10th Parliament · 1st Session
Mr. Speaker (Hon. Sir Littleton Groom) took the chair at 3 p.m., and read prayers.
Duties on Butter and Cheese.
– Will the Minister for Trade and Customs inform the House whether finality has been reached in connexion with the application by the Commonwealth Government to the Government of New Zealand to waive the reciprocal tariff agreement so far as it applies to butter and cheese so that the increased duty of 6d. per lb. on both those articles may come into operation forthwith?
– No. Negotiations are still proceeding.
– A fortnight ago the Minister for Trade and Customs stated that a cable had been sent to the Government of New Zealand asking for its concurrence in certain increased duties contained in the schedule now before Parliament. Has the Minister yet received a reply from the Dominion Government ? If so, what is the effect of it?
– A reply has been received, but as it is not quite satisfactory, further communications on the subject are being exchanged.
– Has the Minister for Trade and Customs received a report from the Tariff Board in regard to the proposed duties on coffee? If so, will he lay it on the Table of the House before the items of the tariff schedule are discussed?
– I believe the report is in Canberra, and I shall try to accede to the honorable member’s request.
– Will the Minister for Home and Territories lay on the table of the library all papers in connexion with the tenders for, and purchase and equipment of, the billiard tables in Parliament House?
– I shall ask the commission to make the papers available for the honorable member’s inspection.
– Has the Prime Minister received a report from the Development and Migration Commission regarding its inquiry into the dried fruits industry ?
– In view of the fatal accident which occurred on the CanberraQueanbeyan road yesterday, and the large number of similar accidents that have happened on that road during the last few months, and the fact that it is stated that more fatalities have occurred there than on any similar length of road during the last eighteen months - will the Minister for Home and Territories consider the advisability of urging the commission to re-design the road in question, and/or tighten up the traffic regulations in the Federal Territory?
– I shall bring the honorablemember’s remarks under the notice of the Commission and ask that the matter be fully inquired into. I am sure that everything possible will be done to prevent a recurrence of these regrettable incidents.
– Nearly six months ago the Prime Minister promised consideration of certain conditions of employ ment at Cockatoo Island dockyard - amongst them furlough, or payment in lieu of furlough, holiday leave, and outstanding claims for compensation. These matters - especially the last named - are urgent. I am aware that inquiries have been made at the instance of the Prime Minister, but sufficient time has elapsed to enable the department to arrive at a decision and I desire to know from the Prime Minister when a statement on the subject will be made?
– This matter has been long outstanding. The departmental inquiries having been completed, the matter is being considered by a committee of the Cabinet, but owing to the long and continuous sittings of the House it has been impossible to complete its deliberations.
Mr. Parsons’s Remarks
– After the honorable member for Angas (Mr. Parsons) had made certain complaints on Friday afternoon regarding lobbying by manufacturers and others interested in the tariff, you, Mr. Speaker, told him that if he would give you particulars of his complaints you would have inquiries made. I ask you, sir, if the honorable member has supplied any particulars, and, if so, what action you have taken or propose to take?
– I have had no further communication from the honorable member.
– I desire to direct a question to you, Mr. Speaker, and I ask the indulgence of yourself and honorable members’ while I make a necessary preliminary explanation. The statement of the honorable member for Angas, on Friday, which was offensive-
– I ask the honorable member not to criticize the honorable member for Angas.
– I think I am speaking for the majority of honorable members, if not all of them, when I say that the extravagant language he used-
– Order ! The honorable member must not proceedin that strain. He has asked the indulgence of the House while he makes an explanation preliminary to the asking of a question. He may not debate the matter.
– The honorable member for Angas took advantage of the motion for the adjournment of the House-
– I ask the leave of the House to make a statement.
– That would not be fair to other honorable members.
– I rise to a question of privilege in connexion with the remarks of the honorable member for Angas.
– Does the honorable member propose to conclude with a motion ?
– I shall do so with pleasure. I read in the daily press a report of the honorable member’s remarks, and I was astounded that any member of this Parliament should suggest that Tammany methods and corruption were being practised in Canberra. I bitterly resent his remarks. I well remember that during the last tariff discussion in Melbourne the honorable member for Angas devoted most of his remarks to abuse of Australian manufacturers, and in the course of them dramatically tore up Australianmade clothes.
– I object to that statement, and ask that it be withdrawn.
– If the honorable member has been misrepresented he will have an opportunity later to make a personal explantion.
– I remember his attitude towards Australianmanufacturers on that occasion.If the honorable member has any time to spare, and desires to do a service to Australia-
– What is the question of privilege that the honorable member is raising?
– The honorable member has intimated that he intends to submit a motion. So far he has referred only to the remarks of the honorable member for Angas. I am waiting to hear him mention the particular privilege that he alleges has been invaded.
– Do I understand, Mr. Speaker, that you rule that the honorable member must conclude by submitting a motion?
– It is usual for an honorable member to submit a motion if a privilege of the House has been abused, and on more than one previous occasion the Speaker has intimated that the practice of the House is for an honorable member when raising a matter of privilege, to conclude with a motion in order to place a specific question before’ the House. I am waiting for the honorable member for Ballarat to say what particular privilege he thinks has been invaded.
– I was proceeding to do so, when rudely interrupted by the right honorable member for Balaclava, who, as an ex-speaker, ought to have known better. With his permission, I shall continue my remarks. If the honorable member for Angas has any spare time, I advise him to devote his attention to the Town and Country Union, an organization of importers that seeks, by any method it can adopt, to bring about what is termed tariff reform. The most startling allegations have been made in the last twelve months as to the methods it adopted to induce honorable members to reverse their votes. As an Australian, and having a number of manufacturers in my electorate, I welcome their coming to me when a tariff debate is in progress. Members can obtain no information from the Tariff Board. The members of that body cannot be interviewed by them. Therefore, the men engaged in the manufacturing industries, which keep Australia going, should not be boycotted from the House, or prevented from having access to honorable members. If the honorable member for Angas interviews them, he will find that they are good Australians, and he will bitterly regret having charged them, with bribery and corruption. I strongly resent his objectionable insinuations. I am here to do my best to help Australia to. produce to the best of her capacity. If manufacturers see fit to send their agents or representatives to Canberra to make known their wishes in tariff matters, I, as a member of this House, will gladly welcome their representations. The motion that I intend to submit-
– There is no need for a motion. A motion is needed only in regard to a newspaper article.
– An honorable member is entitled under the Standing Orders to raise a question of- privilege forthwith. A motion should be submitted if it is desired that the matter shall be debated by honorable members generally. If the honorable member merely wishes to raise a question of privilege, he may do so, but the usual practice laid down in this House is to conclude with a motion. As regards statements in newspapers, a specific motion must be submitted.
– I began by quoting from a newspaper, and I intended to submit a motion. I now move -
That, in the opinion of this House, the remarks made by the honorable member for Angas on Friday last, in respect to the alleged improper influence used in this House by Australian manufacturers, are unwarranted and without justification.
I asked you, Mr. Speaker, at the beginning of the sitting, if the honorable member for Angas (Mr. Parsons) had supplied you with particulars of the abuses alleged by him, and the answer was that he had not done so. That, to my mind, is clear proof that he had no such particulars to give. Honorable members with a number of years’ experience of parliamentary life will agree that fewer representations have been made to them in Canberra in connexion with the present tariff than were made in Melbourne with previous tariffs. I challenge the honorable member for Angas to prove that we are being unduly worried, or that Tammany methods are being introduced by Australian manufacturers in pursuing their legitimate quest for tariff benefits. Does the honorable member know that 40,000 Australians are out of employment to-day - that 40,000 families will have no Christmas dinner? Because the manufacturers are anxious to obtain tariff adjustments that will enable them to keep their workmen fully employed, and are trying to keep the factories of Australia busy, it ill becomes the honorable member to reflect upon them in the way he has done. I hope the motion will be carried, and that the honorable member will be shown that many honorable members on both sides of the House bitterly resent his statement.
– I second the motion. The honorable member for Angas surely overstepped the rules of propriety by his sweeping allegation against the representatives of manufacturers. Is there anything evil in manufacturers, either directly or through their agents, interviewing members of Parliament or placing their views before them? In making representations to the Tariff Board, they must go there as principals or send their agents. Is there anything improper in that? There is not, and there can be nothing improper in their visiting Canberra and making representations either to Ministers or to other honorable members. On Friday the honorable member for Angas cast an aspersion on reputable manufacturers. If there be Tammany methods in operation in business in Australia, the greater number of cases will be found to arise from the influence of the importers and not of the Australian manufacturers.
– It is unnecessary for the honorable member to say that.
– Why reflect upon any body of persons ?
– -I do not wish to do so. Tammary methods are supposed to be the almost inevitable concomitant of “big” business, but I resent the suggestion that the Australian manufacturers as a class or individually come to this Parliament for the purpose of unduly influencing it or to import improper methods into the transaction of their business. The honorable member for Ballarat is to be congratulated upon his timely action in upholding the right of honorable members to have representations made to them in ,the interests of the manufacturers.
– I suggested that the honorable member for Ballarat should specifically indicate the particular privilege which, in his opinion, had been invaded by the remarks of the honorable member for Angas - whether it was a collective privilege enjoyed by honorable members generally or some individual privilege. The motion directs attention to “ alleged improper influence used in this House,” and the honorable member would be in order if he could show that something that had happened within the precincts of Parliament had interfered* in in any way with some privilege of an individual member. It is not my desire to rule the motion out of order, and I suggest to the honorable member that/ as he has made his protest against the remarks of the honorable member for Angas, he might see fit not to proceed with it.
– I thought it desirable, under cover of privilege, to take the earliest occasion that presented itself to indicate my strong disapproval of the remarks of the honorable member for Angas, and I assumed that other honorable members would welcome this opportunity to show what they thought of the honorable member. I also remind you, sir, that you intimated to me, when I rose to speak, that I must conclude with a motion. In my opinion the aspersions cast upon honorable members generally by the honorable member for Angas on Friday last certainly constituted a breach of privilege.. The honour of this House was assailed I by the honorable member for Angas, by the implication that honorable members, in permitting representatives of manufacturers to interview them with regard to the new tariff duties were allowing Tammany methods to be applied here.
– I gathered from, <:b.e speech of the honorable member for Angas on Friday last that he objected to the presence of tariff agents within the precincts of this building. To my mind, what he said amounted to a complaint against officials of the House to whom certain instructionshad been given, and, therefore, I informed him that to the best of my knowledge those officials were complying with the instructions which had been given to them. I have made it my business to institute special inquiries, and I find nothing to justify the remarks of the honorable member for Angas. I did not understand him to make any reflection upon honorable members or to suggest that they had been influenced by the presence of representatives of manufacturers. What he desired, apparently was to protect honorable members from being pestered.
-In the lobbies.
– Yes. I am satisfied t hat the officials keep all strangers out of the corridors on each side of the chamber, and that honorable members need not see any person against their desire. Constituents and the public generally are, however, entitled to attend at Parliament House to seek interviews with their representatives, and opportunities are provided for them to see honorable members if members wish to see them.
– You invited me just now, Mr. Speaker, to state specifically the particular privilege which, in my opinion, had been invaded by the honorable member for Angas. I am unable to quote the Hansard report of his speech, as it has not yet been issued ; but I quote from a reputable newspaper in Melbourne, if there is one - the Sun Pictorial - which states -
This man who prates protection for all who are prepared-
– I submit that the honorable member for Ballarat may not speak a second time on his motion.
– Order. I have suggested to the honorable member for Ballarat that his purpose has probably been served by the speech which he has made, and that it may not. be necessary to persist with his motion.
– I submit, Mr. Speaker, that the motion of the honorable member for Ballarat is not in order. He informed you that he rose to discuss a question of privilege, and you advised him thatit would be necessary for him to conclude with a motion. You have since somewhat modified your pronouncement on that point. No motion of privilege is in order unless it declares that the act complained of is a breach of the privilege of honorable members of the House. The motion of the honorable member for Ballarat does not do that. I submit, therefore, that it is not in order.
– I have already advised the honorable member for Ballarat to withdraw his motion, and if he persists with it I shall have to rule it out of order. I suggest again to the honorable member for Ballarat that it is desirable not to proceed with it.
– I shall not be long, Mr. Speaker. You invited me to state the reasons for my belief that the remarks of the honorable member for Angas constituted a breach of privilege, and informed me that I should have to conclude with a motion.
– Order! The honorable member has submitted his motion, and may not at this stage speak again. In my opinion the motion is out of order, and as the honorable member is net withdrawing it, I shall have to declare it out of order.
– On what grounds?
– The honorable member for Ballarat has not specifically stated in his motion that the action complained of constitutes a breach of privilege of this House.
– Then I take it, Mr. Speaker, that you do not wish me to proceed further.
– I ask the Minister for Defence if he has information as to complaints made by mechanics and other men employed at the Laverton Aircraft Depot, and at Point Cook, and if so, what steps are being taken to remedy them ?
– I have no knowledge of any complaints. I understand that the mechanics are satisfied with existing conditions, but I shall have inquiries made, and inform the honorable member at an early date.
– I remind the honorable the Prime Minister that many months ago, in reply to requests made by a deputation of old-age pensioners in Queensland, he stated that he would obtain a report from the Commissioner of Pensions in regard to certain anomalies in the administration of the Invalid and Old- Age Pensions Act. A few weeks ago I was informed that he would call for that report again. I should like to know if the report has been received, and what action will be taken?
– I understand that the report mentioned by the honorable member has been received, but I have not yet had time to consider it.
– Has the Treasurer consulted Mr. J. E. Darling, director of the Midland Bank Limited, England, regarding that gentleman’s proposal for the liquidation of Empire war debts?
- Mr. Darling incidentally had a chat with me, but no definite scheme for that purpose has yet been outlined.
asked the PostmasterGeneral, upon notice -
With reference to the appointment of motor tester at the Chippendale Yard, PostmasterGeneral’s Department, New South Wales- (a.) Was the position advertised, and, if not, why not?
) Is it a fact that seniority was ignored in making this appointment?
– The replies are as follow : -
asked the Minister for Trade and Customs, upon notice -
Whathas been the total amount paid in bounties in each State of the Commonwealth on produce or goods, primary and secondary, during the past five years?
– The information is being obtained?
asked the Minister for Home and Territories, upon notice -
– The replies are as follow : -
The information involves a review of a considerable amount of data, and will be given later. 3. (a) Ten.
Utilization of Timber
asked the Prime Minister, upon notice -
Whether the Council for Scientific and Industrial Research has made, or is making, any investigation or scientific research -
If so, will the results be made available quickly; if not, will he ask the Council to consider these matters with a view to carrying out such investigation?
– The replies are as fol low : - 1. (a) and (b) The Council for Scientific and Industrial Research is carrying out investigations to determine the yield of alcohol obtainable from Australian hardwood and on the utilization of softwood timbers for paper pulp.
asked the Treasurer, upon notice -
Whetherhe can give any information as to when the matter of the revision of the payment of pensions to old-age and invalid pensioners who are inmates of government institutions will be dealt with?
– This matter will be discussed with the Treasurers of the States after the Loan Council meeting on the 17 th December next.
Sale of Plantations
asked the Minister f or Home and Territories, upon notice -
– The replies are as follow : - 1. (a) No plantations were left unsold after tenders for the third and last group had been accepted. The successful tenderer for Nareshafen plantation, however, failed to complete the purchase. This property, valued at £7,800,was again offered for sale and sold. The area of Nareshafen plantation is 189.15 hectares.
All these lots, except Bull Island and Matilau either have since been sold or are in process of being sold. 2, 3, and 4. See answer to No. 1.
askedthe Minister for Trade and Customs, upon notice -
– The replies are as follow : -
asked the Prime Minister, upon notice -
– The replies are:-
asked the Treasurer, upon notice -
– The information is being obtained.
– On the 8th December the honorable member for Wimmera (Mr. Stewart) asked the following questions : -
I am now able to furnish to the honorable member the following information: -
A ustralian Trade.
– On the 9th December the honorable member for Maribyrnong (Mr. Fenton) asked the following questions : -
I am now able to furnish the honorable member with the following information : -
– On the 5th December the honorable member for Swan (Mr. Gregory) asked that a copyof the agreement made between the Broken Hill Proprietary Company Limited and the merchants trading in iron and steel, be laid upon the table of the House. I now inform the honorable member that 1 nave obtained a copy of that agreement, and in order that he may acquaint himself of its contents, I am now placing it upon the table of the library.
– On the 4th November last the honorable member for Kennedy (Mr. G. Francis) asked me the following question : -
Is there any, and if so, what, satisfactory reason why the survey route marked out several years ago and passing through Camoowealshould not be accepted by the North Australia Commission ?
I am now in receipt of advice from the North Australia Commission that after a thorough inspection and investigation of the position it is satisfied that the trial survey route decided uponby it will serve a greater area of the best class of country than the surveyed route mentioned by the honorable member.
– On the 27th October the honorable member for Herbert (Dr. Nott) asked the Minister for Health the following question: -
Giving evidence recently before the Royal Commission on the Constitution of the Commonwealth, Dr. Cumpston, the Commonwealth Director-General of Health, said that the inspection of imported food is not a function of the Health Department, and so far as that duty was performed it was carried out by the Customs Department. I desire to knowwhat are the qualifications of the inspectors who are permitted to make examinations of food on behalf of the Customs Department?
The position in regard to the examination of imported foods is as follows: -
The commerce ( imports ) regulations require imported foodstuffs to be marked with a “trade description” showing (inter alia) a true description of the goods. In addition the name of any preservative or deleterious substance contained in the article must be clearly shown in such trade description. These trade descriptions are inspected by the customs examining officers when making other customs inspections, and samples are from time to time submitted for examination to the Federal analyst or the customs analysts in the various States. The technical officers of the analyst’s branches mentioned are all qualified analysts. Standards are fixed by the regulations mentioned for the following articles of food: - Baking powder, infant’s food, pepper, and cocoa.
– On the 9th December the honorable member for Brisbane (Mr. D. Cameron) asked the following questions: -
I am now in a position to inform the honorable member as follows : -
1926, 25.4; 1927, 26.3. No examinations for senior cadet service were carried out in the years 1922 and 1923 owing to the reduction of senior cadet training to two quotas as from 1st July, 1922. No examinations were conducted in 1925 owing to the further restriction of senior cadet training to one quota as from 1st July, 1925. Any consequent examinations held in 1924 were of personswho reached the age of sixteen years in that year, whilst those carried out in 1926 and 1927 were ofpersons who reached the age of seventeen in those years.
The only material increase of rejects for senior cadet service occurred in the years 1926 and 1927. The main reasons for this were: -
– On the 7th December the honorable member for Capricornia (Mr.Forde) asked the Minister for Markets and Migration the following questions: -
The following information is now supplied to the honorable member in reply : -
The following papers were presented : -
Lands Acquisition Act - Land acquired at Narrabeen, New South Wales - For Postal purposes.
Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinance of 1927 - No. 20 - Careless Use of Fire.
Message recommending appropriation reported.
Ordered - That the message be taken into consideration forthwith.
In committee (Consideration of GovernorGeneral’s message) .
Motion (by Mr. Hill) agreed to -
That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to approve an agreement made between His Majesty’s Government of the Commonwealth of Australia and the Commissioners of the State Savings Bank of Victoria, and for other purposes.
Standing Orders suspended and resolution adopted.
That Mr. Hill and Mr. Bruce do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Mr. Hill, and read a first time.
– I move -
That the* bill be now read a second time.
This bill is to approve an agreement between the Commonwealth and the Commissioners of the Victorian State Savings Bank, pursuant to the War Service Homes Act. This agreement was entered into tentatively, and in anticipation of approval by this Parliament and the Parliament of Victoria. Since July, 1922, the Victorian State Savings Bank has been acting as agent for the War Service Homes Commissioner in the provision of homes in Victoria, and the agreement now proposed does not differ very much from that in existence, except that at present the bank acts as agent for the commission, whilst under this bill the bank will be established as the principal, the Commonwealth’s responsibility being to provide the bank with funds to enable it to make loans to persons eligible under the War Service Homes Act, and to pay the bank certain remuneration for so doing. The bank’s responsibility, in the main, is to repay the total of the funds advanced as repaid by the applicants, the total amount outstanding being repayable by the bank at the end of twenty years. The number of homes which will be taken over under this agreement by the Victorian State Savings Bank is as follows, the figures being complete up to the 30th November last : -
The total expenditure incurred on these homes by the State Savings Bank since July, 1922, is £2,412,196, the receipts during that period have been £501,771, and the total amount outstanding, including interest and arrears by applicants is, £2,331,118. The total Arrears by applicants at the present date amount to only £4,136. Homes purchased or built prior to the bank taking over in July, 1922, number 3,266. These were built by the commission quite independently of the bank, and will be administered by the War Services Homes Department.
– It is proposed to have two controlling bodies, then?
– The War Service Homes Department will administer all the homes built by it independently of the bank. The whole of the arrears in Victoria on war service homes, at the present time, amount to only . 57 per cent., while the percentage for the whole Commonwealth is . 89 per cent. It is only within the last year or two that the figures have been reduced to this amount; before that it stood at something like 6 per cent. Members will have an opportunity in committee to discuss the agreement which is embodied in the schedule to the bill.
