Senate
2 December 1936

14th Parliament · 1st Session

  1. Senate
  2. 14th Parliament
  3. 1936

The President (Senator the Hon. P. J. Lynch) took the chair at 11 a.m., and read prayers.

page 2577

AIR MAIL SERVICES

On the 26th November, Senator Foil asked the Minister representing the Minister for Defence the following questions, upon notice:

What are the schedule times of arrival and departure for regular commercial aircraft on the following air lines: -

Imperial Airways. - LondonCairoBaghdadKarachi - Calcutta - Singapore :

Qantas Empire: - SingaporeBataviaSourabayaDarwinBrisbane;

) K.L.M. - London - Amsterdam -Buda- pest-Cairo-Baghdad - Jhodpur -Ran- goon-Batavia-Sourabaya?

What are the average flying speeds maintained according to schedule in the above commercial air services?

What are the average flying speeds maintained according to schedule on the following American airways: -

United Airways. - New YorkChicagoSan Francisco;

T.W.A. - New York-Kansas City -Los Angeles ;

American Airways. - New YorkMemphisFort Worth-Los. Angeles;

American Clipper Service.- San FranciscoHonoluluManila ?

Is it correct, as reported in Saturday’s press, that the existing flying equipment of Imperial Airways between London and Singapore isnot to be replaced until 1938?

The Minister for Defence has supplied the following answers: -

The scheduled times of arrival and departure of aircraft of the companies mentioned, at present date, are as follow: -

London. - Depart a.m. Wednesday and Saturday.

Cairo. - (Is on the London-Cape Town route).

Alexandria. - Arrive p.m. Friday and Monday; depart a.m. Saturday and Tuesday.

Baghdad. - Arrive p.m. Saturday and Tuesday; depart a.m. Sunday and Wednesday.

Karachi. - Arrive p.m. Monday and Thursday; depart p.m. Monday and Thursday.

Calcutta. - Arrive p.m. Tuesday and Friday; depart a.m. Wednesday and Saturday.

Singapore. - Arrive p.m. Thursday and Sunday.

The flying distance from London to Singapore is 8,393 miles, and journeys are scheduled to be completed in nine days.

Singapore. - Depart6 a.m. Friday and Monday.

Batavia. - Arrive 10.45 a.m. Friday and Monday; depart 11.15 a.m. Friday and Monday.

Sourabaya. - Arrive 2.25 p.m. Friday and Monday; depart 2.55 p.m. Friday and Monday.

Darwin. - Arrive 4.10 p.m. Saturday and

Tuesday; depart 5.45 a.m. Sunday and Wednesday.

Brisbane. - Arrive 12.30 p.m. Monday and Thursday.

The distance of the air route SingaporeBrisbane is 4,361 miles, which isflown in three and one half days.

London. - Depart 7.45 p.m. daily. Amsterdam. - Arrive 9.55 p.m. daily; depart 7.30a.m. Wednesday and Saturday.

Athens. - Arrive 1.15 p.m. Thursday and Sunday; depart 2 p.m. Thursday and Sunday.

Baghdad. - Arrive 4.15 p.m. Friday and Monday; depart 4.45 p.m. Friday and Monday.

Jhodpur. - Arrive 8 p.m. Saturday and Tuesday; depart 5 a.m. Sunday and Wednesday.

Rangoon. - Arrive 5 p.m. Sunday and Wednesday; depart5.45 a.m. Monday and Thursday.

Singapore. - Arrive 5.45 p.m. Monday and Thursday; depart 6 a.m. Tuesday and Friday.

Batavia. - Arrive 10.30 a.m. Tuesday and Friday; depart 11.30 a.m. Tuesday and Friday.

Bandoeng. - Arrive 12 noon Tuesday and Friday.

During the winter months the K.L.M. route is via Marseilles and Rome, and not via Budapest and Cairo. The route distance AmsterdamBatavia is 8,951 miles and scheduled flying time is six and one half days.

QantasEmpire Airways Limited. - The scheduled time-tables provide for an aircraft flying speed of 129½ miles an hour on the Singapore-Brisbane route. During the quarter ended the 30th June, 1936, however, the average flying speed maintained by the company’s aircraft on all trips over the route was approximately 133 miles an hour.

K.L.M. - This company employs Douglas DC-2 aircraft along the whole route from Amsterdam to Batavia, and the average flying speed, based on scheduled timetables, is approximately 152 miles an hour.

Imperial Airways. - This company’s advertised time-table does not show specific times of commencing and finishing the sections flown each day. Scheduled times of departures and arrivals are shown as morning, afternoon or evening. It is not possible, therefore, to quote “averageflying speed according to schedule “. Several types of aircraft are employed and cruising speeds range from about 88 to 110 miles an hour. It is understood that last week Imperial Airways placed one of the newly-built Empire flying boats on the Mediterranean section and that a further one will be placed in service at an early date. The approximate cruising speed of these new flying boats is believed to be about 145 miles an hour.

Eastbound - 172 miles an hour,

Westbound - 144 miles an hour, or an average of 158 miles an hour; the difference in speeds in easterly and westerly directions being due to the average prevailing winds.

Eastbound - 105 miles an hour,

Westbound - 153 miles an hour, or an average of 159 miles an hour. It is understood that this company has recently announced new schedules providing increased speeds on this route, but no details are yet to hand.

Douglas DC-2, based on scheduled time-table, operating between Fort Worth and Los Angeles -

Eastbound - 171 miles an hour,

Westbound - 156 miles an hour, or an average of 163.5 miles an hour.

American Airlines, Inc. have recently introduced the new Douglas DST and Douglas DC-3 aircraft on this route, the former type providing a transcontinental night service between New York and Los Angeles with three scheduled stops. Timetables for the service are not yet available, but the cruising speed of the aircraft is approximately 185 miles an hour. (d)P an- American Airways -San Fran- cisco-Honolulu-Manila. - Operating Martin 130 flying boats. No details of the operating times on this service are available, but the aircraft concerned are reported to have a cruising speed of 160 miles an hour at operating altitude.

page 2578

LOAN (FARMERS’ DEBT ADJUSTMENT) ACT

Payments to States

Senator COOPER:
QUEENSLAND

– Has the Minister representing the Treasurer noticed a paragraph published in the Brisbane Courier Mail of the 26th November, 1936, under the heading -

Farmers’ Debt Relief - No Federal Money yet Received. and covering a statement made by the Queensland Minister for Agri culture and Stock, the Honorable Mr. Bulcock, to the effect that no federal money had yet been received in Queensland for the purpose of relief under the Loan (Farmers Debt Adjustment) Act? In view of that statement, will the Minister inform the Senate -

  1. . If any application has been made by the Queensland Government for Commonwealth funds under this act?
  2. The amounts of funds allocated by the Commonwealth as Queensland’s share?
  3. Are these allocations under the Farmers Debt Adjustment Act to bo considered as loans or free grants to the States concerned?
  4. Is it first necessary for the State Government concerned to pass State legislation for the distribution of these funds before the Commonwealth grant can be made available?
  5. If so,has the Government of Queensland passed that legislation?
  6. What States, if any, have passed this legislation ?
  7. In the event of the Queensland Government not passing such legislation, is it possible for the Federal Government to directly assist the necessitous farmers in Queensland from the sum allocated to that State?
Senator Sir GEORGE PEARCE:

– The honorable senator having informed me several days ago that he intended to ask these questions, I submitted them to the Treasurer, who has supplied the following answers: -

  1. Yes. The first advance was made recently, shortly after the passage of the necessary Queensland legislation.
  2. Of the total amount appropriated by the Commonwealth legislation the amount of £ 10,000,000 was apportioned by the act amongst the States. Of this amount the sum of £1,150,000 was allocated to Queensland. The allocation of the remaining £2,000,000 has yet to be determined in accordance with the provisions of the act.
  3. The amounts authorized by the act are in the nature of grants to the States for the purposes indicated in the act.
  4. It was necessary for the State Parliaments to pass legislation before the grants could be distributed.
  5. The Queensland Parliament has recently passed the amending legislation necessary to bring legislation previously passed into conformity with the Commonwealth act.
  6. All States have now passed the necessary legislation.
  7. See answer to No. 5.

page 2579

QUESTION

CASE OF MRS. FREER

Senator BROWN:
QUEENSLAND

– In view of the statements appearing in this morning’s newspapers concerning Mrs. Freer, will the Leader of the Senate state quite frankly whether she will be allowed to land in Australia when she arrives?

The PRESIDENT:

– The honorable senator is not entitled to use the word “ frankly “.

Senator BROWN:

– Then I shall say clearly and without evasion.

The PRESIDENT:

– Order!

Senator Sir GEORGE PEARCE.The decision of the Commonwealth Government in respect of Mrs. Freer has not been altered. She will not be allowed to enter the Commonwealth.

page 2579

PRINTING COMMITTEE

Report - No. 5 - of the Printing Com mittee brought up by Senator J. B. Hayes, and - by leave - adopted.

page 2579

QUESTION

REFERENDUM ON MARKETING

Senator BROWN:

asked the Minister representing the Attorney-General, upon notice -

  1. In the event of the marketing referendum being carried, will the altered constitution become automatically applicable?
  2. Or will it be necessary for Parliament to meet in order to pass special legislation to put the altered constitution into effect, as far as interstate trade in dried fruits, &c., is concerned ?
Senator BRENNAN:
Minister without portfolio assisting the Minister for Commerce · VICTORIA · UAP

– The AttorneyGeneral has supplied the following answer. : -

It is not the practice of the AttorneyGeneral to express opinions on matters of law in reply to questions.

page 2579

QUESTION

UNEMPLOYMENT

Senator BADMAN:
SOUTH AUSTRALIA

asked the Minister representing the Prime Minister, upon notice -

What are the latest figures relating to unemployment in Australia, giving the number and percentages of available wage-earners who are unemployed in each State?

Senator Sir GEORGE PEARCE.The Prime Minister has supplied the following answers : -

Complete statistics of the actual number and percentages of available wage-earners who are unemployed in each State are not available, but the following table showing the percentages of members of reporting trade unions returned ils unemployed in carli St nlc indicates the trend of unemployment during the period from the March quarter, 192!), to the September quarter, 1936: -

It will be seen from the above that the percentages of members of reporting trade unions returned as unemployed has decreased from a peak of 30 per cent, in June quarter, 1932. to 12 per cent, in September quarter, 1930’.

Comprehensive percentages of unemployment have been estimated only by the Government Statisticians of New South Wales and Queensland. In the case of New South Wales, the percentage unemployed of all who are dependent on and available for employment is stated for October, 1930, its 7.1 per cent, (including the full-time equivalent of parttime relief work as employment) or 8.5 per cent, (counting all part-time relief workers as unemployed). In Queensland, the percentage unemployed of men wage and salary earners is stated for the three months ended September, 1930, as 5.3 per cent, (including the full time equivalent of relief work as employment) or 10.1 per cent, (counting all relief workers as unemployed) .

page 2580

LONDON NAVAL TREATY BILL 1936

Motion (by Senator Sir George Pearce) agreed to -

That leave he given to introduce a hill for an act to enable effect to be given to a treaty signed at London on behalf of His Majesty and certain other powers.

Bill brought up by Senator Pearce and read a first time.

page 2580

ASSENT TO BILLS

Assent to the following bills reported :-

Nationality Bill 1936.

Federal Aid Roads Bill 1936.

Trade Commissioners Bill 1936.

Northern Territory Representation Bill 1936.

Income Tax Bill 1936.

page 2580

THE LATE HONORABLE J. A. JENSEN

The PRESIDENT:

– I have received from. Mrs. Jensen a letter of thanks for the resolution of sympathy passed by the Senate on the occasion of the death of the Honorable J. A. Jensen.

page 2580

DISTINGUISHED VISITOR

The PRESIDENT:

– I desire to inform the Senate that the Honorable Yoshiaki Hatta, a member of the House of Peers, Japan, is within the precincts. With the concurrence of honorable senators, I shall invite the honorable gentleman to enter the Senate and occupy a seat on the dais.

Honorable Senators. - Hear, Hear !

The Honorable Yoshiaki Hatta thereupon entered the chamber and was seated accordingly.

page 2580

AUSTRALIAN SOLDIERS’ REPATRIATION BILL 1936

Second Reading

Debate resumed from the 27th November (vide page 2469), on motion by Senator A. J. McLachlan) -

That the bill be now read a second time.

Senator SAMPSON:
Tasmania

– We welcome the proposals contained in this bill because they further extend the privileges granted to ex-service men. The Government’s decision that applicants for war pensions should have the right of appeal from the decisions of the Repatriation Commission to an independent tribunal was a very wise and generous one. The work done by the tribunal since its inception has justified its existence. There has been quite a lot of criticism with regard to the decisions of the War Pensions Entitlement Appeal Tribunal and great stress has been made of the fact that a large number of appeals heard by that body had not been upheld. We must coolly and calmly consider this matter and avoid the making of wild or loose statements. My own experience since 1920 has been that the Repatriation

Commission has always given fair and sympathetic consideration to the claims of applicants for war pensions. If that be so, it follows that cases in which appeals have been made from the decisions of the commission have already been thoroughly investigated and sifted. I am not surprised, therefore, in turning up the report of the No. .1 War Pensions Entitlement Appeal Tribunal, to find that up to the 30th June, 1936, of 14,718 appeals heard by the tribunal only 2,699 were successful. I myself have appeared before the tribunal on various occasions to give evidence on behalf of applicants; in some cases I have represented them before that body. In all fairness I must say that my reception by the tribunal and the latitude allowed by it to appellants in order to bring out the salient facts of their claims, left nothing to be desired. The members of .the tribunal were at all times sympathetic. I say that without hesitation or diffidence. I have received hosts of letters from unsuccessful applicants abusing (that body, but I do not think that such criticism has been just. All the members of the tribunals were themselves soldiers, and, in the case of the No. 1 tribunal, all had long active service in different theatres of war, and the assertion that they are harsh, bigoted or unsympathetic is, on the face of it, not fair or even honest criticism. There must be quite a lot of confusion with regard to service pensions which are a recent innovation; the conditions governing them are liberalized by the bill now before the Senate. A good deal has been said during the debate on this bill in regard to the definition of a “ theatre of war “. A number of soldiers drawing war pensions to-day never left Australian shores and lots of soldiers drawing war pensions served overseas only in Egypt or in the training camps on Salisbury Plains and other parts of England. The war service pension, however, is awarded only to those men who, though their health has been broken through their service, have been unable to substantiate their claims for a war pension before either the Repatriation Commission or the Entitlement Appeal Tribunal. An applicant for a service pension has to prove that he saw service in a theatre of war, and in this regard I listened with interest to the speech of Senator Hardy. The honorable senator is always worth listening to because he goes to a great deal of trouble and research in the preparation of his speeches. He dealt at length with the memorable march of the . men of the 4th and 5th Australian Divisions from Tel-el-Kebir to the Suez Canal, and complained that because the men who took part in that march did not cross to the eastern side of the canal they were considered by the commission not to have served in a theatre of war and to be therefore ineligible for a service pension. The point I wish to bring out, however, is that the men who took part in that march, and suffered in health in consequence, would be entitled to receive a war pension whether they crossed the Canal or not.

Senator Hardy:

– If they could prove their claims.

Senator SAMPSON:

– Of course. I suggest that practically every man serving at that time in the 4th and 5th Australian divisions did actually cross the Canal because the purpose of the march was to cross the Canal and to take up defensive positions seven miles to the east of it. Therefore, ipso facto, all, save a few who dropped by the way and were taken to hospital to recover, served in a theatre of war as defined by the Commis- sion.

My honorable and gallant friend, Senator Brand, made a plea for Australians who served in the Boer War. The various contingents sent by Australia to South Africa were recruited in the first instance by the several colonies, federation being not yet accomplished, and later by the Commonwealth. Immediately they, arrived in South Africa the Australian troops were taken over by the Imperial Government, by which they were clothed, equipped, fed and paid. The British Government was responsible for the payment of war pensions to men injured in that conflict, and, in fact, those men who did receive a pension received it from the United Kingdom. When the troops returned to Australia from the Boer War, there was, of course, no Repatriation Department in existence although various funds had been subscribed by patriotic citizens to assist them. Most of the men who returned in ill health had a thin time; they did not have the after-care which was extended to the men of the Australian Imperial Force. Extreme difficulty was experienced in fighting their claims for war pensions because of the fact that such claims had to be lodged with the British Ministry of Pensions 12,000 miles away. It is a long time now since the Boer War ended and the various associations of South African veterans scattered throughout Australia have found it increasingly difficult to look after their fellow war veterans, who, as a result of their active service, are now broken in health. We have from time to time endeavoured to get the Australian Government to provide free medical treatment for them. I hope that that privilege will be extended tothe small remnant of South African veterans who still remain alive. We who were their comrades in the campaign have endeavoured to help them from our own pockets, but the assistance that can be given in this way is not adequate. I endorse and most wholeheartedly support the request of Senator Brand that even at this late hour, 34 years after the declaration of peace, at Vereeniging, the Government should carefully consider the possibility of extending to South African veterans the privileges granted to soldiers who served in the Great War.

SenatorFoll. - Have the medical records of the South African veterans been kept?

Senator SAMPSON:

– Yes, but they are very difficult to trace. In 1926 I had a case which I took up with Sir Neville Howse who, being in England at the time, promised to give it his personal attention.

Senator Foll:

– The records were overseas ?

Senator SAMPSON:

– Yes. A resident of Hobart who enlisted in the Bushmen’s contingent, made application for a war pension because of injuries he had sustained during the war. With great difficulty we were able to prove his claim. There have been other cases which have presented similar difficulties. One which comes readily to my mind is that of a man who enlisted for service at Launceston, Tasmania. He received injuries at

Rhenosterkop but was unable to substantiate his claim when he came back from the war. At that time there were no soldiers’ organizations to look after the claims of applicants. Injured soldiers who returned from : the Boer War were treated in the general hospitals of the States and discharged from the army. I urge the Government and the Minister for Repatriation to give careful consideration to the claims of those men.

Another matter which has exercised the minds of soldiers and many members of this chamber is the position of employees of the Repatriation Commission. All members of the staff served overseas, and yet superannuation and furlough rights are denied to them. It is high time that these men were given the same privileges as are enjoyed by other members of the Public Service.

  1. have received several letters lately in relation to this bill. Some of them are anonymous and contain scurrilous statements and I shall not refer further to them, but I cannot allow to pass a statement contained in a letter from the Secretary of the Unaccepted Tubercular Soldiers Association. The writer says -

The Commission is wholly unsympathetic and mostly in opposition to the soldier.

Having been actively engaged in promoting the welfare of soldiers from the time that I returned from the war until now, I say that that statement is entirely without foundation. One has only to study the personnel of the Repatriation Commission to realize that. The commission consists of three men, all of whom served overseas. One of them is a limbless soldier, having lost his right arm at the battle of Lagnicourt. Another was badly wounded at Gallipoli on the third day after the landing there. The commission consists of men with distinguished war service. They are, moreover, honorable men, and it is a wilful distortion of the truth to say that they are harsh and unsympathetic in their consideration of the claims of soldiers. Scurrilous statements of that nature, which are made from time to time hurt. The Repatriation Commission is doing a big work most capably and sympathetically. If I speak with some feeling on this subject, it is because these men are my personal friends whose worth I know. The

Chairman of the Commission was my platoon sergeant. He landed on Gallipoli on the 25th April, 1915. He is a very fine man indeed, and had he not been wounded in the early days of the campaign, would have gone very far as a soldier. These men, who are themselves “ diggers “, understand the “ digger “. One has only to meet them to realize that they are ardent and sincere workers on behalf of their less fortunate comrades.

Similarly, the Entitlements Appeal Tribunal and the two assessment tribunals consist of men who served with the forces. It would be extraordinary indeed, if after searching Australia to find men suitable for such positions, the choice fell on men who were antagonistic to the soldiers. I point out, moreover, that the returned soldiers themselves, through the Federal Executive of the Returned Sailors and Soldiers Imperial League of Australia, submit to the Government a panel of ‘names, from which the Government selects a representative on the tribunal. Generally, the man placed first on the panel is selected.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– Not always.

Senator SAMPSON:

– No; but as a rule he is selected. It will be seen, therefore, that the soldiers, themselves, have a good deal of say in the constitution of the tribunals. The same thing applies when vacancies occur on the Repatriation Commission.

I welcome this bill as a step forward. One of the most pleasing features of this country’s repatriation legislation is the fact that, in this chamber at least, the repatriation of Australian soldiers has never been made a party matter. All governments have acted in the belief that the people of Australia desire that the men who served their country shall be treated fairly, and generously. Cases of hardship inevitably arise, for it is almost impossible to pass laws which -will meet every individual need. The bill, however, gives legislative effect to proposals for which some of us have striven for many years, and, therefore, I welcome it.

Senator PAYNE:
Tasmania

. - Having listened with much interest to the speeches of those honorable senators who served in the war areas during the Great War, I rise mainly to pay a tribute to the work of the Repatriation Commission. I have been astounded, and, at times, grieved, to hear the commission and its staff unjustly criticized. My duties as a senator frequently take me to the offices of the Repatriation Commission, and I say unhesitatingly that I have never yet found there anything but the deepest sympathy with returned soldiers, and the keenest desire to do everything possible for them, within the limits of the law.

Senator Collings:

– I agree with that statement.

Senator PAYNE:

– Time after time I have had to cross swords with those of my constituents who have complained of unjust treatment by the Repatriation Commission. I could give instances to show the practical sympathy of the Repatriation Commission with soldier applicants, but I shall not weary the Senate by relating them now. I content myself with corroborating Senator Sampson’s remarks in this respect. I have nothing but the greatest admiration for the painstaking methods adopted by the officers of the commission in dealing with cases which come before them. At times I have been shown evidence which has made it clear that reports circulated by unsuccessful applicants are without foundation. Naturally, not knowing the facts, the community in which a soldier, whose application has been rejected, lives, becomes somewhat, bitter against the commission. I am glad that the bill has been introduced, for I regard it as another step forward in our repatriation legislation.

I support the appeal of Senator Sampson and other honorable senators that the members of the staff of the Repatriation Commission be given the same superannuation and furlough rights as are now enjoyed by other members of the Public Service. If ever men were entitled to be regarded as public servants in the true sense of the word, these men are so entitled.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– At the various conferences of returned soldiers which I have attended, the Canadian Repatriation

Act has always been regarded as being superior- to the Australian legislation. That claim was justified in regard to certain details; but I now venture the opinion, which I think will be endorsed by most representatives of the Returned Sailors and Soldiers Imperial League of Australia, also the Maimed and Limbless Soldiers Association, that the passing of this bill will place the Australian repatriation laws above those of any other nation which was a combatant in the Great “War. The administration of the act is an entirely different matter ; it depends, to a great extent, upon the medical officers attached to the department. My experience of the work of the commission since 1920 leads me to say that, in “Western Australia at least, the act is administered generously. On one or two occasions fault was found with the decisions of the medical officers, but alterations were made in the personnel and the complaints ceased. Those instances, however, were of a minor nature, and do not detract from the general body of good work done by the commission in “Western Australia. I join with other honorable senators in complimenting the Repatriation Commission and the departmental staff on their excellent work. This is the sixth bill for the amendment of .the Repatriation Act since the financial depression of 1929-31. In my opinion the Government deserves to be congratulated on having introduced this series of amendments, and on having restored to a considerable, extent the reductions of pensions made during the period of financial emergency. In reply to a deputation of honorable senators and members of the House of Representatives which, waited on him recently, the Prime Minister promised to take into consideration, having regard to the financial position of Australia, the removal of the remaining reductions, and I hope that that will soon be done.

I take exception to Senator Hardy’s proposal in regard to making available to the appellant, the medical testimony given to the War Pensions Entitlement Tribunal. As each appeal comes before the tribunal, the appellant is required to Submit evidence in support of his claim, but the suggestion that each appellant should receive a copy of such testimony, including most valuable and material medical evidence, is in my opinion unjustified. Unfortunately there are some types of individuals who must make these appeals and it were far better for their own peace of mind, and the peace of mind of their families, that they be not informed of certain medical evidence in respect - of themselves submitted to the tribunal. In many instances, knowledge of such evidence would be harmful to the applicant himself. Having regard to the circumstances, therefore, I suggest that Senator Hardy should review his appeal to the Government for the submission of that testimony to each of the appellants.

Senator Hardy:

– I do not like to correct the honorable senator, but I point out that the medical evidence is already made available to the appellant. He may inspect it if he so desires.

Senator ALLAN MacDONALD.Only in certain instances. As a general rule the appellant may obtain the evidence through the medium of the gentleman who acts on his behalf before the tribunal. But even in those circumstances I know of an instance where the representative of the Returned Sailors and Soldiers Imperial League of Australia, who appeared for the appellant before the tribunal, refused to show him a copy of his- medical history.

Senator Hardy:

– The appellant surely has the right to obtain a precis of the medical evidence.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– I emphasize that in the instance to which I have referred the representative of the returned soldier considered it inadvisable to show him certain medical evidence that had not been tendered in connexion with the. appeal. As I do not desire to speak at length upon that aspect, I shall conclude by again congratulating the Government upon having brought forward this bill.

Senator BROWN:
Queensland

– I rise to support the Leader of the Opposition (Senator Collings) in regard to several submissions which he made to the Minister in charge of the bill (Senator A. J. McLachlan). I desire especially to refer to clause 11 which states -

If ail applicant for service pension is an inmate, or a service pensioner becomes an inmate, of an asylum for the insane, a hospital, sanatorium, benevolent home or similar institution, the rate of service pension payable to the applicant or pensioner so long as lie remains an inmate, shall not, subject to this section, in any case exceed twelve shillings per fortnight.

If a man is married, his pension will be reduced. Only a few weeks ago I had evidence of this. A lady whose husband was in the hospital informed me that medicines, tram fares, &c, incurred iri connexion with his indisposition, cost her nearly £1 a week. I fear that, in this manner, the unfortunate returned soldier who is obliged to enter a hospital is being penalized. I should like the Minister to inform honorable senators whether there is any possibility that, in such circumstances, the pension will be increased. According to the act, a pension shall not exceed 20s. a fortnight ; but, if it is right that a returned soldier should receive a pension, it is surely unfair that he should be penalized because he becomes an inmate of a hospital. Out of the bountiful revenues of the country it would be possible not only to recoup the hospitals for the accommodation of such returned soldiers, but also to pay to the sufferers the full rate of pension.

I support the contention of Senator Brand that returned soldiers who served in the South African war, and are deemed to be unemployable, are entitled to a pension. As a matter of fact, I go further than Senator Brand in this connexion ; I contend that all of the unemployables of the community - unemployable through no cause of their own - should receive a pension. An old acquaintance of mine, who is suffering from tuberculosis, is in a most precarious state of health. For instance, it recently took him a quarter of an hour to walk a short distance from a tram to the office in which he interviewed me. I unhesitatingly affirm that he is unemployable; but, according to the Invalid and Old-age Pensions Act, he must be totally and permanently incapacitated before he is entitled to receive a pension. When he made application to the department he was informed that he could sit on his verandah and do some light work there. He asked the officials to suggest some kind of work; but they could not do so. I am gratified that the present bill does not include those words “ totally and permanently incapacitated “. The decision to grant pensions to those men who are permanently unemployable is definitely a step in the right direction. If a soldier be permanently unemployable., he is entitled to receive a pension. The act stipulates that he must have served in a “ theatre of war “. In my opinion that is an unfair provision. Through no fault of theirs, many of the men who gave their services freely did not reach a theatre of war. Even those suffering from war disabilities find it difficult to obtain a pension. I have a letter in my possession from the brother of a man. who went to the front, and has been endeavouring to obtain a pension. The writer states -

Now I understand that the Repatriation” Department advised that my brother’s disability was not relative to war causes. This seems absolutely absurd to me, knowing that when he, my brother, enlisted and went t© the war in 1915, he was strong, able-bodied, temperate, sound of heart, eye and limb, and when peace was declared in 1918 he returned on a hospital ship after having been in No. 14 Australian Hospital, Cairo, suffering from M. malaria and heart failure. Is this not relative to war causes? Oh, God forgive that such treatment could bc meted out to one who has done his bit, that they, and we, may live.

I fully understand the difficulties of decent men who are morally entitled to this service pension, but are ineligible to receive it because they did not serve in a theatre of war, as defined by the act and the commission. In my opinion, Senator Hardy is quite justified in asking the Government to modify that section of the act, in order to permit the granting of service pensions to more of our men who, by enlisting, showed that they were willing to do their bit for Australia.

Senator COOPER:
Queensland

: - Every member of the Commonwealth Parliament has given careful consideration to the successive amendments of the Australian Soldiers’ Repatriation Act, and I think that the general public, as represented by the Federal Parliament, have treated the repatriation of returned soldiers on a very liberal basis. Since I became a member of this Senate, I have noticed that whenever bodies representing returned soldiers’ organizations waited on members of Parliament, or upon various Ministers administering the Repatriation Department, they received a sympathetic hearing, and so far as the finances of the country have permitted, their requests for extra concessions were granted. I commend Senator Hardy for the very able speech he delivered, and I believe that certain of his recommendations will be acted upon by the Government. At the same time I realize that anomalies always arise in the administration of legislation of this nature. I paid particular attention to the honorable senator’s reference to the? march by Australian Imperial Force troops along the Blue Nile from TelelKebir to Ferry’s Post on the Suez Canal. Senator Sampson also gave some enlightening information upon that subject ; and I should like to endorse his remarks because I am able to speak from firsthand knowledge of this subject. The 15th Battalion, of which I was a member, participated in that celebrated march, and very fortunately came through without loss. But other battalions were not so lucky; not only were several lives lost, but also the physical reserves of many of the survivors were seriously impaired. Eventually the march was pronounced to have involved unnecessary hardship; but I do not propose to discuss that aspect to-day. I do emphasize, however, that the men who were definitely incapacitated as the result of that expedition were able to obtain war pensions, but of the men of the 4th Division, whowere only footsore, or unable to carry on through minor disabilities, 99 per cent, returned to their units on the east side of the Canal within three weeks. Thus, they are entitled to receive a pension in accordance with the provisions of the act. I contend that every man who participated in that celebrated march was eligible either for a war pension or a service pension. I welcome this bill as another stage in the granting of assistance to returned soldiers, in order to enable them to enjoy additional comforts, and to ameliorate the effects of their war service.

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

. - in reply - The debate upon this bill has been interesting and informative, lt serves to show the high esteem in which returned soldiers, a number of whom will benefit further by this legislation, are held by all parties constituting this Senate, lt is a tribute to the service which those men rendered in the interests of this country and of civilization. On the whole, honorable senators have shown a disposition to consider this matter dispassionately, and from every angle. Although I may have to dissent from some of the sentiments expressed during the debate, . I think they were dictated rather by the heart, as ‘Senator Collings would say, than by the head. I wish first to point out one or two of the underlying principles of this legislation as it has come into being from time to time.

There has been a little confusion in the minds of honorable senators with regard to the distinction between a war pension and a service pension. A war pension is paid at a rate assessed after examination by competent medical authorities, irrespective of age, income, economic conditions or place of service, provided only that the incapacity is due to war service. That is the one test. If that is fulfilled, the war pension is then available. A service pension, however, is paid when the conditions of service, income, property, age, permanent unemployability from- any causes, and other factors combine to make the applicant eligible. All he has to do is to fall within the ambit of the definition as provided in the act, and he becomes entitled to a service pension without attributing his condition at all to his war service. It is necessary to keep that distinction well in mind, because I felt, in making notes of what the Leader of the Opposition (Senator Collings) said in a very touching speech, that he would really persuade us to enact legislation to establish a. universal pension, so that every man who serves should have a pension, irrespective of what his condition might be. The Leader of the Opposition urged that the administration should be of an exceedingly sympathetic character. I have had prepared a short summary of what has been done by the people of this country, in order to show how the people have fulfilled what I regard as their obligation and duty to those men who went abroad :to serve their country. I should like to give a brief account of the rehabilitation of the nien who went overseas, because it is only by a review of the steps taken to meet our obligations that we can justify the present position to our own consciences, and view in proper perspective the accomplishments of the past. There were 416,809 enlistments for service in the Australian Imperial Force. Of those who returned 42,582 have since died or left Australia, and there are approximately 221,418 still living. To-day the average age of these former members of the Australian Imperial Force is approximately 45 years. There are over 188,000 returned soldiers under the age of 50 years. To assist those who returned the Government found 280,000 positions, and made .available nearly £2,500,000 in finding suitable employment for returned men. Local authorities throughout the Commonwealth were subsidized, and for a great many years an annual grant of £2,640 has been made available to the Returned Sailors and Soldiers Imperial League of Australia to assist in finding employment for its members. Altogether over 74,000 applications for vocational and industrial training were received. Nearly 28,000 men after training were placed in suitable employment, and the cost of this scheme was almost £5,000,000. Over £1,500,000 was made available in providing assistance for some 68,000 cases who applied for furniture, business plant, stock and similar things, whilst the treatment given by returned medical men and nurses in the commission’s well-equipped and efficiently-staffed institutions throughout the Commonwealth has aroused the admiration of independent and wellqualified observers who have visited this country. Over £7,500,000 has been expended in the maintenance and medical treatment of returned soldiers, and as money is made available from time to time the commission is bringing its institutions more into line with modern conditions. Last year approximately £460,000 -was spent on the treatment and maintenance of the men and the institutions. Over 45,000 treatments were prescribed, and there were nearly 155,000 out-patient attendances. The number of men who are receiving out-door treatment is a striking commentary on what has been done. It is sad to contemplate the fact that, as these men grow older, their war disabilities become more pronounced. At the close of the year 1926, 5,981 were under treatment, whereas at the close of the year 1936, there were 22,130 receiving treatment at the hands of the commission. Honorable senators may not be aware that the commission pays capitation fees to friendly societies for widows,, widowed mothers, and children of’ those who died as a result of war service,, and that these folk then benefit as members of the particular society to which they belong. At the moment nearly 14,000 cases are benefiting, and the cost last year exceeded £16,000. The soldiers’ children education scheme, which, may be termed a living memorial to those who served, is one of the most interesting and valuable phases of our repatriation activities. Over 18,000 applications have been approved. Children to the number of 11,000 have completed training, and are qualified as wage-earners, and by far the greater majority of them are in continuous lucrative employment. So far this scheme has cost £1,680,000, the expenditure last year exceeding £86,000. At present over 6,000 children are undergoing training of some kind, and as a matter of interest, it may be mentioned that there are graduates in medicine, law, dentistry, arts, science, engineering, education and agriculture, whilst nearly every trade has its representatives. As indicative of the high standard, not only of learning, but also of sport and character, that these young representatives of a former worthy generation have attained, I mention with considerable pride that five of the repatriation trainees have been chosen as Rhodes scholars To assist those who are very seriously disabled and in receipt of the special rate of pension for the totally and permanently incapacitated, the commission makes available either £10 a month or £5 a month on certain conditions, in addition to pension, as recreation transportation allowance. The object of this grant is to enable these seriously incapacitated men to get a change of environment and enjoy in at least some measure those entertainments which are within their physical capacity. No fewer than 157 of these cases benefited to the aggregate amount of almost £15,000 last year. The expenditure on war pensions from the inception of the scheme to the end of June last is £133,153,503, the amount involved last year being £7,520,228. At the present time pensioners exceeding in number 260,000 are in receipt of pensions in the Commonwealth, whilst resident in the United Kingdom and other parts of the -world are over 7,000 pensioners. In Australia the commission deals with nearly 5,000 Imperial soldiers who have made their homes amongst us. I think those facts and figures should dissipate the suggestion which, I gathered, underlay the speech of the Leader of the Opposition. “I felt that he was suggesting that we had not treated the returned soldiers as generously as we ought, and also that he was advocating universal pensions.

Senator Collings:

– Not at all.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I am glad to hear the honorable senator repudiate the suggestion. There are certain details connected with the administration of this department upon which I wish to touch. I am obliged to Senator Sampson, who spoke first this morning, for the tribute that he paid not only to the commission, but also to the tribunals which are charged with very difficult duties in relation to the administration. Firstly the Minister who presides over the Department of Repatriation is, whatever honorable senators may think about his politics, a whole-hearted sympathizer with the returned soldiers, as he was with the soldiers during the war. His administration is sympathetic and I have ventured to suggest to him at times that, in the interests of those men with whom he has had a long association, he would go so far as to give away the whole of the resources of the Commonwealth.

Senator Arkins:

– The honorable senator does not suggest that the repatriation legislation is perfect, does he?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– We aim at perfection, although we do not always attain it. This legislation is all that Australia so far has been able to afford. It has been devised on generous lines; in fact, I share the opinion of

Senator Allan MacDonald that, after this bill has been passed, there will be no more generous legislation in the world as regards the treatment of returned soldiers. If time permitted, I could demonstrate it. Senator Sampson has dealt, I think, very effectively with the charge that the commission is not sympathetic. All I can say is that from every quarter and from every organization associated with the returned soldiers we have received tributes to the administration of the commisison and the appeal tribunals.

Senator Collings:

– I have letters from returned soldiers’ associations complimenting me on the attitude I adopted last week.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– That is quite possible.

Senator Arkins:

– Why have there been so many amendments of this legislation ?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The necessities of the situation make amendments desirable from time to time. A prominent official of the returned soliders’ organization in the State from which the Leader of the Opposition comes recently paid a decided tribute to the administration, not only of the appeal tribunals, but also of the commission itself.

