House of Representatives
11 December 1930

12th Parliament · 1st Session



Mr. Speaker (Hon. Norman Makin; took the chair at 2.30 p.m., and offered prayers.

page 1346

QUESTION

SALES TAX

Mr BELL:
DARWIN, TASMANIA

– On the 26th November,I asked a question of the Acting Treasurer regarding the application of the sales tax to bags used as containers of chaff. I again ask the honorable gentleman whether it is true that an interpretation by the Commissioner of Taxation requires the payment of sales tax on such containers, notwithstanding the assurance of the Prime Minister (Mr. Scullin) that containers used for the marketing of primary produce would not be subject to the tax?

Mr LYONS:
Minister for Works and Railways · WILMOT, TASMANIA · ALP

– In reply to a question by the honorable member for Gippsland (Mr. Paterson) I told the House on a previous occasion that I was not aware of any such undertaking given by the Prime Minister. All I know of the matter is that the Commissioner of Taxation has decided that imported bags, used as containers of chaff, are subject to the tax.

page 1346

TUBERCULOSIS

Spahlinger Treatment

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– The Canberra Times of this day publishes the following cablegram from London:-

The report of the committee which lengthily experimented with the Spahlinger vaccine for the immunisation of cattle against tuberculosis was issued at a meeting under the chairmanship of the Aga Khan.

It states that calves show strong resistance to thedisease even after doses of virus sufficient tokill unvaccinated calves within a month.

Will the Minister for Health instruct his department to send for all particulars of the treatment so that the benefits of it may be enjoyed by all breeders of cattle in Australia ?

Mr ANSTEY:
Minister for Health · BOURKE, VICTORIA · ALP

– A cablegram asking for the fullest information hasalready been sent to London. When a reply is received, the information will be made available to honorable members.

page 1347

QUESTION

BARBED WIRE

Mr GREGORY:
SWAN, WESTERN AUSTRALIA

– About three months ago I drew attention to the control of prices by the Iron and Steel Association, and the Acting Minister for Markets and Transport promised to make inquiries and let me have a reply. I have not yet received a reply. Last week I asked a question regarding a newspaper report that barbed wire, which is being sold at £29 15s. a ton retail, is quoted at from £10 to £12 a ton in the country of origin. Is the Minister inquiring into that statement?

Mr FORDE:
Assistant Minister assisting the Minister for Customs · CAPRICORNIA, QUEENSLAND · ALP

– The questions asked by the honorable member are amongst hundreds of matters that are the subject of inquiry. However, I shall consult the officers of the Trade and Customs Department regarding these matters, and, if possible, will let the honorable member have a reply to-morrow.

page 1347

QUESTION

TARIFF

Effect on British Industries.

Mr HAWKER:
WAKEFIELD, SOUTH AUSTRALIA

– Has the Acting Prime Minister seen a cabled report of a statement by the President of the Board of Trade in the British House of Commons that the serious effect of Dominion tariffs upon British Industries had been brought to the notice of delegates to the Imperial Conference? Have the Australian delegates sent to the Government any memorandum regarding the effect on Empire trade of Australia’s prohibitive tariffs.

Mr FENTON:
Minister for Trade and Customs · MARIBYRNONG, VICTORIA · ALP

-I have not received any official communication upon the subject, but I am certain that the Australian delegates were quite able to furnish a satisfactory reply to Mr. Grahame or any other . British Minister regarding the attitude of the Commonwealth Government towards trade with the United Kingdom.

page 1347

QUESTION

TOBACCO PRICES

Mr THOMPSON:
NEW ENGLAND, NEW SOUTH WALES

– Will the Acting Minister for Markets and Transport make a statement to the House, before the present sittings terminate, regarding the exorbitant prices being charged to the smoking public by the tobacco combine. If not, will an opportunity be afforded members who are interested to discuss the matter ?

Mr FORDE:
ALP

– Inquiries are being made into this subject, and I hope to be in a position to make a statement on it tomorrow.

page 1347

QUESTION

PAPER PULP

Mr BELL:

– Will the Acting Prime Minister make a statement bofore the House adjourns over the Christmas holidays regarding what steps, if any, the Government proposes to take to assist the establishment of the paper pulp industry ? This is a matter of great interest to the people of Tasmania, and they are anxious to know what the Government proposes to do.

Mr FENTON:
ALP

– Conferences have taken place and others are to follow with a view to reaching an agreement for the establishment of the paper pulp industry in Tasmania. If the negotiations are successful, the Government’ will take action to assist the founding of the industry.

page 1347

QUESTION

REPATRIATION

Medical Treatment

Mr LONG:
LANG, NEW SOUTH WALES

– Last week-end a returned soldier, with his head bound, and badly in need of medical attention, called at my home and asked for a letter to the Military Hospital at Randwick. I furnished a letter to him, and I have since received a communication from him stating that at the hospital he interviewed the second officer in charge, who sent him to the Repatriation Department. There he was required to fill in a form, and was told that his case would receive consideration later. This soldier tells me that since he returned to Australia in 1917 he has received no benefits from the Repatriation Department, and has never been treated at Randwick Hospital. Will the Minister in charge of Repatriation enquire into this case with a view to ensuring that justice is done?

Mr ANSTEY:
ALP

– Under the existing law, only those returned soldiers who happen to be pensioners are entitled to the benefit of hospital treatment.

page 1347

QUESTION

DURATION OF SESSION

Mr ARCHDALE PARKHILL:
WARRINGAH, NEW SOUTH WALES

-In view of the statement of the Leader of the Government in the Senate, that Parliament would, probably, rise to-morrow, will the Acting Prime Minister state what business he requires this House to do before its rising, and whether Parliament will rise to-morrow, or next week, or the week after, or next year?

Mr.FENTON.- As I intimated previously, the date upon which Parliament rises for the Christmas vacation will depend largely upon the expedition displayed by honorable members in dealing with the business we have to do. I am not certain that the Leader of tha Government in the Senate made his announcement as to the rising of Parliament in the definite terms stated by the honorable member.

Mr Archdale Parkhill:

– The statement was made, and is reported in H ansard.

Mr FENTON:
ALP

– I have had an opportunity of hearing the Leader of the Government in the Senate express his opinion as to what was said, and it does not accord with the construction placed upon his statement by the honorable member forWarringah (Mr. Parkhill). Notice has been given to-day of fresh business, and it is possible that still other business may be announced later. I do not think that the House will rise to-morrow.

page 1348

QUESTION

COMMONWEALTH REDEMPTION LOAN

Mr GREGORY:

– Has the attention of the Acting Treasurer been drawn to a letter published in the Sydney Morning Herald of to-day, stating that, whereas Victoria had subscribed £6,000,000 to the conversion loan up to the present, New South Wales had subscribed only £3,000,000, and that no member of the Government of New South Wales had done anything to assist the successful flotation of the loan? Will the Acting Treasurer use his influence to secure the co-operation of the New South Wales Government towards making the loan a success ?

Mr LYONS:
ALP

– I have not seen the letter mentioned by the honorable member, but I know that if every part of Australia had done as well as Victoria, we should now have very nearly the required amount. I am hopeful, however, that New South Wales and the other States will do their share before the loan closes on the15th December. New South Wales was’ slower to start, but it has begun now, and I am hopeful that its response will be all that can be desired.

page 1348

QUESTION

LABOUR PARTY MEETING

Newspaper Reports

Mr GABB:
ANGAS, SOUTH AUSTRALIA

– Has the attention of the Acting Prime Minister been drawn to a report in the Labor Daily of a meeting of the Labour party, held in Canberra yesterday morning? The report carries the headings - “ Lyons wants to Jettison Federal Labour - Proposes Coalition Government “. In view of the untruthfulness of those statements, will the Acting Prime Minister take steps to exclude the representative of the Labor Daily from the press galleries of this House until such time as the names of the allegedly “ amazed Labour parliamentarians “ are disclosed ?

Mr FENTON:
ALP

– I understand that it is the intention of some of those whose names have been mentioned in the report complained of to make a statement to the House on this matter. Whether a penalty is inflicted upon the writer of the report, or on the newspaper in which it was published, or not, I desire to place it on record that the statements contained in the report are absolutely false.

Mr LYONS:
ALP

– By way of personal explanation, I desire to make a statement on the subject raised by the honorable member for Angas (Mr. Gabb). In to-day’s issue of the Labor Daily, and in at least one other newspaper - The Canberra Times - there appears what purports to be a report of proceedings which took place at a meeting of the Federal Labour party in Canberra yesterday. The report is in these terms -

page 1348

LYONS WANTS TO JETTISON FEDERAL LABOUR

Proposes Coalition Government?

page 1348

CAUCUS HOWLS LYONS DOWN

sensational development in federal situation.

Angry Party Meeting

Sinister Move. (From Our Federal Representative.)

Canberra, Wednesday

The most sensational event in the history of the Scullin Government took place in caucus to-day, when Mr. Lyons, Acting Treasurer, is said to have definitely proposed a national coalition government to replace the existing Labour Government, and take charge of the present situation in Australia.

Reviving memories of the 1916 conscription split, when Mr. V. M. Hughes smashed the Federal Labour party and formed his national war ministry, drawing his personnel from both sides of the House, Mr. ‘Lyons told caucus that the time had arrived for a similar expedient.

The Acting Treasurer suggested, amazed Labour parliamentarians reported, that Mr. Latham and Dr. Earle Page should be called in to form u composite government with Labour.

Mr. Lyons’ proposition followed so closely mi Mr. Latham’s suggestion in the House yesterday, that many Labour members see a sinister connexion, and are asking whether Mr. Lyons had fore-knowledge of Mr. Latham’s move.

The report later makes the suggestion that I had some knowledge beforehand of the proposal of the Leader of the Opposition. The statements from beginning to end can only be described as a downright lie; absolutely and emphatically a lie. I used the word “ coalition “ only once during the discussion of the subject in caucus, and that was to make it plain that the Leader of the Opposition (Mr. Latham) did not propose or ask for a Coalition Government. I had no more knowledge of the honorable gentleman’s proposal than any other honorable member of the House.

Mr LYONS:
ALP

– When the Leader of the Opposition notified the Acting Prime Minister of his intention to take this action in the House, the Acting Prime Minister was busily engaged as chairman of the party meeting, and he asked me to see Mr. Latham officially with the object of discussing, not the proposal, but the best method of dealing with it in the House. That is the only matter that was discussed, and my conversation with the Leader of the Opposition on the subject was held officially on behalf of the Acting Prime Minister. I directly and absolutely deny any fore-knowledge of the intention of the Leader of the Opposition to make his suggestion.

I do not hold the press or the reporters responsible for the publication of this report. The information was apparently supplied to the reporters, and they were entitled to use it in the belief that it was truthful. I know that this information was supplied, because last night several representatives of the press told me so.

It was made available, not only to . the Labor Daily and the Canberra Times, but to. every important daily newspaper in Australia.

Mr Gregory:

– There must be treachery within the party.

Mr LYONS:

– It would not bc fair to blame the reporters for using this information. All I ask is that the press will accept this complete denial of the* truth of the report. If any member on this side of the House who hears me make this statement thinks that it is not true, I ask him to stand up in his place now and say so. .

Mr Lacey:

– The whole report is incorrect.

Mr LYONS:

– The motives which led to the giving of this incorrect, misleading and untruthful report can only be conjectured.

Mr Gabb:

– Someone wants your job.

Mr LYONS:

– I leave the matter to the judgment of the public. The whole story is a lie from beginning to end.

Mr LATHAM:

– I desire to make a personal explanation on this subject. Later, in the report from which the Acting Treasurer (Mr. Lyons) has quoted, this paragraph appears -

It is understood that Mr. Latham’s suggestion was put forward yesterday with the full knowledge that it would receive favorable consideration from the Government.

I give that statement a full and an unqualified denial. I had no knowledge of how my proposal would be received by the Government, or by any member of it. No member of the Government had any knowledge of my proposal until it was actually made. As a matter of fact, it was only considered at a meeting of the Nationalist party on Tuesday morning, and no member of the party,, with one exception, was aware before the meeting that I intended to make it. At 12.40 p.m. I wrote a letter to the Acting Prime Minister informing him of the terms of the motion that I proposed to move. That is all that he knew of it. I agree entirely with what the Acting Treasurer has said as to what occurred between us. I said that I thought it would be a proper procedure if, after I had spoken, the Acting Prime Minister secured the adjournment of - the debate. That is all that occurred between me and any mem- ber of the Government. No member of the Government knew what I intended to propose, although in accordance with the ordinary courtesy of the House, which I hope will long be maintained, I informed the Acting Prime Minister, as I have said, of the terms of the motion I intended to move. I ask honorable members to believe, as I am sure they will do, that the proposal which I made on Tuesday last was made in all sincerity, and without any pre-arrangement whatever.

page 1350

QUESTION

SALES TAX

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

asked the Acting Treasurer, upon notice -

  1. How many separate bills have been introduced into this House in connexion with the sales tax?
  2. How many amending bills regarding the sales tax have been introduced?
  3. Is the tax supposed to impose 2½ per cent.; if not, what is the charge?
  4. Is there any penal clause inserted in the acts or their amending bills to punish any one who charges over 2½ per cent.?
  5. If so, to whom would the citizen who has been overcharged apply for justice?
Mr LYONS:
ALP

– The answers to the honorable member’s questions are as follow : -

  1. Eighteen; consisting of nine machinery acts and nine rates acts.
  2. Ten; consisting of nine bills to amend the nine machinery acts, and one bill to amend the rates act No. 1.
  3. The rate of soles tax is 2½ per cent.
  4. No. The Commonwealth has no power to legislate in that direction, any more than it cun legislate similarly in regard to customs duties.
  5. To the vendor of the goods purchased.

page 1350

QUESTION

CAPTAIN T. P. CONWAY

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

asked the Minister for Defence, upon notice -

  1. Why was the appointment of Captain T. P. Conway, as D.A.A.G., in the Australian Imperial Force, cancelled?
  2. Is it a fact that a Royal Commission on Defence Administration reported that the transfer of Captain Conway from the position of D.A.A.G. was not in the best interests of the service?
  3. As Captain Conway was mentioned in orders for specially meritorious service during the war, and other officers were given accelerated promotion for similar service, why was the promotion of Captain Conway prevented, and officers who had not given specially meritorious service promoted above him?
Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– The answers to the honorable member’s questions are as follow : -

  1. Special temporary appointments of officers of the Permanent and Citizen Forces for duty in Australia, during the war, were made from time to time, and such appointments were terminated when the necessity for them no longer existed. Captain Conway’s temporary appointment as D.A.A.G. (Australian Imperial Force) in New South Wales was terminated on his transfer to, Queensland. 2. The information is not at present available, but will be supplied when obtained.
  2. For special meritorious service in Australia, during the war, a number of officers were in 1917 promoted to honorary and brevet rank only, and a number of others received a mention. Captain Conwaywas among those who received a mention. Captain Conway received no further promotion in his corps, as he did not qualify by examination and had no war service. He was accordingly superseded by the promotion of officers who were qualified and had served on active service.

page 1350

QUESTION

CANNING INDUSTRY

BoxShooks - Tin Plate.

Mr FENTON:
ALP

– On the 28th November, the honorable member for Echua (Mr. Hill) asked me the following questions, upon notice -

  1. What was the revenue, “ actual or estimated,” derived from the duty on box shooks used in the jam and canning industry for local consumption for the years 1928-29 and 1929-30, respectively?
  2. What was the revenue, “ actual or estimated,” derived from the duty on tin plates used in the jam and canning industry for the years1 928-29 and 1929-30, respectively?
  3. What is the estimated revenue to be derived from the primage tax on box shooks and tin plate used in the jam and canning industry for the season 1930-31?
  4. What is the estimated revenue from the sales tax on jam and canned fruits for the year ending the 30th June, 1931?

A reply was furnished by me in regard to No. 4. I am now in a position to furnish the following reply in regard to parts Nos. 1, 2, and 3: -

  1. The actual revenue derived from duty on timber cut to size for box-making during the period mentioned is set out hereunder, but no information is available in the Department of Trade and Customs as to the proportion used in thejam and canning industry: -
  1. The actual revenue derived from tinned plates imported during the period mentioned is shown hereunder, but no information is available as to the proportion used in the jam and canning industry: -
  1. Based on the value of importation of the items mentioned during the year 1929-30, the total primage duty would be as follows: -

but no information is available as to the proportion to be allocated to the timber and plate usedin the jam and canning industry.

page 1351

PAPERS

The following papers were presented : -

Central Australia - Report by the Government Resident for year ended 30th June, 1930.

Norfolk Island - Report for year ended 30th June, 1930.

page 1351

NATIONAL DEBT SINKING FUND BILL

Bill returned from the Senate without amendment.

SALES TAX BILL (No.1a), 1930.

Bill returned from the Senate without requests.

page 1351

GOLD BOUNTY BILL

Message recommending appropriation reported.

In committee (Consideration of Acting Governor-General’s message) :

Motion (by Mr. Forde) agreed to -

That it is expedient that an appropriation of revenue be ‘made for the purposes of a bill for an act to provide for the payment of a bounty on ; the production of gold and for other purposes.

Resolution reported, and - by leave - adopted.

page 1351

PORT AUGUSTA TO RED HILL RAILWAY

Message recommending appropriation, reported.’

In committee (Consideration of Acting Governor-General’s message) :

Motion (by Mr. Forde) proposed -

That it is expedient that an appropriation of revenue and moneys be made for the purposes of a bill or an act to provide for the. extension of the Trans-Australian railway by the construction of a railway from Port Augusta to Red Hill in’ the State of South Australia.

Mr LATHAM:
Kooyong

.- Up to the present time the Government has given.no indication as to where the money for this work is to be obtained. Various statements on the subject have appeared in the press : one of these is to the effect that the line is to be paid for by means of Commonwealth bonds; another, that a private firm of contractors will construct the line, and finance the work in some manner. The committee is entitled to know before passing this motion where the money is to come from, and how much of it is to be spent in the current year. Estimates have been put before the House, but I doubt whether anybody believes that the expenditure and revenue will balance at the end of the year. We have been informed that the proposed railway will involve an expenditure of £735,000, of which, in any event, only a portion would be spent this year if construction began at an early date. We are entitled to a definite statement on this subject, more particularly because this proposal has been brought forward as a contribution to the solution of the problem of unemployment. It is not fair to the people of the Commonwealth to submit a proposal for the construction of a railway, with an assurance that some assistance will be given in the solution of the unemployment problem, unless a clear indication is given as tohow much money is to be spent, how soon it will be spent, and from what source it will be derived.

Dr EARLE PAGE:
Cowper

.- I also wish to know what procedure is to be adopted in connexion with this appropriation. The total amount of the Commonwealth loan expenditure is determined by the Loan Council. TheGovernment has already brought down proposals which absorb the whole of the amount already allotted to the Commonwealth by the Loan Council ; in fact,all the loan money necessary to provide for the present commitments of the Government has not yet been provided for, and there seems tobe little chance of this money being raised in Australia under existing conditions. Many ordinary works associated with the Postmaster-General’s Department which are indispensable to the well-being of the people in the country are being delayed or put completely aside by reason of the fact that no money at all is available to pay for them. I urge the Government to say exactly where this new gold mine that it is tapping is situated, and to give an assurance that the passing of this motion will not cause a greater curtailment of the facilities that are indispensable to the people outback as well as to those living in the city areas.

Mr FORDE:
Acting Minister for Markets and Transport · Capricornia · ALP

– The estimated expenditure on the Port Augusta to Red Hill railway for the current year is approximately £20,000.

Dr Earle Page:

– What contribution will that be to the solution of the unemployment problem?

Mr FORDE:

– There is no magic way to finance this railway; funds will be provided in the usual way.

Mr Gullett:

– What is the usual way?

Dr Earle Page:

– Does the Minister suggest that it will be financed under next year’s programme?

Mr FORDE:

– The Loan Council will be consulted in due course in the customary way as to the loan allotment necessary in the next financial year. This railway is not a new proposal. Honorable members opposite speak as though it had originated in the last 24 hours; but the last Nationalist Government, in 1927, brought down a bill for its construction, which is the second step towards carrying out the scheme for the unification of the railway gauges of Australia. The proposal has been on the stocks for a considerable time. The expenditure for the present financial year will ‘be only approximately £20,000, and the members of the Loan Council will be consulted in due course in regard to the commitments.

Mr BAYLEY:
Oxley

.- I hope that the committee will not agree to the motion. If an amount be appropriated the money voted can be used for no other purpose than the construction of the proposed line. I take it that no honorable member is of opinion that this work will be proceeded with, and therefore, if the motion be agreed to, the money will be earmarked, put on one side, and not used.

Mr Forde:

– The honorable member has been long enough in politics to know that that statement is absurd.

Mr BAYLEY:

– If the money is set aside for a specific object it can be used for no other purpose.

Question resolved in the affirmative.