– The Minister has not explained whether any extra cost will be incurred.
– The charges made for administration under the old agreement were 15s. per cent. ; under the new agreement they will be 13s. per cent.
Debate (on motion by Mr. Charlton) adjourned.
In Committee (Consideration of Senate’s amendment).
Section twenty-six of the principal act is repealed and the following section inserted in its stead: - “ (2) In addition to any deduction which may be made under the. last preceding subsection in respect of any loss, a taxpayer shall be entitled to a deduction of any similar loss, or of part of any similar loss, incurred by him in any of the four years next preceding the year in which the income was derived, if no deduction of that loss, or (as the case may be) of that part of that loss, is allowable, under this section, in assessments for financial years preceding that for which the assessment is made:
Provided that -
no deduction shall be allowed of any amount of loss which would have been allowable as a deduction in an assessment for any financial year preceding the financial year commencing on the first day of July, One thousand nine hundred and twenty-seven, if the provisions of this section had been in force for the purposes of assessments for all financial years subsequent to the financial year commencing on the first day of July, One thousand nine hundred and twenty-two, and had applied only to losses incurred and income derived on or after that date, or on or after the commencement of the accounting period substituted for the financial year commencing on that date under sub-section (3) of section thirtytwo of this act.
Section proposed to be amended -
Where a taxpayer makes a loss in any year in, carrying on a business either alone or as a partner with other persons, he shall be entitled to deduct the loss from any assessable income derived by him in that year from other sources. The loss shall be deducted in the first place from any income from personal exertion of the taxpayer, but if that income does not amount to the loss to be deducted, the difference shall be deducted from the taxpayer’s income, if any, derived from property
Senate’s Amendment. - At the end of subsuction 2 ( b ) add - “ and no amount of loss, incurred prior to the first day of July One thousand niue hundred and twenty-six or prior to the commencement of any accounting period substituted under sub-section 3 of section thirty-two of this act for the financial year commencing on that date, shall be. taken into account under sub-section 8 of section thirteen of this act in ascertaining the excess of allowable deductions for the year in which the loss was incurred, which would not have been allowable as a deduction in the assessment of income derived (prior to that date or that commencement) in any financial year or accounting period subsequent to the year or period in which the loss was incurred, if the provisions of this section had been so in force and had so applied.”
– I move -
That the amendment be agreed to.
When the bill was before another place the officers of the Taxation Department worked out a number of actual examples of incomes, when it was found that the amendment of clause 16 was drafted in such a way that a double deduction of losses from profits was in certain cases possible. As that was not the intention of the Government or the committee, this amendment has been made in another place to give effect to what is really intended.
– Who was responsible for the faulty drafting of the bill in the first place?
– The clause was drafted by the officers of the Taxation Department and of the Crown Law Department, and it was not until actual examples were fully worked out that it was found that the provision did not give effect to what the committee intended. As the amendment is somewhat complicated, I may state that it is to achieve the same result in regard to losses incurred prior to 1st July, 1926, as the proviso to sub-section 1 achieves in regard to losses incurred on or after 1st July, 1926, namely, to prevent the losses from being brought into account twice in ascertaining the average income by reference to which the rate of tax is to be calculated. As the provision stands there will be a double deduction, in ascertaining such average income for the purposes of assessments for the financial years 1927-28 to 1930-31, of so much of any loss incurred prior to 1st July, 1926, as is deductable under sub-section 2 of the new section in the assessments for those years. This position, which will be rectified by the amendment, did not become apparent until the new section had been applied, by way of test, to a number of specific cases. The explanation of the position is .as follows: - Section 13 (S) provides that the excess of allowable deductions over the assessable income of any year shall be taken into account in calculating the average income. If a taxpayer makes a business loss in a year in which he has no income from other sources the amount to be taken into account as the section 13 (S) excess for that year in calculating the average income of the next four years will be, leaving out of consideration the statutory exemption, the amount of that loss. Under sub-clause 2 of new section 26 as it stands, however, the amount of that loss will be carried forward as a deduction in ascertaining the taxable income of the next year, or of the next two, three or four years as the case may require. As deductions in ascertaining taxable income are also deductions in arriving at the average income, it follows that, unless the case is provided for, there will be two deductions in respect of one loss in arriving at the average income, namely, the deduction of the “ Section 13 (8) “excess “ for the year of loss and the deduction consequential upon carrying forward that excess as an allowance from the taxable income of the succeeding year or years. The proviso to sub-section (1) of new section 26 was inserted to obviate this duplication of deductions, but as the new section is to apply for the first time in assessments of income derived in the year 1926-27, that proviso is limited to losses incurred after the 1st July, 1926, and hence is ineffective to prevent a double deduction of losses incurred prior to that date, some of which losses will, in certain circumstances, be carried forward under subsection (2) as deductions in ascertaining the taxable incomes of the years 1926-27, 1927-28, 1928-29, and 1929-30.
The following example will illustrate the position : - A taxpayer, who commenced business during the year 1925-26, made a loss of £5,000 in that year and a profit of £10,000 in the year 1926-27. As the provision stands his average income for 1926-27 will be calculated as follows : -
Hence there is no rate to apply to the taxable income of £5,000. In other words, although the taxpayer’s net income for the two years is £5,000, he will entirely escape tax.
Under the proposed amendment the average income would be calculated as follows : -
A taxpayer would be assessed on £5,000 at the rate applicable to £2,500. It is not every loss incurred in the four years prior to the 1st July, 1926, that is deductible in assessments of income derived in the years 1926-27 to 1929-30, and where a deduction is allowable in those assessments in respect of any such loss, it is not necessarily the whole of the loss that is deductible. The proposed amendment aims at the elimination from the “Section 13 (8) excess” of the year of loss of that part only of the loss which is allowable as a deduction in those assessments. That is to say, a taxpayer, who commenced business in 1924-25, made a loss of £5,000 in that year, a profit of £1,000 in 1925-26, and a profit of £10,000 in 1926-27. Under the provision as it stands his average income for 1926-27 would be calculated as follows : -
The taxpayer would be assessed on £6,000 at the rate applicable to £666. Under the proposed amendment the income for 1926-27 for averaging purposes would be:-
The taxpayer would, therefore, be assessed on £6,000 at the rate applicable to £2,000. The £5,000 loss of 1924-29 becomes £1,000, because £4,000 of that loss is deductible under new sub-section (2) provisob from the 1926-27 income. Honorable members will now appreciate how difficult it was to ascertain exactly the effect of the amendment until a case had been worked out. The Taxation Department, and I am sure honorable members generally, desire the amendment to be applicable not merely to the future but also to the past, and I am assured that the proposal which I am now submitting will prove to be satisfactory.
.- I looked very carefully at this clause in the original bill, and read it, I suppose, a dozen times. I then came to the conclusion that it would do what it was intended to do. When the amendment was first proposed I also read it very carefully. I have now come to the conclusion that we must take the word ofthe draftsman that our wishes are being expressed. The situation is extremely involved. I do not say that the amendment could have been drafted more clearly, but it is a pity that we cannot declare our intentions in simpler language. Such light as I had on the subject has been dimmed by the Treasurer’s explanation, and speaking on behalf of the Opposition, all I can say is that we must leave the Treasurer to it.
Question resolved in the affirmative.
Resolution reported; report adopted.
In committee (Consideration of Senate’s amendment).
Section 35 of the principal act is repealed, and the following sections are inserted in its stead: - “ 35e. The savings bank shall be managed by a commission composed of a Chief Commissioner and two other commissioners.
Senate’s Amendment. - At the end of proposed new section 35e add the following proviso: - “ Provided that, until the appointment of the commission -
the Savings Bank shall be managed by the board of the Bank; and
for the purposes of this Part, and of the Commonwealth Housing Act 1927, the Governor shall have all the powers and functions of the Chief Commissioner, and the board shall have all the powers and functions of the commission; and
all references in this Part (excepting in sections 35f to 35n inclusive) and in the Commonwealth Housing Act 1927 to the Chief Commissioner or to the commission shall be read as references to the Governor or the board as the case may be.”
– I move -
That the amendment be agreed to.
The object of this amendment is to alter the method of controlling the Commonwealth Savings Bank business, but to maintain the separation of that branch from the central and general branch of the Commonwealth Bank. It enables the board of directors and governor of the bank to exercise all the powers and functions of the proposed commission and chief commissioner respectively until these are appointed, which may be an indefinite period. It also provides that all references in certain clauses of the Commonwealth Housing Bill to the chief commis sioner or to the commission shall be read as references to the governor or the board as the case may be. I made a statement on this subject on the 16th November, when I said that the Government had that morning had an interview with the chairman, the governor and two other directors of the Commonwealth Bank, in regard to the Commonwealth housing scheme, and that they had represented that although I had freely consulted with them on the principles of this bill and the Commonwealth Housing Bill, they had not appreciated the exact intentions of the legislation as to the carrying out of the housing functions, and that on further consideration they were of the opinion that they could continue to administer the savings bank and in addition, the proposed housing scheme. It is due to the committee that I should explain how I came unwittingly to mislead it in some degree, and to show that I did so quite unintentionally. I think my explanation will indicate that it was natural that I should have assumed that the position was as I thought it to be. Had there been no changes in the office of secretary to the Treasury and governor of the Commonwealth Bank during the period when these negotiations were in progress the misunderstanding possibly would not have arisen. During the discussion on the motion for the second reading of this bill I stated that immediately after the last election the Government sought the aid of the Commonwealth Bank directorate to formulate a housing scheme in fulfilment of its promise to the electors.
– What scheme was placed before the directorate.
– No scheme at all. Our object was to obtain the advice and assistance of the board in formulating a scheme. After considering the matter the board of directors of the bank resolved, during July, 1926 -
That this board feels that to accept the responsibility of the administration of the Federal Government housing scheme as part of the functions of the savings bank department would be overweighting the work falling upon the institution; and further that such functions are in no way related to the general banking business or to that of a note issue bank or a reserve bank and the board is therefore of the opinion that, under the circumstances, it would be wiser to accept the proposal of the Government to separate the savings bank department from the bank for the purpose of enabling the carrying out of the housing scheme. It is better in the interests of the bank as a whole that the Government should take the necessary steps to bring about the separation proposed, and the board will be glad to assist and advise the Government to the best of its ability as to the method of effecting the changes necessary to carry this out.
I read that resolution to the House in my reply in the debate on the second reading of the bill. The Government accepted it as an expression of the desire of the board - a desire which it still has - to separate the savings bank from the other branches of the bank so that the savings bank could administer the housing scheme independently. The Government had occasion during the preparation of both the Commonwealth Housing Bill and the Commonwealth Bank Savings Bank Bill to discuss the principles of both measures with the directors of the bank. The negotiations were mostly conducted personally. It was and still is the desire of the Government to interfere as little as possible with State housing activities. In December, 1926, nearly six months after the bank carried the resolution which I have rend, we discussed our housing scheme with the Victorian Savings Bank Commissioners. At that discussion suggestions were made that there were possibilities along the following lines: -
Power to be given to the directors toinvest the funds of the Bank, inter alia, in advancing money for buying and building homes, and for discharging mortgages on existing homes, and for the erection of warehouses intended for the warehousing of primary products.
Power to be given to the directors to enter into any arrangements with any bank, or corporation, or authority established under the laws of a State, for carrying out the business of the savings bank in respect of advances for homes and warehouses.
In the discussions that took place we discussed the personnel that would control the savings bank, and various suggestions in that regard were put forward, and ultimately incorporated in the Commonwealth Bank Savings Bank Bill, which was then drafted. In July I took the bill, as drafted, to Sydney, and placed it before executive officers of the bank for their consideration. I think it was the deputy-governor who examined it, and I take it that he discussed the matter with the governor. Later, in
September, an arrangement was made whereby while I was in Sydney I was able to discuss with the Commissioner of the State Savings Bank of New South Wales the actual ‘method of operation now proposed in the Housing Bill for the investment of funds. Arrangements for that discussion were made by the Governor of the Commonwealth Bank, and one of the directors of the bank was present at the discussion.
– Was that subsequent to the drafting of the bill?
– That was after the bill had been prepared in its present form. I want to make it clear that when the Savings Bank Bill was before the officers of the Commonwealth Bank for their perusal, the Housing Bill had not been drafted, but was in course of preparation. The discussion with the New South Wales State Savings Bank authorities took place after the Housing Bill had been drafted. As no representations had been made by the directors of the Commonwealth Bank in reference to the control of the Savings Bank, and as the Secretary to the Treasury, who had a considerable share in the drafting of the Savings Bank Bill, was also a member of the Commonwealth Bank Board, I took it for granted that the executive officers of the board were thoroughly seized of the position, and satisfied with what the Government proposed. I was still under that impression when I moved the second reading of the bill. It was not until after the board had perused the Commonwealth Bank Savings Bank Bill and its complementary measure, the Housing Bill, and had considered the debates that took place here, that the chairman of the board intimated to the Prime Minister that he would like to discuss the matter with the Government. He. then stated that, although the board still approved of the separation of the savings bank, as it had always done, it thought that, under the special arrangements by which practically the whole of the administration of the detail work of housing was to be carried out by the State authorities, it would be able to deal successfully with the administration and control of the savings bank, and consequently it was willing to accept that responsibility. The Government has always been ready to fall in with any suggestion made by the bank, and was perfectly willing to adopt this suggestion. I came down to the House, therefore, and intimated that we intended to have this amendment moved in another place.
– When the honorable member says that the directors of the bank were agreeable to the separation of the savings bank, did they mean that they were willing to have it under separate control from the main bank?
– Yes ; and they meant it at that time, because they discussed with me the personnel of the commission to control the savings bank. But what is really brought about by the present amendment is best set out in a report of the National Bank of Australasia, which appears in a circular issued during the time the Commonwealth Bank Savings Bank Bill was under discussion in this House. This report says -
The present proposals provide that the savings bank business now attached to the bank should be kept distinct and separate from the other departments of the bank, and be managed by a commission, which is to include otic member of the bank board, thus maintaining co-operation with the general banking department.
It does seem desirable that the two main sections of the bank’s business should be operated separately, but the question arises whether this could not bc done by setting up different managements under the control of the bank’s board, which could, if necessary, be strengthened by the appointment of additional members.
That is what is being done, and what has now been suggested by the Commonwealth Bank Board of Directors. The amendment, now before honorable members provides that the Bank Board shall retain control of the savings bank.’ I regret that I should have unwittingly misled honorable members in the slightest degree as to the board’s intentions. The bill remains unchanged in so far as it relates to the separation of the savings batik from the main bank, but as regards the savings bank branch the board of directors of the Commonwealth Bank is willing to administer it as in the past. The Government is falling into line with that suggestion.
.- The amendment to which we are asked to agree will come as a surprise to honorable members who recollect how much, time was taken up here in discussing whether the savings bank should be separated from the Commonwealth Bank. The Treasurer stated that that was really the only point in the bill.
– And he gave specific reasons for having a separate control of the savings bank.
– Yes. I think the discussion on the point occupied a couple of sittings. Honorable members of the Opposition advocated no interference with the Commonwealth Bank as it is at present constituted. We thought that it was quite unnecessary to have a separate savings bank, in view of the fact that none of the detail work in connexion’ with housing would fall on those in control of the savings bank. We realized that the operations of the savings bank would be confined to the lending of money to various authorities in the States who would be charged with the responsibility of carrying out the work of housing, and in consequence of this we vigorously opposed the Commonwealth Bank Savings Bank Bill. Recent events have justified our attitude. The bill had scarcely left this House when we saw a change in the attitude of the Government, and before the measure reached another place the Government had climbed down. In order to justify the attitude taken up by honorable members of the Opposition, I shall briefly recall some of the statements made during the discussion of the bill in this chamber. Speaking on the second reading of the bill, the Treasurer said -
The board advised that its operations would probably be overburdened if it were loaded with the housing scheme. It represented to the Government that, as it was the custodian of about £140,000,000 worth of assets, it could not very well give its attention to this proposed new phase of the Government’s activities, and suggested that some other means should be adopted. These overtures took place in July of last year, and then the board passed the following resolution, which I should like to read for the information of honorable members : -
That is’ the resolution which the Treasurer has just read. The board said that it could not accept the responsibility for the administration of a Savings Bank Act because of the great additional work that would be incurred, but when the board of directors had had the privilege of reading the debate that took place here they began to realize that they had been placed in a very difficult position. They began to think that the public would not expect men capable of administering a Commonwealth Bank to ask the Commonwealth Treasurer to relieve them of the responsibility of advancing money to other authorities to build homes for their clients. Finding themselves in. a false position, they stated their objection direct to the Prime Minister. If the Treasurer was correct when he said that this bill was submitted to the directors in July, 1926, what has been responsible for their change of attitude? To my mind, it is obvious that they had no knowledge of the responsibilities that would be placed upon them by this measure ; they were under the impression that they would be required to carry out all the details of a genuine house construction policy, and they came to the conclusion that that was too great a responsibility; but when the debate in Parliament disclosed that the bank would merely be asked to finance building operations by the State authorities, they realized that they had been misinformed. Honorable members on this side of the chamber believe that an injustice was done to the bank directors by the Treasurer. We could not conceive that men of their high qualifications would take up such an attitude towards the housing scheme and the Commonwealth Bank unless they were under a misapprehension. In order to clarify the matter, the honorable member for Dalley (Mr. Theodore) moved that the bill be referred to a select committee to ascertain the views of the directors of the bank on the proposals contained in the measure. The Treasurer strenuously urged the rejection of the amendment, and said that the one principle which the bill contained was the separation of the savings hank administration from that of the Commonwealth Bank. Many honorable members, including some on the ministerial side, were not convinced that that policy was right ;but, influenced by the Treasurer’s statement that the bill was in accord with the views expressed by the directors, they loyally supported him. While the Treasurer was speaking on the 26th October, the honorable member for Bourke (Mr. Anstey) asked this question -
Will the Treasurer answer the question raised by the honorable member for Dalley, who asked what housing scheme was suggested to the board of directors of the Commonwealth Bank?
– It was practically the same as that which the House recently discussed. The scheme has been modified in a minor way as the result of discussions with the savings bank commissioners in the States; but in principle it remains the same.
Subsequent developments conclusively showed that had the amendment moved by the honorable member for Dalley been adopted, much time and trouble would have been saved. In fact, there would have been no need for the bill now before the committee; all that would have been required was authority for the Commonwealth Bank directors to advance money to the State home-building authorities. Either because the directors felt that their good name was at stake, or for some other reason, they took a very firm stand against the Treasurer. I quote the Daily Guardian of the 17th November -
Amazing Change in Bank Policy.
Canberra, Wednesday. - After forcing a bill through the Representatives, to divide the Commonwealth Bank control, Federal Treasurer Page has somersaulted in an amazing way.
Friction, which has existed for eighteen months between the board of directors of the Commonwealth Bank and Federal Treasurer Page culminated in an open clash to-day.
The bank directors won.
They have humiliated the Treasurer politically, forced the Government to reverse its policy on the Commonwealth Bank and Housing Bills, and have caused murmurings against the Treasurer among the rank and file of Federal Nationalists.
In an eleven days’ debate on these measures, all Government supporters, prompted by Dr. Page, urged that the only businesslike proposal was to separate the savings bank from the general bank, and place the two branches under separate control by creating commissioners to administer the savings branch and ration the £20,000,000 to the States for the housing scheme.
Labour argued that divided control was impracticable.
To-day Mr. E. C. Riddle, Sir Robert Gibson and two other directors of the bank visited Canberra, and in an interview told the Treasurer they would not tolerate divided control of the bank.
Dr. Page capitulated.
Though the bills have passed the Representatives he has drafted an amendment on, which the directors- have approved, for introduction in the Senate, restoring full control of the whole bank to the directors.
In his own defence Dr. Page claims to-night that he freely consulted the directors and submitted drafts of the bills to them. They approved of the legislation, but at the last moment have changed their minds.
It is known, however, that for months the bank directors disapproved and resisted the Commonwealth’s incursion into the State banks’ field of building homes for the people.
The directors deny that their attitude has changed in the matter, and retort that Dr. Page brought down legislation that differed from the drafts he submitted to them.
Apparently the directors have declared that the draft measure submitted to them was not the bill introduced into this House. When they asked to be relieved of all responsibility in connexion with the housing scheme, they were under the impression that very heavy obligations were involved. Later they learnt the actual nature of the Government’s proposals, and, as the result of an urgent conference with the Prime Minister and Treasurer, an amendment was made in another place. On the 17th November I asked this question of the Treasurer -
Has the attention of the Treasurer been drawn to a paragraph in the Daily Guardian of to-day to the effect that the directors of the Commonwealth Bank deny that their attitude to the Commonwealth Bank Savings Bank Bill has changed, and assert that the Treasurer introduced legislation that differed from the draft submitted to them? Will the Treasurer inform the House whether that statement is correct?
– On Monday the Prime Minister in the course of a telephone conversation with Sir Robert Gibson, Chairman of the Commonwealth Bank Board, ascertained that apparently there was a slight misunderstanding between the board and the Government in regard to the Savings Bank Bill. At the request of the Prime Minister the chairman and other directors came to Canberra yesterday, and conferred with the Government. They expressed agreement with the bill, which is now before another place, but said that in view of the contents of that measure and the Housing Bill the board would like the opportunity to administer the housing scheme. An amendment to permit that to be done has been introduced in another place.
