and buildings, £32,149.

For 1929-30, the amount voted for under this heading was £2,000,000, and the expenditure was £772,117, as follows: - Ordinary departmental votes and war services, £746,647; additions, newworks, buildings, &c, £25,470. The increase in the amount of supplementary appropriation, for 1929-30 over that for the previous year is accounted for by three large and abnormal items, two of which are non-recurring, namely - Exchange on remittances to London, £85,368; interest on London overdraft (non-recurring), £171,762; refund of interest on soldier settlement loans to States consequent on the adoption of Mr. Justice Pike’s recommendations for settlement of financial liability (nonrecurring), £184,135; total, £441,265. In previous years charges in connexion with exchange on remittances to London and interest on London overdraft were, unusual owing to regular borrowing on the London market. Honorable senators will note that, in every instance, the full amount of the Treasurer’s Advance has not been expended. The vote is simply utilized to cover expenditure which cannot., be . foreseen when the Estimates of expenditure are submitted to Parliament.

Senator Sir GEORGE PEARCE (Western Australia) [4.18]. - I do not propose to ask . for the adjournment of the debate, because I cannot see that any useful purpose would be served thereby. The bill is merely a record of expenditure already incurred, authority for which was given in the advance to the Treasurer. The Leader of the Senate (Senator Barnes) has indicated certain items of expenditure which could not be foreseen when the Estimates were submitted to Parliament, and the Treasurer’s Advance was utilized to meet them. No one could foresee the increase in exchange costs, which had to be met out of the Treasurer’s Advance. As the money has been “expended, I do not propose to continue the discussion.

Question resolved in the affirmative.

Bill read a second time and reported from committee without requests or debate; report adopted.

page 1288

SUPPLEMENTARY APPROPRIATION (WORKS AND BUILDINGS) BILL 1927-30

Bill (on motion by Senator Barnes) read a ‘Second time, and reported from committee without amendment or debate; report adopted.

page 1288

COMMONWEALTH DEBT CONVERSION BILL (No. 2)

Second Reading

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– I move -

That the bill be now read a second time.

The purpose of this bill is to provide for the compulsory conversion of securities amounting approximately to £16,500,000, the holders of which have signified dissent under the provisions of the Commonwealth Debt Conversion Act. The bill provides that the present unconverted securities shall be deemed to have been converted. At the conference of Commonwealth and State Ministers, held during May and June last, to consider the financial situation it was recognized that, owing to the national inability to meet existing government charges, all expenditure, including fixed interest charges, must be substantially reduced.. With respect to the reduction of interest on the internal public debt, it was agreed that bondholders should be asked to make a voluntary conversion. The question, what action should be taken in respect of unconverted bonds, was considered, and it was decided that it should stand in abeyance until after the conversion appeal and then receive attention. The Leaders of the Opposition in the Commonwealth Parliament were present at the conference and concurred in its final decisions. Speaking on this aspect of the subject the Leader of the Opposition ventured the opinion that if people would not convert voluntarily, Parliament should be asked to consider what other steps it should take. I do not know what steps the right honorable gentleman had in mind, but his words showed very clearly that there was an explicit understanding that legislative action would be taken with respect to unconverted bonds. If the proposition that dissenters should be paid is put, I must reply that it is impracticable, as it is not . considered possible to raise a loan at present. The raising of a loan, even if it were possible, would not be in the best interests of Australia at the present time, as the withdrawal of this money from circulation would accentuate the existing financial stringency. The problem to be met is the reconciliation of equities on the one side and necessities on the other. Ninety-seven per cent, of our bondholders have assented to a reduction of interest and deferred dates of maturity. Payments to public servants and pensioner* have been reduced; and the wages of workers in various industries are now substantially lower than formerly. By these sacrifices the financial position of the Commonwealth has improved and consequently the market value of Commonwealth bonds has risen. It is certainly not equitable that those who refused to take their share of the sacrifice should benefit by the unselfishness of their fellow citizens. On the other hand, many of the dissenters, who were not really concerned about the reduction of interest, would not have considered it unfair to impose’a special tax to achieve that object. They were, and are, concerned about the repayment of their capital on the due date. It is right and proper that people who, because of illness, old-age or other causes, arc relying on the payment of bonds on maturity for food, shelter and clothing, should receive some payment on the due date and at intervals thereafter. These cases of hardship are the crux of the problem, and everything possible is being done to meet them. It is not proposed to limit relief to dissenters, as those who agreed to convert, and are in difficulties, are at least equally entitled to relief. It has been found possible to provide £2,000,000 for this purpose up to the 30th June next, and not less than £1,000,000 per annum in ensuing years. From the nature of the case, it is not practicable to lay down hard and fast rules with respect to claims for payment under this scheme. Each application must be considered on its merits as to whether any instalments shall be paid, and, if so, at what intervals payments will be made.

Senator Herbert Hays:

– Does that refer to cases of hardship among those who have converted, or only to those who have not converted their holdings?

Senator BARNES:

– Discretionary power is being sought to deal with all cases of hardship ; but it may be assumed that those who have converted their holdings have made their position quite safe and will not need help.

Senator Herbert Hays:

– That is not a fair assumption.

Senator BARNES:

– Each application must be considered on its merits as to whether any, and, if so, at what intervals, instalments ought to be paid.

I cannot state more concisely the purpose of the bill. I do not anticipate that there will bc any opposition to it. The various elements composing the governments of this country met in conference, and were in travail for quite a while in an endeavour to evolve unitedly some method by which Australia might obtain relief. Having reached a conclusion that was satisfactory to all, they made a recommendation to the people of Australia. During the course of their deliberations, they also considered those people to whom this bill applies, and, so far as I know, there was a general consensus of opinion that they should be* called upon to make a sacrifice equal to that made by holders of securities who voluntarily converted them.

Debate (on motion by Senator Sir George Pearce) adjourned.

page 1289

CUSTOMS TARIFF

First Reaping

Debate resumed from the 14th October (vide page 703), on motion by Senator Barnes -

That the bill be now read a first time.

The PRESIDENT (Senator the Hon W Kingsmill:
WESTERN AUSTRALIA

– The right honorable the Leader of the Opposition (Senator

Pearce) spoke to me on this subject some time ago. I have since consulted the Standing Orders and the practice in this relation, so that I might arrive at -an interpretation which, while not departing from the Standing Orders, would not interfere with that for which they stand, namely, the greater ease, accuracy and comfort of honorable senators in debate.

The Standing Orders in relation to the first reading of ordinary bills, and of those which are somewhat misleadingly termed bills that the Senate may not amend, are totally different. Standing Order 189, dealing with the first reading of ordinary bills, provides -

Except as to bills which the Senate may not amend, the question, “ That this bill be now read a first time,” shall be put by the President immediately after the same have been received, and shall be determined without amendment or debate.

Standing Order 190 lays down the provcedure in connexion with bills which the Senate may not amend. It says -

In bills which the Senate may not amend, the question, “That this bill be now read a first time,” may be debated, and the debate need not be relevant to the subject-matter of such bill.

So far, so good. But we find that, contrary to the position that exists in connexion with the first reading of ordinary bills, the first reading of a bill that the Senate may not amend is a vital stage of the measure. Standing Order 252 reads as follows: -

Requests to the House of Representatives may be made at all or any of the following stages of a bill which the Senate may not amend : - (1). Upon the motion for the first rending of any such bill.

Honorable senators will see the sharp line of difference that there is between the first reading of an ordinary bill and that of a bill which the Senate may not amend. I understand that the reason for making that difference in connexion with bills that the Senate may not amend, was that the Senate should have the first available opportunity of rejecting, in toto, a measure which obviously was unpalatable to it. The amendment that would be moved to the motion for the first reading, after which the Senate would not go into committee, would be fatal to the first reading, namely - “ That the bill be read a first time this day six months.” That is fairly obvious. Consequently, the position is not so simple as it would appear to be. I believe, how- . ever, that the difficulty may be overcome, and that the evident intention of those who framed the Standing Orders may be given effect. It is clear that it is not desirable, nor was it contemplated, that there should be two stages at which the principles of a bill might be discussed, and the motion for the first reading of a bill, I think, should not be one of those stages. That stage was made an occasion for the discussion of subjects outside the scope of bills in order that honorable senators might have as many opportunities as possible of ventilating grievances, and of bringing before the Senate any subject of great importance; and the privilege has been exercised very freely on all occasions when, there has been any. debate on the motion for the first reading a bill that the Senate might not amend. As a matter of fact, the practice of the Senate has been, so to interpret the latter portion of Standing Order 190 as to assume that the word “ must “, and not the word “ need “ appeared in the sentence “ need not be relevant to the subjectmatter of such bill “. That being so, and taking into consideration the fact that the first reading is laid down as a vital stage of the bill, my ruling is as follows : -

Without prejudice to the powers of requesting amendments to money bills on the first reading, as contained in Standing Order 262, matters of general interest not relevant “ to the bill shall be discussed during the debate on the first reading. During the debate on the second reading of such bills, matters discussed must be strictly relevant to the subject-matter of the bill, and must relate only to the principles of the bill without reference to details, the discussion of which is confined to the committee stage.

I believe that that carries out the intention of the framers of these Standing Orders, as well as the practice that has been adopted in the Senate for some considerable time, while not taking away from the Senate the opportunity of attacking immediately a bill which obviously is unpalatable to it.

Senator Sir George Pearce:

– In view of that ruling, I shall reserve my remarks on the bill until the second-reading stage is reached.

Question resolved in the affirmative.

Bill read a first time.

SecondReading.

Senator DALY (South Australia -

Assistant Minister) [4.47]. - I move -

That the bill be now read a second time.

I cannot anticipate the objections that honorable senators may have to offer to any individual item in the tariff. It is essentially a committee measure.

Senator Payne:

– It is considerably more than a committee measure.

Senator DALY:
Assistant Minister · SOUTH AUSTRALIA · ALP

– On. many occasions, honorable senators have discussed the vital differences that exist between the Government and the Opposition in relation to questions of fiscal policy. I feel certain that when this measure emerges from the committee stage, they will thoroughly understand the reasons’ that have actuated the Government in imposing the duties that are imposed on the different items in the tariff.

The PRESIDENT:

– Have the Standing Orders been suspended so as to enable the Minister to move the motion’ for the second reading of the bill ?

Senator DALY:

– I understood from the Leader of the Senate (Senator Barnes) that he had moved the contingent notice of motion so as to permit me to proceed with the bill. I am nowinformed by the Clerk of the Senate, however, that that course was not adopted, and before I can proceed further it will be necessary for action along those lines to be taken. For that reason, I ask leave to continue my remarks.

Leave granted; debate adjourned.

Suspension of Standing Orders

Motion (by Senator Daly) proposed -

That so much of the Standing and Sessional Orders be suspended as would prevent the bill being passed through all its stages without delay.

Senator Sir GEORGE PEARCE (Western Australia) [4.50]. - If I agreed to this motion I should be open to the accusation by honorable senators on this side of the chamber that I had upset an arrangement into which we entered earlier in the day with respect to private members’ business. Unless I can obtain an assurance from the Government that it will adjourn the debate on this measure at 6.15 so as to enable private business to be proceeded with after dinner, I cannot support the motion. After having conferred with honorable senators on this side of the chamber, I have given an undertaking to the right honorable the Prime Minister (Mr. Scullin) that private business will be suspended at 10 p.m. to enable the second reading of the Wheat Bounty Bill to be moved to-night, and also that the measure will be passed through this chamber by lunch time to-morrow. I should also like the Assistant Minister to give a similar assurance, if he can, with respect to next Thursday, so that private business may be proceeded with at the usual hour that evening if so desired.

Question resolved in the affirmative.

Second Reading

Debate resumed.

Senator DALY:
ALP

– The real debate on this measure will take place when we are dealing with the schedule in committee, and I have no desire to disturb rabbits in their warrens by endeavouring to meet arguments which may not be adduced. It is not my intention to anticipate objections which some honorable senators may offer to the Government’s fiscal policy. I can, however, assure honorable senators that on this occasion the Government is in the fortunate position of not having to defend its tariff policy. It can take up the offensive. Facts and figures will be placed before the Senate, if so desired, to prove beyond doubt that the fiscal policy of this Government has saved Australia, and that it bids fair to place Australian ‘ industries upon a basis that will enable them to expand, and, when times become normal, to export their products.

Senator Herbert Hays:

– The products of secondary industries?

Senator DALY:

– Yes. I anticipate attacks will be made upon the tariff from the viewpoint of the primary producers; but I invite honorable senators to study the tariff in relation to primary “production, and in conjunction with the “Premiers’ plans which Avas supported by the members of the Opposition. I ask honorable senators opposite to see whether there- is anything in the Government’s fiscal policy which is not in keeping with that equality of sacrifice which Avas th9 dominant feature of the plan agreed upon at the conference of Commonwealth and State Ministers.

Senator E B Johnston:

– The economists associated Avith the preparation of that plan recommended a substantial reduction in customs duties.

Senator DALY:

– The economists made certain recommendations in connexion

Avith the tariff which were considered by the representatives of the Government who adopted the plan. I shall be able to demonstrate that the Government’s fiscal policy has been of great benefit to the country. Had the debate on the motion for the first reading been proceeded Avith, I should have been able to determine the line of attack. For the sake of brevity and relevancy of debate I ask honorable senators to consider the financial position of Australia prior to the advent of this Government, to consider what proportion of our imports were luxuries, the extent to which Ave had to marshal our credits by dealing with imports, and how far this Government Avas justified in controlling, by its tariff1 policy or by regulation, the pedlar who, so to speak, was hawking in Australia cheap goods from the depressed markets of the world and selling them in the same way as a canvasser sells, say, a refrigerator, to a housewife on the basis of a £1 down and the balance at the rate of 5s. a week. Australian consumers could not afford to purchase many of the goods that were being imported. The Government was prepared to lose a large amount of customs revenue in order that credits overseas might be conserved, and to restrict to necessities purchases from abroad. These are merely generalities that I bring under the notice of honorable senators in moving the second reading of the bill. I shall reply from a non-political standpoint to the arguments adduced during this debate, and from the viewpoint of a government which for the moment was prepared to overthrow its political principles, and to approach as nearly as it could a confirmation of the principles of the party with which it was associated in drawing up the Premiers’ plan.

Senator Sir GEORGE PEARCE (Western Australia) [5.0]. - I thank the Assistant Minister (Senator Daly) for indicating to me and to honorable senators generally the lines upon which our speeches should be delivered; but I do not know that Ave shall be ready to accept his advice. I think that we, shall make our own speeches in our own way. The advice, I am sure, Avas kindly meant, and I accept it in that spirit, but our style will not be cramped by the -limitations suggested by the Assistant Minister.

