House of Representatives
19 October 1904

2nd Parliament · 1st Session



Mr. Speaker took the chair at 2.30 p.m., and read prayers.

page 5738

QUESTION

IMMIGRATION

Mr GROOM:
DARLING DOWNS, QUEENSLAND

– Will the Prime Minister inform the House what answers, if any, have been received from the Governments of the various States to the letters on the subject of immigration addressed to them by the honorable and learned member for Ballarat when Prime Minister? Will he tell the’ House what Governments have replied to those ‘letters, and can he at some future date indicate the nature of the replies which have been received?

Mr REID:
Minister for External Affairs · EAST SYDNEY, NEW SOUTH WALES · Free Trade

– The honorable and learned member for Ballarat, when Prime Minister, addressed - I think in March last - circular letters to the Governments of the States upon the important question to which the honorable and learned member for Darling Downs has referred, but we have received replies from the Governments of Victoria, Queensland, and South Australia only. There is no objection to giving a precis of those replies.

page 5738

QUESTION

COLONEL ROWELL

Mr HUTCHISON:
HINDMARSH, SOUTH AUSTRALIA

– I wish to know from the Minister of Defence if Colonel Rowell, of South Australia, was offered the position of Acting Commandant of the State, and, if so, at what salary?

Mr McCAY:
Minister for Defence · CORINELLA, VICTORIA · Protectionist

– Colonel Rowell was asked to take the position on the same terms as those upon which Colonel Robertson for gome time acted as Commandant of Victoria.

Mr Batchelor:

– Without salary? Is Colonel Robertson a permanent officer?

Mr McCAY:

– No; he is a citizen soldier, commanding the Second Infantry Brigade in Victoria. Colonel Bayly was given three months’ leave, and I proposed to fill the vacancy caused bv his absence by the temporary appointment of Colonel Rowell ; but as he said that his private business would prevent his performance of the duties of Acting Commandant, I appointed Lieut. Colonel Reade.

page 5738

ADJOURNMENT

Preference to Local Tenderers

Mr MAHON:
Coolgardie

– I desire to move the adjournment of the House, to discuss a definite matter of urgent public importance, viz., “ The action of the Postmaster-General in giving preference to local tenderers for Departmental supplies, and the evasive and unsatisfactory answers to questions in connexion therewith given by the Prime Minister and the Postmaster-General on the sitting of the House on the 14th October.”

Mr Reid:

– I am getting a motion of censure every day.

Five honorable members having risen in their places,

Question proposed.

Mr MAHON:

– I realize very fully the ‘ responsibility devolving upon any member who recklessly and without good reason intercepts the transaction of public business. During a period of nearly four years in the Federal Parliament, I have never before found it necessary to move the adjournment of the House ; and that I deprecate the practice is proved by the fact that I have always refrained from speaking to such a motion, except in defence of my Ministerial actions. I believe that very strong’ grounds are always necessary to justify one who adopts any unusual course. I do think the grounds which I shall submit presently do most amply warrant me in resorting to an exceptional method of exposing Ministerial misdeeds.

Mr Reid:

– Misdeeds? The honorable member is using strong language.

Mr MAHON:

– I hope to show before I finish that the word which I have just uttered is that which appropriately describes the actions of Ministers. It will be remembered that for some weeks the businesspaper contained notices of two questions in respect to the preference given to local tenderers for supplies to the various Departments. The first question stood in the name of the honorable and learned member for Corio ; the second is that of -the honorable and learned member for Parkes. Though both questions referred to the same matter the inquiry of the honorable and learned member for Parkes raised important issues not covered by the question of the honorable and learned member for Corio. The latter was answered on Friday by the Prime Minister in terms which I shall refer to later on. The honorable and learned member for Corio asked the Prime Minister -

  1. Whether he proposes to carry out the policy that in all Government contracts preference shall bc given to local manufactures and products?
  2. Whether he will cause to be inserted in all Government contracts a condition that goods which can be reasonably manuf acured in Australia should ha ve preference over similar articles manufactured outside ?

To that question the Prime Minister gave the following answer : -

  1. No general rule has been adopted. Each case will be judged on its merits, with the desire to make use of Australian articles where conditions justify.
  2. The present system will be adhered to.
Mr Crouch:

– The second reply was no answer at all; it was a pure evasion.

Mr MAHON:

– I said so at the time. I shall criticise that reply later. The honorable and learned member for Parkes, on the same day, put the following questions to the Postmaster-General:

  1. Whether he has yet submitted to the Cabinet the question of continuing the practice of distinguishing between Australian and European tenderers by giving the former an advantage of 15 per cent, over the latter in their dealings with his Department?
  2. If he has so submitted the question, have his colleagues approved of the continuance of the practice?
  3. Can he point to any constitutional or legisla tive authority for such differential treatment of Commonwealth citizens, on the ground of nationality ?

The Postmaster-General curtly stated that the latter question had been answered by the reply given to the honorable and learned member for Corio. This rejoinder was such a palpable attempt to deceive the House that it evoked shouts of laughter from the Opposition, and I interpreted the general feeling by saying that the reply given to the honorable and learned member for Corio did not at all answer the question put by the honorable and learned member for Parkes. Thereupon the Prime Minister sneeringly invited me to answer the question, to which I rejoined that I should take steps to prevent any brazen stifling of legitimate inquiry. That is what I propose to do now, and I have taken the earliest opportunity of fulfilling my promise.

Mr Johnson:

– Is there to be a fresh motion of want of confidence every day ?

Mr Reid:

– Until the soreness is removed, we must expect that.

Mr MAHON:

– A cursory reading of the two questions will show that the answer to one could not possibly be an adequate reply to the other. The question of the honorable and learned member for Parkes raised a much wider issue than did the question of the honorable and learned member for Corio. The honorable and learned member for Parkes raised the issue of Cabinet consultation and responsibility - an issue which the question of the honorable and learned member for Corio did not touch. I say, therefore,thatthe statement of the Postmaster-General that the same answer covers both questions is unmistakably inaccurate. Had the Standing Orders allowed it I might have said that the statement of the Postmaster-General was palpably false to his own knowledge; I know, however, that I should be out of order in saying so.

Mr DUGALD THOMSON:
Minister for Home Affairs · NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906

– That is an evasion.

Mr MAHON:

– The honorable member will admit that it is one of those evasions necessary at times to enable a man to express his honest opinion. But, whatever Ministers may do or say, I desire to preserve parliamentary traditions. Whatever excuse may be offered for the obliquity of the Postmaster-General in regard to the first portion of the question of the honorable and learned member for Parkes, he has no justification whatever for ignoring the third clause of that question. The answer given by the Minister was an audacious piece of “bluff,” which this House ought to resent. The third question of the honorable and learned member for Parkes was -

Can he point to any constitutional or legislative authority for such differential treatment of Commonwealth citizens on the ground of nationality ?

Here is a totally new and distinct issue of which the previous inquiry contained not the remotest hint. How, then, can it be said truthfully that the answer to one question disposed of the other? I suppose this House cannot take cognizance of the Postmaster-General’s betrayal of lifelong principles. That is a matter for his constituents. But this House can, and should, take notice of a blustering shuffle to evade a straight answer. The PostmasterGeneral may laugh, but he will not impose on me by any “ bluff “ of that sort.

Mr Johnson:

– This motion is only a game of “ bluff,” anyhow.

Mr MAHON:

– Only a game of “bluff” ! The honorable member ought to be ashamed to sit behind a Government guilty of such political treachery. When this House framed a Tariff, it fixed by law the preference which the Legislature was prepared to give

Australian goods. But the Government have gone behind the Tariff, and, without the authority of Parliament, given an additional preference; and yet the honorable member for Lang, who calls himself a freetrader, supports the Government, and tries to excuse them in this fashion. The honorable member ought to keep quiet, and “hide his diminished head,” so that his constituents do not see him.

Mr Johnson:

– The honorable member ieed not- trouble about my constituents.

Mr MAHON:

– I am pleased to see the commotion which my little motion has raised on the other side. I would remind honorable members opposite, however, that I did not raise this outcry - that it was raised by their own friends. The first note of incredulous consternation was sounded by the honorable member for Parramatta, and the second by the honorable and learned member for Parkes, another supporter of the Government.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The honorable and learned member for Parkes is the new-found friend of the honorable member for Coolgardie.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– They are just linoing me out now.

Mr MAHON:

– My reply is that the honorable and learned member for Parkes and I have often before held opinions in common. It so happens, however, that I am trying to be consistent, while honorable members opposite are doing that which I regard as inconsistent.

Mr Reid:

– The honorable member shirked his duty when he was Minister.

Mr MAHON:

– I shirked nothing. I have never shirked anything in my life.

Mr Reid:

– And he placed the responsibility on his successor.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– That is so.

Mr MAHON:

– It is a piece of audacity to say that I shirked my duty. The right honorable gentleman at the head of the Government is the champion shuffler in Australia. Honorable members will remember how the right honorable gentleman shirked the question of the honorable and learned member for Indi last night. I must apologize for being drawn away from my subject. I remind honorable members that I am only allowed a certain time in which to submit this motion, and that these interruptions are very unfair. I ask to be allowed to finish my speech without those unseemly interjections. It shows how the Minister’s action fluttered the ultra- free-trade dovecot when two of the Government’s own supporters raised this question. Personally, I did not interfere; I was anxious to give the Postmaster-General sufficient rope, knowing that the longer he struggled the .tighter the noose would become around his own neck.

Mr Johnson:

– What does the honorable and learned member for Indi think of this ?

Mr SPEAKER:

– Order !

Mr MAHON:

– On the 9th September the Postmaster-General was catechised in regard to a statement which had appeared in the Age of that day. He was asked by the honorable member for Parramatta whether it was true that he had given preference to these local tenderers; and as I was not here on that occasion, I may be allowed to briefly refer to the incident as reported by an eye-witness, as follows: -

When a member of Mr. Reid’s New South Wales Government, Mr. Sydney Smith was looked upon as the humorous Minister. He never decided anything. He was incapable of doing so, and is still. If an officer in his Department wanted an hour’s leave, this satirically named statesman is said ti have arrived at twenty-five different decisions in almost as many minutes. Swarms of messengers, roamed through the Departments, each bearing instructions countermanding those issued to somebody else, and a dozen clerks poured out Ministerial memoranda mutually contradictory. The sei vice fairly groaned under the infliction, and clients from outside were driven to desperation. Members wanted to know yesterday whether Mr. Sydney Smith, as reported in the Age that morning, had become protectionist to the extent of giving a preference in his Deparment to local manufactures. The Minister, amidst great laughter from New South Wales members acquainted with his Ministerial record, explained for fifteen minutes. At one stage it appeared that he had given a preference, at another that he hadn’t’, and at still another that he had not yet come to a decision. Still further, the House was assured that, although a preference might not have been given, the practice of giving it had been established by the last Government, and that all the present Minister had done was to refuse to discontinue, or continue, a practice that might or might not be in force. It didn’t seem quite clear. “ Will the Minister of hi 5 own motion continue the practice of giving a preference to local manufactures?” asked Mr. Mauger. This was the original question that the Postmaster-General had already “ answered,” vet with a knowing smile, and amidst laughter that rose to shrieks, Mr. Sydney Smith said, “ I will deal with that question when it comes up.”

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– Hear, hear. But the honorable member, when Minister, would not deal with the matter at all.

Mr MAHON:

– The Postmaster-General had better keep quiet.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– I am not afraid of the honorable member.

Mr MAHON:

– As comment would only detract from the pungency of this criticism, I shall pass on to the attitude of the Prime Minister to the question of the honorable and learned member for Corio. The question of the honorable and learned member was placed on the notice-paper shortly after this Government came into’ power.

Mr Crouch:

– On the 7 th August.

Mr MAHON:

– At all events, the question was put on the notice-paper before the Government obtained an adjournment of three weeks to start on a prospecting tour in search of a policy. The reply given to the honorable and learned member for Corio was -

No general rule has been adopted. Each case will be judged on its merits, with a desire to make use of Australian articles where conditions justify.

The Prime Minister also said -

The present system will be adhered to.

On the 8th September, when the question placed on the notice-paper by the honorable and learned member for Corio first came up, the Prime Minister said -

I regret that this question, of which notice was given a long time ago, did not come before me until yesterday.

Then the question was postponed at? the request of the right honorable gentleman until 15th September, but the censure motion intervened and happily saved the situation. Upon the 15th September the Prime Minister said that -

Until the morning of the 7th I had not the remotest idea that such a question was upon the notice-paper.

That is to say, he had been in office for over three weeks without taking the trouble to look at the notice-paper to see what business was coming before the House. I confess these statements of the Prime Minister imposed considerable strain on my credibility at the time. And for these reasons : the question was very important, and, indeed. exceedingly awkward; and, even if the notice had escaped his observation, it was the duty of the Prime Minister’s officers to bring it before’ him. There is no doubt that the right honorable gentleman exercises his powers of observation and his memory in a manner convenient to himself. Of that fact we have had numerous proofs in this House. Only on the 20th May last the right honorable gentleman told Parliament that he was absolutely unaware that the honorable and learned member for Ballarat had been negotiating for a coalition with the Labour Party at the same time that he was negotiating with him. Yet the honorable and learned member for Ballarat proved, by numerous extracts from no less than seven separate issues of the Sydney Daily Telegraph, the organ of the right honorable gentleman, that the information that the Deakinite party was negotiating with the Labour Party at the same time that it was in communication with the Free-trade Party was public property.

Mr Johnson:

– What has that to do with the preference given to Post” Office contractors ?

Mr MAHON:

– It has this to do with the matter - that we must view the present shuffle of the Prime Minister in the light of that incident.

Mr Reid:

– The honorable member is full of malice.

Mr MAHON:

– I have no time for political shams.

Mr Robinson:

– The honorable member should not get excited.

Mr MAHON:

-The honorable and learned member may become excited if I start on him.

Mr Robinson:

– I hope that I shall not lose my temper like the honorable member is doing.

Mr MAHON:

– My temper is under perfect control.. The intervention of the honorable member compels me to recall the fact that the electors of Wannon sent to the first Parliament .a gentleman of the highest type. It would appear they have since changed their minds and gone to the other extreme.

Mr Reid:

– I would ask you, Mr. Speaker, whether that remark is parliamentary ?

Mr SPEAKER:

– I must request the honorable member for Coolgardie to withdraw his statement, to which objection has been taken.

Mr MAHON:

– What I said was that, on a former occasion the electors of Wannon returned to this House a gentleman of chivalrous tendencies, and that I feared they have now gone to the opposite extreme.

Mr SPEAKER:

– I must ask the honorable member to withdraw the latter part, of his statement.

Mr MAHON:

– I withdraw the remark, and express my regret that it should have been necessary to say any such thing.

Mr Reid:

– I think, Mr. Speaker, that that is an evasion of your ruling.

Mr SPEAKER:

– The honorable member has distinctly withdrawn, and as the time which he is allowed under the Standing

Orders is rapidly passing away, I hope that he will not be subjected to further interruption.

Mr MAHON:

– The question asked by the honorable and learned member for Corio was a simple one, and such that any candid Minister who had -no ulterior object to serve could have answered by a simple “ Yes “ or “ No “ after five minutes’ consideration. Yet this so-called restorer of responsible Government took nearly two months to make up his mind whether he would or would not give increased protection to local manufactures. (His answer was not an explicit avowal such as was demanded by the question. The honorable and learned member for Corio asked whether a preference clause would be inserted in each contract. That question called for a simple “Yes” or “No.” The right honorable gentleman, however, distinctly evaded the point. He said that the present practice would be adhered to. What is the present practice ? Honorable members do not know whether a preference is granted to the extent of 15 per cent, or 50 per cent. Unless my information is incorrect, the preference given in some cases considerably exceeded the smaller percentage mentioned. Brief as was the right honorable gentleman’s answer, it throws into lurid relief the pitiable gyrations to which he resorts to maintain his present precarious balance. It .would seem that, after having mouthed free-trade all these years, he is in his dotage getting down on the protectionist side of the fence.

Mr McCay:

– The- honorable member himself said he intended to turn protectionist.

Mr MAHON:

– I give that statement a straight-out denial, and if the Minister is what he professes to be, he. ought to withdraw his remark.

Mr McCay:

– If the honorable member denies the statement, I withdraw it.

Mr MAHON:

– I do not know what more any protectionist requires than a Tariff wall at the Custom House buttressed and heightened by the additional preference which the right honorable gentleman has now conceded to the class on whom, for years, he has exhausted his vituperation. But he is now their friend. If any one doubts the Prime Minister’s tendency to “ ‘vert “ to the ranks of his traditional enemies, let him read the assurances given on Friday last to a deputation of fruitgrowers, and be convinced.

Mr SPEAKER:

– I would ask the honorable member whether the reply given to a deputation of fruit-growers has anything to do with the matter now before the House ?

Mr MAHON:

– I propose to connect it by showing that the answer given in this House is not a straightforward one. In Saturday’s Argus the Prime Minister is reported as having made the following statement : -

A great deal had been heard about the different definitions of Socialism. He would apply one definition .to the present case.

Mr SPEAKER:

– Socialism has nothing to do with the question now before us.

Mr MAHON:

– The question at issue is the preference given to local tenderers for Post Office supplies, and I desire to show that the right honorable gentleman has expressed himself in favour of .applying the national power with the object of promoting local industries. . I propose to show that his remarks to the fruit-growers, and his reply to the question asked1 by the honorable and learned member for Corio form part of the scheme by which he hopes to cultivate the friendship of his new-found allies. The right ‘honorable gentleman continued-: -

He would say that he thoroughly believed in any national effort to promote the success of individual enterprise. He shrank from no exercise of national power which had as its object the encouragement of the individual enterprise of thecommunity..

I have never heard a finer exposition of protectionist sentiment. For what is protection but the application of the “national power” to the “encouragement of the individual enterprise of the community “ ? That is the essence of the doctrine preached here and elsewhere by the honorable member for Melbourne Ports and others. They want no more than that “ the national power “ shall’ be exercised at the Custom House to shut out by high duties foreign products which interfere with “the individual enterprise of the community “ now employed in producing clothing, boots, hats, and other commodities. I should like to hear privately - for I know they run some risk in speaking publicly - the opinions of the honorable members for Parkes, Parramatta,. Werriwa, Lang, and New England, concerning this new doctrine. These puritanicindividualists have hitherto held that any Government assistance to industry was economic sacrilege. Do they abet this project of using the national power to bolster up the speculative enterprises of private individuals ?

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– That is the honorable member’s version.

Mr MAHON:

– The Prime Minister’s avowal places these honorable members upon the horns of a dilemma, and) their wriggling when they face their constituents will be an interesting spectacle for both gods and men. The honorable member for Parramatta is very anxious to know my opinion upon the matter of giving preference to local contractors. Personally, I have always given a preference to Australian goods when spending my own money ; but not when spending public money. I believe that every man benefits more or less by the prosperity of the community of which he is a unit. If a certain condition be fulfilled, preference to local producers is perfectly legitimate. That condition is, prior authorization of the preference by Parliament. But it is little short of a fraud upon the people for the Minister, without the sanction of Parliament, to dip his hand into the public purse to pay artificial prices for local products. This would still be true if the Minister who did it were a protectionist. But as the Minister is a free-trader, I say that this transaction covers him and his freetrade colleagues with ineffaceable infamy. When I was explaining what I had done in connexion with this matter a few days ago, the Prime Minister interjected - “ Oh, yours is a sham preference.” In opposition to his opinion, I place that of the honorable member for New England, whose judgment is riot warped by personal interests, nor tinctured by the sweets of office.

Mr Reid:

– Or the “sours” of losing it.

Mr MAHON:

– What did the honorable member for New England say ? He has not fifteen hundred golden reasons for swallowing his principles. Speaking upon 22nd September last, he is reported, on page 4827 of Hansard, to have said -

Concerning the explanation which has been made by the honorable member for Coolgardie, I desire to say that I have every sympathy with the position taken up by him. As a free-trader I insist that no preference should be given to any manufacturer. No administrative act should be in the direction of altering the policy of the country. That should be altered by Parliament alone. The position taken up by the honorable member for Coolgardie is the correct one, and I am fair enough to commend him for it.

Let us examine this incident a little more closely. When this Parliament enacted a Tariff, the duties then imposed represented the full preference which the Legislature decreed should be given to articles produced in Australia. Yet here we find an alleged free-trade Minister granting a preference in secret, behind the back of Parliament, and will not even inform us whether his colleagues approve of his action. Only a few months ago, the Prime Minister and the Postmaster-General repeatedly denounced these duties as a hideous robbery of the people. Yet now they are not merely parties to this hideous robbery, but they have actually agreed to add another 15 per cent, to these cruel imposts. This is done, not in the open light of day by legislative enactment, but by the secret fiat of a Minister. However viewed, it is an audacious thing for a Government, and still more audacious for a single Minister, to squander public money in this fashion, without first seeking the approval of the trustees of the people in this House. I regret very much the absence from the Chamber of the Minister of Home Affairs, because I should like to learn whether he approves of this proceeding. If he does, many of us will lose what little faith we retain in the rectitude and consistency of public men. Hitherto that honorable gentleman has maintained a very high character in this House. His record is unsullied, and I am -merely1 voicing the general opinion when I say that he stands upon an altogether higher plane than does !the Prime Minister or the Postmaster-General. I should like to know whether, having regard to his great career, he is going to share the society of these worthies in the deepest pit of political apostasy yet reached by politicians in any British Legislature. I say that the action of the PostmasterGeneral is an affront to this House, whose prerogatives have been invaded by him, and I trust that honorable members will resent it. Parliament is the sole authority in the land which is entitled to increase the public burdens, and if we con-‘ nive at allowing a” Minister to add to those burdens in this way, we shall have abdicated one of the most important functions committed to our care by the electors of Australia.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I have listened with some interest and amusement to the outburst of righteous indignation on the part of- the ‘honorable member for Coolgardie.

Mr Thomas:

– Is he right in his statements, or is he wrong?

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– No doubt that is a very important question - so important that I suggest to the honorable member that he should give notice of it. Then perhaps when we have nothing better to do, we shall be able to find an answer to it. In the meantime, I wish to say a few words relative to the question which has been raised by the honorable member for Coolgardie. I do not agree with the action of the Postmaster-General in this connexion, and I hope that we have seen the last of the granting of any preference by administrative act. I have previously expressed the opinion upon the floor of this House, that whatever is done in that respect ought to be done statutorily, and by a majority opinion of Parliament expressed in the proper way. At the same time, I would point out that so far nothing has been done which need cause any grave alarm. Nothing has been done which seems to portend any great menace to the Commonwealth consequent upon the action of the Postmaster-General. His action is to be regretted, but at the same time it is quite a small matter. I would suggest that before the honorable member for Coolgardie rises to play the part of a hard taskmaster in this connexion, he should look a little nearer home. It strikes me as a very peculiar proceeding that the very honorable member, who the other day insisted that this preference must be given, who asked the Minister time and again if he intended to grant it - I refer to the honorable member for Bourke - should to-day have supported the honorable member for Coolgardie, who complains of that preference.

Mr Mauger:

– When did the honorable member for Bourke support the honorable member for Coolgardie? The former has not yet spoken.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The honorable member for Bourke rose and supported the motion for the adjournment of the House, in order that the honorable member for Coolgardie might castigate the PostmasterGeneral. He helped to supply the means of castigating the Minister for doing that which he himself earnestly urged should be done. The honorable member for Melbourne Ports must restrain his mellifluous voice-

Mr Mauger:

– That is abuse and not argument.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The honorable member, I have no doubt, is a good judge of abuse. I am merely pointing out simple facts. The honorable member for Bourke, I repeat, who asked the Postmaster-General if he did not intend to continue to grant a preference to local tenderers, and who has already spoken approvingly of that policy, helped the honorable member for Coolgardie to obtain the means of castigating the honorable gentleman. That is all. In a series of carefully-prepared statements, the honorable member for Coolgardie has administered a very severe castigation to all and sundry upon this side of the House, who happen to profess free-trade principles. I say that such statements ought not to come from an honorable member in his position. He has complained - and I presume that his party is supporting him - that a preference, which represents about £60 in £1,600 has been extended to local contractors. Yet he himself is pledged in black and white to the granting of a preference amounting to . £340,000.

Mr Mahon:

– The honorable member is wrong.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Does the honorable member deny that?

Mr Mahon:

– I do most distinctly.

Mr Reid:

– But in a lower tone of voice this time.

Mr Mahon:

– I deny it in any tone which will please the right honorable gentleman.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The honorable member should have denied it the other day. When speaking upon the proposal to grant a bonus upon the production of iron, the other day, the honorable member for Hume, said-

Mr McDonald:

– The honorable member must know that he will be out of order in reading from this session’s Hansard.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I will not quote the remarks of the honorable member for Hume, so that I shall not be out of order. I can assure the honorable member for Kennedy that they are indelibly engraved upon my memory, because I sat at the table and questioned the honorable member for Hume concerning his statements. He declared that every member of the alliance was pledged to vote for the Manufactures Encouragement Bill.