Senator Collings:

– Hear, hear ! We all agree with that.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I fail to find any evidence of lack of sympathy. I do not desire that, in regard to repatriation administration, or in regard to any other tribunal set up to deal with the rights of individuals, we should fall into the habit of challenging the decisions of the umpire. I have always regarded the man who does that as a bad sport. Trouble will inevitably occur from time to time, but we have laid down certain principles, the effect of which, I think, is seen in the figures I have cited to the Senate this morning. They show that the administration has been generosity itself, and, after all is said and done, as the distinguished soldier from Queensland pointed out in the article to which I have referred, there is never any question that the benefit of the doubt, where a doubt has existed, has always gone to the returned soldier. An honorable senator suggested that the onus should be upon the War Pensions EntitlementTribunal to prove that the disability of a returned soldier is not due to war service, but I believe that all cases in which there has been a shadow of doubt have been decided in favour of the appellant. Reference has also been made to the lack of sympathetic consideration shown by the Entitlement Tribunal in certain cases, but as the members of that tribunal are all returned soldiers, all cases are dealt with sympathetically.

Senator Hardy:

– Not necessarily. The three members of the tribunal are colonels, and the “ diggers “ complain that their applications are determined by “ brass hats “.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– So long as they have not brass heads or brass hearts the law will be administered sympathetically. Senator Hardy also suggested that the members of the tribunal should publish their reasons for all decisions. In this connexion I am reminded of a junior member of the English bar who when appointed as a judge in Jamaica conferred with an eminent King’s Counsel as to whether he should give reasons for his judgments. He was advised not to do so, and carried out his judicial duties with distinction for about three years. Elated by his success, and vain of his judicial acumen, he commenced to give reasons for his decisions ; immediately appeals were made to a higher tribunal, and his decisions were upset. The chief complaint of Senator Hardy is that the reasons for the decisions of the Entitlement Tribunal are not disclosed.

Senator Hardy:

– That is so.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– It would not be of advantage to appellants if the reasons were given, because reapplications involve a complete rehearing of the claim.

Senator Hardy:

– But the appellants cannot ascertain the grounds on which the tribunal reached its decision.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Why should reasons be given? A jury gives its finding on the facts submitted.

The definition of “ theatre of war “ in our legislation is more generous than that in the Canadian act under which an applicant for a war pension has to prove that he is suffering disability, or contracted a disease, by a hostile act of the enemy. The New Zealand legislation provides that an applicant must prove that he served with a unit which actually engaged in conflict with the enemy. Senator Hardy who referred to the Blue Nile march, should remember that a war pension is still available to those who suffered disability as a result of service under such conditions.

Senator Hardy:

– Provided that the applicant can prove his case.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– There should be no difficulty in that; I do not admit that the administration is harsh in that respect. If concessions were extended to returned soldiers alleged to be suffering disability due to service in other than a theatre of war, consideration would have to be extended to those who suffered disabilities as a result of service in Australian camps, in which meningitis in a virulent form was prevalent.

Senator Hardy:

– ‘Why not allow the commission to make a decision in each individual case. The commission has bound itself by a firm regulation.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– T doubt whether a decision of the commission, the members of which are familiar with the facts, should be interfered with. A determined effort is made to hold the scales evenly between returned soldiers and the taxpayers. The doubt is always resolved in favour of the applicant.

Senator Collings:

– We contend that it is not.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Why should the members of the commission act unsympathetically towards their former comrades by administering the law harshly? . Having had a long experience in the administration of the law, I know that the person who loses a case is always dissatisfied with the tribunal which gives a decision against him.

Senator Hardy:

– Will the Minister consider granting sufferers from tuberculosis a full war pension?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I understand that that matter is now receiving the attention of the Minister for Repatriation. I shall also submit to him the suggestions made concerning the granting of pensions to certain South

African War veterans, but the Government will have to consider carefully the payment of pensions to persons who served in a war which terminated 34 years ago. Some legislative limitation must be imposed in respect of pensions to the wives of returned soldiers .who remarry.

The PRESIDENT:

– Order ! The Minister has exhausted his time.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 4 agreed to.

Clause 5 (Grant of service pensions).

Senator ARKINS:
New South Wales

.- Although the Minister mentioned that sympathetic treatment is being extended to returned soldiers, I remind him that quite a number of them are being harshly treated by reason of the interpretation placed upon the definition of “theatre of war”.’ Every member of the Australian Imperial Force, on enlistment, was subjected to careful medical examination to ensure that he was in a sound physical condition.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– The Australian Imperial Force was composed of hand-picked men.

Senator ARKINS:

– As physical specimens, they were regarded by world authorities as unequalled by any other troops. Many of them, however, returned to Australia physical wrecks. In my humble opinion, any soldier who served in a major action in France, Gallipoli or Palestine, and returned to Australia to become broken in health, should be granted a pension. The conditions of modern warfare impose on those taking an active part in it tremendous nerve strain; there should be no question of doubt about this matter at all. I understand that, as the act now stands, a member of the Australian Imperial Force, whoso service was restricted to clerical work at the Australian Head-quarters at Horseferry-road, London, may be granted n. pension by reason of the fact that hp was placed under direct military orders to serve in a particular place, whereas, very young men, and men already advanced in years, who were drafted into camps in England, under the severe conditions of an English winter, are denied it. There is no comparison between, the hardships inflicted on men who served in sheltered positions at Horseferry-road, and those who served in the various camps in England. As I mentioned in my second-reading speech, I should like to see the definition of “ theatre of war “, widened to include any areas in which the enemy operated, and also those, whether on land or sea, in which, the lives and health of soldiers were endangered by atmospheric, food, or other unhygienic conditions.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– The honorable senator apparently has forgotten the zeppelin air-raids over England. On one occasion a bomb dropped by enemy aircraft struck very near Horseferryroad.

Senator ARKINS:

– If it could be proved, that the health of men, suffered as the result of air-raids over England - : and such raids undoubtedly caused severe nerve shock - they should be granted a pension, and I believe the Repatriation Commission would be quite prepared to admit their claims.

The CHAIRMAN (Senator Sampson:
TASMANIA

– I ask the honorable senator to connect his remarks with the clause under discussion.

Senator ARKINS:

– I hope that the Minister will agree to widen the definition of “ theatre of war “, because, in many cases, the interpretation of the definition has. operated unfairly in respect of certain soldiers. I ask the Minister and those administering the act to look into the suggestions which I have made.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I have taken a note of the point raised by the honorable senator and I shall submit it to the Minister for consideration.

Senator ARKINS:

– Although I agree with the Minister that the Australian governments have done more for returned soldiers than have the governments of any other country, there are many cases of hardship which should be given more sympathetic consideration. The Minister has said that in no case is the soldier refused the benefit of the doubt; but in many cases which have come under my notice, it appears that the department has never attempted to give the applicant the benefit of the doubt. If a soldier is known to have served in a major action in the war he should be granted a pension without raising the question of doubt. I have known many applicants and their physical attributes, and though they were obviously entitled to more sympathetic consideration, the department has rejected their claim that no doubt existed whatever. The strain of modern warfare upon the physique and mentality of the soldiers is so great that there should be no quibble, medical or legal, in regard to claims for disabilities arising out of war service. Medical science is not a positive science; accepted medical beliefs of to-day are discarded tomorrow in the light of more expert knowledge.

Senator J V MACDONALD:
QUEENSLAND · ALP; FLP from 1932

– We learn by the mistakes of the past.

Senator ARKINS:

– ‘Medical science has progressed in a revolutionary manner. Accepted ideas of yesterday are to-day relegated into the limbo of the past. Where a soldier is wrecked physically and mentally by the conditions under which, modern warfare is fought, he should be given the benefit of the doubt without quibble of any sort.

Senator HARDY:
New South Wales

– I would like the Minister to explain why the members of the Repatriation Commission have handicapped themselves by defining what, in their opinion, constitutes a “ theatre of war “. The act is perfectly clear and sets out beyond any doubt the definition of a “ theatre of war Why did not the members of the commission reserve to themselves the right to decide in respect of each individual case what constitutes a “ theatre of war “ ? It seems to me that all they have done is to destroy their freedom of action in this regard, because in making a regulation they bind themselves according to it. This is not a vote of censure on the members of the commission - we want them to exercise their judgment; that is the purpose for which they were placed in their high position - they were appointed to administer the act and the act itself already clearly defines a “ theatre of war “. The commission, however, without request from the Government definitely tied its hands by providing by regulation that in respect of the Suez Canal zone a theatre of war “ shall only be that area east of the canal. That seems to be a most illogical decision to make. Why should not the members of the commission have the right to use their own discretion as to whether a man served in a “ theatre of war “ or not, and then make a decision as to whether or not he is entitled to a pension?

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

– The act itself definitely lays down - “ served in a theatre of war “ means served at sea, in the field, or in the air, in naval, military or aerial operations against the enemy in an area, or on an aircraft or a ship-of,var at a time when danger from hostile forces of the enemy was incurred in that area or on that aircraft or ship-of-war by the person so serving.

By no stretch of the imagination can those unfortunate men who marched on the west side of the Canal be brought within that definition.

Sitting suspended from 1245 to 2.15 p.m.

Progress reported.

page 2591

QUESTION

CUSTOMS TARIFF (No. 2) 1936

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Motion (by Senator A. J. Mclachlan) proposed -

That the bill be now read a first time.

Senator COLLINGS (Queensland) 1 2.20]. - I desire to know whether, on the first reading of this bill honorable senators are free to discuss the bill generally, or must their remarks be confined to particular items?

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

. - The first reading is purely formal. During the second-reading stage the general principles of the bill may be discussed.

Question resolved in the affirmative.

Bill read a first time.

Motion (by Senator A. J. McLachlan) proposed -

That the second reading of the bill be made an order of the day for a later bour of the day.

Senator COLLINGS:
Queensland

– The procedure which is being adopted in connexion with this bill suggests unseemly haste in dealing with legislation. I, as Leader of the Opposition, was definitely promised that the Senate would have three days to discuss this measure; but it will be impossible to devote three days to it, and adjourn on Friday, if proper attention is to be given to other matters which will come before us. So far, I have not seen this bill, and there are about five other tariff bills, all of which are interrelated, yet to be considered.

Senator Sir George Pearce:

– The Senate will sit an additional day, if necessary.

Senator COLLINGS:

– I realize that when the second reading has been moved at a later hour of the day I shall have the opportunity to move the adjournment of the debate, and that in the event of such a motion being agreed to, I can then consider the bill. But there are other matters to come before us - important proposals which also demand proper consideration. I make my protest now against any attempt so to speed up the procedure that a proper opportunity to deal with important legislative proposals may not be provided.

Senator Sir George Pearce:

– There is no intention to restrict debate.

Senator COLLINGS:

– All the bills dealing with various tariff proposals should be before us before the first one is dealt with.

Senator Sir George Pearce:

– That will be done.

Question resolved in the affirmative.

page 2592

CUSTOMS TARIFF (EXCHANGE ADJUSTMENT) BILL (No. 2) 1936

Bill received from the House of Representatives.

Senator Sir GEORGE PEARCE:
Minister for External Affairs · Western Australia · UAP

[2.24].- I move-

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

I draw the attention of the Leader of the Opposition (Senator Collings) to the titles of this and other bills dealing with tariff matters, and remind him that the practice has been to allow cognate bills to be discussed simultaneously on the first of the series. That obviates a full debate on each bill.

Question resolved in the affirmative.

Bill (on motion by Senator A. J. McLachlan) read a first time.

page 2592

CUSTOMS TARIFF (No. 3) 1936

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator A. J. McLachlan) read a first time.

page 2592

CUSTOMS TARIFF (EXCHANGE ADJUSTMENT) BILL (No. 3) 1936

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator A. J. McLachlan) read a first time.

page 2592

PAPERS

The following papers were pre sented : -

Report of the Chairman of the Royal Commission on Taxation (Sir David Ferguson), dated 28th July, 1936, regarding Income Tax in relation to the sale of Crown Leases.

Seat of Government Acceptance Act and Seat of Government (Administration) Act - Industrial Board Ordinances - Regulations amended.

Apple and Pear Bounty Acts (1936) - Report upon the working of the Acts, together with return showing the amount of bounty paid.

Air Navigation Act -Regulations - Statutory Rules 1936, No. 156.

Norfolk Island Act - Ordinance No. 20 of 1 936 - Dogs Registration.

page 2592

TARIFF BOARD REPORTS

Senator A. J. McLACHLAN laid on the table reports and recommendations of the Tariff Board on the following subjects : -

Perfumed spirits.

Soap n.e.i., soap substitutes and compounded detergents.

Oils, including medicinal oils (except essential oils) not compounded - in vessels not exceeding one gallon - Tariff Item 230.

Furs and other skins, and articles made thereof.

page 2593

TARIFF BOARD REPORT

Portland Cement

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

. - by leave - I lay on the table of the Senate the report of the Tariff Board on - .

Portland Cement from United Kingdom - Operation of Sections 4 and 7 of the Customs Tariff (Industries Preservation) Act 1921-33.

The references to the board were as to the necessity for the operation of sections 4 and 7 of the act mentioned in respect of shipments of cement ex m.v. Rabaul at Sydney and ex m.v. Brattdal at Fremantle in August last, and also as to the necessity for the general operation of sections 4 and 7 of the act iu respect of portland cement originated in or exported from the United Kingdom. The board’s recommendations are as under: -

  1. That Gazette notice No. 203 of 8th July, 1924, bringing portland cement from the United Kingdom within the provisions of section 7 of the Customs Tariff (Industries Preservation) Act 1921-1933, be cancelled.
  2. That the following bo gazetted under sections 4 and 7 of the Customs Tariff (Industries Preservation) Act 1921-1933: -

Portland cement originated in or exported from the United Kingdom of which the c.i.f. price at main Australian ports is less than 51s. (id. sterling per ton.

  1. That no action lie taken to impose dumping duty on the importations of cement ex Brattdal and Rabaul referred to in this report.

In a footnote the Board states that it has examined the proposed amendments to the Customs Tariff (Industries Preservation) Act 1921-1933, now being considered by the Parliament, and desires to point out that its recommendations would not be varied by the enactment of legislation along the lines proposed. It is anticipated that copies of the report will be available to honorable senators by tomorrow morning.

page 2593

AUSTRALIAN SOLDIERS’ REPATRIATION BILL 1936

In commiU.se: Consideration resumed from page 2591.

Clause 5 (Grant of service pensions).

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

– Prior to the adjournment I was referring to the definition in the act of “ served in a theatre of war “.

It is within the ambit of that definition that the commission has to act. In this respect it has arrived at a determination which has been criticized by some honorable senators. All I propose to do is to submit to the Minister the amendments suggested by various honorable senators. Clause 5 amends the principal act in such a way that there is no necessity for nurses to have served in a theatre of war in order to become eligible for consideration for a service pension. So long as a nurse has “ served abroad or embarked for service abroad”, she is entitled to receive a pension provided, of course, that she is otherwise eligible.

Clause agreed to.

Clause 6 (Service pension in respect of a member permanently unemployable or suffering from pulmonary tuberculosis).

Senator HARDY:
New South Wales

– I invite the Minister in charge of the bill to consider a suggestion which may reduce the number of appeals now heard by the Entitlement Tribunal. Where an applicant decides to appeal from the decision of the commission to the Entitlement Tribunal, he fills in the prescribed form and appoints an advocate. The complete details of his history are not made available to him except at the place where the appeal is to be heard, and generally several days before the hearing. If the advocate is situated in a country centre, he must of necessity compile the evidence for submission to the tribunal on a hypothetical case. He has no opportunity to construct his case, because he is not able to peruse the precis. On the other hand, the advocate in Sydney is not so disadvantaged. For instance, a city advocate selected by a soldier resident in a country district to present his appeal to the tribunal could, with the authority of the appellant, study at the offices of the commission the complete precis of the case including all the details of the medical examination, the man’s war history, and similar information. For that reason the city advocate has a big advantage over the country advocate to whom such information is not available. A number of appeals to the tribunal by returned soldiers in the country who are represented by country advocates, would probably not be made if the advocate were in possession of the precis because he would realize that a prima facie case had not been made out.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Or the country advocate might frame the case in another way.

Senator HARDY:

– That is so. This disadvantage to country advocates has been brought under my notice on several occasions. For the reasons which I have outlined, I suggest that, to approved advocates suggested by the Repatriation Commission, the precis of the various cases be made available.

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

– Speaking as a professional man I consider that there is a good deal of substance in Senator Hardy’s contention and I undertake that it will be conveyed to the commission. In present circumstances country advocates have not facilities equal to those enjoyed by city advocates, and it would appeal- to be only fair for the commission to adopt the honorable senator’s suggestion.

Senator ARKINS:
New South Wales

– The proposed new sub-section 3a relates to invalid and old-age pensions, and is in conflict with the service pension. . The bill enables the Repatriation Commission to overrule a decision by the Invalid and Old-age Pensions Department as to the total and permanent incapacity of a person. Thus there will be two conflicting authorities. The Invalid and Old-age Pensions Department may consider that a man or woman is totally or permanently incapacitated; but if such person desired to transfer to the service pension, the Repatriation Commission might overrule the departmental decision. In my opinion that is unjust; the departmental ruling should be permitted to stand in all circumstances.

Senator HARDY:

– In other words the decision of one authority should be binding.

Senator ARKINS:

– Yes. Competent authorities interested in this matter prefer the decision to be left with officials of the department. That there should be the possibility of a conflict of opinion between the department and the Repatriation Commission is bad, and I fear that anomalies will arise sooner or later. They have already arisen in respect of other branches of repatriation to the disadvantage of the soldier, the department, and the Government, because conflict of authority invariably means the unnecessary expenditure of money.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

-. - The honorable senator misapprehends the effect of this provision.

Senator ARKINS:

– I hope I do. Will the Minister in charge of the bill explain its purport?

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

– The proposed new sub-section 3a merely empowers the commission to disregard entirely the fact that an applicant was in receipt of an invalid pension prior to his death. At the present time it is not able to do so and it is for the purpose of enabling it to do so in future that this sub-section has been introduced. The commission may disregard that fact; in this respect it has a clean sheet upon which to work. Whatever disability attaches to the fact that a person was in receipt of an invalid or old-age pension, it is not to be used now as a reason by the commission for refusing the pension.

Clause agreed to.

Clauses 7 to 9 agreed to.

Clause 10 -

Section forty-five AN of the principal act is repealed and the following section inserted in its stead: - “45an. Upon the death of a member of the forces the service pension previously payable, or granted subsequent to his death, to the wife and children of the member may, subject to this act, he continued at such rates, not exceeding the maximum rate payable under this act to the wife or children as the case may be, as the commission or a board determines, but, if the wife re-marries, all such pensions shall be cancelled as from the date of the re-marriage.”

Senator COLLINGS:
Queensland

– I am doubtful whether the words -

If the wife re-marries, all such pensions shall be cancelled . . . represent the real intention of the Government. Accordingly, I move -

That the words “ all such “ be left out with a view to insert in lieu thereof the word “ her “.

My amendment will ensure that the pension payable to the children, if any, will not cease merely because the mother re-marries. I recognize that if the widow of a soldier receiving a pension remarries, her pension should cease ; but the soldier’s children should not be penalized because of the re-marriage. For example, in many instances there would be no evidence - and it would be undesirable to look for it - that the second husband could properly assume the responsibility for the maintenance of the woman and i he children. I admit the maintenance of the wife is his responsibility ; but the future of the children, so far as the pension is concerned, should not be left in doubt.

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

– The existing act provides that, if the wife re-marries, her pension and the pensions of the children shall be cancelled as from the date of the re-marriage; that is the law already. This matter was debated at considerable length ‘ in the House of Representatives, and the Minister there promised Mr. Holloway to give it consideration. I give the Leader of the Opposition (Senator Collings) the assurance that, if he will withdraw the amendment, the matter will be considered. In fact, it is now receiving the Minister’s attention. There are a number of difficulties in the way of making the amendment. For instance, a man might marry a soldier’s widow simply because the children were receiving pensions. The money might be an inducement to an unscrupulous person. In such cases the children would be in a worse position than if the mother remained a widow. I read the report of the debate in which Mr. Holloway raised this very point, and I can assure the committee that the Minister promised to reconsider the position, and submit the matter to Cabinet. As it is desirable to pass this legislation speedily, I ask the Leader of the Opposition not to press the amendment.

Senator COLLINGS:
Queensland

– Whilst always anxious to accept the assurances of Ministers, I feel that the promise in this case is being made by the Postmaster-General (Senator A. J. McLachlan) as deputy for somebody else.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The assurance was given in the House of Representatives by the Minister himself.

Senator COLLINGS:

– If, after consideration, the Minister decides not to make the change, our opportunity to carry the amendment will have gone. The children will be deprived of their pensions because the mother, over whom they have no control, re-marries

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– But that has always been the law. Nothing is being taken away from them by this bill.

Senator COLLINGS:

– I want to give them something more. I do not wish to delay the business or to appear ungracious; but 1 feel inclined to press the amendment. If the present law is that the children are deprived of the pension on the re-marriage of the mother, it is contrary to what I have always understood.

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

– This matter was extensively debated in another place. A thousand and one little cross currents obtrude themselves in a measure of this sort, and the Minister is surely entitled to an opportunity to consider the pros and cons of this amendment. It may not involve a large amount of money, but there are other considerations to be taken into account. I give -the honorable senator my assurance that his proposal will be considered. The Minister in the House of Representatives gave his definite assurance, which Mr. Holloway and those supporting him accepted.

Senator ARKINS:
New South Wales

– I agree with the Leader of the Opposition (Senator Collings) in this matter. I know the section has been in operation for some time; but I have never agreed with it. The children should not be penalized for what the mother does. I do not think the small amount involved will attract unscrupulous persons. The pension ranges from 2s. to Ss. a child, which is a bagatelle, and as the children grow older it will gradually disappear. It is ridiculous to suggest that a man will marry a widow because her children are entitled to small pensions. He would not assume such a heavy liability in order to secure at the most a few shillings a week.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– He may regard the children’s pensions as an asset.

Senator ARKINS:

– He cannot possibly imagine that the pension will be an asset in the case of a growing child. The section, whilst saving a few thousand, pounds to the Treasury, subjects the children to disabilities. If the Leader of the Opposition presses the amendment, I shall vote for it.

Senator HARDY:
New South Wales

– We are entitled to more definite information as to the amount of money involved. If I had known that it was the intention, of the Opposition to move amendments, I could . have brought forward at least 50, all most meritorious. I feel that the repatriation policy is a long-range one, and is gradually evolving, through the lessons of the past, into what will ultimately become a perfect repatriation scheme. I have refrained from moving amendments because I felt that we were gradually securing what we desired by that process of evolution. In my opinion tubercular soldiers should have full war pensions, but in that matter I did not move an amendment. Instead, I took the assurance of the Postmaster-General that the matter was receiving the full consideration of the Minister in charge of the department. If, in the next amending bill, no progress is made in these directions, I shall move a definite .-and official amendment. I have no doubt that what the Leader of the Opposition said is perfectly correct. I agree that the children should not be penalized, but the Minister has given an assurance that the matter will be considered with the utmost sympathy, and I believe that that assurance will have definite results.

Senator LECKIE:
Victoria

.- The Leader of the Opposition (Senator Collings) has raised a good point. The assurance that the Minister will consider it, does not go far enough. If the Minister decides against it, we shall be powerless to do anything. More information should have been given.

Senator Sir George Pearce:

– What the honorable senator suggests has not been the experience of the past, because this very bill is the result of representations made to the Government.

Senator LECKIE:

– The Minister promised merely consideration, not favor able consideration, Although this point has been raised -suddenly, the reform appears to be feasible. If we had the actual figures, we could see how much it would cost the community.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– We cannot give the figures because the existing law provides that the children’s pensions shall stop, and this bill simply remodels the law.

Senator LECKIE:

– Then the department has no idea of the amount involved?

Senator Sir George Pearce:

– No; it wants time to find out.

Senator LECKIE:

– I do not like voting against the Government on this issue, but, on the face of it, the amendment seems so reasonable that the Government should give way. It is not just to penalize the children because the mother re-marries. She may marry a worthless man who will “ collar “ their little pension as an adjunct to his income, and then neglect them. The Government might go a little further, and meet the wishes of the Leader of the Opposition.

Senator HERBERT HAYS:
Tasmania

– There are reasons why the pension should not be given to the children, especially if the mother marries a worthless fellow. If the Government considers the matter, as it has promised to do, it should consider the paying of the money into a trust account.

Senator Sir George Pearce:

– That would require further legislation.

Senator HERBERT HAYS:

– I agree. I support the Government in the matter. All I say is that it should consider, not the payment of the money to the children, but its diversion into a trust account for the benefit of the children when they come of age. It should not in any circumstances be handed over to the person who marries the soldier’s widow.

Senator BROWN:
Queensland

– I support the Leader of the Opposition (Senator Collings). The only question i.s whether it is right or wrong .to continue the pensions to the children. If it is right to pay the money to the widow, why penalize the children for their mother’s re-marriage? Why not carry the amendment ?

Senator Hardy:

– Why did not the Labour party press the amendment in the House of Representatives?

Senator BROWN:

– Mr. Holloway, who raised the point in another place, told me that he thought the amendment should be pressed in the Senate, because in his opinion the children should not be penalized. We are asked to accept the assurance of the Minister, that the subject is receiving the consideration of Cabinet; but as certain Ministers and members will be going on a jaunt to attend the coronation celebrations, the date on which Parliament will reassemble is indefinite. The amendment moved by the Leader of the Opposition provides that if a soldier’s widow re-marries, the pension of the children shall continue, and I intend to support it.

Senator DEIN:
New South Wales

– Although we have been informed by the Minister (Senator A. J. McLachlan) that the widow of a returned soldier may marry a worthless man, who might deprive the children of their pension, we have to remember that she may marry an honorable man, who may not be able to undertake the financial responsibility of maintaining the children if they were deprived of the pension. Senator Herbert Hays suggested that the money to which children would be entitled should be paid into a trust fund, but the object of this legislation is to assist the children during a period of their lives when it will be of the greatest benefit to them. If the money be paid into a trust account, it may not be made available to the children at a time when they need it. It is unfair to penalize children simply because the mother undertakes the responsibility of remarrying. I support the amendment.

Senator HARDY:
New South Wales

– Can the Minister (Senator A. J. McLachlan) state what amount would be involved, and how many cases would have to be considered, if this amendment were adopted? I believe that the total amount would not exceed £100 or perhaps £150. If that be so and we have the Minister’s assurance that the proposal is being considered by the Government, the Leader of the Opposition should not press his amendment. Can the Minister ascertain the amount involved ?

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

. - Senator Hardy must realize that, at this stage, it is utterly impossible for the officers of the department to supply the information he requires. We are reenacting a portion of the existing law, and widening its scope in respect of posthumous pensioners. In these circumstances, I ask the honorable senator not to press the amendment, because it will be necessary for the officers to conduct an extensive research to enable them to inform the Minister who proposes to bring the matter before Cabinet. The Government has introduced this legislation to restore certain rights and privileges, and even to enlarge them, and in these circumstances, I trust that the Leader of the Opposition will accept the assurance I have given to the committee.

Senator COLLINGS:
Queensland

– I have not the slightest intention of withdrawing my amendment. I cannot accept the explanation offered by the Minister. Proposed new section 45an reads -

Upon the death of a member of the forces, the service pension previously payable, or granted subsequent to his death, to the wife and children of the member may, subject to this act, be continued at such rates. . . .

Therefore, a pension is paid to the children of a member of the forces. not exceeding the maximum rates payable under this act to the wife or children as the case may be, as the commission or a board determines, but if the wife remarries, all such pensions shall be cancelled as from the date of the remarriage.

I have moved that the words “ all such “ be left out and the word “ her “ substituted, because I do not object to the pension of the widow who re-marries being cancelled.

Senator Hardy:

– Suppose her judgment is bad.

Senator COLLINGS:

– I am not responsible for her acts. I am not her keeper; but as an adult citizen of the Commonwealth I should do all in my power to assist children who have lost their father. The Minister said that he bad no information as to the actual cost involved, and Senator Hardy childishly suggested that the amount may not exceed £150 a year; but I believe that it will be much more than that. Paying the money into a trust account would mean introducing another bill which could not be considered during this period of the session. The amendment I have moved will have to be carried or rejected this afternoon. I do not agree with the honorable senator who said that Parliament, may not re-assemble before the coronation, but I am confident that, when we do meet, an amending repatriation bill will not be brought forward. The re-assembling of Parliament in ail probability will be merelya formal gathering to bid farewell to those invited to attend the coronation ceremonies, and consequently amending repatriation legislation will not be introduced. I intend to press my amendment, which I consider fair and. reasonable.

Senator HARDY:
New South Wales

– If the Leader of the Opposition (Senator Collings) wishes to be fair and reasonable, why does he not confer upon the widow the benefit he proposes to extend to the children?

Senator Collings:

– If the widows can afford the luxury of remarrying, they must take the risk.

Senator HARDY:

– To be consistent, the honorable senator should include the widow. If a woman receiving the oldage pension, but not having more than the permissible income, re-marries, she is not deprived of the pension. If an invalid pensioner remarries she is not denied a pension. If the Leader of the Opposition wishes to be consistent, he should include the widow as well as the children.

Question - That the words proposed to be left out (Senator Collings amendment), be left out - put. The committee divided.

Chairman - Senatorb. Sampson.)

AYES: 11

NOES: 20

Majority . . . . 9

AYES

NOES

Question soresolved in the negative.

Amendment negatived.

Clause agreed to.

Clause 11 -

Section 45ao of the Principal Act is repealed and the following section inserted in its stead: - 45ao. - (1) If an applicant for service pension is an inmate, or a service pensioner becomes an inmate, of an asylum for the insane, a hospital, sanatorium, benevolent home, or similar institution, the rate of service pension payable to the applicant or pensioner so long as he remains an inmate, shall not, subject to this section, in any case exceed twelve shillings per fortnight . . .

Senator COLLINGS:
Queensland

– There is no need to elaborate the remarks I made on this clause during my second-reading speech. I know of no reason why, because a soldier is sufficiently unfortunate to become an inmate of one of the institutions mentioned in the clause his pension should be interfered with. I have already said that his pension should be inviolable against any government charges or other charges made pursuant to the law. If institutions cannot carry onwithout deductions of this sort, the Government should make an annual contribution to compensate them for the maintenance of pensioners. I therefore move -

That the words “ in any case exceed twelve shillings per fortnight”, sub-section 1, proposed new section 45ao, be left out, with a view to insert in lieu thereof the words “be interfered with “.

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

– At present section 45AO reads -

If a service pensioner becomes an inmate of an asylum for the insane, his pension shall, without further or other authority than this Act, be deemed to be suspended, but when the pensioner is discharged from any such asylum, payment of his pension shall be resumed. . .

When a pensioner is discharged from &n institution his pension is immediately restored to him. In the clause now before the committee, the Government is endeavouring to ameliorate the harshness of the existing legislation; although it is proposed to repeal section 45AO it is also proposed to empower the commissioner to grant to unfortunate pensioners who become inmates of institutions 6s. a week for their’ own personal expenses. The clause does not apply, however, to tubercular pensioners who are .already provided for in clauses 4, 6 and 1 of this bill. We must have some regard to the fact that institutions such as those mentioned in the bill are supported by Stategovernments and are a charge upon the public, and that, whilst a pensioner is an inmate of such an institution, he is totally maintained by it. It is only just, however, that the unfortunate sufferer should receive some part of the pension to meet his domestic expenditure. It is therefore proposed under this clause to give him 6s. a week. I do not think that this matter need be debated at any length.

Senator COLLINGS:
Queensland

– The statement of the Minister convinces me that the position is worse than I first suspected, and my amendment becomes very much more essential than I believed it to be. Proposed new section 45AO provides that if an applicant for service pension becomes an inmate of one of the several institutions mentioned therein, he shall not be paid any amount exceeding 12s. a fortnight. The clause does not provide that lie is to get anything; obviously, he is to have something taken away from him.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– In such circumstances he gets nothing under thu law as it stands at present.

Senator COLLINGS:

– That is exactly what I wanted to get at. Apparently, when a soldier becomes mentally or physically sick and is forced to enter an institution for treatment, his pension is cut off. That is even bigger swindling on the part of the Government that boasts of its admiration for the service which these men rendered to the nation. As is well known to every honorable senator, I am no lip loyalist ; I want the laws of this country translated into something more than lip loyalty. I have learned with dismay, not to say disgust, that when a war pensioner becomes an inmate of an institution through no fault of his own, but because of the sacrifices he has made, his pension is stopped. If that be so, when such a pensioner becomes an inmate of the institution, Commonwealth revenue is increased by the full amount of his pension. What the Government proposes to do now is merely to diminish the degree of its infamy.

Senator Hardy:

– Why did the honorable senator vote for the original section in the act?

Senator COLLINGS:

– I am not sure that the original section was inserted in the act, since I have been a member of this Senate.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– It was inserted last year.

Senator COLLINGS:

– If that be so, my perception must have been sharpened since then; I cannot, however, congratulate Senator Hardy, who has been in full possession of his perceptive powers all the time, in having allowed this section to be inserted in the act. This is the first I have heard of it, although I knew that when an invalid or old-age pensioner became an inmate of an institution, a portion of his pension was withheld from him. I did not, however, know that the same practice was adopted in the case of war pensions. I stick to my amendment, taking the risk that only members of the Opposition will vote in favour of it.

Senator BROWN:
Queensland

– There seems to be a misunderstanding among honorable senators in regard to this matter. I submit that when an exsoldier is sick, he deserves more than when he is enjoying good health. In civil compensation cases, a man who may be earning £5 a week is granted only £2 10s. a week as compensation for loss of work through injury. I understand from the Minister, however, that if an unfortunate soldier pensioner enters an institution for treatment, the whole pension is cut off immediately.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– That is not quite so.

Senator BROWN:

– We say that if a man receiving a service pension is compelled to go into hospital because of increasing ill health, it is the height of injustice to take his pension from him.

Senator Dein:

– That is not so. Part is paid to the man, but nothing to the institution.

Senator BROWN:

– That is wrong; although we believe hi supporting such institutions, we do not believe that a soldier should be penalized simply because his disabilities compel him to enter an institution for treatment.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– What is his pension for?

Senator BROWN:

– It is paid as compensation for certain disabilities. To qualify for the receipt of a service pension, an applicant must have served in a theatre of war. Because his disabilities have increased, and he is forced to enter an institution for treatment, his pension is stopped.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The pensioner loses part of it.

Senator BROWN:

– We contend that if a man is compelled to enter such an institution for treatment, he should not be penalized.

Senator Hardy:

– He is granted a service pension, because he is permanently unemployable.

Senator BROWN:

– If a married pensioner goes into a hospital for treatment, his wife and family are dependent upon the service pension for a certain standard of comfort.

Senator Hardy:

– They also get pensions.

Senator BROWN:

– Service pensioners rely on the pension to provide for themselves, their wives and children in frugal comfort, but, according to the Minister’s statement, immediately such a pensioner becomes an inmate of an institution because of disabilities, his pension is withdrawn. If an amendment can be evolved which will secure the continuance of the full pension in such circumstances, it will have my full support.

Senator DEIN:
New South Wales

– I disagree entirely with the views expressed by the Leader of the Opposition (Senator Collings) in regard to this matter. The honorable senator stated by way of interjection, that if all service pensioners entered institutions, the Government’s liability for such pensions would cease ; that is absurd. At the present time mental cases receive nothing; other cases receive a maximum of 19s. a week if not in hospital, and 6s. a week if in hospital. I may add that the institution receives nothing. Therefore, whether all service pensioners are in institutions or not, the charge on the public purse is not varied. At the present time a service pensioner gets 19s. a week to provide himself with food, clothing, housing and incidentals; when he goes into an institution, food, clothing, housing, &c, are provided for him by the institution.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– And his wife and children, if any, still continueto get pensions.

Senator DEIN:

– Under the present proposal it is desired to provide him with 6s. a week for incidentals. It seems to me that he will be comparatively better off while an inmate of an institution than when outside of it. I am glad that the Government has seen fit -to allow the pensioners a few shillings a week for incidentals. I shall support the clause in its present form.

Senator GUTHRIE:
Victoria

– I understand that, previously, soldiers who entered institutions did not receive anything at all for themselves, but that now it is intended that they shall begiven a small allowance. The clauseprovides that in no case shall the payment exceed 6s. a week. That is themaximum payment; but there is no guarantee that the soldier will get that amount. Is he assured of 6s. a week insuch circumstances ?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Yes.

Senator Arkins:

– I should like to move an amendment to an earlier part of theclause.

Amendment - by leave - temporarily withdrawn.

Senator ARKINS:
New South Wales

– The word “sanatorium” is not the correct word, or, at least, it is not sufficiently comprehensive. Sub-section 3 of proposed new section 45 AO reads -

This section shall not apply to a member of the Forces who is suffering from pulmonary tuberculosis and is undergoing treatment for that disease in any institution specified in subsection (1) of this section.

Reference to the Oxford Dictionary reveals that the word “ sanitarium “ rather than “ sanatorium “ should be employed. That authority gives the following definitions of sanatorium: -

  1. An establishment for the reception and medical treatment of invalids; in recent use chiefly either of convalescent patients, or of consumptives undergoing the open-air treatment.
  2. A place to which, on account of favorable climatic and other conditions, invalids resort for the improvement of their health; spec. a hill station in a hot country, especially in India, to which residents periodically resort to recuperate.

Dealing with “ sanitarium “ the Oxford Dictionary states -

Where the diseased of all ranks might, at moderate expense, obtain superior medical advice.

