12th Parliament · 1st Session
Mr. Speaker (Hon. Norman Makin) took the chair at 2.30 p.m., and offered prayers.
Message reported transmitting Estimates of Revenue and Expenditure for the year ending 30th June, 1932, and recommending appropriation accordingly.
Ordered to be printed, and referred to Committee of Supply.
– by leave - I have this day sent a telegram to the Premier of New South’ Wales regarding the financial necessities of his State and his application to the Commonwealth for assistance, and in anticipation of questions on the subject I shall read it to the House -
I desire to convey to you the following information which summarizes the attitude of the Loan Council to your request that certain moneys be provided to meet the cash requirements of New South Wales during July, August, and September. Before Loan Council could approach banks for issue of treasury-bills on behalf of Government of New South Wales following action by Government of New South Wales would be necessary: - (1) New South Wales to agree to assume responsibility for payment of interest on its public debt; (2) New South Wales to re-join Loan Council; (3) New South Wales to pass and bring into operation legislation giving effect to decisions of Premiers Conference including reductions in expenditure. I am proposing to all States that Loan Council meeting be held on 5th August when question of requirements of States to meet deficits, New South Wales loan of £4,000,000 maturing 10th August, and loan programmes of States for present financial year would be considered.I also propose that Premiers Conference be held about 10th August when questions relating to rates of interest on bank deposits and advances, financial assistance by banks to governments and industry during present financial year, and result of National Conversion Loan would be considered. Representatives of banks would also be asked to attend Premiers Conference during discussions in which they were concerned. I am awaiting further advices from you before again approaching Loan Council.
For Chairman, Loan Council.
I have telegraphed also to the State Treasurers asking them to attend a meeting of the Loan Council on the 5th August ; Buch a meeting is urgently necessary, particularly in view of the fact that a New South Wales loan of £4,000,000 falls due on the 10th August. I have asked the Premiers to meet in conference on the 10th August to deal with the business referred to in my telegram to Mr. Lang.
– Having regard to the fact that the allowances of honorable members and the salaries of public servants have been reduced by 20 per cent, under the Pinancial Emergency Act, has the Minister for Home Affairs considered the advisability of a similar reduction in” the rents of homes and hotel tariffs in Canberra ?
– Cabinet has appointed a sub-committee of four Ministers to report on the application of the relief of interest under the financial rehabilitation plan to capital expenditure at Canberra, and a departmental committee consisting of a representative each of the Public Service Board and the Treasury and the Secretary of the Public Accounts Committee to investigate other phasesof hotel administration in the Federal Capital.
– I ask the Prime Minister whether at the forthcoming meeting of the Loan Council he proposes to suggest any action which would enable the Wheat Advances Act te be brought into operation, or the rendering of assistance to wheat-growers in any other way?
– Aid to wheat-growers will be one of the subjects to be discussed further by the Loan Council and with the representatives of the banks.
– I ask the Prime Minister (1) Has the Government been informed of the negotiations now proceeding in London for the relief of Germany from her financial difficulties arising out of her heavy reparation payments? (2)
Is it a fact that the British Government strongly favourssuch relief, and is agreeable to granting financial assistance to Germany to avert an economic catastrophe in that country? (3) Is Germany the country which, during the world war, was charged with having cut off the breasts of defenceless women, impaling living infants on the points of bayonets, and committing various other atrocities which branded the Germans as a nation of barbarians and placed them outside the pale of European civilization? (4) Is it now admitted that these charges were deliberately concocted war propaganda for the purpose of inciting national hatred of an enemy? (.5) If not, considering that Australia sent over 300,000 of her manhood to the world war, 60,000 of whom made the supreme sacrifice, and expended over £700,000,000’ for war purposes, will the Government protest against financial assistance being rendered to Germany while Australia is left to stagger under a crushing burden of war liabilities, caused by assisting Great Britain in the Great War?
– It is very difficult to answer that question, 80 per cent, of which is propaganda. The Great War ended nearly thirteen years ago, and we hoped that it would end war. This National Parliament should echothat hope. The war taught us many things, but its lessons will not be made more effective by indulgence in bitter recriminations after the lapse of many years. Those of us who follow matters closely know that all the nations that participated in the war indulged in propaganda, and it is common knowledge that a large percentage of that propaganda had no basis of fact. I am glad to be able to say that many of the charges of atrocity levelled by one belligerent against another have been proved to befalse.
The question that I am asked is whether the Commonwealth Government will request Great Britain to refuse to assist Germany out of its financial troubles. My answer is that no message will go from me to that effect. No matter what may have been our differences in the. past, our purpose to-day is to cement a friendship with all nations, and to bring about a world peace.
– Has the Prime Minister any information as to the intention of the Board of Directors of the Commonwealth Bank regarding a reduction : in the salaries of the employees of that “institution, to whom the financial emergency legislation passed by this Parlia- ment does not apply? Are they to share in the general sacrifice?
– I understand that the Bank Board is dealing with that matter. “I do not know whether its deliberations “have been completed.
Closing of Post Offices - Dismissals - Delay in Postal Deliveey - Female Telephonists - Bboadcasting : Censorship and Licence Fees.
– As a result of the Government’s economy campaign, a number of minor post offices are being closed, mainly those classified as “non-official.’’ Will the Postmaster-General (Mr. A. Green) inform the House what system is adopted to determine which post offices shall be closed ?
– The necessity to curtail expenditure in the Postal Department, in common with other departments, has resulted in the closing of a number of minor post offices. Generally speaking, the determining factor is the proximity of a larger post office to that which is closed; in other cases a decline in the business of small post offices has decided the department when making its selections.
– Will the PostmasterGeneral inform the House how many dismissals will be made in his department as a result of the Government’s economy plan, giving the sex and grade of the persons concerned, so that we may know the effect of these proposals?
– No decision has been arrived at as to the number of employees to be dismissed as a result of the Government’s economy plan. It is my desire to keep dismissals at a minimum. I shall advise the honorable member later.
– Is the PostmasterGeneral aware that serious delays have occurred in delivering mail matter posted at Canberra? In one case a copy of a Hansard proof that was posted at Canberra last Saturday morning was not delivered to the addressee in Sydney until yesterday afternoon, more than 72 hours after being posted. Will the honorable gentleman make inquiries into the matter, and take steps to expedite the delivery of mails posted in the Federal Capital?
– I am “unaware that any delay has occurred in the delivery of mail posted at Canberra. I shall take steps to rectify any trouble that may have occurred.
– Will the PostmasterGeneral advise whether it is the intention of his department to retain the services of female telephonists employed at country post offices after they have attained the age of nineteen years?
– In the past, exempt telephonists, who are employed in country districts, have entered the service at the age of sixteen, and retired at the age of nineteen. It was decided no later than yesterday that, owing to the present difficulty of obtaining employment outside the department, these girls shall continue in their present positions for at least another year.
– Will the PostmasterGeneral state whether a broadcast by the Citizens League in Adelaide was prohibited last night by the department, and if so, was it because the Government or its officers anticipated that the Government’s wheat pooling proposals would be criticized by speakers?
– Every B grade station has to place before the department a synopsis of the speeches it proposes to broadcast, so that the department may prevent the dissemination of undesirable matter. In regard to political matters, the practice has been to permit the Prime Minister and the Leader of the Opposition, during the period of an election, or upon other important occasions, to address the people through broadcasting stations. The station in Adelaide to which the honorable member has referred forwarded to the department an outline of the addresses which it proposed to broadcast. I, as Postmaster-General, decided that the station should not he permitted to broadcast the matter proposed, and for the information of honorable members I shall read the programme proposed to be followed. It is as follows : -
Grenfell Price, “Burden of Federation”; Harding Brown, “ Government Business Undertakings and Taxation “ ; Langford, “ Compulsory Wheat Pool and Sugar Embargo “ ; Bagot, “ Menace of Communism - Shall RussiaRule Australia?”.
I presume every honorable member, no matter in what part of the House he sits, will recognize that this was going to be a meeting devoted entirely to political propaganda. I was not prepared to allow it.
– Will the PostmasterGeneral take steps to investigate a programme which it is proposed to broadcast from the Sydney Town Hall tonight under the direction of a body known as the “ New Guard “ - a military organization working for the destruction of the existing social conditions of our people ? This organization of “ brass hats “ proposes to broadcast a programme similar to that just referred to by the Postmaster-General.
– -Inquiries will be made, but I regret that the honorable member did not give me more notice of his question.
– When the PostmasterGeneral is giving consideration to broadcasting programmes, will he take notice of the matter which is broadcast every night from the station 2KY in Sydney, which sends out purely political propaganda on behalf of the Lang Government and the Communist party?
– The officials of my department have not so far found fault with the matter broadcast from this station, and I shall need to have some additional information on the subject before I can accept the honorable member’s interpretation of what is being done.
– In view of the fact that the annual licence fee for owners of radio sets is 24s., of which 8s. is retained by the Government for the purpose, it is said, of building relay stations, and as the Government is not building any relay stations, will the Government or the department consider the reduction of licensing fees; or, will the Minister state whether it is proposed to continue levying 8s. from each licence-holder as a form of general taxation?
– The department has no intention, for the time being, of changing the present arrangement.
– Will the PostmasterGeneral state whether permission was refused the Citizens League of Adelaide to broadcast speeches last night, and whether that refusal was made by the officers of his department, or by the Minister himself?
– It was made by officers of the department, and was endorsed by myself.
– Is the PostmasterGeneral able to say whether the principles indicated in his last reply were observed by his department when the Treasurer (Mr. Theodore) broadcast a speech recently from the Cremorne Theatre, in Brisbane?
– I ask the honorable member to give notice of the question, with details concerning the speech to which he refers. I shall be glad to know what its objects were.
– It dealt with matters of party politics.
– Does the PostmasterGeneral scrutinize the programmes transmitted from 3KZ, the Trades Hall station, in Melbourne, to see if they have a political complexion?
– A general oversight is exercised by the department over all programmes, and no discrimination is shown.
– Are we to understand that no political speeches’ are to be broadcast from “ B “ class stations, except at election time, or, on the’ other hand, thatonly such political speeches as areapproved by the Postmaster-General or his officers are to be broadcast?
– The answer to eachquestion is in the negative.
– Is it thepractice of the Postmaster-General’s Department to require blind persons to pay for wireless licences ?
– No exception is made in the levying of the charge.
– Will the Minister consider the advisability of leaving the chamber, so that this inquisition may be brought to an end.
Question not answered.
Five-Day Working Week
– It is reported in the press that the five-day working week will not apply to the military section of the Defence Department. It does apply to the civil staff of that department, with the result that on Saturdays a skeleton staff of one or two officers is left on duty to attend to urgent matters. Will the Minister for Defence (Mr. Chifley) state whether the scheme operated successfully last Saturday, the first since its inception, and whether the military section of the department was inconvenienced as a result of the absence of the majority of the civil staff?
– I have not yet received a report upon last Saturday’s operations. I shall make inquiries, and advise the honorable member as to the result.
– Will the Prime Minister advise whether the Cabinet will consider possibilities of raising money to assist the unemployed before Parliament goes into recess?
– I have already announced that a Premiers Conference is being convened, and that representatives of the bankers will be present. One of the subjects to be discussed is the provision of money to stimulate industry, and to provide employment.
– Will the Prime Minister advise whether, if a bondholder does not desire to convert under the proposed conversion loan, because he considers that he is the victim of a breach of agreement, he will be able to draw immediately all or part of the face value of his bond in cash ?
– The solution of the problem is not quite so simple as the honorable gentleman suggests. Bondholders are being asked to convert voluntarily, and are given up to a certain date to dissent. When that date has been reached, the Premiers Conference must consider the whole position of the conversion loan.
– Is the Minister for Trade and Customs (Mr. Forde) aware that a large number of municipal councils in New South Wales have passed resolutions calling upon the Federal Government to prohibit the importation into Australia of goods from Russia? Is it the policy of this Government to prohibit the importation of such goods? If so, what steps are being taken by the honorable gentleman’s department to give effect, to that policy?
– It is true that certain representations have been received from municipal councils in New ‘South Wales. Consideration is being given to the advisability of adopting their suggestions,, but up to the present the Government ia not satisfied that it is desirable to do so.
Public Service Salaries
– Is the Prime Minister aware that, when introducing his emergency financial proposals in the Parliament of New South Wales yesterday, the Premier, Mr. Lang, stated that part of his plan was to make £500 the maximum salary payable in the New South Wales Civil Service, the inference being that this was part of the agreement reached at the Premiers Conference in Melbourne? Will the Prime Minister say whether such a proposal was considered at the Premiers Conference?
– Apart from the loan conversion proposal, the agreement: reached at the Premiers Conference was that all governments should reduce their adjustable expenditure by 20 per cent. the mauner in which that was to be donebeing left to individual governments to determine. The representatives of the various governments outlined in general terms the manner in which they proposed to effect reductions, and among the> schemes mentioned was Mr. Lang’s proposal for fixing £500 as a maximum salary in the Civil Service of New South Wales. The proposal was not discussed; it was neither approved nor disapproved. It is for each Parliament to decide what each government shall do by way of reducing expenditure.
– Has the AttorneyGeneral had brought under his notice the serious position in New South Wales, and the possibility of disturbances occurring therebecause of the action of an imported Governor? Will the Minister consider the advisibility of applying the Crimes Act to this gentleman, and deporting him?
– The answer to each question is in the negative.
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Trea surer, upon notice -
Referring to the question on the 5th June lust by the honorable member for Brisbane regarding the cost of collecting the sales tax, is he yet in a position to furnish the information asked for?
– I hope to be in a position to furnish this information to-morrow.
asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the PostmasterGeneral, upon notice -
Will he inform the House what is the con tract price for the present contracts under his department for the carriage of mails -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Trade and Customs, upon notice -
– The answers to the honorable member’s questions are as follow : -
– On the 14th July the honorable member for Darling Downs (Mr. Morgan) asked the Treasurer a question, without notice,egarding a report in the London Daily Herald to the effect that Australia’s oversea indebtedness hadbeen reduced by £21,000,000.
The press report mentioned apparently referred to the reduced amounts owing to the Westminster Bank and the public in London in respect of short-term indebtedness; including overdrafts, of the Australian Governments. As shown in the budget speech, there has been a reduction of £12,900,000 in this indebtedness. It may be added that the total short-term indebtedness of the Australian Governments in London has remained constant since the establishment of the exchange pool in August, 1930. The amount of the short-term debt due to the Westminster Bank and the public in London has beeD reduced by £12,900,000, and the amount due to the Commonwealth Bank and the trading banks of Australia has been increased accordingly.
– The honorable member for Herbert (Mr. Martens) yesterday asked for information as to the number of licences issued under the Transport Workers Act since the 30th June last.
I am now in a position to advise the honorable member that, up to the 17th July, 1931, the number of licences issued at each proclaimed port, and the classes of persons to whom such licences were issued, are as follow: -
The following paper was presented: -
Northern Territory Acceptance Act and Northern Territory (Administration) Act - Health Ordinance (Nuisance Prevention) - Regulations amended.
Motion (by Mr. Scullin) agreed to -
Thathe have leave to bring in a hill for an act to amend section 55 of the Commonwealth Public Service Act 1922-1930.
Bill brought up by Mr. Scullin, and read a first time.
(Nos. 1 and 5) 1931.
.- I move-
That the bills be now read a second time.
Although all the sales tax assessment bills deal with the same subject, it is necessary for legal reasons, to have nine separate measures. The other bills will be ready, I hope, in the course of a few hours, but No. 1 contains practically the substance of all our proposals for exemptions and the other amendments of the law which were announced by the Treasurer in his budget speech. I do not propose to discuss again the general principles of the sales tax ; that matter was fully considered last year. It is proposed under this bill to increase the number of exemptions.
The position with regard to semolina will be explained in detail when the clause concerned is reached in the committee stage. All these bills may be more appropriately discussed in committee than on the second reading.
– But will honorable members be shown any consideration at the committee stage?
– I was about to add that all the requests so far made have been given full consideration, and this House must take the responsibility for any exemptions that it may insist on. If it insists on adding to the list of exemptions, it must consider the necessity for increasing the rate of the sales tax, or, alternately, increasing the rate of the income tax, because the Government sees no other way of obtaining the revenue that would be lost by a serious increase in the number of exemptions.
– Has the Government considered extending the period for the payment of the tax to 30 days?
– I will consider that in committee.
– Has the right honorable gentleman agreed to extend the list of exemptions ?
– I will go into that matter in the course of my present remarks. We have announced important and far-reaching exemptions in the budget speech, and the Treasurer referred to them in introducing the sales tax bills.
These extra exemptions have necessitated the increase of the tax by 1 per cent. Sales of goods for use in Australia and for export to the value of about £600,000,000, have been entirely excluded from the field of this taxation. Sales valued at over £300,000,000 enter this field of taxation, but more than half of them have already been exempted; so that honorable members will recognize that the exempt list is important and worthy of serious consideration. As the list of exemptions has already been announced, honorable members will not wish me to repeat it. Another proposed amendment, as announced in the budget speech, was a provision to cause new exemptions to be operative on and from the 11th July of this year, the date on which it is proposed that the new rate of 6 per cent, shall commence to apply. A provision has been inserted in the bill empowering vendors to recover additional tax due to the increased rate from purchasers in the case of sales which are subject to the increased rate being made in pursuance of contracts entered into before the increase was announced. That provision will enable vendors, except where there is a specifically written contract to the contrary, to recover the increased rate of tax.
– But contracts were previously exempted.
– They are being exempted now. Cases in which the terms of a contract clearly indicate that the increase or reduction of tax has already been taken into account in the agreed price will be excepted from this provision, in order that the vendor or the purchaser, as the case may be, may not get the benefit of the increase or reduction twice. A provision requiring vendors to show sales tax separately on invoices has been included in the bill. It will empower vendors to recover the tax from purchasers. That addition to the law has been asked for by the great majority of traders. There have been some protests against it, but we are now satisfied that we have legal power to do that, although there was some doubt expressed about it last year. We are also satisfied that this ib the more equitable thing to do. The Governments attitude towards this proposal was clearly defined ‘by the Treasurer (Mr. Theodore) in his speech on the sales tax resolutions. Honorable members have heard that speech, and there is no need for me to recapitulate the points contained in it. The Treasurer announced in his speech on the sales tax resolutions these additional exemptions: - Australian wine, bibles, and imports from Norfolk Island. It may be mentioned that the Government has since decided to exempt milk arrowroot biscuits, baby rice biscuits, and baby rusks. Representations were made for the entire exemption of biscuits, but the loss to the revenue would have been over £100,000. Then special representations were made to exclude biscuits purchased for babies’ food, and those biscuits were enumerated, and the Government has agreed to exempt them.
– Adults use the same biscuits.
– If they do, they will enjoy the exemption. Representations have also been made to include in the list of exemptions, blast furnace slag for road-making sold to any public authority charged with . responsibility for the formation or maintenance of public roads or produced by any such authority and applied to its own use.
– What about quarries owned by those public authorities?
– They have already been exempted. They are put on the same level as sand and gravel. That is an important exemption.
– Would public authorities include a municipal tramways trust ?
– I should think so; but I shall give the honorable member a definite reply when the bill is at the committee stage. One item which waa previously on the exempt list, and has now been removed, is semolina, the reason being that semolina is commonly sold under different trade names for use as a breakfast food, and that producers of other commodities, such as rolled oats and crushed wheat, are at a disadvantage in competition with producers of semolina. As we could not add to the list, we removed semolina from it, so as to be fair to the other producers. The honorable member for Balaclarn (Mr. White) raised that question. There is a provision in the schedule for f.l’.e validation of exemptions which have tentatively been allowed. The Treasurer has already explained this provision to the House. The department has been allowing these exemptions, and now we are validating them. There are proposed amendments which have not been previously announced. These are, briefly -
This provision is necessary in order to obviate expense in the case of small traders and manufacturers whose tax does not amount to more than a few shillings. Cases have come under notice in which the cost of providing the security exceeds the amount of tax payable by the taxpayer for the whole year.
Mr.White. - It is left entirely to the Commissioner to decide the amount of the tax.
– We have provided for the abolition of the minimum, which is a clear indication that the Commissioner, in the exercise of his discretion, will not impose hardship.
– He will reduce the amount of the tax.
– Yes, for the smaller traders. There is a provision for the registration of certificate. Then follow these amendments -
It is highly important that this amendment should be made. The experience of the department recently in connexion with the first annual renewals of certificates shows that the annual renewal of certificates will put both the department and the taxpayers annually to tremendous inconvenience and considerable expense. The existing provisions were purely tentative, and were put in as a precautionary stop in the absence of any previous experience in similar legislation. (c)Provision that securities shall be continuous.