Mr Thomas:

– For its second reading.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The honorable member should not be too quick in pointing his finger, because I have something more to add. When I asked the honorable member for Hume whether every member of the alliance was pledged to support this Bill he said “Yes.” He added that they were pledged to vote for its second reading.

Mr McDonald:

– What is the honorable member’s attitude upon it?

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The honorable member will learn presently. The honorable member for Hume then proceeded to state, not only that the alliance was pledged to supoprt the second reading of the measure, but that, if its members could not obtain their way in Committee as regards the State control of the industry, they were pledged to vote for it in another form.

Mr Mahon:

– Is this in order, Mr. Speaker ? I hope that the honorable member will prove his statement that I am in favour of such a system.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– When the honorable member for Hume made the statement to which I have referred, I interjected -

Does the statement of the honorable member refer to the whole of the alliance ?

I apprehend that the honorable member for Coolgardie is a member of the alliance. I have never heard him repudiate in this House the statement that he is. Sir William Lyne replied to my question in the affirmative, and went on to say -

If, however, they are defeated they are not to destroy the Bill, but are to assist in passing it in another form. Surely that constitutes a great advance ?

I should think it does constitute a great advance - for example, on the part of the honorable member for Coolgardie. Although we may regret the action of the Postmaster-General in conceding this preference - I have already freely expressed my opinion in regard to it - the honorable member who is prepared to vote away hundreds of thousands of pounds of the people’s money by way of preference ought not to be so squeamish about a matter of £60. My honorable friend has also taken the free-trade members of the Government to task, and has denounced them as being ready to “ ‘vert “ on the fiscal issue.

Mr Mahon:

– I shall also denounce them elsewhere.

Mr Reid:

– Terrible.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I thought that there was one honorable member on whom I should be able to rely - the honorable member who challenged me the other day to a free-trade propaganda.

Mr Mahon:

– I was anxious to find a free-trade leader ; that was my trouble.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I wonder whether this is the honorable member who has placed in black and white his agreement to support -

Legislation, including Tariff legislation, shown to be necessary to develop Australian resources - and so on.

Mr Thomas:

– By Cabinet or by Parliament ?

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I am dealing just now not with that point, but with the fact that the honorable member for Coolgardie denounced several honorable members for being prepared to “ ‘vert “ on the fiscal question. He triumphantly pointed to the deputation which waited on the Prime Minister a day or two ago with reference to the export trade in fruit as a matter affecting Australia. All that I have to say as to the matter is that ever since I have understood anything about the principles of trade, it has been my one desire, having regard to the fact that we are at the antipodes of the markets of the world, to do everything in my power within the State to facilitate our exchanges with the other countries of the world. If that be protection, the honorable member may write me down as a protectionist. On the other hand, if this proposal to facilitate trade with other countries of the world-

Mr Watson:

– It is a good protectionist proposal.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– It is the very aim which we have in view in connexion with our fruidt and primary industries generally. If this be protection according to the honorable member for Coolgardie I am afraid that, as I have already said, he must write me down as a protectionist.

Mr Watson:

– I am afraid that the people will write down the honorable member as a Socialist if he goes on in this way.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I am willing to be written down as a Socialist on those lines; but when I deal with Socialism and protection my view is entirely different from that of the honorable member. Had I been at the Pleasant Sunday Afternoon the other day-

Mrt SPEAKER. - Does the honorable member think that he is discussing the question before the Chair?

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The whole question is one of preference, and I fail to see how we ca’n avoid branching off to the questions of State control, protection, and free-trade. However, I shall not further pursue this line of argument. I wish to reply to the statement made by the honorable member for Bland a few days ago, in which he drew a beautiful picture of socialistic schools and railways.

Mr Watson:

– What has that to do with the question?

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The honorable member did not tell his audience that these institutions are buttressed by private capitalism, and are every day earning interest which has to be paid to private individuals who have lent us the money. I come back to the point-

Mr Watson:

– I should think so; that is a foolish statement.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– It is a statement of fact. I shall refrain from dealing further with that branch of the question, solely for the reason that I should not be in order in doing so. When the honorable member talks about our asking that the fruit-growers of Australia shall be assisted to find markets for their produce as Socialism, he must be at a loss for an argument, more especially when he asserts that the giving of such assistance would be a species of protection, and denounces free-traders for being ready to “ ‘vert “ to it. The honorable member, when next he sets out to cleanse the Augean Ministerial stables, should first take care to peruse the terms of the alliance. He did not attempt to clean out the Ministerial stables while he was in office. At all events, I never heard of his doing anything in that direction.

Mr Mahon:

– I never did any dirty work like that of which I complain, anyhow.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– It is not dirty work. That is not the term to apply to it.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– The honorable member for Coolgardie is a good judge of that kind of thing.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– During his four months’ occupancy of the office of PostmasterGeneral, I never heard of his reversing the rule of which he complains. I never heard of his writing a minute with the object of reversing it. He allowed the old system to continue. He took it up from his predecessor, and permitted it to be passed on to his successor in office.

Mr Mahon:

– But he did not give the preference.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– No; but the honorable member allowed tenders to be called while that rule of the Department remained in operation. It was his duty to obliterate that rule as soon as he had an opportunity to do so, if he was eager to put away the temptation to do such fiscal wrongs as he now denounces. But he did not do anything of the kind. He allowed the present Postmaster-General to fall into this fiscal trap with his connivance, and he now bitterly denounces him, and repudiates all that has been done. When next the honorable member sets out on a mission of this’ kind, he should first take care to carefully peruse the terms of the alliance, which are in black and white, and which bind him to protection - he should look well at the decision of the alliance which binds him to support the giving of a bonus involving an expenditure of £340,000 of the public money. There may be honorable members of this House who might with the greatest propriety denounce the proposal of the Ministrv, but the honorable member for Coolgardie is not one of the number.

Mr FISHER:
Wide Bay

– The chief argument advanced by the honorable member is that we should be wrong in proposing to support the giving of a statutory authority to the Ministry to take a certain action, and that if we proposed to challenge the Government for doing something without authority we should also adopt a dangerous course. Every protectionist should support this motion, for the reason that if the Government claim the right to give a preference to local manufacturers, they contemplate the giving of a measure of protection, which must certainly be sufficient from their point of view. The Government might say, on going to the country. “ It is unnecessary to have any statutory authority to do such a thing - we shall do it for ourselves.”

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Did the honorable member denounce this course of action during the two years that it was pursued ?

Mr FISHER:

– It is the boast of the Prime Minister, as well as of the Treasurer and the Minister of Trade and Customs, that the three protectionist members of the Ministry are there to guard the protectionist policy. Could there be anything more scandalous, more unseemly, or more unbecoming, than for Ministers to administer the laws of the country in accordance with the fiscal views they might hold ? I never hearcl of a State Parliament’ being degraded by the suggestion that such a thing should be done. I hope that those who swear to administer the laws as they find them will always do so. Yet the present Government has buttressed itself by the declaration that it has a protectionist at the head of the Customs Department, the inference being that our Customs laws will therefore be administered in a way which will meet -with the approval of the protectionists. Do the honorable member for Parramatta, and other honorable members on that side, support the Government because they think that Ministers will administer the laws, not impartially, but so as to carry out the wishes of thosebehind them? Such an arrangement does not commend itself to me, and, I think, cannot be supported by honorable members generally, whatever their fiscal faith. No matter whether the amount be smallor large, the principle is the same. Preference should not be given without the authority of Parliament. The honorable member for Parramatta apologized for the Postmaster-General on the ground that only £60 was involved in his action.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– No; I did not.

Mr FISHER:

– The honorable member urged, by way of palliation, that it was not a big matter.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Those who supported this mode of procedure for three years are not the persons who should blackguard the present occupant of the office of Postmaster-General.

Mr FISHER:

– I did not support anything of the sort. It is for Parliament alone to declare whether preference shall be given. I would rather support high protective duties than allow the smallest preference to be given by Executive act. We have been informed lately that the Cabinet are taking the powers of Parliament into their own hands, but they have not any right to do so, especially in matters of this sort. I hope that, as opposition has been offered to this action on both sides of the House, the principle will in future be recognised that no preference should be given by a Minister which has not been authorized by Parliament. I hope to hear the PostmasterGeneral say that he has made a mistake in this matter. To some honorable members it does not appear to matter how Ministers deal with the people’s money in their efforts to maintain office. I think, however, that the action of the Postmaster-General in this matter has set a bad example, and leaves the door open to the worst forms of Parliamentary corruption. If a Minister may give preference to all to whom he pleases, he may give it not merely to local tenderers, but to his friends and cousins to the fortieth degree. Then, if prefer ence is to be given to a tenderer because he is an Australian, why should not preference be given to him because he is a Sydneyite, or lives in Parramatta, or in Lang, or in the district represented by the Minister? The principle would be the same. The only justification for the giving of preference by a Minister is the sanction of the laws passed by Parliament. I would rather give a protection of 50 per cent, by law than give a preference of 1 per cent, by administrative act. It is on that ground that I oppose the present action of the Prime Minister, and I hope that the Government will not attempt to defend it. It can only lead to pernicious practices, and endanger the sound principles of constitutional Government. This Ministry came into power to restore constitutional Government, but the first Act of its Executive was to take away the powers of Parliament, and to interfere with the rights of the people.

Mr JOHNSON:
Lang
Mr SPEAKER:

– I ask honorable members, and Ministers especially, to assist me in maintaining order. The honorable the Postmaster-General is not doing that. It is grossly disorderly to carry on conversation in a loud tone of voice.

Mr JOHNSON:

– The facts of the case, as I understand them, are these : The practice which is complained of has been in vogue for some time past, and was in existence long before the present PostmasterGeneral took over the control of his Department, but the preference which has been given by the present Postmaster-General relates, I understand, only to tenders which were called for prior to his assumption of office, and is being given merely to fulfil obligations which had been entered into by the previous Government. I am assured, however, that it has been decided that preference will not b e given in future, and that all these matters shall be’ considered strictly on their merits. These facts have not been brought forward, though I have every reason to believe that they are within the knowledge of the honorable member for Coolgardie, who moved the adjournment. In suppressing them he attempted to mislead the House.

Mr Mahon:

– I suppressed nothing. I read the Prime Minister’s reply. I ask, Mr. Speaker, if the honorable member is in order in saying that I deliberately misled the House, thus ascribing to me untruthfulness.

Mr SPEAKER:

– I ask the honorable member for Lang to withdraw his statement.

Mr JOHNSON:

– If it be offensive, I cheerfully withdraw it.

Mr Mahon:

– It is offensive, because it accuses me of untruthfulness.

Mr JOHNSON:

– At the same time, I say that the matter has been put before the House in such a way as to mislead honorable members as to the facts. I have no doubt that the Postmaster-General will make that perfectly clear when he rises to reply. The practice complained of was known to exist during the time that the honorable member for Coolgardie and the honorable member for Wide Bay were in office ; but they made no attempt to put an end to it. How can we then take their present expressions of disapproval seriously ?

Mr McDonald:

– Does the honorable member approve of the practice ?

Mr JOHNSON:

– I have expressed my disapproval of it, and I hope that it will be discontinued at the earliest moment possible. At the same time,, I recognise that in the case under discussion it had to be allowed, because of an arrangement entered into by the previous Government. The honorable member for Coolgardie has cast several taunts and gibes at free-traders who support the Ministry in reference to this matter. There is an old fable about people who live in glass houses, and I think the “glass house” of the honorable member for Coolgardie, and those associated with him at the present time, is of such a particularly brittle character that he should be very guarded as to how he throws stones. How does the honorable member for Coolgardie reconcile his position as a free-trader with his alliance with and support of a section of the House whose avowed object is not to let matters rest, but to raise the Tariff as high as possible? That is the question which the honorable member will have to answer to his constituents, and it is just as well that he should be brought face to face with this aspect of the position. How can the honorable member reconcile his conscience with his present association with the honorable and learned member for Indi, the honorable member for Melbourne Ports, the honorable member for Bourke, and others, who are determined to use their efforts to increase the protective duties? Honorable members opposite taunt honorable members on this side with being supporters of the present Ministry ; but I do not see how any free-trader can conscientiously be a member of an alliance such as has been entered into by members of the Opposition - with protectionists whose avowed object it is to increase the Tariff. It must be patent to everybody that this motion is only a piece of bluff - that it is absolutely insincere.

Mr SPENCE:
Darling

– I desire, if possible, to bring honorable members back to the question which is really before us. As a matter of fact, there are two questions, one involving a charge against the Prime Minister and the Postmaster-General of refusing to supply information affecting the administration of the Government, and the other regarding a Ministerial act. So far, the motion has been received most flippantly by both the Prime Minister and the PostmasterGeneral, though no more important question could be brought before us than that submitted by the honorable member for Coolgardie. Neither the Prime Minister nor the Postmaster-General appear to have learned what responsible government means, and it is our duty to instil into them a little knowledge on the subject. The present Government boast of very high aims, and, according to their showing, are about to set an example to all the Governments of the world. Purity of administration is essential where we have a Ministry responsible to the House, and the House responsible to the country ; and in the past we have always accepted as statements of fact replies given by Ministers to questions put either with or without notice. This is the only way in which honorable members can obtain information as to the administration of the Departments, and the honorable member for Coolgardie justly complains that neither the Prime Minister nor the Postmaster-General will reply to these questions. The absence of reply shows that there is something suspicious - that the Postmaster-General has been guilty of something with which I should never have dreamt of charging him. It comes as a surprise that there should have been such conduct as to be disapproved by the Cabinet, but that such is the case is shown by the attitude of honorable members opposite, who endeavour to exonerate the PostmasterGeneral by abusing the honorable member for Coolgardie.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– The honorable member’s speech was nothing but abuse.

Mr SPENCE:

– It does not matter what the honorable member for Coolgardie or anybody on this side may say, the PostmasterGeneral has to see that his conduct is above reproach. It is the duty, though I admit a hard one, of honorable members on this side, to see that the Government steers a decently straight course The honorable member for Parramatta and the honorable member for Lang both expressed disapproval of the action of the’ PostmasterGeneral, but by heaping abuse on honorable members on this side they endeavour to make out that it is not worth while bothering about the matter. To my mind this motion has been received by the Government in a disgracefully flippant way. Both the honorable members I have mentioned seem to fail to realize the responsibility which rests on their shoulders to prevent any conduct which is wrong ; and if they are earnest in their disapproval, why should they seek to condonethe action? We have a right to demand from a Minister a straightforward answer to a question, and it is a new departure to find a member of the Government, particularly the Prime Minister, declining to frankly furnish the House with facts. If regulations have been in existence, of which the present Cabinet disapprove, the members of the Cabinet Have a right to express their disapproval. If a Minister should make a mistake inadvertently, and frankly confess it, I am sure the House would not seek to condemn the Government as a whole. I wish to impress on honorable members the importance of demanding from Ministers frank and truthful replies to all questions, and when we are forced to move the adjournment of the House in order to screw out information, Ministers ought not to laugh in our faces, nor should their supporters attempt to screen the Government by abusing honorable members on this side. We have the taunt thrown at us that this is another motion of want of confidence, but that is merely to distract attention from the main issue. If anything would justify want of confidence, it is the attitude of the Government towards this particular motion. It is self-evident that preferences of this kind are very dangerous.

We have had many revelations as to secret commissions in other walks of life. Personally, I have known secretaries of large organizations receive a commission of 10 per cent, on printing orders given out to certain firms, and this meant increased expenditure, because the more printing the higher the commission. I do not say that we have ever had, or are likely to have, a Minister who would be guilty of conduct of the kind, but the Government ought to be above suspicion. Hundreds of years hence we might have a Minister who would exercise favoritism. As the honorable member for Wide Bay has pointed out, preference of the kind is entirely in the discretion of a Minister, who might give it to some of his best friends. Although I should be loth to express any doubt with regard to the administration of the Postmaster-General, I hope that he will recognise that a policy of this kind has many elements of danger. The fact that the late Government existed for four months with a very keen Opposition in front of them, and that not a finger could be placed upon any flaw in their admifiistration, affords the best answer to the taunts which have been directed at the late PostmasterGeneral. Members of the late Opposition were very eager to discover any little mistake on the part of the late Administration, but they were unable to find one. But now we are told by honorable members, who are acting as apologists for the Prime Minister and for the Postmaster-General, that the late Postmaster-General did not alter certain regulations. They cannot, however, point to any instance in which he gave effect to them, and that fact seems to me to show that he did not approve of them. The present Government are supposed to be setting before us the highest of ideals, and yet they are content to shelter themselves behind the policy laid down by the Deakin Administration. That does not appear to me to be a straightforward or honorable course to adopt, because each Government should be judged upon its own actions. We should not accept any excuse of that kind. If an offender comes before the Law Courts he does not secure his acquittal by pleading that some one else had previously done the same thing.

Mr Reid:

– Of what offence is the honorable member speaking?

Mr SPENCE:

– Of the offence against good government, of which Ministers have been guilty, owing to their having failed honestly and frankly to reply to the questions submitted by honorable members. They are, in effect, by their refusal to make a plain statement, admitting that they are ashamed of something that they have done. If they believe that they have acted rightly, let them say so. If they have become protectionists, and have decided to allow to local contractors an advantage of 40 or 50 per cent, in addition to the protection afforded by the Tariff, honorable members should be made aware of it. Everything should be done in the full light of day, and there should be no suspicion of favoritism or of the existence of conditions which might lead to corruption. I cannot excuse Ministers for the flippant way in which they are treating this matter. The honorable member for Parramatta has expressed himself as amused - amused at something done by the Postmaster-General, of which he cannot approve. I should not regard such a matter as a subject for amusement. I do not think that the attention of honorable members should be diverted from the real issue before them, by the attack which has been made on the hithertp unchallenged administration of the late Postmaster-General. We are entitled to know exactly what has been done by the Minister, andj whether the Cabinet approve of the principle of giving special preference to local contractors. We are also entitled to’ know whether the Government are s’eeking to escape the necessity of supplying information to honorable members. If they are, the sooner we know it the better. We shall then probably have to engage private detectives to find out what is passing in the Departments. The present Government are supposed to be immaculate, and surely they can have no object in keeping honorable members in the dark as to their administrative acts. I trust that the Government will not be permitted to shirk the responsibility which properlv attaches to them in this matter.

Mr.SYDNEY SMITH (MacquariePostmasterGeneral). - I am rather amused at the remarks of some honorable members, and at the indignation which they have expressed upon the assumption that the Government have followed a certain course, which they knew very well had not been adopted. When upon a previous occasion I was questioned upon the matter of preference to contractors, I pointed out that I was merely following the practice laid down bv my predecessors in office with regard to certain tenders.

Mr Mahon:

– That was by a protectionist Ministry.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– I shall deal with that matter presently. What are the facts? In March, or April, of this year, tenders were invited by the Deakin Government for the supply of certain telegraph material. Tenders were received, and submitted to the late PostmasterGeneral, upon the 8th August. At that time the practice under Ministerial decision was that certain concessions should be made, not exceeding 15 per cent, in certain cases, and to 10 per cent, in others, to local manufacturers.

Mr Mahon:

– More than 15 per cent, was allowed in some cases.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– I am quoting from the minutes that were in possession of the honorable member at the time that he dealt with these tenders. They must have been in his possession for four months, and yet he never attempted to interfere with the course which had been taken. The rule to which I have referred was laid down upon the 20th of July last year. The decision of the Deakin Government to grant a preference to local contractors was communicated to the Deputy Postmasters-General in the different States, and was known to various contractors, as I shall presently show. The honorable member for Bourke made a remark the other night which proved that he was aware of that decision. That it was known to various contractors I shall show by a letter which was received from one of them.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– The contractors had to enter into competition in tendering.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– These tenders were submitted to the late Postmaster-Gene-“ ral. The amount of the contracts totalled about£13.600.

Mr McDonald:

– When were they submitted ?

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– They were submitted upon the 8th August, before there was any suggestion of a no-confidence motion being tabled. Instead of deciding whether a preference should be granted to local contractors, the honorable member for Coolgardie wrote a minute.

Mr Mahon:

– Does the Minister himself’ immediately decide all questions submitted to him?

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– The honorable member will be able to deal with that matter at a later stage. I repeat that upon the 8th August the tenders were submitted to him. His decision was thatTenders where no preferences are involved are approved.” He refused to accept or deal with tenders involving any preference.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– He had the matter before him, and shuffled upon it.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– The honorable member had the matter before him, and refused to deal with it in any way whatever. He has affirmed that it was a Cabinet matter, but there is nothing in the papers to indicate that.

Mr McDonald:

– Was not his decision that” tenders were approved where no preference was involved,” equivalent to saying that all the rest were rejected?

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– I do not know. If the honorable member entertained that opinion he should have expressed it. But that he could not have held that view is proved by his reply to a question in this House the other day, when he declared that the matter was reserved by him for a Cabinet decision.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Did not the Minister say a moment ago that the Deakin Government initiated this policy?

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– Exactly.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Then did it not require a Cabinet decision to alter it?

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– I will not say that. In one case the preference granted amounted to 6s. 8d., in another to 18s., and in a third, upon an expenditure of£78, to £2 12s. 6d. The total amount of the preference granted, according to an official return supplied to me, is about £64 13s. 9d.

Mr McWILLIAMS:
FRANKLIN, TASMANIA · REV TAR; ANTI-SOC from 1906; LP from 1910; NAT from 1917; CP from 1920; IND from 1928

– What was the total amount of the contracts?

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– £13,600, but the preference only applied to goods to the value of about £1,700 or £1,800.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– And for the sake of £60 the Minister would give the contracts to Germany, or some other country.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– The honorable member for Coolgardie objects to a preference of 6s. 8d. being granted to local contractors, and the honorable member for Bourke supports his action. No manufacturer has approached me upon this question, and I do not know any of them. When the papers were submitted to me, I asked for the Ministerial decisions which had previously been given. I wished to ascertain the practice which was in force at the time the tenders were invited, which was in March and April of the nresent year. After examining the papers I wrote a minute to the following effect: - “The practice in force under Ministerial decision at the time tenders were invited to be followed.” I merely approved of a preference being granted in cases where tenders had been invited under the practice previously followed. My minute applied only to those cases. There was a certain obligation to local contractors, and I approved of that obligation being respected, as far as their tenders were concerned, but no further. The honorable member for Coolgardie had the matter brought under his notice by an American firm which had tendered for the supply of wire during the previous year. Tenders were invited and received, and, under previous Ministerial decision, a preference of about £1 per ton was sanctioned. In other words, the British manufacturers were given a preference of £1 per ton over American manufacturers.

Mr Mcwilliams:

– Quite right, too.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– The honorable member for Coolgardie declares that we had no right to grant any preference whatever. While he objects’ to giving a local contractor a preference of 6s. 8d.-

Mr Mahon:

– How much was involved? Let the Minister state the amount to the House.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– The contractor to whom I refer drew the attention of the honorable member to the fact that a certain preference had previously been granted, and intimated that if a similar course was to be followed upon the present occasion, he would not tender.

Mr Mahon:

– Did the writer say that a preference of £1 per ton had been allowed, or that it was a matter of a few shillings?

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– He said that it was a matter of a few shillings. Thereupon the honorable member, in his capacity of Postmaster-General, wrote this minute - “ As the writer says the difference in price between British and American wire is small, I think he may be informed that we intend to take the British article.”

Mr Mahon:

– There was no 15 per cent, preference involved there.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– A 15 per cent, preference was not involved, except in one or two cases.

Mr Mahon:

– There was more than 15 per cent, in some cases.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– In one instance, the preference amounted to 6s. 8d., and in another to £2 12s. 6d. The preferences aggregated about £64 upon goods to the value of £1,700 or £1,800. I have merely given effect to the practice in force at the time the tenders were invited. I made it perfectly clear that my decision would not apply to future cases.

Mr Mahon:

– There is no obligation to contractors.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– I repeat that a contractor wrote to the honorable member asking whether it was the intention of the Government to give effect to the practice previously in force, and, in reply, the honorable member informed him that practically such was the case.

Mr Mahon:

– Read the reply.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– I have read it, and it shows that the honorable member was quite prepared to grant a preference, In reply to a question put by the honorable member on a previous occasion, I said that we had not adopted this as a practice to be observed in dealing with future contracts, but that we had merely followed the practice established under the decision of a previous Ministry. The only question submitted to me on taking office was whether the Department was to continue a system put in force during the term of office of the Deakin Government, and continued when the late Ministry took office. The Prime Minister pointed out the other night that each case will, in future, be dealt with on its merits. Occasions may occur when it would be more convenient for us to obtain supplies locally rather than suffer the delay that would take place in obtaining them from the mother country.

Mr Fisher:

– Or more convenient to oblige a friend.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– I do not think that any honorable member will ever be able to accuse this Government of having sought to oblige a friend. The members of the Ministry have been many years in political life, and I defy any one to point to any act of administration on our part of which we need be ashamed.

Mr Fisher:

– But the Government should have a settled policy.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– The late PostmasterGeneral has been very anxious to throw mud. The statements published by the Age, to which he has referred, may have been written by himself, or by one of his friends.