I wish to be perfectly sure that the correct word is used, and,” therefore, I move -

That after the word “ sanatorium ‘», subsection (1), proposed new section 45AO the word “ sanitarium “ be inserted.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Has the honorable senator overlooked the words “ or similar institution “.

Senator ARKINS:

– The omission of “ sanitarium “ may lead to confusion. This opinion is also held by officials of the Tubercular Soldiers’ Association of New South Wales, and therefore, it would be well to have both words in the section.

Senator BRENNAN:
Victoria Assistant Minister · UAP

– The inclusion of words “ or similar institution “ covers the point raised by Senator Arkins. It makes unnecessary the specific naming of various hospitals or homes, for it includes all institutions similar to those already mentioned. The proposed new section mentions specifically “ an asylum for the insane, a hospital, sanatorium, benevolent home “ and then adds “ or similar institution”. That is a drag-net provision, and the inclusion of the word “sanitarium” is unnecessary.

Amendment negatived.

Amendment (by Senator Collings) negatived -

That the words “ in any case exceed twelve shillings per fortnight”, sub-section (1), proposed new section 45AO be left out with a view to insert in lieu thereof the words “bo interfered with “.

Clause agreed to.

Title agreed to.

Bill reported without amendment.

Standing and Sessional Orders suspended ; report- adopted.

Third Reading

Motion (by Senator A. J. McLachlan) proposed -

That the bill be now read a third time.

Senator HARDY (New South Wales) [3.41 J. - In replying to the second reading, the Minister was about to deal with superannuation and furlough rights for members of the staff of the Repatriation Commission and was, I believe, about to indicate that privileges similar to those enjoyed by Public Servants would be granted to them. I hope that he will indicate that that is intended.

Senator ARKINS:
New South Wales

– I support the remarks of Senator Hardy in favour of granting superannuation and furlough rights to members of the staff of the Repatriation Department.

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

. - in reply - Before I concluded my second-reading speech I did intend to refer to what seems an anomaly, in that members of the staff of the Repatriation Commission have no rights in respect of superannuation and furlough. The matter is, however, more complicated than it appears on the surface, particularly because many of the men concerned joined the staff of the commission at fairly advanced ages. I can assure the Senate that the matter is now under consideration, and that some time ago an actuary was consulted regarding it. The Minister for Repatriation hopes to submit proposals to Cabinet early in the new yeal- in regard to both superannuation and furlough rights for these men.

Question resolved in the affirmative.

Bill read a third time.

page 2602

PUBLIC SERVICE BILL (No. 2) 1936

In committee (Consideration of House of Representatives’ amendments) :

Clause 11 -

Section eighty-four of the Principal Act is amended…

House of Representatives’ amendment No. 1. - Add the following new clause: - “12. Section ninety-seven of the Principal Act is amended by omitting from sub-section (2.) all the words from and including the words ‘ both Houses of the Parliament and inserting in their stead the words ‘ each House of the Parliament within fifteen sitting days of that House after the approval of the regulations by the Governor-General’,”.

Senator Sir GEORGE PEARCE:
Minister for External Affairs · Western Australia · UAP

[3.48]. - I move-

That the amendment be agreed to.

The object of the amendments made by the House of Representatives is to alter the present requirements of sections 97 and 108 of the Commonwealth Public Service Act as to the laying of Public and Provisional Service Regulations on the table of both Houses of Parliamentwithin seven days of the approval of the regulations by the Governor-General. Instead of seven days, it is proposed that the time shall be fifteen sitting days, which is the period provided for in proposed section 49 of the Acts Interpretation Bill recently before the Senate in relation to regulations to which the section is to apply. These amendments will bring the clause into line with the Acts Interpretation Bill.

Senator Duncan-Hughes:

– It has not been passed by the House of Representatives.

Senator Sir GEORGE PEARCE.Not yet.

Motion agreed to.

Mouse of Representatives’ amendment. No. 2. - After proposed new clause 12 add the following new clause : - “13. Section one hundred and eight of the Principal Act is amended by omitting from sub-section (2.) all the words from and including the words ‘both Houses of the Parliament’ and inserting in their stead the words ‘ each House of the Parliament within fifteen sitting days of that House after the approval of the regulations by the Governor-General ‘,”.

Motion (by Senator Sir George Pearce) agreed to -

That the amendment be agreed to.

Resolutions reported; report adopted.

Sitting suspended from3.50 to4 p.m.

page 2602

CALL OF THE SENATE

Senate called by the Clerk.

The PRESIDENT (Senator the Hon. P. J. Lynch). - I have to announce that all senators are present with the exception of Senators Collett and Gibson, who are absent on leave.

Senator Sir GEORGE PEARCE:
Minister for External Affairs · Western Australia · UAP

[4.5]. - I move -

That in view of the fact that Senators Collett and Gibson are absent on leave, the said senators be excused for failure to answer the Call of the Senate.

I am sure we all deeply regret the cause of their absence, which is ill health. I am glad to be able to say that, from what I hear, both are progressing.

Motion agreed to.

page 2602

CONSTITUTION ALTERATION (AVIATION) BILL 1936

Third Reading

Motion (by Senator Brennan) put -

That the bill be now read a third time.

The bells having been rung,

The PRESIDENT:

– There being no dissentient voice, and there being more than an absolute majority of honorable senators present as required by the Constitution, I declare the question resolved in the affirmative.

Bill read a third time.

page 2602

CONSTITUTION ALTERATION (MARKETING) BILL 1936

Third Reading

Motion (by Senator Brennan) proposed -

That the bill be now read a third time.

Senator E B JOHNSTON:
Western Australia

– I desire to bring under the notice of the Senate and the Government the following telegram which

I received to-day from tlie Primary Producers’ Association of Western Australia raising a point which is regarded as important in that State -

Please obtain definite statement from Minister in charge referenda bills your House if adoption clause 92A will give Federal Government power to proceed with marketing legislation with four States if other two States demur. Also wired Marwick.

As the constitution alteration covered by the bill has to go to the people by referendum, it is essential that the fullest information on points on which they are not clear should be given to them as quickly as possible, without waiting for the distribution of the pamphlets. It will, in any case, be difficult to induce the people of the smaller States, and particularly of Western Australia, to support an amendment which may be construed as giving infinitely greater powers to the Commonwealth. The Minister will assist Senator Marwick, who has discussed this matter already with the Attorney-General (Mr. Menzies), myself and others who are supporting the measure in the interests of orderly and organized marketing in the primary industries, if, when closing the debate, he will give a full and plain reply to the question contained in the telegram.

Senator SAMPSON:
Tasmania

.- The possible effects of this bill are so far-reaching, and the subject is so important, that I take this opportunity, on the motion for the third reading, to put on record some thoughts concerning it, as I had no opportunity of speaking on the second reading or in committee. Before I deal with the bill, which, if the referendum be carried will mean an alteration of the Australian Constitution - a matter of great gravity, calling for the very closest thought - I should like to express a few ideas with regard to the origin and functions of the Senate. In a «ase of this kind, when we are considering an issue of such gravity, which may have far-reaching effects, it is well for us, as senators, to pause and consider what the functions of the Australian Senate are. It is interesting to read the reports of the debates of the conferences and conventions that were held prior to federation, and to ascertain from them what purpose this chamber was intended to serve. Quick and Garran, in The Annotated Constitution of the Australian Commonwealth, have put on record the following remarks regarding the Senate -

The Senate is one of the most conspicuous, and unquestionably the most important, of all the federal features of the Constitution, using the word “ federal “ in the sense of linking together and uniting a number of co-equal political communities, under a common system of government. The Senate is not merely a branch of a bi-cameral parliament; it is not merely a second chamber of revision and review representing the sober second thought of the nation . . . it is that, but it is something more than that. It is the chamber in which the States, considered as separate entities, and corporate parts of the Commonwealth, are represented.

We should, always bear that in mind. On many occasions I have heard not only in this chamber, but also outside cheap sneers directed towards those honorable senators who believe in protecting the rights of the States. We have been called “ State-righters “ and “ little- Australians “.

Senator Arkins:

– It is overdone.

Senator SAMPSON:

– I intend to deal with that point before proceeding, because I am quite sure that many fail to grasp the fundamental reasons why this chamber was established. Honorable senators are members of this chamber not to represent any political party, but to act on behalf of the States whose electors sent them here. They have been elected to maintain and protect the constitutional rights of the States against attempted invasion, and to have every facility to advocate their peculiar and special interests as well as to ventilate their grievances. This is the chamber in which that can be done to the best advantage; that was the idea in the minds of the framers of the Constitution. The Senate is a council of the States, and it was once suggested that it should bear that name. Each original State is represented by six senators. Equality of representation is only just because prior to the inception of federation the powers of the colonies were equal politically. In the matter of the resources, population, and area, they were not equal, but they were equal politically. They were equal in constitutional power and in status although, as I have said, they were not equal in resources, population, or area. Territory, population, and, resources do not provide an actual test of political status. The test is the sovereign power to govern, and prior to federation the six States had self-governing powers. One of the conditions of the federal bargain was that, in consideration of the transfer of general powers to the Commonwealth, each colony should, on becoming a State, retain its relative equality and individuality unimpaired. Although the States came into the union, they were still to retain certain powers and this could be assured only by equality of representation in this chamber. The Senate was to be a council of the States, and had that not been provided the federation of the Australian colonies would never have been accomplished.

Under this bill section 92 of the Constitution is to be emasculated or qualified, provided of course that a majority of the electors in a majority of the States favour the proposed alteration of the Constitution. It may sound boastful to say that many of us knew that section 92 meant exactly what it provides - that trade, commerce, and intercourse between the States shall be free.

Senator Abbott:

– What about section 51?

Senator SAMPSON:

– I am now dealing with section 92. This is the only opportunity I shall have to put my possibly ill-considered and ill-digested views on record. In order to grasp the significance of section 92 two questions have to be considered. First, what is absolute f freedom of trade, commerce, and intercourse; and, secondly, during what period of time or within what limits of space do interstate trade and commerce operate so as to remain protected by the shield of federal freedom? In reference to the first question - I am quoting Quick and Garran - “ absolute freedom of trade, commerce, and intercourse “ may be defined as “ the right to introduce goods, wares and merchandise from one State into another, the right to sell the same, and the right to travel unburdened by State restrictions, regulations and obstructions “. ‘ Freedom of trade necessarily means the right to sell, introduce and travel in order to sell. The right to introduce without the right to dispose would reduce freedom of trade to an empty name.

Senator Sir George Pearce:

– The reference to regulations is to State regulations.

Senator SAMPSON:

– Yes. This measure is to qualify section 92 of the Constitution by limiting the words “ absolutely free “. It really means a mutilation of one of the basic principles of federation. Limitations are to be imposed upon the freedom of interstate freetrade, one of the essential features of the federal union. I believe that it was the prospect of this freedom of opportunity that brought Tasmania into federation. Tasmania, which desired unrestricted access to interstate markets, is now asked to forfeit, n. portion of its sovereignty, which the Commonwealth, having failed to take for itself, now seeks to have conferred upon it. Trade between the States, as Tasmanians know too well, has been a good deal less than “ absolutely free “. We recall what we had to contend with when the Victorian Government denied the entry into Victoria of Tasmanian potatoes for reasons which the High Court held to be a violation of the Constitution. After years of patient pleading, we had to fight to establish our claim to freedom of interstate trade for our produce. We merely wanted the same freedom as other States have always had in Tasmania for their manufactured goods, even to the extent of dumping. I do not wish to go into the history of our boot factories, flour mills and other commercial concerns that were operating successfully prior to federation. They were absolutely wiped out when we came into the union.

Senator Sir George Pearce:

– What about the Cascade Brewery?

Senator SAMPSON:

– It has managed to keep its end up; we have been loyal to it through thick and thin. Tasmania is very hesitant to accept any modification of a right which under the federal’ contract is assured to it. Constitutional lawyers differ as to the meaning of simple language in which absolute freedom of interstate trade is expressed. How much more are they likely to differ as to the scope of tb» modification proposed in the

Menzies amendment? It sounds simple, but is it? The qualification is neither simple nor definite. What it permits in trade restrictions between the States will depend upon the interpretation of the powers of this Parliament. Under section 92, interstate freetrade is assured, but with the addition of the Menzies modification, this assurance will disappear.

I am opposed to the bill, but I know I shall be told that I am one of those wretched persons who has no sympathy for the poor, down-trodden primary producers. Similar accusations have been made against me quite recently, but they do not affect me in the slightest. The Commonwealth Parliament has done a tremendous lot for the man on the land without any alteration of the Constitution. I have also been told that primary producers generally are clamouring for an alteration of the Constitution. We have been informed that they are only waiting to vote, and that the proposals to be submitted to the people will be carried by an overwhelming majority. I have not seen any indication to justify that optimism. At a meeting held at Windsor, New South Wales, on the 14th November last, representatives of the New South Wales citrus-growers had a general discussion regarding the steps to be taken by the Citrus-growers Defence Association in . connexion with the pro-, posed alteration of the Constitution, It was decided that the branches be asked to work in their districts to cultivate a public feeling against the proposal. According to a paragraph in the Sydney Sun of the 17th November last, the Junee branch of the Graziers’ Association resolved by a small majority to oppose the inclusion of proposed new section 92a in the Commonwealth Constitution, because it considers that the proposed alteration will deal a death-blow to our federal system. I have also received letters from various associations in my own State and in others, which do not indicate that the people generally are falling over themselves to support this proposed alteration of the Constitution. I think, therefore, that, though it is contended that there is a desire to help the primary producers, opinion regarding this proposed alteration is not so unanimously in its favour as ‘Some honorable senators would have us believe. History shows that it is extraordinarily difficult to get a proposed alteration of the Constitution approved by the people., and during recent months I have repeatedly asked what will be the plans of the Government if the referendum question be not answered in the affirmative. I have put the question to the Attorney-General (Mr. Menzies), the Prime Minister (Mr. Lyons), and to other members of this Parliament, but the only reply that I have been able to get is, in effect, “ We shall take our jumps when we come to them.” I take it that, after the referendum is taken, the jumps will still be there, and will still have to be taken; it will be interesting then to see how the Government proposes to overcome the obstacles. I believe that, without this emasculation of section 92, this Commonwealth Parliament has power to deal with the present position; I may be wrong, I am not a constitutional lawyer; but no one seems to be able to say what power to regulate interstate trade the proposed alteration of the Constitution would take from the States and hand over to the Commonwealth. Section 92 is clear and explicit; it sets out in plain and simple language what the framers of the Constitution meant; and the Privy Council says definitely that it means what it says. There can be no argument about that. If we insert the proposed new sub-section in the Constitution there will be nothing but arguments as to within what limits the powers conferred may be utilized. Those powers- are not laid down in precise terms, and I regret very much indeed that the Senate in its wisdom did not see fit to agree to the amendments moved by Senators Badman and Payne. What the High Court may interpret out of proposed new section 92a is known to no one; it is entirely in the lap of the gods. In conclusion,, I suggest that the history of constitutional referenda shows that the people in the main are always conservative, and will not give any government, no matter how it is constituted, a blank cheque. In my opinion, the proposed new section is a blank cheque, which I do not propose to give to this or any other government.

Senator PAYNE:
Tasmania

.- I do not propose to record a silent vote on the third reading of this bill for the alteration of the Constitution, because it is essential that I should state exactly where I stand in regard to it. I voted for the second reading of the bill, and, as honorable senators know, did my best in committee to make it more acceptable to the people of Australia. I failed to amend it as I desired; but I am still thoroughly convinced that I then took the. right stand. Since we last discussed this measure I have had opportunities to meet people whose opinions are worth having, and have heard a good deal of comment with regard to the amendment which I sought to embody in the bill. I am now more confident than I was before that, in the State which I assist to represent, there is no possibility of this proposal being carried. I moved my amendment in a desire to help the Government; I want to see .continued the assistance which was so valuable to primary industries in the past; but at the same time I want it restricted to industries which would not otherwise be able to carry on because of the losses they incur in disposing of their surplus production on overseas markets. My amendment would have given restricted power to this Government, or any future Commonwealth government; that was my sole objective in moving it. In view of the fact that the Senate rejected my proposal, I am now asked whether or not I shall vote for the third reading of the bill. I say definitely my vote will be cast against it.

Senator ARKINS:
New South Wales

– I desire to reply briefly to some remarks made by Senator Sampson, who said that apparently we fail to recognize that the Senate is a States house. The honorable senator went on to quote, some constitutional authorities in an endeavour to direct our attention to that fact. As I interjected when the honorable senator was speaking, though he chose to disregard it, although the Senate is a States’ house, it is a case of each for each and all for all. The members of this chamber have a duty not only to the States they represent, but also to the federation of the States. If ever the federation is to be a national union for the benefit of the whole nation, which the fathers of federation thought it would be, that factmust be recognized. Senator Sampson said that the larger States - I have no doubt he had in mind Victoria and New South Wales - were always overbearing and somewhat intolerant towards the smaller States, and he went on to assert that since federation there has been a serious decline of secondary industries in Tasmania. There has been no such decline; Tasmania to-day has almost a monopoly of the jam and zinc industries of the Commonwealth; and it produces and exports beer to practically all of the other States of the federation. It has a virtual monopoly of carbide, a product of which we all know the history, and it is probably the largest manufacturer of confectionery in the Commonwealth. I fail to see how honorable senators from Tasmania can say, in the face of these facts, that there has been a decline of secondary industries in that State. Considering its very small population and its isolation it has done remarkably well. It is of no use for Tasmanians to be looking jealously at Victoria and New South Wales, and saying that those States have been inconsiderate of the needs of Tasmania. I would never be a party to the passing of legislation which would be detrimental to the smaller States of the federation. In the field of primary production Tasmania leads the Commonwealth in the production of potatoes and apples.

Senator Guthrie:

– Not potatoes. The honorable senator is also in error in regard to jam.

Senator ARKINS:

– Tasmania, at any rate, if not the largest producer of those commodities, is the second largest. I know the difficulties that surround the marketing of primary products, and I can anticipate how those difficulties will be increased if the proposed alteration of the Constitution be not agreed to.

Senator Hardy:

– The primary industries will be thrown in a state of chaos.

Senator ARKINS:

– In the past we have legislated for the marketing of primary products on the assumption, based on the decision of the highest tribunal in the land, that we had the power to do so.

Senator Hardy:

– And Tasmania did not object.

Senator ARKINS:

– That leads me to say that if the proposed alteration of the Constitution be not made, a day will come when the primary producers of Tasmania will realize what a mistake they made in voting against the proposal. If any primary industries need the benefits of orderly marketing schemes they are the apple and pear industries of Tasmania. I believe that this building up of the old school of State -righters, good as it may have been in the early days of federation when some men could not see beyond the sovereign rights of their States, is contrary to the practical needs of the present day. With the growth of intense nationalism in the various countries throughout the world, and the restrictions placed upon our trading, not only with foreign countries, but also within the Empire itself, the day has arrived when people must agree to an amendment of the Constitution to enable the National Parliament to exercise control of markets. We afford protection to secondary industries, and to the workers through the arbitration courts. In the light of modern developments, it is only right that we should also give to the primary producers of this country some control over the marketing of their products, in order to help them to overcome the difficulties associated with the marketing of products in overseas countries as well as at home. I regret that Senator Sampson has seen fit to condemn the larger States. On many occasions I have heard similar charges of intolerance, but I, personally, have not seen any evidence of it. On the contrary, I believe that the larger States have been considerate towards the smaller members of the federation, because they realize that it is the duty of the strong to help the weak. The alteration of the Constitution, as proposed by the Government, would enable greater assistance to be given to the weaker States, and do much to increase Australia’s strength in the southern seas, which is vitally necessary to a country so isolated. I hope that the Government’s proposals will be accepted by the Parliament, and that, subsequently, the electors will endorse them. After all, these proposals merely mean that powers which the Commonwealth erroneously thought that it possessed shall, in fact, be given to it. I support the bill.

Senator GRANT:
Tasmania

.- The remarks which have been made this afternoon by representatives of the larger States strengthen my conviction that the States must make every effort to retain their constitutional rights.

Senator Collings:

– Is this a case of stone-walling?

Senator GRANT:

– Obviously, the larger States are not interested in their weaker partners.

Senator Guthrie:

– That is not correct.

Senator Hardy:

– What was the grant to Tasmania last year?

Senator GRANT:

– The necessity for that grant is evidence of Tasmania’s disabilities under federation; it shows that, due principally to federal legislation, that State cannot live without assistance.

Senator Hardy:

– The grant was not based on disabilities.

Senator GRANT:

– I should be out of order were I to discuss that subject now. I am more than ever convinced that the blank cheque which we are asked to sign and give to the Commonwealth means the destruction of freedom of trade between the States. Should the Government of one of the larger States wish to prevent goods coming into its territory from another State, a Commonwealth Government, even against the wishes of the smaller State, could prevent their coming in.

Senator Sir Walter Massy-Greene:

– Does the honorable senator suggest that could be done under this amendment ?

Senator GRANT:

– Yes.

Senator Sir Walter Massy-Greene:

– Then the honorable senator does not understand it.

Senator GRANT:

– My opinion on a legal question may not be worth a great deal, but, in this instance, I have been fortified in my view by the opinions of some of the greatest constitutional authorities in Australia.

Senator Hardy:

– Does the honorable senator suggest that the proposals of the Government subvert section 99 of the Constitution ?

Senator GRANT:

– I say that, if the proposals of the Government be carried and the Constitution altered accordingly, freedom of trade between the States will disappear. The proposals mean the sacrificing of one of the constitutional rights of the States, and I, as a representative of Tasmania in the States’ House “, shall vote against any alteration of the Constitution which would have that effect. I shall, therefore, vote against the third reading.

Senator COLLINGS:
Queensland

.- Evidently this is an “ all-in go “. During the last few days I, as Leader of the small Opposition in this chamber, have been endeavouring to prepare myself to deal with the important legislation which has yet to be decided before the Parliament adjourns over Christmas. I understand that the Government desires that Parliament shall adjourn this week; and at an earlier hour to-day that seemed probable, but I should say now that it is impossible.- I, for one, propose to take the full time allowed under the Standing Ordei’3 to discuss the matters which come before us, and I hope that my colleagues will do the same. Honorable senators who do not agree with my attitude will not put me off the track. Senator Grant appears to think that I objected to his speaking to the third reading. I did nothing of the kind. But I do desire to know the reason for repeating at this stage the arguments which were advanced on the second reading. Honorable senators then had ample opportunity to say all that they wanted to say regarding every phase of the proposed alteration of the Constitution, and the referendum in regard to it. Various amendments were proposed, but all of them were decisively defeated.

Senator Herbert Hays:

– I rise to a point of order. Is the honorable senator in order in repeating the arguments advanced at the second-reading stage? I submit that he is not entitled to do so on the third reading.

The PRESIDENT (Senator the Hon. P. J. Lynch). - The honorable senator will be in order in making passing reference to what took place at the secondreading stage, but not in repeating at length what was said then.

Senator COLLINGS:

– I have not yet said one word about the speech of any honorable senator on the second reading. I have merely said that speeches were made. The speeches of honorable senators who opposed the bill at that stage did not contain sufficient material to enable any honorable senator to ‘ occupy an hour in replying to them. As I have said, a full opportunity to say all that was necessary was presented on the second reading, and I believe that every honorable senator then said all that he wanted to say on the subject. Therefore, 1 am at a loss to understand why, in view of the congestion of business, there should be a re-hash of speeches already delivered. ‘ But that having taken place, I believe that I shall be entirely in order if I review the whole of the arguments for and against the proposals of the Government. I propose to do so. Australia is operating under a Constitution. Let us see what the Constitution provides. A little book which I have here contains a good deal of information upon this subject. Senators from Tasmania have said that we must get back to the attitude adopted by the State-righters. Senator Sampson gave to the Senate the history of the federation. I probably know the story better than he does,’ for I am very nearly old enough to be his father. I was old enough at the time to take an intelligent interest in the proposals for a federation, and I know of the desire of those patriots who wished the people of the colonies to discard their parochial views and adopt an Australian outlook and a federal spirit. Section 92 of the Constitution, about which there has been considerable heat and eloquence lately, provides -

On the imposition of uniform duties of customs, trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free.

No one in_ the committee suggests that trade between the States should not still be absolutely free, unless it be that those who oppose this measure believe that the sale and marketing of primary produce on such terms and conditions as will give to the producers thereof a better return than previously is- a restriction of trade.

Senator Grant:

– The proposals of the Government do take away that freedom.

Senator COLLINGS:

– I have here the judgment of the Privy Council, andbefore I sit down I hope to show what the brilliant legal gentlemen who dealt with the James case thought of the proposals submitted to them; but before I do so, I wish to refer to section 51 of the Constitution which provides -

The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to -

trade and commerce with other countries, and among the States;

Why should we have regard to the provisions of section 92 and overlook section 51 ?

Senator Hardy:

– Will the honorable senator read section 99?

Senator COLLINGS:

– I shall leave that to Senator Hardy. In this chamber a few honorable senators are opposed to the proposed alteration of the Constitution in respect of marketing; others, including myself, agree with the proposal. The statement made by me on behalf of the Opposition in favour of the alteration of the Constitution was accepted as being so satisfactory that nervous senators from other States who were fearful of the consequences which their attitude in regard to this matter might bring on them, stated that I should endeavour to convince their constituents in the manner in which I convinced this chamber. That invitation was very flattering to me; but I do not propose to campaign in States other than Queensland in respect of the referendum. How has the difficulty which concerns us to-day arisen ? Why are honorable senators reiterating secondreading speeches on the motion for the third reading of the bill? The reason is to be found in the fact that some honorable senators who are averse to witnessing a victory recorded against them, in a proper manner on the floor of the chamber, resort to “ win, tie, or wrangle “ methods. Their attitude in initiating this debate reminds me of the boy on the cricketfield. The team was playing with his bat; but when he thought that he had fielded for a sufficient length of time he took his bat and went home. Because they are unable to get their own way, those honorable senators are endeavouring to ensure that others who are in favour of the bill shall not get their way until considerable debate has taken place. What is the “ villainy “ which has been alleged to have been taking place under section 92 of the Constitution? Senators Sampson, Payne and Grant grew most excited about this socalled “ villainy “ this afternoon. What harm has been done to the primary producer generally, and in what manner has damage been inflicted on Tasmanian producers? In what respect has the Dried Fruits Act operated to the disadvantage of Tasmania?

Senator Hardy:

– No dried fruits are processed in Tasmania.

Senator COLLINGS:

– I invite honorable senators to consider the object actuating Senator Grant, Senator Sampson and Senator Payne in speaking on the motion for the third reading of the. bill this afternoon. The Dried Fruits Act simply made provision for the organization of orderly marketing in such a way that people who produce the fruits might obtain a satisfactory home-consumption price in order to compensate them for the sale of the export quota of their crop at world’s parity. I refer now to the producers themselves - not to the people who speculate in the industry, those with brass plates on their offices in the main streets of the big cities. They juggle the prices of primary products for their own advantage. They never in their lives grew a pound of fruit or for that matter any other primary product, but they make a better living out of the industry than the unfortunate primary producers themselves. Senator Grant drew a harrowing picture of the frightful condition into which Tasmania is getting. When one of my colleagues interjected that physically the honorable senator himself did not look “ too bad “ the honorable senator appeared to take the remark as a personal affront. The people of Tasmania are not slave-driven or persecuted in the manner that Senator Grant would have us believe. The fact that the honorable senator himself looks so happy indicates that he did not mean that statement. Being of such a genial nature he would not look so joyful if the people of Tasmania were in such a down-trodden condition as he represented them to be. All that the Dried Fruits Act and similar legislation has done has been to protect the primary producer. In rebuttal of my speech, I shall be informed by honorable senators that the Dried Fruits Board laid it down that only certain shipping lines should be used for transporting dried fruits overseas; that the commodity itself should be shipped only at certain times of the year and then under licence. The desire behind such regulations was not to injure anybody directly engaged in primary production; but to ensure that the shipping companies did not levy undue freight charges. Surely that is not a nefarious provision, something to be regretted! In order to ensure proper control and organized marketing in connexion with the industry, people must not be allowed to do exactly as they choose, even with their own product. At all times a small section will be found who place the sale of their own products before the value of the industry itself. Their sole desire is to get in at the psychological moment when conditions are a little better for themselves than for their immediate neighbours. For such reasons they are opposed to orderly marketing. Mr. James is the mouthpiece of this section. He convinced the Privy Council, which knows nothing whatever of Australian conditions or the circumstances of Australian primary producers, that the dried fruits legislation was ultra vires. He was actuated by the fact that the regulations of the Dried Fruits Board had hit him severely. Is Mr. James a primary producer? Honorable senators who have spoken in opposition to the third reading of the bill expect us to dissolve into tears because Mr. James obtained a chance verdict from this tribunal on the other side of the world.

Senator Hardy:

– He is the dried fruits buccaneer !

Senator COLLINGS:

– Of course he is. I did not like to apply that expression to him; but I am grateful to the honorable senator for having done so. The Dried Fruits Act, assented to twelve years ago, provided, inter alia -

For the purposes of this act, there shall he a dried fruits control board.

I quote the Dried Fruits Control Board only as an instance of the so-called “ villainy “ which we are asked, by opponents of this bill, to end. This is the “ villainy “ to which Parliament agreed, and which, it is alleged, is so nefarious and disastrous to the people of Tasmania -

The board shall consist of -

one member (in this act referred to as the Government representative) ;

three representatives elected by growers in the States of New South Wales, Victoria, and South Australia, and one representative elected by the growers of the State of Western Australia; and

two members with commercial experience appointed by the GovernorGeneral. . . .

Elected members of the board shall hold office for a period of two years, and shall be eligible for re-election: . . .

The act proceeds to set out what shall happen if a member of the board becomes ill or is unable to attend meetings.

Senator Duncan-Hughes:

– I rise to order. Are all the details of this act, which the Leader of the Opposition (Senator Collings) is quoting, relevant to the motion for the third reading of the bill?

The PRESIDENT:

– I have been waiting for the Leader of the Opposition to connect his references to. the work of this board with the bill, and I ask him to do so. But I cannot rule that his remarks are altogether irrelevant.

Senator COLLINGS:

– I regret that any of my remarks should hurt certain honorable senators. In my opinion, these points of order have been raised for the purpose of reducing the time allowed to me for discussing the bill. In his speech this afternoon Senator Sampson opened up the whole subject.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– Senator Sampson has a reasonable excuse.

Senator COLLINGS:

– I realize that Senator Sampson did not have an opportunity to debate the second reading of the bill, because he was presiding over this chamber in the absence of the President; but Senator Payne and Senator Grant certainly had previous opportunities, and utilized them fully. Honorable senators should not lose sight of the fact that the whole matter is now under review, and before long they will return to their home States with the obligation to explain to their constituents their attitude in regard to the marketing referendum. Inview of the fact that every member of the community will, at the expense of the Government, receive printed propaganda setting forth the reasons for and against the referendum, an opportunity has been taken this afternoon by certain honorable senators to state one side of the case. Three of them, who are opposed to the bill, deliberately made provocative speeches, because they thought that the supporters of the bill would let them go without protest. In view of those speeches, we cannot reach an intelligent decision as to how we should vote on the third reading of the bill unless we are familiar with the relevant sections of the Constitution, the Privy Council judgment and the powers of the Dried Fruits Board and similar bodies. In order that no honorable senator shall be sent away from this chamber to participate in the referendum campaign in ignorance of the issue, I am doing my best to submit for their consideration what should be regarded as the vital facts. The Dried Fruits Act proceeds -

The board may constitute an agency of the board in London. …

One objection taken to the Dried Fruits Board was that exporters were obliged to ship their commodities when and how the board prescribed. The only producers of fruit who took exception to that regulation were those who were not concerned with the welfare of the whole of the industry, but who sought an opportunity to play their own hand. Among them there was no suggestion of team work. They were only making an attempt to break down the protective regulations under the act little by little in order to derive a temporary advantage; if their actions had been permitted to continue, they would have caused the complete breaking down of the protective agency. I come now to the proposal which provoked such eloquence from Senator Grant -

The London agency shall keep the board in Australia advised as to current prices of dried fruits and as to other matters relative to the disposal of Australian dried fruits in England or elsewhere, and generally act as the agent of the board in accordance with the directions of the board.

There are many machinery sections which it is not necessary for me to read; but I come to the following: -

For the purpose of enabling the board effectively to control the export and the sale and distribution after export of Australian dried fruits, the Governor-General may by proclamation prohibit the export from the Commonwealth of any dried fruits except in accordance with a licence issued by the Minister subject to such conditions and restrictions as are prescribed after recommendation to the Minister by the board.

In such a manner was the board to be the supreme authority, with the concurrence of the Minister after it had submitted its recommendations to him. The act continues -

Any person who -

exports dried fruits from the Commonwealth in contravention of any proclamation under this act; or

being the holder of a licence under the last preceding section, contravenes or fails to comply with any term or condition upon which the licence was granted, shall be guilty of an offence.

Why not? Similar protective clauses are inserted in our industrial legislation. Even in connexion with the Labour party men are not sent to this chamber to voice their own opinions; they are pledged beforehand to give effect to the policy of the Australian Labour party. Every industrial award obliges the men engaged in the calling to which it applies to abide by it. Whoever disobeys it commits an offence and is liable, under the act, to penalties. That applies to the employers also. Previous speakers this afternoon have spoken of absolute freedom, but no such thing is or should be possible in a community organized as we are to-day. The individual should be allowed freedom only insofar as it does not conflict with the freedom of every other individual in the community. So soon as we begin to demand absolute freedom, we come into conflict with some law on the statute-book. Whilst I do not agree with many existing laws, I recognize that every one of them was put there at some time or other by a parliament which believed that it was adding to, rather than taking from, the worth-while freedom of the community. In practice, our freedom is restricted in all directions, because to give absolute liberty to any individual would be to decrease the liberty available to every other citizen. These are the restrictions over which Senator Payne and other Tasmanian representatives wept this afternoon.

Every part of the act under which the Australian Dried Fruits Board is operating has been declared by the decision of the Privy Council to be an infringement of section 92 of the Constitution, which provides for absolute freedom of trade between the States. All that legislation has gone overboard. As regards the case which the speakers who preceded me this afternoon attempted to make, if the Senate passed the bill, as I am sure it will, and the referendum were not carried, what would happen ? It would not be correct to say “Nothing will happen; we shall go on as we went on before “. We shall never go on as we did before, unless the Constitution be altered. Since 1924 every individual in this community, whether opposed to or in favour of orderly marketing, has honestly believed that the Commonwealth and State Parliaments, acting together, had the powers to legislate as they did in regard to marketing. That will be admitted, I think, even by honorable senators who are opposed to the bill and the referendum. We all believed that we had those powers.

Senator Dein:

– And nobody was injured.

Senator COLLINGS:

– Not only was nobody injured, but industry as a whole, and all primary products brought within the ambit of orderly marketing, benefited immensely. If I had the figures with me, I could tell the Senate of the tremendous good that orderly marketing has done to all forms of primary production in Queensland. Believing that they had those powers, the Commonwealth Government, with such States as passed the necessary complementary legislation, exercised them. Finally the whole business was referred to the Privy Council. The last thing I desire to do is to say anything derogatory of the great minds who constitute the Privy Council, but I assert definitely, not only from lifelong personal conviction as an Australian, but also because I am pledged to a programme and voice a policy which deny appeal to any authority outside of Australia regarding the interpretation of the Constitution, that the sooner the Aus tralian people begin to think in terms of Australia, the earlier they become real Australians, and declare that no authority outside the Commonwealth has the right to dictate the terms of their Constitution, the better.

Senator Brennan:

– I rise to order. By no stretch of the imagination can it be held that the bill contains any provision relating to the right of appeal to the Privy Council, or the need for restricting it.

The PRESIDENT:

– I ask Senator Collings not to discuss that aspect of the subject.

Senator COLLINGS:

– There appears to be something in the point of order raised by the Assistant Minister, until it is analysed. I claim the right to analyse every step which has been taken in this matter, including the appeal to the Privy Council. If the case had not been taken there, and if the Privy Council had not given the judgment it did, there would have been no occasion for this debate. I believe that I am entirely in order in saying that I belong to a party which is definitely pledged to the principle that Australia must decide for itself everything connected with its public life.

The PRESIDENT:

– The bill does not refer to the expediency or otherwise of appeals to the Privy Council.

Senator COLLINGS:

– I do not propose to pursue that line of argument further, as I have said what I wished to say. But I do claim the right to review and criticize the judgment of the Privy Council, because it led up to the present impasse. It rendered necessary the taking of a referendum in order to give to the Parliament powers which it believed that it possessed.

Senator Brennan:

– If the honorable senator pursues that line of argument, I shall object again.

Senator COLLINGS:

– I presume the Assistant Minister does not wish me to read out the whole of the judgment of the Privy Council? I should be tempted to do so, in order to show how little Australian sentiment there was in the outlook of that august body. The gentlemen who constitute the Privy Council are not to be blamed in any way for their judgment. Situated as they were 12,000 miles away, with an imperfect knowledge of the meaning of Australian events, and with the case for the Commonwealth put to them by a gentleman who had previously declared his own personal conviction to be the very opposite, they could not have been expected to give any other decision. I am not traversing their action now, but, because the decision of the Privy Council was the immediate cause of these proceedings. I claim the right to criticize it.

The PRESIDENT:

– Even if the proposed amendment be made in the Constitution, the right of appeal to the Privy Council will still remain. Therefore any reference made by the honorable senator in this debate to that subject will be futile.

