Senate
31 May 1940

15th Parliament · 2nd Session



The President (Senator the HonJ. B. Hayes) took the chair at 10.30 a.m., and read prayers.

page 1733

QUESTION

RECRUITING

Statement by Brigadier-General Lloyd.

Senator CAMERON:
Minister for Commerce · VICTORIA · CP

– I ask the Minister representing the Minister for the Army, whether the Government authorized, or approves of the following statement, reportedby the Melbourne Herald, on Thursday, the 20th May, as having been made by Brigadier-General W. H. Lloyd at a meeting of citizens, held at Geelong on the previous evening: -

If Australia did not have conscription, then the people should see that the voluntary service was equal to what conscripted service mightbe?

Senator FOLL:
Minister for the Interior · QUEENSLAND · UAP

– I have no knowledge of the speech said to have been delivered by Brigadier-General Lloyd, but it seems to me that he was hopeful that the voluntary system, which Australia has approved

Senator Cameron:

– I asked did the the Government approve of the statement?

SenatorFOLL. - The honorable senator asked his question in his own way. 1 intend to answer it in my way. BrigadierGeneral Lloyd is doing a very important work in securing recruits under the voluntary system for Australia’s war effort. I interpret that portion of his speech to which the honorable senator has directed attention to mean that he hopes that the voluntary system will be a success and will bring forward the requisite number of troops for the defence of Australia and assistance to the Empire.

page 1734

QUESTION

OIL SEARCH COMPANIES

Capital Issues Regulations

Senator ARTHUR:
NEW SOUTH WALES

– I ask the Minister representing the Treasurer - (1) How many companies registered in Victoria have been given permission to raise capital by public subscription for the search for oil; (2) what are the names of the companies; (3) what are their respective amounts of capital; (4) what are the dates on which permission was granted ?

Senator McBRIDE:
Minister without portfolio assisting the Minister for Commerce · SOUTH AUSTRALIA · UAP

– A question framed in similar terms was asked by the honorable senator a few days ago. In reply, the Treasurer said definitely that all such applications were confidential and that he did not feel disposed to release the information.

Senator Brown:

– Secret service!

Senator Arthur:

– The question I asked a few days ago was totally different.

The PRESIDENT:

– Order ! The Minister has supplied the answer. The honorable senator must not debate it.

Senator BROWN:

– I ask the Assistant Minister for Commerce whether the name of any company or every company which approaches the Government with an application for permission to raise capital is kept secret?

Senator McBRIDE:

– I have already intimated that it is the practice to regard all such applications as private and confidential.

Senator BROWN:

– Is it not a fact that information has been published in the newspapers in respect of certain companies which have made application to the Capital Issues Committee?

Senator McBRIDE:

– So far as I know, it is not a fact that the Treasurer has released any information in his possession concerning applications that have been made on behalf of various companies throughout Australia to raise new capital or increase existing capital. If such information has been published, it has not come from the Treasurer.

page 1734

QUESTION

AUSTRALIAN WHEAT POOL

Senator E B JOHNSTON:
WESTERN AUSTRALIA

– I ask the Assistant Minister for Commerce whether he can inform us when the next payment on wheat delivered to the 1940 pool is likely to be made and how much will be the advance? This information will be acceptable to honorable senators representing distant States, because upon our return we shall be besieged with inquiries about this matter.

Senator McBRIDE:
UAP

– The payment will be made as soon as practicable, and honorable senators will be advised at the earliest possible moment.

page 1734

QUESTION

MR. E. G. THEODORE

Senator BROWN:

– I ask the Leader of the Senate whether it is true, as stated in the press that, prior to his death, the, former Prime Minister, Mr. Lyons, approached. Mr. E. G. Theodore with a view to securing his services as organizer of the resources of Australia?

Senator McLEAY:
Minister for Trade and Customs · SOUTH AUSTRALIA · UAP

– I do not know.

page 1734

QUESTION

MILITARY GAMES

Senator ASHLEY:
NEW SOUTH WALES

– I ask the Minister representing the Minister for the Army whether in view of the revelations made in this chamber last evening by Senator Wilson with reference to the many disabilities encountered in training camps, due to the employment of red-tape methods, a thorough investigation will be made of the methods employed in all camps throughout Australia?

SenatorFOLL. - I gave that assurance last night when replying to Senator Wilson. On behalf of the Minister for the Army, I can say that a thorough investigation is made of all legitimate complaints. It is the desire of the Government that the whole of the machinery for the training of recruits should work as smoothly as possible.

page 1736

QUESTION

WOOL APPRAISEMENT CENTRES

Senator E B JOHNSTON:

– Can the Minister representing the Minister for Commerce inform the Senate whether the Government has yet approved of proposals to declare Albany and Gerald ton wool appraisement centres for the coming season?

Senator McBRIDE:
UAP

– The Government has not yet reached a decision in regard to that matter.

page 1736

QUESTION

WAR EQUIPMENT

Manufacture in Australia.

Senator BROWN:

– Has the attention of the Minister representing the Minister for Supply and Development been directed to statements appearing in the Daily Telegraph, Sydney, containing charges against the department in respect of the supply of Bren guns, tanks, aeroplanes and other war equipment? If so, will he ask the Minister to furnish a categorical answer to the charges, in order that the people may be informed about the position?

Senator FOLL:
UAP

– It is quite impossible for the Minister for Supply and Development to answer every charge that is made in the newspapers in connexion with his department. I can, however, say that the Minister and all members of the Government are doing everything that is possible to expedite the delivery of materials necessary for the defence of Australia.

page 1736

QUESTION

MARGINALWHEAT AREAS

Senator LECKIE:
VICTORIA

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

  1. On what grounds does the Minister base his statement that there are no marginal wheat areas in the State ofVictoria?
  2. If proof is given that there are such marginal areas, will the Minister reconsider his decision not to grant to the State of Victoria any part of the fund set apart for this purpose?
Senator McBRIDE:
UAP

– The Minister for Commerce has supplied the following answers : -

  1. The Minister has not made any such statement. He invited all States to submit plans for dealing with the marginal areas problem, but the State of Victoria did not submit an acceptable scheme. The onus of proof of the existence of a marginal areas problem is on the State governments.
  2. The decision already made is final.

page 1736

QUESTION

INTEREST-FREE LOANS

Senator DARCEY:
TASMANIA

asked the Minister representing the Treasurer, upon notice -

  1. Is it the intention of the Treasurer to disclose the source from which he expects to raise the interest-free loan of £5,000,000?
  2. Is it the intention of the Government to obtain this interest-free loan from the Commonwealth Bank?
Senator McBRIDE:
UAP

– The Treasurer has now supplied the following answer : -

  1. The source is the people of Australia. A continuous flow of money is being received by the Treasury from all sections of the community, who have expressed their desire to lend their money, interest free, to the Government for the duration of the war. Already more than £600,000 has come to the Treasury in this way.
  2. No.

page 1736

COMMONWEALTH INSCRIBED STOCK BILL 1940

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

page 1736

TRADE AGREEMENT (GREECE) BILL 1940

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator McLeay) read a first time.

Second Reading

Senator McLEAY (South Australia -

Minister for Trade and Customs) [10.43].- I move-

That the bill be now read a second time.

The notes exchanged by the Government and the Consul-General for Greece are the result of negotiations that have been in progress for some years. Although the abnormal circumstances now obtaining may affect the benefits to be expected from the agreement, that fact should not prevent it from being formally approved. The agreement may be described as a simple most-favoured-nation agreement. It does not provide for specific tariff concessions, but merely guarantees that Australian goods entering Greece and Greek goods entering Australia shall receive treatment not less favorable than that accorded to goods from any other foreign country. In practice this means that Australian goods imported into Greece will be charged duty under the minimum tariff instead of under a ten-fold maximum tariff as at present, and that Greek goods imported into Australia will enjoy the benefit of the operative section of the Australian intermediate tariff. Australian exports to Greece during the year ended the 30th June, 1939, totalled approximately £A.307,000 of which wheat and wool accounted for fA.238,000 and £A.61,000 respectively. An appreciation of the value of the Greek duty concession may therefore be obtained from a comparison of the approximate equivalents in Australian currency of the duties, inclusive of surcharges, on these commodities under each column of the Greek tariff-

In the past Australian wheat and wool have at times been admitted at the minimum rates despite the absence of an agreement, but such concessions were dictated by economic necessity and consequently were of a temporary nature. The present agreement will guarantee the continued application of the lower rates, not only to wheat and wool, but also to all other Australian products. The extension of the operative section of the Australian intermediate tariff, at present withheld because of the discriminatory treatment applied to Australian produce in Greece, will confer benefits on about 20 per cent., by value, of the goods normally imported into Australia from Greece. During the year ended June, 1939, imports from Greece were valued at approximately £A.15,000, the principal items being capers and olives, hides and skins, olive oil, sponges and magnesium oxide. For the past five years the balance of trade between the two countries has been in favour of Australia. The agreement, which contains the usual stipulation by which preferences grantedby Australia to British countries are to be maintained, is to remain in force for a minimum period of twelve months, and may then or at any time thereafter, be determined upon three months’ prior notice being given by either Government. Honorable senators will observe that the agreement is to come into force on a date to be fixed by mutual arrangement. This provision was incorporated in order that the agreement would not become effective until it had been approved by Parliament.

Senator COLLINGS:
QueenslandLeader of the Opposition

– This is an agreement which, under existing economic conditions, should be ratified by Parliament; but whether we shall always be able to benefit economically under it is a subject which we need not debate at this juncture. The Opposition will not oppose the passage of the bill.

Question resolved in the affirmative.

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

page 1736

SALES TAX EXEMPTIONS BILL 1940

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator McBride) read a first time.

Second Reading

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

.- I move-

That thebill he now read a second time.

The first purpose of this bill is to ratify an exemption, which was authorized by the Government to commence on and from the 3rd September, 1939, of goods which are purchased, imported or manufactured by organizations not carried on for the profit of individuals, such as the Australian Comforts Fund, the Lord Mayor’s Patriotic andWar Fund, New South Wales, the Young Men’s Christian Association, Salvation Army, and other similar organizations, for donation to, or for the use, comfort or recreation of members of the Defence Forces of the Commonwealth. The classes of goods which are covered by the exemption include : -

  1. Articles for the personal use and comfort of the forces, for example, socks, shirts, underwear, toilet requisites, &c.
  2. Marquees, tents, huts, established at camps and elsewhere for the use of members of the forces.
  3. Furniture and fittings for such huts.
  4. Equipment for indoor and outdoor recreation.
  5. Urns, cooking stoves, crockery, cutlery, &c., for serving food, &c., to the troops.

It is probably unnecessary for me to expound at any great length the virtues of the action proposed. Every one is well aware of the splendid service which is being rendered by organizations in their efforts to minister to the greater comfort, mentally and physically, of members of our fighting forces. The Government has not found it possible to extend the scope of the proposed exemption to individuals who may purchase goods for donation to the troops, not because the Government sees any material difference between the efforts made by individuals and those made by organizations; but because of a real practical difficulty in connexion with the purchases by individuals. The latter, as a rule, purchase small quantities of materials by retail at a point farbeyond the actual taxing point, and such purchases are made in hundreds of thousands of transactions. The identification of the sales tax in the selling price is almost impossible, and the amount, if ascertainable, discloses the retailers’ margin of profit. Organizations on the contrary buy on a much larger scale in considerably fewer transactions, and the basis of buying is, in most cases, different. The Government has the same admiration for individual effort as for organized effort, and it suggests that if the conditions prevail by which organizations could obtain exemption, individuals desiring to bring their transactions into line for exemption might do so by arranging them through a regularly constituted organization.

Provision is also made in the bill to extend exemption to goods for official use by the representatives of other nations in Australia. The present item covers trade commissioners and consuls, and the amendment now being made . is a natural result of this country’s progress as a nation of the world.

In the existing law an exemption is provided for exposed cinematographic films used to facilitate the circulation of international educational matter. The present item requires that a certificate of purpose be given. Since the original item was enacted, the certifying authority has been changed, and the clause now inserted rectifies the position.

The opportunity presented by the introduction of this bill has alsobeen taken to remove two anomalies which, the Commissioner of Taxation reports, are causing administrative concern, and, because of the difficulties of interpretation in their present form, appear to have been extended far beyond what the legislature originally intended should be covered. The goods concerned are shortbread biscuits and medicated confectionery, and the proposal is to withdraw the exemption in both instances. Exemption on shortbread biscuits was granted originally, not because it was thought that shortbread biscuits qualified for exemption by being a basic foodstuff, but because of their allegedly close association with the products of pastrycooks, most of which had been exempted. It was thought that some competitive anomaly would arise if the manufacturers of biscuits were asked to pay the sales tax on shortbread biscuits whilst pastrycooks might escape the tax on shortbread products sold as cakes; so an exemption was enacted for shortbread biscuits. But the last position has proved worse than the first. Claims have been made in respect of all types of biscuits merely upon the ground that they contain some “ shortening “. Probably any honorable senator, who has not attempted to define what shortbread is in Australian commercial circles, will wonder why any difficulty should be experienced. He will have in mind the product for which Scotland is famed. But let him not imagine that his task would end so easily. Climatic conditions, marketing conditions, the varying quality of the ingredients, and the diversified tastes of the people of the whole Commonwealth and of those within the various States, have all played a part, it is claimed, in giving Australian shortbread a standard not necessarily the same as that in Scotland. The Commissioner of Taxation at first invoked the aid of outside expert opinion, but found variations between experts, who, however, would favour the exemption of a very wide range of “ fancy “ biscuits which appeared to him to be quite incompatible with the intention of the legislature. He next tried a fairly liberal, though inflexible, formula of ingredients, only to be met by flat refusal of manufacturers of certain biscuits whose products were deficient in some one or other ingredient, to pay tax. The Commissioner of Taxation now reports that in his opinion the exemption is not capable of satisfactory administration, and that the alleged trade anomaly which was feared when the exemption was granted will not, in fact, be experienced. The Government accordingly proposes to withdraw the exemption from Monday, the 3rd June, 1940. The annual benefit to the revenue from this course is estimated at £40,000.

So far as medicated confectionery is concerned, exemption is obtained under item 38 of the Exemptions Act under the heading of “ drugs and medicines for use in the prevention, cure or treatment of sickness or disease in human beings “. Medicated confectionery may be broadly divided into two classes, viz. -

  1. Products which have a definite therapeutic value, which are marketed for medicinal purposes only, and which are definitely unsuitable for consumption as sweetmeats, for example, “ laxative chocolates “, “ chocolatecoated worm tablets “, “ iodized throat tablets “ digestive lozenges “, &c.; and

    1. products which, although they may contain a medicament (for example, menthol, liquorice or eucalyptus), and make some claim to therapeutic properties, are designed to appeal to consumers chiefly as sweetmeats, for example, barley sugar, menthol jubes, honey and glycerine jubes, eucalyptus jubes, voice jubes, &c.).

Acting on legal advice, the Commissioner of Taxation has allowed claims for exemption of medicated confectionery if it contains one or more active medicaments and is sold in containers which bear a definite printed claim that the contents are for the treatment of certain diseases. It is apparent, however,” that exemption is being obtained on the abovementioned grounds in respect of a wide range of goods which would not ordinarily be classified as drugs or medicines and which are purchased by consumers primarily as sweetmeats, for example, barley sugar, honey and glycerine pastilles, throat jubes and pastilles, menthol pastilles, eucalyptus chips or drops, Irish moss gums or jubes, menthol and eucalyptus pastilles, black-currant and glycerine pastilles, cough drops, gums and pastilles, butter menthol drops, &c. These products secure exemption because of the inclusion therein, in small quantities, of some medicament, and because they are claimed to be for the relief of sore throats, &c. Other like products, for which no medicinal claims are made, are subject to tax. It. is considered that medicated confectionery of this nature is outside the intended scope of the exemption, and it is certain that the loss of revenue at present being sustained in this respect will be increased as manufacturers become aware of the conditions under which they can exploit exemptionof their products. It is estimated that the additional revenue which will be gained by the withdrawal of this exemption will amount to £20,000 per annum. Medicated confectionery will become taxable on and from the 3rd June, 1940.

I commend the bill to honorable senators. I point out that, apart from the item relating to goods for the use of members of the defence forces and representatives of other countries, the pro- posals will remove anomalies, and, at the same time, increase the annual revenue from sales tax by £60,000.

Senator COLLINGS:
QueenslandLeader of the Opposition

– 3 hope- that I shall not be out of order in saying at this stage something which 3 shall probably be obliged to repeat a number of times during the day. It is regrettable that bills of this kind, and others, which we anticipate will ba brought before us later, should be submitted to us in such circumstances that we must consider them immediately, without having first been given an opportunity to study their contents. This is an intricate measure. I am not unmindful of the difficulties confronting the Government in getting its business through the House .of Representatives. But such difficulties appear to be inseparable from the conditions which prevail in this Parliament at the moment, and, apparently, always prevail when we are nearing the hour to go into recess.

We shall not oppose this measure. Its two main objects are, first, to exempt goods which are used as comforts for our Defence Forces, and, secondly, to remedy certain anomalies involving administrative difficulties which departmental officers come up against in the course of their work’. With the first purpose of the bill, that is the ratification of an exemption which was authorized from the 3rd September, 1939, of goods purchased, imported or manufactured by organizations not carried on for the profit of individuals, as is the case in connexion with goods handled by the Australian Comforts Fund, the Lord Mayor’s Patriotic War Funds, the Young Men’s Christian Association and the Salvation Army, I am in accord. In this respect, however, I confess to the Assistant Minister (Senator McBride) that I foresee difficulties arising, although I hope that they will not be insurmountable. [ wish to know whether any precaution will be taken to supervise the work of the thousands of individuals connected with funds and organizations of the kind I have mentioned. Undoubtedly these bodies are doing exceptionally worthy work. However, in Queensland during the last war, so much abuse occurred in connexion with appeals of this kind that the Government of that State was obliged to take over complete control and to refuse to allow any appeal to be issued except by people who were specifically authorized to do so. Close supervision of this work must he exercised in order to ensure that none of the goods, or donations, handled by the thousands of persons connected with these funds are used for purposes other than those for which they are collected. The Assistant Minister will readily perceive how easy it is to defeat the real object of these funds. Not only because of the complexities involved in the sales tax, but also because it is an indirect tax, the Opposition does not agree with the principle of it. However, the Government urgently requires this revenue at the present time, and these difficulties must be faced. Consideration of measures of this kind, as I said earlier, is not facilitated by the practice of the Government to rush through these measures during the closing hours of the session.

With regard to the second purpose of the bill, I agree that many anomalies exist and that they should be cleared up as they are met with. Manufacturers have no patriotism in their souls. Their one god is profit. Immediately medicated sweetmeats, for instance, are exempt from sales tax, confectionery manufacturers get up to all the tricks possible in order to escape the tax. We find now that glucose is included in barley sugar. I again urge the Government to face up to its responsibility to ensure that the charitable and patriotic appeals to which I have referred, and which aru meeting with such a splendid response in every part of the Commonwealth, are not injured by the tendencies of individuals who are not inclined to act honestly- in associating themselves with such work.

Senator CAMERON (Victoria) [11.10 j. - I protest against the Government’s attempt to rush through a bill of this kind without giving honorable senators ample opportunity to deal with it intelligently. In moving the second reading, the Assistant Minister for Commerce (Senator McBride) made a very long and involved statement. No great mental effort was required on his part to make that statement. I assume that it was prepared for him by departmental officers, but when the statement appears in Hansard, readers will infer that the Assistant Minister for ^Commerce had given considerable thought to the matter, and had gone thoroughly into every detail of the measure in explaining it to the Senate, This procedure is a sham. I am prepared to assist the Government within reason, but when a procedure of this kind is adopted, each honorable senator should be provided with a copy of the Minister’s statement in order that he may be enabled to follow clearly what the Minister is saying. Only in thi3 way can wo be enabled to discuss intelligently a measure that is rushed through all its stages as quickly as possible. One can only conclude that the intention of the Government in following this procedure is to rush through the bill, regardless of whether or not it is given due consideration. Measures treated in this way may be perfectly harmless, but on the other hand a particular measure may be exceedingly harmful. If an honorable senator does not demand an . opportunity to consider legislation on its merits, he must admit that he is merely a “ Yes “ man, in the sense that he is bluffed and stampeded by the Government into acquiescence. Personally I am not prepared to be classed in that category. If the Government expects to receive a reasonable measure of assistance from me in dealing with measures of this kind, I ask it to reciprocate by helping me to understand its legislation. When copies of the second-reading speeches are being made for Ministers and for the Leader of the Opposition, it is quite easy to run off additional prints for the use of honorable senators. With that information before us, we would be able faithfully to discharge our responsibilities. We are not able to do that at present, and so long as we submit to inconsiderate treatment, we shall be merely animated cogs in a political machine, and not very animated at that. I, for one, am not prepared to submit. I enter an emphatic protest now, and I ask the Government to take notice of it. Many bills have been passed through this chamber without discussion, because we were told that the Government desired their speedy passage owing to the pressure of war legislation. We took the Government’s statement for granted, but I am afraid that because we have taken so much for granted, in the future we shall be expected to take everything for granted. I assure the Government that I shall not allow that to happen. I shall repeat this protest on every possible occasion, unless the Government is prepared to allow me reasonable facilities to examine its legislative proposals.

I am not at all impressed with the socalled exemptions provided for in this bill. On paper, the principle of granting exemptions would appear to be a workable proposition, and it would seem that the Government is actuated by only the highest motives in granting exemptions where it believes that they are warranted. However, it is a perfectly easy matter for a retailer, should he be so disposed, to evade the exemptions, by increasing the prices of the lower-priced articles which are exempt, and lowering the prices of the higher-priced articles on which the . tax is payable. As the Leader of the Opposition (Senator Collings) said, unless this matter is handled in the proper manner, further anomalies will arise, and other delays and amendments will be necessary. The real benefit, which is the object of these measures, is not given. For that reason I am not impressed with the bill at all. I am ai a disadvantage in offering criticism, because I have not had an opportunity to study the bill closely, or to examine the case presented by the Assistant Minister for Commerce. Ministers frequently complain that they are unfairly criticized and that legislation is not debated on its merits, or in the way which the people have a right to expect. The blame for that lies with the Ministers themselves. They must expect mistakes to be made, and at times they must expect unfair criticism. That would not occur if the Ministers did not take so much for granted, and did not expect that we, on this side of the chamber, and their own colleagues, should calmly step into line whenever the Government calls the tune. That sort of thing shall not continue. If the Government desires to get through its business expeditiously, it must pave the way for smooth working in this chamber. Ifit is not prepared to do that, I shall not be willing to help in any way.

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

in reply - I assure the Leader of the Opposition (Senator Collings) and Senator Cameron that whilst the Government is desirous of disposing of business as expeditiously as possible, it does not wish to prevent full consideration of all legislation. The Government does not want honorable senators to believe that owing to a possible shortage of time, they must agree to its proposals without debate.

The Commonwealth has not in fact taken any steps to control certain patriotic efforts that have been made in the various States, although in Queensland the State Government has taken action to exercise full control over such activities. The Commonwealth has brought in a system which it believes will ensure that there shall be as little exploitation of the exemptions as possible. The system provides for the issuing of certificates by duly appointed officers, and the making of false declarations in those certificates is an offence punishable under the Crimes Act. The exemptions have been made retrospective to September of last year. The department has found no undue administrative difficulties, and so far as we know, there has been no evasion of these exemptions.

I recognize that it is difficult for honorable senators to assimilate second-reading speeches if they have not copies in front of them. Fortunately there are sufficient copies of the second-reading speech on the next bill to meet the requirements of honorable senators. The request that has been made by Senator Cameron will be noted, and I am sure that in the future the Government will meet the wishes of honorable senators, so far as may be practicable.

Question resolved in the affirmative.

Bill read a second time.

Clauses 1 and 2 agreed to.

Clause 3 (The schedule).

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I should like a little more information from the

Assistant Minister in regard to a question that has been agitating the minds of many people in South Australia, namely the provision of refrigerators for military camps. Is that matter sufficiently covered by proposed new item 81a? If it is not I suggest that an amendment be made. Also, I assume that clause 4 of the bill makes the amendments retrospective, because I know that, following upon representations made by certain members from South Australia, the Taxation Department granted an exemption in this case. The refrigerators are manufactured in Australia, and have been donated for the comfort of troops in military camps. Sales tax should not be charged on them.

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

– I assure the honorable senator that the clause does cover the refrigerators, and that exemptions have already been granted on a number of refrigerators used for the purpose which he indicated.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Clause 4 covers them?

Senator McBRIDE:

– Yes. And the same clause makes the exemptions retrospective to September of last year.

Clause agreed to.

Clause 4 agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 1741

SALES TAX ASSESSMENT BILL (No. 1) 1940

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator McBride) read a first time.

Second Reading

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

– I move -

That the hill be now read a second time.

Thebill is designed to remove certain anomalies in the existing law which are at present causing serious and unjustifiable loss of revenue; they also present features of administration which, cause the incidence of the tax, in certain circumstances,, to be uneven and inconsistent. The first proposal is that section 17, sub-section 2, be amended to delete the excepting words thereof. In 1936 a suggestion was made in legal circles that the then existing legislation gave no authority for the collection of tax from a person who manufactured goods and applied them to his own use, unless the goods were of a class which that taxpayer himself sold in the ordinary course of his trade.

The law was therefore amended by inserting sub-section 2 of section 17 which resolved the expressed doubt by adding the words -

For the purpose of this section goods manufactured in Australia by a taxpayer and applied to his own use means goods manufactured in Australia in the course of carrying on a business and applied by the taxpayer to h*is own use whether for the purpose of that business or for any other purpose and whether or not those goods are of a class manufactured by that person for sale.