The inference to be drawn from that statement by the Treasurer is that when they found that the housi ng scheme would merely involve the advancing of money by the savings branch of the Commonwealth Bank, the directors expressed their willingness and desire to control those operations. The amendment made by the Government in another place was to insert the following proviso at the end of proposed new section 35f: -
Provided that, until the appointment of the commission -
the savings bank shall be managed by the board of the bank; and
for the purposes of this part, and of the Commonwealth Housing Act 1927, the Governor shall have all the powers and functions of the Chief Commissioner, and the board shall have all the powers and functions of the commission; and
all references in this part (excepting in sections 35f to 35n inclusive) and the Commonwealth Housing Act 1927 to the Chief Commissioner or to the commission shall be read as references to the Governor or the board as the case may be.
It is obvious that the Government has adopted this method to get itself out of a difficult position. The Treasurer has said that this is merely a suspension of the proposals for the appointment of a separate board to manage the savings bank. But does any honorable member believe that any Government would, in the near future, propose the creation of a second board? Such a proposal would be resented from one end of Austialia to the other. Already there are too many boards, committees, and commissions doing the work that should be done by Ministers and departments; the Government appoints these bodies at the average rate of one a week, and no fresh appointment of the kind would meet with the approval of the press or the public. One week of the time of honorable members was wasted in debating this proposed separation of the savings bank branch from the general branch of the Commonwealth Bank, while more important business remained in abeyance. Now, instead of frankly admitting its mistake, and withdrawing the measure, the Government has introduced an amendment to suspend the operation of powers which it knows it dare not exercise.
– It is a case of “ As you were.”
– Yes; but much time was wasted on the proposal that has been abandoned, because the Treasurer persisted with it in the face of the protests of all honorable members on this side of the House and some on the Ministerial side. Had honorable members known that the Commonwealth Bank directors had not seen this bill, and had not expressed themselves in favour of it, it would never have been passed by this committee. Having seen its mistake, and realized that every word said in criticism of the measure was true, the Government would have been wiser to withdraw the bill and not endeavour to save its credit by a subterfuge of this character. Honorable members on this side of the chamber, assisted by some of our opponents, may at least take credit for having placed the position of the bank in a true light before the public, and for having enabled the Commonwealth Bank directors to vindicate themselves. One can understand the Treasurer’s desire to let himself down as lightly as possible, but the fact is inescapable tha.’ this amendment involves a complete reversal of what he has declared to be a vital policy. Our statement that there was no justification for the attempt to separate the savings bank from the Commonwealth Bank has been proved, and the need for careful scrutiny of the Government’s legislative proposals has been demonstrated by this unqualified backdown. “We pointed out that the creation of a’ separate board to administer the savings bank branch would mean extra cost and corresponding reductions in the total profits of the bank. “We said that this scheme could be administered by the existing Board of Directors, and they have confirmed our contention. One wonders why the Government introduced these proposals without having ascertained the attitude of the Commonwealth Bank directors. I believe that the Commonwealth Bank should carry out the original intention of its founders; that it should be a bank 01 issue, deposit, and reserve, and should engage in all forms of banking. I am pleased that the discussion on the bill has aroused the directors. “When they realized how they had been deceived they came to Canberra and saw the Government, with the result that Ministers had this amendment inserted in the other branch of the legislature. It is a complete vindication of the action taken by members of the Opposition when the bill was previously before the committee. Party discipline should not have operated so strictly as it did, when supporters of the Government, many of whom were convinced that a wrong action was being taken, were compelled to vote for the separation of the Savings Bank department from the general bank. A week of our time was then wasted, and now we are almost where we were when the ‘ measure was introduced.
– The amendment does not bring us back to that point.
– It would have done so were it not for the fact that the Government wished to save its face. It should have candidly admitted that a mistake had been made, and that the directors of the bank had. never favored the separation of the Savings Bank department. Instead of adopting that honorable course, the Government leaves the matter in suspense so that at any time it chooses it may appoint a separate board without seeking parliamentary sanction. The bill should never have been introduced. Owing to the action of the Government much valuable time, during the last week of the session, will be occupied in the consideration of this amendment, when urgent business awaits our attention. It is clear that the members of the board felt their position keenly in being forced to accept the proposed change. They were under the im- «pression that additional duties would be thrust upon them, and they pointed out that they could not accept them. “When they found that the proposal simply meant handing money over a counter, they came post-haste to the Treasurer, who had the amendment inserted in another place. I should be out of order in moving that the clause be repealed. Since it has been passed by the committee, we must decide for or against the amendment, and I do not see my way clear to oppose it.
– “Why proceed with the bill? Let the Government drop it.
– Perhaps that could be done; but it contains certain provisions dealing with another matter, which I think are necessary. If the rejection of the amendment would mean the defeat of the bill, I should be willing to oppose it. If the committee rejects the amendment, and the Senate accepts the bill as it stands, the Government will be forced to appoint the Commissioners. If I can do anything to restore the status quo ante. I should gladly do it. The Government has cut a very sorry figure in this matter. Probably in future proceedings in committee, members sitting behind the Government will take a closer interest in the effect of the bills than they did when this measure was going through, and resent being forced, by party discipline, into doing what is not in the best interests of the country.
.- Our experience in connexion with this bill should make us careful in future in accepting official statements by Ministers. The honorable member for Dalley (Mr. Theodore) moved for the appointment of a select committe to ascertain the nature of the scheme submitted to the board of directors of the Commonwealth Bank, and honorable members supporting the Government expressed surprise at his action. I remember that the honorable member for Eden-Monaro (Mr. Perkins), particularly, asked, “ Do you doubt the statement by the Treasurer?” Members of the Opposition unanimously pointed out that we did not doubt the authenticity of the resolution of the board of directors; but we questioned whether it had been passed with a full knowledge of the facts then before us. The honorable member for Dalley wished to know the nature of the proposal placed before the board when they decided that they could not shoulder the burden that would be imposed on them by the separation of the savings bank department from the main bank, and that an additional board should be appointed.
– On the face of it that was absurd.
– So absurd was it that the Opposition challenged the statement. We said that no self-respecting board would write itself down as being inefficient. When the Treasurer was questioned as to the nature of the scheme placed before the board, he replied that it was practically the same as that embodied in the housing bill. That answer is to be found in Hansard. To-day he tells us that the housing bill was. never placed before the board, and that the only measure submitted to it was the banking bill. But the board carried its resolution with respect to the housing scheme, and the Treasurer said that it was practically the same proposal as that embodied in the housing bill, with some modifications. How could there be any modification of a scheme that had not been presented to the board ? The Treasurer said that a verbal discussion took place between the chairman and members of the board of directors, and on that they framed their resolution ; but we were told previously that the scheme put before them was practically the same as that embodied in the housing bill. The Treasurer informs us to-day that when he came down with the banking and housing bills, he took it that the mind of the board on the latter measure was the same as on a scheme previously alleged to have been placed before it. When the motion was before us for the appointment of a select committee, the Attorney-General remarked that the only principle involved in the banking bill was the matter of separate control. The point, he said, had been already decided by the House. What more was there to inquire into? Yet, we find tha.t that one principle is not accepted by the board. Under this amendment the Government does not withdraw its proposal, so far as the separation of the savings bank department is concerned, but it will be like Mahomet’s coffin, suspended in mid-air. The Treasurer gave the Opposition no credit for sincerity or a desire to ascertain the facts. He took up the attitude that we wished to delay the coming into operation of the housing scheme. We answered his objection by pointing out that a select committee could make the necessary inquiries from the board, and a report could be furnished to Parliament during the following week. The honorable member for Eden-Monaro (Mr. Perkins) suggested that our proposal was in the nature of a week-end conspiracy by the Opposition to delay the passage of the Housing Bill, so that when next we appeared before the electors we should be able to point to the fact that the Government’s housing proposals had not been given effect. All that our amendment would have meant would have been a delay of three or four days. I remind honorable members that the debate iu this House took place on the 2Sth October. It is now six weeks since the honorable member for Dalley (Mr. Theodore) submitted his amendment for the appointment of a select committee ; and, as I hare said, the charge then made was that we were seeking to delay the measure in the hope that the Government’s failure to pass the legislation would be used as political propaganda. Now we have the Treasurer coming down with an amendment, the object of which is to suspend the operation of a vital principle of the bill. All that has transpired since we, raised our objection to the proposed separation of the savings bank branch from the general branch of the bank has proved us to be absolutely right. Our intuitions on that occasion were correct.Wecould see the absurdity of the statement that the board had confessed its inability to administer the housing scheme when, as a matter of fact, all that would be required of it would be to raise money and lend it to certain State authorities.
– That principle is in the bill now.
– It will be suspended as the result of this amendment. This action has been taken simply because the Government does not wish to acknowledge its mistake and back down. Does any honorable member imagine that the board would represent to the Government that it could not administer the housing scheme? What representations were made to the Treasurer to force him to make such a humiliating statement shortly after the bill had been passed by this House? We can only guess at what was said by members of the board; but it is evident that they told the Treasurer plainly that there was no need to separate the savings bank branch from the ordinary business of the Commonwealth Bank, and that they had been misrepresented by his statement that they had recommended that course.
– Even under this scheme the board will raise money for rival institutions to spend.
– The honorable member for Lang has said that the same principle remains in the bill. I say that the Government has made a complete backdown, and now proposes to suspend the operation of that principle. To be frank, the Treasurer should strike out the provision permanently - not merely suspend it.
– I think the honorable member misunderstood the purport of my interjection. I said that even now the bank will raise money for rival financial institutions to spend.
– What rival institutions has the honorable member in mind ?
– The State housing authorities.
– The principle I had in mind was the proposed separation of the savings bank branch from the ordinary business of the Commonwealth Bank. That, according to the interpretation of the Attorney-General (Mr. Latham) was the only principle involved. We challenged the accuracy of the Treasurer’s statement that the board had recommended the course outlined in the bill. What we said then has been borne out by subsequent events. The Treasurer told us that he had discussed the proposal with members of the board in relation to the housing scheme. Certainly he gave honorable members the impression that he had submitted an outline of that scheme to the board. If, as he said, the scheme submitted to the directors was practically the same as that contained in the bill, and if the board had recommended the separation of the savings bank branch from the general business of the bank why was it necessary for them to come to Canberra for a conference with the right honorable the Prime Minister and the Treasurer, and why was it necessary to have this amendment inserted in another place? The honorable member for Eden-Monaro declared at the time that the attitude of the board had been wrongly stated by honorable members on this side, and suggested thatin the absence of any comments by the board, we should accept the Treasurer’s statement. Unfortunately for the honorable member, he spoke too soon. It is obvious that the directors resented the Treasurer’s implication in his second-reading speech and in the committee stages of the bill, that the burden imposed upon the board in connexion with the housing scheme would be too great in addition to the ordinary administrative work of the bank. Even the Treasurer now admits that he was wrong. If the Minister would make the amende honorable, frankly, and fairly ; if he would admit that he misled honorable members concerning the attitude of the board, he would do much to redeem his- lost prestige and to restore the confidence of members in any future official declarations by ministerial heads of departments. The board has shown that there is no need to dismember the Commonwealth Bank in the manner suggested originally. It would be better, therefore, if the Treasurer withdrew entirely the proposal to separate the savings bank branch from the Commonwealth Bank. In effect, the Treasurer is doing that now. Actually he is doing everything possible, short of repealing it, to render this recent legislation nugatory. The principle complained of is to be suspended indefinitely. It would have been better if the Government had backed down in a frank and honorable way.
.- The original proposal to separate the savings bank branch from the general business of the bank was strongly condemned by honorable members on this side, because the savings bank business may be regarded as the financial heart of the institution. If the proposal had been carried out, the liquid assets of the bank would ha-ve been seriously interfered with. The Government’s proposal would have meant the appointment of additional commissioners to administer the housing scheme. This, of course, is not necessary since the only additional duties required of the board will be the raising of £20,000,000 for housing purposes and handing it over to other authorities which will be responsible for any actual work done under the scheme. The general opinion outside is that enough commissions and boards have been appointed already, and that the Government would be hard put to it to find any more’ of its friends in search of appointments such as these. On this occasion the Senate has been used to correct a stupid mistake made by the Government in relation to the internal administration of the Commonwealth Bank. The manner in which the Treasurer misled honorable members is highly descreditable. I am satisfied that, had the proposal to separate the savings- bank branch from the general business of the bank been considered outside of party lines it would have been defeated. The Senate has sent the bill back with an amendment and the Government has been placed in a very humiliating position. It is unfair to expect members to be in a position to consider fully intricate legislative measures such as have come before us lately in sessions lasting from 11 o’clock in the morning to 11 o’clock at night and sometimes later. It is apparent that many honorable members did not understand the main principle of this bill. This Government, before introducing the bill, should have given more consideration to the proposal to separate the savings bank from the main Commonwealth Bank. It should have sought the advice of financial experts, especially the directors of the Commonwealth Bank. It was certainly unwise to introduce it before consulting those who were to be directly affected by the change. When the bill was passed honorable members had been given to understand by the Government that the directors of the Commonwealth Bank were agreeable to the change, but it has since transpired that they were not consulted by the Government, and have serious objections to the separation of the savings bank. As a result the Government has used its influence in another chamber to amend the bill as passed in this chamber, so that the savings bank may be carried on as at present, but with a possibility of the separation taking place later. When that takes place it will mean the destruction of the functions of the Commonwealth Bank, and that is the ultimate object of this Government, so that private banking institutions may benefit. If any amendment is moved to prevent the savings bank from being separated from the main bank, I shall certainly cast my vote in favour” of it. This country is carrying a heavy burden of debt, and although we are facing a serious financial crisis, the Government is still indulging in reckless expenditure. There are already eight directors of the Commonwealth Bank, and yet this Government proposes to appoint a commission consisting of three gentlemen, including a bank director, to control the operation* of the savings bank. The Senate should not be able to interfere with financial legislation. The House of Representatives represents the people, while the Senate represents the States, and its principal duty is to safeguard their sovereign rights. The Government has been guilty of political dishonesty in bringing influence to bear upon its members in the Senate to amend the bill. The separation of the savings bank will certainly undermine the stability of the Commonwealth Bank. It is proposed to spend £20,000,000 on housing and to place a commission in control of the scheme. In five years we expended £10,000,000 in settling returned soldiers on the land, and there is little prospect of a return. This Government is more and more placing the control of finance in the hands of outside and semi-official bodies, and I maintain that this Parliament should shoulder its financial responsibilities, and that all expenditure should be subject to the searching inquiry of the Commonwealth AuditorGeneral. I enter my emphatic protest against the separation of the Commonwealth Savings Bank from the main bank, but I fear that it will have little effect, since the Government has a majority, and will therefore force this amendment through the committee.
.- If the Senate’s amendment is accepted by the committee the bill will be left in an unsatisfactory condition. As originally drafted it provided for the separation of the savings bank from the main bank, and was eventually carried in this chamber on the understanding that the directors of the bank were in favour of the change. It has since transpired that that apparently is not the case, and the Government has now given an assurance that it does not intend to insist at present on that portion of the bill that provides for this change. If the amendment is accepted the separation will not take place until the commission is appointed. Tt has been suggested, meanwhile, that the commission will not be appointed, so that the separation will not take place. It would be very unsatisfactory to place such a bill on the statute-book, and it is unfair to ask honorable members to vote for it.
– Does the honorable member intend to vote against it?
– That will depend upon the information given to honorable members. It is not necessarily a sin to vote against the Government.
– Very often it is a virtue.
– If this legislation is placed on the statute-book in the form now proposed, we have, the assurance of the Government that it will not be given effect. I am quite prepared to accept that assurance; but we must remember that this Government will not always be in power. It will be possible for a future Government to appoint the commission and bring the act into force. If it is the opinion of honorable members that the savings bank should not be separated from the main bank, then the Government should make it impossible for that to be done. The Treasurer has now implied that the separation is undesirable.
– Only because the board does not consider the separation necessary for the carrying out of the housing scheme.
– The Government gave no guarantee that it would not make the change at some later date.
– The Government has admitted that, in connexion with this bill, the savings bank should not be separated from the main bank, but the change may take place at some future date by an order in council for the appointment of the commission. Honorable members have been placed in a peculiar position. If we vote against the amendment, what action will the Government take? Will it give effect to the bill as it now stands, or withdraw it? If we vote for the amendment, we place upon the statutebook legislation which we think is unsatisfactory. It would be preferable to withdraw from the bill altogether the provisions relating to the separation of the savings bank. The Government is not treating the committee fairly. It has given honorable members to understand that it is not in favour of this change being made.
– Not at the the presenttime.
– Why not legislate for this change when it is found to be necessary?
– Other portions of the bill would be effective if these provisions were withdrawn.
– They could be withdrawn without sacrificing the other portions of the bill.
– The savings bank is to be separated from the main bank, butthe board, and not the proposed commission, is to be in control.
– In reality there will be no separation because the savings bank, although under the control of a separate officer, will still be within the control of the board of directors. There is to be no change in the control of the bank.
– What effect would the dropping of the bill have on the provision of funds under the housing scheme?
– I do not say that the whole bill should be dropped. As the honorable member knows, I am opposed to the housing scheme, and therefore I should not worry if the bill were withdrawn altogether. I am not looking at the matter from that point of view, however. The House as a whole has approved of the housing scheme, but it has objected to the separation of the functions of the bank. The Government has now agreed that such a separation shall not take place, but this amendment still leaves it open to a future Government to have a commission appointed, and to bring about the very state of affairs to which we now object.
.- The point raised by the honorable member for Batman (Mr. Brennan) is important, but is not fatal to the argument that the bill should be dropped. The honorable member for Batman raised the question whether the Housing Bill makes full provision for the creation of a fund from which the housing scheme is to be financed. The position is set out clearly in clause 7, and the succeeding clauses. Clause 7 makes provision for the creation of a fund, and states how the fund will be administered. Clause 8 relates to the conditions of advances, and clause 10 provides power for the commission to borrow money up to £20,000,000 to ad vance to the building authorities. The Housing Bill would not be affected if the Commonwealth Savings Bank Bill were withdrawn entirely. It might be necessary to make certain amendments to the Housing Bill.
– Are not certain portions incorporated by reference?
– There is a reference to the commission. As the Housing Bill has not yet become law, and is still before the Senate, it would be quite easy to make those relevant alterations there. The Savings Bank Bill,as we have it now with the proposed amendment, consists of ten clauses and the schedule. The essential provision is clause 8, which supplements section 35 of the present Commonwealth Bank Act by incorporating new sections numbered from 35a down to 35w. That is the clause which provides the machinery for the creation of the commission. As it is no longer proposed to set up such a commission, there is no longer any need for such machinery. I ask the Treasurer to point out what there is in the Commonwealth Savings Bank Bill which will be necessary when the housing scheme is administered by the present Commonwealth Bank authorities. It is true that there are somewhat extended powers granted in relationto the investment of funds. Reference to these powers is contained in the new subsection 35w which provides that the savings bank may invest money held by it in certain classes of advances and investments specifically set out. It cannot be contended that the Government or the Commonwealth Bank directorate has not power at the present time to do all that was contemplated in that clause, or under the bill as amended by the Senate. The bill does not confer any additional author ity; in one instance it restricts the authority now held. It does not confer any more power; it does not facilitate the making of advances for house building. It does nothing but save the face of the Treasurer. The most logical thing to do would be to withdraw the bill altogether, and if the Treasurer were frank he would admit it. He has already admitted that the statements which he made when the bill was introduced regarding the attitude of the directors did not convey the actual position,
He said lie took it for granted that the directors approved of the proposed alteration in the bank’s constitution. During the second-reading stage of the bill he was very definite on that point. In reply to the question whether the bank authorities agreed to the alteration, he said: - “I have given the House definite information regarding the actual position.” Well, this afternoon, he disclosed that he had not given the House such definite information as revealed the actual position. We now know that the Commonwealth Bank authorities did not agree to the proposals, and the present amendment has been inserted in the Senate to meet their objection. The amendment we are now considering vitiates the whole of the bill, and renders it unnecessary. The Government should drop the bill altogether, and if it thinks some alteration to the Commonwealth Bank Act is necessary in order fully to effectuate the housing scheme, it can be made by means of a simple amendment. Let me take the Treasurer back over this bill which it is supposed to modify here. Clause 6 provides for the making of a combined statement of accounts by the two branches of the bank; but there will be no need for that now, as the statement as at present issued will meet the situation. Clause 8 is really the essence of the bill, and provides for the setting up of a commission. That is no longer necessary if the Government and bank directors are to administer the affairs of the Savings Bank. There is no need -for a new name for an institution now in operation. There is no need for the setting up of a commission nor any need to make reference to the agreement between the Commonwealth Bank and the States, because they will have their full effect as at the time when they were made; there will be no alteration. There is no need to make provision for a deputy commissioner, or for the behaviour of commissioners, or for declarations of fidelity and secrecy, or for any of those machinery matters. There is no need, in my opinion, to provide for any different way of dealing with the profits of the Savings Bank, or the investment of funds; but. if there is, it can be done more appropriately by means of a separate amendment to the
Commonwealth Bank Act. I urge the Treasurer to reject the amendment, and enable the bill to be laid aside. If necessary, he can introduce a small amending bill to the Commonwealth Bank Act. The position has been fully traversed this afternoon, and the situation more frankly faced by the Treasurer and the com.committee than when the bill was previously before the House. I hope the Treasurer will act on the new experience that has been gained.