I submit that it is impossible for this Parliament to frame a tariff out of the welter of tariff orgy in which this Government has indulged. It is impossible for this Parliament to frame a coherent or co-ordinated tariff. All that the Senate can do is to endeavour to moderate some of its prohibitive tendencies. It will be for a body such as the Tariff Board, with possibly an extension of its powers and personnel, to conduct a comprehensive inquiry into the whole tariff, and to co-ordinate and bring before Parliament proposals in which the various items in the tariff will have some relation to each other. At present the tariff is a hotchpotch. The Tariff Board having submitted proposals such as I have suggested, it would then be the responsibility of Parliament to express an opinion upon them.

Let me say at the outset that the issue involved in this debate is not one of freetrade versus protection. Eather is it one of prohibition as opposed to moderate and discriminating protection. Some little time ago honorable senators on this side of the chamber held a meeting and carried a resolution, which. I think, fairly indicates the general view of a majority of honorable senators on this side of the chamber Avith respect to the tariff. That resolution read -

That this meeting of senators representing a majority of the Senate affirms itS intention to endeavour to secure amendments of the present tariff schedule by reduction of excessive duties; and by such further reduction of duties against British imports as will foster Empire trade and lead to the adoption by Britain, Australia and thu other dominions of effective reciprocal trade agreements benefiting every unit of the Empire

Iii order to properly understand the tariff we have to study, not its history generally, but the history of the present schedule. The schedule now before us had its genesis in the last federal election. The first movement on behalf of those who support the Government, so far as I can learn, came from the present Treasurer (Mr. Theodore) when he approached the manufacturers in Sydney, to whom he appealed for financial support at the then ensuing elections. A certain amount of financial support was promised, and as u quid pro quo, Mr. Theodore, who was then the campaign director of the Federal Labour Party, promised that a high protective tariff would be introduced. A general election was held and the Labour party was returned with a majority. “Within a month of the elections one, at any rate, of its election promises was redeemed, and a prohibitive tariff was introduced. So far as I can learn, that is about the only election promise that has been honoured by this Government.

Having regard to the magnitude of the schedule and the striking alterations made in the duties, even its most enthusiastic supporters cannot say that it has ever received proper consideration. It was thrown together hurriedly, laid on the table in another place, and brought into operation. Then, after this hurriedly-prepared tariff, a second and a much stronger dose was brought down. It was an absolutely prohibitive tariff, but again hurriedly drafted and rushed through. The significant feature of both of those tariffs was that neither was referred to the Tariff Board. That board was not consulted in regard to either of them.

In addition to the tariff schedules so hurriedly brought down by this Government, a huge list of embargoes was promulgated by it, again without reference to the Tariff Board ; and of this list 78 prohibitions are still in force. I know that if will be said that these embargoes were imposed to rectify Australia’s adverse trade balance, but a glance through the list shows that it contains many articles, the importation of which was comparatively small. It cannot be said by any stretch of one’s imagination that the importation of those articles was prohibited for the purpose of rectifying the adverse trade balance.

Later, we had a third tariff. Each has been bigger, wider in its scope, more farreaching, and more prohibitive than any of its predecessors since the establishment of the federation. This third schedule was introduced by Mr. Forde, again without consultation with the Tariff Board.

Mr. Forde has introduced an entirely new and novel method of tariff-making in Australia. He perambulated up and down, the States of Victoria and New South Wales, inviting all and sundry to tell him what they wanted. Anything would be provided for them, any duty they liked.

Senator Foll:

– His invitation was, “ Write your own ticket “.

Senator Sir GEORGE PEARCE.He said, in effect, “It does not matter what it is, come along, state your requirements, and they will be forthcoming”. It can be said of Mr. Forde’s tariff that it was framed amid the blare of brass bands, the popping of champagne corks, and the raucous rantings of publicity spruikers. It was, in actual fact, prepared in those surroundings, as any one can tell who reads of what took place during the frequent peregrinations of this Minister. At a social gathering at which, no doubt, the champagne corks popped, after musical items had been rendered, the manufacturer would state what he wanted, and the Minister would promise to grant what was wanted; and next day there would be an announcement in the House of Representatives that the customs tariff had been amended. And am I exaggerating when I use the words “ raucous rantings of publicity spruikers “ ? Do not we remember the speeches Mr. Forde delivered at some of these festive gatherings - how he said “ This new tariff of mine will give increased employment to 20,000 “ ; how. later, when the effervescence had become more effective, he said, “ It will give employment to 50,000 “, and still later how he rose to Himalayan heights of eloquence and said, “ It will find employment for no less than 100,000 additional employees “ ?

Then we had his famous questionnaire to the manufacturers, containing the following : “ Are you satisfied with the tariff ? If you are not satisfied, in what direction are you not satisfied? Is the present rate of duty effective? If not, what rate of duty do you suggest?” As Senator Foll has so aptly interjected, it was an invitation to them to write their own tickets.

The methods of Mr. Forde in framing a tariff remind me very much of those of a shop-walker who meets his customer at the door, and bows him in, saying, “ Here we have four special lines. First of all, here is a line of complete embargoes that I can recommend to you. It is guaranteed not to fade or shrink, because neither Parliament nor the public can blow on it; neither has the opportunity to do so. But if you do not want that line, what about this other line of prohibitive duties? If, however, you are modest, and do not want to go so far as that, here is a line of scientific duties. It is an excellent line. You will notice that there is a British preference in it, but do not let that alarm you. It does not mean that your goods will have to meet the competition of British goods. It is there because it looks well, it takes with the general public, who believe in trade within the Empire, patriotism, and all that kind of thing. You could do quite a lot with that particular line, if you would only accept it. You need not be afraid of British competition, because, in addition to the duty against Great Britain, there are such little items as exchange and primage and, later on, a 50 per cent, special surcharge. We strongly recommend this line of scientific duties; it is our star line. It looks quite moderate on the face of it, and as if it might do something to help British trade, but I can assure you that in its operation it means absolute prohibition. At any rate, it is one we most strongly recommend. Then there are the ordinary duties, but we do not particularly push those. We recommend our star line, the scientific duties.” And then he bows the customer out and another customer, who wants something in the excise department, arrives. He bows him in and says, “Do not go through that door, because behind it the Tariff Board is sitting. I would not advise you to go in there, because you will be obliged to give evidence on oath as to your requirements, and your evidence will be heard in public. Come into my office. What is it you want? An excise, on whisky not bottled in bond? Well, I have not heard of that, but we are prepared to consider- it. What name did you say? Mr. Cock Robin? I think I have heard the name before. Come into my office by all means.” And presently Mr. Cock Robin emerges from Mr. Forde’s office with a smile on his face and a resolution is tabled in the House of Representatives imposing an excise duty on whisky not bottled in bond, upon which the Tariff Board has not expressed an opinion.

We also know the manner in which some of these claims for duties have been put forward. I hold a sample in my hand. It is a sample of the kind of suggestion that is put before the Minister. It is as follows : -

I beg to place before you the request that your earnest consideration be directed to the wisdom and urgency of the imposition of an import tax of at least 800 per cent. - with a preference of i of 1 per cent, to .the United Kingdom - upon steel pens, load pencils, fountain pens, typewriters, and all such mechanical aids to writing, now being imported into the Commonwealth, together with a prohibitive tariff upon geese and quill pens with the object of establishing a great Australian goose quill pen industry.

Early historical records of. New South Wales and Van Dieman’s Land afford indubitable evidence that it was not at all uncommon for the early settlers to make their own quill pens. The invention of and consequent invasion of this country by the steel pen mercilessly strangled this infant industry in its very cradle, and its mortal remains have since lain buried under an avalanche of prejudice against the native-made, and far superior, Australian goose quill’ pen.

But truth crushed to earth will rise again. Happily, geese still abound in Australia, and the hour has struck when v,-c can, we believe, look with confidence to the overthrow of the nefarious conspiracy which for so long and triumphantly, has robbed Australia of its rightful inheritance to make its own pens.

I bog to submit the following claims on behalf of the proposed duties: -

Taking into consideration the average life and durability of the quill pen and the activity and intellectuality of the Australian- people, at least 100,000,000 geese would be yearly required to meet the demand for quill pens. The enormous amount of highly paid labour, which will be required in the work of incubating, rearing and feeding this immense number of geese, ami so on_ Up the point of the production of the finished pen. would alone justify our appeal for these duties. But, further, bearing in mind the great Australian discovery that by clothing them with rugs and draping their legs with pantalets, the vitality of geese is enormously increased, and immediate demand’ would be created for many millions of these articles, and thus unbounded prosperity would be ensured to the hithertoneglected goose-rug and pantalet industry.

But this does not half tell the story. Everything pertaining to the goose can be utilized, even to its cackle.

The cackling of geese, by alarming the sentries, saved ancient Rome, and it is said that a goose by a. well-directed blow of its wing can break a, man’s leg. Why, then, should not our long and unprotected shore line be guarded by young and’ vigorous geese? We could then sleep with safety in our beds, for, ever patrolling our coasts with steady goosestep, our vigilant guardians would instantly warn us by their cackle of impending danger, and till reinforcements appeared would rush with militant hiss_and outstretched necks and wings to meet the foe in combat dire should he dare to attempt to land. This development should enable us to secure an enormous saving in . our defence expenses.

Further, owing to the increasing excitement attending our numerous election contests, a heavy demand is setting in in Australia for well-matured eggs. The superiority of the goose egg as a missile has never been questioned. This opens the road to the establishmentof the election egg industry.

The vast army of workers engaged in the main andcontingent industries above enumerated would require food, clothing, shelter, amusement and luxuries. The whole land would consequently quiver, and rock, and whizz, and throb with the pulsations of industrial activity; the air would resound with the songs and huzzas of a delighted and happy people: while, soaring aloft, exalted over all emblazened on our national banner, would be the goose - fitting emblem of Protectionist Australia.

Have not honorable senators seen arguments of that kind put forward for prohibitive duties. What I have read,I admit is a parody, but it comes very near to being an accurate reproduction of some of the arguments that have been advanced by those who have asked for prohibitive duties.

Having dealt with the way in which this tariff has been built up, let usnow see the way in which Parliament assumed, and provided, that it should be done. The Tariff Board Act 1921 provided for the establishment of a Tariff Board, and sub-section 1 of section 15 of that act provides as follows: -

The Minister shall refer to the board for inquiry and report the following matters: -

Among them is the following: -

  1. the necessity for new, increased, or reduced duties, and the deferment of existing or proposed deferred duties.

The sub-section concludes with these words - and shall not take any action in respect of any of those matters until he has received the report of the board.

By an act of 1924, this section was strengthened by providing that any inquiries by the board must be in public, and that evidence must be taken on oath. Such is the procedure which was laid down by Parliament for altering the tariff. Page 7 of the annual report of the Tariff Board for the year ended the 30th June, 1930, gives a list of the items upon which a tariff inquiry was made during the year 1929-30. During that time 51 reports were made. The annual report of the board for the year ended the 30th June, 1931, shows that 143 reports were made, of which 86 referred to items of tariff revision and requests for bounties. On page 10 of the General Report of the Tariff Board for 1931, we find the following: -

At the 30th June, 1931, the board had on hand 27 references on which inquiries had been completed, and on which reports were in course of preparation, or which were being considered with a view to the preparation of reports. In addition to these, there were with the board 03 references from the Minister, on which public inquiries had not been held. These latter comprised -

That indicates that the Tariff Board had not been consulted by Mr. Forde, because we have before us a tariff schedule containing 400 items. This means that only about 150 of these items have been the subject of reports by the Tariff Board.

I do not wish to do any injustice to the Chamber of Manufactures in New South Wales. I do not suggest that it has fathered this tariff. I hold in my hand a bulletin issued by the chamber on the 15th June, 1931, from which I extract the following: -

Recent tariff criticisms imply that the Chamber of Manufactures is responsible for the whole of the present tariff. These are cither based on a lack of knowledge of the facts or a mischievous attempt to obscure the true position. We protest against the implication that we are responsible for the embargoes, surcharges, and primage duties. These were steps taken by the Government mainly, for iiic balancing of our external trade. They are not part of our protectionist policy.

The chamber has also been held responsible for the tariff on certain industries of a nature exotic to Australia, such, for example, as kraft paper, castor oil, &c. No representations have been made by the chamber in connexion with these or any such; nor has its support been given to the imposition of duties of this character.

In ‘furtherance of its clearly expressed policy for effective protection for maintaining and stimulating industries, both primary and secondary, i the chamber’s representations to the customs administration at Canberra hai’( been made only after the fullest consideration of the needs of particular industries, of their efficiency, and of the Australian market for their products. The combined schedule of 40a tariff variations tabled by the Minister for Trade and Customs in the House of Representatives on the 16th March last, incorporated the whole of the Scullin Government tariff proposals since the 21st November, 1920.

I invite the attention of honorable senators to what follows : -

Less than one-third of these has been the direct concern of this chamber, and they include none of the prohibitions or surcharges. There arc other items upon which the chamber asked for tariff reconsideration, but which the Federal Government did not adopt.

Here we have what I may describe as the highest protectionist authority in the land, the Chamber of Manufactures of New South Wales, disclaiming responsibility for two-thirds of this tariff, and disclaiming also any responsibility for the whole of the embargoes, surcharges, or primage duties imposed by this government.

In view of the tremendous decline in the value of primary production, it is imperative that if Australia is to live, costs of production shall be reduced. The present tariff is the one big and important element affecting costs of production in this country. Let me give some facts, culled from official sources, bearing upon this point. If honorable senators will turn to page 360 of the Commonwealth Year-Booh, No. 23 of 1930, they will find a table showing the index-numbers in respect of wholesale prices in Melbourne from 1861 to 1929. Subsequent figures in this connexion appear in the General Information Circular, No. 4, issued by the Commonwealth Bureau of Census and Statistics, on the 6th October,” 1931. The index-numbers since 1911 are based on the prices of 92 commodities. The methods followed for the computation, of the wholesale price index-numbers aresimilar to those adopted in regard toretail prices. The commodities included,, the units of measurement for which theprices are taken, and the mass-units, indicating the relative extent to which each commodity is used or consumed, are shown in a tabular statement on page- 11 in the Labour Report,’ No. 20 of 1929. The index-numbers have been computed-, for eight groups of commodities, and in. each case with the prices in the year 1911 as the base. They show, for each of theyears specified, the expenditure necessary - if distributed in purchasing the relativequantities indicated by the mass-units of the several commodities concerned - topurchase what would have cost £1,000 in 1911.