But so that the law when adjusted to remove the disability might not err in the opposite direction and cause tax to be payable on all sorts of semi-manufactured goods used in the course of manufacture of other goods, an exception was made in the following terms: - but shall not include any goods so manufactured and applied if the taxpayer establishes to the satisfaction of the commissioner that goods of the same class and for the same particular class of use are not manufactured in Australia by the taxpayer or by any other person, for sale or for supply to some other person in the circumstances specified in subsection 4 of section 3 of the act.

It was thus hoped that full legal authority would be given to the collection of tax on those goods which a manufacturer made for his own use, but which otherwise he would have had to purchase. I t was also hoped that those amendments would not cause tax to be payable upon other goods used as aids, but which were of a non-commercial character, for example, jigs, certain types of gauges, and tools.

It soon became apparent, however, that the terms of the exception offered a means of establishing freedom from tax for a class of goods which the exception was never intended to cover. Notwithstanding the fact that the law places upon the taxpayer the task of establishing compliance with the conditions of the excepting provision, and that the Commissioner of Taxation has required rigid adherence to a comprehensive programme of proof, be now estimates that plant and machinery of an annual value of £400,000 is escaping the tax. At the present rate of tax, the sum lost to revenue in the forthcoming year would be £33,000.

The class of goods which now most commonly forms the basis of claims for freedom from tax is machines, machine tools, dies, etc., which are of such high precision finish, or contain some manufacturing secret, that they are not procurable in the ordinary course of commerce in Australia. Manufacturers are, therefore, confronted with the alternatives of importing their requirements or making the goods themselves. Where they import the goods, sales tax is payable upon them, but, when they themselves make them they escape .payment of the tax. In the circumstances it is considered that the excepting words should be deleted, and the bill provides for this. Honorable senators who may have fears that this withdrawal will require the Commissioner of Taxation to levy tax on the incomplete tools or jigs earlier referred to, are reminded that the section applies to “goods manufactured in the course of carrying on a business”, and it is believed that there is sufficient safeguard against such fears in the fact that, first the articles taxed must be “ goods “, and, secondly, they must be “manufactured “.

The next proposal contemplates an increase of the sale value of goods which are made by a retailer wholly out of taxpaid materials, and which are treated by him as stock for sale by retail. At the present time the proviso to section lS (2) of the Sales Tax Assessment Act (No. 1) provides that the taxable sale value of goods so made shall ba the amount of wages paid in respect of the manufacture of the goods, plus 20 per cent, of that amount. Thorough investigation has shown that this basis is unduly low, and it is now proposed that the percentage to be added to manufacturing wages shall be increased from 20 per cent, to 75 per cent. At the same time, it is proposed to give taxpayers the option of paying tax either on this sale value, or upon a wholesale selling value ascertained in accordance with the ordinary provisions of the law. This lastmentioned factor will preclude any hardship from arising in any case in which the addition of 75 per cent. to the wages cost may result in a value in excess of a fair wholesale selling price.

Associated with the foregoing is a further proposal to provide a definite and stable sale value for goods made up for retailers who supply tax-paid materials to “ outside “ manufacturers. Difficulty has been encountered in determining the sale value upon which retailers should account for tax, and in some instances the department has been obliged to accept payment on values representing merely the cost of making up the goods. Some retailers originally represented that, as tax had been paid on the materials, and on another person’s charge for making up, the total sale value upon which tax was so paid was generally equivalent to the amount for which comparable goods could be purchased by a retailer from a wholesale manufacturer. This view, however, has been proved by investigation to be unsupported by fact. Persons who make up the goods in question are, to a considerable degree, home workers, who work in intense competition on margins of profit which earn them a bare living. In other cases, the “ makers up “ are persons of alien birth, who set up in business with nothing more than a few machines and who, by dint of long working hours and keenly cut prices, endeavour to gain a footing in the manufacturing activities of this country. The charges made by these manufacturers to the retailers do not include a wholesaler’s normal gross profit. These traders do not have to take into account the legitimate overhead charges involved in the business of a wholesale manufacturer, who carries the expense and risks associated with the buying of materials, and with the selling of fashion goods, and whose factories are conducted upon high standards to conform to the present ideal of social welfare.

After full investigation it has been concluded that, in general, a retailer, in paying tax on cost of materials and mak ing up charges, is paying tax on total values equivalent to the wholesale manufacturer’s costs of corresponding goods, but the wholesaler is paying tax on his sale price of those goods, which naturally includes his profit as well as costs. The present position is thus anomalous. It is considered that a balance would be achieved by requiring retailers in these cases to pay tax on sale values equal to the making-up charges, plus 33 per cent. This is provided for in the bill. These two amendments to section 18 of the act will result in the receipt of additional revenue, estimated to amount to £32,000 per annum. The bill is commended to honorable senators as a measure which will remove anomalies and practical difficulties, and will serve to increase the revenue to the amount of approximately £65,000 per annum.

Senator COLLINGS:
QueenslandLeader of the Opposition

.-To avoid repetition, my remarks regarding the immediately preceding bill may be taken as being applicable to this measure also. The Opposition is always glad to support exemptions from tax, and it is not pleased when indirect taxes are increased, but anomalies will frequently have to be rectified while the sales tax remains in operation.

SenatorFRASER (Western Australia) [11.39]. - I understand that sales tax does not apply to steel beams used for building purposes, but is imposed on steel rods used for reinforcement purposes.

Senator McBRIDE:
Assistant Minister for Commerce · South Australia · UAP

– The steel beams are subject to the tax, but the fabricated rods used for reinforcement purposes are exempt. The beams have carried the tax since the commencement of this legislation, but, in 1936, steel rods and certain other building materials were exempted in order to encourage the building industry.

Question resolved in the affirmative.

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

page 1743

MOTOR VEHICLES AGREEMENT BILL 1940

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator McLeay) read a first time.

Second Reading

Senator McLEAY:
Minister for Trade and Customs · South Australia · UAP

– I move -

That thebill be now read a second time.

This bill has been introduced for the purpose of approving the execution of an agreement between the Commonwealth and Australian Consolidated Industries Limited, with respect to the manufacture in Australia of engines and chassis for motor vehicles. I think it desirable to outline briefly the action which has been taken over the last four years by successive governments to establish the manufacture in Australia of motor vehicle engines and chassis.

In 1936 the Lyons Government decided that every effort should be made to establish the manufacture of motor engines and chassis in Australia. An offer was made to pay bounty on engines at a commencing rate of £30 a unit, and to grant tariff protection on chassis parts which might be manufactured. Other decisions made at that time related to the setting up of a national laboratory to assist Australian manufacturers and prospective motor car and aeroplane manufacturers in the technical difficulties which were expected to confront them. In addition, it was also decided that a substantially increased vote should he made to assist oil exploration in Australia. These decisions were part of a comprehensive plan to safeguard our overseas credits, to relieve unemployment, to afford increased opportunities for the employment of Australian youth in the highly skilled trades, and to encourage a much more rapid industrial expansion.

No substantial response was made to the offer of the Lyons Government. It was quite evident that the major companies were not prepared to undertake manufacture on a basis envisaged by the Lyons Government. Endeavours were made to interest British manufacturers. Two British companies were sympathetic. The head of one of these companies stated in 1938 that owing to his company’s concentration on large scale aero plane manufacture, it would be impracticable for the company to undertake manufacture in Australia at that time, but it would be prepared to consider the position at a later date. After considering the Tariff Board’s report the Lyons Government, in September, 1938, invited prospective manufacturers to submit plans for the establishment of the industry. A period of six months was given for the submission of proposals. Bearing in mind the Government’s objectives, no worthwhile proposal was received. Several proposals were received. Some required loans or capital subscription from the Commonwealth; others were sponsored by people without the requisite capital backing, whilst others related to individual chassis or engine parts.

In May, 1939, the Prime Minister (Mr. Menzies) indicated to Parliament that-

  1. The Commonwealth Government had definitely decided that motor vehicle engines and chassis were to be manufactured in Australia without undue delay.
  2. Defence preparedness, industrial expansion, conservation of overseas funds, immigration, employment and utilization of Australian raw materials were among the principal reasons underlying this decision.
  3. The Commonwealth Government was unable to grant a manufacturing monopoly to any single company.
  4. The Commonwealth Government desired that any company formed to undertake manufacture should be Australian in character and policy.
  5. The Commonwealth Government considered it essential that the prices of motor vehicles to be manufactured in Australia be reasonable and the public interest in this respect protected. At this stage interested parties were invited to place their proposals before the Government for consideration.

One great difficulty confronting the Commonwealth Government since 1936 in getting prospective manufacturers with adequate capital backing to interest themselves in the project, was the fear that the moment they established the industry, foreign or foreign-controlled companies would establish themselves in Australia, with a view to crippling the new Australian industry. This bill provides for the manufacture in Australia for a period of five years to be confined to Australianion trolled companies.

No worthwhile proposal was forthcoming from any interested Australian party and in July, 1939, it was suggested to Mr. W. J. Smith, managing director of Australian Consolidated Industries Limited, that he might consider the possibility of producing motor vehicle engines and chassis. It was represented to Mr. Smith that in the national interests, it was desirable that this industry should be established, and if this manufacturing project were undertaken by his company, it would be doing a service to the nation. Mr. Smith and the directors of the company associated with him approached the proposal made to them in this spirit. Throughout the discussions which preceded the exchange of letters between the company and the Commonwealth Government, Mr. Smith, on behalf of himself and his fellow directors, stated that they were actuated by the desire to contribute further to the industrial expansion of the country and to make a real contribution to the national war-time effort.

The principal criticism levelled against the Government’s endeavour to get this great industry established in Australia arose from the fact that the Commonwealth Government was prepared to give an undertaking to use its best endeavours to limit production of motor cars and trucks to the proposed company for a period of five years. In the House of Representatives this question was exhaustively debated, and the Government decided to accept an amendment to that section of the agreement, and to permit any Australian controlled company which is prepared to give similar undertakings to that given by Australian Consolidated Industries’ to have the opportunity to undertake this work. There is little” need for me to enlarge on this subject, as all honorable senators are well aware of the efforts which have been made by successive governments to establish this industry. If protection be not given to any Australian company which embarks on this enterprise, we can reconcile ourselves to seeing the industry remain in the control of overseas companies for a long period, if not for all time.

The benefits of the establishment of this industry have on several occasions been pointed out to honorable senators. The contribution of such an industry towards a greater national security is obvious. The present war is teaching us that Australia has to rely to a greater extent on its own efforts, and has to utilize its man-power and national resources to a greater extent than hitherto. The establishment of this industry will give em- .ployment to many. The employment benefits would not be immediate, as some eighteen months to two years would be required to establish this industry, and even then it could not expect to be in full production. On the conclusion of the war, the men forming part of our forces and those who are engaged in defence occupations will require new positions. No other industry offers such a contribution towards a -post-war re-adjustment as would be made by the transference of labour from aeroplane manufacture to an expanding motor car industry. I commend the measure to honorable senators.

Senator COLLINGS:
QueenslandLeader of the Opposition

– This bill affords a most illuminating illustration of the value in this Parliament of a virile and unmuzzled Opposition. Had the measure reached the Senate in its original form, considerable opposition would have been offered to it by honorable senators on this side; but owing to the fact that the Leader of the Opposition in the House of Representatives (Mr. Curtin) was able to secure the insertion of an important amendment, the bill has come to us in such a form that we can support it without reservation. The Government at the moment is confronted with difficulties that are inseparable from an attempt to reconcile elements that have not the same approach to proposals to establish and maintain Australian industries. The Country party now represented in the Government believes always in getting the highest price it can extract from the community for primary products, and the lowest terms which Australia will stand in the way of protection on the goods which primary producers buy. The Labour party, particularly in times of national emergency such as the present, stands for a drastic restriction of imports and a total embargo upon all commodities which can reasonably be interpreted as luxury goods. The Government, till recently solely representative of the United Australia party, now has its own problem of endeavouring to steer a safe course between the two contending forces. I was interested to note the concluding remarks of the Loader of the Senate (Sen itor McLeay) in moving the second reading of the measure. The honorable sen itor said -

The present war is teaching us that Australia has to rely to a greater extent on ito own efforts and has to utilize its man-power and national resources to a greater extent than hitherto.

I regret that it took a war to arouse the Government to Australia’s urgent need. Members of the Opposition have for many years been endeavouring to persuade successive governments to encourage the establishment and maintenance of Australian industries, primary and secondary, on the best possible basis. The action of the Government in bringing in this bill, although somewhat belated, is nevertheless a good beginning, and our only criticism of it now is that it should have got on with the job much earlier.

Senator MCBRIDE:
UAP

– The honorable senator admits that this Government has not occupied the treasury bench for very long.

Senator COLLINGS:

– I do not distinguish between this Government anc! others that have preceded it in the last nine years because they were of the same political colour.

Senator McBride:

– All good.

Senator COLLINGS:

– From the Minister’s point of view, yes ; in our eyes they were like the curate’s egg - good in parts. Whenever I have approved of their actions I have told them so. That is what I am doing now. We are anxious to see this now industry started in Australia, but we were definitely opposed to the monopoly provision contained in the schedule to the bill when it was introduced in the House of Representatives. That paragraph of the schedule, following strong representations by the members of the Opposition in that chamber, was eliminated. There are those who think that there is still in the schedule a provision which may have possibilities in that direction; [ do not agree with them.

Senator McBride:

– The honorable gentleman is not opposed to a monopoly in the business of sugar refining.

Senator COLLINGS:

– There is not the slightest occasion for the Minister to make inaccurate statements about 3 monopoly in connexion with sugar production in this country.

Senator McBride:

– What of sugar refining ?

Senator COLLINGS:

– If the Assistant Minister interjects with such glee because he thinks he has placed nae on the spot, he is entitled to whatever satisfaction is coming to him; but if he can mention one undertaking in the Commonwealth which can render to the Queensland sugar industry, at the same price or lower, the same service as the Colonial Sugar Refining Company Limited is rendering - we will exchange our monopoly for any one he likes to mention.

Senator McBride:

– We are not opposed to the sugar industry.

Senator COLLINGS:

– I now have from the Assistant Minister the admission I wanted. We have the definite statement that the Government stands for monopolies; but, in the House of Representatives, the Opposition, with the assistance of the Government, prevented the motor vehicle industry from becoming a monopoly. We are entirely in favour of this bill because for a long time we have been very anxious that such an important industry should be removed from the predatory hands of overseas monopolists and placed within the firm grasp of the Australian people.

Senator ARTHUR:

– This will be the means to provide work for our men.

Senator COLLINGS:

– Yes, but that is not the phase which I have in mindat the moment, although it is one of the incidental advantages which the establishment of the industry will bring in its train-. The long history of previous negotiations is well known to many honorable senators and, as they are aware, they were not initiated by this Government, but by the Lyons Government - an administration of similar political colour to this one. The history of the negotiations is not altogether savoury; but, in view of the form in which the measure reaches us to-day, there is no need to refer to its unsavoury history, and the Opposition intends to forget it. We shall expedite the passage of the bill and shall now have an opportunity to test whether it is possible - I believe that it is - to establish the motor-car industry in Australia, by Australians, using Australian material and producing Australian cars for the use of Australian people. That is our objective. For a long time we have been told that that could not be done; but experience in connexion with our defence activities proves conclusively that there is no work done by artisans in other parts of the world which cannot be done by Australian workmen. I am in no doubt as to the ultimate result. I do not think for a moment that a dozen companies will offer to undertake the manufacture of motor cars in this country, because of the limited population and the relatively limited demand. Although the Australian demand per capita is high in comparison with some countries, it is not as high as it is in countries such as the United States of America, where motor vehicles have been produced for many years. It is now being made possible for an Australian company to produce motor cars in the Commonwealth. Any other company may operate under the conditions provided in this bill, and the ultimate result will be that we shall have cars manufactured entirely in Australia. Already we are producing in the Commonwealth motor bodies and parts, and all that we now need is the opportunity to complete the job. Those who have gone into the matter thoroughly are convinced that an all-Australian car can be produced of a quality as good as that of the imported vehicle, but of a class more in conformity with Australia’s needs. A comparison of the prices of cars manufactured in the United States of America, Canada, Italy and France shows that in some instances the landed cost of imported cars is more than £100 in excess of the price charged in the country of origin. This is due to the fact that a number of middlemen in the persons of agents, salesmen and “gogetters “ have to obtain their share of the profit. By producing cars in Australia, that unnecessary expenditure will be eliminated, and the final result of this measure should be the sale of Australianmade cars at prices probably £100 cheaper than those of the imported articles. The Opposition supports the hill and hopes that the Government will get on with the job at once, because there has never been a better opportunity to preserve dollar exchange and to reduce adverse trade balances than that presented under this proposal.

Senator ABBOTT:
“New South Wales

– When the Leader of the Opposition (Senator Collings) was speaking, I endeavoured to ask him a question which was not intended to be hostile, but which would have helped him to answer the Assistant Minister for Commerce (Senator McBride). Wars can be lost owing to absence of sugar in the human body, but the passage of this bill will not assist in the slightest degree to win the war.

Senator McBride:

– Motor vehicles are essential in war-time.

Senator ABBOTT:

– Will any one say that at present there is a dearth of motor vehicles in Australia?

Senator McBride:

– Or of sugar?

Senator ABBOTT:

– For generations army leaders have found that an adequate supply of sugar is necessary to maintain the vitality of the troops. The motor vehicle building industry is unnecessary, but sugar is always a vital necessity. To that degree I am on the side of the Leader of the Opposition, but I cannot support him when he debates this measure on party lines. I decline to accept such a challenge, because I do not propose to deal with the measure from the party aspect. Under present conditions the motor-car industry is not so important as some suggest. The need for tanks, aeroplanes and similar defence equipment is paramount. If Mr. Smith of Australian Consolidated Industries Limited said that he was willing to devote the whole of the resources to be utilized in this business to the manufacture of tanks for defence purposes, his offer would be applauded. I refuse to be associated with this petty, paltry, party political argument, which has no more right to be introduced into this chamber to-day than has the bill we are discussing. Instead of this Parliament occupying its time with this proposal, our time should be devoted to the consideration of measures to expedite the production of war material to assist us in the life-and-death struggle in which we are engaged.

Senator Collings:

– According to the Country party no time is proper for the establishment of secondary industries.

Senator ABBOTT:

– That may be a justifiable argument from a party point of view; but I should like to know why at a time of crisis such a proposal should be brought before Parliament. I believe that the directors of the company should have relieved the Prime Minister of his promise to bring this measure before Parliament, but he has been sufficiently honest to honour the obligation into which he entered. I am not entirely ignorant on this subject, because I am connected with a co-operative motoring association, some of the members of which are well-to-do, whilst others belong to the poorest class. Any one driving around the suburbs of our capital cities can see acres and acres of parked second-hand motor cars for sale. During the last few years the more important motor-trading companies have entered into agreements with certain people who, on undertaking to pay one year’s depreciation on a new car, can, at the end of twelve months, obtain another new one. Thousands of cars in good order and with good tires are available at reasonable prices.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– That shows the large profit that must have been made on them originally.

Senator ABBOTT:

– Yes, but I am emphasizing the urgent need to manufacture tanks instead of motor cars. The company concerned in this agreemen should be sufficiently patriotic to relieve the Government of its obligation to press for the. approval of the agreement at this juncture. It should offer to devote the whole of its strength to the purpose of helping us to win this struggle which will decide whether we shall be entitled to carry on any activity at all in the future.

Senator Dein:

– Could not the plant be readily converted for the manufacture of tanks ?

Senator ABBOTT:

– I think it could; and if I had an assurance that the company would devote the whole of its effort during the war to the manufacture of tanks I should certainly be more favorably disposed towards the agreement. The Leader of the Opposition (Senator Collings) stated that if the bill contained any provision which virtually gave to any company a monopoly of motor-car manufacture in this country, it would not receive the support of the Opposition. Notwithstanding all that has been said in both this chamber and the House of Representatives on that phase of the proposal, and the assurances which have been given that the objectionable monopoly provision has been removed from the bill, I venture to say that when this measure is interpreted as a cold matter of law, it will be seen that that feature has not been entirely removed. In that respect honorable senators are either deceiving themselves or are being deceived, because of their enthusiasm to . see this industry established. I ask them not to be deceived- As a lawyer, I can claim to speak with some degree of authority on that aspect. In my view it is extremely doubtful whether the monopoly feature has been removed from the bill. I should like to hear from a leading lawyer sitting in this chamber whether he thinks, as a matter of strict law, the monopoly feature does not still remain in this measure as it now stands.

Senator Courtice:

– The agreement will be for a period of only five years.

Senator ABBOTT:

– The war may last five months, or five years; but it is vital that we devote the whole of our attention to winning the war.

Senator Sheehan:

– Which clause leads the honorable senator to the opinion which he has just expressed?

Senator ABBOTT:

– Paragraph 15 of the schedule makes it not only possible, but also extremely probable, that the Minister charged with the administration of this bill at some time in the future may accept simply the ipse dixit of the interested party to the agreement that unfair competition is taking place, and, in that case, the Minister, under this provision, can virtually grant a monopoly. The Minister for Trade and Customs, in his second-reading speech, did not stress the history of this proposal. He did not say that it was referred by the Lyons Government to the Tariff Board for inquiry, and that that Government gave an undertaking that if the board was of the opinion that this proposal was uneconomic, the Government would have nothing more to do with it. Even in paragraph 15 of the schedule, which refers to import control to counteract unfair trading methods on the part of overseas interests, no mention is made of a reference to the Tariff Board in order to determine whether unfair competition exists. We are entitled to demand that measure of protection, rather than leave it to the Minister of the day and the financially interested party, to decide whether unfair competition exists and whether, therefore, paragraph 15 should be implemented. That is a monstrous, dangerous and unfair position in which to place the country.

On the general question as to whether this measure should be persisted in at the present time, I should like to add a few other observations. Honorable senators will recall that only last week I gave evidence of my sincere appreciation of the public mind in the present crisis when I declined to proceed with a proposal which I submitted for securing the world against aggression. At the moment we must employ every means available to us in order to place ourselves in a position in which we shall be able to dictate terms for the maintenance of world security. That consideration remains just as urgent at this moment. Two locks open the door to that security, and two keys are required for them. In a little booklet which I issued recently, I set out that one of those keys is the key to world security, but before we could possibly open that door we must release the first lock, which barred our way to absolute victory. Surely, the public conscience can be aroused on a proposal of this kind. Surely, honorable senators will not be influenced by party political considerations in dealing with so important a matter. I deplore the fact that the Leader of the Opposition has introduced party considerations into this debate. Such an attitude will shock the public conscience, and cause people to protest against the wasting of the time of Parliament in considering at this moment any matter which does not at once, and directly, assist us along the road to complete victory against the forces of evil. On those grounds I strongly protest against the introduction of this measure at the present juncture. As I sat here this morning I thought of a letter which I had hoped Australian Consolidated Industries might have written to the Prime Minister (Mr. Menzies) at this juncture. That letter would be along these lines-

Dear Mr. Menzies,

On behalf of myself and my, directors I beg to express to you our sincere appreciation of your good faith in honoring your promise to submit this matter to Parliament.

We feel, however, that in the present critical position of our nation, together with the British Commonwealth of Nations and our French and other Allies, there is only one matter that can be considered at this timenamely, to devote the whole thought, attention and effort of the people of all of our countries towards those activities and undertakings, which are vital and material to the winning of the war. We therefore desire to wholly absolve you from your undertaking to have the motor-car agreement even considered by Parliament, and we further desire to place our whole financial strength and organization at the service of our country towards manufacturing tanks, munitions and other vital war supplies, which we feel are most vital to the nation and the Allies at the present time.

A letter in such terms might have been appropriately written by the managing director of the company at this juncture in order to absolve the Prime Minister from his promise.

Senator Courtice:

– We shall still be obliged to import motor cars if this agreement be not approved.

Senator ABBOTT:

– We shall certainly be obliged to prevent the importation of motor cars during the present crisis.I am well acquainted with what has been said about the necessity for building up dollar exchange, and I have listened with attention and respect to the statements made on this subject by the Prime Minister, the Treasurer and other members of the Government. As a man of ordinary intelligence I realize that we cannot continue to import motor cars unless we possess ample dollar credit. But, we must conserve that credit for the purchase of more urgent needs, just as I say we must now devote our every effort to things more important than are embodied in this measure.

Senator Aylett:

– What about the importation of trucks?

Senator ABBOTT:

– We have sufficient trucks, I think, to do our job.

Senator Collings:

– The honorable senator, apparently, is not aware of the huge expenditure being incurred by the Defence Department for the hire of cars.

Senator ABBOTT:

– I admit that that subject certainly requires immediate attention. My answer to Senator Courtice’s very pertinent objection is that we shall be obliged to do without new motor cars for the duration of the war. Apart from the fact that we shall be more willing to be satisfied with reconditioned cars, any company which proposes to make new cars at the present time, will practically be committing financial suicide. Besides the difficulties arising from our necessity to build up dollar exchange, other influences will tend to diminish the market for new cars during the war. First, the majority of car owners are alive to the probability of a petrol shortage. It may be that that shortage will not be so severe as seemed likely some months ago. However, the second and overwhelming reason why people will not want to buy new motor cars is that, as the war proceeds, they will be taxed up to the hilt. During the next two or three years our taxation will be increased to such a degree that very few people will be able to afford new cars. If we are not prepared to make every effort in order that we may escape the tyranny that threatens us, we shall go down. We shall npt be able to shirk that effort, and, consequently, the purchasing power of the people will vanish almost entirely. It may be that the Government’s requirements will provide’ a limited market, but the people generally will not provide a market for new motor cars, because as time goes on they “will be obliged to make-shift with old ramshackle vehicles.