.- I opposed this bill when it was introduced because I did not see any need for it. I thought it was something quite beyond the provisions of our Constitution. The sooner we learn to mind our own business the better. However, we have passed the Housing Bill, and now we have this amendment dealing with the proposed appointment of a commission, and embodying the suggestion of the Government to allow the present directors to control the operations of the savings bank. As honorable members have pointed out, we have left the door wide open “for another Ministry, or for this Ministry at a later date, to appoint a commission. As the function of the savings bank under this bill will be merely to lend money in large sums to the State or local authorities, it is clear that there is no need for taking that power away from the board of directors. I do not want to destroy the bill, because the majority of this committee desires that it should become law, and that facilities should be provided for furnishing the money, but I do not think that the door should be left open for the appointment of a commission while the operations of the bank remain as at present. The responsibility would be there, of course, but not to the same extent as if the commission were actually charged with the building of the homes. In the circumstances, I think it ought to be made clear that there should be no interference by this or any other Ministry in the control of the savings bank. To that end I move the following amendment : -
That after the word “ commission “ first occurring the following words he inserted: - “which shall only be appointed upon a resolution passed by both Houses of the Parliament approving such appointment.”
If there is a desire later to appoint commissioners, a joint resolution passed by the Houses of Parliament should confirm the alteration. It is. clear that there is no need for the appointment of a commission at the present time, because the objects sought can be attained under the present system of control.
– Iwish to reply to some of the arguments used this afternoon, especially as some are based on wrong premises. I pointed out earlier that the board of directors of the Commonwealth Bank still recommends a separation of the Commonwealth Savings Bank from the central bank. They are, however, prepared to control the section of the savings bank if it merely provides funds for a housing scheme of the nature proposed. I wish that to be clearly understood, because it has been suggested quite recently that a separation was only suggested because of the necessity of controlling a housing scheme. The original resolution of the board on this point reads- - . . . that such functions are in no way related to the general banking business or to that of a note issue bank or a reserve bank, and the board is, therefore, of the opinion that, under the circumstances, it would be wiser to accept the proposal of the Government to separate the savings bank department from the bank for the purpose of enabling the carrying out of the housing scheme. . . .
Subsequently I read a statement by Sir ErnestHarvey in regard to the Commonwealth Savings Bank’s association with the central bank, and its recognition by other central banks, in which he said it was of advantage from a central banking point of view for the two institutions to be separated as is proposed. Clause 3 of the Housing Bill, which has already been passed by both branches of the legislature, reads -
This act shall be incorporated and read as one with the Commonwealth Bank Act 1911-27.
The effect of the Housing Bill is to limit the power of the Commonwealth Savings Bank to lend money for housing purposes, so if the Commonwealth Savings Bank Bill were destroyed - to use the words of some honorable members - there would be no act to which the Housing Bill would apply. If the Commonwealth Bank Act were amended, as suggested by the honorable member for Dalley (Mr. Theodore), a position which the Commonwealth Bank directors said they could not work under would arise, as the Common wealth Savings Bank could then deal directly with details of housing schemes. Apart from the appointment of a commission this bill does other things. Clause 8 provides for the status of the Commonwealth Savings Bank to be altered. In proposed section 35w, the manner in which the Commonwealth Savings Bank may invest money is stated. It specifically sets out - 35w. - (1). The Savings Bank may invest any moneys held by it -
– Cannot the Commonwealth Bank do that?
– This provides a definite limitation. The savings bank cannot deal with housing in a general way until regulations have been framed, and approved by the Treasurer.
– There would be no difficulty about that.
– But under this bill a definite instruction to the Bank in regard to advances for housing is provided. Paragraph d of the proposed sub-section 35w (1) provides for advancing moneys for the erection of warehouses and storage facilities. Only on Friday I received a letter from the Premier of South Australia (Mr. Butler), in which he said that the State Ministers of Agriculture were satisfied with the clause in the bill covering the points they had raised. Honorable members may recall that I mentioned the point during the discussion of the bill, and the honorable member for Dalley (Mr. Theodore) also moved an amendment in that connexion, the purport of which is incorporated in the measure. The new section provides new methods under which the savings bank may invest money, all of which will be rendered nugatory if effect is given to the present suggestion of the honorable member. The acceptance of such a proposal would involve a complete redrafting of the housing scheme and the introduction and discussion of another measure in both chambers. The majority in both Houses is satisfied with the housing scheme being undertaken through the agency of State instrumentalities, or authorities already engaged in that work, or authorities established by the Commonwealth Government.
– What is the objection to eliminating the particular provision in the measure under which separation of control is provided for ?
– This looks like endorsing the principle of separation.
– The board favours the separation of the savings bank from the Commonwealth Bank, but disserts that the housing scheme provided “for in the Housing Bill can be carried out by it. If later it is found by the board that it cannot do the work, it will have to make representations to the “Government. The Government is prepared to accept the amendment of the honorable member for Swan (Mr. Gregory), which provides that the commission shall not be appointed until a “motion approving if its appointment is passed by both Houses of Parliament. That will make the appointment of the -commission a matter of Government policy.
– That means that effect cannot be given to the principle of separation ?
– Effect will be given to the separation of the Commonwealth Savings Bank and the Commonwealth Bank; but not to the separation of the control of those institutions.
Amendment of Senate’s amendment (Mr. Gregory’s) agreed to.
.- There is a good deal in what the honorable member for Fawkner (Mr. Maxwell) hinted that, by agreeing to the amendment we are approving of the separation of the savings bank from the Commonwealth Bank. The principle underlying the whole bill is the separation of the savings bank from the Commonwealth Bank. It is true that one of its clauses seems to give the bank additional power to make advances for rural purposes, and to provide certain other powers concerning the nature of the investments which may be made. Such powers, however, could be embodied in a short bill which could be passed in one day. Only to-day a measure relating to war service homes, founded on a message, was introduced and carried to the secondreading stage, and could have been passed within an hour if necessary. An amending Commonwealth Bank Bill, enabling the Government to carry out- its policy, which is now embodied in the housing bill, could be handled in the same way and would not meet with any opposition. 1 do not know why the Government should be so obstinate as to persist with this bill, which consists of ten unnecessary clauses, unless it is merely trying to save its face. It seems that no good purpose can be served by so doing. Can any one say that there is any necessity for setting up this elaborate machinery for the appointment of a commission, when it is not intended to appoint a commission at present. As the amendment of the honorable member for Swan has . been adopted, the commission cannot be appointed until both Houses of Parliament approve. Should it be considered necessary to appoint a commission later a short measure could be introduced for the purpose. Under Standing Order 191 I intend to move an amendment, if not now, at a later stage, to the effect that the Senate’s amendment as amended be rejected on the ground that as the bill is no longer necessary to give effect to the Government’s policy relating to housing, it should be laid aside.
– The honorable member wants to secure a majority in the country.
– No ; I am anxious to get an instruction from the committee to lay the bill aside. I do not wish the Senate’s amendment merely to be rejected and then a message to be sent to another place to that effect, when the Senate may insist on passing the bill.
– The honorable member wishes the measure to be repealed.’
– It is not yet a measure. Some honorable members seem to think it is necessary to amend a statute. The bill is not a statute, and the Government could drop it. It would be better to drop this bill and introduce another measure when necessary rather than proceed with what is now only a hotch-potch. I do not know whether this is the proper time to move an amendment such as I have indicated, or whether it should be done at the report stage. If you, Mr. Bayley, rule that such an amendment is in order, I shall move it now.
The CHAIRMAN (Mr. Bayley).The Senate’s amendment has already been amended by the committee, and there- fore it would not be in order for the honorable member to move as he has suggested. I point out that he could attain his end by voting against the amendment as amended.
– I should not attain the same end, sir, as I desire that the bill should be laid aside. I shall raise the point again when progress is reported.
– The only solution to the difficulty seems to be for the Treasurer to report progress and allow the House to deal with the matter.
– My desire would not be met by the mere rejection of the amendment, for then the bill would remain effective. I believe that there is machinery provided in the Standing Orders for the House or the committee to take action which would prevent the bill from proceeding any further.
– If the honorable member desires to achieve that end he’ may move–” That the ‘Chairman do now leave the chair.” If such a motion were carried it would be the end of the measure.
.- The Government should meet the committee frankly. It has accepted the amendment of the honorable member for Swan f Mr. Gregory) to the effect that the proposed commission shall not be appointed until after both Houses of Parliament have passed a motion approving of its appointment. If the Government desires to retain any portion of this bill, apart from the provisions in it which sever the savings from the other departments of the bank, it should seek permission to introduce a new measure with the severance clauses eliminated. That would be meetin the situation in a direct, instead of in a roundabout, way. This Parliament surely has to maintain its dignity. It would be ridiculous for us to placeupon the statute-book a measure which provides for the severance of the control pf the savings bank departments from the other bank, and the setting up of a separate body of commissioners to control it, but not permit the commissioners to be appointed except by a further resolution of both Houses of Parliament.
– Why not drop the bill?
– It appears to me that the measure has not been worth anything like the time that we have been obliged to spend upon it. We were told from the beginning of our discussion of it that the one vital principle in it was the separation of the savings bank department from the bank. I remind the Treasurer that when the honorable member for Wannon (Mr. Rodgers) was speaking during the second-reading debate on the measure, I made the statement that there was to be a complete separation of the savings bank from the Commonwealth Bank, he replied - “ No, only a separation of control.” and charged me with misrepresenting him. Separation of control could under the original bill be effected by administration, and need not involve the passage of any further legislation through Parliament. Now there are provisions inserted that prevent administrative action. ,
– Then these sections would become meaningless.
– That is so. We shall now have one provision which says that the savings bank shall be controlled by a specially appointed commission, and another which says that the commission shall not be appointed, but that the present board of directors of the bank shall retain control of the savings bank. The commission is not to be appointed except by resolution of Parliament. If the board of directors of the bank should find that the dreadful burden of borrowing a few million pounds and lending it in lump sums is too much for it, the Treasurer could introduce an amendment of the act just as easily as he could a motion to provide for the appointment of the proposed commission. I trust that the Prime Minister will allow this matter to be dealt with in a rational way. As the honorable member for Fawkner (Mr. Maxwell) has said, if the amended amendment is agreed to a number of provisions in the bill must become meaningless, for one provision destroys the others. I suggest that progress should be reported to allow the Treasurer to eliminate from the bill the provisions which effect the severance of control. It could then be claimed that at least the bill was intelligently drafted.
– A certain amount of confusion has arisen in the committee. The separation of the savings bank branch from the general or central bank involves two major principles, one of which has regard to the housing proposals of the Government, and the other to the functioning of the institution as a true central or reserve bank. The housing policy of the Government was announced at the last election and almost immediately after it was endorsed by the people the Government took up withthe Commonwealth Bank directors the formulating of a scheme. The Treasurer has pointed out that the directors definitely declared that they did not desire to be associated with a Government housing policy on the ground that it was not one of the functions of a central or reserve bank, although conceivably it might be a function of a savings bank. After the discussions had taken place the bank directors adopted a resolution, with the terms of which honorable members are acquainted, to the effect that a satisfactory method of conducting a Commonwealth housing scheme would be to place it under the control of the savings bank and to separate that branch of the bank from the central or general reserve bank. That view, it is only fair to point out, was based upon the idea that the savings bank itself would make advances to the individuals who desired to acquire homes under the scheme. All our discussions with the bank directors were based upon the mutual understanding that the bank should be permitted to fulfil the true functions of a central or reserve bank, which’ would’ cause it to become the keystone of the financial structure of the Commonwealth. The directors made it quite clear that they considered that if they participated in a housing scheme it would be difficult for the bank to fulfil its major function of a reserve bank. As the ideas of the Government on the subject crystallized the idea of the Commonwealth Bank making advances direct to persons requiring homes lapsed, and the proposition that it should merely loan moneys to State instrumentalities and other bodies which would in turn lend to applicants for homes was adopted; but in view of the definitely adverse view which the bank directors had expressed respecting participation in a housing policy it did not occur to us that such an alteration in the basis of the proposal would lead to an alteration in the views of the directors of the bank. The position to-day is that the directors do not at all agree that the central or reserve bank should be associated in any way with a housing scheme ; but only that the savings bank should participate in it . The point which the Government failed to grasp was that, in view of the fact that the amount of detail work involved had been reduced to a minimum, the board felt that if a separation of the activities of the savings branch from the other branch of the bank were effected it could control both the activities’ of the central bank and those of the savings bank. This involves a separation of the two branches of the bank, although both will be controlled, by the one directorate.
– Then in what sense will the separationtake place ?
– It is provided in the bill that in future the accounts of the two branches shall be kept separate, and it is even contemplated that when an officer of the general bank is detached from it for service in the savings bank certain provisions shall be made respecting his transfer and the maintenance of his rights.
– The bill is based upon the assumption that a separate corporation would be set up, but that has all been destroyed.
– When the honorable member for Swan moved his amendment the Government agreed to accept it on the clear understanding that if the management of the two instrumentalities by the one board did not prove to be effective it would cause a motion to be passed by both Houses of Parliament approving of the appointment of the proposed board of commissioners. As the savings and the general branches of thebank would have been separated in accordance with the provisions of this measure that course offers no difficulties. A number of honorable members have discussed whether or not a separation of the savings from the general branch of the Commonwealth Bank was desirable ; but I point out that, irrespective of the Government housing scheme the type of work which falls within the province of a central or reserve bank would make it necessary to separate the two branches. Such a step is vital to the welfare of the bank if it is to be permitted to fulfil its true functions. Only when it becomes a reserve bank will it really be the keystone of the financial structure of the Commonwealth. .
– Will the bill as amended effect any change in the status quo ante?
– Naturally there will be a direct recognition of the separation of the functions of the savings bank from those of a central or reserve bank.
– They have always been separated.
– No. I can see that there is an impression in the minds of many honorable members that there is no distinction between the status quo ante referred to by the honorable member for Fawkner and the position created by this bill. To get clearly into our minds how very different the position is, we have to concentrate more or less on the objective of making the Commonwealth Bank really a central bank or bank of reserve. Sir Ernest Harvey, who came to Australia at the request of the directors of the Commonwealth Bank to advise them how best the Commonwealth Bank could carry out the functions of a central reserve bank, said that it was not customary or usual to have an activity like a savings bank directly connectedwith the central bank, and he expressed the opinion, already quoted, that there should be a separation, if it were practicable, of the savings bank and the central bank functions of the bank. The directors of the bank have during the last twelve months, been actively negotiating to bring all the Australian banks into line in recognizing the Commonwealth Bank as a central bank for the deposit of their gold reserves. In other words, they have been negotiating to bring about a general reorganization of the banking system of Australia and provide something which Australia has always needed. It has been very difficult to do this, but I believe that the directors of the Commonwealth Bank are very close to the point at which this very much desired arrangement will be achieved. It is unquestionable that the association of the savings bank with the general operations of the Commonwealth Bank has been a factor rendering that achievement more difficult. The bill provides for that separation which is necessary. Although the two branches of activities will be under the same control, there will be a definite separation of the two.
– At the present time the two funds are separately administered, and the savings bank offices are distinct from the general bank offices. What other change will this bill bring about ?
– Let me draw an analogy for the honorable member. If he has a business which has two sides to it he can say quite frankly that it is all one business, and that there is no separation. But after a while he may come to the conclusion that it is desirable to separate the two sides, and, in order to do so, he may establish separate companies”, each to take over one-half of the business the old company has been managing. He would probably appoint the same board of directors to control the two companies, but he would have succeeded in separating the two activities. In the case of the Commonwealth Bank, we provide by act of Parliament for two entities, one the Commonwealth Savings Bank and the other a central or reserve bank, but, as in the case of the business undertaking which has been divided, both kept under the one board; of directors. The Government has suggested that, for the time being, the controlling authority of the savings bank and the controlling authority of the central bank should be the board of directors of the Commonwealth Bank. The gentlemen in control of the two entities will be the same, but the entities will be definitely separated. In. a time of crisis, it is the hope of the Government to have the Commonwealth Bank recognized as a central bank by the Bank of England and the Federal Reserve Bank of America. We want to be in a position to say definitely, “ This is a central reserve bank.” But before we can do that we shall have to point out that it has no longer a savings bank associated with it. If this bill is put through we can say that definitely. We can say that by act of Parliament the Commonwealth Savings Bank has been separated from the central reserve bank. Surely that is different from having our bank a savings bank, a reserve bank and a central bank; all one entity.
– Would not the same end be achieved by making them two departments ?
– If they were two departments we should be hampered in our claim to have the Commonwealth Bank recognized as. a reserve bank like the Bank of England or the Federal Reserve Bank of America.
– So it is.
– Yes; but that is the point we are trying to establish. I cannot understand the opposition of honororable members to a proposal that seeks to achieve the object which the founders of the Commonwealth Bank had in view. If we merely separate the bank intotwo departments as suggested by the honorable member for Wakefield, when we are discussing the position with one of the great central reserve banks of the world and claiming that we have fulfilled all the conditions recognized as appertaining to a proper central reserve bank, we cannot say that our bank has truly complied with those conditions. But. if we separate the two entities of the Commonwealth Bank by the method proposed in this bill, we can certainly say that itis properly a central reserve bank. And the fact that the savings banks is run by the same board of directors twill not affect the position in the slightest degree.
– To no greater extent than does the fact that the Commonwealth Bank also controls the Rural. Credits Branch.
– Exactly. That is the point I want to make clear. The bill before the committee gives effect to a deliberate policy. Apart from the needs of a . housing scheme it is advisable to have a separation between the Commonwealth Reserve Bank and the Commonwealth Savings Bank; but in view of the fact that the small amount of additional work the Housing Bill would throw on those in control of the savings bank business, the Government recognizes that it is not necessary, at the present time at any rate, to create a separate authority to undertake that work. Had the Government not misunderstood the position of the bank or believed that the bank directorate would not be prepared to undertake this savings bank work, we should have been in the beginning quite prepared to get it to do. the work.
– We are coming, back to that position now.
– Exactly. The board now says that it is prepared to carry out this work and the Government is agreeable to an abandonment of the idea that the control of the two sides of the bank’s activities - the savings bank side and the central or reserve bank side - must be separated. I quite see the force of the arguments put forward by the honorable memberfor Swan (Mr. Gregory.). He says, “ While we have agreed that on the ground of expense and on the ground of the amount of work involved it is not necessary to create this commission and involve the bank and the country in additional expense, even with this amendment as it comes from another place; any government may suddenly plunge the country into all this expense, whether Parliament thinks it necessary or not.” To meet that situation the honorable member has moved an amendment providing that this cannot be done at the whim or will of any government, but only by a resolution of this Parliament. The Government has accepted thatamendment and thus ensured that a commission which to-day many honorable members think unnecessary, cannot be created at the whim of any government, but may only be appointed to take over the functions of the savings bank by a resolution of both Houses of Parliament.
– Will this bill effect in everything but the matter of control, the separation desired by the Government?
– Yes. It carries out the intention of the Government, except that for the time being, instead of commissioners controlling the savings bank, the board of directors of the Commonwealth Bank will do so.
– I quite understand that, but in every other respect separation will be effected?
– Exactly. The control will remain with the board of directors of the Commonwealth Bank until such time as by resolution of both Houses it is determined to create a commission.