Resolution reported, and - by leave - adopted.

page 1352

GOLD BOUNTY BILL

Second Reading

Debate resumed from the10th December(vide page 1277), on motion by Mr. Forde -

That the hill be now read a second time.

Mr JONES:
Indi

.- I feel that no apology is needed for my support df this bill. Assistance to an industry to which Australia owes much is long overdue. One reads in the Year-Book that the news of the discovery of the precious metal in1830, and in the following year, brought aconstant stream of migration to Australia,and caused an increase in the population from 405,000, at the end of1850, to 1,146,000 in I860. The industry has produced in Australia gold to the value of £630,000,000, of which over £300,000,000 has been won in Victoria. That something has to be done to save the industry from disaster is shown by a glance at the figures published in the Year-Book. In 1901, no less than 70,972 persons were employed in the industry; but in 1927 the number had dwindled to 6,250, and each year since then the number of persons employed has gradually decreased. Are we now going to allow the goose that baa laid a golden egg’ worth £630,000,000 to die prematurely through lack of sustenance? Other industries that have been given support are of less value to this country than the gold-mining industry. In 1924 the total value of our gold production was £3,143,830, and in 1929 it had decreased to £1,814,457.

Mr Maxwell:

– What was the cost of that production?

Mr JONES:

– I have not those figures. The gold-mining industry in Australia was started by the old pioneers, men who had an adventurous spirit, and wereeager to, and did, take risks and endure hardships. Their courage was indomitable, their energy boundless, and their perseverence unyielding. I can show honorable members hills and mountains in Gippsland, into which shafts were sunk hundreds of feet deep, tunnels were driven, and round the steep sides of which for miles races were cut, by these pioneers. That work will stand for all time as a monument to the herculean efforts of these men. They were great men, and wo are deeply indebted to them. The inducement to take part in sport was not so great in those days as it is at the present time, and there was greater concentration on hard work. Who wij.1 say that there is not still gold in those hills and mountains? Our geological experts, to whom we should look for guidance, maintain that there is more in the earth than has been taken out.

Mr Maxwell:

– If we had that type of . man to-day, it would be found.

Mr JONES:

– There are still a few of them left who are prepared to search for it if they are given a little encouragement. It is hoped that this bill will provide the encouragement. Gold is a commodity that is very much needed at the present time - none more so. I believe that, during the last twelve months, gold to the value of £27,000,000 was sent out of Australia to help this country out of a difficult financial position. Greater production would swell deposits in the banks, and that would lead to an extension of credits and a rise in prices. The export of gold from Australia can result only in a restriction of credits and the decline of prices.

Some honorable members opposite have chided the Government upon having changed its ground in connexion with this matter. They have pointed out that representations were made to the Prime Minister (Mr. Scullin) by a deputation before his departure to Great Britain, and that he declined to accept the proposal submitted to him. The honorable member for Warringah (Mr. Archdale Parkhill) lashed himself into a white fury; he referred to “ dirty work at the cross roads,” and said that probably a Labour leader would not in future leave Australia. The proposal put before the Prime Minister was altogether different from that which we are now considering.’ I have a vivid recollection of a change of face by the last

Government on more than one occasion; therefore, any chiding of this Government by honorable members opposite comes with very bad grace. The Prime Minister was asked to agree to the payment of £1 an ounce on all gold produced. This bill proposes the payment of a bounty of £1 an ounce on production in excess of the average for the last three years. The Prime Minister informed the deputation that its proposal would cost the Government immediately approximately £437,000 and there would be no guarantee that an additional ounce would be produced. Under this measure;, the bounty will not be paid unless the proportion exceeds the average of the years 1928, 1929 and 1930.

The Leader of the Opposition (Mr. Latham) last night sought information as to the meaning of the statement in the application for registration, that the applicant undertakes to extract all goldbearing ore, the value of which when worked independently and with the aid of efficient machinery and suitable equipment will meet working ex;penses. His puzzlement was caused by the use of the term “ in. dependently “. If honorable members will study mining reports’ they will find that the yield from some stopes or faces is regarded as being “fair”; in other cases it is “ payable “ ; arid in some cases “ highly payable Where there, is stone which, if worked by itself, would not pay working expenses only, an undertaking will have to be given that it will be worked in conjunction with the rich ore. Companies invariably have to handle ores of different quality. The practice is to take a certain tonnage from the face that is just payable, and add to it a small quantity from the rich stope. Thus the. yield is averaged from month to month. An alternative method is to concentrate on the rich stope to the exclusion of that which is just’ payable. That practice is designated “ picking the eyes’ out of a mine”, and the object of this provision in the application for registration is to prevent it from being followed.

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– Why should the Government be concerned regarding the methods adopted to extract the ore? This provision will cripple small shows.

Mr JONES:

– The bill is designed to assist the development of low grade propositions. This provision will ensure the working of payable ore.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– The object is to prevent big companies from taking out only the best ore.

Mr JONES:

– The majority of mining companies in the past have kept what is called a reserve bank. The practice has been to keep a certain reserve of amalgam in the safe, and by its use to average the yield from month to month.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– Sweeten it up.

Mr JONES:

– There comes a time in the life of every mine when it seems about played out.Without acquainting the shareholders of their intention, unscrupulous directors may put the whole of the reserve into the battery and report a phenomenal yield, with the result that the value of the shares rises and the directors quit their holdings, leaving the poor, innocent investors out in the cold. That’ is one of the factors which has crippled mining in the past. I believe that this provision should be allowed to remain in the schedule, because by its application the life of a mine will be lengthened.

Reference has been made to the Mount Morgan gold mine. There are still millions of pounds worth of gold in that mine, and, probably, the assistance which this measure proposes to make available will place the extraction of it on a payable basis.

Mr Maxwell:

– Under this bill, might not a mine considerably increase its production and. yet receive no bounty if the total yield of the Commonwealth does not reach the average?

Mr JONES:

– The average production of Australia during the last three years -1928, 1929 and 1930 - will be taken as the basis of the gold bounty. The average, I believe, is about 486,000 oz. If the gold yield for 1931 does not reach 486,000 oz., no bounty will be paid at all, but if the yield is 586,000 oz. there will be anexcess of 100,000 oz. over the average production for the three years mentioned. That will mean a payment of £1 an ounce on the excess production, or, in other words, £100,000 will be the amount of the bounty, and that sum will be distributed over the whole gold production, so that the bounty paid will not amount to£1 an ounce on thetotal gold production. If the production increases, from year to year, so, accordingly, will the bounty increase. The honorable member for Warringah (Mr. Parkhill), when speaking last night, pointed out a supposed difficulty in respect of the bill. He referred to sub-clause a of clause 8, which reads -

From the total amount of the bounty there shall be deducted and paid to the Consolidated Revenue Fund -

The sum which bears to the total amount of the bounty in that year the same proportion as the amount of gold produced during that year by any gold-producer who was not at the time of the production a registered gold-producer, bears to the total amount of gold produced during that year.

The honorable member for Warringah regretted that the Minister did not explain that provision. I contend that there is nothing in it to be explained. It is couched in simple language, andshould be understandable by any one. The bounty will be paid only to those who are registered gold-producers. Let us suppose that the honorable member for Warringah were himself an unregistered gold-producer, and he produced, say, 12,000 oz. of gold in a year. If the average gold production for the three years- 1928, 1929 and 1930- were 500,000 oz., and in 1931 the production were 600,000 oz., that would be 100,000 oz., in excess of the average yield, and, therefore, the amount of the bounty to be paid would be £100,000. If the honorable member produced, in 1931, 12,000 oz., the amount tobe deducted from the bounty and to be paid back into Consolidated Revenue would bear the same proportion to the total amount to be paid as his production bore to the total production that year. The proportion of the honorable member’s production to the total production would be one-fiftieth, and one-fiftieth of the bounty paid on the excess production -£100,000 - would be £2,000. Therefore, the honorable member, not being a registered gold-producer, would lose a. bounty of £2,000, which amount would be paid back into Consolidated Revenue.

The policy of Australia is protection. The Labour party stands forprotection. The honorable member for Warringah spoke of the cruel and merciless taxation levied on the community. I would remind him that the gold-mining industry, for many years, has been bearing the burden of the cruel and merciless taxation of which the honorable member speaks. The community is doing nothing to help this industry. I have with me official figures showing the extent of the Government assistance to the gold-mining industry. Take Western Australia. The total gold production of that State to the 31st December, 1929, was 37,887,446 fine oz., valued at £160,935,645. Of that production, the East Coolgardie district, including the Golden Mile; produced 20,681,712 fine oz. valued at £87,850,328. I shall now show how much government assistance the industry received in Western Australia.

Mr Bayley:

– Why should an industry receive government assistance?

Mr JONES:

– Why did the previous Government, which the honorable member supported, give a bounty to numerous industries, but not to the goldmining industry? I should like to hear the honorable member justify the payment of a bounty in respect of some industries and not in respect of the goldmining industry.

Mr Bayley:

– What bounty have I justified?

Mr JONES:

– The bounty on sugar.

Mr Bayley:

– There is no bounty on sugar.

Mr JONES:

– It has been said that the main objection to the gold bounty is that it is economically unsound to pay £5 an ounce for a commodity which will bring only £4 an ounce. If that is so, how much more was it economically unsound to pay 4d. a lb. for Queensland sugar when Java sugar could be obtained at1d. a lb. In any case, the sugar industry is not likely to employ so many men as the gold-mining industry. In 1857, the gold-mining industry employed 147,000 men.

Mr Martens:

– That was years ago.

Mr JONES:

– There is no reason why we should not again employ 147,000 men in the industry.

Mr Bernard Corser:

– They are not employed now.

Mr JONES:

– Because the industry has been allowedto decline. Our desire is to resuscitate it. In 1929, the valueof the total production of gold in

Western Australia was £160,935,645. The following figures show the amount of assistance that the industry has received : -

Of that sum £119,000 was repaid to thedepartment, leaving the net amount of government assistance from 1903 to 1929 te an industry which has produced £160,000,000 worth of gold, only £813,020. Has the industry been given a fair chance?

Mr Bell:

– As it was extraordinarily prosperous, why did it need assistance?

Mr JONES:

– The cost of production has increased considerably since the greater portion of that wealth was won..

Mr Bayley:

– Get rid of the increase..

Mr JONES:

– Presumably the honorable member means that wages should be reduced. I shall quote later the views of some of his friends. In Victoria government assistance to the industry was even less. The value of gold produced in that State was £302,000,000, and the total amount of government assistance was £313,000. In the light of those figures there is every justification for paying a bounty to an industry which has been the Cinderella of primary industries.

Mr Maxwell:

– Cinderella came out all right.

Mr JONES:

– I believe that the mining industry will, too. One argument advanced in favour of this bill is that the bounty will relieve unemployment. I am confident that it will. I know of many creek beds in my own electorate where men who understand alluvial working can easily earn a living with always the possibility of finding nuggets. It is much preferable that miners should be taken into the mountain gullies, under a responsible and reliable leader, and there with a few tools and sluice boxes earn their own livelihood, than that they should remain idle in the, camps of’ the unemployed. I know of river flats overgrown with bracken fern where men could ‘be settled on blocks of 5 or 6 acres and with a few cows, pigs and fowls, and a vegetable patch maintain themselves and their families.

Mr Bell:

– That is not gold-mining.

Mr JONES:

– No; that proposal was put forward by my namesake, the Minister for Works in the Victorian Ministry, and it is on all fours with what I am suggesting in regard to the mining industry. Amongst the unemployed in the cities are hundreds of miners who have been driven out of their mountain haunts because gold-mining has languished. In the mountainous areas where gold-mining was formerly carried on, no other industry is possible; when mining ceases these districts become depopulated. Who has not heard of the Long Tunnel Mine at Walhalla? I remember that it was a rich producer even when I went to school - and I am not a young man. It produced 815,569 ounces of gold, and paid in dividends £1,283,400. The Long Tunnel Extended yielded 440,312 ounces and paid in dividends £788,640. The Loch Lyne, at Matlock, produced 304,056 ounces, and dividends amounting to £109,700.

Mr Bell:

– All those mines have closed down.

Mr JONES:

– Gold is still there; so are the old homes of the miners, and, recently I saw where wombats had been burrowing under the floors. Those homes are available for the miners if we can restore them to their industry. One benefit of this bounty will be the impetus it will give to decentralization. Former miners will be attracted from the cities to their old haunts, where they will be able to earn an honest living.

We have been told that it is economically unsound to grant a bounty to goldmining, paying £5 for a commodity that is worth only £4. Last year a conference of those interested in mining was convened by the Victorian Chamber of Mines. The Minister for Mines, the Secretary for Mines, and the representatives of the principal mining districts of the State attended. Amongst others present, were a professor of metallurgy at Melbourne Universityand Professor Giblin. The latter is a noted economist, and, in reply to a question I asked, he admitted that a bounty on gold produc tion was economically unsound, but so, he said, were all bounties paid to primary industries. I asked him if a gold bounty would be more economically unsound than a bounty to other primary industries, and he answered, “No “. The former Premier of Western Australia, Mr. Collier, had stated that a bounty on gold production would be the least uneconomic of the many uneconomic bounties. The bounty granted in respect of the galvanized iron industry is equal to a grant of one ounce of gold a week to each of the 900 men employed.

Is the gold-mining industry worth reviving? Some contend that for humanitarian reasons we would be wise to allow it to die. They have in mind particularly thelegacy of miners’ phthisis. I admit that the country is paying a big price to maintain the victims of this disease, but I remind the House that the conditions 40 or 50 years ago were vastly different from those which obtain in mines to-day. Science has made great advances, not only in the implements of mining, but also in underground hygiene, and there is no reason whya gold mine to-day, especially a shallow one, should not be as healthy as a modern railway tube. The first seven years of my working life were spent in mines, and I have seen men “rising” through solid rock, and covered with fine dust, which suggested that they might have come from a flour-mill. Such conditions were bound to affect the health of the men, and if one reads the old tombstones in the cemeteries of mining districts he will rarely see the name of a miner who lived beyond 50 years. It is safe to say that mining conditions 40 years ago took ten years off the lives of men engaged in the industry. Such conditions, however, do not prevail to-day’ and any objection on health grounds to the revival of the industry can be substantially discounted.

Mr Mackay:

– The gold won in Australia cost more than it was worth.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– That statement has been often made, but it is not correct.

Mr JONES:

– I know of many mines which, in my youth, were regarded as down and out, but were resuscitated, and, for a time, paid handsomely. One which was in full operation before I wasborn is still being profitably worked on tribute.

Mr Maxwell:

– Without a bounty!

Mr JONES:

– Yes. The Leader of the Opposition spoke of the need for reducing the cost of production. Certainly costs should be reduced, but not at the expense of wages. When I asked the honorable member for Warringah (Mr. Parkhill) last night if he was urging a reduction of wages, he indignantly denied it and said that he was tired of hearing that imputation made at every meeting and on every street corner. The Deputy Leader of the Opposition (Mr. Gullett) also urged a reduction of the cost of production, and said that all persons engaged in the mining industry were not in favour of this proposal for a bounty. He may have had in mind Mr. Richard Hamilton, who for many years was President of the Kalgoorlie Chamber of Mines. When T w,as in Western Australia in 1912-13, Mr. Hamilton was manager of the Great Boulder Mine, at a yearly salary of about £3,500. Recently, that gentleman stated -

If, in 1914, our primary industries were making profits with prices as low as those of to-day, it is clear that we should get back to 1914 conditions. This is not an insuperable difficulty Wages are the main factor in the cost of living and of production, and it is impossible to get back to 1014 conditions unless payments for all kinds of work are reduced. When 1914 conditions arc reached the deflated wage will purchase just as much as the inflated wage of to-day, and the workers as a whole will receive more money because there will be more employment. Gold-mines could then treat 0 dwt. to 8 dwt. ore profitably, and the prosperity of the industry would be restored. Reductions of wages should be simultaneous in all the States to make them quickly effective in reducing living costs.

That man came out into the open; he made no secret of how he would reduce the cost of production. There are many who say that the cost of production must come down, but they have not the courage to come straight out and say how they would bring it about.

Mr Killen:

Mr. Hamilton does not say that effective wages should come down.

Mr JONES:

– When, as a youth, I worked in a mine, I received 8s. 4d. a shift of eight hours. Since then, 1 believe wages have practically doubled.

Mr Culley:

– No, they have not. They are still less than 16s. a day.

Mr JONES:

– Does any honorable member opposite suggest that a man should be required to go down into the bowels of the earth, and work eight hours a day for 8s. 4d. ?

Mr Killen:

– Many working men say that they would be better off if we could get back to 1914 prices for everything, including labour.

Mr JONES:

– I have here a copy of the Argus, in which is a leading article dealing with the proposed gold bounty. It states: -

Wealth cannot come to a community for the production of anything - whether it be sugar, wheat, fruit, butter, or gold - if the cost of the production of the commodity is greater that its value in the market.

If it is unsound to pay a bounty on the production of gold, it is equally unsound to pay bounties on the production of other commodities as we have been doing.

Mr Bayley:

– That’s right; cut them all out.

Mr JONES:

– Yet the honorable member for many years supported a Government which was responsible for granting many bounties. Did the honorable member vote against the proposals for granting the iron and steel bounty, the wine bounty, and the cotton bounty?

Mr Bayley:

– I did not favour granting those bounties.

Mr JONES:

– Has the honorable member for Oxley (Mr. Bayley) ever supported the paying of a bounty to any primary industry? I pause for a reply, and, none being forthcoming, I presume that he has. The Argus article continues : -

A bonus on the production of gold has other terrors. If a new and large gold-field were discovered, accidentally or because of the bonus, it might become a terrible handicap to Australia instead of a rich blessing.

It is hard to understand how the discovery of a rich gold-field in Australia could become a handicap. The more gold we get, the more deposits we shall have in our banks, the more credit can be given, and the higher will prices rise. The gold production for the whole of the Commonwealth last year was only £2,000,000; yet this year we have exported £27,000,000 worth of gold to meet commitments overseas. This represents over ten times our annual gold production. The result is that credits have been restricted, and prices have fallen.

Mr Killen:

– We ought to replace that gold, and put a lot more with it.

Mr JONES:

– Of course we should. This gold bounty will be one of the best bounty investments the Commonwealth has ever made. One writer dealing with this subject said that if only we could strike amountain of gold in Australia, we should be able to pay off the whole of our national debt without difficulty.

Mr Yates:

– In fact, we should all have gold teeth.

Mr JONES:

– The honorable member is inferring, no doubt, that we cannot eat gold, or wear it, or build houses with it. I. admit that, but if we have gold we shall have no difficulty in buying what we desire to eat or wear, and in gettingsomebody to build our houses , for us.. The honorable member says that gold is not real wealth, butI would accept it as real wealth. If I have gold I can get anything else I want. Ifthisgoldbounty, will enable us to get thegoldwe need, I commend the measure tothefavorable consideration of honorable members. We have granted bounties to otherindustries, and within a short time there has been over-production, and markets have become glutted. I do not believethat there is any danger of overproduction of gold in Australia. There will always be a market for gold, and gold will always bring its price. Moreover, gold, will not deteriorate ; it will not rot, as fruit does on the trees.

Honorable members opposite have asked,”Where is the money to come from with which to pay the bounty?” Some time ago I was informed, in answer to a question asked in this House, that the last Government had, between 1922 and 1929, paid £1,500,000 in fares to bring migrants to Australia.

Mr Bayley:

– Our migrants are worth more to us than gold mines.

Mr JONES:

– This money was spent, notwithstanding that thousands of our own people were out of work. Was that economically sound? Moreover, the Government was flooding the country with foreigners.

Mr SPEAKER (Hon Norman Makin:
HINDMARSH, SOUTH AUSTRALIA

– I presume that the honorable member is dealing with the gold bounty bill.

Mr JONES:

– I am trying to show that the stage was set by the last Govern ment for a return to 1914 living conditions. In the end the last Government attempted to abolish the Arbitration Court.

Mr SPEAKER:

– The honorable member is not in order in pursuing that line of discussion.

Mr JONES:

– I believe that when honorable members opposite speak of the need for reducing working costs, they have in mind little else than the desirability of reducing wages. Having secured a large army of unemployed, they set about to abolish the Arbitration Court, and had they succeeded in that wages would have come tumbling down with a rush. They would then have proved their economic theories to their own satisfaction, and could have written, as used to written at the end of the old propositions in Euclid, quod erat demonstrandum.