This is a corollary to the provisions for the continuity of registration certificates. It will operate to the advantage of taxpayers, and will remove the cause of many complaints from taxpayers who find it difficult or embarrassing fro renew their securities annually.
The objects of this provision are -
The proposed provision is taken from the Customs Act.
The position is that, in some States, taxpayers are required to pay stamp duty on their sales tax securities, and that, in other States, securities in the same form are exempt from stamp duty.
Taxpayers are required, in certain States, to pay duty to the amount of 10s. even on bonds of a minimum value. It is most desirable that this matter should be rectified is order that taxpayers in one State shall not be at a disadvantage as compared with taxpayers in another State.
At present the position is, technically, that all manufacturers and wholesale merchants are required to register and furnish securities and returns.
It is obviously undesirable that those who deal only in exempt goods, and whose other activities (if any) do not come within the scope of the tax, should be placed under a statutory obligation to become registered, give security and furnish monthly returns.
This provision relates to section 18 (2.) of the Sales Tax Assessment Act (No. 1). That sub-section was agreed to by the Government w hile the bills were before Parliament last year) in consequence of the representations of manufacturing retailers, who claimed that they should not be placed at a disadvantage, as compared with manufacturing wholesaler”, by being required to pay tax on their retail prices.
The manufacturer who takes stock from his factory into his retail shop is able to fix the sale value at the wholesale price. The Commissioner is given the power to vary that valuation if he is satisfied that it is not a fair one. Representations have been made with regard to another class of manufacturer, and that is a person who makes goods to order for his individual customers. Amongst them are tailors and photographers. They have been compelled to pay tax on the sale price of their goods because there was no other basis on which they could be taxed. Representations have been made to the Government on this subject, but the rectification of the anomalies is not easy.
I have discussed the matter at considerable length with the commissioner and his officers with a view to devising a formula which would allow tailors, photographers and other small manufacturers to pay, not on the retail price, but on a fair wholesale value. Apparently no definite formula can be evolved, but an amendment will be proposed in committee to provide that in respect of any goods prescribed by regulation which are made to the order of individual customers the sale value shall be the amount ascertained in such manner as is prescribed.
– Will that apply to the building of a house ?
– It will apply to all transactions that are prescribed by regulation. The commissioner will be empowered to apply this provision as his experience suggests. A certain margin may be allowed between the retail and wholesale prices, but that will naturally vary with different classes of goods. This phase of the sales tax has caused considerable difficulty, but the amendment I shall propose will give to the commissioner an opportunity to do what he regards as fair and just, and will enable some relief to be given to traders of the class I have mentioned. There are other minor amendments to remedy oversights and rectify grammatical and phraseological errors in Sales Tax Assessment Acts Nos. 1 and 5; but I shall not discuss them at this stage, because the bill is essentially one for consideration in committee.
Debate (on motion by Mr. Lyons) adjourned.
Debate resumed from the 21st July (vide page 4141) on motion by Mr. Soullin -
That the bill be now read a second time.
.- The income tax proposals of the Government do not allow much scope for criticism. In the existing circumstances of the nation all that we can do is to accept the proposed increases as unavoidable. It is unfortunate that once more we are compelled to increase’ the .burden upon the taxpayers. The proposals contained in the bill are part of the plan agreed to at the Melbourne conference, and the payers pf income tax must remember that no more is being asked of them than of other sections of the community. I am sure no honorable member cheerfully approaches this proposal, but we have no alternative; those who have taxable incomes must help to get the country out of its difficulties, so that at as early a date as possible relief may be afforded to all sections of the community.
The bill contains three principal features. The first is the increase to 10 per cent, of the. special tax of 7$ per cent., which was imposed last year on income from property. At that time I thought that the 7£ per cent, tax was the limit of the burden that the taxpayers could be asked to shoulder. But already it is necessary to review the tax, and ask for a further contribution to the revenue. One aspect of this proposal will appeal to all honorable members: We are, undoubtedly, asking the bondholders to bear the greatest share of the general sacrifice, and if income tax were allowed to continue at the existing rates it might be said that the taxpayers were being placed in a comparatively favorable position. This further impost, unpleasant though it ‘be, may help to make the debt conversion scheme a little less unpopular.
– The bondholders and taxpayers are the same people.
– No’; those who convert their bonds will not be subjected to the proposed increase of income taxation, and they will he able to feel that they have not been singled out to hear the brunt of the rehabilitation scheme.
The second feature of the bill is the - increase of 5 per cent, in the tax upon income from personal exertion. This increase superimposed upon the already heavy taxation, State and Federal, may be regarded as burdensome, but we have to recognize that the object of the rehabilitation plan is to spread the burden of sacrifice over the whole community. Some sections, notably the bondholders, will be bearing an “even heavier burden, and in any case, income tax can be collected from people only in proportion to the incomes they are enjoying.
– We are destroying this source of revenue.
– We all are aware of the undesirable aspects of ‘increased taxation. I do not know that any honorable member believes that any permanent good can come out of these increases; but we are driven by circumstances to do something which, under normal conditions, we would not contemplate for a moment.
The third feature of the bill is the reduction of the statutory exemption, thus widening the application of the income tax. Having regard to the high rates that are being imposed upon those in receipt of the larger incomes the Government is justified in bringing a larger number of the smaller incomes within the range of the tax.
Honorable members will appreciate the simplification of_the methods by which the actual amount of the tax is calculated. If honorable members will refer to Professor Giblin’s notes they will notice that some of the complexities of the present system are to be removed. The simplification process is carried further by the consolidation of the income tax and the super tax. Some of the existing inequalities have been reduced and, generally speaking, the whole plan of the tax is more satisfactory. There will be instances of the increase in some cases being out of proportion to the increase in others. But similar inequalities have existed hitherto, and there is compensation in the fact that there is a net reduction of these anomalies. The revenue which the bill is designed to raise must be found to enable the Commonwealth to meet its commitments and implement the rehabilitation plan. Therefore, we must accept the bill practically as it is offered to us. In all the circumstances it is the best which we could expect, and I hope that the second reading will be agreed to promptly, so that effect may be given without unnecessary delay to the policy agreed to at the Melbourne conference.
.- The Leader of the Opposition (Mr. Lyons) said of this bill, as has been said of every feature of the financial rehabilitation plan, that he did not believe that any permanent benefit would come out of it. I have never previously known legislation to be agreed to by such large majorities which was so cordially disliked by its supporters, or so damned by them with faint praise. It cannot be said that there are no precedents to guide us in the present financial emergency. Great Britain followed for years the policy of increasing taxation, and every year the economic depression increased. To-day economists attribute her financial trouble to this policy of taxation and deflation. Germany was forced, by the Versailles Treaty, to resort to the same expedients of higher taxation and reduced wages. To-day she is on the verge of* revolution because of the destitution and misery of her people, and America is sending £40,000,000 in gold to Berlin to pay the wages of the police and military who are required to prevent popular revolt. Similar circumstances obtained in Russia before the overthrow of the Czarist regime.
– Not a bad idea!
– The honorable member understands nothing higher than the law of the jungle - brute force and stupidity. That is the level of his mentality. France and America followed the opposite policy. In the United States of America, President Hoover encouraged an expansion of credit and the maintenance of wage standards; he urged that, instead of starving industry, it should be fed as freely as the nation, could afford.
This legislation will result in additional* unemployment and add to the severity of our economic depression. I would nol object if the measure were being introduced in prosperous times, when money could safely be drawn from industry and used for national developmental purposes. But these are difficult times. The bill proposes to take from industry money that.it cannot afford to pay, which will be used to pay for the upkeep of government, and to liquidate our overseas debts. I calculate that as a result of the proposed additional taxation, a further 50,000 to 70,000 will join the ranks of the unemployed by Christmas. If legislation of this nature is persisted in, the Statisticianwill be counting the number of those who are still in employment instead of the unemployed.
One is inclined to lose all hope for the future when one sees a federal government persisting in a policy of national devastation. It is said, “ those whom the gods wish to destroy they first make mad.” Evidently the gods want this country to be destroyed, and are first making its legislators mad. The only solution of the trouble is to feed to the nation the lifeblood of industry by developing the nation’s potential wealth to restore its dwindling resources. The old insane policy of pledging the future production of the nation to borrow money to meet the cost of government and to pay war debts has resulted in Australia being in its present position. The national resources of the nation have not failed, as wa3 eloquently declared by the Treasurer (Mr. Theodore) in one of his propaganda bulletins. Australia is not passing through a period of severe drought, nor has it been devastated by flood, fire, or volcanic disturbances. The productivity of the soil is as good as ever. Only one thing has failed, its legislation. Incidentally, I hope that eventually the nation will be’ unable to pay its war. and other debts abroad. That is the only way to bring those at present in power to their senses. This legislation is analogous to draining a reservoir without cessation and refusing to replenish the supply. The process cannot continue much longer, and in the meantime, disaster is drawing closer and closer.
I shall vote against the bill and its associated legislation. I do not object to properly adjusted income taxation, because that is the best way to help a nation ; it complies with one of the basic principles of taxation, that of taking from those who are best able to pay. This measure is not in that category. It enables the Government ruthlessly to take money from the people, irrespective of the consequences. So that when I vote against the second reading of the bill it must not be considered that I am censuring sane income taxation. This is merely stupid taxation, which will not have the anticipated effect. Instead of bringing about budgetary equilibrium it will result in further budgetary depression, and in four or five months will have to be supplemented by other similar measures. Fifteen months ago the Government brought down its first budget. Two or three months later it brought down another, and the process will have to be repeated every few months, until the country breaks down under the strain.
This bill is, indeed, a poor commentary on the intelligence of those who sponsor it, who were . actually elected to carry out the policy of Labour. The Government has been almost two years in office, and the position of Australia is worse than ever.
– As a result of Labour legislation.
– This is not Labour legislation. This so-called Labour Government has failed because it has surrendered to its opponents. It quaked before the threats” of another place, and finally capitulated and agreed to put into operation the policy of its opponents, which is against national development and in favour of individual aggrandizement. The programme of the Government is now purely nationalistic in character, and perpetuates the errors of the Government which preceded it, when the country was dominated by the disciples of capitalism. Coloured as it is by the formulas and-policies of nationalism, the legislation of the Government will bring the country to an intensifying of the sorry state that it was in when Labour assumed office nearly two years ago. The Government has been recreant to its trust, and is leading the country faster and faster to economic destruction. This legislation can in no way solve the nation’s troubles. It is useless, and vicious in its effect, and I shall vote against it. What I most regret is that it will add thousands to the already swollen ranks of our unemployed.
.- I congratulate the honorable member who has just resumed his seat upon his realization of the fact that, prima facie, an increase of taxation must lead to an increase of unemployment by imposing further burdens on industry. I did not expect to hear from him an acceptance, in such unqualified terms, of that proposition. I have been accustomed in this House to hear from members of the Labour party, and from the gentlemen who are now apparently ex-members of that party, the enunciation of principles which suggest that, in their opinion, there need be no limit to taxation; that any amount of taxation may be imposed without doing any harm. I sympathize very largely with the honorable member who has just spoken. As a member of this Parliament, I find myself engaged at the present time in doing two things; reducing public expenditure, and, at the same time, increasing taxation. The outlook is, as the honorable member has said, very grave indeed, and I share some of the apprehensions he has expressed. A large increase of taxation, such as is proposed in this measure, will produce, as one effect, an increase of unemployment, but, on tlie other hand, it must be recognized that unless we can make a real approach towards balancing the national budget, industry and employment in Australia have no chance whatever of recovering. This step, unpleasant as it is, and unsatisfactory as will be some of its effects, is nevertheless necessary. I am sure that, whether we share the ideas of the honorable member for “Werriwa (Mr. Lazzarini) or not, the mind of every honorable member of this House will be led by degrees to the conviction that there must sooner or later be a general reconstruction of . our economic life. It is impossible, as the honorable member has said, for us to go on increasing taxation indefinitely. The increase in taxation in recent years has been terrific, and the increased taxes have, in many instances, ceased to return the revenue expected of them. In some instances, increased taxes have actually produced less revenue than before, because the taxation has tended to destroy the source of revenue which was to be taxed. “We shall have to do much more than increase taxation and reduce expenditure if Australia is to resume the path of prosperity, unless, indeed, we have the good fortune to experience a revival in world prices. If the price of our chief exportable primary products goes up, then our problems will be, to a very large extent, solved. But we cannot count on that. Though my solution of the problem would be different from his, I agree with the honorable member for “Werriwa that we must reshape the economic foundations of society. Still, I do not propose to discuss this very important subject now.
My intention is to offer some observation oh the remarkable development of our income taxation in relation to the differentiation between incomes derived from personal exertion and those derived from property. All systems’ of income taxation with which I am acquainted discriminate between these two forms of income - between what may be described as earned and unearned income. In many instances, that is a proper description of such incomes, and the term “ unearned” may properly be applied to an income derived by a .son who inherits his father’s property. In the case of many thousands of our citizens, however, who have lived lives of self-denying thrift, and have saved for their old age, the incomes they receive from property, though technically unearned, are of a very different character socially, if not technically, from that received by the hereditary successor to somebody else’s wealth. We must consider whether we have not gone too far in the taxation of at least the smaller incomes derived from property. Last week, I -asked the Treasurer (Mr. Theodore) a question regarding the incidence of taxation upon an income of £500 a year derived from taxation, and on a similar amount derived from property. Honorable members may, and no doubt, have, their own views on the differentiation between earned and unearned income, but it must be generally admitted, I think, that we have gone too far in the direction of taxing property income.
– We have now lowered the exemption on property incomes, also.
– Yes; that aggravates the matter. The Treasurer’s reply to my question was as follows : -
I ask honorable members whether this extreme discrimination against income derived from property, particularly the lower incomes, is just. It appears to me that there should be an attempt to readjust the rates, so as not to make these heavy, and in some cases cruel, demands upon those who derive small incomes from property, especially as these persons have, by their thrift, saved something for their old age, and thus relieved the Commonwealth of the obligation of paying invalid and old-age pensions. I recognize that at the present tune it is impossible for the Government to reconsider a* general principle such as this, which appears to produce surprising consequences in its general application; but I raise the matter now so that it may come actively before the minds of honorable members and in the hope that we may, at no distant date, redraft our income tax legislation.
– It seems to me that on this matter those honorable members who sit in this corner of the House are able to agree with much that has been said by honorable members on the opposite side. The avowed intention of the Government is to increase taxation for the purpose of balancing the budget. The Government has already made a good many attempts to balance its budgets by this process, for it has brought down three financial statements since it was returned to office. When the Government introduced its first ‘budget in July of last year, it imposed extra taxation - in some instances by increasing existing rates and in others by imposing new_ taxes, such as the sales tax - with the idea of attaining budget equilibrium. What happened, however? Hardly four months had gone by before need arose for recasting the budget, and the present Leader of the Opposition (Mr. Lyons), who was then Acting Treasurer, brought down an amended financial statement. ‘ During the four months which elapsed between July and November, the return from taxation continued to shrink, and the numbers of the unemployed continued to increase by leaps and bounds. It should then have been apparent to everybody that while the unemployment problem was unsolved, it was humanly impossible for the Government to balance its budget, because the people from whom taxation must be raised were deprived of the means of earning a livelihood, and therefore, could not pay taxes. The same problem faces us now in an aggravated form. The present Treasurer (Mr. Theodore) has stated that, had we continued on the old basis, the deficit al the end of this year would have been £20,000,000, but he hopes, by the introduction of economy measures, and by raising £8,000,000 in new taxation, to reduce the deficit very substantially. Gauging the position from past experience this cannot be done while the unemployed problem remains as it is.
I know from my own observation how heavily the existing property tax bears upon many small property-owners. Take, for instance, the case of a person who owns two or three cottages. When I was visiting other States recently, I came upon instances in which the propertyowners were not only unable to carry out ordinary renovations, such as painting, &c, but were forced to apply to the local council for a remission of rates. This leads to an increase of unemployment, because the owner cannot afford to employ renovators, and because the council, which cannot collect the rates due to it, is unable to carry out ordinary maintenance work. No extensive” investigations are needed to establish the truth of this, and, as the honorable member for Werriwa (Mr. Lazzarini) has pointed out, the increased taxation proposed in this measure must inevitably lead to still more unemployment. If things go on as at present, we must surely end the year with a deficit of at least £10,000,000. I am so far in agreement with the Deputy Leader of the Opposition (Mr. Latham) as to believe that a drastic re-adjustment of the economic system in Australia will have to be effected. Of course, if, as the honorable member said, world prices for primary products were to improve, the situation would be greatly relieved; but there is no prospect, bo far as I can see, of such an event taking place. We cannot ignore the fact that under the five-years’ plan operating in Russia, that country must become a very serious factor in world trade. She must seriously affect the primary industries in the various countries of the world, and particularly in Australia. In my opinion, the position may become so serious that another world war may be precipitated because of the trade difficulties which will arise as a result of the capture by Russia of the world’s markets. All these facts stare us in the face. Considering how society has developed up to the present time, and remembering what is happening here and abroad, we should face the necessity for a change in the economic system. If we are prepared to do that, we may, in a measure, relieve those who have been referred to by honorable members opposite - the small property-owners who are living on the rent derived from their houses, and the workers for whom we plead. When we know that this legislation will not meet the requirements of the nation, why are we not big enough to say so, and face up to a change in the economic system? Otherwise we shall be merely humbugging with the situation. That is shown by the statements made by our political opponents. If we are frank in the matter, and act honestly, we shall do something practical towards the rehabilitation of this country.
.- Usually, after the Deputy Leader of the Opposition (Mr. Latham) has spoken on a taxation measure, there is not much ground left for any other member to traverse; but I wish to refer to one or two items touched upon by honorable members who, although not necessarily supporters of the Government, sit on the government side. . I cannot refrain from noticing the repetition of the statement that the Government’s plan for the re-organization of the finances will fail. That statement has even been made, according to the press, by a member of the New South Wales Government. If a certain statement is repeated often enough, the person making it will eventually believe it, and if a sufficient number of persons can be induced to state continually that the plan must fail, the general community will become convinced that the statement is correct. Whatever success may attend the operation of the plan will be due to its psychological effect upon the people, in addition to inherent good in the plan itself. The community has been assured, and it now believes, that the plan evolved by the Premiers Conference will result in much good, and, therefore, much benefit will result from it, because of the hope engendered in the minds of the people. The present depression is, to a large extent, due to psychological causes, but it is, of course, mostly due to economic factors. If confidence can be restored, and those who have money can be induced to spend it, the result will be a continuous improvement in the position of the country. I deprecate the statement that the plan will fail. The present bill is one of the measures that are necessary to give effect to the plan, and although I regret the necessity for any further taxation, I recognize this bill as a necessary part of the whole plan.
What is the answer to the statement that the plan will fail? We have a £20,000,000 deficit this year, and we expect a £30,000,000 shortage next year. According to the remarks of honorable members on the government side, one must assume that they advocate no reduction in expenditure, and no attempt to increase governmental income; but, owing to the circumstances in which we find ourselves, we simply have to reduce expenditure, and we must try to increase government income. If we do not, what is the alternative? We are urged by the honorable member for West Sydney (Mr. Beasley) to face up to the facts of the situation. The only conclusion I can draw from his statement is that he believes that our debts should not be redeemed but ignored. He would have us wipe out all debts and pay no further attention to them. That is what he has described as facing the fasts. But the national income has fallen to the extent of over 30 per cent, in the last two and a half or three years, and that means a smaller field of taxation for governments. If the Government wishes to collect the same amount of revenue as before, it is manifest that the taxation rates must be increased ; hence the present bill.
The proposed increase in income tax from personal exertion is 5 per cent. Nobody deprecates increases in taxation more than I do. It is wellknown that the greater the amount governments take from the people by way of taxation the less the people have to spend, and, indirectly, the less there ls available for providing employment. Undoubtedly, the increase in taxation pro- posed under the present bill will do much arm to a certain class of persons. The Deputy Leader of the Opposition (Mr. Latham) has referred to the position of property-holders. A married couple, with an income of, say, £200 from property, would pay about 10s. a week, or a little more than that, in income tax, leaving, roughly, an income of £3 10s. a week. Such a couple must have at least £2,000 invested in property, and they would probably be living in a fairly good class of house. It stands to reason that the local rates they would have to pay would be considerable, and these would probably amount to, at least, from £20 to £30 a year. Therefore, the £4 a week would probably ‘be reduced by £1, or a little more, to meet local government and Federal Government taxes, apart from State taxes. There must be some end to this taxation. I agree with the Deputy Leader of the Opposition (Mr. Latham) that the differentiation between the taxation of income from property and the taxation of income from personal exertion is too great. It has been said that income from property is unearned. But it has been earned in the past by men and women who have worked long hours when others were enjoying themselves; I am leaving out of consideration, for the time being, those who have been fortunate enough to make money by speculation. In reading the statements published week by week about the estates of deceased persons, one frequently notices that a farmer has left an estate valued at £2,500 or £3,000. I, as a country member am often twitted with being a representative of these “ poor farmers “ ; but I point out that these men have been able to leave small estates because they have denied themselves such pleasures as are indulged in by those members of the community who live right up to their income. These small estates, too, are partly built up by the accumulated, unpaid wages due to the members of the deceased’s family. Governments are inclined to regard the estates of deceased persons as fair targets for taxation, and when people invest the pro ceeds of small estates, ‘ and retire, their small incomes are taxed to the greatest possible extent. What would happen in this community if every person never saved but spent every penny he earned and had in the end to call on the Government for an old-age pension? It seems that in the near future it will be necessary to differentiate between the taxation imposed with respect to property and’ that with respect to personal exertion, in order toarrive at a more equitable system than that now adopted.