Senator COLLINGS:

– I bow to your ruling, because I am not anxious to read the involved legal terms used by the gentlemen who by a majority arrived at that decision. Queensland is the home of legislation for orderly marketing, designed to protect the interests of the primary producer. In fact, it set the fashion in legislation of that character. Its acts are being copied by a number of other countries which never previously had legislation, of the kind. They heard what we were doing in Queensland, and sent their representatives to Australia to learn not only what was being done in my own State, but also what legislation the Commonwealth Parliament was passing. Even those honorable senators who are opposed to the bill will surely not claim that Queensland had no right to legislate in the interests of primary production. If they admit the right to legislate for the benefit and protection of those engaged in primary production, surely they will be open to conviction when they fmd legislation of the type which they now oppose being operated for the benefit of primary producers. As a matter of fact, some years ago the International Labour Office at Geneva sent a representative to tins country. Part of his task was to visit Queensland, in order to ascertain what was being done there with regard to the regulation of primary production. That gentleman addressed us here on his second visit to the Commonwealth only a few months ago. Honorable senators will all remember Mr.

Caldwell, the representative of the International Labour Office. On his previous visit, ten years earlier, he said to me in Queensland: “ We are not so much interested in* your industrial and social legislation, because in some country or other, all that you are doing in Australia in that regard is being carried out. The only difference between Australia and other countries is that you are doing more of it here than is being done in any other part of the world ; but what I am particularly interested in is the legislation you are operating in regard to primary production. ‘ Do you know that there is no other country in the world that has yet attempted” what you are doing? You are the first people to prescribe a wage for agricultural workers, and we are very interested , in what you are doing in that regard “.. We in Queensland have made considerable strides since those days. It was the first State to devise a complete scheme of orderly marketing for primary producers. In order to make it effective we detailed all the necessary successive, steps .of organization through local associations .of primary producers, referred to as local producers’ associations, up to State councils and a federal council. Every one of- these stages was designed for the organization of the primary producers themselves. That was accepted by the primary producers of Queensland, who formed local organizations on the lines suggested. Moreover, the Queensland Government financed the organizations for, I believe, five years, and then, at their request, for a further period of two years until they became firmly established.

The PRESIDENT:

– Have the schemes mentioned by the honorable senator been declared to have no legal standing?

Senator COLLINGS:

– Not all of them; some of them will be affected by the decision of the Privy Council in the James case. The Dairy Produce Export Control Board controls the orderly marketing of butter, which has meant an advantage of £1,250,000 to Queensland. Some honorable senators wish us to believe that the adoption of the proposed alteration will result in serious injury to the primary producers in certain States, but I challenge the accuracy of that statement. I agree with Senator Arkins, who said that although we are here to preserve the rights of the States, we should always have a broad Australian outlook. We should extend consideration to the claims of certain States, knowing that their representatives will, in turn, assist the States which we represent. I should not have spoken at this juncture had not oilier honorable senators exercised their right to speak. Notwithstanding the volume of business still to be transacted, if honorable senators opposite make statements which can be successfully challenged, they cannot expect this small, but united, Opposition to remain silent.

Senator DUNCAN-HUGHES:
South Australia

– I should not have spoken on the motion for the third reading had it not been for the remarks of the Leader of the Opposition (Senator Collings), who commenced his speech by saying that those opposed to this proposal being submitted to the people by means of a referendum had initiated the debate in an endeavour to get in a certain amount of propaganda, thereby holding up the business of the country, which he was most anxious to expedite. What are the facts? The debate on the third reading of the bill was initiated by Senator Johnston, who spoke in favour of the proposal. The Leader of the Opposition either overlooked or refrained from mentioning that fact. The second speaker was Senator Sampson, who, Sir, owing to your regrettable illness, was in the chair when the motion for the second reading was before the Senate. In the circumstances, would the Leader of the Opposition deny Senator Sampson the right to speak on the third reading ?

Senator Collings:

– Certainly not.

Senator DUNCAN-HUGHES:

– The third speaker was Senator Payne, who announced, to my great satisfaction, that lie intends to oppose the third reading of the bill.

Senator Collings:

– Although he supported the second reading.

Senator DUNCAN-HUGHES:

– So far as I know Senator Payne had not intimated that he intended to oppose the third reading before he spoke this afternoon. Surely the honorable senator has the right to support the second reading, and, then, in view of later information, oppose the third reading? Moreover, Senator Payne did not occupy the time of the Senate at length. Senator Grant was the next speaker and he also was very brief. All the speeches, with the exception of that of Senator Sampson, occupied less time than that taken by the Leader of the Opposition. I recall the long debate on minor amendments of the Australian Soldiers’ Repatriation Act. Will any one suggest that those amendments are comparable in importance with the bill now before the Senate? I object to the Leader of the Opposition criticizing the decision of the Privy Council, the members of which he accused of being ignorant of local conditions. Several days ago the Assistant Minister (Senator Brennan) replied very effectively to that contention, and there is, therefore, no need for me to do more than advise honorable senators who did not hear the Assistant Minister’s speech to read it. The Privy Council, which is a purely legal body, after .hearing lengthy argument, gave a decision entirely within its powers. I object to Mr. James, whom I met some years ago but have not met since and probably would not know to-day, being described by Senator Hardy as a “ dried fruits buccaneer “. After tremendous struggles and facing, I presume, financial difficulties, his opinions have been upheld by the highest court of appeal within the Empire. Why should a man who has struggled successfully for his legal rights be termed a buccaneer? If that is a fair way in which to describe him, I do not understand the English language.

A good deal has been said to-day to the effect that those who support the proposal to be referred to the people by means of a referendum are the friends of the farmers, and that those who oppose it are their enemies. That contention will not bear examination. For years I have spoken and voted in this chamber in the interests of primary producers, in an endeavour to prevent them from being sacrificed to other interests ; but when I have done so I have been opposed by some of those who now pose as their friends. Some honorable senators who believe in affording the highest possible protection to manufacturers have stoutly declined to support even slight reductions of the duties imposed on agricultural machinery. I regret that this proposal does not include the amendment moved by Senator Badman, because, had it been adopted, it would have shown that an attempt was made to limit the proposed alteration to the marketing of primary products “being foodstuffs”. That amendment was rejected, as the Government desires power in respect of all kinds of primary and secondary products.

Senator Arkins:

– All primary products cannot be used for human consumption.

Senator DUNCAN-HUGHES:

– I am well aware of that. I have heard some producers express wonder whether those who prevent them from selling their wool overseas think that it can all be used locally.

Senator Brown:

– “Who is preventing the wool-growers from selling their products overseas?

Senator DUNCAN-HUGHES:

– Many, including some members of the Labour party. We shall see within a few days who are the friends of the woolgrowers. I rose at this juncture to make it perfectly clear that there is not the slightest justification for the statement made by the Leader of the Opposition that the debate on the third reading of this bill’ was initiated and delayed by those who are opposed to the Government’s proposal.

Senator BROWN:
Queensland

– I express regret that the Government should have been so churlish in connexion with a question which I asked this morning. The people should know the procedure to be adopted should the proposal to be submitted to the people by means of a referendum be agreed to. I asked the Minister representing the Attorney-General (Senator Brennan) the following questions: -

  1. In the event of the marketing referendum being carried, w ll r the altered constitution become automatically applicable?
  2. Or will it be necessary for Parliament to meet in order to pass special legislation to put the altered constitution into effect, as far as interstate trade in dried fruits, &c, is concerned ?

The reply I received was to the effect that it is not customary to give information on matters of law in answer to questions. If the Attorney-General’ (Mr. Menzies) declines to answer the question, perhaps the Leader of the Senate (Senator Pearce) or the PostmasterGeneral (Senator A. J. McLachlan) will do so. I do not know whether there is any prescription of the freedom of the Attorney-General to answer questions of that sort. Very many people in the community desire to be informed of the actual position. If the proposal be carried at the referendum, it will be interesting to know whether or not the measures that have been rendered invalid by the Privy Council decision will be validated automatically. If that is not. to happen, Parliament must meet to deal with the matter and pass the necessary legislation to permit the continuance of the marketing schemes. Honorable senators will then have an opportunity to discuss how far that legislation will go in its effect upon marketing generally; and the arguments advanced by Senators Grant, Payne, and others who are opposed to the referendum, will be undermined. In those circumstances, it . is desirable that we should have a frank statement from the Government; the members of the Ministry should not be continually giving evasive answers to questions asked by members of the Opposition in all sincerity. Proper answers to those questions might have gone a long way to assist the Government in having the, referendum proposal carried.

Senator BRENNAN:
Assistant Minister · Victoria · UAP

– in reply - I shall not be long in my answer to the speeches made, some of which, notably those with a Tasmanian complexion, I deplore for one reason, whilst others, such as that made by the Leader of the Opposition (Senator Collings), I deplore for quite another reason.

With regard to the question raised by Senator Johnston, I may say that a similar inquiry was made yesterday by Senator Marwick, who asked my views on the subject; I advised him to apply direct. to the Attorney-General’s Department. He did so. Senator Johnston showed me his question,1 , which came from the same organization. The answer which Senator Marwick obtained is one -which satisfies both himself and Senator Johnston, namely,, that if the referendum proposal be agreed to, the States may go ahead with their marketing legislation, notwithstanding that there may be two dissentient States.

With, regard to the matter raised by Senator Sampson - and I excuse him for the reason that he had no earlier opportunity to .get rid of all the music in him, because when the bill was at its secondreading state, he was relieving you, Mr. President, in your exalted position. With regard to the rights of the States, I speak for almost every honorable senator pre sent when I say that we recognize the Senate as a States House; in a peculiar manner it represents the claims of the States, and was so designed by the makers of the Constitution. But, as the Leader of the- Senate (Senator Pearce) said during the debate on the second reading, the proposal which is here made is really one to increase State rights, because it seeks to give back to the States some of the powers which they have lost. It has been pointed out that one of the effects of the Privy Council’s decision is that a kind of legislative no man’s land, an area of country which cannot be covered either by Commonwealth or State legislation, has been disclosed; and the very purpose of this proposal of the Government is that that area should be covered. But, generally, with regard to everything else Senator Sampson said as to State rights, we are entirely in agreement. The honorable senator also referred to what he described as the emasculation of section 92, and he thought that the effect of the proposed alteration would be to take take from the States some of the rights which at present they possess. Whatever else the proposed amendment does, it limits to some extent the words of section 92, and, so far from it being true that there may be far-reaching effects from this, proposal, I venture to say that the extent to which the Commonwealth Parliament can go under section 92 is being restricted very considerably. The fears of far-reaching effects are therefore entirely groundless. The honorable senator seemed to suggest that there was some impropriety in varying on- qualifying section 92 - that we have no right to touch that section because Tasmania, with other States, was induced to join the federal union because of that section in the Constitution. I remind him, however, that the States also entered the federal union with section 128 in the Constitution which provides means by which the Constitution may be altered. Every section of the Constitution is subject to the right of alteration by the people if they desire to do so. The desire was to strike a happy medium between a Constitution, which was not too rigid and one which was not too flexible ; experience has shown that the Constitution is at any rate not too flexible, because the people have been extremely cautious about what they will grant in the way of alteration.

There has been speculation as to the possible result of the proposed referendum. It was said by Senator Sampson that we, the representatives of the Government, have been asserting that the people are eager to seize the opportunity to make this amendment of the Constitution. I know of no member of the Government who has suggested that; the attitude of the Government is that thisis a question to be put to the people; the responsibility for deciding it must rest with them. Senator Sampson asked what is to be the result if the referendum is lost; my leader predicted by interjection that one of the most immediate results would be a great clamour for bounties and that in that clamour Tasmania would not be altogether in the ruck. Senator Payne also indulged in speculation as to the chances of getting the proposals passed by the people. Senator Grant also has suggested that we should keep the constitutional rights of the States inviolate. In this proposal, however, we are acting under the powers conferred upon us by section 128 and are not violating in any way the constitutional rights of any State.

With regard to the remarks of Senator Brown, I do not know whether his references to the Attorney-General were intended to embrace me as well; though I gather that they were.

Senator Brown:

– I said that the Attorney-General was apparently not allowed to answer questions.

Senator BRENNAN:

– The honorable senator will remember that questions dealing with legal matters are always referred to the Attorney-General for reply. He will also remember that when I rose to answer his question this morning I did not have in my possession the prepared answer; it came while I was still on my feet. I thereupon read it as it was prepared for me. I had no desire to be discourteous to the honorable senator; the suddenness with which the answer was put into my hands may have accounted for the intonation of my answer to which the honorable senator has objected. It is not out of sheer perversity that the Attorney-General declines to answer such questions.We are not the interpreters of the law, and very grave embarrassment may arise if the Attorney-General commits himself to an expression of opinion which afterwards may be over-ruled by the High Court. The Attorney-General must be extremely careful in dealing with questions of that sort. That, I hope, will be a sufficient explanation to the honorable senator. I had no intention to hurt him in any way, and I can assure him that there was no intention on the part of the AttorneyGeneral to evade what are his proper duties and responsibilities in this matter.

Question - That the bill be now read a third time - put. The Senate divided. (President - Senator the Hon. P. J. Lynch.)

AYES: 28

NOES: 5

Majority . . . . 23

AYES

NOES

Bill read a third time.

page 2617

CUSTOMS TARIFF (INDUSTRIES PRESERVATION) BILL 1936

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator A. J. McLachlan) read a first time.

page 2617

STATES GRANTS (UNEMPLOYMENT RELIEF) BILL 1936

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator Sir George Pearce) read a first time.

Sitting suspended from 6.8 to 8 p.m.

page 2617

CUSTOMS TARIFF (No. 2) 1936

Second Reading

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

. - I move -

That the bill be now read a second time.

The tariff schedule now before honorable senators embodies the alterations of the duties introduced for the purpose of carrying into effect the proposals of the Government to divert a portion of the Commonwealth’s import trade in selected commodities to sources of supply which the Government firmly believes will bring greater benefits to the Commonwealth. Before referring in detail to the various items, I propose to enumerate the considerations underlying the policy of the Government in this respect.

The merits of these measures will not be correctly appraised unless they are considered in relation to the general aims of government policy as well as the particular features of the international trading position to which they directly apply. These general aims, as set out in the policy speeches of the Prime Minister and consistently pursued over the last four years, were the rehabilitation of the national finances; the development of domestic industry in all desirable directions ; the expansion of export trade ; and such widening and fertilizing of the fields of primary and secondary employment as would not only provide for the speedy employment of all employable hands rendered workless by the economic crisis, but also create opportunities for immigrants to accelerate that increase of population which is essential to the national safety.

No one will deny that the progress towards the achievement of these aims has been considerable. Compared with our position during the depths of the depression and with the position in which many countries still find themselves, we must consider ourselves happily circumstanced. A good deal of leeway, however, remains to be made up before we can contemplate our position with complete satisfaction. There is still some unemployment beyond the normal among our people. Our condition does not yet act as a magnet attracting new population. .We still await the throb of a new growth. While the Government subscribes to the principle that in Australia the primary and secondary industries are essential to each other and should go forward together, it clearly recognizes that general prosperity at the present stage of our development rests largely on our rural industries. If the rural producer enjoys good seasons and a sufficient demand for his export surplus to maintain a profitable price level, his prosperity is reflected in every business and workshop. National well-being is intimately bound up with the welfare of the rural industries and their ability to maintain and expand their export markets. We are unable to view the expansion of the export trade in the confident terms of the middle ‘twenties when the emphasis was on production and still more production. Now the emphasis is definitely on marketing, and the market problem is beset with increasing difficulties and perplexities. The prolonged and relentless pressure which the economic crisis has exercised on the economic structure of the world has destroyed the faith of many in the economic principles which had formed the basis of their policies for many generations. Revolutionary changes have occurred in the internal economy of many countries, as well as in their financial and commercial relations with the rest of the world. Management of currencies and re-organization of industry under government direction, and the substitution of international barter for the old selfregulating principle in international trade, have not only been widely adopted as emergency methods but also are being strongly advocated as economically sound and advantageous. The fact that several of the great States responsible for almost two-thirds of the world’s industrial production have deserted the old principles in great or less degree implies that the way to recovery does not lie straight back along the familiar tracks.

A conspicuous feature of the period of economic crisis has been the spread of commercial policies aiming at national self-sufficiency and the canalization of trade. These policies, widely practised, have been responsible for rising tariffs, quotas, import licensing systems, clearing agreements, restrictions on dealings in exchange and numerous other types of trade barriers. Although the tide in favour of national self-sufficiency shows some sign of recession, history does not encourage us to anticipate a return to the conditions which formerly prevailed in international trade. Another feature of this changing order has been the trend of the great raw-material importing countries towards bi-later alison in their external trade relations. These developments have had their inevitable reactions in the raw material and foodproducing countries, which formerly found their largest markets in one group of countries, but obtained their import requirements from another group.

Since the world-wide adoption of arbitrary devices calculated to maintain and expand exports, and the now familiar practice of making an excess of imports the basis of a demand for special facilities for expanding their trade with a particular country, the countries producing raw material and food are finding themselves more and more obliged to abandon the principle of “ triangular “ - open market - dealing which formerly governed their external trading, and to direct their purchases to countries which offer the best field for their exports. We may lament the changed order but we cannot ignore the tendencies. As one high authority put it : “ To try to combat the economic nationalism of the present day by the classical argument of Smith and Cobden is like trying to attack a tank with a sabre belonging to one of Napoleon’s hussars “. These policies have inevitably had their effect on Australian trade overseas. In emphasis of this fact I need only invite honorable senators to recall the effect of these policies on our trade with such countries as Germany and Italy. In the case of Germany, direct exports fell from £9,500,000 in 1933-34. to £1,750,000 in the following year. At the same time exports to Italy fell from £4,500,000 to somewhat less than £1,000,000. These great changes reflect the repercussions on our export trade of the policies of self -sufficiency and bilateralism adopted by the two great industrial countries. The great deterioration of our exports to those countries has occurred at a time, when unlike most other countries, Australia was pursuing a policy of downward revision of its tariff. For the present, at least, and for so far ahead as we can at present see, we must accommodate ourselves to trading overseas according to the new rules if we would conserve the trade we have, much less effect the progressive expansion which means so much to our national development and well-being. So far as possible, we must trade most with those who are prepared to trade most with us. This does not mean that we shall aim at bilateral balances with particular countries; but that we shall endeavour to divert our imports into channels from which most benefit will accrue to our national economy. The schedule is designed to give effect in part to the policy of the Government to meet the changed conditions.

The commodities covered by the schedule fall within two broad categories -

  1. Commodities which are imported principally from the United States of America, viz., tobacco leaf, lubricating oil, Oregon timber, and motor chassis.
  2. Two commodities which until recently had been imported principally from the United Kingdom, but which are now being imported in rapidly expanding quantities from Japan, viz., cotton piece goods and artificial silk piece goods.

As the considerations which influenced the Government to amend the duties in both cases are not identical, I propose to deal with the two aspects of the matter separately. The condition in international trade to which I have referred earlier, particularly the tendency towards bi-lateralism, has made trading conditions more difficult than everfor those debtor countries which formerly carried on their overseas trade on the triangular trade principle. In Australia, we have heavy overseas interest commitments, both in public and private debts, which can only be serviced through the medium of a regular and substantial excess of exports over imports. We have on the one hand, the equilibrium in our balance of payments threatened by expanding imports from countries which offer a most indifferent market for our export products. On the other hand, if we seek to hold imports in check by applying restrictions generally and indiscriminately we must inevitably incur the displeasure of many good customer countries which are already dissatisfied with the long- standing disparity between our sales to them and our purchases from them.

The Government’s policy aims at limiting imports from those countries where trade is impracticable on a reasonable basis of reciprocity. The policy is based on the principle that if any sacrifice is to be made in the interests of maintaining either our export trade or our balanceofpayments position, it should not be at the expense of export trade to goodcustomer countries, or of home industries, but at the expense of those countries which contribute most heavily to our great imports and at the same time find it impracticable to take our export commodities in return.

The measures taken against the American products aim either to encourage the production within our own boundaries of those commodities which we are capable of producing economically for ourselves, or alternatively, to divert the source of supply to countries from which we may look for some advantage in terms of reciprocal trade. The Government has not taken this action without long and serious consideration, nor until its efforts to redress a situation which it had found increasingly embarrassing had failed through the inability of the United States of America to offer us any prospect of ameliorating the position.

Wrapped up in the trade diversion proposals, although not entirely dependent on them, is the aim of the Government to bring about the establishment of the manufacture of the complete motor car in Australia. For the information of honorable senators, I should like to indicate the method by which the Government proposes to carry out the scheme. First of all, action has been taken to restrict the importation of motor chassis from all countries except the United Kingdom. Except for the special tax of . 7d. per lb. imposed on all imported chassis for the purpose of providing a bounty fund, the duties proposed in this schedule are not imposed for the purpose of encouraging domestic production. The sole reason for substituting fixed rates for the former ad valorem duties is to render the British preference effective. Although importations from the United States of America and Canada are now subject to quantity limits, importation is being permitted from those countries of the same quantities as were imported during the year ended April, 1936. To foster domestic production, the Government has announced its intention to offer a minimum bounty of £30 an engine, to be paid during the first two years of production, with a diminishing payment in subsequent years. The Government has referred the matter to the Tariff Board with the direction that its economic and national aspects be taken into consideration.

Senator Duncan-Hughes:

– When was that done?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Within the last few days. At the outset it is not anticipated that every part of the car will be manufactured in Australia. Certain parts which may present difficulty in the early stages of production will be permitted importation, as occurs in Canada at the present time. In order that the control of such an important industry shall not pass entirely out of Australian or British hands, it is proposed to make it a condition of bounty that every opportunity shall be given to Australian or United Kingdom investors to provide at least one-half the capital of any company undertaking manufacture of engines and chassis in Australia.

The specific reasons which have actuated the Government to encourage the manufacture of motor engines and chassis in Australia are -

  1. the value of such an industry as an agent in trade diversion, coupled with the fact that the heavy annual drain on our overseas funds is not offset by reciprocal trade considerations;
  2. Australia provides the market, has the raw materials, and the engineering skill necessary to carry the proposal to successful fruition ;
  3. the employment factor;
  4. the building up of a great additional force of engineering artisans so essential to defence;
  5. its contribution to defence generally;
  6. it will contribute to a sound and safe policy of immigration;
  7. the more difficult part of the motor car is already being manufactured in Australia;
  8. the effect of the policy in reducing the cost of parts already manufactured in Australia; and
  9. the firm conviction that manuture can be accomplished without increased prices to carusers.

I donot propose to attempt to elaborate all those aspects, as honorable senators will have a further opportunity to discuss them; I shall refer only to certain objections which have been voiced against the proposals. It has been claimed that the manufacture of the complete car in Australia will involve greatly increased costs. Certain critics of the proposals, whose criticism is by no means disinterested, have pointed to the selling price of cars, measured in Australian money converted at the current rate of exchange, in support of their criticism. I hope that no honorable senators will allow themselves to be deceived by specious calculations of this kind. The question of economic production has been fully considered by the Government, which is satisfied from facts and data that production can be undertaken just as efficiently and economically as in many other industries. It is perhaps necessary to point out that only 20 per cent, of the gross selling price of the cars chiefly sold on the Australian market is represented by overseas chassis costs. The remainder of the selling price is made up of charges and costs incurred in Australia. The production of the complete car in Australia will affect only that 20 per cent, of the gross price. I shall take a 15-cwt. chassis as an example. This is approximately the weight of the most popular sellers in the Australian market. The gross duty paid in respect of Canadian chassis of this type is £22 6s., and £43 Ss. for a similar chassis from the United States of America. If we add to this the bounty of £30 which the Government proposes to pay in the initial stages of the industry, and allow £20 as a conservative estimate of the saving which it is anticipated will result in bodybuilding costs due to mass production under the new conditions, it will be seen that the margin available to cover additional costs in the manufacture of engines and chassis amounts to £72 6s. over the Canadian example and £93 8s. over the American example. It is not, of course, anticipated that the difference in prices in Australia and America will be so great as these margins, more especially when it is recognized that the overseas cost of the motor car engine is less than £30. These figures demonstrate that the cost of production in Australia must be exceptionally high in comparison with the cost overseas before the selling price of the motor car is- carried above the present level.

As an indication that production of this nature can be carried out in Australia at reasonable prices, I remind honorable senators that 4,700 internal combustion engines were produced in Australia during 1935 under normal protective duties, the British preferential rate on this class of goods being 33f per cent. These are pertinent facts which, I suggest, may serve to convince honorable senators that there is no justification for anticipating that the production of the complete car in Australia will involve consumers in the payment of higher prices than at present obtain. What is regarded by those qualified to speak as the more difficult part of the car to produce is already being manufactured in Australia. I refer to the body or the fashion side of the car. Bodies are continually changing in design and appearance. Contrary to popular belief, little alteration in engine design has occurred within the last decade. It will no doubt be claimed in some quarters that the manufacture of motor cars in Australia by two or three manufacturers will not permit production of all the types sought by Australian purchasers. The great variety in the types of vehicle now on the Australian markets is not so much due to the specific demand of the buyers as to the multiplicity of organizations competing with each other to sell only the very few cars of each type purchased. Eighty per cent, of the total Australian demand is met by cars of North American origin. Eleven different engines are responsible for 88 per cent, of the importations. Eighty-four different engines are listed on the Australian market, but if 67 of these different types are aggregated they account for only 15 per cent, of sales. It will be apparent that there is not a general demand for numerous types of cars. However, if a purchaser desires to gratify his fancy for a particular car, and demands an overseas product, he will be able to get it, just as some fastidious purchasers import the car complete with body. There is no reason to anticipate that a company undertaking the production of cars in

Australia will not enjoy access to overseas research and design. The Australian public should therefore be assured of their ability to obtain cars incorporating all new developments.

I shall refer to the action which the Government has taken in the matter of textile imports. The Government had viewed with concern the rapid changes iri the direction of trade in cotton and artificial silk piece goods prior to the tabling of the tariff proposals on the 22nd May last. The extraordinarily low prices at which most of the foreign textiles of these types were being imported utterly defeated the policy, as expressed by the tariff, of according a material measure of preference in the Australian market to textiles of United Kingdom origin. Honorable senators are aware of the preferences granted to Australian primary produce in the United Kingdom market under the terms of the Ottawa Agreement. As a partial offset to the preferences which we then obtained, the Commonwealth agreed to grant preferential treatment to cotton and artificial silk piece goods, which amounted to approximately £4,09S,000. These textilesaccounted for no less than 23 per cent, of the total imports into Australia from the United Kingdom in 1931-32 - that is the year in which the Ottawa Agreement was made. By 1935-36, notwithstanding the increased measure of prosperity compared with 1931-32, imports of these textiles from the United Kingdom had fallen to £3,571,000. In the present state of confusion in the currencies of the world, the trend of the trade is better indicated in terms of volume rather than of value. Between the years 1932 and 1935 exports from the United Kingdom of cotton piece goods to Australia decreased by 49,000,000 square yards, while the exports from foreign countries to Australia increased bv 50,000,000 square yards. In artificial silk the British exports to Australia fell from 8,000,000 square yards in 1932 to 7,250,000 in 1935. Imports from foreign countries increased by over 53,000.000 square yards in the same period, rising from. 15,000,000 to 68,500,000 square yards.

These figures, I think, reveal quite clearly that the margin of preference n greed to at Ottawa, which was based on ad valorem duties, and has been almost, if not wholly, destroyed by the heavy depreciation of the sterling value of the currency of Great Britain’s chief competitor, was totally inadequate. Australia still enjoys the benefits of the United Kingdom preferences on the primary products which we export to that market, but was not, in fact, ensuring to the United Kingdom the market for textiles which was contemplated when the Ottawa Agreement was signed. J apanese textiles had made such inroads into the Australian market that Japan, in addition to supplying about 93 per cent, of the pure silk fabrics, had captured 87 per cent, of the market in respect of artificial silks, and 45 per cent, in respect of cottons.

The Government, after many months of deep and close consideration of the development of the trade in foreign textiles, and after very close investigation of the price factor, decided that it could no longer regard with indifference the effect upon Australian economy of the rapidly- increasing volume of imports of low-priced foreign cotton piece goods and artificial silk piece goods. The Government was forced to the conclusion, based solely upon the necessity to’ grant protection to British industry, in view of our complete reliance on the market provided by the United Kingdom for the absorption of our exportable surplus of all difficult selling commodities, that the imports of foreign textiles at such disturbing price levels could not go unchecked. Under the double advantage of low production costs and a heavily depreciated currency, Japan has become, virtually, the only foreign supplier of cotton and artificial silk piece goods. The extremely low prices of Japanese textiles rendered the ad valorem preferences accorded to the United Kingdom totally ineffective. The position during 1.935 and the early part of this year was further aggravated by a series of drastic and seemingly unnecessary reductions of prices on the part of Japanese exporters, bringing their prices to a level which completely defied competition from other countries. It became clear that it was only a question of time before practically the whole of Great Britain’s textile trade with Australia passed into Japanese hands. Whatever claims Japan may have had for special consideration because of its extensive purchases of Australian wool and wheat, the claims of Great Britain were many times greater. For many months the Government engaged in negotiations on the subject in an effort to reach a friendly arrangement with Japan whereby the volume of Japanese textiles exported to Australia would be curtailed to an agreed limit. Unfortunately, these efforts to adjust the matter by friendly arrangement failed, and left the Government with no alternative but to proceed by uni-lateral action to redress a position which had become intolerable.

The duties proposed in the bill are based on an exhaustive price survey which included an examination and comparison of invoice prices of all imports of these textiles during the month of February. They are designed to limit the importation of the cheapest grades of textiles into the Australian market. They are neither discriminatory nor prohibitive. I should like honorable senators to appreciate that Australia has been almost the last country to impose a defensive restraint on the importation of excessive low-priced Japanese textiles. In consideration of the fact that Japan was a good customer for Australian wool and wheat, Australia has displayed a degree of forbearance in facing the problem of Japanese competition which has not been practised by other countries similarly affected. An appreciation of the extent to which the prices of Japanese textiles have been reduced may be gained from the fact that, although our imports of Japanese textiles last year were more than three times the quantity imported prior to 1930, the value of imports in the later ye,ar was only about three-quarters of the value of the smaller imports prior to 1930.

By a remarkable coincidence the United States of America gave notice, also on the 22nd May, of its intention to increase the duties on Japanese cotton piece goods by 42 per cent. The reason for that action affords a striking parallel to the reasons advanced by the Commonwealth Government on the same day, and was reported in the following terms : -

Japan’s position is quite understandable. The State department recognizes as well as Japan the importance of American-Japanese trade, and it is for this reason that, despite the fact that petitions or recommendations for restrictions on as many as 200 items of Japanese imports have poured into the State department, the Government is doing the best it can to placate them. The State department is not so narrow-minded that it would immediately set about curbing Japanese imports merely because there has been some increase, but Japanese exporters themselves must realize the injuries resulting to American industry if, in spite of the ability to compete effectively with American goods on the American market without excessive price-cutting Japanese exporters pour preposterously low-priced goods into the market ir. large quantities all at once, instead of endeavouring to expand their markets, little by little, as they should.

The case of the Commonwealth Government rests on the disturbing effects which the tremendous influx of excessively cheap textiles has on our trading relations with other countries, and on the business community within Australia. I emphasize that the desire of the Government is to limit the volume, not necessarily the value, of textile imports from Japan. Having regard to comparable qualities of piece goods, an ample margin exists between Japanese prices and those of Japan’s nearest competitor, to enable Japan to be compensated for a reduced volume of textile exports to Australia by an increase of price. A supplementary factor which weighed

Avith the Government was that it could not allow any great section of the Australian market to be entirely absorbed by goods of relatively low and completely non-competitive levels. Regardless of the country of origin, wc could not observe these import levels without serious thought for our Australian standards. If such price levels in a competitive sense could be adopted for any one industry they may at any time be adopted in others. It appeared to the Government that the stand it is making would have to be taken sooner or later, and it would be lacking in courage and in its duty if it failed to take it now

The trouble with these low-priced textiles is not peculiar to Australia. Australia has been one of the last countries to move against them. Recently the Japanese Textile Guild announced that 76 countries had taken action either directly or indirectly to limit the importation of Japanese cotton cloths. The strength of the Commonwealth case lies in the fact that it is impossible for any country, working under western standards, to meet Japanese competition, particularly when Japan enjoys the supplementary advantage of a very heavily depreciated currency. The advantages of these factors are appreciated in wellinformed quarters in Japan, and in this connexion I invite the attention of honorable senators to certain extracts from a recent research survey by the Mitsubishi Economic Research Bureau in Tokio. Speaking of the rayon industry the survey said -

In view of the late start and up-to-date equipment the improvement in Japan was even more thorough than abroad; but the low cost of production must be chiefly ascribed to the exceptionally cheap labour cost.

Japanese articles have invaded every corner of the world market under the double advantage of low exchange rates and production costs. It is easy to understand why import restrictions should be particularly directed against Japanese goods.

Although the Government has been compelled to move for increased rates of duty as a defence against low-priced foreign textiles it has always been prepared to consider modifications, provided the Japanese Government is willing to co-operate in imposing restraint on the quantities exported to Australia at such devastating)? low prices. Negotiations to this end are in progress at present. I have justification for anticipating that a solution of the difficulty acceptable to both parties will be found.

Meanwhile I ask the Senate to accept the duties and the proviso contained in the schedule.

Senator COLLINGS:
Queensland

– At last Parliament is to be given an opportunity to consider the very important subject which the Minister (Senator A. J. McLachlan) has just introduced. When a frantic rush is now being made to get into recess I have a very vivid recollection of another similar rush when Parliament last adjourned, late in the evening on the 22nd May last, two very bulky roneoed documents were thrown before honorable senators, and no sooner had they been distributed than the Senate adjourned until the 10th September. Originally it was the Government’s intention that Parliament should adjourn on the 8th May, but when that date arrived it was obvious that there was no chance of an adjournment, and it was then decided that the sittings should terminate on the 15th May. On that date it was again obvious that the temper of the members of both Houses was of such a character that there was no likelihood of members dispersing that day. On the 22nd May, it was desired to adjourn in sufficient time to enable members of both Houses to join the 4.15 p.m. train, but it was discovered that that was impracticable. It was then thought that an adjournment could be made in sufficient time to enable us to join the 8.30 p.m. train. That was also impracticable and a bus was chartered to connect with the train at Goulburn. It then transpired that that would be useless so a fleet of cars was commandeered to connect with the train by midnight. Since the adjournment on that date, honorable senators have not been given an opportunity to discuss one of the most momentous fiscal proposals ever brought before Parliament. Since the 22nd May, many irresponsible bodies, chambers of commerce, chambers of manufactures, financial institutions, newspaper organizations and graziers’ associations have been able to go carefully into the Government’s trade diversion policy.

Senator MARWICK:
WESTERN AUSTRALIA · CP

– And also Labour organizations.

Senator COLLINGS:

– Exactly. Since the 22nd May persons who are not responsible to the electors, and who do not have to undertake the responsibility of the legislative work of the nation, have been able to study these proposals, and have not hesitated to express themselves upon it, but the Minister, having ‘ now moved “the second reading of this bill, we are supposed to be prepared to go straight ahead with the job. We were chased into recess on the 22nd May because the Government did not dare to stand up to the criticisms of the members of this Parliament.

Senator HARDY:

– Is that the opinion of the honorable senator or of the Labour party ?

Senator COLLINGS:

– These irresponsible bodies have been given an opportunity to study these proposals, but the Prime Minister (Mr. Lyons), with tears in his eyes, got into the “scrap” in an address over our wireless network, and asked certain persons to keep out of the ring. The Labour party did so because the Prime Minister said that negotiations were proceeding and that everything would be satisfactory if the people would remain silent. The Labour party did as requested, but, later, when it had an opportunity to enter the ring it was twitted with having been silent for so long, and then coming out on the side of Japan. I had the misfortune in August last to be a member of a Queensland audience which had been invited to attend an exhibition arranged by .the PostmasterGeneral’s Department, and also to hear an address over the air by the PostmasterGeneral. Every member of the audience had definitely been invited to hear the Postmaster-General speak that evening. After we had inspected the exhibits the gentleman controlling the proceedings came on the stage and said : “ Ladies and gentlemen, I am very sorry but there has been an alteration of the programme. The Prime Minister is on the air and has something of importance to say to the Australian people “. We were not invited to hear an address by the Prime Minister, and a considerable number of those present did not want to hear him. After hearing the speech some of those present, including myself, regretted that the microphone had not a body to be kicked or a soul to bc damned. Amongst Other things, the right honorable gentleman said -

I want you to bc sure that the one thing that is in my mind, and in the mind of the Government, is the preservation of the Australian standard of living. That has impelled the Government to take tariff action against Japan and the United States of America.

Let us consider the utter hypocrisy of that statement; first of all the Prime Minister, who was once a member of the Labour party, knows of the struggles of that party to lay down the policy in regard to employment which eventually led, not with the assistance of his then opponents, to the establishment of something like an Australian standard, the White Australia policy, and the keeping of the cheap goods of all countries that cannot conform to it out of Australia, so far as it was possible to do so. The right honorable gentleman knows the struggle that some of us, and our working men and women, put up to establish that Australian standard of comfort. This is not the first time that tariff schedules have been debated in this chamber. The Australian Labour party alone has fought in this Parliament for the protection of Australian industries, and we have been astonished at times at the paucity of the support we received from the different sections in the Parliament of this nation. Nevertheless, we have fought in season and out of season for a policy of high protection, a policy that will keep goods out of this market once Australia can show that it can adequately supply them. What has been the result? As a spokesman for the party on this side of the House, and on behalf of the Opposition since I became its leader, I have in season and out of season during tariff debates pointed out to the Government that every reduction of duty is in the direction of sacrificing some individual who is getting his livelihood out of Australian industry. I have said that eventually the time would certainly come when the Government would have to take drastic action to meet the situation which for a long time we predicted would arise. What happened? At last the Government, astonished that all the things the Labour opposition had been predicting for years were at last coming to pass as a result of government policy, was overwhelmed with fear. So these drastic proposals were brought down and the Parliament was adjourned in order to prevent discussion of them. The Minister in charge of this bill had a very difficult task in making his secondreading speech to-night; he had to tread very cautiously; I am inclined to compliment him on his very adroit presentation of his case. It was a very fine piece of special pleading on his part, in which the main facts were kept in the background and the non-essentials were elaborated to an unnecessary degree.