If we can revive the gold-mining industry in Australia, employment will be found for many more people, not only in the industry itself, but in other industries more or less associated with it, such as the iron and steel industry, the timber industry, &c. The honorable member for Echuca (Mr. Hill) said that there was enough mining machinery in different parts of Australia to cope with any possible revival in mining. . I remind him, however, that most of this machinery is obsolete and fit only for the scrap heap. What we want is modern machinery, up-to-date equipment, and up-to-date methods. There is everything to be said in favour of a gold bounty, and very little to be said against it. Some honorable members opposite have repeated the parrot cry that such a bounty would be economically unsound; but it has the support of professors of economics, and I preferto accept their opinion to that of any honorable member of this House. I believe in going to experts for advice. If I wished to know something about the prospects of a mine, I would consult a geologist. Years ago, I wanted to buy a horse, and I paid a man a guinea to try out a dozen for me, and pick the best. On his advice I bought a horse, used it for three or four years, and then sold it for a few more pounds than I paid for it. Those who believe they know a great d§al about- everything, generally know very little about anything, and that may be applied to the opinions of some honorable members on the gold bounty proposal. .Seeing that no sound argument has been advanced against the ‘bill, honorable members should vote for it. We believe that it will stimulate the gold industry, develop our secondary industries, and increase the prosperity of the country. Gold has been of wonderful value to Australia. If I may use a common expression, I do not desire to see. the goose that lays the golden egg goosed, golden eggs to the value of £639,000,000 have been produced (in Australia, and I want to see a few more of them produced h’ere.

Mr THOMPSON:
New England

.’ - I congratulate the Government upon the remarkable ingenuity it has shown in trying to please all sections of the community. This proposal, as a means of assisting the gold industry, must amuse every one who has any sense of humour. I have not yet made up my mind whether the measure should be called a gold bounty bill or a gold brick bill; but I must confess that I have been astonished that the gold-mining industry, in general, has expressed satisfaction with it. Unremitting efforts have been made during the last twelve months by those interested in this industry in Australia to get Parliament to legislate for the payment of a bounty on1 gold, and this bill is the fruit of all these efforts.

I cannot see that any particular advantage will flow to the industry, even if this measure becomes law. To my mind the Government is playing with a doubleheaded penny. ‘ It is asking us to agree to the provision of a bounty which may never be paid, and which, if ever paid, cannot possibly assist the industry. As the honorable member, for Indi (Mr. Jones) has clearly pointed out, no money will be payable under the provisions of this bill until 1932, and then the bounty will be payable only on the excess over the normal production in 1928, 1929, and 1930. The gold-mining interests have been so easily satisfied that it is a pity that a measure of this kind was not introduced earlier. The scheme of this bill is, however, very different from the proposals made to the previous Government and to honorable members at various times, . and concerning which- a .great deal of publicity has appeared in the. press. I am not at all troubled about the so-called economic aspect of the bounty. Honorable members should give up wasting time in discussing, whether various schemes are economic or uneconomic, for it has now become apparent, that, if any section of the community wants assistance along a certain line badly enough, it has only to maintain its agitation for a long enough time, and it will get it because of its importunity. Honorable members have been deluged with literature about the advantages .of a gold’ bounty, and the subject has been flogged to death in the press.

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– “What about a more persistent advocacy of .the creation of new States?

Mr THOMPSON:

– There is still hope that something, will be. achieved in that direction. Seeing that’ the Government has satisfied- the gold-mining industry with this scheme, I shall think about placing before it, at a later date, a scheme for the creation of new States.

The economic value of this- proposal is entirely futuristic; but if even half the optimistic predictions’ of honorable members opposite are realized, the scheme will have justified itself. What would the expenditure of £100,00.0 matter if the gold-mining industry were re-established ? It would be a great thing if we could put the industry on its ‘ feet, and’ a still greater thing if we could keep it there. The honorable member for Swan (Mr. Gregory) said yesterday that only 6,000 men were employed in gold-mining in Australia to-day. “We may assume that if the output’ of gold were doubled the number of persons employed in the industry would also be doubled; but the employment of an additional 6,000 men would not relieve unemployment very much. There are to-day more than 400,000 persons unemployed in Australia, and the number is continually increasing.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– Every gold-miner carries six other people on his back.

Mr THOMPSON:

– I have heard statements of that kind in regard to other primary industries. It has been said that every farmer supports eight other people in his district. But statements of that kind are mere theory. ‘ ‘

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– Not at all. Kalgoorlie has a population of 36,000, only 6,000 of whom are gold-miners. The remainder of the population is entirely supported by these 6,000 men. There are no other industries in the district to maintain the people.

Mr Maxwell:

– Then surely the gold mines of Kalgoorlie do not need a bounty ?

Mr THOMPSON:

– That would certainly appear to be so. But if we assumed that, consequent upon the passage of this bill, 40,000 additional men would find employment, it would only reduce the number of unemployed by onetenth. I do not say that that would not be a good thing. If we could devise any scheme which would absorb 40,000 men we should be able to justify this session of Parliament, which so far has been almost barren of results.

Mr Yates:

– Send for me; I will find work for the people.

Mr THOMPSON:

– The honorable member for Adelaide has adopted the role of the mystery miracle man. He has told us he can do all kinds of things, but he has not told us how they can be done.

Mr Yates:

– I have put my proposals before honorable members frequently, and they have a very good idea of what I would do.

Mr THOMPSON:

– Yes ; the honorable member would get the printing presses to work. Actually this proposal’ is not uneconomic. Gold is the only commodity in Australia to-day the value of which is appreciating. The value of all our other commodities is depreciating. To-day a sovereign will buy twice as much wool or wheat as it would have bought last year. Probably in twelve months’ time gold will be worth still more than it is worth to-day. There- is no actual necessity for the payment of this bounty. One becomes a little dizzy when faced with a proposition that we should buy gold, the value of which is appreciating, with notes, the value of which is depreciating. But that is really the proposition with which we are faced.

I intended to direct attention to the point made by the honorable member for Indi (Mr. Jones) that there could be little risk in agreeing to this proposal because no money would become payable under it until 1932. If the scheme will result in an influx of foreign capital, the employment of another 40,000 men, and a general restoration of the gold-mining industry, it will be one of the most profitable upon which this. Parliament has ever embarked. In fact, the prospect is so alluring, and the cost so trifling, that J am astonished that any honorable member on this side of the chamber should be opposed to it.

Mr Jones:

– But the gold must be produced in 1931 to entitle its producers to a bounty in 1932.

Mr THOMPSON:

– Australia is sick to-day - so sick, in fact, that any possible remedy is worth trying. She is like a patient of whom the doctor says, “ Give her anything she fancies, and don’t worry”. That is apparently the policy of the Government with regard to Australia and her economic ills. The bill is innocuous, unless, as mentioned by the honorable member for Indi (Mr. Jones), another Golden Mile, another ‘Ballarat, or another Coolgardie be discovered. Then the Government would be unable to finance the proposed bounty. There might be a sudden call upon an impecunious Treasury for millions of pounds. An increase of 100 per cent, in the production of gold during the next ten years would result in a demand upon the Government which it could not possibly meet.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– We should then have an overflowing Treasury on account of the extra men employed.

Mr THOMPSON:

– I think not. If the Government had to pay £5,000,000 in bounty, it would be a good thing for the mining interests; but the real problem confronting us is not one of private finance, but of government finance. The Government would be wise to shorten the period over which the bounty is to be payable. It should insert in the bill a saving clause to prevent too heavy a demand being made upon the Treasury. We may rest assured that the mining interests will claim every penny to which they become entitled under the bounty during the next ten years. Mining and other speculators are the greediest persons to be found - the more they get the more they want.

Mr Maxwell:

– Why not limit -»the, amount of bounty payable in any year ?

Mr THOMPSON:

– There ought to be some safeguard. Once this bill is passed it will remain on the statute-book for ten years; otherwise the mining interests would accuse Parliament of repudiation.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– That applies to any other bounty.

Mr THOMPSON:

– No. In the mining industry, particularly, operations have to be carried on over a considerable period before they can be made profitable. This bill may become a millstone round our necks, and one of the greatest obstacles to our solvency. We should not allow ourselves to be sold, bound hand and foot, to the gold-mining interests of Australia for the whole of the next decade.

Mr LAZZARINI:
Werriwa

.- The general subject of gold production leaves me cold. It would have been a good thing if the man. who first discovered gold had never been born, because this metal has caused one of the grimmest tragedies of the human race. Honorable members opposite have told us ad nauseam that the present proposal is economically unsound; but are we to judge all the affairs of mankind from the point of view of material gain? We are assured that the granting of a bounty on gold production is economically unsound, because men will be employed in a dying industry. If an invention were applied to industry which would throw 10,000 persons on the unemployed market to starve, but show a profit of an extra 3 per cent. or 4 per cent., it would be regarded by honorable members opposite as an economically sound proposition; but those are the economics of paganism, which leave humanity to be trodden under foot so long as some gigantic robot can produce increased wealth. It is of first importance to feed, clothe, and house the people, and if that is not the attitude of every government towards the interests of humanity, all its professions of legislating for the benefit of the people are as sounding brass and tinkling cymbals. At this stage of our boasted Christian civilization, are we to consider every proposal from the point of view of its so-called economic soundness, which means that it should produce extramaterial gain for the few, while the many are allowed to starve? It is from this angle that I desire to approach this bill. I cannot work myself up into a white heat of enthusiasm over the measure; but, if it would take two or three men off the dole, restoring to them their manhood and allowiug them to earn their own living and feed and clothe their wives and children, the bill is justified by every canon of humanity and Christianity.

We are led to believe that men must be forced to delve deep in the earth for this stuff called gold, so that we may be able to base our credit upon it. If only another Mount Morgan, or another Ballarat, or another Bendigo, were to materialize, our financial troubles, we are assured, would be over. This view is due to the fact that the human race has not advanced, in its mental outlook, much beyond the stage reached by the benighted savage. I point out that the gold that may be won as the result of the payment of this bounty will not be the property of the Government. If it were to be, then, even if the Government lost £5 in every £100 expended, it would be a truly economic proposition, because we should be liquidating the national debt; but the gold, which is said to be so essentia] for the restoration of our credit, will be shipped overseas, and paper credits will be handed over to the persons who produce it. That is the beginning and the end of the scheme propounded under the bill, and I defy anybody to contradict my statement. When honorable members on this side of the chamber advocate the provision of paper credits in order to feed the hungry, their proposal is scornfully characterized as one involving inflation that will destroy Australia. Gold is said to be the basis of credit; but we have shifted over £600,000,000 worth of gold overseas, and we have borrowed paper credits from the countries to which we have removed it.

Mr Mackay:

– I cannot accept the honorable member’s argument.

Mr LAZZARINI:

– If the honorable member did agree with me, it would clearly demonstrate that my reasoning was wrong. The proposal is to give a paper £l-note as a bounty on the production of an ounce of gold. Let us suppose that that ounce of gold will produce four sovereigns. When we get those four sovereigns they will be buried in vaults, and armed men “will be employed to. see that no one looks at them. Then we shall issue sixteen paper pounds against .those four sovereigns, which themselves were obtained by the issue of paper. If against one sovereign we can issue four £l-notes, we can issue three £l-notes against nothing; because if one sovereign goes into the vault and its place is taken by four notes, there are three notes against which there is nothing. Therefore, there is no necessity to send men down into the mines to delve for this mineral; they can be employed under God’s sunlight, making nature more beautiful to the eyes of man, building more comfortable homes for them to live in, giving them surroundings that will elevate their minds instead of destroying their souls and turning them into beasts. If it is economically safe and sound to issue four notes against one sovereign that is buried in the earth from which it has been taken, it is equally safe and sound to issue three notes with the backing of the wealth of this country, to be exchanged for goods. Let us bend our energies to the task of making more beautiful the environment of our people, and elevating them until they are in reality the foremost of God’s creatures instead of the shivering, starving, dirty objects that they are to-day in the slums of our cities. If we have not the courage to tackle that work, let us shut up this Parliament and go hack to the people, and tell them that we are barren of ideas and destitute of any hope or inspiration ; that we have fallen down on our job, and that the wisest thing to do is to send to this National Parliament those who have the courage to do what we refuse to do.

Mr WHITE:
Balaclava

.- Whether the honorable member for Werriwa (Mr. Lazzarini) likes it or not, gold is the currency of the civilized world. The bone of contention is that the bil] which we have before us makes provision for the payment of a bounty on the production of gold. Listening to some honorable members, one would think that the measure is an open sesame to an Aladdin’s cave. The remarks of the honorable member for Indi (Mr. Jones) would lead one to suppose that its passage will lead to all riches. One could almost t imagine that one was listening to a recital of a tale from the

Arabian Nights. We would regard i as a fool a merchant who, having failed to make a success of the sale of different commodities, refused to cut down his overhead expenses and decided to purchase gold for more than it was worth. That, however, is exactly what the Government proposes to do; it is prepared’ to pay a higher price.than gold is worth. The only point upon which, I agree with the honorable member for Werriwa is, that it matters not whether the currency be gold or the sands of the sea. But the fact that it is gold gives gold a value at the moment. It is the only substance that has not depreciated in value during the present world depression.

Mr Keane:

– Is not the honorable member supporting the bill?

Mr WHITE:

– I certainly do not support the bill; it is economically unsound.

Mr Lewis:

– So also is the Paterson butter scheme.

Mr WHITE:

– That may be so. Whether you buy gold or peanuts, if you pay more than the worth of the article you lose on the transaction. The Government is losing something like £50,000 a day, notwithstanding the taxation that it is constantly piling on, and there are 400,000 men out of work. All that is needed is the application of business management to the government of the country. This measure proposes a complete departure from that principle. If gold cannot be won at a profit, it is not worth taking out of the ground. If sand happened to be the’ currency of the moment, and it could not be obtained at a profit, it might as well be allowed to remain on the seashore. Some honorable members believe that this proposal will lead to a great revival in the gold-mining industry. It would give me the greatest pleasure if the unemployed in our mining districts, particularly in Bendigo, could be found employment in the mines. I know Bendigo, and I realize that it is languishing on account of the decline of mining. I. hope that the Government is not hoaxing the unemployed and leading the miners to believe that there is to be an immense revival and work for all, I cannot see any hope of that in this bill. We all know that the faintest of. rumours of the discovery’ of gold will induce miners to pack up their kit and make for a locality. Some of us are acquainted with the story of the golddigger who sought admission to Heaven, and was informed that already there were 40 gold-miners inside. . He pleaded that if he were allowed to enter, even on probation, he would get rid of the others. His request was granted. He said to the first man, “Have you heard the news?” He was asked, “What news?” and replied, “ The new discovery “. The miners in Heaven had been engaged in the pastime of pulling up the gold pavements, and were generally making a nuisance of themselves; but when they were informed that there was a new discovery “ down below “, there was a general exodus from the celestial regions, and the man who had accomplished this feat was granted temporary admission. When he was told that he might remain if he chose, he said, “I don’t know whether I shall ; there may be something in it “. There is no doubt that miners will travel to’ the ends of the earth to engage in goldmining.

I should like the Government to encourage the prospector a little more; that is being done in New South Wales. lt would be much better for the men to be engaged in profitable occupations in the country than congregated in huge unemployed camps in the city. This proposal will merely build up false hopes in th’e:minds of many of the unemployed. Ft may or may not attract capital. I have never yet supported the payment of a bounty, and though I do not claim that that is anything to be- proud of, there may come a’ time when I shall. -I contend that, each bounty proposal must be judged on its merits.

Mr Keane:

– The honorable member has not supported any proposal that has -been put forward by this side.

Mr WHITE:

– That remark is unfair. Yesterday I supported the Repatriation Bill; and there are other proposals that F need not mention to which I have lent my support. The honorable member for Bendigo is probably aggrieved because I did not support the proposal to pay a bounty on the manufacture- of sewing machines in’ his electorate. I gave definite reason for- my opposition to that proposal. This’ matter.’’ however over shadows proposals relating to sewing machines, flax, or other commodities that have had to be assisted. The Government’ is prepared to give away money without endeavouring to effect an economic readjustment in the gold-mining industry. Lt will be worth while to win gold again only when there has been that readjustment. The Arbitration Court is the obstacle that stands in our path.

Mr Lewis:

– Why is it?

Mr WHITE:

– It has proved itself, in a time of depression like the present, an inflexible instrument that cannot quickly adjust itself to circumstances, with the result that thousands of men have been thrown out of work who could have been kept in employment with a slight readjustment.

Mr Lewis:

– By reducing wages.

Mr WHITE:

– The honorable member is always saying that I believe in reducing wages. I admit having said that wages will be forced down; and I repeat it. They will be forced down, not by the employers, but by a relentless economic pressure. It is what wages will buy that matters. The experience in regard to other metals ought to have shown us definitely that we cannot mine gold at a profit while the existing conditions in the industrial world continue. We have at Mount Bischoff, in. Tasmania, the best tin in the world ; : yet on that field there are only a few men scratching round, and we have to import tin for use in our secondary industries from the Malay Peninsula. There was a time, as honorable members know, . when we had to import coal because it was not hewn by our men, and as a result we lost a big trade in. that commodity and in many directions oil and electricity replaced the use of coal locally. Victoria cast off her vassalage under New South Wales by developing her brown coal deposits.

Mr Lewis:

– Would not that have occurred in any case?

Mr WHITE:

– Largely; but it was precipitated by industrial trouble.

This week the Leader of the Opposition (Mr. Latham) placed before the Leader of ‘the Government a statesmanlike proposal that was rejected - for the present only, I hope. I should like to see it brought forward again.

Mr SPEAKER (Hon Norman Makin:

– Order! I have prevented other honorable members from discussing such matters under this bill.

Mr WHITE:

– I was leading up to the awards that apply to the gold-mining” industry in Victoria and Tasmania. If representatives of the employers, the employees, and the Government, can get together and evolve a scheme for placing men in employment, they will have achieved a memorable result. This is a time when there should be a good deal of give and take. Such a conference might bring about an economic re-adjustment of the gold-mining.,industry, and that would give it the necessary stimulus. If men can be employed at wages which the industry can afford to pay, gold will be won.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– Expensive machinery is needed to extract it.

Mr WHITE:

– I know that big expensive plants are shut down because of the impossibility of mining the low-grade ores. The Minister must agree with me, however, that labour costs “ are a big consideration. The deeper the mine goes the more expensive it is to work arid, in most instances, the lower is the grade of ore. Therefore, we must reduce production costs, not only by reducing wages, but also by using efficient machinery and attracting more capital to the industry. When necessary, tariff remissions should be made. In any case, there should be a general co-operation throughout the industry. There is abundant gold in Australia, and there may be Eldorados yet discovered. I hope that that will happen, and that we shall find oil, too. We can stimulate the industry by awakening interest in it and bringing about a general co-operation. I am opposed to the payment of a bounty because the country cannot afford it. In fact, it cannot afford many of the bounties which are now being paid. The result of the bounty system has been to increase living costs, with a corresponding increase of wages in some instances. Our prosperity has temporarily disappeared, and we must adjust our finances to suit the times. I am, therefore, not prepared to support a bounty on gold, and shall vote against the bill.

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

.– 1 hope that the golden dreams of some honorable members who are supporting the bill, will be realized. I wish, first of all, to refer to the schedule in the bill. I cannot help thinking that it has been drafted purely for the purpose of exercising control over large gold-producing plants. I was hopeful that the bill would give some encouragement to those working small shows, including even alluvial miners. Incidentally, I notice that the schedule makes no provision for alluvial mining, but I understand that the Minister intends to rectify that defect. I hope that the provision of the schedule will not be used to harass those who are working small shows and whose methods are not so efficient as those of large goldmining companies. The schedule provides that information must be produced to the satisfaction of the Minister, but the fact remains that any information supplied will have to be to the satisfaction of the various mining inspectors working under the State Governments. They may, of course, have different ideas respecting the methods of producing gold, and the meaning of the provisions of the schedule. I join with the honorable member for Fremantle (Mr. Curtin) in urging that the schedule be omitted altogether from the bill. It represents a new departure so far as bounties are concerned, because it provides that the Government, before granting the bounty, must satisfy itself that the most efficient methods of mining are being used. [Quorum formed.]

Mr BERNARD CORSER:
Wide Bay

– For some months past consideration has been given to the possibility of giving employment in the gold-mining industry and of increasing the gold production by means of the payment of a bounty. When the suggestion1 was first made it was thought that greater assistance would be given the industry than is proposed under the bill, and there were many exaggerated accounts of both the advantages and the dangers of such a course. The hill itself is a modification of the original proposal, and while it is impossible for us to say at the moment that the bounty will produce the beneficial results anticipated by some honorable members, we all hope that the object in view will be achieved. I believe that in introducing this bill the Government is making an honest effort to provide employment and to increase our gold production. If that takes place, it will certainly have a most beneficial effect upon the country in general. One great blessing is that the bill provides for payment by results, and I must compliment the Government on adopting that sound principle. There is no reason why it should not be adopted in respect of the Government’s policy generally. >The Acting Minister for Trade and Customs (Mr. Forde) said, in his enthusiasm, that this legislation would most likely give employment to anything up to 100,000 men.

Mr Keane:

– He said perhaps 70,000 men.