.- Every time this matter is discussed the more fogged we become. The Prime Minister’s speech has not enlightened us at all. He. has claimed that there are two major principles involved, the housing provisions of the bill and the separation of the savings bank from the central bank. But it is rather strange that we should have that view introduced at this stage, because previously it was urged all through our discussions that the object of the bill was to remove from the Commonwealth Bank all matters relating to housing and the financing of a housing scheme. It was only after the Commonwealth Bank Board took exception to what had been done, and stated that further consideration should be given to the matter, that an amendment was submitted by the Governnment in another place to practically suspend the whole of the provisions of the Commonwealth Bank (Savings Bank) Bill. Now the honorable member for Swan (Mr. Gregory) has moved a further amendment providing that no Government shall have power to appoint a separate commission to control the Savings Bank without the authority of Parliament. The Government has accepted that amendment, and asks honorable members to agree to both proposals, which, in effect, mean the shelving of all its proposals in this regard. The Government couldhave adopted a very much better course in trying to get out of the difficulty in which it found itself as the result of a very obvious mistake. Instead of acting ina straightforward way, and admittingits mistake, instead of saying, “ There has been some misunderstanding;the directors of the Commonwealth Bank are prepared to manage the Savings Bank business, and consequently we are now prepared to allow this legislation to go by the board,” the Government has brought forward a proposal which can be regarded as nothing but a subterfuge. It could easily have inserted some clauses in the Housing Bill to cover the whole position; but I submit that it was not even necessary to do that. The Commonwealth Bank already has sufficient power to advance money on any acceptable security. No harm would have been done if the Commonwealth Bank (Savings Bank) Bill had been dropped ; or, in view of the work to be done we adjourn, if it had been allowed to stand over. That would have been a more sensible course than the one we are now following. Where is the urgency for this bill? There is certainly need to get money to lend for housing schemes. There is little chance of borrowing money either in Australia or abroad at reasonable rates within the next few months ; we shall have difficultyenough in getting the money that is required for existing needs. That being so, this measure is by no means urgent. Very few honorable members are satisfied with the turn that events have taken in regard to this legislation. They realize that a big mistake has been made, and the simplest course for the Government to pursue would be to put the bill aside for the time being, or to admit frankly that there is no need for it. The bill is almost entirely a machinery measure to give effect to the Government’s proposal to establish a separate savings bank with a separate board. It has now decided that a new board is unnecessary. In those circumstances, why persist with this bill? The Treasurer said that clause 8 was of importance, but it does nothing that cannot be done equally well without it. Nothing in existing legislation prevents the Commonwealth Bank fromadvancing money to local authorities for housing; the bank will advance money to anybody who offers adequate security. The Treasurer emphasized the importance of the provision enabling the bank to advance money for the erection of warehouses. The bank can advance money for any purpose without this special legislation. It is quite clear that this special power was put in this bill only because the savings bank business and the loans for housing were to be removed from the control of the Commonwealth Bank. The Prime Minister said that this legislation is necessary to make known abroad the fact that Australia has a central bank. Financiers abroad already know that the Commonwealth Bank is the chief institution of its kind in Australia, and has complete power in regard to banking. What does it matter to the world if we set up another bank to be called the savings bank, or continue the savings bank business under the authority of the general bank, if in either event the same authority will control the business? The mere separation of the savings bank from the general bank would not raise the status of the Commonwealth Bank abroad. Indeed, it would have the opposite effect, because the total profits of the bank would be reduced. I never heard the Prime Minister at a greater disadvantage than he was when trying to defend this bill.
– The savings bank business is kept separate from the general business to-day.
– That is so, and the Commonwealth Bank Act requires that their accounts and balance-sheets shall be separate.
– The honorable member has been endeavouring to demonstrate the unwisdom of separating the two.
– My argument applied to the setting up of an additional controlling authority. I say that both branches of the Commonwealth Bank should be under the one directorate. Although they are under the one directorate now, their accounts are kept separately, and this amendment will make no change in that regard.
– Will the honorable member say what injury the amendment will do to this institution or to any one of its clients ?
– I have been showing that the Commonwealth Bank will suffer in prestige if it is shorn of some of its business. I am convinced that this legislation represents an endeavour by the Treasurer to give effect to the recommendations of Sir Ernest Harvey regarding the establishment of a central bank which would not engage in savings bank business.
Sitting suspended from 6.30 to 7.45 p.m.
– I have pointed out that Sir Ernest Harvey recommended that the Commonwealth Bank should be placed in the same position as the Bank of England. It was not entirelya matter of making it a central bank, but that it should be a bank of reserve. The Prime Minister argued that that was what the Opposition advocated. Of course, it is well known that the Labour party considers that the bank should have the fullest latitude in regard to finance. I do not desire to delay the committee by prolonging this discussion. When the bill was introduced it was urged that it was necessary because the board of directors was not prepared to carry out the duties that the housing scheme involved. Now it has been clearly shown that the members of the present board are prepared to carry out the additional work. They did not understand in the first place that it merely involved the lending of money. Consequently the Government has accepted the amendment inserted in the Senate. This amounts to a complete backdown from the position that it originally assumed. It would have been much better, in view of the decision of the board of directors, if the Government had abandoned the bill, and sought to achieve its object in some other way. I submit that at the present time the bank has power to grant the money required for the housing scheme, which is all that is provided for under the bill. A further backdown on the part of the Government is shown by its acceptance of the amendment submitted by the honorable member for Swan (Mr. Gregory).
– Not at all.
– Undoubtedly; because it puts it beyond doubt that the Government cannot appoint a new board without the sanction of Parliament. I am not so much afraid of future governments as the present Government, because it has shown a desire to appoint this board. The amount of time spent in the discussion of this proposal is evidence of that. We have to thank the present board of directors for extricating Parliament from a difficulty. Had they not intimated their willingness to undertake this work the amendment would not have been inserted in the bill in the Senate; but now that the Government recognizes that many honorable members even on its own side are opposed to what was originally proposed, it willingly accepts the amendment. If ever a government has been humiliated in connexion with a measure introduced by it, this Ministry has on this occasion. Its action has completely vindicated the attitude adopted by the Opposition when the bill was originally before us. There I leave the matter.
.- The consideration of this bill and the present amendment has obviously caused so much heart burning in governmental circles that one cannot believe that the Government, in accepting this proposal, is taking what it considers to be the best course in the circumstances, and the only natura! one to adopt. The Labour party opposed the bill in the first place on a vital matter of principle - the proposed separation of the functions of the savings department from those of the general bank, so as to create a second and entirely ne.w bank. We opposed that vigorously, if I may say so, as one who took a minor part in the good work, and although we did not realize it at the moment, we opposed it successfully. We took the somewhat unusual course, in speaking to the amendment moved by the honorable member for Dalley (Mr. Theodore), of inviting the directors of the bank to refer to our deliberations, and the speeches we had made from this side, directed to showing that if the present directors were not able to handle this new function we should be driven reluctantly to the conclusion that they were not fitted for the important work that they were called upon to discharge. And so the Treasurer makes the amende, whether it is the amende honorable, or the amende hesitante, I am not quite sure ; but I am pre pared to accept it in good faith. The amazing fact about it is that, scarcely had the amendment been proposed, after most profound deliberation and heart-burning in governmental circles, than a further amendment was moved from the rank and file of the Ministerial party, vitally affecting the amendment before the committee. This was to the effect that the position created by the Senate’s amendment should not be varied except by a further decision of the Parliament. That proposal the Treasurer accepted without hesitation and without debate, other than the recommendation of the honorable member who submitted it. It is at this stage that the Prime Minister enters the lists. He asks us not to reject the bill altogether, because he says that, even with the amendment, it makes provision for the separation of the two functions of the bank. Well, with the amendment carried, the Savings Bank Bill remains, and will, I grant, establish a separate savings bank. It will create that strange paradox, a corporation without a body. We shall have a corporation known as the savings bank, with managers who, after all, will be the managers of the whole concern, just as they were before either of these bills was contemplated. I cannot help thinking that the amende is not so wholehearted and frank as it might have been. I feel that there is in this persistent determination of the Government to pass the bill something more than the mere desire to retain what is in the bill. I think that there is a desire to save the faces of the members of the Ministry, and very little else. But there is another aspect of it, and that is that members of the Opposition are not too sure of the whole-heartedness of the Government and its supporters with regard to the Housing Bill. We know that the proposal came somewhat late in the day. A wide hiatus occurred between the election promise of the Housing Bill and its fulfilment. I am one of those who are sufficiently suspicious of the Government to believe that, if the bill were now rejected, it would not be beyond the Government to drop the housing proposals altogether. I do not want any such excuse as that to arise. I am prepared, with my Leader, to rest upon the fact that the Labour party in this matter did a very useful public service. Indirectly it conveyed a message to the directors of the Commonwealth Bank that was appreciated by them, and they in turn conveyed to the Government a message of a kind that it was not prepared to accept when it was tendered to the Government across the table by members of the Opposition. Without unduly glorifying ourselves for our success, we are entitled to offer ourselves a little congratulation. I, like the honorable member for Dalley, would prefer that the whole bill should be scrapped, and that the Government should take the obvious course of dealing with the housing scheme, as it well could, through the existing savings bank legislation, or with any necessary amendments of a machinery character that might be thought necessary. But I am not too sure of the whole-heartedness of the Government in that regard, and, therefore; Iam prepared to have the large amount of dead wood that we shall have in this bill put by in the legislative wood-shed in the shape of useless legislation, so long as we get the kernel in the form of the housing scheme, and the Commonwealth Bank will not be rent asunder.
Question resolved in the affirmative.
Senate’s amendment, as amended, agreed to.
Resolution reported; report adopted.
In committee of Ways and Means.
Consideration resumed from 6th De cember (vide page 2707) (on motion by Mr. Pratten) -
That the schedule to the Customs Tariff be amended.
By omitting the whole item and inserting in its stead the following item: -
Glucose, per cwt. - British, 12s.; intermediate, 15s.: general, 15s.
.- I hope that, in the consideration of the tariff schedule every honorable member, even the Minister for Trade and Customs himself, will refrain from making it a party matter. I do not know whether I am right or wrong in saying so, but I understand that all parties are agreed that requests for increases or reductions in the tariffshould be permissible without any suggestion being made that party issues have been raised. I hope that the debate will be conducted in that spirit. Naturally I do not expect to get all that I am asking for, but I am anticipating that I shall be able to obtain from the Minister some concessions in regard to certain items.
– The trouble is that the raising of duties is regarded by some honorable members as a non-party question, and the lowering of duties as a party issue.
– What I mean is that if the Minister definitely ranges himself on one side with regard to the amount of duties that should be levied, there is no reason why members of his own party should support him absolutely. I thoroughly endorse this statement made by the Minister when’ introducing the amended tariff schedule -
We in Australia possess wonderful natural resources in the way of raw materials, and we realize that the foundation of our security lies in the control and development of those raw materials.
And again -
The welfare of its industries is the chief interest of the nation, and nature offers no security for nations which live by the industries of others.
The first matter to which I refer is the duties on glucose.
– Where is the glucose factory?
– I thought all honorable members knew that it is situated on the banks of the Maribyrnong River, in Victoria. I remind honorable members also that a number of industries in Sydney, Melbourne and Brisbane, depend largely upon the activities of the Maize Products Proprietary Limited.
– I presume that the brewers would be glad to get cheaper glucose.
– I do not wish to enter into a lengthy discussion on this item, but I hope that before I resume my seat I shall be assured of some measure of support at all events, from even the honorable member for Swan (Mr. Gregory), who claims to represent primary producers. Although there may not be much maize-growing in his constituency, nevertheless as a representative of country interests, he should be prepared to do whatever is possible to help primary producers. If the requirements of Australia in regard to glucose were met wholly by the local manufactures, our maize-growers would have in this respect alone a market for 600,000 bushels a year, worth in round figures about £160,000 per annum. Maize is used for the manufacture of starch, glucose, cornflour, and one of the by-products is an excellent food for cattle and sheep. The glucose factory pays in wages and salaries about £60,000 per annum. It also is of considerable assistance to the timber industry, because of the demand set up for casks for the transportation of the glucose to the several cities in Australia where it is required as the raw material for other industries. The manufacture of these casks - I understand that the Maize Products Company requires from 20,000 to 25,000 casks a year - gives employment to about 40 or 45 men, and this industry in turn gives employment to between 45 and 50 bush timber workers. Imported glucose, of course, is landed in foreignmade casks and in no way contributes to the employment of Australian workmen as is the case with the Maize Products Proprietary Limited. All who believe in decentralization should support my request for increased assistance to the company in question, which is endeavouring to meet the Australian demand for glucose. Last year Australia imported, from the United States of America and Belgium, 1,270 tons of glucose, representing 17 per cent. of our total requirements. If the whole of our needs last year had been met by the local manufacturers it would have meant the consumption of an additional 106,000 bushels of maize; representing in value about £35,000 ; 4,000 casks, representing about £6,000 ; and the payment in wages to Australian workmen of about £6,000, as well as about £3,000 for cartage, or a total of about£60,000. I think I have said enough to show that representatives of the primary producers should be in sympathy with my proposal. A great deal of maize is grown at Orbost and Bairnsdale in the constituency of the Minister for Markets and Migration (Mr. Paterson), and large quantities are grown also in the northern portion of New South Wales and in Queensland. I am not aware if much is grown in Western Australia at present. Maize-growers, as a rule, receive on an average from 5s. to 6s. a bushel for maize. Last year the price rose to as high as 6s.1d. In the United States of America the glucose manufacturers are able to buy the raw material at from 3s. to 4s. a bushel so that they have a distinct advantage over the glucose manufacturers in Australia.
– The maize growers in America must be having a bad time if that is all they get for their corn.
– Any responsibility for low. prices in that country must rest upon the Government of the United States of America. We have already done something in Australia to protect our maize growers, I presume at the instigation of members of the Country party, including the Minister for Markets and Migration. I do not suggest that the Minister used undue influence. He has a perfect right to look after the interests of his own constituents. All I know is that the Minister for Trade and Customs (Mr. Pratten) saw fit some time ago to impose a duty of 3s. 6d. per cental on maize, ostensibly to meet South African competition. I am making no complaint about that. The maize-grower has every right to seek protection from what he may believe to be unfair competition. After all that is the natural sequence of events in connexion with tariff duties. If we impose substantial duties for the protection of maize; it follows that further protection will be necessary for the manufacturers of glucose. I wish to make it clear, however, that increased duties in this item will not mean an increase in the cost of the glucose toother industries. It is largely used by manufacturers of confectionery, by tanners, brewers, manuf acturing chemists, biscuit manufacturers and bakers. The extent to which it is used by manufacturing chemists is surprising. I anticipate that the Minister will say that he cannot agree to an increase in the- duties, but I should like to make clear to him and to honorable members generally that I am not now speaking only on behalf of the manufacturers. Members of the Manufacturing Grocers’ Union, an important federated body, have appealed to me through their secretary, to support a request for an increase in the duties . I trust therefore that the Minister will deal out even-handed justice.
That is all that I am asking shall he done in this case. The honorable member for Yarra (Mr. Scullin) the other day, when speaking to the land tax proposals ofthe Government, made it plain that his one object was to ensure even-handed justice being meted out to all sections of the community. I confess that my personal predilections are in favour of doing what is possible to assist the worker. It is my desire that he should be assured remunerative employment so that he may keep his wife and family in reasonable comfort. Unfortunately, owing to severe competition from the United States of America, there is reason to fear that unless additional protection is given to manufacturers of glucose, the industry will go out of existence. On this point the Tariff Board’s report states -
Were it not for the fact that the leading confectionery manufacturers in Melbourne, Sydney and Brisbane are shareholders in the Maize Products Company, it is quite likely that the competition from overseas would have succeeded in extinguishing the local industry.
– The honorable member should read further from that report.
– The quotation I have read seems to sum up the conclusions of the board. Its members appear to be favorable to further protection being granted to the manufacturers of glucose.
-Why not mention the watering of stock?
– I admit that this company, like many other companies, has watered its stock to a certain extent, but I point out that it has also challenged an analysis of its books. Since its inception its average annual profit has not been more than 13 per cent. on the original share issue, and out of that certain charges have had to be met. Taking into account the increased capital - which some would call watered capital - the profit would not be anything like 13 per cent. The company is quite prepared to allow the Minister to send one of his officers to examine its books.
– Is not a profit of 13 per cent. quite sufficient?
– It is a fair proposition. I plead with the Minister to give this industry some additional assistance, and not to crack theparty whip. I hope that he will allow a vote to be taken on this item, to ascer tain the feeling of the committee, and if it is against increasing the duty to the extent that I advocate, then to come to a sensible compromise. The duty proposed in the schedule is 12s. per cwt. British preferential, 15s. intermediate, and 15s. general tariff.
– No glucose is imported from Great Britain; most of it comes from America.
– Some glucose comes from Belgium, but most of it is imported from the United States of America. An impetus has been given to the manufacture of glucose in the United States of America because prohibition has compelled the brewers to engage in the manufacture of commodities other than alcoholic liquors, and among those is glucose. That has caused a certain amount of competition with us in the growing of maize, and to-day, unfortunately, there exists in the United States of America a combine whose operations are likely to cause the cessation of the manufacture of glucose in Australia. It is, indeed, peculiar that when dealing with the tariff, a private member has to move for a reduction in an item in order to obtain an increase in it. It is, therefore, necessary for me to move that this item be reduced by1s. in order to suggest an increased duty of 15s. per cwt. British preferential, 18s. intermediate, and 18s. general tariff. It is unfortunate that we have little time in which to discuss the tariff or any measures that will be introduced before the adjournment of Parliament at the end of this week. I, therefore, do not propose to take up the time of the committee unduly, but since the employment of workmen and workwomen is at stake, I shall fight to my utmost for them. The Minister has sufficient power to protect this industry. Had it not been for the fact that large manufacturers in Brisbane, Sydney, and Melbourne are shareholders in Maize Products’ Proprietary Ltd., its factory would have been closed ere this. Recently I directed to the Minister a question relating to complaints that are being made in the United States of America regarding the methods of the Customs Department here and the duties upon glucose. His reply was very satisfactory to me, because I was looking for information in the interests of an Australian industry, and the Minister supplied it. Last year we imported from the United States of America £41,000,000 worth of goods, the hulk of which comprised “petrol and motor cars. That country is fast overtaking our trade with Great Britain, and at the present rate of increase in two years’ time we shall be receiving more imports from the United States of America than from the British Isles. The following article appeared in the Harbor, issued in December, 1927 : -
Gold to the value of £2,000,000 was shipped by two steamers which left Sydney for San Francisco during October. A consignment worth £1,000,000 was taken by theR.M.S. Makura. Almost half of this shipment was made up of refined gold won in New Guinea. The American mail steamer Sonoma took a further consignment worth £1,000,000. The shipments were made by the Commonwealth Bank in order to adjust bank balances owing to the imports being so much above the value of exports. During the past financial year the Commonwealth Bank shipped to San Francisco gold to the value of £1 1,000,000, of which approximately £4,000,000 represented new gold. The shipments last week were the first to be made in the present financial year.
Australian workmen, enterprise, and capital produce gold within the Commonwealth and its dependencies, only to have it shipped to the United States of America to pay for our excessive imports. In the item before us, we have an opportunity to limit to some extent the shipping of gold from Australia. We cannot send sufficient goods. We are borrowing on the American money market, and the American manufacturers are doing their utmost to expand their trade with Australia. Some of them are establishing factories in Australia, and I believe that the tariff will encourage others to come here.Our imports from the United States of America exceed our exports to that country by £28,000,000. We receive £50,000 worth of glucose from the United States of America, and by increasing the item as I have suggested that money would be saved to the people of Australia, and a measure of assistance would be given to primary production. Maize is a primary product, and I, therefore, look for assistance from those who claim to. represent the primary producers. I am always prepared to assist rural industries. I should be prepared to support a proposal to. increase the duty on butter from 3d. to 7d. per lb., and on potatoes from1s. to 2s. 6d. I am an honest and consistent protectionist. In this case we are using our own raw materia] and manufacturing the finished article, and that is one of the finest things that we can do to bring about the proper development of Australia. I ask the Minister not to throw cold water on my proposal, but to give it a trial, and, if it reacts against the interests of Australia, I shall not oppose its withdrawal. I ask the committee to agree to the further increase in duty, which I have suggested in order to safeguard an Australian industry and provide employment for our own workmen.
The CHAIRMAN (Mr. Bayley).I do not wish honorable members to be under a misapprehension regarding the discussion on the tariff schedule. The honorable member for Maribyrnong has signified his desire to move an amendment.
– Provided that the Minister is favorable to an increase in duty, I shall leave in his hands the moving of the necessary amendment.
– I wish honorable members to understand that, if a motion for a reduction in an item is moved as an instruction to the Government to increase the duty, it does not follow that, if it is agreed to, an increase will subsequently be given. The question as put from the Chair will be merely that the item be reduced.
– I rise to a point of order. When the committee is dealing with deferred duties, will it be in order for an honorable member to move for the omission of certain words?
– Not if such a motion involves an increase in the customs revenue.
– I think it would be well to clear the air in respect of the tariff schedule before we proceed further with the debate. I believe that the Standing Orders provide that a motion may be moved, provided that it does not increase the rate of duty, and, therefore, a motion such as that indicated by the honorable member for Ballarat - to impose a duty at an earlier date than that provided under the schedule - would be in order.. I do not think that such a motion would come under the ban of your ruling, Mr. Chairman, because there is no reference to an increase in the appropriation, since there is not one, nor to any indirect result. However, it would, perhaps, be as well to postpone a ruling upon the point raised by the honorable member for Ballarat until we reach the items relating to deferred duties.
– The Chair can deal only with points of order that have reference to the item under discussion.
.- I think it. is quite obvious that when tariff resolutions lie upon the table for some week’s they beget, all sorts of representations, and in some cases it may be possible to find out one or two weak spots in them. At all events it gives honorable members an opportunity to fairly consider what has ‘ been proposed by the Government. I listened very carefully to the remarks of the honorable member for Maribyrnong upon the subject of glucose, and to the arguments which he put forward for increased protection. The duty has already been increased in the foreign schedule from £12 to £15 a ton, and’ I see no reason, as a result’ of the representations which have been made to me, both here and elsewhere, to hesitate’ at all- in recommending the proposals of the Government to the committee. Perhaps it will- clarify the position if’ I give honorable members all the information I have regarding the1 position. Maize products manufactures of. any sort are of very great benefit to the maize growers, and I realize to the full the importance of such industries. The company engaged in making glucose pays from £60,000 to £70,000 a year in wages to 280 employees; -and uses, in the course of its business, about half a million bushels of maize a year. Such an industry is of the very greatest importance to the primary industry of maize growing, and should receive generous assistance from Parliament. Let us see whether or not the proposals of the Government are : fair and reasonable. The importation of glucose for 1925-26 amounted approximately to 25,000 cwts., valued at £25,000. In 1926-27 the importations showed a very slight decrease; but were still approximately 25,000 cwts., valued at slightly over £22,000. The Australian production in 1925-26 was 148,000 cwts., as compared with an importation of 25,000 cwts., and in 1926-27 the Australian production was 144,000 cwts. These are the figures of trade and manufacture under the duty of £12- a ton, and in. addition to- that duty there- is also a duty amounting to £1 10s. per’ ton of glucose imported on the casks in which it is packed. Therefore, even under the old tariff, there was a protection- of £13 10s. a ton on imported glucose, and that has been raised to £16 10s. a ton in this schedule. I am giving these figures to show that the proposal of the Government is sound and reasonable, and, may I say, somewhat generous. In fairness to the Maize Products Company I should say that the price of maize has a very important bearing upon the position; nevertheless, on present figures it seems to me that the Government’s proposal covers all the appeals to the generosity of the committee that were made by the honorable member for Maribyrnong on behalf of the maize-growers. I hope that the item will be passed as it stands.