Mr Mahon:

– He was not here at the time.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– The honorable member may have an opportunity to make an explanation in regard to another matter. No doubt he would be prepared to oblige some of his friends.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– But there should be a definite policy in regard to a matter of this kind.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– There should be, if it is possible to adopt one. Our decision applied really to tenders which had been called for prior to our taking office, and the amount involved was only £64. The Prime Minister said in reply to a question put to him a few days ago, that-

No general rule has been adopted. Each case will be judged on its merits-

Mr SPEAKER:

– Order ! The time allowed the honorable gentleman under the Standing Orders has expired.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– I have no desire to trespass further on the time of the House.

Mr ROBINSON:
Wannon

– I am sorry that an interjection which I made while the honorable member for Coolgardie was speaking should have ruffled his usually placid bearing. I had thought that I enjoyed the privilege of his friendship prior to this debate, and I am sorry that that friendship should have been interrupted so tempestuously this afternoon. With regard to the point at issue, I believe that there is a certain degree of misapprehension, and I have risen solely with the object of endeavouring to remove it. When I made inquiry into the matter,I was informed that imported goods supplied under contract to the Commonwealth Government did not pay any duty, and that local manufacturers, in competing for Government contracts, are therefore at a disadvantage under which they do not labour when tendering for private contracts. In other words, if a man tenders to supply imported materials to a private firm in the city, he is called upon to pay a certain duty in respect of those goods, but if he tenders for the supply of imported articles say to the Post and Telegraph Department, those articles, according to my information, do not bear duty. The Barton Government, or the Deakin Administration, fixed about 15 per cent, as representing the average duty paid under the Tariff. That, at least, is the information which was given to me by the honorable member for Melbourne Ports.

Mr Mauger:

– That is the way in which the matter was represented to me.

Mr ROBINSON:

– I have obtained information from other sources that that is so. If my information be correct-

Mr Fisher:

– Will the honorable and learned member tell the House where he obtained that information?

Mr ROBINSON:

– The first to give me this information was the honorable member for Melbourne Ports, who is the secretary of the Protectionist Association of Victoria, and a personal friend of my own of long standing. If the facts, as stated by me, are correct, they place a somewhat different complexion upon this matter. At the same time, I think that the granting of preference should not be indiscriminate, and that it requires’ to be carefully watched. I agree with the honorable member for Wide Bay that it is possible that such a power might be grossly abused. Information ought to be given to both Houses of the Parliament, as soon as it is proposed to grant any preference. If that were done, I, personally, should be satisfied, and I think it would meet the objections entertained by most honorable members. As to the charge that the Government has refused to give information, I do not think that it was levelled seriously by the honorable member who made it, or taken seriously by the House. When the present Government met the Parliament, my honorable friends in the Opposition corner fired political pom-poms at them, their desire being to make a great noise, and to worry them as much as possible. It was not expected that the Government would answer the same question time and again.

Mr Crouch:

– They have not answered this question.

Mr ROBINSON:

– I think that their answer is sufficient for persons of average intelligence. This discussion will have done some good, if it leads to the House being informed whenever preference is being granted. If that course be followed we shall have to thank the honorable member for Coolgardie, and the present PostmasterGeneral, for their efforts in this direction.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– If the explanation which has just been made by the honorable and learned member for Wannon be correct-

Mr Fisher:

– I do not think it is.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I put it hypothetically. If the explanation be correct, it is regrettable that the PostmasterGeneral did not give it in the first place, instead of practically evading a question put to him by one of his most loyal supporters. The duty of a Government towards its supporters is often greater than that which it owes to its opponents. It is perfectly natural that the supporters of a Govern ment should be jealous of any reprehensible departure from a policy which they are supposed to favour, and on the strength of which they are prepared to follow them. I should not have added even five minutes to the time occupied by this debate, if my name had not been drawn into the discussion. I did not think when I asked the questions, to which reference has been made, that they would lead to so lengthy a debate as that which has taken place this afternoon. I should like to say that the honorable member for Coolgardie, who moved the adjournment of the House, has evinced a new-born friendship in coming to my rescue, with the professed object of saving my dignity and consistency. J suppose that the honorable gentleman and I are as wide apart as the poles on every political principle, and I have never detected until now - three years after we first met in this Parliament - any indication that he was prepared to become my champion, because he thought that I had not been properly treated by the Government of the day. I desire to tell the honorable member and all other members of his party that I am quite capable of looking after my dignity, my loyalty to my party, and all other matters of my own concern, without any affected desire on their part to help me.

Mr Mahon:

– It was not altogether a desire to help the honorable and learned member that induced me to take this action. It is a matter in which I am personally involved.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I say that, so far as the honorable member took this action on my behalf-

Mr Mahon:

– I did not take action on behalf of the honorable and learned member; I would not walk two steps at anytime to serve him.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I have not said anything to which the honorable member should take exception, nor have I invited him to say anything unpleasant to me. The explanation given by the PostmasterGeneral seemed to be nothing more nor less than a long-winded tu quoque. He seemed to derive satisfaction from the fact that the honorable member for Coolgardie had done the very thing of which he is accused. That does not justify him at all. I take it, and I speak with Ministerial experience, that when a Minister assumes charge of a Department, and finds in existence there practices which seem to him to involve a contravention of the law, it is his bounden duty to put an end to them on the very first occasion which presents itself. The PostmasterGeneral, in the course of his explanation - which I found very difficult to follow - did not once mention the simple fact which was referred to by the honorable and learned member for Wannon, that, as there is no duty’ upon these goods, he, in giving a preference, was merely extending to them that which the Legislature had provided for in regard’ to other material.

Mr Fisher:

– I do not think that that is so.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– If it be so, it is not an answer, because if the Legislature has seen fit to give a preference on certain goods under certain conditions, by providing that these goods shall enter the Commonwealth free of duty, we are justified in supposing that it did not intend that preference should be given to Commonwealth goods. It is very important that a Ministry should regard seriously any question of this kind asked by a supporter. We have our constituents to deal with. The basis of the party partnership which now exists between the protectionists and free-traders in this House, is the continuance of the status quo with regard to the fiscal question, and we who are free-traders are perfectly justified in looking to the Prime Minister and to his colleagues to see that that status quo is maintained in every way. If I passed over a matter of this kind, being what would be called a very rigid and uncompromising free-trader, and coming from a very strong free-trade constituency, I should be liable to be asked at any time why I tolerated this unjustifiable departure from the limited protectionist policy of the Commonwealth, which is the status quo upon which the coalition has been’ founded. It is the duty of every Minister, when he takes office, to ask himself, not merely, “ What has been the practice of my predecessor?” but “ What are the practices existing in my Department, and are they justified by the Constitution and the laws of the country?” If they are so justified, well and good ; but if they are not, it is his duty to get rid of them/ If a supporter of the Government conceives that a Minister is departing from the recognised principles laid down by the Legislature, he has a perfect right to ask a question on the subject, and there is an obligation upon the Minister, to satisfy his supporter that what he is doing is justifiable, so that that supporter may explain the matter to his constituents in a manner which will be satisfactory to them. The debate has done good - because the PostmasterGeneral evaded my question.

Mr Reid:

– That is the honorable and learned member’s opinion. He cannot finally decide the matter.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– It is not a question of opinion.

Mr Reid:

– I venture to say that it is.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I insist that it is not, and I shall show why it is not. I asked three questions of the PostmasterGeneral. The first was - Whether it is true that he has continued this practice? My second question was - Had he consulted the Cabinet? I wished to know whether his action was independent of the Cabinet, or whether he had taken the trouble to obtain the sanction of the Government of which he was a member for going beyond the legal bounds. My third question was - Whether he could give me any legislative or constitutional authority for the practice? Those were three very simple and very civil questions. I do not say that because I wish to be cheered by the Opposition, but because I expect the support of my party. We have a Tight to ask such questions. But what answer did I receive? The Prime Minister gave a reply to a question asked by another honorable member, which touched the first of my questions, but which did not touch or refer to my second or third question. That is not a statement of opinion, but a statement of fact. If we are sure of our existence, and of the meaning of the English language, we must know that those questions were not answered. As -the Postmaster-General has not done me the courtesy to answer my questions, I have gone to the head of the Government, and I say without hesitation that I shall not stop until I get satisfaction. I shall not support the Government even for an hour unless I can. get civil and satisfactory answers from them on questions of policv.

Mr Reid:

– Has the honorable and learned member had an uncivil answer?

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I have not had any answer yet.

Mr Reid:

– The honorable and learned member - has a question on the businesspaper which I am ready to answer when I get an opportunity to do so. Is it not a little too soon to talk of incivility

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– What I am complaining of is the action of the PostmasterGeneral, and I have sought relief by going to a higher authority. I make no complaint about the Prime Minister’s treatment of my questions, because the opportunity has not yet arrived for him to answer them.

Mr Reid:

– The honorable and learned member spoke of going further, as if my conduct would require him to do so.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Not with regard to my questions. What I complain of is that the Prime Minister turned round upon me, and said that it is a matter of opinion whether the Postmaster-General has properly answered my questions.

Mr Reid:

– Surely it must be. The honorable and learned member cannot be the final arbiter.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

-I do not wish to be misunderstood by the Prime Minister, and I do not wish to misunderstand him. Although I sit in this Chamber, and belong to a party, I am not going to meekly follow the Government in such a way as to sacrifice my principles.

Mr SYDNEY SMITH:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · FT

– No one has asked the honorable and learned member to do so.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I am not addressing the Postmaster-General. I am sure that the Prime Minister would not ask me to do anything of the kind, because he knows too well my political character. As I have already said, I think that the discussion has done good. A coalition Government is always in a very difficult position, since those who support it are liable at any moment to be misunderstood by their constituents, because of their acquiescence in certain acts in the nature of a compromise between the two parties. For that reason I gave notice of my three questions, in order to obtain a denial or a justification which I could, if necessary, pass on to my constituents. I have now gone to the Prime Minister, failing to obtain a reply from the Postmaster-General, as one goes to the High Court from a Supreme Court. The discussion has laid down the principle that legislation is the test of whether a Minister should do this or that in connexion with the work of his Department. The PostmasterGeneral has stated that the matter was only a small one, because in one instance only 6s. 8d. was involved. That excuse reminds me of Marryat’s famous story of the nursemaid who excused herself on the ground that “ It was only a little one.” Whether much or little was involved, the principle is the same, and, as a free-trader, I am justified in seeing that the status quo upon which the coalition was formed is preserved by Ministers.

Mr REID:
Minister of External Affairs · East Sydney · Free Trade

– As my name has been brought into this discussion, I wish to say a word or two, and, dealing with the last matter first, to claim the right to form an opinion in regard to it just as freely as any other honorable member. I wish to show to the honorable and learned member for Parkes why I made the interjection of which he has complained. I think that he has taken rather an unfavorable view of the answer of the PostmasterGeneral, who is not accused, as a rule, of devious practices in the performance of his public duties.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Hear, hear.

Mr REID:

– The honorable and learned member’s first question was -

Whether he has yet submitted to the Cabinet the question of continuing the practice of distinguishing between Australian and European tenderers by giving the former an advantage of 15 per cent, over the latter in their dealings with his Department ?

I had previously answered a question on the subject to this effect -

No general rule has been adopted. Each case will be judged on its merits, with the desire to make use of Australian articles where conditions justify.

There was no necessity to submit the question to the Cabinet. The decision of the Cabinet involved the opposite of that which was asked.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I do not agree with the right honorable member that that was an answer to my question.

Mr REID:

– As a practical man, I suggest that, as a plan at variance with that indicated by the honorable and learned member’s questions’ had been adopted, they were answered indirectly, if not directly. If the practice had been submitted to the Cabinet, that body had evidently not approved of it. A man of the experience of the honorable and learned member for Parkes, who has been a Minister, knows that, as a rule, the deliberations of a Cabinet are not matters for parliamentary inquiry.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– My question, as the right honorable member knows, does not ask for details. As a matter of fact, inspired paragraphs about the deliberations of the Cabinet are published every day.

Mr REID:

– The honorable and learned member’s second question was this -

If he has so submitted the question, have his colleagues approved of the continuance of the practice ?

The practical question was, is there such a practice, and has the Government approved of it ; and my answer, that we would deal with every case. on its’ merits, was an absolute reply to that question.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I- do not agree with the right honorable member.

Mr REID:

– The honorable and learned member’s third question was this -

Can he point to any constitutional or legislative authority for such differential treatment of Commonwealth citizens, on the ground of nationality?

The Postmaster-General is not, like the honorable and learned member, a constitutional authority, and there is, furthermore, a constitutional objection to questions of law being stated1 in Ministerial replies. In the House of Commons it has been held objectionable to ask a legal opinion of a member of the Government.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I wished to know if, from his limited constitutional knowledge, the Postmaster-General could furnish an instance.

Mr REID:

– The Postmaster-General does not profess to have much constitutional knowledge, though he may have a greater amount of it than those who make larger professions. I think that the honorable and learned member’s criticism is not quite fair; though I know that there was no intention to be unfair, because no one is fairer than he. I do not see the honorable and learned member’s point as to the constitutional position. I consider that every Department, in administering its affairs, in calling for tenders and transacting business, has a perfect right to consider matters affecting each tender. Let us suppose that one tenderer is well known to the Department, and has done his work well - that he has been in every respect a satisfactory contractor,’ and has supplied the very thing that the Department has required - and suppose, further, that a stranger tenders at a slightly higher price ; surely in such a case the Department would have just the same right as a private business man would have to distinguish between the tenderer whom they knew and the one they did not know. If we were bound to accept the lowest tender in every case, a number of considerations which would weigh with every prudent business man would have to be ignored.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– My question referred to the establishment of a system of preference.

Mr REID:

– I am quite aware of that, but I am addressing myself to the constitutional point. The Constitution is arbitrary, or, at any rate, is not very flexible, and if no preference is allowed by the Constitution, the Minister can. have no discretion in the matter. I think, however, that the decision of the Government will commend itself even to the honorable and learned member.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– What is the decision ?

Mr REID:

– It would be impossible to arrive at a satisfactory decision that would be accepted by my honorable friend. His fault with the decision will be that it does not afford any opportunity for working mischief. Our decision is that each case shall be judged on its merits, and we claim to be judged upon our administration, and upon what we do. When anything is done by the Government which calls for censure, we shall be prepared to accept that censure, but we do not expect to be censured beforehand for something that we might possibly do.- I quite agree with the honorable and learned member for Parkes, that if any standard of preference were adopted as a principle, it would be utterly pernicious, even though it were constitutional.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Hear, hear.

Mr REID:

– If such a principle were adopted, and our local tenderers knew that a margin had been established, a premium would be offered to them to put the prices up against the public. No business man would be a party to such an arrangement. I believe that, in one of our Departments - I do not .want to mention names - some tenderer was asked to quote a price for a certain article, and he sent in a certain price, and expressed the hope that it would be found to be within the 15 per cent, preference, which he understood was granted to local tenderers.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– That shows that there was a wide-spread impression that preference was being given to local tenderers. ‘

Mr REID:

– It proves that if any fixed rate of preference were given, a most unbusinesslike and pernicious principle would be introduced into the Government Departments.

Mr Mauger:

– It has been introduced.

Mr REID:

– Then, I am not going to be a party to it.

Mr Mauger:

– The honorable and learned member for Ballarat said that it was introduced.

Mr REID:

– No. I think that an injustice is being done to the Deakin Government. I have made some inquiries, but I cannot obtain full information. I believe that no Government in Australia has ever fixed 15 per cent, as a preference, but I believe that it was arranged by the Deakin Government that no Department should, under any circumstances, or for any reason, give a preference of 15 per cent, without bringing it before the Cabinet ; that no Minister, even though he might be actuated by the “best reasons in the world, based, perhaps, upon consideration for the way in which a contractor had done his work, or for the character of the articles supplied by him, should be allowed to use his discretion to the extent of giving preference beyond that rate, without biinging the matter before the Cabinet. That is my impression as to what was done. [Debate interrupted. Business of the day called on, under standing order119.]

page 5757

MANUFACTURES ENCOURAGEMENT BILL

Second Reading

Debate resumed from 18th October (vide page 5702), on motion by Sir William Lyne -

That the Bill be now read a second time.

Mr GROOM:
Darling Downs

– As I have already addressed the House upon the subject of this measure, it is not my desire to speak at any length on the present occasion. I wish, however, to emphasize one or two points. A certain amount of feeling has been engendered with regard to the method by which this Bill has been placed before us ; but I hope that honorable members will be able to decide this question apart from any feeling that may have been betrayed, and upon the absolute merits of the Bill itself. Some misconception seems to have arisen as to what will be the effect of passing the Bill. I only mention this matter because I gather from the questions which have been addressed to me that the idea prevails that if the Bill were passed in its present form it would have the effect of immediately imposing duties upon certain imports. That, however, is a mistake. The provision made in Division VI.a of the Tariff is fairly explicit. It reads as follows : -

To come into operation on dates to be fixed by Proclamation, and exempt from duty in the meantime, except as to iron galvanized, plate and sheet. Proclamation to issue, so soon as it is certified by the Minister, that the manufacture, to which the Proclamation refers, has been sufficiently established in the Commonwealth according to the provisions of any law relating to bonuses for the encouragement of manufactures, or to the establishment of manufactures under the direct control of the Commonwealth or State Governments, hut he Proclamation to issue, except in pursuance of a joint address passed on the motion of members by both Houses of Parliament, stating that such manufacture is sufficiently established.

Inasmuch as it was not desirable at first to impose import duties upon raw materials used in other industries, it was enacted that during the currency of the bonus that should be the only encouragement given to the iron industry. If, after the expiry of the period mentioned in the Bill, it is proved desirable to the satisfaction, not of this House, but of both Houses, we can, by means of a joint address of both Houses, impose the duties here mentioned. Before that, however, we should require to fully and freely discuss the matter. Honorable members would demand evidence that the industry had been established in the Commonwealth to such an extent that any import duty upon iron products would not unduly hamper any other industry, of which pig iron is the raw material. I look upon this measure as designed to give us the first instalment of a bonus system which will apply throughout Australia for the encouragement of primary production in all branches. I hope that this is the beginning of a system which will enable us to establish the cotton industry in Queensland.

Mr Mcwilliams:

– Can that industry be carried on by means pf white labour?

Mr GROOM:

– Yes, experience gained in earlier days showed that cotton could be grown in Queensland by white labour. The industry was carried on entirely by white labour, and flourished for some time. At the present time the Queensland Agricultural Department is, distributing large, quantitiesof cotton-seed to small farmers, and there is every prospect that the industry will be re-established before very long.I believe that it could be successfully established beyond all doubt if a Commonwealth Department were instituted, which would supervise the operations of the growers, and, if possible, afford some encouragement by way of bonuses until the industry could be placed upon a satisfactory footing. I am supporting this measure upon the distinct understanding lhat the principle which we are now adopting is to have a general application, and that whenever there are prospects of establishing large industries which are likely to become of national importance we shall regard it as our duty to afford them encouragement by means of bonuses. If I were of opinion that the great powers which we possess as a Commowealth could not be exercised for the encouragement of manufactures, and1 for giving assistance to those engaged in primary indstries, I should see no advantage in the Commonwealth Constitution. The people of Australia were impelled to establish a Commonwealth in order that the Parliament might assist in building up a real nation. That object cannot be achieved by merely passing uniform franchise or postal laws. We are called upon to exercise all those powers that really belong to us - to build up our industries, to establish our citizenship upon a sound basis, and to perfect our defences. We can best render effective assistance to the great Empire to which we belong by showing that we are able to stand absolutely alone in time of stress. I regard this matter from the standpoint of national defence. We occupy a peculiar position with regard to. the British Empire. A great deal of interest is now being centered round the great Eastern question, and we know that Great Britain is looking to Australia as a base of supply. If by encouraging our industries, we can show her that we have great supplies of coal and iron for the purposes of manufacturing munitions of war, and that we have skilled artisans engaged in the iron industry, we shall have fulfilled a great Imperial duty. Therefore, it is a matter of national importance that the iron industry should flourish upon this Continent. My support of the measure is not based upon fiscalism, but upon the necessity of our being independent in regard to the supply of munitions of war. Under the arrangement into which we have entered with Great Britain, we have agreed to contribute to the support of a Navy which shall be at the absolute disposal of the Empire. I do not propose to criticise that arrangement, although I do not agree with it. If we can ‘ expedite the establishment of a small-arms factory, and also the manufacture of munitions of war, we shall render great service to the Empire. To establish the merits of this particular proposal it seems to me that we require to demonstrate several propositions. In the first place, we must prove beyond doubt that in Australia we nave all the materials which are essential to the manufacture of the best steel. The second proposition which we must demonstrate is that we possess a market of sufficient magnitude to justify us in establishing the iron industry. In the third place, we must show that there is some need for holding out an inducement to persons - by means of, the granting, of bonuses - to embark upon this enterprise, and that it is impossible to achieve that end by any other means. Lastly, we must be in a position to prove that, by the establishment of the iron industry, we shall confer a great national benefit. I propose to address myself to these four propositions. In. the first place, let me ask, “ Have we in Australia all the natural means essential to the production of the best iron ore”? Beyond all doubt we have. Incidentally, I shall refer to a few of our iron deposits, so as to place upon record what our resources really are. The fact has been conclusively established that we possess large supplies of limestone, of iron ore, and of coal suitable for coking purposes. When we come to examine the matter, it will be found that we have an abundant supply of other substances, such as wolfram, which are essential to the manufacture of the best steel. From the evidence given before the Commission which investigated this matter, I learn that in New South Wales alone there is, roughly speaking, no less than 59,317,000 tons of ore available. Of course it is not all to be found in one deposit - it is scattered’ about - and is of varying qualities. But the Government Geologist himself is of opinion that there is enough natural ore in New South Wales alone to supply the requirements of the Commonwealth for the next sixty years. Then, if we pass to Tasmania, where at the present time the most practical deposit exists, we know that at the Blythe River, there is a deposit which the Government Geologist of that State estimates at 25,000,000 tons of marketable ore. He adds that that estimate represents only the surface measurement, and that it is quite possible - when the resources of the island are opened up - that the experience of the United States will be repeated, and that his calculation will be considerably exceeded1. He considers that that deposit in itself will produce 15,000,000 tons of metal. In South Australia, at the Iron Knob, there is a deposit which is estimated at 1,000,000 tons of ore, and at the Iron Monarch, another, which contains 20,000,000 tons. Some of this South Australian ore is already being used by the Broken Hill Proprietary Company for purposes of its own.

Mr Hutchison:

– Yes, many thousands of tons. Moreover, the Angaston district contains the finest ore to be found in Australia.

Mr GROOM:

– I propose to confine myself to the deposits mentioned by various witnesses who were examined bv the Commission. In Western Australia deposits are certainly to be found, but according to th-j evidence, it is open to doubt whether they possess a commercial value.

Sir John Forrest:

– There is an enormous quantity of iron ore in that State.

Mr GROOM:

– The same remark is applicable to Victoria. Undoubtedly, there are deposits in this State, but the evidence tendered by the various witnesses does not enable us to speak definitely as to the quantity of the ore. In Queensland, there is one mountain - Mount Leviathan - which is estimated to contain 11,500,000 tons of ore:, and according to the report of the Government Geologist, it consists of the purest possible ironstone. Unfortunately, its position is somewhat inaccessible, and therefore its resources could not be immediately availed of. At Iron Island there is another deposit of about 2,500,000 tons of ore. Indeed, large supplies are reported to exist all over the northern State. Since the Commission investigated- this matter, the Queensland Government Geologist has caused an inquiry to be conducted into the iron deposits of that State. That inquiry is still proceeding, and I am in receipt of a telegram from the officer in question, in which he says that these deposits are of a very substantial nature indeed. It is obvious, therefore, that throughout the length and breadth of the Continent there are enormous deposits of iron ore, which only need the quickening touch of capital to be converted into a very useful asset. The evidence taken by the Commission shows that our coal deposits, as far as at present appears, are chiefly to be found in Queensland and New South Wales. The New

South Wales coke has been shown to be of a very high-class character. The evidence of various witnesses revealed the fact that there is practically an unlimited supply of coal in Queensland. At the Styx River there is an area of 150 square miles of coalbearing country, situated twenty-two miles from the coast, which contains good steaming coal, and the coal makes very fine coke. At the Dawson River there is a deposit of semi-anthracite coal, which is situated 120 miles from port. It outcrops for a mile, and the seam is 9ft. 6in. thick. At the Mackenzie River, which is eighty miles from Broadsound, and 140 miles from Rockhampton, there is a deposit of good coking coal. The seam is 20 feet thick, is proved by outcrop to be ten miles in length, and is estimated to contain 200,000,000 tons of coal.

An Honorable Member. - Whose estimate is that?