Mr BERNARD CORSER:

– It is to be hoped that half his estimate will be reached. In 1927, according to the latest figures in the Year-Booh, 6,250 men were employed in the gold-mining industry, and they produced some 500,000 ounces of gold. If, by means of this legislation, we double that production of gold and the number of men employed, we shall indeed he fortunate. From 1901 to 1910, Australia produced £142,000,000 worth of gold. That was its greatest period of production. In 1901, 70,972 men were employed in the industry, the greatest number employed in any one year of the 10-year period. Even with the assistance given to the gold-mining industry by means of a bounty, it is unlikely that we shall exceed in regard to employment and production the figures of 1901. I believe that gold can be just as advantageously secured to Australia by other means. In return for our exports of wheat and wool we could receive gold instead of, as at present, the products of the secondary industries Of other parts of the world. It is unfortunate that clause 14 of the hill provides a penalty in respect of the importation of gold. If we restrict the importation of gold, we shall do great harm to Australia. We could prevent gold from coming here to be used as part of our gold production on which bounty is payable, but that could be done without placing a general prohibition on the importation of gold. Some honorable members are fearful of supporting the bill because they claim that the production of gold in one year may reach 5,000,000 ounces.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– Is that likely?

Mr BERNARD CORSER:

– It is not likely; but I hope it will happen. To meet the views of those who are afraid that the production will be enormously increased, proper safeguards could be provided in the bill.

Mr Martens:

– Is the,- honorable member afraid ?

Mr BERNARD CORSER:

– No. I hope that the production will reach 5,000,000 ounces and that the Treasury will be called upon to pay £5,000,000 ,by way of bounty on gold. I hope that, because of the encouragement given to the mining industry under this legislation, some one will have the good fortune to find a rich deposit or some new mining field, and thus bring about a revival of the industry in this country. If this bounty should lead to a claim upon the Treasury for £5,000,000, or even £10,000,000 in one year, no harm would result. The bill could be amended to provide that all gold on which bounty is to be paid must be submitted to the Government for purchase. That would protect the revenue, and, in the event of a tremendous production, the gold could be placed in the Treasury vaults and used as a reserve against the note issue. There would be no danger in issuing £10,000,000 worth of notes against a holding of £10,000,000 worth of gold, and credit could be further extended at any time on the basis of that security. Possibly this would he a departure from established custom; -but it would release credit in a much safer way than by increasing the note issue, as has been proposed, without increasing the gold backing, and it would enable work to be provided for the unemployed.

Mr Thompson:

– Would it be fair to take from the producers £10,000,000 worth of gold and give in exchange 10,000,000 £1 notes?

Mr BERNARD CORSER:

– Yes; the owner could not get more than notes representing the value of his gold from any trading bank or commercial institution. During the present trouble the export of gold should be entirely prevented. I say again that, in order to improve the credit of Australia overseas. we must first rectify the financial position within Australia. To do that we must provide employment, and get from our people their full productive value.

One supporter of the bill said that Queensland enjoys a bounty on sugar production, and the inference to be drawn from his remarks was that Queensland representatives are bound to support the gold bounty. No bounty is payable on the production of sugar; but, during the existence of the embargo on imports, Australia has benefited through the existence of the Queensland industry to the extent of £6;000,000. The gross saving, including duty over the whole period of the embargo, has been £34,440,000. From 1915 to 1921 there was a shortage of 476,000 tons. The import price of sugar was £36 5s. Australian consumers were supplied, under the- agreement, with raw sugar at £25 2s. 10£d. The total consumption during the seven years was 1,888,791 tons.

Mr Maxwell:

– Does the honorable member say that, during the whole embargo period, the Australian people paid less for sugar than if no embargo had been imposed?

Mr BERNARD CORSER:

– That is correct. Even Mrs. Glencross admits that.

Mr SPEAKER (Hon Norman Makin:

– Order ! The honorable member must not. attempt to mix sugar and gold.

Mr BERNARD CORSER:

– I am replying to a statement by the honorable member for Indi; but I do not propose unduly to extend the argument. If the whole of the amount required for local consumption during the seven years from 1915 to 1921 had been imported, the cost would have been £68,468,000. During that term the saving made possible by the Australian industry was £15,680,000. In the second period, 1921’ to 1928, the total import cost, duty free, would have been £9;600,000 less than the agreement price paid for the local product; therefore,. in deducting that amount from the previous £15,680,000 of saving we can show a total saving of over £6,000,000, and plus duty over the fourteen years, £34,440,000 was saved to the Australian consumers by the Queensland sugar industry. That amount includes allowance for the duty which would have had to be paid on imported sugar

Nobody can predict the effect . of the gold bounty. The bill represents an honest attempt to provide employment, and revive the” production of gold, which has fallen deplorably during recent years. I hope that both aims will be achieved. Exception has been’ taken to the conditions imposed by the schedule upon applicants for the bounty. In my opinion, they are a necessary safeguard. The Government is anxious to protect mines against ruthless exploitation for the sake of the bounty. Nothing would be gained to the Commonwealth by depleting the mines of their rich values to the neglect of systematic development which would ultimately enable the . lower . values also to be. won. I support the bill, and I hope that some at least, of the expectations of the Government will be realized.

Mr RIORDAN:
Kennedy

.- I propose to support the bill.

Mr Thompson:

– Do not forget sugar.

Mr RIORDAN:

– I regret that some members do not take a national view of public .questions, and adopt a selfish attiture towards the Queensland sugar industry. Those who have advocated the payment of a bounty on gold production expect that it will lead .to the development of low-grade propositions all over the. Commonwealth, and we are assured that, with the installation of up-to-dat machinery, mines which cannot be profitably worked at present, will, be given a new lease of life. If the Commonwealth is to be restored to a sound economic foundation, our people must get back to the land. We must look to. the wealth that. is to.be won on the land and under the surface. Some critics have said that mining has killed thousands of men; so have wars, yet more wars will occur. It is far better to help men to earn their living in mines than to starve them to death, which must be the eventual consequence of the payment of the dole. For those about the cities who are able to collect it, the dole is something, but I am concerned for the men in the country, and for the sake of former miners who are now unemployed, I desire to see . a revival of the gold-mining industry. If capital is not prepared .to come to Australia to develop the mining industry, and the nation is- unable to do it, we ‘should give, .every encouragement we can to those who are prepared to undertake the work. Gold is a commodity which is always saleable, and which always has its price. It has been said that the offer of this .bounty will not bring about a revival . of mining. Personally, I think it will. In Queensland, operations were first begun on the Mount Isa mining proposition eight years ago. Up to the present £2,000,000 has been spent, and an average, of 2,000 men have been continuously employed there. A railway line 60 miles long has been constructed upon which a further 500 or 600 men have been employed, and other work has been done on the construction of a dam, the sinking of shafts and the building of roads.

Mr Maxwell:

– Has any return yet been obtained from Mount Isa?

Mr RIORDAN:

– Not a single ton of lead has yet been marketed, but the company is hopeful that, when the developmental work is completed in January next, the return will be adequate. The directors have been developing their property on right lines, so that the return will be continuous and satisfactory once they begin to market their product. Some persons say that we should not undertake to pay a gold bounty for ten years; that five years would be sufficient. I do not think the ten years’ period too long, seeing that it has taken the Mount Isa company eight years to develop its property before getting anything out of it. Again, it may be objected that if it takes eight years to develop a property, the offer of a bounty will not immediately relieve unemployment. The case of Mount Isa may be quoted in refutation of this objection also because, although the mine has not yet become profitable, over 2,000 persons have been employed there, and on building the railway, dam, &c, for a number of years. It is true that the price of lead is now very low, but it is hoped that the Mount Isa proposition will prove payable, because the deposits are close to the surface, and are being worked with the most up-to-date machinery. In these times of low prices such mining ventures can only be made to v,pay if worked by up-to-date methods, and capital is necessary if such methods are to be employed.

Mr Prowse:

– The honorable member admits that there is some virtue in capital.

Mr RIORDAN:

– We are living under the capitalistic system, and any sensible worker must realize that, so long as the system lasts, it behoves him to get the best he can out of it. In the circumstances, ‘ the workers are prepared to allow these industries to be carried on by those best able to do it. At Mount Isa there .has been practically no labour trouble since the work began. It has been objected that the gold bounty will not assist prospectors if only large companies can carry on profitably. I remind honorable members that prospectors did quite well out of Mount Isa. All those who held claims received consideration for them either in cash or shares. Some of the shares have been sold for as much as £40. Many prospectors are’ still holding scrip, and working on the field for the company, realizing that they themselves could do nothing to develop the deposits without capital. Some years ago, at Kidston, a gold-field in Northern Queensland, the miners found that they could not make their claims pay with the outofdate appliances they were using. At their request the Government provided them with a battery for crushing, and for the last twelve years the population of that settlement has been maintained. I have no doubt that the taxes collected by the Government from the residents have more than repaid it for its outlay on the battery.

Mr Maxwell:

– That is good business.

Mr RIORDAN:

– I , agree. Even if the output of gold were doubled within the next five years, the Government would not have to pay a bounty of £1 an oz. on all the gold produced. The bounty would work out at only about 10s. an ounce for the whole output. It has been objected that the payment of this bounty would be uneconomic. I ask honorable members whether it could possibly be more uneconomic than paying a dole to persons out of work. It should be made as easy as . possible for gold prospectors to obtain application forms for registration.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– They will be obtainable from every gold-buyer in the Commonwealth.

Mr RIORDAN:

– It is possible thai the gold-buyers, like wool-buyers, may prefer to remain in the cities, and prospectors should be able to obtain forms from every post office, clerk of petty sessions, or mining warden. The honorable member for Wide Bay (Mr. Corser) said that we should not permit the export of gold from Australia. As a matter of fact, the Government has prohibited the export of gold since 1929.

Mr Bern abd CORSER:

– Yet f 1-2,000,- 000 worth has been exported since last year.

Gold in this country would not be of much more use to us than the gold held in the United States of America is to that country. It would, however, be advantageous to produce gold here, and send it to Great Britain in discharge of our liabilities there. Britain, in her turn, could send it to the United States of America to discharge her obligation to the United States. The Right Honorable L. S. Amery recently emphasized the importance of encouraging the production of gold in Australia. Mr. Amery said -

Was it not possible that great new discoveries of gold might have a great stimulating effect in bringing about the recovery of the world after the depression which hart followed the Great War? From Britain’s point of view, we had a particular interest in this question. We happened to he under an obligation to pay to the United States of America a great lump of gold. Our debt to America was always talked about in terms of money; but, as a matter of fact, what we were under an obligation to pay to the United States of America was so much weight of gold - 926,000,000 sovereigns; in other words 0.700 tons of gold, which represented a cube of gold about 23 feet each way. We had to pay for that annually 280 tons of gold, or one ingot measuring eight feet each way would just settle that debt annually. If a mine could be found to produce that, the problem would be solved. Perhaps it would not be in quite so crude a fashion that we should settle our debts, but if one might illustrate the importance of the gold-mining industry to this country - Great Britain - it lay in the following: Our debt was a debt which had got to he paid in weight of gold. We should, in fact, have to pay for it in work- - in British goods and services spent in acquiring gold which we had to pay to the United States.

An increase in gold production would therefore be of distinct advantage to Great Britain; in fact, the people there seem to be a good deal more interested than our own people in this proposal.

Proper safeguards should be insisted upon in connexion with the payment of all bounties, and the Government should make sure that practical men are associated with the scheme. Despite the smiles of honorable members opposite, when the Assistant Minister referred in his speech to the amount of additional work that could be provided if this industry were revived, I believe that it should be possible, within a year or two, to employ 10,000 more men in direct mining operations by reason of the stimulus that will be given to the industry by the offer of this bounty. This would mean that work would be provided indirectly for 60,000 other persons, making 70,000 in all, for every gold-miner provides work indirectly for six other persons. When mining was booming in Queensland in the period from 1901 to 1923 the average number of men engaged annually in gold and other metalliferous mining was 23,000.

Unfortunately the copper-mining industry is also languishing because of the impossibility of finding capital to install up-to-date plant. The methods of years ago are useless for working low-grade propositions. Mount Isa should be an object lesson to us. There have been many doubting Thomases in connexion with this undertaking, but no one can deny that it has brought additional capital to the value of £2,000,000 into Queensland, and has provided employment for 3,000 men for eight years in a district which formerly had no population whatever. Years ago the mailmen used to pass through this area once a week on the way to Camooweal, but to-day a thriving township is established there. In addition to the men actually working at Mount Isa, there are other men prospecting in the country round about. A steady man working on a mining field of this nature makes his “ bank “ of £50 or £60 in, say, six months, and then saddles his packhorse, buys his stores, and goes into the outback country to prospect for new fields. When his “bank” gives out, he usually returns to a regular job until he can save some more money. These big-hearted men who go out into the gullies and along the river beds searching for minerals are usually able to make the basic wage, but their trouble is to obtain stores regularly.

Many of them live on such’ luxuries as kangaroo tail soup and tinned meat. These people should be encouraged in every possible way.

I am hopeful that the provision of this bounty will result in a revival of goldmining at Charters Towers, where millions of ounces of gold have been mined. Unfortunately some of our gold-mining fields are in very poor country. Gympie is. an exception. When mining gave out there) dairying was developed, and bigger cheques are now made in that industry there than were made in the palmiest gold-mining days. But Croydon is in a different position. When mining flourished there its population reached 15,000. To-day, I do not suppose there are more than 150 people on the field.

Geologists tell us that many low-grade propositions in Australia could be profitably worked if up-to-date treatment plants were installed. I am glad that the Commonwealth Government has, in recent years, made available a substantial vote for the encouragement of pros,pecting. Queensland, last year, received £6,000 from the Commonwealth for the assistance of prospecting, and spent the money wisely. Honorable members may rest assured that every care is taken to see that this money is devoted to the purpose for which it is intended.- The various mining wardens regularly inspect the places where prospectors are working, and before any grant is paid, they certify that the prospector is entitled to assistance, because of the actual work he has done. If up-to-date treatment plants could be established in only two centres in Queensland in the next year, say, at Charters Towers and Ethridge, constructional work would be provided for more than 5,000 men, while additional employment would be given in railway and other necessary undertakings. Consequently, I heartily support this bill, which is designed to attract capital to Australia, and encourage our own people to undertake the production of gold.

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

– I am not enamoured of this bill. I look upon the production of gold as an economic waste. Gold is only really valuable for the making of ornaments of one kind or another. It is no longer the currency of the country. But as the provision of this bounty will probably lead to the employment of additional men, I shall support the bill. We should do everything possible to provide employment for our people. I consider, however, that the Government should buy all the gold that is produced. If this were done, we should know that there would be no “monkeying” with it. It is very easy for gold obtained from one mine to be taken to another, and, so to speak, re-produced. If the Government bought the gold as soon as it was mined, difficulties of that kind could not occur. I do not think that the passage of this bill will encourage prospecting by individual miners, because no bounty will be payable on the gold produced until after the expiry of twelve months, and then it will be payable on only the excess production. Prospectors, generally speaking, cannot wait long for their money.

Mr Maxwell:

– They will have the proceeds from their gold to keep them going in the meantime.

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

– Every prospector who produces gold should immediately be able to obtain a bounty upon his production.

Mr Riordan:

– Does the honorable member consider that a bounty should he paid upon the whole production ?

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

– Yes, seeing that all gold producers have to be licensed, I do not think that there should be any difficulty in evolving a workable scheme for the payment of a bounty immediately upon the production of gold. Although the production of gold is not an economic undertaking, we have to pay our debts overseas in gold, and so an increased production would be of some value to the country. For local purposes, notes would be just as valuable as gold. Many of the miners will probably die of tuberculosis and other diseases. It is unfortunate that this industry has to be maintained.

Mr Thompson:

– Would the honorable member abolish the gold standard?

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

– Yes, it is only a myth. My sole reason for supporting the bill is that it will provide employment.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 and 2 agreed to.

Clause 3 - “ licensed gold-buyer “ means a person authorized under the law of any State to buy gold.

Mr FORDE:
Assistant Minister for Trade and Customs · Capricornia · ALP

– I move -

That, after the word “State”, in the definition of “ licensed gold-buyer”, the words “ or Territory “ be inserted.

Gold is produced in the Northern Territory, and it is necessary to make provision for the recognition of goldbuyers there.

Mr Prowse:

– It would be possible for gold from elsewhere to be taken into the Northern Territory. “Would a check be kept on all gold alleged to have been won in the territory?

Mr FORDE:

– We have our customs officers in the Northern Territory, and there are other government officers in Central Australia. Every possible safeguard will be exercised to prevent imposition.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 4 agreed to.

Clause 5. (1.) Bounty under this Act shall be payable in respect of gold produced during the period of ten years commencing on the -first day of January, One thousand nine hundred and thirty-one.

Mr GREGORY:
Swan

.- This bill is supposed to provide a bounty on the production of gold ; but one is inclined to ask what the Government is giving under this measure. The production this year will normally be considerably less than it was last year, and if the bounty does not cause increased production, the gold producer will receive no benefit. The measure should be liberalized so that some assistance to the industry will be assured.

Mr Forde:

– Does the honorable member wish to make this bill more liberal?

Mr GREGORY:

– Yes. The economic conditions in Australia to-day are monstrous. The honorable member for Kennedy (Mr. Riordan) has spoken of the large quantity of base metals waiting to be recovered in Queensland, and, of course, there are great mineral possibilities in Western Australia and in the Northern Territory ; but I am afraid that this bill will not assist in the development of the gold-fields. Despite the flourish of trumpets on the part of the Government over the assistance that it is supposed to be giving to the gold-mining industry, the bill will be. futile unless the gold output in future years increases considerably. Something should be done to encourage the large low-grade propositions that could employ hundreds of workmen.

Mr Forde:

– Does the honorable member suggest the granting of abounty of £1 an ounce on all gold won ?

Mr GREGORY:

– That could not be done; but I should like to see a small bounty of 4s. or 5s.an ounce offered.

Mr Forde:

– On.the present production that would . cost £125,000 a year.

Mr GREGORY:

– The desire of the Government is to increaseproduction and to provide further employment. This bill, it seems to me, will be an incentive to the formation of new companies. Although the bill is supposed to offer an inducement to companies to work mines in Australia, the honorable member for South Sydney (Mr. E. Riley) wants the Government to grab the gold immediately it has been produced. Why does not the party opposite take over the profits in the iron and steel industry and in the metals industry? The responsibility in this matter rests with the Government, and I hope that steps will be taken to see that something tangible is done to assist goldmining.

Mr LATHAM:
Kooyong

.- This is the most important clause in the bill, in that it provides for the payment of bounty on gold produced during a particular year. When one seeks to ascertain the meaning of those words one turns to clause 3, which shows that, in the case of gold delivered to a licensed goldbuyer, it is deemed to have been produced iri the year of delivery to the gold-buyer. The claimants for bounty under the act must be registered as gold producers under clause6, in order to be. eligible under clause 7 to receive payment. There is a fundamental distinction in this respect between gold and many, if not all, other commodities except metals. If a bounty is paid on an ordinary manuf actured article it is easy to ascertain the date of the manufacture of the article on which the bounty is payable. But gold can be stored or hoarded indefinitely.

Throughout the Commonwealth quantities of gold are kept in tobacco tins and the like, and a great deal of it cannot be checked up. It appears to me that there are grave dangers of fraud being exercised under this measure. What steps will be taken to prevent the same gold being “ produced “ many times, even in the same year, or in successive years? It is useless to say one ought not to assume that dishonesty will be practised. In every industry there is always a proportion of dishonest persons, and if there should be a large excess production of gold, so that a considerable amount of bounty became payable, there would be a real risk of dishonest persons finding it worth while to combine and “ ring in “ gold on an honest licensed gold-buyer. There are members in this House who have more knowledge of gold-mining than I have, but everybody knows that a very careful check has to be kept on the production of gold by a battery. Every one is aware of the possibilities of manipulation of the returns from a battery. Gold cannot be identified in the same way as other articles; it is a homogeneous substance. I know that analyses will, in many cases, show a distinction between gold from one district, as turned out from a battery, and gold from another district. But, subject to that qualification, gold cannot be identified.

Mr Jones:

– Does the honorable member favour the suggestion of the honorable member for South Sydney that all gold should be purchased by the Government? That would obviate the necessity for checking.

Mr LATHAM:

– If the Government were to purchase all gold, new considerations would arise which I am not prepared to discuss offhand, though the danger to which I am referring would disappear. Under the bill there will be the risk of gold now in hand being brought forward as the production of some small show which is conducted, perhaps, by some not very honest persons, who, to enable them to collect bounty, will say that it was won in a particular year. A large quantity of gold in various forms is held by the people of Australia, and it might be used in this dishonest way. I do not see what check there is upon that form of dishonesty. Take the case of gold produced in 1933 ; it goes through the proper channels, and the bounty is paid upon its production. The same gold may be presented for the payment of the bounty in the following year.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– How could it be? It would be in the Commonwealth Bank.

Mr LATHAM:

– Where is there in the bill a provision requiring its lodgment in the Commonwealth Bank?

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– In the first instance the gold passes into the possession of a gold-buyer or a bank. The banks purchase 90 per cent, of the gold produced. It is then forwarded to the mint, and directly it leaves the mint it has to be deposited with the Commonwealth Bank under the provisions of the Commonwealth Bank Act, 1929.