Senator Hardy:

– The honorable senator does not think that we should have imposed these duties on Japanese goods?

Senator COLLINGS:

– I know that Senator Hardy would like me to say something which would enable him to retort, as his friends in the House of Representatives unfairly did recently, that, having sat on the fence for five months, the Labour party has now fallen over on to the side of Japan. I have not fallen on the side of Japan for the simple reason that I have never been sitting on the fence. Not one yard of material or one article of any description manufactured in Japan ever comes into this country unless somebody has ordered it; Japan does not send boatloads of goods to this country and .send salesmen with the ship to dispose of them. Every article that comes here is ordered by traders, and they are not the people who provide the political funds of the party to which I belong, but rather are they subscribers to the funds of the parties from which these proposals emanated. I know it to be a fact that one Queensland merchant has a controlling interest in a Japanese textile factory. In reply to the suggestion, somewhat crudely made by Senator Hardy in his most recent interjection, I say that there was no occasion whatever to bring down in this Parliament a schedule of definitely provocative duties. If this Government is rightly, honestly and sincerely desirous of creating within this Commonwealth industries which can be and should be created, all it needs to do is to bring down a tariff which will keep out those articles which we can produce here. It should not, as it has done, have brought down a tariff which selects for special treatment, first, a good-customer country of ours, and then a bad-customer country, but both countries with which we should be on terms of friendship. Surely every honorable senator recognizes the fact that we should do everything to secure the goodwill of the United States of America and also that Japan has been one of the best customers Australia has had in the past. The new tariff schedule has been definitely provocative to both countries; there was no occasion to incur their enmity.

We have had from the Minister tonight a long dissertation on the manufacture of motor cars in Australia. No honorable senator is more desirous than I am to see Australia well started on the road to manufacturing complete cars to meet its requirements. I point out that even on these lines we should put a little intelligence into our tariff policy and into our conduct in promulgating it. We should not encourage the great sister dominion of Canada to expend millions of pounds in establishing the motor car industry in this country to such an extent that it is now employing 2,900 Australians - I refer to the Ford Motor Car Company whose products were manufactured in Canada, a country with which we have some sort of arrangement which is not altogether disadvantageous to Australia - only to follow it up by imposing provocative duties on the chassis imported by that firm. We encouraged these people, and then suddenly and without warning, at 9 p.m. a provocative tariff schedule was thrown on the table, and honorable senators were given no chance to say anything about it. What really is the fiscal policy of this Government? It would be interesting indeed to get a definite statement from a responsible cabinet Minister as to where exactly the Government thinks it is going with this policy. As a Labour man, I have said to the Government over and over again that I recognize the difficulty which confronts it; it is a composite government composed of two quite distinct, and often warring elements. It has a very difficult course to steer between those who want a high protective policy - that, of course, is the Opposition - and the others whom it has to placate, and who do not believe in duties being imposed at all on anything which they use, but want protection for everything they sell. In the press to-day, I read the following paragraph: -

Reflecting the recent extensions of the Federal Government’s low-tariff policy, customs and excise revenue has soared to £18,578,000 for the five months of the current financial year ended yesterday. Receipts are £1,271,000 in excess of those for the same period of 1935-30, and are at a rate which, if maintained, will exceed the budget estimate bv £1,4.00,000. As the full effect of three recent trade treaties has not yet been felt, indications point to custom’s and excise revenue for the full year ‘being between £2,000,000 and £2.500,000 above the budget estimate. Already receipts are £020,000 above the estimate. The increase for last month, compared with November, 1935, was £192,000.

That is the result of a definite policy, and the Government is proceeding with it; yet in this bill the Government adopts an extreme policy in the opposite direction. What actually is the Government’s policy? Would it not be worth while to adjourn the Parliament to enable the Government to make up its mind as to the fiscal policy it intends to apply to the affairs of this country? There is no need for me to declare the desire of .the .Opposition that Australian industries should he encouraged. Let me say here - because my omission to say it now may be used against me in a higher court - that Labour’s policy has always been Australia first, Great Britain next, and other countries last. Reverting for a moment to the proposal to manufacture motor cars in Australia, the Labour party objects very much indeed, as I have already said, to diverting trade from one country which at least has invested some capital in this country to Great Britain which has never spent a “hean” in Australia. British car manufacturers have never built a motor car in this country, and for years they would not produce a car which would conform to Australian conditions. We should not lose sight of that fact, and the fact that -we are greatly indebted to Mr. Henry Ford for his efforts to establish the industry in this country.

Senator Guthrie:

– We must not forget, however, that Great Britain buys the larger proportion of everything we produce.

Senator COLLINGS:

– The Government’s policy “was merely to divert trade from one country to another, without first making sure of procuring some quid pro quo. Such a policy is not a safe one for this country to adopt. On the question of fiscal policy - and in making tips et: tennent I know that I run the risk of wilful misrepresentation - I say that if Ave are to be robbed at all I prefer to be robbed by Australian manufacturers - who at least will spend their loot in this country, and give employment to Australian workmen. I take the same risk again when I say that it does not matter to the workers of this country whether the manufacturer who is robbing them of the opportunity to secure employment in Australian secondary industries is producing in the United States of America, Japan or even the United Kingdom. What ever the circumstances, robbery -is always an unpleasant experience to the person who is robbed.

Senator Hardy:

– Hoist the flag!

Senator COLLINGS:

– Half the flags that will be hoisted on the other side of the world, like those which were hoisted here when a member of the Royal Family visited Australia, will be made in Japan by friends of the party which Senator Hardy leads. Recently a shipload of 780 tons of Christmas toys arived in Australia, but no protest was made. The only protest against the admission of goods from Japan has related to rayon and other textiles. The reason for the protest is that emissaries from Manchester had given instructions to the Commonwealth Government. The Opposition is not so easily deceived by elaborate treatises which conceal everything worth knowing and tell nothing. Since the Lyons Government assumed office in 1932, its fiscal policy has caused every true Australian grave concern. That policy has damaged Australian secondary industries, caused unemployment among Australians, resulted in an unfavorable trade balance and a serious economic position, and injured Australian primary industries. If that is not a sufficiently complete and damning category of fiscal crime, I do not know what is. The Government has failed to recognize the importance of safeguarding and expanding Australia’s secondary industries, thereby ensuring more employment and improving economic and financial conditions. A few days ago I pointed out the futility of talking about favorable and unfavorable trade balances, but as honorable senators did not believe me then, I shall not repeat the argument now. The Government professes to be concerned regarding the imports of cheap goods from one country, but it is concerned only with goods that are not manufactured in Australia. At the same time, by allowing into Australia huge imports of cheap goods which could be manufactured here, it refuses to protect the workers. What is the real situation in regard to textiles? Does the Government’s action spring from a genuine desire to protect the textile industry in Australia, or is it the outcome of representations by manufacturers in Manchester who have been beaten at their own game, and in their extremity have asked the Australian Government to get them out of their difficulty?

Senator Guthrie:

– Does the honorable senator wish the standard of living in Japan to be also that of Manchester?

Senator COLLINGS:

– Much is said of the standard of living in Japan, but surely the conditions there cannot be worse than they are in parts of the United Kingdom at the present time. Only recently, at the request of the Government of the United Kingdom, King Edward VIII. visited the distressed areas in South Wales, and soon he is to undertake another mission of a similar nature to the Clyde manufacturing centres. His Majesty has been asked to make these visits because industrial conditions in the United Kingdom are so bad that men and women have been out of employment for numbers of years. Recently we read in our newspapers that His Majesty stepped behind the counter at one place that he visited and, speaking to men individually, asked them how long they had been out of work. The replies were “ Three years, sir “, or “ Nine years “ ; in some instances, the term was even longer. The King, who was visibly affected, exclaimed “ Something must be done about this; work must be found for these people “. There is no need for me to fill in the details of the picture; but conditions could scarcely be worse in any country.

Senator Hardy:

– Does the honorable senator know of any people in the United Kingdom, receiving only 6d. a day?

Senator COLLINGS:

– I suppose that interjection implies that low wages are paid to workers in Japan. I believe that that is true. I do not believe in letting in to Australia the cheap products of Japan or of any other country. I have never believed in it, but the present Commonwealth Government has always believed in it. In a speech which I delivered some years ago, I pointed out that Japanese collars were being sold in Melbourne at prices which a Melbourne manufacturer told me were below the cost of production in Australia after excluding the cost of labour. I have previously told how the Myer Emporium bought bicycles of Japanese make for a few shillings each, and retailed them at 30s. At that time the only response I received from senators outside the Labour party was sneers. But now, when the results of the Government’s lack of policy are being revealed, the Government gets into a state of panic and introduces a tariff schedule which is provocative to the last degree. To-day the world is trembling in an atmosphere of mistrust. Great Britain does not fear any nation, but it is naturally anxious to maintain friendly relations with its immediate neighbours, France, Germany and Italy. Australia should not fear Japan, and for my part I do not believe that Japan is a menace to Australia in the sense that war between the countries is likely. I believe that if we in Australia continue to show the spirit of goodwill, we shall have nothing to fear from Japan. I do not think that Australia has anything to fear from any country so long as we mind our own business, and endeavour to maintain friendly relations with other people. Australia would be wise to maintain the friendliest relations with the United States of America and Japan and other countries which border the Pacific Ocean. The Commonwealth Government has failed to take a broad national outlook, but as its policy always has been, and always will be, dominated by sectional interests, it cannot be expected to place Australia first. Even if we agree that the Government has made a belated attempt to do so we are forced to the conclusion that it has acted clumsily. In introducing the Tariff Schedule on the 22nd May the Minister directing negotiations for trade treaties (Sir Henry Gullett) said -

We are aiming in future to draw our supplies from countries which are already great customers of ours, and which we may confidently expect will become greater customers if we increase our purchases from them. In this way we may expect substantially to increase our export trade.

Previously, a cardinal feature of the Government’s tariff policy was a systematic reduction of both the British preferential and the general tariff rates. Already 1,289 items have been reduced in the preferential tariff and, in addition, there has been a reduction of nearly 600 items in the general tariff. A mere recital of those figures may not reveal their full importance, but when I point out that those reductions have meant the displacement of Australian workers, their significance is obvious. Reduction of dutiesmeans that goods which previously were not imported are brought in, with a consequent harmful effect on employment in Australia. Under the policy of the Government, customs revenue has swelled, and yet the Government has resisted every criticism of that policy. The following table shows how imports have grown since 1931-32-

That phenomenal rise of the value of imports has not been accompanied by a corresponding growth of exports, for whereas compared with 1931-32 the value of imports in 1935-36 rose by £39,500,000, the value of exports increased by less than £20,000,000. I realize that the designing of a scientific tariff to protect Australian industries, both primary and secondary, is beyond the capacity of the Government, and, indeed, of any government other than one consisting of members of the Labour party. Recent happenings in regard to cement show the inability of the Government to protect Australian industries. “When duties on cement were under consideration some months ago, the Opposition, both in this chamber and in the Blouse of Representatives, visualized cement being brought to Australia as ballast for ships, but Government supporters ridiculed the idea. Their prediction has, however, been fulfilled, for the Industries Preservation Act has had to be brought into operation to prevent damage to the Australian cement industry.

Senator Arkins:

– In any case it would have been dumped. _

Senator COLLINGS:

– Although honorable senators will refer during this debate to the danger of excessive imports from Japan the fact remains that Australia’s exports to that country are far in excess of its imports from it. I hope honorable senators will realize that fact. If a country takes our exports, we ex pect payment for them; but payment can only be made by allowing that country to sell us goods in return.

Senator Dein:

– The honorable senator does not take that attitude in regard to Fijian bananas.

Senator COLLINGS:

– I wish that the honorable senator had a soul above the subject of bananas. When a great national problem is under discussion, he throws1 into the arena a Fijian banana. That product is nothing to boast about, anyway; it is not comparable with the Queensland banana.

I invite honorable senators to study the trade relations between the United Kingdom and J apan. The figures in this connexion are illuminating. Imports to the United Kingdom from Japan in sterling were- 1933-34, £7,200,000; 1934-35, £7,890,000, 1935-36, £9,000,000. On the other hand Great Britain’s exports to Japan were1- 1933-34, £3,480,000 ; 1934-35, £4,000,000; 1935-36, £3,540,000. While Australian exports to Japan have increased, the United Kingdom exports to this country have been reduced. Summarized, these figures mean that Great Britain’s exports from Japan in the three years under review have increased by £1,690,000, while its exports have remained static; Great Britain’s imports from Japan are nearly double Australian imports from Japan; Britain’s imports from Japan are nearly two and a half times as much as its exports to Japan; whereas Australia’s exports to Japan are three times as great as its imports from that country. Sir Ernest Thompson, leader of the Manchester trade delegation, is the gentleman who, I suggest, came to Australia in order to point out how incapable Great Britain was of competing with Japan and to beseech Australia to come to the rescue. Much of the inability of the textile manufacturers of the United Kingdom to compete with the Japanese articles is due to the fact that they will not get out of the rut. History contains ample evidence of the fact that Great Britain has never shown remarkable agility in getting out of a rut. British character might be epitomized as unpreparedness to face realities, and a disposition to muddle through. As a distinguished visitor to Australia recently said - “ It takes a long time to teach us a lesson, but when we learn it we never forget it.”

Senator McLeay:

– But we cannot compete with Japan, and, are we not out of the rut?

Senator COLLINGS:

– Sir Ernest Thompson according to the Melbourne Herald of the 9th March last said - lt is no use maintaining a standard of living within the Empire if we are to allow Empire markets to be flooded with goods produced under conditions which neither Britain nor Australia would tolerate.

So far as his remarks apply to Australia, I agree with them ; but why should he come here to tell us that story when Great Britain is still importing millions of pounds worth of goods whose competition, on his own admission, Great Britain is incapable of withstanding? Sir Ernest Thompson’s remarks were notable for the omission of any reference to Argentine meat or to Russian wheat. Apparently these trifling matters were of no concern to him. Sir Ernest was present on a textile mission and this Government fell at his feet, saying in effect, “ Yes, Sir Ernest, what you say will he d.one - never mind what happens to our wool industry.” The Government has got itself into a mess, and is wilting before the consequences. The Opposition is now expected to lend the Administration a hand in order to help it out of its present muddle.

Senator Hardy:

– I wonder what the honorable senator would have said if the trade dispute with Japan had been settled to-day?

Senator COLLINGS:

– This schedule asks the Parliament of the Commonwealth to do for Great Britain in Australia what Great Britain is not prepared to do in the United Kingdom in the interests of its own manufacturers. The Opposition is prepared to assist the Government to escape from the unfortunate mess into which it has got itself. The Labour party has always been willing to help the Government to correct its errors, once it admitted them. If this tariff schedule is not an admission of the Government’s incapacity and mistakes, I do not know what would ‘be. The Minister in charge of the bill, in his secondreading speech, should have told honorable senators exactly what Australia will receive from Great Britain if we make the sacrifice expected of us. When the Manchester trade delegation was in Australia, Mr. Ellis, one of its members, said that the United Kingdom desired to be allowed to supply those goods which Australia cannot produce. In other words, the delegation did not want Australia to purchase from foreign countries the articles which Great Britain could supply. But would Great Britain be prepared to apply to Australia the same principles that it wishes Australia to apply in respect of itself ? It buys from J apan and other countries where labour is cheap, and which supply goods which Australia is capable of supplying. In the circumstances, the Minister should have told honorable senators what concessions the United Kingdom is prepared to grant to Australia for the sacrifice which it is proposed that the Commonwealth should make.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I shall inform the honorable senator when I am replying to the second-reading debate.

Senator COLLINGS:

– I shall be eager to receive the information. In a leading article, the Manchester Guardian urges a continuance of Britain’s trade agreement with Argentina, saying that it is common ground between all-important British industries that Argentina’s market must be zealously extended. If, in return for Australian concessions, Great Britain is prepared to grant us a more favorable meat agreement, in order to absorb our exportable surplus, we shall be getting down to worthwhile bargaining.

Senator Guthrie:

– We are obtaining a magnificent price for our produce on account of Great Britain’s attitude in this respect and the Ottawa agreement.

Senator COLLINGS:

– I hope that the honorable senator will not tempt me to embark on a dissertation on the Ottawa agreement, because although I am well equipped to do so I should be out of order.

Senator Hardy:

– The United Kingdom purchases all of the exportable surplus of Queensland sugar.

Senator COLLINGS:

– That is so ; but I am certain that Great Britain does so only because it is in need of it. The sooner we get down to basic facts and realize that there is no friendship in business, and never will be until the existing social system is altered, with the advent of a Labour government, the sooner will our trade relations with other countries prosper. The silken ties of friendship have gone overboard ; they have become golden ties representing the mighty dollar and the worship of mammon. The Opposition is not inclined to forget previous concessions granted by Australia to Great Britain.

Senator McLeay:

– Has the Leader of the Opposition a list of the concessions given by Great Britain to Australia?

Senator COLLINGS:

– Australia purchases 42 per cent. of its total imports from Great Britain; Great Britain purchases only 7.2 per cent. of its imports from Australia. To attempt to persuade me that Australia cannot supply Great Britain with more than 7.2 per cent. of its total requirements would be futile.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The honorable senator cannot get away with that comparison.

Senator COLLINGS:

– The Minister will have every opportunity to reply to my statements. If he can convince me that my information is inaccurate, he will find me very contrite. I am prepared to stand by the figures which I have cited. When it is also remembered that, apart from goods which Australia has to buy from tropical countries - and Great Britain cannot supply many of them - of every £10 worth of goods purchased in Australia, £7 worth comes from the United Kingdom, the great advantages of the preference granted by the Commonwealth toGreat Britain will be recognized.

Senator Dein:

– What percentage of our exports does Great Britain take?

Senator COLLINGS:

– The Minister directing negotiations for trade treaties, whom a member of the House of Representatives unkindly but rather aptly described as the “Minister for trade tragedies “, appeared to be most concerned regarding the importation of goods manufactured by cheap labour. He also referred to criticism by the Labour party as a betrayal of the Australian workman. I have said sufficient in connexion with this matter to refute such a statement. The present Minister for Defence (Sir Archdale Parkhill), when criticizing the Scullin Government on the 4th June, 1931, said -

Hundreds of thousands of good Australians will be compelled to pay greatly increased prices for their clothing as a result of these excessively high duties.

Yet under the present proposals Australian workmen will be compelled to pay increased prices for their clothing as the result of the protection afforded to Great Britain. The Government was not prepared to grant effective protection to its own people; but it is prepared to do so for the benefit of Great Britain. I emphasize that the policy of the Australian Labour party is Australia first; Great Britain second; and our sister dominions next, if they can supply our requirements. In our scheme of things the rest of the world, in connexion with trade, will be placed as far away as possible. A scientific tariff, properly administered by the Government, would have achieved that object. All that is wanted is a settled fiscal policy without discriminating against any nation. If this were devised, there would be no need for this sacrifice of the wool industry under the schedules.

Senator Hardy:

– Would the honorable senator settle the trade dispute by permitting Japan to export to Australia any quantity of textiles it pleased?

Senator COLLINGS:

– The honorable senator will have an opportunity to elaborate his own contention. I am endeavouring to make it clear - and I believe that I have succeeded with everybody but Senator Hardy -that the Australian Labour party stands for a high protective tariff. In those circumstances, the Opposition will support any move for the purpose of increasing the protective tariff in order to prevent the importation of cheap goods from low-wage countries. To do anything else would be to jeopardize the “ White Australia “ principle. If we permit the unrestricted importation of cheap Japanese articles, we might just as well allow the unrestricted immigration into Australia of the Japanese themselves.

Senator Hardy:

– But the honorable senator has taken objection to that.

Senator COLLINGS:

– The Opposition objects to having its advice in regard tofiscal policy systematically, definitely, and contumaciously rejected for a number of years until the final catastrophe, which the Labour party predicted, occurs, when we are expected to be pure, merino, dyed-in-the-wool patriots, and come to the rescue of the Government, because the components of the composite Ministry are at loggerheads. The Minister directing negotiations for trade treaties, when introducing these schedules, declared himself an arch-champion of protection; throughout his previous political career he was the arch-enemy of protection. If ever there was a dyedinthewool freetrader it was Sir Henry Gullett, and now we are asked to accept this reversal of form on the part of himself and the Government to which he belongs, in spite of all the protests we have made against their policy hitherto. Of course, from the remarks I have been making for the last hour, honorable senators have gathered that we shall support this bill so far as it proposes to keep out the cheap products of cheaplabour countries.

Senator HARDY:
New South Wales

– I was very interested in the speech of the Leader of the Opposition (Senator Collings) and a great light dawned on me when I heard his concluding remark, that he proposed to support the bill. I came to the conclusion that, for the last hour, he had merely indulged inthe time-worn pastime of blowing political bubbles. The difficulty about the policy announced to-night by the Leader of the Opposition is that it is perilously close to the one enunciated recently by himself and his party in connexion with the Constitution Alteration Bills relating to marketing and aviation control. These instances show the members of the Labour party to be entirely unable to make up their minds. Apparently the tariff schedule now before us is to be treated by them as another non-party question - an attitude entirely inconsistent with the stand they have taken in the past.

Members of all political parties, in common with the thinking members of the community, frankly admit that the trade-diversion plan of the Government, as announced by the Minister in charge of negotiations for trade treaties (Sir Henry Gullett), is based on long-range principles, many of which are of a tentative nature. That long-range principles often prove to possess short-range repercussions is a fact amply demonstrated by the complete cessation of trade between Australia and Japan. It would, indeed, be difficult to indict the Government on the ground that indefiniteness and uncertainty are prevailing features of the plan. There are already plenty of debits, and some credits, which can be chalked up as the result of the plan. It must be admitted, even if we are in doubt as to whether the debits exceed the credits, that the proposals have been characterized by boldness of thought and action, for which the Leader of the Opposition did not give credit to the Government. He did not complain about the rapidity of the action taken.

That the issues raised through the implementation of these schedules are inextricably interwoven with the welfare of all those dependent upon the Australian economy is evident. Therefore, it is surely obvious that an analysis of the merits or demerits of the trade plan must not be focussed on the trade relationship of Australia to - Japan, for instance - any one country, but must necessarily involve a review of the complete export field. The apparently illogical action of the Government in erecting barricades against the goods of at least one good-customer country can only be justified by the recognition of certain trends in world trade. It is apparent that emergency measures have been taken by the Government to safeguard the export trade of Australia. Achievement of this objective would justify any plan, provided that the principles on which such plan was based recognized first that the maintenance and expansion of the export trade was essential to the Australian economy; and, secondly, that restriction of that trade was certain if principles of freetrade were applied to nations pledged to national planning and economic nationalism. Those are assertions with which it is difficult to quarrel. It is surely not necessary to emphasize the importance of the export trade, or the drastic re-adjustments which would follow within the nation consequent on the limitation of that trade. That is a point always forgotten by the Leader of the Opposition. When he speaks against any plan designed to increase the export trade of Australia, he does not vision alternatively the effects that would follow on the restriction of our trade. It should be sufficient to stress the well known birt not often appreciated facts - (1) That the export trade represents onethird of the total Australian production; and (2) that the industries concerned contribute one-third of the total national income. It is. only reasonable to assume that recognition of these facts in a world ruthlessly competing for overseas markets has found expression in protective legislation designed to safeguard our export industries. That this legislation, which is the direct negation of the principles of international trade, on which ultimate world recovery must be based, has been drafted only after the closest examination of the factors affecting our export trade, I readily admit. Still, one cannot accept as justification for the policy which the legislation represents the bald statement that the measures are imperative if our export markets are to be conserved. Something more is wanted. There should be three objectives which should be the goal of all legislation designed to influence the overseas trade of the nation. That .their attainment will clash with the policies of certain other nations similarly seised of the importance of an export trade I do not deny. We should summon all our energies to secure the right to - (1) Avoid restriction of our export production; (2) continue to sell our present volume of exports; (3) progressively expand in certain types of export production. Unquestionably the issues raised dovetail into any discussion on the future of Australian trade. Even the dullest of dullards must recognize that loss of existing markets, even contraction of those markets, will automatically force producers - through sheer inability of Australians to consume all goods produced - to limit their production. This is a fact often overlooked by the Leader of the Opposition. What is not realized, even by certain leaders of political parties, is that a restriction of export production, with its consequent reduction of income to the producer, will plunge this country into an economic disaster infinitely more severe than the onslaught of 1931. Would not restriction slash the purchasing power of the nation? Is it not a fact that the collapse of the income of the producer would be swiftly followed by the collapse of those engaged in secondary industries - one of the lessons we learned in the depression - until all sections of the community would be involved in the financial disaster? The lessons of 1931 would fade into insignificance, and the re-adjustment of our own social economy would be so severe that there would be extreme danger of a realignment which has invariably followed drastic alterations in the economic structure of European countries. Surely this is one point on which complete unanimity can be secured. All parties should accept without question the determination of the Government to avoid loss or contraction of export markets, with its inevitable penalty of restriction in production. That is one principle on which we and the members of the Opposition can surely find common ground.

The question, therefore, resolves itself into these two divisions: First, whether the legislation under discussion is based on the principles just enunciated; and secondly, whether it was necessary to risk limitation of trade with those countries in which our right to trade remained uncertain in order to further our interests in those markets which promise the dual advantage of expansion and stability. The uncertainty of world trading and the barriers that prevent access to world markets are strikingly shown in an analysis extracted from a League of Nations publication, headed A World Summary m Trade 1984. The summary not only emphasizes the chaotic condition of world trade, but provides a very excellent and unanswerable reason why Australia should extend preferential treatment to those markets in which it can secure stability of trade. In 1934 there were 17 nations adjusting their economics by the use of import monopolies; 27 nations were issuing import licences; 27 nations were insisting on import quotas; 12 nations were seeking adjustment through export licences; 16 nations were seeking advantages through export quotas; 14 nations were seeking markets by the assistance of export subsidies; and 36 nations were using the weapon of exchange control. It is obvious that the feature of world trade is the uncertainty of trading conditions brought about by the use of one or other of those devices, dearly loved by nations which are seeking to solve their problems through the uneconomic control of trade. Still, it is possible, even in the welter of adjustment and counter-adjustment, to assess in broad terms the trend of the Australian export trade, and to judge from that trend the uncertainty of existing markets. By reading the signs, we are able to plan. Even the most casual analysis reveals two broad divisions, in the export, trade of the Commonwealth. It is a distinction that is recognized by the Commonwealth Statistician in the publication of records, and by every member of the Senate. The first division represents those goods sold by Australia to the United Kingdom and the members of the British Commonwealth of Nations. The second division represents goods sold to foreign countries. These are two unalterable divisions, and no amount of debate will change those economic facts. Now let us face facts. “Why not establish at the outset which division in terms of trade is of the most value to the people of. the Commonwealth? That seems to be the issue, and indicates the guiding principle which formulated the legislation now before the Senate. The year 1934-35 provided cogent figures as to the relative values of the British and foreign markets. The British Empire purchased 66 per cent, of the total Australian exports. In Other words, of every £3 worth of goods Australia sold, the British Empire bought £2 worth. The United Kingdom alone bought 56 per cent. Foreign countries - and the definition covers all shapes and sizes, with people of every colour and creed, from the poppy fields of Japan to the wastes of Iceland - ‘bought 35 per cent. Can there be any doubt as to which division must remain paramount in the minds of those who must act in the interests of the Commonwealth? Should there be any uncertainty of action, when action is necessary, to protect those markets, which, apart from the consideration of Empire unity and relationship, have proved to be of the greatest value tO’ our producers ? There can be no doubt as to the course to be adopted. The answer to the query as to which countries represent the most valuable market to the Commonwealth, is the answer to those who ask what is the principle of the legislation which has caused these schedules to be tabled in the Senate.

Still, we must admit quite frankly that the adoption of this policy has not been achieved without loss. Adherence to the principle of protecting the interests of our major markets is directly responsible for the trade war which has raged between Australia and Japan. In support of that policy we have gambled with the future of the wool industry of Australia. In support of those princples, we have risked the ire of nations infinitely more powerful than ourselves, and, for the moment, we have undoubtedly sacrificed the goodwill of our most valuable market in the East.

Those losses could not be avoided. They are the debits that were certain to lie entered against one of our broad divisions of trade; but when there are debits there are often compensating credits. I believe that the ultimate credits which will be recorded in favour of that division of Australian trade, which is interwoven with the trade of the British Empire, will outweigh the debits. One thing is certain. Australia could not stand idly by and without protest allow Japan to “ mop up “ the British share of the Australian import textile trade.

The Leader of the Opposition (Senator Collings) believes that the Commonwealth should allow Japan to secure the whole of the textile trade which we now do with Great Britain.

Senator Brown:

– He did not say so.

Senator HARDY:

– He said that the old duties should have been retained, which would have resulted in the British manufacturers of textiles losing the whole of their Australian trade.

Why not ask ourselves the direct question of whether the action of the Government in imposing specific duties on Japanese textiles is justified ? If the action was not justified, the alternative was to permit the position to remain unchecked, and hand the balance of the fast diminishing British imports on a silver platter to Japan. A summary of the position, which clearly reveals the encroachment of Japan in the textile field to the detriment of Britain, is revealed by the following analysis of textile imports into Australia over the years 1926 to 1935:-

  1. There has been no alteration of the per capita imports of textiles into Australia.
  2. There has been an increase of 26,972,000 yards in total imports.
  3. There has been a fall of 61,840,000 yards of imports from the United Kingdom.
  4. There has been an increase of 1 07,415,000 yards in imports from Japan.

The textile import position last year was that Japan supplied 162,637,000 square yards as against 125,931,000 supplied by the United Kingdom. Further evidence as to the intention of the Japanese to capture the whole, of the textile imports into Australia is shown by the following facts which we cannot ignore : -

  1. Artificial silk imports from Japan increased from 8,430,000 yards in 1932 to 65,801,000 yards in 1935, with the announced intention to increase to 100,000,000 yards for the current year.
  2. In cottons, trade increased from Japan from 36,000,000 yards in 1932 to 86,634,000 yards in 1935.

It is certain that had steps not been taken to impose the specific duties against Japan the whole of the textile trade would have passed from Great Britain to J apan. The “ mopping up “ by Japan of the British textile imports into Australia is obvious even to the most bitter critic of the Government’s action. Is it still thought that the desire of the Government to retain for the United Kingdom a reasonable proportion of the Australian textile imports is unreasonable? The action of the Government is a tacit admission of the importance and value of the British market to Australia.

The only alternative to the imposition of specific duties intended to reserve for the United Kingdom at least some of the textile imports required by Australia was to permit the position to remain un checked. We should study for a moment the volume of Australian exports to the United Kingdom over the last few years, and, apart from the prejudices of the existing trade dispute, consider impartially the advantages of the custom of this country against the advantages of the custom of Japan. It is at least mathematical evidence that the action of the Government is correct - 1930- 31 United Kingdom purchased 50.67 percent. total Australian exports. 1931- 32 United Kingdom purchased 43.04 per cent. total Australian exports. 1932-33 United Kingdom purchased 55.70 per cent. total Australian exports. 1933-34 United Kingdom purchased 51.81 per cent. total Australian exports. 1934-35 United Kingdom purchased 56.26 per cent. total Australian exports.

In further support of what should be overwhelming evidence of the value of the United Kingdom market to Australia, it must be remembered that that is not only the best market, hut is also the only market for many of the products of our export industries. The importance of the United Kingdom market is forcibly demonstrated by the following figures : -

United Kingdom purchases 100 per cent. of all chilled beef exported from Australia.

United Kingdom purchases 98.7 per cent. of all lamb exported from Australia.

United Kingdom purchases 95.8 per cent. of all mutton exported from Australia.

United Kingdom purchases93 per cent. of all butter exported from Australia.

United Kingdom purchases95 per cent. of all wine exported from Australia.

United Kingdom purchases 99.6 per cent. of all eggs exported from Australia.

United Kingdom purchases 83 per cent. of all sugar exported from Australia.

They are points which the Government has had to consider in formulating its trade policy. Is it any wonder that we again state that the United Kingdom is not merely our best customer, but the only market for many Australian products? It is to preserve this market, to retain our right to sell, to establish firmly the principle of preference, that action has been taken to prevent the capture of the complete Australian textile trade by the Japanese. That, to my mind, is an unanswerable argument; yet the Leader of the Opposition says that this tariff is a provocative one. As I pointed out in the earlier part of my speech, the United Kingdom market for certain of our export commodities offers unlimited possibilities of expansion. In fact, it is the only market capable of expansion to any degree.

Senator Brown:

– Do I understand the honorable senator to say that the United Kingdom market offers unlimited possibilities of expansion ?

Senator HARDY:

– Yes. The honorable senator must remember that the value of the total requirements of the United Kingdom approximates £800,000,000 per annum. If the honorable senator studies the figures, he will find that last year the United Kingdom purchased 52 per cent, of all of its requirements from members of the British Empire, and the proportion is still growing. Last year, in spite of its enormous exports to the United Kingdom, Australia was only successful in supplying 6.5 per cent, of its total requirements. Surely that should convince the most sceptical that opportunity exists to increase our production and to win a greater share of the British market. The possibilities of expansion for export industries are indicated by a comparison of haphazard statistics extracted from English official publications on overseas trade. The United Kingdom buys annually for home consumption chilled beef valued at £14,563,000, yet Australia supplies only £268,000 worth, representing 1.8 per cent, of the total requirements. Who would deny that there is opportunity for unlimited expansion in that direction ?

Senator Brown:

– How much of it is supplied by the United Kingdom itself?

Senator HARDY:

– The figures which I have given relate to imports. The United Kingdom buys annually £226,829,000 worth of bacon, but Australia has no share in that trade at all. Of the £6,762,000 worth of cheese imported into the United Kingdom, Australia supplies only 6£ per cent. The United Kingdom buys annually £7,180,000 worth of eggs, yet Australia is only able to supply 6 per cent, of the total. These figures show where expansion possibilities lie. Similarly, the United Kingdom buys annually £17,214,000 worth of’ lamb and £40,906,000 worth of butter, of which Australia supplies 23 per cent, and 25^ per cent, respectively. Again, I ask, are we justified in risking our assured market, in which there is such opportunity for expansion, for the uncertainties of foreign trade? This is a problem which, in the welter of economic nationalism throughout the world, the Government cannot afford to ignore. There should, however, be a full and sincere appreciation of the sacrifice that Australia has made in the interests of the United Kingdom. That recognition must come not only from the members of the Commonwealth Government, but also from the members of the British Government. It is idle to deny that, in the event of the continuation of the dispute between Australia and Japan, the loss of trade will have repercussions in Australia. The wool industry, which means so much to this country, will be required to bear the brunt of the effects of the dispute. Realization of the extent of the sacrifice should have a dual result ; it should earn a greater measure of reciprocity from the United Kingdom, and it should spur on. the Government to continue to explore every channel to bring about an immediate settlement of the dispute. I have spoken of the credits; unpleasant though it may be to do so, it is well that I should also check up on the debits. If we do not make an impartial analysis of the effects of the trade diversion policy, we cannot discuss its merits. It cannot be denied that,, during the last five years, Japan has been the second-best customer possessed by Australia, and that to-day, as the result of the trade dispute, Japan has put up the shutters against Australian trade. The next point I wish to make is that, whereas last year Japan purchased 10.71 per cent, of Australia’s total exports, valued at £12,095,000, owing to the trade dispute, its purchases this year will be nil. The third point is that our trade with Japan over the last five years has resulted in a net balance of £4’2,0000000 in favour of Australia. That is also a part of the sacrifice which Australia has voluntarily made in favour of the United Kingdom. The final point I wish to make, and it is a very important one, is that Australia has sold to Japan during the last five years wool valued at £42,000,000. Is it any wonder that we ask for a keen appreciation of the facts? Is it any wonder that, while we re-affirm our determination to protect our Empire markets, we urge that every effort should be made to disentangle the threads of the trade dispute with Japan, which is a matter of regret for the whole of the people of the Commonwealth? The right to protect a reasonable proportion of the import textile market for the United Kingdom is unquestioned. I believe that every member of this Senate will agree with that. What is questioned, however, and what will continue to be questioned during this debate, is whether the specific duties imposed arbitrarily by the Government against Japan were unreasonably high. Will the duties entitle Japan to a reasonable proportion of the existing market which its trade with Australia warrants? Are the duties too harsh in character; in other words, do they still permit reasonable trading by Japan? The Government does not hesitate to state that the duties were intended only to reserve for the United Kingdom a reasonable proportion of the Australian textile trade. If the duties prevent a reasonable importation into Australia of Japanese textiles, will the Government lower the duties to enable Japanese manufacturers to secure a share of the market?