Mr GROOM:

– It is that of the Queensland Government Geologist. As the result of recent investigation, it has been discovered that the Dawson River and Mackenzie River coal deposits are very much larger than was previously anticipated. In the Callide field, which is situated fifty-three miles from Gladstone, it is estimated that there are considerably more than 50,000,000 tons of coal. It is a non-coking coal, but is, nevertheless, considered a good steam coal. In the Burrum mine, which is some thirteen miles distant from Maryborough, coking coal exists in four seams, aggregating 16 feet thick. This coke is being used at the Aldershot and Mount Perry furnaces for smelting purposes. A plant has recently been erected at Howard, which is said in the Mines Department report to be superior to any other in Queensland. At Ipswich there are very large deposits of coking coal, which appears to make better coke than any other coal produced in Australia. I have no .desire to labour this aspect of the question. I think I have shown clearly that Australia possesses enormous deposits of coking coal, which are fit for consumption, in any iron works which may be established. Then, again, we possess almost unlimited limestone supplies all over Australia. The other metals of value in the manufacture of steel are manganese, wolfram, and molybdenite. At the present moment we are exporting valuable metals to Germany for the purpose of manufacturing the highest class of steel. That seems a most extraordinary condition of affairs. We are actually sending away from this continent the very metals which we require ‘o manufacture the highest class of guns required for defence purposes. Moreover, there exists in Queensland tremendous deposits of wolfram. I would further point out that manganese is to be found in various parts of Australia - for example, in the north and south of Queensland - and so also is molybdenite. From what I have stated, it is apparent that in Australia we possess great natural resources, which are lying idle and merely awaiting development. Seeing that we have these natural resources, is there any market in the Commonwealth which would justify us in establishing the iron industry? Paragraph 8 of the majority report of the Commission - which is not dissented from by the minority, and which is based upon the Customs evidence - reads as follows : -

The following are particulars of the annual average of iron and steel imported into the Com- mon wealth during the five years ending 31st December, 1902 : -

I think it is fair to estimate the value of our imports by the imports of the five years immediately preceding the appointment of the Commission. The paragraph continues -

Pig iron, 32,046 tons, valued at £120,963.

Bar and rod, 59,849 tons, valued at £525,965.

Scrap, 8,431 tons, valued at £30,130.

Galvanized iron, 45,295 tons, valued at £773,666.

Plate and sheet, valued at £151,947

Rails, valued at £401,675.

Wire (plain), valued at £312,755

Wire (barbed), valued at £60,449.

Wire netting, valued at £70,610.

Pipes, valued at £304,935.

The annual average value of iron and steel machinery imported during the same period was £1,764,044.

It is clear, therefore, that Australia is importing enormous quantities of material which could be. produced locally. We might perhaps omit machinery, which represents£1, 764,000, because some of it might be covered by patent rights. It is undeniable, however, that an enormous quantity of imports in the shape of machinery could be manufactured locally. Consequently, it appears to me that I have established the second proposition, namely, that in Australia there is a large consumption of articles which are the products of native ore,’ and the manufacture of which would keep large works employed here. Our third consideration should be, “ Is there any reason why we should grant bonuses in order to encourage the establishment of the iron industry”? I maintain, upon the evidence before us, that there is an absolute necessity for us to do so. To my mind it is clear that we must guarantee those who are prepared to invest their capital in this enterprize against loss during the initial stages of their operations. They require a guarantee that there will be some return from the investment, which they are asked to make in the Commonwealth. They need these bonuses, because in the initial stages of every great industry a certain degree of loss occurs, owing to the facts of its being established in a new country, under new conditions, and possibly under new management. Early experiments frequently result in loss. In many industries it is the pioneer who suffers, and others who subsequently take them up are able to profit by his experience. All that is asked is that a bonus shall be given as a certain security to those who are invited to invest in the industry during its initial stages. Another reason for the proposal is that a bonus is necessary to attract capital to Australia. The capital which is available for this purpose is usually drawn to old-established centres, where iron works are in operation. In support of this view of the question, I shall read a statement from the evidence given before the Royal Commission by Captain Richards, of Rockhampton. I should like every honorable member, who has the time to spare, to read the evidence given by this gentleman, who is a mining expert,employed at the Mount Morgan mine. He was trained in the first instance at the Ballarat School of Mines, and ultimately went to Queensland, where he has proved himself to be an expert of very high authority. Some time ago he went to the United States of America, and whilst there spent a considerable time in investigating ‘the iron industries of that country. He had seen deposits of iron in Australia, and desired to ascertain whether it was not possible to utilize these great sources of wealth for the national good. Captain Richards directed his special attention to this matter, and placed the results of his investigation before the Royal Commission at Brisbane. The following is an extract from the report of his examination: - .

Will ypu tell the Commission how you arrive at the conclusion that capitalists will want a bonus when the selling price, according to your figures, is £4 135. ? - One reason is that in the United

States there are more millionaires, and they have vetted interests in property, railways, factories, and so on, and the development of the iron and steel industry adds to the value of these properties. Similar conditions prevail in England and Germany, and, in addition to this, the people of those countries prefer to see their own industries go on ; they prefer to put their money in their own country rather than in a country far away.

It will thus be seen that Captain Richards indicated that capital is attracted to those places in which confidence is, to a certain extent, inspired by the fact that good results are being achieved. It is therefore necessary, if we wish to induce the investment of capital in this industry in Australia, to give encouragement in the way proposed in .this Bill. The giving of a bonus would appeal to the capitalists in another way. It would lead them to say, “ If the great people of Australia are prepared to give a certain bonus, in order to induce us to establish this industry in the Commonwealth, it is an indication that they have confidence in .their own resources. It shows that they are prepared to guarantee the extent of their resources, knowing very well that these stores of wealth are in existence, and that by the establishment of the industry, the Commonwealth, as a whole, will be materially benefited.” While on this point, I would also refer to the evidence given by Mr. Jamieson when before the Commission. At page 33 of the report, the following statement, which was made by him, appears : -

Do you attach much importance to the bonus? - Of course I do. To some extent it assures any works which may be established and which produce a good article against initial loss. It must b; remembered that the establishment of large iron works in a new country is, after all, a very experimental undertaking, and that very often mistakes are made which cannot be foreseen. Mr. Darby at first proposed that we should erect furnaces capable of treating 500 tons per day. In this connexion it is well to remember that it would never do to depend upon one furnace alone. Two furnaces are absolutely necessary. It would be fearfully expensive to have to allow the only furnace which a mine possessed to run down. These furnaces are very often 80 or 90 feet high, and are brick-lined inside. At any time an accident might happen, and to repair it would cost an immense turn. Very frequently mistakes do occur in the initial stages of the operation of big works. Consequently, it has been the custom all over the world to grant a bonus and impose Customs duties ii connexion with the creation of the iron industry.

He emphasized the point which I have mentioned, that it is absolutely necessary for the Government to grant a certain bonus as an insurance, so to speak, against loss during the experimental stages in the establishment of the industry. At page 54 of the report of the Commission, honorable members will find the following statement, which was made by Mr. Sandford, in answer to a question by the Chairman: -

You have seen the proposals of the Government as embodied in the Bonuses for Manufactures Bill. Do you think that the proposals for granting bonuses on the terms mentioned would assist the establishment of the industry by inducing the investment df capital in these works? - Certainly; and we should never get capital for the industry without some such encouragement. I can ask members of the Commission whether, if they were in a position to put £100,000 into this industry, they would be prepared to do so without any encouragement? People are the same all over the world, and before they put money into a thing they want to know how their capital will be secured.

Mr Johnson:

– Does not that apply to every industry ?

Mr GROOM:

– It may apply to a great many. The. iron industry is one of great national importance, and one which, irrespective of fiscal theories, we must endeavour to establish in the interest of the Commonwealth as a whole. I have given the reasons why it is essential that we should grant these bonuses, and they may be readily summarized. They must be given in the first place, because capital needs some return, and will not come here unless we guarantee a return ; in the second placet they must be given, because this is an experimental movement, and bonuses are, therefore, very necessary by way of insurance; thirdly, the granting of bonuses is a guarantee to the people across the seas that we have confidence in our own resources; and, fourthly, by granting them we shall conserve our own interests, because they will be given only upon the absolute production of the article within the Commonwealth. It has been suggested that we are proposing to vote an enormous sum of money, and that, if we do so, we shall interfere with the finances of the States. That is a contingency which is not likely to arise. The bonuses will not interfere with the finances of the States for at least twelve months, and they will not be granted in one lump sum. As the experience of Canada has shown, they will extend over a certain number of years. Let me give the House- some figures show ing how the system has worked there. In 1884 the bonuses paid by Canada amounted to 44,090 dollars; in 1885, to 38,655 dollars; 1886, 39,270 dollars; 1887, 59,576 dollars; 1888, 33..314 dollars; 1889, 37,234 dollars; 1890, 25,697 dollars; 1891, 20,153 dollars; and in 1892, 30,294 dollars.

Mr Poynton:

– What do they now pay?

Mr GROOM:

– The bonuses paid in 1903 amounted to 670,340 dollars. The system will expire after a certain time.

Mr Poynton:

– Nearly twenty years have elapsed since the bonus was first given by Canada, and still the manufacturers want it.

Mr GROOM:

– It is possible that they are still justified in accepting the bonus. I believe that, by reason of the great distance which separates us from other centres of competition, the experience of Canada will not be repeated in Australia. We have to remember that the Dominion is in close contact with the United States of America, one of the greatest iron-producing countries in the world ; that the cost of carriage from the iron centres in the United States to Canada is very slight, and that Canada is not separated by any great distance from the old country. In Australia we certainly enjoy a natural protection in the shape of the distance which separates us from other centres of iron production, and that is one reason why I hope, as many of the witnesses examined by the Commission predicted, that in the long run the industry, if established in Australia, will be able to carry on without the bonus system. I strongly urge that it is necessary at the present time to grant bonuses in order to induce the establishment of the industry. Once it has been started, I believe that its own results will be sufficient to enable it to carry on. One rather important feature of the consumption of iron yet remains to be stated. Having regard to the population of the world and the way in which civilization and its influences are beginning to extend, it seems that the consumption of iron in the future will be almost unlimited. There appears every probability that the great eastern nations will “consume very large quantities, and we have therefore to look to the future. We see that the consumption of iron all over the world is expanding. There is an extension of invention. We have, for example, the expansion of the railway system, with a consequent extension of the use of steel, and labour-saving plant and appliances, requiring the manufacture of machinery, are coming into use all over the world.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– We are living in an iron age.

Mr GROOM:

– Quite so. We have certainly passed the stone age. I have some figures showing the expansion which has taken place during the last few years in the production of iron, and they should give some indication of the extent to which the consumption of that article is likely to increase. At page 204 of the Statistical Year-Book of Canada, there is a table showing that the world’s production of pig iron in 1894, was 28,672,000 tons ; in 1895, 32,120,450 tons; 1896, 32,724,414 tons; 1897, 36,631,437 tons; 1898, 39,580,031 tons; 1899, 44,519,682 tons; 1900, 45,248,000 tons; 1901, 45,256,960 tons; and in 1902, 49,072,065 tons. These figures show that the use of pig iron is steadily growing. In that lies our hope, because, so far as the United States and other iron-producing countries are concerned, the question is how long their deposits of iron ore will last. In Australia, however, we have tremendous deposits, and I believe that in a few years, if we can successfully establish the industry, we shall be able to take up the task of catering for a considerable proportion of the world’s consumption of this great and useful product. In Canada and other countries, a continuous system of bonuses has been followed, and that system undoubtedly led to the manufacture of pig iron in the Dominion. The total production of pig iron made from foreign ores in Canada in 1903, . was 274,740 tons, while 46,450 tons were made from local ore. In Australia we propose to give encouragement only in respect of the manufacture of pig iron from Australian native ore. I have shown already that we have enormous deposits of ore, and we ask . for no bonus on the manufacture of pig iron from foreign ore. What we want to do is to assist the miners in the various States by opening up and developing our large deposits of ore, to assist our shipping companies by giving them the business of carrying ore from the mines to the place of manufacture, to assist our coal miners by increasing the demand for coal by using it for the manufacture of iron, and to assist all who. are engaged in producing the accessory minerals which are required for smelting. I believe that by providing local supplies of Dig iron, we shall also largely assist manufacturers of various kinds. Manufacturers who use iron do not wish for the imposition of a duty upon their raw material until it has been clearly demonstrated that we can supply the market with locally manufactured iron, because, otherwise, the price of their raw material would be increased. It would, however, be of great advantage to them to be able to obtain supplies locally, because that would avoid the necessity for .keeping in stock large quantities of pig iron, and thus of having so much dead capital. Furthermore, they would be sure of their supplies if they could fall back upon the local furnaces for all that they needed. From all these points of view, the establishment of the iron industry here should be of great advantage to our people. In Australia we ought to have a great manufacturing population, and the study of industrial occupations shows that the greatest amount of inventive genius and artisan skill is brought to play in the manufacture of iron and steel. I think that we are not wanting in natural resources of that kind. Our young people have proved themselves capable of undertaking the duties imposed upon them by various kinds of industry, and if the iron industry were established here, I am satisfied that they would soon show their skill in connexion with it too. At the present time, young fellows whose talents have a bent in that direction are prevented from properly employing them. It is, however, a waste of material, and almost a crime to the country, when- men who have great inventive genius are compelled to perform comparatively servile duties. If industries are not established in the Commonwealth, our young people cannot engage in them. Once they are established, however, they will bring into play the natural talent which honorable members, whatever their fiscal beliefs, will admit exists among young Australians. When the possibilities of the iron industry in Australia are considered”, the arguments in1 favour of granting a bonus for the production of iron becomes still stronger. We must look to a great expansion of our telephone and telegraph systems, and the need for wire and iron that that will bring about; to irrigation, and the need for iron pipes for conveying the lifegiving power to our arid soils ; to the need for more railways to open up otherwise unavailable land, and the rails and other material which will be required to make them. The States Governments will for many years to come use large quantities of iron,” and this could be produced from the native ores of Australia. If some guarantee could be obtained from the Governments of the States that they would use only locally produced iron, it would be of great assistance in starting the industry ; but we know that Governments change, and political opinions alter, and therefore I think it would be better not to rely solely upon such assistance. What is needed is security for a return upon the capital invested, and I think that that can best be given by a bonus. Then the agricultural development of the country will require the use of immense quantities of iron for the manufacture of harvesting and other machinery, while in every other direction there will be an unlimited demand for it. Therefore we who support the measure ask that an exceedingly moderate bonus shall be offered to give an inducement for the starting of the iron industry. Our national life is only just beginning ; but ‘ let us show that we have confidence in the Commonwealth which we are here to govern. Let us tell those who are now being trained in our technical colleges and schools that there will be openings for the employment of their talent. Let us give similar encouragement to the young fellows in our mining schools. I think that the establishment of the industry, and the natural expansion of trade which will follow, will induce the investment of further capital. But, above all, it is essential, in the interests of the defence of Australia, that the industry should be established. So eager am I for its establishment that I am willing to bow to the opinion of the House as to whether it should be carried on by the Commonwealth, by the States, or by private individuals. I should like to see the Bill carried as it stands, leaving it open to any one of those parties to establish the industry, and to secure the bonus. I am prepared to grant the bonus to any State which is ready to pass the requisite legislation, and to undertake the work, and I am also ready to consider the question of leaving it open to the States for a period of two years to accept the Commonwealth offer. But, at the end of that time, if none of the States have come forward, private enterprise should be given an opportunity, so that there may be some finality. I do not think that there is any likelihood of the Commonwealth being able to undertake the work. The Attorney-General of the Barton Ministry, the honorable and learned member for Ballarat, gave the following opinion on the subject - it will be found in appendix E to the Commission’s report : -

In my opinion no such power is included in the express gift of legislative power to the Federal Parliament. The trade and commerce power, vast though it is, does not appear to extend to production aud manufacture - which are not commerce.

Commerce only begins where production and manufacture end. See Kidd v. Pearson, 128 U.S., 1, 20. . Moreover, the fact that the trade and commerce power is limited to external and Inter-State trade and commerce indicates that the power which the States undoubtedly possess to undertake Government industries within their own limits is not shared by the Commonwealth under this sub-section.

Under sub-section I.,II., and III., taken together (trade and commerce, taxation, and bounties), the authority of the Commonwealth over industrial development is of the largest ; but, though it allows of control, regulation, and guidance, it in no respect points to direct establishment or management of any industries. Nor can I find in any other part of the Constitution any express authority for the course suggested. The implied powers of legislation remain to be determined, but include (under sub-section xxxix., of section 51), matters “ incidental “ to the exercise of the express powers.

If, for instance, we thought it necessary to establish a small arms factory as an auxiliary to our defence power, or to build a railway for the purposes of defence, we have the power to manufacture the iron or steel required for those purposes. But there is great force in the opinion which I have read, that we have not the power to enter upon the general business of producing’ iron and steel. I do not desire to say anything more on this subject. My views are embodied in the report of the Commission, to which my name is appended. I hope that the proposal will be discussed on its merits, and that even honorable members who feel strongly on the question of free-trade will, in this instance, allow the national welfare to take first place.

Mr Lonsdale:

– We always do so. Why does the honorable and learned member make such insinuations ?

Mr GROOM:

– I did not mean to make any improper insinuation. Adam Smith, who was opposed to restrictions on liberty, nevertheless favoured the English navigation laws, because he considered them necessary in the national interests. In the same way, I think that free-traders would consider the national interests of Australia by voting for the proposed bounty.

Mr Lonsdale:

– I do not recognise Adam Smith as an authority.’

Mr GROOM:

– I am afraid that the honorable member does not recognise any one’s authority, except his own.

Mr Mcwilliams:

– The question of finance must be considered.

Mr GROOM:

– Yes ; I have referred to that. I ask if it is not advisable that we should establish the iron industry here for the defence of Australia, and. to give a basis of supply for the old country ; be cause the greatest service that we can render to the Empire is to build up our industries so strongly that if we are ever isolated, we shall be able to stand alone.

Mr JOHNSON:
Lang

– No one will deny that there are practically unlimited deposits of iron ore throughout Australia, and that they should be utilized, if it is practicable to utilize them. But there axe differences of opinion as to the best methods to adopt to bring about their utilization. Like every other project that has for its object the diversion of the proceeds of taxation from its legitimatepurpose, that of ministering to public needs, into the pockets of certain persons for purposes of private gain, this is based mainly upon the plea that it will afford a large amount of employment. We do not hear anything as to the large extent to which the dividends of the lucky shareholders will be swollen. I have no objection to the establishment of the iron industry on a legitimate basis, but I recognise that we are now being asked to put our hands into the public purse, and to apply moneys contributed by the taxpayers, not to some public purpose, but in such a manner as to swell the dividends of investors in a private enterprise. I have a strong objection to that kind of thing. I am averse to the proceeds of taxation being diverted from legitimate public purposes at any time. It may, perhaps, be advisable in some cases to offer bonuses with a view to promoting national interests, but I do not regard this proposal as coming within the category of such cases. I believe that the honorable member for Eden-Monaro is actuated by the worthiest motives.I believe that he has not any personal ends to serve, but is prompted by a spirit of patriotism. But in my opinion his point of view is a mistaken one. He stated that the bonus was intended merely to give the industry a start, and that when it was fairly placed upon its legs, the Australian iron would, no doubt, be sold at a cheaper rate than the imported article. He said further that the bonus was required to protect the Australian wage-earners. Just so. Against what are the wages of the Australian worker to be protected. Against competition. What competition? Continental competition chiefly. What need is there for us to protect our workmen against continental competition when we know that the wages paid to continental workmen are much lower than those prevailing in Australia? The bonus, according to the honorable member, is expected to bring about an increase in the wages of the Australian workman-, and to, at the same time, enable the Australian product to be sold at a price cheaper than that asked for the imported article. How could these two objects be simultaneously achieved by such a means? How could it raise the wages of the workmen, and at the same time cheapen the local product ? A great measure of protection is already afforded to the iron industry naturally by the cost of conveying iron from Europe and America to Australia. . That should be sufficient. I am satisfied from independent inquiries I have made that the iron industry could be profitably engaged in without any protective duty, or bonus, or other artificial aid. Why should the public be called upon to contribute to an enterprise in which they are not to be partners? It has never been denied that the whole of the profits derived from the industry will be absorbed by those who invest their capital in it. If they are going to take all the profits, let them also accept all (.he risk of loss. If we are to bolster up the iron industry by means of a bonus, which, according to several experts, will be ineffective unless fol- lowed by the imposition qf protective duties, why should we not give the. same support to every other, industry ? Where are we to draw the line? It has been pleaded that this is a national industry, but I would point out that all industries are more or less national .in character, because they all represent some elements of wealth production, afford employment to the people, and yield a return upon the capital invested in them. Thereby they contribute not only to the profit of the individual, but to that of the nation at large. Therefore, if we are to grant a bonus to the iron industry, why should we not extend the same consideration to others. Our wool growers, coal-miners, and stock-breeders, and others, would have quite as’ strong a claim upon us. It has already been indicated that this proposal is to be only the beginning of a system of granting bonuses. The honorable and learned member for Darling Downs made that sufficiently clear, and expressed a hope that we would recognise the propriety of offering a bonus for. the encouragement of the cotton growing industry in Queensland. If this kind of thing is to go on, the time may come when it will be regarded as perfectly legitimate to devote, the greater portion of the money raised by taxation to the purpose of increasing the gains of private individuals. I know that both protection ists and free-traders may conscientiously support the granting of certain kinds of bonuses. There are, however, bonuses and bonuses, and some of them are distinctly protective in their incidence. I. grant that bonuses possess one advantage over protective duties, inasmuch as we can ascertain the exact extent to which the public are asked to contribute under them. Under a system of protective duties we can never tell how much the public are required to pay. It has been, admitted that the bonus itself will not be sufficient to establish the iron industry. At the end of the bonus period, it is proposed to levy protective duties, ranging from to .20 per cent. So that those who believe in the doctrine of free-trade are being asked to commit themselves to the payment of bonuses, with the full knowledge that such bonuses are to be followed by protective duties.

Mr Higgins:

– Does the Prime Minister agree with that view?

Mr Reid:

– I agree with a good deal that the honorable member has said.

Mr Higgins:

– But does the right honorable gentleman agree that protective duties must be imposed after the bonus period has expired ?

Mr JOHNSON:

– I say that it is clear from the statements of honorable members and from the evidence given before the Bonus Commission, that protective duties are expected to be imposed after the bonus period expires. I believe that the whole proposal is unnecessary, and that the iron industry could stand by itself without artificial aid of any kind. I say, further, that if investors do not find sufficient inducement to carry on the industry upon ordinary commercial lines, we should not permit the Commonwealth Treasury to be used to bolster it up. I have never heard of . any protective system, or of any system of bonuses that has resulted in permanently raising the wages paid to the workmen in any industry. The honorable member for Southern Melbourne told us that the proposed bonuses and protective duties were intended, primarily to bring about an increase in the wages of the men employed in the industries affected, and he claimed, further, that the establishment of the iron industry would solve the unemployed problem. This is the same old story that has been told from time immemorial, and proved since the beginning to be an utter delusion and a snare. Whenever an application is made for support for any particular industry we are told that it is intended merely to give it a start. I would ask honorable members, who has ever heard of any industry started under such conditions reaching a stage at which it could afford to dispense with State assistance ? No such case has come within my knowledge. Therefore, I am justified in supposing that we shall be called upon to grant more and more assistance as time goes on. We cannot take up a newspaper in Victoria to-day without seeing some reference to the languishing industries of that State. These industries are said to be languishing after upwards of thirty years of “coddling” by the imposition of artificial restrictions upon trade. Wherever such restrictions are imposed the same thing occurs.

Mr Higgins:

– If this proposal will assist any State, it will assist New South Wales.

Mr JOHNSON:

– The protective system in Victoria was established for the avowed purpose of giving industries a “start.” Yet, periodically, during more than thirty years of its operation, pleas have been advanced for increasing the duties upon the ground that industries were tottering. The more State assistance was extended to them, the more they tottered. As a result, we have seen the flower of the manhood of Victoria leaving this State for other lands for a period extending over a number of years. That is the strongest possible condemnation of this proposal.

Mr Austin Chapman:

– If legislation of this character had been operative, those persons might have remained here.

Mr JOHNSON:

– Certainly not. Such legislation not only was powerless to prevent it, but was directly responsible for a large proportion of the exodus.It was in Victoria that we first heard of the appointment of Wages Boards and Sweating Commissions. We have merely to look to any protectionist country in the world to find that the unsatisfactory conditions which surround the worker in lands where a low Tariff prevails, are accentuated in countries where a high Tariff is operative. The last census returns of the United States contain a declaration that in New York city alone there are tens of thousands of unemployed and destitute persons. Moreover, out of every twenty persons employed in American factories, seventeen are foreigners. The artificial method of raising wages by dipping into the public Treasury for the purpose of enriching certain manufacturers, has had, the effect of driving American workmen out of the most highly protected industries in that country, and of putting foreigners in their places. It is in the free-trade industries that the greatest number of Americans are employed.

Mr Mauger:

– What industries are those ?