I regard this bill as necessary. The draftsmen have done well in bringing down such a comparatively small and simple measure when one calls to mind the amount of printed matter contained in taxation bills introduced in the past. I doubt if there are five members in the House who could check a federal income tax assessment o» the old basis. The taxpayer could not say whether his assessment was right or wrong. Some persons could not work out assessments under the old formulae, and they would forget to take into consideration the fact that the increased tax was in one year 8 per cent., and in another year 10 per cent. The new basis adopted by the Government will be fully appreciated by every person who knows anything about taxation. The tax will be more simple to work out and check. Sub-clause 2 of clause 5 makes provision for another simplification. It makes it clear that in the case of those companies which may be called pup companies of other companies, or holder companies, as the case may be, where there is one company holding shares in another, only one tax shall be paid on the one amount of property income. Endeavours were made when the previous bill was before the House to simplify this tax, but unsuccessfully. We knew, of course, that the idea was that there should be nodouble taxation, but only expert taxation lawyers were able to interpret the provisions of the act. This clause makes the position clearer. The Government, although it is increasing taxation, is to be congratulated on the form of the bill, and on the new formulae contained in the schedules attached to it. This measure is largely one for consideration in committee, and even at that stage there will be few clauses in the bill to which we can object. The only exception is the differentiation between incomes from personal exertion and property. Naturally no honorable member likes to say that he supports any increase in taxation, but this bill is part of the general plan of rehabilitation, and we hope that by means of its operation we shall obtain sufficient revenue to enable us to emerge from the slough of despond into which we have drifted and be able to reduce the tax as soon as possible. Conditions will improve. If we did not think so, we might just as well throw up the sponge, in 1890 Australia was faced with a crisis worse than this; yet the country recovered, and it will recover on this occasion. There is no need to talk about wiping out. our debts. All we need is a breathing space to enable the various governments of Australia to be placed on a sound footing. When that takes place private individuals will, as a result of the improved conditions, benefit correspondingly. The road to prosperity is long and rough, but we have recovered from bad times before, and we shall recover from them again.
.- I wish to refer to the differentiation made in this bill between the taxation on incomes from property and personal exertion. During the regime of the Bruce-Page Government I asked that this matter he considered. There seems to be an impression in the minds of the Australian people that it is almost a wrong thing to invest money in this country, no matter how properly it has been acquired. Money is .always penalized for being expended in the country. An old man is placed at a disadvantage compared with a young man. That is shown by the case which was mentioned >by the Deputy Leader of the Opposition in respect of two persons with an income of £500 per annum. The son pays a small tax on his income from personal exertion, yet his father has to pay a considerably higher tax on a similar income from property. I am sure that the Prime Minister does not in his heart approve of this wide differentiation between incomes from personal exertion and property, particularly in respect of the smaller amounts. I have in mind the case of quite a number of people who are now very old. They toiled for fifty or sixty years on small properties, and when they were no longer able to carry on they disposed of their holdings to persons who could work them. With the £2^000 or £3,000 that they received from the sale they probably built cottages in some township or city with the idea of obtaining a small income.
– It would have been better for them to leave their money invested in the country.
– The honorable member knows that the property sold is stall in the country, and is being worked by capable persons. These old fellows did a wise thing in providing for their oldage. They did not believe in the Government spoon-feeding them. They did not want the old-age pension. They believed in making some provision for their declining years, and their number in Austraia is legion. The way in which this tax is imposed would make one think that these old fellows have done wrong in investing their money; that they had obtained it by gambling or by some sharp practice. What this country wants most of all is the investment of money in industry; but this vicious tax discourages investments. I believe in equality of sacrifice at a time like this, but this tax is not in accordance with that spirit at all. It is grossly un-fair. An old fellow who has an income of £200 from property will have to pay a tax of over £20, while his son who may have an income of £200 from personal exertion will not pay more than £3 7s. 6d. That is not fair, and I hope that notwithstanding the general plan of rehabilitation, the Government will make this tax more equitable so as to remove from the hearts of our citizens the feeling of bitterness that now exists there. What we need to-day is a reduction in the cost (si production. We should produce mare saleable commodities, and thus provide more money for distribution among the people. The mere taking from people of money to govern the country when the country itself is not earning money by means of production, must have a further strangling effect upon . our workers and industries generally.
.- I am opposed to the general plan of rehabili- tation, because it is my honest conviction that it will fail. I have a keen appreciation of the attempts that have been made during the last two years to improve the financial position of this country. I have seen several budgets introduced, and no doubt in the near future another budget will be introduced embodying some other effort to tide this country over its difficulties. I make no apology for the fact that I still and will continue to advocate an increased currency. A reduction in the wages and salaries of the public servants and in pensions, and an increase in taxation, must have the effect of further restricting the spending power of the community, and will not bring about any solution of the problems confronting us. Every item of increased taxation, whether direct or indirect, must reduce the spending power of the community, and incidentally, reduce the currency which is the lifeblood of this and every other country. We have been told by the Deputy Leader of the Opposition (Mr. Latham) definitely that there will have to be a complete re-organization of our economic system. That position is not peculiar . to this country. In Great Britain a conference is now being held, and attending it are the representatives of every nation. These men are endeavouring to find a solution of the problems of the world, and incidentally, of our problems, because Australia is part of the great universe. We cannot adversely affect one part of the body without affecting the whole of it, and if the financial system of one country fails every other country is adversely affected. I do not believe that the Government’s general plan of rehabilitation will solve our problems, although I hope that it may. We shall have to adopt other measures in order to bring about prosperity. It is suggested that the reduction of wages is necessary. Let me say that, within the last two or three days, the Chairman of the Board of the Bank of England has stated definitely that a reduction of wages is no solution of the financial problem. Other bankers in Great Britain, and many prominent men associated with industry throughout the world, such as President Hoover and Mr. Ford, hold a similarview. The increase of taxation must limit the spending power of the people, and that will add to, instead of lessen, our troubles. Unless, there is a complete re-organization of our economic life our system of government must break down. One way out of our difficulties is to give our people employment. We should release credits to enable a revival of industry to take place. Increased taxation must lessen the capital available for investment in industry, and the inevitable result will be chaos.
I come now to the differentiation made between incomes from personal exertion and property. The honorable member for Forrest (Mr. Prowse) has said that certain people are always drawing attention to the fact that other people have property; but I do not know who those people are. I appreciate the fact, as stated by the honorable member for Maranoa (Mr. Hunter), that in many cases investments of from £2,000 to £3,000 represent the life savings of old people and their families, and that, in many instances, those families have worked long hours. Some honorable members opposite are continually gibing at the wealthy sugar-growers, and such statements have been published in the southern press; but let me inform them that there are few wealthy sugar-growers in Australia, mainly because of our deplorable financial position. On three different occasions last year I asked the Prime Minister whether it was not possible to declare a moratorium in order to assist the sugar-growers of Queensland. The only sugar-growers who have prospered to any extent are the small growers, who have been fortunate in having a large family to assist them. They work long hours, and the toil is heavy. When the right honorable member for North Sydney (Mr. Hughes) was Prime Minister, he fixed the price of raw sugar at £30 6s. 8d. a ton, and these small growers were able to sell their properties on a good market, and thus assure themselves of some little comfort in their declining years. I do not object to that, because I believe that, whenever possible, our people should be relieved of their troubles. I wish that we could as easily relieve the troubles of the great mass of the people. The only solution of our problems is to make credit available to employers in this and every other country to enable them to employ labour. We meet our overseas obligations by exporting produce. By limiting credits and increasing taxation, we merely magnify the difficulties of industry and of the country. I am afraid that the proposed increase of taxation is inevitable, but I have no illusions regarding its benefits. I believe that the policy which the Government is enacting will fail, and ““that conditions, instead of becoming better, will become worse. The very fact that the report to the Melbourne conference by the experts made provision for greater expenditure on doles during the current financial year, indicated that those gentlemen did not anticipate a speedy return of prosperity. Of course, no government or parliament cheerfully imposes increased taxation, but we are told that we have to balance our budgets. That is demanded by the banks, which have a stranglehold on Australia and on most other countries. They are to determine what credits shall he available !’ The honorable member for “Werriwa (Mr. Lazzarini) pointed out this afternoon that, although we are producing in abundance all the requirements of our people, many of them are destitute, and the public treasuries are empty. This country must produce in order to meet its obligations, and by increasing the taxation on employers and others, we reduce the amount of money in circulation, and lessen the possibility of increasing employment, thus making conditions worse than they are already.
– The honorable member for West Sydney (Mr. Beasley) and his colleagues in the corner, seem to be unanimously of the opinion that whatever we may do to cope with the financial emergency will inevitably fail. That view was echoed by the honorable member for Herbert (Mr. Martens). But I do not agree that the Steps being taken for the financial rehabilitation of the country will prove abortive; on the contrary, I am confident that they represent the best policy possible in the circumstances. Certainly, the measures we are enacting impose considerable hardship on all sections of the people, but they are at least an earnest of our resolve sturdily and manfully to meet our obligations. The only regrettable feature is that we did not take, twelve months ago, , when the position was not so acute as it is to-day, the steps we are taking now. It is useless for honorable members who pose as leaders of public opinion, to whom the people are looking for guidance through their difficulties, to moan, and cry, and talk pessimism. If this Parliament honestly believes in the statutes it .is placing upon the statute-book, it must expect them to restore public confidence in Australia; that will be reflected in greater confidence overseas, and renewed prosperity should follow.
Upon the income taxation measures each year, I have called attention to the difficulties under which those who have invested in industry are labouring because of excessive taxation. That is illustrated “ by the report of the annual meeting of shareholders of a public company in Sydney. The profit of the business last year was over £7,000, and the . taxation amounted to £5,000. In other words, the persons who invested their money in that business gt# little or no return for it. Many of them are not wealthy; they are persons of moderate or small means, who were induced to invest on the understanding that the business was safe and would pay a regular dividend. The experience of this company is similar to that of many other companies throughout the Commonwealth,
I could wish that income Dax were less severe than it is, ‘because it is taking out of industry money that would otherwise be utilized to provide employment for a larger number of people. As the business of the company to which I have referred is not profitable, it must reduce expenses in some way. It cannot cut wages, because they are fixed by award. Therefore retrenchment is inevitable,. ^ and more people will join the ranks of the unemployed. That is happening throughout industry generally as a result of the present unsound economic and industrial policy. For years I have advocated that we should refrain from excessive income taxation, so that more money might be left in industry, and used to provide work. Honorable members ask futile questions regarding what the Government proposes to do for the unemployed. Do they not realize that even in the peak years of prosperity government employment absorbed only 15 per cent, of the workers, and that private enterprise had to support the balance ? No rehabilitation plan can be regarded as satisfactory or complete unless it leaves to industry some opportunity to operate at a profit and perform its legitimate function of employing our people.
The debate on this bill has its amusing aspect, and I have been, interested to hear the honorable members for West Sydney (Mr. Beasley) and Werriwa (Mr. Lazzarini) advocating to-day the policy that I and other honorable members on this side have been upholding for many years. I regard their speeches as a much belated recognition of the sound economics advocated by honorable members sitting in Opposition. When the Government, of which the honorable member for West Sydney was a member, introduced its income tax proposals. last year, I pointed out how severely they would press upon people with small incomes. I could not have put the position better than the honorable member for West Sydney did this afternoon. He followed strictly my line of argument, and yet he was a member of the Government which imposed grinding taxation on the poorer sections of the community. A person may, by the most rigid self-denial on the part of himself and his family, by forgoing many of the pleasures and comforts of life, have scraped together sufficient money to buy two ov three cottages which return an income of, say, £6 a week. He believed that his sayings would make him selfreliant and independent of the old-age pension. But how is he treated? From his income of £6 a week the Commonwealth Government will exact 10s. a week, and the State Government is taking a similar amount. Municipal bodies also impose high rates and taxes, and in the end the small property-owner has barely enough for his subsistence. That is the reward of his husbandry. Each year I have drawn attention to the injustice that the income taxation imposes upon the poorer members of the community, particularly the thrifty, who are, as I have said on other occasions, the backbone and sinew of the country, and should receive special consideration. I realize, however, that we are helpless. We can only place on record our dissent from the policy that is being pursued. The Government says that certain revenues must be raised to save the country from bankruptcy, and that no further economies can be effected. I do not believe that all avenues of possible savings have been explored; but argument will not prevent this increased taxation from being imposed. I can only again enter my strong protest against the unfair discrimination that it being shown in the application of this taxation against the small propertyowner in comparison with the single men and others enjoying income from personal exertion. The Government would be doing a simple act of justice if it amended the rates to make them press less harshly on property-holders with small incomes.
.- The honorable member for Warringah (Mr. Archdale Parkhill) stated that this discussion has had its amusing features. Having listened to the very stupid remarks of the honorable member, I agree with him. I am of the opinion, which is shared by the other members of my group, that the term “ plan “ is a misnomer, when applied to the present activities of the Government. I prefer to describe what is being done as a “ plot “ against the people of Australia.
It was said that the object of this measure was to balance budgets, and we heard a good deal about replacing the unemployed in industry. Actually, the money that will be raised by means of this additional taxation will be used to pay interest to bondholders, not one penny of it will go to assist the unemployed. The honorable member for Warringah bleated that we must make it possible for capital to be invested at a profit. It is obvious to all that the capitalist is not a philanthropist, and that he will not invest his money in other than lucrative proportions.
To-day it is not so much a matta” of finding money to balance the budges, the essential thing is that we should face economic facts, and realize that although we may produce on a generous scale, we cannot find a market for our products. What is needed is an alteration of the existing social system. That is the only permanent solution of our present ills. I am not expressing “ wild cat “ views. Years ago, when he was regarded as an. advanced thinker in the Labour movement, the present Prime Minister (Mr. Scullin) gave expression to similar opinions, and these opinions also have the support of many eminent economists.
The honorable member for Warringah claimed that we must manfully and sturdily face the position. He spoke of persons receiving £6 a week from property as getting a “ miserable income “. I wonder whether, when he assisted the Government to reduce the paltry payment that is made to our invalid and old-age pensioners, he thought of the unfortunate men and women who have been receiving only £1 a week on which to exist during the declining years of their lives. Many honorable members opposite have spoken on behalf of those who have scraped together a few pounds and invested it in property, in the hope that in the winter of their lives they would have an assured small income on which to live. I admit that there are many such. But honorable members opposite omitted to refer to the thousands of workers who, having scraped together a few pounds out of their hard-won earnings, were foolish enough to listen to the oily talk of speculators, with the result that they were robbed of their savings. Honorable members opposite, who represent such speculators, would, of course, tell us that such transactions are “ business”, and that we must expect these things to occur.
The honorable member for Warringah declared that many of the people to whom he referred had deprived themselves of the ordinary comforts of life during many years in order to set aside a few pounds for investment in property. I have heard him and other honorable members opposite - and a similar opinion has also been expressed in the report of Mr. Cerutty, the Auditor-General of the Commonwealth - suggest that many persons have to draw the old-age pension simply because they dissipated their earnings in drink. To suggest that is to make a contemptible attack on a very worthy section of the community, the great bulk of whom worked hard throughout their long lives in industry, producing wealth that others might enjoy the good things of life. I venture the opinion that if excess in drinking is a sure qualification for the old-age pension, there are many candi dates for it among honorable members of this chamber. I hate to hear dastardly attacks of that description made on our invalid and old-age pensioners.
We are told that this additional taxation forms part of the plan which aims at making the present sacrifice on behalf of the nation a general one. One honorable member opposite said that things will not be always so bad as they now are. I know that, so far as the workers are concerned, they will be much worse. The Government is being supported by honorable members opposite in putting into effect a plot that will degrade those workers who have been fortunate enough to attain a standard a little higher than many of their fellows. I represent an area in which live many who are suffering untold misery because of the mismanagement of the affairs of the country, and I refuse to assist to put into operation a plan that has only one object, the rehabilitation of the employing and capitalistic section of the community, and gives no consideration whatever to the interests of the workers.
Question- That the bill be now read a second time - put. The House divided. (Mr. Speaker -Hon.Norman Makin.)
Majority . . . . 48
Question so resolved in the affirmative.
Bill read a second time and reported from committee without amendment or debate; report adopted.
Motion (by Mr. Scullin) put -
That the bill be now read a third time. (Mr. Speaker - Hon. Norman Makin.)
Ayes . . . . . . 58
Noes . . . . . . 5
Majority . . . . 53
Question so resolved in the affirmative.
Bill read a third time.
Bill returned from the Senate with a message intimating that it had agreed to the bill as amended by the House of Representatives at the request of the Senate.
Bill returned from the Senate without amendment.
Debate resumed from the 15th July (vide page 3925), on motion by Mr. Parker Moloney that -
The bill be now read a second time.
This House has once again heard a Minister introduce a bill designed to deal with the control and marketing of wheatgrowing in Australia. The first part of his speech could have been written for him by any honorable member of this House. It consisted very largely of insubstantial complaints regarding alleged undeserved misfortunes, and a recital of the failures of the Government in its attempts to deal with the real problem which undoubtedly is presented by the wheat industry. Every one of those attempts has failed, and the Minister attributes their failure to the malign influence of the opponents of his plans. Every honorable member has exactly the same right to oppose a measure presented to this House as any Minister has to propose it. When the Minister complained of propaganda, he appeared to suggest that there is some offence in opposing these electioneering propositions on which he has thrived for some years. I am not prepared to accede to that position even remotely. I have heard, until I am sick and tired, of the activities of the wheat merchants against the pooling proposals of the Minister, and have listened for too long to the complaints of the Government regarding the presence of lobbyists in this House. Everybody knows that when the first wheat bill was introduced by the Minister for Markets (Mr. Parker Moloney), the propagandists in favour of the bill were given a seat in the chamber behind the Minister, and sat there throughout the proceedings.
– Whom does the honorable member mean?
– I am referring to representatives of the poolers.
– Give their names.
– One of them was a solicitor, a Mr. Tilt.
– The honorable member surely docs not say that he was a pooler.
– He was in favour of the bill. For my part, I have no objection to propaganda either way.
– The gentleman to whom the honorable member has referred was advising the Government on the drafting of the bill.
– There were others also, and honorable members on both sides of the House met them.
– There was lobbying done on both sides.
– That is so. Of course, there is a dyslogistic sense in which the word “ lobbying “ may be used. I have no objection to representations being made to me by those interested in any proposal before the House.
– The honorable member does not admit that in regard to the representations of trade unions.
– I have always admitted it. I have been always prepared to receive representations on any measure in which I have been interested, and have done so without exception. We may leave out of the account the Minister’s apologies for his failures.
– The honorable member would like to leave them out.
– This is the fifth attempt by the Government to deal with the actual problem presented by the wheat industry. The first was a proposal for a compulsory pool, coupled with a guaranteed price of 4s. a bushel. Prom this side of the House I opposed the pool, and supported the 4s. guarantee, on the assurance that the money would be forthcoming. Subsequent events showed that it would have been impossible for the money to be forthcoming, and it was most unfortunate that that was the case. The market moved in such disastrous fashion, quite unexpected by any one who spoke in the debate on the bill, that it would have been impossible to find the money had the bill been passed.
– The honorable member said previously that no guarantee had been given by the Commonwealth Bank, and I showed him that it had.