Taking the index-numbers for the period from 1926 up to the present, and’ assuming that columns II. (jute, leather, wool, &c), III. (agricultural produce, &c), IV. (dairy produce), and VI.- (meat) represent primary produce, and that the remaining columns I. (metalsand coal), V. (groceries), VII. (building: materials), and VIII. (chemicals) represent industrial products, it will be found that the combined index-number for industrial products w’as maintained approximately at the figure of 1,700 during the years 1926, 1927, 1928, and 1929, and that during 1930 it steadily rose until in June, 1931, it stood at approximately 1,950. In regard to primary produce, however, the indexnumber, with various fluctuations, fell from 1,800 in 1926 to approximately 1,700 in 1929, when it commenced to fall rapidly until in June, 1931, it reached the level of 1,200. Stated in other terms, these figures show that while there has been’ a. catastrophic fall in the prices realized for primary production, costs for all manufactured goods have risen, in the years mentioned from the index figure of 1,700 to 1,950 in 1931.

Senator Kneebone:

– And wage3 have been falling in recent years.

Senator Daly:

– Can the right honorable senator name one item of primary production that is affected by the higher index figure for manufactured products?

Senator Sir GEORGE PEARCE:

– I manic the whole group of primary production, and I cite as my authority the figures supplied by the Commonwealth Statistician. I repeat that the present high tariff policy is an important factor, in the maintenance of higher price levels for goods manufactured in Australia. And this increase in those prices, I remind the Senate, is coincident with the catastrophic fall registered in the prices realized for primary production.

Let us now examine the position of our wheat exporters, with a view to ascertaining how the tariff is affecting our wheatfarmers. I hold in my hand a map of Europe, so arranged as to indicate the treatment meted out to Australian wheat exporters in the various European markets. This shows that wheat is admitted duty free in only two countries - Great Britain and Denmark. In Spain, the quota provided for domestic wheat is 75 per cent., and imports are allowed only under licence. France has imposed a duty of 2s. 6d. a bushel, with a quota of 75 per cent, for domestic wheat, and a special duty upon Australian wheat of 7s. 6d. a bushel. In Germany, the import duty is 6s. 8d. a bushel, and the quota for domestic wheat is 95 per cent. In Poland, there is an import duty of 3s. 6d. a bushel, and an export bounty of 9d. & bushel. In Italy, the import duty is 4s. 7d. a bushel; in Jugo Slovakia, it is ls. 6d. ; in Bulgaria, Sd. ; in Roumania, ls. Id.; in Greece, it is 2s. 3d. a bushel, and the domestic quota 10 per cent. Other countries, which I have not mentioned, have imposed import duties of varying amounts. These barriers to the importation of foreign wheat by European countries rnakes the position of Australian wheat-growers difficult enough without the retaliatory action which has been taken by certain governments, because of our present high tariff policy, the effect of which has been to increase production costs in all branches of our primary industries, and gradually is closing the markets of the world against our growers.

In my judgment, if our primary producers are to have a reasonable chance of success, there must be a reduction of the tariff burden. At the same time, I admit that, in any revision of the tariff downwards, we must have some regard to our secondary industries, many of which are worth while. For these we might reasonably ask the people of Australia to make some sacrifice. Accordingly, we do not propose a wholesale slashing of tariff items; action in that direction might ruin a number of valuable secondary industries. But we do say that the tariff should be thoroughly overhauled, with a view to rectifying anomalies, anc! removing, at least, some of the injustices that are being suffered by our primary producers. In the first place, I contend that the people generally must not be penalized to maintain the mad social and industrial policy that is sponsored by Mr. Lang, the Premier of New South Wales. What has happened in that State recently is within the knowledge of everybody. Let us examine the effects of Mr. Lang’s policy upon the people of New South Wales. That State contains 39 per cent, of the population of Australia. Last year, 85 per cent, of the industrial disputes reported throughout the Commonwealth occurred in New South Wale?.. In other words, 39 per cent, of the population last year were involved in 85 per cent, of the industrial disputes in Australia, and of the £11,500.000 lost in wages, New South Wales, with 39 per cent, of the population, suffered 78 per cent, of the loss.

If we widen the field of survey, we sec the effects of his mad policy even more clearly. An interesting return, published in the Sydney Morning Herald, of today’s date, gives the total of fixed deposits in trading banks in Australia and makes a comparison of the figures relating to New South Wales and Victoria. This shows that for the September quarter of 1930, the total of fixed deposits in the Commonwealth was £179,757,442, of which £69,674,156 was in New South Wales banks, and £62,570,471 in Victorian banks. For the September quarter of 1931, out of a total for the Commonwealth of £179,239,231, the NewSouth Wales balances totalled £61,790,514 and the Victorian balances were £67,811,968. From this return it will bc seen that the bank deposits in New South Wales banks under Mr. Lang’s mad policy, had decreased in one year by approximately £8,000,000, while in the sane State of Victoria, notwithstanding the depression, bank deposits increased by about £5,000,000. Obviously, Mr. Lang’s policy is driving New South “Wales capital to other States, or out of Australia altogether.

Let us look at the position from another point of view. An analysis of the effect of Mr. Lang’s policy upon the unemployment problem shows that since Mr. Lang came into power unemployment has gradually increased in that State, which now has the highest percentage of unemployed in the Commonwealth. Also, the figures are gradually but surely increasing, whereas, in some of the other States, there has actually been a check on the volume of unemployment.

I agree that we should do what we can by means of the tariff to encourage many secondary industries which may be regarded as natural to Australia, but how can we do that without sheltering others, which can only be considered as exotic? On this point, I invite the attention of honorable senators to what a royal commission which recently sat in Western Australia thinks is the effect of the tariff on our primary industries and particularly its effect upon the agricultural industry in Western Australia. On page 70 of its report there appears the following comment : -

The evidence tendered to your Commissioners is almost unanimous in condemnation of the very heavy imposts on the primary producer, due to the tariff, and it is very evident that its incidence constitutes the greatest disability under which the primary producer is labouring. There is no escaping its effects, and if the present protection be the accepted policy of Australia, then, in effect (your Commissioners grant, unintentionally), is destined to crush the primary producer out of existence and, incidentally, have a similar effect on Western Australia, dependent as it is, basically, on primary production.

From page 26 I make the following extract : -

Your Commissioners cannot do better than adopt the words of a resolution passed at a meeting of the Graziers Association, in Melbourne, viz. : - “ . . . That the attention of the Commonwealth Government be directed to the impossibility of growers continuing to produce wheat and wool under present costs, and they be warned that unless urgent action is taken by ra- vision of the tariff, and lowering of taxation, a serious falling off of production must result”.

We cannot shut our eyes to these facts.

I come now to another phase of the New South Wales position. The Government of that State maintains, under State legislation, a basic wage 20 per cent, higher than that which obtains in any other State, and 20 per cent, higher than that which applies in the Commonwealth sphere

Senator Rae:

– What has that to do with the tariff?

Senator Sir GEORGE PEARCE.Does it not affect the industries working under the tariff? We are being called upon to give protection to New South Wales industries as well as to the industries of other States. Upon the 20 per cent, higher basic wage in New South Wales there is superimposed a 44-hour working week. What is happening is that this prohibitive tariff is absolutely necessary to protect these interests of New South Wales. Neither the Commonwealth nor the other States can afford a basic wage as high as that being paid in New South Wales, or a 44-hour week, but while they are denying themselves these luxuries, we are being asked to approve of a tariff which will enable those conditions to be maintained in New South Wales. It is not fair that the Commonwealth and the other States should have to make such a sacrifice for such a reason. The Royal Commission on Child Endowment or Family Allowances, the report of which was ordered to be printed in 1929, investigated the wage position in New South Wales, and on page 64 of its report made the following observations : -

The commission found a tendency on the part of many witnesses to assume that all, or nearly all, the people with large families were on the basic wage, or had incomes not greater than that wage. The facts placed before the commission did not, in our opinion, justify that assumption. The president of the New South Wales Board of Trade, in the declaration of the 8th October, 1920, pointed out “ that by far the larger proportion of the population received a wage rate higher than the prescribed living wage “.

May I interpolate that at the time we were making those inquiries we elicited the- interesting fact that only 6 per cent, of the total number of employees engaged at the Broken Hill Proprietary steel works, at Newcastle, drew the basic wage; all the other employees in that highly-protected industry received more than the basic wage. Surely no one will claim that only 6 per cent, of the labour required in the industry is unskilled for, obviously, a very large part of it must be such. The report from which I am quoting goes on to say that -

The wage rates for mechanics, and the majority of their assistants, and of nearly all partially skilled labour, are above the basicdeclaration. Those in receipt of the basic living wage are confined mainly to limited numbers of employees in comparatively regular employment in hotels, restaurants, and businesses engaged in the supply and distribution of foodstuffs, to lift attendants, watchmen, and men engaged in the least skilled forms of labour in continuous industries. In the majority of well defined industries in the State (New South Wales) by far the larger proportion of employees are paid at rates higher than the declaration.

Figures relating to the State railway systems and those supplied by other large employers, show that the great majority of employees receive more than the basic wage. In the New South Wales railway and tramway system, for instance, with more than 52,000 employees, 13,595 receive from £4 10s. to £4 15s. per week, and 38,839 receive over £4 15s. per week. The figures quoted suggest that the incomes in these groups must, in the majority of cases, exceed the basic wage, plus £13 per annum for each dependent child under fourteen years of age.

Senator Hoare:

– To what year do those remarks refer?

Senator Sir GEORGE PEARCE:

– 1920, but I remind the honorable senator that the ‘ wages paid in New South Wales to-day are as high as those paid in 1920, while the working hours have been reduced to 44 weekly. The conditions to which I have referred would be very desirable if we could all share in them; but they apply to only a comparatively small number of sheltered industries. The conditions in the great majority of our industries are much less attractive. In effect, we are saying, “ We will protect the iron and steel industry of this country to such a point that it will be possible to pay a basic wage in certain branches of it of £6 for a week of 44 hours; but the wool and wheat-growers, who use the products of the industry, must be left in a position which will enable them to pay a wage of only 20s. and tucker for a week of 48 or 50 hours “. That is not fair. A large proportion of our community is being called upon to pay very high duties on the commodities they use to enable a small section to receive a wage of £6 for a 44- hour week. Such conditions would ba good if they had general application, but that is not the case. I maintain that we have just as much right to consider those engaged in our primary industries as we have to consider those who are enjoying the wonderfully good conditions which’ prevail in certain of our highly protected industries. It is manifestly unfair that one section of the community should be called upon to meet the cost of these high duties in order that another limited section may work under conditions that are denied to the great mass of the people.

The annual report of the Tariff Board contains some useful information on the effect of our present policy, and offers some valuable suggestions as to the conditions which should bo observed in determining the proper rate3 of duty on various commodities. At the risk of wearying honorable senators I shall quote some of the observations of the board, because I am afraid that its report has not been widely read. The board gives some general reasons for the making of recommendations against increased duties. The first of these is -

That the increased duties asked for, or proposed, represent a measure of protection out of proportion to the employment resulting from the industry.

It goes on to give three distinct groups of industries to which that condition is applicable. These are -

  1. Those which use wholly imported rawmaterials;
  2. Those which use exportable Australian raw materials;
  3. Those which use non-exportable Australian raw materials.

Referring to the industries which use wholly imported raw materials it says -

It is very necessary to examine the cost to the community of industries which import the whole of their raw materials. In these industries the labour expended in Australia is limited to that necessary for the conversion of the raw material into the finished product. It is sometimes found that the added cwt to the community is considerably greater than the value of the employment resulting from the operations of such industries.

As an illustration of this class of industry the board cites “ Kraft paper “, in respect of which it says -

The principal raw material used in this industry is wood pulp, which is imported from overseas. The board found that the excess cost to users of 17,000 tons of Kraft paper, estimated to be consumed annually in Australia over the cost of importing on a duty free basis, was £12 10s. per ton (equal to £212,000 per annum). This excess cost was made possible, by a duty on Kraft paper of £10 per ton under the general tariff, and by the imposition under the Customs Tariff (Industries Preservation) Act 1921-1922, of a dumping duty on Kraft paper to bring the minimum cost of importing such paper to not less than £34” per ton. The whole of the wages paid for direct labour in the manufacture of the paper in Australia represented only £4 10s. per ton. In fact, the excess cost of tha local product represented more than the total expenses incurred by the Australian manufacturers in wages, coal, power, overheads and depreciation.

In the opinion of the board that kind of thing should be avoided.

Senator Daly:

– That is the kind of thing we are avoiding.

Senator Sir GEORGE PEARCE:

– The report of the Tariff Board does not support the honorable senator’s opinion. Another of the main reasons why the board has made recommendations against increased duties is -

That the loss of revenue which would result from the imposition of increased duties would be out of proportion to the wages that would bo paid in producing the goods in Australia.

In this connection the board says -

In cases where duties imposed essentially for thu purpose of raising revenue are so fixed a3 to bo highly protective, the natural result is, of course, the encouragement of local production of the goods concerned, possibly to such an extent that the revenue which would otherwise be derived from the duties, would bc seriously diminished. In some instances the loss in revenue from the customs tariff due to the local production of goods has been offset by the imposition of excise duties on the Austraiian products. . In such cases the margin between the rate of duty under the customs tariff on the imported goods, and the excise duty on the local product represents the tariff protection to the Australian industry.

The board regards petrol as “ a striking illustration of an uneconomic margin be tween import and excise duties “. That this is so was disclosed at an inquiry recently held by the board into the subject of the refining of crude petroleum in Australia. That investigation showed quite clearly that by pursuing its present policy in regard -to petrol production the Government was sacrificing a revenue of £500,000 per annum in order to obtain the advantage of an expenditure in Australia of £90,000. It referred to this as a case of uneconomic tariff imposition. It must be evident to every honorable senator that it is uneconomic for us to sacrifice more in revenue to establish an industry iu Australia than the industry itself will pay in wages after it is established.

Senator Daly:

– What about the gold bounty?

Senator Sir GEORGE PEARCE:

– I realize that the honorable senator would like me to talk about anything on earth except the tariff, but I do not intend to be drawn away from my argument. The board, on page 15 of its report, refers to “ the effect of the imposition of increased duties on undertakings concerned with developmental works and essential public services,” and alludes to requests made for the imposition of duties or the provision of increased duties on certain telephone and telegraph apparatus. It pointed out that these requests were designed to prevent importations of such apparatus of a total value exceeding £200,000 per annum with a view to their production in Australia. But it went on to show that if the prohibitive duties asked for were imposed, not only would serious additions be necessary to the cost of installing telephones in Australia, which would tend to restrict development, but that the costs of services already installed would also be increased. These points should surely be given careful consideration. The board then refers to another aspect, in the following paragraph :-

  1. In the case of some classes of goods there exist extensive ranges of types, patterns, and designs, increased duties on which would tend to encourage attempts on the part of local manufacturers to produce the complete range rather than to concentrate on the production of those lines for which there is a. more general demand, and which are more capable of economic manufacture in Australia.