It has been the policy of this Government in the past to refer matters of major importance, requiring the imposition or the elimination of duties, to the Tariff Board for investigation and report. Why did the Government depart from this policy in respect of Japanese goods? Surely, in view of the issues at stake and of the possible repercussions in the wool industry, on which, it is freely admitted, Australian economy is based, the proposals to limit Japanese textiles could have been made the subject of detailed investigation by the Tariff Board. Would it not have been more satisfactory to have permitted the wool industry to submit its case? Would our action not have gained greater appreciation in the United Kingdom if the English textile manufacturers had been given an opportunity to state before the board their idea of what represented a reasonable proportion of the trade? Is this not a matter which concerns the Australian textile manufac turer, and would not his evidence have been of value? Would it not have been courteous, in view of the cordial relations that previously existed between Australia and Japan, to invite evidence from representatives of the Japanese textile industry? I am emphatically of the opinion, and I have not deviated from it throughout the dispute, that executive action should have been postponed in favour of Tariff Board action.

Senator Duncan-Hughes:

– The honorable senator still has an. opportunity to vote on that.

Senator HARDY:

– I cannot but believe that the imposition of duties without reference to the Tariff Board was not only a dangerous precedent for the Government to adopt, but also a direct negation of the policy which has been followed up to date. I do not advocate that the Government should swerve from the path upon which it has started. I am of opinion that the settlement of the dispute with Japan is in sight; it is only a matter of hours. I re-affirm my belief that it was necessary to take drastic action to divert trade into other channels, but I question the methods adopted by the Government in its endeavour to ensure that a reasonable proportion of the textile trade would be reserved for the United Kingdom. I urge that every effort should be exerted to bring about an agreement between the Commonwealth Government, the manufacturers of the United Kingdom, and the Government of Japan, as to what constitutes a reasonable proportion of the Australian textile market. It is well known that the eyes of the wool industry are upon the Government. The industry has watched the collapse of the wool sales to Japan with commendable restraint, but it now feels that a settlement of the dispute is long overdue. The wool market is firm and buoyant. The statistical position is sound, but it must be admitted that there would be much more buoyancy and much more soundness if Japan commenced to bid vigorously in the Australian market. History is crammed with stories of wars that have germinated from the seed bed of trade disputes. Australia is a con.tinent populated by a bare 7,000,000 people. Japan, our closest neighbour in the Pacific, is a powerful nation, and the

Japanese are a proud people. It is obvious that our relations should be of a friendly and cordial nature, and I feel sure that that is the Government’s most earnest desire. While I state frankly that I am not prepared to depart from the principles of Empire trade and Empire unity enunciated to-day, I sincerely trust that some way will be found out of the trade tangle, which must result in serious loss to both sides, and endanger the great wool industry of Australia.

Senator PAYNE:
Tasmania

– Every tariff schedule is important but the one now before us is especially so. My mind goes back to April last when we dealt with a tariff schedule which fixed the duties on certain British cotton textiles at such prohibitive rates that it was impossible for British manufacturers of these plain textile fabrics to trade with Australia. To-night we have before us a schedule, the object of which is said to be to enable British manufacturers to retain their trade in textiles with Australia. Yet, a few months ago we rendered it impossible for some of that trade to continue! In this respect the Government has shown a complete reversal of form.

I was pleased with the concluding portion of Senator Hardy’s speech, inwhich the honorable senator expressed regret that the Tariff Board had not been consulted in regard to the proposed alteration of duties. I go further, and say that I bitterly resent being asked to consider a schedule of tariff items, not one of which - I refer to textile fabrics-has been referred to the Tariff Board for report. I resent being asked to be a party to a violation of one of the most important laws on the statute-book. It was placed there in 1921, only after the fullest consideration, in order that alterations of the tariff should not be made at the whim or fancy of a party or a Ministry, but should be the outcome of careful consideration and investigation following the taking of evidence by a duly constituted body, which would report not only to the Minister but also to Parliament. That law, which is still on the statutebook, has been broken on two occasions - once by a previous government, and once by the present Government. I shall not be a party to violating that law and. therefore, I shall refuse to support any item in the schedule which has not been referred to the Tariff Board for report.

Senator Dein:

– The honorable senator does not always follow the Tariff Board’s r ecom mendations.

Senator PAYNE:

– Of course not. There is no compulsion to accept the board’s recommendations. Section 15 of the Tariff Board Act of 1921 provides -

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

  1. The necessity for new, increased or reduced duties, and deferment of existing or proposed deferred duties, and shall not take any action in respect of any of those matters until he has received the report of the board.

There has been no report by the Tariff Board on the proposal to increase the duty on the textiles which are included in this schedule.

Senator Dein:

– The honorable senator did not accept the board’s report on cement.

Senator PAYNE:

– I have never suggested that we must necessarily accept the board’s recommendations, but I do say that we are required by law to wait until the board’s report is to hand before we allow duties to be altered.

Senator Dein:

– If the board’s report is ignored, it cannot be of much value.

Senator PAYNE:

– The honorable senator’s interjection suggests that he places the Tariff Board above Parliament. We are not necessarily wrong in rejecting a recommendation of the board. To do so is not to act illegally. But we do act illegally if we take action either to reduce or increase duties before the board’s report has been received. I cannot see how the Government can justify its action. I shall not be a party to breaking a law that I have helped to make. In this respect the Government and the Parliament should set an example to the community. Laws should be just as binding on the Government as on the community.

I come now to the trade dispute with Japan. I had hoped that before this tariff schedule came before us, a trade agreement between this country and Japan would have been amicably arrived at. I hope that that will yet come to pass.

Senator Duncan-Hughes:

– It is a matter of hours now!

Senator PAYNE:

– The Government has been indiscreet for it could have adopted another course. In the special circumstances, a short measure could have been introduced to suspend, temporarily, the Tariff Board Act. That has not been done, and consequently a breach of the law has been committed.

Senator Hardy has shown the value of Australia’s trade with Japan, but there are other considerations which should weigh with us, particularly at this critical time, in the history of the world. Australia’s relations with Japan have always been most friendly; and surely the Government should have hesitated before taking action to provoke such a good customer. Already Australia had fairly heavy duties against Japanese goods. The tariff on artificial silk textiles was 20 per cent. British, and 40 per cent. foreign. That was a fairly substantial margin of preference, but had it been thought necessary to increase it, the proper plan would have been to call a conference and to start on the basis of the amicable relations which had existed for a number of years. I am convinced that if that had been done there would have been no dispute with Japan at all. In order to inform my mind regarding the trade dispute with J apan, I have read various articles in Australian newspapers and other publications, and in addition, publications issued in other countries. Probably there are no more reliable journals in relation to trade matters than the Economist and the Statist published in London. The Economist, of the 29th August, 1936, in an editorial, under the title “Australia’s Real Interests”, contained the following: -

What are the rights and wrongs of the unfortunate Australo- Japanese controversy? Australia argues that although Japan buys more than she sells, the Australo-Japanese trade is carried in Japanese ships, financed by Japanese bankers, and organized by Japanese merchants. This comes near to the heart of the matter, which is more political and nationalistic than economic. It is true that Mr. Lyons, the Commonwealth Prime Minister, says that Australia is not acting in any unfriendly spirit, but merely desires “ progressive two-way trade on an equitable basis “. Two-way trade is no self-evident virtue; but even if it were it would surely imply in the present case, that either Japan must sell more to or buy less from Australia, and neither result would really please Australia in her present mood. At the bottom of the controversy seems to be the desire to hold back the Japanese at all costs. That Australia realizes this to be a difficult attitude to maintain is evident from her recently expressed desire to revive British emigration. But even British emigration cannot change the physical characteristics of the country, and in the nottoolong run Australia’s tariff policy can only aggravate the very Japanese characteristics which she seems to fear. Great Britain, in turn, should be the first to recognize that her present policy of restricting imports of food supplies, in the interests of her own agriculturalists, does not make Australia’s problem any the easier. High tariffs and restriction ist policies, indeed, are doing more to restrict trade, and the world’s standard of living, than any increase in trade which would follow relaxation of discriminatory measures against the Japanese, whose right to live and do business is at least as fundamental as that of the Australians and the British. The world might well go to school again to re-learn the forgotten lesson that international trade is beneficial to all parties, not a gain for one country at the expense of another; and that its merit does not reside in trade restricted to a two-way channel.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– That is elementary.

Senator PAYNE:

– There is nothing elementary about it; it is very practicable. Under the heading of “AustraloJapanese Trade War”, the editor of the Economist writes -

Last May Australia introduced higher tariffs and a licence system on certain imported commodities (cotton, . rayon, tobacco, motor chassis, &c.) with the avowed aim of increasing British preference, aiding domestic manufacturers and diverting trade to “good customers “.

That term “ good customers “ has been used to-night by several honorable senators. The extract continues -

The Japanese, who were the principal potential sufferers, retaliated promptly by implementing their trade protection law, which had earlier been used against Canada, when she discriminated against Japanese goods. They threatened to cut their imports of Australian wool by two-thirds and to make up one-third of the difference by buying from other producers, and the other third by using artificial fibre. Manchuria faithfully followed suit. Wheat, wool and flour may now be imported into Japan only under licence, and certain other Australian imports ore subject to an additional duty of 50 per cent. ad valorem. Neither party has yet seen fit to sign a truce in this unhappy war, although both profess to be willing to negotiate. The position is the more regrettable because Japan and Australia are eminently fitted, by natural endowment, to do a complementary trade to their mutual benefit. Japan lias a densely crowded population, very little agricultural land, and a deficiency of certain types of foodstuffs and raw materials which Australia can profitably supply. Australia has large territories suited only for pastoral and agricultural uses. Japan must live by manufacturing, Australia by producing raw materials. In past years Australia has found her Japanese trade highly profitable, and, although Japanese exports to Aus.l, al ia have made rapid progress in recent years, her purchases from Australia have increased by a greater absolute amount. If, by a good customer Australia means a customer who buys more than he sells, then Japan can justly claim to be one of Australia’s very best customers. It is, of course, part of the Australian claim that Japan has adopted underhand means to increase her sales, particularly of rayon, in Australia, and that the Japanese are undermining the Australian standard of living, taking trade away from Great Britain. Although the terms of trade are moving in Australia’s favour, giving her more imports for a given quantity of exports, she complains of “ unfair Japanese competition “. The competitive position in the Australian import market between Japan and Great Britain is illustrated for two groups of commodities by these figures: -

The most striking point about these returns is the great reduction in the total value of sales, rather than any great increase in the Japanese figures.

These opinions are written by nien who make a life study of such matters as honorable senators have been discussing tonight. Authorities, such as librarians and economists, regard this journal as being second to none in the British Empire for reliability on economic subjects.

Senator Hardy stated that Australia could not stand idly by and watch Japan “ mop up “ the British textile industry. Other statements have also been made to-night in regard to the possibility of J apan “ mopping up “ the trade that Britain does with Australia in cotton textiles. Ever since last May statements of that character have been made ad nauseam. In connexion with this subject I have obtained comparative figures showing the imports of textile materials from Great Britain and Japan in 1934-35. The ordinary cotton textile materials in which every housewife is interested - the grey unbleached cotton textiles, white bleached cotton textiles, and dyed or printed cotton textiles - are included in these statistics. For 1934-35, the imports into Australia of these classes of goods totalled 157,250,853 yards. Of that quantity, 103,569,068 yards were imported from the United Kingdom and only 50,372,322 yards from Japan.

Senator Guthrie:

– The position has altered since 1934-35.

Senator PAYNE:

– .That was only a year ago.

Senator Guthrie:

– But since that time Japan has swamped the Australian market with cheap textiles.

Senator PAYNE:

– Japan has not done so ; moreover, it cannot do so with many lines. British manufacturers can put on the’ market cotton textiles of such value that they would not be superseded by the Japanese article. In this respect, Great Britain can always maintain its trade with Australia in plain cotton textile fabrics because of their superior quality.

Senator Brown:

– That is textiles of the finer quality.

Senator PAYNE:

– The difference of price between Japanese and British textiles, as the result of the British preferential tariff, is almost infinitesimal. I refer now specifically to sheetings and calico bleached goods. Who dares to say that Great Britain is becoming so decadent that it cannot manufacture for export, with a reasonable measure of protection, textile fabrics of fine quality?

Senator Guthrie:

– It cannot do so against the price of the goods with which Japan was swamping the Australian market.

Senator PAYNE:

– Apparently, the honorable senator has not sufficient sense to discriminate between cheap rayon materials and cotton fabrics. He refers to rayon priced at 4£d. a yard.

Senator Guthrie:

– Why does not the honorable senator obtain up-to-date figures instead of quoting old information?

Senator PAYNE:

– Figures relating to 1934-35 are not old.

Senator Guthrie:

– In this instance they are old, because it has only been in the last year that Japan has flooded the Australian market.

Senator PAYNE:

– The market has been flooded only with cheap rayon materials. Has that been disastrous to Australia ?

Senator Sir George Pearce:

– It was very nearly disastrous to Great Britain.

Senator PAYNE:

– The rayons imported from Great Britain were totally different in quality from the Japanese materials. They come within an altogether different category; that is well known to the trade. The British manufacturer of a good type of rayon can always command a satisfactory trade in Australia. The enormous quantity of cheap rayon imported during the last few years into Australia furnished for the first time in our history an opportunity to the poorer classes to clothe themselves decently and attractively. On that material a customs duty of 50 per cent, was collected.

Senator Duncan-Hughes:

– Apparently, the poorer classes are not to be considered in this matter.

Senator PAYNE:

– When this cheap rayon material was brought within their reach, their standard of living was improved. Is it a crime for the poorer classes to be able to clothe themselves decently, and for the younger people to gown themselves attractively when attending a party?

Senator Sir George Pearce:

– What would have happened if Great Britain had employed that contention in . regard to Australian butter and other commodities?

Senator PAYNE:

– The ability to purchase these cheap materials has proved a. boon to our poorer classes. Moreover, Australia was not losing by the importation of these fabrics. Actually, our trade expanded and our customs revenue increased.

Senator Dein:

– Does the honorable senator apply that contention to all Japanese manufactures ?

Senator PAYNE:

– I am referring to these two special items.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– How long should that trade last?

Senator PAYNE:

– For a reasonable time. I bring under the notice of honorable senators, particularly Senator Guthrie, an enlightening fact. Quite recently I learnt, not from Japanese but from British sources, that Lancashire mills are now using more efficient looms manufactured in Japan. By this means they are able to turn out articles of better value and retain their trade in these materials with Australia.

Senator Leckie:

– What is the honorable senator’s authority for that statement ?

Senator PAYNE:

– British newspapers. Honorable senators should not overlook the fact that the Japanese are human like ourselves. A population of 70,000,000 is living on a land only one and a half times the size of New Zealand and only 20 per cent, of it is arable. In order to live they must manufacture; they have no alternative. Incidentally, the white races were the cause of the Japanese becoming an industrial nation.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– Why?

Senator PAYNE:

– Before they became manufacturers for export they limited their population. They desired to have no contact with the outside world ; they wished to live unto themselves. But at the point of the gun they were compelled to open their ports to the white races, who wanted new and bigger markets for their products. In selfdefence, the Japanese were then obliged to take up manufacturing. I hold no brief for Japan as against Australia or the United Kingdom.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– It certainly sounds like it.

Senator PAYNE:

– If, for simply stating certain facts, I am accused of holding a brief for another country, I can only pity the intelligence of the honorable senator who made that interjection. I am honest in the statement that I hold no brief for Japan against Great Britain. I am, and always shall be, a Britisher first, in my attitude to the tariff. No one has protested more vigorously than I have against the cruel -treatment to which British manufacturers have been subjected through the erection of an Austialian tariff wall which it was impossible* for them to climb.

Senator Guthrie:

– Is not the honorable senator in favour of giving them preference now as against Japan?

Senator PAYNE:

– Certainly, but not preference to the extent proposed, which is practically prohibition against Japan. I heard the Minister say to-day that the Government did not want to shut the Japanese out, and that all that was aimed at was to raise the price of Japanese textiles to a reasonable figure. I resent statements that have been made in the press and in this chamber regarding the conditions existing in Japan. I heard it said to-night that Japanese conditions were such as neither British nor Australians would tolerate. What do people mean by a statement of that kind ? Do they know what the conditions of factory operatives are in Japan? Have they seen the Japanese factories working? If I could take honorable senators to Japan on a tour of inspection, they would return with a vastly different outlook.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– How long was the honorable senator in Japan ?

Senator PAYNE:

– Sufficiently long to learn much about its factories. In fact, I gained admission to places which very few people are privileged to enter. I have been through the national silk conditioning warehouse of Japan. This is a marvellous place, not only from the point of view of efficiency and cleanliness, and the general conditions under which over 1,000 operatives work, but also for the manner in which inspections are made of this commodity, silk, in the production of which Japan is pre-eminent. Not a ba!?) of silk is allowed to leave Japan unless it is right up to the standard claimed for it. It is subjected to every possible test imaginable to ensure that the buyer can rely upon its quality. With regard to many of the factories in which the textiles are made, I do not think there is a building in Australia which can show better conditions. There are hundreds of factories in Osaka.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– What about the difference in the pay?

Senator PAYNE:

– Their standard of living is different from ours. Their wages purchase for them all that they require, and possibly they have a larger margin at the end of the month than many of our workers can show. They have all that they need, and no one could ask for more. Not only do their wages cover food, clothing, and shelter, but in their factory life they get many additional privileges, such as recreation, educational training, medical attention, and nursing, for which our factory operatives have to pay.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– The cannibals of the South Sea Islands have all they need.

Senator PAYNE:

– The Japanese are not savages. Their standard of education and culture is high. ‘

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– I do not doubt it. I did not infer that Japanese were savages. I was simply showing that the honorable senator’s argument was not logical.

Senator PAYNE:

– The wages of the Japanese workers are ample for their requirements. If we give- our people a wage of which that can be said, we consider that we have done well. It is admitted that the Japanese standards of food and drink are not the same as ours. I want to disabuse the minds of honorable senators of the idea that the Japanese factory workers are living under wretched conditions. They are not. They are working under excellent conditions, in up-to-date factories. No machinery is retained which is even approaching obsolescence. If it is not highly efficient it is replaced by something as efficient as human skill can make it. I found the same state of things in the newspaper offices of Japan. There they cannot use the linotype machine, because their alphabet has over 500 characters, but their efficiency is marvellous. I came back from Japan with a very different outlook, realizing that -its people were highly efficient .and industrialized. The units in every industry give their best to the callings in which they are engaged. That was a special feature which I noticed everywhere. Their operatives, male and female, seemed particularly interested in their work, and apparently were very happy. I never saw a scowling face in Japan. I saw no sign of undernourishment, and I never saw a fat, bloated Japanese. I feel that I must speak plainly to the Senate regarding our fiscal policy towards Japan, a country with which we have had for years such happy relations. I shall conclude by repeating my statement that I shall not vote for any item which I consider does not comply with the provisions of the Tariff Board Act. I think I am justified in taking up this attitude, because 1 will not be a party to breaking that law, which was put on the statute-book after much careful consideration.

Senator GUTHRIE:
Victoria

– I shall deal first with Senator Collings tirade against the British Empire and the efficiency of the British people. The honorable senator laid great stress on the fact that his policy was preference to Australia first, preference to Great Britain next, and preference to customer countries in the third place. With that I quite agree. It has always been my policy and I think it has been the policy of the Government. The honorable senator tried to make it appear that it was the policy not of the Government, but of the Labour party, and that the Government had done nothing to increase employment in Australia or to better the conditions of the workers. His statements were far from the truth. There is no better indication of the efficiency of a government than the employment figures. When this Government took office, the number of registered unionists out of employment in Australia was the largest in our history, namely, 30 per cent. At the end of October last it was down to 8.5 per cent., which is actually below normal. It was 14.1 per cent, in January of this year, and at the end of October it was only 8.5 per cent.

Senator Badman:

– Those figures do not correspond with the figures given to me to-day.

Senator GUTHRIE:

– My figures are official. There has been a great increase in manufacturing and employment in Australia during the regime of the Government, which is .a protectionist administration, giving preference, just as I do, first to the Australian people, secondly to Great Britain, as it should, thirdly to customer countries, and fourth in order come non-customer countries. The weekly wages paid in the factories of Australia had risen at the end of September, 1936, to £790,000, which is an Australian record. The employment figures are better than they have been at any other time within my recollection. As regards the benefit that we have received from Great Britain and the Ottawa agreement, I would remind honorable senators who talk so much about the benefit to Australia of having Japan as a market - and I admit that Japan is our second best market for wool - that the old Mother Country is far and away our best customer, now as always. It is still our best customer for wool and also for wheat, and irrespective of those two great primary products, it .actually buys from Australia over 90 per cent, of all our other exports. As regards the intention of the Government to establish further factories in Australia, thus giving additional employment, to show the Senate how enthusiastic and genuine Ministers are in that direction, I point to the steps they are taking to encourage the building of aeroplanes in Australia. These machines are necessary for the national well-being. I also point to their desire and almost determination to have motor cars built in Australia. Even if the industry be not economically sound, it is from the point of view of defence essential to build both aeroplanes and motor cars within our own borders. We have the raw products here, we have the wherewithal to do the work, and we have the skilled Australian workmen. I am glad that the Government has, although almost at the eleventh hour, seen the wisdom of amending the reference to the Tariff Board of the motor car building policy by including the economic aspect. The Tariff Board is constituted of unbiased men, sound protectionists, who can take expert evidence from all sides and present to honorable senators a summary of the facts. This enables us to form a proper judgment, because members of Parliament cannot possibly be experts in all these matters. In the last resort, we have to decide on the desirability or otherwise of establishing an industry, and on the sacrifices which it is politic to make in the way of imposing high tariff rates, which naturally increase the cost of a commodity, or by paying a high bounty.

I arn pleased that the Government has not precipitately attempted to force people to build motor cars here. Desirable as it is that we should make our own chassis and engines, we should ascertain first whether it is an economic possibility ; but even if it costs the country something, it is most advisable for defence reasons alone that we should build aeroplanes, motor cars and motor trucks in Australia. Meanwhile the Government would be unwise to attempt to force the manufacture of motor cars in Australia because, from inquiries I have already made, I do not think that such firms as General Motors - Holdens Limited, or the Ford Company would be agreeable to risk the investment of huge sums of money necessary to produce the relatively small number of motor vehicles used in Australia. Companies such as those I have mentioned, consider that a bounty of £30 on each engine in the first year diminishing until it vanished in, I think, five years, is insufficiently attractive to warrant the outlay of the huge amount of capital required to undertake production on an economic basis. .1 understand that this subject has been referred to the Tariff Board for investigation and report, and doubtless its observations and recommendations will be of interest. I do not think that the Government has received a definite assurance from any company that if the duties in this schedule be imposed, it will undertake the construction of complete motor vehicles in Australia.

The establishment of economic secondary industries in the Commonwealth is of vital importance, not only because they provide additional employment, but also from a defence view-point. Important as is the encouragement of such secondary production, it is over-shadowed by the necessity for producing oil from coal or from shale. Even if fuel oil cannot be produced economically for commercial purposes, a determined effort should be made to produce it for aeroplanes and motor vehicles used in time of emergency.

The PRESIDENT (Senator the Hon. P. J. Lynch). - Does the honorable senator propose to connect his remarks with the subject-matter of the hill?

Senator GUTHRIE:

– The production of fuel oil is essential, more particularly for defence purposes.

The trade diversion policy, which came into operation on the 22nd May last, has been commented upon by many influential authorities, more particularly as it has a direct bearing on that great and friendly country of Japan. I realize that the Government is fully aware of the fact, that Japan is the second best customer for our wool which is our most important primary product. The Prime Minister (Mr. Lyons) in an excellent speech over the air said -

Let no one think for a moment that we have lost sight of the dominating importance of wool in our national affairs. The Government is in a special position to know how profoundly wool prices affect Australia’s wellbeing.

Senator Duncan-Hughes:

– This schedule does not support that contention.

Senator GUTHRIE:

– I am quoting the words of the Prime Minister, who has emphasized from time to time the overwhelming importance of the wool industry to Australia. Senator Payne, who said that the action of the Government in imposing unnecessarily high duties on Japanese piece-goods and rayon is unjustified, endeavoured to show that Japan has not flooded the Australian market with its products. Every one knows that, during the last twelve months, Japan has reduced the price of its cotton piece-goods and rayon by more than one-half, and has therefore made it absolutely impossible for Great Britain to compete in the Australian market. During the last twelve months, Japan has secured 90 per cent, of the Australian trade in silk, but that is not surprising in view of the fact that that country excels in the production and manufacture of silk. Japan has also captured 83 per cent, of the Australian rayon trade and a tremendous proportion of the trade in cotton piecegoods. This has been achieved not at the expense of foreign countries, but to the detriment of British manufacturers. If we discontinue importing cotton piecegoods from Great Britain - a most important item of export to Australia, amounting to over £3,000,000 per annum - what are we to buy from Britain? Japan will flood this market with goods manufactured under conditions and at wages totally different from those prevailing in Australia. How can Great Britain continue to give the liberal preference to our primary products if we cannot continue to purchase its manufactures? Apart from wool and wheat, Britain purchases over 90 per cent, of our exports. British interests which have invested as much money in Argentina as they have in Australia have given absolute preference to Australian frozen and ‘ chilled beef, mutton and lamb. Since the adoption of the Ottawa agreement, the volume of trade in that respect has increased considerably, and last year 4,000,000 carcasses of lamb were exported to Great Britain at prices ranging between 17s. 6d. and 20s. a carcase. It is expected that this year a similar number of carcases will be exported, and that the price will be nearer 30s. than 20s. a carcase. Great Britain extends substantial preference to Australia in respect of butter, dried fruits, and other primary products, and it is only reasonable that it should expect some of our trade in return. Some of the statements made by Senator Payne were incorrect, as the flooding of the Australian market by Japan became accentuated only during the last twelve months. Throughout the whole of the trade negotiations with Japan, the Commonwealth has objected not so much to the quantity of imports from Japan as to the reduction of values. I understand that the Government has provided for a reasonable quota for goodcustomer countries, and will deal with, them on the most liberal terms. I agree with Senator Payne that Japanese manufacturers and operatives are extraordinarily efficient, and work very hard regardless of the wages they are paid, or the conditions under which they labour. Moreover, their mechanical equipment is highly efficient, and a Japanese has recently invented a Toyoda cotton loom which has been pronounced to be the finest in the world. The Japanese are particularly efficient in converting raw materials into finished products, and as they have been so proficient in producing cotton piece-goods and rayon at ridiculously low prices, before long they could commence producing woollen piece- goods, and in that way compel Australian woollen manufacturers to close their doors. The freight on wool from Australia to Japan is comparatively low, and when allowance is made for the wages paid and the conditions of labour, the Japanese could buy larger quantities of our wool, manufacture it into woollen textiles, and export .them to Australia where they would enter into most serious competition with similar goods manufactured in Australia.

Senator Duncan-Hughes:

– Who supplied Australia with woollen goods before they were manufactured here?

Senator GUTHRIE:

– Great Britain and other countries; but I do not think Senator Duncan-Hughes suggests that the protective duties imposed to assist the development of the Australian woollen manufacturing industry have not been of inestimable benefit to the Commonwealth. Local woollen manufacturers purchase up to 300,000 bales annually of our total wool clip, employ thousands of operatives, and produce woollen goods from women’s light-weight dress goods to the heaviest rugs equal to those manufactured in any factories in the world. In view of the customs duties imposed upon Australian products in Japan, I am surprised that Senator Payne considers that the duties we impose upon Japanese manufactures are too high. The Japanese rates are, in some cases, at least double those which we impose. If we exported some of our manufactured goods to Japan we should soon find out how they would be treated. Although the duty imposed by the United States of America on Japanese textiles is heavier .than those which we impose, the American market was invaded with cheap woollen overcoatings. Within two years, the export of woollen textiles from Japan to the United States of America increased fourfold. An extract from the Literary Digest, published in the United States of America, reads -

Elsewhere in the world the industrial revolution has meant a general rise in the standard of living which has meant in turn a general increase in wage scales which has meant higher costs. But in Japan it has not. The agricultural half of the population too numerous to live fatly upon Japan’s limited farm lands and long habituated to extreme frugality, has been held nearly at the level it knew 400 years ago. And it has held down tho living standards of the rest of the country since it makes constantly available a vast reservoir of extremely cheap labour eager to work in industry at any wage above the bare subsistence level of the farms.

Cheap labour is available in Japan owing to the fact that half of the Japanese live on farms where the standard of living is no higher than it was 400 years ago. The efficiency of the Japanese people cannot be denied. The article continues -

Again there is Japan’s efficiency in the use of machinery in producing textiles, her biggest export. She has developed the Toyoda loom*, one of the world’s best. Japan’s durable and economic formula for mixing American cotton and cheaper Indian cotton in textiles is a secret which weavers throughout the world have been anxious, and found it impossible, to learn. It would be entirely false to think that Japan’s industries are all large scale. In fact 60 .per cent, of her industrial workers are in tiny factories employing less than five souls. Unknown hundreds of thousands of little wooden factories in the home where cash wages as low as 30 cents a month are paid or where father, mother, sons and daughters labour unremittingly for a most meagre return at all times much less than 64 cents a day average to the industrial factory worker. Japan has thus an industrialization which must sell its goods abroad since her domestic market is incapable of buying her industrial products.

It is absurd for Senator Payne to say that we are not, justified in protecting our local industries in the manner proposed, and that we should not expect to obtain larger quantities of cotton piece-goods and rayon from the Mother Country. I realize, of course, that Japan is one of Australia’s best customers. I admit that like all wool-growers I am losing money on my wool at the present time by reason of the fact that the Japanese are out of the Australian wool market.

Senator Duncan-Hughes:

– So are many people in Australia.

Senator GUTHRIE:

– It is of no use to say that the wool-growers have not behaved splendidly during the dispute with Japan; they have behaved magnificiently; but everybody wishes to see the trade dispute brought to an end. It is futile for Ministers or anybody else to tell me that, despite the absence of Japanese buyers from the Australian wool market, wool-growers are getting as much for their product as they otherwise would. I have taken the trouble to ascertain the prices obtained for various classes of wool at the sales in South Africa and New Zealand yesterday. When purchasing wool you pay for the wool only and not for the dirt and yoke. Though it cannot be denied that the woolgrowers of South Africa and New Zealand are procuring a higher price than obtains for similar wools in Australia it is not so much higher as some people would have us believe. At the wool sales in New Zealand yesterday and the day before the Japanese buyers were reported to have “stormed the market”; they purchased 7,500 bales out of a total of 15,000 bales offered.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– That was not a very good test.

Senator GUTHRIE:

– Yes ; it was a very good test of New Zealand wools; but the fact that the New Zealand growers got 26d. for greasy half-bred wools does not mean much. It is the clean cost of wools comparable with similar wools sold in Australia that must be taken into consideration. Though the New Zealand price has been definitely higher, as I have said it has not been anything like what might appear at first glance. The same remark applies to the South African sales. When the Japanese buyers operated in the South African wool market they displaced French buyers who were forced to come to Australia for their requirements; their operations in the Australian market were partly responsible for the maintenance of the price for merino wool in this country. Similarly, the operations of the Japanese buyers in the New Zealand market will drive a lot of Yorkshire orders for cross-bred wools to Australia. There is naturally a certain lag, but it does not matter nearly so much as people think.

I commend the Australian wool-growers for the way they have behaved during the course of the trade dispute with Japan; there has been very little complaining considering that there are 100,000 growers in Australia. Senator Payne has said that we have treated’ Japan very badly; from the honorable senator’s remarks anybody would think that the Government had singled out Japan for particularly bad treatment. The facts are that the duty imposed by the Australian Government on imports of artificial sills and rayon from Japan is 9d. a square yard, whereas in Canada it is 9Jd., in France 9-£d., in the United Kingdom 10d., and in the United States of America 11½d. Of all the countries I know that import artificial silk goods from Japan Australia imposes the lowest duty. The Government did not suggest the cutting down of the total value of imports of such goods from Japan, but only a reduction of the volume, because Japanese manufacturers are exporting hundreds of millions of yards of artificial silk goods at prices against which nobody can compete. In retaliation for the imposition of the Australian duties on textiles, Japan completely boycotted Australian products; it refused to take either wheat or wool. The wheat trade with Japan does not mean as much as honorable senators believe, because, although Japan buys a certain quantity of Australian wheat, it is gristed and the flour exported to eastern countries where it is sold in competition with Australian flour. Very little wheat is used in Japan for domestic purposes. Japan is, I admit, our second best customer for wool, and there is every probability that, with its 90,000,000 people using wool to a greater extent each year, it will soon become Australia’s best customer for that commodity. It is only 30 years ago since I sold on behalf of the firm which employed me 2,000 bales of wool to Japan. It seems likely that in the near future Japan will be purchasing from Australia 1,000,000 bales of wool or 30 per cent, of the total production of wool in this country.

Senator Duncan-Hughes:

– Will the honorable senator explain why, if this policy is sound, the Government is not standing up to it ?

Senator GUTHRIE:

– I think the Government is standing up to it. As a wool-grower and a primary producer, I am 100 per cent, behind the Government in this policy.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– The honorable senator is about the only one.

Senator GUTHRIE:

– The Government’s policy is Australia first, Britain second, and our good customer countries next. I am not concerned whether the quota in respect of artificial silk goods is fixed at 100,000,000 or 120,000,000 or 125,000,000 square yards; it will enable the Japanese manufacturers to send more artificial silk into this country than comes in from the Old Country. That artificial silk will be imported at a duty lower than that imposed against Japan by any other country. If that is not friendly trading, I do not know what is! What do Honorable senators expect the Government to’ do? I arn very anxious for a satisfactory settlement of this dispute; but I do not think that it is the fault of the Commonwealth Government that an amicable arrangement has not yet been reached.

Senator BROWN:
Queensland

– I deplore the fact that the Senate is so unwise as to be sitting at this late hour of the night, when all honorable senators, should be in bed enjoying an honest sleep’. Seeing that it is so, however, and that honorable senators are to continue to talk for some time yet, I shall endeavour to deal with the bill now before the Senate from the Labour party’s point of view. From the remarks which have been passed by a number of honorable senators who have already spoken to the bill, a wrong impression as to the attitude of the Labour party is likely to be created outside of this Parliament. I shall not do as an old friend of mine in Canada did many years ago. We were dealing with certain problems, and whenever we got into difficulties he expounded the philosophy of Josef Dietezgen, that mobile stability and stable motion constitute the reconciling contradiction that reconciles all contradictions. I do not know whether honorable senators can understand that or not; possibly if they can it may help them to explain many of the contradictions we find in our modern economic system. I am pleased to know that the Minister in charge of the bill is being brought to a realization that we are facing . certain very revolutionary changes at the present time. The honorable senator has admitted that the way to recovery is not along the old track. That, at any rate, is something. He went on to discuss and condemn self-sufficiency, and . pointed out that history does not encourage us to return to the old ways of international trade.

Yet, while on the one hand the Government deplores the development of selfsufficiency, on the other it brings down a measure which has for its very aim selfsufficiency, that is to say, within the bounds of the Empire. As I have pointed out on many occasions, this development will go on until most of our needs are manufactured in this country by Australian workmen. After all, if we limit our trade with Japan and with other countries, including the United States of America, and confine it within the bounds of the Empire, gradually the stage will be reached at which it will be said that the only way out of the difficulty is further to limit the Australian market to Australians. I have said repeatedly that the way we are travelling will not lead us to a solution of our problems. The Minister pointed out that raw material countries were giving up triangular trade, and reverting to a system of barter. If I remember rightly, he instanced the barter agreements entered into with other countries by Germany, and used that as an argument why we should cease to concern ourselves with triangular trade. As a matter of fact, we cannot do so, because world trade is triangular. Bilateral trade agreements cannot be wholly successful because, when all is said and done, trade really means the exchange of commodities, not merely between one country and another, but between one country and the rest of the world. The Minister went on to say that the Government decided on its fiscal policy because circumstances compelled it to do so, and that it would mean an increase of work for immigrants. I question very much whether the mere diversion of trade will result in any improvement of the employment position. I could concede the logic of the honorable senator’s argument had he said that Australian trade should be developed within the borders of Australia; that would, for the time being, increase employment in this country ; but mere diversion of trade from, say, Japan to Great Britain will not increase our powers of employment.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The honorable senator has misunderstood me; I used that argument in reference to the establishment of the motor car industry.

Senator BROWN:

– The Minister evidently does not contend that the mere diversion of trade from Japan and the United States of America to Great Britain will increase employment in this country.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– It will not increase it ; but it will at least maintain it at its present level.

Senator BROWN:

– I am sorry that I have misunderstood the honorable senator. I certainly do not hold that the mere diversion of trade from one channel to another will increase employment. That argument should not be used to influence the people of Australia, because it is grossly misleading. If by changing our tariff policy, it is possible to build up in Australia new factories, utilizing new machinery, while the factories are being built and the new machinery installed, a certain amount of employment will be provided for our people; but if the world is taken as an economic unit that policy will not solve the problem of unemployment generally.

Sitting suspended from 11.30 p.m. to 12.15 a.m. (Thursday).

Thursday3, December 1936

Senator BROWN:

– I imagine that one reason for the trade diversion policy was the knowledge that Australia has to pay interest amounting to £30,000,000 a year to the Old Country. MrForgan Smith, the Premier of Queensland, when in London, told the authorities there that if Britain did not purchase Australian goods, our debts could not be paid. How much the servicing of our debt has had to do with the diversion of trade I do not know, but it is just as well for the public to realize that if Australia’s debts are to be paid, Britain must trade with Australia.