– It is really not worth while spending the time of the House in discussing the electioneering speeches of the Minister. We all know the sort of speeches he makes in his electorate; the same sort, indeed, as he makes here, and that tend so little toward tho enlightenment of honorable members. The fact is that no such promise was given by the Commonwealth Bank as the Minister has said. The promise was conditional, and the conditions were not fulfilled. Even if the bill had been passed, the guaranteed price could not have been paid. The Government’s second attempt was a proposal involving a guaranteed price of 3s. a bushel f.o.b. That also failed. It depended on the agreement of the Commonwealth Bank, and the bank was not in a financial position to agree. While negotiations were in train, however, the wheat market was disorganized for a period of about five weeks. The wheat crop of Australia during that time was not being dealt with at all, but in the interval the price of wheat dropped, so far as I remember, by 4d. or 5d. a bushel. As a result of this misguided effort by the Government - and we pointed out at the time that it was misguided - the farmers of Australia were deprived of an enormous sum of money, representing the difference between what they could have sold their wheat for at the time the scheme was first mooted, and what they had to Bell it for five weeks later. That measure was withdrawn because it was declared by the Minister that the act was to he regarded as inoperative. The next proposal was for a £6,000,000 loan, and that soon “ went west “. Then there was a proposal for a £6,000,000 grant, which was to be financed by an issue of fiduciary notes; but the bill for authorizing the issue of the notes was defeated in another place. Now we have a bill providing for a. compulsory pool.
– Because of the action of the honorable member’s mates in the Senate.
– The Minister has a peculiar mind on this matter. Honorable senators did the right thing, and I support their action. The only measure that was passed could n’ot be put into opera- tion, and, if the others had been accepted, they would not have operated successfully.
Under this bill, it is proposed to take control of all the wheat of Australia. The measure depends for its coming into operation on the concurrence of the Parliaments of three States, but the operation of the bill would involve control of all wheat in Australia, so far as interstate transit and foreign export are concerned. If the bill is passed, the wheat of all States will be controlled, as a matter of necessity, although, owing to circumstances that happen to prevail in Queensland, the control there would be immaterial, and probably irrelevant. In New South Wales, which is one of the large wheat-producing States, a vote has been taken on a proposal for a pool under State law. The bill now before the House is designed to operate if the farmers in three States, and the Parliaments in three States, by taking the necessary action, approve. I do not know whether the Minister proposes to pay no attention whatever to the majority recorded against the most recent pooling proposal in his State. If so, I point out that, after a vote in which 9,789 farmers voted against, and 7,227 for a State pool, the wheat of New South Wales, if this measure be passed, would, in effect, bo subjected to all the results of a pool, so far as the control of any wheat sent out of New South Wales was concerned. In Victoria, the last time a pool was proposed, the vote of the farmers was against it. Owing to the freight charged between Queensland and the nearest accessible wheat State, Queensland is able to maintain a local price based on the difference in freight, which leaves that State not interested, to any extent, in a general Commonwealth pool.
– I think that the difference between the Queensland price and that in other States is a good deal greater than the difference in freight.
– There is at least that difference. There is, however, no export of wheat from Queensland. In South Australia there has developed a strong antagonism to pools; in fact, this feeling has, apparently, grown to such an extent that the Postmaster-General has come to the aid of his colleague, the Minister for
Markets, by prohibiting the broadcasting of speeches directed against this measure. On another occasion we shall probably have an opportunity of discussing the wisdom of restricting the broadcasting of political speeches to the expression of views which favour the party that happens to be in office. I have not heard the speeches that have been broadcast in New South Wales, and I am not familiar with the literature that has been distributed there. I believe that I have seen a copy of a circular that was sent round in that State, but I am not in a position to judge the character of the propaganda ; on both sides, probably, extreme statements have been made. In Western Australia there is quite an effective voluntary pool. A great many of the farmers send their wheat to the pool one year, and to the merchants the next. It is doubtful whether there will be a majority in favour of establishing a compulsory pool in that State, and, therefore, it seems hardly worth while pressing this bill through at the present time.
I intend to refer to the equalization clause at the end of the agreement embodied in the schedule, for the purpose of inviting attention to it. The first part of it provides for the distribution of any excess obtained by a higher local price over the export price among the States, in proportion to the quantity of wheat grown in the States. That appears to be intended to provide for an Australian pool. According to the second paragraph of clause 12, it would appear that each State is to retain any advantage that it would have by reason of an excess price in that State over the average Australian price.
Mr.gabb. - That is of no use to South Australia or Western Australia.
– I am merely mentioning this fact in order that attention may be devoted to it. It seems to me that the latter part of the clause modifies the beginning in such a way as to bring about an almost contradictory result. I hope that a lucid statement will be made upon this point. It does not appear to be clear whether the intention is to have an Australian pool, or a series of State pools. If the bill is passed, will it substantially help the wheat farmers? I cannot but remember the experiences with past compulsory pools, which have been associated with enormous losses and bureaucratic and incompetent control.
– The honorable member should not spoil his speech by saying that. That happened in war time.
– I know a good many things from professional experience. I have been consulted often about wheat pools, and I know that incompetence, dishonesty, and fraud have been associated with them iri three. States.
– That does not apply to the farmers’ own pools.
– I am coming to that aspect of the matter. It has been said that this pool will be managed entirely by farmers; that there will be no officials associated with it. I point out that the pool is unlimited in point of time. It provides for a general scheme of wheat pooling; but it is not limited to particular seasons.
– I am prepared to consider points such as that in committee.
– It appears to me that, if the bill passes, a large organization will, of necessity, be established. The wheat merchants, as such, will disappear. I should think that it is unlikely that they will be retained as handling agents. Everybody knows that one of the impulses behind legislation of this kind is to obtain all the handling work for the pool organization. It is desirable that there should be competition in wheat buying, and that Australia should have the benefit of the ca.pita.1 which is thus brought in.
– There is necessarily competition in selling, if there is competition in buying.
– I am not going to ignore that important aspect of the subject. Past experience, I think, has shown that it is better to have a competitive system of buying. In recent years, when we have had pools and merchants operating together, comparisons have been made every season as to the results of their operations. I have received from some source a little card setting out the return to the farmers in certain States from voluntary pools and from merchants.
– Published by the merchants, and not worth the paper on which it is written.
– It is said that, in Victoria, the merchants have paid a higher return than the pools to the farmers. I am unable to say whether that is correct, although the card states that the merchants’ figures are certified by an independent firm of accountants, and are guaranteed to be unchallengable. The pool figures are taken from the pools’ own published accounts. My point is that it is a good thing to have a competitive system, under which costs and charges can be compared. If we have a monopoly in the buying of Australian wheat and sending it abroad, there is no standard of comparison at all, nor is there the check on operations which tends to bring about the efficiency of the existing system of marketing. We have as a guide the experience, not only of Australia, but also of Canada and the United States of America. There are disputes as to the figures, but I am quite safe in saying that, on last season’s operations, the Canadian and American pools are regarded as failures; some say to a large extent, and others to a smaller extent, but there is no continued enthusiasm for the system of pooling in America and Canada. The honorable member for Wimmera (Mr. Stewart), who is vitally interested in the problem of wheat marketing, has asked whether it is not inadvisable to have competition in selling Australian wheat and whether the position is not improved by having a single seller. There is undoubtedly a certain amount of weight in his argument, but there are other aspects to be considered, and. I ask honorable members whether they do not outweigh the advantage of having a single seller in control. Apart altogether from the risk occasioned by having all our eggs in one basket, which is an obvious risk in all pooling systems, we must not forget that certain European countries are reacting against pooling systems and are refusing to buy pooled wheat.
– They are refusing to buy any wheat whether pooled or otherwise.
– They are refusing to buy wheat, particularly pooled wheat, and as the honorable member knows, there is on the other side of the world a definite reaction against pooling - and in particular, against any system under which wheat may be sold abroad on special terms to hold up the market in the interests of any particular country. One of the results of the gigantic pooling system in the United States of America and elsewhere is that Europe has set itself to grow more wheat for its own consumption. Our market is being diminished in that way. Another result is that some of the European countries have determined, as far as possible, to use grain other than wheat. This reaction against pooling systems and controlled selling on the other side of the world is a real element nt the present time.
– That means that we shall have to change our rural system to meet the different conditions in Europe.
– I do not know about that, but no artificial system of this kind will overcome the fundamental economic difficulties of the Australian wheat industry. For these reasons this scheme for the socialized control of wheat is not likely to help the Australian farmer. I realize the difficulties facing the majority of the wheat-farmers, hut I do not think that we shall improve their position by adopting this proposal.
– How would the honorable member help the farmers ?
– That is an obvious question. The position of the farmers is acute, but no permanent relief can be afforded by this scheme, so long as we depend on world prices; and it appears to me that we shall always he dependent on world prices. For relief from a great number of our difficulties Ave have to look to a reduction in production costs. I mentioned earlier this afternoon that there will have to be a drastic reconstruction of the whole of our national economic system unless there is an immediate rise in world prices, and that is unlikely. That form of relief is needed more than anything else, even more than an increase in the local price for the coming season. The wheat, wool, and mineral industries are too big to be permanently assisted by schemes of this nature. At the same time some relief in addition to that already afforded by the States can he justified as an emergency measure. I ask the Government - and in this way I reply to the honorable member for Bendigo - why has it not taken action on the lines of its previous proposal for giving relief and assistance to the farmers? We have, in the last three weeks or so, been dealing with the resolutions of the conference of Commonwealth and State Ministers. I have before me the report of the proceedings of that conference which ended on the 11th June last. In the summary of the main decisions and proceedings of the conference these headings are set out - The conference plan, reduction of expenditure, reduction of interest, additional revenue, bank interest, private mortgages, certain budget adjustments, and assistance to wheat-farmers and unemployed. I had thought that that was the policy of the Goverment. The report reads -
As part of the general plan for rehabilitation, the conference agreed that the Loan Council should negotiate with the banks to provide £2,500,000 for necessitous wheat farmers
We have heard nothing of that resolution, yet it was passed only a few weeks ago as part of the rehabilitation plan. We at least should know from the Government before it asks us to pass this measure, why it is not proceeding with the proposal to which ali the governments of Australia agreed as recently as the 11th June last, or whether, on the other hand, this bill is something additional to that proposal. The policy of the Government as announced last month cannot be easily set aside, yet we have heard nothing of it, although it dealt with the relief of necessitous farmers, which is what is needed at the present time. The Government is in a strange position in relation to this measure. It has refused to introduce a sales tax, on the ground that an increase in the price of flour will result in an increase in the price of bread.
– About Id. a loaf.
– I have no figures for honorable members. What will this measure do? It has a double object, first to bring about a centralized control of the marketing of wheat, which it is said will be controlled by the farmers themselves, and secondly, to enable the farmers to receive a higher local price for wheat than would otherwise be obtained. Those are the main objects of the bill. If a sales tax is rejected because it will’ increase the price of flour, and, in turn, the price of wheat, then this measure ought equally to be rejected because it is designed also to increase the price of wheat and flour in Australia. The Government is in an impossible position, because what it has contended in regard to a sales tax condemns this measure. All the States were represented at the Premiers Conference, and surely that was a suitable opportunity for arranging a pool. Yet that was not the proposal adopted by the conference. Instead, it proposed relief to the necessitous wheat-farmers to the extent of £2,500,000, to be raised by way of loan. The present attitude of the Government, is inconsistent with its attitude towards a sales tax, and, accordingly, the Minister is unable, logically, to invite the House to approve of this bill. For these reasons I am unable to support this legislation.
.- The Deputy Leader of the Opposition (Mr. Latham), in the course of his remarks, suggested that, to some extent, too much had been said on this subject. Just to show what effect propaganda has had on the world’s wheat market, I shall read the statement of President Hoover, as published in the Sunday Sun of the 12th of this month. President Hoover said that, by law, he could not expose the speculators’ names to the public, but he indicated a big ring which was ruinously trying to depress commodity prices, and was ruthlessly plundering needy people. He was referring to the drop in prices that had occured in the wheat pit following the conclusions reached by the committee appointed to deal with the marketing of the surplus production. He realized that propaganda has a definite influence on the world’s wheat market, and he indicated the nature and purpose of the propaganda that was in operation in America at that time. Upon what basis is the price of wheat fixed ? It is either the price prevailing at Liverpool or that in the pit at Chicago, and propaganda which influences those markets has a’ direct effect upon the price which the farmer receives for his wheat. Recently we have seen, in connexion with the ballot of wheat-farmers regarding the formation »f a State pool in New South Wales, propaganda by merchants and others, to the detriment of the producers.
The Deputy Leader of the Opposition (Mr. Latham) attempted to reply to the contention that the Senate had not given proper consideration to the Wheat Marketing Bill. We have definite knowledge, however, that eleven wheat exporting countries are considering the market ing problem along the lines advocated by the present Government for the last twelve months. Unfortunately, the obstruction in the Senate has prevented the Government from giving effect to its policy. In confirmation of that policy I quote the attitude of the Canadian Parliament, which a few days ago arranged credits through private banking institutions to make available a special fund of £12,000,000 for the relief of necessitous farmers and to carry out incidental works which would make possible the lowering of costs in connexion with the marketing of the exportable surplus of wheat. Professor Gustav Cassel, the great Swedish economist, lecturing at the Bankers’ Institute, London, pointed out that the diminished production of gold is insufficient to maintain a stable price level, and the financing of primary production is essential to the development of any plan to bring about economic reconstruction throughout the world. Dealing with the recent violent fall in commodity prices, he said -
Such a fall of the general level of commodity prices was a monetary phenomenon. Since 1915 the world’s gold production had fallen, whereas the production required for stability, had increased in proportion to the continual’ growth of the accumulated stock. At present the total accumulated stock of gold was about £4,070.000.000 (end of 1930); 3 per cent, of that sum was £122,000,000. The annual pro duction,However, was only about £82,000,0011, and thus there was a deficiency of about £40,000,000. Thus, roughly, the present production of gold amounted to only about twothirds of the quantity that would be required for maintaining a stable price level.
This Government, in seeking to create a special credit to finance the wheatfarmers, is only recognizing what Professor Cassel says the world must recognize as necessary to bring about economic rehabilitation. The work of this eminent economist in Sweden alone, marks him as a man pre-eminently qualified to give reliable advice as to how to meet the rapidly and constantly-changing economic conditions. The Deputy Leader of the Opposition said that the Government’s proposals are not sound, and that Ministers are not sincere in regard to them, hut lie failed to adduce any fact in support of that criticism. The whole world to-day is recognizing the necessity for at least a partial departure from the gold standard willi a view to increasing currency, so that would-be purchasers may acquire the surplus commodities that are available to them. The Government’s proposals for the relief of the wheat farmers are sincere, and had they been adopted last year and put in operation they would have proved very beneficial to our people. If increased credits are desirable to create a higher price level, and augment the purchasing power of the people, how can they be better utilized than in assisting those who are bearing the responsibility of wealth production?
The Deputy Leader of the Opposition (Mr. Latham) said that there was a general recognition that the pooling system has proved a failure. That conten ts on is controverted by the attitude of other countries. An international conference was held at Rome in March last to discuss the marketing of the surplus products of the world, and the wheat exporting countries represented there agreed that a special conference was advisable to explore the possibility of evolving plans for the systematic marketing of unsold stocks of wheat and the 1931-32 harvest. That conference of wheat exporting nations was held in London in May; the arrangements were made by the High Commissioner for Canada, and the whole cost was borne by the Canadian Government. The following eleven wheat exporting countries, which are responsible for over 95 per cent, of the world’s wheat export, were represented: - United States of America, Argentina, Australia, Bulgaria, Canada, Hungary, India, Poland, Roumania, Russia, Jugo-Slavia. Those who were responsible for the propa- ganda hostile to the State wheat pool in ew South “Wales, said that there was no possibility of the marketing of wheat being organized and controlled on an international basis. Yet Russia was represented at the conference, and tried consistently to bring about an orderly system for the marketing of wheat. Some of the subjects dealt with by the conference are of particular interest to us. It was pointed out during the conference that as Russia was rapidly altering her economy from that of a predominantly peasant country to one containing a large number of industrial centres, and as her internal requirements of wheat were constantly growing, she could not agree to a general reduction of wheat areas. Wheat-growing in such countries as France, Germany, Italy, and Spain, with the high protection afforded the industry, would continue to be profitable. As a result of discussion, the proposal to limit the areas under cultivation in the different countries, was abandoned. Therefore, Australia, in order to compete against other wheat exporting countries, and create credits overseas, must establish an organization for the orderly marketing of wheat, and not allow the burden to continue to be borne by the producers. The various proposals submitted to the conference were referred for investigation to a committee which subsequently split up into three subcommittees to deal with statistics, the utilization of wheat, and the collation of plans, respectively. The Wheat Plans Sub-Committee of which Mr. F. L. McDougall, the Australian representative, was chairman, resolved that an international wheat organization was essential to meet the situation, and whilst it considered that a quota scheme would prove the most satisfactory way of introducing orderly methods into wheat marketing, it urged that if the quota scheme were not accepted by the conference, the committee should continue to study the practicability of other methods. It is clear that other countries besides Australia have come to the conclusion that a system of orderly marketing is essential to the future prosperity of the wheatgrowing industry. Such an organization can be brought into being in Australia only by a compulsory federal pool. The Deputy Leader of the Opposition referred to the negative vote cast by the farmers of New South Wale3 recently, but that vote cannot be regarded as reflecting the growers’ opinion of the pooling system. The vote was largely influenced by the policy and actions of the Lang Government, and many farmers ware reluctant to endorse a scheme that would be controlled by the State Government. The Parliament of New South Wales had enacted a Flour Acquisition Act, under which the official price of flour to be sold to bakers and the public was fixed at £10 10s. a ton. In Victoria, at that time, the ruling price was £16 17s.6d., and many people believed that the Government of New South Wales was making a large profit out of the consumers of flour.
– What did they do with the money ?
– The Government appropriated the money under the provisions of that bill, for what purpose I cannot say. Some declare that it was to help necessitous farmers. Whatever the purpose, the principle is bad. It is not to be wondered that the farmers of New South Wales refused to give to the State Government a power which it had previously abused. For that reason the vote recently recorded cannot be taken as a true indication of the attitude of the wheat-farmers towards the establishment of compulsory pools.
Queensland has convincingly demonstrated the benefit to be derived by all sections of the community from a properly conducted system of compulsory pooling. I find, from figures supplied by the secretary of the Queensland Pricefixing Commission, that wheat-growers in that State received a very fair price for the whole of their crop. It must be remembered that last season there was surplus production of wheat in Queensland. The following extract on the subject is taken from the Sydney Sun: -
400,000 BUSHELS CLEAN-UP.
Huge Wheat Deal at Good Price.
A large deal involving approximately £70,000 for about 400,000 bushels of wheat was completed in Toowoomba to-day at a conference between the State Wheat Board and representatives of the different milling companies.
The chairman of the Wheat Board, Mr. Aaron Hoskin, announced later that the whole of the surplus wheat in Queensland had been sold.
This comprised second and third grade milling wheat and had been disposed of at concessions of threepence and sixpence respectively on a flat rate of 4s. 21/2d. per bushel, as provided in the agreement between the Wheat Board, the millers, and the Government.
The deal means that there will not be a single bushel of wheat carry-over in Queensland, and that growers will receive at least 3s.9d. per bushel for their wheat.
It is interesting to note that in Queensland, where the price for wheat was so satisfactory in comparison with that received by the rest of the Australian growers, the price for a 2-lb. loaf of bread was 5d. in Brisbane, while in country towns at a reasonable distance from the coast it was only 51/2d. Even in the most remote parts of Queensland, where the flour had to be carried hundreds of miles, the price of a 2-lb. loaf of bread did not exceed 6d. The official price of a ton of flour was £12 12s. Those figures prove that, with an efficient organization, it is possible for any State which so desires to serve both the producers and the consumers. In New South Wales, even though the official price for flour was fixed at £.1.0 10s., and the fanners received only1s.5d. a bushel for their wheat, consumers were charged from 51/2d. to6d. for a 2-lb. loaf of bread. That is largely clue to the attitude of those who oppose the objective of the Labour party to introduce price-fixing legislation, which, in conjunction with a compulsory system of pooling, will protect the interests of all sections of the community.
The bill indicates that the farmers will have representation on the proposed board of management. A good deal of propaganda has been levelled against the system of compulsory pooling, and the false belief has been spread that farmers are not business men, competent to manage their own affairs. Our farmers possess intelligence equal to that of any other section of the community, and their common sense will ensure that a suitable person is selected to fill this position on the board of management.I believe that the most competent business man should be elected to the position. Obviously, to get good men, we must be prepared to pay for their services. As an illustration of what can be done, I refer to the wonderfully efficient management of the British and Australian Wool Realization Association. Despite the fact that there was a strong agitation against the continuance of that scheme, because of the high salaries paid to those who administered it, I contend that the expenditure was in every respect justified. If it is possible, in connexion with this bill, to secure the services of men whose business ability is equal to that of Sir John Higgins and Sir Arthur Goldfinch, the wheat-farming interests of Australia will be well served.
Sitting suspended from 6.15 to 8 p.m.