It goes on to say -

As examples of goods of this nature might be mentioned glassware,chinaware, manufactures of rubber, and manufactures of paper. In regard to such goods, the board considers that it is in the best interests of the com munity that Australian manufacturers concentrate upon those lines which offer scope for economic local production rather than attempt the manufacture of lines the demand for which is limited, with consequent abnormally high costs of production and resultant serious added costs to consumers.

Another rule laid down is as follows : -

  1. The imposition of increased duties would merely place a serious burden upon the users of the goods concerned in a futile attempt to establish the industry in Australia onan economic basis.

Giving examples of that, the board deals with the cases of cornsacks, aircraft and sewing machines. Time will not permit me to read all that they say, but their remarks are well worthy of the consideration of honorable senators. At page 20, there is reference to -

  1. The risk of the imposition of increased duties jeopardizing the export trade of the Commonwealth with countries supplying the goods in respect of which the increased duties were sought.

That is a very real danger. Already, we have had examples of retaliation by different countries on account of. duties that we have imposed. There is only one other paragraph that I desire to read, and it deals with what is called “ The tariff habit”. The board says -

page 1301

THE TARIFF HABIT

In the course of the inquiries conducted by the board during the year under review, there has not been lacking evidence of the tendency of some manufacturers to turn to the customs tariff for assistance without first making reasonable efforts to increase their production by other means available to them. The fact that other manufacturers “had received assistance through the tariff appeared to be the motive that prompted some to apply for very high duties. In some instances where manufacturers did not actually seek increased duties, they appeared before the board to support proposals for such duties. It cannot be too plainly stated that the board, in dealing with requests for duties will continue to thoroughly investigate the efficiency of the plants and methods of production of the applicants, and those supporting the requests. The board will also take into consideration the extent to which the industry is natural to Australia. The chief factor that will ultimately count in the recovery of Australia from the present difficulties is reduced costs of production on the part of both the secondary and primary indus tries. These difficulties will never be overcome by simply raising the duties under the customs tariff. The danger of too much tariff assistance lies in the development in industry of a sense of dependence upon governmental assistance rather than in the promotion of earnest effort to self-reliance and maximum of efficiency.

That is not the opinion of freetraders, but of declared protectionists who have had an unexampled opportunity of reviewing the effect of our protectionist policy, and of hearing and sifting the evidence given in support of additional duties. I regret that the Government did not read and study this annual report more closely, and that it has not been guided in the framing of its tariff by the considerations that are put forward in it. I wish to quote also from The Australian Tariff; an Economic Enquiry by J. B. Bridgen, D. B. Copland, E. C. Dyason, L. F. Giblin, and C. H. Wickens. At page 3, they give their conclusions following upon their investigation of the tariff, in which they say -

We give here for convenience a summary of our main conclusions on the effects of the tariff as a whole, as discussed in the appropriate parts of the report. The summary statements necessarily omit the qualifications, as well as the general reasoning, and should bo considered as merely provisional -

The tariff imposes heavy costs, but there are compensations. Australian resources in relation to population are sufficient at present to carry without distress any net burden there may be.

The adoption of a considerable, but not unlimited, amount of protection is justifiable on economic grounds in the circumstances of Australian industry. But the extreme applications of the tariff have undoubtedly been a cause of net loss. Further extensions may involve a more than proportionately increased loss.

The principal effect on production and employment has been to divert them from export industries to protected industries.

We estimate that Australian products which are protected cost £36,000,000 more than the same goods could be imported for duty free. In considering the costs of protection, we take no account of the added price of imported goods, . because the duty paid goes to the Treasury,and takes the place of other taxation.

There are other interesting paragraphs that’ I could read, but I pass them over. [Extension of time granted.] I point out that those gentlemen weres dealing with the tariff of 1929, which was only half as high as that which is now in operation. What would they have said had they been dealing with existing conditions?

Let us see how these high duties operate. Take the case of a British machine costing f.o.b. £100. Under item 176 f 1, the duty is 55 per cent, ad val. Freight and insurance varies from H per cent, to 15 per cent, and higher, but for the purposes of my illustration, I shall assume that in this case it is 12-j per cent., or £12 10s. Commission to home agents, shipping and paying manufacturer, at 2^ per cent, on £112 would amount to £2 16s. 3d. Exchange, at 32^ per cent, on £115 6s. 3d. would be £37 3s. 9d. Duty at 55 per cent., and primage on £110 would represent £71 10s. Wharfage, landing, and delivery charges, 4 per cent., would bring the total to £228. Then there has to be added 6 per cent, sales tax on the basis of 10 per cent, gross profit, amounting to £16 6s., raising the figure to £244 6s. The landed cost, exclusive of profit, equals 144^ per cent, on the f.o.b. cost. The Commonwealth Government imposts alone, in duty, primage, and sales tax, exclusive of exchange, represent 87£ per cent. Now we have to add another 50 per cent.

Senator Sir GEORGE PEARCE.Probably not; but that is a very small item. Leaving that out of account, the duty, which nominally is 55 per cent., is actually 120 per cent, when all those other impost’s are taken into consideration, and that on an item in connexion with which we are supposed to give Great Britain a preference.

I propose to examine the question : Are these high duties necessary; and if they are, what makes them necessary? Iron and steel form the base of a great part of our secondary industries. Are we sound at the base? What is the use of fulminating against the duty on galvanized iron? What we have to consider is the duty on pig iron. If that duty is fixed at a prohibitive rate, the duty on every other product of which iron forms a part must be fixed at a similarly prohibitive rate. The duties on pig iron are 25s. British, 35s. intermediate, and 45s. general. The next stage of manufacture is the ingot, the duties on which are 42s., 62s., and 75s., respectively. Then we come to bar iron, with respect to which the figures are 80s., 110s., and 130s., respectively. In every case, there must be added 30 per cent, exchange, 10 per cent, primage, and the 50 per cent, surtax. A statement that I have received shows that the lowest wholesale British price for structural steel joists, &c, is £7 7s. 6d., for merchant bars £6, bolt steel £6, pig iron £2 18s. 6d., billets £5, and sheet bars £4 12s. 6d. Therefore we have a straight-out duty of 25s. a ton, excluding all other charges, on British pig iron- that is sold at £2 18s. 6d. f.o.b., representing approximately 40 per cent.; to which must be added 10 per cent, for primage, 30 per cent, for exchange, and 50 per cent, for surtax. If we place a duty of 130 per cent. on what is at the base of all our iron industries, what sort of a pyramid shall we build upon it? These products are manufactured by the Broken Hill Proprietary Limited, and the Australian Iron and Steel Works, Port Kembla, both of whose works are highly efficient, and splendidly equipped and laid out. I do not think that their capital is watered, or that it is excessive. Why can they not compete with a reasonable duty? It is because they have to operate in New South Wales under the conditions to which I have alluded - a 44-hour week compared with 48 hours in the rest of Australia, a basic wage 20 per cent, higher, child endowment, and many other industrial handicaps. Can. Australia afford to fix her tariff at a high rate for the purpose of keeping such things going ? Should the rest of Australia be penalized in order that these industries shall maintain these luxury conditions ? There must be a reduction of these basic duties, conforming to the economic scale of other industries in Australia. If that were done, other duties, such as those on galvanized iron, of which we hear so much, would automatically adjust themselves. I submit that only in this way can unemployment be lessened. What is the good of these duties to these highlyefficient industries, when they can run only at 40 per cent, of their capacity, thus adding to the cost of manufacture, and preventing them from showing their noses outside Sydney Heads? We cannot send a ton of our manufactures of any kind outside the tariff boundary. Oan we expect ever to produce lusty and vigorous industries under these hot-house conditions? We cannot. We should face the position immediately, -and place our industries on a basis that will enable them to live healthily and do something to assist Australia’s export trade.

I omitted earlier to give figures relating to factories in New South Wales. The following appeared in the Sydney Morning Herald of the 19th instant: -

Every business man knew that New South Wales had suffered more seriously by the present crisis than the other States. For the vear 11)28-29 wages paid in Australia aggregated £90,980,908, and for 1929-30, £84,717,033, a reduction of £0,269,875, or 0.9 per cent. The reductions were distributed as follow: -

In 1928-29 there were 450,482 hands employed, while in the succeeding year this number had fallen by 31,288 to 419,194, a reduction of 7 per cent. Those figures wore apportioned among the States as follow: -

The mad social and industrial policy in force in New South Wales is creating unemployment and reducing the output of its factories. How can we, by anything we may do, improve the position while this tariff is in operation ?

I now wish to show, by quoting some v classes of imports on which an increased preference to Great Britain would be of real value, how we can increase our trade with Great Britain. The commodities and total imports are as follow : -

I have selected ‘ these only as sample items showing that we can so shape the tariff as to encourage and give greater preference to British trade without injuring our own industries. The tariff rates must come down in order to reduce costs of production in our primary industries, and thus enable them to carry on.

In reducing the tariff, regard should be paid to (1) our own economic secondary industries; (2) British trade; and (3) foreign nations which are good customers to Australia. I have before me a list showing the volume of our trade with foreign countries. I find that in the case of France our total imports for the year 1928-29 amounted to £3,700,000, while our total exports to that country were valued at £15,000,000. There arc some things we import on which the duties could be lowered, so enabling us to take them from France. I am not saying that in giving preference to Great Britain we should lose sight of the fact that other countries are good customers of ours. For instance, our total imports from Germany during the year 1928-29 were valued at £4,500,000, while our exports to that country amounted to £9,700,000. There are some commodities in connexion with which Great Britain is not a competitor on which the duties should be lowered. Our total importations from Japan during 1928-29 amounted to £4,700,000, and our exports to that country to £11,500,000. In the case of silk piece goods, raw silk and certain kinds of timber there is no reason why in framing the tariff consideration should not be given to the fact that Japan ii a good customer of ours and that almost prohibitive duties should not be imposed upon the commodities I have just mention which we import from that country. When we come to our trade with the United States of America, we find that our total imports from that country during 1928-29 were valued at £35,000,000, while our exports to it amounted to only £5,800,000. It is also significant when one examines the items in the schedule that a great number of the commodities imported from the

United States of America could be imported from the United Kingdom.

It is upon these lines that I suggest that we should examine the tariff. We should not wildly slash at it, regardless of the result of our action. I believe that if we do as I have suggested, we shall be able to make a very substantial reduction in many of the rates. This tariff was introduced in abnormal times. Those abnormal conditions have passed, and I submit that, even if these rates were substantially reduced, there would be no rush of imports to this country, for three reasons: Firstly, because our purchasing power has decreased; secondly, for the reason that we are not borrowing abroad, and, thirdly, because of the heavy rate of exchange. The reasons which may have justified the Government in introducing these prohibitive duties have now passed away, and we are in a position to deal with the tariff in a normal way. I invite honorable senators not to be led away by arguments as to the adverse trade balance, because the conditions which it was claimed, justified these prohibitive duties have passed away. A rectification of the position can be found in the high exchange rate, an easing of our loan policy, and the reduced purchasing power of the people.

Debate (on motion by Senator Payne) adjourned.

Sitting suspended from 6.18 to 8 p.m.

Private business taking precedence after8 p.m.,

page 1305

CUSTOMS BILL (No. 2)

Motion (by Senator Sir Hal Cole- batch) agreed to -

That leave be given to introduce a bill for an act to amend the Customs Act 1901-1930.

Bill brought up by Senator Sir Hal Colebatch, and read a first time.

page 1305

SUGAR

Proposed Reductionin Price

Senator Sir HAL COLEBATCH (Western Australia) [8.2]. - I move-

That, in view of the admitted necessity for a reduction at an average rate of twenty per cent, of all governmental expenditure, including salaries, wages, pensions and social services, and of all interest rates, rents, andother emoluments in order that equality of sacrifice may be obtained, this Senate is of opinion that the Sugar Agreement should bo amended to provide for an equivalent reduction in the price of sugar to the Australian householder.

I should be under an obligation to apologize to honorable senators for the length of time this notice has appeared on the business-paper, were it not for the fact that I think it is well known to all of them that it is entirely due to circumstances beyond my control that it has not been proceeded with at a much earlier date. I do not intend to traverse again the ground that was covered by me on a motion of a somewhat similar character, though for a different purpose, which was discussed in the Senate a few months’ ago. All that has happened since I gave notice of this motion has strengthened the case for it. We have passed the stage at which the necessity for a reduction of 20 per cent, became apparent, and this reduction has actually been carried into effect almost universally in Australia. As a matter of fact wo have shortly to consider a bill to make a compulsory reduction in interest rates against those persons who did not agree voluntarily to accept a reduction in the rate of interest that they were to collect upon their government securities. All that has happened in the last few months has simply made more imperative than ever the carrying of a motion of this kind and taking of the action upon it, if we are to obtain anything like equality of sacrifice.

I want to dissociate myself entirely from any desire to injure the sugar industry of Queensland. I have no personal interest in it. Others may be intimately concerned in its prosperity, but I claim that I am just as eager as others to see it flourish, and, so far as affording protection to it is concerned, I have no hesitation in saying that a rural industry in the present circumstances of Australia is. more deserving- of protection than most of the city industries. With me it is a question of seeing that there is fair play as between- one industry and another. My argument to-night is not that protection should be withdrawn from the sugar industry, but that the industry should be treated on a fair basis compared with other industries.

Since tabling my motion I have received an enormous volume of correspondence connected with it, a great deal of which has come from people in Queensland, who affirm, with every appearance of sincerity, their eagerness to see the industry prosper, but, at the same time, are entirely opposed to the conditions under which it is now carried on. I intend to draw attention to two means by which, in my opinion, which is supported by many who know more about the industry than I do, a reduction equal to the reduction I suggest may be brought about without doing any real injury to the industry. In fact the adoption of these methodswould have the result of placing it on a much sounder basis than it has ever been before.

In the course, of the remarks I made when discussing a previous motion, I mentioned that one factor in. bringing about the high cost of sugar was the growing of cane on unsuitable land. When I made that statement Senator Daly interjected that my remarks applied not to Queensland, but to New South Wales. Having, some years ago, visited the sugar lands of New South Wales and Queensland, I ventured even then to contradict the honorable senator’s statement, but I have since made a closer investigation and have found that my original assertion was absolutely correct. Much of the extravagant cost of producing sugar at the present time is due to the growing of sugar cane on unsuitable land in Queensland itself. Mr. Townsend, the representative of the Commonwealth Government on the board which fixed the present price of sugar, and who was one of those who signed the majority report against any reduction in the present price, gave evidence before the Royal Commission on the Constitution. His evidence will be found on page 321 of the report of the evidence. He made several statements which clearly demonstrate the truth of the assertion that I have just made. He said -

Laud which would be dear at £20 in the south is cheap at £60 in the north:

On the same page of the report of the commission he is reported as having said -

The more wo grow the higher must be the price if the industry is to be maintained.