– I rise to support the motion for an increase in. duty, and appeal to the Minister to give consideration to the request. It may be said that the honorable member for Maribyrnong is1 interested iri this matter because the glucose factory is in his electorate. The same thing might be said about myself, for maize, from which glucose is made-; is grown extensively iri my electorate. Maize-growing; however, is not limited to my area. It is a national industry’ arid other honorable members also are interested in it. The Minister has made out a case which would justify a refusal to increase the duty at all equally as- well as a proposal to increase it by’ the amount proposed by the Government. In 1926, the Tariff Board recommended ah increase of 3s. per cwt. in the duty, but, subsequent happenings have made a higher duty necessary. We are driven into the position of asking for an- increase. The Government has increased the tariff to- protect the secondary industries;and the primary’ producers are called upon to bear the burden. Many people on the land who were freetraders in the past have been compelled to ask the Ministry for duties to protect primary products, such as butter, cheese, and timber. We have been driven to see that some consideration is given to t.he farmers, graziers, and other primary producers. The Tariff Board made its recommendations on the evidence before it at the time of the inquiry ; but much water has flowed under the bridge since hen. The price of maize has fallen in America, and that has a direct effect upon the growers here. The industry is not in so prosperous a condition now as it was, and there is less land under maize than in previous years. In my electorate land which was selling- for over £100 an acre can now be bought for a good deal less, rr, has been said that this company has watered its shares, and that, it has distributed dividends of 134 per cent. One would think from those figures that the company must be in a flourishing condition, yet it is possible to buy £1 shares fully paid-up for 12s. These increases are not asked for so that we may capture the American trade, but that we may maintain the Australian industry. The Minister. has admitted that 280 people are employed in this industry, but I think there are a good many more. A great many casks are used for packing the glucose, and. the cutting of the timber used for. those casks is a primary industry: Mon are employed in the bush cutting the timber, and other men are employed in the cooperages making it up into casks. 1. should think that at least -10Q men are employed in subsidiary -industries. That, however, is to adopt a protectionist argument, and I do not propose- to build my case on that. I think the industry is entitled to an increase in duty, and if it was fair that it should receive an increase of 3s. a cwt. in 1926, it is, I think, entitled now to one of os.
– The honorable member is asking for protection against the protectionists?
– Yes, that is practically what it amounts to. The people are being driven off the land because of high wages and increased costs, and it is time they asked for a little for themselves. That is particularly applicable to the dairying industry, and it- also applies in this case. Except for the importations from abroad, another 160,000 bushels of Australian maize would have been used in the manufacture of glucose, and that would have given a great impetus to maize-growing.
– Does the honorable member suggest that the glucose manufacturers would have imported maize if -they could have got it here?
– Not unless it could have been imported more cheaply. The Minister has granted increased protection on cornflour, which is a product similar to glucose.
– A duty amounting to 2s. 6d. a cental on maize.
– Yes, but not on maize products.
– How can the. honorable member say that cornflour and glucose are the same thing?
– They are connected at any rate, and are made from the same grain.
– The honorable member might as well say that boots are the same tiling as leather.
– I think cornflour and glucose are very closely connected. They both concern the growers of maize. If the Minister would grant the extra increase asked foi- it would leave the industry in practically the same position as it would have been if the recommendations of the Tariff Board had b.een given effect to at the time they were made. Taking into consideration the reduced price of maize in America, and the extra cost of production, due to such things as the reduction of working hours as the result of legislation passed in New South Wales since the report was prepared, and the institution of compulsory insurance in that State, an increase of 5s. now would just about equal the 3s. recommended by the board in 1926. Neither the Tariff Board nor the Minister is to blame for- the late presentation of the report which is now before us for consideration for the first time. The board has made certain recommendations which most honorable members have not had an opportunity to study. If they had noticed that the report is dated February, 1926, they would realize that the whole position has altered, and that if the board, instead of this committee, had to consider the question to-night, it would have no hesitation in recommending that the duty on glucose should be increased by 5s. per cwt. I have many other figures which I could submit in support of a higher duty, but have no wish to repeat what the honorable member for Maribyrnong (Mr. Fenton) has already said. I earnestly appeal to the Minister to be as generous in this case as he has been in connexion with the duties on butter and cheese. He has certainly not been as generous in the matter oi an increased duty on maize products as I should have liked him to be.
.- We ought to be very thankful that the Tariff Board submitted its reports last year. If, as the honorable member for Eden-Monaro (Mr. Perkins) has said, the legislation since passed by the Labour Government in New South Wales and the conditions appertaining to industry generally were taken into account, it would be necessary to increase the duties on every article imported into Australia. If the Commonwealth and States Parliaments legislate in such a way that the cost of production is increased, it necessarily means that customs duties must be increased accordingly. If that were done, I do not think it would be very difficult to determine the position we should occupy at the end of a few years. The honorable member for Maribyrnong (Mr. Fenton), who had a well-prepared “brief, pleaded very earnestly in support of a certain industry in his constituency, and urged all primary producers in Australia to come together to give a little extra help to this big organization manufacturing certain products from maize. I do not think, however, that the honorable member gave any special reason why the duty should be increased. He only said how necessary it was to encourage the production of Australian maize, which, incidentally, would provide work for coopers, who, of course, gave work to timber-getters; but he quite forgot those employed’ in the manufacture of “hoop iron used on the casks and one or two other essentials! In dealing with -propositions of this kind, we have to consider the future of Australia, the extent to which the cost of production and cost of living are being, increased, and the likelihood of Australian manufacturers being able to compete with other countries. . The honorable member for Maribyrnong, in speaking of our trade with the United States of America, did not suggest the possibility of Australian manufacturers being able to compete abroad with other countries in the manufacture of glucose, cornflour and other commodities. Are we in the position that we must never dream of exporting the products of our secondary industries? I have read the Tariff Board’s report, and cannot understand what induced it to agree to an increased duty. If the board considered that a higher duty was necessary it should have shown that the company, which is employing a large number of men, was failing, and could not carry on in face of the competition from foreign manufacturers. According to the figures quoted by the Minister, nearly the whole quantity of glucose used here is manufactured in Australia. There is only a very small proportion coming from other countries. Is that small quantity affecting the local industry, and if so, in what way? The whole difficulty is that with these small imports coming in the company cannot increase the price as it would like to do.
– It had its opportunity during the war period, and did not put up its price, although many other manufacturers did.
– We have had too much of that. According to the report from which the honorable member was quoting, I find that -
The Maize Products Proprietary Limited commenced operations in 1913 with a nominal capital of £50,000 of which £34,000 was taken in actual cash. In 1920 the returns from the Registrar’s office showed that the company had 200,000 shares, actual cash paid up being £166,500. The 1924 reports showed the company registered with 600,002 subscribed and £2 in cash. The number of shares in the schedule fully paid-up, otherwise than in cash, is over 500,000, and there were a number of shares (about 63,400) issued partly paid-up to 14s. From this it was contended that the company was actually in a very prosperous condition, and did not require protection.
The board also made further comment as to the shares being well held and as to the company paying a dividend of 7-J per cent.
– The company also manufactures starch and cornflour.
– Yes, and all its products’ are highly protected. Australian manufacturers of these commodities cannot find a market outside Australia. I am informed that -
The local company has enjoyed a protection of £12 a ton on glucose and £1 6s. on barrels, making ft total duty of £13 6s. a ton, which is equivalent to 145 per cent, on American home consumption value.
Imagine protection of 145 per cent, on the American home consumption value! Not being satisfied with that, the duty has been increased by £3 a ton, thus bringing the protection up to 168 per cent, over the home consumption value in the United States of America. Surely a higher duty is not needed. The manufacturers of products from maize in the United States are competing with the manufacturers in the other parts of the world, and are providing good conditions and pay wages as high as we do. I intend to move for a reduction in this duty which is too much to give to one company. Unless we have some competition from outside, we shall be dependent solely upon Australian supplies.
– What kind of a home market have they in America?
– An extensive one, but they are also able to export to Australia and other countries.
– Their home market is their sheet anchor. 0
– We should endeavour to build up a bigger home market in Australia, but the Government is doing its best to destroy it. We are making conditions so bad that it will be almost impossible for the men on the land to carry on. I know the honorable member for Wide Bay (Mr. Corser) will say that the maize-growers cannot get on without a duty of 3s. 6d. a cental on maize.
– Neither can they.
– What is to be our position if an embargo is placed upon the importation of maize during a drought period? How is the man in the outback country to feed his stock? I suppose he can starve, so long as the maize-growers are getting what they con sider a fair thing. I want to help the maize-grower by reducing the cost of production. The honorable member should know that we cannot put money into the pockets of one section without taking something out of the pockets of another. That is what we are doing. T am further informed that -
The local company were supplying us with glucose, but immediately the tariff revision was published we had to pay an extra 30s. per ton.
– Who is “we”?
– That is the statement of a Melbourne manufacturer. It continues - lt looks very much as if this extra duty was desired, not to stop foreign competition, but to give extra protection to the already excessive profits being made.
According to the Tariff Board’s report a number of shareholders in the company are engaged in the confectionery business. I cannot understand why some honorable members should be in favour of increasing the price of the working man’s beer and the cost of sweets to youngsters. The price paid to-day for lollies is so high that one gets only about six chocolates for 2s. I should like to have a firm option over a number of these shares at 12s.
– The honorable ‘member would rather see the shares of a foreign company rise in price.
– Not at all. Those engaged in the confectionery business who are largely interested in this industry, are anxious to obtain higher duties, which will mean increased prices for confectionery and other commodities in which the by-products of maize are used. Has this company been subjected to any intense competition? The Minister’s figures show that it has not. I was pleased when I first heard that a maize products company was being established; I thought it would assist persons engaged in the production of maize, and that possibly there would be a surplus which it would be able to export. Is it essential, however, that Parliament should be asked to impose a duty up to 168 per cent, whenever a person says that he is going to start an industry? It is monstrous. I have never advocated absolute f freetrade, and I would not be opposed. to the duties which were first imposed under our protective policy, which were usually from 10 to 20 per cent. We should not, however, be asked to protect industries for all time. The honorable member for Maribyrnong said that if the duty is increased it will be the means of assisting other industries which he enumerated.
– That is so.
– There is another section of the community, however, that is feeling the pinch. Although our population has been increasing, primary production has decreased. It makes one ashamed to think of the enormous duties that Parliament is being asked to agree to. It is time honorable members opposite supported a policy under which workmen would be paid for what they produced. It is time we adopted the piece-work and profit-sharing system. Any man who preaches a class war in Australia, and who says that capital is not needed here is mad. Australian capital needs capital, labour and brains to put her industries on a firm footing, and brains should be paid for. We ought to do everything in our power to overcome the feelings of enmity with which different sections of our people regard each other.-. It. has been said that American glucose has been dumped in Australia. On that point the Tariff Board makes this comment in its report -
Attached is a statement showing maize glucose prices as obtained from the official representative, with the estimated landed cost of the” latter based on evidence as to freight, duty, and landing charges (£18 14s. Gd. ), obtained from evidence, with the comparative landed costs per ton, of actual shipments imported into the Commonwealth. These show that there has been no attempt to dump glucose into Australia from the United States of America.
The Minister for Trade and Customs is empowered by act of Parliament to impose an extra duty on goods which are’ being dumped here, ‘and, so far as I am aware, he has administered the measure effectively. He has not suggested that glucose is being dumped here, although the honorable member for Maribyrnong (Mr. Fenton) has done so. The fact of the matter is that Maize Products Proprietary Limited have done and are doing profitable business in Australia. Appar ently the shares in the company have been watered to an extraordinary extent. I move -
That the following words be added to item 27, “And on and after 13th December, 1927, per cwt., British 10s., intermediate 10s., general 12s.
.- When a subject of this description is under consideration even strong protectionists should ask themselves at least two questions, namely: “What is the real position of the firm or firms interested in this industry?” and, “What will be the effect of this duty on other industries or how does the existing duty interfere with the progress of or benefit other industries ?” An inquiry along those lines in this case is enlightening. The report of the Tariff Board on glucose gives quite a lot of information of a kind that is not usually contained in its reports. It states, for instance, that Maize Products Proprietary Limited commenced operations in 1913 with a nominal capital of £50,000, of which £34,000 was taken in cash, but by 1924 the stock had been watered to such an extent that the nominal capital had been increased to £600.000.
– Additional capital to the amount of £166,500 was paid up in 1920.
– Nevertheless that is a remarkable development in eleven years. I submit that a company which is able to water its stock to that extent has no business to ask Parliament for increased protection. It must have made huge profits which it has distributed to its shareholders in the form of bonus shares instead of in dividends, or instead of building up reserves. I do not know what reserves it has, but it is quite apparent that it is not justified in pleading poverty. The honorable member for Eden-Monaro (Mr. Perkins) stated that shares were on sale at 12s., but the Tariff Board has pointed out that some of the shares are only paid up to 14s. On this point the following paragraph in the board’s report is interesting -
Even though Maize Products Proprietary Limited sales had fallen off slightly during the past twelve months) their turnover had increased, and through the company having such a monopoly their shares are unprocurable, nor can any recordbe found of sales having taken place. The dividends are evidently too good to part with the shares.
In the light of that statement how can it be argued that this company is suffering severely from competition abroad? I have often heard protectionists say that they favour the imposition of duties only until an industry becomes properly established.What does that mean? The late Major Oakley, as chairman of the Tariff Board, made the statement on one occasion that when a company had secured a fair proportion of the local market it should cease to require special protection. This company has secured 87 per cent. of the Australasian market.
– It is the maize-growers who want this protection.
– That is a bogey put up to get honorable members to support the increased duty. Let us look. at. the question apart from the maize-growers for a moment. I submit that the company should not require an extra protection seeing that it has already secured 87 per cent. of the local market.
– Why should it not have the whole market?
– Now we have it. The honorable member for Herbert (Dr. Nott) declares himself to be a prohibitionist. He would eliminate all competition. Let us look now at the effect that these duties have on other industries. This product is used chiefly in confectionery and biscuit-making, and brewing. Leaving out of consideration for a moment the question of whether or not beer has any food value, we must recognize that confectionery and biscuits are an important class of foodstuffs, especially for children. Inspections made in different parts of Australia recently have revealed the disquieting fact that many of our school children are seriously illnourished. I have been astounded by some of the reports which have been issued by school inspectors in Western Australia. An increase in the price of glucose may, therefore, have a most detrimental effect upon the health of our children, for it is an important constituent in certain of their foodstuffs. If is inevitable that this increased duty must prevent a reduction, if it does not cause an increase, in the price of confectionery and biscuits. Of course, that does not matter much to the shareholders in Maize Products Proprietary Limited, who are confectionery manufacturers, or, perhaps, to other persons interested directly in the use of glucose, for what they lose on the swings they will pick up on the roundabouts ; but it matters a great deal to the people generally. I am amazed that increased duties are being imposed by this amended schedule on no less than eight items of food. Seeing that our economic conditions are unsatisfactory, and that there is much unemployment, and distress in the community, we should not be putting extra duties on foodstuffs.
– Is it a time for us to export gold to pay for goods we import ?
Mr. MANN. Why not? The honorable member gives no reason why we should not. We have heard a great deal about the price of maize and the effect this duty is likely to have on themaize-grower. We have been asked to impose this duty for his sake. But has not the maize-grower been given a duty? Has not his case already been favorably considered by the Government? Are we to have this principleintroduced: that because a duty is imposed to protect the maize-grower we must also impose a duty such as thisto again protect our maize-growers. The maize-grower already has his duty, which from a glucose standpoint, is equivalent to £5. 5s. a ton:
-Doesthe honorable member not know that. 1,270 tons of glucose are imported each year?
-Yes; if that quantity had not been imported we should not have had cheap glucose for use in our manufactures. Is the honorable member aware that the Tariff Board report says that the Maize Products Company cannot secure in Australia all the maize it needs, and has to make up its requirements by importations from South Africa.? The honorable member for Wide Bay (Mr. Corser) gains nothing by trying to shout me down.
– The honorablemember is missing all the points.
– Later on the honorable member can make all the points. I am giving him plenty of material to make a speech. It is evident that the honorable member recognizes the cogency of my argument. But this is not the time to consider the maize-grower; this item has nothing to do with him. He is already afforded heavy protection, and the honorable member for Wide Bay has no right to bring him into the discussion of a duty intended to protect the glucose manufacturer. I have already pointed out that, from the glucose standpoint, the duty on maize represents £5 5s. per ton, and if to that is added the extra duty of £3 per ton now proposed for glucose, it gives to . the glucose manufacturer a total extra protection of £S 5s. a ton. The honorable member for Maribyrnong (Mr. Fenton) has said the manufacturers of ‘glucose have guaranteed that if this extra duty is imposed they will not increase their price. What authority has the honorable member to give such a guarantee ? We had a similar statement in regard to the steel manufacturers. They gave an undertaking to the Minister for Trade and Customs, and I believe that they kept it, but we have heard nothing from : them in regard to the new duty: That, however, is another question. I do not know that the honorable member for Maribyrnong can give any guarantee that the manufacturers of glucose will not raise their price. But even if the guarantee he has given be reliable, I want to ask why we cannot sometimes have a guarantee to reduce the price. Why have we always to consider living at present prices? We are now assailed by competition from countries that are reducing their cost of production. We are surrounded by countries, who either by working harder or by employing better methods, can produce more cheaply than Australia. Yet we are apparently to remain in our isolated position with prices going up or maintained at their present, high level. As a matter of fact, we are having these increased duties not because the manufacturers are doing badly - the records show that they are not - but for an entirely different reason. World prices are rapidly diminishing, and the people of Australia will not be content to maintain costs of living owing to the high taxation they have to pay. The Australian manufacturers realize that presently there will be so much competition from outside that their prices will have to be brought down, and the only way to prevent it from happening and prevent the public from having a moderate and sensible cost of living is to impose higher duties. In a word, the purpose of this tariff is as much to prevent prices ‘ from coming down, just as they are coming down in other parts of the world, as it is to send them up. The effect of these duties will be either, to maintain prices or to prevent them from falling. The duty on glucose has no relation whatever to the .duty on maize, and should not be considered in the light of affording protection to the maize-grower, who is already covered by another item in the tariff. No industry is entitled to come here and ask for a concession because already a concession has been given in another direction.
– This duty is to afford protection to a by-product of maize.
– In giving protection to one industry we must always be careful that we are not increasing the cost of production in another direction. By increasing the duty on glucose we are bound to cause a rise in the cost of the raw material used in certain industries which are dependent on glucose, and thereby we shall be raising the cost of living. I have read the reports of the Tariff Board carefully, and I do not think that any of them discloses a clearer case against increased duties than is given in- their report on .glucose.
– The Tariff Board has recommended this duty.
– I know that the Tariff Board has recommended this duty, but if we are bound to accept its reports we might as well shut up Parliament and give the Tariff Board the task of imposing duties. Cannot we exercise any discretion in the matter?
– No ; let us take the advice . of theorists!
– The honorable member evidently wants us to take his advice, because the protectionist who is all the time trying to argue against the accumulated facts which are demonstrating the failure of his system is a pure theorist. The old duty on glucose was equivalent to 127 per cent. The duty was £12 a tori under all three headings, plus a duty of £1 9s. 6d. on casks. As far as I can gather this duty on casks is confined to glucose and wine casks. Why, I do not know.
– I am told that the casks can be sold for 9s. each.
– According to the Tariff Board glucose casks are worth 3s. each, but in most cases they are simply broken up.
– How does the honorable member make out that the old duty was 127 per cent. ?
– The inland freight is £2 ls. 9d., the overseas freight £4 0s. 10d., exchange 3s. 7fd., the duty £12, and the casks £1 10s., and the wharfage 6s. a ton, making a total of £20 2s. 3d. a ton, which on the original cost of £16 15s. 4d. a ton is equivalent to 127.16 per cent, total protection of all kinds on the manufacturer’s price. With the new duty the total protection will be 145 per cent.
– There is already a duty of 250 per cent, on maize, which is the raw material, but I am not complaining of that.