– There is only one other matter that calls for special consideration. It is contained in the last clause of the schedule, and is a matter primarily for consideration in committee. I shall not deal with it at this stage. 1 am of opinion that the rehabilitation of the wheat-growing and pastoral industries is the prime factor necessary to bring Australia back to normal conditions. The man on the land must be given some security. The wheatgrowing industry is suffering from undercapitalization, and the result is detrimental to the nation as a whole. I should like to see incorporated in this bill a guarantee in respect to the price of wheat. There appears to be a general realization of the need for some special system of finance to relieve the wheatgrowers. I agree with the Deputy Leader of the Opposition (Mr. Latham) that they are in need of immediate assistance. The present Government has done its utmost to assist them. Other wheat exporting countries expect Australia to adopt a system for the orderly marketing of wheat; they expect the nation to arrange for the disposal of its chief product. The final conclusion of the subcommittee which was appointed to deal with this matter at Canada House, London, reads -
It is also clear that all countries approached the problems in a spirit of friendly collaboration and earnest endeavour to pave the way to the establishment of some system whereby orderly’ marketing of the world’s wheat surpluses would be assured. Contrary to the impression which one might have gathered from press reports from London at the time of the conference, Russia during the discussion, showed a spirit of complete co-operation. While disappointment was expressed at the conference that the United States of America found it impossible to agree to any definite plan, there was a general feeling that it would have been remarkable if it had been found possible to achieve such definite collaboration n;t the first meeting of an international con ference at which such differing national interests and temperaments were represented. Nevertheless, exceedingly beneficial contacts were made, and the continued activities of the standing committee in maintaining contact and collaboration between the eleven wheat exporting countries, cannot but have good results.
That report emphasizes the necessity for a national pool, and for Australia being alive to the world position. The outstanding need in Australia to-day is therehabilitation of our finances. Any scheme of restoration which ignores the interests of the wheat-growing and pastoral industries must fail. The rehabilitation of those industries must form the kernel of any plan to restore the finances of the country. Professor Gustav Cassel, the Swedish economist, says -
A rather singular objection to the gold economizing policy which had repeatedly been made even by people of some authority was that the whole policy would be superfluous, as it was always possible by a higher development of their banking technique and by withdrawing gold coins from circulation to increase the supply of means of payment that might bo based upon a certain amount of gold. This was precisely the programme of the goldeconomizing policy. But the advocates of this programme had not contented themselves with leaving to some indefinite future all practical measures for the stabilization of the purchasing power of money. On the contrary, they had seen that such measures were already necessary in connexion with the general return to the gold standard. The exclusion of gold from actual circulation, which had been of such immense importance for maintaining the stability of the value of gold, had from the very beginning formed a part of the goldeconomizing policy.
Finally, they had to consider the objections that were always being brought forward by that type of statistician who believed everything in economic life to be predetermined by cyclical movements represented by mathematical curves. This superstition, which was an Occidental revival of old Oriental fatalism, naturally militated against any endeavour towards conscious control. According to these mathematical fatalists, they had, in a situation such as the present, only to sit down and examine these curves in order to find out when an upward movement was predestined again to take place. Indeed, such passivity was unworthy of men of western civilization. In all other domains humanity had made the most persistent efforts to gain command over nature, and in many respects had succeeded in a really marvellous way.
Those who oppose the creation of a special currency to assist the wheat-growers place their faith in a gold currency, which Professor Cassel says is faulty, and may prove disastrous. Any rehabilitation scheme which provides only for the giving of sustenance to the unemployed, and disregards the needs of the wheat-farmers, is incomplete. Instead of providing £12,000,000 during the next twelve months to provide sustenance for the unemployed, it would be better to make £6,000,000 available to the primary producers by way of a guaranteed price for wheat, because that would give them a sense of security, and enable them to provide work for others. If there is any way by which currency can be provided, it should bo used to give a guarantee to these men, for then the money would flow through the ordinary channels of commerce and do the most good to the general community. In no other way can we rehabilitate this country. In London to-day representatives of many nations are met to discuss the same position as confronts us in Australia. The problem confronting them is by what means can sufficient currency be made available to increase the purchasing power of the people of the world. Unless we recognize our responsibilities, and give a guarantee to those who are tilling the soil, we shall be unable to play our part in solving the difficulties with which the world is confronted. Those who place obstacles in the way of the Government in its attempt to assist those who would increase the productivity of the soil, have much to answer for. I have not abandoned all hope of a guaranteed price for wheat. Unless we give some such guarantee I fear that we shall live to regret our inaction. A fiscal policy which, while protecting others, neglects those engaged in primary industries, is incomplete. Scientific protection protects the man on the land as well as the man engaged in secondary industries. I hope that the House will realize the immediate necessity of doing something to assist the wheat-farmers of this country, and of doing it in the best way, namely, by agreeing to a guaranteed price for their wheat, because if that is done the money will be used to the best advantage.
.- I am glad that the Government has not allowed the result of the recent ballot of wheat-growers in New South Wales to influence it to the extent of not proceeding with this measure. I believe that the issues that were raised in New South Wales in connexion with that ballot, and the circumstances associated with the ballot, were such that the result of the voting does not give a true indication of the opinions of the farmers of that State regarding the principles embodied in this measure. I propose to quote briefly from some of the literature issued during the campaign which culminated in the recent ballot, in order to prove my contention that the issue raised during the campaign was not the organized marketing of wheat on a Commonwealth-wide basis, but that embodied in the slogan of the opponents of the pool, “ A compulsory pool is a Lang pool “. I have here some literature which was issued by the Wheatgrowers Defence Association of New South Wales, the president of which body is Mr. R. S. Drummond, of Lockhart, a wheat-grower, it is true, but known better as a member of the board of directors of the Commonwealth Bank. I admit that the statement in this pamphlet appears under the name, not of Mr. R. S. Drummond, but of the acting president of the association, Mr. Arthur C. Aston. Nevertheless, the literature bears the name of a man who is one of the directors of the Commonwealth Bank. I do not say that that gentleman deliberately used his position as a member of the Commonwealth Bank Board to influence wheat-growers - indeed, it is possible that he refrained from taking any active part in the campaign - nevertheless, the fact remains that this literature bears his name. By virtue of his membership of the Commonwealth Bank Board, that name would influence farmers to vote in a certain direction.
– The only thing that influenced the farmers was that Mr. Lang was in office in New South Wales.
– I have not the time to quote the whole of this pamphlet; but I wish to mention that the whole of the statements it contains are described as facts. The pamphlet states, “ The facts I have put before you should be well considered before sending in your vote. If, after studying these facts …” A sample of those alleged facts is contained in the concluding paragraph - a kind of whirlwind peroration, evidently written by an expert publicist, hired for the purpose by the financial interests which fought against the pool. The paragraph reads -
Now, - If you want to boost Langism, if you want to help the communists, if you think the Trades Hall is your salvation, then vote for the pool by all means. If you think that continued high production costs, combined with the blessing of political compulsion and with a dash of luck thrown in, will bring back prosperity, then go ahead. But - don’t forget there are wreckers abroad.
One can visualize the poor unfortunate farmer in the outback sitting shivering beside his wireless set - for this sort of thing was broadcast repeatedly - listening to statements of that kind, designed to play upon his feelings. It continues -
Look at the tragedy of the Savings Bank and the Rural Bank! Look what the tariff and the arbitration acts have done for you! Think of all those before voting! If you get a compulsory pool you will become cogs in the Labour machine. Repudiation has become a policy, and you should ask yourselves what guarantee there is that we farmers will not in turn be repudiated. Beware of red tape and red politics !
The same individual broadcast a series of talks, the first on the 21st June, the second on the 24th June, the third on the 28th June, the fourth on the 1st July, and the fifth on the 5th July, and they all contained statements similar to that I have quoted. They represented a deliberate and wicked perversion of the facts.
– Done intentionally.
– Yes. It is a fair deduction that the recent vote in New South Wales was not given on the real issue as represented by this measure.
– The trouble was that the farmers were afraid of the Lang Government.
– That, I believe, is true. Rightly or wrongly, an overwhelming majority of the producers of New South Wales distrusts the New South Wales Government, and the opponents of the pool cleverly played upon that, and made it an issue of the vote. The pool would have been formed and operated under New South Wales legislation. In this bill it is proposed only to link up the compulsory pools formed under State legislation in the various States. Even if -we had constitutional power to do so - which we have not - there is nothing in the bill which would enable us to coerce any State into setting up a compulsory pool. No State could come into the scheme unless a majority of the growers in that State approved at a special ballot taken for the purpose, nor could the scheme become operative unless three of the States desired to take action.
While the machinery clauses of this bill follow in broad outline those of the first compulsory pool introduced by this Government, it differs in one important matter - there is no provision for a price guarantee. This measure deals with the marketing of future wheat crops, but the responsibility of the Government towards the farmers in respect of last year’s crop is not touched upon. A responsibility rests, not only upon the Government, but upon Parliament as a whole, to honour the promises made to the farmers, who were appealed to by the Prime Minister (Mr. Scullin) and by the State governments to produce a record crop. While it is true that there was a difference of opinion between the various parties in this chamber regarding the conditions under which the 4s. a bushel guarantee was to be offered, the Opposition, by virtue of an amendment moved to the bill identified itself with the promise to guarantee 4s. a bushel to the farmers. I do not propose to follow the history of the rejection of that measure, because it would serve no useful purpose at this time. In response to the appeal made to them, the farmers last year produced 212,000,000 bushels of wheat. Of this quantity 190,000,000 bushels were sold, leaving some 22,000,000 bushels on the farms for seed wheat; fowl feed, and other purposes. The average price received can be only approximately arrived at because the pools have not finalized then accounts; but it is not putting the figure too high to say that the average price at country sidings - which was to be the basis of the 4s. guarantee - was not more than1s. 9d. a bushel. It was probably considerably less than that, and farmers who, through no fault of their own, had damaged wheat for sale, would, of course, receive very much less. Thus the farmers received for f.a.q. wheat not more than 1s. 9d. a bushel, instead of 4s. which chey were led to expect. This represented a loss of 2s. 3d. a bushel on 190,000,000 bushels, which works out at £21,125,000. While the farmers received considerably less than half what was promised to them, they had to meet in full the expenses incurred in the production and marketing of their crop. Most of those charges are still unpaid, and remain as a liability which the farmers have to shoulder. As an illustration of what I mean, I shall quote what happened in regard to cornsacks. When the farmers expected to receive 4s. a bushel, for their wheat, they had to pay 9s. a dozen for cornsacks, which represents 3d. a bushel, so that the net return to the farmers would have been 3s. 9d. at country sidings. Actually, the farmers received only ls. 9d. for their wheat, and as the cost of bags still represented 3d. a bushel, their net return was only ls. 6d. a bushel. Obviously, 3d. a bushel represents a much higher percentage when deducted from ls. 9d. than when taken from 4s. The same thing applies to rail freight. The freight from my own railway siding, where I deliver my wheat, was 5£d. a bushel when wheat was fetching 7s. a bushel, and now that the price has fallen to its present level, the railway freight is. still 5f d. a bushel. Whatever the price of wheat the sum of 5§d. a bushel must be deducted and paid into the revenue of the Victorian railways. It is the same, of course, with municipal rates, shire rates, machinery costs, and taxes of all description. Everybody demands from the unfortunate wheatgrower 100 per cent, of what he owes. When the farmer is unable to discharge his liabilities, to machinery firms, and to those who have sold .him manure, &c, he has to allow the debt to stand over, and pay 10 per cent, interest on it. That is the present position of the wheatfarmers, and this bill, does not help them in that respect at all. Even if the bill is passed, it will provide no answer to the question : What is the Government going to do regarding the promises made to the wheat-growers concerning last year’s crop? That crop was bought and sold in a haphazard fashion. Private buyers in Australia were competing with the pools. I can speak with authority of what happened in regard to the voluntary pool in Victoria. The agents of Japanese and Chinese buyers were able to play off the merchants and the pool against each other, with the result that prices were depressed even below what they need have been. One of the agents of the Canadian wheat pool, referring to the manner in which Australian wheat had driven Canadian wheat off the Chinese market, said that Australian wheat was being sold in China at 5d. a bushel lower than the Canadian pool could quote. Why was it necessary to go below other sellers to the extent of 5d., when Id. a bushel would have been sufficient to make a sale. The Australian wheat was flung on the world’s markets without thought or consideration. It was sold for what it would bring, and the whole weight of the sacrifice fell, not upon the railways, or the machinery merchants, or the wheat merchants - for the latter received their profits as usual - hut upon the wheat-growers alone.
Some of my friends have pointed out to me that no price guarantee is provided1 in this bill. No one fought harder for a guarantee than I did, but unless the Government carries out its promises regarding the guarantee given last year, it does not matter very much to the average farmer whether this bill contains ‘ a guarantee or not. In spite of all the promises that have been made from time to time, not one farmer has received a single penny from the Government in respect of last year’s crop. After the failure of the 4s. guarantee plan, the Government; just before last harvest, hastily brought forward a measure authorizing the payment of 3s. a bushel f.o.b. It has been criticized, in my opinion unfairly, because of its action in regard to that bill, and I think it is only right for me to say that the measure was brought forward as the result of urgent representations made by other members of the Country party and myself. We called the attention of the thenActing Minister for Markets (Mr. Forde) to the deplorable condition- of the wheatgrowers. We pointed out that they would get only ls. 6di. and ls. 8d. a bushel for their’ wheat, and that unlesssomething was done to> give them ait least’ 2s. 4d. or 2s. 6d., thousands of them would! be ruined and sold up. Parliament was- about to adjourn, but we urged that, even if it were the last hour of the session, the Government should introduce the bill. The Government agreed to do so. A measure was hurriedly drafted, and pushed through Parliament. It was subsequently found to be unconstitutional. At any rate, doubt was raised as to the power of the Commonwealth Government to guarantee repayment to the Commonwealth Bank. But the real reason for the failure of the bill which provided for a guarantee of 3s. per bushel f.o.b. was that it was impossible for a compulsory pool to be set up. Some of the wheat had already been delivered or was in process of delivery to wheat merchants. The latter had already appointed their agents and arranged for stacks. In short, they had commenced operations. That being the position, along ‘ with others, I suggested to the Government that it would be unfair to those buyers to come along at a late hour and, metaphorically speaking, chop off their heads, and that they should be permitted to work within the confines of the bill. The Acting Minister for Markets accepted the suggestion, and invited the private merchants to Canberra to discuss the provisions of the bill with him before it was submitted to Parliament. He also urged their co-operation with the wheatgrowers; but that co-operation was not given.
– That is so. Threats were even made during the progress of negotiations.
– Whilst none of them were enthusiastic in regard to the measure, and several expressed hostility towards it, at least one of the- leading buyers of Australia said that he would fight it to a finish. He refused to cooperate in the slightest degree.
– Who was he?
– I had no intention of mentioning the name, but now that the honorable member has asked for it, lest I be misunderstood by refraining from doing so, I may say that it was Mr. Harold Darling, one of the leading wheat merchants of Australia, and head of the firm of John Darling and Sons.
– Did he do anything wrong or illegal?
– The honorable member knows that I am not saying that he acted illegally. .
– Then on what ground is the honorable member attacking Mr. Darling?
– On the ground that he refused to co-operate in the endeavour of the Government to pay to these farmers 3s. a bushel f.o.b.
– Which he was perfectly entitled to do.
– Yes, but it was rather inconsistent for him to go about posing as a friend of the farmers.
– So he was. He has rendered them better service than many of the pools.
– I have no wish to debate that point, except to say that the failure of the act which provided for a guarantee of 3s. a bushel f.o.b., was largely due to the refusal of the wheat merchants of Australia to co-operate with the Government in carrying out its provisions. When the Government had expressly included in the measure provisions to enable the wheat merchants to carry on, it was rather unkind of those merchants to refuse to carry on under those provisions.
The Deputy Leader of the Opposition (Mr. Latham) referred this afternoon to the proposal put forward at the Premiers Conference to provide £2,500,000 for the relief of necessitous wheat-growers. It is true that that proposal was made, but it would not have met the situation, because I very much suspect that the Treasurers of the various States would have applied the money to the repayment of the sums already advanced by them to necessitous farmers.
– I believe that that was the intention.
– I agree with the honorable member. It would not have provided additional money for the wheatgrowers. It was a proposal, which was somewhat akin to the passing of the New South Wales Flour Acquisition Act, under which measure a large sum of money - the amount has not yet been disclosed - has b.een received by the Treasurer of the State of New South Wales, but has not been paid as an additional sum to the wheat-growers. The measure has merely imposed a new form of taxation in New South Wales, under which the consumers of flour have been taxed, the revenue derived having ‘been paid into the Treasury to recoup the Government for advances already made to the necessitous wheatgrowers of the State. Similar advances have been made in other States.
The Deputy Leader of the Opposition suggested that a flour tax should be imposed.
– That recommendation was strongly urged last year.
– That is so, and it was supported by honorable members of the party to which I belong, including myself. Because there was no other way of getting money to help the farmers, it was suggested that this was a source of revenue which the Government could tap for the purpose. The Government, however, refused to impose this tax. I think that it should have done so. Nevertheless, it is strange that the Deputy Leader of the Opposition, who so strongly resents government interference, should suggest it as an alternative to this bill. The measure provides machinery by which the farmer may impose a tax of this kind to increase the price of wheat, but the honorable member has suggested the imposition, by legislative action, of a flour tax, by means of which money would be paid into the Treasury, and paid out again to the farmers. It is strange, I repeat, and rather inconsistent, for such a suggestion to come from the champions of private enterprise, who hold up their hands in horror at government interference, and cry “Less government in business.” But the Deputy Leader of the Opposition said that the real remedy is to be found in a reduction of production costs. When the party to which I belong endeavoured to incorporate in the Premiers’ plan a proposal for the general reduction of the tariff, in order to reduce production costs, his party, with one or two notable exceptions, voted against it. The honorable member for Wakefield (Mr. Hawker), and the honorable member for Perth (Mr. Nairn)- were the only two members of his party who were consistent. They certainly did vote for the application of the policy which the honorable the Deputy Leader of the Opposition has recommended to-day.
– The Deputy Leader of the Country party (Mr. Paterson) knew perfectly well that the amendment he moved could have no effect in reducing anything. It was nothing but a sham fight he put up.
– The reason given by the Deputy Leader of the Opposition for not supporting the amendment was that, by voting for it, he would be helping to put the Government out of office, which he and his party were not willing to do while the Government was putting the Premiers’ plan through Parliament. But was it not the same honorable member who, during the consideration of the Commonwealth Debt Conversion Bill, moved an amendment providing for the payment of small bondholders at an earlier date than was provided for in the bill, which amendment, if accepted, would have affected from £50,000,000 to £100,000,000 in the conversion loan, and thereby smashed the Premiers’ plan? He knew that.
– That is unfair. When the position was explained, the honorable member did not press the amendment.
– I understand that a division was taken upon it, and that the Government narrowly escaped defeat. That would have meant the smashing of the Premiers’ plan.
I believe that this bill is necessary for the production and marketing of wheat in Australia, and for the co-ordination which is essential. We have now an open market system. The opponents of the bill put forward no constructive alternative. In effect, they say, “ Leave things where they are.” But where are the wheat-growers of Australia to-day under tlie present system? Where are the blessings of competition we are hearing so much about? Never before in the history of Australia have the wheat-growers been in so bad a position as they are in to-day. Yet honorable members say that they should be left to take care of themselves. The Government has come forward with a proposal which, at least, has the merit of containing a new proposal to overcome the difficulties of the wheat-growers.
– There was no competition between the merchants before the State pools were formed.
– I do not suppose that a compulsory Commonwealth pool will do all that its supporters, including myself, hope for it, but let us try it. There are two essentials to the successful conduct of such a pool. In the first place, it should be free from government control, and, secondly, it should be under expert management. The operations of Bawra furnished a striking illustration of the value of co-operative marketing. Certainly, that scheme did not involve the establishment of a compulsory pool in conformity with the present proposal, but it introduced a change from the competitory system then in vogue for the selling of wool, and brought into being a coordinated and co-operative system, at a time when the wool market was demoralized. There was talk of tipping the wool into the sea or burning it; all sorts of fantastic suggestions were made for getting rid of the surplus. When Bawra was formed, hundreds of millions of pounds of wool were successfully marketed. There was an interference with the law of supply and demand, in that a huge quantity of wool was taken off the market, but the result was that prices recovered. It was the finest example of co-operative marketing that the world has ever seen.
– We received £30,000,000 more for our wool than we otherwise would have got.
– That is so. Why is compulsion necessary in dealing with wheat-growing? It may be urged that there is nothing to prevent the growers from organizing, as other primary producers do ; but the fundamental difference between wheat-growers and other producers is that the former supply a commodity that is immediately marketable. In the case of butter, the primary product must be sent to a factory; in th-i case of dried fruits, to a packing shed; and in the case of sugar, to a refining mill. That is one reason why it has been impossible to obtain co-operative action, to the exent of 100 per cent., on the part of the wheat-growers. They are scattered far and wide throughout Australia; they live in remote localities; and it is im possible to obtain that individual contact with the growers that is essential to cooperation. This fact, of course, makes the farmer an easy victim of the insidious propaganda indulged in by those who, while posing as his friend, really batten on him.