Insofar as this measure will assist to develop Australian industries, the Labour party will support it. That party has always stood for the encouragement and development of the primary and secondary industries of this country. The policy now being pursued by the Government is at variance with that which has been followed in the past. The Labour party has had to fight vigorously against measures which were not in the best interest of Australian industry. It is generally admitted that Japanese textiles had secured a hig hold of the Australian market. Only a few weeks ago the Labour party fought strenuously for an alteration of the tariff to give assistance to an. Australian industry. I refer to the manufacture of denims and jeans. Honorable senators will remember that certain cloths were subject to varying duties according to whether or not they weighed 6 oz. to the square yard. Japanese manufacturers had beaten their British competitors by sending to Australia cloth weighing 6 oz. to the square yard and dyeing and sizing it in Australia, thereby being in a position to sell it at a price with which Australian and British manufacturers could not compete. When the Labour party pointed out that the weight, instead of being 6 oz. should be 4 oz. or even 3 oz. to the square yard, its proposal met with strong opposition from the Government and its supporters. It is now clear that, had the Government accepted the proposal of the Opposition, Japanese competition in the cloths referred to would have been less powerful, and Australian manufacturers could have competed with Japanese goods more satisfactorily.

I come now to motor car engines. Everyone will agree that Australia should make every effort to produce its own requirements of motor car engines, but whilst we on this side commend the efforts that are being made in that direction, we cannot forget that it is only a year or two since we battled vigorously but unsuccessfully for an Australian industry established in Queensland and Victoria, namely, the making of Diesel engines. At that time I had with me a. number of patterns made by ‘Walker Brothers Limited of Maryborough, Queensland, and I stressed the need for an alteration of the tariff to enable that and other engineering firms to compete with Diesel engines imported from other countries. Notwithstanding the sound arguments advanced, the Government, in its lack of wisdom, would not consent to an amendment of the tariff to enable Australian engineering firms to compete with overseas rivals. Had the Govern7nent listened to the advice of the Labour party, the present provocative and discriminatory tariff, which came as a bolt from the blue, would not have been necessary. In this matter I wish to make my’ attitude clear. I agree that Australia has every right to say whether or not certain goods shall enter this country. No other country has a right to dictate to Australia in this connexion. Nevertheless, I am of the opinion that the Government would have been wiser had it followed a policy which, while not being provocative, would have assisted * to develop an Australian industry, and made this country less dependent on the rest of the world. There is a vast difference between a policy which provides for the gradual development and encouragement of Australian industries, and a provocative policy such as is followed by the Government. Its policy having failed, the Government comes along with a policy of prohibitions and embargoes.

Senator Hardy:

– Was not the Scullin tariff of 1929 provocative?

Senator BROWN:

– That policy was rendered necessary by the conditions which prevailed at the time. The present High Commissioner for Australia (Mr. Bruce) has admitted that no other course was open to the Scullin Government. The position is entirely different to-day. Had the present Government been wise, it would have given an impetus to Australian industry without antagonizing Japan and the United States of America. It could have avoided action which has endangered the wool industry of this country. Among the wool-growers of Queensland, and probably in the other States also, there is strong condemnation of the foolish policy followed by the Government.

Senator Hardy:

– How much has the price of wool fallen recently?

Senator BROWN:

- .Senator Guthrie has already dealt with that subject. The Government has, undoubtedly, been lucky in regard to the price of wool. It should have exercised intelligence, and avoided the risks associated with its discriminatory trade policy. We have been told on numerous occasions, that the Government was determined to alter the balance of trade, and would not trade as heretofore with bad customer countries. The United States of America was considered to be a bad customer of Australia because the value of its purchases . from Australia was far below that of its sales to Australia. But that argument could not be applied to Japan. Figures have frequently been quoted to show that Australia had a favorable trade balance with Japan, whereas the reverse was true in respect of the United States of America. When the present trade diversion policy was put into operation, Australia’s trade with the United States of America was undergoing a change. As a result of a campaign of publicity in the United States of America, Australia’s trade with that country began to increase, and in 1935 Australia’s exports to America were valued at £5,800,000. The Telegraphthe tory newspaper of Brisbane - stated ihat, just as the United States of America was becoming a better customer, the Government saw fit to administer disciplinary measures as a punishment for having been a bad customer previously. That was most unwise. Australia’s trade with the United States of America has varied considerably, but in certain respects it has shown an improvement in recentyears, particularly in regard to skins of various kinds. Members of the Pacific Coast Chamber of Commerce have expressed the opinion that there is scope for a big expansion of trade with Australia in regard to various commodities, including coke, hides and wine, if Australia will make a determined effort to develop that trade.

Recently I asked a question as to the reason why Australia was not represented at a convention recently held at Chicago. Apparently, because of the determination of die Government to pursue its policy of trade discrimination, it would not send a representative to the convention. The Labour party does not stand for such action, and it condemns the Government for not having done its best for Australia. A good deal has been said about Parliament not having been consulted before the new policy was put into operation. Parliament has been ignored. In 1934 Australia sent a goodwill mission to Japan. Its leader was Sir John Latham, who carried out his duties to the satisfaction of Australia. The good impression then created has not remained. The Government has told us that if we will exer- cise patience the trade dispute with Japan will be settled. “We were told in July last that the Japanese were prepared to listen to reason, and that negotiations with that country would be resumed. The negotiations are still proceeding. It is true that they were held up for about nine and a half months while the Minister directing negotiations for trade treaties (Sir Henry Gullett) had a trip to Europe. The Government, which ignored Parliament, conferred with representatives of wool-growers before taking action. I have no objection to the Government consulting various institutions, associations and individuals who may be affected by its policy. At the same time it is ungracious of the Government practically to ignore the Parliament in this matter. Mr. J. S. Teasdale, in his presidential address to the Primary Producers Association of Western Australia, on the 11th August - and five federal members, supporters of the Government, were present - said -

Wool-growers have been seriously concerned as to the effect on prices at the forthcoming sales should Japan withdraw from the market . . The subject was discussed at the Australian Woolgrowers Council meeting in June, at which you were represented by Mr. Hitchins.

Mr. Hitchins had been “seriously concerned “ to the extent of saying that “Bradford threatened us with much more drastic treatment than Japan has done; the Australian people are again to be sacrificed to Bradford “ -

Sir Henry Gullett gave details of the reasons for the Government policy, and outlined the progress of negotiations. He asked the organizations there present to avoid public controversy pending finalization of the negotiations.

But, Mr. Teasdale proceeded, “the negotiations have been more protracted than expected, resulting in another meeting of the Woolgrowers Council at Melbourne in July “ -

On this occasion the Prime Minister personally discussed the matter with the council for some hours. The confidential information and documents displayed to the wool-growers by Mr. Lyons were instrumental in relieving wool-growers’ minds to a considerable degree. Naturally, it is impossible at this stage to make public the information presented. Mr. Lyons repeated the request for avoidance of public controversy until the negotiations are finalized.

Month after month this practice has continued. While Parliament has been ignored representatives of the wool industry have been supplied by the Prime Minister with confidential information in regard to the trade dispute with Japan.

Senator Marwick:

– But it satisfied them.

Senator BROWN:

– Parliament, too, may have been satisfied with that information. The action of the Government in ignoring Parliament in this respect provided an important digression from customary policy. In this vital matter Parliament should certainly have been consulted.

Senator Marwick:

– It kept them quiet, even if it did not satisfy them.

Senator BROWN:

– Some leaders of the wool industry are making urgent representations to the Government to reach a settlement with Japan at an early date. The Minister directing negotiations for trade treaties (Sir Henry Gullett) is probably doing his best in this connexion. I do not wish to make any personal observations against that gentleman; I believe that he is actuated by the highest motives and is just as serious in his efforts to bring about a settlement of the dispute as is the Labour party. But. in my opinion, Sir Henry Gullett is the last nian in the world who should be allotted the duty to negotiate trade treaties with Japan or any other country. Temperamentally, he is unfit, for such delicate work.

Honorable senators have referred at length to the industrial methods employed by Lancashire, and to Great Britain generally. While the Opposition believes that Australia should do its best to assist the Mother Country to expand its trade, at the same time we should realize that Lancashire has been somewhat backward in developing its industry, with the result that it has lost a considerable percentage of its foreign trade. The Nineteenth Century magazine, which is not a Labour party bulletin, contains an excellent article on the cotton industry, by W. S. Ascoli. He stated that the loss of international trade, compared with 1913, was only 15 per cent.; Lancashire’s trade in proportion should therefore be 6,000,000,000 yards; but, according to Sir Ernest Thompson, leader of the Manchester trade delegation to Australia this year, the figure is only 2,000,000,000 yards at the present time. The writer of this article expressed the hope that the British Government would intervene in order to open up new channels of trade, with a view to regaining for Lancashire sales of 5,000,000 yards. This additional business would give employment to all operatives in the industry. The writer contended that modern plant was not enough ; what was required was the modern mind, directing the use of modern plant ‘through the best channels; but Lancashire to-day has fewmodern minds. Thus he appealed to theLancashire business interests to bring tobear a modern mind as well as modern, plant, in order to compete successfully with the goods of other countriesThrough two generations prosperity came to Lancashire, and there was no need for the. intense economic organization that is so necessary at the present time. Such was the lack of organization that there was profligately scattered throughout Lancashire plant and personnel over an area of 2,000 square miles, withoutthought of economy in operation. In respect of this aspect, he stated that the war paralysed Lancashire’s exporting activities, and gave a great fillip to the industries of India and Japan. Peace induced an orgy of ‘buying, which culminated in a frenzy of recapitalization at exorbitant figures under the auspices of the great banks. One of the outstanding revelations contained in the article is the neglect by Lancashire of the real economic re-organization of this industry, with the result that control of the textile industry generally was assumed by the banks; but it was recapitalized at such a high figure that it was practically impossible foi- the industry to win out in competition with the rest of the world. The writer attributed some of this difficulty to Britain’s return to the gold standard and the subsequent deflation. Therefore, apart from the cheapness of Japanese labour, there are other considerations to account for the inability of Lancashire to compete with the textiles manufactured in low-wage countries. Admittedly, Japanese labour is cheap relatively to conditions in Australia and Great Britain; but, as Senator Payne rightly stated, the Japanese wage, in relation to the standard of living enjoyed by the people, is equal to that of certain other countries.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– He said that they have all that they need.

Senator BROWN:

– That is so. If they wanted the luxuries which we require, their wages would necessarily have to be increased. I do not desire to be misunderstood in regard to this matter. The Labour party has always adopted the attitude that our workers should be safeguarded against the inroads and competition of goods of low-wage countries like Japan. For a generation or more, the Labour party has vigorously pursued a policy of self-help and internal development in Australia; it has always contended that we must safeguard Australia against, not only the inroads of such people, but also their competition in respect of cheaply-produced articles.

During the war, India was able to improve its position in regard to the production of textiles. It raised protective, duties by 25 per cent., and, in some instances, 60 per cent. As the result of this action, Lancashire lost a market for 2.000,000,000 yards of textile materials. In the Old Country, special legislation was introduced in an endeavour to rehabilitate the textile industry. It was suggested that a spindles board of three ‘members be set up; this authority was to be given practically absolute power to purchase plant, enforce levies, prevent extensions, and stop the entry into the industry of new enterprises. Provision was made in the bill for the removal and destruction of an undefined quantity of spinning plant. The intention of this legislation was to create a shortage of supply, and thus raise prices; but the proposal was strongly resisted by. solvent industrialists, because the carrying out of the plan would involve the expenditure of nearly £2,000,000, which they would be called upon to contribute. The Lancashire Cotton Corporation was then formed; it was really a financial corporation - a creature of the Bank of England. This institution became practically an octopus, and neglected the real industrial basis necessary to make competition effective against Japanese goods.

I paid close attention to the remarks of Senator Payne in connexion with the efficiency of this industry. I have a cutting from the Melbourne Herald in which it is pointed out that Japanese methods are wholly efficient. The article states -

In equipment Japan has 9li per cent, of the most up-to-date plant as against 24 per cent, in England. Japan has only 300,000 looms, but one-half of that number are automatic while of England’s 050,000 looms only 30,000 of that number are automatic.

That must exercise a big influence on their ability to market their commodities it competitive rates. When Lancashire sent a trade delegation to Australia to request us to take action contrary to our usual policy, it should at least have been frank enough to admit that it had retrogressed in. the manufacture of textiles, due to the fact that its plant was not up to date. Further, the delegation should have confessed that before Lancashire could regain its foreign trade, the textile industry would have to be re-organized. This extract proceeds -

A further very important comparison is to be found on the business capital side. In Japan there are, in the cotton trade, 71. establishments with a capital per establishment of 7,680,000 yen. In England there are 207 establishments with a capital per establishment of 2,550,000 yen. But whereas in Japan each establishment has abundant reserve funds, in England, owing to the increase of capital, during the boom period after and during the Great War, the production of interest and dividends is absorbing all reserves. This also explains the difficulty in replacement of obsolete equipment and plant.

That bears out my contention that the financial magnates of England fastened themselves like an octopus on to the cotton industry. Now Australia is expected to adopt a course contrary to its general policy, in order to satisfy the demands of those who by their methods have practically ruined the Lancashire textile industry. At all times the Labour party has stood for the vigorous development of our primary industries. If the Government had been wise enough in its day and generation to accept the advice of the La’bour party, it would have carried out a gradual policy for’ the progressive internal development ‘of Australia. Further, it would have informed the public plainly that it stood : first, for the internal development of Australia; and, secondly, for the British Empire; and that it would refrain from discriminating between country and country. The Government is making a great mistake in placing too much reliance upon the Statistician’s figures relative to trade between country and country, because by so doing it is liable to make grave errors. Mr. S. M. Bruce pointed this out in the United Kingdom on several occasions, when speaking of the “ madness of bi-lateralism “. Unless Australia exercises considerable caution in following out the policy of bi-lateralism - the Minister in charge of the bill denies that we are doing so, but facts point to the contrary - it will be in a far worse position than ever before. We must give greater encouragement to our internal development, realizing all the time, ai the Minister stated, that revolutionary changes are taking place all over the world, necessitating a new policy of economic development. We cannot possibly solve our problems merely by diverting trade, or by discriminatory measures against the United States of America, Japan, or any other country. We must encourage the internal development of Australia. So far, we are on the right track, but we must go further. Our object and aim should be the development of all industries in this country for the betterment of the whole people, and not for the private profit of a few.

Senator E B JOHNSTON:
Western Australia

– I wish, first, to protest against having t,o deal with this very important measure at an early hour in the morning, particularly as I understood, from a statement made by the Leader of the House last week, that three days were to be devoted to the consideration of the bill in the Senate. However, this is the first and only opportunity which has been afforded to the Senate to discuss the unfortunate trade-diversion policy upon which the Government recently entered, and I propose to take full advantage of it. When the Government embarked upon this policy more than six months ago, it did so, as we have been told in the House of Representatives,, on its own initiative, without taking the rank and file of its supporters, in either the

United Australia party or the Federal Country party, into its confidence. I regret exceedingly that the many practical men from various primary industries who are included in the ranks of those parties did not have the opportunity to prevent the Government from taking so unwise a step. I believe that they would have done so had they known the Government’s intentions. The main object of the trade-diversion policy is to restrict Australian trade with our two most powerful neighbours in the Pacific, namely, the United States of America and Japan. In view of the war cloud that has been darkening in Europe in recent months, no worse time could have been chosen to initiate a trade war with those two powerful and neighbouring nations in the Pacific Ocean. The Government evidently realized that it had made a mistake in the matter, as is evidenced by its apparent desire substantially to retrace its steps so far as concerns at least one, and probably both, of those nations, and its appeal to its supporters, the press, and public associations to refrain from public criticism of its action whilst negotiations for settlement of the trade dispute with Japan are in progress. These protracted negotiations have been conducted for over six months, during which period members of both Houses, ai well as members of the associations of primary producers most concerned, have, with commendable loyalty, endeavoured to serve the national interest by remaining silent. The negotiations which the’ Minister for trade treaties (Sir Henry Gullett) has been conducting with Japan, have been both difficult and delicate, and I do not desire to embarrass the Government in any way in its task. I should have preferred to defer my remarks on this subject indefinitely, if the Government had similarly postponed this bill for the ratification of its action. But as the Government is asking us to ratify its policy I am not prepared to agree silently to “ rubberstamp “ actions of which I entirely disapprove, and which I regard as a stupid blunder, threatening not only the prosperity, but also the peace and safety of the Australian nation in the Pacific. I censure the Government for its action in this matter the more severely because it took the steps in defiance and breach of the law which enacts that no new or increased duties shall be imposed without prior reference to the Tariff Board. These drastic alterations in the tariff were made without any reference to the board at all.

Now that the subject of the duties on motor engines is being referred to the board I may say that the original terms of reference were unsatisfactory, and loaded, and denied the board the right to report fully on the Government’s policy. In this connexion, however, I was pleased to read in this morning’s pre3S a ministerial statement that the terms of reference to the board are to be amended. I hope they will be made so comprehensive that this Parliament will know exactly whether or not the policy of constructing motor engines and chassis in Australia is economic, or such as to justify the drastic action being taken by the Government, by regulation, to exclude the engines and chassis of modern motor vehicles. I hope the Government will review and cancel its announced policy in regard to the local manufacture of motor engines and chassis if this is proved before the board to be utterly uneconomic.

In regard to the trade dispute with Japan, it should be remembered that last year Japan purchased, in round figures, £17,000,000 worth of products from Australia, whilst Australia purchased just under £6,000,000 worth of goods from Japan. From these figures the folly of initiating a trade war with so valuable a customer becomes apparent. As is usual the burden of the Government’s economic folly and blundering is to fall in full on the primary industries, particularly on the wool-growers and wheat-farmers who, whilst carrying the cost of the Australian policy of high protection, have to sell in what used to be called the open markets of the world, but what are now closing markets. Now they have the additional mortification of seeing an unsympathetic Government deliberately closing to them the expanding market of our second-best customer, a market moreover very close to our shores. The Government should settle the trade dispute with Japan without delay. If, as we have been told in the press from day to day recently, there is only a narrow margin between the Government and the great and powerful country of Japan, and if, in order to reach a settlement it becomes necessary, as has been stated in the press, to permit a few extra tens of thousands of square yards of textiles to enter Australia, then I hope that such action will be taken without further delay or haggling. In this way we may close an act of political stupidity which has been most unjust to those engaged in two of our fundamental primary industries. If the great wool industry of Australia sustains loss in the future through the sacrifice of the Japanese and other markets by this Government, the Commonwealth should fully compensate the wool-growers and any other producers who similarly suffer. This request has already been made to the Government by a great many of the associations representing the graziers, pastoralists, and farmers of the Commonwealth, and I urge that it should be acceded to in full.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– How is the value of the loss to be assessed?

Senator E B JOHNSTON:

– Difficulties of that kind can easily be overcome by a sympathetic government. I again question the wisdom of the trade contraction policy, but no fair-minded person can doubt the justice of its cost being borne, not merely by the producers in the wool, wheat, flour, and allied industries, but by the whole nation. In this connexion I remind the Senate of the words uttered by Mr. Menzies, the highly respected Attorney-General of the Commonwealth, on his return from his last trip to England. He said then that we could not expect England to provide an unlimited market, for our increasing volume of products, and. that it was necessary for us to retain and increase other markets. These are the exact words he used -

For two successive years I have been engaged in discussions which were primarily about the export of Australian products, and one thing I have learned is that the United Kingdom does not present an unlimited market for vis. Nothing would be more foolish than to believe that we can go on expanding that market year after year in accordance with our desires and capacity.

That statement justifies, if justification be needed, the wisdom of the policy adopted by successive Australian governments, until the 22nd May last, of endeavouring to expand, exploit and increase our markets in Japan, China, and what is generally spoken of as the Far East. In this connexion it must be remembered that about three years ago Mr. Bruce, the present High Commissioner for Australia in the United Kingdom, visited Australia and in addressing meetings in all the States, laid great emphasis on the policy of the British Government as then expounded by Mr. Walter Elliott, the Minister for Agriculture, to limit the quantities of wheat, meat, butter and other primary products exported to the British market. Mr. Bruce actually urged that Australia should restrict its production of those commodities possibly for two years, when it was hoped that prices would rise, and the world had realized the need for a greater freedom of trade. That suggestion was, quite properly, received adversely throughout Australia, and amongst those” who opposed the suggestion at that time was Mr. Cowper, a solicitor of Sydney, who is not a member of the Country party. In a series of widely published articles he mentioned Mr. Bruce’s audacity in asking the Australian people to adopt a policy which Mr. Walter Elliott had expounded in the interests of the British people. Mr. Cowper declared that there was no justification for the belief, that Mr. Bruce had expressed, that within two years there would be a modification of the policy of economic nationalism in other countries. Mr. Cowper maintained that a policy of restriction was undesirable and dangerous, and should, therefore, be avoided. He concluded the series of articles with the two paragraphs which I propose to bring under the notice of the Senate, because they express the point of view so widely accepted by Australian governments and the Australian people. He said -

Even if we resign ourselves to the view that we have nothing but ever-narrowing restrictions to expect from British and European markets, we ought not to abandon hope of finding other outlets. If we turn to the East, we see markets of marvellous potentialities. The significant, the all-important facts (I said) are the immense growth of industrialism in Japan, and the commencement and rapid progress of it in China. It is true that the small Japanese farmer, winning enough for the subsistence of himself and his family from half an acre of ground, is not, and never will lie, a purchaser of our meat, wheat, butter or eggs; but the factory worker and the city dweller have higher standards and expanding needs. . . .

Australia, where wheat can be produced at less cost than anywhere else in the world, and where other primary commodities can also be produced cheaply, has a remarkable opportunity in these Eastern markets if she cares to cherish it. If she can keep her right to trade freely with the East, while retaining as much as possible of her trade with the United Kingdom and the rest of Europe, her wealth and standards of living are certain to rise. Higher standards here will in turn attract immigrants from the old world, and thereby add to our strength and resources; and we may to some extent imitate in this century the extraordinary growth of the United States in the last. This is our destiny. Shall we grasp it, or weakly let it slip?

These are the lines upon which the governments of Australia were operating in endeavouring to retain our markets in Great Britain, while extending them in Japan and China, until the calamitous blunder was made on the 22nd May last. At any rate, time has proved that Mr. Bruce was wrong. We have not only increased our exports to the United Kingdom during the last three years, ‘but we have also adopted the suggestion incidentally made by Mr. Cowper, which came also from other quarters, and was regarded as a national policy, of endeavouring to increase our trade with Japan and throughout the Far East. In pursuance of that policy, the Government sent the then Attorney-General (Mr. Latham), a senior Minister in the Lyons Cabinet, to lead a goodwill mission to Japan and China. That mission certainly had a remarkable effect in directing the attention of the Chinese and Japanese people to our resources, in an endeavour to extend our trade and friendly relations with them. Some time after Mr. Latham’s return, Australia not only received a goodwill mission from Japan, but also appointed trade commissioners in Japan and China. The object of these appointments was, undoubtedly, to extend our sales in those countries, and to encourage the sale of Japanese products in Australia. In these circumstances, many Australians expected an expansion of our export of primary products to eastern countries; they did not expect that there should be only one-way traffic. Having regard to these facts, and to our position in the Pacific in relation to both Japan and the United States of America - which has been described as our most powerful potential friend - we cannot understand why such a stupid blunder should have been made by the Government. I sincerely trust that the trade war will soon terminate on terms satisfactory to Australian primary producers.

I wish to deal now with the proposal of the Government to encourage the manufacture of motor engines and chassis in Australia, and in doing so I desire to answer some of the comments made by the Minister directing negotiations for trade treaties (‘Sir Henry Gullett), who has been described as “the Minister for trade .wars “.

Senator Duncan-Hughes:

– He is not solely to blame; he cannot act without the authority of Cabinet.

Senator E B JOHNSTON:

– I realize that the Government is responsible. The remarks to which I am about to reply are reported in Hansard.. No. 27’ of 1936, page 2209. When Sir Henry Gullett referred to the certain classes of. engines and chassis he must have meant those used in the Ford and Chevrolet cars. He said : “ Such engines could be landed in Australia without duty for about £20.” On engines made in Australia it is proposed to pay a bounty of £30. In order to rarer for Australian requirements it would be necessary to manufacture 50,000 engines of this type annually which at £20 each would cost £1,000,000, while the bounty alone would cost £1,500,000. Is that an economic proposition? I say that it is not.

Senator Duncan-Hughes:

– There are many others who agree with the honorable senator.

Senator E B JOHNSTON:

– There are very few persons in Australia who support the Government’s contention that the production of motor cars in Australia is an economic proposition.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– Apparently the honorable senator has not a very good opinion of the capabilities of the Australian workmen.

Senator E B JOHNSTON:

– I have, but the production of cars would be un economic owing to the relatively small number of users. The cost of manufacture combined with the loss of revenue would be tremendous. The Minister further stated “ that the duty of £43 Ss. per ear could be saved if the chassis were built in Australia”. That may be so, but the revenue would suffer to that extent. Moreover, those engaged in the motor trade in Australia are of the opinion that Australian-made chassis would cost more than £43 8s., which is the present duty landed cost. The Minister also said that the cost of motor car bodies would be reduced by £20 each if the chassis were built in Australia. Those engaged in the motor trade in Australia are of the opinion that the price of the 90 per cent, of bodies now built in Australia could not be reduced if the chassis were manufactured here, and on the other 10 per cent, no saving of cost would be effected. Present manufacturers would, no doubt, be forced off the market altogether under Sir Henry Gullett’s scheme. The good bodies which are now being made here would be replaced by bodies and chassis of a cheaper type. The Minister, who expects an Australian chassis to cost £100 more than an imported chassis, has endeavoured to show that that £100 can be met without cost to any one. On the Minister’s own figures, the cost of the imported chassis is about £50, but he says that an Australian chassis will cost £150. Is that an economic proposition ? Again I say, “ No “. Those engaged in the motor trade disagree entirely with the Minister. Moreover, the Government should consider the difficulty of local manufacturers in keeping pace with overseas development in respect of new types of motor engines and chassis. Although Australian manufacturers may establish a plant to produce 50,000 chassis a year they would not have the financial resources to make the necessary alterations year after year in order to keep their plants right up to date. At present if British manufacturers export to Australia chassis which do not contain less than 50 per cent, of English labour and material, they are admitted practically free of duty. This means that an English company can include American engines and transmission in the English chassis and export it to Australia under the British preferential tariff without any restrictions. Australian manufacturers of chassis cannot compete against importations under such conditions. The British manufacturers can keep up to date by adopting the latest American innovations and also by utilizing the inventions of their experts. Australia cannot afford to do so because of the huge cost of equipping factories to meet only a limited demand. Australia will eventually be two or three years behind overseas manufacturers and costs will be two or three times greater than those of their American and British competitors. The Minister also stated that work would bc provided for 6,000 Australians. If each received on an average £200 per annum, the total amount of wages paid would be £1,200,000; that is quite a good addition to the wages bill of Australia. The bounty on 50,000 engines, however, would amount to £1,500,000. Why not pay the 6,000 new workers proposed to be employed their £200 each year to go fishing and save the country £300,000 on the deal?

In regard to the trade balance between the United States of America and Australia, it might be pointed out that the [British Empire buys more from the United States of America than that country buys from the British Empire, because England purchases huge quantities of American raw cotton. If the United States of America cut down its exports of raw cotton to England it. would be found to be a better customer of the Empire than . the Empire is of the United States of America. England buys American raw cotton because it pays to do so; in fact, the processing of the cotton provides employment for thousands of English workers. Another point to be considered is that Australia participates in Empire trade in a manner that does not appear in the statistics. The United States of America buys huge quantities of products from England, a portion of which undoubtedly originates in Australia. For instance, the imports statistics of the United States of America for 1928 show the following figures in relation to the imports of wool, other than carpet wool, in the United States of America during 1928:-

The year 1928 is taken because the figures for 1935 and 1936 are not yet available in Australia, and, in any case, the depression years would not give a true indication of the volume of the trade. This year’s figures will undoubtedly exceed those of 1928 ; they have already reached £2,500,000, and are almost sure to go to £4,000,000. The figures relating to the “United Kingdom” and “Other sources “ undoubtedly represent large quantities of Australian wool. This is particularly so in respect of wool manufactures, of which France is a large supplier. Goods represented in wool manufactures are of a class that is made up from high-grade Australian, wool. Another important fact emerges from the figures appearing in Hansard of the 1st October, 1936, at page 783, where the Minister for Trade and Customs (Mr. White) informed Mr. Francis that Australian exports to the United States of America in 1935-36 totalled £9,343,7S1, while the imports not influenced by the embargo were valued at £13,901,764. This showed a remarkable levelling-down of previous figures, and if we could add to the £9,343,781 the full value of Australian products that reach the United States of America indirectly, we would probably find the balance of trade to be, if not equal, at least much less adverse to Australia than is publicly recognized a! the present time. The Government’s scheme is definitely aimed at placing the Australian motor car industry in the hands of two, or, at” the most three, companies. The Minister directing negotiations for trade treaties (Sir Henry Gullett) admits the necessity for an overseas organization behind the Australian manufacturers. How can that assistance be secured, and who will control the Australian industries? In this connexion, I have received the following telegram from Mr. Winterbottom, of Perth, who is one of the biggest distributors of both British and American cars in Western Australia : -

Gullett’s 20 per cent, represents fully 60 per cent, factory costs complete motor vehicle built under mass production methods. This portion consisting of engine and vital chassis parts if manufactured Australia would increase cost of complete vehicle at least 40 per cent.; also efficiency and performance of vehicle would be reduced. Australian progress through considerably increased motor transport costs would be retarded and employment reduced through reduction in use motor vehicles due higher costs. Refer particulars my letter July, also West Australian newspaper article 23rd June. Government’s proposal will have particularly serious effect on Western Australia’s development, and would seriously affect many hundreds of mechanics and assemblers now employed Perth in completing this State’s motor vehicle requirements.

The Government would be wise to heed the expert advice presented by Mr. Winterbottom in regard to this matter. At present the importers and distributors of cars manufactured in the United States of America and Canada have been promised a quota only until April, 1938. The Government consented to grant a quota for that period, only because the importers were unable to place their orders for bodies until they were sure that the chassis would be permitted to be imported. The motor distributors are threatened with ruin eighteen months hence if the Government refuses to allow the necessary chassis to be imported; they will be paid no compensation. If that comes about it will result in a great amount of unemployment, and will impose a considerable amount of hardship upon those who are at present employed in the well-paid Australian motor industry. It would appear that the Government already realizes that this policy is ill-advised, that the heavy duties on unassembled chassis, plus freight and exchange, and the bounty of £30 on the engine alone, are insufficient for a local manufacturer, and that imports must be by permit, as in the case of galvanized iron, in order to create a monopoly for a single chassis builder. When we add to that the high prices, by comparison, for frames, wheels, selfstarters, generators, radiators, clutches, gears, as well as royalties - because all important fitments are covered by world patents - plus the high cost of local engines, with probable loss of comparative efficiency, we begin to think furiously about the cost of an all-Australian car in a market of fewer than 7,000,000 people, the fact must also be remembered that there is a comparatively small replacement business in Australia and no export market. Fuel and taxes on motor transport are costly and further limit the sales of motor vehicles. The volume market is held by vehicles turned out by overseas factories producing millions of units, from which Australia draws its unassembled chassis, as the basis of an already enormous industry now threatened with destruction. It would appear, then, that the effort to produce a complete car with the aid of a bounty on engines can only result, firstly in a heavy loss of federal customs revenue, amounting on say 60,000 chassis to nearly £2,500,000; secondly, a heavy bounty payment and a tax on the public for nursing another uneconomic industry; thirdly, the destruction of the distributors’ assembling plants and the placing out of employment of employees who are now engaged in handling upwards of a hundred makes and models, because a few types of chassis are incapable of meeting requirements; fourthly, a heavy reduction of the output of bodies, tyres and other parts, which are already being produced in Australia, because of the decreased volume of sales which would follow higher prices ; fifthly, in much higher prices being charged to the public for cars and, trucks; and lastly, general stagnation and loss of employment. Another consideration is that- by creating a monopoly to bring production costs of a local vehicle as low as possible Australians cannot hope to enjoy all the latest developments which are taking place in transport vehicles not exclusively produced by any single manufacturer overseas. The people are always seeking just the right chassis for their varying requirements. This is but another example of a government deliberately increasing the cost of production to rural and, primary industries which have to sell their export products in the open markets of the world. The proposal to manufacture motor engines in Australia is simply an attempt to establish another wholly uneconomic Australian industry at the expense of the Australian users of motor transport. Its only effect will be to deny to Australia the latest improvements of modern science in regard to motor transport, and unfairly to increase the cost of transport throughout this island continent of great distances. As is usual in federal policy, whilst Sydney and Melbourne will gain a few factories, disadvantage will be felt by all users of motor vehicles, and the burden of increased cost of transport will fall most heavily on the rural population. That would be another shocking example of centralization. I shall oppose the heavy tariff increases contained in this measure.

Senator DUNCAN-HUGHES:
South Australia

.This has been a most pleasant debate, because we have had tlie Leader of the Opposition (Senator Collings), who so frequently appears to be in. accord with the Government, in a rather fulminatory frame of mind, whilst the Leader of the Country party (Senator Hardy), who always supports that Government, has distinguished himself by opposing some of its proposals, although I imagine that he will support them when the vote is taken. It is always a rather feeble thing to Come in after the damage has been done and say, “ This is a regular muddle “. Some honorable senators, however, are in a position to say that before trouble actually occurred, they drew the attention of the Government to the danger. About a month before this lamentable schedule was introduced into the House of Representatives, there was a debate in this chamber on the wool industry. Three honorable senators spoke then and said that they hoped nothing would be done to spoil Australia’s export trade in its most important product. One of them was Senator Guthrie, who to-night rather applauded the Government’s action. On the 23rd April the honorable senator said -

Japan is a very valuable customer of Australia, a vitally valuable customer, not only for wool and wheat. but also for other commodities. Therefore, I know that the Government, when dealing with international agreements or the tariff, will take seriously into consideration the value of the Japanese demand for our greatest product. . . .

Who are our customers? First of all there is Great Britain, and, in recent years, although it is only 25 years since it first purchased wool from Australia, Japan has taken the place of Germany as customer number two. This year Japan has purchased from thi3 country no less than 700,000. bales of wool. It has taken as much as the whole of the countries of Europe combined, this despite the fact that Germany formerly was our second best customer.

Another of the three was Senator Abbott, who was reprimanded by the Leader of the Senate (Senator Pearce) for having mentioned Japan at all when negotiations with that country were still proceeding. Speaking of the wool-grower, I, myself, said -

He sees, too - and this is why Senator Guthrie has raised the question - that in one foreign country his sales have been increasing and thus compensating him to some extent for what he has lost elsewhere. He merely asks the Government to be very careful to avoid imperilling the interests of this industry in that particular country, as it has imperilled those interests in other countries.

It will be seen, therefore, that there are at least three members of the Senate who can now stand up and say, “We warned you a month before you did this thing of what would happen. Are you now satisfied that we were right ? If you maintain that we were wrong, why are you prepared to come to any agreement at all? Why not stand to your guns?”

Senator Hardy:

– How does the honorable senator know that the agreement will not be an improvement?

Senator DUNCAN-HUGHES:

– In that event, the previous action could not have been right.

Senator Sir GEORGE Pearce:

– We were always willing to come to an agreement.

Senator DUNCAN-HUGHES:

– Assuming that this was done purely as a means of bargaining, are we to take no notice whatever of the bad feeling that has been engendered throughout the Pacific during the last seven or eight months? Is that to count for nothing compared with a few hundred yards of textiles ?

Senator Sir George Pearce:

– Millions of yards.

Senator DUNCAN-HUGHES:

– Even so, the value is trifling compared with the amount paid by Japan for Australian wool and other commodities. This is not a matter for scoring debating points.

Senator Sir GEORGE Pearce:

– Hear, hear !

Senator DUNCAN-HUGHES:

– The Government has not been successful in making many good points during this debate; but, as I have said, it is a matter for deeds rather than words. It is useless for any Minister of the Crown, however great a Minister he may be, or however important his position, to go to Brisbane, or elsewhere, and say that Australia can play a great part in improving Pacific relations, when, at the same time, his Government has just taken an action which in no way improves those relations. It is not of the least use for a Minister of the Crown, however important he may be, to say that the Government has never lost sight of the importance of the wool industry to the people of Australia, when the Government of which he is a member has just dealt that industry the most annihilating blow that has ever been struck at it in this country.

Senator Sir George PEARCE:

– The industry seems to be flourishing fairly well.

Senator DUNCAN-HUGHES:

– I shall have a word or two to say on that point; but there are other factors than the immediate question of the price of wool to be considered. Does the Minister say that the price of wool is as good as it was two years ago? Two or three times to-day Senator Hardy has interjected, “ How much has wool fallen?” The price of wool has not fallen, but. on the contrary, has risen.

Senator Badman:

– Wool is bringing higher prices in South Africa and in New Zealand than in Australia.

Senator DUNCAN-HUGHES:

– I am not astonished, but I do not wish to overemphasize the fact that the Japanese are buying wool heavily in South Africa and New Zealand. That may be a premeditated movement.

Senator Hardy:

– The price of wool may fall if they buy here.

Senator DUNCAN-HUGHES:

– It is also possible that the price of wool has risen in anticipation of an agreement with Japan being arrived at. I shall not give an answer to the question which has been asked to-day in my own words, although I could quite well do so; but I shall answer it in the words of Professor J. B. Brigden, who, writing in the Australian Quarterly for September, 1936, said, on page 16 -

The immediate position is not at all serious, if the interests of our own consumers are ignored, as they commonly are. Our womenfolk can do without cheap Japanese dressgoods. Our wool-growers will not seem to lose much if the price of wool does not fall. A failure to rise in price is not nearly as impressive, although the loss is just as great.