Mr JOHNSON:

– Many of the great natural primary industries. In this connexion, it must be remembered that there is absolute free-trade between the whole of the States of the Union. I wish now to refer to the report of the Royal Commission, which recently investigated this matter. We have heard a good deal from the honorable arid learned member for Darling Downs concerning certain paragraphs, in what he chooses to term the “majority” report of the Royal Commission. I should like to point out that the report in question is not a majority one. The Commission consisted of twelve members, six of whom reported in favour of the bonus and an equal number against it. The only way in which it can be claimed that a majority were in favour of the proposed bonus is by counting the casting vote of the Chairman, in addition to his deliberative vote. The report of the six members who are opposed to the granting of the proposed bonus is unanimous, whereas that of those who favour it is not absolutely unanimous.

Mr Higgins:

– Those who favoured the bonus wished the industry to be controlled by the State.

Mr JOHNSON:

– That is not stated in the report. Those members of the Commission who reported in favour of the bonus, were not absolutely unanimous, because the late Sir Edward Braddon made a very important reservation. He approved of the report “ except as to paragraph b of section 20, from which I dissent.” The paragraph in question reads as follows : -

Your Commissioners recommend that provisions should be inserted in the Bill. …

Securing to the Commonwealth, or to the

State in which the work for the earning of bonus is being chiefly carried on, a right of purchase of the undertaking after a fair interval at a valuation.

That is a very important reservation.

Sir William Lyne:

– That provision is contained in the Bill.

Mr JOHNSON:

– But I am dealing now with the Commission’s report. I repeat that the six members of the Commission who reported against the payment of a bonus were absolutely unanimous. Consequently, if it can be urged that there was a majority either way, it seems to me that those who were opposed to the granting of a ‘ bonus constituted that majority. I now propose to read one or two extracts from their report - extracts which speak for themselves) .and which occasion surprise in my mind that this matter should have been again brought forward at the present time. Paragraph 3 of the report of the members of the Commission who object to the granting of the proposed. bonus states -

The Bill provides for the payment of ^324,000 of the people’s money to private individuals engaged in an enterprise for their private gain.

There is no ambiguity about that statement. It continues - .

There can be no guarantee that the bonus, as proposed, would permanently establish the industry, though it is probable the inducements offered might be instrumental in forming speculative companies.

Paragraph 4 reads -

One of the witnesses, Mr. Sandford, managing director of the Eskbank Iron Works, New South Wales, stated that he had* made an agreement with an English syndicate to spend £250,000 in extending the Lithgow works if the Bill passed. In answer to another question, Mr. Sandford said that to make pig iron he wanted a plant involving an expenditure of from ^100,000 to ^’25,000. This estimate is less than half the sum proposed to be paid in bonuses.

I should like honorable members to ponder over that statement, and to realise its full significance. It is a case of greasing the fat pig all the time. It is not a question of providing work for the unemployed. That cry is raised merely for the purpose of playing upon the sympathies of honorable members. The unemployed are being used as a shield to cover the real design of those who are in a position to make large dividends by investing in an enterprise of this character without any State aid whatever. The honorable and learned member for Darling Downs has spoken, in eulogistic terms of the experience of Canada. I have looked tip . that experience, and I find that it is far from encouraging. Instead, it is of a character that should make us very chary about attempting to follow the example of that country. The report of the Commission also refers to the experience of Canada. Paragraph 5 states -

The Canadian experience is not encouraging. The bonus system for iron production was first instituted there in 1883. Subsequently a Bill was passed in 1897 further continuing the system.

The bonus there was granted for the purpose of starting the iron industry, and yet we find that after it had been in operation for fourteen years, it had to be extended for a further term. The paragraph continues -

Another Bill was carried in 1899, providing for the diminution of the bounties Dy a sliding scale expiring in 1907. In July of this .year the Dominion Government decided to postpone the operation of this sliding scale for one year, which practically means a further increase in the bounties paid.

So this process continues. Where, I ask, will this system of propping up industries end? The practice of diverting ‘public money into the pockets of private individuals is absolutely wrong. Paragraph 6 states -

Nearly ail the witnesses examined before the Commission agreed that the payment of bonuses would be useless unless followed by a duty. Ex’perience shows that if the payment of bonuses be commenced the liability of the Commonwealth will not be limited to the sum proposed under the Bill, but that further Government aid will be sought.

That confirms my statement as to the want of finality in regard to proposals of this character. Paragraph 7 says -

The evidence failed to show that there was any commercial necessity for the bonuses proposed. Mr. Sandford said he could produce pig iron at Lithgow under 35s. a ton. Allowing for freight to Sydney, Melbourne, and other ports of the Commonwealth, he could, on this showing, compete favorably with any imported pig iron. Other witnesses, who, however, had less experience than Mr. Sandford, doubted the correctness of his estimate of cost. But, on the supposition of his having made an under estimate, he would still, even without a bonus, be in an excellent position as compared with the imported commodity.

Those statements are based upon the evidence tendered before the Commission. Paragraph 8 reads -

No effort was made to bring forward witnesses against the Bill. Notwithstanding that fact, the evidence given failed to establish a case in its favour. Several witnesses thought the establishment of iron works in the Commonwealth premature, and much of the evidence was strongly against any attempt by the Government to establish the iron industry by the payment of bonuses.

In the light of this report, which is fairly strongly worded, and speaks for itself, I fail to see how honorable members can with their eyes wide open conscientiously give their adherence to a principle of this character. There is another point to which I should like to call attention, as it is one of verygrave importance. I refer to the principle involved in a private member bringing forward a measure of this kind.

Mr Higgins:

– That is the fault of the Government.

Mr JOHNSON:

– It is only indirectly the fault of the present Government, for the practice was not initiated by them. But whatever Government may be responsible, the fact remains that the principle is unwise, and should not be persevered in. In expressing this opinion, I desire it to be distinctly understood that I do not wish in the slightest degree to reflect on the integrity of the honorable member, who is in charge of this measure. There is not even the faintest suggestion of suspicion attaching to the action of any honorable member in connexion with this Bill, and we may discuss it free from any suggestion of the kind. It must be patent, however, to any one who gives even a few moments’ consideration to the question, that, sooner or later, serious consequences may result from a system which permits measures involving large expenditure of public money to foe introduced by a private member of the House, under the aegis of the Government of the day. Rightly or wrongly the adoption of such a practice may give rise to the suspicion in the public mind that there is something more than mere patriotism in the background. It is undesirable that any action on the part of the Parliament should give rise to such a feeling. I am happy to say that, so far as this Bill is concerned, no such suspicion exists.

Mr Ronald:

– Then why suggest it?

Mr JOHNSON:

– I have been led to mention it because of the feeling that if the practice foe adopted it may in future cases give rise to such a suspicion. I would point out the desirableness of avoiding such a possibility. I know, of course, that the present Government occupied a peculiar position in regard to this Bill, and were bound, as a matter of personal honour, to adopt the course which they have pursued.

Mr Thomas:

– Were the.y bound in honour to do wrong?

Mr JOHNSON:

– I do not say that they have done anything intrinsically wrong in this case ; but 1 hope that their action in allowing a private member to take up this measure will not be regarded as a precedent. I would repeat that there is no suggestion of suspicion attaching to the action of the honorable member for Eden-Monaro in bringing forward this Bill. My sole reason for urging that such a practice should not be followed is the belief that we should avoid giving rise to even the suggestion of suspicion in the public mind. Every honorable member has the fullest confidence in the integrity of the honorable member in charge of the Bill ; but it occurred to me at the outset that this was a matter that certainly deserved very serious consideration. The final point which I wish to emphasize is that we have to recognise that whilst the Commonwealth is being asked under this Bill to pay a large sum of money into the pockets of a private syndicate, that syndicate will reap all the profits of the transaction, without being exposed to any of the risks which men who embark in other undertakings have to incur. If the profits will be as large as have been represented in some quarters, then those who desire to enter upon the industry should consider it quite good enough to take the risk. They should be able to make their calculations as to the probable profits, on the same basis as do other men who ordinarily embark upon other industries for their own private gain. If we are to assist the iron industry in the way proposed, why should we not also assist a widow who desires to start a laundry, or a man who wishes to open a shop, or is about to undertake any other business ? If the principle be right in this case, it must be capable of application in every direction. We cannot draw any hard-and-fast line. The principle involved is either good or bad, and I assert that with certain limitations, it is bad. There may be certain special cases in which it might be desirable to grant a bonus, but this case, in my opinion, is not one of them. The Bill deals after all with what is a purely commercial speculation, and should be treated as such. Let those who desire to engage in the industry secure the benefit of any profit they may be able to derive, and take the risk of any loss that may attach to it. We have no right to dip our hands into the public Treasury, and to say to any syndicate, “ We give you this sum, which is not ours to give, for your own personal good, and desire nothing in return. We hand it to you, simply as a. guarantee against possible loss in the first instance, and if you do not incur any loss, it will go to swell your already assured profits.” That is a principle to which I have a strong and deep-rooted objection, and in view of the facts which I have put before the House, I have only to say that, whilst I give the honorable member in charge of the Bill every credit for purity of motive, I hold that the principle of the Bill is a most pernicious one, and must therefore oppose it.

Mr THOMAS:
Barrier

– I should like to say at the outset that, although, when it was announced some days ago that the honorable member for Eden-Monaro would take charge of the Bill, I, in common with a number of others, felt somewhat annoyed that the honorable member for Hume should not have been allowed to remain in charge of it, I realize that the question involved is so important that it will not permit of our being swayed by any personal considerations. I should have ‘ preferred to see the honorable member for Hume continue in charge of the measure; but any little feeling which I had at first has been removed. There is one point on which I agree with the honorable member for Lang, who has just resumed his seat, and that is that it is unwise to hand over such a measure to a private member of the House. The late Government acted in this respect in the same way as have the present Administration. I understand that the leader of the Opposition, when Prime Minister, was prepared to grant the ‘honorable member for Hume the same facilities to expedite the passage of the Bill as have been accorded the honorable member for Eden-Monaro. That, however, does not do away with the question of whether it is right or wrong to allow a private member to take charge of such a Bill, and I certainly think that bv means of our Standing Orders, or in some other way, we should take action ‘ to prevent the repetition of such an occurrence. A system which allows a private member to deal with a Bill of this character may not only expose honorable members to a suspicion of corrupt motives, but place a Government having only a small majority at its back in a very peculiar position. A Government with a large majority is practically able to do what it pleases in regard to any matter of this kind, and, although in this case I am not referring to either the present or to any previous Administration, I hold that any Government which happens to possess but a small majority might find itself forced to do something in this direction which it otherwise might desire to avoid. If it were made impossible for a private member to take charge of a Bill of this character, Governments would be safeguarded. Some honorable members believe that those who oppose this Bill have no sympathy with the number of men who are out of employment. 9p

Mr Ronald:

– Hear, hear.

Mr THOMAS:

– I am sorry to hear the honorable member say “ hear, hear.” There is not one honorable member in this House, whether he be free-trader or protectionist, a Socialist or an anti-Socialist, who desires to see even one member of the community unemployed. Although our views as to the methods to be adopted to secure employment for the people may differ, we ali are anxious to see every one fully employed. I am opposed to the Bill as it stands; but shall vote for the second reading in the hope that in Committee it will be so amended as to meet with my approval. The question of whether I shall vote for the third reading, if it be not so amended, is another matter. Although I am opposed to the granting of bonuses for the development of the iron industry by private enterprise, I am strongly in favour of it being taken up by one of the States. If none of the States will take it up, then I am prepared to allow our efforts in this direction to remain in abeyance until one of them- is ready to do so. One of my ‘ reasons for objecting to private enterprise being, subsidized is that I recognise from the report placed before us by the Commission that the bonuses would nol be sufficient in themselves to place the industry on a permanent basis. Something more than a bonus will he required if the industry cannot stand on its own merits.. Mr. Jamieson, when before the Commission,, expressed the opinion that it would be absolutely necessary to impose Customs duties-, after the expiration of the bonuses. Mr.. Sandford somewhat questioned that statement, but Mr. Jamieson urged that itwould be absolutely necessary to have a» protective Tariff in force, so far as the: manufactures dealt with in the Bill are concerned, after the payment of bonuses had ceased. If Mr. Sandford be right, it is very peculiar that a rich company is not prepared to risk .£250,000 in such a venture. If it be possible to carry on the great iron industry of the Commonwealth of which we have heard so much - and we are told that we have an abundance of ore in sight to enable operations to be carried on for the next sixty years - such an undertaking ought to be a very good thing from the point of view of a mining speculation. One would think tha.t a company would be prepared to lose even £250,000 in order to secure the profit that it would ultimately derive from its operations. A large number of companies have lost over £250,000 in various ventures. Some have lost as much as £500,000, and I have known of cases in which they have lost as much as £1,000,000 before making a single penny out of their undertaking. They have felt satisfied from the first that they would ultimately be able to recoup themselves,, and therefore have not hesitated to incur these losses. That being so, if those interested in the iron industry really think that duties would be unnecessary - that bonuses would suffice - it is singular that they are not ready to invest the £250,000 necessary to enable them to establish works. I think it may be necessary to impose Customs duties to assist the industry. That is the difficulty. Although I believe that in Australia pig iron could be produced at a price at which it could compete in the local market with pig iron produced in other parts of the world, I think it is probable that if the iron industry were established here, pig iron would be sent from other places for less than it cost to produce, so that foreign manufacturers might destroy our works, and continue to have a monopoly of our market.

Mr Conroy:

– They would have to pay 15s. a ton for freight.

Mr THOMAS:

– There are large iron mills abroad whose proprietors might think it good business to send pig iron here at a loss, in order to keep the Australian market to themselves. But we have been told that the people of Australia believe in the possibility of establishing the iron industry here, and that local manufacturers who use pig iron say that it would be of great advantage to them to obtain supplies locally. If that be so, the danger of foreign competition could be met by the local manufacturers who use iron combining as a big syndicate for the development of our iron ore deposits. If they did that, they would see that it was not to .their interests to use imported pig iron, even though for a few weeks, or a month or two, they might be able to get it for less than cost price. I am afraid that if a duty is imposed upon imported pig iron, we shall injure our manufacturers who use it by increasing the cost of their raw material, and it is the opinion of both free-traders and protectionists that the price of raw material should not be increased. The right honorable member for Adelaide, whose loyalty to protection is undoubted, when speaking on the first Bonus Bill, said -

In the first place, I would ask, “ Ought we to impose a duty at once?” I supply the answer myself by saying that the policy of the Government is not in that direction. They think rather that the immediate imposition of a duty would have the effect of greatly increasing prices and hampering industry.

In his speech, he quoted Sir Leonard Tilley, a Canadian, who said -

If the duty on pig iron were materially increased, it being a raw material that forms the basis of a great many manufactures, the result would be that the increase in price would require a change in the duties on the articles manufactured from pig or bar iron.

I have another quotation from the speech of the right honorable member for Adelaide, which I do not think it necessary to read, because I take it .that free-traders and protectionists are agreed that if a duty is placed upon an article which is not manufactured locally, its effect is to increase the price of that article. Pig iron is the raw material of many manufacturers, and it would certainly be unwise for us to impose a duty which would increase its price. The granting of a bonus is not the same thing as the imposition of a duty, and if I had to make a choice, I would prefer a bonus to a duty, because, in the first place, when we grant a bonus, we know what it costs us, and, in the second place. I think that it is not fair that those who are producing or using iron should bear the whole cost of establishing an industry for the benefit of the community at large. But there are disadvantages connected with the granting of bonuses. When the first Bill was under discussion, the honorable and learned member for Bendigo said -

We have had experience, more or less favorable, of bounties and bonuses in Victoria.

Mr Kingston:

– The butter bonus was a very good thing.

Sir JOHN QUICK:
BENDIGO, VICTORIA

– No doubt.

At that time the Butter Bonus Commission had not begun to take evidence. If the revelations of that evidence had been known then, neither speaker would have referred favorably to the butter bonus. Yesterday the honorable member for Ed’en-Monaro read portions of the report of the Commission which inquired into the proposal we are now discussing, but he read only those portions which suited his, arguments’. I should like, therefore, to read paragraph 18 of the report, which is as follows : -

Your Commissioners believe that the proposed bonus on spelter would substantially encourage the utilization of quantities of zinciferous ores at Broken Hill. It is estimated that there are now raised on the surface and available for treatment about 3,500,000 tons of this material.

The. honorable member said that he would leave that part of the Bill which provides for the granting of a bonus on spelter to me. I understood that if I were favorable to it, he would support it, but that otherwise he would drop it.

Mr Austin Chapman:

– No ; I shall support it in any case; but I thought that as the honorable member understands the subject so well, his arguments would convince the House of the need for the bonus. It is, of course, for honorable members to decide whether that bonus shall be paid.

Mr THOMAS:

– Then, the honorable member believes that £20,000 should be given to develop the zinc industry at Broken Hill?

Mr Austin Chapman:

– I am waiting to hear the honorable member’s explanation.

Mr THOMAS:

– The honorable member’s attitude in regard to this matter is hardly a fair one. I take it, however, that he is in favour of the measure as it stands.

Mr Austin Chapman:

– I think it could be improved.

Mr THOMAS:

– By making the zinc bonus £50,000 instead of “£20,000, I suppose? When the matter was discussed in this House on 12th February, 1902, in connexion with the Tariff, I said, speaking of the mining companies-

All the protection I ask for is that they shall not be handicapped, but may be free to utilize machinery to the best advantage. As a representative of a mining community, I say that it is an unfair thing to ask the Commonwealth Parliament to put its hands in the pockets of the taxpayers to bolster up the mining or any other industry. The Minister says that the Government is prepared to grant £20,000 in bonuses for the development of the zinc industry. If that is their idea, we might just as well keep the £20,000 in the pockets of the people, or spend it more profitably. We have upon the dump heaps in Broken Hill 1,000,000 tons containing 25 per cent, of zinc, which to-day is practically useless. At the present price of zinc, say £16 per ton, that material is equivalent to £4,000,000 worth of zinc. Mining men know it is there, and if a company will not work it without a bonus of £20,000 they will not work it at all. If they could work it at a profit, plus the £20,000 bonus, I venture to say that they would work it without the £20,000. When dealing with £4,000,000 worth of stuff, £20,000 is a mere drop in the bucket. Let us have our mining machinery, our electrical appliances, and every advantage that science can discover for us, free of duty, and that would be of more advantage to the zinc industry than a bonus of £20,000.

I stand by those words now. Since then the subject has been inquired into by a Royal Commission, and its majority report was signed by the right honorable member for Adelaide, the honorable and learned members for Darling Downs and Corinella, the honorable members for Melbourne Ports and Newcastle, and the late Sir Edward Braddon. It is only fair that I should mention that when the Commission took the evidenceof Mr. Courtney, a man of whom I have a very high opinion, only the right honorable member for Adelaide, the honorable member for Melbourne Ports, and Mr. Winter Cooke were present. Mr. Courtney is the general manager of the Sulphide Corporation, or, as we call it in Broken Hill, the Central mine, and receives a high salary, in recognition of his great abilities. At any rate, he probably knows what he is talking about. He was asked whether the proposed bonus of£2 per ton for the production of the first 10,000 tons of spelter from Australian ore would be of any considerable assistance in establishing the industry, and his reply was “ undoubtedly.” Then he was asked to give some information as to the quantity of zinciferous ores at Broken Hill. He stated that his own company had 680,000 tonsof ore upon the dump heaps, and that, altogether at Broken Hill, there was 3,500,000 tons of zinc ores at surface. Honorable members will understand that this 3,500,000 does not represent zinc spelter, but only the blende, which contains from 17 to 20 per cent, of zinc, and the problem upon which the Sulphide Corporation have been engaged has been the conversion of this 20 per cent, of zinc into a marketable commodity. I have made certain calculations based upon the presumption that from 10 tons of the material contained in the dump heaps 1 ton of zinc could be produced. That would represent a total of350,000 tons of zinc. I see from the evidence given by Mr. Courtney that his company have treated 2,099 tons of the ore, from which they obtained 360 tons of spelter. That result would be considerably above what I have estimated. I am allowing for a waste of fully 50 per cent., because the dump heaps are supposed to contain about 20 per cent, of zinc, and I am allowing 10 tons instead of 5 to every ton of zinc. Further on in his evidence, Mr. Courtney states that, whilst his company had made certain trials and experiments, bad laid down a plant which cost £26,000, and had spent money in other directions, they had not, up to twelve months ago, made a commercial success of their undertaking, because of the fluctuations in the price of zinc. The price varies from about £16 to £20 a ton, and if the company could secure £20 per ton for their product they would be upon safe ground. Mr. Courtney estimates that the average price of zinc is about £17 15s. per ton. At page 156, question 3294, Mr. Courtney says -

The result of the bonus, of course, will be that during the struggle of creating the industry we should be protected against low prices. Further, if this bonus is continued for sufficient time, it will enable the industry to be so established that we shall be able to do without it. The struggle is in the beginning, and I think it will take four or five years to create the industry. After that time if the industry does not pay the works must be closed down. If nothing can be done in five years, the industry must collapse.

Would that be so, with the Australian market open to you in the absence of Inter-State duties? - The 2,500 tons a year are a mere drop in the ocean. It is nothing at all when we think of the enormous deposits of zinc ores in Australia. Broken Hill alone could produce that quantity per week.

Then he was asked by the Chairman -

Would a bonus of the description I have indicated lead to further expenditure on the works? - lt would certainly do that if the industry in the beginning is protected to the extent of £2 per ton. That is to say, if the selling price was £17, that would be equal to £19 per tori at the works, and the result would be a decided encouragement to start the other three furnaces, which would require another £4,000 or £5,000, bringing the expenditure up to £31,000.

He was asked further -

You think £4,000 or £5,000 would enable you to start the other furnaces? - Yes, and that would bring the expenditure up to £31,000, and practically enable the works to supply the market in Australia.

At page 158 he was asked by Mr. Groom -

Will the industry be established simply for the local market? - In our case, having established our works, we should first secure the local market.

Is it worth while establishing the works for the local market only? - Hardly; considering that there is such an enormous quantity of available ore at the mine.

The Chairman then asked-

You say that the present stock at the Central Mine is 680,000 tons? - Yes.

What is the percentage of zinc? - About 20 per cent., which means an immense quantity.

With this industry established you could hold the local market? - Yes.

In what other market do you think you could gain a footing? Probably in China, and then we should have to go to Europe.

At question 3339 he was asked -

And afterwards, how could you hold your own in the European market ? - Once we are established we shall be able to work into the European market. The difficulty is to establish the business. It is very costly, and I do not think that anybody except ourselves will take it up. It is our experience that other people are holding back, considering that after our heavy expenditure and trouble we are making so little headway. We are, however, emerging from our chrysalis stage.

You think that with the bonus, you will be able to establish the business, and gain a footing in China and Europe? - I believe so, because we shall be protected against low prices. If, after four or five years of that protection, we are not in a position to compete in Europe, there is nothing in the industry, and it will have to collapse.

But you are pretty sanguine? - I am very sanguine that the industry can be established on the terms suggested.

He says he is very sanguine that the industry could be established if a bonus of £2 per ton were granted for the production of the first 10,000 tons of zinc. Then Mr. Winter Cooke asked him -

The consumption in Australia is not enough to justify your asking for protection? - No; you must establish the industry so as to compete in Europe, 01 otherwise there is really nothing in the business.

You want the bonus to give you a start? - Yes, and to provisionally protect us against market fluctuations.

You could live in the face of these drops? - Because we should have the works established on a large scale, and everybody trained to the business.

The next question was asked by Mr. Groom -

The local consumption is so small that, as between a bonus and a duty, you would prefer a bonus ? - Unquestionably.

The Chairman then said -

According to the Tariff, there is power when the business is sufficiently established to impose a duty ; but I understand that you do not establish much importance to that?

Mr. Courtney replied, “No.” He was then asked -

You look forward to competition in Europe? - Undoubtedly ; otherwise I do not think there is anything in the industry, especially with the enormous available supply of ore in Australia.

The evidence shows that 3,500,000 tons of zinc blende on the’ dump heaps at Broken Hill is estimated to yield 350,000 tons of zinc. The average price of zinc, according to Mr. Courtney, is £17 15s. per ton, and therefore there is already at the surface £5,950,000 worth of zinc.

Mr Conroy:

– That is assuming that only half the zinc is extracted from the blende.

Mr THOMAS:

– Yes ; I am allowing for 50 per cent, waste in treatment. Mr. Courtney says that the company with which he is associated has spent £31,000 in dealing with these zinc ores, and that, if he can get £20,000 from the Government to help him to send 10,000 tons of zinc to Europe and China he is very sanguine that he can solve the present difficulty, and establish the industry. I would ask any honorable member who- has had anything to do with mining to place himself in the position of the shareholders in the Sulphide Corporation. If they were associated with the London directorate, able to call up at will £250,000 or £500,000, and had a general manager of the reputation and ability of Mr. Courtney, who asked them to give him £20,000, on the understanding that he would be able with its assistance to solve the problem of producing a marketable commodity from the zinc ore, and to give them a share of legitimate profit out of the estimated proceeds of £5,950,000, would they not jump at his offer? It seems to me that the £20,000 would be granted that very day. If that evidence means anything, it means that if the company in question is prepared to lose £2 pet ton upon 10,000 tons of zinc, it can solve the problem for itself. When honorable members are prepared to attach their names to a report upon evidence of that character, I ask whether any dependence can be placed upon their conclusion’s ? I am aware that it is rather unusual in politics for an honorable member to oppose any expenditure in his own constituency. The £20,000 which it is proposed to expend by way of a bonus upon the production of spelter, will, if the Bill passes, be chiefly spent in my own electorate. Nevertheless, I do not hesitate to oppose that proposal.