Mr LATHAM:

– I agree that, under that act, there is power to requisition gold ; but that has not yet been exercised. The whole of the gold produced in Australia cannot be requisitioned. It might be possible to pass an act making provision for that, but it would be impossible to police it. Let us assume that the registered gold-buyers are thoroughly honest; in the majority of cases they are banks and responsible persons. But what check can there be upon those who are prepared to manipulate the mine accounts and the battery results, and to bring in the same gold in two or three successive years?

Mr Curtin:

– Does the honorable gentleman really believe that the members of the mining community of this Commonwealth are of the type that he suggests ?

Mr LATHAM:

– Ihave already endeavoured to meet that objection by saying that one must have safeguards against dishonesty in this, as in all our legislation. With all respect to the goldmining industry, I am afraid that it is not possible to regard it as the most honest in the community. I suppose there has been more swindling in connexion with gold-mining than with any other industry. Much as they deplore it, probably all honorable members will agree that that is so. What check will there beagainst the same gold being broughtin time after time, if there are people who are prepared to embark upon a considered scheme of fraud? If the excess production were relatively small, the risk would not be worth taking for the sake of obtaining ls. or 2s. an ounce; but if anything like the anticipations of some of those who support the measure ure realized, there would be every inducement to those who are fraudulently inclined to make large sums of money by presenting the same gold several times.

Mr Maxwell:

– Is not the honorable gentleman making rather valuable suggestions to men who may be prone to do that sort of thing?

Mr LATHAM:

– I do not think that these gentlemen require any suggestions that may originate in my frank, innocent and simple mind. What I am asking is: Where are the precautions against a considered scheme of fraud? It is not sufficient to say that all our people are entirely honorable, and that no such contingency will arise.

Mr Jones:

– Does the honorable gentleman favour the suggestion that the Commonwealth Rank should buy all the gold produced ?

Mr LATHAM:

– I decline to say, offhand, whether or not I favour legislation providing for the compulsory sale to the Government or the Commonwealth Bank of all the gold that is produced. At the present time any person may sell gold to a gold-buyer or to the mint, and that position will continue.

Mr Keane:

– The honorable gentleman should remember that gold can be 3old only once to a. buyer ; it then becomes his property, and the seller does not get his hands on it again.

Mr LATHAM:

– I appreciate the point of the honorable member. But the bill does not say in precise terms that the gold must be sold to a gold-buyer before it can be presented for the payment of the bounty. If it did, most of my objections would be met, because the only risk would be that the licensed goldbuyer was dishonest, and the majority of them occupy such a position that they cannot afford to be dishonest; and, furthermore, their standing and character are such that they, in fact, are not dishonest. Clause 7 provides for the payment of the bounty upon gold that has been delivered to a licensed goldbuyer. If that is intended to mean that the gold must be disposed- of to the licensed gold-buyer, and not merely presented through him, it will meet many of my objections.

Mr Curtin:

– That is the usual practice.

Mr LATHAM:

– But the measure only requires that the producer shall have delivered, not sold, the gold to a licensed gold-buyer.

Mr CURTIN:

– The word “ sold “ can be substituted for “ delivered.”

Mr LATHAM:

– That would meet many of my objections. I ask the Minister to consider the advisability of providing expressly that the licensed gold- buyer shall be paid the bounty. At present the bill is drawn on the assumption that the bounty will go to the gold producer. It assumes that the property in the gold,, even though normally it be sold to a gold-buyer,, may remain with the producer. If the bounty were paid to the licensed gold-buyer, the seller of the gold would get the full benefit of it, and many of the risks to which I have alluded would be removed.

Mr A GREEN:
Minister for Defence · KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

.- Whatever alteration may be necessary from a legal point of view, it can be accepted as a fact that the dangers which the Leader of the Opposition (Mr. Latham) has. conjured up out of his mind do not exist.

The CHAIRMAN (Mr. McGrath).I suggest that the Minister defer his remarks on that subject until the committee is considering clause 7.

Mr FORDE:
Assistant Minister for Trade and Customs · Capricornia · ALP

– The honorable member for Swan (Mr. Gregory) wishes the bill to be made more generous. He suggested the payment of a bounty of 5s. an ounce on all gold produced. In round figures that would involve an expenditure of £125,000 a year, without resulting in any increased production. I am aware, of course, that the Minister for Defence (Mr. A. Green) has supported an even more generous proposal - that there should be a bounty of £1 an ounce on all gold produced. The honorable member for Swan for many years sat behind a government that held office in prosperous times, and had the power to grant a bounty on gold production; but he was not able to induce irto entertain such a proposal. * The Minister for Defence has been more successful within twelve months of attaining office, despite the fact that the times are bad.

Sympathetic consideration will be given to the suggestion of the Leader of the Opposition (Mr. Latham). It is the desire of the Government that the bill shallbe absolutely watertight, and any suggestions will be carefully weighed, no matter from what quarter they come. I move -

That the following sub-clause be inserted: -

The average number of ounces of fine gold produced annually during the years specified in the last preceding Sub-section shall, for the purposes of this section, be determined by the Minister from information furnished by the Commonwealth Statistician, and shall be notified in the Gazette.

The object is, merely to improve the machinery provisions of the bill, and render capable of ascertainment beyond question the average number of fine ounces of gold produced in excess of the average production during 1928, 1929 and 1930. It is considered desirable that power should be vested in the Minister to determine the average from appropriate information supplied by the Commonwealth Statistician, and to give notice thereof in the Commonwealth Gazette.

Mr Bayley:

– I have a prior amendment.

Amendment, by leave, withdrawn temporarily.

Mr BAYLEY:
Oxley

.- It would be very unwise to grant this bounty for a period of ten years. No one can say what the con ditions are likely to be within even five years; they may be so favorable that this Parliament, in its wisdom, may decide to discontinue the bounty. In the meantime, however, vested interests will have grown up, and we shall be told that we are repudiating a promise and that expenditure would not have been incurred had it been known that the contract was not to be observed to the end of its term. If necessary, an extension for a further period of five years can be granted after the expiration of that period. I, therefore, move-

That the word “ten”, sub-clause 1, be omitted, with a view to insert in Heu thereof the word “five”.

Mr FORDE:
Assistant Minister for Trade and Customs · Capricornia · ALP

– The Government gave very full consideration to this point. It realizes that some time must elapse before the necessary capital for the development of mining propositions can be raised and the development be put in train. Some mines in Queensland that have been working for six or eight years have not yet produced any ore. In the electorate of the honorable member for Kennedy (Mr. Riordan) there is the Mount Isa mine, a silver-lead proposition, which has not yet turned out any ore, although it has been carrying on developmental work for eight years, and is employing to-day something like 1,500 men. So far, all its expenditure has been defrayed out of its capital. If gold-mining is to be resucitated on a big scale in Australia, uptodate and scientific methods of treating ores will have to be introduced. That is a matter for companies that have a large amount of capital, and are prepared to sink in a mining proposition probably £1,500,000 - propositions like that at Wiluna, in Western Australia, where developmental work has been proceeding for about three years, and upon which the expenditure so far amounts to £600,000.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

-And there will be no crushing before next May.

Mr FORDE:

– If the bill had only a 5-year term it would not offer as great an inducement as ten years to big mining companies that are prepared to invest large sums. I consider that a 10-year term is reasonable.

Sitting suspended from 6.15 to 8 p.m.

Mr HAWKER:
Wakefield

– I did not speak on the second reading of the bill, and I rise now to support the amendment of the honorable member for Oxley (Mr. Bayley). This clause, providing for the payment of a bounty during the next ten years, practically gives a blank cheque to one industry for nearly half a generation. If the bounty is to be of any substantial assistance to the prosperity of the country, it will be because it leads to the discovery of a new and large gold-field and, if that happens, a tremendous liability will be placed upon the Commonwealth taxpayers. Although the finding of a new field like Kalgoorlie or Ballarat might lead to boom conditions, and to a revival of general prosperity, there can be no doubt whatever that the payment of £5 or £4 10s. for something which is worth only £4, will lead to a loss which must be made up by the community. So long as the bill aims only at the better working of existing mines, and the treatment of low-grade deposits, the taxpayers and the industries of Australia will not be put to serious additional expense; but if a new and large field were discovered the additional production would undoubtedly require a very large payment under the bounty. There may he some argument in favour of giving a bounty to encourage further prospecting; but most prospectors, although they may dream of another Golden Mile, are kept active through the discoveries of small shows to which a bounty might be a substantial benefit. The prospect of a bounty . of from 10 to 25 per cent, of the value of the product may encourage additional prospecting work. The prospect of 20 per cent, or 25 per cent, of added value’ to a large and immensely rich new discovery would not make much difference to the eagerness with which prospectors search for such discoveries. I therefore believe that it is in the interests of the country to place some sort of check or limit on this concession which is being given to a specially energetic and lobbying industry.

Mr Keane:

– The honorable member should be the last to talk about lobbying.

Mr HAWKER:

– The honorable member has been identified particularly with measures before this House which are essentially company promoters’ measures, and we know what a big interest the bucket shop people have in gold-mining. There is another reason why we should not give to the industry an absolutely indefinite and long-dated blank cheque. It has been asked, “ What is the difference between giving a bounty to one primary product and giving it to another?” There is a great difference indeed between giving a bounty on a mineral product and giving it on a product, of cultivation. There are mineral products of which the reserves in this country’ are so enormous that there is no prospect of them being worked out. I refer to products such as coal and iron.

The CHAIRMAN (Mr McGrath:
BALLAARAT, VICTORIA

I must ask the honorable member to confine his remarks to the clause before the chair.

Mr HAWKER:

– Other honorable members have been allowed to draw comparisons with the flax and sugar industries. .

The CHAIRMAN:

– I remind the honorable member that that was on the second reading. The committee is now dealing with a particular clause.

Mr HAWKER:

– There may be some arguments, and I believe that there are weak arguments, to support the granting of a bounty on metal products, because this may lead to the mines that are operating being worked out more thoroughly and ‘ completely before they are abandoned. When mines are being worked at great depths, there is a tendency, as the honorable member for Indi (Mr. Jones) has said, to pick the eyes out of them. New mines are different; they form part of the assets of the country. It is a wrong policy to give a bounty to encourage the depredation of what are the capital assets of this country. The Development and Migration Commission, when dealing with this subject, said -

The fundamental difference between the goldmining industry and most other industries is that gold-mining deals with wasting asset? whereas other industries deal more with continuing or building assets. All mines by their very nature must have a beginning and an end. For a ton of ore extracted from a mine brings the undertaking just that much nearer to the end of its life, for ore in a mine is not replaceable and once the ore has gone the asset has gone.

This bill will encourage the opening of new mines at a loss. The fact that the bounty is to be paid for a period of ten years, will make it worth while for the investment of new capital and the purchase of new machinery to deplete national assets at a loss. It would be far preferable to leave those assets in the ground in reserve until such time as they can he won at a profit. To take them out at a loss is analogous to a farmer who has a spare building on his place selling the bricks in that building at less than it would cost him to dismantle it. To win ore at a loss is to place a burden on other industries, and to diminish their employing possibilities. To-day, the tendency is for the price of gold, .as com- pared with, other commodities; to increase, and ‘. we do not know whether that ten dency will continue for five or ten years. If -it continues for ten years, the’ industry’ may become immensely prosperous, and, in that case, there would be no justification for assisting it at the expense of other industries. I, therefore, support the amendment of the honorable member for Oxley (Mr. Bayley), and if it is defeated,’ I hope that there will be inserted in the bill a provision placing a limit upon the liability to which this Government is proposing to commit future governments.

Mr NAIRN:
Perth

.- The argument that gold-mining is a wasting industry applies equally to the coal, oil, silver, and, indeed, all industries. Mankind has been mining for many generations, and it will continue to mine. The proposal to limit the payment of a bounty to five years is palpably an indirect way of trying to defeat the object of the bill. This scheme, if it is to succeed at all, will succeed by the promotion of companies, the accommodation of capital, and the treatment of large bodies of lowgrade ore. To induce people to invest in mines, we must give them some security.

Mr Morgan:

– What security do they offer ?

Mr NAIRN:

– They have to invest their money in the mines. This measure would be quite useless if we limited the payment of a bounty to five years, and rather than impose such a limit, I prefer that the bill should be withdrawn.

Mr WHITE:
Balaclava

.- A further reason why the period for which the bounty is payable should be reduced is that we are passing through a time of deflation, prices are falling, and even wages will be forced down by irresistible economic laws. I am opposed to the bill. If the bounty, is to be payable for a whole decade, we shall store up a great number of difficulties.

Mr Keane:

– Who has been priming the honorable member? He knows nothing about this industry.

Mr WHITE:

– I know that the honorable member represents a mining district, and I should like to see it become prosperous and all the miners back at work. I have no party interest in this subject; I am treating it as a national pro blem. If we pay more for gold than it is worth, capital will slide further down the hill. As I have said previously, a conference should be’ convened to consider the whole matter. We have heard that £10,000,000 of capital is forthcoming for this industry. I should like to know whether there is to be any penalty if the ready cash is not forthcoming from the proposers -and interested persons we have seen about the House. It has been said that the bill will encourage speculation in mining. Undoubtedly it will boom mining shares; but this Parliament is not interested in that aspect of the matter. We should deal with the industry on its merits. As this is the period of goodwill, let there be a conference of mining parliamentary and industrial interests with a view to the working of the mines at a profit without a bounty, and, undoubtedly, a workable scheme can be evolved. In three years’ time, we shall have reached an economic equilibrium, and it will then be profitable to work the mines. It is therefore unnecessary to make the bounty payable for ten years, and I suggest that in this time of deflation and falling prices we should support the amendment, and limit the bounty to five years.

Mr A GREEN:
Minister for Defence · KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– I regret the attitude of those honorable members who would differentiate between a bounty for the gold-mining industry and bounties for other industries. I assume that we want this legislation to be effective. The honorable member for Kennedy (Mr. Riordan) made it clear this afternoon that a limitation such as is proposed in the amendment would make the bounty futile. Any man acquainted with goldmining knows that the first need is to make discoveries that will attract new capital for’ investment in the industry. If this bounty does not induce the investment of new capital it will absolutely fail, because it has to be applied over the whole production. The Government told the representatives of the industry that it was not’ prepared to offer a bounty to the industry ‘if it could not produce more than the 486,000 ounces per annum which it has averaged for the last three years. The representatives’ of the industry took up the gage. They said they were prepared to back their faith in the industry. They have accepted the offer of a bounty on all new production, and, on the strength of that, are prepared to endeavour to get further capital invested in developing existing mines or opening up new ones, to put men to work, and to restore the industry to its old status. Gold-mining has never been adequately helped. I believe that the policy of tariff protection helps Australia generally, but I recognize that it has been a continuous burden on the gold-mining industry. This bounty is a measure of return to the industry for what it has done to support the secondary industries in the eastern States. I remind the committee that the gold-mining industry has made great sacrifices. During the war, although gold was then at a premium, it was commandeered by the Commonwealth Government for three years at the pre-war price. When the market was freed, Mr. Dyason, who was at that time president of the Gold Producers Association, and is in the chamber fighting against this bill to-night-

Mr Latham:

– Not at all.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– I have watched the consultations between him and members of the Opposition. I have seen honorable members running to him for directions. He is tick-tacking for certain interests to-night, but it is a pity that he did not tell the Deputy Leader of the Opposition (Mr. Gullett) before he delivered his diatribe last night, that, in 1919, he declared that the mining industry had lost £3,000,000 through the wartime commandeering of gold. To-night he is trying to stab the industry in the back by limiting the operation of the bounty to five years, knowing that that limitation will make this legislation absolutely ineffective. The Mount Isa mine has been working for eight years and is not yet a profitable producer. We must get capital from abroad to develop the mines.

Mr Gullett:

– Don’t be foolish.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– The insane interjections and jackass-like laughter of the Deputy Leader of the Opposition avail him nothing’. If I speak warmly it is because I am annoyed at the attempt to differentiate between the gold-mining industry and such industries as those of Queensland, in which the mover of the amendment is interested. A period of five years will not be sufficient to induce the investment of new capital and develop mines to a profit-producing stage.

Mr LATHAM:
Kooyong

– J am surprised that, the Minister for Defence (Mr. A. Green) should have become so excited. Instead of making a useful and intelligible contribution to the discussion, he has used his position to impute motives to a private individual. Such an imputation comes with ill grace from any supporter of this bill.

The reasons adduced in support of the proposal to restrict the bounty to a period of five years were not dealt with by the Minister, even remotely; he could not have listened to them. At the present time the bill offers a blank cheque, and no one can foretell how much bounty will be payable in any year. If the anticipations of some optimists are realized, the payment will amount to millions of pounds - an amount which could not possibly be paid, so far as one can judge the prospects of Commonwealth revenue in. the immediate future. If the bounty be limited to five years, Parliament will still be able, at the end of that period, to make such further provision as it thinks fair and proper in view of the then existing circumstances. Amongst those circumstances will be the amount payable by the Commonwealth and the capital which has been invested upon the basis of faith in the bounty provisions. The latter will be an important element, and Parliament will have to consider what further assistance, if any, should be given. This is a particularly speculative proposal. When a bounty is offered in respect of articles grown or manufactured, there are means of determining approximately the available market and the amount of capital likely to be forthcoming for investment, and, in those circumstances, a longer duration of the bounty may be justified. For instance, we know that under existing conditions the local production of galvanized iron is not likely to exceed the Australian demand. We hope that the industry may be able to export later on; but we cannot legislate for it on that basis. Gold-mining, however, is an unknown quantity. Ministers have spoken as though members of the Opposition have a grudge against the industry.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– You are not sympathetic.

Mr LATHAM:

– I do not think the Minister really believes that. This amendment is prudent, and it will not be unjust to any who may act upon faith in the bounty. If the anticipations of some supporters of the measure are realized, and production’ in Western Australia increases as they predict, the Commonwealth will be committed to a liability in the tenth year of £2,300,000 for Western Australia alone. In that event, no member of this Parliament will consider it necessary to continue the bounty upon the scale now proposed.

Mr Jones:

– Will not the greatest risk be taken by those who invest large sums of capital in the industry?

Mr LATHAM:

– That may or may not be; much will depend upon the discoveries that are made and the developments that take place in mining and metallurgical methods. Within five years the bounty may prove to be a failure, or, on the otherhand, it may have proved a tremendous success. It is at least possible that this Parliament will be comniitted to an expenditure by way of bounty which five years hence will be found to be entirely unnecessary.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– A bounty for five years would not be enough to attract new capital.

Mr LATHAM:

– Constantly developments are taking place in metallurgical processes. At Broken Hill the flotation process has led to the recovery of metal which formerly was regarded as irrecoverable. Advances are being made in mining methods, also; it is impossible for us to foresee the developments ten or even five years ahead, and it is equally impossible to estimate the liability to which this measure will commit the Commonwealth. Cannot Parliament be trusted to dealfairly five years hence with those who, in the interim, have invested their money in the industry because of this bounty? If a five-year period is unfair, why limit the operation of the bounty toten years; why not extend it to fifteen or twenty years? It cannotbe said that a ten-year term offers any certainty of success. One honorable member told us this afternoon that at the Mount Isa mine, where there is a large body of silver-lead ore, developmental work has been going on for eight years, and no crushing has yet been done. There is no certainty of production, even in ten years, so that a company cannot be sure of receiving a definite sum by way of bounty within a fixed period after beginning operations. Then why not leave it to Parliament to decide, after five years, whether or not the bounty will be renewed, seeing that there can never be anything but an unknown and indefinable liability. If the Government were in a position to declare that, over a period of ten years, so much and no more would be paid by way of bounty, something might be said for this proposal. Ten years is too long a period to bind the Commonwealth to pay a bounty on a product so speculative in production as gold must necessarily be.