This bill will impose no compulsion on the farmers, unless they vote in favour of the proposed pool. I was pleased to hear the Minister say that he was prepared to consider any reasonable amendments or suggestions, with a view to improving the bill. I think that paragraph c of sub-clause 2 of clause 12 of the agreement should be amended. It states that prior to the effecting of the equalization between the State Wheat Boards, any advantage of a State arising “from an excess in the average price enjoyed in respect of wheat of any season sold for use or consumption within the State over the average price of Australian wheat of that season sold for export “ shall be taken into consideration. I suggest that the Government should consider striking out the words “ the average price of Australian wheat of that season,” and inserting in lieu thereof, the words “ the prices customarily enjoyed in that State,” or words to that effect. The phrase now embodied in the agreement is capable of misinterpretation. This provision was inserted in the agreement as a result of the conference of representatives of the wheat-growers that was convened in February, 1930, by the Minister for Markets (Mr. Parker Moloney). In Western Australia, which is nearer the world’s markets than are the eastern States, lower wheat freights are enjoyed; but, under a scheme that provides for an Australian price for home consumption, Western Australia, with its smaller consuming population, is at some disadvantage. The Western Australian growers, through their representatives, asked at the conference that they should retain their freight advantage, and, at the same time, they desired the full benefit of the higher consumption price to be received in the eastern States. A fair compromise would be for the Western Australian growers to abandon their geographical advantage in the matter of freight, in return for their share of a higher home consumption price.
– Why this change of policy since the conference?
– I do not wish to wreck the scheme by promoting squabbles between the various organizations of wheat-growers. The bill proposes to confer upon the Federal Marketing Board powers which will enable it to adjust equitably any differences that may arise between the boards in the various States. It is impossible to draft provisions that will meet every possible circumstance; but I am sure that any differences will be amicably settled. I trust that the House will pass the bill. The wheat industry of Australia is now faced with the fierce competition of the world’s markets, and, if it is to be carried on successfully, every encouragement must be given to it. Production costs must be reduced by all legitimate means. The success of this industry will benefit, not only the wheat-growers, but also the secondary industries that are largely dependent upon it, as well as thousands who are directly and indirectly interested in their prosperity.
.- The honorable member for Calare (Mr. Gibbons) loses no opportunity to make attacks upon the Premier of New South Wales. He has, apparently, been bitten by the anti-Lang microbe. His argument that the Lang Government is responsible for the defeat of the wheat-pooling proposal in New South Wales is nonsensical. I think that the honorable member for Wimmera (Mr. Stewart) has clearly shown that the adverse vote recorded was due to the intense, misleading, and, in some cases, lying propaganda for those who were interested in getting hold of the farmers’ produce and making a profit out of the handling of it. It is vital for every country to stabilize its primary producing industries, because nothing is so valuable to the community as its food supply. Arts and sciences are of little value to a people, if their food resources fail. As Cecil Balfour Phipson has declared, food should be the basis of values. One of the greatest factors in improving civilization has been the constant effort on the part of man to make food supplies safe. This bill deals with our great staple product, wheat, which provides the bread of the nation, and, so far as it helps in the organization of the co-operative marketing of wheat, it is to be commended; but it only touches the fringe of the subject. I move -
That all the words after “ be “ be omitted, with a view to insert in lieu thereof the following: - “ withdrawn, and immediately reintroduced, containing provisions for the stabilizing of the wheat industry over a period of three years, by fixing the price for wheat at a sum based on the average cost of production, plus 30 per cent.”.
I shall endeavour to show how the farmers could be guaranteed such a price. I submit the amendment because the measure falls lamentably short of affording reasonable protection to the wheatgrowers, and does not provide the means whereby an industry which is of vast importance to Australia, can be stabilized. Unfortunately, owing to the low prices which have prevailed, the wheat industry is languishing almost to the point of death; but its value to this country is so great that we dare not allow it to go out of existence. This measure embodies a much less ambitious scheme than the Minister (Mr. Parker Moloney) has previously brought forward in the interests of the wheat-growers. It provides another illustration of the weakness of the Government, which is again surrendering to the power of another branch of the legislature. I have moved the amendment in order that greater assistance may be rendered to the farmers than can possibly be given under this measure and that the wheat-growing industry may be stabilized. The first essential is to provide for a compulsory world-wide wheat pool, and to fix the price of wheat on the cost of production, plus 30 per cent. With world-wide organization, we should have representatives - not in an ambassadorial capacity, with elaborate offices - in the capital cities of every wheat-producing and consuming country. Those representatives would keep in touch with the fluctuations of the wheat market, and supply correct information, weekly, or monthly, concerning the wheat position in the countries where they were established. Under such a system the primary producers would not be at the mercy of the market-riggers, who are directly associated with the cable and newspaper companies, which arrange for messages to be flashed from one country to another to enable the market to be manipulated in their own interests. [Quorum formed.) When they want to “ bull “ the market information is flashed throughout the world that there is a wheat shortage, and when they wish to “ bear “ it they report that Russia, or some other country, is likely to inundate the market, or that the American crop has exceeded all expectations. In the latter case the “ go-getter “, or his representatives, then gets busy in our wheat areas, and tells the farmers that they had better take the price then offering because within a few days it may fall by 2d. or 3d. a bushel. The unfortunate wheat-grower is not only penalized in that way, but is continually being harassed by the bankers and the store-keepers, who sometimes have to give him credit for twelve months, or even two years. I am not blaming the storekeepers for the action they are sometimes compelled to take; they have to meet their commitments; but the attitude of the banks towards the wheat-growers has been unnecessarily drastic. The “gogetters “ stampede the farmer into selling his product at panic prices.
– The Premier of New South Wales promised the farmers 7s. 6d. a bushel.
– I am not dealing with the action of any State Premier, but am exposing the tactics of the “gogetter such as John Darling, and others of that type, who subscribed to the £5,000 paid to the honorable member for Warringah (Mr. Parkhill) some time ago to keep him out of this Parliament.
– You are quite wrong there.
– When it was found that the American wheat crop was being sold six or seven times over before it was actually harvested, the American Government intervened. What opportunity has an Australian, American or Canadian farmer to make a’ success of wheat-growing when he has to contend with the activities of capitalist organizations that are continually beating him to the ground? Under the system which I have proposed, there would be continuous control over our wheat stocks, and the necessary finance could be made available through the Commonwealth
Bank. Wheat which produces its own credit would then be taken into the nation’s storehouses, and released when the opportunity was favorable, instead of being thrown on to the world’s markets and’ sold at panic prices merely to meet the demand of the hankers and the storekeepers. Under a proper system of national control, wheat could be released according to the demand, and on information received from the representative… of a world-wide organization.
– The United States of America and Canada attempted such a scheme.
– Such a scheme was never adopted in Canada. For a period, a system of voluntary pooling was in operation ; but for one-half of the time the pools were white-anted by organizations such as those represented by the honorable member for Warringah (Mr. Parkhill).
– There was never more than 60 per cent, of Canadian wheat in the Canadian pool.
– A proper stabilization scheme such as I suggest would provide for the payment of good wages and reasonable conditions for the workers engaged in the industry. If, under my proposal, the farmer was paid 5s. a bushel, and the price realized was 5s. 3d. or 5s. 6d. a bushel, the balance would be paid into a reserve fund to meet possible deficits in subsequent years.
– There would be deficits.
– That is admitted. It is said that farmers are at present selling below the cost of production, and that some of them will be compelled to leave their holdings. The suggestions I am making are met with sneers and grins from some honorable members opposite who do not realize the significance of such a proposal. If they have not sufficient mentality to apply themselves to national problems why do they not tell the people that they are incapable of doing the work which they were elected to perform. It is the responsibility of this Parliament to submit a workable scheme in the interests of the nation, and in doing so to assist the wheat farmers who are in need of immediate help. If the wheat-growers were properly organized they would be able to obtain a fair return for their labour, and be able to live in reasonable comfort. I am not speaking on behalf of those who desire to make a fortune in a few years and live in comfort in a city flat, but of those who undertake farming as a permanent occupation. What do our losses amount to? In the affairs of the nation they are no more than those of a member of a household who on being supplied with a couple of chops and some vegetables, satisfies his appetic and leaves half a chop, which eventually finds its way into the garbage tin. As Australia experiences periodical droughts, losses are inevitable. The adoption of this scheme would necessitate the provision of national granaries in which one or perhaps two seasons’ crop would be stored from which supplies could be obtained during periods of drought. That was the policy of the Egyptians thousands of years ago. Under, the present system, a wheat-farmer who requires seed or feed wheat during a drought period has to pay double the price at which he previously sold it. There should be a national warehouse from which he could obtain supplies when he required them, and these could be returned to it during period of normal production. None of those proposals are impossible; in fact, all of them have been tried, some to a greater extent than others. They should be acceptable to this Government if it is prepared to shoulder its responsibilities to the nation. I am speaking in the interests, not of any particular farmer or individual, but of an industry from which this country has to obtain the bread of life. We shall destroy this industry if we allow those engaged in it to become the prey of the wheat merchants, whose one desire is to get rich quick. We pride ourselves on the fact that in our march of progress we have far outstripped ancient civilizations, but we could learn a lesson from some of those civilizations in regard to the importance of primary production. As the honorable member for Wimmera (Mr. Stewart) has said, this hill does not touch the problems of the wheat industry. Honorable members will no doubt criticize the proposals that I have put forward, but I challenge them to examine those proposals, one by one, and to point to any defect in them. If we cannot devise some scheme whereby the primary producer .will be guaranted a price above the cost of production, our primary industries must fail. Honorable members opposite say “ Reduce the cost of production “. The honorable member for Wimmera dealt effectively with the contention of the Deputy Leader of the Opposition (Mr. Latham) that costs of production must be reduced on our primary industries if these are to flourish. Honorable members opposite have an open mind in regard to wages, but their mind is closed in respect of any suggestion to restrict the operation of the wheat merchants. The reduction of wages is the beginning and end of their philosophy. They seem to forget that a decrease in the purchasing power of the community .brings in its train a corresponding decrease in tlie consumption of our products. The home market is the best market, and when that is properly developed there will be no need for us to look to oversea markets for the disposal of our surplus products. We should exploit the home market by increasing the purchasing power of the community. We should provide our own people with sufficient food before we attempt to sell our products overseas at starvation prices. The object of this amendment is first to stabilize the wheat industry, and, secondly, to improve the home market. Some time ago the wool-growers of this country paid some thousands of pounds as their contribution towards a world-wide advertisement to grow more wool. It was a laudable cause, and I have no objection to it, but the fact remains that while the wool-growers were contributing to the cost of that advertisement, tens of thousands of our children were shivering for the lack of woollen garments.
– Woollen garments cost too much.
– In any case the great mass of the people, because they have no purchasing power, are unable to buy woollen garments. Thousands of our Australian citizens are subsisting on the dole. For many years, and certainly during the life of this Government, we, in the ministerial corner, have suggested methods by which the purchasing power of the community could be increased, but up to date our suggestions have fallen on deaf ears. The time is rapidly approaching when the Government will be forced to accept our proposals, otherwise an overwhelming majority of the people will sweep it into political oblivion. This Government is not prepared to tackle seriously the problems confronting Australia. It resorts to camouflage, makebelieve, and self-hypnotism. It has indulged in sham fighting, and this bill affords another instance of that, because the Government is trying to make the farmers believe that they are to receive some benefit from it, when, in actual fact, they are being left to the mercy of those who have exploited them for many years past.
.- The honorable member for Werriwa (Mr. Lazzarin i) referred to what he described as sham fighting on the part of the Government. I well rememberthe leader of his party saying, a little while ago, that he intended to support an amendment moved by the deputy leader of the Country party (Mr. Paterson); but, when the vote was taken, not one member of his party whs present. There could be no clearer instance than that of sham fighting. The general argument of the honorable member was much along the lines of the promises made by the leader of his party, not in this House, but in the New South Wales Parliament. Mr. Lang, at the last State election, led the farmers to believe that he would, if returned to power, be able to guarantee them 7s. 6d. a bushel for their wheat. A price equivalent to the cost of production, plus 30 per cent., as advocated by the honorable member, is possibly a shade less than 7s. 6d. a bushel; but it is near enough to it to cause us to put the honorable member’s suggestion in the category of Mr. Lang’s promises, that is, of promises not to be taken seriously. There are much more serious proposals which require some answer from the point of view of the wheat-growers. When the honorable member for Wimmera made certain disparaging references to an individual wheat merchant, the cries of delight that came from the other side of the House revealed what, in their opinion, is the principal merit of the bill, namely, that it will destroy the business of the open wheat market; that, it will destroy the wheat merchant, and force the farmer to market his wheat through a centralized authority. I have no brief for any particular wheat merchant, but I say that the wheat merchants generally have given useful service to the farmers. For some years they have consistently operated side by side with the pools in Australia, and, excepting in Western Australia, they have paid the farmers far more than the returns from the pools. Therefore, any proposal to prevent the farmers from selling their wheat through this more profitable channel, and to force them to sell through one central authority, merits the most careful scrutiny on the part of the representatives of the wheat-growers in this House, and particularly of those who are wheat-growers themselves. I am a wheatgrower. We arc out, not to get the farmer’s vote, but to see that he gets the maximum price for his wheat, and I cannot see that this bill will help him to obtain an increased price for his product. The Minister gave a summary of the advantages which he considered the farmer would derive because of the operation of this legislation. He said, first, that it would enable the farmer to secure an increased price for wheat marketed locally. That is the only advantage that this bill will confer on the farmers ; but, in its present form, it has many disadvantages which will more than offset the advantage of a small additional local price.
– What are the disadvantages?
– I shall mention them later. The Minister also suggested that this bill would eliminate the competitive element, and enable the wheat-growers of Australia, combined with those of other countries, to secure a better price generally for their product. That idea has done more than anything else to place wheat in one of the weakest positions that is occupied by any commodity that is being offered for sale in the world to-day. It was that idea which, in the United States, Canada, and to some extent in Australia, led to the holding back of wheat and the building up of the tremendous surpluses that have caused the price to be depressed far below the average commodity price level of to-day. Desperately low though the price of wool is, compared with what was paid in pre-war years, it is proportionately half as high again as the price of wheat. The present day price of wheat is not very much more than half the pre-war price, even, taking into consideration the value of exchange ; whereas the price of wool is only a little below the pre-war price. That is due to this idea, which seems to have seized upon people of limited experience, but of unlimited ambition, that if the distribution of commodities can be controlled, if they can be held back from the market, the consumers can be forced to pay for them more than the market conditions warrant. . The disastrous results of the action of the Farm Relief Board in the United States of America, and the holding policy of the Canadian pool, furnish ample evidence of the dangers associated with the setting up of an organization to co-operate with persons who hold these ideas.
Another advantage of the bill, according to the Minister, is that by centralizing the handling under one authority, certain economies would be effected, because there would be fewer agents at country sidings, and that, generally speaking, the overhead would be lower. Undoubtedly, that is true. A monopoly, if perfectly managed, can make some slight economy in that direction - possibly id., or even £d., a bushel over the whole crop; but the loss of efficiency in marketing and handling which is ensured by competition would far and away offset any advantage that might be gained in that direction. I have the prices paid by pools in Victoria and South Australia during the five-years period 1924-25 to 1928-29, as well as those that were paid by the merchants. The latter have been taken from the merchants’ books, which have been audited by public accountants of standing; and from my experience, as well as that of individual farmers who are neighbours of mine, I have no reason to doubt their accuracy. With the exception of last year, when certain farmers were induced by propaganda in Canada and the United States of America, to the effect that wheat was likely to rise, to hold their wheat, I know of very few cases in which farmers who have consistently sold their wheat through the open market have not received con- siderably more than those who have pooled their grain. According to the published returns, the average of the prices paid by merchants in South Australia has exceeded in every year that returned by the pools. In 1926-27 when the difference was least, the price paid by the pool was 5s. 1.75d. compared with 5s. 2.86d. by the merchants. The biggest difference was in 1924-25, when the pool paid 5s. 3.19d., and the merchants 5s. 9.51d. In Victoria the pool has a better record. In 1926-27, it returned lid. more than was paid by the merchants, the respective prices being 4s. 11¼d/ and 4s. lOd. But in every other year for which the figures are available, the merchants paid a bigger price than was returned by the pool, the greatest difference being in 1925-26, when the pool returned 5s. 6-£d., and the merchants paid 5s. 10.87d. The figures for last year are not available.
– They were so preponderating^ in favour of the pool that the merchants would not make theirs available.
– I am not aware that they were challenged to make them available. In Western Australia, the pool is on a very much better footing, and over a number of years its returns have frequently been equal to, or better than, the prices paid in the. open market. The figures that I have given prove the value of the open market system to the farmers. It is not because of any affection for the merchants, or any sympathy for the system, but merely because the prices received in the open market have been greater than those returned by the pool, that I am reluctant to see a measure like this become operative, compelling farmers to sell their wheat through a centralized authority.
Those are the advantages which the Minister has claimed will accrue to the farmer if the bill becomes law; but, as I have pointed out, they are unreal and not likely to prove of very much assistance to him in his present serious position. I have already said that, of, the hopes which the Minister has held out, that which is most attractive to me, and, doubtless, also to every grower of wheat, is that a home price could be obtained for the wheat sold for local consumption. It is that argument which I wish to examine particularly. Nobody who has the slightest. acquaintance with farming districts can possibly doubt that a substantial form of farm relief is necessary to-day. On previous occasions it has been urged by some, honorable members who sit on this side that the exchange should no longer be pegged, but that the farmers should be allowed to derive the benefit of the free operation of the exchange market. Unfortunately, that was not done until a certain amount of wheat had been sold this year. Unquestionably, since the exchange has been allowed to go to its natural limits, the bounty upon export which it has given has been of immense benefit, not only to the wheat-grower, but also to every primary producer who has had a surplus for export.. I believe that, from the point of view of all exporting industries, the maintenance of a free exchange is the most important consideration to-day. But in the case of wheat, that alone is not sufficient to enable the industry to carry on in safety. I have not been able to obtain the figures relating to bankruptcy over the whole of Australia during this year, but I have them up to the end of the third quarter for South Australia. Whereas two years ago, out of 305 bankruptcies in that State only 48 were farmers and graziers, last year the number rose to 87 out of 508; and for the three quarters of this year, for which I have the figures under two schedules only of the Commonwealth Bankruptcy Act, the proportion was 191 out of 513. That discloses a very serious state of affairs. In addition, over 300 farmers have been granted protection under the State Debt Adjustment Act, and over 4,000 have found it necessary to obtain relief from the Government for the purpose of cropping their land this year. That cannot be called drought relief; it is farm relief, because last year, although there was a drought in certain districts in South Australia, the season was a fair one over a big proportion of the wheat-growing areas of the States. It is interesting to note that the number of farmers needing assistance in districts with an assured rainfall has risen out of all proportion to the number in drought districts. In 1928-29, about 2,000 applied for relief, of whom about 1,700 were resident in the twenty drier and less pioneered portions of the State. That is to say, between 85 per cent, and 86 per cent, of those who required assistance to crop their land for next season were in districts that were in process of being pioneered or that had suffered from drought. In 1929-30, the number of farmers who applied for relief was 4,290, SI per cent, of whom were in those same twenty counties which suffered from drought or were in process of being pioneered. This year, 4,100 had to apply for relief to crop their laud, but 32.4 per cent, of them were situated outside of ‘those twenty drier counties. The proportion has dropped from 85.7 two years ago to 67.6 this year, showing that general economic conditions, as well as drought and pioneering, have landed the industry into its present serious difficult state. The exchange is doing something to help; but what else can be done? In a large number of cases, where a farmer is in debt, it is bad for the majority of his creditors if one creditor is able to push him into bankruptcy. Such a course of action leads to a change over in the management and working of the farm, a lower return to the remainder of the creditors, and the absolute ruin of the farmer. That situation can be provided against, to some extent, by State legislation allowing delay and discretion in certain cases. Such legislation is in operation in South Australia and Western Australia, and has been, of great benefit. But the farmer needs more than protection from an unreasonable creditor; he needs finance to help him carry on. Not only is that true of the farmer who has been dragged so low that he cannot otherwise continue his industry, but others must have assistance to prevent them from getting into the same desperate straits. It is suggested that this bill will enable the farmer to extract from the more prosperous sections of the community, in respect of the wheat sold for local consumption, a price which will permit of the payment of a bounty on the wheat exported. Such a bounty, however small, would be of benefit to a very large number of farmers.
– Hear, hear! Because the whole amount would be net to the growers.