Mr Wilks:

– The honorable member for Parramatta occupies an exactly similar position.

Mr THOMAS:

– I admit that the honorable member for Parramatta took up a very much stronger position in regard to the proposal to grant a bonus upon the production of iron than I have assumed upon this matter. It may possibly be thought that my attitude upon the question is prompted by the reflection that the £20,000 provided by the Bill would be expended for the benefit of a large mining company. I feel sure, however, - that those who were associated with me in the last Parliament will credit me with having done nothing to injure the mining industry in any way whatever. I battled strongly for everything that was fair, not merely to the mining industry of Broken Hill, but of Australia generally. I contend that- if Parliament would allow our mining companies to obtain the machinery and electrical appliances which they require free of duty, we should benefit them to a very much greater extent than we shall by granting them the paltry bonus proposed. I am very glad to know that other companies besides the Central Sulphide Corporation have ‘ practically solved the zinc problem.

The Proprietary Company and Block 14 haw successfully overcome the difficulty, and I think I am right in declaring that commercially the problem has been solved. The best evidence of this is to be found in the fact that the Proprietary Company, which laid down a’ plant for treating the zinc, is now extending that plant. . I have already stated the reasons why I object to the payment of a bonus to private enterprise. I fear that if we establish the iron industry in Australia by that means it will become a monopoly, and under such circumstances free-traders and protectionists alike will admit that the purchaser of iron will be absolutely at the mercy of the monopolists. Although it is just possible, should the Bill pass in its present form, that two companies may establish iron works in our midst, namely, the Blythe River Company and the company which is controlled bv Mr. Sandford, I feel certain that competition between them would not be of a permanent character. If they found that each was possessed of an equal amount of capital and that equal intelligence was brought to bear in the conduct of their businesses, they would amalgamate within a very short period, and would be perfectly justified in so doing. I am prepared to vote for the appropriation of a sufficient sum of money to enable either the Commonwealth or any of the States to control the iron industry. I quite recognise that the State would run the business for the convenience of the people, and without any desire to make a profit. I object to handing over this industry to private enterprise. But although, as a Socialist I am anxious for the State to nationalize the iron industry, I am prepared to hand over the conduct of any works which we may establish to a board which shall be absolutely free from political influence. Parliament might well regulate and prescribe the wages to be paid, and the hours to be worked; but apart from these considerations I should be willing to give whoever might be placed in charge of the works the same free hand in their management that the late Mr. Eddy enjoyed when controlling the railways of New South Wales. The honorable member for Eden-Monaro has taken up the Bill in the form in which it was left by the honorable ‘ member for Hume. One of the arguments advanced by that honorable member ‘in favour of the measure was that it contains a provision which empowers the State to purchase any works which may hereafter be. established by private enterprise at any time that it chooses to do so. The honorable member for Franklin interjected that no business man would enter into such an arrangement, and thereupon the honorable member for Hume replied, “ Oh, yes they would, because the State would not interfere with them.” In order to induce a number of honorable members to vote for the Bill, a provision has been inserted in it which the honorable member for Hume declares would be inoperative.

Sir WILLIAM LYNE:
HUME, NEW SOUTH WALES · PROT; IND from 1910

– I said that I did not think the States would take over the works.

Mr THOMAS:

– Some honorable members contend that the provision in question constitutes a great safeguard to the Commonwealth. To my mind it is a most immoral proposal. We are invited to ask private enterprise to incur the risk that is involved in. establishing these works, and if they pay we are to purchase them, whereas if thev do not, private enterprise is to bear the loss.

Mr Austin Chapman:

– That clause was inserted with a view to resumption in the case of monopoly.

Mr THOMAS:

– The idea entertained by some honorable members is that the works could be purchased at any time. We have to deal with the Bill in the form in which it is presented to the House. I am not here as a defender of capitalism, but I think that it is unfair to ask men to invest a large sum of money in an industry, to allow them to bear any loss which mav be incurred, and to exercise the power of resumption should the undertaking prove a success. I am not in favour of proposals of that character. Although I am a Socialist, we must be just to capitalists. I do not think that the 4,000,000 of people in Australia need to approach private enterprise upon their hands and knees.

Mr Austin Chapman:

– The honorable member has been pointing out the danger of combines. It was that evil to which the provision in question was intended to apply.

Mr THOMAS:

– The honorable member for Hume distinctly stated that in his opinion the measure had been improved by the introduction of a provision which would enable the State to resume the works at any time it thought fit. I shall support, with very great pleasure, the amendment foreshadowed by the honorable and learned member for Werriwa, pro viding that if any bonus be given, it shall be paid out of revenue derived from direct taxation. If the Bill be calculated to do so much good for those who engage in the industry, it must be of benefit to those who own the land, and the money necessary to pay these bonuses should come directly from them. I am not in favour of private enterprise being bolstered up by means of revenue derived from Customs duties which is wrung from the poor, rather than from the rich. The honorable member for Macquarie, when this Bill was before the House on a previous occasion, very pertinently pointed out that in order to provide for the payment of £250,000 by way of bonuses, it would be necessary for us to raise £1,000,000 through the Customs, because, under the Constitution, it is necessary for us to raise four times the amount actually required. I shall vote for the second reading of the Bill.

Mr Wilks:

– Why should the honorable member vote for the second reading if he does not believe in the bonus system ?

Mr THOMAS:

– I shall vote for the second reading of the Bill, because I am anxious that the industry shall be established under State control. If we destroy the Bill at this stage, and refuse to allow it to go into Committee, we may not have an opportunity to provide for a State-owned iron industry.

Mr Wilks:

– If one of the States would take it up, bonuses would not be required ?

Mr THOMAS:

– They might not ; but the granting of bonuses might operate as an inducement to one of the States to take up the industry. I am prepared to give any State, whether it be New South Wales, Queensland, Tasmania, or any other, that which I certainly would not give a private company. The only reason why I propose to vote for the second reading is that in Committee we may have an opportunity to remodel the Bill on the lines I have indicated.

Mr KELLY:
Wentworth

– The honorable member, who has just resumed his seat, gave it as his main reason for opposing the measure as it stands at present, that he favoured the idea of a State monopoly rather than the possibility of a private monopoly resulting from the passing of this measure. Curiously enough the honorable member who was the first to enunciate that principle during this debate, was my hon orable and learned friend, the individualistic member for Werriwa. He also urged that if these bonuses were designed to benefit one class in the community- r-the capitalistic class - that class should -raise the funds from which they were to be paid. No one knows better than does my honorable and learned friend, that direct taxation bears upon all classes of the community - directly on those who contribute, and indirectly on the persons in the employ of those individuals-

Mr Conroy:

– I know on whom direct taxation would fall.

Mr KELLY:

– My - honorable friend knows on whom he really thinks the tax would fall. He is prepared for the present to take up the cudgels on behalf of a direct tax, under the pretence that it does not bear on those on whom it does not directly fall. The great danger from direct taxation is that those on whom it falls indirectly do not understand that such a tax also bears on them, otherwise no one would object to a direct tax, except those directly concerned.

Mr Fowler:

– Can the honorable member explain why the wealthy classes are opposed to direct taxation?

Mr KELLY:

– It is clear to them that they have to pay it first of all, and they-

Mr Lonsdale:

– They see that they will be the first to be called on.

Mr KELLY:

– I do not propose to suggest that the wealthy classes have a better knowledge of political economy than have the poorer classes; but the honorable member for Perth surely knows that a direct tax bears indirectly on the masses, on those who produce wealth. And if wealth is to be taxed - never mind by what method - surely those who produce it must bear that tax as much as do those on whom it directly falls. I do not, however, propose to be led away by the interjections of honorable members. While on this point, I wish to make only one further reference to the speech of the honorable member for Barrier. The honorable member stated frankly that he preferred a State monopoly to the possibility of a private monopoly ensuing on these bonuses being granted ; and in that respect I think he was far more outspoken than the other members of his party. I hold that the protectionists of the Labour Party are protectionists apart altogether from the principles which weigh most with ordinary protectionists. They are protectionists because of an idea at the bottom of their minds that when they have narrowed down the field of competition and made monopolies possible, they will proceed to nationalize the monopolies which their own actions have brought into existence. I think that they desire protection for these industries only as a stepping stone to that State Socialism of which they have, no doubt, the laudable ambition - and I do not draw this inference in any bitter spirit towards my honorable friends - to be the administrators. The honorable member for Barrier, in discussing the evidence given before the Royal “Commission, made one especially interesting point, which is well worthy of comment. He said that the general manager of the Sulphide Corporation, in examination, said that if after the lapse of some four or five years this industry were not able to go ahead without a bonus, that would be proof positive that it was not worth troubling about. How often have we heard the same story ? It was told when the system of protectionist duties was first initiated in Victoria thirty or forty years ago ; and those who quote the remarks of that gentleman will, be the first to cry out that the bonuses should be continued, in the event of the industry_threatening to close down at the conclusion of the period during which they are to be supported under this Bill.

Mr Wilks:

– They would say that those engaged in the industry had spent so much money in establishing it that the Government must give them further assistance.

Mr KELLY:

– Exactly - that we should send good money after bad. I do not propose to answer a fiscal revivalist, because that is too lengthy a task for any one to undertake. But the honorable and learned member for Darling Downs told us this afternoon - among other things - of the enormous quantities of ore, and of all the essentials for the manufacture he hopes to encourage, that exist at the present time all over Australia, and especially in the Eastern States and South Australia.

Mr Conroy:

– He admits that he wants to guarantee interest on capital.

Mr KELLY:

– He said that he looked upon the bonuses provided for in the Bill as merely a first instalment. I think that we are now getting at the truth. The general manager of the Sulphide Works says that those engaged in the industry would only require the bonuses for about four years, while our other authority tells us that he regards these bonuses as only an instalment. It is very curious that another argument advanced by the honorable and learned member was that he desired to see this industry encouraged as a means for improving the defence of the Empire. Our honorable friends opposite are always talking about the defence of the Empire when they get into a corner.

Mr Lonsdale:

– It is a good old “gag.”

Mr KELLY:

– It is- with them. We were told that the Empire could be best defended by establishing the primary industries of Australia, The honorable and learned member quoted figures showing the imports of manufactured iron and steel into Australia.

Mr Mauger:

– Hear, hear.

Mr KELLY:

– Like my honorable .friend who interjects, the honorable and learned member for Darling Downs has lately been talking of preferential trade. I think that preferential trade is one of the moving arguments in favour of the alliance - the fact that the alliance is bound to support it has not come to light, although it is to be found no doubt somewhere in the substratum - but the honorable and learned member forgets that iron and steel are among the staple exports of the United Kingdom.

Mr Robinson:

– And he wishes to shut those out of the Commonwealth.

Mr KELLY:

– Yes. We have had our feelings harrowed by references to the starving poor of Great Britain; we were told that they were asking us for bread, and now honorable members of the alliance wish to make the markets of Australia more difficult for the products of their toil. My honorable friends are not consistent. Preferential trade and the defence of the Empire by an Australian bonus are two fine sentiments ; but when they conflict, it is very unfortunate for one or other scheme.

Mr Mauger:

– If the honorable member were married, would he not consider it to be his duty first pf all to feed his own wife and family?

Mr KELLY:

– I do not know whether that is the only principle of the honorable member for Melbourne Ports. I have always thought that he exclusively considered the interest of his own constituents, as he thinks he very properly ought to do, as far before the broader interests of the whole Commonwealth. After the honorable member’s interjection, I shall quite understand his -one driving impulse.

Mr Mauger:

– “Love hy r neighbour as thyself.””

Mr KELLY:

– I propose to deal very briefly with this question. It is not my intention, to discuss the maze of figures which delight honorable members opposite - the maze of figures which was introduced, not, I take it, to throw any light on this question, but to mesmerize the House and lead it away from the very obvious facts which confront us. This Bill was brought forward yesterday with considerable ability - in fact, with that ability for which we always look from the honorable member for EdenMonaro. As free-traders, we consider that his views are mistaken ; but, at all events, they are extremely consistent. But whenever he moves in the direction of supporting his own fiscal beliefs, we always know that he is actuated by the most disinterested motives, that he has taken action simply because he has the matter at heart, and quite apart from political considerations. The honorable member has called all his ability into play to clothe the real issue in a maze of figures. However, his main argument was, “ Why should we pay the foreigner for this article when we can make it for ourselves’ ‘ ? Could the honorable member reasonably apply that doctrine to himself ? We all know that a country lives on a small scale, much as does the honorable member himself.

Mr Austin Chapman:

– The honorable member ought to be a good judge of anything on a small scale.

Mr KELLY:

– The honorable member tells us that his main objection to the free- trade policy is that under it we send money out of Australia for the purpose of obtaining necessaries from other people, although we should be able to provide them for ourselves. I would ask him to apply this doctrine to himself. I should like him to make all his own clothes, his own boots, and his own bread. What, would be the result ?

Mr Robinson:

– Indigestion.

Mr KELLY:

– Not only that, but in a very short time he would be seated like an Australian Diogenes in a barrel of his own manufacture, reading by the light of an oil lamp - his own oil, by the way - and waiting to find an honest man - himself ! I think that my honorable friend will agree that he could” not apply his own arguments to himself. It is all very well to experiment on the country, but it is not such a good thing to ‘ experiment in the same way on anything so valuable as my honorable friend. The honorable member’s answer to this personal application, of his doctrine would naturally be that he would only seek to make for himself that which he could make at a profit. Surely we may ask him to extend the same consideration to the country which he is prepared to saddle with this bonus principle. If the question is one of what we can profitably make, surely the industry now under discussion can be said to be one that we can profitably carry on only when it can be maintained without the assistance of the State. The honorable member in charge of the Bill, with all his usual ability, and with the best intentions in the world, told us that the development of the iron industry would lead to more mining and manufacturing of the metals extracted. But he seems to have overlooked the fact that to take men into a new industry means to takethem from industries already in existence. At ,the present time we import our iron and steel. If iron and steel could be made in Australia without taxing the people for their manufacture - that is to say, if they could be made at a profit - no- one would be better pleased than the free-trade members of this House. But the manufacture of these articles in this country under present conditions would mean a loss to the people, and it would also mean that persons at present employed in natural occupations would have to be taken from those avenues of employment, and put into new occupations which are not profitable to the people as a whole. What about the wharf labourers, and the people who handle these goods when they are imported? Are they to have their occupations taken from them? Are they to leave the open light of day where they at present carry on their occupations, and to enter factories, and work in the bowels of the earth?

Mr Austin Chapman:

– They will be handling the exports.

Mr KELLY:

– Then is it for the benefit of the export trade that my honorable friend is proposing a bonus - a bonus which he proposes to succeed by a protective duty ? I hold that the persons’ who are at present engaged in handling imports, ought not to be taxed for the benefit of an industry which will tend to take their occupations from them, and which will saddle the country with an unprofitable investment.

Mr Robinson:

– Worse than the Western Australian railway.

Mr KELLY:

– Almost as bad. The honorable member for Eden-Monaro spoke of the millions that we were sending out of Australia to pay for these imported articles. I presume that he referred to millions in gold. That was one of the honorable member’s figures of speech - a golden period, I suppose ! I am very much surprised that he should have sought, not to mislead, but certainly to mesmerize the House with such a palpable error. We all know that a country pays for its imports with exports. The honorable member is aware that if we paid for our imports with solid cash, in a very short time - probably in less than a year - our supplies of bullion would be exhausted. It is true that Ave export gold as a product, but we do hot export it as a means of exchange. The amount of gold in the country is only about one-sixth of our annual income from private and public sources of wealth in Australia. The amount of gold and notes in Australia is about £30,000,000, whereas, the annual income of Australia is nearly £178,000,000, the total wealth being nearly .£910,000,000. It is therefore impossible that any honorable member who realizes the facts should be taken off the track for a moment by thinking that we are sending gold out of the country to pay for our imports of iron. Our total imports amount to .£40, 500,000 ; the exports amount to some £43,000,000 - this was in 1902.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– How much of that is interest?

Mr KELLY:

– I am quite prepared to admit that a great proportion of that is in- terest. I think that about £8,000,000 is interest on public debts, and probably about £1,500,000 is interest on municipal debts. But I will take the imports from, and the exports to, Germany as being a fair example, the two States not being in the position of debtor and creditor. The imports to Australia from Germany amounted in 1902 to £2,650,000. The exports to Germany direct amounted to £2,540,000. The balance on the side of Germany is, apparently, about ,£100,000. But honorable members know that a great deal of the wool which is exported direct to London afterwards finds its way to Germany, and consequently this apparent advantage to Germany is really made over to Australia. The honorable member for Eden-Monaro mentioned Germany in his argument. But, as a matter of fact, his arguments can be absolutely disproved from the case of’ the country from which he asks us to take an example. Another point which the honorable member made was that German manufacturers sell at such a profit at home, that they can afford practically to give away their goods to outside people. That is, they can afford to give away to outside people what they are taxing their own people to produce. If that is an argument in favour of an iron bonus, I can only say it is an extremely weak one ; and if Germany indulges in so wild a scheme, I sincerely hope that this Commonwealth” will never embark upon such folly. I may recount my objections to this Bill. To grant a bonus is a more open way to help an industry than to impose a duty. Nevertheless, I do not think that any industry that requires a bonus .to assist it is an industry that we can term natural to the country. It is not an industry that is profitable, if it means taxing the people in order that it may be carried on. If an industry is established by such .means, it is also probable that in years to come we. shall be asked for yet more money to save the money wasted in establishing a bonus-fed concern, lt means that we shall be diverting employment from occupations in which men now find a livelihood, not only for their own benefit, but for the benefit of the whole people, into occupations which can only remain in existence by means of a large and probably increasing tax on the general community. For these reasons I shall oppose the second reading of the Bill.

Mr. HIGGINS (Northern Melbourne).I do not intend to change my vote with regard to this Bill for the mere reason that the measure has been taken - as I think ungenerously - out of the hands of an honorable member bv a political rival. There is a great dear of force in the view which has been put by the honorable member for Bar.rier and others, that the iron industry is sure to be a monopoly. I perfectly agree that if there is any industry that is sure to be a monopoly in Australia it is this. Having regard to the local demand - and it is only the local demand that we can look to - and to the amount of capital necessary to start an industry of this sort, the industry must become a monopoly, either immediately or very soon. It must become a monopoly by combination of capital or by combination of companies. My objections to the Bill on that ground are largely modified by the inclusion of sub-clause 2 of clause 8, which gives the Government of a State the power to take over the industry on paying to the owners of it the value of the land, plant, and materials. This provision was suggested by me on the 1st August, 1902. On that occasion I said -

I should like, therefore, to make a suggestion - that we should insert a clause in the Bill to the effect that, if bonuses be granted to any private company or firm, there shall be an option for the State to take over the industry at a valuation to be fixed upon giving a certain notice.

The right honorable member for Adelaide, who then had charge of the Bill, said that the Government would have no objection to insert a clause of that sort. Another reason why I support the measure is that this is a most novel industry to be started in this country, and would be worked under novel conditions. It would be a huge enterprise in respect to the capital embarked. There is a tremendous combination to fight. There can be no doubt that the industry, when it is started, will- have to face and fight one of the strongest combinations in the world, because, after all, the Australian market in steel rails and iron is of some value to thos? gentlemen who control the iron industry in America. If, therefore, there are private persons who are willing to take the risk, we should be only too glad to let them’ do so. We should let them try the experiment, and let the State profit by it. I do not wish to let the State in for an indefinite, unknown, unlimited liability. I much prefer that we should put down a certain sum of money - say, £125,000 or £200,000. We should know the limit of our waste - of our expenditure. If, however, we were to start the industry by means of the State, we should be led on from expenditure to expenditure. No one would know how much expenditure would be involved in the risk. Private enterprise has been the best pioneer. It has made roads in the bush, and schools in the back country, and has even provided for the administration of justice in the first instance. But I hope that in the course of time, when the States Parliaments are more liberalized, we shall have an opportunity to take over the industry, and work it under national control. It has been said that the railways have been worked well by the States, and that therefore there is no danger in the States taking up the iron industry ; but, strongly as I feel about the inexpediency of leaving these huge industries to the play of private greed, I say that it would be most unwise for the States to embark in enterprises without the certainty of success. Railways have been, and are being, successfully worked by the States, but all Aus- tralian railways must be in Australia, whereas it is not necessary that the iron used in Australia shall be made here. Furthermore, I feel that the States will not enter upon this industry under present conditions, and that we shall be guilty of a breach of trust to the people if we allow our grand deposits of iron ore to remain unused. The iron industry is not like another; industry. It is a parent industry, round which other industries cluster like chickens round a hen.

Mr Conroy:

– Is that not a reason why it should not be a monopoly?

Mr HIGGINS:

– It will be a monopoly ; but, nevertheless, having regard to the power of the State to take it over, I shall vote for the Bill. There is no analogy between the iron industry and other industries. Where the iron industry is established, all sorts of other industries are to be found clustering round it. I would sacrifice any theory to see this industry started In Australia. An honorable member has said that the establishment of the iron industry will draw men from other employments, but I shall be very glad if we can provide more employment. It is heartrending to see able-bodied men unable to secure work by which they can obtain an honest living, and it should be our policy, so long as we do not do injustice, to obtain employment for those who wish to live honestly.

Mr.Conroy. - Will the honorable and learned member vote for the collection by direct taxation of the money required for this bonus?

Mr HIGGINS:

– I have not thought over that question, but I do not wish to prevent the starting of the industry for the sake of a fad.

Mr Conroy:

– What is proposed now is to take it from the workers.

Mr HIGGINS:

– I am as much in favour of direct taxation as is any one, but it would be a mistake to drag in a condition which would defeat the Bill. I shall, however, listen to the honorable and learned member’s remarks, and I shall leave myself open to conviction in case he brings sufficiently strong arguments to support his theories. I have given notice of an amendment which I hope he will support when the opportunity arrives. Clause 7 of the Bill provides that the payment of the bounty shall not be authorized unless the manufacturer of the goods furnishes satisfactory proof that they are of good and merchantable quality. I wish to provide that the Minister must also be satisfied that proper wages have been paid, and proper conditions of labour observed. When last the matter was discussed, the Minister in charge of the Bill was willing to accept that amendment. I do not believe in giving public money to private persons unless they pay a public scale of wages. I do not like the idea of giving public money to private persons at all ; I would rather hand private money to public persons. But in granting this bonus, the Commonwealth should say to the manufacturers, “ We do not care twopence for your industry unless the human life which is to operate it is properly preserved and remunerated.”

Sir John Forrest:

– There are Wages Boards and Arbitration Acts.

Mr HIGGINS:

– Yes ; but the industry will be started in a State which has no Factory Act applicable to the wages. I should be only too glad if we could establish the iron industry in Victoria. But I see no chance of doing that at present. I hope that we shall obliterate the artificial boundaries of the States as much as possible, and I shall be only too glad if the industry is successfully established in Tasmania and New South Wales. In the former State I have seen a mountain of iron ore, while I believe that there are other ample deposits there and in New South Wales. Feeling as I do the importance and the greatness of this industry, and knowing what a tremendous incentive the production of iron has given in England and elsewhere to other industries, I shall vote for the Bill.

Sir JOHN FORREST:
Swan

– I may say at the outset that I shall vote for the Bill. A great many of the arguments which we have heard as to the undesirability of granting the proposed bonus would apply to almost any proposal of the kind that might be brought before this Parliament, and no doubt those who have advanced them would have opposed the insertion in the Constitution of the provision under which bonuses may be voted by the Federal Parliament. The object of that provision, however, was that bonuses, when considered necessary by Parliament should be voted, and therefore those who support the present proposal cannot be said to be doing something which was not contemplated by the framers of the Constitution.

Mr Lonsdale:

– Contemplated to benefit the capitalists.

Sir JOHN FORREST:

– That is becoming a stale cry. The honorable member must advance some argument before he will be listened to.

Mr Conroy:

– The right honorable gentleman cannot pretend that the granting of a bonus is being proposed for the benefit of the workers, since only 400 men are employed in one of Mr. Carnegie’s Pittsburg mills.

Sir JOHN FORREST:

– I denied the accuracy of that statement last night. The Commonwealth has no land of its own, nor can it encourage settlement by legislation in regard to railways, mines, or waterworks. The one great thing which it can do to assist Australian industries and to promote the material advancement of our people, is to vote bonuses for the establishment of profitable industries such as the iron industry ; and I hope that the proposal now under consideration is only the first of many similar proposals. I have no wish to unduly coddle our industries for all time, but we ought to try to establish new industries, in order to open up fresh avenues of employment, and to create new sources of wealth. If Ave can do that by the payment of moderate bounties we shall do an exceedingly useful work.