Mr RIORDAN:
Kennedy

.- It was I who referred this afternoon tothe developmental work which has been going on at Mount Isa for the last eight years. Ibelieve that if this bounty is made payable for only five years, it will not encourage companies to undertake the working of low-grade ore deposits. The present Nationalist Government of Queensland, in order to encourage the development of low-grade propositions, is granting leases for a period of 30 years. Low-grade shows are of no use to prospectors. The man working with a pick and shovel wants something which will yield him a decent return. A prospector cannot profitably dolly stone unless it is better than 2 oz. to the ton. Machinery is necessary to treat low-grade ores. As I have said, it has taken the Mount Isa Company eight years to get its property into a payable condition. It was first necessary to take over the leases held by miners who had worked the show while the payable ores were, as the miners say, at the roots of the grass. Later, it was necessary for there to sink shafts, and then they had to erect a windlass to wind up the ore. That made the work more expensive, and the need for capital arose. The history of most Queensland shows is that the best stuff is found at the roots of the grass. The first attempt to exploit

Mount Isa in a big way was made -by be Anglo-Russian Gold Mining Company. It spent about £100,000, and then turned the proposition over to someone else. When prospecting shows of this sort for large-scale production, it is necessary to put in three or four months work boring with the diamond drilling machine to determine whether the lode lives to any depth. Then the core is tested for values. 1 cannot 3ee why some of the machinery used in mining is required to pay any duty at all. The imposition of duty on such machinery merely adds to the cost of mining. The Acting Minister said that SO per cent, of the machinery which will be employed in the treatment of lowgrade propositions, would be made in Australia. Companies should buy Australianmade machinery if it is available, but it should be sold at a reasonable price. Unfortunately, this Parliament has no power to regulate the profits of manufacturers. Apparently, it is still necessary to import 20 per cent, of the machinery needed, and this will make it impossible to commence operations immediately. No bounty will be paid until the latter end of 1931. If any of the mining companies had quantities of gold concealed in kerosene tins or sugar bags, they would have asked that the bounty be made payable immediately. Even before the end of 1931, the additional gold production will, in most cases, be practically nil. At Wiluna, according to the Minister for Defence (Mr. Green), the honorable member for Swan (Mr. Gregory), and the honorable member for Fremantle (Mr. Curtin), the machinery is already on the field, arid part of the plant erected. It may be possible to. begin treatment there almost at once, but in the other States little or no benefit will be reaped from the bounty for at least five’ years. When new companies have to ‘be formed, it will take at least twelve months for them to get their capital, especially if the undertaking is on anything like the same scale as at Mount Isa, where £2,000,000 has already been spent. My wish is to see men put to work at once, and if the term during which the bounty is payable be reduced to five years, companies will not be induced to begin operations. I hope that the Minister will not accept the amendment of i the honorable member for Oxley (Mr. Bayley). Per- haps one should not be surprised at hitmoving this amendment, because his electorate comprises only three or four square miles in the vicinity of a city, in which the manufacturers and other commercial interests have been bleeding the miners and primary producers for years.

Mr White:

– The city population will have to pay the bounty.

Mr RIORDAN:

– Let the primary industries go to the wall, and see what happens to the cities! Those in the cities are feeling the pinch now becausethe primary industries have fallen on bad times. There are thousands of unemployed walking the streets, because of the selfishness of city interests in the past.

Mr White:

– What about the selfishness of industrialists?

Mr RIORDAN:

– If the industrialism were half as savage as the capitalist? have shown themselves to be, capitalism would not last very long. I trust that the Minister will not make any variation of the terms during which the gold bounty will be payable

Mr MACKAY:
Lilley

.- It i* encouraging to hear honorable members on the other side of the House support the proposal for paying a gold bounty on the ground that it will induct capital to come to Australia. Ii is so long since they have had anything to say in favour of capital, that this change of front comes as a most welcome surprise. The only justification for a gold bounty is that it may stimulate prospecting. No one will suggest that mines which are producing gold at the present time need a bounty. If another Bendigo or Ballarat is discovered, the bounty will not be needed at all. The Assistant Minister said that this legislation was to be so framed that no future Parliament could vary itf provisions. That, I contend, is wrong. In five years’ time, the situation may have so altered that the continued payment of the bounty will be no longer necessary in the interests of the goldmining industry, and will be merely s burden on the taxpayers. This Government has expressed itself as opposed to the reduction of wages, but it has, by continually increasing taxation, taken very effective measures to reduce the income of the wage-earners. There should be a provision in the bill to the effect that this legislation may be revised after five years. If it is then found that the bounty is still achieving its purpose of encouraging additional gold production, it can be renewed; otherwise, it should be suspended. Of course, the Government has a majority, and will, no doubt, have its own way, but representations from the minority should receive some consideration.

Mr CURTIN:
Fremantle

– I hope that the amendment will not be agreed to.” It is interesting .to note that although many variations have been made in the details of the proposals for the payment of a bounty, on gold from the time when the royal commission of which Mr. Higgs was chairman made its investigation until now, there has been no variation of the proposed term during which the bounty should operate. Every authority has said that a ten -year term is essential. Opinions have differed as to whether the bounty should be paid on the whole production or on the excess production, and. whether the amount of it should be £1 an ounce or some other amount; but there has been no difference of opinion about the term during which any such scheme should operate. The industry is unanimously of the opinion that it is of paramount importance that the bounty should extend over a ten-year period. So long as protection remains the fiscal policy of this country - and it seems as though it will remain so indefinitely - there will be a need to assist the goldmining industry, for an inexorable effect of protection is that the cost of the machinery and equipment required for mining purposes is increased. As the Minister for Defence said last night,- protection, while a good thing for Australia as a whole places burdens upon some sections of the community. It is good to protect our secondary industries, but it is necessary to look to the welfare of the primary producers.

The Leader of the Opposition (Mr. Latham) endeavoured to make a point in favour of the five-year, as against the ten-year, period by saying that goldmining is a speculative industry. He said that rich mines might be discovered. Last night one honorable member spoke of the possibility of discovering a mountain of gold somewhere. But although the geological survey of Australia is far from complete, there is no indication that rich bodies of ore are likely to be discovered in the near future. In the last twenty years relatively little success has attended the work of prospectors. We have to deal with the realities of the ease, and must face the fact that we have numerous large bodies of low-grade ore, which can be treated profitably only by the installation of efficient, up-to-date machinery which those engaged in the industry at ^resent cannot afford to purchase. The fixing of a ten-year period would, in my opinion, be likely to attract capital by affording security to investors. It is expected that the capital needed for this purpose will come principally from overseas. Only a fortnight ago certain honorable members opposite nearly tore the roof off this building in their enthusiasm to protect the interest of external investors in Australia. They cannot turn right about face quickly in respect of such a matter and think that their altered outlook will escape notice. There are technical problems to be faced and overcome in the treatment of lowgrade ores, and the five-year period would not be sufficiently long to enable these difficulties to be solved. In view of the fact that the experts engaged in this industry, who have keenly interested themselves in this proposal, are unanimously of the opinion that a tenyear period is essential to the success of the scheme, I intend to support the clause. We should not lightly turn aside the advice of experts in such a matter. The Ministry has been impressed with the strength of the case made out for the ten-year period, and nothing that the Leader of the Opposition or the honorable member for Oxley (Mr. Bayley) has said has weakened it.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– I desire to make a personal explanation. A few moments go I referred to the presence in this House of Mr. Dyason, of Melbourne. I know that this gentleman has been connected with the gold-mining industry for very many years, and as the Leader of the Opposition, (Mr. Latham) had been holding frequent short conversations with him during our discussion of this bill, I assumed that he was reinforcing his arguments against this measure. . The honorable gentleman has assured me that I was under an entire misapprehension. I accept his word and unreservedly withdraw my statements.

Mr GREGORY:
Swan

.- The best point that has been made in favour of this proposal, in my opinion, is that it might induce the investment of new capital in’ Australia. Apart from that, I do not think there is very much of any value in the measure. If capital can be induced to come here, it will be a good thing for Australia. But to achieve this end we must assure investors that the bounty will be payable over a reasonable period. To show that a fiveyear period is not sufficiently long for the development of a low-grade mining proposition on a big scale, I direct the attention of honorable members to the history of the “Wiluna Company. This enterprise has been in operation for five years, but not. an ounce of gold has yet been placed on the market. The time has been spent in erecting plant and machinery and in preparing for large scale production. The mine is now down to a depth of 800 feet. Considerably more than £1,000,000 has been spent at Wiluna; but it is not expected that production will begin in earnest until April or May next. Similar developmental work will have to be done in connexion with every large deposit of lowgrade ore. It would be of no use for a company to erect machinery immediately payable ore had been discovered near the surface. The deposit would have to be thoroughly explored. A shaft would have to be sunk probably through the sulphide zone to some depth before a company could tell what class of machinery and what type of process would be needed to treat the ore. In the early days of the Coolgardie field, machinery was sent oat from London almost as soon as claims were pegged out, and this caused a huge loss to shareholders. We should do our utmost to prevent careless and wasteful expenditure of that kind. I consider that the bounty should operate for a minimum period of ten years.

I was surprised last night to hear the honorable member for Henty (Mr. Gullett) oppose this measure so vigorously, for I remember the attitude that he adopted in connexion with the proposed bounty on the export of coal from one State to another.

Mr Gullett:

– I have opposed every bounty proposal made since I have been a member of this House.

Mr GREGORY:

– I think the honorable gentleman was a member of the Ministry at the time to which I have referred.

Mr Gullett:

– That is not .so; I assure the honorable member that he is in error.

Mr GREGORY:

– I hope that the tenyear period will be agreed to.

Mr Gullett:

– The honorable member seems to be a little bit out of his stride in supporting this bounty. He did not have anything favorable to say about the proposal to pay a bounty on the production of galvanized iron.

Mr GREGORY:

– I have said quite frankly that I do not expect any great benefit to flow to the mining industry from this proposal ; but it is worth doing something to try to encourage the development of our low-grade ore deposits. If capital can be attracted to Australia from abroad for this purpose, it will be most advantageous to the Commonwealth. A mine at Lancefield, in Western Australia, which is sunk to a depth of 60Q feet, and in which 1,000,000 tons of ore of an assay value of 34s. a ton are lying ready f or stoping, cannot be developed because the cost of production is too high on account of Arbitration Court awards and tariff restrictions. I have all my life endeavoured to keep the cost of producing all primary products down to the lowest, possible point. I said last night, however, that, as Parliament had granted assistance to various industries in Melbourne, Sydney and elsewhere, on such an extravagant scale, I thought I was justified in supporting this proposal to assist the gold-mining industry. I have not very much heart to support any proposals of this kind. I believe that the sooner that we can remove our tariff embargoes and high duties the better it will be for Australia. Political interference with industry will not get us anywhere. We should let the people develop the country in their own way. I am supporting this proposal mainly in the hope that it may attract new capital into Australia. That would lead to the employment of more labour and an improvement iu the economic condition of the country.

Mr JONES:
Indi

.- I oppose the amendment submitted by the honorable member for Oxley (Mr. Bayley). The Leader of the Opposition (Mr. Latham) referred to the optimistic estimates of certain enthusiasts of the results that would follow the payment of this bounty, and he seemed to doubt whether those estimates would be realized. Then he became fearful as to the amount of bounty that might have to be paid; but I point out that, if it has to be paid, great benefit will accrue to the Commonwealth. It i3 true, as the honorable member said, that gold-mining is a speculative industry. Probably no primary, industry in Australia is more speculative, and for that very reason it is necessary to give sufficient inducement and security of, tenure to attract capital from abroad for the development of gold-mining. Those who put millions of pounds into the industry will be running far greater risk than will the Government in offering this bounty. When I was speaking on the second reading of the bill the honorable member for Lilley (Mr. Mackay) asked, by way of interjection, what costs had been incurred in the production of the gold that has already been won in Australia, the inference being that the cost of production has been greater than the value of the gold obtained. Suggestions of that nature are not likely to attract foreign capital to Australia for the development of this industry. It would be unwise to restrict the payment of the bounty to a period of five years. At every conference of representatives of the mining industry, assistance over a period of ten years was unanimously’ favoured.

Mr ARCHDALE PARKHILL:
Warringah

– I support the amendment. I regard five years as a reasonable period, in the present circumstances, for the payment of this bounty. The honorable member for Fremantle (Mr. Curtin) has quoted from a report which advocates a ten-year period; but it should be made clear that that report is five or six years old. Surely the general conditions in this country have changed materially in the last six years. What w.as. ‘ a good , commercial proposition in 1925 is not necessarily a payable one to-day.

Mr Curtin:

-Ever since 1925 the recommendation of the chairman of the commission to which I referred has been supported by all who have examined the proposal and desire to see a bounty granted.

Mr ARCHDALE PARKHILL:

– I have no desire to misrepresent the honorable member. I do not know to whom he .refers when speaking of the subse1quent support which the chairman of the commission has had. He said, also, that the demand for a gold bounty was influenced by the protectionist policy of the country. He must realize that the tendency to-day is in the direction of removing the high, tariffs and embargoes that have been imposed by this Parliament.. These, the Government itself has said, are of a temporary character. It is quite possible that, in the near future, reductions of duties may be made. Then, again, the exchange rates may alter, at no great distant date, to an extent that would give advantages to the gold-mining industry. If the most optimistic views held regarding the effect of this bounty are realized, a tremendous sum will have to be paid to the industry, and it is quite possible that, irrespective of the term fixed for the bounty, another Parliament may decide that too much has been paid. Just as this Parliament has altered the national debt sinking fund arrangements, it will be competent for a succeeding Parliament to vary the terms of this bounty. It seems to me that five years is a reasonable period for an experiment of this nature. The chief point elicited in the debate is the transient nature of the industry, and the element of speculation associated with it. In view of the doubt as to the probable result of the bounty, and the present financial circumstances of Australia, we should not bind the Parliament in this matter for a longer period than five years. Honorable members opposite, if they were putting their own money’ into a speculative venture, would not care to bind themselves for ten years, and they have no right to commit the Commonwealth to a proposal in which they would not be prepared to invest their own money.

Mr HUNTER:
Maranoa

.- The’ amount payable under the bounty should be limited in some way, whether by making the bounty payable over a given period of years, or by determining the total sum to be granted by way of assistance. “We do not know what development may take place during the next ten years; certainly we do not know what quantity of gold will be produced. Suppose we accept1 the statement by honorable members opposite that this measure will result in the employment of an additional 70,000 men. As nearly 500,000 ounces of gold were produced last year by 6,000 men, the bounty in that case would amount to £6,000,000 a year. Of course, this country could not possibly afford to pay such an amount as that.

Mr Forde:

– I did not say that 70,000 miners would be employed- I merely stated that it had been said by some persons that, directly and indirectly, an additional 70,000 men would be given employment by the payment of the bounty.

Mr HUNTER:

– The Minister ought not to have mentioned that figure, unless he wished the House to accept it as a. reliable estimate. I have read a letter, written by the honorable member for Fremantle (Mr. Curtin), in which he pointed out that the purchasing power of the pound is increasing. If there is a change of Government in the Commonwealth - and there probably will be before the lapse of ten years - the costs of production will be considerably less than they now are, and gold-mining may become a payable undertaking without the assistance of a bounty. If the present Government remains in office - and there is only a remote possibility . of that - the Commonwealth will, should the bill become law, be paying £5 in notes for £4 worth of gold, or, calculating on the present value of the £1 note, £4 10s. for £4 in gold. If the Government pays £5 of notes for £4 worth of gold, and sends the gold overseas for the purchase of securities at their present price of £78, it will be £2 to the good in every £100. This would be one of the finest business deals any Government could carry out. I would like to know if this gold bounty has been considered in’ conjunction with the avowed- note inflation policy of the Government. The possibilities of this bounty are most interesting. If the Government paid £5 of notes for £4 worth of gold, it could sell half that gold and issue another note, because it would still be keeping within the limit of £3 of notes for every £1 of gold. If the Government does not remain in office, the costs of production will fall, and the goldmining’ industry will not need a bounty

We are told that this measure will assist the prospector; but how can he be helped if he does not receive bounty on the gold that he happens to find this year ? He may not receive the bounty next year. It is also possible that half of the mines may cease to produce, or that gold production may be reduced. On the other hand, the other half of the mines may increase their production; but no bounty would be payable because the total production would be the same as before. The Government seems to have “ sold the industry a pup “. Of course, there might be a discovery of gold which would so increase the output that the bounty would be too heavy for the country to bear. The best plan would be for the Government to consider the introduction of an amendment to the bill, when it reaches another place, for the purpose of limiting the bounty to a fixed sum annually, or reducing it on a tapering scale according to falls in the cost of commodities.

Mr BAYLEY:
Oxley

.- When I submitted this amendment I stated that nobody could tell what the position of the industry might be in five years. The honorable member for Maranoa (Mr. Hunter) has referred to the possibility of a reduction in the costs of gold-mining. I invite the honorable member for Kennedy (Mr. Riordan), the honorable member for Indi (Mr. Jones), the honorable member for Lilley (Mr. Mackay) r and others who have spent years on various gold-fields in this country, to recall the different mining processes with which they are familiar. They will remember the use of the amalgam plate in the early days. As a result of that process much gold was left in the sand- and many thousands of pounds were extracted from the tailings after they had been sent to

Germany. Eventually the cyaniding process was introduced into this country, and its use enabled the sands that had been put on one side to be run through again,.-to the profit of all concerned.

Mr Riordan:

– The person who owned the gold originally did not get. any additional advantage.

Mr BAYLEY:

– I realize that; but he was paid according to the profits made by the undertaking when the old amalgam system was in vogue. To-day, practically no gold is recovered by the cyaniding process; everything is done by oil filtration. Who can say that we shall not have a new process within the next three or four years, making it possible to work profitably down to as low as 1 or 2 dwt. ? It would be the essence of wisdom if the committee were to save the people of this country unnecessary expense. Should the bounty be found to be not needed at the expiration of five years, on account of the reduced cost of production, it would be very difficult to withdraw it. We would be accused of having repudiated our contract if we withdrew the bounty before the term fixed had expired. On the other hand if an extension were warranted in five years it could be given, and no injustice would be done to the gold-seekers.

Question - That the word proposed to be omitted (Mr. Bayley’s amendment) stand part of the clause - put. The committee divided. (Temporary Chairman - Mr. Chifley.)

AYES: 35

NOES: 13

Majority . . . . 22

AYES

NOES

Question so resolved in the affirmative.

Amendment negatived.

Mr GULLETT:
Henty

.- I move -

That the following words he added to subclause 3: - “and shall not exceed the sum of £500,000.”

I do not wish it to be thought that I believe that £500,000, or any substantial sum, is likely to be paid in any one year. As I said on the motion for the second reading of the bill, I do not think that this proposal will either attract additional capital from overseas or lead to increased production. But I may be wrong, and the Minister right. It is true that the Minister has not, so far, been right in any of his tariff or bounty forecasts; but his luck may change. I am concerned only with the possibility of the almost miraculous happening of a really big and rich gold-field being discovered. I am as much concerned for possible prospective investors as for the Treasury. It is quite obvious that, if we miraculously discovered a rich new field capable of producing 2,000,000 or 3,000,000 ounces of gold a year, we should be compelled to pass amending legislation to terminate the bounty; because no government could possibly stand up to a bounty involving the payment of £2,000,000 or £3,000,000 a year. But to . terminate the bounty would be to commit a breach of a contract, the making of which may have attracted investors. The payment of £500,000 in any one year would not be in any way niggardly; it is substantially in excess of the sum paid to any other industry by way of a bounty. I believe that in one year the wine bounty exceeded £300,000 ; but that was a record payment. The committee would be well advised to limit the amount to £500,000, which would mean payment of the bounty until the present output had been doubled, and would then represent 10s. an ounce. I trust that the Minister will give serious consideration to the amendment.

The TEMPORARY CHAIRMAN (Mr Chifley:

– I rule that the amendment is not in order, on the ground that it specifies the amount to be appropriated, and because any such appropriation can only be made after a message from the Governor-General recommending it. Provision in that direction has already been made by clause 4.

Amendment (by Mr. Forde) agreed to-

That the following sub-clause be added: - “(4.) The average number of ounces of fine gold produced annually during the years specified in the last preceding subsection shall, for the purposes of this section, be determined by the Minister from information furnished by the Commonwealth Statistician and shall be notified in the’ Gazette.”

Mr BAYLEY:
Oxley

.- I hope that the Minister will give serious consideration to the bearing, that exchange may have upon the gold-mining industry. We all know that at the present time the exchange rate is in the vicinity of 9½ per cent. I have no hesitation in saying that if the exchange were unpegged it would increase to at least 20 per cent. No one can tell what it may be at any future date. Should it reach 25 per cent., it would be equivalent to a bounty of £1 an ounce upon all gold mined in Australia. I hope that the Minister will take some action to protect the finances of this country in the event of an abnormal increase in the exchange rate.

Mr FORDE:
Assistant Minister for Trade and Customs · Capricornia · ALP

– During my second-reading speech I said, that in the event of an abnormal increase in the exchange rate the Government reserved the right to review the rate of bounty.

Mr Bayley:

– Is that provided in the bill?

Mr FORDE:

– I am adopting the practice that was adopted by the late Mr. Pratten, when Minister for Trade and Customs. When he introduced the Wine Bounty Bill he said that, in the event of any substantial increase in the exchange rate, the Government reserved the right to review the rate of bounty. That rate has never been reviewed in the light of the subsequent increase in the exchange rate, and I think that it would be unfair to discriminate at this moment between that legislation and the Gold Bounty Bill.

Mr Paterson:

– The late Mr. Pratten said that the Government reserved the right to. amend the wine bounty in the event of any alteration of the preference given by Great Britain to Australia. He did not refer to the exchange rate. He said that if the preference were improved the bounty might be lowered.

Mr FORDE:

– The late Mr. Pratten also made reference to the exchange rate.

Clause, as amended, agreed to.

Clause 6 agreed to.