Senator Cameron:

– Why should that be so when our resources are practically unlimited ?

Senator ABBOTT:

– We have the iron, metal and skilled artisans required for the manufacture of motor cars; but another reason exists why we should not undertake this proposal if it means a weakening of our war effort. All of our available skilled labour is necessary for the production of war material. A question was asked in this chamber recently concerning the national register, one of the objects of which was to provide s ready means of locating skilled labour in case of emergency. A protest was made because already many men whose names were listed on the national register cards as skilled workers had been permitted to join the Australian Imperial Force foi service overseas. The logical reply to that question was that in these days of mechanized armies, it is necessary to draw largely upon our resources of skilled workers in order to keep the war machine in operation. But under this bill there is to be an additional heavy drain on our artisans. I ask honorable senators whether there is any sense in diverting skilled labour which could be employed in the manufacture of munitions, in order prematurely to embark upon an unnecessary undertaking? Undoubtedly the people are desirous of winning the war, and the proposal to establish a motor-vehicle industry in this time of national peril evokes protest from every logical mind. We should now be concentrating every effort upon the production of those instruments of war which are so vital to a successful prosecution of this campaign. I hope that eventually some such proposal as that contained in the letter which never was written, will be brought forward.

Senator Collings:

– Depend on the Country party to oppose any new secondary industry.

Senator ABBOTT:

– Apparently the Leader of the Opposition is unable to dissociate himself from miserable thoughts of party politics. I ask him of what use will such affiliations be if the German hordes bring war to this country? What would Hitler think of such a restricted outlook? In all friendliness, I beg once again that the Leader of the Opposition and all honorable senators who entertain such ideas, will drop them. We are fighting for the preservation of our democratic system. The fight is vital to us, and the position is extremely dangerous. 1 wish to absolve myself of all attempts to raise petty party arguments. I have not advanced any such arguments in the course of my remarks to-day. I have pui forward my views sincerely and honestly.

Senator Cameron:

– The honorable senator is too idealistic.

Senator ABBOTT:

– Am I idealistic because I suggest the building of ships to carry food to our soldiers who are fighting overseas to keep the tyrants away from this country, go that honorable senators may sit here and take counsel together ?

Senator Armstrong:

– Why not build ships ?

Senator ABBOTT:

– That is what i say. Let another letter be written offering to put the whole of this effort behind the shipbuilding industry. When Senator Allan MacDonald raised the matter of shipbuilding in the Senate a few months ago, I enthusiastically supported him. My present attitude to this matter is not a newly-born enthusiasm. We should devote the whole of our energies to the production of those requirements which are absolutely necessary at the present time. Let us produce foodstuffs, by all means; build ships, by all means j build tanks; build engines. Let us concentrate all available skilled labour in essential war industries in order that we may quickly produce all of those things for which there is urgent need. I do not care about party interests, business interests, or the peoples’ feelings in this matter. If any honorable senator here, or any member of the public who reads my words, will ask himself conscientiously the question, what is most vitally necessary at the present time, he certainly will not answer that the building of motor cars at present is what the situation demands.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– I move -

That the word now “ be left out with a view to adding the following words: - “this day six months “.

I move this amendment for a very serious reason. A year ago, in the dying hours of a session, a bill was introduced by the Government which had similar objects to the legislation now under consideration. It provided for the payment of a bounty on motor-car engines with a view to encouraging the building of motor cars in Australia. I spoke on that measure for a minute and a half and said that I heartily welcomed the proposal to establish the motor-car manufacturing industry in Australia. 1 still believe that motor cars should be and can be manufactured here, but every honorable senator realizes the seriousness of the war position to-day, and appreciates that whilst there is a time and place for everything, the present time is not opportune for the establishment of this industry. To-day we are not discussing whether or not it is right to build motor cars in Australia; we are discussing a bill which has been introduced for the purpose of authorizing an agreement entered into between the Commonwealth Government and Australian Consolidated Industries Limited. I am opposed to monopolies, but we have been told that the monopolistic provisions have been removed from the bill. I do not agree that that is so. Senator Abbott just said that he would like to have opinion of counsel on some of the clauses of this agreement. I am surprised that he would seek such an opinion because the clauses of this agreement are so transparent that their import may be readily understood without the assistance of counsel.

Senator Courtice:

– We have confidence in the Prime Minister, who is a lawyer.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– If the honorable senator has confidence -in the. Prime Minister, he is a very sudden convert.

Senator Collings:

Senator James McLachlan is a sudden opponent.

Senator JAMES McLACHLAN.Hitherto we have not been aware of the confidence which Senator Courtice has in the Prime Minister, and I ask him to cast his mind back to the recent byelection held in the electorate of Corio. During the course of that campaign the honorable senator and his colleagues apparently had little confidence in the Prime Minister. We all know what the result of that election was, and we know of the publicity which was given to the result by Senator Courtice and other members of his party.

Senator Courtice:

– I was referring to the Prime Minister’s legal ability when I said that I had confidence in him.

Senator Collings:

Senator James McLachlan knows what the people of Corio said.

Senator JAMES McLACHLAN.Yes, and I know well what was implied in the decision of the people of Corio. I do not know whether or not the implication is correct, but it might be well to remind honorable senators of what has happened recently. During the past twelve hours interesting events have been taking place in the House of Representatives; almost the whole of last night was occupied in a discussion of this bill. En the early hours of this morning an unholy alliance was contracted between two parties, and the result of that alliance was the passing of this bill through the House of Representatives. Before dawn broke this morning the very people who had been bitter enemies in the Corio campaign had collaborated in hatching a plot which was to their mutual advantage. Apparently time and place alter things considerably, and because of what has happened I am very suspicious of this bill.

Senator Cameron:

– What is wrong with it?

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– As I have said, a bill similar to this one came to us in the dying hours of the last session. It looked all right, and we accepted it, but it seems that there was something more behind it than was indicated by the Government, and so I am extremely doubtful of the measure now before us. We were told that the object of the bounty bill was to encourage the building of motor cars in Australia. We know now that before that bill was introduced the Government had actually been engaged in private negotiations with a company interested in the establishment of the motor-car industry in Australia. The explanation given was that the negotiations had broken down on the 4th December. The bill was introduced into Parliament about the 5th December, and, strangely enough, negotiations were resumed about the 7th December. It seems, therefore, that the break-down was not very serious. Such occurrences make one suspicious of the Government’s intentions in bringing this bill before us to-day. Arguments against the establishment of the motor-car industry in Australia at this juncture have been very ably put by Senator Abbott. I agree with him that the time is not opportune for such an enterprise. At present we need the whole of our skilled labour for the production of munitions, and other essential war requirements.

Senator Cameron:

– What about building military tractors?

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– I am glad that the honorable senator mentioned tractors. There is nothing about tractors or trucks in this bill at all. This bill applies to motor cars of 15 h.p. and over. The whole purpose of this agreement, as I understand it, is to build motor cars of about 15 h.p.

Sitting suspended from 12.45 to 2.15 p.m.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– I was impressed by a remark by a member of the Opposition that I have changed my opinion with regard to monopolies. I contend that any private company which establishes a big industry off its own bat is not a monopoly ; but, if a large and successful undertaking owes its prosperity to protection through the tariff and financial assistance from the Government, it may be truly regarded as a monopoly. I am not greatly concerned about the construction which honorable senators opposite may place upon my attitude to this measure. They have proved on more than one occasion that they are not consistent. I commend the members of the Australian Labour party - nonCommunist - for being true to their convictions with regard to the sugar agreement, and for requesting an inquiry into the ramifications of the Colonial Sugar Refining Company Limited, which is one of the monopolies that the other members of the Opposition support when it suits them to do so.

This debate has developed into a political argument, with the result that the advantages and disadvantages of the proposal under consideration seem to have been forgotten. Opponents of the agreement who require arguments against it would have found, in the press, at the time of the Corio by-election, all of the material they could have desired. On that occasion, honorable senators opposite could say nothing in favour of the agreement; it was bad from start to finish. Since the unholy alliance that developed last night between tho United Australia party and the Opposition, however, the Opposition has claimed that the proposal should be adopted. I draw attention to the attitude of the Prime Minister (Mr. Menzies) to the agreement. After all that was said about it at the Corio byelection, Mr. Menzies said that he had nothing to hide; he would bring the matter before the Parliament, which should decide whether the agreement should be ratified. He added that he would make the matter a non-party one, and that Government supporters could vote upon it as they thought fit. This has become a political rather than an industrial issue, and I admit, frankly, that my general in the House of Representatives was out-manoeuvred by the Leader of the Opposition (Mr. Curtin), who regarded the whole matter, not as industrial, but as political. He saw an opportunity to drive a wedge between the parties forming the coalition Government, and he took good care that the wedge was driven well home.

If the people are desirous of seeing an industry established in Australia for the manufacture of motor car engines, they have means of achieving that result very quickly. It would be necessary only to delete the provision in the bounty act of 1939 relating to the proportion of Australian capital required to be in any company claiming the bounty. The importation of cars could also be prohibited, and then they would soon be made in Australia. It cannot be truthfully said that this country is short of motor vehicles. It has all the motor cars it requires for the next three or four years. One of the main problems in the capital cities, and in large country towns, is to find parking space, day and night, for the large number of vehicles on the market and on the roads. To the man who has no car, and would like to own one, I would say that, within the next twelve months, plenty of them will be available at reasonable prices. There are thousands of second-hand cars for sale.

The Leader of the Opposition (Senator Collings) interjected that, at the present juncture, the Commonwealth authorities are hiring motor trucks from private firms; but it is quite unnecessary to do that, as the Government has all the powers it needs under the National Security Act to acquire compulsorily any private motor vehicles that it may’ need, as was done in England during the last war. Many private cars could be fitted with truck bodies. If I am opposed to the importation of motor vehicles, I am not against the importation of capital. The more capital we can attract to Australia, whether English or American, the better it will be for this country. By the methods that I have indicated, the establishment of a motor-car manufacturing industry in Australia could be ensured; but we are dealing, not with the manufacture of cars in Australia, but with an agreement between the Government arid a particular company. I am not in favour of that agreement. Although I would support the establishment of any new industry that would benefit this country, I could not accept the present agreement.

Senator AMOUR:
New South Wales

– I oppose tho amendment. Little sincerity, has been displayed by its mover. We are not dealing with an industry which is to be the recipient of a present of £1,000,000 a year, as in the case of the Colonial Sugar Refining Company Limited, but with a company which proposes to expend £500,000 on plant, commit itself to heavy overhead expenditure, pay a large wages bill for some months until its enterprise can- be brought into production, and also run the risk of tricks by financial interests and of undercutting by similar organizations with foreign capital. Although a rival company might claim to be Australian, it would adopt means of obtaining foreign capital in. order to destroy Australian Consolidated Industries Limited. This company would be entitled to ask that a special safeguard against such risks be inserted in the bill. To those who glibly say that the time is not ripe to discuss in this Parliament the establishment of the motor-car industry in Australia, I reply that certain honorable senators in this chamber would oppose the establishment of any secondary industry. We are now considering a proposal of major importance. This company expects to employ thousands of men. Two years or more would be occupied in getting the industry under way, and it will prove very useful in postwar reconstruction. I fear that the Government was forced into acceptance of this proposal by the constant demand of the Opposition for the establishment of the industry. The ex-Minister for Trade and Customs (Mr. John Lawson) realized the importance of this industry to Australia, and, even if he made a slip in connexion with the negotiations, it was more than compensated for by the success of his efforts to induce Australian Consolidated Industries Limited to embark upon this enterprise. Those who quibble about this matter should first search their own minds and ask themselves whether they, too, have not made mistakes. It is unfair to say that the former Minister for Trade and Customs did something foolish. He acquitted himself well, as was proved by the story he told in the House of Representatives yesterday. All the arguments of honorable senators, to the effect that companies other than Australian Consolidated In- ;dustries Limited are prepared ‘to manufacture motor-vehicle engines in Australia, are so much twaddle intended to prevent this country from establishing a new industry. Other companies have bad ample opportunity, over a long period of years, to establish the industry, but no move was made by them until Australian Consolidated Industries Limited entered the field. Representatives of all sorts of motor companies have written to me and to almost every honorable senator-

Senator Ashley:

– I have not received a letter.

Senator AMOUR:

– I am surprised that the honorable senator did not receive a circular from the Ford Motor Company of Australia Limited as I did. These firms did not bestir themselves until they found that the Government had found a company with sufficient faith in Australia to invest capital in the establishment of what [ believe is destined to become one of tho greatest of our industries. Doubtless a great deal of the plant necessary for the industry will have to be imported, but that is not a great drawback.

There is little difference between motor car engines and military tank engines, so that, when the factory is erected in New South Wales, Australian Consolidated Industries Limited will be able to manufacture engine and chassis units for both motor cars and tanks. I have sufficient faith in Australian tradesmen to believe that they will soon master whatever technical difficulties there may be in the construction of both types of engine. Many Australians would be willing to study the science of making engines for military tanks in the interests of Australian defence.

Senator Abbott:

– Do’ not military tanks use diesel engines, not petrol engines ?

Senator AMOUR:

– There should not be very much difference between the methods of constructing kerosene-driven motors, diesel motors, petrol motors or gas motors. .The industrialists who are prepared to handle this job would not experience much difficulty in effecting any adjustments that might be necessary. They could soon establish’ a subsidiary organization for the purpose. , They are prepared to take the risk of expending £1,000,000 before they can hope to sell even one unit.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The expenditure will be a great deal more than £1,000,000.

Senator AMOUR:

– Probably so, and, therefore, they are entitled to protection. The protectionist policy of the Labour party has been responsible for the building up of the great Broken Hill Proprietary Company Limited. We did not intend that that organization should develop into a monopoly;. we are opposed to monopolies. But to compare the

Broken Hill Proprietary Company Limited and similar great monopolies, with this unborn industrial babe that is to be reared in the face of competition from foreign capital, is ridiculous. Members of the Country party must re- member that they represent the Australian people.

Senator Collings:

– They misrepresent them.

Senator AMOUR:

– I believe that they misrepresent themselves. They were elected to this Parliament to do a job for Australia. They will be failing in their duty if they oppose the establishment of this industry, which will create a larger market for the product of the rural interests which they represent. The motor-car manufacturing industry must employ thousands of men, who will buy large quantities of wool, wheat, butter and other primary products. Members of the Country party are opposed to the interests of people who live in the big cities, but they fail to realize that boys living in country districts will come to the metropolitan areas in order to engage in this industry; thus unemployment in the country will be reduced. Youth employment will be an important post-war issue.

The Government deserves a great deal of credit for its effort to establish this new industry, and the former Minister for Trade and Customs did a very good job. I shall support the Government’s proposal, and the Country party should follow my lead and do something that will be of great value to the Australian people.

SenatorE. B. JOHNSTON (Western Australia) [2.38]. - When the present composite Ministry was formed in February, one of the conditions agreed upon between the United Australia party and the Country party was that the controversial matter of an agreement between the Commonwealth and Australian Consolidated Industries Limited, and its implied monopoly of motor-car manufacture in Australia should be a nonparty issue.

Senator McBride:

– Most tariff matters are non-party issues.

Senator E B JOHNSTON:

-That is so. Honorable senators on this side of the chamber are allowed freedom of thought in tariff matters, as is shown by the division lists.

Senator Fraser:

– In every speech, Country party members condemn the Government. Yet they support it when a vote is taken.

Senator E B JOHNSTON:

– Certainly not. I am right behind the Deputy Prime Minister of Australia (Mr. Archie Cameron) and his colleagues.

Senator Collings:

– Ready to stab the Prime Minister in the back.

Senator E B JOHNSTON:

– Nothing of the kind. I am using my right of freedom of thought in accordance with the arrangement entered into between the leaders of the two parties composing the Government. I intend to support the amendment, only because I have been denied an opportunity so far to move an amendment which I had in mind. I shall move it if I have a chance to do so because it represents the considered opinion of the Country party. It reads -

That the following words he added to those proposed to he inserted: - “ but assistance to the manufacture of motor cars in Australia be deferred until such time as, in the opinion of Parliament (expressed by Resolution) arrangements have been made and proved to be effective to overcome the inadequacy of the war-time supply of munitions and aeroplanes, and to commence a programme of shipbuilding, so that Australia’s maximum industrial effort in the production of the things most essential to win the war may not be impeded “.

However desirable the construction of motor cars may be as a post-war industry, the manufacture of goods required for the conduct of the war is more important to-day. First things should come first.

Senator Fraser:

– Then had this agreement been for the purpose of the nation’s war effort, the honorable senator would have been in favour of it?

Senator E B JOHNSTON:

– The manufacture of aeroplanes, munitions, and ships is more important than the manufacture of cars. All of these things, I remind the honorable senator, can be made and should be made in the State that he and I represent. The present war situation shows that aeroplanes should be manufactured in far greater numbers than at present. If Mr. Smith and Australian Consolidated Industries Limited have £1,000,000 to invest, they should be given the opportunity to employ the money in the manufacture of aeroplanes, munitions, or ships. A shipbuilding programme is urgently required to-day, because of the necessity for transporting our primary products to the other side of the world.

Apart from that issue, the Tariff Board’s report on this subject must be considered. On the 6th September, 1937, in its summary of conclusions on the manufacture of motor cars, unanimously signed by all members, it stated -

The evidence before it convinces the board that it would be unwise at present to encourage or enforce the manufacture of the complete motor vehicle in Australia.

Senator Collings:

– That report was made nearly three years ago.

Senator E B JOHNSTON:

– The Leader of the Opposition (Senator Collings) with his virile mind, has forestalled my remarks. But last September the Government introduced a Motor Vehicle Engine Bounty Bill which was passed by both Houses of the Parliament. It was designed to assist companies, 66 per cent. of the capital of which was owned by British subjects living in Australia. When the measure was introduced members of the Country party in both chambers moved that it be referred to the Tariff Board for an immediate report as to the desirability of establishing the industry in the light of the war conditions then prevailing.

Senator Collings:

– The motion was defeated in both Houses.

Senator E B JOHNSTON:

– Which shows that the majority is riot always right. Had that motion been accepted we should have had before us to-day an up-to-date report from the Tariff Board which is more entitled than any other body to guide and advise the Parliament on this important subject. I always rejoice to see new industries established on an economic basis.

Senator Cameron:

– What would the honorable senator term an economic basis ?

Senator E B JOHNSTON:

– That question requires a lengthy answer which I should have pleasure in giving if my time were not limited. Despite the amendment agreed to by the House of Representatives, I am of opinion that this agreement is still designed to give a monopoly to one company or, at least, to restrict participation in the industry to those companies which can qualify for bounty by reason of the fact that 66 per cent. of their capital is owned by British subjects resident in Australia.

Senator McBride:

– There is no doubt about that. It is provided in the Motor Vehicle Engine Bounty Act 1939.

Senator E B JOHNSTON:

– But this bill goes further than that act, and, if implemented, it will practically preclude manufacturers like Morris or Austin with English capital, the Canadian firm of Ford’s, or American companies like General Motors and Chrysler-Dodge, from building and equipping factories in Australia with their own capital, even should they be prepared to do so without receiving a bounty from the Government. If honorable senators will read paragraphs 12 and 15 of the proposed agreement they will see that, notwithstanding the action taken by the Leader of the Opposition in the House of Representatives, provision has been made for the establishment of a monopoly for five years. Paragraph 12 reads -

That the Commonwealth will for a period of fiveyears use its best endeavours to limit production of engines and chassis for motor vehicles of fifteen horse-power or over to companies in respect of which the Minister administering the Motor Vehicle Engine Bounty Act 1930 is in the exercise of all the powers conferred by section6 of that act, satisfied that paragraphs (a) and (b) of subsection I of that section apply and which give undertakings satisfactory to the Commonwealth with respect to the following: -

Type of engine and chassis to be manufactured ;

Purchase of parts from established Australian manufacturers of motor vehicle parts;

Number of engines and chassis to bo produced annually;

Support to Australian machine tool manufacturers;

Use of bounty to give price concession to Australian public; and

Arrangements to ensure availability of technical information from other countries.

Paragraph15states -

That the Commonwealth will retain the import control established in the year One thousand nine hundred and thirty-six over the importation of motor vehicle engines and chassis and will use this import control, if necessary, to counteract u,ny unfair trading methods which may be adopted by overseas interests iti selling competitive vehicles in Australia.

Those powers can be extended by the Government under the National Security Act should it so desire. No additional companies can be formed to undertake this, work, even if* they can provide 66 per cent, of’ Australian capital, without the approval of the Treasurer as is provided in the National Security (Capital) Regulations. It is proposed to give this company power to spend £1,000,000, but should the motor-body building firms in Adelaide, such as General Motors-Holdens Limited and T. J. Richards and Son Limited, be unable to get chassis and decide to form a company the Minister may refuse them the right to establish an undertaking even if they can provide the prescribed quota of Australian capital. The first agreement introduced by the Government showed clearly that it would not let any other company, even financed with Australian capital’, to enter into this field of industrial activity. I do not know why the Government should endeavour to prevent the investment of British capital in this business. It is a new departure to prevent the investment of British or even American or Canadian capital to assist in the development of Australia, and the proposed agreement will effectively prevent any such action by British or American companies. The arguments always advanced by high protectionists, whooppose the importation of Canadian or American cars or goods have been that foreign capital should- be used to establish branches of the industries in Australia. E do not think- that this industry will help our present war effort, although I admit it might be somewhat valuable in providing post-war employment. We would be far better advised if we devoted our energies to the production of arms and munitions, aeroplanes and ships, which are so essential at the present juncture instead of embarking on the manufacture of motor cars.

Senator CAMERON:
Victoria · CP

– This measure is of far-reaching importance, and I again protest against not being supplied with a copy of the Minister’s second-reading speech. The information he supplied to the Senate is now before us, hut we cannot be expected to discuss this measure intelligently unless wo too. have before us the facts which he supplied to the Senate. According to the remarks of Senator Abbott it would appear that we should not discuss this project, but should leave it to that mythical thing known as common sense ; but in order to reach finality the subject must be debated more fully than it can be this afternoon. Whether in times of peace or in times of war there will always be a conflict of ideas on how the affairs of the nation should be managed, and as to whether there should even be such institutions as parliaments. The ideas of honorable senators in Opposition with respect to the war and affairs of the nation generally are in most, instances diametrically opposed to the. opinions of honorable senators opposite. Unless our differences be threshed, out it will be very difficult to bring about a working agreement,, and we shall always find ourselves at cross purposes instead of having some degree of unanimity. Senator Abbott, who referred to a letter which should be written, presupposes that the private owners of national utilities should place un reservedly their, resources at the disposal of the Government for war purposes. I stated by interjection that he was influenced more by ideal concepts than by material considerations, because that is. the very last thing that they would do. The Government- now has to use the power of the law in- order to reach agreement on its. terms, and that is precisely the position in which we are now placed. If we depend upon, so-called goodwill, patriotism and, all of those finer and nobler attributes of private monopolists, I am afraid that our war effort will not be creditable to Australia. We shall find, as we are finding now,, that it will be necessary to issue regulations under the National Security Act in order to bring these gentlemen to a more- reasonable frame of mind, and I am afraid that Senator Abbott is likely to< be disillusioned.

Senator- Abbott. - The honorable senator is misrepresenting me; I did not suggest anything of the kind.

Senator CAMERON:

– I know “that the honorable senator is influenced by the best of motives, and I question, not his sincerity, but his judgment.

Senator Abbott:

– The honorable senator misunderstood what I said.

Senator CAMERON:

– I regret if I did so; hut that is the impression which I formed. This bill contains a much better proposition than the original proposal. It is not all that we desire, because we have not an opportunity to express our opinions with respect to it, and therefore have to rely upon the pressure oi the criticism we are able to bring to bear on its merits in order to influence the Government. Apparently our criticisms daring the Corio by-election had some effect in that direction. The original intention of the Government, as I understood it, was to establish an exclusive and privately-controlled monopoly, but it is now proposed to bring about an agreement between the Government and this company. Whether we like it or not, we are passing through a monopolistic age. The monopolists who are here are the outcome of the economic process that is operating and depriving craftsmen of their tools of trade. Modern machines are operated by steam, electricity, gas and various forms of motive power. These constitute the collective tools, the means by which we produce the things we need. That is where the trouble starts and where we join issue. It is a question of who is to control monopolies. The monopolies exist; we cannot do without them. But the question arises as to whether they are to be owned and controlled by a few private persons, responsible to no one but themselves, or by the people as a whole through the government of the day. Those monopolies, which can be used to great advantage in the interests of the nation, should be owned and controlled by the people through their government. Pledged as this Government is to the principle of private monopoly, it is not prepared to consider collective ownership, unless it be compelled to do so ‘by the pressure of its needs and events, that is, the effect of economic development. The struggle goes on among private monopolies for supreme control. We find to-day that certain monopolies control 60 or more subsidiary companies. The latter exist under different names, but all of them are subordinate to the central monopoly. Because we permit this degree of private monopoly, prices are rising and purchasing power is being reduced.. These developments in their turn stir the people to resentment, which is expressed in Parliament through the Labour party.

The Assistant Minister for Commerce (Senator McBride) declared that Australia must rely upon its own efforts. I agree with that statement. However, the trouble has been that in the past we relied too much on interests overseas, with the result that we now find ourselves in much greater difficulty in a time of war than would have been the case had governments in this country been prepared to give effect, as they will soon he obliged to do, to the Labour party’s policy of making the nation as self-contained as possible. It is this state of affairs which has brought into being the demand that we should now manufacture motor cars. In this respect we are simply making a virtue of necessity. War-time conditions are compelling us to rely upon our own efforts and resources to a far greater degree than this Government was prepared to do before war broke out.

Senator McBride:

– That is not correct.