Mr Conroy:

– How are we going to get the money ? We cannot get it out of the air.

Sir JOHN FORREST:

– I shall not answer the honorable and learned member’s questions. I do not understand why he interrupts me in this way.

Mr SPEAKER:

– Interjections which are short and of rare occurrence are not objected to, but interjections which are frequently made, and are of such length as to interrupt a speaker, cannot be allowed.

Sir JOHN FORREST:

– We are called upon to decide whether we shall exercise the powers granted to us under the Constitution, or whether we shall altogether disregard our great obligations, and stand before the country as merely an additional legislating machine, for the purpose of passing laws of general application which are not intended to exert a direct, influence upon our producing interests. The honorable member for Barrier said he would favour the granting of bonuses if the iron industry were placed under State control, but that otherwise he would rather see the mineral wealth of the country lie dormant. I altogether disagree with that attitude. Apparently if the honorable member cannot secure the establishment of the industry in the particular way he desires, he . would rather not have it at all. If we were guided by the same principle in the affairs of daily life we should meet with general condemnation. If we cannot secure the object we have in view in the way that seems to us best, we should be content to attain it by other means. The honorable member for Northern Melbourne stated that the iron industry must be a monopoly, but I do not know that that necessarily follows. There is nothing in the Bill to indicate that only one company shall take advantage of its provisions. In fact,. I hope .that the iron industry will be carried on in several of the States which possess enormous deposits of iron. Before we agree to this Bill, we are called upon to satisfy ourselves upon several points. The first of these is whether there is abundance of iron ore in Australia. I think it is generally admitted that this question can fairly be answered in the affirmative. The second question is, “ Is the industry a desirable one to encourage ?” It is undoubtedly very desirable that the parent industry of iron manufacture should be carried on in our midst. In the third place, we have to ask ourselves whether, in the event of the industry being assisted in the manner proposed, it can be maintained in working order as a commercial undertaking without further help from the State. I am not in a position, personally, to answer that question. The matter is one upon which I must take the opinion of others, Those who are competent to judge affirm that the industry can be established upon a firm basis, and they are willing to support their opinion by a large expenditure of their own money. All . these questions have been investigated, and have been satisfactorily answered by the Barton and Deakin Governments, and by the Iron Bonus Commission. The total amount proposed to be offered in the shape of bonuses is £324,000. Of this amount, £250,000 is to be offered for the production of pig iron, puddle bar iron, and steel, produced from Australian ores. £20,000 is to be offered for the production of spelter from Australian ore, £50,000 for the production of galvanized iron, wire netting, and iron or steel tubes or pipes, and £4,000 for the manufacture of reapers and binders, at the rate of £8 each for the first 500. £324,000 may seem, at first sight, to be a large sum, but it represents a sum of only about £16,000 per annum at 5 per cent. - allowing 1 per cent, for a sinking fund - for fifty years, at the end of which time the whole amount would be paid off. The question for us to consider is whether >t would pay the Commonwealth to devote that amount of money to the establishment of the iron 1 industry. I think it would. It would be a very poor industry indeed if it did not prove to be worth that much to the people of Australia. I look upon this proposal from a purely business standpoint. If we establish the iron industry we shall provide employment for our people. The honorable member for Werriwa stated that only 400 persons would find employment, but it is absurd to suppose that that number of hands could perform all the work connected with such a large industry. Operations would have to be conducted upon a comprehensive scale, and the number of persons who would be directly and indirectly employed in winning the ore and in reducing it down to a marketable commodity, would be very large indeed. Then, again, if we manufactured iron from our native ores, we should become a much more selfcontained community than at present. Instead of having to import all our pig iron and other iron, and all that we require in manufactures of metal, we should in time be able to supply our own requirements in that regard, and we might also in time become exporters. I have taken the trouble to refer to the speech that was delivered by the right honorable member for Adelaide on the 27th of May, 1902. I have accepted his statements as accurate, because I have not the slightest doubt that, as Minister in charge of the Bill, he would take the greatest care to assure himself that the facts were accurately placed before him. He stated that, in 1901, 155,259 tons of raw material principally in the form of pig iron, valued at £1,117,430, were imported into the Commonwealth. We should make a very good start if we could produce that quantity of iron to meet our own requirements. During the same year our imports of manufactures of metals were valued at £6,800,000. Of course, for many years, we should not be able to manufacture anything like all the goods of that kind required by us, but there are undoubtedly immense possibilities before us in connexion with the development of our iron resources. We must remember also that, before the bonus of £250,000 can be claimed, those who engaged in the manufacture of iron, and who desired to claim the bonus, must spend about £500,000 upon buildings and plant. The right honorable member for Adelaide stated that it was estimated by some persons that £1,000,000 would have to be spent, and byothers, that £750,000 would have to be embarked in the enterprise. But he wished tobe on the safe side, and adopted an estimate of £50°>°°o-

Mr Lonsdale:

– Would they be required by law to expend that amount ?

Sir JOHN FORREST:

– I understand that they could not produce iron without spending that amount of money in buildings and plant.

Mr Lonsdale:

Mr. Sandford, of Eskbank, says that £125,000 would be sufficient.

Sir JOHN FORREST:

– I derive my information from the speech of the right honorable member for Adelaide. The company, or companies, who entered upon the manufacture of iron would have to produce finished and marketable iron, valued at £[1,300,000, or steel valued at £2,000,000, before they could claim the £250,000 bonus. Therefore, it appears to me, that they will have to give the strongest proof of their bona fides before they can claim one penny of the bonus. No better security could be offered to the State. No one who did not intend to embark in the industry with a view to establishing it upon a firm basis would be induced to make such a large outlay. I have no doubt that it would be possible to arrange with the States Governments for the purchase from the local manufacturers of a very large proportion of their requirements in the way of manufactured iron, at prices, not more, and perhaps less than “those which they are now paying. I believe that the States Governments would, for instance, be willing to enter into an engagement to purchase so many thousands tons of steel rails, within a certain time after the iron works were in full swing. That would be a good thing for the contractors, and also for the States. However, that is a matter upon which an agreement could be made under regulations. I am quite certain that a great deal could be accomplished in that direction. I confess that I am surprised at some of the arguments which have been advanced to-night, because they all seem to be based upon what I regard as a fiscal fetish. From the views expressed by some honorable members, one would imagine that fiscalism was like the law given to Moses upon Mount Sinai, and that there was no room for a difference of opinion in regard to it.

Mr Conroy:

– Nor is there amongst educated men.

Sir JOHN FORREST:

– I suppose that the honorable and learned member includes himself in that category?

Mr Conroy:

– I shouldthink so. I did not spend years in studying the question without becoming educated.

Sir JOHN FORREST:

– Greater men than the honorable and learned member have entertained entirely different views.

Mr Conroy:

– I do not know them.

Sir JOHN FORREST:

– That fact does not prove anything. I am surprised to learn that some honorable members believe there is no room for a difference of opinion upon the fiscal question. It seems to me that if they cannot obtain a thing which in itself is good - I refer to the establishment of the iron industry - in the particular way that they desire, they will not have it at all. For many years we have been longing for the establishment of that industry, and it is not yet started. As reasonable individuals, have we not pursued a waiting policy long enough? If that policy has been productive of no result, is it not time that we devised some other plan to gain our ends? We are all agreed as to what we require, and we differ only as to the method of attaining it. In regard to the iron industry, we occupy the same position now as we did when this country was only occupied by the aborigines and by kangaroos and dingoes. Surely now that we enjoy a uniform Tariff, and possess the power to grant bounties, we should not continue inactive simply because of the fiscal views which we may entertain? In this House there are advocates both of free-trade and protection ; but to my knowledge no honorable member who is a free-trader has ever suggested that the locally produced article should bear an excise duty equal to the Customs duty levied upon the imported article, which is the basis of the free-trade doctrine.

Mr Conroy:

– I advocated the adoption of . that course in regard to matches.

Sir JOHN FORREST:

– I should like the honorable and learned member to again advocate it. because the ordinary free-trader in this House and throughout the country scouts the idea. If the proposal to grant a bonus were a new idea in Australia, there might be some reason for taking exception to it. But Ihave been accustomed to the bonus system ever since I had anything to do with politics. In Western Australia we have a small population, and a large territory to develop. Consequently, we gave bonuses in all directions, with a view of promoting and assisting the industries of the country. I cannot recollect how many were given to promote copper and lead mining. Then again, others were granted to encourage coal-mining and prospecting for gold. Bonuses were also paid for the erection of tin smelters, and land was given to encourage the construction of railways. All sorts of inducements were offered to persons to develop the timber industry, and cash bonuses were granted to encourage deep sinking in mines, and boring for gold and other minerals. Similarly we gave subsidies to steam services all along the coast - subsidies which are still being paid.

Mr Robinson:

– The Western Australian Government has no power to grant such subsidies now. It is unconstitutional to do so.

Sir JOHN FORREST:

– The steam-ship subsidies are granted ostensibly for the carriage of mails ; but the Government pays a large sum to’provide means of communication between the coastal settlements and the capital. Then again, bonuses were offered for the discovery of gold and other minerals, and for assisting immigration. When we pay the passages of persons from the old country, and give them free grants of land to induce them to settle in our midst, is that not a bonus ? Yet that practice has been followed in Australia for many years. Of course, where there is no necessity to encourage capital to develop the natural resources of the country, it is quite right that no bonus should be paid. But, if we reverse the position, we must use the power of the State. I have frequently heard the Prime Minister declare that the power of the State must be used to the utmost to develop the resources of the country. My only fear is that the bonus proposed is not sufficiently large when we consider the magnitude of the work to be undertaken. When we consider that the persons who establish the iron industry will require to invest, perhaps. £1,000,000 in the enterprise before they can gain this bonus, it cannot be urged that it represents a very large sum. I claim that if we can secure the permanent establishment of the iron industry by an expenditure of £250,000. that outlay will be amply justified.

Mr Webster:

– How will that fit in with

Mr. Chamberlain’s proposal?

Sir JOHN FORREST:

– In my opinion, there is no force in that interjection. Nobody in England expects Australia to benefit the mother country by injuring herself, and consequently I must conclude that the honorable member’s interjection is prompted by some ulterior motive, rather than by a desire for information. I understood the honorable member for Barrier to say that though he intended to vote for the second reading of the Bill, if the industry is not to be controlled by the State he would prefer that it should not be established ?

Mr Thomas:

– Yes.

Sir JOHN FORREST:

– Then the honorable member would leave things as they are? Having this great opportunity, he would refuse to take advantage of it.

Mr Thomas:

– Private enterprise would still be at liberty to establish the industry if it chose.

Sir JOHN FORREST:

– There is a goal which we all desire to attain. Therefore, we must not remain content with existing conditions;’ we must push boldly forward. This afternoon I heard opinions expressed which are more than usually opposed to the views I entertain. I would rather make the attempt to establish this industry and progress a little upon the road than make no attempt at all.

Mr Thomas:

– The right honorable member is a Socialist.

Sir JOHN FORREST:

– Those who urge that they will do nothing to secure the establishment of the iron industry unless it be established in accordance with their own fixed convictions, are not the persons to make Australia a great country. If the pioneers had followed a similar course, and if the State had not granted assistance to industries, Australia would not occupy the position that she does to-day.

Mr Poynton:

– The right honorable member is a State Socialist.

Sir JOHN FORREST:

– I do not see any State Socialism in the matter. It might as well be said that it is State Socialism for the Government to construct a railway. The State Socialism I would advocate is not the State Socialism Avhich honorable members opposite would advocate.

Mr Webster:

– The right honorable member would go further than I would in some respects.

Sir JOHN FORREST:

– I should endeavour to make two blades of grass grow where only one grew before, and to develop the natural resources of the country.

Mr Lonsdale:

– Why give £324,000 to other persons?

Sir JOHN FORREST:

– The honorable member seems to think a great deal of £324,000 ; but the question is, whether it will pay Australia to give this amount to establish a new and great industry. If we could obtain millions by the expenditure of £324,000, we should not be afraid to undertake the investment.

Mr Conroy:

– Nor would any one else.

Sir JOHN FORREST:

– But honorable members opposite would sit down and do nothing. I have had to do with this class of honorable member before - do-nothing croakers - who see no good in any proposal of this kind. They would rather see the country at a stand-still, and half ruined, than abandon their fetish. Those who will not go forward in the development of the country, must lag behind ; but they cannot expect us to stay with them. We have only one object in view, and that is-

Mr Lonsdale:

– To help the capitalists.

Sir JOHN FORREST:

– Our object is to develop the natural resources of the country, and by that means build up new industries, and provide new employment and new wealth for the people. I hope that the narrow-minded viewswe have heard this afternoon will receive short shrift when we come to vote on the measure ; if not, we may well despair of getting any good work out of this Parliament. Power is given to us by the Constitution to assist the industries of Australia ; I hope we will use that power to the fullest extent ; and I believe that if it is wisely used, it will be the means of doing an immense amount of good.

Mr MCWILLIAMS:
Franklin

– I regret the manner in which this Bill has been placed before us. I submit that we are not dealing with a matter of this kind in a proper way. It is not right for a private member to introduce a Bill, involving an expenditure of £324,000, taken out of the pockets of the taxpayers, when that private member has not the slightest responsibilitv as to the means by which this money shall be provided. A Bill like this should come before us with the hall brand of the Government. Considering the condition of the finances of at any rate, some of the States, a proposal of this kind should be accompanied by a clear statement of the manner in which it is proposed to raise the money. We had the Budget laid before us yesterday, and it will be discussed next week ; and, therefore, it is not my intention, even if you, Mr. Speaker, were to allow me, to deal with the financial aspect of the question now. But I cannot support a proposalto take £324,000 out of the pockets of the taxpayers, and place it in the pockets of a few speculators. If this Bill were passed, no State in the Commonwealth would in my opinion, reap so much benefit as the State I have the honour to represent. Mr. Jamieson, who gave very lengthy evidence before the Royal Commission, distinctly stated that it is the intention of the promoters of this scheme to obtain their iron ore from the Blythe River deposits. I candidly say at once, that none of the statements which have been made to-night by the advocates of the Bill have in the slightest degree over-estimated the enormous extent of those deposits. There are practically huge cliffs which have been proved to be first class iron ore, and I believe, if its treatment were undertaken as a business without a bonus, it would yield an exceedingly handsome profit. But what is the position ? If there is one thing that has to be said for the gentlemen who gave evidence before the Royal Commission, it is that they were absolutely outspoken and honest. So far as [ can see, they attempted to hide nothing, but threw their cards directly on the table, so that every member of the Commission, every Member of Parliament, and every man and woman in the Commonwealth who desired, might see whatwas proposed. According to the evidence reported, ore can be produced at Blythe River, transferred to Lithgow, and there converted into iron at a cost of 35s. per ton.

Mr Webster:

– Ridiculous !

Mr McWILLIAMS:

- Mr. Sandford is reported on page 55 of the report of the Roval Commission to have said -

After supplying modern blast furnaces, thoroughly well equipped, and every necessary appliance, from material already secured in the shape of the iron ore, coal, and limestone, pig iron could be produced at Lithgow for under 35s. per ton.

Mr. Jamieson, who gave his evidence immediately before Mr. Sandford, distinctlystated that it is the intention to use ore from the Blythe River deposits.

Mr DUGALD THOMSON:
Minister for Home Affairs · NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906

– That had reference to a different scheme.

Mr MCWILLIAMS:

– It is distinctly stated by Mr. Jamieson that it is the intention to use the Blythe Riverare - which he regards as the best - in the works we are now asked to subsidize.

Mr DUGALD THOMSON:
Minister for Home Affairs · NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906

Mr. Jamieson has nothing to do with the other company.

Mr Lonsdale:

Mr. Jamieson was speaking of works up the Parramatta River.

Mr McWILLIAMS:

- Mr. Sandford and Mr. Jamieson gave evidence on exactly the same point.

Mr DUGALD THOMSON:
Minister for Home Affairs · NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906

– They represent rival interests.

Mr MCWILLIAMS:

– A little further on in the evidence the honorable member for Bland, who questioned Mr. Sandford very closely, and obtained a great deal of valuable information, elicited the fact that over and above the cost of the article imported there was shown a profit of 12 s. 6d. to 15s. per ton. But another fact, which to my mind is much more important, can be found in the evidence. Both the witnesses I have mentioned declared that, in addition to the bonus, a duty of 10 per cent, on English iron and 20 per cent, on foreign iron would be necessary to enable them to carry on the works.

Mr Webster:

– Is that during the currency of the bonus, or afterwards?

Mr MCWILLIAMS:

– After the bonus has ceased. Unless we are prepared to impose a protective duty we should notpass this Bill. Is it not worse than a farce to ask us to sanction the payment of £250,000 or £324,000 as a bonus, and immediately after the bonus is expended to allow the industry to die? If we pass this Bill it must be on the distinct understanding that we shall impose a protective duty ; and Mr. Jamieson’s . opinion is that it would be advisable to make that duty 20 per cent, all round. Some honorable members are honestly agitated in their minds about the position of some of the industries in Victoria at the present time. A duty of 12½ per cent, is imposed on agricultural machinery, such as ploughs, which are composed wholly of iron or steel, implements like the double-furrow lever plough containing the best part of a ton. If a duty of 20 per cent, be placed on the raw material of the manufacturers of those implements, in what position will their industry be placed ? If we impose a duty of 12½ per cent, in favour of the local article, and then place a duty of 20 per cent, on the raw material, out of which those implements are made, we practically wipe out the protection. It will be necessary, if a heavy duty be placed on the raw material, to increase the duties on the manufactured articles at least to a corresponding degree.

I am pointing these facts out in order that honorable members may see in what direction this proposal tends. The honorable and learned member for Darling Downs, who put the case very clearly and forcibly, welcomes this bonus as a forerunner of an all round bonus on every industry that shouldbe started in Australia. But the question faces us, who is to pay the bonus? Queensland has more than reached her 75 per cent, limit - that is to say that State is receiving less than 75 per cent, of the Customs revenue. In Tasmania, speaking from memory, we have got down to within £16,000 of our percentage.

Mr Webster:

– £2,000.

Mr McWILLIAMS:

– I am sorry that it is as low as that - I thought that it was £16,000 - but it makes my case all the stronger. If Tasmania is to pay its share of this bonus, where is it to. obtain the revenue? We are practically asked to go to the people of Queensland and Tasmania, and say to them, “ Impose direct taxation in your State in order to establish this industry.” I am not prepared to do that. I think that this question of a bonus should be looked at from a very serious stand-point. If a bonus be granted to this industry, a bonus cannot be refused to the cotton industry. And if a bonus be granted to the cotton industry a bonus cannot be refused to the ship-building industry. When such proposals are made we are brought immediately face to face with the financial position of the smaller States.

Mr Wilks:

– Where are they going to get the money from?

Mr McWILLIAMS:

– In Tasmania the expenditure has been cut down in every possible way. The salaries of civil servants have been reduced ; the salaries of the police have been reduced, and the salaries of railway men are very much lower than many of us desire to see them. Very heavy direct taxation is being imposed upon the people, in order that the State may be able to meet the claims which are made upon its resources by Federation. If we are to pass bonus Bill’s to establish industries throughout the different States, the State I represent will not be able to bear the additional taxation required. Believing, as I do, that the smaller States are not prepared to find the necessary revenue ; believing as I do that the iron industry would be a remunerative one if it were started by the capitalists who are behind this agitation-

Mr Wilks:

– How much does the honorable member think it would require to start the industry?

Mr McWILLIAMS:

– It could be started without a bonus for very much less than the figures which are given in this report. Believing, as I do, that if we were to place a protective duty on raw material, such as iron, which is in daily consumption in many of our factories, we should have to enormously increase the ‘duties on the products of those factories, or wipe them out of existence, making the second condition infinitely worse than the first - it will be my duty to vote against the second reading of this Bill. If we are to pay this bonus, and if this industry is to be a national one, I should prefer it to be taken up by one of the States, rather than by a few speculators.

Mr LONSDALE:
New England

– Ever since I have been a member of the House, I have stood against giving privileges to any section of the community. I am against giving privileges to capitalists in this, just as in the case of other Bills we have had before us. I have been against giving privileges to men who labour. I refuse to enable any persons to put their hands into the pockets of the people, and make their circumstances worse for their own especial benefit. It has been said here, of course, that the iron industry would be of very great benefit to the Commonwealth. Nobody denies that it would. If an industry, such as this, could be established naturally, and without being artificially propped, it would be a good thing for the Commonwealth. There are a large number of industries which, if established, would advantage the Commonwealth, but we do not propose to offer any assistance in those directions. In the past we have had a section of the community whose one idea has been to establish industries by some artificial means, their plea being that they would find employment for the people. A trial has been made in Victoria, and if there has been one failure greater than another in this State it has been the attempt to find employment for men by artificially building up industries. Nobody can recall what has been done here without realizing that fact. We cannot read the reasons which are being put forward for the failure of some of the industries which have been propped so long without realizing the absolute failure of any artificial means to establish an industry. If there are natural advantages and natural opportunities, and there is a demand for the product, the industry will naturally establish itself. But if those natural advantages do not exist, and there is no demand for the product of the industry no attempt of ours will succeed in establishing it by artificial means. It has been alleged here that all the world has given bonuses for the establishment of industries, but that statement is not correct. America did not establish her industries by means df bonuses. It is said, of course, that she established them by other artificial means ; but that statement is not correct. England did not give bonuses for the establishment of her industries. Germany and France established their industries by means of export duties. The only country which has given a direct bonus for the establishment of iron industries has been Canada. We are told that the successful establishment of its iron works was due to the bonus. If honorable members who quote that instance as a success have looked into the matter I do not know what they would call a failure. For twenty odd years bonuses have been given in Canada, and only within the last few years did the industry develop to any extent. During the last four years there has been some degree of development. In 1901, 150,339 tons of iron were produced, namely, 50,581 tons from foreign ores, and 99,758 tons from Canadian ores. In 1902, 341,654 tons of iron were produced, namely, 268,553 tons from foreign ores, and 73,101 tons from Canadian ores. In 1903, 321,191 tons of ore were produced, namely, 274,741 tons from foreign ores, and only 46,450 tons from Canadian ores. The mill which produced the greater quantity of that iron was that of the Dominion Iron and Steel Company. Last year it produced 205,000 tons, but from foreign ores. We have been told1 that that .mill was established by means of a bonus. Its construction was started in the autumn of 1899 - that is, in the very year when the Canadian Government had decided to reduce the bonuses year by year, commencing in 1902, until they ceased to exist in 1907. It should be perfectly clear to honorable members that it was not the bonus which induced the capitalists to put their money into the industry. The reason why they started was not because of the bonus, but because of the natural opportunities which they possessed They started their works at Port Sydney, in the midst of large deposits of iron ore. Not only where the mill was erected, but across the channel, on Bell Island, they had deposits of iron ore of the highest quality. On the coast of Newfoundland and Labrador they also had large quantities, of which they could avail themselves. They started their mill where they had not only deposits of ore, but also large deposits of coal of the highest coking qualities, and limestone could be brought from the water-side by water carriage to the mill. They started the industry at Port Sydney, which is 1,300 miles nearer to Liverpool, 1,000 miles nearer to the Mediterranean, and 700 miles nearer to Cape Town than Pittsburg, the great iron manufacturing centre of America, and even 200 miles nearer to Cape Town than Liverpool itself. Having all these natural advantages and natural opportunities for the production of iron, the capitalistsstarted their mill with the markets of the whole world before them. That was one of the great reasons which induced them to erect their mill at that point. In the autumn of 1899, as I said, they determined to erect the mill, and commence operations. One of the efficient causes in bringing about its construction was the formation of, the great American Steel and Iron Trust in March, 1901. The Canadians established their mill at Port Sydney for the purpose of becoming a competitor with that great trust. So far from the bonus being one of the efficient causes, in my opinion it was not, because, before the industry was started, the Government had resolved that the bonuses should decrease year by year until they ceased in 1907. Of course, like a large number of gentlemen who have influence upon legislators, the shareholders of the Dominion Iron and Steel Company had some influence on the Dominion Parliament, and, in 1903, they succeeded in getting an alteration of the bonus arrangement made. They got an additional bonus of $6 per ton for rolled wire nail-rods, of $3 per ton for rolled shapes, and of $3 per ton for rolled plates, and they got an extension of the time for the payment of the bonuses by one year. That is all the advantage they got in that direction, and it seems to me that instead of a bonus having had any beneficial, it had just the reverse effect. It is said - “If we establish these industries by means of a bonus, what a magnificent thing it will be for the Commonwealth. We shall be able to build our own navy. It will be unnecessary for us to continue our contributions to the British Navy, because this will enable us to build a- navy of our own at reduced cost. We shall be able to manufacture our own armour plates as the result of granting bonuses for the establishment of mills for the production of pig iron and steel, and shall receive other benefits in the same direction. We shall be self-contained as soon as this industry is established - we shall be able to make for ourselves all those things of which pig iron is the basis.” That is pure bathos.

Mr Thomas:

– It was twaddle of that description that brought about Federation.