Clause 7 -

The persons eligible to receive payment of bounty in respect of gold produced in any year shall be those who are registered goldproducers and who -

have during that year delivered gold to a licensed gold-buyer and received the certificate therefor required by this act ; or

Mr FORDE:
Assistant Minister for Trade and Customs · Capricornia · ALP

– The Leader of the Opposition (Mr. Latham) said earlier that he intended to move an amendment to paragraph a of this clause. He suggested that the word “ sold “ should be substituted for the word “ delivered “. I have considered his suggestion and decided to accept an amendment to that effect, because the Government desires that the bill shall be as watertight as possible. I move -

That the word “delivered”, paragraph (a), be omitted with a view to insert in lieu thereof the word “ sold “.

Amendment agreed to.

Clause, as amended, agreed to.

Clauses 8 and 9 consequentially amended and, as amended, agreed to.

Clause 10 agreed to.

Clause 11 consequentially amended and, as amended, agreed to.

Clause 12 (Audit).

Mr WHITE:
Balaclava

.- The gold-buyers who are at present established - there is one in my electorate who has been in business for 50 years - desire to know whether, if this legislation is passed, they may still buy gold. They point out that they are buyers from small sellers of gold, and that they make up the gold for dental purposes. Under this legislation there is the danger that that business may drift to the mint, because the actual checking of gold will take place there.

Mr FORDE:
Assistant Minister for Trade and Customs · Capricornia · ALP

. - A licensed gold-buyer can buy gold from any of the persons stipulated in clause 3 of the bill. He is, of course, covered by the State. The States legislation license gold-buyers, and this legislation will inflict no hardship upon them.

Clause agreed to.

Clauses 13 to 19 agreed to.

The Schedule-

Mr FORDE:
Assistant Minister for Trade and Customs · Capricornia · ALP

.- I move-

That the words “ all gold-bearing ore in my/our mine the value of which when worked independently and “, paragraph a, be omitted with a view to insert in lieu thereof the words “ low grade gold-bearing ore in my /our mine the value of which when worked independently of other ores “.

Paragraph a as at present drafted is somewhat ambiguous, and to. remove any doubt as to its meaning this amendment is being inserted. Such an undertaking is necessary, otherwise producers may, in order to secure the bounty, be tempted to pick the eyes out of the lodes, and to leave the low-grade ores untouched. If the whole lode were averaged it might not pay working expenses, even with the bounty. Therefore, any lode which, being worked independently, would not pay expenses, could be left out. To assure that the maximum amount of ore will be taken out of the mine, the department will, wherever necessary, invoke the aid of the officials of the States mines departments in policing this provision, and seeing that it is carried out.

Amendment agreed to.

Mr FORDE:
Assistant Minister for Trade and Customs · Capricornia · ALP

– I move -

That at the end of the Schedule the following foot-note be inserted: - “Note. - Paragraphs (a) and (6) to be omitted in the case of producers of alluvial gold.”

Paragraphs a and b of the schedule are applicable to producers of gold-bearing ore, and are not intended to apply to producers of alluvial gold. The amendment makes the position clear. ‘

Mr LATHAM:
Kooyong

.- I suppose that the Assistant Minister is satisfied that every gold-bearing proposition may be described as a mine. For instance, are hydraulic sluicing plants and the like to be taken as mines?

Mr Riordan:

– They are goldproducing if ore is present.

Mr LATHAM:

– I suggest that consideration might be given to that matter.

Mr Forde:

– I promise the honorable member that I shall consider it.

Amendment agreed to.

Schedule, as amended, agreed to.

Preamble and title agreed to.

Bill reported with amendments.

Motion (by Mr. Forde) agreed to -

That the bill be recommitted for the reconsideration of Clause 3.

In committee (Recommittal).

Clause 3 consequentially amended, and as amended, agreed to.

Bill reported with further amendments ; reports - by leave - adopted.

Bill - by leave - read a third time.

page 1386

PORT AUGUSTA TO RED HILL RAILWAY BILL

Second Reading

Debate resumed from the 9th December (vide page 1172), on motion by Mr. Forde -

That the bill be now read a second time.

Mr PATERSON:
Gippsland

– On a previous occasion the House had an opportunity to consider the building of a standard gauge railway from Red Hill to Port Augusta. In 1927 the honorable member for Echuca (Mr. Hill) who was at that time Minister for Works and Railways, introduced a bill to authorize the construction of this line, but at about that time the loan market became unfavorable, and because of the difficulty of raising money at reasonable rates of interest, the project was postponed. To-day that difficulty is very much greater, and the first question that occurs to the minds of those who are considering this bill is where and how is the Government to obtain the money with which to carry out the work? I hope that the Minister will enlighten the House on that subject when he replies to the debate on the second reading. I notice that the maximum cost of the railway is to be £735,000. In addition, the Minister stated that an expenditure of £104,000 on rolling-stock will be necessary. These are the same amounts as were estimated more than three years ago. In the interval the prices of iron and steel have declined very much all over the world. I do not know that they have fallen to the same extent in Australia, but surely this market must reflect the values in other countries. Steel rails are obtainable in most parts of the world at much lower prices than in 1927. The cost of living has dropped, and the basic wage has been reduced proportionately. Notwithstanding these changes, the Government adheres to the estimates of cost made three years ago.

Mr Lacey:

– That makes the presentestimate very safe.

Mr PATERSON:

– Having regard to the tremendous decline in the prices of iron and steel overseas, the reduction in the cost of living, and the slump in the returns from primary production, the Government would be wise to reduce the maximum amount to be spent on this project. The prices of wool, meat, wheat, fruit, and base metals have fallen considerably. Doubtless some recovery will take place, but he would be a bold man who would anticipate a return to the rates we enjoyed a few years ago. Most of us would be happy to think that within the next few years the prices of primary products will recover to threefourths of their former level. If a new permanently lower level of world values for these goods is to be established, freights must come down, and the costs of general services must fall in conformity. Construction costs, with the attendant interest charges, must shrink, too. Yet the Government is proposing to construct the line at an estimated maximum expenditure exactly the same as that calculated three years ago when conditions were vastly different. Recently, the Loan Council decided that future loan expenditure must be confined to works which are likely to be fully reproductive. Whilst I admit everything which the Minister said regarding the desirability of shortening the route between Adelaide and Port Augusta, saving time and haulage, and advancing another step towards a uniform gauge on the transcontinental railway - indeed, I advanced all those arguments myself in a previous Parliament - we must examine the reproductive prospects of the proposal in the light of existing circumstances. This railway from Red Hill to Port Augusta is to cost -a maximum amount of £735,000, and rollingstock £104,250, or a total of £839,250. In addition, if the agreement is to be fully carried out, the Commonwealth is to spend £380,000 on the provision of a third rail between Red Hill and Adelaide so that the transcontinental trains may run direct into the city on a 4 ft. 8^ in. gauge. Altogether this proposal involves a co3t to the Commonwealth qf £1,220,000. On top of that the South -Australian Government is required, under the agree- ment, to provide whatever is’ necessary to lay a third rail from Red Hill northwards to a point opposite Port Pirie, so that there will be a continuous railway on the 5-ft. 3-in. gauge from Adelaide to that point. [Quorum formed.] The cost of this third rail is to be borne by the State, and is estimated at £75,000. This brings the total cost to Commonwealth and State up to nearly £1,300,000. Disregarding for the moment the State liability, the interest charges on the Commonwealth expenditure of £1,220,000, at 5£ per cent., will be £78,000. We are told by the Minister that the surplus of earnings above working expenses will be about £37,000, or £41,000 less than is required to meet the interest bill. The Minister stated that this loss will be offset to the extent of £35,000 by additional business on the transcontinental railway, and that the deficit still remaining will . be more than wiped out by the increased traffic on the new tine from the Oodnadatta to Alice Springs railway. He said that the traffic coming south from the Alice Springs line which was formerly carried on the South Australian 3-ft. 6-in. line to the east of Flinders Range would be diverted to the new standardgauge railway, and in that way the Commonwealth line would earn sufficient to wipe out the remaining portion of the loss, and leave a small surplus. I remind the House that whatever gain is made by the Commonwealth railway from the diversion of traffic from the State railway will be at the expense of South Australia. That will not benefit the general taxpayer; what he will gain as a Commonwealth taxpayer he will lose as a State taxpayer. We are told that the estimates of revenue and the working expenses are based on the carriage of goods in 1924, when prices were very much higher than they are today, and when railway business was presumably better. If Australia is ‘in for a period of permanently low:er prices for primary products, freights must undoubtedly fall. Therefore, the estimate which the. Minister described as conservative is really optimistic.

More than one-third of the total cost of £1,300,000 involved in the Bruce-Gunn agreement is represented by the third rail proposal. It seems to me to be absolutely indefensible to spend £445,000-^380,000 of Commonwealth money, and £75,000 of State money - on laying a third rail from Red Hill to Adelaide, more especially as South Australia has been rendered almost bankrupt by its enormous overhead railway costs. A large amount of the capital value of the State railways does not appear to be represented by actual assets at the present time. There has been no gradual writing down of capital values, so that the book values of our railways are shown at a much higher figure to-day than they should be. If this third-rail proposal is carried out according to the agreement, a further £445,000 will be added to that part of the capital cost of Australian railways which is not represented by real assets.

Mr Lacey:

– Where does it say in the bill that the third-rail proposition is to be gone on with?

Mr PATERSON:

– I admit that it is not in the bill, but the Minister had a good deal to say about it. If we commit ourselves to the construction of the railway, the third-rail proposition will come into a good deal of prominence. The agreement conferred upon the Commonwealth Government a permissive right to lay a third rail. It may be that the Government does not intend to go on with that proposal, but the impression I gained from the Minister’s speech was that the Government intended to adhere to the agreement, and proceed, at some future date, with the laying of the third rail. The reason for the birth of the third-rail proposal is that both Commonwealth and State railway authorities have considered only how their own traffic will be affected, forgetting that practically the same set of taxpayers will he affected in either case if unnecessary overhead costs are piled up. I believe that if this problem of providing a direct standard gauge railway between Adelaide and Port Augusta were regarded from the Australian point of view, as distinct from that of the Commonwealth or the State of South Australia, we could dispense altogether with the third rail except between Salisbury and Adelaide. I put this proposal forward about twelve months ago, and the honorable member for Grey (Mr. Lacey) did not then appear to agree with me as he does now.

Mr Lacey:

– I said that the acceptance of such a proposal would upset the previous’ arrangement, and give the Butler Government an opportunity of getting out of an agreement of which it disapproved.

Mr PATERSON:

– I am glad, at any rate, that the honorable member for Grey now approves of dispensing with the third rail, except on the short length of 13 miles between Adelaide and Salisbury. At a conservative estimate, that should result in a saving of £300^000. I believe as well that at least 15 per cent, could be saved on the original estimate for the construction of the line. The price of iron and steel has fallen, and the basic wage has been reduced in South Australia as well as in other places. I do not know to what extent the price of steel rails has been reduced in Australia, but in other countries it has come down considerably. It has not been made clear whether the Government intends to do this work by day labour, or whether it proposes to call tenders; but if -it is doing the job itself it should make the best possible deal when buying rails. I presume that the rails will be obtained from Newcastle, and the Government should say to the Newcastle Iron and Steel Company, “ We propose to build u new line, partly to provide work for the unemployed. We shall go on with the work only if we can get it done for substantially less than it would have cost three years ago. We want a cut on the price .of steel rails; what are you prepared to quote?” If a similar percentage reduction could be obtained on new rolling stock, a further £100,000 would be saved which, with, the other saving I have mentioned, would enable the line to be built at a cost that would give it a chance, at some time in the future, of earning interest on the cost of construction. If the line, with rolling-stock and third rail, cost . £1,300,000, as estimated, I do not think that it would ever pay its way. It would be better for us to drop the whole thing, than proceed with the third rail agreement.

What is the nature of the agreement which we entered into with South Australia? In the first place, we undertook to build a line from Oodnadatta to Alice

Springs. That has been done. Then the Commonwealth obtained from the State of South Australia a permissive right to build a line from Red Hill to Port Augusta, South Australia, and to lay- a third rail at our expense from Red Hill to . Adelaide. The cost of this third rail was estimated at £380,000. The Commonwealth was to lay a third rail on the new track, at South Australia’s expense, to a point opposite Port Pirie, which is about two miles distant from where, the new line will run. The object of the third rail south of Red Hill was to enable our trans- Australian trains to run into Adelaide, instead of having to stop at, Red? Hill, at which place the break of gauge would otherwise occur. The third rail north of Red Hill, giving railway connexion on a 5-ft. 3-in. gauge between Red Hill and Port Pirie was to be laid so that South Australia could retain for her own railway system the traffic between Port Pirie and Adelaide. Not one ton of extra traffic would be carried as a result of all this work, but the Commonwealth and State traffic would be kept within watertight compartments. If a purely Australian view is taken it should be possible to do the job by laying a third rail over only thirteen miles, instead of 113. This proposal was placed before the Butler Government in South Australia just before it went out of office, and it was pointed out that it would be possible to avoid those complications usually created by laying down a 4-ft. 8-J-in. gauge Hae alongside others of a different gauge. It can be understood that inconvenience would be caused if there were branch lines of 5-ft. 3-in. gauge joined with a trunk line of 4-ft. 8^-in. gauge, because the traffic from the branch lines could not be carried over the trunk line. In this instance, however, that difficulty would npt arise because there is another line almost parallel to the Red Hill to Salisbury line. It runs through Brinkworth, Balaklava, Hamley Bridge, Gawler, and on to Adelaide. The Red Hill line has been built only recently, and before that the traffic between Wakefield and Adelaide travelled over the line I have mentioned-

Mr Lacey:

– It still goes that way.

Mr PATERSON:

– Well, that strengthens my argument. South Australia, is in the almost unique position of having two or three lines which run almost parallel to one another north of Gawler, and then converge on Adelaide.

If South Australia felt that the adoption of my proposal would mean that she would lose certain traffic, which at present passes over her lines, it would be preferable for the Commonwealth Government to compensate her for the loss if thereby the expenditure of a huge amount of money on a third rail proposition could be avoided. The expenditure of nearly £500,000 by the Commonwealth and State Governments on an unnecessary third rail provision, in a State already almost insolvent in consequence of its enormous railway expenditure, could not possibly be justified. In my opinion we could reduce the capital cost of this line to nearly twothirds of the original estimate, and still achieve practically the same result. If to the £300,000 saving which I have already shown to be possible, we add a saving of 15 per cent., or £126,000, on the estimate prepared three years ago for track and rolling-stock - and this saving should he possible in view of the fact that wages and iron and steel will involve much less expense now than at that time - we should be able to save not less than £426,000.

The only other alternative to my proposition is that the scheme should bo carried no further than this bill proposes. In other words, Red Hill could be made the terminus of the transcontinental line. This would mean, of course, that that would be a break of gauge station. There are certain objections to this course. The expenditure of a considerable sum of money on the Red Hill station would be needed to convert it to a break of gauge station. Provision would have to be made for refreshments, and other conveniences would have to be provided. Another objection would be that South Australia would still presumably be at the expense of putting in a third rail from Red Hill to Port Pirie. Looking at the subject from every point of view, it seems to me that the proposal to cut out the third rail, except for the 13 miles that I have mentioned, and to close up the 5 feet 3 inch track between Red Hill and Salisbury to a 4-ft. 84-in. gauge line would be much the better proposition from both the Commonwealth and State view-points. I therefore ask the Minister to have the matter thoroughly investigated before any third rail project, other than the 13 mile section, is carried out. Any necessary amendment of what I might call the third rail portion of the agreement between the Commonwealth and South Australia should be made before the Port Augusta to Red Hill line is constructed, otherwise the Commonwealth might be told that it brought the line as far as Red Hill, and if it did not like to carry out the third rail agreement there must be a break of gauge terminal at Red Hill, and no access for transcontinental trains to Adelaide.The proper time to approach South Aus-, tralia on this matter would be before the Port Augusta to Red Hill line is constructed.

Lastly, I contend that the members of the Opposition are entitled to know where the money is to be obtained from to build this line. Is it to be raised by what I might call orthodox methods, or are unorthodox methods to be used in providing it? I quite realize that it is desirable to provide as much employment as possible of a useful character for men who are to-day out of work. It is certainly much more desirable to give men work than iu pay them a dole. But I should resist the carrying out of this work unless it was shown that it could be done for much less than the estimate of three or four years ago. If the Government desires the support of the Opposition for this project, it must indicate that a substantial cut can be made in the cost of the undertaking.

Mr Fenton:

– It may be shown when tenders are called for, that the cost will be much lower than the estimate to which the honorable member has referred.

Mr PATERSON:

– It would be much better to provide in the bill that the work should be carried out only if the cost of it is below a certain figure. I think the line should be built for about £600,000 if the unnecessary third rail provision is deleted. [Quorum formed.]

Mr LACEY:
Grey

.- The honorable member for Gippsland (Mr. Paterson) could not consistently oppose this bill, but he has done his best to damn it with faint praise. I regret that some of the statements he made in the course of his speech were not quite in accordance with the facts. He said, for instance, that the Bruce-Page Government was prevented from proceeding with the construction of the line because of the loan position. That, I submit, is not accurate. After the previous bill for building thi3 line was introduced an election intervened. It was that, and not the loan position, which prevented the Government from carrying out the work. If that is not so, then the honorable member, when Minister for Markets and Transport in the previous Government, misled me in answering certain questions that I asked him.

Mr Paterson:

– I said on the occasion when the honorable member moved a motion for the adjournment of the House in order to discuss this question that the Government could not proceed with the building of the line ‘because it could not find the money to pay for the work.

Mr LACEY:

– The honorable member is in a tangle. He seems to have forgotten that it was the honorable member for Echuca (Mr. Hill) and not himself who introduced the bill.

The honorable member must realize that the cost of the undertaking will be determined not by an estimate prepared years ago, but by competitive tenders. It would be quite easy for a Minister to mislead honorable members as to the cost of the line. An estimate could be submitted far in excess of what it was generally believed the line would cost. It frequently happens that public works cost more than the original estimate. On the other hand, it is likely that in this case the cost will be less than the estimate.

I am not at all sure that the honorable member was in order in discussing at such great length the third rail provision of the agreement made between the Commonwealth and South Australian Governments for the building of this line, for this bill has nothing whatever to do with that aspect of the subject.

Mr Thompson:

– The Acting Minister for Markets and Transport (Mr. Forde) said that it had.

Mr LACEY:

– I disagree with the honorable member.

Mr Thompson:

– At any rate the third rail is a part of the scheme.

Mr LACEY:

– But it is not mentioned in the bill. With the general proposal of the honorable member for Gippsland, that the third rail project should be abandoned as far as possible, I am in hearty accord. I think his contentions in that respect are sound. I advise him to refer to the speech I made when the previous bill was before the House.

Speaking generally I must admit that under existing conditions the construction of almost any new railway line must be regarded as a doubtful proposition. I realize that owing to falling revenue, for which the construction of modern roads and motor transport is largely responsible, new railway lines are doubtful propositions; but in the case of the Port Augusta to Red Hill line, the circumstances are exceptional. This bill should not be regarded as controversial. It should be accepted by honorable members generally.

As the honorable member for Gippsland (Mr. Paterson) has explained, the measure is founded upon the Bruce-Gunn agreement for the construction of the north-south railway from Oodnadatta to Alice Springs, and a permissive right to the Commonwealth to build a railway from Red Hill to Port Augusta. I desire to supplement what the honorable member for Gippsland has said, and answer some of the criticism that has been offered in South Australia concerning this proposal. For years; South Australia has urged the construction of the north-south railway. It was provided under the Northern Territory Acceptance Act that the Commonwealth should build that line. Mr. Bruce and Mr. Gunn agreed that the work should be put in hand by the Commonwealth, and South Australia thus secured what it had been fighting for since 1910. Certain persons in South Australia have been contending that the Commonwealth should not build the Port Augusta to Red Hill line. There is nothing in the Northern Territory Acceptance Act to compel the Government to construct it within a given period ; but under the Bruce-Gunn agreement a contract was entered into for its construction. Honorable members on all sides supported that agreement, which was placed before the Commonwealth and South Australian Parliaments for ratification. When the bill came before this Parliament, all parties supported the carrying out of the agreement, and the second and third readings of the bill were agreed to without a division. It was realized that the measure was in conformity with the promise given for the construction of the north-south line. The Public Works Committee investigated this proposal immediately after the ratification of the Bruce-Gunn agreement, and, after an exhaustive inquiry, unanimously recommended that the Commonwealth should build the line from Port Augusta to Red Hill, and generally carry out the agreement in full.No sooner had the Public Works Committee dealt with the matter than certain persons in South Australia, including the then Premier, Mr. Butler, claimed that the agreement was invalid, because the construction of the railway had not been proceeded with within a given period. But I contend that the validity of the agreement is undoubted. When it was first suggested that the agreement was invalid, a legal opinion was obtained by the Government of the day.