Senator CAMERON:

– It is absolutely correct. I point “out to the Assistant Minister for Commerce that if we could now import cheap motor cars from Japan, Germany or any other country, this Government would prefer to do so ‘ rather than encourage their manufacture in Australia. However, we are now unable to import cars as cheaply, expeditiously, and abundantly as we did previously, and, because of war-time restrictions, we are thrown upon our own resources. We must decide whether we shall undertake efforts to win the war, or whether we shall allow things to romain as. they were prior to the outbreak of the war. The choice of the former course is more to our credit. In this way we are being educated by the logic of events rathe than as the result of our capacity for abstract reasoning.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Is this a university lecture?

Senator CAMERON:

– Not exactly. I am simply exercising mr right to speak to this measure in an endeavour to show the absurdity of certain statements made by some honorable senators opposite. I do not accept such statements at their face value. I repeat that when the Government says that it intends to establish the manufacture of motor cars in Australia, it is relying to a far greater degree than formerly upon our own efforts, and is simply making a virtue of necessity.

Senator James McLachlan declared that we have plenty of motor cars in Australia,, and do not need any more. I point out that the efficiency and value of the men and women upon whom we rely for the defence of this country will be correspondingly enhanced as increasing numbers of them are enabled to own motor vehicles. In this respect, let us suppose, as Senator Wilson suggested last evening, that an attack were made upon Australia by parachute troops. If we had mobile forces equipped with machine guns we could despatch sufficient numbers of defenders to the point of attack within a short space of time, and we should thus be in a much better position than we are to-day to combat such attacks. It would be a great advantage, indeed, if we possessed sufficient motor vehicles to build up adequate mobile forces. At the present time we have large numbers of unemployed who could do this work. It would be far better if these men were engaged in manufacturing motor vehicles of every description, rather than that we should be obliged to increase taxes in order to support them. Consequently, it seems to me that when the honorable senator says that we have too many cars he is taking up exactly the same attitude as was taken up by this Government before war broke out. It said that we were able to defend ourselves, and that we were quite secure. The war soon disillusioned the Government on that point. Before the war I directed attention to the necessity for training toolmakers, but the Government replied, in effect, that no necessity existed for the installation of machines for the purpose of teaching young Australians to become toolmakers and tradesmen. As the war develops, however, and our danger becomes more imminent, the Government realizes that it must take action in this direction. I am pleased to note that change. The attitude now adopted by Senator James McLachlan is precisely the same as that adopted by the Government on this matter before war broke out. The honorable senator say3 that we have plenty of cars. I say that we cannot have too much of anything, and that we should. build up our material resources in the form of motor vehicles of all description, and build our stores of raw material mountain high. Even though we may not be able to consume or use those resources, we cannot have too much, of anything which will help us to face the task which confronts us to-day. We must take time by the forelock. Our natural resources are practically unlimited. We have the requisite man-power and we have the means by which we can support that man-power. We have every facility required to enable us to manufacture motor cars or any other article which we need. Common needs and dangers faced in common are the strongest bonds of unity . between man and man. As our position in relation to the war becomes worse, we shall find the people of this country more united than they have been in the past. We should take every advantage of that attitude. Senator Wilson pointed out that thousands of men and women want to contribute to our war effort. They want to do something useful, and to help the nation in the present crisis. If, like Senator James McLachlan, we say that we have plenty of this and that, and therefore need not start new industries, we shall not make the best use of our resources of man-power and material.

After the war, what? Despite the fact that we shall have established this new industry and many others as well, this Government will, if it can, revert to the policy which its political predecessor adopted at the conclusion of the last war. It will want to re-establish as far as possible pre-war conditions. This will mean that the tendency will be to import goods instead of manufacturing them in Australia. The reason for this policy is that labour power will be cheaper in Japan and Germany and other countries from which we shall be able to import these goods. Honorable senators should now ask themselves whether at the conclusion of the war we are going to abandon all of the industries which we shall establish during the war. Shall we endeavour to revert to the same position as existed before the war? If such a policy be adopted I assure honorable senators opposite that they will make as much trouble for themselves at the end of the war as that with which we are confronted to-day. When I asked Senator Johnston by way of interjection what he meant by the term “ economic basis “, I was endeavouring to elicit from the honorable senator his views as to what policy we should adopt in relation to these industries after the war. We have a right to expect honorable senators to define what they mean by certain terms. If I were asked to say what the honorable senator meant by “ economic basis”, I would say that he meant labour power at the minimum rates, and profit at the maximum rates. That is the economic basis of the conditions under which we are living today; that is the economic policy that is causing all our troubles, and making it almost impossible to organize our forces to the degree necessary to improve our war effort. It is an instance of where the reducing ofwages is not brought about directly in the usual way, but is brought about mechanically as the result of the labour power being a diminishing quantity in the production of commodities and wages being based on the cost of subsistence. Then, obviously, as the purchas ing power of the people becomes less and less, and the accumulation of capital becomes greater and greater, there occurs the turmoil which exists to-day in Australia. It is not asking too much when we ask to be told exactly what honorable senators mean by their terms. It is only by threshing these matters out. as they should be threshed out, and pointing to the absurd assumptions and categories on which many of Labour’s opponents base their beliefs, that it is possible to cultivate a more reasonable attitude of mind, and so raise the intellectual level that Ave can continue our national effort without making as many mistakes in the future as Ave made in the past. I challenge the terms which are used in the Minister’s statement, and other termswhich have been used by honorable senators, not with the object of trying to appear something of a mentor, but merely in order that we may get down to the “ guts “ of the thing, and know exactly where we are. All thesewordy embellishments and dialectical trimmings are all right to tickle the ears of the unsophisticated, the sincere man who is prepared to take honorable senators at their face value, but are not acceptable to persons who are determined to sift the truth of things from their apparent contradictions and variations. That is the reasonwhy I challenge honorable senators who use platitudes or terms that have become hackneyed with the object of creating the impression that they know everything. As a matter of fact, the more one places upon these people the responsibility of defining terms, the more one discovers that they know least about what theywould have us believe they know most. With these remarks, I support the bill, not because it is the very best proposition that could be brought forward, but because it is the best that can be produced in the light of the circurn- stances and the difficult position confronting honorable senators on this side of the Senate,who believe that they are capable of doing much more in the interests of the country, but are prevented front doing so by the . obstinacy and ignorance of some of the honorable gentlemen opposite.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Having listened to the Avar notes of Lochiel for a few minutes, I shall endeavour to devote my remarks to that part of this bill which the honorable senator has so eloquently described as the “guts”, but which, from one end of his address to the other, he did not attempt to probe. This measure is one of great importance, because its object is to usher into being a new industrywhichwill be ofvital significance to Australia. There can be no doubt that we in Australia depend more on the internal-combustion engine than on any other form of locomotion.

Senator Arthur:

– From where will the oil be obtained to run the engines?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I have done alittle more to make this country secure by locating oil than has any honorable senator opposite. Ever since this proposition was first submitted to the Lyons Government by the then Minister for Trade and Customs (Sir Henry Gullett), I have been convinced that there is an excellent case for the manufacture of motor cars in this country. I was ‘first convinced by several facts which that honorable gentleman brought to light. One of these stands out clearly in my memory - the fact that we in Australia use more motor ears than are used in Italy, which is the home of the large Fiat organization. I understand that Italy has a big export trade in motor cars, but I can conceive that, in the not far distant future, we also shall have a big motor export trade. Already Australia has a steel export trade which is holding its own in the markets of the world. I was convinced of the soundness of this industry for another reason: Because of my knowledge of imported motor .cars, I know full well that Australian, purchasers are not getting full value for their money. fe know we pay dearly for bodies under our protective tariff, but the price which is paid for imported chassis and engines is exorbitant. Even if the production of cars in this country should result in a high price at least until .the industry was established, I for one would prefer that the few extra pounds should go not to foreign manufacturers, but to the Australian manufacturers from whom I should have some chance of getting a little money back by selling to them goods or services. “When Sir Henry Gullett’s proposals were adopted in 1936, what movement was made by those interests which we would naturally expect to do something? Nothing was done. “Whatever criticisms may have been offered - and I regret that the proposal to manufacture motor cars in Australia has been thrown into the political limelight - the Government was endeavouring to establish a big industry, one that would be worthwhile; but the project was tarnished by political criticism and unworthy statements which have been made with regard to the personal honour of men connected with the transaction. . I do not acquit the Government of. ineptness in these, negotiations, as I shall show later. The headings in the schedule could have, -been tightened up and made more precise, and could have stated definite principles that we could have endorsed. “When the bill is in the committee stages I shall indicate what I think should be done in this regard. “What happened in these negotiations L« obvious. None of the big overseas motor companies desired a new manufacturing unit to be established. I know of at least two that were waiting, so that immediately an organization started without the protection of a monopoly, they could throw all their resources, their blue prints, their technical information, their superior knowledge, their trained artisans and engineers, and “up to the minute equipment, into the industry in such a way that- the local manufacturer, would have no chance whatever, and could not continue production. Knowing this, the local manufacturers were afraid to invest money. I assure honorable senators that that was the state of affairs which existed during the period I held office in the Lyons Government. I have come to view any proposal for the manufacture of motor cars in Australia with great favour. Considering this matter in the light of what has happened since and of conditions which prevail all over the world to-day, I think that there should be a greater effort to ensure that those industries in Australia which have certain classes of machinery that could be used in the production of motor cars, are brought into line with the company that is entering into this agreement with the Commonwealth Government. The duplication of huge presses which stand in factories at Melbourne, Sydney and Adelaide is economic waste. There should have been less haste in. the making of this agreement, and more examination of details. No doubt the- Government said, “ Here is a proposal at last; here is somebody prepared to put up the money “. Surely it is to be expected, that in undertaking a work of such magnitude, the Government will fully explore all liabilities; and’ on ,that score I cannot absolve it of all blame. The Senate is now asked to ratify the agreement which will give effect to matters specified in the schedule. I regard this as a non-party measure, the- parties voting how they please, just - as they would on a tariff bill, to give the Government what I regard as an open cheque.

Senator Cameron:

– It has been done in many other agreements.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I know of no case except in international agreements such as that between the Commonwealth and Greece which was before the Senate to-day. I know of no transactions of this magnitude, in which the Government is pledging itself to operate the law in favour of a company, that has not to be submitted to Parliament, clause by clause, and line by line. These headings are mere generalities, which are capable of expansion and contraction, and of being interpreted in one way or another by the Government and its advisers. As this is a non-party measure, surely we have the right to say that the agreement, when finalized, shall be brought before both branches of the legislature for ratification. Clause 4 of the bill states -

Notwithstanding anything contained in any act relating to the imposition of duties of Customs, no duties of Customs shall be im- posed and collected in respect of machinery -

which is required to be used in the production of engines and chassis for motor vehicles by the company formed in pursuance of an agreement executed by authority of this act;

Although I shall vote for the second reading of the measure, that provision seems to strengthen the case in support of the charge that this company will enjoy a monopoly. The company is to be given an advantage over every other Australian company. Whether it is to have Australian capital or foreign capital, it will have the advantage of admission of its machinery duty free. That seems to me to be a matter over which this Parliament should retain some degree of control. In paragraph 3 of the schedule, an attempt is made to protect local manufacturers of motor parts. The paragraph reads -

That the proposed company will purchase from established Australian manufacturers of motor vehicle parts such parts as can be supplied by them at reasonable prices and manufacture the remainder of the chassis at the works of the proposed company. It is, however, anticipated that the electrical equipment, crankshaft and a few minor items will need to be imported during the early stages of manufacture.

As it is proposed to hand over in general terms, power to the Executive to frame the agreement, it is our duty on that score alone to see that the agreement comes back for final ratification by the Parliament. Apart altogether from party considerations, when the Government submits this bill as a non-party measure, it asksfor authority to enter into the agreement under the headings outlined in the schedule, but surely the agreement should he subject to ratification by the Parliament.

We should not create a huge industrial organization which may result in the destruction of other industries that arc giving good service to the community. Judging by the speeches made during the Corio by-election, that point was well taken in regard to that district. What would happen to the industries there if some protection were not given to them? I appreciate what was done in the House of Representatives yesterday by the Leader of the Opposition (Mr. Curtin). He realized that this bill would never see the light of day if he persisted in the amendment which he submitted on the second reading, and he agreed to withdraw it if the monopolistic clauses were deleted. But it seems to me that the Government would be better advised to have those clauses retained, so long as the company is under government control. Nevertheless, we should see that the competitive companies are not bled white. Paragraph 10 of the schedule states -

That the Commonwealth will use its powers under the various regulations issued under the National Security Act 1939 in respect of capital issues and the control of industries in order to safeguard the interests of the proposed company against the establishment of similar manufacture in Australia by foreign or foreign controlled companies.

I do not share the views of my colleague, Senator James McLachlan, in regard to foreign capital. During the last few weeks, the Treasurer has placed an embargo on the export of capital to foreign countries and on the dividends and profits of certain companies operating in our midst. Paragraph 12 of the schedule states -

That the Commonwealth will fora period of five years use its best endeavours . . . to prohibit all sorts of things. That is delightful! What does it mean? Will the Government wipe out some companies altogether? Is it to exercise its power of eminent domain? I am reminded that, when I held the exalted but unprofitable portfolio of Postmaster-General I was approached by a director of an Australian company, who said : “ I have £2,000,000 to start a motor-car industry in Australia. I shall not start it unless I can get protection against the foreign-controlled companies “. I replied : “ We cannot give you monopolistic protection. I do not think that there is any power at law to do that; but, if I submitted the matter to the Cabinet, and got Cabinet to give a direction to the Supply and Tender Board of the post office, and all of the large Government departments, that they should use your motor cars, would you accept that?” He said that he would not. He wanted a monopoly to protect him against the other companies to which I have referred, and which, with their technical services and long experience behind them, would put him out of business. I spoke to the late Prime Minister (Mr. Lyons), and he, like Mr. Men- zies, said that he would grant no monopoly. The industry will never be started unless something of that kind be lone, and I think that Mr. Curtin would have been well advised to say, “We will give you the whole jug full “. That would be safer than a loose arrangement. Under this agreement the company could ask for practically all of the Government business, and it must be given that business, “ provided running efficiency, suitability and price of the vehicles are satisfactory to the Commonwealth “. Much will depend on the way in which the agreement is prepared. Paragraph 16 of the schedule provides that the company is to have p laced at its disposal, to the absolute exclusion of every other company, the technical resources of the Council for Scientific and Industrial Research. It states -

That the Commonwealth will accord the usual co-operation of the Council for Scientific and Industrial Research and Aeronautical Research Laboratories in an endeavour to aid the proposed company in the technical manufacturing problems with which the company may be confronted.

Senator McBride:

– That is the usual co-operation. No monopoly is to be given in that respect.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Then why should paragraph 17 be embodied in the schedule? It states -

That the Commonwealth is prepared sympathetically to consider the question of dutyfree admission of the engine and chassis parts in respect of which it is mutually agreed that importation is initially necessary for the manufacture of motor vehicle engines and chassis.

That is one of the matters against which a safeguard should be provided. The Commonwealth “ will sympathetically consider “ the granting of freedom from duty. I have drawn many hundreds of agreements, but I have never had to work any sympathy into them! The case becomes clear for the exercise, at a subsequent stage, of control by this Parliament.

Senator Abbott:

-Will the honorable senator refer to paragraph 15 of the schedule, which relates to unfair trading methods ?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– That paragraph reads -

That the Commonwealth will retain the import control established in the year one thousand nine hundred and thirty -six over the innportation of motor vehicle engines and chassis and will use this import control, if necessary, to counteract any unfair trading methods which may be adopted by overseas interests in selling competitive vehicles in Australia.

Senator Abbott:

-Who should judge whether the methods are unfair? Surely that is a matter for the Tariff Board.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– It may be. That is another point which indicates that the agreement should come back to the Parliament for ratification. I doubt very much the validity of any power to grant a monopoly to a particular industry. The only way to do that is through the tariff, but that would leave the company open to the competition of such capital as is available in this country. Whilst I fully agree that the establishment of the industry is necessary, I do not admire the way in which it is proposed to be done. I shall vote against Senator James McLachlan’s amendment, which if accepted, would practically kill the bill. I shall vote for the second reading of the measure, and, in committee, I shall submit an amendment, to clause 3; to give to. the Parlia-ment an opportunity to see to what the country is to be committed before the agreement is. finally ratified..

Senator LECKIE:
Victoria

.– I am not concerned as to who gets the benefit so long a3 motor vehicles are manufactured in Australia. This measure cannot correctly be referred to as a motor-car bill, because it deals with motor vehicles, including motor trucks. To refer to it as a measure dealing with motor cars, is to give the impression that it is intended to encourage the manufacture of engines of 15 horsepower to be used in cars for ordinary pleasure purposes. It is nothing of the kind . The great .bulk of modern transport business is clone in motor vehicles of varying horse-power and this measure is to encourage the manufacture of engines of 15 horse-power and over. One objection that has been raised to the bill is that it is essentially a proposal for consideration in peace time, and should be postponed for some years until the world is at peace again. I contend, however, that if the encouragement of this industry is necessary in peace time it is ten times more necessary in wartime, because nearly all units of a modern army are mechanized.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– But not in engine units of 15 horse-power.

Senator LECKIE:

– I have already explained that this bill does not limit engines to 15 horse-power. If I were a manufacturer of motor cars and I had a monopoly in the manufacture of under 15 horse-power engines, I would be in a much happier position than I would be if I were manufacturing in competition with other men in the 15 horsepower and over class. It is certain that in future our Defence Forces will have to depend more and more upon mechanized forms of transport, and if we have to send to America for essential engines we shall be in a very bad way. I regard this measure as one of the most vital planks in the Government’s defence programme. It is essentially a war-time proposal. A second objection that has been urged against the bill is that during war-time the establishment of this industry will divert from existing and essential industries skilled men who are required to. carry on the Government’s defence industries. I have, been engaged in manufacturing for a long time., and have no hesitation in saying thatthere is nothing whatever in that objection. Motor-car engines, like a great many other types of equipment, are mass-produced on what is known as the line system. Fully fourfifths of the work is done, not. by skilled men, but by process workers. Practically the only skilled tradesmen required would be for the initial laying down of the general scheme. After that the work would be done by process workers. I. myself, could manufacture motor-car engines because I have the necessary machinery, but I have to admit that I could not produce them at a competitive price. Let us see what Mr. Smith, the managing director of Australian Consolidated Industries Limited, is likely to get out of this proposal. As a start, he is risking £1,000,000 of his eompany’3 capital, so if he does not make a success of the venture that money will be lost.

Senator Collings:

– And he has undertaken to find more capital if that is insufficient.

Senator LECKIE:

– That is true. If Australian Consolidated Industries Limited should not succeed the Commonwealth will not lose anything because the Government is not putting any money into the business, apart from its undertaking to pay a bounty of £30 for each engine up to the first, 20,000 and a slightly reduced bounty for subsequent deliveries.

Some honorable senators have concentrated their attention on paragraph 13 of the schedule which provides that the Commonwealth will, during a- period ‘of five years from the date of commencement of manufacture, purchase a substantial proportion of Commonwealth Department requirements from the proposed company. In my view that is practically all that the proposed new company will get out of this proposal. Other honorable senators have directed attention to paragraph 15, which enacts that the Commonwealth will retain the import control of motor-vehicle engines and chassis.- But surely every one knows that the influential American companies which arc so strongly represented in Australia must in future manufacture engines here if they wish to hold their business. Thus the suggestion that the import control by the Government will give to the proposed new company some advantage, falls to the ground. The only benefit which that company will get over other competitors will ‘be the bounty of £30 for engines and a substantial proportion of government orders. In paragraph 10 of the schedule the Commonwealth undertakes to use its powers under the various regulations issued under the National Security Act in respect of capital issues and the control of industries in order to safeguard the interests of the proposed company against the establishment of similar manufacture in Australia by foreign or foreigncontrolled companies. Again, in my view, objection to the proposal on that ground will not stand examination, because the companies already represented here have ample capital already, and they will not require the permission of the Treasurer

Vo increase their capital. I know of no regulations issued up to the present time that would prevent these so-called foreign companies from manufacturing motorcar engines in Australia if they wanted to do so.

Senator Fraser:

– Tinder this bill if they manufactured engines in Australia they would be entitled to receive the bounty.

Senator LECKIE:

– That is not so unless their capital was 66 per cent. Australian. I am rather sorry for what has been said about these so-called foreign companies, because for many years we have been endeavouring to persuade them to manufacture in Australia engines and chassis which at present are being imported. I do not think that any distinction should be made between the two classes of manufacturers. But nothing in the schedule will prevent these powerful overseas companies from manufacturing engines in this country if they want- to do so. They have at their disposal all the technical, skill required, and it would be a comparatively easy matter for them to bring to Australia sufficient skilled men to begin manufacturing hero. Paragraph 15 will give the Commonwealth power to control imports, but as these companies will almost cer tainly begin manufacturing internal combustion engines in Australia, there is no power in the act to interfere with them.

Senator Abbott:

– Except perhaps in the control of the importation of necessary machinery.

Senator LECKIE:

– The companies would, of course, have to pay import duty, whereas the. proposed Australian company would not. That would be one advantage for the local concern. But as I have endeavoured to explain, the existing companies would have a big star’ over any new venture in the manufacture of motor-car engines because they have in America efficient organizations and have had many years’ experience in the business. It is evident, of course, thai had the Government not introduced this bill, these companies would not have made any move to manufacture internal combustion engines in Australia. Now they will be obliged to do so in order to hold their business.

Senator Fraser:

– “What were the terms of the Ford Company for the manufacture of motor-car engines in Australia ?

Senator LECKIE:

– I do not know.

Senator Fraser:

– Did not that company propose a bounty of £130?

Senator LECKIE:

– I understand that that came out in evidence before the Tariff Board, and I think that the Ford company, by exaggerating, damaged its case. i repeat that had it not been for the offer by Australian Consolidated Industries Limited and the agreement made by the Government, there was little hope of any of the existing companies ever manufacturing motor engines or chassis in Australia. Even if we were not at war this industry would be of great importance to Australia; but at present it is absolutely essential that internal combustion engines for use in our mechanized units should be manufactured, as in that way the defence of the Commonwealth would be assisted materially.

Senator FRASER:
Western Australia

. - Although I do not wish to delay the passage of this important bill, there are certain points to which I wish to direct, attention. It is quite obvious that a concentrated effort has been made by one section of the Parliament to pre- vent the manufacture of internal combustion engines in Australia, and it is regrettable that that section should wish bo defer this proposal, which has already been too long deferred, when the industry would assist our commercial and defence activities. I agree with Senator Abbott that we should do everything possible to assist in the successful prosecution of the war, but I cannot support his contention that this industry should not be established in Australia at this juncture. Apparently the honorable, senator Overlooks the fact that circumstances may arise in which we would be unable to obtain overseas the engines we require, and that therefore provision should now be made for their manufacture in Australia. My only regret is that this industry is not to be established in “Western Australia, a State which has been overlooked in connexion with the manufacture of defence requirements. I have heard members of the Country party suggest that foreign capital should be attracted to Australia in order to assist in its development, but when a large sum is to be invested in an important industrial activity they object. I remind honorable senators that the Australian iron and steel industry has been developed under the bounty system, the method proposed in this instance. This proposal originated in a bill which passed through this Parliament in 1938, and since then money has been accumulating for this specific purpose. Moreover the establishment of the industry will .provide employment for a large number of skilled and unskilled persons in the post-war period, when many of our defence establishments will not be functioning. Although Senator Johnston tells us that he is a supporter of the Government, so far as I have been able to judge since I have been a in ember of this chamber, he opposes practically every measure which comes before it. I notice from the newspapers that scrap iron is being collected in Great Britain for war purposes, and if the war lasts for some time and there is a greater demand for iron the iron ore deposits in Australia will have to be developed to a greater degree. As Western Australia is 1,800 miles nearer to Britain than the deposits controlled by the Broken Hill Proprietary Company

Limited, the Commonwealth Government should establish smelting works in Western Australia and by that means compensate the State to some slight degree for the disabilities it experiences under the federal system. Although the people of that State have, in common with those in other parts of Australia, to pay customs duties in order to encourage secondary production, owing to our geographical situation, the establishment of our own secondary industries is uneconomic. Any assistance which our secondary industries receive is from the State government and not from the Commonwealth authorities. When it was first suggested that the manufacture of internal combustion engines was to be undertaken in Australia, I received a cablegram from a gentleman in South Africa inquiring as to the estimated price at which the cars would be sold and whether there was a possibility of establishing agencies in the Union. This shows that other countries are interested in the project, and I am confident that when the industry is in full production, the Australian people will have cheap cars and there will be an opportunity to build up a profitable export trade. One of the most important features of this proposal is that employment will be provided, particularly during the post-war period, for many men who may be displaced through the cessation of war-time industries. I support the bill.

Senator UPPILL:
South Australia

– I intend to support the amendment moved by Senator James McLachlan because, at this critical period of our history, Australia, as au integral part of the British Empire, should not be discussing the manufacture of motor cars, but should be devoting all its energies to the successful prosecution of the war in which we are so vitally involved. Owing to the high price of petrol, probably thousands of cars are not in use, and should there be a further increase of price, the number out of commission will be even greater. If this project were a portion of our defence scheme, I would not hesitate to support it, but as the manufacture of arms, munitions, aircraft, aircraft engines and foodstuffs is more essential to our national security, there is no urgency for this measure. There are some paragraphs in the proposed agreement under which monopolistic control can be established, and for that reason, too, I am opposed to the bill. The company which is to control the undertaking will enjoy rights which are denied to others. Any company wishing to engage in the production of motor cars has sufficient protection under our bounty legislation and customs duties, and there ‘ is no reason why this measure should be passed. We have been informed that it is in the interests of Australia to attract capital from overseas for investment in industry, but under this measure investment in this industry will be impracticable. I intend to support the amendment to defer the whole project, but if that amendment be rejected, I shall oppose the second reading of the bill.