– That is an attractive feature of the bill, but I do not like certain other clauses of it - those providing for compulsion and monopoly, and for forcing the farmer into a system of controlled marketing which in the past has not returned a price equal to the open market. There will also be the danger that people will act on the suggestion by the Minister that they should endeavour to corner the world’s wheat in order to be able to raise prices. Is it necessary to pass a bill of this character, with all its disadvantages, in order to secure a small but valuable bounty of a few pence per bushel? It is not. The bounty, if it results from fixing the price of wheat for home consumption, will be paid by the consumers of Australia. The fact that it will be collected by the farmers through the proposed organization does not justify the contention of the honorable member for Wimmera (Mr. Stewart) that the marketing is still to be left to private enterprise. The business is to be handed over to a centralized authority, and the farmer will be compelled to market his wheat through one organization.
– But not a governmentcontrolled organization.
– An organization that can only operate as a result of parliamentary action, and on which the Government will be represented. The same economic result could be obtained by means of a sales tax, as suggested by Professor Perkins, and approved by the South Australian Government. There would be government taxation in order to pay a bounty, but that would be less of an entanglement to the industry than compulsorily bringing it under the control of one centralized power. To my mind, the latter proposal is vastly more bureaucratic and suggestive of public control and socialism, than the simple process of imposing a tax and applying the proceeds to the payment of a bounty in the same way as bounties are paid to other industries.
– But it would not be such a simple process to pay the bounty to the individual farmer.
– The process would not be complicated; the channels through which wheat passes are comparatively few. I do not see any need for introducing an element of compulsion in order to enable the farmer to take out of the pockets of the consumers a subsidy or bounty which could be effectively, and more simply, provided by the imposition of a tax which would retain the healthy factor of competition, and the existing standards of comparison. The farmer would still have the choice between selling his wheat outright and pooling it. If ho is deprived of that choice, some honorable members opposite may derive some satisfaction, but the outlook of the farmer will not be improved, because once the present buying agencies are closed they will not be likely to operate so economically again if at some future date the growers decide to revert to the alternative system. I am aware that the supporters of the bill do not contemplate that once this system of compulsory pooling is adopted, there will be any reversion to the old open market. The last wheat marketing bill was limited to a period of three years. In this bill no time limit is proposed. Possibly it is intended to make the agreement for a shorter period than three years; on the other hand it may be for a longer period.
– The period could be specified by the State legislation creating the State boards.
– This omission could be rectified in committee. On the whole, the bill is simpler than its predecessor. Every honorable member, probably the Minister for Markets (Mr. Parker Moloney) as much as any other, regrets that the measure does not provide for a guarantee. Apart from that shortcoming, the minor alternatives are improvements. One is the provision for a ballot of the wheat-growers. I would like to see inserted some safeguard specifying the majority which will be necessary to coerce the minority. Some honorable members may think that a bare majority will be sufficient, but I do not agree with that in relation to either local option polls or ballots of farmers.
– Would not that be governed by the State legislation providing for the ballot?
– We cannot dictate to a State Parliament.
– I submit that this Parliament is dictating to the State Parliaments, and rightly so. The Federal Government will not make ah agreement with a State in which no poll of the growers has been taken. That is one condition we are stipulating, and we could, with equal propriety, declare that a poll shall not be the cause of coercion unless the affirmative is declared by a substantial majority.
– That is a matter to be left to the individual States.
– On that subject there will be difference of opinion. In New South Wales the extent of the requisite majority has been altered by one government after another. Probably that was an important factor in arousing the suspicions of the farmers of New South Wales in connexion with the recent poll regarding the proposed State pool. They might have thought that the Government was making it easier for them to fall “into the pit, and those supporters of the pool who asked Mr. Lang to help them to coerce their fellow farmers, were not only unfair, but were also guilty of a grave tactical mistake. If the House inserts an amendment declaring what majority will be necessary to bring the pool into operation it will further improve a provision that is already a. considerable advance on that in the former bill.
The Deputy Leader of the Opposition (Mi Latham) and the honorable member for Wimmera (Mr. Stewart) have already referred to the alteration in the final clause of the schedule. In the former bill, paragraph c contained the words “from an excess in the average price enjoyed in respect of wheat of the 1929-30 season “. In this bill there is no reference to a specific season, the words “ any season “ being substituted. That alteration must have slipped in unnoticed by the Minister. I do not believe it is his intention to create watertight pools in each State, so that the farmers there can take full advantage of the price they can extract from the local market. That would give an exceptional advantage to the farmers in the more populous States, and I cannot imagine any honorable member supporting such a principle.
I urge the Minister not to press for a compulsory pool as the only terms on which the Government is prepared to assist the farmers. He has already declared that the defeat of the previous wheat marketing bill absolved the Government of any further responsibility to help the farmers, and that a compulsory pool was the only means by which the Government was prepared to cooperate. On that proposal the farmers are most acutely divided. I know that the Labour party may derive certain advantages by having a proposal for a compulsory pool well to the fore at election time. It will divide the farmers, and, by so doing, may confer some advantage on Government candidates in country constituencies. But we shall not get the nation out of its difficulties if we try to score tactical advantages over each other in that fashion. Our responsibility is to enable the. primary producers to continue to produce under conditions which will not involve their ruin. The honorable member for Wimmera referred to the spirit in which the Government’s proposal to pay 3s. per bushel for wheat wai introduced last December.. I believe that the Ministry did then make some effort to help the farmers without party consideration. Certainly the Minister for Markets was absent from Australia. Also I believe that the regulations which it proposed to issue were not fair to the wheat merchants, but I think it will be admitted that it did not attempt to use our wheat farmers as a pawn in the game of party politics. I now appeal to the Minister in charge of the bill to drop the compulsory pool proposal and get back to that spirit, and assist our farmers by means of a sales tax on flour or in some way that will enable our wheat-growers once more to become the mainstay of the nation.
– I am sure all honorable members regret that owing to financial difficulties the Government is unable in this bill to provide for a guaranteed price to our wheat-growers. That proposal was included in the measure introduced last year, but it was rejected in another place.
– Parliament passed a measure last December to pay our farmers 3s. a bushel for their wheat.
– The honorable member for Swan must admit that the Government did its utmost to give effect to that undertaking, but because of constitutional objection, the Commonwealth Bank was unable to provide the money.
Honorable members on this side of the House are just as anxious as are honorable members opposite for the welfare of our primary producers. I appreciate the remarks of the honorable member for Wimmera this evening concerning the efforts of the Government in the latter part of last year to assist our wheat farmers over an extraordinarily difficult time. The honorable member himself rendered valuable service in connexion with the scheme to pay our farmers 3s. per bushel; but, as I have said, the constitutionality of the proposal was challenged, and the Government was prevented from giving effect to its policy. But this House is not finished with that scheme. If the necessary finance is forthcoming from the banking institutions of this country following the adoption of the general plan for the rehabilitation of the Commonwealth, it may be possible for the Government to give some assistance to our wheat-growers. Every one who has travelled through the country districts in all the States knows that our wheat farmers were never in as pitiable a plight as they are to-day. This season some of the men who pioneered the mallee district of Victoria, have not had sufficient money to buy themselves a suit of clothes.
-What is this Government promising them now?
– This bill, if carried, will enable them to control their own marketing arrangements and secure for themselves the full profits of their labours. At present the great majority of our primary producers are in a poverty-stricken condition. Thousands are being assisted by State governments, local storekeepers, bankers and other business people. One of their most serious disabilities is their lack of organization. This bill will bring them together in a scheme which should make it possible for them greatly to strengthen their position as suppliers of the nation’s principal staple product, and I am hoping that the day is not far distant when our wheat-growers, our dairymen and all other primary producers will be combined in an organization sufficiently strong to enable them to charter their own vessels, market overseas their own surplus products, thus ensuring to them selves the full results of their labours, and import their own requirements. This should be their objective. It has been said that the wheat-buying agents have always been the good friends of our wheat-growers. I have nothing to say against the wheat merchants personally. It is their business to buy our farmers’ wheat, sell it through their own organization and pocket the profits. We argue that these profits should go into the pockets of those persons who produce the commodity. There is no competition in wheat buying in Australia other than competition due to the operation of voluntary pools in certain States against the three principal wheat buying agents - Darling and Company, Dreyfus and Company, and Bunge and Company. The two last-named are not Australian firms, and bring no capital into this country.
– They bring a great deal of capital into Australia.
– About £100,000 per annum at the most. One shipment of wheat enables them to continue buying without further cash, and they take the rest of their earnings out of Australia. Darling and Company has been long established in this country, and, as wheatbuying firms go, deals as fairly with the farmers as does any other concern. 1 take strong exception to these foreign companies coming to Australia and using their influence against the establishment of wheat pools. There is no denying that they are doing so. The following press paragraph sheds some light on the subject : -
” Merchants Have Won.” not Farmers’ Opinion.
Commenting on the defeat of the wheat pool ballot, the general president of the Farmers and Settlers Association (Mr. H. K. Nock) said the merchants had won, but he was not prepared to interpret the vote as an indication of the farmers’ opinion on the question of marketing their wheat through a boardon which they had a majority control. “The fact is,” said Mr. Nock, “that farmers have been stampeded into an ambush by a huge amount of money spent to work upon their psychology. In 1929, when Mr. Bruce faced the people on the issue of ‘ leaving arbitration to the Status/ the Opposition convinced enough people that the issue was ‘the abolition of arbitration,’ and turned his party out of office, and it was not surprising that in this wheat pool ballot the daily anti-pool douche over the air, the half-dozen night addresses by wireless and eight different circulars sent direct to farmers on rolls, including the contemptible faked communistic circular, should have some effect.”
Those firms have taken a prominent part in defeating many of the efforts to establish wheat pools in Australia. They have no interest in this country.
– They have done nothing to build up industry in Australia. They are very wide awake’ gentlemen, who make money out of the fluctuating exchange rate, as well as from wheat transactions. If the honorable member for Warringah (Mr. Parkhill) desired to go to England, and he wished to have a bank draft for £1,000 available in that country, these firms would be only too pleased to accommodate him by exchanging cheques.
It is essential that we should give consideration to the serious position in which our wheat-farmers find themselves. They are practically poverty stricken, and the only way in which their condition can be relieved is by the inauguration of a national pool that will ensure their receiving the best possible return for their labour. If there is any possibility of this Parliament meeting its obligation with regard to the 3s. a bushel that was promised last year, it is our duty to see that that is done.
– I support the bill.
– I thought that the honorable member was opposed to it.
– I have always been a consistent supporter of compulsory pooling. There are one or two things in the bill with which I am not satisfied, particularly the equalization clause, which I think is a stumbling block to the success of the scheme. We shall have an opportunity to deal with those matters in committee.
I do nod propose to go into the history of the various bills that were introduced into this Parliament last year in connexion with the wheat industry. One cannot doubt that they aud the present measure were designed to bring about a better system of marketing for Australian wheat, and also to provide guarantees. I disagree with those who suggest that, this bill will not confer any advantage upon the wheat-farmer. Certainly, it does noi provide a guarantee either for a fixed amount per bushel, or for a first advance. Practically every other wheat bill that was brought down, did so. Because of the existing financial position, I can excuse the Government for not incorporating a similar provision in this measure.
The wheat-growers of the Commonwealth have never been in such desperate straits as they are in to-day. In certain districts a drought, which continued for several years, was followed by an excellent* harvest last year, but the price obtained was insufficient to meet the needs of the season, let alone enable the growers to make up the losses incurred during previous seasons. Following those deplorably low prices, the growers of Victoria and New South Wales are now faced with a condition of affairs worse than that encountered by them for at least twenty years. In the district that I represent, there are scores of thousands of acre3 under water, in some cases to the depth of 6 feet. Drills and implements of all descriptions are submerged. Hundreds of thousands of acres are at present unsown. I should say that, at the present time, not more than 30 per cent, to 40 per cent, of the area represented by me is seeded, while not more than 40 per cent, of the whole of the wheat-growing area of Victoria has been seeded. So that, in all probability, we shall have a. very light area under crop next year, with every likelihood of low prices obtaining.
Undoubtedly, a compulsory pool would be of great value to our farmers. There is no way by which the net average price for the total crop can be increased except by a Commonwealth compulsory pool. I do not suggest that a pool, and particularly an Australian one, will materially increase prices, but it will certainly effect big savings in selling and chartering, by eliminating competition. This afternoon, the Deputy Leader of the Opposition (Mr. Latham) said that a pool would eliminate competition in buying. Competition in buying has probably been a good deal stronger since the inauguration of wheat pools than it was before their advent. Then there were only four or five buyers in the whole of Australia, and they had the growers at their mercy. So far as my memory takes me back, in almost every instance during the selling period from December to February, when deliveries were made and farmers were at their wits’ end to know how to meet their bills, prices were low. The more they had to sell, the lower were the prices. Those who could afford to hold their wheat until June, July, August or September, obtained another 6d. or ls. a bushel for it. My experience is that the price went up immediately the merchants got hold of all the wheat.
– The merchants keep the pools “ up to the collar “.
– The pool keeps them “up to the collar”. Even supposing we have to accept a voluntary pool, the position will be the same; a pool is necessary to keep the merchants “ up to the collar “. I have no grouch against the merchants; hut I say that they have served their time and generation, and should be eliminated. The sooner we get rid of them the better. Would these men spend tens of thousands of pounds in intense propaganda unless there is something for them in the handling and marketing of wheat? We have their competition in buying; we have it in selling; we have it in buying freight and chartering vessels. Their competition is no good to us. Not only is there the competition of the merchants ; there is also competition between State and State. The pools of New South Wales, Victoria and South Australia are all selling wheat in the open market; they are competitors in the chartering market. The result is that chartering rates are raised. If the farmer is to get any advantage we must eliminate these things. In my opinion, the outlook for the wheat-growing industry is not bright, and will not be bright for some time. Some of our best markets have been practically closed to us. France, for instance, has imposed a duty of 10s. 6d. a bushel on our wheat, and has also practically shut out our butter. Italy has passed a law which provides that 95 per cent, of the wheat gristed in the country must be home grown. That allows only a 5 per cent, admixture of foreign wheat. Had it not been for the strong demand for wheat from the East, particularly China and Japan, Victorian farmers would have been in a very much more serious condition than they are in now. The honorable member for Wimmera (Mr. Stewart) was a little wrong in his references to the sales of wheat in the East. I know that he would not intentionally make a mis-statement, but when he suggested that we were selling wheat there for about 5d. a bushel below the Canadian price he was wrong. We sold very early in the year at prices which now appear to have been almost fabulous. We made extremely good sales to China and Japan ‘ and other eastern countries. Whether our trade with those countries will continue remains to be seen. If the price of wheat advances considerably we might not be able to retain the whole of that market. There is no doubt that the cheapness of the wheat appealed to the people of those countries. Since the opening of the year wheat has been sold ai very much lower prices than were realized for the wheat sold in November and December.
– I take it that that market, is entirely dependent on low prices?
– It may be that the people of those countries have acquired a taste for bread, made possible by cheap wheat and flour, and that the market will be extended. Much will depend, however, on the price of the wheat. If it remains at from 2s. 6d. to 3s. a bushel, we should have a good market in those countries. Were it not for the enormous stocks of wheat held in the principal wheat exporting countries, Ave might speedily see a return to payable prices. Australia can grow wheat in fair competition with any other country; but the wheat-farmers of this country cannot continue to sell it at 2s. a bushel or less. If we want to make a success of wheat-farming, we must make arrangements with other countries for the organized marketing of wheat. Just as it is necessary for New South Wales, Victoria, South Australia, and Western Australia to form one Commonwealth pool, so it is necessary for all the wheat-exporting countries to come together in a world-wide movement. I believe that in years to come - probably not in the immediate future - the wheatexporting countries of the world will make such an arrangement. It may be difficult, but until these countries become united for the preservation of their primary industries, particularly wheat, the full benefit of wheat pooling will not be realized. I should like to see legislation introduced to deal effectively with the worst parasites - not the merchants, but those who deal in futures and options. These men, who rig the markets to suit themselves, are the greatest curse on the face of the earth, so far as the wheatgrower is concerned.
– That class of business is carried on extensively in Canada.
– lt is not carried on so extensively there as in the United States of America. Unfortunately, these operations have extended to Australia. I could give instances of men in Melbourne who have got into deep water through dealing with options. So far as my experience goes, trading in futures and options always operates to the disadvantage of the wheat-grower. I do not know whether it will be possible to introduce legislation to prevent the sale and purchase of options in Australia; but if legislation along those lines were introduced, I should support it because of the beneficial results which would accrue.
I agree with the clauses which provide for all finance being conducted through the Commonwealth Bank. The Rural Credits Department of that bank has been of inestimable value to the primary producers of Australia. It has been able to meet every legitimate call made upon it by the largest organizations of primary producers. Speaking on behalf of the Victorian wheat Growers Corporation, I can say that that organization has received the most sympathetic consideration from the bank. Moreover, the advice and help of the chairman of the Commonwealth Bank, ‘Sir Robert Gibson, have always been at the disposal of the organization. On behalf of two organizations with which I am associated, I desire to express appreciation of the consideration and help received from the bank during a particularly difficult period. Last week, before the other banks made any announcement of their policy, the Commonwealth Bank announced its decision to reduce the interest rate from 6 per cent, to 5 per cent. It will be seen that the Commonwealth Bank lost no time in passing on to those organizations the advantage it had obtained. I am opposed to the business of the pool being transacted by any other institution than the Commonwealth Bank. I understand that the Western Australian pool is being financed through the Overseas Farmers Federation. There are two such societies overseas. One is called the Co-operative Wholesale Society of Great Britain, and this finances the Western Australian wheat pool. This society does extensive business with Russia, and last year imported large quantities of Russian wheat. I am entirely opposed to this organization being allowed to finance this pool, or any pool. It should be done through the Commonwealth Bank. There is another society known as the Overseas Farmers Co-operative Federation, which, with Berry, Barclay and Company, acts as selling agents for the Western Australian, South Australian and New South Wales pools. I do not wish these two organizations to be confused. One is a very worthy body, but with the other I would have nothing to do. No overseas agent acting on behalf of the pool should handle other than Australian wheat. I hope the Minister will take notice of this, and have a clause inserted in the bill to the effect that any agent handling overseas Australian wheat on behalf of the poo.l shall not handle any wheat other than Australian. The Australian Wheat Board, established during the war, insisted that its overseas agents should confine themselves exclusively to the marketing of Australian wheat, and the same condition should be insisted upon now.
– Could not that be done through the control board?
– It would be better to have a definite provision inserted in the bill. I have here what purports to be a caricature bearing the title “ The fate of the wheat-grower under a compulsory pool “. The farmers have had so much experience in every State in the handling of wheat that they are as capable of performing this work as the merchants are. In this caricature ten or twelve lumpers are shown at a stack of wheat, some of them running away with bags, and others bringing them back, and still more falling over one another and getting in one another’s way. The figures are labelled “ inefficiency “, “ overstaffing “, “muddle”, “delay”, “bungling”, “rotten management”, &c. I invite any one who suggests that this comment is justified to visit Victoria, where last year the wheat pool handled between 70 and 80 per cent, of the wheat crop. Let him examine the stacks which now remain at any of the stations, and he will find that, so far as the stacking, covering, dunn aging, curtaining, supervision, handling, trucking, &c., are concerned, the pool is miles ahead of anything ever attempted by the wheat merchants. We have stacks to-day at one of the Wimmera stations which are so well made that one might be pardoned for believing that they had been bricked up and plastered, so nicely are they put together and so well has the mouse-proofing and stacking been done. Yet it is suggested that there has been bungling and inefficiency. I challenge any of the merchants to show stacks like ours. Complaints have been received by the pool authorities that stacks have fallen down, and that bags of wheat have been allowed to lie in a foot of water, but when ‘the complaints were investigated it was found that the stacks did not belong to the pool, but to the merchants.
I do not suggest that a pool can materially raise prices, but it can eliminate waste, inefficiency, overlapping and duplication of services. It can secure a local price, which is almost impossible without an “ all in “ pool. It can eliminate competition in chartering and selling, which should be worth a lot to the wheat-growers. It can readily be imagined what happens when there ‘are ten or a dozen buyers in the market for freight, and the same number of sellers pressing sales at the same time. I do not propose to deal at length with the unfair and untruthful propaganda indulged in by the associated wheat merchants. It is sufficient to say that the farmers’ organizations in the various States have nothing to learn from them, either in the marketing or handling of wheat.
I have here a letter published in the Argus, and signed “ Steven Black “. It reads as follows: -
The Victorian Wheat-growers Corporation is sending out accounts asking for a refund of freight overpaid on account of tlie 1929-30 wheat pool. This was a first payment clear, and freight and handling charges were, as in all other pools, to come out of the second or later payments. It was never suggested that freight was to come out of the first payment. Had the corporation sold the wheat at the beginning of the season it would have realized more than sufficient to pay all expenses, but it hung on to the wheat, and a big fall in price occurred toward the end of the year, and it lost about 3Jd. a bushel.