Mr LONSDALE:

– Exactly. I shall not say that those who speak in this way believe that they are talking bathos. It may be due to ignorance on their part. Any man of common sense must know that such results are not likely to follow the granting of these bonuses. Canada affords us a practical illustration of what would happen. If these bonuses would do for Australia all that has been claimed for them, the adoption of a similar system in Canada surely should have done the same for that country, but it has not.

Mr Hutchison:

– Are not the conditions different ?

Mr LONSDALE:

– Probably they are; but all the natural advantages are on the side of Canada. The mills which produce the great bulk of the pig iron there have the markets of the world at their doors.

Mr Hutchison:

– Does the honorable member know that they have to import a large proportion of their ore?

Mr LONSDALE:

– I have already said that they do. They obtain it from Newfoundland, and receive a bonus in respect of pig iron made from foreign ore.

Mr Webster:

– Why do they use the foreign ore?

Mr LONSDALE:

– Perhaps because it is the best.

Mr Webster:

– I thought that the honorable member said that there was an abundance of suitable ore in Canada.

Mr LONSDALE:

– I distinctly stated that there were immense deposits of iron ore on the coastline of Newfoundland and Labrador, but ore obtainedfrom those districts is spoken of as “ foreign ore,” just as anything that we might obtain from New Zealand would be classed as foreign. During the last five years, in which the larger developments to which reference has been made have taken place in Canada, the value of imports of the higher manufactures of iron and steel into the Dominion has increased by 10,000,000 dollars, while the value of imports of the lower classes of manufactures - such as pig iron, railway rails, and iron and steel goods of lower qualities, has increased to the extent of 20,000,000 dollars, or a total increase of 30,000,000 in the value of imports. What was the increase of exports during the same period ? If this is such a magnificent scheme - if it will lead to the establishment of so many industries, as has been suggested - surely it should have led in Canada to something in the direction of an export trade. What has happened? The increase in Canada’s exports of all kinds of manufactured iron and steel during this period represents only a value of 2,560,000 dollars. That is the so-called success which has attended the granting of these bonuses in the Dominion. If it be a success, I do not know what honorable members opposite would write down as a failure. The very works to which I have referred have produced about 205,000 tons out of the total of 321,000 tons, so that honorable members will see that this great advance has depended solely on the efforts of one mill. I was informed a few days ago that even the company conducting those works had found it necessary to reconstruct - that they had spent too much money, and had to a large extent to restrict their operations. That may account for the falling off which has taken place during the last year, and there will probably be a still greater reduction in the output. The iron consumed by Canada is about double that which is used in Australia. From 800,000 to 820,000 tons are used in Canada every year, while we do not import more than about 350,000 tons per annum. One of the large blast furnaces in the United States would produce all that would be necessary to satisfy the requirements of the Commonwealth, even if we captured the whole local trade - a contingency of which there is no likelihood. If a capitalist were prepared to invest his money in this direction, I should not interfere with him, but we certainly should not put our hands into the pockets of the people to subsidize any one to start an industry that must fail. The evidence of the representatives of various capitalists is that the industry must succeed, and that a large profit will be made. If that be so, let them invest their capital in this direction, but do not let us encourage them to do so. If a man of his own free will chooses to start any industry in the Commonwealth, we should not stand in his way, but when a capitalist says to this House, “ You must take £320,000 out of the pockets of the people, and give it to me in order that I may start these industries,” I feel it my duty to stand between him and the people, and to refuse to be a party to anything of the kind. I would not be a party to giving a privilege to any one. I have always voted against the granting of privileges, and shall always vote against them in this Parliament. It has been said by the right honorable member for Swan, that an outlay of £500,000 would be necessary to establish these works.

Mr Robinson:

– But the right honorable member is an enthusiast.

Mr LONSDALE:

– He is anxious to make out as good a case as is possible, from the point of view of the capitalist. He did not believe any more than I did in the recent proposal to grant privileges to certain workers, but, unlike me, he would give privileges to the capitalist. Mr. Sandford, managing director of the Eskbank Iron Works, who ought to know more about the question than does the right honorable member for Adelaide - who was referred to by the right honorable member for Swan as a great authority on this question - said, according to the report of the Royal Commission, that-

He had made an agreement with an English syndicate to spend £250,000 in extending the Lithgow works if the Bill passed. In answer to another question, Mr. Sandford said that to make pig iron he wanted a plant involving an expenditure of from £100,000 to £125,000. This estimate is less than half the sum proposed to be paid in bonuses.

Thus, if this Bill be carried, the capitalists engaging in the industry will receive in bonuses a sum far exceeding the capital cost of the works. There is a good deal of the “heads I win, tails you lose” principle about their demands. They wish to be on the winning side from beginning to end, and if we assist them to establish the industry, pressure will be brought to bear upon us to increase the bonuses as soon as there is any sign of a collapse. We shall have their representatives lobbying honorable members, and urging the Parliament to increase the assistance necessary to keep the industry going. They will tell us that numbers of unfortunate men will suffer if the works be shut down, and if they are unable to secure increased bonuses, they will endeavour to gain the assistance they require by means of Customs duties. In that way, instead of helping our primary industries and manufactures, we shall do exactly the reverse. The right honorable member for Swan, who is now present, told us that he was speaking the truth, according to his lights. He certainly does not know very much about the question, and consequently made statements which would not bear the light of day. We are told by the honorable member for EdenMonaro, that the establishment of the iron industry would lead to the employment of a large number of men. I do not know, by the way, why the honorable member should have been allowed to take charge of this measure? I fail to see why responsible Government. should be dragged in the dirt in this way. The Ministry should be responsible for taxation and for the expenditure of all public moneys. I shall do all that I can to oppose this Bill, but not because I have not at heart, lo the same extent as has the right honorable member for Swan, the interests of the country. I have as strong a desire as he has to see Australia advance ; but, in this matter, I have the interests of the majority of the people, and not of the few, at heart. The honorable member for Eden-Monaro interjected that those employed on the wharfs would be benefited bv the export of iron. That shows how little he really knows about this matter. Our imports must be paid for by our exports, and if we can possibly decrease our imports of iron by producing all that is necessary for our requirements, Ave shall have to decrease our exports. Thus Ave might develop employment in the mills proposed to be established, and yet decrease the chances of employment in another direction. Every one who has studied political economy knows that imports are paid for by exports, and vice versa, so that if Ave decrease the one, Ave must” decrease the other. We ha*e only to look to New Zealand for an illustration of this. As the exports of that Colony have grown so her imports have increased; the one’ has counterbalanced the other. I shall not vote for the second reading of this Bill. I shall not vote for making the iron industry a State concern. If capitalists like to put their money into it, I have no objection, but I have a decided objection to the State having anything to do with it. Even if I believed in the State undertaking such enterprises, I should still oppose this measure, because I have a decided objection to the State taking up a losing concern ; and I am quite satisfied that this industry will never pay, although some people profess to believe that it will. If the measure is to be passed, I shall endeavour . to insert an amendment providing that the capitalists, out of their profits, when they make any, shall return to the Commonwealth the money .that has been granted to them by way of bonus, even if we do not charge them interest for it. I do not believe in this “ Heads I win, tails you lose “ business. If we are compelled by force of a majority of this House to help the capitalists in this direction, let us get the money back again.

Mr Poynton:

– Suppose the industry does not pay?

Mr LONSDALE:

– The honorable member for Melbourne propounded a scheme that I think is a good one in connexion with these iron works. There are a large number of people who desire to see the works established. They are protectionists and Socialists. The honorable member for Melbourne suggested the issuing of paper money for such a purpose. Let those who wish to have the industry established put their sovereigns into the venture, redeeming the notes which are issued out of .the profits from the concern. If the right honorable member for .Swan, and the honorable member for Eden-Monaro are anxious to establish the industry. let them apply their own money to establishing it, issuing the notes for the capital, taking them up themselves, and then redeeming them out of the profits, and as the honorable member for Melbourne said, they will then have the whole concern for nothing. That is the best advice I can give them. In other respects, the measure from beginning to end will receive no assistance from me. I shall seek to prevent this extra burden being placed upon the people. The amounts derived from Customs and Excise, which are returnable to the States, are being reduced year by year, and I object to placing any further burdens upon the people for the sake of a set of capitalists who do hot seem to be prepared .to stake their own money on the venture.

Sir John Forrest:

– Oh, yes, they are.

Mr LONSDALE:

– The Commonwealth will’ stake no money upon it if I can prevent it.

Mr WEBSTER:
Gwydir

– I have not much to say upon this question, because I recognise that it is useless to deal with it under present circumstances. There seems to be no sincerity in the desire that the Bill should become effective as a law.

I cannot realize for the life of me how a measure of this kind, involving the expenditure of such a large- sum of money, can be properly intrusted to a private member who is not, and cannot be, responsible for the money which will be required. In view of the state of the finances, as indicated by the Treasurer yesterday, I should like to know before we proceed further with the measure, whether ,the Prime Minister is prepared to give the House some guarantee that if it becomes law, the money that is required will be provided. If not, the Bill is of no use to any one, and to proceed with it is a farce. Have we a re-, sponsible Government in power? Is this an irresponsible- Parliament?

Mr McCay:

– Why did not the honorable member say that to the last Government ?

Mr WEBSTER:

– I am dealing with the Government that is responsible for the conduct of the business of the House. If that Government is sincere in its advocacy of this measure, I want to know what guarantee we have that if passed it will have any practical effect. The Treasurer yesterday indicated to us that over and above the 75 per cent, of our revenue that is returnable to the State Treasurers, the whole of the money is appropriated with the exception of £600,000; and he also indicated that after paying to the States the sum of £’450,000, on account of buildings acquired by the Commonwealth, there is only about £150,000 left to play with. If, out of that £150,000 we are to pay -O 20, 000 a vear to carry out the objects of this measure, are we going to raise additional Customs revenue? In the event of a shortage, are we to make no provision for raising extra money? It must be remembered that under the Braddon section of the Constitution, whatever extra taxation may be raised through the Customs, we have to return three-fourths of it to the States. If, therefore, large sums are to be paid for the development of the iron industry, it is clear that we shall have to raise an enormous extra amount through the Customs. The Prime Minister ought to tell us what his own attitude is. Of course we are aware that, in allowing the honorable member for Eden-Monaro to take charge of the Bill, the Prime Minister is merely playing to the party with which he has coalesced, and endeavouring to placate them. But the honorable member for Eden-Monaro cannot produce the necessary money himself. We may be quite prepared, as a Parliament, to pass a measure of this kind, but we are not prepared, nor is the Government prepared, to guarantee what is essential to make the Billeffective. It is all very well for the Prime Minister to shift his responsibility on to the shoulders of irresponsible honorable members. But that is not sincere politics. It does not show that the right honorable gentleman is in earnest. It will not carry conviction to the public mind when the people review the conduct of the Government. The people wish to know how the Commonwealth finances stand. We are fast approaching the time when there will be no surplus to return to the States beyond the three-fourths of the Customs and Excise revenue returnable under the Braddon section of the Constitution ; and if money must be raised to meet the expenditure proposed in the Bill, the public would like to know how the Government intend to raise it. Before supporting the measure we should knowthat it is. not being proposed merely to placate a section of the House, and that it is intended, if possible,to carry its provisions into effect. If I have a guarantee that the money necessary to carry this proposal into effect will be obtained without increasing the taxation of the people, I shall be willing, supposing that the States will not enter upon the industry, to see it established by private enterprise under the bonus system. But the Prime Minister will not give us the assurance that the Bill will be carried into effect. He has not told us how, if it were passed, he would obtain the money to pay the bonuses which are offered - whether by direct taxation or by raising four times as much as is required through the Customs. Why, then, should we waste the time of the House in discussing it?

Sir John Forrest:

– The Treasurer of the Deakin Government, which introduced the Bill, is the Treasurer of this Government.

Mr WEBSTER:

– He was then Treasurer in a protectionist Government ; to-day he is a member of a Ministry half of whom are protectionists and the other halt freetraders. Because of the narrowness of his majority in the House, the Prime Minister is afraid to take action, and therefore has done what has never been done by a responsible. Minister in Australia before. In allowing a Bill involving the expenditure of £324.000 to pass into the charge of a private member.

Mr McCay:

– That was done by the last Government withthis same measure.

Mr WEBSTER:

– That is a tarradiddle.

Mr McCay:

– It is a correct statement.

Mr WEBSTER:

– The decision of the late Government in regard to the measure had my opposition.

Mr McCay:

– The honorable member asked for a precedent

Mr WEBSTER:

– That is not a precedent, because the action did not take effect. What folly we are perpetuating in this make-believe about the Bill ! I ask the Prime Minister for the assurance that if we pass the measure he will find the money necessary to carry it into effect. If his silence means that he will not, I hope the people will know that the Government are not prepared to show their sincerity by backing up the private member into whose charge they have given the measure. I regret this huckstering on the part of the Government in this early period of the history of the Federal Parliament. Do they intend to relegate their responsibility to a private member in every case? This is not responsible government as Sir Henry Parkes knew it, and if he were a member of this House, he would denounce the action of the Ministry in shirking their responsibilities.

Mr Wilks:

– He did the same thing himself when he gave the Payment of Members Bill Into the hands of a private member.

Mr Reid:

– Yes; a Bill which meant the expenditure of millions of pounds, operating indefinitely.

Mr WEBSTER:

-The Payment of Members Bill was handed over to a member of his own Government. The honorable member for Eden-Monaro is not a member of this Government, and has hitherto been an opponent of the Prime Minister. Tt is alleged that he is being placated so that the Government may retain the favours which they have won.

Mr Austin Chapman:

– Who alleges that ?

Mr WEBSTER:

– It is alleged within the precincts of this House.

Mr Austin Chapman:

– Let the honorable member name one man who has alleged it. He cannot.

Mr WEBSTER:

– It is common property.

Mr Reid:

– They who allege it are common something else.

Mr WEBSTER:

– It is unparliamentary for the Prime Minister to say that.

Mr McCay:

– Is not the honorable member ashamed to make such statements?

Mr WEBSTER:

– I do not answer questions of that sort. The action of the Government is calculated to bring this Parliament into disrepute. They have handed over to a private member a Bill which provides for the expenditure of j£$ 24,000, and we know from the history of other Parliaments that all sorts of corruption may be encouraged under such conditions. We have been told by the honorable member for New England that proposals such as those contained in the Bill lead to endless lobbying, and to the adoption of other methods of exerting influence that tend to lower the standard of parliamentary institutions. The Prime Minister should take the full responsibility of introducing the Bill, and conducting it through this House. Do the Government propose to hand over all important Bills to private members amongst their supporters? They have already laid down a precedent that may be fraught with the most serious consequences to the people of the Commonwealth. We know of the corrupting influences which have operated in other countries, and we may take it for granted that some people in the Commonwealth will not be behindhand in seeking to sway honorable members who have such heavy responsibilities thrust upon them. When the Bill reaches the Committee stage I shall endeavour to secure the adoption of an amendment which will have the effect of bringing the iron industry under State control. If I fail in that respect, I shall vote in favour of offering bonuses to private individuals who are willing to establish the industry under conditions which will safeguard the public interests and provide for the resumption of the industry by the State upon reasonable terms. I believe that .if the iron industry were established in our midst under proper conditions it would prove of great advantage to the Commonwealth, because it would enable us to make some use of our undoubtedly valauble iron deposits, and, at the same time, provide employment for a large number of our people. I scarcely expect, however, that the Bill will become effective under present circumstances, because I do not know where we are to get the money with which to pay the bonuses.

Mr Austin Chapman:

– The Treasurer has stated that he can provide the money without any difficulty.

Mr WEBSTER:

– We have had no such assurance from the Prime Minister, and I decline to attach any weight to a statement of that kind, made by the irresponsible member who has had the Bill placed in his charge. If the Government desire that the measure shall be passed why do they not take the full responsibility in regard to it, and inform honorable members that provision will be made for the payment of the bonuses ? . I am sure that the Treasurer would not have made, even privately, a statement such as has been attributed to him without consulting his chief. Why, then, cannot the Prime Minister tell us distinctly what the Government intend to do? I am sure that the Prime Minister is not sincere in this matter. His sole idea is to placate his protectionist supporters, whom he is trying to keep together, in order that he may steer his way safely into recess. The Government are merely fooling the people when they allow a measure of this kind to be brought forward by a private member without making any provision for the disbursements that will have to be made if the measure is to become effective. What, is the use of our debating this subject? Can the honorable member for Eden-Monaro assure me that the iron industry will be brought into existence if this measure is passed ? If he cannot do so, he must admit that the proposal is a farce and a delusion. I wish to see this Parliament enter upon its work seriously, and not in a spirit of make-believe. The whole of the circumstances indicate want of sincerity on the part of the Government, and we can place no reliance m their professions. I do not propose to discuss the merits of the Bill, because that would occupy too long. I might refer to the unreliable evidence given by some of the witnesses who appeared before the Iron Bonus Commission. We know that men unwittingly lean towards the side upon which their own interests lie, and that their statements have in many cases to be regarded with extreme caution! For instance, Mr. Sandford, of Eskbank, stated that pig iron could be produced at a cost of 35s. per ton, but the evidence given by another witness indicated that that statement was not correct. I strongly protest against such an important! measure being committed to the charge of any private and’ irresponsible member of the House. The Government have thus established a precedent that will redound to their discredit in the years to come. The protectionists of Australia are not likely to be deluded by the adoption of any such tactics into the belief that the Government are sincere in their desire to establish the iron industry in Australia. They realize that the industry cannot be established without money, and they know perfectly well that the honorable member in charge of the Bill can give no guarantee that the necessary funds for this purpose will be forthcoming. What a farce we are playing by passing an enactment to which effect cannot be given. I maintain that the Government has been guilty of absolute cowardice, in handing over to a private member a measure involving the expenditure of some hundreds of thousands of pounds. I can well understand that Mr. Sandford, who is very anxious to get his little business at Lithgow floated into a big company, in order that the company may nurse the baby, is very much interested in the fate of this Bill. I sympathize with men who have sunk their capital in industries, and who by the force of circumstances, have to face unprofitable results. But honorable members should recollect that we are not here to pave a way for them out of their financial difficulties. I know the position of the iron industry, and I can readily imagine what will happen if this Bill be passed. I unhesitatingly affirm that there will be a fight to determine whether Mr. Sandford shall establish this monopoly at Lithgow, where he tells us that he is prepared to sink £250,000 in the erection of an efficient plant for the production of iron. I repeat that a measure of such importance ought not to be handed over to the charge of a private member. It is too great a temptation to place in his hands. Are we to believe that at this important juncture those who are so vitally interested in the establishment of the iron industry will stand idly by, and not exchange a word with the gentleman who is in charge of the Bill. Are they not likely to resort to that engineering which has been practised in connexion with other measures involving the expenditure of large sums of public money ? It is too much to expect us to believe that men who are so vitally interested in the Bill from a financial standpoint, will not appreciate the action of the honorable member to whose control a kind Government has committed it.

Mr Wilks:

– Would not that also apply to the honorable member for Hume, who introduced the measure?

Mr WEBSTER:

– I opposed similar tactics on the part of the late Government. I claim that if the practice which has been followed, is persisted in, it will bring humiliation upon this Parliament. If time permitted me to deal with the history of the American Congress, I could clearly demonstrate that the lobbying and the Tammany work, which has characterized its proceedings, will be repeated here if the plan which has been adopted upon the present occasion is pursued in the future. We have at the present time a Government who have not the courage of their opinions - who are not prepared to take responsibility, but seek to placate the protectionist members of their party by allowing a measure of this kind to be introduced when they know it cannot be carried into effect excepting by those who have charge of the Treasury. Is there anything in the anxiety of those old colleagues, who have worked in double harness in the advocacy of protection, to take charge of this Bill? They have been running side by side, dragging the protectionist chariot, each in turn supporting protectionist proposals in the State Parliament. Have we not a right to ask at this stage - the first time there has been a proposal to devote a large amount of money to a purpose of this kind - the first time a measure of such magnitude has been submitted to this Parliament - why there is this anxiety on the part of those two honorable members to take charge of this measure?

Mr SPEAKER:

– I have been listening for some time to the honorable member, and it appears he is proceeding along a line which no honorable member should take. If his speech, or some portion of it, means anything, it suggests at least a suspicion of corruption, and I cannot allow such a suspicion to be hinted at. No honorable member should cast any such slur on the House to which he belongs, or make any such insinuation.

Mr Webster:

– I disclaim that intention.

Mr SPEAKER:

– The honorable member’s remarks have certainly insinuated corruption.

Mr Webster:

– I disclaim any such construction as you. sir, have placed on my remarks. I say I have a right in my speech to refer to what I consider the possible effects of this piece of legislation.

Mr SPEAKER:

– I made no objection so long as the honorable member referred to the possibility of corruption arising under certain circumstances. But when he goes on to ask whether there is not some explanation for the earnest desire which two honorable members have manifested to take charge of the Bill, he is going much further than suggesting the possibility of corruption. He is actually insinuating - actually presuming, and asking the House to presume - that underlying the anxiety of the honorable member for Hume and the honorable member for Eden-Monaro to take charge of the Bill, there is some hope of reward - some possibility of corruption. I cannot allow any such insinuation to be made.

Mr Webster:

– I submit I have not said anything that will bear that construction.

Mr SPEAKER:

– The honorable member distinctly said what I have just attributed to him, and I ask him not to say it again. I cannot accept the honorable member’s denial that he did say what I have attributed to him.

Mr Webster:

– I admit that I made use of those words ; but it is the interpretation to which I take exception. Surely I may ask why there is this determination or anxiety on the part of the honorable member for Eden-Monaro, and the honorable member for Hume, without referring to any monetary considerations? Those honorable members are prominent in the protectionist movement.

Mr SPEAKER:

– If the honorable member had followed that line of argument, I should not have interrupted him; but as he will see when he reads the Hansard report of his speech, he was at least suggesting to the House that there is some unworthy motive underlying the anxiety of two honorable members, whom he named, to take charge of the measure. I ask the honorable member not to make any insinuation leading in that direction, because such an insinuation is a slur on the honour and good name of this House, and every member of it, including himself.

Mr WEBSTER:

– I am only too desirous to observe decorum; I do not wish tobe disrespectful to any member of the House. I recognise that there is a limit to the efforts a person may make to safeguard the welfare and future integrity and honesty of Parliament. Although I may have been “ sailing close to the wind,” I did not intend my words to be taken in the way indicated, and I do not wish to come into conflict with you, sir, on the point. I have said pretty well all I have to say. I have not dealt with the Bill itself, nor with the report of the Royal Commission, nor with the wisdom or otherwise of introducing a measure of the kind.

I have merely tried to show that the present legislation is a mockery and a farce. Therecan be no sincere desire to attain the object proposed, because, as I have said, the legislation can be carried into effect only if the Government undertake to provide the money. In assuming that position, I feel that I am on solid ground. I fully expect that we shall have revealed to us in time to come some’ serious effects of this class of legislation, if we have many attempts on the part of the Government to hand over such large and important measures to private and irresponsible members. I desire to enter my protest at this stage, so that this may be the last time we shall see a Government run the risk of being regarded as unwilling to assume their proper responsibility. The Minister of Defence is present, and I ask him to confirm the words of the honorable member for Eden-Monaro, that if this Bill be passed, the Government are prepared to find the necessary money. I am willing to take the word of the Minister of Defence, or that of the Treasurer on the point. I pause for a reply. The silence settles the question, so far as the sincerity of the Government is concerned. The Minister of Trade and Customs, in his speech, quoted the couplet -

O, what a tangled web we weave,

When first we practise to deceive.

Those two lines have been running in my mind while I have been observing the action of the Government in their endeavours to de.ceive honorable members in connexion with legislation of this kind. The Minister in charge of the business to-night cannot give us any guarantee that they are not acting a farce in putting this Bill before the House. Without that guarantee the public may say with every justification, that the Federal Parliament is merely wasting time, and that the waste is not attributable to private members, but to the Government who are responsible to the people of the country for the conduct of business in this House.

Mr SPENCE:
Darling

– As it is past our usual hour for adjourning, I would suggest to the Minister of Defence that it would not be fair to expect honorable members to continue the debate.I hope that he will consent to an adjournment.

Mr McCAY:
Minister of Defence · Corinella · Protectionist

– Our usual time for adjourning now, except on Tuesday, is 11 o’clock. I think we should be able soon to get a definite expression of opinion on this Bill from the House.

Mr Conroy:

– It is an important Bill, appropriating a large sum.

Mr McCAY:

– We desire to get to a division on the second reading ot the Bill early to-morrow evening. As it is rather hard to expect an honorable member, with the brevity which distinguishes my honorable friend opposite, to speak at this hour, I have no objection to an adjournment ; but I wish it to be understood that the Government, although its members may have different views about the Bill, nevertheless desires that the opinion of the House may be speedily ascertained.

Debate (on motion by Mr. Spence) adjourned.

House adjourned at 10.47 P-m-

Cite as: Australia, House of Representatives, Debates, 19 October 1904, viewed 6 July 2017, <http://historichansard.net/hofreps/1904/19041019_reps_2_22/>.