Senator AYLETT:
Tasmania

– I was astounded to hear the objections raised by Senator Abbott, and I was even more astounded when I heard the amendment moved by Senator James McLachlan, the effect of which is to prevent the investment of £1,000,000 of private capital in an industry which will be of inestimable benefit to Australia. As this company is to provide its own capital without any financial assistance from the Government, I am surprised that some honorable senators should oppose the project. Senator Abbott, who said that we could not win the war with motor cars, should realize that should Australia be invaded, thousands of lorries and trucks would be required to transport our troops from one centre to another. Honorable senators who say that “second-hand cars can be conveniently converted for the transport of military material and light arms should think more deeply. Apparently, they do not realize just exactly what is involved in such operations. The vehicles would necessarily be loaded in a hurry, and I am sure that they would not stand up to this kind of work for very long. Cn any case sufficient numbers of used cars would not be available, even if they were suitable, for this purpose. Apparently some honorable senators have an exaggerated opinion of the condition of the average used car. Perhaps they have had eyes only for the shining paint which is so lavishly applied to used cars before they are exhibited for sale. They should test a few of these vehicles. I have not the slightest doubt that any attempt to transport large quantities of troops and material in such vehicles would be doomed to failure. Most of them would soon break down, and cause confusion on the route.

If imports of motor cars and trucks are to he restricted the need for manufacturing our own vehicles becomes increasingly urgent. It is all very well for some honorable senators to say that in a time of emergency the Military Forces could commandeer sufficient vehicles, but this could not be done without causing serious dislocation in the distribution of essential commodities for the use of the community. If imports of motor vehicles are to be restricted we have no alternative but to manufacture our own, and to get on with the job quickly. It has Deen said that the establishment of this industry will draw upon the supply of mechanics to the detriment of our munitions manufacturing programme. Should we have no alternative we can, in the last resort, transfer mechanics from this industry to defence industries, but I contend that this industry also will prove to be most important from a defence point of view. I am not wholly satisfied with several provisions of the bill. However, I do not intend to delay its passage. If any honorable senator opposite is prepared to propose amendments in the committee stage, honorable senators on this side will approach their proposals with an open mind. Much has been made of the argument that Australian Consolidated Industries Limited is to be given preference over any other company which might desire to undertake the manufacture of motor cars. As the bounty is to be paid in respect of engines of 15 horse-power and over, this company will enjoy no concession so far as engines for. light cars are concerned. Yet the present keen demand for the light car should not diminish. Consequently, any company can enter this field of car manufacture at no disadvantage compared with Australian Consolidated

Industries Limited. I shall support any amendment proposed in the committee stage which I believe will improve the measure, in any respect. However, on the whole, I approve the bill.

Senator ARMSTRONG:
New South Wales

– I support the measure. The feature of this debate has been the attitude taken up by Senator Abbott and Senator James McLachlan. . The former seems to have a conveniently short, memory.. He contended that in the present crisis we should be dealing with more important matters. He said that this Parliament was simply wasting time in considering this measure at this juncture. I remind him that when Germany was over-running Holland and Belgium last week, this chamber occupied one day, and the House of Representatives four days, in discussing the electoral bill. It cannot be said that that measure is in any way related to our war effort, but the honorable senator did not protest that Parliament was wasting time when it was dealing with that legislation. This measure is of vital importance to the workers of this country and the nation as a whole. The present is a most opportune time to commence an enterprise of this. kind. If we do not accept this opportunity . to establish this industry we shall be obliged to wait for a very long period before another attempt is made to manufacture, cars in this country. The time is ripe to commence this enterprise, and a company has come forward prepared to take the financial risks involved.

Senator Sheehan:

– Not very much risk is involved in this.

Senator ARMSTRONG:

– I am inclined to agree with the honorable senator, but, at the same time, we must admit that Mr. Smith, the general manager of Australian Consolidated Industries, whether we like him personally or not, is one of the greatest organizing brains in this country. He could not have so rapidly developed his business in Sydney to its present huge proportions unless he were a man of outstanding ability. He is the kind of man to whom we can confidently entrust the establishment of this industry. If he and his. company are prepared to shoulder the risks involved, we should give to them every encouragement in this enterprise. If the company can make a success of this venture I shall not cavil at the profits it may make, - provided it produces cars of a standard equal to the American and British vehicles now imported into this country, and makes them available to our people at a reasonable price.. If he can do this Mr. Smith will confer many benefits upon this country. To-day, the prices charged for imported cars are much in excess of their true value. There can be no doubt about that. Last year General Motors Corporation in America made a profit of 183,000,000 dollars. Yet many people in this country are reluctant -to grant any concession to an Australian company in order to enable it to fight so powerful a concern as that American corporation, which has in Australia, several subsidiary ‘companies, all of the ordinary shares in which are held overseas. One of these : subsidiary companies is General Motors-Holdens Limited, which made a profit last year of £1,000,000. I should be interested to know how much of that sum is represented in the profit of the parent American company. For some years now General Motors-Holdens Limited and the Ford Company have been making a fair thing out of the industry in Australia, but. neither .bf these companies has displayed any intention :.to manufacture complete, cars here. If either had done so. the necessity for this bill would- not have arisen. However, if Australian . Consolidated Industries Limited had not been prepared to undertake this venture, it is probable that we should have been impelled to force these American subsidiary companies to manufacture complete cars in Australia. In this connexion I recall the visits paid to Australia by Lord Nuffield. Undoubtedly he made most generous’ gifts to this country, but I feel sure that had he undertaken the manufacture of Morris cars in Australia he would have conferred greater benefits upon this nation. However, he declined to do so. Lord Austin adopted a similar attitude. Four years have elapsed since the- first step was taken to encourage the manufacture of motor engines in this country. I cannot understand why this delay has occurred, because no serious technical difficulties arise’ in this work. Recently when I visited- thb works of the Commonwealth Aircraft Corporation, which is manufacturing Wirraway planes for the Commonwealth Government, I was amazed at the precision work involved in such an undertaking. Commander Wackett, who is in charge of these works, explained to me that the manufacture of motor engines was mere- child’s play compared with the production of high-class aeroplane engines. He said that no technical problems existed to make it difficult for us to manufacture motor engines equal to any produced elsewhere. Considerable opposition has been shown to this bill by certain sections of the community. That is quite to he expected, because it has been the policy of big business for as long as I can remember, that every endeavour should be made to prevent the entry of competitors into the industrial field. Steps .are always taken to see that competitors do not live. I have no doubt that General MotorsHoldens Limited and the Ford Motor Company are extremely anxious that the motor-car industry should not be established in Australia. Since the agreement between the Commonwealth Government and Australian Consolidated Industries was announced at the end of last year, there has been a continuous hullabulloo from these firms. We know quite well what would have happened. They would have kept on dealing with this matter in the manner which we have so often seen used by big business interests. They would have made every effort to ensure that this industry was strangled at birth, and motor cars would not have been produced here despite huge profits from the buying public. The basis of the arguments put forward in opposition to this bill has been that this industry is not essential to our war effort, but I submit that if there is one industry that we must develop in the national interest it is the motor-car industry. One of the outstanding features of this war, and it has come as a shock to many of us, has been. the lightning mobility of the conflict. We have seen this fast-moving warfare in actual progress, and:- we have been astounded at the result. Nobody who based his ideas of military strategy on what took place in 1914-18 could possibly have imagined the speed at which the present conflict has taken place. .In Australia, where capital cities and big centres of population are so widely spaced, mobility is the greatest need in our defence forces. I have heard the statement that the motor car is of no use in modern warfare, but I remind honorable senators of the valiant part played by the taxi cabs of Paris in 1914 in conveying large numbers of troops at a rapid rate to meet the fast-moving German armies. If the motor-car industry be established in. Australia, the basis will have been laid for the speedy and efficient mobilization of troops. With modern transport vehicles it is possible for huge bodies of troops to cover distances of 40, 50 or 60 miles a day. In the American publication, Life, two months ago appeared a photograph of a New York wharf on which, lined up as far as the eye could see, were motor trucks ready for transport to England. If England has reached the stage in its development when it has seen fit to augment its own production of motor vehicles by purchases from America, surely we in Australia must do our part to build up the motoroar industry here. If in time we did not need all of the cars we produced here we might be able to make some of them available to Great Britain, as we have clone with Lockheed bombers which we ordered from the United States of America. ‘ Our orders for those bombers have been transferred to Great Britain because of the urgent need for aircraft there, and it may be that we would be able to supply that country with motor vehicles should our local production exceed the Australian demand. From what I have seen of industrial development at the Fisherman’s Bend aircraft factory, I am convinced that the most important factor in the training of technicians and skilled tradesmen is their employment in growing industries. By placing men in skilled industrial occupations, we shall form the nucleus of a competent staff which can later be employed in training other young artisans. When the Commonwealth Aircraft Corporation’s factory at Fisherman’s Bend was first started, the problem confronting the organizers was that of obtaining trained workers. They started off by employing a few men, probably fifteen or twenty leading hands who had been trained years before in the industry by Commander Wackett himself, to teach the raw hands who knew nothing whatever of the job. When I visited the factory the employees numbered many hundreds, who are now in a position to assist in the expansion of the industry by going as instructors to other centres where aircraft production is to be embarked upon. Within twelve months of the opening of a motor-car factory in New South Wales, there will be built up an efficient nucleus from which trained men can be further spread to industries in other parts of the Commonwealth. The great need of this country to-day is trained men. Unless we have organizations such as the Commonwealth Aircraft Corporation and Australian Consolidated Industries Limited, there will be no means of training men. One of the greatest advantages of the creation of a motor-car industry in Australia will be the fact that in that industry there will be thousands of artisans in various stages of training, from probationary work right up to highlyskilled occupations. It is apparent that the huge factories which will be necessary for the large-scale production of motor cars, will be readily convertible to war work should circumstances demand it. We have seen what has happened in England in that way; factories which in peace-time were producing all sorts of commodities, have been put on a war-production basis and are now successfully turning out large quantities of munitions and other essential war requirements. Should large factories be established here for the manufacture of motor cars, it is quite possible that, if circumstances warranted it, they would be taken over by the Government in the interests of the nation, .for the manufacture of munitions. To-day an urgent problem that is claiming the attention of governments is that of youth employment. It has been becoming increasingly difficult to find work for the many thousands of lads who leave school each year, and who, in the absence of steady jobs, are hanging around street corners. The establishment of this great secondary industry will absorb large numbers of these young men. I know that in Sydney there are many lads who at the age of sixteen or eighteen are “ too old “ to obtain jobs. Boys leaving school at the age of fourteen years have little trouble in obtaining employment as messengers, &c, but when they reach the age of sixteen or seventeen years they find that employers are giving their jobs to younger lads and there is no work for them. Even at that immature age they are being put on the industrial scrapheap. The efforts of these young lads to find employment are tragic. Some young men have gone right through life since leaving school without having any regular earnings until their enlistment in the Australian Imperial Force. With an organization such as Australian Consolidated Industries Limited engaged in the manufacture of motor-car engines in this country, lads who received employment would not have the same fear of dis- missal at a later age, because no doubt if a boy made a success of his work his services as a skilled tradesman would be retained. Therefore, from that point of view this industry will be valuable,, particularly in New South Wales, where the factory is to be established.

It has been alleged that we are supporting a monopoly, but if the choice confronting us is between on the onn hand, a monopoly and a motor car fae tory, and, on the other hand, no monopoly and no factory, I have no hesitation in supporting the monopoly so long as the industry is to be effectively controlled. After hearing all the nice things said about the Colonial Sugar Refining Company Limited during the debate on the Sugar Agreement Bill last week, I have come to wonder whether there may not be some good in monopolies after all. Throughout Australia monopolies are flourishing, and I do not suppose one more or less will do us any harm. Possibly the results of the work of this monopoly will he so beneficial that in the future we shall be impelled to say the same nice things about it as were said last week about the Colonial Sugar Refining Company Limited by certain honorable members of both the Government and the Opposition. So long as unemployed boys are to be absorbed in useful occupations I shall do everything in my power to help industries of this character to be established. In my opinion the real test of whether or not a government is successful is its handling of the unemployment problem. Evidence that the Commonwealth Government has not been doing its job is to be found in the fact that there are too many unemployed - many of them boys - in the capital cities. Here is a golden opportunity to absorb at least some of these lads. I support the bill, not only in the hope that it will bring into being an important industry which in the years to come will continue to expand, but also, because I believe that its establishment will be of great material benefit to many thousands of workers who to-day have no jobs.

Senator DEIN:
New South Wales

– I support this bill in the belief that this industry will soon grow to one of the wealthiest and most progressive industrial undertakings in this country. I should like to congratulate the former Minister for Trade and Customs (Mr. John Lawson) on the important pan ‘ which he played in the making of the agreement which is the basis of this legislation. I was interested to hear a tribute paid to the honorable gentleman by Senator Amour who referred to a “ slip “ that had been made. Unfortunately that “ slip “ was so magnified during the Corio by-election campaign that by polling day it had assumed the proportions of a monstrosity.

Senator Sheehan:

– We should not have been discussing this measure this afternoon had not that “ slip “ been made.

Senator DEIN:

– We would, because this bill is identical with the measure which the Government had already drafted. It is interesting to note that during the debate yesterday in the House of Representatives the honorable member for Corio (Mr. Dedman) was the only man who opposed the establishment of the motor-car industry in Australia. In fact, he supported an amendment which was designed to kill the industry. In doing so he was at leastconsistent with Labour’s attitude during the Corio campaign. But Labour’s purpose in attacking the agreement had been served. Mr. Dedman had won the Corio seat, and the party was free to reverse its attitude. The opposition to the bill on the part of some honorable senators supporting the Government has been based on the claim that all our efforts should be devoted to an expansion of war industries; and that the time is not opportune for starting the manufacture of motor cars. I am confident, however, that had this bill been introduced twelve months ago, or even if it were introduced two years hence, the time would still not be opportune. It was further said that the industry would retard our war efforts. Whether the industry be established or not the manufacture of aeroplanes will not be interfered with. The war has only just begun and the Defence Departmentis already using several thousands of motor cars. I would have supported the establishment of the industry twelve months ago, even if no war had been in progress. In modern warfare, the country that can provide the largest, number of mechanized units has tremendous advantages over its adversaries.

No member of this Parliament could honestly say that the industry could be undertaken without a monopoly. Although no monopoly is to be expressly given, I contend that the company will exercise monopolistic powers, because the Australian market for motor cars is so limited that a second company is not likely to embark on such an undertaking. In 1936, a duty was imposed on engines and chassis of motor vehicles, in order to provide a fund for the payment of bounty to encourage the establishment of the industry in Australia. For three and a half years the duty’ has been imposed, and the total sum collected is about £1,500,000. Four years ago the Government considered that a start, should be made to establish the industry, but at that time the great motor car firms in Australia said that they were not interested. They made .a statement to the Tariff Board which convinces me that they were not only not interested, but also prepared to .place obstacles in the way of local manufacture. They did not submit even one proposition. Then the Government went outside the motor industry. It found that the Broken Hill Proprietary Company Limited was not interested. Next it approached Australian Consolidated

Industries Limited,whose managing director immediately said, “ In what way are you prepared to protect my interests?” The Government replied, as it would have said to any other such company, that it would give certain exclusive rights. Because of that concession, an understanding was reached with that company regarding the establishment of the industry. The “ no monopoly “ provision that has been inserted in the bill in the House of Representatives is not worth a snap of the fingers. When Australian Consolidated Industries Limited commences manufacture no competitor will enter the field, as the market is too limited.

Whether we have a particular interest in this company and its managing director, or not, the fact is that the company is prepared to undertake an expenditure of £1,000,000 or more before it receives the right to collect £1 of bounty. Great capacity and tremendous courage are required of a company before it can enter into an undertaking such as that envisaged by this bill, and we know that the managing director possesses those qualities. In a few years the industry will, I believe, prove a monument to the memory of the man who was prepared to risk his personal reputation, and a tremendous amount of capital, in establishing the industry. I have heard nothing to shake my determination to give to this measure my wholehearted support.

Senator SHEEHAN:
Victoria

– The Labour party has consistently urged the establishment of the motor vehicle manufacturing industry in Australia. As long ago as 1936, the parties supporting the Government made up their minds that this action would be in the interests of the country. At that time a tax of about £5 on each motor chassis was imposed for the purpose of establishing a fund for the encouragement of the industry, and the sum raised has reached £1,500,000. Arguments were advanced for the purpose of preventing the establishment of the industry, but similar arguments have been used throughout the period in which Australia has been endeavouring to develop its secondary industries. Whenever the establishment of a new industry is proposed, certain interests declare that it would be impossible to launch it, but a new argument is now advanced. It is said that, because a war is raging, the establishment of this industry should again be delayed. In December last, the Parliament passed the Motor Vehicle Engine Bounty Act. The war was in progress at that time, and Australia was preparing to build up its defences. I know of no honorable senator now opposing this measure who suggested in December last that, on account of the war, the establishment of the industry should be deferred.

Had it not been for “ the slip “ made by the then Minister for Trade and Customs (Mr. John Lawson), we should not have been discussing this measure to-day. Any company that desired to take advantage of the Motor Vehicle Engine Bounty Act 1939 could have participated in the fund. Therefore, a certain degree of suspicion prevails in the minds of some of us with regard to this measure. It is rather remarkable that when that act was introduced, negotiations were in progress, unknown to the Parliament and behind its back, to grant a monopoly to a certain company. Every honorable senator who voted in favour of the bounty act thought that he was doing something to enable the interested parties to participate in the bounty.

Senator Dein:

– The honorable senator should speak for himself.

Senator SHEEHAN:

– If the honorable senator was in possession of information which he did not disclose to the Senate, during that debate, there are good reasons why a measure of this kind should be carefully scrutinized. There is something wrong, if the honorable senator knew in December last that negotiations for the granting of a monopoly were proceeding. The measure was introduced in the dying hours of the session when proper attention could not be given to it. We all were anxious to have it passed because it was designed to encourage the establishment of a new industry that would provide work for thousands of our people, and we wanted to prevent a recurrence of the unsatisfactory position that was created after the last war. Our leader (Senator Collings) welcomed it. But evidently there was something sinister behind the whole scheme.Already a plot had been hatched, and when Parliament was safely in recess the Government entered into negotiations with the company for the purpose of giving to it a monopoly. But for what some people regard as an unfortunate incident, . the agreement to give Australian Consolidated Industries Limited a monopoly in this new enterprise would have been completed behind the back of Parliament. Consequent on something that happened, but not because he was opposed to the granting of a monopoly, the Prime Minister deemed it expedient to refer the agreement to Parliament for ratification.

Senator McBride:

– Is the honorable senator opposed to a monopoly?

Senator SHEEHAN:

– Certainly. The Prime Minister decided to ask Parliament to ratify the agreement, merely because the real nature of the proposal had been uncovered. That is the story which we’ told to the electors of Corio. We made it plain to the people that there had been some double-dealing on the part of the Government and its supporters over this matter.

We have now reached the stage where again, in the last hours of this period of the session, it is necessary for Parliament to approve the making of an agreement with this company. I have no doubt whatever that another attempt will be made to create a monopoly. Is it any wonder that honorable senators on this side have some suspicion about it? We are under a debt of gratitude to Senator A. J. McLachlan for the manner in which he dissected the proposal. I approve of much of what he said, but I fail to see why he should be indignant simply because, so he told us, wc were being asked to give the Government a blank cheque. That complaint comes strangely from the honorable gentleman who, as a member of other governments, should be accustomed to the receipt of blank cheques from this Parliament. Only a few weeks ago, this Government received from Parliament a blank cheque giving to it control over the lives of the people of this country in order to prosecute the war to ii successful conclusion.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– In this proposal we are not giving a blank cheque to the Government. It is our measure. Parliament can lay down the terms.

Senator SHEEHAN:

– The bill is to approve the making of an agreement with Australian Consolidated Industries Limited. What is to be put into the agreement ?

Senator MCBRIDE:
UAP

– Look at the bill.

Senator SHEEHAN:

– In his secondreading speech, the Minister for Trade and Customs (Senator McLeay) told us that the Government proposed to do certain things, but he dealt mainly in generalities. Paragraph 14 of the schedule requires that the Government shall take up with His Majesty’s Government in the United Kingdom the question of waiving its rights under the Ottawa Agreement in respect of the margins of preference. What will happen if the British Governmentrefuses to abrogate its rights?

Senator MCBRIDE:

– We shall respect its rights.

Senator SHEEHAN:

– In that event what sort of an agreement would we have? Will this Government then enter into some other arrangement with the company without the knowledge of Parliament?

Senator McBride:

– The honorable senator may not understand the agreement, but it will he there for him to see.

Senator SHEEHAN:

– I have had a long apprenticeship in trying to understand the machinations of people whom the Minister and his colleagues represent in this chamber. I have seen this country bled white toy the interests which put them in this Parliament.

Senator McBride:

– That statement is inaccurate.

Senator SHEEHAN:

– It is true, and I have no doubt that that experience will be repeated so long as the majority of the mem’bers in this Parliament represent the interests which support this Government. While I am in this chamber, I shall say what is in my mind in regard to these matters. I repeat that in’ the dying hours of this period of the session the Government once again presents a proposal for the approval of Parliament, knowing quite well that the majority of members desire to see this industry established in Australia.

Senator McBride:

-Does the honorable senator intend to support the bill?

Senator SHEEHAN:

– I am supporting the proposal to establish this industry in Australia, but I reserve my right to criticize the Government for presenting its proposal at this late hour of the session. It was adopted by the House of Representatives in the early hours of this morning, and members of that chamber were not given sufficient time to examine it. Is it any wonder that objections are being heard about the possibility of arrangements being made which may prevent the industry from being established in any particular State ? Under the former measure there was nothing to prevent any firm in Western Australia or any other State from engaging in the industry.

Senator McBride:

– Nor is there anything in this bill to prevent that from being done.

Senator SHEEHAN:

– I shall be in a better position to know when I see the agreement that is to be made.

Senator Leckie:

– The agreement is in the bill.

Senator SHEEHAN:

– As Senator A. J. McLachlan has pointed out, the schedule contains only headings of a proposed agreement. I feel sure that, despite all that has been said about the evils of a monopoly we shall find that the agreement will give to the Government the power to insert stealthily and behind the back of Parliament provisions as obnoxious as those that were contained in the other agreement. That is what I am afraid of, because I know there was a move to grant a monopoly to this company. If the Government had acted openly, the measure would have been passed long ago and senators would have had an opportunity to examine it. The way in which it has been brought before us practically forces us to accept it or risk losing the industry. I should like to see a copy of the agreement ; but, knowing the Government as I do, I believe that the document will never he made available to us.

Senator ASHLEY:
New South Wales

.-Although I support the bill, because I believe that it will be of great benefit to Australia, portions of the proposed agreement should be amended if our interests are to be fully safeguarded. I remind Senator Abbott, who is afraid that the establishment of the industry in Australia might be the means of diminishing our war effort, that four years ago a duty was imposed on imported motor engines and chassis with the result that £1,500,000 is now held in trust to assist the establishment of the motor-car industry in Australia, and that the taxpayers will not have to provide further financial assistance in that respect. That fund having been providedby the purchasers of motor cars, the honorable senator’s fears are unjustified. As the industry is one of the most important that could be established in Australia, this is an opportune time to get it in operation, because it will be of benefit to the commercial community and eventually will be able to provide internal combustion engines for our mechanized military units. Moreover, many of our men who are now going overseas to fight for their country will derive some satisfaction from the knowledge that on their return employment will be available in this important undertaking. I remindSenator Dein, who referred to the attitude of the members of the Labour party who participated in the Corio by-election campaign, that the measure which we are now discussing is not the one that was objected to on that occasion. The clause which provided for monopolistic control has now been deleted.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– It has not.

Senator ASHLEY:

– The members of the Labour party intend to support the bill in its amended form as the objectionable feature has been removed. Several paragraphs in the agreement are unsatisfactory to me. Clause 4 of the bill provides -

Notwithstanding anything contained in any Act relating to the imposition of duties of Customs, no duties of Customs shall he imposed and collected in respect of machinery -

which is required to be used in the production of engines and chassis for motor vehicles by the Company formed in pursuance of an agreement executed by authority of this Act; and

Under that paragraph the industry may develop as’ it has developed in other countries, particularly in the United States of America, and interfere with small industries. Under the Motor Industry Bounty Act a bounty of £30 is paid for each engine up to 20,000; £25 an engine on the next 20,000 ; and £20 on the next 20,000. In Australia approximately 10,000 cars are purchased annually, and if one-fourth of that number were manufactured by Australian Consolidated Industries Limited the company would receive £600,000. When a bounty was first paid on pig iron 25 years ago the expansion of that industry could not be forseen. and it is only reasonable to assume that the motor-car industry also will expand. Some of the provisions in the agreement are not sufficiently watertight, and I trust that care will be taken to ensure that this undertaking will not be the means of destroying small industries. Paragraph 15 provides -

That the Government will retain the import control established in the year 1936 over the importation of motor vehicles, engines and chassis and will use this import control, if necessary, to counteract any unfair trading methods which may be adopted by overseas interests in selling competitive vehicles in Australia.

That is a dangerous provision which requires modification, because the company has only to establish that it cannot manufacture successfully in Australia at a certain price and the Government can prevent competition.

Senator McBride:

– It says, “ unfair trading methods “.

Senator ASHLEY:

– What is the definition of “ unfair trading methods “ ?

Senator Abbott:

– The Tariff Board should be asked to decide whether the competition is fair or not.