That is what I put to the Senate. It is idle to say that wool is selling at good prices. We know that, whatever the price, it is lower than it would have been if Japanese buyers were in the market. I have actually seen statements by one who is a leader in the wool industry and also in newspapers questioning whether Japanese competition would have made any difference to the price of wool.

Senator Hardy:

– Many people think that the price of wool can go too high.

Senator DUNCAN-HUGHES:

– I agree; but shall we then attack wool in order to keep its price down?

Senator Hardy:

– Tie honorable senator is submitting a hypothetical case.

Senator DUNCAN-HUGHES:

– We cannot say what the price of wool would have been if the Japanese were buying it; but we can say definitely that it would have been higher than it is. Whatever the price, it is undoubtedly a fact that it is less than it would have been had Japanese buyers attended the sales.

Senator Hardy:

– That is only the honorable senator’s opinion.

Senator DUNCAN-HUGHES:

– Does ‘ the honorable senator deny the accuracy of my statement?

Senator Hardy:

– I say that it is purely hypothetical.

Senator DUNCAN-HUGHES:

– Then competition means nothing, and the law of supply and demand needs revision! The absence of our greatest foreign purchaser of wool apparently makes no difference at all to the price of the commodity! If that is a hypothetical argument in the opinion of the honorable senator, it is not so in my opinion. Any business man of standing in the community, unless he is trying to score a point, will say that the absence of a buyer like Japan from the wool sales must mean- a reduction of the price obtained for wool. Whilst I do not wish to over-stress the importance of Japanese buyers operating in South Africa and New Zealand, it is known that the price of both greasy and scoured wool in South Africa is pennies per lb. higher than for the same class of -wool in Australia. Is that a hypothetical argument?

On another occasion recently I ex- . pressed my objection to the way in which this matter has been dealt with, not because I personally pin myself to the Tariff Board, but because that body has always been set up by the Government as a sheet-anchor. The country is entitled to expect that, the sheet-anchor will not be removed by the Government.

Senator Leckie:

– The sheet-anchor is the whole ship.

Senator DUNCAN-HUGHES:

– I do not think that. Instances have been before us lately in which the Government has completely ignored the recommendations of the Tariff Board and imposed duties on goods higher than those recommended by the board. It cannot be considered, therefore, that the Tariff Board is the whole ship. There must be a captain of the crew somewhere. Sir Henry Gullett has been mentioned frequently as being responsible for the Government’s trade diversion policy. I have no wish to disparage that honorable gentleman: and I do not think he should be regarded as being solely responsible. We cannot get away from the fact that the Cabinet as a whole is responsible and each member of it must accept his share of responsibility. It is grossly unfair to attribute responsibility for this policy to the honorable gentleman who was in charge of the negotiations.

I understand that Senator Hardy regards a trade balance as a hypothetical thing ; but I have always been encouraged to believe that it is good for any trade balance to be favorable to Australia. I cannot understand why a government should hit the United States of America with one hand because it sells too much to Australia, and hit Japan with the other hand because, presumably, it is buying too much from Australia. The trade balance with Japan is heavily in our favour. I do not suggest that bilateral trade balances can be arranged with exactitude.

Senator HARDY:

– Sometimes when the statistics of one country are balanced against those of .another country, extraordinary differences are noticeable.

Senator DUNCAN-HUGHES:

– That is true. We had an instance of that the other day in connexion with the Czechoslovak trade treaty. Although figures may not be available to indicate with certainty the exact position between two countries, the Commonwealth Government has admitted an export trade to Japan of £15,000,000 and an import trade from Japan of £6,000,000 for last year. Australia is not doing badly out of that transaction. I cannot understand the state of mind of those who will allow a good customer of that kind to be antagonized. The adoption of such a policy seems to me to indicate the gravest lack of wisdom and to be extremely undesirable. Senator Hardy endeavoured, this afternoon, to suggest that we must choose between Great Britain and Japan, but why should we force ourselves into such a position?

Senator Hardy:

– I tried to draw a line of demarcation on the basis of market values.

Senator DUNCAN-HUGHES:
SOUTH AUSTRALIA · UAP

– HUGHES.- I understand the honorable gentleman to contend that we should adhere strongly to Great Britain regardless of statistics.

Senator Hardy:

– I said that Great Britain was our best customer.

Senator DUNCAN-HUGHES:

– Why did we attempt to distinguish unduly between two good customers? There is no earthly reason why a fight should be waged on such a subject. Why should cotton piece-goods and rayon be selected? It was foolish to embark upon such a policy.

I oppose this schedule for three main reasons, the least of which is the effect that it is likely to have on the wool industry of Australia. I have said on other occasions that our great wool industry is entitled to some consideration because it brings into this country a larger amount of money than any other industry; but I do not really expect it to get much consideration. Senator Johnston has asked in the course of this debate why the Australian wool-growers should be made to suffer almost exclusively through the adoption of this portion of the trade diversion policy. The question is pertinent. I suppose Senator Hardy would call the loss hypothetical, but it is none the less serious to the man who suffers it. It is, in fact, no more hypothetical than losses sustained by our producers of butter and dried fruits. We have already discussed those industries at some length when dealing with other bills. It is, at least, arguable whether the wool industry of Australia should be required to bear the whole cost of this trade diversion policy. In my opinion any loss should be spread over the whole community.

However, I regard the effect of this policy on our wool industry as the least objectionable of its ill effects. The reactions of the policy on the whole economic life of Australia must be serious. If our wool-growers are hit hard, the whole community must suffer for it. The third, and, perhaps, most serious consequence of this policy will be its effect on Pacific relations generally. It is strange, though perhaps accidental, that this policy should hit our three main neighbouring countries in the Pacific. I do not propose to discuss this aspect of the subject in detail, but, after all Australia is in the Pacific, and I ask whether it is desirable for us to wield the shillelagh in the face of our greatest neighbours. Certainly such action cannot improve Pacific relations and is not likely to make a happy background for goodwill missions from Australia to Japan or from Japan to Australia. The adoption of this policy must inevitably encourage the use of substitutes for wool. This may also involve a hypothetical loss, but the loss will become less hypothetical if it results in a permanent reduction of the demand for woollen goods in the future. It has been suggested on several occasions that the Government has adopted this policy in consequence of pressure from the British Government. I do not believe that that is so, especially when I read what Lord Hartington stated in the following paragraph, which appeared in the Melbourne Argus on the 3rd July, 1936 : -

The Parliamentary Under-Secretary for the Dominions (the Marquis of Hartington), in an address at a meeting of Conservatives at Retford, expressed regret that the recent Australian tariff measures had not met with greater gratitude.

He said, “ The Australians knew that the British textile trade was experiencing anxiety and Lancashire was still despondent. Australia, of her own accord, and without solicitation, imposed almost prohibitiveduties on American and Japanese goods in order to help Lancashire. “ It was a generous and free gift. At least £1,500,000 worth of goods will be imported in the first year from Lancashire in excess of previous years. “ It is wonderful that a government1 2,000 miles away should ask its people to undergo considerable risks and losses to help a distressed section of the Old Country.”

That statement makes it perfectly clear that pressure was not applied to Australia by the British Government.

Senator Sir George Pearce:

– The Prime Minister made a similar statement.

Senator DUNCAN-HUGHES:

– No such pronouncement was made in the early stages of the negotiations. It was brought under my notice that as there did not .appear to be any valid reason for these proposals they must have been the result of pressure on the part of the British Government.

Senator Collings:

– The honorable senator has not forgotten the Lancashire deputation, and the arrival in Australia of Sir Geoffrey Whiskard.

Senator DUNCAN-HUGHES:

– The opinions expressed by the members of the Lancashire deputation do not represent the views of the British Government. Doubtless the members of the Lancashire delegation visited Australia with the object of obtaining further business for British manufacturers.

Senator Hardy:

– On the Sth July, the Prime Minister denied that pressure had been applied by the British Government.

Senator DUNCAN-HUGHES:

– The speech I have quoted was delivered by Lord Hartington on the 2nd July, or some considerable time after the Government’s trade diversion policy became operative.

Senator Sir George Pearce:

– Whenever the suggestion was made, it was denied by the Government.

Senator DUNCAN-HUGHES:

- Senator Hardy said that the suggestion was denied by the Prime Minister on the Sth July, but I have shown that it was denied in a speech delivered by Lord Hartington on the 2nd July. I should be glad if any honorable senator can cite an instance in which it was publicly denied by any Minister prior to that date. I have heard it suggested that the British Government applied pressure, although I do not think I have seen anything to that effect in the newspapers. Some people have gone to the extent of saying that those who consider the Government has made a grievous mistake in submitting these proposals are disloyal and anti -British in the attitude which they have adopted. Some have said that Japan is bluffing and trying to interfere with our internal arrangements, but that is not a good way to negotiate with a foreign country. Japan has been one of the good-customer countries to which reference has been made, and it is lamentable that the initial blowshould have been struck by Australia. I am glad to join with other honorable senators in expressing the hope that wiser counsels have gradually prevailed, and in noting that there appears to be some reasonable prospect that an ,amicable decision may yet be reached. I trust that the experience in this instance will be a lesson to governments in the future, and that methods of this kind - I am not speaking of any foreign country in particular - will not be adopted in connexion with future trade negotiations. It is an unwise policy adopt particularly when our chief exportable products are involved. Those who have been affected in this instance will probably be more alert in the future ; but they can do very little. It is unnecessary for me to say more at this stage, but there are other features of the Government’s proposals which I shall discuss in committee. This branch of the subject appears to me ‘to be the most important, and I have therefore devoted more attention to it than to other aspects of the Government’s trade diversion policy.

Senator UPPILL:
South Australia

– The proposal of the Government to curtail by 40 per cent, the trade with Japan at a time when it was expected that our trade with that country would increase appears to be altogether too drastic. I realize that Great Britain, which takes practically all of our primary products, should receive some consideration in the matter of cotton piece goods. The problem confronting the Government is difficult, particularly as Japan, as our second best customer, would probably expect further trade with Australia owing to our satisfactory trade balance with that country. I have not criticized the Government’s trade diversion policy while negotiations are proceeding with Japan, and I do noi- propose to do so now.

On the information at present available, I cannot support the Government’s proposal to encourage the manufacture of internal combustion engines in Australia, but I understand that the Government is now awaiting a report from the Tariff Board on the subject. I do not contend that internal combustion engines cannot be manufactured economically in Australia now or at a later date, but in the absence of a proper investigation the proposal should not be proceeded ‘ with, unless it can be shown that it would be of advantage from a defence viewpoint. We have wisely laid it down as a principle that no new customs duties shall be imposed until reported on by the Tariff Board. The Ottawa agreement provides that no new protective duties shall be imposed or existing duties increased against Great Britain unless recommended by the Tariff Board. I do not know how the Government intends to reconcile these proposals with that portion of the agreement. The manufacture of internal combustion engines is a new undertaking in Australia, and there is nothing to show how the production of complete motor cars in this country will affect the users of motor vehicles. It would have been more satisfactory had inquiry been made by the Tariff Board before these proposals were launched. We should have complete evidence from those with a knowledge of the subject, and a full report and recommendation from, the board. As the matter is not urgent there is no reason why this important undertaking should be undertaken without the usual preliminary investigation. If it be demonstrated to the Tariff Board that the industry can be carried on successfully without increasing the price to the public, I shall be prepared to support the proposal. We should also take into consideration the effect which the new duties will have on the distributing companies. ‘It cannot be denied, I think, that they will be adversely affected, and many of those at present employed in assembling and distributing imported motor cars will not be able to find employment in the new manufacturing industry. We should not disturb the exi sting organization tin til we are sure that the manufacturing industry will be a success. It seems clear that not more than two or three firms will be engaged in manufacture, so that competition will not be particularly effective, and the price of cars must rise. It would, of course, be a good thing if we could establish a successful motor manufacturing industry in Australia. I do not pretend to know enough about the matter to be able to say whether or not it is likely to be economically successful, but I do know that we should not rush headlong into a venture of this kind without conducting the fullest investigation. All business people know that a liberal allowance must always be made for unforeseen contingencies. I am not opposing the efforts of the Government to bring about better trade relations with other countries, but I am frankly doubtful regarding the probable success of its proposal to establish a motor manufacturing industry in Australia.

Senator J V MACDONALD:
QUEENSLAND · ALP; FLP from 1932

– I do not propose to discuss the wrangle between the Government and the exporters in Japan and the United States of America, except to point out that the Government appears to be so determined to quarrel that it is quite indifferent as to whether it quarrels with a good customer or a bad one. The members of the Labour party are not unanimous on this matter, and neither, apparently, are honorable senators opposite, judging from the speeches which I have heard to-night. Of course, we do not wish to see Australia flooded with cheap J apanese goods selling here at prices with which it is impossible to compete. Apart altogether from the Government’s present policy, it is clear that eventually action would have to be taken for the protection of our cotton industry, and other industries also. Generally speaking, I think the Government acted unwisely in throwing down the gauntlet to Japan without first seeking to reach an amicable settlement by negotiation. In the circumstances, we can understand the attitude of the Japanese, and I believe that, if the matter had been approached in a more diplomatic fashion, a compromise might have been reached. Instead of acting in that way, however, the Government suddenly introduced this tariff schedule in May last, and it has now been in operation for nearly eight months. The dispute with Japan has been dragging on all that time, and even yet we do not know what is being done to reach a settlement. There is no doubt that the wool industry has suffered as the result of the Government’s action. Prices have been maintained fairly well because, fortunately, the J apanese were compelled to buy elsewhere the wool they declined to buy in Australia, but the minds of the woolgrowers have been greatly disturbed, and prices might have been even better had there been Japanese competition.

There is this difference ‘between Japan and -the United States of America: The former was a good customer of ours, while the United States of America has always been a bad customer. No doubt honorable senators have received literature setting forth the American point of view. I admit that I was somewhat impressed by two arguments. It was pointed out that no country could expect to have favorable trade balances with every country with which it traded, and the balance of trade between the United States ‘of America and all British countries was against the United States of America and in favour of the British countries. The other point was that, in all its tariff making, the United States of America has, it claims, never discriminated against any one country, as Australia has discriminated against it.

Australia is attempting ‘to build up a cotton industry, and Queensland is particularly interested in this because all the. raw cotton is produced in that State. “We should encourage -the development of that industry, and protect it against undue competition from Lancashire, Japan or anywhere else.

Senator Dein:

– The industry is receiving liberal encouragement, is it not?

Senator J V MACDONALD:
QUEENSLAND · ALP; FLP from 1932

– It has little to thank the present Government for in that regard. There is no doubt that, if an attempt were made to increase the present protection, objections would be raised by the cotton- interests of Lancashire. I have no doubt that the delegation from Lancashire, and other visitors from Great Britain, have played their part in bringing about the present dispute with Japan.

Senator Sir George Pearce:

– They had nothing whatever to do with it. The Government had arrived at its decision before they came to Australia.

Senator J V MACDONALD:
QUEENSLAND · ALP; FLP from 1932

– I remember that a few years ago, the cotton spinners of Lancashire protested against the duties we imposed upon their piecegoods in an attempt to protect our own cotton industry. I can understand that attitude, of course, because we cannot expect to go on selling millions of pounds’ worth of produce to Great Britain every j ear unless we are prepared to take some of its goods in return. The manufacturing interests of Great Britain also interfered in an attempt to influence our tariff policy in regard to the duty on cement.

Senator Uppill expressed the fear that the attempt to establish a motor manufacturing industry in Australia would be unsuccessful. I am in favour of the establishment of any industry in this country that has a reasonable chance of success, even though, at first, it may be uneconomic. On the ground df defence alone it is of the utmost importance that we should manufacture motor car chassis and aeroplane .engines in Australia. Recent events in Spain demonstrate the enormous importance in modern warfare of aircraft, armoured cars, armoured trains and tanks, and we should have it’ within our power to build those things in Australia if necessary. We should also take steps to supply our own requirements of oil. Senator Uppill stated that the manufacture of motor cars in Australia would be uneconomic, and would cause prices to rise unduly, but the same kind of thing has been .said in respect of every new industry that has been established here.

Senator LECKIE:
Victoria

– There seems to be an idea in the minds of some honorable senators that this tariff schedule was designed for the purpose of benefiting secondary industries in Australia, and that it is part of the protectionist policy of this country. As a matter of fact, the tariff is not worth twopence to Australian manufacturers at the present time, though it may be of some value to them in the future, when the motor manufacturing industry is established. The restrictions imposed upon imports from Japan and United States of America, will be of no benefit to the secondary industries of Australia. This tariff represents an extension of what I may call the policy of Empire protection. Australia first adopted that policy many years ago, when it granted preference to British goods, and it was still pursuing the same policy when it placed its signature to the Ottawa Agreement. Whether Empire protection is a good thing or not, I am not called upon to debate at this time, but the fact remains that the chief purpose of this tariff was to assist Australia’s primary producers, and the effect of it is to assist the British manufacturers rather than the Australian manufacturers. I do not say that the Government is to be blamed for that, but I do say that it will very soon have to impose restrictions upon imports into Australia, because the balance of trade is tipping against us. We are buying more than we can pay for, and we are seriously depleting our London funds. Ere long the Government will have to consider whether the present restrictions are sufficient to preserve a balance of trade that will enable us to pay for goods and services and to provide the interest payments due on the other side of the world.

I am inclined to agree with those who have complained of the abrupt manner in which the Government’s tariff policy has been put into effect. Of course, if the Government had given notice of the proposed alteration of duties its object would have been defeated, and this country would have been flooded with imports that should be excluded. I shall support the new duties. The Government had good reasons for introducing them, despite their effect upon Japanese trade with Australia. The total imports of cotton and rayon goods from Japan increased from 30,000,000 square yards in 1930 to 162.000,000 square yards in 1935.

Senator Sir George Pearce:

– They would have amounted to 200,000,000 square yards this year.

Senator LECKIE:

– Yes. The imports of these goods from Great Britain dropped from 187,000,000 square yards in. 1926 to 125,000,000 square yards in 1935. It would be absurd to suggest that the Government should have been content to see our trade with Britain absolutely destroyed, without making a strong effort to avoid it. Drastic steps will have to be taken to correct the balance of trade, which is strongly against Australia.

I was rather amused at the suggestion that difficulty would be experienced in completely manufacturing motor engines and chassis in this country. Some people say that, if the industry were established here, the supply of cars would soon exceed the demand, but I point out that, in Italy, two immense motor ear factories are kept in operation, although that country does not enjoy a large export trade.

Senator Duncan-Hughes:

– But it has a population of many millions.

Senator LECKIE:

– Yet, there are not so many motor vehicles in Italy as there are in Australia. If those who would be prepared to undertake the manufacture of cars in Australia received sufficient protection to guarantee that their capital would not be wasted, the enterprise would be’ successful. I am surprised that the Government did not take into their confidence some of the leading manufacturers in Australia when it launched its proposal to enable motor engines and chassis to be made in this country. Why were not the chambers of manufactures consulted ?

Senator Badman:

– Did the Government not consult them?

Senator LECKIE:

– No ; there ‘ was merely a departmental investigation. The Government should have taken into consultation those who could have given it expert advice on the matter, as was done in connexion with the legislation passed with regard to dried fruits and butter, and wool. The Australian manufacturers should not be treated as pariahs. Considerable sums of money will be required to enable this industry to be established successfullynot £3,000,000 or £4,000,000, as has -been suggested in some quarters - but between £750,000 and £1,000,000. People who would be willing to find that money require a guarantee that three or four years hence, when the bounty disappears, the Australian market will be largely preserved to them. Propaganda put forward by powerful interests in Australia to prevent the establishment of the industry is so ridiculous that it ought to help the people generally to make up their minds that the importers are getting too much out of the motor industry.

Senator BADMAN:
SOUTH AUSTRALIA · CP

– Do not the manufacturers get any benefit from motor-body building?

Senator LECKIE:

– Yes, but they desire that motor cars should be completely manufactured in this country. A visit to General Motors-Holden’s new factory at Port Melbourne convinces one that firms with the experience necessary for this work are already established in

Australia. The beams of the chassis are rivetted together, the engines are placed in position, the bodies are mounted, and the whole car completely assembled by the approved mass-production methods.

Senator Duncan-Hughes:

– Has any great motor car undertaking been established in Great Britain or the United States of America by means of a government bounty?

Senator LECKIE:

– I do not think so.

Senator Duncan-Hughes:

– If the proposal is economic, why not let the enterprise be conducted without a bounty?

Senator LECKIE:

– When the motor industry was established in the United States of America, there were very few motor cars in Australia. At that time it would not have been profitable to commence the manufacture of cars in this country. Since then, however, Australia has ‘become motor car minded, and I believe that at the present time there are in proportion to population more cars in Australia than in any other country in the world except the United States of America. An analysis of the figures in relation to the number of cars in the various countries of the world would reveal that not only in proportion to its population, but also in actual numbers of cars, Australia is ahead of many other countries which have five or six times its population. There is no miracle in the manufacture of motor engines, or chassis. All that is needed to establish the industry successfully in Australia is the assurance of a certain’ amount of stability. Those interested in the establishment of the industry in Australia only require a guarantee that a fair proportion of the market will be reserved for them. It is true that we shall not turn out as many types of cars as are now available on the market ; I think it will be found that four or five models will be quite sufficient to meet Australia’s transport requirements for both business and pleasure. Some of the propaganda indulged in by certain vested interests against the manufacture of motor cars in Australia has been, to say the least of it, amazing. First it was said that an Australian-built car would cost £200 more than a comparable imported car. Great emphasis was also laid upon the statement of the number of men who would be thrown out of employ ment in the motor industry because of the diminishing numbers of cars that would be used. If cars were manufactured in Australia the additional cost which each purchaser would have to bear would not exceed £40 ; taking the bounty into consideration, it would probably be even less than that. It may take two years to establish the industry successfully in Australia; but after it had been established on a firm footing its products would be equal to those of any other country in the world. Although I believe that the Government initiated this policy in the wrong way, I commend it for its efforts to establish such an important industry in Australia. When the industry has been firmly established in Australia I believe that the price of the Australian product will not be 10 per cent, above present prices for comparable imported cars. The imposition of that small burden on Australian transport users will be more than offset by the increased employment which will naturally flow from the establishment of the industry in Australia. Again, from a defence point of view the establishment of the industry in Australia would be well .worth while.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– I join with the Leader of the Opposition (Senator Collings) in protesting against the introduction of a bill of this importance during the dying hours of the session; it was worthy of a better position on the notice-paper. Tariff -making has two objectives, one to protect the Australian manufacturers, and the other to produce revenue. The schedule we are now considering, I take it, imposes duties of a protective rather than a revenueproducing character. The object behind its introduction has been to foster trade with Great Britain, the dominions and goodcustomer countries, and also to give to Australian engineers an opportunity to manufacture some of the articles which at present are imported. Although the duties have been in operation for six months, in my opinion, it is too early yet to form any reliable opinion as to their ultimate effect. It is ridiculous to say that we could establish the motor car industry in Australia in such a short period. It is also too early yet to attempt to judge the advantages or disadvantages of this drastic attempt to divert to good-customer countries trade which formerly went to Japan and the United States of America. By the intense competition which it was able to offer in the Australian market, Japan was gradually filching from Great Britain a large share of its trade in textiles and cotton piece-goods.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Not very gradually !

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– That was the real reason behind the formulation of the trade diversion policy. Great Britain has always been regarded as Australia’s best customer, and it seems likely to continue to enjoy that preeminence. Therefore, we cannot afford to allow Japan to encroach unduly on the British manufacturers’ market in Australia. It was not only what Japan sold to Australia which agitated the mind of the Government; a weighty consideration was that Japan was destroying the market which Australia had in Great Britain. There has been much controversy over the new duties, and I think the people of Australia are to be . congratulated upon having taken it in good spirit. I feel sure that the people generally believe that the Government acted in the best interests of the nation as a whole. Most of the criticism of the Government’s policy has come from people engaged in trade in Australia; very little of it has come from the section most concerned, the buying public. Although perhaps our traders have had some cause for complaint, I do not think that the manufacturers in the United States of America have been treated unreasonably. Honorable senators will remember that when the new duties were first tabled, Australian traders were promised that goods ordered before a certain date and goods absolutely necessary for Australian requirements could easily be granted admission under licence. I have brought before the Government several requests for the issue of licences to import certain goods, but without much success. Traders who have been importing from the United States of America for the last ten or twelve years certain lines for which they have built up a market in Australia, have been treated rather unfairly. The Go vernment should have been content to reduce their total imports by one-third or one-half; but complete prohibition of the importation of such goods is, in my opinion, dishonouring the promise made when the new duties were tabled, that certain goods could be imported into Australia under licence.

Senator HARDY:
NEW SOUTH WALES · CP

– Did the United States of America do that in regard to wool ?

Senator JAMES McLACHLAN.Two wrongs do not make a right. Goods ordered from overseas countries before the 22nd May and shipped before the 30th June were allowed to come in. There has, however, been some difference of opinion as to what constituted an order. Australian traders generally held that if their orders left Australia before the 22nd May, they were entitled to have the goods admitted, but in some instances, it has been held that the order had to be in the hands of the foreign exporter by that date for the undertaking to apply. The different interpretations have caused confusion and inconvenience. A legitimate trader who pays cash for an article in the United States of America and, in addition, freight and insurance on it, suffers hardship if, only because his order was not in the hands of the supplier on the other side of the world before the 22nd May, the article purchased by him is refused admission.

In articles in the press and elsewhere it has been contended that the Government’s action was inspired by the people of Great Britain, supported by the government of that country. I do not think so. Australia had to impose some restrictions.

Senator Duncan-Hughes:

– It could have acted in a number of different ways. For instance, it could have removed primage.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– It chose this way.

Senator Duncan-Hughes:

– It acted unwisely in doing so.

Senator JAMES McLACHLAN.That is a matter of opinion. Britain is Australia’s best customer, and is likely to remain so. It is, therefore, our duty to assist Britain as far as possible.

Senator Duncan-Hughes:

– Britain would not have cared if Australia had acted otherwise.

Senator Sir George Pearce:

– Britain did the same for Australia in connexion with Argentine meat.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– I do not think that any honorable senator will deny that Australia gained a distinct advantage from the Ottawa agreement.

Senator McLACHLAN:
SOUTH AUSTRALIA · NAT

– Textiles were largely the basis of the Ottawa agreement.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– Senator Johnston quoted an extract from a speech by Mr. Menzies in which that honorable gentleman said that there was danger of placing too much reliance on the British market, because it was a contracting market. Statistics, however, do not support Mr. Menzies, for whereas Britain took 38 per cent, of Australia’s export produce in 1931, the proportion grew to 45 per cent, in 1932 and to 48 per cent, in 1935. The figures for the current year are better still.

It is probably unwise to discuss in detail Australia’s trade with Japan while negotiations with ‘that country are still in. progress, but I am impelled to speak of wool because it has been mentioned by several other honorable senators. No one can say that wool prices are unsatisfactory, although, naturally, growers would be glad to receive more for their clip. The present prices are good.

Senator Sir George Pearce:

– Long may they continue so!

Senator JAMES McLACHLAN.Honorable senators probably know the abstemious habits of the people of Adelaide. In that city numbers of business men, including some wool-brokers, meet for a cup of tea or coffee about 11 o’clock each morning. When in Adelaide some months ago I strolled into a restaurant, where I found that the main topic of conversation was the new tariff schedule which had recently been introduced. On all sides I heard the remark “ At the next wool sale prices will be down 3d. per lb.” The first wool sale following the introduction of the new tariff schedule was held at Adelaide, and it is to the credit of the pastoralists of that State that they sent along good supplies.’ Fortunately prices were satisfac tory ; but still the critics said, “ Wait till the September sales, and it will then be found that prices have fallen.” At the September sales it was found that prices were a little firmer than in the previous year. The conversation then took a different turn, and when the good prices for wool were mentioned the reply was “Prices would bemuch better if Japanese buyers were in the market.” That belief still exists. What the price of wool would be were the Japanese buyers in the market is as much a matter for conjecture as would be the price of ice cream in Hell.

Senator Sampson:

– Or the price of beer there.

Senator JAMES McLACHLAN Not all the inhabitants of that region are drinkers of beer, as the honorable senator will find out. If we turn to wheat, we find that in 1933 Australia exported to Japan about 19,000,000 bushels, and in the following year a similar quantity. In 1935 the exports were about 16,000,000 bushels, making a total of about 53,000,000 bushels in three years. Of that quantity, approximately 46,000,000 bushels was gristed for flour and sold in the East Indies. Japan therefore became a competitor of Australia in the flour market of the East.

That brings me to another point. We must maintain our standards of living. Japan, with its abundant supply of cheap labour, was able to buy our wheat, grist it, and sell the flour in our markets at a lower price than that for which we could sell. Of course, the currency had something to do with that. I trust that we shall be able to maintain our living standards. I intend to do my utmost for that end. We ought also to assist Great Britain to maintain its living standards. This being so, I am not prepared to surrender our markets to countries with cheap labour. I do not think it would be fair to do so.

There is one aspect of this tariff which requires some elucidation. I trust that when the Minister replies he will explain the purpose and effect of the timber duties. It will be remembered that the Tariff Board was requested, in 1933, to inquire into the timber industry, but the terms of reference on that occasion must have been lost, for it was 1936 before the board’s recommendations reached us. The Tariff Board is our guide in matters of this kind. 1 wish now to refer for a few moments to the proposal to manufacture motor cars in Australia. This is one of the purposes underlying the adoption of the trade diversion policy. I have been astounded to-day to hear practically every honorable senator who has discussed this subject, with the exception of Senator Leckie, assert that motor cars cannot be manufactured in Australia at a price at which our people can buy them. I claim that the Australian workmen are equal to those of any other country in the world. It is a libel upon them to say that they have not sufficient engineering ability to make motor cars. All sorts of engines are already being manufactured in this country, and I can see no reason why motor-car engines should not be produced here. We have the most uptodate motor-body building factory in the southern hemisphere, and probably in the world, and as we can manufacture motorcar bodies so successfully, I cannot understand why honorable senators should imagine that we cannot achieve equal success in the manufacture of motor-car engines. It has been said that motor cars which cost £400 in Australia cost only from £100 to £120 in the United States of America. Surely that would allow us a sufficient margin. If we can successfully establish this industry in Australia, we shall provide a great deal of extra employment for our people. It is useless for honorable senators to place before us a mass of undigested figures, and hope to convince us thereby that motor cars cannot be manufactured satisfactorily in Australia. One honorable senator said to-day that it would be economical for the country to pay £200 a year to all the men who might be engaged in the manufacture of motor cars to enable them to go fishing so that we could continue to import motor cars from abroad.

Senator Duncan-Hughes:

– At any rate those men might do something to develop the fishing industry !

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– I think it was intended that they should sit on a wharf somewhere and fish. The development of the fishing industry was not in the mind of the honorable senator who made the suggestion. It is quite within the capacity of the people of Australia to manufacture here the motor cars they need. If the Government’s policy achieves that result it will have been well worth while.

In the main, I believe that the new tariff policy will be beneficial to the country, though I agree that it is too early yet to judge its full effects. In this instance, we must “ wait and see “. I have no doubt that before very long satisfactory trading relations will be re-established with Japan. I am thoroughly convinced that Japan has been buying Australian wool. I have not attended a wool sale in South Australia this year, but I have attended two sales in other States, and I have seen the Japanese buyers there just as interested in the staple and catalogues as ever they were. It is true that they were not bidding for wool, but I cannot believe that Japanese merchants would send buyers from Japan to Australia simply to look on. I believe that Australian wool has been going to Japan, for those men were not doing nothing; they were busy.

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

– in reply - I wish to impress upon honorable senators that in discussing the textile industry to-night we are dealing with a business the ramifications of which go far below the surface of things. This is an international, and not merely an Australian, problem, and sooner or later it will have to be settled on an international basis. I trust that when discussions of that magnitude occur they will be conducted in the same spirit as the discussions between Japan and Australia. We are faced with a conflict of living standards. The standards of the East are different from those of the West. Nature has contrived that certain races may live in comparative comfort on a basis which would spell want and misery to the people of other races. When the Ottawa agreement was made, Australia promised the Mother Country certain benefits. Had the trading position, which was rapidly developing in Australia, been allowed to continue, we should have found it impossible to afford those benefits to Great Britain. I wish to pay a tribute to the great skill and enterprise of our neighbour in the north. The Japanese people have within 35 years of first seeing a modern battleship proved their ability to make one. Every mechanical contrivance with which we have any acquaintance has been examined by the Japanese and many have been installed in that country. I pay tribute to the skill, energy and ability of the Japanese people to install and control modern machinery, and particularly machinery required for the manufacture of textiles. But Australia could not stand idly by while the trade of Great Britain was being diverted in other directions, particularly as we had assured Great Britain that a substantial proportion of our trade would continue to he available to its manufacturers. Consideration of this kind led the Government to introduce these tariff proposals without consulting the Tariff Board, just as some years ago it became a party to the Ottawa agreement without consulting the board.

Senator Collings:

– It did not even consult Parliament.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Any government worthy of the name would have done what this Government has done. It must be remembered that in respect of 70 per cent. or 80 per cent. of the items affected by the Ottawa agreement the tariff duties were not protective, but revenue producing. Consequently it was not necessary that variations of such duties should be dependent upon recommendations from the Tariff Board. Honorable senators should recall the benefits which Australia has received under the Ottawa agreement. Since that agreement ‘became operative our exports of primary products to Great Britain have increased as follows: - Butter, 39 per cent. ; cheese, 107 per cent. ; eggs, 167 per cent. ; beef, 67 per cent. ; mutton and lamb, 50 per cent.; pork,330 per cent.; apples, 31 per cent. ; pears, 106 per cent. ; canned fruits, 81 per cent. ; barley, 271 per cent. ; wheat, 27 per cent. ; sugar, 39 per cent. ; wine, 43 per cent. ; and pig- lead, 73 per cent. I remind honorable senators who have said that the Government’s trade diversion policy was embarked upon at the request of the Government of the United Kingdom, that in December, 1934, the Minister direct ing negotiations for trade treaties commenced negotiations with Japanese trade representatives in this country, which were continued during 1934 and during the following years in a determined effort to come to a settlement acceptable to Japan and Australia. It is unreasonable to suggest that pressure was applied by the British Government; the Commonwealth Government acted solely on its own initiative in an endeavour, amongst other things, to give full effect to the Ottawa agreement.

Senator Duncan-Hughes:

– Only in the matter of primage; the Commonwealth had no other definite obligations in that regard.

Senator Sir George Pearce:

– The Government could not overlook the spirit of the agreement.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– In view of the fact that British textile manufacturers were exporting from £3,000,000 to £4,000,000 of their products to this country it was naturally desired that they should have a reasonable market in Australia, particularly as there was a possibility of the lighter woollen fabrics manufactured in foreign countries also entering into strong competition in Australia with similar British products. I pay tribute to the energy and intelligence displayed by the Minister directing negotiations for trade treaties, who has devoted many months of strenuous labour to his work in an endeavour to bring the negotiations to a satisfactory conclusion. The Government takes full responsibility for what has been done, and fully believes that its proposals, which are supported by influential sections of the community, will prove of great benefit to Australia generally. It was also suggested that the Government should have obtained a report from the Tariff Board before increased duties were imposed, hut the Tariff Board inquires into and reports upon proposed protective duties, and not upon duties imposed for revenue purposes.

Senator Duncan-Hughes:

– The Tariff Board Act does not so provide.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– There is no obligation upon the Government to consult . the Tariff Board in respect of revenue duties, and recently a reference was returned to the Government from theboard because the board said that it was not expected to determine matters of policy. Senator Hardy, who suggested that the duties embodied in the schedule are unnecessarily high, should remember that some of them may be varied by proclamation, but they must be ratified by Parliament within a specific period. I do not propose to deal with other aspects of the Government’s trade diversion policy other than to say that the Government has no desire to antagonize any nation, and that whatever action it has taken has been in an endeavour to protect Australian industries and ensure that Great Britain shall receive a greater share of our textile trade.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clause 1 agreed to.

Progress reported.

page 2672

BILLS RECEIVED FROM THE HOUSE OF REPRESENTATIVES

The following bills were received from the House of Representatives, and, the Standing and Sessional Orders having been suspended in respect of each, were read a first time: -

Trade Agreement (France) Bill 1936.

Coinage Bill 1936.

Commonwealth Railways Bill 1936.

Income Tax Assessment Bill (No. 2) 1936.

Petroleum Oil Search Bill 1936.

Papua and New Guinea Bounties Bill 1936.

Customs Bill 1936.

Colonial Light Dues Collection Bill 1936.

Public Works Committee Bill 1936.

Cu stoms Tariff (Canadian Preference) (No. 2) 1936.

page 2672

BILLS RETURNED FROM THE HOUSE OF REPRESENTATIVES

The following bills were returned from the House of Representatives without amendment : -

Financial Relief Bill (No. 3) 1936.

Bills of Exchange Bill 1936.

Trade Marks Bill 1935.

page 2672

ACTS INTERPRETATION BILL 1936

Bill returned from the House of Representatives with amendments.

page 2672

HOUR OF MEETING

Motion (by Senator Sir George Pearce) agreed to -

That the Senate, at its rising, adjourn till 11 a.m. this day.

Senate adjourned at 3.33 a.m. (Thursday).

Cite as: Australia, Senate, Debates, 2 December 1936, viewed 22 October 2017, <http://historichansard.net/senate/1936/19361202_senate_14_152/>.

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