– We have already a tremendous duty on maize. Does the honorable member claim that because we have increased the duty on maize ‘we must increase the duty on every commodity into which maize enters ? If so he is drawing attention to the tragedy of this system of protection. It is all right when it is applied to one or two commodities, but if applied all around the position becomes absolutely hopeless. If it is applied to the basic material and must be applied at every stage in the manufacture of that material, the cost of each manufactured article in the series gets higher and higher until it eventually reaches a height of cost almost beyond contemplation. And then honorable members talk about diminishing unemployment. It seems to me that their idea is to make everybody prosperous by making everybody poor. Unemployment increases the moment we diminish the purchasing power of the community. The imposition of duties and the subsequent higher cost of living make drains on the wage fund that it will not stand. Yet honorable members continue this policy by which more and more men are thrown out of work. The unemployment that it is said we have to-day is the result of the handiwork of those who will not recognize economic truths and persist, against their better judgment and in spite of the facts brought home to them, in the imposition of higher and higher duties. The blame for the present unemployment rests upon them. The unemployment of to-day is bound to be increased by the imposition of this schedule of duties.
.- The proposed duty on glucose would not afford any protection to the primary producer.
– It would protect the industry that provides a market for him.
– The maize-growers say that it would be a protection to them.
– The proposal is to impose a duty higher than the value of the maize itself - a duty that would be more than equivalent to supplying the industry with maize free of cost. This protection cannot be given except by penalizing the children and increasing the cost of living. Surely the present adverse trade balance and unemployment are finger-posts warning us that we are moving in the wrong direction. Instead of continuing in that direction at an accelerated pace, we should call a halt ; yet honorable members are continually contending for a higher tariff, which will only make the position of the Australian producer more difficult. The interest on the national debt cannot be paid by secondary production; the only articles we can export are primary products, and the country is dependent upon the oversea sale of them to pay the annual interest bill. The primary producer is being asked to carry too great a burden.
.- As an Australian and a protectionist, I desire that the schedule shall be adopted as speedily as possible, subject to such amendments as will make the protective policy more effective. But I have long ceased to believe that either protection or freetrade will make poverty impossible. It amuses me to hear the freetraders talking of freetrade as a solution of the problems of unemployment and poverty. Great Britain is a freetrade and low-wage country, and today over 1,000,000 of its people are out of work. When, during the great war, there was a possibility of this country being isolated from other parts of the world, the conviction was driven home to me that Australia should be self-contained, as far as possible, and produce all its own requirements. Looking to the future, I wish to obviate the possibility of our people being again dependent upon any other country in the event of another great war. The glucose manufacturers have done good work in the production of by-products from maize. I know that they are not guiltless.; they made huge profits during the war, and they have since watered their stock. But they are not alone in those faults. If, through the wasting of their profits, the shareholders are not prosperous to-day, I will not deny them the measure of protection that is necessary to enable them to carry on. I am sorry to say I know of many instances of the watering of stock; but that practice is not peculiar to Australian manufacturers - it is world-wide. My view as a protectionist is that, if there is to be a monopoly I would sooner that it were in Australia, so that we might have some chance to control it. Macrobertson, who is a large shareholder in the glucose company, has done wonderful work for Australia. Any one who has travelled the world will appreciate the fact that, largely owing to his persistence and enterprise, Australian chocolates and confections are preeminent, and the imported sweets cannot compete with them. We should be proud of that great Australian industry. If the proposal of the honorable member for Maribyrnong is not adopted, those who imported 1,270 tons of glucose last year at very low prices, will find it profitable to continue importing an increasing quantity from year to year, in the hope of crushing out the Australian industry. Whilst the consumers might temporarily enjoy the benefit of cheaper confectionery, as a result of this competition, they would eventually pay dearly for this luxury if the Australian industry were destroyed. I want to see Australia become a big nation, and in respect of commodities of which our manufacturers can produce the requisite quantity and quality I would not bother with a tariff; I would adopt simple prohibition. The manufacture of glucose is giving employment to a large number of farmers in Victoria, and I shall be surprised if the Minister for Markets and Migration (Mr. Paterson) does not support the request for an increased duty in order to help the maize growers in the Bairnsdale district, who are largely dependent upon the manufacture of glucose. The potato growers also may find themselves beholden to this secondary industry. One company is being formed in Victoria for the production of glucose, starch, and other by-products from potatoes. If this industry succeeds it will help to stabilize the potato market. Instead of potatoes being sent long distances to a glutted market, they will be bought by the factories at prices which will be profitable to the growers. I hope that the Minister will be true to his protectionist principles, for which even honorable members of the Opposition at times are impelled to cheer him, and will grant the request made by the honorable member for Maribyrnong. If an increased duty is imposed, and the glucose manufacturers take advantage of it to exploit the people, a future Parliament will be able to deal with them. Our first consideration, however, must be to preserve the factories that have been established, and enable .them to compete against imports from abroad.
– I support the request for an increased duty on glucose. I have always considered it a cardinal postulate of economics that a nation should be as far as possible selfcontained. I regard the policy of protection as an economic expression of patriotism; therefore I have no difficulty in supporting the schedule introduced by the Minister, and, unless good reason to the contrary be shown, I shall even go so far as to support the request made by the honorable member for. Maribyrnong. I have listened to the speeches of the freetrade trinity from Western Australia - the honorable members for .Forrest, Swan, and Perth - who are so definitely linked with the past that they remind me of the platypus. The policy they advocate, if applied to Australia, would have no beneficial effect upon employment, and would not solve any of the great economic problems that now confront us. The spiritual home of the freetrader, England, is a striking example of what freetrade cannot do for a country. The honorable member for Perth (Mr. Mann) always speaks thoughtfully, and prepares his speeches carefully; therefore J. was surprised to hear him say that the suggested increase of the duty on glucose would be of no benefit to the maize-grower.
– I did not say that. I said that this duty did not concern the maize-grower, because he was already dealt with very liberally.
– I accept the honorable member’s correction; but, lest he should harbour the idea I have attributed to him, 1 assure him that the proposed increase would be of considerable assistance to the maize producer. According to the Tariff Board’s report, ‘not less than 500,000 bushels of maize was used last year in the production of glucose. Honorable members will recognize that the secondary industry already provides a considerable market for the maizegrower. Some honorable members have suggested that the maize-grower is amply protected by the duty of 3s. 6d. per cental on maize; but I remind them that that duty was imposed for the specific purpose of protecting Australian maize-growers against the unfair competition of the black-grown maize of South Africa. Not only was the South African maize produced by coloured labour earning very small wages, but the export of it was helped by a Government subsidy. In those circumstances it would be presumptuous to say that that duty alone is ample protection for Australian maize-growers against competition from South Africa. I have never swerved from my advocacy of a complete embargo upon products grown by black or Oriental labour when they come into direct competition with Australian-grown products.
– I donot think that the honorable member appreciates my argument.
– It seems to me that the honorable member himself is not fully conversant with the conditions in the industry. It is admitted that 87 per cent. of the Australian market is at present supplied by this company, but it will be unable to retain that business if the American product is allowed to enter
Australia without a sufficient impost to keep the production of the imported article upon a competitive basis. Most or at all . events a very considerable portion of the maize used in America is produced by black labour. The second largest competitor is Belgium, and in both those countries - in Belgium above all places - the agricutural labourer receives notoriously low wages. This is reflected in the price of maize in those countries. Therefore, the 87 per cent. of the trade that the company controls at the present time cannot be retained unless a sufficiently high impost is placed upon the imported article. The Tariff Board reports that in view of the competition from abroad and the cost of production, the industry is in need of further protection. That opinion was formed as a result of an unbiased view of the whole position, and I have no hesitation in making my views coincident with those of the board.
– What about the financial position of the company?
– I have not had time to review the whole of the evidence presented to the board ; but I notice that there has been a watering of the company’s stock. A dividend of 12½ per cent. has been paid - actually 4 per cent. on the watered stock -but, in view of the conditions in the industry, that fact gives no ground for undue optimism as to the company’s future, unless it receives adequate protection. I notice that the company shows no reserves. I do not pretend to be familiar with all the circumstances controlling the activities of the company, but the facts that it has no reserves and that many shareholders are important persons in the confectionery trade seem to me to be significant. The honorable member for Perth suggested that the fact that they were shareholders in the company indicated that there was a motive behind the request for additional protection; but let me point out that if these confectioners were not shareholders, in all probability the industry would not now be in existence. By supporting the industry the shareholders connected with a kindred trade have enabled the company to continue in operation. Without that support there would be no glucose industry in Australia. I am not unduly alarmed even by the sentimental aspect presented by the honorable member for Forrest and the honorable member for Perth, who spoke qf the damaging effect from a dietetic point of view of such a tariff upon children. When we examine the reports regarding the physique of school children, we find that it is not so much the food, or the cost of the food, that has lowered their physical powers of resistance, as the unsuitableness of the food given to them. Those foods that for the most part contribute to their health are not unduly dear, provided they are supplied at the right time and in the right quantity. I further venture to suggest that if the company whose operations are under consideration made glucose out of wheat, the honorable member for Forrest would he found to be an ardent supporter of its request.
– Nothing of the kind.
– But as the company uses maize and not wheat, he cannot dissociate himself from his freetrade convictions. I hope that the committee will not take up the freetrade cry too seriously. I have great pleasure in supporting the proposed duty.
.- I intend to support the item, because it means that relief will be given to a section of the primary producers, and, indirectly, to an industry in which the whole community is interested. The honorable member for Perth favours sending gold to the United States of America to pay for the 1,270 tons of glucose imported last year. Is it reasonable to export gold to America to bring to Australia products that we can grow ourselves, and grow in abundance, if the producers receive fair treatment? The imports of glucose last year amounted to the equivalent of 500,000 bushels of maize and from the United States of America alone the imports amounted in value to about £40,000. The Australian producer has to contend with the Navigation Act, the Arbitration Court, customs duties and profiteers. No wonder people are leaving the land. I am surprised at any honorable member uttering one word against the proposed duty on imports from a foreign country on goods that we can supply in abundance ourselves. Maize is produced in America and South Africa under such cheap labour conditions that we cannot compete under our Australian conditions. Although the industry is in its infancy in Australia, I believe that it has a great future. I agree with honorable members opposite that it is far better to have combines in Australia than abroad. If the manufacturers treat the public unfairly, it will «be competent for this, or some future Parliament, to deal with them. I support the item as it stands, feeling confident that a substantial increase is warranted.
.- I support the increase in duty on glucose from 12s. British preference, 13s. intermediate and 12s. general tariff, to 12s. British preferential, 15s. intermediate, and 15s. general tariff, as proposed by the Minister, and strongly oppose the reduction asked for by the honorable member for Swan. The Tariff Board was specially appointed by Parliament to examine requests for increased duties from every possible angle. As a result of years of experience, the members of the board have become specialists, and members would be well-advised to be guided by their expert opinion rather than enter into an unholy freetrade alliance with the honorable members for Swan, Perth and Forrest. After thorough investigation the Tariff Board has recommended this increase, the recommendation has been reviewed by the Minister and the Cabinet, and I hope that the committee will accept the duties brought down by the Minister. The board took into consideration the cost of manufacture and the cost of corn and glucose, both here and in foreign countries such as America and Belgium. The industry can only be carried on in Australia because the sweet manufacturers are the main shareholders of the glucose manufacturing industry, and always secure from this company the glucose required for the manufacture of confectionery. The industry provides work and wa’ges for over 250’ persons, and four times’ that number are indirectly engaged in the industry. From 20,000 to 25,000 containers, made from wood grown in our own forests, are used in the industry, and wages to the extent of £60,000 a year are paid. If the tariff is not increased, the industry cannot continue. Tens of thousands of maize producers are entitled to the protection that they will indirectly receive under this proposal. The Minister was good enough recently to bring down a tariff that gave the producer a direct protection of 3s. 6d. per cental on maize, and an embargo on black-grown maize from South Africa was also imposed. Now the whole of that protection is undermined by the importation of a by-product of maize in the form of glucose. I maintain that a reasonable proportion of the Australian market should be kept open to Australian maize-growers. The primary producer is entitled to have the home market secured to him by this measure of protection. Australia imports 1,270 tons of glucose, representing 106,520 bushels of maize, from’ the United States of America. This importation is likely to be increased. The more maize is imported into ‘Australia the more our home market is reduced to our own product. I hope the committee will support the proposal. I had intended to discuss this question at greater length, but since many speakers have addressed themselves to the subject, I shall not detain the committee longer. No case has been made out by the honorable member for Swan (Mr. Gregory), the honorable member for Perth (Mr. Mann), or the honorable member for Forrest (Mr. Prowse) for a reduction in the duties from 12s. British, 15s. intermediate, and 15s. general, to 10s. British, 10s. intermediate, and 12s. general. I am not a believer in the antiquated and universally rejected principle of freetrade. On these grounds I strongly support the proposed increased duties and oppose the amendment to reduce the tariff.
.- As far as I can see this is not a question of freetrade or protection. The schedule proposes to raise high duties to a higher level, and the suggested amendment seeks to reduce the duties in the general tariff to the level of last year.
– No; much below that level.
– No one can accuse me of being a freetrader. I believe in protection, but under certain conditions. This is a proposal to increase the duties on glucose from 125 per cent, to 145 per cent. That, in my opinion, is too high. “We should not forget that glucose is the raw material for a number of other important industries in the Commonwealth. It is largely used in the manufacture of biscuits and confectionery.
– And beer.
– For the time being 1 shall leave beer out of consideration, and confine my attenton to the effect of these duties on the manufacturer of biscuits and confectionery. Thousands of men, women, boys and girls are employed in those industries. One of the largest manufacturing confectioners in the Commonwealth is established in my electoral division. The products of Cadbury, Fry, and Pascall, which are manufactured in my electorate, are admitted to be as good as any in the world. I am advised that it will be impossible for that firm’ and other manufacturers of confectionery to pass on the duties. Consequently, they will fall directly upon those manufacturing concerns. There is a possibility that these increased duties to benefit the Maize Products Company may have the effect of closing a number of confectionery and biscuit factories. The report of the Tariff Board, to which reference, has been made by other honorable members, states -
The price of maize in Australia during the last five years has not varied more than 3d. per bushel on the mean average. In 1921 actual sales made for milling maize were from 4s. 3d. to 6s. per bushel; in 1922, 4s. 10d. to 5s.; 1923, 5s. to 5s. lod.; 1924, 3s. lOd. to 6s.; 1925, 4s. 3d. to 5s. lOd. ; the mean average prices for these years being 5s. lid., 5s. 2)d., 5s. 5d., 4s. lid., and 5s. od., indicating that the last two years have been the lowest years in maize.
Apparently _ the price this year will be much lower than in former years, because there has been a splendid season in Queensland and in parts of New South “Wales. If there is over-production, naturally prices will come down. It follows then that if extra duties are imposed, and if, as is anticipated, prices for maize decline, the Maize Products Company and not the grower, will secure all the benefit. Honorable members should consider the effect of the increased duties on other industries. Apparently higher rates will benefit only the manufacturers of glucose.. I notice also in the report of the Tariff ; Board a statement that when it was not possible for manufacturers to obtain glucose from America, the Maize Products Company immediately raised its price, and when imports of glucose were again on the market, the company dropped its charges. It is evident from what has happened in the past that if increased duties have the effect of checking importations, the price of the local product will rise.
– My information is that the company raised its price- by 30s. as soon as the new schedule was laid on the table.
– That is one of the dangers that we have to face. I understand that the only two manufacturers of confectionery in South Australia are shareholders in the Maize Products Company, and that they informed the Tariff Board that they did not desire increased duties on glucose. The manufacturers in Tasmania are in the same position. There is every probability, therefore, that increased duties on this article will seriously penalize manufacturers of confectionery and biscuits. Any industry that is protected by 100 per cent, duties, and requires additional duties to enable it to carry on, should cease operations. I shall support the amendment moved by the honorable member for Swan (Mr. Gregory) .
.- I was rather surprised to hear the arguments from this side of the committee in favour of an increased duty on glucose. It has been, said that the duty would benefit the maize-growers, but I contend that they have sufficient protection already, if not too much. I am a primary producer, and the industry with which I am connected receives no protection. We are not asking for protection, but I submit that, where necessary, the primary producers have as much right to be protected as persons engaged in secondary industries. Unfortunately, it is impossible to protect some primary industries. Although those engaged in rural industries are producing 73 per cent, of the wealth of Australia and 96 per cent. of our exports, they are receiving little benefit, indeed, from our policy of pro*tection. The duty on glucose is already high enough, if not ibo high. It has been said by the honorable member for Perth (Mr. Mann), that the duty will amount to 148 per cent. My estimate is 80 per cent.
– The honorable member is not taking the natural protection into account.
– I admit that. The industry is now receiving a protection of 60 per cent., and the natural protection would increase it to 80 per cent, or 90 per cent. That is quite sufficient, if not too much, protection for any industry. I have always favoured a reasonable protection of industry against foreign imports manufactured by cheap labour. This duty certainly goes further than that. Generally speaking, the maximum protection should not be. more than 35 per cent, or 40 per cent. It has been calculated that natural protection to an industry is from 25 per cent, to 41 per cent. That has been given in evidence before the Tariff Board, and I think is not questioned.
– The percentage varies with different classes of goods.
– With light goods it is less than with heavy goods. The average is about 30 per cent. Any industry that is protected to that extent, and cannot progress, does not deserve encouragement. In 1923-24 the total value of all industries in Australia was £348,577,583, the salaries and wages paid in these industries being £77,278,265. In 1925-26 the total value of the output of all industries in Australia was £449,157,000, the salaries and wages paid amounting to £81,616,221. In 1923-24 the percentage of wages paid to the total output was 22.14, and in 1925-26, 18.11. that means that under a 35 per cent, duty the manufacturers here would have an advantage over overseas manufacturers of 15 per cent., without taking into account labour and landing charges which the foreign manufacturers have to pay. That certainly is ample protection. It i3 time that we called a halt in our policy of extreme protection, because it is benefiting no one. It is simply raising the cost of production and living, and particularly the nominal wage of the workers without increasing the effective wage to any appreciable extent. As soon as an .increased duty is imposed the workers rightly ask for an increased” wage because of the increased cost of living. They get it, and the manufacturers ask for increased protection because of the higher rate of wages that they have to pay, and they get it. So the vicious circle goes on. If our duties were reasonable, about one-half of what they are to-day, we should probably be able to manufacture for export, but there is no prospect of our doing so at present. A few days ago the honorable member for South Sydney (Mr. E. Riley) compared the position of Victoria under protection with that of New South Wales under freetrade, before federation took place. I followed his remarks closely, and I agree with what he said. At the time he referred to, I was living near the border of New South Wales, and I quite realize that under protection Victoria benefited to a much greater extent than New South Wales in population, production, and employment. But the honorable member did not mention that the tariff under which Victoria progressed so well, was low, indeed, compared with the tariff of to-day. The late Mr. Alfred Deakin would turn in his grave if he knew that we were imposing such heavy duties. ‘ In his time a duty of 40 per cent, was considered high.
The CHAIRMAN (Mr. Bayley).Does the honorable member for Riverina propose to connect his remarks with glucose, which is the item under discussion ?
– I was endeavouring to show that the proposed duty is unreasonably high when compared with the duties under which Victoria prospered in pre-federation days. Some of the duties in operation to-day are four or five times higher than they were at that time. It is now proposed to increase some duties to the extent of from 80 per cent, to 100 per cent., and as I am absolutely opposed to such an increase, I intend to support the amendment moved by the honorable member for Swan. (Mr. Gregory).
.- I was rather astonished to hear the honorable member for Riverina (Mr. Killen) suggest that the duty on any locally produced commodity should not exceed 35 per cent. I should like to inform the honorable member that on hops which were once imported from Kent, England, at 5£d. per lb., there is now a duty of about 9d. ; and on currants and raisins, from Southern Europe, which were landed at l&d. and 2£d. respectively, a duty of 3d. A duty of 3d. per lb. it imposed also upon apples, and a duty of 4d. on pears. In supporting a higher duty on glucose, I am thinking more particularly of the maize-grower and also of those engaged in the manufacture of glucose. For the year ending the 30th June, 1927, 1,270 tons of glucose were imported. Why should we not use our own maize to produce that quantity? We can assist the production of maize and glucose in Australia only by imposing a sufficiently high duty to prevent supplies coming from America which enter into competition with that produced in the Commonwealth. It is our duty to see that the interests of the primary producers are safeguarded, and that a market is found for the maize produced in Australia. The honorable member for Swan (Mr. Gregory) claims that he wants to assist the primary producers; but he has a peculiar way of assisting them when, as in this case, he submits an amendment to reduce the duty on a commodity which they produce. Since the Tariff Board’s recommendation was made about twelve months ago, there has been a marked difference in the cost of the glucose imported from. America. The Tariff Board states that -
It was proved that whilst the Australian manufacturers’ cost of production was £33 6s. 4d. a ‘ton, American glucose was sold on the Australian market at £33 ls., or 5s. per ton under the Australian manufactured cost.