Senator ASHLEY:

– Yes; the Tariff Board can go into the pros and cons of any claim made by the company, and in that way the position of the industry can be disclosed to the public. I” have often been accused of adopting a parochial attitude in defending the interests of New South Wales. Two honorable senators from South Australia are opposed to this agreement, but it is just as well to bear in mind that the new industry will compete with large motor works now operating in South Australia. At the same time, an honorable senator from Western Australia went so far as to say that whilst he was opposed to this measure, he would be favorably disposed towards the project if the proposal were to establish the industry in Western Australia. . Greater facilities exist in New South Wales than in” any other State for the establishment of this industry. At the same time, no companies in Western Australia, or South Australia, indicated to the Government that they were desirous of undertaking the manufacture of motor cars. I understand that when Australian Consolidated Industries Limited first intimated that it was willing to embark on this venture, the Premier of South Australia made representations to the Commonwealth Government with the object of launching the enterprise in that State. I have no doubt that, had those negotiations succeeded, the two honorable senators from South Australia who are opposing this measure would be all in favour of such a project.

My principal reason for supporting the measure is that the establishment of this industry will provide employment for 10,000 semi-skilled artisans. So many men capable of doing this work are available, that we need have no fear whatever that the supply of artisans will be depleted to the detriment of our munitions manufacturing programme. The new industry will be of benefit to the nation as a whole, and I wish it every success. It will considerably strengthen our war effort, and play a major part in helping us to meet our post-war problems.

Senator ARTHUR:
New South Wales

– This Parliament is being, asked to approve a certain agreement whereby Australian Consolidated Industries Limited contracts with the Commonwealth Government to manufacture motorcars in Australia. Throughout this debate not one honorable senator has touched upon the history of this company. I have made inquiries into its operations, and for the information of honorable senators,

I quote the following extract from Who Owns Australia, a publication issued by J. N. Bawling, B.A., in October last: -

Australian Consolidated Industries Limited was registered in 1915 as the Australian Glass Manufacturers Company Limited. The name was changed in February, 1939. The net profits for 1938 were a record, £324,512, and the dividend on the ordinary shares was about 25i per cent., disguised as 6.80 per cent, by an issue of bonus shares at the time of the change of name. For each of the years 1935, 1930 and 1937, 15 per cent, was paid to ordinary shareholders, and preference shareholders have regularly received’ their 9 per cent. Tho balance-sheets from 1930 onwards have disclosed rapidly expanding reserves - from £471,350 in 1930 to £828,363 in 1938. But the manoeuvres associated with the- changing of the name tills year have disclosed that enormous secret reserves have been built up. The admitted reserves in 1938 were, as we have just stated, £S28,363. The surplus profits for 1938 were given as £09,1C4 - bringing the reserves up to £897,527. But - in this year’s balancesheet the reserves are given as £2,670,429! In addition, sale of the company’s assets - to its own subsidiaries - enabled it to issue to its shareholders bonus shares to the value of £2,558,840! Two and a half millions of water at one stroke ! The “ paid-up “ capital is therefore now £3,664,292; in 3,489,292 £1 ordinary shares and 175,000 preference shares.

As a result of this year’s, manoeuvres Australian Consolidated Industries is now a holding company and production is carried on by fourteen subsidiary companies, whose shares, held by the parent company, are given as of the value of £7,043,017. Those companies are as follows: -

Australian Glass Manufacturers Company Proprietary Limited: Making glass containers of all kinds, Felspar and silica products.

Australian Window Glass Proprietary Limited: Making- all kinds of window glass, figured rolled glass, glass bricks.

Australian- Consolidated Industries Engineering Proprietary Limited: General engineering, machines, moulds, dies.

Australian Consolidated Industries Fibre Packages Proprietary Limited: Corrugated strawboard boxes and containers.

Australian, Consolidated Industries Investments Proprietary Limited: Managing the investments of the group.

Australian Consolidated Industries Metal Stamping and Spinning Proprietary Limited: Makers of steel furniture, metal taps, lighting ware, stamped and spun metals.

Australian Consolidated Investments Plastics Proprietary Limited: Manufacturing u comprehensive line of plastic articles.

Bernard-Smith (Proprietary) Limited: Fabricated steels.

Brunton’s Bright Steel Proprietary Limited: Free cutting bright steels.

Crown Crystal Glass Proprietary Limited (Sydney) : Flint, blown, pressed, hand-cut crystal’ glassware- and lighting ware.

Dott and Company Proprietary Limited (Melbourne) : Flint and blown glassware ami lighting ware.

New Zealand Glass Manufacturers Company Proprietary Limited: Glass containers of all descriptions and corrugated strawboard boxes.

Queensland Glass Manufacturers Company Proprietary Limited: Glass containers of all kinds.

South Australian Silicates Company Proprietary Limited: Silica, flint, kaolin.

The other directors of Australian Consolidated Industries are E. Norton Grimwade, Wm. J. Smith, Major-General H. W. Grimwade, F. J. Smith, T. C. Alston, A. R Smith. Their other directorates (F. J. Smith we have already considered) are as follows: - E. N. Grimwade: Felton, Grimwade and Duerdins Limited, (wholesale chemists); H. W. Grimwade; F., G. and D., and Drug Houses of Australia Limited; Alston: Australian Mutual Provident, Kauri Timber Company, Melbourne Steamship, National Bank, Paterson Laing and Bruce. Australian Consolidated Industrie? holds 56,160 in Incorporated Consolidated Industries of Australia and New Zealand.

The principal shareholders of Australian Consolidated Industries Limited at the 21st March, 1939, were -

  1. A. Anderson and B. S’. Norris, 16,207 and 1,629; A.P.A., 10.000 and 1,000; Bankers and Traders Insurance, 250 and 25; Bugilbone Pastoral Cc, Pty. (Sydney), 950 and 95: Dixson Trust. 12.000 and 1,200; R. C. Dixson, 3,750 and 375; W. Dixson, 3.750 and 375; Douglas Investments Pty., 8,750 and 875: Elliott Bros. Ltd., 6,000 and 600; F. Fielding and Co., 1,250 and 125; Forestwood Pty. 36,492 and 3,649; Great Eastern Life Assurance Co..
  2. 500 and 150: Investire Ltd., 1,225 and 122: Perpetual Trustee, 1,875 and 187; O. ,M. McCormick, 12,500 and 1,250; Manufacturers’ Mutual Insurance,. 2.500 and 250; Mulgrave Pty., 3,487 and 348 ; Pacific Coal Co., 1,250 and 125; Perpetual Trustee Co., 16,772 and 1,677: Pilkington Bros., 25,000 and 2,500 ; Queensland Insurance Co., 2,500 and 250;. Schweppes Ltd., 13,997 and 1,399; Union Insurance Society of Canton, 3.000 and 300; Estate of late David Vance, 12,375 and 1,237; Washington H. Soul. Pattinson and Co., 17.250 and 1,725; Carleton Ward, 12,187 and 1,218; Assets Pty. [i.e. the Baillieus], 4,250 and 425; J. M. Baillieu, 312 and 31; Cronulla Pty., 2,000 and 200; A. S. Grimwade, 02.957 and 6,295;. P. M. Grimwade,

II, 125 and 1,112; W. R. Grimwade, 37,287 and 3,728; F. W. Kitchen, 9,700* and 970; Sir Alex. Stewart, 11,252 and 1,125; Batman Exploration Co. 12.500 and 1,250; ¥.. N. Grimwade, 14,085 and 1,408; H. W. Grimwade, 23,000 and 2,300; Merrylands Pty. [again the Baillieus], 6,375 and 037 : Trustees Executors and Agency, 96,517 and 9,651; Lyon Investments Ltd. (Channel Islands), 2,775 and 277; Rationalist Press Association (London), 1,000 and 100; A. T. Palfreyman, 15.050 and 1,505; N.Z. Insurance Co.,. 12,750 and 1,275; A. S. Paterson and Co. (N.Z.), 7,250 and 725.

That is the constitution of the company to which we are asked to give the right to manufacture motor cars in Australia.

Senator Dein:

– Does the honorable senator intend to support the bill?

Senator ARTHUR:

– I shall support it for the reasons given by my Leader. As no other company appears to be coming forward to undertake the manufacture of motor-car engines and chassis in Australia, the establishment of the industry by this company may be the means of providing post-war employment for many men who, during the war, will be engaged in trades allied to the motor trade.

That is my reason for supporting the bill. Paragraph 14 of the schedule provides that the Commonwealth will -

  1. take up with His Majesty’s Government in the United Kingdom the question of waiving its rights under the Ottawa Agreement for assured margins of preference in respect of such machinery.

I hope that the waiving of that agreement will not be taken as a precedent when a proposal comes before us to establish in this country another industry which I understand is about to be started. Honorable senators will recollect that under the Ottawa. Agreement no industry may be commenced in this country without the permission of the manufacturers in Great Britain.

Senator McBride:

– That is not correct.

Senator ARTHUR:

– The Assistant Minister for Commerce is endeavouring to mislead the Senate. It is clear from articles 9, 12 and 15 of the Ottawa Agreement that before an industry can be established in this country it must have the approval of the manufacturers in Great Britain.

Senator McBride:

– That is not so.

Senator ARTHUR:

– That is the reason why Sir Geoffrey Whiskard is now in Australia. Had it not been for the Ottawa Agreement, this industry would have been established in Australia before this. When the establishment of the tinned-plate industry in Australia was contemplated the president of a certain organization in Great Britain said that it was against the spirit of Ottawa, Under the terms of the Ottawa Agreement, any company which proposes to establish an industry in Australia must say to manufacturers in the United Kingdom, “ Please, may we start an industry “. Moreover, the industry, when established, must show that it can compete on an economic basis with British manufacturers. It may be difficult to establish in Australia an industry which can compete on an economic basis with a similar industry in Great Britain, because in that country there is a greater population and more opportunity for mass production than in Australia. The Ottawa Agreement may at any time be invoked to do injury to the Commonwealth. The Government which entered into the Ottawa Agreement did something which was inimical to the Commonwealth. No benefits have come to Australia from it. When the bill gets into committee, I hope that Senator A. J. McLachlan will keep in mind the list of 97 wealthy people who own this country.

Question put -

That the word proposed to be left out (Senator James Mclachlan’s amendment) he left out.

The Senate divided. (The President - Senator the Hon. J. B. Hayes.)

AYES: 5

NOES: 23

Majority . …. 18

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Bill read a second time.

In committee:

Clauses 1 and 2 agreed to.

Clause 3 -

The execution, by or on behalf of the Commonwealth, of an agreement to give effect to the matters specified in the schedule to this act, between the Commonwealth and Australian Consolidated Industries Limited (hereinafter referred to as “the company”), is hereby authorized.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I move -

That at the end of the clause the following words be added: “and such agreement shall lie subject to ratification bv Parliament”. 1 indicated in my brief second-reading speech on this bill that I intended to move this amendment. I am not, at the moment, proposing that the provisions of the bill shall be altered in any way. I arn merely asking that after the agreement has been signed it shall be subject to ratification by Parliament. I appeal to honorable senators, in the interests of democracy, to support the amendment. In view of the uncertainty that attends this whole project we should give ourselves a chance to understand what we are doing. We should not place upon the Government the heavy responsibility that must rest, upon it if my amendment be defeated. This is not a government measure; it is a non-party bill. Unless we take steps to protect ourselves against the extreme vagueness of the language of I he schedule, we shall lay ourselves open to the charge that we have failed in our duty. We do not know what embarrassments may overtake us if this clause bc agreed to in its present form. As this whole proposal is the creation of Parliament, it is the duty of Parliament to ensure the execution of a wise agreement that will not be injurious to the nation at, large. As Parliament is expected to re-assemble in a reasonably short time no hardship would be done to any of the interests concerned if ratification of the agreement were delayed until we had been given an opportunity to review it. Notwithstanding the amendments made to this schedule in another place, all the clements of exclusive rights remain in the language that has been used. This company will actually be given a. monopoly, whatever has been said to the contrary. The whole of the circumstances surrounding the proposal are such as to make it. entirely proper that Parliament shall protect itself by reserving an oppor tunity to examine the completed agreement before it is ratified.-

Senator COLLINGS:
QueenslandLeader of the Opposition

– The Opposition to a man will oppose this amendment. Senator A. J. McLachlan may regard this measure as non-party, but. whatever the Prime Minister (Mr. Menzies) may have said to the conflicting parties which support his Government, the Labour party will, as a party, support the bill as it is. In the early hours of this morning the Leader of the Opposition in the House of Representatives, after considerable difficulty, secured certain amendments to the proposed agreement which make it acceptable to us. Sufficient time has already been occupied in the consideration of the measure. We know exactly where we stand. We stand by the bill as it is. As a matter of fact all honorable senators know where they stand. They have known for some time how they would vote on the proposal. We are not prepared to delay the bill any further, lt is not a non-party measure with us, because on every occasion when this Government can be persuaded or forced to introduce a measure to develop an important secondary industry in this country we are determined to throw our whole weight in with it. Senator A. J. McLachlan said that the language in the schedule of the bill is vague. In hh second-reading speech, he directed attention to paragraph 12 of the schedule from which he read the words “ That the Commonwealth will, for a period of five years, use its best endeavours “. He stopped at that point and asked what was meant by “ best endeavours “. Had he read the remainder of the paragraph, and also the remainder of the schedule, he would have known exactly what was meant. In my opinion, there is no loophole in the schedule which will permit the exploitation of the Australians who desire to purchase these new Australian motor cars when they are marketed. Moreover the arbitrary provisions of these paragraphs, particularly in relation to the use of foreign capital are, in my opinion, very wise. We can easily foresee what would happen unless some such provisions were made, lt is more than probable that cerium organizations supported by foreign capital might use their resources, even to the point of building complete motor vehicles in Australia, under conditions which would enable them to throttle the new industry, which might, in fact, be slaughtered before it was able to get on its feet if the provisions relating to foreign capital were omitted. We all know what can be done in the way of dumping. Not unlikely some of the interests opposed to this new company would be prepared to sell motor vehicles of certain makes for one-third of the price they are now asking for them, simply to defeat, this project. The Labour party is wholeheartedly supporting the lull. We shall not support any amendment. We have one objective and one only, and that is to sec the measure passed without delay.

Senator McLEAY:
South AustraliaMinister for Trade and Customs · UAP

– The Government cannot accept the mi noi id ment. As the Senate has twelve other bills to pass before this sitting concludes, I respectfully suggest to honorable senators that they should not occupy too much time in considering this proposal.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I do not know whether the Minister’s concluding remark was intended to be a rebuke to me. If so, I resent it. Having regard to the vehemence displayed by the Leader of the Opposition (Senator Collings) in declaring that the Labour party was speaking with one voice on this subject, I ask: What is that voice saying? lt is saying that an exclusive right shall bc given to one company to proceed with tho manufacture of motor vehicle engines in this country and that Parliament shall have no further voice on the subject. I must confess that I am astounded, but as the Leader of the Opposition has chosen to adopt this attitude on behalf of his party, I leave it to the country to pass judgment upon it. The words that have fallen from the honorable gentleman’s lips will probably have quite unexpected results.

Senator ABBOTT:
New South Wales

– I also must direct attention to the amazing attitude of tho Leader of the Opposition (Senator Collings). Ho has said in effect that the Opposition is prepared to rob Parliament of the opportunity to safeguard the interests of the nation in relation to a most, important proposed agreement. The honorable gentleman is, in fact, denying to our democracy a right which it is entitled to exercise. The pronouncement of the honorable gentleman that, so far as his party is concerned, Parliament will bo deprived of its right to make judgment on this agreement, is most amazing.

Senator Lamp:

– I rise to order. I asls what right Senator Abbott has to attack the Opposition as he is doing, under the pretence that he is discussing the clause before the Chair?

Senator ABBOTT:

– I am saying that the official pronouncement of the Leader of the Opposition amounts to a denial of the rights of Parliament.

Senator Lamp:

– ‘Give us a fair go !

Senator ABBOTT:

– What I want is a fair go. I do not want noise. I protest against the declaration of the Leader of the Opposition that as far as his party is concerned, Parliament will not be permitted the opportunity to revise the proposed agreement. When Senator Ashley was making his secondreading speech, he said that some amendment to this schedule was necessary; but apparently the honorable senator’s leader does not intend to permit him to move mi amendment. I do not wish to cause any bad feeling among the parties in this chamber-

Senator Lamp:

– I again rise to order. [ ask, once more, what right Senator Abbott has to criticize the Labour party in this way when he is supposed to bc dealing with the provisions of a particular clause? I suggest that the President of the Senate be invited to give a ruling on the point.

The CHAIRMAN:

- (Senator James McLachlan). - There is no point of order.

Senator ABBOTT:

– When an honorable senator rises to take a point of order, he should make a clear statement of his case and indicate the standing order on which he relies. It is not sufficient merely to rise and roar like a bull.

Senator Lamp:

– I object to that statement of Senator Abbott.

Senator ABBOTT:

– During this lull in the thunderstorm that has been raging, I again strongly protest against the declaration made on behalf of the Opposition that Parliament will not, with the help of the Labour party, be given an adequate opportunity to revise the agreement before it is completed.

Sitting suspended from 6.13 to 7.30 p.m.

Senator CAMERON:
Victoria · CP

– The objections to clause 3 have come from honorable senators who have already agreed to the granting of comprehensive powers to the Government under the National Security Act. When they accuse members of the Opposition of being inconsistent, the fact should be remembered that they have consented to the Government having power to enter into agreements of the kind contemplated under this measure, without consulting Parliament at all. I am well aware of the dangers inherent in this bill, but I am prepared to accept them as the lesser of two evils.

Question put -

That the words proposed to he added (Senator A. j. McLachlan’s amendment)be added.

The committee divided. (The Chairman - Senator James McLachlan.)

AYES: 6

NOES: 18

Majority . . . . 12

Clause agreed to.

Clause 4 (Machinery to be imported free of customs duty).

AYES

NOES

Senator AYLETT:
Tasmania

– Does this clause refer to the machinery required for the manufacture of motor vehicles, or does it include electrical equipment, crankshafts, and minor items extending over a very wide range, in respect of which Australian Consolidated Industries Limited will be entitled to duty free admission?

Senator McLeay:

– Consideration will be given to the claims of other companies which come under the scheme.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

.- The words of the clause indicate that the concession is confined to Australian Consolidated Industries Limited. The clause states that no duties shall be imposed and collected in respect of machinery required to be used in the production of engines and chassis for motor vehicles by the company formed in pursuance of an agreement executed by the authority of the act.

Senator McLEAY:
Minister for Trade and Customs · South Australia · UAP

– The clause certainly applies to the company specifically mentioned in clause 3, but the bill provides opportunity for other companies to manufacture motor vehicles, and consideration would be given to their claims in respect of imported machinery.

Clause agreed to.

Schedule and title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 1780

FRIDAY ADJOURNMENT AT 4 P.M

The PRESIDENT (Senator the Hon. J. B. Hayes). - In conformity with the sessionalorder, I formally put the question -

That the Senate do now adjourn.

Question resolved in the negative.

page 1780

NEW BUSINESS AFTER 10.30 P.M

Motion (by Senator McLeay) agreed to-

That Standing Order No.68 be suspended for the remainder of the present sitting to enable new business to be commenced after 10.30 p.m.

page 1781

ASSENT TO BILLS

Assent to the following bills was reported : -

Petroleum Oil Search Bill 1040. Post ami Telegraph Kates Bill 19-10. Post and Telegraph Rates (Defence Forces) Bill 1940.

page 1781

PATENTS, TRADE MARKS, DESIGNS, AND COPYRIGHT (WAR POWERS) BILL 1940

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator McLeay) rend a first time.

Second Reading

Senator McLEAY (South AustraliaMinister for Trade and Customs) [7.43”J. - I move -

That the bill he now read a second time.

This short measure is of a formal nature, and is necessitated by the proposed amendment of the definition of “ enemy subject “ in, and the proposed omission of the definition “enemy country” from, the Trading with the Enemy Act, under the Trading with the Enemy Bill at present before the Senate.

Section 3 of the Patents, Trade Marks, Designs and Copyright (War Powers) Act 1939 defines certain expressions by reference to the Trading with the Enemy Act 1939, and it is desirable that, if the bill to amend that act be passed, the reference should bc to the act as amended. Clause 3 of this bill contains the necessary provision for this purpose-

Section 1.1 of the Patents, Trade Marks, Designs and Copyright (War Powers) Act 1939 contains the expression “enemy country within the meaning of the Trading with the Enemy Act 1939 “. If the definition of “ enemy country “ is omitted from the latter act, the cross reference thereto in the former act will be ineffective. As it happens, a definition of “enemy country” is given in the former act, so that the position will be met by omitting the cross reference to the Trading with the Enemy Act and by relying on the definition of “ enemy country “ in the former act.

Question resolved in the affirmative.

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

page 1781

TRADING WITH THE ENEMY BILL 1940

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator McLeay) read a first time.

Second Reading

Senator McLEAY (.South Australia -

Minister for ‘Trade and Customs) [7.48].- I move-

That the bill be now read a second time.

This is a measure to amend the Trading with the Enemy Act 1939. In the present act the words “ enemy country “ appear only in the definition of “enemy subject “. As it is proposed to repeal and re-enact the definition of “ enemy subject “ in a form which does not include the words “ enemy country “, the words “ enemy country “ will become unnecessary and should, therefore, bo repealed. The result of the insertion of the new definition of “enemy subject” will be (hat, if it is desired to declare particular persons, firms or companies to be enemy subjects, it will be necessary to rely on the. powers given by sub-section 2 of section 3 of the act. This sub-section prescribes the acts or -transactions which constitute, for the purposes of the act, trading with the enemy. Among the powers given by that sub-section is the power to make a proclamation declaring any act or transaction to be a prohibited act or transaction, the doing of or engaging in which would constitute .trading with the enemy. A proclamation has already been made under this power, authorizing the Attorney-General to declare certain persons, firms or corporations. This authority has been exercise.) on several occasions and is sufficiently wide to cover all anticipated requirements. I commend the bill to honorable senators.

Question . resolved in the affirmative.

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

page 1782

IMMIGRATION BILL 1940

Bill returned from the House of Representatives without amendment.

page 1782

AUSTRALIAN SOLDIERS’ REPATRIATION BILL 1940

Bill received from tho House of Representatives.

Standing and Sessional Orders suspended. ‘

Bill (on motion by Senator Collett) read a first time.

Second Reading

Senator COLLETT:
Minister in Charge of War Service Homes · Western Australia · UAP

– I move -

That the bill be now read a second time.

In presenting this measure I desire to give honorable senators as much information as possible, not only as to its contents, but also about what may be termed its background. The first bill to provide for payment of war pensions was introduced into the Commonwealth Parliament in 1914, and a few words in historical retrospect may be of interest to honorable senators. At that time, of course, no one quite realized the extent to which it would become necessary for Australia to participate in that war, and it was then estimated that the financial provision necessary to cover the cost of pensions would bc £350,000 for that year.

In 1920 the first Australian Soldiers’ Repatriation Act was introduced. Amongst other things, it had for its object the fusion of the administration of war pensions, then done by the Department of the Treasury, with the business of general repatriation of soldiers. For this purpose the bill of 1920 established a Repatriation Commission of three members, ft is of interest here, however, to say that (lie Government proposed to appoint the commission for five years, but a majority of the House of Representatives considered that term too lengthy, so the Government was compelled to accept an amendment limiting the term of the first commission to three years. The argument which apparently impressed a majority of the members was that 80 per cent, of the soldiers eligible for pensions were then receiving them, and that, as only a small number of men had still to return to Australia, three years was ample time in which to deal with and settle any claims they might have. It was suggested that once those cases had been completed, the commission’s activities would cease, and all that would bc necessary would be to arrange for the Invalid and Old-age Pensions Department to continue payment of the pensions. I mention these matters simply to illustrate how little the Parliament of that day imagined that some 25 years after the termination of the war the Repatriation Commission would still be dealing with completely new schemes for pension by men who had never claimed before. The anticipated expenditure has, of course, been considerably increased. For the year ended the 30th J une, 1939, nearly £8,000,000 was spent in payment of war pensions to 249,293 pensioners. Of this number about 77,000 were incapacitated members of the forces, 144,000 were dependants of incapacitated members, and 27,571 were dependants of deceased members.

Since the introduction of the original act. and up to the 31st December, 1939, the Repatriation Commission has expended on pensions, medical treatment, vocational training, employment, education and general repatriation benefits the

Mim of £186,352,922, whilst in addition, war gratuity payments involved £27,524,82S and . war service homes £29,755,314. Australia’s total repatriation expenditure was thus £243,633,064 over a period of 25 years.

It may also be of interest to honorable senators to have some comparison with figures available from our sister dominions as to the total enlistments, the number now receiving pensions, and the percentage of pensioners to enlistments in those dominions. Canada enlisted (528,964 men and at present 88,104 are receiving pensions, i.e. 12.77 per cent, of enlistments. New Zealand enlisted 105,629 men. Of that number, 15,793 are receiving pensions, or a percentage to enlistments of 14.9 per cent. In Australia 416,809 soldiers enlisted and the present number of soldier pensioners ii 77,315 >or a percentage to enlistments of 18.5 per cent. These figures show that the Australian proportion of pensioners is 50 per cent, higher than that of Canada, and about 25 per cent, higher than that of New Zealand. Australia compares much more favorably when the number of pensions to dependants is considered, for neither Canada norNew Zealand pays pensions to dependants after the death of the soldier, unless death was directly due to war service.

The present legislation providing for war pensions and repatriation benefits does credit indeed to those responsible for its introduction, for they evolved a scheme more liberal in its provisions and more widespread in its benefits than the proposals contained in the legislation of any other country. This fact has been acknowledged by returned soldier organisations themselves on many occasions. Such credit may well be shared by all parties in this Parliament, for the provision of reasonable compensation by way of pension and oilier benefits to disabled members of our forces has always been thewish of the people of Australia and its elected representatives of different political creeds.