And he followed up that statement by a reference to the growers in the southern portion of the State, in whose interests chiefly the present exorbitant price of sugar has to be maintained; because the growers in the north could produce it at a much cheaper rate. He said -

Ultimately, I feel certain that most of these growers will drop out of the industry. It will be concentrated almost entirely in tlie far north, where the cost of production is less than elsewhere, and where the climate is perfectly suitable. In the far north the average length of time necessary to produce a crop of cane to the point of fruition is 14 months as against 18 months in the south of Queensland and 24 months in New South Wales.

Mr. Townsend, the representative of the Government on the board which was fixing the price of sugar, and one of the signatories to the majority report against a reduction in the present price of sugar, justified the idea of confining the production of sugar to laud suitable for it, as a deliberate means of assisting a bona fide industry in Queensland, and of reducing the present cost to consumers.

Since then, I have had a good deal of information from Queensland relating to the average yields in different localities. I propose to read one statement furnished to me. Its value depends on the accuracy or otherwise of the assertions made in it. It reads as follows: -

It is rightly contended by many growers in North Queensland that, while Australia owes the sugar industry a measure of support commensurate with the disabilities placed upon it by the White Australia policy, those engaged in this industry owe to the Australian public in return, a genuine and honest effort; firstly, to produce a reasonable quantity of sugar for home consumption; secondly, to produce a further quantity of sugar for export commensurate with the obligation placed upon other primary industries to contribute towards meeting our overseas obligations; and, thirdly, to confine sugar production to land most conducive of low production costs, or at least, to refrain from restricting the use of such land while thousands of acres of inferior land in uneconomic localities remain under crop, and thereby unduly inflate the cost of production.

Senator Sir HAL COLEBATCH.How can it apply to wheat? If the price of wheat falls below the world’s parity, the wheat-grower has to suffer the loss.

Senator Sir HAL COLEBATCH.I ask the honorable senator to remember that if the wheats-grower who produces from £25,000,000 to £30,000,000 worth of wheat on an f.o.b. basis is lucky enough to receive assistance to tide him over his difficulties, it will be to the extent of only £3,000,000 once, and probably once only, whereas the sugar-grower who produces sugar, which on a f.o.b. basis is worth about one-sixth of the annual crop of wheat, has been receiving from the Australian public every year a bounty of at least twice the amount that is now proposed to be paid to the wheat-grower.

Senator Sir HAL COLEBATCH.I am prepared to prove their accuracy. But the point is that this excessive price of sugar is rendered necessary by the fact that the owners of sugar-producing land of the very best quality, and capable of producing at the lowest cost, are prohibited from growing cane upon it in order that the owners of inferior lands in less, suitable localities may have an opportunity to grow sugar and participate in the bounty. This statement continues -

For many years past sugar production figures have definitely disclosed that the natural home of sugar production is the territory situated north of Townsville. Cane tonnage per acre and higher sugar contents of cane produced on these rich lands as compared with th6 production of southern areas sharply divide the lands under sugar crops in this State into two classes, namely: -

Rich land along the coast belt north of Townsville which, owing to superior fertility and climatic conditions, is capable of producing sugar to an extent that would enable a substantial reduction in prices to be made to the Australian consumer while still returning a profitable income to the sugar-grower.

Senator Sir HAL COLEBATCH.I think it is the opinion of a great many people, judging by the many letters I have received in this strain.

Senator Sir HAL COLEBATCH.It is all very well for Queensland senators to interject. They will have an opportunity afterwards to question the facts and figures which I propose to submit. The statement continues -

  1. Land situated south of Townsville which, by reason of its lower fertility, cold winters, and droughts, cannot return a safe average income to farmers even under existing inflated prices. As an illustration of this, the following comparison is worthy of note: -

Is it not obvious that, if the price of sugar is to be fixed at a level to ensure a profit to the owners of land, capable of producing only a little over a ton of sugar per acre, the price must be extravagantly high for the owners of land that will produce more than 2 j tons per acre?

Senator Sir HAL COLEBATCH.That phase of the industry does not enter into the argument at the moment. Does the honorable senator dispute the fact that the production in. the one area referred to is. only a little over a ton per acre, whereas in the other case, it is equal to 2£ tons per acre?

This is a typical illustration of sugar produced in North and South Queensland, and shows that every acre under crop in the north can produce more than double the sugar won from an equal area in South Queensland.

I do not profess to have an intimate knowledge of the industry, but this statement confirms all that I was told during my visit to both the southern and northern sugar-growing areas of Queens- land some years ago -

In spite of this and the claims of sugar organizations to an embargo for the ostensible purpose of peopling the coastal north, the Queensland Government, through its cane prices legislation, refuses to permit any more of the rich undeveloped coastal areas of the north to be assigned to mills for sugar production, while thousands of acres in the southern portions of the State are granted. this privilege,’ notwithstanding that the latter areas can never profitably produce sugar crops without placing a high artificial impost upon the Australian consumer. It is true about a score of sugar mills are established in the several producing areas south of Townsville. These vested interests fight hard to keep their mills running in these localities, but no other industry in Australia is permitted to levy toll upon the consumers of this continent to maintain economically unprofitable . ventures, and, if sugar is to get down to a permanent stable basis, it must cease to be the exception in the above-indicated manner.

There must be a show-down sooner or later, and when this comes some startling facts which powerful organizations have succeeded in hiding in the past, will come to light. Among them, I contend there will appear the following: -

That thousands of acres of the most fertile land best situated for the sugargrowing are, by legislation, held out of production.

That, instead of the sugar industry peopling the coastal north as it promised to do in return for the embargo, it is by legislation prohibiting expansion of settlement in that area.

A heavy toll is at present being laid upon Australian consumers to provide profits on the capitalization on the score of uneconomical mills in the South and Central Queensland, and this is the reason why sugar prices were not reduced under the new agreement.

Wages under the sugar award are higher to-day than they were when sugar was worth £10 per ton more than it is now, and in this connexion it is worthy of note that one of the conditions of the new agreement provides for the maintenance of existing awards and for their extension to other industries, apparently in other States which derive some direct benefit from the sugar industry.

If sugar production is to find a sound economic level the minds responsible for its administration must be directed along the foregoing channels, and the appointment of whitewashing tribunals for whatever object should definitely cease.

North of Townsville, according to the report of the commission, there are fourteen mills, which produce 334,671 tons of raw sugar, or an average of 23,847 tons per mill. South of Townsville there are 21 mills, which produce 186,798 tons, or an average of 8,609 tons per mill. That is to say, the average production of the southern mills is about one-third that of the northern mills, in spite of the fact that some of the southern mills have an output capacity and bookvalue in excess of some of the mills in the north. In the northern areas, assigned land is worth from £30 to £40 an acre, compared with £2 to £6 per acre for unassigned land, which is in every respect equal in quality to the assigned land. In the southern areas, assigned land is worth from £20 to £25 per acre, and unassigned land from £1 to £2 per acre.

In many parts of the world it is realized that no country can afford to use its land for other than the most suitable purposes. If we have anything at all to fear from the competition of Russia in the sale of our primary products, it will be chiefly because the five-year plan, adopted in Russia, definitely aims at putting land to its most profitable use.

The Economist, commenting on the Russian five-year plan, states -

Of all the grandiose schemes with which the Commissariat of Agriculture has been identified, the most daring is that of attempting to reshape the agricultural geography of the country. We are witnessing in Russia to-day an endeavour completely to uproot century-old divisions of crops. And the most daring and the most fateful is the moving of the wheat belt up to the confines of Asia. At present the Ukraine, the Kuban and the Northern Caucasus constitute the main granary; but it is contended that it is wasteful to grow wheat in such areas, which could more profitably be utilized to raise more valuable crops.

We shall not succeed in competition with the rest of the world if we insist on adopting utterly uneconomic methods; that is to say, if we continue, by means of subsidies in various forms, to bolster up the use of land for purposes never intended by nature. This policy must eventually react to the detriment of those areas which are suitable for a particular purpose.

The present sugar policy is in the alleged interests of the north. But -is it not obvious- that it has the opposite effect since it prevents northern lands, which are more suitable for sugar-growing, from being utilized, for that purpose? Cannot honorable senators see that this policy is uneconomic and wholly unjustifiable? To my mind, the question admits of no argument. We cannot expect to place the sugar industry on a satisfactory basis if we continue to bolster it up by such an uneconomic method. We should have exactly the same condition of affairs in other industries if our general tariff policy were based on the necessity . to impose protective duties sufficiently high to enable the most ineffective and uneconomic plants in a. given industry to return a profit, and gave the same measure of protection to a highly-efficient plant. Obviously, what would be merely sufficient for one industrial plant to survive competition would enable another to exact exorbitant profits from the people.

We should also consider the effect of this policy which requires the refining of the total sugar production. The price for Java unrefined sugar two or three months ago - I am speaking from memory, and I do not think there has been any alteration in prices more recently - was £6 5s. per ton. The industry in Java pays high wages to the Dutch employees, but very low wages, of course, to the Javanese who cut the cane. Freight is about £2 per ton, so it should be possible to land mill-white Java sugar in the north of Australia at about £8 5s. per ton. On this subject, a correspondent from Northern Queensland writes as follows : -

Dear Sir,

I take the liberty to draw your attention to a phase of the sugar embargo that is overlooked by its advocates, also its opponents, The proposed sugar agreement gives the Colonial Sugar Refining Company a monopoly of the production of refined sugar, ‘.There is a sugar company, the Millaquin, in Queensland, which should bo considered. The Colonial Sugar Refining Company’s refineries, according to the Commonwealth Year-Book, employ less than1,200 men, yet they pay dividends on a capital of £4,000 per employee. Considering that £1,000 capital per employee is the fair price of a refining plant same as the Colonial Sugar Refining Company, the Colonial Sugar Refining Company is overcapitalized to the extent of £2,500 per employee.

There is also another matter in connexion with the embargo that is not sufficiently considered by the Federal Government - the production and sale of mill-whites. Australian mill-whites are good enough for any Australian table, and could and also should be sold from Cairns to Geraldton, in Western Australia, at1d. per lb. less than Colonial Sugar Refining Company sugar.

I think the Senate should insist on an amendment to the sugar agreement giving the people of Australia a, free market for Australian mill-whites - in other words, that the sugar mills should have the right to produce and market mill-whites uncontrolled by the Colonial Sugar Refining Company. Also, that the price of sugar bo reviewed every twelve months.

I do not know that we need argue whether mill-whites is good or bad sugar. All that this correspondent asks is that the people should have an opportunity to buy it if they wish to do so.

Senator Sir HAL COLEBATCH.The writer states further -

The sugar farms of North Queensland are over-capitalized. Farms that could be bought for £1,000 in 1918 are valued at £8,000 to-day. the cutters earn big money it is true. But inside of twelve months probably the new sugar-cane harvester, which is reckoned on doing the work of 50 cane-cutters, will probably be in full swing, just as the stripper harvester in the wheat fields did away with a score of men.

That is purely speculation. We shall learn from the Queensland members of this chamber to what extent it is to be carried out -

Machinery in the cane-fields will enormously reduce the cost of production. Therefore, it is only right that the price of sugar should be reviewed every twelve months while the embargo is in force. Assuming that, the people of Australia consume 350,000 tons of sugar a year, and one-half of it is mill-whites equal to 175,000 tons. Well, 175,000 tons of mill-whites sold at1d. per lb. less than the Colonial Sugar Refining Company’s whites would mean a saving to the working class of Australia of £1,633,333 per annum. I think our Labour politicians, should consider this matter seeing that the unemployed have doubled in numbers during the last twelve months, and is estimated at 400,000 by many trade union officials. Instead of a refinery in North Queensland, sugar has to travel800 miles to- Brisbane to be refined, and then railed or shipped “to North Queensland to the consumer, who thus pays £5 a ton freight and handling charges for the benefit of the Colonial Sugar Refining Company. Mount Isa is603 miles from Townsville. The majority of the stores charge 7d. a lb., one store charges 6d. If the sugar-mills of Queensland had a free market in Australia uncontrolled by the Colonial Sugar Refining Company, mill whites could be sold in Mount Isa for 5d. a lb.

The Java mill-white is not raw sugar. Before the embargo became operative, it was used without further refining by Australian manuf acturers, just as they are using white sugar to-day. I do not wish to enter into an argument as to whether it is good or bad sugar, but I contend that if people want mill-white sugar, they should be allowed to buy it. I am sure that the Tasmanian fruit-growers would he very glad of an opportunity to buy mill-white sugar at a reasonable price. If they could get it at £8 5s. a ton it would be wonderfully helpful to their industry.

SenatorReid.- They can get millwhite sugar if they want it.

SenatorReid- I do not know.

Senator Sir HAL COLEBATCH.The honorable senator can talk loudly about repudiation when it suits him. Apparently the sugar agreement is the only one which must remain sacrosanct. The contracts made with many poor people in the community may be broken, but the contract made with the rich Colonial Sugar Refining Company must, in no circumstances, be altered!

Some little time ago I received a letter from Charlick Brothers Limited, a large storekeeping firm, of Adelaide, from which I quote the following paragraphs : -

The restricted purchasing power of the housewife makes it impossible to make jam when the price of fruit nominally .is Id. per lb. and sugar 4M. and consequently we are sacrificed to the sugar embargo. Jam to-day is regarded as a luxury, a li lb. tin costing lOd, when the 2 lb. used to be 5d. Storekeepers have to prepay the price of half-ton lots, and a large number of them have not the ready money to do this, and, therefore, have no supplies … It is a fact that during the rush season, each year, they restrict their supplies to the trade, and I al prepared to swear by affidavit that we and other storekeepers cannot get all our requirements, nor can we get a good sample of millwhite sugar from them; they will only supply a piebald quality at 30s. cwt, aud this same lot is sold for £8 odd per ton f.o.b. Cairns to overseas. “ The whole thing is monstrous.