Mr Hill:

– I do not think that the validity of the agreement could be questioned.

Mr LACEY:

– Members of the public in South Australia have written to the press on the subject; but clause 3 of the agreement states -

The State hereby consents to the construction and carrying out by the Commonwealth of the railways and railway works and operations which the Commonwealth undertakes by the agreement to construct and carry out: Provided that if the construction of the railway from Port Augusta to Red Hill referred to in the agreement is not commenced by the Commonwealth within such period (being not less than three years from the date of the commencement of this act) as is notified to the Prime Minister of the Commonwealth by the Premier of the State within twelve months after the said commencement, the consent given by this section shall as regards such railway be null and void.

The Commonwealth Crown Solicitor, Mr. W. H. Sharwood, furnished the fol lowing opinion on the matter on the 25th October, 1927:-

The notification referred to may have become necessary for either of two reasons -

the construction of the railway may possibly have been commenced immediately after the act was passed ; or

there may have been no desire on the part of the Premier to fix any limitation of time for the commencement of the construction.

I think it is clear beyond doubt that, if the construction had actually been commenced forthwith after the passing of the act, the proviso would haveimmediately become inoperative, because the contingency contemplated thereby would have become impossible. The matter might, perhaps, be tested by assuming the Commonwealth now commenced the construction and the State challenged that action. The State, to succeed, would have to allege and prove that, though it had given its consent, that consent had been rendered null and void because the Commonwealth did not commence the construction within the period notified by the Premier to the Prime Minister within twelve months after the commencement of the act. Obviously the State could not prove this allegation, and would fail. In my opinion the Commonwealth has now a full and unqualified consent by the State to the construction of the railway at any time, and further legislation by the State is unnecessary.

In the first part of the bill are several clauses, which provide that the Commonwealth Government must make certain of its legal position in this matter. The inference is that State legislation may be necessary; but I contend that these clauses should be interpreted to mean that, if it is proved beyond doubt that no further State legislation is necessary, the Commonwealth can proceed with the construction of the line immediately. The Commonwealth has carried out the first part of the agreement, and the legal opinion shows that the Commonwealth can give effect to the permissive part of the agreement without any further legislation being passed by South Australia. The honorable member for Gippsland (Mr. Paterson) mentioned the subject of a third rail. It is quite a workable proposition to provide a 4-ft. 8½-in. gauge line from Salisbury to Red Hill. The honorable member mentioned this matter when the South Australia Grant Bill was under consideration. I then opposed his suggestion, and claimed that the point raised by him should not be considered when dealing with that bill. I also pointed out that, if we departed fromthe terms of the agreement; we should he giving the former Premier of South Australia, Mr. Butler, an opportunity to defeat it. He had questioned its validity ; and he would have had the opportunity to give effect to the proposal to extend the 5-ft. 3-in. gauge line from Red Hill to Port Augusta, the alternative being to continue to use the existing circuitous route. The best proposition would be a 4-ft. 8^-in. railway from Port Augusta to Salisbury, and a third rail from Salisbury to Adelaide. The junctions in between would not be affected. I contend, however, that if we agree to this proposal public opinion will demand the conversion of the 5-ft. 3-in. gauge line from Red Hill to Adelaide to a gauge of 4 ft. 8£ in. There would be no necessity to alter any of the platforms.

The honorable member for Gippsland (Mr. Paterson) referred to the estimated cost of constructing this line, and questioned whether it would pay interest and working expenses. Those estimates were made some time ago, but they have since been checked over very carefully. It is regarded as certain that, if constructed, the line will not only pay working expenses and interest, but also show a profit of £6,000 a year.

Mr HILL:
ECHUCA, VICTORIA · VFU; CP from 1920

– I do not think it will show a profit unless it is continued to Adelaide.

Mr LACEY:

– I do not anticipate that it will stop at Red Hill for very long. I have been agitating for the building of this line for five years. I believe that honorable members will give mc credit for being a consistent advocate of it. Immediately construction is commenced there will be an agitation to make the gauge from Red Hill to Adelaide 4 ft. Si in.; otherwise it could not bc used for intra-state traffic and traffic between Snowtown and Port Pirie. This line will confer distinct advantages on the State as well as on the Commonwealth, but a break of gauge will nullify those advantages within the State. The responsible officers anticipate that, immediately the line is built, it will give a fillip to the trans-Australian trade. That line cost approximately £7,000,000, and the loss upon it last year was £30,000.

Mr Paterson:

– On working expenses only.

Mr LACEY:

– Everything possible should be done to improve the traffic over it. The threat has been made that in the near future two instead of three trains a week will be run over it. That may enable a certain amount of retrenchment to be effected among Commonwealth railway employees, but the administrative and overhead costs will be just as great and the loss probably greater. When we reached Port Augusta on one occasion upon my return from Western Australia, a canvasser for passengers by motor from Port Augusta to Adelaide went through the dining-car while the passengers were having breakfast, and to my certain knowledge four or, five of those who had taken tickets through to Adelaide left the train at Port Augusta and paid an additional sum to complete the journey by motor. Such an incident is one of the worst advertisements that any railway could have. I have since heard that that was not ‘an isolated case, but that it is a common practice for passengers to leave the train at Port Augusta and travel to Adelaide by motor rather than complete the journey over the route that the train follows. That route must be regarded as most objectionable when there are persons who will pay an additional £2 to avoid travelling over it. The construction of the line from Red Hill to Port Augusta will enable passengers to have breakfast at Red Hill, and even with a break of gauge to be in Adelaide in time for lunch. No motor bus service would be able to compete with it. If this project was expedited it would be a matter of not reducing, but increasing the number of trains run weekly over the transcontinental line.

For some considerable time there was an agitation for the building of a line from Port Augusta to Broken Hill, the proposal being that the whole of the trans-Australian traffic should be taken over that route to Sydney. The building of this line will render that unnecessary ; and it should be strenuously opposed in South Australia on account of the detrimental effect it would have on the State. If it were built, there would be an agitation for an additional line from Port Pirie to Port Augusta, which would carry northward the whole of the Broken Hill and Port Pirie traffic, detrimentally affecting the middle portion of the

State. Such an agitation will never arise if. this line is constructed.

There is another matter that demands the serious consideration of the Government. The Bruce-Page Government entered into an agreement to subsidize Westralian Airways Limited, and last year the subsidy amounted to £39,522. The company must have been paid much more than that, because of the extra service which it has rendered in carrying mails. If possible, that agreement should be cancelled, or some arrangement be made under which Westralian -Airways Limited would fly their planes over some other route. The existing competition with the transcontinental railway is most unfair. From Perth to Derby, a distance of 1,455 miles, the company’s fare is £28 for each passenger, while from Perth to Adelaide, a distance of 1,500, it is only £12. The fare charged for a journey in a Qantas plane from Brisbane to Camooweal, a distance of 1,270 miles, is £31.

Mr Paterson:

– It should be less from Perth to Derby than from Perth to Adelaide.

Mr LACEY:

– I agree with the honorable member. The reason for the low fare between Perth and Adelaide is that “that service competes with the trans-Australian railway. Huge sums are obtained by the company, and I understand, from press reports, that by Christmas time the two largest planes in Australia will be flying over that route.

Mr Gullett:

– Is the relative absence of passenger traffic on the Derby route a factor in the higher charge?

Mr LACEY:

– I do not think so. I have been informed on the very best authority that Westralian Airways Limited have done some extraordinary things to gain passenger traffic over the route from Adelaide to Perth. They communicated with a firm in England, whose travellers are obliged to travel frequently between Adelaide and Western Australia, advising it of the cost involved on account of the time occupied in travelling by the railway. Westralian Airways Limited is charging the same fare as is charged on the trans-Australian railway, and is urging English firms to instruct their travellers to use the airway- instead of the railway. I have that statement from an authority which cannot be doubted.

There, are many ways in which this Parliament can obviate the competition of the airway with the. east- west railway. The Commonwealth has provided landing grounds, telegraph operators and other facilities for the use of Westralian Airways Limited. Those facilities could be discontinued without breaking the agreement with that company. Its operation should be confined to routes which would be profitable or of some advantage to Australia. For example, an air service from Sydney to Port Augusta would not compete with the railways, and a considerable number of persons would, I think, be prepared to travel over that route. An air service could operate between Alice Springs and Port Darwin. If profitable air routes could be found for Westralian Airways Limited it would be only fair for that company to abandon the east-west route, and forgo the subsidy of £40,000 which is at present being paid to it. If that were done the trans-Australian railway would most likely become a paying proposition. I advocated the construction of the Red Hill to Port Augusta railway for a considerable time, when there was little or no unemployment throughout Australia. To-day any work of a reproductive nature should be carried out in order to provide relief to the unemployed. I have heard many honorable members and persons outside of this chamber deplore the payment of doles. They contend that some service should be rendered in return for money expended on the unemployed. It has been estimated that the work of constructing this railway would employ immediately from 800 to 1,000 men. There are many points at which the railway could he commenced.

Mr Gregory:

– Have the surveys been completed?

Mr LACEY:

– The surveys were completed just after the Public Works Committee inquired into this project. A deviation of the route has since been made, so as not to interfere with agricultural land. That deviation has been made just above Port Pirie, and the route follows the division of swamp and agricultural land. South Australia is at present paying £16,000 a week in sustenance ; but,despite that, the unemployed are not receiving sufficient food. If 1,000 men were put to work immediately on the construction of this railway it would give immediate relief to the unemployed in .South Australia, and alao increase the income tax returns to the State and the Commonwealth. If this legislation is passed only £20,000 will he expended by June next.

Mr Paterson:

– Is the Government prepared to drop the third-rail project north of Salisbury ?-

Mr LACEY:

– I cannot answer for the Government; but the bill does not provide for the laying of a third rail.

Mr Paterson:

– The scheme does.

Mr LACEY:

– I myself would support the construction of a 4-ft. 8^-in. gauge from Salisbury to Port Augusta. As this is a Commonwealth railway, the Commonwealth gauge of 4 ft. 8^-in. should be adopted. I support this bill, because it will afford to the people of South Australia the facilities to which they are entitled.

Mr HAWKER:
Wakefield

.- I do not wish to enter into any special controversy with the honorable member for Grey (Mr. Lacey). He has talked good sense in the greater part of his speech, and in his advocacy of the construction of a railway from Red Hill to Port Augusta he has put up a fine performance in the interests of certain of his constituents and of the unemployed in a section of the north of South Australia. But I shall not support the bill at this juncture, because it entails an extravagance that the country can ill afford, and because there are better ways of spending the money in order to help the unemployed in South Australia. I do not believe that South Australia should obstruct any sensible proposals made by .the Commonwealth to improve the travelling conditions on the east-west railway.- The existing section between Port Augusta and Adelaide is not a good travelling section, and must be a severe handicap to the successful operation of the east-west railway. But the country between Port Augusta and Adelaide, whether the route taken be the Red Hill route or the present main line via Terowie and the Burra, is most extravagantly equipped with railways. Parallel to the proposed route are the coast line and four railway lines within a distance of 50 miles as the crow flies. It is good country, but even in densely populated parts of Europe it is doubtful whether so many railway lines could pay overhead, as well as working, expenses. The country between Red Hill and Port Augusta is served by the coast and two railway lines. There is a rough range of hills between the coast and one of the railways and the country between the range and the coast is neither fertile nor extensive. The amount of traffic which the railway would receive from that part of the country would be practically negligible. There might be a few sheep sent to market,- but they would make no noticeable difference to the traffic on the railway. This proposed line is entirely a through traffic proposition, and, as such, if times were good and booming as they were some years ago, might be a business proposition. The Commonwealth Railways Commissioner, when giving evidence before the Public Works Committee, estimated that the traffic that the proposed railway would bring to the eastwest railway, together with the traffic earned along its own route and from the north-south railway would just about pay interest on the cost of construction. Taking into consideration the shrinking tendency in travelling in all parts of Australia to-day, that estimate could not be realized at the present time. Furthermore, in this extravagantly equipped section of country as regards railways, a good deal of the income which the new railway would secure would be at the expense of the existing State railways. The State railway officers and the State Government probably realized that . to some extent when the agreement was signed some years ago, but they evidently considered that the quid pro quo of punctuality in building a further section of the north-south line would offset the loss in revenue to their own department. But since then the loss on the railways of all States has become much more serious, and that has been particularly so in South Australia. And, although that is a State concern, there can be no doubt that the position of State finances, whether it is South Australia or the States in general, is a matter of serious concern to the Federal Government. The loss on the railways is the most serious item in the deficit in South Australian finances. If that State is to meet its obligations and not default, and the credit and good name, not only of that State, but of all the States and the Commonwealth, is to be upheld, the deficit on the South Australian railways will have to be made up to a considerable extent by a grant from the Commonwealth. Therefore, to build a new line which can pay its own expenses only by robbing traffic from existing railways, is really to bring about a liability which will eventually come back on this Parliament and offset considerably the return which the Commonwealth Railways Commissioner anticipates will be derived from the building of this railway. To proceed with this railway at the present time is not a business proposition. I do not intend to take up the time of the House in discussing the merits of the proposal to lay a third rail from Salisbury to Red Hill, or of the proposal of the Commonwealth to take over the whole of that railway and convert it to a 4-ft. 8½-in. gauge. It is probable that it would be a better proposition to convert the whole of the railway between Port Augusta and Kalgoorlie to a 3-ft. 6-in. gauge so as to have a continuous railway connexion from Broken Hill to Perth and from Perth-to a point in South Australia where the 3-ft. 6-in. gauge ends. If that were done, a large quantity of rolling-stock would be available for use on those railways if they were at any time needed for defence purpose. We doubt a later date and occasion will bring the opportunity to discuss that matter.

In regard to the relief of unemployment in South Australia, more good could be done by making the money proposed to be expended on this railway available to the State Government to proceed with a conservation scheme to safeguard the water supply for the smelting works and town of Port Pirie. Other urgently required water schemes in that State are under consideration; some of those which have been investigated are certain to be both useful and profitable, whilst others will be useful, but not so profitable. All, however, are held up because money is not available. Another important and valuable work for which funds are needed is afforestation. Under the Development and Migration Agree ment, the Imperial and Commonwealth Governments have been helping the State of South Australia in respect of the interest on the money raised to continue afforestation in suitable districts. That work was inquired into very carefully by the Development and Migration Commission and the State authorities, and was approved as likely to return full interest on the money expended. Undoubtedly, afforestation work distributes a large amount of money in wages. If the Commonwealth Government has £700,000 available for expenditure in South Australia, and this extravagant railway project is not adopted, better value will be received, and greater relief afforded the unemployed, by applying the money to water conservation and afforestation. If, however, the railway project is proceeded with at a time when there is difficulty in-financing any scheme, provision should be made, as suggested by the honorable member for Gippsland, for it to be carried out at a cost at least 15 per cent. below the estimate given by the Minister. The reduction should apply to the materials and construction costs generally. There is a very limited prospect of getting cash to help the unemployed, and if £700,000 is to be available to South Australia, it should be made to go as far as possible. I shall vote against the bill in its present form.

Debate (on motion by Mr. Gullett) adjourned.

page 1395

REPRESENTATION BILL

Bill returned from the Senate without amendment.

page 1395

SALES TAX ASSESSMENT BILLS

Bills Nos. 1a, 2a, 3b, and 4a to 9a returned from the Senate without amendment.

page 1395

ADJOURNMENT

Sales Tax on Bags-Duration of Session.

Motion (by Mr. Penton) proposed -

That the House do now adjourn.

Mr BELL:
Darwin

.- Although the hour is late I desire to bring under the notice of the House the demand of the Commissioner of Taxation for sales tax on bags used as containers for chaff. On the 25th of November, I asked the Acting Treasurer (Mr. Lyons) -

Whether it is true that, in accordance with an interpretation given by the Commissioner of Taxation, sales tax lias been demanded upon bags used as containers for chaff? If so, is such interpretation consistent with the assurance given by the Treasurer when the Sales Tax Bill was under discussion in this House, that containers used in the marketing of primary produce would not be subject to the sales tax?

The honorable gentleman replied -

The honorable member brought this matter to my notice only a few moments ago. I shall have this complaint investigated.

This morning I again asked the Acting Treasurer if he could inform me whether the sales tax was being charged upon bags used for the marketing of chaff. He replied, in effect, that the tax was charged on imported bags used for the marketing of chaff, and he had no knowledge of any assurance by the Prime Minister that containers used for the marketing of primary produce would be exempt. Such an assurance was given by the Prime Minister (Mr. Scullin), as Treasurer, when the sales tax bills were before the House. In reply to a question by the honorable member for Gippsland (Mr. Paterson) on the 21st July last -

Whether “ sundry other crops “, mentioned in the budget statement, as proposed to be exempt from sales tax, will include chaff and oats, and whether woolpacks and bran bags will be similarly exempt? the Prime Minister replied through the Acting Treasurer (Mr. Lyons) -

The sales tax will not be payable in respect of sales of chaff and oats, and similar foods for animals, or on wool-packs and bags and sacks used for the purpose of marketing primary products and flour and bran.

On the 28th July, when the honorable member for Barker (Mr. M. Cameron) moved for the reduction of an item by 10s. as an instruction that the primage duty should not be imposed upon cornsacks, wool-sacks, chaff, onion and potato sacks, and similar jute goods or raw materials for the manufacture of such goods or of binder twine, the Prime Minister said -

We have placed on the exemption list in connexion with the sales tax all these things, as well as others affecting the primary industries, and we hope that in a few months’ time, if the revenue comes up to expectations, and there is an upward movement, to increase thu number of exemptions.

Those assurances are very definite. My questions to the Acting Treasurer were based on a newspaper report that the Commissioner of Taxation has decided that bags used as containers for chaff are subject to the tax, because chaff is processed. As the’ chaff is not taxable, surely the container should not be, especially as bags containing wheat and other primary products are exempt. I regret having had to ventilate this matter in the absence of the Acting Treasurer (Mr. Lyons), but I may not have another opportunity to do so before the Christmas adjournment. The matter is of great importance to many primary producers. It is most unsatisfactory to honorable members, after they have received a definite assurance from the Minister in charge of these taxation measures that certain items would be exempt, to learn that the Commissioner of Taxation has decided otherwise. For this reason I hope that the Acting Prime Minister (Mr. Fenton) will have the matter investigated, and see that the assurances given by the Treasurer when introducing the bills are honoured.

Mr PROWSE:
Forrest

.- There seems to me to be no reason why Parliament should not be able to conclude the business of the session to-morrow, so as to enable members from distant parts of Australia to return to their homes for Christmas. Members have never before been required to remain in the capital over Christmas, and I do not think that it can be claimed that the business before Parliament is sufficiently voluminous to warrant its being’ done on this occasion. The Government has certainly not hurried itself up to the present. We were called together on the 30th October, and Parliament immediately adjourned for a week, during which time members from different States were kept away from their homes and their electorates. I suppose the Acting Prime Minister and the members of his Cabinet know that Christmas Day falls on the 25th of December. It should be possible, even at the cost of an all-night sitting or so, to complete the business of the session in time to allow members to get home for Christmas.

Mr FENTON:
Acting Prime Minister · Maribyrnong · ALP

– In reply to the honorable member for Darwin (Mr. Bell)-

Mr Bayley:

– I call attention to the state of the House.

Mr FENTON:

– Not on the adjournment, surely.

Mr Bayley:

– Very well, then, I shall not insist.

Mr SPEAKER:
Hon. Norman Makin

Mr.FENTON. - It seems to me that the honorable member for Darwin put up a very good case, and I shall have the matter investigated by officers of the Treasury with a view to getting the anomaly corrected if possible.

I assure the honorable member for Forrest (Mr. Prowse) that my personal inclination is to allow him to go home to his Christmas dinner. The Senate is having an all-night sitting in an endeavour to clear up the business before it.

Mr Bernard Corser:

– We could let them have the Port Augusta to Red Hill Railway Bill to-night.

Mr FENTON:

-I understand that that bill is being held over for discussion to-morrow, because the proposed wheat bill will not be ready for presentation until to-morrow afternoon. The details of the bill were only settled a few hours ago, and after that it had to be drafted and prepared for the printer. I understand that the parties in the House are fairly well agreed to allow the Port Augusta to Red Hill Railway Bill to be disposed of to-morrow morning. I bad hoped to be able to inform honorable members that we would adjourn to-morrow afternoon at the usual hour, and resume again on Tuesday, but we are governed by what happens is another place. We are prepared to meet the convenience of honorable members, and try to finish to-morrow night.

Mr Latham:

– That is very indefinite. Can we not have a straight-out statement?

Mr FENTON:

– So far as I am concerned we are prepared to adjourn tomorrow, and meet again on Tuesday at the usual hour.

Question resolved in the affirmative.

House adjourned at 11.36 p.m.

Cite as: Australia, House of Representatives, Debates, 11 December 1930, viewed 22 October 2017, <http://historichansard.net/hofreps/1930/19301211_reps_12_127/>.