It is gratifying to know that Commonwealth repatriation legislation is more liberal than that of other countries. In addition to the percentage figures which I have already read, I would like to bring to the notice of honorable senators the following facts as conclusive evidence of the generosity of the Australian scheme : -

  1. Australia is the only country that has adopted the scheme of education for soldiers’ children. Up to the 30th June, 1939, about £2,040,000 has been expended in this direction.
  2. Australia is the only country which continues the payment of pensions to wives and children of soldier pensioners after the death of the soldier from causes other than war disabilities.
  3. Australia is the only country which pays a special rate of pension to men who are totally and permanently incapacitated, blind, or suffering from pulmonary tuberculosis. There are 3,692 such pensions now being paid.
  4. Australia is the only country which pays a 100 per cent. pension to all persons diagnosed as suffering from pulmonary tuberculosis due to war service.
  5. Australia is the only country which provides for free medical treatment of all soldiers suffering from pulmonary tuberculosis.

The act is administered by a Repatriation Commission consisting of a chairman and two members. All of the members of the commission are themselves returned soldiers, and one of them is selected for appointment from a list of names submitted by organizations of returned soldiers.

In each State a Deputy Commissioner for Repatriation is responsible to the commission for all administration within his State, and each Deputy Commissioner is, of course, a returned soldier, whilst the male staff of the commission throughout Australia is composed almost entirely of men who saw service in the last war.

I have no desire to deal at length in this speech with the various activities of the commission, but it is proper to say that it has varied responsible and exacting duties to perforin. Apart altogether from the matter of determining claims for pension, the commission controls and administers throughout Australia numerous general hospitals, tubercular sanatoria, hostels, and artificial limb factories. Those institutions are conducted with a degree of efficiency which is most creditable to the commission, and particularly to those of its medical, nursing, artisan, orderly and domestic staff whose special care it is to administer and service such institutions.

A little-known, but highly important phase of the work of the commission, and one which is of inestimable value to the individual and to the community is that known as the Soldiers’ Children Education scheme. It applies to children of men who die, are blinded, or are totally and permanently incapacitated as the result of service. The child is assisted in the selection of a suitable vocation, and its education is continued through primary, secondary, technical or university stages, and monetary assistance is made available according to the circumstances of the case and the character of the training. Many thousands of children have been thus assisted, and in all the professions and trades are to be found men and women who owe their advancement to the opportunities afforded to them under this scheme.It is a phase of repatriation work which has been followed in Australia alone, but many other countries are showing evidence of a lively interest in the work. The commission readily admits that the success of this branch of its administration is almost wholly due to the splendid service given in an honorary capacity by the members of the education boards in each State. These members are experts in every phase of educational work and their knowledge and experience enable them skilfully and scientifically to guide the children to ultimate success. The Government is indeed grateful to these men and women Tor their splendid service, and feels that they may be relied upon to extend their activities to embrace eligible children of members of the forces of the present war.

The sole purpose of this bill is to extend the principles of the present act to members of the forces serving in this war, except those provisions which relate to the payment of service pensions. The opportunity has also been taken to make some minor amendments to certain machinery sections of the act, and for the purpose of the present war a new definition of member of the forces, and a granting section having reference to that definition arc inserted. Shortly put, it; is proposed to pension all troops who embark for service overseas on one basis, and all those who serve entirely in Australia on another basis, but as most of the amendments are technical, they can be most suitably explained in committee.

I should, however, explain that clause 10 is an amendment of section 45 w inserted by the House of Representatives. It recasts the first proviso to sub-section 2 of that section, referring to the onus of proof in cases where an appellant to an Entitlement Appeal Tribunal has made out a prima facie case in support of his claim. This clause has, however, been recast, and in committee I will move for its deletion and the insertion of one having a somewhat similar intent.

A further proposed amendment to the bill should also be explained here. In the case of an unsuccessful appellant to an Entitlement Appeal Tribunal, who later submits further evidence, his claim is reconsidered by the commission under section 45 k7 in the light of the further evidence. If in the opinion of the commission the further evidence is not materia] to, and has not a substantial bearing on the appellant’s claim, the appellant may submit the further evidence to the tribunal for consideration of the question of whether it is material to the claim. The act does not specifically provide that the appellant may attend the sitting of the tribunal at which the further evidence ‘ is considered, and the amendment is designed to provide, that his representative may attend at this stage of the proceedings.

This bill is introduced at a time when the Empire is engaged in a war against the same aggressor as we were resisting when the 1914 act was introduced, and although the position of the Allied armies is grave, this Senate knows full well that victory must finally rest with Great Britain and its Allies, and I have no hesitation in declaring that the forces from this Commonwealth of Australia will play as great and important a part in the securing of that victory as they did in 1914-18. This bill is intended to provide for the care of our soldiers in the event of incapacity arising in the service of the country, and they may rely on Australia to see to it that they are protected by an act which will be as broad in principle and as generous in purpose as that which applied to their fathers of almost a quarter of a century ago.

Senator COLLINGS:
QueenslandLeader of the Opposition

– We all profoundly regret the need for this bill. The sad and tragic circumstances in which the world finds itself to-day make a bill of this kind necessary. The Opposition will support the bill very gladly. We recognize that not only have we the duty to repeat in a measure of this kind the same policy as we initiated by legislation a quarter of a century ago, but also that it is right and creditable to liberalize the measure in certain directions in the light of the experience which has been gained over the last 25 years. I am very glad indeed that one important amendment was made in the bill in the House of Representatives early to-day. The effect of clause 11 is that whereas previously an appellant himself had to make out his case and take the responsibility of establishing that he was entitled to relief under the act, the amendment inserted in this bill to-day throws the onus of proof upon the Repatriation Commission. Although it is now proposed to amend that improved clause, the alteration is merely of phraseology, and does not alter the character of the original amendment. It is not necessary to say anything further. We regret the need for the bill, but believe that it is the right thing and we shall support it fully.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to8 agreed to.

Clause 9 -

Section forty-five k of the principal act is amended by inserting in paragraph (a) of subsection 1, after the word “operations”, the words “ , or is not directly attributable to his employment as a member “.

Section proposed to be amended - 45 k. - (1.) A personwho has claimed as a member of the forces, oras a dependant of a member of the forces, a pension under section 23 of this act, and whose claimhas been refused by thecommission on the ground -

that the incapacity or death of the memberhas not resulted from any occurence happening during the period duringwhich he was a member of the forces, or from his employmentin connexion with naval or millitary preparations or operations . . .

Amendment (by Senator Collett) agreed to -

That all the words after “ amended “ he left out with a view to insert in lieu thereof the following -

by inserting in paragraph (a) of sub section 1, after the word “ operations,”, the words “ or is not directly attributable to his employment as a member,”; and

by inserting after sub-section (7.) the following sub-section : - “(7a.) On any submission to an Appeal Tribunal under the proviso to the last preceding sub-section, an appellant may be represented at his own expense in support of his submission by any person other than a legal practitioner.”.

Clause, as amended, agreed to.

Clause 10 agreed to.

Clause 11 -

Section forty-five w of the principal act is amended by omitting the first proviso to subsection (2.) and inserting in its stead the following proviso: - “ Provided that if the appellant or a representative of the appellant makes out a prima facie case that the incapacity from which a member of the forces is suffering or from which that member has died was caused or aggravated by some occurrence which happened to him after the commencement of his war service, the onus of proof that such incapacity was not in fact caused or aggravated by war service shall lie upon the commission.”.

Section proposed to be amended - 45 w. . . .

. . .

Provided that ….

Provided that if the appellant or a representative of the appellant shall make out a prima facie case in support of his claim that the incapacity from,which he is suffering or from which he has died was caused or aggravated bywar service the onus of proof that such incapacity was notin fact so caused or aggravatedshallliewith the commission.

Senator COLLETT:
Minister in charge of War Service Homes · Western Australia · UAP

– I move -

That all the words after “ amended “ be left out with a view to insert in lieu thereof the words, “ by adding at the end thereof the following sub-section : - (4.) For the purposes of sub-section (2.) of this section an appellant shall be deemed to have made out a prima facie case when he avers that the incapacity or death of the member of the forces resulted from an occurrence happening during the period he was a member of the forces or from his employment in connexion with naval or military preparations or operations or is directly attributable to his employment as a member of the forces.”

As I mentioned in my second-reading speech, this clause contains an amendment which was agreed to in the House of Representatives; but after consultation with the mover, and in order to secure the benefits contained, not only in the amendment but also in the original provision, the proposed new sub-section has been drafted in the form in which it has been moved.

Senator COLLINGS:
QueenslandLeader of the Opposition

– The proposed amendment is preferable to the one originally inserted in the bill. The principal difference between the two is that the original amendment read “ provided that if the appellant, or representative of the appellant, makes out a prima facie case that the incapacity . . . “ whereas the proposed amendment reads “ For the purposes of sub-section 2 of this section an appellant shall be deemed to have made out a prima facie case when he answers that the incapacity . . . “ Under the first amendment the appellant would have to make out a prima facie case, but under the proposed amendment a prima facie case will be deemed to have been made out when an averment has been made.

Senator LECKIE:
Victoria

.- I have read the proposed amendment only hurriedly, and at the moment I am somewhat doubtful as to the difference between the two. The first amendment was somewhat dangerous, but I feel somewhat embarrassed in voting for or against an amendment, the effect of which I do not understand. If the Minister assures me that the position is fully safeguarded, I shall be satisfied ; but I do not think that the committee should be asked to pass important amendments hurriedly.

Senator AMOUR:
New South Wales

– I trust that the amendment moved by the Minister (Senator Collett) will be adopted, because I know of many men who have rendered service overseas, and, after returning to Australia, apparently were not suffering any disability as the result of active service; but later found that their military work had been detrimental to their health. After bringing their claims before the Repatriation Commission, they were informed that they must prove to the satisfaction of the commission that they were returned soldiers and that their disabilities were due to war service. Many of these men went to the limit in an endeavour to substantiate their claims, and sometimes death intervened before justice was done. I know of a case in which the Minister said that nothing could be done; the claimant died, and three days later an intimation was received that consideration could be given to his claim. Some of the men who are now serving abroad would have been placed in a similar position if this amendment had not been adopted.

Senator Collett:

– The amendment has been examined by the officers who have to administer the act and they are satisfied that it meets the need.

Amendment agreed to.

Clause, as amended, agreed to.

Clauses 12 to 16 agreed to.

Title agreed to.

Bill reported with amendments; report adopted.

Bill read a third time.

page 1786

GOLD MINING ENCOURAGEMENT BILL 1940

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator McBride) read a first time.

Second Reading

Senator McBRIDE (South Australia-

Assistant Minister forCommerce) [S.28]. - I move-

That the billbe now read a second time.

This is a bill to provide -

  1. for financial assistance to the States for the development of the gold-mining industry; and

In September last, a tax bill which was introduced to impose a tax on gold equal to 75 per cent. of the excess price over £A.9 a fine oz. was held up in the Senate. To avoid loss of revenue, an excise duty of 50 per cent. of the excess over £A.9 as from the 15th September, 1939, was imposed at the close of the session. The reduction from 75 per cent. to 50 per cent. was influenced by representations for concessions to prospectors and low-grade propositions. In December, legislation was passed to give effect to the tax previously collected as an excise duty, and it was decided at that time to afford relief to the bona fide prospectors by exempting them from the tax in respect of the first 25 oz. of gold delivered in each year. That relief commenced on the 15th December last. The Government has had under consideration the question of further relief and a bill is now submitted to give effect to its proposals. Its main features are -

  1. it provides for refunds to persons other than bona fide prospectors; and
  2. it provides for grants to the States for the assistance and development of the goldmining industry.

Representations have been made from time to time by persons in the goldmining industry for rebates or exemptions from payment of the gold tax in respect of low-grade mines and marginal producers. After full consideration, the Government proposes to provide relief in these cases. Provision is accordingly contained in the bill to grant a refund of the tax, or a part of the tax, in those cases in which producers are working at a loss, or at a profit not exceeding £1 10s. an oz. of fine gold. The refund in no ease will exceed the amount of the tax and, with the assistance of the refund, profits will not in any case exceed £1 10s. an oz. of fine gold. It is proposed that the refunds shall be made by the Commonwealth, after report and certification by the Mines Department of the State concerned, or such competent officials of the States as may be agreed upon.

In considering the matter of costs as a basis for the refund, allowance will be made for the cost of -

  1. mining or obtaining ore or other material actually treated for the purpose of producing gold;

The details in connexion with the fix ing of these costs will be prescribed by regulation, except that it is proposed to fix the cost of development on the actual cost for the period under review, provided it does not exceed the average cost over the preceding two years, or the average of £2 an oz. of gold, whichever be the lower. Depreciation of plant and machinery will he allowed at the rate of 12½ per cent. on the reducing value.

The effect of the provision for refunds will be to guarantee to marginal producers, on the present price of gold, namely £10 13s. 3d., a profit of £1 10s. a fine oz. if their costs exceed £8 6s. 7d. an oz. but do not exceed £9 3s. 2d. an oz., and to producers whose costs exceed £9 3s. 2d. but do not exceed £10 13s. 3d., a profit from £1 10s., decreasing to nothing, according to the excess of costs over £9 3s. 2d. To the degree to. which their costs exceed the full price of gold, namely, £10 13s. 3d. an oz. they will, of course, make a loss. It is anticipated that this refund to marginal producers will cost about £100,000.

In addition to the marginal producers for whom provision has been made by way of a refund of tax, there is a number of companies to whom some assistance by way of loan would be advantageous with a view to increasing the production of gold and thus benefiting Australia’s dollar exchange at the present time.

As a step towards practical assistance to these producers, it has been decided to make to the various States a grant of £150,000 to be distributed among them on the basis of the 1939 production of gold. It was felt that this was the only reasonable basis to adopt. As 75 per cent. of the gold produced in Australia is won inWestern Australia, that State will receive about 75 per cent. of the grant. Other States will receive assistance in the proportion that their production bears to the total Australian production. The allocation of the grant to States on this basis is -

It is realized that the amounts provided for South Australia and Tasmania are very low, but as these States are small producers of gold this is unavoidable. The amount made available to each State will be paid out by it to the mining industry at its own discretion, for the development of the industry. Any amounts repaid to the State by the producers, to whom advances are made, will be used by the State for further similar advances, and will not be repayable to the Commonwealth. No variation is proposed in connexion with these refunds, which still remain at 25 oz. a prospector for each year, commencing on the 15th December next. It is estimated that this refund may cost about £90,000 per annum. In order that the whole of the provision for assistance to the industry may be contained in the one act, the provision relating to refunds to prospectors is embodied in this bill. If this measure be passed, I shall bring forward another short measure to amend the Gold Tax Collections Act by deleting the section relating to refunds to prospectors.

The total assistance is estimated to be -

I should add that the tax on gold produced in Australia is estimated- to produce, at the present price of gold, about £1,400,000 per annum.

Senator CUNNINGHAM:
Western Australia

– I had hoped that the Government would bring down a measure to repeal the Gold Tax Act passed last year. However, I am very glad indeed that my colleagues and I have been able to demonstrate to the Government the necessity to grant substantial relief to the gold-mining industry of Australia. The bill provides for the granting of assistance to a total amount of £340,000, including refunds to prospectors estimated to aggregate £90,000. Nevertheless, the bill does not go so far as I should like it to go in the provision of the relief which, in my opinion, is essential for the welfare of the industry. In Western Australia within the last two years, no fewer than 43 mines have been closed down. In addition, certain mines are to-day operating on a very low margin of profit and, as a matter of fact, some that are operated by companies as well as others that are privately controlled and owned, are showing a loss. There is every indication that, within the next year, other mines will be forced to close down as the result of being forced to mine unprofitable ore. It may be argued that these mines would not have been worked at all but for the greatly increased price of gold during the last seven years. I realize that. We know that to-day mines are operating which could not have been when the price of gold was lower than it is at the present time. It is hardly necessary to remind members of the’ Senate that, during the regime of the last Labour Government, so serious was the position of the gold-mining industry that that Government introduced legislation to provide for the payment of a bounty on each ounce of gold won. Whilst the assistance proposed is not equal to what the industry deserves and demands, I recognize that at least some measure of relief is being given, and for that we are grateful to the Government. Quite a big concession is being given to my State. As the Assistant Minister for Commerce (Senator McBride) has pointed out, Western Australia is responsible for 75 per cent, of the total production of gold in Australia. It naturally follows that that State must receive quite a substantial proportion of the allocation made to the industry ; thus, out of the total of £150,000 it will receive £111,000. It, of course, is responsible for the production of 3 oz. out of every 4 oz. of gold won in Australia. In that fact lies the explanation of the larger grant to Western Australia.

I am pleased that, as the Minister has pointed out, the provision in the act of 1939 relating to refunds to prospectors, is embodied in this measure. I support the second reading of the bill.

Senator E B JOHNSTON:
Western Australia

– I support the bill, and assure the Government that I regard it as a. good one, even though it does not give all that we sought, and may not be the best that could have been introduced. It has been pointed out that the gold tax at present produces £1,400,000 a year, of which, under this measure, £340,000 a year is to be returned to the industry. That is a very good gesture by the Government.

The bill is divided into two parts, the first of which deals with the encouragement of gold mining. It is satisfactory to know that, of the £150,000 to be granted to the States for the encouragement of this great industry, Western Australia is to receive approximately 75 per cent., or £111,000. Of course that State contributes about three-quarters of the annual £1,400,000 derived from the gold tax. The Government has done the right tiring in the apportionment it has made, “and has acted on lines that I .suggest might be followed in connexion with other legislation that comes before us from time to time.

The object of the second part of the bill is to provide relief from the gold tax. I am glad that the Government proposes to give a measure of relief to those mines which produce low-grade ore, some of which, I am sorry to say, are tottering to their doom - a tottering that has been hastened _by the imposition of the tax on gold. Members of all parties from Western Australia have asked repeatedly for what a considerable section of the people of that State desire, namely, the repeal of the gold tax on production and, if the industry is to be taxed, the substitution of a tax at the ordinary income tax rates applied to all other Australian industries. I cannot help regretting that gold, which is so important, so vital to Australia and the Empire at the present time, is the only industry of all our great primary and other industries which is taxed solely on the basis of production. That is opposed to all ordinary principles of taxation.

Senator McBride:

– An excise is imposed on several commodities.

Senator E B JOHNSTON:

– The Minister would not compare luxuries, on which excise is generally imposed, with a commodity which may do more than any other commodity we can produce to help Australia and the Empire. I regret that gold is singled out for this unorthodox method of taxation. All of our other metals, the values of which have increased considerably owing to Avar conditions, are taxed on the basis of profit. It would have been very much better from the point of view of the industry and of tho Government if the production of gold had been encouraged by applying to the industry the ordinary income tax rates which apply to other industries. Two of the largest producers in Western Australia are in a perilous condition. I refer to the Wiluna mine, and the Hill 60 mine at Mount Magnet. The gravest anxiety is entertained regarding these mines. The town of Wiluna has a population of about 7,000 people, whilst 1,000 persons are directly dependent upon the mine, which experts estimate will completely peter out by March next. The company states that it can only regard its present operations as salvaging. Western Australian public opinion will not be satisfied until gold tax on production is entirely repealed.

When we complain of over production of wheat and other products, it is well to remember that we cannot produce too much gold. In addition, gold is essential to the prosecution of the war. With it we can build up credit overseas, particularly dollar exchange, which we need so urgently at the present time. I am grateful for the measure of relief which the Government is granting under this measure. The bill indicates that the Government appreciates some of the difficulties confronting this great industry.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 3 agreed to.

Clause 4 (Definitions).

Senator ARTHUR (New South Wales ; [8.49]. - Paragraph h defines a bona fide prospector as a person who satisfies a prescribed authority that “he is one of two or more persons who together have personally performed the whole or the major part of the work”. What is the position under this measure of a man who produces gold by himself?

Senator McBride:

– He is covered by paragraph a. Paragraph b ensures that each of a group of miners will be entitled to claim exemption from tax in respect of the first 25 oz. of gold he produces.

Clause agreed to.

Clauses 5 to 7 agreed to.

Clause 8 (Refunds of gold tax to producers other than bona fide prospectors).

Senator E B JOHNSTON:
Western Australia

– I ask the Assistant Minister for Commerce (Senator McBride) to explain why bona fide prospectors are excluded from the operations of this clause. It is true that each prospector is entitled to claim exemption from tax in respect of the first 25 oz. he produces, but he may produce 50 oz. in one year and still show a loss on his year’s work.

Senator McBride:

– He is definitely excluded if he gets the refund in respect of the first 25 oz. he produces.

Senator E B JOHNSTON:

– What is the meaning of “ basic amount “ as used in paragraph a of sub-clause 2? I also ask the Assistant Minister for Commerce to explain the meaning of paragraph b of the same sub-clause.

Senator McBRIDE:
Assistant Minister for Commerce · South Australia · UAP

– “Basic amount” in relation to any gold means the amount paid by the bank for that gold less - (a) the amount of gold tax paid upon that gold, and (6) £1 10s. for each ounce of fine gold contained in that gold. Paragraph b relates to mines where other metals besides gold are produced, and provides that 40 per cent, of the total metals produced must be gold.

Clause agreed to.

Clauses .9. and 10 agreed to.

Clause 11 -

A person shall not -

Penalty: One thousand pounds or imprisonment for two years.

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

– I move -

That thu words !! one thousand pounds or imprisonment for two years “ be left out with a view to insert in lieu thereof the following words: - “if the offence is prosecuted summarily. One hundred pounds or imprisonment for six months: if the offence is prosecuted upon indictment, One thousand pounds or imprisonment for two yeaTS.”.

Under the clause as it stands, it would not be possible to prosecute summarily. The amendment is designed to ‘ enable that to be done.

Amendment agreed to.

Clause, as amended, agreed to.

Clauses 12 and 13 agreed to.

Preamble and title agreed to.

Bill reported from committee with an amendment; report adopted.

Bill read a third time.

page 1790

GOLD TAX COLLECTION BILL 1940

Bill received from the House of Representatives.-

Standing and Sessional Orders suspended.

Bill (on motion by Senator McBride) read a first time.

Second Reading

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

– This is a short bill to amend the Gold Tax Collection Act 1939, by omitting the provisions relating to the refund of tax to bona fide prospectors, which have now been incorporated in the Gold Mining Encouragement Bill just passed by the Senate. This is purely a machinery measure.

Question resolved in the affirmative.

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

page 1790

INCOME TAX COLLECTION BILL 1940

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator McBride) read a first time.

Second Reading

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

– I move -

That the bill be now read a second time.

The .purpose of this bill is to widen the authority of the Commonwealth to enter into an agreement with any State for the deduction of State taxation from the salaries wages or allowances of Commonwealth officers. The present Income Tax Collection Act enables the Commonwealth to enter into an agreement to make such tax deductions where the amount of the tax deduction is measured by those emoluments. In the present agreements with four States, the deduction is confined to State taxation which is in the nature of unemployment relief or emergency taxation and can be definitely calculated on the rate of salary or wage being paid at the time of the deduction. In the State of Western Australia, the financial emergency tax will cease on the 30th June next. Thereafter it is to be incorporated in the income tax. In order to facilitate collection at the source by instalments from allemployees, Government or private, rates of deduction of 6d. in the £1 on salaries and wages up to £8 a week and 9d. in the £1 over that amount are being imposed by that State. These deductions will enable the employee to build up a credit for application to his income tax liability which will be advised to him in the second half of the financial year by assessment based on his taxable income of the previous year. As the State legislation imposes a rate of deduction from salaries and wages, and not a rate of tax thereon, the Commonwealth has not the power under the existing Commonwealth legislation to continue even the present deductions after the 30th June next. In order to give to the State that measure of desirable assistance in the collection of tax from Commonwealth officers, and to afford to those officers the same relief as is extended to others in private or State employ, it has been deemed necessary to submit the present bill in order to extend the power of the Commonwealth to enter into an agreement for the deduction of taxation, not only where a rate of taxation at the source is imposed, hut also where a rate of deduction at the source to meet the tax is made.

Senator COLLINGS:
QueenslandLeader of the Opposition

– I have only just seen this bill for the first time, and have had no opportunity to study it. I was unable to gather from the Minister’s speech why it had been introduced, who asked for it, or what advantage it will confer on either the taxpayer or the income tax authorities. I desire some clearer explanation of the measure than we have had.

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

. - in, reply - I am informed that the Government of “Western Australia asked for this legislation in order to enable it to make the deductions which the bill authorizes.

Senator Collings:

– Does it apply only to Western Australia?

Senator McBRIDE:

– Yes.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 and 2 agreed to.

Clause 3 (Deduction from salaries, &c., of officers).

SenatorFRASER (Western Australia) [9.5]. - I understand from the remarks of the Assistant Minister (Senator McBride) that this bill provides especially for the deduction of tax imposed on the salaries of Commonwealth public servants who are residents of Western Australia. The State act provides that the tax shall be collected at the source. Provision has now been made by an amended State act to allow certain things to be done which were not allowed under the old act. Can the Assistant Minister say how often deductions will be made?

Senator McBride:

– They will be made fortnightly.

Senator FRASER:

– Will the tax still be collected at the source?

Senator McBride:

– The purpose of the bill is to impose a rate of deduction from salaries or wages in order to build up a credit from which the tax can be paid when it becomes due. The State unemployment tax is now being incorporated in the income tax of Western Australia.

Senator FRASER:

– I take it that it does not alter the arrangement under the old act for collecting the tax at the source.

Senator McBRIDE:
SOUTH AUSTRALIA · UAP

– Certain deductions which were not previously allowed will be possible.