The sugar for which these people are asked to pay 36s. a cwt. is being sold in Cairns for export at £8 per ton. There is nothing unusual in the sugar industry receiving assistance by way of bounty in order that it may be established in a country. I have no objection to offer to such a policy. But I ask honorable senators to remember that although Australian sugar is being sold in London at 2£d. per lb., and in New Zealand at 5 lb. for ls., the price of it in Australia is 4£d. per lb. While Australian sugar is being sold in London at 2-Jd. per lb., the beet sugar industry is being successfully established in England at present. The romance of Britain’s youngest industry, the growing and refining of beet sugar, is fully described in an official report issued recently. It is the agricultural industry in which the State takes the greatest interest; for the State has invested nearly £30,000,000 to encourage it’s development since 1925. In the latter year the acreage under sugar-beet cultivation was a mere 16,000. To-day it is 350,000. There are 40,400 growers cultivating sugar-beet, and eighteen factories are handling it. The factory workers have increased from 1,159 in 1925, to 9,900 in 1930, although improvements in factory organization have trebled the amount of beet handled by each worker. In six years the industry has created 60,000 man-years of employment, aud in 1929 alone 17,000 man-years of employment were provided at. a cost of £1,500,000 in wages. Britain by this means now produces one-fifth of its sugar consumption.

The subsidizing of sugar-growers seems to be a bone of contention in all countries which produce it, either from cane or beet. In Australia, the bonus to the Queensland industry is frequently a subject of dispute, but it is interesting to read the report that no country has yet succeeded in establishing a sugar-beet industry without State assistance. The British industry has been carefully nursed since the war, which taught the country the fallacy of relying solely on oversea sources of supply. The present subsidy is due to end in 1934, and whether it will be continued or not after that date is sure to become an important political issue. Present intentions are to end it, and if these are carried out, the industry will have to solve certain important internal problems. Chief of these is that of reconciling the home-grown sugar interests and the refining interests. The seven years’ test of cultivation on commercial lines has proved that Britain is eminently suitable for sugar-beet cultivation. There have been successful growers of crops in every county of England and Wales, and in some counties in the south of Scotland. The sugar content of the beet compares favorably with that obtained abroad. As to the cost of production, the British cost per ton, £1 9s. 9d., is less than the cost in France and the United States of America, and only slightly more than the cost in Belgium and Germany. That British industry is being built up with ^moderate assistance, and at no great cost to the consumers, even though Australian sugar is being sold in competition with beet sugar at 2£d. per lb. Are we to admit that we cannot produce sugar without imposing an enormous burden upon our people, without demanding sacrifices unheard of in any* other country in the world, and without imposing embarrassing burdens upon every other industry which is dependent upon sugar as one of the elements * in the production of its product?

I come now to the sugar agreement. It is a matter of common knowledge that the embargo against the importation of sugar, which is at the very foundation of this agreement, has been imposed for a great number of years, extending over the lives of three or four parliaments. The agreement has never at any time been submitted to Parliament for its consideration. We may hear a great deal about the moral aspect of this case, but I have no hesitation in saying that it is utterly immoral and wrong for a government to enter into an arrangement of this kind without the consent of the. representatives of the people who sit in both Houses of the Parliament. Legal opinion has been taken as to the validity of this agreement. Honorable senators may recollect that steps were taken some time ago to bring a case before the High Court in this connexion, but it was held that those who had instituted the action had not a sufficient interest in the matter to justify the court hearing the case. Three eminent counsel have supplied to the Sugar Consumers Association the following summary of their opinion on the legality of the agreement : -

In our opinion, the sugar agreement i3 not legally binding on either party to it, i.e., either party may, if it choose, disregard it in full confidence that the other party could not successfully appeal to any court-of law for redress or remedy. A court would refuse to enforce the agreement not because either party had thereby agreed to do anything unlawful or unconstitutional, but simply on the ground that neither government could bindingly fetter its future discretion or action in the matters covered by the agreement. So long, however, as each party continues to observe the agreement, it is doubtful whether the court would at the instance of a member or members of the public go so far even as to declare that the agreement would be unenforceable in the contingency of cither party disregarding it. Such action the court might regard as futile inasmuch as notwithstanding any such declaration each government could still observe the terms it had agreed to or .it least continue the course of conduct set out, for it in the agreement.. Action (other thai, that of either of the governments) to test the validity of the agreement would lie only in the form of a suit for such a declaration. The granting of such a declaration by the court would be purely discretionary, and, in the circumstances of this case, by no means assured. . .

Speaking on a similar matter in the Senate a few months ago, I mentioned that, whereas early last year the price of shares in the Colonial Sugar Refining Company was something over £40 a share, it dropped steadily to considerably under £30 a share, when it became clear even to the shareholders that the agreement would not be renewed in its existing form ; but when the report of the Sugar Investigation Committee was presented, and the agreement was renewed, the price again climbed, until to-day the shares are quoted at over £40. There is no banking or other concern in Australia that, within my knowledge, has not been compelled to write down its capital to a considerable extent; no other concern the shareholders of which have not been obliged, if they wished to realize, to sacrifice a substantial portion of their assets. Even the person who purchased government bonds as late as December last is compelled to-day, if he wishes to realize on his assets, to agree to a discount of something like 14 per cent, or 15 per cent. You have to turn to this industry to find the solitary instance of no sacrifice having been made, and of the shares being worth twice as much as they were originally.

Senator Sir HAL COLEBATCH.These are £20 shares, and they are quoted to-day at £40. The original capital. has already been returned, together with divi dends amounting to approximately 15 per cent, over the whole period of the company’s existence. The honorable senator talks about sacrifice! If that is his idea of sacrifice he ought to have asked that in the present emergency his salary should be increased instead of reduced.

I have the balance-sheets of two or three companies. That of the Australian Sugar Company shows a net profit for the year of, £30,000, which was an increase of nearly £2,000 compared with the previous year. The dividends, interim and final, make a total distribution of £24,949. The net profits of the Millaquin Company for the year totalled £65,000. an increase on the previous year of about £2,500. Incidentally, the report of that company includes a libellous photograph of a distinguished member of the Senate. Then we have the Colonial Sugar Refining Company, whose net profits in three successive half-years amounted to £445,000, £350,000 and £384,000.

What is the argument against this proposal? Can it be contended for one moment that these companies should still enjoy the enormous profits that they enjoyed previously? Can it be argued that they are not obtaining those profits at the expense of the people of Australia generally? Can it bc suggested that the people of Australia are not to-day in a far worse position to contribute towards those profits than they were in the past? Take the position of the saddest class in the community, and that which is most entitled to our deepest sympathy; I refer to the unemployed. Is it not obvious that they are not in a position to contribute at the rate of at least 10s. a head towards the profits of these companies? If equality of sacrifice is to be anything more than a sham, why is it that these companies do not come forward and say, “We are prepared to forego 20 per cent, of our profits in order that, by a reorganization of our industry, relief may be afforded to the public generally “. Reductions have been made in, I think, every other bounty that is paid by the Commonwealth. Even the gold bounty, no portion of which has yet been paid, and out of which the gold-mining industry stands a chance of collecting only something like 2s.. per oz. - it will be lucky if it gets even that - was cut in half before it began to operate. Other bounties have been reduced by something like 25. per cent. I do not know that the representatives of any of those industries squealed very loudly when those reductions were made. So far as the gold-mining industry is concerned, I made it clear in the speech that I delivered at the time that I did not think much of what was proposed; and I certainly did not resent the reduction of 50 per cent. But the idea that everything else must be cut down while this sugar incubus remains untouched is, to my mind, too utterly monstrous for discussion.

At a later hour this evening >ve shall have before us a proposal for the payment of a wheat bounty all over Australia, with the one intention of giving relief to a pitiably distressed industry, not for the purpose of bolstering up an industry that has twice returned its capital, that has paid its shareholders throughout a dividend of 15 per cent., and whose shares to-day are worth double what was paid for them. This is a selfish bounty from the point of view of the people of Australia. The wheat bounty is to be paid in order that wheatgrowers may. remain on the land, because we realize that the whole economic structure of Australia rests to-day on the shoulders of two industries that are being carried on at a loss - wheat and wool - and that that loss cannot continue indefinitely. In the case of wheat we say, “ We shall try to minimize your losses to some slight extent in order that you may be able to carry ou”. In the case of sugar, however, the Australian people provide a bounty of something like £6,000,000 per annum, a bounty that far exceeds what would be the total value of the product were it sold on the world’s markets. That is provided year after year. Yet it is thrown in the teeth of the wheat-farmer that he is to receive in this one year of poverty and distress a bounty equal to less than one-tenth of the annual value of his product, notwithstanding the fact that for very many years he has contributed to the bounty and tariff-fed industries in other parts of Australia. Honorable senators who talk in that way can have no sense of proportion, and no idea of arithmetic; nor can they under stand the elementary principles of economics, or the first principles of justice and fair play.

Compare the bounty that we hope will be given to the wheat-growers with that which is given to this one industry iu Australia that is rolling in prosperity and fattening on the burdens that it is casting upon other industries in this country. Most vigorous protests have been made by representatives of Labour in this Parliament against the imposition of a flour tax, which might give a little more assistance than is contemplated to the wheat-grower. We must have no flour tax, because it would increase the price of bread. There are no protests from that quarter against continuing in this most iniquitous form a sugar tax which increases the cost of living in every household to as great an extent as it would be increased by a tax on flour. But there are protests from the working men themselves. There is scarcely a State in Australia in which, through their organizations, they have not carried strongly-worded resolutions against the continuance of this iniquitous tax. I affirm that of my own knowledge such resolutions have been carried in both Victoria and Western Australia.

I conclude by repeating what I said at the outset, that I have no grievance whatever against this industry. No one would bc more delighted than I to see it a strong and prosperous industry. But I say that, under present conditions, it is an incubus rather than a benefit to Australia. I caution those who are interested in it, that this state of affairs cannot continue. They must be prepared to say, “If, in compliance with an act of Parliament, the bondholder,’ who has loaned his money under the guarantee of the Government and of Parliament is to be compelled to sacrifice 22£ per cent. of his interest, and to see his principal deteriorate in price, we also are prepared to bear our share of the sacrifice.” If they are prepared to do that, and also to put their industry in order by cutting out unprofitable localities and confining the growing of sugar to those districts in which it can be produced at the lowest possible price, I believe that there is a great future for the industry, and that it will be looked up to, respected, and highly regarded by Australians, just as is any other good Australian industry. But so long as it is carried on under present conditions it will excite throughout Australia nothing §but enmity and hatred; and neither a go*v eminent nor an industry that is hated by “the people can live.

Senator DALY:
Assistant Minister · South Australia · ALP

(8.58’]. - Senator Colebatch asked members of the Senate what argument there was against his proposal. That issue is, not whether or not the Commonwealth Government should have entered into an agreement with the Queensland Government covering a period of three years, but whether the agreement so entered into should be amended. The full responsibility for the acceptance or the rejection of that proposition rests with the Senate.

Senator HERBERT Hays:

– In the same way as we have amended the agreement in regard to government bonds.

Senator DALY:

– Frequently such an interjection enables one to ascertain how an honorable senator’s mind is working. L 1 1 that particular case the contract was between the Government and the person who loaned his money to it; and if, as has been suggested in certain political circles, we repudiated our contract, we at all events were able to do so. We have the legislative power to do that.

Senator HERBERT Hays:

– Does that justify the action?

Senator DALY:

– I am not dealing with the justice or otherwise of the action of Parliament. During the short period I propose to speak upon this subject I shall endeavour to show that this is nothing more than a pious resolution. The motion states - “ This Senate is of the opinion that the agreement should be amended . . .” What U the agreement? It is an agreement between ihe Commonwealth Government and the Government of Queensland fixing the price of sugar, and providing, among other tilings, that the Queensland Government shall enter into contracts with the Queensland sugar cane-growers for a certain period in order that the terms of the contract may be carried out. The motion does not provide that negotiations should * r* opened up between the parties to the agreement in order to see whether, in view of altered circumstances, it would not be more equitable to arrange for a reduction. It specifically provides that the Senate is of the opinion that the agreement should be amended regardless of the obligations into which the Queensland Government has entered’ under the agreement.

Senator Sir Hai Colebatch:

– There is nothing to limit the action which might be taken. The Government may act as it wishes in order to give effect to the motion.

Senator DALY:

– This Government has entered into a solemn compact with the Queensland Government.

Senator Payne:

– Without the sanction of Parliament.

Senator DALY:

– As mentioned by Senator Colebatch, this is not the first sugar agreement into which a Commonwealth Government has entered.

Senator Payne:

– That does not absolve this Government.

Senator DALY:

– No protest was made by honorable senators opposite against previous sugar agreements.

Senator J B Hayes:

– That does nor. justify this Government’s action.

Senator DALY:

– Of course it does not. If this Government chooses to enter into a solemn compact with the Queensland Government, as previous governments have done, honorable senators opposite should not place the whole responsibility upon this administration. The Senate had ample opportunity to discuss the present sugar agreement long before it was completed. A compact was in existence prior to the execution of this particular document, and the period which it covered had not expired when the new agreement was being negotiated for. The Senate knew that a new agreement was to be entered into, but no objections were raised. I impress upon the Senate the necessity to closely follow the provisions of the agreement. At the moment, I am not particularly concerned with the sugar producers or the sugar refiners: but I am concerned with the way in which the Queensland Government has been persuaded to enter into certain obligations.

Senator Sampson:

– The Assistant Minister is not concerned about the consumers of sugar.

Senator DALY:

– I am ; but on that point I am not at the moment expressing an opinion one way or the other. The agreement entered into between the Commonwealth Government and the Queensland Government provides, inter alia -

The Government of the State of Queensland (subject to this agreement) agrees -

that it will hereafter, under its statutory powers in that behalf, acquire all raw sugar manufactured from sugar-cane grown in Queensland during the seasons of 1931-32, 1932-33, 1933-34, 1934-35, and 1935-36, other than such quantity of raw sugar not exceeding 1 per centum of the total quantity of raw sugar manufactured during each of the said seasons in any mill where raw sugar is manufactured, as the owner of any such mill shall desire to retain, use and dispose of for local consumption;

that it will purchase all raw sugar manufactured from- sugar-cane grown in New South Wales during the seasons of 1931-32, 1932-33, 1933-34, 1934-35, and 1935-30;

that subject to paragraph (1) of this clause, it will for three years as from the first day of September. One thousand nine hundred and thirty-one, make refined sugar and other sugar productionsthe product of the raw sugar manufactured during the seasons of 1931-32, 1932-33, and 1933-34, referred to in paragraphs(a) and (b) of this clause, available for sale at the main distributing centres referred to in paragraph (/) of this clause, at prices which shall include the cost of bags and other containers not exceeding those prices specified in this paragraph inrespect of each grade of sugar and each sugar product.