Since the inquiry by the board has been completed, importations from America and Belgium have been quoted at £31 10s., or 36s. 4d. under the Australian cost of production. Are we to destroy the Australian maize-growing industry and to tell our farmers, who have to face adversity in the form of droughts and the difficulties of transporting stock in dry seasons, that we do not think they need any further assistance ? The only way to assist them in. this instance is to increase the duties and thus prevent American producers from sending their surplus glucose to Australia at a price at which we cannot produce it in Australia. The 1,270 tons of glucose imported from America at the end of June, 1927, represented 106,520 bushels of maize for which the Australian producer lost a market. I cannot understand honorable members saying that they are acting in the interests of the primary producers when they are assisting to destroy the home market for this commodity. As the Tariff Board has submitted a report favourable to the maize-grower, it is the duty of honorable members to assist them by supporting the Government’s proposals. Rice producers are protected to the extent of 90 per cent., but the honorable member for Riverina, who says that a duty of 35 per cent, is sufficient for any product, does not object to that impost but actually advocates it. Some honorable members believe in high duties when they protect industries in their own constituencies, but they oppose .others that will benefit producers in every part of the Commonwealth. I trust that the Minister will realize that the state of affairs in the glucose industry is different now from what it was when the Tariff Board submitted its report, so that there is a greater reason for higher protection.
.- I support the request of the honorable member for Maribyrnong (Mr. Fenton) for an increase in the duty on glucose, and I hope that the Minister will reconsider his decision on the matter. I am persuaded that the honorable member for Swan (Mr. Gregory) has moved his amendment, not primarily for the purpose of securing a reduction in the” duty on this commodity, but as part of an insidious freetrade campaign which he is afraid to carry on openly. His action is, if I may use the term without offence, hypocritical. The honorable member does not believe in a duty on either glucose, maize, or anything else.
– I did not say so.
– The honorable member does not believe in a duty on anything that can be imported into Australia for sale at a lower price than that for which it can be produced here.
– If the honorable member for Darling proposes to talk about honesty, he should use my exact words, and be fair te me.
– I believe that the honorable member and his small coterie of anti-Australians in this chamber are honest in their belief that the way out of our economic difficulties is to buy in the cheapest market; they would be acting more honorably if, in that belief, they were to resist the imposition of all duties. The honorable member and his friends, who comprise our few remaining followers of Henry George, have made a couple of converts this evening in the honorable member for Franklin (Mr. Seabrook) and the honorable member for Riverina (Mr. Killen) ; but before the debate on the tariff schedule is” concluded I am quite satisfied that those two honorable gentlemen will provide us with a somewhat surprising display of fiscal gymnastics. They cannot consistently advocate freetrade for one primary industry and its by-products without doing so for others.
– I have not advocated freetrade, but only the imposition of a fair duty.
– I am afraid that the honorable member for Swan will find that the honorable member for Riverina will fall from grace when rice is under discussion, and that the honorable member for Franklin will go toboganning to fiscal perdition when the timber duties are being considered. The latter will doubtless be a whole-souled prohibitionist in his desire to protect the products of our Australian forests. I am not a fiscal prohibitionist. My object is to try to make Australia a self-contained nation, for I believe that in that way only shall we ensure the salvation of this great continent. All the primary and secondary industries which are necessary to the development of Australia should be protected.
The CHAIRMAN (Mr. Bayley).I must ask the honorable member not to continue in that strain. He may speak in general terms in-order to illustrate a point; but the item under consideration is glucose.
– I am illustrating a point, Mr. Chairman. The honorable member for Franklin and the honorable member for Riverina may be willing to ‘ join the die-hards of the Henry George tribe and follow them into the fiscal wilderness when such a matter as the duty on glucose is under consideration; but I am convinced that when certain other items are being considered their attitude will be very different. It is only because of the natural advantages of Australia that we are able to produce wheat and wool without protection; but I am satisfied that if those commodities were threatened with serious competition from Asia or other low-wage countries, we should find the honorable member for Forrest (Mr. Prowse) crying out for protection for the product of his farm, and the honorable member forRiverina calling out for protection for the product of his flocks and herds.
– I am not asking for a duty on wool.
– Only because the natural advantages of Australia make it impossible for other countries to compete with us in the production of merino and other wools, which are sent all over the world after each wool sale. The honorable member should place himself in the position of those who have competitors in low-wage countries overseas. If in the Argentine or the pastoral States of America, or even Asia, the production of the fine wools we have in Australia were possible, what would be the attitude of the honorable member?
– Order, order!
– Surely in the development of an argument I am permitted to point out the inconsistency of those against whom I am arguing.
– The honorable member is proceeding along lines which would have been permissible in the general debate; but that debate has now closed.
– I am the first honorable member you, sir, have pulled up to-night. There is not one honorable member who has not at some stage been generalizing.
– The honorable member must not reflect upon the Chair. There is ample opportunity for the honorable member to discuss the duty on glucose in all its details without generalizing to the extent that he was doing.
– I have no desire to reflect on the Chair. If the wool industry were imperilled the honorable member for Riverina would be one of the first to come to this Parliament, and particularly to. honorable members of the Labour party, to ask for their assistance for his industry, and because the Labour party is a protectionist party he would not ask in vain. Things are coming to a pretty pass when the Labour party has to appeal to representatives of the primary producers to protect primary producers. One of the points raised by those who seek a reduction of the duty on glucose is that the maize-growers of Australia are already protected; but, according to the Commonwealth Statistician, they are not, even at the present rate of duty. The latest figures in the Commonwealth Year-Book relating to maize are for 1925-26. The last financial year ended five months ago; but the figures we have before us to enlighten ourselves on maize are seventeen months old. It is a shame that we in this Parliament, and the people of Australia, cannot get in theYear-Book figures that are not more than six or seven months old.
– I do not think that the Statistician is to blame. I think the blame must rest with the department that does not give him sufficient funds to do his job.
– I have been fortunate enough to secure figures from the Customs Department dealing with the year 1926-27. I shall quote the net importation of maize. In some years there are exports and in others there are imports. For 1921-22 the net import was 8,746 bushels, worth £708. The Customs Department deals in centals and the Commonwealth Statistician in bushels. That is an anomaly. Honorable members should atleast be able to get information in standard measures or weights. In 1922-23 we imported 1,190,000 bushels of maize worth £202,000. In 1923-24 we imported 2,534,000 bushels, worth £505,000. In 1924-25 we exported 2,500,000 bushels, worth £511,000. In 1925-26, the last year for which the figures are available, we imported 1,507,000 bushels, worth £308,000. These figures show that the maize industry is not protected to the extent some honorable members would have us believe. It is certainly possible to import glucose at a cheap price, but if we are to buy in the cheapest market the logical thing to do is to cut out the manufacture of glucose and follow the advice of our freetrade friends in the corner by taking off the duty on maize because we can buy maize cheaper overseas than we can grow it. We could also cut out our textile industries and go the whole hog, cutting out all the manufacture of goods in Australia and buying from cheap, foreign, low-wage countries all those things with which we are now supplying ourselves.
– None of us want that.
– The honorable member wants to do it in regard to glucose, but he would not do it in the case of rice.
– Or butter or cheese. .
– No; I am waiting to see the fiscal gymnastics of the honorable member for Riverina in regard to many of our primary products. In most instances I think the duties in this schedule are too low, and I am supporting the honorable member for Maribyrnong in his desire to help the glucose industry. Many of our friends who have been complaining about the watering of stock would be the last to give any assistance’ in this Parliament to the passage of a Commonwealth company law which would prevent the watering of stock. Honorable members of the Labour party have been continually asking the Government to take action against companies who do this and impose prices which will enable them to pay dividends on fictitious stock. Those honorable members who protest against this kind of thing would very likely be. the first to endeavour to protect the interests of those people who water their stock.
– Another little insinuation !
– The honorable member for Swan is not always foremost in attacking vested interests in that regard. I support the honorable member for Maribyrnong, not only because of my desire to establish the glucose industry and keep it going, but also as a protest against the freetrade amendment moved by the honorable member for Swan.
.- There is a wide divergence between the views of the honorable member for Maribyrnong (Mr. Fen ton) and those of the honorable member for Swan (Mr. Gregory). The former desires to increase the duty on glucose to £18 a ton, and the honorable member for Swan wishes to reduce it to £10 a ton. I personally do not support either extreme. The glucose industry is of value to the community, and we must adopt a reasonable attitude towards it. I have no fault to find with the Tariff Board’s recommendation. The members of the board made a very carefuly study of the evidence submitted to them, and conscientiously recommended to the Minister what they considered best in the interests of the industry and the country. The glucose industry is not of very great importance; its production in 1925 was worth only £283,000; but I am interested in it because of its relation to the primary producer. In 1925 it purchased 7,400 tons of maize, and I understand that 76 bushels of maize is required to produce one ton of glucose. This is a market of considerable importance to the maize-grower. Maize has frequently sold at the trifling price of 2s. 6d. to 3s. a bushel. We cannot hope to keep men on the land if that is to be the reward of their labour. I am not an extreme protectionist, but every industry must be given achance. When it is given that chance it is the duty of the management to show some appreciation of the protection afforded it by doing all that is possible to supply the consumer at a reasonable price. The honorable member for Franklin (Mr. Seabrook) had a great deal to say about confectionery, but I notice this paragraph in the Tariff Board’s report -
Were it not for the fact that the leading confectionery manufacturers in Melbourne, Sydney, and Brisbane are shareholders in the Maize Products Company, it is quite likely that the competition from overseas would have succeeded in extinguishing the local industry.
That is a convincing reply to the objections of the honorable member for Franklin. During the last two years this company used approximately 1,000,000 bushels of maize, of which only 37,000 bushels were imported. Those figures show at a glance that the company is of substantial value to the primary producer.
– What is the total maize production of Australia?
– It varies greatly, according to seasonal conditions. Fortunately the whole of Australia doesnot experience a dry season at the one time, and there is always some maize-growing district which is able to supply a considerable proportion of the requirements of the glucose manufacturers. I hope that the good sense of the committee will prevail, and that no consideration will be given to the proposal to reduce the duty to a ridiculous amount. The Tariff Board has adopted the right principle in proposing that the duty should he increased from £12 to £15 per ton. With that protection the Maize Products Proprietary Limited will be assisted, and from it the maize-grower will derive great encouragement to remain on their farms.
– Every honorable member, whether he be a freetrader or protectionist, or merely a “ f reetectionist,” will agree that it is is desirable, and indeed nescessary, to develop our secondary industries, more particularly those which utilize the primary products of this country. The Minister, when introducing the tariff, pointed out that “ reductions in prices to the consumer have followed the establishment of efficient industries in the Commonwealth.” The Tariff Board in its report said that in regard to quality, the difference between Australian glucose and the imported article is not perceptible. It went on to say -
The increase in duties was not requested in order to put the price up, because if the price were raised too much, sugar would be converted and used as a substitute.
The Minister pointed out that the policy of protection has developed at the expense of the importer and of the foreigner, and not at the expense of our own population. The honorable member for Perth alleged that the proposed increase of duty would tremendously increase the cost of production and the selling price of glucose in Australia, but, as the Minister stated : -
Keeping in view the need for developing our industries rendered necessary by our isolation from world centres, and also bearing in mind that some of these industries are basic and vital for the purpose of defence, it is worth remembering that this policy of protection is costing the people of Australia probably less than1s. per head per week. Even this sum is being used to help pay for the legacy of the war.
Therefore, if protection does involve some slight increase in the selling price of a commodity, it is not such as the people of Australia would boggle at. The Tariff Board pointed out -
The applicant company is now faced with the position of intense competition from manufacturers in the United States of America . . Were it not for the fact that the leading confectionery’ manufacturers in Melbourne, Sydney and Brisbane are shareholders in the Maize Products Company, it is quite likely that the competition from overseas would have succeeded in extinguishing the local industry.
Whatever was done by the company in regard to the issue of bonus shares, the fact is that it is now in a very bad position, and unable to compete with glucose from abroad. The Tariff Board concluded with this terse recommendation -
In view of these circumstances, as well as of the receding prices, and increasing importations of American glucose, the Tariff Board considers that the Australian industry is in need of further protection and accordingly recommends the present duty of £12 per ton to be increased to £15 per ton.
The duty proposed by the Minister is in accordance with that recommendation. We have to consider not only the secondary industries, but also the growers of maize. I have not heard any previous speaker refer to the fact recorded in the Year-Book for 1927 that-
The cultivation of maize has decreased in Australia by more than 20,000 acres during the past decennium. Increases in area were recorded in both Queensland and Victoria, but the decline of more than 30,000 acres in New South Wales was responsible for the reduction in the total for Australia. The maximum area sown to maize was 414,914 acres as far back as 1010-11, this acreage being considerably in excess of the average planted during the last ten years, which amounted to 315,948 acres…..
The maximum production of maize in Australia was recorded in 1910-11, when the harvest exceeded 13,000,000 bushels. No approach to this figure was made in recent years, until a superabundant crop in Queensland during 1924 brought the total to nearly 12,500,000 bushels, but the average for the past decade was only 8,000,000 bushels. Moreover, the falling off in the demand coupled with the low market price for the grain adversely affected the industry, particularly in Queensland, and the harvest during 1925-26 was only 7,500,000 bushels.
These facts are of vital importance. Not only the manufacture of glucose but also the production of maize is being imperilled. The fact has been urged that Parliament gave protection to the maizegrowers when it imposed a duty on black-grown maize from South Africa ; but all that was done then was to bring up to date a trade agreement made in 1904. Since then conditions have, changed. The costs of primary production have been increased by various circumstances, and it has become necessary not merely to stimulate and help the glucose industry, but also to secure a constant and stable market for the primary product, maize.
– What is the cost of sending maize from Cairns to Melbourne ?
– That is another consideration with which I do not propose to deal at this juncture.
– What is the cost of sending it down?
– Those conditions are not brought about either by the manufacturers of glucose or the growers of maize. We are faced by the disturbing fact that the rate of importation has increased from8 per cent. to 14 per cent., and there is a possibility of a further increase. It must be noted that much of the maize used in America for the production of glucose is grown in the Argentine and treated on the American littoral. Although subject to the payment of import duties, there is a rebate of the whole of the duty on so much of the maize as is used for export manufacturing purposes. That enables the growers in the United States of America to compete on rather more than fair terms with the Australian industry. Considering that primary production is necessary to open up the country, that the maize-growers are producing less and placing less land under cultivation than formerly, and that the manufacturers are having a bad time, I should have been prepared to go a little further than the Minister did in this matter. Therefore, I cordially support the increased duty.
– When the Tariff was before us last year honorable members, including myself, spoke at great length on the subject, and I see no reason to alter the views I then expressed. I am not greatly interested in the subject of profits from maize or the by-products of maize. My interest in this matter, as in other matters, is in the consumer, and I agree with the honorable member for Franklin (Mr. Seabrook). I notice that most of the persons who are applicants for the increase are connected with one particular company. Six witnesses appeared before the Tariff Board in favour of the application, and five of them are associated with Maize Products Proprietary Limited. The sixth witness was the secretary of the Manufacturing Grocers’ Employees’ Union. Four of the six witnesses who opposed the application were from Sydney, Tasmania, Melbourne and Adelaide respectively, and the other two were agents for Corn Products Company of New York. It will be seen that the interests of the opponents of the duty cover a wider range than those of the witnesses in favour of it.
– Are they not equally interested ?
– That may be; but the interests of the opponents are more widely spread, and that concerns the consumers. If honorable members look through the report of the board they will find that this industry has already been favoured by a high protective tariff, under the influence of which it has gone ahead by leaps and bounds. This is the first tariff item on which an opportunity has been presented for members to cast their vote. The view I have already expressed in this chamber, whether popular or not, is that our tariff is already high enough, if not too high. I propose to support the amendment moved by the honorable member for Swan to indicate my general view on the tariff, but in saying that I except key or vital industries.
– Far be it from me that I should intervene too often in connexion with the long discussion that we must have and that we hope will end this week, but, in view of some of the statements that have been made, I cannot allow this occasion to pass without mentioning a few facts. The duty is a high one, but certainly not 148 per cent. It is something like 75 per cent. or 80 per cent; but it should particularly appeal to those who represent the man on the land We know what the position is in regard to corn growing in the United States of America.
Would our maize-growers be satisfied to continue to produce maize for the price received in America for making glucose? So far as the cost of raw material is concerned as between the American and the Australian manufacturer, at least half of the duty goes into the pockets of the local maize-growers owing to the higher price they receive under Australian conditions. Therefore the maize-grower will receive roughly half the duty and the manufacturer the rest. That seems to be a fair and reasonable proposal, and I hope that the committee will support it.
– I cannot agree with those honorable members in the Corner who say that the company, which has met with abuse from certain quarters, has only maintained its majority sales in Australia because it has from time to time reduced the cost of its products. In my opinion it is now manufacturing at a loss, and I am very much afraid that the majority of honorable members will not be prepared to give the industry a fair chance. At the same time I am not afraid that the amendment by the honorable member for Swan will be carried. Within a few years the price of glucose has fallen from £45 to £33 10s. a ton.
– Yet the company pays 12½ per cent.
– It does not return that dividend on its watered stock. On that it only pays 4 per cent. It has yielded 13 per cent. practically since 1913 on its original capital.
– Does the honorable member wish to give the company increased protection so that it may pay handsome dividends on its watered stock ?
– Not at all. I am not a defender of concerns that hide their real position by watering their stock. This company is prepared to allow its books to be examined by auditors from the Customs Department. I understand that the average profit paid on its original capital is not more than 13 per cent. I remind the honorable member for Franklin (Mr. Seabrook) that Cadbury, Fry and Pascall, the big confectionery manufacturers at Hobart, at times obtain their glucose from the Maize Products Company, and I believe they are satisfied with both the quality and the price. I am advised that, although the price of glucose has fallen from £45 to £33 a ton, the retail price of a 3-oz. block of chocolate has remained the same throughout the Commonwealth.
– Has not the size of the block been increased?
– I believe that some manufacturers have done that. However, I shall not further delay the committee. I was hoping that I would have a more favorable reply from the Minister (Mr. Pratten). In closing, I express the hope that if the industry is injured by the dumping in Australia of the United States product, the Government and Parliament will step in and save it from utter extinction.
.- If the debate on this item may be taken as an indication of what is likely to happen in connexion with the discussion on other items in the schedule, all I can say is that honorable members who are supporting these higher duties present a pitiable spectacle as the defenders of local monopolies. I protest, also, against their tactics in drawing a red herring across the trail by endeavouring to persuade honorable members that the maizegrowers are going to benefit by the imposition of these duties. Notwithstanding that there is already a heavy duty on maize, our importations last year totalled 37,000 tons. An increase in these duties will further strengthen the monopoly and enable the company to continue paying high dividends on its watered stock. It has been urged also that my amendment is a move in the direction of freetrade. Do honorable members realize that this alleged freetrade move represents a duty of £12 a ton ? Why then do they persist with such stupid arguments? Other unfair insinuations have also been made in the course of the dabate as to the reasons which actuate those who have spoken in opposition to the proposed increase in the duties. The suggestion that the maize-growers will benefit is absurd. We have heard the same argument before. On a former occasion we were told that increased duties on strawboard would mean an increased demand for straw. The representatives of manufacturers actually came into the party room, and said that if only they could get an increased duty on strawboard, they would be able to purchase large quantities of the raw material from farmers, and so build up a good industry in Australia. But what happened. Very shortly afterwards, we learned that owing to the cost, they could not supply the local market.With the permission of the committee I should like to amend my amendment to read -
And on and after 13th December, 1927, per cwt. - British, 12s.; intermediate, 12s.; general, 12s.
Nobody can argue that the Maize Products Company is not receiving fair treatment. I hope that the committee will consider the interests of the consumer as well as of the company mentioned.
Amendment, by leave, amended accordingly.
Question - That the amendment as amended be agreed to (Mr. Gregory’s amendment) - put. The committee divided.
Majority . . ..31
Question so resolved in the negative.
Item agreed to.
Motion (by Mr. Bruce) agreed to -
That the House at its rising adjourn until 1 1 o’clock a.m. to-morrow.
Strangers in the Lobbies.
Motion (by Mr. Bruce) proposed -
That the House do now adjourn.
.-I believe that I am voicing the opinion of most honorable members on this side of the chamber when I say that we do not associate ourselves with the extravagant language used by the honorable member for Angas (Mr. Parsons) on Friday last, in discussing the presence of strangers in lobbies, I wish to refer particularly to the attack that he made on one gentleman, to whom he disrespectfully, referred to as the “ bloke with the toothbrush mo.” This gentleman has his living to make as have the rest of us. He is here as representative of the manufacturers of New South Wales, and he does his work, prosecutes his inquiries, and gives assistance to the manufacturers as efficiently as the honorable member for Angas works to obtain a wine bounty or some other benefit for the grape-growers in his district. As the honorable member for Angas is so fond of making Biblical quotations, I remind him that his friend Solomon referred to wine as being a mocker. As the honorable member for Ballarat (Mr. McGrath) said this afternoon, we are indebted to many of these gentlemen, who come here to give information to us. Those interested in tariff matters who are frequenting this House are not . confined to the manufacturers alone. There are as many others who defend low duties, but I shall not refer to them as political touts as the honorable member did. They have every right to be here, and we have a right to respect their presence. I direct the attention of the honorable member for Angas to the Book of Proverbs, chapter 25, verse 11.
Question resolved in the affirmative.
House adjourned at 11.30 p.m.
Cite as: Australia, House of Representatives, Debates, 12 December 1927, viewed 22 October 2017, <http://historichansard.net/hofreps/1927/19271212_reps_10_117/>.