The open market was about 3d. a bushel better than tlie pool, and it is every year. Hundreds of farmers have become bankrupt, or have given up farming since then; they will refund nothing. If they escape why should others have to pay in full, and in what way have the directors and officials suffered for their management? In my opinion, a compulsory pool will be the end of wheat-growing in Victoria. A voluntary pool competing against the open buyer makes that competition in trade that is so desirable for all farm products. At the present time stacks of wheat in tlie country, which should have been sold long ago, are being riddled by mice, and much expense has been incurred in cleaning and rebagging. Wheat cost 2s. lOd. and 2s. lid. a bushel some weeks ago. Why was not this wheat marketed then? Farmers should strongly oppose any building of silos at country stations. They would be good at seaport, and the empty bags could be sent back to the farmers for further use.
The following reply was sent to the Argus by Mr. C. Judd, manager of the Victorian Wheat-growers Corporation.’ -
With reference to the letter appearing in Thursday’s issue of the Argus, signed “ Steven Black, Picola “, I find we have no record of any dealings with any Mr. Black in that district. Ou,r agent at Picola, who knows every grower there, advises there is no such person in the locality, and the postal authorities confirm this.
If “ Steven Black “ establishes his identity better than this we will give consideration to his letter, otherwise we will have to ignore it as insidious propaganda, engineered against the pool.
Although the Argus printed the letter signed by Steven Black, it has so far refused to publish the reply sent by the manager of the Victorian Wheat-growers Corporation, although it has been communicated with on six different occasions.
The merchants have stated that the failure of the Canadian wheat pools, and their inability to attain their objective, resulted in a loss estimated at £15,000,000, and that this constitutes an. excellent reason for warning our farmers against trusting their fortunes to a similar experiment. This statement was refuted by Mr. A. Cairns who, addressing the Agricultural Committee at the Canadian House of Commons, said that the pools owed between them £4,200,000 and £5,000,000, and that satisfactory arrangements had been made between the pool and the prairie governments regarding their financial obligations. The pools are to pay the money guaranteed to the banks, and are to be repaid out of the pool earnings and the operations of the elevators. This money would be obtained without taxation of pool members or farmers. The assets of the pools - elevators, equipment, buildings, &c. - exceed pool liabilities. So much for that lie. The merchants go on to say that the United States of America has also suffered colossal losses. Here is the contradiction. I quote the following from the Western Producer: -
Chairman J. C. Stone of the United States Federal Farm Board’ said last week a crash in wheat prices which would have “ cost this country as a whole billions of dollars “ had been averted by the board stepping into the wheat market last November. He asserted the board’s stabilization operations in wheat and cotton had been fully justified by the results. Stone told the American Institute of Cooperation it was the opinion of the board that the price of wheat in Chicago would have dropped to 50 cents a bushel or lower if the board had not come forward to bolster prices. Concerning the stabilization operation, Stone said 100,000,000 dollars could be entered on the credit side of the balance-sheet, representing the difference between the world price and thu price of all United Sta.tes wheat sold from November to the end of the crop year. “Then on the debit side, suppose we lose in the sale of wheat 20, 30, or even 50 million dollars, I have never seen the time when I would not swap 50 million dollars for 100 million.”
A further statement by the wheat merchants is that the Canadian farmers have been given an option, to sell in the open market. That is an absolute untruth. In reply to a cable sent by the Victorian Wheatgrowers Corporation, the following cablegram was received on the 9th June, 1931:-
Owing necessity small initial payment, Manitoba pool giving members option voluntary pooling or selling outright through existing pool organization.
In Canada there are three pools, the Manitoba, the Saskatchewan, and the
Alberta. They are all contract pools except that in the case of the Manitoba pool, owing to the lower initial payment, the farmers of Manitoba were allowed to pool their wheat voluntarily or sell it through the pool organization, but not on the open market.
It has also been suggested that very big losses were sustained by the Australian pools during the war period. I admit that huge losses were sustained during that period, but taking ail the poo.(s and the gains against the losses, more bushels were sold than were actually received notwithstanding the loss. There certainly were losses when the pools wen. under the control of men who had neve] previously handled wheat in such large quantities or for such long periods, amounting, in some instances, to several years. It is true that the losses sustained through the mouse plague or weevil, destruction could hardly be laid at the door of any individual, but any blame attachable to the management of the pools must lie at the door of those who were acting as advisers to the pools at the time. The experience gained during the working of those pools has proved invaluable to the farmers who are now competent to manage the handling of their crops in every department. As a matter of fact, each State has a pool with a trained 3taff with from ten to fifteen years’ experience. There need, therefore, be no fear of a compulsory pool running amok.
There are many things I should like to say in regard to certain carry-overs in the United States of America, and in reference to the position in that country, which is really desperate, but I prefer to dwell for a few moments on the proposed equalization scheme. It will be noted that the final paragraph of the schedule to the Wheat Marketing Bill Bo. 1 read as follows : -
Provided that prior to the effecting of such’ equalization any geographical or other advantage enjoyed by a State before the coming into operation Of the scheme may be taken into consideration and accounted for to the State Wheat Board concerned accordingly.
It has been altered in this bill to read -
From an excess in the average price enjoyed in respect of wheat of any season sold for use or consumption within the State over the average price of Australian wheat of that season sold for export.
I would suggest that the words “ average price enjoyed in respect of wheat of any season “ cannot he allowed to stand. Otherwise we could go back and say that in some years we could have a betterment of 3d. a bushel in the price for local consumption over export parity. New South Wales, at any rate, might show a betterment of 2£d. a bushel. It seems to me that there is only one method to adopt. Western Australia is inclined to stick to the advantage of its geographical position which amounts to about ¾d. a bushel, or from £110,000 to £115,000 on the total. The estimated yield for the four wheat producing States, New South Wales, Victoria, South Australia, and Western Australia for this year is 40,000,000 bushels for Victoria, 40,000,000 bushels for New South Wales, 40,000,000 bushels for Western Australia, and 32,000,000 bushels for South Australia. If New South Wales were to pay into the pool ls. a bushel on 14,000,000 bushels for local consumption, it would mean a payment of £700,000, and the amount drawn out by the State under the equalization scheme would be £360,000. It is quite likely that the local price may be advanced 2s. Assuming that the seaboard price is 2s. 6d., and the price for local consumption is raised to 4s. 6d., New South Wales would pay into the pool on local sales approximately £1,400,000, and under the equalization scheme would take out £720,000. Victoria, on a local consumption of 9,000,000 bushels at ls. a bushel, would pay into the pool £450,000, and take out of it £360,000, and at 2s. a bushel would pay in £900,000, and take out £720,000. South Australia, on an estimated local consumption of 2,500,000 bushels, at ls. a bushel, would pay in £125,000, and take out £310,000, and at 2s. a bushel would pay in £250,000, and take out £620,000. Western Australia, on a home consumption of 2,500,000 bushels, at ls. a bushel, would pay in £125,000, and take out £370,000, and at 2s. a bushel would pay in £250,000, and take out £740,000. Western Australia would take out of the pool £20,000 more than Victoria and £20,000 more than New South Wale3, although it paid in £650,000 less than Victoria and £1,150,000 less than New South Wales. It could also get the advantage of $d. a bushel, ‘because of its geographical position, this being equal to £120,000 or £125,000. Western Australia would thus, under the equalization scheme, pay into the pool £250,000, and, taking it3 freight advantage, draw out of it £860,000 or £S65,000.
– Is that why the honorable member wishes to force Western Australia into a compulsory pool?
– I want to get a sufficient number of States to form a compulsory pool, which, in view of the decision of the New South Wales farmers, cannot be formed without Western Australia. New South Wales has practically withdrawn from the pool.
– New South Wales has not withdrawn from the pool.
– The farmers of that State have voted against a compulsory pool.
– That was a State compulsory pool; they have not voted against a federal compulsory pool.
I throw out tlie suggestion that each State should retain 50 per cent, of its betterment or extra amount realized on sales for local consumption, the other half to go into the general pool. Then, assuming that the local price was 2s. a bushel above the overseas price, the extra amount realized on local sales would provide £900,000 in Victoria. Under my suggestion, Victoria would pay £450,000 into the equalization fund and draw out £298,578, while Western Australia would realize an extra £225,000, pay into the general fund £112^500, and draw out £302,725, plus her advantage with respect to overseas freight.
– That is all on the assumption that the price of wheat remains unaltered.
– Whether the price rises or falls, the same ratio will be preserved. Assuming that the extra amount realized on local sales would provide South Australia with £225,000, and half of that was paid into the equalization fund, that State would pay in £112,500, and draw out £240,522. Queensland would pay in £200,000 and draw out only £33,175. Therefore, it would be impossible for Queensland to go into the pool under that arrangement. If Queensland were left out, Victoria would pay in £450,000, and draw out £239,409; Western Australia would pay in £112,500, and draw out £242,734; while South Australia would pay in £112,500, and draw out £192,857.
I intend to vote for the bill, but, in committee, I will endeavour to make the equalization scheme more satisfactory than it now appears to be. If the bill is passed in its present form, Victoria will be required to pay into the equalization fund £450,000, and draw out less than Western Australia. Though I favour the establishment of a compulsory pool, I shall draw the attention of the farmers of Victoria to the fact that under the bill Western Australia would be paid at least 50 per cent, more than I consider she is entitled to. It is for the farmers themselves to decide whether they are satisfied to accept the proposal of the Government. I am not prepared to vote for the bill without informing the wheatgrowers, whom I represent, of the position as I see it.
– In that respect this measure is not different from the 1929-30 bill.
– The. last bill provided that the betterment to which any State was entitled could be taken out of any increased amount due to the local consumption price being greater than the export parity. Last year Victoria could reasonably show that for the previous two years it enjoyed a betterment of 3d. a bushel. Assuming that the local price had been raised ls. a bushel, Victoria would have paid 9d. into the general pool, and would have retained 3d. a bushel; but under the present bill it can retain nothing.
– But what if paragraph c of clause 12 of the. agreement is altered?
– If a satisfactory solution of that difficulty is offered by the Minister, I am prepared to support the scheme.
– I gave general support to the efforts of the Government to help the wheat industry with the single exception of the proposal to guarantee the payment of 3s. a bushel to the farmers by means of a fiduciary issue of notes, and I propose to support the present bill. This is essentially a matter which the farmers must decide for them-
selves. They ought to be able to make up their minds what they will or will not do, in assisting their own industry through their own organizations. I support this measure, not necessarily because I believe in compulsion, but because the farmers should bo permitted to decide what they want. I support the attitude taken by several of the speakers to-night who have addressed themselves to the vote just recorded in New South Wales. I do not regard that vote as indicative of the opinion of the farmers of New South Wales on the bill now before the House.
– I presume that another vote of the farmers of that State will not be taken ?
– I should like the Minister to clear up that point. Under this bill it seems that another vote may be taken on the matter, entirely divorced from association with the present Government of New South Wales. Is that so?
– It will depend upon the wheat-growers. They may wish to have another ballot.
– It will depend entirely upon the New South Wales Parliament.
– It will depend largely upon the wheat-growers. If they petitioned Parliament no doubt their request would be granted.
– By the State Parliament.
– If the wheat-growers of New South Wales wish to take another ballot on the proposals contained in this bill will they be able to do so?
– I should think so.
– If that is so, and another opportunity is afforded the wheatgrowers of New South Wales to vote on a compulsory pool entirely divorced from any association with the Government of New South Wales, and particularly such a disastrous government as that now in office in that State, the vote may be entirely different from that recently recorded. I do not propose to traverse to any extent the views I have expressed when speaking on the second reading of measures embodying similar proposals that have previously been before this chamber, as I realize that that is unnecessary and quite unjustifiable, particularly at this hour. I believe that this bill can be justified as an emergency measure at a time of national crisis, and when one of our greatest primary producing industries is in dire distress. I regret, as I have said previously, that the Government is still adamant in the matter of imposing a sales tax on flour in order to relieve the farmers. I seriously contend that that is its duty. “Why the Government should adopt such an irreconcilable attitude to the imposition of a sales tax on flour, particularly in view of the extremities which the wheat-farmers are now facing, is beyond my comprehension. To all intents and purposes this is a roundabout way of effecting the result which would be obtained by the imposition of such a tax. I do not know why the Government should so resolutely refuse to have any direct association with a sales tax on flour to meet the crisis in the wheat-growing industry. The opinion has been advanced in some quarters that the present difficulties in the industry could be overcome by reducing production; but that is a proposal to which I cannot subscribe. In this country we have to produce or “go broke”. As I know of no other commodity, apart from wool, which can be produced more successfully than wheat, every inducement that any government, Commonwealth or State, can give to increase the production of wheat should be offered. I intend to support the measure because one of its principal features is that the proposed compulsory pool shall be free from governmental control. Whatever the critics of the proposal may say to the contrary this measure provides for the establishment of an organization, free from governmental control, which will be under the direction of experts conversant with the growing and marketing of wheat. I am justified in believing that the wheat-growers are capable of conducting a pool, such as provided for in this bill, in a manner satisfactory to themselves and in the interests of the whole community.
.- I am a strong believer in the law of supply and demand, and in equality of sacrifice and equality of opportunity. But I do not believe that such a law should apply to only 10 per cent, of the community, and that the remaining 90 per cent, should not derive any of the advantages which it offers. That is lop-sided, unfair, cruel and unjust. The Deputy Leader of the Opposition (Mr. Latham) intimated today that, generally speaking, the law of supply and demand should apply in this instance. The wheat-growers have been subject to such a law only when selling their product, but when it is a matter of buying those commodities which they require, they are subject to the laws of this Parliament. The secondary producers in this country are protected by high tariffs; they do not sell their commodities in the markets of the world and, consequently, are not subject to the law of supply and demand. Even the labourers in this country do not sell their labour, which is the only commodity they have to offer, under such a law; their rates are determined by the Arbitration Court. They dare not sell it at less than the Arbitration Court awards. They are not subject to such a law. The wheatgrower who wishes to purchase a hat or a pair of boots has to pay 75 per cent, more than he would have to pay in the open market. He cannot obtain railway freights under the law of supply and demand, because the railways commissioners have to pay wages fixed by the Arbitration Court. His tools of trade are purchased at unnecessarily high prices, owing to the imposition of high duties, and no refunds are made. The freight charges on the Australian coast, which are always against him, are not regulated by the law of supply and demand, but are based on the conditions imposed under the coastal provisions of the Navigation Act, which operate to the detriment of the farmers of this country. Other nations which have been offended by the fiscal policy of Australia have set up reprisals against our wheat-growers. France, Germany, Italy, and Belgium have imposed retaliatory duties against us, although at present the balance of trade in our favour with those four countries is £39,000,000. I believe that under the compulsory pool there will be a great saving in the handling of wheat. There is a saving in the handling of wheat under the voluntary pool in Western
Australia, and 1 was glad to hear the honorable member for Wakefield (Mr. Hawker) acknowledge that that pool had given to the farmers a return in excess of the price paid by private buyers. If advantages are to be obtained under a 70. per cent, or 80 per cent, voluntary pool, surely the advantages would be much greater under a 100 per cent. pool. I was a wheat-grower before pools were established, and I found to my cost that the wheat merchants kept in constant communication by cable with the markets of the world. Frequently, they were in possession of information before it appeared in the newspapers. Their buyers would go to the country and offer a price to a farmer who probably had promissory notes falling due, 6d. or 8d. a bushel below market price, and the farmer had no option but to accept it. But since the advent of the pooling system the farmers have learnt that that system operates as efficiently as the system of the private wheat merchants, and at the same time the farmers gain the advantages which the merchants previously obtained. I am not saying that the merchants are rogues. They are keen business men, but we must do without them if we arc to compete successfully in the markets of the world. Another considerable advantage of the pooling system ia that there is one selling agent throughout Australia. Any buyer who wants to fill, say, a 10,000-ton vessel needs only to deal with the one seller, and when the deal is agreed upon a note is sent to the Bail ways Commissioner and immediately trucks are sent to railway sidings to pick up the wheat, and take it to the seaport to be transhipped direct from the trucks to the vessel. By that means there is a great saving in the cost of handling. Of course, wheat merchants are opposed to voluntary pools just as they were to compulsory pools. This personal interest is as old as man. St. Paul said that Alexander, the coppersmith, did him much injury. Alexander was making idols of brass and copper, and St. Paul was preaching against the worship of idols. That, of course, interfered with Alexander’s trade, so he set out to harm St. Paul. The wheat merchants whose business is now being undermined are en deavouring to harm the pooling system. The maintenance of the wheat-growers of this country is more important than the maintenance of the wheat merchants. I am rather surprised at the change of attitude on the part of the honorable member for Echuca (Mr. Hill). The Minister was quite right in saying that when the previous legislation providing for a pool was before the House the honorable member for Echuca was in favour of an equalization scheme somewhat similar to that which is now proposed. He seems to begrudge giving to the wheat-growers of the smaller States like South Australia and Western Australia any share in the benefit to be obtained from the greater local consumption in Victoria and New South Wales. The year before last, Western Australia bought, chiefly from Victoria and New South. Wales, £10,600,000 worth of goods; yet those States bought from that State only £1,200,000 worth of goods. I assure honorable members that that adverse balance of trade of £9,400,000 would employ a considerable number of people in Melbourne and Sydney. Western Australia is a unit of the federation, yet, according to the view of the honorable member for Echuca, it should derive no benefit from the increased consumption of wheat in Victoria and New South Wales, which has, to some extent, been brought about by that State itself. That attitude is one of the reasons why Western Australia desires to secede from federation. The honorable member has said that Western Australia has a geographical advantage, but whether there is a pool or not that advantage will remain, so far as the export of our goods is concerned. The geographical position of that State is a disadvantage to it as a unit of the federation; but any advantage that we derive otherwise from it is not subject to the whims of Parliament. It exists now, and will exist for all time. It ought not to be sacrificed in any scheme of equalization under which every wheat-grower within the Commonwealth should receive the benefit of the higher price charged for wheat sold for local consumption. The honorable member for Echuca quoted some figures that looked rather alarming. I remind this House, however, that he has based his assumptions on the present price of wheat. If the price remains where it is now, in a few years there will be no wheat-growers in Australia; but, if it should reach 4s. or 4s. 6d. a bushel, there will be no difference between local consumption and world prices. If the honorable member secures many followers in this House, the representatives of Western Australian constituencies will vote against this proposal, because it would be totally inequitable in a Commonwealth measure to make provision whereby some farmers would be deprived of the advantage of consumption within Australia. I take it that this Parliament desires to pass this legislation with a view to benefiting Commonwealth wheat-growers, not Victorian growers only. Western Australia grows more wheat than any other State, and is doing more than any other State to establish the financial stability of this country. It is only by the production of these commodities that we can hope to pay our way. No juggling with figures will accomplish the liquidation of our enormous debt ; that can be accomplished only by the production of wealth.
I intend to support the bill, so long as the Minister will stand fast to those principles which will make it a Commonwealth measure, and subject to the amendment being made to clause 12 (2) (c) of the schedule that has been referred to on three occasions. The present provision would prove unworkable. It ought to be definitely set out whether the reference is to one specific year or to the average of the past three years. I hope that the bill will have a speedy passage.
Debate (on motion by Mr. Archdale Parkhill) adjourned.
(Nos. 2 to 4, and 6 to 9) 1931.
Bills brought up by Mr. Scullin, and read a first time.
Motion (by Mr. Scullin) proposed -
That the bills be now read a second time.
Debate (on motion by Mr. Latham) adjourned-.
Commonwealth Loan : Contributions by Employees.
Motion (by Mr. Scullin) proposed -
That the House do now adjourn.
– During the debate on the Commonwealth Debt Conversion Bill, I referred to a practice that I considered should not be tolerated - that of a number of employees in an industry being forced by economic pressure to take up bonds in the last £28,000,000 conversion loan. I referred to one particular firm -the British-Australasian Tobacco Company - as having adopted that practice, and said that the matter had been brought under my notice “by the organization concerned.’’* At the request of the officials of the Tobacco Workers Union, I wish to remove the implication conveyed by the use of those last words. I want it to be understood that the paid officials of the Tobacco Workers Union did not bring the matter under my notice. I used the words “ the organization concerned “ in the sense that the employees actually on the job had brought the matter under my notice.
Question resolved in the affirmative.
House adjourned at 1 1.27 p.m.
Cite as: Australia, House of Representatives, Debates, 22 July 1931, viewed 22 October 2017, <http://historichansard.net/hofreps/1931/19310722_reps_12_131/>.