Then the price of sugar is recited. This Government has entered into a solemn undertaking with another sovereign power that, for the period of three years, which covers five seasons, certain conditions which are subject to review shall be observed. After the governments concerned have signed the contract, a motion is submitted which provides that the agreement should be amended. I ask honorable senators to consider what the motion actually means. Is it an instruction to the Government to amend the agreement? If it is, we should analyse the power of the Government to amend it. We could not amend it even if we had the desire to do so. We cannot repudiate it because we have already entered into another arrangement with all the States, whereby all our loans are. consolidated, and the loss of any one State-, must eventually be borne by the Commonwealth. Unless we admit that in this case it is advisable to rob Peter to pay Paul,, repudiation does not mean anything. The Government in this regard does not occupy the position it does with respect to those holding government securities. It cannot amend the agreement, and it cannot repudiate it. The motion provides that we should amend it.

Senator Herbert Hays:

– Does the Assistant Minister, suggest that the agreement could not be varied with the consent of all parties.

Senator DALY:

– Of course it could. Personally, I cannot see any objection to an expression of opinion from the Senate that in view of the fact that the bounties paid to other industries have been reduced, the parties to the sugar agreement should negotiate with each other to see whether it is not possible to bring about a reduction in the price of sugar.

Senator Sir Hal Colebatch:

– Although the motion provides that the agreement be amended, it does not restrict the Government as to the way in which that should be brought about.

Senator DALY:

– The honorable senator’s knowledge of the English language’ is too extensive for him to expect me to treat that interjection seriously. “ Should be amended “ is mandatory.

Senator Sir Hal Colebatch:

– The motion does not provide how it should be amended, but merely states that it should be amended.

Senator DALY:

– If the motion were amended by inserting after the word “ That “, the words “ negotiations should be opened up with a view to the sugar agreement being amended “-

Senator Sir Hal Colebatch:

– The motion provides that the agreement should be amended. The Government could open up negotiations to that end.

Senator DALY:

– I am endeavouring to convince the Senate that the motion is an instruction to the Government that the agreement should be amended. Although the Government cannot amend the agreement, even, if it so desired, there is nothing to preclude it from opening up negotiations with the parties concerned;

Reference has been made tra the payment of certain bounties, including the gold bounty. I remind Senator Colebatch that when the gold bounty was first granted by the Commonwealth Government it was anticipated that it would be a bounty of £1 an oz., and that principle has been preserved. The exchange rate rose to such an extent that it became worth £1 6s. Sd. on oz.

Senator Sir Hal Colebatch:

– The exchange rate would be of as much benefit to the sugar industry if it were capable of producing for export at profitable prices.

Senator DALY:

– Sugar is not being sold on the English market-

Senator E B Johnston:

– Large quantities are disposed of on the English market.

Senator DALY:

– Yes; but not at profitable prices.

Senator Sir Hal Colebatch:

– Even if sugar is being disposed of at unprofitable rates, the sellers get the advantage of the exchange.

Senator DALY:

– Gold is sold at profitable rates, but Australian sugar cannot be profitably disposed of on the English market, even with an advantageous exchange rate of 33 per cent. It has been suggested that the sugar industry is the only industry that has been bolstered up. Paper pulp produced under black-labour conditions can be obtained at a much cheaper rate than it can be produced iu Tasmania. Honorable senators representing that State, who have asked for assistance to the paper pulp industry, are criticizing the Government for attempting to manufacture sugar in Australia under white-labour conditions.

Senator Sir George Pearce:

– But they are not asking for an embargo on the importation of paper pulp.

Senator DALY:

– They are asking for a maximum of assistance in order to establish the paper pulp industry in Australia. They have no desire to see Javanese employed in the industry in Tasmania. They have too much respect for the State which they represent to suggest that the industry should be developed under other than recognized Australian standards in the matter of wages and conditions. At the same time, they would deny Queensland similar rights in the sugar industry.

Senator Sampson:

– All that we ask for is a fair thing.

Senator DALY:

– The Government would not be justified in suggesting an amendment of the agreement without referring the matter back to the committee which reported upon the industry.

Senator Sampson:

– Why not set up an impartial tribunal?

Senator DALY:

– I have no objection to that. We are asked to pass judgment upon a decision’ of the Government which was reached after the fullest consideration of the evidence upon which it was based. The Government did not rush hurriedly into this matter, but acted upon a majority report of the committee. I agree with Senator Colebatch that, in view of the altered circumstances, some good may result from opening up negotiations in order to determine the obligations into which the Queensland Government has entered.

Senator Herbert Hays:

– Is that a desirable thing to do?

Senator DALY:

– I do not see any harm in doing it.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– Would it be done by the Government if this motion were carried ?

Senator DALY:

– I do not know what obligations Queensland has entered into as a result of the agreement. No honorable senator knows how far that Government has committed itself.

Senator Herbert Hays:

– How does the Minister know how far the bondholders have committed themselves to liabilities and responsibilities?

Senator DALY:

– I have already pointed out that the bondholder was a creditor of this Government, and if what we have done to him may be regarded as repudiation, if we have robbed him, we have robbed some one other than ourselves; but if we so impoverish the Queensland Government that it cannot balance its budget, it will come to the maternal godmother, that is, the Federal Government, for help. The maternal godmother, thinking that by forcing the Queensland Government to do something, she may be acting in the interests of the rest of her godchildren, may in the final analysis find that she has to pay the cost out of her own purse.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– What moral obligation has the Queensland. Government entered into?

Senator DALY:

– It lias undertaken to acquire the whole sugar-cane crop.

Senator Herbert Hays:

– The Minister has a bad case.

Senator DALY:

– No one has any chance pf convincing a Tasmanian. that lie has other than a bad case when he is discussing sugar. When later on we are considering the tariff, I shall find honorable senators from one State thinking that I have made out an exceptionally strong case for certain duties, and honorable senators from another State thinking, it an extremely weak case. A few minutes later, I shall find the latter thinking that I have made out a very strong case for other duties,’ and the former thinking it a very bad case. I can understand Queensland senators condemning Tasmanian senators for advocating Commonwealth assistance for the paper pulp industry.

Senator Payne:

– It is an entirely different proposition from sugar

Senator DALY:

– Certain economists regard the paper pulp industry as a most uneconomic proposition in Australia. The Government has a small minority in this chamber, but it has to hold the scales of justice evenly. All I ask is that honorable senators will temper justice with mercy.

Senator Sir Hal Colebatch:

– To the Colonial Sugar Refining Company?

Senator DALY:

– No. Before agreeing to this motion, honorable senators should give consideration to the real effect of it. I know that the sugar agreement is one of the most difficult -propositions I should ever have to justify on a platform in South Australia.

Senator Sir Hal Colebatch:

– Impossible, not difficult!

Senator DALY:

– It may border on the impossible, but in any case it would be difficult. The Government has entered into this agreement after the fullest possible inquiry, and the Senate should not hastily pass a motion to amend it without, as a matter of courtesy, giving the Queensland Government an opportunity *o say what obligations it has incurred under the agreement. I hope, therefore, that the motion will be either adjourned for that inquiry from the Queensland Government, or defeated.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– Will the Minister promise to make those inquiries?

Senator Sir Hal Colebatch:

– The time for making those inquiries is after the will of the Senate has been ascertained.

Senator DALY:

– But I do not wish it to go out that the Senate passes a motion instructing the Government to do something which it must know the Government cannot do.

Senator LYNCH:
Western Australia

– The burden of the proposal put forward by Senator Colebatch is that in view of the national necessity for reducing costs, a household necessity such as sugar should not be allowed to remain at the high price at which it is at present. I speak as one who represents the suffrages of the people of Western Australia, and as one who has had some experience in Queensland, and has worked in a Queensland cane field. While I realize that 4-id. per lb. is high, or, as some say, an exorbitant price, for the Australian consumer to pay, when all other household necessities are undergoing a reduction in price, and while I believe that in common with the prevalent tendency of the time, the price of sugar should come down, I have a great deal of sympathy for the sugar industry, and for those concerned in its production. They labour under conditions that are not the common lot of the average Australian. Sugar is produced in a jungle-like, steamy atmosphere, .and the workers engaged in the industry in Queensland are, therefore, entitled to more consideration at our hands than those who work under more pleasant conditions in other parts of the Commonwealth. This . question cannot be considered side by side with others when we are dealing with a matter of tariff reforms or alteration, for the simple reason that sugar is produced under conditions totally different from those under which all other commodities are produced in Australia. Furthermore, we have to ask ourselves why if the price is exorbitant other forms of enterprise have not stepped in and produced sugar under 4id. per lb. Beet sugar has been competing with cane sugar for centuries. It was produced in Victoria before federation, but up to date, it would appear that the attempt to produce edible sugar from beet in Victoria, or in any other part of the Commonwealth, has not proved a success. Although 4-^d. per lb. is too high a price for sugar, why has no other form of enterprise yet been able to use the opportunity provided by that high price to produce beet sugar at a lower cost and force cane sugar down to the same level? The consumer could use beet just as freely as cane sugar. The answer must be that there seems to be not enough margin in 4£d. per lb. to produce beet sugar at a profit, or, if there is a margin, that it has not yet been availed of.

Senator RAE:
NEW SOUTH WALES · ALP; LANG LAB from 1931

– Very little of our country has a suitable climate for growing beet.

Senator LYNCH:

– Beet sugar was produced at Maffra, in Victoria, 40 years ago, but although it has been bounty fed, it has not produced at a profit with sugar at 4£d. per lb. I was in America 40 years ago, and on the western coast we consumed nothing but beet sugar, although the cane sugar production of America at that time was millions of tons per annum.

I want it to be clearly understood that I believe 4½d. per lb. is too high a price for sugar, but I am not willing to reduce the price to a level which would make it impossible for men to live in that steamy atmosphere of Queensland. I would not ask men to work there under conditions which people in other parts of Australia are not called upon to bear, without giving them an ample, aye, a generous reward for doing so, and thereby holding that part of Australia for the white race.

Senator Sampson:

– This motion affects not only the growers; it also affects the Colonial Sugar Refining Company.

Senator LYNCH:

– We know that the Colonial Sugar Refining Company is not confined to Australia; it ha3 ramifications in the South Sea Islands. We also know that if the Commonwealth Government or a State government made a start with the sugar industry in opposition to the Colonial Sugar

Refining Company, it would make a howl ing mess of the business. I hold no brief for the company, but the devil must have his due..

Senator Sampson:

– He is getting more than his due.

Senator LYNCH:

– Senator Colebatch has told us that in New Zealand sugar can be bought for 2½d. per lb., which is 2d. per lb. less than we pay in Australia. But we must not lose sight of the advantage of having an industry converting a wilderness into a civilized habitable area. The Colonial Sugar Refining Company does not influence prices in New Zealand for the simple reason that merchants there may import sugar from any country duty free, but even under these ‘free trade conditions it cannot be sold in the sister dominion under 2½d. per lb. Let us see what 2£d. in New Zealand means ais against 4d., which, I suggest, should be the price in Australia. The difference represents 60 per. cent. - not a penny more. Throughout the tariff debate in which we are about to engage, I and other honorable senators will be expected to vote for duties well up to 60 per cent, and even beyond for industries in much more favorable localities than those in which the sugar-growers of Northern Queensland obtain their livelihood. In my view, 60 per cent, protection is not too much to ask the people of Australia to pay to men producing sugar on the jungle lands of Queensland when we consider our high tariff rates. Anything less than 4d. per lb. would, in my opinion, mean that we were not giving the sugar-growers of Queensland a fair deal.

Senator Sampson:

– The balance-sheets of the Colonial Sugar Refining Company disclose that it is making huge profits.

Senator LYNCH:

– It is impossible to get away from the fact that, although sugar is duty free in New Zealand, the consumers in the sister dominion cannot get it for less than 2£d. per lb. I am prepared to increase that price by 60 per cent, so that our sugar-growers may get a reasonable return for their labour. This is not a greater measure of protection than is given to many other less’ deserving industries under the existing tariff.

There is another aspect to this problem. Sugar came is not produced in areas where wheat is grown. Similarly, in no country is wheat produced on lands suitable for sugar cane. That product requiries good soil, heat, and moisture. The United States of America became involved in one of the most bloody wars in history over this very issue. When first the sugar industry was established in that country, on areas in more favoured situations than the sugar lands of Northern Queensland, there was the general belief that it could not prosper without black labour. In the course of time, as we know, there arose racial problems and dissension which culminated in the civil war in which 200,000 lives were lost, and which loaded the people of the United States of America with a debt of £200,000,000. Capitalized at 5 per cent., it means that the people of the United States of America are paying, for all time, no less than £10,000,000 a year for the privilege of producing sugar with white labour on areas much more congenial. to the white race than are the sugar lands of Northern Queensland. It seems to me, therefore, that it is not too much to ask the people of Australia to support the sugar industry of Queensland by paying an ad-, vance of 60 per cent, on New Zealand prices. We have no racial problem in this country, because Senator Crawford and his fellow planters in Northern Queensland are carrying on an industry which, in other countries, requires the employment of black labour. Is not this an ideal worthy of sacrifice? Is it too much to ask the Australian taxpayer to subsidize the industry to the extent of 60 per cent, as compared with New Zealand prices? We should never forget that the Australian sugar industry is being carried on in areas much, closer to the equatorial sun than are the sugar lands in the United States of America. In the southern States, prior to 1860, cane sugar was produced by black labour in areas not so close to the equator as is Lismore in New South Wales, or Geraldton in Western Australia. It may* also interest honorable senators to know that the sugar lands in Queensland are at least 1,000 miles closer to the equator than are those in the United States of America. No one would dream of suggesting that black labour should be employed on any land lying in a corresponding latitudinal position as the United States of America. We “ should not forget the great service which the Queensland sugar-planter is rendering to this country. Cane sugar has never been grown by white labour so close to the equator as it is in Australia.

As one who has lived in Queensland, I have a great deal of sympathy for the sugar-planters and all who are engaged in the industry. I know what it means to work in that country where a person’s body, for the greater part of the year, casts no shadow at ‘noon, and I should not expect my fellow- Australians to live there without being amply, indeed properly, recompensed. I believe that the price of sugar should come clown from 4½d. per lb. to 4d. per lb. As reasonable men, we should not expect it to come down below that level.