Senator FRASER:

– Will the amounts be deducted from the fortnightly salary or wages?

Senator McBride:

– Yes.

Senator SHEEHAN:
Victoria

– I cannot understand the purpose of this bill and certainly cannot see that its operations are confined to Western Australia.

Senator McBride:

– The Commonwealth may not pass legislation to apply to only one State. This legislation has been asked for by the Government of Western Australia because of the system of taxation in operation in that State.

Senator SHEEHAN:

– The Assistant Minister said that it had been introduced at the request of the State. Now he says it will refer to all of the States.

Senator McBride:

– It can do so.

Senator SHEEHAN:

– Does it apply to the federal income tax or to the State tax?

Senator McBride:

– It applies to the State tax.

Senator SHEEHAN:

– I cannot understand why it is necessary for this Parliament to pass a measure in relation to State income tax.

Senator McBride:

– The bill will give to the State power to make fortnightly deductions from salaries in order to build up credits to meet the tax at the end of the financial year, when it becomes due.

Senator SHEEHAN:

– Does the bill apply to Commonwealth public servants or to State employees?

Senator McBride:

– It applies only to the employees of the Commonwealth.

Senator SHEEHAN:

– That makes the position clearer, but I do not know whether Commonwealth officers in “Western Australia desire that this method of collecting tax from them shall be employed.

Senator McBride:

– They have offered no opposition to the proposal.

Senator SHEEHAN:

– It is to be hoped that they knew more about the bill before it was introduced than we know of it now. The bill provides that the Commonwealth may enter into an agreement with any State, but it does not say anything about the attitude of the people who have to pay the tax. This is the application of a method of extracting taxes from one section of the community which is not applied to other sections. A man in receipt of a salary or wage may be required to pay his tax fortnightly by having it deducted from his pay, whereas another person in receipt of a much higher income may pay his tax once a year, or not at all if he can evade payment. Honorable senators are aware that recently a well-known gentleman with an income far beyond that enjoyed by most public servants, has had his payments deferred over a long term of years. The Government appears to be keen to extract money from the salary-earning section of the community by deducting it from their salaries fortnightly, whereas it is prepared to allow people with large incomes to defer their payments, or even to evade payment altogether. This appears to be a class tax.

Senator FRASER:
Western Australia

– I shall endeavour to explain what is intended. Previously the financial emergency tax in Western Australia was collected at the source.

Senator Sheehan:

– Was that so in respect of pastoralists ?

Senator FRASER:

– It is possible that Commonwealth public servants in that State desire to have their tax deducted from their pay fortnightly.

Senator Sheehan:

– Is the honorable senator certain that they desire it?

Senator FRASER:

– The financial emergency tax of Western Australia has been merged in the income tax, and certain things are to be done which were not done under the financial emergency tax. This bill gives to the State Government the power to deduct the tax from the salaries or wages of Commonwealth public servants in Western Australia, the amount to be collected at the source.

Clause agreed to.

Clause 4 (Existing agreement to continue in force).

Senator Sheehan:

– What is the “ existing agreement “ referred to in the clause ?

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

– It is an agreement which relates to the emergency tax hitherto in operation in Western Australia, but which after the 30th June will be incorporated in the State income tax. Although power cannot be given to the Government of Western Australia to deduct the tax from the wages and salaries of Commonwealth public servants, power can be given to the Commonwealth Government to make an agreement with the Government of Western Australia to do so. That is what is provided for in the bill. I understand that certain other agreements of a somewhat similar kind are in operation in relation to some other States.

Senator ARTHUR:
New South Wales

– Will this clause have any relation to the collection ofwar-time profits tax amounting to £4,000,000 still owing by the Shell Oil Company?

Senator McBride:

– It has nothing to do with that matter.

Senator SHEEHAN:
Victoria

– It seems to me that the Assistant Minister for Commerce (Senator McBride) is not in a position to give us any information on the details of the bill. It is surely not too much to expect a concise statement to be made concerning the intentions of the various measures submitted to us.

Clause agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 1793

RABBIT SKINS EXPORT CHARGES BILL 1940

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator McBride) read a first time.

Second Reading

Senator McBRIDE (South Australia-

Assistant Minister for Commerce) [9.22].- I move-

That the bill be now read a second time.

This hill is for the purpose of imposing a charge on the export of rabbit skins in order to provide a sum of money sufficient to cover amounts which it will be necessary to appropriate from the Consolidated Revenue Fund from time to time, in connexion with the administration of the marketing scheme, for which provision is being made by regulation under the National Security Act.

Honorable senators are no doubt aware of the great rise of the price of rabbit skins since the commencement of the war. The effect that these increased prices would have on the cost at which the Commonwealth could be supplied with military hats, and the public with hats for ordinary wear, has made such a scheme necessary.

When the Minister for Supply and Development (Sir Frederick Stewart) consulted the felt-hat manufacturing industry in relation to contracts for military hats, the quotations which he received showed that, if hat manufacturers were obliged to buy skins on the open market, the cost of the hats to this Government would be unreasonably high. After a departmental investigation, the Minister asked that some form of marketing control shouldbe established which would enable hat manufacturers to obtain their requirements of rabbit skins at prices which would allow them to quote reasonable prices for military hats.

The Commonwealth Prices Commissioner has also taken cognizance of the rise of the price of rabbit skins and he has fixed a set of domestic prices for different grades of rabbits skins suitable for hat manufacture, above which such skins may not be sold. The fixed prices are, naturally, below ruling market rates.

Honorable senators will appreciate that, unless some form of control were put into operation, the effect of the Prices Commissioner’s determination would be that hat manufacturers would not be able toobtain skins at those prices in competition with persons buying for export.

The scheme proposed has been prepared with the object of interfering with ordinary trade practice as little as possible. It is proposed that the manufacturers shall purchase their requirements at open auction. Prices for normal domestic requirements, plus the additional quantities needed to complete military orders, will be fixed in accordance with a table of limits prepared by the Australian Rabbitskins Board, and the appraisement value will represent the final net cost to them of those purchases. The quantities for which manufacturers will pay appraised prices will be closely regulated.

Skins are coming on the market very freely this winter and, as the quantity available for export will directly affect the charge, it is anticipated that the levy which will be necessary will be considerably below the maximum rate of 9d. per lb. which is being provided, unless prices soar to extraordinary heights.

It is proposed that the charge shall not operate for another two weeks in order to give exporters an opportunity to clear stocks of skins which they have already purchased for export. The export charge will be reflected in somewhat lower prices at the auctions, but price levels are such to-day that the returns to trappers will show a very high percentage increase over last year’s returns.

Hat manufacturers ordinarily purchase their requirements of skins at the winter sales and, as they are ready to operate now, this is an urgent measure, and I commend it to honorable senators.

Senator COLLINGS:
; Leader of the Opposition · Queensland

– I gather from the remarks of the Assistant Minister (Senator McBride) that it is necessary for us. to pass this bill in order that the Government may take steps to curb the rapacity of certain traders. It seems that whenever a war occurs, advantage is taken of it by certain individuals to increase commodity prices beyond reasonable levels. For this reason action has been taken in another country to enable the Government to assume complete control of all trading operations, and to retain it so long as the national emergency continues. Although we have not gone to that length in this country, certain steps have had to be taken, and this one among them, to ensure that the interests of the general public shall be protected.

Senator ARTHUR:
New South Wales

– The action that is now being taken by the Government under its National Security powers to control for the period of the war many primary products, including rabbit skins, takes my mind back to somewhat similar circumstances at the time of the last war. It seems to me, however, that the trappers^ poisoners and shooters of rabbits are being treated differently from, say, the wool-growers. It is proposed that the rabbit skins shall be sold at public auction. If an export levy of 9d. per lb. be imposed, a restriction will undoubtedly be placed upon the operations of the trappers, poisoners and shooters. During the last war the price of rabbit skins rose to 17s. 6d. per lb. at one stage, but sufficient were obtainable for the export trade without the imposition of any restrictive regulations. The rabbittrappers did not, however, receive the benefit of the higher prices. Yet the wool-growers were able to take full advantage of the favorable position of their industry. The organization known as Bawra operated for a considerable period after the war in disposing of the accumulated stocks of wool to the great advantage of the wool-growers. I dissent from the view of the Assistant Minister for Commerce that an increased quantity of rabbit skins will be put on the market this year.

Senator MCBRIDE:
UAP

– Increased quantities are already being marketed.

Senator ARTHUR:

– I have done a good deal of travelling in New South Wales in the last four or five months, and I have seen very few rabbits, although I know in which parts of the country to look for them. Rabbit skins were scarce last year, and, in my opinion, they will be scarce this year. In view of the operations of the stock inspectors, which often result in the prosecution of person* engaged in the useful service of trying to rid our country districts of rabbits, it is hardly likely that extensive activities will be engaged in by the trappers. I hope that the Commonwealth Prices Commissioner will inform his mind of what happened during the last war in connexion with rabbit skins, and that we shall not have a repetition of the injustices that were then inflicted upon those engaged in the winning of the skins.

Senator AMOUR:
New South Wales

– It appears to me that the purpose of this bill is to restrict the operations of rabbit-trappers and rabbitpoisoners. In the summer the fur on the rabbits is thin and the skins are light, with the result that the price is low. In the winter months the fur is thicker, the skins are heavier, and, usually, the prices obtainable are better. This proposal to fix the price of rabbit skins will, in my opinion, inflict hardships on the trappers, poisoners and shooters of rabbits, and at the same time, confer an advantage on those who buy the skins for manufacturing purposes. It has been said that the supply of rabbit skins this year is abundant, and that it is necessary to restrict the output, but the manager of the Akubra hat factory in Sydney has informed me that it has even been necessary to import rabbit skins to meet the demands of the market.

Senator McBride:

– That is inaccurate.

Senator AMOUR:

– I have been told that the supply has fallen from 80 tons to 50 tons a week. The effect of this measure will be to deny to rabbit trappers the results to which they are entitled. At one time I was engaged in the work of procuring rabbit skins, and I have obtained as much as 7s. 6d. per lb. for them. Thousands of people in New SouthWales have secured a good living by this means. If the price of skins were seriously reduced, many people would be prosecuted for failure to destroy the rabbits on their land, because they would refuse to trap or poison them.

Senator McBRIDE:
South AustraliaAssistant Minister forCommerce · UAP

. -inreply - I can disabuse the minds of honorable senators opposite on the points mentioned by them. It is not proposed to limit the price of rabbit skins sold at auction, except to the extent to which the export tax would be imposed. That tax would not reduce the price as suggested. The bill provides that an export charge not exceeding 9d. per lb. may be made. As the object of this scheme is to equalize the price to the manufacturer, and as the Australian manufacturer uses only about 15 per cent. of the total quantity of rabbit skins annuallyproduced in this country, it is not expected that the tax will be anything like 9d. per lb. In view of the present prices ruling in the open market, it is anticipated that a tax of about 3d. per lb. will be sufficient. Only if the price of skins soared to an extraordinarily high level would the tax reach 9d. per lb. At the present time, the average price of skins at auction is about 60 per cent. higher than that ruling last year, and this has not discouraged trapping throughout Australia. Despite what has been said by Senators Amour and Arthur, larger quantities of skins are being placed on the market this year than last year. Last week the offerings in Sydney totalled about 80 tons, as against about. 50 tons at the corresponding period of last year. It willbe recognized that, whilst a small contribution will he made by this measure towards the maintenance of a relatively low price for skins for Australian use, the contribution will not be in excess of, probably, 3d. per lb. on the whole of the Australian output. It was mentioned by Senator Arthur that Australian manufacturers are importing rabbit skins, but this importation is confined to skins of a particular type not produced in this country. This bill will not effect in any way the manufacturers who use those skins.

Question resolved in the affirmative.

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

page 1795

RABBIT SKINS EXPORT CHARGES APPROPRIATION BILL 1940

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator McBride) read a first time.

Second Reading

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

.- I move

That the bill be now read a second time.

The purpose of the measure is to appropriate from the Consolidated Revenue Fund such amounts as are from time to time received by the Commonwealth in respect of a charge to be imposed on the export of rabbit skins. The bill is complementary to the Rabbit Skins Export Charges Bill, and makes provision for the appointment of an Australian rabbit skins board, and for the payment to that board of amounts so appropriated for the purpose of administering the marketing scheme which I have already outlined to honorable senators in my second-reading speech on the immediately preceding bill.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 and 2 agreed to.

Clause 3 (Australian Rabbit Skins Board).

Senator ARTHUR:
New South Wales

– The clause provides that one of the members of the board shall be a representative of original suppliers of rabbit skins. As the men who procure rabbit skins have no industrial organization, except through the Australian Workers Union, and are not covered by an award, how is it proposed to select their representative on the board, and what fees will he receive for attending board meetings?

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

– As Senator Arthur has remarked, rabbiters have no organization which the Government could approach to enable a representative to be selected for this board ; so it is suggested that the Australian Workers Union should nominate a representative of the rabbiters. The fees to be paid will be on a scale similar to that of the allowances made to the members of boards operating similar schemes.

Clause agreed to.

Clauses 4 to 8 agreed to.

Preamble and title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time. .

page 1796

SUPPLY BILL (No. 1) 1940-1941

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

First Reading

Motion (by Senator McBride) proposed -

That the bill be now read a first time.

Senator COLLINGS:
QueenslandLeader of the Opposition

– Earlier to-day we heard a speech by a supporter of the Government who referred to what seemed to be a most impressive letter. Honorable senators were beginning to wonder who was the brilliant author of the epistle when their hopes were dashed; the honorable senator addressing the Senate informed us that the letter had, in fact, never been written. I had prepared a speech to deliver on this occasion but I am afraid that, in the circumstances, it will not be delivered. Honorable senators are permitted, during the consideration of a measure of this kind, to discuss many things which may have no direct application to the bill. I had many matters which I intended to mention but, at this late hour,

I do not feel disposed to speak at length. I shall content myself, therefore, by saying that we on this side of the chamber are opposed to the Government’s method of rushing financial measures through the Senate shortly before Parliament goes into recess. In view of the fact that the Parliament will re-assemble a few weeks hence, I shall wait until then to say the things which I had intended to say to-night. But I ask the Leader of the Senate to inform the Prime Minister that the Opposition is weary of the congestion of business which occurs at times like this, and is dissatisfied with the Government’s system of presenting financial proposals to the Senate. The whole of the Government’s financial legislation is brought forward piecemeal. First, we discussed the Treasurer’s financial statement. Then came nine bills relating to sales taxation and later still other financial proposals were brought before the chamber. Finally, this Supply Bill is introduced. Most honorable senators discussed the matters they had in mind when the financial statement was before this chamber and there is no occasion for them to repeat previous statements. But the Opposition contends that all financial measures should be brought forward in proper sequence, or in one group, as was the practice in years gone by. This would eliminate much needless repetition and prevent the abrupt curtailment of discussions at the end of a series of parliamentary sittings. Honorable senators may take as read the speech which I had intended to make on this “measure. Unless I have occasion to discuss any item in the committee stage, I shall not speak further on this bill.

Question resolved in the affirmative.

Bill read a first time.

Second Reading

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

– I move -

That the bill be now read a second time.

This bill is to secure the necessary appropriation of moneys to carry on the services of the Government until the animal appropriation act for 1940-41 is approved by Parliament. The bill makes provision for the expenditure of an amount of £13,709,200 for ordinary services for the period of the first three months of the financial year 1940-41.

The provision may be summarized under the following heads: -

Provision is made in this bill only for the amount which is estimated to be sufficient to carry on the essential services on the basis of the appropriations passed by the Parliament for the present year, 1939-40. The items making up this total represent approximately one-quarter of those appropriations, except in a few cases where expenditure is heavier in the early months of the financial year than later. An exception is, however, made in respect of defence and war services, where the amount included represents the estimated actual charge to revenue appropriations during the first three months of the year. In addition to this defence vote, there will, of course, be other defence expenditure which will be covered by the loan appropriation. The usual provisions are made in the bill for “ Refunds of Revenue “ and “ Advance to the Treasurer “, the amounts being £450,000 and £4,000,000 respectively. The latter amount is mainly required to carry on uncompleted works which will be in progress at the 30th June, and also to cover unforeseen and miscellaneous expenditure. It will also temporarily finance the special grants to South Australia, Western Australia and Tasmania on the same basis as was approved by Parliament for the present financial year, until a bill can be submitted after receipt of the report of the Commonwealth Grants Commission.

It is possible also that unforeseen war charges not covered by an appropriation may arise and these will be met from Treasurer’s Advance. Except in the case of defence and war services, no provision is made in the bill for any new expenditure or any departure from existing policy.

Question resolved in the affirmative.

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

page 1797

SUPPLEMENTARY APPROPRIATION BILL 1938-1939

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator McBride) road a first time.

Second Reading

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

– I move -

That the bill be now read a second time.

The Supplementary Estimates for the year ended the 30th June, 1939, which have been tabled, cover the items of expenditure for which no specific parliamentary approval has been given, but which were met temporarily out of provision for Treasurer’s Advance pending submission to Parliament in the form of these Estimates. As honorable senators are aware, it is customary to include each year in the Estimates in chief a vote under the heading “ Advance to Treasurer “. The provision of £2,500,000 for this purpose in 193S-39 enabled the Treasurer to make advances to the various departments in order to meet those urgent and essential services which could not be foreseen and which, therefore, were not included in the Estimates in chief. Particulars of this unforeseen expenditure- in the form of Supplementary Estimates are now submitted for covering appropriation by Parliament. As copies of these Estimates are being circulated among honorable senators, I do not propose at this stage to refer to the items in detail. Of the amount of £2,500,000 voted for Treasurer’s Advance in 1938-39, £1,193,131 was expended on ordinary departmental services and war services, 1914-18, payable from revenue, whilst £91,-368 Avas used for additions, new works and buildings, for which lastmentioned sum Supplementary Estimates will shortly be submitted separately. Although in this bill Parliament is being asked to appropriate £1,193,131, the expenditure for the year was actually £18,314 less than the total provision for ordinary services in the main Estimates and the additional .Estimates for defence purposes introduced in December, 1938. This is because, in many instances, this new expenditure was made contingent on savings of similar amounts in other items. In other votes, straight-out savings were possible.

Honorable senators will remember that in December, 1938, an additional appropriation of £1,320,950 was granted for defence expenditure in 1938-39. It is usual, when moneys are required to be appropriated for expenditure on salary and pay votes, to submit for parliamentary approval full details in the form of a schedule to the bill; but, in this case, the information was not available to enable this to be done. Out of the appropriation already referred to, £173,320 was expended on defence salaries and pay. Although no additional appropriation is now required, the opportunity has been taken to include on pages 37 to 42 of these Supplementary Estimates a schedule of salaries for the covering approval of Parliament.

Full details of the expenditure which is now submitted for approval have already been furnished to Parliament in the Estimates and budget papers for 1939-40. The Estimates compare the amount voted for 1939-40 with the actual expenditure for 1938-39, whilst the budget papers also record the expenditure. Details were included in the Treasurer’s finance statement for 1938-39, which was tabled during the last session for the information of honorable senators.

In order that honorable senators may be assured that these Estimates are based upon properly-audited accounts, it is the practice to await the report of the Auditor-General on the accounts of the year under review. The Treasurer’s finance statement, which contains full particulars of these Supplementary Estimates, was forwarded to the AuditorGeneral on the 29th September, 1939, and the Auditor-General’s report was laid on the table of the Senate on the 6th December, 1939. This did not leave sufficient time for the introduction of this measure in the last session of Parliament.

Question resolved in the affirmative.

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

page 1798

SUPPLEMENTARY APPROPRIATION (WORKS AND BUILDINGS) BILL 1938-39

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator McBride) read a first time.

Second Reading

Senator McBRIDE:
.South AustraliaAssistant Minister for Commerce · UAP

.- I move -

That the bill be now read a second time.

When the Supplementary Estimates for ordinary services were presented, honorable senators were informed of the reason for, and the procedure adopted with, bills of this character.

This measure provides for au appropriation of £91,36S for expenditure under additions, new works, buildings, &c, which has been met from the vote “ Advance to the Treasurer “ during the year 1938-39.

Although the amount mentioned in the bill is £91,368, that sum does not represent an amount expended on works and buildings in excess of the original estimates. Actually, the total expenditure of £6,565,268 was £476,732 less than the sum of £7,042,000 appropriated for this purpose. Parliament is therefore asked to approve of new works expenditure which was more than counterbalanced by savings on other works. The amount included in the hill is considerably less than the provision for works in the Supplementary Estimates in each of the last three years. Business undertakings required more than £54,000, of which telegraph and miscellaneous works for the post office absorbed over £36,000. I do not propose to refer in detail to all of the items in the schedule. .

Question resolved in the affirmative.

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

page 1799

AUSTRALIAN SOLDIERS’ REPATRIATION BILL 1940

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

page 1799

G OLD-MINING ENCOURAGEMENT BILL 1940

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

page 1799

SPECIAL ADJOURNMENT

Motion (by Senator McLeay) agreed to-

That the Senate, at its rising, adjourn until Tuesday, the 2nd July next, at 3 o’clock p.m., unless the President shall, prior to that date, by telegram or letter addressed to each senator, fix an earlier day of meeting.

page 1799

PAPERS

The following papers were pre sented : -

Arbitration (Public Service) Act - Determinations by the Arbitrator, &c. -

No. 9 of 1940 - Amalgamated Postal Workers’ Union of Australia.

No. 10 of 1940 - Amalgamated Postal Workers’ Union of Australia.

National Security Act -

National Security (General) Regulations - Orders -

Taking possession of land, &c. (23).

Use of land (3).

Regulations - Statutory Rules 1940, No. 86.

New Guinea Act - Ordinances of 1940 -

No. 1 - Appropriation (No. 2) 1939-1940.

No. 2 - Administration and Probate.

No. 3 - Copra.

No. 5 - Police Force.

No. 7- Supply 1940-1941.

Papua Act- Ordinance No. 11 of 1939 -

Royal Papuan Constabulary.

Senate adjourned at 10.14 p.m.

page 1799

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Reserved Occupations and Rejected Volunteers

Senator Brand:
VICTORIA

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

  1. Will the Government consider the question of issuing a badge to men in reserved occupations, as an indication that their services are not available for either our home defence army or the Australian Imperial Force?
  2. Will the Government consider the issue of a badge to all who volunteer for service overseas with the Australian Imperial Force, and are rejected for various reasons?

SenatorFoll. - The Minister for Defence Co-ordination has supplied the following answer: -

A committee was appointed some time ago to report on the issue of badges for various classes of individuals including those referred to in the question. The report has been completed, and is at present receiving consideration.

Rifle Club Reserve

Senator Brand:

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

  1. Has any scheme been prepared to utilize, for home defence, the services of thousands of reserve (i.e. civilian) rifle club men?
  2. Is it not a fact that all of these men, on joining, were sworn in under the Defence Act, and that all of them possess either the long or short . 303 service rifle, in the use of which they are highly skilled?
Senator Foll:
UAP

– The Minister for the Army has supplied the following answers : -

  1. The plans for mobilization provide for members of reserve rifle clubs being incorporated in units of the military forces on mobilization. For this purpose, all reserve rifle clubs have been allotted to military units.
  2. All members of rifle clubs are sworn in. About two-thirds of them are in possession of their own rifles. The degree of skill of rifle clubs members varies.

Manufacture of Munitions: Western Australia

Senator Fraser:

asked the Minister representing the Minister for Supply and Development, upon notice -

  1. What action, if any, has the Government taken to utilize the workshops of Western Australia for the manufacture of munitions and other war material?
  2. Is it a fact that in Western Australia skilled artisans are unemployed?
  3. Is it a fact also that skilled artisans are engaged in employment other than skilled work ?
  4. Does the Minister say that there is a shortage of skilled artisans for the manufacture of war munitions?
  5. Is it a fact that many skilled artisans are joining the Australian Imperial Force?
  6. What number of skilled artisans were registered under the national register in Western Australia?
Senator Foll:
UAP

– The Minister for Supply and Development has furnished the following replies: -

  1. Manufacturers in Western Australia have been furnished from time to time with particulars of defence requirements, and as a result, certain orders have been placed with Western Australian manufacturers. At my direction, the chairman of the Contracts Board of my department visited Perth recently, and, as a result of his conferences with the Western Australian Chamber of Manufactures, individual manufacturers, andthe manager of the Western Australian Government Railway Workshops, it is hoped that industries in Western Australia will be able,in future, to undertake a greater share of defence work than they have in the past. 2 and3. Information on these matters is not available in the Department of Supply and Development, but the desired particulars might be obtainable from the Department of Labour and Industry of the Western Australian Government.
  2. Yes, for particular categories of munitions in certain localities. As far as Western Australia is concerned no shortage of skilled labour has been brought to the notice of my department.
  3. Yes. The enlistment of skilled artisans in the Australian Imperial Force is necessary as many are required in technical units. A percentage is also required in non-technical units. They are obtained mostly from personnel who have been trained in civil industries during peace.
  4. Machine tabulations of skilled artisans are not yet completed for all States. Those for Western Australia are now in course of compilation but will not be available for a further week or two.

Bren Machine Gun

Senator Ashley:

asked the Minister representing the Minister for Supply and Development, upon notice -

What is the reason for transferring to another building the machinery and equipment from the. £63,000 building erected for the production of the Bren machine gun at the Small Arms Factory, Lithgow?

Senator Foll:
UAP

– The Minister for Supply and Development has supplied the following answer: -

Re-arrangements of the factory layout have been necessary to ensure the most efficient operations over the whole small arms programme. The expanded programme has required such re-adjustments.

Cite as: Australia, Senate, Debates, 31 May 1940, viewed 22 October 2017, <http://historichansard.net/senate/1940/19400531_senate_15_163/>.