There has been some complaint about the so-called high value of sugar lands. I know something about land values. In northern New South Wales I have seen dairying land sold from £60 to £80 per acre; and I know pf land in the Western district of Victoria, also used for dairying purposes, that has brought £100 per acre. This being so, what’ reason is there for complaint if sugar lands in the tropical areas of Queensland should bring commensurate prices? If there is any warrant for an increase in land values it ought to be in those uninviting areas of Queensland which are being put to such good use. The average Australian, working in that steamy, miasmatic atmosphere, expects to be, and ought to be, suitably recompensed. That, at all events, is how I view the matter, cost what it may. I have expressed this opinion in Western Australia, and I shall have no hesitation in repeating it. I shall never expect fellow- Australians to work in the equatorial part of Australia without being amply repaid. This is their due. I have no objection to the Colonial Sugar Refining Company. I have worked for it, and I know that there is nothing wrong with it as an employer of labour. It is a well-managed concern. The pity is that government concerns are not fun on the same lines. If the Colonial Sugar

Refining Company is successful, why need we be jealous of it? If government concerns were only as well-managed, we would not have the millstone of tens of millions of pounds about our necks. Jealously and hatred are the product and enjoyment of the devil, as my poor old mother taught me. If, by the exercise of the keenest business acumen and the employment of superior talent, the Colonial Sugar Refining Company is able to present its shareholders with a favorable balance-sheet, why should we complain? Everybody engaged in the sugar industry has my sympathy and best wishes, but I repeat that the price to the Australian consumer could come down a little. I would not say that it should come down too much, because we should recompense suitably fellowAustralians who go into those areas, take off their coats, swelter in the tropical sun, and produce sugar for the Australian consumer without the assistance of black labour.

Senator Sir Hal Colebatch:

– If the minority report had not suggested a reduction in the price we should not have heard of it in. this chamber.

Senator LYNCH:

– That matter can be adjusted. I am sure that Senator Colebatch has nothing but the best of intentions and feelings for fellow-citizens in Queensland. Naturally enough, he has great sympathy for the pioneer settlers on our dry light soils of Western Australia, who, up to the present, have received no assistance from this or any other Government. Handicapped as they are in every way by high production costs, they are forced to sell their products in the world’s markets, and suffer losses, whereas up to date Queensland sugar-growers have not been called upon to make any sacrifice. It is but natural, therefore, that he should ask them to ease, just a little, the burden imposed on fellow-Australians by the price of sugar. I, too, sympathize with the primary producers in Western Australia, but I deny that the sugar industry in Queensland is getting too much, because, as I have shown, sugar at 4d. per lb. would repre- sent an advance of only 60 per cent, on New Zealand prices, where sugar is duty free.

We should remember, also, that the Queensland sugar-grower is the man who is keeping the garrison in North Australia. Is not that something fine for the nation? The place he has reclaimed would otherwise still have been the home of animal pests and jungle darkness.

The price of- sugar could come down a little. If the producers of beet sugar in Australia would expand their industry, they could, I think, compel a re-adjustment of the price of sugar. The fact that they are not expanding their industry shows that the margin of profit is not there. So long as there is no money to be made in the sugar beet industry, it appears that we must depend on the sugar men and the Colonial Sugar Refining Company, I am prepared to go only as far as I have indicated. I consider that the people who have made habitable the impenetrable forests of Australia deserve some consideration.

Motion (by Senator Dunn) put -

That the Senate do now divide.

The Senate divided. (President - Hon. W. Kingsmill.)

AYES: 13

NOES: 12

Majority . . 1

AYES

NOES

Question so resolved in the affirmative.

Question - That the original motion be agreed to - put. The Senate divided. (President - Hon. W. Kingsmill.)

AYES: 13

NOES: 13

Majority . . . . 0

AYES

NOES

The PRESIDENT (Senator the Hon W Kingsmill:

– There being thirteen ayes and thirteen noes, the question passes in the negative.

page 1321

ABOLITION OF SENATE

Proposed Referendum

Senator DUNN:
New South Wales

.- I move-

That, in the opinion of this Senate, an amendment of the Constitution to provide for the abolition of the Senate should be submitted by referendum to the electors at the next general election, and that the passage of this resolution be an instruction to the Government to introduce the necessary legislation.

A few months : ago, when I gave notice of my intention to move this motion” it was said, by interjection, that I was contemplating political suicide. I am prepared to commit political suicide if that is the will- of the people.

Senatorcarroll. - It must’ be because the honorable senator loves his country.

Senator DUNN:

– I love my country; but I cannot say that I love any white elephants from Western Australia. I ask leave to continue my remarks.

Leave granted; debate adjourned.

page 1321

FINANCIAL EMERGENCY BILL

(No. 2).

Message received from the House of Representatives intimating that it had agreed to the amendments made by the Senate in this bill.

page 1321

WHEAT BOUNTY BILL (No. 2)

Bill received from the House of Representatives.

Standing and Sessional Orders suspended, and bill (on motion by Senator Dooley) read a first time.

Second Reading

Senator DOOLEY:
Assistant Minister · New South Wales · ALP

– I move -

That the bill be now read a second time

It is only right that I should explainthe circumstances which have necessitated the submission of this measure to Parliament, as it will have the effect of superseding the Wheat Bounty Bill and the Wheat Charges Bill. Both of those measures passed in another place, but consideration of them was deferred by this chamber.

At the Premiers Conference held in Melbourne in August and September last, it was decided to recommend that £3,000,000 be made available by the banks to provide a bounty on a sliding scale, with a maximum rate of 6d. a bushel on wheat of the 1931-32 season exported, provided that the f.o.b. price of wheat did not exceed 3s. a bushel. That proposal was accepted by the Commonwealth Bank. The Premiers Conference apparently took the view at the time that the price of wheat was not likely to reach 3s. a bushel f.o.b., as it was then quoted at 2s. 2d.

The Commonwealth Bank propounded a scheme that was embodied in the Wheat Bounty Bill and the Wheat Charges Bill, which were submitted to Parliament. This scheme was placed before a very representative conference, consisting of State Ministers of Agriculture, co-operative and proprietary wheat interests, and flour millers, which met in Melbourne on the 16th October last. The banks’ scheme was approved, but a request was made that the Commonwealth Government should ask the banks to increase the f.o.b. limit to 3s. 6d. a bushel. This the Government did.

The suggestion was made in this chamber that the Government should again approach the banks and ask that the sum of £3,000,000 be made available in the form of a subsidy not exceeding 6d. a bushel on all wheat exported, and that the provision in the abovementioned bills relating to the collection of a similar amount on wheat used locally be retained.

This suggestion was placed before the Commonwealth Bank on Monday and Tuesday last by the Minister for Markets (Mr. Parker Moloney), who conferred at length with the chairman regarding the wheat position generally. The chairman also conferred with the associated banks in regard to the matter. During these negotiations it was pointed out that merchants and millers had complained that under the bills then before the Senate they would be at a disadvantage, particularly with regard to wheat stored or delivered for sale. Millers also objected to a special levy on wheat used for consumption in Australia, because they found it difficult at present to do business with bakers and secure payment of outstanding accounts.

The chairman of the Commonwealth Bank was in close consultation with the associated banks in regard to the whole matter, as a result of the Minister’s discussions with him. Much difficulty was experienced in obtaining unanimity amongst the banks regarding a workable scheme. Eventually, however, the banks unanimously agreed to provide a loan of £3,000,000 to pay a bonus on all marketed wheat of the coining season.

The Government considered that, this arrangement should be given effect, and accordingly it was decided to introduce the present bill to provide for a bounty of 4-Jd. a bushel on ail wheat of the 1931-32 season marketed.

This bill really conforms with the original idea of the Government as to a suitable method of allocating the bounty, and is practically identical with the provisions of the Wheat Bill, which was introduced into Parliament in March last, providing for a bounty on last season’s wheat.

It is estimated that the total quantity of wheat which will be available for sale out of the 1931-32 crop will be about 160,000,000 bushels, thus absorbing the £3,000,000 which the banks have agreed to make available. The advantage will be that the farmer will know definitely what his position is in regard to bounty immediately his crop is ready for sale.

The method of payment will be as simple as possible. Regulations will be enacted requiring the grower and the receiver of the wheat to state on the prescribed form the quantity of wheat sold or delivered for sale. On this information a cheque will be sent to the grower by the Department of Markets. This method of payment is concurred in by the Commonwealth Bank. Later on a careful check will be made on all claims, and it is hoped that the State Governments will co-operate by making available the services of officers of the State Agricultural and Lands Departments, to see that bounty has not been improperly claimed.

The bounty of 4£d., taken in conjunction with the improved prices ruling for wheat in the world markets to-day, should ensure growers a very much increased return during the coming season, as compared with last year. The Government is anxious that the measure should be dealt with with the least possible delay, in order that the necessary arrangements may be made to pay the bounty at the earliest possible date. In that connexion I point out that in certain districts of Australia new season’s wheat is now actually being delivered.

I shall be pleased to supply honorable senators with any further details when we enter on the committee stage of the bill. I trust that the measure will have a speedy passage.

Debate (on motion by Senator Sir George Pearce) adjourned.

page 1322

HOUR OF MEETING

Motion (by Senator Barnes) agreed to-

That thu Senate, at its vising, adjourn till 10 a.m. to-morrow.

page 1322

ADJOURNMENT

Shipping Dispute - Jervis Bay Hotel Licence

Motion (by Senator Barnes) proposed -

That the Senate do now adjourn.

Senator Sir GEORGE PEARCE (Western Australia) [10.11]. - I am informed that there has been a serious development in connexion with the shipping strike, which has been promoted by the communist element in Australia. The announcement that has been made is that, at a meeting held in Sydney this morning, it was decided to call all members of the Seamen’s Union out on strike. It is also said that the shipowners have issued an ultimatum that if the ships are not manned by to-morrow, they will engage free labour, and that they are asking the Prime Minister to afford protection for union as well as non-union men who may be engaged. I ask the Leader of the Government in the Senate whether he has any information in confirmation of that news; whether the Government will take steps under the trade and commerce power of the Commonwealth to protect those persons who wish lawfully to curry on the shipping business of Australia; and, if so, whether such action will be taken promptly?

Senator DUNN:
New South Wales

– Last week in the Semite I endeavoured to obtain from the Minister representing the Minister for Works and Railways (Senator Dooley) information in relation to an application for an hotel licence at Jervis Bay, in Federal Territory. The reply that I received was not to my liking, and it is my intention tomorrow to give notice of a motion calling for the production of all correspondence that has passed between the Minister and those who control the issue of licences in the Federal Territory. I do not know whether my information is correct or otherwise, but I understand that the Licensing Court is to sit to-morrow; whereas my notice of motion will not come before the Senate until next Thursday, when private members’ business is called on. What I wish to ascertain is, whether any testimonials were given to Mr. Foley, who, when he submitted a tender for the premises in question at Jervis Bay, was a paid organizer of an organization in the State of Nev/ South Wales known as the Federal Labour PaTty. I am anxious to peruse the whole of the correspondence iu connexion with this matter in order to ascertain whether testimonials were supplied to Mr. Foley by the Minister for Homo Affairs (Mr. Blakeley), and the Assistant Minister (Senator Dooley). A portion of the reply to the question I submitted to the Assistant Minister contained the words “ the honorable senator’s remarks contained the implication that there was some graft attached to the business.” The Assistant Minister went on to say that he knew nothing about . Mr. Foley. If that is the case, I should like to know why the Assistant Minister supplied a testimonial to a man concerning whom he knows nothing. I realize that any honorable senator or honorable mem ber of another place is entitled to give a testimonial to any person whom he may think worthy of it; but at the same time there should not be this wall of silence. The Assistant Minister should know as much about Foley’s application for a lease of the premises at Jervis Bay, and his subsequent action for a liquor licence as I do. I understand he is’ a particular friend of the Assistant Minister, who stated definitely, as recorded in Hansard, that he knew nothing at all about Mr. Foley. This man submitted a tender, I suppose in the proper form, for a lease of certain premises at Jervis Bay, and we have been informed that as it was the highest tender it was accepted. He has now an application before the Licensing Court of the Federal Capital Territory for the right to sell alcoholic liquors in the premises for which he has secured a lease. So far as I know Foley’s tender for the premises may have been the only one submitted; but apparently it has been accepted, and I wish him good luck. The point I wish to emphasize was that Mr. Foley was a paid organizer of the Federal Labour Party, and, in view of the circumstances, I have outlined I wish to ascertain if any testimonials will be submitted to the licensing court to-morrow bearing the signatures of the Minister for Home Affairs (Mr. Blakeley) or the Assistant Minister (Senator Dooley).

Senator DOOLEY:
New South WalesAssistant Minister · ALP

– Knowing the relationship that has existed between Mr. Foley and Senator Dunn, I am not surprised that this matter has been brought forward. I would, however, prefer the honorable senator to meet Mr. Foley outside, and that they should decide the matter between themselves. When I said that I knew nothing of Mr. Foley, I meant to say that I knew nothing derogatory of him. All I said was that everything was clear and aboveboard. The tenders are available for inspection, and if the Senate decides that the papers shall be tabled the whole of the correspondence will be open to inspection. It is strange that this matter should be brought forward the day prior to an application being made to the licensing court. 1 have not sent any recommendation, and I have not attached my signature to any document recommending Foley or any one else as a suitable person to hold a licence. Mr. Foley’s tender for a lease of the premises at Jervis Bay was accepted because it was the highest. I cannot understand what is in the back of the senator’s mind ; anything may be there but a little common sense.

The PRESIDENT (Senator the Hon W Kingsmill:

– Order!

Senator Dunn:

– I take exception to that expression, and ask that it be withdrawn.

The PRESIDENT:

– I have already called the Assistant Minister to order. He knows that he is not entitled to accuse an honorable senator of a lack of common sense. I ask the Assistant Minister to withdraw the remark to which exception has been taken.

Senator DOOLEY:

– I withdraw it. It was unnecessary for me to supply Foley with a recommendation as his character is sufficient to carry him through. I believe he was an organizer for the Federal Labour Party in New South Wales, from which body he received a recommendation. In view of his services to the party, I do not see how it could do other than supply him with a recommendation. I understand, however, that he resigned that position before his tender was accepted, and that ho is not now a paid officer of the Federal Labour Party. I do not know why, in matters of this kind, such a person should not have the same rights as others. I can assure honorable senators that’ he did not receive special consideration because I knew him. His tender for the premises was accepted because it was the highest. If the honorable senator wishes to peruse the file he is at liberty to do so; there is nothing in it of which I am ashamed. I am glad Mr. Foley was the successful tenderer, because I am sure that he will make good in the business which he has in view.

Senator BARNES:
VicePresident of the Executive Council · Victoria · ALP

– Through the courtesy of the Leader of the Opposition (Senator Pearce), I was informed of the latest developments in connexion with the industrial disturbance in New South Wales. I think the Senate will realize that it is the responsibility of the State Govern ments concerned, and not of the federal authorities, to maintain law and order, and that it would be presumptuous for the Federal Government to act in matters of this kind unless requested to do so by the State authority concerned.

Question resolved in the affirmative.

Senate adjourned at 10.23 p.m.

Cite as: Australia, Senate, Debates, 29 October 1931, viewed 22 October 2017, <http://historichansard.net/senate/1931/19311029_senate_12_132/>.

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